(What’s Left of) Our Economy: As Trump Tariffs Continue, U.S. Manufacturing Growth Steams Along

Tags

, , , , , , , , , , , , , ,

Claims keep getting made that President Trump’s tariffs-heavy trade policies have been hammering American manufacturing. (Here’s just one example from as recent as yesterday.) And government, economy-wide data keeps on coming out showing these claims to be complete bunkum.

Today it’s the Federal Reserve’s turn; its new industrial production report (covering December) make plain as day that metals-using manufacturing for the most part continues to out-perform the rest of manufacturing when it comes to inflation-adjusted output even though Trump metals are supposed to be crippling them with skyrocketing cost increases for key inputs. (As the latest producer price results made clear, almost none of that inflation per se can be detected, either.) And although the effects of the China tariffs are more difficult to unpack, what can be presented responsibly fails to reveal discernible damage since the first tranche was imposed.

Below are the numbers for manufacturing overall, and for industry’s main metals-using sectors. They show after-inflation output since April, since the steel and aluminum tariffs went into effect in late March. In addition to the April-through- December percentage changes, you can also see results through November as reported by the Fed last month, along with the revised through-November numbers, to provide a sense of the trends’ momentum. 

                                              old thru Nov       new thru Nov       thru Dec

overall manufacturing:        +0.80 percent       +0.94 percent  +2.02 percent

durables manufacturing:      +1.73 percent      +2.02 percent   +3.31 percent

fabricated metals products:  +1.61 percent      +1.94 percent   +2.05 percent

machinery:                           +5.11 percent      +5.55 percent    +4.93 percent

automotive:                          -1.46 percent       -1.32 percent    +3.36 percent

major appliances:                 -0.88 percent       -0.31 percent    +0.08 percent

aircraft and parts:                +3.27 percent      +5.29 percent     +6.80 percent

As you can see, the only category that’s experienced production growth problems has been the major appliance sector. February was the first full month during which these levies were in place, and since then, price-adjusted output has been off by 1.99 percent (versus a 3.93 percent improvement for manufacturing as a whole). But as the above table demonstrates, even they’ve been making a comeback lately. In cases like aerospace and automotive, the growth pace has quickened significantly, while in machinery, we see some growth fall-off.

Analyzing the impact of the China tariffs is tougher both because they started more recently (in early July), because they’ve been greatly expanded since then, and because Chinese inputs are used in and compete with such a huge number of domestically produced goods. Moreover, the government’s list of these levies uses a different industry classification system than the Fed uses for industrial production, and exact match-ups don’t abound.

So the below table, showing real output changes for some products tariff-ed since July, is a best guess, with the exception of farm machinery and equipment, and ball bearings. But more power to you if you see China tariff-related damage here.

overall manufacturing:                            +1.72 percent

aircraft engines and engine parts:           +5.42 percent

industrial heating equipment:                 +0.14 percent

oil and gas drilling platform parts:         +2.21 percent

farm machinery and equipment:             +3.29 percent

ball bearings:                                           -0.17 percent

Tomorrow, tomorrow, I love ya, tomorrow. You’re always a day away!” is a well-known Broadway lyric. As the new Fed industrial production figures demonstrate, “tomorrow” is also the best hope for the tariff alarmists to show that the trade curbs are in anyway undermining the American economy on net.

Advertisements

(What’s Left of) Our Economy: Mainstream U.S. Trade Policy’s Main Rationale Has Just Been Blown Up

Tags

, , , , , , , , , , , , , , ,

I’m always struck by how often in the news media or policy writing (e.g., in journals like Foreign Affairs), genuinely game-changing points are made in passing, and for folks with any interest in the trade and globalization issues raised to such prominence by President Trump. And two such instances dealing with this subject just came in the Financial Times newspaper and the website Project-Syndicate.org.

The observation they both made with mind-boggling offhandedness – economic growth in countries dubbed “emerging markets” (EMs) is slowing to rates no faster than those of the rest of the world, and thus rendering them incapable as far as the eye can see of replacing the United States as a global growth engine.

This claim matters decisively for trade policy because these EMs have dominated America’s approach in this field for more than two decades. First identified in the early 1990s, they consist of economies in the developing world that not only boasted enormous populations. But largely because communism and a heavy state role in economic policy had been so thoroughly discredited due to the end of the Cold War, they were steadily transitioning to more free market approaches, and thus were seen to have huge growth potential. China and Mexico were the leading examples, but various definitions of the main emerging markets also included India, Brazil, Russia, Turkey, South Africa, and others.

According to trade enthusiasts, this combination of characteristics was going to make the EMs so important that accessing their vast current consumer markets and even greater consuming and importing potential needed to be Washington’s top trade priority. Their significance was portrayed as all the more important given America’s status as a “maturing” economy whose growth was bound to continue slowing. (Former President Bill Clinton used exactly this term while advocating for an emerging markets push in a document that’s not on-line but that’s cited in my book on globalization, The Race to the Bottom. The document was the 1995 Report of the President of the United States on the Trade Agreements Program and it was published by the Office of the U.S. Trade Representative at the start of 1996.)    

Yet however impressive and promising they seemed, the idea was a crock from the beginning – at least in terms of its importance in driving American trade policy for the foreseeable future. EM cheerleading suffered two fatal flaws. First, despite rapid growth and immense growth potential, the emerging markets were starting from such low bases – especially in terms of their populations’ consuming power – that they wouldn’t become significant markets in absolute terms for many years at best. Second, precisely because they remained so poor and under-developed, their governments invariably realized that their own best growth opportunities came from exporting to much wealthier countries like the United States – where the needed consumption power already existed.

So why the EMs euphoria? As documented exhaustively in The Race to the Bottom, the multinational corporations that dominated American trade policy-making never saw the emerging markets as final consumption markets. They viewed them as super low-cost production bases from which they could supply the U.S. market much more profitably than possible from their domestic factories. Which is exactly why, starting with the pursuit of trade expansion with Mexico at the onset of the 1990s, American trade policy almost exclusively targeted the emerging markets and other very low-income countries (like Vietnam and the countries of Central America) for negotiating new trade deals.

Ohio Democratic Senator Sherrod Brown (a possible 2020 Democratic presidential contender) described the multinationals sales pitch to leading EM China somewhat too charitably when he said in 2015, “while walking the halls of Congress, [lobbyists for the multinationals] talked about they wanted access to 1 billion Chinese customers. What they didn’t say is they also wanted access to 1 billion potential Chinese workers.”

As The Race to the Bottom also made clear, EM touting was star-crossed from the start – even embarrassingly so. As it peaked, in the mid-1990s, many of these same countries started experiencing problems that led to major financial crises even before the decade ended. That is, their markets became evaporating, not emerging, and in numerous cases they kept afloat only by cheapening their currencies, limiting their own consumption and importing still further, and making them more powerful exporters than ever.

Yet the multinationals’ power and influence remained so decisive throughout America’s political (and media) establishment that emerging markets hucksterism continued to justify trade agreements with such countries. Hence the continued repetition of wholly misleading contentions like “95 percent of the world’s consumers live outside the United States” (which I debunked here).

So that’s why I was so interested to see the following in a Financial Times blog post – and by no less than a former senior official at the International Monetary Fund and another leading international economic institution:  

EM growth has slowed to about 4.5 per cent at present….In the long run, according to the OECD, the potential growth rate of the Briics (Brazil, Russia, India, Indonesia, China and South Africa — accounting for most of EM GDP) is expected to slow further, converging to mature market trend growth of 2 per cent. In other words, the growth advantage of more than 4 percentage points that EMs enjoyed over mature markets in the 2000-2010 period has narrowed to about 2 percentage points and will probably disappear in the long run.”

And guess what? Unlike in the United States, in particular, even much of this EM growth will rely on maximizing exports and minimizing imports. So their importance as markets for American-made goods and services will be even less impressive than this impeccably mainstream analyst suggests.

Equally startling: This Project-Syndicate column by Jim O’Neill. O’Neill, for the unitiated, was perhaps the highest profile EM cheerleader, and coined a popular acronym for those economies that described those he believed most promising: BRICS (Brazil, Russia, India, China, South Africa).

The former Goldman Sachs banker has remained a believer in China, and has actually added some countries to his list of economies he believes will loom much larger in this century. But in the column, he also argued that, if China falters in what he (wrongly, in my view) considers its role as a global growth engine, and the American consumer gets tapped out, none of the other emerging economies “is in a position to match the growth of Chinese consumption today, or even over the course of the next decade.” And by extension, the likelihood of these countries replacing the United States is even more infinitesimal.

Former French leader Charles de Gaulle once famously said that “Brazil is the country of the future…and always will be.” The two examples above show that the same solidly grounded skepticism is also finally seeping into the ranks of globalization cheerleaders. How long will it take before the American political, business, academic, and media establishments finally start paying attention?

Im-Politic: More Mainstream Media MS-13 – and Illegal Alien Crime – Double Standards

Tags

, , , , , , , , , , ,

Anyone still doubting that the Mainstream Media has turned into a brazen propaganda machine for Open Borders-friendly immigration policies, should ask themselves this: Why did The New York Times recently devoted a humongous article in its Sunday magazine to mistakes made by law enforcement on Long Island and elsewhere in the fight against Hispanic gangs like MS-13 – whose ranks are filled with illegal aliens – yet completely ignore stabbings by such gang members in the same Long Island community shortly after the magazine investigation appeared?`

The magazine article, by Hannah Dreier of the independent nonprofit investigative-journalism organization” ProPublica was clearly viewed as more than just another freelance piece by the publication’s editors. As they state, it was “a collaboration” between the two organizations. Along with its length, this relationship makes clear that The Times viewed the subject as an unusually high priority.

In the December 27 article, Dreier does a good job – along with whatever assistance the newspaper provided her – of making a case that the intensified anti-MS-13 drive on Long Island and elsewhere in the country has caught up innocents. She also makes a reasonable case that the problem is rooted in the Trump administration’s dissatisfaction with its predecessors’ approach to the problem which, in her words, takestime and on-the-ground work. Immigration agents spend months mapping out networks and gathering evidence using informants and wiretaps.”

Less convincing is her clear implication that this approach was remotely satisfactory, especially in light of her implicit acknowledgment that, while this more patient, more careful strategy was being pursued, MS-13 thugs on Long Island had

periodically taken part in brutal killings. In 2003, in Central Islip, members beat and stabbed to death a young man who they thought was a rival and stuffed his body in a drain pipe. Also in Central Islip, the gang shot a toddler and his mother in 2010 and left their bodies in a patch of woods.

In the last few years, Long Island’s MS-13 members and victims have gotten younger. In 2016, MS-13 gang members murdered five Latino Brentwood High students with bats and machetes. In 2017, the gang killed three more local Latino students and left their macheted bodies in a park in Central Islip. Some two dozen young men from Brentwood and Central Islip were eventually charged with the murders. A few were as young as 16.”

Also interesting: The author writes that “Many [Immigration and Customs Enforcement – ICE] agents wanted to arrest and deport suspected MS-13 members under President Obama. But they were constrained by an Obama-administration policy that required ICE agents to focus on undocumented immigrants who had committed serious crimes.” Meaning that Mr. Obama didn’t consider the above killings “serious crimes”? Just wow.

Indeed, writes Dreier, “President Trump took office at the peak of this local wave of violence” – hence his decision “that he was making the gang a federal law-enforcement priority.” The dragnet created by the Trump Justice Department and local law enforcement on Long Island (and in other communities that participated in such programs) has no doubt erred in instances. But there’s also no doubt that the old methods were failing.

In other words, I wish that Dreier (and her Times collaborators) had presented a much more balanced view of the situation and the results of the two strategies, but let’s grant that in a single article – even one as long as this one – has every right to maintain an overall emphasis.

It’s the follow-up – or, more accurately, its complete absence – that puts The Times in such a bad light. Specifically, on January 9 – only some two weeks after this magazine article’s appearance – two teenagers from one of the Long Island high schools on which Dreier focused were stabbed near a local fast food restaurant. The following day, the Suffolk County (Long Island) District Attorney charged that the three suspects arrested were MS-13 members, and all were illegal aliens. They all attended that same high school. For good measure, two of the accused assailants had been detained by ICE, which hoped to deport them, but were ordered released by federal judges.

Given the lengthy coverage The Times had just devoted to law enforcement mistakes, and given that Long Island is part of the paper’s home base, you’d think that a write-up of this incident would have been judged reasonably big news. Or any kind of news. But as of this morning – a week after the stabbings – not a single word about them had appeared in The Times.

Even stranger: In the weeks before Dreier’s lengthy article was published, the paper’s local coverage had run several articles on local MS-13 crimes. Its national staff has looked into the gang and its atrocities, too, but nothing as detailed as the Dreier “mistakes” piece has appeared. It’s in these national pieces, of course, that policy and policy debates are likeliest to be mentioned, and most such coverage stressed either that MS-13 isn’t such a big deal (e.g., here) or that its presence has little to do with illegal immigration and is being used by the President as a political prop (e.g., here), or that his descriptions of the Democrats’ views of the gang are misleading (e.g., here), that the president’s claims of progress versus its predation are exaggerated (e.g., here). And by now, it should come as no surprise that The Times has never published any item about victims of crime by illegal aliens, or about the failure of the pre-Trump programs in preventing such offenses, that’s been nearly as long as Dreier’s opus.  (Here‘s the only recent example of reporting on the subject.) 

Former Times news chief Jill Abramson is coming out with a book claiming, among other things, that the paper’s news pages have become “unmistakably anti-Trump.” The magazine’s Dreier article, and its other MS-13 coverage – and non-coverage – sure looks like a leading example.

(What’s Left of) Our Economy: Tariffs-Led Inflation Remains a Manufactured Crisis

Tags

, , , , , , , , ,

Economy followers who are fans of facts have ample reason to be grateful that the partial federal government shutdown has left the Labor Department open. As a result, the Bureau of Labor statistics can keep churning out data showing that the next valid claim of tariff-led damage to the U.S. economy that’s supported by authoritative statistics will also be the first. And today’s producer price numbers (for December) are the latest case in point.

The Department’s producer price index (PPI) measures price changes at the wholesale level, and neither the results for products heavily affected by President Trump’s metals tariffs or by his tariffs on goods from China show any evidence of contributing to inflation that will at some point be passed on to consumers.

Let’s start with metals-using products supposedly vulnerable to the U.S. levies on imports of steel and aluminum, which began to be imposed in late March. As with the situation as of last month, steel itself continues to demonstrate strong pricing power on an annual basis, starting with a 7.4 percent increase in April that’s since soared to 18.5 percent in December.

Even so, on a monthly basis, steel prices have actually fallen on net since August (by 0.36 percent), and dropped by 0.63 percent on month in December. So its price momentum seems to be cooling significantly – and possibly at an accelerating rate.

Further, much weaker pricing power – and therefore inflation – can be seen in various goods that use lots of steel. On the one hand, the December figures still showed robust price increases in products like pumps, compressors, and related equipment; and mining machinery and equipment. Wholesale inflation was 4.1 percent in the former on month in December, and 8.5 percent in the latter. By contrast, in the super-category in which both products are found (“final demand goods”), yearly wholesale inflation was only 2.5 percent in December.

Switch over to “intermediate demand” goods and you find big annual price hikes in sectors like metal containers (6.5 percent), fabricated wire products (16.4 percent), and certain kinds of valves (six percent). Yearly December inflation in that super-category was three percent.

But as in steel itself, the latest monthly figures are generally much lower – e.g., since August, 1.57 percent cumulatively for pumps, compressors, and related equipment; -0.55 percent for metal containers; 0.12 percent for fabricated wire products; and 2.32 percent for the valves.

Mining equipment is a conspicuous exception: Its prices were up 6.21 percent from August through December. But it was a strange exception, since all of the increase took place from October to November.

And the tariff alarmists still need to account for all the steel-using goods where wholesale inflation has been weak for the entire year and looks to be going nowhere: machine tools; oil and gas field machinery; agricultural machinery; motor vehicles; motor vehicle parts; ships; railroad equipment.

It’s true that the markets for all these producer goods vary tremendously, as does their dependence on steel. But that’s the point: Tariffs are only one of many trends and developments that influence their prices.

As for aluminum, its pricing momentum has slowed considerably – from 11.9 percent on an annual basis in April, to 6.3 percent in December. And since August, aluminum wholesale prices are off by fully 3.20 percent.

The first Trump China tariffs weren’t imposed until early July, so the sample size is smaller. But the case for tariff-led wholesale inflation on this front is just as weak as in the metals-related sectors.

Here are the PPI changes for some of the leading products found on the Trump administration’s initial China tariff list. They were imposed on July 6, so the numbers show the cumulative price changes since August. (Note: Because the administration’s Trump announcement used a different classification system than that used in the PPI reports, the below data don’t match up exactly with that tariff list. But the following goods are all at the least main parts of the items on the Trump list, or vice versa.)

aircraft engines and engine parts: 0.04 percent

industrial heating equipment: 1.15 percent

oil and gas drilling platform parts: 0.46 percent

farm machinery and equipment: 2.26 percent

paper-making machinery: -0.13 percent

ball bearings: 1.01 percent

electric generators: 1.85 percent

electricity transformers: 0.35 percent

medical, surgical, and personal aid devices: 0.33 percent

X-ray and electro-medical equipment: 0 percent

As with the metals-using products, some strong price increases are apparent. But so are some very weak increases, a flat-line, and a price drop. So it’s tough to argue that the tariffs have been make-or-break in the wholesale pricing sphere. I’ll keep tracking the China angle with unusual alacrity, though, since the number of tariff-ed imports expanded greatly later in 2018.

Lastly, there are the tariffs on large household laundry machines. Their retail prices keep increasing strongly, as shown in the latest (December) consumer price data – though not as strongly as in the immediate aftermath of the product-specific tariffs slapped on their imports in late January.

But at the wholesale level, inflation has been much weaker lately – a 0.84 percent monthly December increase for “household appliances” (the laundry equipment isn’t broken out), but only a 1.61 percent advance since August, and a comparatively meager 3.7 percent increase year-on-year. Call me a cynic, but it looks like consumers have been paying much more for these products this past year mainly because the retailers have been making a killing, not because of tariff hikes.

(What’s Left of) Our Economy: It’s Still the Same Old (Dreary) Story for Real U.S. Manufacturing Wages

Tags

, , , , ,

Could anything be more revealing about the recent situation with America’s manufacturing wages than this development? Adjusted for inflation, industry’s wages were flat on a year-on-year basis. And that was their best such performance since July, 2017, when they rose by 0.65 percent over July, 2016’s levels.

Not that the news reported last Friday by the Bureau of Labor Statistics (BLS) was all bad for manufacturing workers. In December, their real wages increased by 0.28 percent on month – a pretty good performance by recent standards. Yet even that improvement represented a slowdown over the November sequential advance of 0.37 percent. (Both these monthly numbers are still preliminary.)

Moreover, not even the welcome advances of these last two data months was enough to lift manufacturing out of a long real wage recession. Price-adjusted hourly pay for its employees is still down a cumulative 0.28 percent since March, 2016.

In addition, the December data still left manufacturing a serious real wage laggard when compared with the private sector economy as a whole. (BLS doesn’t include government workers’ wages in these reports, since their wages are set by politicians’ decisions, not market forces, and therefore say almost nothing about the fundamentals of the U.S. labor market.)

Month-on-month, inflation-adjusted private sector wages advanced by 0.46 percent – their biggest such increase since the 1.05 percent spurt of January, 2015, and a much bigger increase than in after-inflation manufacturing wages.

On an annual basis, constant dollar private sector wages in December were up 1.12 percent – the strongest such rise since September, 2016’s 1.13 percent and, again, a much larger improvement than for real manufacturing wages.

And adding insult to injury, the gap between inflation-adjusted wages in manufacturing and in the private sector overall keeps widening. From the beginning of the current economic recovery (June, 2009) to last month, after-inflation private sector wages were up 7.24 times more (5.43 percent) than price-adjusted manufacturing wages (0.75 percent). As of the previous December, the gap was 5.69-to-one, as real private sector wages had risen by 4.27 percent, and real manufacturing wages had improved by the same 0.75 percent.

Im-Politic: September 11 Forgotten at Ground Zero

Tags

, , , , , , , , , , , ,

On the back of the older of our two family cars is a faded bumper sticker declaring “9-11. We Will Never Forget.” I wish I had a spare that I could send to the folks running the Port Authority of New York and New Jersey, along with the Chanel Foundation, the International Olympic Committee, the Coca Cola Co., and other businesses and organizations like them. Because the Port Authority – a partnership involving the two states mentioned plus the federal government that operates major transportation assets in the New York metropolitan area – and the others just mentioned clearly have forgotten.

My evidence for this charge? Not two decades after the September 11 terrorist attacks, the Port Authority, which developed the World Trade Center (WTC) site that stands in the shadow of the September 11 memorial, installed an exhibit at the Center an art exhibit that showcases the flag of Saudi Arabia – the home country of 15 of the 19 September 11 aircraft hijackers, which is ruled by a monarchy widely accused of (and in fact sued by the families of many September 11 victims for) harboring the terrorist forces responsible for the attacks. In other words, the a Saudi flag image is all but flying above Ground Zero. 

The exhibit, which opened last month, was funded by the Chanel Foundation, the Olympic Committee, and Coke. Although there’s no evidence that these sponsors had any role in the decision to locate the art at the WTC, since money talks, surely they could have prevented this outrage.

To be sure, Saudi Arabia’s is not the only flag displayed. The work consists of candy-shaped sculptures of the flags of all the countries comprising the Group of 20 (G20) – a loose network of the world’s twenty largest economies, which meets periodically to discuss various global issues. The French artist who created the sculptures didn’t mean to single out the Saudis as paragons of virtue, either. And that certainly wasn’t the (stated, at least) intent of the Port Authority, which called installing the work a part of its “continuing efforts to transform the World Trade Center site into a dynamic space in Lower Manhattan….”

Yet even leaving aside the appropriateness of prominently displaying a portrayal of the Saudi flag virtually on the very spot where the Twin Towers stood, the sculptures’ ostensibly intended message is pretty ditzy, or pretty cynical, depending on your standpoint. The flags come in the shape of wrappers around pieces of candy. The sculptor’s objective for this format (though not for placing it at the WTC site, which wasn’t his decision) was “to celebrate mankind on an international level and pay tribute to People of the entire world.” That’s pretty kumbaya-y, especially considering that G20 meetings are combinations of cold-blooded exercises in advancing national interests and multinational business interests (mainly in the case of the pre-Trump United States), with periodic rhetorical lip service to and occasional instances of international cooperation.

But hey, he’s an artist. Coca Cola and the like surely understand the self-interested aims that are served by portraying such arrangements and their workings as high minded (indeed sugar-sweet) efforts to promote international friendship and harmony.

Even so, this kind of globalist propaganda is still much less offensive per se than planting a facsimile of the Saudi flag so close to the scene of an atrocity committed by adherents of the kinds of jihadist movements strongly supported by Saudi leaders. Moreover, it’s especially troubling given the evidence that this same regime killed dissident Saudi journalist (and legal U.S. resident) Jamal Khashoggi in Turkey – an action that ignited much higher profile and sustained domestic and worldwide condemnation. So it’s not as if a lot of post-September 11 reform has taken place.

Like I said, the “Never Forget” bumper sticker on my car is pretty faded by now – and the Port Authority’s decision has prompted me to get a replacement. In fact, I think I’ll make it three (to go onto our second car). Moreover, I am going to send the other to the Port Authority. I hope all RealityChek readers will consider doing the same.

(What’s Left of) Our Economy: Can We (Finally) Start Deflating the Tariffs-Led Inflation Claims?

Tags

, , , , , , , , , , ,

Good luck to you if you’re looking for signs of tariffs-led inflation in yesterday’s U.S consumer price data from the Labor Department.

It’s not that goods that used tariff-ed products (either steel and aluminum, or inputs from China) or that are tariff-ed themselves (final products from China) haven’t become more expensive since the relevant levies were imposed. It’s that the prices of many goods completely unaffected by the tariffs have gone up as well – and in many cases, faster than those that have been affected by the trade curbs. So there’s no evidence that the tariffs themselves have had any notable impact.

In fact, these latest figures (bringing the story up through December) underscore how many forces and developments influence price changes.

A great example is provided by canned fruits and vegetables – presented below in the table showing price changes over various key periods of time (including for the post-March tariff period) for metals-using products. Their costs of course include the cost of either the aluminum or the type of steel used in their cans. When you look at the numbers for most of these time frames, it’s clear that the prices of these foods have risen faster than the overall rate of what’s called “core inflation” – the inflation rate minus the costs of food and energy, which are considered too volatile price-wise to yield an accurate understanding of what economists regard as the nation’s underlying, most fundamental, inflationary performance.

Interestingly, the prices for canned fruits and vegetables have increased much faster during these periods than the prices of food overall. So what’s driving the big price increases in these canned foods must be the cans, right – and presumably what they’re made of? Not if you look closely.

For the real problem is clearly vegetables. Both month-to-month and clearly for the entire year, fresh vegetable prices have soared. Largely as a result, the prices of canned vegetables have jumped unusually strongly, and significantly boosted the numbers for the overall canned fruits and vegetables category.  

The special role being played by vegetable prices is also clear from looking at the trends in food prices – which aren’t included in the core inflation number. Except for December, these prices have risen considerably more slowly than those prices in the core grouping, or in the economy as a whole. 

If you’re still skeptical, look at the price trends for several other food products that often come in cans – like beverages of all kinds, and soup. There’s simply no consistent pattern of their increasing faster than core inflation over any time period. 

Similarly, although the prices of metals-using auto parts have risen more robustly than core inflation, the prices of metals-using vehicles have risen much more weakly. In fact, from December, 2017 to December, 2018, they’ve fallen in absolute terms. So something, or somethings, other than metals prices and tariffs count for much more in the total prices of these goods.

                                     Nov.-Dec.       Since April        y/y April           y/y Dec.

core inflation:            0.21 percent   +1.39 percent   +2.12 percent   +2.22 percent

overall inflation:       -0.06 percent  +1.09 percent   +2.43 percent   +1.95 percent

food:                         +0.37 percent  +0.98 percent  +1.39 percent    +1.58 percent

fresh fruits & vegs:  +1.94 percent  +1.82 percent   -0.45 percent    +1.75 percent

fresh fruits:              +1.33 percent    -1.73 percent  +1.35 percent     -0.73 percent

fresh vegetables:      +2.63 percent   +6.05 percent   -2.53 percent    +4.63 percent

processed fruits        +0.67 percent    -0.64 percent   -0.59 percent    +0.87 percent

& vegs:

canned fruits            +1.48 percent    +0.99 percent   -0.07 percent    +3.12 percent

& vegs

canned fruits:           +1.44 percent    +1.39 percent   -1.50 percent    +2.29 percent

canned vegs:            +1.30 percent    +1.12 percent   +1.04 percent   +4.18 percent

soups:                      +2.49 percent    +2.28 percent     -0.54 percent   -1.43 percent

malt beverages         -0.04 percent    +1.82 percent    +0.84 percent   +1.87 percent

consumed at home

alcoholic bevs          -0.04 percent     +1.34 percent    +2.17 percent   +2.25 percent

consumed away

juices & non-         + 0.13 percent     +1.77 percent     -0.25 percent  +2.51 percent

alcoholic drinks

carbonated drinks:  +0.41 percent     +3.01 percent     +0.03 percent  +4.07 percent

non-frozen, non-     +0.18 percent    +1.37 percent       -0.53 percent  +1.46 percent

carbonated non-

alcoholic drinks

new cars & trucks:        0 percent     +0.78 percent      -1.62 percent    -0.24 percent

auto parts:              +0.42 percent     +1.58 percent      -0.74 percent   +2.20 percent

Tariffs on goods from China have been in effect for fewer months than the metals tariffs. And since July, they’ve been imposed in phases, which were followed by a decision by President Trump to delay increases in a big tranche as part of the latest cease-fire in the trade conflict with China. So the data is less definitive. But thus far, at least, the prices of the goods below – which represent some of the main imports from China subjected to tariffs by the first rounds of these levies, which were imposed in July – have mainly rising more slowly than the rest of core inflation sectors. (The sportswear numbers are dicey, since such apparel is not broken out from the rest of the category as such. So the figures below represent results from a women’s apparel category that includes sportswear.)

                             Nov.-Dec.          Since Aug.        Aug. y/y           Dec. y/y

core inflation:   +0.21 percent   +0.73 percent    +2.19 percent   +2.22 percent

furniture:          +0.55 percent   +0.90 percent     -0.66 percent   +1.68 percent

auto parts:        +0.42 percent   +0.82 percent    +0.39 percent    +2.20 percent

tires:                 +0.98 percent  +1.50 percent      -1.64 percent    +1.29 percent

appliances:       -0.33 percent   +1.25 percent     +2.31 percent    +4.74 percent

sportswear:       -0.89 percent   -2.14 percent       -0.86 percent    -1.33 percent

As for appliances, their out-performance is due largely to a separate set of tariffs imposed on large household laundry equipment starting in February. As shown below, however, even in this case, price increases are starting to moderate. That’s clear from the decline in the year-on-year figure between February and December, and from very slow price increase recorded between November and December.

                                 Nov.-Dec.        Since Feb.          Feb. y/y           Dec. y/y

core inflation:       +0.21 percent   +1.67 percent   +1.86 percent   +2.22 percent

appliances:            -0.33 percent   +3.41 percent   +0.25 percent   +4.74 percent

major appliances: +0.19 percent  +11.59 percent   -4.22 percent   +9.02 percent

I know that I may be starting to sound like a broken record on the (negligible) impact of tariffs on the American economy so far. But until globalization cheerleaders in politics and business, and their mouthpieces in the Mainstream Media, start telling the story accurately, I’ll keep correcting the record.

Following Up: Why the Racism Etc Charges Against Immigration Realists Look Weaker than Ever

Tags

, , , , ,

Obviously, a recent Grinnell College poll with info on American attitudes towards immigration isn’t the Bible on this subject. But, as reported in Tuesday’s post, it shed an unusual amount of light on charges that immigration realists are racists and xenophobes, and if you doubt my conclusion that it exposed those allegations as hokum (to put it politely) check out these other findings from the survey.

Tuesday’s post focused on differences between Americans who voted for President Trump in 2016 and those who backed Democratic candidate Hillary Clinton (who favored more lenient policies) on defining “real American identity.” It showed that the Trump voters (whose ranks of course included many supporters of more restrictive immigration policies) mostly rejected arguably racist and xenophobic ideas about American identity (e.g., that only Christians could be “real Americans”) and strongly embraced more inclusive definitions (e.g., “real Americans” accept folks with differing racial and religious backgrounds).

Yet the Grinnell survey also asked these two groups for their views of which kinds of immigrants the nation should and shouldn’t admit more of – measured by countries and regions of origin. And the responses send a similar message loud and clear: Trump voters’ views on immigrants from non-white regions and countries are virtually the same as their views on immigrants from majority white regions and countries. Here are the breakdowns, showing whether Trump and Clinton voters favor increasing or decreasing immigration from various countries and regions, whether they’d prefer leaving current levels where they are, or whether they’re not sure (n/s):

Mexico                        Trump                            Clinton

increase                          11                                   36

decrease                         40                                     8

same                               46                                  54

n/s                                    4                                     5

 

China                          Trump                            Clinton

increase                           9                                    23

decrease                        28                                    14

same                             59                                     58

n/s                                  4                                       5

 

India                         Trump                              Clinton

increase                        9                                       28

decrease                      25                                        7

same                           60                                       62

n/s                                6                                         4

 

Canada                   Trump                                Clinton

increase                    19                                        31

decrease                   16                                          7

same                         62                                       58

n/s 4 4

 

Middle East          Trump                                 Clinton

increase                    6                                          28

decrease                 47                                          11

same                       41                                         58

n/s                            5                                           3

 

Europe                Trump                                  Clinton

increase                 13                                          23

decrease                18                                            5

same                      64                                          66

n/s                           4                                            7

 

Caribbean          Trump                                  Clinton

increase                12                                           31

decrease                22                                            4

same                     62                                           60

n/s                          5                                             5

 

Africa               Trump                                     Clinton

increase               10                                            35

decrease              24                                               3

same                    60                                            58

n/s                         5                                               3

These results unmistakably show that it doesn’t make much difference to Trump voters where immigrants come from. Whether they’re arrivals, for example, from Europe (only 13 percent of Trump-ers want their ranks boosted) or Africa (ten percent), Trump-ers generally oppose greater inflows. The big outliers are Canada (19 percent) and the Middle East (six percent). And the degree of outlying isn’t enormous. Moreover, the racism charge looks particularly flimsy considering that the gap between support for more Mexican, Chinese, Indian, African, and Caribbean immigrants on the one hand, and more European immigrants on the other, is within four percentage points.

Could these numbers still support the xenophobia charge? That is, do they show that Trump voters just hate immigrants (and allegedly foreigners) indiscriminately? According to the Grinnell findings, this claim doesn’t make any sense, either. For in every case except Mexico and the Middle East, majorities of Trump supporters say they’re fine with keeping current immigration levels the same. And for some context, the nation currently admits legal immigrants at the rate of about one million each year. (According to the Department of Homeland Security, this number represents “nationals who are granted lawful permanent residence (i.e., immigrants who receive a ‘green card’), admitted as temporary nonimmigrants, granted asylum or refugee status, or are naturalized.)

Of course, polls are far from perfect, and the Grinnell sounding could be an outlier (though I’ve never seen any other surveys going over the same ground). But between the “real Americans” definition and country-of-origin results it reports, it’s at least a challenge to the Open Borders crowd either to explain why these findings are meaningless or misleading, or to produce data consistent with their unflattering description of the Trump supporters – and immigration restrictionists on the whole.

Making News: A New China Op-Ed & a National Radio China Podcast

Tags

, , , , , ,

I’m pleased to announce the publication of a new op-ed piece – an article in this morning’s Washington Times explaining why the best U.S. policy toward direct investment from China (i.e., Chinese buy-ins to U.S. companies and other hard, non-financial assets) is to keep it simple and ban it all.  Here’s the link.

In addition, the podcast is now on-line of Monday night’s interview on John Batchelor’s nationally syndicated radio show updating the U.S.-China trade conflict – with a special focus on manufacturing. Click here to access the segment on this fast-moving story.

And keep checking in with RealityChek for news of upcoming media appearances and other developments.

Im-Politic: So Trump Voters are Xenophobes and Racists on Immigration?

Tags

, , , , , , , , , , ,

Charges that supporters of more restrictive immigration policies are racists and xenophobes and all- around bigots are so widespread that I don’t even see the need to document this claim with links. That’s why a recent poll from Grinnell (Iowa) College is so fascinating and important. It’s full of evidence showing how overwhelming false these allegations are.

Just as important: The survey reveals strong and bipartisan support for the kinds of assimilationist approaches to newcomers that are emphatically rejected by diversity- and identity politics-obsessed leaders of the Democratic party and especially its progressive wing – although it also finds that Left-of-center backing for these views lags the national totals.

Much of this evidence comes from respondents’ views on “what it mean to be a ‘real American’.” The survey, which was taken last November (after the midterm elections) presented 12 possible answers (which were not mutually exclusive). According to Grinnell faculty who analyzed the results, agreeing with the following propositions revealed “narrow” and “restrictive” beliefs about national identity:

To have been born in America”

To have lived in America most of one’s life”

To be able to speak English”

To be a Christian”

I wouldn’t quarrel with this characterization, with the exception of English ability. How, after all, can anyone meaningfully participate in American life in any dimension without speaking the country’s dominant language?

The rest of the propositions were described by the pollsters as more values-based – and more praiseworthy.

To respect America’s political institutions and laws”

To accept people of different racial backgrounds”

To accept people of different religious backgrounds”

To believe in getting ahead by one’s own hard work”

To believe in treating people equally”

To support the U.S. Constitution”

To take personal responsibility for one’s actions”

To believe that democracy is the best form of government”

No quarrel here, either – with one major exception I’ll get to below.

According to the prevailing narrative, Trump voters should strongly support the restrictive views of American identity (i.e., those most closely associated with prejudice), and supporters of his 2016 presidential rival, Hillary Clinton, should emphatically reject them. Only that’s not what the Grinnell survey shows at all. Let’s zero in on the most clearly nativist and bigoted possible responses.

It turns out that only 33 percent of Trump 2016 voters agreed that being native-born is “very important to being a real American,” five percent view it as “fairly important” and 20 percent as “just somewhat important.” Those are higher percentages than for the Clinton voters. But 39 percent of this group regarded this criterion as being at least “just somewhat important” to “real American-ness” – including 20 percent who saw it as “very important.”

These results don’t easily jibe with the mainstream picture of most Trump voters chomping on the bit to keep out all foreigners, and the gap separating them from Clinton voters is anything but yawning. Indeed, 41 percent of Trump voters considered native-born status as “not important” (versus 61 percent of Clinton voters).

The Christian criterion generated answers more consistent with the depiction of Trump voters as prejudiced – 51 percent believed it had any importance. But only 32 percent considered it “very important,” while 43 percent called it “not important.” A quarter of Clinton voters ascribed at least some importance to a Christian identity, including 16 percent of responses in the “very important” category. Sixty nine percent dismissed it as having no importance. And the results for having lived “in America most of one’s life” generated similar numbers among both groups.

But there’s another category that can be carved out of the list of Grinnell criteria – standards supportive of the idea that newcomers need to be adequately assimilated into the nation’s culture before they can be considered “real Americans” – and in particular, need to buy into the country’s distinctive founding ideals.

It’s not an idea that dovetails terribly well with either the kind of nativism that the Grinnell researchers deplore, or with the diversity worship of the contemporary Left. But it’s hard to understand how any country can succeed without the kind of ideological and related values consensus sought by assimilation. P.S.: The imperative of this goal has been recognized and touted not only by many of the Founding Fathers, but by the early 20th century titans of the original progressive movement.

In that vein, it’s encouraging that overwhelming majorities (more than three-quarters in all instances) of both Trump and Clinton voters agree that accepting people of different racial and religious backgrounds is “very important” to being a real American. (And yes, it’s curious that Trump voters’ score on the latter doesn’t jibe well with their responses on the Christian criterion.) Even stronger, across-the-board support was generated by the notion that “treating people equally” is crucial to real American identity.

It’s more encouraging still, if you believe in assimilation, that healthy majorities of all the Grinnell respondents concurred on the importance, for real Americans, of respecting America’s political institutions and laws, supporting the Constitution, and believing in the importance of hard work and taking responsibility for one’s actions.

But the partisan split characterizing these responses showed that Clinton voters’ support for these assimilationist values – except regarding the importance of personal responsibility – was notably weaker than the national results.

Specifically, only 68 percent of Clinton voters answered that it’s “very important” to American identity to respect those American political institutions and laws; only 55 percent put similar stock in hard work; and only 73 percent valued supporting the Constitution this highly.

Much lower still were those shares of Clinton voters who awarded “very important” status to the assimilationist values of English-speaking ability and believing that “democracy is the best form of govenrment” – at 26 percent and 52 percent. But I’ve placed these answers in a category of their own because, although the Trump voters’ levels of agreement were much higher (68 and 69 percent, respectively), they fell somewhat short of their endorsement levels of the other assimilationist positions.

President Trump often says (along with many others), “If you don’t have borders, then you don’t have a country.” I’d make the same claim for assimilation and the common ideological values it requires (again, including a working knowledge of English). According to this survey, although Ms. Clinton’s voters don’t seem nearly so sure, Mr. Trump’s voters strongly agree. And thumping majorities of the latter aren’t racists or xenophobes. That’s why their views on immigration strike me as by far the best guides to national immigration policy – and why I don’t see how any thinking adults could disagree.