(What’s Left of) Our Economy: A Badly Needed History Lesson on Trade and Wages


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David Frum has played an invaluable role during this presidential campaign in explaining why the rise of soon-to-be Republican presidential nominee Donald Trump has been such a deserved rebuke to the party’s out-of-touch establishment. His indictments of the GOP’s Washington-centered chattering class have been especially devastating since he comes out of the party’s Bush wing.

That’s why I was so surprised to read Frum’s claims in a Saturday Wall Street Journal article that the kinds of economic nationalist trade policies Trump says he favors were harmful to American workers when they were in effect during in the late 19th and early 20th centuries.

Comparing Trump to the leading political maverick of that era – Democratic populist William Jennings Bryan – Frum contends that “The great irony of [the 1896 election] was that Bryan was more right than wrong about his central issues” including freer trade, which “would have enhanced consumer purchasing power at a time when wages were growing slowly.”

The problem is, the best data we have tells exactly the opposite story: In the days when America’s (mainly Republican) presidents determinedly shielded American industry from foreign competition, the country’s workers saw their paychecks grow strongly.

As detailed in the U.S. government’s authoritative Historical Statistics of the United States, Colonial Times to 1970, from 1900 to 1929 – when the Great Depression struck – the annual earnings of U.S. employees adjusted for inflation increased by a total of 68 percent. The closest version of these figures available that covers a comparable period of time is the Social Security Administration’s average annual net compensation series. It shows that this measure of pay – during a period when U.S. trade flows have been almost unprecedentedly free – was up nearly 121 percent between 1990 and 2014.

Free trade wins hands down, then? Not by a long shot. First, those more recent statistics haven’t been adjusted for inflation. Second, during that 1900 to 1929 period, U.S. workers might have been protected from imports, but for most of those years, they were exposed to record increases in immigration – which all else equal tends to suppress wages by increasing the supply of labor.

In fact, according to Historical Statistics, before World War I’s outbreak greatly reduced immigration opportunities from Europe, the prime source region, the arrival of these newcomers regularly increased the labor supply by between 1.10 and 2.87 percent. (This figure counts only working-age immigrants who are recorded as boasting occupations.)

Total legal immigration inflows into the country recently have been roughly one million, and some 20 percent are not working age. In addition, they represent a much smaller share of the total national workforce – which currently numbers about 144 million.

It’s true that the labor available to domestic employers has been augmented as well by a sizable illegal immigration inflow. But even taking this population into account, legal immigration-fueled labor force increases in the early 20th century were considerably higher than in the first 15 years of this century. Then, the rate of growth typically hovered around 2.50 percent annually. Since 2000, it’s only topped two percent annually once (in 2014), and has ranged from that 2.19 percent increase to a 3.76 percent plunge during the recession year 2009.

No one’s saying that policies that succeeded 100 years ago will succeed today. But the historical record remains clear. Despite unprecedented immigrant-dominated increases in the labor force, when Washington curbed imports, American workers’ pay still tended to rise healthily – and at rates most of their descendants would envy.

Im-Politic: Trump-Bashers Who Flunk the Competence Test


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Memo to Mary Jordan, J. Peter Scoblic, and George Will: If you want to write effective critiques of Donald Trump, his policies, and his qualifications to be president, rather than inept hit pieces, don’t ignore facts that are screamingly obvious to at least many of your readers.

Jordan is a Washington Post political reporter who published a piece in this morning’s paper on the irony of the Republican National Convention being held in Cleveland. Why, as she sees it? Because the city “was built, and continues to be shaped, by immigrants” and because a defining message of the presumptive presidential nominee’s campaign is that “it is time to pull up the U.S. welcome mat: build a giant wall on the Mexican border, deport millions of foreigners who did not enter legally, maybe even ban Muslims.”

But here’s what Jordan didn’t believe was worth mentioning. First, the predominantly European immigrants that made up so much of Cleveland’s population during her childhood there arrived in the country legally. They didn’t take advantage of lax U.S. enforcement measures and sneak into America by the millions.

Second, although Jordan acknowledged that “the city still has many poor,” and has seen its population fall by more than half since 1950, she both understated Cleveland’s straits and ignored how one of its prime causes strongly reinforces one of Trump’s other signature issues – the offshoring-friendly trade policies that have devastated former manufacturing centers like Cleveland.

Indeed, Cleveland not only has “many poor.” It’s the second-poorest big city in the country as measured by official poverty rates. Indeed, it might still be number one in poverty – with about 37 percent of its residents falling under the poverty line – except that it’s recently been passed by Detroit, another urban giant blighted in part by trade policy failures. And in the last few years, despite the downtown night spot revival Jordan describes (and in my view hypes, based on numerous visits over the years), Cleveland’s impoverishment has worsened, not improved. Anyone thinking that manufacturing’s troubles have played a marginal role here – a claim that, incidentally, most of the city’s leading Democrats would heatedly reject – doesn’t have a clue about Cleveland.

Just as clumsily one-sided was the article in the Post‘s Outlook section by Scoblic contending that Trump would bring to the presidency a business-related “do-something” outlook that is “precisely the wrong attitude for a president of the United States.” The author’s reasoning:

[K]nowing how and when to do nothing — or, to put it less absolutely, knowing when to show patience, to tolerate delay and to restrain the urge to act — may be the most critical element of presidential leadership. U.S. interests depend on having a commander in chief who not only can handle the proverbial 3 a.m. phone call but also understands that sometimes it’s best to go back to sleep. Such self-control is necessary for maintaining alliances and defusing confrontations with enemies. On at least one occasion, it probably prevented nuclear war.”

Scoblic, who has written a book on “Conservatism in the Age of Nuclear Terror” and who holds a fellowship at a liberal Washington, D.C. think tank (surprise!), unquestionably raises an important point, since, all else equal, the hotheaded Trump temperament on display during the campaign seems problematic for handling international crises – including nuclear crises.

But why didn’t Scoblic even mention something at least as important in anticipating Trump as America’s diplomat- and command-in-chief: He’s so far run the least interventionist campaign on the foreign policy front in the last few decades of American political history. In fact, over the last few months, the nation’s foreign policy establishment and the Big Media that typically champions its incessant overseas meddling has continually trashed Trump as a neo-isolationist.

It’s certainly possible that a president who seeks to reduce America’s world role could still find him- or herself in dangerous confrontations. But if Trump actually travels down this strategic road, his tenure would be even likelier to reduce the odds of such face-offs for at least three reasons.

First, his focus on domestic reform and reconstruction holds the promise of ending Washington’s practice of portraying every instance of turmoil and upheaval breaking out abroad as a mortal threat to American interests. As a result, he’d logically face less public pressure to “do something” than national leaders who habitually push the figurative panic button whether the stakes for the nation’s safety and prosperity are significant or not.

Second, it stands to reason that a more restrained U.S. foreign policy, and especially one that concentrates more tightly on protecting the homeland, would make fewer decisions and take fewer steps that other great powers would find provocative. This point is nicely illustrated by America’s longstanding policy of expanding the North Atlantic Treaty Organization’s (NATO’s) reach right up to Russia’s national borders – despite the end of the Cold War. This policy was initiated by the level-headed Bill Clinton, and has been sustained by the equally cool, calm, collected Barack Obama. And arguably nothing has done more to inflame the West’s tensions with Vladimir Putin’s regime – and increase the odds of a military clash in Europe.

The third consideration that Scoblic completely ignores is Trump’s critical view of U.S. alliances. Although the author appears to support the conventional wisdom about these arrangements being essential to safeguarding America’s security, there’s an increasingly compelling case that, especially in the post-Cold War era, they can needlessly function as “transmission belts of war” by committing the United States to fight – mainly against other great powers – on behalf of countries whose fate is no longer even close to vital to America’s own. Worse, the so-called tripwire American forces deployed in powder-keg areas like the Korean peninsula are actually intended to deny Washington the option of standing aside – by ensuring that the sacrifice of tens of thousands of American lives would inevitably result.

Scoblic’s omission of all these points is enough to label this piece a smear job, not an example of intellectually honest analysis.

George Will, of course, is the proudly pompous nationally syndicated columnist and charter member of the Washington, D.C. chattering class that stands to be marginalized if Trump gets elected. So it wasn’t surprising to see that his latest column lamented that the GOP (which he has just left) this week will decide that “the nuclear launch codes and other important things should be placed in the hands of someone not known for nuance, patience or interest in allies and collective security,” and that the Cleveland delegates seem oblivious to the threat confronting the United States from China’s growing expansionism in East Asia.

Let’s assume that Will is right to judge that if the next president handles this challenge with diplomatic or military ineptitude, “the result could be the collapse of America’s position in the world’s most populous, dynamic and perhaps dangerous region,” (I’ve repeatedly argued that this fear is baseless because America’s overriding interests in East Asia are economic, and can be protected by the right economic policies no matter who runs the place politically.)

Confidence in his judgment would be much easier to justify if Will had acknowledged that the dangerously thoughtless trade policies pursued by recent Republican and Democratic presidents and Congresses alike and cheered on by Establishment Media pundits like him, have been instrumental in boosting Chinese military power through massive infusions of wealth and militarily relevant technology alike. In fact, as I’ve documented, these transfers have proceeded apace despite China’s increasing belligerence.  

By contrast, who is the only Republican presidential candidate who has consistently opposed these policies?  Not offshoring lobby flunky Jeb Bush, or the self-proclaimed adult-in-the-room John Kasich or China pseudo-hawks like Marco Rubio or Rick Perry.  Of course, it’s been Trump.

Incidentally, it’s no coincidence that these three examples of unmistakable and easily spotted anti-Trump bias have all appeared – and on the same day, yet! – in the Washington Post, a mainstay of that threatened Beltway insiders’ culture whose editorial opposition to Trump has consistently verged on the hysterical. (For some reason, the Will column is in the print edition, but hasn’t made it to the website yet).

The implications seem as obvious as they are disturbing – far from being limited to the paper’s publisher, editorial board, and pundit roster, the paper’s determination to slant its campaign coverage now extends deep into the layers of editors who are supposed to tether contributors and staff writers to some recognizable version of reality.

(What’s Left of) Our Economy: No Inflation Take-off in Wages – or Even Close


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More evidence appeared today that, if it’s true that inflation is starting to pick up (after years of deep slumber), America’s workers don’t deserve any blame. The Labor Department today released its latest data (for June) on overall price increases in the economy, and for price-adjusted wage increases. They and the department’s databases reveal that the workforce on the whole is barely, at best, keeping up with the cost of living.

According to the Labor Department, core inflation (i.e., prices with food and energy costs omitted, since they’re exceptionally volatile) rose 2.26 percent between June, 2015 and last month. How did inflation-adjusted wages do for the private sector? They rose only by 1.52 percent. (The Labor Department doesn’t include government workers’ wages in these statistics, since they’re determined by politicians’ decisions, not by the fundamental state of the economy.)

Workers did a little better between the previous Junes. Core inflation increased by 1.76 percent, and their price-adjusted wages improved by 1.84 percent.

But between June, 2013 and June, 2014, the story was substantially different. While core prices were increasing by 1.96 percent, real wages weren’t increasing at all. That is, they were completely flat.

Strengthening the case that real wage growth is anything but strong: June private sector wages saw a sequential drop of 0.19 percent, and have fallen for two of the last three months. As a result, hourly private sector pay is now down since March. And since the economic recovery began, in June, 2009, real private sector wages have risen only 3.49 percent.

The story in manufacturing, which historically has generated most of the economy’s best-paying jobs, is somewhat better over the short-run and somewhat worse over the long run.

Even though real manufacturing wages decreased on month in June (by 0.46 percent, much more than overall private sector pay) they rose 2.37 percent year-on-year – considerably faster than the private sector pace. Indeed, through May, after-inflation manufacturing wages had grown sequentially for eleven straight months.

June’s yearly manufacturing real wage hike was also more than twice as great as that between the previous two Junes – just 0.86 percent. But during the twelve months before, real manufacturing wages actually decreased – by 0.19 percent.

Longer-term, moreover, manufacturing remains a decided real wage laggard. Since the recovery’s June, 2009 onset, inflation-adjusted hourly pay has improved by only 0.93 percent.

Economists worry about wage inflation – and the tight labor markets it implies – because businesses have tended to react by raising prices to compensate, and that’s tended to prompt workers to press pay demands even more aggressively. The consequent spiral can be difficult to stop or even slow.

Of course, for this kind of action-reaction cycle to take hold, wages would first have to catch up with living costs. The June inflation and real wage figures show that workers might still be short of even that modest goal.

(What’s Left of) Our Economy: Despite Automotive Gains, U.S. Manufacturing’s Broad-Based Recession Continued into June


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The Federal Reserve’s new industrial production data showed that American domestic manufacturing’s broad-based recession continued into June despite the best automotive performance since last July. Overall real factory output is down on net since November, 2014. Durable goods inflation-adjusted output is still fractionally lower than its level that July. Non-durable goods constant dollar production is down since April, 2015. Year-on-year figures overall looked better, but manufacturing output’s new volatility has muddied their message.

The new data for the entire factory sector plus mixed revisions helped keep overall manufacturing output 4.22 percent below the level it hit when the last recession began more than eight years ago. That is, the manufacturing slump triggered by the Great Recession still hasn’t ended.

Here are the manufacturing highlights of the Federal Reserve’s new release on June industrial production:

>The biggest monthly automotive real production increase since last July was not enough to pull American domestic manufacturing out of an output downturn that has now lasted nearly two years, with the sector’s cumulative production down 0.33 percent after inflation since November, 2014.

>Manufacturing’s technical recession still encompasses both its durable goods and non-durable goods super-sectors.

>In constant dollar terms, durable goods production remains 0.08 percent lower than their July, 2014 level. Non-durable goods monthly output is off by 0.05 percent since April, 2015.

>Overall price-adjusted manufacturing output grew on month by 0.47 percent in June, its best such performance since last July’s 0.68 percent increase.

>Revisions were mixed. May’s initially reported 0.39 percent monthly drop was upgraded to a 0.27 percent decline. April’s already lowered 0.22 percent real production rise was cut further to a negligible 0.08 percent. March’s downwardly revised 0.39 percent falloff was fractionally improved to a 0.37 percent decrease. And February’s after-inflation production dip is now judged to be 0.06 percent, not 0.03 percent.

>June’s 5.93 percent sequential real production increase for the automotive sector was not only its best such advance since last July’s 7.27 percent. It also pulled automotive out its own technical recession.

>At the same time, the initially reported May month-to-month constant dollar output decrease of 4.16 percent – its worst such figure since winter-affected January, 2014’s 6.47 percent – was revised down to a 4.33 percent decrease.

>Year-on-year real output in manufacturing overall rose by 0.64 percent in June – its biggest such improvement since February’s 0.96 percent. The modest June annual after-inflation increase actually beat that for the previous June-June period (0.59 percent). But it was better than May’s 0.14 percent yearly decline – which was revised down from a bare 0.01 percent rise.

>The June overall manufacturing figures along with the mixed revisions left the sector’s overall output 4.22 percent below its levels when the last recession officially began – more than eight years ago, in December, 2007. That is, by this measure, the Great Recession has still not ended for domestic manufacturing.

>The June on-month automotive pop was led by 9.04 percent jump in price-adjusted vehicle production – the biggest monthly increase since last July’s 9.38 percent. In addition, May’s initially reported 7.25 percent real production swoon – the worst since winter-affected January, 2014’s (10.41 percent) was revised up to a 6.77 percent drop-off.

>Motor vehicle parts production rebounded in real terms, too – but by a smaller 3.90 percent over May’s level. That figure, too, however, was its best since last July’s 7.85 percent. Yet the May monthly downturn was revised from 1.94 percent to 2.26 percent.

>Year-on-year, combined vehicle and parts output rose 7.77 percent in June – their fastest annual growth since February’s 10.04 percent. The June yearly increase also easily bested the 3.15 percent figure for the previous two Junes.

>The annual gains, however, were led by parts, whose real output increase of 9.30 percent exceeded the 6.03 percent advance for vehicles.

>Automotive’s performance keyed durable goods 0.87 percent monthly inflation-adjusted output rise in June. That rise was its biggest since May, 2014. Moreover, May’s initially reported 0.69 percent monthly real output decrease for durable goods was upgraded to a 0.51 percent fall.

>Durable goods’ yearly real production advance was pegged at 0.71 percent in June – the best since February’s 0.85 percent. Moreover, the previous such June-June results revealed a 0.07 percent annual decline, underscoring recent volatility.

>The non-durable goods super-sector, however, lost momentum in June, with real output decreasing 0.05 percent over May’s level. The May figure was revised from a 0.02 percent dip to a 0.03 percent increase. But April’s monthly results, originally recorded as a gain, were revised down once more to a sizable 0.54 percent loss.

>Non-durable goods’ real output was up annually in June by 0.51 percent. This increase topped May’s downwardly revised 0.24 percent, but was much weaker than the 1.40 percent inflation-adjusted growth achieved between June, 2014 and June, 2015.

>Since its pre-recession peak, in July, 2007, real output of non-durable goods is now down 10.55 percent.

(What’s Left of) Our Economy: New Wrinkles in the Manufacturing Jobs Story


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Just when I thought there wasn’t a heckuva lot more I could learn about the general, long-term (downward) direction of manufacturing employment in America, I just learned something pretty significantly new. Even better, the information bears on the big ongoing national debate about whether most of the blame for U.S. manufacturing job loss should go to trade and trade policy, or to improved productivity and the substitution of technology for labor.

I looked into the matter after watching a recording of a television show about globalization after Brexit. One of the featured guests, economist Russell Roberts, made a statement that I knew is flat wrong: “[M]anufacturing employment has been falling steadily, but long before we had free trade agreements; goes back to the end of World War II.” A few moments later, he (sort of) suggested that he was really talking about a rather different measure – manufacturing jobs as a share of total jobs. In Roberts’ words, this figure has been “falling steadily” for “about 70 years.”

Because I didn’t have the details in my head, I went back to the official statistics, kept by the Labor Department, and saw that I was indeed right on the first score. In addition, even though Roberts (as I knew) was correct on the second, the actual figures tell a much more complicated story than his standard rehash of the conventional wisdom that technology is the main culprit. Here’s what I mean.

When it comes to the absolute numbers of manufacturing jobs in the United States, they are indeed down considerably since 1945. But what’s as important as it is under-appreciated is that between V-J Day (in August, 1945) and June, 1979, American manufacturing employment rose by nearly 38 percent. That’s a period fully half as long as the 70 years Roberts mentioned. In addition, though the June, 1979 level of 19.553 million represented the absolute peak of the U.S. manufacturing workforce, even afterwards, the sector enjoyed periods of job growth. That is, its decline wasn’t all that steady.

For example, between late 1982 – when a deep recession ended – through March, 1989, the economy boosted manufacturing employment by 8.21 percent. From July, 1993 (following another, shallower, recession) to April, 1998, manufacturing increased payrolls by 5.36 percent. And of course, since the employment bottom hit soon after the latest recession ended, through last month, manufacturing employment has rebounded by 7.36 percent.

Manufacturing, as a result, has never come close to that World War II aftermath employment level. But the data also make clear that the start of manufacturing’s jobs decline (mid-1979) coincides almost exactly with the point at which trade – and especially imports – began rapidly rising as a share of the total economy, as this chart illustrates.

The same trends have held in connection with manufacturing’s share of total employment. I compared the December figures going back to 1945, and found that from then through December, 1980, the percentage of all American non-farm workers (the U.S. government’s official employment universe) employed in manufacturing dropped from 32.03 to 20.50. That’s a fall-off of just under 36 percent. Since then, the decline has been much faster – from 20.50 percent to 8.53 percent, or 58.39 percent.

Manufacturing has also managed to raise its share of the national workforce in several stretches since 1945. These periods include 1949 to 1956, and the years 1959, 1961, 1964-1966, 1971 to 1973, 1976, and 1983. But since then – and shortly after trade’s role in the economy began soaring – manufacturing has never repeated this feat.

Yet these statistics are telling us something else crucial about manufacturing employment and where it fits into the national economy. They’ve depended not only on trade and technology/productivity, but on macroeconomic factors (especially whether the economy is growing or shrinking), and on other political and policy factors – such as whether defense buildups are in progress (which gives manufacturing employment a lift) and whether all government employment is strong or weak (which affects its share of all jobs).

At the same time, better trade balances mean faster growth, manufacturing still dominates U.S. trade flows, and the sector is set to record yet another record trade deficit this year. So there can be little reasonable doubt that, although better trade policies are no manufacturing jobs cure-all, they’d make a valuable contribution.

Those Stubborn Facts: Trailing Edge Growth for the U.S. Semiconductor Production Equipment Market


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Semiconductor Equipment Industry Association 2016 Year-on-Year Market Growth Forecast:

China: +30.8%

Europe: +6.2%

Taiwan:  -1.8%

Japan:    -7.6%

North America” (mainly U.S.):  -9.8%

Korea:  -17.3%

(Source: “Chip Equipment Spending SEMI Forecasts: Flat 2016, Rebound in 2017,” SEMI, July 12, 2016, http://www.semi.org/en/chip-equipment-spending-semi-forecasts-flat-2016-rebound-2017)

(What’s Left of) Our Economy: No JOLTS to the Low-Wage Recovery Story


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One of those running-around days prevented me from commenting yesterday on the new U.S. government figures on labor force turnover. But since they’re a favorite indicator of Federal Reserve Chair Janet Yellen. and since last month’s figures contained a big surprise, the so-called JOLTS report for May is worth a close look.

First, that surprise. The April JOLTS figures (there’s a two-month time lag for this series) showed a startling 23.15 percent sequential jump in the number of job openings in manufacturing. Moreover, the 415,000 figure was the second highest of all time. The increase, which produced the second highest monthly total of all-time (JOLTS statistics only go back to 2000), convinced observer’s like The Atlantic‘s James Fallows that this long-time employment laggard was suddenly “creating too many jobs.”

As I noted last month, the number looked fishy because it contrasted with virtually everything else we’ve learned about manufacturing in recent years – along with many longstanding assumptions.

So it wasn’t entirely surprising to see that the new JOLTS report revised that April manufacturing figure down to 397,000 – still historically high, but no longer so stratospheric. Just as important, the May total (which is still preliminary), was 353,000. That’s healthy, but has been bested several times in the last decade and a half. Let’s hold off, therefore, on heralding the return of the manufacturing renaissance meme – which has never been justified in the first place.

Second, the May JOLTS figures strengthened claims – including by yours truly – that the current American economic recovery has featured entirely too much low-wage job creation. Since I last looked at this subject through the JOLTS lens, past figures have been revised. But they tell the same story, according to my methodology of taking the reported openings in the retail; and leisure and hospitality employment super-categories, and then adding a pro-rated figure I calculate for the low-paying administrative and support services sector of the generally high-paying professional and business services super-category.

When the Great Recession began, at the end of 2007, these low-wage portions of the economy accounted for 31.94 percent of all job openings. By the time the recovery began, their collective share fell to 28.38 percent. The (preliminary) level for May? It’s rebounded past the pre-recession level and climbed to 32.53 percent.

Employment figures like the JOLTS data have been strongly influencing the Federal Reserve’s decisions on whether to raise or lower interest rates – which in turn helps determine how fast and whether the economy will continue growing, at least in the near future. If the central bankers look at the above crucial JOLTS details, keep expecting the country to stay on its (incredibly) easy money course.

Our So-Called Foreign Policy: A Nuclear Policy Know-Nothing in the White House Right Now?


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Remember when, this spring, President Obama portrayed Donald Trump as a foreign policy know-nothing? More specifically, Mr. Obama warned that the presumptive Republican presidential nominee was especially, and dangerously, ignorant regarding the essential role U.S. nuclear weapons have long played in preserving American security alliances, and in curbing the spread of these arms. It’s now coming to light that Mr. Obama’s ignorance of these subjects could be much deeper and scarier.

Bizarre as that sounds, it’s the only valid conclusion to draw if it’s true, as per reports (e.g., here and here), that the president is actively thinking of declaring that the United States will never be the first country to use nuclear weapons in a conflict. Here’s why.

Reserving the right to initiate nuclear weapons use has been central to American national security strategy since the end of World War II. However inhumane it may sound, the rationale was…eminently rational, if not indisputable. The main adversaries faced by the United States and its allies, the Soviet Union and secondarily China, possessed or could potentially field, enormous non-nuclear militaries all too capable of overrunning the conventional forces that America and its European and Asian allies were willing to muster in response.

America’s nuclear weapons were an understandable choice as equalizer when the United States enjoyed a nuclear monopoly. And even after the Soviets drew even and the Chinese developed serious nuclear capabilities, both Democratic and Republican presidents and Congresses justified a first-use policy with the assumption that simply the possibility of a war going nuclear – and threatening their homelands with the same annihilation America would suffer – would keep Moscow and Beijing at bay.

The history is complicated, and there’s no doubt that improving Soviet nuclear capabilities in particular and ambiguous U.S. responses periodically prompted allies’ doubts about the credibility of American commitments. But there’s also no doubt that during the Cold War, both conventional and nuclear conflicts great power conflicts were avoided, and it seems reasonable to credit the strategy of extended deterrence for at least some of this success.

As I’ve argued in recent posts, because Chinese and North Korean nuclear forces have been significantly upgraded in recent years, and because East Asia is much less strategically important to the United States than in Cold War days, extended deterrence creates far too much risk for far too little gain for Americans, and that the U.S. nuclear commitments to Japan and South Korea should be phased out. Although I haven’t written on the recent situation in Europe, I’d favor the same approach to the North Atlantic Treaty Organization (NATO).

So as a result, I don’t favor any use of nuclear weapons on these countries’ behalf, let alone first use. Trump has endorsed rethinking these security arrangements, too, including their nuclear components, although it’s not clear exactly what changes he’s seeking.

President Obama and so many other foreign policy establishment-arians have warned that these measures could very well lead American allies to seek extra protection by developing their own nuclear forces – which supposedly would make global affairs far more dangerous. I take this point – and it sounds like Trump does as well. But we both respond that precisely because the loss of America’s nuclear edge and growing dangers to the continental United States are plain for the allies to see, and because it’s inherently problematic for any country to risk its very survival on behalf of another, the allies are likely to go nuclear no matter what Washington promises or how powerful its own forces become.

And that brings us to precisely what’s so loopy about Mr. Obama’s reported position. On the one hand, he says he’s determined to preserve the alliances and their nuclear dimension – and specified that Trump’s critique showed that he “doesn’t know much about foreign policy or nuclear policy or the Korean Peninsula or the world generally.” On the other hand, there’s no better way to tear these alliances asunder, and all but guarantee that not only Japan and South Korea but Germany and other American formal and informal allies build or buy their own bombs, than to forswear use of America’s own nuclear weapons in their defense unless attackers with arguably superior non-nuclear forces (unnecessarily and irrationally) escalated to the nuclear level.

It’s possible that the president will decide to keep the first-use option – or that the reports of impending change are inaccurate. And of course, any decision he makes could be reversed by a successor. But it’s at least equally possible that even the news that American leaders are contemplating such epochal doctrinal shifts will set off the kinds of nuclear weapons acquisition spiral that Mr. Obama says he seeks to avoid. Unless anyone believes that countries living in exceedingly dangerous neighborhoods would settle for assuming that America is just as reliable as ever?

Trump doesn’t have a Ph.D. in international affairs. (The same goes for the president, by the way – and for me.) But he at least appears to recognize that it’s possible to preserve the alliance status quo, and that it’s possible to take an important step toward eliminating any chance of nuclear weapons use anywhere, but that it is completely impossible actively to seek both goals at the same time. More important, his remarks indicate he recognizes that the United States should anticipate strategic change, prepare for it, and even try to shape the process constructively.

The apparent Obama/establishment approach?  Resist the seemingly inevitable – and (somehow) scramble once it arrives.

Making News: New Lifezette Article on the Big Over-Count in U.S. Private Sector Jobs


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I’m pleased to announce that Lifezette.com has just published a new op-ed of mine – on a theme that RealityChek regulars will find familiar.  It’s a piece that updates my findings that a large, rapidly growing share of the net new jobs classified by the Labor Department as “private sector” are actually heavily reliant on government subsidies for levels of demand — and therefore employment.

And this means that too much of the American labor market’s supposed vigor stems from politicians’ spending and borrowing decisions, not from economic fundamentals.

Here’s the link to the article.  And keep checking back at RealityChek for ongoing updates about new media appearances!

Im-Politic: More Political Delusions from the Chattering Class Bubble


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It’s always a tough call on any given day to decide which establishment media product deserves the award for “Dumbest (Article/Post/Broadcast) of the Day.” That’s why we all owe a debt of gratitude to someone named Barton Swaim, who for some reason has been selected by the Washington Post as a (regularly) “contributing columnist”. Because his essay this morning titled, “America is off the tracks, but the GOP errs in thinking it can right her” (not exactly catchy, to be sure) is the runaway winner.

The piece performs the impressive feat of making not one but two arguments that clash with reality. The first concerns his apparent belief that only the kinds of Republicans and conservatives who are inclined to support Donald Trump believe that America has (for various reasons) veered onto the “wrong track,” as pollsters like to put it.

Weirdly, Swaim says he agrees with this concern – and in fact, he articulates the conservative version well. But where does he get the idea that the fundamental worry is exclusive to supporters of the presumptive Republican presidential nominee? Or to any faction on the Right? Certainly not from the polls – which, for all their serious shortcomings, provide us with most of the major data points on such matters.

One of the most complete compendiums of survey data can (easily) be found on the RealClearPolitics website. The surveys in its files go back to early 2009. And as can be seen from the results over more than seven years, the vast majority of the time, the vast majority of Americans have viewed the country as being on the “wrong track” as opposed to moving in the “right direction.” Since (again, according to polling data), conservatives remain far from a majority of all Americans, then obviously the wrong-trackers must include lots of moderates and liberals.

Another kind of important clue regarding the non-partisanship of major voter concerns that’s escaped Swaim’s notice: Bernie Sanders shockingly unexpected run for the Democratic presidential nomination. Does the author think that a self-identified Socialist from a tiny state would have come so close to unhorsing the Democratic establishment favorite Hillary Clinton if most of much of the American Left thought the country was doing swimmingly?

Swaim’s second goof is at least as bizarre. It’s his contention that the most sensible choice that voters can make this year is to bow to the inevitable. In Swaim’s words:

A republic in decline doesn’t need a leader who will try to force its electorate to be something it isn’t, or who will insult and berate its leaders into doing things differently. What’s needed, rather, is… [s]omeone…who can manage the decline of a great nation without making things worse.”

To be fair, the ellipses I’ve stuck in the above quote represent text in which Swaim offers entirely legitimate criticisms of Trump’s candidacy, as well as the eminently reasonable hope for “someone who will stand against the excesses of modern liberalism without entertaining the vain hope of obliterating it….”

But if Swaim thinks that either conservatives or liberals or moderates are looking for a president whose top priority is presiding over more of the same, he’s either seriously delusional or – as is much more likely – so comfortably esconced in the nation’s chattering class bubble that he equates his own privileged position with that enjoyed by himself and his affluent peers. Come to think of it, that’s probably why the equally cloistered Washington Post believes these thoughts are worth presenting.


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