Im-Politic: What the Hell Many Black Voters Really Have to Lose

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Even by the off-the-wall standards of this presidential campaign, one of the most stunning spectacles has entailed the reactions by many African-Americans (and many of their supposed leaders) to Donald Trump’s appeal for their votes. The Republican presidential candidate’s insistence that Democratic politicians like his rival for the White House, Hillary Clinton, have failed blacks, and therefore don’t deserve the overwhelming support they enjoy, has been met with everything from howls of bitter laughter to outbursts of outrage. And this despite an almost non-stop litany of complaints from these same voices about how too many African-Americans still lag economically and face debilitating racism.

Major reasons for the blowback triggered by Trump’s appeal have already been widely highlighted – ranging from the claim that his pitch has ignored black progress that has been made to the sluggishness with which he has failed to disavow support from a former Ku Klux Klan leader and other white supremacists to (unproven) charges that his family’s real estate ventures discriminated against black tenant applicants. Then add to these Republicans’ reluctance to use government to solve this community’s biggest problems and what leading conservative lights often admit is the GOP’s decades-long failure to court African-American voters systematically.

As a result, it’s easy to see why so many African-Americans apparently have decided to overlook criticisms raised (often by African Americans) about the race relations record of Clinton and her husband, the former president. These include Clinton administration welfare reform and policing measures unpopular with much of the minority population, and both Clintons’ use of supposedly insensitive racial rhetoric during her 2008 Democratic primary race versus then Senator Barack Obama.

But there’s one possible factor behind African-Americans’ evident mass support for Clinton, and their equally evident alarm that Trump might win, that deserves more attention. And this consideration is especially important since it looms as a major barrier to future Republican success with blacks as long as the GOP remains the party of limited government, and no matter how lousy the economy or the state of much of Black America gets.

It has to do with African-Americans’ outsized dependence on jobs both in the public sector and in parts of the economy heavily subsidized by government spending. What the data shows is that American blacks have good reason to view government not only as a provider of many essential services and resources, but as an engine of jobs (and therefore financial stability) and opportunity. Perhaps equally important – this government role has grown steadily during the economy’s generally weak recovery under President Obama.

Bureau of Labor Statistics data could not make these conclusions clearer. Take its “public administration” jobs category. In 2002 (the first 21st century year for which data exist), African Americans made up 10.9 percent of Americans over the age of 16 employed either in the public or private sectors. But their share of “public administration” jobs was much higher: 16.5 percent. Moreover, that category doesn’t include government groupings like “urban transit” (where African-Americans comprised 28.1 percent of all workers. Or the U.S. Postal Service (23.1 percent).

Blacks were also over-represented in the government-subsidized industries like healthcare services and social assistance agencies. There are no 2002 statistics combining the most conspicuous of these together. But African-American workers accounted for 16.7 percent of all the nation’s hospital workers that year, 15.1 percent of healthcare workers outside hospitals, and nearly one in five employees at social assistance agencies.

During the year the Great Recession ended, 2009, blacks’ share of all adult U.S. workers fell to 10.7 percent – indicating how hard they were hit by the downturn. But here’s their representation in the public and government-subsidized sectors:

Public administration: 15.6 percent (surely because public payrolls started shrinking)

Subsidized private sector total: 14.0 percent

Urban transit: 28.3 percent (an increase)

Postal Service: 20.3 percent (a decrease)

The cuts in government employment accelerated for most of the time through 2015 (the last year for which data is available). Thanks to the economic recovery, the African-American share of total U.S. adult employment regained a full percentage point, to 11.7 percent. But blacks’ share of falling government employment grew as well:

Public administration: 16.9 percent (despite the continued cuts in overall government employment)

Subsidized private sector total: 14.8 percent

Urban transit: 30.5 percent

Postal Service: 24.2 percent (back above 2002 levels)

Not that this African-American employment pattern is a first in U.S. history. Far from it. Especially in northeastern cities, new European immigrant groups used the patronage and overall powers won via political victories to employ their former fellow compatriots. These government jobs, in turn, became pillars of the nation’s rapidly growing middle class and the widespread prosperity it helped foster.

These data, however, also show what a mortal threat at least in principal Small Government conservatives and Republicans pose to government employment’s role in the advances the black community has achieved. The Right may have completely valid points in contending, for example, that this recipe for economic and financial success has left too many sidelined and outright failed too many others; resulted in huge opportunity costs even for the beneficiaries; encouraged attitudes of dependency; or (at best) run out its string for all the black wealth it has generated.

But especially to a population whose sense of economic security is understandably fragile, and whose faith in the career potential available in private industry is understandably limited, Small Government conservatism amounts to a proposal to exchange a bird in the hand for two in the bush. (On top of the reduced services implicitly promised to the less well-off.) So unless Republicans change their philosophy significantly, or more convincingly argue that African-Americans should take this kind of chance, the answer they’ll get from most blacks to Trump’s question, “What the hell do you have to lose” will continue to be “More than you can know.”

Following Up: Even Star Trek’s Now Partly Made in China

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What a drag to report that my enjoyment of a second feature film in less than a year has been marred by news that it’s been partly financed by China. Even worse – if this doesn’t yet qualify as a trend, it looks like that’s not far off, thanks both to abundant Chinese capital and official American indifference.

The news was especially distressing because the film was Star Trek Beyond, because I’m a Trekkie from back in the ’60s with the original TV series, and because this third installment was in my opinion the best in the current genuinely inspired “reboot” franchise.

So imagine how upsetting it was to see in the opening credits a reference to something called Huahua Media in some producer-type role. Since I wasn’t familiar with the company, I decided to suspend judgment and enjoy the film. But upon returning home, I learned not only that Huahua was indeed a Chinese company, but that it wasn’t even Beyond‘s first partner from the People’s Republic. On-line marketplace Alibaba had beaten Huahua to the punch.

Fortunately, this Chinese involvement in Beyond‘s production didn’t affect the content in any way I could see. In particular, there was no gratuitous plot alteration in order to portray China in a favorable light, as with last year’s The Martian. (Maybe because, by the time Star Trek creator Gene Roddenberry’s idyllic 24th century had rolled around, China and other nation-states had faded into history?)

Nevertheless, China’s role in Beyond, and its growing footprint in Hollywood in general, are troubling for any number of reasons. As with The Martian (and other movies), content can be altered. And because any Chinese company large enough to make such international investments unquestionably is acting as an agent of the Chinese government, it inevitably will reflect the priorities of a regime that is both dictatorial and an increasing threat to U.S. national security interests.

Yet even if the Chinese government was democratic and/or friendly, its presence in the American film industry clashes with free market norms. Won’t efficiency and quality suffer, almost by definition? And why should domestic capital – or private foreign capital – be forced to compete with a rival with practically bottomless pockets?

And of course for Trekkies, Chinese investment creates a tragic irony. The Star Trek universe is a monument to pluralism and freedom. (Even keeping in mind Mr. Spock’s arguably collectivist insistence that “Logic clearly dictates that the needs of the many outweigh the needs of the few.”) And Roddenberry himself was clearly one of the great political and social idealists of modern American popular culture. China’s rulers stand for diametrically opposite values. If I was the series’ late creator and guiding spirit, I’d been rolling over in my grave (or, more accurately, in the space-borne urn carrying my ashes).

Washington isn’t completely oblivious to the prospect of foreign control of American creative and media companies. But it does seem uninterested in the role of foreign governments, and even of unfriendly, dictatorial foreign governments. I’m somewhat sympathetic to the argument that free speech principles require admitting even these actors onto such corporate playing fields, at least to some extent. But if that’s the road the U.S. government continues down, how about a little transparency? In other words, if Americans are going to be consuming more and more entertainment and even news products that are subsidized by the Chinese or other foreign governments, don’t they at least have a right to know?

Im-Politic: How Trump Can Clean Up His (Needless) Immigration Mess

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Donald Trump has been getting it from all sides because of his recent, contradictory statements on immigration policy, and whatever the motives, the criticisms of the Republican presidential candidate are richly deserved for one fundamental reason: You don’t need to be an Open Borders fan or a total deportation hardliner to recognize that, with just over two months left till Election Day, Trump should at least have the main details of his approach down cold. It’s painfully clear that he doesn’t.

Even worse, if you’re a Trump supporter, the core precepts of a sensible and politically appealing alternative to current immigration policy – and to the even more permissive version being pushed by his Democratic rival, Hillary Clinton – are anything but rocket science. And this description even applies to policies for dealing with the nation’s current illegal immigrant population, the dimension of immigration reform widely thought to present policymakers with their most difficult, even agonizing, choices, and that’s given Trump the greatest difficulty over the last week.

Trump has announced that he’ll be giving a speech on immigration this Wednesday, and if he has any hope of clarifying his views in a way likely to win more votes than it loses, here’s what he’ll have to do.

To start, Trump needs to remember that the kind of mass deportation he’s referred to in TV interviews was not part of the immigration blueprint he released a year ago – and for very good reasons. Surely at one point he and his team recognized the logistical nightmare, budget-busting costs, and public relations disaster this idea entailed.

Then the candidate needs to remember that he and his team recognized that the nation is by no means therefore stuck with the various versions of soft or quasi-amnesties with which he’s flirted in recent days. For that immigration blueprint made a compelling, though only partial and implicit, case for addressing the great majority of the illegal population that has been otherwise law-abiding through attrition. That is, rather than trying actively to kick millions of men, women, and children out of he country, Washington would concentrate on steadily reducing this population by turning off or weakening the two big magnets collectively responsible for their presence.

The first of course concerns jobs, and the Trump blueprint identifies most of the answer – mandating nation-wide use by employers of the E-verify system, a computerized means of identifying job applicants residing in America without proper authorization. As I’ve reported, where it has been used, E-verify boasts an outstanding record of success. And its effectiveness could be supercharged by requiring that businesses pay truly painful penalties for violations.

The second big magnet encompasses various kinds of public assistance currently being extended to illegal immigrants, but the Trump blueprint covered only some of the bases. Yes, de-funding sanctuary cities would help bring to an end the extra layer of legal protection perversely provided throughout the country even for criminal aliens. But the statement should have also expressly prohibited any state from providing driver’s licenses and public college tuition benefits for illegals.

Even these measures would leave intact two big illegal immigrant drains on the public purse – their families’ use of hospital emergency rooms and public schools, and their eligibility for and use of transfer payments and entitlement programs like Obamacare (especially by “anchor children,” who are born in the United States and thus automatically enjoy full citizenship rights). The Trump blueprint glosses over the former issue and would handle the latter by ending birthright citizenship.

In principle, I support preventing illegals from trying to strengthen their legal status in America by creating these human faits accompli. But I also foresee a huge constitutional fight that would take years at best to resolve. As a result, it makes the most sense to rely mainly on turning off the jobs magnet in order to persuade illegals to leave the United States. Clearly, many would remain, counting on their ability to receive public assistance via the anchor children route. But using an E-Verify-type system to crack down on welfare use gained through falsified documents would pare illegals’ numbers further. And the new barriers to finding American jobs would help prevent future surges in their ranks – especially if the U.S. economy’s growth picked up enough to boost employment opportunities greatly.

Obviously, this attrition strategy wouldn’t placate either extreme on the spectrum of immigration policy views. But along with the serious border enforcement Trump has consistently promised, it would achieve the crucial aims of bringing the illegals population down to much more economically manageable levels, and keeping it there. And attrition would do so in the “fair” and “humane” way that Trump understands a critical mass of American voters – rightly – are seeking.  

(What’s Left of) Our Economy: U.S. Growth Keeps Falling and Bubble-izing

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Since the government’s latest report on U.S. economic growth came out last Friday, it’s time to update RealityChek‘s monitoring of the quality of that growth – that is to say its makeup. This time, however, let’s do something a little different. Rather than simply review the figures on how dependent the economy has once again become on personal consumption and housing – the two sectors whose bloat led to the financial crisis in 2008 – at any given moment, let’s also look at exactly how much of the growth itself they’ve generated.

First, the stand-still numbers. They show unmistakably that the economy keeps creeping closer to being just as housing- and consumption-heavy as it was at the peak of the bubble in those sectors that le to that financial crisis and the Great Recession that ensued.

Peak bubble-ization occurred in the second quarter of 2005, when these two components of the gross domestic product (GDP) combined hit 73.27 percent. (As noted in this post, consumption and housing each peaked in different quarters.)

By the time the recession – the worst slump experienced by the nation since the Great Depression – had ended, in the second quarter of 2009, this figure had fallen to 70.94 percent, mainly because housing remained especially hard hit.

The new second quarter, 2016 number revealed in the Commerce Department data reported last Friday? 72.88 percent. That’s the highest level during this current recovery. (We’ll get the final revision, for the time being, next month.)

At the same time, the bad news doesn’t end there. For the economy is not only getting as bubbly as during the previous decade. It’s growing much more weakly.

The same troubling trends are apparent from the growth statistics themselves. From its second quarter, 2009 start through the second quarter of this year, the economy has grown in inflation-adjusted terms by $2.2146 trillion. But although 68.31 percent of economic activity seven statistical years ago was accounted for by consumption, these household purchases have spurred 75.91 percent of the real growth recorded since then. So consumption has clearly punched above its weight.

Housing has, too – to an even greater degree. Its share of real GDP had sunk to 2.63 percent as of the start of the recovery. But it’s been responsible for 9.56 percent of the economy’s recovery-era growth after inflation.

What happens when you put what I call this “toxic combination” together? At the recovery’s onset, as we say, they added up to 70.94 percent of real GDP. But their share of growth since then was much higher: 85.47 percent.

This method of examining American growth shows another out-performer, too: business investment. As RealityChek regulars know, its role during this recovery, and over a longer stretch, has sparked heated debate. But the controversy generally has revolved around why it’s been lagging. No need to weigh in on that subject here. For now, let’s note that although such spending – widely seen as a key to sustainable growth and prosperity – fell to 11.38 percent of real GDP at the recession’s end, it produced 24.42 percent of the real growth during this recovery. And let’s also recognize that in absolute terms, this part of the economy is still simply too small to have meaningfully slowed the revival of the toxic combination.

(Eagle-eye readers will note that these growth percentages add up to more than 100. That’s because other GDP components, notably trade and government spending, have subtracted from growth.)

If current trends continue (no guarantee, of course), sometime next year, the United States will have become even more consumption- and housing-heavy than it was at the height of the bubble decade. Will that milestone finally convince American leaders to pay attention to the quality of growth? Or will they wait until the economy crashes again?

Im-Politic: Anti-Trump Policy Experts Repeatedly Flunk the Expertise Test

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Lately, the Mainstream Media has been full of reports that major and minor American policymakers, especially including many Republicans, are flocking to the Never Trump camp. Too bad they invariably miss a crucial detail: Practically all these opponents of Republican presidential candidate Donald Trump have failed miserably when they’ve held policy jobs – as these three examples should make embarrassingly clear.

The most recent example was the widely trumpeted news that a former Deputy Secretary of Defense (the Pentagon’s number two job) named Paul M. Wolfowitz has said that “I might have to vote for Hillary Clinton” because he’s “uncomfortable” with Trump’s foreign policy positions. At first glance, this looks like trouble for Trump, since readers of these reports will quickly learn that Wolfowitz has held a number of senior national security-related jobs under Republican presidents (as well as serving as president of the World Bank). The obvious implication – this policy veteran is so alarmed by Trump that he is actively considering turning his back on his own party and supporting a Democratic candidate about which he claims serious misgivings, too.

What takes much more work to uncover is Wolfowitz’ role as a lead architect of former President George W. Bush’s invasion of Iraq in 2003.  

Now I’m someone who supported that Iraq war, too, and still thinks military action at that time was needed. But I’m in a very small minority. Most of the rest of the country – liberals and conservatives alike – now seem firmly convinced that the second Iraq war was both an unmitigated and unnecessary disaster in its own right, and a blunder that’s largely responsible for the bloody chaos that’s spread throughout the Middle East in recent year.

In other words, Wolfowitz’ record supposedly has been so catastrophic that you’d think Secretary Clinton would be rushing to reject his near-endorsement.  (This Reuters report was an admirable exception, and laid out Wolfowitz’ Iraq record.)  

The same argument can easily be used in connection with The Wall Street Journal‘s report this week that “no former members of the White House Council of Economic Advisers—spanning eight presidents—openly support Mr. Trump.”

Again, on the surface, this news looks devastating for Trump. After all, so many economists who have risen to the top of their profession oppose him! And they’ve served under so many presidents of both major parties! What thinking person therefore could even consider voting for Trump based on his views of the economy.

How about a thinking person who looks at the U.S. economy in recent decades and reasonably concludes “What a mess!” Bonus points if you recognize that even the last heralded period of prosperity – the 1990s – was underpinned by an interlocking technology and stock market bubble that was so unsustainable that a recession came when it burst by 2001.

Do you know how many of these anti-Trump White House economists warned of this downturn? Or more important, of the much worse 2008 financial crisis that largely resulted from a failure to correct the kinds of economic imbalances that began building in the 1990s? None. You don’t have to object to the very idea of “expertise” to realize that for all their credentials, in the most crucial respects, these folks don’t qualify.

And here’s something even weirder about this Journal piece: The very next day, the paper ran a long article with the following headline and subhead: “Years of Fed Missteps Fueled Disillusion with the Economy and Washington; Once-revered central bank failed to foresee the crisis and has struggled in its aftermath, fostering the rise of populism and distrust of institutions.” As the piece polling the big shot economists noted, the White House Council of Economic Advisers on which they served has often been “a stepping stone to senior policy-making positions. Alan Greenspan, Ben Bernanke and Janet Yellen all chaired the council and later led the Federal Reserve.” Further, both Greenspan and Bernanke were both totally blindsided by the financial crisis in their years as central bank head, and deserve major blame for inflating the credit bubble that produced it.

Finally, in the middle of this month, eight (eight!) “foreign and security policy appointees in previous Republican administrations,” and whose work focused on Asia, penned an open letter declaring their own support for Clinton out of fears “that Trump’s combative, ignorant views can (and will, if he’s elected) inflict great damage on our country’s global position and on its economy.”

These former officials state that they “especially fear a Trump presidency’s impact on America’s future in Asia, where China’s influence in the region, now the global economy’s center of gravity, grows apace with the country’s power. Beijing’s worldview offers less liberty and more state and military control — attitudes which, coupled to an assertive chauvinism, directly challenges an open, rules-based order.”

And they praise their former boss, George W. Bush, for “reemphasizing Asia, setting out an American-led path for the region’s future” and President Obama (including his former Secretary of State, Hillary Clinton) for having “persisted with, and expanded, this important policy pivot.”

Of course, as I’ve repeatedly shown, the Asia approach praised by this octet (and others like them) has directly and greatly strengthened China’s economic and technological prowess, and therefore its military power. Just as important, all of these Asia specialists who are now so concerned with China’s backsliding on every conceivable front were among the folks who assured Americans that greatly expanding U.S. trade and other forms of economic engagement with the PRC would turn it into a “responsible stakeholder” in world affairs.

Their open letter amounts to an admission that their hopes were completely misplaced. And we should trust their judgment now?

Of course, not every former American diplomat or leading economist who supports Clinton or simply opposes Trump is a flaming incompetent. And even if they were, that wouldn’t logically lead to the conclusion that Trump and his backers and advisers have all, or any of, the answers.  

But the media really needs to stop equating public service, even at or near the very top, with respect-worthy knowledge or ability.  As suggested by that Wall Street Journal investigation of the Fed’s actual record, nothing is likelier to fuel even more public distrust of America’s leading institutions – including the Mainstream Media.

(What’s Left of) Our Economy: New GDP Figures Cut Trade’s Contribution to Growth and Recovery Toll Remains Towering

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The government’s release of revised figures for second quarter 2016 gross domestic product (GDP) revealed a higher constant dollar trade deficit than initially judged ($562 billion versus $556.3 billion) and a smaller absolute and relative trade contribution to annualized growth (0.10 percentage points to 1.09 percent expansion versus 0.23 percentage points to a 1.21 percent increase). The second quarter real trade deficit remained the third largest largest quarterly result ($562 billion) since the first quarter of 2008 ($623.7 billion) – just after the start of the Great Recession.

As a result, trade’s cumulative drag on the economic recovery hit 8.84 percent of total real growth, with the toll taken by the Made in Washington (real non-oil goods deficit) at 19.70 percent – or $437 billion after inflation. Total real exports were still higher than in the first quarter but dipped from the previous second quarter estimate. Total real imports were up on both scores, and hit their second highest total ever: $2.6701 trillion annualized. Real services imports also declined slightly from the first estimate, but still represented a new record of $473.6 billion annualized.

Here are the trade highlights from this morning’s GDP report:

>The U.S. government’s second official look at inflation-adjusted economic growth in the second quarter of 2016 revealed that a higher-than-previously reported real trade deficit ($562 billion versus $556.3 billion) – boosted growth considerably less than initially estimated.

>The previous second quarter GDP report pegged trade’s growth contribution at 0.23 percentage points out of 1.21 percent annualized expansion after inflation – the highest such total since the fourth quarter of 2013.

>According to the new figures, however, this growth contribution was only 0.10 percentage points out of a 1.09 percent annualized expansion in constant dollars.

>The new second quarter trade deficit, although down from the final first quarter figure of $566.3 billion, was still the third highest total since the $627.3 billion recorded for the first quarter of 2008 – right after the start of the Great Recession.

>The new GDP figures took the toll exacted by rising real trade deficits during the current economic recovery to a cumulative 8.84 percent – which translates into $195 billion in lost after-inflation growth.

> Data kept separately by the U.S. Census Bureau show that the growth toll exacted by the Made in Washington trade deficit as of the second quarter has been much higher – $437 billion after inflation. In other words, real growth during the current economic recovery has been 19.70 percent lower in toto simply because this inflation-adjusted trade gap – in the non-oil goods flows heavily affected by trade agreements and similar trade policies – has risen so dramatically.

> Today’s GDP revision pegs combined real goods and services exports at $2.1081 trillion annualized. That’s 0.05 percent lower than the previous estimate of $2.1092 trillion, but 0.34 percent higher than the first quarter total. The new second quarter total is 2.05 percent lower than the all-time high for total real exports – the fourth quarter 2014’s $2.1523 trillion.

>The new combined real imports figure is a new record: $2.6701 trillion annualized. This new record eclipsed the previous high – set in the first quarter – of $2.6682 trillion by 0.07 percent. It was also 0.17 percent higher than the initial second quarter figure of $2.6655 trillion.

>The real goods export total reported today – $1.4303 trillion annualized – was – 0.22 percent lower than the first second quarter figure of $1.4335 trillion, but topped the final first quarter number of $1.4241 trillion by 0.44 percent.

>Real goods exports also peaked in the fourth quarter of 2014, at $1.4745 trillion annualized – three percent higher than the latest figure.

>The real goods imports numbers reported today ($2.1943 trillion annualized) topped those both in the previous second quarter estimate ($2.1894 trillion, for a 0.22 percent rise) and for the first quarter ($2.1941 trillion – a fractional increase).

>Second quarter real services exports of $677.4 billion annualized were 0.25 percent higher than the previous estimate of $675.7 billion, but barely nosed out the $677.3 billion mark of the first quarter. At the same time, they fell 0.97 percent short of the record ($684 billion) set in the first quarter of 2015.

>The new real services import total for the second quarter ($473.6 billion annualized) was fractionally lower than the $473.7 billion estimated in the initial report. But it still represented a new record, beating the previous all-time high ($471.9 billion), set in the first quarter of this year, by 0.36 percent.

Making News: New Lifezette Op-Ed on Obama’s Pacific Trade and Security Fantasies – & More!

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I’m pleased to announce the publication of my newest op-ed piece this morning:  a Lifezette.com article on a gaping, nuclear-related flaw in President Obama’s case for believing that his Trans-Pacific Partnership (TPP) trade deal will strengthen U.S. national security.  Click on this link to access the op-ed, which savvy RealityChek readers will see builds on my previous critiques of America’s military strategy in the East Asia-Pacific region.

Also, ICYMI, earlier this week, The New York Times op-ed page published a piece that shares my skepticism about the president’s arguments but critiques them from a different angle.  Here’s the link to the article, by Economic Strategy Institute founder and President Clyde V. Prestowitz.

And keep checking in with RealityChek for news of new or upcoming media appearances and other events.

Im-Politic: Little Thinking in The NY Times on Think Tanks

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Even though news organizations like The New York Times are big outfits where it’s hard to keep the left hand informed about what the right hand is doing, it’s disturbing to see how completely the paper has ignored its own reporting about the sophisticated form of corruption perfected by major American think tanks – and keeps mindlessly citing their work and staff members in articles.

On August 8 – just over two weeks ago – the paper ran on its front page an invaluable report on how America’s major think tanks, most of which are headquartered in Washington, D.C., now habitually produce and distribute material that promotes the interests of their corporate or other contributors. As I’ve explained, this Standard Operating Procedure is not only contemptibly deceptive, but dangerous to our democracy.

For think tanks like the Brookings Institution and the Center for Strategic and International Studies are used by policy makers and the media as important sources of information and analysis – largely because they’re seen as objective sources of expertise, just like colleges and universities. (Brookings even uses the “.edu” internet domain name.) When the main purpose of these organizations is to help their donors, they’re engaged in what I’ve called “idea laundering” – garbing special interest pleading in the raiment of scholarly integrity and independence. Worst of all, think tanks rarely disclose specific actual or possible conflicts of interest.

So the obvious question is whether The New York Times, for starters, is taking the hint, and at least begun to change its news coverage to portray think tank findings and views accurately? Sadly, the answer is, “Not yet” – at least judging from The Times‘ mentions, since the article appeared, of Brookings, whose academic pretenses it spent so much space exposing.

According to The Times‘ search engine, the paper has presented the views of Brookings staff seven times since August 8. And it’s as if the reporters and editors don’t read their own paper.

The most recent was The Times publication today of the big Associated Press story detailing the large number of Clinton Foundation donors who managed to finagle meetings or telephone conversations with Democratic presidential candidate Hillary Clinton when she served as Secretary of State. The Brookings “fellow” quoted was identified as someone who might have a bias – since Secretary Clinton was once his boss at State. But credit here should go to the Associated Press, not The Times.

Yesterday, a Times piece on the fighting in Iraq quoted a Brookings analyst once with the CIA. No special interest motive is apparent here, although the source, Kenneth Pollack, was a big backer of the 2003 invasion of Iraq. These views weren’t mentioned in the story – but maybe they were a little bit germane?

On August 18 came a Times article purporting to show that Republican presidential candidate Donald Trump is losing support among white men – widely thought to be one of his core constituencies. Many polls and political specialists were cited, which is all to the good. But one of them was “Brookings demographer William H. Frey” – who has “conducted several simulations that tried to determine how much the turnout among white men without college educations would have to increase for Mr. Trump to win.” His results were bad news for Trump.

That’s in principle fine, too. But here it’s surely relevant that almost none of Brookings’ legion of corporate donors is likely to look favorably on Trump, a loud opponent of the trade and immigration policies these businesses support. Also relevant – Brookings President Strobe Talbott is really chummy with both Secretary Clinton and her husband, the former president. Indeed, he was Deputy Secretary of State in the former’s administration, on top of several other appointive positions.

That same day, some research by Brookings economist Gary Burtless was featured in a Times post on the surprisingly large numbers of men who have been dropping out of the American workforce. Nothing objectionable here, especially since Burtless wasn’t asked to explain his findings.

More problematic was the August 17 Associated Press’ summary of the tax policy plans being touted by the Clinton and Trump campaigns this year. Because the piece, which appeared in The Times, relied in part on the work of Brookings’ Tax Policy Center, and because the issue so politically charged, it seems to me that the Talbott-Clinton connection should have at least been mentioned. Here, the fault lies mainly with the AP – although as a customer of the news service, The Times has wide latitude to edit its material.

Much less partisan was the Reuters article published by The Times August 16 on racial tensions in Milwaukee. The piece, written in the wake of a recent police shooting, offered some Brookings data on the city’s segregated housing patterns that don’t seem to be motivated by any particular agenda.

The final report in The Times, however, was another that missed Brookings’ corporate and Clinton links. The article, again from the AP, summarized and analyzed the two leading presidential candidates’ overall economic plans. The AP in particular should have noted that the Brookings staffer it quoted here, “senior fellow” William Galston, is a “former policy advisor to President Clinton.” Is it any wonder he’s so enthusiastic about amnesty for illegal immigrants!

Since think tanks do house a lot of worthy knowledge and wisdom, and since their donors have every right to participate in policy debates, the solution is obvious: adequate transparency. That way, we could all benefit from this expertise, but also have some sense of who’s been sponsoring it, why – and what it might be downplaying, slanting, or ignoring. And since The Times has done such excellent reporting on what shady institutional characters think tanks can be, is it so unreasonable to expect that the paper starts leading the way?

Those Stubborn Facts: The Highest-End Jobs Keep Getting Offshored, Too

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Global Corporate Research and Development Investment, Jan. 2013 – June, 2016

China: $24.2 billion

India: $13.1 billion

United States: $10.2 billion

 

Jobs Created by Above Investment

China: 25,700

India: 43,900

United States: 10,500

(Source: “Apple has chance to pick better R&D model in China,” by Andrew Hill, Financial Times, August 22, 2016, https://www.ft.com/content/fe00be6a-646d-11e6-8310-ecf0bddad227)

(What’s Left of) Our Economy: A Halt in the Subsidized Private Sector’s Hiring Momentum?

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Since the next U.S. jobs report (covering August) won’t be out until a week from Friday, it seems like a good idea to take stock of where the economy stands in terms of the employment being created during this weak recovery by industries that depend heavily on government subsidies for their levels of activity – and therefore hiring. (Think, in particular, “healthcare services.”) Distinguishing these jobs from those in what I call the “real private sector” matters because America’s best bet for lasting prosperity is an economy where the lead roles are played by sectors whose vibrancy is determined mainly by market forces, not government decisions.

The message being sent by the last jobs report (which covered July) and revisions for June and May mixes good news with bad news. The good: After surging through the spring, the relative growth of subsidized private sector jobs seems to be leveling off. The bad: On a January-July basis, these jobs are still a more important part of the national hiring picture than during the first seven months of last year, and their prominence remains way up over the last four years.

July’s numbers are still preliminary (as are June’s). But they show that the subsidized private sector accounted for 15.73 percent of total non-farm jobs (the Labor Department’s employment universe) and 18.58 percent of the jobs classified as private sector. The former figure was unchanged over the June level (which itself was unrevised) after a long period of steady increases. The latter was also unchanged from June, but that June figure was revised down from 18.59 percent – which also happened to be the May number.

Similarly, the subsidized private sector accounted for only 14.90 percent of July’s total monthly job gains. That’s down from 19.86 percent in June and completely different from the situation during the (apparently anomalous) month of May,. That’s when the entire non-farm economy only created 24,000 net new jobs and the subsidized private sector increased payrolls by 46,000

Of course, these shifts aren’t big (except for those involving seeming outlier May). But even small changes in direction following years of unmistakable movement one way or another can signal bigger changes down the road. So stay tuned.

As indicated, though, over the longer term, the subsidized private sector is still pacing the nation in relative employment gains by a wide margin. During the first seven months of this year, these industries were responsible for 25.96 percent of the net new jobs created by the entire economy, and 28.99 percent of the jobs conventionally defined as private sector. Those numbers are up from 24.72 percent and 25.87 percent, respectively, in 2015, and all the way up from 15.10 percent and 14.26 percent in 2013.

Viewed from another perspective, four years ago, the real private sector – the part of the economy we want to absolutely dominate hiring – generated nearly 91 percent of the total economy’s net job increase during the first seven months of the year. Since then, that share during comparable seven-month stretches has declined to 81.55 percent, 70.82 percent, and only 63.59 percent so far this year.

And even though the stand-still numbers cited above have been improving month-on-month so far this year, the subsidized private sector’s hiring employment is still much higher nowadays than at the start of the (Great) recession. In December, 2007, it stood at just 13.63 percent of all non-farm jobs and 16.26 percent of conventionally defined private sector jobs.

When the recovery began, in June, 2009, these numbers were 14.97 percent and 18.09 percent, respectively – because the private sector without subsidies was had taken such a huge jobs hit during the recession. To remind, the latest (July) figures are 15.73 percent and 18.58 percent.

Netscape founder Marc Andreessen captured a major technology, business, and economic trend a few years ago when he said that “software is eating the world.” It’s an exaggeration to say that the subsidized private sector is eating the American jobs market. But “munching on it” may not be so far off the mark.

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