(What’s Left of) Our Economy: More Measures of U.S. Manufacturing Weakness


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RealityChek has looked at U.S. domestic manufacturing’s health through the lenses of employment, wages, output, trade balances, and productivity. All have revealed a pretty dismal picture these days. But since manufacturing renaissance claims still persist, here are two other indicators that strongly suggest that the sector is hardly in a golden age – the numbers of manufacturing establishments and firms in America.

Among those who closely follow the sector, it’s widely recognized that there’s been major shrinkage in the number of manufacturing establishments in America since the early 1990s. But that number has always been a little fuzzy, because “establishment” can mean “individual facility.” Since manufacturing’s efficiency has kept growing for most of this period, fewer establishments could partly, or mainly, mean that companies are simply closing factories or other assets that are no longer needed to maintain or even increase output levels.

Luckily, surfing around U.S. government data sites today, I’ve found two statistical series that allow more definitive conclusions to be drawn. The first comes from the Labor Department, and consists of figures on establishment births and deaths by industry that are part of the Business Employment Dynamics data I used recently to shed new light on manufacturing employment. As suggested by the name, establishment “deaths” don’t come back to life whereas “closing” decisions can be temporary for a variety of reasons – including seasonal fluctuations in demand and work flow. Deaths can still stem from greater efficiency, too, but logically more of them reflect declining fortunes in the sector.

The first full year for these figures is 1994, and the most recent numbers are from the first half of last year. What they show is that 67,000 more manufacturing establishments died than were born during this period. The Great Recession of course took a major toll. Between 2007 and 2009 alone, 18,000 of these deaths took place. But domestic manufacturing has also been in the red in this regard ever since. And although establishment deaths actually have been at historically low levels in the last few years (bottoming at 21,000 in 2012 and 2013), so have establishment births. Moreover, they sunk to 20,000 in 2009 and have remained there ever since.

Just as important, establishment deaths have exceeded births throughout the current recovery. To be sure, the situation was even worse during the last recovery. But that expansion of course turned out to be a humongous economic bubble, and no one was claiming that American industry was in the best of health then.

A Census Bureau series with birth and death figures at the firm level within manufacturing tells an even grimmer story. The death of companies is much less likely to be a sign of greater efficiency than even the death of establishments, since dead companies aren’t going to be reopening their facilities. These Census statistics date from 1977 and run through 2013. They show that in that first data year, 259,982 manufacturing companies were in operation in the United States. These ranks peaked at 302,306 in 1996, but as of two years ago, stood at only 230,708. And as with the establishment births and deaths numbers, the number of companies kept on shrinking once the last recession ended (in 2009) – from 250,707.  And shortly afterward the manufacturing renaissance was first forecast.

There is one possible mitigating factor here. A fascinating article in IndustryWeek last June called attention to the growing trend of consolidation in manufacturing. Manufacturing firms merging with or acquiring each other, or combining with non-manufacturing firms, would obviously reduce the number of industrial companies without indicating any loss of dynamism or competitiveness.

According to numbers presented by author Michael Collins, from the late 1940s till the onset of the last recession in 2007, ownership concentration in manufacturing has increased more than seven-fold. And these concentration levels really began taking off in the mid-1980s, once changes in financial regulation fostered a wave of corporate takeovers by greatly encouraging the use of debt and leverage. Collins doesn’t present any such data for this recovery, but it’s likely this trend has continued given how the Federal Reserve’s easy money stimulus policies have kept interest rates at historic peacetime lows.

So the shrinkage in manufacturing firm numbers due to business failure needs to be teased out from the number due to consolidation, and as a result, these decreases could still be consistent even with claims of an historically healthy U.S. manufacturing sector. But that’s a case that the manufacturing renaissance crowd still needs to make.

Our So-Called Foreign Policy: Which Paris Message Will ISIS Hear?


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President Obama has made a pretty good point in arguing that going ahead with the global climate change conference in Paris this week despite the recent terror attacks on that city is an “act of defiance” against ISIS and other extremist groups – Islamic or not. Unfortunately, he and other major world leaders have missed a message they’re inevitably sending to the terrorists with other recent decisions – which signal the absence of anything close to similar resolve to develop a credible military strategy for defeating them.

No one should have any illusions that the Paris talks themselves will produce meaningful progress toward controlling the carbon emissions widely thought to be dangerously warming the planet. In fact, none of its decisions will be legally binding (although there have been some interesting attempts to parse this concept). But not only has the issue been persistently on the international agenda for decades. More than 170 countries – including the largest sources of the problem – have made specific proposals to reduce emissions. In addition, eight of the biggest emitters have collectively promised to double their supplies of renewable energy.

There also seems to be broad agreement on a specific goal – avoiding an average global temperature increase of 3.6 percent more degrees Fahrenheit. Even the private sector is joining in, led by Microsoft founder Bill Gates’ pledge to spend $2 billion of his own money to foster green innovation. This commitment is conditioned on greater government efforts, but other wealthy individuals reportedly are interested in contributing, too.

Contrast these developments – inadequate and flawed as they are – with global efforts so far against ISIS. In the wake of the Paris attacks, President Obama has declared only that the United States will “intensify” its current strategy – and that no major deployments of American ground troops will be made. The leaders of Britain and France have announced their intent to increase defense spending, but early indications are that at least some of the new counter-terrorism funds will come from other defense accounts – even though Europe faces a more aggressive Russia, too. Moreover, these increases come after years of major defense spending decreases and (at least in retrospect) shockingly inadequate budgeting against terrorism in particular.

And although the United Nations has condemned the Paris attacks and the Security Council has authorized military action against ISIS, no member state (as usual) is required to spend a penny or risk a single life to vanquish this “global and unprecedented threat to international peace and security” and no follow-up actions – or even words – appear in the offing. Moreover, let’s not forget that the U.S. Congress has failed even to pass a new authorization to use military force in the region in response to President Obama’s request.

So although it’s encouraging to see a business-as-usual attitude on climate change issues adopted by world leaders in defiance of terrorists, the lack of comparable resolve on the battlefield seems all too likely to overwhelm its intended effects.

Im-Politic: What the War on Trump is Really Telling Us


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Let’s put it this way: If you gave me the power to create a politician with an ideal presidential personality, the product wouldn’t be an identical twin of Donald Trump. Don’t get me wrong: I’m fine with an in-your-face style generally speaking, and in politics in particular. In fact, given the abject failures of conventional politicians across the political spectrum combined with their continued sense of entitlement and arrogance, I think it’s great that Trump is blasting and ridiculing their pretensions of competence and claims to special degrees of respect.

At the same time, as I’ve pointed out repeatedly here at RealityChek, too many of Trump’s remarks have been thoughtless and gratuitously mean-spirited. Worse, with just a little premeditation and deftness, he could have made the same points about his critics in Democratic and Republican ranks, and in the Mainstream Media, with just as much force and far wider appeal. Ditto for more policy-oriented statements on issues ranging from Mexican immigrants to databases for Muslim Americans. (He’s walked back the latter, but clearly endorsed the idea in an off-the-cuff – and thoughtless – answer to a question.) This kind of carelessness is worrisome because it’s unnecessarily divisive at home, and can be dangerous in international affairs, where presidential language can make the difference between war and peace, and send dangerously confusing or completely misleading signals to allies and adversaries alike.

So clearly it’s time for Trump to up his game if he’s going to expand his following, and deserve the trust of enough Americans to win the Republican nomination and go on to the White House.

But it’s time for Trump’s enemies in the media, which plays an especially important role in our democracy, and in the political arena to up their game, too. The former need to stop hysterically seizing on every intemperate – and even childish – statement made by Trump as a sign of utter disqualification for political office, much less a sign of incipient fascism. Ditto for their descriptions of his followers as racists and even proto-Nazis.

In fact, if they want the increasingly heated, angry tone of American politics these days dialed down, maybe they could shine their spotlight more brightly and more consistently on the economic losses suffered by too many middle class and working class American voters for decades, and on their devastating impact (which goes far beyond lower living standards to include family break-ups and other social pathologies, deteriorating health, and even greater mortality).

They could also take with some seriousness the fears of comparably large numbers of Americans about the nation’s vulnerability to terrorist attacks; about the wisdom of admitting much greater numbers of Middle Eastern refugees despite major misgivings about security screening procedures expressed by President Obama’s advisers; and about Mr. Obama’s adamant insistence that the situation is in fact under control, and that doubters are betraying the nation’s leading ideals.

Just looking at the economics of this campaign year, here’s one admittedly imperfect but revealing sign of the media’s skewed priorities. If you Google “Trump” and “Nazi,” you get 16.1 million results. If you Google “white mortality,” you get 17,000 results. That latter phrase refers to a recent study co-authored by the latest recipient of the Nobel prize for economics showing that mounting economic strains are literally killing larger and larger numbers of middle aged white Americans. And you wonder why Trump voters – who come frequently from those ranks – feel angry and ignored?

Politicians deserve more indulgence, since they’re under no professional obligations to be accurate or objective. But they can up their game in similar ways. If Republicans, in particular, are genuinely alarmed at the prospect of a Trump victory, maybe they could spend less time vilifying the front-runner and more time proposing policies that could respond to their needs.

Interestingly, a growing number of GOP presidential candidates are now registering opposition to amnesty-friendly, Open Borders-style immigration policies – even Florida Senator Marco Rubio, a member of the so-called Gang of Eight that tried to steer such legislation through Congress. Moreover, several have also – so far – turned their back on President Obama’s Trans-Pacific Partnership, normally the kind of offshoring-focused trade agreement that they and their Big Business funders consistently demand.

Just as interestingly, however, the apparently converted don’t include either former Florida Governor Jeb Bush or current Ohio Governor John Kasich. Both keep touting the virtues of trade policies that are proven job-, wage-, and growth killers, and immigration policies with similar effects. And both have been among the loudest (and angriest) anti-Trump voices. Maybe if they stopped shilling for the intertwined offshoring and Cheap Labor lobbies, they might actually start eating into Trump’s lead. Or at least their poll numbers might break out of single digit-territory. But so far, it seems like they’re doubling down on demonizing Trump. Reportedly, there’s big money behind these escalating efforts. Maybe if they helicopter it on primary days, they could even buy a few voters.

Im-Politic: Another Big Media Honcho – Charles Lane – Goes All Sick Puppy


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If Charles Lane wasn’t a stalwart of the Mainstream Media, and indeed the punditocracy, it wouldn’t matter that he’s a acting like a sick puppy. But because he’s both a columnist for the Washington Post and a contributor to the paper’s belligerently dogmatic unsigned editorials on trade policy (and other economic and business issues), it matters considerably and is worth reporting in some detail. For it speaks volumes about why the Big Media’s finances and credibility are increasingly on the ropes.

You’ve all encountered sick puppies at some point. They’re the folks who can dish it out, but can’t take it, no matter how serious or light-hearted the debate or exchange – who believe they embody special virtue and deserve special status and treatment; who wind up fleeing the scene with their tails between their legs when they can’t take the heat; and who, after the old French proverb, bitterly condemn as wicked those who defend themselves when attacked.

I first ran into a Mainstream Media puppy sick enough to write about earlier this year, when I reported that New York Times columnist Charles Blow had blocked me on Twitter even though I had had no direct social media contact with him, and had only even mentioned him critically (but entirely respectfully) on two occasions.

Lane at least decided he’d had enough after direct contact on Twitter. But it was so minimal, and my tweets so entirely appropriate (albeit not reverential), that he belongs in this doghouse, too.

It all began with a column Lane had written about Thanksgiving and what it should be teaching Americans nowadays. As he saw it, Americans are living in “the most prosperous and secure nation in human history,” but demagogic presidential candidates are “encouraging voters to think of themselves as victims of a ‘rigged system — or demonizing everyone and everything, from the incumbent president, to Congress, to their Muslim neighbors, to the media, to ‘the billionaire class.’” And worse, these (presumably imagined) grievances have taken hold among the public, producing a season of unusually sharp “political discontent” and overshadowing “the big things [Americans] all have in common” – and (again, presumably) should be thankful for.

At many other times in American history, Lane would have had a reasonable – and indeed important – point. Moreover, however hard times are – and especially at Thanksgiving – it’s always good to step back, get some perspective, and try focusing on whatever blessings we have. Therefore, Lane would have had an especially good argument had he not so explicitly used it to condemn presidential candidates he doesn’t like, specifically Democrat Bernie Sanders and Republican Donald Trump.

But he did make this connection. And in my view, it was particularly and revealingly tone deaf at best and clueless at worst because two major economists (including the latest Nobel Prize-winner) have just reported that the trade and immigration policies that these candidates have attacked – and which Lane and the Post have consistently championed – are not only killing jobs and wages for the American middle and working classes. They’re literally killing middle and working class whites themselves.

So this year, it seems to me, the candidates who Lane charges are “inflaming and exploiting mutually exclusive grievances,” and the voters responding to them, are on to something legitimate, and might be cut some slack by their Lane-like political opponents in the Mainstream Media. As a resulted, I tweeted, “Elite #journo @ChuckLane1: US #politics not rigged 4 #billionaire class, & too many Americans too darned unthankful.”

To my surprise, Lane “Liked” this tweet – though it’s hard to tell whether he took the point or was being snarky.

A little while later, though, he did something much more surprising – he responded to a previous tweet I had sent about trade issues. A news report had revealed that South Korea had decided to fine Volkswagen for its widespread practice of rigging the software in its vehicles to fool government emissions tests. Since South Korea has all but hermetically sealed itself to auto imports for decades, I tweeted, “Kinda surprised that protectionist #SouthKorea has let in enough #Volkswagens to fine!”

This comment elicited the following reaction from Lane: “Has it occurred to you that you didn’t know how protectionist they really are? #No.” In all honesty, I had no idea what he was trying to say, though I suspect it was something critical of my position. That’s of course fair enough. But genuine puzzlement was – and remains – foremost on my mind. (Feel free to let me know your own interpretation.)

So I tweeted back “Happy Thanksgiving, but please practice your #tweeting. Yours was painfully muddled.”

Snide? Sure. Over-the-top contemptuous or hostile or insulting? Obscene? Outside the bounds of respectable discourse? Not even close, in my opinion. But this is in fact what set Lane off. A few moments later, he shot back, “Where is that ‘block’ button? There we go!” And he thereby set the Twitter controls to ensure that he would not hear anything from me unless he changed his mind, and that I could see none of his tweets (unless someone I follow re-tweets or otherwise mentions him).

What’s bizarre about Lane’s actions is that he wasn’t following me, and therefore could only see tweets of mine if he was expressly looking for them, if I responded to one of his, or if I mentioned his name in one of my own tweets. Just as weird – Lane felt the need to let me know that he was blocking me. That wasn’t necessary at all. Did he think I cared? Did he feel the consequent need to gloat or flaunt his power? He couldn’t have thought that he’d prevent me from seeing any of his material, since it’s easily available at the Post, and his views can be heard on the Fox News talk shows where he appears as a contributor. Therefore, I am just as free to attack or praise him on Twitter (and I have complimented one or two of his columns) as I ever was.

Again, feel free to send me your interpretations. But here’s mine: Lane makes his living with words. My tweet called attention to an instance of his ineptitude with them – and in turn implicitly (and credibly) called into question his qualifications and position as a premier American thought leader (as these folks are now called). This observation stung because although journalism tends to views itself as a profession, it’s nothing of the kind. There’s no important body of knowledge to master, and therefore no objective basis for evaluating performance or even competence.

So it’s reasonable to suppose that those near or at the top of this trade, like Lane, don’t owe their prominence solely, or perhaps even mainly, to merit. Hence, challenging the expertise or the word-smithing skills of the Big Media’s members is like revealing that these emperors have no clothes – and that their opinions deserve no special regard.

Lane’s touchiness therefore is understandable. But is it a recipe for “winning friends and influencing people” (Google it!) – not to mention the better revenues essential for the Big Media’s survival in its current form? Not, as they say, so much.

Im-Politic: The New York Times Fails the Test of Media Bias on Refugees/Terrorism


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The New York Times has long proclaimed itself to be the nation’s (and maybe the world’s) newspaper of record, dedicating to publishing “All the news that’s fit to print.” But when it comes to its coverage of the debate over admitting refugees from today’s war-torn Middle East, the paper’s approach seems to be “All the news that fits support for leniency.” For twice within the last week alone, The Times has put out features that completely ignore some of the most important facts that have complicated this controversy.

Last Friday, The Times ran an item emphasizing how long refugees from Syria must wait to enter the country, and how many background checks they face. That’s undoubtedly useful information. But did reporters Haeyoun Park and Larry Buchanan even mention the complete absence of independent corroborating information available to the federal or United Nations officials trying to vet them? No. Did their editors believe that such information was pertinent, and that Times readers deserved to know it? Apparently not.

In fact, there’s no evidence that the reporters consulted with specialists on refugee admissions and border security who harbor major doubts about screening’s sufficiency. Nor is there evidence that the editors requested more diverse sourcing. This conclusion seems justified because the only sources of information listed at the item’s end are agencies of an Obama administration that’s been vigorously, and often belligerently, insisting that the vetting situation is under control, and two non-profit organizations that strongly support this position. So the article unavoidably created the impression that not only are current Syria refugee procedures painstaking, but that they are painstaking enough.

Comparable lapses characterize today’s Times offering on “the origins of Jihadist-inspired attacks in the U.S.” According to this article, “All of the Sept. 11 attackers entered the United States using tourist, business or student visas. Since then, most of the attackers in the United States claiming or appearing to be motivated by extremist Islam were born in this country or were naturalized citizens. None were refugees.”

That’s important to know. But it’s at least as important to know that Alabama Republican Senator Jeff Sessions has released a list of 12 vetted refugees who this year alone have been charged or implicated in federal courts of participation in Jihadist attacks in the United States.

In addition, two years ago, ABC News reported that “The discovery in 2009 of two al Qaeda-Iraq terrorists living as refugees in Bowling Green, Kentucky — who later admitted in court that they’d attacked U.S. soldiers in Iraq — prompted the [FBI] to assign hundreds of specialists to an around-the-clock effort aimed at checking its archive of 100,000 improvised explosive devices collected in the war zones, known as IEDs, for other suspected terrorists’ fingerprints.”

ABC then proceeded to quote by name the FBI agent in charge of the bureau’s Terrorist Explosive Device Analytical Center as stating that “We are currently supporting dozens of current counter-terrorism investigations like that.” Moreover, according to the report (which quotes numerous other FBI agents by name), “Several dozen suspected terrorist bombmakers, including some believed to have targeted American troops, may have mistakenly been allowed to move to the United States as war refugees….”

These disclosures don’t invalidate the article’s claim about the great number and severity of the terrorist threats to Americans that have not come from refugees. But they completely invalidate the clear suggestion that tighter restrictions on refugee admissions, which President Obama has so far adamantly refused to consider, can not meaningfully enhance Americans’ security. Nor did either Times piece mention the live possibility that the refugee threat could grow significantly going forward, as the Middle East experiences ever heavier, bloodier conflict, and as the U.S. and other militaries keep failing to put the kind of pressure on ISIS that kept Al Qaeda on the run for much of the post-September 11 period.

Also revealing – and unacceptable: Similar to the first piece, none of the “security experts” quoted in the piece contradicted the Obama line. The only ones mentioned by name come from the New America Foundation, which has a long record of backing the president’s domestic and foreign policies, and the Cato Institute, which has long favored an Open Borders approach to American immigration policy. How difficult would it have been for Times reporters Sergio Pecanha and K.K. Rebecca Lai to find specialists who disagreed? And again, did their editors even make this request?

The point here isn’t that Mr. Obama and his supporters are indisputably wrong and that their opponents are indisputably right about refugee policy. The point is that the issue is complicated, that important evidence can be cited to support both of the groups of approaches that have recently emerged, and that a responsible newspaper would not have pretended that the case for the status quo is airtight. If the powers-that-be at The Times want to make that case (as is of course their right), they should use the editorial page.

(What’s Left of) Our Economy: Third Quarter Growth Picks Up but Trade Bite Deepens – Along with Toll on Entire Recovery


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Trade’s drag on recent economic growth and on the current economic recovery increased in the third quarter of this year, according to today’s first revision of the July-September gross domestic product (GDP) figures – although growth itself accelerated. Since the recovery began in mid-2009, the real trade deficit’s continued rebound has now cut cumulative inflation-adjusted U.S. growth by 8.62 percent – or nearly $178 billion on an annualized basis.

The new GDP figures also showed that the after-inflation trade deficit in the third quarter hit its highest level since early 2008. In addition, real overall exports retreated from the new quarterly record levels revealed in the previous GDP figures, but the new record reported for real overall imports rose even higher. The new record set by goods imports increased as well, and despite small downward revisions to each, levels of services exports and imports remained at all-time highs.

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

>Today’s GDP figures, which present the second read on the third quarter of 2015, show that trade’s impact on American economic growth was more damaging than reported in the initial estimate.

>According to the new GDP figures, the third quarter inflation-adjusted goods and services trade deficit hit $544.1 billion on an annualized basis – higher than the second quarter’s final (for now) $534.6 billion, and the worst such figure since the $550.4 billion registered in the second quarter of 2008.

>As a result, trade’s impact on growth changed from a net contribution of 0.18 percentage points of a 3.90 percent annualized gain in the second quarter, and an initially reported 0.03 subtraction from a 1.50 percent third quarter gain, to a 0.22 percent subtraction from a 2.10 percent increase.

>Moreover, the new GDP figures show that the growth of the inflation-adjusted trade deficit has continued to slow the overall economy’s real growth since the current weak recovery began in mid-2009. Had the trade shortfall simply held steady, the economy’s cumulative expansion would have been 8.62 percent greater – $177.8 billion on an annualized basis.

>Separate figures (from the Census Bureau) show that the recovery drag of that portion of the trade deficit strongly influenced by trade deals and related policies – the real non-oil goods deficit – has been much greater. Since the second quarter of 2009 through the third quarter of 2015, its increase has cut cumulative recovery-era growth by fully 24.36 percent. Had it simply held steady, cumulative recovery real growth would have been nearly $502.37 billion greater on an annualized basis through the end of the third quarter.

> The new third quarter data revised total U.S. inflation-adjusted exports down from $2.1275 trillion annualized to $2.1221 trillion. The previous figure was a record. The revised figure is below the all-time high of $2.1239 trillion (achieved in the fourth quarter of 2014). Combined real goods and services exports in the second quarter were $2.1175 trillion – 0.22 percent lower.

>Yet the greater amount of total real imports reached record territory again, too. At $2.6662 trillion, it was 0.53 percent higher than the second quarter’s $2.6521 trillion – the former high. 

>Annualized real goods exports for the third quarter were revised down as well – from $1.4545 trillion to $1.4502 trillion. As a result, whereas the initial set of third quarter figures showed a goods exports increase over the second quarter total ($1.4520 trillion), the revisions show a sequential decrease. Goods exports peaked in the fourth quarter of 2014 at $1.4743 trillion.

>The revisions, however, kept intact the record for annualized inflation-adjusted goods imports initially reported for the third quarter – and modestly increased the total. Previously reported at $2.1823 trillion annualized, the third quarter amount is now pegged at $2.1853 trillion.

>The new records set for real services exports and imports both remained intact in the new third quarter figures as well, although both were revised slightly lower.

Our So-Called Foreign Policy: Worries About Another U.S. Screening Process – For Defense-Related Technology Assets


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As Americans have embroiled themselves in a heated debate over how adequate screening procedures are for refugees from the war-torn Middle East, some big, possibly dangerous holes in another key security government screening system may have opened wide – the inter-agency process for vetting proposed foreign takeovers of or investments in U.S. companies when the deals have national security implications.

According to a valuable report by the tech industry publication EE Times, China has proposed buying outright or acquiring important stakes in no less than five major American technology firms this year alone. One such bid, for leading memory chip maker Micron, has been squashed – at least for now – in part because of likely opposition from the inter-agency group, known as the Committee on Foreign Investment in the United States (CFIUS).

Two more are awaiting CFIUS analysis. The first is the purchase of a 15 percent stake in hard disk drive manufacturer Western Digital by the investment arm of China’s government-controlled Tsinghua University. The second is Hewlett Packard’s sale to the same Chinese entity of its telecommunications hardware, server, storage, and technical services assets in China.

Judging from CFIUS’ decisions in two previous cases, though, the Chinese government – and its U.S. partners-to-be – have little reason for concern. For Washington has approved the sale of Omnivision to a Chinese investment consortium, and Integrated Silicon Solutions Inc. to similar buyers. Omnivision makes image sensors important for semiconductor design and manufacturing, while Integrated Silicon Solutions is a fabless memory chip producer. Apparently CFIUS saw no significant national security potential in either transaction, even though semiconductors are vital building blocks of all advanced weapons systems, and even though all Chinese investors prominent enough to bid for such key foreign assets are either directly or indirectly controlled by Beijing.

In addition, another tech publication has reported that CFIUS is looking into the sale to yet another group of Chinese investors of Philips’ LED lighting division, including “a broad patent portfolio of more than 600 patent families related to LED manufacturing and automotive lighting.” And EE Times has recently explained why financially struggling American communications chip giant Qualcomm could be China’s next target.

More ominously, the Tsinghua investment arm has announced intentions to spend $47 billion over the next five years to build up China’s tech sector by purchasing foreign companies and knowhow, and that America’s tech sector is its top target. So it looks like, at the least, CFIUS will be kept pretty busy going forward. Then again, since prospective foreign buyers aren’t legally obligated to notify CFIUS of their intentions, who’s to say?

(What’s Left of) Our Economy: Evidence that Manufacturing Job Gains Have Been Overstated


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Last week, I reported on a set of U.S. government jobs statistics that were new to me, and that painted a decidedly bearish picture of the American employment scene and indeed of the entire economy’s chances of avoiding a recession in the near future. Since then, I’ve learned two other important facts about this data series, which is called the Business Employment Dynamics (BED) series.

First, although it comes out quarterly, and with a two-three-quarter lag, it’s based on a sample more than ten times bigger than that used by the Labor Department’s main jobs statistics – the non-farm payrolls (NFP) numbers that come out in the form of breathlessly followed monthly reports. Second, according to the BED, manufacturing’s jobs gains during the current recovery have been even weaker than described by the NFP numbers. (So, by the way, is overall job creation, at least per the latest first quarter, 2015 BED figures.)

The ongoing recovery began in mid-2009, so for convenience’s sake, let’s look at the annual data from 2010 on. According to the NFP figures, on a December-to-December basis, from 2010 through the end of last year, domestic manufacturers added a net of 706,000 jobs. If you go January-to-January, the number is just 642,000. But both figures are higher than the comparable BED total of 628,000.

For the first quarter of 2015, moreover, the NFP numbers tell us that domestic manufacturers generated 26,000 net new jobs on a December-to-March basis, and 9,000 on a January-to-April basis. But the BED data reports that they generated no net new jobs at all during this period.

At least as interesting, according to the BED figures, gross manufacturing job gains of 385,000 in the first quarter of this year represented the lowest quarter total since the second quarter of 2009 – when the Great Recession ended and the sector on net was still hemorrhaging jobs. But the 385,000 job loss figure was pretty standard for the recovery once its early days of strong manufacturing snap-back from an historic recessionary dive had passed.

In theory, subsequent BED reports will reverse the pattern so far and reveal manufacturing employment figures more robust than those in the NFP reports. But if they don’t, it’s clear that all those claims of an historic American manufacturing renaissance will look farther off the mark than ever.

Im-Politic: Washington Week (Unwittingly) Nails it on Anti-Terror Strategy


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Let’s hear it for Washington Week in Review! Seriously! Like most news talk shows, it’s usually only useful for conveniently summarizing the Mainstream Media conventional wisdom on current events at home and abroad. But it’s latest broadcast shed important light (albeit unwittingly) on a major and positive development in American public opinion on dealing with the threat of ISIS terrorism.

A principal theme of this latest PBS show was the alleged disconnect, in the wake of the latest Paris terrorist attacks, between Americans’ clearly heightened fears of terror strikes at home on the one hand, and on the other their apparent view that limiting Middle East refugee admissions is a better response than crushing ISIS militarily with American forces.

As Washington Week anchor Gwen Ifill indicated, she was “surprised” that the political flashpoint created by these latest terror strikes “did not turn, as it has in the past, on questions of war and retaliation but, as we’ve been discussing, on whether refugees from the fighting in Syria should be allowed into the U.S.”

Similarly, The Washington Post‘s Ed O’Keefe agreed with Ifill that it was “incredible” that new poll findings released by his paper and ABC News indicated continued public reluctance to send large numbers of American ground troops to the Middle East to fight the ISIS organization that claimed responsibility for Paris – just as other polls revealed majority opposition to those refugee admissions.

And according to RealClearPolitics.com’s Alexis Simendinger, these results showed a lack of consensus among Americans who she described as “all over the map” on these issues and in fact (understandably, of course) “confused.”

In fact, as is so often (and seemingly increasingly) the case, the public here looks to be way ahead of its leaders – and much wiser. For these poll results are completely consistent with my oft-stated view that the best way to deal with the threat posed by ISIS is not to seek its decisive defeat on the battlefield – since the Muslim-Arab world’s culture and society are so terminally ill that a powerful ISIS successor is bound to appear eventually. Instead, as the poll indicates, the public understands that America’s anti-terrorism efforts are best focused on what the government can plausibly hope to control much more effectively – its own borders and their continued excessive porousness.

There’s an obvious way to fill this gap in the analysis offered by Washington Week and its counterparts: Include a typical Main Street American in the discussions. Ratings could well soar. And just as important, their supposed experts might actually learn something worth knowing.

Im-Politic: Why Most of the U.S. History Wars Shouldn’t Even Be Fought


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Last week I wrote about my experiences with the political correctness and free speech disputes at my alma mater Princeton University in the mid-1970s and, what do you know? They reappeared on the campus this past week in their “history wars” form. It’s worth covering – but not because the demands for more or less erasing the physical legacy of former university and U.S. President Woodrow Wilson from the campus were especially novel or unusual according to the standards of our time. Nor was the university’s response, which could be interpreted in various ways ranging from a polite brushoff to an instance of kick-the-can-ism.

Instead, this episode is worth covering because it provides a good opportunity for presenting some common-sense guidelines on depicting historical figures in public spaces or within private communities when such a private controversy arises (as in the case of a private university).

The Princeton students protesting the university’s longstanding showcasing of Wilson base their position on the former president’s segregationist views on racial subjects and on the segregationist policies he approved during his White House tenure. There’s no legitimate doubt that their accusations are accurate.

Defenders of the university status quo have pushed back with equally accurate points – noting that some of Wilson’s decisions on a related question – the role of Jews in American society – both on the campus and in Washington, D.C. were enlightened by the standards of his time. Indeed, they legitimately go even further, and argue that, in both these positions, Wilson was a major champion of many progressive values. (Here’s an excellent summary of this case.)

In my view, the pro-Wilson forces have the better argument, by a considerable margin. But they don’t deserve victory for the reasons they emphasize – i.e., because their opponents have failed to recognize what how exemplary Wilson really was. Instead, their position is stronger because it makes clear what should matter most in evaluating and acknowledging the role of historical figures: the sum total of their records and significance. As a result, leaders like Wilson deserve recognition because their impact on university and American history far transcended characteristics rightly regarded as shortcomings today, and that were hardly impressive even in their own eras.

That is, Wilson was not simply a racist. He was someone whose actions shaped American politics and higher education in ways felt even today. And because this record was at worst lamentable in some (but hardly all) respects, it’s fitting and proper that the nation – and the university – have decided to honor him.

In this way, therefore, Wilson resembles the Founding Fathers. As widely known, Washington and Jefferson were slave-holders. But obviously they were so much more. It’s somewhat less widely known that Lincoln held racist views about black people. But he was so much more. This point might seem indistinguishable from the debate over merits that I just belittled, and obviously they’re very close. The essence of it is, though, that for figures of wide-ranging importance whose legacy was not overwhelmingly malevolent, these debates simply shouldn’t be necessary. Therefore, when they break out, the kind of common sense that’s essential for sound decision-making inevitably and damagingly takes a back seat.

Moreover, in this way, Wilson, the Founders, Lincoln, and others in this category fundamentally differ from, say major Confederate leaders. Although Robert E. Lee, for example, served America admirably in the Mexican War (which was not an especially admirable venture), his name wouldn’t be on roads, public schools, and even university campuses all over the country because of that role, or even because he became commander at West Point. He’s only widely remembered at all because he was a leader of the greatest single act of treason – and one motivated overwhelmingly by racist considerations – in American history. So he clearly belongs in the textbooks – along with other prominent Confederates. But honoring their memory, and that of their cause, is disgraceful.

Not every such decision is an easy call. Andrew Jackson, for instance, embodied many praiseworthy populist impulses, and was certainly a consequential president. He also rose above sectional interests and perspectives by opposing southern claims of states rights over federal law, and would have enjoyed great ratings had opinion polls existed back then. But his Indian expulsion policies were reprehensible, and arguably so even for the early 19th century.

If the common sense rule is invoked, however, Americans shouldn’t be faced with too many of these hard calls. Because the essence of history is change, and because it’s vital to keep learning about and rethinking the past, judgments about various historical events and individuals should never be fixed in stone or so viewed. But unless you think that the basic, admirable narrative of American history is fundamentally wrong, or that most of our leading forebears were in fact generally contemptible, you’ll agree that the overwhelming burden of proof is on the revisionists to overturn the current consensus on events and individuals that Americans have chosen to honor – and that far more often than not, this burden has not remotely been met.


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