(What’s Left of) Our Economy: Modest Trade Improvement Helps Lift U.S. Growth a Bit


, , , , , , , , , , ,

The government’s first revision of first quarter gross domestic product (GDP) figures showed that the inflation-adjusted trade deficit shrank slightly more than originally reported on a sequential basis, and therefore boosted growth by fractionally more (0.13 percentage points rather than 0.07 percentage points). Nonetheless, the quarter-to-quarter positive swing in trade’s growth role (1.95 percentage points) now matches the biggest such change since the fourth quarter of 2010. The $599.9 billion quarterly real trade still represented the second biggest quarterly total since the $623.7 billion run up in the first quarter of 2008, just after the last recession officially began.

The new GDP figures show all of the major categories of after-inflation exports and imports still at new quarterly records, with the former generally fractionally higher and the latter generally fractionally lower. (Services exports were the exception.) The cumulative growth drag created by the real trade deficit’s increase during the current, historically feeble economic recovery shrank from 9.70 percent in the advance first quarter GDP read to 9.32 percent. Separate Census data show that the Made in Washington trade drag declined in the first quarter as well, but at 21.26 percent still represented nearly $533 billion in foregone real output.

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

>The government’s second look at first quarter U.S. gross domestic product (GDP) showed that a slightly smaller real trade deficit than previously reported made a slightly larger contribution to inflation-adjusted growth.

>The new $599.99 billion annualized trade deficit number (down from the previously reported $605 billion) means that the shortfall shrank sequentially by 0.84 percent. As a result, trade’s absolute boost to growth (0.13 percentage points) was larger than the 0.07 percentage point figure reported last month.

>Moreover, the quarterly positive swing in the trade’s growth role from the fourth quarter of last year (when it subtracted 1.82 percentage points) grew to 1.95 percentage points – matching the biggest such total since the fourth quarter of 2010.

>At the same time, this quarterly trade gap was still the second largest since the $623.7 billion deficit registered in the first quarter of 2008, as the economy was just starting to succumb to the Great Recession.

>All categories of exports and imports tracked in the real GDP figures remained at new quarterly records in the first quarter, with all export totals except for services exports rising modestly, and all import totals falling modestly.

>Combined annualized goods and services exports in the first quarter were upgraded from $2.1675 trillion to $2.168 trillion – 1.43 percent higher than the fourth quarter’s level. The previous quarterly all-time high had been $2.1620 trillion annualized, set in the third quarter of last year.

>The goods export total was revised up from $1.4828 trillion to 1.4832 trillion – an increase of 2.04 percent over the fourth quarter. The previous record of $1.4792 trillion was also set in third quarter, 2016.

>Services exports remained unchanged at $685.8 billion annualized – and still topped the previous record of $684 billion record set in the first quarter of 2015.

>Total annualized first quarter imports were pegged at $2.7679 trillion – a bit lower than the previously reported $2.7703 trillion level, and 0.93 percent higher than the fourth quarter total. The new first quarter level still bested the previous $2.7424 billion record of that fourth quarter.

>Goods imports also were revised down fractionally, from $2.2797 trillion to $2.2782 trillion. That still represented a 1.03 percent increase over the fourth quarter level of $2.2549 trillion – the previous record.

>Services imports were reported last month at their eighth straight quarterly record., and they remained so in today’ report. But the previous $488.3 billion figure was revised down to $487.4 billion – a 0.47 percent sequential increase.

>According to these new GDP figures, the trade drag on the current, historically weak, economic recovery was smaller in the first quarter than previously estimated. The 9.70 percent figure was revised down to 9.32 percent – somewhat lower than the fourth quarter’s 9.71 percent. The new data mean that the economy has grown by $233.6 billion less in real terms during the recovery due to the increase in the real trade deficit.

>The trade drag created by the Made in Washington deficit is still more than twice as great, according to the GDP data and separate figures compiled by the Census Bureau. But it, too, has been slightly downgraded.

>This deficit strips out U.S. trade in oil (which is rarely the subject of trade deals or related policy decisions) and services (where liberalization has made relatively little progress). The growth of the remaining real non-oil goods deficit during the current recovery has slowed cumulative inflation adjusted growth by fully 21.26 percent.

>That’s down from the 21.67 percent growth loss that could be calculated from the previous GDP report, but it will means that the growth of this policy-influenced trade deficit has cost the U.S. economy $532.9 billion in cumulative inflation-adjusted production during this recovery.

Our So-Called Foreign Policy: Trump’s Real NATO Mistake


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

President Trump’s tireless critics are at it again, accusing him of calling into question America’s “sacred” and allegedly legally binding obligation to come to the military defense of any of its European allies in the North Atlantic Treaty Organization (NATO) if they come under armed attack.

As charged by the author linked above (from the reflexively establishmentarian Brookings Institution), the president’s refusal to endorse this obligation explicitly in his speech today at alliance headquarters in Brussels, Belgium, will “raise grave doubts about the credibility of the American security guarantee and provide Russia with an incentive to probe vulnerable Baltic states.” Sounds awful – and unprecedented – right? Actually, not even close.  But as you’ll see, Mr. Trump could be on his way to creating another big – and completely unnecessary – problem.

In the first place, in concrete terms, Article Five legally obligates the United States to do absolutely nothing specifically if one of its NATO allies comes under assault. The clause simply requires treaty signatories to “assist the Party or Parties so attacked by taking forthwith, individually and in concert with the other Parties, such action as it deems necessary, including the use of armed force, to restore and maintain the security of the North Atlantic area.”

And this flexibility-preserving wording is no accident, or product of jargon-addicted diplomats or international lawyers. It resulted from the U.S. Congress’ insistence that the American government and the people to which it owes its first loyalties to retain the legally recognized right to decide when to go to war. And keep in mind: Congress was determined to reserve the right to stay out of a conflict in Europe as the Cold War was reaching its height.

Just as important: The European allies recognized this right – and its implications – as well, especially after the Soviet Union’s development of major nuclear forces greatly increased the risk to the American homeland of nuclear attack if it plunged into war on the allies’ behalf. We know this for sure because the continuing ambiguity ultimately persuaded both the British and French to create their own nuclear forces. As former French President Charles de Gaulle warned, the United States could not reasonably be expected to endanger the existence of New York or Detroit to save Hamburg or Lyons.

Tragically, American leaders were so strongly opposed to its allies taking back control over their own fates that they strove almost fanatically to convince the Europeans that the United States could indeed be trusted. And Washington put its money where its mouth was, stationing hundreds of thousands of American soldiers, sailors, and air force personnel and their families on or around the European continent. The idea was to create a “trip wire” aimed at denying any U.S. President a real choice of rushing to Europe’s defense with whatever threats or means were necessary. For standing by in the face of aggression would mean a slaughter or American troops and possibly innocents by vastly superior Soviet military forces.

Even during this era of high East-West tensions, however, American leaders never completely lost sight of the desirability of shifting as much of the burden of nuclear risk as possible onto the Europeans – while maintaining as much control as possible over nuclear weapons use. The transatlantic feud over intermediate-range nuclear forces – which threatened to confine the nuclear damage of any East-West war to Europe, leaving the American and Soviet homelands unscathed – was only one prominent example. And even this U.S. aim was fatally muddied, or at best thoroughly confused, by the continuing enormous military presence in Germany, directly in the likeliest path of the Soviet conventional juggernaut.

After the Cold War ended, the tripwire was steadily dismantled, but American presidents continued to treat Article Five as an ironclad promise to defend NATO members militarily – as demonstrated by the 2013 Obama statement in the Atlantic article linked above. Moreover, once Russian military and paramilitary activity began to increase in Moscow’s “near abroad,” Washington began, hesitatingly, to be sure, to respond to the demands of the newest NATO members in Russia’s sights for U.S. tripwire forces of their own.

Hence the charges that President Trump’s latest statement could dangerously destabilize NATO’s eastern flank. But there’s far more to the situation. In the first place, there’s much evidence linking Russia’s new revanchism to NATO’s expansion eastward right up to Russia’s borders. Second, if Article Five were rigidly applied to new NATO members such as the Baltic states or former Soviet bloc countries like Poland, the United States would be running the risk of nuclear attack on behalf of countries that (a) are completely un-defendable with conventional military forces alone, because they’re right next door to Russia; and (b) consequently, have never been considered vital or even significant interests of the United States.

Troublingly, however, despite the latest Trump statement (or lack thereof), which arguably could inject the Eastern European countries with a needed dose of realism concerning their real options in dealing with Moscow, the president has so far continued the policy of incrementally responding to these countries’ requests for tripwires.

In other words, his big mistake isn’t casting doubt on America’s commitment to these and other European countries. For if the United States might have balked risking New York or Detroit for Hamburg or Lyons, it’s certainly not going to jeopardize an American city or two to save Warsaw or Vilnius. Instead, Mr. Trump apparently is trying to fence-straddle here, which could well create the worst of both worlds on both sides of the Atlantic.

Our So-Called Foreign Policy: An Asia Grand Strategy that Still Looks Like America Last


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

It looks like the Trump administration is going All Neocon on its Asia grand strategy. Or is it All Obama? Interestingly, both approaches have shared the same main features, and depressingly, both are dangerously incoherent and disturbingly resemble the course that Mr. Trump apparently has chosen to follow. .

The essence of neoconservative strategy in Asia consists of bloviating about the risks to America’s national security from China in particular, pushing for a stronger American military response, and with equal vigor backing economic policies that inevitably boost China’s military strength. And the quintessential example is Republican Senator John McCain of Arizona.

McCain has voted for his entire career in favor of the U.S. trade policy decisions that have enabled China to amass literally trillions of dollars worth of trade surpluses with the United States, and therefore finance an enormous military buildup that he himself has warned directly threatens American interests in Asia. He’s periodically voiced concerns about the lax U.S. export controls that have enabled China to secure some of America’s best defense-related technology. But he’s never sponsored any steps capable of solving this problem.

What McCain has focused on has been boosting military spending and stationing more of these forces, in large part to counter burgeoning Chinese ambitions. And recent Trump administration moves make clear that the president and his top advisers have been listening. As The Wall Street Journal reported earlier this month:

The Pentagon has endorsed a plan to invest nearly $8 billion to bulk up the U.S. presence in the Asia-Pacific region over the next five years by upgrading military infrastructure, conducting additional exercises and deploying more forces and ships….The proposal, dubbed the Asia-Pacific Stability Initiative, was first floated by Sen. John McCain (R., Ariz.) and has been embraced by other lawmakers and, in principle, by Defense Secretary Jim Mattis and the head of U.S. Pacific Command, Adm. Harry Harris. Proponents haven’t developed details of the $7.5 billion plan.”

The Journal account goes on to remind readers that the Obama administration had pursued its own military “pivot” to Asia, but that it was “disparaged by critics as thin on resources and military muscle.” And of course, the former president refused to respond effectively to China’s predatory trade practices, and only very late in his second term began rethinking flood of advanced defense-related knowhow to the PRC.

President Trump has of course spoken repeatedly of acting forcefully to overhaul America’s China trade policies. But his administration’s actions so far have fallen far short of this mark.

The mind-blowing upshot: In a military conflict with China, the United States forces could find themselves fighting against, and taking casualties from, Chinese units and weapons that have been paid for and researched by their enemy. Is that the kind of first so many Americans voted for?

Im-Politic: Manchester and the Wages of Multiculturalism


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

The aftermath of the horrific Manchester bombing is seeing the reappearance of a familiar pattern that keeps dangerously muddling major issues. I’m talking about the tendency to emphasize that the suspect was a “homegrown” terrorist, not an immigrant or a refugee from a majority Muslim country. Therefore, this reasoning goes, responses that emphasize restricting immigration from such countries are at best misguided and at worst bigoted. The latter charge has even become a mainstay of the U.S. judicial system.

The dangers and fallacies of this analysis become clear upon reviewing the emergence of the United Kingdom as a major target of terrorist attacks from Muslim extremists and a major source of foreign fighters and other operatives in the Middle East and worldwide for Al Qaeda and ISIS. If these terrorists aren’t newcomers to the UK, you can be sure they were overwhelmingly homegrown in the country’s Muslim immigrant communities. And their numbers and destructiveness point to shocking British failures both to control the country’s borders adequately and to assimilate Muslims safely. More specifically, they reveal the perils of the British government’s determination starting in the 1980s, and especially in the 1990s, to make the establishment of an identity politics focused on Muslims a top national priority.

Spearheaded by former Prime Minister Tony Blair and his New Labour party, London dealt with the country’s Muslims as a group with official standing, represented in government councils by a national organization created to “represent mainstream Muslim opinion.” It provided safe haven for prominent jihadists wanted for terrorism by countries like Jordan and France. It permitted a network of Islamic religious law (sharia) courts to spread across the country and formally recognized some rulings involving divorce and other domestic issues. Perhaps most damaging in the long term, it offered “state funding for Muslim schools on the same basis as Christian and Jewish schools” and paid no attention to their curricula – many of which were developed by arch-fundamentalists from Saudi Arabia.

Among the results? As the British government reported after 2001 riots involving white and South Asian gangs in several northern industrial towns, these localities contained

“‘separate educational arrangements, community and voluntary bodies, employment, places of worship, language, social and cultural networks,’ producing living arrangements that ‘do not seem to touch at any point.’ As one Pakistani Briton told the report’s authors, ‘When I leave this meeting with you, I will go home and not see another white face until I come back here next week.’ Last year, Trevor Phillips, chairman of the Commission for Racial Equality, warned that much of Britain was ‘sleepwalking its way toward segregation.’ And this segregation is especially entrenched among Muslims.”

In addition, “A non-Muslim child who lives in a Muslim-majority area may now find herself attending a school that requires headscarves. The idea of separate schools for separate faiths—the idea that worked so beautifully in Northern Ireland—has meant that children are encouraged to think of themselves as belonging to a distinct religious ‘community’ rather than a nation.”

In fact, by July, 2005 – in the wake of an Islamist bombing of London’s Tube that claimed 52 innocent lives – even Blair had had enough. In major speech, he warned that anyone who did not “share and support the values that sustain the British way of life,” or who incite hatred against Britain and its people, “have no place here.” But the Manchester attack, and numerous smaller predecessors over the previous twelve years, indicate that his turnabout – which by all accounts had been ambivalently implemented – came too late to slow the destructive dynamics he set in motion.

Skeptics will rightly note that the British experience is a far cry from America’s, with the U.S. Muslim community – whether immigrant or homegrown – showing many fewer signs of dangerous radicalization. At the same time, identity politics has now become such a hallmark of one of the country’s two major political parties that even many of its leaders are warning about the consequences (though mainly at the ballot box). And the late British writer Christopher Hitchens wrote of what had by that time come ruefully to be called “Londonistan” by the time of the 2005 bombing, “It‘s impossible to exaggerate how far and how fast this situation has deteriorated.”

(What’s Left of) Our Economy: The Alternative Facts Behind America’s China Trade Policy


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

After reading her interview with The Wall Street Journal, it’s hard to tell whether Clinton-era chief U.S. negotiator Charlene Barshefsky is mainly clueless or mainly arrogant. In other words, is Barshefsky oblivious to how badly she (and colleagues) botched the challenge of admitting China into the World Trade Organization (WTO)? Or is she confident that the bipartisan American economic policy establishment remains so strongly wed to this epic failure that her reputation and current cushy job as a leading trade lawyer won’t suffer in the slightest even when it’s scope is made unmistakable?

Most disturbing, nothing could be clearer from the interview – in which she was joined by one of her former top Chinese counterparts – that her views on the WTO deal and those of Beijing are as close, as the Chinese like to say, “as lips and teeth.” The only significant difference: then Chinese vice commerce minister Long Yongtu denies that his country’s economic reform efforts have gone off the rails in recent years. Barshefsky insists that China “has stopped the process of economic reform and opening and that, instead, has put in place a spate of measures that are zero sum. They’re highly mercantilist and discriminate against U.S. and foreign companies.”

That’s nice to hear. But this claim also underscores how completely blindsided Barshefsky, the rest of the Clinton administration, and the rest of the powers-that-be in American government, business, and academe were by an about-face in a country with a recent history of political instability and course changes, and no record of viewing trade as a positive-sum game or economic openness as a crucial objective in and of itself.

Barshefsky also demonstrates her belief that the phony promises that fueled the Clinton administration’s successful drive to secure China’s WTO entry still hold water – at least with the high and mighty. For example, according to Barshefksy, “The U.S. didn’t alter its trade regime, nor did any other country alter its trade regime. As in any WTO negotiation, it is the acceding country that needs to reform its economy.” But as she surely knows, WTO membership won for China substantial immunity from the national trade law system the United States historically had used to safeguard its legitimate trade interests unilaterally. Once China entered the WTO, Washington’s internationally recognized responses to China’s predatory trade practices largely depended on the assent of the WTO membership – which has been numerically dominated by economies that were major users of Chinese style protectionism.

Barshefsky continues to claim that the safeguards she negotiated with China were adequate to protect domestic industries – at least temporarily – from surges of Chinese imports. The only problem, she contends, is that these mechanisms were “”almost never used.” What Barshefksy omitted, however, was that the big U.S.-based multinational manufacturers that lobbied so lavishly and successfully on behalf of China’s entry were also offshoring production and jobs like crazy to China largely to supply the America market much more cheaply. Limiting America’s imports from China, especially from factories with which they were linked, was the last thing they wanted.

According to Barshefsky, the post-WTO ballooning of the U.S. goods trade deficit with China can be brushed aside because “we have a substantial services surplus with China.” It’s too bad she didn’t provide any numbers, but not at all surprising – since that surplus last year was only about a tenth as big ($37.4 billion) as the merchandise shortfall ($347 billion). Moreover, the manufacturing-heavy nature of this merchandise deficit – which is increasingly comprised of advanced manufactures – should concern all Americans.

And finally, Barshefsky repeated the widely expressed canard that “the trade deficit is a function of macroeconomic factors. Principally, the difference between what Americans save, which is nada, and investment, which is plentiful.” But the relationship between national trade balances and savings rates is simply a mathematical identity – which by definition says “nada” about causation. Indeed, there are plenty of reasons to suppose that, the more the trade deficit grows, the lower the savings rate is bound to become.

Yet interviewing Barshefsky has at least performed one public service. It reminds Americans that alternative facts began shaping the nation’s politics and policy long before the last presidential election.

Im-Politic: A Moral Quandary Surrounding American Morals?


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

This’ll be one of those posts where I confess I just don’t know what the heck is going on. But the info seems so compelling – and possibly contradictory – that it can’t be ignored.

The first half of the puzzle comes from Gallup’s new finding that a large (81 percent) of Americans judge the country’s moral values to be “only fair” or “poor,” and that 77 percent believe that this problem is getting worse. Although I know there will be many who are tempted to respond with something to the effect of “Ah, Trump,” keep in mind that these numbers haven’t changed dramatically since the company began asking such questions in 2002. (Somewhat greater shifts – for the worse – are evident since the early 1990s, when Gallup’s questions were somewhat differently worded.)

Another intriguing result: More than a third of respondents rated the state of U.S. morality as “fair” – which isn’t necessarily negative. In fact, combining the 36 percent of Americans taking this view with the (dwindling) share who view it as “excellent/good” (17 percent) sums to a majority that’s arguably pleased with the nation’s ethics. And these sub-categories (called “internals” by polling insiders) have remained broadly stable over the last decade and a half as well.

Less intriguing: Over the last year, self-identified social liberals have become much more concerned about America’s morals, with the share perceiving a worsening spurting from 58 percent to 71 percent. Social moderates became markedly more pessimistic, too, and that definitely looks like a Trump effect. So does the less dramatic drop in the share of those considering themselves as social conservatives telling Gallup that moral decay intensified during that time.

But here’s where the real mystery comes in. Another Gallup survey, taken just a few weeks ago, reported “Americans Hold Record Liberal Views on Most Moral Issues”. Give the company credit: It’s recognized the apparent paradox: “Even liberals, who seemingly should be pleased with the growing number of Americans who agree with their point of view on the morality of prominent social issues, are more likely to say things are getting worse than getting better.”

Gallup offers two possible explanations, but I don’t find them especially convincing. The first, after all, assumes (at least logically) that social liberals believe that many Americans who have swung their way on gay marriage, marijuana legalization, abortion, and the like are still insensitive (at best) toward racism and poverty. Or even have become more so. The second assumes that liberals believe that these same, increasingly tolerant Americans keep displaying “lack of respect or tolerance for others,” or are getting even coarser.

Nor am I persuaded by another possible explanation that could well be proposed by social conservatives: that although they increasingly support more liberal moral positions and views, deep down inside, liberals and moderates recognize them as dangerous and therefore perceive American morals to be declining.

So I’m left in the dark, but certain something important is taking place within the national psyche. What do all of you think?

Im-Politic: Fakeonomics on Illegal Immigration From CNN


, , , , , , , , ,

When I was learning the journalistic ropes, one of the first lessons taught was never to present a piece of information totally devoid of context. So, for example, if you were writing about how much a national economy grew during a given time period, you’d also include something about how that growth compared with that country’s past performance, or with the performance of other countries. How else could the reader take anything useful away from such a report?

Apparently, however, CNN doesn’t always follow this practice. Or maybe more accurately, it doesn’t follow this practice when it covers immigration issues, and especially when even minimal context would cast doubt on widespread claims that America’s illegal immigrants are so valuable that Trump-like restrictionist policies are tantamount to economic suicide. How else could one interpret the May 18 post by Octavio Blanco on new legislation aimed at establishing California as a sanctuary state?

Blanco, for example, properly reported the claim of the bill’s sponsor that the illegal workforce “contributes some $180 billion to the state’s GDP.” I’d have liked some verification of this figure, or even a source, but at least Blanco associated the contention with a figure who’s clearly taken one side of the issue.

Other omissions are less justifiable. Is this a net figure? That is, does it include any costs resulting from the state’s illegal workforce, or families of these workers? The author doesn’t say. And what about some perspective about that $180 billion figure? Obviously the legislator who fed it to Blanco hoped to convey the impression that it’s a staggering sum. Yet it begs the question of how big that state GDP actually is. According to the U.S. Commerce Department, last year, it was a little over $2.6 trillion (unadjusted for inflation – and that took me four seconds to look up.) So if the $180 billion is unadjusted for inflation as well (something else the author doesn’t tell us), the illegal immigrant share is about 8.2 percent.

That still sounds like a lot. Except as the author also notes, another source pegs illegals as nearly 10 percent of the California workforce. So even if the $180 billion figure is accurate, that would mean that the state’s illegal workers are punching below their weight in terms of productivity.

That, however, wouldn’t be the last word, either. The $180 billion figure would be more impressive if it was a growing share of state output, and less impressive if it was shrinking or stagnant. But Blanco’s article gives readers no way to know.

Another statistic cited by Blanco sheds a little light on these questions, but not nearly enough, because it suffers the same shortcomings. The author reports that a “Washington, D.C.-based research group,” the Institute on Taxation and Economic Policy (ITEP), has determined that “In 2014, almost $3.2 billion of California’s state and local taxes came from undocumented immigrants….”

Again, that “billion” word sounds like a major sum – but sharp-eyed readers might notice something that’s apparently eluded Blanco. If both ITEP and the lawmaker who introduced the Sanctuary State bill are right, then the tax revenue generated by California’s illegal workers amounts to about 1.78 percent of their contribution to the state economy. That looks distinctly unimpressive.

Just as unimpressive: the share of the state’s total annual tax haul represented by illegal immigrants, if ITEP is right. For according to the state government, the $3.2 billion claimed by ITEP for 2014 would come to 4.83 percent of personal income tax revenue. Remember – this is from nearly 10 percent of the state’s workforce, so that’s disproportionately low.

A least as important, when talking about illegal immigrants – the $3.2 billion figure is clearly not a net figure, in terms of the impact of this population on the state’s resources. Specifically, it omits illegal the use of state services by illegal immigrants and any family members who are legal (e.g., anchor children). This issue will keep looming larger and larger as the state pushes to extend eligibility for welfare and other state resources to illegalswhich has already happened with in-state tuition to and financial aid for California public universities.

It’s true that income tax revenue isn’t the sum total of state tax revenue. The state government says the share was 65 percent in 2014. The remainder comes from corporate income taxes, sales taxes, and an “other” category. Illegal workers (and their families) are probably paying some of those types of taxes, too, but the article doesn’t provide any information on that score, either.

Give Blanco some credit: He reports that “not everyone agrees on the sanctuary state bill.” If only his article focusing on the legislation’s economic impact gave readers any sense that not every fact portrays it as an economic winner, either.

Im-Politic: Trump’s Accusers on Mishandling Intelligence Have Lots to Explain Themselves


, , , , , , , , ,

There was a funny article in today’s Washington Post Outlook section – not “ha ha” funny but funny in the sense that life serves up some coincidences that the adjective “embarrassing” doesn’t come close to covering.

The piece in question came from Stephen A. Hall, described as a 30-year veteran of the CIA’s Russia (and presumably Soviet) operations, and it went after President Trump for sharing intelligence information irresponsibly with Russia and thereby going far toward convincing valuable U.S. allies that his administration can’t be trusted with crucial strategic secrets.

Let’s leave aside the indisputable reality that the Soviet operations “run and managed” by Mr. Hall were completely blindsided by the fall of the Soviet Union – arguably the most important geopolitical development of the final half of the twentieth century. Let’s also leave aside that its Soviet operations were the scene of some of America’s most damaging intelligence failures when Hall was around. (Although I’m sure he wasn’t solely or even largely to blame.)

Let’s focus instead on an article that ran the very same day in The New York Times. It reported that “The Chinese government systematically dismantled C.I.A.spying operations in the country starting in 2010, killing or imprisoning more than a dozen sources over two years and crippling intelligence gathering there for years afterward.”

The reason? An “intelligence breach” that according to The Times was “one of the worst in decades.” Indeed, the article continues, “The number of American assets lost in China, officials said, rivaled those lost in the Soviet Union and Russia during the betrayals of both Aldrich Ames and Robert Hanssen, formerly of the C.I.A. and the F.B.I., who divulged intelligence operations to Moscow for years.”

And when did Beijing manage in effect to destroy the American spy network in China? Reported The Times, “From the final weeks of 2010 through the end of 2012, according to former American officials….” Further, the article adds, this “previously unreported episode shows how successful the Chinese were in disrupting American spying efforts and stealing secrets years before a well-publicized breach in 2015 gave Beijing access to thousands of government personnel records, including intelligence contractors.”

Anyone remember who was in charge of the U.S. government and its intelligence community during those years? Aside from Barack Obama, there was also one James R. Clapper, Jr., who was named Director of National Intelligence in August, 2010, and who of course has emerged as one of President Trump’s chief critics. For good measure, Clapper was promoted to that position from the top intelligence job in the Pentagon.

More important: During his tenure as head of the nation’s espionage establishment – and during Mr. Obama’s in the Oval Office – evidently zero progress was made in identifying the moles and plugging the breach. To add possible insult to injury, Clapper also could well be one of the apparent scores of former intelligence officials who have been leaking oceans of highly classified information intended to damage the Trump administration.

Like most reporting about intelligence matters, The Times account of the CIA’s China disaster may be completely or largely or partly wrong. As a result, it will be interesting to see if there’s any pushback over the next few days. But if and until there is, Americans will be entitled to ask whether anything that the president has shared with the Russians has or is likely to damage the nation’s security or its relations with other intelligence services as the disasters associated with many of his leading attackers.

Im-Politic: When Media Bias Turns Downright Incompetent


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

It’s only the middle of a Saturday afternoon and I’ve already changed my mind twice about what to write about. So it goes in the blog business. I confess it’s not the most important subject on the merits that I’ve read about in the last 24 hours. But it is arguably one of the most emblematic of the era of instinctively anti-Trump media coverage (I refuse to dignify it with the word “journalism”) in which we’re living.

As I’m sure you know by now, President Trump left Washington, D.C. yesterday for his first foreign trip, and the first stop has been Saudi Arabia. And almost on cue, the new-ish media site Axios.com posted an article with the sensational headline “Conservatives ignore Trump’s bow to Saudi leader.” And if you know anything about recent U.S.-Saudi diplomacy and protocol, this does indeed seem like an inexcusable example of American right-wing hypocrisy.

After all, conservatives did blast former President Obama in 2009 for bowing to the Saudi king at a meeting in London. And in my view, they were right to do so. Monarchs insist on such gestures as acknowledgments of their supremacy over all supposedly lesser mortals. Why on earth should any U.S. leader – or any American – feed this deeply un-democratic and profoundly un-American conceit? And by the way, I’d apply the same standard to the Queen of England – who, unlike any kings of Saudi Arabia (in all likelihood a major funder of Al-Qaeda and other Islamic terrorist groups), seems like a perfectly nice and in many respects admirable individual.

So indeed – what the heck was Mr. Trump doing emulating his predecessor? And why aren’t conservatives up in arms? Here’s why. As is clear from the two photos in question, Mr. Trump was just bowing slightly to enable King Salman – who is shorter – to give him a medal. Then King Abdullah was also shorter than Mr. Obama. But no act like a medal award was involved that required a lowering of the Obama noggin or a bend at the waist.

Moreover, Axios reporter Alexi McCammond overlooked a genuine opportunity to point out a Trumpian hypocrisy on this score. The president’s wife and daughter, who accompanied him on the trip, and wore no headscarves – something that’s ordinarily a major no-no in Saudi Arabia’s arch-conservative Islamic theocracy. Lately, the Saudis have been making exceptions for visiting foreign dignitaries – hence the bareheaded Trump women. But private citizen Trump didn’t seem to know this in 2015, when he slammed then First Lady Michelle Obama for going headscarf-less on a visit to the Kingdom.

So not only are we living through an era of almost pervasively biased and double standard-ridden “journalism” and social media commentary (coming from all sides, as shown by the Trump comment above). Even by their own debased norms, we’re living through an era of thoroughly incompetent “journalism”:and social media commentary.

Im-Politic: More Evidence that Trump-ers Were Mainly Voting Their Pocketbooks


, , , , , , , ,

One of my favorite statistical reports just came out a week ago – the Commerce Department’s survey of economic growth last year in each of the 50 states plus the District of Columbia. I like the report so much mainly because it’s accompanied by the release of figures that show how much manufacturing production changed in real terms on an annual basis – and therefore gives us another indication as to whether or not the sector really has recovered from the Great Recession completely. (Spoiler alert: It hasn’t. But more on that later.)

This year, the new state numbers provide some new insights into why last year’s presidential election turned out as it did. Specifically, it shows a strong relationship between a state’s economic performance and its award of electoral votes to President Trump or his Democratic rival, former Secretary of State Hillary Clinton.

To begin, here’s a list of the “Top Ten” states that enjoyed the fastest inflation-adjusted growth between 2015 and 2016. (Because of ties, there are actually 21 of them). Their real percentage growth in 2016 is next to their names, then comes their rank (in parentheses) and then their presidential choice:

Washington 3.7 (1) Clinton

Oregon 3.3 (2) Clinton

Utah 3.0 (3) Trump

NH 3.0 (3) Clinton

Fla. 3.0 (3) Trump

Georgia 3.0 (3) Trump

Utah 3.0 (3) Trump

Calif. 2.9 (4) Clinton

Nevada 2.4 (5) Clinton

DC 2.4 (5) Clinton

Arizona 2.1 (6) Trump

So. Carolina 2.1 (6) Trump

Hawaii 2.1 (6) Clinton

Tenn. 2.0 (7) Trump

Colorado 2.0 (7) Clinton

Mass. 2.0 (7) Clinton

Idaho 1.8 (8) Trump

Michigan 1.8 (8) Trump

Ohio 1.7 (9) Trump

So. Dakota 1.7 (9) Trump

No. Carolina 1.6 (10) Trump

At first glance, the election seems like a toss-up in terms of the economic winner states, with Mr. Trump winning twelve and Clinton nine. But in terms of one of the main questions posed about the president’s supporters – whether they were motivated mainly by economic concerns or by other hopes or fears (ranging from racism and xenophobia to mistrust of Clinton) – this list looks like it points to the latter.

But here’s where some context needs to be considered. After all, the president won 32 (or 62.75 percent) of the states (including D.C.) up for grabs. Clinton won only 19. But the Trump share of the economic winners was somewhat lower – 12 of 21, or 57.4 percent. So maybe economic issues were fairly prominent among the Trump-ers.

More convincing evidence comes from the list of the worst performing states in 2016. Here they are in the same format used for the first list. (These states total eleven due to a tie):

No. Dakota -6.5 (1) Trump

Alaska -5.0 (2) Trump

Wyoming -3.6 (3) Trump

Oklahoma -2.3 (4) Trump

West Va. -0.9 (5) Trump

Louisiana -0.6 (6) Trump

New Mex. -0.5 (7) Clinton

Kansas 0.2 (8) Trump

Montana 0.2 (8) Trump

Texas 0.4 (9) Trump

Delaware 0.3 (10) Clinton

In fact, this evidence couldn’t be clearer. President Trump won nine of these eleven slowest-growing states.

These results don’t finally resolve the debate over Trump voters by a long shot – if only because the nation’s population is so unevenly distributed among states, and because of the winner-take-all nature of the Electoral College (except in Maine and Nebraska). Moreover, there’s not always such a bright line between economic and non-economic concerns, and many voters base their choices on several considerations.

Finally, it would be important to examine the economic growth trends over a longer period of time. That way, we could see whether various states’ expansion or contraction last year was consistent with longer-term trends or whether they were outliers. (Those distinctions presumably would have some influence over voters’ views of their own fortunes and the appeal of incumbents – or representatives of incumbent administrations – and challengers.)

But the news that nine of the 19 states won by Clinton were among the nation’s fastest growers, and only two were among the slowest, lends more support to the view that pocketbook issues created a big divide in the electorate last year.

And about that manufacturing news: The industry data released along with the new states growth shows that American domestic manufacturing’s output fell by 0.15 percent in constant dollar terms. That’s not much, but recall that it’s only a tenth as fast as even the negligible growth registered by the economy as a whole after inflation – 1.54 percent.

And thanks largely to this down year, from the last quarter of 2007 (when the Great Recession began) until the last quarter of last year (the latest quarterly data available), real manufacturing production shrank by 2.37 percent. As RealityChek readers know, there are several measures of manufacturing output used by the government – but they also know that most, like these latest data, show that the claim that America’s manufacturers have never turned out more product in this country than ever in the nation’s history are just peddling fakeonomics.