Im-Politic: Why You Should be Really Skeptical About the Green New Deal

Tags

Alexandria Ocasio-Cortez, climate change, Congress, Green New Deal, Im-Politic

Since I have no special expertise on climate change, I can’t comment usefully on the scientific aspects of the Green New Deal (GND) resolution introduced recently in the House of Representatives. As a result, I don’t even believe that I can comment usefully on how the U.S. economy may be affected by a major green refit and the tradeoffs it will inevitably entail even if I had a clear idea of what such a blueprint would entail.

What I do claim some expertise on is political posturing and elementary logic. And on those bases alone, it’s glaringly obvious that the resolution’s Congressional and other supporters aren’t the slightest bit serious about preventing catastrophic global warming.

Here’s the dead giveaway: Nothing in the plan, or about it, is remotely capable of addressing the threat as it’s described by GND-ers.

Let’s assume for argument’s sake that most, or perhaps not even many, of the resolution’s backers don’t literally agree with their leading spokesperson, freshman Democratic Representative Alexandria Ocasio-Cortez of New York, that “The world is going to end in 12 years if we don’t address climate change….” (And even this phrasing is pretty fishy. What’s with using fudgy language like “address” in such a cassandra-like clarion call? Did President Franklin D. Roosevelt warn Americans that the country could be endangered if it didn’t “address” the Nazis and the Japanese militarists? Moreover, how many years of planetary survival will be gained by “addressing” the threat? How long does the Earth have until climate change is ended or whatever ultimate goal the GND-ers have in mind?)

Even GND-ers believing the planet has more than twelve years surely view the situation as desperate. But if so, what’s the point of spending precious time working up a document that’s non-binding, and that even many backers view as “aspirational”? (See, e.g., here and here.) What possible excuse could there be for not focusing on whatever it takes to passing a mandatory climate change plan ASAP – and with veto-proof majorities?

In addition, why, given the immediacy of the threat and the literal life and death stakes for humanity as a whole do the GND-ers clutter up their manifesto with objectives and standards such as “ensuring that the Green New Deal mobilization creates high-quality union jobs that pay prevailing wages, hires local workers, offers training and advancement opportunities, and guarantees wage and benefit parity for workers affected by the transition….”? Or “guaranteeing a job with a family-sus4 taining wage, adequate family and medical leave, paid vacations, and retirement security to all people of the United States….”?

In other words, no planet-saving campaign can be approved unless it benefits organized labor? And how long do those paid vacations need to be?

Similarly, why, given the ostensible urgency, does the resolution insist that the program “be developed through transparent and inclusive consultation, collaboration, and partnership with frontline and vulnerable communities, labor unions, worker cooperatives, civil society groups, academia, and businesses….”? What a time sink that’s going to be!

And that leads to the most suspicious substantive feature of the GND movement so far. Even though climate change warnings have been sounded literally for decades, and even though they’ve been issued with increasing frequency by more and more individuals, organizations, national governments, and international organizations, the above phrasing is an explicit admission that there’s no commonly agreed upon plan that would even cover the United States alone.

Principally, on the one hand, the resolution states that its goals (including “meeting 100 percent of the power demand in the United States through clean, renewable, and zero-emission energy sources….”) “should be accomplished through a 10-year national mobilization.” On the other, it proposes achieving these goals through “making public investments in the research and development of new clean and renewable energy technologies and industries….” In other words, after all this time, the GND-ers don’t yet know what these technologies could be, let alone how long it will take to turn whatever laboratory breakthroughs they envision into knowhow usable in the real world.

One of my favorite adages is that necessity is the mother of invention, mainly because its opposite is usually true as well: If there’s no real invention, you can be there’s no necessity. As demonstrated by the form and substance of the resolution, that’s a legitimate conclusion to be drawn about the Green New Deal.

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(What’s Left of) Our Economy: A Valentine’s Day Bust for Tariff Alarmists

Tags

aluminum, inflation, Labor Department, manufacturing, metals, metals-using industries, PPI, Producer Price Index, producer prices, steel, tariffs, Trade, wholesale prices, {What's Left of) Our Economy

If trade alarmists and tariff fear-mongers were hoping for a Valentine’s Day gift from Thursday’s producer price inflation report, they’re now nursing broken hearts. For the new numbers from the Labor Department continue the string of official data releases showing that President Trump’s trade curbs on imports of metals and various goods from China have generated no significant inflationary pressure in the economy overall. Indeed, there’s only the scantest evidence that they’ve created upward price pressure even in the products most directly affected.

As has been the case for months for this Producer Price Index (PPI) data – along with the statistics on consumer prices – the most reliable figures are the Trump tariffs on steel and aluminum imports, because they’ve been in place since March. But when it comes to the producer price results – which look at the economy from the wholesale sector’s standpoint – it’s worth examining the China-related data as well, since the first tariffs on producer goods from China were imposed in July. (P.S.: Keep in mind that the new statistics, which bring the story up to January, incorporate an annual set of revisions that in this case impact the seasonally adjusted numbers going back to 2014).

Prices for steel remain elevated through, January, but increases have lost noteworthy momentum. True, they rose sequentially in January by 0.50 percent and their initially reported monthly decline of 0.63 percent in December was revised to a 0.18 percent dip. Moreover, steel prices have risen by 11.02 percent since April – the first full month they were in effect. By contrast, the super-category in the PPI report in which they’re placed – processed goods minus foods and feeds – saw its prices decline by 0.55 percent during that period.

But most of the steel price increases took place over the summer. Since September, they’re down 1.20 percent. That’s not nearly as big a fall-off as for their super-category overall (where prices were off by 3.83 percent during this period). But it’s a decrease nonetheless.

Upon moving to aluminum prices, however, the notion that tariffs have been mainly behind these high and still rising prices breaks down completely – because aluminum pricing trends have been so completely different.

Whereas wholesale steel prices increased on-month in December, wholesale aluminum prices fell – by an unrevised 0.40 percent. Both metals registered a 0.50 percent sequential price rise in January.

But aluminum’s period of strong pricing power was considerably shorter than steel’s, and ended in June. And since that month, they’re down by 6.40 percent. That’s almost double the price slump experienced by its core processed goods super-category (the same as steel’s) – 3.37 percent. So something other than tariffs clearly has been driving the price movements of these metals on the wholesale level.

Important divergences also appear in the data for metals-using industries. Last month, for example, we found that prices for sectors like pumps, compressors, and related equipment; mining machinery and equipment; construction machinery and equipment; and metal-forming machine tools, rose faster on month than prices in their super-category – final demand goods minus food and energy.

In January, these trends continued for construction machinery and that machine tools sector. But the new monthly increases for other metals-using sectors, like agricultural machinery and equipment (0.21 percent), metal-cutting machine tools 0.30 percent), industrial materials handling equipment (0.17 percent), and machine tool parts and mold-making equipment (flat), were considerably weaker, and completely in line or softer than the latest monthly price increase for the core final demand goods category (0.26 percent). That’s significant given recent solid output growth for the entire manufacturing sector, and especially the durable goods industries that rely heavily on metals as inputs.

Nonetheless, increases pushed through earlier in the year helped most metals-using sectors produce price hikes on a January-to-January basis considerably stronger than that for the core final demand goods super-category (2.40 percent).

Switch over to “intermediate demand” goods and you find mixed results, too. Big annual price hikes have been seen in sectors like metal containers, fabricated wire products, and certain kinds of valves (for January, 5.58 percent, 15.56 percent, and 5.77 percent, respectively). These increases all exceeded that for their core intermediate demand super-category (0.97 percent). Yet they were all lower than the December figures (6.46 percent, 16.42 percent, and 6.03 percent). (The intermediates super-category figure was 3.29 percent for that month.) So some inflation momentum has been lost.

Since the metals tariffs were imposed, prices of metal containers have risen 2.01 percent, prices of fabricated wire products have risen 10.16 percent, and prices of those valves are 2.82 percent higher. All these inflation rates are much faster than that of the intermediate demand super-category (where prices overall fell 0.55 percent during that period). But as with the annual figures, they vary considerably, with the wire products sticking out like an especially sore thumb.

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

The evidence for tariffs-led producer price inflation is much weaker for goods imported from China – perhaps because the levies haven’t been in place for nearly as long as the metals tariffs. The table below shows the PPI changes for some of the leading products found on the Trump administration’s initial China tariff list. They were imposed on July 6, so the numbers show the cumulative price changes since August. (Note: Because the administration’s Trump announcement used a different classification system than that used in the PPI reports, the below data don’t match up exactly with that tariff list. But the following goods are all at the least main parts of the items on the Trump list, or vice versa. The same holds for the super-category figures used, as with metals tariff-related products, for comparison’s sake.)

                                                                                  Aug.-Dec.            Aug.-Jan.

core processed goods for intermediate demand:   -0.88 percent       -2.50 percent

aircraft engines and engine parts:                         +0.04 percent      +0.44 percent

ball bearings:                                                         +1.01 percent     +1.24 percent

electric generators:                                                +1.61 percent     +1.66 percent

medical, surgical & personal aid devices:            +0.34 percent      +0.93 percent

core commodity final demand                              +0.64 percent      +1.13 percent

industrial heating equipment:                               +1.79 percent      +2.41 percent

oil and gas drilling platform parts:                              0 percent              0 percent

farm machinery and equipment:                           +2.26 percent      +2.55 percent

paper-making machinery:                                     +0.31 percent      +0.52 percent

electricity transformers:                                        +0.12 percent      +0.68 percent

medical, surgical, and personal aid devices:         +0.33 percent      +0.93 percent

X-ray and electro-medical equipment:                  +0.12 percent     +0.37 percent

In a phrase, these results are all over the place – strongly indicating that the tariffs have not been the leading cause of their price changes. The only consistent pattern suggesting a notable tariff effect emerges after comparing the August-December and August-January results. In the core intermediate demand grouping, prices dropped at a faster pace between the two periods. But for the China-related goods, they rose, albeit at different rates.

In the core final demand grouping, prices rose at a faster pace for the super-category, and for all the specific goods within it except for oil and gas drilling platform parts. Interestingly, though, the acceleration for two other sectors – farm machinery and equipment and paper-making machinery – was slower than for the super-category as a whole. In addition, during the latest, August-to-January, period, prices for no less than five of the seven sectors rose more slowly than for the super-category for a whole – again signaling the strong influence of non-tariff factors.

America’s globalist elites haven’t lost credibility solely or even mainly because of trade policy. But that’s surely been part of the mix. And if they want to start regaining some, they might think about admitting that facts really do matter, and that scarcely any of them support their tariff fear-mongering.

(What’s Left of) Our Economy: The New Manufacturing Output Data Belie Tariff Fear-Mongering Yet Again

Tags

aluminum, China, Federal Reserve, imports, industrial production, inflation-adjusted growth, manufacturing, metals, metals-using industries, tariffs, Trade, Trump, {What's Left of) Our Economy

Tariff fear-mongers must have felt a shiver of excitement when today’s new industrial production report came out from the Federal Reserve. For the results showed the inflation-adjusted manufacturing output shrank in January by 0.90 percent – the third sequential decline since the first Trump administration metals tariffs went into effect, and the second since the first round of its China tariffs went into effect. Surely these figures made clear that their claims of the levies hurting American manufacturing were finally coming true! Even better, from their standpoint, revisions were slightly negative.

What a shame to report then that an examination of those always crucial internals demonstrates beyond a reasonable doubt that the trade curbs have had nothing to do with any trouble industry may (or may not) be running into. The evidence? The continuing excellent results registered by metals-using industries, and mixed figures for the much smaller number of sectors where the impact of the first China tariffs (whose first full month was only last August) can reliably be measured.

Here are the changes in real production for the major metals-using industries starting with April – the first full month during which these sectors had to deal with the levies. The table shows the previously reported data for December, the new December data, and the January figures. (All these statistics, it should be noted, are still preliminary.) And they would challenge even the cleverest D.C.-based spin-meister to construct a narrative supporting the popular Twitter hashtag #TariffsHurt:

                                                         old thru Dec.      new thru Dec.       thru Jan.

overall manufacturing:                   +2.02 percent      +2.11 percent   +1.20 percent

durables manufacturing:                +3.31 percent      +3.45 percent   +1.65 percent

fabricated metals products:            +2.05 percent      +2.82 percent   +3.19 percent

machinery:                                     +4.93 percent      +4.38 percent   +3.87 percent

automotive:                                    +3.36 percent      +3.93 percent    -5.18 percent

major appliances:                           +0.08 percent      +3.13 percent    -2.87 percent

aircraft and parts:                           +6.80 percent      +6.14 percent   +6.35 percent

As has been the case almost consistently since the trade curbs on steel and aluminum went into effect, most of the industries relying especially heavily on these metals have actually out-performed the rest of manufacturing. And the struggles indicated here of sectors like automotive and major appliances sure spring from developments distinctive to those sectors – in automotive, major recent volatility (which has also led to major recent revisions) and in appliances, a separate set of levies on large household laundry machines that went into effect in February. The above figures, moreover, even point to volatility in appliance production.

It’s more difficult to gauge the impact of the China tariffs because the first (relatively minor) tranche has been in effect for a much shorter period, and because the levies were based on a system for classifying manufacturing that’s different from the system used in the Fed’s industrial production reports (as well as most major federal government data). So matching up industries is a daunting task, and the more I think about it, the more I’m convinced that even the short list of sectors I presented last month for the December industrial production report contained too many industries where the match-up simply wasn’t close enough to be useful.

Below, therefore, are the only the sectors for which I think it’s possible to draw any firm conclusions, along with the total manufacturing results as a control figure. This highly limited sample shows the latest after-inflation growth rates from August (again, the first full months the first China tariffs were in effect) through December, and through January. And the only consistent trend visible here is volatility.

                                                                       Aug.-Dec.                    Aug.-Jan.

overall manufacturing:                              +1.26 percent              +0.36 percent

ball bearings:                                             +0.02 percent               -0.09 percent

industrial heating equipment:                    +5.19 percent              -3.86 percent

farm machinery and equipment:                +2.50 percent              +9.12 percent

As the next few months pass, it will be possible to examine usefully the China tariffs’ impact on more and more manufacturing sectors. To date, however, the grade is “incomplete” (at best). As for the effects of the steel tariffs, though, isn’t it time to consider putting that #TariffsHurt hashtag way out to pasture?

(What’s Left of) Our Economy: Tariffs-Led Inflation, Where are You?

Tags

aluminum, China, consumer price index, CPI, inflation, Labor Department, metals, metals-using industries, producer prices, steel, tariffs, Trade, Trump, {What's Left of) Our Economy

If you’re a baby-boomer or a fan of old sitcoms, you know the show Car 54, Where Are You? It came to mind as I was examining the new consumer price inflation data that came out of the Labor Department this morning. Because these consumer price index (CPI) should make the country’s tariff-mageddon-mongers ask, in an equally plaintive tone, “Tariffs-led inflation where are you?” That is, the results at best offer scarcely any evidence that the Trump trade levies are eating away much at American shoppers’ buying power.

As usual, let’s first look over the statistics for metals-using industries, because they’ve been dealing with tariffs on steel and aluminum since late March, when they were first imposed. The table below compares price changes for their products with price changes for overall “core inflation” (which excludes food and energy prices, supposedly because they’re volatile for reasons that have little to do with whatever overall upward or downward general pricing pressures are shaping the economy). For good measure, I’ve included related products in an effort to distinguish between price changes due to fluctuating metals costs, and price changes due to costs of other materials or substances in the product in question – e.g., fresh produce and canned produce.

And as RealityChek regulars will notice, I’ve not only included autos and parts here, but added appliances and some other metals-using goods.

As for the dates, they cover the latest monthly price changes (through January), the changes from April (the metals tariffs’ first full month) through January, the year-on-year changes for April, and the year-on-year changes for January. The last two are probably the best measures of whether the impact of the trade curbs has been intensifying – for better or worse.

                                      Dec.-Jan.       Since April         y/y April           y/y Jan.

core CPI:                  +0.24 percent   +1.67 percent   +2.12 percent   +2.15 percent

fresh fruits                 -0.19 percent   +0.07 percent   -0.43 percent   +1.25 percent

& vegs:

fresh fruits:                +1.14 percent   -0.28 percent   +1.38 percent   -0.74 percent

fresh vegetables:         -1.66 percent  +3.01 percent    -2.50 percent  +3.64 percent

processed fruits           -0.88 percent   -0.64 percent   -1.29 percent    -0.46 percent

& vegs:

canned fruits:              -0.05 percent   +0.94 percent   -0.14 percent   +0.70 percent

& vegs:

canned fruits:              -1.59 percent    -0.56 percent    -1.60 percent   +0.35 percent

canned vegs:              +0.45 percent    +1.44 percent  +1.00 percent   +1.11 percent

soups:                         +0.34 percent    +0.80 percent   -0.38 percent   -0.81 percent

malt beverages           +0.07 percent    +1.66 percent  +0.84 percent  +2.23 percent

at home:

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

beverages away:

non-frozen, non-         +1.32 percent    +2.45 percent   -0.52 percent  +1.80 percent

-carbonated non-

alcoholic rinks:

carbonated drinks:       +2.08 percent   +4.92 percent  +0.04 percent  +5.53 percent

juices & non-               +1.84 percent   +3.39 percent   -0.26 percent  +3.31 percent

alcoholic drinks:

new cars & trucks:       +0.22 percent   +0.93 percent   -1.61 percent +0.06 percent

motor vehicle               +0.33 percent   +1.92 percent   -0.74 percent +2.12 percent

parts:

appliances:                   +1.36 percent   +4.56 percent   +0.27 percent +6.43 percent

major appliances:         +0.99 percent  +7.47 percent  +1.55 percent  +9.66 percent

non-electric                  +0.67 percent   -0.84 percent   -1.57 percent  +3.59 percent

cookware & tableware:

tools, hardware,            +0.98 percent  +0.77 percent  +0.19 percent  +1.57 percent

outdoor equipment:

The two sets of year-on-year figures do reveal some evidence of hotter inflation in metals-using products between April and January. Also apparent, however, is accelerating inflation in several of the non-canned versions of these products. As has been the case in previous months, prices change for all sorts of reasons; tariffs are only one and nothing indicates that, generally speaking, they stand out.

The evidence is more mixed for other food sectors that offer lots of canned products, like soups and beverages. The trouble is, they also offer lots of products in other kinds of containers or packages. So tariff alarmists can point to the beverages as examples of prices rising at a faster annual pace since the metals levies were imposed. But when it comes to soup, prices have been falling at a faster pace.

Moreover, if the metals tariffs have been so important, why is January year-on-year inflation for all three of the canned products so much lower than January year-on-year overall core inflation?

Moving away from foods, faster inflation can also be seen in automotive products, appliances, cookware and tableware, and tools and hardware. But as with some of the food categories, the January-January inflation rate for the tools section is below that for the economy’s “core” overall, and appliance prices also have been affected by a separate set of tariffs slapped on large household laundry machines last February. So consumer prices are still rising strongly for these goods, although it’s hard to see why year-old washing machine tariffs or ten-month old metals tariffs would be major factors behind the big December-January increases shown above.

In recent previous posts on consumer price data and the Trump tariffs, I’ve been providing information on products that will be affected by levies on imports from China. But the more I think about it, the less confident I am that the effects can be accurately gauged at this point. For one, the first full month of tariffs on goods from China came in August. The amount was relatively small ($34 billion). The first full tariff month for another $16 billion worth of Chinese import categories came in September, but none of the products in either tranche belonged in the consumer categories. (Because they were producer goods – the kinds of parts, components, and materials that go into consumer and other products –  confident about measuring their effect on U.S. producer prices – the next set of which come out tomorrow.)

A major set of tariffs containing many consumer goods levies was announced in mid-September, but they only went into effect late that month, so only four months worth of data for those products is available. And plaguing analysis of any of these price statistics, they’re issued using a classification system that’s different from that used in the list of tariff-ed Chinese goods. In a fair number of cases they line up; in most cases, they don’t, and finding satisfactory matches is challenging.

So as I see it, more patience is needed before a useful verdict on the China tariffs can be delivered. But metals tariff-led inflation clearly remains mythical – which of course only strengthens the case for President Trump’s determination to overhaul American trade policy.

Following Up: Sign the Deal – then Seize the Border Security Initiative

Tags

border security, border wall, Congress, crime, criminal aliens, Defense Department, Democrats, detention, Following Up, government shutdown, ICE, illegal aliens, Immigration, Immigration and Customs Enforcement, national emergency, shutdown, Trump

From what’s known of it, I’m as angry about the border security deal reached last night by Congressional negotiators to avert a new partial federal government shutdown as much as any immigration realist and/or supporter of President Trump. Even so, I would urge the President to sign it. (If he can win a few small improvements over the next day or two, as he’s just suggested he’ll seek, fine – but nothing achievable is worth sinking the agreement.) Then I’d recommend that he move to keep his promise that “we’ll be building the wall anyway” by using statutory authority to use Defense Department and other federal assets and resources to engage in barrier construction and secure the border in various other ways. In addition, the Trump administration should redouble efforts to keep his opponents on the defensive politically by shining the spotlight even more brightly on border security gaps left wide open by deal provisions they’ve insisted on.

I know that in yesterday’s post I argued that the Congressional Democrats, who have increasingly made clear their desire to gut meaningful border security completely, would both own a new shutdown morally (in terms of responsibility for government workers and contractors temporarily denied paychecks) and possibly pay a heavy price politically. The trouble is, that contention assumed that the Democrats’ latest cynical gambit, a new, goalpost-moving demand to shrivel (further) the federal government’s ability to detain apprehended illegal aliens – including surging numbers of border crossers – until their status hearings are held, would prevent the negotiators from reaching any agreement.

Consequently, any number of such aliens, including convicted criminals, would be released into American society, with little reason to believe many of them would risk a deportation decision (which would not be first for many). The result, as I wrote yesterday, would be a big victory for the Democrats’ principal goal of maximizing the number of migrants who can set foot on American soil to begin with, who consequently could avail themselves of the full range of legal due process protections to which everyone within U.S. territory is entitled, who would be released before their status hearings, and who would be scot-free to live and work in the United States until the Open Borders crowd could implement yet another amnesty.

Instead, the negotiators came to a conclusion that they, at least – if not necessarily many in their respective parties – could accept. There’s no denying that its threadbare reported barrier appropriation figure ($1.375 billion) would leave the current border security situation just about as unacceptable as it is today. So would the reported new quota on detention beds, which represent a big part of Washington’s ability to ensure that individuals arrested for immigration-law and related transgressions show up for hearings.

Final judgment should be withheld until the official text of the deal is released – especially on the beds issue. But some of the worst possible outcomes – from an immigration realist perspective – appear to have been avoided. In particular, although previous votes by Democrats so far haven’t been enough to prevent closet Open Borders supporters like House Speaker Nancy Pelosi from declaring walls to be “immoral,” the new agreement will make this childish position more difficult than ever to take. In addition, the current number of border detention beds is being cut, but not, it seems, by nearly as much as the Democrats recently sought, and the Immigration and Custom Enforcement (ICE) agency apparently will retain flexibility in their location.

Further, as its spokespeople have insisted, there’s a strong argument that President has ample legal authority to build and strengthen more in the way of barriers than the deal approves – even without taking the highly controversial step of declaring a national emergency. For example, as noted by one of my Twitter followers (“TruthHunterMan”), in a variety of circumstances, federal law states that “The Secretary of Defense may provide support for the counterdrug activities or activities to counter transnational organized crime of any other department or agency of the Federal Government or of any State, local, tribal, or foreign law enforcement agency.”

Moreover, this statute specifies that one of the purposes for which this assistance may be provided include “the transportation of supplies and equipment, for the purpose of facilitating counterdrug activities or activities to counter transnational organized crime within or outside the United States” and, more specifically, “Construction of roads and fences and installation of lighting to block drug smuggling corridors across international boundaries of the United States.”

In addition, as stated by White House Acting Chief of Staff Mick Mulvaney, “We will take as much money as you can give us and then we will go find money someplace else legally in order to secure that southern barrier.” So let the search intensify.

Finally, the Trump administration has done a fair job of publicizing the dangers to public safety posed by inadequate border security, but much more is possible. For instance, couldn’t the administration vividly illustrate how limits on detention are forcing the release of dangerous aliens by publishing on a regular basis the names of these individuals and the charges against them? And maybe some mass releases could be conducted regularly, too – with officials reading this information to broadcast news audiences as the migrants in question are set free? That would sure be Must-See TV. 

This strategy would have the added virtues of freeing federal workers – especially low-wage workers employed both directly and indirectly through contractors – of the threat of real economic hardship; of avoiding the forced labor situation that results from requiring essential workers to report to their jobs even if their departments aren’t funded; and of ensuring that the quality of vital services like air traffic control and Department of Homeland Security missions including Coast Guard patrols isn’t dangerously degraded.

Even passage of the latest full Trump proposal wouldn’t have strengthened border security much in the near future. So signing the Congressional compromise clearly wouldn’t produce a fatal setback. The main challenge now before the President is to flip as much of the script as he can, and capitalize on all the opportunities before him to secure as much of the border as America can ASAP.

Im-Politic: Why Democrats Will Own a Second Shutdown

Tags

barriers, border security, border wall, Congress, crime, Democrats, detention, government shutdown, ICE, illegal aliens, Im-Politic, Immigration, Immigration and Customs Enforcement, Lucille Roybal-Allard, Open Borders, Trump

With Congressional negotiators still racing to reach a deal, it’s unclear whether or not they’ll be able to reach the immigration and border security policy compromise needed to avoid the second partial federal government shutdown in two months. What’s completely clear, however, is that although President Trump declared that he “owned” the first shutdown, Congressional Democrats will deserve the blame this time.

The reason? In recent days, they’ve removed any doubt that their position has nothing to do with their stated belief that border walls are “immoral,” or even that President Trump’s focus on new barriers of any kind is hopelessly out of date. Instead, these Democrats – or at least their leaders – have now disclosed that their real price is a big step toward gutting any meaningful enforcement of immigration law.

Skeptics obviously haven’t paid attention to the course of Congressional negotiations since Friday. At that point, both Republicans and Democrats were expressing guarded optimism that a deal was in sight that involved keeping the entire federal government open in exchange for including actual funding (i.e., appropriations), for more barriers in the Department or Homeland Security (DHS) budget for the current fiscal year – not the kind of unenforceable promise to authorize certain levels of spending over the course of man years that marked previous recent efforts to keep the whole government open.

Hopes for a deal aren’t dead yet, but over the weekend, the Democrats dealt them a major setback by moving the goalposts. Their major new demand was for an unrealistically low (given the great recent increase in would-be border crossers of all kinds) limit in the number of beds maintained by the U.S. Immigration and Customs Enforcement (ICE) agency to detain individuals arrested for violations of immigration law.

Congressional Democrats described their stance as an effort to impose sanity on the Trump administration’s immigration enforcement priorities. In the words of California Rep. Lucille Roybal-Allard, “A cap on ICE detention beds will force the Trump administration to prioritize deportation for criminals and people who pose real security threats, not law-abiding immigrants who are contributing to our country.”

But no one can seriously doubt that crippling immigration enforcement is the real objective. In the first place, although it’s tempting – at least for argument’s sake – the critics’ charges that the Trump enforcement dragnet is too broad, let’s not forget that a key demand of many Democrats in recent months has not been to reform ICE practices, but to abolish the agency.

Second, there’s every reason to view the Democrats’ definition of “criminals” and “real security threats” as far too narrow. For example, many U.S. illegal aliens who hold a job are committing identity fraud in one form or another – including theft of Social Security cards. Critics of strict enforcement of immigration law tend to belittle these violations, and if you agree, that’s your right – but please spare me your complaints the next time you’re victimized by identity theft, or  become upset that constantly rising Social Security outlays are fueling the national debt.

Moreover, closet Open Borders supporters have a long record of defining down below the “serious” level many crimes that physically harm or endanger individuals – including assault, battery, sex offenses, drunk driving, and gun-related crimes.

And these coddlers of illegal alien crimes aren’t restricted to the Mainstream Media. In Montgomery County, Maryland – a suburb of Washington, D.C. – lawmakers introduced a measure to provide taxpayer-funded legal aid to illegal aliens that originally would have extended such assistance to illegals convicted of offenses such as “fraud, distribution of heroin, second- and third-degree burglary and obstruction of justice….” And let’s not forget the indulgent attitudes and practice of the nation’s many sanctuary jurisdictions.

What the Democrats pushing for fewer beds really want is a de facto (at least at first) U.S. immigration policy that prioritizes maximizing the numbers of foreign migrants able to set foot on U.S. soil, to thereby avail themselves of the wide range of due process protections afforded to anyone within this country’s territorial limits, and to then be released shortly after their initial apprehension.

As a result, these migrants – including declared asylum seekers and would-be refugees – will be completely free to skip their scheduled status hearings, and to become eligible for whatever future amnesties the Open Borders crowd has in mind once it regains enough power in Washington.

Of course, it’s one thing to make the case on the merits that the Democrats will own this shutdown. It’s another entirely for Mr. Trump to convince the public. Making this sale could represent his biggest challenge yet as President.

(What’s Left of) Our Economy: Private Sector U.S. Jobs Increasingly Really Deserve the Name

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Barack Obama, Employment, healthcare, Jobs, private sector jobs, recession, recovery, subsidized private sector, Trump, {What's Left of) Our Economy

Although unemployment in America has hovered near multi-decade lows for most of the last year, concerns about job quality rightly persist – largely because wage gains have only recently showed signs of recovering to historically normal levels for a recovery. But the latest official data from the Labor Department demonstrate that the makeup of the country’s employment picture and how it’s changed make clear continued improvement in one key measure: Growing private sector employment increasingly reflects gains in what I’ve called the real private sector, as opposed to the subsidized private sector.

Also apparent from the employment figures: The resurgence of the real private sector in relative terms as well as in absolute terms has been a Trump era phenomenon.

As known by RealityChek regulars, this trend is encouraging because the subsidized private sector consists of parts of the economy that are often (and even officially) viewed as parts of the private sector, but whose health depends largely on government largesse. That is, its total employment and its employment gains would be much smaller without huge government payouts – i.e., politicians’ decisions. The healthcare services industry is the main example.

By contrast, the real private sector consists of parts of the economy whose health flows largely from free market forces. So without getting involved in the debate over whether the United States supports too many subsidized private sector jobs or not, it should be clear that they have little to do with the state and health of the economy as a whole – unlike real private sector jobs.

According to the Labor Department’s Bureau of Labor Statistics, from 2013 through 2016, the subsidized private sector’s share of total annual employment increases more than doubled: from 11.34 percent to 25.99 percent. And its share of annual total private sector jobs gains (that is, employment increases by the private sector as conventionally defined), soared from 11.02 percent to 28.59 percent.

During 2017 and 2018 (and the data for late 2018 is still preliminary), the subsidized private sector’s share of total annual U.S. jobs gains dropped to 21.04 percent and then to 19.90 percent. And its share of the growth of total private sector jobs fell to 21.91 percent and then to 20.74 percent.

Another way to look at the Obama-era growth of subsidized private sector employment is to examine its growth as a share of the growth of real private sector jobs. In 2013, this figure stood at 12.38 percent. In 2016? Just over 40 percent. In other words, in the last year of Barack Obama’s presidency, some four in ten of the net new jobs created in the private sector came in the subsidized private sector – meaning that they were heavily dependent on government largesse.

In 2017 and 2018, subsidized private sector jobs growth as a share of total private sector jobs growth sank all the way to 28.05 percent, and then to 26.16 percent.

Looking at the economy from a static standpoint – i.e., through snapshots taken at crucial dates – illustrates these trends, too, although less dramatically. After all, even major relative changes can take many years to show up as major absolute changes in a supertanker as big as the U.S. economy.

At the outset of the last recession the subsidized private sector represented 13.67 percent of all U.S. jobs and the real private sector’s share was 70.16 percent. And the subsidized private sector’s share of the total (conventionally defined) private sector was 19.49 percent.

By the time the recovery began, in mid-2009, these figures stood at 14.97 percent and 67.80 percent – showing that during an economic downturn that decimated the overall American jobs market, subsidized private sector employment rose not only in relative terms but in absolute terms (from 18.92 million to 19.61 million. Meanwhile, the subsidized private sector’s share of the total private sector employment had risen to 22.07 percent.

By January, 2017 – the final month of the Obama administration and eight and a half years into the recovery – the subsidized private sector comprised 15.75 percent of all American jobs, and the real private sector was back up to 68.94 percent. Subsidized private sector employment had grown to 22.84 percent of total private sector jobs.

By December, 2018 (results that are still preliminary) the subsidized private sector’s share of all American employment had kept increasing – to 15.91 percent. And the real private sector’s share grew modestly, too – to 69.11 percent, as did the subsidized private sector’s share of the total private sector (to 23.02 percent).

Nevertheless, this examination of the changing dimensions of subsidized private sector employment also reveals that the national jobs market still hasn’t returned to pre-recession normality. In particular, even though the current recovery is nearing it’s tenth anniversary, that real private sector share of total employment (69.11 percent) is still below where it stood at the downturn’s onset (70.16 percent).

Im-Politic: What Democracy Supporters Should Think About the Virginia Scandals

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Brett Kavanaugh, Im-Politic, impeachment, Justin Fairfax, Mark Herring, racism, Ralph Northam, recall, sexual assault, Virginia

Although the Virginia political scandals are such a fast-moving, and changing, train, it’s still possible to think about conclusions that validly can be drawn. It’s also necessary, since in this age of the internet and social media, along with a non-stop news cycle, evidence of past misdeeds and misstatements by public figures  inevitably will keep surfacing.

For now, of course, the spotlight is on Virginia Governor Ralph Northam, the state’s Lieutenant Governor Justin Fairfax, and its Attorney General Mark Herring. But it’s clear that it shouldn’t shine equally on each one, and that the responses most consistent with democracy and the rule of law shouldn’t be uniform, either.

The main reason: As repugnant as their adventures in blackface were, neither Northam nor Herring has committed a crime. Consequently, despite the many calls for their resignations by Virginians and non-Virginians alike, I don’t believe they should accede – unless they genuinely conclude their consciences or the public good demand it. This is especially true for Northam, who to date clearly wants to keep his job.

Both his fate and that of Herring should be up in the air – that’s sure. But the decision to keep them in office ultimately should be made by Virginia voters through one of two established procedures. Either they can act on their own, and start gathering the signatures needed to make possible a court-approved recall, or they can urge their elected representatives in the state’s House of Delegates or Senate to approve impeachment and removal.

It’s entirely understandable for Virginians to fear that their state’s government will grind to a standstill as long as Northam remains in the governor’s mansion in particular. (This problem of course exists separately from the complications that would arise from his replacement by the legally troubled Fairfax, or by Herring – though they are major complications indeed.) But if the state’s residents are sufficiently worried about this prospect, they can make their concerns clear and move to assuage them in lawful manners.

None of this argument is intended to belittle other, more ethically, grounded points made to support Northam’s resignation. It indeed is reasonable to contend that he has lost the moral authority Virginians (and other voters) are entitled to expect from their elected leaders. It’s also reasonable to insist that Northam was elected fraudulently – since he never owned up to the blackface incident during the gubernatorial campaign. (And incidentally, I personally find much more troubling the presence of a Ku Kux Klan-hooded figure in the photo in question. For this group is nothing less than a violent domestic terrorist organization with a long record of racist and other bigoted violence.) Ditto for the position that Northam’s apology has turned out to be clumsy at best – and raised new questions about his racial attitudes and sincerity.

From the opposite perspective, I find some merit in the view that Northam’s record in public life on race has been admirable, and that either for that reason, or out of a broader general principle, or some combination of the two, neither he nor his career should be defined solely by a single, non-criminal episode, however odious.

But when a democracy confronts issues like this, neither my individual, nor yours (unless you live in Virginia), is especially important. What needs to count first and foremost are the collective reactions of Northam’s constituents in the state, who entrusted him with specific, major responsibilities, and who first and foremost will be impacted by the various outcomes. Denying a Virginia majority the ultimate say would in effect allot this decision to the loudest (not most numerous) voices in the state – and the nation. And therefore, it would represent a triumph not only of many with no real skin in this game, but of mob rule (albeit a non-violent form).

By contrast, Fairfax has been accused (so far) of two major crimes. Initially, let’s leave aside the comparisons naturally drawn between these sexual assault charges and those leveled at new Supreme Court Justice Brett Kavanaugh during his confirmation hearings. Like Northam, Fairfax is an elected official. Unlike them, however, his alleged offenses could be criminal – which means they raise sets of questions both that are similar to those surrounding Northam (and Herring) and  that are different.

The similar questions entail who should determine Fairfax’s political fate. And the answers resemble those for Northam and Herring: Virginia voters, acting on their own, or through their elected representatives. It’s true that major political and policy problems in the state could result from Northam’s replacement as governor by a second-in-line official whose tenure could be among the briefest on record. But Virginians should have the right to wrestle with these matters and figure out the pros and cons of all the likely scenarios themselves.

Fairfax’ status as an elected official also distinguishes him in an important respect from Kavanaugh – who held a judgeship during his Supreme Court nomination hearings, but was seeking a higher post. What Virginians must decide is whether he should continue in his current office, not whether he deserves a new one. (Interestingly, despite some talk of removing Kavanaugh from the federal bench because of his own sexual assault problems, and even other issues such as character flaws allegedly revealed because he supposedly lied about his experiences with alcohol, no removal procedures were ever initiated. Nor has anything yet come from efforts to impeach and remove Kavanaugh from the Supreme Court.)

The more interesting Fairfax questions are those concerning his own exposure to criminal prosecution. Reportedly, his first accuser, Vanessa Tyson, has decided not to press charges. His second accuser, Meredith Watson, seems to have chosen a similar course of action. 

But Fairfax is hardly out of the legal woods, because the statute of limitations for such crimes in neither of the states in which they allegedly occurred (Massachusetts for Tyson, North Carolina for Watson) has yet run out. And state officials can decide to move ahead on either case themselves. Conviction would definitely warrant impeachment and removal. Moreover, such steps could be defensible even if Fairfax was acquitted – but only if Virginians decided they were repelled enough by information that came out in court, of if they decided that the verdict was unjust.     

Similarly, during such a Fairfax trial, I know that if I lived in Virginia, I wouldn’t want my state government (if Fairfax succeeded Northam), or my lieutenant governor to face the possibility of defending himself against criminal charges – surely a full-time job in and of itself. And as with the Northam and Herring messes, all non-Virginians should feel perfectly free to voice their opinions – and even urge resignations (or hanging on). In fact, as with all free-wheeling debate, non-Virginians may well come up with some insights and ideas that haven’t occurred to Virginians. But I don’t live in Virginia, and for all of us out-of-staters,  our personal stakes in the course of this drama are nil.

One contingency that might change all of these calculations, especially for Virginians: If non-Virginians become so outraged by the prospect of some combination of Northam, Fairfax, or Herring staying in office that they try to organize tourism and other boycotts of the state. I’m generally against such campaigns, although there do seem to be reasons to believe that they’re constitutionally protected when waged by individuals. But what strikes me as dispositive is that, as with the possible consequences discussed above, these are possible costs that Virginians should decided to risk.

So again, Fairfax’ future, like that of Northam and Herring should be for Virginians to decide as they see fit. If we really have faith in democracy, the rest of us will be confident they’ll make the right decision – and recognize that we have no legitimate choice but to leave it in their hands.

Making News: A Border Crisis Interview, with Piscopo in the Morning…& More!

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AM 970 The Answer, border security, caravans, Henry George School of Social Science, Immigration, IndustryToday.com, Jobs, Joe Piscopo, Jorge Castaneda, Making News, manufacturing, Mexico, New York Knicks, Smart Talk, State of the Union, wages

What with the State of the Union address and the ongoing Border Wall/government shutdown showdown and the Virginia political scandals, it’s been a more amazing last week or so than usual to be administering RealityCheks to the national scene.  As a result, I’ve fallen behind on tracking media appearances, so in this posting I’ll be catching up.

I’m especially pleased to report that an interview I was recently privileged to conduct with former Mexican Foreign Minister Jorge Castaneda has just gone on-line at the Henry George School of Social Sciences website.  As some of you may know, I’m a Trustee of the School, and the session was the latest in its “Smart Talk” sessions with some of the world’s leading economic thinkers.

The interview was conducted in late November, but trust me when I say that clicking on this link will bring you to a great conversation about numerous issues still in the headlines – especially concerning the continuing immigration crisis along the U.S.-Mexico border.

Last Friday, I appeared on Joe Piscopo’s morning drive-time radio talk show on New York City’s AM 970 The Answer to preview the State of the Union and discuss the state of the economy.  Special bonus:  We also briefly reviewed the big New York Knicks trade of injured star Kristaps Porzingis that was announced the day before!  Here’s the link.  My segment begins just past the 35-minute mark.

Finally, on January 22, IndustryToday.com published an detailed analysis of mine on which American manufacturing industries fared the best and worst last year in terms of job and wage growth.  Click here to read.

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

Im-Politic: Trump Immigration Policy Caught Red-Handed – Working

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asylum seekers, border security, border wall, ICE, illegal aliens, Im-Politic, Immigration, Immigration and Customs Enforcement, Mainstream Media, Michael Miller, MS-13, refugees, Trump, Trump Derangement Syndrome, Washington Post

Mirroring the broader, hysterical Never Trump-ism that’s overcome so much of America’s bipartisan political establishment and its grassroots supporters (along with their foreign counterparts), the Mainstream Media just keeps killing it in the Trump Derangement Syndrome Department. And hot on the heels of that Financial Times editorial I posted on yesterday that faulting a Trump nominee for lacking the leadership and intellectual “heft” of someone who should have been tried as a Vietnam War-related criminal comes a Washington Post article handling the President’s immigration policy record with equally clueless – and equally jaw-dropping – incompetence.

According to Post reporter Michael Miller (and his editors), Mr. Trump is way off-base targeting the murderous Hispanic criminal gang MS-13, and similar networks of thugs, to muster support for his restrictionist immigration policies. The reason? “[E]ven as [the President] warned again and again about the dangers posed by MS-13 members and the need for a wall to keep them out, killings connected to the gang were plummeting in many of the areas where MS-13 has been most active.”

In other words, what could be dumber? And/or more cynical?

But in the very same article, Miller told readers that “federal law enforcement officials say MS-13 violence fell last year as a result of intensified nationwide investigations.”

More specifically, the author writes, “While Trump’s attacks on the gang have been relentless, current and former immigration officials, law enforcement agencies and gang experts attributed the decline in MS-13 murders to an aggressive response by local and federal authorities.”

For good measure, accompanying the article is a photo with this caption: “Northern Virginia Gang Task Force officers partner with ICE [the federal government’s Immigration and Customs Enforcement agency] officers to arrest an alleged MS-13 gang member in Manassas in 2017.”

Maybe Miller thinks the President has nothing to do with ICE and other federal authorities?

The author did present convincing evidence that President Trump has hardly been the first chief executive to crack down on MS-13. But he also presented evidence just as convincing that none of the success achieved by these campaigns has lasted. And if you think that the President’s insistence on more physical border barriers has been irrelevant to this crisis, consider this point made by the author: Following evidence of a reduction in gang activity, after 2014, “a surge of unaccompanied minors from Central America helped revitalize MS-13.”

And as made clear by a 2017 Post article linked in Miller’s piece, many of them made their way into the United States because inadequate border security enabled them to sneak in, or because, thanks to permissive federal policies for dealing with arrivals as a whole, “more than 150,000 such teens and children [to that point, two years ago] have been detained at the border, screened and placed in communities through the federal Office of Refugee Resettlement (ORR).”

And “Follow-up [for these resettlement efforts] is limited, and many youths fail to show up for immigration proceedings, a recent congressional investigation showed. At the same time, there are gaps in local efforts to reach vulnerable children and teens before the gang does.”

These problems could be greatly reduced by (1) better physical barriers that prevent would-be border crossers from setting foot in U.S. territory in the first place, and thereby automatically becoming eligible for the entire range of due-process protections to which citizens and other residents – legal and illegal – are entitled; and (2) related Trump administration proposals that would require refugee applicants and asylum-seekers to stay outside U.S. territory while their claims are examined.

In other words, Miller and his editors clearly thought they were serving up a classic Trump “gotcha” story. But even a minimally careful reading of the piece catches them red-handed in a disgraceful – as well as inept – example of media bias.