(What’s Left of) Our Economy: Krugman’s (Embarrassingly) Phony Tariff History

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To the many reasons I have to envy Paul M. Krugman (his high profile perch as a New York Times pundit, his Nobel Prize in economics, his surely stratospheric income), one more can now be added:  As strongly indicated by his latest column for The Times, he works for folks who allow him to publish any claim he’d like without being fact-checked or even questioned in any way.

In that piece, Krugman sought to debunk President Trump’s recently tweeted claim that “TARIFF is a beautiful word indeed” by showing that “the actual history of U.S. tariffs isn’t pretty.”  One major example he used:  Because America “took a sharply protectionist turn before the infamous 1930 Smoot-Hawley Act,” the country’s farmers “spent the 1920s suffering from low prices for their products and high prices for farm equipment, leading to a surge in foreclosures.”

“Part of the problem was that U.S. tariffs were met with retaliation; even before the Depression struck, the world was engaged in a gradually escalating trade war.”

Sounds pretty convincing, right? In fact, not even close. And not least of which because the only two sources cited by Krugman contain absolutely no mention of low farm prices or foreclosures or unaffordable farm equipment stemming from any trade-related developments. In fact, there’s not even a mention of “high prices for farm equipment” at all.

The sources – articles on the Economic History Association’s website on the 1920s tariffs, and on the U.S. economy in the 1920s (you can read them here and here) – demonstrate that agriculture’s woes during this period (not surprisingly) resulted from many cases. But tariffs don’t make the list. 

Simply put, the main culprits were excessive borrowing by American farmers late in the previous decade based on the assumption that agricultural output in war-torn Europe would remain long depressed, and that this market would for many years be importing ever greater amounts of U.S. farm products; and a subsequent price-depressing glut in American supply when European output recovered faster than expected once World War I ended.

A a result, U.S. farmers were left with lots of new acreage and machinery that suddenly became superfluous even though their new owners still needed to pay off the debts they incurred to buy them.  No wonder so many weren’t able to meet their mortgage payments.

Adding to American agriculture’s problems during this period were a productivity boom triggered by surging mechanization and other advances that permitted agricultural production to rise much faster than domestic (and foreign) consumption; and an economy-wide depression in 1920 and 1921 that primarily resulted from excessive monetary tightening by the Federal Reserve. Again, nothing about tariffs.

Importantly, the 1920s economic history article in particular is a gold mine of information about many developments of that time that shed considerable light on today’s major economic challenges – as I’ll be describing in some future posts.  In the meantime, I’d strongly recommend that anyone with an interest in the American economic invest the time needed to read it – starting with Paul Krugman.

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(What’s Left of) Our Economy: Time to Investigate China’s Enablers in the Trade War

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For decades (decades!), when describing how U.S. trade policy should be overhauled, I’ve emphasized that Washington’s approach needs to be not onl “tougher” or “stronger” — as per the favored terms of politicians and reporters.  It needs to be smarter and more nimble as well.

So here’s to the Japanese publication Nikkei Asian Review. It’s just shown exactly why – and why such smarts and agility are especially important for an administration more than willing to use tariffs on China and other economies to achieve its policy goals. (And thanks also to my Twitter follower “DeSaram-MAGA” for calling my attention to the piece.)

For a team of Nikkei journalists has investigated a key subject that no one in the Trump administration, the Congress, or the American media (at least to my knowledge) has bothered to look at: How much of the falling U.S. imports from China are being replaced by supplies genuinely produced in other countries (like Mexico and Vietnam), and how much are being replaced by goods from China being shipped through other countries either simply by putting them in different boxes and containers, or by slapping a coat of paint on them or making some other superficial change before sending them on to the United States?

The answers matter because if it’s mainly or significantly the former, then it becomes clear that the Trump tariffs really are hurting China by denying it sale opportunities that are being snapped up by other competitors. True, the final result per se won’t achieve the major Trump-ian goal of reducing the overall U.S. trade deficit. But China will be weakened – clearly another one of the President’s objectives – and the beneficiaries at least won’t be a huge, wealthy, powerful dictatorship acting like it wants to expand its influence in East Asia and perhaps the world over at America’s expense.

If the answer is the mainly or significantly the latter, then it becomes clear that numerous other economies – including U.S. allies – helping China evade the American levies, and that unless they halt these practices pronto, the case for worldwide tariffs on lots of products becomes a lot stronger.

The Nikkei journalists present evidence for both propositions. But given the uproar that erupted over the global Trump metals tariffs (imposed precisely to prevent assistance given to the Chinese metals producers who had glutted global markets), signs of customs fraud, transshipment, and related practices are especially important.

The Nikkei team provides some anecdotal evidence on this score. But the data-based case described is much more compelling. For example, the journalists found that although exports of five categories of goods from China to the United States – machinery and parts; electrical equipment and parts; furniture; toys; and automotive equipment and parts – declined between January and March of this year declined by 16 percent, “exports from China to developing countries and from developing countries to the U.S. [of these goods] have generally climbed. Exports via Vietnam, Taiwan and Mexico have increased particularly steeply.”

The rising Chinese exports to these countries strongly suggest that Vietnam, Taiwan, Mexico and others aren’t simply filling the China gap in the U.S. market with goods originating in their own economies. To a great degree, they’re helping Chinese origin goods fill that gap on the sly.

Even more suspicious, according to the article:

Since the U.S. first slapped punitive tariffs on a broad range of imports from China, the six major Southeast Asian nations and Taiwan have started shipping nearly 1,600 new categories of products to the U.S. that they had never exported to America before.

Of these new U.S.-bound exports, about 1,000 items, or over 60% of the total, are on Washington’s blacklist.”

That is, unless you believe that in a matter of months, major production capacity for this huge number of products somehow suddenly appeared where little, if any, existed before, then circumvention has to be rife.

The Nikkei findings don’t mean that the Trump administration should build all-encompassing tariff walls immediately. But they do mean that Washington needs to demand prompt answers from the economies in question. U.S. leverage, moreover, in many cases isn’t only economic. It’s grounded in national security, too. Countries like Vietnam, Taiwan, and Malaysia aren’t official U.S. treaty allies, but are all quite pleased that the American military counters China geopolitically by basing lots of assets in their neighborhood.

President Trump plainly understands that the United States needs these countries much less than vice versa both economically and security-wise. But the trade policy overhaul he’s rightly pursuing still needs to do better at guarding against foreign efforts to game the system. In this case, that requites demonstrating one of the most reliable signs of intelligence – curiosity.

Making News: Back on Israeli TV on Trump’s Mexico Tariffs – & a New Podcast!

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I’m pleased to announce that I’m scheduled to return tonight to Israel’s i24News TV network to discuss President Trump’s threat to impose tariffs on imports from Mexico if Mexico doesn’t step up its efforts to ease the crisis on the two countries’ borders.  i24News is available by subscription only, but you can see the segment, which is slated to air at 8 PM EST, by clicking on this link and registering for a free trial subscription.

Moreover, I appeared on i24News last Friday, too, to participate in a panel discussion of the subject.  You can access the video by clicking on this link and downloading the file.

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

Im-Politic: ABC’s Stephanopoulos Peddles Fake News on Mueller and Obstruction

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The trade wars and resulting uproar have of course intensified lately due to President Trump’s threats to tariff Mexican imports to improve Mexico’s performance in helping ease the border crisis, and a New York Times report that his administration was mulling imposing levies on Australia in response to a surge in its aluminum exports to the United States.

But those developments – plus a terrific story in the Japanese press on metals tariffs that I’ll be posting about shortly as well – need to take a back seat today on RealityChek to a flagrant piece of fake news concerning the Mueller report’s conclusions propagated by a major broadcast media anchor that urgently needs to be debunked.

The culprit here is George Stephanopoulos, a top aide to Bill Clinton both during his first presidential campaign and his first term in the White House. The fake news involves his claim, made on yesterday’s This Week program, that in his report on Russian election interference and the responses of President Trump and his aides, the former Special Counsel Robert S. Mueller “laid out four incidents in the obstruction of justice section of the report that met all three criteria for obstruction of justice — an obstructive act, connection to an investigation, corrupt intent.”

His clear intimation was that Attorney General William P. Barr overlooked this major evidence and that his own decision (made in conjunction with his then Deputy, Rod Rosenstein, who decided to authorize a Special Counsel investigation of the above matters in the first place) to decline indicting the President was a transparently political effort to let Mr. Trump off the hook.

In fact, however, not only did the Mueller fail to identify four such incidents. The single set of incidents that could possibly qualify as an obstruction charge slam dunk – the President’s alleged efforts to remove Mueller himself as Special Counsel – was awfully weak beer.  Stephanopoulos might have two other groups of incidents in mind as well, but the case for so describing them is even feebler.

Before we proceed, however, keep in mind that in order to produce an obstruction conviction, a any prosecutor needs to convince a jury, as with all criminal trials, that the defendant is guilty “beyond a a reasonable doubt.” In addition, in order to decide to indict or to recommend an indictment, a government prosecutor must decide that “the admissible evidence will probably be sufficient to obtain and sustain a conviction….”

As I noted in my May 30 post, the Mueller report found “substantial evidence” that Mr. Trump committed obstructive acts in efforts to have Mueller fired (Vol. II, pp. 87 and 88). Ditto for the “connection to an investigation” and “corrupt intent” criteria for obstruction charges. (Vol. II, pp. 88-90).

But as I also noted, “even the substantial evidence [on the allegedly obstructive act count] simply ‘supports a conclusion.’ And there may be less to that conclusion than meets the eye. For couldn’t the presidential order to [then White House Counsel Don] McGahn to call Rosenstein have reflected…concerns about Special Counsel team conflicts of interest?”

Regarding the critical matter of intent, Mueller wrote (Vol. II, p. 89) that “Substantial evidence indicates that the President’s attempts to remove the Special Counsel were linked to the Special Counsel’s oversight of investigations that involved the President’s conduct- and, most immediately, to reports that the President was being investigated for potential obstruction of justice.”

That verb “indicates,” though, is pretty wishy-washy, especially considering the (properly) tough standards long established by U.S. criminal law and Justice Department policy for bringing an obstruction charge. Why didn’t Mueller write that this substantial evidence “shows” or “demonstrates” that these Mueller-removing actions were linked to his ongoing investigation, which threatened the Trump presidency?

The first of the two other possible slam-dunk groups of incidents entails the President’s efforts to curtail the Mueller investigation (as opposed to simply firing the Special Counsel). This episode centers around Mr. Trump’s decision to send former campaign aide and frequent (unofficial) confidant Corey Lewandowski on a mission to tell then Attorney General Jeff Sessions to end the existing investigation into election 2016 and specific Trump-related matters, and concentrate his efforts on whatever foreign meddling might be threatening upcoming elections.

The second such group of events consist of other attempts made by Mr. Trump to direct Sessions to take over the Special Counsel investigation.

The report’s wording convince me, anyway, that Mueller believed that the Lewandowski-related incidents met the obstructive act and link to an ongoing investigation standards. Plenty of evidence is presented regarding intent as well.

But at this juncture, it’s necessary to point to other intent-related considerations that we know were influencing Mueller’s evaluation of these events. Specifically, as Mr. Trump has continually observed, the Special Counsel (Vol, I, p. 9) found no underlying crime (that candidate Trump or any member of his campaign either acted “as an unregistered agent of the Russian government or other Russian principal” or “conspired with representatives of the Russian government to interfere in the 2016 election”). Nor, even though this activity would not constitute a crime, did the investigation “establish that members of the Trump Campaign” even “coordinated with the Russian government in its election interference activities.” (Vol, 1, p. 2).

Although, as Barr noted in his March 24 letter to Congress announcing his decision not to indict Mr. Trump, the absence of an underlying crime does not preclude charging a defendant with obstruction, this absence “bears upon the President’s intent with respect to obstruction.” In other words, as I wrote on May 30, and as Barr made clear in a May 17 interview, Mr. Trump’s actions reflected his belief – which was both sincere and factually grounded – that he was being framed.

And guess what? Mueller agrees! On Vol. I, p. 7, his report states:

[U]nlike cases in which a subject engages in obstruction of justice to cover up a crime, the evidence we obtained did not establish that the President was involved in an underlying crime related to Russian election interference. Although the obstruction statutes do not require proof of such a crime, the absence of that evidence affects the analysis of the President’s intent and requires consideration of other possible motives for his conduct.”

As for the Trump efforts to ensure that his then Attorney General take over the Mueller investigation, the report doesn’t even come to any identifiable conclusion about whether any obstructive acts were committed. (Vol. II, p. 112)

The only other group of incidents that might legitimately qualify for the “slam dunk” category centered on Trump’s order to McGahn to deny that he had asked him to firer Mueller.

At the same time, Mueller’s conclusion as to whether any obstructive act was committed here is anything but clear, either. As the report notes (Vol II, p. 118):

The President’s repeated efforts to get McGahn to create a record denying that the President had directed him to remove the Special Counsel would qualify as an obstructive act if it had the natural tendency to constrain McGahn from testifying truthfully or to undermine his credibility as a potential witness if he testified consistently with his memory, rather than with what the record said.”

There is some evidence that at the time the New York Times and Washington Post stories [reporting that such developments took place] were published in late January 2018, the President believed the stories were wrong and that he had never told McGahn to have Rosenstein remove the Special Counsel.”

In other words, the report is acknowledging these could have represented another group of Trump actions motivated by the sincere belief that he was being framed.

At the same time, the report states that “Other evidence cuts against that understanding of the President’s conduct.”

In sum, it’s obvious that contending that Mueller concluded that Mr. Trump was robustly indictable for even one of these sets of incidents rests on the shakiest of ground. Contending that the report found four such sets is nothing less than fiction. And the insinuation of a Barr cover-up is completely beyond the pale. Indeed, taken together, and given the various legal hurdles he needed to overcome to make a legitimate indictment recommendation, it’s obvious why – aside from the Justice Department policy barring the indictment of a sitting President – Mueller didn’t report to Barr that solid grounds existed even for a single obstruction charge.

In fact, as I also noted on May 30, the following was the most obstruction-friendly conclusion contained in the Mueller report – and it covers the above events related to the attempted Mueller firing:

[T]here [is] a sufficient factual and legal basis to further investigate potential obstruction-of -justice issues involving the President.” (Vol. I, p. 12)

I.e., after a 2-year probe conducted by as many as 19 lawyers with the assistance of “approximately 40 FBI agents, intelligence analysts, forensic accountants, a paralegal, and professional staff ” that “issued more than 2,800 subpoenas under the auspices of a grand jury sitting in the District of Columbia; executed nearly 500 search-and-seizure warrants; obtained more than 230 orders for communications records under 18 U.S.C. § 2703(d); obtained almost 50 orders authorizing use of pen registers; made 13 requests to foreign governments pursuant to Mutual Legal Assistance Treaties; and interviewed approximately 500 witnesses, including almost 80 before a grand jury,” Mueller simply determined that reasons existed for continuing to investigate. (Vol. I, p. 13) And P.S.: He didn’t call them “substantial.”

If Stephanopoulos simply made a mistake by claiming that Mueller found four full-blown instances of Trump obstruction of justice, that’s fine – as long as he admits the error. Until he does, however, he’ll be as guilty of trafficking in fake news as he seems to believe Mr. Trump is guilty of obstruction.

Im-Politic: A Better Way to Pressure Mexico on Immigration

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It’s not every day that I praise veteran Republican Senator Charles Grassley of Iowa. In fact, I don’t believe I’ve ever praised him in print. On trade policy he’s often especially especially clueless – his last foray into this field consisted of threatening to use his chairmanship of the Senate Finance Committee to scuttle the U.S.-Mexico-Canada Trade Agreement (USMCA) unless President Trump withdrew his tariffs on metals imports from Mexico and Canada.

(Grassley was upset because Mexico in particular had retaliated by slapping tariffs on some key American farm products exported by states like Iowa. He didn’t seem to realize that, as I’ve written here, the tariffs needed to be global in scope to be effective. Meanwhile, however serious American farmers’ woes, they began in earnest years before any Trump tariffs went into effect.)

So imagine my surprise yesterday upon learning that Grassley has proposed a response to Mexico’s foot-dragging on helping to ease the crisis on its border with the United States that’s much better than President Trump’s tariffs.

According to Grassley, the way to pressure Mexico to tighten its own curbs on the floods of Central Americans streaming through its territory toward the United States is to tax the remittances sent to their home country by Mexicans who have moved northward both legally and illegally.

Remittances consist of money sent by immigrants back to their home country – usually to relatives. They encourage immigration because they come from wages earned by newcomers to the United States that are much higher than those they can make in their countries of origin.

And we’re unmistakably talking big numbers – especially for Mexico. The country’s own central bank pegged them at almost $31.5 billion last year. That’s more money coming into the Mexican economy than it makes from oil exports, and in fact its second largest foreign exchange earner after auto parts exports.

Unlike tariffs, remittances taxes wouldn’t harm Americans who buy imports from Mexico – whether consumers or businesses. All the victims would be Mexicans in Mexico. And because so many poor Mexicans in particular rely on these funds to help maintain and improve their living standards, a smaller flow would squeeze their finances and surely increase political instability in a country that’s long suffered more than its share of turmoil. Don’t think Mexico’s leaders – who are already sounding inclined to make concessions to Mr. Trump to avoid the threatened tariffs – could brush these sanctions off.

At least as important, unlike the proposed tariffs, remittance taxes wouldn’t endanger Congressional passage of the USMCA or undermine the Trump administration’s China trade policies by reducing Mexico’s attractiveness as an alternative export platform for companies looking to move in whole or in part out of the People’s Republic.

The President has actually spoken of taking this step to raise the resources needed to finance a Border Wall, but never followed through. At the time, covert and overt Open Borders supporters charged that the move could be counterproductive, since the remittances increased the well-being of their recipients enough to encourage them to stay in Mexico.

But since these payments still represent only a fraction of the earnings of Mexicans in the United States, it makes no sense to believe that many Mexicans in Mexico seriously contemplating moving across the border would be satisfied by receiving a fraction of a loaf if they thought it was all potentially available.

It’s possible that the Trump tariff threat could suffice to produce enough of a Mexican response to satisfy him on border security and declare victory with no levies. In this vein, it’s significant that Mexico’s president has already signaled his willingness to appease Mr. Trump somehow. But a remittances threat could have accomplished the same goal with much less muss and fuss. If negotiations with Mexico can’t resolve the issue by the announced Trump deadline of June 10, switching tactics to a remittances tax a la Grassley would be an unmistakable no-brainer.

(What’s Left of) Our Economy: The New GDP Report Confirmed the Good News Trump Trade Story

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The U.S. government’s second look at the gross domestic product (GDP) for the first quarter of the year, which came out yesterday, didn’t significantly change the message sent by last month’s initial read on the economic impact of President Trump’s tariff-centric trade policies so far – and that’s good news for anyone who’s not afflicted with Trump Derangement Syndrome. (Actually, if extreme Never Trump-ers’ well-being is tied to the American economy’s, it’s good news for them, too, in real life.)

This newest look provides yet more evidence that Mr. Trump’s long overdue overhaul of the nation’s approach to trade – no doubt coupled with other measures like regulatory reform and possibly the tax cuts – is enabling the economy to grow in a healthy, sustainable way. Specifically, the economy’s overall inflation-adjusted growth (the measure that attracts the most attention) has not only been strong. It’s become stronger than the growth of America’s still oversized, debt-producing trade deficits.

The quarter-to-quarter results show this trend emphatically. According to the second GDP read, the economy grew at a price-adjusted annual rate of 3.03 percent in the first quarter of this year. That’s down only slightly from the 3.13 percent real growth previously reported, and considerably faster than the 2.15 percent results for the fourth quarter of last year.

But during that first quarter, the after-inflation overall trade deficit dropped by 5.45 percent. That’s a bit less than the 5.90 percent sequential drop found in the last month’s GDP report (because the trade shortfall was revised slightly higher), but still considerable given the rapid overall expansion. And it’s a major turnaround from the 0.63 constant dollar trade deficit increase between the third and fourth quarters of last year.

All the same, one quarter does not a trend make. That’s why it’s crucial to note that developments over longer time-frames also support optimism about the Trump trade policies’ results. And as previously shown, the most revealing comparison is between the last high growth period recorded by the economy during President Obama’s administration, and the current Trump surge.

Despite the marginal reduction in the first quarter’s real growth figure, it still leaves after-inflation expansion over the last four data quarters at 3.18 percent. That’s the fastest such growth since the 3.37 percent recorded between the second quarter of 2014 and the second quarter of 2015.

But during that Obama-era growth spurt, the real U.S. trade deficit increased by 21.55 percent. During the current Trump high growth period, this trade gap is up only 0.13 percent so far.

Some other trade-related highlights of the new read on first quarter GDP:

>In absolute terms, the inflation-adjusted overall trade deficit for the first quarter was revised up from $899.3 billion to $903.6 billion. That’s the lowest level since the second quarter, 2018’s $841.0 billion.

>Consequently, the real trade deficit as a share of price-adjusted GDP stood at 4.78 percent, not the 4.76 percent reported in the advance GDP release. That’s still the lowest such number since the second quarter of 2018’s 4.54 percent.

>Trade’s contribution to economic growth in the first quarter remained at its best level in years. In the advance read, the sequential shrinkage of the constant-dollar trade deficit fueled 1.03 percentage points of 3.13 percent annualized growth. As of the new GDP report, these figures stood at 0.96 percentage points of 2.03 percent growth.

In other words, the trade deficit’s improvement accounted for 31.64 percent of the first quarter’s real growth. That’s down from the 32.91 percent figure from the initial read on first quarter GDP, but still the highest such figure since 38.56 percent of the fourth quarter of 2013 (when a reduction in the inflation-adjusted trade deficit fueled 1.23 percentage points of its 3.19 percent annualized growth.

>Because total goods and services exports were revised slightly higher (from $2.5765 trillion annualized to $2.5836 trillion), they remained at record levels.

>Real goods exports exports were estimated to be slightly higher, too – $1.8028 trillion annualized instead of $1.7598 trillion. But that’s still only the second best total on record (after the $1.8092 trillion in the second quarter of 2018).

>After-inflation services exports were also upgraded slightly – from $783.2 billion annualized to $783.6 billion. That still represents their fifth straight quarterly record.

>First quarter constant dollar total imports are still estimated to have fallen sequentially in the first quarter, but only to $3.4871 trillion annualized, not to $3.4758 trillion. That upward revision still left them as representing the third highest level on record.

>The same story unfolded for after-inflation goods imports. Their quarterly drop left them at $2.9229 trillion annualized, not $2.9131 trillion – also a third all-time highest level.

>Real services imports, however, came in higher than the $562.2 billion at annual rates previously reported. The new $563.8 billion total represented a new record.

Im-Politic: Mueller’s Sin of Omission on Obstruction

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There’s no longer any legitimate doubt: Nearly six weeks after its release, almost no one with any influence on American public policy or public opinion has actually read the publicly available version of the Mueller report on Russian election interference and possible presidential obstruction of justice. And most of those who have read it either didn’t understand it, or are trafficking in misleading descriptions. P.S. Based on his brief farewell remarks yesterday, that list includes Special Counsel Robert S. Mueller III himself.

Those are the only logical conclusions that can be drawn from the continuing insistence that, to quote Mueller, President Trump would have been charged in the report with the crime of obstructing justice but for “long-standing Department policy, [that] a President cannot be charged with a federal crime while he is in office. That is unconstitutional….The Special Counsel’s Office is part of the Department of Justice and, by regulation, it was bound by that Department policy. Charging the President with a crime was therefore not an option we could consider.”

Was Department policy a major determinant of Mueller’s non-indictment decision? Of course. And Mueller made that clear both in his reports and in his brief public statement. But was it the only determinant? And, by implication, given Mueller’s declaration that his report’s findings did not “exonerate” the President on this score, did Attorney General William P. Barr behave improperly by issuing his own determination that, even leaving aside Justice’s presidential indictment policy, Mueller’s investigation did not produce evidence “sufficient to establish” presidential obstruction?

The answer to both questions is clearly “No.” And it’s not even necessary to rely on Barr’s denial, in his March 24 letter announcing the decision reached by he and then Deputy Attorney General Rod Rosenstein, that the determination “was made without regard to, and was not based on, the constitutional considerations that surround the indictment and criminal prosecution of a sitting president.”

It’s not even necessary to believe Barr’s May 1 testimony to the Senate Judiciary Committee that, at a March 5 meeting with Mueller, “in response to our questioning, [Mueller stated] that he emphatically was not saying that but for the [Justice Department policy] he would have found obstruction. He said that in the future the facts of the case against the president might be such that a special counsel would recommend abandoning the OLC opinion, but this is not such a case.”

These Barr statements can be ignored because Mueller’s April 18 report itself not only gathered abundant evidence bearing on the obstruction charge. It declared that it was inconclusive. To quote from the report (Volume II, p. 8. All subsequent page references are to this Volume unless otherwise noted.) “The evidence we obtained about the President’s actions and intent presents difficult issues that would need to be resolved if we were making a traditional prosecutorial judgment.” And the report’s detailed discussions of ten Trump-era potential obstruction of justice episodes makes clear that the difficulties arose precisely because his team found significant evidence on both sides of the issue.

As a result, the most obstruction-friendly conclusion that Mueller and his aides reached was

that “there was a sufficient factual and legal basis to further investigate potential obstruction-of -justice issues involving the President.” (p. 12). In other words, an indictment decision was anything but a slam dunk. And after a protracted probe involving the questioning of literally hundreds of witnesses, all that the Special Counsel could state with high confidence was that a case can be made.

Moreover, the report spent so much time weighing the kind of evidence that would be used in a normal obstruction case that an entire section was devoted to summarizing “the law interpreting the elements of potentially relevant obstruction statutes in an ordinary case. This discussion does not address the unique constitutional issues that arise in an inquiry into official acts by the President.” (p. 9)

The obstacles to indicting Mr. Trump for obstructing justice came through loud and clear in the Mueller report’s analysis of what’s often portrayed as the leading candidate for such a charge – the President’s alleged order to his then White House Counsel Don McGahn to fire Mueller. According to the Mueller Report (on p. 87):

A threshold question is whether the President in fact directed McGahn to have the Special Counsel removed. After news organizations reported that in June 2017 the President had ordered McGahn to have the Special Counsel removed, the President publicly disputed these accounts, and privately told McGahn that he had simply wanted McGahn to bring conflicts of interest to the Department of Justice’s attention….Some of the President’s specific language that McGahn recalled from the calls is consistent with that explanation. Substantial evidence, however, supports the conclusion that the President went further and in fact directed McGahn to call Rosenstein to have the Special Counsel removed.”

It’s perfectly valid to note that the “substantial evidence” cited here surely outweighed in Mueller’s mind the evidence about presidential language recalled by McGahn – evidence that wasn’t even given an adjective. Yet readers are told that even the substantial evidence simply “supports a conclusion.” And there may be less to that conclusion than meets the eye. For couldn’t the presidential order to McGahn to call Rosenstein have reflected the same concerns about Special Counsel team conflicts of interest?

On the question of intent, which matters greatly in obstruction cases, Mueller wrote (p. 89) that “Substantial evidence indicates that the President’s attempts to remove the Special Counsel were linked to the Special Counsel’s oversight of investigations that involved the President’s conduct- and, most immediately, to reports that the President was being investigated for potential obstruction of justice.

I’m not a lawyer, but could someone please explain to me why that “substantial evidence” is so all-fired incriminating? And as for this claim (p. 90) – “There also is evidence that the President knew that he should not have made those calls to McGahn” – that doesn’t exactly strike me as “Lock him up” material.

Muddying the waters even further are the aspects of possible obstruction-related episodes for which the Mueller Report presents no judgment on the evidence in terms of adjectives or other descriptions.

For example, regarding the President’s conduct with respect to the investigation of his (quickly fired) national security adviser Michael Flynn during the transition period, the report simply states (pp. 46-47):

As part of our investigation, we examined whether the President had a personal stake in the outcome of an investigation into Flynn-for example, whether the President was aware of Flynn’s communications with [Russian Ambassador to the United States Sergey] Kislyak close in time to when they occurred, such that the President knew that Flynn had lied to senior White House officials and that those lies had been passed on to the public. Some evidence suggests that the President knew about the existence and content of Flynn’s calls when they occurred, but the evidence is inconclusive and could not be relied upon to establish the President’s knowledge….

Our investigation accordingly did not produce evidence that established that the President knew about Flynn’s discussions of sanctions before the Department of Justice notified the White House of those discussions in late January 2017. The evidence also does not establish that Flynn otherwise possessed information damaging to the President that would give the President a personal incentive to end the FBI’s inquiry into Flynn’s conduct.

Evidence does establish that the President connected the Flynn investigation to the FBI’s broader Russia investigation and that he believed, as he told Christie, that terminating Flynn would end “the whole Russia thing.”

No bottom line is presented.

Similarly (p. 154), the report’s discussion of the “nexus” issues raised by presidential conduct toward his former lawyer and all-around fixer Michael Cohen (focusing on the obstruction-relevant possibility that an individual being investigated knew that certain actions could bear on certain official proceedings ranging from judicial or grand jury actions to Congressional probes) simply observed:

The President’s relevant conduct towards Cohen occurred when the President knew the Special Counsel’s Office, Congress, and the U.S. Attorney’s Office for the Southern District of New York were investigating Cohen’s conduct. The President acknowledged through his public statements and tweets that Cohen potentially could cooperate with the government investigations.”

One powerful overall conclusion, though, can easily be reached after reading the entire Mueller Report, and it bears on the crucial obstruction-related consideration of whether an individual acted with corrupt intent. As Barr observed in a May 17 interview with Fox News, Mr. Trump’s actions sprang from the genuine – legally non-corrupt – conviction that Mueller’s investigation of his record, along with the Obama administration’s surveillance of his campaign and the presidential transition, was a “witch hunt and a hoax.”

Continued Barr:

[A]t the time, he was saying he was innocent and that he was being falsely accused. And if you’re falsely accused, you would think [it] was a witch hunt. … He has been hammered for allegedly conspiring with the Russians. And we now know that was simply false…. I think if I had been falsely accused, I’d be comfortable saying it was a witch hunt.”

At least as important, the Mueller Report itself supports this interpretation in many instances. For example:

[U]nlike cases in which a subject engages in obstruction of justice to cover up a crime, the evidence we obtained did not establish that the President was involved in an underlying crime related to Russian election interference. Although the obstruction statutes do not require proof of such a crime, the absence of that evidence affects the analysis of the President’s intent and requires consideration of other possible motives for his conduct.” (p. 7)

Multiple witnesses recalled that the President viewed the Russia investigations as a challenge to the legitimacy of his election.” (p. 47)

[Then Attorney General Jeff] Sessions said he had the impression that the President feared that the investigation could spin out of control and disrupt his ability to govern, which Sessions could have helped avert if he were still overseeing it. (p. 51)

On Saturday, March 25, 2017…the President called [Director of Intelligence Daniel] Coats and again complained about the Russia investigations, saying words to the effect of, “I can’t do anything with Russia, there’s things I’d like to do with Russia, with trade, with ISIS, they’re all over me with this.” (p. 56)

In addition to the specific comments made to Coats, [the CIA Director Mike] Pompeo, and [then National Security Agency Director Admiral Michael] Rogers, the President spoke on other occasions in the presence of intelligence community officials about the Russia investigation and stated that it interfered with his ability to conduct foreign relations.” (p. 57)

The evidence shows that the President was focused on the Russia investigation’s implications for his presidency- and, specifically, on dispelling any suggestion that he was under investigation or had links to Russia.” (p. 61)

Evidence indicates that the President was angered by both the existence of the Russia investigation and the public reporting that he was under investigation, which he knew was not true based on [then FBI Director James] Comey’s representations. The President complained to advisors that if people thought Russia helped him with the election, it would detract from what he had accomplished.” (p. 61)

President Trump “told Comey that ‘he was trying to run the country and the cloud of this Russia business was making that difficult.'” (p. 61)

The President…told McGahn that the perception that the President was under investigation was hurting his ability to carry out his presidential duties and deal with foreign leaders.” (p. 62)

According to [then White House adviser Stephen K.] Bannon, the President said the same thing each time: ‘He [Comey] told me three times I’m not under investigation. He’s a showboater. He’s a grandstander. I don’t know any Russians. There was no collusion.'”

We also considered why it was important to the President that Corney announce publicly that he was not under investigation. Some evidence indicates that the President believed that the erroneous perception he was under investigation harmed his ability to manage domestic and foreign affairs, particularly in dealings with Russia.” (p. 76)

The President wanted Sessions to disregard his recusal from the investigation, which had followed from a formal DOJ ethics review, and have Sessions declare that he knew ‘for a fact’ that “there were no Russians involved with the campaign” because he ‘was there.’ The President further directed that Sessions should explain that the President should not be subject to an investigation ‘because he hasn’t done anything wrong.'” (p. 97)

[T]he President knew that the Russia investigation was focused in part on his campaign, and he perceived allegations of Russian interference to cast doubt on the legitimacy of his election.” (p. 97)

[T]he evidence does not establish that the President was involved in an underlying crime related to Russian election interference. But the evidence does point to a range of other possible personal motives animating the President’s conduct. These include concerns that continued investigation would call into question the legitimacy of his election….” (p. 157)

As I wrote in an April 21 post, I believe that, because he had no reason to believe that a nearly complete version of his report (whose only required audience was the Attorney General) would be made public, Mueller acted perfectly appropriately in including a judgment that his investigation did not exonerate Mr. Trump on the obstruction question. For he was trying to impart information to Barr.

But Mueller has done the country a grave disservice by stressing the Constitutional barriers to indicting the President on this score. His report plainly demonstrates that he and his staff spent enormous amounts of time probing the traditional legal bases for an obstruction charge, and found considerable evidence to support decisions both to indict and not indict had Justice Department policy permitted such a step to be considered. And his farewell remarks yesterday were an inexcusable missed opportunity to clarify these matters.

As for Barr’s decision to file no obstruction charges, he and Rosenstein just as plainly saw the amount of evidence supporting such a conclusion, and quite reasonably judged that the obstruction allegations could not be proved “beyond a reasonable doubt” had Justice’s reading of the Constitution permitted a case to be brought. Moreover, as Barr’s May 17 press interview demonstrates, he believed that the President’s relevant words and deeds stemmed from his conviction that he was being framed – a conviction borne out by Mueller’s findings not only that the evidence was “not sufficient to support criminal charges” on any grounds against any Trump campaign officials who had contacts with the Russian government, but that no members of the campaign had “coordinated with the Russian government in its election interference activities.” (Vol I, pp. 9,2)

Now that Mueller’s investigation is finally, officially, totally over, Congress, of course, has every Constitutional right to launch impeachment proceedings. For impeachment charges can properly include deeds that are not strictly speaking crimes. But it’s crucial to note that, from a legal standpoint, Mr. Trump is now in the clear. And although technical objections like Mueller’s can be raised to the President’s “no collusion, no obstruction claims,” his own report shows that they’re more than accurate enough.

Im-Politic: Why the Crucial Abortion Debates are (Long) Over

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If only most of the major challenges facing Americans were as easy to meet as arriving at a satisfactory compromise over abortion. In fact, in the key respects, the challenge has already been met, as a general consensus is staring the nation in its collective face, has been in place literally for decades, and looks guaranteed to remain solidly in place for the foreseeable future.

Sounds crazy, doesn’t it, given the political and policy brawl that has erupted in recent weeks over a handful of states’ approval of laws dramatically reducing the circumstances in which abortion will remain legal?  But this contention is backed up strongly by the national legal regime regulating abortion right now, by all the polling, and by everything known about how the Supreme Court – which it’s thought on both sides of the issue could well transform the status quo it’s created since its 1973 Roe v. Wade decision – historically has handled such explosive questions. Moreover, abortion is one of those matters in which the politics, the law, and the history powerfully reinforce each other.

Let’s start with the law. The major Supreme Court decisions are of course the Roe case – which established a Constitutional right to abortion but also authorized states to infringe on it in various ways during a pregnancy’s second and third trimesters – but also a ruling in the 1992 Planned Parenthood of Southeastern Pennsylvania v. Casey case. In it, a 5-4 majority of the Court created a standard to govern such state restrictions on abortion, holding that such measures could not impose an “undue burden” on women seeking abortions that “created a substantial obstacle” to undergoing the procedure “before the fetus attains viability.”

Revealingly, that guideline nicely describes the current U.S. consensus on abortion rights: Women deserve a fundamental right to abortion, but (like most other rights), it’s not absolute. More specifically, the most widely agreed on exceptions involve what are clearly exceptional (and exceptionally tragic) – mainly rape, incest, serious threats to the pregnant woman’s health, and a high likelihood that the new baby would suffer from serious defects. (See this recent Gallup summary for some representative data.)

Still more revealingly: These public attitudes have been remarkably stable over time. At least three separate polls – shown in the aforementioned Gallup summary, by Pew, and by the National Opinion Research Center (NORC) – make this point emphatically.

And at least as important – NORC’s findings show that a sizable gap has existed between public support for the “tragic” exceptions to the right to abortion on the one hand (which have demonstrated at least 70 percent backing for the four decades examined), and other proposed exceptions (whose support generally has remained between 30 percent and 50 percent).

In turn, these legal and political considerations both create towering obstacles even to a Court now featuring a conservative majority overturning either the Roe or the Casey regimes. And least plausible of all is the wish-dream of abortion rights opponents and the nightmare of abortion rights supporters – that the Court bases such a reversal on cases brought deliberately in order to uphold the highly restrictive new state laws. For outlawing abortion even in the aftermath of rape and incest, for example, would seem the epitome of creating a Casey-violating undue burden on the fundamental right to abortion. The various “heartbeat” bills for their part can’t be squared with the Court’s determination in Roe and other decisions since that a fetus isn’t viable until long after the six weeks at which this function can first be detected.

Indeed, such laws repeatedly have been struck down in various courts, and the Supreme Court has refused to consider the two that reached it on appeal. And don’t think it’s a coincidence that the high court’s recent record tracks well with public opinion (including on the heartbeat bills, according to Kaiser Family Foundation and Quinnipiac University survey results presented in this sweeping summary of decades of abortion poll findings).

But couldn’t the Supreme Court’s new conservative majority decide the time is ripe to get rid of Roe and follow-on decisions? Not if it bears any resemblance to its predecessors since the New Deal era. For one of the seminal findings about the Court came back in 1960, in Harvard political scientist Robert G. McCloskey’s classic study, The American Supreme Court. As McCloskey argued compellingly, the Court is most successful when it pays attention to public opinion, and runs into its greatest troubles when it gets too far ahead of or too far behind these attitudes. If you’re skeptical, just think of the tumult that followed the pre-Civil War Dred Scott case and its invalidation of crucial pieces of New Deal legislation during the Great Depression.

None of this is to say that lots of thorny abortion-related decisions will continue to face Americans – like federal funding for Planned Parenthood and other organizations that provide a wide range of women’s health care services, including abortion services; and about what kinds of reproductive health services like birth control religious organizations should be required to provide for female employees in their health insurance plans. And few of them have generated enough polling evidence to identify consensus with any justifiable confidence.

But the broadest, most important abortion-related questions have been decided – especially in the court of public opinion. The procedure will remain a strongly protected Constitutional right early in pregnancy, and a more weakly protected right in later phases. Throughout pregnancies, this right will receive virtually absolute protection in genuinely traumatic circumstances, and be subjected by states to curbs on its availability that don’t “substantially” nullify it in practical terms — and that therefore should not be reflexively condemned as stepping stones to wide-ranging bans.

So abortion rights supporters need to give up on extending strong protections deep into pregnancy. And abortion rights opponents should forget about overturning Roe and Casey. It’s true that medical advances that keep pushing fetal survivability (if not viability without pervasive support) back closer to conception will one day resume adding fuel to the abortion debate fire. And public opinion is by no means set in stone. But for more than forty years since Roe, Americans collectively have been saying that the general abortion debate is over, and the courts have plainly agreed. It’s high time that politicians and activists across the spectrum got the message.

(What’s Left of) Our Economy: Why the Multinationals Still Should be Ignored on China

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Is China mainly valued by American multinational businesses as a super-cheap production site for serving U.S. customers, or as a huge and potentially huge-er consumer market? The question has mattered decisively since the beginning of the nation’s controversial and dramatic trade expansion with China because of the impact on domestic U.S. jobs and production.

So it’s important to report that a new poll of the multinationals that operate in the People’s Republic strongly supports the views of trade policy critics (like me) who have charged that the nation’s pre-Trump approach to China’s economic rise has produced America Last results for the United States, and have urged a fundamentally new strategy.

If the multinationals were using China mainly to supply the U.S. market, as the critics have long insisted, then the trade and investment patterns that have emerged with China would inevitably be undercutting America’s economy. For their investment in the People’s Republic would be mainly replacing factories and similar facilities in the United States, and even exports to China would mainly be replacing shipments between plants within the United States.

If, however, these global giants (and the economists they employ to make their case to politicians, the press, and the public) were right in claiming that their activities were mainly focused on satisfying demand in China, and especially final demand, then the U.S. domestic economy would benefit. For their new Chinese customers would be supplementing their existing American customers, and overall markets for products Made in the USA would grow. (See here and here for arguments from multinationals-funded think tanks studies purporting to document that this win-win scenario has been the case for years.)

But a survey conducted by no less than the American Chamber of Commerce in China and by its Shanghai branch makes clear the great extent to which U.S.-owned businesses operating in China are oriented towards customers back home. One of the biggest hints? More (40 percent) of the 239 firms contacted said that (in the words of a Bloomberg.com summary) “the hike of U.S. tariffs announced on May 10 would have a strong negative impact on their business” than said that they would be hurt by a retaliatory Chinese increase in its duties (33 percent). Clearly, the American levies’ increase would damage those companies because of all that they produce in China for export to the United States. And this despite the robust growth of a Chinese consuming class that is said to be the main reason for concentrating on Chinese customer.

Two other big clues: Fully 35 percent of the companies responding said that “their main strategy for dealing with the tension was to restructure so their operations were more heavily ‘in China for China.’” In other words, many of their China operations are still structured to be “in China for somewhere else.” And 53 percent of the businesses reported that they faced no non-tariff retaliatory measures from Beijing since July, 2018 – when the first Trump China tariffs were announced. Why would they if much of their focus was exporting, and thereby helping China earn valuable foreign exchange revenue?

Nonetheless, the American Chamber survey did turn up two semi-surprises. First, only one of the companies responding complained that a curb on China’s forced technology transfer practices “was the most important outcome” for President Trump to achieve in any trade agreement. For decades, reports of this practice have been too numerous to list.

Second, 42 percent of the companies stated that “a return to the status quo before the tariffs was most important for them” – even though mounting corporate complaints about harassment from and discrimination by the Chinese government and its agents in the Chinese “business” sector are mains reason for strong (stated, anyway) bipartisan American support for ramping up the pressure on China. At the same time, this result could be yet another sign of how much U.S. corporate activity in China continues using the country mainly as an export platform.

Even the most charitable interpretation of this survey would conclude that American businesses simply have no coherent idea of what they want U.S. China trade diplomacy to produce. On the one hand, many of them plainly remain unhappy with the Chinese environment in which they operate. On the other, many plainly oppose the only American measures – tariffs – with any hope of improving this environment.

All of which tells me that, although there may be many grounds for criticizing President Trump’s trade war with China, opposition from an American business community that is at best utterly clueless and at worst hopelessly conflicted on the issues isn’t one of them.

Making News: New China Trade Wars Op-Ed…& More!

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I’m pleased to announce (a little tardier than usual) the publication of my latest freelance article.  Posted on The National Interest website Monday night, it takes a detailed look at the U.S. goods that China says it will tariff in retaliation for President Trump’s latest levies, and explains why they reveal how weak the Chinese negotiating position is, not how strong.  Here’s the link.

It was also great to see the piece headlining this morning’s edition of the aggregator site RealClearPolitics.com, as you can see by clicking here.

Finally, on Monday night I did a short-notice interview on the U.S.-China trade wars on John Batchelor’s nationally syndicated radio show.  The podcast, strangely, isn’t on-line yet, but I’ll post it as soon as it’s available.

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