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

Tags

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).

Advertisements

Our So-Called Foreign Policy: Did Obama Embolden Beijing in the South China Sea?

Tags

Barack Obama, China, East Asia-Pacific, Jonathan W. Greenert, National Bureau of Asian Research, Our So-Called Foreign Policy, pivot to Asia, PLA Navy, South China Sea, The National Bureau of Asian Research, Trump, U.S. Navy, Wu Shengli

Here’s a shorty but a goody that I read about recently but haven’t been able to post on due to the rush of Kavanaugh-related news. And I can’t write about it tomorrow because both the new monthly U.S. jobs and trade figures come out. So without further ado here’s the gist: China’s aggressive efforts lately to expand its control over the South China Sea – whose waters and key shipping lanes the rest of the world consider to be international – may have been encouraged by the Obama administration’s feeble responses to its initial moves in the area.

Where’s the evidence? An August report written for the well-regarded National Bureau of Asian Research (NBR) by no less than a recently retired U.S. Chief of Naval Operations – the Navy’s senior-most officer – Jonathan W. Greenert.

Greenert never explicitly blamed the former President for coddling China in the region – which also boasts abundant energy resources. But he did write that at the start of the latest phase in China’s campaign to interfere with freedom of navigation in the South China Sea – turning a series of reefs and other geological features into small-scale but full-fledged islands that could host military facilities – other regional countries:

“perceived the United States’ slow and politicized response to Chinese activities as having been insufficient to address the challenge. Indeed, there is evidence that Chinese leaders were prepared for a more robust reaction from the United States and might have recalibrated their activities as a consequence. When there was no such response, the island-building campaign continued apace.”

And his evidence was first-hand:

“In my interactions as U.S. chief of naval operations with the PLA Navy commander, Admiral Wu Shengli, Admiral Wu made clear that he thought the United States would have a more forceful reaction when China began its island-building.”

Since Greenert served as CNO from 2011 to 2015, these interactions obviously took place during the Obama years.

As RealityChek readers should know, I favor a change in U.S. strategy in the East Asia-Pacific region that would feature a military pull-back (mainly because of the increasingly dangerous nuclear threats from China and North Korea), and a reliance instead on America’s economic power to defend and advance the United States’ essential interests in the region – which are economic. Here’s a recent, comprehensive statement of this position.

But of course, I’m not in charge of America’s Asia policy! And since President Obama stated his determination to keep U.S. Asia strategy on course – even announcing a “pivot” of American military forces and broader strategic focus to the region from the Middle East that turned out to be far more bark than bite – that strategy’s viability demanded that China’s adventurism meet a much stronger U.S. rebuff. Indeed, the results of the “talk loudly but carry a small stick” Obama strategy are becoming alarmingly clear – increasingly brazen challenges by China to the American position in East Asia that could easily trigger a conflict.

President Trump has (rightly) complained that Mr. Obama’s neglect of the North Korea nuclear threat wound up dumping that mounting crisis into his lap. Before too long, he may be making equally justified complaints about his predecessor’s record in the South China Sea.

Our So-Called Foreign Policy: The Trump-Kim Summit is a Spectacular – but Dangerous – Distraction

Tags

Barack Obama, Kim Jong Un, North Korea, nuclear buildup, nuclear deterrence, Our So-Called Foreign Policy, preventive strike, South Korea, Trump

The more the circumstances surrounding the North Korea nuclear crisis change, the more they remain fundamentally the same – and that includes the dramatic recent news that President Trump and North Korean dictator Kim Jong Un have decided to hold the first ever meeting between the top leaders of the two countries presumably to energize efforts to reach some kind of negotiated solution. As a result, it’s still the case, as I’ve argued repeatedly, that America’s only sane course of action is not to plunge even more deeply into the potentially deadly affairs of this far-off peninsula. It’s to disengage, especially militarily, and let North Korea’s big, wealthy neighbors deal with Pyongyang’s nuclear forces any way they wish.

Before the historic announcement of the Trump-Kim summit – which is far from certain actually to be held – the case for U.S. disengagement was growing more compelling by the day. The North’s rapid progress toward building a nuclear-tipped missile that could strike targets in the continental United States meant that America’s decades-old strategy of deterring Northern aggression against the South had become dangerously obsolete. Before North Korea had reached this stage, this U.S. defense guarantee was risk-free for the American homeland. Because Pyongyang could pose no threat to the United States itself, Washington could even safely afford to station nearly 30,000 combat troops directly in harm’s way in South Korea literally to trap a President into using nuclear weapons to defend the South against attack from the North and its superior non-nuclear military. And precisely because of America’s nuclear weapons monopoly, the promise was supremely credible.

With that monopoly nearly gone, the tables are turning completely. Once the North gains reasonably reliable intercontinental nuclear attack capability, America’s policy will become one of risking the complete destruction of U.S. cities for the security of another country – and a relatively unimportant one at that. And since even the landing of a single warhead one such a target would create a catastrophe never even remotely approached in American history, the current U.S. strategy will become completely non-credible. Even worse, however: As long as such a large American military force remains in South Korea, a U.S. President still may have no real choice but to proceed down the nuclear road – or accept mass American military casualties inflicted by a North Korean invasion.

It’s entirely possible that the big new twist in this story could wind up bringing the United States (and South Korea and East Asia in general) the best of all possible worlds: a verifiably denuclearized North and the preservation of American security alliances that Washington has long prized (with little evidence to be sure) as guarantors of decisive American influence in this economically vibrant region. President Trump’s stance toward the North is indeed a striking contrast to the can-kicking Obama posture of “strategic patience,” and a case can be made that the new administration’s combination of stronger military threats and economic sanctions has convinced the North that its historic truculence and defiance has become too risky. In this vein, it’s also possible that, as erratically as he’s often acted, Kim is a North Korean leader with a difference – specifically, one who significantly values his country’s economic well-being and who might be willing to trade some regained access to the world economy for his nuclear arsenal.

Sadly, it’s at least as easy to make the case that Kim will never give up his nuclear weapons (because he views them as his best guarantor of survival given the United States’ recent record of miltarily deposing other despots like Iraq’s Saddam Hussein and Libya’s Muammar Qaddafi), and that a U.S. administration ardently desiring the semblance of diplomatic victory will accept a compromise that leaves at least much of Kim’s nuclear arsenal in place, that provides valuable economic support for his regime, and that leaves at least many of the American forces in harm’s way in Korea. But this outcome would simply leave the United States in the same position as today – hostage to events in a region retaining far too many powder keg characteristics, and vulnerable to entrapment in a nuclear war if its reading of Kim and his ultimate intentions isn’t largely accurate.

Alternatively, President Trump could well continue insisting on full, verifiable denuclearization by the North, end or suspend negotiations if he’s persuaded that he’s getting conned, tighten the sanctions further in the hope that they’ll ultimately push Kim to accept U.S. terms – and even resume talk of preventive attack to (try to) make sure that the North never finishes building nuclear weapons that can be used against the America’s homeland or any of its territories, or simply to coerce greater cooperation from the North. Of course, this outcome would also leave the United States in substantially the same perilous position as at present.

As a result, the only way to drive down the risk of nuclear attack from North Korea to an acceptable level – and to enable Washington to run this risk in the first place as a matter of choice and not necessity (in order to save the troops deployed in the South) – is to pull those troops out ASAP, or by some date certain.

As I’ve noted, continued nuclear progress could still bring North Korea the ability to attack the United States with these weapons. But with the United States playing no military role in his backyard, why would it do so? Moreover, although in these circumstances an American promise to defend the South with nuclear weapons lacks would lack needed credibility (because of America’s own vulnerability), an American promise to defend itself with these devices would be supremely credible.

U.S. disengagement would indeed leave North Korea’s neighbors with many of these dangerous dilemmas. But because they’re neighbors, they have far greater stakes in dealing with them successfully than the distant United States. And because they’re among the world’s leading powers (China, Japan, and Russia, as well as South Korea), they surely have ample capabilities, or at least potential, to meet the North Korea challenge.

Are they guaranteed to succeed? Absolutely not. In fact, as supporters of the U.S. policy status quo keep insisting, an American withdrawal could destabilize the region, and even trigger conflict. But the real choices facing the United States are not between the good and the bad, but between the bad and the worse. And when the worse carries any significant possibility of a nuclear attack on American soil, the call shouldn’t even be close.

(What’s Left of) Our Economy: Why Trump was Still Right to Nix Obama’s TPP Trade Deal

Tags

Asia, Barack Obama, bilateral trade agreements, China, export-led growth, mercantilism, multilateral trade agreements, non-tariff barriers, rules of origin, subsidies, tariffs, tech transfer, TPP, trade surpluses, Trans-Pacific Partnership, Trump, {What's Left of) Our Economy

At first I was irritated with President Trump for his expressions of interest this year in reviving U.S. efforts to join the Trans-Pacific Partnership (TPP) – the Pacific Rim-wide trade agreement that former President Barack Obama couldn’t persuade Congress to ratify, and that Mr. Trump removed from America’s policy agenda during his first week in office.

I still wish the President had kept the TPP consigned to the proverbial ash heap of history. But I do see one silver lining in his apparent about-face: the new opportunity it creates to remind how awful the Obama TPP was, and in particular how cynical the case that it represented a masterful ploy to contain the rise of Chinese power regionally and globally, and even shape it to serve America’s goals of sustaining an open world trading system.

In fact, it’s entirely possible that Mr. Trump’s apparent new openness to TPP results at least partly from widespread claims from mainstream politicians and analysts that its multilateral nature endowed the deal with much more potential to curb China’s trade predation than the unilateral tariffs he’s announced.

Yet this contention is the one that’s most easily refuted. First, the version of the treaty signed by Obama contained a wide open back door for many Chinese exports by allowing goods that contained high levels of content produced outside the TPP zone to be traded freely within the zone. Given how central China is to Asia-wide production chains, these loose rules of origin were bound to enable China to enjoy crucial benefits created by the TPP without incurring any of the obligations.

Second, until the eve of its departure from office, neither the Obama administration nor any TPP supporters in Congress or the mainstream media or the think tank world lifted anything more than the occasional pinky even to protest perhaps the principal source of China’s rising economic and military power – the massive transfer of cutting edge knowhow, along with capital, from U.S. tech companies to Chinese business partners or other institutions, either voluntarily (including through shortsighted training programs and investments in Chinese entities) or involuntarily (due to Beijing’s widespread practice of linking access to the China market to the handover of critical technology).

The sudden transformation of these corporate panda-huggers and their hired American guns into China skeptics and even hawks has demonstrated nothing more than that national security is the last refuge of a trade policy scoundrel – especially since by all accounts, U.S. technology and investment continue pouring into China – including defense-related tech. (See here and here for some evidence.)

Third, there’s no reason to believe that most of the other key TPP members have any interest in turning China into a free-trading economy. Quite the contrary. Whether it’s Japan or Singapore or Vietnam or Malaysia, most of the treaty’s most important countries have followed China-style economic development models (except when they’ve borrowed from Japan’s somewhat different but of course much earlier blueprint). And economic openness emphatically isn’t in the recipe. What’s central to these strategies is amassing trade surpluses with the United States and the rest of the world to help generate adequate levels of growth and employment.

The bottom line: Most TPP countries knew that effective disciplines on the trade predation largely responsible for China’s surpluses could be used against their own subsidies and non-tariff barriers. Conversely, it’s surely the reason that these economies accepted the paper curbs on mercantilism that are mandated by TPP. They’re rightly confident that thanks to the secretive bureaucracies that keep their economies effectively closed – and their barriers difficult for outsiders even to identify, much less litigate – none of these curbs is remotely enforceable.

Even better for TPP’s mercantile majority, the treaty’s dispute-resolution system ensured that the United States would be repeatedly outvoted when it sought to advance or defend its interests.

That’s why the TPP was so likely to supercharge America’s already enormous and economically damaging trade deficits. The TPP mercantilists’ liberalization promises would do nothing substantial to open their markets and increase U.S. export opportunities. But America’s TPP commitments, carried out by a government characterized by transparency, would be very effective guarantees that the American market would remain wide open to the TPP majority’s products.

President Trump has demonstrated that he recognizes many of these fatal flaws in the Obama TPP. His stated preference for bilateral over multilateral trade deals suggests an understanding that the former give the United States much more legal authority in dispute resolution. Moreover, he has explicitly tweeted that he’d only back rejoining the TPP if major fixes were made.

Precisely because he’s the only American President in recent memory to show any interest in changing the nation’s ill-considered trade status quo, and any awareness that the United States retains ample leverage to achieve its trade objectives unilaterally, I can’t rule out the possibility that Mr. Trump might turn TPP into a winner for the U.S. domestic economy (as opposed to the importing and offshoring lobbies).

But the main lesson that should be taken from decades of American trade diplomacy with Asia is that economies structured to promote exports and limit imports are going to stay substantially closed no matter what promises they make. Therefore the best course for the United States to make is to expend its energy and resources on reducing its economic engagement with Asia, rather than trying to remake the region in anything like its own image.

(What’s Left of) Our Economy: Fake Trump Trade News from the Washington Post

Tags

Barack Obama, China, Damian Paletta, Erica Werner, Seung Min Kim, TPP, Trade, Trans-Pacific Partnership, Trump, Washington Post, {What's Left of) Our Economy

There’s nothing unusual about my waking up each morning not sure about exactly I’ll be blogging on that day. There’s everything unusual about making up my mind immediately after glancing at the front page of the print Washington Post that arrives at my home daily. All it took was one look at the paper’s coverage of President Trump’s decision to consider starting negotiations to enable the United States to rejoin the Trans-Pacific Partnership (TPP) – the Pacific Rim trade deal that he denounced during his campaign for the White House and that he withdrew from in his first week in office.’

The problem with the Post coverage entailed the one of the greatest sins journalists can commit – portraying matters of opinion as matters of fact. This transgression, moreover, almost could not appeared prominently – in the third paragraph of the edition’s front page lead story.

According to writers Erica Werner, Damian Paletta, and Seung Min Kim (and of course their editors),

“An embrace of the TPP would give Trump more leverage in his escalating trade feud with Beijing. It also would give U.S. farms, retailers and other businesses better access to foreign markets if China makes good on its recent threats of new tariffs on U.S. goods.”

In other words, what’s not to like about the treaty? And how could Mr. Trump have possibly turned it down?

Yet what’s apparently escaped the Post news team is that the points made above are far from facts. They’re opinions. They’re possibilities, to be sure, and have long been central to the case for TPP. But they’re nothing more than contentions. At best, no one can know whether these benefits will be realized. Indeed, as I’ve observed repeatedly (see, e.g., here and here), because of specific provisions of the version of TPP agreed to by former President Barack Obama (but never ratified by Congress), grounds for major skepticism about all these claims abound.

When I tutored Washington, D.C. school kids several years ago, one of the lessons assigned to me for second or third graders was distinguishing fact (“that chair is brown”) from opinion (“that chair is pretty”). Little did I imagine that adult journalists would need drilling on this subject, too.

Im-Politic: A Neglected Russia Disinformation Objective?

Tags

2016 election, Barack Obama, Central Intelligence Agency, China, CIA, CNN, collusion, cybersecurity, Director of National Intelligence, disinformation, fake news, Im-Politic, intelligence community, James R. Clapper, John O. Brennan, Matthew Rosenberg, MSNBC, NBC, North Korea, Putin, Russia, The New York Times, Trump

Well then. Two passages in a New York Times article from this morning’s print edition were sure conversation-stoppers when it comes to the ongoing uproar about charges that President Trump’s 2016 presidential campaign colluded with Russia to boost his election odds and ensure soft treatment from his administration. That is, if you read far enough into the long piece to encounter them. In fact, they’re so important that they should have been the main angle – or at the very least, the main theme of front-page stories from now until we ever find out what’s really happened.

The passages (which make the same critical point):

First, according to Times reporter Matthew Rosenberg, by some point last September (at the latest), American intelligence officials were worried that Russia had developed an “operation to create discord inside the American government.”

Second, and more specifically, the intelligence agencies viewed one key part of this operation as feeding information suggesting that Vladimir Putin’s regime could blackmail the President (and/or the candidate) to “United States intelligence agencies and pit them against Mr. Trump.”

And here, in Rosenberg’s words, is the context:

“American intelligence agencies believe that Russia’s spy services see the deep political divisions in the United States as a fresh opportunity to inflame partisan tensions. Russian hackers are targeting American voting databases ahead of the midterm election this year, they said, and using bot armies to promote partisan causes on social media. The Russians are also particularly eager to cast doubt on the federal and congressional investigations into the Russian meddling, American intelligence officials said.

“Part of that effort, the officials said, appears to be trying to spread information that hews closely to unsubstantiated reports about Mr. Trump’s dealings in Russia, including [a] purported video [depicting him in compromising sexual situations], whose existence Mr. Trump has repeatedly dismissed.”

In plainer English, if Rosenberg has it right, the Russians have not only been trying to put Mr. Trump over a barrel and make sure that he defeated his main rival, Democrat Hillary Clinton. They have not only been trying to shake Americans’ confidence in their democratic institutions by hacking into them and unleashing a flood of fake news onto its media platforms, social and conventional. They have not only been trying to cover their tracks by using such fake news and other tactics to discredit the Congressional investigations into election meddling and related reported outrages.

They have also – separately – been trying to whip up antagonism between the President and the intelligence community. Achieving this goal of course would both tend to hamper America’s own intelligence operations and broader foreign and national security policies, as well as undermine the nation’s political system and its underlying social and cultural unity. And the tumult engulfing the capital and the nation as a whole suggests that the Russians are succeeding with this disinformation campaign, and that the intelligence agencies are playing their hoped for role.

Not that this possibility lets Mr. Trump and his aides totally, or mainly, or partly off the hook when it comes to their Russia ties either before or after his election.  For this objective could well have been sought on top of an effort to turn Mr. Trump into a Manchurian Candidate and President, not instead of it. But it does raise the question of how many of the allegations have stemmed from simple, and completely fictitious, plants.

Something else noteworthy about this article: If it’s accurate, then the potentially disastrous loss of America’s cyber-weapons to Russia and perhaps other adversaries that keyed Rosenberg’s piece was just the latest disclosed possibly catastrophic intelligence failures that occurred during Barack Obama’s presidency, and on the watches of the former intelligence agency chiefs, like his Director of National Intelligence (the complex’s top job) James R. Clapper, and one of his Central Intelligence Agency (CIA) Director John O. Brennan – both of whom have been particularly sharp Trump critics.

Two others? China’s penetration of the CIA’s operations in the People’s Republic, which reportedly resulted in the assassination or capture of “more than a dozen sources” (according to press accounts, the breach began in 2010, under Brennan’s predecessor, former General David Petraeus) and the failure to anticipate the speed of North Korea’s nuclear weapons development (which can be laid directly at Clapper’s feet, and which Brennan apparently missed as well).

Clapper, incidentally, is now a “national security analyst” for CNN. Brennan has just joined NBC and MSNBC in the same capacity. Good luck to you if you think there’s any chance these networks’ weekend talk shows tomorrow will raise any of this, including the Rosenberg article, with them?

Im-Politic: So You’re Outraged by Trump’s Reported –hole Remarks?

Tags

amnesty, Barack Obama, chain migration, Charlottesville, DACA, Deferred Action for Childhood Arrivals, Dick Durbin, Gang of Six, illegal immigration, Im-Politic, Immigration, Open Borders, racism, Trump, visa lottery

Although it’s anything but clear that President Trump made the profane comments attributed to him at a recent meeting on immigration reform with several members of Congress, it’s also anything but outrageous that a reporter would ask him afterwards, “Are you a racist?” His performance after the Charlottesville protests last August alone are grounds for legitimate concern.

But are the alleged Trump comments (which only one participant in the meeting – Open Borders supporter Dick Durbin, a Democratic Senator from Illinois – has “confirmed”) the only outrageous set of remarks or positions characterizing the immigration policy debate specifically since it entered its current phase in the mid-2000s? Not on your life. In fact, here are some questions I wish journalists would ask Durbin and the rest of the pro-amnesty crowd.

>”Are you an adult?” That’s a question that’s justified by the abject refusal of those blanketly opposing all efforts to establish some form of effective controls on immigration flows to inform the rest of us just how many newcomers they believe the nation can safely absorb, and over what period of time. Their apparent belief that the answers are “an infinite number” and “as quickly as possible” can’t accurately be described as anything but childish.

>”Do you have a working brain?” The president’s critics have never acknowledged the reality that any sizable version of amnesty – as Open Borders enthusiasts in both major political parties are still pushing in the current negotiations over illegal immigrants originally brought to the United States as children – is going to strengthen greatly the magnet that encourages populations from all over the world to take whatever steps are needed to enter the country illegally?

It happened after passage of the ballyhooed amnesty-centered immigration reform legislation of 1986. And it happened after former President Obama in mid-2012 announced his decision to postpone deportation for many of the aforementioned illegal immigrant children via his Deferred Action for Childhood Arrivals (DACA) decision. And why wouldn’t it? If Washington announces that nothing will be done to remove illegal immigrants once they’ve arrived, why wouldn’t they keep trying to come?

>”Are you completely cynical?” President Trump gave Congress more leeway than ever (mistakenly, in my view) to come up compromise immigration legislation. His unmistakable and entirely reasonable assumption was that the group of lawmakers he convened last Tuesday would come up with a proposal that would make permanent the protections currently enjoyed by most of the aforementioned childhood arrivals in exchange for (a) significantly strengthened border security measures; (b) ending the “chain migration” feature of current U.S. immigration policy, which has supercharged the entry of newcomers who have little or no prospect of contributing to the economy; and (c) ending the equally doofy visa lottery, which seeks to increase immigration inflows from certain countries simply because they have been deemed inadequate.

What was the initial response – from a self-appointed task force of Democratic and Republican legislators called “the Gang of Six”? Amnesty not only for DACA recipients but for those denied its benefits by the Obama program, and for the parents of most of this entire cohort; threadbare funding for border security; a shell game stunt that leaves the chain migration system fundamentally intact; and a visa lottery proposal that was just as fake.

So I’ll close by repeating a point I’ve made ever since Mr. Trump made his formal debut in presidential politics in late 2015: If his opponents really wanted to send him and his often objectionable style packing – or now that he’s in the White House, to neuter his effectiveness – they’d spend much more time and energy coming up with realistic solutions to the legitimate complaints voiced by him and his supporters than they spend on fulminating about his latest outrages.

Their failure to process that lesson helped fuel the President’s 2016 victory, and their responses to the alleged – hole remarks shows that their learning curve remains entirely too shallow.

Our So-Called Foreign Policy: Now the Establishment Media is Praising the Perps on China Policy

Tags

artificial intelligence, Barack Obama, China, Eric Schmidt, Evan Osnos, Financial Times, Google, Jake Sullivan, John Reed, Our So-Called Foreign Policy, tech transfer, The New Yorker, Tom Mitchell, Trump

As RealityChek‘s slogan surely makes painfully clear, the interlocking worlds of politics and policy and media are so shot through with outright hogwash that producing it now looks like standard operating procedure. But every now and then, I come across items that, even by the debased standards of our time (which, contrary to establishment conventional wisdom, loooong predated the Trump era) belong in a class by themselves. And in the last week alone, that category has grown by two statements.

The first came in a January 3 Financial Times report on China’s growing power and influence in Asia and around the world. Authors Tom Mitchell and John Reed seemed bent on making the case that President Trump’s policies and statements had created or threatened to create vacuums around the world that Beijing is (brilliantly) moving to fill – an allegation that’s fact free but now so commonplace that it’s no longer newsworthy or comment-worthy.

Here’s what is – and jaw-droppingly so: letting a former senior Obama administration foreign policy adviser get away with making a statement like this: “There is a sense in Asia that Trump’s election may portend a dramatic power shift.”

The aide, Jake Sullivan, was not only a foreign policy adviser to Hillary Clinton’s presidential campaign and to Obama’s Vice President Joe Biden. He was the head of the State Department’s policy planning staff under Obama. So surely he had something of a hand in making U.S. policy toward China during the Obama years.

And what were the hallmarks of this policy? Doing nothing of consequence to halt the predatory Chinese trade policies that helped Beijing stockpile literally trillions in hard currency that have come in awfully handy for financing a major military buildup and government-sponsored research into advanced defense-related technologies. Doing nothing of consequence to stop China from stealing this knowhow from American companies, or to stop U.S. tech firms from handing it over voluntarily, in exchange for favorable treatment by Beijing. Doing nothing of consequence to stop China’s expansionism in the South China Sea. And doing nothing of consequence to halt or even slow North Korea’s drive to develop state-of-the-art nuclear weapons – including nuclear-capable missiles capable of striking American territory, and thereby of undermining Washington’s commitments to the defense of major allies like South Korea and even Japan.

And Sullivan has the nerve to insinuate that say that Trump’s election is responsible for tilting power balances in China’s favor? That’s like Neville Chamberlain blaming Winston Churchill for giving Nazi Germany the confidence to invade Poland.

The second example concerns the aforementioned U.S. corporate tech transfer to China, and comes from a ballyhooed January 8 New Yorker piece devoted to the same mission (#amazing!) as the Financial Times piece – blaming Mr. Trump for giving away the global store to China.

Catching my attention in particular was author Evan Osnos’ decision to quote the former chairman of Google follow-on company Eric Schmidt’s warning that (in Osnos’ words) “reductions in the funding of basic-science research will help China overtake the U.S. in artificial intelligence (AI) within a decade.” Osnos also let Schmidt speak for himself: By 2030, they will dominate the industries of A.I.”

I have no problem with Schmidt’s opposition to the funding cuts. In fact, I strongly agree. I also take especially seriously his prediction about China’s rapid tech progress. Why? Because under Schmidt, Google was a prime China tech enabler. As I wrote in a Bloomberg View column in 2012, Google products have helped China perfect its (highly effective) internet censorship programs, and its “China University Relations” program had by then established relationships with no less than 15 Chinese institutions. In addition, in 2005, it set up its own research and development center in Beijing.

In other words, Google (and most of the rest of Silicon Valley) has been actively helping China develop the tech capabilities about which its former head is now ostensibly worried.

But it gets much better: Somehow, Schmidt forgot to tell Osnos – and somehow the latter’s own wide-ranging reporting in China missed the fact that – Google has just decided to set up another research facility in China. And its focus? Artificial intelligence. According to its director,

“Besides publishing its own work, the Google AI China Center will also support the AI research community by funding and sponsoring AI conferences and workshops, and working closely with the vibrant Chinese AI research community.”

You’ve heard of “blame the victim?” These two articles could reveal a growing media tendency to “praise the perp.” And evidently if the result is to exalt the establishment, and discredit its critics (especially Trump-ian), so much the better.

(What’s Left of) Our Economy: Both Trump and Critics Could be Wrong About the Business Spending Rebound

Tags

Barack Obama, business spending, Center for Economic and Policy Research, Dean Baker, energy, recession, regulation, Trump, {What's Left of) Our Economy

Economist Dean Baker of the Washington, D.C.-based Center for Economic and Policy Research has just performed a valuable service. He’s looked under the hood of U.S. economic data and found a major, under-reported feature of the economy’s business spending performance under President Trump so far: A lot of the improvement has come in the energy sector, and therefore stems from energy price increases that have little to do with Washington policy decisions.

And if the story ended there, Baker would be justified in dousing “Trump capex (capital expenditures) rebound” claims with lots of cold water. But it doesn’t.

As Baker points out, energy-related capital spending accounted for more than 40 percent of the total increase in all capital spending recorded in the official government data since last year. That is indeed big-time out-performance, and there’s no doubt that (like the energy-related business investment bust that began in late 2014) it’s largely due to energy price changes. When the price of oil and natural gas goes up, businesses (understandably) conclude that demand is rising, drill more, and need more drilling equipment and the like. When energy prices fall, this spending just as understandably tends to sink.

Even so, if you look at the policy landscape, there’s a case for giving the administration some credit for the energy investment recovery. Specifically, it’s rolled back some important regulations in the industry, and has spoken repeatedly of eliminating more. And interestingly, this latest increase in energy-related business spending has taken place much faster than the previous surge, under former President Barack Obama – who was not exactly a fossil fuels booster.

Yet developments outside the energy sector indicate even more powerfully that the economy could be seeing a Trump effect on capex. The key is examining spending on equipment. Whatever the effect of energy-related spending on the business investment totals, equipment’s is much bigger. Even after the latest spurt in energy, it still represents less than four percent of the business spending total (officially called non-residential private fixed investment). The latest figures show the equipment share is more than ten times larger – nearly 48 percent.

So although equipment spending has increased by only 5.93 percent during the Trump era, that rise amounts to just over $62 billion – much more than the energy-related spending increase. And more telling, this advance follows a 3.38 percent yearly drop in this spending category in 2016. In fact, equipment capex was down on net from the third quarter of 2014 through the fourth quarter of last year. The last time it fell for that long a stretch was during the last (historically terrible) recession (when the plummet was much greater and lasted considerably longer).

All the same, let’s not forget that the Trump administration is still only one year old. So a wait-and-see attitude is probably best for both sides of the Trump effect capex debate. And to the extent that any patterns can be discerned, not surprisingly, the truth so far seems to lie somewhere in between.

Im-Politic: An Old Year Rung Out with Fake News

Tags

ABC News, Barack Obama, Bloomberg.com, CNN.com, Gallup, Hillary Clinton, Im-Politic, Mainstream Media, Marketwatch.com, NBC News, Newsday, Politico.com, The New York Times, Trump, USAToday, Washington Post

Whatever you think of Donald Trump, his presidential campaign, and his first year in office, you can be sure of this: His charges that too much of the Mainstream Media publishes and broadcasts too much fake news will continue – and continue to resonate – as long as their performance in covering a new Gallup survey of the most admired men and women in America keeps typifying their output.

Gallup has asked Americans who they look up to most since the 1940s (for male figures) and since the 1950s (for female figures). As I see it, the 2017 poll’s results were a fascinating mix. They showed that former President Barack Obama and last year’s Democratic presidential nominee Hillary Clinton continued their long strings at the top of their heaps. President Trump came in second on the men’s list – as he has since 2015.

In my view, Gallup played it right in its report on the survey, noting the winners in its lead paragraph and then immediately observing that the Obama and Clinton margins were “much narrower…than in the past.” The firm didn’t highlight that both Democrats’ edge fell at a faster rate than President Trump, but at least its tables made that trend clear.

Few major news organizations followed suit.

USAToday‘s headline, for example, blared, “Barack Obama beats Donald Trump for most admired man, Hillary Clinton tops list again in Gallup poll.” Reporter Ashley May never mentioned their diminishing leads.

CNN.com did better. Its header announced “Gallup: Obama, Hillary Clinton remain most admired” and noted the Obama dip in the second paragraph. But the Clinton fall-off wasn’t reported until the fifth (of ten) paragraphs.

The ABC News headline – “President Trump is America’s second-most admired man, poll finds” – at least accurately reflected the disparaging tone of the full article. “Digital reporter” Karma Allen led off by observing that “President Donald Trump snagged a major legislative victory with the signing of his landmark tax reform bill last week, but he’s still living in his predecessor’s shadow when it comes to public admiration, according to a new poll.”

He continued with the factoid that the results marked “one of the very few times in recent history that an incumbent president hasn’t taken the top spot.” (It’s actually 13 out of 71 times.) And he simply ignored the declining Obama and Clinton numbers.

Bloomberg,com chose as its headline a reasonable “Obama Tops Trump as Most Admired, Gallup Poll of Americans Finds,” but although specifying that the margin was “close,” never mentioned the weakening Obama or Clinton ratings, either. The same held for the article run in Politico.com. The New York Times headline was a similarly accurate “Clinton and Obama Top U.S. Poll on Most Admired People” but the article neglected to include the trend over time as well.

The two worst performances? The Washington Post‘s headline was a gratuitously snarky “Obama beats Trump where it will sting: He’s the most admired man in America.” A graphic made clear the closing Trump-Obama gap, but this development never made it into the article itself. However reporter Philip Bump did consider it important to write that the overall results “coming at this moment, will probably be somewhat galling to Trump.”

Whoever wrote the headlines for the coverage by Long Island’s Newsday seemed like he or she was auditioning for a job at the higher profile Post. “Gallup ‘most admired’ poll is an ‘Obamanation’ for Trump,” was the first description of the survey the paper’s readers saw. The second description, in a subhead? “He just can’t win the popular vote.” The article itself, by William Goldschlag, simply continued in this vein.

But I’d be just as remiss as much of the Mainstream Media by failing to mention journalists who recognized the deteriorating relative Obama and Clinton ratings. So Rachel Koning Beals of Marketwatch.com and Phil Helsel of NBC News, please take richly deserved bows. Let’s all hope your news judgment spreads to many more of your colleagues in the New Year!