Our So-Called Foreign Policy: The Ukraine Mess that Really Counts

Tags

Adam B. Schiff, America First, Barack Obama, Blob, George W. Bush, globalism, impeachment, NATO, North Atlantic treaty Organization, Our So-Called Foreign Policy, Russia, Senate impeachment trial, Trump, Ukraine

Ever since U.S.-Ukraine relations became front-page news as Russia began its military and paramilitary campaign against the former Soviet “republic” (and cradle of Russian civilization), and especially ever since American Presidents and lawmakers have sought to help Kyiv resist, I’ve been writing that whatever emotions this struggle stirs, U.S. leaders have never viewed Ukraine’s security as a remotely vital interest of the United States – and with good reason.

Located right on Russia’s doorstep, the country is impossible to defend without using nuclear weapons (and thus running the risk of nuclear war), and its multi-decade span under the Soviet thumb never had the slightest impact on America’s safety, independence, or well-being. Indeed, even a card-carrying globalist like former President Barack Obama has stated that precisely because Ukraine is a core interest of Russia’s but not of the United States, it’s “going to be vulnerable to military domination by Russia no matter what we do.”

These observations have seemed especially important in recent months, as backers of impeaching President Trump have strenuously argued to the contrary. Indeed yesterday, in his formal presentation at Mr. Trump’s Senate trial, House Intelligence Committee and lead House Impeachment Manager Adam B. Schiff once more joined the chorus that has raised the stakes of protecting Ukraine considerably higher. The California Democrat endorsed a claim that Ukraine’s takeover by Russia would directly threaten America’s allies in the rest of Europe, and indeed, the U.S. homeland itself.

Quoting a previous impeachment witness (and eerily echoing a major argument for continuing to fight endless wars in the Middle East), Schiff declared, “The United States aids Ukraine and her people so that they can fight Russia over there, and we don’t have to fight Russia here.”

Not that Schiff nor any impeachment supporters my research has come across has ever called for the logical – indeed, the essential – follow-on to their Ukraine analyses (urging the permanent stationing of major American military units on Ukraine soil to deter the Russians.  And not that they’ve supported the Pentagon budget increases needed to deploy these forces without cannibalizing other missions). So it’s reasonable to conclude that their words amount to just so much bluster (and possibly Trump Derangement Syndrome).

At the same time, it’s important to note that there’s been no shortage of statements by Mr. Trump’s predecessors (including Obama) that draw connections between Ukraine’s fate and America’s.

For example, George W. Bush was a strong supporter of bringing Ukraine into the North Atlantic Treaty Organization (NATO). This step would legally commit Washington to come to Ukraine’s defense against outside aggression just as strongly as the United States is committed to come to the defense of France, Germany, the United Kingdom, and other European allies whose security has long been deemed vital. And in 2008, the alliance officially endorsed this goal – though without any timetable or specific plan for achieving it.

In the context of endorsing greater efforts to help Ukraine strengthen its defenses, Obama himself in 2014 emphasized the importance of keeping NATO “open” to “countries that meet our standards and that can make meaningful contributions to allied security.” And in the same speech, he vowed, “we will not accept Russia’s occupation and illegal annexation of Crimea or any part of Ukraine.”

Further, although President Trump hasn’t been the biggest fan of Ukraine or NATO, his administration officially has kept the membership door open to Kyiv. Just as officially, and more diisturbingly, the United States still considers Ukraine a “strategic partner” and indeed actually calls “a strong, independent, and democratic Ukraine” a “vital interest.”

The big takeaway isn’t that my prior descriptions of U.S. policy toward Ukraine were flawed. (Although they were.) Instead, it’s that support for bringing Ukraine into NATO and saddling the United States with yet another security commitment it can’t meet without incurring the risk of nuclear attack is strong in both the Democratic and Republican wings of the intervention-happy, globalist foreign policy establishment. And unless the presidency continues to be held by leaders with powerful America First-type instincts, this Blob’s dangerous ambitions could well become reality.

(What’s Left of) Our Economy: U.S. After-Inflation Wages Could Still Use More Inflation

Tags

Barack Obama, election 2020, inflation-adjusted wages, manufacturing, private sector, real wages, recovery, Trump, wages, {What's Left of) Our Economy

This morning’s real wages figures from the Labor Department (for December) contained an unusually diverse grab bag of results, and with a presidential election year now officially underway, perhaps the most newsworthy are those that could well affect the race for the White House – and which on balance seem unfavorable to President Trump.

In addition, though, some other results undermine a major belief about how after-inflation paychecks have fared during the current (record length) economic recovery versus its two immediate predecessors.

Not that the news was all bad for the President and his supporters (and anyone else rooting for a stronger American economy). Yes, overall, inflation-adjusted wages in the private sector dipped sequentially for the second time in three months – by 0.09 percent. (The Labor Department doesn’t track real public sector wages because their trends say more about politicians’ decisions than about economic fundamentals).

But if these preliminary figures hold tightly enough, the 2019 year-on-year improvement of 0.64 percent will be higher than 2018’s 0.56 percent increase.

At the same time, wage growth decelerated throughout 2019 – from 0.37 percent between January and June to 0.27 percent between June and December.

Real manufacturing wages fared better, continuing a year-long trend. Month-to-month in December they climbed by 0.18 percent, and their year-on-year increase and improvement were stronger than that of the private sector, too. The latest annual rise was 0.74 percent – up from the previous year’s flatline. And throughout 2019, they increased at the same 0.37 percent rates during both halves of the year.

But the results were less encouraging for non-supervisory workers in both the private sector overall and in manufacturing. By certain measures, paychecks for the lowest paid U.S. workers have been improving faster than those for the workforce overall. And using the Labor Department’s methodology of distinguishing supervisory from non-supervisory workers provides some support for that finding.

For example, on an annual basis, in 2019 and 2018, inflation-adjusted wages increased faster for both non-supervisory manufacturing and blue-collar workers than those wages for all workers, as shown here:

                                     Total private     N/S private     Total mfg      N/S mfg

Year-on-year, 2019:         +0.64%           +0.75%          +0.74%        +0.45%

Year-on-year, 2018:        +0.56%           +1.63%                0%          +1.14%

Yet the table also shows 2018-19 deceleration for both groups.

Moreover, on month in December, real wages for these blue-collar workers performed worse in absolute terms than for all private sector and manufacturing workers – actually falling by 0.21 percent for the former (the biggest decline since October, 2018’s 0.22 percent drop) and increasing by just 0.11 percent for the latter.

And deceleration continued through the year. Between the first and second halves of 2019, constant dollar wages increases for the private sector fell from 0.53 percent to 0.21 percent, and from 0.23 percent to 0.22 percent for manufacturing.

The impact of Boeing’s safety-related woes on aircraft manufacturing per se and on the company’s huge domestic supply chain could explain some of these disappointing figures for industry. But so could the uncertainties created either by Mr. Trump’s tariff-centric trade policies, or by their ragged implementation, or both. Further, as the numbers indicate, real wage weakness isn’t simply a manufacturing problem.

Perhaps most important for Mr. Trump, real wages’ performance during the first 34 months of his term in office (starting with February, 2017, his first full month), have lagged their increases during the most comparable period in Barack Obama’s presidency – his last 34 months in office (ending in January, 2017). Here are the results:

                                       Total private      N/S private      Total mfg        N/S mfg

1^st 34 Trump months:         +2.53%           +2.72%           +0.65%          +2.77%

last 34 Obama months:      +3.50%           +3.97%          +3.05%           +2.97%

Finally, the new real wages data show that when it comes to this gauge, the current economic recovery stacks up unexpectedly well with the two previous expansions where a reasonable amount of statistics exist – for non-supervisory workers. The comparison is especially striking between the current expansion and the 1990s expansion – which is widely viewed as an excellent one for both the economy and America’s employees.

                                                               Private    N/S private    mfg     N/S mfg

1990s expansion (2Q 91-1Q 01):             n/a           +6.37%       n/a      +2.18%

bubble expansion (4Q 01-4Q 07):           n/a            +0.35%       n/a      -2.77%

current expansion (2Q 09 – present):  +6.30%        +6.79%   +1.59%   +3.01%

Unfortunately for President Trump and Trump-ers, though, this longer-term picture isn’t likely to impress voters as much as more recent developments. And when it comes to workers’ after-inflation wages, he clearly has more work to do.

Im-Politic: Another Body Blow for the Trump-as-Phony-Populist Claim

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2016 election, 2020 election, Barack Obama, battleground states, counties, growth, Im-Politic, inflation-adjusted growth, Trump

Back in September, I published a piece challenging claims that President Trump is a phony populist by analyzing government data indicating that a key portion of his 2016 supporters – Americans who had twice voted for his White House predecessor, Barack Obama, before defecting to Trump World – had overall seen highly impressive gains in their annual paychecks under his administration. The evidence came from Commerce Department figures reporting on annual salary trends in the 196 counties that have voted Obama-Obama-Trump in 2008, 2012, and 2016.

Recently, Commerce issued a new set of statistics permitting the issue to be examined according to another gauge – economic growth adjusted for inflation. These numbers reveal a decided Trump payoff for these voters as well and could signal that the President will retain the loyalty of most such flippers during this year’s election.

These new Commerce statistics would be noteworthy alone because they represent the federal government’s first survey of growth on the county level. But they also make clear that, at least through the first two years of Mr. Trump’s presidency, the economies of the “Trump flip counties” on the whole grew faster than they did during the final two years of the Obama administration.

As with my analysis of the county-level salary figures, this examination of the growth figures looks at the periods of the previous and current presidency closest to each other in the current business cycle. Just as I focused on private sector workers in my salary analysis, I focus on the private sector in this growth analysis (because the growth of government, which mainly reflects politicians’ decisions, sheds little light on the health of the economy as a whole).

One difference – whereas the salary analysis looked at figures in pre-inflation dollars (mainly because price-adjusted data weren’t available), these growth numbers all take inflation into account. That matters in part because the “real” figures are the growth numbers that are most closely followed by students of the entire national economy.

According to the Commerce results, total inflation-adjusted growth was greater in the final two Obama years than during the first two Trump years in 84 of the 196 flip counties – or 42.86 percent. The Trump years, however, were better growth wise during these periods for 57.14 percent of these counties.

Another important finding: During the final two Obama years, 27 of these counties saw their economies shrink in after-inflation terms in both of those years. But this plight was suffered by only 14 of the flip counties during the Trump years.

The results were much more even in terms of flip counties whose economies contracted when adjusting for prices during just one of the two final Obama years or just one of the two first Trump years. Eighty-six of the counties experienced economic contraction during one of the two final Obama years while 87 percent of the counties recorded such setbacks during one of the two first Trump years.

The Commerce growth data also suggest that some progress in reducing inequality was made in the flip counties during the first two Trump years – and possibly more than during the last two Obama years.

Specifically, in 2015, 56 of the flip counties outgrew the national private sector average of 3.3 percent in real terms, while two matched this rate.

In 2016, 82 outgrew the national private sector average and two tied it – but that national average had fallen by more than half (to 1.6 percent).

In 2017 – the first Trump year – only 49 percent of the counties grew faster than the national private sector average and two were tied. But that national average had bounced back up to 2.6 percent.

And in 2018, although the private sector’s national growth rate quickened again – to 3.2 percent adjusted for inflation – the number of Trump flip counties topping that performance jumped to 78, with six matching the national average.

The political implications of these findings become obvious – and obviously positive for the President – upon seeing how heavily the Trump flip counties are concentrated in likely 2020 battleground states and how many “winner” flip counties are found there.

Fully 47 of the 196 total flip counties are located in Michigan, Pennsylvania, Wisconsin and Ohio – states carried by Mr. Trump in 2016 and that are considered crucial to this year’s outcome.

In Michigan, the story for the President isn’t encouraging. Only three of its flip counties have grown faster during the first two Trump years than during the last two Obama years. But in Wisconsin and Ohio, growth under the President so far has been faster in 15 of 23 and eight of nine flip counties, respectively. (Only three of Pennsylvania’s counties, interestingly, are flippers – and two of them have grown faster so far during the Trump years.)

In addition, because he only narrowly lost Minnesota in 2016, Mr. Trump’s campaign is targeting the state this time around. With eleven of its 19 flip counties having grown faster under his presidency than during the final two years of his predecessor’s, the effort looks promising.

The new Commerce figures by no means guarantee victory for the President in November. As widely noted, his popularity is relatively low despite voters rating his economic performance highly, signaling that pocketbook issues may not override concerns about his personality, character, and other non-economic matters.

Also, the 2019 numbers won’t be out until after November, and they’re likely to weigh most heavily on the minds of voters who do prioritize the economy. In fact, fully 82 of the flip economies nationally experienced inflation-adjusted economic shrinkage in 2016 – which surely didn’t help Democratic nominee Hillary Clinton’s campaign.

Nonetheless, two major national data sets now point to the conclusion that voting for Mr. Trump in 2016 has been a good bet for the lion’s share of one-time Democrats who switched presidential allegiances that year. And they strongly suggest that, if his rivals hope to use the economy against him this year, they’ll need a more convincing claim than that the President is a phony populist.

Making News: Podcast Now On-Line of a Trade Policy Debate with Obama’s Former Top Economic Advisor

Tags

Barack Obama, China, decoupling, Jason Furman, Jobs, Making News, manufacturing, metals tariffs, Munk Debates, tariffs, Trade, Trade Deficits, trade war, Trump, wages

I’m pleased to start off the New Year by announcing that a podcast is now on-line of a major debate over trade and globalization in which I participated in late this fall.  It was sponsored by Munk Debates – a series of policy exchanges that since 2008 have featured some of the world’s leading thinkers and policymakers in head-to-head events dealing with issues like the future of capitalism, the China threat, the rise of populism, and the emergence of political correctness.

I wasn’t crazy about the clickbait-y title (“Be it resolved, tariffs are terrific.”).  But I say “major” because my interlocutor was no less than Jason Furman, whose previous positions include chief economic advisor to former President Barack Obama. In addition to clashing over various individual on Trump tariffs (e.g., on metals), we also crossed verbal swords over the possibility and desirability of decoupling America’s economy from Chiina.

You can listen to the debate at this link, and given the importance of the subject and the prominence of my opponent, I’d be especially interested in your own reactions.

As usual, moreover, keep checking in with RealityChek for news of upcoming media appearances and other developments.

Im-Politic: Trends that are Trump’s Reelection Friends?

Tags

Adam Schiff, Barack Obama, Bernie Sanders, economy, election 2020, Elizabeth Warren, Gallup, Im-Politic, independents, Jobs, Joe Biden, Kamala Harris, Nancy Pelosi, Trump, Tulsi Gabbard

Don’t look now, but Gallup has just given President Trump two major end-of-the-year gifts in two separate sets of poll results it’s just published. Gift Number One: Mr. Trump this year moved into a tie with his White House predecessor, Barack Obama, as the man most admired by Americans. Gift Number Two: The state of the U.S. Economy, widely viewed as one of the most important determinants of Americans’ votes for President, has faded notably in their minds as a top national concern.

Impeachment, and the nonstop political coverage of Mr. Trump’s alleged wrongdoing, surely have been America’s leading political stories this year. But all the same, the President and Obama jointly headed the list of the country’s most admired man. Better yet for Trump-ers:  The survey was conducted in early December, so respondents had lots of time to digest the impeachment drama. And the possible icing on the cake – the tie was produced by a one percentage point reduction in the Obama score from 2018 (when he won this contest – and for the twelfth time!) and a five percentage point rise in the Trump score.

Further, although trend data isn’t available, Mr. Trump was named most admired by 10 percent of independents. That figure trailed the Obama total (12 percent), but not by much. And the former President won’t be on any ballots this year. 

The results for some of the President’s other major opponents and critics are bound to cheer him, too. House Intelligence Committee Chair Adam Schiff, the California Democrat who’s helped spearhead the impeachment drive, increased his score from 2018 – but only by less than one percent to one percent. House Speaker Nancy Pelosi also rose in the poll – but only from one percent to two percent.

As for the group of Democratic contenders for Mr. Trump’s job, the best performers in this survey were Vermont Independent Senator Bernie Sanders, Massachusetts Senator Elizabeth Warren, Hawaii House Member Tulsi Gabbard, and California Senator Kamala Harris (who recently dropped out). Yet they all garnered only one percent of Americans’ votes. Nonetheless, all did better than former Vice President Joe Biden, whose backers for this title declined from one percent in 2018 to less than one percent this year.

As for the economy, since the global financial crisis produced the Great Recession starting at the end of 2007, it’s been rated as “the most important problem in the U.S.” in Gallup surveys seven times (the last coming in 2016). In addition, “jobs” was mentioned among the top four most important problems nine times. (I find it odd that the two are presented separately by Gallup as well.)

But since the Trump inaugural, the economy has vanished from the ranks of the top four national problems, and the only appearance made by jobs was in 2017 (when it came in fourth).

Even if polling was more of a science than an art, none of these results would guarantee President Trump’s reelection. One potential trouble spot: During each of his years in office so far, “government” has topped Americans’ lists of the country’s most important problems. The Gallup results indicate that respondents assign about equal blame for Washington dysfunction to Mr. Trump and the Republicans in Congress on the one hand, and to the Democrats in Congress on the other. But during the Trump administration, the percentages prioritizing this concern have risen overall from previous levels – and markedly.

The big takeaway for me is that if the President turns and keeps his focus to at least a reasonable extent on substantive issues like the economy, and shoots off fewer dumbbell and wholly unnecessary tweets and remarks (here’s a prime recent example), and if no new misconduct-related bombshells emerge, he’ll calm the nerves of the independents he needs to win back from their 2018 defection to the Democrats, in particular relieve their Trump Exhaustion Syndrome, and win reelection pretty handily. The big fly in this ointment, of course, is that the above prescription so far has never been followed by Mr. Trump.

Our So-Called Foreign Policy: A China Fork-in-the-Road Coming for America First-ers?

Tags

allies, America First, Barack Obama, China, deterrence, East Asia, globalism, industrial policy, Marco Rubio, national security, North Korea, nuclear deterrence, Our So-Called Foreign Policy, South Korea, Trade, tripwire, Trump

Something’s been bothering me for some time about the way that the national debate over dealing with China has been evolving.

Don’t get me wrong – it’s been great to see the major shift in the conventional wisdom since President Trump took office toward genuine recognition that the People’s Republic poses major economic and national security threats to the United States, that many of these threats are closely related, and that they have to be dealt with both on the economic and national security policy fronts.

That’s tremendous progress from the pre-Trump – and globalist – consensus that greater U.S. economic engagement with China was promoting more economic and political freedom in China, and more peaceful international behavior (or definitely would in some indefinite future), and that any dangers emanating from Beijing in the national security sphere are best coped with by increasing America’s military presence in East Asia (e.g., former President Barack Obama’s “pivot to Asia,” largely rhetorical though it was), cooperating more closely with the country’s allies in the region, or some combination of the two.

You don’t have to be an avid follower of world affairs to realize that the sharp distinction drawn by this globalist consensus between China economic and China national security policy was already producing a mind blowingly idiotic result: Washington was still resolving to resist any expansionist ambitions of Beijing’s in East Asia while continuing to help send China’s way floods of money and defense-relevant technology bound to turn into formidable military equipment that U.S. and other allied forces would face if conflict broke out.

Further, as I began pointing out years ago, because of the impressive progress made by both China and North Korea in developing intercontinental-range nuclear weapons, the globalist approach was exposing the American homeland to an ever increasing threat of nuclear attack – and mainly because even the U.S.’s wealthiest regional allies refused to field the (admittedly) expensive conventional military forces that could repel aggression from Beijing or Pyongyang without American help.

So everyone should be encouraged by the growing, bipartisan support for limiting the flow of U.S. resources and technology to China – even though many allegedly converted globalists continue hoping in vain that this goal can be achieved without setting limits (like tariffs) on trade and investment between the two economies.

My problem? Many of the new China hawks (and the leading example here is Florida Republican Senator Marco Rubio, who deserves considerable credit for his out-front role waking up other conservatives to the need for changing course on China) apparently believe that new U.S. trade, investment, and technology transfer curbs are mainly needed to shore up America’s decades-long position as the national security kingpin of East Asia. In other words, they’re hoping that America First-type China economic and technology policies can buttress globalist East Asia policies.

Maybe they’re right.  And if they succeed, it will at least become less likely that American troops will be killed in battle by Chinese weapons developed with dollars and knowhow from the United States.

Unfortunately, too much of the nuclear danger to the United States will remain in place – because the free-riding instincts of America’s East Asian allies inevitably will be reinforced. That is, the more confident they stay in America’s determination to protect them, the less military effort they’ll feel the need to make, and the longer U.S. military forces in places like South Korea will be needed to play tripwire roles – deterring aggression due to their vulnerability to attack and the chances that their imminent destruction will pressure a U.S. President to save them with nuclear weapons use that could trigger a similar retaliatory strike on the United States.

As I’ve written repeatedly, because taking every step possible to prevent a nuclear weapon from landing on American soil should be a much higher priority for Washington than protecting free-riding allies, it’s best for the United States to pull its troops back from the front-lines in East Asia and force its allies to defend themselves. And if this means okaying their own decisions to build nuclear forces, fine with me. I’d also sell them any conventional weapons they’re seeking – which would achieve the added benefit of improving American economic growth and employment.

Does this mean that an America First China policy would or should lack any national security dimension? Not at all. For as I first explained in this recent interview, staying ahead of China technologically will stay imperative for the United States to protect itself from the kinds of cyber-attacks Beijing is already capable of waging and has probably been sponsoring. And the threat is hardly limited to the hacking of U.S. government agencies or private businesses that originates from China. The more Americans (including individual Americans possessing valuable knowledge) use Chinese technology products because these goods have become the world’s best or cheapest, the more their privacy will be vulnerable to Chinese surveillance and ultimately blackmail. The advanced telecommunications equipment produced by Huawei is of course the most important example so far.

There’s another technology-based national security issue that purist America First-ers of my ilk need to deal with as well, and one that I haven’t sufficiently thought through. Nothing’s changed my mind about the United States being a big net loser from trade with East Asia, or about how it can retain the clout if needs in the solely from its role as a final consumption market these export-dependent economies will desperately need.

But thanks largely to failed globalist trade policies, most of the world’s semiconductor manufacturing capacity and capability is now located in East Asia – particularly in Japan, Taiwan, and South Korea. It may be tempting to believe that these countries will become more resistant to China’s power if the United States withdraws militarily from the region. But prudence counsels against simply assuming the best.

So as America First leaders start and keep offering these countries all the military hardware they need to rebuff Chinese advances, they will also need greatly to step up efforts to restore U.S. self-sufficiency in these key building blocks not only of high tech industry, but increasingly of all high value manufacturing and services. (To their credit, Rubio and some other new China realists also understand the need for redoubled American industrial policy efforts to achieve these goals.)

Attempts to reorient U.S. foreign and trade policies in America First directions are still at such an early stage that concern about these differing emphases might look premature. But events have a way of forcing major decisions much earlier than expected – either because crises erupt sooner, or because lead-times to implement new strategies can be longer, than is convenient. So all America First-ers should agree at least agree that the earlier this potential division in America First ranks is addressed, the better.

(What’s Left of) Our Economy: Trump’s Real Wage Record Still Needs More Work

Tags

Barack Obama, inflation adjusted wages, Labor Department, manufacturing, private sector, Trump, wages, {What's Left of) Our Economy

The new after-inflation wage figures released this morning by the Labor Department (that bring the story, preliminarily, through November) show that workers’ price-adjusted take home pay remains a feature of President Trump’s economic record that still needs work.

This conclusion comes through loud and clear from the table below. It shows the real hourly wages changes over various periods of time for all private sector workers (Labor doesn’t track public sector wages, since they’re largely set by politicians’ decisions, and therefore say little about the underlying state of the economy), for private sector “production and nonsupervisory” workers (let’s call them “blue-collar” for short) and for all manufacturing and blue-collar manufacturing workers.

                                                                           All workers      Blue-collar workers

November m/m private:                                      0 percent           +0.11 percent

November m/m manufacturing:                      +0.09 percent           0 percent

November y/y private:                                   +1.11 percent         +1.72 percent

November y/y manufacturing:                       +1.02 percent        +1.81 percent

private 1^st 33 Trump months:                         +2.62 percent        +3.16 percent

manufacturing 1^st 33 Trump months:             +0.46 percent        +2.54 percent

private last 33 Obama months:                      +3.69 percent        +4.07 percent

manufacturing last 33 Obama months:          +3.35 percent       +3.46 percent

private since current recovery onset:             +6.40 percent       +7.24 percent

manufacturing since recovery onset:             +1.40 percent       +2.77 percent

The short-term trends look pretty good. In particular, the difference between the latest annual increase in constant dollar private sector wages (1.11 percent) and the increase during the first 33 months of the Trump administration (2.62 percent) makes clear that the last year has a greater average monthly rate of improvement (0.93 percent) than the entire period (0.79 percent). Therefore, there’s been a modest acceleration in real wage increases. (I consider February, 2017 the current administration’s start month, since President Trump was inaugurated on January 20.)

The picture has been even brighter for blue-collar workers, with the average monthly rates of increase standing at 1.56 percent over the last year and (0.96 percent) for Mr. Trump’s entire term in office.

Price-adjusted manufacturing wages have grown slower so far during this Trump term than private sector wages, but acceleration is evident here, too. In fact, it’s been even faster. For all manufacturing workers, after-inflation wages have risen over the past year by an average of 0.85 percent per month. Since Mr. Trump’s inauguration, though, this rate has been only 0.14 percent.

And although also at lower absolute levels of increase, the wage increase pickup has been greater for manufacturing’s blue-collar workers as well – an average monthly gain of 1.51 percent over the last year versus one of only 0.77 percent for the President’s entire tenure.

So what’s the problem? It’s that this wage performance for all categories of workers pales before that from the best comparable Obama administration period – its final 33 months. And the biggest gap has been in manufacturing, for both the total and blue-collar workforces.

It’s entirely possible, as I’ve noted, that the worse record during the Trump years could be due to employers of all kinds, including manufacturing, being forced during a time of super-low joblessness to start hiring workers they’d have never considered before – because they’d likely be so unproductive, at least at first. It’s also entirely possible that this development will yield big long-term benefits for the entire economy. And if it’s true, this thesis would be terrific news for those new workers at first.

But such fine points are even more likely to be ignored or downplayed during an election year than they are normally. Which means that without major progress in the months ahead, Mr. Trump had better hope that his Democratic rivals ignore the details of the wage figures as thoroughly as the media typically do.

Im-Politic: Another Possible Impeachable Offense: The Globalists’ Afghanistan War

Tags

Afghanistan, Barack Obama, Craig Whitlock, George W. Bush, globalism, House Judiciary Committee, Im-Politic, impeachment, jihadism, Matt Gaetz, nation-building, Presidents, terrorism, Washington Post

It almost looks providential that within 48 hours, all these events transpired:

>The House Judiciary Committee continued its hearing on impeaching President Trump;

>Florida Congressman Matt Gaetz, a Republican Judiciary Committee member suggested that former Presidents can be impeached; and

>The Washington Post began publishing a lengthy series documenting literally decades of official U.S. government deceit – including by former Presidents – surrounding the 18-year long war in Afghanistan.

It looks providential because if Gaetz is right (and, at least according to this analysis, there’s no legal consensus yet on the matter), it’s tough to think of more important abuses of power than the flood of dishonestly upbeat statements issuing from the administrations of George W. Bush and Barack Obama about encouraging progress on the military and nation-building fronts in that protracted and ongoing conflict.

After all, the consequences of such abuses weren’t simply a short delay in providing military aid to a country (Ukraine) whose security and independence weren’t seen as remotely vital U.S. concerns even during the Cold War. Instead, according to Pentagon and other figures the Post cites, the war’s toll so far has included:

>2,300 dead American servicemen

>20,589 wounded in action

>Nearly one trillion taxpayer dollars – an inflation-adjusted figure that doesn’t include expenditures by the intelligence community and the costs of caring for wounded veterans.

It’s true that some of these casualties and spending date from the early years of the war – when no serious person can doubt the need to intervene militarily in Afghanistan to destroy its potential to serve as a terrorist base for planning and launching September 11-style terrorist attacks. But the vast majority date from the long years after the ouster from power of the Taliban and the destruction of Al Qaeda.

At that point, it should have been clear that the best American strategy for preventing the reemergence of jihadist organizations with global reach was maintaining small-scale special forces operations in the country that would focus on harassing extremists effectively enough to keep them off balance and incapable of organizing large-scale inter-continental violence. Stronger border security measures could also help keep them away from the U.S. homeland.  Instead, U.S. leaders embarked on campaign to nation-build in a region that historically has been so divided that no true nation had ever existed. 

(Actually, I first publicly critiqued the focus on nation-building in Afghanistan and touted the need for better border controls at a 2002 Washington, D.C. policy conference summarized here.  It wasn’t till 2014, however, when ISIS had replaced Al Qaeda as the main Middle East terrorist threat to the United States, that I first wrote about the need for harassment forces.)   

But the Bush and Obama administrations ignored this advice because they had drunk the globalist Kool-aid insisting that overseas threats can be dealt with adequately only by literally turning troubled parts of the world into the political, economic, and social successes that they have never been. These Afghanistan policies per se weren’t high crimes or misdemeanors – unless you favor criminalizing stubbornness persistent and extreme enough to qualify as stupidity.

What was arguably criminal? As documented by Post reporter Craig Whitlock, even though the documents (which exist because of a federal research project undertaken to analyze failure in Afghanistan) make clear widespread official recognition of the debacle on the ground, they “contradict a long chorus of public statements from U.S. presidents, military commanders and diplomats who assured Americans year after year that they were making progress in Afghanistan and the war was worth fighting.”

And more to the point: “Several of those interviewed [by the project’s researchers] described explicit and sustained efforts by the U.S. government to deliberately mislead the public. They said it was common at military headquarters in Kabul — and at the White House — to distort statistics to make it appear the United States was winning the war when that was not the case.”

I’ve only read Whitlock’s summary articles about the documents, not the documents themselves, but undoubtedly if he’d found evidence that Bush and Obama personally knew about the distortion efforts or, worse, ordered them, he’d have reported it. At the same time, determining Presidential guilt wasn’t the government research project’s mission. In fact, although the Post is still suing the government for release of the names of the more than 400 “insider” interview subjects whose statements represent most of the raw material gathered by the researchers, it’s not clear whether the two former Presidents were among them. Moreover, it appears that not all the documentary evidence produced by the project has been released, either with names attached or not.

So the question made famous by the late Tennessee Senator Howard Baker during 1973 Watergate hearings – “What did the President know, and when did he know it?” – can legitimately be asked about Bush and Obama. Any answers eventually shaken loose in impeachment or similar investigations will be too late to undo the enormous damage of the Afghanistan war to date. But they might hasten a decision by Mr. Trump finally to act on his instincts and cut the nation’s losses. More important, the prospect of sitting at a witness table might persuade future Presidents to be far less reckless when they spend America’s blood and treasure.

(What’s Left of) Our Economy: U.S. Growth Takes a Bubbly Turn

Tags

Barack Obama, bubble decade, Financial Crisis, GDP, gross domestic product, housing, inflation-adjusted growth, personal consumption, real GDP, Trump, {What's Left of) Our Economy

As encouraging as last week’s official report on U.S. economic growth was – with the rate picking up even more than expected in the second quarter despite numerous forecasts of continued and even worsening slowdown – one big fly was visible in this ointment. The quality of the nation’s expansion has been weakening considerably this year, and as known by RealityChek regulars, growth overly dependent on the wrong engines can inflate the kinds of bubbles that burst so disastrously a decade ago, and triggered a frightful global financial crisis and a deep, punishing recession.

The specific internals of these reports on the gross domestic product (GDP) to track for signs of bubble-ization are personal consumption and housing. For their bloat provided most of the hot air during the 2000s (along with most of the actual growth). And the GDP report for the third quarter of this year (the most recent data available), as was the case since the second quarter, showed that these two GDP elements have driven growth much more powerfully than during that deceptively prosperous era. Further, during the last two quarters overall, growth has looked far bubblier by this measure than at any time during former President Barack Obama’s administration, with one exception. In fact, the second quarter of this year was the bubbliest ever. (More specifically, since 2002, when government figures enabled these calculations to be made.)

The table below shows the actual annual figures from 2002 through 2018 (leaving out only the recession years 2007-2008, and 2008-2009). The left-hand column shows how much total inflation-adjusted growth (the growth rate most closely followed by students of the economy) in each year was fueled by growth in personal consumption plus growth in housing. The center column shows the annual after-inflation growth rate for that year. And the right-hand column shows the difference between that toxic combination’s growth rate, and growth itself.

That ratio is important because it helps makes clear the relationship between growth’s health on the one hand and its rate on the other. Put differently, it makes possible answering the question of whether and when the U.S. economy has been growing acceptably without excessive contributions from the toxic combination.

                      percent of growth       actual growth rate          difference

02-03:                     91.11%                     2.86%             31.86 times greater

03-04:                     74.65%                    3.80%              19.64 times greater

04-05:                     79.25%                    3.51%              22.58 times greater

05-06:                    58.86%                     2.86%              20.58 times greater

06-07:                    27.01%                     1.88%              14.37 times greater

09-10:                    43.77%                     2.56%              17.10 times greater

10-11:                    82.80%                    1.55%               53.42 times greater

11-12:                   59.64%                     2.25%               26.51 times greater

12-13:                   71.58%                    1.84%               38.90 times greater

13-14:                   83.80%                    2.54%               32.99 times greater

14-15:                   96.58%                    2.91%                33.19 times greater

15-16:                127.04%                    1.64%               77.46 times greater

16-17:                  81.13%                    2.37%               34.23 times greater

17-18:                 69.55%                     2.93%                23.74 times greater

One conclusion that leaps out from these results: They bounce around considerably. But they show that growth during the Obama years was somewhat bubblier than during the previous and notorious bubble decade (even leaving out the huge jump in 2015-16), and that its health from that anomalous year steadily improved during the first two years of the Trump administration.

Especially noteworthy: The best Trump growth year (2017-18) was significantly less bubbly than the best Obama year (2014-15) even though that Trump year saw somewhat faster growth.

But what a turnaround since then! As the table below shows, major growth quality improvement continued into the first quarter of this year. Was the economy finally demonstrating the ability to grow strongly by using much safer engines? Unfortunately not, as growth’s quality simply collapsed in the second quarter, and even the third quarter improvement registered so far has kept it in the danger zone. 

                       percent of growth           actual growth rate           difference 

1Q 19:                   24.62%                            3.06%              8.05 times greater

2Q 19:                 150.42%                            2.00%            75.21 times greater

3Q 19*                102.70%                            2.11%            48.67 times greater

*still preliminary

On a standstill basis, the economy lately has looked bubblier than at any time during the Obama years, and in fact is approaching its bubble decade condition. During that period, personal consumption and housing combined regularly stayed above 73 percent of real GDP. Its annual peak came in 2005 – 73.50 percent.

The toxic combination’s share of the economy fell fairly steadily thereafter until 2012 – as did the growth rate itself – and then began rising again (while growth itself continued to slump) from 70.62 percent to 72.58 percent in 2016.

The trend continued into 2017 (72.96 percent) before the percentage dropped the following year to 72.69 – as growth itself picked up.

After falling further in the first quarter of this year (to 72.35) as growth itself rose further, the toxic combination’s role swelled to 72.90 percent in the third quarter – not far off the bubble decade levels. Unfortunately, growth itself has tailed off dramatically to 2.11 percent annualized.

Overall, the Trump economy still remains less bubbly

than the Obama economy. For the 32 months during which the former President was in charge of economic performance, the toxic combination generated 80.74 percent of total growth. During the nine months of Mr. Trump’s economic stewardship, that figure stands at 72.64 percent. But the gap has been closing this year, and as long as it keeps narrowing, President Trump’s economic legacy will remain very much up in the air.

Our So-Called Foreign Policy: Time to Test U.S. “Allies” on China

Tags

allies, America First, Asia-Pacific, Barack Obama, China, Emmanuel Macron, EU, European Union, France, globalism, Our So-Called Foreign Policy, RCEP, Regional Comprehensive Economic Partnership, TPP, Trade, Trans-Pacific Parternship, Trump

President Trump’s globalist critics in the foreign policy Blob (the Washington, D.C.-centered complex of former diplomats and military officers, genuine academics, think tank hacks, and their Mainstream Media mouthpieces) think they’ve uncovered major new proof that the administration’s America First-type foreign policies and trade policies are failing catastrophically. Actually, the developments they’ve seized upon make clearer than ever the dangerous folly of their own outdated strategies, and the urgent need for a Trump-ian course change.

What’s gotten the globalists excited: Reports that America’s allies the world over are turning their backs on Washington and either moving into China’s orbit or cultivating better relations with the People’s Republic.

In the Asia-Pacific region, fifteen countries, including American treaty allies Australia, Japan, and South Korea, have decided to join the Regional Comprehensive Economic Partnership (RCEP) – a Chinese spearheaded trade agreement that doesn’t include the United States. Although Washington is apparently free to join, RCEP’s progress is seen as a big defeat for the United States, and for Mr. Trump in particular, because for years Beijing has been pushing it as an alternative to the Asia-Pacific-focused Trans-Pacific Partnership (TPP) deal signed by former President Barack Obama but nixed by President Trump on his first full weekday in office.

TPP was touted as a counter to RCEP that was vastly preferable for the United States because its protections of the environment and labor rights, and its curbs on state-owned enterprises, created standards that China could not hope to meet any time soon. Therefore, the agreement allegedly represented both a means of containing Chinese power and a powerful inducement to the kinds of Chinese reform long sought by Washington (and at least nominally sought by the President).

In other words, it supposedly was a globalist masterstroke that was foolishly trashed by Mr. Trump. And he’s now getting his richly deserve comeuppance via the Chinese-developed RCEP, which, it’s said, doesn’t address the above issues nearly as effectively as TPP, but which has nonetheless attracted many other signatories also spurned by the Trump rejection.

As known by RealityChek regulars, the anti-China case for TPP was bogus from the start, along with its claims to promoting the kinds of reforms throughout the Asia-Pacific region that would benefits American exporters. For the agreement contained a wide open backdoor for numerous products with high levels of Chinese content, which would have enabled Beijing to realize many of TPP’s benefits without incurring any of its obligations. Nearly as bad, for all their lofty ambitions, those obligations would have been impossible for Washington to monitor and enforce adequately, as most signatory governments’ bureaucracies, along with their national industrial bases, were too large (and in the case of the governments, secretive) to track.

Moreover, these glaring TPP weaknesses raise questions that hardly strengthen confidence in globalist views both of the agreement and, just as important of U.S. Allies. Specifically, TPP’s China back door and verification shortcomings weren’t exactly secrets. And they surely reveal that the Australias, Japans, and South Koreas of the world were never very interested in containing China or pressuring it to reform in the first place. The decision of these countries to go along with an RCEP that doesn’t even try seriously to achieve these goals casts even deeper doubt on their reliability for any future American efforts to work multilaterally to cope with China.

And as for the inevitable counter-argument that the Trump TPP pullout gave these Asia-Pacific countries little choice but to accept a second-best deal more advantageous to Beijing, it doesn’t withstand scrutiny. After all, all these countries had years to work with the George W. Bush and Obama administrations to develop regional trade arrangements that could realistically hope to achieve their intertwined China and reform objectives. They all (along with those globalist Presidents) completely blew the opportunity.

On the other side of the world, the Associated Press has just reported on a similar shift by the European Union, that huge economic bloc that also contains many countries allied with the United States through the North Atlantic Treaty Organization. In an article titled “Europeans look to China as global partner, shun Trump’s US,” correspondent Sylvie Corbet wrote that “When France’s president wants to carry European concerns to the world stage to find solutions for climate change, trade tensions or Iran’s nuclear ambitions, he no longer calls Washington. He flies to Beijing.”

She added that on his recent visit to Beijing, Emmanuel Macron “portrayed himself as an envoy for the whole European Union, conveying the message that the bloc has largely given up on Trump, who doesn’t hide his disdain for multilateralism.”

In the process, though, the author made a powerful, if completely unwitting, case for American unilateralism. For according to Corbet, Macron and Chinese dictator Xi Jinping “issued a ‘Beijing call’…for increased global cooperation in fighting climate change and better protecting biodiversity. Both countries have deplored the U.S. withdrawal” from the Paris climate change accord.

Macron apparently stood by as Xi “said the two leaders were sending ‘a strong signal to the world about steadfastly upholding multilateralism and free trade, as well as working together to build open economies.’”

And for good measure, the French president touted China’s record of helping to reduce tensions in the Persian Gulf, and potential contributions to using diplomacy to persuade Iran to return to full compliance with the nuclear proliferation deal rejected by Mr. Trump. In addition, he touted China’s ability to help “develop stable and cooperative trade rules at the international level.”

To which the only serious reply from the American standpoint is, “If Macron and anyone else in Europe really believe this nonsense, and assume that they’re better off aligning with China than with the United States, then America is better off without them.” And this holds not only for trade but for security issues like Iran.

It’s been unconvincing enough for globalists to insist that the United States has no choice but to maintain alliances with countries famous for being defense deadbeats and free-riders, and fence-sitters in the campaign to create a truly open world economy (as opposed to one that winks at all instances of protectionism except America’s). But it’s positively goofy for globalists to claim that these countries would be strong and active supporters of security or economic goals compatible with U.S. and traditional free world interests if only President Trump showed more patience with them.

Of course, it’s possible – and perhaps likely – that these Asian and European moves are ultimately bluffs aimed at curbing Mr. Trump’s perceived worst excesses. But it’s at least as possible that these countries hope to create pressure on the President to accept their longstanding, “Heads we win, tail you lose,” strategy vis-a-vis the United States.

All of which reminds me of episodes when I was little, and blurted out remarks like, “I’m going to run away.” My parents often replied, “Is that a promise or a threat?” That sounds to me like a necessary and indeed long overdue U.S. response to its worrisomely feckless allies.