Im-Politic: Bad Polling News for Both Biden and Trump

Tags

Associated Press, Biden, conservatives, Donald Trump, election 2022, election 2024, GOP, Im-Politic, independents, Laura Ingraham, Morning Consult, National Opinion Research Center, NBC News, Politico, polls, Republicans

A major shift in American politics may be in the works according to some recent polling results about President Biden and Donald Trump. Specifically, they could mean that the American public has had it with both of them.

Let’s start with the President’s results…since he’s the President. Astonishingly, no fewer than three surveys during the last week show not only that his popularity and job approval are way down, but that huge and in one case slightly growing percentages of the public doubt his overall mental fitness to handle his job.

Two days ago, Politico and Morning Consult consult released survey findings reporting that only 22 percent of all registered voters “strongly agree” that Mr. Biden “is mentally fit,” 18 percent “somewhat agree,” 12 percent “somewhat disagree,” and 37 percent “strongly disagree.” So a plurality (49 percent) are in the “disagree” camp (versus 40 percent agreeing that the President is mentally fit), and the most popular answer, by 19 percentage points, was “strongly disagree.”

Of course there was a partisan split. But when it comes to political independents, those who overall disagreed that President Biden is mentally fit outnumbered those that agreed by 48 percent to 37 percent, with 33 percent choosing “strongly disagree.”

More worrisome for the President: Politico and Morning Consult asked the same question in November, and since then, those disagreeing that he’s mentally fit has inched up from 48 percent to 49 percent, and those agreeing that he’s mentally up to snuff has fallen from 46 percent to 40 percent. About the same deterioration appeared among independent voters.

Similarly, a poll this week from NBC News asked American adults (a group somewhat different than registered voters) how they would rate various Biden traits on a scale of 1 to 5 with 1 being “Very Poor” and 5 being “Very Good.” No party affiliation-based findings were provided. But on “Having the necessary mentally physical health to be president,” here are the Biden scores:

5: 18 percent

4: 15 percent

3: 16 percent

2: 9 percent

1: 41 percent

In other words, 4 and 5 (those believing Mr. Biden is mentally and physically healthy enough) add up to 33 percent. One and 2 (those who don’t) add up to 50 percent. And “Very Poor” leads the pack by a mile.

The Associated Press (AP) and National Opinion Research Center (NORC) reported better views of the President’s capacities – but not much. Here the question (again, for adults) was “How confident are you that Joe Biden has the mental capacity to serve effectively as president?” There was no political affiliation breakdown here, either, but here are the results:

“Extremely confident”:   11 percent

“Very confident”:            17 percent

“Somewhat confident”:   25 percent

“Not very confident”:      18 percent

“Not at all confident”:     29 percent

AP-NORC concluded that those lacking confidence in Mr. Biden’s mental fitness outnumbered those with confidence by 47 percent to 28 percent – figures not far off those published by NBC News. And once more, the biggest individual category contained those with the least confidence.

The news isn’t any better for the former President, though. Since early this year, I’ve been trying to keep track of whether Republican and Republican-leaning voters are more loyal to their party, or to Trump. And the new sounding from NBC News makes clear that Trump has been losing ground on this score.

As the survey reports, since January, 2019, although the results fluctuated some, the “supporter of Trump” position consistently registered a plurality and often a majority. (Those answering “both” never made it out of the single digits as percents of the whole sample.) Even last January (not a great month for Trump politically or in any sense), the “supporters of Donald Trump” and “supporters of the Republican Party” were tied at 46 percent.

But as of today? The percentage of “Republican supporters” topped that of “Trump supporters” by a whopping 56 percent to 36 percent. That’s the biggest such margin ever in this data series.

One other (non-poll) possible straw in the wind worth noting in this respect. In a magazine interview this month, Fox News talker Laura Ingraham said that “I’m not saying I’m there for him yet,” when asked if she would endorse a 2024 Trump presidential bid.

As is well known, Ingraham remains a fervent backer of Trump’s presidential record and policies, as well as an admirer of the former president personally. Less well known – Ingraham was dissenting in a Trump-ian/populist way from the old Republican Party orthodoxy for several years before Trump declared his first White House candidacy, especially on China-related issues. Given her wide following, that’s a clear signal that what’s been called Trump-ism without Trump is a distinct possibility for the Republican future.

But on the subject of the future, the worst news for both the President and his predecessor came from the AP-NORC survey. By a gaping 70 percent to 28 percent margin, respondents didn’t want Mr. Biden to seek reelection. That was almost identical to the 72 percent wanting Trump to stay on the sidelines and only 27 percent supporting a third White House bid.

We’re still very early in political cycle for this year’s Congressional elections, much less the 2024 presidential race. But so far, the polls are saying pretty clearly that Americans want new faces to choose from when they next choose a Chief Executive – and pretty ardently.

(What’s Left of) Our Economy: The Greatest Presidential Job Creator Ever?

Tags

Biden, Bureau of Labor Statistics, CCP Virus, coronavirus, COVID 19, Donald Trump, Employment, Jobs, lockdowns, NFP, non-farm payrolls, reopening, Wuhan virus, {What's Left of) Our Economy

However unwittingly, President Biden rendered the nation a major public service on Friday with his remarks on his administration’s achievements in boosting American job creation. Specifically, he provided a good indication of how many ways and how dramatically economic data can be spun.

According to the President, “we have added 6.4 million new jobs since January of last year — in one year. And that’s one of the most — that’s the most jobs in any calendar year by any president in history.”

A look at the data provided by the U.S. Bureau of Labor Statistics (BLS) shows that Mr. Biden actually slightly understated calendar 2021 overall net new job creation. Non-farm payrolls (BLS’ definition of the American employment universe) increased by 6.448 million during this period.

Mr. Biden’s focus on the calendar year, however, means that he’s taking credit for January. Not only wasn’t he inaugurated until January 20, but each month’s BLS job increase numbers cover the period between the middles of each month. (See the “Technical Note” section of each month’s report.) So the January job creation he’s claiming as his own stopped days before he entered office.

If it’s assumed that the current administration’s impact on employment (and the rest of the economy) didn’t start until the President took the Oath of Office – on a monthly basis, in February – then the employment increase that’s taken place on his watch so far is 6.215 million. That’s nearly 200,000 less than he claimed.

There’s no question that the employment picture orders of magnitude better than that of the last calendar year of the Trump administration – when non-farm payrolls cratered by 9.416 million.

At the same time, that calendar year includes the depths of the steep economic downturn induced by the CCP Virus’ arrival in the United States. In March and April, American employment levels crashdove by a sickening 22.362 million. And as should be remembered, including by those who view the Trump response to the pandemic itself as disastrously bad, this employment calamity mainly stemmed not from Trump economic policy decisions that presumably were inferior to their Biden administration counterparts. They mainly stemmed from health-related economic and behavioral restrictions that the former President supported only belatedly and reluctantly.

In fact, once the economy began reopening (raggedly, to be sure), job creation skyrocketed. From April, 2020 through January. 2021 – bringing the story up to just about the end of Trump’s presidency – NFP rose 12.575 million. That’s twice as much in absolute terms in nine months as in Mr. Biden’s 11 months in office.

As implied, though, this rapid improvement wasn’t mainly Trump’s doing. Clearly, economic stimulus measures helped. But far more important was a reopening and highly uneven return to economic normality. Moreover, because of the federal government’s limited authority over issues such as whether businesses closed altogether, or operate during limited hours, or how their customers should behave, the reopening decisions were overwhelmingly taken at the state and local level.

But as known by RealityChek regulars, President Biden’s remarks ignore a more fundamental concern: The kinds of absolute increases touted by President Biden are far from the whole story when it comes to judging economic performance, and can profoundly mislead even factoring out the whopping distortions of the economy created by the CCP Virus. At least as important are relative increases (or decreases) – in this case, because the size of the American workforce keeps changing.

And when the Biden job creation record is presented in terms of percentage increase, it doesn’t look so extraordinary at all. The Washington Post‘s Andrew Van Dam put it perfectly yesterday:

“The 6.4 million jobs gained this year, while a record in absolute terms, represents only a 4.5 percent increase in the workforce. That’s smaller than the 5.0 percent growth seen in 1978, when a much smaller labor force added 4.3 million jobs. In fact, relative to the size of the workforce, it’s only the 11th best calendar year since record-keeping began in 1939.”

Biden’s boasts about the economy certainly aren’t the first issuing from the Oval Office. Indeed, they’re no more exaggerated than TrumpWorld’s repeated claims that, pre-virus, he “helped America build its strongest economy in history.” But they’re also a needed reminder that whoever’s in office – a Democrat or Republican, an establishmentarian or a disrupter – their economic pronouncements are bound to deserve some Pinocchios.       

Im-Politic: A Year After

Tags

Biden, Capitol assault, Capitol riots, China, Constitution, Democrats, Donald Trump, election 2024, GOP, Im-Politic, Immigration, impeachment, January 6, January 6 committee, Populism, Republicans, Trade

Tomorrow is the first anniversary of last January 6’s Capitol riot, and it’s also when we’ll see the new monthly U.S. trade figures (which I’m really anxious to cover). So I figured I’d post today on what to me is the most fascinating and important development stemming from that day’s tumult:  Contrary to my expectations, the impact on American elective politics has been pretty slight so far and may well stay minimal. And that includes on the question of Donald Trump’s political future.

Before starting the political analysis, let me recap my main views on the actual events of January 6, the run up to them, and their immediate aftermath.

First, anyone who forced their way into the Capitol building, or even past the security barricades then erected around its perimeter, should be punished severely. Ditto for anyone who planned these actual attacks, and anyone illegally present in the building or anywhere on the Capitol grounds who resisted arrest and/or destroyed property.

Second, anyone illegally inside the building who didn’t act violently should be punished, too, though less severely (for reasons explained nicely by CNN here and here). For even if they just wandered in once the entrances were left unguarded, it should have been obvious from the chaos and violence they must have seen and/or heard that something was very wrong. Moreover, it’s a well established principle that ignorance of the law (in this case, trespassing on government grounds) is no defense.

Third, I see no valid argument for going after individuals who were simply present on the Capitol grounds outside the building and stayed outside, and even less of a case for action against those who simply attended the Trump rally that preceded the attack. And this includes actions taken by public or private employers.

Fourth, too many important, disturbing, and unanswered questions about Capitol security procedures and preparations remain unanswered. Principally, why weren’t the big metal doors on the Capitol’s ground level closed immediately after it became obvious that a crowd was milling about that included folks with bad intent? And why was the security presence so light to begin with?

Fifth, Nothing said by Trump at the rally qualified in legal terms as incitement to riot. Consequently, that argument for impeachment and removal was always bogus. Another argument was stronger, but in my view still inadequate – Trump’s delay (which I described as “reckless”) in urging the Capitol breachers to cease and desist at once, and in condemning their actions. It’s inadequate because it was a delay (in carrying out his Constitutional duties to “take Care that the Laws be faithfully executed”), not a refusal or a failure.

It’s possible that the investigations into the January 6 events by the (Biden) Justice Department or Congress’ January 6 committee might uncover stronger evidence of Trump culpability on any of these counts. But we simply haven’t arrived at that point yet.

These positions led to the three main political conclusions I drew about January 6:

>the former President would remain influential in Republican circles (particularly at the grassroots level), but that these favorability ratings would fade;

>Republican political fortunes would take a major and possibly lasting hit, as Democrats would miss no opportunity to remain voters about January 6, especially as elections approached; and

>support for Trump-ian positions on his core issues, notably China and trade policies, and immigration, would be significantly undermined.

As of today, however, these quasi-predictions are looking overblown at best, at least if numerous major national polls are generally on target.

Is Trump’s standing in Republican ranks diminished? As it’s been throughout the year (see, e.g., here and here), the evidence continues to be all over the place. For example, this CBS News survey shows that only 56 percent of self-identified Republicans want the former President to seek reelection in 2024.

At the same time, a new Reuters poll shows that no other likely alternative candidate is even close to him as the GOP’s favorite in the next White House race.

Does this mean that Trump’s only looking good to Republicans because his intra-party competition appears so unimpressive? That’s possible. Yet this Pew Research Institute poll shows that these same voters rate Trump’s presidential performance as nearly as highly as that of the revered Ronald Reagan.

Some similarly, seemingly contradictory, trends can be found in the national electorate’s views of Trump. That aforementioned CBS survey reported that a mere 26 percent of all U.S. adults want Trump to run again in 2024 (including only 23 percent of independents). According to recent RealClearPolitics.com averages, though (which combine the results of several individual soundings), Trump would beat President Biden in the popular presidential vote if the contest were held today.

And public opinion on the blame for January 6 seems pretty irrelevant. How else can you explain this Washington Post-University of Maryland finding that 60 percent of American adults believe that Trump bears “a great deal” or “a good amount” of blame for the riot?

Nor are there many signs that the GOP’s image overall has been tarnished by January 6 or by the party’s response to the Capitol attack or its reaction to whatever responsibility Trump deserves. The strongest evidence: Since November, Democrats have fallen behind Republicans in RealClearPolitics‘ gauge of which party Americans would support in a “generic” race for a seat in Congress. 

Most alarmist of all have been my fears that the public would turn against Trump-ian trade and immigration policies. Indeed, hard lines on China (which Mr. Biden has largely embraced) and on border security (which the President has clearly botched) are more popular among the electorate than ever.

In my defense, my initial reaction to the politics of January 6 did include the caveat that any damage to the Trump or Republican images could be limited, and even overcome, either if Americans’ characteristically short memories simply reasserted themselves again, or if they soured big-time on Mr. Biden. Clearly, the nation has seen a good deal of both.

Yet could outrage over the Trump and Republican January 6 roles and responses still be successfully stoked by Democrats going forward? To date, that doesn’t seem likely. Democrat Terry McAuliffe tried this tack in last November’s Virginia governor race – explicitly warning that a victory by Republican rival Glenn Youngkin would boost Trump’s future presidential prospects. He failed miserably. And these two polls (here and here) reveal only middling-at-best national trust in the fairness of the January 6 committee. 

Again, future bombshell revelations can’t be ruled out. But for the time being, it looks like for better or worse, the American public is steadily moving on from January 6. Will the Democrats? Can they?       

       

Im-Politic: Latinos Flocking to a (Still Trump-ian) Republican Party

Tags

Axios-Ipsos Poll, Biden, Democrats, Donald Trump, election 2016, election 2020, election 2022, election 2024, exit polls, Glenn Youngkin, Hispanics, Im-Politic, Immigration, Latinos, NPR-Marist Poll, Pew Research Center, polls, public opinion, Republicans, The Wall Street Journal, Virginia governor's race

Remember all those those charges that former President Donald Trump made clear from the very beginning of his 2016 presidential campaign that he was an anti-Latino bigot, and the predictions that any political success he enjoyed would doom Republican chances of winning support from this increasingly important group of voters?

Apparently, many Latino voters themselves don’t. Or they’ve concluded that Trump and now dominant Republican views on sensible controls on immigration matter less to them than views on other issues. Or that they actually like Trump and the Republicans on some combination of these subjects – including immigration. Or that maybe the Republican positions aren’t terrific, but that what the Democrats have stood for lately is a non-starter.

That’s the message being sent lately by several recent polls on Latino political views that could decisively shape American politics for the foreseeable future.

First, though, some context. There’s little doubt now that four years of Trump-ism wound up boosting the former President’s support among Latinos, now further shrinking it. In 2016, Trump won 28 percent of their presidential vote. In 2020, this figure had grown to 32 percent according to the eixt polls. (This subsequent study pegs his 2020 total at 38 percent.)  And of course, in some key states, the exit polls showed, his 2020 performance was far better – notably Florida (46 percent) and Texas (41 percent). So the racism and xenophobia charges were showing signs of flopping while throughout Trump’s term in office.

Even so, the results of a Wall Street Journal survey conducted in the second half of November came as a major shock. They showed that if Trump was running for the White House against President Biden today, he’d lose by only 44 percent to 43 percent among Latino voters. And they said they’d be even split at 37 percent in their votes for Democratic and Republican Congressional candidates.

As noted in this analysis, the poll’s sample size was very small, so serious doubts in its accuracy are justified. But similar results have been reported elsewhere. Yesterday, notably, National Public Radio and Marist College released a survey showing that just 33 percent of Latino adults approved of President Biden’s performance in office, versus 65 percent who disapproved. These Biden Latino numbers were worse than his ratings from American adults as a whole (41 percent approving and 55 percent disapproving).

Moreover, only 11 percent of Latino adults “strongly approved” of Mr. Biden’s presidency so far, versus 17 percent of U.S. adults overall, and when it came to strong disapproval, 52 percent of Latinos marked that column compared with 44 percent of the total national adult population.

Nor does the evidence stop there that the longer Mr. Biden has been in office, the less Latinos like his perfomance. As this Washington Post column reminds, “In late May, Biden’s job approval among Hispanics averaged 60 percent, with a net approval margin of 32, a bit larger than his vote margin the prior year.”

Biden backers and Democrats can point to a new Axios-Ipsos survey reporting that “The Democratic Party enjoyed huge advantages over the Republican Party when Latino respondents were asked which party represents or cares about …..” But after that ellipsis comes the finding that “those advantages evaporated when it came to the economy and crime.”

Democrats own a clear edge among Latinos on one major issue, though: the CCP Virus pandemic. According to the Axios-Ipsos results “respondents were much more likely to say Democrats were doing a good job of handling COVID-19 as a health challenge — 37% to 11% for Republicans, with another 17% saying both are doing a good job.” 

But Axios-Ipsos has been a major outlier lately, as made clear in this analysis that looks not only at this year’s polls but the Virginia gubernatorial election, which saw victorious Republican candidate Glenn Youngkin actually win the state’s Latino vote.  The conventional wisdom seems to hold that Youngkin prevailed in large measure because he held Trump at arm’s length. But in light of all the other survey results, maybe that’s wishful Mainstream Media thinking?      

It’s still a long way even to the 2022 Congressional elections, much less the 2024 presidential race. But unless the President and his party can turn their sagging fortunes around, it looks like they’re rapidly running out of time with Latinos – who are increasingly flocking to a Republican Party still strongly influenced by Donald Trump.  

(What’s Left of) Our Economy: How to Really Make Trade Fair

Tags

automotive, BBB, Biden administration, bubbles, Build Back Better, Canada, consumption, Donald Trump, electric vehicles, EVs, fossil fuels, manufacturing, Mexico, NAFTA, North America, production, tax breaks, Trade, U.S.-Mexico-Canada Agreement, USMCA, {What's Left of) Our Economy

There’s no doubt that the next few weeks will see a spate of (low-profile) news articles on how unhappy Canada and Mexico are about proposed new U.S. tax credits for purchasing electric vehicles (EVs) and how these measures could trigger a major new international trade dispute.

There’s also no doubt that any such disputes could be quickly resolved, and legitimate U.S. interests safeguarded, if only Washington would finally start basing U.S. trade policy on economic fundamentals and facts on the ground rather than on the abstract and downright childishly rigid notions of fairness that excessively influenced the approach taken by Donald Trump’s presidency.

The Canadian and Mexican complaints concern a provision in the Biden administration’s Build Back Better (BBB) bill that’s been passed by the House of Representatives but is stuck so far in the Senate. In order to encourage more EV sales, and help speed a transition away from fossil fuel use for climate change reasons, the latest version of BBB would award a refundable tax break of up to $12,500 for most purchases of these vehicles.

The idea is controversial because the administration and other BBB supporters see these rebates as a great opportunity to promote EV production and jobs in the United State by reserving his subsidy for vehicles Made in America. (As you’ll see here, the actual proposed rules get more complicated still – and could change some more.) And according to Canada and Mexico, this arrangement also violates the terms of the U.S.-Mexico-Canada-Agreement (USMCA) governing North American trade that replaced the old NAFTA during the Trump years in July, 2020.

Because USMCA largely reflects those prevailing concepts of global economic equity, Canada and Mexico probably have a strong case. But that’s only because this framework continues classifying all countries signing a trade agreement as economic equals. Even worse, there’s no better illustration of this position’s absurdity is the economy of North America.

After all, the United States has always accounted for vast majority of the continent’s total economic output and therefore market for traded goods. According for the latest (2020) World Bank figures, the the United States turned out 87.51 percent of North America’s gross product adjusted for inflation. And when it comes to new car and light truck sales, the U.S. share was 84.24 percent in 2019 (the last full pre-pandemic year, measured by units, and as calculated from here, here, and here).

But in 2019, the United States produced only 68.88 percent of all light vehicles made in North America (also measured by units and calculated from here, here, and here.) Moreover, more than 70 percent of all vehicles manufactured in Mexico were exported to the United States according to the latest U.S. government figures. And for Canada, the most recent data pegs this share at just under 54 percent (based on and calculated from here and here).

What this means is that, without the American market, there probably wouldn’t even be any Canadian and Mexican auto industries at all. They simply wouldn’t have enough customers to reach and maintain the production scale needed to make any economic sense.

So real fairness, stemming from the nature of the North American economy and the North American motor vehicle industry, leads to an obvious solution: Give vehicles from Canada and Mexico shares of the EV tax credits that match their shares of the continent’s light vehicle sales – just under 16 percent.

Therefore, using, say, 2019 as a baseline, from now on, the first just-under-16 percent of their combined light vehicle exports to the United States would be eligible for the credits for each successive year, and the rest would need to be offered at each manufacturer’s full price (a pretty plastic notion in the auto industry, I know, but a decision that would need to be left to whatever the manufacturers choose).

Nothing in this decision would force Canada or Mexico to subject themselves to these requirements; they would remain, as they always have been, completely free to try to sell as many EVs as they could to other markets (including each other’s).

What would change dramatically, though, is a situation that’s needlessly harmed the productive heart of the U.S. economy for far too long, resulting from trade agreements that lock America into an outsized consuming and importing role, but an undersized production and exporting role. In other words, what would change dramatically is a strategy bearing heavy responsibility for addicting the nation to bubble-ized growth. And forgive me for not being impressed by whatever legalistic arguments Mexico, Canada, any other country, or the global economics and trade policy establishments, are sure to raise in objection.

(What’s Left of) Our Economy: Are Apple Products “Designed in California…& Extorted by China?”

Tags

Apple Inc., Breitbart.com, China, Donald Trump, economics, forced technology transfer, free trade, globalization, infotech, John Carney, national security, privacy, surveillance, tech, TheInformation.com, Tim Cook, Trade, {What's Left of) Our Economy

You have to give Tim Cook credit for sheer gall, at least if a recent report is true (as it appears to be, since it he hasn’t yet denied it). There was the Apple, Inc. CEO in 2018, at a forum in Beijing no less, in effect warning former President Donald Trump to ditch his plans to impose America’s first ever serious tariffs on Chinese goods, largely because “What I’ve seen over my lifetime is that countries that embrace openness, that embrace trade, that embrace diversity are the countries that do exceptional — and the countries that don’t, don’t.”

And not two years before, according to this account, Cook had promised China that over the next five years, the infotech giant would make a $275 billion effort to strengthen the People’s Republic’s technology and manufacturing base if China’s thug regime would back off a major crackdown it had launched on the company’s massive Chinese operations.

Moreover, as made clear in the December 7 article in TheInformation.com, Cook’s commitments not only have inevitably and massively affected U.S. and China trade and broader economic flows, and will continue to do so going forward. They’re likely to endanger America’s national security. After all, Cook, for reasons having squadoosh to do with free trade or free markets or economic fundamentals, evidently pledged to

>invest “many billions of dollars more” than what the company was already spending annually in China: in part on building new research and development centers”;

>help Chinese manufacturers develop “the most advanced manufacturing technologies” and “support the training of high-quality Chinese talents”;

>collaborate on technology with Chinese universities and directly invest in Chinese tech companies”; and

>collaborate on technology with Chinese universities and directly invest in Chinese tech companies”;

>use more components from Chinese suppliers in its devices”; and 

>give business to Chinese software firms”.

Since every economic and academic entity in China is ultimately under the thumb of the Chinese government, Cook’s submission to Beijng’s pressure has made enormous amounts of resources and knowhow available to a Chinese regime that has challenged American security interests in East Asia and around the world, and that powerfully threatens Washington’s ability to protect Americans’ privacy and political freedoms through its increasingly impressive hacking and other surveillance capabilities (including via the wildly popular TikTok video-sharing app).

In the worst (but ever more plausible) case, in a future conflict with Beijing, Chinese weapons that kill U.S servicemen could be partly and/or indirectly financed and developed by Apple – and, as I’ve made clear, e.g., here and here, by the numerous other U.S. companies that have fueled China’s tech and therefore military prowess.

But also crucial to point out – the deal signed by Cook (far from the only target of China’s successful campaigns of forced tech and manufacturing production transfer over a period stretching back decades), also challenges a core idea of free trade theory in a way first pointed out by friend John Carney of Breitbart.com.

As Carney wrote more than two years ago, economists and others who were crticizing Trump’s tariffs were making an especially important mistake. They were assuming “that all of the goods that are imported from China are made there because China is the lowest cost manufacturer of those goods. If that were true, moving production out of China would necessarily increase costs of production and reduce efficiency.”

But as he proceeded to remind, China couldn’t be such a paragon of manufacturing value. If it were, why would Beijing have been relying for so long on such a wide variety of “mercantilist tactics to attract and retain manufacturing business from global businesses, including requiring companies to manufacture goods in China in order to access its domestic markets and imposing steep tariffs on imports for foreign-made goods”?

In fact, Carney continued, “China’s policies…impose what economists call ‘deadweight losses’ on the global economy by preventing companies from moving their supply chains to cheaper sources.” And tariffs can serve as an essential counter-weight. 

Apple is nothing if not public relations-obsessed, and several years ago responded to public concern about all its production in the People’s Republic with an ad campaign stressing that its products are “designed in California.”  At least for accuracy’s sake, the company should now add “and extorted by China.”  And the news should greatly energize Washington’s efforts to stop U.S. companies from strengthening and enriching this burgoning menace.               

(What’s Left of) Our Economy: U.S. Trade Figures Still on a (CCP Virus) Roller Coaster

Tags

Biden, CCP Virus, China, consumers, coronavirus, COVID 19, Donald Trump, exports, Federal Reserve, goods trade, imports, Janet Yellen, manufacturing, non-oil goods deficit, recovery, stimulus, supply chains, tariffs, Trade, trade deficit, Wuhan virus, {What's Left of) Our Economy

Just as September’s official U.S. trade figures revealed numerous records and multi-month or year highs and lows (mainly of the bad kind), today’s October release reported its share of startling results – but mainly of the good kind. One black spot deserves mention right away, though – the country’s manufacturng trade deficit passed the $1 trillion mark for the fourth straight year. And we still have two data months left in 2021.

Still, the all-time monthly bests and similar extraordinary readings from October were nonetheless impressive. And combined with the September statistics, they make clear that the CCP Virus and government efforts to fight it are far from done distorting the U.S. and world economies. 

The chief records set were:

>Combined goods and services exports of $223.63 billion, which beat May, 2018’s previous record of $216.09 billion by 3.49 percent. Moreover, the 8.14 percent sequential improvement was the biggest since June, 2020’s 8.69 percent – which came during the strong national and global economic recoveries from the first wave of the CCP Virus and the short but sharp depression it caused.

>Total imports of $290.75 billion, which edged outthe previous month’s record of $288.23 billion by 1.06 percent.

>Goods exports, where the $158.73 billion figure exceeded the former record of $149.92 billion set in August by 5.87 percent. And the monthly increase of 11.07 percent was the biggest since March’s 10.18 percent.

>Goods imports of 242.67 billion, also the second straight all-time high, and a level that topped September’s $240.89 billion by 0.74 percent.

Another all-time best and worst came in non-oil goods trade. As known by RealityChek regulars, these trade flows deserve special attention, because they consist of exports and imports whose levels are significantly affected by trade agreements and other U.S. trade policy decisions (unlike trade in oil and services, where liberalization efforts are still at early stages at best).

The best? Non-oil goods exports climbed to an all-time high, with their $138.82 billion total standing 5.87 percent higher than the previous record of $131.12 billion set in August. Moreover, their monthly growth of 9.57 percent was the biggest such advance since the 10.65 percent increase of July, 2020 – also during that recovery from the first CCP Virus-related downturns.

The worst? Non-oil goods imports set their second straight record, coming in at $242.67 billion, or 0.74 percent higher than the September total of $240.89 billion.

And finally, when it comes to new records, imports of advanced technology products (ATP). Their $51.54 billion level also was a second straight, and surpassed September’s $50.50 billion by 2.06 percent.

But multi-month and even multi-year highs and lows abounded in the October trade report:

>The overall deficit plummeted from the record (and upwardly revised) $81.44 billion figure for September to $67.12 billion. The monthly total was the lowest since April’s $66.15 billion, and the sequential drop of 17.58 percent the greatest since April, 2015’s 18.16 percent.

>Similarly, in October, the goods deficit hit its lowest level ($83.95 billion) since November’s $86.23 billion, and the month-to-month decline of 14.33 percent (from September’s record $97.98 billion, was the biggest such drop since the 20.79 percent nosedive of February, 2009 – when the Great Recession following the global financial crisis was in its depths.

>The 11.40 percent monthly decrease in the non-oil goods deficit (the steepest fall-off since April, 2015’s 13.76 percent), brought this trade gap to its lowest level ($82.99 billion) since last November’s $85.73 billion.

October’s trade report contained some eye-popping numbers in U.S.-China goods trade, too.

>Goods exports to the People’s Republic shot up from $10.91 billion to a new record of $16.64 billion. Further, not only did this figure top the previous best (October, 2020’s $14.77 billion). But the 52.46 percent sequential jump was the biggest since the 71.04 percent recorded back in November, 1996 – when much smaller trade numbers made big percentage improvements much easier to generate.

>In addition, the U.S. goods trade deficit with China of $31.40 billion was the lowest since July’s $28.65 billion read, while the 13.99 percent monthly improvement was the biggest since the 25.19 percent figure reported for March, 2020 – when China had still shut down much of its economy due to the pandemic.

The China data also show that U.S. trade with the People’s Republic continue to perform better than U.S. trade in non-oil goods – the best global proxy for U.S. goods trade with China – and as a result, that the Trump (now Trump-Biden?) tariffs continue to work well.

For example, that 13.99 percent sequential narrowing of the U.S. goods trade gap with China in October was faster than the comparable 11.40 improvement in the non-oil goods deficit. That 52.46 percent monthly increase in goods exports to China, moreover, was nearly ten times greater than the 5.87 percent rise in non-oil goods exports.

The 1.30 percent increase in U.S. goods imports from China was nearly twice as fast as the 0.74 percent increase in America’s non-oil goods imports, but both absolute increases are modest.

And on a year-to-date basis, the U.S. goods deficit with China is still up less (13.67 percent) than the non-oil goods shortfall (16.73 percent).

On the down side, the U.S. manufacturing deficit did decline in October – by 3.32 percent, from a record $118.75 billion to $114.81 billion. But it remained astronomical by any reasonable standard.

Manufacturing exports improved on month by a healthy 10.99 percent, from $92.58 billion to $102.75 billion. But although manufacturing imports climbed by a much slower pace (2.95 percent, from $211.33 billion to $217.56 billion), they’re still more than twice as great.

Year-to-date, the 18.78 percent advance in manufacturing exports and the 19.56 percent rise in manufacturing imports has resulted in that trillion-dollar-plus manufacturing deficit ($1.083 trillion, to be precise). As of October, moreover, it’s running 18.26 percent ahead of last year’s pace.

The outlook for America’s trade flows? I’m still pretty sure that the deficits will keep rising in the near term – mainly because overall economic growth, and therefore consuming and importing are expected to stay so strong.  Longer term, though, uncertainties are still noteworthy and arguably could frustrate forecasts even more. 

After all, it’s still not clear how America’s and other governments will respond to the new Omicron variant ofthe virus (or whatever other strains come down the pike).

There’s the seemingly likely ebbing of the fiscal stimulus that’s boosted savings, and therefore purchasing and importing power, for the entire population during the pandemic period. Continued high inflation could start depressing consumer spending on its own – although less government stimulus all else equal should start restraining prices at some point.

Additionally, don’t forget the Federal Reserve, which has been prompted by faster-than-expected price increases to reduce the bond-buying program that’s provided another massive source of economic stimulus.  Is Treasury Secretary Janet Yellen right to be confident that consumer demand will stay strong nonetheless?  Beats me. 

Finally, it’s encouraging to read various claims that the global supply chain crisis is easing (e.g., here). But even if progress on this front continues and accelerates, new geopolitical threats to global commerce have emerged – especially rising tensions between China on the one hand, and the United States and most of China’s neighbors on the other, over the future of Taiwan and whether it gets decided peacefully.     

Since America’s economic growth is expected to be torrid in the final three months of this year (including, of course, October), I suspect that, despite all these questions and complications, the next few months of trade figures will worsen considerably (as I wrote last month). But the farther down the road I look, the cloudier my crystal ball gets

Im-Politic: Why Virginia Really Revealed a Winning Trumpism-without-Trump Playbook

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2016 election, 2017 election, 2020 election, 2021 election, 2022 election, 2024 election, battleground states, Donald Trump, Ed Gillespie, Glenn Youngkin, governor, Im-Politic, midterm elections, midterms 2022, Populism, Republicans, Virginia

Since the 2020 election results came in, I’ve been convinced that the biggest question hanging over the future of the Republican party – and one of the biggest hanging over American politics – was whether the GOP could foster what you could call Trump-ism without Trump that produced political winners.

That is, could Republicans find a strategies and candidates that (1) embraced the policies pursued by the former President capitalize on their popularity with a broad group of voters that includes conservatives, many independents and moderates, and growing numbers of African Americans and Hispanics, while rejecting the kinds of behavior that clearly turned or outright disgusted so many voters outside Trump loyalist ranks, but (2) conveyed enough of the anti-establishmentarianism and overall combativeness that appealed to the loyalists and inspired them to vote robustly?

Since this year’s Virginia governor’s race unexpectedly turned competitive this fall, it became clear that Republican candidate Glenn Youngkin was pursuing a Trump-ism without Trump strategy – to the point of successfully discouraging the former President from campaigning personally in the state for him. He also seemed likely to pass any personality tests required by gettable voters outside the Trump diehards’ ranks.

But I wasn’t convinced that he could generate the kind of diehard turnout he’d also need to carry an increasingly but still not entirely blue state like Virginia – and that could translate into Republican wins in other battleground states.

After looking at the details of Youngkin’s upset victory last night, I’m now pretty convinced that he accomplished exactly that goal. The evidence? His actual turnout numbers in the southwestern part of the state, whose largely rural and semi-rural counties aren’t especially populous, but whose voters gave Trump overwhelming triumphs both in 2016 and last year.

My methodology: I looked at the Youngkin vote last night, the Trump votes both last year and in 2016, and for losing Virginia Republican gubernatorial candidate Ed Gillespie in 2017, for 22 counties west of the city of Roanoke (and including Roanoke County). My source: Politico.com‘s county-by-county tallies for the four years in question, found here, here, here, and here.

These elections of course aren’t strictly comparable – chiefly because presidential election turnout is usually greater than voting in state-wide and local races. The issues dominating each contest weren’t identical, either – because things change.

But what the numbers make emphatically clear is that this big slice of the Trump loyalist vote in Virginia decreased much less between last year’s presidential election and this year’s gubernatorial race than it did between the 2016 White House contest and the 2017 gubernatorial race. That is, Youngkin kept Trump base voters considerably more energized than Gillespie.

Specifically, between 2020 and 2021, the Republican vote in these counties fell by 11.05 percent. But between 2016 and 2017, it plunged by 40.85 percent. Also important, and potentially a sign of Trump fatigue: The former President won 6.21 percent fewer votes in these counties in 2020 than in 2016 – even though total Virginia turnout in 2020 was 12.60 percent higher than four years before.

Youngkin’s success by no means guarantees Republican victories anywhere in the upcoming mid-term elections, much less in the 2024 campaigns for the White House and Congress. Too much can happen between now and both of those “thens,” and regarding the next presidential race, there’s no telling who the Democratic nominee will be. Moreover, of Trump’s hot button issues, one understandably didn’t come up at all in the Virginia election (trade) and Youngkin pretty much ignored another (immigration). Finally, though the state’s gubernatorial race wasn’t generally expected to be even competitive, Youngkin didn’t exactly win in a landslide.

Not very surprisingly, Trump has rejected the idea that Virginia represents evidence of his expendability. In fact, he appears to be taking credit for the results. But if you look closely at his phrasing, his emphasis on the Make America Great Again movement rather than his own actions could signal a recognition that his lasting impact on American politics might wind up being much more ideological than personal.             

    

(What’s Left of) Our Economy: Biden Goes Full Trump on His New Metals Tariff Deal

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allies, aluminum, Biden, Biden administration, China, Donald Trump, EU, European Union, metals, metals tariffs, quotas, steel, steel tariffs, tariff-rate quota, tariffs, Trade, trade wars, transshipment, Trump administration, {What's Left of) Our Economy

I’m old enough to remember when Donald Trump’s decision to tariff steel and aluminum imports from many U.S. allies was almost universally condemned outside his administration as not only unimaginably stupid and economically ignorant (as the supposed case for all tariffs) but downright heinous.

After all: These were U.S. allies that would be paying the price for Trump’s troglodyte protectionism. For decades they’d stood shoulder to shoulder with America in numerous foreign policy crises and showdowns with hostile dictatorships (or at least much of the time) and served as valuable force multipliers (even though their skimpy defense budgets prevented them from providing the United States with much concrete defense help when push came to shove, and needlessly exposed Americans to nuclear war risk). How, moreover, could relying on imported metals from friendly countries endanger U.S. national security – as the Trump administration legally needed to claim in order to slap on the trade curbs. Worse, the Trump metals levies as such left China, by far the biggest metals trade offender, untouched.

Even Trump’s own first Defense Secretary agreed on the tariffs’ cockeyed targeting. So did a fellow named Joe Biden, who during his presidential campaign last year upbraided his opponent for “picking fights with our allies” vowed to “focus on the key contributor to the problem [of a global metals glut] – China’s government.”

So although it’s been telegraphed for some weeks now, it’s still worth noting not only that since his inauguration, President Biden has kept the steel and aluminum tariffs firmly in place, but that his administration has just reached an agreement with the European Union (EU) that makes clear that the two major assumptions that drove Trump’s approach were completely correct.

First, as I’ve demonstrated repeatedly (e.g., here), the evidence is overwhelming both that global metals capacity stems not only from China’s own mammoth overproduction, but from numerous other metals manufacturing countries, and that all of these economies were working in any number of clandestine ways to make sure that most of this overcapacity was dumped into the U.S. market.

That is, they either responded to Chinese product flooding their own markets and threatening their own metals industries by ramping up their own exports to the United States; by modifying these Chinese metals slightly and then sending them state-side as their own products; or by simply permitting Chinese steel and aluminum to be transshipped through their own ports to the United States under false labels.

(This new report shows that China’s strategy of evading U.S. trade barriers has taken another mportant form”: acquiring metals production capacity in third countries – especially in the most profitable, specialty and other high-value metals segments – and using these facilities to ship to America.)

As a result, any U.S. tariffs needed to be universal to be effective – either simply to keep imports under control, or to secure foreign agreement to stop playing footsie with the Chinese. Any other approach would have left Washington continuing to play Uncle Sucker in a game of global whack-a-mole – whose latest round began when direct Chinese exports to the United States were sharply limited by tariffs put in place during the last year of the Obama administration.

Second, the Trump approach recognized that the United States boasted the leverage to achieve success, and the terms of the new agreement with the EU make clear that the former president judged the balance of economic power correctly It’s true that the deal EU saves various American industries from retaliatory tariffs. But in return for restoring these sectors largely unimpeded access to the huge total EU economy, the Europeans have accepted sharply reduced access to American customers.

A U.S. government fact sheet states that tariff-free EU steel and aluminum exports to the United States will be limited to “historically-based” volumes (which have not been specified, but which reportedly will equal only about 60 percent of the immediate pre-Trump tariff totals). Practically all attempted European shipments above that total would be subject to the exact same Trump levies that clearly kept them mostly out of the United States – at least judging from the Europeans’ fundamental complaint. (Trade mavens call such arrangements “tariff-rate quotas.”) In this respect, this EU agreement mirrors those reached by the Trump administration with countries like Canada, Mexico, Argentina, Brazil, and South Korea.

The full details of the agreement haven’t yet been released, so questions remain about enforcement mechanisms – which of course matter decisively for any effort to combat secretive activity like transshipment. But because American-owned steel companies and U.S. steel unions have endorsed the deal, chances are they’ll be effective. And that’s likely to be true for the rest of his trade agenda as long as President Biden keeps going full Trump.      

(What’s Left of) Our Economy: New Doubts About U.S.-China Decoupling

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American Chamber of Commerce in Shanghai, Biden, China, decoupling, Donald Trump, exchange students, export controls, foreign direct investment, investment, tariffs, Trade, trade war, Wall Street, {What's Left of) Our Economy

As known by RealityChek regulars, the biggest question surrounding U.S.-China economic relations is probably whether the two countries will “decouple” their trade and investment relations with each other.

For several reasons, I’ve been pretty optimistic that the disentangling of the two big economies will continue and even speed up. These include the sizable decoupling progress that’s already been made; the strong and still growing criticisms of China’s behavior pretty much across the issue board by the American public and their leaders; the Biden administration’s surprising decision to continue most of the major Trump anti-China policies; and Beijing’s own determination to bring commercial entities often misleadingly described as “private” businesses even more completely under its thumb and make operating in China ever harder for foreign companies. (See, e.g., here and here.)

But after reading a summary of a recent survey by the American Chamber of Commerce in Shanghai, I’m not so sure.

The organization, comprised of more than 1,300 companies, is one of the leading foreign business groups in the People’s Republic, and last month released its latest annual China Business Report. Among the key findings:

>77.9 percent of the 338 respondents said they were optimistic or slightly optimistic about their next five years in China – the highest such level since former President Trump’s trade war began in 2018.

>77.1 percent reported that their latest profits were higher than expected.

>More than 82 percent expected higher revenues this year than last year – which would represent growth levels “last seen before the worst days of the US-China trade war.”

>The share of respondents reporting annual growth in investment in China (59.5 percent) is also nearly back to 2018 levels (62 percent).

>And only 28 percent of responding manufacturers producing in China had any plans to move production out of the People’s Republic.

Meanwhile, even though its economy is experiencing major problems due largely to mounting energy shortages to an overly aggressive anti-pandemic policy to signs that its mammoth real estate sector will turn into an equally mammoth burst bubble, Wall Street seems more enthusiastic than ever about channeling capital to China.

Signs that decoupling is proceeding are by no means entirely gone. Data on U.S. direct investment (that is, investment in tangible assets like factories as opposed to financial investments like stocks and bonds) for 2021 aren’t available yet, but figures for last year (reported in the above linked RealityChek post) showed that two-way flows continued a decline that dated from before the pandemic slowed both economies dramatically. Moreover, China’s crackdown on its big tech entities has included discouraging them from listing on American stock exchanges.

We do have 2021 goods trade data, and through the first half of this year, U.S. imports from China remained a smaller share of the entire U.S. economy (0.51 percent of annualized gross domestic product) than in the first quarter of 2018 – the last pre-trade war quarter (0.61 percent). Interestingly, the export ratio has returned to those 2018 levels (0.16 percent).

Moreover, since the flow of people back and forth was another major measure of how the United States and China had been drawing closer together, it’s also worth noting evidence that even though overall foreign student applications to American colleges and universities have resumed rising, they’re falling from China.

Since I’m not clairvoyant, I’m not going to pretend to know whether decoupling will slow or stop or accelerate again. But this scenario seems at least plausible: Goods trade between the two countries will keep stagnating at best (especially if the bulk of the Trump tariffs stays in place, and if President Biden keeps expanding controls on defense-related tech exports); but unless the Biden administration puts new clamps on, flows of capital – especially from the United States to China – will keep picking up.

Moreover, as explained by a Financial Times columnist, not only will these investments greatly increase the resources available to China’s dictators. They will also inevitably help China “put its savings to good use.” Which means that U.S.-China commercial interactions could well boomerang in numerous dangeorous ways against Americans even more than they do already.