Im-Politic: Why Biden Can’t Run Even as a Fake China Hawk

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Alexandria Ocasio-Cortez, Asian-Americans, Barack Obama, Bernie Sanders, China, Code Pink, Democrats, election 2020, Elizabeth Warren, Im-Politic, Jeet Heer, Joe Biden, Judy Chu, labor unions, Larry Summers, progressives, racism, Rashida Tlaib, Sherrod Brown, The Nation, Trade, Trump

I know I just wrote about how dreadful Joe Biden’s China policy record has been for decades. But the former Vice President is the presumptive Democratic Party nominee for President, and he could well be sitting in the Oval Office next January. So it’s eminently newsworthy to report that any hopes that a President Biden would recognize these disastrous mistakes, and generally speaking try to continue President Trump’s policy of reversing them, are now lying in ruins.

Specifically, it’s become clear in recent days that any Biden effort to keep his newly made promise in a political ad to “hold China accountable” for its role in unleashing the CCP Virus on the world is going to prove totally unacceptable to his party’s progressive wing – whose support he’s acting like he needs desperately to win in order to defeat Mr. Trump.

Moreover, it’s been reported that one of the campaign advisers chosen by Biden is Larry Summers, a former Clinton Treasury Secretary and Obama administration chief White House economic aide who has always championed reckless trade and broader economic expansion with the People’s Republic. Worse, during the Obama years, Summers was a major obstacle opposing ideas like sanctioning China for its protectionist currency policies – which would have gone far toward stemming the extraordinary increase in Beijing’s economic and therefore military power that took place while Barack Obama occupied the White House. In other words, the Biden campaign will be powerfully shaped by the Democrats’ centrist wing – and its own long record of enabling China.

If you doubt that Summers still backs coddling China, check out this 2018 post – which shows him turning intellectual backflips trying to excuse Beijing’s massive theft and extortion of American intellectual property, and to claim that the Obama policies succeeded spectacularly in bringing China to heel.

The stances of Democratic progressives are less well appreciated – but at least as important given this faction’s success in pulling Biden and other Democratic centrists to the Left this year on a host of issues. Moreover, don’t forget how if they’re unhappy enough with Biden, many of them will stay at home on election day and, as in 2016, help hand victory to Mr. Trump. At the same time, the progressives’ story it’s a more complicated story than the centrists’.

It’s more complicated because two of the progressives’ favorites – Senators Elizabeth Warren of Massachusetts and Bernie Sanders of Vermont – are definitely supporters of tougher and, more important, smarter U.S. China policies. That’s especially true of Sanders, who has voted against every U.S. effort to integrate the American and Chinese economies more widely and deeply during his long career on Capitol Hill. Nonetheless, it’s also true that neither Senator made China a major issue during their presidential campaigns this year.

And one main reason is surely that none of the progressives’ other leading (and younger) lights seems especially interested in China. Commendably, they have condemned China’s horrific repression of its Muslim Uighur minority. But ask yourself – when’s the last time Rep. Alexandria Ocasio-Cortez, for example, condemned the People’s Republic for the trade and intellectual property and investment policies that have stripped the United States of much of its manufacturing base and hammered the wages of manufacturing workers? I couldn’t find any such statements.

Ditto for Michigan Rep. Rashida Tlaib – and she represents a Detroit area district whose economic distress owes significantly on China-related and other trade policy failures. But you won’t even find these words on her website.

But although much of the Democratic Left has had little to say lately about China and trade, signs have abounded that it’s royally ticked off about Biden’s CCP Virus ad – in some cases because of their alleged potential to stoke anti-Chinese bigotry at home, but also because they supposedly blame China for U.S. virus-related losses that they insist are really President Trump’s fault.

Most of this pushback so far has come from Asian-American activists in Democratic ranks who don’t hold political office. But it’s also come from California House Democrat Judy Chu, Chair of the Congressional Asian Pacific American Caucus. Does anyone believe she’ll face much resistance here from the rest of her party?

And non-Asian American progressives have ripped the Biden ad, too – including influential pundit Jeet Heer (national political correspondent for one of the progressives’ flagship magazines, The Nation); Sanders campaign surrogate Josh Fox; and Code Pink, the women-led progressive grass-roots group.

In theory, the Democrats’ still-powerful labor union base could prod Biden to lay out a credible plan to combat China’s many threats to American interests. But its representatives, at least, have been quiet about the virus and its implications. In fact, judging from this recent op-ed piece, its spokespeople seem at least as determined to blame Trump administration blunders for the country’s CCP Virus woes as they are to blame pre-Trump China-coddling and enabling trade policies. Indeed, one of the labor Democrats’ Congressional leaders, Senator Sherrod Brown of Ohio, seems to adopted a “Biden uber alles” position during this campaign, even on China policy.

Yet although both Democratic centrists and progressives will be strongly pushing Biden to soft-pedal criticisms of China for the rest of this presidential campaign, this approach is likely to flop so badly with the American electorate in general (as shown in a post earlier this week) that it’s a natural for President Trump to exploit. And if a Trump campaign hammering China themes creates even more incentive and/or pressure for the President to maintain his hard and smart line against Beijing, it won’t just be his political career that benefits. It will be the entire nation as well. Maybe even the Democrats will start opening their eyes.

Im-Politic: No U.S. Politicians Own China Virus Bragging Rights (& That’s Not a Scandal)

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Biden, budgets, CDC, Centers for Disease Control and Prevention, China, China virus, coronavirus, Democrats, election 2020, health security, Im-Politic, Joe Biden, public health, Trump

Since the coronavirus’ serious threat to Americans’ health and their economy became clear, a blizzard of charges has accused President Trump of being caught flat-footed by the pandemic. I agree that the President didn’t expect a dangerous plague to break out overseas and swiftly cross America’s borders. I’ve also written that Mr. Trump made a big mistake in cutting funding for the Centers for Disease Control and Prevention (CDC) – but mainly for political reasons. For the amounts of money involved are so small that they couldn’t possibly even move the needle in terms of reining in federal spending and cutting deficits.

In fact, given the tiny sums, the picture looks pretty good when it comes to the latest Trump budget request for the CDC programs that actually deal with coronavirus-type threats. Check out the line items for “Emerging Infectious Diseases” and “Global Disease Detection and Other Programs.” The former is down only marginally from actual spending levels previously agreed to by Congress (including of course its Democrats) and the latter is up significantly.

But more important, the allegations seem to assume that the American political system has been chock full of leaders who can boast the foresight the President lacked, and that the nation’s response would have been much more effective had one of them occupied the Oval Office. Is there any actual evidence for this proposition?

One crucial test is whether well before the virus became front-page news any of the leading recent and current Democratic candidates for President rolled out plans for beefing up American capabilities to respond to pandemics before the virus’ breakout in China. And do you know how many did? None – with the possible exception of former New York City Mayor and media magnate Michael Bloomberg.

That’s based on checking the polcy sections of the websites of former Vice President Joe Biden, Vermont Senator Bernie Sanders, and drop-out Massachusetts Senator Elizabeth Warren. Drop-outs Minnesota Senator Amy Klobuchar and South Bend, Indiana Mayor Pete Buttigieg have taken all the content down from their sites.  But a wide-ranging media survey of their positions reveals no attention paid to pandemics, either.

I describe drop-out Bloomberg as a possible exception because his site did Mr. Trump’s “erratic leadership, go-it-alone approach, and distrust of science” for putting the country “in a vulnerable position should a major public health emergency, such as the novel coronavirus…materialize.” And he outlined what can fairly be called a plan.

Yet it’s not clear when these Bloomberg proposals were unveiled, and there’s no evidence that he was thinking about such matters before COVID 19’s appearance.

The same goes for Warren and Klobuchar, whose plans only dated from late January. Biden published an op-ed detailing his own ideas at about the same time. (See this post for links.)

I don’t believe that any of these politicians (including those with long years of public service) deserve any blame for failing to anticipate the virus threat on a timely basis – and for the same fundamental reason I don’t believe Mr. Trump should be pilloried. Because this kind of pandemic (coming from a country with extensive ties with the U.S. and global economies, like China, as opposed to regions like Central and West Africa, with almost no such ties) really couldn’t be anticipated adequately.

And incidentally, this point is also relevant to the charge made by Biden and others that the President not only cut the budget for the CDC, but for the country’s foreign aid agency, and also dismantled the White House global health security team created during the Obama years.

But anyone honestly believing that a little office somewhere in the Executive Office of the President would have made a meaningful difference in preventing or fighting the virus is guilty of drinking the policy wonk kool-aid claiming that augmenting bureaucratic flow-charts in any way amounts to solving problems – even those that emerge suddenly. As for the foreign aid cuts, the U.S. Agency for International Development (USAID) has been working on helping prevent the spread of infectious diseases like the coronavirus, but Beijing made clear early on that American government help wasn’t wanted. (Nor was World Health Organization help.)

In other words, life is full of unpleasant surprises and shocks, and from time to time they’re big. Human beings don’t come with perfectly functioning crystal balls in their heads, and learning curves are rarely as steep as we’d like because lessons from experience and history tend to be excruciatingly difficult to draw. Hindsight can be superb, but says nothing about clairvoyance. Governments, moreover, although indispensable in such situations, are often not the most efficient actors, and in crises, they’re often forced to scramble.

That’s not to say that the President may not pay a political price for his coronavirus record, or that Americans don’t have a right to be frustrated with his actions to date, much less that he deserves reelection on any grounds. Indeed,  here’s a great suggestion for the kind of speech Mr. Trump should have made by now, and still should make – which urges him to use the virus crisis as an opportunity both to stimulate the economy and prepare better for future pandemics with major spending and other measures to bolster national health security.

But it is is to warn that none of President Trump’s critics or challengers can legitimately claim to have done better, let alone that they’ll act more effectively when the next black swan – biological or not -flies into our lives.

Im-Politic: I Stutter and I Know That’s Not Biden’s Only Gaffe Problem

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Biden, campaigns, cognitive decline, election 2020, Hollins Communications Research Institute, Im-Politic, Joe Biden, Ronald A. Webster, stuttering

Here at RealityChek I’ve avoided writing about myself for three main reasons. First, I can’t imagine that my life and experiences are remotely as interesting to others as they are to me. Second, they’re almost never relevant to the public policy issues on which I’d rather focus. And third, when they are, viewing them through a personal lens unavoidably entails using firsthand anecdotes to make a case – which holds no analytical water whatever.

Yet over the last few months, and especially over the last few days, it seems, the personal and political have intersected in a way that I believe does enable me to make a valid point about a headline issue. That’s the matter of whether Joe Biden’s verbal gaffes indicate “cognitive decline,” or whether they simply show that he’s dealing with a lifelong stutter.

The difference of course matters greatly. After all, if the former is the case, then it’s legitimate to wonder whether the 77-year old former Vice President and frontrunner for this year’s Democratic presidential nomination can hold up under the rigors of a general election campaign and, more important, the pressures of the world’s most important job. If the latter, then there’s no reason to suppose that Biden isn’t up to the task mentally. For there’s absolutely no intrinsic relationship between stuttering and intelligence or mental health.

To the former Vice President and long-time Senator’s credit, he’s never tried to excuse these episodes – or any from years past – as a speech impediment. But some of his supporters (or at least opponents of President Trump) have.

My take? Biden’s control over his stutter has faltered from time to time, and explains some of his stumbles and other unusual speech patterns. But many of the instances that have generated concern have nothing to do with a pure speech disorder. Indeed, they at least appear to represent moments of genuine confusion and/or memory lapses often characteristic of advanced age.

And here’s where the personal comes in: My confidence in the above conclusions reflects my own experience as a lifelong stutterer. Not that I’m an accredited expert in speech pathology or gerontology or any aspect of brain science. But I am (way too) intimately familiar with an inability to voice the words I want to say, and with the various tactics stutterers use to try to make their thoughts heard.

Moreover, because I’ve been lucky enough to have received treatment from an outstanding stuttering therapy program developed and run for decades by Ph.D. speech pathologist Ronald A. Webster, I’ve made long-time friendships with literally dozens of fellow stutterers and become acquainted to varying degrees with literally hundreds more. By sharing experiences with them and observing them deal with their own stutters first-hand, like many other stutterers, I’ve learned to identify whether someone is simply encountering the kind of speech disfluency that everyone faces every now and then, and whether they’re dealing with a genuine stuttering problem.

In addition, thanks to listening to many hours of Webster classroom talks and more hours of personal discussions, I’ve learned that the best research in the field (essentially Webster’s own) makes clear that stuttering ultimately represents malfunctions in an individual’s anatomical speech mechanism (consisting mainly of the lips, tongue, vocal folds, and abdomen) that reveal nothing about mental faculties.

(Some more truth in advertising: I have never found any aspect of Biden’s record in public life the slightest big impressive, and cannot imagine voting for him this fall.)

There’s little doubt that chronic stuttering can affect one’s frame of mind, and that it’s worsened by factors like stress and fatigue. But the roots are physical – and as Webster and his program have demonstrated, fluency can be dramatically improved through the kind of muscle-memory-strengthening practice that’s a proven way to enhance all manner of physical skills.

The stress and fatigue points are especially important because they surely explain some kinds of Biden difficulties that seem to be getting more common – specifically, repetitions of certain words or initial sounds of words, and unusual word choices. Here’s why:

Both behaviors amount to ways in which stutterers try to deal with whatever difficulties they’re facing at the moment. The repetitions generally represent efforts to generate enough momentum to power or zoom through the sound in question, or through the next word (which is anticipated to cause a problem). The unusual word choices are examples of “word substitution” – finding a word that’s expected to be easier to pronounce than the one the speaker was originally planning to use, either because he or she is worried about the repetition thing, or because they fear they won’t be able to voice even the initial sound of that word. (Even stranger – stutterers can also worry about words coming further down the verbal road.)

Because I’ve got a decent vocabulary, I’ve gotten pretty skilled at the kind of word substitution that’s difficult even for many other stutterers to detect (though fortunately, because I have learned to produce more fluent speech, I don’t have to use this ploy often any more). But even for someone with such advantages, word substitution can be challenging especially because in order to maintain a reasonably normal speech flow, very rapid decisions are needed. And feelings of slight panic, or memories of past panic and failed word substitution efforts, are never far out of mind.

Moreover – and finally, we get to the fatigue and stress angles – all of these responses are much more difficult to execute for stutterers who are tired and.or stressed, for reasons that should be obvious. What should also be obvious – 77-year olds tend to tire more often than younger folks, and the problem almost never gets better. (I’m 66 and certainly don’t have the energy I had at 56 or even 60. And sometimes it affect my speech.)

Political campaigns, moreover, can get pretty stressful, especially for office-seekers who aren’t killing it. And elderly political candidates can therefore face special problems. So although these Biden difficulties don’t necessarily demonstrate cognitive decline, they do point to emerging age-related issues that are matters of genuine concern.

One prime example of a Biden stumble that I believe has been described mistakenly as a moment of debility: his troubles speaking about healthcare issues during the Democratic debate in Detroit last July. Then, when it was imperative that he rebound from faring poorly in a previous event, and live up to his then-frontrunner status, his speech deteriorated significantly after a strong start.

The story is very different, however, when it comes to Biden episodes like declaring that mass shootings in El Paso, Texas and Dayton, Ohio took place in Houston and Michigan; or claiming that he visited survivors of the Parkland, Florida shootings before the tragedy took place, along with assuming he was still Vice President in 2018. (Keep in mind that gun violence has been a special Biden interest.) Nor does stuttering explain confusing the late British Prime Minister Margaret Thatcher both with a much more recent successor (Theresa May) – not to mention German Chancellor Angela Merkel. Ditto for babbling about the authorization of U.S. military force in the Middle East. (Keep in mind: He’s supposed to be a foreign policy expert.) 

It’s similarly tough to square stuttering claims with mistaking New Hampshire for Vermont and Nevada with New Hampshire and Iowa for Ohio, or calling Fox News anchor Chris Wallace “Chuck,” or calling “Super Tuesday” “Super Thursday,” or telling voters this year that he’s running for the Senate, or claiming that the Democrats can win back the House of Representative this year (they already hold it), or boasting that his campaign “chooses truth over facts.”  (For the cites, see here, here, here, here, here, here, and here.)  

A few of these can be written off to the kind of mixups heard from time to time from people of every age. But not all of them. Moreover, these supposed gaffes are qualitatively different from the type for which Biden has long been known – which have almost always involved indiscretions. 

And a particularly revealing sign that age is producing both more of these misstatements and even more stuttering (due to the fatigue and/or stress factors): In a long Atlantic piece on Biden’s speech (cited above and written, interestingly, by a reporter who stutters himself), the former Vice President said,

“he hasn’t felt himself caught in a traditional stutter in several decades. ‘I mean, I can’t remember a time where I’ve ever worried before a crowd of 80,000 people or 800 people or 80 people—I haven’t had that feeling of dread since, I guess, speech class in college.’”

These Biden problems by no means disqualify him for the Presidency. Even if I’m right about growing signs of cognitive decline, they may stabilize, or worsen very slowly. But they also may accelerate. And however difficult this year’s Democratic primaries have been for Biden, the general election will surely be far worse. (See this article on the physical and emotional strains suffered by recent White House hopefuls.)

So obviously, these issues need to be discussed openly and frankly – and of course for all the candidates. For now that above all mean that not all of Biden’s lapses should be written off as “simple” stutter.

Im-Politic: The China/Biden Opportunity Sanders Needs to Seize

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Bernie Sanders, China, China virus, coronavirus, Democrats, drugs, election 2020, health security, Im-Politic, Jobs, Joe Biden, manufacturing, Michigan primary, pharmaceuticals, technology, Trade, World Trade Organization, WTO

Since he emerged as a major rival to Hillary Clinton for the 2016 Democratic presidential nomination, Vermont Senator Bernie Sanders has been criticized for lacking a killer instinct. Specifically, he’s generally declined to attack his competitors as harshly as many supporters and supposed political pros would like. (The articles here and here nicely frame the history.)  

I don’t feel qualified to weigh in on this debate, but with a crucial primary coming up in Michigan tomorrow, it’s clear to me that the progressive standard-bearer could use more of a killer instinct on a big policy issue: former Vice President Joe Biden’s record on China issues.

Sanders has decided to assail Biden on his overall trade record, which makes sense considering the latter’s support for the kind of trade deals and policy decisions (like NAFTA, the North American Free Trade Agreement, and the rush to expand commerce of all kinds with China) that have hammered workers in manufacturing-heavy states like Michigan. 

But his focus is far too narrow, especially considering developments over the last few years and particularly the last few months. For the Democratic Socialist is solely emphasizing the job and wages loss resulting from agreements like the Biden-endorsed deal that supported China’s entry into the World Trade Organization (WTO) in 2001 – which granted Beijing vital legal protection against unilateral American efforts to fight its protectionism and other forms of economic predation. That mattered greatly because many of these Chinese transgressions persisted post-WTO and by all accounts have worsened under the regime of Xi Jinping.

It’s now clear, however, that the China threat is even worse because it’s far broader; that Biden as long-time Senator from Delaware in particular flunked those non-economic policy tests, too; and that the biggest arguably was the WTO vote. So despite signs from polls that Americans generally (though not necessarily in manufacturing centers) aren’t as opposed to pre-Trump trade policies as in the past, the same surveys make clear that all manner of China-related concerns are mounting, and that therefore hitting Biden for supporting measures that have clearly increased Beijing’s wealth, power, and consequent capacities to threaten key U.S. interests in many fields would succeed roaringly.

Indeed, Biden’s stated justification in 2000 for favoring the crucial WTO decision looks especially and dangerously loopy nearly two decades later, when a Chinese cover-up helped the coronavirus become a serious threat to the United States and the rest of the world at large, when American leaders have finally become aware of how the industrial offshoring accelerated by the WTO move has made the nation shockingly dependent on healthcare products from China, and when the PRC’s official press has just published an article all but threatening to plunge the United States into coronavirus hell by blocking the export of the drugs and their chemical ingredients needed to fight the pandemic.

For in 2000, Biden made clear that he mainly supported China’s entry into the trade body – and ending the policy of granting Beijing tariff breaks only on an annual basis and only if its repressive human rights practices improved – in the belief that this new approach would both promote political and economic freedom in China and help “encourage” its “development as a productive, responsible member of the world community.”

Moreover, Biden not only guzzled the kool-aid of claims that WTO entry would foster greater political as well as economic freedoms in China. He argued that such change was exactly what most of China’s leaders intended. These dictators, he argued,

“have consciously undertaken–for their own reasons, not ours–a fundamental transformation of the communist system that so long condemned their great people to isolation, poverty, and misery. They have been forced to acknowledge the failure of communism, and have conceded the irrefutable superiority of an open market economy.”

Biden was right in noting that economic reforms already by then undertaken had greatly improved living standards for enormous numbers of Chinese. But he was completely wrong in believing that “this growing prosperity” would start bringing more democratic reform and a move toward genuinely open markets. Nor did he foresee that because China’s economic progress depended on amassing ever greater trade surpluses in ever more sophisticated products – and especially with the United States, the world’s biggest, most lucrative market – much of the rise in Chinese living standards would come at the expense of American domestic manufacturing and its workforce.

In fact, Biden explicitly scoffed at fears that WTO entry would bring about “the collapse of the American manufacturing economy, as China, a nation with the impact on the world economy about the size of the Netherlands, suddenly becomes our major economic competitor.”

But in light of China’s growing international belligerence particularly under Xi Jinping, it’s disturbing that the then-Senator – supposedly a foreign policy expert – was equally blind to the likelihood that a WTO-fostered “emergence of a prosperous, independent, China on the world stage” would enable China to flout “international norms in the areas of trade, security, and human rights” whenever it chose, rather than strengthen China’s loyalty to that “liberal global order.” 

Sanders and other critics of the WTO decision rightly derided all of these declared convictions. But I’ve yet to hear him spotlight the dangers to America’s global technology leadership and therefore national security (including health security) generated and continually worsened by the richer, stronger China made possible by the policies supported by Biden and the rest of the bipartisan globalist establishment that ran Washington, D.C. – and U.S. China policy – before Donald Trump’s election as President. P.S. A China that achieved its strategic goals could decimate American living standards still further.

This presidential campaign has already featured so many ups and downs, and so many front-runners who have risen and fallen, that Michigan probably won’t be  Sanders’ last chance to mount a broad-brush attack on Biden’s atrocious China record. (Just FYI, as of this afternoon, the polls show Sanders getting thumped.) The continuing coronavirus fallout could create further opportunities for him as well.

What is clear, however, and to large, growing numbers of Americans, is that enabling the rise of China ranks as one of the most potentially calamitous mistakes in American history.  And the sooner Sanders starts exploiting Biden’s role in enabling it (which continued during the do-nothing Obama administration), the better.     

(What’s Left of) Our Economy: U.S. Productivity Growth Keeps Lagging Historically, but has Bumped Under Trump

Tags

Barack Obama, election 2020, labor productivity, manufacturing, multifactor productivity, non-farm business, productivity, Trump, {What's Left of) Our Economy

Sure, they’re lagging indicators, and don’t tell us much, if anything, about whatever coronavirus effect the American economy might face. Still, today’s new U.S. government data on labor productivity both say something about where the economy has been until recently before pandemic fears hit, and provide a noteworthy point of comparison between the record of President Trump and his White House predecessor, Barack Obama. And although the news for the economy isn’t good at all (especially for manufacturing), the findings should cheer Mr. Trump and his supporters.

The figures, from the Department of Labor’s Bureau of Labor Statistics (BLS), cover labor productivity – a gauge of output of a good or service per each hour a worker has been on the job trying to create it. It’s the narrower of the two productivity measures calculated by BLS (the other, multifactor productivity, reports on output as a function of many more inputs, like capital and technology), but it’s released on a timelier basis. And the latest numbers not only bring the story up to the fourth quarter of last year (preliminarily). They also incorporate revisions – some of which go back to 1947!

As a result, it’s now possible to take a new look at the nation’s productivity performance during the last three economic recoveries – the most economically valid, apples-to-apples way of comparing trends over significant time spans.

And here’s where the news isn’t good, as will be made clear from the following two tables. The first shows the cumulative productivity changes during those last three expansions before these latest revisions:

                                                                        Non-farm business    Manufacturing

1990s expansion (2Q 1991-1Q 2001):              +23.74 percent      +45.86 percent

bubble expansion (4Q 2001-4Q 2007):             +16.59 percent      +30.23 percent

current expansion (2Q 09 thru final 3Q 19):     +12.74 percent        +9.42 percent

The second shows the same developments with the revisions.

                                                                         Non-farm business    Manufacturing

1990s expansion (2Q 1991-1Q 2001):              +23.75 percent        +44.68 percent

bubble expansion (4Q 2001-4Q 2007):             +16.58 percent        +30.92 percent

current expansion (2Q 09 thru final 3Q 19):     +12.74 percent          +6.32 percent

current expansion (2Q 09 thru prelim 4Q 19):  +13.44 percent          +6.11 percent

The big takeaway is that although the revisions leave the picture for both non-farm businesses (BLS’ main definition of the American economic universe) and manufacturing unchanged in terms of a long and substantial productivity slowdown, they downgrade manufacturing’s performance during the current recovery substantially. In fact, industry’s labor productivity growth is now reported to be about a third slower than previously thought.

Since it’s a presidential campaign year, I thought a Trump-Obama comparison would be appropriate, and here’s where the good news for Trump World, at the very least, comes in.

                                                                   Non-farm business          Manufacturing

last 12 Obama quarters                                 +3.31 percent                -2.27 percent

first 12 Trump quarters                                 +4.17 percent                -0.05 percent

The time frames used make sense because they represent identical numbers of quarters for each President that are also the closest to each other in the current (expansionary) business/economic cycle. The productivity performance under Mr. Trump hasn’t been gangbusters historically speaking for either sector of the economy. But it’s clearly been better than that registered during the most comparable Obama period.

Since most serious students of the economy agree that there’s lots of room for improvement in measuring productivity growth (especially for the services sectors), it would be quite the stretch for Mr. Trump to claim credit for these favorable numbers. Yet when have such substantive considerations ever stopped politicians from pretending they wield such power – for economic good or ill? So unless the productivity arrows start moving down markedly, Americans might finally hear something from the President about productivity before too long.

Im-Politic: Bernie’s Conspiracy Charges are Wrong (So Far)

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Bernie Sanders, caucuses, Democratic Party, Democrats, election 2020, Im-Politic, Joe Biden, moderates, primaries, progressives, Super Tuesday

As must be clear to RealityChek readers, I’m no fan of Joe Biden’s. What may be less clear is that I have a soft spot for Bernie Sanders. That’s largely because the Democratic Socialist Senator from Vermont is the only one of his party’s current presidential candidates that I’ve dealt with personally – and in small meetings on the subject, and generally speaking, he’s been terrific on U.S. trade policy.

But even though I’ve always considered the former Vice President’s record on this key matter – and most others – miserable (see, e.g., here), it’s clear now, in the wake of the Super Tuesday Democratic primary results, there’s no case to be made that the party’s establishment-arians are effectively rigging the campaign against the more left-leaning Sanders, either because they abhor his policies or because they think he’ll blow the chance they see of defeating President Trump and performing well in House and Senate races this fall.

Instead, yesterday’s voting, along with the totals from earlier primaries and caucuses, show what polls have consistently found: Most Democratic voters have remained moderate, or at least so describe themselves. Relatively few view themselves as being “very liberal. And these Democrats, as so many candidates have pointed out, “don’t want a revolution.”

Of course, because politics and policy are never totally, or even largely, separate, the results of Election 2020 can also be read as supporting an alternative interpretation, but one that’s also been consistently found in opinion surveys: Even many Democrats who might align best with Sanders (or other progressive candidates, like Massachusetts Senator Elizabeth Warren), seem to be voting for moderates because they view them as the best hope for ousting Mr. Trump.

Moreover, the Democratic results debunk another major belief about Democratic primary voters in another curious way. The conventional wisdom has long held, and maintained this year, that activists closest to the party’s left-wing fringe would dominate turnout – or at least vote at rates considerably greater than their actual representation in Democratic ranks. (Similar conclusions have been drawn about Republicans, as this popular textbook demonstrates.) But the clear majorities voting for Biden and other moderate candidates throughout the campaign to date indicate that even many progressive voters are holding their ideological noses and pragmatically backing the candidates they believe will perform best against the President this fall.

And perhaps most interestingly, the Super Tuesday and other results place in an unusually interesting light the Democratic Party’s recent shift to the progressive end. Not that the shift hasn’t taken place. But at least according to the Pew survey linked above and this Gallup data series, it’s still left moderates and liberals with a slim majority. And these voters seem to be turning out this election year.

Two big related questions remain, though. First, there’s no doubt that moderate Democratic candidates like Biden and recent drop-outs Pete Buttigieg, the South Bend, Indiana mayor, and former New York City mayor Michael Bloomberg, thought that the progressives held the upper hand in primary voting. That’s why they’ve pandered so heavy-handedly on issues like race relations and gender identity and immigration issues. Now that the Super Tuesday votes are (nearly all) in, will survivor Biden tack back to the center?

Second, even if he does, has the former Vice President made too many far-out statements on such matters already that they’ll still be effective ammunition for President Trump?

I don’t doubt that if the Democratic establishment thought that it needed to or could rig the process against Sanders, it would. Recent history makes that clear. I also understand that the quick campaign exits and Biden endorsements of Buttigieg, Bloomberg, and Minnesota Senator Amy Klobuchar look suspicious to Sanders World (and maybe to much of its Warren counterpart?). And of course, if Biden falters for whatever reason (health, a genuinely troubling gaffe, his son Hunter’s fishy activities in Ukraine and China), this establishment could spring into action in the back rooms once again.   

But at this point, unless you’re totally paranoid, you need to recognize that the Democratic primaries are reflecting what the party’s voters, not its bosses, want. And their obvious message is that moderate Joe Biden is “the One.”

Im-Politic: Bloomberg in China’s Pocket?

Tags

China, election 2020, Financial Times, Im-Politic, Ivanka Trump, Laura Ingraham, Michael Bloomberg, Michael Kranish, Trump, Washington Post, Xi JInPing

Boy! I thought Michael Bloomberg’s business’ dependence on China was worrisome when I first read this early January Financial Times report on the billionaire Democratic presidential candidate’s lucrative conference-holding business in the People’s Republic!

Then thanks to a segment last week on Laura Ingraham’s Fox News cable talk show, I checked out this Washington Post piece on the same subject – which I somehow missed – and I’ve gotten even more worried. And since Bloomberg has been rising steadily in the polls in recent weeks, and is spending a big chunk of his fortune on the campaign, you should be worried, too.

Now I know what at least some of you are thinking: President Trump and his family have done a lot of business with China, too. So why single out the former New York City mayor?

Here’s why: First, I strongly agreed that it was unacceptable for presidential daughter Ivanka Trump to stay involved in any way with her fashion business after her father’s election, especially since it sourced products from China and sought to sell in the Chinese market. She finally agreed with this (widespread) view and shut down the brand in mid-2018. So that’s one big difference between the Trumps and Bloomberg, since the latter is still making big bucks in China.

More important, though – with Trump tariffs still in place on literally hundreds of billions of dollars worth of prospective Chinese exports to the United States, and the President having made life tough for China in numerous other major ways ranging from prosecuting telecommunications giant Huawei to strongly supporting Taiwan in word and deed, can anyone seriously believe that Mr. Trump has been soft on Beijing?

Bloomberg, by contrast, clearly has, and his record of panda-hugging is not only several years old, but has continued unabated during his run for the White House. The aforementioned Post article spells out in detail the pro-China positions he’s taken, which include opposition to the Trump tariffs (without explaining how he’d deal with Chinese trade abuses he’s acknowledged) and the insistence that China’s communist leader Xi Jinping “is not a dictator” (made as Beijing was cracking down on Hong Kong’s democracy protests and imprisoning on a massive, concentration camp-like scale members of the country’s Muslim Uighur minority group.

And when his ongoing business dealings with the Chinese are examined in detail, it’s easy to see why Bloomberg has worked so hard to remain in Beijing’s good graces. For example, as the Post reported, Bloomberg ”expanded one of his company’s financial indexes, which could steer $150 billion into China while earning his firm an undisclosed amount in fees.”

In effect, this move awarded the Chinese government and the various commercial and financial entities it controls a Good Housekeeping Seal of Approval valued immensely by big institutional investors who control trillions of dollars worth of savings around the world.

Moreover, according to Post reporter Michael Kranish, “mainland China accounts for 1 percent of Bloomberg LP’s [$10 billion in annual] revenue and Hong Kong for another 4 percent.”

As for those China conferences, the Financial Times revealed that

“live events now make up nearly 15 per cent of all revenues for the news division that sits within the billionaire’s financial data company.

“This has grown from less than 1 per cent in 2014, thanks largely to the success of one event: the New Economy Forum. Mr Bloomberg launched the conference last year, aimed at connecting global business leaders with the Chinese elite.

“Only in its second year, the NEF already makes up about 65 per cent of all live events revenue for Bloomberg Media, according to a spokesperson.”

And if you still doubt China’s importance to Bloomberg’s coffers, consider that, as Kranish wrote, Bloomberg “has led efforts since 2015 to make it easier for U.S. companies to trade in Chinese currency, a move embraced by China’s largest banks” – which are of course all run by the state.

Bloomberg’s successes in public opinion surveys anyway has led to charges that he’s trying to buy the presidency. At least equally important to ask is whether the Chinese have bought Bloomberg.

(What’s Left of) Our Economy: Newest Numbers Show Trump’s Real Wages Problem Continues

Tags

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

The big economic message sent by today’s official U.S. data on inflation-adjusted wages is highly concentrated in the so-called benchmark revisions – which adjust the results going back to 2015. And the big political message sent by these revisions is that President Trump’s economic record still suffers from a serious real wage problem – especially in the manufacturing sector, and especially compared with his predecessor, Barack Obama, whose supposed economic failures Mr. Trump has made a major campaign issue.

To be sure, the newest (and unrevised) January statistics weren’t great news for Trump-World, either. Total private sector pay in real terms inched up only 0.09 percent month-to-month, and the annual increase was a mere 0.64 percent. Between the previous Januarys, constant dollar private sector wages improved by a much faster 1.77 percent. (The Labor Department doesn’t track public sector wages, because their levels and growth are determined overwhelmingly by government decisions, and therefore supposedly say little about the state of the labor market or of the entire economy.)

The story for blue-collar workers (called “production and nonsupervisory workers” by the Labor Department and abbreviated here “N/S”) was only a little better. Their real wages flat-lined on month in January, but year-on-year they were up 0.75 percent – more strongly than overall private sector wages, and thereby in synch with numerous observations that pay at the lower end of the scale is rising faster than it is at the upper end.

In manufacturing, however, that picture is more mixed. Overall after-inflation manufacturing wages dipped by -0.09 percent sequentially in January, though they advanced by 0.74 percent year-on-year. That rise was better not only than that of total private sector workers, but than of its own performance the previous year – which saw zero increase in these wages.

Price-adjusted wages for manufacturing’s blue collar workforce, however, fared only negligibly better than for all manufacturing employees – flat-lining versus a small decline. And year-on-year they increased by less than a third the rate of pay for all manufacturing workers (0.23 percent) and much more slowly than the year before (1.37 percent).

The good news for Mr. Trump – the revisions put more of a shine on his job creation record over the last two years, as shown in the tables below. (Keep in mind that they only take the story through December, 2019 – because today’s January figures haven’t been revised yet.)

                                                                     Unrevised

                                     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%

                                                                      Revised

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

Year-on-year, 2019:        +0.73%           +0.85%           +0.74%        +0.45%

Year-on-year, 2018:        +1.40%          +1.74%                 0%          +1.03%

Interestingly, though, the biggest changes came for all private sector workers. And the updates make the picture for blue-collar manufacturing workers slightly gloomier.

But the revisions still left the Obama years’ real wages performance looking better than those of the Trump years – a comparison that might be raised frequently during this election year. The 34-month periods have been chosen because that’s the amount of time Mr. Trump has been in office since his first full month in the White House (February, 2017. Further, the two time periods are right next to each other in the current business cycle.

The bottom line? The gap between the two administrations closed for all private sector workers and blue collar private sector workers. But it widened in the manufacturing sector.

                                                                Unrevised

                                  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%

                                                                  Revised

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

1^st 34 Trump months:    +2.71%            +3.05%          +0.65%      +2.65%

last 34 Obama months: +3.49%            +3.97%          +3.44%      +3.34%

And finally, the impact of the revisions on real wages trends during the current economic recovery, and on the previous two expansions:

                                                                                 Unrevised

                                                             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%

                                                                                 Revised                      

                                                              Private   N/S private    Mfg      N/S mfg

1990s expansion (2Q 91-1Q 01):            n/a          +6.51%       n/a        +1.81%

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

current expansion (2Q 09 – present):  +6.70%     +7.01% +   1.59%    +2.77%

The big takeaways, as I see them: The real wage performance of the current recovery looks somewhat better than previous thought – except for blue-collar manufacturing paychecks. And the widely admired 1990s expansion looks better for blue-collar private sector workers in toto but worse for their manufacturing counterparts.

Several recent polls show Americans to be unusually happy about the state of the economy and their own personal situations. (For the latest, see here.) These real wage figures indicate that it’s not yet entirely clear why.

Im-Politic: Why It’s Time to Probe the Bidens

Tags

Burisma, corruption, election 2020, Hunter Biden, Im-Politic, impeachment, Joe Biden, Lindsey Graham, Mykola Zlochevsky, Obama administration, The New Yorker, Trump, Ukraine, Viktor Shokin, Yuriy Lutsenko

Yesterday morning, South Carolina Republican Senator Lindsey Graham made clear his determination to investigate the activities of Hunter Biden in Ukraine. That’s good news for two closely related reasons. First: The decision by the son of former Vice President and current Democratic presidential candidate Joe Biden to work for a big, politically connected company in that notoriously corrupt country was pretty central to the recently concluded (for now?) Trump removal effort, and there are still lots of loose ends that need tying up.

Second, no one has yet adequately explained why Biden Junior continued to earn tens of thousands of dollars monthly from Ukraine energy company Burisma, and why the company remained in business, for the entire time that Senior was supposedly pushing hard on behalf of the top stated Obama administration priority of ending the graft and similar abuses that had long hampered Ukraine’s economy and transition to real democracy.   

Junior’s lucrative service on Burisma’s board strongly influenced the impeachment effort because of the major role it played in spurring President Trump to seek Ukraine’s help in probing a matter that was certain to affect the Biden Senior’s chances of winning the White House. 

The President and his supporters claim that looking into the Bidens was justified because the big bucks Junior he made from Burisma at the least looked like a classic conflict of interest, and at the most could have corruptly influenced American policy while Senior was running the Obama administration’s operations toward the country on a day-to-day basis.

And as I’ve noted, far from Senior’s presidential candidacy justifying shielding him from official scrutiny, it actually calls for special attention – unless Americans aren’t supposed to care that a future chief executive might be in some foreign oligarch’s hip pocket. That would be quite a position to take for those who have portrayed President Trump as Russian leader Vladimir Putin’s compromised puppet. The Biden connection of course logically also warrants similarly special Trump attention to Burisma, rather than to Ukraine’s many other unmistakably corrupt entities.

For their part, Trump opponents insist that the President was simply trying to smear a possible rival in this fall’s general presidential election.

It’s true that impeachment and removal supporters leveled other Biden-specific charges at Mr. Trump – for example, attacking his decision to use his personal lawyer, former New York City Mayor Rudolph Giuliani, as his main Ukraine sleuth, rather than going through standard Justice Department channels. But the first Article of Impeachment, the one alleging abuse of power, focused tightly on the claim that the President endangered America’s national security (by delaying military aid needed for Ukraine’s defense against Russia) for personal gain (improved reelection chances).

In this regard, the President’s opponents have noted that there’s no evidence indicating that the Ukraine policy of Biden Senior and the Obama administration permitted Junior’s job to influence American statements or actions. Indeed, they maintain that throughout his time as Ukraine point man, Senior championed exactly the kind of Ukraine corruption fighting efforts that threatened whatever dirty work they acknowledge Burisma was up to. And specifically, they point to Senior’s demands – clearly, by the way, reflecting U.S. policy –  that Ukraine fire a prosecutor thought to be soft on corruption and replace him with someone they considered truly committed to cleaning up the system – including the situation at Burisma.

But this is where the pro-Bidens story gets fuzzy, at best. The reason? Because more than four years after Biden demanded the canning of Ukraine Prosecutor General Viktor Shokin, and after Yuriy Lutsenko came on the job, Burisma is still open for business. Moreover, the co-founder widely fingered as its corruption mastermind, Mykola Zlochevsky, is still in charge. The only price the company has paid for its alleged misdeeds was a small ($7 million) fine for tax evasion. And this four-year period of course includes the year-plus that passed between Biden’s December, 2015 ultimatum and the Obama administration’s last day in office.

As a result, Junior was paid handsomely (some $83,000 monthly at least for some period of time, according to this Reuters report) from the time he joined Burisma (in April, 2014) till his departure (August, 2019). When was Senior put in charge of Obama administration Ukraine policy? Early 2014. And Mr. Trump’s opponents truly believe that there’s “nothing to see here”? And that it’s not the slightest bit fishy about Senior huffing and puffing about corruption in Ukraine but never actually blowing that house down (or at least actually denying Ukraine the $1 billion in international loan guarantees – including to the energy sector of which Burisma was a part – he threatened to cut off unless Shokin was pink-slipped) – which left Burisma free to keep stuffing Junior’s bank account?

Then add in this tidbit from The New Yorker (not a publication often favorable to Mr. Trump). In an article leaving no doubt that Senior had long been financially stressed despite his political prominence, author Adam Entous reported, “Hunter saw himself as a provider for the Biden family; he even helped to pay off Beau’s law-school debts.”

Therefore, it’s easy to see how it would have been easy for Senior “to deal with Hunter’s activities by largely ignoring them” – as stated in the New Yorker piece linked above.  Except he didn’t just ignore them.  His aides actively rejected numerous attempts by Obama administration officials to raise concerns about the subject – including by Geroge Kent, one of the State Department officials who testified at the House Intelligence Committee’s impeachement hearings.  That sounds like they worked for someone who actively didn’t want to know.   

It’s still possible that Senior was simply an ineffective Ukraine corruption fighter when it came to Burisma, rather than one who was conveniently indifferent. But since that question remains unanswered, since Senior is still running for the White House, and since Junior’s dealings with China during Senior’s Vice Presidency also seem to have contributed to the family’s considerable rise in net worth (see that above-linked New Yorker story for these details, too) how could anyone reasonably object to the proposition that it’s time to probe the Bidens?  

(What’s Left of) Our Economy: Manufacturing Jobs Revisions Burnish Trump’s Employment and Trade War Record

Tags

Barack Obama, Bureau of Labor Statistics, China tariffs, election 2020, Jobs, manufacturing, manufacturing recession, metals tariffs, tariffs, trade war, Trump, {What's Left of) Our Economy

However much of a pain it is for us data geeks to slog through monthly U.S. jobs reports incorporating multi-year revisions, President Trump, his supporters, and everyone rooting for the domestic manufacturing sector (which should be everyone) should be grateful for the latest such exercise.

For the results show that the economy’s manufacturing job creation record under his administration has been better on the whole even than previously believed. Moreover, that conclusion also is justified for manufacturing employment since the President’s tariff-heavy trade policies began in earnest (in April, 2018, the first full month when the global duties on imports of steel and aluminum were in effect).

Not that this morning’s release from the Bureau of Labor Statistics came up all roses for Trump-World and U.S.-based industry. Manufacturing lost 12,000 net jobs sequentially in January – the worst such total since October’s 41,000 (when payrolls were dragged down by the strike at General Motors). Ignoring that anomalous figure, the January manufacturing jobs shrinkage was the worst monthly decline since August, 2016’s 21,000 nosedive.

Moreover, the year-on-year gain of 26,000 was the weakest since the 17,000 annual improvement in February, 2017 (the President’s first full month in office).

But check out the revisions, and the record during the Trump years improves in some key respects – especially compared with that compiled under his predecessor, Barack Obama. The table below shows how the revisions change the picture between the two administrations – an issue bound to matter greatly during the current presidential campaign. They begin with 2015 (the first year for which the totals were updated) and proceed through last month. The figures for the post-Trump tariffs period and the Trump administration’s tenure stop in January (because that’s when the effects of the benchmark revisions stop. The left-hand column shows the pre-revision results and the right-hand column the new. All figures are seasonally adjusted (the statistics most closely followed by economists):

                                            Old manufacturing job change      New change

2015:                                                  +30K                                  +70K

2016:                                                   -45K                                    -6K

2017:                                                +196K                               +185K

2018:                                                +284K                               +264K

2019:                                                  +46K                                 +58K

final 34 Obama months:                  +270K                               +259K

first 34 Trump months*:                 +478K                               +479K

since tariffs*                                   +197K                               +231K

(April, 2018):

21 months before:                          +320K                               +253K

*thru December, 2019

To me, the most important comparisons involve those between the two administrations, and those between the pre- and post-tariff periods of Mr. Trump’s presidency.

The Obama and Trump figures show how manufacturing employment changed during their periods in office closest together in the current (expansionary business) cycle – the comparison that yields the best apples-to-apples results. The Obama period ends with January, 2017 (the former President’s last – near-full month in office and the Trump period begins with February, 2017 (his first full month in office).

And as made clear above, the growth in manufacturing payrolls was a bit weaker during the Obama period than previously reported, and the growth during the Trump period ever-so-slightly stronger.

As for the impact of Mr. Trump’s tariffs, although these numbers don’t isolate the industry sectors likely to be most seriously affected (especially the metals-using industries – which I’ll examine shortly), the results are instructive in particular for the China duties’ effects, since they’re so widely, if unevenly, spread throughout domestic manufacturing.

Since the Trump tariffs’ advent, 21 revised data months passed through December, 2019, so the best comparison is that with the 21 months preceding them. And interestingly, the revisions show that although manufacturing’s hiring pace indeed has slowed since the first full tariff month, they’ve slowed much less markedly (by 8.70 percent rather than 38.44 percent).  And that means that manufacturing employment has improved more since the tariff era began than previously thought (by 231,000 instead of 197,000).  

Manufacturing trends won’t be working in Mr. Trump’s favor politically this year unless its recent weakness (which may not technically have been a recession) ends – especially on the hiring front. Sure , he could in theory blame the troubles of Boeing and its safety-related woes, which could last many months more. But voters are unlikely to be interested.

Economically speaking, however, the President can legitimately contend that, contrary to endless predictions, American industry and indeed the entire nation are weathering the trade conflict with China in particular just fine – and claim that the modest costs have been well worth the strategic goal of checking the economic and technological progress of this dangerous dictatorship.