(What’s Left of) Our Economy: Mainstream Media Never Trump-ism on Trade Gets Weirder and Weirder

Tags

China, consumers, inflation, Mainstream Media, retail, Reuters, tariffs, Trade, trade war, Trump, {What's Left of) Our Economy

It’s like they can’t help themselves. Even when Mainstream Media organizations and reporters conduct detailed research showing that President Trump’s tariffs-heavy China trade policies aren’t hurting U.S. consumers in the slightest, they feel compelled to issue dire warnings about the possibility. If you doubt me, check out this Reuters piece from the day before Thanksgiving on how the levies are affecting America’s major retailers.

Reuters, to its credit, actually took the trouble to look at prices to gauge the impact of the Trump levies by examining actual prices – as opposed to economists and to analysts from think tanks and other groups bought and paid for by the corporate offshoring lobby, who toss out apocalyptic numbers based on bogus-at-best methodologies.

The findings, “based on a pricing study conducted for Reuters by retail analytics firm Profitero, which examined online prices from seven large retailers for 21,000 products”?

From the October and November, 2018 to the same months this year, for goods “in key holiday categories including appliances, electronics, toys and video games,” leading big box and other retailers overall have held prices “lower than the average rate of inflation during the same period….”

More specifically, at “Walmart, Walmart-owned Jet.com, Amazon, Target Corp, Best Buy, GameStop, and Staples,” electronics prices rose somewhat more than prices in the U.S. economy across the board, but prices for the other products rose at much lower rates, and toys and video games actually became less expensive in absolute terms.

Nor did Reuters try to hide these results, as the headline reads “Top U.S. retailers absorb tariff pressure ahead of holiday shopping season,” and the same point was made in the lead paragraph.

Nonetheless, the report felt compelled to warn that “America’s trade war with China threatens to push up product prices, which could hurt consumer spending this holiday season, a period which makes up nearly 40% of annual revenue for many retailers.”

Sure that’s true in a technical sense. But this sentence is also about as responsible and accurate as one stating that “disciplining a child threatens to alienate him or her” when there’s no sign of that outcome developing, and when in fact all the evidence shows the discipline working. And as for hurting consumer sales, that currently seems far-fetched as well, based on what’s known about the current holiday shopping season. How do I know this? I read it in another Reuters article.

Moreover, it’s legitimate to ask why Reuters didn’t draw the opposite conclusion from its research: The Trump administration and tariff supporters so far have been right in insisting that consumers could be shielded from tariff-induced inflation, and in fact would be, because retailers know full well that they lack the leverage needed to force prices up, and would need to offset them themselves – by eating the extra costs, offsetting them by becoming more efficient, or some combination of the two.

Yes, this would have entailed writing something positive about the President and his trade policies.  But noxious as that might seem to the Mainstream Media, it would have gad the added virtue of being true. 

Im-Politic: China Experts Who Obviously Ain’t

Tags

China, experts, foreign policy, Im-Politic, national security, Reuters, Trade

The United States has to be the only country on earth (excepting dictatorships with no respect for facts or the truth) in which individuals who have been massively wrong on major issues can be considered “experts.” Think that’s wrong or overstated? Then how do you explain this recent Reuters report on a draft letter apparently signed by dozens of specialists on China policy?

Over the weekend, the news agency ran an item contending that “Scores of Asia specialists, including former U.S. diplomats and military officers, want President Donald Trump to rethink policies that ‘treat China as an enemy,’ warning the approach could hurt U.S. interests and the global economy, according to a draft” seen by reporters Michael Martina and Jonathan Landay.

The letter, intended for Mr. Trump and members of Congress, states that the roughly 80 signers (more are being sought) are “very deeply troubled by Beijing’s recent behavior….”

More specifically, “The Chinese government’s increase in domestic repression and control over private companies, ‘its failure to live up to its trade commitments, greater efforts to control foreign opinion and more aggressive foreign policy’ are ‘serious challenges for the rest of the world,’” according to the draft and some Reuters paraphrasing.

But as is typical of much China-related commentary lately, the signers “also believe that many U.S. actions are contributing to the downward spiral in relations….”

Reportedly, the letter continues, “U.S. efforts to treat China as an enemy and decouple it from the global economy will damage America’s international role and reputation and undermine the economic interests of all nations. The U.S. fear that Beijing will replace the U.S. as the global leader is exaggerated.”

That last claim underscores what’s most absurd about this whole exercise – and about taking it as a serious commentary about the Trump China approach. It’s perfectly legitimate – and necessary – to debate how the United States should handle the multi-dimensional China challenge. But the idea that the group of signatories described here has anything worthwhile to contribute, much less that its collective experience entitles it to a special hearing, flunks the laugh test by miles.

For although only two signers were named in the Reuters piece, it’s a safe bet that exactly none of them, during their long years and even decades of public service, predicted China’s spectacular rise to date – at least not on a remotely timely basis. Had they detected this possibility and alerted policymakers, does anyone seriously think that American policy would have continued literally showering wealth and advanced (often defense-related) technology on China? Not unless you believe the entire U.S. China-related policy establishment had been completely bought off by Chinese interests. (Ahem!)

Especially nutty is the contention that “The current U.S. response, however, is counterproductive because by treating China as an existential national security threat, it weakens the influence of moderates in Beijing who know that ‘a cooperative approach with the West serves China’s interests.’”

For if anything has been sadly clear about American foreign policymaking in recent decades, it’s that Washington’s ability to identify moderates and other factions inside dictatorships, and to manipulate them to promote or defend U.S. interests, is exactly zilch. (Google “Iran Contra affair” and “Ngo Dinh Nhu” if you’re unfamiliar with those two especially important and pathetic examples.)

But one ray of hope did emerge from this Reuters story: It’s not clear when the final version will be released. That creates the possibility that the signers will recognize how uniquely unqualified they are to offer anyone China policy advice, and have the good sense to keep their incompetent (at best) mouths shut.

(What’s Left of) Our Economy: Will Trump Fall for an Old Chinese Trade Trick?

Tags

Asian financial crisis, Canada, China, currency manipulation, Mexico, NAFTA, North American Free Trade Agreement, Reuters, tariffs, Trade, trade war, Trump, value-added tax, VAT, {What's Left of) Our Economy

Three cheers for Reuters! In a September 7 report that I somehow missed, the news agency provided a valuable reminder about a protectionist trick that China has trotted out once again to offset the impact of new U.S. tariffs. In fact, this ploy can be so important that failing to address it could negate many of the benefits created either by the American levies or by any potential agreement by Beijing to curb or eliminate its predatory economic practices. Worse, this stratagem has created loopholes capable of undermining the impact of other recent Trump trade initiatives, like the effort to renegotiate the North American Free Trade Agreement (NAFTA).

The trick in question entails China increasing the value-added tax (VAT) rebates it provides for exports of literally hundreds of products. VATs, of course, are imposed by countries on any goods and services consumed within their borders (including imports), but rebates (refunds) are typically provided to companies for domestically produced goods that are exported. As a result, VATs act as a tariffs and as export subsidies.

China has long used this system for promoting exports, and according to Reuters has just decided to tweak the policy in order to offset the impact of new and impending American tariffs by increasing the rebates that will be received by exporters of 397 categories of goods. As a result, Chinese entities relying on sales of these products to the United States will be relieved of at least some of the new costs these products will ultimately carry. And the export flows could survive relatively intact.

At this point, you might be wondering why the World Trade Organization (WTO) hasn’t been used to combat this subterfuge. Two related reasons: First, nearly all its member states (along with those of its predecessor organization, the General Agreement on Tariffs and Trade) use it. And second, no doubt as a result, the contemporary global trading regime has always viewed VATs as purely domestic taxes that lie beyond its purview.

China, incidentally, has successfully employed VATs to keep prospering at other economies’ expense and escape any global opprobrium in one major instance two decades ago. When much of East Asia fell into financial crisis, and export-reliant economies throughout the region were devaluing their currencies in a frantic effort to stay afloat, fears emerged that financially healthier but just as export-dependent China would follow suit to preserve its global market share. After all, Beijing’s dramatic weakening of its yuan several years earlier played a big role in triggering the crisis to begin with.

In 1997 and 1998, however, the peak crisis years, China held the line – and actually received copious praise for good global citizenship. What almost no one noticed was that the Chinese maintained their newly grabbed export competitiveness by boosting VAT rebates.

Today, this move could not only benefit Chinese trade flows, but enable Beijing to realize many of the gains of further currency devaluation without incurring any of the costs – e.g., triggering major new capital flight; increasing the costs of imported inputs still needed by the Chinese manufacturing base to turn out finished goods; and risking a defeat in the global propaganda wars.

Failure to deal adequately with VATs moreover, could endanger President Trump’s objective of improving NAFTA from a U.S. standpoint. For both Mexico and Canada use this system, too, and there’s no public record of American negotiators even raising the subject.

Fool me once, shame on you, fool me twice, shame on me, goes an old adage. It will apply in spades to the Trump administration if it allows its needed efforts to overhaul U.S. trade policy to be weakened by a continued failure to face up to foreign VATs.

(What’s Left of) Our Economy: Trump Metals Tariffs Coverage has Just (Again) Been Exposed as Largely Fake News

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ABC News, aluminum, Associated Press, Bloomberg, CBS News, CNN, durable goods, Financial Times, Jobs, Mainstream Media, manufacturing, Marketwatch.com, metals, metals-using industries, NBC News, PBS, private sector, Reuters, steel, tariffs, The New York Times, The Wall Street Journal, Trade, Trump, Washington Post, {What's Left of) Our Economy

In case you still think that President Trump’s charges of fake news-peddling by the national news media are fake news themselves, consider this: For the second time in two months, if you decided to hold your breath till you found a Mainstream Media item reporting that the America’s metals-using industries have been major job-creation leaders, not laggards, you’d have died.

Such omissions are especially important because since the Trump administration began imposing tariffs on steel and aluminum imports (in March), the media has been filled not only with predictions of massive employment and production losses in metals-using manufacturing (because the prices of two noteworthy inputs for these industries was bound to rise), but with accounts of actual economic damage that numerous companies in these sectors have already suffered. (See here and here for just two examples.) 

Last month, I noted that, for all these accounts, authoritative government data (through June) showed that the metals-using industries’ performance by both measures had both generally improved, and had indeed both generally improved more than job creation and output in the rest of manufacturing.

Since then, more steel and aluminum tariffs were put in place (mainly because some major U.S. trade partners initially exempted from the tariffs were subjected to the levies). And what did we learn from the newest jobs report, which was released last Friday, and took the story through July (on a preliminary basis)? That the metals-using industries continue to set the national job-creation pace for the entire economy, not simply for manufacturing.

Here are the percentage gains for employment in some major sectors of the economy from April (the first month during which any metals tariffs effects would have been felt) through July except for the industries noted:

entire private sector: +0.53 percent

overall manufacturing: +0.73 percent

durable goods: +0.96 percent

fabricated metals products: +1.10 percent

non-electrical machinery: +1.43 percent

automotive vehicles & parts: +1.06 percent

household appliances (thru June): -0.63 percent

aerospace products & parts (thru June): +1.05 percent

Unfortunately, it was not possible to learn any of this from America’s leading news organizations. For these figures were completely ignored.

To their credit, some leading media mentioned that Trump tariffs and trade war fears in general seemed to be having no effect on manufacturing job creation overall despite industry’s exposure in principle to the fall-out. These included the Associated Press, The New York Times, the Financial Times, CNN, ABC News, and NBC News. Yet the metals-using sectors were never mentioned.

As for The Wall Street Journal, the Washington Post, and CBS News, they made no connection of the tariff/trade war-manufacturing job connection whatever.

And several news organizations actually tried to rationalize the unexpected results. Reuters, for example, claimed that “With manufacturing payrolls increasing by the most in seven months, the moderation in hiring reported by the Labor Department on Friday likely does not reflect the rising trade tensions between the United States and other nations including China.”

According to PBS, “Economists say it is too early to tell whether the Trump administration’s tariffs on imported steel and aluminum are having a significant effect on manufacturing jobs.”

Bloomberg and Marketwatch.com weren’t as disingenuous, but still felt compelled to contend that rising trade tensions continued to cast a long shadow on the job markets’ future – without reporting that, if anything, new U.S. policies and statements were so far having exactly the opposite effect on parts of the economy most exposed to existing metals tariffs.

But no account of press coverage of these Trump trade policies would be complete without observing an equally weird development: Neither the President nor anyone else in his administration has pointed to the outperformance of the metals-using industries, either.

In a little over a week, the nation will get its next major opportunity to gauge the impact of metals and other tariffs, and future possibilities thereof – when the Federal Reserve releases the July industrial production data, which includes detailed statistics on inflation-adjusted manufacturing output. Will the Mainstream Media finally zero in on the sectors where the tariff rubber hits the road? At this rate, Americans should be grateful if they simply ended the string of job loss and other Chicken Little metals tariff impact stories.

Following Up: More Illegal Immigrant Coddling from the Mainstream Media

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crime, deportation, ICE, illegal immigration, Im-Politic, Immigration, Immigration and Customs Enforcement, Mica Rosenberg, Open Borders, Reade Levinson, Reuters, Trump, zero tolerance

Last year, I wrote some posts on how some Mainstream Media journalists and other closet Open Borders backers have taken to minimizing the seriousness of crimes like drunk driving when the perpetrators are illegal immigrants facing deportation. Unfortunately, if a recent Reuters “Special Report” is any indication, a new wave of such pieces could be on the way due to the uproar over the Trump administration’s treatment of Central Americans streaming toward the U.S. border with children in hopes of entering America through grants of asylum.

The main ostensible criticism of the President’s initial “zero tolerance” approach to this latest migrants’ surge is that it indiscriminately applied the practice of “family separation” long used by American law enforcement when dealing with domestic criminal suspects apprehended with minors to foreigners whose only transgression appeared to be attempting to cross the border under false pretenses. But supporters of more lenient immigration policies have also been accusing the administration of treating the illegal immigrants already residing in the United States in unduly harsh ways by seeking to deport unauthorized aliens who have broken no other laws – or at least no other serious laws.

It’s that supposed qualification that’s the problem; as I showed, in one instance, the Washington Post‘s coverage of recent deportation data demonstrated that its reporters and editors don’t consider drunk driving a serious crime. In May, the D.C. metro area was treated to another (non-media) example of such illegal immigrant coddling: An area non-profit that provides legal aid for detained immigrants facing deportation proceedings actually rejected taxpayer funding for such activities offered by a local county government because it would have been prevented from using these resources where the accusations entailed fraud, distribution of heroin, second- and third-degree burglary and obstruction of justice….” Apparently these didn’t make this organization’s “serious crimes” list, either – or that, originally, of Maryland’s Montgomery County.

On June 20, Reuters reporters Mica Rosenberg and Reade Levinson – and their editors – clearly attempted to show in a lengthy piece just how common such alleged abuses of illegals has become. In their words, although the President has claimed that “his strengthened immigration-law enforcement” efforts have targeted violent criminal aliens,

“as his administration has expanded its dragnet under a series of executive orders, ICE has locked up thousands of people…with little or no criminal history, with deep roots in their communities, who present little flight risk.

“In earlier years, ICE [the U.S. Immigration and Customs Enforcement agency] would have released many of these people on bond soon after their arrest, allowing them to live with their families while awaiting legal proceedings that can take years. Now, ICE is denying bond for many of those people and pushing to keep them in detention for the duration of their cases….”

And as is often the case in journalism, Reuters sought to personalize its story by describing the actual experience of one illegal immigrant whose life in the United States has been disrupted by the new policies.

According to the authors, El Salvador native Morena Vasquez had entered the United States illegally as a teenager, and had lived in Georgia for 23 years before a traffic stop “turned into a nightmarish entanglement in the toughened-up immigration policies of U.S. President Donald Trump – an experience that tore apart the life she had spent more than two decades building for herself and her family.”

Near the beginning of their article, Rosenberg and Levinson described Vasquez in terms that were plainly intended to generate sympathy. She had held “two jobs – teaching Spanish at a preschool, as well as the office-cleaning gig.” She has six children – ages four to 17. “[A]ll of them [are] U.S. citizens, [and] had to relocate in the middle of the school year to live near their ailing grandfather in another town, far from the detention center.”

Yet over the next year, “Vasquez languished in the crowded detention center. She repeatedly asked an immigration judge for bond so she could await her day in court back with her family. And repeatedly, bond was denied as ICE argued that she was a flight risk. Even after a judge ruled that she had the right to stay legally and permanently in the United States, she was kept locked up for five more months as ICE fought the decision.”

It was only much deeper into the story, that the reader learns that when she was arrested last year, Vasquez’ “record showed two convictions in 2014 for driving without a license and other traffic violations. It also showed that in 2004, Vasquez was sentenced to probation for contributing to the delinquency of a minor after a child she was babysitting wandered too close to a highway.”

In addition, “Police records show that because Vasquez had failed to appear in court for one of her traffic tickets, ICE in 2015 had issued a ‘detainer’ for her arrest – a notice to local authorities of her illegal presence in the United States. Cooperating police departments automatically turn over to federal authorities any immigrants with outstanding detainers who are picked up in their jurisdictions.” Indeed, it was precisely because she skipped that court appearance, ICE and a local judge denied her bond request in the belief she was a flight risk.

Now let’s be clear: Vasquez is obviously no hardened criminal. But on top of living in the country illegally, she hasn’t been a model “citizen,” either. And if after a clearly lengthy (and surely expensive) probe aimed at showcasing the supposed injustices of the new Trump policies, Reuters decided to use her as their poster-person, readers are entitled both to ask “Is this the best you got?” — and to wonder how many other allegedly needless victims of the Trump policy shift are in fact eminently deserving of deportation?

(What’s Left of) Our Economy: The Deepening Mystery of Trump’s NAFTA Strategy

Tags

autos, Canada, light trucks, manufacturing, Mexico, NAFTA, Nick Carey, North American Free Trade Agreement, Reuters, ROO, rules of origin, tariffs, Trade, Trump, wages, {What's Left of) Our Economy

The Trump administration’s approach to the North American Free Trade Agreement (NAFTA) keeps getting murkier. And although I agree that keeping the other parties to a negotiation off balance from time to time, and holding cards close to one’s vest, can be excellent tactics, the latest apparent twist in American policy doesn’t appear to be explained by such considerations.

Let’s start with the excellent insight contained in a Reuters article today about one of the centerpieces of NAFTA reform identified by the administration – the rules of origin (ROO) for autos and other light-duty passenger vehicles. These treaty provisions have been rightly targeted by Team Trump negotiators from the standpoint of U.S. interests because motor vehicles and parts comprise such a large percentage of the goods exchanged throughout North America, and because since NAFTA went into effect, contrary to its supporters’ promises, the American automotive sector has become less, not more globally competitive.

The NAFTA ROO are ostensibly aimed at encouraging automotive manufacturing inside North America and currently require that 62.5 percent of a vehicle’s value come from within the free trade zone in order to be exempted from tariffs. The administration’s response is widely described as a toughening of these rules because it would raise this threshold to 75 percent.

But there’s always been one huge catch that I’ve been tweeting about consistently: Unless the tariff penalty imposed on vehicle and parts-makers outside North America is greatly increased, boosting the duty-free content threshold will have little impact on these companies’ production and employment decisions. The reason? The current NAFTA external tariff on these products is only 2.5 percent. (Just FYI, this point was first made during the original NAFTA debate, in this Economic Strategy Institute study to which I contributed modestly.)

(What’s Left of) Our Economy: The Dubious Labor Shortage Claims Keep Coming

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BLS, Bureau of Labor Statistics, healthcare, Immigration, labor shortages, nurses, nursing, Reuters, wages, West Virginia, {What's Left of) Our Economy

Perhaps some day we’ll find out when it apparently became mandatory for journalists to write articles about supposed labor shortages in the American economy without once mentioning the word “wages.” For now, RealityChek will have to settle for citing yet another example of this phenomenon that contains an interesting twist: The reporter in question did look at some data from the Bureau of Labor Statistics (BLS), the U.S. Labor Department division that gathers and publishes employee compensation figures. But she still left out BLS numbers on wages and salaries.

According to Jilian Mincer of Reuters:

“Hospitals nationwide face tough choices when it comes to filling nursing jobs. They are paying billions of dollars collectively to recruit and retain nurses rather than risk patient safety or closing down departments, according to Reuters interviews with more than 20 hospitals, including some of the largest U.S. chains.

“In addition to higher salaries, retention and signing bonuses, they now offer perks such as student loan repayment, free housing and career mentoring, and rely more on foreign or temporary nurses to fill the gaps.”

And as indicated above, she is clearly familiar with the BLS as a reliable source of information on the American employment picture. Later in the article, she writes that “Nursing shortages have occurred in the past, but the current crisis is far worse. The Bureau of Labor Statistics estimates there will be more than a million registered nurse openings by 2024, twice the rate seen in previous shortages.”

But for some reason, she didn’t mention the BLS wage data – a crucial omission because everything we (think we) know about economics tells us that when anything, including labor, is scarce, its price (pay in this case) will rise until the greater rewards attract an adequate supply. Common sense supports this analysis, too. If employers are scrambling to fill jobs, it stands to reason they’ll offer better pay to make sure they and not their competition attract the needed workers.

And what the BLS data tell us is that no such scramble is taking place – or at least not enough of one to bid up wages. The last year for which detailed data for occupations (as opposed to sectors of the economy) is available is 2016. The numbers say that last year, the mean (average) national annual wage for registered nurses was $72,180 before inflation, and the mean hourly wage was $34.70.

Now let’s go back five years. The 2011 numbers? An annual mean wage of $69,110 and an hourly median wage of $33.23 per hour. So pay by these key measures wages rose by 4.44 percent over those five years and 4.42 percent, respectively. And again, that’s before adjusting for inflation. Does that sound like the hospitals and other healthcare providers that employ nurses are desperate for more?

Even stranger: Nursing pay has been rising more slowly than pay overall during this period. Between 2011 and 2016, mean annual wages for all occupations were up 9.73 percent, and mean hourly wages were up by 9.75 percent. That’s more than twice as fast! (See the same links that contain the national nursing figures.)

In fairness, Reuters’ Mincer looks at an additional nursing issue – the labor situation in rural areas, which she describes as especially dire. And it does seem to make some intuitive sense that small towns and farm communities would have special difficulties staffing medical facilities. But the numbers don’t seem to back up that story, either.

The author spent considerable space reporting on West Virginia. But the BLS numbers show that, between 2011 and 2016, both hourly and average nursing pay advanced by 4.50 percent. That’s only slightly more than the national rates of increase.

Yes, Mincer’s piece did talk a lot about healthcare providers offering “higher salaries, retention and signing bonuses [and] perks such as student loan repayment, free housing and career mentoring….” It’s entirely possible that she’s right. (The government doesn’t keep detailed occupational figures on these scores.) It’s also entirely possible that the data that is tracked by BLS is way off base. But when you’re claiming “labor shortage,” shouldn’t you at least mention that the most comprehensive facts available about base pay say nothing of the kind?

Moreover, buried in the article – indeed at the end of the quote immediately above – is a clue to the apparent paradox: Mincer’s observation that the healthcare industry is relying “more on foreign…nurses to fill the [employment] gaps.”

If true, that would make clear that lax immigration policies are still enabling nurses’ employers to suppress pay by easing any shortages in the domestic labor force by hiring immigrant nurses who will work for significantly lower pay than native-born workers. And it would suggest that the Cheap Labor lobby encompassing so many American businesses is still able to keep these wage-suppressing global labor pipelines open by peddling a steady stream of warnings about bogus labor shortages to gullible journalists.

Im-Politic: Mainstream Media Again Foster NAFTA Myths and Think Tank Corruption

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Canada, donors, Google, Im-Politic, Japan, Korea, Mainstream Media, media, Mexico, NAFTA, Navistar, New America, North American Free Trade Agreement, offshoring, Peterson Institute for International Economics, Reuters, tariffs, think tanks, Trade, trucks, Trump, Washington Post, Woodrow Wilson Center

Although Donald Trump’s presidency might still turn out to be a watershed for U.S. trade policy, it already seems clear that trade policy coverage from the Mainstream Media will remain uniformly terrible, and unmistakably slanted toward the conventional approach that candidate Trump promised to disrupt. As recent articles from Reuters and the Washington Post remind, the bias takes both subtle and non-subtle forms.

Both pieces deal with the talks to renegotiate the North American Free Trade Agreement (NAFTA), which have resumed in Washington, D.C. this week. Despite its failings, Reuters correspondent Sharay Angulo’s article on the talks’ possible impact on multinational truck manufacturers contained some important information. For instance, she reported that 98 percent of the trucks exported from Mexico are sent to the United States and Canada – which oddly precedes a claim that most of these truck companies “have a similar strategy of building in Mexico to export to countries other than the United States.”

We also learn from her that more than half the “original parts” of U.S. firm Navistar’s Mexico-made trucks come from the United States and Canada (although this information comes from Navistar itself, and like other company-specific information re NAFTA, offshoring, and trade in general, so far can’t be independently verified). In addition, the article (again citing Navistar statistics) states that the firm exports fewer than half its Mexico-made vehicles to the United States – which seems to differentiate it sharply from its competitors.

Where the report veers sharply from the rational is in its unquestioning acceptance of the claim that “Higher tariffs on imports or reduced trade flows would raise the cost of production and of exporting to the United States. That would make trucks more expensive for all Navistar’s customers….”

What’s somehow missed by the author (and all the “experts” consulted by Reuters who allegedly agreed with this contention) is that this result would unfold only if Mexico retaliated against any Trump administration tariffs on its exports to the United States with new levies of its own that would hit manufacturers like Navistar. Given Mexico’s heavy dependence on parts imports to support its export-oriented truck and other industrial production, why on earth would its government take this step? Such retaliation would “raise [its] costs of production and of exporting to the United States” yet higher. Talk about cutting off one’s nose to spite one’s face.

Also missed by Angulo – how higher Mexico production costs could well achieve Mr. Trump’s revamp objectives by shifting truck manufacturing back to the United States. She’s correct in suggesting that low tariffs on Mexico exports to the United States may not suffice. But a logical (and seemingly obvious) implication is simply that higher tariffs will be needed.

The less subtle form of bias came in an October 6 Washington Post article previewing the latest NAFTA talks, and although it’s a more common variety, it was especially flagrant. One big problem is the authors’ (and their editors’) decision, with a single exception, to quote only critics of the Trump administration’s efforts.

Thus, readers are presented with the perspective of a Canadian trade lawyer, a former Mexican trade negotiator who now works for a D.C.-based consulting firm with many offshoring companies as clients, a Mexican business lobbyist who officially advises his country’s NAFTA negotiators, a former Canadian official, a former Obama administration economic aide, and four specialists from two Washington, D.C.-based think tanks.

A second big, and related problem – at a time when the intellectual integrity of such think tanks has come under a positively stygian cloud due to the uproar over New America’s firing of several researchers who ran afoul of big donor Google, the Post piece makes absolutely no mention that both of these organizations depend heavily on contributions from both companies and foreign government organizations with vital stakes in maintaining the NAFTA status quo.

For example, the latest info from the Mexico Institute of the Woodrow Wilson Center (itself a recipient of U.S. taxpayer funding), base for one of the specialists showcased in the piece, reveal that the organization receives contributions from no less than six big Mexican companies, plus Wal-Mart (a big importing business) and the main trade association of the American pharmaceutical industry – which manufactures in Mexico for export to the United States.

The Canada Institute, where the other quoted Wilson Center specialist is based, lists the Canadian government as a donor.

As for the other think tank relied on by the Post for (supposedly objective) expertise, the Peterson Institute for International Economics (PIIE), among its U.S. and foreign multinational funders that produce in Mexico for export to the United States are Toyota, GE, Caterpillar, IBM, Ford, GM, Samsung, John Deere, Procter & Gamble, and Mitsubishi.

PIIE also takes contributions from three foreign government entities that help their countries’ companies engage in export-oriented operations in Mexico: the Korea Institute for International Economic Policy, the Korea Development Institute, and the Japan Bank for International Cooperation.

In addition, in recent years, the Peterson Institute has also cashed big checks from Mexican building materials giant Cemex, and from the U.S. Chamber of Commerce – the organizational spearhead of America’s corporate offshoring lobby.

As I’ve repeatedly emphasized, the point here is neither that these think tanks’ findings and opinions lack merit, or they or their donors have no right to weigh in on important trade and other policy debates. It’s that these ostensible research groups should make clear who’s paying their rent – and that if they continue with what I’ve called deceitful idea laundering on behalf of their sponsors, the press should call them out.

The Mainstream Media, however, keeps failing to fulfill this responsibility – which can only deepen already profound suspicions that it’s abandoning its watchdog role and turning into an establishment lapdog instead.

Im-Politic: Trump Derangement Syndrome Breaking Out on the Supreme Court?

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Balkan wars, Bosnia, citizenship, deportation, Im-Politic, Immigration, Immigration and Citizenship Services, John Roberts, Muslims, naturalization, refugees, Reuters, Serbs, Srebrenica, Stephen Breyer, Supreme Court, Trump

Question: When is serving in a military unit that’s committed horrendous war crimes the legal equivalent of getting a speeding ticket? Or absentmindedly bringing a key-chain pen knife into a government office building? Or maybe even jaywalking? Answer: When the U.S. Supreme Court nowadays is evaluating an immigration case.

Think I’m kidding? Then check out this Reuters account of a hearing held by the high court that dealt with an immigrant from Bosnia who was deported and stripped of her citizenship last October. The reason? She had lied on her application to enter the country as a refugee. Now, Divna Maslenjak is seeking to restore the status quo ante. And according to the Reuters piece, several Justices are concerned that in defending the U.S. government’s previous decision (made, mind you, under the Obama administration), President Trump’s Justice Department is laying the groundwork for revoking citizenship for false statements that had no significant influence on the original refugee decision.

Nothing intrinsically wrong with that. Everyone, for example, forgets things or gets details confused. These lapses are particularly understandable in the chaotic conditions with which most refugees struggle. Nor could any reasonable person quibble with Chief Justice John Roberts concern that the Trump administration position (even though it’s drawn straight from the U.S. Citizenship and Immigration Services’ naturalization form) could enable the government to strip citizenship from naturalized Americans for lying or for omitting information about minor legal infractions that even the most scrupulously law-abiding folks everywhere are hard-pressed to avoid completely.

As Roberts noted, “in the past he has exceeded the speed limit while driving. If immigrants failed to disclose that on a citizenship application form asking them to list any instances of breaking the law, they could later lose their citizenship, the conservative chief justice said. ‘Now you say that if I answer that question ‘no,’ 20 years after I was naturalized as a citizen, you can knock on my door and say, ‘Guess what, you’re not an American citizen after all?'”

Associate Justice Stephen Breyer, who is viewed as considerably more liberal than Roberts, agreed, “noting he had once walked into a government building with a pocketknife on his key chain in violation of the law.”

Added Breyer: “It’s, to me, rather surprising that the government of the United States thinks that Congress is interpreting this statute and wanted it interpreted in a way that would throw Into doubt the citizenship of vast percentages of all naturalized citizens.”

Fair enough. But the lie in question did not concern a speeding ticket or an innocent failure to check the contents of one’s pockets. Nor did it concern an intrinsically legal but possibly questionable act that had no important bearing on Maslenjak’s application for refugee status. In fact, it concerned a subject central to her request: Despite telling the government that, as ethnic Serbs, she and her family feared ethnic persecution by Bosnia’s Muslims, she never mentioned that, as the Reuters article reports, her husband (who had received refugee status when she did) served “in a Bosnian Serb Army brigade that participated in the notorious 1995 massacre of 8,000 Muslims in the Bosnian town of Srebrenica.” And P.S.: He lied about the matter as well.

Now it’s possible that the husband was completely uninvolved in this, or any other, atrocity (another subject about which the naturalization form inquires). It’s also possible that, whether he was complicit or not, that’s what Divna, his wife, believed. Or he simply could have lied to her. If he was innocent, he might have been afraid that the relevant American authorities simply would not have believed him. Certainly, no one could blame inhabitants of countries ruled by oppressive and/or corrupt governments for not trusting U.S. officials right off the bat.

But apparently, neither spouse has offered any such excuses. Nor did any of the Justices apparently mention them. Both the Maslenjaks and Roberts and Breyer (and possibly some of their colleagues) seem to be focused on technicalities – and perhaps the former and their lawyers are counting on the Trump administration’s “anti-immigrant” reputation and the resulting backlash to help sway the Court.

The Justices’ final decision isn’t due until late June. It could be a great test of whether they, like so much of the rest of the country, have succumbed to Trump Derangement Syndrome.

Im-Politic: Beyond Parody with Uber-Pundit Thomas Friedman

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China, corruption, foreign students, higher education, Im-Politic, Immigration, Muslims, Reuters, tech workers, The New York Times, Thomas Friedman, travel ban, Trump

Last March, I took one look at a column by Thomas Friedman on then-presidential candidate Donald Trump’s trade policies and concluded that the multiple New York Times Pulitzer winner must have been hacked. Any other interpretation would have meant that Friedman was either stunningly ignorant about these subjects or (at best) willfully ignorant.

A year later, it’s painfully obvious that either some impostor is still publishing pieces with The Times, or that Friedman is still reality-challenged. His March 29 offering contains the same kinds of trade fakeonomics and crackpot geopolitics as that piece I spotlighted last March. But even worse this time around are some out-and-out howlers about major implications of the Trump administration’s travel ban proposals.

According to Friedman, President Trump wants to “make it harder for people to immigrate to America, particularly Muslims. This…signals the smartest math and science students in the world to start their start-ups overseas and not in America. “

As evidence, Friedman writes that “NBC News reported last week that applications from foreign students, notably from China, India and the Middle East, ‘are down this year at nearly 40 percent of schools that answered a recent survey by the American Association of Collegiate Registrars and Admissions Officers.’”

In other words, could any Trump policy be more catastrophically dumb, especially over the long-term? The trouble is, when you look at these matters in any depth whatever, you realize how deeply silly these claims and fears are. In the first place, the idea that foreign students on U.S. college campuses are all or mainly or even disproportionately academic superstars is completely fallacious. And nowhere is it more fallacious than in the case of Chinese students.

For anyone knowing anything about contemporary China knows that it’s become one of the world’s leading plutocracies. The wealthy generally either make (or keep or lose) their fortunes depending on their connections with or via help from the Chinese government, or are comprised of political leaders themselves who have exploited their power and contacts to become millionaires many times over. Given the astronomical costs of American higher education (especially by the standards of even the typical Chinese urban – meaning relatively well-off – family), it could not be clearer that the main distinguishing characteristic of Chinese students on U.S. campuses is family money, not brains.

The money angle is further strengthened by admissions practices of so many American colleges and universities. After all, even well-endowed schools prize foreign students to a great extent because they’re wealthy enough to pay “full freight.” That is, they don’t need financial aid. Indeed, they’re profit centers. In fact, as I reported last October, a Reuters investigation found out that many Chinese students have gained access to American colleges and universities through payments to these institutions that can only be called corruption. In other words, their parents have bought their way in. Would most of this bribery be necessary if the kids were such geniuses?

Moreover, if you think that the money issue is confined to China, think again. For an expensive American college education is also far beyond the reach of most families in most of the rest of the world, too – especially the developing world.

As for the world’s math and science whizzes, especially from the Muslim world, avoiding the United States and choosing other regions and countries to open up businesses, ask yourself the simple question, “Like where?” Economically speaking, America’s growth prospects continue looking brighter – as they have for most of the current global recovery – than those of other major economies. The United States also offers among the world’s best levels of intellectual property protection.

And as for tech whizzes from the Muslim world, does Friedman really think they’re going to be increasingly welcome in, say, Europe, given its understandable anxieties about Islamic extremism and global terrorism? Japan and South Korea, it’s widely known, aren’t welcoming to any immigrants. And the idea that China, which has long battled Muslim separatists in its western regions, is going to open its doors wider just doesn’t pass the laugh test.

Canada and Australia are unmistakably examples of national economies that are both successful and immigration- (and refugee-) friendly. But I’ll take my chances on America retaining its competitive edge over them for many decades to come.

These kinds of gargantuan goofs and omissions would be bad enough coming from a run-of-the-mill journalist or even pundits. Coming from Friedman, they are nothing less than appalling. For his almost uniquely lofty status stems for the most part from his (supposedly) unique knowledge of how the world works in the most fundamental senses. Indeed, he’s especially well known for writing books purporting to know what the world’s becoming in the same fundamental senses. Columns like his latest indicate that Friedman at best should spend more time learning about the present than predicting the future.