(What’s Left of) Our Economy: U.S. Manufacturing Revival Plans Still Need Trump-like Tariffs

Tags

Buy American, carbon tariff, carbon tax, Dan Breznitz, David Adler, health security, infrastructure, Joe Biden, manufacturing, manufacturing trade deficit, research and development, supply chains, tariffs, taxes, technology, The New York Times, Trade, {What's Left of) Our Economy

I was thrilled to see today’s op-ed piece on U.S. manufacturing in The New York Times, and not just because co-author David Adler is a good friend. I was also thrilled to see it because a careful reading reenforces the essential notion that all the worthy proposals made by policy analysts and politicians lately (including apparent President-elect Joe Biden) on reviving industry will either come to naught or greatly underperform without steep, and indeed Trump-like, tariffs to shut a critical mass of imports out of the economy.

Those domestically-focused manufacturing revival measures have included more federal funding for research and developments, greater federal efforts to help smaller manufacturers in particular learn about and access research breakthroughs in academia and existing government labs, measures to help these smaller industrial firms access capital more easily, tax breaks to foster production and innovation in the United States, and more ambitious and better enforced Buy American requirement for federal purchases of manufactured products. In general, I’m strongly supportive, and have even criticized the Trump administration for giving them short shrift (even on the tax front, where the big 2017 cuts should have come with more investing and hiring strings).

From knowing David, I feel sure that he backs these intiatives, too; indeed, the article concentrates tightly on the Buy American slice of this agenda. And the piece gratifingly (but probably unknowingly) endorses an idea that I’ve made for many years, but that has gotten zero traction: requiring “all manufacturing industries to disclose how much of their sourcing and critical production takes place in the United States.” After all, how can Washington make the right manufacturing policy decisions when it relies so heavily for such crucial information from crumbs self-servingly cherry-picked by offshoring-happy companies themselves?

Yet as also suggested by David and co-author Dan Breznitz – who studies innovation policies at the University of Toronto – except for the Buy American proposals, the standard raft of manufacturing revival plans could work to  stimulate more production and supply, but pays inadequate attention to ensuring that all that supply is actually bought – which would eventually make companies think twice about producing more.

The authors place much stock in government’s ability to soak up this output, and so does Biden – who on top of making sure that more of what government currently purchases is American-made, has pledged to spend “$400 billion in his first term in additional federal purchases of products made by American workers, with transparent, targeted investments that unleash new demand for domestic goods and services and create American jobs.”

The former Vice President correctly contends that these measures will “provide a strong, stable source of demand for products made by American workers and supply chains composed of American small businesses.” The history of U.S. industrial policy also shows that early guaranteed government purchases helped new industries demonstrate the usefulness of innovative products that eventually interested the private sector and produced enormous new markets for their products on top of federal contracts. (Think “computers” and all the hardware and software used pervasively now not only in technology sectors but in virtually the entire economy.)

But U.S.-based manufacturers turned out just over $2.35 trillion worth of goods in 2019 (the last full pre-CCP Virus year). And the manufacturing trade deficit that year was $1.03 trillion. So unless it’s supposed that that 2019 level of domestic manufacturing production is remotely adequate (and clearly, the manufacturing policy reform supporters don’t), or unless they believe that government should buy much more of the output than the $400 billion Biden proposes over not one but four years (to sit in warehouses?), generating more private demand for industry’s output will be essential as well.

As indicated above, David and Dan Breznitz argue that more detailed, accurate labeling will help by enabling more consumers and private businesses to act effectively on their naturally strong preferences for Made in the USA goods – not only out of patriotism, but because of reasonable convictions that their quality and safety are superior. I remain all in favor, but the immense popularity of imports among both classes of customers (made clear by the huge and chronic manufacturing trade deficits) despite numerous news accounts over the years of shoddy, outright dangerous foreign-made products (especially from China), demonstrates that much more will need to be done to spur demand for U.S.-produced manufactures.

RealityChek regulars will not be the slightest bit surprised that I’m ruling out overseas demand as a promising net new source of customers for American domestic manufacturers. Unfortunately, the persistence of the huge manufacturing trade deficits is also evidence that most of America’s international trade partners are far too devoted to the health of their own industrial bases to permit major U.S. inroads. In fact, if anything, they’re likely to step up their own efforts to strengthen their own domestic industries by further curbing U.S. and other foreign competition. And that’s where the tariffs come in.

Not that David and Dan Bernitz, or Biden, overlook the need for U.S. market protection entirely. The former, for example, call for “Stopping predatory pricing by foreign manufacturers” – which entails slapping tariffs on these usually government-subsidized artificially cheap goods. The latter makes similar points, and has also mentioned a carbon tariff on products from countries that base their competitiveness on ignoring “their climate and environmental obligations.” (At the same time, Biden could use a similar levy to punish domestic companies that don’t measure up in his administration’s eyes climate-wise, leaving the net benefit to U.S.-based manufacturing minimal.)

Moreover, to ensure adequate domestic supplies of the healthcare goods needed to fight the next pandemic, simple stockpiling of products by government will be necessary. And since practically everything wears out over time, or becomes outmoded, lots of re-stockpiling will be necessary. Meanwhile, it should go without saying that many of the government purchases of manufactures will be used for critical national purposes – like repairing and building all kinds of traditional and technology infrastructure systems, and producing whatever new military equipment or refurbishing of old equipment the new Congress and the likely new administration wind up supporting.

But these are of course public purposes, and since the United States is still a strongly private sector-driven economy, that’s what’s inevitably going to determine the success of most manufacturing revival efforts. So unless manufacturing revivalists want government to play a veritably dominant role in production and consumption decisions, their strategy will employ tariffs – but not in a targeted, sector-specific, and reactive way, much less as an afterthought to domestic initiatives. Instead, they’ll be proactive, come in a flat-rate form, and stand high enough to encourage plenty of new market entrants that it makes sense to join established enterprises in vigorous, overwhelmingly domestic competition for America’s immense pool of customers.

Making News: (Re)Unveiling a Revolutionary U.S. Tax Policy Proposal

Tags

CCP Virus, coronavirus, COVID 19, deficits, fiscal policy, Henry George, Henry George School of Social Science, InsideSources.com, Land-Value Tax, LVT, Making News, municipal finance, recession, taxes, Wuhan virus

And now for something completely different. (Apologies to the Monty Python crew.)

As some of you may know, when I’m not blogging here at RealityChek or Tweeting like a house on fire, I’m serving as a Trustee of the Henry George School of Social Science. This economic education institution seeks to apply some of the truly revolutionary insights reached by George, a Gilded Age/Progressive Era American economist about issues of his day, that strongly resemble some of the biggest challenges of our own times – for example, the rise of economic inequality amid extraordinary wealth creation and technological progress, the replacement of so much productive activity with financial speculation, and the weakening of competition throughout American business as enormous industries grow more monopolistic.

George’s signature proposal was a “land-value tax” (LVT), which he wrote boasted great potential to penalize casino-type finance; reward productive investment and thereby foster production-based, broadly shared prosperity; and break up economically and politically dangerous concentrations of wealth.

Folks associated with the School and with “Georgism” have advocated for this proposal ever since, but we believe that the LVT creates yet another advantage that’s especially important today: Its adoption could place the finances of state and cities devastated by the CCP Virus-induced recession and collapse of tax revenues on a healthy, sustainable footing.

As a result, we’ve launched an effort to show exactly how the LVT could eliminate budget gaps in states and localities across the country, and I’m pleased to announce that the first of these offerings has just been published (as an op-ed I’ve co-authored) by the news syndicate InsideSources.com). Here’s the link.

Moreover, we’ve recently issued a policy brief containing much more data relating to New York City and New York State that you can read here. And in the coming weeks and months, we’ll be sending off locally customized versions of this piece to news organizations in dozens of financially squeezed regions, including detailed projections of exactly how much revenue entirely affordable LVTs could raise.

So keep checking in with RealityChek for info on these articles, and news of other upcoming media appearances and developments.

Im-Politic: Trump-ism Without Trump for America as a Whole?

Tags

"Defund the Police", allies, CCP Virus, China, climate change, coronavirus, court packing, COVID 19, Democrats, election 2020, enforcement, Executive Orders, filibuster, Green New Deal, Huawei, human rights, Im-Politic, Immigration, Joe Biden, judiciary, lockdowns, mask mandate, masks, metals, multilateralism, Muslim ban, Phase One, progressives, Republicans, sanctions, Senate, shutdowns, stimulus, Supreme Court, tariffs, taxes, Trade, trade wars, Trump, unions, Wuhan virus

Since election day, I’ve spent some time and space here and on the air speculating about the future of what I called Trump-ism without Donald Trump in conservative and Republican Party political ranks. Just this weekend, my attention turned to another subject and possibility: Trump-ism without Mr. Trump more broadly speaking, as a shaper – and indeed a decisive shaper – of national public policy during a Joe Biden presidency. Maybe surprisingly, the chances look pretty good.

That is, it’s entirely possible that a Biden administration won’t be able to undo many of President Trump’s signature domestic and foreign policies, at least for years, and it even looks likely if the Senate remains Republican. Think about it issue-by-issue.

With the Senate in Republican hands, there’s simply no prospect at least during the first two Biden years for Democratic progressives’ proposals to pack the Supreme Court, to eliminate the Senate filibuster, or to recast the economy along the lines of the Green New Deal, or grant statehood Democratic strongholds Puerto Rico and the District of Columbia. A big tax increase on corporations and on the Biden definition of the super-rich looks off the table as well.

If the Senate does flip, the filibuster might be history. But big Democratic losses in the House, and the claims by many veterans of and newcomers to their caucus that those other progressive ambitions, along with Defunding the Police, were to blame, could also gut or greatly water down much of the rest of the far Left’s agenda, too.

CCP Virus policy could be substantially unchanged, too. For all the Biden talk of a national mask mandate, ordering one is almost surely beyond a President’s constitutional powers. Moreover, his pandemic advisors are making clear that, at least for the time being, a sweeping national economic lockdown isn’t what they have in mind. I suspect that some virus economic relief measures willl be signed into law sometime this spring or even earlier, but they won’t carry the total $2 trillion price tag on which Democratic House Speaker Nancy Pelosi seems to have insisted for months. In fact, I wouldn’t rule out the possibility of relief being provided a la carte, as Congressional Republicans have suggested – e.g., including popular provisions like some form of unemployment payment bonus extension and stimulus checks, and excluding less popular measures like stimulus aid for illegal aliens.

My strong sense is that Biden is itching to declare an end to President Trump’s trade wars, and as noted previously, here he could well find common cause with the many Senate Republicans from the party’s establishment wing who have never been comfortable bucking the wishes of an Offshoring Lobby whose campaign contributions it’s long raked in.

Yet the former Vice President has promised his labor union supporters that until the trade problems caused by China’s massive steel overproduction were (somehow) solved, he wouldn’t lift the Trump metals tariffs on allies (which help prevent transshipment and block these third countries from exporting their own China steel trade problems to the United States) – even though they’re the levies that have drawn the most fire from foreign policy globalists and other trade and globalization zealots.

As for the China tariffs themselves, the latest from the Biden team is that they’ll be reviewed. So even though he’s slammed them as wildly counterproductive, they’re obviously not going anywhere soon. (See here for the specifics.) 

Later? Biden’s going to be hard-pressed to lift the levies unless one or both of the following developments take place: first, the allied support he’s touted as the key to combating Beijing’s trade and other economic abuses actually materializes in very convincing ways; second, the Biden administration receives major Chinese concessions in return. Since even if such concessions (e.g., China’s agreement to eliminate or scale back various mercantile practices) were enforceable (they won’t be unless Biden follows the Trump Phase One deal’s approach), they’ll surely require lengthy negotiations. Ditto for Trump administration sanctions on China tech entities like the telecommunications giant Huawei. So expect the Trump-ian China status quo to long outlast Mr. Trump.

Two scenarios that could see at least some of the tariffs or tech sanctions lifted? First, the Chinese make some promises to improve their climate change policies that will be completely phony, but will appeal greatly to the Green New Deal-pushing progressives who will wield much more power if the Senate changes hands, and who have demonstrated virtually no interest in China economic issues. Second, Beijing pledges to ease up on its human rights crackdowns on Hong Kong and the Muslims of Xinjiang province. These promises would be easier to monitor and enforce, but the Chinese regime views such issues as utterly non-negotiable because they’re matters of sovereignty. So China’s repressive practices won’t even be on the official agenda of any talks. Unofficial understandings might be reached under which Beijing would take modest positive steps or suspend further contemplated repression. But I wouldn’t count on such an outcome.

Two areas where Biden supposedly could make big decisions unilaterally whatever happens in the Senate, are immigration and climate change. Executive orders would be the tools, and apparently that’s indeed the game plan. But as Mr. Trump discovered, what Executive Orders and even more routine adminstrative actions can do, a single federal judge responding to a special interest group’s request can delay for months. And these judicial decisions can interfere with presidential authority even on subjects that for decades has been recognized as wide-ranging – notably making immigration enforcement decisions when border crossings impact national security, as with the so-called Trump “Muslim ban.”

I know much less about climate change, but a recently retired attorney friend with long experience litigating on these issues told me that even before Trump appointee Amy Coney Barrett joined the Supreme Court, the Justices collectively looked askance on efforts to create new policy initiatives without legislating. Another “originalist” on the Court should leave even less scope for ignoring Congress.

The bottom line is especially curious given the almost universal expectations that this presidential election would be the most important in recent U.S. history: A deeply divided electorate could well have produced a mandate for more of the same – at least until the 2022 midterms.

(What’s Left of) Our Economy: October Costs Manufacturing Some Jobs Momentum

Tags

(What's Left of) Our Economy, automotive, CCP Virus, coronavirus, COVID 19, election 2020, Employment, fabricated metal products, food products, Jobs, Joe Biden, machinery, manufacturing, metals, motor vehicle parts, NFP, non-farm jobs, non-farm payrolls, private sector jobs, recession, regulation, tariffs, taxes, Trade, transportation equipment, Trump, Wuhan virus

The manufacturing jobs picture revealed in this morning’s October official U.S. jobs report was a classic glass-half-empty/half-full story. But for the first time since the employment rebound from its CCP Virus-induced lows, the gloomier view seems to have the edge – though a modest one. The main reason: In October, the rate of cumulative manufacturing job creation fell slightly behind that of the U.S. government’s entire employment universe (so-called non-farm payrolls, or NFP), and of the private sector.

Domestic industry increased its employment level on net by 38,000 in October on a sequential basis. That figure represented a decrease from the September total – which has been revised down from 66,000 to 60,000. But it’s an improvement over August’s also downwardly revised 30,000 total.

In addition, as opposed to dominating the manufacturing jobs picture for good and ill, as it has during the pandemic recovery period, automotive jobs, rose by a mere 1,400. The downward revision in combined vehicle and parts payrolls in September, however (from 14,300 to 7,700) did account for more than all of the total downward manufacturing revision for the month.

October’s manufacturing net jobs-creation leaders were fabricated metals products (7,200), food manufacturing (6,200), primary metals (6,000), and machinery (3,900). The first two categories enjoyed their second straight month of relatively strong job improvement, while the primary metals gain amounted to an important turnaround from September’s 3,400 net employment loss.

At the same time the October machinery results – important because that sector influences so much manufacturing activity overall, and because of its close connections to non-manufacturing industries like agriculture and construction) – were much less impressive than the 12,600 employment rise of September. Worse, this figure itself was downgraded from the initially reported 13,800.

The only significant October jobs loser in manufacturing was transportation equipment. This large category – which includes automotive – shed 2,400 jobs on net. The big problem here was motor vehicle parts, where employment fell by 2,800.

October’s employment progress means that manufacturing overall has regained 742,000 (54.44 percent) of the 1.363 million jobs it lost during the worst of the CCP Virus economic slump of March and April. (Those earlier job losses represented 10.61 percent of the last pre-virus – February – manufacturing employment level.)

As of October, non-farm payrolls total had regained 12.070 million (54.47 percent) of the 22.160 million total decrease they suffered in March and April. So although by this definition, overall U.S. employment plunged by 14.53 percent during the virus low point – more proportionately than manufacturing) — the rate of its jobs rebound is now slightly faster.

Faster still has been the bounceback in private sector jobs. Non-government employment (whose status is much more revealing of the economy’s fundamentals than government employment) fell by 21.191 million in March and April combined – greater relative losses (16.34 percent) than experienced either by manufacturing or the non-farm sector. But its strong October performance mean that it’s regained 12.317 million of these position on net – an increase of 58.12 percent.

But as if the CCP Virus and its decimation of the economy haven’t created enough uncertainties for manufacturing employment (and for the economy as a whole), this week’s Election 2020 results could further muddy the waters – especially if the White House changes hands. Despite October’s jobs slowdown, industry’s employment and output have held up well, due no doubt significantly to President Trump’s tariff-centric trade policies and domestic overhauls in taxes and regulations. The Trump manufacturing record pre-virus has also been strong. Would a Biden administration reversal of these moves put U.S. manufacturing back behind the eight-ball? Or would it find new alternative growth fuels for industry?

Making News: New Article on Why I Voted for Trump

Tags

Big Tech, Black Lives Matter, censorship, China, Conservative Populism, conservatives, Democrats, economic nationalism, election 2020, entertainment, environment, freedom of expression, freedom of speech, George Floyd, Hollywood, Hunter Biden, Immigration, industrial policy, Joe Biden, Josh Hawley, journalism, Mainstream Media, Making News, Marco Rubio, police killings, regulation, Republicans, Robert Reich, Russia-Gate, sanctions, Silicon Valley, social media, supply chains, tariffs, taxes, technology, The National Interest, Trade, trade war, Trump, Truth and Reconciliation Commission, Ukraine, Wall Street, wokeness

I’m pleased to announce that The National Interest journal has just published a modified version of my recent RealityChek post explaining my support for President Trump’s reelection. Here’s the link.

The main differences? The new item is somewhat shorter, it abandons the first-person voice and, perhaps most important, adds some points to the conclusion.

Of course, keep checking in with RealityChek for news of upcoming media appearances and other developments.

Im-Politic: Why I Voted for Trump

Tags

Big Tech, Black Lives Matter, censorship, China, Conservative Populism, conservatives, Democrats, economic nationalism, election 2020, entertainment, environment, free expression, freedom of speech, George Floyd, Hollywood, Hunter Biden, Immigration, impeachment, industrial policy, Joe Biden, Josh Hawley, journalism, Mainstream Media, Marco Rubio, police killings, Populism, progressives, regulations, Republicans, Robert Reich, Russia-Gate, sanctions, Silicon Valley, social media, supply chains, tariffs, taxes, technology, Trade, trade war, Trump, Truth and Reconciliation Commission, Ukraine Scandal, Wall Street, wokeness

Given what 2020 has been like for most of the world (although I personally have little cause for complaint), and especially Washington Post coverage of endless early voting lines throughout the Maryland surburbs of the District of Columbia, I was expecting to wait for hours in bad weather to cast my ballot for President Trump. Still, I was certain that Election Day circumstances would be a complete mess, so hitting the polling place this week seemed the least bad option.

Hence my amazement that the worst case didn’t pan out – and that in fact, I was able to kill two birds with one stone. My plan was to check out the situation, including parking, at the University of Maryland site closest to my home on my way to the supermarket. But the scene was so quiet that I seized the day, masked up, and was able to feed my paper ballot into the recording machine within about ten minutes.

My Trump vote won’t be surprising to any RealityChek regulars or others who have been in touch with on or off social media in recent years. Still, it seems appropriate to explain why, especially since I haven’t yet spelled out some of the most important reasons.

Of course, the President’s positions on trade (including a China challenge that extends to technology and national security) and immigration have loomed large in my thinking, as has Mr. Trump’s America First-oriented (however unevenly) approach to foreign policy. (For newbies, see all the posts here under “[What’s Left of] Our Economy,” and “Our So-Called Foreign Policy,” and various freelance articles that are easily found on-line.). The Biden nomination has only strengthened my convictions on all these fronts, and not solely or mainly because of charges that the former Vice President has been on Beijing’s payroll, via his family, for years.

As I’ve reported, for decades he’s been a strong supporter of bipartisan policies that have greatly enriched and therefore strengthened this increasingly aggressive thug-ocracy. It’s true that he’s proposed to bring back stateside supply chains for critical products, like healthcare and defense-related goods, and has danced around the issue of lifting the Trump tariffs. But the Silicon Valley and Wall Street tycoons who have opened their wallets so wide for him are staunchly opposed to anything remotely resembling a decoupling of the U.S. and Chinese economies and especially technology bases

Therefore, I can easily imagine Biden soon starting to ease up on sanctions against Chinese tech companies – largely in response to tech industry executives who are happy to clamor for subsidies to bolster national competitiveness, but who fear losing markets and the huge sunk costs of their investments in China. I can just as easily imagine a Biden administration freeing up bilateral trade again for numerous reasons: in exchange for an empty promise by Beijing to get serious about fighting climate change; for a deal that would help keep progressive Democrats in line; or for an equally empty pledge to dial back its aggression in East Asia; or as an incentive to China to launch a new round of comprehensive negotiations aimed at reductions or elimination of Chinese trade barriers that can’t possibly be adequately verified. And a major reversion to dangerous pre-Trump China-coddling can by no means be ruled out.

Today, however, I’d like to focus on three subjects I haven’t dealt with as much that have reinforced my political choice.

First, and related to my views on trade and immigration, it’s occurred to me for several years now that between the Trump measures in these fields, and his tax and regulatory cuts, that the President has hit upon a combination of policies that could both ensure improved national economic and technological competitiveness, and build the bipartisan political support needed to achieve these goals.

No one has been more surprised than me about this possibility – which may be why I’ve-hesitated to write about it. For years before the Trump Era, I viewed more realistic trade policies in particular as the key to ensuring that U.S.-based businesses – and manufacturers in particular – could contribute the needed growth and jobs to the economy overall even under stringent (but necessary) regulatory regimes for the environment, workplace safety, and the like by removing the need for these companies to compete with imports from countries that ignored all these concerns (including imports coming from U.S.-owned factories in cheap labor pollution havens like China and Mexico).

I still think that this approach would work. Moreover, it contains lots for folks on the Left to like. But the Trump administration has chosen a different economic policy mix – high tariffs, tax and regulatory relief for business, and immigration restrictions that have tightened the labor market. And the strength of the pre-CCP Virus economy – including low unemployment and wage growth for lower-income workers and minorities – attests to its success.

A Trump victory, as I see it, would result in a continuation of this approach. Even better, the President’s renewed political strength, buoyed by support from more economically forward-looking Republicans and conservatives like Senators Marco Rubio of Florida and Josh Hawley of Missouri, could bring needed additions to this approach – notably, more family-friendly tax and regulatory policies (including childcare expense breaks and more generous mandatory family leave), and more ambitious industrial policies that would work in tandem with tariffs and sanctions to beat back the China technology and national security threat.

Moreover, a big obstacle to this type of right-of-center (or centrist) conservative populism and economic nationalism would be removed – the President’s need throughout the last four years to support the stances of the conventional conservatives that are still numerous in Congress in order to ensure their support against impeachment efforts.

My second generally undisclosed (here) reason for voting Trump has to do with Democrats and other Trump opponents (although I’ve made this point repeatedly on Facebook to Never Trumper friends and others). Since Mr. Trump first announced his candidacy for the White House back in 2015, I’ve argued that Americans seeking to defeat him for whatever reason needed to come up with viable responses to the economic and social grievances that gave him a platform and a huge political base. Once he won the presidency, it became even more important for his adversaries to learn the right lessons.

Nothing could be clearer, however, than their refusal to get with a fundamentally new substantive program with nationally unifying appeal. As just indicated, conventional Republicans and conservatives capitalized on their role in impeachment politics to push their longstanding but ever more obsolete (given the President’s overwhelming popularity among Republican voters) quasi-libertarian agenda, at least on domestic policy.

As for Democrats and liberals, in conjunction with the outgoing Obama administration, the countless haters in the intelligence community and elsewhere in the permanent bureaucracy, and the establishment conservatives Mr. Trump needed to staff much of his administration, they concentrated on ousting an elected President they considered illegitimate, and wasted more than three precious years of the nation’s time. And when they weren’t pushing a series of charges that deserve the titles “Russia Hoax” and “Ukraine Hoax,” the Democrats and liberals were embracing ever more extreme Left stances as scornful of working class priorities as their defeated 2016 candidate’s description of many Trump voters as “deplorables.”

I see no reason to expect any of these factions to change if they defeat the President this time around. And this forecast leads me to my third and perhaps most important reason for voting Trump. As has been painfully obvious especially since George Floyd’s unacceptable death at the hands of Minneapolis police officers, the type of arrogance, sanctimony and – more crucially – intolerance that has come to permeate Democratic, liberal, and progressive ranks has now spread widely into Wall Street and the Big Business Sector.

To all Americans genuinely devoted to representative and accountable government, and to the individual liberties and vigorous competition of ideas and that’s their fundamental foundation, the results have been (or should be) nothing less than terrifying. Along with higher education, the Mainstream Media, Big Tech, and the entertainment and sports industries, the nation’s corporate establishment now lines up squarely behind the idea that pushing particular political, economic, social, and cultural ideas and suppressing others has become so paramount that schooling should turn into propaganda, that news reporting should abandon even the goal of objectivity, that companies should enforce party lines in the workplace and agitate for them in advertising and sponsorship practices, and that free expression itself needed a major rethink.

And oh yes: Bring on a government-run “Truth and Reconciliation Commission” to investigate – and maybe prosecute – crimes and other instances of “wrongdoing” by the President, by (any?) officials in his administration. For good measure, add every “politician, executive, and media mogul whose greed and cowardice enabled” the Trump “catastrophe,” as former Clinton administration Labor Secretary Robert Reich has demanded. Along with a Scarlet Letter, or worse, for everyone who’s expressed any contrary opinion in the conventional or new media? Or in conversation with vigilant friends or family?

That Truth Commission idea is still pretty fringe-y. So far. But not too long ago, many of the developments described above were, too. And my chief worry is that if Mr. Trump loses, there will be no major national institution with any inclination or power to resist this authoritarian tide.

It’s reasonable to suppose that more traditional beliefs about free expression are so deeply ingrained in the national character that eventually they’ll reassert themselves. Pure self-interest will probably help, too. In this vein, it was interesting to note that Walmart, which has not only proclaimed its belief that “Black Lives Matter,” but promised to spend $100 million on a “center for racial equality” just saw one of its Philadelphia stores ransacked by looters during the unrest that has followed a controversial police shooting.

But at best, tremendous damage can be done between now and “eventually.” At worst, the active backing of or acquiescence in this Woke agenda by America’s wealthiest, most influential forces for any significant timespan could produce lasting harm to the nation’s life.

As I’ve often said, if you asked me in 2015, “Of all the 300-plus million Americans, who would you like to become President?” my first answer wouldn’t have been “Donald J. Trump.” But no other national politician at that point displayed the gut-level awareness that nothing less than policy disruption was needed on many fronts, combined with the willingness to enter the arena and the ability to inspire mass support.

Nowadays, and possibly more important, he’s the only national leader willing and able to generate the kind of countervailing force needed not only to push back against Woke-ism, but to provide some semblance of the political pluralism – indeed, diversity – required by representative, accountable government. And so although much about the President’s personality led me to mentally held my nose at the polling place, I darkened the little circle next to his name on the ballot with no hesitation. And the case for Mr. Trump I just made of course means that I hope many of you either have done or will do the same.

Im-Politic: VP Debate Questions That Should be Asked

Tags

1619 Project, African Americans, Barack Obama, Biden, budget deficits, CCP Virus, censorship, China, Confederate monuments, Constitution, coronavirus, COVID 19, education, election 2020, Electoral College, filibuster, Founding Fathers, free speech, healthcare, history, history wars, Im-Politic, inequality, investment, Kamala Harris, Mike Pence, national security, Obamacare, police killings, propaganda, protests, racism, riots, semiconductors, slavery, spending, Supreme Court, systemic racism, Taiwan, tariffs, tax cuts, taxes, Trade, trade war, Trump, Vice Presidential debate, Wuhan virus

Since I don’t want to set a record for longest RealityChek post ever, I’ll do my best to limit this list of questions I’d like to see asked at tonight’s Vice Presidential debate to some subjects that I believe deserve the very highest priority, and/or that have been thoroughly neglected so far during this campaign.

>For Vice President Mike Pence: If for whatever reason, President Trump couldn’t keep the CCP Virus under control within his own White House, why should Americans have any faith that any of his policies will bring it under control in the nation as a whole?

>For Democratic candidate Senator Kamala Harris: What exactly should be the near-term goal of U.S. virus policy? Eliminate it almost completely (as was done with polio)? Stop its spread? Slow its spread? Reduce deaths? Reduce hospitalizations? And for goals short of complete elimination, define “slow” and “reduce” in terms of numerical targets.

>For Pence: Given that the administration’s tax cuts and spending levels were greatly ballooning the federal budget deficit even before the virus struck, isn’t it ridiculous for Congressional Republicans to insist that total spending in the stimulus package remain below certain levels?

For Harris: Last month, the bipartisan Congressional Problem Solvers Caucus unveiled a compromise stimulus framework. President Trump has spoken favorably about it, while stopping short of a full endorsement. Does Vice President Biden endorse it? If so, has he asked House Speaker Nancy Pelosi to sign on? If he doesn’t endorse it, why not?

For Pence: The nation is in the middle of a major pandemic. Whatever faults the administration sees in Obamacare, is this really the time to be asking the Supreme Court to rule it un-Constitutional, and throw the entire national health care system into mass confusion?

For Harris: Would a Biden administration offer free taxpayer-financed healthcare to illegal aliens? Wouldn’t this move strongly encourage unmanageable numbers of migrants to swamp U.S. borders?

For Pence: President Trump has imposed tariffs on hundreds of billions of dollars’ worth of Chinese exports headed to U.S. markets. But U.S. investors – including government workers’ pension funds – still keep sending equally large sums into Chinese government coffers. When is the Trump administration finally going to plug this enormous hole?

For Harris: Will a Biden administration lift or reduce any of the Trump China or metals tariffs. Will it do so unconditionally? If not, what will it be seeking in return?

For both: Taiwan now manufactures the world’s most advanced semiconductors, and seems sure to maintain the lead for the foreseeable future. Does the United States now need to promise to protect Taiwan militarily in order to keep this vital defense and economic knowhow out of China’s hands?

For Pence: Since the administration has complained so loudly about activist judges over-ruling elected legislators and making laws themselves, will Mr. Trump support checking this power by proposing term limits or mandatory retirement ages for Supreme Court Justices? If not, why not?

For Harris: Don’t voters deserve to know the Biden Supreme Court-packing position before Election Day? Ditto for his position on abolishing the filibuster in the Senate.

>For Pence: The Electoral College seems to violate the maxim that each votes should count equally. Does the Trump administration favor reform? If not, why not?

>For Harris: Many Democrats argue that the Electoral College gives lightly populated, conservative and Republican-leaning states outsized political power. But why, then, was Barack Obama able to win the White House not once but twice?

>For Pence: Charges that America’s police are killing unarmed African Americans at the drop of a hat are clearly wild exaggerations. But don’t you agree that police stop African-American pedestrians and drivers much more often than whites without probable cause – a problem that has victimized even South Carolina Republican Senator Tim Scott?

For Harris: Will Biden insist that mayors and governors in cities and states like Oregon and Washington, which have been victimized by chronic antifa violence, investigate, arrest and prosecute its members and leaders immediately? And if they don’t, will he either withhold federal law enforcement aid, or launch such investigations at the federal level?

For Pence: Why should any public places in America honor Confederate figures – who were traitors to the United States? Can’t we easily avoid the “erasing history” danger by putting these monuments in museums with appropriate background material?

For Harris: Would a Biden administration support even peacefully removing from public places statues and monuments to historic figures like George Washington and Thomas Jefferson because their backgrounds included slave-holding?

For both: Shouldn’t voters know much more about the Durham Justice Department investigation of official surveillance of the Trump campaign in 2015 and 2016 before Election Day?

For both: Should the Big Tech companies be broken up on antitrust grounds?

For both: Should internet and social media platforms be permitted to censor any form of Constitutionally permitted speech?

For Pence: Doesn’t the current system of using property taxes to fund most primary and secondary public education guarantee that low-income school children will lack adequate resources?

For Harris: Aren’t such low-income students often held back educationally by non-economic factors like generations of broken families and counter-productive student behavior, as well as by inadequate school funding – as leading figures like Jesse Jackson (at least for one period) and former President Obama have claimed?

For Pence: What’s the difference between the kind of “patriotic education” the President says he supports and official propaganda?

For Harris: Would a Biden administration oppose local school districts using propagandistic material like The New York Times‘ U.S. history-focused 1619 Project for their curricula? Should federal aid to districts that keep using such materials be cut off or reduced?

Now it’s your turn, RealityChek readers! What questions would you add? And which of mine would you deep six?

Making News: National Interest Post Examines Biden’s Often Head-Scratching Manufacturing Plans

Tags

2020 election, allies, Barack Obama, China, Joe Biden, Making News, manufacturing, offshoring, reshoring, tariffs, taxes, Trade

I’m pleased to announce that my latest article for an outside publication is now on-line.  It’s an analysis of Democratic presidential nominee Joe Biden’s proposals to revive American domestic manufacturing, and it leads off this morning’s edition of The National Interest.  Here’s the link.

And keep checking in with RealityChek for news of upcoming media appearances and other developments.

Im-Politic: On Biden’s New Plan for Medical & Other Supply Chain Security

Tags

alliances, Biden, CCP Virus, China, coronavirus, COVID 19, Defense Department, Defense Production Act, DPA, election 2020, health security, healthcare goods, Im-Politic, manufacturing, offshoring, Pentagon, pharmaceuticals, PPE, supply chains, tariffs, taxes, Trade, Wuhan virus

Joe Biden’s plan for rebuilding U.S. supply chains to ensure American access to critical products like healthcare goods came out yesterday, and any fair reading would have to conclude that these proposals are about as serious as the presumptive Democratic Presidential nominee’s proposals in related areas – like China policy. That is to say, they’re not terribly serious at present.

As with China policy, the first concern entails credibility. In 2011, when Biden was Barack Obama’s Vice President, the Commerce Department issued a report detailing all sorts of dangerous vulnerabilities in U.S. supplies of all manner of vital healthcare goods. The “Obama-Biden administration” did absolutely nothing in response – unless you count avidly pursuing offshoring-friendly trade deals, like the Trans-Pacific Partnership (TPP) that were bound to worsen these vulnerabilities. You could also throw in a record of continually coddling the trade and broader economic predation practiced by China, which surely fostered similar results.

As a result, it’s legit to ask whether any of these proposals will survive Day One of a Biden presidency.

In this vein, it’s more than a little disturbing that Biden proposes to use the Defense Department’s policies to minimize supply chain vulnerabilities as his model for addressing such problems for a wide variety of products –not just healthcare-related goods. These include “energy and grid resilience technologies, semiconductors, key electronics and related technologies, telecommunications infrastructure, and key raw materials.”

Unfortunately, the principal lessons taught by the Defense Department’s record on supply chains are how to duck the problem or define it out of existence, and the administration in which Biden served was no exception. Some of the biggest specific problems (as made clear in this Obama administration report):

>The Pentagon’s overall assessments prioritized financial metrics, not specific domestic production capabilities, as measures of the defense manufacturing base’s health.

>Its treatment of globalization’s challenges placed major emphasis on taking “advantage of emerging capabilities, regardless of where they originate,” not maximizing domestic production capabilities.

>Although specific vulnerabilities – and the related need to maintain or rebuild adequate domestic capabilities – were acknowledged, this vulnerabilities were consistently portrayed as isolated holes that could somehow be plugged without taking into account the dependence of these narrowly defined products on their own supply chains. Indeed, Biden’s new plan seems to reveal a similar flaw when it describes itself as “a set of targeted proposals to ensure the United States has the domestic manufacturing capacity necessary for critical supply chains.”

>Moreover, the Department has long supported objectives such as interoperability with allies’ armed forces and maintaining traditional – pre-Trump – global systems of what it defined as free trade, both of which often clashed with the goal of incentivizing domestic production. These goals were explicitly stated in this George W. Bush administration report, and here’s no evidence that the Obama-Biden Pentagon ever disagreed.

Indeed, the new Biden blueprint indicates that the former Vice President’s definition of supply chain security is pretty global, instead of national, as well:

“Instead of insulting our allies and undermining American global leadership, Biden will engage with our closest partners so that together we can build stronger, more resilient supply chains and economies in the face of 21st century risks. Just like the United States itself, no U.S. ally should be dependent on critical supplies from countries like China and Russia. That means developing new approaches on supply chain security — both individually and collectively — and updating trade rules to ensure we have strong understandings with our allies on how to best ensure supply chain security for all of us.”

If America’s allies were proven reliable suppliers of these products themselves, Biden’s perspective would make sense. But the list of countries that have recently hoarded medical goods for themselves as soon as the CCP Virus pandemic’s full dangers became apparent included most of these allies – meaning that the U.S. vulnerability problem far exceeds “China and Russia.”

Nor is it entirely evident how clearly Biden has thought though the tax policy provisions of his plan. Tax policy’s role is clearly viewed as crucial, as the plan emphasizes that

“Pharmaceutical offshoring has been heavily driven by tax code provisions that have encouraged companies to locate pharmaceutical production in low-tax countries even where those countries have labor and other costs comparable to the U.S.”

Consequently, Biden says he will “eliminate Trump Administration tax incentives for offshoring and pursue other tax code changes that will encourage pharmaceutical production in the U.S.”

At the same time, Biden favors raising the overall U.S. corporate tax rate from the 21 percent to which it has recently been lowered to 28 percent, along with a 15 percent “minimum tax” on large corporations. So good luck to drug companies – or any other companies making goods deemed critical by Biden – gleaning clear reshoring or domestic production ramping signals from this combination.

Perhaps any confusion will be cleared up by other alleged Biden measures to boost U.S.-based production – like “new targeted financial incentives, including tax credits, investments, matching funds for state and local incentives, R&D support, and other incentives to encourage the production of designated critical materials such as semiconductors in the United States”? At best, business will surely need to see many more details along these lines before committing the needed capital.

Unless maybe as President, Biden will simply mandate that the needed new facilities will be built when all else fails (as well as in tandem with those other policies)? That’s obviously the implication of his promise to use the Defense Production Act (DPA) “to its fullest extent to rebuild domestic manufacturing capacity in critical supply chains, using the lessons learned from the COVID-19 pandemic and applying them to our national needs.”

Or does Biden actually view the DPA as his primary tool for “generating the domestic mobilization we need”? That seems like a reasonable conclusion, especially given that it’s the first specific measure he mentions. Maybe instead he’s really talking about using the Act simply “to direct U.S. companies to ramp up production of critical products that will be needed over the near-term.”

Regardless of Biden’s real intentions, though, it’s anything but clear how Biden believes the DPA can be used to increase U.S. production in many of the industries he mentions as vital where such output has largely migrated overseas That’s especially true for the “semiconductors, key electronics and related technologies, [and] telecommunications infrastructure” he specifies. It’s sure going to be far more difficult than, say, ordering auto companies, to make ventilators.

It’s just as unclear how these Biden’s ideas can succeed without a much stronger trade policy dimension – and specifically, continued and even expanded tariffs. And it shouldn’t be limited to straightening out the muddled views mentioned above. 

Specifically, maintaining levies on chronically subsidized and dumped products like metals, along with sweeping tariffs on systemically protectionist China (and on other similar countries) would send the all the companies and sectors concerned an invaluable message. Bipartisan endorsement of these protections would demonstrates that they really can have confidence that new investments won’t be decimated by trade and broader economic predation. Just as important, an enduring commitment to tariffs would help convince overseas competitors (domestic and foreign owned) that if they want to sell the products in which they have big edges to Americans, they’ll need to make these products in America.

The good news is that at least some of these mysteries may be cleared up “soon,” when this Biden plan promises the former Vice President will release his “comprehensive strategy to create American jobs through modern American manufacturing.” The bad news is that if he what he’s said and written so far is any indication, he’ll have a lot of rewriting to do.

(What’s Left of) Our Economy: Why Trump’s Not Down on the Farm

Tags

agriculture, Alan Rappeport, American Farm Bureau Federation, election 2020, farmers, Greg Sargent, Mainstream Media, regulation, tariffs, taxes, The New York Times, Trade, trade war, Trump, Washington Post, {What's Left of) Our Economy

For anyone with any sympathy for President Trump’s China and other trade policies (like yours truly), one of the great pleasures of following the news coverage has been reading the bushel of stories that conform to the following pattern: a Mainstream Media reporter jets out to farm country expecting to find the nation’s agricultural community – which voted strongly for Mr. Trump in 2016 – up in arms about lost export sales due to foreign tariffs and other restrictions imposed in retaliation to new U.S. levies. And selfsame reporter winds up grudgingly writing that farmers and ranchers are by and large sticking with the President.  (See this classic example.)

This morning, such coverage took a turn that’s new and especially important given the approach of the next presidential election. In the process, the journalists involved unwittingly demonstrated how ignorant they continue to be about the full relationship between Trump administration policies and American agriculture.

The new turn was made clear by this claim today in a New York Times report: After “remaining resolute” in support of Mr. Trump, the difficulties faced by U.S. Farmers is finally “becoming a political problem” for the President. Indeed, wrote correspondent Alan Rappeport, “as the trade fight gets uglier, farmers are beginning to panic.”

And following a recent, increasingly incestuous trend in which reporters and pundits from one news organization breathlessly (and often instantly) hype the findings of a rival, a Never Trump-er Washington Post columnist based an entire essay today on the Times piece, declaring “There are indications that they are now getting genuinely angry over Trump’s efforts to gaslight them so shamelessly over the impact of his trade war with China.”

Or are they?

The original (long) Times article – in the next to last paragraph – informed readers that

“many farmers continue to support Mr. Trump and express hope that the president knows what he is doing in his dealings with China. A July survey from Farm Journal found that 79 percent of 1,100 farmers still back Mr. Trump despite the lack of progress in negotiations with China.”

Similarly, Post columnist Greg Sargent wrote: “Let’s stipulate up front [actually, this insight didn’t come until the middle of the article] that there is zero chance that farmers — or rural voters — break with Trump in 2020.”

At the same time, there’s no doubt that American farm exports, especially to China, are down this year. So what gives? Two major developments, both of which have been almost completely neglected:

First, the Trump administration has done very well by American farmers and ranchers by way of tax policy. And second, it’s done just as well by them by way of regulatory policy. At least, that’s what the biggest U.S. agricultural lobbying group has said, in reports here and here. P.S. The American Farm Bureau Federation is no fan of the Trump tariffs.

I could add that American farm prices and incomes began falling years before Mr. Trump’s inauguration – and have actually been leveling off recently. And that, when it comes to trade, farmers are strongly in favor of the U.S.-Mexico-Canada-Agreement – the Trump administration’s rewrite of the North American Free Trade Agreement (NAFTA). But that would be piling on.

It’s not that everyone shouldn’t be heartened by the upsurge in national press corps interest in American agriculture. But that’s only Step One in generating accurate coverage. Step Two is actually learning something.