Im-Politic: How Trump is Letting the China Virus Crisis Go to Waste

Tags

CDC, Centers for Disease Control and Prevention, China, China trade deal, China virus, coronavirus, Im-Politic, National Institutes of Health, pandemics, pharmaceuticals, Phase One, Trump, Wuhan, Wuhan virus, Xi JInPing

As tragic as the coronavirus has been for victims in China and elsewhere and their loved ones, both the humanitarian and the Machiavellian in me can’t help but think that President Trump is squandering some great and closely related opportunities being created by the outbreak.

To be sure, the President hasn’t completely ignored the disease. He tweeted yesterday that “China has been working very hard to contain the Coronavirus. The United States greatly appreciates their efforts and transparency. It will all work out well. In particular, on behalf of the American People, I want to thank President Xi!.”

He stated at a January 22 press conference at the big global economy conference in Davos, Switzerland that the U.S. government has a plan to contain the virus in the United States. The federal Centers for Disease Control and Prevention (CDC) and National Institutes of Health say they’re working on a cure – in tandem with the U.S. pharmaceutical industry.

But given that the United States is the world leader in medical research, and given that the President has just (justifiably) eaten China’s lunch with the new Phase One trade deal, it seems like much more could and should be done, and in a much higher profile way.

For example, the President, who isn’t shy about broadcasting his achievements and intentions, should announce that’s he’s directing federal research agencies to treat the coronavirus threat as a top priority, as well as seek a similar commitment from U.S. medical schools and drug companies. And how about a summit of American medical research leaders from the public and private sectors to brainstorm both on addressing the present danger and the overall growing threat of pandemics resulting from the ever smaller world being created every day by increasing worldwide commerce and travel?

In fact, why even restrict this meeting to American participants? The President should think about either inviting their foreign counterparts to the session as well, or to a follow-up meeting.

That’s what my humanitarian instincts tell me.

And my more political self? It would advise the President explicitly and publicly to offer his buddy, Chinese leader Xi Jinping, whatever assistance the Chinese need. For good measure, he should propose sending a team of American scientists and public health experts from the government and private sector to China to assess the situation first-hand (including the status of the disease and China’s progress in combating it) and develop recommendations to improve the Chinese response.

Clearly, these actions would serve humanitarian ends. But they would also put Beijing’s dictators in quite the pickle. Right after having their clocks cleaned in the trade negotiations, they’d be put in a position of accepting American help (which would involve a huge loss of the face so critical in Chinese culture), or declining assistance (which can only further anger a Chinese public that’s already not thrilled with the crisis management skills of either the central government or local officials). In other words, either way, the United States scores political points with public opinion both worldwide and in China in particular.

Meanwhile, no one could legitimately criticize Mr. Trump for declaring that all agriculture imports from China are being banned, since the CDC admits that, although it lacks “any evidence to suggest that animals or animal products imported from China pose a risk for spreading 2019-nCoV [the technical name for the virus in question] in the United States,” that “This is a rapidly evolving situation.”

It’s become a well-worn cliché that the Chinese word for “crisis” combines the characters for “danger” and “opportunity.” But even though this specific claim seems questionable at best, the underlying idea and logic are compelling, and need to be applied to U.S. coronavirus policy liji (Chinese for “immediately”).  There’s no excuse, to quote former Chicago Mayor Rahm Emanuel, for letting the opportunity go to waste.

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

Tags

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

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

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

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

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

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

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

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

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

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

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

Im-Politic: Media Bias Even in Impeachment Trial Basics

Tags

House managers, Im-Politic, impeachment, impeachment trial, Trump, Washington Post

Charges of media bias are so common nowadays that their simple volume can undercut their credibility. But at least from time to time some such instances are so flagrant that they should generate condemnation across the political or ideological spectra, and the latest came yesterday on the Washington Post website’s home page.

It’s no longer on-line (and didn’t appear in print), but it consisted of capsule descriptions of the House’s impeachment managers and Trump legal team, and I was so offended that I made sure to copy them as soon as I saw them. Here they are, starting with the managers (and they are indeed worth presenting in full):

Rep. Adam B. Schiff: “The California Democrat is known for distilling complicated subjects clearly and having a willingness to go after Trump’s soft spots.”

Rep. Jerry Nadler: “The New York Democrat leads the committee traditionally in charge of impeachment and shepherded the articles through Congress.”

Rep. Zoe Lofgren: “The California Democrat, who is serving her 13th term, is one of the most experienced members of Congress on impeachment.”

Rep. Hakeem Jeffries: “House Speaker Pelosi described the New York Democrat as ‘an accomplished litigator in private practice’ before seeking office.”

Rep. Val Demings: “The Florida Democrat was the first female police chief in Orlando, and Pelosi cited her law enforcement background as a strength.”

Rep. Jason Crow: “The Democrat from Colorado served as an Army Ranger and was partner in a law firm in Colorado.”

Rep. Sylvia Garcia: “The first-term Texas Democrat was a municipal judge in Houston and was one of the first Latinas elected to Congress from Texas.”

And here are the descriptions of the Trump team:

Pat Cipollone: “Republican lawmakers have described Cipollone as the ‘quarterback’ for Trump’s: legal strategy.”

Jay Sekulow: “Sekulow is the leader of the president’s personal legal team and he represented Trump during special counsel Robert S. Mueller III’s Russia investigation.”

Ken Starr: “Starr is the independent counsel who investigated President Bill Clinton.”

Alan Dershowitz: “Dershowitz is the Harvard Law emeritus professor who advised the defense team in football star O.J. Simpson’s murder trial.”

Pam Bondi: “Bondi was the attorney general in Florida for eight years and has a number of ties to Trump.”

Robert Ray: “Ray is the former independent counsel, replacing Starr in October 1999, who oversaw the agreement with Clinton that averted a possible criminal trial.”

Pat Philbin: “Philbin is Cipollone’s right-hand man, his most senior deputy in the White House’s legal office.”

Michael Purpora: “Purpura took the lead on battling to prevent White House grand jury testimony from the Mueller investigation from being made public.”

You see the pattern here? Of the Post‘s seven House manager blurbs, four (those for Schiff, Lofgren, Jeffries, and Crow) contained flattering value judgments. And the favorable Crow description included experience that’s of course impressive militarily, but completely irrelevant to the impeachment trial, or any legal matters.

Of the seven Trump lawyer blurbs, none contained a flattering value judgment and three contained references arguably aimed at sliming their subjects (the link drawn between Dershowitz and O.J. Simpson; the observation of Bondi’s (unspecified) “ties to Trump”; and Purpura’s role in what’s all but dismissed as a cover-up.

As for Cipollone and Purpora and Philbin, it would be easy for Post readers to conclude from these otherwise straight factual portrayals that their careers have included no positions of consequence other than their Trump White House jobs – even though the first served as a senior aide to then Attorney General William P. Barr during the administration of George H.W. Bush (no fan of Mr. Trump’s); the second worked as a senior Justice Department official during the administration of George W. Bush (no Trump enthusiast, either), as well as a federal prosecutor in New York; and the third held jobs in Justice’s chain of command under Bush 43.

Everyone should be free to believe that the House managers are mainly legal eagles and/or paragons of virtue and even heroism, and that the Trump legal team is dominated by mere Trump flunkies. But such views don’t bear the slightest resemblance to facts, and if a newspaper fails to  keep this distinction straight for what should be a relatively uncontroversial informational feature, why should anyone trust it on anything less cut and dried?

Im-Politic: A Billionaire Candidate’s Massive Climate Change Blind Spot

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China, climate change, Democratic debate, Democrats, election 2020, Im-Politic, tariffs, Tom Steyer, Trump

It’s now been five days since I first heard it, but I still can hardly believe my ears because this utterance might have been the single dumbest and/or most ignorant combination of positions I’ve ever heard a leading political figure make. It came from Tom Steyer during the Democratic presidential debate last Tuesday night, and even though the California billionaire’s campaign seems to be going nowhere fast as the 2020 campaign nears its primary phase, it deserves to be spotlighted.

The first of the two statements in question? Steyer’s declaration that “On the first day [of his presidency], I would undo Mr. Trump’s [China] tariffs.” The second? “…I would declare a state of emergency on day one on climate.”

Why is this so mind-boggingly idiotic? Because as should be known by anyone who thinks he or she is qualified to be President, not only has China become by far the world’s largest emitter of the greenhouse gases held to be responsible for climate change, but as shown in the left-hand chart below, it started becoming an emitter in a class by itself at the turn of the century – i.e., right about the time when it was admitted into the World Trade Organization (WTO). And the most important effect of WTO admission was greatly complicating the challenge faced by all the world’s economies – including America’s – in using tariffs to curb the growth of China’s subsidy-fueled carbon-belching export-heavy industries. 

We don’t yet have data for 2019, but the chart also shows that the growth of China’s emissions began to slow (though they’re still growing faster than anyone else’s except India’s) as China’s economic growth (which has always been export-heavy) began slowing. Moreover, over the last year, as literally hundreds of billions of dollars worth of Chinese goods intended for U.S. markets have been hit by President Trump with stiff tariffs, China’s growth hit a 29-year low. Think that’s a coincidence? Think again, as between 2018 and 2019, China’s annual export growth crash dove from 9.9 percent to 0.5 percent in U.S. dollar terms. (The right-hand chart, which measures emissions on a per capital basis, displays similar trends.) 

There’s nothing of course intrinsically wrong with Steyer’s passionate belief in the need to combat climate change. But his utter failure to recognize China’s immense contribution to the danger he sees makes embarrassingly clear – to put the kindest interpretation on the matter – that his knowledge base lags far behind his emotions. To the extent that other high profile climate activists repeatedly let China off the hook as well, they deserve the same criticism. And if this massive blind spot (or delusion) casts big-time doubt on Steyer’s qualifications to be President (which it should), it should have the same effect on all the other climate change resisters who display this shortcoming, too.

Making News: A Washington Post Cite on Manufacturing, China Trade Deal Interviews…& More!

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Breitbart.com, China, Heather Long, i24News, John Carney, Making News, manufacturing, Market Wrap with Moe Ansari, Phase One, tariffs, trade deal, Trump, Washington Post

I’m pleased to report that I got quoted in this morning’s Washington Post on the new Federal Reserve industrial production figures (released yesterday).  Reporter Heather Long mentioned my observation that U.S. domestic manufacturing’s recent recession seems to be over.  She could have also noted the evidence I’d presented indicating that this slump never even happened, but what the heck.

Also yesterday, I was interviewed on “Market Wrap with Moe Ansari” on the new trade deal President Trump has signed with China.  You can listen to the podcast at this link;  my segment begins just after the 27-minute mark.

That same day, Breitbart.com‘s John Carney gave me a very nice shout-out in his very important piece noting new research showing that he (and I) have been right all along about the Trump trade wars having minimal-at-best effects on prices for consumer goods.  Incidentally, Post reporter Heather Long also deserves much credit for first reporting these academic findings.  Read the piece here.

On Thursday night, the U.S.-Israeli TV network i24News also interviewed me on that “Phase One” China trade deal.  To watch the interview, click here and download the file.  As usual with i24News, be sure to download the link within a week, because after that, your freebie access will be gond.

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

 

(What’s Left of) Our Economy: Manufacturing’s (Latest) Recession Looks Like It’s Over

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aluminum, China, Commerce Department, Federal Reserve, Great Recession, industrial production, inflation-adjusted output, manufacturing, manufacturing production, metals tariffs, recession, steel, tariffs, Trade, trade war, Trump, {What's Left of) Our Economy

Let’s do something a little different this time in RealityChek‘s monthly examination of the Federal Reserve’s latest domestic U.S. manufacturing output figures – which came out this morning and bring the story through December and therefore through full-year 2019 (at least preliminarily).

Instead of focusing on the industries most seriously affected by President Trump’s tariff-heavy trade policies (mainly the metals tariffs, given big measurement problems with the China duties), let’s look at the question of whether manufacturing remains in recession – which has big, trade war-related implications because this Trump campaign is widely blamed for many of manufacturing’s recent weakness.

There’s considerable evidence that the answer is “Yes” – that industry’s inflation-adjusted production (the measure used by the Fed) is back in growth mode, though just barely.

But the question remains an open one. That’s partly because the answer depends on which baseline date you use for the start of the manufacturing recession, which unit of time you use (along with which particular manufacturing output gauge you favor).

Among that evidence tilting toward “Yes” – today’s Fed data.  Specifically, December’s 0.16 percent monthly increase in constant dollar manufacturing output means that, since June, such production is up. Now it’s only up by 0.04 percent. But since that’s a cumulative increase over the last six months (i.e., two consecutive quarters), the technical definition of recession no longer applies.

Or does it? The same Fed figures show that, between December, 2018 and December, 2019, after-inflation manufacturing output was down – by 1.26 percent. So the recession is still on, right?

Maybe. But use another baseline – April, 2018. As RealityChek regulars know, that’s the first full month in which significant Trump tariffs went into effect (on imports of aluminum and steel). Since then, though, price-adjusted manufacturing production has grown by 0.38 percent. This result, therefore, indicates that, although the President’s trade policies seem to have delivered a hit to domestic manufacturing, it was pretty negligible, and it’s already over (at least for now).

To complicate matters still further, as RealityChek reported last July, according to the Fed’s figures, manufacturing has suffered several recessions since the current economic recovery began (in the middle of 2009).  Indeed, as of this morning, it  still hasn’t recovered from the Great Recession that began at the end of 2007!

At the same time, another set of U.S. government data support the conclusion that there has been no trade war-related manufacturing recession during the Trump years – or manufacturing recession of any kind.

These statistics come from the Commerce Department’s “GDP [Gross Domestic Output] by Industry” reports. They use the same measure used by the Fed for tracking manufacturing growth (or contraction), but they’re kept on a quarterly, not monthly, basis. As a result, these numbers aren’t issued as frequently.

Yet the latest results came out January 9, and although they stop at the third quarter of last year, they show that in real terms, domestic manufacturing under Mr. Trump never shrank on net for two straight quarters, much less over any longer time frame. Here are the quarterly change figures:

2Q 16-1Q 17 :+0.32%

1Q 17-2Q 17: -0.7%

2Q 17-3Q 17: +0.35%

3Q 17-4Q 17: +1.22%

4Q 17-1Q 18: +0.38%

1Q 18-2Q 18: +0.09%

2Q 18-3Q 18: +1.38%*

3Q 18-4Q 18: +0.38%

4Q 18-1Q 19: +0.43%

1Q 19-2Q 19: -0.38%

2Q 19-3Q 19: +0.67%

*those Trump metals tariffs began in this quarter

Indeed, what comes through loud and clear from them is that not only has there been no manufacturing recession on President Trump’s watch, but there hasn’t even been an output slowdown.

It’s always possible to point to the counter-factual – that is, in this instance, to try to figure out how matters would look without any Trump tariffs, or similar Trump efforts to transform U.S. trade policy. And it’s certainly conceivable that domestic industry would have fared even better had Trump abjured all tariffs.

But that’s not the only counter-factual. For example, what if the rest of the world had been able to deal with the pressure created by China’s steel dumping by dumping its own steel into the United States (which hasn’t happened because the Trump metal tariffs were global)? What if China itself had remained completely free to send artificially low-priced (because heavily subsidized) product into the US market? What if President Trump had kept the United States in the Trans-Pacific Partnership trade agreement (TPP), with its wide open back door for imports with lots of Chinese content, while China remained under no obligation whatever to open its market to U.S. products? It’s easy to see that U.S.-based manufacturing could have gone on the critical list.

What’s certain, however, is that according to the most authoritative data available, claims of tariffs-led disaster for U.S. manufacturing have been either much ado about nothing, or much ado about very little. Could the coming months finally bear out the worst fears of cheerleaders for pre-Trump trade policies and other globalists? Of course. But that’s simply speculation, which counts much less than facts.

Making News: Talking China Trade Deal with Jersey Joe, John Batchelor…& More!

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AlphaWeek.com, America First, Breitbart News Tonight, Breitbart.com, China, economic nationalism, energy, enforcement, Gordon G. Chang, IndustryToday.com, Jersey Joe, Joe Piscopo, John Carney, Making News, Middle East, Phase One, Populism, RealVision.com, tariffs, The Epoch Times, The Joe Piscopo Show, The John Batchelor Show, trade deal, trade deficit, Trump

I’m pleased to announce that I was interviewed this morning on the new U.S.-China trade deal on “The Joe Piscopo Show” on New York City’s AM 970 The Answer radio station.  Sorry that I could only give limited advance notice, but the podcast is on-line already!  Special bonus:  Jersey Joe and I also dealt with the Major League Baseball cheating scandal, too!

In addition last night, I was back on John Batchelor’s nationally syndicated radio program to discuss the so-called Phase One agreement with John and co-host Gordon G. Chang.  You can listen to the podcast here.

Tuesday night, I was interviewed on a wide range of foreign and domestic issues on “Breitbart News Tonight.”  Click on this link and scroll down till you see my January 14 segment.

The Breitbart.com folks were also kind enough to write up some portions of this segment in website items here and here.

On Tuesday, meanwhile, Breitbart‘s excellent economics and finance editor John Carney quoted me in his detailed analysis of the latest U.S. government report on consumer prices – which reveals whether the Trump trade wars have sparked any meaningful inflation.  You can read it at this link.  (Spoiler alert for everyone who hasn’t been paying attention to RealityChek‘s own coverage of this issue:  They haven’t.)

Meanwhile, The Epoch Times has quoted my views recently on energy security and what it means for America’s policy in the hopelessly dysfunctional Middle East, and on the progress made in reducing the U.S. the trade deficit.

On January 6, IndustryToday.com re-published – at this link – my recent blog post on the latest data undermining the claim that President Trump has betrayed his working class and middle class voters.  (Another spoiler alert:  These data indicate that he hasn’t.)

Finally, on January 2, the popular finance website AlphaWeek.com posted the video of my December RealVision.com interview on the virtues of an America First approach to U.S. foreign and trade policy – and whether Mr. Trump’s measures fit the bill.  Catch it here.

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

 

 

 

(What’s Left of) Our Economy: The Case that Phase One Passes the Enforceability Test

Tags

China, enforcement, Phase One, tariffs, Trade, trade deal, trade talks, Trump, unilateralism, {What's Left of) Our Economy

Not only has the “Phase One” trade deal now been signed by the United States and China, but official texts have now been released. And my initial read indicates that the Trump administration just might have come up with an effective enforcement regime – though success here will depend on U.S. governments (including this one) displaying nerves of steel.

At the same time, the enforcement terms raise the question of why the President felt the need to reach this point via a treaty, rather than simply punish China unilaterally for economic transgressions – as his tariffs on hundreds of billions of dollars worth of imports from the People’s Republic (most of which remain firmly in place) already accomplish.

By way of background, from the beginning, I’ve doubted that any such agreement could be adequately verified from the U.S. standpoint. The main reasons: The bureaucracies China uses to implement the various features of its trade and broader commercial predation are too big and secretive for any outsider to monitor in any meaningful sense. (Further complicating matters – many of the worst culprits are provincial and city governments.) Therefore, documenting abuses in any kind of detail – or verifying any Chinese promises of structural change – has looked like an insurmountable obstacle to standard, legalistic dispute-resolution systems that could actually work satisfactorily for American plaintiffs.

As a result, I’ve argued that the best way to handle these transgressions is for the U.S. government to impose sweeping tariffs on China (because its predation is a systemic plan, not the product of individual entities’ decisions), and to deal with additional, individual complaints by acting as judge, jury, and court of appeals. And because of my conviction that the United States holds the clear upper hand in its relations with China, I saw no need to permit any Chinese involvement in these processes.

The Phase One deal certainly can’t be relied on to eliminate or even reduce Chinese opacity. But the way the treaty reads, it doesn’t need to. The key appear to be these passages (on page 7-3), which set out the procedures to be followed if the United States and China can’t, after a series of meetings and “consultations” agree on resolving a complaint. Here’s the first:

“…the Complaining Party may resort to taking action based on facts provided during the consultations, including by suspending an obligation under this Agreement or by adopting a remedial measure in a proportionate way that it considers appropriate with the purpose of preventing the escalation of the situation and maintaining the normal bilateral trade relationship.”

“Remedial measures” clearly means punitive tariffs, and just as clearly, they can unilaterally applied.

It’s true, as some trade policy critics have fretted, that the agreement gives the Chinese the same rights – as well as the option of retaliating if Beijing believes the United States has been acting in “bad faith.”

But here’s where the nerves of steel come in. The retaliation that’s permitted isn’t tit-for-tat – as in the case of World Trade Organization (WTO) rules. Indeed, even challenging such retaliation isn’t allowed – a right that can always frustrate justice by delaying it. Instead, the retaliation required is no less than exiting from the entire deal. The system can work in America’s favor if U.S. leaders either display confidence that China won’t take such a dramatic step (because the export-heavy Chinese economy still needs the American market much more than vice versa), or if they resolve to tariff China heavily if this U.S. bluff is called.

Incidentally, the language also makes clear that, in order to go ahead with tariffs, Washington won’t need much evidence any kind of Chinese failure to respond adequately to complaints. In fact, no meaningful evidentiary standards are specified at all. In other words, it’s entirely up to the United States to decide on the threshold for action.

Can China take advantage of the same provisions? In theory, yes. But nothing in the deal would prevent the United States from treating as treaty violations any Chinese complaints it regards as unmerited – and credibly threatening to retaliate by withdrawing unless Beijing backs down.

The deal also could well prevent a big potential problem from emerging – fear of Chinese retaliation (which itself might be tough even to identify because of Chinese bureaucratic secrecy) by U.S. victims of Chinese predation (and especially by victims that are operating in China). Such fears have prevented many of these victims from complaining publicly about Chinese abuses in the first place.

But the text on pages 7-2 and 7-3 appear to permit Washington to keep the name of the plaintiff’s business confidential. So, at least in theory, problem preempted.

As suggested above, however, the deal looks so promising, and permits so much implicit U.S. unilateralism, that it’s difficult to understand why President Trump decided to proceed bilaterally t begin with. Was he worried about being criticized for being reckless and not going the extra mile to deal with the Chinese respectfully and accommodate their legitimate concerns? Perhaps. But I strongly suspect that, at least if the agreement works out as I expect, he’ll face such accusations anyway. And by negotiating, he’s lost precious time to provide tariff relief for U.S.-based producers who need it, and to permit other companies to adjust their supply chains to a new tariff-heavier era sooner rather than later (and to make adequate progress well before November, 2020).

Clearly, however, the negotiating train has left the station. And between this effective enforcement system, Chinese promises of big import increases from the United States, and steep tariffs remaining on most imports from China (which cope with the systemic issue), it looks like a major and important economic and political win for a self-proclaimed master negotiator, and the entire domestic economy – if he makes full use of it.

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

Tags

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                                                               Private    N/S private    mfg     N/S mfg

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

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

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

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

Our So-Called Foreign Policy: The Ultimate Iraq Policy Absurdity

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forever wars, Iraq, Iraq war, Middle East, Our So-Called Foreign Policy, sanctions, Trump

If you still have any doubts that American policy in the Middle East has become completely bonkers, just think about recent threats made by the United States to punish Iraq economically if it kicks U.S. troops out of the country – a decision its parliament has approved in a nonbinding resolution.

Iraq, you might recall, is a country that the United States has invaded no less than twice in the last three decades, and where it’s lost the lives of thousands of servicemen (let’s not forget the maimed, either) and spent more than a trillion dollars – first reversing the late Iraq dictator Saddam Hussein’s invasion of neighboring Kuwait, then overthrowing Saddam himself, then occupying the country and trying to stamp out various insurgencies, then fighting the jihadist group ISIS.

America still keeps thousands of troops in Iraq and keeps spending hundreds of billions of dollars annually trying to secure the country militarily and rebuild it economically. And these policies have continued under President Trump, even though he has stated repeatedly that he’d like nothing better than to end such “forever wars” – at some point.

So it’s fair to say that Mr. Trump considers Iraq’s security and prosperity to be awfully important American interests.

And if so, why has the President warned Iraq that it would face “very big sanctions” and “sanctions like they’ve never seen before” if the Americans are forced to leave? And how on earth could reports be true that his administration has told Iraq that it would lose access to billions of dollars of vitally important oil earnings it has no choice but to keep in an account at the Federal Reserve system’s New York branch?

Sure, making good on these threats would produce disaster for Iraq. And Mr. Trump has backed his words with deeds several times during his presidency – on tariffs on metals and on China, on tariffs on Mexico to achieve more immigration enforcement cooperation, and of course on Iran’s attacks on American assets.

But these Trump actions weren’t taken against countries the President wants to help, including for self-interest-based reasons. By contrast, his Iraq policies demonstrate that self-interest is exactly why he wants to stay in that country militarily – despite continued cost and risk. Why, therefore, would any Iraqi with a working brain believe the President? Unless Mr. Trump has been converted that perverse Vietnam-era logic that he has to “destroy the town to save it”? Or unless (at least many) Iraqis and their politicians really doubt Trump-ian suggestions that he would indeed be comfortable withdrawing soon, or fervently hope they’re not true, and are simply playing to their more skeptical countrymen?

Yet even the possibility (and indeed the likelihood) that Iraqis are playing political games with their – again, nonbinding – resolutions presents a problem for the United States. For how smart is it to stay dangerously and expensively mired in a country whose leaders believe such shams are needed simply to stay in power?

Finally, if Mr. Trump really could take Iraq or leave it, then why not leave now? If it’s ultimately so expendable, then why expose a single further American soldier to danger, or spend a single additional taxpayer dollar, there?

If the United States was at the beginning of a deep involvement in Iraq, a respectable argument could be made for these latest Trump-ian threats and other statements. Sometimes such good cop/bad cop tactics can help governments walk tricky tightropes that are worth walking. But even those who tend to see value in such acrobatics have to concede that, after nearly two decades, precious little progress has been made toward creating an Iraq that can handlie its major challenges (which clearly are internal) by itself, and therefore supporters of the status quo need at least to consider the possibility that the policy’s a fool’s quest.

As for those of us who have long argued that current Iraq policies have been doomed and that the United States should wash its hands of the country, and indeed the entire hopelessly dysfunctional Middle East – the latest jumble of Trump words and deeds can only leave us more convinced than ever.