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: When Industries Disappear

Tags

apparel, big government, Breitbart.com, conservatves, embroidery, Frances Martel, Immigration, labor unions, manufacturing, New Jersey, skills, textiles, Union City, unions, {What's Left of) Our Economy

Until I read Frances Martel’s “Hanging by a Thread,” I used to think of Union City as little more than one of those bleak-looking smallish northern New Jersey municipalities the Amtrak trains pass through on their way between New York City and points south.  How wrong I was!  And for such wide-ranging policy and political reasons!  

Not that you can’t simply enjoy her long feature for Breitbart.com for the fascinating descriptions of what makes her hometown special geologically (e.g., it sits on lots of Manhattan bedrock-like granite, good for supporting factories with heavy machines and multistory housing) and demographically (because it developed fairly late in the 19^th century, its population was always dominated by immigrants).

Clearly important as well is Martel’s main theme – how manufacturing built solid prosperity for Union City from the get-go, and how its demise, due to developments like (but not restricted to) offshoring-obsessed U.S. trade policies helped bring punishingly hard times. (Full disclosure: Martel interviewed me for the article, and quoted me quite generously.)

But if you’re thinking this is only an article for trade and/or manufacturing mavens, or for New Jersey history aficionadoes, you’re sorely mistaken. For along the way, “Hanging by a Thread” offers important insights into how these closely related subjects profoundly affect many of the nation’s other major issues and challenges.

For example, Martel offers a novel twist on the notion that the United States welcomed so many immigrants so consistently (though not always) from the mid-19^th century onwards in particular because of its urgent need for unskilled labor. No doubt most of the newcomers were poorly educated. But as “Hanging” makes clear, industry during this period used lots of complicated machinery, including the embroidery sector that became concentrated in Union City.

As Union City’s official historian told Martel, many of its first immigrants came from Germany, Switzerland, Austria, and other parts of Europe with major textile industries, and brought with them extensive experience working with such devices that employers clearly found valuable.

Since skills (of different kinds, of course) remain so crucial to economic success today, Union City’s past raises the question of whether – as Open Borders advocates seem to believe – the United States today should indiscriminately welcome immigrants regardless of skill levels and gainful employability.

Two other messages coming through loud and clear from Martel’s research and analysis are especially important for conservatives to heed. The first has to do with unions. Martel’s parents were hard-line anti-communists who fled Castro’s Cuba, and her mother worked in apparel. The author explains that these arrangements were seen as “a critical part of the factory ecosystem.” The following exchange, with her mother speaking first, makes the point vividly:

“‘I have always had a good union. It works, I think. It works to have a union because without a union, in a private place, you’re screwed,’ she told me.

“‘You don’t feel that there is a conflict between that and being a capitalist?’” I asked…..

“‘No. What? Being a capitalist? No,’ she replied, with confusion. ‘No, that has nothing to do with socialism, it’s just so that the worker has someone to defend them. If you don’t have a job, they can fire you whenever. That’s not fair. To throw you out for no reason, it’s unfair ifyou are working well.’”

Martel’s second message for conservatives actually echoes a point I’ve made before (e.g., here): The more enthusiastically traditional free trade policies are pursued by American leaders, the bigger government’s going to get. But as Martel makes clear, these approaches to the global economy are bound to generate needs that far exceed the kinds of welfare state benefits (ranging from income support to heavily subsidized healthcare) used to keep living standards above third world levels (or at least try to do so).

As the Union City example shows, relentless globalization can also turbocharge government’s role in economic development itself. The author explains that, since 2000, Union City Mayor Bob Stack (a big-city machine politician if ever there was one)

“took the reins on the eve of the guillotine falling on embroidery and has taken to meticulously rebuilding the identity of the city. He tore down Roosevelt Stadium, the sports venue at the heart of the city, to build a new Union City High School – with a stadium on the roof. Union City previously boasted two high schools, one for Union Hill and one for West Hoboken, that Stack turned into middle schools. He built parks in honor of the city’s Cuban, Colombian, and Dominican populations, and an ‘International Park.’ Seemingly every other street has a water park open in the summer for children to play in – the biggest, Firefighters’ Memorial Park, boasts an Olympic-sized swimming pool. His administration also refurbished the downtown library into the Musto Cultural Center and built its replacement, the library at José Martí Middle School (which his administration also built), in the shadow of what was once St. Michael’s monastery, an imposing Catholic historic site that now houses a Korean Presbyterian congregation.”

In other words, Union City realistically recognized the choices before it, and rejected “the option much of the Rust Belt took: do nothing, abandon ship, hope the invisible hand swoops in before you hit the concrete.” As a result (and also because of its proximity to New York City), it’s more than avoided the ghost town fates of counterparts like Gary, Indiana, Youngstown, Ohio, and Detroit, Michigan.

Im-Politic: A Good News/Bad News Labor Day Poll for U.S. Labor Unions

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Economic Policy Institute, Gallup, government workers unions, Im-Politic, Labor Day, labor unions, public employee unions, unions, workers

As a firm believer that healthy democracies and vibrant economies need strong, independent labor unions, I’m happy to celebrate Labor Day each year, and pleased that Americans have been doing so now for 125 years. (Whether particular unions today are playing constructive roles is another matter entirely.)

And that’s why I’m also concerned that a recent Gallup poll on Americans’ views of unions contains as much troubling as encouraging news for organized labor.

Gallup’s summary emphasizes the positive, highlighting its finding that union approval is at a near-50 year high (64 percent, specifically). Moreover, that level is up sharply since the 48 percent all-time low recorded by Gallup in 2009. (Its figures go back to 1936, as shown below.)

At least as good, as I see it: On a relative basis, Gallup found that pro-union views lately have grown fastest among most strongly among self-described Republicans – a group that’s never been known for union support. Yet whereas unions’ approval rate grew by 33.33 percent overall from 2009 to 2019, among Republicans, it improved by 55.17 percent (from 29 percent to 45 percent).

This trend surely reflects the shift in the GOP’s base toward Trump-style working class-oriented populism, and away from the rigid claims still made by too many of the party’s representatives in Congress and various types of Washington, D.C.-based hangers on that simply pursuing business’ favored small government/low tax agenda will automatically bring the greatest benefits to the rest of the economy – and will be appreciated by voters.

Political independents’ union backing improved more than the national average, too, during this period – from 44 percent to 61 percent – but the 38 percent shift of has been less dramatic than that for Republicans. Since Democrats have always been most sympathetic to unions, their support levels remain the highest in absolute terms (66 percent), but the post-2009 improvement has been the smallest (24.24 percent).

The problems lurking for unions in these poll results? Mainly, that public approval of unions seems to have little at best to do with unions’ actual membership rolls. As the Gallup results make clear, although union support nowadays is indeed at relatively high levels, they’ve always been on the high side (at least since 1936). Indeed, support levels generally have exceeded 60 percent, even recently.

Yet during this time, union membership in America has nosedived. According to the Economic Policy Institute – a progressive think tank that supports unions and receives funds from organized labor – unions represented about 22 or 23 percent of U.S. workers in the mid-1930s. (See the graphic below.) As of last year, that figure stood at just 10.5 percent. And if not for government workers’ unions, whose membership accounts for nearly 34 percent of public sector employees, the share would be much lower. (See this report by the U.S. Bureau of Labor Statistics for these data.)

Another big potential problem: During the last U.S. recession (which lasted from late-2007 to mid-2009), Gallup has found that public support for unions fell much farther and faster than during previous downturns. Optimists could note that the last recession was unusually deep, and that union approval ratings have rebounded strongly since. But during the Great Depression of the 1930s, which was much worse, union approval according to Gallup was much higher, and the Economic Policy Institute numbers show that union membership actually rose.

It’s also worth mentioning that this Gallup survey overlooked one big issue: Americans’ views of those government workers’ unions. That’s especially important because those public sector workers became a majority of U.S. union members in 2009, and remain so today. I’m not saying that this development has been either good or bad. But it does represent an historic milestone showing that the makeup of organized labor has changed markedly in recent decades. Does most of the public recognize this situation? Much of it? Do Americans regard government unions the same way they view private sector unions? Those are subjects Gallup and other pollsters need to explore. And there’s no reason to wait for next Labor Day. (Here’s a report on a poll dealing with some of these issues, but it’s eight years old.) 

 

Im-Politic: Why His Adversaries Could be Underestimating Trump Again

Tags

202 election, B.J. Bethel, blue-collar workers, defense manufacturing, General Motors, Im-Politic, Lima, Lordstown, Mainstream Media, manufacturing, manufacturing workers, Midwest, non-college whites, Ohio, public sector unions, tanks, Trump, unions, WDTN TV

Although the Democratic Party often seems to have gone identity politics-crazy, even many in its identity-obsessed progressive wing believe that President Trump won’t be defeated in the 2020 Presidential election unless the party improves its performance with non-college educated white voters, many of whom work in so-called blue collar industries like manufacturing and fossil fuel extraction. Many of these progressives (including the Mainstream Media journalists who often carry their water) have claimed that this constituency is ripe for the retaking thanks to alleged Trump policy failures or blunders on trade, tax reform, and healthcare, and proceed to cite evidence that the President’s backing in this segment of his coalition is fading significantly.

Given the latest Trump healthcare position – which I agree is block-headed – and his penchant for inconsistency on core issues like immigration as well as trade, I’d be the last person to dismiss this analysis as naive. The more so if Democrats nominate a 2020 candidate with at least some credibility on blue collar social and cultural as well as economic concerns.

But if you’re looking for reasons for deep skepticism, look no farther than a recent account of a Trump Ohio factory visit from B.J. Bethel, of Dayton, Ohio’s WDTN TV. Bethel, (who in the interest of full disclosure, is also a personal friend), covered the President’s March 20 appearance at a Lima, Ohio tank factory.

Mr. Trump’s prospects in Lima seemed mixed. On the one hand, his defense budget proposals have kept the factory open following talk during the Obama administration of closing it. On the other, his trip came two weeks after General Motors completed (for now) the shutdown of a big auto assembly plant in Lordstown in northeastern Ohio – despite Mr. Trump’s campaign pledge to keep the facility open. Moreover, since the Lima factory makes weaponry, its non-supervisory workers belong to government employee unions, which have been especially critical of the President at least partly since their members haven’t been directly affected by the kinds of offshoring-friendly trade policies and Open Borders immigration policies of his predecessors.

Nonetheless, as Bethel wrote for WDTN’s website, “Trump received a rousing ovation when he entered the floor where the speech was held.” His speech was “loved” by the attendees he interviewed. And the President seems to have received his biggest cheers when he “hit hard at union leaders while praising union workers, stating the leaders often say one thing and do another.”

According to Bethel, “‘They’re [the union leaders] good guys, but they’re Democrats,’ Trump said.

“He mentioned ‘high union dues’ paid by workers and the shifting of blue collar allegiances from Democrats to Republicans.

“This was the only instance of his speech where the crowd chanted ‘Trump, Trump.'”

In some subsequent Twitter direct messages, Bethel elaborated:

“Trump goes off on Lordstown, and blames the union leadership for some of the issues GM had at the plant, which I think is debatable, but Trump is savy, he knows what he’s doing.

“He talks about union leadership, and he’s so casual in this speech, and he says, ‘I’ve invited union leaders into the White House, I asked them what can we do, they’re extremely nice people, THEY AREN’T LIKE US, THEY’RE DEMOCRATS THOUGH and they’re always going to be democrats, so you know, they go with Hillary while I’m trying to save jobs.’

“Then he pivots to this and it’s the most amazing thing I’ve heard a politician do.

“He starts hammering union leadership on the basis of how they treat the rank and file in the union. Basically they aren’t doing what’s necessary to back up the money they make and aren’t doing everything they need to do to. And look at the dues you pay, how much do you pay in dues a week or year and how much do you get out of it?

“So how does the crowd react?

“It roars, ‘TRUMP, TRUMP, TRUMP, TRUMP’ – only time during the entire speech he had his name cheered.

“This is a huge union plant. It’s public union, as solid as it gets, their own committeeman are sitting around with them, and they’re cheering Trump as he bashes the leadership.”

As Bethel concludes, “so the GOP is working the unions hard, even the public unions. Trump beats up the leadership, while the rest go in soft. it’s a strategy to completely usurp union workers and complete taking over the working class.”

What’s especially interesting is that this Trump event was extensively covered by the Mainstream Media – as is almost all presidential travel. But the overwhelming focus of the coverage was the President’s attacks on his longtime political adversary, the late Republican Senator John McCain. (See, e.g., here and here.) 

I can’t possibly fault the journalists attending the speech from zeroing in on the McCain remarks. But revealingly, none of the coverage I’ve read (produced mostly by White House correspondents who tend to be politics-oriented, especially as national political campaigns heat up), mentioned the crowd’s reactions to the union-leader bashing by Trump.

The President has been erratic enough to render hazardous any predictions about the 2020 election. But the same Mainstream Media correspondents who overlooked the union rank-and-file response to the President in Lima belong to the same journalistic complex that was taken completely by surprise by Mr. Trump’s 2016 victory – and especially by his strength in the industrial Midwest. Their Lima coverage raises the question of whether they’re about to miss the mark again.

Those Stubborn Facts: When U.S. Immigration Bottomed, Unions Peaked

Tags

immigrants, Immigration, labor, Population Reference Bureau, The New Republic, Those Stubborn Facts, unions

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“American labor’s peak decade”: the 1930s

—The New Republic, October 2, 2018

Decade during which legal immigration into the U.S. bottomed*: the 1930s

—Population Reference Bureau, May 9, 2014

*since the 1830s

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(Sources: “America’s Missing Labor Party,” by David Sessions, The New Republic, October 2, 2018, https://newrepublic.com/article/151119/americas-missing-labor-party-book-review-erik-loomis-history-ten-strikes; “Trends in Migration to the U.S.,” by Philip Martin, Population Reference Bureau, May 9, 2014, https://www.prb.org/us-migration-trends/)

(What’s Left of) Our Economy: Some Rare Big Media Realism on Globalization

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globalization, Immigration, Jobs, Labor Department, NAFTA, North American Free Trade Agreement, offshoring, Pankaj Mishra, Sarah Chaney, strikes, The New York Times Magazine, The Race to the Bottom, The Wall Street Journal, Trade, unions, wages, {What's Left of) Our Economy

Every now and then, the Mainstream Media and the establishment conventional wisdom it parrots show some signs of approaching an understanding of how trade liberalization and globalization really work. Happily, this past week was one of those weeks.

The first of these two signs came in The New York Times Magazine, in the form of an article by Pankaj Mishra, who weirdly isn’t identified in the on-line version of the piece, but who appears to be a prominent Indian writer. Its theme: The world’s leading economies – including the United States in the first two-thirds of its history and now China – have nearly all experienced their greatest rises to prosperity and power based on policies that rejected orthodox free trade principles.

To anyone who has seriously followed the trade and globalization debate over the last quarter century, the case for this claim is anything but new. It’s been made by numerous leading scholars and other analysts. What is new is for this argument to be showcased in such a high profile media outlet. On the one hand, if this kind of information was presented to readers remotely as often as the trade and globalization conventional wisdom, American policies today might be vastly different – and the economy much sounder.

On the other, because of Donald Trump’s political success, the chances of moving U.S. trade policy onto a more realistic foundation seem higher than at any time since the 1930s. So if Mishra and The Times Magazine wind up speeding up that process to any extent, and aiding the adoption by Washington, D.C. of policies that factor in this reality, more power to them.

The second sign came in a Wall Street Journal story on findings I’d spotlighted on Friday – a Labor Department study on the virtual disappearance of major labor actions like strikes from the national economic scene. In her own report on the Labor study, Journal correspondent Sarah Chaney quoted a scholar of labor relations as noting that (in her words) “one major impediment to work stoppages…is globalization.”

To which my immediate reaction was “bingo!” – along with a sense of vindication. Way back in the late-1990s, when I was researching my book The Race to the Bottom, it became clear as can be to me that most efforts to measure globalization’s impact on the U.S. economy were missing a key point: A job doesn’t have to be either eliminated by foreign competition (whether predatory or not) or offshored for American trade policies to have affected employment or wage levels. The mere prospect of offshoring in particular, and its increased likelihood as a result of trade agreements aimed at encouraging it, would also matter, and often decisively.

Wages would be the principal victim, since workers aware that their jobs could easily be sent overseas, to lower cost locations like Mexico (via NAFTA, the North American Free Trade Agreement) or China (through numerous trade liberalization decisions taken since the early 1990s) would hardly be aggressive in pressing for better pay either by striking or taking any similar actions.

And in the book, I cited some evidence for this proposition: A 1992 survey by The Wall Street Journal finding that “one-fourth of almost 500 American corporate executives polled admitted they were ‘very likely’ or ‘somewhat likely’ to use NAFTA as a bargaining chip to hold down wages”; and a 1996 report commissioned by NAFTA’s own Labor Secretariat finding that “more than half the firms…surveyed used threats to shut down U.S. operations as weapons to fight union-organizing drives.”

Moreover, it should be just as obvious that mass immigration creates the same kind of wage-depressing force.

The next step for the establishment and its media messengers to take is to recognize that the very national economic openness for which they have pushed means that terms like “the American labor market,” at least used conventionally, have become largely meaningless. In addition, supposed mysteries like continued wage stagnation during a long economic recovery featuring near-historic lows in the headline jobless rate aren’t so mysterious at all.

In fact, that supposed national labor market has for decades consisted both of American workers inside the country’s borders and all the other workers around the world that have been made available to employers by trade and immigration policies. So if you want a labor market truly capable to pushing wage growth back up to historical norms, no measures are more important than turning that labor market more genuinely national once again.

Those Stubborn Facts: Tight U.S. Labor Markets?

Tags

Bureau of Labor Statistics, Great Recession, Jobs, labor, strikes, Those Stubborn Facts, unions, work stoppages

Number of Major U.S. Work Stoppages*, 2017: 7

Number of Years Since 1947** with Fewer Such Stoppages: 1

The Year with Fewest Such Stoppages: 2009 (Great Recession)

*Defined as events “involving 1,000 or more workers and lasting at least one shift.”

** Starting date of this Bureau of Labor Statistics series.

(Source: “Major Work Stoppages in 2017,” News Release USDL-18-0206, Bureau of Labor Statistics, U.S. Department of Labor, February 9, 2018, https://www.bls.gov/news.release/pdf/wkstp.pdf )

(What’s Left of) Our Economy: A Unproductive Study on Productivity and Pay

Tags

Greg Ip, Larry Summers, manufacturing, productivity, productivity growth, secular stagnation, The Wall Street Journal, Trade, unions, wages, {What's Left of) Our Economy

One of the most important and heatedly debated trends affecting the economy is the nature of the relationship between what workers earn and how productive they are. Judging from a new Wall Street Journal summary of a new academic paper on the subject, the pay-productivity relationship is going to remain heatedly debated. In the process, the Journal report (the paper itself isn’t yet available on-line) indicates that in major respects, the study (co-authored by former Clinton Treasury Secretary and former top Obama economic adviser Larry Summers) may wind up making the subject more muddled than ever.

According to the Summers study (in the words of Wall Street Journal writer Greg Ip), the recent conventional wisdom about productivity since the 1970s rising much faster than pay is wrong. Instead, it found “a strong and persistent link between hourly productivity and a variety of wage measures since 1973.” And although the two sets of data have been diverging, Summers and his colleague claim that, “The problem…is that the positive influence of productivity on pay has been overwhelmed by other forces pushing the other way.”

That’s an entirely reasonable conclusion. After all, as I’ve frequently pointed, the idea that major trends and developments have only one or a small handful of causes is usually wrong. But I find the Summers case fishy for several reasons.

First, at least as Ip writes, the study’s authors don’t seem to be challenging the contention that productivity has been rising much faster than pay since 1973 at all. On a purely mathematical basis, they state that, during short periods, there’s been a consistent tendency for productivity to rise somewhat faster than pay, and that over the entire multi-decade period examined, the accumulation of these relatively modest gaps produced a large gap. That sounds like a distinction without a difference to me.

Second, Summers and colleague seem to assume that one of the productivity-enhancing forces at work in recent decades has been trade. But that belief seems pretty far-fetched given how trade policy in recent decades has pushed offshore so much American manufacturing – the economy’s productivity growth leader for the last three and one half decades – or turned the other cheek as foreign predatory practices have undercut domestic manufacturing production. Good luck to any economy thinking that it can neglect the decline of its most productive sector and maintain the pace of productivity growth.

Third, and conversely, Summers’ study assumes that forces other than trade (and technological advance) have been “eating away at the ability of workers to share fully in the rise in productivity.” The culprit they single out? “Weaker unions.”

Organized labor has undoubtedly been clobbered since 1973. But why don’t Summers and his co-author recognize that trade policy mistakes bear much of the blame? In particular, how likely are workers to bargain hard for higher wages if they realize that they can easily be replaced by a much cheaper (and equally productive) Mexican or Chinese counterpart? Moreover, wage pressure throughout the economy is bound to decrease as displaced manufacturing workers start competing for remaining services jobs.

One issue on which I do agree with Summers: the significant productivity growth slowdown that’s afflicted the economy in the post-1973 period, and especially since the last recession struck at the end of 2007, has dragged seriously on wage growth, and needs to be reversed. But unless the pay-productivity gap is closed as well, the only way for the political and business establishment to keep U.S. living standards at even minimally acceptable levels will be to keep injecting artificial stimulus into the economy, and boosting its already dangerous addiction to borrowing and spending bubbles.

In fact, there’s been a prominent economist who’s been arguing lately that that’s exactly the trap that the nation has been stuck for many years. He calls it “secular stagnation.” His name? Larry Summers.

(What’s Left of) Our Economy: Trump & Workers, by the Numbers

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blue-collar workers, construction, healthcare services, Helaine Olen, inflation adjusted wages, Jobs, manufacturing, mining, real private sector, real wages, regulation, Steven Greenhouse, subsidized private sector, The Nation, The New York Times, Trump, unions, wages, workers, {What's Left of) Our Economy

Since Donald Trump first declared his presidential candidacy, he’s been dogged by charges that he’s a phony populist, and that his working class supporters have long been hoodwinked by his promises of restoring factory and other blue collar jobs and living standards. And this past Labor Day inspired the President’s critics to double down, as evinced by this piece by long-time labor reporter Steven Greenhouse in The New York Times and this one by economist Helaine Olen in The Nation.

So it seems appropriate for RealityChek‘s slightly delayed analysis of the latest monthly jobs report to include some data bearing on these questions. The verdict? Whatever anti-union and deregulatory measures the Trump administration has backed, its first months in office overall have been just about as good for blue-collar industries and blue-collar employees as during the latest comparable period during the supposedly worker-friendly Obama administration.

First, the manufacturing highlights of last Friday’s August jobs report:

>August saw the best month of net new job creation in U.S. industry since August, 2014 (36,000 in each month.

>Although the August and July totals are still preliminary, their combined sequential employment increase of 62,000 was the highest such figure since the 68,000 improvement in December, 2011 and January, 2012. This back-to-back total reduces the odds that the August numbers are a fluke.

>On a year-on-year basis, manufacturing’s August gain of 138,000 contrasts strikingly with the 5,000 net job loss in industry between the previous Augusts. In fact, this new annual advance was manufacturing’s strongest since the 139,000 yearly gain in August, 2015.

>Reenforcing this conclusion are the strong upward revisions for monthly manufacturing job growth in June (from an upwardly revised 12,000 to 21,000) and for July (from 16,000 to 26,000)

>Manufacturing has now regained 1.027 million (44.79 percent) of the 2.293 million jobs it lost from the onset of the last recession (at the end of 2007) through its jobs bottom in February and March, 2010.

>Yet manufacturing employment is still down 9.21 percent since the downturn’s beginning. During that period, overall private sector employment is up by 7.23 percent.

>Manufacturing’s wage performance, however, slumped notably in August. Pre-inflation wages sank sequentially by 0.56 percent – the worst such drop since May, 2012’s 0.63 percent.

>It’s true that manufacturing wages have been volatile this year, with July recording a strong month-on-month gain of 0.53 percent. But the yearly August manufacturing wage rise of 1.76 percent not only trailed the previous August-to-August rise of 2.68 percent. It was also the smallest annual increase since July, 2015’s 1.57 percent.

>By contrast, August current dollar wages in the private sector overall were up by 0.11 percent sequentially and 2.53 percent year-on-year. The latter total was just slightly below the 2.55 percent increase achieved between August, 2015 and August, 2016.

>Since the current recovery began, in mid-2009, pre-inflation manufacturing wages have risen by only 15.25 percent total. For the private sector overall, they’ve increased by 19.20 percent.

>As a result, the gap between private sector pre-inflation wage increases and those gains in manufacturing stood at 20.57 percent in August. One encouraging development for manufacturing workers: Last August, the gap was much wider: 27.92 percent.

>On an after-inflation basis, manufacturing’s wage performance remains mixed compared with the rest of the private sector. The latest data are from July, and show a monthly gain of 0.37 percent for manufacturing workers and 0.19 percent for the private sector overall – barely half as much.

>Year-on-year, however, manufacturing’s real wage gains slightly lagged those of the private sector in toto in July – 0.74 percent versus 0.75 percent.

>And the gap is even wider during the current recovery – inflation-adjusted wage gains of only 1.96 percent for manufacturing workers during this more than eight-year period, versus an improvement of 4.75 percent for the entire private sector.

But what about the Trump-Obama comparison? Here are the main numbers, using February as the first plausible month of “Trump-onomics”:

>From this past February through August, total net new U.S. job creation is up by 0.66 percent, versus 0.83 percent from last February through last August – the final such period during Mr. Obama’s presidency. So score one for the previous administration? Maybe. But the economy is also deeper into the recovery, and just about at the official definition of full employment. So it’s natural that job-creation should slow down some.

>Interestingly, the difference is much smaller when looking at private sector job creation. Last February through last August, it grew by 0.84 percent. During the comparable Trump period, it’s increased by 0.79 percent. That’s one sign that the Trump employment performance has been healthier, and therefore more sustainable, because it’s been more private-sector driven, than the late Obama version.

>This difference becomes even more pronounced when looking at trends in the subsidized private sector – those industries traditionally considered private sector (notably healthcare) that nonetheless depend heavily on government subsidies. Hence my decision to place them in a separate category.

>So far this year, under President Trump, subsidized private sector jobs have indeed increased strongly – by 0.95 percent. But that’s a much slower rate of growth than the 1.29 percent recorded during the comparable Obama months.

>As a result, employment growth in the “real” private sector has been faster under Mr. Trump – by 0.76 percent to 0.74 percent – and this, again, despite the arrival of full employment.

>Continuing sector by sector, the statistics show that the some of the biggest employment gains during President Trump’s tenure have taken place in blue-collar heavy industries that performed poorly during the comparable final Obama period.

>Principally, net employment from this past February through August is up by 0.83 percent in manufacturing, by 4.96 percent in mining and logging, and by 0.68 percent in construction.

>The comparable Obama administration numbers: -0.27 percent, -6.90 percent, and +0.63 percent, respectively.

>More broadly, blue-collar employment throughout the entire economy (defined by the Bureau of Labor Statistics as production and non-supervisory workers) has increased at the same pace during the two time periods in question (0.70 percent), though in absolute numbers, the Trump administration gains are a bit larger (714,000) than the corresponding Obama administration advances (701,000) – again, despite the arrival or near-arrival of full employment.

>Where blue-collar workers fared better so far during the Obama period than during the Trump period is on the wage front. But they haven’t fared massively better.

>For all private sector production and non-supervisory workers, pre-inflation wages were up by 1.36 percent during those Obama months, and 1.19 percent during the Trump months.

>The same trends have been visible in the blue-collar industries. During the Obama months in 2016, current-dollar wages rose by 1.78 percent in manufacturing, 0.82 percent in mining and logging, and 2.60 percent in construction.

>The Trump results? 1.26 percent, 0.87 percent, and 1.98 percent, respectively.

>In other words, the only blue-collar sector in which blue-collar workers have outperformed under President Trump has been in the mining sector – which has seen by far the biggest employment outperformance.

Of course, the Trump administration is still pretty young, and any or all of these trends could change, and change dramatically, in the months ahead. But until they do, it’s clear that Mr. Trump’s presidency has neither devastated the workers who supported him so ardently or made their lives Great Again. And any analysts denying that the truth so far lies somewhere in between – including the administration’s own grandstanders – have some explaining to do.

(What’s Left of) Our Economy: Which Democrats are Serious and Un-Serious About Trade Overhaul?

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AFL-CIO, Bernie Sanders, Canada, Charles Schumer, currency manipulation, Debbie Dingell, Democrats, dispute resolution, Elizabeth Warren, environmental standards, labor standards, Mexico, NAFTA, North American Free Trade Agreement, Politico, Richard Neal, Robert Lighthizer, Rosa deLauro, rules of origin, Thea Lee, Trade, Trump, U.S. Trade Representative, unions, Wilbur Ross, William Pascrell, {What's Left of) Our Economy

Usually, paying attention to instances of politicians and other public figures getting up on their soapboxes is a waste of time. Yesterday served up an exception: a press conference held by House Democrats in reaction to President Trump’s official decision to open talks to renegotiate the North American Free Trade Agreement (NAFTA). The statements recorded in this Politico account offer some evidence as to which leaders on America’s Left are willing to work with the administration on trade policies that can help the working class voters Democrats still profess to champion, and those who will remain content to sit on the sidelines and take partisan potshots.

Reportedly, all of the House members who spoke at the event “said…they feared Trump would make only modest changes to NAFTA after blasting it as an economic disaster throughout last year’s presidential campaign.” The basis for these worries? The letter sent yesterday by new U.S. Trade Representative Robert Lighthizer to Congressional leaders announcing the administration’s intention to open NAFTA talks with the two other signatories, Canada and Mexico. According to these House Democrats and some other trade critics, the document apparently was “short on details,” which many claimed indicated Trump’s intention simply to “tweak” rather than comprehensively overhaul the agreement.

All else equal, wondering about the president’s real intentions is anything but unreasonable. His personality, after all, is mercurial, and one of his major trade initiatives to date – the negotiations begun with Beijing following February’s summit with Chinese leader XiJinping – has legitimately disappointed advocates of the major course change he pledged during the campaign. (The other major trade initiative, scrapping the Trans-Pacific Partnership trade agreement, kept a leading campaign promise to the letter.) Moreover, the Lighthizer letter is indeed short on specifics.

But none of the participants in the press conference seems to have noticed that in previous statements –including reportedly to leading Democratic lawmakers, top Trump officials have emphasized the need for dramatic NAFTA changes.

For example, Commerce Secretary Wilbur Ross has described as high NAFTA-related priorities greatly tightening the pact’s rules of origin in order to incentivize more non-NAFTA manufacturing investment inside the free trade zone, and restructuring a dispute-resolution system that gives each signatory an equal vote even though the United States represents more than 85 percent of North America’s total economic output. Reinforcing this point was the Lighthizer letter’s contention that “establishing effective implementation and aggressive enforcement of the commitments made by our trading partners under our trade agreements is vital to the success of these agreements and should be improved in the context of NAFTA.”

Meanwhile, Lighthizer reportedly has told Senators that the administration is thinking of adding to NAFTA rules that would prohibit currency manipulation – a move that would set a valuable precedent for future trade deals. In addition, his letter mentioned the need to improve NAFTA’s labor and environmental protections. In my view, they’re largely unenforceable. But they’ve been a prime focus of Democratic Party trade policy positions for decades.

So given that background, it seems fair at this point to finger Connecticut’s Rosa deLauro, New Jersey’s Bill Pascrell, and Massachusetts’ Richard Neal as grandstanders. The former stressed the “tweaking” allegation. The latter two charged that “It was clear from the start that the administration was only interested in working with the Congressional Republican leadership in drafting this notice [the Lighthizer letter].”

I’d also include in this group several key Senate Democrats, including Leader Charles Schumer of New York, former presidential candidate Bernie Sanders of New York, and Elizabeth Warren of Massachusetts. They voted against Lighthizer’s confirmation despite his decades-long record of fighting predatory foreign trade practices both as Deputy U.S. Trade Representative during the Reagan administration, and as a trade lawyer representing domestic American producers.

More temperate in their judgments were Michigan’s Debbie Dingell, and the AFL-CIO’s Thea Lee. The former stated that she was “investing the time to understand where the consensus is.” The latter said, “We enter every negotiation in a good faith state of mind and we expect a lot from our government. Certainly candidate Trump made a lot of promises about fixing flawed trade agreements and looking out for American workers and good jobs, so we will hold him and his administration to that promise.”

I can’t think of a more reasonable position for politicians and other supporters of a movement that still styles itself as the “party of the common man [and woman].”