(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.

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(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].”

Im-Politic: Signs that the Left is Getting It on Trump-ism

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2016 elections, Arianna Hiffington, Bernie Sanders, Bill Clinton, cultural issues, diversity, Donald Trump, gender politics, Huffington Post, identity politics, Im-Politic, Immigration, Iowa caucuses, Jobs, John Judis, liberals, middle class, Robert Reich, sexual orientation, social issues, Trade, unions, Vox.com, wages, Wall Street Democrats, working class

On the eve of an Iowa caucus that could put Donald Trump firmly in the driver’s seat for the Republican presidential nomination, the nation’s intertwined political-media establishment seems pretty convinced of a remarkable trend spreading among long-time GOP fixtures: The party’s power structure is reluctantly but unmistakably making its peace with the idea that the bombastic real estate magnate and reality TV star will become their standard bearer and possibly the next president.

More recently, though, the chattering class has noted a development that might be at least equally important, especially for the longer term future of American politics. Many liberals are abandoning their standard portrayal of Trump as a simple racist, nativist, xenophobic, misogynistic, (ADD YOUR FAVORITE ADJECTIVE) demagogue.

Instead, they seem to be warming to the idea that Trump is a genuine economic populist, and one who is not only giving (needlessly crude) voice to widespread and legitimate working- and middle-class frustrations, but who is consistently pounding on specific themes with which progressives should be entirely comfortable. In fact, some of them have picked up on my claim from last September that there’s enough overlap between Trump’s positions and those of Democratic Socialist Vermont Senator Bernie Sanders to create the (eventual) possibility of a new and enduring left-right populist synthesis.

The latest sign has come from journalist John Judis, who for decades has been one of the few prominent media figures to focus on the politics of American economic issues and the economics of political controversies. Judis has just published an essay on Vox.com titled “This election could be the birth of a Trump-Sanders constituency.” In Judis’ words:

“Sanders and Trump differ dramatically on many issues — from immigration to climate change— but both are critical of how wealthy donors and lobbyists dominate the political process, and both favor some form of campaign finance reform. Both decry corporations moving overseas for cheap wages and to avoid American taxes. Both reject trade treaties that favor multinational corporations over workers. And both want government more, rather than less, involved in the economy.”

He continued:

“[E]ven if Trump and Sanders are denied the White House, their campaigns will have been extremely significant, perhaps even changing presidential politics forever. Their success in building a following in their parties is an early warning sign of discontent with the outlook that has dominated American politics for decades.”

I’d add, as I noted in my original post, that Sanders used to express realistic concerns about the impact of mass immigration on the wages and broader living standards of Main Street Americans. But when he decided to run for president, he apparently concluded that his campaign would make no headway among a critical mass of Democrats unless he went into full Hispanic-pander mode.

Of course, readers familiar with the national media world know that Judis has long been distinctive among his peers for recognizing how much of the Democratic party’s mainstream has drifted away from its working- and middle-class roots in favor of the kind of Wall Street-friendly outlook championed by former President Bill Clinton. I suspect he would also sympathize with the idea that many more left-leaning Democrats have become too enamored with an agenda centered around identity politics and cultural issues that not only offers nothing to their traditional – whiter – base, but that treats their own values with thinly disguised and often open disdain.

As a result, what really stands out about the Judis article is the venue. For since its launch in 2014, Vox.com has established itself as a bastion of elitist liberals who in particular strongly endorse the trade and immigration policies so harmful to native-born U.S. workers. Its staff is also keen on the idea that Democrats should be helping to speed America’s transformation into a society and economy that’s both younger and more diverse racially and ethnically, as well as one that’s more globalized and cosmopolitan, greener, and alienated from traditional beliefs about family structure, gender and sexual identity, and employment patterns. Think of hipsters enamored with the idea of the gig economy.

Moreover, the Judis piece isn’t alone. Last July, Huffington Post was so dismissive of Trump’s – then embryonic – candidacy on so many grounds that it famously announced that it would stop reporting on Trump’s run as part of its political coverage. Instead, the website explained,

“we will cover his campaign as part of our Entertainment section. Our reason is simple: Trump’s campaign is a sideshow. We won’t take the bait. If you are interested in what The Donald has to say, you’ll find it next to our stories on the Kardashians and The Bachelorette.”

At the end of last year, Huffington Post reclassified Campaign Trump. Arianna Huffington, the site’s founder, made abundantly clear that her contempt for Trump was as heated as ever. But just this morning, one of her Associate Politics Editors posted an item titled, “A Democrat Explains Why She’s Voting for Donald Trump.” The main reason? Her hometown of Dubuque, Iowa

“is suffering from a stagnant economy, and [she] is disappointed with Democrats for failing to adequately turn things around. When Trump, a wealthy businessman who espouses protectionist economic policies, rails against nations like Mexico and China, [subject Rebecca] Thoeni says she can relate.

“‘People at the company I work for, they lost their jobs. They’re sending those jobs to China,” she said.’”

For good measure, the article’s author contended that this Iowan “is one of many working-class whites who make up a large portion of the Trump phenomenon currently sweeping across the country. It is a coalition that spans Southern states and the Rust Belt, which has suffered from economic decline, population loss and urban decay. It also includes a good chunk of less educated Americans who do not have a college degree, and who feel like they’ve been ignored by leaders in Washington.”

A few days before, progressive stalwart Robert Reich wrote in a column about an epiphany he came to while touring the nation promoting his latest book:

“I kept bumping into people who told me they were trying to make up their minds in the upcoming election between Sanders and Trump.

“At first I was dumbfounded. The two are at opposite ends of the political divide.

“But as I talked with these people, I kept hearing the same refrains. They wanted to end “crony capitalism.” They detested “corporate welfare,” such as the Wall Street bailout.

“They wanted to prevent the big banks from extorting us ever again. Close tax loopholes for hedge-fund partners. Stop the drug companies and health insurers from ripping off American consumers. End trade treaties that sell out American workers. Get big money out of politics.

“Somewhere in all this I came to see the volcanic core of what’s fueling this election.”

Reich has by no means become a Trump-ite. But he acknowledged that”

“If you’re one of the tens of millions of Americans who are working harder than ever but getting nowhere, and who understand that the political-economic system is rigged against you and in favor of the rich and powerful, what are you going to do?

“…You don’t care about the details of proposed policies and programs.

“You just want a system that works for you.”

I could go on. But more important at this point is to note the publication of an article in The New York Times yesterday indicating that what’s happening is that the chattering class’ liberal wing is finally getting a message being sent it by the grass roots. The piece, by correspondent Noam Scheiber, reported a “form of anxiety…weighing on some union leaders and Democratic operatives: “their fear that Mr. Trump, if not effectively countered, may draw an unusually large number of union voters in a possible general election matchup. This could, in turn, bolster Republicans in swing states like Ohio, Pennsylvania, Michigan and Wisconsin, all of which President Obama won twice.”

And according to Scheiber, these Democratic stalwarts weren’t blaming American workers for succumbing to racism, xenophobia, etc. In their view, “The source of the attraction to Mr. Trump, say union members and leaders, is manifold: the candidate’s unapologetically populist positions on certain economic issues, particularly trade; a frustration with the impotence of conventional politicians; and above all, a sense that he rejects the norms of Washington discourse.”

There’s of course a distinct possibility that none of this will matter on Tuesday morning. Perhaps a Trump loss in Iowa – even a close one – will puncture the aura of invincibility and even inevitability that some believe is surrounding him, and trigger a collapse of his White House hopes. Or Trump could finally hurl one bombshell that turns off even his hard-core supporters. Or maybe once enough of his competitors drop out of the race, one of Trump’s remaining rivals could consolidate enough of the anti-Trump vote under one banner to send him to defeat. (Trump has never so far won a majority of Republican primary voters in any poll.)

But even if Trump flames out at some point, it’s increasingly clear that “Trump-ism” will remain with us. And if it finds a champion who can combine Trump’s passion with some softer personal edges and a somewhat thicker skin, both wings of the chattering class may regret that they don’t have The Donald to kick around anymore.

Im-Politic: The Elite Media Just Became Even More Elitist

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American Prospect, Bill Clinton, boardroom liberalism, Establishment Media, Fred Hiatt, Harold Meyerson, Hillary Clinton, Im-Politic, Immigration, inequality, living standards, middle class, Noam Scheiber, Obama, offshoring, The Washington Post, Trade, unions, wages, working class

If you think (as you should) that the top priority of the Mainstream Media is to protect the nation’s bipartisan ruling class and its selfish, Main Street-shafting policies, you got strong support for your views last week, when Washington Post columnist Harold Meyerson announced he was being dropped from the paper’s roster of regular columnists.

The Post insists that ditching Meyerson had nothing to do with his liberal positions, but with what the TV business has long called “low ratings.” Here’s the official explanation, from Post editorial page editor Fred Hiatt, who wielded the axe:

“The Post opinion section takes pride in publishing a wide range of views, including progressives Eugene Robinson, EJ Dionne, Ruth Marcus, Greg Sargent, Paul Waldman and Katrina vanden Heuvel and contributing columnists Rachel Maddow and Danielle Allen. We’ve been pleased to publish Harold’s columns for the past 13 years, but he failed to attract readers as these others have. And while our decision should never be made based only on clicks, I think it would be arrogant to entirely ignore what our readers are telling us.”

But Meyerson himself – who has not protested the decision – nonetheless provided information making clear that his politics were indeed an issue. In an email to a reporter covering the move, Meyerson wrote:

“In my discussion with him, Fred cited two reasons for not renewing my column. In addition to the click-count, he said there was too frequent an emphasis in my column on ‘unions and Germany,’ by which he meant — my phrasing, not his — worker rights and an alternative form of corporate governance.”

This description, which Hiatt has not disputed, shows how misleading the Post‘s rationale is. It’s true that the paper publishes figures on the left end of the political spectrum. But none of them has consistently focused on the issues of economic power, its structure, and its effects, the way Meyerson has. Moreover, none of them has paid significant attention to the offshoring-friendly trade policies responsible for so much of destructive kind of wealth and income inequality characterizing America today – in which not only does the gap between the rich and the rest widen, but in which the living standards of working and middle class families actually worsens.

In fact, many of the writers listed in the Post statement are most accurately described as what New York Times reporter Noam Scheiber has insightfully called “boardroom liberals.” Here’s his definition:

“It’s a worldview that’s steeped in social progressivism, in the values of tolerance and diversity. It takes as a given that government has a role to play in building infrastructure, regulating business, training workers, smoothing out the boom-bust cycles of the economy, providing for the poor and disadvantaged. But it is a view from on high—one that presumes a dominant role for large institutions like corporations and a wisdom on the part of elites. It believes that the world works best when these elites use their power magnanimously, not when they’re forced to share it. The picture of the boardroom liberal is a corporate CEO handing a refrigerator-sized check to the head of a charity at a celebrity golf tournament. All the better if they’re surrounded by minority children and struggling moms.”

According to Scheiber, President Obama is a leading exemplar. Though the author seems to demur, I would argue that Hillary Clinton and her former chief executive husband are two others. And regular readers of the Post edit page and many of the aforementioned columnists will find this characterization familiar, too.

Not that Meyerson was the last word on what ails the nation economically. In particular, he toed the labor union line far too slavishly, including a refusal to recognize mass immigration as a mortal threat to U.S. wages, broader living standards, and economic security. His own particular dogmatism also included an uncritical worship of Big Government.

But Meyerson – who will still be appearing in his own American Prospect magazine, and apparently from time to time in the Post – did write from a perspective that’s all too rare inside the bipartisan Beltway political and media bubble. And Hiatt’s tortured rationalization all but guarantees that whatever replacement is chosen for Meyerson won’t make this capital gang any more diverse.

Making News: Podcast of Last Night’s John Batchelor Radio Interview on U.S.-China Relations

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2016 elections, AFL-CIO, China, Gordon Chang, Joe Biden, Making News, Richard Trumka, The John Batchelor Show, Trade, unions, Xi JInPing

I’m pleased to present the link to the podcast of my appearance last night on John Batchelor’s nationally syndicated radio show.  Click here for a great discussion among John, me, and co-host Gordon Chang on the politics of U.S.-China trade relations in the context of Chinese President Xi Jinping’s current visit to the United States.  Our segment starts at the top of the hour.

Im-Politic: Labor’s Immigration Priorities Keep Putting Americans Last

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Democratic Party, EB-5 visa, illegal immigration, Im-Politic, Immigration, Jobs, unions, UNITE HERE, wages, Washington Post

Just when you think the intertwined worlds of politics and policy can’t get any loopier, reality stomps in to prove you wrong. The latest evidence? Attacks by a major U.S. labor union on a federal program that aims to attract immigrants who promise to make job-creating investments.

The program sounds like exactly the kind of immigration policy America needs – encouraging immigration that unmistakably strengthens the economy and actually trickles down to Main Street.

I’m sure it’s not perfect, and therefore equally sure that if and when it gets re-authorized by Congress (which needs to happen by sometime next month), improvements can and should be made – e.g., in oversight, in maximizing the overall hiring requirements, and in ensuring that it meets specific legislative targets (like benefiting poor rural regions, which allegedly have gotten short shrift).

So it’s good that UNITE HERE, the big service sector union, seems to support Congressional Democrats and Republicans seeking such changes. But that’s far from the union’s main objection to the program, according to a new Washington Post report. What’s really wrong with the EB-5 visa process is that it doesn’t benefit enough of America’s illegal immigrants! As a UNITE HERE staff member complained to the Post (for attribution), “How does this [program] help the 11 million people in this country who are stuck in immigration reform limbo?”

There’s nothing new about unions’ steady shift on immigration policy – from fear that excessive inflows would undermine employment and wages for native-born workers to nearly unbridled enthusiasm for opening the border much wider. (The rationale seems to be enlarging that share of American voters who will support the Democratic Party’s Big Government agenda, and gaining access to large number of potential dues-paying members.)

What is new here is at least one major union’s decision that an immigration program that’s unmistakably (if perhaps inadequately) a job-creator needs to explicitly aim at fostering employment for Americans here illegally, as well as for legal residents (including legal immigrants). What’s next? Numerical quotas? Well why not? Continued and even growing public anger at both liberal and conservative U.S. elites’ determination to put Main Street native-born Americans and even legal immigrants last in their economic plans? Count on it.

Im-Politic: How Bernie Can “Win”

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2016 elections, amnesty, Bernie Sanders, Buy American, carbon tariff, China, climate change, Democrats, Donald Trump, energy, environment, fossil fuels, fracking, greenhouse gases, gun control, Hillary Clinton, Im-Politic, Immigration, Jobs, liberals, multinational corporations, natural gas, offshoring, Open Borders, Populism, progressives, third world, Trade, unions

Like Donald Trump, Bernie Sanders is doing such a good job of influencing the agenda of other 2016 presidential candidates (namely Hillary Clinton) that there’s no useful advice I can offer on that score. Yet the Vermont Senator still has a ways to go if he wants to generate more lasting change in American politics, and the recipe, not too surprisingly, is the inverse of that for Trump.

First, some background. I’ve had the privilege of working with Sanders firsthand on trade and jobs issues, and greatly admire his dedication to getting America’s international economic policies right. He’s not only been a longtime champion of this cause – he’s been a tireless worker as well. Sanders has also kept his focus squarely on the most important victims of offshoring-friendly and otherwise flawed trade policies – the American worker and the productive segments of the U.S. economy. That’s a refreshing change from most others on the leftward end of the political spectrum, who have consistently muddied both the politics and economics of trade issues by (wrongly) emphasizing the harm allegedly inflicted on developing countries by American and American-supported policies.

Even better, it’s already clear that Sanders recognizes the importance of generating crossover appeal. In addition to noting that many of his positions – like Wall Street reform – resemble those of real conservative populists, he has walked this walk on an important social/cultural issue: gun control. But if he genuinely wants to shake up American politics and not simply worry Clinton through next November, the Democratic contender needs to understand the game-changing potential of more realistic immigration and climate change policies.

Earlier in this year’s campaign, Sanders was chided by numerous progressives for being too quiet on immigration issues. Unfortunately, he responded with a June speech to Latino-American elected officials by appearing to pander to this Open Borders crowd. His trade policy position, however, makes clear how substantively mistaken these views are. In particular, as suggested above, he has recognized that failed U.S. trade policies have betrayed America’s “working people” by sending “their jobs…to China and Mexico….” (Although he’s also made some nods to “third world victimhood-mongering.”) Unlike Trump, moreover, he correctly targets multinational companies – not foreign governments – for most of the blame.

But why, in this case, does Sanders (along with most other liberal and Democratic party trade critics) now favor immigration policies that also will take more jobs from Americans, and drive wages down? If trade deals that, among other failures, make many more very low-paid workers in the third world much more available to U.S.-based businesses have these effects, why would immigration policies that literally encourage such workers to come to America produce different results?

In fairness, Sanders and other liberal immigration supporters have an answer: Foreign workers who come to the United States will be much easier to union-ize, and thus will earn higher wages, than their counterparts who remain abroad. But given the labor movement’s major and chronic failure to stem dramatic shrinkage – especially in the private sector – that clearly belongs in the wishful thinking category. Moreover, labor’s recent organizing successes have come almost entirely in service sectors that don’t face any foreign competition. As for parts of the economy that are heavily traded, like manufacturing, continuing new legal or illegal immigration influxes, along with amnesty, will surely intensify the competition for remaining domestic jobs and drive wages even lower.  

Further, as I’ve written, liberals’ claims that mass immigration can produce a new mass middle class overlook that their conception of mass immigration has no logical stopping point – and therefore is likeliest to furnish American businesses with not only huge, wage-killing labor gluts, but with huge, never-ending labor gluts.   

More important, in an election year, populist-minded voters on the Right are bound to reject this reasoning. For any hope of recruiting them to his ranks, Sanders’ immigration approach will need a thorough overhaul. And of course, by extension, this goes for any Democratic candidate.

Sanders has been one of Washington’s leading champion of high priority efforts to fight climate change, which means that re-positioning on this issue to broaden his base will be even more difficult than on immigration. But it could also pay some political dividends, and could be engineered in a way to satisfy at least some environmentally minded Democrats. In three related ways, moreover, the kinds of trade policies Sanders favors are very helpful.

First, Sanders should start emphasizing that one of the best ways to reduce global greenhouse gas emissions is to reduce China’s emissions – and that this objective in turns requires slowing down the Chinese export machine. I’ve long emphasized that, given the huge market for Chinese goods represented by the United States, American trade curbs would be a big environmental plus – whether put in place unilaterally, through sanctions on currency manipulation, or possibly better, through the kind of multilateral carbon tariff that even prominent economists are starting to favor.

Second, Sanders could win some business support for this approach by pointing out that, the less competition American businesses face from countries where environmental (and other) regulations are non-existent or not enforced, the more environmentally friendly regulation they could bear.

Third, as a strong opponent of trade decisions that have gutted the nation’s ability to administer strong Buy American regulations governing government purchases, Sanders will have no problem insisting that federal support for green manufacturing and technology be restricted to operations and facilities in the United States that employ American workers.

At the same time, Sanders will have to take much more seriously the inevitably dominant role fossil fuels will play in the country’s energy future for the foreseeable future, and his energy approach will need to make much more room for greenhouse-friendly natural gas in particular. As a result, he’ll need to view whatever pollution issues are posed by fracking not as an excuse to reject or neglect gas, but as a problem to be solved technologically.

The good news, in contrast to Trump, is that Sanders does seem to take advice from outside his ideological comfort zone and political base – his dealings with me and colleagues, when I worked at a small manufacturers’ organization, represent just one body of evidence. And representing even a small state like Vermont inevitably has exposed Sanders to the kinds of voters and their direct feedback that a one-percenter like Trump probably rarely encounters. For these reasons alone, he seems to be a more plausible candidate to help create an enduring populist alternative to the two major parties.

Just with my treatment of Trump, this analysis of Sanders’ chances doesn’t mean that I view him as an ideal candidate or, similarly, that I’m with him on most or even many issues other than those mentioned here. What it does signal is my belief that these two figures boast the potential to rework American politics by identifying crucial areas of overlap on the core pocketbook issues that are vital both to voters and to the nation’s future. Will they? Leaving aside their personal traits, recent history doesn’t provide many reasons for hope. But of course it’s precisely because meaningful change sometimes happens that we’ve had history in the first place.

Im-Politic: How Trump Can “Win”

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2016 elections, Al Gore, amnesty, Bernie Sanders, China, conservatives, Democratic Party, Donald Trump, Im-Politic, Immigration, independents, Japan, liberals, Mexico, multinational corporations, NAFTA, North American Free Trade Agreement, Open Borders, Populism, Republican Party, Ross Perot, Trade, unions

First off, a confession. I don’t think either Donald Trump (or Senator Bernie Sanders) can win their parties’ respective presidential nominations. I don’t even think they can come close. But both candidates can win in this important sense: They can change this latest version of the quadrennial national debate occasioned by presidential elections even more dramatically than they have already done. And they could even foster real progress toward the realignment that American politics could really use.

The trouble is, both candidates would need to modify some key planks in their platforms, and even though such fixes make eminent political and logical sense, I see few signs that either man will meet the challenge. And somewhat surprisingly, I sense that Sanders would need to overcome bigger obstacles than Trump. I’ll discuss The Donald today and the Vermont Senator very soon.

Trump, who began surging in Republican presidential polls as soon as he declared his candidacy, has stayed near the top precisely by pounding two issues bound to prompt vitriol from the national press corps and chattering classes even if he had zero personal quirks: job- and wage-killing trade and immigration policies. He’ll never become a media darling (though if he remains a major factor in the race, watch much of the always bandwagoning press corps start to identify his supposedly hidden virtues). But he could well expand his base and his acceptability ratings by picking his targets more intelligently and more accurately.

In particular, this means that rather than focusing all of his blame for trade and immigration policy failures on foreign governments (or on allegedly clueless American negotiators), he should target the main problem – domestic corporate lobbies that profit hugely from the cheap labor flood provided by so-called free trade and amnesty-friendly immigration approaches.

Are foreign governments blameless? Nope. Certainly China, Japan, and indeed most other major foreign economies have long pursued predatory trade strategies at the expense of America’s workers, its entire productive economy, and global financial stability. And Mexico has undoubtedly long been enabling emigration to the United States as a safety salve that’s kept it floating just above failed-state status.

But when it comes to the overwhelmingly third world-oriented thrust of American trade diplomacy since the North American Free Trade Agreement’s (NAFTA) pursuit began in the late 1980s, the leading culprits by far have been U.S. multinational corporations. These firms have become enamored with the idea of boosting profits by producing in very low-cost, virtually unregulated developing countries and selling much of that output in the very high price American market. And they know that trade deals are key to the resulting offshoring by virtually guaranteeing that the U.S. market will stay open to their foreign output even if the economy grows too weak to absorb them painlessly.    

The immigration story is more complicated, since much of the Open Borders pressure has come from an alliance of Democratic Party politicians seeking huge new constituencies for their Big Government programs and labor unions seeking huge new pools of dues-paying recruits. But certainly while stumping for Republican primary votes, the corporate cheap labor lobby should be targeted for many of his immigration slings and arrows. And if Trump somehow makes it into the general election, he could attract lots of independents and even some of organized labor’s socially and culturally conservative, and economically stressed, rank and file with this genuinely populist message.

In fact, Trump could throw his media and chattering class detractor for a total loop – and excite big chunks of the electorate across the spectrum even more – by turning his very wealth into a political asset. Like the Roosevelts before him, he could conspicuously turn on his fellow one percenters and rail against “economic royalists” and “malefactors of great wealth.”

And he could (legitimately) maintain conservative/free market bona fides by noting that urging strengthening the productive sectors of the American economy and therefore the earnings power of the nation’s workers amounts to a growth recipe that doesn’t require either (a) more government spending; or (b) tax cuts that simply aren’t affordable given still-towering budget deficits and a national debt that will grow further once further demographic changes trigger more entitlement spending.

So what’s the obstacle? I’m betting that the main one will be Trump’s own personality. Like so many other tycoons, he clearly attributes nearly all of his business success to his personal genius. And like many tycoons who enter politics, he no doubt believes that those matchless business skills easily translate into politics and policy. One likely result: He won’t be eager to take or even solicit advice from others.

Surely more important for the longer run, for related reasons, I’m confident that, once he’s defeated, Trump will display no interest in the hard, unglamorous, day-to-day work of turning his ideas and appeal into a more enduring movement that could help end the gridlock that’s paralyzed Washington for so long. 

I have no first-hand evidence for these suppositions. But I do have some second-hand evidence from a slightly different context. After Ross Perot’s remarkable performance in the 1992 presidential election, he agreed to debate then-Vice President Al Gore on NAFTA on Larry King’s cable talk show. I was a minor participant in an informal team that tried offering substantive material and rhetorical tips to Perot. He obviously didn’t get smoked because or even mainly because he ignored us. But his stubborn belief in his own media skills and mastery of the subject sure didn’t help. And when he ran for president again in 1996, he made many of the exact same mistakes. 

For the record, I haven’t approached the Trump “campaign” in any way, and haven’t been approached by his operatives. (I did try offering advice in a previous political year, but made no headway.) I might send some thoughts on election issues to presidential candidates from time to time, but if I do, I’ll send them to the entire field in both parties, see who (if anyone) responds, and hold a dialogue with them as long as they’re interested. And I’ll report publicly on whatever new experiment in political guru-ing I conduct, just to make clear that I’m not playing any favorites. If I ever get to that point, however, you’ll get the word right away.

Meanwhile, whatever difficulties may prevent Trump from fully capitalizing on the potential to create an enduring populist force in American politics, I’ll shortly explain why they’re probably less impressive than those faced by Sanders – which mainly seem to me not personal but ideological.    

 

 

 

(What’s Left of) Our Economy: With Fast Track Done, Where We Stand

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2016 elections, AFL-CIO, Asia, China, Congress, Democrats, fast track, Hillary Clinton, House of Representatives, Lincoln Chafee, national security, Obama, Senate, technology transfer, TPA, TPP, Trade, Trade Promotion Authority, Trans-Pacific Partnership, unions, {What's Left of) Our Economy

President Obama hasn’t signed the bill yet, but the Senate’s passage of fast track legislation yesterday ensures that the nation is entering a new phase in trade policymaking. So here are some first thoughts about where we stand economically and politically right now.

>It’s crucial to remember that Congressional approval of fast track doesn’t automatically mean approval of the Trans-Pacific Partnership (TPP) when (and if?) negotiations on this trade deal are completed. The odds of passage have certainly soared, since Congress has never rejected a trade deal that it’s considered under fast track procedures.

But thanks to the almost entirely unbinding, loophole-filled presidential negotiating instructions Congress has included in the legislation, the final TPP is nearly a lock to lack meaningful disciplines on currency manipulation and the discriminatory activities of state-owned enterprises. It will also extend trade benefits to a country that’s a major violator of global human trafficking norms (Malaysia) and one that’s recently instituted Islam’s often brutal Sharia as the law of the land (Brunei). Moreover, it looks likely that even the most obtuse American lawmaker will see that TPP contains a “docking” provision that will permit its ranks to be expanded beyond the current initial group of members – for example, to China.

>As I’ve written previously, organized labor still needs to take the political scalps of lots of the Senate and especially House Democrats who defied its heatedly expressed wishes and supported the fast track bill. I distinguish between the Senate and House because members of the former inevitably have broader political bases in their (almost always) larger jurisdictions, and therefore are much harder for any particular interest group to unseat. But an age-old rule of politics still holds: If you’re going to strike at your enemies, make sure (figuratively!) to kill them.

Making good on its threats will be particularly important for labor, since Democratic politicians have been feeling free for decades to ignore its wishes on a raft of other priority issues, like the so-called “card check” legislation that would have changed the laws governing unionization elections.

>The not-trivial levels of Congressional Democratic support for fast track will create an especially interesting situation for the party’s presidential politics during the rest of this national election cycle. All but one of its main presidential hopefuls – including Hillary Clinton – declared their opposition to the bill. (Former Rhode Island Governor and U.S. Senator Lincoln Chafee has been the exception.) So assuming that Chafee or another fast track supporter is not its nominee, the party’s 2016 standard-bearer will find him or herself running alongside (and thus endorsing) a number of House and Senate candidates who have backed a measure detested by many of the party’s major constituencies (not just unions, but environmental organizations as well).

>Finally, for now, I’ll be waiting breathlessly for signs that impending American approval of fast track will shore up the nation’s position in East Asia versus China’s encroachment – in line with TPP supporters’ repeated claims that the agreement is vitally needed to contain or counterbalance China. So I’ll continue to keep a close eye on China’s activities in the region – as well as the actions of U.S. allies, who have shown every sign of hedging their bets regarding Asia’s future kingpin and will undoubtedly maintain such postures whether TPP is created or not.

For as I’ve explained, unchangeable geopolitical realities, a rapidly evolving military balance, and the longtime massive, reckless, ongoing U.S. corporate transfers of defense-related technologies to Beijing (not to mention trillions of dollars’ worth of trade profits) all mean that although the United States is anything but destined to remain a “Pacific power,” an ever stronger China unmistakably is.

Im-Politic: An After-the-Fact Sign That the Media’s Trade Apathy Really Matters

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2016 elections, Congress, Democrats, fast track, Im-Politic, Mainstream Media, NBC News, Obama, polls, Republicans, TPA, TPP, Trade, Trans-Pacific Partnership, unions, Wall Street Journal

If we’ve learned anything lately about polling on trade issues, it should be that it’s about as scientific as phrenology. Still, the results of an NBC News/Wall Street Journal survey released last night seem to be sending at least one message that deserves attention: When the Mainstream Media suspends its usual neglect of trade policy questions during debates over specific deals, and actually pays the subject quasi-serious attention, public opposition to current U.S. approaches grows.

According to the new poll, only 29 percent of respondents agreed that free trade with other countries has “helped” the nation – down from 37 percent supporting this proposition in April, before the Congressional debate over President Obama’s trade agenda peaked. The share stating that such trade has “hurt” the United States rose from 31 percent to 34 percent. From last September through April, when trade coverage was virtually nowhere to be seen or heard, favorable views towards the issue were on the upswing.

All the same, the poll added to evidence that the two major political parties aren’t representing their grass roots supporters well on specific trade issues. Though most of their Senators and Congress Members have been opposing the president on trade, by a 35 percent to 29 percent margin, Democrats endorsed the view that free trade helped the nation. No separate figures for Republicans were released, and trends over time seem unavailable. But the math indicates that their disagreement with this position was widespread enough to push overall public skepticism into negative territory – even though their Capitol Hill representatives have comprised most of Mr. Obama’s staunchest trade allies.

Similarly, by 34 percent to 25 percent, “Democratic primary voters” said that support for the president’s Trans-Pacific Partnership trade deal would more favorably incline them toward a presidential candidate while. By 37 percent to 32 percent “Republican primary voters” would view such backing as a negative. Trends over time were not released for these results, either.

One important group of Democrats, however, made clear its disapproval of trade policy: Union households viewed free trade as harmful to the nation by a wide 45 percent to 29 percent.

This last-minute NBC/Journal report, of course, comes too late to have any effect on today’s scheduled key trade votes in the Senate. In other words, in that crucial sense, it all too closely resembles the media’s overall slipshod performance on this crucial subject.