Im-Politic: Want to Really Fuel Big Government? Ditch Trump’s Trade Policies

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Affordable Care Act, big government, budget cuts, Congress, conservatives, discretionary spending, entitlement spending, healthcare, Im-Politic, industrial policy, Mick Mulvaney, Obamacare, Republicans, Trade, Trump, USAToday

USA Today‘s editorial yesterday on U.S. trade policy did an excellent job of stating a major objection to tariffs and other measures that interfere with international commerce – and one that understandably resonates strongly in a nation that prizes free market values, and especially among its conservatives: These trade curbs fuel Big Government, thereby preventing the economy from achieving its full potential, and harming the nation’s society and culture as well as the economy by sapping the attractiveness of individual initiative.

The essay also understandably focused on a development that looks like a poster child for trade-fostered Big Government – the process set up by the Trump administration to decide which companies will receive exemptions from recent metals tariffs, based on claims that adequate domestic substitute steel and aluminum products aren’t available.

In the words of the editorial writers:

“[T]he administration has imposed a new tax on imported metals and then put itself in a position to decide who has to pay it and who does not.

“This is Big Government at its worst — arbitrary and capricious, if not outright political, as it picks winners and losers in business. And all this is being done without any new law being passed and while a Republican Congress, which used to stand for free enterprise and limited government, remains supine.”

One obvious rejoinder is the observation that, however cumbersome the exemptions process may or may not be, Washington actually has an impressive historical record of “picking winners and losers in business.” Examples include the information technology hardware and software industries, which were practically launched with public (largely Pentagon sponsored) research and development funds, and critically nurtured by government (again, largely defense-supplied) markets; the world-class farming sector fostered by U.S. Department of Agriculture research findings; the equally world-class pharmaceutical industry aided by the National Institutes of Health; and an aviation and aerospace industry supported by the Defense Department, by the National Aeronautics and Space Administration, and by a NASA predecessor aeronautic agency. (For an excellent summary of this historical record, see this study from the National Academies of Science.) 

But there’s another vital point missed by USAToday and by conservatives who remain devoted to preserving or renewing the expansion of the existing free trade realm: If they succeed, they’re likely to see the kind of Big Government metastasis America has never experienced before. The reason? So many renumerative Americans jobs will be lost, and so much income destroyed, that political pressures for a much more generous welfare state will positively skyrocket.

Another favorite cause of newspaper editorialists like the USAToday writers and many Big Government-phobic conservatives – the return of mass immigration – will bring the same type of outcome, for many of the same reasons.

And if you think that the nation’s leaders will unite to uphold the causes of self-reliance and much smaller government, you weren’t paying attention to the recent fight over abolishing “Obamacare.” For better or worse, the national healthcare system created at the initiative of the former President remains largely in place even though its Republican opponents control the entire federal government and a huge majority of state governments because lots of these Republican politicians recognized that eliminating this latest entitlement would be political suicide.

At the same time, standard-issue conservatives aren’t the only Americans who may need to learn these lessons. Donald Trump belongs on this list, too. Interestingly, he won the presidency after running a campaign that both promised an Americans-First overhaul of trade policy and to protect the nation’s immense middle class entitlement programs – both of which clashed strongly with conservative dogma.

But his biggest first-year push as President involved going after Obamacare – well before he had achieved any of his trade policy goals, and before he even began pursuing them energetically. And he’s so far permitted his budget director, former Tea Party stalwart Mick Mulvaney, to propose numerous deep cuts in discretionary spending and even some entitlement spending that aren’t exactly middle class-friendly, either.

This set of priorities may have been unavoidable politically, reflecting Mr. Trump’s perceived need to establish some conservative bona fides with Congressional Republicans – who mainly still strongly support the party’s old orthodoxy, but whose staunch backing he would need in any impeachment proceedings.

At the same time, a fair number of those donors-friendly, offshoring-happy Congressional Republicans are retiring – largely because they recognize that Trump-ian trade and other unorthodox policies have won over the base. And although Democratic hardliners may indeed push successfully for impeachment proceedings if the party wins the House, it’s likely that, in the absence of a major smoking gun, this campaign could alienate independent voters – who are hardly gung ho to give Mr. Trump the heave-ho. Chances are they’d be even less receptive to an impeachment spectacle dominating Washington if the President distanced himself from meat-axe public spending cuts.

If this scenario unfolds, the loudest voices complaining that Trump-ian trade policies lead to Big Government could be mainstream media editorialists and pundits. But these voices would be less important than ever.

Making News: A USAToday Op-Ed on Trump & Trade, & a New National Radio Podcast on the China Tech Threat

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CFIUS, China, FDI, Made in China 2025, Making News, national security, tariffs, technology, The John Batchelor Show, Trade, Trump, USAToday

I’m pleased to announce that USAToday has just published my latest op-ed article — a piece arguing that President Trump is exactly right to believe that the United States has ample clout to prevail in trade conflicts with foreign economies. Read it at this link.

Incidentally, this article ran as a solicited rejoinder to a USAToday editorial criticizing Mr. Trump’s trade policies. As I’ve written before, the newspaper deserves great credit for its regular practice of letting readers know that there are (at least) two sides to every story.

Also the podcast is now on-line of my interview last night on John Batchelor’s nationally syndicated radio show. Click here for an information-packed discussion about the latest developments in the U.S.-China competition to control industries and technologies vital for national security and prosperity.

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

(What’s Left of) Our Economy: America’s Growth and Savings Dilemma in a Nutshell

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bubbles, Financial Crisis, GDP, gross domestic product, housing, Maurie Backman, personal consumption, real GDP, recovery, The Motley Fool, USAToday, {What's Left of) Our Economy

An intriguing op-ed in USAToday provides a great opportunity to return to an important subject RealityChek has neglected a bit in recent weeks – the quality of America’s economic growth.

The article, by Maurie Backman of the Motley Fool investing website, does a fine job of scolding Americans for not saving enough – and of debunking many of the excuses heard for their lack of thrift. One of his especially interesting arguments: No matter how little one earns, it’s always possible to save something.

This is literally true, although economists widely agree on the seemingly commonsense proposition that (all else equal, of course!) the less you earn, the harder you’ll find saving, and in fact the less you’ll save. But what I immediately began thinking about is a major implication of this pattern. Namely, if Americans started saving even a little more, wouldn’t future economic growth be even slower than it’s been? At least unless the country found some other engine of growth – like investment or trade?

The light shed by the latest data on America’s growth shows just what an enormous transition this will entail. These numbers come from the government’s second read on the gross domestic product for the fourth quarter of last year and how its changed. (We’ll get one more fourth quarter figure next week and that will be the final result for that period – until a more comprehensive set of revisions is released a little further down the road.)

What they reveal is that the economy nowadays has never been more consumption-heavy. In fact, it’s even more consumption-heavy than at its peak during the mutually reinforcing credit and housing bubbles of the previous decade – which eventually collapsed into the worst financial crisis to hit the United States and the world since the 1930s.

During the fourth quarter, personal consumption as a share of the inflation-adjusted gross domestic product (GDP) hit 69.64 percent. That slightly eclipsed the former record of 69.60 percent – which dates only from the second quarter of last year.

So is it time to hit the economic panic button? Not (quite?) yet. Because housing – the second part of the toxic combination that helped trigger the crisis – still remains depressed compared with the previous decade’s levels. Housing’s share of real GDP peaked in the second quarter of 2005 at 6.17 percent. During the fourth quarter of last year, it was a relatively subdued 3.52 percent.

As a result, the toxic combination’s total share of the economy after adjusting for prices stood at 73.16 percent. That’s a bit lower than the old combined record of 73.27 percent (during the third quarter of 2005). But it’s only a bit lower.

And therein lies the biggest dilemma facing American policymakers – whether in the White House or the Congress or the Federal Reserve: Spending-based growth is unhealthy and unsustainable – and the story usually ends very badly. But reorienting the country’s national business model and turning it into “an economy built to last” looks to be disruptive enough to exact major short-term costs.

Im-Politic: An Old Year Rung Out with Fake News

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ABC News, Barack Obama, Bloomberg.com, CNN.com, Gallup, Hillary Clinton, Im-Politic, Mainstream Media, Marketwatch.com, NBC News, Newsday, Politico.com, The New York Times, Trump, USAToday, Washington Post

Whatever you think of Donald Trump, his presidential campaign, and his first year in office, you can be sure of this: His charges that too much of the Mainstream Media publishes and broadcasts too much fake news will continue – and continue to resonate – as long as their performance in covering a new Gallup survey of the most admired men and women in America keeps typifying their output.

Gallup has asked Americans who they look up to most since the 1940s (for male figures) and since the 1950s (for female figures). As I see it, the 2017 poll’s results were a fascinating mix. They showed that former President Barack Obama and last year’s Democratic presidential nominee Hillary Clinton continued their long strings at the top of their heaps. President Trump came in second on the men’s list – as he has since 2015.

In my view, Gallup played it right in its report on the survey, noting the winners in its lead paragraph and then immediately observing that the Obama and Clinton margins were “much narrower…than in the past.” The firm didn’t highlight that both Democrats’ edge fell at a faster rate than President Trump, but at least its tables made that trend clear.

Few major news organizations followed suit.

USAToday‘s headline, for example, blared, “Barack Obama beats Donald Trump for most admired man, Hillary Clinton tops list again in Gallup poll.” Reporter Ashley May never mentioned their diminishing leads.

CNN.com did better. Its header announced “Gallup: Obama, Hillary Clinton remain most admired” and noted the Obama dip in the second paragraph. But the Clinton fall-off wasn’t reported until the fifth (of ten) paragraphs.

The ABC News headline – “President Trump is America’s second-most admired man, poll finds” – at least accurately reflected the disparaging tone of the full article. “Digital reporter” Karma Allen led off by observing that “President Donald Trump snagged a major legislative victory with the signing of his landmark tax reform bill last week, but he’s still living in his predecessor’s shadow when it comes to public admiration, according to a new poll.”

He continued with the factoid that the results marked “one of the very few times in recent history that an incumbent president hasn’t taken the top spot.” (It’s actually 13 out of 71 times.) And he simply ignored the declining Obama and Clinton numbers.

Bloomberg,com chose as its headline a reasonable “Obama Tops Trump as Most Admired, Gallup Poll of Americans Finds,” but although specifying that the margin was “close,” never mentioned the weakening Obama or Clinton ratings, either. The same held for the article run in Politico.com. The New York Times headline was a similarly accurate “Clinton and Obama Top U.S. Poll on Most Admired People” but the article neglected to include the trend over time as well.

The two worst performances? The Washington Post‘s headline was a gratuitously snarky “Obama beats Trump where it will sting: He’s the most admired man in America.” A graphic made clear the closing Trump-Obama gap, but this development never made it into the article itself. However reporter Philip Bump did consider it important to write that the overall results “coming at this moment, will probably be somewhat galling to Trump.”

Whoever wrote the headlines for the coverage by Long Island’s Newsday seemed like he or she was auditioning for a job at the higher profile Post. “Gallup ‘most admired’ poll is an ‘Obamanation’ for Trump,” was the first description of the survey the paper’s readers saw. The second description, in a subhead? “He just can’t win the popular vote.” The article itself, by William Goldschlag, simply continued in this vein.

But I’d be just as remiss as much of the Mainstream Media by failing to mention journalists who recognized the deteriorating relative Obama and Clinton ratings. So Rachel Koning Beals of Marketwatch.com and Phil Helsel of NBC News, please take richly deserved bows. Let’s all hope your news judgment spreads to many more of your colleagues in the New Year!

Our So-Called Foreign Policy: So You Think Trump is a Dangerous Nut on North Korea?

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Alex Ward, alliances, allies, Ana Fifield, Ankit Panda, Associated Press, BBC, CNN, Cold War, Council on Foreign Relations, David J. Rothkopf, David Jackson, deterrence, Diane Feinstein, Ed Markey, foreign policy, foreign policy establishment, Kim Jong Un, media, Nicole Gaouette, North Korea, nuclear weapons, Our So-Called Foreign Policy, Peter Baker, political class, Rick Gladstone, Stewart Patrick, The Atlantic, The Diplomat, The New York Times, Trump, United Nations, USAToday, Vox.com, Washington Post

Weird as it sounds, the North Korea nuclear crisis has created two significant benefits – though unfortunately neither has yet created either establishment or popular pressure to change an increasingly reckless American approach.

Still, it’s promising that dictator Kim Jong Un’s rapid development of nuclear weapons that can reach the U.S. homeland is not only revealing that America’s longstanding approach to defense alliances is now exposing the nation to the risk of nuclear attack even when its own security is not directly at stake. It’s also more recently begun exposing America’s many foreign policy and other elite mainstays either as ignoramuses or (much more likely) shameful hypocrites.

The reason? They profess to be shocked, just shocked (Google “Casablanca” and “Louis Renault”) that President Trump has threatened to “totally destroy” North Korea in order “to defend itself or its allies.” As if they’ve never heard of “nuclear deterrence.” And don’t know that such saber-rattling has been U.S. policy for decades.

To review briefly, since fairly early in the Cold War, and especially since the former Soviet Union developed its own impressive nuclear forces, American leaders have overwhelmingly concluded that the only reasonable uses of these weapons was preventing a nuclear attack on the United States itself, or a similar strike or conventional military assault on one of the countries it was treaty-bound to protect. The idea was that even nuclear-armed potential aggressors the Soviets and Chinese (and the North Koreans, once they crossed the threshhold) would think at least twice before moving on targets if they had reason to fear that the United States would launch its own nukes against those countries.

From time to time, some politicians and analysts suggested that the effects of such nuclear weapons use could be restricted to efforts to take out the enemy’s remaining nuclear weapons or otherwise fall short of “totally destroying” that adversary. But for the most part, the idea of limited nuclear war has been rejected in favor of vowing annihilation. And except for disarmament types on the Left and super-hawks on the Right (who supported the aforementioned “counterforce” approach), the political class comprised of office-holders and journalists and think tankers was just fine with the nuclear element of U.S. alliance strategy.

It’s completely bizarre, therefore, that almost none of the press coverage – including “experts'” analyses – of Mr. Trump’s September 19 statement evinces any awareness of any of this history. Instead, it’s portrayed the “totally destroy” threat as appallingly monstrous, unhinged rhetoric from an unprecedentedly erratic chief executive. Just as bad, President Trump is accused of playing right into Kim’s hands and shoring up his support with the North Korean populace.

For instance, here’s how Washington Post reporter Ana Fifield yesterday described the consensus of of North Korea specialists she had just surveyed:

“Kim Jong Un’s regime tells the North Korean people every day that the United States wants to destroy them and their country. Now, they will hear it from another source: the president of the United States himself.

“In his maiden address to the United Nations on Tuesday, President Trump threatened to “totally destroy North Korea.” Analysts noted that he did not even differentiate between the Kim regime, as President George W. Bush did with his infamous “axis of evil” speech, and the 25 million people of North Korea.”

Here’s the New York Times‘ take, from chief White House correspondent Peter Baker and foreign policy reporter Rick Gladstone:

“President Trump brought the same confrontational style of leadership he has used at home to the world’s most prominent stage on Tuesday as he vowed to ‘totally destroy North Korea‘ if it threatened the United States….”

Similarly, USAToday‘s David Jackson described the Trump speech as “a stark address to the United Nations that raised the specter of nuclear warfare” and contended that “Trump’s choice of words on North Korea is in keeping with the bellicose rhetoric he’s already used to describe the tensions that have escalated throughout his eight months in office.”

As for the Associated Press, the world’s most important news wire service, it was content to offer readers a stunning dose of moral equivalence: “In a region well used to Pyongyang’s pursuit of nuclear weapons generating a seemingly never-ending cycle of threats and counter-threats, Mr. Trump’s comments stood out.“

CNN‘s approach? It quoted a “senior UN diplomat” as claiming that “it was the first time in his memory that a world leader has called for the obliteration of another state at the UNGA [United Nations General Assembly], noting even Iran’s most fiery leaders didn’t similarly threaten Israel.”

For good measure, reporter Nicole Gaouette added, “The threat is likely to ratchet up tensions with North Korea while doing little to reassure US allies in Asia, said analysts who added that the President now also runs the risk of appearing weak if he doesn’t follow through.”

The Council on Foreign Relations’ Stewart Patrick, who served on the State Department’s Policy Planning Staff under former President George W. Bush, told the BBC that the Trump threat is implausible, and that “I think the folks in the Pentagon when they look at military options are just aghast at the potential loss of life that could occur with at a minimum hundreds of thousands of South Koreans killed in Seoul.”

For David J. Rothkopf, a former Clinton administration official and protege of former Secretary of State Henry Kissinger who went on to edit FOREIGNPOLICY magazine (where I worked many years before), the problem is much simpler: “The president of the United States chose, in a forum dedicated to diplomacy, to threaten to wipe another nation — a much smaller one — off the face of the earth in language that was not so much hard-line rhetoric as it was schoolboy bullying complete with childish name-calling.”

Many members of the U.S. Congress were no better. Said California Democratic Senator Diane Feinstein: “Trump’s bombastic threat to destroy North Korea and his refusal to present any positive pathways forward on the many global challenges we face are severe disappointments. He aims to unify the world through tactics of intimidation, but in reality he only further isolates the United States.”

Massachusetts Democratic Senator Ed Markey brought up a war powers angle: “The more the president talks about the total destruction of North Korea, the more it’s necessary for the country and the Congress to have a debate over what the authority of a president is to launch nuclear weapons against another country.”

What’s of course especially ironic about Markey’s words is that such a U.S. policy of “no first use” of nuclear weapons would effectively destroy the American alliances that liberals like Markey have become enamored with lately, and that President Trump is often charged by these same liberals as attempting to dismantle.

Some other news organizations and websites have behaved even more strangely – lambasting the Trump threat but then acknowledging deep inside their accounts that the President said nothing fundamentally new.

For example, the viscerally anti-Trump Vox.com website predictably led off one of its accounts with, “On September 19, President Donald Trump gave his first speech to the United Nations General Assembly. His harsh rhetoric toward North Korea stood out — mostly because he threatened to obliterate the country of 25.4 million people.”

Six paragraphs later, writer Alex Ward got around to mentioning that “A few [specialists] noted that it was similar to what other presidents, including President Obama, have said before.”

And in an Atlantic post titled, “A Presidential Misunderstanding of Deterrence,” author Ankit Panda of The Diplomat newspaper accused President Trump of using “apocalyptic rhetoric” and threatening “to commit a horrific act expressly forbidden by international humanitarian law….”

But then he immediately turned around and admitted,

“The remarks echoed similar, countless deterrent threats levied against North Korea by past U.S. presidents with more subtlety and innuendo, perhaps allowing for a more calibrated and flexible response. But ultimately vowing to ‘totally destroy’ North Korea if America or its allies come under attack is, in fact, not all that sharp a break from existing U.S. policy.”

If these treatments of the North Korea crisis were simply efforts to demonize President Trump by abusing history, that would be contemptible enough, but what else is new from America’s too often incompetent and scapegoat-addicted elites?

But something much more dangerous is at work here. Individuals who, for good reasons, have not been regarded as kooks are using Never Trump-ism to foster a genuinely kooky idea. They’re suggesting that the alliances so central to America’s foreign policy making for decades should be viewed as little more than kumbaya symbols, and that anyone speaking frankly about their possibly deadly and indeed horrific implications is beyond the pale – even though the proliferation of nuclear weapons has unmistakably rendered these arrangements far more perilous.

In other words, they’re spreading the worst, and most childish, of all canards about foreign policy, or about any dimension of public policy – not that a particular set of choices is sound or not (that’s almost always legitimately debatable), but that hard choices never need to be made at all.

Making News: A New USAToday Op-Ed – & More!

Tags

automation, climate change, Germany, Jobs, Lifezette.com, Making News, manufacturing, Paris climate accord, Trade, Trump, USAToday

I’m pleased to announce the publication of my latest op-ed article – a piece that appears in USAToday this morning on President Trump’s criticisms of Germany’s trade policies. Here’s the link.

Incidentally, the article ran as a rejoinder to an unsigned USAToday editorial on the subject that also was published today.  The paper’s editors have been using this “pro-con” format for many years, and I think they deserve great credit for seeking out viewspoints with which they disagree.

In addition, a June 1 post on Lifezette.com included my (skeptical) opinions about claims that Mr. Trump’s withdrawal from the Paris climate change accord will cede global leadership on the issue to China.

Moreover, a May 25 Lifezette article quoted me on a new study finding that trade and offshoring have been responsible for much more manufacturing job loss lately than automation.

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

 

 

Making News: Back Tonight on Thom Hartmann’s Show – & More!

Tags

China, free trade, globalization, Jobs, Lifezette.com, Making News, NBC News, Obama, RT America, The Big Picture with Thom Hartmann, Trade, Trump, USAToday

I’m pleased to announce that I’m scheduled to return to RT America’s The Big Picture with Thom Hartmann tonight to talk about a truly bizarre development — mounting claims that hyper-protectionist China is becoming the world’s leading champion of free trade and economic openness in general.  Click on this link to watch live.

The segment is scheduled to lead off the program at 7 PM EST.  (But as RealityChek regulars know, this can sometimes change.)  As usual, I’ll be posting the link to the podcast as soon as one is available.

Also, it was great to be quoted in three news articles today.  The first, a USAToday piece on President-elect Trump’s job-creation gambits, can be accessed here.

The second, this NBC News post on the same subject, is available here.

The third, a Lifezette.com post on outgoing President Obama’s economic record, is at this link.

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