Month: January 2020
Trump’s Trade Deal With China Is Better Than a Trade War With China. But a $200 Billion Question Remains.
“As the “Phase One” name would indicate, this isn’t really an end to the trade war—in fact, nearly all the tariffs imposed by both the United States and China since hostilities commenced in July 2018 will remain in effect. Still, after 18 months of escalation and retaliation, the signing of a partial trade deal is a welcome sign that cooler heads have prevailed in Washington and Beijing.”
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“the Trump administration does deserve credit for getting stronger protections for intellectual property into the deal, though it remains unclear whether those provisions can be meaningfully enforced. China has also agreed to make a series of changes to its financial services regulations that should allow competition from U.S. banks. That’s potentially more important than it might appear because it reduces the odds that the world’s two largest economies will fully de-couple from one another in the future.”
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“the biggest part of the trade deal—a promise that China will boost its purchases of U.S. exports by $200 million over the next two years—should be viewed with skepticism.”
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“Forcing China to buy more U.S. goods “directly contradicts the negotiating demand that China liberalize its economy and relax centralized control over trade and investment,””
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“trade happens in an incredible diffuse way. It is the result of millions of individual decisions made by consumers and businesses every day. When “America” trades with “China,” what’s really happening is that some individual within America is trading with some individual inside China.
Or at least that’s how it should be. It’s true, of course, that China’s communist government retains considerable control over markets inside the country. But requiring China to buy more American goods isn’t the way to encourage more liberalization.”
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“It’s also not clear whether China buying $200 billion of additional U.S. exports will actually add to overall American economic growth. It’s possible that China could simply buy up exports that would have otherwise gone to other countries. That outcome might reduce America’s trade deficit with China, but it wouldn’t boost U.S. exports overall or help grow American farms or manufacturing—yet another reason why Trump’s fixation on the trade deficit is counterproductive.”
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“as long as Trump’s tariffs remain in place—there are no plans to lift them right now—they will continue to harm American manufacturing and be a drag on exports. Because tariffs raise the cost of manufacturing in the United States by taxing imported component parts, they have the added effect of making finished products more expensive, and thus less competitive on the global market. The Institute of International Finance estimates that the trade war has cost the U.S. about $40 billion in “lost exports.”
China agreeing to buy more farm goods and energy from the United States won’t fix those underlying issues. Unless the tariffs are lifted, Trump’s “Phase One” trade deal could end up helping China’s socialist regime tighten its grip on free markets while providing little to no relief for Americans.”
Trump Campaigned on Saving Factory Jobs, but U.S. Manufacturing Just Went Through a Year-Long Recession
“although it is true that America’s economy has, on the whole, performed admirably well under Trump, with unemployment numbers hovering near historic lows, one of the notable dark spots over the last year has been manufacturing jobs—particularly those in the upper midwest.
Last week, the Federal Reserve reported that U.S. manufacturing was in a recession for all of 2019. This wasn’t slow growth; the sector actually became smaller. The slowdown was relatively mild, with factory production shrinking by about 1.3 percent. But it was the worst performance since 2015, the year that Trump started his presidential campaign.”
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“the uncertainty and increased costs surrounding Trump’s trade war, which was billed as a way of supporting American factory jobs, has instead wreaked havoc on an export-heavy sector that relies on the global flow of goods to operate. Trump’s interventions were intended to prop up U.S. manufacturing. But they backfired, harming the people he claimed to help—who also happen to be some of the people who played a crucial part in his election.”
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“Farming, another industry that Trump campaigned on helping, was so harmed by the trade war that the Trump administration ended up spending some $28 billion—more than double the price tag of President Obama’s auto bailout—to keep them afloat.”
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“Trump’s attempts to prop up the manufacturing sector through tariffs and trade restrictions didn’t just fail to work; they actively harmed the people they were intended to help. So even as Trump has overseen an economy that has many bright spots, the sector and worker demographic he tried to boost ended up struggling.”
People Rarely Die After Using Opioids Prescribed for Them
“Although prescription pain medication is commonly blamed for the “opioid epidemic,” such drugs play a small and shrinking role in deaths involving this category of psychoactive substances.”
E-Verify: Making Life Harder for Workers and Small Businesses, With Enthusiastic MAGA Support
“”there are non-trivial set-up, training, and compliance costs to using the system. These costs are particularly cumbersome for small firms, which a 2011 analysis suggested would spend $2.6 billion on compliance-related costs if forced to utilize E-Verify.”
The law, which is currently imposed on some or all workers in 22 states, is thus widely flouted, and smaller firms are more likely to evade it.”
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“The economists found reasons to believe that E-Verify produces “significant declines in Hispanic worker employment.” But they saw “no evidence that native-born workers benefit from E-Verify mandates,” and in fact found that those mandates “reduce employment among some lower-skilled groups of native-born workers.” Specifically, “the passage of any E-Verify mandate reduces employment among natives with a high school degree or less education by 2.7 percent,” an effect “entirely driven by reduced employment among low-skilled natives who are 16 to 40 years old.””
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“the authors did not find evidence that E-Verify lowers the actual “potentially undocumented population” in areas where the system is enforced. The authors suggest that they’re instead getting by with “increases in supplementary family income sources”—i.e., being helped by others in their households.”
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“when something goes wrong with the system, nearly half of the problem cases can take up to eight days to resolve, creating uncertainty and paralysis for both hired and hirer—and giving employers an incentive just to cut out potential workers who might have eventually made it through the system.
How often does E-Verify mistakenly mark people as legally unable to work when they should have been approved? About 0.15 percent of the time, which sounds impressive, but if it were applied to every American worker via federal mandate it would leave more than 187,000 people a year barred from work for no reason at all.
The system can be gamed with borrowed or stolen identify documents, and the low compliance with state mandates does not hold out promise of success for any federal mandate that might come along.”
Joe Biden is the only candidate with a real shot at getting things done
“There’s way too much that’s both tangibly and symbolically at stake with Trump’s presence in the White House for Democrats to ignore the overwhelming evidence that the politicians with something on the line in tough races think Biden is the best chance to beat him.”
Ted Cruz now: Quid pro quo “doesn’t matter.” Ted Cruz before: Quid pro quo talk is “hearsay.”
“former National Security Adviser John Bolton is reportedly prepared to testify he has first-hand knowledge of a quid pro quo in which President Donald Trump linked the release of held-up military aid to Ukraine to the government there helping him with investigations aimed at damaging his domestic political foes. Senate Majority Leader Mitch McConnell reportedly told Republican senators on Tuesday he doesn’t have the votes to block Democrats and four Republicans from compelling Bolton’s testimony during the ongoing impeachment trial.
So now that it’s becoming harder to deny the quid pro quo, Republican senators are learning to love it — and using the Trump-friendly confines of Fox News to downplay Bolton’s revelations before he even has the chance to testify.”
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“before news about Bolton’s position broke on Sunday, the Trumpworld line was that there was no evidence one ever existed. For instance, just two weeks ago, Cruz dismissed quid pro allegations as mere “hearsay” coming from “people who had no direct evidence, witnesses who’d never even met President Trump.”
But now that news has broken about Bolton claiming to have first-hand knowledge of a quid pro quo based on a conversation he had with the president, Cruz has suddenly moved the goalposts to “quid pro quo doesn’t matter.”
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“Republicans learning to love the quid pro quo illustrates how far they’re willing to go to defend Trump. They have no shame about contradicting statements they made just weeks ago, interpreting Trump’s actions in a way inconsistent with the known facts”
Yale Will Eliminate a Beloved Introductory Art Class for Being Too White, Male, and Western
“It’s good to include more perspectives and to ensure that a liberal arts education is not excessively focused on Europe. But diversity by addition is vastly preferable to diversity by subtraction. When a university eliminates an introductory art class because a tiny number of ideologues object to the whiteness and maleness of it all, it feels like they are declining to teach history because some people don’t like what happened. The West’s outsized influence on the events of the last several centuries may very well be problematic, but that doesn’t mean it isn’t real.”
Trump Administration Repeals Federal Protections on Puddles, Dry Stream Beds, Some Ditches
The Truth About Income Inequality
“On a global scale, inequality is declining. While it has increased within the United States, it has not grown nearly as much as people often claim. The American poor and middle class have been gaining ground, and the much-touted disappearance of the middle class has happened mainly because the ranks of the people above the middle class have swollen. And while substantially raising tax rates on higher-income people is often touted as a fix for inequality, it would probably hurt lower-income people as well as the wealthy. The same goes for a tax on wealth.
Most important: Not all income inequality is bad. Inequality emerges in more than one way, some of it justifiable, some of it not. Most of what is framed as a problem of inequality is better conceived as either a problem of poverty or a problem of unjustly acquired wealth.”
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“The Congressional Budget Office (CBO) produced a report in November 2018 on the growth of household income in each of five quintiles. Between 1979 and 2015, average real income for people in the top fifth of the population rose by 101 percent, while it rose for people in the bottom quintile by “only” 32 percent. For the middle three quintiles, average real income increased by 32 percent as well.
Or at least those are the numbers if you ignore the effects of taxes and direct government transfers. But you really shouldn’t leave those out: If you’re debating whether to increase taxes on the rich and transfers to the poor, it seems important to take into account the taxation and safety net already in place. Once the CBO researchers subtracted taxes and added welfare, Social Security, and so on, the picture changed dramatically for the lowest quintile: Income rose by 79 percent. (For the middle three quintiles, it increased by 46 percent. For the highest quintile, it went up by 103 percent—slightly more than before, probably thanks to Ronald Reagan’s and George W. Bush’s tax cuts.)”
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“That’s still an increase in income inequality, of course. But it’s not an inequality increase in which the poor and near-poor are worse off. They’re much better off. Everyone is.”