Globalism Establishment Starts to Sweat as their Regime Begins to Crumble

July 26, 2016

These three articles appeared in the news a couple of days ago almost simultaneously in the wake of the Republican convention.

In this first article, finance ministers and central bankers from the G20 nations pledge to “share the benefits of global growth more broadly.”  The article focuses on concerns surrounding “Brexit,” Great Britain’s vote to pull out of the European Union over dissatisfaction with the EU’s open border policies and with being fleeced to prop up the economies of other EU nations.  But the article also takes note of Trump’s vow to pull out of trade agreements.  The G20 is starting to sweat.

In the 2nd article, U.S. Treasury Secretary Lew is reported as saying that it’s time to “redouble our efforts to use all of the policy tools that we have to boost shared growth.” Why is it time to do that now?  Why weren’t we doing this all along?  It’s because it’s now clear that “free trade” policy is becoming more widely opposed, with the political left now opposing the Trans Pacific Trade Partnership (TPP) and with the right going further, vowing to pull out of all existing free trade deals.  The globalist Obama administration is also starting to sweat.

And further evidence comes in this 3rd article about a meeting on Friday between President Obama and his Mexican counterpart.  Don’t be fooled.  This wasn’t just a meeting designed to stress the importance of the relationship between these two countries.  Both are beginning to sense the very real possibility that their trade regime is nearing it’s end.  I predict that, sometime between now and the election, there will be an announcement of some deal, a deal that had its genesis in this meeting, that will move some token manufacturing back from Mexico to the U.S. in an effort to blunt some of the trade anger.

I have written occasionally about cracks that were beginning to appear in globalization – like more and more economists beginning to openly question whether donor countries like the U.S. and Britain were really seeing any benefit at all from these trade agreements and whether they have been, in fact, a net drag on their economies.  The globalization story has been very much like the annual reports that emanated from the now-defunct Enron Corporation.  We were told by Enron that their business was very complicated – too complicated for analysts outside the company to understand.  As it turned out, it wasn’t really complicated.  It was a scam.  People will only buy into such scams for so long.  And so it is with globalization.  The British people could no longer take it.  Nor can Americans.

Without the support of its donor nations and the continued subservient acquiescence of its citizens, the globalization scheme is doomed.  Good riddance.

 

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Trump

July 22, 2016

So disillusioned was I with Obama’s broken promises to address the problems with our trade policy, his broken promise to double exports in five years, his signing of the awful trade deal with South Korea and, more recently, his pursuit of bigger, more expansive trade deals with Pacific rim nations and with Europe, I vowed to myself that I would stay out of politics on this blog going forward.  However, as discoverer of the inverse relationship between population density and per capita consumption, as author of the book Five Short Blasts that explains the relationship and its ramifications and, consequently, as an advocate of policies that would restore a balance of trade and move us toward a stable population, and in the wake of Donald Trump’s acceptance speech at the Republican National Convention last night, I feel I can no longer ignore the elephant in the room.

Now more than halfway through my seventh decade on this planet, I have spent my whole life watching our country being sucked into the vortex of “globalism” in which the United States has evolved from a beacon of hope and prosperity into a host upon which overpopulated nations, unable to sustain themselves, could feed and thrive.  Our political parties evolved into one “Republicrat” party, supporting the trade and open-border policies that are central to making “The New World Order” tick.  The “hope and change” that Obama spoke of, especially his promise to fix our trade policy, I thought, might be our last chance to stop that madness.  In the wake of his betrayal, I figured that was it – that I’d never live to see an America again that was something other than the hollowed-out shell we’ve become.

On more than one occasion, I have called Donald Trump a “buffoon.”  We’ve seen him dip his toe into politics before, only to self-destruct through outlandish pronouncements and behavior.  He got my attention with his vow to “build the wall,” but I figured the same thing would happen again.  He’d soon self-destruct.  I thought that those who gave him a 1% chance of winning the nomination were being generous.  He was just grand-standing and having fun, enjoying another brief stint in the spotlight like he’s done before.

Then he vowed to rip up our trade deals and start over on trade, making new deals that actually worked for us.  He got my attention again.  I wanted to get my hopes up, but figured that, surely, his antics during the primary race would sink his chances.  To my amazement, they didn’t.  He was saying the right things about illegal immigration and about trade, but I was dismayed with the personal attacks.

Finally, last night, I saw the Trump I’d been wanting to see.  He was still Trump and, defying predictions that he’d back away from earlier promises in order to broaden his support, he actually doubled down on each one.  But gone were the personal attacks.

Trump was exactly right when he pointed out that our trade and immigration policies have done more harm to the poor, to the inner cities, to blacks and Latinos than to anyone else. I hope the folks from these demographics paid attention and kept open minds.

Unlike the Trump I’ve seen in the past, he seems truly sincere in his desire to turn the country in a very different direction.  At least that’s the way he came across last night.  It’s hard to imagine that a man 70 years old would subject himself to everything that goes with winning this nomination and waging the campaign to follow unless he really has a fire in his belly to do what he says.

But can he?  Can he get the political establishment to go along with with his plans – plans that seem radical and dangerous to many of them?  Can he back us out of trade deals in the face of threats from these other countries that will probably scare the hell out of people?  I have said that restoring a balance of trade would not be without pain, driving up the cost of goods until our own domestic manufacturing can get re-established.  Can he, a total Washington outsider, do this without mucking it up and perhaps forever sinking any hope that it will ever be tried again?   Will he be brain-washed into joining the ranks of the globalists as Obama was?  (That would seem unlikely with Trump.)  Does he really have the energy and drive to make all this happen?

Or am I just being suckered again?  I hope not.  As one who understands that the effects of our enormous trade deficit and our immigration policies on our economy dwarf all other factors – including currency valuations, Fed policy, stimulus programs, and so on – I have to at least give the benefit of the doubt to candidates who are at least claiming that they’ll tackle these issues.  Only time will tell.

In the meantime, I’ll keep doing my small part to convince you and others of the perils of our free trade and open border policies.

 


Racism(?) in America

July 11, 2016

In the wake of the events of the past week – the seemingly inexplicable killing of blacks by police and the slaughter of innocent policemen in Dallas, it’s important to draw attention to a dimension of all of this that has gone completely unnoticed.  As a white guy who has spent the better part of seven decades living in America, I feel I can attest with some authority to the progress that has been made in race relations, at least in regards to the attitudes of whites toward blacks.

As a kid I heard racial slurs all the time, from other kids and from adults alike.  Today, I virtually never hear such things.  As a kid, I witnessed all sorts of discriminatory practices – segregation in housing and schools, discrimination in hiring practices, etc.  But in the decades since the civil rights movement, virtually all of these practices have been purged from society.  Back then, you never saw blacks in professions or in positions of authority.  Today, you hardly give it a second thought.

Some years back, I was cured of cancer by a black doctor.  The color of his skin sure as hell didn’t matter to me in that circumstance.  Today, I live in an association of 135 homes, only one of which is occupied by a black family.  Why not more?  I don’t know, but I can tell you this:  I’ve never heard one word of ill will toward that family.  They’re nice people.  They maintain their property as well as any of the other homeowners, and that’s all we really care about.

While traveling through Mississippi last month, my wife and I stopped for dinner at a Chili’s restaurant in Jackson – an island of relative prosperity, thanks in large part to a massive Nissan plant there – in what is otherwise the poorest and the blackest state in the union.  The restaurant was virtually all black – black waiters, black kitchen staff and, with only a couple of exceptions, black patrons.  But those patrons were predominantly families, nicely dressed and no one seemed to even take notice of this white couple that had just walked in.  Our waiter was probably one of the better waiters we’ve had at a restaurant in some time.  My wife and I felt totally comfortable there.

That being said, I can also tell you that exactly the opposite is true on those rare occasions when I need to venture out of the suburbs into the heart of Detroit.  Like most major cities, downtown Detroit has come a long way, but venture a few blocks beyond the center, beyond the sports arenas, convention centers and hotels, and you’ll quickly find yourself in the midst of the worst urban blight you can imagine – a place that’s downright scary.  The great Motor City, America’s arsenal in World War II is now a hollowed-out shell, a bankrupt black enclave that plods through a zombie-like existence, too poor to educate its children and to provide basic services to its residents.

I’m ashamed to say that I’m scared to be in Detroit, and breathe a sigh of relief when I cross 8-mile Road on northbound I-75.  I’m ashamed because what I’m feeling seems to smack of racism.  Then again, I’m not ashamed because I know that it’s not racism that I’m feeling.  Rather, it’s something I’ll call “poverty-ism.”  America has made great strides in improving race relations.  But we fear poverty as much as ever, and all that goes with it – drugs, gangs, car-jackings, drive-by shootings and more.  The evening news can barely keep pace with the body count.  As I continue north and breathe that sigh of relief, I can’t help but think of all of the poor people – good people too, most of them – who are trapped in that environment.

In my previous post, I wrote of some “ugly” statistics buried in the June jobs report.  Here’s another one that I didn’t mention.  While the unemployment rate for whites was 4.4%, it’s 8.6% for blacks – by far the highest of any racial minority.  For young blacks, the rate is far higher.  We’re all aware of the toll this has taken in the black community – especially in the inner cities where unemployment is rampant:  the hopelessness, despair, anger, drugs, crime, the destruction of family values, and so on.  Who can blame the people forced to live in these conditions if they’re angry at their plight and feel victims of racism?  I’d be mad as hell too.

There are a lot of reasons for this situation and I won’t pretend that there aren’t still some remnants of racism at play here.  But a big factor that no one is talking about is the fact that the middle rungs of the economic ladder, the rungs that people need to climb out of poverty, have been cut away and used by proponents of globalization to improve the economic plight of the people of other nations.  I’m talking about the millions and millions of well-paying manufacturing jobs that have been shipped overseas thanks to misguided trade policy.

One of the reasons that I voted for Barack Obama in 2008 was the fact that he was black and promised to fix our trade policy.  As a black man, I figured he’d be eager to follow through and make real, meaningful improvement in the plight of black Americans by breathing life back into the middle class sector of the economy.  Without those manufacturing jobs, even whites are struggling.  What chance does a black man have?

Instead, Obama quickly fell in line with the free trade globalists and has only made matters worse with his trade deal with South Korea and the Trans Pacific Partnership deal he’s now pushing so hard.  He had a huge opportunity to help black America.  Instead, his eight years have been wasted.

Making matters worse, black Americans are even pushed off of the lowest rungs of the economic ladder by a tidal wave of illegal immigrants.  Why pay black Americans a minimum wage and benefits when you can pay an illegal immigrant who’s eager to do the job for even less?  The president seems far more concerned with the plight of illegal immigrants than that of his fellow black Americans.

Over the past few decades, virtually every public policy has been scrutinized for its effect on racial minorities, and those found to impact minorities in a negative way have been deemed discriminatory and have been banned.  Where is the same scrutiny of our trade policy and immigration policy?  These have clearly hurt blacks more than whites.  One could make the case that if there is any racism that still persists in the U.S., it’s racist trade policy that forces blacks in disproportionate numbers to bear the economic brunt of the loss of manufacturing jobs, and racist immigration policy that gives a break to illegal immigrants in spite of the harm to the black community.

Trade and immigration policy have divided this nation into two classes of “haves” and “have-nots,” the very income inequality that has gotten so much attention, but which also grows worse with each passing day.  While great strides have been made in eliminating racism, the “poverty-ism” that this divide has fostered is getting worse.  The group of people charged with maintaining order in this divide – the police – are not immune to poverty-ism.  They know all too well the risks they face when they try to maintain order in poverty-stricken inner city areas.  I won’t deny that some police are probably racist and some of the killings we’ve seen have been racially motivated, but I suspect the majority are more a matter of the police fearing for their own lives and, consequently, erring on the side of caution for their own safety.

The main thrust of my theory, my book and this blog has been to emphasize that poverty will grow worse along with worsening overpopulation and as trade with overpopulated nations persists.  Economists and government leaders can try to mask this with statistical gimmicks that make things look better than they are, but they can’t hide the effects.  The result is an electorate that grows ever more dissatisfied with the direction of our country and with our political leaders, and worsening anger and lawlessness in the hardest-hit areas of our inner cities.

Instead of addressing these root causes, we get more “programs” to try to paper over the problems.  Just this week Hillary Clinton proposed more federal money to provide for better training for police.  This is a perfect example.  Trade away our jobs, sell bonds to draw the dollars back to the U.S., and then put that deficit spending to work in more “programs” – more welfare, more government-subsidized health care, more job training programs, more federal aid for schools, more federal aid for police and fire departments – “better training for police.”

Until we stop trying to portray this problem as a racial divide instead of the poverty-fueled class divide that it really is, no amount of talk, hand-holding and hugging are going to make a bit of difference.

 

 

 

 


Ugly Reality Hiding in the June Employment Report

July 8, 2016

Stock market analysts were absolutely giddy over this morning’s release of the June Employment Report and its headline number of 287,000 jobs added to the economy.  That’s a big number, to be sure, and, in the wake of May’s dismal jobs report, was hailed as proof that the labor market is still in fine shape, and that maybe the May report was just a statistical blip.

Given less notice was the fact that unemployment jumped two tenths to 4.9%.  Those same analysts shrugged it off as the result of more people re-entering the work force.  Yeah, that was part of it but what no one seemed to notice or report were a couple of really ugly pieces of data in the report.

The ugliest was the household survey’s “employment level.”  Month-to-month changes in this parameter are the household survey’s equivalent of the headline number of jobs created as measured by the establishment survey.  Employment level rose in June by only 67,000, far less than the number needed to keep pace with population growth.  In fact, the employment level has risen by only 23,000 since February, while the population has grown by over 800,000.

Thanks to the stagnant employment level, per capita employment edged down slightly for the third month in a row – the first time that’s happened in 3-1/2 years.  If it edges down again in July, it’ll be the first time it’s declined four months in a row since the Great Recession in 2009.

The other ugly piece of data is the fact that, as bad as the May employment report was, it got worse in June when it was revised downward from a gain of only 37,000 jobs to only 11,000 jobs.

Instead of providing proof of a labor market that’s still in decent shape, the June employment report instead – if one looks deep enough – paints a picture of a labor market teetering on recession.  Market analysts may have been fooled by the gaudy headline number but I’m not, and you shouldn’t be either.