A Perfect Example of What Killed American Democracy

January 13, 2021

No sooner did I publish yesterday’s post, in which I blamed the Supreme Court’s “Citizens United” decision in 2010 for the death of American democracy, when a perfect example of that emerged.

Before I get into that, I have a question for you. What do you know about the U.S. Chamber of Commerce and your own local chapter? Is it a branch of the U.S. Commerce Department? Is its purpose to promote commerce in America? The name of the organization would lead you to believe that the answer to both of the latter questions is “yes.”

You’d be dead wrong. The Chamber of Commerce is a French-based organization whose sole mission is the promotion of “free” trade. (Check out this post from 2009 for an explanation of this fatally flawed economic theory and how it has devastated America’s economy.) The U.S. Chamber of Commerce is that French organization’s American-based operation. Your local Chamber of Commerce reports to and funnels funds to the U.S. Chamber of Commerce. Here, it’s worth noting that in 2019, France – a nation whose workers enjoy benefits American workers can only dream of – enjoyed a trade surplus with the U.S. of $19.9 billion, despite being arguably the least productive nation on earth.

The U.S. Chamber of Commerce and its local chapters makes a show of lobbying in favor of American businesses when issues important to them arise like taxes, regulations, minimum wage, etc. However, the effect of all of those issues combined is trivial compared to the one trillion dollars per year of business that is robbed from them through the world’s trade surplus with the U.S. On that issue, I challenge anyone to show me one single instance in which the Chamber has spoken out against the trade deficit and in favor of changes to trade policy aimed at restoring a balance of trade. No Chamber of Commerce organization, not the U.S. Chamber of Commerce or any one of its thousands of local chapters, has ever uttered a peep of protest about the U.S. trade deficit. The Chamber of Commerce masquerades as a pro-business lobby, all the while concealing the fact that it is working against American business on the one issue that dwarfs all others.

Thanks to the “Citizens United” decision by the Supreme Court, this French-based lobbying organization is considered to be an American “person” under the constitution. Its money – all the money collected in the form of membership fees from hundreds of thousands of American businesses that it strong-arms into joining its local chapters – is considered “free speech” which cannot be constrained under the 2nd amendment.

With all of that said, check out this article which appeared on Reuters yesterday. The CEO of the U.S. Chamber of Commerce accuses Trump of undermining U.S. democracy. Scroll to the bottom of the article, and read this:

“… in a nod to Biden’s progressive agenda, he said lawmakers should fund “rapid training programs” to connect the unemployed with jobs in new sectors of the economy.

Donohue also said the Chamber will push for a new bill to boost legal immigration to help businesses deal with a shortage of workers.”

Pushing “training programs” is a classic pro-free trade gimmick used for decades to placate workers who have lost their jobs to off-shoring. And, incredibly, even in the midst of a pandemic when sixteen million Americans are unemployed, the Chamber has the audacity to suggest that we need to continue flooding the U.S. with immigrants “to help businesses deal with a shortage of workers.”

Earlier in the article, the Chamber CEO vows to cut off funding from Republicans who supported Trump. Is it Trump’s rhetoric that concerns him, or is it really the fact that Republicans began supporting Trump’s efforts at levying tariffs in an effort to fix our trade deficit?

This is a perfect example of the demise of our democracy. Our politicians are bought-and-paid-for by global corporations and foreign lobbying organizations. Your only choice is between two candidates who, on the most critical issues, take the exact same position – the position they’re paid to take. This isn’t democracy.


Is the United States the stupidest nation on earth?

January 9, 2021

In light of the trade data released by the Commerce Department on Thursday, it’s difficult to draw any other conclusion. In November the trade deficit worsened to a new record of $64.5 billion. Actually, the situation is much worse than that. Strip away the surplus in services, which are little more than paperwork transactions, and you’re left with trade in manufactured goods, where real jobs are won and lost. Look at this chart. I would say that it couldn’t get any worse if it weren’t for the fact that with each passing month, it does. The deficit in manufactured goods hovered at the record level of $82.5 billion set only two months ago. That’s an annualized deficit of one trillion dollars.

Think about this. We’re paying the rest of the world a trillion dollars per year, putting their citizens to work making all the things we could just as easily make ourselves while, at the same time, we have tens of millions of people out of work. In fact, we’re paying trillions of dollars per year to pay our own people not to work. And we keep doing everything we can – as fast as we can – to make the situation worse. Ten years ago, in the wake of our most recent economic disaster, part of the auto industry bail-out was to allow Fiat to scoop up the Chrysler corporation, giving yet another foreign brand (the worst on earth, in terms of quality) an entry into the U.S. market, making the challenge for American cars that much worse. Building on that mistake, last month, FCA (Fiat-Chrysler of America) joined forces with PSA (the French automaker Peugot) forming a new company called “Stellantis,” giving Peugot access to the American market and, in all likelihood, finally killing the Chrysler brand.

Now we’ve elected as president a man who has spent his entire adult life championing policies that have exacerbated this decades-long downward spiral of our trade picture and, consequently, our entire economy. What little progress has been made under Trump he has vowed to rapidly undo.

If this situation doesn’t make the United States the stupidest nation on earth, I don’t know what would. And we wonder why this nation has become so divided and how there could be those among us so angry and frustrated that they’d be willing to riot and attack the capitol building. Trump was accused of lying to the American people about the election being stolen. I’ve consistently voted for candidates over these many years who have promised to do something about our trade deficit, and every one of them lied to us. Trump is accused of having blood on his hands for his role in fomenting the capitol building riot. For his part, Biden should accept blame for his role in formulating policies over the decades that have stoked the anger we saw unleashed on Thursday.

I remain angry and deeply disappointed with Trump for allowing his style and ego to get in the way of the bigger mission of Making America Great Again. The American people can forgive gaffes and rookie mistakes (being a rookie to the political scene), but they just couldn’t take any more of the daily barrage of personal insults that had nothing to do with the mission he was elected to do. It’s just sad to see it end this way.

It’s hard to see any hope of things improving for the United States. It angers me and makes me sick to say that. Since writing Five Short Blasts years ago, I’ve tried to keep this forum apolitical and focus instead on trying to explain the unseen economic consequences of population growth, including the danger of trying to engage in free trade with badly overpopulated nations. Maybe that’s been a mistake. So I’ll now say this: for decades Americans have been getting economically slaughtered like a flock of chickens. It’s hard to see any hope of things improving when you elect the fox to run the henhouse.


The Driving Force Behind America’s Drift Toward Socialism

December 10, 2020

One clear message that emerged from the election as the Democratic Party suffered significant losses in the House – and even Democrats agree with the conclusion – is that Americans overwhelmingly loathe the notion of socialism taking root here. Though the number of true socialists amongst the Democrats is small, Republicans’ constant labeling of the whole party as such was effective. Americans want nothing to do with socialism.

However, there has been a slow drift toward socialism over the decades as one social safety net program after another has been added. The Covid-19 pandemic has dramatically accelerated the trend with stimulus checks provided to all, unemployment bonus checks that make it signifcantly more lucrative to remain unemployed, eviction moratoriums and others. Socialists are now emboldened to demand more, things like universal minimum incomes provided by government, universal healthcare, college debt forgiveness and free college tuition among many other things.

Ask anyone about the cause of the drift toward socialism and most will blame the Democratic Party, home to a few hard-core socialists like “The Squad” in the House and many more progressives and liberals who don’t quite merit the socialist label. However, most people would be shocked to learn that Republicans and conservatives in general are just as culpable for the drift toward socialism, for both parties alike have fostered a policy that increasingly makes Americans dependent on the government nanny-state. I’m talking about the “free trade” policy that both parties have happily and eagerly embraced to the delight of their corporate benefactors.

America’s embrace of free trade, which began in the wake of World War II, has transformed us from the world’s richest economy and preeminent industrial power into the world’s skid row bum. How? Here’s how it works. Every dollar spent on an imported product is a dollar taken out of the economy. If not offset by a dollar spent on an American-made product by someone in a foreign country, then it’s a dollar lost from our economy forever, leaving us a dollar poorer and with one dollar’s worth of a manufacturing job gone.

The only way to make the economy whole again is for the government to put a dollar back into the economy. The only way it can do that is by selling a bond. To whom? To that foreign country where you spent that dollar on one of their goods. How does the dollar get put back into the economy? Through a government program: funding unemployment, welfare, health care for those who can’t afford it, etc. In essence, every dollar’s worth of our trade deficit is an investment by an American consumer in socialism.

Every dollar of our trade deficit further divides our society into the “have” and “have-not” classes as the erosion of the manufacturing sector of our economy worsens, driving people who once earned high wages and benefits into the unemployment line, where they have no hope of returning to the quality of life they once enjoyed. It’s only natural that this “have not” class of society would turn to socialism to make them whole again.

It doesn’t seem like a big deal until you understand the enormity of the problem. Last week, the Commerce Department released the trade data for the month of October. Our trade deficit for just that month was $63 billion. But that’s not the worst of it. That figure includes a surplus in “services,” much of which is nothing more than paperwork transactions. The real concern is goods – manufactured goods, to be precise – since that’s where the jobs are and that’s where a deficit does real damage to the economy. The deficit in manufactured goods in October was $81.3 billion, just shy of the record set only two months earlier. Annualized, that’s a deficit of $976 billion. And it’s rapidly getting worse. Here’s a chart of the data: https://petemurphy.files.wordpress.com/2020/12/manfd-goods-balance-of-trade.pdf.

Think about that. Almost a trillion dollars per year must be injected back into the economy by the government in the form of socialist programs. The United States has been running an ever-growing trade deficit for forty-four consecutive years, since our last trade surplus in 1976.

If America wants to avoid becoming a socialist country, it’s imperative that Americans wake up to the fact that it’s our enormous trade deficit that’s pushing us fast and hard in that direction. As long as the U.S. pursues “free trade,” the worse matters will get. History has shown that only the use of tariffs can assure that a balance of trade is maintained.


China Falls Short of “Phase 1” Goals Again in October

December 8, 2020

China signed the “Phase 1” trade deal with the U.S. in January, in return for the U.S. postponing a second round of tariffs on the remaining half of all Chinese exports to the U.S. China committed to meeting specific targets for imports of four classes of American goods for 2020 and 2021: manufactured goods, energy goods, agricultural goods and total goods.

The data for October was released on Friday and, once again, China has fallen far short of meeting its commitments. With only two months left in 2020, China is behind its commitment for manufactured goods by 30%. It’s behind in energy products by 64%. It’s behind in agriculture goods by 41%, and is behind in total goods by 35%. Here’s the year-to-date data: https://petemurphy.files.wordpress.com/2020/12/phase-1-china-trade-deal-2020-ytd.pdf.

Though China once again fell far short of its goal, it’s worth noting that they did increase their imports slightly. Most notably, for the 2nd month in a row, they exceeded the monthly goal for agriculture imports, making up a little lost ground toward meeting its 2020 commitment for that category of goods. Ten months into 2020, they are now 2 for 40 in terms of meeting its commitments (10 months times 4 categories of goods).

It’s also worth noting that China’s imports of American goods in October set a record of $14.7 billion, beating the old record of $13.6 billion set in December of 2017. However, that’s little cause for celebration because the goods trade deficit with China actually worsened to $30.1 billion, thanks to the 7th consecutive monthly increase in imports from China, which rose to $44.8 billion. The net result of the “Phase 1” deal is that our trade deficit with China has actually worsened in 2020.

Trump made the same mistake with the “Phase 1” deal that Obama made when he vowed to double U.S. exports to reduce our trade deficit. He focused on exports while ignoring imports. It’s impossible for the U.S. to export its way out of a trade deficit with a badly overpopulated nation with a bloated labor force that is dependent on manufacturing for export. When Trump’s focus was on the use of tariffs to reduce imports from China, we made significant progress in cutting our deficit. When he took additional tariffs off the table with the signing of the “Phase 1” deal, that progress was reversed.

It’s time to kill this dumb deal and levy more tariffs on China. If Trump won’t do it in his waning days, then Biden has an opportunity to show that he stands with American manufacturing and American workers. But he won’t.


Time has come to terminate “Phase 1” China trade deal and move forward with tariffs

November 14, 2020

At the time that he signed the “Phase 1” deal with China in January, I said that Trump was making a huge mistake.

Let’s back up to Trump’s inauguration three years earlier. Trump was elected to “Make America Great Again” and a huge part of that program was to bring down America’s trade deficit and bring our manufacturing jobs back home again. In his auguration speech, Trump noted the abandoned, decaying factories scattered like tombstones across the American landscape and said “it all stops right here and right now!”

To that end, Trump got off to a slow start. Proud of his deal-making ability that he demonstrated in the business world, he took the same approach toward trade. He spent two years negotiating a replacement for the North American Free Trade Agreement. The USMCA (United States, Mexico, Canada Agreement) that has replaced it only went into effect this past July. Though analysts predict it will be a net win for the United States, boosting manufacturing, the trade deficit with Mexico has tripled in the meantime and we’ve yet to see any change in business dealings with that country.

At the same time, China launched a charm offensive with Trump and it worked. Trump fell for their promises to boost imports from the U.S. When he realized he’d been snookered, Trump finally did what he should have done in the first place, slapping tariffs on some Chinese goods. He later boosted those tariffs to 25% and levied them against half of all Chinese products. Then, to get China to make a trade agreement with the U.S., the “Phase 1” deal, he threatened to levy the same tariffs against the remainder of all Chinese products.

Predictably, China agreed to make significant progress toward buying more American goods and, to his credit (and unlike deals made by previous administrations), he included specific goals and deadlines. However, just as predictably, China has made no effort whatsoever to comply. They’d already gotten what they wanted. No more tariffs, and they counted on Trump being no different than any president who preceded him – there’d be no follow-through or enforcement. So far, they were right.

Making America Great Again came to a screeching halt – at least the trade reform portion of it which, of course, is the biggest and most important part. It was a huge mistake. I warned at the time that Trump was risking vital support by stalling his agenda.

Trade results for the month of September were released by the Commerce Department on November 4th. Nine months into the year, China has come up way short once again. Here’s the data: https://petemurphy.files.wordpress.com/2020/11/phase-1-china-trade-deal-2020-ytd.pdf. China’s purchase of manufactured goods is up slightly, but still less than the 2017 baseline and 30% short of the goal for 2020. Their purchases of energy products are 65% short of the goal. Their purchases of agricultural products is 52% below the goal, and their purchase of total goods is 38% short of the 2020 goal.

The deal’s goals were divided into four categories of goods. Nine months have passed. That’s 36 opportunities that China has had to demonstrate a good faith effort to meet the goals. Their score? Nine months into the deal, they are 0 for 36. They are only 8 for 36 in terms of meeting the 2017 baseline. No coach of any team would keep his/her job with that kind of record. It’s time to fire this deal.

Trusting China to meet their commitments was a big mistake that stalled Trump’s trade agenda and likely cost him the badly needed votes in the election. However, it’s not too late. Trump could put the trade agenda back on track toward making America great once again by declaring China’s performance a failure, terminating the deal and imposing the tariffs that should have gone into effect a year ago. Leave the deal in place and Biden will pretend that it doesn’t even exist. Terminate the deal and Biden will face a dilemma: cave in to China and drop the tariffs and prove to all American workers that he cares nothing about their plight, or leave the tariffs in place, scoring a big win for Trump’s legacy.

This is a last chance for Trump to demonstrate his determination to “Make America Great Again.”


Time to Leave the World Trade Organization

September 16, 2020

https://www.reuters.com/article/us-usa-trade-china-wto/wto-finds-washington-broke-trade-rules-by-putting-tariffs-on-china-ruling-angers-u-s-idUSKBN2662FG

As reported in the above-linked article, the World Trade Organization has announced its finding that the U.S. broke its rules when it imposed tariffs on Chinese imports two years ago.

The timing of this announcement is curious.  Of course the U.S. broke the rules.  Everyone knew it at the time.  Trump didn’t care.  It was the only way to make any progress on halting the explosion in the trade deficit with China.  So why wait until now?  Is it because Trump faces re-election in less than two months, running against a candidate who played a big role in the advancement of the globalism that the WTO enforces?

The WTO is the enforcer of the ill-conceived trade scheme hatched in the wake of World War II to bring the world together by employing the unproven concept of “free” trade.  Decades later, the results are in and “free” trade is now a proven failure.  Instead of lifting all economies of the world and bringing the world together through an inter-dependency, the WTO has destabilized the world by establishing a host-parasite relationship between reasonably-populated nations, like the U.S., and the others – like China, so badly overpopulated that they are totally dependent on manufacturing for export and feeding off of America’s market.  The WTO is directly responsible for building up a totalitarian communist regime bent on dominating the rest of the world.

It’s time to put an end to this.  Trump can do it by simply withdrawing from the WTO, a move that would quickly lead to its collapse.  Let’s return to truly free trade, where every nation is free to set its own rules in its own best self-interest.


Trump’s Efforts on Trade a Spectacular Failure

September 9, 2020

I can’t tell you how disheartening it was to sift through the latest trade data, for the month of July, released by the Commerce Department late last week.  There’s just no getting around the fact that the administration’s efforts to cut the trade deficit and bring manufacturing back to the U.S. have failed.  “Failure” would be the word to describe results that haven’t shown any improvement.  But America’s trade picture has deteriorated so badly that the scope of the failure can only be described as “spectacular.”

In his inauguration address, Trump observed:

…  rusted-out factories scattered like tombstones across the landscape of our nation …

Earlier in the address, regarding situations like that noted above, he proclaimed:

… That all changes – starting right here, and right now …

The July trade data comes 3-1/2 years into his administration – plenty of time to implement changes and to see the effects.  It’s hard to find any silver lining.  Consider:

  1. The trade deficit in manufactured goods in July soared to $80.4 billion, a new record that completely blows away the record set under the Obama administration ($63.3 billion in March, 2015).  Check out this chart:  Manf’d Goods Balance of Trade.
  2. During the 2016 campaign, Trump vowed to quickly tear up the NAFTA deal and replace it with a much better deal.  Most of his term has been wasted negotiating the new “USMCA” trade deal that replaces it.  It finally went into effect on July 1st of this year, but the terms have been known for a long time, so you’d expect that manufacturers would have been busy implementing plans to get in compliance.  The results?  In July, the trade deficit with Mexico soared to $10. 6 billion.  When Trump took office in January, 2017 it was $3.8 billion.  Since then it has nearly tripled.
  3. When Trump took office, the deficit with China was $31.4 billion.  In July of this year it was $31.6 billion.  After Trump took office, the deficit with China continued to grow until, finally fed up with China’s promises to buy more American products, Trump imposed 25% tariffs on half of all Chinese products.  Almost immediately, the deficit with China began to shrink dramatically.  However, all momentum was lost with the signing of the “Phase 1” deal with China, when the U.S. agreed to halt plans to impose tariffs on the remainder of China’s products in exchange for Chinese promises to dramatically increase their purchases of American goods.  The results were predictable; China reneged on the deal.  They haven’t even measured up to the 2017 baseline that was used as a starting point.  Here’s the data, updated through July:  Phase 1 China Trade Deal 2020 YTD.  What has Trump done in response?  Nothing.  He continues to insist it’s a good deal, in much the same way that Obama stuck by his trade deal with South Korea while our deficit with them exploded.
  4. What progress was made in at least stagnating the deficit with China didn’t translate into any benefit to American workers.  Instead, it contributed to the tripling of the debt with Mexico and also ballooned the debt with Vietnam.  When Trump took office, the trade deficit with Vietnam, an economic back-water, was $3.3 billion per month.  In July of this year it was more than doubled to $6.8 billion per month.  Why?  Because no tariffs were applied to anyone other than China.  The tariffs motivated manufacturers to begin moving out of China, but there was no disincentive to simply move to secondary suppliers in Mexico, Vietnam and other places.

Some might say that such conclusions are unfair in the midst of the pandemic.  Not so.  The effect of the pandemic has been to cut economic activity to a depression-like level, and the effect of an economic slow-down has always been to shrink the trade deficit, not grow it.  That makes the enormous deficit in manufactured goods in July even more troubling.

Speaking of the pandemic, at least people are beginning to realize that being dependent on foreign suppliers for critical goods like ventilators and face masks is a threat to national security.  It’d be nice if that realization extended to other products that would just as easily be cut off during war time.  Better yet, wouldn’t it be nice if people realized that an economy that needs to stand on agriculture, construction, manufacturing and services is hollowed out and unstable if one of those legs is gone?

I don’t doubt Trump’s desire to truly “make America great again” by bringing back our manufacturing sector.  But he sees himself as a “deal-maker” and believes he can deal his way out of the trade deficit.  That’s where the problem lies.  For America, at least, there’s no such thing as a good trade deal.  I defy anyone to identify a single trade deal that has ever left America with anything but a growing trade deficit.

And forget about “free trade.”  That centuries-old concept is about as relevant to today’s trade environment as theories about a flat earth and how the sun rotates around it.  Today, trade is war – a war for increasingly scarce jobs in an ever more over-populated world.  Unlike America, the rest of the world understand this.  They know that what they really need is access to America’s market so that they can keep their bloated populations employed manufacturing goods for export.  Americans don’t have a clue.  They think it’s about lower price and more choice.

Had Trump simply applied tariffs everywhere where America was suffering a big trade deficit in manufactured goods, manufacturers would have come running back like refugees fleeing a war.  Instead of improving incrementally, our economy would have exploded.  Manufacturers would have eagerly snapped up any workers who lost their jobs to closures of restaurants, bars, gyms, movie theaters, etc. during the pandemic.  Trump’s re-election would be a foregone conclusion.  Instead, he’s going to be lucky to win.  Forget about the pandemic.  It’s his failure to make progress on truly making America great again that has left him vulnerable.

Don’t interpret this post as an endorsement of Biden.  It’s reported in the news today that Trump has criticized Biden as a “globalist.”  He’s not wrong.  But it’s not just Biden.  Until Trump came along, every politician, Democrat and Republican alike, were and still are globalists.  I’d vote for Biden in a heartbeat if he vowed to use tariffs to restore a balance of trade, but he won’t.  Though the results under Trump have been disappointing, things could and would be much worse under virtually anyone else, at least until more American politicians are willing to engage in the trade war that they don’t even acknowledge today.

 

 

 

 


U.S. Fails to Enforce “Phase 1” China Trade Deal

August 27, 2020

https://www.fidelity.com/news/article/top-news/202008242045RTRSNEWSCOMBINED_KBN25L023-OUSBS_1

As reported in the above-linked article, with six months of results from the “Phase 1” trade deal with China now in, the U.S. has “rolled over” for China yet again, ignoring the Chinese snub of the deal.  The picture that accompanies the article, showing the flag of Red China flying above that of the U.S., is appropriate.  Red China dominates the U.S. in trade because it dominates the U.S. in terms of its willingness to stand up for itself.

In spite of the fact that China has not made one inch of progress toward meeting the goals of the deal – in fact, it’s not even measuring up to the 2017 baseline for purchasing American goods – the U.S. Trade Representative’s office had this to say following a phone discussion with Chinese trade leaders:

“Both sides see progress and are committed to taking the steps necessary to ensure the success of the agreement,”

Red China has won again.  It’s tactic of making trade deals and then completely ignoring them, knowing that the U.S. never follows through on anything, has worked again, just as it has for decades.  The Chinese are once again rolling in the aisles with laughter.

Is Trump on board with this?  Is this a move calculated to avoid roiling the markets just ahead of the election?  Is he saving a tough response, like imposing the new tariffs that this deal delayed, until just ahead of the election, calculating that it will win him votes before anyone even takes notice of a market decline?

I don’t know, but I do know that the lack of progress in cutting the trade deficit and bringing back American manufacturing jobs is a major reason behind the decline in enthusiasm for his re-election.  Revitalizing the manufacturing sector of the economy is the key ingredient needed to “Make America Great Again” and it’s difficult to see any progress at all on that front.


Verdict is in: “Phase 1” Trade Deal with China is a total failure.

August 6, 2020

Trade data for the month of June was released by the Department of Commerce yesterday, so we now have a full six months of results of the “Phase 1” trade deal with China.  As I predicted when the deal was signed in January, the deal is a total failure.

You may have heard stories in the news, as I did, about how the Chinese were beginning to make progress on catching up to the goals established by this deal.  I had my doubts, so I was anxious to see the real data.  Here it is, year-to-date through June:  Phase 1 China Trade Deal 2020 YTD.

The deal established goals for the Chinese import of American goods in four categories, using 2017 trade results as a baseline:  manufactured goods, energy goods (like oil, gas, coal, etc.), agriculture goods, and total goods.  The goal was for them to increase their imports substantially in 2020, and then even more in 2021.  In the spreadsheet, I broke down those goals into monthly goals, ramping them up at a rate that would meet those goals by the end of the year.

Through May, the results were abysmal.  They failed to meet the goal in any category of product.  In fact, only their import of energy products even exceeded the 2017 baseline.  You’d think that if China were anxious to meet the goals in order to avoid further threatened tariffs, they’d at least make some good faith effort that they could point to as progress.  So what happened in June?  Their imports actually declined in every category.  They didn’t even meet the 2017 baseline in a single category.

A good faith effort to show progress?  The June results are exactly the opposite.  They are a slap in the face.  The Chinese are taunting the Trump administration – betting that they’ll be too distracted with other events to take action.

It’s time to put an end to this stupid trade deal and follow through with the threatened 25% across-the-board tariffs on all Chinese exports to the U.S.  Trump was elected, in large part, to make real progress in cutting America’s trade deficit and bringing manufacturing back to the U.S.  Aside from tariffs on half of Chinese exports and a new trade deal to replace NAFTA, little has been accomplished.  All momentum on the trade front was killed when Trump signed the “Phase 1” deal with China.  Three-and-a-half years have been frittered away.  His supporters are getting disillusioned by the lack of progress.  If Trump loses the election, it will be due in large part to his failure to fix our trade mess.

There’s no more time to waste.  It’s time to declare this deal a failure and impose the tariffs that were put on hold.  In addition, it’s time for Trump to get serious with other Asian nations and the European Union as well.  Slap all of them with tariffs and start making real progress in bringing our manufacturing jobs back.


Protests against “systemic racism” are off the mark.

August 3, 2020

For a web site dedicated to raising awareness of the economic consequences of population growth, this topic may seem “off the mark.”  But bear with me.

The “Black Lives Matter” movement has evolved beyond protesting the brutal tactics used by some police when dealing with the black community to include “systemic racism” in broad terms.  Exactly what “systemic racism” is can be difficult to pin down and varies depending on who you ask.  There was a time when racism was codified and blatant.  Blacks were barred from voting in many places prior to the Voting Rights Act of 1965.  Segregation was practiced openly throughout society, limiting black access to virtually everything.

But all of that has changed.  The right to vote is secured.  Discrimination is now illegal everywhere, but I won’t deny that it still exists.  There are still subtle ways in which anti-discrimination laws are skirted, and this is the “systemic racism” that is the target of protesters.  I recently heard a protestor say (or perhaps I read it on a sign at a protest – I can’t remember exactly) that “we’re not just here to change laws, but to change attitudes and eliminate all sytemic racism,” or words to that effect.

Good luck with that.  Whatever “systemic racism” still exists is because people are prejudiced, and admonishing people for it won’t change them.  It’s likely to have the opposite effect.  People only change their prejudices out of necessity.

Take World War II for example.  Perhaps nothing, at least up to that point, did more to begin the process of changing minds and integrating blacks into society than the war.  It was an “all hands on deck” event.  Every last male of fighting age was needed in the service.  Every woman was needed to man the factories.  Even school-age kids were needed to collect scrap metal, rubber and even to glean the fields for milkweed to stuff life jackets for sailors.  Winning the war was far more important than silly prejudices.  Sure, there were still some segregated units like the Tuskegee airmen, but blacks could fight as well as whites and they all bled the same color.  A lot of attitudes began to change.

In 1970, in spite of the Civil Rights Act and the Voting Rights Act, the state of Alabama was still highly segregated and the University of Alabama football team was no different.  Bear Bryant had been head coach there since 1958 and steadfastly refused to recruit black players.  Every player on the Alabama team was white.  That year, Alabama took on the University of Southern California, a team that was fully integrated with many black players, led by Sam “Bam” Cunningham, a bruising fullback who led USC to a humiliating 42-21 lopsided win over Bryant’s team.  Like any good coach, Bryant hated losing and he could see the handwriting on the wall.  Afterwards, Bryant was overheard to say, “I want some players like those.”  He could see the folly of not recruiting the best players regardless of whether they were white or black.  The following year, Alabama fielded its first black player.  By 1973, one third of the team’s roster was black.  Bryant had changed out of necessity.  He wanted to win.

The “systemic racism” that persists today and all of its effects – chronic poverty, low wages, lousy schools, drugs, gangs, high rates of incarceration and hopelessness – won’t change because of protests against it.  It will only change out of necessity.  It will only change when every single person who wants to work is needed to make the economy function.  Instead, today, what the Federal Reserve defines as “full employment” – typically somewhere in the range of 4-5 percent – still leaves millions of Americans out of work, and those unemployed are disproportionately black.  Of those who are employed, few have any upward mobility – held back by a substandard education.

There is absolutely nothing that has hit the black community harder than America’s trade policy.  I don’t believe it was intended to be racist, but the results speak otherwise.  Aside from the vestiges of the automobile industry, American manufacturing has been totally decimated, shipping millions of high-paying manufacturing jobs overseas and putting millions of people – disproportionately blacks – out of work.  (It’s worth noting that virtually all of those jobs have landed in Asia and Europe.  Africa has been left completely out of the picture.)  Imagine if that were reversed.  Imagine if manufacturers had to scour the country to find workers to staff their production lines.  It’d take every last worker left in America to satisfy the demand.  Companies wouldn’t give a damn if those workers were black or white or purple, or if they came from Mars.  All they care about is making money.  Petty prejudices would quickly fall by the wayside, just like they did in World War II and like they did at the University of Alabama.  Every black person – hell, every person, regardless of race – could find a job making good money and good benefits.  It’d quickly break the back of the cycle that has kept blacks trapped in poverty.

America’s trade policy is racist.  Protesting loosely-defined notions of “systemic racism” is off the mark.  If protesters want to make real headway in putting an end to “systemic racism,” they need to begin taking on America’s trade policy and the politicians who do the bidding of their corporate benefactors by sustaining this totally unfair system.  It doesn’t matter if those politicians are Democrats or Republicans because both parties have been complicit.  Only when a balance of trade is restored and our manufacturing jobs are brought back home will they see any meaningful improvement.