Trump’s Failure on Trade, The Issue His Working-Class Voters Largely Elected Him With

One way to increase the American economy’s demand — or the power to buy things in the economy, which is something that most workers (their wages largely stagnant) could have used much more of in the last 40 years — is through lowering the trade deficit. A trade deficit is currently reducing demand because that gap in American spending is creating jobs and demand in a foreign country such as China instead of the U.S.

Lowering the trade deficit to 1 percent of GDP from 3 percent of GDP would grant about the same increase to demand as a $400 billion stimulus package would.

Trump told his working-class voters that he’d improve trade inequities and therefore help them by reducing the trade deficit, which of course like many of his declarations turns out to have been a sham.

The latest data from the Commerce Department shows that the trade deficit rose again in 2018. The full–year trade deficit was $621.0 billion (3.0 percent of GDP), up from $552.3 billion in 2017, and from $502.0 billion in 2016, the last year of the Obama presidency. If we pull out oil and other petroleum products, the trade deficit looks even worse, increasing by more than $77 billion from 2017 to 2018.

The picture doesn’t look any better if we look at the specific countries that Trump has vilified. The trade deficit in goods with Mexico has increased by $17.6 billion or 27.5 percent since Obama left the White House in 2016. The deficit with Canada, Trump’s “enemy“ to the north, has increased by $8.8 billion, an increase of 80.0 percent. The trade deficit in goods with China has risen by $72.2 billion since 2016, an increase of 20.8 percent.

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The new China agreement does almost nothing about currency values, the most important determinant of the trade balance. After running around the country for two years complaining about China’s currency “manipulation,” there are no provisions in his new pact that would force China to raise the value of its currency against the dollar.

The sharp rise in the trade deficit in the last decade had a devastating impact on manufacturing workers and whole communities in large parts of the Northeast and the Midwest. We can’t hope to reverse this damage, as those jobs will not come back.

However, we could design a trade policy that would move us toward more balanced trade and create millions of relatively good-paying manufacturing jobs. Unfortunately, Trump’s policy seems to be going in the opposite direction.

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Noam Chomsky Interview on Media and Climate Change

A good interview:

 I don’t know if you ever read the introduction to Animal Farm — probably not, because it was suppressed — but it came out after it was discovered in his papers about 30 years later, and it’s kind of an interesting introduction. The book is addressed to the people of England and he says this book is, of course, a satire about the totalitarian enemy, but he says we shouldn’t feel too self-righteous about it because — I’m quoting now — in free England, ideas can be be suppressed without the use of force.

Orwell gives some examples, and about two sentences of explanation. One is that the press is owned by wealthy men who have every interest in not wanting certain ideas to be expressed, but the other is just essentially a good education. You go on to the best schools, graduate from Oxford and Cambridge, and you just have instilled into you the understanding that there are certain things it wouldn’t do to say — and you don’t even think about it any more. It just becomes what Gramsci called “hegemonic common sense,” you just don’t talk about it. And that’s a big factor, how these things simply become internalized. People who bring them up sound like crazies.

What would be the alternative for journalism? How should it operate differently in addressing climate change?

Every single journal should have a shrieking headline every day saying we are heading to total catastrophe. In a couple of generations, organized human society may not survive. That has to be drilled into people’s heads constantly. After all, there’s been nothing like this in all of human history. The current generation has to make a decision as to whether organized human society will survive another couple of generations, and it has to be done quickly, there’s not a lot of time. So, there’s no time for dillydallying and beating around the bush.

But isn’t there a risk of disempowering people by just giving them bad news?

There is. Bad news should be combined with discussion of the things that can be and are being done. For example, a very good economist, Dean Baker, had a column a couple of weeks ago in which he discussed what China is doing. They are still a big huge polluter, but they are carrying out massive programs of switching to renewable energies way beyond anything else in the world. States are doing it.

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Do you think that in the U.S. or other notionally democratic societies, is it possible to reform the media system in some ways that would better facilitate this kind of survival journalism?

One way would be for them to become democratic societies. They’re very far from it. Take elections — there’s very convincing work in mainstream political science which shows that elections in the United States are basically bought. You can predict the outcome of an election for Congress or Executive with remarkable precision just by looking at the single variable of campaign spending. That’s why when somebody’s elected to the House of Representatives, the first day in office, she or he has to start gaining donor support for the next election. Meanwhile, legislation is being written by the staff with the lobbyists from the corporations, who are actually often just writing the legislation. It’s a kind of democracy, but a very limited one.

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The good side is that (social media is) the way organizing goes on. That’s the way you reach out to people, get together, and it’s a very effective tool. Practically all organizing works this way. I mean even teaching, teachers often communicate with the students through social media. That’s all anybody is doing. If you walk around campus, everybody’s (on a device). One university, I think Duke University, started putting on the pavements things that say, Look up!, because they’re all walking around looking down.

Definitely what the effects are is hard to say. You see teenage kids sitting in a McDonalds, let’s say, sitting around a table and there are two conversations going on — one in the group, and one that each person is having with whoever’s talking to them on their phone.

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What conditions need to be met to enable an effective response to climate crisis?

I think there just has to be an energetic mass popular movement, which is going to compel the media to address the crises that we’re facing by constant pressure, or else simply create alternatives which will dominate the information market. And we don’t have a lot of time to waste. So, things like subsidizing independent media which is not a utopian idea, it was done in the United States in its early days; or the kinds of grassroots media movements that, say, Bob McChesney and others are pressing to develop.

And it’s an urgent requirement. I start my classes these last couple of years by simply pointing out to the students that they have to make a choice that no one in human history has ever made. They have to decide whether organized human society is going to survive. Even when the Nazis were on the rampage, you didn’t have to face that question. Now you do.

Analysis: Sanders Raise the Wage Act Would Benefit 40 Million People

The federal minimum wage hasn’t been raised since 2009, and wages for most American workers have been largely stagnant for decades. There’s been a significant upwards redistribution of income from most workers to the wealthiest people in society, which was caused by deliberate policy.

If the minimum wage had kept pace with productivity growth (gains in worker output and technological advancement) since the early 1970s, it actually would be at about $20 an hour today. The Sanders legislation on raising the minimum wage (which would not necessarily increase unemployment, as seen by some of the highest minimum wage states having some of the lowest unemployment) would thus provide a substantial standard of living increase for many.

By increasing the federal minimum wage over the next five years, the Raise the Wage Act of 2019 would boost the incomes and improve the lives of an estimated 40 million Americans, according to an analysis out Tuesday from the Economic Policy Institute (EPI).

Introduced last month by Sen. Bernie Sanders (I-Vt.) and Rep. Bobby Scott (D-Va.), the bill would raise the federal hourly minimum wage from $7.25—which Sanders calls “a starvation wage”—to a living wage of $15 by 2024. It would also require employees to pay the new minimum to tipped workers, who currently can make as little as $2.31 an hour.

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In addition to helping millions of Americans escape poverty, the bill would also benefit the economy more broadly. “Because lower-paid workers spend much of their extra earnings,” the report outlines, “this injection of wages would help stimulate the economy and spur greater business activity and job growth.”

Instead of Only Taxing the Rich More, Change Pre-Tax Income Distribution So They Receive Less

Instead of just trying to tax the rich more, it would be better to prevent the distribution of income from being so unjust to begin with. Markets have been rigged in numerous ways to redistribute income upward to the wealthiest members of society.

Given the enormous increase in inequality over the last four decades, and the reduction in the progressivity of the tax code, it is reasonable to put forward plans to make the system more progressive. But, the bigger source of the rise in inequality has been a growth in the inequality of before-tax income, not the reduction in high–end tax rates. This suggests that it may be best to look at the factors that have led to the rise in inequality in market incomes, rather than just using progressive taxes to take back some of the gains of the very rich.

There have been many changes in rules and institutional structures that have allowed the rich to get so much richer. (This is the topic of the free book Rigged.) Just to take the most obvious — government-granted patent and copyright monopolies have been made longer and stronger over the last four decades. Many items that were not even patentable 40 years ago, such as life forms and business methods, now bring in tens or hundreds of billions of dollars to their owners.

If the importance of these monopolies for inequality is not clear, ask yourself how rich Bill Gates would be if there were no patents or copyrights on Microsoft software. (Anyone could copy Windows into a computer and not pay him a penny.) Many other billionaires get their fortune from copyrights in software and entertainment or patents in pharmaceuticals, medical equipment and other areas.

The government also has rules for corporate governance that allow CEOs to rip off the companies for which they work. CEO pay typically runs close to $20 million a year, even as returns to shareholders lag. It would be hard to argue that today’s CEOs, who get 200 to 300 times the pay of ordinary workers, are doing a better job for their companies than CEOs in the 1960s and 1970s who only got 20 to 30 times the pay of ordinary workers.

Another source of inequality is the financial sector. The government has aided these fortunes in many ways, most obviously with the bailout of the big banks a decade ago. It also has deliberately structured the industry in ways that facilitate massive fortunes in financial engineering.

There is no reason to design an economy in such a way as to ensure that most of the gains from growth flow upward. Unfortunately, that has largely been the direction of policy over the last four decades.

2018 Midterm Elections in the United States

The 2018 midterms will have significant impacts on not only America but the world — see the Republicans being a more authoritarian example for other countries and being worse on issues such as climate change.

Usually the elections for federal and state offices that take place between the US presidential elections get considerably less attention than those taking place in the same year as the presidential race. This is not likely to be true in 2018.

As is always the case, the entire House of Representatives will be up for reelection. There will be elections for a third of the Senate (actually 35 of 100 senators because of a resignation) and state governors races in 36 of the 50 states, including nine of the ten largest. In addition, most state legislatures will be up for grabs in the election as well.

The main reason this election is so important is that Donald Trump has demonstrated an unprecedented level of disrespect for basic norms of democracy and the rule of law. Republicans in Congress, with almost no exceptions, have been willing to go along in his abuses of power. If the Republicans manage to maintain control of both houses of Congress, there will be little ability to block Trump’s attack on the basic institutions of democracy.

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Trump and the Republican party are also looking for ways to disenfranchise voters to maintain their grip on power. It is important to recognize that the Republicans depend on being able to rule as a minority.

In 2016 Trump lost the nationwide popular vote by almost 3 million votes, or 2.1 percentage points. He nonetheless won the election because the presidential race is decided by the Electoral College in which most states the winner takes all. While electoral votes are partially proportionate to population (each state gets at least three votes regardless of its size), Trump won several large states by tiny margins, allowing him to get a majority in the Electoral College.

There is a similar story in the US Senate. Each state has two senators, which means that Wyoming, with less than 600,000 people, has the same number of senators as California with almost 40 million. With Republicans winning most of the small states’ senators, they are able to have a majority of the Senate even when they get much less than half of the vote for senators.

The House of Representatives awards seats to states based on the population. But because the Republicans controlled the last redistricting processes following the 2010 Census, they drew districts in a way that will require the Democrats to win the overall vote by 6 to 8 percentage points to retake the House. With a new Census in 2020, the governors who are elected this year will preside over the redistricting that takes place in 2021. This will be an opportunity for either party to lock in favorable districts for a decade.

There is also a basic issue of whether people are able to vote. Republicans have pursued a variety of measures intended to make it difficult for minorities to vote. In prior years, courts have overruled many of these measures since the right to vote is a fundamental right guaranteed by the constitution. In more recent years, Republican-appointed judges have approved many blatant acts of disenfranchisement. If they can maintain control of both houses of Congress, Republicans at both the federal and state level are likely to move more aggressively in implementing obstacles to minority voting.

For these reasons, there any many basic issues about democracy that will be at stake with the outcome of the 2018 election. While the US government has a long-standing democratic tradition and respect for the rule of law, these are very much up for grabs this year. We have a president and a major political party that care about neither.

Terrible — U.S. Asbestos Imports are Doubling in 2018

Asbestos is incredibly harmful to human health, and it’s extremely regressive that the U.S. not only hasn’t banned it, but is now increasing imports of it.

As President Donald Trump’s industry-friendly Environmental Protection Agency (EPA) takes steps to loosen restrictions on the commercial use of asbestos—which is known to cause cancer and lung disease—an analysis of federal data published Tuesday found that asbestos imports to the U.S. surged by nearly 2,000 percent between July and August of this year.

Conducted by the Asbestos Disease Awareness Organization (ADAO) and Environmental Working Group (EWG), the analysis found that “the U.S. imported more than 341 metric tons of asbestos” last year, with imports expected to double in 2018 thanks to the Trump administration’s aggressive and deeply harmful deregulatory agenda.

“It is appalling that unlike more than 60 nations around the world, the U.S. not only fails to ban asbestos, but allows imports to increase,” Linda Reinstein, president and co-founder of ADAO, said in a statement. “Americans cannot identify or manage the risks of asbestos. The time is now for the EPA to say no to the asbestos industry and finally ban asbestos without exemptions.”

“When most people learn that asbestos remains legal even after it’s claimed the lives of countless Americans, they’re shocked,” added EWG president Ken Cook. “And when the public finds out the Trump administration is actively working to keep it legal, they are furious.”

Is Brazil About to Become a Brutal Militaristic Regime?

Brazil may soon become a brutal regime reminiscent of its past atrocities, and the far-right will probably impose crippling austerity (it wants to freeze real government spending for decades, which will worsen public health and make recessions much worse) that will do significant harm to the working class.

For the past thirty years, Congressman Jair Bolsonaro was a fringe extremist in Brazilian politics, known mostly for outlandish, deliberately inflammatory quotes in which he paid homage to the most notorious torturers of the 1964-1985 military regime, constantly heralded the 1964 coup as a “defense of democracy,” told a female socialist colleague in Congress that she was too ugly to “deserve” his rape, announced that he’d rather learn that his son died in a car accident than was gay, and said he conceived a daughter after having four sons only due to a “moment of weakness.”

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His primary solution to the nation’s crime epidemic is to unleash the military and police into the nation’s slums and give them what he calls “carte blanche” to indiscriminately murder anyone they suspect to be criminals, acknowledging many innocents will die in the process. He has criticized monsters such as Chile’s Pinochet and Peru’s Fujimori – for not slaughtering more domestic opponents. He has advocated that mainstream Brazilian politicians be killed. He wants to chemically castrate sex offenders. In all respects, the hideous Brazilian military dictatorship that took over Brazil and ruled it for 21 years – torturing and summarily executing dissidents, with the support of the US and UK in the name of fighting Communists – is his model of governance.

As a result of last night’s truly stunning national election in Brazil, Jair Bolsonaro has been instantly transformed from marginalized clown into the overwhelmingly dominant force in the country’s political life. Bolsonaro himself fell just short of winning the 50% needed to win the presidency without a run-off.

But given the margin of victory, he is the overwhelming favorite to win on October 28 against the second-place candidate, ex-São Paulo Mayor Fernando Haddad. Haddad is the previously unknown, hand-picked successor anointed by Lula, the ex-two-term President who had been leading all polls until he was convicted on dubious corruption charges and quickly imprisoned so as to bar his candidacy, then silenced by Brazil’s right-wing judiciary with a series of remarkable prior restraint censorship orders barring all media outlets from interviewing him.

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In sum, it is virtually impossible to overstate the threat level posed to democracy and human rights in the world’s fifth most-populous country as a result of last night’s election. And unlike in the U.S. or in the UK, which have old, strong, long-established democratic institutions that can limit the excesses and worst abuses of demagogues and authoritarians, Brazil has none of that. Spiraling from multiple crises – suffocating economic inequality, an epidemic of violence worse than many war zones, and a corruption scandal so sweeping that it has infected the core of almost every faction of the ruling class – this is a country with little to no ability to impose limits on what Bolsonaro wants to do.

Add to that the sheer youth of Brazilian democracy – only 33 years old: the temporal equivalent of the U.S. in 1820 or so – and it’s remarkably easy to envision a quick return to the military rule that imposed so many atrocities on so many segments of the population. That all of this has been ushered in democratically should be, but likely will not be, another warning sign to western democracies that are confronting similar dynamics, albeit ones that are unfolding somewhat more gradually.

To be sure – as is true of Trump, Brexit, and the rise of right-wing extremism throughout Europe – some substantial minority of Bolsonaro voters are motivated by classic bigotry, racism, anti-LGBT animus, resentment toward the indigenous population, and just a general tribal anger that seeks scapegoats for their plight. But many, probably most, are none of those things.

Many, instead, are motivated by legitimate grievances toward an establishment ruling class that has failed them on all levels, that expresses indifference if not outright contempt for their suffering and loss of hope, that they blame, often with good reason, for enacting policies that have destroyed their futures while refusing to accept any responsibility for it. And once that framework is adopted, any perceived enemy of that ruling class becomes their friend, or at least someone whose vows of destruction become more appealing than vows to preserve the system they justifiably despise (the reality is that Bolsonaro (like Trump), with his Chicago-trained neoliberal economic guru, will serve the economic interests of the establishment with great devotion at the expense of his working-class voters, but the perception of his anti-establishment animus is what matters).

The standard establishment reaction in the face of rising demagogues like Bolsonaro is to denounce those who support them, to call them names, to heap scorn on them, to sanctimoniously lecture them that their choices are primitive, retrograde, ignorant and illegitimate. That only serves further to exacerbate the dynamic.

Some context for the 21st century:

The world is watching Brazil’s elections, probably as never before. “Latin America’s latest menace: Bolsonaro Presidente,” screams the headline on the cover of The Economist. This conservative UK magazine would love to see the Workers’ Party (PT) disappear from Brazilian politics, but even they cannot stomach Bolsonaro, who in 2016 dedicated his vote to impeach President Dilma Rousseff to the colonel responsible for her torture.

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By 2014, under the presidencies of Lula and Dilma, poverty had been reduced by 55 percent and extreme poverty by 65 percent, and unemployment hit a record low of 4.9 percent. Some of these gains were lost when the economy then went into a deep recession that year, and the right took advantage of that downturn to seize what it could not win at the ballot box in four consecutive elections.

They impeached Dilma and removed her from office without even accusing her of an actual crime; and then Judge Moro sent Lula to prison for a “bribe” he never accepted, in a “trial” without material evidence. The US government sent experts from its Justice Department to “help” with investigations, and quietly showed support for the removal of Dilma.

But the bulk of the Brazilian electorate could see that although all the major political parties were infected with corruption, the decapitation of the Workers’ Party was not about justice. Lula retained a commanding lead in the polls even after his conviction. And so it became necessary to bar Lula from running for president, to jail him, and restrict his access to the media.

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For the first time in decades, the threat of a military dictatorship is surfacing. No responsible journalism should ignore this threat, nor legitimize the extremism that strengthens it. And anyone who cares about democracy in Brazil would have to support Bolsonaro’s opponent in the second round of the election.