July 19, 2018

Checking In On the Economy and Trade

We're officially on Insta! Did I throw on a blazer at 5 am for all you lovely people? You bet I did!

“For the second month in a row, annual inflation fully offset workers’ average hourly wage growth.” (Wall Street Journal)

See past issues

The left is concerned that despite a booming economy, the average American is still unable to get ahead.

“How does it happen that there are major corporations in America where CEOs receive extravagant compensation packages, who pay their workers wages so low that many of them are forced to rely on food stamps, Medicaid and public housing – subsidized by taxpayers – to survive?”

The Guardian

“Even at a time of low unemployment, [workers’] bargaining power is feeble... Hostile institutions — the Trump administration, the courts, the corporate sector — are limiting their avenues for demanding higher pay.”

New York Times

Meanwhile, the International Monetary Fund

IMF) estimates that “if all currently announced tariffs go into effect... global GDP could decrease by ½ percent—or roughly US$430 billion—below the current projection for 2020.”

IMF Blog

“President Trump is inciting a trade war, undermining NATO and painting Europe as a foe. It’s no wonder, then, that the European Union is looking elsewhere for friends.”

New York Times

“The real reason to worry about an intensification of U.S. trade protection... is that it has the potential of derailing both the U.S. and the global economic recoveries.”

The Hill

“In theory, there’s no reason why a bad businessman can’t go on to become a good president. But a commander-in-chief whose signature legislative achievement expanded tax loopholes that he himself describes as grossly unfair is pretty much a bad president, by definition.”
Eric Levitz, New York Magazine

The right is generally optimistic about the economy, but worries that the US will be isolated on trade.

The right is generally optimistic about the economy, but worries that the US will be isolated on trade.

“Ever since President Donald J. Trump signed major tax reform legislation into law, the economy has been booming. Strong job growth, rising wages, and three million jobs created since Trump was sworn into office. There are now more jobs than there are job seekers.”

Townhall

While “wage growth is slower than we’d expect, and the reason is something of a mystery... This is good news, because it means that a healthy rate of wage growth is likely in the future.”

Bloomberg

Regarding the trade deal, “the latest batch of agreements demonstrate that Asia is rising to quickly fill the gaps left by current U.S. policy. For Americans, this is bad news as the U.S. will increasingly be left out of agreements and could be forced to cede power in organizations such as the WTO.”

Washington Examiner

“Mr. Trump picked fights with America’s largest economic partners because he assumes that, like him, they would focus on bilateral flows of finished goods and treat trade as a zero-sum game. That is proving wrong... The rest of the world will benefit from freer trade while American companies and consumers lose.”

Wall Street Journal

Some argue, “It stands to reason that if Kim is willing to starve his own people, deprive his economy of any growth, and pour billions of dollars into missile tech, he will, at some point, develop weapons America and its allies mastered decades ago. And short of an invasion or a diplomatic agreement, under the present circumstances, there is very little we can do to stop him… Taking a hardline approach—what many call the ‘big deal’—or only granting sanctions relief after full denuclearization and the end of Kim’s missile programs is completely impractical and something North Korea would never agree to… only a step-by-step process of disarming Pyongyang, where each side gets a benefit for making a concession, will work.”
Harry J. Kazianis, The American Conservative

Others posit that “the reason Kim is developing missiles that can strike Seattle or LA is that 28,000 U.S. troops are in South Korea… If we cannot persuade Pyongyang to give up its nuclear weapons in return for a lifting of sanctions, perhaps we should pull U.S. forces off the peninsula and let China deal with the possible acquisition of their own nuclear weapons by Japan, South Korea, and Taiwan…

“After an exhausting two weeks [between North Korea, Iran, Venezuela, and others], one is tempted to ask: How many quarrels, clashes and conflicts can even a superpower manage at one time? And is it not the time for the United States, preoccupied with so many crises, to begin asking, ‘Why is this our problem?’”
Pat Buchanan, Townhall

Counterpoint: “after the War of 1812, President Madison… enacted the Tariff of 1816 to price British textiles out of competition, so Americans would build the new factories and capture the booming U.S. market. It worked. Tariffs [also] financed Mr. Lincoln’s War. The Tariff of 1890 bears the name of Ohio Congressman and future President William McKinley, who said that a foreign manufacturer ‘has no right or claim to equality with our own… He pays no taxes. He performs no civil duties’… [A tariff’s] purpose is not just to raise revenue but to make a nation economically independent of others, and to bring its citizens to rely upon each other rather than foreign entities.”
Patrick J. Buchanan, The American Conservative

A libertarian's take

“The scoop reflects poorly on Trump, who willfully misled the public for a decade in hopes of fraudulently representing himself as a man with a Midas touch. But he could not have succeeded without the assistance of many Americans, some mercenary, others over-credulous, who helped to spread the deceit and deception, generating countless newspaper articles, magazine stories, and TV segments that misinformed the public about the publicity hound’s record in business. New evidence of his staggering losses in that decade therefore provides an apt occasion to reflect on the media’s complicity in Trump’s brazen deceit and deception… Let [this] be a lesson for today’s tabloids, gossip columnists, over-credulous or mercenary journalists, and reality-television producers.”
Conor Friedersdorf, The Atlantic

On the bright side...

Chicago is now spreading anti-ketchup propaganda on expressways.

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