Make Trump 2.0 Irrelevant Again!

 Answering Kennedy’s Call

“The United States now has the highest percentage of low-wage workers – that is workers who make less than two-thirds of the median wage- of any developed nation. Fully 25 percent of all American workers make no more than $17, 576 a year.” Harold Myerson The American Prospect,

We know how to counter the Trump administrations attempts to wreck the U.S. economy and our constitution from his past history. Blue states in particular have the power to keep their citizens healthy and safe. They did it in his first term, as I said in a 2017 Huffington Post article, when it was becoming obvious Trump wanted to act like an anti-democratic oligarch.

Climate change has been the target of Trump’s “drill baby drill” fossil fuel supporters since his first term, yet climate change poses the greatest danger to Americans’ health and safety, particularly to our west coast inhabitants (wildfires and floods) and east coasters (hurricanes and tornadoes), not to speak of the record low winter temperatures tormenting Midwesterners.

Huffington Post

“The U.S. just released its latest congressionally mandated Climate Science Special Report that says 2017 wreaked the most catastrophic destruction in 90 years with an estimated $175 billion in property damage. Only the San Francisco Earthquake (1906), Chicago Fire (1871), and Great Flood (1927) caused more destruction,” I said then.

Trump’s other first term attempts at relevance included, “his fiasco of an Asian trip, where he fawned over foreign leaders who gave him massive pageants, but no trade concessions, while abandoning the Trans- Pacific Partnership.

“The remaining 11 countries, including Japan, Australia, Mexico and Malaysia, said they had revived the Trans-Pacific Partnership (TPP) deal, a multilateral agreement championed under the Obama administration.

And also, “American leaders from state capitals, city halls and businesses across the country have shown up in force” in Bonn, Germany, to discuss carrying out the 2015 Paris climate agreement,” said California Governor Jerry Brown and Michael Bloomberg in today’s New York Times.”

This is when President Trump announced at the beginning of his Presidency that he was abandoning the Paris Accord in favor of supporting a return to coal and oil energy. But that wasn’t what the rest of America wanted, as some 50 percent of U.S. states and cities were represented in Bonn.

And now it is his indiscriminate use of import tariffs that threaten to wreck international trade.

President Trump’s attempts to return to the predominately white middle class of the 1950s have become irrelevant to most of the problems facing Americans and the world today. Trump is ignoring the damage revenge policies will do to the U.S. economy, and his own red state supporters by also attempting to destroy American’s social safety net, including cuts to Medicare and Medicaid that most harm red state citizens, protections against climate change, and wanting to downgrade the military alliances that have kept us safe.

Trump’s first term policies have been irrelevant in so many ways. He has done nothing for his red state supporters. As Thom Hartman highlighted in my last blog, red states continue to suffer most from:

— Spousal abuse
— Obesity
— Smoking
— Teen pregnancy
— Sexually transmitted diseases
— Abortion (at least before Dobbs; now it would be “forced births”)
— Bankruptcies and poverty
— Homicide and suicide
— Infant mortality
— Maternal mortality
— Forcible rape
— Robbery and aggravated assault
— Dropouts from high school
— Divorce
— Contaminated air and water
— Opiate addiction and deaths
— Unskilled workers
— Parasitic infections
— Income and wealth inequality
— Covid deaths and unvaccinated people
— Federal subsidies to states (“Red State Welfare”)
— People on welfare
— Child poverty
— Homelessness
— Spousal murder
— Unemployment
— Deaths from auto accidents
— People living on disability
— Gun deaths

Climate change is a good start, since the worldwide droughts have been a major cause of the worldwide migrations escaping from poverty that have upset the existing geopolitical order.

Let’s continue to make Trump and Republicans’ actions irrelevant that are attempting to destroy our federal government by supporting cities, states and even international organizations (UN, WHO?) that pursue the policies that have kept America great and the world at peace—policies that build rather than destroy, that breed trust and community, rather than hatred and division.

This strategy doesn’t minimize the suffering Trump has already inflicted on so many Americans but could mitigate some of the cruelty to come.

Harlan Green © 2025

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

Why Our Endless Tariff Wars?

Popular Economics Weekly

Wrightson-ICAP

POTUS and the Trump administration can’t end their trade wars, although House Speaker Nancy Pelosi just announced they had reached agreement with Republicans on a new NAFTA accord with Canada and Mexico—now called the USMCA, or U.S. Mexico Canada Agreement—because it gives more protections to U.S. workers. She said there’s nothing wrong with a win for President Trump “when it’s the right thing to do (sic).”

But there is no agreement with even a Phase I trade agreement with China, and Trump has basically neutered the World Trade Organization that settles trade disputes by blocking any new appointment to its arbitration panel, which will not only prolong trade disputes but create new ones, since there’s no longer a mechanism for resolving them.

The result has been declining labor productivity and manufacturing output, which puts future economic growth in jeopardy. Productivity declined in mid-2019 after several years of acceleration, in part because companies reduced investment in manufacturing and production in response to the U.S. trade fight with China and the EU. The dispute has also undermined exports and made it harder for businesses to plan ahead.

Labor Productivity, or output per hour worked, declined for the first time since 2015. It fell at a 0.2 percent annual rate from July to September, the government said Tuesday. This means that the hours worked increased faster than output, so that it is increasing just 1.5 percent annually, which means workers will have difficulty improving their standard of living within their working lifetime. They haven’t been able to increase their median income since the 1980s, and trickle-down economic theory prevailed.

This was the theory that lower taxes and less government services lifted all boats, when it fact it only lifted the most expensive yachts. The cutback in government investments in such as infrastructure, education, and R&D, which all serve to increase productivity and efficiency, was another reason for the productivity decline.

And, “Productivity is likely to continue to lag unless there’s a rebound in business investment,” said MarketWatch’s Jeffery Bartash, “but that probably won’t happen unless the trade dispute is largely resolved.”

Higher productivity is the key to a rising standard of living, resulting in higher pay, more profits and low inflation. Low productivity is a sign of an inefficient economy.Productivity in the U.S. has risen at an average rate of just 1.3 percent since 2007, compared with a 2.1 percent average since the end of World War II.

There are better ways to settle trade disputes, such as remaining in trade alliances like the Trans-Pacific Partnership that Trump withdrew from. The other 11 Asian trade partners then drew up their own agreement to better bargain with China, in particular; whereas the U.S. has been unable to reach any agreement by going it alone.

So we know another path to increased productivity is the ability to get along with our economic friends and find a way to work with our enemies.

Harlan Green © 2019

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

What is Really Fair Trade?

Popular Economics Weekly

China is our trading partner with the largest deficit; $506 billion in exports to the US vs. $130 billion in imports from US for a -$376 billion trade deficit in 2017. Canada is the 2^nd largest partner with American consumers buying $300 billion in imports from Canada vs. $282 billion in exports for a -$18 billion trade deficit, according to the latest U.S. Census Bureau data.

Mexico is the third largest partner, with a -$71 billion trade deficit in exports vs. imports. The only partners with which the US has a trade surplus of exports over imports are Brazil and The Netherlands, ranked 12^th and 13^th, respectively, of the top 15 US trading partners.

The culprit is American consumers that now account for almost 70 percent of economic activity, versus 60 percent in the early 1980s, according to Bank of America’s Merrill Lynch analysts.

Consumers spend almost as much as they save, thanks in part to historically low interest rates that make it easy to borrow. The personal savings rate is now 6.7 percent and inflation is ticking above 2 percent, the Fed’s preferred inflation rate, so look for more interest rate hikes in coming months.

Why is President Trump picking a trade war with two of our top three trading partners that accounted for 29 percent of our trading volume in 2017? Is there a better way than a trade war to cure the deficit problem that doesn’t threaten to elevate prices further to an already escalating inflation rate?

Attempting to correct those imbalances is the major reason President Trump launched tariff wars with our largest trading partners. But he crippled himself at the same time by withdrawing from the 12-member Trans-Pacific Partnership—called TPP—at the beginning of his administration. Though it wasn’t perfect (didn’t boost US job formation), the trade alliance lowered tariffs on thousands of goods and gave US the power to oppose China’s unfair trade practices.

Obama economic advisor Austun Goolsbee tweeted recently:

“E.g. TPP cut tariffs on 18,000 us products—to zero for $90b of US autos & $35b of IT, big cuts for US beef, pork, dairy, poultry, forced fairness for US service exports, established free intl movement of data, killed regulatory barriers to us export, limited state owned enterprises.

“TPP had strongest labor rules of any agreement ever (ban forced labor, child labor, discrimination, required freedom to unionize, minimum wage, hour limits, wkr safety) & the strongest enviro (ship pollution, ozone chem, illegal fishing, illegal logging, wildlife trafficking)movement of data, killed regulatory barriers to US export, limited state owned enterprises. And Mexico and Canada signed TPP so Trump’s nafta “deal” is demonstrably worse for the US than what Canada and Mexico already agreed to,” said Professor Goolsbee.”

The trade deficit has been with US since the 1970s, when roaring inflation and several recessions meant consumers wanted cheaper-foreign-made goods over those made in the USA, due in part to several Arab oil embargos that drove up oil prices and caused long lines at gas stations due to gasoline shortages.

On the macro (national) economic level, the US made it easy for American multi-national corporations to build their factories overseas with anti-labor policies that suppressed union collective bargaining and US wages, in their quest to expand international trade by opening US borders via lower import tariffs.

So a greater fair trade world would require major policy changes to correct the trade imbalances, needless to say. American consumers would pay more for Made in USA products and not always seek discounted foreign goods, for starters, if their incomes improved. They would then pay more taxes, increasing government revenues, which would lessen demand for massive federal government borrowing to cover the huge annual federal budget deficit that is projected to reach $1.5 trillion in 10 years.

Really fair trade is understanding basic economics—which would require fairer labor policies.

Harlan Green © 2018

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

Let’s Make America More Equal Again!

Popular Economics Weekly

As defeated Democrats mull over what slogan can equal or overcome President Trump’s “Make America Great Again”, I have a suggestion, one that might even enthuse populist Republicans. Let’s make American more equal again, just as it was in the 1960s and 70s, when we had a thriving middle class in which its children could hope to exceed their parents’ station in life.

After all, it was our thriving middle class that kept the more extreme elements of both political parties and persuasions at bay, so that Republicans and Democrats actually talked to each other. And a middle class will only thrive where there is less income inequality, something that most well-meaning Americans support.

But that was then and we live in now, when most children of the baby boomers retiring do not hope to do better than their parents. Household incomes have stagnated since the 1970s, and the top income earners since the Great Recession now have garnered almost all of the increase.

Graph: Gallup poll

That is why two out of three Americans are dissatisfied with the way income and wealth are currently distributed in the U.S. This includes three-fourths of Democrats and 54 percent of Republicans, according to a recent Gallup poll.

The Great Recession was brought on by Wall Street’s excesses, and the deregulation boom of the Clinton and GW Bush presidential reigns. So why not create programs that Make America More Equal Again?

Graph: Saez-Piketty

Overall, the share of Americans living in middle-class households has declined from 61 percent in 1971 to 50 percent, reports a recent Pew Research study. The hollowing out of the middle class has been a source of consternation among many economists, politicians and the public at large, says those surveyed. They say as Americans move toward the economic extremes it is harder to find common ground, and a common sense of what it means to be an American.

Much of that inequality is in the Midwestern rust belt states that lost those blue collar manufacturing jobs during the globalization and multi-nationalization of US corporations that President Trump promised to bring back again.

So President Trump was no dummy in recognizing this fact. Then how could Democrats be so blasé and oblivious to this fact among their former supporters? Everyone saw it coming; the disenfranchisement of whole segments of working class voters that had descended into depression and drug use in those formerly blue and Democrat-voting states.

There have been many suggestions of how to bring back higher-paying jobs, but candidate Trump seems to have fastened on just three—building more infrastructure, destroying multi-lateral trade agreements like the TPP and NAFTA, as well as limiting immigration inflows to make more jobs available to those suffering American workers.

The first suggestion has been backed by both Democrats and Republicans, and now that President Trump wants it Republicans will stop opposing infrastructure spending, even if it busts the federal budget.

However, building more immigration and trade barriers won’t create greater equality, nor will opposition to minimum wage laws, such as advocated by the Trump pick for new Labor Secretary—CEO of fast food chains Andrew Puzder. Because most immigrant jobs are low-paying, jobs that Americans don’t want anyway. And higher trade barriers for the purpose of bringing jobs home will raise the prices of imported goods, cancelling out much of the income boost from higher-paying jobs.

What won’t work either is the blatant voter and collective bargaining-suppression laws enacted, or about to be enacted in the 25 all-red states with absolute Republican majorities. Such a blatant suppression of minority voters and the wages of working class Americans will suppress their wages, hardly the road to greater equality.

What also won’t work are the attempts to destroy Obama’s Affordable Care Act that have boosted the buying power of at least 20 million working class voters by reducing overall medical costs, as well as Dodd-Frank regulations that have suppressed some of the excessive profit-taking of Wall Street at the expense of State Street.

The same poll updated a long-time Gallup trend, finding that 54 percent of Americans are satisfied, and 45 percent dissatisfied, with the opportunity for an American "to get ahead by working hard."
This measure has remained roughly constant over the past three years, but Americans are much less optimistic about economic opportunity now than before the recession and financial crisis of 2008 unfolded. Prior to that, at least two in three Americans were satisfied, including a high of 77 percent in 2002.

So there are many reasons for Democrats and even truly populist Republicans to support programs that increase income equality. But they can’t be about building more walls. A robust and more politically temperate American middle class can only include Americans of all nationalities and ethnicities.

Harlan Green © 2017

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen