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Saturday, August 18, 2018

A Rundown of All the Ways Trump Is Overseeing an All Out, Under-the-Radar Attack on Workers

A Rundown of All the Ways Trump Is Overseeing an All Out, Under-the-Radar Attack on Workers // Working In These Times

Amidst headlines about porn stars and bromance with Russian President Vladimir Putin, it can be hard to track the many ways the Trump administration is hurting workers in the United States. The Supreme Court's Janus ruling that struck a blow to unions' ability to collect membership dues held a brief spotlight in the national news churn. But in a more-quiet fashion, the Trump administration already has been slowly dismantling worker protections, especially those enacted under the Obama administration.     


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The rise of neo-fascism: Martin Wolf : How we lost America to greed and envy : "Mr Trump is the logical outcome of a po...

The rise of neo-fascism: Martin Wolf : How we lost America to greed and envy : "Mr Trump is the logical outcome of a po... // Grasping Reality with Both Hands: The Semi-Daily Journal Economist Brad DeLong

The rise of neo-fascism: Martin Wolf: How we lost America to greed and envy: "Mr Trump is the logical outcome of a politics that serves the interests of the plutocracy...

...He gives the rich what they desire, while offering the nationalism and protectionism wanted by the Republican base. It is a brilliant (albeit unplanned) combination, embodied in a charismatic personality that offers validation to his most passionate supporters. Will Trump's protectionism do many in his base any good? No. But, in their eyes, he is a real leader, at last. Who lost "our" America? The American elite, especially the Republican elite. Mr Trump is the price of tax cuts for billionaires. They sowed the wind; the world is reaping the whirlwind. Should we expect the old America back? Not until someone finds a more politically successful way of meeting the needs and anxieties of ordinary people.



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The fantasy wv "comeback"

Social Security Lifts 1.7 Million Children Out of Poverty

Social Security Lifts 1.7 Million Children Out of Poverty // Center on Budget: Comprehensive News Feed

Eighty-three years ago today, President Franklin D. Roosevelt signed the Social Security Act. To mark the occasion, we've updated our backgrounder on Social Security, a vital program to which nearly every American contributes and from which nearly every American ultimately benefits.


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Friday, August 17, 2018

Eastern Panhandle Womns March Podcast: Sandra Lynch and Christina Vogt

Download this episode (right click and save)

Sandra Lynch and Christina Vogt introduce Womens Equality Day 

August 26, 2018, 1:00 to 2:0 PM 
War Memorial Park
Martinsburg, WV

Our celebration of our Constitution's 19th Amendment 
confirming the right of women to vote.

Recommended Dress: Wear White (with touches of gold and purple) to honor the suffragettes that came before us. Period Dress Encouraged

Sponsors: West Virginia National Organization of Women and West Virginia Womens March

West Virginian Women from Planned Parenthood, West Virginia Free and other organizations, local candidates and students will be joining us to speak aut voting, healthcare and reproductive rights.

For more information contact,  or 304-300-5030.

Sandra Lynch can be reached at Facebook
Christina Vogt can be reached at Facebook:

Elizabeth Warren Proposes a Second New Deal [feedly]

Warren's New New Deal

Elizabeth Warren Proposes a Second New Deal

Senator Elizabeth Warren speaks in Woburn, Massachusetts, on August 8, 2018.

When Bernie Sanders offered up his definition of socialism in a speech at Georgetown University in 2015, he basically equated it with the governmental programs created by the New Deal. Sanders cited Social Security, and New Dealer Lyndon Johnson's three-decades-later follow-up, Medicare, as the primary U.S. examples of publicly funded universal programs that provided older Americans with income and access to health care. That, said Sanders, was a tradition he sought to renew, by creating single-payer health care for all, free public university educations, and a host of other programs.

The historic ground on which Sanders took his stand was the experience of the United States when New Deal programs were most effectual. Before they'd been eroded by the financialization and globalization that commenced in the 1970s, FDR's New Deal gave the nation its one and only period of broadly shared prosperity.

But it wasn't just the programs FDR signed into law that did the trick. It was also one further bill that didn't expand government's capacities and responsibilities as such, but simply gave workers power: the National Labor Relations Act. By enabling workers to join unions without fear of dismissal, the NLRA facilitated the growth of unionization to the point that just over one-third of the nation's workers were unionized and thereby wielded sufficient power to affect corporate behavior. In the three decades following World War II—the three decades of unions enforcing worker power—median worker income rose in tandem with productivity, and CEOs made on average 20 times what their average employee made.

That world has long since vanished into the mists of time and financialization. As I noted in my Tuesday email, profit margins (that is, the share of revenue going to profits) reached an all-time high in the last quarter, while wages, when factoring in the rise in the cost of living, actually declined.

Comes now Elizabeth Warren, like Sanders, seeking to re-create the New Deal's creation of a vibrant middle class—but in this instance, not through an updated version of governmental social provision, as Sanders suggested, but through that other dimension of New Deal success: bolstering worker power. This week, Warren introduced a new bill, the Accountable Capitalism Act, which seeks nothing less than the compelled conversion of American corporations from their current creed of maximizing shareholder value to the friendlier confines of benefiting all corporate stakeholders.

To this end, she proposes two fundamental changes. The first is to end corporate chartering by the various states, replacing it through requiring corporations with more than $1 billion in yearly revenues to be federally chartered, and to have those charters redefine the corporations' mission so that they benefit not just shareholders but their employees and communities as well. The second change she proposes is to require corporations to have 40 percent of their boards of directors elected not by their shareholders but by their employees. In this, she's following the lead of her colleague Tammy Baldwin, who introduced a bill earlier this year that required corporations to set aside one-third of their board seats to employee representatives. And both senators are following the lead of the Germans, where a 50-50 split of board membership between owner and worker representatives has long been required by law.

As Warren noted in an op-ed she wrote for the Wall Street Journal yesterday, over the past 35 years the financialization of the American corporation has meant that shareholders now extract more funds from corporations than those businesses devote either to investment in their own enterprise or wage increases for their workers. (University of Massachusetts economist William Lazonick, the doyen of share-buyback scholars, documented these developments in a piece he wrote for the summer issue of the Prospect.)

Warren, then, is seeking to reinvent the "corporate conduct" side of the New Deal, much as Sanders wants to reinvent its social-rights dimension. This is not to say either is opposed to the other's endeavors: Warren, for instance, supports Sanders's Medicare for All bill, among other similar proposals. Both also support the next iteration of labor law reform, which would renew the promise of the NLRA by restoring workers' rights to associate and bargain.

As Vox's Matt Yglesias has noted, Warren's proposal is sure to rouse the tsunami-force ire of corporate executives and, not to put too fine a point on it, the greedy rich. But, like Baldwin before her, Warren has plainly calculated that if and when this becomes a battle for public support, it's a fight she can win. Baldwin, after all, put her bill forth this year, despite facing a re-election campaign in a purple state. Some polling that Yglesias cites suggests there's majority support for putting workers on corporate boards. My hunch is that even as many working-class Trump supporters voted against "right to work" in Missouri last week, many working-class Trump supporters in Baldwin's Wisconsin, Warren's Massachusetts, and all across the country would support giving workers more say over corporate decisions. Perhaps Warren's new bill will prompt Pew and Gallup to poll on this issue. The results, I suspect, would stiffen Democrats' spine when proposals like Warren's come before them once they retake power.

As I've written frequently here at the Prospect and in my columns for The Washington Post, co-determination has been a major factor in Germany's ability to maintain world leadership in manufacturing, preserve its middle class, and limit CEO pay—a whole raft of achievements that have eluded the financialized United States. In tandem with expanding social provision, curtailing Wall Street, restoring progressive taxation, and rebuilding worker power, it could just give this nation a new birth of equality and prosperity.

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Something Not Rotten in Denmark [feedly]

Something Not Rotten in Denmark

To be or not to be a socialist hellhole, that is the question. Sorry, I couldn't help myself.

Last weekend, Trish Regan, a Fox Business host, created a bit of an international incident by describing Denmark as an example of the horrors of socialism, right along with Venezuela. Denmark's finance minister suggested that she visit his country and learn some facts.

Indeed, Regan couldn't have picked a worse example — or, from the point of view of U.S. progressives, a better one.

For Denmark has indeed taken a very different path from the United States over the past few decades, veering (modestly) to the left where we've veered right. And it has done just fine.

American politics has been dominated by a crusade against big government; Denmark has embraced an expansive government role, with public spending more than half of G.D.P. American politicians fear talk about redistribution of income from the rich to the less well-off; Denmark engages in such redistribution on a scale unimaginable here. American policy has been increasingly hostile to organized labor, and unions have virtually disappeared from the private sector; two-thirds of Danish workers are unionized.  

Conservative ideology says that Denmark's policy choices should be disastrous, that grass should be growing in the streets of Copenhagen. Regan was, in effect, describing what her employers think must be happening there. But if Denmark is a hellhole, it's doing a very good job of hiding that fact: I was just there, and it looks awfully prosperous.

And the data agree with that impression. Danes are more likely to have jobs than Americans, and in many cases they earn substantially more. Overall G.D.P. per capita in Denmark is a bit lower than in America, but that's basically because the Danes take more vacations. Income inequality is much lower, and life expectancy is higher.

The simple fact is that life is better for most Danes than it is for their U.S. counterparts. There's a reason Denmark consistently ranks well ahead of America in measures of happiness and life satisfaction.

But is Denmark socialist?

The libertarian Cato Institute says no: "Denmark has quite a free-market economy, apart from its welfare state transfers and high government consumption." That's some qualification.

It's true that Denmark doesn't at all fit the classic definition of socialism, which involves government ownership of the means of production. It is, instead, social-democratic: a market economy where the downsides of capitalism are mitigated by government action, including a very strong social safety net.

But U.S. conservatives — like Fox's Regan — continually and systematically blur the distinction between social democracy and socialism. In 2008, John McCain accused Barack Obama of wanting socialism, basically because Obama called for an expansion of health coverage. In 2012, Mitt Romney declared that Obama got his ideas from "socialist democrats in Europe."

In other words, in American political discourse, anyone who wants to make life in a market economy less nasty, brutish and short gets denounced as a socialist.

And this smear campaign has had a predictable effect: Sooner or later, if you call any attempt to improve American lives "socialism," a lot of people will conclude that socialism is O.K.

A recent Gallup poll found that majorities both of young voters and of self-identified Democrats prefer socialism to capitalism. But this doesn't mean that tens of millions of Americans want the government to seize the economy's commanding heights. It just means that many people, told that wanting America to be a bit more like Denmark is socialist, end up believing that socialism isn't so bad, after all.

The same may be said for some Democratic politicians. Much has been made of Alexandria Ocasio-Cortez, not just because of her upset primary victory, but because she's a self-proclaimed socialist. Her platform, however, isn't socialist at all by the traditional definition. It's just unabashedly social-democratic.

And that puts her in line with the rest of her party. Whenever I read articles questioning what Democrats stand for, I wonder if the writers are paying any attention to what candidates are saying about policy. For today's Democratic Party is actually impressively unified around social-democratic goals, far more so than in the past.

True, there are differences over both policy and rhetorical strategy. Should the push for universal health coverage involve Medicare for all, or simply the right for everyone to buy into an enhanced Medicare program? Should Democrats simply ignore Republican slander of their social-democratic ideas, or should they try to turn the "socialist" smear into a badge of honor?

But these aren't very deep divisions, certainly nothing like the divisions between liberals and centrists that wracked the party a couple of decades ago.

The simple fact is that there is far more misery in America than there needs to be. Every other advanced country has universal health care and a much stronger social safety net than we do. And it doesn't have to be that way.

 -- via my feedly newsfeed

NYTIMES: The Costs of Motherhood Are Rising, and Catching Women Off Guard [feedly]

The Costs of Motherhood Are Rising, and Catching Women Off Guard

An economic mystery of the last few decades has been why more women aren't working. A new paper offers one answer: Most plan to, but are increasingly caught off guard by the time and effort it takes to raise children.

The share of women in the United States labor force has leveled off since the 1990s, after steadily climbing for half a century. Today, the share of women age 25 to 54 who work is about the same as it was in 1995, even though in the intervening decades, women have been earning more college degrees than men, entering jobs previously closed to them and delaying marriage and childbirth.

The new analysis suggests something else also began happening during the 1990s: Motherhood became more demanding. Parents now spend more time and money on child care. They feel more pressure to breast-feed, to do enriching activities with their children and to provide close supervision.

A result is that women underestimate the costs of motherhood. The mismatch is biggest for those with college degrees, who invest in an education and expect to maintain a career, wrote the authors, Ilyana Kuziemko and Jenny Shen of Princeton, Jessica Pan of the National University of Singapore and Ebonya Washington of Yale.


The study — a working paper, meaning it has not yet been published in a peer-reviewed journal — tries to quantify what many parents feel as they struggle with the stress of long, inflexible work hours combined with the demands of STEM classes, screen time rules, college prep, family dinners and children's sick days.

The researchers documented a sharp decline in employment for women after their first children were born, in both the United States and Britain, even though about 90 percent of women worked before having children. They used data from the Labor Department's National Longitudinal Surveys, the University of Michigan's Panel Study of Income Dynamics and the British Household Panel Survey. Each covers several decades, but the study focused mostly on women born between 1965 and 1975, who were in their 30s in the 2000s.

For many women, the researchers show, stopping work was unplanned. Since about 1985, no more than 2 percent of female high school seniors said they planned to be "homemakers" at age 30, even though most planned to be mothers. The surveys also found no decline in overall job satisfaction post-baby. Yet consistently, between 15 percent and 18 percent of women have stayed home.

One key to understanding why women have diverged from their plans, the economists found, is that their beliefs about gender roles change after their first baby. The surveys ask questions like whether work inhibits a woman's ability to be a good mother and whether both parents should contribute financially to a family. Women tend to give more traditional answers after becoming mothers.

The people most surprised by the demands of motherhood were those the researchers least expected: women with college degrees, or those who had babies later, those who had working mothers and those who had assumed they would have careers. Even though highly educated mothers were less likely to quit working than less educated mothers, they were more likely to express anti-work beliefs, and to say that being a parent was harder than they expected.


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Though the study did not analyze fathers' role in depth, it found that their beliefs did not change significantly before and after having a baby. They were less likely than women to say that parenthood was harder than they expected. (Women still do the bulk of child care, even in two-earner families.)

Women got it so wrong, the researchers argue, because it has become harder to work and have children.

The cost of motherhood fell for most of the 20th century because of inventions like dishwashers, formula and the birth control pill. But that's no longer the case, according to data cited in the paper. The cost of child care has increased by 65 percent since the early 1980s. Eighty percent of women breast-feed, up from about half. The number of hours that parents spend on child care has risen, especially for college-educated parents, for whom it has doubled.

Over all, women have had great success in entering the labor force. Seventy percent of mothers with children under 18 work. Women are more likely to work than previous generations at almost every age, found Claudia Goldin, a Harvard economist. They're slightly more likely to stop in their late 30s and early 40s, around the time many are taking care of young children — but they usually return to the labor force, particularly if they have degrees.

Still, the new paper raises questions about why the work-family juggle seems to be getting harder. "It is deeply puzzling that at a moment when women are more prepared than ever for long careers in the labor market, norms would change in a manner that encourages them to spend more time at home," the researchers wrote.

One possible reason is that increasingly, people who work long, inflexible hours are paid disproportionately more, Ms. Goldin's research has found. More women with degrees and these kinds of demanding jobs are having children, and they're likely to be married to men with similar jobs, as Marianne Bertrand, an economist at the University of Chicago, has described. A result is that dual-earning couples may feel the best choice is for one member, usually the mother, to step back from work so the other parent can maximize the family's earnings.

To try to set their children on the best path amid increased competition for college admission, parents, especially college-educated ones, invest significantly more time than they used to in child care, found Valerie Ramey and Garey Ramey, economists at the University of California, San Diego. They described it as the "rug rat race" for top colleges.


The lack of family-friendly policies in the United States — such as paid family leave and subsidized child care — most likely plays a role, too. Although policies have improved somewhat since the early 1990s, women's labor force participation in countries that have more generous policies has continued to increase, unlike in the United States.

As women do more paid work, men have not increased their child care and housekeeping tasks to the same extent — another surprise for young women who, research has shown, expected more egalitarian partnerships.

Generations of girls have been told they can achieve anything they aspire to, including having both a career and children — and many women have done so. But at the same time, both work and parenting have become more demanding. The result is that women's expectations seem to be outpacing the realities of public policy, workplace culture and family life.

Claire Cain Miller writes about gender, families and the future of work for The Upshot. She joined The Times in 2008 and was part of a team that won a Pulitzer Prize in 2018 for public service for reporting on workplace sexual harassment issues. @clairecm • Facebook
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Two and a half years after Jared wrote this, and there is still no sign that the economy has reached "full employment",... [feedly]

Something is awry in the indicators on employment --- 50% confidence bands????

Two and a half years after Jared wrote this, and there is still no sign that the economy has reached "full employment",...

Two and a half years after Jared wrote this, and there is still no sign that the economy has reached "full employment", or that the pace of wage and price growth is even beginning to spiral upwards. Thus he Federal Reserve continues to work with a model of the economy in which we should have very little confidence, if any: Jared Bernstein (2016): Important new findings on inflation and unemployment from the new ERP: "The 'Phillips curve'... negative correlation between inflation and unemployment...

...Peak correlation occurred in the early 1990s, but the relationship has weakened since then, and the end of the figure shows that unemployment explains almost none of the variation in inflation in recent years.... Over the full period... a one point increase in unemployment led inflation to fall by -0.4 percentage point. But... by the end of the period, it too is just about zero.... The natural rate a) has been falling for a while, and b) is hard to pin down to a reliable point estimate. For those of us who were always suspicious that a "natural rate" could be identified accurately enough to guide policy, the mid-1990s were highly instructive....

What you're left with is a point estimate for the natural rate of around 4.5 percent surrounded by a 50-percent confidence band that in 2014 ranges from –4.3 to 6.1.... These figures should lead to a major rethink by those, including some Fed governors, who think transient factors like cheap oil and the strong dollar are temporarily jamming the signal from the Phillips curve to the natural rate. The findings at the end of each series above are based on the last 20 years of data. None of us know the future, but when models fail like this, we must look under new rocks.... The Fed must be... data driven, not model driven. They can't know the natural rate with any confidence right now. They must know the weakness of the slack/inflation correlation. Add to those facts how critical it is for working people that we get to and stay full employment, and the bar to pre-emptive rate hikes should be extremely high...


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Why Brexit is really about Competing Visions of Capitalism [feedly]

Why Brexit is really about Competing Visions of Capitalism

Since the resignation of Boris Johnson and David Davis, ostensibly in response to Theresa May's Chequers plan for the next phase of Brexit negotiations, many have quite understandably wondered: where's your alternative, then?

This is a fair question, but the wrong question. May's lack of a parliamentary majority makes little difference to her ability to shape the focus and resources of the civil service across all departments. It has taken the UK government this long to come up with one half-baked plan, so the prospect of May allowing officials to spend time on an alternative is almost nonsensical.

It is also the wrong question because the Brexiters do in fact have a plan, albeit one which is literally unspeakable in British politics. It is a plan for a different kind of capitalism.


The UK is not a country comfortable discussing big questions on economic order. The stock-in-trade of critical political economists, like me, is the dissection of things like "the market""free trade" and "public finances": abstract economic concepts that bear little relation to how our capitalist economy actually functions. It's easy to forget that outside our ivory towers, this stuff is implicitly, and entirely uncritically, imbibed with the same solidity with which we might discuss natural systems like the weather or cellular reproduction.

Try to imagine David Dimbleby fielding a query on Question Time about how the panel feels about the failure of Anglo-liberal capitalism. Exactly.

The Brexiter plan that dare not speak its name is actually the completion and internationalisation of "Osbornomics", although former chancellor George Osborne campaigned for Remain. While he was in government, Osborne's vision was for a low-tax, low-welfare, lightly-regulated and highly-globalised economy. He labelled it "austerity", at a stroke both validating neoliberal notions of individual self-reliance, while diverting all public scrutiny to rather marginal questions around deficit reduction.

Leaving the European Union is not necessary to this project, but it does accelerate it. Osborne was a Remainer because he foresaw that it would be difficult for any incumbent government to survive the political and economic shock of withdrawal.

But he also recognised that the EU was itself already moving in this direction. That much is clear from its ever stricter macroeconomic rules, which will enforce fiscal conservatism, and, above all, its zest for new trade deals such as the Transatlantic Trade and Investment Partnership, and similar agreements with Canada and Japan. The latter represent a race to the regulatory bottom across a large number of industries. The notion that the EU is a trading "bloc" with a protectionist orientation towards non-members, peddled consistently by the Brexiters, had already been largely consigned to history.

Seizing the moment

The EU is positioning itself in the emerging capitalist order, dominated by American tech companies, the Chinese state and, to a lesser extent, the Indian middle class. In government, Osborne sought to position the UK as the financial centre of this worldwide economy (albeit with low-value services providing mass employment).

Membership of the EU, but not the eurozone, was central to this strategy. But this awkward status could not have persisted indefinitely. And, ironically, a leaner and meaner post-Brexit EU will be liberated to pursue its own anglicised foreign economic policy (including challenging the City of London's role). The only real difference between Osborne, when he was chancellor, and the Brexiters is that the former favoured a gradual detachment from Europe, as EU-wide single market rules softened in favour of fiscal disciplining applicable only within the eurozone, while the latter seek a quicker break.

Ironically, of course, it was only the deleterious consequences of Osborne's austerity that made the Brexit vote possible in the first place, as elite euroscepticism combined perversely with popular discontent on June 23, 2016.

Ultimately, the Brexiters are merely taking Osbornomics to its logical conclusion. Johnson is its mouthpiece but the rightful heir is new home secretary, Sajid Javid, an Osborne acolyte, and a very reluctant Remainerwho now embraces hard Brexit. Their philosophy is one of Schumpeterian capitalism, underpinned by the forces of "creative destruction". You want them to come up with a plan for leaving the EU? That's the destruction bit: leaving is the whole plan.

But do not expect the Brexiters to instead articulate the creative side of things (that is, their strategy for the UK's post-Brexit economy) any time soon. That would involve an impossible degree of honesty about the kind of capitalism they envisage. It would mean going beyond empty cant about "Global Britain", based on 19th-century ideas about trade, and actually outlining what will change about the British economy.

The language needed to do that has long been suppressed in British political discourse. But we should be in no doubt that the trade deals which the Brexiters crave would be designed to cement their vision of how the UK can serve the emerging global order, with a single, globalised city – London – functioning as a financial centre. The rest of the economy would be subject to the whims of the business strategies of global firms, enticed to the UK by promises of low tax and light regulation.

Soft Brexit

Where can we position May in relation to this agenda? Why is she so much keener on (but not necessarily capable of) concocting a plan for EU withdrawal? May has a quite different vision of British capitalism. It's far more continental in orientation, centred around the revival of industrial policy and the development of new advanced manufacturing industries.

In other political circumstances, there would be the makings of a broad and durable coalition around this essentially Brownite agenda, embracing one-nation conservatives, the soft left, Vince Cable's Liberal Democrats and large parts of the Corbynite left. Given the integration of European production networks, the strategy depends absolutely on securing a soft (or pseudo) Brexit. Hence May's willingness to negotiate, and the emphasis on goods trade at the expense of services in the Chequers plan.

Paradoxically, while the supersonic Osbornomics of Johnson et al depends on maintaining high levels of immigration to expand the low-paid workforce as the UK-born population ages, May's industrial strategy-based soft Brexit is more amenable to stricter border controls. It perhaps even depends economically on a less liberal immigration regime so that firms are compelled to upskill their existing workforce. Even Cable and Jeremy Corbyn have counter-intuitively (and some would say disgracefully) accommodated the end of free movement within their Brexit policies.

However, even if such a coalition could be constructed, its vision would be no less illusory or fantastical than that of the Brexiters. The moment has passed. There is little the UK can realistically do now to reposition its economy at the forefront of the so-called fourth industrial revolution. May's vision is more coherent but, sadly, the Brexiters' vision, while destructive, is more credible.

We will still end up, for now, with a soft Brexit, of sorts. Big business is beginning to flex its muscles – the short-term interests of capitalists are not synonymous with the long-term trajectory of capitalism. Even mavericks like Johnson will be brought to heel. Johnson of course expected to lose the 2016 referendum, allowing him to succeed David Cameron as Conservative leader while sticking closely to Osborne's long game when he was chancellor. Yet here we are. Even the best laid plans cannot control for capitalism's capacity for chaos.




Dr Craig Berry is a Reader in Political Economy at Manchester Metropolitan University, part of the Future Economies university centre for research and knowledge exchange.

This post first appeared on:




Image credit: Johnny Silvercloud via Flickr (CC BY-SA 2.0)

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China’s economy will not buckle under Trump’s trade war [feedly]

China's economy will not buckle under Trump's trade war

f one were to believe the news coming out of world media, China is about to concede to US President Donald Trump's demands: Refrain from "unfair trade practices" and abandon the "Made in China 2025" industrial policy, the reasons for his trade war against the world's second-largest economy.

According to articles published by outlets such as the South China Morning Post, Reuters and others, Trump is winning the trade war against China. For example, Ben Blanchard and Kevin Yao wrote for Reuters that four "anonymous sources" had said the US-China trade war had caused a rift within the Chinese leadership in part because of the government's overly "nationalistic" tit-for-tat response. The article added that one "source" indicated Xi Jinping's influence and power were waning.

According to Blanchard and Yao, these "anonymous sources" said the leadership's tit-for tat stance had hardened Trump's stance, which they claimed was causing the loss of 20% in stock market values, a 0.1% year-on-year decline in growth in the second quarter and a 1.5% devaluation of the yuan against the greenback. These "sources" also claim China "overestimated" its strength, culminating in  "a state of panic."

Independent China-based researcher Xu Yimiao wrote in an August 10 the South China Morning Post articlethat China should cut its losses and concede defeat to Trump. He argued that China was running out of retaliatory countermeasures and overestimated its economic strength. Xu also saw the newly established EU-Japan Free Trade Agreement as a vehicle against China.

Another sign critics have used to show the US was winning the trade is the opposite directions in which the two economies were heading. The US Department of Commerce revealed that the US economy grew 4.1% in this year's second quarter compared with Q1's 2.3%. The National Bureau of Statistics of China showed that China's second quarter increased slower than the first, 6.7% and 6.8% respectively.

But is China losing the trade war?

However, the critics were silent about China's stock market rebounding since August 8. According to Bloomberg, foreign investors were bullish on the Chinese economy, buying US$2.9 billion worth of mainland shares through Hong Kong links between July 25 and August 8. Since most of the money came from institutional funds looking for long-term investment opportunities, it would seem foreign institutional investors are not worried about China's economic "slowdown," stock market losses or currency devaluation.

The US Chamber of Commerce in China has reported that 73% of its members are profitable and 74% planned to expand investment in China in 2018.

The China "gloom and doom" messengers also fail to mention that unlike Western stock markets, China's are dominated by individual investors who have little knowledge about the economy or capital markets. They only want to make some fast money and for the most part panic at the first negative sign, as they did during the 2017 "Chinese stock-market rout" – which bounced back within a short time period.

Therefore, the stock market in China is never an indicator of economic performance. Rather, small investors see it is a casino in which  to make a quick buck.

On currency devaluation, some critics see the trade war is weakening the Chinese economy while others speculate that China is "weaponizing" the yuan to counter Trump's stance. Either way, that does not mean a weakening economy and capital outflow are in the offing.

Another sign that critics apply to suggest China is taking a hit from the trade war is the fact that the Caixin/Markit Purchasing Managers Index contracted from 5.1% in June to 50.8% in July, suggesting that manufacturing expansion had slowed.

Whether decreases in some economic indicators are a sign that the trade war is taking its toll on the Chinese economy is unclear. But Chinese key economic indicators are far more robust than those of the US, despite its president claiming the economy has never been better.

Further, critics have applied the same logic in past assessments, falling over one another to tell the world that China's economy is collapsing at the first sign of weakness. They were wrong each time in the past. They will be wrong again because their analysis is inconclusive, lacks long-term data, and to some extent is injected with ideological biases.

Impact on US economy

The 4.1% Q2 growth rate in the US might have been a blip rather than a trend. Surging agricultural exports to bypass tariff retaliation by China and other countries contributed to one full percentage point of the growth rate, according to The Wall Street Journal. Trump's tax cuts and increased government spending also contributed. Making allowance for these one-time phenomena, the seasonally adjusted growth rate (an indication of long-term growth trend) would be lower.

What's more, other organizations are not as optimistic as the White House, pointing to a less than successful trade war.

According to an August 8 China Global Television Network (CGTN) report, the Atlantic Federal Reserve revealed that the trade war was forcing 20% of businesses either to postpone or cancel investment plans. If true, US economic growth will contract and unemployment will rise.

The Wall Street Journal has reported that small businesses and startup companies are being particularly hit hard, losing profits and investment funds (largely from China). Unable to withstand the losses, many could shut down, according to the WSJ. Should this occur, the impact on the US economy will be severe because small businesses are its backbone, creating most of the country's jobs.

In the meantime, US farmers are still waiting for Trump's promise of a $12 billion bailout. According the US Chamber of Commerce, Trump will require another $27 billion bailout for other agricultural groups. Where he will get that money is a mystery in light of increasing government deficits.

What's more, the bailouts may only be a Band-Aid solution because they are intended to ease current revenue losses caused by Trump's trade war against China (and other countries). The long-term pain will be much more pronounced because the US may lose the lucrative China market.

According to the China's Ministry of Commerce, the country has other sources in Brazil, Argentina, Russia and other countries for its food and animal feed. And even if the European Union caves in to Trump's bullying and shifts to buying US soybeans, farmers would still face surpluses, culminating in significant price drops.

The latest news on the effects of Trump's trade war relates to the cost of rebuilding houses destroyed by California wildfires. According to the California Construction Association, the cost will rise because of tariffs imposed on lumber, nails, drywall and other building materials. Such costs would affect not only California, but would apply nationwide.

What's more, Trump's trade war against China disturbs the global supply chain, harming other countries, including the US. The parts imported from China and other nations to make the final product in America will become more costly, causing cost-push inflation. Moreover, prices rising faster than wages due to China's and other countries' tit-for-tat tariffs may lead to "price or demand pull" inflation.

History is not on the critics' side, pundits having been wrong again and again over the last 40 years about China's imminent collapse. Based on the cherry-picking of "facts" or inconclusive analysis, they will probably be wrong again.

 -- via my feedly newsfeed

Thursday, August 16, 2018

Re: [CCDS Members] Democrats and democrats --


Thank you. Posted on Facebook??

On Thu, Aug 16, 2018 at 1:29 PM, John Case <> wrote:
Democrats and democrats

Keep talking and a way will open.

One of the more satisfying narratives explaining the divisions in the Democratic party surrounding the campaign(s) of Bernie Sanders is a contest of class perspectives. Its not the only narrative, but it reveals features no other perspective does. The fundamental legitimacy of Sanders campaigns and candidacy is that it puts aggravated income inequality at the top of the list of challenges imperiling US democracy. Hillary Clinton, Bill Gates, Warren Buffet, Michael Bloomberg (Independent~Republican), Robert Rubin, Larry Summers, and Barack Obama ALL agree its an IMPORTANT problem. But 1) they think its very hard to achieve absent very risky structural and institutional changes; and 2) they do not believe the coalition representing labor, civil rights, peace, environmental, and progressive forces are either united enough or capable of managings this economy. 

Without getting long winded, both objections have some merit. And yes, there is considerable risk entrusting the nation's and the world's fate to left wing leadership. Even the most widely supported Left demand -- Medicare for All -- would be a program whose scale, both in term of bureaucracy and diversity of delivery systems, would dwarf any other health care system in the world by an order of magnitude. The costs of such scale will be impossible without restructuring pharmaceuticals, medical schools, national education and the private insurance system (the third largest concentration of US capital, I believe). This means structural changes in the US economy, which means significant shifts in the class structure of US society, including the division of wealth. There are many risks there between the cup and the lip. But, despite these risks, there is a bigger and more devastating one, represented by Trump and the gangster billionaires (and their various backers). The scrambling for crumbs economy an culture that is the consequence of 45 years of aggravated inequality gives fascists multifarious opportunities to grasp a third of the people by the throat with false enemies. That direction is decay and war. But the way out, it seems to me, includes progressives getting more involved in governing at local and grass roots levels and solid experience in the ARTS OF THE POSSIBLE. But the "liberal elites" -- despite their apprehensions, must not repeat errors of the last century's battle with fascism. Ordinary people may be naive about many of the complexities of governing. But they can learn fast. And You can't win without them.  

John Case
Harpers Ferry, WV
Sign UP HERE to get the Weekly Program Notes.

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"All things are ready if our minds be so."
William Shakespeare, Henry V

Democracy and Capitalism: Rules for Peaceful Coexistence [feedly]

Democracy and Capitalism: Rules for Peaceful Coexistence

 Dean Baker

Challenge, August 15, 2018

See article on original site

Bob Kuttner is one of the country's great icons of progressive economic policy. In addition to being a cofounder and co-editor of The American Prospect, he has written a huge number of books and articles over the last four decades from which I have learned a great deal. For this reason, I was anxious to read his newest book, Can Democracy Survive Global Capitalism (W.W. Norton & Company).

Long-time followers of Kuttner will not find much in the book new, although the argument is put forward clearly and forcefully. Kuttner lays out the basic story of a well-functioning capitalism in the three decades following World War II, followed by more than four decades of upward redistribution. The first three decades are ones in which the markets are explicitly regulated for the purpose of accomplishing social ends. This regulation is largely unraveled in the next four decades.

The post-World War II Golden Age is a period in which the United States sees rapid growth, that is broadly shared. Workers at the middle and bottom of the wage distribution saw wage gains that were equal to or even modestly above the rate of productivity growth.

The story in Europe and Japan was even better. Growth was more rapid in these countries as they quickly rebuilt from the war and then far-surpassed pre-war levels of output. At the same time they were hugely extending the welfare state, making pensions more generous and adopting universal health care insurance.

This all takes a turn for the worse in more recent decades. Growth slows, although the timing differs somewhat across countries. In addition, the benefits of growth are no longer evenly shared, with the richest one percent gaining disproportionately everywhere, and most of the workforce seeing little or nothing from the growth achieved over this period.

Kuttner points to these megatrends as backdrop to the rise of far-right political parties with questionable commitments to democracy. As he notes, this is not just a problem with peripheral countries without longstanding democratic traditions, but also in countries like France with the rise of Le Pen, Italy with its Five Star Movement, and of course the United States with the election of Donald Trump.

His basic point is straightforward. He argues that the traditional center-left parties in Europe and the United States have essentially bought into the policies that led to this upward redistribution of income. If broad segments of the working class don't see champions on the left pushing an agenda that advances their interests, then they will turn to nationalist and racist demagogues who promise a better future at the expense of racial and ethnic minorities.

Kuttner's argument is powerfully and compellingly presented. While I see little grounds for disagreement with the basic outline, I think there are important differences in how we can understand the path forward. Before I get to these, I first want to highlight three important areas where Kuttner is mistaken about the past.

Golden Age Stock Returns Were Great

The first issue has to do with stock market returns in the Golden Age. Kuttner notes that the stock market was relatively low in the Golden Age era and since then stock prices have risen sharply. The implication is that stock owners were somehow forced to sacrifice for the benefit of the larger society. This is not true.

Read more on Challenge

 -- via my feedly newsfeed

Democrats and democrats --

Democrats and democrats

Keep talking and a way will open.

One of the more satisfying narratives explaining the divisions in the Democratic party surrounding the campaign(s) of Bernie Sanders is a contest of class perspectives. Its not the only narrative, but it reveals features no other perspective does. The fundamental legitimacy of Sanders campaigns and candidacy is that it puts aggravated income inequality at the top of the list of challenges imperiling US democracy. Hillary Clinton, Bill Gates, Warren Buffet, Michael Bloomberg (Independent~Republican), Robert Rubin, Larry Summers, and Barack Obama ALL agree its an IMPORTANT problem. But 1) they think its very hard to achieve absent very risky structural and institutional changes; and 2) they do not believe the coalition representing labor, civil rights, peace, environmental, and progressive forces are either united enough or capable of managings this economy. 

Without getting long winded, both objections have some merit. And yes, there is considerable risk entrusting the nation's and the world's fate to left wing leadership. Even the most widely supported Left demand -- Medicare for All -- would be a program whose scale, both in term of bureaucracy and diversity of delivery systems, would dwarf any other health care system in the world by an order of magnitude. The costs of such scale will be impossible without restructuring pharmaceuticals, medical schools, national education and the private insurance system (the third largest concentration of US capital, I believe). This means structural changes in the US economy, which means significant shifts in the class structure of US society, including the division of wealth. There are many risks there between the cup and the lip. But, despite these risks, there is a bigger and more devastating one, represented by Trump and the gangster billionaires (and their various backers). The scrambling for crumbs economy an culture that is the consequence of 45 years of aggravated inequality gives fascists multifarious opportunities to grasp a third of the people by the throat with false enemies. That direction is decay and war. But the way out, it seems to me, includes progressives getting more involved in governing at local and grass roots levels and solid experience in the ARTS OF THE POSSIBLE. But the "liberal elites" -- despite their apprehensions, must not repeat errors of the last century's battle with fascism. Ordinary people may be naive about many of the complexities of governing. But they can learn fast. And You can't win without them.  

John Case
Harpers Ferry, WV
Sign UP HERE to get the Weekly Program Notes.

In Unprecedented Move, Former Mayor and Ex-legislator will be Running Mates with Lula

t's an unheard-of situation: three candidates running together for Brazil's presidential elections. The unusual case is actually due to the peculiar scenario ahead of the elections, as the name at the top of voting intention polls – former Brazilian president Luiz Inácio Lula da Silva, from the Workers' Party (PT) – has been in prison for the past four months and is unable to exercise his political rights at the moment.

The plan involves nominating, at first, Workers' Party member and former São Paulo mayor Fernando Haddad as Lula's running mate. Once their registration with the electoral court is reviewed and ratified, which should happen by September 17th, Manuela D'Ávila, from the Communist Party of Brazil (PCdoB), takes on the running-mate slot next to whoever the PT candidate may be, Lula or Haddad.

During a press conference on Tuesday at the PCdoB headquarters in São Paulo, D'Ávila, who was up until that point expected to run for president for her own party, explained that the deal led to a coalition between her and her running mates' party. "The decision by the PCdoB is the decision of those who believe we will win the elections and we will, together, take Brazil out of this crisis that is dramatically impacting the Brazilian people."

Haddad, now officially a vice-presidential candidate, pointed out that the goal with their candidacy is to conceive a project for the country that can turn the situation around and recover from the effects of the 2016 coup d'état.

"I am representing [ex-]president Lula as a vice-presidential candidate. I have the honor of representing him in these circumstances, and as soon as he is approved to run, we will roll out the red carpet so that Manuela can take over my slot. And it will be a glorious day to see her next to the president, walking up the ramp into the presidential office building to rule Brazil."

About ex-president Lula's participation in debates and other campaign activities, Haddad said that, while he is prepared to take on these tasks, the Workers' Party will keep pushing to make sure the former president can exercise his legitimate right to campaign, as established by law.

The Workers' Party will register ex-president Lula with the country's electoral court on the deadline, August 15th.

A huge demonstration is scheduled for the same day in Brasília, Brazil's capital city, as the culmination of the Free Lula March. The 5-day march to support the ex-president is being organized by the Landless Workers' Movement (MST) and other movements and will set off on August 10th, when thousands of people will walk through neighboring cities up to Brasília on the 15th.

Wednesday, August 15, 2018

Five Financial Consequences of Trump Getting His Hands on the Economy

Here we are in the middle of the second year of Donald Trump's presidency and if there's one thing we know by now, it's that the leader of the free world can create an instant reality-TV show on geopolitical steroids at will. True, he's not polished in his demeanor, but he has an unerring way of instilling the most uncertainty in any situation in the least amount of time.

Whether through executive orders, tweets, cable-news interviews, or rallies, he regularly leaves diplomacy in the dust, while allegedly delivering for a faithful base of supporters who voted for him as the ultimate anti-diplomat. And while he's at it, he continues to take a wrecking ball to the countless political institutions that litter the Acela Corridor. Amid all the tweeted sound and fury, however, the rest of us are going to have to face the consequences of Donald Trump getting his hands on the economy.

According to the Merriam-Webster dictionary, entropy is "a process of degradation or running down or a trend to disorder." With that in mind, perhaps the best way to predict President Trump's next action is just to focus on the path of greatest entropy and take it from there.

Let me do just that, while exploring five key economic sallies of the Trump White House since he took office and the bleakness and chaos that may lie ahead as the damage to the economy and our financial future comes into greater focus.

1. Continuous Banking Deregulation

When Trump ran for the presidency, he tapped into a phenomenon that was widely felt but generally misunderstood: a widespread anger at Wall Street and corporate cronyism. Upon taking office, he promptly redirected that anger exclusively at the country's borders and its global economic allies and adversaries.

His 2016 election campaign had promised not to "let Wall Street get away with murder" and to return the banking environment to one involving less financial risk to the country. His goal and that of the Republicans as a party, at least theoretically, was to separate bank commercial operations (deposits and lending) from their investment operations (securities creation, trading, and brokerage) by bringing back a modernized version of the Glass-Steagall Act of 1933.

Fast forward to May 18, 2017 when Trump's deregulatory-minded treasury secretary, "foreclosure king" Steven Mnuchin, faced a congressional panel and took a 180 on the subject. He insisted that separating people's everyday deposits from the financial-speculation operations of the big banks, something that had even made its way into the Republicanplatform, was a total nonstarter.

Instead, congressional Republicans, with White House backing, promptly took aim at the watered-down version of the Glass-Steagall Act passed in the Obama years, the Dodd-Frank Act of 2010. In it, the Democrats had already essentially capitulated to Wall Street by riddling the act with a series of bank-friendly loopholes. They had, however, at least ensured that banks would set aside more of their own money in the event of another Great Recession-like crisis and provide a strategy or "living will" in advance for that possibility, while creating a potent consumer-protection apparatus, the Consumer Financial Protection Bureau (CFPB). Say goodbye to all of that in the Trump era.

Dubbed "the Choice Act" — officially the Economic Growth, Regulatory Relief, and Consumer Protection Act — the new Republican bill removed the "living will" requirement for mid-sized banks, thereby allowing the big banks a gateway to do the same. When Trump signed the bill, hesaidthat it was "the next step in America's unprecedented economic comeback. There's never been a comeback like we've made. And one day, the fake news is going to report it."

In fact, thanks to the Trump (and Republican) flip-flop, banks don't need to defend themselves anymore. The president went on to extol the untold virtues of his pick to run the CFPB, meant to keep consumers from being duped (or worse) by their own banks. Before Trump got involved, it had won $12 billion in settlements from errant banks for the citizens it championed.

However, Kathy Kraninger, a former Homeland Security official tapped by Trump to run the entity, has no experience in banking or consumer protection. His selection follows perfectly in the path of current interim head Mick Mulvaney (also the head of the Office of Management and Budget). All you need to know about him is that he once derided the organization as a "sick, sad" joke. As its director, he's tried to choke the life out of it by defunding it.

In this fashion, such still-evolving deregulatory actions reflect the way Trump's anti-establishment election campaign has turned into a full-scale program aimed at increasing the wealth and power of the financial elites, while decreasing their responsibility to us. Don't expect a financial future along such lines to look pretty. Think entropy.

2. Tensions Rise in the Auto Wars

Key to Trump's economic vision is giving his base a sense of camaraderie by offering them rallying cries from a bygone era of nationalism and isolationism. In the same spirit, the president has launched a supposedly base-supporting policy of imposing increasingly random and anxiety-provoking trade tariffs.

Take, for instance, the automotive sector, which such tariffs are guaranteed to negatively impact. It is ground zero for many of his working-class voters and a key focus of the president's entropic economic policies. When he was campaigning, he promised many benefits to auto workers (and former auto workers) and they proved instrumental in carrying him to victory in previously "blue" rust-belt states. In the Oval Office, he then went on to tout what he deemed personal victories in getting Ford to move a plant back to the US from Mexico while pressuring Japanese companies to make more cars in Michigan.

He also began disrupting the industry with a series of on-again-off-again, imposed or sometimes merely threatened tariffs, including on steel, that went against the wishes of the entire auto sector. Recently, Jennifer Thomas of the industry's main lobbying group, the Alliance of Automobile Manufacturers, assured a Commerce Department hearing that "the opposition is widespread and deep because the consequences are alarming."

Indeed, the Center for Automotive Research has reported that a 25% tariff on autos and auto parts (something the president has threatened but not yet followed through upon against the European Union, Canada, and Mexico) could reduce the number of domestic vehicle sales by up to two million units and might wipe out more than 714,000 jobs here. Declining demand for cars, whose prices could rise between $455 and $6,875, depending on the type of tariff, in the face of a Trump vehicle tax, would hurt American and foreign manufacturers operating in the US who employ significant numbers of American workers.

Though President Trump's threat to slap high tariffs on imported autos and auto parts from the European Union is now in limbo due to a recent announcement of ongoing negotiations, he retains the right if he gets annoyed by… well, anything… to do so. The German auto industry alone employs more than 118,000 people in the US and, if invoked, such taxes would increase its car prices and put domestic jobs instantly at risk.

3. The Populist Tyranny of the Trump Tax Cuts

President Trump has been particularly happy about his marquee corporate tax "reform" bill, assuring his base that it will provide jobs and growth to American workers, while putting lots of money in their pockets. What it's actually done, however, is cut the corporate tax rate from 35% to 21%, providing corporations with tons of extra cash. Their predictable reaction has not been to create jobs and raise wages, but to divert that bonanza to their own coffers via share buybacks in which they purchase their own stock. That provides shareholders with bigger, more valuable pieces of a company, while boosting earnings and CEO bonuses.

Awash in tax-cut cash, American companies have announced a record $436.6 billion worth of such buybacks so far in 2018, close to double the record $242.1 billion spent in that way in all of 2017. Among other things, this ensures less tax revenue to the US Treasury, which in turn means less money for social programs or simply for providing veterans with proper care.

As it is, large American companies only pay an average effective tax rate of 18% (a figure that will undoubtedly soon drop further). Last year, they only contributed 9% of the tax receipts of the government and that's likely to drop further to a record low this year, sending the deficit soaring. In other words, in true Trumpian spirit, corporations will be dumping the fabulous tax breaks they got directly onto the backs of other Americans, including the president's base.

Meanwhile, some of the crew who authored such tax-policies, creating a $1.5 trillion corporate tax give-away, have already moved on to bigger and better things, landing lobbying positions at the very corporations they lent such a hand to and which can now pay them even more handsomely. For the average American worker, on the other hand, wages have not increased. Indeed, between the first and second quarters of 2018 real wages dropped by 1.8% after the tax cuts were made into law. Trump hasn't touted that or what it implies about our entropic future.

4. Trade Wars, Currency Wars, and the Conflicts to Come

If everyone takes their toys to another playground, the school bully has fewer kids to rough up. And that's exactly the process Trump's incipient trade wars seem to be accelerating — the hunt for new playgrounds and alliances by a range of major countries that no longer trust the US government to behave in a consistent manner.

So far, the US has already slapped $34 billion worth of tariffs on Chinese imports. China has retaliated in kind. Playing a dangerous global poker game, Trump promptly threatened to raise that figure to at least$200 billion. China officially ignored that threat, only inciting the president's ire further. In response, he recently announced that he was "willing to slap tariffs on every Chinese good imported to the US should the need arise." Speaking to CNBC's Squawk Box host Joe Kernen on July 20th, he boasted, "I'm ready to go to 500 [billion dollars]."

That's the equivalent of nearly every import the Chinese sent into the US last year. In contrast, the US exports only $129.9 billion in products to China, which means the Chinese can't respond in kind, but they can target new markets, heighten the increasingly tense relations between the world's two economic superpowers, and even devalue their currency to leverage their products more effectively on global markets.

Global trade alliances were already moving away from a full-scale reliance on the US even before Donald Trump began his game of tariffs. That trend has only gained traction in the wake of his economic actions, including his tariffs on a swath of Mexican, Canadian, and European imports. Recently, two major American allies turned a slow dance toward economic cooperation into a full-scale embrace. On July 17th, the European Union and Japan agreed on a mega-trade agreement that will cover one-third of the products made by the world economy.

Meanwhile, China has launched more than 100 new business projects in Brazil alone, usurping what was once a US market, investing a record $54 billion in that country. It is also preparing to increase its commitments not just to Brazil, but to Russia, India, China, and South Africa (known collectively as the BRICS countries), investing $14.7 billion in South Africa ahead of an upcoming BRICS summit there. In other words, Donald Trump is lending a disruptively useful hand to the creation of an economic world in which the US will no longer be as central an entity.

Ultimately, tariffs and the protectionist policies that accompany them will hurt consumers and workers alike, increasing prices and reducing demand. They could force companies to cut back on hiring, innovation, and expansion, while also hurting allies and potentially impeding economic growth globally. In other words, they represent an American version of an economic winding down, both domestically and internationally.

5.Fighting the Fed

President Trump's belligerence has centered around his belief that the wealthiest, most powerful nation on the planet has been victimized by the rest of the world. Now, that feeling has been extended to the Federal Reserve where he recently lashed out against its chairman (and his own appointee) Jerome Powell.

The Fed had been providing trillions of dollars of stimulus to the banking system and financial markets though a bond-buying program wonkily called "quantitative easing" or "QE." Its claim: that this Wall Street subsidy is really a stimulus for Main Street.

Unlikely as that story may prove to be, presidents have normally refrained from publicly commenting on the Federal Reserve's policies, allowing it to maintain at least a veneer of independence, as mandated by the Federal Reserve Act of 1913. (In reality, the Fed has remained significantly dependent on the whims and desires of the White House, a story revealed in my new book Collusion.) However, this White House is run by a president who couldn't possibly keep his opinions to himself.

So far, the Fed has raised (or "tightened") interest rates seven times since December 2015. Under Powell, it has done so twice, with two more hikes forecast by year's end. These moves were made without Trump's blessing and he views them as contrary to his administration's economic objectives. In an interview with CNBC, he proclaimed that he was "not thrilled" with the rate hikes, a clear attempt to directly influence Fed policy. Sticking with tradition, the Fed offered no reaction, while the White House quickly issued a statement emphasizing that the president "did not mean to influence the Fed's decision-making process."

Ignoring that official White House position, the president promptly took toTwitterto express his frustrations with the Fed. ("[T]he United States should not be penalized because we are doing so well. Tightening now hurts all that we have done. The US should be allowed to recapture what was lost due to illegal currency manipulation and BAD Trade Deals. Debt coming due & we are raising rates — Really?")

Fed Chairman Powell may want to highlight his independence from the White House, but as a Trump appointee, any decisions made in the framework of the president's reactions could reflect political influence in the making. The bigger problem is that such friction could incite greater economic uncertainty, which could prove detrimental to the economic strength Trump says he wants to maintain.

When Entropy Wins, the World Loses

Trump's method works like a well-oiled machine. It keeps everyone — his cabinet, the media, global leaders, and politicians and experts of every sort — off guard. It ensures that his actions will have instant impact, no matter how negative.

Economically, the repercussions of this strategy are both highly global and extremely local. As Senator Ben Sasse (R-NE) noted recently, "This trade war is cutting the legs out from under farmers and [the] White House's 'plan' is to spend $12 billion on gold crutches… This administration's tariffs and bailouts aren't going to make America great again, they're just going to make it 1929 again."

He was referring to the White House's latest plan to put up to $12 billion taxpayer dollars into those sectors of American agriculture hit hardest by Trump's tariff wars. Let that sink in for a moment and think: entropy. In order to fix the problems the president has created, allegedly to help America become great again, a deficit-ridden government will have to shell out extra taxpayer dollars.

Subsidizing farmers isn't in itself necessarily a bad thing. It is, in fact, very New Deal-ish and Franklin Delano Roosevelt-esque. But doing so to fix an unnecessary problem? Under such circumstances, where will it stop? When those $200 billion or $500 billion in tariffs on China (or other countries) enflames the situation further, who gets aid next? Auto workers? Steel workers?

What we are witnessing is the start of the entropy wars, which will, in turn, hasten the unwinding of the American global experiment. Each arbitrary bit of presidential pique, each tweet and insult, is a predecessor to yet more possible economic upheavals and displacements, ever messier and harder to clean up. Trump's America could easily morph into a worldwide catch-22. The more trust is destabilized, the greater the economic distress. The weaker the economy, the more disruptable it becomes by the Great Disrupter himself. And so the Trump spiral spins onward, circling down an economic drain of his own making.

Nomi Prins is a journalist, speaker, respected TV and radio commentator, and former Wall Street executive. Her latest book is Collusion: How Central Bankers Rigged the World.

Tom Engelhardt launched Tomdispatch in November 2001 as an e-mail publication offering commentary and collected articles from the world press. In December 2002, it gained its name, became a project of The Nation Institute, and went online as "a regular antidote to the mainstream media." The site now features Tom Engelhardt's regular commentaries and the original work of authors ranging from Rebecca Solnit, Bill McKibben, and Mike Davis to Chalmers Johnson, Michael Klare, Adam Hochschild, Robert Lipsyte, and Elizabeth de la Vega. Nick Turse, who also writes for the site, is associate editor and research director. Tomdispatch is intended to introduce readers to voices and perspectives from elsewhere (even when the elsewhere is here). Its mission is to connect some of the global dots regularly left unconnected by the mainstream media and to offer a clearer sense of how this imperial globe of ours actually works.