Econospeak: Fascism And You Know Who (YKW) [feedly]

Fascism And You Know Who (YKW)

JB Rosser

http://econospeak.blogspot.com/2017/04/fascism-and-you-know-who-ykw.html

[from when the Italian Fascist government was 'but a few years old"]

"The Secretary of the Fascist Party visits a large factory, accompanied byt the obsequious company director.  At the end of the tour all the workers are massed in the yard to listen to a speech. Before addressing them the Fascist chief looks them over proudly from his podium and asks the director: 'What are these people's politics?' The director answers: "One-third of them are Communist, one-third Socialist, and the rest belong to several small parties.' The Fascist's face turned livid. 'What?" he cries, 'And how many of them are Fascist?'  The director reassures him quickly: "All of them, Your Excellency, all of them.'"

Luigi Barzini, The Italians, 1965, pp. 225-226.

I shall simply list a bunch of characteristics associated with fascism and see how YKW (He Of Whom We Cannot Speak) fits as of now, an ongoing situation as it were.  So my list would include extreme nationalism, militarism, racism, sexism (and homophobia), left-right populism ultimately going right, mixed relations with organized religion, building infrastructure, control of arts, megalomania, dictatorship, and suppression of human rights.

1. Extreme nationalism.  YKW seems to fit the bill here. Totally.

2. Militarism.  It would seem that he does here too, proposing a $54 billion increase in the military budget even as he proposes slashing most other parts of the budget to the point of eliminating completely some agencies.  OTOH, he claimed to be anti-Iraq war (although he supported it initially) and campaigned on how he would pull US out of Middle East conflicts. So far looks  like he is going the other way, sending more troops to Syria, Iraq, and Afghanistan, if not yet going off the deep end, although making loud noises towards North Korea, and China, if not Russia.  Also, OTOH, he has never served in the military personally, indeed got out of Vietnam War service due to an obviously phony claim about some foot spur that just disappeared conveniently.  He does not himself seem into wearing military uniforms and strutting about like Mussolini and some others have done.  But he has also  appointed more generals to high positions in his administration than we have ever seen in US history, and weirdly enough many of us are counting on them to be Voices Of Reason in this completely wacko and incompetent administration.

3. Racism.  His dad was arrested in a KKK demo back in the 20s or thereabouts, and among Trump's first business activities were managing housing complexes that were convicted of racial discrimination, not just once but twice.  His whole history stinks of racism, although it looks like he is more anti-Hispanic and Mexican in particular than anti-black, although the family KKK history is certainly the latter.  I mean he does keep Ben Carson around a few other friendly African-Americans, but Hispanics of any sort are very hard to find in this admin, and his anti-Mexican screeds, attitudes, and policies seem deep-died, with his ridiculous campaign to "build that wall" one of the few things he seems to be really set on, although he may yet not be able to get funding for it from Congress.

4. Sexism (and Homphobia).  Well, quite aside from all his notorious "grab..." quotes and wandering through the dressing rooms to see scantily clad teenage girls during some of the events he has hosted over the years, and despite some token stuff about child care that favored daughter Ivanka managed to talk him into (not likely to go anywhere in current Congress), he seems to be playing into current views on Planned Parenthood  and so on of the current GOP.  On LGBTQ he has played a bit of a mixed game, again with perhaps Ivanka and Jared trying to hold him back as well as the fact that obviously all those years in NYC and show biz has left him with many gay acquaintances, he seems in the end to  siding with the traditional GOP conservative view, even if  the Log Cabin Republicans supposedly find some things to like about him.  Anyway, very sexist, although not pushing a fully classic kinder, kirche, kuche line (a kkk rather than a KKK).

5. Left-Right Populism Ultimately Going Right.  Yes, this is certainly a forte of his, dragging those poor sucker coal miners to stand with him while he trashes environmental policies when we all know that there will be no new coal jobs in the US probably ever simply due to market forces, definitely reinforced by his anti-enviro policies, especially not slowing fracking, which is what  has given us cheap natural gas, which has become the death knell for the coal industry.

The other aspect of this is of course the trade issue, and certainly on this we have portions of the old midwest manufacturing working class that he is appealing to and has made moves to please, at least with his withdrawal from TPP, even if  other moves to protectionism are floundering in his ongoing incompetence.  Will there be a major restructuring of NAFTA?  Will there be a trade war with China?  I don't know, but increasingly it looks like probably not, but who knows?

As for Going Right, well, traditional fascists tended to appoint their party hacks who came up through the ranks with lower class backgrounds (like Mussolini and Hitler themselves) and their cronies, who would go all corrupt once they got government positions.  But with spoiled brat YKW who would be wealthier by all reports if he had simply reinvested and sat on his inheritance, we have the biggest flood of full out billionaires into top positions we have ever seen, with many of them apparently amazingly incompetent on top of all their money (see DeVos).  Libertarians like to argue that the fascists and Nazis were socialists because, well, the fascists did nationalize some industries, and "Nazi" is short for "National Socialists," although the Nazis did not nationalize companies and were quick to make friends of big business such as I.G.Farben, even if big business had not been among their original supporters, who were,  well, little guy populist suckers, just like those supporting YKW.

5.  Mixed Relations With Organized Religion. For classical fascists this has largely meant the Roman Catholic Church, although in Germany Hitler had a stronger base in the Protestant rural North than in the Catholic South, even though his initial base was uber-conservative and Catholic Bavaria.  Mussolini was initially anti-Church, and the Nazis long pushed their pseudo-Wagnerian neo-paganism, even as Wagner himself ultimately went with the Church in his final opera, Parsifal. Certainly the softer fascists in Spain and Latin America have tended to side up with reactionary elements in the R.C. Church, and in the end Mussolini made peace with the Church in the 1929 Lateran treaties, aka "Concordat," that settled relations between the Church and the Italian state, a deal that still holds today (Barzini credits Mussolini with this, saying it is the one clearly good thing he did).

This is harder to call because Protestanism is more important in the US than Catholicism.  Like the old fascists it looks like YKW is really not very religious, if not openly anti-religious in the way Mussolini was for awhile.  But he has made peace with the US conservative religious establishment, with so-called Evangelicals among his strongest supporters in the election, as well as conservative elements in the Catholic Church, as well as Orthodox Jews.  He has clearly set himself up against the liberal Pope Francis, with his alt-right de facto fascist adviser, Steve Bannon, openly involved in an effort to combat the current pope.  So, he has allied himself pretty firmly with traditional religion.  No wonky neo-paganism for him.

6. Building Infrastructure.  Ah yes, a classic fascist fixation given their fixation on Ancient Rome, which did a good job with infrastructure.  On this YKW has talked a lot, although the rumbles have involved silly stuff such as tax breaks to private companies to privatize infrastructure.  Given his massive incompetence, for better or worse his talk about a big infrastructure program looks like it is going nowhere.  This is one area where maybe we would wish that he was more of a "good fascist" than he is.  I mean, Mussolini did make those trains run on time, more or less. Looks like YKW could care less.

7.  Control of Arts. Classical fascists would ban certain types of art and push certain other types that they viewed as building up the nation and state.  YKW has proposed simply eliminating funding for NEA, no more Big Bird, so it does not look like he is out to Control Art, although clearly he simply does not care about it all, major vulgarian that he is.

8. Megalomania.  Yep, like nationalism, this one YKW has in spades.  It  is All About Him.

9.  Dictatorship.  Thankfully this is  one area where he has run into  a brick wall thanks to the US constitution and judicial system, at least so far.  He obviously has fascistic tendencies and would really like to just be able to order people to do what he wants and have them do it. After all, this is a CEO view of the world.  The real question will be if he ends up pulling a Reichstag Fire routine and uses some incident, cooked up or  not, to declare martial law, and if he does so, will he get away with it. If he does, well, then we shall have the full monty fascism here in the US.  If he is held back by the courts, his incompetence, or whatever, well, for all his tendencies, we shall fortunately hold back from full out fascism.

10.. Suppression Of Human Rights.  This is obviously tied to the previous one as the really serious suppression of human rights that we saw in classical  fascism with death camps and all that came with dictatorship.  But even without that his racist-motivated anti-immigrant push has been one of the few things that he has seemed really into pursuing vigorously, even as he has run into road blocks from the courts on some of  his initiatives. But in terms of horrifying episodes happening since he became president, the worst have involved deportations and people being held trying to enter the country, including people with a full right to do  so.  YKW may not (yet) be a full blown fascist, but in this particular area his fascistic tendencies have probably shown their fullest and most egregoius manifestations.  Let us hope that it does not get worse.

Barkley Rosser

Addendum:

One point I missed is that of the economic policy labeled "corporatism," which both Mussolini and Hitler officially subscribed to.  Aspects of it were described above in the part about "left-right," but it should be commented on.  While both of them came from anti-clerical initial positions, corporatism as a term and a concept came from the Roman Catholic Church in the late 19th century in reaction to  the socialist movements of the time.  The idea was that the class conflict was to be overcome or subsumed in a national unity that would involve state-private interaction within the moral codes of the Church.  This implied that some bones should be thrown to  the workers, underlying the "left" part of the appeal, although in practice under fascism unions were suppressed as the state claimed to speak for the workers.  There was also much state interference in the private  sector, often to support national leading companies, but in some cases more directly,with Mussolini nationalizing some industries and Hitler through Hjalmar Schacht instituting command central planning, although firms remained privately owned, hence formally capitalist.


Another area where YKW does not resemble these  earlier leaders is that he is personally wealthy and out to add to that in office in violation of the emoluments clause of the constitution and in a way unprecedented in US history.  Thus he resembles more the recent buffoonish Italian leader, Silvio Berlusconi more  than the officially poor Mussolini and Hitler, even if they did have lavish lifestyles while in power.

 -- via my feedly newsfeed

EPI: False choice for workers—Flexibility or overtime pay [feedly]

False choice for workers—Flexibility or overtime pay
http://www.epi.org/publication/false-choice-for-workers-flexibility-or-overtime-pay/

The Working Families Flexibility Act (H.R. 1180), introduced February 16, 2017, by Rep. Martha Roby (R-Ala.), would further erode overtime protections for American workers. Millions of workers are working overtime but are not getting paid for it.1 This is, in part, the result of outdated overtime rules governing workers' eligibility for overtime pay. The erosion of overtime protections has led to workers earning less money while working longer hours, and has created a generally overworked middle class. The way to address this issue is to strengthen overtime protections—not, as H.R. 1180 does, create a new employer right to avoid paying workers overtime.

Background

The Fair Labor Standards Act (FLSA) requires employers to pay certain employees time-and-a-half (or 1.5 times) their regular pay rate for each hour of work per week beyond 40 hours. For nearly 80 years, this system has struck a successful balance by giving employers a way to get work done at a fair price while protecting employees' time with their families. Most hourly workers are guaranteed the right to overtime pay, while salaried workers' eligibility is based on their pay and the nature of their duties. Most salaried workers who earn less than $455 per week ($23,660 annually) are automatically eligible for overtime pay, regardless of their job duties. Salaried workers who earn $455 per week or more may be exempt from guaranteed overtime if their job duties fall into one of three categories: professional, administrative, or executive. The duties associated with these categories involve supervisory responsibilities or a high degree of control over their time and tasks because these exemptions from guaranteed overtime were intended to apply to only a small segment of workers who perform relatively high-level work with a salary that reflects this.

However, the salary threshold has been updated only once since the 1970s—in 2004, when it was set too low. As a result, the share of the salaried workforce that earns less than the threshold has shrunk significantly. Consider that in 1979 nearly 12 million salaried workers had overtime protections. But today, with a 50 percent larger workforce, only 3.5 million salaried workers are automatically protected.2 Workers who have lost overtime protection based on an outdated salary threshold have lost not only the right to be paid time-and-a-half for their overtime—they have lost the right to be paid for it at all. And now that overtime hours do not cost employers extra money, they are more likely to require workers to work longer hours. No wonder so many workers feel that they need "flexibility" to balance family responsibilities. Employers have no incentive not to require those workers to work extra hours.

Obama-era rule

The deterioration of overtime protections led to the promulgation of a Department of Labor rule to restore the salary threshold to a meaningful level. The rule—scheduled to take effect on December 1, 2016, but blocked by an injunction that is on appeal in the U.S. Court of Appeals for the Fifth Circuit—raised the threshold from $455 to $913 per week (or from $23,660 to $47,476 for a year-round worker). The rule would directly benefit a wide range of workers including 6.4 million women and 4.2 million parents.3

Working Families Flexibility Act

The Working Families Flexibility Act would amend the FLSA to allow private-sector employers to "compensate" hourly workers with compensatory time off in lieu of overtime pay. Contrary to proponents' claims, the bill does not create employee rights, it takes them away. It does create a new employer right—the right to delay paying any wages for overtime work for as long as 13 months. The legislation forces workers to compromise their paychecks for the possibility—but not the guarantee—that they will get time off from work when they need it.

Congressional Republicans have introduced versions of this legislation for the past 20 years:

• H.R. 1, the Working Families Flexibility Act of 1997, which sought to amend the FLSA to extend comp time to the private sector.
• H.R. 1119, the Family Time Flexibility Act, which proposed extending comp time to the private sector in 2003.
• H.R. 6025, the Family Friendly Workplace Act, a nearly identical comp-time bill introduced in 2008.
• H.R. 933, a reintroduction of the Family Friendly Workplace Act in 2009.

Despite the marketing, none of these bills would have resulted in greater flexibility for workers. Instead, they would have simply allowed employers to avoid paying overtime. Workers depend on the wage and overtime protections in the FLSA. They should not have to sacrifice earned wages to have flexibility.

FLSA already provides flexibility

The FLSA is the original family-friendly law. It permits a wide range of flexible work schedules. For example, under current law, public and private employers may choose to allow their workers to vary the start or end of their workday, including on an ad-hoc basis. Employers may also choose to permit employees to schedule four 10-hour days with one workday off, or arrange nine-hour workdays with a day off every other week. All of these arrangements are permissible under the FLSA. Employers can and should take advantage of the flexibility the current law already provides.

Perhaps most revealing, under the FLSA, an employer may pay an employee for overtime worked in a given week and then, to reward the employee for putting in extra time, may schedule future unpaid time off. The result would be that the total annual hours worked and income received would be the same as under Rep. Roby's comp time in lieu of overtime proposal, but workers would not have to wait for up to 13 months to be paid for the overtime hours. In other words, everything the comp time bill purports to provide for workers is actually available under the FLSA.

 The "flexible" arrangements of the comp time bill could be offered today, with no new employer rights, duties, paperwork, recordkeeping, causes of action, or oversight. 

The bill will reduce worker income

The Working Families Flexibility Act would result in less money in employees' paychecks, even when they do work overtime. Many employees rely on overtime pay to earn enough money to make ends meet every month—but this bill would allow employers to avoid paying overtime premiums when employees work extra hours, by giving them "comp time" to bank for future use instead. This means employees will still be working longer hours, but they will be receiving less in their paychecks at the time they work the longer hours. They will essentially be loaning their employer their overtime pay (at no interest) for as long as 13 months.

Under the legislation, an employee may decline to accept comp time in lieu of overtime. It follows that employers will assign overtime preferentially to those who accept comp time, thereby depriving the workers who need the extra cash of opportunities for overtime work. So, not only will the employees who receive comp time instead of overtime pay earn less, so will the employees who refuse comp time and insist on being paid overtime pay.

The bill would give employers—not employees—the right to control comp time

Nothing in the bill guarantees a worker that she will be able to use accrued comp time hours when she needs to access them. Under the legislation, an employer may deny a worker's request for comp time if it "unduly disrupts the operations of the employer." This broad standard for denying overtime provides employers with enormous control over employees' access to comp time.

Furthermore, because the bill provides inadequate penalties, there is little incentive for unscrupulous employers to provide meaningful access to comp time. (An employer is liable for only the wages owed as well as liquidated damages reduced by each hour of comp time used by the employee.) Instead of providing meaningful access to comp time, employers could simply assert undue disruption to their operations in response to a request for a comp time hour and deny a worker the requested time off and continue to avoid paying overtime wages. The bill does not require employers to pay employees interest on their comp time pay, which employees would receive if they put their overtime pay in the bank, so the employer gets to keep any interest earned on the wages held as well.

The bill would lead to unpredictable schedules for workers

• The comp time bill undermines the fundamental goal of the FLSA's overtime rules: to discourage employers from overworking employees by making it more expensive for them to do so.
• Allowing employers to give "comp time" cheapens the use of overtime since employers don't have to pay out overtime premiums when the work is actually done.
   Because this bill makes overtime work cheaper for the employer, employers will be more likely to schedule mandatory overtime more often. 
• The employer, not the employee, has the final say over when comp time can be used. Employers can deny an employee's request to use comp time hours if they feel it would "unduly disrupt" the employer's business. And employees are required to make a request in advance without any leeway in emergency situations. Accordingly, many employees will work a lot of overtime and find their leave banks full at the end of the year. If workers don't manage to use at least two-thirds of their banked comp time, they will actually have worked more hours during the year, not less.

Why comp time won't work in the private sector

Proponents of comp time in lieu of overtime pay argue that public-sector employees receive this benefit and it should be extended to private-sector workers. However, there is little information available on the use of and experience with comp time in state and local governments, making it impossible to determine whether workers are able to meaningfully access comp time under the system. Furthermore, there are important differences between the public-sector workforce and the private-sector workforce that make comp time riskier for private-sector workers. Public-sector workers can't be fired except for good cause, they have administrative appeal rights, and they have significantly higher rates of union representation. These considerations make them more likely to challenge an employer's decision denying them the use of comp time and less likely to be coerced into agreeing to comp time in lieu of overtime pay. And, while nothing in this legislation provides any guarantee that a worker will ever be able to take the comp time that she accrues when she needs it, private-sector workers also face a real danger of losing comp time accrued in the event of a business failure. According to the Small Business Administration, in 2013, over 400,000 small businesses closed.4 Nothing in the legislation provides workers whose employer goes out of business with a guarantee to receive payment for accrued comp time. The employer is not required to put sufficient money in escrow or to buy a bond to guarantee payment in case of closure or bankruptcy.

Conclusion

At no risk to the employee, the FLSA already allows an employer to grant time off to employees who work overtime. H.R. 1180 adds nothing but delay and risk to the employees' right to receive extra compensation when they work more than 40 hours in a week.

Endnotes

1. Ross Eisenbrey and Lawrence Mishel, The New Overtime Salary Threshold Would Directly Benefit 13.5 Million Workers, Economic Policy Institute report, August 2015.

2. Ross Eisenbrey, Testimony before the United States Senate Committee on Small Business and Entrepreneurship, May 11, 2016. Current statistics referred to are as of 2014.

3. Ross Eisenbrey and Will Kimball, The New Overtime Rule Will Directly Benefit 12.5 Million Working People, Economic Policy Institute report, May 2016.

4. U.S. Small Business Administration Office of Advocacy, "Frequently Asked Questions," June 2016.

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House ACA Repeal Bill Would Be Largest Robin-Hood-in-Reverse Transfer in Modern U.S. History [feedly]

House ACA Repeal Bill Would Be Largest Robin-Hood-in-Reverse Transfer in Modern U.S. History
http://www.cbpp.org/blog/house-aca-repeal-bill-would-be-largest-robin-hood-in-reverse-transfer-in-modern-us-history

The Trump Administration and House Republicans are reportedly discussing a deal to revive the House GOP leadership's Affordable Care Act (ACA) repeal bill — the American Health Care Act.|

 -- via my feedly newsfeed

Stumblin and Mumblin: Wages and Productivity

Would higher wages boost economic growth? They might, if the marginal propensity to spend out of wages is higher than that out of profits. However, Ben Chu suggests a different mechanism – that higher wages might stimulate growth via the supply-side rather than demand-side:

Perhaps wage increases will prompt higher productivity in firms that employ low-wage labour. Perhaps, in order to protect their profit margins, managements will be spurred into increasing the efficiency of their operations. Perhaps they will invest in more capital equipment to enable their workforce to produce more per hour of their time. Think of a hand car wash installing automatic equipment but retaining the same amount of staff, retraining them to operate the new machinery, and doing more business. This would make minimum wage increases positive for productivity.

Those words "doing more business" are important. Higher wages alone might merely induce capital-labour substitution, leading to unemployment rather than higher output. Which is why Ben is right to say higher wages must be accompanied by fiscal stimulus.

In this, he's echoing Verdoorn's law. This says that faster GDP growth is usually accompanied by faster productivity growth.

I'd like to believe this. But I'm not sure I do. For one thing, whilst the Bank of England research Ben cites finds that higher wages can lead to higher productivity, this is the case for only a minority of industries. And for another, Verdoorn's law hasn't been so strong recently. My chart shows that whilst there was a massive correlation between GDP growth and productivity from the 50s to the 80s, it hasn't been so strong lately; productivity has been weak even relative to GDP.

This draws our attention to the possibility that there are several things that might throw sand into the wheels of the mechanism whereby higher wages might raise productivity, for example:

 - Uncertainty. If the car wash business is to invest in a new machine, it must be confident that the boost to demand will last. This requires something more than just looser policy – be it a looser inflation target, commitment to future easing or whatever.

 - Management quality. Do bosses have the skill to introduce new technology well? Bloom and Van Reenen have shown (pdf) that there's a "long tail of badly managed firms" – but it is in these where productivity is lowest.

 - The fear of future competition. I suspect that one reason why capital spending has been low is that firms fear that their investments will be undercut by future, cheaper ones by their rivals: it's the second mouse that gets the cheese. It's not clear that fiscal stimulus will allay these fears.

 - Credit constraints. Another reason for low investment is that firms don't trust banks to keep credit lines open in future. Again, fiscal policy doesn't address this.

 - Weak profits. The hand car wash is probably only just getting by, and so lacks the means and motive to buy fancy kit. The care home sector, for example, is already teetering: why should it respond to higher minimum wages by increasing capital spending?

Now, I don't say this to dismiss Ben's idea entirely. Given that the Phillips curve is, to say the least, ill-defined in the UK, the cost of experimenting with fiscal loosening is perhaps low. And even if actual productive capacity isn't terribly cyclical, estimates of it might be - and they are worth having even if we don't get a renaissance in productivity. Erring on the side of loose policy seems to me to be better than erring on the side of tight.

The issue here is much bigger than it might seem. The question is: is capitalism cooperative or conflictual? Are the interests of workers compatible with those of capitalists or not? It's this that divides social democrats from Marxists. Historically, the answer has been sometimes yes and sometimes no. I'm not sure which it is today, but I'd like to find out so I'd like to see Ben's suggestion tested.

--

John Case
Harpers Ferry, WV

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EPI: Trump administration trade policy review misses the big picture [feedly]

Trump administration trade policy review misses the big picture
http://www.epi.org/blog/trump-administration-trade-policy-review-misses-the-big-picture/

The Trump administration announced last week that it would sign two executive actions to launch a review of U.S. trade policy. A review of trade policy and its potential to harm U.S. workers is welcome and long overdue. However, the specifics of the review offered by President Trump mean that it is likely to fail to provide any help to American workers, in part because it asks the wrong questions.

The president's first order requires Secretary of Commerce Wilbur Ross and White House Trade Council to "identify every form of trade abuse and every nonreciprocal practice that contributes to the U.S. trade deficit," according to the commerce secretary. . The report is to be completed within 90 days, with an analysis of the detailed cause of the deficit "by country and major product." But the trade deficit is not a "product by product" or a "country by country" problem. We know what it is caused by and what should be done about it.

The trade deficit is not a bilateral problem between the United States and individual countries. The U.S. trade deficit is a result of global trade imbalances. There are ten to twenty countries that have developed large, persistent, structural trade surpluses that are distorting trade flows worldwide. The top ten surplus countries are shown in Figure 1 below. In 2015, these countries, led by China, Germany, Japan, Korea, and Taiwan, had a collective trade surplus of approximately $1.5 trillion. (The figures reported are current account balances, the broadest measure of trade in goods, services and income.)[1] The United States' current account deficit of $463 billion in 2015 accounted for less than one third of the total surplus accumulated by the big surplus traders. Other countries have also suffered from persistent, structural trade deficits, job losses, and downward pressure on wages, including Great Britain, Brazil, Australia, and Mexico. Attacking the root causes of global trade imbalances will benefit all deficit countries, and not just the United States.

It is also important to note that Mexico is not a country that has maintained large, global trade surpluses. In fact, it has had significant current account deficits in every year since 2000. This analysis shows why bilateral trade data are a poor guide to trade policy development. Measures of each country's overall trade balance with the world provide a much more accurate and effective basis for identifying global distortions in trade flows. ­

The causes of global trade imbalances are also well known. While dumping, subsidies, and massive amounts of excess production capacity in some industries (e.g. steel, aluminum) and some countries (e.g. China, Korea, Japan) are an important cause of the problem, the single most important cause is currency undervaluation. Countries with larger, persistent trade surpluses have undervalued currencies. Rebalancing of major currencies, last achieved following the 1985 Plaza Accord, is the single most effective way to rebalance global trade flows. Such an agreement is needed to increase (realign) the exchange rates of the major surplus countries shown in Figure A, relative to the U.S. dollar, which is heavily overvalued.

FIGURE A

Countries with the 10 largest current account balances in 2015 (billions of US dollars)  

Country	Current account balance
China	600.2
Germany	284.224
Japan	135.58
Korea	105.871
Taiwan	76.165
Switzerland	75.822
Russia	69
Netherlands	64.417
Singapore	57.922
Italy	39.907

 

​ChartData

Note: China's trade balance is reported in place of current account balance due to reported errors in China's broader goods and services trade flows.

Source: International Monetary Fund, World Economic Outlook Database, October 2016

The president's executive orders on trade also "reflected a marked softening" from the heated trade rhetoric used by Trump on the campaign trail in 2016. The announcement also seems to reflect a search for small, specific, trade actions that could yield "tweetable" trade victories. For example, the president's second order calls for "enhanced collection" of anti-dumping and countervailing duties, to address the "under-collection" of such duties. White House National Trade Council Director Peter Navarro said that $2.8 billion in such duties were uncollected between 2001 and the end of 2016, or approximately $175 million per year. When compared with the U.S. goods trade deficit, which reached $749.9 billion in 2017, such duty "under-collections," were small potatoes indeed. While recouping these "missing" duties would be good for injured workers and companies, and would create opportunities for regular announcements of trade "victories," they will have no significant impact on the overall U.S. balance nor on trade related job losses.

Small victories on unfair trade, while welcome, will not bring about the currency realignments needed to rebalance trade flows. Voters, Congress, and manufacturers should settle for nothing less.

---

[1] Data on goods trade are reported for China due to problems with Chinese data collection.

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Globalization and the End of the Labor Aristocracy, Part 1 [feedly]

Taking dogma to new heights....please spare us Part 2

Globalization and the End of the Labor Aristocracy, Part 1
http://triplecrisis.com/globalization-and-the-end-of-the-labor-aristocracy-part-1/

This is part one of a four-part article, first published in the March/April 2017 special "Costs of Empire" issue of Dollars & Sense magazine. Subsequent parts will appear on Triple Crisis over the next three weeks.

Economist and Triple Crisis contributor Jayati Ghosh argues that imperialism has not disappeared, but changed shape. The direct military conquest and control of economic territory by the great powers has given way (at least some of the time) to control through multilateral agreements and international institutions. Economic territory may still mean the seizure of land, mines, or oil fields—but it also may mean privatization of public assets and services, or the extension of intellectual property rights to new realms. Where the "labor aristocracy" of the imperialist countries once shared in the bounty of empire, the new incarnation of empire as "globalization" has helped grind away the incomes and status they once enjoyed.

Jayati Ghosh

Twenty-first century imperialism has changed its form. In the 19^th century and the first half of the 20^th century, it was explicitly related to colonial control; in the second half of the 20^th century it relied on a combination of geopolitical and economic control deriving also from the clear dominance of the United States as the global hegemon and leader of the capitalist world dealing with the potential threat from the Communist world. It now relies more and more on an international legal and regulatory architecture—fortified by various multilateral and bilateral agreements—to establish the power of capital over labor. This has involved a "grand bargain," no less potent for being implicit, between different segments of capital. Capitalist firms in the developing world gained some market access (typically intermediated by multinational capital) and, in return, large capital in highly developed countries got much greater protection and monopoly power, through tighter enforcement of intellectual property rights and greater investment protections.

These measures dramatically increased the bargaining power of capital relative to labor, globally and in every country. In the high-income countries, this eliminated the "labor aristocracy" first theorized by the German Marxist theorist Karl Kautsky in the early 20^thcentury. The concept of the labor aristocracy derived from the idea that the developed capitalist countries, or the "core" of global capitalism, could extract superprofits from impoverished workers in the less developed "periphery." These surpluses could be used to reward workers in the core, relative to those in the periphery, and thereby achieve greater social and political stability in the core countries. This enabled northern capitalism to look like a win-win economic system for capital and labor (in the United States, labor relations between the late 1940s and the 1970s, for example, were widely termed a "capital-labor accord"). Today, the increased bargaining power of capital and the elimination of the labor aristocracy has delegitimated the capitalist system in the rich countries of the global North.

Increasing inequality, the decline in workers' incomes, the decline or absence of social protections, the rise of material insecurity, and a growing alienation from government have come to characterise societies in both developed and developing worlds. These sources of grievance have found political expression in a series of unexpected electoral outcomes (including the "Brexit" vote in the UK and the election of Trump in the United States). The decline of the labor aristocracy—really, its near collapse—has massive implications, as it undermines the social contract that made global capitalism so successful in the previous era. It was the very foundation of political stability and social cohesion within advanced capitalist countries, which is now breaking down, and will continue to break down without a drastic restructuring of the social and economic order. The political response to this decline has been expressed primarily in the rise of right-wing, xenophobic, sectarian, and reactionary political tendencies.

21^st Century Imperialism

The early 21^st century has been a weird time for imperialism. On the one hand, the phase of "hyper-imperialism"—with the United States as the sole capitalist superpower, free to use almost the entire world as its happy hunting ground—is over. Instead, the United States looks significantly weaker both economically and politically, and there is less willingness on the part of other countries (including former and current allies, as well as those that may eventually become rival powers) to accept its writ unconditionally. On the other hand, the imperial overreach that was so evident in the Gulf Wars and sundry other interventions, in the Middle East and around the world, continues despite the decreasing returns from such interventions. This continued through the Obama presidency, and it is still an open question whether the Trump presidency will lead to a dramatic reduction of this overreach ("isolationism") or merely a change in its direction.

The latter point is important, because there is little domestic political appetite in the United States for such imperial adventures, due to the high costs in terms of both government spending and the loss of lives of U.S. soldiers. The slogans that recently resonated with the U.S. electorate, such as that of "making America great again" were in that sense somewhat self-contradictory—looking towards an imagined past in which the American Dream could be fulfilled relatively easily (at least for some), without recognizing that this was predicated upon the country's global hegemony and far-flung empire.

The global context of imperialism is a complex one, in which the contours shift constantly. Recent political changes in various countries of the North have meant that global strategic alliances are also much more fluid than at any time over the past half century. The most talked-about current examples are the changing attitude of the Trump administration towards the United States' traditional enemy, Russia; and the complicated international politics emerging in Europe, with the Brexit vote and the emergence of right-wing political forces in a number of other European countries. But it is also evident in other parts of the world, notably in China, where traditional friends and foes are no longer so easily demarcated. Yet there is another sense in which the fundamentals of the imperialist process have not changed, even as the forms in which they are expressed are altered.

Defining imperialism broadly, as Lenin did—as the complex intermingling of economic and political interests, related to the efforts of large capital to control economic territory—it's clear that imperialism has not really declined at all. Rather, it has changed in form over the past half century, especially when we embrace a more expansive notion of what constitutes "economic territory." Economic territory includes the more obvious forms such as land and natural resources, as well as labor. These are all still hugely contested: The wars for oil in the Middle East, the continuing attempts at land grabs in Africa, and the struggle over the fruits of extraction of natural resources in parts of Latin America and Asia all testify to this.

But the struggle over economic territory also encompasses the search for and effort to control new markets—defined by both physical location and type of economic process. Understanding territory in this way helps us understand how imperialism is still very much alive and kicking, even though some of the more classic features (such as direct colonial control and annexations) are less in evidence.

One of the key aspects of recent capitalist dynamism has been its ability to create new forms of economic territory, bring them within the realm of capitalist economic relations, and therefore also subject them to imperialist control. Two forms of economic territory that are increasingly subject to capitalist organization and imperialist penetration today are 1) basic amenities and social services (earlier seen as the sole preserve of public provision) and 2) the generation and distribution of knowledge.

A major feature of our times is the privatization of areas that, until recently, were generally accepted as public responsibilities. Basic amenities like electricity, water, and transportation infrastructure, and social services like health, sanitation, and education all fall into this category. Of course, the fact that these were seen as public duties does not mean that they were always fulfilled. Indeed, expanding public provision and access to high-quality public infrastructure and social services has only come about historically as the result of prolonged mass struggles. And issues of inequality in access have always existed. Nevertheless, the fact that provision is no longer necessarily in the public domain, and that private provision is increasingly seen as the norm, has opened up huge new markets for potentially profit-making activity. This has been a crucial way of maintaining demand, given the saturation of markets in many mature economies, and the inadequate growth of markets in poorer societies.

Opening up such markets has occurred through a combination of inadequate public provision and changes in economic policy to encourage private investment. The expansion of the global bottled water industry, for example, is partly a result of the failure of adequate public delivery of potable water. Meanwhile, global institutions—including formal organizations such as the World Bank, the International Monetary Fund (IMF), and the World Trade Organization (WTO), as well as more informal bodies such as the World Economic Forum—have actively encouraged private investment in formerly public sectors. This is a more complicated expression of the imperialistic drive for control over economic territory than the direct annexation of geographic territory, but that does not make it any less consequential.

Another new form of economic territory, increasingly subject to imperialist penetration, relates to knowledge generation and dissemination. The privatization of knowledge and its concentration in fewer and fewer hands—especially through the creation and enforcement of new "intellectual property rights"—have become significant barriers to technology transfer and social recognition of traditional knowledge. This is evident in the case of access to medicines, even essential and life-saving drugs. Patents reward multinational companies, allowing them to monopolize production, set high prices, or demand high royalties. Similarly, control over seed patents, overwhelming held by multinational agribusinesses, have enabled monopoly control over crucial technologies for food cultivation across the world, even in the poorest societies. The cases of medicine and food are comparatively well known and highly controversial, but much the same is true for industrial technologies, as well as knowledge for mitigating and adapting to adverse environmental changes (themselves resulting from the production systems created by global capitalism).

It's not just that national and international institutional structures that should provide checks and balances to the privatization of knowledge are more fragile and less effective than they used to be. Rather, it's that they are actively working in the opposite direction. The numerous "trade agreements" that have been signed across the world in recent years have been much less about trade liberalization—already so extensive that there is little scope for further opening up in most sectors—and much more about protecting investment and strengthening monopolies generated by intellectual property rights.

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I see no other option for Senate D’s but to filibuster Gorsuch [feedly]

I see no other option for Senate D's but to filibuster Gorsuch
http://jaredbernsteinblog.com/i-see-no-other-option-for-senate-ds-but-to-filibuster-gorsuch/

In the course of noodling over whether the Senate D's should filibuster the Gorsuch nomination, I just can't see why not.

I don't say that lightly. While I've been a critical observer of filibuster abuse for a while (so I can't say I'd miss it), I worry about a less deliberative Senate. But given how severely trust, compromise, and thoughtfulness have devolved, the deliberation train left the station long ago, with Judge Merrick Garland tied to the tracks. At this point, I see no clear logic that points D's toward cooperation.

A few facts/assumptions to frame the discussion. For what follows to make sense, these must be at least broadly correct.

1) D's believe Judge Gorsuch is too conservative and threatens to overturn established case law in areas about which they care deeply, like abortion and worker rights. I think they're right.

2) D's have the votes to filibuster and thus block the nomination.

3) Senate R's are telling the truth when say they that if D's filibuster Gorsuch's nomination, even though they'd rather not, they will "go nuclear" (change the rules so that only a majority vote is required). I believe them.

Based on those assumptions, let's see what paths lead D's to the logic of filibuster vs. cooperation.

The goal of the D's is to have the R's nominate a justice where #1 one does not hold, i.e., a justice who they might not consider too conservative. In that case, they have two options: filibuster or cooperate with conditions.

They can filibuster Gorsuch et al until R's put up no Morsuch candidates. But based on #3, that won't work. If they filibuster, R's go nuclear and Gorsuch is on the court.

So they should cooperate, right, and give the R's the votes they need to get to 60? No, because that too lands them with Gorsuch.

What if they decide a second-best option is to cooperate with conditions? Give the R's Gorsuch (don't filibuster) based on a deal that the next time there's a Supreme Court opening—which might not be too far away—the R's will put up a less conservative candidate. This is the tactic the WaPo editorial board suggests today: "…postponing the discussion over abolishing the filibuster until Mr. Trump's next nomination, if any, would put Democrats in a stronger position and at least might pressure the president to select a more reasonable nominee next time than he otherwise might."

This strikes me as a highly risky strategy. First, if the R's are still in the majority next time there's an opening, the D's would have to trust Trump and the R's to meet the conditions of this second-best deal. There's no good reason to do so. Once R's assert, as they have, that they'll go nuclear if they don't get their way, the D's would be reckless and irresponsible not to believe them, either this time or next time.

Second, what if the Senate majority flips by the time of next opening? Then D's have given away a too conservative seat to Gorsuch, but, as part of the deal, will—assuming they stick to the deal—have to put up a moderate-at-best nominee with whom R's are OK. That's a bad deal versus trying to neutralize Gorsuch with a liberal counterpart, passed with a simple D majority.

So the D's best strategy is not to cooperate, i.e., to filibuster.

The problem is, once R's invoke #3, there are no reliable benefits to the D's from cooperating. Even if they could trust the R's to put up a more moderate nominee next time, unless they're convinced they'll never be back in the majority, they end up with a too-conservative court relative to filibustering and invoking the nuclear option that they will then take advantage of if their time comes. It may sound counterintuitive, but once Senate leader McConnell brought out the nuke, a move that showed without doubt that R's will do whatever it takes to move the court to the right, I see no obvious benefit to D's of not forcing him to use it.

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