Sunday, August 20, 2017
More Charities Cancel Fund-Raisers at Trump’s Mar-a-Lago Club
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More Charities Cancel Fund-Raisers at Trump's Mar-a-Lago Club // NYT > Business
https://mobile.nytimes.com/2017/08/20/us/politics/more-charities-cancel-fund-raisers-at-trumps-mar-a-lago-club.amp.html
An expanding number of organizations that had planned to hold galas at the president's Florida resort are deciding to raise money elsewhere.
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Robots in MIdwest [feedly]
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Robots in MIdwest
// The Big Picture
Brookings: Where are the robots, exactly? One answer—if you read the steady flow of doomy articles online — is that automation is everywhere, not just all over the media but (you would have to conclude) thoroughly infiltrating the economy. In that sense, the trend seems omnipresent even as it spawns a kind of free-floating dread amongst the…
The post Robots in MIdwest appeared first on The Big Picture.
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Saturday, August 19, 2017
Centrism: the problem, not the solution [feedly]
http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2017/08/centrism-the-problem-not-the-solution.html
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There's talk, much of sceptical, of the formation of a new centre party. For me, this misses the point – that centrists are the problem, not the solution.
Owen Jones is bang right to say:
It is the economic order centrists defend that produced the insecurity and stagnation which, in turn, laid the foundations for both the ascendancy of the left and its antithesis, the xenophobic right.
This is true in two senses.
First, centrists contributed to the financial crisis by under-estimating the fragility of the system. They over-estimated market rationality. As Martin Sandbu says, the lie of capitalism is that "market values of financial and other assets accurately reflect the economic value they represent." They also failed to appreciate that top-down managementunconstrained by effective oversight is dangerous: the banking crisis wasn't just a market failure but also an organizational failure.
If that was an error of omission which is clearer with hindsight than it was at the time, centrists' second error is less forgivable: fiscal austerity. The Lib Dems supported this in government, and Labour's centre-right failed to oppose it vigorously enough.
These two errors have had disastrous effects. They have given us a decade of stagnant real wages. Not only is this terrible in itself, but it also led to Brexit. Stagnation bred discontent with the existing order and hence a demand for some sort of change, and also had the effect history told us it would – of increasing antipathy towards immigrants.
In this context, centrists made a third error. With a few exceptions, such as the heroic Jonathan Portes, they failed to make a robust case for immigration: remember Labour's shameful "controls on immigration" mug? This might be no accident. Blaming immigrants for poor public services and low wages helped to deflect blame from where it really lies – with austerity, crisis and capitalist stagnation.
Centrists are right to oppose Brexit. What they don't appreciate, however, is that they themselves helped to create the conditions which led to the vote to leave.
I don't think these were idiosyncratic failures of individual politicians. I suspect instead they arose from three systemic failures of centrism:-
- Insufficient scepticism about capitalism. Centrists have failed to appreciate sufficiently that actually-existing capitalism has led to inequality, rent-seeking and stagnation. New Labour's deference to bosses fuelled their presumption that banks were in good hands and didn't need to be on a tight leash.
- A blindness to the importance of inequalities of power. Centrists take it for granted that elites should be in control, even if they lack the capacity to be so. This left them vulnerable to Vote Leave's slogan, "take back control."
- Excessive deference to the media. Centrists were for years obsessed with a form of "electability" which consisted in accommodating themselves to media lies about austerity and immigration.
In these senses, then, centrists' failure has been a structural one.
Which poses the question: why, then, does centrism seem so appealing?
I suspect the answer lies in the failure to appreciate the distinction between extremism and fanaticism. Centrism's intuitive appeal lies in the tendency to associate it with the virtues of moderation and empiricism.
Such an association, however, is at least partly unwarranted. In failing to appreciate sufficiently the flaws in capitalist hierarchy, centrists are being ideologues more than empiricists.
Trump and the Infrastructure of Fascism [feedly]
http://triplecrisis.com/trump-and-the-infrastructure-of-fascism/
Infrastructure investment: it's that economic policy sweet spot that everyone loves to love.
Fixing bridges, building roads, modernizing airports, improving mass transportation, keeping lead out of our water: nearly everyone can relate to the need for it and can imagine how much better their lives would be with more of it. For years, most people have faced crazy-making delays in traffic, long lines at airports, and have seen pictures of bridges collapsing. And the experts agree. Economists and engineers have warned us about the problem for decades. The most recent report by the American Society of Civil Engineers gave the U.S. a D+ on its infrastructure building and maintenance, which means that, overall, our infrastructure is in critical condition. These civil engineers estimate that over the next 10 years, the U.S. will have about a $1.2 trillion in infrastructure financing shortfall unless something dramatic is done. Studies have confirmed that, properly done, infrastructure investment can generate millions of jobs, create big time saving efficiencies, and keep people safer. These infrastructure shortfalls, fed by years of Republican austerity initiatives at the Federal and State levels, too often aided and abetted by Democratic bankers and other Democratic "deficit hawks," are much in the everyday texture of American life.
On the campaign trail, then-candidate Trump jumped on the bandwagon, decrying America's "Third World" infrastructure and touting his ability to fix it in short order—as "demonstrated" by his "building prowess "in New York City and "around the world." Trump promised to quickly fix the country's decaying infrastructure and generate millions of good paying job with a $1 trillion program that will "Make America Great Again."
That Trump had hit a political "sweet spot" was made clear early on by the number of prominent Democrats and labor leaders who announced not only an interest but real enthusiasm for cooperating with Trump on making a $ 1 trillion building-spree a reality. How could they resist? A true, well designed, well-implemented $1 Trillion government investment in infrastructure is a plan many Democrats, progressive economists and labor leaders had been promoting for years. As Richard Trumpka, President of the AFL-CIOexplained: "During my January meeting with President Trump, we identified a few important areas where compromise seemed possible. On manufacturing, infrastructure and especially trade, we were generally in agreement. Mr. Trump spoke of $1 trillion to rebuild our schools, roads and bridges. He challenged companies to keep jobs in the United States. He promoted 'Buy America.' He promised to renegotiate the North American Free Trade Agreement."
Of course, many Democrats and some economists understood that that Trump's infrastructure "sketch" (he has never come out with a true plan) was quite different from a genuine government-financed $1 trillion plan. From the beginning, Trump's team had made it clear that this was going to be a private-public partnership in which the government would put in significantly less than a trillion dollars—perhaps $200 or $400 billion of corporate tax subsidies over 10 years—as a way to help facilitate a privatization of public assets. Think: turning public roads into privately owned toll roads and public tunnels into privately owned toll tunnels. This type of privatization, critics argued, would end up as a typical crony capitalist gold mine, giving away public assets to well-connected and politically pliant capitalists and maybe, just maybe, getting some improved but very expensive infrastructure and a few jobs in the process. But some Democrats and labor leaders were, perhaps understandably, desperate to engage in wishful thinking and tentative support—given the apparent political pressure from their constituencies.
Still, some observers warned that the dangers of this infrastructure sweet spot were even greater than might at first appear. In an article in Challenge Magazine, "Trumponomics: Should We Just Say No?" I argued that not only is the so-called "infrastructure" program mostly a thinly disguised privatization scam; it was also a sinister gambit to broaden the political support and therefore the power of Trump and Trumpism, a proto-fascist regime and movement, whose goal is to undermine democracy, enrich those wealthy capitalists willing to play along, and divide and conquer the domestic population by sowing racial, gender, religious and national hatred and intolerance.
On August 15, this "infrastructure of fascism" came into clear focus in a bizarre and tragic way. Donald Trump marched into a conference room in Trump Tower on 5th Avenue in Manhattan to hold a hastily arranged press briefing on the first formal unveiling of his "Infrastructure" plan. He had key members of his economic team in tow – most notably, Treasury Secretary Steve Mnuchin, Gary Cohn, head of Trump's National Economic Council—both former Goldman Sachs bankers—and Transportation Secretary Elaine Chao, former Bank of America and Citicorp banker. This announcement of Trump's "infrastructure plan," which took only a few minutes, presented even less of a true infrastructure plan than he had floated during the election campaign. This was simply yet another de-regulation plan dressed up as a plan for infrastructure investment. Effectively, this "executive order" served-up a wish list that would have been compiled by any real estate mogul who doesn't want any government agency or public group to come between him, his building, and his bottom line. In the name of building more useful infrastructure and generating more jobs, Trump's executive order is designed to let developers skirt environmental regulations, and most likely, labor, health, and safety regulations as well. The Executive Order will make it a lot easier to build more Trump towers in flood plains, but do little or nothing for the country's true infrastructure needs.
But this roll-out of a fake infrastructure plan was not the most interesting or surprising thing about this event. It was the press conference Trump held afterwards. Using his Jewish and Asian-American economic team as a photo-op backdrop and the creation of infrastructure and jobs as his bait, Trump took the occasion to assure his neo-fascist, white supremacist and nationalist base that, yes, he was still their man. The reporters at hand, having little interest in infrastructure, wanted to hear a clear statement from Trump decrying the violent and deadly acts committed over the weekend by Nazis and white supremacists in Charlottesville, Va. But instead Trump used his infrastructure plan and his promise of "millions of jobs" to rally his base supporters, all the while demonizing the counter-protestors (calling them violent members of "the alt-left" who were "at least" as responsible for the violence and mayhem as those on the right).
This event, then, tied, in a sinister but clear way, Trump's infrastructure plan with the racist, anti-Semitic, and neo-fascist members of Trump's base movement and linked them, in turn, to the bankers and policy makers like Gary Cohn and Steve Mnuchin who have so much to gain from the tax subsidies and privatization that are the essence of these plans. Gary Cohn was reportedly "furious" about what Trump said and did. But according to reporters, Cohn, like so many Republicans in Congress, will most likely remain quiet, and soldier on, presumably in the hope of getting a big payoff down the road. (Cohn reportedly wants to succeed Janet Yellen as Chair of the Federal Reserve; and his friends have millions to gain from the privatization schemes.)
Trump's response to the Charlottesville violence led numerous members of his two business councils to resign. In resigning from Trump's "Manufacturing Council," AFL-CIO President Rich Trumpka explained in the New York Times: " Unfortunately, with each passing day, it has become clear that President Trump has no intention of following through on his commitments to working people. More worrisome, his actions and rhetoric threaten to leave America worse off and more divided. It is for these reasons that I resigned yesterday from the president's manufacturing council, which the president disbanded today after a string of resignations. To be clear, the council never lived up to its potential for delivering policies that lift up working families."
Let this be a warning to economists, labor leaders, Democratic officials and all progressives fighting for economic and social justice: "progressive-appearing" economic proposals from Trump are likely to be thinly veiled attempts to suck in unsuspecting allies in support of a neo-fascist, authoritarian movement that is increasingly showing its true colors. They are designed, quite clearly, to build support for Trump and his business allies. Don't be fooled, don't be bought off, and be vigilant.
Trade policy and re-negotiating NAFTA are up next. As Robert Kuttner, Editor of The American Prospect told us after his astonishing telephone call from Steve Bannon, Bannon is looking for a "right-left" alliance on trade. We can be sure that, like Trump's "infrastructure plan," this trade alliance will all be in the service of Trump and Trumpism.
Triple Crisis welcomes your comments. Please share your thoughts below.
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Are trade deficits good or bad? It depends! [feedly]
http://jaredbernsteinblog.com/reposting-are-trade-deficits-good-nor-bad-it-depends/
In light of this silliness in the WaPo today (which Dean Baker already jumped on), I'm compelled to repost this piece from a little while back, explaining why and when trade deficits are problematic and when they're not.
Summarizing, it's just as wrong to claim trade deficits of any magnitude are always a negative as that they're always a positive. Like Neil Irwin said, motivating my earlier piece, "they're not scorecards."
When are they problematic? In two situations: first, when we're not at full employment, and policy makers can't or won't make up the slack. The GDP identity–GDP=Cons + Inv + Gov't spending + Trade balance–provides a simple way to show that a negative trade balance drags down growth.
Other components can make up the difference. However, in recent years, in periods of slack, the monetary authorities–central banks–have been increasingly likely to be stuck at zero on their interest rate, undermining their contribution to offsetting a trade deficit. And the fiscal authorities have been either stuck in austerity ideology (Europe), dysfunction, or both (that would be us).
The figure below shows that, in fact, trade deficits have been the norm over the period when we've been at full employment less than 30 percent of the time, so in this regard, our persistent trade deficits have been problematic more often than not in recent years. Note that I'm not drawing any causality here between trade deficits and the absence of full employment. My point is that the former (trade deficits) are more of a problem when we're not at full employment and neither fiscal nor monetary policy is working to offset them.
Sources: BEA, BLS, CBO
The second way in which trade deficits are harmful is a bit more subtle. When we consume/invest more than we produce, we must borrow from abroad to make up the difference. On the other side of the ledger from the trade deficit is the "capital account surplus," which simply represents the flow of capital into deficit countries to finance their spending beyond production.
The trade-deficits-are-always-and-everywhere-benign team argues that this is a feature, not a bug. Hey, if foreigners want to lend to us so we can spend more than we produce, that's great!
But it's only great if there are truly productive uses for the capital. If there aren't, those flows can inflate…oh, I dunno…let's say a real estate bubble. Or a dot.com bubble. See both Michael Pettis and Ben Bernanke on this point. No less a mainstream stalwart than the Lord Mervyn King, former governor of the Bank of England, recently held forth on the macroeconomic problems of persistent trade imbalances, linking them to countries that manipulate their exchange rates to preserve their trade surpluses (and therefore, other countries' trade deficits; the system has to balance).
I think both of these conditions at which trade deficits are problematic–labor markets that are slack more often than not and the absence of productive investments–can be hard for people to wrap their heads around. We're taught, against fact, that full employment is the natural state of affairs, and that productive investments are always there for the taking.
But especially in the age of financial engineering, where non-productive but potentially high ROI investment opportunities abound, that assumption just doesn't hold.
What about now? We're closing in on full employment so I wouldn't invoke the trade deficit as a negative in that regard, though it took us too long to get here, due to the combination of the zero lower bound at the Fed, inadequate fiscal policy, and yes, the trade deficit, which has averaged -3.1% of GDP in this expansion.
On the investment side, if you believe we're in a period of secular stagnation, which implies too much savings given desired investment (and remember, trade deficits occur when countries export their excess savings to us), then that's a problem right now, putting downward pressure on interest rates, inflation, and demand. BTW, the logic of this suggests a smart solution to this part of the problem: investment in public infrastructure. On that, see dysfunctional Congress.
Finally, of course, our trade deficits are always in manufactured goods, so they invoke a sectoral problem for communities and families that depend on factory jobs. It is left as an exercise for the reader to connect the dots between that problem and our current political sh__show.
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Paul Krugman: Trump Makes Caligula Look Pretty Good [feedly]
http://economistsview.typepad.com/economistsview/2017/08/paul-krugman-trump-makes-caligula-look-pretty-good.html
"The Worst President Ever™":
Trump Makes Caligula Look Pretty Good, by Paul Krugman, NY Times: Even before the media obsession with Hillary Clinton's email server put The Worst President Ever™ in the White House, historians were comparing Donald Trump to Caligula, the cruel, depraved Roman emperor who delighted in humiliating others, especially members of the empire's elite. But seven months into the Trump administration, we can see that this comparison was unfair.
For one thing, Caligula did not, as far as we know, foment ethnic violence within the empire. For another ... Rome's government continued to function reasonably well despite his antics...
Finally, when his behavior became truly intolerable, Rome's elite did what the party now controlling Congress seems unable even to contemplate: It found a way to get rid of him.
Anyone with eyes — eyes not glued to Fox News, anyway — has long realized that Trump is utterly incapable, morally and intellectually, of filling the office he holds. But in the past few days things seem to have reached a critical mass. ...
Everyone in Washington now knows that we have a president who never meant itwhen he swore to defend the Constitution. He violates that oath just about every day and is never going to get any better.
The good news is that the founding fathers contemplated that possibility and offered a constitutional remedy: Unlike the senators of ancient Rome, who had to conspire with the Praetorian Guard to get Caligula assassinated, the U.S. Congress has the ability to remove a rogue president.
But ... all we get from the vast majority of elected Republicans are off-the-record expressions of "dismay" or denunciations of bigotry that somehow fail to name the bigot in chief. ...
The fact is that white supremacists have long been a key if unacknowledged part of the G.O.P. coalition, and Republicans need those votes to win general elections. Given the profiles in cowardice they've presented so far, it's hard to imagine anything — up to and including evidence of collusion with a foreign power — that would make them risk losing those voters' support.
So the odds are that we're stuck with a malevolent, incompetent president... If so, we have to hope that our country somehow stumbles through the next year and a half without catastrophe, and that the midterm elections transform the political calculus and make the Constitution great again.
If that doesn't happen, all one can say is God save America. Because all indications are that the Republicans won't.
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