4. What's different about the RCEP?
Unlike the TPP, or Trans-Pacific Partnership, and other U.S.-led trade deals, the RCEP doesn't require its members to take steps to liberalize their economies and protect labor rights, environmental standards and intellectual property. U.S. Commerce Secretary Wilbur Ross has called it a "very low-grade treaty" that lacks the scope of the TPP. But RCEP's imminent implementation illustrates America's diminished clout and could make it harder for U.S. businesses to compete in the vast region.
5. What happened to the TPP?
It became the the CPTPP, or Comprehensive and Progressive Agreement for Trans-Pacific Partnership. Signed in March 2018, it's already in force for seven of the 11 signatories. They decided to press on after Trump pulled out, saying he wanted to get better deals bilaterally. President-elect Joe Biden has indicated he's open to joining the CPTPP but would want to see improvements.
6. Which countries are on which side?
Seven nations -- Australia, Brunei, Japan, Malaysia, New Zealand, Singapore and Vietnam -- participated in negotiations for both deals. The U.S., Canada, Chile, Mexico and Peru are TPP-only negotiators, while RCEP-only countries, other than China, are Cambodia, India, Indonesia, Laos, Myanmar, Philippines, South Korea and Thailand. The U.S. hasn't been deliberately excluded from the RCEP. To join, it would first need to reach a free-trade arrangement with Asean, then apply to join.
Even though the repudiation of Trumpism failed to fully materialize in the recent US election, many Europeans largely expect a return to the 'good old days' under President-elect Joe Biden. And those policymakers who profess to know differently, cannot quite explain how their government would rise to the challenges of a different transatlantic relationship, let alone a global system under strain.
Obviously, manners matter. The realistic expectation that Biden would again consult US allies on important issues is already a consolation after four years of being treated as a foe. And knowing that the next US President will aim to restore his country's global reputation as a reliable partner is reassuring. However, such appearances cannot paper over not only the hardening policy differences between America and Europe, but also the shifting global power relation that will not allow for a return to some idealized status quo.
First, if the chances of a "transatlantic reset" depend on who the next US president is, their actual revival hinges squarely on what the Europeans are willing to do. To put it in very simple terms, Biden will only have to signal that he wants the allies to be partners again, but the latter will have to deliver.
For Europe, this setting presents a three-fold challenge: of its readiness, its abilities, and its strategy. If 'burden-sharing' in the past was thought of mainly in security terms, meaning that European countries in both EU and NATO would have to spend more on defence to close the gap with the Americans, it now implies that they will have to chiefly take care of any and all crises in their neighbourhood for which they can hope to receive US backing. Think of the Libya intervention in 2011, except thought through to the very end (which is not yet near today).
Here, Europe clearly isn't ready to shoulder its share of the burden – let alone able to do so. For all the talk about 'European sovereignty' over the last couple of years, the 'European pillar of NATO' isn't where it should be. Yes, a number of improvements have been made, from strengthening defence cooperation among member states through permanent structured cooperation (PESCO) to setting up battlegroups and civilian capabilities to better equip the EUs rapid response toolbox. The great leap forward for European policymakers and strategists would be to acknowledge that Europe's strategic autonomy is actually in the transatlantic interests – because without it, there cannot be real partnership between the United States and its European allies, only extended dependency.
Similarly, on trade, frictions will persist. True, spats over beef and Boeing/Airbus are a staple of transatlantic relations, and few expect the contentious talks over TTIP to resume anytime soon. Yet, from agricultural products to the digital economy – taxing global companies as much as setting the rules for their services – to managing China's expansion, the list of topics where Washington and European capitals don't see eye to eye is long. Worse, even EU member states do not share the outlook on how to tackle those challenges, and the last four years simply – but wrongly – allowed them to assume that the problem was sitting in the White House.
This is where strategy comes into play and meets the crumbling multilateral order. Hard as it is for (West) Europeans to accept, but the world order of the past 70 years will not continue to shape the planet's next 70 years. Life is dynamic, things don't stay the way they are (even if some would like them to), and whether it's by our own shortcomings (such as failing to reform European democracy and the capitalist system) or by others' aspirations (China, India, Brazil and the like asking for a bigger say in world affairs), Europe's global weight has been shrinking.
The current pandemic is shaking things up, and while both the 'old continent' and the 'new world' seem to particularly struggle with it internally, if offers them a chance to set things right at the global level. America and Europe together can show the value of the multilateral system they helped create by forging a global response to Covid-19 – and by strengthening the one to climate change and digitization in its wake. Confronting China, standing up to Russia and other authoritarian states, and defending the existing global order are all worthy goals for Western democracies – however, they have to be substantiated by real-world policies producing results that are deemed superior to other systems.
The Top 3 for a renewed transatlantic tandem should thus be global health, climate action, and digitization. The first includes pandemic preparedness in particular, but also more broadly the creation of functioning global structures to respond to future health crises. The second hinges on an effective decarbonization of energy (with consequences for industry, mobility, leisure and the like) under the Paris Accord, where the merging of the New Green Deal and the European Green Deal appear feasible not only in words. Lastly, setting the standards and norms for the digital world will be among the most difficult tasks, not only because there are few global institutions in this field but also because the pace of development is huge – topped only be the likely benefits for those who are boldest on anything from Artificial Intelligence to Big Data to Cyber Defence, be it companies or countries.
None of these challenges can be dealt with by an old transatlantic mindset. But fresh thinking combined with the willingness to join forces on both sides of the Atlantic will go a long way to getting global partners on board. If Europe still believes in an effective multilateralism and if President Biden is indeed an instinctive multilateralist, the two should not let this – likely last – chance pass to reinvigorate the global order by imbuing it with the capability to "build back better".
Last week, the Bureau of Labor Statistics (BLS) reported that, as of the middle of September, the economy was still 10 million jobs below where it was in February. Job growth slowed considerably over the last few months and the jobs deficit in October was easily over 11.6 million from where we would have been if the economy had continued adding jobs at the pre-pandemic pace.
Today's BLS Job Openings and Labor Turnover Survey (JOLTS) reports job openings changed little at 6.4 million in September while hires and layoffs fell. While the slowdown in layoffs is promising from 1.5 million to 1.3 million, the softening in hires is a concern (6.0 million to 5.9 million). The U.S. economy is seeing a significantly slower pace of hiring than we experienced in May or June—hiring is roughly where it was before the recession, which is a big problem given that we have more than 11.6 million jobs to make up. And job openings are now substantially below where they were before the recession began (6.4 million at the end of September, compared to 7.1 million on average in the year prior to the recession). No matter how it is measured, the U.S. economy is facing a huge job shortfall.
One of the most striking indicators from today's report is the job seekers ratio, that is, the ratio of unemployed workers (averaged for mid-September and mid-October) to job openings (at the end of September). On average, there were 11.8 million unemployed workers while there were only 6.4 million job openings. This translates into a job seeker ratio of about 1.8 unemployed workers to every job opening. Another way to think about this: for every 18 workers who were officially counted as unemployed, there were only available jobs for 10 of them. That means, no matter what they did, there were no jobs for 5.4 million unemployed workers. And this misses the fact that many more weren't counted among the unemployed. The economic pain remains widespread with more than 25 million workers hurt by the coronavirus downturn. Without congressional action to stimulate the economy, we are facing a slow, painful recovery.
As winter approaches and many families face eviction and hunger as well as growing COIVD-19 cases, the Biden administration will be facing a mounting, not waning, crisis. We cannot wait: Congress must take immediate action to provide relief to all of those unemployed workers who have no hope for employment and are desperately trying to make ends meet. The first dose of austerity exhibited by the loss to the vital enhanced unemployment insurance benefit in August is already taking a toll on job creation. At this slowing pace of job growth, it will take years to return to the pre-pandemic labor market and the economic pain will be deep and long-lasting.
The question resonates because metro areas vote so differently from small town and rural areas and because our electoral-college leftover from slavery (like the Senate) gives these non-metro places outsized influence in our politics. Regionally, large majorities on the coasts vote Democratic while the South and Midwest are majority Republican. But to Brownstein's readers in The Atlantic, Paducah (population 23,000 and in Kentucky) likely also connotes "hick" or "hillbilly," terms that are stand-ins for "poorly educated" whites without bachelor's degrees — or the so-called white working class.
Brownstein presents the core conflict in American politics as between a backward-looking, aggrieved "coalition of restoration" (Paducah) and a forward-looking, virtuous "coalition of transformation" (Seattle). The unstated assumption is that highly educated folks, the transformers, are the norm as well as the ideal, whereas poorly educated whites are ignorant and backward at best, or deplorable at worst. Those whites seemed to prove that again last Tuesday by voting 64 to 35 for Donald J. Trump. (All 2020 election results here are from preliminary and not entirely reliable Edison exit polls as reported in The New York Times.)
At this moment it's pretty tempting for us highly educated folks to think that all Trump voters are deplorable people resisting the important transformations we are all busy working toward. But there are different transformations afoot and they're not all positive. And there's also some restoration we could use a lot more of.
Brownstein mistakenly meshes cultural transformations – "growing diversity in race, religion, and sexual orientation [and] evolving roles for women" – with economic ones – "the move from an industrial economy to one grounded in the Information Age." In this formulation if you want to restore some important aspects of the Industrial Age – like 2% annual increases in real wages for three decades, strong unions, and steeply progressive taxes – then you also resist growing diversity and evolving roles for women.
It's true that many white men, with and without bachelor's degrees, rage against all three transformations. But there is no logical connection between cultural reactionaries and economic ones. A person can be culturally deplorable and economically progressive at the same time, as much survey research has shown. Or they can resist diversity but be open to – and in fact, looking for – the government to dramatically improve their economic circumstances. And that means that Democrats should make a renewed effort to convince workers of all skin tones to look more closely at their economic program. The one Biden ran on is good enough.
It didn't get much attention in the media, nor did Biden emphasize it enough. Yet the economic program Biden ran on is potentially transformative at the scale he proposed – especially trade and industrial policies focused on making more things in-country, a massive infrastructure investment that creates millions of jobs, and a comprehensive enhancement of the care economy for children, elders, and the workers who care for them, all paid for with increased taxes on corporations and the wealthy. If enacted, this program will disproportionately benefit people of color, but the largest group of beneficiaries will be whites without bachelor's degrees.
Such a program will be impossible to enact with a Senate still controlled by Paducah, but the overall program could be enormously popular, and it should be the center of Democratic legislative politics for the next two years. The program – and the focus on economic revival – might be able to pull a handful of Republican senators across the aisle, but that's not as important as making strong inroads into the Trumpian base of the party – namely, the white working class. I believe that can be done and is, in fact, highly feasible, but you have to understand the Trump coalition better than our punditry generally does.
A recent New York Times article, for example, described the Trump and Biden coalitions in a way that is quite common shorthand among many analysts and pundits: "A Trump coalition of white voters without college degrees and a Biden coalition of college-educated white voters . . . and minority voters."
White people without bachelor's degrees are the largest part of the Trump coalition – 47% — but they are not alone. Despite what Brownstein and others assume, the white part of the educated middle class are not uniformly right-thinking transformers. Last week they split their vote 49 to 49, making them about a third of the Trump coalition.
| Trump Coalition | |
| White Working Class | 47% |
| White Middle Class | 33% |
| "Non-White" | 20% |
While only a fifth of the Trump coalition are not white, "non-white" people make up nearly half of Biden's coalition. The total "non-white" Dem advantage may be down some from the Obama elections, but it is still huge. As growing and mobilizing parts of the electorate, racial minorities are clearly the foundation of any viable Democratic coalition.
| Biden Coalition | |
| "Non-White" | 47% |
| Black 20% Latino 17% Asian & Other 10% | |
| White Middle Class | 30% |
| White Working Class | 23% |
But that 35% minority of working-class whites who voted for Biden are not an insubstantial part of the Biden coalition, making up nearly a quarter of it. That's the smallest part of the coalition, but it amounts to about 20 million voters, which is more people than reside in all but four of our most populous states. The educated white middle class represents a somewhat larger group, but they are not the only white part of the Democratic coalition.
Simple democratic arithmetic dictates that you cannot neglect any part of your coalition, but you also need to add to your coalition by subtracting from the opposition's groups. The white working class may have gotten over-sized attention from progressive Democrats coming into this election, but that's because they are the single biggest target. It didn't help that a part of the Democratic party has sometimes argued that they should be abandoned and allowed to stew in their own juices – often with more than a little class prejudice. Democrats' effort to attract more working-class whites, however, resulted in about a 4-point gain among them nationally, but the gains in battleground Rust Belt states were enough to determine outcomes – 8 points in Michigan, 9 points in Minnesota, 7 points in Wisconsin, though only 2 points in Pennsylvania.
As Michael Sandel has pointed out, "Disdain for the Less Educated Is the Last Acceptable Prejudice." To gain more support from working-class whites, Democrats have to acknowledge that class prejudice — and overcome it. We can start by simply understanding that the white working class is a very large and diverse group of people. It cannot reasonably be characterized as having one uniform social and political psychology. Indeed, it is so large and diverse that it makes up both the largest piece of the Trump base and an indispensable part of the Biden base.
Nor should we buy the kind of broad-brush geographical references that Brownstein offers. Working-class whites don't all live in places like Paducah. They live in cities, including Seattle, and are likely a majority in the suburbs, even though political reporters often seem to assume that "the suburbs" require a bachelor's degree and a comfortable income for admission.
Most important, we need to understand that while some part of the white working class is deplorable in every respect, the largest group among them is culturally conservative but also economically progressive. The Public Religion Research Institute study that tracked substantial racial and cultural resentments and anxieties among large portions of the white working class also found:
White working-class Americans generally believe the economic system is stacked against them, are broadly supportive of populist economic policies such as raising the minimum wage and taxing the wealthy—including a larger role for government—and are skeptical of free trade. . . . . Most white working-class Americans believe the best way to promote economic growth is to increase spending on education and the nation's infrastructure, while raising taxes on wealthy individuals and businesses to pay for it."
If a President Joe-from-Scranton can unify Democratic legislators around the progressive economic program he ran on, he can rally the diverse coalition that elected him this year while at the same time appealing to that considerable part of the white working class who voted for Trump but who are also open to a transformation toward economic justice that includes them.
Jack Metzgar
Jack Metzgar is a professor emeritus of Humanities at Roosevelt University in Chicago. A former president of the Working-Class Studies Association, he is the author of a forthcoming book from Cornell University Press, No One Right Way: Working-Class Culture in a Middle-Class Society.
Worthy reads from Equitable Growth:
1. If you don't have time to spend a half an hour or more plowing through the U.S. Bureau of Labor Statistic's Employment Report, then Kate Bahn and Carmen Sanchez Cumming provide a truly excellent highlights summary. Read their "Equitable Growth's Jobs Day Graphs: October 2020 Report Edition," in which they write: "On November 6, the U.S. Bureau of Labor Statistics released new data on the U.S. labor market during the month of October. Below are five graphs compiled by Equitable Growth staff highlighting important trends in the data. While the employment rate of prime-age workers continued to recover in October, reaching 76 percent compared to the pre-pandemic height of 80.5 percent, the pace of its improvement has decreased since the summer."
2. An equally good briefing on the U.S. Census Bureau's most recent Household Pulse survey comes courtesy of Kate Bahn, Raksha Kopparam, Carmen Sanchez Cumming, and Austin Clemens. Read their "Equitable Growth's Household Pulse graphs: October 14–26," in which they write: "On November 3, the U.S. Census Bureau released new data on the effects of the coronavirus pandemic on workers and households. Below are five graphs compiled by Equitable Growth staff highlighting important trends in the data. Low-income families are more likely to report not being employed compared to middle- and high-income families, exacerbating financial precarity for these U.S. households amid the Coronavirus Recession."
3. As I am less of an industrial-organization person, I tend to underestimate the importance of market structure and monopoly. But Equitable Growth is on the case. Read "Equitable Growth's Amanda Fischer joins others in comment letter to antirust regulator on harmful U.S. banking consolidation," which summarizes the letter: "Fischer, Steele, and Vaheesan argue that the Antitrust Division, along with banking regulators, must reverse the longstanding trend of deregulation and consolidation in the banking industry in order to promote financial stability and ensure the provision of credit to the "real economy." The U.S. banking industry has been characterized by a long period of increasing consolidation, coinciding with an increase in income and wealth inequality for people across the United States. The top four banking organizations now control nearly 36 percent of all bank deposits in the United States, up from 9.4 percent in 1995. Likewise, these four large banks held 86.7 percent of the total banking industry's notional amount of financial derivatives as of the first quarter of 2020. Mergers are increasingly rubberstamped."
Worthy reads not from Equitable Growth:
1. The idea that the long-run debt costs of expansionary fiscal policy depended on the magnitude of the difference between the required rate of return lenders were demanding on government debt and the growth rate of the economy was one that Larry Summers and I had a very difficult time making progress on when trying to convince people to back at the start of the decade of the 2010s. People kept saying that there was something wrong with it—that there was, somehow, a big difference between the social-cost surface and the interest-rate surface because of the risk that demand for government debt might suddenly collapse. But it was very hard to see how that could be true for reserve-currency countries. And now we find that what was our fringe opinion a decade ago is now conventional wisdom—but, so far, only among professional economists of a technocratic (rather than a partisan or an ideological) bent. Read Gita Gopinath, "Global liquidity trap requires a big fiscal response," in which she writes: "Vulnerable but viable firms require support, a problem that is much better addressed by fiscal policy … There is also a greater risk of currency wars in a global liquidity trap. When interest rates are near zero, monetary policy works to an important extent by weakening currencies to favour domestic producers … Fiscal policy must play a leading role … Governments should look for high-quality projects, while strengthening public investment management to ensure that projects are competitively selected and resources are not lost to inefficiencies. Many economies can lock in historically low interest rates now and keep debt servicing costs low."
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