There’s no way to bring back all those steel plants and steel jobs, even if we stopped all imports. Partly that’s because a modern economy doesn’t use that much steel, partly because we can produce steel using many fewer workers, partly because old-fashioned open-hearth plants have been replaced by mini-mills that use scrap metal and aren’t in the same places. So this is all a fantasy.
.. You may remember Bernie Sanders using Denmark as an example. It’s a good one: much better wages, a much stronger social safety net, a mostly unionized work force. But Denmark is as open to world trade as we are. It’s domestic policies — from taxing and spending decisions to pro-labor policies in the service sector — that make the difference. Universal health care and the right to organize matter a lot more for workers than trade policy.
.. Why does the president of the United States have the authority to make decisions (such as imposing tariffs) that have significant impacts on the economy, trade, relationships with allies, etc. — with impunity, and with no input from Congress? What path should Congress be taking to restrict his powers.— Ricky, Saint Paul, Minn.
PK: Actually, Congress voluntarily limited its own role, to protect itself from special-interest politics: it votes big trade deals up or down on a single vote, then stays out of it.
.. However, these powers aren’t supposed to be used arbitrarily: there’s supposed to be an independent study of the issue, and the president acts on the basis of that study. What’s happening with Trump is an abuse of the process: the Commerce Department came up with an obviously bogus national security rationale for tariffs Trump wanted to impose for other reasons.
So we have a process that gives presidents some discretion, for pretty good reasons — but one that assumes that said presidents will act honestly and responsibly. It falls apart when you’re dealing with someone like Trump.
.. PK: President Oprah Winfrey, or whoever, can undo these tariffs with a stroke of the pen. However, we might get into a full-scale trade war before that happens, and in any case the U.S. has already lost its reputation as a reliable negotiating partner.
.. PK: Basically, we have persistent trade deficits because we have low savings and remain an attractive place for foreigners to invest. And as a result, the U.S., which was a creditor country before we began running persistent deficits since 1980, is now a net debtor.
But you want to keep some perspective. Our “net international investment position” — overseas assets less liabilities — is about -45 percent of G.D.P., which isn’t that big a number, all things considered. For example, it’s less than 10 percent of our national wealth.
And the idea that this gives foreigners a lot of power over America has it backward. On the contrary, in a way it makes them our hostages: China has a lot of money tied up in America. Suppose they tried to pull it out: the worst that could happen would be a fall in the dollar, which would be good for U.S. manufacturing and inflict a capital loss on our creditors.
Lot of things worry me; our foreign debt, not so much.
Budgets, Bad Faith and ‘Balance’
Over the past couple of months Republicans have passed or proposed three big budget initiatives.
- First, they enacted a springtime-for-plutocrats tax cut that will shower huge benefits on the wealthy while offering a few crumbs for ordinary families — crumbs that will be snatched away after a few years, so that it ends up becoming a middle-class tax hike.
- Then they signed on to a what-me-worry budget deal that will blow up the budget deficit to levels never before seen except during wars or severe recessions.
- Finally, the Trump administration released a surpassingly vicious budget proposal that would punish not just the vulnerable but also most working families.
.. Washington is full of professional centrists, whose public personas are built around a carefully cultivated image of standing above the partisan fray, which means that they can’t admit that while there are dishonest politicians everywhere, one party basically lies about everything.
News organizations are intimidated by accusations of liberal bias, which means that they try desperately to show “balance” by blaming both parties equally for all problems.
Fraudulence of the Fiscal Hawks
In 2011, House Republicans, led by Paul Ryan, issued a report full of dire warnings about the dangers of budget deficits.
.. Citing the horrors of big deficits, Republicans refused to raise the federal debt ceiling
.. How big were these horrifying deficits? In the 2012 fiscal year the federal deficit was $1.09 trillion. Much of this deficit, however, was a direct result of a depressed economy
.. If anything, we should be using this time of relatively full employment to pay down debt, or at least reduce it relative to G.D.P.
.. They are providing more stimulus to an economy with 4 percent unemployment than they were willing to allow an economy with 8 percent unemployment.
.. Republicans weren’t just vehemently opposed to fiscal stimulus; they were also vehemently opposed to monetary stimulus. Basically, they were against anything that might help the economy on President Obama’s watch... imposing austerity in a depressed economy, then running up the deficit when we’re already near full employment
The Great American Tax Heist
when this bill leads to these predicted deficits, Republicans will return to their sidelined deficit rhetoric armed with a sickle, aiming the blade at the social safety net, exacerbating the egregious imbalance of the tax bill’s original sins.
.. That’s the strategy: Appease the rich on the front end; punish the poor on the back. Feed the weak to the strong.
.. No matter how folks try to rationalize this bill, it has nothing to do with a desire to help the middle class or the poor. This is a cash offering to the gods of the Republican donor class. This is a bill meant to benefit Republicans’ benefactors. This is a quid pro quo and the paying of a ransom.
.. Last month at a rally in Missouri, Trump said of the tax bill, “This is going to cost me a fortune, this thing, believe me.” He continued:
.. “This is not good for me. Me, it’s not so — I have some very wealthy friends. Not so happy with me, but that’s O.K. You know, I keep hearing Schumer: ‘This is for the wealthy.’ Well, if it is, my friends don’t know about it.”
That, too, was a lie.
.. It also lines the pockets of people like Senator Bob Corker, who mysteriously “coincidentally” switched his vote from a no to a yes on the bill after the language was added.
.. Donald Trump is a plutocrat masquerading as a populist. He is a pirate on a mission to plunder.
.. Republicans in Congress rushed the bill through for other reasons: to combat the fact of their own legislative incompetence, to satisfy their donors and to honor their long-held belief that the rich are America’s true governing force.
.. They are simply a veneer behind which a crime is occurring: the great American tax heist.