One of the hardest things to accept for all of us who want Donald Trump to be a one-term president is the fact that some things are true even if Donald Trump believes them! And one of those things is that we have a real trade problem with China. Imports of Chinese goods alone equal two-thirds of the global U.S. trade deficit today.
.. he’s so weirdly obsessed with protecting “manly” industries like coal, steel and aluminum that affect our allies more than China — and he’s built such a chaotic policymaking process and unilaterally surrendered so much leverage to Beijing — that he can’t be relied upon to navigate the China trade issue in our national interest.
.. David Autor, the M.I.T. economist who’s done some of the most compelling research on the impacts of China trade
.. the “shock” that China delivered to U.S. lower-tech manufacturers in the years right after Beijing joined the World Trade Organization in 2001
.. roughly 40 percent of the decline in U.S. manufacturing between 2000 and 2007 was due to a surge in imports from China primarily after it joined the W.T.O.
.. it led to the sudden loss of about one million factory jobs in Ohio, Michigan, Wisconsin and Pennsylvania. Trump won all of those states.
.. This “China shock,” said Autor, led not only to mass unemployment but also to social disintegration, less marriage, more opioid abuse and more people dropping out of the labor market and requiring government aid.
.. “International trade creates diffuse benefits and concentrated costs,”
.. has created identifiable losers in trade-impacted industries
.. We assumed that China would “reform and open” after it joined the W.T.O.,
.. Instead, China “reformed and closed.” So China kept a 25 percent tariff on new cars imported from the U.S. (our tariff is 2.5 percent)
.. China grew its companies behind a wall of protection, fed them with state funds and, when they were competitive enough, unleashed them on the world
.. “Chinese and foreign makers are about to start sending huge numbers of fully built cars to the U.S. We are about to see a big increase in the U.S. trade deficit in automotive in the next several years.”
.. U.S. tech firms, like Apple, that want to offer cloud services to Chinese citizens have to store the data in China on servers operated by a Chinese partner. The U.S. has no such regulation.
.. “if they don’t accept demands to partner with Chinese companies and store data in China, then they risk losing access to the lucrative Chinese market, despite fears about trade secret theft and the rights of Chinese customers.”
.. “no US auto company is allowed to own even 50% of their own factory in China, but there are five 100% China-owned EV auto companies in the US.”
.. American electric vehicle (E.V.) companies operating in China are forced to have a Chinese partner and transfer technology to them.
.. they are also playing by a set of rules that others would be naïve to ignore.
.. So what would a smart American president do? First, he’d sign the Trans-Pacific Partnership trade accord. TPP eliminated as many as 18,000 tariffs on U.S. exports
.. focused on protecting what we do best — high-value-added manufacturing and intellectual property.
.. China was not in TPP. It was a coalition built, in part, to pressure Beijing into fairer market access, by our rules. Trump just gave it up for free.
.. “Since you like your trade rules so much, we’re going to copy them for your companies operating in America: 25 percent tariffs on your cars, and your tech companies that open here have to joint venture and share intellectual property with a U.S. partner — and store all their data on U.S. servers.”
.. Having a really tough trade negotiation with China on manufacturing and high technology, but doing it in secret, makes sense to me.
Starting a public trade war with our allies over aluminum and steel that raises the costs for our manufacturers, that doesn’t protect our growth industries and that loses allies that we need to deal with China makes absolutely no sense.
.. We needed to be, and still need to be, much more serious, and generous, about creating “wage insurance” and community reinvestment policies for people and places whose employers are suddenly wiped out by a trade shock.
.. tax incentives, Pell grants, community colleges — to create the conditions for every American to be constantly upgrading skills
.. Too much of the economic discussion of late “has been focused on the 1 percent versus the 99 percent,” observed Autor. “It’s become a kind of ‘inequality porn’
.. You lose sight of the fact that there is a dramatic rise in the economic return to tangibly acquiring skills — skills that are available and should be within everyone’s reach.”
.. The lack of real meritocracy in our country today, he added, “is not about the returns to realized skills. It is about the inequality in the ability to acquire those skills.
.. If you get educated in America today, and have a good work ethic, you are going to be rewarded.’
.. What does education do? It gives you a skill set and enables you to adapt to change better.
And cities and towns anchored by universities tend to reinvent themselves more easily; they’re engines of adaptation.
Ten Observations from the White House Opioid Summit
College students can begin by seeking out Ritalin and stimulants to handle all-night study sessions and handle an exhausting schedule, and then turn to Xanax and other opioids to calm down and relax on the weekends
Weighing the Good and the Bad in the Spending-Caps Deal
Republicans dislike “increased domestic spending” in general, but once you see the specifics, you understand why Republican leaders signed off on it: $80 billion in disaster relief funding, $6 billion toward opioid and mental health treatment, $4 billion to the Veterans Administration to rebuild and improve veterans hospitals and clinics, $2 billion toward research at the National Institutes of Health.
.. It was always a stretch to claim that Republicans had “basically repealed Obamacare” just by repealing the individual mandate. But getting rid of the individual mandate and the Medicare Independent Payment Advisory Board? Now we’re getting somewhere. The IPAB was created under Obamacare and given the duty to slow the growth of Medicare spending, but no board members were ever nominated. But as written under the law, IPAB would have enjoyed a lot of power over what Medicare was willing to pay for and how much, with little opportunity for Congress to overrule their decisions. This deal gets rid of IPAB for good.
.. An abusive person will often become a lot calmer when confronted with an authority figure they cannot abuse, such as a cop at the door. Abusive people can usually recognize the difference between the consequences of hitting a partner or spouse in public — where someone may see and confront them or call the cops — and doing so in private, and thus they keep those impulses in check in public. This is, in fact, one of the traits that can emotionally and psychologically trap the victim; the victim finds herself baffled and wondering, “he’s so nice and normal sometimes, so what am I doing that’s setting him off?”
.. Abusive people are generally pretty good at measuring what they can get away with in a given circumstance. They want to indulge their impulses right up to the point where it generates a permanent consequence. For example, if the abuser picks up a knife and begins chasing his partner around the house pledging to stab the partner, the partner is almost always going to flee and end the relationship, and/or file a restraining order.
.. restraining orders usually only work on the kind of people who don’t require restraining orders.) A man who is violently angry on the first date is not going to get a second date.
.. The creepy guy who hangs around a playground and stares at the children is going to get reported and caught pretty quickly. The creepy guy who works his way into a position of trusted authority, and who manages to seem kind, caring, and all of those other good traits around other adults, can pursue prey at will for a long time, because accusations of abuse will seem so unthinkable to other adults.
.. Many people have a hard time rectifying the two, and we should have a bit of sympathy for the friends and co-workers experiencing that cognitive dissonance upon learning of a person’s private sins.
How to Get American Men Back Into the Workforce
Rethink unemployment insurance and increase public investment in improving skills.
When it comes to prime-age men working, the U.S. compared unfavorably with other advanced economies, falling in the bottom half of the Organization for Economic Cooperation and Development despite having the second-least-generous disability benefits in the group and nearly the shortest duration of unemployment insurance benefits.
.. The largest issue facing American men is not that they are rewarded for remaining in a recliner, but that they cannot find rewarding work. The bulk of the decline in employment has been for men with a high-school diploma or less, who have seen their employment rates fall from 97% in 1964 to 83% today. This has coincided with a decline in their relative wages: High-school grads in the 1970s earned two-thirds what their college-educated counterparts took home. Today it’s around half.
.. Forty-four percent of the prime-age men who have left the labor force are on pain medication, according to Princeton economist Alan Krueger. The Council of Economic Advisers recently estimated this epidemic is costing the U.S. economy $500 billion annually. Spending even a tiny fraction of that sum on treatment, counseling and prevention could be a profitable investment. Cutting Medicaid would make it harder for those suffering from addiction to receive the treatment necessary to overcome it and get back to work.