Does Trump Stand For Something?

As you can see from the twitter time stamps, El Presidente-elect Señor Trumpanzee only got-- at most-- 6 hours sleep, probably less. He was up whining about Alex Baldwin's acting ability late Saturday night and then six hours later he had apparently chopped up some Adderall, snorted it and was off and running threatening American companies with 35% tariffs if they manufacture their products abroad, something that is going to be very popular with his voters and with Bernie's voters but probably not that popular with Paul Ryan, Mitch McConnell, their respective conferences or, for that matter, the Trumpanzee Cabinet.



Evan McMullin, who's become something of the voice of mainstream conservatism in opposition to Trump, called Trump's tariff threats "incredibly unwise and will discourage companies from creating jobs in the US in the first place. This is not a recipe for growth... And again, this is the approach of an authoritarian. Forget about the rule of law. Forget Congress's constitutional role in lawmaking." He then went on the slag off Mike Pence (after his silly appearance on This Week defending Trump's tweet storm) as Trumpanzee's "enabler in chief & we can expect him to continue to play that role. But other Republicans must stand up."

I'm not sure when other Republicans will but it's worth noting that Harvard Professor Robert Lawrence was right on top of it back in March when he called out Trump's hypocrisy on this very issue for PBS. Is Trump going to slap a tariff on all the products Ivanka manufactures overseas too? "Trump," he wrote at the time, "castigates American companies like Apple, Ford, Carrier and Kraft that use their brands to sell goods in the U.S., but produce them in other countries. Indeed, he appears to be so outraged by the practice that he proposes a 15 percent tax on companies for outsourcing jobs and a 20 percent tax for importing goods. More recently, he has spoken of a 45 percent tariff on Chinese imports... Yet despite these deep convictions, when it comes to his own businesses, Trump doesn’t exactly walk the walk."

[M]any of Trump’s businesses are based not on risking his money and directly creating employment in the United States, but in licensing his brand to help others sell their properties and products. As is now well known, the Trump brand has been used to sell casinos, condominiums, hotels and golf courses at home and abroad, as well as steaks, vodka and a “university” education... But for exploring whether he puts his moniker where his mouth is when it comes to trade, it’s the branch of the business labeled merchandise that merits closer attention.

In a recent debate Marco Rubio mentioned ties. But the ties made in China are just the tip of the iceberg. What about Donald J Trump sports jackets, cufflinks and eyeglass frames? All made in China. Inexpensive Donald J Trump shirts? Made in Bangladesh. More expensive Trump shirts? “Imported.” The Trump brand also has a more feminine side-- the Ivanka Trump brand. And where are the dresses, purses, shoes and other accessories that reflect Trump’s daughter’s taste made? Of the 838 Ivanka products advertised through the site, none appear to be made exclusively in the U.S.; 628 are said to be imported and 354 made specifically in China.

If you are an American economist like myself who believes that international trade is good for the U.S., there is nothing wrong with what the Trumps have been doing. Indeed, he and his daughter have been providing Americans with products they want at relatively low prices. But how do you reconcile a business model based on importing with professions of deep belief that manufacturing should be brought back to America? Trump argues he has no choice, since foreigners have made their products so cheap by manipulating their exchange rates. But then how do you explain the utter contempt he has expressed on the campaign trail about others who outsource when he is doing exactly the same thing? If Trump won’t buy Oreos on moral grounds, why should any moral person, following his example, buy Trump-branded merchandise?

For a “premium brand,” the prices of Donald Trump merchandise seem within the reach of the typical American. Suits at $250, sport coats at $125, though the ties are somewhat steep — typically around $65. But as president, Trump proposes to add 20 to 45 percent to their cost.

It is obvious that consumers, already hard pressed by weak income growth, would see their buying power further constrained. But many would also discover their jobs are threatened. Our economy is currently deeply linked to the rest of the world, and millions of U.S. workers are employed in companies that sell imported goods and use imported components in the products they manufacture in the USA. Trump’s tariffs would wreak havoc with global supply chains and force many companies to reduce employment. In addition, foreigners would undoubtedly retaliate against our exports as they would be entitled to do under our trade agreements. Think about what a trade war would do to investment and employment. But who knows? If the Trump presidential seal graces the products that are sold under the Trump brand, perhaps the average American will still buy what he is selling.

Justin Amash (R-MI) tweeted a demeaning response to Trump's tweet-storm: "This would be a 35% tax on all Americans—a tax that especially hurts low-income families. Maybe the slogan should be #MakeAmericaVenezuela." Over the weekend, the Wall Street Journal reported on a potential dustup between Trump and free-traders in the Ryan camp chugging down the road in this direction. Trump will have Bernie on his side in this one-- and the American people and it will be an opportunity for him to tame Ryan-- if Ryan is foolish enough to go toward with him over it. Brody Mullins wrote that "setting the stage for what could be the first clash between President-elect Donald Trump and Congress, House Speaker Paul Ryan and some congressional Republicans are raising concerns about a provision in a bill that would require the use of American-made iron and steel for U.S. water infrastructure projects. The bill, which provides billions of dollars in federal funding, initially included a requirement that federal money could largely only be used to buy U.S.-produced iron and steel. In recent days, Mr. Ryan and other Republicans have begun raising objections, saying the requirement would pick winners and losers among U.S. companies and shouldn’t be included in the final legislation."

“We will have two simple rules when it comes to this massive rebuilding effort: Buy American and hire American,” Mr. Trump said at a rally Thursday evening in Cincinnati. “Whether it is producing steel, building cars or curing disease, we want the next generation of innovation and production to happen right here in America and right here in Ohio, right?”

On Friday, a spokeswoman for Mr. Ryan said the final version of the bill was still under discussion. Congress hopes to approve the bill next week before leaving town for the year.

I guess Obama could sign it and save the Republicans from a potentially serious bloodletting. Jerry Nadler: "A lot of Republicans have historically opposed Buy in America. This is one of a number of areas where we’re going to see the Republicans [who] go along with general Republican doctrine and [those who side with] Trump are different on some things."

Have the Democrats offered a coherent response to Trumpism? Stirling Newberry reminded us Sunday morning that "the neo-Democrat only cares about the rich people's mess, the rest of us will go slowly downhill." Former policy advisor to Grayson and to Bernie, Matt Stoller let loose a now famous Tweet-storm over the weekend that stands as a powerful critique of the Democrats' inability to copy with Trump, who he equates with "a pre-1930s Republican, uniting farmers, workers, and big biz behind tariffs and anti-immigration walls," at least rhetorically. "What people don't get is that the Dem Party he's facing is NOT the party of the New Deal. It is NOT the party of the people anymore. The party of the people was assaulted in the 1970s and killed over the next 20 years by the neoliberals. It died with Clinton's election. I documented the underlying ideological change here, from an anti-monopoly party to a pro-monopoly party.

"You can see this everywhere if you look. The leaders of the party are from NY and SF, the centers of concentrated monopoly capital. The revolt in 2010, 2014, and 2016 was largely rural. These were the final revolts that started in the early 1980s. Carter and Volcker wiped out farms en masse. Farmers in 1979 tried to shut down DC with tractors over high interest rate policies. Reagan, Bush amplified the financial concentration trend, and Clinton took it global. Obama in 2008 largely ran against this. Obama's campaign in 2008 was organized AGAINST monopoly. He said he'd renegotiate NAFTA. He beat Clinton in Iowa going after big ag.

"But he governed consistent with the ideology of the neoliberals. He broke his promises to stop this concentration. The foreclosure fraud epidemic caused mass suffering. The failure to jail any bankers were unjust. But they were part of a vision. This vision was that of technocracy, or a set of credentialed people who are smarter and better than you making key decisions.

"Deplorables, or fake news, or voters as ignorant are ideological statements-- part of this vision of people as incapable of self-gov't. But this vision is NOT consistent with populism. It conflicts w/corruption as conflicts of interest, revolving door, privatization. Geithner, for instance, cheated on his taxes. Banks close to him saw a stock price boost when he was appointed. He ran a foreclosure program designed to steal money from people and hand it to banks under the guise of helping avoid foreclosures. People who think that Trump was appealing to the working class solely based on their ignorance are ignorant of this track record.

"Until people are willing to internalize the policy framework of Clinton and Obama, they cannot rebut the arguments from Trump. Because fundamentally, Trump's pitch is that the rule of law is a joke and that having a strongman on your side is all that matters. This is now the attitude of the financial and business elite. That law is for little people. They can just hire smart lawyers. It is ALSO how the Clinton and Obama frameworks were organized. There is a difference though b/n them and Trump. The way that neoliberals deliver social justice is through the dole, or what we call Obamacare, transfer payments, job training. This is a variant of humiliating people with charity. It is explicitly not what the party of the people was about. Paul Krugman's "Let them eat transfer payments" is the slight of hand he always plays with events like Carrier. They are voting against their self-interest. But their self-interest isn't the dole! They want jobs! They want self-government.

"Trump is pitching not self-government, but a wall to protect them against neoliberals and a strongman to mock their enemies. It's not really what they want. Trump was not popular. But it's their version of the neoliberal deal of symbolic racial diversity. The ignorance is a choice, a choice that your facts don't matter. Just like you've decided that foreclosures/offshoring doesn't matter. The thing is, neoliberalism and Trumpism are BOTH incompatible with self-government, except among a select few. Few want either. Until we can recognize that it is concentrated financial power-- monopoly-- extending power over all of us, we will dance to their tune.

Stirling Newberry On America's Progressive Movement Vs Neo-Conservative Washington-- The Cold Hard Facts

DWT readers who browse the progressive blogosphere are probably already familiar with Stirling Newberry, one of the most respected voices examining economic, military, technological and political issues from a progressive perspective. He is a business and political consultant and a composer. His work has been a major inspiration for both Ken and myself and we invited him to do a piece at DWT elucidating on his premise that ideas make the Progressive Movement the most dangerous force in American politics. "While much of America is in a euphoric post-Bush haze," he wrote, "the Progressive Movement has already set to work. However long the race, victory in politics is to ideas winged with optimism, and not to polls or even pictures." We are really very proud to present Stirling's latest work here:

Progressivism is now the most dangerous force in American politics, and everything that is being done is being done to push its ideas to the margins, while claiming to be doing something about the problems that those ideas address. At this point Washington DC and the old system have exactly one idea, and that idea is raid social security. The progressive movement is now the movement of ideas, and everyone else is simply trying to figure out how to get to the end game of taking payroll taxes and using them to pay back the bad bets of banks.

That's the only wedge they have to run, because it has sunk in that the Chinese are not going to start consuming quickly, and even Chuck Schumer has gotten that message. Prior to the credit crunch there was 
some vain hope of that. Now, it is clear to the inside that is not going to happen, because the Chinese have no interest which is served by it happening.

What we are going to see until then is an inside that wants a redo on the last decade. Because, while the outside wants different policies, the inside is desperate to prove that the problem is not the Suburban-Industrial Complex and it's politics that alternates between arrogance and terror, but simply that George W. Bush could not manage it very well. Since the Suburban-Industrial Complex is not financially viable, this effort is destined to fail and people should now be thinking long term. Bush was stupid done stupid, now we get stupid done smart.

Obama is not a progressive, and while I don't know about never was, he now never will be. He is not a reactionary as Bush was, and will be better on a host of small issues, but no more than that. He will not appoint the grossly incompetent, he will not let cities sink beneath the waves. Obama's America, is a better, smarter, more robust and honest America. These mark a start, but not sufficiency. It is not enough to do stupid, smarter.

The older generations will give up when they have converted the last rock of coal, into the last barrel of synfuel, to drive the last SUV, to the last development, with the last super-sized order of processed food substitute to bring home to their obese kids. People need to realize that we are riding this bucket all the way down, and that only once there has been a catastrophic freeze over of the financial system, one that cannot be fixed by printing paper money for banks to sit on, then there will be change. They will never give up their suburban-industrial complex where God, "G" essential, put oil on this earth to be turned into green lawns in the land casino.

Presently the larger economic problem is simple: for a generation America has relied on the "paper for oil" economy. America buys oil, turns it into goods for suburbia, and then sells paper backed by the future earnings of the efforts of those suburbanites. This burned through the credit built up by the generation after World War II, and required that the US pursue a global policy of development arbitrage-- we would lend money to developing countries, and use the brute power of the dollar to collect it. The same countries that sold us resources held their own peoples back, and kept their own populations in political darkness.

However, there were two deep flaws in this system The first is that the oil economy cannot, could not, and will not, go on forever. The other is that those buying the paper wanted a greater return on it than the market would allow. And so, four times, we created games that were rigged in favor of those buying the paper. Each time the game broke, and the public was called upon to bail out the game. Each time pain was spread thinly to bail out, but it was noticeable enough to stifle hope and growth.

The first bailout was from the 1970's inflation game. The cost was raising social security taxes, a regressive tax, and cutting domestic programs. We were told there was a social security "surplus," but, in fact, that money was spent like all other money: on tax cuts and tanks.

The second bail out was from an era when we overpaid on treasuries, and allowed a oil, insurance, and export bubble to burst. This came tumbling down on a dark day in October of 1987, even though it had been unraveling for two years before. The cost was a massive binge of debt for a war in Iraq, and the "Savings and Loan" crisis. We are still paying that one off. Social Security was shaved by understating inflation, domestic programs were cut. However, in return, Clinton released defense technology into the wild. This created a new bubble: in the internet, and on globalization based on telecommunications.

When this burst, the bail out of those  who had had a great deal of money in the stock market was accomplished with Bush's tax cutting program. Bush's bubble was to be in US real estate, where we sold mortgage backed paper at interest rates higher than what treasuries could pay, but winked and promised them to be as good as gilt. Combined with a war for oil to drive US manufacturing, the Bush bubble deflated with a long whizzing sound in a "surge" combined with a deflation of housing prices. The third bail out: cheap Fed money, tax cuts for the wealthy, and a war and land bubble. This too collapsed, as the funny numbers, and faith based policies crumbled under the weight of reality.

So now we are at the fourth bailout of the neo-conservative era, Obama is in charge of this bailout, and whipped for the TARP bill which is at the center of "stabilizing" the banking system, and the question is how to pay for it. Before even economic recovery and restructuring are on the agenda, the question of how to pay for buying off the toxic assets of TARP has slammed to the top of Washington DC's agenda. The initial hope was to get China and countries in the Middle East to spend more. When financial types talk of "global imbalances" that is what they mean: Saudi Arabia and other oil rich, people light countries, and China, sell more to the rest of the world than they buy.

However, the very willingness of the previous era of globalization to do business with closed societies means that the US and Europe have no leverage. China also knows that while it has 2 trillion in currency reserves, it needs 40 trillion of infrastructure investments. China runs a yearly surplus, but is deep in the hole of underdevelopment. Thus China told Hank Paulson rather bluntly when he last visited that the bank bail out will not be on the back of Chinese ambitions.

That leaves only one idea in neo-conservative Washington: "entitlement reform" which means regressive taxation to pay for the toxic waste. This idea is Hooverism: telling people in a down turn that their wages are going down, and their risks are going up.

This is not an idea, but the act of a desperate junkie that has always been able to find a way to make the public pay for private mistakes before. This is why the upper echelons have suddenly become enthusiastic about a "carbon tax." The amount budgeted for decarbonizing the American economy is tiny, but the amount that could be made from harvesting another regressive tax is large. In India, the British taxed salt, because nothing moves under the hot sun, without salt.

By contrast the Progressive movement has put forward two simple ideas. The first is that a vast percentage of American GDP funnels into control over the country, rather than for the good of the country: Health insurance profits, neo-colonial wars, subsidies for corporations, and excessive profits for financials. Shifting this from waste to productivity would save 10% of GDP. The second is that the public is as able to determine the course of the country as a cadre of bankers and billionaires who have just created the fourth bust in as many decades. The fear of "Nationalization" is a fear of the few, of the many.

That Washington has not accepted these ideas can be seen by cold hard facts. TARP does not give the government voting control over the banks it has bailed out. At the time of the bail out, the progressive  answer, pushed by economists such as James K. Galbraith and others, was to give the money, not to the treasury, but to the FDIC, and have the FDIC take over banks and open them for lending. It worked for FDR, it can work for us.

That Washington has not accepted these ideas can be seen by cold hard facts. Any universal system of health care will have to have far more doctors and nurses. And yet, the stimulus bill does not have large grants for training new doctors and nurses. It takes roughly 7,000 in tuition for a state nursing school. Even with a 15,000 dollar stipend paid for by doing Nurse's aid work during classes, that is 44,000 dollars over two years for a nurse.

That Washington has not accepted these ideas can be seen by cold hard facts. Last spring, the man who is now director of the OMB testified to Congress about the size of infrastructure spending that could be justified purely on cost benefit considerations in the present. The stimulus bill falls far short of these projections.

That Washington has not accepted these ideas can be seen by cold hard facts. The stimulus bill provides for some renewable energy, most of which is ethanol subsidy. The amount for wind is touted as "doubling" and yet wind provides only a fraction of even the total renewables. Bush's energy department stated that wind could provide 20% of America's electricity by 2030. The stimulus bill falls short of even the Bush Administration's projects of what could be bought and installed without any bottlenecks at all. That is, even the Bush energy department, said this was a no-brainer.

That Washington has not accepted these ideas can be seen by cold hard facts. One road to universalizing care is expanding, not contracting, Medicare. And yet, Obama's first important order of business is to cut, not expand, Medicare.

That Washington has not accepted these ideas can be seen by cold hard facts. Broadband speeds in the US are 1/10th of what they are in tiger economies, who use broadband to save on energy. The stimulus bill provides less for broadband that the coming budget does for F-35 fighters. America just put a down payment on a new nuclear powered aircraft carrier, and ordered a wave of laser guided bombs.

If there is to be a second American Century, it will have to be a Progressive Century, and it will have to be a century of ideas. One cannot cut one's way to prosperity, any more than one can drink one's way to sobriety. What America needs is not to do less, but do more, and do more well.

The Progressive movement is the most dangerous force in American politics, precisely because Progressives are the party of ideas in American politics. These ideas are clear, and effective. Many have been tested in countries around the world, and in states across the nation. The countervailing forces of cost cutting and cramming down, have been tried, and already failed by their own measurements.

A holiday fable: These days, the house that Jack built is looking pretty ramshackle

Jack's house has seen better times -- as have we all.

Since we're all gathered 'round the fireplace this day after the Night Before Christmas, how about another shaggy-dog fable?

In that small group of smart folks I've come to turn to for insight into the economic mess, we've heard here recently from Dean Baker and Ian Welsh. Now Stirling Newberry has updated a classic for our parlous times (note that the version posted on The Agonist is chockful of links). -- Ken

The House That Jack Built

This is the house that Jack bought.

This is the mortgage that paid for the house that Jack bought.

This is the fraud, that the mortgage processor committed to get the loan, that paid for the house that Jack bought.

This is the bank, that dished off the loan, that was obtained by fraud, to pay for the house that Jack bought.

This is the quant, who sliced up the loan, by fudging the numbers, so he could take the dished loan, that was obtained by fraud, to pay for the house, the Jack bought.

This is the dealer, who without checking the numbers, shipped off the tranches, with the the quant's fudged up numbers, from the dished out loan, that was obtained by fraud, to pay for the house that Jack bought.

This is the monoliner, that papered the tranches, shipped off by the dealer, with the the quant's fudged up numbers, from the dished out loan, obtained by fraud, to pay for the house that Jack bought.

This is the investment bank, that securitized the the foreclosure, shipped off by the dealer, with the the quant's fudged up numbers, from the dished out loan, obtained by fraud, to pay for the house that Jack bought.

This is hedge fund, that sold the Default Swap, that securitized the the foreclosure, shipped off by the dealer, with the the quant's fudged up numbers, from the dished out loan, obtained by fraud, to pay for the house, that Jack bought.

This is the tax break, that fed to the hedge fund, that sold the Default Swap, that securitized the the foreclosure, shipped off by the dealer, with the the quant's fudged up numbers, from the dished out loan, obtained by fraud, to pay for the house, that Jack bought.

This is deficit, caused by the tax breaks, that fed to the hedge fund, sold the Default Swap, that securitized the the foreclosure, shipped off by the dealer, with the the quant's fudged up numbers, from the dished out loan, obtained by fraud, to pay for the house, that Jack bought.

This is the War, that ate up the money, that ballooned out the deficit, caused by the tax breaks, that fed to the hedge fund, sold the Default Swap, that securitized the the foreclosure, shipped off by the dealer, with the the quant's fudged up numbers, from the dished out loan, obtained by fraud, to pay for the house, that Jack bought.

This is the downturn, that followed the War, that ate up the money, that ballooned out the deficit, caused by the tax breaks, that fed to the hedge fund, sold the Default Swap, that securitized the the foreclosure, shipped off by the dealer, with the the quant's fudged up numbers, from the dished out loan, obtained by fraud, to pay for the house, that Jack bought.

This is the takedown, that accelerated the downturn, that followed the War, that ate up the money, that ballooned out the deficit, caused by the tax breaks, that fed to the hedge fund, sold the Default Swap, that securitized the the foreclosure, shipped off by the dealer, with the the quant's fudged up numbers, from the dished out loan, obtained by fraud, to pay for the house, that Jack bought.

This is the pink slip, because of the Takedown, that accelerated the downturn, that followed the War, that ate up the money, that ballooned out the deficit, caused by the tax breaks, that fed to the hedge fund, sold the Default Swap, that securitized the the foreclosure, shipped off by the dealer, with the the quant's fudged up numbers, from the dished out loan, obtained by fraud, to pay for the house, that Jack bought.

This is Jack's layoff, that is on the pink slip, because of the Takedown, that accelerated the downturn, that followed the War, that ate up the money, that ballooned out the deficit, caused by the tax breaks, that fed to the hedge fund, sold the Default Swap, that securitized the the foreclosure, shipped off by the dealer, with the the quant's fudged up numbers, from the dished out loan, obtained by fraud, to pay for the house, that Jack bought.

This is the foreclosure, brought on by Jack's layoff, that is on the pink slip, because of the Takedown, that accelerated the downturn, that followed the War, that ate up the money, that ballooned out the deficit, caused by the tax breaks, that fed to the hedge fund, sold the Default Swap, that securitized the the foreclosure, shipped off by the dealer, with the the quant's fudged up numbers, from the dished out loan, obtained by fraud, to pay for the house, that Jack bought.

This is the Fed, that bollixed the policy, to deal with the foreclosure, brought on by Jack's layoff, that is on the pink slip, because of the Takedown, that accelerated the downturn, that followed the War, that ate up the money, that ballooned out the deficit, caused by the tax breaks, that fed to the hedge fund, sold the Default Swap, that securitized the the foreclosure, shipped off by the dealer, with the the quant's fudged up numbers, from the dished out loan, obtained by fraud, to pay for the house, that Jack bought.

This is the Congress, that backed up the Fed, that bollixed the policy, to deal with the foreclosure, brought on by Jack's layoff, that is on the pink slip, because of the takedown, that accelerated the downturn, that followed the War, that ate up the money, that ballooned out the deficit, caused by the tax breaks, that fed to the hedge fund, sold the Default Swap, that securitized the the foreclosure, shipped off by the dealer, with the the quant's fudged up numbers, from the dished out loan, obtained by fraud, to pay for the house, that Jack bought.

This is Bush, they still let him fuck things up. Maybe it would have been different if he had been impeached. We will never know, now will we.

I don't know about you, but Jack is looking pretty fucked right now.

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