January 27, 2021

Buy American

President Biden has just announced he will require “Buy American.” 

There is a better solution, but he has no choice.

In the aftermath of Trump’s popular demand for “made in America,” and “America First,” it would be political suicide to President Biden and the Democratic Party to deny the reality of this popular sentiment. A big segment of Americans believes this is the way to go. 

These Americans do not understand the complexities of globalization or the implications of nativism. We seem to be lost in a xenophobic haze. 

Globalization is a good thing. Americans can save money on their purchases by buying foreign products—a lot of money. Most of our imports of consumer goods come from developing countries where the cost of labor is only a fraction of US labor costs. That’s why so many Trump supporters shop at WalMart, where up to 75% of all products were coming from China in recent years.

If major consumer cost savings accrue from globalization, then why doesn’t President Biden endorse globalization? Two reasons: First, the political reality is that a big swath of Americans don’t understand the relative costs of labor and the result in product prices. After all, they were buying all those Chinese products when Trump said he had a better solution and bought his promises. Maybe Trump supporters forgot their savings on consumption and focused only on the jobs reality in the US. They believed his outrageous claims that the US can be competitive again in manufacturing. That’s not true. We cannot turn back our economy to times when we were able to make a shirt for the price made in China or Bangladesh today. Virtually no economists bought his plan to restore American manufacturing. 

Does President Biden fail to understand the above? Not likely. He’s simply politically astute. If Trump supporters bought the Kool-Aid, they’re not ready for American cooperation with the Chinese. Few Trump supporters believed the truth that Trump’s trade wars cost the US billions. Nothing was gained and much lost, but the popular Trump supporter sentiment was positive.  But Democratic majorities in the House and the Senate are very thin, and President Biden needs the added power of popular support for key legislative proposals. 

Globalization was a huge benefit to American consumers and to large corporations. It was also a huge benefit to workers in developing countries. Millions rose from poverty in China across the 80s and 90s by moving from farms to factories and sending money home to their families. We should feel good about that, as citizens of the world.

But after decades of uncontrolled globalization, it became increasingly clear that some American workers had indeed lost their jobs to foreign manufacturers. Steel, textiles, furniture, toys, bicycles, and many other products moved to developing countries in Asia or South America. In my own home state of North Carolina, thousands of middle-aged manual workers were laid off. There was nothing available to replace those good jobs. Factories closed. But, as globalization rushed ahead, none of these strategies were employed. Call centers moved to India or The Philippines, where English is taught. US manufacturers opened plants abroad or contracted with foreign companies for manufacturing. This went on for years without any government policies to remedy the impact on pockets of American workers.

There is a strategy which could profitably accommodate the benefits of globalization net of the costs. Careful assessment of the predictable job losses by product and by geography could initiate a plan to either forego that particular product going abroad or provide for alternative employment for those expected to lose jobs. That could take the form of alternative job training, relocation and employment counseling, and unemployment insurance. If the overall benefit to the economy and the citizenry is found to be net positive, such a policy would be justified.

So, Biden is forced to declare Buy American. This choice is justified politically, but not economically (and not morally). What will be the challenges? First, costs of previously imported products will go up. WalMart shoppers will be dismayed with the prices. Second, American manufacturers will aggressively seek product cost reductions. These can only come from two sources—labor and capital. Not much can be saved on labor, considering American labor costs. Producers will seek to invest in technology such as robots. This will come at the expense of laying off workers.

There is a healthy academic debate about the impact of technology on jobs, some claiming losses and some claiming gains—jobs lost in one area are offset by new jobs in another area. If there are indeed new jobs created to replace those lost, there seems agreement that many of the new jobs will be lower paid jobs such as service workers such as cleaners and caring for older citizens, uber drivers, clerical workers, fast food workers, etc. Better paying jobs in manufacturing those robots or programming them will require significant levels of re-training.  

We’re talking about a transition which will take years. There will be much pain and disruption along the way. Many of our uneducated who are in their 50s will not be able to make the change. Much will be needed from the government in effective support of the transition. And no matter how thoughtful and well-intended the Biden administration may be along the way, Conservatives will resist providing the necessary support. And, we are at a low point in terms of confidence in government on either side of the aisle.

January 24, 2021

A big word is being used by media and politicians, to described the feelings of those who rioted at the US Capital on January 6. What does it mean?

“To disenfranchise is defined as to take away someone’s right to vote or to deprive someone of power, rights and privileges.”

We have disenfranchised millions of Americans, predominantly working class non-college citizens. They were not denied their right to vote, but they were perhaps denied two things: They were denied the attempt to overturn a fair election on the basis of alleged fraud which was rejected in some 60 court appeals and by the 50 states and the Electoral College; but, they were indeed denied other elements of personal power, rights, and privileges.

Let’s lay the false allegations of a fraudulent election at the feet of the outgoing President. Had he acknowledged the election to be fair, anytime prior to January 6, after all his court challenges were exhausted, it is likely his followers would have dropped that cause of their disenfranchisement.

But everyone now knows that much of the disenfranchisement among our working class has been growing for decades. It has grown into a combustible cocktail of anger which erupts periodically across the US. Storefronts are broken into and buildings are set on fire.

Bill Maher said, “maybe they just hate windows.” But it’s much more than that. Breaking windows is just the expression of frustration against “the establishment.” Most of them would acknowledge they never intended to simply wreak havoc on our small businesses, it’s just that those are the storefronts on the streets where they march and experience the frenzy of group excited frustration with all that has been denied them.

Let me double back to the unproven assertion I have argued for years in a variety of ways, simply this: For the majority of our disenfranchised, the root cause is lack of opportunity. That means that I don’t have decent job choices, decent wage opportunity, cannot get training or education for myself or my family, can’t afford good health care, can’t afford good housing, and never seem to have enough to even be sure of food. I have nothing for emergencies, even as simple as car repair. I can’t get to work without my car because maybe I live far out of the city in which I work because rents are too high close to my work. I am disenfranchised, and my friends are too, and we are angry. Very angry.

The very basic frustration arising from lack of opportunity has morphed and hardened into a level of hatred for those imagined to be responsible. It has galvanized around other frustrations, such as objections to gun rights being threatened or abortions being allowed. But it is hard to imagine that most extremists (right or left) simply developed their anger and commitment based on hating people of color, hating globalization, or simply being pro-choice or pro-life, or any of the other (and many) non-economic elements of the protests.

Maybe some do not identify their frustrations with their economic woes. But I argue that the vast majority of our disenfranchised, the protestors and those not yet protesting but perhaps vulnerable to future protests or even future violence, are coming from a fundamental frustration with lack of opportunity.

How is it that almost 50 years of government since the 70s has not delivered a fair shake to our working class? US inequality is the highest among developed countries. US poverty remains near the levels of 50 years ago. Our federal minimum wage of $7.25 hasn’t been raised since 2009. That’s $15,080 per year. That means trying to find an apartment costing $500 per month. There aren’t any of those in San Francisco. My previous blog post lists a number of added negatives brought on by the pandemic.

So, why have both Democrats and Republicans failed to deliver improvements to our working class? America is unique in its ethos of independence. We are not big on community and the collective good. We call that socialism. We believe everyone can make it if they try, no matter their gender, religion, race, or color. Almost no matter their handicaps. We discount the value of good parents and friends, and especially the value of government in helping us achieve. While there have been some notable periods of greater fairness (after WW II and with Lyndon Johnson’s Great Society, a neoliberal economic policy took hold in the late 70s and has sustained. Unmanaged globalization didn’t help. Since then, no President of either Party has made a strong commitment to fixing it, and weak attempts have been easily rebuffed by Conservatives, decrying “the welfare state.” In fact, our contribution to social welfare is less than that of any other developed country, after taxes. In fact, advanced countries with much higher social welfare operate very successfully for all–e.g., Denmark or Norway.

What can be done? Here’s the top of my list:

• Pandemic relief to individuals and small businesses
• Raise the minimum wage
• Commit to reducing poverty, inequality and opportunity–set quarterly goals and reporting measures, publicize them
• Establish a Commission charged with finding solutions to improved opportunity for our working class, members from bi-partisan politics, local governments, universities and small and large businesses, as well as academia. Require reports quarterly, share findings publicly, no matter how negative
• Government not to create solutions, but to establish incentives, such as tax credits, to reward businesses and communities which create solutions resulting in more living wage jobs

How many riots like January 6 must we experience before we see the nearness of real mayhem? Is a revolution the only way for us to make a little sacrifice and do right by our working class?

Jan 14, 2021

Donald Trump rode to his populist Presidency by seizing upon the frustrations of mostly white male blue collar workers. His own life was far from that–inheriting $40 million from his wealthy father, (mis) managing a real estate empire from luxurious offices and chauffeur driven limousines. He’d probably never been to a farm or factory, and was not a church goer. But, as he began his campaign, he discovered the frustration of this large constituency which had not been addressed by policies in previous administrations across the past 50 years. Not since the 70s had the working class enjoyed a fair shake in regard to jobs, opportunity, and wages. He suddenly became a Christian and began to promise return of jobs lost to China, plus protection from immigrants, increased security, gun rights, and opposition to abortion–popular with this group.

I have argued for years that inequality should be our greatest concern. It’s not so much that the ranks and wealth of the top 10% have been skyrocketing. They have, but turns out the working class is not so disturbed by that. The concern of the bottom 50% is that they cannot enjoy a decent life in the meantime. Unable to afford a safe and decent home. Not enough job opportunities. Wages insufficient for family health care, good education for the kids, even food. These seemingly indisputable rights of life in America have been denied the working class for almost 50 years. Democrats and Republicans are to blame. Frustrations were increasing.

These workers have been vocal–as at Trump’s rallies. They can also be violent, as at the Capital on January 6. Republicans argue that their grievances are legitimate. The “grievance” that the election was “stolen” is NOT legitimate. However, their basic needs being overlooked repeatedly by the governments of both Democrats and Republicans are indeed fully legitimate. No wonder they have lost confidence in our institutions and are attracted to a populist who offered both fake culprits and fake solutions, and who promised to “empty the swamp” in Washington.

Can anyone deny that the protests of blue collar males has little to do with their incomes, their opportunity, the lackluster services or help from the government? If not these, as primary and entirely legitimate grievances, then what? Does anyone really imagine they are behaving this way because they hate immigrants, they hate foreign countries, or solely because they were told by their President that the election was stolen?

Their plight never gets better. And, whenever a downturn comes, be it the economic downturn of 2007, the Covid downturn of 2020, or the advancing impact of climate change, the poor suffer more. The top 10% continue to prosper, but the working class struggle pay the bills for basics–housing, food, education, health.

According to a new report by the Institute for Policy Studies (IPS) and Americans for Tax Fairness (ATF), the collective wealth of America’s 651 billionaires has jumped by over $1 trillion since roughly the beginning of the COVID-19 pandemic to a total of $4 trillion at market close on Monday, December 7, 2020.

Meanwhile, ordinary Americans have not fared well during the pandemic:

• Nearly 14.9 million have fallen ill with the virus and 284,000 have died from it. [Johns Hopkins Coronavirus Resource Center]
• Collective work income of rank-and-file private-sector employees—all hours worked times the hourly wages of the entire bottom 82% of the workforce—declined by 2.3% from mid-March to mid-October, according to Bureau of Labor Statistics data.
• Nearly 67 million lost work between Mar. 21 and Oct. 7, 2020. [S. Department of Labor]
• 20 million were collecting unemployment on Nov. 14, 2020. [S. Department of Labor]
• 98,000 businesses have permanently closed. [Yelp/CNBC]
• 12 million workers have lost employer-sponsored health insurance during the pandemic as of August 26, 2020. [Economic Policy Institute]
• Nearly 26 million adults reported their household not having enough food in the past week between Nov. 11-23. From Oct. 28 to Nov. 7, between 7 and 11 million children lived in a household where kids did not eat enough because the household could not afford it. [Center on Budget & Policy Priorities (CBPP)]
• 4 million adults—1 in 6 renters—reported in November being behind in their rent. [CBPP]

Trump did nothing for this group. But the problem of neglecting them predates Trump by decades. It began to explode under Trump. The neglect, the suffering, and the cocktail of Trump rhetoric lit a bonfire which will not be quenched by voting Trump out.

If there is any positive to four years with Trump, it is this: He awakened the disenfranchised, and they’re angry and vocal. Maybe our newest government will be forced to seriously address their legitimate needs. We are all to blame for negligence–spending money on tax breaks for the wealthy, increased military, and numerous pork projects, while a new breed of terror is rising up from inside our country–demanding solutions, with some prepared to use violence to achieve their ends.

Source: Inequality.org, dec 7 2020

Jan 13, 2021

The Republicans are now making a big deal out of what they describe as the righteous indignation, totally justified, that a big segment of the 74 million who voted for Trump feel the election was stolen.

Stolen, and they want it either restored to Trump, or at the very least, a convincing process engaged to study, analyze, and verify the election results. That’s what they want.

What’s missing?

Three things are missing. First, the 50 States each studied and analyzed their election returns, several of the “battleground” states re-counting and taking other measures to study any questionable ballots in regards to signatures and other factors. They all reported that they were entirely satisfied with their results. They all reported that even if the very small number of discrepancies were further studied, they could assure that the changes from such a small number would never be sufficient to change the outcome of the election in their states. Subsequently, some 60 lawsuits were turned down by judges in state and federal courts across the country, including our Supreme Court–finding absolutely no merit to the only anecdotal evidence offered.

Furthermore, the Federal Election Commission reported that they had done their own preparations thoroughly and that this was the most secure election in American history.

So, there was no one,. no official body, no court, no state Attorney General or Secretary of State, who found evidence that a court considered valid to show the election was stolen.

So, no one.

But the third reason is the clincher: Who was it who created the illusion that the election was stolen, in the face of all this evidence to the contrary? President Trump did that. President Trump from the day of the election and daily after that, in speech after speech, rally after rally, tweet after tweet, incited his base with the belief that the election had been stolen.

That’s what’s missing. That’s what the Republicans do not mention when they are trying to gain sympathy for millions of disenfranchised Americans who believe the election was stolen.

Since the perpetrator of the lie is not going to recant his claim, and the genie is out of the bottle now. there is little that can be done to assuage the frustration of those millions who bought the lie.

Biden’s team is certainly studying a review of the election as a possibility, but it’s not that simple now. Given the level of passion Trump has incited, who can devise, who can imagine, a process that would really be sufficient to resolve that falsehood? It’s next to impossible.

Can anyone imagine a process that would convince Jim Jordan and Matt Gaetz?

Jan 10, 2021

With the Trump incited mob attack on the Capital this week, following by social media giants halting his access to his megaphone, the Donald is now inevitably headed for oblivion. He’s not going to succeed in another try for the Presidency, no matter whether he is indeed impeached and convicted. He is not gong to be a major voice in the (new) Republican Party either.

Admittedly, these are my convictions, but increasingly also those of many others. Not just the dreams of the entire Democratic Party, although clearly that is our fervent hope. Increasingly, moderates and even notably Republicans like Toomey and Murkoski are calling for his early departure from the Presidency. Others like Sasse and Graham have severely criticized his rhetoric leading to the capital rampage. Clearly, his “base” will be significantly shrunk by these recent events. This alone will dramatically lower his influence over the more politically aspirant members of his party. The fear that his “tweets” (presently permanently suspended by Twitter) or other channelled criticisms will destroy a Republican’s re-election chances have diminished significantly. This was one of his most powerful weapons and measures of Party control, now weakened if not destroyed. Members of his staff and even Cabinet members have resigned. Some notable politicians and media personalities previously praising his every action, have turned critical–e.g., Matt Schlapp, Chris Christie, Mark Levin, and others. Even Mitch McConnell strongly denounced Trump’s behavior in his speech to the Senate at the meeting for electoral vote count.

Trump is facing a possible 2nd Impeachment or removal by 25th Amendment, and is likely to be facing multiple federal and state investigations and civil lawsuits after departing office. He is blamed by many for costing the GOP the Georgia Senatorial runoff elections, thus denying Republicans the Senate in 2021, due to his persistence in claiming elections cannot be trusted.

The counter opinion? A duly elected President ending his term with 75 million votes, will most certainly continue to be a major force in American politics and has a high probability of being re-elected in 2024. After all, he is able to command a “base” of followers numbering 80 million on Twitter (until denied access only recently). He was able to gather tens of thousands to dozens of rallies he conducted across his four years. He is applauded on a wide variety of right wing media, including Fox and other Murdoch sites and publications, and also extremist media. He is popular among those who subscribe to conspiracy theories and those who believe in white supremacy. Regrettably, these are no small number of Americans, and taken alone enough to assure the continued relevancy of the clear leader of such beliefs in the way to Make America Great Again. Furthermore, his policies appeal to many: Abolishing abortion, preventing immigration, fighting with allies over relative world power, lowering taxes and reducing regulations. Blaming immigrants and foreign nations for our problems. Insulting anyone who disagrees. Even lying repeatedly, daily, decrying the media as “the enemy of the people.” Even this, all of this–popular with millions of Americans.

Finally, on his side of the future role ledger: Given that these beliefs have widespread support, Trump’s disappearance will not make them go away. Instead, they will sustain and will need a populist leader to lead them. Who better than a former President who has been unfairly treated by the Left and by the “swamp,” and by our failed institutions. Who better? After all, his whole persona has been described as built on grievance.

OK. Maybe. But I don’t think so. One major reason is my conviction that a majority of Republican politicians do not really like Trump, but have simply feared him. Many will be glad to get him out of the way. For one thing, the Republican Party wants to get on with restoring itself to its Conservative ideals, which Trump certainly did not exemplify. For another, no matter the media’s controls continuing or not, no longer President, he wields far less power and influence over their political futures. For many, their constituent balance has now likely shifted away from Trump, on balance. Finally, many Republican politicians have ambitions of their own for the Presidency–including Rubio, Cruz, and others. If they continue as sycophants to a departed ‘unhinged’ President, support him for a 2024 run he might again win, they must wait at least 8 years from now for their own chance. That’s too long. Human psychology on a personal level will play in. My allegiance only goes so far when it is up against my own opportunity.

He’s done. He’s relegated to nothing more than a far Right voice, if he can find a new megaphone. He isn’t even consistent, has no unifying meaningful political philosophy, and is left to a weakening voice, primarily casting blame on the innocent. It will be a sad scenario, as he loses power and fades into oblivion.

Think Richard Nixon, who was popular right up to the end, but immediately faded into oblivion.