Archive

December 10th

How to help U.S. victims of free trade

    If Donald Trump was consistent about one thing on the campaign trail, it was his rejection of the prevailing Washington consensus in favor of globalization and free trade. Now, weeks before taking office, he has pledged to tear up the Trans-Pacific Partnership on the first day of his presidency and kept Carrier from moving a factory to Mexico. His campaign threats to withdraw from the World Trade Organization and slap high tariffs on China and Mexico are already causing tremors in the global economy, amid fears of a possible trade war.

    While data overwhelmingly show that globalization has been a net plus for the global economy, there is no denying that the domestic costs of the new economy have fallen disproportionately on certain sections of the workforce. Manufacturing jobs in the U.S. dropped by almost 6 million jobs between 2000 and 2010, leading to a host of social ills such as alcohol and opiate dependency, depression and community disintegration. Among the wrenching costs of Rust Belt industrial decline is the revelation that, after rising for decades, the life expectancy of white Americans has started to fall, driven in no small part by suicide and overdose.

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Holding a job provides much more than a paycheck

    In the aftermath of the 2016 presidential election, I'm starting to rethink one of my basic beliefs about the economy. For a long time, I've believed that what mattered most for economic well-being was money. Median income, consumption, wages -- all the things I cared about most were measured in dollars.

    Because of this attitude, I've supported lots of policies aimed at boosting the amount of money in the average person's pocket. I've called for Japan to liberalize its markets, and for the U.S. to encourage workers to move to places with better opportunities. And I've often assumed that a dollar of government redistribution is just as good as a dollar of wages.

    I'm starting to think I was wrong. Maybe not completely wrong, but I did ignore a big, important source of economic well-being: jobs.

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Donald Trump's Cabinet assembly instructions

    Congratulations! The American people have given you the formidable responsibility of assembling a Cabinet. The best Cabinet ever, you promised! And with none of the problems of previous Cabinets. And without any ties to plutocrats or the grotesque handful of corporations, like Goldman Sachs, that are squeezing the life out of the American people. You will not let the American people down!

    1. Surreptitiously Google "What is a cabinet?"

    2. The first thing that comes up is some sort of rap battle from that cursed musical "Hamilton."

    3. Okay. This is fine. You can do this.

    4. FIFTEEN DEPARTMENTS?

    5. If you had only known you would have had more children.

    6. Okay, you had better write these departments down. Where is a pen?

    7. "How is the Cabinet coming?" Melania Trump asks. "Fine," you say, holding up a pen. "Huge progress."

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A government of, by and for corporate America

    President-elect Donald Trump promised to punish U.S. companies that ship manufacturing jobs out of the country. Instead, judging from the way he has handled Carrier, he plans to reward them. Quite handsomely, in fact.

    As should be standard practice with Trump, pay attention to the substance, not the theater. United Technologies, the parent company of air-conditioner maker Carrier, has been threatening to move more than 2,000 jobs from Indiana to Mexico. Trump addressed this specifically during his campaign, vowing to hit the company with a punitive tariff.

    "If they're going to fire all their people, move their plant to Mexico, build air conditioners, and think they're going to sell those air conditioners to the United States -- there's going to be a tax," Trump said on "Meet the Press" in the summer. "It could be 25 percent, it could be 35 percent, it could be 15 percent, I haven't determined."

    As it turns out, how about zero percent?

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Why the U.S. Education Department never dies

    Ever since President Jimmy Carter created the U.S. Department of Education in 1979, conservatives have been trying to abolish it. Rick Perry, the Texas governor who in a 2011 presidential debate couldn't remember all the U.S. agencies he wanted to shutter, had total recall over one -- the Education Department.

    Will conservatives finally get the job done? Donald Trump, who also calls for the agency's demolition, will be in the White House, and Republicans have a majority in Congress. Betsy DeVos, an activist for school vouchers and critic of public education, has been nominated for education secretary.

    Before answering that question, let's run down what the department does. Its discretionary budget is all of $68 billion. Of that, $22 billion is for Pell Grants, awarded in amounts up to $5,800 to 8 million financially needy college students. If the department disappears, some other body would still need to determine eligibility for the grants and ensure their proper distribution.

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Trump's business is hardly too big to sell

    Donald Trump took to Twitter on Wednesday to hint at how he will avoid conflicts of interest after he trades in his hat as the Trump Organization's chief deal-maker for that of the U.S. commander in chief.

    Trump said he recognizes that it's "visually important, as president, to in no way have a conflict of interest." To that end, he said, "legal documents are being crafted which take me completely out of business operations." He plans to unveil how he'll go about this at a press conference on December 15.

    This shouldn't be too difficult. Trump can either appoint an independent third party to oversee the Trump Organization's business portfolio, or simply sell all the company's holdings.

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Trump's anti-regulation era has already begun

    When a federal judge in Texas last week froze a regulation extending overtime pay to thousands of workers, the holding had an extra sting. The hit to President Barack Obama's legacy came from his own appointee, not a Bush-era holdover. And the decision will make it much simpler for President-elect Donald Trump's Labor Department to scrap the regulation than it would have been without the judge's activist ruling.

    The regulation in question interprets the 1938 Fair Labor Standards Act. The law sets the federal minimum wage (currently $7.25 an hour), and says that employees who work more than 40 hours a week are entitled to time and a half -- that is, overtime.

    Section 213 of the act allows exemptions for employees "in a bona fide executive, administrative, or professional capacity." Because the law doesn't define those terms, the Department of Labor issues regulations that do. As amended in 1961, the law actually specifies that the overtime terms may be "defined and delimited from time to time by regulations."

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Trump wrecking crew on its way

    Elections have consequences. We've said it before, but it's never been truer than it is today.

    Yes, elections have consequences, as Donald Trump is now proving by filling each and every cabinet post with a man or woman whose sole mission is to roll back every advancement made over the last eight years under President Obama.

    Start with Rep. Tom Price (R-Ga.), who was tapped by Trump to be the new secretary of Health and Human Services. Since March 2010, the primary mission of the HHS secretary has been overseeing implementation of the Affordable Care Act. Not Tom Price. For the last six years, his primary mission has been to repeal Obamacare. Now he'll have his chance.

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Trump is surrounding himself with generals. That's dangerous.

    More than any other president-elect in recent memory, Donald Trump has sought out military brass to populate his inner circle. Trump met Monday with retired Army Gen.David Petraeus, a contender for secretary of state. He is also considering retired Marine Gen.James Mattis as a potential defense secretary, retired Marine Gen.John Kelly for secretary of state or homeland security, and Adm. Mike Rogers as the director of national intelligence. His national security adviser-designate, Michael Flynn, retired from the Army as a lieutenant general after decades as a military intelligence officer. And CIA Director-designate Mike Pompeo graduated from West Point and served during the Cold War as an Army officer.

    There is a great American tradition of veterans holding high political office, from Presidents George Washington and Dwight Eisenhower to senior officials such as Secretary of State Colin Powell and Veterans Affairs Secretary James Peake in the George W. Bush administration, and Veterans Affairs Secretary Eric Shinseki and national security adviser James Jones in the Obama administration. A typical administration, though, starts out with few recent generals in key positions. Filling as many slots with retired brass as Trump is poised to do is highly unusual.

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December 9th

Trump and the Carrier plant: Smart politics, unsustainable economics

    Once, on a visit to the French countryside, I visited the most beautiful, picturesque little country farm I'd ever seen. The farm produced an organic yogurt for the market and, ever the annoying economist, I asked my host how this boutique operation could compete with factory farms. "We couldn't possibly do so," he told me. The farm never came close to profitability and survived only because of deep subsidies.

    This revelation led to the inevitable compare-and-contrast discussion between the proud French farmer and efficiency-oriented American. The punchline of that conversation came back to me Wednesday for a topical reason I'll reveal in a moment. The farmer explained to me that the way to think of his operation was that of a nonprofit that the public willingly supported in order to enjoy truly organic food and the existence of a quaint, non-corporate farm (it was open to visitors, which was how I happened to be there).

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