The New York Times ran an article last week with a headline saying that the 2020 Democratic presidential contenders faced a major problem: "how to be tougher on trade than Trump." Serious readers might have struggled with the idea of getting “tough on trade.” After all, trade is a tool, like a shovel.  How is it possible to get tough on a shovel?

While this headline may be especially egregious, it is characteristic of trade coverage which takes an almost entirely Trumpian view of the topic. Trump portrays the issue as one of some countries, most obviously China, benefitting at the expense of the United States. The media take a somewhat different tack on this country versus country story, but they nonetheless embrace the nonsense Trumpian logic.

For Trump, at least in his rhetoric, the trade deficit is the central measure of winners and losers. In the case of China, its huge trade surplus with the United States ($420 billion or 2.1 percent of GDP in 2018) makes it Trumpian enemy #1. The trade deficit certainly is a problem for U.S. workers, but this doesn’t mean that China is winning at the expense of the United States, because of “stupid” trade negotiators, as Trump puts it.

The U.S. trade deficit with China was not an accident. Both Republican and Democratic administrations signed trade deals that made it as easy as possible to manufacture goods in China and other countries, and then export them back to the United States.

In many cases, this meant that large U.S. corporations, like General Electric and Boeing, outsourced parts of their operations to China to take advantage of low cost labor there. In other cases, retailers like Walmart set up low cost supply chains so that they could undercut their competitors in the U.S. market.

General Electric, Boeing, Walmart and the rest did not lose from our trade deficit with China. In fact, the trade deficit was the result of their efforts to increase their profits. They have little reason to be unhappy with the trade deals negotiated over the last three decades.

It is a different story for workers in the United States. As a result of the exploding trade deficit, we lost 3.4 million manufacturing jobs between 2000 and 2007, 20 percent of the jobs in the sector. This is before the collapse of the housing bubble led to the Great Recession. We lost 40 percent of all unionized jobs in manufacturing.

It is also important to point out – contrary to what you generally read in the paper – the loss of manufacturing jobs in this seven year period was not part of a longer downward trend. There had been only a modest decline in manufacturing employment over the prior three decades. The claim that we suddenly saw massive job loss in this sector due to automation, which just happened to coincide with the explosion of the trade deficit, is what economists refer to as “nonsense.”

Dean Baker
The Washington Post, August 20, 2019

Dean Baker
Truthout, August 19, 2019

Mark Weisbrot
The New York Times, 19 de agosto, 2019

Millions of Argentines remember the last depression and the role the IMF played. Many also remember the rapid improvement in people’s lives over the ensuing decade. That collective memory and consciousness may now determine the outcome of this recurring d

The stock market enjoys a mythological place not only among mainstream media types, but also among many progressives. For some reason this measure of expected future corporate profits is taken as a measure of economic well-being.

The fact that the media obsesses over the stock market hardly needs to be mentioned. If there is one item about the economy that we can be sure will be repeated every day, it is the movement in the Dow or the S&P 500. And, needless to say, an upward movement is good news and a downward movement is bad news.

But the view that the stock market is telling us something about the well-being of the economy goes far beyond just ill-informed media types. In the lead up to the 2016 election, Justin Wolfers, a University of Michigan economics professor, and a fellow at the Peterson Institute for International Economics, had several New York Times pieces arguing that the wise investors in the stock market recognized that Trump would be bad news for the country. He pointed to sharp declines in the market in response to events making a Trump win more likely.

The Wolfers hypothesis suffered a serious setback in the weeks and months immediately following the election. The S&P 500 was up more than 5 percent in the first month after Trump’s victory. It continued to rise throughout 2017, hitting a peak in January of 2018 that was more than a third higher than its value on the eve of the election.

Wolfers was far from the only one taking stock market movements as a measure of economic well-being under Trump. When the market slumped last fall, there were many Trump critics who seized on this as evidence of Trump’s failings as a manager of the economy.

This view that the stock market is a measure of economic well-being is bizarre, because it is so completely at odds with what the stock market is. The stock market is a measure of the expectations of future profits of companies that are listed in the exchange: full stop.

  This week the Department of Homeland Security (DHS) officially published regulations that radically expand the definition of an archaic immigration law term, public charge, to include various non-cash benefits that supplement earnings and other income,

With both Social Security and Temporary Assistance for Needy Families (TANF) having anniversaries this month — August 14, 1935 and August 22, 1996, respectively — it’s a good time to compare and contrast what they do for children and youth. If you listen

August 13, 2019

August 13, 2019 (Prices Byte)

Dean Baker
Truthout, August 12, 2019