Current

Trump’s Big China Flop and Other Failures

Though I generally believe Paul Krugman is an also ran, in this case he seems to have gotten it right.

AE

Opinion | The New York Times

By Paul Krugman

Do you remember Donald Trump’s trade war? You can be forgiven for having forgotten all about it, given everything that has happened since; it sounds trivial compared with his effort to stay in power by overturning a fair election. Even in terms of policy while in office, it was far less important than his pandemic denial, and probably less important than his tax cuts or his sabotage of health care.

But the trade war was uniquely Trumpian. His other policy actions were standard-issue Republicanism, but the rest of his party didn’t share his obsession with trade deficits; indeed, he probably wouldn’t have been able to do much on that front except for the fact that U.S. law gives presidents enormous discretion when setting tariffs. Only Trump really considered trade deficits an important issue; and he, er, trumpeted what he called a “historic trade deal” under which China agreed to buy an additional $200 billion in U.S. goods and services by the end of 2021.

Now, Chad Bown of the Peterson Institute for International Economics, who has been the go-to source on the trade war from the beginning, has a final assessment of that deal. And it turns out to have been a complete flop: “China bought none of the additional $200 billion of exports Trump’s deal had promised.”

So Trump was a chump; the Chinese took him to the cleaners. But if you want to do a post-mortem on the trade war, Trump’s haplessness in dealing with foreign leaders is actually a minor part of the story. Far more important is the fact that the shocks we’ve been experiencing since the pandemic began make the Trumpian view of trade look even more economically foolish than it did when he took office.

In the world according to Trump and Peter Navarro, the man he chose as his trade czar, international trade is a zero-sum game. If other countries buy stuff from America, we win; if we buy stuff made abroad, we lose. Navarro and Wilbur Ross, Trump’s commerce secretary (he really knew how to pick them), made this explicit in a policy paper they put out during the 2016 campaign, which asserted that the trade deficit subtracts one-for-one from U.S. growth: Every dollar we spend on imports reduces our G.D.P. by a dollar.

Economists scoffed at this crude mercantilism, which completely ignored the point that imports can make us richer, because the whole reason we buy some goods from abroad is that they are cheaper and/or better than domestically produced alternatives. This is especially true in the modern world economy, where many products that enter international trade are “intermediate goods,” like parts that are used in production. As it turned out, Trump’s tariffs disproportionately affected intermediate goods. So the tariffs raised U.S. production costs and, according to almost all estimates, reduced the number of manufacturing jobs.

Still, mercantilism isn’t always unadulterated nonsense. (Sometimes it’s adulterated nonsense?) Under certain conditions — namely, when the economy is depressed because overall demand is inadequate — trade deficits can reduce output and jobs, and actions to reduce those deficits can act as a form of economic stimulus. That’s why, back in 2010, when lack of demand was the overriding constraint on the U.S. economy, I called for strong pressure on China to end the undervaluation of its currency.

And it’s possible that one of these years we will once again find ourselves facing persistent problems of inadequate demand. But that’s not where we are now.

We are, instead, currently living in a world of constrained supply — a world, in particular, in which domestic factories are struggling to produce what consumers want. Those supply constraints are why inflation has surged.

As we have entered this world, the United States has plunged deeper into trade deficit:

How should we think about this plunge? Would we be richer and better off if we didn’t allow as many imports?

The answer should be an obvious “no.” As many economists have pointed out, the pandemic has caused consumers, still nervous about face-to-face interaction, to switch from buying services to buying goods:

Imports have surged because many of the goods consumers want are produced abroad, and America doesn’t have the capacity to produce them here — at least not on short notice. Furthermore, even when we can satisfy demand with domestic production, that production, the tariff debacle tells us, often requires imported intermediate goods.

So if we had tried to block the pandemic-related import surge, we wouldn’t have had more jobs; we would just have had more shortages and even higher inflation. In fact, some economists have urged President Biden to help the fight against inflation by lifting the Trump tariffs — something he could do without congressional approval.

Unfortunately, it’s easy to see the political and strategic problems with doing this, no matter how much sense it would make. Trump may have been China’s chump, but Republicans would pounce on any action that could be construed as a gift to China, even if continuing Trump’s tariffs hurts us more than it hurts the Chinese government.

I’ve called today’s newsletter a post-mortem on Trump’s trade war, but, in fact, that trade war isn’t over. Trump’s trade policies were foolish and costly — they failed by any measure you choose — but it may be a long time before any president is in a position to undo the damage.

Read More on The New York Times

Published on: Author: Asher Edelman
Current

STAGFLATION

Dear Friends,

Here we are – Stagflation (when the inflation rate is greater than the growth rate) is back. Last seen in the late 1970’s and early 1980’s. Ultimately free market interest rates reached the high teens by 1982. The inflation broke – along with Nelson Bunker Hunt and his silver manipulation. We are on route worldwide to a repeat with the Fed on the wrong track and Congress at risk of sealing the tomb. We are far enough along so that no short-term fix is likely or even possible. If the Fed stays on its course and Congress does not act on the human infrastructure bill what will happen quickly is evident. Stagflation will continue with the inflation rates spiraling while the growth rate shrinks.

The divergence in wealth and income between the top 50% and the bottom 50% of the populace will increase substantially. (Wage rates never keep pace with a rampant inflation.) The poor will become poorer; the rich will hold their own as the rich own assets which will somewhat offset the wealth destruction inherent in inflationary times. To battle the inflation the Fed must veer towards caution. Endowing the banks with billions through asset purchases and a building Fed balance sheet only exacerbates the inflationary trend and subsidizes the banking community which seems to do just fine without continuous injections of taxpayer funds. Maintaining interest rates at deeply artificially low levels, though an acceleration of asset values and markets, has no beneficial effect on the growth of the economy. In fact, the results of these artificially loco rates are to depress growth and accelerate inflation. The increases in asset values and markets do not generally augment consumer buying power – in fact they reduce the consumer ability to buy overpriced goods – the average consumer does not benefit from escalating asset values as the average consumer’s only valuable asset is generally his or her home. Home value does not increase consumer buying power.

Approximately 25% of our population is at or past retirement age, dependent on pensions, return on savings, social security et al. This group of more than 80 million people are partially interest payment dependent for the income to purchase consumer goods. These older folks are able to contribute less and less to our consumer fueled economy further inhibiting growth. The case for low rates inhibiting growth while increasing asset values is a long one but enough said as to how. It is time the upper 20% of the population benefit from the low rates and the banking giveaways. Those benefits are unlikely to be spent in any way that accelerates consumer spending.

Why do I emphasize consumer spending? First because in the United states it is the primary motor of the economy. Without strong growing consumer spending, there can be no sustained inflation adjusted growth. It is without precedent in our economic history that with an impoverished middle and lesser class, the country has grown from anything but depression levels. The reason is simple. It centers around VELOCITY OF MONEY. (Lower income folks spend 100 – 110% of all income sources on consumer products. The highest earners spend less than 10% on consumer purchases.) Example: $1,000,000 income to lower income levels means $1,000,000 to $1,100,000 goes to consumer purchases while $1,000,000 of revenues to the highest earners are likely to produce only $100,000 in purchases. The larger the wealthy class and the greater the divergence the greatest resistance to inflation adjusted growth. This is a spiral; its net effect is a depression. The $1,000,000 is spent again and again in lesser amounts by the recipients. The $100,000 the same course.

So, what is the solution – no absolute solution but the right direction be achieved:

The Fed must stop the banking endowment and reduce its balance sheet in an adept fashion. This can be done without disruption as the Fed ownership of debt is, in the majority, government debt. In fact, the same entity is the borrower and the lender. Simple solutions abound if the banking profit machine is abandoned. Rates need to float to where they reflect real supply and demand to ultimately quash the inflation. Second the $3 trillion stimulus, now reduced to $2 trillion will have to happen, and promptly. Remember the recipients of this package spend all they receive. – “Growth”

Long term we must institute wage rates, through regulation if necessary, that allow all workers to earn a decent living wage. We must institute medical coverage and price controls for all medical and pharmaceutical charges. The United States, the richest country in the world, has the highest cost per capita of any nation and yet rates 39th in terms of the quality and success of treatment. That doesn’t make for a successful work force. The case for short term survival and longer term success is clear. Do we have the collective strength to achieve both? I think so but the proof of the pudding will be in the eating.

Asher Edelman

Published on: Author: Asher Edelman
Current

The Biggest Threat to America Is America Itself

By Nicholas Kristof

Opinion Columnist, The New York Times

We no longer have a White House aide desperately searching for a fire alarm to interrupt a president as he humiliates our country at an international news conference, as happened in 2018. And a Pew Research Center survey found that 75 percent of those polled in a dozen countries expressed “confidence in the U.S. president to do the right thing,” compared with 17 percent a year ago.

Yet in a larger sense, America is not back. In terms of our well-being at home and competitiveness abroad, the blunt truth is that America is lagging. In some respects, we are sliding toward mediocrity.

Greeks have higher high school graduation rates. Chileans live longer. Fifteen-year-olds in Russia, Poland, Latvia and many other countries are better at math than their American counterparts — perhaps a metric for where nations will stand in a generation or two.

As for reading, one-fifth of American 15-year-olds can’t read at the level expected of a 10-year-old. How are those millions of Americans going to compete in a globalized economy? As I see it, the greatest threat to America’s future is less a surging China or a rogue Russia than it is our underperformance at home.

We Americans repeat the mantra that “we’re No. 1” even though the latest Social Progress Index, a measure of health, safety and well-being around the world, ranked the United States No. 28. Even worse, the United States was one of only three countries, out of 163, that went backward in well-being over the last decade.

Another assessment this month, the I.M.D. World Competitiveness Ranking 2021, put the United States No. 10 out of 64 economies. A similar forward-looking study from the World Bank ranks the United States No. 35 out of 174 countries.

So it’s great that we again have a president respected by the world. But we are not “back,” and we must face the reality that our greatest vulnerability is not what other countries do to us but what we have done to ourselves. The United States cannot achieve its potential when so many Americans are falling short of theirs.

“America’s chronic failure to turn its economic strength into social progress is a huge drag on American influence,” said Michael Green, chief executive of the group that publishes the Social Progress Index. “Europeans may envy America’s corporate dynamism but can comfort themselves that they are doing a much better job on a host of social outcomes, from education to health to the environment.

“Rivals like China may see the fraying of America’s social fabric as a sign of strategic weakness,” he added. “Emerging economies, whose citizens are starting to enjoy quality of life ever closer to that of Americans, may be less willing to take lectures from the U.S. government.”

Biden’s proposals for a refundable child credit, for national pre-K, for affordable child care and for greater internet access would help address America’s strategic weaknesses. They would do more to strengthen our country than the $1.2 trillion plan pursued by American officials to modernize our nuclear arsenal. Our greatest threats today are ones we can’t nuke.

America still has enormous strengths. Its military budget is biggerthan the military budgets of the next 10 countries put together. American universities are superb, and the dynamism of United States corporations is reflected in the way people worldwide use their iPhones to post on their Facebook pages about Taylor Swift songs.

But they also comment, aghast, about the Capitol insurrection and attempts by Republicans to impede voting. American democracy was never quite as shimmering a model for the world as we liked to think, but it is certainly tarnished now.

Likewise, the “American dream” of upward mobility (which drew my refugee father to these shores in 1952) is increasingly chimerical. “The American dream is evidently more likely to be found on the other side of the Atlantic, indeed most notably in Denmark,” a Stanford study concluded.

“These things hold us back as an economy and as a country,” Jerome Powell, the chair of the Federal Reserve, said Tuesday.

More broadly, the United States has lost its lead in education overall and in investments in children. The World Bank Human Capital Project estimates that today’s American children will achieve only 70 percent of their potential productivity. That hurts them; it also hurts our nation.

We can’t control whether China builds more aircraft carriers. We can’t deter every Russian hacker.

But to truly bring America back, we should worry less about what others do and more about what we do to ourselves.

Published on: Author: Asher Edelman
Current

BEWARE

Dear All,

The Plunge Protection Plan has been in high gear this week, (that is the use of taxpayer money to prop up the markets for Trump’s political purposes.) It has been pretty active for the last four years but yesterday and today, blatant. Investors need to ask themselves what happens to that support on the occasion of a trumped Trump. Yes, when he loses will he continue to use taxpayer money to prop up the market?

See video below.

Asher Edelman

Robert Reich and Asher Edelman Talk Manipulation of The Stock Market and Donald Trump
Published on: Author: Asher Edelman
Current

Robert Reich and Asher Edelman (VIDEO) Manipulation of The Stock Market

Dear Friends,

I am releasing a short version of a video done with Robert Reich, a friend and great liberal thinker.

We are unable to release the full video on social media as there is quite some censorship prior to the election. We hope to release the whole after Joe Biden’s win.

Click the video below and share widely. Thank you!

Asher Edelman

Published on: Author: Asher Edelman
Current

HITLER REVISITED

Parents of 545 Children Separated at the Border Cannot Be Found

A new report shows hundreds of cases in which migrant children were taken from their families, and their parents, who were deported, cannot be located.

By Caitlin Dickerson

Radio spots are airing throughout Mexico and Central America. Court-appointed researchers are motorbiking through rural hillside communities in Guatemala and showing up at courthouses in Honduras to conduct public record searches.

Their efforts are part of a wide-ranging campaign to track down parents separated from their children at the U.S. border beginning in 2017 under the Trump administration’s most controversial immigration policy. It is now clear that the parents of 545 of the migrant children still have not been found, according to court documents filed this week in a case challenging the practice.

About 60 of the children were under the age of 5 when they were separated, the documents show.

Though attempts to find the separated parents have been going on for years, the number of parents who have been deemed “unreachable” is much larger than was previously known.

Under court order, the government first provided an accounting of separated families in June of 2018, reporting that about 2,700 children had been taken from their parents after crossing into the United States. After months of searching by a court-appointed steering committee, which includes a private law firm and several immigrant advocacy organizations, all of those families were eventually tracked down and offered the opportunity to be reunited.

But in January 2019, a report by the Health and Human Services Department’s Office of the Inspector General confirmed that many more children had been separated, including under a previously undisclosed pilot program conducted in El Paso between June and November 2017, before the administration’s widely publicized “zero tolerance” policy officially went into effect.

Under that policy, the Trump administration directed prosecutors to file criminal charges against those who crossed the border without authorization, including parents, who were then separated from their children when they were taken into custody. Some parents who crossed the border at legal ports of entry were also among those separated from their children.

The Trump administration fought for months against providing documentation on the additional families, arguing that it was not necessary because the children had already been released from federal custody into the care of sponsors, who are typically relatives or family friends. The parents of the children had already been deported without them.

But in June 2019, under court order, the government eventually acknowledged that an additional 1,556 children had been separated from their families; 200 of them were under 5 years of age at the time they were taken into custody.

When that information came out, the search efforts started again, but were made significantly more difficult by the amount of time that had passed between when the children were released from federal custody and when volunteer researchers began trying to find them. The effort hit another roadblock with the outbreak of the coronavirus pandemic, during which travel through the Central American countries where most of the families live has been severely restricted.

“The Trump administration had no plans to keep track of the families or ever reunite them and so that’s why we’re in the situation we’re in now, to try to account for each family,” said Nan Schivone, legal director of the organization Justice in Motion, which is leading on-the-ground search efforts for separated families.

The American Civil Liberties Union, which is leading the court challenge to the family separation policy, said it had also been unable to find 362 of the children, many of whom are likely living in the United States, whose parents were deemed unreachable.

“The fact that they kept the names from the court, from us, from the public, was astounding,” said Lee Gelernt, the lead attorney in the A.C.L.U.’s case over family separations. “We could have been searching for them this whole time.”

The latest findings were first reported by NBC News.

In some cases, members of the steering committee have had only names and countries of origin to go on in trying to locate separated parents. Even after conducting public record searches to identify the cities where the families were from, they faced additional hurdles. Many of the families had fled their homes because they were escaping violence or extortion, and intentionally withheld information from friends and neighbors about where they were going.

Researchers are presuming that about two-thirds of the parents now being sought are back in their home countries.

As part of the legal case over family separations in the Federal District Court in San Diego, overseen by Judge Dana Sabraw, the search efforts will continue and the government will be required to provide information about any additional families that are separated at the border.

As of October 2019, the government had provided contact information for more than 1,100 additional parents who had been separated from their children, but argued that it would not disclose information about some 400 of the parents because those individuals had criminal records that prevented the United States government from reuniting them with their children under Homeland Security Department policies.

Of the more than 1,100, the steering committee has been able to locate the parents of 485 additional separated children. The rest have not been found.

Published on: Author: Asher Edelman
Current

A NATION ADRIFT

by The Editorial Board

The New York Times

Vehicles fill a stadium parking lot before the start of a San Antonio Food Bank distribution. WILLIAM LUTHER/THE SAN ANTONIO EXPRESS-NEWS, VIA ASSOCIATED PRESS

Across America people are waiting for food, sitting in their cars in endless lines that stretch down streets or bend back and forth across blacktop parking lots. The scenes are reminiscent of the Great Depression: Images from a grim past come suddenly to life.

The coronavirus pandemic shut down much of the nation’s economy in the spring and, because the virus continues to spread, millions of people remain out of work.

At first, the Trump administration worked with Congress to provide aid to Americans in need. The Cares Act included one-time payments to most households coupled with an expansion in unemployment insurance.

Then the stock market began to recover, and Mr. Trump lost interest. As the federal funds ran out, the number of Americans living in poverty has grown by eight million since May, according to recent research. That increase happened even as the job market improved, a troubling sign that the economy isn’t recovering fast enough to make up for the shrinking social safety net.

Job losses have been concentrated among low-wage workers, many of whom now need help to feed their families. The result: In the wealthiest nation on earth, hunger is on the rise, and overwhelmed food banks are struggling to help those whom the government has failed.

The bodies of Oscar Alberto Martînez Ramirez, a Salvadoran migrant, and his nearly 2-year-old daughter, Valeria, after they drowned trying to cross the Rio Grande from Mexico to Brownsville, Texas. JULIA LE DUC/ASSOCIATED PRESS

IMMIGRATION HALTED

The Trump administration has worked to reduce the number of legal and illegal immigrants to the United States with a fanaticism and attention to detail that are notably absent from almost any other area of policymaking, save packing the courts with conservative judges.

The administration deliberately separated thousands of children from their parents to deter immigration. It cut the number of refugees admitted each year to the lowest level on record, denying sanctuary to thousands of people fleeing domestic and political violence. It has pursued the deportation of people brought to the country as small children, who have never known another country. It has prevented the immigration of scientists, engineers and other specialists whose talents might help to revitalize the American economy.

The president also is obsessed with building a wall along the Mexican border — an inane idea his advisers first suggested because they wanted him to talk about immigration, and they knew he liked to talk about building things. The wall became such a fixation for Mr. Trump that he shut down the federal government in late 2018 in an attempt to wring funding from Congress. When that failed, he sought funding by declaring a national emergency. And when that failed, too, he took money from the defense budget to build a little bit of a wall.

If America once shone as a beacon of hope to the world, Mr. Trump tried his best to extinguish it.

Scene from the Women’s March in Washington, D.C. SARAH SILBIGER/THE NEW YORK TIMES

WOMEN’S RIGHTS UNDER ATTACK

There have been moments when it’s felt like the backlash to electing a man who’s been credibly accused of sexual assault by more than a dozen women — and who has in fact bragged about assaulting women — has been so profound, so righteous, that it could be harnessed to overhaul society as we know it.

The raw fury of the Women’s March the day after President Trump’s inauguration and the flourishing of the #MeToo movement were promising. Some men were held accountable for their abuses. A record number of women ran for office, and many of them won. The Equal Rights Amendment lurched back to life.

Nearly four years on, it’s clear that the patriarchy, while jostled on its pedestal, stands tall. Some people think it unmanly to wear a mask during a deadly pandemic, for goodness sake.

More troubling: Roe v. Wade, which is already so hobbled, could soon be overturned or gutted, leading to the further criminalization of pregnant women.

Since Mr. Trump took office, more women have come forward with credible sexual assault allegations against him — including one that surfaced just last month. One of Mr. Trump’s legacies will be whatever damage has surely been done to the national psyche for these claims to be buried by so many other disturbing events.

At least 10,000 people protest in Los Angeles. The protest was organized by activists from Black Lives Matter as well as from an anti-fascist group calling for President Trump’s immediate removal from office. BRYAN DENTON FOR THE NEW YORK TIMES

BLACK LIVES AT RISK

Some of the most consequential moments of the Trump era thus far were the roughly eight minutes that a police officer knelt on George Floyd’s neck, suffocating him to death.

Mr. Floyd’s death at the hands of a police officer — an appallingly common occurrence for Black people in the United States — prompted one of the country’s largest social movements almost overnight. Millions of Americans, mostly masked to prevent coronavirus transmission, took to the streets in cities from coast to coast, outraged by police violence.

Adding to the righteous fury this year: the killing of Breonna Taylor in her home by the police— for which no officer has been charged.

Mr. Floyd and Ms. Taylor became some of the most recognizable victims of police violence in recent memory. But this year’s uprisings were a supercharged continuation of the Black Lives Matter movement, which had been growing since the death of Trayvon Martin in 2012. Those who march do so not just for the names we know — but for all the names we don’t.

A fire burns 36,000 acres and 113 structures in California, forcing 68,000 residents to evacuate. MAX WHITTAKER FOR THE NEW YORK TIMES

A PLANET IN PERIL

For anyone who cares about the health of the planet, the Trump years have been, to say the least, profoundly discouraging. Barely two months in office, Mr. Trump ordered his cabinet to review and remove any regulatory obstacles to the production of oil, gas and coal; shortly thereafter, he renounced America’s support of the landmark Paris climate agreement, thus shedding any claim to American leadership on a global crisis.

It was more or less downhill from there. He methodically decapitated Obama-era rules aimed at limiting emissions from power plants and oil and gas operations and mandating increases in fuel-efficient vehicles. He also opened public lands hitherto shielded from exploration to mining and drilling.

There were other assaults large and small on environmental protections, but the most damaging were those that undermined rules to diminish greenhouse gases while enabling the industries that produced them. All this despite the climate-related carnage in front of his own eyes, conspicuously the fires in California — and despite authoritative studies warning that failure to wrench emissions drastically downward over the next decade will bring irreversible damage.

Emissions in America, pre-Covid, declined slightly, thanks partly to the switch to cleaner fuels and the determined efforts of states and cites to do the job Mr. Trump won’t do. Globally, however, they’ve been rising, and the seas with them.

Read the full article here

Published on: Author: Asher Edelman
Current

How Republicans will try to destroy a Biden presidency

Dear All,


The economy over the next couple of years and its problems are resolvable as long as we resolve the pandemic. The key is going to be who’s advice Joe Biden takes. If it turns out to be the old line Clinton people like Robert Ruben and Larry Summers we will continue the economic disaster and the banks will continue to profit. I think Biden is a better man than that and the economic problems are totally resolvable providing we focus on the lower 70% of the asset holders and earners. I’m pleased that the Republicans in the Senate realize that Trump has lost his game – I think they may have lost their game as well. On that note I beseech you to vote and get all of your like-minded friends to vote and our nation and our economy and our people will have a chance.

Asher 

Opinion by Greg Sargent

Columnist | Washington Post

As you’ve heard, Wolf Blitzer and Nancy Pelosi (D-Calif.) had a very contentious exchange on Tuesday, in which the CNN anchor demanded to know why the House Speaker was not prepared to support the White House’s offer of a $1.8 trillion stimulus package.

“Don’t let the perfect be the enemy of the good,” Blitzer told Pelosi, thus seeming to suggest that the real holdup to any deal is Democratic opposition.

But new reporting from Bloomberg News strongly suggests another angle worth investigating, if the goal is to truly get to the bottom of what might end up holding up an agreement.

And this angle points to an even bigger story: how Republicans may already be laying the groundwork to try to destroy a Joe Biden presidency, should he win the election.

The short version: A Senate GOP strategist privately confided to Bloomberg that a key Republican goal right now is to lay the groundwork to revert hard to austerity, should Biden prevail, crippling the possibility of any serious stimulus efforts next year, even amid continued economic misery.

As of now, Senate Republicans are hostile to supporting a deal even if the White House and House Democrats can reach one. The White House’s $1.8 trillion offer includes some things Democrats want, such as $1,200 checks to individuals, but Pelosi wants more money for aid to states and a national strategy against the novel coronavirus, among other things.

Senate Republicans may not even accept spending levels that the White House is proposing. Senate Majority Leader Mitch McConnell (R-Ky.) is planning a vote on a far smaller package — $500 billion for extended assistance for the unemployed and small businesses, among other things.

The Senate bill appears designed to do the minimum while giving vulnerable GOP senators a way to say they’re doing something at a moment of deep economic peril, in hopes of salvaging McConnell’s majority.

But Trump undermined that strategy by tweeting: “Go big or go home!” Now Senate Republicans risk getting split between the conservative impulse to spend as little as possible (at least on aid to distressed Americans) and Trump’s demand (for now, anyway) for more spending.

But, given that spending more now would likely boost Trump’s reelection chances, why aren’t Senate Republicans on board?

The Bloomberg report offers this remarkable clue:

“A GOP strategist who has been consulting with Senate campaigns said Republicans have been carefully laying the groundwork to restrain a Biden administration on federal spending and the budget deficit by talking up concerns about the price tag for another round of virus relief. The thinking, the strategist said, is that it would be very hard politically to agree on spending trillions more now and then in January suddenly embrace fiscal restraint.”

This is an anonymous source. But it accords with what all our intuitions and our understanding of recent U.S. political history tell us. Republicans almost certainly suspect Trump will lose even with a big stimulus and already hope to put an incoming President Joe Biden in a fiscal straitjacket, saddling him with the terrible politics of a grueling recovery.

A big package now under a GOP president would make that harder to get away with. That’s bad enough, but the evolving strategy here may be worse than this suggests. The calculation is probably not just about avoiding the hypocrisy of spending big now and embracing austerity under a Democratic president.

It’s also likely that a big package now would put the economy in a somewhat better position early next year, when Biden (should he win) would take over. This, too, is probably what Republicans want to avoid.

Indeed, as Eric Levitz points out, if Republicans can scuttle a robust package now, that would hand Biden a “deepening recession.” If Republicans hold the Senate and can block big stimulus measures at that point, Levitz continues, “Biden’s presidency would be over before it starts.”

And so, when McConnell chortled with glee at this week’s debate in Kentucky about the failure to pass more aid at a desperate national moment, it telegraphed what’s coming. And we’ve already lived through what happened when Republicans, led by McConnell, tried to cripple the recovery from a previous economic calamity that a Democratic president inherited from a Republican one.

Back then, McConnell calculated that if Republicans adopted a strategy of openly tailoring everything around the overarching goal of denying Barack Obama bipartisan support, Obama would take the blame for it. It’s likely McConnell is already thinking the same.

Obviously Republicans might theoretically oppose more spending to address a recession during a Biden presidency out of adherence to principle, however egregiously misguided. But notably, the GOP strategist above also telegraphs a strategy of constraining Biden by suddenly claiming to care deeply about deficits.

That’s particularly galling, given that Trump and the GOP passed a massive corporate tax giveaway that lavished enormous benefits on top earners while helping to explode the deficit. Now concern over that deficit will be used to try to cripple a Biden presidency through austerity.

Which leads to a final point. As I’ve noted, Trump campaigned in 2016 on a (fraudulent) promise to break with orthodox conservative economics, including opposition to big expenditures in the public interest, vowing to preserve safety nets and invest in job-creating infrastructure.

In many ways Trump tossed that vow aside and embraced GOP plutocracy. But now he’s suddenly desperate to secure another huge spending infusion, because he needs one to salvage his reelection hopes. So it would constitute a perverse form of poetic justice if a GOP refusal to go along — one rooted in a strategy of hamstringing a Democratic president from addressing deep national challenges — ends up contributing in some small way to Trump’s political demise.

Published on: Author: Asher Edelman
Current

Dying in a Leadership Vacuum

The Editors

The New England Journal of Medicine

Covid-19 has created a crisis throughout the world. This crisis has produced a test of leadership. With no good options to combat a novel pathogen, countries were forced to make hard choices about how to respond. Here in the United States, our leaders have failed that test. They have taken a crisis and turned it into a tragedy.

The magnitude of this failure is astonishing. According to the Johns Hopkins Center for Systems Science and Engineering,1 the United States leads the world in Covid-19 cases and in deaths due to the disease, far exceeding the numbers in much larger countries, such as China. The death rate in this country is more than double that of Canada, exceeds that of Japan, a country with a vulnerable and elderly population, by a factor of almost 50, and even dwarfs the rates in lower-middle-income countries, such as Vietnam, by a factor of almost 2000. Covid-19 is an overwhelming challenge, and many factors contribute to its severity. But the one we can control is how we behave. And in the United States we have consistently behaved poorly.

We know that we could have done better. China, faced with the first outbreak, chose strict quarantine and isolation after an initial delay. These measures were severe but effective, essentially eliminating transmission at the point where the outbreak began and reducing the death rate to a reported 3 per million, as compared with more than 500 per million in the United States. Countries that had far more exchange with China, such as Singapore and South Korea, began intensive testing early, along with aggressive contact tracing and appropriate isolation, and have had relatively small outbreaks. And New Zealand has used these same measures, together with its geographic advantages, to come close to eliminating the disease, something that has allowed that country to limit the time of closure and to largely reopen society to a prepandemic level. In general, not only have many democracies done better than the United States, but they have also outperformed us by orders of magnitude.

Why has the United States handled this pandemic so badly? We have failed at almost every step. We had ample warning, but when the disease first arrived, we were incapable of testing effectively and couldn’t provide even the most basic personal protective equipment to health care workers and the general public. And we continue to be way behind the curve in testing. While the absolute numbers of tests have increased substantially, the more useful metric is the number of tests performed per infected person, a rate that puts us far down the international list, below such places as Kazakhstan, Zimbabwe, and Ethiopia, countries that cannot boast the biomedical infrastructure or the manufacturing capacity that we have.2 Moreover, a lack of emphasis on developing capacity has meant that U.S. test results are often long delayed, rendering the results useless for disease control.

Although we tend to focus on technology, most of the interventions that have large effects are not complicated. The United States instituted quarantine and isolation measures late and inconsistently, often without any effort to enforce them, after the disease had spread substantially in many communities. Our rules on social distancing have in many places been lackadaisical at best, with loosening of restrictions long before adequate disease control had been achieved. And in much of the country, people simply don’t wear masks, largely because our leaders have stated outright that masks are political tools rather than effective infection control measures. The government has appropriately invested heavily in vaccine development, but its rhetoric has politicized the development process and led to growing public distrust.

The United States came into this crisis with enormous advantages. Along with tremendous manufacturing capacity, we have a biomedical research system that is the envy of the world. We have enormous expertise in public health, health policy, and basic biology and have consistently been able to turn that expertise into new therapies and preventive measures. And much of that national expertise resides in government institutions. Yet our leaders have largely chosen to ignore and even denigrate experts.

The response of our nation’s leaders has been consistently inadequate. The federal government has largely abandoned disease control to the states. Governors have varied in their responses, not so much by party as by competence. But whatever their competence, governors do not have the tools that Washington controls. Instead of using those tools, the federal government has undermined them. The Centers for Disease Control and Prevention, which was the world’s leading disease response organization, has been eviscerated and has suffered dramatic testing and policy failures. The National Institutes of Health have played a key role in vaccine development but have been excluded from much crucial government decision making. And the Food and Drug Administration has been shamefully politicized,3 appearing to respond to pressure from the administration rather than scientific evidence. Our current leaders have undercut trust in science and in government,4 causing damage that will certainly outlast them. Instead of relying on expertise, the administration has turned to uninformed “opinion leaders” and charlatans who obscure the truth and facilitate the promulgation of outright lies.

Let’s be clear about the cost of not taking even simple measures. An outbreak that has disproportionately affected communities of color has exacerbated the tensions associated with inequality. Many of our children are missing school at critical times in their social and intellectual development. The hard work of health care professionals, who have put their lives on the line, has not been used wisely. Our current leadership takes pride in the economy, but while most of the world has opened up to some extent, the United States still suffers from disease rates that have prevented many businesses from reopening, with a resultant loss of hundreds of billions of dollars and millions of jobs. And more than 200,000 Americans have died. Some deaths from Covid-19 were unavoidable. But, although it is impossible to project the precise number of additional American lives lost because of weak and inappropriate government policies, it is at least in the tens of thousands in a pandemic that has already killed more Americans than any conflict since World War II.

Anyone else who recklessly squandered lives and money in this way would be suffering legal consequences. Our leaders have largely claimed immunity for their actions. But this election gives us the power to render judgment. Reasonable people will certainly disagree about the many political positions taken by candidates. But truth is neither liberal nor conservative. When it comes to the response to the largest public health crisis of our time, our current political leaders have demonstrated that they are dangerously incompetent. We should not abet them and enable the deaths of thousands more Americans by allowing them to keep their jobs.

VOTE!

Published on: Author: Asher Edelman