On TAP: Kuttner + Meyerson

Kuttner

Trump and China: The Art of the Cave-In. Several leaked reports from people “close to the negotiations,” suggest that Trump will soon announce a trade deal with the Chinese government pretty much on China’s terms. This will serve Trump’s goal of changing the subject for one news cycle. But it will not serve the American economy.

All the indications are that China will make an ad-hoc agreement to buy a lot of stuff, but not alter China’s mercantilist system, nor its systematic theft of U.S. intellectual property, nor the coercive terms with which Beijing treats U.S. companies who want to do business in China, nor the spying built into its advanced technology.

Readers may recall the cover piece in our Spring issue addressing the talks with China, in which I asked the question, “Can Trump’s best appointee save the president from himself?” That appointee is Robert Lighthizer, the most knowledgeable and patriotic person to serve in the position of U.S. trade representative, maybe ever.

Lighthizer, in a long and distinguished career, has made clear just what China needs to do to be a member of the global trading system in good standing—the very trading system that has helped China become an industrial powerhouse. But Trump, for all his bluster, has repeatedly undercut Lighthizer with his slavering eagerness for a deal. That posture, of course, only encouraged China to take an ever harder line. So much for the Art of the Deal.

Lighthizer joins a long parade of decent people who elected to serve under Trump by convincing themselves that it was for the good of the country. As former FBI Chief James Comey pointed out in a rueful and poignant piece, Trump has made fools of them all. 

Meyerson

The Malign Cluelessness of the Billionaire Bourgeoisie. One of our nation’s more festive rites of spring convenes every April or May at the Beverly Hilton in Beverly Hills. The Milken Institute’s Global Conference, presided over by Michael Milken himself, is a kind of domestic Davos, minus the swarm of elected officials and social movement leaders who are occasionally brought in to the Swiss gathering to spice things up.

The Milken Conference is made of sterner stuff. It’s for financiers, business honchos, and the random superrich, brought together to inform their deal-making, make more connections, and celebrate—well, themselves. Old-timers may recall Milken’s yearly clambakes at the Hilton began in the 1980s, when he was inventing the junk-bond business at Drexel, Burnham, Lambert, and would annually convene high-flying financiers at the Hilton at what was then called “The Predators’ Ball,” a nod to the corporate takeovers and profit extraction that Milken had helped pioneer.

That, of course, was before Milken did time for financial crimes and then reinvented himself as a think-tank founder and capitalist visionary. This year’s conference has been unfolding this week at the Hilton, and might fairly be called The Nervous Predators’ Ball.

It turns out that all that corporate gutting and profit extraction that Milken himself helped launch has produced rumblings of discontent with capitalism among many of the kinds of people not invited to Milken’s conference. According to an account in today’s Los Angeles Times, a lunch panel yesterday entitled “The Future of the Free-Enterprise System” dealt with such gnarly topics as climate change and “the rising popularity of socialism among young people.” During the presentations, Milken himself acknowledged the glitches in contemporary capitalism. “Obviously, it is not working for everyone,” he said.

At the closing panel, hedge-fund billionaire Ray Dalio (who pocketed a cool $2 billion last year alone) warned, as he had last month in print, that the prospect of revolution couldn’t be dismissed if things continued the way they’ve been going. In his talk, the Times reported, he contrasted today’s sense of hopelessness among many Americans with “the New Frontier years of the Kennedy administration, when the nation thought it could eliminate poverty.” However, the Times continued, “it was hard to say that any comprehensive concrete solutions emerged out of the discussion,” other than a more “conscious capitalism” that doesn’t concern itself exclusively with making more money.

Overlooked in these discussions was the fact that the declining share of corporate revenues going to workers was somehow related to the decline of worker power since the 1960s, and that rebuilding a vibrant middle class requires a corresponding boost in worker power—say, re-unionization, giving workers half the seats on corporate boards, and extending collective bargaining agreements to all businesses in a given industry, whether unionized or not. Ignoring the correlation, not to mention the chain of causation, between the decline of the union movement and the decline of workers’ incomes since the 1970s requires an almost heroic feat of epistemic closure, but the Milkenites were up to the occasion. If anyone there spoke for rebuilding worker power at the expense of big-time shareholders, CEOs, and Wall Street, it certainly wasn’t reported.       

Nor, I presume, did anyone respond to Dalio’s reference to the War on Poverty by noting that it came as a response to The Other America, a book by Michael Harrington, who at the time was also America’s leading socialist. If the neo-predators at the Hilton really want to fix what ails us, they’ll have to relinquish the power and privilege they’ve wrested from their fellow Americans in the years since Milken devised a way to supercharge the rich at the expense of everyone else. 

Kuttner

In Which the Superb Tom Edsall Gets One Big Thing Wrong About Unions. New York Times contributing columnist Tom Edsall is a national resource. In column after column, he provides encyclopedic research both scholarly and journalistic, extended interviews, astute insights, and hard questions for progressives on politically urgent topics.

His most recent column, on the political consequences of the decline of unions, is no exception. As Edsall demonstrates, the Republican right’s strategic war on unions has been devastating to Democrats, since union members and union families, with their sense of solidarity and better understanding of how capitalism works, are more likely to vote for Democrats than demographically similar nonunion families.

Edsall was not exaggerating when he wrote that the right has a better appreciation of unions than the left. Thus, the systematic union bashing. In Wisconsin, as Edsall shows, courtesy of Scott Walker’s anti-union crusade, the union share of Wisconsin employees was cut from just over 15 percent as recently as 2008 to just 8.1 percent by 2018.

Edsall ends his piece by wondering why “many liberals and Democrats” don’t get the importance of unions.

The problem in building support for a resurgent labor movement is that many liberals and Democrats do not appear to recognize the crucial role that unions continue to play not only in diminishing the effects of inequality, but in voter mobilization and campaign finance.

And here is where Edsall misses a key part of the story. The problem is not that “Democrats” fail to appreciate unions. It’s that the corporate and Wall Street Democrats who have dominated the presidential wing of the party since Jimmy Carter and Bill Clinton actively loathe unions.

Carter, Clinton, and Barack Obama all had the opportunity and the votes to put serious teeth back in the Wagner Act, in the face of vicious corporate union busting. All decided not to lift a finger on behalf of labor law reform.

All three presidents had progressive labor secretaries. But the real power players were elsewhere.

Most Democrats in Congress get unions. The problem has been the corporate influence on the presidential party and its domination of key positions at Treasury, OMB, and Legislative Affairs. Some of this is about campaign finance, but not all of it.

Edsall brilliantly depicts the class warfare that leads Republicans and their business allies to bash unions. He misses the fact that the same class warfare has infected the Democratic Party.

Meyerson

Why Democrats Aren’t Passing Trump’s New, Unimproved NAFTA. Democrats in both the House and Senate are resisting President Trump’s request that they approve his successor agreement to NAFTA (the clunky name to which is the United States-Mexico-Canada Agreement, or USMCA). The main sticking point, they say, is that the proposed new accord doesn’t do nearly enough to ensure the rights of Mexican workers—failing which, they’ll remain grotesquely underpaid and serve as a constant enticement to American businesses in search of cheap labor.

Those Democrats got a real point.

That point isn’t that Mexico isn’t as wealthy as the U.S. It’s that what wealth Mexico does generate simply doesn’t go to its workers.

In 2017, the International Labor Organization’s Global Wage Report tracked real wages between 2006 and 2015 in the G-20 nations with emerging economies. In China, real wages more than doubled during that period, and in every other such nation—India, Turkey, Russia, South Africa, Brazil, and Saudi Arabia—wages rose by at least 15 percent.

Except in Mexico. There, wages declined by roughly 15 percent.

That wasn’t because Mexico’s big employers—including the U.S. firms that opened factories there after NAFTA took effect in the early 1990s—were doing poorly. It was because they were keeping all the proceeds for themselves. An OECD study looking at the value created by corporations between 2008 and 2013 found that the share of that value going to employees in the eurozone was 73 percent, with shareholders and bondholders pocketing 25 percent. In the U.S., 69 percent went to employees and 21 percent to shareholders and bondholders. In South Africa, employees got 60 percent and shareholders and bondholders got 38 percent.

And in Mexico, employees got just 28 percent, while shareholders and bondholders raked in 71 percent. None of the 30 other nations in the OECD’s study had a labor share remotely that low, or a profit share remotely that high.

One thing these numbers make clear is that NAFTA not only failed to help Mexican workers; it actually enabled investors (and the governments doing their bidding) to double down on the poverty-wage model of development—or, more precisely, underdevelopment. In the mid-1970s, the OECD has documented, labor costs equaled about two-thirds of Mexico’s gross domestic product; 35 years later, they’d fallen to a bare 40 percent.

A major culprit behind this systemic theft of workers’ income has been Mexico’s “unions,” which aren’t really unions at all. Under the nation’s long-standing labor law, workers have had no right to vote for the union that represents them or the contracts their union agrees to with management. Those contracts are universally known as “protection contracts,” inasmuch as they protect employers from having to pay more than the barest subsistence wage to their employees.

Mexico now has a new leftist president (Andrés Manuel López Obrador—AMLO) who already has raised the nation’s minimum wage. It has a new legislature dominated by AMLO’s party, which is likely to enact a bill giving workers the right to create genuine unions that negotiate non-protection contracts. But local governments will still have the power to approve or veto many contracts, and as Nacha Cattan reports in the current Bloomberg Businessweek, “local leaders are rushing to clinch state-level pacts with pro-business unions that could curb the right to strike.”

Democrats in both houses, including Speaker Nancy Pelosi, have made clear that they’re not going to approve Trump’s new NAFTA unless it compels Mexico to free its workers from such dismal deals. As The Wall Street Journal has reported, Ohio Senator Sherrod Brown and Oregon Senator Ron Wyden have introduced legislation enabling U.S. and Mexican officials to jointly “audit and inspect facilities suspected of breaching labor standards in USMCA, and the U.S. would be allowed to reinstate tariffs on goods from factories in violation.”

In refusing to pass USMCA as it stands, congressional Democrats are championing both U.S. and Mexican workers. The legislative history of the United States is not full of moments of bolstering global worker solidarity, so on the eve of May Day, this moment merits a salute.

Kuttner

This Is What a Constitutional Crisis Looks Like. After the midterm elections of 2018, many of us comforted ourselves that democracy had held after all. Democrats took back the House, and there was no outright theft other than the structural theft of gerrymandering and voter suppression. But Democrats had won by a theft-proof margin.

Elsewhere, adult minders at the White House, the Justice Department, and the Pentagon were containing Trump’s most lunatic impulses. The “deep state” so vilified by Steve Bannon was doing its job. Trump had failed to dislodge Robert Mueller, whose report would tell all.

That was then. Trump has now shaken off his adult minders, and Steve Miller and Mick Mulvaney are running the White House. Their job seems to be to inflame Trump rather than contain him.

Over at the Justice Department, Trump has finally gotten the AG that he’s always wanted, a polished stooge named Bill Barr. Trump is doubling down on his efforts to rig democracy’s rules, the latest ploy being a deliberate census undercount in states and cities likely to support Democrats, with a pliant Supreme Court inclined to approve.

Four different House committees have issued subpoenas for documents or witnesses, and Trump’s strategy is to stonewall them all. Eventually, the courts will rule on whether Trump and various witnesses must comply or be held in contempt, but the courts grow more Trumpian by the day.

This is what a constitutional crisis looks like. Some argue that the House should forgo an impeachment in favor of ousting Trump in the 2020 election. But pick your poison. Do we believe that an impeachment will fail? Do we believe that the 2020 election will be unrigged?

The Republic’s one ace in the hole is that Trump invariably overreaches. But that tendency to excess also presents its own perils.

This is a do-it-yourself post. Please add your own comforting ending.

Kuttner

Trump's Infrastructile Dysfunction. Donald Trump is cornered. In his increasingly desperate efforts to bully and bluff the House investigations of leads provided by the Mueller report, Trump oscillates between bluster and changing the subject.

His latest gambit is infrastructure. The American people, he insists, don’t want to hear about obstruction of justice. They want to hear about infrastructure.

Indeed they do. Democrats are proposing a multi-trillion dollar Green New Deal. So where has the president been? Nowhere. 

He had two years with a Republican Congress to produce some kind of infrastructure program, but except for some bogus public private deals, he produced next to nothing. Instead, the Republican Congress delivered tax cuts and spending cuts. 

Last October, he finally proposed an infrastructure program that was mostly imagined private money, with just $200 million of actual federal dollars—to be offset by other spending cuts. Against $1.6 trillion in tax cuts. 

Next Tuesday, Nancy Pelosi and Chuck Schumer will meet with Trump to discuss an infrastructure program. The Democrats have the high ground here. They should avoid throwing Trump a lifeline that can give him bogus bragging rights. They should resist his demands to hold their meeting in front of the cameras. 

And as a condition of the meeting they should insist that Trump cease the schoolyard name-calling of their Democratic colleagues. It’s the least they owe Intelligence Committee chair Adam (“Pencil-neck”) Schiff.

Meyerson

The GOP Justices: Republicans First, White Guys Second, Constitutionalists Third. The Supreme Court heard oral arguments today on the constitutionality of President Trump’s Commerce Department adding a question on citizenship status to the 2020 census, and it looked like the five Republican pooh-bahs (Justices Roberts, Thomas, Alito, Gorsuch, and Kavanaugh) are poised to give it a thumbs-up.

What this means is that the census—for which the Constitution mandates “counting the whole number of persons in each state”—will likely produce what the Census Bureau calculated to be a 5.1 percent undercount of noncitizen households, as respondents understandably spooked by Trump’s war on immigrants decide not to return their forms. And what that means, of course, is an undercount of immigrants—disproportionately Latino, Asian, or African, and thus disproportionately Democrat—and an overrepresentation of whites, disproportionately Republican.

Opponents of adding the question have argued that it would violate the Constitution’s mandate by leading to that undercount, and that it also would violate the federal law requiring the commerce secretary (in whose department the Census Bureau is housed) to report all additional questions to Congress three years before the date of the census, which Commerce Secretary Wilbur Ross clearly didn’t do.

Three of the Republican stalwarts—Alito, Thomas, and Gorsuch—had already made clear in earlier actions that they favored including the question on the census. In today’s hearing, Kavanaugh made that clear as well, and Roberts, the only potential swing voter on the Court, also indicated by his questioning that he’s inclined to back the question’s inclusion.

If Roberts does indeed side with his four Republican colleagues, the ruling would be the third in a series of landmark 5-to-4 Roberts Court decisions whose chief purpose is to cement Republican control of federal and state governments. The first such ruling, the 2013 Shelby County decision, effectively neutered the 1965 Voting Rights Act, thereby permitting Republican state governments to toss minority voters off the rolls and make it difficult for them to register. Absent Shelby County, Democrat Stacey Abrams, not Republican Brian Kemp, would almost surely be the governor of Georgia today.

The second such decision was the 5-to-4 ruling in last year’s Janus case, in which the five GOP justices decreed that employees in a unionized public-sector workplace didn’t have to pay dues to the union, though the union was still required to represent and advocate for them in collective bargaining and any grievances they had with their employer. The ruling was expected to produce a sharp drop in the membership and thus the financial and people-power resources of public-employee unions, though at least the big four public unions—AFSCME, AFT, NEA, and SEIU—have seen no such drops because their members chose to stick with them, and because they also have since recruited new members. Nonetheless, as the Republican justices were acutely aware, the public-sector unions register and mobilize more potential voters—particularly in black and Latino communities—than any other organizations, and thus play a major role in building Election Day support for Democratic candidates.

Should the Court now rule in favor of Ross’s citizenship question, that would add one more landmark ruling plainly intended to bolster Republican electoral prospects. And should the Court rule in a future case that it must keep its hands off deliberate Republican gerrymandering of districts, that would add yet one further ruling designed to enable Republicans to continue to hold power even if a majority of voters in a state or the nation vote (or try to vote) for Democrats.

If you were wondering why Trump and Mitch McConnell are determined to pack the courts, and the Court, with Republican hacks, wonder no longer.

Kuttner

Warren Does it Again. Senator Elizabeth Warren’s twin proposal for substantial student debt relief plus tuition-free higher education is a huge winner—economically, politically, and even fiscally. It demonstrates once again why she is such a leader at connecting brave policy ideas to the lived condition of ordinary Americans.

The idea of cancelling $50,000 of debt is smart. It puts the relief where it is most needed. And it pays the cost by a tax on the super-rich—those whose own kids have no trouble paying for their own kids higher education. What a brilliant and salutary illustration of the class warfare already sundering America. How exactly will Republicans oppose this?

From Warren’s letter on the plan:

According to independent experts, 95% of people who have student loan debt right now would get at least some of it canceled under my plan.

And more than 75% would get all of it cancelled—poof, gone. We’d provide targeted cancellation for the families that need it most, substantially increasing Black and Latinx wealth, and helping decrease the racial wealth gap.

Once we’ve cleared out the debt that’s holding down an entire generation of Americans, we’ll ensure that we never have another student debt crisis again.

We can do that by recognizing that a public college education is like a public K-12 education—a basic public good that should be available to everyone for free.

The other candidates need to support Warren’s initiative. For instance, I admire much of what Pete Buttigieg has put forth, but he got one big thing wrong that Warren got right. When asked at the CNN Town Hall whether he supported debt relief for indebted college grads, Buttigieg replied that he did not, because college grads made more money on average than non-grads, and that we’d be asking poorer people to pay for the debt relief of richer ones.

But this conclusion commits a logical fallacy—a fallacy of composition—that Warren’s plan solves. There’s no need to have the “average” taxpayer cover the costs of debt relief when rich people can cover it.

In addition, college represents a ladder of upward mobility for people who are far from rich. And the prospect of college debt causes students without rich parents to have to work part time, and increases the non-completion rate. It is black and Hispanic students, who seldom have wealthy parents, who are most vulnerable to this syndrome. 

See this fine assessment by economist Marshall Steinbaum. And this one by Jamelle Bouie. And this one by Tessie McMillan Cottom. 

In this proposal, as in her recently announced daycare plan, Warren superbly knits together class and race. She gives relief and opportunity to the non-rich, in a way that particularly helps people of color but without relying on racial targeting. 

She reminds people of different races of all that they have in common. The Democrats’ success in 2020 will hinge on how well they pull this off.

Kuttner

It Ain’t Over. Bill Barr gave it his best shot, clumsily playing the role more of Trump's defense attorney than attorney general. But Barr's grotesquely dishonest spinning of the Mueller report has backfired and the reverberations will only increase. 

Here is the key line from the special counsel’s report:

The conclusion that Congress may apply the obstruction laws to the president’s corrupt exercise of the powers of office accords with our constitutional system’s checks and balances and the principle that no person is above the law.

Translation: Trump’s conduct did not quite meet the threshold of indictment, but it sure meets the threshold of impeachment. The special counsel's report, even with the censored passages, is a devastating portrait of a corrupt and power-crazed president. It may not reach the criminal definition of an indictment, but it is an indictment in every other sense of the word.

Trump recognizes the true message. His own characterization of Mueller’s report has gone from “total exoneration” to “total bullshit” in is latest tweet.

Mueller will surely reinforce his true findings, as opposed to Barr’s attempted cover-up of them, when the special counsel testifies before the House Judiciary Committee. 

Because of the murkiness of whether a sitting president could or should be subjected to criminal prosecution, the Founders devised impeachment. Some Democrats may be reluctant to dig deeper and proceed to an impeachment, but it’s hard to see how they can avoid their constitutional duty. Once again, the House freshmen are leading the way. 

And we still don’t have the full story of Trump’s tax evasion and corrupt business dealings with Russian financiers. Mueller's report is just the beginning. This sordid chapter is far from over. 

Kuttner

Notre Dame: God must be very angry at Her children. I am neither a Catholic nor any sort of believer, but my first reaction to seeing Notre Dame in flames, oddly, was that God must be very disappointed in us, Her children.

This is doubly weird, since the God I imagined was a vindictive Old Testament God, banishing Adam and Eve, turning Lot’s wife into a pillar of salt, or drowning the Egyptians—but of course Notre Dame is supremely a New Testament creation.

Why might God be angry? The neglect of Notre Dame is a metaphor for the despoiling of all God’s creation.

The French state, after all, is obsessive about that nation’s patrimony, and it doesn’t get more Gallic than the Cathedral of Notre Dame. Yes, the French have a complex view of the separation of church and state, but Notre Dame is what the French call a Monument, to French culture. Why did they keep putting this off, and then cutting corners?

France, when it was a much poorer country, managed to find the money to sandblast much of the City of Light. (When I first visited there, it was the city of dark. Most of the buildings including Notre Dame were near-black, from centuries of coal dust.) So why did a nonprofit foundation have to pass collection plates to try to find funds to repair Notre Dame when experts knew that it was near collapse?

The Fire This Time—come to the point, Bob—is of course a metaphor for the larger devastation of all God’s creation by an ungrateful and all-consuming humanity. It should be taken as warning. Humankind keeps neglecting all of the other warning shots, from glaciers melting, to exotic diseases spreading, to biblical floods, to the sharks invading my cherished Cape Cod beaches.

You don’t have to be a believer to notice. But let’s notice, for God’s sake. 

And it was in Paris where the major nations came together in 2015 to sign a climate agreement, only to have the U.S. under Trump withdraw. God help us.

Let’s take the near-destruction of the Cathedral of Notre Dame as a warning sign of the arrogance of man, whether from an angry God or from nature’s propensity to bite back and clean house.

 

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