Allied Approaches Archive (Page 8)

President Donald Trump announced Thursday that the United States will impose new tariffs “on all goods imported from Mexico” unless the country does more to stop migrants from reaching the U.S. border.

A 5% tariff is set to go into effect on June 10 if the country does not step up immigration enforcement measures. The tariffs would gradually increase — an additional 5% on the first day of each month for four months — to a maximum of 25% by October, unless “the illegal immigration problem is remedied.”

Mexican President Andrés Manuel López Obrador responded to the threats in a two-page letter to Trump Thursday evening, where he addressed him as a friend and warned that these kinds of punitive measures are not the answer.

“With all due respect, although you have the right to express it, ‘America First’ is a fallacy because until the end of times, even beyond national borders, justice and universal fraternity will prevail,” López Obrador wrote.

“Social problems don’t get resolved with duties or coercive measures,” he added. “I don’t believe … in ‘an eye for an eye.'”

In order to determine whether or not the imposition of this sort of punitive tariff on one of America’s most important trading partners would be effective or not, there are four major questions that need to be addressed first.

Isn’t Mexico already helping the U.S. on immigration?

The demographics of U.S immigration have been gradually shifting over the last five years. No longer are the majority of immigrants arriving at the southern border single men from Mexico looking for work. Instead, Central American families fleeing violence are making the dangerous journey through Mexico to apply for the asylum in the United States.

By William E. Spriggs, EPI

The Republican-controlled Senate has accomplished what it wished with a one sided tax giveaway to corporations and the super-rich—it has no interest in a legislative agenda left. Yet, while the economy continues to grow, there are sharp warning signs because of the exacerbation of income inequality in the United States that threaten the expansion’s sustainability. These yellow flags point to an economy that has little resiliency and so is very vulnerable to shocks.

Now is the time to create legislative markers, set legislative records and flesh out details of fixes that could be quickly passed should the political dynamics change in 2020. I would argue that, in this climate, it is necessary to triage such efforts, so as not to detract from other important legislative markers that must be passed by the Democratic controlled House of Representatives, so that in 2020 a clear set of programs is also ready to address ever-expanding inequality.

The urgency comes after the historic 2007-2009 downturn showed just how much the divide between Democrats and Republicans turned economic misfortune into a game of political opportunity. Americans found out it was a lie when they had repeatedly been told that Social Security privatization was a fine idea because if the stock market tanked, home prices dove and jobs disappeared Congress would respond to the needs of ordinary Americans. Instead, no consensus could be reached on policies to help workers. Income relief, to compensate for lost job opportunities, lost retirement savings, or devalued housing assets, became political fodder for a larger ideological battle aimed at narrow political victories.

The other problem we face is that the 2008 downturn was likely unique in its size. Because of the size of the housing market, a financial crisis rooted in the decline of the primary household asset is not likely to re-occur. Consequently, the economy is more likely to face a downturn the size of the one that took place in 2001. It should be noted, however, that the downturn in 2001 was accompanied by a huge tax cut, initially targeted at the wealthy, but balanced by a Democratic-controlled Senate to also benefit middle-income households for its initial years.

Still, with the tail winds of easing monetary policy following the stock market bubble burst from the dotcom calamity and the economic malaise following September 11 and the huge stimulus of a large tax cut, and a deficit propelled by massive expenditures for the Iraq War, it still took until March 2007 to get payroll numbers back up to their February 2001 level. So, if an unprecedented job loss in 2008-2009 could not generate a consensus to address a downturn, there is little chance a milder downturn will generate better behaviors.

The history of Wrangler blue jeans is rooted in America. The Greensboro, N.C., company first introduced its authentic western jeans to America’s cowboys in 1947 and eventually becameone of the United States’ most popular brands. 

Today, all the major-brand blue jean companies manufacture most of their products in foreign countries where labor costs are less prohibitive.  

But Wrangler has undertaken a strategy to return to its roots by unveiling a plan to make a line of 100-percent Made in America denim pants. 

Appropriately, the new “authentic American” jeans are known as the Rooted Collection. 

Wrangler has partnered with single-family farmers to produce five collections with each line of jeans branded with a different state. The Texas and Alabama jeans were available for purchase in April and jeans from Tennessee, North Carolina and Georgia will hit the market in late June shortly before America celebrates its independence on July 4. 

The state-specific jeans project is not only about returning some manufacturing to America.Important components of the American-grown cotton plan include conservation, soil retention,land stewardship, sustainability and helping local farmers. 

“One of the original charters of the Rooted project was that the jeans had to be built 100 percent in America,” said Roian Atwood, director of sustainability at Wrangler. “We actually started out with how hyper-local we could go. Could we make a Texas jean that was grown in Texas, cut and sewn all through the supply chain and delivered in Texas? We couldn’t quite achieve that vision because we don’t have that much infrastructure left in the United States for each of the five states. 

“What we were able to maintain is to make sure everything was made in the U.S. including the zippers, rivets and everything else.” 

Republican President Donald Trump’s plan to abolish the government’s central personnel agency and put most of its authority in the hands of unaccountable White House aides would politicize the U.S. civil service, the head of the largest federal workers union says.

And Government Employees President (AFGE) J. David Cox’s warning got a sympathetic hearing from majority Democrats on the House Government Operations subcommittee on May 21. Panel Republicans gave Trump tepid support, at best.

"The plan to abolish OPM is reckless, ill-conceived, and potentially dangerous,” Cox testified. “It is potentially dangerous because without a separate personnel agency, there is no formal institutional structure to protect and defend the apolitical civil service from an administration intent on politicization.”

Trump wants to abolish the Office of Personnel Management (OPM), which is in effect the government’s HR department, overseeing its two million workers. He would split its duties between the Executive Office of the President -- within the White House -- and the General Services Administration, which manages federal buildings, furniture and supplies.

The new personnel chief would be a White House staffer, unaccountable to Congress, workers, unions or the public for trashing federal workers.

Trump’s scheme, previously hinted at in his budgets, is in line with the hard-right anti-worker ideology and actions of both the right-wing president and his extremist anti-worker advisors, many of them drawn from the notorious Heritage Foundation. Cox noted Trump drew it up without consulting anyone else – including workers and unions -- outside his inner circle.

Besides freezing federal workers’ pay and demanding mass cuts, Trump infamously locked out almost 400,000 federal workers for seven weeks, and forced another 400,000 to toil without pay.

Disregarding the suffering he caused to the feds, their families and their communities, Trump used the lockout in a vain effort to force Congress to kowtow to his demand for billions of dollars to build a wall at the Mexican border. 

One unpaid Transportation Security Officer – an airport screener – depressed because he couldn’t feed his family or pay his bills, jumped to his death from the eighth floor of the Tampa Airport’s interior hotel.

A few weeks ago I was in handcuffs, one of six People’s Action members arrested at Sen. Mitch McConnell’s office in Washington, D.C.. We engaged in a peaceful protest after we asked Mitch to step out of the way of #MedicareForAll, and he refused.

Why was I there, willing to put my body on the line? Because I believe health care is a human right, and I don’t want to see any more lives sacrificed to health care profits.

To those who say we can’t afford to offer universal health care, I say we can’t afford NOT to – because it’s not ok to let people die because they don’t have money for health care or medicine.

I’m Mary Gerisch from Vermont, and this is my health care story.

I grew up in Detroit, where my mom was a nurse, and my dad a cardiologist – he founded the first free clinic there in the 1940s, after a woman died on the lawn of a hospital. They wouldn’t take her because she couldn’t pay for services. He knew that wasn’t right.

My parents – who spent their whole lives offering care to those who needed it – were also denied coverage after they were nearly killed in a deck collapse at a Salvation Army fundraiser in Atlanta. My dad’s head injury kept in him in the hospital for six months; my mom was wheelchair-bound with a severed spinal cord.

Their insurance company called these “preexisting conditions.” My parents lost their house, and I lost mine, to pay for their medical bills. That’s not right.

I also have a cousin who was diagnosed with cancer. She, too, had insurance, but couldn’t afford the medication. The doctor and my cousin kept calling, calling and calling, trying to get it through, and it didn’t happen. Finally three days after my cousin died, the medicine arrived.

That’s not right.

Michigan’s secretary of state on Monday accused Republican lawmakers of undermining the state’s redistricting process by using “budgeting gimmicks” and political sleight of hand to circumvent “the will of the voters.”

Secretary of State Jocelyn Benson (D-MI) slammed proposals by GOP-controlled legislators that would underfund a new independent redistricting commission approved by voters last November.  

Benson claimed that a Senate-approved budget “contravenes the will of the voters,” while a House-version that underfunds the redistricting effort resorts to “budgeting gimmicks.”

“Both of these approaches are unacceptable. The legislature must stop playing games with democracy and must fully fund both the Department of State and the redistricting commission,” her office told ThinkProgress in a statement.

Gerrymandering in Michigan mirrors Republican tactics across the country that seek to redraw voting precinct boundaries to GOP advantage, as the party vies to hold onto power despite losing ground at the ballot box in the state.

The last time Republicans redrew Michigan’s congressional and legislative boundaries, a U.S. Circuit Court invalidated the maneuver as unconstitutional, describing the move as gerrymandering “of historical proportions.”  The court is ordering the state to redraw the maps before the 2020 election.

Upset by the GOP Trump Justice Department’s decision to use federal courts to destroy the Affordable Care Act, the Democratic chairs of five House com-mittees, including the Education and Labor Committee, are threatening to issue subpoenas to both DOJ and the White House counsel to see whether Trump ordered the move.

The letters are the lawmakers’ second attempt to get such records from White House counsel Pat Cipollone and Attorney General William Barr. Neither sent anything by the original April 22 deadline.

Assuming the lawmakers’ May 13 follow-up letter produces no substantive response by May 24, “we will have no choice but to consider alternative means of compliance,” the chairmen warned. That’s legalese for “issuing a subpoena.”

The latest letter follows yet another instance of Trump refusal to follow the U.S. Constitution and the oversight responsibilities it assigns to Congress.

House Education and Labor Committee Chairman Bobby Scott, D-Va., Oversight Committee Chairman Elijah Cummings, D-Md., Ways and Means Chairman Richard Neal, D-Mass., Energy and Commerce Chairman Frank Pallone, D-N.J., and Judiciary Committee Chairman Jerrold Nadler, D-N.Y., sent the identical letters to Cipollone and Barr.

The five committees have good reason to subpoena the ACA communication records. The Ways and Means, Energy and Commerce and Education and Labor Committees basically wrote the ACA in 2009-10.

The Judiciary Committee would decide whether to impeach Trump. Calls for doing so increased in the week of May 20, after more Trump stonewalling. Rep. Justin Amash, R-Mich. joined Dems in saying Trump is impeachable.

The letters also came just before U.S. District Judge Amit Mehta in D.C. ordered Trump’s accounting firm to turn over his financial records to the Oversight Committee. Mehta’s May 20 ruling was the first in what will be a raft of such decisions on Trump resistance to congressional oversight. Nadler says that’s illegal, too.

Donald Trump seems determined to double down and keep pressing forward on his trade war with China. He promises more and higher tariffs, apparently not realizing that U.S. consumers are the ones paying these taxes - not China's government or corporations.

While tariffs clearly impose a cost on people in the United States, this cost could be justified as a weapon to change a trading partner's harmful practices. During his campaign, Trump pledged to wage a trade war with China over its currency policy. He said he would declare China a "currency manipulator" on day one of his administration, putting pressure on China to raise the value of its currency against the dollar.

The value of China's currency matters, since it determines the relative price of goods and services produced in China and the United States. Ordinarily, the currency of a rapidly growing country with a large trade surplus like China would be expected to rise against the currency of a country with a large trade deficit like the United States. However, China's government intervened in currency markets to keep its currency from rising, thereby keeping down the price of China's goods and services.

This was ostensibly the behavior that Trump was determined to change in his China trade war. But now that we are in the war, the currency issue has largely disappeared from the conversation. According to the published accounts, the big issue is over China's respect for the intellectual property claims (i.e., patent and copyrights) of U.S. corporations.

The most bizarre aspect of this turn is that Trump's demands in this area have the support of economists and commentators across the political spectrum. We repeatedly hear the line that we have to stop China's theft of "our" intellectual property.

The problem with this argument is that it is not "our" intellectual property that Trump is protecting. After all, very few people have any patents or copyrights that we are worried about China using without compensation.

The intellectual property that Trump and his allies across the political spectrum want to protect belongs to major corporations like Boeing, Pfizer and Microsoft. Their goal is to make China pay more money to get access to technology these companies have developed. That's great for their profits - sort of like Trump's tax cut - but does not help the vast majority of people who do not own lots of stock in these companies.

From the AAM

Step into the National Iron & Steel Heritage Museum in Coatesville, Pa., and you’ll come across replica after replica of the indomitable submarines, ships and tanks that have defended our nation since World War I. 

All of them originated in the steel mill just a few yards from the museum.

ArcelorMittal Coatesville, the oldest continuously operating steel mill in the country, makes some of the thickest and largest steel plates in North America – steel our nation’s defenders depend upon. Coatesville’s steel mill has long played a crucial role in America’s national security, supplying our troops from World War I up through recent conflicts in Iraq and Afghanistan.

But just a few years ago, it came close to shutting its doors for good.

THE OLDEST STEEL MILL IN AMERICA

ArcelorMittal Coatesville began as the Brandywine Ironworks and Nail Factory in 1810. It has known many names and had many owners over the years, but perhaps was best known as the Lukens Steel Company, the name it carried for most of the 20th century.

Steel from the mill helped build everything from steam locomotives to the St. Louis Gateway Arch to the Walt Whitman Bridge to the World Trade Center. In fact, the steel “tree” beams that withstood the collapse of the World Trade Center are now in Coatesville, while the mill itself helped to rebuild much of the city’s skyline after the Sept. 11 terrorist attacks.  

And it long played a vital role for our nation’s defense; in 1942, the U.S. Navy even gave Lukens its Navy “E” award in honor of the mill’s work to supply war materials.

In 2003, MittalSteel bought the mill, and it changed names again when the company merged with Arcelor in 2006. And it continued to play a vital role in defending the troops, supplying emergency armor to safeguard America’s combat vehicles during the Iraq war.

But by 2015, the mill simply could not compete against foreign steel, priced far below market value, that was flooding the U.S. market from government-owned steel mills in countries like China.

Things were bad. The mill could no longer afford to replace retirees, let alone expand its workforce. It had counted 840 employees in 2010, but just five years later, employment dwindled to below 500 for the first time in the mill’s history.

“We had taken a pounding,” said Fred Grumbine, who grew up in Coatesville and now works at the mill. “We were all worried about the layoffs and the business and the direction we were going.” 

Fred Grumbine says the steel mill in Coatesville, Pa., means "everything in this community." | Photo by Cathaljine Adams

But relief for Coatesville finally came in March 2018 with the announcement of the Section 232 trade action, which placed tariffs on steel imports.

Vonie Long, a fourth-generation steelworker who serves as United Steelworkers Local 1165 president, recalled that in the two years before the tariffs went into effect, order backlog and shipping tonnage – two important indicators of the mill’s success or decline – were “all over the map.”

 “A pretty good week and then a pretty slow week, then a pretty good week, so it was all over,” Long said.

With tariffs on foreign steel in place, Coatesville’s mill has found its footing in a fair market.

“Our backlog is kind of steady level now,” Long added. “Our shipping tons is kind of a continual, gradual uptick, so I think the tariffs have given us a lot of stability here in Coatesville.”

Donald Trump’s recent budget proposal included billions of dollars in Social Security cuts. The proposed cuts were a huge betrayal of his campaign promise to protect our Social Security system. Fortunately for Social Security’s current and future beneficiaries, he has little chance of getting these cuts past the House of Representatives, which is controlled by Democrats.

So Trump and his budget director/chief of staff Mick Mulvaney, who has long been hostile to Social Security, are trying another tactic to cut our earned benefits. They are pursuing a long game to reach their goal. In a divide-and-conquer move, the focus is not Social Security. At least, not yet.

Last week, the Trump administration revealed that it is planning to employ the so-called chained Consumer Price Index (CPI) in a way that does not need congressional approval. “Chained CPI” might sound technical and boring, but anyone who has closely followed the Social Security debate knows better. It has long been proposed as a deceptive, hard-to-understand way to cut our earned Social Security benefits.

Trump plans to switch to the chained CPI to index the federal definition of poverty. If he succeeds, the impact will be that over time, fewer people will meet the government’s definition of poverty—even though in reality, they will not be any less poor. The definition is crucial to qualify for a variety of federal benefits, including Medicaid, as well as food and housing assistance. The announcement was written blandly about considering a variety of different measures, but anyone who knows the issue well can easily read the writing on the wall.

Sen. Ron Wyden (D-OR) is tired of Republicans ignoring election security.

“[W]hat happened in 2016 could be really small potatoes compared to 2020,” said Wyden, an Oregon Democrat who sits on the Intelligence Committee.

Wyden is especially concerned that, as he said, “all of the political muscle is on the other side trying to protect the status quo.” Now he’s hoping to take his message straight to voters.

Fourteen other Democrats joined Wyden earlier this month to sponsor legislation that would force states to use hand-marked paper ballots and audit their election results. The bill, called the Protecting American Votes and Elections Act, would also set cybersecurity standards for voting systems and provide funding for states to implement the changes.

Three weeks ago, Speaker Nancy Pelosi (D-Calif.) and Senate Democratic Leader Chuck Schumer (N.Y.) traveled to the White House to talk infrastructure with President Trump. It went surprisingly well, and the trio met again on Wednesday to hash out ways to fund a $2 trillion bipartisan plan. Yay!

So... Trump angrily stormed out of the meeting on Wednesday, saying he wouldn't work with Democrats until they “get these phony investigations over with.”

And Pelosi responded that she’s now “praying” for him.  

LOL INFRASTRUCTURE WEEK AMIRITE?!?

Here’s how it went down:

Welp.

Trump is clearly playing politics, hitting back at Democrats for their ongoing investigations into him and his administration (and growing momentum to impeach him).

But there might be another reason why Trump decided to blow up the infrastructure meeting — he doesn’t want to have an internal fight with his own party. After all, Congressional Republicans have balked at the $2 trillion price tag of the plan, and Trump’s own chief of staff told people that it would be difficult to pass “any infrastructure bill in this environment, let alone a $2 trillion one.”

Infrastructure Week 2019 concluded last week without any big infrastructure announcements — no surprise there. However, Speaker Nancy Pelosi (D-Calif.) and Senate Minority Leader Charles Schumer (D-N.Y.) are scheduled to meet with President Trump on Wednesday to deal with financing for a proposed $2 trillion investment in infrastructure.

Without a doubt, our nation’s deteriorating bridges, roads, water systems and transit are desperately in need of this investment. Indeed, the American Society of Civil Engineers gave America’s infrastructure a D+ on its 2017 report card. And Americans agree that it’s well past time that our government concentrate on solutions — recent polling data finds that 81% of likely voters consider infrastructure investment to be a top policy priority.

But critical to the success of any infrastructure investment is the return of taxpayer dollars to America’s workers and communities rather than being sent overseas. Though current Buy America legislation mandates federally funded infrastructure projects utilize goods and materials from domestic sources, loopholes remain.

In an effort to strengthen Buy America and close these loopholes, Rep. Brendan Boyle (D-Pa.) introduced the Buy America 2.0 Act in the midst of this year’s Infrastructure Week.

“In America, our infrastructure is crumbling, and so is our middle class,” Boyle said. “When Congress moves to rebuild our infrastructure from our roads to our electric grid, we must do so in a way that boosts American workers and manufacturers, creating broad-based economic growth. That means using the high-quality U.S. steel, iron, and other materials made by hardworking Americans. The Buy America 2.0 Act is the only way to make sure that our federal investment in rebuilding our infrastructure is an investment in rebuilding the American Dream, too.”

Buy America 2.0 would extend Buy America domestic sourcing requirements to aviation and public transportation, foreign infiltration of which has recently presented alarming security risks. The bill already has attracted nearly two dozen cosponsors.

President Donald Trump blew up talks with congressional Democratic leaders on Wednesday, vowing that he would not do anything to address America’s crumbling infrastructure — an issue he has repeatedly cited as a chance for bipartisan cooperation — until Congress stopped doing oversight of his administration.

Trump met with Speaker of the House Nancy Pelosi (D-CA) and Senate Minority Leader Chuck Schumer (D-NY) on Wednesday morning, ostensibly to discuss a path forward on legislation to rebuild roads and bridges. Last month, the trio had agreed to the outlines of a $2 trillion infrastructure spending plan. But with congressional Republicans and his own advisers reportedly objecting to the cost, it quickly became apparent that Trump had little intention to actually reach an agreement at this meeting.

Minutes after the meeting, Trump appeared in the White House Rose Garden and announced that he was angry that his campaign’s Russian ties and his repeated attempts to obstruct investigations are still being scrutinized even after he (falsely) declared himself totally exonerated by special counsel Robert Mueller’s investigation.

He admitted at the podium he was the one to scuttle infrastructure talks before they even began.

From the AAM

For the first time in years, people in steel towns across the country have reason to be optimistic. 

Surging steel imports from countries like China long threatened the viability of these communities. China and other countries heavily subsidize their steel industries, making too much product and flooding the global market. That steel is then dumped into the U.S. market at rock-bottom prices, far below fair market value.

America's steel industry endured the pain of this unfair trade for years. Tens of thousands of workers were laid-off, dozens of mills closed, and entire communities suffered. Our national security also was at risk, since we need steel for the military and critical infrastructure.

In April 2018, the Trump administration initiated "Section 232" action to defend American steel from the onslaught of unfairly traded imports. Since that time, things have stablized. Production is up and thousands of new jobs have been announced, along with billions of dollars in investments. America's steel towns are back to work. 

Granite City is Ready to Make a Comeback

Ever since she was a little girl, Victoria Arguelles dreamt of opening her own café, somewhere that could serve as a gathering place for residents of her hometown of Granite City. 

The tight-knit Illinois community, located about 10 miles northeast of St. Louis, is a quintessential Midwestern industrial town. The city’s main employer is Granite City Works, a U.S. Steel mill that makes hot-rolled, cold-rolled and coated sheet steel products for customers in a variety of industries.  

Arguelles never worked in the mill, and nobody in her family did, either. Instead, she focused on her dream, and opened Kool Beanz Café in 2014, right in the heart of Granite City’s downtown. It quickly became that gathering place she had long imagined.

Then the steel mill shutdown.

Prominent congressional Democrats, including chair of the relevant House committee and eight presidential hopefuls, want to negate the Supreme Court’s ruling that mandates company-friendly forced arbitration that overrides workers’ rights.

The Restoring Justice For Workers Act, unveiled by House Judiciary Committee Chairman Jerry Nadler, D-N.Y., House Education and Labor Committee Chairman Bobby Scott, D-Va., and Sen. Patty Murray, D-Wash., would reverse the High Court majority’s decision last year that the Arbitration Act of 1925 overrides the National Labor Relations Act, approved 10 years later.

The ruling by the 5-man GOP-named majority effectively banned workers from going to court when their employment contracts – mostly by individuals with firms, but sometimes by unions with firms – mandate the two sides submit all disputes one by one to arbitrators.

Sending arguments to arbitrators winds up in company wins more than 90% of the time, judicial data and other studies show. And arbitration clauses not only override labor law, but the court’s majority ruled, can ban its use altogether. Their ruling also closes off class action suits. 

“The bill would overrule Epic Systems v. Lewis, which allowed employers to continue to require workers to sign forced arbitration clauses,” a summary from Scott’s panel says.

“Arbitration clauses prevent workers from banding together to enforce their legal rights and are often buried in the fine print of employment contracts, meaning many workers are not aware they waived their rights. Use of forced arbitration clauses that block workers’ access to the courts has led to widespread non-enforcement of workers’ rights, including their right to minimum wage, overtime, and to a workplace free of discrimination and sexual harassment.”

By Heather Boushey and Somin Park

The failure to make a serious dent in high levels of economic inequality in recent years will make responding effectively to the next inevitable recession more difficult, both economically and politically.

Rising income and wealth inequality, combined with financial deregulation and the expanding financialization of the U.S. economy, led to the credit boom and crash that substantially deepened the resulting economic crisis in 2008. Fiscal stimulus during the Great Recession prevented the economy from collapsing completely but was still insufficient and phased out too soon. What’s more, instead of taking lessons from our experiences a decade ago and strengthening our recession-fighting tools, recent policies passed by Congress have focused on cutting taxes, reduced the perceived space we have to increase spending in a downturn and exacerbated income and wealth disparities in the United States.

First, let’s zoom out. Recessions aren’t just one-offs. They are part of the economic cycle. Aggregate demand in the economy expands and contracts over time and recessions occur during prolonged contractions, which are more likely when economic inequality distorts consumption and savings. Inequality also affects the time it takes to recover from recessions because it subverts our institutions and makes our political system ineffective. Lifting the economy out of a downturn requires decisive government action to boost spending and aggregate demand, which often runs counter to the primary interests of those with economic and political power. As entrenched interests continually hamstring the government’s capacity to respond to a recession, policymakers should act now to prepare for the next one by addressing inequality in the United States.

Inequality makes recessions more likely

The U.S. economy is amid what will be the longest recovery in history if it lasts past June 2019. While no one can predict the next recession, it will happen. And, evidence from around the world indicates that our high inequality makes that even more likely.

Economists are examining how higher inequality is associated with slower income gains among those lower down the income and wealth ladder.1 The question has been most prominently explored by Jonathan Ostry and a group of his colleagues at the International Monetary Fund. In a book released early in 2019, Ostry and fellow IMF economists Prakash Loungani and Andrew Berg showed that inequality was associated with more frequent economic downturns.2 Growth may happen, but if inequality is high then the economic gains are more likely to be destroyed by the recession—or depression—that follows, with the economic pain all-too-often compounded for those at the lower end of the income spectrum.

A few folks have asked me about my friend Michael Strain’s recent Bloomberg piece where he argues against wage stagnation (it’s “more wrong than right”). It’s an old argument but one worth having, and Michael makes some important points and misses some big ones too (5, to be precise).

Larry Mishel and I counter a much shorter-term version of Michael’s case here but similar issues pertain. Certainly, the evidence he presents doesn’t change the basic wage story that I and many others carry around in our heads.

I think Michael’s most germane point is that nobody defines “stagnation.” If you think stagnation means real wages for low-wage workers have never gone up in the past four decades, you’re wrong. The figure below, from a recent piece I published (one I’ll get back to re a key point Michael misses), shows real wages for low and moderate wage workers stagnated through the 1970s, 80s, and 2000s.

But, in periods of very tight labor markets—the latter 1990s and now—they grew at a decent clip. This is key insight #1about real wage growth for too many workers. It’s not that they’ve never grown. It’s that their growth periods in recent decades have been few and far between. And it’s largely dependent of achieving persistent full employment, a condition that’s also been too rare in recent years (see this exciting new paper on precisely this point!).

Key insight #2 is that, sure, switching to a slower-growing deflator leads to faster wage growth and there are good arguments for various choices (see Mishel/Bivens’ cautions re Michael’s choice of using the PCE for wages). But it doesn’t wipe out long periods of stagnation. Here’s the real 20th percentile wage (2018 $’s) using both the CPI-RS (used in the figure above) and the PCE. Just like the above figure: periods of growth, but longer periods of stagnation.

The U.S. needs $2 trillion to bring its crumbling roads, creaky railroads, aging airports, 100-year-old water pipes and crowded subways up to snuff. It needs $2.5 trillion more to get ahead of the game and build projects to handle people, business and growth in the 21^st century, studies calculate.

But whether it will get the cash, much of it from the federal government, and spend it, is largely up to one man: GOP President Donald Trump.

 If he says “yes” to raising money for construction, legislation to rebuild the U.S. infrastructure measure goes through Capitol Hill lickety-split, with Democratic, Republican, labor and business support, the speakers at a May 13 conference declared.

If he doesn’t, it doesn’t go through at all.

That was the conclusion, both implicitly and explicitly, of many speakers at the half-day confab to kick off the 7^th annual National Infrastructure Week. The week will see more than 100 events elsewhere nationwide and lobbying by unions, businesses and state and county officials on Capitol Hill. A 52-group coalition, including the AFL-CIO and building trades unions, is sponsoring it.

“We need a major infusion by the federal government to do a massive infrastructure rebuild and build out,” which would also produce tens of thousands of well-paying construction jobs, said Sean McGarvey, the president of North America’s Building Trades Unions, and one of three union speakers at the D.C. confab.

And those jobs, which, once young people complete apprenticeships – without heavy college debt and with just a high school diploma along with the specialized training building trades provide – would pay each of them $60,000-$80,000 and provide a road into the middle class, added McGarvey.

“If we can do a massive infrastructure bill with the president, we’ll lift hundreds of thousands of people into the middle class,” he stated.

“Infrastructure is an amazing virtuous circle where you’re creating middle-class jobs and making things” – roads, bridges, airports, subways – “people need. So why are we not actually getting it done?”  Teachers President Randi Weingarten asked rhetorically during her panel discussion.

Richard Neal isn’t waiting for Donald Trump to act to repair and upgrade U.S. infrastructure.

The Massachusetts Democrat, who this year took over the chair of the key tax-writing House Ways and Means Committee, has been meeting with colleagues, union leaders and even some businesses to figure out where to find funds for that objective.

Their aim: Garner enough money, from raising the federal gas tax and elsewhere, to repair crumbling highways, replace broken bridges, upgrade aging subways and airports, modernize the electric grid and install new water lines instead of relying on 100-year-old mains, among other projects.

And the unionists are going to lobby federal lawmakers, Democrats and Republicans, for whatever new funds are needed, several leaders pledged this week.

They won’t have much trouble making their case. On the morning of an outdoor Capitol Hill press conference on the push, May 15, one participant, Rep. Michael Bost, R-Mo., found out that “I-44 westbound in my district” north of St. Louis “was closed when they found a 6-inch crack” in road’s superstructure.

“It’s a safety issue,” the former firefighter added. “How would you like to have your house on fire and have the truck hook up to a hydrant, and the water main serving it breaks?”

Neal’s discussions, with members of the House Transportation and Infrastructure Committee and with the 85-member House Labor and Working Families Caucus, come as once again lawmakers prepare to tackle the problems of U.S. infrastructure – problems that are so acute that the American Society of Civil Engineers gives the country a D+ grade on the issue.

Running east-west through the middle of the Little Rock, Ark., metro area, Interstate 630 divides Arkansas’ capital city from its top suburb in more ways than one.

Not only does the federally funded freeway split Little Rock on the south from North Little Rock on the north, but it also splits the whiter, richer north side of the metro area, from the poorer, black and brown south side.

That segregation’s intentional. And that’s common, from Detroit’s Eight Mile Road to Chicago’s Dan Ryan Expressway to New York City’s Robert Moses building bridges low enough so that city buses, carrying blacks, couldn’t drive under them on the way to the Big Apple’s beaches.

And that’s what advocates of pumping billions of new federal dollars U.S. highways, railroads, subways and airports want to prevent from happening again.

Studies show that from Baltimore to Detroit, from Little Rock to Chicago, highways – and, before them, railroads – were deliberately sited by governments and built by either governments or companies to maintain or extend racial and class segregation. And there were unusual twists like Moses’ anti-bus bridges, too.

And while an airport site might be neutral racially, flight paths the planes follow nationwide in takeoffs or landings are another matter, speakers at a May 13 infrastructure symposium said. Guess who suffers the most plane noise from Chicago’s O’Hare Airport? Hint, unless you’re on the North Shore late on summer evenings, it’s not ultra-ritzy Kenilworth.

And federally funded expressways not only split the races, but often, especially after the advent of mass suburbanization following World War II, permitted “white flight” from central cities, studies show.

So Chicago’s monstrous Dan Ryan Expressway not only separates whites from blacks on the South Side, deliberately, but lets other whites drive out of the Loop at night to the south and southwest suburbs.

Former Obama-era Transportation Secretary Anthony Foxx, Little Rock Mayor Frank Scott and Teachers President Randi Weingarten don’t want to see a rerun of all that.

Even as Volkswagen keeps saying it’s officially neutral, its bosses convinced the National Labor Relations Board to throw a legal delay into the United Auto Workers’ new organizing drive at its Chattanooga, Tenn., plant.

In response, the union has dropped the labor law-breaking – formally called unfair labor practices – charges it filed against VW in an ongoing dispute over whether the company must recognize UAW’s recognition win by Local 42 in the small unit of 160 unionized VW skilled trades workers there.

That withdrawal knocks the props out from under the company’s maneuver, opening the way for a vote among all 1,700 Chattanooga workers, the union told the NLRB on May 9. The board, now dominated by Trump-named members, however, has yet to agree.

On May 3, by a 2-1 party-line vote, the NLRB sided with VW and delayed the vote.

The legal maneuvering marks UAW’s second attempt to organize all the Chattanooga workers in one of only two VW non-union plants worldwide. The other is in China.

UAW’s campaign to unionize Chattanooga, and a similar effort at Nissan’s plant in Mississippi, is part of the union’s drive to break through into foreign “transplant” auto factories in the traditionally and culturally union-hostile South.

In turn, the UAW drive is also part of organized labor’s wider focus on organizing the unorganized in the growing, but anti-union, region. Tennessee was 5.1% unionized and Tennessee was 5.5% unionized last year, federal calculations show.

Both U.S. and foreign automakers have been erecting plants in states of the old Confederacy in barely concealed gambits to avoid unions. And when UAW and other unions try to organize such plants, bosses play off white workers against their African-American colleagues in a time-tested “divide and conquer” campaign.

Coral Nichols will be eligible to vote again when she is 188 years old. That’s the estimate, at least, if she pays the state of Florida $100 per month to satisfy her nearly $190,000 debt.

Nichols is one of 1.4 million people with felony convictions in Florida who had their right to vote restored last fall following the passage of Amendment 4, a victory that marked one of the most significant expansions of the right to vote in the United States in the last century. 

“It was completely amazing,” Nichols said, recalling when the ballot initiative passed in November. “We had all worked so hard, and we had all believed that the people in the state of Florida believed in second chances.”

Many activists and experts argue that Amendment 4 was self-executing, meaning that once it was passed by voters, the measure would be put into effect, no questions asked.

But Republicans in the state legislature last week passed a new bill making regaining the vote conditional on having first fully repaid any outstanding fines and fees — including ones not related to their felony conviction.

Gov. Ron DeSantis (R) has said he will sign the bill into law in the coming days. When he does, it could keep people like Nichols from the ballot box for the rest of their lives.

Nichols, 41, grew up in Oklahoma. Her father, a Vietnam War veteran, was abusive, and Nichols says stealing money from her family and being able to buy herself new things made her feel good. Her father died when she was 21, and Nichols’ spending habits spiraled. “My addiction became money,” she said.

Language matters. For example, the words that corporate and government officials use to report on the health of America’s economy can either make clear to us commoners what’s going on – or hide and even lie about the reality we face.

Consider the most common measurement used by officials and the media to tell us whether our economy is zooming or sputtering: Wall Street’s index of stock prices. The media literally spews out the Dow Jones Average of stock prices every hour – as though everyone is waiting breathlessly for that update.

But wait – nearly all stock is owned by the richest 10 percent of Americans, so the Dow Jones Average says nothing about the economic condition of the 90 percent majority of Americans. For us (and for the true economic health of America as a whole) we need to know the Doug Jones Average – how’re Doug and Dolores doing?

As we’ve seen, stock prices keep rising to new highs, while wages and living standards of the middle class and poor majority have been held down by the same corporate and political “leaders” telling us to keep our eye on the Dow. To disguise this decline they play another dirty language trick on us when they issue the monthly unemployment report. Currently, with the unemployment rate down to four percent, they tell us America’s job market is booming!

These days there’s enough happening on the Trump administration’s trade agenda that it warrants a weekly update. It’s Tuesday! And we’re gonna talk about trade!

It’s Trade Tuesday!

Last week President Trump, on the advice of his trade negotiator, further raised tariffs on Chinese imports after Chinese negotiators made sweeping revisions to agreements the U.S. side believed were settled.

Those Chinese negotiators still arrived in Washington for talks a few days later, apparently just to keep the talks going. The U.S. tariffs went up while they were still in town, and China has since retaliated with more tariffs against American imports of its own – and its state-run media outlets, which have until now been relatively quiet on the topic of the American trade dispute, are now getting involved. This editorial was featured in the Xinhua News Agency and the People’s Daily:

“The most important thing is that in the Sino-U.S. trade war, the American side fights because of greed and arrogance. If it does not brag and make up stories, the country’s morale will break. China is fighting back to protect its legitimate rights and interests.”

“… The trade war in the United States is the creation of one person and his administration who have swept along the entire population of the country. Whereas, the entire country and all the people of China are being threatened. For us, this is a real ‘people's war.’”

The third-largest coal company in the United States has declared bankruptcy, leaving the future of its more than 1,000 workers uncertain. The announcement is also the latest indicator that the faltering coal industry is spinning further into decline despite the efforts of President Donald Trump to save it.

Wyoming-based Cloud Peak Energy filed for Chapter 11 reorganization on Friday, a move that has been expected since at least the spring. The company has pointed to a weak market as a leading reason for its struggles, in addition to sluggish success in expanding exports. Officials said the company’s mines will continue to operate throughout the bankruptcy process; Cloud Peak operates two mines in Wyoming and one in Montana.

“While we undertake this process, Cloud Peak Energy remains a reliable source of high-quality coal for customers,” Cloud Peak President and CEO Colin Marshall said in a statement.

The company’s workers lack union protections. But even coal miners backed by unions are at risk — a ruling earlier this year allowed a coal company to abandon union contracts. And broader threats to federal funding for miner benefits are jeopardizing pensions for tens of thousands of workers.

Cloud Peak’s financial troubles reflect the broader realities of coal, which is being displaced by cheaper energy sources, including natural gas and renewables. Since 2015, major coal companies Alpha Natural Resources, Peabody Energy, Arch Coal, Mission Coal, and Westmoreland Coal have all declared bankruptcy amid falling profits and increasing concerns over long-term viability.

While that trend has continued through several presidential administrations, more coal plants closed during Trump’s first two years in office than during the entire first term of the Obama administration.

In total, at least 50 U.S. coal plants have shuttered under Trump as of this month, according to a Sierra Club report released last week. The uptick reflects market realities but it also comes despite the White House’s best efforts to revive coal.

The Supreme Court held on Monday that antitrust plaintiffs may sue Apple for allegedly using its monopoly over iPhone app sales to jack up prices. The decision itself is a minor one, as it largely turns on who is allowed to sue the tech giant for its alleged antitrust violations, not whether Apple broke the law.

Nevertheless, Apple Inc. v. Pepper is significant for an unexpected reason. It is the first case where Trump judge Brett Kavanaugh crossed over to vote with his four liberal colleagues in a 5-4 decision.

The iPhone’s app store, as Kavanaugh notes in his opinion, “is the only place where iPhone owners may lawfully buy apps” for their phone. Apple permits developers to set the prices of these apps, but it also takes a 30% commission on all app sales, regardless of what price the developer sets.

The theory of the plaintiffs’ case is that, were iPhone apps sold in a competitive market with multiple sellers, Apple would have to lower its 30% commission in order to compete with those other sellers. Thus, Apple effectively uses its monopoly on app sales to drive up prices and jack up its own profits.

So it’s a fairly straightforward antitrust case, but there is one hitch. More than four decades ago, in Illinois Brick Co. v. Illinois, the Supreme Court held that only “direct purchasers” may bring antitrust suits against an alleged monopolist.

Illinois Brick involved an alleged price-fixing scheme by a brick company that sold those bricks to masonry contractors, who in turn sold pre-assembled structures to general contractors, who in turn sold construction services to the state of Illinois. Illinois sued the brick company, alleging that it paid higher construction costs because of the price fixing scheme. The Supreme Court held that Illinois could not sue the brick company because, in Kavanaugh’s words, “the State had not purchased concrete blocks directly from Illinois Brick.”

But, as Kavanaugh explains in his Apple opinion, this more recent case is not Illinois Brick. That is, Apple is not a case where a company sold a product to a contractor, who sold it to another contractor, who sold it to an antitrust plaintiff. Apple is a case where a tech company sold a product directly to consumers. Thus, under Illinois Brick, Apple may be sued by those consumers.

Indeed, Apple is such a straightforward case that the most surprising aspect of Monday’s decision is that it produced a dissent — much less a four person dissent. Had Apple prevailed, that decision could have had negative consequences for consumers. As Kavanaugh explains, “Apple’s theory would provide a roadmap for monopolistic retailers to structure transactions with manufacturers or suppliers so as to evade antitrust claims by consumers and thereby thwart effective antitrust enforcement.”

Nevertheless, the most important question arising from Apple is what we should make of Kavanaugh’s apostasy. As I wrote last January, Kavanaugh is not Neil Gorsuch — the nihilist conservative that President Donald Trump placed on the Supreme Court after Senate Republicans held a seat on that court open for more than a year. While Gorsuch embraces “a will-to-power approach to judging” which demands that he seize as much power as he can, and as fast as he can, Kavanaugh and Chief Justice John Roberts “appear to prefer a slower, more incremental approach.”

When Vice President Mike Pence toured the damage in America’s heartland caused by historic flooding, he pledged to work with Republicans and Democrats to ensure farmers and ranchers in Iowa and Nebraska receive the federal funding they need to rebuild. He was right to do so.

Asking rural families to front the full cost of fixing their infrastructure would be appalling – and would not just be a disservice just to America’s heartland. It would hurt our entire economy. That’s because the roads, bridges, and levies that, for generations, have allowed the Midwest to feed a nation and export food products do not function in a vacuum. Like transit systems in the Northeast or ports on the West Coast, they are all part of a complex, interconnected transportation network that allows this country, it’s economy, and working families to prosper, and they deserve federal funding.

Somewhere along the way, though, it seems too many elected leaders have lost sight of this. Instead of valuing projects based on their merits, some are now valuing projects based on the political landscape of the states they are in. This dangerous approach to infrastructure jeopardizes the integrity of our national system, undermines America’s position as a global economic leader, and harms working families.

Just look at California High Speed Rail (CAHSR). Despite ongoing criticism, California is still committed to a high-speed rail network that will improve mobility and spur economic activity in an area that desperately needs both. On paper, the project is everything our president said he wanted in infrastructure. California has contributed real dollars—to the tune of $11 billion, has involved the private sector in a significant way, and is trying to consolidate environmental reviews. The Administration’s effort to claw back federal dollars and slow walk environmental approvals is nothing more than an attempt to further politicize this project.