Category: Allied Approaches

The 7 Biggest Failures of Trumponomics

Robert Reich

Robert Reich Former U.S. Secretary of Labor, Professor at Berkeley

Donald Trump and Republicans in Congress keep crowing about the economy, when in reality Trumponomics has been a disaster. Here are its 7 biggest failures:

1. Trump promised to bring down America’s trade deficit “as fast as possible.” Instead, the trade deficit has hit an all-time high. The United States is now purchasing more goods and services from the rest of the world than we sell abroad than at any time in history.

2. As a presidential candidate in 2016, he said he could completely eliminate the federal debt in 8 years. Instead, the federal debt has exploded thanksto Trump and the GOP’s $1.9 trillion tax cuts for the wealthy and corporationsThey’re already using the growing debt to threaten cuts to Social Security, Medicare, and Medicaid.

3. He promised to boost the wages of American workers, including a $4,000 pay raise for the average American family. Instead, wages for most Americans have been flat, adjusted for inflation. Meanwhile, over the same period, corporate profits have soared and the rich have become far richer, but the gains haven’t trickled down.

4. His administration said that corporations would invest their savings from tax cuts. Instead, corporations spent more money buying back shares of their own stock in 2018 than they invested in new equipment or facilities. These stock buybacks provide no real benefit for the economy, but boost executive bonuses and payouts for wealthy investors.

5. He promised a tax cut for middle-class families. Instead most Americans will end up paying more by 2027.

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Making sense of NAFTA and its replacement

Stan Sorscher

Stan Sorscher Labor Representative, Society for Professional Engineering Employees in Aerospace

In 2016, Donald Trump’s trade message was very simple: the North American Free Trade Agreement (NAFTA) was the worst trade deal ever negotiated. He has renegotiated NAFTA, rebranding the deal as the United States-Mexico-Canada Agreement (USMCA). We never quite understood his objection to the original NAFTA, and we don’t understand how USMCA fixes it. You need to squint to see the difference between NAFTA and its replacement.

“I have a gut, and my gut tells me more sometimes than anybody else’s brain can ever tell me,” Trump has said. His gut instinct said NAFTA was bad. Unfortunately, gut instinct is typically simplistic, often impulsive, and by definition not strategic or coherent.

We need to think of our domestic policy and trade policy together. Tariffs, like trade deals, make sense only as tools within a larger coherent strategy. Trade policy should reinforce the principles in our domestic policy. If trade policy is not working, it’s a fair bet that our underlying domestic policies aren’t either.

Since 1980, the prevailing political message has been, “Markets will solve all our problems. Government is the problem.”

The term for this is neoliberalism. “Neo” means new. In the language of economics, “liberal” means “liberated” or free from regulation. Neoliberalism “frees” markets by shrinking government, dismantling social programs, and cutting investment in education and research-and-development.

Many of our biggest problems — climate change, growing income inequality, health care, food safety, and workplace safety — are textbook market failures. Neoliberalism responds with its universal prescription — make business succeed and well-being will trickle down to the rest of us.

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Foxconn Is Looking to Move iPhone Production Out of China… Maybe to Wisconsin?

Elizabeth Brotherton-Bunch

Elizabeth Brotherton-Bunch Digital Media Director, Alliance for American Manufacturing

Two big manufacturing stories we’ve been following closely over the past few months are converging.

First, there’s the U.S.-China trade negotiations, which are… so not happening right now. President Trump, emboldened from his recent tariff spat with Mexico, is playing hardball with China, and the Chinese are not backing down, either.

That means that businesses are looking at long-term strategies on how best to survive a trade war between the two nations before things really get out of hand.

One of those companies is Foxconn, which makes a ton of tech but is perhaps best known for manufacturing iPhones in China. Most of the factories that produce the iPhone and its various parts are in China, and Foxconn employs 350,000 people to make them at a massive factory complex in Zhengzhou called “iPhone City.”

Working conditions there are just great and people are very happy.

But I digress. If Trump does indeed follow through on his current plan to place a 25 percent tariff on Chinese imports, the iPhone and other Apple gadgets would take a hit. As The Verge noted, one-third of Apple’s iPhone revenue comes from products imported to the United States from China, so it’s a big deal for the California-based company’s bottom line.

Apple would have to decide whether to pass the cost increase onto consumers, which could raise the price of the already expensive iPhone by up to 16 percent, according to Bloomberg. Demand for the iPhone could then decrease by up to 40 percent. Either way, Apple is in a bad place.

So Foxconn — which relies on Apple for about half of its revenue — is now looking at ways to make the iPhone outside of China and avoid the tariffs. Foxconn executives already have made a big deal about how it is “totally capable of dealing with Apple’s needs to move production lines,” possibly to plants in Brazil, Mexico, Vietnam or... Wisconsin? 

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Trump to Working Class: 'Adios, Chumps'

Jim Hightower

Jim Hightower Author, Commentator, America’s Number One Populist

Congratulations on that nice pay raise you got last year, a 7% hike—wow!

Seven percent might not sound all that big, but after 40 years of stagnant wages, even a small uptick can help cover some of your old credit card bills or get an upgrade on your 10-year-old pickup.

Oh, wait ... You say you didn't get 7%? Oops, my mistake. It was the CEOs of corporate giants who reported to the Associated Press that they enjoyed a median jump of 7% last year. And as their paychecks were already king-size, that uptick amounted to an extra $800,000 in their take-home, for a median yearly income of $12 million each. Bear in mind that "median" means half of the corporate bosses grabbed more than 7%. For example, David Zaslav, honcho of the Discovery television network, had a 207% boost in pay, raising his total take in 2018 to $130 million.

These lavish payouts to top-floor bosses—combined with a miserliness toward rank-and-file employees who actually produce the corporate wealth—is creating an untenable income disparity in corporate America, stretching inequality in our Land of Egalitarianism to the snapping point. The pay gap between aloof CEOs and typical employees nearly doubled last year at a range of corporate giants, from PayPal to CVS Pharmacy, and it tripled at Discovery. AP's recent survey of 340 major corporations found that compensation inequality is now so extreme that a middle-wage employee would have to work 158 years to make as much as his or her chief executive was given last year alone. This separation is widening at warp speed, propelled by the boundless greed and narcissism of so-called leaders like Zaslav. To amass as much pay as he pocketed in 2018, a typical Discovery employee would have to work 989 years.

When you hear corporate chieftains and such corporate cheerleaders as Donald Trump gloat that our economy is "booming," ask yourself: A boom for whom?

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How Republicans’ zeal for gerrymandering could blow up in their faces

Ian Millhiser

Ian Millhiser Senior Constitutional Policy Analyst, Think Progress

Let’s talk about a few datapoints that, on the surface, have nothing to do with the Supreme Court — but that in reality could determine whose ox is gored by two upcoming partisan gerrymandering decisions.

The first is a recent Ipsos poll showing that President Donald Trump only receives between 36 and 38 percent of the vote against any of the Democrats named in that poll. Against former Vice President Joe Biden, the current frontrunner in the Democratic primary, Trump loses 50-36. And, while the Ipsos poll shows Trump performing worse than some others, the Real Clear Politics polling average shows Biden winning by more than eight points.

Meanwhile, 3-month U.S. Treasury bonds recently started producing a higher yield than 10-year bonds. This phenomenon, known as a “yield curve inversion,” occurs when investors believe that the economy’s long term prospects bode ill, and so are willing to accept a lower rate of return for one of the safest investments on the planet — a long-term U.S. government bond.

Yield curve inversions are often harbingers of recession.

Trump, in other words, could have to campaign with no major policy accomplishments besides a tax giveaway to the very rich, and he may need to do so while the economy is falling apart. Meanwhile, polls already suggest he’s an underdog, even with a fairly strong economy at the moment.

Which brings us back to Rucho v. Common Cause and Lamone v. Benisek, the two Supreme Court cases challenging partisan gerrymandering.

Hit by a wave

The thing about gerrymandering is that, barring a well-timed electoral wave, it tends to perpetuate itself. Virginia’s House of Delegates is so rigidly gerrymandered to benefit Republicans that Democratic candidates won the statewide popular vote by more than 9 percentage points in 2017, yet Republicans kept a narrow majority in the statehouse. In Wisconsin, Democratic candidates won 54% of the popular vote in the 2018 state assembly races, yet Republicans control an astounding 63% of the assembly seats.

Thus, unless Democrats win the states of Virginia and Wisconsin in a crushing tidal wave that washes Republicans into the sea, the GOP will likely control the Virginia House of Delegates and the Wisconsin state assembly in 2020, when new maps must be drawn.

But early polling data suggests that such a wave is possible in 2020, as under-performing presidential candidates tend to drag down their entire party. And if 2020 is a recession year, a Democratic wave might be inevitable.

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American Medical Association is warming up to single payer after decades-long opposition

Amanda Michelle Gomez

Amanda Michelle Gomez Health Reporter, Think Progress

The American Medical Association (AMA) — one of the nation’s most powerful health groups — is warming up to policy ideas that expand the role of government-run health care, thanks to activists trying to change minds from the inside.  

Every year, the country’s largest physician group hosts a meeting to discuss its priorities. The top-line from this year’s annual conference is that the organization will continue its support for the Affordable Care Act (ACA) while still opposing single-payer health care. “The ACA should be strengthened, not abandoned,” said the AMA, summarizing the conference on its website.

But on Tuesday, the AMA nevertheless came close to eliminating its decades-long position against single payer, or a system where everyone gets health care through one insurer run by the federal government. A day before, the AMA agreed to study public option approaches, where the federal government would expand access to existing public plans while leaving private plans alone. The growing support within AMA to at least neutralize its long-held position on the matter presents something of an internal tension, as the group is part of a coalition of organizations which are actively lobbying against these kinds of policies.

The AMA did not respond for comment.

The House of Delegates, the policy-making body within the more than 200,000 member organization, rejected a resolution introduced by the AMA’s own student caucus to put an end to its current stance on single payer. Many dismissed the vote as just another rebuke to Medicare for All, but it was the closest single-payer activists ever came to changing AMA’s position; the vote was 292 to 254, or 53% to 47%. Activists intend to try again.

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Take Action! Tell Congress to Support the Transit Infrastructure Vehicle Security Act

Elizabeth Brotherton-Bunch

Elizabeth Brotherton-Bunch Digital Media Director, Alliance for American Manufacturing

We've written fairly extensively about the threat that Chinese state-owned companies like the China Railway Rolling Stock Corporation (CRRC) and Build Your Dreams (BYD) pose to both good-paying jobs and our national security. AAM President Scott Paul even testified about it at a Congressional hearing a few weeks back.

Now you have a chance to weigh in!

In case you need to catch up, here's the deal. CRRC and BYD are owned and controlled by the Chinese government, which is seeking to systematically drive competitors out of the market and create a monopoly in both the rail (CRRC) and bus (BYD) production markets. CRRC has severely underbid competitors for contracts to build railcars in cities like Chicago, Los Angeles and Philadelphia, while BYD has nabbed contracts in Los Angeles and Albuquerque. 

China's goal isn't to make money, as companies that operate in a free and open market would. Rather, it wants to completely take over the entire production of America's rail and bus systems as part of its "Made in China 2025" plan. This, of course, creates a number of national security risks — from potential spying on passengers to hacking into transit systems — as well as big economic worries, as there are currently 90,000 good-paying jobs in the U.S. that depend on transit production.

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Elizabeth Warren Is Right on Currency Values

Dean Baker

Dean Baker Co-Director, Author, Center for Economic and Policy Research

Elizabeth Warren’s proposal to raise the value of the Chinese yuan and other currencies against the dollar is not getting good reviews in the media from economists. As can be expected, some of the arguments are pretty strange.

As the usually astute Noah Smith tells it in his Bloomberg piece, the problem with the trade deficit is:

“U.S. consumers are consistently living beyond their means, which seems unsustainable.”

The implication is that if the trade deficit were lower than we would be forced to cut back consumption. But the major problem the United States has faced over the last decade, according to many economists, is “secular stagnation,” which is an obscure way of saying, not enough demand.

Contrary to what Smith tells us, U.S. consumers are not living beyond their means, rather we actually need them to spend more money to bring the economy to full employment. To be more precise, we need them to spend more in the domestic economy, to increase demand here as opposed to in our trading partners. (We can also bring the economy to full employment by having the government spend more money on things like health care or a green new deal.)

Smith also disagrees with Warren’s mechanism for getting the dollar down, which involves a mixture of negotiations and threats of countervailing measures. The idea is that the biggest actor is China, who for some reason it is assumed would never agree to raise the value of its currency. CNN raises similar concerns. This view seems badly off the mark.

First, it is assumed in both pieces that China is no longer acting to deliberately keep down the value of the yuan against the dollar, even though most economists now concede that it deliberately depressed the value of its currency to maintain large trade surpluses in the last decade. (They did not acknowledge China’s currency management at the time.)

It is wrong to claim that China is not now acting to keep down the value of the yuan. While it is no longer buying large amounts of dollars and other currencies, it holds a stock of more than $3 trillion in reserves, which is well over $4 trillion if we add in its sovereign wealth fund.

This huge stock of foreign assets has the effect of depressing the value of the yuan against the dollar in the same way that the Fed’s holding of more than $3 trillion is assets helps to keep down interest rates. While few economists question that the Fed’s holding of assets leads to lower long-term rates than would otherwise be the case, they seem to deny that China’s holding of a large stock of foreign assets has similar effects in currency markets.

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10 American-Made Father’s Day Gifts Your Dad Will Love

From the AAM

Father’s Day is the day of the year when we get to celebrate and thank all the dads, granddads, and other folks across the country who hold a special place in our hearts. If you are looking for a special way to celebrate your dad — and also support job creation and American makers — check out our list of 10 U.S.-made gift ideas, compiled by AAM's own Luke Ferguson and Joseph Swindal.

1. Allen Edmonds 

Is your dad in need of a new wardrobe? Check out Allen Edmonds, a U.S.-based manufacturer founded in Belgium, Wis. by Elbert W. Allen. To this day, Allen Edmonds is committed to creating quality, carefully-made products all across America. Although the company is most known for its high-quality shoes, it also sells a variety of American-made shirts, ties, and belts. Your dad will be the talk of the barbeque with an Allen Edmonds outfit; check out their Father's Day sale for big savings.

2. Craftsman Tools

That’s right, you’re reading it correctly: Craftsman is back, better, and Made in the USA! Stanley Black and Decker bought Craftsman in 2017 and immediately got to work moving the manufacturing of the well-known tools back to the United States. Likewise, they have regenerated their previously respected name. Although not everything in its line is made locally, Craftsman offers a variety of American-made tools any father would love to have. Whether it’s an addition to his shed or his workshop in the garage, Craftsman has got the tool that will help your father get the job done!

3. Cutco Knives

Knives are essential everyday items that prove to be great Father's Day gifts. Cutco is a knife company based in Olean, N.Y. and is committed to manufacturing all of their products in America — and by members of the United Steelworkers! The company sells kitchen knives, hunting knives, pocket knives —you name it. . 

4. Gibson Guitars

Is your father musically gifted? If so, this is the perfect gift idea for you! Gibson Guitars have been manufacturing some of the highest quality guitars in America since 1903. Based out of Nashville, Tenn., the famed company produces every variety of guitars you could imagine, all Made in the USA. Whether your dad likes to rock out on an electric guitar, or play some classic country tunes on an acoustic, Gibson offers the perfect guitar for you while maintaining a standard of American-made products.

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Farm workers in New York deserve overtime pay

By David Dyssegaard Kallick and Daniel Costa

After decades of advocacy, New York stands at the brink of potentially passing the Farmworker Fair Labor Practices Act, a bill that would extend to the agricultural sector the right to organize and the right to overtime pay that most workers in other industries enjoy. Governor Cuomo has said he will sign the measure if it passes.

Democrats recently took leadership of the state senate and have a longstanding majority in the state assembly. Both chambers have an opportunity to take advantage of those majorities in a way that results in a historic improvement for the lives of workers who toil in difficult conditions for low pay in New York’s fields and dairies.

But victory is far from certain: plenty could happen between now and June 19, when New York’s legislative session ends. The New York Farm Bureau, unsurprisingly, is saying the bill “could dramatically change agriculture and hurt our rural economy.”

new report from the Fiscal Policy Institute (FPI) shows how the bill will help farmworkers, be manageable for farm owners, and offer tangible benefits to local communities.

The bill will most obviously be a gain for farmworkers in New York. On average, it will increase weekly earnings by between $34 and $95 per week. That’s money that will also be spent in the local economy, helping boost local businesses (and adding to sales tax revenues).

Other states have enacted laws requiring that at least some overtime be paid to farmworkers after a certain number of hours. In California—the largest agricultural state by far with over $50 billion in cash receipts going to farms and ranches—the legislature and governor enacted a law in late 2016 that gradually phases in overtime pay for farmworkers beginning this year.

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Union Matters

Uber Drivers Deserve Legal Rights and Protections

By Kathleen Mackey
USW Intern

In an advisory memo released May 14, the U.S. labor board general counsel’s office stated that Uber drivers are not employees for the purposes of federal labor laws.

Their stance holds that workers for companies like Uber are not included in federal protections for workplace organizing activities, which means the labor board is effectively denying Uber drivers the benefits of forming or joining unions.

Simply stating that Uber drivers are just gig workers does not suddenly undo the unjust working conditions that all workers potentially face, such as wage theft, dangerous working conditions and  job insecurity. These challenges are ever-present, only now Uber drivers are facing them without the protection or resources they deserve. 

The labor board’s May statement even seems to contradict an Obama-era National Labor Relations Board (NLRB) ruling that couriers for Postmates, a job very similar to Uber drivers’, are legal employees.

However, the Department of Labor has now stated that such gig workers are simply independent contractors, meaning that they are not entitled to minimum wages or overtime pay.

While being unable to unionize limits these workers’ ability to fight for improved pay and working conditions, independent contractors can still make strides forward by organizing, explained executive director of New York Taxi Workers Alliance Bhairavi Desai.

“We can’t depend solely on the law or the courts to stop worker exploitation. We can only rely on the steadfast militancy of workers who are rising up everywhere,” Desai said in a statement. 

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Make Father's Day Union Made!

Make Father's Day Union Made!