LyrArc Article Gist
Investments made by president Biden and Congress of $1 trillion in manufacturing and infrastructure will take time to go into effect. It is wrong to say this shows limits of this policy of investing in America as it has increased growth, maintained employment levels, and helped America recover from the pandemic. Biden did this for the National good not for Democrats and it was designed to benefit red and blue states like. Its effects will be felt long after the next election cycle in just 3 years January 2028, so that to say that president Trump or Republicans would get credit is an erroneous notion. The next president could come from the opposite party and the long term effects of this could benefit all parties, giving everyone a stake in making it work. The narrow view also overlooks the great benefits from this investment of $1 trillion for America's trading partners and allies in Asia and Europe, the American leadership role in CHIPS and Science as a result, and the respect of the world in the way America has handled its economic affairs. ...

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This opinion in the DW.com after the selection of ExxonMobil's Rex Tillerson as U.S. Secretary of State, asks whether the exploitation of natural resources and gaining advantages in trade agreements replaces concern for human rights. Still it says after all these concerns Rex Tillerson deserves a fair chance.

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The two front runners among Democrats in the campaign for President in the U.S. are building their lead on the basis of programs to reduce inequality and build the social fabric. Bernie Sanders and Elizabeth Warren support a program of Medicare For All. This program is a single payer program run by the government so that medical costs can be cut by the government directly negotiating cuts, which would reduce some of the cost.The WSJ looks at the ways this can be financed at a cost of between $11 trillion over a decade. Programs of less extensive coverage  in Medicare for All excluding undocumented workers and having individuals share some costs would cost this much, according to some experts.The gap would be financed by taxes such as that on Medicare currently. Sanders additional tax premium would be 7.5% paid by employers and 4% by employees. About $1 trillion is generated by each percentage point of taxes over a decade says CBO, so that a combined 11.5%  tax would cover Medicare for All. Alternatives or some combination would include this with taxes on the wealthy. Tax hikes on wealth, income and financial transactions would generate $11 trillion over a decade, according to the Committee for a Responsible Budget. Currently a majority favors a Medicare for All plan, and this support could grow as people understand that it would be progressive and reduce the burden on the middle class by shifting some of the burden to the wealthier in society in today's economy, where much of the increase in wealth over the last 3 decades has gone to upper income people. Much more so in the U.S. than in Europe creating a tear in the social fabric and disaffection with Democrats, who in earlier administrations from Clinton to Obama failed to maintain the gains made under FDR, Truman and Kennedy. This has led to a Republican administration under president Trump that won over disaffected Democrats but hope to merley to maintain the status quo. Warren is trying to change this with bold social programs that fit today's needs and circumstances. ...

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The US is on track to bring back 350,000 jobs in 2022 that were taken overseas during the two decades of hyper growth in China, according to the Reshoring Initiative. A false idea was created mostly by economists and business that shifted jobs to China during two Democratic and one Republican administration, the Clinton, Obama and the Bush administrations, that this would benefit the American workers and families through lower prices at the retail level. It ignored the severe damage this would do to jobs, incomes and whole communities when factories on which they depended for a living were shipped overseas. It damaged labor in ways that destroyed much of the American working class and the families built during the years of FDR, Truman, Eisenhower, Kennedy and Johnson. Business failed during this period to meet the challenge of higher American wages and productivity issues by using innovation and other steps to keep manufacturing at home.  This led to the hyper growth that did not benefit China, because a moderate pace of growth would have helped China control the rampant contamination of its air, water and soil. It also was leading China to a dead end reached during the 2016 election campaign with the election of president Trump with deep discontent from workers in midwestern states. The pandemic simply underscored the need for supply chains that were close to home and reliable in crises. By 2020 president  Biden was committing to a restructuring of the supply chains and pushing forward with it with legislation in the $369 billion Climate bill, and SCIENCE and Chips Act, to make solar panels, semiconductors and other products in the US. Reports from China showed that growth was slight or flat during 2022 and youth unemployment at 20%. The policy was to shift people back from the cities to the rural areas and support the informal economy, a sense of nationalist sentiment, and preparing for a future where the supply chain for the US and the European Union had moved away from China. In the long run the policies now look as ones that benefitted neither the US, the European Union, India or China.  ...

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Garlic, ginger, turmeric and similar products are vital for healthy living and healthy food. So it is surprising that so little has been done before the Trump tariffs on Chinese food dumped in the U.S. This BBC report by Pamela Parker says 1994 was when the U.S. confirmed dumping by China of garlic yet the tariff that was placed was of an ineffective type that could be circumvented. As a result the U.S. producers such as Vessey in California that produced garlic for 100 years and 5 generations decided to not produce it beside cauliflower and cabbage. Of the surviving producers one producer today in California produces 100 million pounds of this product that has value way beyond the actual dollars as vital for healthy food supplies in the U.S. In fact after reports of contaminated water supplies in China imports of ginger and other such food products have been shifted away from China.  It is well known that the industrial revolution in China came too quickly and at a large cost to the environment after 1990 including contamination of the water, rivers. For this reason it is stunning that the people setting trade policy in Washington could have ignored the vital need of U.S. meeting food needs for healthy living out of its own soil and trusted farming community. To not have done so and let producers of garlic or ginger or other such vital food products to sustain health to go out of business is nothing less than a part of the growing calamity of self inflicted wounds that have happened so far. At no time more compelling an issue as today in the pandemic. The truth is that when it comes to healthy food supplies it is vitally important, as important as national security. And local supplies grown in one's own state or country particularly for vegetables, herbs, and fruit, are very critical. There is no way to even compare product grown locally to product grown in any country where water supplies may be contaminated by rapid industrial growth. ...

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Read the full speech of president Biden at an important time in the Nation's history, 76 days before a national election to decide the future of the Nation and the World. Excerpts from the speech selected by Lyrarc- "Look. Folks, how can we have the strongest economy in the world without the best infrastructure in the world? Donald Trump promised Infrastructure Week, every week for four years, and he never built a damn thing.  And now because of what Kamala and I have done—remember, we were told we couldn’t get it done? Remember, when we came into office, we couldn’t get anything passed?—but right now, we’re giving America an infrastructure decade not week. We’re modernizing our roads, our bridges, our ports, our airports, our trains, our buses, removing every lead pipe from schools and homes so every child could drink clean water. We’re providing affordable high speed internet for every American no matter where they live, unlike, not unlike what Roosevelt did with electricity. And so much more. We are uniting the country, we’re growing our economy, we’re improving our quality of life, and we’re building a better America. Because that’s who we are. How can we be the strongest nation in the world without leading the world in science and technology? After years of importing 90% of our semiconductor chips from abroad, which America invented those chips, our CHIPS and Science Act meant that private companies from around the world are now investing literally tens of billions of dollars to build new chip factories right here in America. And over that period, they’ll create tens of thousands of jobs. And many of those jobs in the so-called Fabs, the buildings that make the chips that are being constructed now. And guess what? The average salary in those fabs, size of a football field, will be over $100,000 a year, and you don’t need a college degree.  ...

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Under Mette Frederiksen immigration which reached 21,000 in 2015 was down to a little over 1000 a year. She is a strong fighter for workers and families and labor rights and yet tough on illegal immigration. She has been proven right about this as Britain and the US under Biden are seeing illegal immigration as a threat to workers and labour, are seeing the risks of distraction from illegal immigration doing a serious disservice to workers and families by making it hard to fight for workers and families on wages, cost of living and other issues.  Even with a strong record of fighting for workers and families, Frederiksen was one of the first European leaders to see the dangers of illegal immigration to society. It gave parts of the political spectrum that had no interest all along in workers and families doing well, an issue to run on that would come to cause grave harm to workers and families. This turned out to be the error of Angela Merkel a CDU leader brought up in Communist East Germany, who had no idea of the risks of her approach for open immigration. As Merkel let this chapter unfold it created fissures in Europe, with Tories and Nigel Farage taking Britain out of the EU and laying waste to its economy for 5 years till Labour's Starmer adopted a tough immigration policy and became prime minister in 2024. That danger then spread to the US in 2016 which also suffered as Republicans and Trump did the same in the US around rhetoric but without serious action on immigration till the Lankford- Biden legislation.  That bill would have closed the border with Mexico and ended immigration as an issue forever if passed into law in December 2023, as Senator Lankford says would have happened. Ending immigration as an issue forever alongside foreign wars as an issue, so that a concentrated effort could be made on improving badly damaged lives of workers and families. And on rebuilding badly damaged manufacturing in the US, rebuilding collapsing infrastructure, and competing with better education and healthcare with the large Asian countries China, Japan/ South Korea, India. ...

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The WHO, World Health Organization, comes under criticism for failing to warn about the pandemic. President Trump says the U.S. finances the WHO with $450 million but the WHO has opposed some of the basic common sense approaches to the virus such as early quarantines and suspension of flights from virus hotspots. Including opposing the U.S. action taken by president Trump on January 27, 2020 to close all passenger flights between U.S. and China. A 14 day quarantine was put into effect for Hubei province. About 8.5 million passengers visited the U.S. from China in 2018 according to the U.S.Transportation Department. Reports show Chinese cities deserted on NYT January 30, but infections only 1300 a week earlier going up to 12,000 and only 259 deaths. President Trump says the world was misled by the WHO on the extent of the crisis developing in China, as he sets up a review of the WHO's role in the crisis and on funding by the U.S. President Trump says the crisis in the U.S. would be much larger if some of the 8.5 million passengers from China arrived in U.S. cities. He also says the decision was his own intuition about what was happening with health experts not realizing the extent of the crisis as there was very little data on the crisis. Most of the experts Mr. Fauci and Dr Birx were also not aware at the time of the gravity of the crisis, and some leading epidemiologists at American universities even called it an emotional reaction. ...

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This report in WSJ looks at the unanimous vote in the House of Representatives delisting hundreds of Chinese companies trading on U.S. stock exchanges. The Holding Foreign Companies Accountable Act passed by unanimous voice vote in the House of Representatives after a similar vote in the Senate in May, and will be signed into law by president Trump. The law says foreign companies should be delisted if they fail to comply with U.S. Public Accounting Oversight Board regulatory agency's financial audits for 3 years in a row. The basis of the law is that all companies should be equally treated and required to meet U.S. regulatory standards to be listed. It also ensures safety for investors who may be defrauded of their money investing in companies that have not met such audit requirements. Wirecard in Germany and some Chinese companies have failed in the past because of lax overseas standards. This gives three years for the Chinese companies to prepare. This report also points out that the MSCI Index has 43% Chinese companies even more than before. American investors can still buy these stocks on the Hong Kong exchanges so that if fairness and investor protection should prevail American investors have to think and act along the same lines. China is also decoupling from the U.S. to some extent and pushing to have its companies listed on the Hong Kong Shanghai and  Shenzen stock exchanges. For these reasons the access to global capital is not likely to be affected by this law particularly with the behaviour of major American institutional investors. China is providing incentives to these investors even though it did not do so in the past creating another hurdle to the goal of creating a level playing field in regulatory requirements stock for all companies listed on American exchanges and safety for investors.  ...

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Biden's very conservative choices for his cabinet which one British reader of The Times calls UK One Nation type choices. Many of the cabinet members could easily have served under a Republican administration before Trump or a Democratic administration in the tradition of Harry Truman in the 1950's. No members of the cabinet belong to the Bernie Sanders wing of the Democratic Party.  A look at the Truman administration after 1950 shows John Wesley Snyder, who headed a bank in St Louis and worked for the Reconstruction Finance Corporation under Franklin Roosevelt performing a key role for integrating 8 million GI soldiers into the economy, and implementing the Marshall Plan. A similar job awaits another banking official Janet Yellen in Biden's cabinet to keep people employed during the pandemic. Xavier Becerra, currently attorney general of California, and formerly Congressman for 24 years, who endorsed "medicare for all" is the new Health Secretary. He grew up in a one room apartment with his Mexican parents. Secretary of State goes to Anthony Blinken, Dean Acheson was in this role under Truman as the Cold War surged with the Berlin crisis and the Iron Curtain in Eastern Europe. Today the challenges from Russia and China are taking the shape of a revival of tensions. George Marshall who led American forces in the war, was secretary of defense. This position is given to a soldier Gen. Lloyd Austin who led forces in the wars in the Middle East. This has the potential to deliver better results after the years when America veered off course under the administrations of Reagan, Clinton, Bush and Obama, following the Truman, Eisenhower administrations that setup the recovery after World War II. Today after the banking crisis of 2009, disastrous healthcare and infrastructure neglect in the U.S., followed by the pandemic, a recovery like the one after World War II is needed.   ...

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Juan Manuel Santos, former president of Colombia helped negotiate the peace with the FARC guerilla movement in Colombia. Here he points out the changes in South America that have led to the end of guerilla conflicts. This achievement comes after extended conflicts that affected Peru, Colombia, central American countries Nicaragua, San Salvador, Guatemala, following conflicts in Brazil and Argentina that led to the formation of military dictatorships that fought battles with guerilla movements. This goes back to the Castro movement in Cuba against the dictatorship of Batista, and the Cold War during the Krushchev days of the Soviet Union in the sixties. Much of this has ended, yet Santos draws a conclusion that the Western hemisphere is in peace that ignores the legacy of these conflicts. In many places the drug trade has simply moved to places further north, to destabilize governments in central America. The guerillas have become part of the drug trade as ways to integrate them into society have lagged behind or not worked. As a result life is difficult in central America leading to migration northward, similar to migration to Europe from war torn regions in North Africa. Mexico has continued as a key part of the drug trade affecting rural communities in places previously untouched by drugs such as New Hampshire and places in the northeastern U.S., even after a decade of war against drug trafficking gangs by Mexican president Calderon. It also destabilizes Mexican politics such as the murder of 42 students in Guerrero province for civil activism. It is also destabilizing a major democracy such as the U.S. as Donald Trump has sought support from communities devastated by drugs in the U.S., and sought support for a racist approach to politics. For these reasons the more visible conflicts of North and South America are now replaced with a less visible but no less insidious and dangerous mix in politics that has entered civil life and discourse across the region.  ...

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President Trump escalates the trade battle with China by increasing tariffs on $200 billion Chinese goods from 10% to 25%. The U.S. says China went back on its commitments in a 150 page agreement at the 11th hour or last minute, by deleting these commitments in all 7 chapters of this agreement. These are firm commitments sought by the U.S. in a number of areas of deep concern to the U.S. and the U.S. Trade Representative Mr. Lighthizer had already conveyed the determination of the U.S. to not relent on this. In the past China was seen to go back on its commitments and the U.S. side now wanted to ensure promises were kept. The U.S. concerns cover- theft of intellectual property and trade secrets, forced technology transfers, competition policy, access to financial services and currency manipulation.  The situation has been building up fro a decade with the Trump campaign honing in on this issue of China stealing U.S. jobs, and factory closures in the U.S., because of unfair trading practices. It also led to Mr. Trump's winning election campaign in the American midwestern states. With China seen as gaining an unfair technological advantage over the U.S., most recently over 5G telecom networks, the U.S. is not likely to back down. The U.S. is less dependent on trade with China. China is more dependent on the U.S. and a lot of manufacturing jobs in China are affected by the U.S. tariffs. This is why president Trump has decided to take a strong stand, including putting on tariffs on and additional $300 billion of Chinese goods.   ...

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Vice President Harris speaks at Carnegie Mellon University in Pittsburgh, Pennsylvania, about a fundamentally different economic vision for the country- one for the Middle Class and the other for the wealthiest in the country. "For Trump our economy works the best if it works for the people who own the skyscraper, not those who build the skyscrapers, those who wire them, the people who mop the floors." "I have pledged that a strong middle class will be the defining goal of my presidency. It is not about ideology, it is about common sense. It is just common sense." "Like generations before us let us be inspired by what came before us. I believe in what FDR called "bold persistent experimentation." "I believe in free and fair markets- in transparent rules of the road. To respect the rights of unions, and workers, and fair competition. And where this is violated I will hold them accountable. I believe the active partnership between the government and the private sector is the best way to unlock the opportunities in our Economy." ...

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Economist Paul Krugman points out the risks of a trade war in the tariffs announced for steel and aluminium by president Trump. Yet he accepts that he advocated stronger action on China's currency in 2009-2010 when the U.S. economy was weaker. In the past on the TPP agreement proposed by president Obama, Krugman said that it would have an insignificant impact as most of the gains on trade were already made. Here Krugman is critical of the language used by president Trump about trade wars being "easy."  This is taken out of context though as president Trump is saying that it is easy in the context of a country enjoying a $100 billion surplus with the U.S., because that country is going to have incentives to maintain a good trading relationship with the U.S. Essentially this means that the steel industry in the U.S. benefits. China also benefits as it closes many of the older steel plants that led to overproduction. This would reduce overcapacity in China's steel industry, a problem China's economic planners see as a priority. China already is making the shift to higher technology products and this process will be accelerated, as it puts less emphasis on steel and metals as it did in its earlier stage of development. As a result contrary to textbook economics this has the potential to be a win-win solution for the U.S. and China in the long run. So little was done under the Bush and Obama administrations to manage trading relationships with other countries so that the interests of small communities across the U.S. were protected from unfair trade- that Reagan administration trade expert Robert Lighthizer took up the cause of the U.S.,workers in these communities. Surveys showed U.S. public opinion also had shifted among educated, professionals and middle class on this issue by 2015, against unfair trade that hurt U.S. interests. Robert Lighthizer is now the Trade Representative for the U.S. in the Trump administration. Reports in the WSJ about the discussion within the Trump economic council, show Gary Cohn favored not imposing the tariffs on steel and aluminum. Lighthizer advocated the tariffs and was able to convince the president.  For Trump this presents a win-win situation, as a mild response by China -and other trading nations that have enjoyed a favorable situation in the past -with its huge surplus and favorable trading relationship with the U.S. would present a win for the president. Economist Krugman accepts this when he says tariffs in the current context of the trading field- that is more favorable to other countries- are not such a big deal, only the use of such policy that is likely to endanger world trade.  As in much of the debate that takes place this adds to the headlines today yet provides delayed and limited relief to communities across the U.S. devastated by world trade as documented by experts who studied trade patterns and their effect on regions across the U.S.  As the WSJ points out in one report the trade deficit itself may continue to grow under president Trump because of other factors. The U.S. dollar surged 8% during the last 2 years of the Obama administration with the economic recovery underway. With Trump's election win the dollar surged another 3%. This may play a bigger role in the direction of the trade deficit than the new steel tariffs announced by president Trump. Workers and unions matter. As TPP pushed by Democratic party president Obama was opposed by the unions, and by the auto industry (workers and auto companies) in the midwestern states which suffered a hollowing out in the last decade. A WSJ survey after the election showed Clinton received 56% support from union workers in 2018 compared to 65% for president Obama in the 2012 election. Some of that erosion in support may come from Obama's TPP stand fervently opposed by the unions and workers in the auto industry. A similar situation took place in Ontario with hollowing out of the auto industry in this large industrial state in Canada and led to the rejection of the Conservative government and election of the Liberal Party under Justin Trudeau. This lesson is so far lost in the Democratic Party's debate.     ...