DEMAND IS KING: What Trump Has Right About Trade

July 2, 2018

Trump understands what establishment policymakers don’t know or don’t want you to know. When it comes to trade; nations rich with consumer demand hold the real leverage.

A broad-based middle-class prosperity is only possible in societies where demand is balanced with the supplied labor. In human history, this balance between demand and the labor supply is only being achieved in a few nations and for short spans of time. Despite our deep-seated belief, that America has always been and always will be a middle-class society. A broad-based middle-class has only existed in the US for the three Decades after World War II.

The notion of a broad-based middle-class prosperity is the exception, not the rule, and many Americans feel it slipping away Their concern is justified because nothing can throw the delicate balance between consumer demand and labor supply out of whack faster than international trade. The world is awash with potential labor yet there is a finite supply of consumer demand.

President Obama has said that income inequality is the biggest issue facing our nation. He is right.  Even as the reason he puts forward for the causes of income inequality are muddled and that he seems to accept the notion that income inequality is caused by global market forces beyond the control of policymakers. Free trade is not inevitable, it is a conscious policy decision that has a real impact on working families.

Obama’s insistence on pursuing the TPP trade deal in the run-up to the 2016 election speaks volumes about his misreading of the electorate and his misunderstanding of the fundamental causes of income inequality. Despite promises from candidate Obama, the Obama administration never intended to renegotiate NAFTA.

There is no light between Obama, Hillary Clinton, the House, and Senate leadership of the Democratic Party and establishment Republicans on trade.  This is one reason Hillary Clinton lost the election. The genius of Donald Trump in the 2016 election was his understanding that the sense of angst in the Midwest great lakes electorate was in large part about how the US, a developed prosperous nation can integrate its economy with a world awash with excess labor.

The answer is that you can not integrate the economies of a rich nation with an impoverished developing nation without massive transfers of wealth. Any free trade agreement between the US and, say, Vietnam will devolve into wage arbitrage. But it’s not only wages; Vietnam businesses have a host of price advantages. The US private sector supports all matter of government and private spending. The US military and health care spending alone put US producers at a huge disadvantage with developing-nation trading partners. Even a service as basic as indoor plumbing has a cost that is passed along in the products we produce, so the question becomes how do you compete with countries that don’t provide even the most basic private and governmental services?

The US and a few other countries have something that is absent in the developing world, it is the very reason why they are impoverished.  We have consumer demand. Successful Nations of the future will find ways to match demand with a population desperate for gainful employment even if that means siphoning off demand by being low-cost producers from consumer nations. The idea that the United States or any developed nation can allow huge chunks of consumer demand to be absorbed by developing nations and maintain a current level of their own prosperity is a con job. As powerful as the American consumer is, we can’t be the employer to the world – the numbers just don’t work. Free trade does not grow the world economy fast enough to maintain the value of labor.

Denying access to imports is not the answer. The real issue is not how much a nation trades, it is the balance of trade that determines the transfer of wealth. A trade policy without reciprocity will continue to drain our economy of its vitality.

“Free Traders” insist that trade deficits are not a problem. So how do you explain the rise of China? China’s double-digit growth rate, budget surplus even as it expands it’s government (military) spending. China’s go-go economy is a direct result of a positive balance of trade. Trade does grow the world economy but not enough to make up the transfer of wealth from the US into China.

Proponents of free trade put forward the figure that in 2015, 5,967 jobs were linked to every billion dollars of exports. But wouldn’t the inverse also be true? For every billion dollars worth of imports, a similar amount of US jobs are lost.  What’s critical in this discussion that “Free Traders” never address is what is the net effect of our trade policies on the maintenance of wages and jobs growth in the US? There’s also no discussion of the devastating effects on workers incomes when companies use the potential to offshore jobs as leverage in labor negotiations.

Is a lot of money to be made by sourcing goods in low-cost, weak currency nations and selling them into developed nations with a higher standard of living and stronger currencies?  But do not blame China, they do not have the power to dictate US trade policy. Despite the fear-mongering about trade wars and China owning our T-bills, we have a donor-class trade policy set up to benefit multinational corporations. All the elitist rhetoric you will hear as President Trump tries to address the imbalance the US/world trading is designed to maintain the status quo.

Countries that understand consumer demand and jobs is a feedback loop that creates prosperity will be successful in the 21st century. If the US allows it’s consumer demand to be drained off for the short term benefit of multinational corporations in unsustainable trading relationships we will struggle to maintain a middle class and fail to have a stronger private economy with the resource to support their own infrastructure and institutions.

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Needless Regulation Is Killing Wind Power In OHIO

August 1, 2017

Three years ago the Ohio legislature passed a needless, onerous, burdensome regulation that denied rural property owner’s real economic opportunity.  This regulation stymies an industry that would bring 4 billion dollars of investment, hundreds of good paying high tech jobs and millions of dollars in income for rural landowners, as well as millions more in desperately needed tax revenue for rural Ohio communities and schools.

I am, of course, talking about the increased government restrictions on the siting of wind turbines.  There are professional anti-wind activists with questionable ties to powerful special interests that feel threatened by wind power in Ohio.  I urge you not to fall for the disinformation of the people and industries whose profit would be adversely affected by the presence of wind power in Ohio.  If we are serious about economic development and energy independence, then we must admit there is plenty of room in the market and in the electrical power grid for locally generated wind energy.

Wind power is safe, clean and highly cost effective.  It should be part of the electrical generation mix in Ohio.

But the real issue is not the merits of wind power. The real issue is property rights.  Who will decide how rural landowners can use their private properties to earn a living for themselves and their families for generations to come?

Join those of us in Ohio working to fight against powerful outside interest groups that would rob rural Ohio landowners of their rights.  If you support wind power; stand up for the rights of landowners.  If you are a rural landowner; ask yourself who should decide the future use of your property – special interest groups or you, the owner. Please contact your local legislators to urge them to return the property rights of rural landowners.


Representing One Side of the Labor Market

November 24, 2015

Mr. Tony Iriti – Economic Development Director for the Hancock County Alliance –  made a request for local government’s help to offset a local “Worker Shortage”.   I found this interesting on many levels.

I understand many in business feel that if government would only get out of way the economy would thrive.  In this case at least, Mr. Iriti is asking for a government solution and government funds to resolve a market problem.

This brings me to the function of a market.  Mr. Iriti seems to be representing only one side on the market.  Mr. Iriti fails to understand or acknowledge that when it is harder for companies to find workers that means on the other side of the equation workers are finding jobs more easily.

Whenever a business makes the statement that it is unable to find workers, in my mind , I always add the phrase “at the wages, benefits and worker conditions that I am providing.”

As a labor market  tightens, workers have more choice where to sell their labor. If the market forces business to raise wages and benefits to attract a workforce than this is a good thing.  Maybe the market is finally addressing the gross income inequality that this nation is facing.

As wages for low income workers rise they will become less dependent on government programs; like food stamps.  That is good for the whole community.

Our ultimate goal in managing our local economy should not be growth; it should be promoting broad-base middle-class prosperity.

If a business is having issues finding workers then they need to look at what they are offering in the market place.  To business I say; get out there and compete.  Have faith in the market, let the market work.


Ohio’s Issue 3: Time to End the War on Pot

October 30, 2015

The very definition of fairness is to treat like things in a like manner.   Yet many of our local politicians and the Courier Editorial Board would lump marijuana together with heroin; even as every objective standard would say that marijuana is far more like alcohol.

Simply take every objection to legalizing marijuana and replace the word alcohol and you will see that it is obvious that the opponents of issue 3 favor prohibition.

Prohibition of alcohol did not work.  Prohibition of marijuana is not working and will not work.  The cost of enforcement to the tax payer, the cost to our economy by locking up young people who should be starting their working life as productive members of society, is too high.

You can make a strong case that marijuana is less costly to society and less harmful to individuals than alcohol.  Yet alcohol is perfectly legal and can be purchased at numerous locations throughout our city. The State of Ohio holds a monopoly on the sale of hard alcohol.  We promote and even celebrate the consumption of alcohol while we wage a pointless and costly war on marijuana.

Hypocrisy and bias of our laws regarding the use alcohol and marijuana is not lost on millions of Ohioans.  It is symptomatic of an elite who have completely lost touch with the realities of day to day life.  They have put their personal bias for their drug of choice over the choice of their constituents.  They are so committed to this bias, devoid of any rational justification, that they are willing to arrest and imprison thousands of their own constituents.

Issue 3 may not be the perfect answer, but don’t be fooled by our State Rep. Sprague and State Sen. Hite; they will never support the legalization of marijuana.  Issue 3 is our best hope to bring fairness to our criminal justice system.

This issue is about personal freedom and smaller, less intrusive government.

This pointless and costly war has gone on too long.

You can bring it to an end. I urge you to vote no on issue 2 and yes for issue 3.


Ohio Loses Political Power to Illegal Aliens

January 19, 2013

Ohio has lost a congressional seat and an Electoral College Vote (ECV) to a state with a large population of illegal aliens.  This shift in power is a consequence of our current understanding of the Article I Section 2 and the 14th Amendment of the United States Constitution.  Under our current interpretation of the law, illegal aliens are counted for the purposes of apportionment.

If illegal aliens were not counted in last apportionment, Ohio would have lost only one congressional seat, not two.  Ohio is not the only state affected.  Based on an analysis done by Clark Bensen for his company Polidata the following states lost one congressional seat and one ECV from the inclusion of illegal aliens in the apportionment process: Iowa, Indiana, Louisiana, Missouri, Montana, North Carolina, Ohio, Oklahoma, and Pennsylvania.  The big winner in this apportionment shift is California which picks up 5 seats and 5 ECV.  Texas gains 2 seats and 2 ECV. Florida and New York both gain one congressional seat and one ECV.

Chirs Weigant, in an article published by the Huffington Post, makes the point that in terms of the ratio of “persons” to House seats; counting illegal aliens does not really have much effect on your numerical relationship to your elected representatives.  When you talk about a number of approximately one House Representatives per 650,000 “persons” (in most states), the change in this ratio caused by counting illegal aliens say of 25,000 more “persons” per House seat, it is hard to imagine a measurable decline in any single voter’s political power.

But saying that political power is not a function of the ratio of the represented to representative does not prove that political power is not being affected by counting illegal aliens.  If political power is a function of alliances, based on regional, party affiliations and state delegations, than it is easy to see how counting illegal aliens does affect the balance of political power in the United States.  House seats and ECV have been shifted to solidly blue states of New York and California.  Florida enhances its power as an important swing state, while Ohio, another important swing state, has becomes, if only slightly, less important.

This shift of power caused by the counting of illegal aliens is hard to gauge and may even be inconsequential with regard to many of the issues facing our country, but on one issue; immigration the political effect is undeniable.  As house seats and ECV are being shifted to states with large illegal alien populations, it follows that political power is being shifted to states more politically sympathetic to the plight of illegal aliens.  This obvious fact gives illegal aliens some real measure of political power over the laws they are currently violating.

You might say that even in the case of California, which has 5 seats that are directly attributed to a constituency made up of an illegal alien population, that this is not a significant number of votes in a house with 435 members.  But because of the political and vague nature of reapportionment, there is a multiplier effect that needs to be considered.  If apportionment excludes illegal aliens or if a significant number of illegal aliens are persuaded to leave the state of California before that last census, it would set off a round of house district of musical-chairs in which any member of the California house delegation could find themselves without a home district and without a seat in the US House of Representatives. So, in a very real sense, illegal aliens in California are an important constituency for every house member of the California delegation.  It should also not be forgotten that the distribution of federal dollars is based on census data and apportionment.

Without getting to the tortured history of how the constitution has handled citizenship, apportionment and voter rights, I find it hard to believe that the framers of the constitution or the purveyors of the 14th Amendment could have anticipated the current large scale and wholesale disregard of our immigration law by foreign nationals residing in the United States.  I find it hard to believe that these law makers would have approved of any legal framework by which a constituency of illegal aliens residing in the US – in direct violation of our immigration laws -, would have any measure of political power to effect those same immigration laws.

The failure of our current political class to make any serious effort to address a legal framework that takes political power away from United States citizens in Ohio and hands it over to the foreign nationals present in the US, in violation of our immigration laws, is an example of the breakdown in the integrity of our political and democratic institutions.

See Chis Weigant post “Should The Census Count Illegal Immigrants”: http://www.huffingtonpost.com/chris-weigant/should-the-census-count-i_b_66897.html

See Clark Benses of Polidate Map of Congressional Districts without the incursion illegal aliens for the purposes of apportionment: http://www.polidata.org/comments/el06%5CSTCIT3CA.pdf


Latta, Come On, Name That Regulation

August 14, 2012

Despite the constant din of complaining from the GOP about how regulations are destroying our country, Rep. Latta comes up short on specifics.  There is a reason why Rep. Latta hides behind a nebulous cloud of generalities.  The word regulation has a negative connotation; no one likes rules.  But let’s be adult for a minute, rules are for our protection.  So until Latta names the regulations and how they unfairly harm business, he may think he is winning the argument, but it is really just childish whining.

So to Rep. Latta I say – “put up or shut up”.  Mindless rhetoric isn’t helping anyone.  All laws are a form of regulation.  What makes a good congressperson is the quality of the laws that he/she supports and passes. “REGULATIONS ARE BAD” is not sound public policy.  If this is the level of reasoning that we can expect from Rep. Latta in Washington, then I say we need a change.

Vote Angela Zimmann for Ohio’s Fifth District!  http://zimmannforcongress.com/

See Rep. Latta’s comments here: http://www.thecourier.com/Issues/2012/Aug/14/ar_news_081412_story2.asp?d=081412_story2,2012,Aug,14&c=n


Ever The Findlay Courier Wary Of Sprague Amendment

May 25, 2012

Even The Findlay Courier is “wary” of the Constitutional amendment put forward by Ohio State Rep. Robert Cole Sprague.  In an editorial appearing on May 16th, the Courier rejected Rep. Sprague’s support for the “National Debt Relief Amendment” saying in part “Requiring 50 legislatures to enter discussions on the federal budget would only make a bad situation worse”. Rep. Sprague, when The Courier takes sides against a Republican office holder it is time to wake up, smell the coffee and reconsider your support for this ill-advised idea.

Read the whole Courier Editorial here: http://www.thecourier.com/opinion/editoral/2012/May/16/ar_ed_051612.asp?d=051612,2012,May,16&c=e_0


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