Why Immigration is a Necessity for the US, and reducing it is not an option

This week’s lengthy essay gets back to the origins of this blog site: the problems created by unbalanced population growth across the world’s regions.  This essay will be published in Spanish in La Vangardia in June; please do not quote without permission.

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Imagine that there is a natural resource that is essential for future economic growth; indeed it is probably THE key resource for economic growth in the twenty-first century.  Now imagine that Western nations and their allies, including Japan and South Korea, are all running out of this resource, with stocks going down and existing supplies getting older and degrading.   Looking abroad, there are plentiful supplies of this resource as raw material.  But it is low quality, like high-sulfur, heavy oil sands, and so requires substantial investment in order to become usable to fuel economic growth.

A rational policy would be to invest in infrastructure to refine the plentiful stocks of raw material abroad, and then build facilities to import the refined product to fuel new growth.  Or, Western nations might choose to import the raw material, and refine it on their own territory for productive use.

A totally irrational and self-destructive policy would be to block imports of the raw material, while not investing in the necessary infrastructure to refine the needed product abroad.  This would guarantee that Western economies would lack the key resource they need for growth, making the burden of providing medical care and pensions for their fast-growing elderly populations even more difficult to meet.

Now let us add the problem that this valuable raw material, while essential for future growth, is also unstable in its raw form.  Indeed, if too much of the raw material is allowed to build up under certain conditions, it is combustible and risks exploding.  The best way to avert this outcome is to refine the raw material into economically useful forms, or remove some of it and export it to other countries.   Clearly, this further problem makes the second policy – of blocking imports to Western countries and reducing investment in refining the product in place – even more destructive.

As some readers will have guessed, the resource I am talking about is not oil, nor solar power, nor uranium – even though all of these have some of the characteristics noted above.  Rather, the resource I am discussing is people, in particular young people aged 15-24.

Young people in this age group are the key workers, innovators, and dynamic consumers of the future.  Their productivity will determine the future wealth of nations – in countries where this cohort of young people is larger and more productive than the workers they replace, economies will grow.  However, where young workers are no more numerous or productive than the workers they replace, economies will stagnate.

Where are the world’s youth?

In the mid-1950s, the developed world held roughly 30% of the world’s youth aged 15-24.[1]   That number was also growing strongly, from 140 million in 1955 to 180 million by 1980.   But from 1980 onwards, the number of young people in the more developed countries started to decline, falling back to 146 million in 2015.

Meanwhile, the number of young people in the less developed regions was exploding.  There, the 15-24 age group rose from 323 million in 1950 to just over 1 billion in 2015, a gain of over 700 million, or over 220%.

Most of this increase in the late 20th century occurred in Asia.  Yet growth in the size of the youth cohort in Asia has ended.  For Asia as a whole, the number of young people aged 15-24 declined by almost ten percent after 2010.   This change in direction was led by China, where the “one child” policy combined with rapid urbanization, more education for women, and higher incomes to produce a stunning drop in the number of youth aged 15-24: from a peak of 252 million in 1990 to just 182 million in 2015.   China is not alone: fertility has plunged across East Asia, and is also falling in many parts of South and Southeast Asia.

All developed nations have shared in this trend.  For Europe as a whole (including Russia), the 15-24 youth cohort has declined from its peak of 113 million in 1980 to 82 million in 2015.  Japan’s youth decline began earlier, with a peak in 1970; and the decline in Japan’s youth cohort has been sharper than anywhere else, falling by forty percent between 1970 and 2015.

The United States is a fortunate outlier among Western nations, as its youth cohort is still growing.  But the rate of that growth has slowed to a crawl.  Where the U.S. youth cohort increased by 82% from 1950 to 1980, in the next thirty years to 2010, the youth cohort increased in size by only 2.6%.  That is much better than the 40% decline in youth cohorts suffered by Japan, or the nearly 30% decline in Europe.  But even in the U.S., the growth of the youth cohort essentially ended over thirty years ago.

Thus the countries that have led the global economy in the last fifty years, and which enjoyed growing youth populations up to the 1980s or 1990s, have all experienced a sharp slow-down or reversal of this growth. From 2015 to 2050, the 15-24 age youth cohort will remain approximately stable in the United States, while declining in all other parts of the world – except for Africa.

In sub-Saharan Africa, despite economic growth, fertility has remained “stuck” at the relatively high level of four to five children per woman.  The result is a continuing expansion of the young population on the African continent.   By 2050, Africa’s 15-24 aged population will double from the current 230 million to 461 million.

To be sure, Asia still includes some countries with high fertility and growing youth cohorts: Afghanistan, Yemen, Iraq, Palestine, and Pakistan.  But almost all the net growth in young people in the world between 2015 and 2050 will occur in Africa.  If young people were oil, sub-Saharan Africa would be the Persian Gulf.

The Demographic mismatch:  Countries without workers, and workers without jobs

Contemplating a future driven by robots and artificial intelligence, some may think that there is no point worrying about the future labor needs of advanced economies.  That may be true for some jobs, such as taxi drivers, production line workers, and cashiers.  Yet skilled workers – whether with craft skills in carpentry, masonry, and the like; with advanced technical skills such as writing computer code or welding complex alloys; with human skills such as caring for the elderly, troubled youth, children, and those with disabilities; or with creative skills in the arts, literature, and basic science; and the professions of law, medicine, teaching, and religious ministries – will remain essential to the growth and functioning of economies around the world.

A major driver of job growth will be the need to provide specialized transport, housing, support services, and health care for the elderly.  Lifespans have been steadily growing longer, but with longer lifespans comes an accumulation of problems that need health care: fading eyesight and hearing; less mobility and more broken bones; high blood pressure, diabetes, and other ills; worn-out joints and clouded corneas.  Many will require nursing home and rehabilitative care.  Globally the population over 70 years of age will skyrocket in the coming decades.  Their numbers will rise from 395 million worldwide in 2015 to 1.1 billion by 2050.

Where will workers with the diverse skills needed by advanced economies be found?   Skilled workers are produced from a raw material – young people – who are “mined and refined” by being directed into education and training programs that equip them with marketable skills.  To be sure, older workers can also be retrained, and indeed lifelong education and training to keep pace with change is now the “new normal.”   But if we look to the future, it will not be possible to take those who are 45 years old today and train them to be cutting edge workers when they are 80 years old in 2050.   Rather, ALL those who are going to be valuable workers with current skills in 2050 are people who are 25 years or younger today or who will be born in the next fifteen years.

By 2050, only 10% of that valuable resource will naturally arise in Europe and the United States.  In the coming decades, stocks will be shrinking in most of Asia and Latin America, but growing rapidly in Africa.  If this were any other resource essential for growth, such as natural gas or lithium, companies would be racing to invest in facilities to import it, and to refine it to render it productive.  Yet with supplies of labor, the rich nations are doing the exact opposite.   They are finding ways to halt immigration, especially from Asia and Africa, and investing minimal amounts in training future workers from those regions.

This is because of widespread hostility to immigration.  This is despite the fact that labor from far-away places is the easiest way to fill local needs, especially for jobs in agriculture, tourism, nursing, elderly care, and engineering that local workers are not willing or not trained to do.  Most young people in developed countries would rather not have to pick vegetables or solve differential equations.  Developed countries thus rely on foreign workers to fill these roles.  As the size of youth cohorts stagnates or declines in developed countries, more foreign workers will be needed, not less.

Hostility to immigration has both economic and cultural roots.  In both cases, anxieties are raised mainly by unskilled foreign workers.  While high-skilled immigrants generally add to, rather than compete with, native workers and bring widespread economic benefits, unskilled foreigners are seen as being directly in competition with, and displacing, native workers.  Even more significant are cultural anxieties that unskilled foreigners will not fit in and adapt to the host society.  Rather, it is feared that they will rely on welfare payments, will not learn the local language and culture, will create enclaves living under foreign laws and customs, and commit crimes.  These fears lead countries to sharply limit immigration, to create especially high barriers to immigrants from regions seen as more “foreign” or dangerous, and to create strong preferences for skilled as opposed to unskilled migrants.

To be sure, importing unrefined raw material – that is, immigrants without skills – has risks.  It is vital that immigrants, like any raw material, get the “refining” they need to become productive.  Basic language skills, knowledge of the laws and customs of their host country, and job skills need to be acquired.  Today, most Western countries do not have an immigration problem; they have an integration problem – that is, they need to work harder to ensure that existing and future immigrants will be productive contributors to national welfare.

The effort is worthwhile because the gains from having productive immigrants are enormous.  Even unskilled immigrants, and more often their children, have surprising talents that benefit their host countries.  Almost one-half of the companies in America’s Fortune 500 today were founded by immigrants or their children.[2]  Eight U.S presidents had at least one immigrant parent, including both Barack Obama and Donald J. Trump.

In contrast, consider the plight of Hungary, whose leader Viktor Orban recently said he wants a country where all jobs are filled by Hungarians, from the cleaning lady to the president of the Hungarian National Academy.[3]  Today, one in six Hungarians is over 65; by 2050 that will rise to more than one in four.  At mid-century, the number of Hungarians over 65 will be three times as large as the number of young people aged 15-24.  Good luck filling the jobs in a modern, high-tech economy with that population!   Orban’s pursuit of ethnic homogeneity will doom Hungary’s population to a future where its economy is unable to compete, and unable to grow.

Even if rich Western countries do not want immigrants from Africa, however, they will have to deal with large numbers of young Africans seeking to cross their borders.  The huge growth in youth cohorts in sub-Saharan African alone will create hundreds of millions of new job-seekers.  Especially if they are not trained to acquire valuable skills, they will have difficulty finding jobs in their home countries, and be driven to search for work abroad.

In the rapidly aging societies of Western countries with shrinking youth cohorts, the demand for workers trained in the latest skill set will be huge.  But the shortage of such workers locally will crimp growth unless skilled workers can be brought in from abroad or be brought in as youth and trained locally.  In African countries with huge youth cohorts, the opposite problem, a shortage of jobs for workers, will lead to great pressures for ambitious workers to migrate.  The key problem of the next half-century will be the mismatch between the richer countries that need workers, and the developing countries where workers need jobs.  The solution to this problem lies in providing workers with the skills they need to do productive work, and facilitating their orderly movement and integration to places where their skills are needed.   Yet at present, the great majority of workers in youth-rich countries are not getting the education and training they need to be productive workers either at home or abroad.

Treating Youth as a Resource:  Investment in Education, Training, and Social Order

Western development agencies have invested in education in developing countries.  Yet they have prioritized elementary school enrollment above all else.  The result is that the statistics on elementary school enrollment for most African countries and south Asian countries are fine, with large majorities of elementary school age children being enrolled.  But the quality of education is often lacking.[4]   Moreover, while elementary education is the foundation for future training and education, it is no longer sufficient by itself to provide marketable skills.

Acquiring those skills requires apprenticeships, vocational education, or secondary and higher education.  Yet this crucial stage of post-elementary education has not been well supported in Africa.  In many African countries, total enrollment in secondary school reaches less than half the population – in Uganda, with its population of over 40 million, 72% of all secondary school age students are not in school.  In rural areas of Africa, typically 70% of youth have never attended secondary school.  Vocational training is even less attainable – only six percent of total secondary enrollment in Africa is at vocational schools.[5]

The results of this failure to “refine” the skills of young people in Africa are threefold.   First, young girls, who even if they finish elementary school rarely can attend secondary school, end their schooling at age 12.  This leaves them open for early marriage at age 17 or younger, which promotes high fertility and perpetuates the cycle of fast-rising population, shortages of teachers and school places, and uneducated young women marrying early.  Second, a youth cohort with no secondary or vocational education is not equipped to be welcomed and provide needed skilled labor in countries to which they would seek to migrate.  This perpetuates anxieties in immigrant-receiving countries about immigrants being low-skilled and hard to assimilate, raising resistance to needed migration.  Third, a youth cohort without adequate skill training finds it difficult to obtain rewarding work and to build up higher productivity and the formal sector in their own countries.  High youth unemployment and lack of career opportunities leaves young people open to mobilization by militias and extreme ideological movements.  As I write this, riots are taking place in northern Morocco, where youth unemployment is 40%; and militias are forming all across the vast Democratic Republic of Congo, portending a resumption of the violence of the 1990s.

If current trends continue, with Western nations working to block migration, and African nations not providing sufficient skills to their young, the world as a whole will suffer.  The rich nations will have grave difficulties in finding sufficient skilled workers to grow their economies.  At the same time, waves of migrants from the huge and fast growing youth cohorts of Africa and Asia will seek to enter Europe and America to find jobs.  But their lack of skills will provoke increased resentments and likely heighten the populist ethno-nationalism that has gripped the developed countries, and provided support for more authoritarian and nationalist governments to ward off the immigrant threat.  Finally, the surplus of young men without jobs in Africa and South-central Asia will likely produce increased violence and civil conflict in these regions.  This violence will further derail economic progress, and create waves of refugees that will put added pressure on local governments and on migration target countries from those seeking to escape the conflicts.

By contrast, if conditions somehow could be changed to develop an orderly flow of skilled and well-trained migrants from poorer to richer countries, everyone would benefit.  Such migration would serve as a safety valve for the vast youth populations in poorer regions, while meeting labor needs in aging rich ones.  A more skilled workforce in developing countries would facilitate development and reduce fertility, breaking the cycle of ever larger youth cohorts.  And fears of unexpected waves of unskilled and dangerous immigrants would cease to roil the domestic politics of Western nations.

Is such a change possible?  Yes – if governments and private donors treat young people as a valuable resource that needs to be cultivated.  The primary focus should be on helping countries with large youth cohorts provide secondary and vocational training.  Some of the effort needs to be in providing teachers, including recruiting retired teachers from the West for this new challenge. Some of the effort needs to be in providing physical facilities, including vocational shops and high schools equipped with up-to-date laboratories and textbooks.  Some of the effort should be in encouraging more foreign students to enroll in Western vocational schools and universities, especially those training secondary school teachers to return to their home countries to teach.

No doubt this sounds fanciful.  But the stakes are nothing less than global peace and prosperity.  The successes achieved in the West of educating and employing women and extending life spans have created aging societies with shrinking youth cohorts.  The successes achieved in low-income countries of increasing child survival and providing basic diets and health care have produced burgeoning numbers of young people.  In both cases, policies achieved their goals and produced success.  But those successes have created, and will continue to worsen, a huge imbalance between the richer and poorer regions.  The richer regions now face a future without sufficient workers and the poorer regions a future without sufficient jobs.

The only way out of this dilemma is through programs to provide valuable skills to young people and facilitate their migration to countries that need skilled workers.  We must find a way; otherwise the prospect is for increasing economic strain and fading of open, inclusive democracies in the West, a sharp slowdown of growth and economic setbacks in East Asia, and fresh waves of violence and refugees in Africa.  In other words, the prosperity that had been hard won at the end of the twentieth century could become completely undone in the twenty-first.

Jack A. Goldstone, Schar School of Policy and Government, George Mason University

 

[1] All data are from the United Nations, World Population Prospects: The 2017 Revision. https://esa.un.org/unpd/wpp/

[2] https://www.brookings.edu/blog/the-avenue/2017/12/04/almost-half-of-fortune-500-companies-were-founded-by-american-immigrants-or-their-children/

[3] http://hungarianspectrum.org/2017/03/01/viktor-orbans-ethnically-homogeneous-hungary/

[4] https://www.cgdev.org/doc/full_text/CGDReports/3120290/schooling-is-not-education.html

[5]All data in this paragraph from http://www.aaionline.org/wp-content/uploads/2015/09/AAI-SOE-report-2015-final.pdf

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The GOP Tax Cut: A Wrong-way turn?

Donald Trump and the GOP’s greatest victory has been their tax cut, aimed mainly at corporations and the rich, but promising to boost the entire economy.

Yet this is increasingly looking like an own goal — and not just because of the optics of how the law favors the wealthy.  Rather, errors in the conception and implementation of this tax cut may be bringing the economy to a halt, rather than creating the desired boost.

70% of US economy activity is provided by consumer spending.  The rest is government spending and investment.  Government spending will go up slightly, but mostly for military procurement.  The tax cut to the rich and corporations was supposed to go into investment spending, but in fact — as was predicted — the greatest part of the corporate tax gains are going into stock buy-backs and increased dividends.  The rich stockholders, executives and investors who benefit the most from all this are not big consumer spenders.  There are too few of them, and while they will spend some of their gains, much goes into overseas travel and property and imported luxury goods, while the rest goes into savings.  The vast majority of Americans, whose spending needs to grow by 3-4% to give the economy a real boost, are getting too little in direct tax cut benefits to raise their spending that much.  And with unions having been destroyed by decades of anti-union policies, workers have no way to pressure companies to direct a larger share of corporate tax benefits to workers’ salaries.

Now, let us put the minimal spending boost created by the tax cut against the headwinds that the economy faces, some created by the GOP tax bill.  First, the demographics are negative for growth.  More and more baby-boomers are retiring, reducing their spending.  Millennials, though a large cohort, are not enthusiastic spenders.  They acquire fewer cars and acquire them later; are buying homes later and instead favoring urban apartments.  Those among them with the best earning potential, namely college graduates, are typically burdened with large college loans.  And they are not (yet) having children — American fertility has fallen to an all-time low, while thanks to Trump policies, immigration has fallen as well. So the basic growth in demand that comes from family formation and population growth is absent.

Second, the tax cut bill imposes the most pain on the most vigorous consumers.  These are households with incomes from $100,000 to $400,000 per year.  Those with smaller incomes are just getting by and, even if optimistic, cannot easily boost their discretionary spending.  It is the higher income group that is most likely to increase its target level of spending in response to rising optimism about their economic prospects.  Yet it is precisely this group that was most hurt by certain provisions of the GOP tax bill, namely the limits on deductions of home mortgage interest and of state and local property and income taxes.  Consumers in this income bracket are likely to either cut back spending or hold fast until they learn how these changes affect them.  For most it will be obvious that their taxes will be higher, not lower, given the loss of these deductions.

Third, the rush to deliver the tax bill before Christmas means that the over 600 page bill was stuffed with errors and provisions with unforeseen consequences.  Many of these errors actually hurt certain industries by changing depreciation schedules and other accounting rules, while others open huge loopholes that will reduce anticipated government tax revenues.  Republicans will need Democratic help to fix the glitches and errors in the law, but Democrats are unlikely to cooperate.  Given that Republicans refused to help Democrats make improvements and fixes to Obamacare after it was passed, Democrats will probably just let these errors fester, and leave Republicans to deal with the consequences of what they have wrought.

Fourth, the fact that the tax bill will boost the government deficit by $1.5 trillion is already driving interest rates up.  This will damp down interest-sensitive sectors such as homes, cars, and construction, and even the discretionary spending that used to be financed by once-deductible (but no longer) home equity loans.  Indeed, given the change in deduction rules and rising interest rates, a home equity line of credit loan that would have had an after-tax interest rate of about 2% per year for a high-income homeowner in 2015 now has an after tax interest rate of 5% per year.

Fifth, and perhaps most important, we are late in the business cycle.  Unemployment has been at record low levels for almost a year.  The recovery from the Great Recession is a decade old, meaning that most people who wanted new cars or new homes have already acquired them.  There is neither pent-up demand from past recession-crimped spending nor from new population growth.  In many areas, the past momentum of housing construction has shot past new demand (in my local area of Reston, apartments are offering discounts of several months free rent on new leases).

The late point in the business cycle also means that we are sitting on years of steady stock-market gains that now may have come to an end.  When the market was shooting upwards, consumers could anticipate future gains and plan to increase their future spending accordingly.  But it is now possible that because of rising interest rates and high valuations, the rapid rise in equity prices is over.  Indeed, since February, the stock market has peaked and stagnated.  If it does not resume its upward climb, much discretionary income will go back into saving rather than consumption.

Some of these headwinds — demographic conditions and the timing of the business cycle — have nothing to do with the GOP tax law.   But other negatives — the limited deductions on state/local taxes and mortgages, the errors in the new law, and the rise in interest rates — are directly due to how the GOP wrote and passed their tax bill.  The combination of these factors, with business cycle and demographic dampers exacerbated by the effects of the new tax law, could drive consumer spending to a halt.  Ironically, far from achieving its goal of boosting growth to new highs, the GOP tax law could drop US economic growth well below 2% per year.  If one adds the impact of uncertainty and penalties over tariffs and a possible trade war, the economy could even spin into reverse.

GOP enthusiasts are fond of saying that the data on the economy have never been better.  Jobs are plentiful, people are entering the labor force, consumer confidence is at all-time highs, as is the stock market.  What could go wrong?

The problem is obvious — all these “feel good” factors are NOT translating into increases in wages or in spending.  For every baby-boomer who retires from a high salary position and is replaced by a millennial at half their salary, spending goes down.  Confidence may be rising among consumers, but until they receive substantially higher wages, they can’t act on it.  Most consumers are not getting significant wage increases, while the consumers most crucial for discretionary spending are being hurt by the tax law, not helped.

The data are already showing these effects.  For the first time since 2012, retail spending has fallen for three consecutive months.  Spending on cars and furniture and electronics all went down.

Far from bursting with energy, the consumer economy — and hence the economy as a whole — is teetering on the edge.  Any major new blow: a trade war, a political crisis, a stock-market correction, could send consumers into a deep freeze and trigger a recession.   The GOP tax law may have achieved its primary goal, which was to shower benefits on wealthy GOP supporters.  But far from providing a broad boost to economic growth, it has stacked the odds higher against US consumers.   The GOP may yet regret this legislative success.

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Do Appearances Matter for Democracy to Survive?

The United States has the most durable, longest-lived democratic constitution in the world.  It has withstood the Civil War, two World Wars, the Great Depression, the Great Recession, two presidents’ impeachments, and one president’s resignation.  Why then should anyone worry that American democracy could be threatened by the antics of an entertaining, oft-comical, reality-TV star turned President?

The answer lies in a deeper understanding of democracy than we usually follow.  We generally put our faith in the U.S. Constitution—a marvel of political theory made practical. It has been fine-tuned with a couple of dozen amendments, but otherwise held steadfast for two hundred and thirty years.  To this day, all federal officials and military officers take an oath to defend the Constitution.  And that is considered sufficient to protect our democracy.

Yet the first great student of America’s democracy, Alexis de Tocqueville, in explaining to his European compatriots why American democracy not merely existed, but thrived,  observed that this was not mainly due to America’s laws and institutions.  Instead, he pointed to how Americans treated each other, and the expectations they held for their officials—their “manners and customs”—as the key to the survival of democracy in America.

Many countries have adopted constitutions modeled on those of the United States.  Almost all the Latin American states that emerged in the nineteenth century did so, as did many African states.  Even today, China and Russia have constitutions that promise many of the same political liberties as those found in the United States.  The difference lay in the attitudes of leaders and people to those constitutions.  Leaders argued that their main job was to speak for the people and preserve stability against enemies.  People were willing to flatter and obey their rulers in return for small rewards and persecution of their enemies.  That meant that in practice, none of the other states operated as real democracies in which the political liberties of citizens were fully protected and leaders were held accountable.

America’s triumph of democracy has always rested on the manners and customs of their leaders and people.  Leaders, whatever their vices, would not exalt themselves above the law or persecute American citizens as enemies (unless they took to violence against the government.)  People would always demand that leaders be held accountable for personal self-enrichment, or for behavior that was illegal, immoral and contrary to the spirit of the American ideal.

The peril that Donald Trump brings to American democracy is his frontal attack on those manners and customs.

As President, Trump has on many occasions asked for his justice department personnel to express loyalty to him personally, rather than to the U.S. Constitution.  This in itself is a violation of the norms that uphold the roles of officers under that constitution.  In addition, he has placed his children in high offices for which they had little preparation or qualifications (his son-in-law still has difficulty simply in accurately completing the paperwork required for high-level security clearance.)   He and his daughter continue to benefit from businesses operated in their names while they serve in high office.  Unlike all other recent Presidents, Trump has refused to release his tax returns, concealing from the people whether or not, and how much, he has personally benefited from the policies and tax laws he has promoted while in office, falsely maintaining that “nobody cares.”

When faced with unpleasant truths reported by the free media, Trump’s response is not to counter with facts, but to impugn the reported facts as “fake news” and offer “alternative facts,” often simply bald lies, instead.  Whether tweeting out stories from marginal social media sites associated with fringe groups, or making up false accusations (e.g. that President Obama wire-tapped his phones), Trump acts as any good authoritarian leader naturally does: with a complete faith in his ability to have the people accept his lies and to reject other people’s truths.

In almost every action, Trump behaves as if he believes his main job is not to protect the Constitution, but instead to speak for “the people” and protect them from their “enemies”—carving out the classic role of an authoritarian leader.  For Trump, these “enemies” are mainly immigrants, Muslims, countries that have trade surpluses with the U.S., and Democrats or moderate Republicans who criticize Trump.  In recently labeling as “traitors” those members of Congress who did not react with enthusiasm to his applause lines, Trump reinforced his pattern of treating those who object to his actions as “enemies” who threaten the safety of all Americans.

Not only is Trump’s own conduct more typically authoritarian (self-serving and equating loyalty to himself with loyalty to the country) than democratic, Trump encourages anti-democratic behavior in the people.  He has encouraged police officers to violate the rights of those arrested as suspects; he has encouraged violence against protestors and defended those who would violate the constitution in pursuit of enemies (the “many fine people” marching under Nazi flags in Charlottesville).  He has advanced unconstitutional and discriminatory measures against those he labels dangerous “enemies” in his repeated efforts to restrict immigration, and attacked judges who found those measures unconstitutional.

Trump has even persuaded the entire GOP establishment to go along with his attacks on the integrity of the FBI and Justice department—the very institutions vital to upholding federal laws and holding himself and his associates accountable.

He has—so far without consequence—even fired the FBI Director under false pretenses, falsely impugning him for failing leadership and disarray within the FBI, and then later publicly admitting the firing was because Trump was unhappy with an investigation that targeted Trump appointees.

Whether it is exaggerating the size of his inaugural and State of the Union audiences, planning a giant military parade, exhorting his supporters to fire athletes who don’t salute the flag, lying about the dangers of immigrants, or seeking to undermine popular respect for government agencies and actors that do not support his actions, what Trump is doing is not harmless entertainment.  In his own actions, and especially in persuading the GOP leadership and his followers to accept such actions as “normal,” Trump is laying the groundwork for habits of mind that undermine democracy and support dictatorship.  All of these actions promote the idea that loyalty to Donald Trump is the highest value in politics, that loyalty to Trump is loyalty to the U.S.A., and therefore anyone disagreeing with or opposing his actions is an enemy of the people.

We last saw such behavior from a Senator—Joseph McCarthy—in the 1950s, when the “enemies” in the U.S. were communists.  At least at that time, the U.S. was in a real cold war with communists abroad.  Still, when McCarthy’s actions were recognized as threatening the values essential to American freedoms, he was called out and his conspiracy theories were restrained.  Today, it is not a Senator, but a President (unsurprisingly, one who learned directly from one of McCarthy’s close associates), who is carrying out such attacks.  And his enemies are not merely “communists,” but Democrats, Muslims, and America’s major trade partners.  Meanwhile, the real enemies of freedom and democracy—dictators such as Putin in Russia, Xi in China, Sisi in Egypt, Erdogan in Turkey, and others—get no objections to their locking up journalists, imprisoning political opponents, and military aggression.

When will the GOP leadership stop flattering Trump and supporting his fanning of hatred toward key U.S. institutions and fellow Americans, in return for small rewards and persecution of their enemies?  When will they call out his behavior as undermining the habits and manners that have been the critical support of American democracy and freedom for hundreds of years?

Unless they do so, America may follow the slow drift of other states that have allowed elected Presidents to cultivate personal loyalty and undermine their institutions of accountability.  When that happens, despite the wonderful U.S. constitution, we will see our treasured liberties take flight, perhaps not to return.

 

 

 

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China Plans to Lead the World

China has just completed its 19th National Communist Party Congress.   When China becomes the most powerful nation in the world ten to fifteen years hence, this Congress may well be seen as marking the turning point in China’s rise.

This conference is unlike any previous Congress in the last fifty years in three respects. First, until now China considered itself to be an outsider, or just a developing nation among the world’s countries.   Prior Congresses were concerned mainly with advancing China’s economic objectives for domestic growth.  In regard to foreign policy, China sought to join international organizations as a supplicant, asking to be given special treatment as a poor, developing economy needing to catch up to the world’s leaders.  China did not presume to project power abroad, nor to lead the world in any way.

After three decades of double-digit economic growth, all this has changed. China now sees itself as deserving a return to its historical role as the core of the world economy.   In the seventeenth century, the #1 destination of the silver mined by Spanish conquistadors in the New World was China. Chinese manufacturers of ceramics (known as “fine China”), and of cotton cloth and silk dominated global export markets.  China plans to restore its former position as the world leader in trade and quality exported goods.  This Party Congress set forth goals for China to become a leader in the global economy.

Second, this party Congress has elevated the role of the Communist Party in China, and of Xi Jinping as leader of the Party, to new heights.   Since Deng Xiaoping’s reforms set China’s new direction in the 1980s, the Party has retreated from numerous domains of Chinese life.  In regard to private farming, private industry, religion, the media, and academia, Deng allowed the Chinese new freedoms that were unknown under Mao.  But the newly adopted constitution states that “The Party leads on everything, be it party work, government, military, civilian, or academia, be it east, west, south, north, or middle.”   And while the Party leads on everything, it is equally clear that on everything, Xi leads the party.  Xi has become the first Chinese leader since Mao to have his own philosophy written into the Party constitution while still in power.  The entire Congress has become a lengthy exercise in admiration of Xi, his thought, and his critical importance to the future of the Party.

The Party has now become increasingly Stalinist in its operations. This week, as the Party Congress closed, there was a surprise announcement that three senior officials, including a possible successor to Xi, had been arrested for vote rigging.  In the prior two Congresses, members of the Central Committee had cast votes to select their favorite 25 cadres for seats on the ruling Politburo.  These votes were advisory to the actual selection, but were intended to give some transparency and a bit of democracy within the party itself.  Xi declared the three had corrupted this process, and henceforth there would be no elections in the Party; Politburo members would be chosen by consultations with the President and top party leaders.  Give Xi credit for a trifecta:  with one act he rid himself of three potential rivals, vilified and ended democratic processes in the Party, and created a procedure for choosing Party leaders that he wholly controls.

The system put in place by Deng Xiaoping to balance power in the Party across different factions has been replaced by a system in which Xi and his loyalists hold all the levers of power in the army, the economy, and the bureaucracy. This Congress should put paid to any illusions that as China grew richer it would become more pluralistic and less autocratic, or that as China became more capitalist its intellectual life and civil society would grow more free.   What China has become, while rising to the world’s second largest economy, is a country totally subject to the rule of the Party, a Party totally subject to the rule of one man.

Third, the new constitution enshrines China’s economic strategy to dominate the world. It commits China to pursue the “Belt and Road” strategy launched by President Xi Jinping.  By financing a vast network of ports, railways, and roads to carry freight from China to Europe, China aims to create fast, direct, and inexpensive transport for China’s goods to markets across all of Asia and out to Western Europe.  China has already put in place rail links that stretch from Beijing to London.  For sea transport, China is developing new seaports in the Indian Ocean and has purchased the port of Piraeus in Greece.  China is expanding the latter to serve as the hub of a transport network of China-built rail lines reaching from Greece into Hungary and then throughout Europe.  This maritime trade route is being protected by China’s fast-expanding blue-water navy, new air and naval bases built on reefs in the South China Sea, and China’s first overseas military base in Djibouti, which guards the Red Sea and Suez routes to the Piraeus.  The Belt and Road projects will make it possible for China to become the economic center of all of Eurasia.

Moreover, this vast continent-wide construction venture is being financed mainly by loans from China to other countries.   These loans will bind these countries to China for a generation.  The Belt and Road projects also come with Chinese suggestions that state-led economic growth and autocratic government are superior ways to organize an economy, and insistence on support for Beijing in international councils.  Xi considers the western government system of checks and balances, free civil society, and constitutionally limited executive authority as a threat to the existence of the Party and to his own power; he has thus banned any teaching or even discussion of these topics in China.  The Belt and Road project is expected to be a vital tool in spreading the view of China’s political and economic system as superior; hence its enshrinement in the new constitution as a vital task of the Party.  It is backed by new institutions for credit, such as the Asian Infrastructure Investment Bank, that are designed to put China in a leading role in global finance.

While the United States, under Donald Trump, retreats from globalization and international trade agreements, seeking to void any agreements that do not yield a short term trade surplus to the US, China has embarked on the opposite strategy, aiming to make long-term investments to supplant the US as the world’s dominant power. Like the U.S. in the years after WWII, China is seeking to spin its economic power into a global web of finance, construction, and trade.  But unlike the US, it is doing so under a model of party-led autocracy as the ideal from of government, rather than the constitutional democracy promoted by the U.S.

The 19th Party Congress has left no doubts about China’s plans.  In the vision spelled out in the new Constitution, Xi Jinping is the core of the Communist Party, the Party is the core of China, and China will be the core of the world economy.

If Xi succeeds, and China overtakes the U.S. as the world’s dominant power, 2017 will be cited as the critical year in which China and the U.S. made key shifts in direction, with the US retreating from global engagement and influence, and China seizing its opportunity with both hands. It will also be seen as the year in which autocratic rule and state domination replaced constitutional democracy as the leading model for societies around the world.

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Trump is not a racist — he is a bigot

President Trump is being castigated for having “failed” the test of the Presidency this week.  After a horrific murder and mass injury attack by a neo-Nazi terrorist in Charlottesville, VA, he did not make a speech that would bring people together and bind up their wounds.

Asked to roundly condemn the ideology and symbols of hatred and racism on display in Charlottesville, he did so with hesitation and restraint, simply saying that of course Nazism and white supremacy are evil.  But while criticizing those ideals, he defended the people who marched alongside the Nazi flags, saying many were “fine people” and no different from the anti-hate groups who also came out with pepper spray and clubs to defend themselves from the heavily armed alt-right demonstrators.

Does this instinctive reluctance to criticize alt-right demonstrators make the President a racist or Nazi-sympathizer?  I don’t think so.  I think the President is sincere when he claimed “I am the least anti-Semitic person you have ever seen,” and “the least racist person.”

A racist is someone who believes ALL individuals of a certain race are dangerous or inferior; and in the extreme case someone who wants to create racial purity in their own society by expelling or killing all those not of the favored, superior race.  Hitler and those who followed him were racists; the Jim Crow enthusiasts who erected most of the Confederate War statues were racists; and most of those who fought for the South and the Southern cause were racists.  Racism is expressed succinctly in the words of the ironically named Alexander Hamilton Stephens, Vice-President of the Confederacy, in his cornerstone speech on the South’s constitution: “Our new government is founded upon exactly the opposite ideas; its foundations are laid, its cornerstone rests, upon the great truth that the negro is not equal to the white man; that slavery, subordination to the superior race, is his natural and normal condition.”

In this sense, Donald Trump is definitely NOT a racist or anti-Semite.  He has many good friends who are Black; he has married his daughter into a Jewish family and appointed many Jews and Blacks to positions in his administration.  I believe he genuinely respects and enjoys the company of these people, and would never see himself as a “hater” of those individuals.

Yet one can avoid racism, and still be severely bigoted.  A bigot is someone who, while accepting people who she knows personally as good people regardless of their background, nonetheless holds stereotypical views of other ethnic and religious groups, and applies these stereotypes to those of the group whom she does not know.  Some of these stereotypes may even seem positive to the bigot — such as that Jews are good with accounting, or Blacks are exceptional athletes.  But they are stereotypes nonetheless.  And most bigots have negative stereotypes, which prevail especially when members of other ethnic or religious groups seem to pose a threat or interfere with the bigot’s goals.  In those cases, the entire ethnic group and “most” members of it are deemed to be hostile, dangerous, or suspicious.

It is these negative stereotypes that Trump seems to hold enthusiastically, seeing illegal immigrants from Mexico as rapists and gang members; Muslim immigrants as potential terrorists; and Blacks as creating carnage in America’s “inner cities” (when in fact “inner cities” are now increasingly gentrified and white, while gangs and violence are moving to the suburbs and outer urban rings).   The stereotype of the fraudster getting food stamps or other welfare support who nonetheless drives a fancy car has been a popular Republican trope for decades — even though the resident of a poor Black or Hispanic neighborhood who displays conspicuous wealth is likely to be, or be close to, a drug dealer, pimp, or numbers runner, not a struggling mother who depends on government support to provide for her children.

Trump not only has racial and religious stereotypes, but political ones as well.  Democrats and leftists are “bad people” who oppose his plans to fix what is wrong with America.  They are just as dangerous as any other enemies to America’s heartland.  (But the Hispanics and Blacks who Trump believes voted for him, in large numbers in his imagination, are great people!)  Trump’s Alt-right supporters, on the other hand, are simply people who share Trump’s view that the left has given away too much of America’s wealth to foreigners and undeserving minorities, hurting upstanding and loyal Americans.    Sure, extreme rightists may be horrible Nazis and white supremacists who would even threaten his Jewish family and Black friends, and it is right to criticize them.  But in Trump’s view most of the people marching to protest removal of Confederate statues must be good Americans who are fighting the efforts of un-American leftists to erase local history.   So of course there had to be “very fine people” on both sides and very bad people on both sides as well, in the Charlottesville melee.

I therefore am not one of those who labels Trump as a neo-Nazi sympathizer or a racist.  Rather, he is an all-American bigot, who relies on stereotypical views of political, racial, and religious groups to simplify a complex world that is hard for him to understand.

The problem is that the art of governing, especially in a diverse nation with rich links of history and trade to much of the world, requires understanding different points of view and being able to bridge differences.  To a bigot, the only point of view that has validity is his own, especially when embraced by friends and family members of diverse backgrounds.  The idea that other people could have, en masse, equally sound but different viewpoints, or that it is necessary to understand different viewpoints and find common ground, is unacceptable.

It is this narrowness of viewpoint, which results in lashing out at those who differ in their views, that makes Trump unfit to be an effective President, and which will likely doom his Presidency.

 

 

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The Essence of Trump

People are having a hard time understanding Donald Trump.  Why is he so confrontational?   Why does he constantly troll the media?  When will he learn that foreign policy is complicated, and that policy-making requires tact and compromise?

The answers are actually easy to state; one only has to look at Trump’s life and his approach.  It is marked by consistency over decades, and that has carried over into how he runs his Presidential administration.

First, Trump is a very poor businessman who nonetheless has achieved great success.  His business record is actually one of bad investments, poor treatment of investors and contractors, and huge losses.  Legitimate banks will no longer do business with him.

Trump’s success comes from two factors.  First, he has been repeatedly bailed out by people who supported him despite failure (his family) or by people who saw that they could use Trump for their own ends (Russian money-launders and mafiosi).  Second, Trump is a great showman, and achieved considerable success in his television career on “The Apprentice.”  This career not only earned him money, but created an international brand for “Trump” that allowed the Trump organization to gain branding rights and attract development partners for projects to which Trump only contributes a name  but receives considerable revenues.

Second, to cover his anxiety about his underlying failures, Trump has developed in his own mind the persona of a brilliant, exemplary success.  He lies about and exaggerates his accomplishments because he must; to do otherwise is to start to admit doubts about his own role in his success.  In Trump’s mind, he will always be the smartest person in the room, always the greatest success, always the person who has done the most and more than anyone else in his situation.  This is how he presented himself in the past (“Star of the #1 show on television,” which it was not) and presents himself now (“biggest election crowd ever;” “Best speech ever given in [any given setting]”; “most accomplished by any president in first 6 mos.”; “Most presidential” etc.)

This view leads to a simple view of the world and policy-making.  If something is not going great, it must be because his predecessors, less smart and less skilled in business, made “bad deals.”   If these are just tossed out and replaced with “better deals,” then everything will be great.  And since he treats his predecessors as stupid people who made “incredibly bad deals,” it will be “easy” for someone as smart and great a deal-maker as Trump to come up with something “much, much better.”

For Trump, the details of history do not matter; the fine lines of policy are irrelevant; compromise is a dirty word and sign of weakness. What Trump believes works well, based on his own internal story of his business success, greatly reinforced by his fluke victory in the Presidential election, is demanding, bullying, playing to the crowds, pushing for a “better deal,” and then claiming victory.

Trump therefore treats the leaders of other countries (as shown in his transcripts of conversations with the leaders of Mexico and Australia) as he would a potential business partner or contractor in a real estate deal.  Their history, the complexities of their own situation, etc. do not matter.  All that matters is that Trump needs to make a better deal.  And they had better go along, or else.

The same is true in domestic politics.  In health care and tax reform, Trump believes his predecessor made bad, stupid deals.  It will therefore be easy to make much better ones and claim victory.  When such a simple-minded approach fails, he lashes out at those who won’t go along, accusing them of obstruction and cupidity.  He seems constitutionally unable to grasp that some things (e.g. achieving a political settlement in Iran, crafting national health care policy, making peace in the Middle East) are far more complex than signing a deal to put up a building in Chicago or Baku and getting credit for putting his name on it.

Much else follows from this world view.  Putting his son-in-law Jared Kushner in charge of China, the Middle East, government efficiency, and much else is OK because it’s just about making a better deal, and hence not that complicated.  No policy or international affairs experts are needed because they know nothing about making business deals.

Seeking out loyalists and family and running things in a fun, leisurely way, was a path to Trump’s business success and the Presidency, so of course he believes he is much smarter than the people in Washington who have “failed” to solve the important problems of Middle East Peace, providing health care, and restoring good-paying jobs to blue-collar workers.   That centuries of religious conflict, the problems of insurance in a market with asymmetric information, or automation make those problems highly resistant to solution are dismissed as excuses or a cover-up for weakness.

When Trump is faced with setbacks he does not see that he has to learn; he lashes out at scapegoats or seeks to distract attention (the Obama spied on me, Rice illegally unmasked people, and endless Hilary Clinton crimes gambits).  The more he faces setbacks, the more he exalts his accomplishments and blames others, and tries to get the media to frame him as the hero and others as villains.

This is what worked in his show-biz career and election campaign; I cannot imagine that he will abandon this approach now.

The result is that we have a President who is simply the person we elected — an overblown TV celebrity with ties to Russian money-launderers who thinks he is brilliant and all the US and world’s problems can be easily solved by making a better deal.   Truly smart and experienced advisors may try to get him on track, and occasionally frustrate Trump’s worst impulses.  But they are unlikely to last long, as Trump simply discards those whom he thinks do not fit into his story of his own brilliance and success.  So far, Trump has fired his Deputy AG, FBI director, National Security Advisor, Press Secretary, Director of Communications (twice) and Chief of Staff.  His Secretary of State has been largely marginalized and ignored; other cabinet secretaries (Ben Carson, Rick Perry) are figureheads wholly ignorant of the programs they lead, or as with Tom Price at HHS and Scot Pruitt at EPA, charged with dismantling the programs they head.  Whether it is appointing a family wedding planner to a major urban housing position or a talk radio host with no science background to the top science position in the Agr. Dept., this is a “no need for expertise” Presidential administration and is likely to remain that way.

Trump’s approach to governing has already done serious damage to both the US’s international standing and influence, and the capabilities of the US government.  It has not yet damaged the economy (which is always less dependent on the President than on myriad other factors) or caused a major international conflict.  We can only hope that Trump is somehow removed from active decision making before more harm is done to US influence and the US government.  And we must pray that the economy does not slide into recession or that a major international conflict arises; for if either eventuality arises, those deficiencies in US influence and capabilities will truly start to hit home.

 

 

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You know you are living in a Banana Republic when …

The United States, thank God, has a vibrant and effective federal system.  Every day, at the state and local level, fully independent, self-funding governments are enforcing laws, working to preserve the environment, providing support to the sick and needy, offering public education from primary school through university, and supporting business in making investments and enforcing good pay.  Local governments provide police and fire protection, insurance regulation, and a host of other vital services.  That is fortunate, because our federal government has become increasingly dysfunctional.

I had long predicted that President Donald Trump would play havoc with the federal government.  My last post discussed how his policies and actions have reduced US influence around the world.  In this post, I focus on actions at home.  Anyone who has spent time studying poor and kleptocratic authoritarian regimes — also known as “banana republics” because such dictatorships were once especially common in the tropical regions where bananas are grown for export — would recognize the many characteristics that the Trump administration shares with such regimes.

To sum up, let me offer a short (well, not so short) list.  You know you are living in a banana republic when:

1.  The top policy-making jobs go to the President’s children and in-laws, rather than to experienced, qualified professionals.

2. Second-tier jobs go to friends and hangers-on of the President (e.g. having the President’s family wedding-planner appointed to a top housing job in the country’s largest city; or appointing people with no scientific qualifications to critical jobs overseeing scientific/technical programs).

3.  Qualified professionals are reduced to window-dressing; they don’t attend key meetings and are not put in charge of key policy areas.

4. Across the government, loyalty to the President is the main qualification for getting and keeping your job; those whose loyalty is suspect or seem too independent are soon reassigned or fired.

5.  The President asserts that he and his family are above the law, as they can be pardoned for any crimes by the President.

6.  Prosecutors or investigators looking into crimes or corruption by the President and his family are dismissed.

7.  The President and his administration routinely make blatant lies to put themselves and their actions in the best possible light; then expect those lies to be accepted as fact.

8. The President and his administration repeatedly attack any media who criticize or seek to correct their lies as “Fake news,” while praising and promoting media who endorse their fictions.

9.  The President accuses political opponents (such as his predecessor and candidates who ran against him) of committing major crimes, calls them bad people, and urges that they be investigated, prosecuted, and locked up.

10.  The President treats opposition parties as irrelevant, excluding them from any serious role in political appointments or legislation.

11. The President treats his own party in the legislature as people who should do his bidding and work mainly to serve him.

12.  The President loves parades, displays of military force, and public adulation, but has no interest in policy details or patient negotiation and compromise to produce better policy.

13.  The President and his family operate private businesses on the side, and use their power and position to help those businesses increase their profits.

14.  The President routinely flaunts and violates ethics laws, and claims they do not apply to him or don’t matter.

15.  The President surrounds himself with people whose main duty is to flatter him and protect him from any criticism.

I think that’s quite enough for now.  But I may start to keep a running list!

Actually, it’s not funny.   American is going from a country that plays “Hail to the Chief” to one that panders to “El Jefe.”

 

 

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