What’s Trump’s Deal with China?

Donald Trump’s worst nightmare By Shizhao (Own work) [CC BY-SA 3.0 (http://creativecommons.org/licenses/by-sa/3.0)%5D, via Wikimedia Commons
First, click here and watch a fun mashup of Donald Trump saying “China” about a million times.

Trump seems to have several issues with China, most of them wrong or confused. The weirdest one to me is that Trump seems convinced that China’s authoritarian rulers are technocratic supermen running circles around the US, laughing all the way to the bank with America’s money. These would be the same leaders who recently have been grasping at straws as the stock market crashes and the economy slips partly due to those same leaders irresponsibly encouraging everyone in the country to pour their savings into the stock market. While China’s leaders have done quite well in many ways, such as by embracing policies that have lifted more than 680 million people out of poverty since 1981, they are hardly the geopolitical super-geniuses of Trump’s imagination.

The flip-side of Trump’s China love is his China hate. In Trump’s mind, he has identified problems in US-China relations that only he has the power to solve. Maybe Trump thinks he’ll really charm Xi Jinping with his classy impression of Asian business people and win all the concessions he demands.

Onto the substance. Trump seems to have five interrelated grievances against China. First, Trump has railed against China’s recent currency depreciation, which he says China has been doing for years but in fact the opposite is true. Believe me. I used to be able to buy 8.2 yuan for every dollar back in 2004. Today I can only buy 6.38 yuan per dollar. Here’s the nuanced explanation of why Trump is full of it.

The second grievance is the trade deficit between China and the US. Trump argues that China’s currency manipulation shoulders a lot of the blame, which was somewhat true five years ago but is mostly wrong today. He also argues that China’s theft of US intellectual property (Trump’s third complaint) is a big factor, which is partially right but exaggerated.

Now, I’m a bit of a trade deficit agnostic. International trade creates winners and losers in both countries engaging in the trade. Also, our most popular trade indicators are a bit outdated for understanding the modern global economy, where the idea and the design of a product like the iPhone originates in California; the parts are manufactured in several countries including Germany, South Korea, and the US; those parts are then shipped to mainland China for assembly in a factory owned by a Taiwanese company; and the finished iPhone is sent back to California at which time we count it as an import. At this point the iPhone adds $229 to $275 to the US-China trade deficit even though only a fraction of that is actually retained by the Chinese economy. (The linked paper estimates that $10 or less per iPhone is paid in labor costs in China, and gross profits mostly go to the foreign firms that own the factories.)

Many other high tech products like the iPhone follow a similar narrative. The cheap plastic stuff and poisonous dog food we import from China are different stories. But now we see how complicated this all is. It’s far from clear that the US-China trade deficit is a big problem, let alone hugely responsible for American woes.

Trump’s fourth criticism, that China is stealing American jobs, is pure demagoguery. Do you remember Deng Xiaoping or Hu Jintao coming to the US and forcibly removing America’s light manufacturing industry? No? Right, me neither. Sure, opening up trade with China has contributed to job loss and stagnant wages in the US, but these problems have a lot more to do with our own policies and values than nefarious Chinese plots. American workers are much more productive, yet their wages have remained stagnant for more than 30 years. Major shareholders and executives at the top of corporations eat up all the profits created by productivity gains. The guy who used make the dog food is now the clerk who stands in the pet food aisle at Walmart, but some time around 30 years ago the country decided it was okay to stop giving these kinds of service workers raises.

Trump’s fifth grievance is all the US debt that China holds. This is an oft-misunderstood issue that is not necessarily a sign of American weakness but rather shows that China has nowhere else to put its money (same goes for Japan). These countries are not loaning us money and then threatening to break our kneecaps if we don’t pay up plus 20% next week. They buy our debt even though interest rates are so low because our debt is considered the safest in the world, and what else is China going to do with its surplus cash, build more ghost cities?

So Trump is half right on one of his five grievances with China, and I’ll give him another half point on the trade deficit issue, since some economists I trust think it merits consideration. Should Trump somehow become president, maybe he can speak with Xi Jinping about something he actually knows about, bankruptcy.


Surprise! Donald Trump Appeals to White Nationalists

David Duke, a former Grand Wizard of the Ku Klux Klan and a fan of Trump’s immigration policies, shakes hands with far-right National Democratic Party of Germany member Udo Voigt in Saxony, Germany. By Emmanuel d’Aubignosc [GFDL (http://www.gnu.org/copyleft/fdl.html), CC-BY-SA-3.0 (http://creativecommons.org/licenses/by-sa/3.0/) or CC BY-SA 2.5-2.0-1.0 (http://creativecommons.org/licenses/by-sa/2.5-2.0-1.0)%5D, via Wikimedia Commons
What happens when a party’s leading candidate for its nomination for president falls in a forest and a bunch of white nationalists hear him loudly and clearly? Well, we’re finding out now.

Evan Osnos, in a great reported piece for The New Yorkerhappened to be out in the field researching white nationalism when the Trump candidacy reached full bloom. And while some of the people Osnos spoke with don’t trust Trump entirely, one thing is clear: certain segments of the population love what Trump is saying about immigrants and America’s position relative to other countries. I can’t recommend this Osnos piece highly enough. Read it if you want to better understand what’s going on with Trump.

Two months ago a Trump candidacy seemed like a fun joke. But then he jumped into the race by calling Mexican immigrants rapists, followed that up by belittling John McCain for being captured during the Vietnam War, followed that up with misogynist insults of Fox News’ Megyn Kelly in the wake of the first Fox News debate, and recently praised the passion of two supporters who beat up a homeless Hispanic man in Boston (in fairness, two days after praising his “passionate” supporters Trump finally acknowledged the terribleness of the crime).

So far, there’s been no punch line to this joke. So far, the joke seems to be on us.

I now see no compelling reasons to believe that Trump is not the favorite to win the Republican Party’s nomination. And if he wins the nomination, he has a shot at the presidency. I’d put his chances of winning the general election somewhere between 30 and 40% if he makes it through the primaries.

Back to the problem of white nationalism. The Republican Party does not harbor a majority of racist whites, does it? No, it doesn’t, but it does host a substantial racist minority. And we’ll have to wait for new data, but I’d be willing to bet that Trump’s candidacy is encouraging more and more white Republicans to be more and more open about their racism. As the linked article explains, social desirability bias discourages people from sharing their real views about contentious topics. I’d argue that Trump is making it more acceptable for his fans to openly express their racism. And the linked analysis above from 538? That only looked at white attitudes towards blacks. Who knows how bad this looks when you factor in other minority populations, specifically Hispanics, in the context of the immigration debate and Trump’s inflammatory comments.

The genuinely fascinating thing about Trump’s candidacy is how he is exposing fault lines between the GOP’s elites and its base. The elites have two economic priorities: keep taxes low and limit government regulation. The base has two economic priorities: keep their jobs and their “earned” benefits, Social Security and Medicare (the “keep the government’s hands off my Medicare” phenomenon).

The GOP elite has always been hostile to welfare programs (yes, Social Security and Medicare are socialist welfare programs) because they require certain tax levels and regulations to keep afloat. So how has the GOP managed for decades, like with Bush in 2004, to elect people who promise to dismantle the programs the base relies upon? One thesis, though it has its flaws, is proposed in the famous book What’s the Matter with Kansas? The basic argument is that GOP elites impose upon the electorate candidates who share elite priorities of low taxes and slashed welfare programs, but are capable of redirecting the base with cultural issues, such as immigrants, abortion, gays, and guns (and yes, race), that the candidates and elites have little appetite for actually pursuing.

The Tea Party backlash against the GOP establishment is an expression of this tension in the party. The base started waking up to the fact that the establishment had no real dog in the culture war fights. The base began electing people who really did want to ban abortions, who really did want to carve out exceptions to equal protection laws to allow people with certain religious beliefs to discriminate against gays, who really did want to severely restrict immigration and forcibly remove those residing in the country illegally.

The problem here is that the GOP base has always preferred Democratic economic policies (link to opinions about Social Security, but could easily link to opinions about taxes, Medicare, etc.). So I find it extremely hard to believe that the GOP base is rallying around Trump simply because he talks more like a Democrat about economic issues. To Trump’s credit, he wants to increase tax receipts from the wealthy and use that money to strengthen Social Security as it exists now. All national Democrats hold this position, but usually with more specifics and often they want to expand Social Security benefits. If members of the GOP base truly prioritized their economic positions, they would vote for Democrats.

So what’s going on here? Why would a bloc of voters who have always voted for GOP economic policies all of a sudden be open to Democratic economic policies espoused by someone who sounds like a racist demagogue? I’ll be handing out more free year-long subscriptions to this blog if you have the right answer.

In my next post, I’ll try to explain why I think Trump is as much a favorite as anyone to win the GOP’s nomination, and why I think he has a puncher’s chance to win the presidency if he makes it to the general election as a Republican.

A Good Place to Start

By Paul Cezanne [Public domain], via Wikimedia Commons
Apples are just like oranges. Spread some peanut butter on an apple wedge, spread some peanut butter on an orange slice, same difference. Am I right?

Of course not.

As explained in this blog’s first post ever, the major theme here will likely be the myths and misunderstandings that bedevil contemporary American politics. It is my good fortune then that David Roberts at Vox has just written a clearer, more interesting and detailed piece than I could ever write about one of the more persistent, and malignant, myths out there (via). This would be the idea that both major American political parties are filled with equal numbers of uncompromising extremists and are equally to blame for Washington gridlock, so obviously splitting the difference between the two sides will result in good solid middle-of-the-road policies and we can all have a pony.

Using as a hook some unsophisticated views of politics held by otherwise sophisticated people in the tech world, Roberts dismantles the notion that both-sides-do-it is a valid way to understand our politics. Roberts finds Tim Urban at Wait But Why using both-sides-do-it-politics-is-stupid-bro to explain the failure to enact a revenue-neutral carbon tax, a “logical” policy for reining in emissions and dealing with climate change. I happen to mostly agree with Urban on the policy! However, he could not be more wrong about the reasons such a common-sense policy has not been enacted yet.

In 2009, the Democratic-controlled House of Representatives passed the American Clean Energy and Security Act of 2009 (ACES). It was then “defeated” in the Senate, but here defeated means that it never came up for a vote because a minority of Republican senators wouldn’t allow it. Democrats held a majority in the Senate at the time, but the Republican minority was in the process of perfecting its unprecedented, total obstruction strategy. Simply put, Senate Republicans began serially abusing the filibuster to require 60 votes to move all legislation, a tactic previously used mostly in special circumstances. Soon after Obama’s inauguration, Republicans were filibustering routine legislation and executive branch appointments. In hindsight, whatever you think about the policy merits, it is practically a miracle that the Affordable Care Act ever passed.

So why didn’t the new House of Representatives in 2011 re-introduce climate legislation? You win a year’s free subscription to this blog if you guessed “Republicans made huge gains in the 2010 midterm elections and took control of the House of Representatives.” From 2011 on, climate legislation has been dead-on-arrival, and even deader-on-arrival since Republicans took over the Senate after the 2014 midterm elections.

There is a more nuanced narrative of how ACES failed in the Senate, in which Obama and other Democrats are not blameless. At bottom, though, the both-sides-do-it myth obscures the harsh reality that most Democrats wanted ACES to pass and most Republicans opposed ACES and opposed the idea that climate change is even real. ACES and a bunch of other bills would be law if not for Republican opposition and obstruction. The climate policy that Urban prefers definitively does not land in the middle of the two parties’ climate policy views. His policy preference lands squarely on the dirty hippie side of the aisle.

I happen to like most of the bills Democrats tried to pass starting in 2009. Maybe you do too, or maybe you don’t. The important thing is to understand that the two parties have very different agendas. The both-sides-do-it-there-must-be-a-great-policy-that-splits-the-difference myth is a myth. Throwing up our hands and blaming extremists on both sides in Washington for gridlock misses the point. The Democratic Party has a platform that it believes in and would like to make law. The Republican Party has a different platform.

This is a topic for a different post, but the parties have sorted themselves ideologically and there is little room for crossing the aisle and compromising anymore. It means the parties now stand for very different things, and the most right-leaning national Democrat is now to the left of the most left-leaning national Republican. The average voter probably doesn’t agree entirely with either party. But the average voter tends to have a set of beliefs that are somewhat consistent with one party or the other. This really is not that hard, and the first step is to shed the both-sides-do-it trope. A voter may agree with most of the Republican Party’s agenda. But she shouldn’t kid herself about where the parties stand and the likelihood of compromise. There is no middle ground between (R) all abortions should be criminalized and (D) abortions should be equally accessible to all women all over the country, or between (R) build a giant Game of Thrones-style wall and deport all people living in the country illegally and (D) create a path to citizenship for these people. This applies to most policy problems at the national level.

It would be great if the two parties could compromise in good faith and move the country forward. They are just too far apart on most issues in their current incarnations. Voters need to stop complaining about how neither party is willing to act on a particular issue when one of the parties clearly is. With those both-sides-do-it blinders off, voters can determine a strategy for easing gridlock in Washington. Hint: figure out which party you agree with most, and work to give that party unified control of Washington. Easy answer, difficult task!

UPDATE: I now see Paul Krugman has also written about Roberts’ piece. Krugman uses it to try to explain why tech types and others fall for both-sides-do-it. Check it out.

What’s this? Why the weird name?

This is a blog. I think I will use it mostly to share links to articles and essays that can be of assistance in understanding contemporary American politics. Several friends over the years have suggested I do something like this because American politics is a big hobby of mine and these friends claim that links I sent them were edifying. So I’m calling your bluff. You know who you are. Read this blog!

Any actual readers will understand my politics by the links I provide and the words I write. So no need to bore you with my world view here.

The weird name, Swinging Dead Cats, comes from one of my favorite authors, Mark Twain. In The Adventures of Tom Sawyer there’s a scene where Tom meets up with Huck, who’s carrying around a dead cat. Huck explains that if you go to a graveyard at midnight and swing your dead cat and say some kind of spell, you can cure yourself of warts. Tom agrees that ought to do the trick.

If there ends up being a theme to this blog, I think it will be common myths and misunderstandings people have about contemporary politics. “Swinging dead cats” is a metaphor of sorts. Of course, believing and acting on their superstitious cure for warts leads Tom and Huck into all sorts of trouble. A lot of people, many of them otherwise intelligent, have been going around swinging dead cats in contemporary politics (see: Donald Trump’s head, top of).

But enough hilarious jokes and labored explanations for my stupid blog’s name. Finally, on occasion I may subject this blog to some of my other interests: teaching, EFL/ESL, sports, history, literature, China, Chinese language, cooking, etc. The reader is warned.