MORNING MESSAGE
James Mumm
Massive, disruptive change is happening in the world economy. The combination of automation, artificial intelligence, and machine learning is fueling a new industrial revolution that may drive up to half of all workers, both white and blue collar, into unemployment. Just as when steam, fossil fuels and biotechnology upended lives and fortunes, workers are getting the short end of the stick – this time from robots. But instead of tinkering around the edges, several authors argue for bold solutions our society’s growing levels of inequality insecurity: a universal basic income (UBI) and a maximum income – in other words, a floor and a ceiling to protect workers. As we enter this unprecedented era of job uncertainty, these two ideas might open the big tent in a way this country hasn’t seen since the New Deal.
Trump Backs Away From Shutdown
Trump assents to shutdown delay. Politico: “President Donald Trump and congressional leaders are getting ready to punt on a major shutdown fight over Trump’s border wall for at least a week. The president said he would back a two-week delay of a government shutdown battle after the death of former President George H.W. Bush. Government funding expires on Dec. 7 for several departments, including Homeland Security, and the president is urging Congress to send him at least $5 billion in border security. But Bush’s death has changed the calculation in Washington and appears likely to lead to a stopgap funding extension. GOP leaders are considering extending government funding for a week or two, according to multiple Republican sources. They are leaning toward one week, pushing the battle off until mid-December. That’s in part because Bush’s death and plans for him to lie in state in the Capitol early this week will complicate any efforts to hammer out a large-scale funding deal before the Friday deadline, leading both the president and congressional leaders to seek a longer runway for the shutdown fight.”
Temporary U.S.-China Trade Truce
US will hold off on raising China tariffs to 25% as Trump and Xi agree to a 90-day trade truce. CNBC: “Chinese President Xi Jinping and U.S. President Donald Trump put their bilateral trade war on pause momentarily, striking an agreement to hold off on slapping additional tariffs on each other’s goods after January 1, as talks continue between both countries. In a White House readout of a dinner at the G-20 summit in Argentina, Xi and Trump discussed a range of nettlesome issues — among them the trade dispute that has left over $200 billion worth of goods hanging in the balance. ‘President Trump has agreed that on January 1, 2019, he will leave the tariffs on $200 billion worth of product at the 10 percent rate, and not raise it to 25 percent at this time,’ the statement read. Over the next 90 days, American and Chinese officials will continue to negotiate lingering disagreements on technology transfer, intellectual property and agriculture. ‘Both parties agree that they will endeavor to have this transaction completed within the next 90 days. If at the end of this period of time, the parties are unable to reach an agreement, the 10 percent tariffs will be raised to 25 percent,’ the statement added. Meanwhile, ‘China will agree to purchase a not yet agreed upon, but very substantial, amount of agricultural, energy, industrial, and other product from the United States to reduce the trade imbalance between our two countries. China has agreed to start purchasing agricultural product from our farmers immediately,’ the White House said.”
Trump Plans To Exit NAFTA
Trump says he will soon terminate NAFTA. Bloomberg: “President Donald Trump said he would soon tell Congress of plans to terminate the existing North American Free Trade Agreement, a move that would give lawmakers a six-month window to ratify a new regional trade pact signed on Friday between the U.S., Canada and Mexico. ‘I will be formally terminating Nafta shortly,’ Trump told reporters late Saturday aboard Air Force One as he returned from the Group of 20 summit in Argentina. ‘So Congress will have a choice’ between the new deal, known as the U.S.M.C.A, or potentially no continental trade deal at all. The threat, if enacted, would effectively remove a safety net from under the new trade pact’s journey through Congress. Even though it was signed by leaders, the deal still needs to be ratified by lawmakers in the three countries. In the U.S., it will almost certainly be taken up by the next Congress, where Democrats will have a majority in the House starting in January. Some Democrats are warning they may not be satisfied by the terms. Speaking Sunday on CNN’s ‘State of the Union,’ Democratic Senator Sherrod Brown of Ohio, a fierce Nafta critic who has said he worked with the administration in re-negotiating the deal, didn’t answer how he’d vote on it but said ‘the work’s not done yet’ and there’s still an opportunity to ask Mexico to strengthen labor requirements.”
U.S. Trade Deficit Climbs
US trade deficit rises despite Trump’s tariffs. CNN: “President Donald Trump’s tariffs were supposed to shrink America’s trade deficit, but it has instead grown for five straight months and is on track to hit a record high before the end of the year. The monthly goods deficit grew by $1 billion in October, according to a US Census report released Wednesday. The Census report is one of the first measures of trade released since Trump imposed his biggest round of tariffs in September on $200 billion of Chinese goods. It put a 10% tax on goods ranging from luggage to bikes and baseball gloves. Trump has threatened to increase the rate to 25% on January 1. The duties make it more expensive for US importers to buy those items, but Americans bought more goods from abroad in October than they did the month before. The figure may reflect stockpiling by American importers ahead of an additional hike in tariffs set to take effect in January, as well as strong consumer spending. ‘There is some anecdotal evidence that US importers are likely pulling forward orders to get ahead of additional tariffs on Chinese goods, which could be one of the factors driving imports higher in recent months,’ said Pooja Sriram, an economist at Barclays. Additional data due out next week on trade of both goods and services is expected to show a 10-year high in the overall trade deficit, said Ian Shepherdson, chief economist at Pantheon Macroeconomics. That’s the opposite of what Trump wants to achieve.”
DeVos’s Millions Fail To Advance Her Views
Billionaire heiress lashes out at unions because her fortune fail to buy election wins. Common Dreams: “Betsy DeVos is furious! She and her family spent boatloads of money this election cycle and few of their candidates won. Instead, lawmakers were largely selected by these things called… ew… voters. She was so enraged that she used her platform as Secretary of Education – another prudent purchase by her family – to lash out at teachers unions for – get this – having too much influence!!!!! She told Fox Business Network: ‘The teachers union has a stranglehold on many of the politicians in this country, both at the federal level and at the state-level.’ That’s rich coming from her, but one can see where she’s coming from. In the midterms 23 states had double-digit percentage-point increases in turnout compared with 1982-2014. That resulted in a blue wave in the U.S. House – one of the largest and most diverse groups of freshman Congresspeople ever. This is the third-highest turnover since 1974. We showed 104 incumbents the door. DeVos didn’t pay for THAT!”
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