American Politics

[Omega 3]

Read an interesting article today (dated 1-15-17) at Alex Jones' Infowars, entitled "Will the CIA Assassinate Trump?" A year ago, I would have dismissed outright such an article, and even the site. Now, however, after the enormously bizarre events of the past few months, am no longer so sure.

Some effort recently has been made to discredit Infowars as a fake news site. Brings to mind the saying, "Just because you're paranoid doesn't mean that they're not out to get you. " Ha ha.

Actually, find the Washington Post recently to be more of a fake news site. Blatantly biased and unfair reporting (brings to mind The Philippine Daily Inquirer here) and discredited "news" articles, especially regarding WaPo reporting of alleged Russian activities in the USA. See recent commentaries by Glenn Greenwald at The Intercept.

Surprisingly, John Brennan has been publicly belligerent and antagonistic, even to the point of outright arrogance. Is there really a "shadow" or "deep state" government, which thrives on the huge profits of endless conflicts and perpetual war, running things in the USA?

If so, will there be tangible and adverse consequences for the Philippines and its President, as well as for the US, and its President, in 2017?

Just one man's thoughts and questions.

OM.

[Amavida]

Whew, D30 is giving the world a preview of what US foreign policy would look like under a Trump administration. Most likely, the demographics (women, college educated, minorities) will prevent this from happening.

Perhaps Stein may be a dark horse in this race to the bottom?

[Jack Burton]

... this place which attracts so little in the way of DFI. The fact is that existing regulatory frameworks that discourage investment would have to be dismantled before lopsided trade agreements become a real problem here.

GE.

I dunno. I find mongering to be a bit one-sided, depending on who needs it more. And certainly direct "investment" is one-sided if I let it, of the "I will gladly pay you the second Tuesday of next week for Jolibees today". But I'm not a wimp, and don't do business with Whempies.

[Random99]

Whew, D30 is giving the world a preview of what US foreign policy would look like under a Trump administration. Most likely, the demographics (women, college educated, minorities) will prevent this from happening.

[Engine Driver]

However, given that this country makes very little that the rest of the world actually wants..

GE.

Hey not so fast, what about Cebu dried mangoes? Famous all over the world!

[GoodEnough]

I agree with you here. My point is that trade deals that don't demand immediate reciprocity by all concerned are bad deals. I have no objection to a Thai-built transmission in a Spanish-assembled SEAT car provided Thailand has opened its market to the products of Spain (which would be under a Thai-EU trade deal). I have no sympathy for "Please wait a decade or two for us to catch up. " You want access now? So do we.

I don't either, and I agree with your assessment. However, given that this country makes very little that the rest of the world actually wants--aside from OFWs--it's not really germane to this place which attracts so little in the way of DFI. The fact is that existing regulatory frameworks that discourage investment would have to be dismantled before lopsided trade agreements become a real problem here.

GE.

[Hutsori]

I forgot to mention the complication of accurately calculating "value added. " Many products "imported" by the US and Europe in fact contain components exported from the US and Europe for assembly in a second or third country. So how do we treat the exports and subsequent re-imports of assembled goods? I have no idea. The Philippines for example assembles, but does not manufacture small electrical goods. Since such goods are assembled from components manufactured and designed elsewhere should they count fully as exports from the Philippines? Supply chains have become multinational and perhaps the notion of country of origin is no longer relevant.

GE.

I agree with you here. My point is that trade deals that don't demand immediate reciprocity by all concerned are bad deals. I have no objection to a Thai-built transmission in a Spanish-assembled SEAT car provided Thailand has opened its market to the products of Spain (which would be under a Thai-EU trade deal). I have no sympathy for "Please wait a decade or two for us to catch up. " You want access now? So do we.

[Hutsori]

Competing Economic theories not withstanding, the simple truth for me is that blue collar manufacturing jobs are never going to return to the US or to the West in general, and it's a reality that politicians dare not mention.

Yet, Germany. We may think of Porsches and petrochemicals, yet it's also a pen and pencil superpower. I'll also mention that Korea today is a high-wage nation with plenty of manufacturing jobs. I recall reading a few years ago Korea's autoworkers earn more per hour than American UAW union members. How? Because it's not simply wages that determine success or failure. Germany has done very well for itself with innovative engineering. (A problem for its trade and competiveness is when a nation demands technology transfer.) The other important factor is productivity measured by the cost per unit.

To say manufacturing jobs are never going to return is defeatist. And evidence shows that this is not entirely true. Recovery becomes more difficult when the loss of know-how lasts for decades. Seasoned mentors in factories count for a lot.

I'll add it also takes a bit of nationalism. Citroen, Renault, and Peugeot survive because French consumers choose to buy French.

These are the top 10 selling car models on Q1 2016.

1 Renault Clio IV.

2 Peugeot 208.

3 Peugeot 308 II.

4 Renault Captur.

5 Peugeot 2008.

6 Citroen C3 II.

7 Dacia Sandero.

8 Volkswagen Polo.

9 Citroen C4 II Picasso.

10 Renault Twingo III.

Who here is thinking "Dacia?" Eight French models, one German, and one Romanian (owned by Renault). I used France as the example because its marques are not renown for engineering excellence like Germany and Japan's. In Italy, six of the top 10 are Italian marques. If you look throughout Europe the top selling models are dominated by the European marques, and the US / Japanese models are often made in the UK.

Here are the top 10 selling models in the US for Q2 2016.

1 Toyota Camry.

2 Honda Civic.

3 Toyota Corolla.

4 Nissan Altima.

5 Honda Accord.

6 Ford Fusion.

7 Hyundai Elantra.

8 Nissan Sentra.

9 Ford Focus.

10 Chevrolet Cruze.

Presumably some of the foreign models were assembled in the US, and the Cruze may be made outside the states since it started life as a Holden and later made by Daewoo (owned by GM).

Does Japanese engineering suddenly fall apart in Europe?

The days when those armed with a high school diploma could find decently paid work are simply gone for the most part. Global trade, and the free flow of capital are realities that aren't going to change much regardless of protectionist rhetoric, and the only country that appears to get this (or at least the only one I've been able to identify) is Singapore.

Other than chicken and rice, what does Singapore make? It's a regional hub for services. When one doesn't manufacture there's not much demand for protection. It's only recently that the state is self-sufficient in potable water, and that's due to reclaimed water. I'm not criticising the effort, merely pointing out that the people's we-have-to-import-to-eat-and-drink concern has a great influence on how they perceive things and adjust to the world. Their survival literally depends on it.

The US spends less as a percentage of GDP than other OECD countries on the retraining of workers displaced by automation or foreign competition, and I guess it's easier for politicians to make empty promises than to actually spend money to do something about helping workers to acquire relevant skills.

It's a criticism, but to what end? The US retrains footwear makers to what jobs? Steel making? Auto assembly? Coding another wastebook? (To digress for a moment, I read a fascinating account of how instagram, with a few dozen employees, helped put tens of thousands of people out of work.) If the foreign markets are closed to those items, and the US keeps increasing its imports of steel and cars, is the retraining ineffective? Twenty years ago people were told to re-educate themselves in IT and the service sector. Yet, I shift my accounting, software development, and many kinds of other back-office functions to India and the Philippines. Countries like France, Italy, and Germany are better protected because their languages are not global. How many Indian paralegals speak Italian? One of my girls is a lawyer. All she does is research US legal cases for US law firms. After years of doing this she knows New York laws, and those of a few other states too, better than Filipino ones. Another girl is an accountant. In her 4 years on the job she has looked at US accounts exclusively.

I have no opposition to retraining, but it needs to have a payoff, and ideally one that's viable for several years. But when Beijing demands US and European companies open their research and development centres in China the know-how is being transferred. Having lost the expertise the UK can no longer build nuclear power plants on its own; France and China have been hired to do so.

Conversely, this week's "Economist" ran a series of articles on globalisation and provided some real data on the benefits to the United States of its 20+ bilateral trade deals. By and large these benefits do not accrue to those without at least college degrees. But for me this argues for a better trained, more technically sophisticated workforce.

We have to keep in mind in the US about 40 per cent of the population have uni degrees and Germany is about 28 per cent. Is Germany mistaken not training more? BTW, German tertiary education is free. Sadly for many of these US degree holders, they chose the wrong subjects. I suppose they learn how to manage debt. And this is happening in the UK, too. "Give everyone an advanced education," is too broad. It needs to be focussed in subjects that create production, wealth, tax revenue, and build communities. Social activist with a blog who works for clicks and plays ukelele at open mic night in Williamsburg, NYC isn't that career. And day after day the US and UK must keep importing medical workers. Something is amiss. The plot has been lost.

As others have pointed out, the Philippines plays such a small role in global trade that it remains largely unaffected by movement of capital and FDI. It's problems are mostly rooted in the fact that its protectionist trade and business laws are designed to restrict the inflow of foreign investment and they've certainly achieved that goal. I've heard nothing public from the new President about this subject.

Yet Korea and Taiwan were very closed to FDI and inbound trade for decades. They erected protectionist barriers everywhere. And it wasn't just the government. Buy a foreign car and someone would scrape a key on it. Children were taught in school to admonish their mums who bought foreign food. The press would continually run campaigns against "overconsumption", and all the items "causing social problems" were foreign made. Korea used to jail people for smoking foreign cigarettes. This wasn't an anti-smoking campaign because domestic cigarettes were lawful; in fact, they were made by a government-owned company. The governments directed investments into the means of production ("We're going to build wealth") and the companies were forced to look overseas for business. Korea's billionaires are the families of Samsung, LG, Hyundai, etc. The Philippines' billionaires are in retail, food & beverage, and real estate. And gambling.

[GoodEnough]

We are in agreement Huts. The backlash has begun as voters accept they have been duped by neoliberal ideology. Unfortunately their choice is the established elite or right wing nutters.

I forgot to mention the complication of accurately calculating "value added. " Many products "imported" by the US and Europe in fact contain components exported from the US and Europe for assembly in a second or third country. So how do we treat the exports and subsequent re-imports of assembled goods? I have no idea. The Philippines for example assembles, but does not manufacture small electrical goods. Since such goods are assembled from components manufactured and designed elsewhere should they count fully as exports from the Philippines? Supply chains have become multinational and perhaps the notion of country of origin is no longer relevant.

GE.

[Amavida]

By exporting its cars to developed markets like the US, Hyundai was claiming they were good enough to compete. Yet at the same it demanded and received protection in the home market because it was too weak to compete. Does this make any sense? Sure, in the world of double standards.

That's the monster GATT / WTO created. China is following the export-oriented economic develop model because it works. Look at Japan and Korea.

Trade with immediate reciprocity is fair. Each side makes some sacrifices whilst achieving some gains. The trade regime created by GATT / WTO didn't establish this. "You open now, I'll open later. " A developing county could delay opening the market to develop new industries whilst its powerhouse industries were allowed unfettered access to shatter the foreign competitors.

If people are going to embrace "free trade" then make sure the word "free" is legitimate and accurate.

We are in agreement Huts. The backlash has begun as voters accept they have been duped by neoliberal ideology. Unfortunately their choice is the established elite or right wing nutters.

[GoodEnough]

SCMP not pulling punches.

http://m.scmp.com/business/article/2...ampaign=buffer

Well, everything that comes out of his mouth, to the extent anyone can re-interpret it into standard English is pretty much nonsense. On the other hand, I just read the article which is pretty much of an ideological polemic without much substance either.

Competing Economic theories not withstanding, the simple truth for me is that blue collar manufacturing jobs are never going to return to the US or to the West in general, and it's a reality that politicians dare not mention. The days when those armed with a high school diploma could find decently paid work are simply gone for the most part. Global trade, and the free flow of capital are realities that aren't going to change much regardless of protectionist rhetoric, and the only country that appears to get this (or at least the only one I've been able to identify) is Singapore. The US spends less as a percentage of GDP than other OECD countries on the retraining of workers displaced by automation or foreign competition, and I guess it's easier for politicians to make empty promises than to actually spend money to do something about helping workers to acquire relevant skills.

Yes, at Hutsori points out, the GATT and WTO probably provide an unfair competitive advantage to "developing" economies, but the former are also realities that aren't going anywhere soon. Conversely, this week's "Economist" ran a series of articles on globalisation and provided some real data on the benefits to the United States of its 20+ bilateral trade deals. By and large these benefits do not accrue to those without at least college degrees. But for me this argues for a better trained, more technically sophisticated workforce.

As others have pointed out, the Philippines plays such a small role in global trade that it remains largely unaffected by movement of capital and FDI. It's problems are mostly rooted in the fact that its protectionist trade and business laws are designed to restrict the inflow of foreign investment and they've certainly achieved that goal. I've heard nothing public from the new President about this subject.

GE.

[Hutsori]

SCMP not pulling punches.

http://m.scmp.com/business/article/2...ampaign=buffer

The writer creates a nice strawman to beat. Until the 80s the west still had garment and shoe manufacturers. Often these were unionised jobs with OK pay and decent benefits. Yes, repetitive work, but so too is mounting a door on a car for an 8-hour shift.

The main problem with the trade deals of GATT and later the WTO are they ignore David Ricardo's wisdom of comparative advantage. As they began industrialising, Asian countries had advantage in menial work such as garment making, and the west had advantages elsewhere. Under GATT and the WTO protected classes based on economic development were created - kind of like positive discrimination / affirmative action. A country would be labeled emerging or newly industrialised, and it was allowed to maintain tariff and non-tariff barriers under the misguided idea of fairness.

It was "unfair" that Korea had to liberalise its auto market, for example. Korea would be allowed to retain its competitive advantages in other business sectors whilst at the same time denying its trading partners theirs. As Korea developed its auto manufacturers and began exporting to the west it still maintained these barriers; Korea could (and would) lose money exporting because Korean consumers were compelled to buy Hyundais, KIAs, and Daewoos. The few who decided to pay the outrageous import taxes for a Merc faced tax audits. Japanese cars were banned outright - the first Japanese cars to enter Korea's market were made in the USA. Think about the logic of this. By exporting its cars to developed markets like the US, Hyundai was claiming they were good enough to compete. Yet at the same it demanded and received protection in the home market because it was too weak to compete. Does this make any sense? Sure, in the world of double standards.

That's the monster GATT / WTO created. China is following the export-oriented economic develop model because it works. Look at Japan and Korea.

Trade with immediate reciprocity is fair. Each side makes some sacrifices whilst achieving some gains. The trade regime created by GATT / WTO didn't establish this. "You open now, I'll open later. " A developing county could delay opening the market to develop new industries whilst its powerhouse industries were allowed unfettered access to shatter the foreign competitors.

If people are going to embrace "free trade" then make sure the word "free" is legitimate and accurate.

[Amavida]

SCMP not pulling punches.

http://m.scmp.com/business/article/2...ampaign=buffer

[Soapy Smith]

A little levity to offset too much serious discussion about corruption and the things that ail and animate the Philippines:

http://www.gocomics.com/candorville/2016/04/03

Many of the comments are fun, too. OlongapoJoe, if you're one of us, stand up and take a bow.

[Jelly Donut]

Max Weber

The bit about Calvinism is persuasive. It confirms the general idea that the more religious a nation or individual is, the more likely they are to work harder, save and invest (with emphasis on saving and investing). At least this seems to be the case with Mainline Protestants (Calvinists) and perhaps with the religions I mentioned below. The general arc of Europe and it's Calvinist descendants over the past 300 years, and certainly the past 50 years, confirms that the less religious these countries and individuals are, the lower their relative economic thrust.

control for wealth from oil

Controlling for oil wealth makes sense, since geography is a bit of a lottery. If you controlled for wealth inherited (from Calvinists and their protege), that would also shape the results.

It's a pretty fluid topic. Is North Korea religious or not? Is any state with a personality cult around it's leader (or dead leaders) religious?

Thanks for caring enough to ask.

Thanks for the response. I'm toying around with some ideas here and enjoyed your post.