Trump

The Question the WSJ Didn’t Ask

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The Wall Street Journal, on its editorial page, writes about a company called Standard Textile, whose economic viability is apparently being threatened by the 25% tariffs on imports of its main production input:  a type of fabric sourced from China and known as greige, which I believe is basically the fabric as it comes off the loom, unfinished and un-dyed.  The company is especially concerned because finished products from China which compete with its own products are tariffed at only 6.7%.   WSJ uses this example to argue that Trump is all wrong on tariffs, and does so in the rather superior manner (the title of the piece is ‘a looming trade lesson’) which is common among those who ascribe any objections to absolutely free trade as based on nothing but economic ignorance or political demagoguery.

I will stipulate that it seems rather dumb to tariff raw materials and intermediate goods at a higher level than finished products made from these inputs.  But..is it really true that greige fabrics are available only from China?  A few minutes of searching suggests that they are available from India, and from at least some US suppliers.  Maybe there is some particular variant of the products that is only made by a specific Chinese supplier, or maybe Standard has negotiated such a great deal with their supplier that no one else will match the price–it would be interesting to know.

The big question that the WSJ didn’t ask is:  Why is this fabric (if it is truly unavailable in the US) not manufactured here?  Textile manufacturing is not generally a labor-intensive activity, it is very different on this measure from the transformation of the textiles into apparel and other finished products.  It was one of the first industrial activities to be mechanized, and automation in this field has advanced steadily over a couple of centuries.  Moreover, textile manufacturing uses significant amounts of power, and I’ve read about Chinese firms that moved to the US specifically because the electricity was cheaper and more reliable.  So the usual arguments about why a particular item needs to be made in China or other non-US setting…labor costs, less-stringent environmental restrictions…don’t seem to really apply here.

Most likely, greige manufacturers tend to locate in Asia and other non-US locations because that is where their customers are…’customers’ here referring not to end consumers but to apparel manufacturers and others who buy the material as an input to their own processes…and geographical proximity is of value in being able to fill orders rapidly and without excessive shipping costs.  So this is an  example of how supply chains are interconnected, and how losing one industry in a chain tends to pull other industries away also.  The same point has also been demonstrated in consumer electronics manufacturing, where the supply chain is now so centered in Asia, especially China, as to make it difficult for a company to produce these products in the US even if they want to.  (And ‘supply chain’ in this sense does not include physical products, it also includes certain services.  I have been told by the CEO of a medical electronics startup that she would find it difficult to manufacture in the US due to absence of certain specialized services; I believe she mentioned RF test facilities)

A serious analysis of America’s trade situation should involve more than quoting David Ricardo and lecturing people about their supposed economic ignorance.  The WSJ article would have been more intellectually-honest and more useful had it also given examples of American manufacturers who are benefitting from the modified tariffs; these examples certainly exist.

Best of luck to Standard Textile.  Hopefully, (a) the tariffs, if they remain in place, will be adjusted to level the rate between imported fabric and imported finished goods, and (b) US manufacturers of this fabric will come into being.

Is China involved in the Russia-Trump hoax ?

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We have been subjected to a year and a half, almost two years, of constant hysteria about Russia and whether they helped Trump win the 2016 election. There has been no evidence of any collusion and the Mueller “special counsel” investigation seems to be winding down.

Rush Limbaugh has some interesting ideas about what is going on.

So the only possible way they can get rid of Trump here is via politics, and that’s to drive his approval numbers down so that Republicans in Congress have no reason to support him. If Republicans in Congress — the House and Senate — could be forced to abandon their support for Trump, as happened to Nixon, then he would have to go. I don’t know if Trump would play ball even in that scenario like Nixon did. I think Trump would dare them to impeach him and try to remove him. I don’t think Trump’s gonna play ball the way the establishment thinks.

Democrat voters are highly motivated to vote in the November election, at least in part, to impeach Trump. Why ?

There seems to be no letup in the frenzy to demonize Trump.

In 21st-century America, it is difficult to conjure the possibility of the federal government taking an eraser to the map and scrubbing away an entire ethnic group. I had arrived in Columbus at the suggestion of a Cleveland-based lawyer named David Leopold, a former president of the American Immigration Lawyers Association. Leopold has kept in touch with an old client who attends the Mauritanian mosque. When he mentioned the community’s plight to me, he called it “ethnic cleansing”—which initially sounded like wild hyperbole.

“Mosque.” Hmmm.

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The Dogs Don’t Like It

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The title of this post is the punchline to an old, old story about the limits of advertising; a story which may or may not be based on fact. The story goes that a big food-manufacturing conglomerate came up with a brand new formulation for dog food, and advertised it with a huge, costly campaign: print ads, TV commercials, product placement in movies, TV shows, county fairs, giveaways and sponsorships; the whole ball of wax … and the product cratered. The CEO of the company is irate and demands answers from anyone who can give him a reason why. Didn’t they do everything possible to make their dog food brand the market leader? Image everyone at that meeting looking nervously at each other at this point because they have done everything possible … except for one small thing. Finally, someone gets up sufficient nerve to answer. “But the dogs don’t like it.”

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Seth Barrett Tillman: Who Was Right About the Emoluments Clauses? Judge Messitte or President Washington?

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Josh Blackman & Seth Barrett Tillman at The Volokh Conspiracy:

For now, it is enough that we point out that the District of Maryland’s five-page rebuke of our brief rests on plain historical error. Moreover, that error was enabled by errors in the Plaintiffs’ briefs. On appeal, the burden remains on the Plaintiffs to show that the District of Maryland, and not President Washington, is the more faithful arbiter of the Emoluments Clauses.

Worth reading.

Too Pessimistic

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The Origins of Our Second Civil War by Victor Davis Hanson.

The first half of this VDH piece seems over-the-top. Would the intermarriage and cultural assimilation that he cites in his next-to-last paragraph be happening if the situation were as bad as he thinks? Or is the country mostly culturally sound but burdened with dysfunctional elites dominating politics, big business, the universities and the media.

This part is good:

Again, Obama most unfortunately redefined race as a white-versus-nonwhite binary, in an attempt to build a new coalition of progressives, on the unspoken assumption that the clingers were destined to slow irrelevance and with them their retrograde and obstructionist ideas. In other words, the Left could win most presidential elections of the future, as Obama did, by writing off the interior and hyping identity politics on the two coasts.
 
The Obama administration hinged on leveraging these sociocultural, political, and economic schisms even further. The split pitted constitutionalism and American exceptionalism and tradition on the one side versus globalist ecumenicalism and citizenry of the world on the other. Of course, older divides — big government, high taxes, redistributionist social-welfare schemes, and mandated equality of result versus limited government, low taxes, free-market individualism, and equality of opportunity — were replayed, but sharpened in these new racial, cultural, and economic landscapes.

The rest of the piece is also good and points out how the country’s situation might improve. “A steady 3 to 4 percent growth in annual GDP” doesn’t seem very far from where we are. University reform seems likely as the public increasingly catches on to the corruption and excessive costs of higher education. Race relations seem to improve when not politicized. Spiritual and religious reawakenings happen every few generations.

Keyboard trash talk and dark speculations about violence and civil war are not the same as actual violence. They might even be safety valves to release transient passions, cautionary tales, for everyone outside of a tiny lunatic minority. (The lunatic minority who are spurred to action by online/media hype are a serious problem, but not mainly a political one except as regards public and hence political unwillingness to force treatment on recalcitrant individuals with severe mental-health issues.)

Today’s political violence is a problem but not one at the level of 1968 much less 1861. Almost all of the action now is in the political realm. There is little reason to expect an intractable impasse on a fundamental issue as in 1850-60 over slavery. There is no substantial constituency favoring civil war as there was in 1861. The modern federal government is huge, profligate and obnoxious, but risk-averse deep-state bureaucrats and crony-capitalist opportunists aren’t going to take physical risks to defend the status quo. The political process still responds to public concerns about governmental overreach, which is probably a large part of why Trump was elected. There is also enough collective memory of the last civil war and its awfulness to discourage enthusiasm for a replay from anyone who is sane.

None of this is to say dire predictions won’t come to pass, but that’s not the way to bet. The country has been through harder times and surmounted them through politics rather than violence. My money’s on the basic soundness of our culture and political system this time as well.