If Democrats Can’t Win The Economic Debate, Trump Will Win In 2020

Prof.dr. Robert Pollin

Pundits and economic models predict that if nothing changes in the next two years on the economic front, Donald Trump will be re-elected in 2020 by a bigger margin than in 2016. To be sure, the economy is usually the top priority for voters heading into a presidential election, and the U.S. economy appears on paper to be doing well since Trump moved into the White House. According to the Bureau of Economic Analysis, real gross domestic product (GDP) increased at an annual rate of 3.2 percent in the first quarter of 2019 (real GDP grew by 2.2 percent in the fourth quarter of 2018), and the national unemployment rate is at a low 3.8 percent, with applications for unemployment benefits having declined to a 49-year low.

Nonetheless, while the economy looks strong, the economic condition of most Americans is anything but rosy. And, according to a Federal Reserve’s “Report on the Economic Well-Being of U.S. Households in 2018,” roughly 40 percent of households would not be able to cover a $400 “unexpected expense.”

At the same time, the majority of Americans think that the economic system benefits mostly the wealthy, and want to see the government do something about this situation.

As such, the question is whether Democratic presidential candidates have the vision and the boldness to put structural economic reforms on top of their pre-election campaign. Bernie Sanders and Elizabeth Warren have already positioned themselves as the ideas candidates for fixing the economy, although Wall Street Democrats will clearly oppose both of them. In the absence of a plan to abolish capitalism, drastic reforms to make it more equitable are a necessary precondition for the economic well-being of the majority of people in the U.S. — reforms that would likely prove to be detrimental to the economic interests of the super-rich, who are intent on accumulating ever higher amounts of wealth. Yet, it is unclear what sort of reforms deserve top priority in today’s U.S. economy. To answer that question, we interviewed Robert Pollin, distinguished professor of economics and co-director of the Political Economy Research Institute at the University of Massachusetts-Amherst.

C.J. Polychroniou: Bob, the U.S. economy is said to be booming, although Democrats attribute this fact to the policies of the Obama administration. Firstly, is the U.S. economy in such a good shape as it appears to be on paper? Secondly, for how long can the Democrats go on giving credit to Obama for today’s signs of a strong economy?

Robert Pollin: First of all, based on the most standard measure of overall economic performance, the growth rate of Gross Domestic Product (GDP), the U.S. economy has not been booming under Trump. Indeed, over the two full years under Trump, 2017-18, real economic growth (adjusted for inflation) averaged 2.5 percent per year. This is no better than the average for the full eight years since the Great Recession officially ended in 2010. Over the 57-year period prior to the 2008 Great Recession (1950-2007), U.S. real economic growth averaged 3.4 percent per year. The Trump economy obviously hasn’t come close to reaching this long-term average growth trend.

It is true that the official unemployment rate is at a historic low, at 3.8 percent of the labor force. However, let’s also consider a broader official measure of unemployment coming from the U.S. Labor Department, one which includes both the “underemployed” — i.e., people in part-time positions but seeking full-time work — as well as people who have become discouraged from looking for a job due to lack of success. By this measure, the unemployment rate rises to 7.3 percent. If we also add in the roughly 5 million people who have dropped out of the labor market following the Great Recession, that would bring the unemployment rate to 10.3 percent. So while labor market conditions are indeed far better now than they were 10 years ago, as we were just coming out of the Great Recession, there is still a lot of distress among people trying to get jobs, much less good jobs.

The Obama administration, along with the Federal Reserve, does deserve credit for helping to avoid a total financial collapse in 2008 that could have led to a Depression as severe as the 1930s. Who knows where we would be today if, a decade ago, the unemployment rate had risen to, say 25 percent, as it did in the 1930s, versus 10 percent during the Great Recession.

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Noam Chomsky: Trump’s “Economic Boom” Is A Sham

Donald Trump ran a campaign — and won the 2016 presidential election — based on unorthodox tactics, whereby he used irrational provocation to defy traditional political norms and make a mockery of established beliefs on both domestic and international issues confronting the United States. Amazingly enough, Trump has continued his instinctual political posturing even as president, dividing the nation and causing severe friction with the traditional allies of the U.S. Yet, his unorthodox tactics and irrational leadership style appear to remain a winning formula as current polls indicate that, unless something dramatic happens, Trump may very well be re-elected in 2020 by an even bigger margin.

How do we make sense of Trump’s continuing popularity? Noam Chomsky, one of the most respected public intellectuals alive, shares his insights on Trump’s actions in the exclusive Truthout interview that follows.

C.J. Polychroniou: Noam, I want to start by asking you to reflect on Trump’s political posturing and leadership style and explain to us how this apparently “irrational” president continues to enjoy unquestionable support among nearly half of all voters and has managed to turn the GOP into his own fiefdom.
Noam Chomsky: Whatever one thinks of Trump, he is a highly skilled politician, with a good sense of how to gain popular approval, even virtual worship in some circles. His job approval just passed 50 percent for the first time, according to the latest Zogby poll.

He certainly has taken control of the GOP, to quite a remarkable extent. He’s been very successful with his two constituencies: the primary one, wealth and corporate power; and the voting base, relatively affluent fairly generally, including a large bloc of Christian evangelicals, rural whites, farmers, workers who have faith in his promises to bring back jobs, and a collection of others, some not too admirable.

It’s clear why the primary constituency is mostly delighted. Corporate profits are booming. Wealth continues to be concentrated in very few hands. Trump’s administration is lavishing them with gifts, including the tax bill, the main legislative achievement, across-the-board deregulation, and rapidly increasing fossil fuel production. He and McConnell — in many ways the evil genius of the administration — are packing the judiciary with reactionaries, guaranteeing the interests of the corporate sector and private wealth even after these “glory days” are past. They don’t like his trade wars, which are causing disruption of global supply chains, but so far at least that’s outweighed by his dedicated service to their welfare. Read more

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As Capitalism Fails, We Need A Roadmap To Survive Climate Change

Paavo Järvensivu

As we enter an era of energy transition and the effects of climate change become more dramatic, our need for new forms of economic thinking is becoming increasingly urgent. The existing economic theories and models are clearly ill-equipped to address the intertwined challenges of a massive energy shift and climate change because they are all linked to the era of material abundance and cheap energy resources. The existing economic system has failed and if it continues it will lead to inestimable catastrophic consequences. But what would the policy framework of the much-needed new economics on energy, climate and environment look alike?

C.J. Polychroniou: Dr. Järvensivu, how did your research unit end up producing the background paper for the U.N. Global Sustainable Development Report?
Paavo Järvensivu: BIOS is an independent, multidisciplinary research unit, launched in Helsinki in 2015. Our basic task is to study the effects of environmental and resource factors on Finnish society and develop the anticipatory skills of citizens and decision-makers. To be able to do that, our research, of course, deals with the same issues also globally…. Moreover, we felt that due to the urgency to act on the climate crisis, researchers need to engage much more proactively outside the academic community. We dedicate much of our time on ongoing dialogue with decision-makers, journalists and many others…. There are few [other] research teams that would systematically aim at a comprehensive view of the political, economic and cultural changes caused by mitigating and adapting to climate change.

The paper your research unit produced for the U.N. claims with certainty that we will soon be entering a new energy era. What is this new energy era all about, and how will it replace the capitalism of today, which relies mostly on fossil fuels for supplying the vast majority of our energy needs and, subsequently, for growth?

The question of future energy can be approached as a [carbon] source and [carbon] sink problem. According to some estimates, the depletion of accessible fossil fuels would drive dramatic changes in the human energy system. This is true in a certain time frame, but climate change, or the inability of ecosystems in their current state to handle all the emissions from the excessive use of fossil fuels, gets us there first. Mitigating climate change requires a rapid decarbonization of the energy system — not only electricity generation but also heating/cooling and transportation.
Most likely we need to reduce energy consumption in order to succeed in rapid decarbonization. Replacing fossil fuel infrastructure with low-carbon solutions is such a demanding task physically, financially and organization-wise that the chances for succeeding improve dramatically if we lower overall energy consumption at the same time. This would be in line with also other environmental goals, especially with fostering biodiversity. In practice, this would entail qualitative changes in people’s lives through an emphasis on public transport and walking and biking, and perhaps relaxing on the (very new to humankind) requirement to have the same temperature inside throughout the year.
If the major economies don’t succeed in decarbonization, the global fossil economy is in for a rough ride. As an example, in a world with escalating geopolitical tensions — for instance, due to climate refugees — the position of fossil fuel-importing countries is weakened. Those countries — such as Finland, where I’m from — would be better off with less dependence on fossil fuels. Acting on this proactively, investing a lot on low-carbon infrastructure, should be on the high priority list of current and next governments. Read more

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Trump Wants To Maintain US Empire But Without The Alliances

Daniel Immerwahr – Associate Professor History Department Northwestern University

During the U.S. invasion of Iraq, even more reluctant scholars on both ends of the political spectrum were finally forced to acknowledge that the United States is an empire and that it has been acting as one since the end of World War II. Of course, there was a natural disagreement among them as to whether the U.S. was a different sort of an empire from those that had dominated world politics in the past, with conservative thinkers like Niall Ferguson arguing that the U.S is essentially a benign empire.
Yet, as Daniel Immerwahr, associate professor of history at Northwestern University, reminds us in his pathbreaking book, How to Hide an Empire, U.S. imperialism was alive and kicking throughout the 19th century. In fact, the United States was an empire from the very beginning of the founding of the nation, although this fact has never been part of standard educational narratives about U.S. history and foreign policy.
Meanwhile Donald Trump’s fetishization of the military is a reflection of the way imperial logic has been deeply ingrained into the mindset of most Americans, although Trump’s own vision, as Immerwahr argues, is one of a “fortress America” and of a U.S. foreign policy that relies less on alliances and on the presence of military bases across the globe.
In this exclusive Truthout interview, Immerwahr talks more about the contemporary shape of U.S. empire and how it has shifted under Trump.

C.J. Polychroniou: Over the last few decades, there has been an ongoing debate among some scholars as to whether the United States became an empire following the end of World War II. In your recently published book, titled How to Hide an Empire, you argue that the U.S. has always been an empire. Can you elaborate a bit on this claim?

Daniel Immerwahr: From the first day the United States received its independence from Great Britain, the country was, in spite of its name, not a union of states. It was an amalgam of states and territories. And for most of its history, the United States has had overseas territories. Add to that the hundreds of foreign military bases currently under U.S. control. There are lots of things you might mean by empire — you might refer to a commercial empire, an empire of pop culture. But by the strictly territorial definition, which understands empire to mean territories and outposts, the United States has unambiguously been an empire and remains one today.
This isn’t just a minor fact. The overseas territories have contained millions (as they do today). In 1940, one in eight people who lived in the United States lived not in the states but in the territories. More people in the country were colonized than were Black, more people in the country were colonized than were immigrants. That’s how big the empire was. It’s not just that the overseas parts of the country have accounted for a lot of its land and population. They’ve also been important to its past. The overseas territory of the United States has consistently been on the front lines of its history. Read more

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Trump’s 2020 Budget Rewards The Wealthiest Individuals

Gerald Epstein is Professor of Economics and a founding Co-Director of the Political Economy Research Institute (PERI) at the University of Massachusetts, Amherst.

Donald Trump’s 2020 budget proposal represents the wildest version of neoliberalism yet. It is just the latest evidence that the United States has become a plutocracy run by an oligarchical elite bent on destroying the last vestiges of a democratic polity.

Trump’s fiscal budget proposal threatens to exacerbate all of the major problems facing the U.S. economy and society today “in order to fund more goodies for the wealthy,” according to radical political economist Gerald Epstein. In this interview with Truthout, Epstein — the co-director of the Political Economy Research Institute and a professor of economics at the University of Massachusetts at Amherst — discusses why the Trump budget proposal is a blatant power grab, why we need to think about economics beyond GDP growth, and why the U.S. government is incurring more debt that does not even begin to address the problems the country faces.

C.J. Polychroniou: Trump’s fiscal 2020 budget proposal, which has been quite fittingly proposed by some critics as “a budget for a sick and declining America,” includes major cuts across all programs and agencies with the exception of the military, which receives additional increases for defense spending. In your view, what’s the logic driving this budget proposal, and what would be the likely consequences for U.S. society and economy if it were to be implemented?
Gerald Epstein: Let me start with the latter part of your question by saying that, if Trump’s fiscal 2020 budget proposal were to be implemented, the consequences would be simply disastrous. Indeed, the Center on Budget and Policy Priorities (CBPP), a reliable source of information on federal budget and tax policy, has catalogued the “little shop of horrors” that make up Trump’s budget. As you indicated, the budget proposes deep cuts in non-defense discretionary spending (NDD) alongside sizeable increases in military spending. The Trump budget proposes cutting the NDD funding by 11 percent after adjusting for inflation. But the overall cuts on key social programs would be even greater than this, because the Trump budget protects or even increases some categories of NDD. As the CPBB says, the budget proposal increases discretionary funding for Homeland Security by 15 percent, while cutting funding for Health and Human services by 12 percent, Housing and Urban Development by 18 percent and the Environmental Protection Agency by a whopping 31 percent. The budget calls for even deeper cuts in the years after 2020; for example, in 2029, it would lower NDD by about 40 percent below current funding in 2019 adjusted for inflation. The budget would take away medical insurance from millions of people by repealing the Affordable Care Act and making deep cuts to Medicaid. It would also cut many other programs for the poor, including food stamps and housing assistance. Trump proposes all this in order to fund more goodies for the wealthy. According to the CBPP, the budget would extend the 2017 tax breaks for rich individuals, making the very rich and the military industries the major beneficiaries of the budget proposal. Read more

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Workplace Surveillance Is Central To Capitalist Exploitation

Ivan Manokha – Centre for Technology and Global Affairs – University of Oxford

Surveillance of employees in the workplace through the use of advanced technology represents the latest phase in the long history of capitalism to maintain control of workers and to increase productivity through intensified forms of exploitation. Is surveillance capitalism an updated version of Big Brother or something even more sinister? Does it really increase productivity? Are workers accepting of surveillance? And how do we ensure that surveillance capitalism does not completely wipe out privacy and individual rights? In this exclusive Truthout interview, Ivan Manokha, a lecturer at Oxford University and a leading scholar in surveillance studies, offers penetrating insights into the above questions.

C.J. Polychroniou: In the age of flexible capitalism, surveillance technologies have become extremely widespread among advanced capitalist societies, with as yet unclear implications. In your view, what is the primary aim and function of the new spying and surveillance technologies?
Ivan Manokha: The key distinguishing feature of capitalism is the existence of a labor market, i.e. in capitalism human labor is commodified — it is bought and sold in a market place. From the point of view of employers, purchasing labor represents a production cost, and their objective is to make sure that it is utilized to the maximum of its productive potential. This, in turn, requires surveillance and it may be observed that capitalism as a socioeconomic system has always involved workplace surveillance for this reason.

It is actually misleading to use the term “surveillance capitalism” following, in particular, the work of Shoshana Zuboff, now widely employed to refer to the current phase of capitalism with new — digital and biometric — technologies entering the workplace. Capitalism has always been “surveillance capitalism” because in this system the main objective of any business activity is to maximize profits — to make sure that the resources purchased and employed — including labor — are used with the maximum efficiency.

The function of new technologies, as this has always been the case with respect to workplace surveillance, is to seek to maximize worker productivity. This may be achieved in two ways: by extending the amount of time that employees work (e.g. by reducing the duration of breaks, by extending hours of work in the workplace or encouraging employees to work from home after the end of the working day, etc.), or by intensifying the labor process (the speed with which workers move, the number of tasks they complete per unit of times, etc.).

Modern workplace surveillance technologies have the potential to enable employers to do both: to monitor more precisely and continuously the time employees spend to actually work, including the timing of lunch and toilet breaks, as well as to better scrutinize and measure their performance (continuously measuring output, developing performance scoring systems and rankings, etc.).

Here a special mention needs to be made of the so-called “platform labor” — the rise of different digital platforms that bring together clients and “independent contractors,” the euphemism platforms use to refer to their laborers and service providers. They do not know their workers and have to rely on various indicators of performance to measure and compare their productivity, and the central role here is played by customers who perform the role of proxy managers — they evaluate and rank the performance of workers (e.g. of Uber drivers, of cleaners of TaskRabbit, etc.). In short, new workplace surveillance technology is used to improve the capacity of employers to monitor employees, something that they have always done. Read more

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