Bad earnings by US firms puts pressure on China? I mean, OK, but…

This is, I suppose, true so far as it goes. The problem is that it doesn’t go nearly far enough in the right direction.

White House economic adviser Kevin Hassett said Thursday that “it’s not going to be just Apple” that faces revenue shortfalls as a result of the trade tensions initiated by President Donald Trump between the United States and China.

“It’s not going to be just Apple,” Hassett, the chairman of the Council of Economic Advisers, said. “I think that there are a heck of a lot of U.S. companies that have a lot of sales in China that are basically going to be watching their earnings be downgraded next year until we get a deal with China. And I think that that puts a lot of pressure on China to make a deal.”

Source: WH Economic Adviser: ‘Not Going To Be Just Apple’ Feeling Effects Of China Trade War – Talking Points Memo

Yeah, over time this would put pressure on China’s political system. But much more quickly, it’s going to put pressure on the parts of America’s political system that began this trade war, including but not limited to the White House this dude is advising. So, like…I mean, OK, but also…?

How This All Happened 

If you’d asked me if this could be done in under 5,000 words while still remaining accurate, I would’ve quickly said NO WAY and then been very very wrong. Go read this. Set aside the few minutes it will take and go read this.

This is a short story about what happened to the U.S. economy since the end of World War II. That’s a lot to unpack in 5,000 words, but the short story of what happened over the last 73 years is simple: Things were very uncertain, then they were very good, then pretty bad, then really good, then really bad, and now here we are. And there is, I think, a narrative that links all those events together. Not a detailed account. But a story of how the details fit together….

The biggest difference between the economy of the 1945-1973 period and that of the 1982-2000 period was that the same amount of growth found its way into totally different pockets.

Source: How This All Happened · Collaborative Fund

Interesting Things I Read Today

Before I get to today’s bullets, a serious long-form recommendation from my favorite political scientist, Matt Kerbel. It’s called Five Excrutaitg Steps to Republican Renewal, and here’s how he ledes it off: “My proposal cuts against the short-term thinking that drives the political process. It involves making five excruciatingly difficult choices that run counter to how parties are built to act, which is why I don’t think anything like it will be considered by the political class. Still, I offer it as a serious and good faith recommendation to enable Republicans to reverse the significant damage they have done to their ability to function as a national party over the past seven-plus years.” Our shared national community is stronger when it has two parties dedicated to constructive governance, so I honestly do hope that one day soon they do some of the things he suggests. 

Now, on to those bullets…

On Brexit

  • “Mr. Johnson offered no details about when or how Britain should invoke Article 50 — the formal process for leaving the European Union — nor did he lay out a plan for how Britain could maintain free trade with the European Union, the world’s largest common market, without accepting the bloc’s demand for the unrestricted movement of workers.” [NY Times]
  • “If it wants access to the bloc’s single market, post-Brexit Britain must accept EU freedom of movement rules and the supremacy of the European Court of Justice, EU diplomats have warned ahead of a vital summit. The idea that Britain could have access under a European Economic Area style deal and impose border controls was a non-starter, diplomats said. []
  • “The EU is an even more ambitious outgrowth of those same liberal ideals. Not a new nation, but a political entity that transcends nation and insists that Poles and Brits and Spaniards and Swedes are all created equal and should all have the right to live and work and trade peacefully amongst themselves. This is a very big idea, and when you take its magnitude seriously you can see that it’s not particularly surprising that it’s run into a few problems along the way.” [Matt Yglesias]
  • “If Britain wants to have a similar status to Switzerland and Norway, then it will also have to pay into EU structural funds like those countries do. The British public will find out what that means.” [The Guardian]
  • “European leaders may also be hoping that forcing Britain to make a stark choice between staying in the EU or leaving under possibly chaotic circumstances will cause them to think twice about leaving at all. Defying the will of the voters would be politically costly, of course, but so too would be presiding over a chaotic exit from the EU that damages the British economy.” [Timothy B. Lee]
  • “The structure of the EU–a common market with free flow of people and goods–has a great deal to recommend it, especially given Europe’s bellicose history. But the incomplete architecture–the absence of a fiscal and banking union–along with gross mismanagement–fiscal austerity, punitive actions by Brussels and Germany, non-management of immigrant flows–surely led “Leave” voters to discount the benefits of EU membership.” [Jared Bernstein]
  • “The entire EU project was fundamentally flawed from the start in as much as it created monetary union without political union – a workable enough scheme until you hit any crisis worth its name and the whole edifice starts hemorrhaging on every front. That crisis came in 2008 and the EU has limped from crisis to crisis ever since. It’s a side point but this is an example of just how amazing an edifice the framers of the US constitution created when they set in place what amounted to a massive and expanding free trade and unified legal/regulatory zone that became the United States.” [Josh Marshall]

On the US Election

  • Hardly Anybody Wants To Speak At Trump’s Convention: “POLITICO reached out to more than 50 prominent Republicans. Few said they plan to attend the convention in Cleveland, let alone speak.” Some of the on-the-record quotes are truly hilarious if you know how to read between the political lines.
  • “This also sound shady! But no. It turns out that on Hillary Clinton’s official State Department schedule, she sometimes had private meetings and didn’t list the participants. “No known federal laws were violated,” the article says.” [Kevin Drum]
  • “you shouldn’t protest vote if you’re not willing to live with the implications of your protest, the implications, having been outlined to you by, you know, experts.” [John Scalzi]
  • Mitch McConnell on Donald Trump: “I think just kind of going from rally to rally and winging it may have worked in the primary but it’s not going work in the general.” [TPM]
  • Former Bush Administration Treasury Secretary Hank Paulson has announced he will vote for Clinton instead of Trump. I post this not because I like Paulson, but because he’s yet more evidence that establishment Republicans are continuing their movement towards Clinton. And yes, I would post stories of important people moving the opposite direction if there were any, but there aren’t. 
  • “People are people. To some extent, we’re all prisoners of the environments we were raised in and the trials we’ve been through over the course of our lives. That might call for empathy and understanding as much as it calls for censure. But one thing it doesn’t excuse is politicians and media personalities who very much know better but cynically appeal to racial sentiment anyway, either for ratings or for votes. Calling out these folks for appealing to racism—or even just tolerating it—is almost certainly useful.” [Kevin Drum]
  • “The current trends give Hillary Clinton a 7.3-point lead over the tiny fingered, cheeto-faced, ferret wearing shitgibboon (thanks Scotland, for that one!)” [Kos]
  • This is one of the reasons that Trump is having such difficulty in the general election: “Almost eight years after electing a black president, vast majorities of blacks and Hispanics think President Barack Obama at least tried to make race relations in the United States better, according to a poll released Monday. But only about half of whites think Obama made race relations better or at least tried to make race relations better but failed. Almost a third of whites said the president “made race relations worse.” [TPM]
  • Newt Gingrich on Donald Trump: “”I think he stands for an evolving process of trying to come to grips with really big problems.”
  • “Most of the Trump Baja condo buyers accused Trump and two of his adult children, Ivanka and Donald Trump Jr., of duping them into believing that Trump was one of the developers, giving them confidence that it was safe to buy unbuilt property in Mexico.” [LA Times]

On other randomness

  • As we near the 100th anniversary of the creation of the National Park system, a reminder: “every dollar invested in the National Parks generates $10 for local economies.” And yet… “There’s a record $12 billion in deferred maintenance across the parks system, leaving leaky toilets, crumbling roads and unsafe bridges at various sites, Interior Secretary Sally Jewell told reporters on a June 16 conference call.” [Bloomberg]
  • Six Million years of human history in Ten Minutes. [Kottke]

Interesting Things I Read Today

Leaving Brexit for someone else to cover…

  • “at its core, it’s the last stand of old people who have been frightened to death by cynical right-wing media empires and the demagogues who enable them—all of whom have based their appeals on racism as overt as anything we’ve seen in decades.” [Kevin Drum]
  • “The NYPD’s Office of the Inspector General has just released a statistical analysis of “broken windows” policing and concluded that there’s no evidence to support the idea — meaning that around 100,000-500,000 New Yorkers (overwhelmingly brown people) were stopped and frisked by cops every year, for more than a decade, for no evidence-based reason. “
  • Mark Cuban has made it pretty clear that he thinks Donald Trump is quite what he claims. TPM’s Josh Marshall sat down for an email interview with Cuban to discuss Trump, and the results are interesting. This was good: “I wouldn’t say broke. I would say he is afraid of spending his remaining cash.”
  • “a note from a young veteran about why serious attention to the realities of the military matters — and despite all the “Salute to the Heroes!” halftime observances, is still not taking place.” [James Fallows]
  • Robert Kagan, a high profile supporter of Presdient Bush and the war in Iraq, has apparently decided to back Hillary Clinton. As have a whole bunch of very high profile business leaders. How long until we get the “confessions of a Republican” stage of the campaign a la LBJ in 1964?
  • Sen. Mark Kirk (R-IL) is using his opposition to his party’s nominee as a central point in his campaign for reelection. And that’s likely cost less for Kirk, since Trump as yet has shown no interest in campaigning in swing states. What a bizarre election. 
  • Donald Trump has apparently decided to start raising money. His campaign is claiming $11 million, but something about the way that number is being reported seems off. His son is claiming that $6 million was raised in response to Trump’s promise to match $2 million dollar for dollar, but also that this promised sum isn’t in the total. But the rest…well…it’s really hard to say!  I guess we’ll have to wait a few weeks for next month’s filings release.
  • He’s also announced that he’s not seeking repayment for the $50 million he loaned his campaign, but has yet to file the paperwork making that promise legally binding. Maybe the campaign is just slow? That would be in keeping with most of the rest of its actions I suppose…
  • Trump is running his campaign like a real estate deal, and waht that says about the state of his campaign isn’t great.
  • “As delivered, Trump’s remarks call into question whether he has the capacity to sustain a thematic line of criticism against Clinton beyond the “Crooked Hillary” sobriquet he perfected on Twitter. Though scripted, Trump’s remarks were scattershot and defensive.” [Brian Beutler]
  • The DCCC is targeting 30 districts as part of a concerted campaign to retake the House this cycle. That….that’s an amazing sentence. 
  • “His strategy is based entirely on getting free media, but, with only one opponent, this strategy has a fatal flaw.” [Alex Shephard]
  • I for one welcome our future robot overlords! And when they come, they will be covered in hair-thin solar cells.
  • “As he looks toward the end of his term, Barack Obama is rolling out a series of initiatives to relax licensing rules. He knows he’s not going to pass transformative liberal ideas like comprehensive immigration reform or a carbon tax. So instead, he’s focusing on common sense, incremental reforms that make peoples’ lives better without raising any ideological red flags.” [Matt Yglesias]
  • “Pundits who stick to their priors even when the data tells them to abandon ship are not faring well this year.” [Ezra Klein]