In his op-ed at the New York Times in defense of international trade, history prof Adam Tooze observes:

To think, as Mr. Trump appears to do, of nations locked in mortal economic rivalry shows a grave misunderstanding of how competition actually works in the global economy. Competition is, of course, an ordering principle. If neoliberalism is about anything, it has been about creating the largest possible economic space for competition. But the protagonists aren’t supposed to be states (or at least not members of the Atlantic club) but businesses, investors and workers.

It is the job of trade and investment treaties to regulate what preference can be shown to national firms, what rights will be extended to foreign investors. The European Union boasts of particularly tough internal regulations in this regard. National preference is outlawed as far as possible.

Over recent decades, these principles of international organization have come to be entrenched in transnational production systems that make nonsense of economic nationalism. Owning a Ford truck is an instantly recognizable statement of Americanism, but barely half of its components are sourced in North America. Buy an icon of Americana, and your money ends up all over the world.

This interconnection cuts both ways. We hang together in sickness as well as in health. It is not just manufacturing but finance too that is integrated across borders. When the real estate bubble burst in 2008, European as well as American banks imploded. To keep them alive, the U.S. Federal Reserve provided liquidity running into the trillions of dollars both to their branches on Wall Street and by way of the liquidity swap lines extended to the Bank of England, the European Central Bank, the Bank of Japan and the Swiss National Bank. The Fed took this extraordinary step because previous decades had built a system of integration so close that it would have been lethal for the United States not to act. Saving the American financial system meant saving Europe’s banks, too.

But that is too superficial a consideration of what’s happened. What has actually happened is that the United States has decreased its share of manufacturing, offshoring a considerable proportion of its heavy and light manufacturing to Japan, China, and South Korea, and increased its share of the financial services business. The former reduced the number of relatively high-paying manufacturing jobs by the millions, replacing them with low-wage service jobs or nothing at all, while the latter increased the wealth and income of a relatively small number of already-rich financiers.

Additionally, he shows little understanding or recognition of the role that a fiat currency plays in our present model of international trade. Consider that China, Japan, South Korea, and Germany all hold dollar reserves far in excess of World Bank guidelines.

He also fails to take into account smaller stakeholders in international trade, the scores of smaller, developing countries whose economies are gravely injured by large American and European agricultural subsidies and Chinese manufacturing and export subsidies alike.

I agree with Dr. Tooze’s basic premises—that there’s far too much talk of international trade as a zero-sum game, particularly by the Trump Administration, that free and fair trade could be beneficial to all parties, and that Europe is actually a pretty good trading partner. But reality must intrude somewhere and that’s where I think that Dr. Tooze’s op-ed falls short.

My wife and I are Amazon Prime Members (did anybody find anything worth buying on Prime day? Me, neither). Amazon Prime Video certainly has an odd collection of old TV programs in its collection. Lately I’ve taken to watching some of them.

I never watched Peter Gunn when it was originally broadcast. I never watched it in reruns or syndication. Maybe I’d catch a few moments while channel-surfing but that was about it. Lately I’ve started watching it.

Peter Gunn, created and produced by Blake Edwards, ran from 1958 through 1961 and was unquestionably one of the coolest programs ever to appear on television. A good part of that is its music, composed by Henry Mancini. Before his Oscars, Grammies, and other awards Henry Mancini composed music for Blake Edwards’s television programs. If Peter Gunn was not his first credited score, it was darned close to it.

There’s a sort of musical formula to Peter Gunn episodes. They all open with a segment featuring little or no dialogue, solo jazz string bass, snare drum and brushes. If the segment goes on long enough, they’re joined by clarinets, then muted horns. Then the boogie-blues horn-heavy Peter Gunn theme breaks in. The underscoring throughout most of the episodes leans on a jazz combo with lead vibraphone. Very cool.

Something else notable about Peter Gunn: it had a few recurring parts for black actors and some featured appearances by black actors, a rarity in the 1950s. For example, the program’s second episode featured Leigh Whipper, a rather important person. It was his last television or movie appearance. He was in his late 70s at the time. Mr. Whipper was one of the first black members of Actor’s Equity (maybe the first) and originated the part of the Crab Man in Porgy and Bess. He had more than a dozen Broadway performances to his credit including in Of Mice and Men and The Shrike. He was noted for the great dignity and authenticity of his performances.

Here’s Adam Garfinkle’s assessment of Presidents Putin and Trump’s joint press conference in Helsinki last week from his post at The American Interest:

But nothing about the 2014 targets was as bizarre as Donald Trump’s post-summit press conference this past week. As is by now well known, he suddenly demanded that the 2 percent target not wait until 2024 but be accomplished this year, or maybe next—it was not entirely clear. And why stop at 2 percent? He demanded 4 percent, which, he claimed, was the U.S. number. This performance may be likened to a jack-in-the-box popping out at the end of a funeral service. Somber and sad as was nearly all that preceded it, the President closed the summit on a surreal note, leaving observers wondering what it all meant.

Trump doubtless does not know that U.S. defense spending only tips out at 4 percent of GNP when one includes the rather large budget of the Veterans Administration—which is of course separate from the DOD budget and the defense-related parts of the DOE budget. But this is a man who never lets a fact get in the way of an insult or a provocation. And so while the topic was an old one—European defense spending dereliction—the tone and actual substance of the remarks could not have been more different, which brings us back to where we started: This was not your father’s, or even your elder sister’s, NATO Summit.

The post also includes a more or less first person history of our issues with the low level of commitment by our NATO allies over the period of the last 40 years.

I don’t care whether our NATO allies spend 1% of GDP, 2% of GDP, or 10% of GDP on defense. I care about what their spending buys for them. It is well known that Germany cannot presently field a single combat division. It is not merely obvious that Germany doesn’t spend enough, it is insulting. France’s 1.8% of GDP enables it to maintain operations for a few hours or days. Their readiness clearly falls short as well, although not as drastically as Germany’s.

If NATO is to remain a military alliance, there needs to be a common understanding of what its essence, the Article 5 commitment:

The Parties agree that an armed attack against one or more of them in Europe or North America shall be considered an attack against them all and consequently they agree that, if such an armed attack occurs, each of them, in exercise of the right of individual or collective self-defence recognised by Article 51 of the Charter of the United Nations, will assist the Party or Parties so attacked by taking forthwith, individually and in concert with the other Parties, such action as it deems necessary, including the use of armed force, to restore and maintain the security of the North Atlantic area.

Specifically, what does that mean? If it means that if Estonia is attacked, Germany and Poland will come to its aid, it’s one thing. If it means solely that the U. S. will come to its aid, it’s something else again entirely and one that demands reflection.

Right now it pragmatically means that the U. S. will come to Estonia’s aid.

I think that these paragraphs in a post by Matthew Blood on negotiations between Putin and Trump at Small Wars Journal form a pretty good primer international relations:

At its most basic level, diplomacy is about employing the tools of statecraft to achieve desirable objectives usually called “national interests” – things that advance the security of the United States and its allies. The national interests of the world’s leading global superpower are numerous and broad, and different interests can and do regularly conflict with one another in any given situation, necessitating hard choices about strategic priorities and unavoidable tradeoffs.

Relationships with other countries, whether allied or hostile, are a means to achieving objectives that advance American interests. Those relationships have no moral content in their own right, only utility toward the realization of larger purposes. A personal friendship with the leader of an adversarial country waging a war of aggression in Europe that has killed 10,000 people to date means little if it fails to influence that country’s behavior in the war.[11]

The United States ultimately has only the most limited influence over whether or not a given country adopts an a priori posture supportive or hostile to core U.S. interests like the integrity of American elections or the prohibition on the seizure of other countries’ land and resources by military force. The specific American national interests at stake in the contested U.S. relationship with Russia are myriad and wide-ranging, and Trump variously mentioned a number of them both before and during his summit with Putin while conspicuously overlooking others.

It seems to me that there are multiple aspects of gaining such influence. There’s the well known “carrots and sticks”, for example. Neither tend to be very effective when dealing with a major power. Might that be because they have interests of their own? When you have failed over a period of years to gain any influence and, indeed, have increased hostility might stopping your pursuit of goals inimical to the interests of your interlocutor be worth a try when doing so does not harm your own interests?

Mr. Blood does not think that the prospects for negotiations between Trump and Putin are very bright:

If diplomacy was as easy as President Trump seems to assume, dangerous disagreements between the United States and Russia or China or Iran or North Korea would have been resolved long ago. Hard cases persist because they are hard. Actual national interests almost universally matter more than personal relationships in contested bilateral relations between countries.

and

Famously ignorant of history and policy, President Trump likely fails to grasp the wider strategic implications of his own improvised diplomacy of “getting along.” To take just one example, consider China’s construction of artificial island military bases in the South China Sea, which amply demonstrates its eagerness to use force in the resolution of its numerous other territorial disputes with neighbors like Taiwan as China rises to global superpower status.

In the current context, establishing a “good relationship” with Russia as American interests around the world remain under attack from an ongoing Russian campaign of hybrid warfare is flatly damaging to U.S. national security interests. Both the Bush II and Obama administrations eventually reverted to strategies aimed at punishing and deterring Russian aggression.

He includes a bill of indictment against President Putin and Russia:

They did so, for instance, before Putin rigged Russia’s 2011 elections;[18] invaded Ukraine; annexed Crimea; shot down the civilian airliner Malaysia Airlines MH17 with nearly 300 international passengers on board; gunned down Russia’s most important democratic opposition leader, Boris Nemtsov, just outside the Kremlin; launched a military campaign in partnership with Iran to shore up the murderous Syrian dictatorship; flattened Syrian cities with Russian airpower; attacked an American military base in Syria with Russian mercenaries;[19] deployed chemical weapons in assassinations on British soil; supplied arms and cash to the Taliban to kill American and Afghan soldiers and civilians;[20] carried out attempted coups in Montenegro[21] and Serbia;[22] and launched wide-ranging covert actions and information warfare operations targeting democratic elections in the United States, the United Kingdom, France, Germany, and elsewhere across Europe.[23] The list could go on.

and, indeed, it sounds pretty damning.

I do have a question for Mr. Blood. Over the period of the last 25 years how would a United States committed to a “rules-based, liberal world order” have behaved? Differently, no differently?

I found this sentence in a Reuters article by Andrew Osborne about Putin, NATO, and the two former Soviet republics of Georgia and Ukraine significant:

Under NATO rules, countries with territorial conflicts cannot join NATO.

Let’s consider a hypothetical example. Let’s say you were a country that very much did not want countries on its borders to join NATO. What would you do?

I wanted to remark on the editors’ of the Washington Post’s recent editorial about asylum-seekers. Before I do I probably should stake out my position.

I think that we should accept more refugees than we do—closer to the Obama Administration’s cap of 110,000 than to the Trump Administration’s cap of 50,000. That’s consistent with the international accords to which we are signatory. We have an obligation to accept refugees; we don’t have an unlimited obligation to accept refugees.

I also think that societies have carrying capacities for the number of immigrants they can accept without political turmoil. I think that capacity is around 15%. We don’t really know what percentage of the U. S. population is composed of immigrants. It may be as low as 14% but, since the number of illegal immigrants in the U. S. is estimated at anything between 10 million and 30 million, it could be higher.

Said another way, accepting more refugees will require us to accept fewer non-refugee immigrants, whether legal or illegal.

Now back to the editorial. They open with a statement that I believe is unquestionably true:

THE CRISIS involving migrants fleeing violence in Central America, seeking sanctuary in the United States and overwhelming American immigration courts is real. The Obama administration was flummoxed by it when the numbers of women and unaccompanied children crossing the border spiked in 2014.

following that with a statement that may or may not be true:

The Trump administration, predisposed against immigrants of almost any kind, has responded to it by means of outright cruelty, splitting up families to deter migration , shattering the lives of children and parents in the process.

I’m referring to the clause I’ve highlighted. The”almost” bothers me. It smacks of “no true Scotsman”. The entire statement may be true. It may be untrue. How would one go about proving it empirically?

They continue:

That outrage doesn’t diminish the urgency of dealing with the waves of Central Americans flooding northward. What would constitute a reasonable, humane and legal response?

Fair enough. What would?

One option examined by the Obama administration, and now being pursued more actively by the Trump administration, is to push the problem to Mexico. The idea is to strike a bilateral deal requiring migrants to seek protection by applying for asylum there rather than here. In theory, it makes some sense; Europe pursued a similar deal with Turkey in 2016, at a cost exceeding $6 billion, to stanch the flow of refugees from Syria.

That actually makes a substantial amount of sense. Travel alone is dangerous in itself; I suspect that approach would be less expensive than accepting a substantially larger number of refugees since refugees are immediately eligible for certain federal benefits. However, the editors oppose it:

In practice, it is a terrible idea that would subject migrants from Central America and elsewhere to further violence and danger, and probably do little to curb illegal immigration to the United States.

In 2002, the United States and Canada secured a similar arrangement, known as a “safe third country” agreement. It has worked because Canada is, in fact, a safe third country: Migrants who apply for asylum there are secure, and their cases are fairly adjudicated.

By contrast, Mexico is patently unsuitable as a place of refuge for most migrants, especially those from Central America, who suffer exploitation, violence and sexual assault almost routinely as they make their way north. In a recent report, Doctors Without Borders noted that two-thirds of Guatemalan, Salvadoran and Honduran migrants in Mexico have reported being victims of violence; almost a third of migrant women there had been sexually assaulted. Twelve of the world’s 50 most violent cities are in Mexico.

And four of the “world’s 50 most violent cities” are in the United States, despite our spending several orders of magnitude on law enforcement than Mexico does. That sounds like an argument for barring refugees from the U. S. for their own good.

Additionally, I have a cavil about the way that the editors are playing fast and loose with the terms “migrants” and “refugees”. A better term to use throughout would be “asylum-seekers”. Presently, something between 50,000 and 100,000 people are applying for asylum annually. About 10% of those applications are actually granted. The definition of refugee in the accords to which the U. S. is signatory is:

A person who owing to a well-founded fear of being persecuted for reasons of race, religion, nationality, membership of a particular social group or political opinion, is outside the country of his nationality and is unable or, owing to such fear, is unwilling to avail himself of the protection of that country; or who, not having a nationality and being outside the country of his former habitual residence as a result of such events, is unable or, owing to such fear, is unwilling to return to it.

It is obvious that women fleeing their husbands or individuals fleeing crime aren’t refugees under those terms. The American judges who have determined otherwise are engaging in egregious legislation from the bench. If we wish to extend our definition of “refugee”, we should do so by the ordinary legislative process rather than by executive or judicial fiat.

I find this extremely condescending and patronizing:

Forcing refugees to seek sanctuary in Mexico would thrust tens of thousands of them into a country with weak law enforcement, a flimsy judicial system, an anemic asylum process and predatory criminal gangs.

If Mexico is in a state of chaos and unable to live up to its international obligations, then we have a problem with Mexico and we should take it up with Mexico. The choice is between a Westphalian order in which Mexico is a sovereign equal of the United States or one in which Mexico is a client of the United States.

I actually agree with their conclusion:

Rather, the right response, and the one most likely to succeed in the long term, is for the United States to redouble efforts to strengthen governments and fight the lawlessness that has seized Central America’s refugee-producing countries.

I wish they had fleshed out how we would go about doing that.

I think we need to look ahead. The economy of the U. S. is considerably different from what it was in 1970. In 1970 agriculture employed 4.6% of the labor force; today it’s about 1%. In 1970 about 20% of Americans were employed in manufacturing; today it’s about 10%.

The number of asylum-seekers will only grow over time. Most will not be engineers, accountants, or physicians. Demographics suggest that they will be speakers of languages which most Americans do not understand, i.e. neither English nor Spanish. Increasingly, they will be poorly prepared to thrive in the post-industrial society we have become and will be in competition with our own native population struggling to survive in a post-industrial society whose wages have been stagnant for a generation.

At RealClearMarkets Jeffrey Snider takes note of the tenth anniversary of the financial crisis that brought about the Great Recession:

Using subprime as an excuse meant making a monetary event seem like something else, an exogenous factor beyond the scope of monetary policy. Irresponsible lending practices sounds just plausible enough to keep anyone from seeking the right answers, and maintaining Economists in the business of political authority. Inertia.

So, ten years later we still wait for recovery having supposedly avoided “the collapse of the global financial system.” In every one of those years the Federal Reserve Chairman appears in front of Congress, twice at each House, and declares how the economy is getting back to normal – only to be overshadowed by more events that equally have nothing to do with subprime mortgages.

Many people now speak of the US economy in particular as if it is booming. They do so, however, from only one piece of evidence: the unemployment rate. The number itself is uncorroborated by any other data, especially wage growth, therefore in the absence of corroboration it is supplemented by a plethora of anecdotes. Most of them either refer to some imagined labor shortage (again easily refuted by wage and income data, income data which declares rather than suggests alarmingly decelerating labor markets to nearly nothing the past three years, including every month so far of 2018) or the idea of globally synchronized growth.

This latter concept is actually based on the belated acknowledgement that something hasn’t been right about the world’s economy since, well, July 2008. In 2017, for the first time all the major systems were positive at the same time. How tiny little subprime managed to keep them from accomplishing this “feat” for a decade is another huge mystery.

Our economy doesn’t need more regulation, less regulation, additional stimulus, higher taxes or lower taxes. It needs a 12 Step Program. We haven’t even acknowledged that we have a problem yet.

Illinois receives quite a bit of attention these days, almost always critical. If it weren’t so well-deserved, I’d start feeling persecuted. In this instance the editors of the Wall Street Journal point to a recent study of public employee pensions:

In a novel analysis, the Illinois-based policy outfit Wirepoints compared the growth of state pension liabilities relative to state GDP and fund assets. Most studies have examined “unfunded” pension liabilities, which is the difference between current assets and the present value of owed benefits. But this obfuscates the excessive pension promises that politicians have made.

According to the study, accrued liabilities—how much states are on the hook for—between 2003 and 2016 grew more than 50% faster than the economies in 28 states and more than twice as fast as GDP in 12 states. Leading the list are the usual suspects of New Jersey (4.3 times faster than GDP), Illinois (3.23) and Connecticut (3.18), as well as New Hampshire (3.46) and Kentucky (3.08).

Between 2003 and 2016, New Jersey’s pension liability ballooned 176%. Unions blame lawmakers for not socking away more money years ago, though lower pension payments helped them bargain for higher pay. The reality is that New Jersey’s pension funds would be broke even had politicians squirrelled away billions more.

Ditto for Illinois, where the pension liability has grown by 8.8% annually over the last 30 years. Yet when the Illinois Supreme Court in 2015 blocked state pension reforms, the judges rebuked politicians for inadequately funding pensions. The solution, according to unions, is always to raise taxes. But no tax hike is ever enough because benefits keep growing faster than revenues.

It probably didn’t help that the Blagojevich Administration had a very bad habit of withholding payments into the state’s public employee pension funds and using the proceeds to increase public employees’ wages, thereby reducing the state’s ability to pay and its liability at the same time.

That 8.8% per year over 30 years is an eye-opener. I’d like to have received that. I haven’t received a raise in four years and I get the impression that annual increases are a thing of the past. Illinois’s situation is particularly aggravated because the state’s population is declining. Every year fewer people are responsible for paying higher state expenses.

I’ve phrased this problem a little differently. I think that the demands of public employees for higher wages need to be moderated based upon the ability to pay of the communities they serve. It makes not a whit of difference if a teacher, police officer, or clerk could make much more money as a lawyer working for a top law firm, a physician, or a financier working for Goldman-Sachs. Sidley Austin and Goldman-Sachs aren’t paying their salaries and pensions and there’s no way to enlist them in doing so. The dwindling populations of Chicago, Peoria, and Rockford are.

Heartened by a recent court decision, the editors of the Washington Post comment about a proposed census question on citizenship:

A lot of federal funding is distributed based on states’ total population. So are congressional seats. Adding a citizenship question on a form sent by an administration explicitly hostile to migrants is highly likely to depress response rates among immigrants, even those who have naturalized. This would make urban centers in blue states look less populous and, therefore, less deserving of money and representation.

Instead of continuing to contest the lawsuit, Mr. Ross should eliminate the new question.

This is a thorny issue with multiple strands. Let me try to untangle them.

Although the first census of 1790 asked only the questions necessary to satisfy its constitutional mandate, within a generation of that census in 1820 the census asked about occupation as well. Over the years the census has asked questions about race, place of birth, occupation, and income, just to name a few. Asking these questions has been upheld in the courts, presumably as long as they served a legitimate government interest.

The reach of the federal government is so great these days it’s a bit hard to imagine a question that does not serve a legitimate government interest. The stated interest in this particular case is to get a better handle on the number of eligible voters which sounds like a legitimate government interest to me. This particular question is being challenged on the grounds of animus which raises a troubling question. Does the legitimate exercise of executive power in pursuit of a legitimate government interest become illegitimate by virtue of it also serving a political agenda or through personal animus?

I don’t know the answer to that question but I do find it troubling, since it suggests that the nature of the law depends on who you are. Philosopher-kings are in short supply. In their absence we attempt to craft the law so that it doesn’t matter who enforces them as long as they do enforce them.

We could also limit the harm that could be done by unscrupulous individuals’ exploitation of legitimate laws for illegitimate purposes by limiting the reach of the federal government but that’s just crazy talk.