John Oliver’s Segment on Jobs and Automation Doesn’t Quite Get It Right

Riley Ohlson

Riley Ohlson Vice President of Federal Gov't Affairs, AAM

John Oliver tackles some wonky issues on his HBO show, Last Week Tonight. Sunday’s episode was no exception, as he examined a topic very dear to our hearts: Automation.

And Oliver’s bit certainly garnered a lot of attention, with more than 4.3 million views on the show’s YouTube channel alone. But unfortunately, Oliver didn’t quite get it right — and given the host’s incredible reach, it’s important we clarify a few things (even if my seven Twitter followers don’t have quite the same reach of Oliver).

Oliver began by poking fun at President Trump's bluster about stolen jobs during the 2016 presidential campaign. After a begrudging admission that “some” manufacturing job loss is due to trade, Oliver quickly pivoted to automation, the phenomenon whereby industrial robots and other equipment take over parts of the production process that used to be done by humans.

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Teachers Urge Divestment from Private Prisons

Negin Owliaei Researcher, Institute for Policy Studies

It’s been just over a year since West Virginia teachers began their historic strike, kicking off a new era of education organizing. And educators across the country have spent the last several months building on the public support for protesting teachers and highlighting how dire their working conditions have become without adequate funding.

Striking teachers have shown that they’re concerned about far more than pay and benefits. The #RedForEd movement has brought issues of social justice to the bargaining table, placing their labor fight in the broader struggle for equity in their communities.

Teachers and their unions are expanding the fight for more just communities beyond contract negotiations. A recent two-part report from the American Federation of Teachers (AFT) exposes how public pensions are intertwined with some of the most harmful institutions out there — immigration detention centers and private prisons.

AFT released the first report, which identified managers that invested in immigration detention centers in August, shortly after the Trump administration adopted its family separation policy across the border. The second part, released last month, examined the companies and asset managers that profit off private prisons and mass incarceration. In both reports, the union urges trustees to divest from companies that fuel both industries — whether that be companies like General Dynamics, CoreCivic and GEO Group, which directly own and operate detention centers and private prisons, or the hedge funds and private equity firms that find other ways to profit off incarceration.

Both reports make the human rights case for divesting from prison profiteers. Private prisons and immigrant detention centers both primarily affect communities of color. And both have long been accused of human rights violations. Why should pension funds make their way to industries solely designed to lock humans up?

Those human rights issues affect how teachers work, too. Striking teachers have raised the issue of racial equity in the classroom — immigration and incarceration issues are at the top of the list of problems. AFT cites research from the Economic Policy Institute that shows the intimate connection between criminal policy and education policy. As the AFT report explains, children with incarcerated parents are more likely to develop learning disabilities and drop out of school.

“Children’s cognitive and noncognitive problems, to which parental incarceration contributes, and the concentration of children of incarcerated parents in low-income minority neighborhoods and in segregated schools, create challenges for teachers and schools that are difficult to overcome,” the EPI report says, calling for an end to the war on drugs and the mass incarceration it fuels. “How educators can add their voices to demands for an end to this war is a challenge that we should all begin to confront, if our other educational reform efforts are not to be frustrated by unjustifiable criminal justice policy and practice.”

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Trump’s rollbacks would increase CO2 emissions by more than 200 million tons annually, report finds

Ian Millhiser

Ian Millhiser Senior Constitutional Policy Analyst, Think Progress

The Trump administration’s ongoing efforts to weaken or dismantle climate efforts would increase CO2 emissions by more than 200 million tons annually, taking a severe toll on public health, according to a new report released Tuesday by the nonpartisan State Energy & Environmental Impact Center at New York University’s (NYU) law school.

Sectors responsible for nearly half of all U.S. greenhouse gas emissions are benefiting from rollbacks and weakened regulations at the expense of U.S. residents, according to the report. But state attorneys general across the country have played a key role in countering the the president’s quest to repeal or weaken several key environmental regulations.

“Donald Trump ran for president saying he was going to be a change agent and unfortunately he has. He has become an agent of climate change,” said Maryland Attorney General Brian Frosh during a Tuesday press conference to discuss the report and long-term impacts of the Trump administration’s environmental rollbacks.

“He has targeted fossil fuels not to decrease their emissions or their threat to society but to increase their emissions — it’s extraordinarily dangerous.”

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Have the Rich Always Laughed at Stiff Taxes?

Sam Pizzigati

Sam Pizzigati Editor, Too Much online magazine

The guardians of our conventional wisdom on taxing the rich have messed up — and they know it. They slacked off. They started believing their own tripe. Average Americans, they assumed, would never ever smile on proposals to raise tax rates on the richest among us. After all, the conventional wisdom maintains, those average folks figure that someday they’ll be rich, too.

But now, with tax-the-rich proposals proliferating and polling spectacularly well, the keepers of our bless-the-rich faith are panicking. Their old rhetorical zingers no longer zing.

Higher taxes on the rich as a “penalty on success”? Average Americans today don’t see “success” when they gaze up at America’s top 0.1 percent and see a 343 percent increase in earnings, after inflation, over the past four decades. They see monopoly and outsourcing and insider trading.

Some fans of grand fortune see an opportunity amid this cynicism. They’re realizing that riffing off this cynicism may be the only way to keep taxes on rich people low. Raising tax rates on the wealthy may seem reasonable, their argument goes, but high tax rates on the rich can never actually work out as intended. The rich and their paid help — their accountants and lobbyists — can always end run them.

So disregard those high tax rates on the rich in effect back in the middle of the 20th century, the argument continues. Those top rates — 91 percent in the 1950s and into the 1960s, then 70 percent through the 1970s — never made much of a difference on how much the wealthy had in their wallets.

“The overall trend is unmistakable,” pronounced John Carlson, the cofounder of the right-wing Washington Policy Center, earlier this month. “When rates were much higher, the wealthy sheltered their money and paid a smaller share of the nation’s tax bill.”

In other words, seriously taxing the rich will always be impossible. So why bother even trying?

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Record U.S. trade deficit in 2018 reflects failure of Trump’s trade policies

Robert E. Scott

Robert E. Scott Senior Economist and Director of Trade and Manufacturing Policy Research, EPI

The U.S. Census Bureau reported that the U.S. goods trade deficit reached a record of $891.3 billion in 2018, an increase of $83.8 billion (10.4 percent). The broader goods and services deficit reached $621.0 billion in 2018, an increase of $68.8 billion (12.5 percent). The rapid growth of U.S. trade deficits reflect the failure of Trump administration trade policies, as well as the negative impacts of tax cuts and spending increases, which have sharply increased the federal budget deficit, and tightening of U.S. monetary policy, resulting in upward pressure on interest rates and the real value of the dollar.

The IMF predicts that the U.S. current account deficit—the broadest measure of U.S. trade in goods, services, and income—will nearly double between 2016 and 2022. Unless these trends are offset by a rapid decline in the value of the U.S. dollar, rapidly rising trade deficits could be devastating for U.S. manufacturing, likely giving rise to massive job loss on the scale experienced in the 2000–2007 period, when 3.5 million U.S. manufacturing jobs were lost.

The U.S. goods trade deficit with China reached a new record of $419.2 billion in 2018, up from $375.6 billion in 2017, an increase of $43.6 billion (11.6 percent). United States trade with China is dominated by the deficit in manufactured products. Although the United States has imposed tariffs of 10 to 25 percent on $250 billion in imports from China (about half of total U.S. imports from that country), China has played its ‘ace-in-the-hole’ by allowing it’s currency to fall by roughly 10 percent against the dollar. As a result, the U.S. trade deficit with China increased faster (11.6 percent) than the U.S. deficit with the world as a whole (10.4 percent). While the United States and China are poised to negotiate a deal to end their trade dispute, the proposed deal amounts “much ado about nothing much,” as Paul Krugman puts it. It will do little to reduce the massive imbalance in U.S.–China trade flows.

The vast bulk of the U.S. goods trade deficit in 2018 was explained by trade in non-petroleum products, which are dominated by manufactured goods. The trade deficit in non-petroleum products reached $825.4 billion in 2018, an increase of $91 billion (12.4 percent). The United States had a small trade surplus of 26.5 billion in agricultural products in 2018 (this sector is part of trade in non-petroleum products). The agricultural trade surplus declined by $2.4 billion in 2018 (8.3 percent), as a consequence of trade restraints in China and elsewhere, and the rising dollar. The United States had a trade surplus in services which increased from $255.2 billion in 2017 to $270.2 billion in 2018, an increase of $15.0 billion (5.9 percent). However, the growth in the services surplus was more than offset by the $83.8 billion increase in the goods trade deficit; thus the overall goods and services deficit increased by $68.8 billion (12.5 percent) in 2018.

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What’s Worse Than Ticket Scalpers? Stock Scalpers.

Sarah Anderson Co-Editor, Inequality.org

nternet bots immediately snapped up Beyonce’s presale tickets last year. And when the resale price rose above $1,000, the Beyhive was mighty peeved.

Ticket scalpers are indeed frustrating. But their Wall Street cousins — what UMass-Amherst professor Douglas Cliggott calls the “stock scalpers” — are far more dangerous.

Like online ticket scalpers, these financial predators use advanced technology to cheat the rest of us. For huge sums, they buy the privilege of locating their computer servers as close as possible to market exchanges. This allows them to get trading information a split-second faster than traditional investors.

So when a mutual or pension fund makes a trade, the stock scalpers see that trade on its way to the market. “They hop in front of it, buy it, and bid up what we want to buy and sell it back to us at a higher price,” explains Cliggott, a former JPMorgan Chase managing director.

The scalpers do this thousands of times a day, using computers programmed with algorithms that have no connection to the real economy. This “high frequency” trading makes up the majority of today’s market activity.

Many financial experts, including a former CFTC chief economist, have warned that high speed trading siphons profits from traditional investors. For the minority of U.S. workers who have any money at all in a retirement fund, that’s a bigger problem than missing out on a Beyonce concert.

Even more disturbing is the risk the high-speed traders pose for the global financial system. John Fullerton, another former JPMorgan Managing Director, points out that high frequency traders vanish from the market in a flash in times of crisis. “This can trigger a cascading effect as real money investors pull back in self-defense and at times flee in panic,” explains Fullerton, who currently leads the Capital Institute.

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When will ‘Buy American’ really mean buy American?

Owen E. Herrnstadt Chief of Staff to Director of Trade and Globalization, IAMAW

Our government’s procurement policy falls far short of its potential to encourage and support good jobs in domestic manufacturing. We need to strengthen domestic sourcing requirements for publicly funded programs, including those intended to repair our failing infrastructure. While the recently issued “Executive Order on Strengthening Buy-American Preferences for Infrastructure Projects” is an improvement over the status quo, it falls far short of making the substantive improvements that are needed to make sure that “Buy American” actually means buying American.

To begin, the EO does nothing to strengthen domestic content requirements that agencies use to determine if a good is “domestically sourced”—that is, actually made in the United States. Many Americans would be startled to learn that a product requires only 51 percent U.S. content to be considered domestically made under the Buy American Act, which applies to federal government procurement. This does not even take into account the substantial transformation test, when a product is deemed domestic even if it is “made at least in part from materials manufactured in another country,” a special concern for the federal government’s procurement of the equipment and construction materials that are required for infrastructure projects.

In contrast, the Federal Trade Commission requires that the entire product be made substantially domestically in order to satisfy its definition of “Made in the U.S.A.,” although much more must be done to ensure that the FTC rules are effectively enforced.

The EO also fails to address key questions about how to calculate domestic content. Are intangible items such as patent rights and research and development included in the calculation? How are materials valued? Is the origin of components and subcomponents considered, and if so how? Are executive salaries and benefits included? Is there a uniform policy on implementing domestic content requirements throughout the federal government? If not, why not? Is each federal agency left to make up its own way of calculating content?

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As Lordstown GM’s Last Car Rolls Off the Line, 1,400 Jobs Disappear

Cathalijne Adams

Cathalijne Adams Writer/Researcher, AAM

General Motors’ (GM) Lordstown Township plant’s first car, a Chevrolet Impala, cruised onto the road on April 28, 1966, and decades of work at the plant followed. But on Wednesday, the plant’s last car rolled off the assembly line, 1,400 jobs came to an end, and entire community suffers in their wake.

One of five GM plants that will be idled, Lordstown shut down production. Though 700 Lordstown workers have transferred to other GM plants, many are unable to uproot their families and have been left to search for new employment.

For GM executives like CEO Mary Bara, the closure of plants like Lordstown represents a shifting of gears to accommodate emerging automotive trends. But the human toll of the decision to unallocate plants is very real.

When family-supporting manufacturing jobs leave a town, few workers, particularly those without a college degree, can find employment that can replace these valuable jobs, as this Washington Post article illustrates.

GM production workers can earn between $61,000 and $88,000 annually. In stark contrast, the average salary in the area surrounding the Lordstown plant was only $38,000 in 2017.

With few employment options left in Lordstown, some workers are holding out hope that United Automobile Workers’ (UAW) labor contract negotiations with GM this fall will bring new production to the Lordstown plant. (UAW is currently also in the process of suing GM for stopping production at three plants before labor contracts expired.)

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A brief, 90-year history of Republicans calling Democrats ‘socialists’

So, this happened.

This is not the first time, and it won’t be the last, that the Republican Party tried to associate its opponents with socialism — the belief that the government should take control of the means of production. President Donald Trump used his recent State of the Union address to claim that “here, in the United States, we are alarmed by new calls to adopt socialism in our country.” Vice President Mike Pence told the Conservative Political Action Conference last weekend that “America will never be a socialist country.” Senate Majority Leader Mitch McConnell, in an opinion piece that could win Pulitzer Prize for its outstanding contribution to the field of false choices, writes that America “needs strong borders — not socialism.”

To be fair, the lines between “socialism” and other forms of government are often blurred. Sen. Bernie Sanders (I-VT), for example, sometimes describes himself as a “socialist,” despite the fact that he does not advocate public ownership of the entire productive sector.

Nevertheless, the GOP has a long history of making facile comparisons between ordinary Democratic policy proposals and “socialism” — a history that predates Sanders by generations. Indeed, the socialism smear even predates our modern-day political coalitions, with the Republican Party commonly understood as the economically conservative party and the Democrats as economic moderates and liberals.

The socialism smear shaped the modern GOP. The idea built its coalition, defined many of its objections to the Democratic alternative, and helped form the partisan divide that is so familiar today. The socialism smear targeted the New Deal. It was Ronald Reagan’s weapon against Medicare, Newt Gingrich’s weapon against “Hillarycare,” and the entire GOP’s weapon against Obamacare.

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To Reduce Inequality, Let’s Downsize the Financial Sector

Dean Baker

Dean Baker Co-Director, Author, Center for Economic and Policy Research

Matt Bruenig — the president of the progressive, grassroots-funded People’s Policy Project think tank — put forward a creative set of policy proposals last month on child care and family policy under the title of the Family Fun Pack. It prompted a major discussion in progressive circles on child care policy, helped in part by Sen. Elizabeth Warren’s important proposal in this area that was released the next week.

In the hope of prompting the same sort of debate on policy directed toward the financial sector, I am putting forward the “Finance Fun Pack.” While the full list of policies to rein in finance would be far more extensive, this one has three main components:

  1. A modest tax on financial transactions;
  2. Complete transparency on the contract terms that public pension funds sign with private equity companies; and 
  3. Complete transparency on the contract terms that university and other nonprofit endowments sign with hedge funds.

The goal of these policies is to have a smaller and more efficient financial sector. They are also likely to reduce the opportunity for earning huge fortunes in the sector. People looking to get fabulously rich will instead have to do something productive.

A modest tax on trades in stock, bonds and derivatives (like options, futures and credit default swaps) can raise a large amount of money while making the financial sector more efficient. According to the Congressional Budget Office, a tax of 0.1 percent on trades, as proposed in a new bill by Sen. Brian Schatz, would raise close to $100 billion a year or 0.5 percent of GDP.

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