At a fundraising dinner last Wednesday, President Trump boasted to supporters that he told Prime Minister Justin Trudeau of Canada that the U.S. ran a trade deficit with his country without knowing whether the assertion was true.
It’s not. Though news coverage of the incident focused on the fabrication, the lie, which by now one expects from Trump, also shows that the president cherry picks the trade that he recognizes. And in the calculus of Trump, goods trump services.
As it happens, the U.S. runs a trade surplus with Canada. On the whole, Canadians buy more from us than we buy from them. Though Americans purchase more goods – think vehicles, machinery and plastics – from Canadians than they buy from us, they buy more services, including software, movies and travel, than Americans buy from them.
A similar dynamic holds for China, which Trump also likes to jawbone about trade. As I’ve noted previously, the U.S. imports more goods from China than it exports, but it exports more services to China than it imports. The difference was $37 billion in 2016, up 12.3% from year earlier.
To be sure, the deficits in goods are real. But for Trump, the hammering on trade deficits – regardless of facts – plays to a political base in the Rust Belt, where, apparently, the president has concluded he needs to shore up his base in the hope of reelection.
But the focus disregards the economic well-being of millions of Americans elsewhere. And it’s not just in the so-called blue states such as California or New York that house many of the software, entertainment and financial firms that trade in services.
Canada represents the largest export market for U.S. agriculture. Senator Pat Roberts, a Kansas Republican who chairs the Senate Agriculture Committee, says Trump’s proposed tariffs and threats to abrogate the North American Free Trade Agreement show a preference for the Rust Belt over the Farm Belt. “I think he’s looking at the Rust Belt primarily,” Roberts told Bloomberg.
On Saturday, the world’s economic powers, with the exception of the U.S., affirmed their commitment to the Paris climate agreement and pledged to work together to tackle challenges in areas ranging from trade and terrorism to migration.
President Trump left the annual meeting of the G-20 without committing the U.S. to those shared goals. “We take note of the decision of the United States of America to withdraw from the Paris agreement,” the G-20 leaders wrote in a statement issued on Saturday. “The leaders of the other G-20 members state that the Paris agreement is irreversible.”
America may still have its military might and economic might, but influence comes from leadership. “Most presidents understand this intuitively,” Derek Chollet and Julie Smith noted on Friday in Foreign Policy. Most presidents includes presidents of both parties.
Of course, we are told the whole point of Trump is to deride the establishment, at home and abroad. By that measure, he has succeeded. But by any measure, we live in a many-sided world. And that’s not fake news.
Focusing solely on the sum of goods and services produced within their borders cannot alone reduce the inequality that plagues the economies of countries throughout southern Africa, a report published by Oxfam International concludes.
Despite periods of economic growth during the past two decades, the benefits have yet to reach the poorest in countries such as Swaziland, Nigeria, Namibia and South Africa, notes Oxfam, which adds that the inequality falls most heavily on women and young people.
“The shape of many of the continent’s economies – characterized by an overreliance on the extractive sector, inadequate investment in agriculture and large informal sectors – has meant that the consequences of inequality have mostly been felt by the young and by women,” concludes Katy Wright, author of the report, which was released in the run-up to the recent World Economic Forum on Africa. “Instead of focusing solely on GDP and hoping to tweak it to make it more inclusive, leaders should focus directly on reducing inequality and eliminating poverty, in ways that lead to economic prosperity for all.”
“These aims should be placed above GDP growth – not because growth is unimportant, but because poverty and inequality represent the most significant barriers in Africa to achieving sustainable and inclusive growth,” she adds.
Swaziland has the greatest inequality in the world, followed by Nigeria, Namibia and South Africa, notes Wright (below chart). Oxfam found recently that three billionaires in South Africa have the same wealth as the bottom 50 percent of the population.
The 20 most unequal countries in the world, using raw and adjusted Gini measurements
Across Africa, up to three-quarters of women work in the agricultural, low-paid and informal sectors, notes Wright, who adds that women who work in manufacturing, services and trade earn about 70 percent of that of their male counterparts.
The continent also has yet to deliver jobs to a majority people under the age of 24, who, she notes, have the potential to drive economic prosperity with the right investments and policies. In South Africa alone, more than half of all young people are likely to be unemployed.
The report recommends that countries boost their tax-to-GDP ratios to at least one-quarter, including reducing tax avoidance and “enhancing capacity to collect taxes from highly paid individuals and large firms.”
According to Oxfam, governments also must meet commitments to spend a fifth of their national budget on education and 15% of their budgets on health, and “make explicit plans to reduce poverty and eliminate inequality” in line with the United Nations Sustainable Development Goals, a series of 17 goals that aim to end poverty, protect the planet, and promote peace and prosperity.
Apple said last week that it earned $18 billion in the holiday quarter, up 38% from a year earlier, further cementing the computer maker’s place in the annals of business.
The Cupertino-based company earned more than nearly 90% of companies in the S&P 500 index each made in total profits since 2009, The Wall Street Journal reported.
Apple could distribute $556 to all 320 million Americans, commented ReCode, which called the results a “blowout.”
Writing in the Times, James Stewart observed that Apple earned “more than any company ever in a single quarter.”
Much of the profit came from sales of the iPhone, which accounted for 69% of Apple’s revenue. “Demand for iPhone was staggering,” Apple CEO Tim Cook told analysts. “This volume is hard to comprehend.”
Apple sold 74.5 million iPhones in the quarter at an average price of $687 apiece, or about $50 higher than a year earlier, according to the Journal. Much of that reflects the love consumers are showing the iPhone 6 and iPhone 6 Plus. During the quarter, Apple sold 34,000 iPhones every hour of every day.
I’m citing these measures because for the past six months I’ve admired Apple’s creating a phone with a display whose size rivals smartphones from Samsung. As the Journal noted, “strong iPhone sales helped Apple claw back market share that it gave up to Samsung… in the past three years.”
Apple saw Samsung succeeding with bigger screens, so Apple made an iPhone with a bigger screen. I imagine that’s what MBA’s learn to do – to co-opt something that appears to be working for your rival – but the fact that Apple succeeded at it seems like a testament to the smarts, strategy and skill of Cook and his team.
What’s more interesting is the idea that Apple also is making room for the company’s watch, which is slated to ship in April. Quartz cites a tweet by Paul Kedrosky, a financial commentator, who notes that Apple’s introduction of the iPhone 6 and iPhone 6 Plus has created a “portability deficit” that in turn will make room for sales of the watch.
Still, two experiences I’ve had recently point to a problem with the move to macro and the design of smartphones generally. Last weekend I sold my iPhone 6, which proved to be too large for both my hand and my pocket. The phone felt uncomfortable in my hand compared with my iPhone 5c And note, my hand is medium size; I wear a size large glove. Plus, the plastic shell that encases the 5c allows the device to absorb my dropping it, which happens to lots of us, judging by all the cracked iPhone displays you see people holding and the offers by Radio Shack and others to replace glass.
Of course, as Apple’s earnings show, people love the larger phones. Within 30 minutes of my posting my iPhone 6 for sale on Craigslist, at least 15 people contacted me with offers to buy it. Yet weirdly, or not so weirdly, I’m happier with my 5c.
The other anecdote occurred Wednesday aboard the 3 train, where a woman of about 30 sat next to me. She juggled on her person an array of things, including a pink leather handbag and a black bag that she balanced on her lap. In her left hand she held a travel coffee mug, one of those that’s a ceramic version of a paper coffee cup but with a rubber lid that fits snugly. Hers had pink lipstick prints affixed to it. (The print was the same shade as the handbag.)
In her right hand the woman held a white iPhone 5s tuned to Spotify. She might have listened had she been able to retrieve and disentangle a set of earbuds from her left coat pocket without spilling the coffee, which she balanced momentarily between her knees the best one can while wearing a wool coat that extends to the thigh. Twice the woman tried to unbraid the earbuds, dropping them once before giving up entirely and shoving them back into her pocket.
Of course, the subway and, I suspect, every mode of public transportation in America, brims with people tethered by earbuds to smartphones. When you think about it, having to hold a smartphone in your hand while unsnarling earbuds, which looked awesome in those Apple commercials 14 years ago, requires a resoluteness that now makes earbuds seem like something that’s time to jettison. In short, they’re a restraint.
That, I imagine, may be where the watch and other so-called wearables figure. The watch reportedly will work with bluetooth headphones, allowing you to bypass your iPhone completely. If true, Apple may be arranging the market to suit its strategy. Regardless, when it comes to portability, it may be time, as someone once said, to think different.
Production line at Lockheed, 1941 (Photo by David Bransby, Farm Security Administration, Office of War Information Photograph Collection, Library of Congress, via Wikimedia Commons)
Sunday marked 73 years since the Japanese attack on Pearl Harbor that brought the U.S. into war in the Pacific.
The day after the attack, newspapers reported on the incident and assessed what might happen next. Writing on Dec. 8, 1941 in the Wall Street Journal, Eugene Duffield outlines the mobilization, which is mind-blowing for the mass of the economy it ensnared and, you might say, stimulated.
As Paul Krugman wrote in the Times in 2011, “World War II is the great natural experiment in the effects of large increases in government spending, and as such has always served as an important positive example for those of us who favor an activist approach to a depressed economy.”
Duffield’s story conveys the scope. Starting in graph five he writes:
This war of the whole world will make demands on the United States such as it has never met before. To defeat the Berlin-Rome-Tokyo axis will require:
Diversion of two-thirds to three-quarters of the industrial facilities of the country to munitions making. Curtailment of civilian consumption of industrial goods to levels below those experienced in the 1932-33 depression.
Expenditure of about half of the national income, or upward of about $30 billion annually, on war.
Sharp increase in taxes plus reliance on banks and savings institutions to absorb large blocks of government bonds in order to finance these record-breaking outlays.
Raising of armed forces which according to the joint army-navy board might reach a total over 10 million men.
Labor ‘registration’ to assure farms and factories of ample manpower if the huge armed force is raised.
Rationing of food if the diversion of manpower to military service and factories impairs food production.
Doubling of the merchant marine if half of the armed services are to be sent abroad to fight.
These are the rough outlines of the mobilization plan which America must follow if yesterday’s events prove to be but a step toward eventual involvement in war against Germany and all her satellites.
Of course, what’s also striking is Duffield’s delineating in detail the effort within 24 hours of the attack. Then again, his sources included officials at the so-called Supply, Priorities and Allocation Board, which President Roosevelt created that summer to coordinate defense production.
Duffield also cited a report by The Associated Press, which reported that Undersecretary of War Robert Patterson had called for production of munitions on a continuous basis. “All steps must be taken to increase the speed with which contracts are let and to speed up maximum production,” Patterson reportedly told the heads of the War Department’s procurement agency.
