It’s Not Obvious That the US Economy Is Becoming Less Competitive

 

It’s a red flag for me when someone makes an argument that makes little or no effort to deal with counterevidence. I never see news articles about the growing rise and risk of corporate concentration that contend with analyses suggesting concerns are overblown. The same goes for the way Big Tech is supposedly squelching competition and depressing innovation. And it’s also weird that claims the US economy is growing less competitive ignore evidence that there’s more creative destruction than ever, at least by some measures (though not by others). Check out the following chart from “Strategy When Creative Destruction Accelerates,” a 2016 analysis by Vijay Govindarajan and Anup Srivastava:

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It’s Great Disability Rolls Are Finally Shrinking, But the System Still Needs Pro-Work Reform

 

Have Americans gotten way healthier over the past several years? Seems dubious. But the US economy sure has strengthened. And America’s hot job market seems to be finally draining a reservoir of hidden slack: disability rolls. The New York Times notes the number of Americans receiving Social Security disability benefits has declined to 8.63 million from a September 2014 peak of 8.96 million.

Now there might be other things going on as well, such as the big expansion of Medicaid and the Social Security Administration tightening the approval process for benefits. But as interesting as all these numbers are, more compelling is the story of Christian Borrero, told at the end of the Times piece. Born with cerebral palsy, Borrero until 2015 received disability benefits as he worked at a part-time job answering phones. The salary was low enough that he still qualified for benefits.

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Begun, It Looks Like the US-China Trade War Has

 

It appears the war of words is over between the US and China. Or, more accurately, the conflict is moving beyond just words. The Wall Street Journal reports: “Beijing said it would retaliate immediately after the Trump administration announced Friday that it will impose tariffs on $50 billion of goods from China, raising the potential for a trade war between the world’s two biggest economies.”

So, escalation. But how does it end? Probably not with China tweaking its state capitalist economic model anytime soon. That would require, if anything, a sustained, multiyear effort where, for instance, Chinese firms benefiting from theft of American intellectual property would face severe sanctions. As my colleague Claude Barfield argues, “Should Beijing remain obdurate against market-opening reform, the US should progressively close off sectors to Chinese investment and operations in this country. Further, in a progressive ratcheting up, Chinese companies should be excluded from US capital markets, including stock exchange listings and the use of American underwriters for capital offerings.”

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Today on the Daily Standard Podcast, Michael Warren joins host Charlie Sykes to discuss the fierce debate about illegal immigration and parents and children being separated at the U.S.-Mexico border, as well as the growing trade war with China.

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Applying Personal Finance Principles to States

 

It is always a good exercise to question. Question orthodoxy, question doctrine. One area worth questioning heavily is Conservative wisdom on budgeting. At the time I write this, the GOP has a solid lock on many state governments. State budgets are theoretically in control of deficit hawks, and, indeed, in most cases, Republican-controlled states have […]

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Things Are Getting Boomy: The Economy Is Jumping, and Worker Wages Might Soon Follow

 

I wrote yesterday about the upturn in Wall Street forecasts for second quarter GDP growth. Maybe the first 4% quarter since 2014 (5.2% in Q3). JPMorgan, for example, now estimates “real GDP is expanding at a 4.0% annual rate in Q2, up from our prior estimate of 2.75% and almost twice the 2.2% growth rate experienced in Q1.”

Sounds like welcome news to me.

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Jim Geraghty of National Review and Greg Corombos of Radio America celebrate another free speech victory coming out of the Supreme Court as it ruled against a Minnesota law that banned political apparel at the polls. They also remain confused at President Donald Trump’s praise for the murderous North Korean dictator, Kim Jong-Un. And they look at the initial details of the long-anticipated Inspector’s General report about Comey, Lynch, and the Hillary Clinton private server investigation.

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Trump’s G7 Free Trade Zone Is a Breathtakingly Ambitious Idea. But Has It Been Thought Through?

 

President Trump’s idea to turn the G7 into a free trade zone strikes one as a bit impulsive and underthought. After all, the Trump trade record this year seems to suggest a different direction, from solar panel and washing machine tariffs back in January to the steel and aluminum tariffs in March to China tariffs perhaps coming up.

Of course, none of that makes a G7 free trade zone necessarily a bad idea. Not at all. In theory, at least, it’s a remarkable one, breathtaking in its ambition. As Financial Times trade reporter Shawn Donnan writes:

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Jim Geraghty of National Review and Greg Corombos of Radio America congratulate the Seattle City Council for letting common sense prevail when they repealed a controversial employee tax. They recoil as GOP primary voters in Virginia nominate Corey Stewart for U.S. Senate and wonder what the real reason is for Mark Sanford’s defeat in South Carolina. They also worry that President Donald Trump may have declared the North Korea nuclear threat over too soon.

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Jim Geraghty of National Review and Greg Corombos of Radio America devote all three martinis to the Trump-Kim summit. They are happy that President Trump did not promise to revoke any of the North Korean sanctions and that Kim reportedly made concessions on his missile program. They also rip the deal over Trump agreeing to end joint military exercises with South Korea, while only getting a vague promise from Kim to move towards denuclearization. They also berate Trump for lavishing public praise towards Kim, calling it a great honor to meet with him and suggesting Kim loves his people.

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The Left Has a Lot of Hot Ideas. Too Bad It Doesn’t Have Much Hayekian Humility.

 

It’s frustrating when the facts have yet to catch up to your insight. Prudence and patience can be maddening when you’ve devised a ready-to-go clever solution — even if that solution might be for a problem that really isn’t a problem. Even worse: When that clever solution and that possible problem neatly sync with the way you think the world works and your long-term policy goals.

For instance: Some progressives have been arguing the rise of the “gig economy” means it’s time for a rash of new business mandates — health insurance, vacation days, sick days, paid leave, pensions for all workers whatever their status — to provide economic security. But as The New York Times sums up a new Bureau of Labor Statistics report on nontraditional work: “The old-fashioned job remains king.” Turns out a smaller share of workers today are employed in “alternative work arrangements” than back in 2005. (I would like to see how things have shaped up over the past five years or so.)

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After discussing the Washington Capitals ending a 26-year title drought in the nation’s capital, Jim Geraghty of National Review and Greg Corombos of Radio America applaud Country Time for vowing to pay the fines and permit fees for kids hassled by the government for running lemonade stands without business licenses. They’re also disgusted as a 57-year-old married man with a high staff position for the Senate Intelligence Committee is charged with leaking classified information to two reporters, including his mistress, who was then 22-years-old. And they note this week’s high profile suicides of Kate Spade and Anthony Bourdain as the suicide rate skyrockets in much of America, and they implore anyone struggling to go on to find help. Finally, they close on another somber note as they process the news that conservative columnist and commentator Charles Krauthammer has only weeks to live.

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Houston Chronicle: Cornyn signals Republican surrender in trade war

 

From the Houston Chronicle on June 8, 2018 Texas Sen. John Cornyn, the №2 Republican in the U.S. Senate, cautioned that Congress is unlikely to pass legislation reining in President Trump’s powers to unilaterally impose steel and aluminum tariffs on our allies, Canada, Mexico, and the European Union, under the guise of national security, under […]

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Jim Geraghty of National Review and Greg Corombos of Radio America welcome the news that outspoken liberal Rep. Keith Ellison is leaving the House of Representatives to run for statewide office in Minnesota, a venture they sincerely hope ends in failure. They also lament that Medicare and Social Security are getting closer to insolvency and neither lawmakers nor most Americans seem all that concerned about it. They also highlight yet another lie perpetrated by the Obama administration in getting the Iran nuclear deal done, this time allowing Iran access to U.S. banks while adamantly telling lawmakers it would not do so.

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AI Will Not Usher In the Dystopias Hollywood Loves to Imagine

 

So much of the conversation about artificial intelligence is negative, with much of that negativity about the potential for job loss. (I see things differently.) So a new analysis from Obama White House economist Austan Goolsbee is a welcome change of pace.

In many ways, it is unfortunate that labor market policy has dominated our thinking about the AI economy. The main economic impact of AI is not about jobs or, at least, is about much more than just jobs. The main economic impact of these technologies will be how good they are. If the recent advances continue, AI has the potential to improve the quality of our products and our standard of living. If AI helps us diagnose medical problems better, improves our highway safety, gives us back hours of our day that were spent driving in traffic, or even just improves the quality of our selfies, these are direct consumer benefits. These raise our real incomes and the economic studies valuing the improvements from quality and from new products tend to show their value is often extremely high

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For First Time Ever, US Has More Job Openings Than Unemployed Workers

 

While the DC press corps worries whether Trump was booed at a White House event and curates elaborate conspiracy theories about Melania, a slightly more important story isn’t getting enough pixels. The economy is doing so well that, for the first time ever, there are now more job openings in the US than unemployed Americans:

With employers struggling to fill openings, the number of available jobs in April rose 1 percent to 6.7 million from 6.6 million in March, the Labor Department said Tuesday. That’s the most since records began in December 2000.

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The US Remains the World’s Most Competitive Big Economy, By Far

 

Nearly nine years into an economic expansion, most Americans continue to believe their country is headed in the wrong direction. Now that attitude probably reflects more than just economic perceptions. And even feelings about the economy’s vigor seem influenced by political leanings.

That said, there’s some evidence that economic pessimism is unfounded. There is, of course, the continued expansion. And the American jobs machine keeps generating gobs of jobs, resulting in the lowest unemployment rate since 2000.

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