Donald Trump vs. the World

Via Pew Research, here's what the world thinks of Donald Trump:

Trump does poorly pretty much everywhere. His top ratings come from China, where authoritarian bullies are taken for granted, and Italy, which probably figures Trump looks positively presidential compared to Silvio Berlusconi. Question: Is this good or bad for Trump? Is it bad because he'll have a hard time getting things done if everyone hates him? Or good because this just proves that everyone knows he'll put America first?

On a related note, the Greeks really dislike the United States on a whole range of issues. What's the deal with this? What have we done to Greece lately?

A couple of months ago Ars Technica ran a story about one of Donald Trump's penny-ante moneymakers from the aughts: the Trump Institute. It all started when a pair of journalism grad students, Joe Mullin and Jonathan Kaminsky, became fixated on a late-night infomercial for the National Grant Conferences:

Why did the NGC infomercial captivate us?...It wasn’t the enthusiastic couple who founded NGC, Mike and Irene Milin, proclaiming that numerous government grants were there for the taking. No, we couldn't stop watching because NGC just felt so sleazy.

....Intrigued, we spent the better part of a year researching NGC, its claims, and its founders’ pasts. We ultimately found that NGC—with several seminar teams circling the country and clearing tens of millions of dollars each year in sales—and its memberships produced no money for any of the customers we interviewed.

....Trump wanted a piece of the action, so he struck a licensing deal with the Milins in 2006. The couple created the “Trump Institute,” using much of the same pitch material and some of the same pitchmen.

Today the New York Times picks up on the story:

As with Trump University, the Trump Institute promised falsely that its teachers would be handpicked by Mr. Trump. Mr. Trump did little, interviews show, besides appear in an infomercial — one that promised customers access to his vast accumulated knowledge. “I put all of my concepts that have worked so well for me, new and old, into our seminar,” he said in the 2005 video, adding, “I’m teaching what I’ve learned.”

Reality fell far short. In fact...extensive portions of the materials that students received after forking over their seminar fees, supposedly containing Mr. Trump’s special wisdom, had been plagiarized from an obscure real estate manual published a decade earlier.

Together, the exaggerated claims about his own role, the checkered pasts of the people with whom he went into business and the theft of intellectual property at the venture’s heart all illustrate the fiction underpinning so many of Mr. Trump’s licensing businesses: Putting his name on products and services — and collecting fees — was often where his actual involvement began and ended.

....Asked about the plagiarism, which was discovered by the Democratic “super PAC” American Bridge, the editor of the Trump Institute publication, Susan G. Parker, denied responsibility....Ms. Parker, a lawyer and legal writer in Briarcliff Manor, N.Y., said that far from being handpicked by Mr. Trump, she had been hired to write the book after responding to a Craigslist ad. She said she never spoke to Mr. Trump, let alone received guidance from him on what to write. She said she drew on her own knowledge of real estate and a speed-reading of Mr. Trump’s books.

In a nutshell, Trump sought out a couple of late-night hustlers who had already been in trouble with the law, taped an infomercial for them, and then pocketed the licensing fee. (They were the "best in the business," said the Trump executive who brokered the deal.) Later, having learned the hustle, Trump ended his contract with the Milins and opened up Trump University. He had learned all he needed and was ready to start pushing the hard-sell conference business on his own. Seven years later, he's perfected the hustle even further, so now he's running for president. You're welcome.

GE has been working on this for a while, and today they got their wish:

The U.S. Financial Stability Oversight Council said Wednesday that it voted this week to remove its label on GE Capital as “systemically important financial institution,” which carries more stringent oversight. Treasury Secretary Jacob Lew, who chairs the council, said the change shows that designation is a “two-way process”—a rebuttal to critics who have said its process for branding “systemic” firms is opaque and doesn’t give firms a clear road map on how to reduce risk.

This is good news:

GE Chief Executive Jeff Immelt said changed market conditions and new regulations had caused GE Capital’s returns to fall below its cost of capital....Since deciding to wind down the finance arm, GE Capital has signed agreements for the sale of about $180 billion of businesses and has closed about $156 billion of those transactions.

In other words, new regulations made it more expensive to do business as a huge financial services firm, so they decided to shrink. This is exactly the way it should be. Higher capital requirements and other rules give financial firms a choice: either accept the more stringent rules as a way of making themselves safer, or else shrink enough that they don't pose a systemic danger in the first place.

Most banks are paying the higher costs, and that's fine. As long as the additional capital requirements are sufficient, they're now safer and less likely to collapse during a financial crisis. GE Capital chose the other route, and that's fine too. So far, this is all working out pretty well.

Donald Trump stood in front of a pile of scrap metal yesterday in Pittsburgh and blasted both NAFTA and the accession of China into the World Trade Organization. He was positively poetic about how his trade policies would affect the steel industry:

A Trump Administration will also ensure that we start using American steel for American infrastructure.

Just like the American steel from Pennsylvania that built the Empire State building.

It will be American steel that will fortify America's crumbling bridges.

It will be American steel that sends our skyscrapers soaring into the sky.

It will be American steel that rebuilds our inner cities.

There's no question that the American steel industry has suffered over the past three decades, thanks to cheap steel imports from other countries. But this began in the 1980s and had almost nothing to do with either NAFTA or China. Take a look:

Do you see a sudden slump in US steel production after NAFTA passed? Or after China entered the WTO? Nope. Other countries simply produced steel more cheaply than we did. It started with Japan and South Korea in the '80s and later migrated to other countries not because of trade agreements, but because Japan and South Korea got too expensive. And it's not as if no one noticed this was happening. Ronald Reagan tried tariffs on steel and they didn't work. George H.W. Bush tried tariffs again. They didn't work. George W. Bush tried tariffs a third time. No dice.

For all his bluster, when it came time for Trump to lay out his plan to "bring back our jobs," it was surprisingly lame. It was seven points long but basically amounted to withdrawing from the TPP and getting tough on trade cheaters. This would accomplish next to nothing. TPP's effect is small to begin with, and we're already pretty aggressive about going after trade violations.

The bottom line is simple: If we want access to markets overseas, we have to give them access to our markets. Donald Trump can claim he wants to bring back the jobs we've lost to overseas competition, but he'd have to back that up by essentially promising to withdraw completely from NAFTA and the WTO—and then promising to build a huge tariff wall around the entire country. He's not willing to do that because even he knows it would trash the US economy. So instead he blusters and proposes a toothless plan. Sad.

NBC News reports that Donald Trump spent $0 on ads in swing states in June:

Hillary Clinton and her allies continue to dominate the presidential battleground-state airwaves, outspending Donald Trump and pro-Trump groups this month, $26 million to $0, according to ad-spending data from SMG Delta.

For the week, it's $7.5 million to $0 in the eight battlegrounds of Colorado, Florida, Iowa, North Carolina, New Hampshire, Nevada, Ohio and Virginia. And when you add future ad reservations, it's $140 million to $0.

I'm not sure what to think of this. Is it comforting because it shows just how incompetent the Trump campaign is? Or is it scary because Trump is still only a few points behind even though he's doing no conventional campaigning at all?

Professor Trump delivered a lecture on the evils of international trade today. Here's a snippet:

Massive trade deficits subtract directly from our Gross Domestic Product. From 1947 to 2001 — a span of over five decades — our inflation-adjusted gross domestic product grew at a rate of 3.5%. However, since 2002 — the year after we fully opened our markets to Chinese imports — that GDP growth rate has been cut almost in half.

What does this mean for Americans? For every one percent of GDP growth we fail to generate in any given year, we also fail to create over one million jobs. America's "job creation deficit" due to slower growth since 2002 is well over 20 million jobs — and that's just about the number of jobs our country needs right now to put America back to work at decent wages.

There are two interesting things about this. First, Trump was reading off a teleprompter, and you can tell. The real Donald Trump would have ranted about the real unemployment rate being 40 percent and 50 million people being out of work or something. Who knows? But the carefully handled Donald Trump produces a well-modulated stream of numbers that actually sounds plausible.

And yet—even with someone else carefully vetting the numbers, they still don't come close to making sense. Consider: the U6 unemployment rate right now is 9.7 percent. This represents every single human being in the country who wants a job but can't get one, or who wants a full-time job but can only get part-time work. Even if they're discouraged and not currently looking for work, they're counted.

The U6 series only goes back to 1994, but a good guess is that the lowest it's been in all of postwar history is about 6.5 percent. We'd hit that mark if 5 million more people were working. If you do the calculation based on the current output gap instead of the U6 rate, you come up with roughly the same number.

In other words, 5 million is the absolute max, even in theory. If that many more people had jobs, the economy would be roaring along at a 1960s boom level. So where does 20 million come from? If it were just Trump blathering away, the question wouldn't be worth asking. But this supposedly came from someone who actually thought about these numbers. And they're still off by a factor of at least four. I sure hope Trump doesn't run his business with financial estimates like this.

A Closer Look Behind the "Obamacare Surprise"

Helaine Olen writes in Slate that Democrats might be in for a nasty surprise just before the election:

A few weeks ago Politico warned of “Obamacare’s November surprise”: Many consumers enrolling in the health care marketplace on Nov. 1, just one week before the election, can expect increased rates.

Given the current disparity in the polls, it’s unlikely that alone could change the outcome of the election. But it is quite possible it will cause a bit of turmoil in the last week of the campaign. It’s beginning to look likely than many shoppers aren’t going to like what they find.

A report from the Kaiser Family Foundation released earlier this month estimated that the average weighted premium increase for the benchmark second lowest cost silver plan will come in at 10 percent. Last year? It was 5 percent.

This is quite possible. As the Obamacare market shakes out and insurers get a better handle on their actual costs, premiums were always bound to go up. But it's worth pointing out what's really happening here: insurers lowballed their premiums at first in order to win market share, coming in at rates far below the CBO's initial estimates. So even if we do see a 10 percent increase in 2017, premiums will still be well under CBO's initial projections1:

I'm under no illusion that this will change the politics of a premium increase, of course. Someone, somewhere, will have a 30 percent increase, and that's undoubtedly what Donald Trump will blather on about. Nonetheless, it's nice to at least be prepared with the truth. And the truth is that even if there's a sizeable increase next year, premiums will still be about 15 percent less than CBO projected back when Obamacare was first passed.


1It was surprisingly hard to collect these numbers. You'd think CBO would have them all collected in one place somewhere, but if they do, I couldn't find them. If anyone can point me to something better, let me know. In the meantime, here are my sources:

Projections:

Actual:

Brexit has already claimed the leadership of one of Britain's major parties, and now it's claimed another: Jeremy Corbyn, leader of the Labor Party, overwhelmingly lost a vote of confidence this afternoon, 172-40. Of course, Corbyn never really had the confidence of his party in the first place, so I suppose this is no surprise. This now officially puts the party regulars in massive conflict with actual Labor voters, who appear to still support Corbyn. In other words, Corbyn is now sort of a lefty British version of Donald Trump.

In other Brexit news, German chancellor Angela Merkel is changing her tune. At first she was the voice of calm among European leaders, but now she's decided the Brexiteers are delusional and need to be told so:

Ms. Merkel reiterated that there could be no talks with Britain on leaving the European Union until Britain starts formal procedures to leave....“The talks can begin only then, and not before — either formally or informally,” she said.

She made clear that Britain could not expect full access to the European Union’s common market without accepting its conditions, including the free movement of people. Immigration was the crux of the often ugly debate that accompanied the so-called Brexit campaign.

“There must be and will be a noticeable difference between whether a country wants to be a member of the European Union family or not,” Ms. Merkel said.

There's no telling how serious everyone is about this position, but it's bad news for Boris Johnson and the other leaders of the Leave contingent. And that's not all. In addition to fessing up to the lies they told about how much money Brexit would free up, they're also walking back their tough talk on migrants:

On immigration, too, there was immediate backtracking from Mr. Johnson and Daniel Hannan, a member of the European Parliament from the Conservative Party, who told the BBC, “Frankly, if people watching think that they have voted and there is now going to be zero immigration from the E.U., they are going to be disappointed.”

....“There is a clear tension between what the voter wanted and what senior euroskeptic leaders want to produce,” said Matthew Goodwin, a professor of politics and international relations at the University of Kent. “If they don’t deliver radical reforms on immigration, it would be the equivalent of pouring gasoline on the populist UKIP fire that has been burning since 2010.”

In the meantime, the pound is still down, Britain's credit rating has been cut, and Scotland is making noises about being able to veto the whole deal. Can they do that? No one really knows, but if party leaders start casting around for an excuse to nullify the referendum vote, it might do.

On the bright side, financial markets seem to steadying up a bit. That's no surprise. I suspect that after the initial shock has worn off, everyone is going to realize that Brexit does not, in fact, represent a massive shock to the global economy. It probably won't even represent a massive shock to the European economy. In the long run, the only economy it will hurt significantly will be Britain's.

The GOP elephant labored mightily for over two years, and today delivered a mouse:

Ending one of the longest, costliest and most bitterly partisan congressional investigations in history, the House Select Committee on Benghazi issued its final report on Tuesday, finding no new evidence of culpability or wrongdoing by Hillary Clinton in the 2012 attacks in Libya that left four Americans dead.

The 800-page report, however, included some new details about the night of the attacks, and the context in which it occurred, and it delivered a broad rebuke of government agencies like the Defense Department, the Central Intelligence Agency and the State Department — and the officials who led them — for failing to grasp the acute security risks in the Libyan city, and especially for maintaining outposts in Benghazi that they could not protect.

In other words, nothing. Previous reports have already criticized the security in Benghazi, including the State Department's own investigation, which was concluded nearly four years ago.

Still, the investigation accidentally uncovered the fact that Hillary Clinton used a private email server while she was Secretary of State, so I suppose it was mission accomplished after all.

What is life like in a medium-security private prison? MoJo's Shane Bauer applied for a job at the Winn Correctional Center in Louisiana to find out. Winn is run by the Corrections Corporation of America, which earned over $150 million running 61 prisons across the country last year. Why is running prisons so profitable? After four months working at Winn, Bauer reports that one reason is simple: the pay for guards is abysmally low and the facility was chronically understaffed. This certainly helped CCA's bottom line, but it also produced persistent violence that the tiny staff was barely able to control:

On my fifth week on the job, I'm asked to train a new cadet...."It's pretty bad in here," I tell him. "People get stabbed here all the time." At least seven inmates have been stabbed in the last six weeks....Three days later, I see two inmates stab each other in Ash. A week after that, another inmate is stabbed and beaten by multiple people in Elm. People say he was cut more than 40 times.

....If I were not working at Winn and were reporting on the prison through more traditional means, I would never know how violent it is. While I work here, I keep track of every stabbing that I see or hear about from supervisors or eyewitnesses. During the first two months of 2015, at least 12 people are shanked. The company is required to report all serious assaults to the DOC. But DOC records show that for the first 10 months of 2015, CCA reported only five stabbings. (CCA says it reports all assaults and that the DOC may have classified incidents differently.)

Reported or not, by my seventh week as a guard the violence is getting out of control. The stabbings start to happen so frequently that, on February 16, the prison goes on indefinite lockdown. No inmates leave their tiers. The walk is empty. Crows gather and puddles of water form on the rec yards. More men in black are sent in by corporate. They march around the prison in military formation. Some wear face masks.

This is a long piece, and it's not easy to summarize. Its power comes from the relentless, detailed buildup of Bauer's record of daily life at Winn. Do yourself a favor and put aside some time to read it.

And if you also want to watch the video version, we have that too: Part 1, Part 2, Part 3, and Parts 4-6 to come later in the week.