Relevant and even prescient commentary on news, politics and the economy.

England, Employment, Wages and Brexit

The Guardian newspaper has a story about wages in England:

A shortage of factory workers is starting to push up pay rates but wage rises in the services sector remain rooted at around 2%, according to the latest feedback from the Bank of England’s regional agents.

The central bank said its agents, which are based in offices across the country, found that shortages this month across the manufacturing sector were leading to a “slight increase in pay growth” that would take average rate of pay rises up by half a percent, from 2-3% this year to 2.5%-3.5% in 2018.

The report appeared to justify Threadneedle Street’s move last week to increase interest rates, which officials at the bank said was needed to dampen the inflationary effects of wage rises.

A survey of employers in October by the Recruitment and Employment Confederation chimed with the BoE report after it found firms were having to raise their pay offers to hire new staff.

The REC said the increase, the second quickest rise in wages since November 2015, followed a fall in unemployment to the lowest level in 40 years that had restricted the number of workers available to take up new positions. It warned that higher pay offers were also needed to counter a growing shortage of EU workers ahead of Brexit.

“We already know that EU workers are leaving because of the uncertainties they are facing right now,” said Kevin Green, REC’s chief executive. “We therefore need clarity around what future immigration systems will look like. Otherwise, the situation will get worse and employers will face even more staff shortages.”

Official data shows that in August net migration fell to its lowest level in three years, with more than half the drop caused by EU citizens leaving and fewer arriving since the Brexit vote.

I find it truly shocking that employment and wages are determined by the market forces, or that the supply of labor is affected by whether foreigners can freely enter and exit a market. Who could have imagined such absurd chains of events? Fortunately, we can rest assured that this is an aberration and can’t possibly apply in the US.

Tags: , , , Comments (20) | |

Britain’s New Prime Minister Openly Channels … Bernie Sanders?

[New British Prime Minister Theresa] May — who campaigned for “remain” in last month’s E.U. referendum — had vowed to unify her bitterly divided party by appointing “leave” and “remain” advocates alike to top posts. She has made good on that pledge.

But she also chosen to banish Gove and others who had been critical players in David Cameron’s government since he brought the Conservatives back to power in 2010. Another key figure who found himself out of a job was George Osborne, who had been the country’s top finance official.

Cameron, Osborne and Gove had together been known as the “Nottting Hill set,” a group of relatively young, Oxford-educated men who sought to modernize a party long known for its fustiness. May is also studied at Oxford, but was never considered part of that clubby grouping. …

The thorough sweep came just a day after May’s rise to power abruptly ended a chaotic, weeks-long leadership void in Britain.

Minutes after curtsying before a handbag-toting queen at Buckingham Palace — the moment May formally ascended to the country’s highest political office — she pledged that a post-E.U. Britain will prosper in its new incarnation, and become more fair and more equitable.

“As we leave the European Union, we will forge a bold, new, positive role for ourselves in the world, and we will make Britain a country that works not for a privileged few but for every one of us,” May said as she stood in front of 10 Downing Street for the first time as prime minister.

May’s speech marked a striking departure from the typical austerity-laden rhetoric of her Conservative Party. Instead of dwelling on the deficit, the country’s second-ever female prime minister emphasized the need to fight “burning injustice,” saying she will work on behalf of the poor, women and minorities.

She also pledged to defend the “precious bond of the United Kingdom,” a nod to her determination to beat back a revitalized secessionist movement in Scotland driven by opposition to the decision to leave the European Union. …

May has been a hawk on the issue of reducing the number of immigrants entering Britain and pushed for a greater government role in electronic surveillance.

Her views on foreign and economic policy are less known. But in her first major speech on the economy this week, her tone was more liberal than expected — emphasizing the need to spur growth and close the gap between rich and poor.

Theresa May puts stamp on British government with mass firing of Cameron ministers, Griffe Witte, Washington Post, this morning  today

Whoa.  Okay, it is by now well acknowledged that Bernie Sanders effectively won the party platform debate, for the most part, anyway.  And my take on Clinton’s comments to us Sanders supporters is that they were sincere; I didn’t view the video or read a transcript, but did read two or three articles about the rally that quoted Clinton’s statements to us, and they sounded sweet, graceful and true.

I think she realizes now that she not only needs most of Sanders’ supporters but also has a better chance to win potential Rust Belt Trump primary voters and also stanch the damage from the Comey email statements last week with the platform as it is rather than as it would have been without the Sanders campaign.

But never in my wildest imagination did I expect that the new British prime minister would coopt so much of Bernie’s campaign language.

The paragraph from the above excerpt of the Post article about defending the “precious bond of the United Kingdom” would seem irrelevant to our presidential campaign, but I do think it’s relevant because Scotland voted (overwhelmingly, I believe) against Brexit.  In other words, May did not direct her Sanders-esque language solely at that Brexit, anti-immigrant, xenophobic British voters but also at Britain’s Bernie Sanders supporters’ counterparts.

The article’s sentence that “May has been a hawk on the issue of reducing the number of immigrants entering Britain and pushed for a greater government role in electronic surveillance” obviously is not Sanders-esque.  Yet apparently she chose in his speech not to mention it.

That so much of her statement today on economic policy apparently took Britain by surprise reflects the swiftness with which major Western politicians are awakening to the remarkably sudden shifts of the political tectonic plates from their positions of the last 40 years.

And I’m so proud to have been a part of the catalyst, if only a teensy tiny part.

****

AND BREAKING NEWS: It looks like PENCE!  As in: Hey, all you folks who thought I’d bring CHANGE.  Apologies.  But I decided instead to go seriously ESTABLISHMENT.

No worries, though.  I’m giving all you Rust Belt types who support me cuz of CHANGE a steep discount for classes at the soon-to-be-revived Trump University.

And by the way, I will absolutely continue to deny that I plan to resign before the inauguration or shortly afterward, this just-kidding-about-anti-establishment-and-change thing not be enough to defeat me cuz of Hillary’s email thing.  (Okay, I’ll just make sure the DONORS recognize that I will, so I don’t havetuh fund my campaign myself. But the upside is that I’ll be available as a professor at Trump U.)

Well, praise the Lord.  Hillary Clinton is, I’m sure.  (I mean, not that Christie would have been better for Trump.  But since Pence is even more Retro than Trump’s pompadour, it’s better for us true progressives and will absolutely highlight our party’s platform.  It’s different than Christie would have been.)

Perfect.  Today is a good day.

But please, Hillary Clinton, choose a true progressive as your running mate.  Seriously; heed Prime Minister May’s tacit advice.  (And mine, of course.)  Pretty please.  Beautiful please.

Tags: , , , , , , , Comments (8) | |

Why are so many pundits conflating U.S. blue-collar voters’ concerns that are similar to their British counterparts’ who voted for Brexit with the separate issue of whether the Brexit vote itself will influence U.S. blue-collar voters’ votes in November? These are completely different issues.

Some of our wisest political observers informed us that Brexit would be great news for Donald Trump, because it shows (somehow) that there may be more support here than expected for his nationalist message of restoring American greatness through restrictionist immigration policies and turning the clock back on globalization.

So it’s a bit surprising to see that a new Bloomberg/Morning Consult poll shows that Brexit will not influence the votes of a majority of Americans, and if anything, may benefit Hillary Clinton marginally more than Trump:

“A majority of U.S. voters — 57 percent — say they don’t expect the U.K. verdict will influence their vote in the presidential election. For the roughly quarter who say it will, almost half say it will make them more likely to support Democrat Hillary Clinton, while 35 percent say Republican Donald Trump.”

This is only one poll, so don’t place too much stock in it, but I wanted to highlight it to make a broader point: There is simply no reason to assume that the debate over globalization, which Trump joined with abig speech on trade yesterday, will automatically play in the Donald’s favor. Indeed, Trump is running a massive scam on American workers on many fronts, and the contrast between his positions and those of Hillary Clinton on trade and other economic matters may prove more important in the end than his blustery rhetoric.

Neil Irwin has a good piece this morning on Trump’s big trade speech, in which he pledged to rip up our trade deals with his  large and powerful hands and to bring manufacturing roaring back. As Irwin notes, Trump is right to highlight the very real possibility that trade deals have badly harmed American workers, and that elites have in many respects let those workers down. (Bernie Sanders, too, isrightly calling on Democrats to fully reckon with this phenomenon.) But as Irwin also notes, Trump is selling American workers a highly simplistic, anachronistic tale that doesn’t level with them about the likelihood of reversing trends in globalization and automation

Morning Plum, Greg Sargent, Washington Post, today

I’m certainly no fan of NYT columnist Thomas Friedman—he of “Go for the Grand Bargain, President Obama!” and “Michael Bloomberg for President!” fame.  But his column today is, in my opinion, exactly right.

The first several paragraphs sum up what has become clear to everyone following the news on the Brexit-vote aftermath: that the leaders of the Brexit movement harbored no compunctions about selling it with lies and gross distortions because they didn’t expect their campaign to actually end in, well, Brexit.  And that now that that these dogs have caught the car, they have no idea what to do with it.  They have the car keys but don’t know how to drive the car.

This certainly is why, as Sargent points out, the Brexit vote itself has not helped Donald Trump and instead appears to be helping Clinton slightly.

But the remainder of Friedman’s column addresses the separate issue—and clearly, it is that—of the reasons why so many Britons and Americans and citizens of several other Western countries are susceptible to the type of simple-elixir manipulation that apparently many Britons now regret that they fell for.

Friedman writes:

Because although withdrawing from the E.U. is not the right answer for Britain, the fact that this argument won, albeit with lies, tells you that people are feeling deeply anxious about something. It’s the story of our time: the pace of change in technology, globalization and climate have started to outrun the ability of our political systems to build the social, educational, community, workplace and political innovations needed for some citizens to keep up.

We have globalized trade and manufacturing, and we have introduced robots and artificial intelligence systems, far faster than we have designed the social safety nets, trade surge protectors and educational advancement options that would allow people caught in this transition to have the time, space and tools to thrive. It’s left a lot of people dizzy and dislocated.

At the same time, we have opened borders deliberately — or experienced the influx of illegal migration from failing states at an unprecedented scale — and this too has left some people feeling culturally unanchored, that they are losing their “home” in the deepest sense of that word. The physical reality of immigration, particularly in Europe, has run ahead of not only the host countries’ ability to integrate people but also of the immigrants’ ability to integrate themselves — and both are necessary for social stability.

And these rapid changes are taking place when our politics has never been more gridlocked and unable to respond with just common sense — like governments borrowing money at near zero interest to invest in much­-needed infrastructure that creates jobs and enables us to better exploit these technologies. “Political power in the West has been failing its own test of legitimacy and accountability since 2008 — and in its desperation has chosen to erode it further by unforgivably abdicating responsibility through the use of a referendum on the E.U.,” said Nader Mousavizadeh, who co-­leads the London­-based global consulting firm Macro Advisory Partners.

But we need to understand that “the issue before us is ‘integration’ not ‘immigration,’” Mousavizadeh added. The lived experience in most cities in Europe today, is the fact that “a pluralistic, multiethnic society has grown up here, actually rather peacefully, and it has brought enormous benefits and prosperity. We need to change the focus of the problem — and the solution — from the physical reality of immigration to the political and economic challenge of integration.” Schools, hospitals and public institutions generally will not rise to the challenge of the 21st century “if social integration is failing.”

Which brings me to another current conflation by much of the punditry: that Bernie Sanders has squandered his clout by waiting to endorse Clinton until after the party platform is completed, by which time most of his supporters already will be planning to vote for her, swayed partly by Trump’s simple awfulness and partly by Elizabeth Warren, who has started campaigning with Clinton.

That analysis misses two key points.  First, Sanders’s supporters who are not so thoroughly horrified at the thought of a Trump presidency that they have not yet decided to vote for Clinton care a great deal about the policies they will have some reason to believe will be enacted, or, conversely, blocked, by a Democratic White House teaming with a clearly ascendant and finally-high-profile progressive wing of what hopefully will be a Democratic-controlled Congress.

Second—and a point I’ve made repeatedly in my posts here at AB—there are two types of Trump voters or potential ones, and only one of these will matter to the outcome of the election.  Suffice it to say that the Build the Wall and Ban Muslims voters in the South and Southwest are not the ones who will matter.

The ones who will are Democrats in the Rust Belt who support much of Sanders’s proposed platform and are now considering voting for Trump.  And whose vote could turn on such things as discussions about what political consultants wouldn’t dream of advising their clients to discuss, but that Sanders did discuss during his campaign: hostile labor union policy, including NLRB member appointees; antitrust enforcement; banking regulations that reign in the political power of the financial services industry generally and the mega-banks in particular; the Consumer Financial Protection Bureau—what it is and does.

Free tuition at public colleges and universities.  Guaranteed access to healthcare.  Guaranteed medical and family leave, for the cost of $1.50 a week in, yes, taxes.  Increased Social Security benefits, in recognition of the demise of defined-benefit pensions.

As so many pundits note, and as Sanders himself says, the Sanders campaign has achieved a great deal in the general outlines of the party platform.  The process has been like pulling teeth, but still ….

But one of the Clinton campaign’s super PACs, I read a day or two ago, is about to flood the internet with ads reminding people that Trump is a misogynist—because apparently there are three or four voters who, although they already know this, will decide against voting for Trump after they’re reminded of it yet again.

And the Clinton campaign itself, I also read, has ads running on TV in some swing states apprising voters that in the ‘70s and ‘80s Clinton pushed some policies that helped children in Washington, DC and in Arkansas, and that as First Lady in the ‘90s she devised and helped push through the CHIPS healthcare insurance plan—not a trivial thing, by any stretch, but also not relevant to voters’ current concerns about this candidate and about the likelihood of major change of the sort so many people who badly want major change want.

Those who continue to cite Clinton’s popular-vote margin over Sanders in support of resistance to this overlook the critical fact that it was, until late in the primary seasons of both parties, broadly believed gospel that an economic populist could not win the general election—and that that, not some broad antipathy toward populist economic policy proposals, tells the tale of that popular-vote differential.  It is, for example, unlikely that a majority of African American and Hispanic voters oppose free public university and college tuition.  And universal, Medicare-like healthcare coverage.  And a $15/hr. minimum wage.  And guaranteed medical and family leave in exchange for a $1.50 weekly tax.  And the reduction of the size and economic and political power of the largest financial institutions.

Polls have not been taken on this, to my knowledge.  That’s too bad.  But in any event, Rust Belt voters considering voting for Trump despite rather than because of his personality and offensiveness would not be among those interviewed in a poll limited to Clinton primary voters.

The real hope for the Clinton campaign lies not just in showing Trump for what he is, not just regarding his temperament, breadth of ignorance, and breathtaking grifterism, and not just the Build the Wall and Ban Muslims policies that everyone already knows about, but also in apprising the pubic of his actual proposed fiscal policies.  And Paul Ryan’s.  And also every bit as much in Clinton’s appearing comfortable with the fact that her campaign’s car was caught by the Sanders dog.

And in seeming fine with allowing that dog’s tail to wag her campaign, to a very large extent.

The fallout from Brexit is already being recognized by U.S. voters as a warning about gullibility and a belief that any dramatic change is better than no or little change.  Turns out that some of the positive changes Britons were promised already have been withdrawn, and the changes that cannot be withdrawn aren’t particularly promising ones.  But as Friedman’s column makes clear, the status quo in the remaining EU is untenable, too, and the EU leaders now recognize that.  So there is a silver lining after all to the Brexit vote.  It’s just not one that helps Britain.  But in addition to helping the remaining EU members, it could help the Clinton campaign.

____

UPDATE: OH. WOW.

Finally, the Clinton campaign is being forced, by Trump’s speech yesterday on trade, to actually educate the public about Trump’s actual fiscal and regulatory policies.  Well, more accurately, it is Lawrence Mishel, president of the Economic Policy Institute, the source Trump cited more than a dozen times in that speech, who is doing that.  In spades.

Painful though it may be for the Clinton campaign to see someone who has the attention of the news media apprise the public that Trump’s fiscal and regulatory policies are long those of the Republican Party elite and Republican elected officials at every level of government—the very mission of which has been to crush ordinary workers, duly accomplished—it looks like it will have to suffer this indignity.

Which is better than having to do this themselves.  Anything is better than having to do that themselves.  For some reason.

Added 6/29 at 4:49 p.m.

Tags: , , , , , , , , Comments (6) | |

I really don’t understand what …

all the fuss about Brexit is about, given that now more people will visit Turnberry, Scotland to golf.

Or maybe not.

Although that push to repeal Dodd-Frank may save us all from another economic crisis!

____

Okay, seriously, I think that contrary to the immediate CW, Brexit will actually hurt Trump, not help him. This is a guy who thought he’d benefit financially from a crashing pound because it didn’t occur to him that if financial chaos or even just a recession occurs that spreads beyond Britain, it won’t be much help for his luxury golf resort that the pound’s exchange rate has sunk. Who in his or her right mind would think this is the guy to handle economic crises, or anything else other than, maybe, a beauty pageant?

Tags: , , , , Comments (11) | |