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March 2018

Steel Yourselves By The Editors

The beginning of the Trump administration’s rollout of long-promised protectionist measures for the U.S. steel and aluminum industry has been Beltway comic opera as Trump’s lightly informed economic enthusiasms interact chaotically with his staff’s attempts to keep him from indulging his worst impulses too deeply.

It’s not like nobody saw this coming: Trade protectionism — crony capitalism for well-connected and politically sensitive firms and industries — is bad policy, but it is one of the few issues about which Donald Trump has been consistent in his public statements going back decades, to the 1980s at least. He ran on a protectionist agenda and specifically named steel imports as a source of irritation.

The economics here are pretty straightforward. Trump thinks steel is just one more example of the Chinese getting one over on Americans, but China is in fact a minor player in the U.S. steel-import business, being No. 11 among nations exporting steel to the United States. A quarter of our imported steel comes from our NAFTA partners, mostly from Canada, which provides 16 percent of U.S. steel imports. Among Asian steel exporters, South Korea is our largest trading partner, not China. Moody’s projects that the country that will be most adversely affected by the tariffs is Canada, followed by Bahrain, a country that does not loom particularly large in our economic consciousness, having as it does an annual national economic output about one-fifth of the Ford Motor Company’s. It is better to punish one’s enemies than one’s allies.

And it is no good at all to punish producers and consumers both, which is what tariffs do. Tariffs are a sales tax, in this case on a raw material that is used in everything from buildings to automobiles and industrial machinery — and the latter two are a big part of the U.S. export portfolio, something that ought to occur to a president who obsesses about the balance of trade. Steel is a necessary part of the machinery that produces the agricultural commodities, electronics, and industrial implements that are the heart of U.S. exports of goods. Advantaging a small number of politically connected firms at the expense of the broader manufacturing economy — which employs vastly more people and represents vastly more in the way of both economic production and exports — is damned foolish. As an economic matter, it is illiteracy in action. There’s a reason Caterpillar shares sank after the tariff announcement, along with Boeing, United Technologies, General Motors, and others.

Gabe Schoenfeld Remains Confused about Obstruction By Andrew C. McCarthy

He’s a distinguished scholar, but he doesn’t seem to understand a basic argument.

Notwithstanding his impressive academic and professional credentials, Gabriel Schoenfeld either has a poor grasp of obstruction law or has developed reading-comprehension problems. He has also become quick to level accusations of bad faith at people he has misunderstood, or who simply disagree with him. That makes it hard to have a conversation, which is too bad because I used to enjoy our conversations.

In his latest tirade at Lawfare, Gabe accuses me of “egregious misrepresentation.” He professes that I have “repeatedly insist[ed] that for an obstruction charge to be lodged, someone has to obstruct a ‘pending proceeding.’” But far from “repeatedly insisting” that this is the case, I have never said any such thing. Gabe has misread what I wrote in a column responding to his earlier attack on me. Rather than assume that I may have misspoken (or maybe even go back and read what I actually said), he accuses me of deception.

He further contends that I have changed my position on the Justice Department’s separate treatment of criminal and counterintelligence investigations. This is almost amusing. The 14-year-old column from which he claims I have “pirouetted” was about the infamous “wall” erected by the Justice Department in the mid-1990s. That is, I wrote the column precisely to stress that the Justice Department recognizes a sharp divide between the two types of probes, and to criticize how the divide was policed — on what turns out to be my incorrect assumption that Justice Department officials could be trusted to follow rules.

I haven’t changed my position. Gabe has failed to grasp the difference between the issue in 2004, which was intelligence-sharing, and the issue today, investigation and prosecution under governing regulations. Whether it was 1996, when the wall went up; 2001, when it was razed; 2004, when my column was written; or 2018, during a special-counsel investigation, it has never been permissible for the Justice Department to conduct a stealth criminal investigation under the guise of a counterintelligence investigation.

Punished for Not Chanting “Death to America, Israel, Britain” by Majid Rafizadeh

Some sympathizers with extremist Muslims even try to insist that these messages are merely examples of “cultural differences”. The goal of these sympathizers seems to be to mislead a vulnerable populace into thinking that they should not worry about these chants or about the open and passionate threats against their communities.

This dumbing-down is especially intriguing because the same people who attempt culturally to explain, justify or minimize the meaning of “Death to America” and “Death to Israel” have never lived under Islamic rule or even studied those fundamentalist states. Yet they take it upon themselves to explain the meaning of these chants as if they know better than the people issuing them.

Ultimately this conditioning of the Western culture allows the extremist Muslims to expand their agenda slowly and covertly, while those who raise the alarm are shoved to edge of society and ostracized as “racists” or “Islamophobes,” while the public remains lulled into a slumbering state.

One of the most astonishing misconceptions I have come across in the West is the habit that some people — especially many media outlets — have of attempting to trivialize radical Islamists chants such as “Death to America”, “Death to Israel”, and “Death to Britain”. Even government officials tend to reduce these outbursts of hatred from the threats they really are to common banter.

Some of the so-called leftists, as well as agents of the extremist Muslim groups in the West, or spokesmen for the Islamic Republic of Iran, try to explain that these chants do not mean what they say, and what most people probably assume they say. Some sympathizers with extremist Muslims even try to insist that these messages are merely examples of “cultural differences”. The purpose of these sympathizers is seemingly to mislead a vulnerable populace into thinking that they should not worry about those chants or about the open and passionate threats against their communities.

This dumbing-down is especially intriguing because the same people who attempt culturally to explain, justify or minimize the meaning of “Death to America” and “Death to Israel” have never lived under Islamic rule or even studied those fundamentalist states. Yet they take it upon themselves to explain the meaning of these chants as if they know better than the people issuing them.

Millennial Males with Degrees are Getting Crushed in the Workplace (See Chart) Annie Holmquist

When it comes to men and women in the working world, it’s often assumed that the latter get the short end of the stick. As such, a great deal of time and attention is devoted to helping women break any and all glass ceilings that stand in their way.

But what if women have already achieved parity with the men and are in fact surpassing them?

Although it seems absurd given the cultural mantras we’ve been fed, research is beginning to show that such is the case. One recent NBER paper finds that college-educated men are struggling to stay in the “cognitive/high wage” workforce much more than women. Another NBER paper produced a similar result, finding that young men between the ages of 25 to 34 are specifically the ones in trouble. Richard Reeves and Eleanor Krause of the Brookings Institute elaborate on this trend:

“For all the worries about middle-aged men, it is actually men at the younger end of the prime-age years who have seen the sharpest drop in employment rates:”

Into the NeverTrump Gulag By Julie Kelly ****

Deep in the D.C. Suburbs—After a frightening New York Times column by Bret Stephens comparing Trump supporters to Stalinists and NeverTrump “conservatives” to anti-Communist freedom-fighters, several NeverTrumpers—fearing for their safety—have taken refuge in the suburban home of their de facto leader, Weekly Standard editor-at-large Bill Kristol. https://amgreatness.com/2018/03/02/into-the-nevertrump-gulag/

The group includes Stephens, Washington Post columnists Jennifer Rubin and Max Boot, National Review writer Mona Charen, and author Tom Nichols. Their self-imposed exile gives the courageous dissidents a chance to plot their next move, schedule their next MSNBC interview, and close their next book deal without fear of being crushed by the MAGA jackboots . . .

Kristol: OK, brave warriors, here’s what we need to do given my decades of success in mastering the levers of power in Washington. We must first come up with a clever name, like the Committee for the Liberation of Iraq, er, America. Then we draft a Statement of Principles. Then we write a strongly worded letter to the president but it’s really just a prop to get more interviews.

Nichols: [looks up from phone] Can’t we just tweet? It’s the only way I’ll ever get more followers than Hannity.

Kristol: [tries unsuccessfully to button cardigan sweater] Tom, I know you’re an expert and all, but you don’t understand. None of this means anything, we just have to sound like we know what we’re doing. Trust me, when this is all over, we will be welcomed as liberators of the conservative cause. Or at least considered as clever as I was when I made McCain pick Sarah Palin as his running mate.

Rubin: [Applies garish lipstick] Can we make this quick? I have to be on CNN in an hour and I don’t have all my screaming points done yet. [Looks at Boot] Max, what are you doing?

Boot: I’m writing my next column, “Letter from a McLean Mansion.” I mean, as a historian, I know Martin Luther King had it rough and whatnot, but he didn’t have to deal with social media or Fox News. If you really think about it, we are no different than the Little Rock Nine. Except there’s six of us.

Immigration Disaster Looms in Germany By Alex Alexiev

Milton Friedman once said open borders and the welfare state are incompatible. This is easy to prove in California, where, according to a recent essay by Victor Davis Hanson, half of all immigrant households are on welfare and the state accounts for a third of the nation’s welfare recipients with only 12% of its population, even as 20% of California’s population lives below the poverty line. Recent figures published in Europe’s economic powerhouse, Germany, indicate that following Angela Merkel’s disastrous open-borders experiment of two and a half years ago, that country is well on its way to joining California in proving the wisdom of Friedman’s admonition, to the huge detriment of the German people.

Official figures of the German statistical office show that beginning in 2015, Germany accepted 1.4 million asylum applications. According to detailed figures from 2016, 71.4% were granted asylum or “subsidiary” protected status, while 28.6% were rejected. Being rejected, however, did not at all mean that you had to leave Germany or were in danger of being deported. Most of those rejected filed an appeal (64,251 in 2016), and 31.7% of those received a negative decision. Even then, few of those rejected left voluntarily, and even fewer were deported. According to the daily Die Welt, citing government figures, most of the migrants remain in Germany, regardless of the asylum decision.

Because very few of the refugees would qualify as persecuted for their political or religious beliefs, the traditional reasons for claiming refugee status, under Merkel, the German government has de facto created a right to better life for migrants from poor countries, which means that the economic incentives to migration remain extremely powerful. Indeed, nobody in Germany has any illusions about this. The difference between the nominally conservative CSU of Bavaria and the pro-immigration social democrats (SPD), for instance, is that the former want to limit immigration to 200,000 per annum, while the latter do not want any limits at all.

History Can’t Be Rewritten To Defend FDR’s Behavior At Yalta David Woolner’s book, ‘The Last 100 Days: FDR at War and Peace,’ makes some highly disputable claims about FDR’s handing of the Yalta Conference in 1945 in order to make the dying president’s statecraft look more competent. Ron Capshaw

One of the more feverish accusations in the early years of the Cold War, the late 1940s, early 1950s, concerned Franklin Delano Roosevelt and his performance at the Yalta Accords in February 1945, which occurred as World War II was winding down and Soviet imperialism was becoming more apparent.

The GOP, and even a young Democratic senator named John Kennedy, regarded Roosevelt as selling out Eastern Europe to Stalin. The reasons supplied for this “treachery” were either that FDR was “soft on Communism” (the view of Joseph McCarthy, and even moderate Republicans who attacked McCarthy) and that an obviously dying Roosevelt was taken advantage of by a more robust Joseph Stalin.

In his book The Last 100 Days: FDR at War and Peace, David Woolner contests both interpretations, but devotes the most energy to the health issue. His starting point is that FDR was extremely competent and canny even though it was apparent he was dying—a month after Yalta, FDR broke precedent by appearing before Congress in a wheelchair. Woolner’s portrait of Roosevelt is heroic, with the president summoning his last bit of energy to push back at Stalin and secure the creation of the United Nations. Roosevelt’s effort was thus a noble self-sacrifice, as Woolner admits that these efforts led to his death at the age of 63.
Complicating Facts

However, Woolner’s argument that Roosevelt was fully alert contradicts the president’s own doctors, who advised him not to run for a second term and believed that by Yalta, February 1945, Roosevelt was fading daily and would be dead within the year. Instead, Woolner gauges the president’s competency based on how FDR saw himself: as a canny political operator.

Student Magazine Seeks to Bring Back Segregation By Tom Knighton

Growing up in the Deep South, it wasn’t hard to find the last vestiges of segregation if you knew where to look. Years after the Civil Rights Act, there were still a few oddly placed water fountains and even a few signs stuck in the corner at local scrapyards. I couldn’t help but notice them, thankful that those days were gone forever.

Or, maybe not.

A group of students at the University of Texas, San Antonio have decided to create a magazine that exists to promote segregation. Titled “No Whites Allowed,” the student-run magazine doesn’t leave a whole lot to the imagination. Further, it excludes heterosexual people of any ethnicity from contributing as well.

According to Campus Reform, an event description stated: “This zine specifically features and promotes black and brown lgbtqa creatives.” It continued: “We hope to showcase our talent and create an open space for our voices to be heard.”

“[F]or a very long time, black and brown people, especially those who are queer, have been told that they don’t have a space. That they don’t have a voice or a say. With this we would like to create a space.”

A Lovely Little Trade War Donald J. Trump explains his theory of comparative advantage.

Donald Trump doubled down Friday on his plan for steel and aluminum tariffs, telling his advisers he won’t exempt any countries from the new blunderbuss border taxes, and issuing on Twitter one of the greatest displays of economic nonsense in presidential history.

“When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win. Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy!,” Mr. Trump tweeted Friday morning.

Let’s parse that one, to the extent it is humanly possible. Mr. Trump believes that trade is a zero-sum game, with winning defined as having a national trade surplus. But trade consists of millions of acts of buying and selling by individuals and companies that are presumably for mutual benefit. Otherwise why would they do it? No one forces anyone to buy or sell across borders. The entire point of trading goods or services is that someone wants to buy the car or pay for the engineering design.

Then there’s Mr. Trump’s remedy, which is “don’t trade anymore-we win big.” So if the U.S. has a $100 billion deficit with Country X, simply stop trading with that country. Voila, problem solved.

But that $100 billion deficit represents an enormous amount of commercial activity, which creates jobs for millions of Americans. Someone in the U.S. has to sell that car made in Japan, or create an ad campaign to sell it. Mr. Trump’s trade-deficit remedy is to stop that trade cold and assume that somehow the production will magically arise in the U.S. Even if that were true, and it isn’t, he’s advocating what economists call autarky, or economic self-sufficiency that would result in a depression as commerce and investment crashed.

Some of our more sanguine friends see the tariffs and tweets as Mr. Trump’s familiar negotiating bluster, but we wouldn’t be too sure. Protectionism may be his only real policy conviction, and his tweet confirms he doesn’t know what he’s talking about. This is what the equity markets are saying as they discount trade-dependent companies.

Reagan Protectionism vs. Trump Protectionism In every way, the Gipper saw a bigger picture even when he pursued unseemly trade policies. By Holman W. Jenkins, Jr.

Ronald Reagan was the protectionist Donald Trump might want to be, yet didn’t provoke market panic or a trade war.

Reagan slapped import quotas on cars, motorcycles, forklifts, memory chips, color TVs, machine tools, textiles, steel, Canadian lumber and mushrooms. There was no market meltdown. Donald Trump hit foreign steel and aluminum, and the Dow Jones Industrial Average fell more than 600 points on Thursday and Friday.

Reagan was no genius administrator ( Herbert Hoover was), so that’s not the difference. Though he promised Michigan auto workers help with Japanese imports and was grateful when they voted for him, he never kidded himself that America’s problems were somebody else’s fault rather than homegrown.

Trade was less important in those days, before China’s rise and the globalization of the world’s assembly line, but that wasn’t the reason either. The 1987 crash proved soon enough that investors were ready to panic if trade partners (Germany and the U.S.) got into a serious tiff.

The real difference is that Reagan’s protectionist devices were negotiated. They were acts of cartel creation, not unlike the cartels that have been known to spring up illegally when industries under strain seek to preserve capacity while avoiding price wars. Mr. Reagan used quotas, not tariffs. He kept the peace by inviting America’s trade partners to share in excess profits at the expense of American consumers. (Recall that one upshot was a nationwide bribery-and-kickback scandal when Honda Accords were in short supply.)