Press "Enter" to skip to content

The Red Line

Millions of lost American jobs show the high cost of unfettered free trade

Donald Trump’s assault on free trade has elicited almost universal pushback in defense of the global trading system. The president summed up his critique of trade in his inaugural address, describing its impact as “American carnage” in the form of “rusted out factories scattered like tombstones across the landscape,” after “one by one, the factories shuttered and left our shores, with not even a thought about the millions and millions of American workers that were left behind.”

Last year, Trump’s critique was validated in a study by MIT Professor David Autor and colleagues entitled “The China Shock,” which focused upon the extensive damage wrought by that one nation upon the American manufacturing sector.

The free-trade establishment conceded only that “some lose out,” referring to unemployed U.S. factory workers.

Restart deportation as a way of deterring illegal immigrants

In last week’s GOP debate, illegal immigration sparked heated exchanges about “amnesty,” the polarizing issue at the center of any reform proposal.

But as Marco Rubio pointed out, the failure of Washington politicians to solve the immigration problem over the past 30 years — primarily their failure to staunch the flow of illegal entry — Americans are so suspicious they will not accept any reform until the problem of illegal entry is solved conclusively.

Will Connecticut’s high-tax, union-friendly policies turn out GE’s lights?

You may remember a 2014 Gallup poll that had Connecticut as the new Dodge City, the place that half the residents wanted to get out of. Well, many are leaving, eroding the tax base. And the next may be Jeffrey Immelt, CEO of General Electric.

Headquartered in Connecticut since 1974, GE is evaluating whether to stay or leave after being hit with a big tax increase. A decision is expected next month.

Companies and people are leaving the state because taxes have been jacked up steeply in recent years under the one-party rule of Democrats. Further hikes are inevitable, given looming budget deficits, driven primarily by escalating annual contributions to the state’s overgenerous and seriously underfunded public-sector employee pension fund and unfunded health care obligations.

Ted Cruz’s damaging shutdown delusion

Sen. Ted Cruz and the Freedom Caucus in the U.S. House always want to fight, even when defeat is certain, as it is now when Senate Democrats can kill any legislation with a filibuster and President Obama can veto anything that might survive a filibuster.

The unwinnable-fights attitude can cause real damage, such as the current GOP leadership crisis and the current threat to the nation’s finances. Hopefully, the leadership chaos has passed with everyone rallying around Paul Ryan. Cruz and company’s threats to block an increase in the federal debt ceiling led the U.S. Treasury to cancel its next debt auction, which couldn’t settle before we hit the current ceiling on November 3. With luck, Tuesday’s tentative budget deal will remove this threat.

Fighting with the prospect of winning is ideal. Fighting to make a new point is fine. But repeatedly fighting the same unwinnable shutdown battles?

C-SPAN forum ‘outfoxes’ official GOP debate

Can it get any crazier? Fourteen candidates on one debate stage? Leading newspapers in three small early primary states are partnering with C-SPAN to sponsor the “Voters First Forum,” a prime time TV event inviting all announced GOP presidential candidates Monday.

Nuts, right? Maybe not. What’s at stake is a fundamental principle of democracy. Should voters have the first say on the candidates or should pollsters and Madison Avenue hired guns working for the candidates with the most money?

Plotting an American-style fracking revolution in Britain

The U.S. is surging into global leadership in petroleum production, surpassing Saudi Arabia. At the same time, America’s greenhouse-gas emissions are declining and U.S. energy costs are the envy of the industrialized world. These astonishing developments have been made possible by the U.S.-pioneered techniques of horizontal drilling and hydraulic-fracturing, better known as “fracking.”

James Ratcliffe, the British billionaire and CEO of the European petrochemical giant Ineos, has taken notice. He wants to launch fracking in the United Kingdom with his company in the lead. Last month Mr. Ratcliffe announced a bold offer to his countrymen: Ineos will pay 4% royalties to landowners plus 2% royalties to municipalities on fracking revenue, far more than currently offered by developers. Mr. Ratcliffe means to spark an American-style fracking revolution.

The tax effect behind the market selloff

After last year’s low volatility and impressive gains, stock market investors have been whipsawed in early 2014. Stocks dropped sharply in January, with the Dow Jones Industrial Average tumbling more than 5%, and falling again Monday.

Yet the roller-coaster ride may just be getting started. Aside from the trouble in emerging markets and slowdown in U.S. manufacturing activity, there is a tax effect at play in the current market downturn, and it is likely to increase market volatility for the rest of this year.

Get Pre-K Facts Before Investing Billions

This weeks widely followed Program for International Student Assessment (PISA) results comparing the education attainment of 15-year-olds across much of the industrialized world found a floundering U.S. education system. American students' performance plummeted from 25th to 31st in math, 11th to 21st in reading, and 20th to 24th in science. The result was amplified coming only weeks after our own National Assessment of Educational Progress (NAEP) disappointed once again.

Sandwiched between the two reports was one reason why America's education system continues to lag. We keep investing in efforts that don't produce results.

The ‘Universal Pre-K’ Fallacy

Universal pre-kindergarten schooling, every progressive’s fondest dream, is back in the news. Bill de Blasio, the overwhelming favorite in the New York mayoral race and the likely future head of the nation’s largest school system, is pushing universal pre-K as his No. 1 policy proposal. President Obama offered a national version of this idea in his February State of the Union address and has since pushed hard in other settings. Two problems: Such programs would have negligible educational value, and they would be massively expensive.

Banks’ size is greater threat than complexity

Senators from both sides of the political divide are displaying an encouraging resolve to break up the country’s biggest banks. Unfortunately, they’re focusing too much on the complexity of big bank operations and ignoring the greater threat entailed in their enormous size.

Sign Up For Weekly Alerts

There will be a new Featured Column every week to 10 days. Sign up to receive an email alert when it posts. In the meantime, please visit The Red Line to see a new Column of the Day every day.