Latin America Could Pursue Free Trade Without the US

Andrés Velasco: “How should Latin America respond to US President Donald Trump’s America-first approach to the global economy? Here’s one possible answer: build a free-trade area of the Americas without the United States.”

“One reason why a region-wide trade deal foundered was that proud Brazil was unwilling to attend a party whose main host was the US. But if Trump sticks to his protectionist promises, we will no longer have to worry about US-Brazil rivalry within the same trade agreement.”

“In the past, US farm subsidies were also deal-breakers for large agricultural exporters like Argentina and, again, Brazil. With the US out of the picture, this also becomes a non-issue.”

How to Save Coal Country

Dwyer Gunn: “…while the surprising outcome of the election may extend the lifespan of the coal industry by a few more years, many in the region are now convinced that the future of Appalachia doesn’t lie in the coal fields, which are facing economic challenges that have nothing to do with the current occupant of the White House, or in the factories, which these days rely more on machines than people. Instead, policy experts and community leaders are fashioning a new economic development strategy for their communities—one that borrows more from liberal theories of urban revitalization than from Trump’s pledges to bring back lost manufacturing and mining jobs.”

“In Southwest Virginia, for example, community leaders have been working since 2004 on a plan to rebrand the region as a cultural destination, complete with a booming tourism industry, and a cyber-security hub, offering the kinds of jobs more often associated with Silicon Valley than rural Appalachia. ‘We do not want to get into the same situation where we have an economy that’s dependent on one dominant industry,’ says Shannon Blevins, associate vice chancellor at the University of Virginia’s College at Wise, who leads the school’s economic outreach efforts. ‘We want to make sure we have a diversified economy.'”

The Case Against a Cashless Society

“The cashless society – which more accurately should be called the bank-payments society – is often presented as an inevitability, an outcome of ‘natural progress’. This claim is either naïve or disingenuous. Any future cashless bank-payments society will be the outcome of a deliberate war on cash waged by an alliance of three elite groups with deep interests in seeing it emerge,” Brett Scott writes for Aeon.

Educational Equality and Excellence Will Drive a Stronger Economy

Arne Duncan: “This election taught me two things. The first is obvious: We live in a deeply divided nation. The second, while subtle, is incredibly important: The election was a massive cry for help. People across the country–on both sides of the political spectrum–feel they have been left behind and are fearful their basic needs will continue to go unanswered. Rhetoric may win votes, but it doesn’t put food on the table. There’s been much discussion of how we’re divided by race and class, but I believe a huge driver of our nation’s current challenges is created by educational inequity.”

“When compared to 17 other industrial countries, U.S. workers ranked last in ‘problem solving in technology-rich environments.’ If we expect to compete in a global economy that demands increasingly higher skills, we need to concentrate on closing the digital divide. The reversal must begin in K-12, where currently only one in four schools teach computer programming.”

Killing Free Trade Will Rob the World of a Highly Effective Deterrent to War

“History shows that trade agreements are rarely about economics alone. They are a tool of diplomacy—a way to shore up old alliances and forge new ones. And now, perhaps, a way to avoid World War III,” Dan Kopf writes for Quartz.

“Like GATT, the EU, the North American Free Trade Agreement (NAFTA), and the now-derailed Trans Pacific Partnership (TPP) were all efforts at economic diplomacy. At the heart of the EU project was the idea that Europe would become a ‘common market‘ that was so economically dependent it would be immune to war between members. NAFTA’s allure for the US was that it might stabilize Mexico as a friendly, capitalist democracy. The TPP was supported by then-president Barack Obama largely as a way to check the rising power of China.”

“There is strong evidence that free trade keeps the peace. Stanford economists Matthew O. Jackson and Stephen Nei examined why international conflict fell precipitously from the period 1820-1949 to 1950-2000, and concluded that international trade was likely a major contributor.”

What Trump Gets Right on Trade

Alan Tonelson: “Mr. Trump’s stance on trade is one of his most popular positions, but many economists and policy makers are skeptical: They say that rapid automation will negate any gains made in bringing manufacturing jobs back, while the tariffs and other policies he has suggested using will ignite disastrous trade wars.”

“The doubters are wrong on both points. American manufacturing’s most advanced sectors remain big employers, and much of their payroll shrinkage stems from predatory competition from high- and low-wage countries, as well as offshoring by American multinationals. And the trade-war alarmists overlook the matchless, yet overwhelmingly neglected, leverage America holds over the global economy.”

J.P. Morgan Software Does in Seconds What Took Lawyers 360,000 Hours

Bloomberg Markets: “The program, called COIN, for Contract Intelligence, does the mind-numbing job of interpreting commercial-loan agreements that, until the project went online in June, consumed 360,000 hours of work each year by lawyers and loan officers. The software reviews documents in seconds, is less error-prone and never asks for vacation.”

“While the financial industry has long touted its technological innovations, a new era of automation is now in overdrive as cheap computing power converges with fears of losing customers to startups. Made possible by investments in machine learning and a new private cloud network, COIN is just the start for the biggest U.S. bank. The firm recently set up technology hubs for teams specializing in big data, robotics and cloud infrastructure to find new sources of revenue, while reducing expenses and risks.”

How the Presidency Changes the President

Washington Post: “A new paper out in the journal Presidential Studies Quarterly takes a rigorous, quantitative approach to the question behind all the current pivot talk: Does the presidency moderate the president? That is, does becoming president cause a leader to shift toward the center in an effort to govern everyone? Or does a president gravitate toward the extremes, becoming more entrenched in party and ideology?”

“Barry Edwards, a political scientist at the University of Central Florida, found that while there was a time when ‘the presidency effectively moderated presidents’ policy preferences,’ that’s no longer the case. Instead, in the modern era, Edwards writes, the presidency ‘appears to amplify the partisan leanings of the president.'”

“Edwards suspects these findings reflect the evolving nature of the presidency. The modern president, other recent political science research suggests, is no longer simply an executor of laws passed by Congress. Rather, ‘he uses executive authority to shift public opinion in support of his policies.'”

The Rise of the Useless Class

TED published an excerpt from Yuval Noah Harari’s new book, Homo Deus: A brief history of tomorrow. In a nutshell: “Historian Yuval Noah Harari makes a bracing prediction: just as mass industrialization created the working class, the AI revolution will create a new unworking class.”

One interesting passage from the book: “Since we do not know how the job market would look in 2030 or 2040, today we have no idea what to teach our kids. Most of what they currently learn at school will probably be irrelevant by the time they are 40. Traditionally, life has been divided into two main parts: a period of learning, followed by a period of working. Very soon this traditional model will become utterly obsolete, and the only way for humans to stay in the game will be to keep learning throughout their lives and to reinvent themselves repeatedly. Many, if not most, humans may be unable to do so.”

In US, 37% Say UN Doing ‘Good Job’ Solving Problems

Gallup: “Thirty-seven percent of Americans say the United Nations is doing a “good job” of solving the problems it faces, similar to what Gallup has measured since 2013 but above the 2009 low of 26%. The latest figure comes as President Donald Trump considers a directive to significantly reduce U.S. contributions to international organizations, including the U.N.”

Why the Trump Agenda Is Moving Slowly: The Republicans’ Wonk Gap

Neil Irwin: “When Republicans won in November, it looked as if 2017 would reflect a major legislative shift to the right. But two months into the 115th Congress and six weeks into the Trump administration, progress on fulfilling Republicans’ major domestic policy goals is looking further away, not closer.”

“But there’s another element in the sluggish or nonexistent progress on major elements of the Republican agenda. Large portions of the Republican caucus embrace a kind of policy nihilism. They criticize any piece of legislation that doesn’t completely accomplish conservative goals, but don’t build coalitions to devise complex legislation themselves.”

“The roster of congressional Republicans includes lots of passionate ideological voices. It is lighter on the kind of wonkish, compromise-oriented technocrats who move bills.”

‘America First’ Really Means ‘Americans Last’

“‘America first’ really means ‘Americans last,'” Catherine Rampell writes for The Washington Post.

“On Monday, the Trump administration told reporters that the president’s budget will boost annual defense spending by 10 percent, or about $54 billion.”

“Trump is nominally a fiscal conservative (with the help of some fuzzy math). So he also promised that his increase in defense spending would be offset by equivalent cuts to non-defense spending.”

“And who suffers as a result? Regular Americans, including millions who voted for Trump.”