But Our Junk is so Cheap We Should All Be Happy Shoppers!
Mexico Refuses to Pay for Our Glorious Wall. Generous CEO to Stay in Mexico to Help Low Wage Workers to Earn Enough to Eat Bread Crumbs.
NAFTA's legacy
The trade deal many Americans blame for job losses has a complicated record of success and failure. Here's everything you need to know:
What did NAFTA do?
The North American Free Trade Agreement was a 1994 accord between the U.S., Canada, and Mexico that lifted tariffs on most products moving between the three nations. It was also the first trade agreement to include protections for intellectual property. NAFTA had bipartisan backing, having been negotiated by a Republican president - George H.W. Bush - and signed by his Democratic successor, Bill Clinton, after passing the Senate 61-38. But it has also met stiff opposition across the political spectrum. The nascent agreement was a flashpoint in the 1992 presidential race (see below); a quarter-century later, NAFTA and other free-trade deals fueled a wave of populist anger among voters who blamed outsourcing for the major decline in U.S. manufacturing jobs. During the 2016 campaign, NAFTA was flogged relentlessly by Democratic Sen. Bernie Sanders and by Republican Donald Trump, who called it "the single worst trade deal ever approved in this country." Now President Trump says he will fulfill his campaign promise to renegotiate the pact.
What was the rationale of the agreement?
There were several goals. The U.S. wanted to bring Mexico's developing economy into the first world, on the premise that creating jobs there would curb illegal immigration. As then-Mexican President Carlos Salinas de Gortari put it, his country would "export goods, not people." For the U.S. and Canada, meanwhile, Mexico was seen as fertile ground for exports and investment. President Clinton predicted that free trade would boost the economies of all three countries. "NAFTA means jobs," he said. "American jobs, and good-paying American jobs. If I didn't believe that, I wouldn't support this agreement."
So how did it work out?
The broad consensus is that NAFTA has a mixed legacy. A 2015 report by the nonpartisan Congressional Research Service said the deal "did not cause the huge job losses feared by the critics or the large economic gains predicted by supporters," and called NAFTA's net effect on the U.S. economy "relatively modest." Trade between the three signatories has grown considerably, from about $290 billion in 1993 to more than $1.1 trillion last year. Supporters say the agreement has helped employ 14 million Americans in fields such as retail, finance, and agriculture, and provided cheaper goods to U.S. consumers. "About 5 million American jobs are directly tied to trade with Mexico, and 9 million are tied to trade with Canada," says University of Calgary economist Eugene Beaulieu. But critics argue that the downsides of NAFTA and other trade deals outweigh the benefits.
What downsides?
In the two decades since NAFTA, the balance of trade between the U.S. and Mexico flip-flopped, from a $1.7 billion American surplus to a $49.2 billion deficit. Analysts such as Robert Scott of the Economic Policy Institute estimate that nearly 700,000 U.S. workers lost good jobs as a result, mostly in manufacturing; those who kept their jobs saw wages flatline, at least partly because of Mexican competition. "The most-affected workers were college dropouts working in industries that depended heavily on tariff protections in place prior to NAFTA," says University of Virginia economist John McLaren. But economists say that NAFTA alone didn't cause their pain, citing the rise of China as an economic powerhouse, the 2008 financial collapse, and - above all, perhaps - automation and new technology that rendered many 20th-century jobs obsolete.
Did NAFTA help curb illegal immigration?
Clearly, the deal hasn't delivered on that promise: The number of undocumented immigrants in the U.S. quadrupled after NAFTA's signing, from 3 million in 1994 to 12 million in 2007. The impact on Mexico's economic growth and wages also has not met expectations; while the country probably gained about 600,000 jobs in the manufacturing sector, it lost at least 2 million more in agriculture, thanks to cheap imports of U.S. corn and other produce. With their economy also weighed down by competition from China and a range of domestic factors, "jobless Mexicans migrated to the U.S. at an unprecedented rate of half a million a year after NAFTA," says Laura Carlsen of the nonprofit Center for International Policy. Since the Great Recession of 2008, however, the net influx has been negative, with more Mexican nationals returning to their home country than arriving.
What does Trump plan to do?
He's floated several options, including threatening to pull out of NAFTA altogether and impose a 35 percent tariff on Mexican goods. It's likely he'll first try to renegotiate the deal - but he's been vague about the changes he'd seek. The U.S. Chamber of Commerce and other business groups fear that radical revisions could wreck the complex interdependency of the three countries' economies and imperil millions of jobs. Most economists agree NAFTA could use updating; one popular proposal is to require Mexico to increase wages, labor standards, and environmental rules, which would lessen the advantages of outsourcing. But most economists do not believe that changing NAFTA - or scrapping it - will usher in a Rust Belt renaissance. "Far more jobs have been automated than outsourced," says economist Zachary Karabell. "Most of the jobs that disappeared over the past decades can never exist again. Period."
That 'giant sucking sound'
Third-party candidate H. Ross Perot roiled the 1992 presidential election with populist economic rhetoric - including fierce opposition to NAFTA. Like Trump, the Texan was a blunt billionaire who won a large following by advocating protectionist trade policies. Perot, now 86, created one of the more memorable moments in the annals of presidential debates in an attack on NAFTA. "We have got to stop sending jobs overseas," he said, warning that if business owners could move their factories to Mexico and "pay a dollar an hour for labor," the resulting loss of American jobs would create "a giant sucking sound." Whether Perot's zinger proved prescient is hotly debated, but his message resonated: He drew 18.9 percent of the popular vote and, most experts agree, enough conservative support to help Democrat Bill Clinton defeat incumbent Republican George H.W. Bush.
NAFTA's legacy
What happened when factory jobs moved from Warren, Ohio, to Juarez, Mexico
Chris Wade reached into the darkness to silence his blaring alarm clock. It was 4:30 on a frigid winter morning in Warren, Ohio, and outside a fresh layer of snow blanketed the yard.
Thank God, Wade thought to himself. He would be able to get out his plow and make some quick cash.
Money never used to be a problem for Wade, 47, who owned a house with a pool back when he worked at Delphi Automotive, a parts manufacturer that for years was one of the biggest employers in this wooded stretch of northeastern Ohio. But 10 years after taking a buyout as part of Delphi’s ongoing shift of production out of the United States and into Mexico and China, the house and the pool were gone.
Berta Alicia Lopez, 54, is the new face of Delphi. On a recent chilly morning, she woke before sunrise on the outskirts of Juarez, Mexico, and caught an unheated bus that dropped her an hour away at the Delphi plant.
Lopez earns $1 an hour assembling cables and electronics that will eventually be installed into vehicles - the same work that Wade once did for $30 an hour. A farmer’s daughter who grew up in an impoverished stretch of rural Mexico, Lopez is proud to own a used Toyota sedan and a concrete block house.
She frequently thanks God for the work, even if it is in a town troubled by drug violence, even if she doesn’t see many possibilities for earning more or advancing.
The two workers live 1,800 miles and a border apart and have never met. But their stories embody the massive economic shift that has accompanied the rise of free trade.
In the United States, that shift has contributed to the loss of jobs that once helped workers buy homes, pay for health insurance and send children to college. In Mexico, it brought jobs - though they didn’t create the kind of broad, middle-class prosperity they once had in America.
President Trump has pledged to bring factory work back. But it may be too late to turn back the clock on the powerful forces shaping the lives of Wade and Lopez and two cities, one American and one Mexican, that remain inextricably linked by the geography of global economics.
To hear Trump tell it, free trade deals and globalization have produced clear winners and clear losers.
Delphi had been reducing its U.S. workforce for years before it moved most of its operations overseas in 2006.
“Every time I see a Delphi and I see companies leaving, that wall gets a little bit higher, and keeps going up,” Trump promised at a campaign rally in Ohio a few days before the election. “We are going to fight Delphi and other companies and say, ‘Don't leave us, because there are going to be consequences.’”
He has pledged to tax imports from Mexico and renegotiate the North American Free Trade Agreement, which eliminated most tariffs on the continent and, in Trump’s view, enriched Mexico at the expense of middle America.
But the real legacy of NAFTA, which took effect in 1994, is more complicated.
Nobody disputes that the loss of manufacturing has left a bruising mark in parts of the U.S., especially in places like the Rust Belt, where lower paying service industry jobs are increasingly replacing middle class factory positions. But many economists say changes in technology, along with competition with China, are more to blame than NAFTA.
The period of steepest decline in manufacturing jobs, which fell from 17 million to 11 million between 2000 and 2010, is substantially attributable to the free import of goods manufactured more cheaply in China and increasing reliance on machines to do the jobs humans once did, according to Gordon Hanson, an economist and trade expert at UC San Diego.
South of the border, free trade has indeed helped modernize Mexico by creating millions of jobs since the passage of NAFTA, boosting investment flow and helping to diversify the country’s manufacturing sector. Mexican workers now help build everything from Whirlpool washing machines to Bombardier jets.
But wages have remained low, so that Mexico remains attractive to manufacturers who might otherwise be tempted to locate in China or elsewhere in Asia. Since NAFTA went into effect, there has been no change in the number of Mexicans living below the poverty line - more than half.
Now, as Trump pushes companies to cancel plans for new factories in Mexico and vows to renegotiate trade deals, it appears more dramatic change is on the horizon.
His administration has proposed a 20% tax on imports from Mexico and other countries with which the U.S. has a trade deficit. Economists say the plan poses a serious threat to Mexico, which sends roughly 80% of its exports to the U.S., and whose peso has plummeted amid fears of what the Trump administration may do.
“It’s a new era,” Mexico’s president, Enrique Peña Nieto, said in a recent speech, warning that if trade deals are opened up, everything - including Mexico’s cooperation with the U.S. on matters of immigration and security - will be up for negotiation.
Lopez is only vaguely aware of Trump - she’s too busy for politics.
Wade said he just wants things to go back to the way they were.
But even he sometimes wonders: “Is it too late?”
The snow kept falling, so Wade called up some buddies he works with and fired up his plow.
He sipped coffee from a thermos as he wove along a country lane through a landscape that looked like a Thomas Kinkade painting, with cornfields and churches and quaint clapboard houses all cloaked in white.
His first job was to clear the driveway of an industrial park that once belonged to Delphi.
“That’s when times was good,” Wade said in his raspy drawl. “That’s when I liked this place.”
Delphi began as Packard Electric, which started out in Warren in 1890 making light bulbs, but later branched out to auto parts. It became a division of General Motors in 1932, eventually expanding to include factories across the U.S.
The company’s factories in Warren paid middle class wages and helped build a prosperous city, with bustling streets lined with handsome brick buildings.
Both of Wade’s parents worked for Packard, earning enough to take the family on summer vacations and build a swimming pool in the backyard. Growing up, Wade heard stories at the dinner table each night about what had happened that day on the factory floor.
By then, Packard had started reducing its U.S. workforce by moving some of its operations to Mexico to take advantage of lower labor costs in cities such as Juarez, which was inviting foreign companies to build factories there while paying minimal taxes. The threat that more jobs could be shifted overseas forced union representatives in Ohio to make concessions in salaries and benefits.
Still, Wade’s brother and sister-in-law went to work at the Warren factory after high school and Wade figured he’d land there too.
By the time he did - in 1993, after a stint in the Navy that ended with a knee injury - the union workforce in Warren had dropped to less than 9,000, compared with 13,000 a decade earlier.
Still, Wade was happy with his life. He worked nights on the assembly line and cashed his paychecks every Thursday at the bar across the street. On days off, he went duck shooting with his chocolate Labrador, Hunter.
By the early 2000s, after Packard had been renamed Delphi Automotive Systems and spun off as a company independent of GM, Wade had the house and pool. His wife drove a brand new Trailblazer, and he drove a new Chevrolet pickup.
He had no idea what was coming.
Lopez grew up in Bermejillo, a dusty town in the state of Durango, where her stepfather spent his days in the sun, irrigating cotton and melon fields. Her mom had pulled her out of school when she was in fifth grade.
“Why study if you’re just going to work and have babies?” her mother told her.
Sure enough, by the time she was 17 she had a son, the first of her five children.
For centuries, people in Bermejillo made their living in the fields, and Lopez had little reason to think she would be any different.
But NAFTA made things hard on small Mexican farmers, who found themselves competing with imports from giant U.S. agribusinesses, many of which received healthy subsidies from the U.S. government. In places like Bermejillo, a generation of young people were suddenly out of work, and many headed north to the U.S.
Others went to frontier towns such as Juarez.
As NAFTA took effect, Juarez was transformed overnight from a desert oasis best known for its nightclubs and casinos into a sprawling grid of concrete industrial buildings intersected by dirt roads. The population grew faster than officials could build highways, schools and other infrastructure.
Migration to cities like Juarez also marked a cultural shift. Parents worked all day, and without extended family to look after them, children often found themselves alone. Drug cartels, whose power was growing, found easy recruits. As the city erupted into gang warfare, murders spiked, along with suicides and violence against women.
Lopez had been working in a cafe for $5 a week when a truck driver passing through town told her about new factory jobs up north. She arrived in Juarez in 1996 with her husband and five children. Her eldest son, then 16, who had not been able to find work in Durango, immediately found a job at a maquiladora, as they call the U.S. factories that had begun to proliferate along the Mexican side of the border.
So did Lopez, at Delphi, where on her first day she was so nervous she offered to clean the bathrooms instead of working on the floor.
“God helped me,” she recalled. “However good or bad, at least we had work.”
She took to factory life - gossiping with the other workers on breaks, earning the equivalent of a GED in classes offered after her shifts, making peace with living in a big city far from home. Then in 2001, her second eldest son committed suicide.
She was so despondent after his death that for the first time she stayed home from work. One of her managers at Delphi traveled to her neighborhood and gently persuaded her to return to the factory floor.
Lopez thought about returning to Durango, but she knew there would be no good jobs there. She resigned herself to the fact that the Delphi factory was probably the best place she’d ever work, and that Juarez was now her home.
“If I didn't have the job, I wouldn't eat,” she said.
Delphi had its own listing on the New York Stock Exchange, but its fortunes still rode on General Motors, its biggest customer. When the car company slumped in 2004, the transnational auto parts maker went into a tailspin.
The next year - amid an accounting fraud scandal in which the SEC fined several top executives - Delphi filed for bankruptcy.
Its board hired a new chief executive, Robert Miller, who complained that the company’s U.S. workers were overpaid, with labor costs triple that of other unionized auto suppliers.
In March 2006, Delphi announced it was closing or selling 21 of its 29 American plants, a move that eliminated more than 20,000 jobs, or about two-thirds of its total workforce. Operations were shipped to factories in China or Mexico, where Delphi now has about 70,000 employees working at factories in 20 cities.
Most of the plants in Warren remained open, but with a much smaller workforce. While Miller got a sendoff package that by one account was worth $35 million, workers were urged to take a buyout and warned that if they stayed, their wages would drop from an average of $29 an hour to $16.50.
On the day he walked away from Delphi with a buyout package worth $140,000, Wade was, as he put it, “fired up.” “The CEOs and the guys at the top make millions while everybody else can barely survive,” he said. “It’s not right.”
In Trumbull County, the former manufacturing and steel stronghold where Warren is located, the Delphi cuts felt like kicking a guy who was already down.
Wade’s post-Delphi years were not easy. Shortly after leaving the factory, he went through a divorce and narrowly avoided prison after being pulled over while drunk and with unlicensed guns in his car.
He had received his truck driver's license, but the DUI eliminated that career plan. He earned a certification to sell insurance, but that didn’t pan out either.
He works in roofing now during the summer and plows snow in the winter. After a decade, he’s making about what he was when he worked at Delphi. But he doesn’t have the security of a pension, paid vacation or health insurance. If he had kept his job at Delphi, he would be just seven years from retirement.
Wade doesn’t want to hear about the Mexican workers who replaced him. He boils when he hears what low wages they get paid, and is equally angry about immigrants who work illegally in the U.S.
He liked that Trump called out Mexico on the issue. It was the kind of talk that helped persuade Wade, a lifelong Democrat and union member, to give Trump his vote. He was joined by many others in Trumbull County, which voted Republican for president for the first time since 1972.
Brian Lutz, shop steward with the union that once represented Wade, said he understands the anti-establishment anger.
“I hear all the time people who say why would I continue to vote for a Democrat when all the people I worked with are gone and the Democrats haven’t done what we sent them to do?” he said.
His union recently negotiated a contract that starts workers at $13 an hour. That’s about 10 times as much as Lopez takes home from the Delphi plant in Juarez today, two decades into her career there.
At the end of the shift in Juarez one recent afternoon, hundreds of workers streamed out of the Delphi factory toward the long line of white buses that take them home. Lopez climbed onto No. 6621, which headed east along the U.S. border, past dozens of other factories and a slew of big box stores.
It dropped Lopez in New Lands, a grid-like housing development that rises from the sand on the outskirts of the city. Overweight and suffering from diabetes, she shuffled past the Toyota in her driveway.
Trump’s warnings to companies to keep their business in America are already having an effect on the Mexican economy. Last month, after being criticized by Trump on Twitter, Ford announced it is canceling plans to build a new $1.6-billion factory in Mexico, opting instead to hire workers in Michigan.
Trump claimed credit, though the company said market demand was a bigger factor. The Mexico factory was designed to build small cars, but as gas prices have fallen, demand has shifted toward bigger models made in Michigan.
But some companies that produce goods in Mexico say there’s no going back to the U.S. That includes Delphi.
The company just announced a plan for more layoffs in Warren, where only 1,500 employees remain.
Speaking at Barclay's Global Automotive Conference in New York in December, Delphi’s chief financial officer Joe Massaro explained what he thought would happen to Delphi under several Trump trade scenarios.
If Trump were to close the border with Mexico outright, “in less than a week, all the people who voted for him in Michigan and Ohio would be out of work,” Massaro argued, underscoring the fact that many factories in the U.S., including car makers in Detroit, depend on parts made in Mexico.
If the United States were to withdraw from NAFTA and start taxing imports from Mexico again, Delphi would continue doing business in Mexico, he said. The company would pass on the extra cost to its suppliers or to consumers, or would find a way to reduce its production costs - which could mean layoffs or salary cuts in Mexico.
What it all means for Lopez and her family, she is not sure.
Of her four children, three work in factories.
For the last couple of years, every spare peso has gone to pay the college tuition for her youngest son, Sergio, who is studying computer engineering. He dreams of starting a software company that can compete with U.S. firms.
He has watched his mom’s life, and wants to earn more than factory wages.
“It's a lot of work for little money,” he said.
What happened when factory jobs moved from Warren, Ohio, to Juarez, Mexico
Trump and the Contradictions of Capitalism
Moscow.
The first weeks of Trump’s presidency did not resemble honeymoon normally enjoyed by newly elected leaders of the United States. The severity and aggressiveness of the debate is unprecedented. Liberals threw at Trump all of their hatred, while the conservative public - all of its delight. Opinions in Russia are split roughly along the same lines as they are in America.
The situation on the Left is much more complex. While some repeat, like well-trained parrots, the talking points of liberal propaganda, passionately quoting the CNN and the New York Times, the others, exhibit at least some schadenfreude about the disintegration of Democratic Party, and the collapse of free trade agreements. However, even in the last case, the discussion, with a few exceptions, does not go beyond the question of whether we like or do not like the 45th president of the US and his decisions.
Assessments of Trump’s personality, and even actions, are the last thing we need if we are to understand the perspectives of his term as a president of the US. We would be much better served by an analysis of the processes unfolding before us. Meanwhile, the decisions the new president made so far are a clear evidence of the contradictory character of his policies. Trump and his entourage, perhaps, did not realize the extent of the problem yet, but future course of events will force them to do so.
Wavering of Senator Bernie Sanders, who expresses approval of the decisions of the White House one day, while unleashing a fierce criticism the very next, is revealing in its own way.
In fact, a number of actions and statements by Donald Trump put him on par with the anti-globalists who protested in Seattle in 1999.
But his other decisions and statements unequivocally portray the president as not just a conservative, but as an ardent supporter of the free market and liberal economic doctrines.
On the one hand, Trump cancels Trans-Pacific Partnership agreement and insists on revising NAFTA, the embodiment of neoliberal principles. He berates NATO, talks about Canada-style public health insurance, calls for lower drug prices. President meets with trade unionists at the White House and discusses joint efforts to create jobs. But on the same day, President cancels restrictions and regulations governing the activities of the major Wall Street banks, while negotiations on the price control of medicines turn into promises to lower taxes for manufacturers.
The nomination of Betsy DeVos as a head of the Department of Education is a complete scandal. And not only because of her conservative views, but also because the lady who was put in charge of the public schools, is in a sharp conflict with the professional community - how does this fit in with the promise to return power to the people?
It is most likely, though, that from Trump’s point of view, there is no contradiction. Yes, Betsy DeVos and teachers experience mutual hatred, but on the other hand, she is in agreement with the most ignorant part of parents, who are confident that the less children learn in school, the better it is for them.
President, like most of his voters, does not believe in global warming, but he believes in free markets and low taxes. At the same time, he believes that the US domestic market should be protected from unfair foreign competition. Simply speaking: liberalism for “our own” protectionism for the “strangers”.
This is exactly how American capitalism was developing in the first third of the twentieth century!
Alas, the times have changed. Transnational capital, formed by the end of the twentieth century, has changed the rules of the game not only globally, but also at the internal market. These new rules brought the world to the current systemic crisis. The collapse of the neo-liberal world order is a spontaneous and natural process, generated by its own self-destructive logic, and not by the ideological views of anti-globalists or Trump. This process of decay has begun long before the arrival of the current President in the White House. The victory of Trump is itself a consequence of the crisis, which has already fully unfolded and penetrated into all pores of the society. To the dismay of liberal intellectuals in London, Moscow and New York, this decay is irreversible. In 2016, politics has finally synchronized with the economics.
The principal difference between the 45th US president and his liberal opponents is not that he does not believe in globalization, but that he is aware of its collapse, and therefore does not attempt to save the crumbling system, but seeks to build a new policy which would take the new reality into consideration. The question is: which direction this policy will take.
If the collapse of the old system is, to some extent, a natural process, at least at the economic level, the formation of a new social order does not happen automatically. As a consequence of his intent to reconsider the rules of the game, Trump is faced with the need to introduce his own positive program. And here he inevitably faces the objective contradiction between the interests of different social and economic groups which see the necessity of change.
Consistent implementation of protectionist policies intended to resore the internal market will not be effective without measures aimed at regulation and reconstruction of the US economy.
One may call for re-industrialization of the United States on the basis of market principles, but the nature of these principles objectively prevents them from resolving this problem. If the situation was different, not only the problem would have been already solved to a certain extent, but also Trump would probably not have had a chance to occupy the Oval Office at the White House.
Attempts to balance the budget at the expense of the import duties, while reducing taxes to encourage production without reducing profits of financial corporations and raise wages of workers without affecting the interests of entrepreneurs, sooner or later will lead US president’s policies to a logical impasse. It will be impossible to come out of it without making a political choice in favor of one party or another. Contradictions will only worsen as the government will have to make decisions on the matters of foreign policy, provoking disagreements and crises within the administration.
In fact, the contradictions of Trump’s policy reflect the contradictions within the broad cross-class coalition that brought him to the White House. No matter what the liberal pundits say, these were the votes of workers who brought him the victory. Not the so-called “white men”, but the working class, who openly and, largely, in solidarity, made a stand against the Washington establishment. To a large extent his election campaign reproduced the ideas and slogans of the Left. Republican candidate was supported by farmers, clerks and provincial intelligentsia. This really was an uprising of the forgotten and resentful provincial America against the spoiled people in California and the cosmopolitan officials from Washington, who comfortably exploit cheap labor of illegal migrants, against the liberal elite, who turned their back on their own country long time ago.
But Donald Trump is not a worker or a farmer. He and his entourage are very typical representatives of a medium size American enterprise which is tied to the domestic market and is in conflict with transnational corporations.
All groups that have supported him were equally offended and humiliated by the policies pursued by the metropolitan liberals and were interested in reconsideration of these policies. They all need protectionism. But at this point their unity ends. The interests of classes and groups, who led Trump to the White House, do not coincide in the positive part of the program.
On the one hand, the ability to unite a broad cross-class coalition around a single leader or a party has always been the main source of strength for the populist movements. On the other hand, the objective contradictions of class interests have invariably been their stumbling block. The long-term success, and often the physical survival of populist leaders have always depended on whether they were able to, by changing the configuration and maneuvering, prevent the collapse of the block they lead. Would the leader be able to reshape it on the go, making a choice in favor of the correct forces at the right moment? Sooner or later the necessity will arise not only to side with one part of his supporters against the other, but also to sacrifice many of his political friends, and sometimes even the interests of his own class.
Donald Trump will inevitably face such choices. Not just a place of 45th president in US history, but also his personal fate, which has potential to be more than dramatic, depends on when, how and for whose benefit he will make these choices. The political and institutional crisis of American society has gone too far. The country is split, and the old order, for the restoration of which the Liberals are clamoring, is not only impossible to restore, but receives blow after blow every day. And the organizers of the liberal opposition campaign are themselves smashing the very public institutions, which they previously have relied upon for their power.
In order to get rid of Trump, they need a coup. Whether this scenario will be tried in the hard (force) or soft (impeachment) variant, it would be a major blow to the institutions of American democracy.
It can be assumed with a good reason that the historic mission of Trump is the destruction of the existing liberal order. The positive work will be performed by other politicians and social movements. But these movements and leaders will only form in the struggle that is unfolding today. And how that happens, depends on the fate of Trump and the reforms initiated by him.
Institutional crisis, undermining the existing two-party system in the United States and the dominance of the Washington establishment, creates prospects for the left to participate in serious politics. The sudden success of Bernie Sanders in the primaries in 2016 demonstrated the possible scale of the opportunities. But the Left would only be able to use these opportunities on one condition - if it does not allow the Liberal circles to transform them into political extras fighting to protect the dying order. Otherwise, they will go to the bottom together.
Trump and the Contradictions of Capitalism
Under Stress, US-Mexico Intelligence Ties Could Fray
Some say security cooperation could be crucial in Mexico's response to economic threats from the U.S.
Mexico is working to strike the right tone in responding to economic threats issued by the new United States administration, and security is one serious chip to play.
Intelligence cooperation between the two countries has grown in the last decade on issues important to both countries: illegal immigration, border security, drugs and human trafficking, though that relationship may be under more scrutiny in Mexico.
The capture of Joaquín “El Chapo” Guzmán by Mexican Marines one year ago serves as a high-profile example of that intelligence sharing.
Guzmán is the alleged drug trafficker and killer extradited to the U.S just last month. After Guzmán was taken in, the U.S. Drug Enforcement Administration released a statement calling the arrest "a significant achievement in our shared fight against organized crime.” There are published reports that U.S. intelligence on Guzmán's whereabouts led to the takedown.
But will this kind of intelligence sharing continue? Guillermo Valdés is skeptical.
"There will be no incentives to collaborate with the United States," he said
During Valdés' time as the head of Mexico's National Intelligence Agency from 2007-2011, and afterwards, intelligence collaboration deepened. Agents from both countries now work together on Mexico's southern border with Guatemala to stop U.S.-bound migrants. The DEA is active inside Mexico, and the U.S. Border Patrol is training Mexican border police inside the country. But Valdés said that relationship may fray if a suite of economic threats against Mexico is carried out by the U.S.
"If Mexico decides to slow cooperation on security issues, United States will be hurt,” he said.
Mexico's new foreign secretary, Luis Videgaray, recently told a television host that his country will only bend so far.
“Mexico has limits,” Videgaray said. “Mexico is willing to say, ‘No,’ when national pride and dignity are threatened.”
Former intelligence chief Valdés said Mexico should consider expelling DEA agents should the U.S. impose a border tax on Mexican goods or expand the border wall.
"The belief that they can make a safe border with a wall? That's a false idea,” he laughed. “That’s not true. And they know it."
“Put yourself in the shoes of a Mexican agent,” Valdés continued. “If I see that the U.S. government now is attacking Mexico, I will not be enthusiastic about doing a good job to stop, for example, drugs going to the United States."
Valdés worked with American agents after Mexico's previous president, Felipe Calderón, went to war with Mexican drug cartels in 2006, a strategy backed by the U.S. A decade later, Valdés believes Mexico can withdraw support on any number of security fronts.
"The stopping of destroying plantations of amapola,” Valdés said, referring to the poppy that makes heroin. “Or stopping collaboration with the DEA agents in exchange of information about drug traffickers."
One of the people Valdés worked closely with is the former deputy director of the U.S. Defense Intelligence Agency, David Shedd.
"I think the effects will be seen very quickly,” Shedd said.
When the U.S. deports someone to Mexico, he said, the U.S. needs Mexican confirmation of the person's identity. Shedd isn't so sure Mexico will continue to furnish that information.
"They may just sit on it or may not pursue it. These are very fluid and ongoing conversations that go on every day and every hour of the day between our two countries,” something Shedd said took a decade to get going.
"And I just wouldn't want to see that decreased as a result of a tone that makes the Mexicans on edge. If cornered, if somehow pushed against the wall politically, there could be repercussions."
Valdés sees little value in an antagonistic or combative relationship.
“It’s better to cooperate and not to fight.”
He said Mexico isn't just looking for criminal kingpins. His colleagues are also working to stop migrants from what Mexico calls "restricted nationalities" - countries where terrorism is prevalent. "People who come from countries with the presence of Al-Qaeda or ISIS.”
That cooperation could come to an end, he said. But he is hopeful that a security relationship that has taken decades to build will not be weakened, despite the threats of a new U.S. administration.
Under Stress, US-Mexico Intelligence Ties Could Fray
NAFTA's legacy
The trade deal many Americans blame for job losses has a complicated record of success and failure. Here's everything you need to know:
What did NAFTA do?
The North American Free Trade Agreement was a 1994 accord between the U.S., Canada, and Mexico that lifted tariffs on most products moving between the three nations. It was also the first trade agreement to include protections for intellectual property. NAFTA had bipartisan backing, having been negotiated by a Republican president - George H.W. Bush - and signed by his Democratic successor, Bill Clinton, after passing the Senate 61-38. But it has also met stiff opposition across the political spectrum. The nascent agreement was a flashpoint in the 1992 presidential race (see below); a quarter-century later, NAFTA and other free-trade deals fueled a wave of populist anger among voters who blamed outsourcing for the major decline in U.S. manufacturing jobs. During the 2016 campaign, NAFTA was flogged relentlessly by Democratic Sen. Bernie Sanders and by Republican Donald Trump, who called it "the single worst trade deal ever approved in this country." Now President Trump says he will fulfill his campaign promise to renegotiate the pact.
What was the rationale of the agreement?
There were several goals. The U.S. wanted to bring Mexico's developing economy into the first world, on the premise that creating jobs there would curb illegal immigration. As then-Mexican President Carlos Salinas de Gortari put it, his country would "export goods, not people." For the U.S. and Canada, meanwhile, Mexico was seen as fertile ground for exports and investment. President Clinton predicted that free trade would boost the economies of all three countries. "NAFTA means jobs," he said. "American jobs, and good-paying American jobs. If I didn't believe that, I wouldn't support this agreement."
So how did it work out?
The broad consensus is that NAFTA has a mixed legacy. A 2015 report by the nonpartisan Congressional Research Service said the deal "did not cause the huge job losses feared by the critics or the large economic gains predicted by supporters," and called NAFTA's net effect on the U.S. economy "relatively modest." Trade between the three signatories has grown considerably, from about $290 billion in 1993 to more than $1.1 trillion last year. Supporters say the agreement has helped employ 14 million Americans in fields such as retail, finance, and agriculture, and provided cheaper goods to U.S. consumers. "About 5 million American jobs are directly tied to trade with Mexico, and 9 million are tied to trade with Canada," says University of Calgary economist Eugene Beaulieu. But critics argue that the downsides of NAFTA and other trade deals outweigh the benefits.
What downsides?
In the two decades since NAFTA, the balance of trade between the U.S. and Mexico flip-flopped, from a $1.7 billion American surplus to a $49.2 billion deficit. Analysts such as Robert Scott of the Economic Policy Institute estimate that nearly 700,000 U.S. workers lost good jobs as a result, mostly in manufacturing; those who kept their jobs saw wages flatline, at least partly because of Mexican competition. "The most-affected workers were college dropouts working in industries that depended heavily on tariff protections in place prior to NAFTA," says University of Virginia economist John McLaren. But economists say that NAFTA alone didn't cause their pain, citing the rise of China as an economic powerhouse, the 2008 financial collapse, and - above all, perhaps - automation and new technology that rendered many 20th-century jobs obsolete.
Did NAFTA help curb illegal immigration?
Clearly, the deal hasn't delivered on that promise: The number of undocumented immigrants in the U.S. quadrupled after NAFTA's signing, from 3 million in 1994 to 12 million in 2007. The impact on Mexico's economic growth and wages also has not met expectations; while the country probably gained about 600,000 jobs in the manufacturing sector, it lost at least 2 million more in agriculture, thanks to cheap imports of U.S. corn and other produce. With their economy also weighed down by competition from China and a range of domestic factors, "jobless Mexicans migrated to the U.S. at an unprecedented rate of half a million a year after NAFTA," says Laura Carlsen of the nonprofit Center for International Policy. Since the Great Recession of 2008, however, the net influx has been negative, with more Mexican nationals returning to their home country than arriving.
What does Trump plan to do?
He's floated several options, including threatening to pull out of NAFTA altogether and impose a 35 percent tariff on Mexican goods. It's likely he'll first try to renegotiate the deal - but he's been vague about the changes he'd seek. The U.S. Chamber of Commerce and other business groups fear that radical revisions could wreck the complex interdependency of the three countries' economies and imperil millions of jobs. Most economists agree NAFTA could use updating; one popular proposal is to require Mexico to increase wages, labor standards, and environmental rules, which would lessen the advantages of outsourcing. But most economists do not believe that changing NAFTA - or scrapping it - will usher in a Rust Belt renaissance. "Far more jobs have been automated than outsourced," says economist Zachary Karabell. "Most of the jobs that disappeared over the past decades can never exist again. Period."
That 'giant sucking sound'
Third-party candidate H. Ross Perot roiled the 1992 presidential election with populist economic rhetoric - including fierce opposition to NAFTA. Like Trump, the Texan was a blunt billionaire who won a large following by advocating protectionist trade policies. Perot, now 86, created one of the more memorable moments in the annals of presidential debates in an attack on NAFTA. "We have got to stop sending jobs overseas," he said, warning that if business owners could move their factories to Mexico and "pay a dollar an hour for labor," the resulting loss of American jobs would create "a giant sucking sound." Whether Perot's zinger proved prescient is hotly debated, but his message resonated: He drew 18.9 percent of the popular vote and, most experts agree, enough conservative support to help Democrat Bill Clinton defeat incumbent Republican George H.W. Bush.
NAFTA's legacy
What happened when factory jobs moved from Warren, Ohio, to Juarez, Mexico
Chris Wade reached into the darkness to silence his blaring alarm clock. It was 4:30 on a frigid winter morning in Warren, Ohio, and outside a fresh layer of snow blanketed the yard.
Thank God, Wade thought to himself. He would be able to get out his plow and make some quick cash.
Money never used to be a problem for Wade, 47, who owned a house with a pool back when he worked at Delphi Automotive, a parts manufacturer that for years was one of the biggest employers in this wooded stretch of northeastern Ohio. But 10 years after taking a buyout as part of Delphi’s ongoing shift of production out of the United States and into Mexico and China, the house and the pool were gone.
Berta Alicia Lopez, 54, is the new face of Delphi. On a recent chilly morning, she woke before sunrise on the outskirts of Juarez, Mexico, and caught an unheated bus that dropped her an hour away at the Delphi plant.
Lopez earns $1 an hour assembling cables and electronics that will eventually be installed into vehicles - the same work that Wade once did for $30 an hour. A farmer’s daughter who grew up in an impoverished stretch of rural Mexico, Lopez is proud to own a used Toyota sedan and a concrete block house.
She frequently thanks God for the work, even if it is in a town troubled by drug violence, even if she doesn’t see many possibilities for earning more or advancing.
The two workers live 1,800 miles and a border apart and have never met. But their stories embody the massive economic shift that has accompanied the rise of free trade.
In the United States, that shift has contributed to the loss of jobs that once helped workers buy homes, pay for health insurance and send children to college. In Mexico, it brought jobs - though they didn’t create the kind of broad, middle-class prosperity they once had in America.
President Trump has pledged to bring factory work back. But it may be too late to turn back the clock on the powerful forces shaping the lives of Wade and Lopez and two cities, one American and one Mexican, that remain inextricably linked by the geography of global economics.
To hear Trump tell it, free trade deals and globalization have produced clear winners and clear losers.
Delphi had been reducing its U.S. workforce for years before it moved most of its operations overseas in 2006.
“Every time I see a Delphi and I see companies leaving, that wall gets a little bit higher, and keeps going up,” Trump promised at a campaign rally in Ohio a few days before the election. “We are going to fight Delphi and other companies and say, ‘Don't leave us, because there are going to be consequences.’”
He has pledged to tax imports from Mexico and renegotiate the North American Free Trade Agreement, which eliminated most tariffs on the continent and, in Trump’s view, enriched Mexico at the expense of middle America.
But the real legacy of NAFTA, which took effect in 1994, is more complicated.
Nobody disputes that the loss of manufacturing has left a bruising mark in parts of the U.S., especially in places like the Rust Belt, where lower paying service industry jobs are increasingly replacing middle class factory positions. But many economists say changes in technology, along with competition with China, are more to blame than NAFTA.
The period of steepest decline in manufacturing jobs, which fell from 17 million to 11 million between 2000 and 2010, is substantially attributable to the free import of goods manufactured more cheaply in China and increasing reliance on machines to do the jobs humans once did, according to Gordon Hanson, an economist and trade expert at UC San Diego.
South of the border, free trade has indeed helped modernize Mexico by creating millions of jobs since the passage of NAFTA, boosting investment flow and helping to diversify the country’s manufacturing sector. Mexican workers now help build everything from Whirlpool washing machines to Bombardier jets.
But wages have remained low, so that Mexico remains attractive to manufacturers who might otherwise be tempted to locate in China or elsewhere in Asia. Since NAFTA went into effect, there has been no change in the number of Mexicans living below the poverty line - more than half.
Now, as Trump pushes companies to cancel plans for new factories in Mexico and vows to renegotiate trade deals, it appears more dramatic change is on the horizon.
His administration has proposed a 20% tax on imports from Mexico and other countries with which the U.S. has a trade deficit. Economists say the plan poses a serious threat to Mexico, which sends roughly 80% of its exports to the U.S., and whose peso has plummeted amid fears of what the Trump administration may do.
“It’s a new era,” Mexico’s president, Enrique Peña Nieto, said in a recent speech, warning that if trade deals are opened up, everything - including Mexico’s cooperation with the U.S. on matters of immigration and security - will be up for negotiation.
Lopez is only vaguely aware of Trump - she’s too busy for politics.
Wade said he just wants things to go back to the way they were.
But even he sometimes wonders: “Is it too late?”
The snow kept falling, so Wade called up some buddies he works with and fired up his plow.
He sipped coffee from a thermos as he wove along a country lane through a landscape that looked like a Thomas Kinkade painting, with cornfields and churches and quaint clapboard houses all cloaked in white.
His first job was to clear the driveway of an industrial park that once belonged to Delphi.
“That’s when times was good,” Wade said in his raspy drawl. “That’s when I liked this place.”
Delphi began as Packard Electric, which started out in Warren in 1890 making light bulbs, but later branched out to auto parts. It became a division of General Motors in 1932, eventually expanding to include factories across the U.S.
The company’s factories in Warren paid middle class wages and helped build a prosperous city, with bustling streets lined with handsome brick buildings.
Both of Wade’s parents worked for Packard, earning enough to take the family on summer vacations and build a swimming pool in the backyard. Growing up, Wade heard stories at the dinner table each night about what had happened that day on the factory floor.
By then, Packard had started reducing its U.S. workforce by moving some of its operations to Mexico to take advantage of lower labor costs in cities such as Juarez, which was inviting foreign companies to build factories there while paying minimal taxes. The threat that more jobs could be shifted overseas forced union representatives in Ohio to make concessions in salaries and benefits.
Still, Wade’s brother and sister-in-law went to work at the Warren factory after high school and Wade figured he’d land there too.
By the time he did - in 1993, after a stint in the Navy that ended with a knee injury - the union workforce in Warren had dropped to less than 9,000, compared with 13,000 a decade earlier.
Still, Wade was happy with his life. He worked nights on the assembly line and cashed his paychecks every Thursday at the bar across the street. On days off, he went duck shooting with his chocolate Labrador, Hunter.
By the early 2000s, after Packard had been renamed Delphi Automotive Systems and spun off as a company independent of GM, Wade had the house and pool. His wife drove a brand new Trailblazer, and he drove a new Chevrolet pickup.
He had no idea what was coming.
Lopez grew up in Bermejillo, a dusty town in the state of Durango, where her stepfather spent his days in the sun, irrigating cotton and melon fields. Her mom had pulled her out of school when she was in fifth grade.
“Why study if you’re just going to work and have babies?” her mother told her.
Sure enough, by the time she was 17 she had a son, the first of her five children.
For centuries, people in Bermejillo made their living in the fields, and Lopez had little reason to think she would be any different.
But NAFTA made things hard on small Mexican farmers, who found themselves competing with imports from giant U.S. agribusinesses, many of which received healthy subsidies from the U.S. government. In places like Bermejillo, a generation of young people were suddenly out of work, and many headed north to the U.S.
Others went to frontier towns such as Juarez.
As NAFTA took effect, Juarez was transformed overnight from a desert oasis best known for its nightclubs and casinos into a sprawling grid of concrete industrial buildings intersected by dirt roads. The population grew faster than officials could build highways, schools and other infrastructure.
Migration to cities like Juarez also marked a cultural shift. Parents worked all day, and without extended family to look after them, children often found themselves alone. Drug cartels, whose power was growing, found easy recruits. As the city erupted into gang warfare, murders spiked, along with suicides and violence against women.
Lopez had been working in a cafe for $5 a week when a truck driver passing through town told her about new factory jobs up north. She arrived in Juarez in 1996 with her husband and five children. Her eldest son, then 16, who had not been able to find work in Durango, immediately found a job at a maquiladora, as they call the U.S. factories that had begun to proliferate along the Mexican side of the border.
So did Lopez, at Delphi, where on her first day she was so nervous she offered to clean the bathrooms instead of working on the floor.
“God helped me,” she recalled. “However good or bad, at least we had work.”
She took to factory life - gossiping with the other workers on breaks, earning the equivalent of a GED in classes offered after her shifts, making peace with living in a big city far from home. Then in 2001, her second eldest son committed suicide.
She was so despondent after his death that for the first time she stayed home from work. One of her managers at Delphi traveled to her neighborhood and gently persuaded her to return to the factory floor.
Lopez thought about returning to Durango, but she knew there would be no good jobs there. She resigned herself to the fact that the Delphi factory was probably the best place she’d ever work, and that Juarez was now her home.
“If I didn't have the job, I wouldn't eat,” she said.
Delphi had its own listing on the New York Stock Exchange, but its fortunes still rode on General Motors, its biggest customer. When the car company slumped in 2004, the transnational auto parts maker went into a tailspin.
The next year - amid an accounting fraud scandal in which the SEC fined several top executives - Delphi filed for bankruptcy.
Its board hired a new chief executive, Robert Miller, who complained that the company’s U.S. workers were overpaid, with labor costs triple that of other unionized auto suppliers.
In March 2006, Delphi announced it was closing or selling 21 of its 29 American plants, a move that eliminated more than 20,000 jobs, or about two-thirds of its total workforce. Operations were shipped to factories in China or Mexico, where Delphi now has about 70,000 employees working at factories in 20 cities.
Most of the plants in Warren remained open, but with a much smaller workforce. While Miller got a sendoff package that by one account was worth $35 million, workers were urged to take a buyout and warned that if they stayed, their wages would drop from an average of $29 an hour to $16.50.
On the day he walked away from Delphi with a buyout package worth $140,000, Wade was, as he put it, “fired up.” “The CEOs and the guys at the top make millions while everybody else can barely survive,” he said. “It’s not right.”
In Trumbull County, the former manufacturing and steel stronghold where Warren is located, the Delphi cuts felt like kicking a guy who was already down.
Wade’s post-Delphi years were not easy. Shortly after leaving the factory, he went through a divorce and narrowly avoided prison after being pulled over while drunk and with unlicensed guns in his car.
He had received his truck driver's license, but the DUI eliminated that career plan. He earned a certification to sell insurance, but that didn’t pan out either.
He works in roofing now during the summer and plows snow in the winter. After a decade, he’s making about what he was when he worked at Delphi. But he doesn’t have the security of a pension, paid vacation or health insurance. If he had kept his job at Delphi, he would be just seven years from retirement.
Wade doesn’t want to hear about the Mexican workers who replaced him. He boils when he hears what low wages they get paid, and is equally angry about immigrants who work illegally in the U.S.
He liked that Trump called out Mexico on the issue. It was the kind of talk that helped persuade Wade, a lifelong Democrat and union member, to give Trump his vote. He was joined by many others in Trumbull County, which voted Republican for president for the first time since 1972.
Brian Lutz, shop steward with the union that once represented Wade, said he understands the anti-establishment anger.
“I hear all the time people who say why would I continue to vote for a Democrat when all the people I worked with are gone and the Democrats haven’t done what we sent them to do?” he said.
His union recently negotiated a contract that starts workers at $13 an hour. That’s about 10 times as much as Lopez takes home from the Delphi plant in Juarez today, two decades into her career there.
At the end of the shift in Juarez one recent afternoon, hundreds of workers streamed out of the Delphi factory toward the long line of white buses that take them home. Lopez climbed onto No. 6621, which headed east along the U.S. border, past dozens of other factories and a slew of big box stores.
It dropped Lopez in New Lands, a grid-like housing development that rises from the sand on the outskirts of the city. Overweight and suffering from diabetes, she shuffled past the Toyota in her driveway.
Trump’s warnings to companies to keep their business in America are already having an effect on the Mexican economy. Last month, after being criticized by Trump on Twitter, Ford announced it is canceling plans to build a new $1.6-billion factory in Mexico, opting instead to hire workers in Michigan.
Trump claimed credit, though the company said market demand was a bigger factor. The Mexico factory was designed to build small cars, but as gas prices have fallen, demand has shifted toward bigger models made in Michigan.
But some companies that produce goods in Mexico say there’s no going back to the U.S. That includes Delphi.
The company just announced a plan for more layoffs in Warren, where only 1,500 employees remain.
Speaking at Barclay's Global Automotive Conference in New York in December, Delphi’s chief financial officer Joe Massaro explained what he thought would happen to Delphi under several Trump trade scenarios.
If Trump were to close the border with Mexico outright, “in less than a week, all the people who voted for him in Michigan and Ohio would be out of work,” Massaro argued, underscoring the fact that many factories in the U.S., including car makers in Detroit, depend on parts made in Mexico.
If the United States were to withdraw from NAFTA and start taxing imports from Mexico again, Delphi would continue doing business in Mexico, he said. The company would pass on the extra cost to its suppliers or to consumers, or would find a way to reduce its production costs - which could mean layoffs or salary cuts in Mexico.
What it all means for Lopez and her family, she is not sure.
Of her four children, three work in factories.
For the last couple of years, every spare peso has gone to pay the college tuition for her youngest son, Sergio, who is studying computer engineering. He dreams of starting a software company that can compete with U.S. firms.
He has watched his mom’s life, and wants to earn more than factory wages.
“It's a lot of work for little money,” he said.
What happened when factory jobs moved from Warren, Ohio, to Juarez, Mexico
Trump and the Contradictions of Capitalism
Moscow.
The first weeks of Trump’s presidency did not resemble honeymoon normally enjoyed by newly elected leaders of the United States. The severity and aggressiveness of the debate is unprecedented. Liberals threw at Trump all of their hatred, while the conservative public - all of its delight. Opinions in Russia are split roughly along the same lines as they are in America.
The situation on the Left is much more complex. While some repeat, like well-trained parrots, the talking points of liberal propaganda, passionately quoting the CNN and the New York Times, the others, exhibit at least some schadenfreude about the disintegration of Democratic Party, and the collapse of free trade agreements. However, even in the last case, the discussion, with a few exceptions, does not go beyond the question of whether we like or do not like the 45th president of the US and his decisions.
Assessments of Trump’s personality, and even actions, are the last thing we need if we are to understand the perspectives of his term as a president of the US. We would be much better served by an analysis of the processes unfolding before us. Meanwhile, the decisions the new president made so far are a clear evidence of the contradictory character of his policies. Trump and his entourage, perhaps, did not realize the extent of the problem yet, but future course of events will force them to do so.
Wavering of Senator Bernie Sanders, who expresses approval of the decisions of the White House one day, while unleashing a fierce criticism the very next, is revealing in its own way.
In fact, a number of actions and statements by Donald Trump put him on par with the anti-globalists who protested in Seattle in 1999.
But his other decisions and statements unequivocally portray the president as not just a conservative, but as an ardent supporter of the free market and liberal economic doctrines.
On the one hand, Trump cancels Trans-Pacific Partnership agreement and insists on revising NAFTA, the embodiment of neoliberal principles. He berates NATO, talks about Canada-style public health insurance, calls for lower drug prices. President meets with trade unionists at the White House and discusses joint efforts to create jobs. But on the same day, President cancels restrictions and regulations governing the activities of the major Wall Street banks, while negotiations on the price control of medicines turn into promises to lower taxes for manufacturers.
The nomination of Betsy DeVos as a head of the Department of Education is a complete scandal. And not only because of her conservative views, but also because the lady who was put in charge of the public schools, is in a sharp conflict with the professional community - how does this fit in with the promise to return power to the people?
It is most likely, though, that from Trump’s point of view, there is no contradiction. Yes, Betsy DeVos and teachers experience mutual hatred, but on the other hand, she is in agreement with the most ignorant part of parents, who are confident that the less children learn in school, the better it is for them.
President, like most of his voters, does not believe in global warming, but he believes in free markets and low taxes. At the same time, he believes that the US domestic market should be protected from unfair foreign competition. Simply speaking: liberalism for “our own” protectionism for the “strangers”.
This is exactly how American capitalism was developing in the first third of the twentieth century!
Alas, the times have changed. Transnational capital, formed by the end of the twentieth century, has changed the rules of the game not only globally, but also at the internal market. These new rules brought the world to the current systemic crisis. The collapse of the neo-liberal world order is a spontaneous and natural process, generated by its own self-destructive logic, and not by the ideological views of anti-globalists or Trump. This process of decay has begun long before the arrival of the current President in the White House. The victory of Trump is itself a consequence of the crisis, which has already fully unfolded and penetrated into all pores of the society. To the dismay of liberal intellectuals in London, Moscow and New York, this decay is irreversible. In 2016, politics has finally synchronized with the economics.
The principal difference between the 45th US president and his liberal opponents is not that he does not believe in globalization, but that he is aware of its collapse, and therefore does not attempt to save the crumbling system, but seeks to build a new policy which would take the new reality into consideration. The question is: which direction this policy will take.
If the collapse of the old system is, to some extent, a natural process, at least at the economic level, the formation of a new social order does not happen automatically. As a consequence of his intent to reconsider the rules of the game, Trump is faced with the need to introduce his own positive program. And here he inevitably faces the objective contradiction between the interests of different social and economic groups which see the necessity of change.
Consistent implementation of protectionist policies intended to resore the internal market will not be effective without measures aimed at regulation and reconstruction of the US economy.
One may call for re-industrialization of the United States on the basis of market principles, but the nature of these principles objectively prevents them from resolving this problem. If the situation was different, not only the problem would have been already solved to a certain extent, but also Trump would probably not have had a chance to occupy the Oval Office at the White House.
Attempts to balance the budget at the expense of the import duties, while reducing taxes to encourage production without reducing profits of financial corporations and raise wages of workers without affecting the interests of entrepreneurs, sooner or later will lead US president’s policies to a logical impasse. It will be impossible to come out of it without making a political choice in favor of one party or another. Contradictions will only worsen as the government will have to make decisions on the matters of foreign policy, provoking disagreements and crises within the administration.
In fact, the contradictions of Trump’s policy reflect the contradictions within the broad cross-class coalition that brought him to the White House. No matter what the liberal pundits say, these were the votes of workers who brought him the victory. Not the so-called “white men”, but the working class, who openly and, largely, in solidarity, made a stand against the Washington establishment. To a large extent his election campaign reproduced the ideas and slogans of the Left. Republican candidate was supported by farmers, clerks and provincial intelligentsia. This really was an uprising of the forgotten and resentful provincial America against the spoiled people in California and the cosmopolitan officials from Washington, who comfortably exploit cheap labor of illegal migrants, against the liberal elite, who turned their back on their own country long time ago.
But Donald Trump is not a worker or a farmer. He and his entourage are very typical representatives of a medium size American enterprise which is tied to the domestic market and is in conflict with transnational corporations.
All groups that have supported him were equally offended and humiliated by the policies pursued by the metropolitan liberals and were interested in reconsideration of these policies. They all need protectionism. But at this point their unity ends. The interests of classes and groups, who led Trump to the White House, do not coincide in the positive part of the program.
On the one hand, the ability to unite a broad cross-class coalition around a single leader or a party has always been the main source of strength for the populist movements. On the other hand, the objective contradictions of class interests have invariably been their stumbling block. The long-term success, and often the physical survival of populist leaders have always depended on whether they were able to, by changing the configuration and maneuvering, prevent the collapse of the block they lead. Would the leader be able to reshape it on the go, making a choice in favor of the correct forces at the right moment? Sooner or later the necessity will arise not only to side with one part of his supporters against the other, but also to sacrifice many of his political friends, and sometimes even the interests of his own class.
Donald Trump will inevitably face such choices. Not just a place of 45th president in US history, but also his personal fate, which has potential to be more than dramatic, depends on when, how and for whose benefit he will make these choices. The political and institutional crisis of American society has gone too far. The country is split, and the old order, for the restoration of which the Liberals are clamoring, is not only impossible to restore, but receives blow after blow every day. And the organizers of the liberal opposition campaign are themselves smashing the very public institutions, which they previously have relied upon for their power.
In order to get rid of Trump, they need a coup. Whether this scenario will be tried in the hard (force) or soft (impeachment) variant, it would be a major blow to the institutions of American democracy.
It can be assumed with a good reason that the historic mission of Trump is the destruction of the existing liberal order. The positive work will be performed by other politicians and social movements. But these movements and leaders will only form in the struggle that is unfolding today. And how that happens, depends on the fate of Trump and the reforms initiated by him.
Institutional crisis, undermining the existing two-party system in the United States and the dominance of the Washington establishment, creates prospects for the left to participate in serious politics. The sudden success of Bernie Sanders in the primaries in 2016 demonstrated the possible scale of the opportunities. But the Left would only be able to use these opportunities on one condition - if it does not allow the Liberal circles to transform them into political extras fighting to protect the dying order. Otherwise, they will go to the bottom together.
Trump and the Contradictions of Capitalism
Under Stress, US-Mexico Intelligence Ties Could Fray
Some say security cooperation could be crucial in Mexico's response to economic threats from the U.S.
Mexico is working to strike the right tone in responding to economic threats issued by the new United States administration, and security is one serious chip to play.
Intelligence cooperation between the two countries has grown in the last decade on issues important to both countries: illegal immigration, border security, drugs and human trafficking, though that relationship may be under more scrutiny in Mexico.
The capture of Joaquín “El Chapo” Guzmán by Mexican Marines one year ago serves as a high-profile example of that intelligence sharing.
Guzmán is the alleged drug trafficker and killer extradited to the U.S just last month. After Guzmán was taken in, the U.S. Drug Enforcement Administration released a statement calling the arrest "a significant achievement in our shared fight against organized crime.” There are published reports that U.S. intelligence on Guzmán's whereabouts led to the takedown.
But will this kind of intelligence sharing continue? Guillermo Valdés is skeptical.
"There will be no incentives to collaborate with the United States," he said
During Valdés' time as the head of Mexico's National Intelligence Agency from 2007-2011, and afterwards, intelligence collaboration deepened. Agents from both countries now work together on Mexico's southern border with Guatemala to stop U.S.-bound migrants. The DEA is active inside Mexico, and the U.S. Border Patrol is training Mexican border police inside the country. But Valdés said that relationship may fray if a suite of economic threats against Mexico is carried out by the U.S.
"If Mexico decides to slow cooperation on security issues, United States will be hurt,” he said.
Mexico's new foreign secretary, Luis Videgaray, recently told a television host that his country will only bend so far.
“Mexico has limits,” Videgaray said. “Mexico is willing to say, ‘No,’ when national pride and dignity are threatened.”
Former intelligence chief Valdés said Mexico should consider expelling DEA agents should the U.S. impose a border tax on Mexican goods or expand the border wall.
"The belief that they can make a safe border with a wall? That's a false idea,” he laughed. “That’s not true. And they know it."
“Put yourself in the shoes of a Mexican agent,” Valdés continued. “If I see that the U.S. government now is attacking Mexico, I will not be enthusiastic about doing a good job to stop, for example, drugs going to the United States."
Valdés worked with American agents after Mexico's previous president, Felipe Calderón, went to war with Mexican drug cartels in 2006, a strategy backed by the U.S. A decade later, Valdés believes Mexico can withdraw support on any number of security fronts.
"The stopping of destroying plantations of amapola,” Valdés said, referring to the poppy that makes heroin. “Or stopping collaboration with the DEA agents in exchange of information about drug traffickers."
One of the people Valdés worked closely with is the former deputy director of the U.S. Defense Intelligence Agency, David Shedd.
"I think the effects will be seen very quickly,” Shedd said.
When the U.S. deports someone to Mexico, he said, the U.S. needs Mexican confirmation of the person's identity. Shedd isn't so sure Mexico will continue to furnish that information.
"They may just sit on it or may not pursue it. These are very fluid and ongoing conversations that go on every day and every hour of the day between our two countries,” something Shedd said took a decade to get going.
"And I just wouldn't want to see that decreased as a result of a tone that makes the Mexicans on edge. If cornered, if somehow pushed against the wall politically, there could be repercussions."
Valdés sees little value in an antagonistic or combative relationship.
“It’s better to cooperate and not to fight.”
He said Mexico isn't just looking for criminal kingpins. His colleagues are also working to stop migrants from what Mexico calls "restricted nationalities" - countries where terrorism is prevalent. "People who come from countries with the presence of Al-Qaeda or ISIS.”
That cooperation could come to an end, he said. But he is hopeful that a security relationship that has taken decades to build will not be weakened, despite the threats of a new U.S. administration.
Under Stress, US-Mexico Intelligence Ties Could Fray