Archive for the ‘Tariff’ Category

Service of When a Headline Underplays Scary News

Monday, January 20th, 2020

Photo: thoughtco.com

I’ve mentioned here before that I passed college economics by figuring out the answers to exam questions and writing the opposite. Economic theories made no sense. I’m not comfortable writing about the economy but this post is also about the delivery of news which is something I’ve studied.

The headlines to Josh Zumbrun and Anthony DeBarros’ Wall Street Journal article soft-sold some daunting repercussions of the administration’s tariff war with China. The online headline was “Trade War With China Took Toll on U.S., but Not Big One,” and the print version was “Trade War Takes a Muted Toll on U.S. Economy.” The words I focused on were “but Not Big One” and “Muted Toll.”

Photo: rfdtv.com

Readers don’t have far to read before alarms ring. Following are the first two paragraphs:

  • “Farmers took a big hit. Importers of auto parts, furniture and machinery choked down punishing tariffs. Investment between the world’s two largest economies dropped.
  • “Much of the U.S. economy is largely unscathed by two turbulent years of trade war with China, economic indicators show. Yet economic growth is trending near 2% in 2019, well short of the Trump administration’s goal of 3%.”

According to Zumbrun and DeBarros the administration says the war is worth it. “The deal ‘protects American innovation and creates a level playing field for our great farmers, ranchers, manufacturers, and entrepreneurs,’ said Judd Deere, a White House spokesman, adding, ‘President Trump protected the American worker and fundamentally changed our relationship with China.'”

Photo: focusmagazine.org

The reporters wrote that Benn Steil, who directs international economics at the Council on Foreign Relations, claimed that the president could have achieved the same deal without side effects two years ago. Economists predict years may go by before we can realize the actual repercussions.

Zumbrun and DeBarros subsequently reported in detail on the impact of the tariffs on agriculture, inflation and prices, bilateral trade, investment and economic growth. A few excerpts:

  • Agriculture: “Annual S. farm exports to China plunged from nearly $25 billion in recent years to below $7 billion at its low point in the 12 months through April 2019.”
  • Inflation and Prices: “While Mr. Trump frequently claimed China would pay the tariffs, they have been paid by S. importers.”
  • Bilateral Trade: “After decades of surging commerce between the world’s two largest economies, trade took a sharp step back. S. exports to China dropped by nearly $30 billion, while imports from China fell by over $70 billion, for a decline of over $100 billion in trade.”
  • Investment: “Investment in the S. economy slumped. Foreign direct investment slowed to nearly a halt in the early part of 2018, and was weak again in mid-2019.” Nancy McLernon, president of the Organization for International Investment, pointed to trade tensions as the cause.
  • Photo: vox.com

    Economic Growth: In early 2018, the Trump administration celebrated 3 percent growth and forecast the same through 2019 along with a prediction that the Federal Reserve would raise interest rates. “Instead, as the trade war wore on, the administration began imploring the Fed to slash interest rates to bolster the economy. The Fed cut rates three times. Even so, the economy has cooled toward 2%.” In addition, “the boost from the 2017 tax overhaul was beginning to fade” wrote  Zumbrun and DeBarros and last, the reporters ID’d the impact of uncertainty–“the constant unpredictability of what happens next,” said Ayhan Kose, director of the World Bank’s global macroeconomic outlook.

Do you think the gap between the news in the article and the headline occurred because the headline writers hadn’t read the article or because the facts don’t match the philosophy of the Wall Street Journal‘s publisher and the staff wanted to be sure that the story ran? Do tariffs worry or impact you?

Photo: 123rf.com

 

 

Service of Newspapers—When The Good Guys Win

Thursday, August 30th, 2018

Photo: philly.com

On one side of this post is a man who did extremely well, lived simply and used his fortune to help the newspaper industry, and many others. On the other is a private equity firm that pushed for a tariff against Canada to allegedly help some US businesses while threatening the survival of others. Amazingly, our system worked and the good guys won. Read on.

Gerry and Marguerite Lenfest. Photo: mercersburg.edu

“I can’t think of any cause that we support that’s more important than the support of the newspapers,” Mr. Lenfest said in 2014. That’s H.F. Lenfest, known as Gerry, who died early in August. James R. Hagerty wrote Lenfest’s obituary in The Wall Street Journal.

These weren’t just words for Lenfest and his wife Marguerite. They paid $88 million for the Philadelphia Inquirer, Philadelphia Daily News and Philly.com four years ago and in 2016, “donated that company to a nonprofit, now known as the Lenfest Institute for Journalism, charged with preserving quality journalism in Philadelphia and testing ideas that might sustain fact-based news reporting elsewhere,” wrote Hagerty.

In all, the Lenfests have given away $1.2 billion. In spite of Lenfest’s financial success in the cable TV industry, the family lived modestly—keeping the house they moved into in 1966, for example. Their son Brook said his father “rode city buses and flew coach” because people in coach were “more open to conversation.” [The Lenfests gave $14 million to Teach America after Gerry Lenfest chatted with the founder he met on the train to NYC.]

Photo: ehshumfinancial.com

At the same time as this stalwart attempt at saving an industry takes place the Department of Commerce was supporting a tariff on Canadian newsprint that would raise the price as much as 30 percent ringing the death knell for many papers and causing severe cutbacks in staff and production in others. The tariff was to save jobs here. It appeared to back wealthy cronies at a private equity firm who pushed for the tariff because they own a US newsprint business. Some wondered if there wasn’t another agenda: to cut off yet more arteries of information that feed [legitimate] news to communities across the country.

A few days before the International Trade Commission’s decision–made yesterday–William Mauldin told the story in: “Bad News for U.S. Papers, but Tariffs Are Paying Off for One Rock Capital –Private-equity firm headed by a Washington and Wall Street veteran pushed for the tariffs on behalf of its North Pacific Paper and hope they are affirmed in a coming trade-commission vote.”

Photo: en.wikipedia.org

He reported that after salaries, newsprint is usually a newspaper’s second biggest cost. The increased cost “threatens the viability of small-town papers across the country, forcing reduced publication days, layoffs and other cut backs. Canadian mills have historically supplied a large portion of U.S. newsprint.”

He continued: “Some industry observers say a Trump administration, led by a president antagonistic to the media, is unlikely to be sympathetic to newspapers.” A White House spokeswoman said such a claim is “absurd.”

So what happened yesterday? Tom Kludt and Jill Disis at CNN.com wrote: “In what amounts to a blow to the Department of Commerce, which upheld the tariffs earlier this month, the International Trade Commission found that the imports of Canadian paper do not hurt American producers. The commission’s vote was unanimous.” Commissioner David S. Johnson, a Texas Republican, serves as chairman.

Do you predict the success of the Lenfest Institute’s research may save the newspaper industry? Are philanthropists like the Lenfests who gain little more than personal pleasure from their generous gifts, few and far between? Were you surprised by the International Trade Commission’s unanimous decision regarding what Thehill.com called the “Trump tariffs?” Did you also see the proposed tariffs as the administration’s attempt to punish and diminish the fourth estate? Dare we extrapolate this decision, with David and Goliath overtones, as a turning point where responsible commissioners based their decisions on facts and not due to pressure from a bully–with more to come?

Photo: thedailystar.net

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