Four more years of Trump?

Improbable as it may seem, President Trump could be re-elected in 2020.

Photo by Anthony Behar

He’s been vilified by many, including those who know him personally such as former FBI director James Comey.

“He has a craving for affirmation that I’ve never seen in an adult before,” Comey told a conference in Ottawa. “It’s all, ‘What will fill this hole inside me?’ (Globe and Mail, June 5, 2018)”

Author Thomas Frank’s assessment is less psychological:

“He is deeply unpopular, the biggest buffoon any of us has ever seen in the White House. He manages to disgrace the office nearly every single day. He insults our intelligence with his blustering rhetoric. He endorses racial stereotypes and makes common cause with bigots. He has succeeded in offending countless foreign governments [!]. He has no idea what a president is supposed to be or do and (perhaps luckily) he has no clue how to govern (Harper’s magazine, April, 2018).”

However, Trump seems to vaguely understand the connection between trade deals and wage stagnation.

Trump withdrew from one such deal, the Trans-Pacific Partnership, which would have strengthened U.S. corporate power at the expense of Canada.

If he pulls out of NAFTA, it will hurt all three countries in the short term. But trade will not stop. We will continue to trade with the U.S. under rules of the World Trade Organization. Tariffs under the WTO would add only 1.5 per cent to Canadian exports.

Trade deals have been a bad deal for many U.S. workers. Jobs have been sent elsewhere. Wages have been stagnant. The threat of moving jobs offshore looms over those workers who complain.

Candidate Trump characteristically expressed his disdain for NAFTA on a visit to Flint, Michigan, where hundreds of thousands had been poisoned by lead in the water. In a caustic manner, he said “It used to be that cars were made in Flint and you couldn’t drink the water in Mexico. And now the cars are made in Mexico and you can’t drink the water in Flint.” Funny, and a telling display of Trump’s lack of sympathy.

The American economy is on a roll and that could put Trump back in office for another four years. The U.S. unemployment rate was 3.9 per cent in April, 2018, a seventeen-year low. Under trade deals, corporate America is currently sending some of those jobs offshore. If trade deals are cancelled that will create a worker shortage that will drive wages up.

Of course, cancelling trade deals will also drive up the cost of goods for Americans but voters may not care, or will be unable to make the connection. The pain of unintended consequences has never been a problem for Trump says Thomas Frank:

“The president, always a fan of burning down the village in order to save it, is currently threatening to scuttle the whole agreement: ‘A lot of people don’t realize how good it would be to terminate NAFTA, because the way you’re going to make the best deal is to terminate NAFTA.’”

What matters for American workers is that they are back at work. No matter that the sparks for the economic recovery were ignited by former President Obama and chair of the Federal Reserve Janet Yellen.

In the 2020 campaign, the slogan could be “it’s the jobs, stupid.” And Trump could win.

B.C.’s resource development will not generate jobs

Resource development develops new jobs but not more jobs says Professor Marvin Shaffer. New pipelines and LNG processing will not reduce unemployment despite the claims of politicians. “The economic impact analysis is the one that politicians and media latch onto –the ones with the big, though fundamentally misleading numbers.”

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Those misleading numbers are impressive: labour income of $69.9 billion for Northern Gateway alone. But that assumes that the new jobs are filled by the unemployed. In reality, most of the jobs would be filled from people already employed in B.C., Canada, and globally. Considering that, the net labour income rise is only 0.06 per cent of the amount trumpeted.

These are not Professor Shaffer’s opinions. Rather, the figures come from a report commissioned by the builders of the proposed Northern Gateway pipeline, Enbridge, as presented to the National Energy Board for review.

The authors of the report, Wright Mansell, throw cold water on other so-called benefits. Politicians loudly proclaim increases of government revenues of $98 billion and GDP $311.5 billion. “Those are gross impacts,” warns Shaffer in a Canadian Centre for Policy Alternatives newsletter.

To get true picture, the benefits have to be weighed against the costs, including losses to businesses as a consequence of the pipeline or resource development; businesses such as railways which now carry a lot of oil.

The Wright Mansell report calculates the true net gains, namely gross benefits minus costs. The net benefits of Northern Gateway end up going to oil producers. The biggest winners are the producers themselves with $17.8 billion; and the governments of Alberta and the feds with $9.4 billion.

And even those net benefits depend on the vagaries of world markets for fossil fuels, exchange rates on the Canadian dollar, and interest rates on money borrowed to build the projects.

Other factors are not included in the report, says Professor Shaffer. “One suspects that the federal government would have to redirect a large share of its gain to Green House Gas offsets, marine safety and other measures for that case.”

Then, there is the matter of alternatives to the oil bottleneck out of Alberta; other ways to potentially increase the value of the resource such as refining the bitumen in Canada, and competing projects and strategies such as the existing Kinder Morgan pipeline and the Canada East project.

The massive windfall from LNG claimed by the B.C. government – a $100 billion Prosperity Fund – looks more like wind than windfall. No such fund can develop when Premier Clark promises tax cuts and increases to public services. None of this consistent with a Norway-styled “prosperity fund.”

To add insult to injury, not only does resource development fail to create jobs for the unemployed, fail to increase B.C.’s tax revenue, fail to produce a rainy-day fund, it is an environmental disaster waiting to happen.

I have to agree with Premier Clark’s ambitious plans to train unskilled workers but instead of training them for the black hole of resource extraction, prepare them for technologies of green renewable energy — not a dying fossil fuel industry.