The clock is ticking on student loan interest rates. The rates for federally-backed student Stafford loans will double from 3.4 percent to 6.8 percent on July 1. And what has Congress done to help these already struggling students? Absolutely nothing. Student debt now totals $1 trillion, and Congress is still deadlocked when it comes to preventing an increase in the interest rate on student loans.

The House has managed to pass a bill, mainly on party lines, that would in fact seriously harm these students. This is Minnesota Rep. John Kline’s Smarter Solutions for Students Act, which ties the interest rate to the 10-year Treasury note, adding an additional 2.5 percent to Stafford Loans. It does introduce a cap on interest rates at 8.5 percent, but if this bill were law today interest rates on student loans would rise to 4.7 percent.

However there are two proposals currently in the House, these being the Student Loan Fairness Act sponsored by Rep. Karen Bass, D-Calif., and the Bank on Students Loan Fairness Act by Sen. Elizabeth Warren, D-Mass., and Rep. John Tierney, D-Mass.

Rep. Bass’s bill calls for student borrowers to pay 10 percent of their discretionary income on their debt for 10 years, after which the remaining debt would be forgiven. It also permanently caps loans at 3.4 percent, and suspends interest rates for unemployed borrowers and forgives loan debt owed by graduates who work in public service jobs. It has received support from the United States Student Association, and represents a realistic and supportive step forward for students drowning in debt.

Read more about this bill here (PDF)

For the Bank on Students Loan Fairness Act, the motivation is that students should not have to pay more than big banks do for loans, and so the interest rate for Stafford loans should be equivalent to the interest rate offered through the Federal Reserve discount window. The current rate offered to banks by the Federal Reserve is 0.75 percent. The Federal Reserve would supply the funding for these loans to the Department of Education. If this bill is passed, students would be able to get financial access to the education that they need.

Read more about this bill here (PDF)

And sign our petition to show your support for making loans rates for students the same as banks.

Finally, in a last ditch effort to keep rates from rising, Democrats in the House have filed a discharge petition bill under the leadership of Rep. Joe Courtney, D-Conn. The Student Loan Relief Act of 2013 would freeze existing rates of 3.4 percent for two more years while Congress attempts to work towards a more comprehensive solution. Although delaying the increase for another two years while ignoring the overall problem of soaring college costs is by no means an ideal solution, if Congress cannot come to an agreement by July 1 the rates will double. If anything, Congress should come together to protect students from an unfair increase of interest rates.

So far 191 Democrats have signed the discharge petition, but it needs 218 signatures – including those of at least 17 Republicans – to be moved to the floor for a vote.

The list below is of those Democrats who have yet to sign as of June 18:

• John Barrow, D-Ga.
• Jim Cooper, D-Tenn.
• Lloyd Doggett, D-Texas.
• Ron Kind, D-Wis.
• Edward Markey, D-Mass.
• Jim Matheson, D-Utah.
• Carolyn McCarthy, D-N.Y.
• Bobby Rush, D-Ill.
• Carol Shea-Porter, D-N.H.
• Peter Visclosky, D-Ind.

If your representative is on this list, please urge that member to sign the discharge petition to prevent student loan rates from doubling on July 1st. Hopefully Congress can manage this much for our students.

And remember to sign our petition to give students the same borrowing rate as big banks.

For an estimated 4 million people, including about 210,000 schoolchildren, the farm bill the House is scheduled to start debating today could mean they will be going hungry a lot more often.

That has promoted organizations such as Half in 10 and the Food Research and Action Center to organize a National Call-In Day to lobby against almost $21 billion in cuts to the Supplemental Nutrition Assistance Program being pushed by House Republicans,. The debate on these cuts in the Federal Agriculture Reform and Risk Management Act (FARRM) is another pivotal moment in which we can show just how powerful the public voice can be.

The SNAP, or “food stamp,” program is more than just another “government handout.” It is a comprehensive social safety net program that is vital tool in our arsenal to fight food insecurity in America. It is also one of the key instruments in alleviating poverty, a phenomenon that has increased since the Great Recession in 2008.

The cuts being sought by House conservatives would cause about 2 million individuals to lose their SNAP benefits entirely, would cut benefits for an estimated 1.7 million others by an average of $90 a month, and would cut 210,000 children from the free school meal program.

Republican obstructionism has exacerbated this issue, furthering a misguided economic agenda so focused on austerity measures that job creation has been minimal at best. It’s because of this unemployment, and in many cases underemployment, that SNAP participation increased by almost 170,000 people in March 2013 alone.

A bill proposing $4 billion in cuts to this program has already passed the Senate, much to the chagrin of the many Americans who depend on SNAP benefits. Don’t let steeper cuts to a vital program occur while no one is watching. This will be a day of action for you to call your representative and make your dissatisfaction known. Together, we can make our voices heard and stop this latest onslaught to defund invaluable social safety-net programs.

Texas Governor Rick Perry is on a “job-poaching” trip to New York. Let’s say he “attracts” some businesses to move to his low-wage, low-tax state. That means good-paying jobs in one part of our country become low-paying jobs in another and business taxes that supported good schools in one part of our country don’t support good schools in another part. This adds up to a net loss for our country, economy and society.

Job-Poaching Ad

Texas Governor Perry is running this ad in New York, asking businesses to move to Texas to escape taxes, regulations and the ability of citizens to sue if harmed by a corporation:

“Higher taxes. Stifling regulations. Bureaucrats telling you whether you can even drink a Big Gulp.” And, “Our state is number one for business because we have no state income tax, fair and predictable regulations, and lawsuit reforms that keep trial lawyers out of your pockets so you can grow your business.”

Let’s look at what he’s pitching here:

1) Lower taxes, meaning government doesn’t have the resources to educate people, maintain the infrastructure, etc.

2) Fewer regulations, meaning terrible pollution, few protections for consumers, few on-the-job safety inspections, terrible working conditions, etc. Maybe not even regulate and inspect fertilizer plants. Here is an aerial photo after that West Texas fertilizer plant that blew up a whole town:

3) Lawsuit “reforms,” meaning people can’t go to court when a corporation does something that harms them. Companies free to scam, con, exploit, defraud, etc. with impunity.

4) Texas is also a “right-to-work” state, meaning that state policy works to suppress unions, which lowers wages and benefits and worker rights are limited. Some employers like that — more money to the top and the workers can’t do anything about how you treat them.

New York Racing To Bottom

New York Governor Andrew Cuomo is proposing “tax-free” areas in his own state, to “attract” businesses. Cuomo is proposing to offer no business or income taxes for 10 years to a company and its employees who comes to New York.

So in a few years you’ll be hearing that New York’s schools and colleges are in trouble, and the bridges are in trouble, etc. (Maybe even fertilizer plants blowing up and taking whole towns with them?)

The Larger Economy

If a company moves from a good-paying state to a low-paying state so the owners can pocket the wage difference for themselves, what is the net result to our economy?

Hypothetical company with 500 employees, hypothetical states (not naming any names!):

1. Company closes facility in good state, lays off 500 people making $50,000 per year.
2. Company opens facility in gutter state, “creates” 500 jobs at $20,000.
3. Good state pays unemployment benefits for a while, suffers hundreds of home-foreclosures, nearby small businesses close, businesses supplying and supporting the now-closed facility go out of business, schools close because of loss of tax base, city goes bankrupt, entire area deteriorates.
4. Low-tax gutter state doesn’t bother with good schools, etc., doesn’t inspect businesses, etc.
5. Workers in gutter state paid so little they have to get government assistance, don’t make enough to support local small businesses, etc. Gutter state does not improve.
6. Net payroll of employed people in the country’s economy drops by $15,000,000 per year. (Plus lost benefits, effect on local businesses, region…)
7. Owners of company pocket that $15 million per year wage differential, put most of it in Cayman Islands tax haven, use the rest to bribe politicians to ignore what all of this is doing to the country, economy and society.
8. Deregulated fertilizer plant blows up, town wiped out.

Oh, add to this, everyone across the entire country feels wage pressure, as employers say “shut up or we’ll move your job, too.”

The Moral Of The Story

You have to look at the effect of these policies on the larger economy. Low wages don’t help any economy, anywhere. Low taxes don’t “create jobs” they actually kill jobs and the entire economy in a few years because defunded government can’t educate people, maintain infrastructure, etc. All that these “race-to-the-bottom” policies do is make working people poorer while enabling exploiters to force people into humiliating desperation.

The Bigger Moral Of The Story

This doesn’t just apply to states. This is a picture of what happened to our country’s economy when “free trade” deals opened us up to a worldwide race to the bottom.

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PS When Gov. Perry ran an ad in Californa to try to poach jobs, Gov. Jerry Brown responded that the ad was “barely a fart.”
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You would think that this poll showing “Americans’ confidence in Congress is not only at its lowest point on record, but also is the worst Gallup has ever found for any institution it has measured since 1973″ would be so embarrassing to those on Capital Hill that they would take immediate steps to change the situation.

You would be especially justified in thinking that it would change congressional behavior on the federal budget. Although the poll doesn’t say it, there’s no doubt in my mind that the constant and highly publicized “I’m-gonna-hold-my-breath-till-I’m-blue-in-the-face” fights over the deficit, debt ceiling, and annual budget resolution haves been the biggest factors in this totally failing grade for the House and Senate.

But it won’t. Particularly when it comes to the budget it’s not likely to change congressional behavior at all.

There are two reasons.

First, with the House and Senate controlled by different political parties, Democrats and Republicans will blame the other for the poll results rather than do anything to fix the problem. That’s why we’ll continue to see ridiculous legislative proposals like the “No Budget, No Pay Act” and the “Pay Your Bills or Lose Your Pay Act” which are designed to embarrass rather than get anything done.

Second, and far more important as far as the budget is concern, national samples like the one in the Gallup poll make increasingly less difference to House members who increasingly represent one-party congressional districts that are extremely unlikely to be competitive in the general election.

For these one-party districts, the broader voting population in the general — the one that more closely resemble the national sample in the poll — is largely irrelevant. Instead, it’s the much narrower…and usually more extreme…voters in the primary whose opinions truly matter.

This means that a 10 percent overall congressional confidence rating because of repeated failures on the budget are of no consequence to a member of Congress whose primary voters would rather have a stalemate than a compromise even if it creates economic problems for the country as a whole. For these primary voters, compromise would actually lower their rating of Congress even further.

As a result, the Gallup results, which would embarrass the rest of us so much that we would be making immediate changes in our behavior, will have no impact on Congress whatsoever.

And that means that the highly dysfunctional (and that’s giving it the benefit of the doubt) federal budget debate won’t change at all because of it.

Originally posted at Capital Gains and Games.

Today I had the honor of being one of few men to join the panel on WETA’s “To The Contrary,” with Bonnie Erbe, for a Father’s Day edition of the normally all-female news analysis program. (The show will air later this evening, and the video will be available online here.) I was on board for a segment about “Surrogacy and the Single Dad,” but the discussion encompassed issues that cut across gender, race, class, and orientation.

The discussion on immigration brought to mind Bill’s post on how immigration reform brings us one step closer to ending the underground economy, which includes workers in what Pramila Jayapal calls “informal or paperless industries.”

First, the path to citizenship, while not perfect, does recognize the particular needs of undocumented women. Sixty percent of undocumented women work in paperless or informal industries. The other 40 percent of undocumented women are at home taking care of their children as primary caregivers. For the first time in a reform proposal, the current bill recognizes that women’s work is valuable but often not documented with pay stubs. The bill allows women to provide alternate forms of proof of employment, such as sworn affidavits from church groups or nonprofit organizations. An amendment that would have removed this provision failed in markup, and senators need to ensure the provision in the base bill survives the floor fight.

Workers in an underground economy are workers whose employement is not documented, and thus whose rights and protections are at best undefined and at worst nonexistant.

Valuing work like taking care of children at home brings to mind another issue we discussed, and that I wrote about last week: that women are the family breadwinners in 40 percent of U.S. households. My cynical side is inclined to think that maybe childcare will be valued as “real” work now that more men are doing it. But it turns out that Americans aren’t any more comfortable with stay-at-home dads than they are with working moms, and men who take on a fairer share of childcare get no respect at work.

What gets lost in the debate, as I pointed out last week, that the whole debate of whether women “should” work outside the home is a luxury most families can’t afford.

That last bit about dual-income couples sheds light on the other side of the coin. Many of those working moms are working out of necessity, at low-wage jobs, with little to no benefits, and no paid time off. Coontz writes that “low-wage jobs with urgent and inflexible time demands,” raise levels of stress and depression among working mothers.

As KJ Dell’Antonia pointed out, what’s wrong with this debate is that it conflates the realties of middle-class families with those of low-income families who are part of the working poor, who were hit the hardest in the recession, and have seen no benefits from the so-called recovery.

And while it’s worth celebrating for a moment that more women are able to earn enough to be breadwinners, Meteor Blades has another explanation for why some women are the primary breadwinners in their families: men’s average pay has gotten worse.

Over the past three decades, there has been improvement, a narrowing of the gap. As Heidi Shierholz at the Economic Policy Institute points out, the median hourly wage for women in 1979 was 62.7 of the median for men. In 2012, it was 82.8 percent:

However, a big chunk of that improvement-more than a quarter of it-happened because of men’s wage losses, rather than women’s wage gains.

With the exception of the period of labor market strength in the late 1990s, the median male wage, after adjusting for inflation, has decreased over essentially the entire period since the late 1970s. Between 1979 and 1996, it dropped 11.5 percent, from $19.53 per hour to $17.27 per hour. With the strong labor market of the late 1990s, the median male wage partially rebounded to $18.93 by 2002. It then began declining again; at $18.03 per hour in 2012, the real wage of the median male was 4.7 percent below where it had been a decade earlier.

This cannot be blamed on economic stagnation. Between 1979 and 2012, productivity – the average amount of goods and services produced in an hour by workers in the U.S. economy – grew by 69.5 percent, but that did not translate into higher wages for most men. Over this period, the real wage of the median male dropped 7.6 percent. This is a new and troubling disconnect: In the decades prior to the 1970s, as productivity increased, the wages of the median worker increased right along with it.

Some women may be the primary breadwinners because they’re single parents, or because their male partners unemployed. But some may be the primary winners in a household where both partners are working, but the income of one “working man” just isn’t what it used to be, and isn’t nearly enough to support a family.

Have you heard that China is sending people into space? Have you heard about China’s high-speed rail lines linking their major cities? Have you heard that China has built the fastest supercompouter in the world? These are results of the dreaded “government spending” that Republicans say is such a bad thing. They’re doing it, we aren’t.

Manned Space Flight

I’m old enough to remember America’s first Mercury space flights and Alan Shepard and John Glenn. Then Gemini, then Apollo and our moon landings and our Space Shuttle. (I remember going to a “ticker tape parade” for McDivitt and White in 1965.)

Now we don’t even have the Space Shuttle. Republicans have pretty much killed off American manned space flight because it is “government spending.” (We have to pay Russia to give our astronauts rides to the space station.)

Meanwhile … CBS News: China launches fifth manned space mission (click through to see the video),

A Shenzhou spacecraft carrying a crew of three, including China’s second female astronaut, streaked into orbit Tuesday, heading for a prototype space station module for a planned two-week mission.

… The Shenzhou 10 mission “carries the space dream of the Chinese nation,” President Xi Jinping told the crew before launch. “It will also show the Chinese passion to reach for the stars and reach into space. You have made all of us very proud.”

Yes, the Chinese are very proud today… They are, we aren’t.

High Speed Rail

We slowed down on maintaining our infrastructure after the Reagan tax cuts, because it is “government spending.” Our roads are falling apart, our bridges are deteroriating and some are dangerous. Our rail lines largely rely on (not all that well-maintained) last-century technology and track.

Meanwhile … China has about 5,800 miles of high-speed rail lines, linking their major cities and moving at up to 240 mph. Chinese rail lines include new magnetic-levitation technology.

Fastest Supercomputer

Who has built the fastest supercomputer? Japan? Us?

CNN, June 7: China builds fastest supercomputer in the world,

China appears to have once again taken the lead from the United States in the burgeoning supercomputing wars, developing a supercomputer that is twice as fast as anything America has to offer.

The new Tianhe-2 supercomputer, nicknamed the Milkyway-2, was unveiled by China’s National University of Defense Technology (NUDT) during a conference held in late May. University of Tennessee professor Jack Dongarra confirmed this week that the Milkyway-2 operates as fast as 30.7 petaflops — quadrillions of calculations — per second.

… The United States only just reclaimed the top spot this past November after coming up short to Japan, China and Germany over the past three years.

The Rest

We are cutting back the assistance that helps people to get a higher education because it is “government spending.”

We are cutting basic scientific research because it is “government spending.”

We are cutting health research because it is “government spending.”

We are even cutting access to cancer clinics because it is “government spending.”

Republicans object to spending to maintain our nations infrastructure because it is “government spending.”

Do you remember when Republicans even objected to money in the stimulus to refurbish our capitol’s National Mall because it was “government spending?”

Etc., Etc.

And never mind the damage the “sequester” is doing…

(Pics from Wikipedia)

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Starting today, Massachusetts Rep. James McGovern is joining the state’s Health and Human Services Secretary John Polanowicz and other Massachusetts officials in the “SNAP challenge.” For the next seven days, they are going to be living off a food budget of $31.50, the average weekly benefit received by an individual in the Supplemental Nutrition Assistance Program, commonly known as “food stamps.”

They join others, including members of Congress, their staffers and partners, in the Congressional SNAP Food Stamp Challenge to raise awareness of how vital the Supplemental Nutrition Assistance Program is in the lives of low-income Americans.

Started by the Food Research and Action Center, this challenge not only illustrates the lack of access low-income Americans have to healthy food items, but also the limited access they have to even basic food staples.

The time of this challenge could not be more appropriate, in light of the Agriculture Reform, Food, and Jobs Act – the “farm bill” – that passed the Senate, 66 to 27, on June 10. In addition to programs that would protect farmers from fluctuating prices on such commodities as corn and wheat, the bill also includes controversial cuts to SNAP by $3.9 billion over the next 10 years. These cuts are part of the misguided congressional agenda that focuses solely on deficit reduction.

The rationale for these cuts from proponents is that the Senate is cracking down on abuse and loopholes, and increasing the integrity of this program. However, they are really just propagating this myth that people are getting rich off of SNAP benefits. In reality, the exact opposite is occurring. The benefits are often too little for families.

A report conducted by Feeding America, an immense nationwide network of food banks and similar organizations, says that about 90 percent of benefits are consumed by the recipient within the first three weeks of the month. On the fourth week, if you’re a family receiving SNAP benefits, you are forced to make even tougher choices between feeding yourself and your family, and using your already stretched resources to pay for housing, health care costs, utilities, and transportation.

Proponents of this bill say the spending cuts will not lead to a decrease in benefits or removal of low-income families from the program. This is also false. These cuts will greatly limit state coordination between SNAP and the Low-Income Home Energy Assistance program, whose relationship has been aptly nicknamed “heat and eat.” Ultimately, this interprogram relationship was created to eliminate the devastating choice that many low-income Americans have to make between paying for energy or paying for food.

And this program is not the only benefit that is in danger. The Congressional Budget Office estimated in 2012 that 500,000 households a year would see $90 in badly needed SNAP benefits disappear each month.

These cuts could not come at a worse time. Our protracted economic recovery has resulted in relatively unchanged levels of unemployment and underemployment. These two factors have unfortunately culminated in a rise in SNAP participation. In March, 168,888 people enrolled in the program, increasing the program to well over 47.7 million. This is prescient, because of the strong relationship between poverty and hunger.

The Thomson Reuters Foundation’s recent spotlight on food crises cites the main reason for food insecurity is poverty. This fact is corroborated by a statement issued by Kevin Concannon, the U.S. Department of Agriculture Undersecretary for Food, Nutrition, and Consumer Services, at a roundtable to discuss SNAP’s vital role during the 2008 Recession and its impact on poverty in America, convened by the Urban Institute and Feeding America, in which Concannon stated, “it’s the first line of defense against hunger.”

When analyzing various reports on SNAP’s impact on the hunger crisis in America, his statement becomes more than just a bumper sticker slogan. “Studies have a shown a 20-50 percent reduction” in poverty as a result of SNAP, said Caroline Ratcliffe of the Urban Institute during that same roundtable.

Further, SNAP monthly benefits reached only 75 percent of all those that are eligible in 2010, found in a study conducted by the Center on Budget and Policy Priorities.

However, SNAP does more than just alleviate hunger. The roundtable concluded that SNAP is a quintessential tool in the struggle against poverty, providing work support, promoting nutrition and wellness, and fills the void left by other social safety nets. SNAP is not the only first defense against hunger, it was the one of the best defenses against the unrelenting effects of the Great Recession.

What is more glaring are the cuts proposed by Republicans in the House – $20 billion over 10 years, on top of a $25 reduction in SNAP monthly benefits that a typical family of four will feel when a supplemental benefit allocation that was included in the Recovery Act will expire – all in the name of austerity. According to a Center for Budget and Policy Priorities paper, the House Republican proposal “would cut nearly 2 million low-income people off SNAP” and “several hundred thousand low-income children would lose access to free school meals.”

How anyone can be in favor of a bill with cuts to such an essential program, especially during these trying financial times, just simply does not make sense.

This is a fascinating account of how the Grand Bargain came to be the tired conventional wisdom among the Village wonk crowd. (I’m characterizing it that way, not the author, the esteemed Larry Mishel. ) It’s required reading for anyone who has been following this story for the past few years:

The Center for American Progress (CAP) has issued an important new report saying that “new realities” dictate that we “reset button on the entire fiscal debate,” end the pursuit of a fiscal “grand bargain” with Republicans in Congress on deficit reduction, and replace the sequester (through 2016). One can only hope this signals a change in direction for the administration and others on the center-left who embarked on the grand bargain deficit reduction journey in late 2009 and early 2010 when their focus should have remained on job creation. That turn of events was one of the most consequential economic policymaking decisions in decades, because it derailed job creation (i.e., further stimulus) efforts thus ensuring that recovery from the Great Recession would be agonizingly slow. That, of course, has had a hugely adverse impact on the wages, benefits and employment of the vast majority of Americans, but has also had tremendous political fallout (i.e. 2010) and weakened the public’s faith in government’s ability to spur job growth. It was a clear unforced error by CAP and the administration to suggest the need for a grand bargain on deficit reduction, embodied in the appointment of the Simpson-Bowles commission. For these reasons it’s worth examining the argument CAP has made and compare it to the situation in late 2009 and early 2010 when CAP pushed for a grand bargain, praised the Simpson-Bowles effort and recommended a deficit plan that, if adopted, would have started to cut spending in October 2010 (when, it turns out, unemployment was still 9.5 percent). This is not an across-the-board indictment of CAP—they do lots of excellent work, including Michael Linden’s budget analyses. But it is important to highlight that there were two paths available to liberal and center-left policymakers over the course of this crisis, and many of today’s difficulties are with us because the wrong path was chosen. EPI, I am proud to say, was and remains resolutely focused on the ongoing jobs crisis.  Read on

He discusses how the paths between EPI and CAP diverged at a very specific time and concludes that CAP was listening “to the Wall Streeters who were telling them, as they told the administration, that interest rates can “turn on a dime” so we need to undertake a deficit reduction plan.”

I’m glad he mentioned the administration because I think this is a chicken or the egg story. Anyone who reads this blog knows that President-elect Obama was telling everyone who would listen that he wanted that Grand Bargain leading up to the first inauguration. And he very explicitly said that he needed to pass a stimulus first and then he planned to pivot to the tax reform, “entitlement” reform and health care. And that is what he did.

Mishel is right that CAP could have taken another path and they might have been influential. But they would have been going up against the president’s agenda if they did so. And there is little evidence that were inclined to do that on much of anything.

This week I hosted a blogger call to discuss the outcome of last week’s Friday/Saturday meetings between President Obama and Chinese President and General Secretary of the Communist Party of China Xi Jinping. None of this matters much, unless you care about your job, wages, retirement, kids, community, democracy — and just possibly if things go the wrong way another Cold War.

The Meeting

Last Friday and Saturday President Obama met with Chinese President Xi Jinping. They met on a private estate in Southern California for a total of eight hours together talking. This was an informal “get to know you” event, with no items expected to be resolved. However they did emerge from the meeting with agreement to limiting a very important greenhouse gas.

The Call

On the call to talk about the meeting, its results, and what we should try to do next were Clyde Prestowitz of the Economic Strategy Institute and Scott Paul of the Alliance for American Manufacturing.

You can listen to a recording of the call here.

“They’re Not Going To Be Like Us”

A couple of interesting points. At about 13:00 we had some back-and-forth on how our countries see their own interests. Clyde made an interesting point about how China has a very different way of looking at our relationship, especially concerning trade. Clyde:

“We have promoted since the end of WWII the notion that a country that is doing its job is opening its markets, that free trade, golbalization, will not only make everybody wealthy but being wealthy they’ll become democratic and being democratic they’ll become peace-loving. So our leaders conceive of “doing their job” as opening markets and protecting commercial property, not stealing intellectual property, not hacking China’s computers and stealing China’s corporate secrets and so forth. ”

“But the Chinese conceive of doing their job in an entirely different way, albeit they are members of these global organizations the principles of which are what WE have proposed as open markets, free markets, capitalism and globalization. So we have two different definitions of doing their jobs as a country, this is where we have to come to grips. We keep telling the Chinese to be more like us – responsible stakeholders in the current system. We go to the CHinese and say say “Oh it’s bad to steal intellectual property. We need stronger patent laws for protection of intellectual property.” So this is saying, “Be like us,” At some point there has to be more recognition that they’re not going to be like us.”

I asked a question about how it is said that the US won’t declare China to be a currency manipulator because we want their cooperation to help reduce regional tensions, such as with North Korea. If we hold back on confronting China over their trade violations in exchange for China’s help with tensions such as North Korea, doesn’t this create an incentive for China to create those very tensions?

Clyde said he doesn’t think China got North Korea to threated to nuke South Korea – and us – as a way to get us to lay off on currency, hacking and other issues.

Again, you can listen to a recording of the call here.
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