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    Kamala Harris: Women Leaving Work Force During Pandemic Is a 'National Emergency'

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    #masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesVaccine RolloutSee Your Local RiskNew Variants TrackerAdvertisementContinue reading the main storySupported byContinue reading the main story2.5 Million Women Left the Work Force During the Pandemic. Harris Sees a ‘National Emergency.’“In one year,” Vice President Kamala Harris said, “the pandemic has put decades of the progress we have collectively made for women workers at risk.”On a video call with women’s advocacy groups and lawmakers on Thursday, the vice president painted a dire picture of the situation that millions of American women are facing during the coronavirus pandemic.Credit…Stefani Reynolds for The New York TimesFeb. 18, 2021, 5:50 p.m. ETWASHINGTON — Vice President Kamala Harris said on Thursday that the 2.5 million women who have left the work force since the beginning of the pandemic constituted a “national emergency” that could be addressed by the Biden administration’s coronavirus relief plan.That number, according to Labor Department data, compares with 1.8 million men who have left the work force. For many women, the demands of child care, coupled with layoffs and furloughs in an economy hit hard by the pandemic, has forced them out of the labor market.“Our economy cannot fully recover unless women can participate fully,” Ms. Harris said on a video call with several women’s advocacy groups and lawmakers, essentially reiterating the argument she made in a Washington Post op-ed published last week. On the call, the vice president painted a dire picture of the situation that millions of American women are facing during the pandemic. “In one year,” she said, “the pandemic has put decades of the progress we have collectively made for women workers at risk.”“Women are not opting out of the work force,” Representative Rosa DeLauro, Democrat of Connecticut and the chairwoman of the House Appropriations Committee, said after attending the panel. “They are being pushed by inadequate policies.”As part of its $1.9 trillion relief plan, the Biden administration has outlined several elements that officials say will ease the burden on unemployed and working women, including $3,000 in tax credits issued to families for each child, a $40 billion investment in child care assistance and an extension of unemployment benefits.Ms. Harris said on Thursday that the package would “lift up nearly half of the children who are living in poverty in our country,” a claim backed by a Columbia University analysis of the plan.A recent Quinnipiac poll showed broad support for the Biden administration’s proposal, but so far, Republicans have not embraced it. Democrats aim to pass the plan using a fast-track budgetary process known as reconciliation, which would allow them to push it through the Senate with a simple majority. Senator Mitt Romney, Republican of Utah, unveiled his own child tax credit proposal this month, but it was promptly panned by colleagues in his party.“I think that there is absolute reason to believe that Republicans should support this,” said Senator Patty Murray, Democrat of Washington, who participated in the call. But she added that her party had ensured that the proposal could go forward without the Republicans.Child care remains an issue for working mothers, and it was a major theme of the round table on Thursday. Nearly 400,000 child care jobs have been lost since the outset of the pandemic, Ms. Harris said. The closings of small businesses and the loss of millions of jobs have created the “perfect storm” for women, particularly for Black business owners, she added. “The longer we wait to act,” she said, “the harder it will be to bring these millions of women back into the work force.”The Coronavirus Outbreak More

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    Global Chip Shortage Challenges Biden’s Hope for Manufacturing Revival

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    #masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesVaccine RolloutSee Your Local RiskNew Variants TrackerAdvertisementContinue reading the main storySupported byContinue reading the main storyGlobal Chip Shortage Challenges Biden’s Hope for Manufacturing RevivalA global shortage of a key component for cars and electronics has shuttered American factories and set off fierce competition to secure supplies.The shortage of a vital component for automobiles, phones, refrigerators and other electronic devices is posing an early challenge to the Biden administration’s promise to revive a manufacturing sector depressed by the coronavirus pandemic.Credit…Thomas Samson/Agence France-Presse — Getty ImagesFeb. 18, 2021, 4:11 p.m. ETWASHINGTON — President Biden came into office with plans to help the economy recover from the coronavirus pandemic and spur a domestic manufacturing revival for goods such as automobiles and semiconductors.But one month into his presidency, a global chip shortage has shuttered auto factories in the United States, slowed shipments of consumer electronics and called into question the security of American supply chains.The shortage of a vital component for automobiles, phones, refrigerators and other electronic devices is posing an early challenge to the administration’s promise to revive a manufacturing sector depressed by the pandemic. And it has spurred an effort by the administration to reach out to U.S. embassies and foreign governments to try to alleviate the shortage, even as the White House acknowledges that there are most likely few solutions to the supply crunch in the short term.The White House plans to issue an executive order soon that will take steps to address these kinds of vulnerabilities in critical supply chains over the longer term, an administration spokesperson said on Thursday. The order will begin a review of domestic manufacturing and supply chains for critical materials — including rare earths, medical supplies and semiconductors — with a particular focus on reducing dependencies on unreliable or unfriendly foreign actors.In the meantime, administration officials have begun looking for ways to ease the immediate shortage. Jake Sullivan, the national security adviser, and Brian Deese, the director of the National Economic Council, have been involved in efforts to increase chip availability; Sameera Fazili, the deputy director of the National Economic Council, and Peter Harrell, a senior director at the National Security Council, are leading the focus on supply chains, the White House spokesperson said.The United States has also tried to leverage its ties with Taiwan, one of the world’s largest chip manufacturers, to make sure American customers are not disadvantaged. In a letter sent on Wednesday, Mr. Deese thanked Wang Mei-Hua, the Taiwanese minister of economic affairs, for her “personal attention and support in resolving the current shortages faced by American automobile manufacturers.”Over the past year, the Trump administration tried to strengthen ties with the Taiwanese government and manufacturers like Taiwan Semiconductor Manufacturing Company to counter China’s growing influence over the chip market.The Biden administration is also meeting with auto companies and suppliers to identify bottlenecks and to urge them to work together to address the shortage. But the White House has acknowledged that its options to alleviate any shortfall are likely to be limited, given the fierce global competition for semiconductors. Many chip makers are already running near maximum capacity, and it will take at least several months to further ramp up production, analysts say.The shortage has been particularly disruptive for auto manufacturers because the production of vehicles relies on dozens of computer chips for electronic components that control engines, transmissions, entertainment systems, brakes and other systems. Both General Motors and Ford have estimated that the shortage will lower their operating profit by at least $1 billion this year.G.M. has halted production at one plant in the United States, one in Canada and another in Mexico until at least mid-March. At a fourth plant, the company has decided to produce vehicles without the electronics that are in short supply. When components become available, G.M. will install them and then ship the vehicles to dealers.The Coronavirus Outbreak More

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    Biden and China: Administration Rethinks Relations

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    #masthead-section-label, #masthead-bar-one { display: none }The Presidential InaugurationHighlightsPhotos From the DayBiden’s SpeechWho Attended?Biden’s Long RoadAdvertisementContinue reading the main storySupported byContinue reading the main storyBiden on ‘Short Leash’ as Administration Rethinks China RelationsThe Biden administration is under intense pressure to maintain former President Donald J. Trump’s curbs on China, even as it tries to develop a more comprehensive and effective strategy.President Biden faces an enormous challenge in trying to formulate a strategy to deal with China at a time when much of Washington treats any relations with Beijing as toxic.Credit…Doug Mills/The New York TimesFeb. 17, 2021, 2:22 p.m. ETWASHINGTON — Biden administration officials have tried to project a tough line on China in their first weeks in office, depicting the authoritarian government as an economic and security challenge to the United States that requires a far more strategic and calculated approach than that of the Trump administration.They have also tried to send a message: While the administration will be staffed by many familiar faces from the Obama administration, China policy will not revert to what it was a decade ago.These early efforts have not concealed the enormous challenge President Biden faces in trying to formulate a strategy to deal with China at a time when any relations with Beijing are treated as thoroughly toxic in Washington. Political adversaries, including Republican lawmakers, have already begun scrutinizing the statements of Mr. Biden’s advisers, ready to pounce on any effort to roll back President Donald J. Trump’s punishments, including tariffs and bans on exporting technology.Ted Cruz, the Republican senator from Texas, has placed a hold on the confirmation of Gina Raimondo, Mr. Biden’s nominee for commerce secretary, delaying a vote on her confirmation, for declining to explicitly commit to keeping the Chinese telecom company Huawei on a national security blacklist. Some Republican lawmakers have also criticized Linda Thomas-Greenfield, Mr. Biden’s pick for U.N. ambassador, for giving a speech at a Confucius Institute, an organization some have described as disseminating Chinese propaganda, and painting a rosy picture of China’s activities in Africa.Several Republicans, including Senator Charles E. Grassley of Iowa, also put out statements last week criticizing a move by the Biden administration to withdraw a rule proposed during the Trump administration that would require universities to disclose their financial ties to Confucius Institutes, organizations set up to teach Chinese language and culture in American schools.“The Biden administration is going to be on a very short leash with respect to doing anything that is perceived as giving China a break,” said Wendy Cutler, a vice president at the Asia Society Policy Institute and a former U.S. trade negotiator.Mr. Trump’s supporters credit him with taking a far more aggressive approach than his predecessors to policing China, including dusting off many rarely used policy tools. That includes placing major tariffs on Chinese goods, limiting Beijing’s access to sensitive American technology exports, imposing sanctions on Chinese officials and companies over human rights violations and securing economic concessions from China as part of a trade deal.But Mr. Trump’s critics, including many in the Biden administration, say his spate of executive orders and other actions were inconsistent and piecemeal, and often more symbolic than effective.Even as Mr. Trump issued harsh punishments on some fronts, he also extended a lifeline to the Chinese telecom company ZTE, delayed sanctions related to human rights violations in China’s Xinjiang region and publicly flattered President Xi Jinping of China as he sought his trade deal. Many of the executive actions Mr. Trump took against China were left incomplete, or were riddled with loopholes.And his policies may have worsened American competitiveness in some areas, according to a report published Wednesday by the consulting firm Rhodium Group and the U.S. Chamber of Commerce China Center. The report found steep costs from the kind of economic “decoupling” that Mr. Trump pursued, including a $190 billion annual loss in American economic output by 2025 if all U.S.-China trade was subject to the type of 25 percent tariff that Mr. Trump imposed on $250 billion of Chinese goods.Daniel Rosen, a founding partner at Rhodium Group, said the Biden administration needed to consider more than politics or ideology when forging China policy, including carefully weighing the cost of its approach to industry.“Obviously politics is king right here in this moment, with nobody in leadership or aspiring to leadership wanting to get outflanked on who is tough on China,” he said. “We’re not going to serve the American interests if we don’t consider commercial interests and national security interests at the same time.”The Biden administration has argued that by being more strategic in how it addresses China, it will ultimately be more effective than the Trump administration. It has laid out an ambitious task as it looks to not only crack down on China for what it sees as unfair trade practices but also develop a national strategy that helps build up America’s economic position to better counter Chinese competition.Speaking at the Atlantic Council in late January, Jake Sullivan, the national security adviser, said the United States first needed to “refurbish the fundamental foundations of our democracy” by dealing with issues like economic and racial inequity, as well as making investments in emerging technologies like artificial intelligence, quantum computing and clean energy.Mr. Biden has also emphasized the importance of working with allies and international institutions to impose a tougher global stance, so companies do not sidestep strict American rules by taking their operations offshore.Mr. Biden held his first call with Mr. Xi on Feb. 10, in which he talked about preserving a free and open Indo-Pacific and shared concerns about Beijing’s economic and human rights practices, according to a White House readout.In a town hall-style forum broadcast by CNN on Tuesday night, Mr. Biden, who knows Mr. Xi well from meetings during the Obama administration, said he had taken a tough line on human rights and other issues during their two-hour call.“There will be repercussions for China, and he knows that,” Mr. Biden said. “What I’m doing is making clear that we, in fact, are going to continue to reassert our role as spokespersons for human rights at the U.N. and other — other agencies that have an impact on their attitude.”Mr. Biden has begun staffing his cabinet with officials who have deep experience with China. Katherine Tai, the Biden administration’s nominee for trade representative, was in charge of litigating cases against China at the World Trade Organization during the Obama administration, and has promised to take a tough line on enforcing American trade rules.President Donald J. Trump criticizing the government of China in May at the White House. Mr. Trump’s supporters credit him with taking a far more aggressive approach than his predecessors to policing China.Credit…Erin Schaff/The New York TimesMr. Biden’s top foreign policy advisers have also espoused views critical of China’s practices, though many see potential for cooperation on issues like the coronavirus pandemic and climate change. That includes Secretary of State Antony J. Blinken, Mr. Sullivan and Kurt Campbell, the National Security Council’s “Asia czar.”Ms. Raimondo, the commerce secretary nominee, will also have purview over economic relations with China, particularly those related to technology. While she had harsh words for China during her confirmation hearing, her refusal to commit to keeping Huawei on a government blacklist drew criticism from Republican lawmakers like Mr. Cruz.Treasury Secretary Janet L. Yellen, who is expected to play a pivotal role in relations with China, took a hawkish tone at her confirmation hearing last month, vowing to use the “full array” of America’s tools to combat “illegal, unfair and abusive” practices. She has also criticized China’s practices of stealing intellectual property and subsidizing state-owned enterprises, but said she did not regard Mr. Trump’s tariffs as “the proper focus” of trade policy.The new administration has given few concrete details about how it will put its strategy into practice, including whether it will implement the many China-related executive orders Mr. Trump introduced, like new restrictions on investments in Chinese companies with ties to the military and bans on Chinese-owned apps, like TikTok, WeChat and Alipay. Instead, the administration has said it would carry out a comprehensive review of Mr. Trump’s tariffs, export controls and other restrictions before making decisions.Another uncertainty is how Mr. Biden and his team will handle Mr. Trump’s initial trade deal with China given that Beijing continues to fall short of its promise to buy hundreds of billions of dollars in American products. The administration may face the choice of using the deal’s enforcement mechanisms — which include consultations and more tariffs for Chinese products — or scrapping the agreement altogether.Scott Kennedy, a senior adviser in Chinese business and economics at the Center for Strategic and International Studies, said the Biden administration had clear foreign policy goals and a large toolbox of measures at its disposal, but had not yet “figured out how to merge strategy and tactics.”On American competitiveness with China, “there’s a much larger conversation that needs to be had,” Mr. Kennedy said. “Are they going to be willing to engage in that conversation and do that thorough analysis and come up with something new? Or are they going to be fearful of political backlash and pull their punches?”Mr. Biden’s plan to engage more closely with U.S. allies to put pressure on China may also be easier said than done.In an interview in January, shortly before he left office, Robert Lighthizer, Mr. Trump’s top trade official, pointed to a recent investment agreement the European Union signed with China, against the wishes of the Biden administration, as “the first piece of evidence” that such multilateral cooperation would be difficult.Chinese officials are already strengthening ties with U.S. allies like New Zealand and South Korea in an effort “to divide and conquer,” Ms. Cutler said.China has emerged from the early stages of the pandemic emboldened, with its factories and businesses outpacing those in the United States and Europe, where the coronavirus continues to hamper the economy. While Chinese leaders are seeking to reset relations with Washington after a tumultuous period under Mr. Trump, they have continued to make sometimes hard-edge statements.In an interview with CBS News on Feb. 7, Mr. Biden said the two countries “need not have a conflict. But there’s going to be extreme competition.”“I’m not going to do it the way Trump did,” Mr. Biden added. “We’re going to focus on international rules of the road.”Alan Rappeport More

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    Biden and the Fed Leave 1970s Inflation Fears Behind

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    #masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesSee Your Local RiskNew Variants TrackerVaccine RolloutAdvertisementContinue reading the main storySupported byContinue reading the main storyBiden and the Fed Leave 1970s Inflation Fears BehindAdministration and Fed officials argue that workers not getting enough stimulus help is a larger concern than potential spikes in consumer prices.Federal Reserve Chair Jerome H. Powell has brushed off concerns about inflation, saying the bigger risk to the economy is doing too little rather than doing too much.Credit…Pool photo by Susan WalshJim Tankersley and Feb. 15, 2021Updated 5:54 p.m. ETWASHINGTON — Presidents who find themselves digging out of recessions have long heeded the warnings of inflation-obsessed economists, who fear that acting aggressively to stimulate a struggling economy will bring a return of the monstrous price increases that plagued the nation in the 1970s.Now, as President Biden presses ahead with plans for a $1.9 trillion stimulus package, he and his top economic advisers are brushing those warnings aside, as is the Federal Reserve under Chair Jerome H. Powell.After years of dire inflation predictions that failed to pan out, the people who run fiscal and monetary policy in Washington have decided the risk of “overheating” the economy is much lower than the risk of failing to heat it up enough.Democrats in the House plan to spend this week finalizing Mr. Biden’s plan to pump nearly $2 trillion into the economy, including direct checks to Americans and more generous unemployment benefits, with the aim of holding a floor vote as early as next week. The Senate is expected to quickly take up the proposal as soon as it clears the House, in the hopes of sending a final bill to Mr. Biden’s desk early next month. Fed officials have signaled that they plan to keep holding rates near zero and buying government-backed debt at a brisk clip to stoke growth.The Fed and the administration are staying the course despite a growing outcry from some economists across the political spectrum, including Lawrence Summers, a former Treasury secretary and top adviser in the Clinton and Obama administrations, who say Mr. Biden’s plans could stir up a whirlwind of rising prices.No one better embodies the sudden break from decades of worry over inflation — in Washington and elite circles of economics — than Janet L. Yellen, the former Federal Reserve chair and current Treasury secretary. Ms. Yellen spent the bulk of her career fighting in a war against inflation that economists have been waging for more than a half century. But at a time when the American economy remains 10 million jobs short of its pre-pandemic levels, and millions of people face hunger and eviction, she appears to be ready to move on.President Biden and Janet Yellen, the Treasury secretary, are pursuing a $1.9 trillion stimulus package to help struggling households and businesses make it through the pandemic downturn.Credit…Pete Marovich for The New York Times“I have spent many years studying inflation and worrying about inflation,” Ms. Yellen told CNN earlier this month. “But we face a huge economic challenge here and tremendous suffering in the country. We have got to address that. That’s the biggest risk.”In the guarded language of a Fed chair, Mr. Powell used a speech last week to push back on the idea that the economy was at risk of overheating. He said that prices could show a brief pop in the coming months, as they rebound from very low readings last year, and he said the economy could see a “burst” of spending and temporarily higher inflation when it fully reopened. But he said he expected such increases to be short-lived — not the sustained spiral that many economists worry about.“That’s really not going to mean very much,” Mr. Powell said, noting that inflation has trended lower for decades. “Inflation dynamics will evolve, but it’s hard to make the case why they would evolve very suddenly, in this current situation.”A small but influential group of economists is questioning that view — in particular, calling for Mr. Biden to scale back his economic aid plans, which include sending direct payments to most American households, increasing the size and duration of benefits for the long-term unemployed and spending big to accelerate Covid vaccine deployment across the country.They argue that the size of the package outstrips the size of the hole the coronavirus has left in the economy. With so many dollars chasing a limited supply of goods and services, the argument goes, purchasing power could erode or the Fed might need to abruptly lift interest rates, which could send the economy back into a downturn.“It’s hard to look at all those factors and not conclude there’s going to be inflationary pressure,” said Michael R. Strain, an economist at the conservative American Enterprise Institute who supported relief efforts earlier in the recession but was among the first economists to warn Mr. Biden’s plans could set off price spikes. “My worry is that by pushing the economy so hard, that will lead to some overheating.”The Coronavirus Outbreak More

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    W.T.O. Set to Gain New Chief, but Deep Issues Remain

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    AdvertisementContinue reading the main storySupported byContinue reading the main storyW.T.O. Set to Gain New Chief, but Deep Issues RemainThe appointment of the Nigerian economist Ngozi Okonjo-Iweala to lead the World Trade Organization removes one obstacle, but the group’s future remains uncertain.Ngozi Okonjo-Iweala, a development economist who spent 25 years working at the World Bank, will become the first woman to lead the World Trade Organization.Credit…Fabrice Coffrini/Agence France-Presse — Getty ImagesFeb. 14, 2021, 3:26 p.m. ETWASHINGTON — Ngozi Okonjo-Iweala, a Nigerian economist and former finance minister, is poised to become the first woman and first African to lead the World Trade Organization, when the members of the global trade body meet on Monday to consider her candidacy for director general.The appointment would remove a key obstacle to the functioning of the World Trade Organization, which has been leaderless during a time of growing protectionism and global economic upheaval brought about by the pandemic. But even with Dr. Okonjo-Iweala at the helm and the renewed support of the Biden administration, the World Trade Organization, which was founded in 1995 to ensure that trade flows as smoothly and freely as possible, will face steep challenges surrounding its effectiveness as the world’s trade arbiter.Trade negotiations, including an effort to restrain harmful subsidies given to the fishing industry, have dragged on without resolution. A key part of the organization for settling trade disputes, called the appellate body, remains crippled after the Trump administration blocked appointments of new personnel. And there are deep divisions over whether rich and poor countries should receive different treatment under global trade rules.There is also growing consensus that the World Trade Organization has failed to police some of China’s worst economic offenses, which many in the United States consider the world’s biggest trade challenge today. And there is deep uncertainty about whether the group can be overhauled to address those shortcomings.“There are a lot of issues that are begging for reform,” said Wendy Cutler, a former U.S. trade negotiator and a vice president at the Asia Society Policy Institute. She said that the Biden administration’s support for Dr. Okonjo-Iweala could be “an easy way to gain good will and get everyone focused on the important substantive issues.”The Trump administration spent the last four years mostly criticizing or ignoring the World Trade Organization, ultimately weakening the institution by carrying out its most prominent trade policies outside of its boundaries. Rather than working with the World Trade Organization, President Donald J. Trump took on trading partners like China and the European Union one-on-one, deploying hefty tariffs that those governments argued contravened the W.T.O.’s rules.President Biden is likely to take a very different approach. He has criticized Mr. Trump for alienating allies and weakening the multilateral system, and is expected to make the United States a more active player in international groups including the World Trade Organization.That includes supporting the organization’s new leadership. On Feb. 5, the Biden administration announced it would support Dr. Okonjo-Iweala, reversing efforts by the Trump administration to block her candidacy.The former director general, Roberto Azevêdo, announced last May that he would leave the job a year early and departed in August. While the vast majority of the organization’s members supported Dr. Okonjo-Iweala to replace him, Trump administration officials, particularly the former trade representative Robert E. Lighthizer, had criticized her lack of trade experience, and supported the South Korean candidate, the trade minister Yoo Myung-hee, instead.On Feb. 5, Ms. Yoo withdrew from the race.Robert Lighthizer, the Trump administration’s trade representative, expressed no regrets for the role he played in suspending the W.T.O.’s dispute settlement system.Credit…Alyssa Schukar for The New York Times“The United States stands ready to engage in the next phase of the W.T.O. process for reaching a consensus decision on the W.T.O. director general,” the Office of the United States Trade Representative said in a Feb. 5 statement. “The Biden administration looks forward to working with a new W.T.O. director general to find paths forward to achieve necessary substantive and procedural reform of the W.T.O.”Dr. Okonjo-Iweala, 66, is a development economist who spent 25 years working at the World Bank, including as managing director, and served two terms as Nigeria’s finance minister, as well as the country’s foreign affairs minister. A U.S. citizen who earned a doctorate from the Massachusetts Institute of Technology, she serves on the boards of Twitter and Standard Chartered and is an adviser to the Asian Infrastructure Investment Bank. Until recently she served on the board of GAVI, an international organization that distributes vaccines to poor countries.In her first stint as finance minister, she led negotiations that resulted in most of Nigeria’s external debt being wiped out. Later, as coordinating minister of the economy in Nigeria — a powerful position created for her that has never been held before or since — many ministers took directives from her, according to Patrick Okigbo, a policy analyst based in Abuja.In her 2018 book, “Fighting Corruption Is Dangerous,” Dr. Okonjo-Iweala wrote about how her reforms to tackle corruption and shore up the economy made her many enemies. When her mother was briefly kidnapped, she said, the kidnappers demanded Dr. Okonjo-Iweala resign.Her years of navigating Nigerian politics, with its many internal factions and vested interests, had made her “a pro” at choosing and fighting the big battles, Mr. Okigbo said.“If she could handle Nigeria, she should be able to do a good job at the World Trade Organization,” he said.Dr. Okonjo-Iweala has said that her earliest priorities will be ensuring the free flow of vaccines, medicines and medical supplies to help deal with the pandemic and aid the global economic recovery. She has vowed to push for new trade agreements on fisheries and the e-commerce industry, and called for finding “solutions to the stalemate over dispute settlement.” She also said she would prioritize updating trade rules, encouraging members to be transparent and notify one another of changes to their policies, and strengthening the organization’s bureaucracy.Following Dr. Okonjo-Iweala’s appointment, one of the most pressing issues for the World Trade Organization will most likely be the paralysis of its system for settling trade disputes.The appellate body, a part of the organization that considers appeals by countries to W.T.O. decisions on trade disputes, has been shuttered for over a year, after the Trump administration blocked new appointments to the panel that hears those arguments. The Trump administration argued that the appellate body had exceeded the mandate it was created with, ultimately engaging in a kind of judicial activism that undercut U.S. trade law, harming American workers and infringing on American sovereignty.Before leaving office in January, Mr. Lighthizer expressed no regrets for the role he played in suspending the W.T.O.’s dispute settlement system, saying in an interview that it had “become a net negative for America, and getting rid of it was a positive for American interests.”He added that the World Trade Organization had “been largely a failure,” though he said that getting rid of the group entirely would “create more problems than it’s worth.”“I don’t think it did what we said people wanted it to. It hasn’t done anything on the negotiating front to speak of,” Mr. Lighthizer said.While the Biden administration is unlikely to be as critical or confrontational as the Trump administration about the issues plaguing the World Trade Organization, some Democrats share certain concerns about the organization’s shortcomings, including whether the appellate body has unfairly constrained U.S. trade policy. And many officials in the Biden administration recognize the World Trade Organization has only limited power to push China to make economic reforms.The Biden administration’s nominee for United States trade representative, Katherine Tai, knows well the W.T.O.’s strengths and shortcomings.Credit…Hilary Swift for The New York TimesThe Biden administration’s nominee for United States trade representative, Katherine Tai, is intimately acquainted with both the strengths and shortcomings of the global trade body, having successfully litigated cases against Chinese export restrictions at the World Trade Organization during the Obama administration, when she served as general counsel for the office of the trade representative.Ms. Tai led a legal challenge, supported by Canada, Japan and the European Union, to a ban China had imposed on the export of rare earth materials, a key input for electronics. The United States won the case, and China dropped its quotas in 2015.Last week, the Biden administration also announced that it was appointing Mark Wu, a Harvard Law School professor who has written about the World Trade Organization’s shortcomings when it comes to China, as a senior adviser to the office of the trade representative.In an influential 2016 paper, Mr. Wu argued that the World Trade Organization had effectively disciplined China in areas where it has relevant rules. But for some of China’s most egregious economic practices — in particular, the state’s prominent role in industry and its heavy subsidies paid to businesses — the World Trade Organization has fallen short, Mr. Wu said.“The W.T.O. system works but only up to a point,” Mr. Wu wrote. “The W.T.O. faces a challenge: Can the institution craft a predictable and fair set of legal rules to address new trade-distortive behavior arising out of China Inc.? If not, key countries may turn away from the W.T.O. to address these issues. This will weaken the institution.”Ruth Maclean More

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    A Year of Hardship, Helped and Hindered by Washington

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    #masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesSee Your Local RiskNew Variants TrackerVaccine RolloutA Year of Hardship, Helped and Hindered by WashingtonFor Kathryn Stewart, a struggling single mother in Michigan, the past year showed how much safety net programs can help — and how the nation’s fickleness about them can add confusion and uncertainty to fear and worry.Credit…Supported byContinue reading the main storyFeb. 14, 2021Updated 2:57 p.m. ETWhen the coronavirus pandemic struck last March, Kathryn Stewart was working at a gas station in rural Michigan and living in her mother’s trailer with eight relatives, three dogs and a budget with no room for error. Her mother, who is disabled, soon urged her to quit to avoid bringing home the disease. Ms. Stewart reluctantly agreed, wondering how she would support herself and her 10-year-old son.An expanded safety net caught her, after being rushed into place by Congress last spring with rare bipartisan support.To her surprise, Ms. Stewart not only received unemployment insurance but a weekly bonus of $600 more than tripled her income. A stimulus check offered additional help, as did a modest food stamp increase. Despite opaque rules and confounding delays, the outpouring of government aid lifted her above the poverty line.Six months later, after temporary aid expired and deadlock in Washington returned, Ms. Stewart’s benefits fell to a trickle, and she was all but homeless after a family fight forced her from the trailer to a friend’s spare room. She skipped meals to feed her son, sold possessions to conjure cash and suffered anxiety attacks so severe they sometimes kept her in bed.Just as Ms. Stewart finally found a job, celebration turned to shock: The state demanded that she repay the jobless aid she had received, claiming she had been ineligible. That left her with an eye-popping debt of more than $12,000.“I spent the whole day just trying to breathe,” Ms. Stewart said the day the notice arrived. “I’m really confused about the whole thing. I’m trying not to panic.”At times during 2020, Kathryn Stewart was bringing in more money than ever because of government aid programs. At other times, when the aid dried up, she and her son went hungry.Credit…Brittany Greeson for The New York TimesIn the robust aid she received and its painful disappearance, Ms. Stewart’s experience captures both sides of the gyrating federal efforts to fortify the safety net in a crisis of historic proportions.As the virus ravaged jobs last spring, rapid federal action protected millions of people from hardship and showed that government can be a powerful force in reducing poverty.Yet the expiration of aid a few months later also underscored how vulnerable the needy are to partisan standoffs in an age of polarized government. Gaps in aid left families short on food and rent, uncertainty made it impossible to plan and confusion joined fear and worry.In his first weeks in office, President Biden appears to have both lessons in mind. A benefit extension passed in December expires next month, and he is urging Congress to spend big and move fast to keep 11 million workers from losing unemployment aid. Democrats are advancing his $1.9 trillion plan for stimulus and relief with a fast-track procedure that limits their policy options but increases the odds of avoiding more whipsaw delays.Critics of the spending warn it swells the national debt and erodes incentives to work. Supporters say the government’s impact has rarely seemed so direct: When help flowed at extraordinary levels, poverty fell. When it ended, poverty rose.“This could be a watershed moment,” said H. Luke Shaefer, who runs a poverty research center at the University of Michigan. “We showed how much government can do to mitigate hardship, even if the effort didn’t last.”Ms. Stewart and her son, Jack, had to rely at one point on a friend for housing.Credit…Brittany Greeson for The New York TimesWith millions still depending on government aid in a weak recovery, Ms. Stewart’s experience over the past 10 months highlights the stakes. As her complex life shows, the causes of poverty often run deep, and some lie beyond the reach of a government check. But the aid, while it lasted, broke her fall, and she is now back on her feet.In recent weeks, Ms. Stewart, 36, has been working at an Amazon warehouse and fighting Michigan’s efforts to recoup her unemployment benefits. She said she was “super happy” to no longer be at risk from another Washington impasse.An introspective woman, insightful about her hardships but distant from politics, she wonders how federal help has at once been so generous and so unsteady — a question that weighs on millions of Americans now waiting to see whether Congress moves quickly enough to sustain their benefits.“It made a huge difference in our lives,” Ms. Stewart said. “But it starts and stops and it’s really confusing. You feel helpless when you’re being helped by the government.”Should another crisis arise, she said, “I hope the government has a better plan.”Anxiety, Solitude and Then the PandemicMs. Stewart grew up accustomed to hardship and inventive in her responses. In a family too poor for vacations, she created her own by tagging along on her stepfather’s tractor-trailer runs. When he fought with her mother, she sheltered in closets. When he left, her mother tried to quell the family’s hunger with diet pills. Ms. Stewart was in grade school when panic attacks started, which she blamed on the conflict.An unsupervised adolescence followed in Grand Rapids, where Ms. Stewart slept in parks with runaways. She liked the literature of bohemians and rebels — Hunter S. Thompson and Oscar Wilde — but left school at 16 and lived in her car. Short on formal education, Ms. Stewart was long on curiosity and peripatetic instinct, which carried her from Ireland to California in between seasonal work at Michigan resorts. She dyed her hair unusual colors. She gave herself tattoos. She covered her walls with the surrealist works of Salvador Dalí, in shared faith that “you create your own reality.” Fearful of forgetting, Ms. Stewart kept a memory box, which included a middle-school note, a ukulele pick and clippings from her first mohawk.CreditMs. Stewart’s shift at an Amazon warehouse starts at 1:20 a.m. “I’m a number but a number with a paycheck,” she said.Credit…Brittany Greeson for The New York TimesIn her mid-20s, Ms. Stewart married and had a son, Jack, but her husband left and her anxiety grew. “Over the years I’ve gotten real anxious — almost afraid of people,” she said. “I’m an empath — if someone else feels bad, I feel bad.”Still, Ms. Stewart worked, most happily in solitude.By 2019, Ms. Stewart was a night janitor and living with her sister in Grand Rapids. Her sister fell behind on the rent and insisted they move in with their mother, five hours away in rural Ossineke. Ms. Stewart grudgingly succumbed. “We all rely on each other, which is good except for us not getting along,” she said.With four children and conflicting parenting styles, the trailer proved crowded and tense. When Ms. Stewart found work as a gas station cashier — $10 an hour, 20 hours a week — she welcomed the escape as much as the pay.A few weeks later, the coronavirus hit.Against All Odds, Help Was on the Way As the virus spread in early March, President Donald J. Trump insisted it posed no threat. “Jobs are booming, incomes are soaring,” he tweeted. By the next week, Disneyland and Broadway were padlocked and the stock market notched its worst daily loss in decades.While the need for Washington action was clear, the risks of an impasse were great. Liberal Democrats controlled the House, conservative Republicans held the Senate, and Mr. Trump derided the House speaker as “Crazy Nancy” Pelosi. Yet within a few weeks, they agreed on a $2.2 trillion plan.One surprise was how much it did for the poor, a class not known for political clout. Even the poorest families fully qualified for stimulus payments — $1,200 for adults, $500 for children (some Republicans had proposed giving them less) — and at the Democrats’ insistence, Congress greatly expanded jobless benefits.The existing program was filled with gaps: It covered only about a quarterof the jobless and replaced less than half their lost wages. Congress widened coverage, temporarily adding part-time workers, independent contractors and others typically excluded. And for four months it gave everyone on jobless aid a large bonus: $600 a week.The payments were more than many workers had earned on the job. Critics said the aid would discourage the jobless from seeking work, but urgency prevailed. “Gag and vote for it anyway,” the Senate leader, Mitch McConnell, advised fellow Republicans. The Senate vote was 96 to 0.Approving aid was one thing, delivering it another. Most stimulus checks arrived automatically and fast, though people who did not file tax returns had to contact the Internal Revenue Service — a procedural hurdle that kept payments from about eight million potentially eligible people, mostly low-income. Households with undocumented immigrants were barred from stimulus checks, which excluded about five million spouses and children who were citizens or legal residents.Unemployment insurance proved harder to get. With nearly 40 million claims in nine weeks, the state-run programs were overwhelmed. Computers crashed. Phone lines jammed. Governors called in the National Guard to process requests.Food shortages soared, especially among families with children as school closures deprived millions of meals. Lines outside food banks stretched for miles.The Coronavirus Outbreak More

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    The Clash of Liberal Wonks That Could Shape the Economy, Explained

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    AdvertisementContinue reading the main storyUpshotSupported byContinue reading the main storyThe Clash of Liberal Wonks That Could Shape the Economy, ExplainedThey all agree pandemic aid is warranted, but the question is how big and how quickly.Feb. 8, 2021Updated 5:43 p.m. ETJoe Biden in an October 2009 meeting with economic advisers, including Larry Summers, second from right. Mr. Summers, then the director of the National Economic Council, is one of the economists now questioning the scale of the Biden administration’s pandemic stimulus plan.Credit…Mandel Ngan/Agence France-Presse — Getty ImagesA fierce debate is underway among centrist and left-leaning economists, taking place in newspaper op-eds, heated exchanges on Twitter, and even at the White House lectern. Unlike most internecine battles within a narrow intellectual tribe, this one will shape the future of the American economy and the political fortunes of the Biden administration.The core question is whether the administration’s $1.9 trillion pandemic rescue plan is too big. Is action on that scale needed to contain the economic damage from the coronavirus and get the economy quickly on track to full health? Or is it far too big relative to the hole the economy’s in, thus setting the stage for a burst of inflation followed by a potential recession, as leading center-left economists including Larry Summers (the former Treasury secretary) and Olivier Blanchard (a former chief economist at the International Monetary Fund) have argued in recent days?This clash of ideas is taking place at a crucial moment. With the Senate at a 50-50 partisan divide, a single Democratic senator who finds the arguments of Mr. Summers and Mr. Blanchard persuasive could require President Biden to trim his ambitions, with far-reaching consequences for his presidency and the economy.The substance of the debate touches on important macroeconomic concepts like economic speed limits, the risks of deficits and the origins of inflation. But it is impossible to separate the substance from the personal history of those involved.It has created stark divides among economic policy thinkers who for the most part know one another, have worked together in government, have spoken at the same think tank events, and share mostly similar political views.Hanging over it all is the legacy of the Clinton-era Democratic policy establishment, and a continuing debate about past policy decisions.What is in dispute?President Biden’s pandemic aid plan includes direct spending for Covid testing and vaccine rollout, expanded unemployment insurance, money for schools and child care, and $1,400 payments to most Americans. It comes on the heels of a $900 billion bipartisan pandemic aid act enacted in December.For weeks, policy veterans have been fretting among themselves over the scale of Mr. Biden’s proposal, in private emails and text chains. Mr. Summers made those concerns public with an op-ed in The Washington Post last week. Mr. Blanchard has backed him on Twitter, as has Jason Furman to some degree, chairman of the Council of Economic Advisers under President Barack Obama.What is their argument?As Mr. Summers wrote, it is a good idea to spend whatever it takes to contain the virus and enable the economy to recover quickly from its pandemic-induced downturn. Provisions that strengthen the safety net for those who are suffering are worthwhile.The problem, he says, is that the plan’s total size reaches a scale that risks major future problems. In particular, the total money being proposed far exceeds most estimates of the “output gap.” (More on that below.) That implies that much of that spending will just slosh around the economy, causing prices to rise, potentially hindering the rest of Mr. Biden’s agenda and risking a new recession.This isn’t a conventional argument between doctrinaire deficit hawks and doves, but something more subtle. In the past, Mr. Summers in particular has repeatedly called for larger budget deficits to help combat “secular stagnation,” in which major world economies are mired in slow growth, and he has supported large pandemic aid packages.But Mr. Summers says any new spending package should pay out gradually over time and be devoted more substantially to long-term investments.“There is nothing wrong with targeting $1.9 trillion, and I could support a much larger figure in total stimulus,” he wrote in a follow-up article. “But a substantial part of the program should be directed at promoting sustainable and inclusive economic growth for the remainder of the decade and beyond, not simply supporting incomes this year and next.”What’s the output gap?Imagine a world in which the American economy is cranking at its full potential. Pretty much everyone who wants to work is able to find a job. Every factory is at its complete capacity. The output gap is, simply, how far away the economy is from that ideal state.A traditional approach to fiscal stimulus has been to estimate the size of that gap, apply some adjustments to account for the way federal spending circulates through the economy, and use that arithmetic to decide how big a stimulus action ought to be.In theory, if the government pumps too much money into the economy, it is trying to generate activity over and above potential output, which is impossible to sustain for long. Workers might put in overtime, and a factory might run extra hours for a while, but eventually the workers want a breather, and the machines need to shut down for maintenance. If there is more money floating around in the economy than there is supply of goods and services, the result won’t be increased prosperity, but rather higher prices as people bid up the things they want to buy.By that traditional thinking, Mr. Summers and other skeptics are on solid ground. The Congressional Budget Office is projecting an output gap for 2021 of only $420 billion, implying that $1.9 trillion in additional cash is much more than the economy needs to fill the gap. Even if you believe the C.B.O. is too pessimistic about America’s potential, we’re talking orders of magnitude of difference.There are problems with this argument, though. For one, potential output is a theoretical concept, not something we can ever know with precision. In fact, there is a solid case to be made that technocrats have underestimated the economy’s true potential for years, given the absence of inflation in 2018 and 2019 despite a hot job market.For another, it imagines the economy as a series of hydraulic tubes, in which a skilled engineer can push the right buttons to achieve a predictable outcome. In macroeconomics, especially in the era of a once-a-century pandemic, things might not be so simple.How is the Biden administration responding?Aggressively.Treasury Secretary Janet Yellen and other top officials have taken to the airwaves in recent days to argue that their proposal is prudent and appropriately scaled.Administration officials have described the plan as “bottom-up,” meaning it was devised by starting with specific problems facing Americans — a lack of income for those out of work, bottlenecks in vaccine delivery, a lack of funds for school reopening — and then ending with forecasts of the sums necessary to solve those problems.Their argument is that the United States is in a do-whatever-it-takes moment, and that the most urgent goal is to try to ensure that the economy can fully reopen as quickly as possible while preventing potential lasting damage to families and businesses.“I think that the idea now is that we have to hit back hard; we have to hit back strong if we’re going to finally put this dual crisis of the pandemic and the economic pain that it has engendered behind us,” Jared Bernstein, a member of the White House Council of Economic Advisers, said in a news briefing Friday.They do not dismiss the possibility that there will be higher inflation down the road — but say it is a manageable risk.Inflation is “a risk that we have to consider,” Ms. Yellen said on CNN’s “State of the Union” on Sunday, but “we have the tools to deal with that risk if it materializes” and “we have a huge economic challenge here and tremendous suffering in the country.”“That’s the biggest risk,” she said.In the logic that has prevailed within the administration and among other former officials who support the approach, it misses the point to theorize about output gaps and inflation risks. They say this relief should be thought of differently than traditional fiscal stimulus.“Relief payments are life support,” wrote Austan Goolsbee, another former Obama adviser. “To avoid permanent damage, they need to last as long as the virus does. Without them, the chance of deterioration and irrevocable harm soars.”So if this passes, is there really going to be a huge burst of inflation?Maybe.The economy is in uncharted territory. With potentially trillions of pandemic aid spending on the way — in addition to vast accumulated savings over the last year because of Americans’ pandemic-constrained spending and stimulus-boosted incomes — there is a lot of money poised to be spent.And some things may reduce the supply of goods and services, like disruptions to global supply chains resulting from the pandemic and business closures.Lots of money chasing finite supply is an Economics 101 recipe for surging prices.But for the medium term, the more important question is whether any inflation surge would be a temporary not-so-harmful phenomenon or the start of something more lasting.Why does that matter?The Federal Reserve will be inclined to mostly ignore a one-time shock of post-pandemic inflation. Chair Jerome Powell said so in a news conference last month.There is a possibility “that as the economy fully reopens, there’ll be a burst of spending because people will be enthusiastic that the pandemic is over,” Mr. Powell said. “We would see that as something likely to be transient and not to be very large.”In that case, he said, “the way we would react is we’re going to be patient.”It might even help rebalance the economy after years in which the United States has depended on low interest-rate policies from the Fed to keep growth afloat. Somewhat higher inflation would mean lower “real,” inflation-adjusted interest rates, and might gain the Fed some credibility that it will not permit inflation to be persistently too low. It could, plausibly, get back to above-zero interest rates sooner than it would otherwise, taking the air out of financial bubbles and giving it more room to combat the next downturn.However, if surging prices were to create a vicious cycle of higher prices and higher wages, the Fed would be inclined to raise interest rates enough to try to break that cycle — potentially driving the economy into another recession in the process. That is the last thing that American workers need, let alone Democrats seeking to hold Congress in 2022 and the White House in 2024.So is this part of a wider philosophical divide among Democratic economists?There is no ideological chasm here.But there is a deeper division than just the technical question of the output gap’s size or what the risks are of too much versus too little pandemic aid. Rather, the Biden approach represents a rejection of the technocratic bent within the Democratic Party that many on the left believe has been deeply damaging to the country.President Bill Clinton and President Obama relied for economic advice on what might be called the Bob Rubin coaching tree. Mr. Rubin, who served as Treasury secretary in the 1990s, was a mentor to Mr. Summers, who was a mentor to Timothy Geithner, Mr. Obama’s first Treasury secretary, and so on.The policymakers in this tradition view themselves as rigorous, careful and pragmatic. Many liberals view them as excessively moderate, too deferential to Wall Street and clueless about the political dynamics that could make for durable policies to help the working class.The Biden administration includes many top officials from outside that tree, such as Ms. Yellen. And it is particularly seeking to correct what are seen as the mistakes of the early Obama administration, when Mr. Summers and Mr. Geithner were in top jobs.The new administration sees this as a moment of profound crisis, a time when it must act on a scale commensurate with the problem. It is betting that if it solves the problem, its political fortunes will be better rather than worse, and it can always deal with inflation or other side effects if they come.In a sense then, the debate over pandemic aid isn’t entirely about output gaps or risk trade-offs. It’s about which mode of policymaking ought to prevail in the Democratic Party.AdvertisementContinue reading the main story More

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    Biden Appointments Signal a Trade Approach That Hews to the Left

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    #masthead-section-label, #masthead-bar-one { display: none }The Presidential InaugurationHighlightsPhotos From the DayBiden’s SpeechWho Attended?Biden’s Long RoadAdvertisementContinue reading the main storySupported byContinue reading the main storyBiden Appointments Signal a Trade Approach That Hews to the LeftMany appointees who will fill the ranks of the Office of the United States Trade Representative have close ties to congressional Democrats and a focus on worker rights and enforcing trade deals.Several new appointees have worked closely with Katherine Tai, the Biden administration’s nominee for United States trade representative.Credit…Hilary Swift for The New York TimesFeb. 8, 2021, 5:00 a.m. ETWASHINGTON — The Biden administration announced a number of personnel appointments on Monday for the Office of the United States Trade Representative with close ties to the progressive wing of the Democratic Party, in a signal that the new administration is likely to pursue what it calls a “worker focused” approach to trade.Biden officials have said they want to seek a trade policy that benefits economically disadvantaged Americans. But it has remained unclear whether the administration would cater more to unions and the left wing of the party, which emphasize strong labor rights and trade rules that protect American workers, or to the moderate Democrats, who typically prefer lower trade barriers and a freer approach to trade.The personnel appointments, which were first viewed by The New York Times, are one of the strongest signs yet that the Biden administration is seeking to take a different approach to trade policy than past Democratic administrations, which focused more on promoting American exports and geopolitical influence through striking trade deals. Mr. Biden, by contrast, has said he does not intend to begin negotiating new free-trade agreements until his administration has helped to subdue the coronavirus pandemic and made major investments in American industry and infrastructure.Instead, his trade staff may focus more on ensuring that American trade rules are adequately enforced and that they promote rather than impede other parts of Mr. Biden’s agenda, including fighting climate change and encouraging domestic investment. The picks include several key staff members to congressional Democrats who helped to revise and pass the United States-Mexico-Canada Agreement. That suggests that a major task in the coming months will be ensuring that the North American Free Trade Agreement’s successor, which raises labor standards and requires new unions at Mexican factories, is fully put in place and enforced.The team will also have to decide what to do about the legacy of higher trade barriers and large tariffs on a variety of foreign products, including goods from China, left behind by President Donald J. Trump. Mr. Biden has said his administration is still reviewing the effects of those tariffs and other trade policies issued by Mr. Trump. But on Feb. 1, Mr. Biden reinstated tariffs on aluminum from the United Arab Emirates, a move that pleased unions but disappointed industries that have argued that the tariffs raise costs.Several of the appointees worked closely with Katherine Tai, the Biden administration’s nominee for United States trade representative, on revising the new North American trade deal, which was negotiated by the Trump administration and replaced NAFTA last year.That includes Nora Todd, a former adviser for Senator Sherrod Brown of Ohio, who will serve as chief of staff, and Greta Peisch, a former counsel to Senator Ron Wyden of Oregon, who has been appointed general counsel. Shantanu Tata, a former adviser to Representative Suzan DelBene of Washington, will serve as executive secretary and adviser, and Samuel Negatu, a former legislative director for Representative Jimmy Gomez of California, will serve as director of congressional affairs.Other appointments include Sirat K. Attapit, who previously worked for Attorney General Xavier Becerra of California, as assistant U.S. trade representative for intergovernmental affairs, and Adam Hodge, a former Obama administration official, as assistant trade representative for media and public affairs. Jan Beukelman, a staff member for Senator Thomas R. Carper of Delaware, will serve as assistant U.S. trade representative for congressional affairs, while Jamila Thompson, who served on the staff of Representative John Lewis of Georgia, will be senior adviser.The administration also named Brad Setser, an Obama administration Treasury official, as counselor to the U.S. trade representative. Mr. Setser has written extensively on the role of both currency and taxation in trade, suggesting that the new administration could take a more expansive view on changing tax and currency policy to boost American exports and benefit workers.Mark Wu, a professor and vice dean at Harvard Law School with an extensive background in intellectual property, digital trade issues and China, was appointed as senior adviser to the U.S. trade representative. In the position, he could help the office create new trade rules to govern the digital economy and constrain trade practices from China that the United States deems unfair.AdvertisementContinue reading the main story More