A post from Dean Baker prompts me to show you the following chart:

Corporate profits go up and down with the business cycle, but averaged 5-6 percent of GDP on a pretty steady basis through 2002. Then things changed. Since 2002, profits have increased dramatically, and today stand at about 9 percent of GDP. Now take a look at a chart showing median wage income for workers:

It’s a mirror image. Up through 2002, wage income was rising. Not a lot, but the trend was generally upward. Since 2002, however, wages have been dead flat.

Baker estimates that a change in corporate earnings of 4 percentage points is about equal to $4,000 per person in annual earnings. That accounts almost precisely for the change in the trendline. Corporate profits have increased about $600 billion more than the previous trend, while median earnings have increased about $600 billion less than the previous trend. This is not a coincidence. Now one final chart:

It’s the same inflection point. So here’s the story:

• Since 2002, corporations have been retaining much higher profits than they used to.
• They could do this because they stopped giving their employees annual raises.
• As a result, the number of women joining the labor force began declining. (The number of men in the labor force was already declining, and this trend continued.)
• Businesses then began complaining that they couldn’t find enough qualified workers.

There are qualified workers out there. At least, there would be if more of them had been given stronger incentives to join or stay in the labor force. But they weren’t because CEOs and shareholders wanted more money for themselves. Now they’re stuck.

Corporate America can either pay its executives more or it can pay its workers more. It’s their choice. But if they choose to stiff workers and rake in more profits for themselves, they need to quit griping when a few million of those same workers decide to stay home instead of taking the jobs they have on offer. Most people can’t afford to make that choice, of course, but there are always a few percent at the margin who can. And they have.

A few minutes ago, as I was biting into a taco, I learned that EPA administrator Scott Pruitt had finally resigned after accumulating a truly astonishing array of weird, penny-ante scandals over the past 18 months. By chance, I had just read an AP piece about life in Donald Trump’s cabinet, where I learned how the president had handled Pruitt’s troublesome behavior at a recent meeting. Here you go:

Agency head Scott Pruitt caught a sharp admonition from Trump to “knock it off” after his ethics problems dominated cable television.

That’s leadership! And check out Pruitt’s resignation letter:

Truly, your confidence in me has blessed me personally…. I count it a blessing to be serving you in any capacity…. My desire in service to you has always been to bless you as you make important decisions for the American people…. I pray as I have served you that I have blessed you and enabled you to effectively lead the American people.

I still haven’t quite figured out Pruitt. His endless little scandals are just so…weird. What’s the right word to describe them? It’s like he was living some bizarre kindergarten version of corporate perkdom. He obviously thought his elevation to Trump’s cabinet entitled him to be treated like an especially fair-haired Fortune 500 CEO, but in practice he acted like a guy who had never set foot in a corporation and had heard only gauzy, faraway stories about CEO perks—and not even understood those very well. What a strange man.

The New York Times reports that steel users are unhappy about President Trump’s steel tariffs:

“In a few days, domestic companies raised prices on stainless steel anywhere from 15 to 25 percent,” said Joe Carlson, president of Lakeside Manufacturing, a medical and food service equipment maker in Milwaukee with 175 employees. He is also president of the North American Association of Food Equipment Manufacturers, which represents more than 550 companies. “I’ve been in this business 24 years, and I’ve seen price increases and tariffs,” Mr. Carlson said, “but haven’t seen this combination before.”

The poster boy for steel tariffs in this article is Mark Vaughn, who runs a metal stamping plant in Nashville:

As the year started, he planned to add five or six new machinists in $28-an-hour jobs. His tax bill was going down, he had a fat backlog of orders, and one of his biggest clients, the Swedish appliance manufacturer Electrolux, was planning to invest $250 million to modernize its nearby Springfield plant. But when the administration dangled the prospect of tariffs, Electrolux announced that it was postponing the upgrade, citing concerns about rising steel prices. “This is a message to the administration,” the company said in a statement.

Vaughn Manufacturing’s backlog has dwindled, and Mr. Vaughn said he would probably have to revise price quotes he promised six months ago. Instead of expanding his work force, which he described as “very highly skilled,” he is thinking of cutting five to 10 jobs out of his 50-person staff….“We were probably in line for $2 million to $3 million worth of work” making cooktops for Electrolux, he explained. And as for the new tax cuts, he pointed out, “Tariffs are a tax, so they took that advantage right back out of there.”

Tariffs are a tax! In this case, it’s a tax that people like Mark Vaughn pay directly to American steel companies.

Meanwhile, US Steel plans to invest about $300 million this year in capital projects—less than they spent in both 2016 and 2017. They increased their capital expenditures last year because global prices were rising, but they have no plans to continue that in 2018. And why would they? Tariffs can go away at any moment, after all. You’d be nuts to invest a huge sum in plant expansions that won’t come on line for at least a year, at which time the Trump tariffs might be a distant memory.

So: Steel mills will probably hire a few more people to work extra shifts, but most of the price increase will go straight to the bottom line. This means that steel executives and shareholders will be richly rewarded while users of raw steel, like Mark Vaughn, will lay off workers. And American consumers will pay more for products made of steel. Tell me again how this makes America great again?

Here’s a colorful composite photo of our neighborhood fireworks display last night. Photoshop is a great tool for people who hate to play favorites.

Crystal ball: SIPA Asia; Collins: Bill Clark/Congressional Quarterly/Newscom via ZUMA

I would like to make a prediction:

• Donald Trump will nominate a Supreme Court justice who is very plainly a vote to overturn Roe v. Wade.
• Susan Collins will announce that she needs to take a careful look at Trump’s choice.
• She will spend an hour with the nominee, who will assure her of undying respect for stare decisis.
• Collins will declare herself satisfied and vote to confirm.
• A year from now the Supreme Court will accept a new abortion case. Six months later it will issue a 5-4 decision overturning Roe v. Wade.
• Collins will announce that she’s disappointed.

This isn’t much of a prediction, since pretty much everyone seems to agree that this is what will happen. However, I want to make it public to help run up my score in the year-end predictions horserace.

G. Ronald Lopez/ZUMA

Last night I ran across a post by Corey Robin about a sudden shift in liberal political views:

In the wake of the primary victory of Alexandria Ocasio-Cortez, there’s been a dramatic shift in mainstream liberal opinion—in the media, on social media, among politicians, activists, and citizens—toward Sanders-style positions. People who were lambasting that kind of politics in 2016 are now embracing it—without remarking upon the change, without explaining it, leaving the impression that this is what they believed all along.

As you can imagine, this causes no end of consternation in certain precincts of the left. For some legitimate reasons. You want people to acknowledge their change in position, to explain, to articulate, to narrate, perhaps to inspire others in the process. And for some less legitimate, if understandable, reasons: people are pissed at the way Sanders-style politics was attacked in 2016; they feel that they were unfairly maligned; they want folks to own up to it.

Robin goes on to muse about how and why people change their minds, but I’m more interested in stopping here. Is Robin right? Has there been a dramatic shift in mainstream liberal opinion over the past week? He doesn’t cite anyone whose opinion has shifted, and it’s news to me if it’s happened. What I’ve mostly seen from the Democratic establishment has been skepticism that Ocasio-Cortez’s victory signals any kind of broad movement. Nancy Pelosi warned the press not to get carried away. Tammy Duckworth said Ocasio-Cortez was fine for the Bronx, but certainly not for Illinois. Even DNC chair Tom Perez, who was enthusiastic about Ocasio-Cortez’s win, chalked it up to the “depth” and “diversity” of the Democratic Party—and made sure to praise the old-school Dem Joe Crowley as he did so.

I think that Sanders-style positions have gained a bit of ground in the past year or two, but even there I’d be cautious. The biggest shift has been in the number of people willing to support Medicare-for-All, but that’s a very fuzzy position that means different things to different people. The rest of the Sanders platform hasn’t even gotten that far. Free college? Break up the banks? A 90 percent top tax rate on millionaires? So far I haven’t seen those positions gain a lot of new support. The only Sanders position that’s clearly won the day has been the $15 minimum wage.

Am I wrong? Has there been a sea change in the past week that I’ve missed? If so, where is it?

David Drucker asks and answers his own question about Donald Trump’s lack of energy on immigration reform:

It’s one of the more curious aspects of this administration that Donald Trump—perhaps the most hardline anti-immigration voice in a generation—hasn’t actually been more active in pushing for a rewrite of U.S. immigration regulations. He’s demanded a raft of groundbreaking changes that would restrict both legal and illegal immigration if they ever overcame bipartisan majorities on Capitol Hill. But in 18 months, the president hasn’t bothered to lead a major effort in Congress to get it done. He’s good at creating political crises—using his executive authority to rescind DACA and to order family separation at the border—but has no instinct for solving them. He’s persistent about the construction of a wall, always looking for new and creative ways to pay for it, but hasn’t managed to secure sufficient funding from his own party.

Of course, the president’s interests aren’t entirely aligned with Republican leadership. Trump understands intuitively that his base is more energized by the thrum of battle than by a cease-fire. Congress, however, is expected to deliver results.

Trump happened on illegal immigration as a campaign theme sort of by accident, and his instincts kicked into overdrive when it turned out to be an unusually effective weapon. But he never had any actual interest in the issue beyond “build a wall and make Mexico pay for it,” so once he got in office he outsourced the whole mess to Stephen Miller and Jeff Sessions. Miller’s only goal is to prevent anything from happening, and happily, this aligns with Trump’s instinct that illegal immigration is better as a campaign issue if it’s left unsolved. After all, take a look at how it polls:

Ever since 2006, when George Bush’s immigration reform imploded, the public has become ever less concerned about illegal immigration. And why not? Since then we’ve built hundreds of miles of fencing; we hired thousands of new border patrol agents; we increased the level of deportations; and we cut down the level of illegal immigration by more than half. The result is that even after two years of the most relentless attacks on “illegals” in recent history, the response of the nation is a big yawn. The fear campaign just hasn’t worked.

Solving a problem that’s losing salience isn’t a big political winner. However, keeping your base fired up is, and there are plenty of conservatives who are still fired up about illegal immigration. For Trump, then, keeping illegal immigration alive as an issue for his base is his best bet unless Democrats can make him pay a price for it. Trump’s own-goal on DACA has given them their first chance at this in a long time, but so far Trump has calculated that it’s not enough. Democrats may have the public on their side, but they haven’t yet been able to turn that into substantial pressure on Republicans.

In the meantime, there’s not much point in “solving” illegal immigration since (a) we largely have solved it and (b) it’s steadily losing ground as a mover of broad public opinion. What’s more, anything that truly cuts illegal immigration even further—like mandatory E-Verify—is opposed by the business wing that really controls the party. Put all this together and it makes sense that hardly anyone in the Republican Party is really much interested in doing anything.

Happy 242nd birthday, America!

Mother Jones; J. Scott Applewhite/AP

Last night I wrote about Imran Awan, a Capitol Hill IT specialist who got caught up in a senseless “lock him up!” Twitter jihad from Donald Trump. Did this put Awan in personal danger? There’s no way to know, but it certainly might have.

Now here’s Marcy Wheeler, who has been reporting on mass surveillance and civil liberties since the Bush administration. To her own shock, last year she came across some information about Russian meddling in the 2016 election that she felt she had to pass along to the FBI:

[One] reason I’m disclosing this now is to put a human face to the danger in which the House Republicans are putting other people who, like me, provided information about the Russian attack on the US to the government.

….My risk isn’t going to go away — indeed, going public like this will surely exacerbate it. That’s to be expected, given the players involved. But I’m a public figure. If something happens to me — if someone releases stolen information about me or knocks me off tomorrow — everyone will now know why and who likely did it. That affords me a small bit of protection. There are undoubtedly numerous other witnesses who have taken similar risks to share information with the government who aren’t public figures. The Republicans’ ceaseless effort to find out more details about people who’ve shared information with the government puts those people in serious jeopardy.

….This investigation is not, primarily, an investigation into Donald Trump. It’s an investigation into people who attacked the United States. It’s time Republicans started acting like that matters.

Here’s a bit of Twitter commentary:

5. Her story is more public than that of other FBI sources, but it is not unique. Sources get a terrible deal. They often give information to FBI and other agencies in ways that make them and their families financially poorer and physically less safe.

— Pwn All The Things (@pwnallthethings) July 3, 2018

6. And here’s the thing: sources don’t have to. Marcy took on real and perceived costs to herself because she thought it mattered to give FBI info. And now the administration is busy burning sources for 30 seconds of Hannity Time to undermine the Special Counsel investigation.

— Pwn All The Things (@pwnallthethings) July 3, 2018

7. And she’s pissed about it and I don’t blame her at all. FBI sources aren’t spending their cash and their safety to give the administration 30 seconds of Hannity Time talking points. They’re doing it because they believe the information matters, and FBI needs to be aware of it. pic.twitter.com/HbFKCdvoIe

— Pwn All The Things (@pwnallthethings) July 3, 2018

8. If she got the same info today, having watched the House playing politics with sources, I don’t know if she would have eventually come to a different conclusion as to whether to share it with FBI. But I have no doubt she would have been less inclined to, and might have not.

— Pwn All The Things (@pwnallthethings) July 3, 2018

9. She’s not the only FBI source. Other FBI sources, both current and potential, who have different sets of information and who might have even bigger costs and risks to themselves are also having these conversations too, even if they do so less publicly.

— Pwn All The Things (@pwnallthethings) July 3, 2018

10. Not all of them will settle on “no” because of it. But more will. And those lost sources and lost leads will be measured in more failed investigations and fewer preventable crimes being stopped before they happen.

That is the ultimate price of playing politics with sources.

— Pwn All The Things (@pwnallthethings) July 3, 2018

This is what Devin Nunes and his merry band of Trump fanatics are doing. It’s both repugnant and insanely reckless.

Miguel Gutierrez/EFE via ZUMA

Let’s invade Venezuela!

As a meeting last August in the Oval Office to discuss sanctions on Venezuela was concluding, President Donald Trump turned to his top aides and asked an unsettling question: With a fast unraveling Venezuela threatening regional security, why can’t the U.S. just simply invade the troubled country? … He pointed to what he considered past cases of successful gunboat diplomacy in the region, according to the official, like the invasions of Panama and Grenada in the 1980s.

The idea, despite his aides’ best attempts to shoot it down, would nonetheless persist in the president’s head. The next day, Aug. 11, Trump alarmed friends and foes alike with talk of a “military option” to remove Maduro from power….Shortly afterward, he raised the issue with Colombian President Juan Manuel Santos, according to the U.S. official. Two high-ranking Colombian officials who spoke on condition of anonymity to avoid antagonizing Trump confirmed the report.

Well, at least Trump didn’t ask if it would be OK to nuke Caracas. That’s something, I suppose.