On Labor Day, Trump slams union leader who criticized him
Tuesday, September 4
WASHINGTON (AP) — President Donald Trump started his Labor Day with an attack on a top union leader, lashing out after criticism from AFL-CIO President Richard Trumka.
Trump tweeted Monday that Trumka “represented his union poorly on television this weekend.” He added: “It is easy to see why unions are doing so poorly. A Dem!”
The president’s attack came after Trumka appeared on “Fox News Sunday” over the weekend where he said efforts to overhaul the North American Free Trade Agreement should include Canada. Trumka, whose organization is an umbrella group for most unions, said the economies of the United States, Canada and Mexico are “integrated” and “it’s pretty hard to see how that would work without having Canada in the deal.”
Trump said Saturday on Twitter that there was “no political necessity” to keep Canada in NAFTA. But it’s questionable whether Trump can unilaterally exclude Canada from a deal to replace the three-nation NAFTA agreement, without the approval of Congress. Any such move would likely face lengthy legal and congressional challenges.
Trump administration negotiations to keep Canada in the reimagined trade bloc are to resume this week as Washington and Ottawa try to break a deadlock over issues such as Canada’s dairy market and U.S. efforts to shield drug companies from generic competition.
Trump wants to get a trade deal finalized by Dec. 1.
Trumka also said of Trump: “The things that he’s done to hurt workers outpace what he’s done to help workers,” arguing that Trump has not come through with an infrastructure program and has overturned regulations that “will hurt us on the job.”
Asked about the low unemployment rate and economic growth, Trumka said “those are good, but wages have been down since the first of the year. Gas prices have been up since the first of the year. So, overall, workers aren’t doing as well.”
On Monday, Trump touted the economy, saying “Our country is doing better than ever before with unemployment setting record lows.” He added, “The Worker in America is doing better than ever before. Celebrate Labor Day!”
The unemployment rate of 3.9 percent is not at the best point ever — it is near the lowest in 18 years.
Why there’s so much inconsistency in school shooting data
September 4, 2018
Assistant Professor of Criminal Justice, Pennsylvania State University
Lacey Wallace does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
Pennsylvania State University provides funding as a founding partner of The Conversation US.
How many school shootings happen in the U.S. in a single school year? The answer is surprisingly hard to figure out.
In April, the U.S. Department of Education released a report on the 2015-2016 school year, stating that “nearly 240 schools (0.2 percent of all schools) reported at least 1 incident involving a school-related shooting.” However, the nonprofit Everytown for Gun Safety’s database lists only 29 school shootings for the same period.
When National Public Radio investigated the inconsistency, they found that 161 of the Department of Education’s 240 shootings either did not occur or could not be confirmed by the school districts involved. Similarly, the American Civil Liberties Union contacted each school that allegedly had a shooting and found that 138 of the reported shootings were errors.
So where does school shooting information come from? How could these counts be so far apart?
The laws on guns in schools
Students are legally prohibited from bringing guns to school. That means they can be in serious trouble, even if they never fire the gun.
The Gun-Free Schools Act of 1994 requires schools in any state receiving certain federal funding to implement a one-year expulsion rule for students who bring a firearm to school. Students found in possession of a firearm must also be referred to the criminal justice or juvenile justice system.
Each year, schools must report any firearm-related expulsions. Those can include shootings, but also firearm possession and other firearm crimes. Schools report firearm offenses like these to the Civil Rights Data Collection (CRDC), which is operated by of the Department of Education.
In a biennial survey, the CRDC asks schools and other public local educational agencies like charter schools: “For the regular (…) school year, not including intersession or summer, was there at least one incident at the school that involved a shooting (regardless of whether anyone was hurt)?”
The U.S. Department of Education used the results of this question to estimate the number of school shootings for 2015-2016.
Schools are expected to report any incidents that occur during school hours on school grounds. In addition to shootings, schools report the number of incidents that involved possession of a firearm, as well as the number of robberies, homicides, physical attacks and physical fights that involved a “firearm or explosive device.”
Room for error
A closer look at this survey shows why the U.S. Department of Education’s data was so inaccurate.
First, there are problems with the definition of the term “shooting.” Nowhere in the CRDC survey is that word clearly defined. Is it a shooting if a student has a gun that accidentally goes off? Could the term “shooting” refer to incidents involving toy guns?
Schools are asked to provide counts of various crimes involving firearms or explosive devices, so some counts of possession or attacks may be due to weapons other than firearms. The CRDC’s definitions of various terms may differ from those used by state agencies or even the school districts themselves. If schools don’t record disciplinary actions using the same terms, reporting becomes very difficult.
Second, there’s the issue of the burden on school administrators. Schools already report a great deal of information to state agencies. Locating the required information or re-reporting information to multiple agencies can be time-consuming, possibly leading to errors or confusion about what to report. The CRDC is making some changes to their 2017-18 data collection effort to reduce this burden.
It’s also easy to make mistakes. A school administrator might accidentally type a 9 rather a 0. Or they may accidentally enter the number of offenses for one crime category in the space allotted for another category. These errors may not be spotted until after the results of the survey are made public. There’s currently no procedure in place to verify that reported shootings are, in fact, shootings.
Members of the community line up outside the Santa Fe High School to show support for students as they return for the first day of class since a deadly mass shooting in Santa Fe, Texas. REUTERS/Pu Ying Huang
Why getting the count right is so important
Errors like these can have major consequences – especially if the number is inflated.
A Pew Research Center poll in April found that 57 percent of teens were somewhat or very worried that a school shooting could happen in their school. Parents of teens were even more likely to report worry over school shootings, especially those with low incomes. Some families are considering homeschooling their children out of fear of school shootings.
School shooting counts can also sway policy. In this year alone, 26 states considered bills or resolutions related to arming school personnel. Even more introduced bills or resolutions related to guns in K-12 schools more generally.
Some sources of school shooting data, like Everytown, rely on a different resource: the media. They look for news mentions of school shootings instead of reports from the schools themselves. However, these counts can also be inaccurate. Not all firearm-related offenses come to the attention of the media. Some media mentions must be verified with law enforcement to ensure the details are accurate.
Combining methods may be our best option. As a researcher who studies criminal justice, I believe verifying school shooting reports with a media search may reduce errors without placing undue burden on schools. Double-checking each reported shooting is time-consuming and costly. Unfortunately, so are the consequences of getting the count incorrect.
Oil and gas execs out-earn their peers. Are they overpaid?
September 4, 2018
Professor at the Haas School of Business, University of California, Berkeley
Assistant Professor of Public Policy, University of Michigan
Catherine Hausman’s research has been funded by the Brookings Institution, the California Energy Commission, the National Bureau of Economic Research, Resources for the Future, the Sloan Foundation, and the Social Sciences and Humanities Research Council of Canada.
Lucas Davis does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
University of Michigan and University of California provide funding as founding partners of The Conversation US.
Following a long slump, crude prices have rebounded to about US$70 per barrel. That may make 2018 the most profitable year for oil and gas companies in at least four years.
Will oil and gas executives reap big rewards as well?
As energy economists, we’ve wondered how much the top oil and gas executives earn, particularly when their companies are earning large profits. To spot the patterns, we analyzed data on the compensation of more than 900 U.S. oil and gas executives between 1992 and 2016.
What do executives do exactly?
Before getting to the evidence, it is worth considering what executives do in general, and how they get compensated.
Chief executive officers, chief financial officers and other C-level executives make important strategic decisions. If they act wisely, their companies are more likely to succeed and earn bigger profits. Oil and gas executives, for example, make critical decisions about where, when and how much to invest.
In many industries, the decisions executives make can also impact the prices their companies can charge.
For example, Apple’s ability to charge $1,000 for an iPhone X reflects in part the skills of CEO Tim Cook and other Apple executives at developing a desirable product and marketing it. But in a global commodity market like oil, executives have zero control over price. No matter how talented CEOs are, or how hard they work, they can’t single-handedly make oil prices rise.
In economic parlance, hiring an executive is a principal-agent problem. The board of directors, the principal, hires an executive, the agent, to act on its behalf. The principal wants the agent to work hard and to make good decisions, but it is hard to measure this effort. Instead, executive compensation typically includes incentives like bonuses, stock options and other forms of pay, designed to align the interests of the executive with the interests of the company.
The Nobel Prize-winning economist Bengt Holmstrom pointed out, however, that it makes no sense for executive compensation to depend on what other scholars have since called “observable luck.”
Tying compensation to luck just makes compensation more volatile, which in turn makes both companies and executives worse off. Holmstrom and others have found it easy to remove luck from compensation by, for example, basing compensation on a company’s performance relative to its competitors.
Paying for luck
Oil prices are the classic example of observable luck. We looked, in particular, at U.S. oil and gas production companies, because these are the ones most impacted by oil prices. We excluded companies engaged partially or exclusively in oil refining – including Valero Energy, Chevron and Exxon Mobil, because the impact of oil prices is less clear and direct on that line of business.
We found that a 10 percent rise in oil prices increases the market value of these oil and gas production companies by 9.9 percent – almost a 1-for-1 relationship. Perhaps in no other industry are so many companies’ fortunes driven by a single global price.
More surprising, however, we determined that executive compensation follows a similar pattern. In particular, a 10 percent rise in oil prices increases executive compensation by 2 percent.
That is, we find strong evidence of a “pay-for-luck” dynamic, with large rewards to executives who happen to be in the industry at the right time.
We found this pay-for-luck pattern to be widespread across the different individual components of compensation for the top five executives at oil and gas companies. This includes not only stocks and options, but also bonuses and long-term cash incentives.
We also noticed that this pattern is asymmetrical.
Executive compensation rises more with increasing oil prices than it falls with decreasing oil prices. This is consistent with anecdotal evidence that the criteria used for executive compensation changes over time. And that they are more quantitative during “boom” times and more qualitative during “bust” times.
In other words, U.S. oil and gas executives reap big rewards, when prices go up and they aren’t punished that much when prices fall.
Why is this happening?
Everyone in the industry understands that oil prices are highly variable and completely out of the control of individual executives. So why do executives earn more when oil prices go up?
The most likely explanation is that these CEOs and other top executives have co-opted the pay-setting process. Economists call this “rent extraction.”
That is, at least to some degree, executives are exercising influence over the board of directors – extracting compensation packages that exceed what would be expected in a competitive labor market.
And the compensation of all oil and gas executives in our sample, all told, totals almost $1 billion per year, making the money at stake substantial.
With median pay for U.S. CEOs nearly $12 million per year, executive compensation has become more complicated and important to understand than ever. Understanding pay-for-luck dynamics in the oil and gas industry can also shed light on what happens in other businesses where luck plays a less obvious, but often equally important, role.
Why Trump’s wrong about WTO treating US unfairly
September 4, 2018
Assistant Professor of Political Science, University of Arizona
Jeffrey Kucik does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
President Donald Trump recently threatened to pull the United States out of the World Trade Organization “if they don’t shape up.”
His argument is that the organization treats its single-largest investor unfairly, claiming that the U.S. loses “almost all of the lawsuits in the WTO.”
Is Trump correct that the WTO singles out the U.S.?
While international political economists such as myself recognize that the WTO’s dispute system is imperfect, there is little evidence to justify threats of withdrawal.
The case against the WTO
Critics of America’s trade deals – including its commitments in Geneva, where the WTO is based – argue that trade law disadvantages the United States.
As evidence, they point to the fact that the U.S. currently faces near-historic levels of trade litigation.
America’s partners have filed 17 complaints so far in 2018. More than half of those disputes relate to Trump’s steel and aluminum tariffs.
To put that number in perspective, 17 disputes is double the average number of annual filings over the past 15 years. The last time there were so many cases against the U.S. was back in 2002. Not coincidentally, that was when President George W. Bush’s steel policies were widely attacked.
In addition to being sued so often, Trump worries that the U.S. loses a disproportionate number of cases.
Hence, the now frequently heard claim that the United States is being unfairly punished under international trade law.
A narrow reading of the facts
The White House is right about two things.
First, it is true that the United States is sued more often than any other WTO member. Since it was set up in 1995, members have filed 150 complaints targeting U.S. policies, that’s 78 percent more than there have been against the European Union and more than triple those against China. In fact, those 150 cases account for over 25 percent of all WTO disputes.
Second, it is also true that the United States lost the vast majority of those cases. Only about half of all WTO disputes end with a formal ruling. The other half are settled or linger for years in the initial consultation stage of the dispute process. Among those with a verdict, the U.S. lost entirely or in part 87 percent of the cases against it.
At first glance, that looks like strong support for Trump’s argument. But do these two facts really mean the deck is stacked against the U.S.?
Not once we put the numbers into context.
Where Trump gets it wrong
To begin with, it’s worth considering why the U.S. gets sued in the first place.
Part of the explanation is simple: the U.S. hasn’t been shy about protecting its domestic industries, deploying a wide variety of policies to insulate them from foreign competition.
Some of these are highly controversial. For example, the U.S. is a world leader in the use of anti-dumping, a form of duty applied to foreign goods sold below normal market prices.
In order to use anti-dumping legally, countries have to demonstrate material harm to their domestic industries. Naturally, proving that dumping has occurred is open to some debate.
Hence, there have been 126 individual disputes over this policy, accounting for almost 25 percent of the WTO’s entire case load. This includes the U.S., which has been sued more than 50 times for its use of anti-dumping duties alone.
Thus, relying on controversial policies at home exposes the U.S. to trade litigation abroad.
Perhaps more importantly, Trump misrepresents America’s losing record.
Yes, the U.S. loses nearly 90 percent of panel rulings. But the fact is that every respondent almost always loses to the tune of at least a comparable 90 percent.
That’s one of the plain realities of WTO dispute settlement. If a country gets sued, and that case ends up before a panel, the respondent will likely lose. That’s true of the U.S., the EU, China or anyone else. That’s partly because litigation isn’t free. Complainants are more likely to file, and proceed to a ruling, when there’s high confidence of winning. Otherwise it isn’t worth it.
In sum, the numbers simply don’t support the argument that the U.S. is targeted without cause or that it is treated unfairly. Insistence in Washington on using contentious trade policies increases the rate of filings against the U.S. And, while the America loses a lot, it doesn’t lose any more often than the membership at large.
The escalating crisis in Geneva
None of this is to say that the system is perfect.
Legitimate grounds for disagreement have created calls for reform. Downstream compliance remains a problem across its 160-plus members. And efforts by the U.S. or others to reform the system – such as to the appeals process to reduce lengthy delays and judicial overreach – have gone nowhere.
As a result, the U.S. has blocked all appointments of appellate judges since Trump took office, reducing the total number from seven to three, which could potentially paralyze the body’s ability to work.
This is bad news for the system. The majority of panel rulings are appealed, and the process cannot function without a consensus over judge appointments.
Losing America’s seat at the table
In spite of the system’s flaws, the WTO has benefits beyond trade promotion. Having a rules-based system is also important for limiting the kind of trade discrimination the White House frequently alleges.
Yet, Trump continues to talk like the WTO is a one-way street. He seems to forget that the U.S. isn’t just the most frequent respondent. It’s also the most frequent complainant.
A political compromise over the appeals process is needed to ensure the WTO functions efficiently. But withdrawing from the agreement, and giving up America’s seat at the table, isn’t going to do much to protect U.S. interests – as we have seen in other areas of international law.