Los Angeles Times - 02.08.2019

L ATIMES.COM/BUSINESS FRIDAY, AUGUST 2, 2019C3

Stocks slumped Thurs-
day and bond prices soared
after President Trump sur-
prised markets with a new
10% tariff on $300 billion
worth of goods from China
beginning next month.
The news erased a broad
rally on Wall Street, leading
to the market’s fourth
straight loss. Bond prices
surged, sending yields
sharply lower, as investors
sought safety.
The price of U.S. crude oil
skidded nearly 8%, its big-
gest drop in more than four
years and a signal that in-
vestors fear the economy
could slow down.
Investors were taken off
guard by the tariff an-
nouncement because the
White House had said a day
earlier that Beijing had
promised to buy more farm
goods. That came just as the
latest round of trade talks
were ending.
Companies that rely
heavily on doing business
with China took the brunt of
the selling Thursday. Elec-
tronics retailer Best Buy
went from a slight gain to a
drop of 10.8% in heavy trad-
ing. Apple went from a gain
of 1.4% to a loss of 2.2%.
The Standard & Poor’s
500 index dropped 26.82
points, or 0.9%, to 2,953.56.
The index has fallen for four
straight days since setting
an all-time high Friday.
The Dow Jones industrial
average fell 280.85 points, or
1%, to 26,583.42.
The Nasdaq composite
lost 64.30 points, or 0.8%, or
8,111.12.
The new tariff would take
effect Sept. 1. The U.S. has al-
ready applied tariffs of 25%

on $250 billion worth of

goods from China. Beijing

has retaliated with tariffs on

$110 billion in American

goods, including agricultur-

al products, in a direct shot

at Trump supporters in the

U.S. farm belt.

Unlike the earlier set of

tariffs, which were meant to

minimize the effect on ordi-

nary Americans by targeting

industrial goods, the new

ones would affect a wide

range of consumer products.

Banks, industrials and

consumer discretionary

were among the hardest-hit

sectors Thursday. Bank of

America dropped 3.9%, Boe-

ing slid 2% and Gap tumbled

7.9%.

The price of benchmark

U.S. crude oil fell $4.63 to

$53.95 a barrel. Brent crude

oil, the international stand-

ard, sank $4.55 to $60.50 a

barrel. Energy stocks also

fell sharply; Exxon Mobil

dropped 2.6%.

Prices for U.S. govern-

ment bonds rose sharply,

sending yields lower.

The yield on the 10-year

Treasury fell to 1.90%, the

lowest level since the 2016

election. That yield, a bench-

mark used to set interest

rates on mortgages and

other loans, has been declin-

ing steadily since November,

when it traded as high as

3.23%. The yield on the two-

year Treasury note slid

sharply, to 1.73% from 1.87%

late Wednesday.

Gold fell $5.20 to $1,420.90

an ounce, silver fell 23 cents

to $16.12 an ounce and cop-

per was unchanged at $2.66 a

pound.

The dollar fell to 107.33

Japanese yen from 108.77 yen

Wednesday. The euro

strengthened to $1.1082 from

$1.1085.

Index

Dow industrials

S&P 500

Nasdaq composite

S&P 400

Russell 2000

EuroStoxx 50

Nikkei(Japan)

Hang Seng(Hong Kong)

Close

Daily

change

Daily % YTD %

26,583.42 -280.85 -1.05 +13.96

2,953.56 -26.82 -0.90 +17.82

8,111.12 -64.30 -0.79 +22.24

1,933.48 -33.24 -1.69 +16.26

1,550.76 -23.85 -1.51 +14.99

3,191.82 +10.53 +0.33 +15.64

21,540.99 +19.46 +0.09 +7.63

27,565.70 -212.05 -0.76 +6.77

Major stock indexes

change change

Source: AP

MARKET ROUNDUP

Trump tariff tweet

erases broad rally

associated press

For political
junkies, the
spectacle of
members of
a single
party
punching
out one
another is
irresistible,
especially when the topic is
something like healthcare
and its infinite variables.
That may be why the Demo-
cratic Party debates got as
much of an audience as they
did.
But what got lost in the
exchanges over what ver-
sion of universal healthcare
any candidate favored is
that the policy’s real ene-
mies have spent months
building their war chests
and testing their attack
themes. Their chief target is
“Medicare for all,” because
that’s the chief threat to
profits of health insurers,
drug companies, hospitals
and the medical establish-
ment.
Those special interests
already have come together
as an outfit calling itself the
Partnership for America’s
Health Care Future, and if
you believe this “partner-
ship” has Americans’ inter-
ests at heart as opposed to
their own, I have a snake oil
cure to sell you.
The Partnership has
made common cause, at
least ideologically, with
another front group for
vested interests. That’s One
Nation America, which is an
offspring of Karl Rove’s
Crossroads GPS dark mon-
ey spending organization.
(The two entities have
shared a Virginia address
and leadership.)
During Tuesday’s Demo-
cratic debate, Sen. Bernie
Sanders (I-Vt.) warned that
“the healthcare industry
will be advertising tonight
on this program” in opposi-
tion to his Medicare-for-all
proposal. Such ads may not
have aired during the de-
bate itself, but they cer-
tainly did during the run-up

to the broadcast, and on

other television broadcasts

during the debate.

The commercials pro-

duced by the Partnership

and One Nation share cer-

tain features in their attacks

on Medicare for all. They

employ misleading or de-

bunked assertions and

figures. They exploit public

fears about healthcare

reform without proposing

anything useful themselves.

And they’re very glossy. In

brief, they use the playbook

written for the infamous

“Harry and Louise” televi-

sion commercials deployed

against Clinton adminis-

tration proposals for reform

in the 1990s.

This predictable strate-

gy takes advantage of re-

formers’ inclination to hash

out every detail of their

proposals in public and

fight over every disagree-

ment among them, no mat-

ter how trivial. That process

only provides grist for

vested interests, which can

be depended on to cherry-

pick details that are hardest

for laypersons to under-

stand and paint them as

threats to their well-being.

Drew Altman, president

of the Kaiser Family Foun-

dation, sounded the alarm

about this methodology in a

Washington Post op-ed

Thursday, in which he

warned Democrats against

indulging in “plan-itis.”

“We’re way too focused

on the details of candidates’

policy plans, and it’s not

serving the voters’ needs

well,” Altman wrote. “It’s

not really a huge contrib-

ution to voters for debate

moderators to find el-

ements of the candidate’s

plans they can nail them

on.” He noted that “no plan

proposed today will become

law in any recognizable

form” because all will be

subject to compromise.

That’s why the best idea

the Democrats have is to

invoke Medicare in their

proposals. Medicare is

America’s most successful

and popular public health

program. It’s a convenient

shorthand for universal

healthcare and single-payer

healthcare, terms that don’t

come as slippily off the

tongue and don’t pack the

emotional power of Medi-

care for all.

Americans see Medicare

as a promise fulfilled — one

of the rare fulfilled promises

in our political history. What

matters right now is the

promise of universal cov-

erage, not the details of how

we get there.

The most dangerous

political enemy of health-

care reform isn’t disagree-

ment among the Demo-

crats, but the Republican

establishment. Reformers

should never let Americans

forget during the next 15

months that the GOP is

moving heaven and earth to

destroy coverage for mil-

lions of Americans. The

Trump administration is

calling on a federal appeals

court to declare the Afford-

able Care Act unconstitu-

tional. Republicans in state-

houses across the country

continue to resist expand-

ing Medicaid for their con-

stituents, despite clear

evidence that expansion

saves lives.

The danger, however, is

that conservatives and the

healthcare lobby will take

the lead in defining Medi-

care for all in a way that

makes it seem sinister.

That’s the goal that’s visible

in the attack ads already

appearing on your TV

screens and your web

browsers.

Let’s start with an ad put

up by One Nation America,

the Rove group. The ad

features a series of un-

happy-looking ordinary

people holding up placards

naming common medical

treatments and the osten-

sible delays in obtaining

them.

“How long will you wait

for care?” a mournful voice-

over intones. “In other coun-

tries with socialized health-

care, patients wait weeks,

even months, for treat-

ment.”

A legend flashed briefly

on the screen gives the game

away; it cites the Fraser

Institute for its figures.

What you may not know is

that the Fraser Institute is a

right-wing pressure group

that has been fighting

against Canada’s single-

payer system for years. The

figures on screen are not

about “countries with so-

cialized healthcare,” but

Canada alone, and they’ve

been widely criticized as

exaggerated.

This argument is quint-

essential cherry-picking. It’s

true that Canadians wait

longer than Americans for

some treatments, but it’s

also true that residents of

the Netherlands, Switzer-

land, Britain, France and

Germany have shorter waits

than Americans.

More to the point, far

fewer residents of those

other countries have had to

forgo treatment because of

cost. According to the Com-

monwealth Fund, 30% of

Canadians have reported

“cost-related access prob-

lems.” In Britain, which has

a full-blown government

single-payer program, the

figure is 8%. In the U.S., it’s

43%.

And no one should have

to be reminded that pre-

scription costs are so out of

control in the U.S. that

caravans of patients travel

over the border to obtain

drugs such as insulin in

Canada, for massive dis-

counts.

The Partnership’s ad

campaign hauls out the

familiar shibboleths against

healthcare reform. Its em-

blematic commercial fea-

tures actors portraying a

suburban mom, a construc-

tion worker and young

professionals bemoaning

the prospect of being con-

fined in a “one-size-fits-all”

government health plan

that would only bring

“higher taxes, higher premi-

ums and lower-quality

care.”

Yet Sanders’ Medicare

for all would eliminate pre-

miums and provide services

such as dental and vision

care that are now unattain-

able for millions of Ameri-

cans even under the Afford-

able Care Act. His proposal

would levy new taxes on the

wealthy and the middle

class, in exchange for elimi-

nating premiums, deduct-

ibles and co-pays. The Medi-

care-for-all plan proposed

by Sen. Kamala Harris

(D-Calif.) would tax princi-

pally the wealthy.

“Politicians and bureau-

crats in control of our

healthcare?” an actor in the

ad asks skeptically. One

wonders who the average

American thinks is in con-

trol of our healthcare now.

It’s politicians and bureau-

crats — conservative Re-

publicans who want to

overturn the Affordable

Care Act and replace it with

a social Darwinism that

would leave millions at risk,

and bureaucrats at health

insurance companies and

price-setters at pharmaceu-

tical companies whose aim

is to collect as much in prof-

its as they can — from their

ordinary American custom-

ers.

The sponsors of the

Partnership campaign

include America’s Health

Insurance Plans (the insur-

ance lobby), the American

Hospital Assn. (the hospital

lobby), the International

Franchise Assn. (the fast-

food industry lobby) and the

Pharmaceutical Research

and Manufacturers of

America (the drugmakers’

lobby).

Should you really believe,

as their commercials un-

spool on your television set,

that they really care about

you?

Me neither.

Knives are out for universal healthcare

MICHAEL HILTZIK

APROTESTERholds a banner about Britain’s National Health Service at a demonstration against President

Trump in central London on the second day of his three-day state visit to the United Kingdom in June.

Isabel InfantesAFP/Getty Images

When General Motors

Co. brought back the

Chevrolet Blazerlast year,

the revival conjured up im-

ages of the rugged 4x4 SUV

from decades past. But GM

workers were nostalgic for a

different reason: The old

full-size model was last built

in a now-shuttered plant in

Janesville, Wis.

Much to the chagrin of

the United Auto Workers

union, GM decided to build

the revitalized Blazer at a

plant in Ramos Arizpe,

Mexico, a move announced

five months before the com-

pany put four U.S. factories

on notice that they’re at risk

of being closed. Ever since

then, the union has treated

the vehicle as a pariah and

symbol of long-festering

grudges against the au-

tomaker’s off-shoring strat-

egy.

To the union, “the Blazer

is emblematic of everything

that is wrong with the

world,” said Kristin Dziczek,

vice president of industry, la-

bor and economics at the

Center for Automotive Re-

search in Ann Arbor, Mich.

Although the Blazer has

so far avoided the wrath of

President Trump and his

Democratic challengers for

the White House, the same

can’t be said of GM’s layoffs

of American workers. The

dismissals have become a

lightning rod for politicians

of all stripes and earned the

company an unfortunate

call-out during the first

night of debates in the com-

pany’s hometown.

When asked about GM’s

job cuts during the Demo-

cratic debate Tuesday,

South Bend, Ind., Mayor

Pete Buttigieg said that gov-

ernment needs to take a role

in retraining workers who

lose their jobs. “It’s why we

actually need to put the in-

terests of workers first,” he

said. “Of course we need to

do retraining. But this is so

much bigger than a trade

fight. This is about a mo-

ment when the economy is

changing before our eyes.”

GM’s labor relations were

not a focal point Wednesday,

when the remaining major

candidates for the Demo-

cratic presidential nomina-

tion faced off for the second

night of debate in Detroit,

across town from GM’s

headquarters. Michigan and

neighboring Wisconsin are

both key swing states that

traditionally vote for Demo-

crats in presidential elec-

tionsbut opted for Trump in

2016.

The decision to build the

Blazer in Mexico and the

preparation work to assem-

ble it started several years

ago, when GM’s Lordstown,

Ohio, factory was cranking

out Chevy Cruze compact

cars during three shifts, said

Jim Cain, a spokesman for

the automaker. Sales then

slumped, and the company

ceased productionthis year.

GM had manufacturing

space for the Blazer in

Ramos Arizpe because the

company moved a Cadillac

SUV from that plant to an-

other in Tennessee, said

Cain, who notes the Chevy

SUV uses $500 million a year

in U.S. parts.

The Blazer and the fate of

unionized workers also are

contentious issues in

negotiations this summer

between GM and the UAW

for a new four-year labor

agreement. The talks were

preceded by a kerfuffle over

the Blazer this spring.

In March, GM hoisted a

Blazer atop General Motors

Fountain beyond the center-

field wall at Comerica Park,

home of the Detroit Tigers

baseball team. When union

workers found out, they at-

tacked it as a snub to the city,

raging about what they con-

sidered to be a brazen indig-

nity on Detroit talk-radio

stations and social media.

The automaker took

down the Blazer before

opening day and replaced it

with a Chevy Traverse,

which is built in Lansing,

Mich. “Did GM not know

this would be a stick in the

eye to workers who go to the

games?” Dziczek asked rhe-

torically.

The union hasn’t let GM

forget that apparent slight.

Dan Morgan, chairman of

UAW Local 1112 in Lord-

stown, which faces closure,

tweeted Tuesday that the

Blazer is “over-priced Mexi-

can junk! That’s why it’s not

above the Tigers stadium.”

The new SUV has be-

come a focus of anger for

workers who risk losing their

job if they refuse relocation

to another GM plant. Re-

gina Duley is one of about 100

workers remaining at a GM

transmission plant in War-

ren, Mich., who face their

last week at work before

their factory is idled.

“I would not buy that

product,” Duley, a 21-year

plant veteran, said of the

Blazer during a news confer-

ence at the Local 909 union

hall across the street from

the Warren plant. “How

could I buy that when they

build it in Mexico and we

have people without jobs

here?”

Welch writes for Bloomberg.

Blazer becomes a punching bag

Autoworkers are upset

GM is building the

SUV in Mexico plant.

By David Welch

AGENERAL MOTORSworker displays her version

of GM, which she calls “Greedy Motors,” in Toronto.

Steve RussellToronto Star