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Monday, November 12, 2018

Beyond the Caravan: Why We Must Protect Workers Covered by TPS [feedly]

Beyond the Caravan: Why We Must Protect Workers Covered by TPS
https://workingclassstudies.wordpress.com/2018/11/12/beyond-the-caravan-why-we-must-protect-workers-covered-by-tps/

In recent weeks, President Trump has been warning of an "invasion" of a caravan of 3,000 Central Americans, mostly from Honduras, heading north towards the Mexico-U.S. border. In October, these immigrants set out on a journey of more than 2500 miles to seek asylum in the United States, fleeing violence, corruption, and poverty in their home countries.  In response to thousands of families, including babies and elders,  our government has deployed more than 5000 soldiers to the border in anticipation of their arrival.

All this attention on the border means that many have forgotten what is happening to immigrants who are already here, including more than 320,000 people who are threatened by the ending of Temporary Protected Status(TPS).  Congress created TPS as part of  the Immigration Act of 1990 to provide temporary immigration relief for members of countries facing ongoing armed conflict, natural disasters, or other extraordinary and temporary conditions. TPS allows beneficiaries to receive temporary relief from deportation, an Employment Authorization Document, and the possibility to travel abroad. TPS applies to people from 10 countries, including El Salvador, Haiti, Honduras, Nepal, Nicaragua, Somalia, South Sudan, Sudan, Syria, and Yemen. Nearly three decades later, many TPS recipients have been living in the United States for many years, but they still do not have a pathway to legal permanent resident status. Some TPS recipients, like those from El Salvador, have been renewing their status for more than 15 years.

TPS recipients are not just immigrants, they are also an important part of the U.S. workforce. The Center for Migration Studies reports that 81% to 88% of TPS recipients are working, predominately in construction, restaurants and other food industries, landscaping services, child day care services, and grocery stores. They are part of the American working class and an essential part of many local communities. Despite their economic contributions, Congress has not take any action to extend TPS or to provide recipients the opportunity to become permanent residents or citizen.

For the Trump administration, the solution is to end the TPS for citizens from the Caribbean and Central American countries that have suffered natural disasters or state sponsored terrorism. In May 2018, Homeland Security Secretary Kirstjen Nielsen determined that the impact of natural disasters or political violence had lessened enough in some countries to warrant the suspension of TPS for their citizens. About 2500 Nicaraguans and 45,000 Haitians were ordered to leave by January and July 2019 respectively. In January 2018, the Trump administration cancelled protection for 200,000 Salvadorans, notifying them to depart by September 2019.

But some TPS recipients are facing deportation even sooner. For immigrants from Sudan, TPS was originally set to end November 2, but a court ruling focused on whether the end of TPS reflects racial bias on the part of the Trump administration ordered the program to remain in place for TPS recipients of Sudan, El Salvador, Haiti and Nicaragua until April 2,  2019. Once that extension expires, the President will  have the authority to terminate TPS based on the arbitrary recommendation of the State Department. If Trump continues to insist on ending TPS, hundreds of thousands of people will be required to return to countries they left years ago or face deportation.

Ending TPS will not only affect these immigrants, it will also have a devastating impact on the U.S. Most TPS recipients have been in the U.S. for many years. They have learned English, paid taxes, bought homes, made a life here. According to a report from the Center for American Progress, "A recent survey of Salvadoran and Honduran TPS holders demonstrates that they are active community members, with 29.7 percent of respondents reporting participation in a variety of organizations, including neighborhood and work associations, schools, and sports teams."

Here in DC, we have an especially large community of TPS recipients from El Salvador – about  32,000 people. According to the Executive Director of the Central American Resource Center, Abel Nunez, about 20% of construction workers in this city have TPS. This means that many projects within the city would come to a halt if they were to lose their status and thus the work permits allowing them to work legally. Along with construction workers, D.C. would lose many of its restaurant and other food industry workers, landscapers, nannies, and employees at grocery stores. While Trump touts his anti-immigration stance as defending American jobs, ending TPS would cripple the U.S. economy by deporting workers who provide some of our most basic necessities.

Ending TPS would also further destabilize Central America as countries would face an influx of 195,000 Salvadorians and 57,000 Hondurans. These countries do not have the infrastructure to provide employment to so many returnees. According to the Inter-American Dialogue report,  Central America Migration: Current Changes and Development Implications, 70% of the labor force in El Salvador and 80% in Honduras are part of the informal economy. These economies also depend on remittances – money sent to family members in Central America from TPS recipients in the U.S.  According to the report, "Remittances alone amounted to $17 billion in 2015 and represented over 50% of household income in some 3.5 million households in the region." Ending TPS will devastate Central American economies, which would in turn spur further migration out of these countries – including more people trying to enter the U.S. to find employment. If we want to stabilize Central America and reduce illegal immigration to the U.S., Congress should propose a bill that would grant a pathway for TPS recipients to remain in the country permanently.

Proposing such a bill would let Democrats show that they really stand behind immigrants. As Democrats prepare to take control of the House, I hope they will include plans to provide permanent protection for TPS Recipients on their agenda. Winning protection for TPS recipients will also create an opportunity for the immigrant rights community to advocate for other working families and make clear how immigrant workers contribute not only to the economy but also to American communities. To make this happen, we all need to get informed, to support organizations that focus on TPS, and finally make sure that Democrats in Congress don't get distracted from TPS by the Republican anti-immigrant fear campaign.

Juan L. Belman Guerrero

Juan L. Belman Guerrero is a DACA recipient who is the Program Manager at the Kalmanovitz Initiative for Labor and the Working Poor at Georgetown University. He has organized in Austin, Texas with the University Leadership Initiative and is originally from Juventino Rosas, Guanajuato, Mexico.

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Sunday, November 11, 2018

From Economic Crisis to World War III [feedly]


Moderator: This is a serious warning to contemplate, and the author is not the only one thinking it. More profound, it is a serious matter against whose catastrophic scope human mitigation efforts may seem of little weight. An accumulation of bad karma moving down the Mountainside. Does globalization have enough safety nets to break the plunging avalanche of destruction? 

From Economic Crisis to World War III
https://www.project-syndicate.org/commentary/economic-crisis-military-conflict-or-structural-reform-by-qian-liu-2018-11

From Economic Crisis to World War III

Nov 8, 2018 QIAN LIU

The response to the 2008 economic crisis has relied far too much on monetary stimulus, in the form of quantitative easing and near-zero (or even negative) interest rates, and included far too little structural reform. This means that the next crisis could come soon – and pave the way for a large-scale military conflict.

BEIJING – The next economic crisis is closer than you think. But what you should really worry about is what comes after: in the current social, political, and technological landscape, a prolonged economic crisis, combined with rising income inequality, could well escalate into a major global military conflict.



The 2008-09 global financial crisis almost bankrupted governments and caused systemic collapse. Policymakers managed to pull the global economy back from the brink, using massive monetary stimulus, including quantitative easing and near-zero (or even negative) interest rates.

But monetary stimulus is like an adrenaline shot to jump-start an arrested heart; it can revive the patient, but it does nothing to cure the disease. Treating a sick economy requires structural reforms, which can cover everything from financial and labor markets to tax systems, fertility patterns, and education policies.1

Policymakers have utterly failed to pursue such reforms, despite promising to do so. Instead, they have remained preoccupied with politics. From Italy to Germany, forming and sustaining governments now seems to take more time than actual governing. And Greece, for example, has relied on money from international creditors to keep its head (barely) above water, rather than genuinely reforming its pension system or improving its business environment.

The lack of structural reform has meant that the unprecedented excess liquidity that central banks injected into their economies was not allocated to its most efficient uses. Instead, it raised global asset prices to levels even higher than those prevailing before 2008.

In the United States, housing prices are now 8% higher than they were at the peak of the property bubble in 2006, according to the property website Zillow. The price-to-earnings (CAPE) ratio, which measures whether stock-market prices are within a reasonable range, is now higher than it was both in 2008 and at the start of the Great Depression in 1929.


If history is any guide, the consequences of this mistake could extend far beyond the economy. According to Harvard's Benjamin Friedman, prolonged periods of economic distress have been characterized also by public antipathy toward minority groups or foreign countries – attitudes that can help to fuel unrest, terrorism, or even war.As monetary tightening reveals the vulnerabilities in the real economy, the collapse of asset-price bubbles will trigger another economic crisis – one that could be even more severe than the last, because we have built up a tolerance to our strongest macroeconomic medications. A decade of regular adrenaline shots, in the form of ultra-low interest rates and unconventional monetary policies, has severely depleted their power to stabilize and stimulate the economy.

For example, during the Great Depression, US President Herbert Hoover signed the 1930 Smoot-Hawley Tariff Act, intended to protect American workers and farmers from foreign competition. In the subsequent five years, global trade shrank by two-thirds. Within a decade, World War II had begun.

To be sure, WWII, like World War I, was caused by a multitude of factors; there is no standard path to war. But there is reason to believe that high levels of inequality can play a significant role in stoking conflict.3

According to research by the economist Thomas Piketty, a spike in income inequality is often followed by a great crisis. Income inequality then declines for a while, before rising again, until a new peak – and a new disaster. Though causality has yet to be proven, given the limited number of data points, this correlation should not be taken lightly, especially with wealth and income inequality at historically high levels.

This is all the more worrying in view of the numerous other factors stoking social unrest and diplomatic tension, including technological disruption, a record-breaking migration crisis, anxiety over globalization, political polarization, and rising nationalism. All are symptoms of failed policies that could turn out to be trigger points for a future crisis.

Voters have good reason to be frustrated, but the emotionally appealing populists to whom they are increasingly giving their support are offering ill-advised solutions that will only make matters worse. For example, despite the world's unprecedented interconnectedness, multilateralism is increasingly being eschewed, as countries – most notably, Donald Trump's US – pursue unilateral, isolationist policies. Meanwhile, proxy wars are raging in Syria and Yemen.

Against this background, we must take seriously the possibility that the next economic crisis could lead to a large-scale military confrontation. By the logicof the political scientist Samuel Huntington , considering such a scenario could help us avoid it, because it would force us to take action. In this case, the key will be for policymakers to pursue the structural reforms that they have long promised, while replacing finger-pointing and antagonism with a sensible and respectful global dialogue. The alternative may well be global conflagration.


QIAN LIU

1 Commentary

Qian Liu is an economist based in China


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The Myth of China’s Forced Technology Transfer [feedly]

The Myth of China's Forced Technology Transfer
https://www.project-syndicate.org/commentary/myth-of-forced-technology-transfer-china-by-daniel-gros-2018-11

Nov 8, 2018 DANIEL GROS

One of the Trump administration's chief complaints against China is that its trade practices rely on what US authorities call "forced technology transfer." But the impact of this policy on both foreign companies and China's economy – not to mention the amount of "force" it actually entails – is vastly overestimated.

BEIJING – Even as observers in developed countries criticize US President Donald Trump's use of blunt tools such as tariffs against China, many believe that he is responding to a real problem. China, they argue, really is engaging in unfair trading practices. But is it?


One of the chief complaints against China is that it relies on what US authorities call "forced technology transfer": foreign companies seeking access to the Chinese market are required to share their intellectual property with a domestic "partner." But the word "forced" suggests a degree of coercion that does not make economic sense. American and European companies do not have to invest in China; if they choose to do so, knowing that it will require them to share their technology, it is because they still expect to earn a profit.

The technology-transfer requirement should help foreign companies secure better deals with Chinese firms, which will include the technology's value in their overall appraisal of a foreign investor's contribution to a joint venture. In exchange, the local partner and local government eager to foster growth would provide cheap land, infrastructure, tax exemptions, or loans on favorable terms.

In short, the transferred technology is priced into any foreign direct investment (FDI). This is reflected in the continued high profitability of companies with foreign investors.

It is only natural that American and European companies declare in surveys that they would be better off had they not been "forced" to transfer their technology. But these statements assume that the terms on which the initial investment was made would be the same without the technology transfer, and that is not the case.

Of course, if technology transfer were not a requirement, the most efficient investment deal in many cases would involve a licensing agreement or the payment of royalties. But that should be only a secondary consideration, because the present value of the foregone licensing fees or royalties would figure implicitly in any investment deal.

But while the costs to Western companies imposed by the technology-transfer requirement are probably being vastly overstated, so, too, are the benefits that the policy brings to China. So why do the Chinese authorities insist on linking market access to technology transfer?

China's main official argument is that, as a developing country, domestic firms are at a disadvantage vis-à-vis foreign investors, which possess advanced technologies that the local companies do not understand. But while this argument may hold water in some of the less developed countries that use it to justify restrictive FDI regimes, China's technological capabilities have exploded over the last couple of decades.

In fact, China's expenditure on research and development is now higher both as a percentage of GDP and in absolute terms than the level in Europe and many other OECD countries. With the country's capacity for indigenous R&D – not to mention technological absorption – having progressed substantially, there is little need to continue protecting Chinese "infant" industries.

It is this progress that has driven Western companies to become more vocal in their complaints about "forced" technology transfer. Previously, they were more willing to transfer their technology, based on the expectation that Chinese competitors would be unable to adapt and master it, anyway. With China now producing more graduates with bachelor's degrees in science and engineering than the US and Europe combined, that expectation is no longer tenable.

Despite rising resistance to technology transfer, however, the Chinese authorities remain reluctant to abandon their policy, probably for much the same reason the US is angry: they overestimate its impact. They fail to recognize that Western companies might be offering worse terms to Chinese partners than they would if they could keep their technology and use licensing agreements instead.

Yet these other forms of technology transfer are already becoming increasingly prevalent: recorded royalties payments from China have skyrocketed, and now amount to close to $30 billion per year. With China now second only to the US in terms of paying for foreign technology, it is clear that a large and growing share of technology transfer is not "forced."

For Trump, however, that may not be the point. What his administration is really worried about is that China is about to surpass the US and lock down technological leadership in a number of sectors considered critical for national security (on both sides of the Pacific). Yet forcing China to eliminate its technology-transfer requirements will not change this.

An end to that policy may actually be in China's best interests. The US and China account for a large share of global trade, but they do not dominate the global economy. The bilateral trade war will be won by the side that can gain the support of the neutral powers (such as Europe and Japan) by appearing more reasonable. For China, this would mean abolishing all restrictions on foreign ownership, including the requirement that technology be shared, rather than licensed.

Such a move would underscore the strength of the Chinese economy, without costing China nearly as much as its leaders or US policymakers seem to think. Perhaps more important, it would force the US either to stop its China bashing or to admit that the underlying motivation is not economics, but geopolitical rivalry.


Daniel Gros

Writing for PS since 2005 
114 Commentaries

Daniel Gros is Director of the Brussels-based Center for European Policy Studies. He has worked for the International Monetary Fund, and served as an economic adviser to the European Commission, the European Parliament, and the French prime minister and finance minister. He is the editor of Economie Internationale and International Finance.


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Saturday, November 10, 2018

The Law Versus Worker Rights [feedly]

The Law Versus Worker Rights
https://economicfront.wordpress.com/2018/11/08/the-law-versus-worker-rights/

Organizing a union is no easy task in the United States.  Although organizing a union is supposed to be a protected right, businesses regularly fire union supporters knowing that they face minimal punishment even if found guilty for their actions.  In fact, the rights of all workers, regardless of their interest in unionization, are being whittled down. Simply put, US law doesn't work for workers.

Moshe Z. Marvit, writing in the newspaper In These Times, provides a recent example of the ongoing legal attack on union rights, in this case those of unionized janitors.  As he explains, the National Labor Relations Board, using a provision of the 1947 Taft-Hartley Act designed to weaken labor solidarity:

ruled [in October 2018] that janitors in San Francisco violated the law when they picketed in front of their workplace to win higher wages, better working conditions and freedom from sexual harassment in their workplace.

The provision in question is one that prohibits workers from engaging in actions against a so-called "secondary" employer.  The provision makes it illegal for workers to organize boycotts or pickets directed against an employer with which the union does not have a dispute in order to get that firm to pressure the union's employer to settle its dispute with the union.

The NLRB's ruling dramatically stretches the meaning of this provision, in that the San Francisco janitors were actually engaged in workplace actions against an employer that had significant influence over their terms of employment.  However, Board members were able to justify their ruling thanks to the complexities generated by the increasingly common corporate strategy of subcontracting.

In this case, the janitors were employed by Ortiz Janitorial Services, which was in turn subcontracted by Preferred Building Services, to work in the building of yet a third company. An administrative law judge had previously ruled that Preferred Building Services had meaninful control over the employment terms of the janitors hired by Ortiz Janitorial Services.

More specifically, the judge found "that Preferred Building Services was involved in the hiring, firing, disciplining, supervision, direction of work, and other terms and conditions of the janitors' employment with Ortiz Janitorial Services." That made Ortiz and Preferred joint employers of the janitors, and the worker's actions legal.  Undeterred, the NLRB simply rejected the administrative law judge's ruling, declaring instead that the janitors worked only for Ortiz which made the worker's actions, which were also aimed at Preferred, illegal.

As Marvit summarizes:

The NLRB's recent case restricting the picketing rights of subcontractors, temps and other workers who do not have a single direct employment relationship is a further sign that the labor board will continue limiting its joint employer doctrine. This will make it more difficult or even impossible for many workers to have any meaningful voice in the workplace. But the case also highlights some of the core problems of labor law as it currently exists. By being included under the NLRA, workers lose basic rights that all other Americans enjoy.

Given how important the use of subcontracted labor has become, it should surprise no one that Trump's appointees to the National Labor Relations Board are actively working to tighten the standard under which workers can claim to face, and organize against, a joint employer.

But the attack on worker rights is not limited to efforts to weaken union power.  The Supreme Court, in a 5-4 vote in May, ruled in Epic Systems Corp v. Lewis, that employers can include a clause in their employment contract requiring nonunion workers to arbitrate their disputes individually, a ruling that eliminates the ability of workers to sue a company for workplace violations or use collective actions such as class action suits. The ruling resolved three separate cases–Epic Systems Corp. v. Lewis, Ernst & Young LLP v. Morris, and National Labor Relations Board v. Murphy Oil USA–that were argued together in front of the Court on the same day because they all raised the same basic issue.

Marvit explains what led to Lewis's decision to sue Epic Systems:

On April 2, 2014, Jacob Lewis, who was a technical writer for Epic Systems, received an email from his employer with a document titled "Mutual Arbitration Agreement Regarding Wages and Hours." The document stated that the employee and the employer waive their rights to go to court and instead agreed to take all wage and hour claims to arbitration. Furthermore, unlike in court, the employee agreed that any arbitration would be one-on-one. This "agreement" did not provide any opportunity to negotiate, and it had no place to sign or refuse to sign. Instead, it stated, "I understand that if I continue to work at Epic, I will be deemed to have accepted this Agreement." The workers had two choices: immediately quit or accept the agreement. . . .

When Lewis tried to take Epic Systems to court for misclassifying him and his fellow workers as independent contractors and depriving them of overtime pay, he realized that by opening the email and continuing to work, he waved his right to bring a collective action or go to court.

As the Court saw it, the case pitted the Federal Arbitration Act against the National Labor Relations Act.  The former established a legal foundation for using one-on-one arbitration to settle disputes while the latter gives workers the right to work together for "mutual aid and protection." The Court's ruling priviledged arbitration.

Jane McAlevey, writing before the Supreme Court combined the cases and decided Epic Systems Corp v. Lewis, highlights the likely anti-worker consequences of the Court's decision:

As for loud liberal voices — union and nonunion — that declare unions as a thing of the past, the forthcoming SCOTUS ruling on NLRB v Murphy Oil will prove most of the nonunion "innovations" moot. Murphy Oil is a complicated legal case that boils down to removing what are called the Section 7 protections under the National Labor Relations Act, and preventing class action lawsuits.

Murphy Oil blows a hole through the legal safeguards that non-union workers have enjoyed for decades, eviscerating much of the tactical repertoire of so-called Alt Labor, such as class-action wage-theft cases, and workers participating in protests called by nonunion community groups in front of their workplaces. The timing is horrific and uncanny: As women are finally finding their voices about sexual harassment at work, mostly in nonunion workplaces (as the majority are), Murphy Oil will prevent class action sexual harassment lawsuits.

The Epic Systems decision is a big deal, since there is a growing and already sizeable use of mandatory arbitration by employers.  A study by the Economic Policy Institute found that:

  • More than half—53.9 percent—of nonunion private-sector employers have mandatory arbitration procedures. Among companies with 1,000 or more employees, 65.1 percent have mandatory arbitration procedures.
  • Among private-sector nonunion employees, 56.2 percent are subject to mandatory employment arbitration procedures. Extrapolating to the overall workforce, this means that 60.1 million American workers no longer have access to the courts to protect their legal employment rights and instead must go to arbitration.
  • Of the employers who require mandatory arbitration, 30.1 percent also include class action waivers in their procedures—meaning that in addition to losing their right to file a lawsuit on their own behalf, employees also lose the right to address widespread rights violations through collective legal action.
  • Large employers are more likely than small employers to include class action waivers, so the share of employeesaffected is significantly higher than the share of employers engaging in this practice: of employees subject to mandatory arbitration, 41.1 percent have also waived their right to be part of a class action claim. Overall, this means that 23.1 percent of private-sector nonunion employees, or 24.7 million American workers, no longer have the right to bring a class action claim if their employment rights have been violated.
  • Mandatory arbitration is more common in low-wage workplaces. It is also more common in industries that are disproportionately composed of women workers and in industries that are disproportionately composed of African American workers.

The Court's decision means that workers without unions will have little power. The NLRB's decision weakens the laws that are supposed to protect union rights. The only effective response to this trend is, as the recent wave of teacher strikes demonstrated, militant, rank and file-led union organizing, with strong community involvement and support.  Hopefully, exposing the class-biased nature of US laws may help encourage this kind of activism.

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What the Hell Happened to Brazil? (Wonkish) [feedly]

What the Hell Happened to Brazil? (Wonkish)
https://www.nytimes.com/2018/11/09/opinion/what-the-hell-happened-to-brazil-wonkish.html

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Dean Baker: Tuesday’s Election: Racism and Anti-Semitism Versus Social Security and Medicare [feedly]

Tuesday's Election: Racism and Anti-Semitism Versus Social Security and Medicare

Dean Baker

http://cepr.net/publications/op-eds-columns/tuesday-s-election-racism-and-anti-semitism-versus-social-security-and-medicare

Dean Baker
Truthout, November 6, 2018

See article on original site

I have followed politics closely since 1968. I have seen many unpleasant political figures. I have also seen many clear dog whistles to racists, with the racism lurking just below the surface.

When Richard Nixon talked about being tough on crime, everyone knew the race of the criminals whose specter he was invoking. The same was true of Ronald Reagan with his racist stories about young Black men buying steaks with food stamps. And when George H.W. Bush ran an ad featuring Willie Horton, a convicted murderer, no one thought he was talking about prison reform.

But, these politicians felt a need to at least put a thin veneer over their appeals to racism. That is not the case with Donald Trump and today's Republicans. The racism is there for all to see, mixed in with a huge helping of anti-Semitism.

Blatant racism and anti-Semitism is on display as the election approaches with Donald Trump hyperventilating about the prospect that a few thousand people from Central America may seek asylum in the United States. But there is a long list of actions and words that tie Donald Trump and the Republican Party to racists and anti-Semites.

The list begins with Trump's efforts to ban Muslim immigrants in the first days of his administration. It includes failing to mention Jews as victims of the Holocaust. Trump also couldn't bring himself to condemn the Nazis who marched in Charlottesville, chanting "Jews will not replace us."

Trump openly encourages his audience with chants of "lock him up" in reference to George Soros, whose major "crime" is being a progressive Jew. In the last weeks the president has made up ever more absurd claims about the risks posed by a group of people (the so-called "caravan") that is coming up from Central America through Mexico and intends to seek asylum at the border.

I realize from my Twitter feed that alarmism is spreading about what it would mean for the US to absorb the asylum seekers from the caravan. A few numbers may help counter that alarmism.

I have seen all sorts of estimates of the size of this group, but let's say it is 5,000 people. That's more than any estimate I have seen. Based on past precedent, the vast majority of these people will be denied asylum, but let's say that the impossible happens and all 5,000 get asylum.

We are a country of 330 million people. Five thousand people getting asylum amounts to less than 0.002 percent of the US population. To put that in a slightly different perspective, if you had $10,000 in the bank, the asylum seekers, relative to the US population, it would be less than 16 cents out of your bank account. And, these people are excluded from most government benefits, so there is no credible story about taxes being changed in any noticeable way.

In short, the only issue here is racism. Trump and the Republicans are saying, "Don't worry about your wages, your family's access to health care, your kids' ability to go to college, we are going to keep white people safe from people emigrating from Central America."

And it's not just that Trump and the Republicans are not offering help to working people, they have made it very clear they want to make things worse. Their health care plan is all about removing the Affordable Care Act's protections for people with health issues like cancer or heart disease.

They also have made it very clear that they want to cut Social Security and Medicare. Senate Majority Leader Mitch McConnell said this explicitly last month when he argued that the large budget deficits caused by the GOP tax cut will make it necessary to cut Social Security and Medicare.

Of course, the vast majority of the benefits from the tax cut went to the rich. So, this is yet another part of the upward redistribution story we have been seeing for the last four decades.

Trump and the Republicans are trying to present themselves as a populist party, but they offer nothing but racism and bigotry to ordinary workers. This is a sharp contrast with right-wing populists in other countries whose parties combine xenophobic and racist appeals with platforms supporting public benefits like Social Security and Medicare.

In countries where right-wing populists have come to power, like Hungary, they have pursued policies that led to large gains in living standards for white workers at the middle and bottom of the income distribution, even while stoking sentiments that have increased discrimination and violence toward workers of color.

By contrast, Trump and the Republicans are looking to reduce the meager benefits that ordinary workers now have. (Our Social Security system is stingy by international standards, and the US stands out as the only wealthy country without national health care insurance.)

So, Trump really has nothing to offer to his working-class supporters in terms of improving their standard of living. All he can tell them is that Jews will not replace them.


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Dani Rodrik: Reclaiming Community


Reclaiming Community
Nov 9, 2018 DANI RODRIK


PreviousNext

No one can deny that this consumer- and market-centric vision of the economy has produced plenty of fruit. The dazzling array of consumer goods available in the megastores or Apple outlets of any major city in the world would have been unimaginable as recently as a generation ago.But clearly something has gone wrong in the meantime. The economic and social divisions within our societies have provoked a broad backlash in a wide range of settings – from the United States, Italy, and Germany in the developed world to developing countries such as the Philippines and Brazil. This political turmoil suggests that economists' priorities may not have been entirely appropriate.

Two books, one forthcoming from Raghuram Rajan and another published this month by Oren Cass, revisit our economistic worldview and argue that we should instead put the health of our local communities front and center. Stable families, good jobs, strong schools, abundant and safe public spaces, and pride in local cultures and history – these are the essential elements of prosperous societies. Neither global markets nor the nation-state can adequately supply them, and sometimes markets and states undermine them.

The authors come from different vantage points. Rajan is an economist at the University of Chicago and a former governor of the Reserve Bank of India. Cass is at the right-of-center Manhattan Institute for Policy Research and was domestic policy director for Republican Mitt Romney's presidential campaign. You would not necessarily expect either a Chicago economist or a moderate Republican to treat markets and hyper-globalization with skepticism. But both are disturbed by what they see as the effects on communities.

Rajan calls community the "third pillar" of prosperity, as important as the other two pillars – the state and market. No less than excessive centralized state power, he writes, unmanaged globalization can tear apart the fabric of local communities. Cass is explicit that US trade and immigration policy should focus on American workers first and foremost. This means ensuring that local labor markets are healthy and that there are plenty of goods jobs at decent wages. Both authors emphasize the gains from trade and reject US President Donald Trump's protectionism. But they agree we may have gone too far into hyper-globalization and paid insufficient attention to the costs for communities.


Economists' usual answer is to call for "greater labor market flexibility": workers should simply leave depressed areas and seek jobs elsewhere. But as Cass reminds us, geographical mobility has to be coupled with "the opportunity to stay." Even during times of significant migration, the bulk of local populations stayed put and needed good jobs and solid communities.When a local factory closes because a firm has decided to outsource to a supplier across the border, more is lost than the hundreds (or thousands) of jobs that move abroad. The impact is multiplied through reduced spending on local goods and services, which means workers and employers across the entire local economy feel the hit. The local government's tax revenues fall as well, so there is less money to spend on education and other public amenities. Anomie, family breakdown, opioid addiction, and other social ills often follow.

Alternatively, economists might recommend compensating the losers from economic change, through social transfers and other benefits. Leaving aside the feasibility of such transfers, it is doubtful that they are the solution. Joblessness will undermine individual and community wellbeing even if consumption levels are propped up through cash grants.

Ultimately, it is only through the creation and expansion of well-paying jobs that local communities can be made vital. Cass's proposal is to encourage employment through wage subsidies. Rajan emphasizes the role of local leaders who can mobilize community assets, generate social engagement on the part of local residents, and create a new image – all in the context of more supportive state policies and managed globalization.

Other economists have advocated regionally targeted manufacturing extension programs, fostering partnerships between local employers and universities. Yet others recommend local public spending, such as on job training programs for small and medium-sized enterprises.

We do not have a good fix on what works best, and a fair amount of policy experimentation will be needed to make progress. But the urgency of action is heightened by the fact that ongoing technological trends threaten to exacerbate communities' existing problems. New digital technologies tend to exhibit scale economies and network effects, which produce concentration rather than localization of production. Instead of diffusing gains, they create winner-take-all markets. The globalization of production networks magnifies such effects further.

How we balance these forces with the needs of communities will shape not only our economic fortunes, but also our social and political environment. As Cass and Rajan show, it is a problem that economists should no longer ignore.

DANI RODRIK


Dani Rodrik is Professor of International Political Economy at Harvard University's John F. Kennedy School of Government. He is the author of The Globalization Paradox: Democracy and the Future of the World Economy, Economics Rules: The Rights and Wrongs of the Dismal Science, and, most recently, Straight Talk on Trade: Ideas for a Sane World Economy.
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John Case
Harpers Ferry, WV
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The new Democratic House should make worker empowerment a priority [feedly]

The new Democratic House should make worker empowerment a priority
https://www.epi.org/blog/the-new-democratic-house-should-make-worker-empowerment-a-priority/

For the first time in nearly a decade, Democrats will hold the majority in the House when Congress convenes in January. The results of yesterday's election are encouraging and represent historic progress—with a record number of women winning seats in the house, including key victories by diverse candidates across faiths and ethnicities. And importantly, Democrats won the popular vote in the House by a 9.2 percent margin despite today's 3.7 percent unemployment rate, which should have provide great advantage to the incumbent party.

It is nevertheless important to note that with Republicans in control of the Senate and the White House, it is unlikely that policies that promote a just economy for working people will become law. Still, House Democrats have the opportunity to advance long overdue reforms. It is critical that they focus on an agenda that serves our nation's workers. This must include House Democrats working to raise workers' wages, restore workers' access to justice on the job, and promote workers' right to collectively bargain.

Workers deserve a fair minimum wage. At $7.25 per hour, the federal minimum wage is now more than 25 percent below where it was in real terms half a century ago. House Democrats must advance legislation to raise the federal minimum wage to $15 per hour by 2024, indexing it to the national median wage thereafter, and phasing out the tipped minimum wage and other subminimum wages. Given inflation expectations, $15 in 2024 would be around $13.00 in 2018 dollars, an appropriate level for the federal floor. The Raise the Wage Act introduced this Congress included all of these reforms. The House must work to pass similar legislation in the new Congress.

Workers should not be forced to sign away their rights as a condition of employment. The use of mandatory arbitration and collective and class action waivers—under which workers are forced to handle workplace disputes as individuals through arbitration, rather than being able to resolve these matters together in court—makes it more difficult for workers to enforce their rights. These agreements bar access to the courts for all types of employment-related claims, including those based on the Fair Labor Standards Act, Title VII of the Civil Rights Act, and the Family Medical Leave Act. This means that a worker who is not paid fairly, discriminated against, or sexually harassed, is forced into a process that overwhelmingly favors the employer—and forced to manage this process alone, even though these issues are rarely confined to one single worker. Congress must act to ban mandatory arbitration agreements and class and collective action waivers. The Restoring Justice for Workers Act introduced this Congress includes all of these reforms. The House should work to pass this important reform in the new Congress.

Workers must have strong collective bargaining rights. A recent poll found that 60 percent of adults have a favorable view of labor unions. However, as of 2017, only 10.7 percent of wage and salary workers were union members. This disconnect is the result of decades of fierce opposition to unions and collective bargaining, with employers exploiting loopholes in outdated labor law to defeat workers' organizing efforts, while corporate lobbyists have blocked attempts at reform. We know unions are a significant force for a fair economy by examining the impact of their decline since the 1970s. As unions have declined, inequality between middle- and high-wage workers has grown. Congress must work to revitalize workers' right to join a union and collectively bargain. The Workers' Freedom to Negotiate Act introduced this Congress includes many critical reforms to our nation's labor law that would help to restore collective bargaining rights and provide workers a meaningful voice in the workplace. The House should consider this legislation in the new Congress.

The current legal and political framework favors corporate interests dedicated to rolling back worker protections and advancing business practices that leave fewer and fewer workers covered by existing laws. Democratic leadership in the House has the chance to show our nation's workers that they will fight to change this rigged system and promote policies that work for our nation's workers. Legislation has already been developed that would provide important reforms. A Democratic majority in the House can and should advance an agenda that includes these legislative initiatives and use their power to ensure that our national debate involves workers' voices.


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Tuesday, November 6, 2018

Mark Thoma: Links (11/5/18) [feedly]

Mark Thoma has a host of interesting links today....too many to post separately
Enjoy, and learn. I especially liked Tim Taylor's takeon Scandinavia, the data on global convergence

Links (11/5/18)
https://economistsview.typepad.com/economistsview/2018/11/links-11518.html

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Monday, November 5, 2018

Progress Radio:The NAME IN PROGRESS Podcast -- the Birthright Chicken Show -- Nov 1, 2018

John Case has sent you a link to a blog:



Blog: Progress Radio
Post: The NAME IN PROGRESS Podcast -- the Birthright Chicken Show -- Nov 1, 2018
Link: http://progress.enlightenradio.org/2018/11/the-name-in-progress-podcast-birthright.html

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Grappling With Globalization 4.0 [feedly]

Grappling With Globalization 4.0
https://www.project-syndicate.org/commentary/globalization-4-0-by-klaus-schwab-2018-11
Grappling With Globalization 4.0

Nov 5, 2018 KLAUS SCHWAB

The world is experiencing an economic and political upheaval that will not cease any time soon. The forces of the Fourth Industrial Revolution have ushered in a new economy and a new form of globalization, both of which demand new forms of governance to safeguard the public good.

GENEVA – After World War II, the international community came together to build a shared future. Now, it must do so again. Owing to the slow and uneven recovery in the decade since the global financial crisis, a substantial part of society has become disaffected and embittered, not only with politics and politicians, but also with globalization and the entire economic system it underpins. In an era of widespread insecurity and frustration, populism has become increasingly attractive as an alternative to the status quo.

TRUMPONOMICS AND THE US MIDTERM ELECTIONS

Nov 2, 2018 PROJECT SYNDICATEinterviews ANGUS DEATON, et al.about the state of the US economy and its political implications.

6Add to Bookmarks
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But populist discourse elides – and often confounds – the substantive distinctions between two concepts: globalization and globalism. Globalization is a phenomenon driven by technology and the movement of ideas, people, and goods. Globalism is an ideology that prioritizes the neoliberal global order over national interests. Nobody can deny that we are living in a globalized world. But whether all of our policies should be "globalist" is highly debatable.

After all, this moment of crisis has raised important questions about our global-governance architecture. With more and more voters demanding to "take back control" from "global forces," the challenge is to restore sovereignty in a world that requires cooperation. Rather than closing off economies through protectionism and nationalist politics, we must forge a new social compact between citizens and their leaders, so that everyone feels secure enough at home to remain open to the world at large. Failing that, the ongoing disintegration of our social fabric could ultimately lead to the collapse of democracy.

Moreover, the challenges associated with the Fourth Industrial Revolution(4IR) are coinciding with the rapid emergence of ecological constraints, the advent of an increasingly multipolar international order, and rising inequality. These integrated developments are ushering in a new era of globalization. Whether it will improve the human condition will depend on whether corporate, local, national, and international governance can adapt in time.

Meanwhile, a new framework for global public-private cooperation has been taking shape. Public-private cooperation is about harnessing the private sector and open markets to drive economic growth for the public good, with environmental sustainability and social inclusiveness always in mind. But to determine the public good, we first must identify the root causes of inequality.

For example, while open markets and increased competition certainly produce winners and losers in the international arena, they may be having an even more pronounced effect on inequality at the national level. Moreover, the growing divide between the precariat and the privileged is being reinforced by 4IR business models, which often derive rents from owning capital or intellectual property.

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Closing that divide requires us to recognize that we are living in a new type of innovation-driven economy, and that new global norms, standards, policies, and conventions are needed to safeguard the public trust. The new economy has already disrupted and recombined countless industries, and dislocated millions of workers. It is dematerializing production, by increasing the knowledge intensity of value creation. It is heightening competition within domestic product, capital, and labor markets, as well as among countries adopting different trade and investment strategies. And it is fueling distrust, particularly of technology companies and their stewardship of our data.

The unprecedented pace of technological change means that our systems of health, transportation, communication, production, distribution, and energy – just to name a few – will be completely transformed. Managing that change will require not just new frameworks for national and multinational cooperation, but also a new model of education, complete with targeted programs for teaching workers new skills. With advances in robotics and artificial intelligence in the context of aging societies, we will have to move from a narrative of production and consumption toward one of sharing and caring.

Globalization 4.0 has only just begun, but we are already vastly underprepared for it. Clinging to an outdated mindset and tinkering with our existing processes and institutions will not do. Rather, we need to redesign them from the ground up, so that we can capitalize on the new opportunities that await us, while avoiding the kind of disruptions that we are witnessing today.

As we develop a new approach to the new economy, we must remember that we are not playing a zero-sum game. This is not a matter of free trade or protectionism, technology or jobs, immigration or protecting citizens, and growth or equality. Those are all false dichotomies, which we can avoid by developing policies that favor "and" over "or," allowing all sets of interests to be pursued in parallel.

To be sure, pessimists will argue that political conditions are standing in the way of a productive global dialogue about Globalization 4.0 and the new economy. But realists will use the current moment to explore the gaps in the present system, and to identify the requirements for a future approach. And optimists will hold out hope that future-oriented stakeholders will create a community of shared interest and, ultimately, shared purpose.

The changes that are underway today are not isolated to a particular country, industry, or issue. They are universal, and thus require a global response. Failing to adopt a new cooperative approach would be a tragedy for humankind. To draft a blueprint for a shared global-governance architecture, we must avoid becoming mired in the current moment of crisis management.

Specifically, this task will require two things of the international community: wider engagement and heightened imagination. The engagement of all stakeholders in sustained dialogue will be crucial, as will the imagination to think systemically, and beyond one's own short-term institutional and national considerations.

These will be the two organizing principles of the World Economic Forum's upcoming Annual Meeting in Davos-Klosters, which will convene under the theme of "Globalization 4.0: Shaping a New Architecture in the Age of the Fourth Industrial Revolution". Ready or not, a new world is upon us.


KLAUS SCHWAB

Writing for PS since 2013
15 Commentaries

Klaus Schwab is Founder and Executive Chairman of the World Economic Forum.


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When History Rhymes [feedly]

The IMF defense against (Fascist) Nationalism

When History Rhymes
https://blogs.imf.org/2018/11/05/when-history-rhymes/

By Christine Lagarde

November 5, 2018

The graves of soldiers who died in World War I, near Verdun, France: on the 100th anniversary of the end of the Great War, leaders should listen closely to the echoes of history (photo: Mathieu Pattier/SIPA/Newscom)

Mark Twain once said that "History never repeats itself, but it does often rhyme." As heads of state gather in Paris this week to mark 100 years since the end of World War I, they should listen closely to the echoes of history and avoid replaying the discordant notes of the past.

For centuries, our global economic fortunes have been shaped by the twin forces of technological advancement and global integration. These forces have the prospect to drive prosperity across nations. But if mismanaged, they also have the potential to provoke calamity. World War I is a searing example of everything going wrong.  

The 50 years leading up the to the Great War were a period of remarkable technological advances such as steamships, locomotion, electrification, and telecommunications. It was this period that shaped the contours of our modern world. It was also a period of previously unprecedented global integration—what many refer to as the first era of globalization, where goods, money, and people could move across borders with relatively minimal impediments. Between 1870 and 1913 we saw large gains in exports as a share of GDP in many economies—a sign of increasing openness.  

All of this created great wealth. But it was not distributed evenly or fairly. This was the era of the dark and dangerous factories and the robber barons. It was an era of massively rising inequality. In 1910 in the United Kingdom the top 1% controlled nearly 70% of the nation's wealth—a disparity never reached before or after.

Today, we can find striking similarities with the period before the Great War.

Then, as now, rising inequality and the uneven gains from technological change and globalization contributed to a backlash. In the run-up to the war countries responded by scrambling for national advantage, forsaking the idea of mutual cooperation in favor of zero-sum dominance. The result was catastrophe—the full weight of modern technology deployed toward carnage and destruction.

And in 1918, when leaders surveyed the corpse-laden poppy fields, they failed to draw the correct lessons. They again put short-term advantage over long-term prosperity—retreating from trade, trying to recreate the gold standard, and eschewing the mechanisms of peaceful cooperation. As John Maynard Keynes—one of the IMF's founding fathers—wrote in response to the Versailles Treaty, the insistence on imposing financial ruin on Germany would eventually lead to disaster. He was entirely correct.

It took the horrors of another war for world leaders to find more durable solutions to our shared problems. The United Nations, the World Bank, and of course the institution I now lead, the IMF, are a proud part of this legacy.

And the system created after World War II was always meant to be able to adapt. From the move to flexible exchange rates in the 1970s to the creation of the World Trade Organization, our predecessors recognized that global cooperation must evolve to survive.

Today, we can find striking similarities with the period before the Great War—dizzying technological advances, deepening global integration, and growing prosperity, which has lifted vast numbers out of poverty, but unfortunately has also left many behind. Safety nets are better now and have helped, but in some places we are once again seeing rising anger and frustration combined with a backlash against globalization. And once again, we need to adapt.

That is why I have recently been calling for a new multilateralism,  one that is more inclusive, more people-centered, and more accountable. This new multilateralism must reinvigorate the previous spirit of cooperation while also addressing a broader spectrum of challenges—from financial integration and fintech to the cost of corruption and climate change.

Our recent research on the macroeconomic benefits of empowering women and modernizing the global trading system provides new ideas on ways to create a better system.

Each of us—every leader and every citizen—has a responsibility to contribute to this rebuilding.

After all, what was true in 1918 is still true today: The peaceful coexistence of nations and the economic prospects of millions depends squarely on our ability to discover the rhymes within our shared history.

Related Links:
New Economic Landscape, New Multilateralism
Steering the World Toward More Cooperation, Not Less

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DeLong: Blame the Economists? [feedly]

Blame the Economists?
https://www.project-syndicate.org/commentary/economists-and-the-financial-crisis-by-j--bradford-delong-2018-11

DeLong is skilled in both theory and policy -- you won't agree with some of his line, but he is always worth a listen...


Blame the Economists?

Nov 1, 2018 

Ever since the 2008 financial crash and subsequent recession, economists have been pilloried for failing to foresee the crisis, and for not convincing policymakers of what needed to be done to address it. But the upheavals of the past decade were more a product of historical contingency than technocratic failure.

BERKELEY – Now that we are witnessing what looks like the historic decline of the West, it is worth asking what role economists might have played in the disasters of the past decade.

trump speaks rally

TRUMPONOMICS AND THE US MIDTERM ELECTIONS

Nov 2, 2018 interviews about the state of the US economy and its political implications.

6Add to Bookmarks

From the end of World War II until 2007, Western political leaders at least acted as if they were interested in achieving full employment, price stability, an acceptably fair distribution of income and wealth, and an open international order in which all countries would benefit from trade and finance. True, these goals were always in tension, such that we sometimes put growth incentives before income equality, and openness before the interests of specific workers or industries. Nevertheless, the general thrust of policymaking was toward all four objectives.

Then came 2008, when everything changed. The goal of full employment dropped off Western leaders' radar, even though there was neither a threat of inflation nor additional benefits to be gained from increased openness. Likewise, the goal of creating an international order that serves everyone was summarily abandoned. Both objectives were sacrificed in the interest of restoring the fortunes of the super-rich, perhaps with a distant hope that the wealth would "trickle down" someday.

At the macro level, the story of the post-2008 decade is almost always understood as a failure of economic analysis and communication. We economists supposedly failed to convey to politicians and bureaucrats what needed to be done, because we hadn't analyzed the situation fully and properly in real time.

Some economists, like Carmen M. Reinhart and Kenneth Rogoff of Harvard University, saw the dangers of the financial crisis, but greatly exaggerated the risks of public spending to boost employment in its aftermath. Others, like me, understood that expansionary monetary policies would not be enough; but, because we had looked at global imbalances the wrong way, we missed the principal source of risk – US financial mis-regulation.

Still others, like then-US Federal Reserve Chairman Ben Bernanke, understood the importance of keeping interest rates low, but overestimated the effectiveness of additional monetary-policy tools such as quantitative easing. The moral of the story is that if only we economists had spoken up sooner, been more convincing on the issues where we were right, and recognized where we were wrong, the situation today would be considerably better.


Specifically, in the years before the crisis, financial deregulation and tax cuts for the rich had been driving government deficits and debt ever higher, while further increasing inequality. Making matters worse, George W. Bush's administration decided to wage an ill-advised war against Iraq, effectively squandering America's credibility to lead the North Atlantic through the crisis years.The Columbia University historian Adam Tooze has little use for this narrative. In his new history of the post-2007 era, Crashed: How a Decade of Financial Crises Changed the World, he shows that the economic history of the past ten years has been driven more by deep historical currents than by technocrats' errors of analysis and communication.

It was also during this time that the Republican Party began to suffer a nervous breakdown. As if Bush's lack of qualifications and former Vice President Dick Cheney's war-mongering weren't bad enough, the party doubled down on its cynicism. In 2008, Republicans rallied behind the late Senator John McCain's running mate, Sarah Palin, a folksy demagogue who was even less suited for office than Bush or Cheney; and in 2010, the party was essentially hijacked by the populist Tea Party.

After the 2008 crash and the so-called Great Recession, years of tepid growth laid the groundwork for a political upheaval in 2016. While Republicans embraced a brutish, race-baiting reality-TV star, many Democrats swooned for a self-declared socialist senator with scarcely any legislative achievements to his name. "This denouement," Tooze writes, "might have seemed a little cartoonish," as if life was imitating the art of the HBO series "Veep."

Of course, we have yet to mention a key figure. Between the financial crisis of 2008 and the political crisis of 2016 came the presidency of Barack Obama. In 2004, when he was still a rising star in the Senate, Obama had warned that failing to build a "purple America" that supports the working and middle classes would lead to nativism and political breakdown.

Yet, after the crash, the Obama administration had little stomach for the medicine that former President Franklin D. Roosevelt had prescribed to address problems of such magnitude. "The country needs…bold persistent experimentation," Roosevelt said in 1932, at the height of the Great Depression. "It is common sense to take a method and try it; if it fails, admit it frankly and try another. But above all, try something."

The fact that Obama failed to take aggressive action, despite having recognized the need for it beforehand, is a testament to Tooze's central argument. Professional economists could not convince those in power of what needed to be done, because those in power were operating in a context of political breakdown and lost American credibility. With policymaking having been subjected to the malign influence of a rising plutocracy, economists calling for "bold persistent experimentation" were swimming against the tide – even though well-founded economic theories justified precisely that course of action.

Still, I do not find Tooze's arguments to be as strong as he thinks they are. We economists and our theories did make a big difference. With the exception of Greece, advanced economies experienced nothing like a rerun of the Great Depression, which was a very real possibility at the height of the crisis. Had we been smarter, more articulate, and less divided and distracted by red herrings, we might have made a bigger difference. But that doesn't mean we made no difference at all.


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