November 16, 2015

"The group hopes attacks will provoke overreactions by European governments against innocent Muslims

"Muslims in the West will quickly find themselves between one of two choices, they either apostatize .?.?. or they [emigrate] to the Islamic State and thereby escape persecution from the Crusader governments and citizens.” The group calculates that a small number of attackers can profoundly shift the way that European society views its 44 million Muslim members and, as a result, the way European Muslims view themselves. Through this provocation, it seeks to set conditions for an apocalyptic war with the West.

Unfortunately, elements of European society are reacting as the Islamic State desires. Far-right parties have gained strength in many European countries. France’s National Front is expected to dominate local elections in northern France this winter; on Saturday, Marine Le Pen, its leader, declared “those who maintain links with Islamism” to be “France’s enemies.” The Danish People’s Party gained 21 percent of the vote in national elections in June on a nationalist, anti-Islamic platform. The anti-foreigner Sweden Democrats is steadily growing in popularity."

Liberals in Europe will not give ISIS the "overreaction" it is looking for. However, if the rise of the far-right parties continues, ISIS may get what it wants. The right is quite anti-immigrant, anti-refugee and anti-Muslim. And it is growing.

November 10, 2015

Thomas Piketty: income inequality due to declines in unions and minimum wage, not globalization.

Piketty started things off by claiming that the received wisdom (at least among economists) for why inequality has increased, globalization and skill-biased technical change, simply don’t explain the phenomena very well. Neither can explain the rise of the top 1%, nor can they explain the international variation in the extent of tail inequality. Piketty did credit the role of educational exclusion in closing off access to the most elite precincts of the economy, as shown by the new Chetty, Saez, et al findings on the extent to which top universities draw their undergraduate students from rich households. But he continued on to a discussion of how the Piketty, Saez, and Stantcheva (2014) findings on wage bargaining and top income shares can’t be squared with a marginal-productivity story of wage-setting. He mentioned norms of corporate governance shifting in favor of managers and owners by way of explaining tail inequality, as well as erosion of unions and the minimum wage as explanations for stagnant or falling wages at the bottom and middle of the distribution. He closed with what I consider a profound restatement of why Capital in the 21st Century is such an important book:

The gap between [the] official discourse and what’s actually going on is enormous. The tendency is for the winner to justify inequality with meritocracy. It’s important to put these claims up for public discussion.

... Piketty’s rebuttal devastating: that progressive taxation was invented in America and that it flourished here as a complement to free and equal quality public education, not a substitute. Together, the two did not destroy capitalism. Quite the contrary: the period of their efflorescence, complete with confiscatory estate taxation, saw the highest aggregate and per-capita growth across the income distribution of any time in American history.

Piketty himself said it best: “The idea that we need to keep inequality to preserve incentives is just not consistent with reality.”

http://steinbaum.blogspot.com/2015/11/free-market-dogmatism-still-going_8.html

November 9, 2015

FDR's ITO pioneered the concept of neutral arbitration of trade disputes, much more than just

reducing tariffs. His ITO also introduced employment, labor and development standards as part of a trade agreement.

Along with the World Bank and the IMF, the International Trade Organization (ITO) formed the centrepiece of new kind of international organization in the mid to late 1940s. At the time, what was particularly novel about the Havana Charter was that it was not simply or mainly a trade organization like the WTO, its latter day descendent. At its core, the countries of the world, rejected the idea that it was possible to maintain a firewall between trade, development, employment standards and domestic policy. Its most distinctive feature was the integration of an ambitious and successful program to reduce traditional trade barriers, with a wide-angled agreement that addressed investment, employment standards, development, business monopolies and the like. It pioneered the idea that trade disputes had to be settled by consultation and mediation rather than with legal clout. Further it established an institutional linkage between trade and labour standards that would effect a major advance in global governance. Finally it embedded the full employment obligation, along with "a commitment to free markets" as the cornerstone of multilateralism.

Despite these accomplishments, the US Congress refused to ratify the Havana Charter even though it had signed it. As a direct consequence, the ITO's collapse represented a significant closure of the full employment era internationally. In the end, it's demise made possible the rapid return of the free trade canon that increasingly, would impose its authority and ideology on all international organizations and on the practice of multilateralism. As this essay concludes, its history compelling because whatever its apparent shortcomings, governments, economists and ordinary people demanded that trade, employment goals and developmental needs should reinforce each other in the world trading system.

http://www2.warwick.ac.uk/fac/soc/pais/research/researchcentres/csgr/research/workingpapers/2000/wp6200.pdf

The republican congress rejected the ITO proposed by FDR and negotiated by Truman, precisely for the national sovereignty concern about a multilateral organization making decisions that would affect the US.

The IMF and World Bank were approved by congress while it was still controlled by Democrats. The negotiation of the ITO did not end until republicans had taken control of congress. GATT was a supposed to be a temporary part of the ITO. Truman authorized it by executive order since he thought the republican congress would kill that too.

November 5, 2015

Amnesty International report shows 65,000 "forced disappearances" by Syrian government since 2011.

Since 2011 the Syrian government has carried out an orchestrated campaign of enforced disappearances. At the beginning of the crisis it arrested and forcibly disappeared large numbers of peaceful opponents of the government, including demonstrators, political activists, human rights defenders, media workers, doctors and humanitarian aid workers. As the conflict evolved, so too did the government’s strategy. It forcibly disappeared those it considered to be disloyal, such as defectors as well as government employees or soldiers who were believed to be considering defection. The government also began forcibly disappearing family members of individuals wanted by the security forces, usually in an effort to dissuade these wanted individuals from continuing their political activism or military activities.

Those who are forcibly disappeared in Syria are subjected to extreme trauma, and in some death. They are placed outside of the protection of the law – flimsy as it is in Syria – and denied access to a lawyer or a fair trial. Detainees are squeezed into overcrowded, filthy cells where disease is rampant and medical treatment unavailable. They are regularly subjected to a catalogue of torture, which may include electric shocks, whipping, suspension, burning, rape and other forms of sexual violence. They are cut off from the outside world, as their family members have no idea where they are or whether they are even still alive. Those who survive enforced disappearance carry the scars of their experience – both psychological and physical – for the rest of their lives.

Amnesty International considers that the enforced disappearances carried out since 2011 by the Syrian government were perpetrated as part of an organized attack against the civilian population that has been widespread, as well as systematic, and therefore amount to crimes against humanity.

Amnesty International’s research indicates that enforced disappearances in Syria are carried out by a range of actors: all four branches of the security forces, namely Military Intelligence, Air Force Intelligence, Political Security and General Intelligence (sometimes referred to as State Security); the armed forces; and militias associated with the Syrian government, including the National Defence Forces and the shabiha. Those subjected to enforced disappearance are held in a network of detention facilities across the country, including detention centres run by the security forces, each of which has a central branch in Damascus as well as regional, city, and local branches; civil prisons; and unofficial detention centres.

file:///Users/pampango/Downloads/MDE2425792015ENGLISH.PDF

October 26, 2015

Reich: A leader brings out the best in his followers. A demagogue brings out the worst.

A leader brings out the best in his followers. A demagogue brings out the worst. Leaders inspire tolerance. Demagogues incite hate.

Leaders empower the powerless; they give them voice and respect. Demagogues scapegoat the powerless; they use scapegoating as a means to fortify their power. Leaders calm peoples’ irrational fears. Demagogues exploit them.

Back to the current crop of Presidential candidates: Who are the leaders, and who are the demagogues? The leaders have sought to build bridges with those holding different views.

Rand Paul spoke at Berkeley, for example, seeking common ground with the university’s mostly-progressive students. Bernie Sanders traveled to Liberty University where most students and faculty disagree with his positions on gay marriage and abortion.

http://robertreich.org/post/131884484780

Almost needless to say, Reich goes on to explain how Trump and Carson fall into the demagogue category. He could have listed practically every republican candidate if he had wanted to.

October 22, 2015

Reich: The 4 Big Lies About Immigrants - and The Truth (Trump is wrong)

MYTH: Immigrants take away American jobs.

Wrong. Immigrants add to economic demand, and thereby push firms to create more jobs.

MYTH: We don’t need any more immigrants.

Baloney. The U.S. population is aging. Twenty-five years ago, each retiree in America was matched by 5 workers. Now for each retiree there are only 3 workers. Without more immigration, in 15 years the ratio will fall to 2 workers for every retiree, not nearly enough to sustain our retiree population.

MYTH: Immigrants are a drain on public budgets.

Bull. Immigrants pay taxes! The Institute on Taxation and Economic Policy released a report this year showing undocumented immigrants paid $11.8 billion in state and local taxes in 2012 and their combined nationwide state and local tax contributions would increase by $2.2 billion under comprehensive immigration reform.

MYTH: Legal and illegal immigration is increasing.

Wrong again. The net rate of illegal immigration into the U.S. is less than zero. The number of undocumented immigrants living in the U.S. has declined from 12.2 million in 2007 to 11.3 million now, according to Pew Research Center.

http://robertreich.org/post/131585289045

Reich's advice is not to let demagogues blame the problems of the middle class on immigrants (legal and illegal) when the real problem is that the game is rigged by the 1% who love having the blame shifted onto poor people.

October 22, 2015

From Japan: TPP sets limit on corporate suits

The Trans-Pacific Partnership free trade pact limits the period for foreign companies to file damages lawsuits against host states over sudden regulatory changes to 3½ years, Jiji Press learned Wednesday.

The limit, included in a TPP provision on investor-state dispute settlement, is designed to prevent abuse of litigation by multinational businesses. ISDS gives the legal basis for foreign businesses to challenge sudden changes in host country regulations.

Japan and the United States had pushed for the introduction of ISDS in an effort to help their companies go overseas. They successfully persuaded Australia and other reluctant countries by proposing the limit.

The ISDS provision allows member governments to introduce regulations about medical care and the environment at their own discretion. The provision also states that member governments will not be forced to change regulations even if they lose lawsuits from foreign businesses.

http://the-japan-news.com/news/article/0002510148

I wonder if Japan has published the full text of the TPP or how does anyone know what the ISDS rules are in the agreement? If - a big IF - "member governments will not be forced to change regulations even if they lose lawsuits from foreign businesses" - that would be a big deal.

October 21, 2015

New Pew poll: Attitudes of Canadians and Americans on XL pipeline and TPP

What Canada’s new government might mean for U.S. relations



In our most recent survey, Canadians are split: 42% favor building the pipeline, while 48% are against it. Among Liberal supporters, 45% approve of the pipeline, with a nearly identical 46% opposed. Conservative Party backers are much more enthused by the project (72% support it), while backers of the left-leaning, social-democrat New Democratic Party (22%) are least supportive.

In the U.S., there’s more public support for the Keystone pipeline, but it’s largely split along party lines. According to a November 2014 Pew Research survey, 59% of Americans support building the pipeline. But there’s greater support among Republicans (83%) than Democrats (43%).

TPP, a new trade agreement that seeks to reduce tariffs between the U.S., Canada and 10 other Asia-Pacific nations, has garnered public support in both Canada and the U.S. In Canada, six-in-ten Liberal supporters say TPP is a good thing for Canada, and seven-in-ten say this among the country’s Conservatives. Among NDP supporters, however, only 42% think the massive trade deal is a boon for Canada.

In the U.S., 49% support the trade deal. In Canada, those who back the more liberal Democratic Party are more supportive of the pact (51% say it is a good thing for the U.S.) than are those with the more conservative Republican Party (43%).

http://www.pewresearch.org/fact-tank/2015/10/20/what-canadas-new-government-might-mean-for-u-s-relations/

October 20, 2015

Treasury: China not manipulating currency

TREASURY: CHINA NOT MANIPULATING CURRENCY:

The Treasury Department has ruled this week that China’s currency is not being manipulated for unfair trade advantage despite Beijing’s devaluation of the renminbi in August.
"Since this move, the [renminbi] depreciated 2.3 percent against the dollar through September," Treasury said in the congressionally mandated semi-annual report released late Monday. "The change in the foreign exchange regime, together with the signs of the slowing growth in China, created market expectations that the RMB would depreciate further against the dollar in the short-run."

China said it made the change in its exchange rate to bring the renminbi, also called the yuan, in line with market forces. But the move caught markets by surprise and renewed calls in Congress for the Obama administration to take a tougher line against currency manipulation, both with China and in the 12-nation Trans-Pacific Partnership.

Treasury noted that the RMB has appreciated nearly 30 percent since June 2010 but emphasized that "further currency appreciation" is key to China shifting its domestic economy to a greater reliance on household consumption and less on exports and investment to fuel growth.

http://www.politico.com/tipsheets/morning-trade

The whole Treasury report is at: http://www.treasury.gov/resource-center/international/exchange-rate-policies/Documents/2015-10-19%20(FXR)_FINAL.PDF

Krugman has said essentially the same thing:


I imagine that Trump has 'noticed' the appreciation in China's currency but chooses not to mention it for political reasons.

October 20, 2015

Orrin Hatch not happy about TPP. May strip out 'fast track' and force renegotiation.

Orrin Hatch holds cards on trade deal
One of Congress' strongest trade boosters is critical of the landmark Asian-Pacific deal — and well-positioned to delay or kill it if he decides to do so.

No one fought harder to give President Barack Obama trade promotion authority to complete a landmark 12-nation deal than Senate Finance Committee Chairman Orrin Hatch. Now, no lawmaker may be more disappointed with the result — or better positioned to torpedo the deal if he chooses to oppose it.

Despite fast-track rules, though, congressional approval of the deal is far from certain. By securing language sought by Democrats — settling for far less than 12 years of monopoly protection for biologics, for instance, and barring tobacco companies from being able to sue countries for financial losses related to antismoking laws — the administration managed to tick off Republicans, among them Hatch, who accounted for the bulk of support for fast track authority.

In the case of TPP, if Hatch decides to oppose it, the White House would probably think twice about submitting it for a vote. But if the administration went forward anyway, Hatch could pursue two options to force it back to the negotiating table by stripping “fast-track” protections from the deal.

Both options are built into the TPA law. One allows both chambers to adopt a "procedural disapproval resolution" within 60 days of each other, asserting the White House did not adequately notify or consult Congress, or that the Asia-Pacific trade deal “fails to make progress in achieving the purposes, policies, priorities, and objectives” of the trade promotion law. The second option would allow either the House or the Senate to strip "fast track" procedures in that chamber only. To begin that process, the Senate Finance Committee or the House Ways and Means Committee would have to send the pact to the floor with a "negative recommendation," urging it be rejected, which would be subject to normal rules.

http://www.politico.com/story/2015/10/orrin-hatch-tpp-pacific-trade-deal-decision-214893

Several of the TPP countries have said recently they will not renegotiate the recently completed negotiations so Hatch could effectively kill it this way.