December 14, 2012

Jonathan Kay: The key to Canada’s economic advantage over the United States? Less income inequality.

Americans would be well-served by looking to Canada for lessons on taming income inequality. As FDR showed the world in the ’30s, sometimes it takes a socialist to save capitalism from itself.

As I’ve argued before, a good way to describe the Canadian economic approach might be “hardheaded socialism,” the term Stephen Marche coined on Bloomberg.com back in July. But many conservatives are allergic to the s-word. So instead, it might be marketed, for American consumption, as the Northern New Deal — an especially apt term, given that the other nations that embrace its policies are Scandinavian nations such as Sweden.

The good news, here in Canada, is that we have so far avoided the massive upsurge in income inequality that has afflicted the United States. As a new TD Economics report indicates, median household income (not average, but median — the difference obviously is important in this context) has been higher in Canada than in the United States since 2006, and income inequality in this country has been flat since the late ’90s. The top 1% of Canadian earners take home about 13% of all income, roughly the same level it was 15 years ago. Household income growth was solid from 1998-2010 across every single income quintile.

What’s the reason for this? According to TD, it’s “rebounding government transfers, rising minimum wages in Canada (up by more than 50% on average nationwide since the late 1990s), and a respectable pace of job creation within several lower-wage areas of the service sector.” TD might have also added a few other factors — such as our well-regulated banking sector, which completely avoided a sub-prime crisis that destroyed $11-trillion in household wealth, and a universal health-care system that ensures working-class families don’t have to hold a yard sale to pay for dialysis or chemotherapy.

December 12, 2012

...what will be the pillars of the Obama administration’s economic policy toward China?

Romney lost, and it was Romney supporters who were most supportive of the next president confronting China. Nearly two-thirds of Republicans backed getting tougher with Beijing, up 11 percentage points in just a year. Democrats, on the other hand, prioritized building stronger economic relations with China (53%) over getting tougher with China (39%). Democrats’ backing for confrontation was up 6 points since 2011, but it remained the minority sentiment among those in Obama’s party.

Likely components of the administration's economic policy towards China

The first will likely be more complaints about Chinese subsidies and trade practices filed with the WTO, given the president’s campaign promises and his record during his first term. Washington has been relatively successful with such cases in the past, and pursuing multilateral dispute settlements has the added advantage of avoiding a direct bilateral confrontation with China.

The second will be the pursuit of trade agreements that notably do not include China. The most important of these is the Trans-Pacific Partnership (TPP), a free trade agreement among a growing list of nations bordering the Pacific. It is the Obama administration’s avowed aim to construct a TPP with standards so high — especially rules regarding behavior by state-owned enterprises — that China could never join without transforming its economic system. This stance in part reflects the fact that two-thirds (67%) of the U.S. public believe China practices unfair trade, according to a 2012 survey by the Chicago Council on Global Affairs.

The likely 2013 launch of a U.S.-European Union free trade negotiation — effectively a Trans-Atlantic Partnership, a bookend for the TPP — primarily reflects majority (58%) sentiment in the United States that increased trade with Europe would be a good thing for the United States. But it can also be seen as an attempt to establish U.S.-European, rather than Chinese, technical and regulatory standards as global business norms.

The Obama administration is unlikely to label China a currency manipulator, which is something Mitt Romney promised he would do on his first day in office. In Obama’s first term, the White House had multiple opportunities to do so and declined, even though the renminbi was weaker against the dollar than it is now.

http://www.pewglobal.org/2012/12/10/u-s-china-economic-relations-in-the-wake-of-the-u-s-election/

This is the first article I have read that discussed the significance of the current TPP and US-EU trade negotiations in the context of our trade issues with China. Neither include China and both seem to be designed to marginalize - to the extent possible - China's emergence as an economic power by forcing it to change the way it does business in order to compete in the world economy.

December 12, 2012

US-EU Free Trade Pact: Trading Foes Considering Largest Free Trade Deal In The World

After years of battling each other on trade issues, U.S. and European officials are contemplating a dramatic change in direction: joining together in what could be the world's largest free trade pact in an attempt to boost their struggling economies.

Discussions are in the most preliminary of stages and there would be significant obstacles to overcome, including sharp differences on agriculture, food safety and climate change legislation. Still, top EU and U.S. officials have said they want to see it happen. And America's main labor group, often the biggest opponent of U.S. trade pacts, says it wouldn't stand in the way.

Labor unions have opposed previous U.S. free trade deals with developing countries, arguing that American workers would be at a competitive disadvantage because inferior environmental and labor standards in those countries allow for lower wages. But the giant U.S. labor umbrella organization, the AFL-CIO, says it wouldn't have those concerns in a deal with the EU, arguing that European social welfare and environmental standards exceed those in the U.S.

Negotiators would face a host of tricky issues that have previously led to trans-Atlantic trade spats. The two sides currently are fighting over the EU's carbon trading scheme that could penalize airlines not meeting EU standards. There are also substantial disagreements over intellectual property enforcement and food safety issues. More broadly, agricultural issues, including EU restrictions on the use of genetically modified foods and pesticides, are likely to challenge negotiators.

http://www.huffingtonpost.com/2012/12/11/us-eu-free-trade-pact_n_2276387.html

The negotiations between the US and EU should be interesting. Frankly I hope the EU prevails on most subjects, particularly carbon trading and environmental issues, food safety, gmo foods and pesticides, labor rights and financial market taxes and regulations.

December 9, 2012

Krugman: Rise of robots and the reshoring” of manufacturing to the United States

Catherine Rampell and Nick Wingfield write about the growing evidence for “reshoring” of manufacturing to the United States. They cite several reasons: rising wages in Asia; lower energy costs here; higher transportation costs. In a followup piece, however, Rampell cites another factor: robots.

The most valuable part of each computer, a motherboard loaded with microprocessors and memory, is already largely made with robots, according to my colleague Quentin Hardy. People do things like fitting in batteries and snapping on screens.

As more robots are built, largely by other robots, “assembly can be done here as well as anywhere else,” said Rob Enderle, an analyst based in San Jose, Calif., who has been following the computer electronics industry for a quarter-century. “That will replace most of the workers, though you will need a few people to manage the robots.”

Robots mean that labor costs don’t matter much, so you might as well locate in advanced countries with large markets and good infrastructure (which may soon not include us, but that’s another issue). On the other hand, it’s not good news for workers!

http://krugman.blogs.nytimes.com/2012/12/08/rise-of-the-robots/

Increasing automation in manufacturing seems to be the main reason that manufacturing employment is declining in all countries even while manufacturing output continues to increase.

November 23, 2012

FDR "became more and more convinced that America’s security was tied to the security of the rest of

the world. As such, it was not enough for the United States to rely solely on the strength of its armed forces to provide for the nation’s safety; we also had to concern ourselves with the political, social, and economic health of other regions of the world since, as FDR put it in 1944, “true individual freedom cannot exist without economic security and independence”…and “people who are hungry and out of a job are the stuff of which dictatorships are made.”'

It was this basic idea that inspired not only the Four Freedoms, but also the many institutions and practices that were put in place during and after the war to foster international cooperation and a more prosperous, healthy, and peaceful world. Many of these institutions and practices—like the United Nations, International Monetary Fund, World Bank, and multilateral trading regime—are with us still, so that much of the world we live in today is the world shaped by the vision of Franklin Roosevelt.

His eloquent speech in Burma may indicate that he has decided to pursue a more progressive foreign policy agenda in his second term, one based on the recognition that the best means to keep America safe in the long term is to ensure that the hopes and aspirations of people the world over to enjoy freedom of speech and expression, freedom of worship, freedom from want, and freedom from fear stand not, as Roosevelt said, as some “vision of a distant millennium,” but as “a definite basis for a kind of world attainable in our own time and generation.”'

November 19, 2012

By the numbers: Just how welcoming is the U.S. to immigrants?

Ever wonder how the United States ranks in immigrant-friendliness? When you set the rhetoric aside and simply look at the numbers of people admitted, it appears at first glance to be the most welcoming nation in the world - until you compare that welcome based on immigrants as a percentage of its population.

Based on international migration statistics from the Organisation for Economic Co-operation and Development, the United States ranks first on a list of 25 nations for admitting the most immigrants on an annual basis, roughly a million a year. Its rank drops impressively, though - to number 22 on the list - when you calculate this inflow as a percentage of the population. That list is topped by Luxembourg, followed by Switzerland.

And when you look at immigrants in general as a percentage of the population, the U.S. ranks 12th, below countries like Canada, Israel, Australia and New Zealand, as well as several European nations. What to conclude from all this? From the piece:

There are two important lessons from this data. First, when you consider the size of our population, we are not the most immigrant friendly country in the world. Australia, Switzerland, Canada, and other wealthy countries do a far better job than we do by more appropriate measures. This also suggests that we are not doomed to become a poor country if we move to higher rates of immigration.

Are immigrant populations like this untenable in the U.S.? The data does not suggest this is the case. Immigrants make up over 20% of the population in New York, California, and New Jersey. These states also happen to rank 3rd, 10th, and 16th by median income.

Instead of 1 million immigrants a year, these numbers suggest we could be letting in as many as 3 million a year and we would still not rank in the top 5.

http://www.scpr.org/blogs/multiamerican/2012/11/19/11150/numbers-just-how-welcoming-us-immigrants/

November 15, 2012

Europe's youth more 'European' than their parents, poll says

Young people are more likely to consider themselves "European" and to be engaged with the bloc's politics, according to an analysis released on Wednesday (14 November) by survey-group Eurobarometer.

Forty-six percent of 15-24 year olds described themselves as European in addition to their nationality and tended to have a more positive view of the EU than their parents and grandparents.

Professionals and students were more likely to have a positive view of the EU with 65 percent of 'managers' regarding their country's EU membership as 'a good thing' compared with 47 percent among blue-collar workers and 42 percent of the unemployed.

The single currency also emerges as the most identified single element of European identity, particularly in those countries most hit by the effects of the eurozone debt crisis.

http://euobserver.com/news/118209

I hope it augers well for peace and prosperity in Europe that young folks are more supportive of an interconnected continent with a shared identity than their parents and grandparents have.

November 8, 2012

Phyllis Schlafly is still out there - now ranting against UN treaties and globalists.

Beware of the Lame-Duck Session

The globalists have been plotting to use the volatility of this lame-duck session to achieve some of their internationalist goals that they couldn't get passed during the last four years. In particular, they would like to lock us into treaties that slice out various parts of our national sovereignty, a concept that they have been trying to promote as obsolete. ... The globalists could make a surprise treaty push for ratification of the United Nations Arms Trade Treaty (UNATT). This treaty is coming under the radar since gun control advocates know it could never pass the U.S. Senate after debate in broad daylight.

Another plan to ratify an anti-sovereignty treaty and subject us to unwelcome global regulations is the Convention on the Rights of Persons with Disabilities (CRPD). This mischievous document was signed for the U.S. by U.N. Ambassador Susan Rice (now famous for giving big TV time to Obama's lies about the Benghazi disaster).

The globalists desperately want us to ratify the Law of the Sea Treaty (LOST), which was a bad idea when Ronald Reagan rejected it in 1981, and which has soured rather than ripened in its years of languishing in the Senate. This treaty cedes sovereign control over practically all the riches at the bottom of the world's oceans to an International Seabed Authority.

After ratification, treaties become part of the "supreme law" of the United States on a par with federal statutes, which gives supremacist judges the power to invent their own interpretations. The whole concept of putting the United States in the noose of global organizations, in which the U.S. has only the same one vote as Cuba, is offensive to Americans, and all these UN treaties should be scrapped forthwith.

http://www.gopusa.com/commentary/2012/11/06/schlafly-beware-of-the-lame-duck-session/

Schlafly must have read: "Six most paranoid fears for Obama’s second term"

With the election only days away, the radical right is bracing for what it believes could be an Obamapocalpyse

One Thousand Years of Darkness - “socialism or something much worse”

An Obama Dictatorship - unleash a“dictatorial full monty”; instant citizenship for all Third World immigrants; forced equalization of income; the end of fossil fuel production
Obama Will Take Away Our Gun Rights - Obama’s first term was nothing but a “conspiracy to ensure re-election by lulling gun owners to sleep.”
U.S. Will Be Enslaved by Globalists - make the U.S. a “vassal state to a globalist entity.”
U.N. Troops and Civil War - “Obama’s going to send in U.N. troops”
Hunted Down Like Dogs - “If re-elected, it’s gonna be war”; “We will be hunted down like dogs.”

http://www.salon.com/2012/11/04/six_most_paranoid_fears_for_obamas_second_term/

October 25, 2012

CBC: The Arab Spring vs. the history of democracy in the West

A little patience, please, for the Arab Spring

If there was one thing Barack Obama and Mitt Romney agreed on in their foreign policy debate on Monday it was that the Arab Spring has raised a great deal of hope for the cause of world democracy. Where they differed, though, was that while Obama saw the situation as the glass of democracy filling up, Romney saw it as leaking fast. What both Obama and Romney were trying to deal with was the sense of disappointment within the U.S. electorate — and shared throughout much of the West — with the rising chaos in some of the new democracies of the Middle East compounded by the murderousness of the civil war in Syria.

The closest thing to an answer may be found not by looking at Russia, Libya or the new Muslim Brotherhood government in Egypt, but by taking a look back at the history of Western democracies. They didn't exactly grow up overnight.

Take the French Revolution in 1789. With the overthrow of the Bourbon monarchy, freedom beckoned. But political squabbling quickly put an end to democracy and it was overtaken by the Reign of Terror in which tens of thousands were executed, usually by having their heads chopped off. Altogether, since the Revolution, the French have had two emperors, three kings and five republics. France is now a great democracy. But getting there was neither quick nor easy.

So, yes, you Arab Spring watchers, democracies do take time to develop. ... They will not have democracy tomorrow. It may take many years. But it won't take centuries as it has in the past. The trumpets of freedom from cyberspace are simply too strong to be stilled.

http://www.cbc.ca/news/world/story/2012/10/24/f-vp-schlesinger.html

Of course there are big differences from the halting development of democracy in the West over the centuries. Back then sporadic and partial progress in human rights and democratic government were "cutting edge" with little to compare them to.

Also now the world is more connected. We can watch and, at least partially, understand day-to-day developments in other parts of the world. And what happens far away can affect our everyday lives very quickly in ways to an extent that was inconceivable centuries ago.

October 22, 2012

Pew releases new foreign policy poll just in time for the debate

As next week’s third and final presidential debate on foreign policy approaches, a national survey by the Pew Research Center finds increasing public pessimism about developments in the Middle East and more support for tough policies to deal with Iran’s nuclear program and economic issues with China. However, there is no change in the consensus in support for ending U.S. military involvement in Afghanistan.



Wide majorities of Republicans (68%) and independents (60%) do not anticipate lasting improvements for the people living in these countries. Democrats are more divided: 37% say they will lead to lasting improvements, 45% say they will not. ... Nearly half (49%) of Republicans say changes in the Middle East will end up being bad for the United States, while the plurality view among Democrats (48%) is that the effect for the U.S. will be minimal.



Nearly half of independents (47%) now say it is more important to get tougher with China on economic issues, up from just 30% in March 2011. The percentage of Republicans favoring a tougher stance has increased by 11 points (from 54% to 65%) over this period. There has been less change in opinions among Democrats, and more Democrats continue to prioritize building stronger economic relations with China (53%) over getting tough with China (39%).



There are wide partisan and ideological differences in priorities for dealing with Iran. Fully 84% of conservative Republicans favor taking a firm stand against Iran’s nuclear program. Fewer than half as many liberal Democrats (38%) agree. There also is a sizable age gap in these opinions. Just 44% of those younger than 30 favor taking a strong stand against Iran; clear majorities in older age categories support a firm stance.

http://www.people-press.org/2012/10/18/on-eve-of-foreign-debate-growing-pessimism-about-arab-spring-aftermath/

Always interesting to see where there is agreement and disagreement between republicans and Democrats on foreign policy particularly with the debate coming up tonight.