My Absence

I'm writing this post—with the help of my son Thuy—to explain my absence in this space. Early in October I suffered a fall, and as the result I spent 20 days in the intensive care unit at George Washington University Hospital. The doctors and nurses there are first-class professionals, and I am fortunate to have such good care. For the past few weeks, I've been working hard in my recovery to regain my strength, with the help of many therapists (speech, physical, occupational and nutritionists). I miss writing, and I have many ideas that I hope to share with you in the near future. Thank you for your support and happy holidays. Please keep up the good fight. Read more!

Distinguishing your right to property

So you support the right to property. Fine. But there are two kinds of right to property. Though often confused, they are so distinctly different that they are in conflict with each other.

-- One is the fundamental right of every human being to own property. (See article 17 of the Universal Declaration of Human Rights)

-- The other is the unrestricted right asserted by property owners to exploit their property to the detriment of others.

President Obama announced on September 20 that the U.S. government is joining a global effort seeking to ensure that the vast riches of the world’s extractive industries are not limited to property owners alone. Named the Extractive Industries Transparency Initiative (EITI), it a coalition of governments, civil society, and companies

About 3,500,000,000 people live in countries rich in oil, gas, and minerals – natural resources that can, under good governance, generate large revenues to foster economic growth and reduce poverty. “However,” as EITI points out, “when transparency and accountability is low, such resource revenue may result in poverty, corruption, and conflict.”

EITI has a set of 21 requirements that a government must meet to achieve EITI Compliant status. A board and international secretariat administer the standard for companies to publish what they pay and for governments to disclose what they receive. So far 29 countries have met that transparency standard. Norway was the first OECD country to do so.

The EITI Website explains:

“Transparency alone will not guarantee sound management of extractive resources but is very likely to lead to greater benefits for the people and more efficient management of the sector. The challenges for North Africa and the Middle East and other resource rich countries are immense, but the EITI is a good place to start – focusing on the industries and the revenues that could be harnessed to transform these societies.” Read more!

Tracking down the slaves who work for you

Our world has about 27,000,000 million slaves – men, women, and children -- who are forced to work without compensation in the vast production and distribution chain upon which ordinary consumers are inevitably dependent for everyday products. That is the conclusion reached by a U.S. State Department–funded project announced on September 23.

The project reveals the extent of the link: slave labor is used, for example, to mine mica, the mineral used to provide sparkle in cosmetics, and coltan, a component in electronics, and to make products like soccer balls from China and cotton from Uzbekistan.

Besides, through a newly launched Website, slaveryfootprint.org,the project encourages corporations to investigate their wide-ranging supply chains -- their contractors and subcontractors -- for use of slave labor.

The initiative was announced at a New York City news conference by Ambassador at Large CdeBaca of State’s Office to Monitor and Combat Trafficking in Persons. More details can be found on Facebook at http://www.facebook.com/madeinafreeworld/.
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How U.S. China policy is tilted against American workers

What will it take for the U.S. government to reform its unbalanced China policy?

A new study by the Economic Policy Institute (EPI) lays down the hard facts on a trade relationship with China that is by far the most unbalanced in the world. For example:

 Between 2001 and 2010, the outsized trade deficit with China cost at least 2,800,000 U.S. jobs, 1,900,000 them in manufacturing.
 Included in that total for all sectors were 453,100 jobs lost or displaced from 2008 to 2010 alone.
 World trade in advanced technology products – once hailed as a source of comparative advantage for America – is now dominated by China. Hardest hit are the computer and electronic parts industry.
 China’s entry into the World Trade Organization in 2001 tilted the economic playing field further in favor of multinational companies, which “have enjoyed record profits on their foreign direct investments.”

The impact on American workers is not limited to lost opportunities to get jobs. Competition with China has also driven down wage levels of employed workers, especially in manufacturing. All workers with less than a four-year college degree are the most adversely affected.

The report, written by EPI’s Robert E. Scott, attributes the rapidly growing trade deficit largely to China’s manipulation of its currency in a way that effectively subsidizes China’s exports, “making U.S. goods less competitive in that country and in every country where U.S exports compete with Chinese exports.

In his last two paragraphs Scott evaluates the U.S.-China relationship:

“Is America’s loss China’s gain? The answer is not clearly affirmative. China has become dependent on the U.S. consumer market for employment generation, suppressed the purchasing power of its own middle class with a weak currency, and, most important, now holds over $3 trillion in hard currency reserves instead of investing them in public goods that could benefit Chinese households. Its vast purchases of foreign exchange reserves have stimulated the overheating of its domestic economy, and inflation in China has accelerated rapidly in the past year. Its repression of labor rights has suppressed wages, thereby artificially subsidizing exports.

“The U.S-China trade relationship needs a fundamental change. Addressing the exchange rate policies and labor standards issues in the Chinese economy are important first steps.”

Read more!

Time to halt this madness before it’s too late

A small group of people have pulled a fast one. They have manipulated the legislative process to entangle a small group of people in an impossible situation where any decision they make is bound to be disastrous.

Where in the constitution does it empower a small group of people to choose economic suicide for the United States of America? Read more!

Trust in policymaking role of banks and other financial institutions not merited, says UN agency

Given their “irresponsible behavior” in the economic crisis, banks and other private financials institutions do not inspire trust in the role they still have in shaping the recovery. So says an intergovernmental agency, the UN Conference on Trade and Development (UNCTAD), in its report on “Post-Crisis Challenges in the World Economy,” released September 6.

“Little has been learned about placing too much confidence in the judgment of financial market participants, including rating agencies, concerning the macroeconomic situation and the appropriateness of macroeconomic policies,” the annual UNCTAD report states.

“In light of the irresponsible failure of many private market actors in the run-up to the crisis, and costly government intervention to prevent the collapse of the financial system, it is surprising that a large section of public opinion, and many policymakers, are once again putting their trust in those same institutions to judge what constitutes correct macroeconomic management and sound public finance.”

The report emphasizes the importance of wage growth to recovery, since wage income is the main driver of domestic demand in both developed and emergent market economies. “However, in most developed countries, the chances of wage growth…are slim.” Declining wages dampen the private spending needed for recovery.

The thrust of the report is that, in the current crisis, the focus on cutting budgets and debt is counterproductive.

A new Census Bureau report underlines the urgency of the situation. More Americans are now living in poverty than at any time since records began to be kept 50 years ago. As a Financial Times news story put it:

“The aftermath of the recession has been a ‘two-speed’ recovery for Americans, as the wealthiest maintain their spending habits and lifestyles while a record number of their fellow citizens are mired in poverty.”

UPDATE

The Director-General of the International Labour Organization, Mr. Juan Somavia, said the time has come to “place the real economy in the driver’s seat of the global economy, with a financial system at its service”.

“This means putting productive investment in the real economy at the heart of policymaking; an enabling environment for sustainable enterprises; and less availability of unproductive and risky financial products”, Mr. Somavia told members of the European Parliament during an address in Strasbourg. Read more!

'Balanced' is the keyword for coping with economic storm

There we were, my wife and I, driving through a furious rainstorm, on the periphery of Hurricane Irene. About 15 minutes from home, when traffic slowed to a crawl, I began worrying without speaking. Would a breakdown of our sump pump, which failed in a storm three years ago, again flood the basement?

Further down Route 7, police cars blocked us from the flooded road ahead, and waved us into a detour. Soon the worry about a flooded basement faded into: do we have enough gas to make it home? After another restless half hour, we thankfully reached a familiar crossroads. Soon we were home, bedraggled but safe, and sump pump working as it was meant to.

Many millions, all along the East coast, weren’t so lucky. Within our own county, hundreds had to be evacuated from their homes. Swift-moving waters swept four people to their deaths, including a 12-year old boy. Rescuers had to pluck dozens from their stranded cars.

While the East coast was suffering a drastic surplus of water, most of the Southern region was enduring a devastating shortage. In Texas, the hardest hit, the combination of drought and wild fires has so far cost farmers and ranchers $5,200,000,000 in losses; raging fires have destroyed more than 1,500 homes. Five other Southern states were also affected by what one expert called the driest, hottest summer on record in the area since 1895.

Learning from Two Parallel Crises

I’ve long considered the extremes in the nation’s weather as offering a metaphorical lesson for its extremes in income. Both kinds of extremes have corresponding losses in lives and property.

For extremes in weather -- long spells of dry heat in one region, devastating floods in another -- the consequences are widespread and visible, but solutions lie largely beyond human reach. For extremes in the disparities between rich and poor, the consequences are less visible but even more widespread. The great difference between the two types is that solutions to gross disparities in income and wealth are within human reach, but only if enough people recognize the perils and have the will to take effective concerted action.

For positive results in dealing with the economic crisis, the keyword is “balance,” a quality lacking in the deficit debate and in its mindless outcome. The Congressional supercommission will fail in its mandate if it proceeds without a vision that the results must be balanced.

Economist Benjamin M. Friedman, for one, understands what that means, using a synonym for balanced: “broadly based.” As he writes in his book, “The Moral Consequences of Economic Growth”:

“Economic progress needs to be broadly based if it is to foster social and political progress. That progress requires the positive experience of a sufficiently broad cross section of a country’s population to shape the country’s mood and direction.”

But that requirement, he points out, has not been met for more than a quarter century. “Except for a brief period in the late 1990s, most of the fruits of the last three decades of economic growth in the United States have accrued to only a small slice of the population….After allowing for higher prices, the average worker in American business in 2004 made 16 percent less each week than thirty-plus years earlier. For most Americans, the reward for work today is well below what it used to be.”

These days the average pay for work – when it is available -- remains more or less stagnated at the 2004 level. Meanwhile, according to numerous reports, corporate executive pay has continued to grow. CEO pay, according to AFL-CIO studies, has grown to 343 times the median pay of workers, by far the largest gap in the world.

“Only with sustained economic growth, and the sense of confident progress that follows from the advance in living standards for most of its citizens, can even a great nation find the energy, the wherewithal, and most importantly the human attitudes that together sustain an open, tolerant and democratic society.” – Benjamin M. Friedman, in the last sentence of his book. Read more!

Where Art meets work and the rights of workers

Rare are artists who feature work and workers. Judy Taylor of Maine is one of the rarities. I have just today become aware of her and a mural of hers that the governor of Maine banned from the walls of the state’s department of labor.

As a non-credentialed art critic, I find the mural on her website,
http://judytaylorstudio.com/pubart1.html
so awesome that I can hardly type this report. I could not reach her immediately to get permission to reprint her copyrighted work.

But, while the original 11-panel mural is now packed up and hidden at an undisclosed location, nearly full-size reproductions are on display until September 20 at the VisArts Kaplan Gallery in Rockville, Md. In publicizing the event, titled “Celebrate Labor: Where Art and Politics Meet,” the gallery’s Website, at http://www.visartsatrockville.org/index.php/upcoming-shows?task=view_event&event_id=14, prints three of her panels portraying “the secret ballot,” “the first Labor’s Day,” and “the Woods Worker.”

Each of the 11 panels is an allegory for a struggle or an achievement in the history of the worker, especially in Maine. Panel 8, for example, depicts a pregnant woman receiving advice from Francis Perkins, a Maine icon who was the first U.S. cabinet member.

Taylor, commissioned to do the mural for $60,000, finished it in 2008, two years before a Republican, Paul LePage, became governor, and found the mural offensive. Ironically, his ban has awarded it national publicity. Belatedly, I featured the news on my Facebook page, and will display more of the panels as soon as I get permission to do so. Read more!

Exploring human rights and global economy

The New School for Social Research will hold a conference on Human Rights and the Global Economy November 9 and 10 in New York City. The wide range of subjects to be discussed include trade and intellectual property; the dimensions of human trafficking; responsibilities that flow from benefitting from global injustice; climate change and global justice; and human rights obligations of corporations.

“This public conference will engage both speakers in conversation about human rights,” says Arien Mack, professor of psychology at the New School, who is founder and director of the Social Research conference series.

For information about the conference, consult the web page at
http://newschool.edu/cps/human-rights-global-economy/ Read more!

'The Chinese Invasion'

 Almost every American-themed trinket sold in the Smithsonian Institute is made in China.
 San Francisco is importing its new bay bridge from China.
 New York City awarded Chinese state-subsidized firms contracts to renovate the city’s subway system, refurbish the Alexander Hamilton Bridge over the Harlem River, and build a new Metro-North train platform near Yankee Stadium.

David Sirota, in an op-ed published in Truthout September 2, cited that spate of “mind-blowing” recent news headlines as evidence of “the Chinese invasion.” To that list, he added a reminder that the Martin Luther King monument in Washington was designed by a Chinese sculptor and assembled by low-wage Chinese workers.

Imagine the contradiction: a memorial for a civil rights leader who deplored “starvation wages” and died supporting a sanitation union’s strike is built by non-union serfs from China! The Chinese invasion, Sirota wrote, is caused by an America “no longer willing or able to invest in its own future.”

He attributed this shocking situation largely to our “golden age of big-money politics,” in which multinational corporations are “buying off our lawmakers.” But you can’t buy what’s already been sold.

Our China policy reflects the way most of our leaders really think, based on what they learned in the best universities about the sanctity of free markets. President Obama’s embrace of free trade and free investment agreements is consistent with what he imbibed at Harvard and Chicago.

That line of thinking has penetrated even some union leaders. At the June International Labor Conference in Geneva, a representative of the All-China Federation of Federation of Trade Unions (ACFTU), a component of China’s state/Party power structure, was elected to the governing body of the ILO, thanks to a decision of a divided Workers’ Group.

The International Union of Food and Hotel Workers (IUF) statement on that development was headed: “ACFTU representing workers’ interests….—that cannot be serious!” Read more!

Jobless crisis: its catastrophic impact on the whole country

Persistent high unemployment in the United States is having a “catastrophic” long-term impact on the entire country. In other words, the negative impact is not limited to workers who are currently unemployed (14,000,000 men and women), but is also affecting the rest of the population, even those with jobs.

The grim facts about the nation’s job crisis are detailed in a new briefing paper, “Sustained, High Joblessness Causes Lasting Damage to Wages, Benefits, Income, and Wealth,” just released by the Economic Policy Institute.

Current discussion of unemployment and the need for job creation “vastly understate both the damage done…and the extent of the population affected,” say the authors of the paper, Lawrence Mishel and Heidi Shierholz.

They debunk the claim that the problem is just “structural” – that employers can’t find the workers with the skills needed in the current economy. “It is not that this country is lacking the right workers; it is lacking work,” they write, and supply the supporting data illustrating “a profound lack of demand for workers, not that employers can’t find the people they need.”

Among the evidence they present on the pain of the crisis:

 The share of children with an unemployed or underemployed parent has doubled in three years – from 6,400,000 in 2007 to 13,000,000 in 2010).
 The monthly jobless rate puts one month’s unemployed workers in the foreground. In the background are the unemployed the other months. For the workforce overall, almost one in three workers were unemployed or underemployed at some point in 2009.
 For more than a year, the share of the unemployed who have been without a job for over six months has hovered around 45%.
 All education categories – college-educated workers included – have seen their unemployment rates roughly double over the last four years.
 Forecasters do not expect export growth sufficient enough to substantially reduce unemployment in the next few years. The Congressional Budget Office expects the unemployment rate to be over 8% well into 2014.

In their concluding paragraphs, Mishel and Shierholz briefly supplement their factual analysis with judgments. The persistence of high unemployment, they write, “is unacceptable in a modern, developed economy, and the means to address it are no mystery: stimulate demand which will create jobs.”

They list the programs that Congress could adopt to rejuvenate the labor market. Some of them are: repair and upgrade the nation’s 100,000 public school buildings; additional spending on transportation infrastructure, and fiscal relief to the states.
But they recognize a huge obstacle: the debt ceiling agreement of August 2011, which “all but rules out deficit-financed stimulus of an appropriate magnitude.” Renegotiate or repeal it, they advise.

“All of these policies,” they write in their final paragraph, “are in our power to accomplish as the world’s largest economy. We can make the choice to pursue them and deflate the high unemployment that will otherwise scar the country and its workers for a generation.”

Will we make the right choice? I fear that we won’t, and one reason is the negative role of some powerful Catholics in Congress. A new campaign has the potential to become a movement that could bring people’s attitudes and actions more in line with Catholic principles. See my blog posting of September 1 on the St. Francis Pledge to Care for God’s Creation.

For information about this campaign, see the Website of the Catholic Climate Covenant at http://catholicclimatecovenant.org/.
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St. Francis Pledge to care for God's creation

A nation-wide initiative is under way to rally Catholic support behind two causes – protecting the environment and protecting the poor and vulnerable.

The first step in that direction – “your first step” – is to “take the St. Francis Pledge,” says an announcement of the campaign. The pledge is to

• PRAY and reflect on the duty to care for God’s Creation and protect the poor and vulnerable.

• LEARN about and educate others on the causes and moral dimensions of climate change.

• ASSESS how we-as individuals and in our families, parishes and other affiliations-contribute to climate change by our own energy use, consumption, waste, etc.

• ACT to change our choices and behaviors to reduce the ways we contribute to climate change.

• ADVOCATE for Catholic principles and priorities in climate change discussions and decisions, especially as they impact those who are poor and vulnerable.

Pledges are being made in four categories: individual/family, parish, school, and organization.

I first learned of the campaign in a September 1 email attaching “Notes for Neighbors” from a department of the U.S. Catholic Bishops Conference. The note about the pledge explained:

“This October 4, celebrate the Feast of St. Francis by taking the St. Francis Pledge! Please encourage families, parishes, schools, and others in your diocese to take the pledge. The Catholic Coalition on Climate Change has developed new tools to assist parishes, schools, individuals, and organizations in caring for creation and learning more about Church teaching on climate change as articulated by Pope Benedict XVI and the U.S. Catholic Bishops and as embodied in the life and witness of St. Francis of Assisi.”


Read more!

Trade pact to be negotiated, and opposed, during Labor Day week

Government officials from at least nine Pacific Rim counties will gather in Chicago September 6-15 to pump some life into negotiations for a new Trans-Pacific Partnership (TPP) free trade agreement. On September 5, Labor Day, unions and other critics of the agreement will hold a rally in Chicago’s Grant Park, near the downtown hotels housing the visiting delegations.

Frustrated by a stalemate in the World Trade Organization, the Bush administration almost a decade ago started concentrating on bilateral and regional channels to seek its objectives. So far, success has proved just as elusive, even with the support of the new Obama administration.

Widespread public opposition to FTAs of any kind prompted President Obama’s trade representative, Ambassador Ron Kirk, to launch an unprecedented 50-state “outreach” in 2010 to sell TPP. According to a November 2010 Pew Research Center poll, now only 35% of Americans believe that free trade agreements benefit the United States.

TPPFTA negotiations began in earnest on March 15 last year with the governments of eight countries -- Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore, and Vietnam, yes, Vietnam – on board with the U.S.

On March 14, Richard L. Trumka, president of the AFL-CIO, and the presidents of the Australia, New Zealand, and Singapore labor movements, issued a joint declaration on how the TPPFTA fails to meet the standards for a fair agreement. The shortcomings they cited were chiefly in the areas of transparency, worker rights, investment, environment, procurement, intellectual property, and consumer protection.

In a memo for reporters on August 26, the Citizens Trade Campaign summarized its case against TPPFTA. “With high U.S. unemployment,” it stated, “pressure builds for a fair deal or no deal.” (http://www.citizenstrade.org)

The American Enterprise Institute, like other business organizations, strongly favors the agreement, to the point of considering it a possible model for all 21st century trade pacts. (http://www.aci.org)

No one expects negotiations to be concluded by its deadline of November this year. The issues are so complex, and bound to become more so as other Rim nations join the current nine, that it doesn’t not seem possible – or desirable – for TPPFTA to be wrapped up even by November 2012. If ever. Read more!

China’s secret deals strip African people of their country’s natural wealth

“Buccaneers are cutting themselves a large slice of Africa’s resource cake,” says Global Witness, a private watchdog agency that has exposed a series of scandals involving China and corrupt African leaders.

In its own follow-up investigations, Economist magazine in its August 13 edition ran an unusually long article with the subtitle: “China’s oil trade with China is dominated by an opaque syndicate. Ordinary Africans appear to do badly out of its hugely lucrative deals.”

Because of the volume of oil Angola sold to China over the years at rigged, non-market prices, the profit to China’s secret syndicate could amount to tens of billions of dollars, according to the Economist. Moreover, the syndicate promised to build cross-country highways, low-cost housing, hydroelectric plants, and other forms of infrastructure, but has delivered little.

Another dimension of the scandals is that the syndicate’s cash props up certain regimes and thereby fuels violent conflict. In Guinea, for example, the syndicate came to the rescue of the cash-strapped rulers after government officials massacred 150 protesters in a stadium and raped scores of women. A month later, the syndicate transferred $100,000,000 to the country as part of a minerals deal.

Model for Plunder

“Rather than fixing Africa’s lack of infrastructure, Chinese entrepreneurs and Africa’s governing elite look as if they are conspiring to use the development model as a pretext for plunder,” the Economist concluded.

Global Witness has individual reports on eight African countries in which the syndicate has one-sided deals for current and future wealth: Angola, Cote d’Ivoire, Democratic Republic of Congo, Equatorial Guinea, Liberia, Madagascar, Republic of Congo, Sudan, and Zimbabwe.

Global Witness conceived and co-launched Publish What You Pay (PWYP) campaign with more than 300 member groups seeking to promote greater transparency in the oil, gas, and mining industries. “A concerted coordinated response is urgently required that cuts across the political, institutional, and industry spheres,” says Global Witness. A key problem is the secrecy provided by U.S. shell companies that stash the syndicate's (and other) ill-gotten gains in American banks.

In the last Congress, two Senators – Levin, a Democrat from Michigan, and Grassley, a Republican from Iowa – introduced legislation to make it harder for corrupt politicians, terrorists, and other criminals to form and hide behind anonymous U.S. shell companies. That effort got nowhere. In July President Obama signed a new Strategy to Combat Transnational Crime, which proposes a series of laws to achieve its goals. That effort looks to be a victim of the continuing mindless debate about the U.S. federal deficit and future budgets.
Read more!

Free Trade hits black workers hardest

Thanks largely to free trade agreements, urban black workers are suffering from especially high joblessness, William Lucy, former secretary-treasurer of a large AFL-CIO union, writes in the Cleveland Plain Dealer.

Unemployment rates reach almost Great Recession heights in cities with a large population of blacks, Lucy points out: 18% in Cleveland, 25% in Detroit, 22% in Milwaukee.

“There are some politicians who would have us believe that the proposed free trade agreements with South Korea, Columbia and Panama will heal the jobs crisis and restore the manufacturing jobs lost. Either those politicians have historical amnesia, or they have not been to Cleveland to see what we've seen,” he writes, adding:

“Since the North American Free Trade Act was signed in 1994, more than 682,900 jobs in America have been displaced to Mexico. The bulk were in manufacturing, the very jobs that helped to create a black middle class. The South Korean FTA is estimated to cost the United States another 159,000 jobs. During a time when so many are struggling to find jobs or straining to hold onto the jobs that they have, how could anyone think that more free trade agreements are what our communities need?

“Maybe they can't see the effects of an auto factory or textile factory shutting down. Maybe they can't fathom the devastation that happens when a company relocates an entire electronics assembly line to another country. Maybe they don't understand that for all the hundreds of thousands of jobs lost, those are communities devastated, workers who can't provide for their families, an entire segment of the population struggling to maintain the economic gains they've made.“

Lucy is founding president of the Coalition of Black Trade Unionists and former secretary-treasurer of the American Federation of State, County, and Municipal Employees. His article appeared in the August 13 issue of the Plain Dealer.

Read more!

The skimpiness of U.S. minimum wages

Would raising minimum wages really cause people to leave the job market, as many charge? Yes, a minimum wage of $80 or $100 an hour would certainly have that effect, but the federal minimum of $7.25 doesn’t seem dangerously high. The Canadian province of Ontario has a minimum of $10.25 and thousands of unemployed Canadians don’t sneak across the border to supplement their jobless pay by snaring a job in the U.S.

“Americans should face the truth: we pay poor people crap because we can, because they have few choices and nowhere else to go but jail.”

So writes Salvatore Babones on his Website Benchmarking America. He supports his case by citing the most recent OECD data, which puts the U.S. the federal minimum pay at the bottom of the rate paid by 10 rich countries.

“What’s more,” he adds, “people working minimum-wage jobs in all the other nine countries have some form of national health insurance coverage, so their true wages on a like-for-like basis are even higher than in America."

Babones is a senior lecturer in sociology and social policy at the University of Sydney in Australia. His current academic project evaluates U.S. performance over time and against other countries. The paragraphs above on minimum wages are a summary of one of dozens of his analyses, illustrated and salted with plain-speaking prose.

His book, “Benchmarking America,” will be published next year. Meantime, previews of some chapters are available on his Website of that name, as well as on Facebook. He speaks and leads a discussion on Monday, August 15, at the Economic Policy Institute (EPI) in Washington.
Read more!

Wealth gaps between whites and blacks at record high

The median wealth of white households is 20 times that of black households – the largest since the government began publishing such data a quarter century ago.

So reports the Pew Research Center in its analysis of newly available U.S. Census Bureau data from 2009. Among other significant points made in the Center’s report:

-- Plummeting house values were the main reason for the inflation-adjusted decline in wealth (assets minus debt) of both whites and blacks. Among white households, the decline was from $134,992 in 2005 to $113,149 in 2009. Among black households, it was from $12,124 in 2005 to $5,677 in 2009.

-- Wealth disparities between whites and blacks have always been much greater than gaps in income, which covers the annual inflow of wages, interest, and other sources of income.

-- In 2009, about a quarter of all black households had no assets other than a vehicle, compared with just 6% of white households.

The Pew Center report can be found at http://pewsocialtrends.org/2011/07/26/wealth-gaps-rise-to-record-highs-between-whites-blacks-hispanics/

For detailed timely information on income and wealth disparities in the U.S., see the Economic Policy Institute’s State of Working America at
http://www.stateofworkingamerica.org/. Read more!

Inequality, not poverty, is world’s top challenge: African leader

Huge disparities in wealth are fomenting rage to the point that narrowing inequalities within nations has becomes the most urgent development task facing the world. So says an African leader, John Githongo, most recently in an article published in the July 24 issue of the New York Times.

In that article, titled “When Wealth Breeds Rage,” Githongo, chairman of the African Institute for Governing with Integrity, draws on the recent outbursts in the Middle East and North Africa, where young protesters have toppled some of the most ruthless strongmen on the planet. “Radical and growing economic inequality animated much of what was at stake in the various Arab uprisings,” he writes, “and it will play a major role in shaping African politics for years to come.”

The resentment, he holds, has two important characteristics:

-- It is “particularly acute among members of the giant youth bulge across Africa and the Middle East.” For example, in Kenya, his native country, over 75 percent of the population is under 34 years of age.
-- It is “heightened by the tools of the information age, which remind them that they have been excluded from feeding at the trough enjoyed so blatantly by the nouveau riche – a lifestyle that is showcased by the newly minted wealthy on television, Twitter, Facebook, and the Web in infuriating detail.”

“Indeed, if the Arab revolutions have taught us anything, it is that inequality and perceptions of inequality within poor countries have now replaced poverty as the No. 1 development challenge. And consequently, the struggle to mitigate inequality…has become the most urgent task. Narrowing wealth disparities within nations rather than among them is now paramount.”

Githongo acknowledges that economic growth has brought about a huge decline in poverty, but adds:

“Across the world, as growth has spread and accelerated, so has inequality. It is clear that growth is often not enough to guarantee stable, cohesive societies. Rather than create a rising tide that lifts all boats, it can actually increase inequality in a society. And inequality, unlike poverty, is far more easily politicized, ethnicized and militarized, especially in African countries with heterogeneous populations and weak judicial and regulatory institutions. It is also far more combustible because it creates an identifiable enemy — a class that benefits disproportionately because of its unfair access to those who wield power. Mismanaging it can be catastrophic.” Read more!

The Great Turnaround: Developing Nations Outdoing the Rich Ones

“As rich economies’ prospects dim under their crushing debt burden and political paralysis, the world’s hope for economic dynamism rests with developing nations,” Dani Rodrik of Harvard points out in his weblog, and illustrates with the graph above.

“For the first time ever, developing countries as a group have been growing faster than industrial countries,” he writes. “Not only that, as the figure makes clear, the growth differential between the two groups has been widening in favor of the poor countries.”

In his July 21 posting, titled "The great divergence, the other way around," Rodrik cautions that the growth in Africa and Latin America is fragile, “much of it making up for lost time, rather than real convergence.” He is more optimistic about the durability of growth in Asia. Read more!

Religious leaders to deficit negotiators: Put ‘Circle of protection’ around the vulnerable

A delegation of religious leaders met with President Obama and congressional leaders July 20 to urge that current negotiations on the deficit and debt protect programs for the most vulnerable, including the poor and hungry.

Congress and the Administration, they said, must consider these moral criteria to guide their decisions:

1. Every budget decision should be assessed by whether it protects or threatens human life and dignity.
2. A central moral measure of any budget proposal is how it affects “the least of these” (Matthew 25). The needs of those who are hungry and homeless, without work, or in poverty should come first.
3. Government and other institutions have a shared responsibility to promote the common good of all, especially ordinary workers and families who struggle to live in dignity in difficult economic times.

Bishop Ricardo Ramirez, representing U.S. Conference of Catholic Bishops (USCC), told the President that the bishops are not advocating “a particular plan, but a fundamental moral principle: put the needs of the poor first in allocating scarce resources…The poor have no powerful lobbyists, but they have the most powerful moral claim on this process. Please do all you can to defend the poor and vulnerable in all you say and do at this moment of crisis and the hard days ahead.”

“Your Members of Congress need to hear the same message,” a USCC statement on July 22 said, and described how to reach them through the phone and Internet.

Most delegation members belong to the “Circle of Protection,” a new initiative to spare federal programs for the neediest. Read more!