Economy

The Wrong Kind of Immigration Spending

AP Photo/Tuscaloosa News, Robert Sutton
The Republican party's abysmal performance among Latino voters in the 2012 election, and the ensuing realization among many in the GOP that they need to change their stance on immigration or risk more defeats, have made it a real possibility that passage of the first comprehensive immigration reform bill in over a quarter-century could happen soon. The debate will no doubt be intense, so as it begins, some facts about the recent and not-so-recent history of immigration in America will be important to keep in mind. Immigration had its first peak in the first decade of the 20th century, when over 8 million people from other countries became legal permanent residents of the United States, a number that wasn't exceeded again until the 1990s. By the 1960s, however, immigrants from North America (mostly Mexico) exceeded those from Europe; Asian immigrants exceeded Europeans in the 1970s. (These data, and many more, can be found in the Department of Homeland Security's annual yearbook of...

New Marijuana Laws: Just a Smokescreen

Flickr/Rupert Ganzer
Flickr/Rupert Ganzer A medical marijuana dispensary across the border in Portland, Oregon. B efore Washington state voters legalized marijuana in the 2012 election, pot was easy enough to access on the black market. Five percent of state residents have used the drug in one form or another while burning through a remarkable 187,000 pounds per year, according to estimates by Washington’s Office of Financial Management. Getting high without getting arrested wasn’t much of a problem, either. Washington decriminalized medical marijuana 15 years ago, and today dozens of dispensaries are operating under protection of state law. In addition, Washington’s biggest city, Seattle, had instructed its police force to treat personal possession of marijuana as the lowest law-enforcement priority. So what’s the big deal about legalization in this already weed-friendly state? The new law doesn’t end the legal battle over marijuana so much as it changes the rules of engagement: Growers and dealers can...

A More Perfect European Union

David Cameron's speech has its fair share of detractors, but it should be embraced as an impetus to take Europe's governance to the next level.

Flickr/vsaid
As President Barack Obama embarks on his second term, he and many other global leaders hoping for economic recovery paid close attention to the recent speech given by British Prime Minister David Cameron about whether he would lead the UK out of the European Union. Europe is the largest trading partner with both the United States and China, so the continent’s recession and the restructuring of its basic institutions is no academic matter. What happens there affects the rest of the world. Cameron's speech was disappointing for most, including no doubt the White House which had lobbied Cameron to maintain Britain's place at Europe's center. The pugnaciousness at the core of Cameron's position—"The UK should stay in the European Union, but we want to cherry pick the conditions"—poses an obvious problem. No union can survive if its members agree to terms in such an à la carte manner, and the speech resulted in negative reactions from most quarters, including many of Cameron's allies...

Equality of Flying Time

Poking holes in the arguments that appear on The Wall Street Journal’s editorial pages bears a close resemblance, I admit, to shooting fish in a barrel, but an op-ed in Thursday’s Journal makes points so idiotic I cannot restrain myself. Its thesis, as woozily argued by Donald Boudreaux, a George Mason University economics professor, and Mark Perry, a University of Michigan econ prof, is that the decline and stagnation of the American middle class is a myth. Careful analyses of American income distribution by economists like UC Berkeley’s Emmanuel Saez—who has found that 93 percent of U.S. economic growth since the trough of the recession has gone to the wealthiest 1 percent of our compatriots—are not even considered in the Boudreaux-Perry manifesto. Rather, they note that Americans’ life expectancy has increased in recent decades (though they fail to grapple with the recent report from the National Research Council and the Institute of Medicine, which found that Americans’ lives are...

Remember Your Salary Doubling? Oh Wait...

Flickr/Rich Johnson
Brace yourself. In coming weeks you’ll hear there’s no serious alternative to cutting Social Security and Medicare, raising taxes on the middle class, and decimating what’s left of the federal government’s discretionary spending on everything from education and job training to highways and basic research. “We” must make these sacrifices, it will be said, in order to deal with our mushrooming budget deficit and cumulative debt. But most of the people who are making this argument are very wealthy or are sponsored by the very wealthy: Wall Street moguls like Pete Peterson and his “Fix the Debt” brigade, the Business Roundtable, well-appointed think tanks and policy centers along the Potomac, members of the Simpson-Bowles commission. These regressive sentiments are packaged in a mythology that Americans have been living beyond our means: We’ve been unwilling to pay for what we want government to do for us, and we are now reaching the day of reckoning. The truth is most Americans have not...

Equality, Brought to You by U.S. Airways?

Flickr/Robertsharp
Poking holes in the arguments that appear on The Wall Street Journal’s editorial pages bears a close resemblance, I admit, to shooting fish in a barrel, but an op-ed in Thursday’s Journal makes points so idiotic I cannot restrain myself. Its thesis, as woozily argued by Donald Boudreaux, a George Mason University economics professor, and Mark Perry, a University of Michigan economics professor, is that the decline and stagnation of the American middle class is a myth. Careful analyses of American income distribution by economists like U.C. Berkeley’s Emmanuel Saez—who has found that 93 percent of U.S. economic growth since the trough of the recession has gone to the wealthiest 1 percent of our compatriots – are not even considered in the Boudreaux-Perry manifesto. Rather, they note that Americans’ life expectancy has increased in recent decades (though they fail to grapple with the recent report from the National Research Council and the Institute of Medicine, which found that...

Keystone XL: A Year in Review

What has happened with the pipeline in the year since the Obama administration rejected TransCanada's original permit?

Flickr/Bold Nebraska
Flickr/M.V. Jantzen I t’s been just over a year since the Obama administration rejected TransCanada’s original permit application for Keystone XL. On the surface, it might seem like nothing much has happened. The State Department has yet to release its assessment of the environmental impacts of the new, revised pipeline route, which TransCanada proposed on May 4, 2012, only four months after the initial permit rejection. None of the many attempts by Republicans in Congress to force through approval of the pipeline succeeded, and with the slow fade of Mitt Romney, one of the projects’s self-proclaimed biggest fans, the project’s best chance to pass unimpeded through U.S. bureaucracy was lost. But in this period neither TransCanada nor Keystone XL opponents have been at rest. Construction on the southern end of the pipeline began in August, and protesters, hoping to budge an administration that has turned stalling on environmental action into a specialty, have amped up both their...

Deficits: The End of an Obsession

AP Photo/Alan Diaz
The consensus around debt reduction is beginning to crumble. Some straws in the wind are more careful attention to the actual numbers, as well as public conversions by such key players as Larry Summers and Peter Orszag, two former top aides to President Obama, who only yesterday were key members of the deflate-your-way-to-recovery club. Summers wrote a piece in Wednesday’s Financial Times titled “End the Damaging Obsession with the Budget Deficit,” pointing out that the more serious deficits were in jobs, wages, and infrastructure. His former colleague Orszag wrote a piece pointing out that the rest of the budget is in decent shape—the huge outlier is federal health care costs, projected to rise from 5.5 percent of GDP now to 12 percent by 2050. President Obama, in his second inaugural address, had little to say about deficit-reduction as some kind of panacea and more about broadly-shared recovery. In the era of the Bowles Simpson Commission, the Peterson Foundation’s regular...

David Cameron's Malaise Speech

Europe is not impressed with the British P.M.'s plan to loosen the country from the E.U.'s grip.

Rex Features via AP Images
Rex Features via AP Images) Prime Minister David Cameron giving the keynote speech on Britain's future in Europe, Bloomberg head office, London, Britain. I f there is one word that defined the EU in 2012, it was “Grexit.” The prospect of Greece crashing out of the Eurozone hovered over Europe like a dark cloud, threatening a thunderstorm but never delivering. With Greece’s continued membership in the euro looking more secure than it has in a while in these early days of 2013, a new word has captured the imagination of Europe-watchers: “Brexit”, or the possibility of a British departure from the European Union. Prime Minister David Cameron gave a big speech on Britain and Europe in London on Wednesday morning. In it, he expressed his country’s dissatisfaction at the evolution of the European Union, in particular in the age of the euro crisis. Lamenting the slipping competitiveness of European economies and the mounting democratic deficit of the EU, he vowed to renegotiate the United...

Workers, Not Babysitters

There's still a long way to go to ensure domestic workers have the same protections as other workers, but progress is coming. 

Flickr/brk in bklyn
S ome very welcome news may break soon for the domestic workforce: the White House appears to be close to announcing a rule change to the Federal Labor Standards Act, finally including home health aides—those who bathe, nurse, toilet, and care for the elderly and disabled in their homes—in its protections. It may sound out of another century, and it is, but home health care workers had been excluded from federal overtime and minimum wage protections through a companionship exemption. It was designed to leave out only those who provided company, but had become so widely interpreted as to encompass a vital, booming workforce. The administration has long been sitting on the decision to change the rule, but outgoing Secretary of Labor Hilda Solis recently told The Nation , “there’ll be movement on that. We’ll shortly see progress made there.” If and when this change is announced, this workforce will be formally recognized as “workers,” not babysitters making pin money. The symbolism can’t...

Labor, and Middle Class, Still Shrinking

AP Photo/Keith Srakocic
Can we at least agree to stop using the term “Big Labor?” Whatever else may be said of the American union movement, it’s not really big any more. Today, the Bureau of Labor Statistics (BLS) released its report on the number of Americans in unions in 2012, and it tells a tale of steady, and in some cases, dramatic shrinkage. In 2011, 11.8 percent of American workers were unionized; last year, that figure dropped to 11.3 percent. The percentage of public sector workers in unions dropped from 37.0 percent to 35.9 percent, while the share of unionized private sector workers went from 6.9 percent to 6.6 percent. For all intents and purposes, collective bargaining in the U.S. private sector has just about vanished. In 1970, there were 17.8 million union members in a nation of 203 million. Last year, 14.4 million Americans were union members (down by 400,000 from the previous year) in a nation of 315 million people. In percentage terms, the 11.3 percent national unionization rate is just...

Why Balance the Budget?

Google
I mentioned in the previous post that Republicans have pledged to craft a plan that balances the budget in ten years. As a political matter, it’s easy to see why they would do this—Americans like the idea of a balanced budget. As an economic issue, however, the question is less clear. Here’s Matthew Yglesias asking if there’s anything—anything at all—that we gain from having a balanced budget: The budget will, presumably, cut spending down to a level that conservatives think is appropriate. Say that sums up to 18 percent of GDP. Well if you’re spending 18 percent of GDP and 18 percent of GDP is the right amount to spend, then why is it better to raise 18 percent of GDP in taxes rather than raise 16 percent and borrow the rest? Is it because a 2 percent of GDP budget deficit would be inflationary? Is it because an inflation-targeting central bank faced with a 2 percent of GDP budget deficit would be forced to peg short-term interest rates at a high level? What’s the problem, exactly,...

There is No Spending Crisis

AP Photo/J. Scott Applewhite
Most GOP rhetoric centers on the notion the United States is facing a “spending crisis” that will ruin its fiscal solvency. Setting aside the fact that this is impossible —a country with fiat currency (held in reserve by most of the world) can’t “run out” of money, and can’t have a “debt crisis”—it’s also true that the government just isn’t spending as much as Republicans think. Economic stimulus aside, Obama has presided over modest growth in federal outlays. Here’s Bloomberg with more: Federal outlays over the past three years grew at their slowest pace since 1953–56, when Dwight D. Eisenhower was president. Expenditures as a share of the economy sank last year to 22.8 percent, their lowest level since 2008, according to Congressional Budget Office data. That’s down from 24.1 percent in 2011 and a 64-year high of 25.2 percent in 2009, when Obama pushed through an $831 billion stimulus package. “If you strip out the stimulus, discretionary spending over the last few years has been...

Invisible Workers, Global Struggles

Flickr/Janinsanfran
Flickr/Janansanfran L ike countless other migrant girls toiling far from home, her life was invisible—except for the chilling way it ended. Earlier this month, Rizana Nafeek, a young Sri Lankan migrant in Saudi Arabia, was executed after being convicted of killing a baby in her care. The case drew international condemnation not only because of the severe punishment and opacity of the legal proceedings—she was reportedly just 17 at the time, not 23 as her falsified passport indicated, and advocates said her confession had been coerced—but also because the girl’s brief life exposed the consequences of the invisible struggles facing domestic workers in the Middle East and beyond. Nafeek's case symbolized the severe treatment of migrants in Saudi Arabia (human-rights watchdogs report that numerous other domestic workers have faced the death penalty after unfair accusations—sometimes stemming from cases of self-defense against abusers—pushed them into a biased and abuse-ridden legal system...

The Truth about Student Debt

In 40 percent of cases where a student loan debtor sought forgiveness of their loans as part of a bankruptcy case, the judge granted at least some relief. Only 0.1 percent took the bait.

Flickr/Occupy Student Debt Campaign
There are a few ready talking points when discussing the student-loan crisis: the collective $1 trillion burden of debt, how student debt is now larger than credit card debt in this country, the fact that the 90-day delinquency rate spiked to 11 percent last year, meaning over one in ten borrowers are behind on their payments—all facts that don’t give much hope to those with loans, or those trying to resolve the financial crisis. Another widely repeated belief is that student loans are completely nondischargeable in bankruptcy, a statement that a quick fact-check proves to be rated “pants on fire” and one that is causing tens of thousands of borrowers to suffer for no reason, for years. A new empirical study of a nationwide sample of bankruptcy cases by Jason Iuliano, a Harvard Law School graduate and Princeton political science PhD student, shows that in 40 percent of cases where a student loan debtor sought forgiveness of their loans as part of a bankruptcy case, the judge granted...

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