Economy

One Big Question

Last Thursday, I attended a conclave, sponsored by the Frederich Ebert Foundation, of about 20 American liberals (chiefly economists and union representatives) and 20 German social democrats (economists, unionists, Social Democratic Party officials, and a couple of stray businessmen) to see what we could learn from each country’s respective economic, social, and political arrangements. Early on, one German friend posed a question to us Americans: “Where’s your [i.e., America’s] learning curve?”

Q&A: Justice for Black Farmers

AP Photo/Alex Brandon

On October 27, after a 15-year fight, a federal judge approved a $1.25 billion settlement to black farmers discriminated against by the United States Department of Agriculture (USDA). In 1997, hundreds of farmers filed a class-action suit, in the case Pigford v. Glickman, alleging pervasive discrimination of black farmers by the USDA between 1981 and 1997. For decades, the department, which regularly gives loans to farmers to keep their business afloat, had refused loans to black farmers while awarding greater loans to white farmers of equal standing. Because of an inability to receive loans, many black farmers were forced to forfeit their farms or operate on a smaller scale. In 1999, the judge demanded a settlement for those with claims.

The Budget Prescription

Earlier this month, the European Commission launched a new round of investigations targeting the pharmaceutical industry for allegedly colluding to keep low-cost generic drugs off the market. As a result, regulators are looking into the 2005 contractual arrangements between U.S.-based pharmaceutical giant Johnson & Johnson and the generic branches of the Swiss-based company Novartis to see whether the agreements purposely delayed the introduction of a generic version of the painkiller Fentanyl to the Dutch market.

Union Busters Going Down

Polls for a referendum on an anti-union law in Ohio indicate repeal.

http://www.flickr.com/photos/columbusea/5885306479/sizes/l/

Tomorrow, Ohioans will vote on Issue 2, a referendum to repeal an anti-union law that threatens to destroy public-sector unions in the state. Last spring, the governor and majority-Republican legislature passed Senate Bill 5, restricting public unions' ability to strike, collectively bargain with employers, and collect dues. In response, state Democrats and unions put the law on the ballot. Going into tomorrow's vote, it looks like labor will pull it off. A new survey from Public Policy Polling shows 59 percent of voters plan to reject SB 5 on Tuesday, while only 36 percent of voters will vote to approve it. It would be an immediate victory for workers' wages and job stability. As a crucial swing state, the win for labor also bodes well for Democrats in the 2012 elections.

In Case You Haven't Been Watching

A primer on the #OWS movement

Welcome to The Occupied Weekly, the Prospect's roundup of #OccupyWallStreet news and analysis.  Each week, we'll review the news from Manhattan’s Zuccotti Park and other Occupy movements across the country. For the inaugural edition, we've put together the five key pieces that have helped shape our understanding of what OWS is, where it comes from, and where it could be headed. Think of it as an #OWS for Dummies guide:

How Far We Haven't Come, Episode #1707

Remember "The End of Men," the concept that the future belongs to women, because women are more prepared for today's economy? Well, it hasn't hit us yet. Even when women are better educated, men earn more, at least in most parts of the workforce. As Motoko Rich reports at The New York Times,

Super Dupes

From right to left, former Senate Budget Committee Chairman Pete Domenici, R-N.M., former White House Budget Director Alice Rivlin, and former Sen. Alan Simpson, R-Wyo., and Erskine Bowles, co-chairs of the National Commission on Fiscal Responsibility and Reform, offer their advice to the Joint Select Committee on Deficit Reduction during a hearing on Capitol Hill in Washington, Tuesday, Nov. 1, 2011. The congressional super committee is trying to come up with a package by Thanksgiving that trims the federal deficit by at least $1.2 trillion over 10 years. (AP Photo/J. Scott Applewhite)

With the Congressional Super Committee required to produce a bipartisan budget-cutting plan by November 23, the best possible outcome would be for the committee to collapse of its own weight.

With no deal, automatic cuts would kick in beginning in 2013. Those budget cuts would be excessive, but that question could—and will—be reopened after the election. And in the meantime, $4 trillion in Bush tax cuts will expire, solving most of the deficit problem.

If Democrats win, it’s all up for grabs. If Republicans win, the cuts will be even deeper.

The 2012 election will be a referendum on whether we want growth or austerity, and whether we want tax fairness.

Greece in Limbo as Papandreou Calls for Vote of No Confidence

So in the end, after three days of hysteria both on the home front and internationally, there will be no referendum on the Greek bailout plan. According to the latest news, which, given developments in the past week, could be rendered obsolete at any minute, Prime Minister George Papandreou has given up on the idea that the Greek people should decide whether the country should accept its new bailout package and, by extension, whether the country should remain in the eurozone. Papandreou is insisting on a vote of confidence in his government, scheduled for midnight Friday; the vote will gauge his level of support among his party. He may end up winning, though it is more likely that he won’t.

The L.A. Dodgers, Sold into Freedom

Last night’s announcement by Frank McCourt that he has agreed to sell the L.A. Dodgers is being greeted in Los Angeles with the kind of rapture that would follow the abolition of smog or the resurrection of Marilyn Monroe. From the mayor to his political opponents on the Board of Supervisors to virtually every damned blogger in town, McCourt’s withdrawal has been greeted as the necessary prelude to restoring one of L.A.’s signature institutions—a key component of the L.A. identity—to its former glory.

Has Occupy Wall Street Affected Anything?

Peter Dreier at HuffPo has a cool graph showing how often the word “inequality” appeared in news coverage between October 2010 and October 2011. Guess what happens right about, oh, September 17? (Hat tip to Mother Jones).

You Say Tomato, I Say Potato

Yesterday, The New Republic’s Alec MacGillis arrived at the conclusion that Mitt Romney's famous flip-flopping and President Obama's pragmatism were one in the same:

A politician who considers himself driven more by case-by-case pragmatism than any overarching philosophy, who likes to get all the smartest people in the room to hash out an issue, probing each side with questions and counters to arrive at some kind of workable middle ground. Does that sound familiar?

Bravo Papandreou!

Greek Prime Minister Georgios Papandreou startled Europe and the financial world Monday by announcing that he will be calling a referendum on the terms of the latest deal negotiated by European leaders and bankers.

What is the Greek leader up to?

On one level, Papandreou is simply weary of being the agent of his own country’s economic destruction at the hands of bankers. He also is tired of the political unpopularity that comes with the role of broker of austerity.

Half-Right Brooks

David Brooks’ column today is one of his better ones—noting that the U.S. is plagued by two kinds of inequality, that which divides the top one percent from everyone else, which is prevalent in our major cities, and that in smaller cities and rural areas, where college grads are doing OK but where the bottom has fallen out for those Americans who don’t complete college or, worse, high school. The gap between the lives of college grads and others has widened not just in terms of income but health, diet, marriage stability, and the percentage of children born and raised out of wedlock.

Limit Leverage!

The astounding thing about the collapse of Jon Corzine’s gambling venture, MF Global, is the revelation that his bets were leveraged at about 40 to 1. This is like playing poker and borrowing 97 percent of your stake. If you guess wrong on a big bet (as Corzine did), you are wiped out (as he was).

The same thing happened to Lehman Brothers.

This also shows how utterly feeble Dodd-Frank is and how little the system has changed since the collapse of 2008.

The so-called shadow banking system—outfits like Corzine’s—can still bet the house if they have a taste for risk. The only good news was that at $8 billion, Corzine’s MF wasn’t big enough to take down the system or require a government bailout. But it could have been.

The Ties That Blind

A belief in American pull-yourself-up-by-your-bootstraps mythology lies at the heart of conservative attacks on the 99 percent.

Flickr/LianaAn

When the Canadian activist magazine AdBusters issued a call on its listserv to start the Occupy Wall Street demonstrations in New York and other cities, a couple of like-minded protesters created a companion blog on Tumblr called “We are the 99 percent.” The purpose of both the protests and the blog was to point out that the bottom 99 percent have been subsidizing the very rich and their wealth-multiplying experiments for decades. But the blog did something the protests didn’t: It allowed folks who couldn’t camp out in Lower Manhattan and risk arrest to participate. Contributors upload pictures of themselves holding handwritten notes that tell their stories of disenfranchisement, insolvency, and unfair workplace practices.

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