Economy

The Hidden Indentured Class

Sex trafficking isn't our only problem—forced labor accounts for a significant number of the estimated 20,000 victims of human trafficking who enter the U.S. each year.

 

AP Images/New Mexico Attorney General's Office

Anna and her husband were supposed to be in the U.S. on their honeymoon. They arrived at Los Angeles International Airport in the spring of 2007 and found Daniel waiting for them with a sign bearing their names. Daniel was an acquaintance, someone Anna’s father-in-law—who lived in Houston—knew through church. He had offered to show them parts of Southern California before they continued on to Texas. It was an attractive detour for a Southeast Asian couple in the U.S. for the first time.

Big Bank Punishments Don't Fit Their Crimes

AP Images/Richard Drew

With the Justice Department desperate to rehabilitate its image as a diligent prosecutor of financial fraud, securing a headline like “the largest fine against a single company in history” is a lifeline. A tentative deal would force JPMorgan Chase to pay a $9 billion fine and commit $4 billion in mortgage relief, to settle multiple investigations into their mortgage-backed securities business. The bank stands accused of knowingly selling investors mortgage bonds backed by loans that didn’t meet quality control standards outlined in its investment materials. JPMorgan Chase wants to “pay for peace” in this deal, ending all civil litigation around mortgage-backed securities by state and federal law enforcement (at least one criminal case would remain open).

Four Reasons We Don’t Need to Count Down to a January Shutdown

AP Photo/ Evan Vucci

The government has re-opened, the debt limit disaster was avoided, and something resembling peace has broken out in Washington. The cynics, however, have been quick to note that all of this is only temporary, with the next shutdown deadline falling on January 15. This round of budget squabbling resolved basically … nothing, so another debacle is likely. Ted Cruz is already threatening a repeat of what he just put the nation through.

Don’t count on a sequel to the 16-day hell we just witnessed, though.

Beware a Grand Bargain

AP Photo/ Evan Vucci

Will President Obama and the Democrats win a major battle only to lose the war?

The longterm war that Republicans are fighting is a deadly serious struggle to destroy the most important and valued achievements of the New Deal-Great Society legacy, Social Security and Medicare.

Wall Street billionaires like Peter G. Peterson and Stanley Druckenmiller have been softening the ground for decades by claiming that Social Security is bankrupting the country and destroying future prospects of America’s youth.

Closing the Gender Gap in the Fed's Hallowed Halls

AP Images/Charles Dharapak

Janet Yellen, President Obama’s superb pick to be the next chair of the Federal Reserve, should have been a shoo-in all along. In fact, it was widely thought this past spring that, as vice chair of the Federal Reserve, she was the most likely candidate to replace Ben Bernanke when his term as chair was scheduled to end early in 2014. But in the months before October 9, when she stood beaming next to President Obama in the White House as he finally announced her as his pick to succeed Bernanke, a curious campaign had emerged to nominate Larry Summers, a close economic advisor to the president, for the position. The Summers push received copious media coverage, reportedly fueled by senior White House advisors.

A Spine Is a Useful Thing to Have

AP Photo/Charles Dharapak

How much damage have the Republicans done to themselves going into the elections of 2014 and 2016? And has President Obama resolved to hang tough, not just in this round, but in the one that follows and the one after that?

The contrived shutdown crisis proved two things.

Tom Friedman’s Worst Column Ever

AP Photo/Mark Lennihan

Sometimes, Tom Friedman writes a column that is such complete baloney it makes you want to retch. Rather than risking soiling my shoes, here is a point-by-point rebuttal to Friedman’s opus du jour, titled: “Sorry, Kids. We Ate It All.”

Friedman’s column swallows whole the budgetary malarkey of the corporate Fix-the-Debt lobby and its Wall Street sponsors. Namely, the reduced horizons of the next generation are the result of the gluttony of old folks—and of unions.

The Robot Invasion

Jason Schneider

If you want a sense of where the nation’s job market is headed, a good place to stand is inside the half-mile-long Skechers warehouse in Moreno Valley, California, where box after box of shoes is stacked upon row after row of shelving, which soars some 40 feet in the air. Physically, the place is a wonder—quiet, sleek, and environmentally friendly (at 1.8 million square feet, it’s the largest officially certified “LEED Gold” building in the country). But what’s most remarkable about the $250 million structure, which opened in 2011, is how few people work there.

Thinking the Unthinkable

Listen up, class. World War I never happened.

It didn’t happen because nobody wanted it, and everybody grasped the horrific risks. In the event, the common European civilization was destroyed, three empires fell, 16 million people died, and 20 million were wounded. So World War I couldn’t happen because everyone knew how awful it would be.

In August 1914, virtually all leaders anticipated a short set of skirmishes, a readjustment of borders as in other recent wars, and everyone would be home for Christmas. But, you know, stuff happens.

An Ignoble Prize

Eugene Fama, one of the winners of this year’s Nobel in economics, is the fellow who proposed that all markets are efficient all of the time—more precisely that market pricing accurately captures all available information and thus creates “correct” prices. Fama also insisted that there is no such thing as a price bubble.

Somehow, the man missed one of history’s great bubbles and the collapse that followed—an epic case of markets getting prices wrong. He also missed the fact that markets have incorrectly priced carbon, leading to global climate disaster, which Lord Nicholas Stern correctly termed “history’s greatest case of market failure.”

For this, they give the man a Nobel. What timing!

Old Conservatives Can't Learn New Tricks

AP Photo/Alex Brandon

If President Barack Obama and congressional Democrats wanted to maximize the political advantage they're getting from the shutdown/default crisis, they'd agree to at least one part of the short-term deals Republicans have offered, raising the debt ceiling for only six weeks at a time. Then we'd have one default crisis after another, and the standing of the GOP would keep on its downward trajectory until—let's just pick a date at random here—November 2014. But Republicans won't do that; they're now insisting (and good for them) that the deal has to extend at least a year into the future so we don't have to keep going through this. If they get that deal, though, the issue will fade and voters could start to forget how reckless Republicans have been.

They could forget, but I'm guessing Republicans won't let them.

Notes from the Underground Economy

The Prospect talks to Sudhir Venkatesh about his new book Floating City: A Rogue Sociologist Lost and Found in New York’s Underground Economy .

Flickr/omar.hassawi

Floating City: A Rogue Sociologist Lost and Found in New York’s Underground Economy is a new book by Sudhir Venkatesh that explores the struggles and aspirations of disparate New Yorkers and shows how the city’s underground economy connects its inhabitants from all walks of life. In the book, Venkatesh introduces us to a range of characters: Shine, a crack dealer breaking into the high end cocaine market centered around the art galleries, bars, and clubs of the rich; Manjun, a porn store clerk who allows prostitutes to rent his back room; and Venkatesh’s friend, Analise—the beautiful daughter of a wealthy family—who confesses to him that she manages a group of high-end prostitutes that cater to the rich.

Postcards from the Shutdown Edge

AP Photo/Brian Skoloff)

Ten days into the shutdown, it’s easy to wonder just how much the federal government helps people day-to-day. We’ve heard about delays in highways maintenance and about federal workers who have to wait until the government opens to get paid. What about those programs conservatives are always complaining about? You might have expected stories about people suffering without help from various federal services—from food stamps to welfare checks. Instead, there’s been little to indicate needy people are going without.

That’s because the worst potential effects of the shutdown have been delayed—for now.

The Task Rabbit Economy

TskRabbit.com markets itself as a Web service that matches clients seeking someone to do odd jobs with “college students, recent retirees, stay-at-home moms, [and] young professionals” looking for extra income. The company website calls it “a marketplace dedicated to empowering people to do what they love.” The name Task Rabbit doesn’t exactly suggest the dignity of work, and the love often takes humble forms. Customers hire Task Rabbits to clean garages, haul clothes to the laundry, paint apartments, assemble Ikea products, buy groceries, or do almost anything else that’s legal.

Enter Yellen

AP Images/Eugene Hoshiko

With President Obama’s belated decision to name Janet Yellen to chair the Fed, several questions arise.

First, is Yellen likely to be confirmed? Almost certainly. The Republicans have lost a lot of public support by shutting down the government and playing chicken with the debt ceiling. They are not likely to trifle with the one functioning branch of government. Despite the Republicans’ intermittent uses of the filibuster, I’d be surprised if they went to the barricades to block Yellen.

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