October 21, 2014 archive

Not a surprise at all.

America’s ugly economic truth: Why austerity is generating another slowdown

David Dayen, Salon

Tuesday, Oct 21, 2014 07:00 AM EST

You usually think about October surprises in the political context, but we’ve had something of an economic October surprise this year. A tumultuous drop in oil prices and a significant stock market pullback underlie serious challenges for the global economy. And it points to a core problem that has really been with us for over a decade, but more acutely since the Great Recession: Countries cannot generate enough demand in the economy without a financial bubble of some sort. Sadly, the primary way to change that has been, catastrophically, shut off by the blinkered stubbornness of our policymakers.



America, with our sluggish growth, represents the positive outlier in this scenario. But pretty much everywhere, a familiar story can be told, as Neil Irwin pointed out last week. “The world economy still hasn’t recovered from the last recession,” Irwin writes, and “investors lack confidence that policy makers have the tools they would need to avert a new slide into recession after years of throwing everything they have at it to try to encourage recovery.” This is more a belated realization than a change in fundamentals. It’s almost as if investors woke up one morning and realized that this is all there is – weak growth, if that, as far as the eye can see.

But, of course, it’s not that policymakers lack the tools to avert recession. They refuse to use the tools they have.



With an intractable wage slowdown, extreme inequality keeping money in the hands of people who can’t spend it fast enough, and a persistently high trade deficit, we have almost no ability to get demand to a level consistent with full employment. And the biggest tool we can use, increased federal spending, has been overwhelmed by $2.1 trillion in cuts from the deal to end the debt ceiling crisis in 2011, including the random hacking away at the budget known as sequestration. Therefore, the economy remains relatively depressed almost by definition. You cannot have a budget deficit under 3 percent of GDP given these conditions and expect an economic surge.

Austerity amid recovery has been a disaster everywhere it’s been tried, and the fact that America’s course looks better right now than the more calamitous policy choices in Europe or the rest of the world brings little comfort. Anyway, a global slowdown, which appears to be the current path absent concerted action, will inevitably hit us at home.



Of course, the kinds of policies that could really get economies moving would be distasteful to those who have been profiting off the status quo: the global 1 percent. They don’t want higher inflation or reduced inequality or less financial engineering. But this serves as a poor excuse for policymakers, who are not contractually bound to do the bidding of the wealthy. Moreover, such selfishness happens to be counterproductive, as we’re seeing with the market slump. All things being equal, the rich do better in a growing economy than a slumping one.

The real surprise this October, sadly, would be a reemergence of the tried and true implements of economic progress. IMF managing director Christine Lagarde put it best recently when she said, “There is a real risk of subpar growth persisting for a long period of time, but what is important is that we know it can be averted.” But knowing is not enough. It’s time for the world to do something.

Welcome to The Jungle

Many readers were most concerned with his exposure of health violations and unsanitary practices in the American meatpacking industry during the early 20th century, based on an investigation he did for a socialist newspaper.

The book depicts working class poverty, the lack of social supports, harsh and unpleasant living and working conditions, and a hopelessness among many workers. These elements are contrasted with the deeply rooted corruption of people in power. A review by the writer Jack London called it, “the Uncle Tom’s Cabin of wage slavery.”

WTO Meat-Labeling Ruling Jeopardizes Consumer Safeguards

by Deirdre Fulton, Common Dreams

Published on Monday, October 20, 2014

In its decision, the WTO said the country-of-origin labels (also referred to as ‘COOL’) forced meatpackers to segregate and keep detailed records on imported livestock, giving them an incentive to favor U.S. livestock.



“The WTO’s continued assault against commonsense food labels is just another example of how corporate-controlled trade policy undermines the basic protections that U.S. consumers deserve,” said Food & Water Watch executive director Wenonah Hauter in response to the news. “The United States should appeal the ruling and continue to fight for sensible consumer safeguards at the supermarket.”

Lori Wallach, director of Public Citizen’s Global Trade Watch, said the ruling speaks to how international trade deals weaken U.S. consumer, environmental and other protections: “Today’s ruling spotlights how these so called ‘trade’ deals are packed with non-trade provisions that threaten our most basic rights, such as even knowing the source and safety of what’s on our dinner plate.”

What’s more, Hauter added, the dispute illustrates how corporate special interests can use the WTO to evade democratic governance. According to Food & Water Watch, the U.S. meatpacking industry has unsuccessfully opposed COOL rules in Congress, the executive branch, and the courts for the last 15 years.

“The meatpacking lobby has lost the COOL debate from the court of public opinion to the Court of Appeals to the halls of Congress so they are taking their complaint to the faceless unelected bureaucrats in Geneva,” she said. “When the meat cannot get its way here in America, it is trying to use the WTO to overturn the will of the American people.”

Cartnoon

The Breakfast Club (The Supremes)

Welcome to The Breakfast Club! We’re a disorganized group of rebel lefties who hang out and chat if and when we’re not too hungover  we’ve been bailed out we’re not too exhausted from last night’s (CENSORED) the caffeine kicks in. Join us every weekday morning at 9am (ET) and weekend morning at 10:30am (ET) to talk about current news and our boring lives and to make fun of LaEscapee! If we are ever running late, it’s PhilJD’s fault.

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This Day in History

Thomas Edison perfects workable electric light; Anthrax scare claims first of two U.S. postal workers in Washington, DC; Britain wins Battle of Trafalgar; Actress and author Carrie Fisher born

Breakfast Chuckle

On This Day In History October 21

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

Find the past “On This Day in History” here.

October 21 is the 294th day of the year (295th in leap years) in the Gregorian calendar. There are 71 days remaining until the end of the year.

On this day in 1959, On this day in 1959, on New York City’s Fifth Avenue, thousands of people line up outside a bizarrely shaped white concrete building that resembled a giant upside-down cupcake. It was opening day at the new Guggenheim Museum, home to one of the world’s top collections of contemporary art.

Guided by his art adviser, the German painter Hilla Rebay, Solomon Guggenheim began to collect works by nonobjective artists in 1929. (For Rebay, the word “nonobjective” signified the spiritual dimensions of pure abstraction.) Guggenheim first began to show his work from his apartment, and as the collection grew, he established The Solomon R. Guggenheim Foundation in 1937. Guggenheim and Rebay opened the foundation for the “promotion and encouragement and education in art and the enlightenment of the public.” Chartered by the Board of Regents of New York State, the Foundation was endowed to operate one or more museums; Solomon Guggenheim was elected its first President and Rebay its Director.

In 1939, the Guggenheim Foundation’s first museum, “The Museum of Non-Objective Painting”, opened in rented quarters at 24 East Fifty-Fourth Street in New York and showcased art by early modernists such as Rudolf Bauer, Hilla Rebay, Wassily Kandinsky, and Piet Mondrian. During the life of Guggenheim’s first museum, Guggenheim continued to add to his collection, acquiring paintings by Marc Chagall, Robert Delaunay, Fernand Leger, Amedeo Modigliani and Pablo Picasso. The collection quickly outgrew its original space, so in 1943, Rebay and Guggenheim wrote a letter to Frank Lloyd Wright pleading him to design a permanent structure for the collection. It took Wright 15 years, 700 sketches, and six sets of working drawings to create the museum. While Wright was designing the museum Rebay was searching for sites where the museum would reside. Where the museum now stands was its original chosen site by Rebay which is at the corners of 89th Street and Fifth Avenue (overlooking Central Park). On October 21, 1959, ten years after the death of Solomon Guggenheim and six months after the death of Frank Lloyd Wright the Museum opened its doors for the first time to the general public.

The distinctive building, Wright’s last major work, instantly polarized architecture critics upon completion, though today it is widely revered. From the street, the building looks approximately like a white ribbon curled into a cylindrical stack, slightly wider at the top than the bottom. Its appearance is in sharp contrast to the more typically boxy Manhattan buildings that surround it, a fact relished by Wright who claimed that his museum would make the nearby Metropolitan Museum of Art “look like a Protestant barn.”

Internally, the viewing gallery forms a gentle helical spiral from the main level up to the top of the building. Paintings are displayed along the walls of the spiral and also in exhibition space found at annex levels along the way.

Most of the criticism of the building has focused on the idea that it overshadows the artworks displayed within, and that it is particularly difficult to properly hang paintings in the shallow windowless exhibition niches that surround the central spiral. Although the rotunda is generously lit by a large skylight, the niches are heavily shadowed by the walkway itself, leaving the art to be lit largely by artificial light. The walls of the niches are neither vertical nor flat (most are gently concave), meaning that canvasses must be mounted proud of the wall’s surface. The limited space within the niches means that sculptures are generally relegated to plinths amid the main spiral walkway itself. Prior to its opening, twenty-one artists, including Willem de Kooning and Robert Motherwell, signed a letter protesting the display of their work in such a space.

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