Private payrolls in the US took a significant hit in September, adding complexity to an already uncertain economic landscape. With the government shutdown halting the release of the Bureau of Labor Statistics’ (BLS) monthly jobs report, policymakers and investors are left grappling for insights into the labor market’s health. In the absence of official data, attention has turned to alternative sources, such as the private-sector jobs report from payroll processor ADP, released on October 1.
According to ADP, US private-sector businesses shed 32,000 jobs in September, a stark contrast to economists’ expectations of a 50,000-job gain. The report also revised August’s figures, turning an initial estimate of 54,000 jobs added into a loss of 3,000. ADP’s chief economist, Nela Richardson, attributed much of this downturn to a preliminary “rebenchmarking” of the data, which reduced September’s job count by 43,000 compared to pre-benchmarked figures. “While the numbers changed, the story remains consistent: hiring momentum has slowed throughout 2024,” Richardson told reporters. She noted that the recalibration, aligned with the 2024 Quarterly Census of Employment and Wages (QCEW), revealed a persistent slowdown in hiring, particularly evident in September. The QCEW, which draws from quarterly tax reports submitted by businesses, offers a comprehensive view of employment and wages at state, regional, and county levels. However, its lagged data limits its timeliness, leaving gaps in real-time analysis.
September’s job losses were driven primarily by small businesses, with widespread declines across industries. Professional and business services, as well as leisure and hospitality, saw some of the largest drops. Health care remained a notable exception, continuing to drive consistent employment growth throughout the year. The broader labor market is showing signs of stagnation. The BLS’s August jobs report, the last available before the shutdown, indicated that the economy added just 22,000 jobs, with the unemployment rate climbing to 4.3%—its highest in nearly four years. June’s job gains were also revised downward into negative territory. The BLS’s Job Openings and Labor Turnover Survey, released earlier this week, further underscored the slowdown, with the hiring rate dropping to 3.2% in August, matching its lowest level since 2013, excluding the early pandemic period in 2020.
Despite the lack of a monthly BLS jobs report, economists argue that the Federal Reserve has enough evidence to justify further interest rate cuts at its next meeting. Joe Brusuelas, an economist at RSM US, noted that the labor market’s condition supports a quarter-point rate reduction. He highlighted additional pressures, including policy uncertainty around trade and immigration, as well as long-term demographic challenges limiting labor supply. “The government shutdown and threats of mass firings are not conducive to a positive October payroll outlook,” Brusuelas wrote. US stocks reflected this uncertainty, trending lower amid concerns over the shutdown and remaining subdued after the ADP report’s release.
As the government shutdown persists, the absence of comprehensive data will continue to challenge policymakers and investors alike, making reports like ADP’s a critical, if imperfect, tool for navigating the economic landscape.
In 1942, economist Joseph Schumpeter introduced the concept of creative destruction in his seminal work, Capitalism, Socialism, and Democracy. He described it as the process by which innovations such as new technologies, products, or methods, disrupt and ultimately dismantle established economic structures to pave the way for novel systems and opportunities. This relentless cycle of renewal is not merely a feature of capitalism but its very engine, driving progress through the destruction of the old to make room for the new. Beyond economics, creative destruction serves as a powerful lens for understanding transformation in art, culture, and society, acting as a bridge between the analytical rigor of economics and the expressive freedom of creative disciplines.
The transition from horse-drawn carriages to automobiles exemplifies creative destruction because the innovative technology of cars disrupted and largely eliminated the established carriage industry, displacing related jobs and infrastructure while creating new markets, industries, and opportunities for economic growth.
Schumpeter argued that capitalism thrives on innovation, but this comes at a cost. Established industries, firms, and practices often become obsolete as entrepreneurs introduce groundbreaking ideas. The rise of the automobile, for instance, decimated the horse-drawn carriage industry, while digital streaming platforms have largely supplanted traditional media like DVDs and broadcast television. This process is not gentle, as it disrupts livelihoods, renders skills obsolete, and reshapes markets. Yet, Schumpeter saw it as essential for economic vitality, as it fosters efficiency, growth, and adaptation.
The shift from Neoclassical art to Impressionism exemplifies creative destruction as Impressionist artists like Monet and Renoir rejected the rigid, idealized forms of Neoclassicism, disrupting traditional artistic conventions with innovative techniques like loose brushwork and vibrant colors, thus creating new avenues for expression while rendering older styles less dominant.
The parallels between economic and artistic innovation are striking. In art, creative destruction manifests as the rejection of established norms, styles, or mediums in favor of bold experimentation. Consider the transition from Romanticism to Impressionism in the 19th century. Artists like Claude Monet and Pierre-Auguste Renoir broke with the rigid conventions of academic painting, embracing loose brushwork and vibrant color palettes to capture fleeting moments of light and life. This shift shocked the art world, rendering traditional techniques less relevant while opening new avenues for expression.
Similarly, the 20th century saw movements like Dadaism and Abstract Expressionism dismantle prevailing aesthetic frameworks. Marcel Duchamp’s Fountain (1917), a readymade urinal presented as art, challenged the very definition of artistic value, forcing a reevaluation of creativity itself. These disruptions, while initially controversial, expanded the boundaries of art, inspiring future generations to explore uncharted territory.
The concept of creative destruction serves as a bridge between economics and art, illuminating their shared reliance on reinvention. In both domains, progress demands a willingness to let go of the familiar. Just as entrepreneurs disrupt markets with innovative business models, artists challenge cultural norms with provocative works. This shared dynamic invites reflection on broader societal phenomena, such as reinvention, disruption, and even gentrification.
Gentrification can be viewed through the lens of creative destruction, as it revitalizes areas and creates new opportunities, but at times comes at the cost of cultural erasure.
Gentrification, for example, can be viewed through the lens of creative destruction. As urban neighborhoods evolve, new businesses, residents, and cultural trends displace longstanding communities and traditions. While this process can revitalize areas, it often comes at the cost of cultural erasure or displacement, raising ethical questions about who benefits from such transformations. Similarly, in technology, the rise of artificial intelligence disrupts traditional labor markets but also creates opportunities for new industries and creative pursuits.
Creative destruction reminds us that progress is not linear or painless. It requires courage to dismantle the old, whether it be an obsolete industry or a revered artistic tradition. Yet, this destruction is not an end but a beginning, a catalyst for innovation that drives societies forward. By embracing the discomfort of change, we unlock the potential for reinvention, ensuring that both economies and cultures remain dynamic and resilient.
In conclusion, Schumpeter’s concept of creative destruction transcends economics, offering a framework to understand transformation across disciplines. Its resonance in art underscores the universal need for disruption as a precursor to creation. As we navigate an era of rapid technological and cultural change, creative destruction challenges us to balance the costs of disruption with the promise of renewal, fostering a deeper appreciation for the cycles that shape our world.
In economics, externalities are costs or benefits that affect parties who did not choose to incur them. A factory polluting a river, for example, imposes costs on downstream communities, including health issues, contaminated water, and dead ecosystems, while the factory reaps profits without bearing the full burden. This concept, though rooted in economics, reverberates far beyond, offering a lens to examine exploitation, ethical failures in the art world, and the unaccountable sprawl of global supply chains.
A factory polluting the air in pursuit of a profit is an example of a negative externality, as it results in a producer offloading harm onto others.
Externalities occur when the price of a good or service does not reflect its true social cost or benefit. Negative externalities such as pollution, arise when producers offload harm onto others. Positive externalities occur when benefits spill over, often unintentionally. For example, a homeowner who maintains a vibrant community garden not only enjoys their own harvest but also enhances property values and fosters social bonds for neighbors, who reap these benefits without contributing to the garden’s upkeep. The issue lies in accountability: those creating the externality often face no consequences, leaving society to clean up the mess.
An example of an externality would be a coal plant. A coal plant generates cheap energy but spews carbon, worsening climate change. The plant’s owners profit, while the global public pays the price in floods, heatwaves, and displacement. The market, left unchecked, incentivizes this imbalance. Economists propose solutions such as carbon taxes or cap-and-trade systems to internalize these costs, but implementation lags, especially across borders.
The production of consumer products such as smartphones often amplifies externalities.
Global supply chains amplify externalities by diffusing responsibility. For example, a smartphone’s production spans continents: cobalt mined in Congo, assembled in China, sold in the US. Each step generates externalities, child labor, toxic waste, carbon emissions, yet no single entity is held accountable. The consumer enjoys a sleek device, unaware of the social and environmental toll embedded in its supply chain.
International trade agreements often prioritize profit over people. Developing nations, desperate for economic growth, become dumping grounds for externalities. Factories in Bangladesh or Vietnam produce cheap goods for Western markets, but lax regulations mean workers face unsafe conditions, and rivers turn toxic. The harm is outsourced, invisible to the end consumer. Globalization’s promise of efficiency masks a darker truth: it thrives on exploiting those least equipped to resist.
The art world, often seen as a bastion of creativity, is not immune to externalities. Consider the ethics of art production. Large-scale installations may rely on materials sourced through exploitative labor or environmentally destructive practices. Artists and galleries rarely account for these costs, yet their work is celebrated in pristine white cubes. The harm, deforestation, and displaced communities remain out of sight.
The art world is increasingly confronting the concept of negative externalities. .
Patronage also breeds externalities. Wealthy collectors or institutions fund art to burnish their image, but their money may come from industries tied to social or environmental damage. The art world becomes complicit, laundering reputations while ignoring the broader impact. A museum funded by an oil magnate might showcase “radical” art, but the contradiction festers: the institution profits while externalizing the cost of its patron’s legacy.
Externalities expose a core flaw in institutions, that they are often built to prioritize self-preservation over systemic responsibility. Governments, corporations, and cultural bodies often deflect blame, leaving marginalized groups to bear the brunt. For instance, urban development projects gentrify neighborhoods, displacing low-income residents while developers profit. The social cost, fractured communities, lost cultural heritage, is externalized, unaddressed by those who caused it.
Institutional criticism, a practice rooted in questioning power structures, can challenge this. Artists like Hans Haacke have used their work to expose how institutions evade accountability, from corporate sponsorships to political influence. By shining a light on externalities, such a critique forces us to question who pays the price for progress, and why they are left holding the bill.
Policies such as carbon taxes can help address externalities, but there is much resistance to such policies by entrenched interests.
Addressing externalities requires systemic change. Policy tools like carbon taxes or labor regulations can help, but they face resistance from entrenched interests. On a cultural level, society might need to rethink value, not just in markets but in art, ethics, and global systems. Consumers can demand transparency in supply chains. Artists can interrogate their materials and patrons. Institutions can prioritize accountability over optics.
The concept of externalities is not just economic; it is a moral framework. It asks us to see the hidden costs society has normalized and to demand a world where harm is not offloaded onto the voiceless. Until we confront these unseen burdens, exploitation will persist, cloaked in the guise of progress.
In many countries, a striking economic divide persists which is known as the dual economy. This phenomenon describes the coexistence of two distinct economic sectors within a single nation: an advanced, modern sector integrated with global markets, and a subsistence sector characterized by informal, low-productivity activities. The dual economy can be thought of as two parallel worlds, operating side by side yet rarely intersecting, each with its own rules, opportunities, and challenges.
Within the concept of the dual economy, the advanced sector of the economy is usually centered around an urban area that is technologically sophisticated and globally connected.
The advanced sector is typically the face of progress: urban, technologically sophisticated, and globally connected. It encompasses industries including tech, finance, and manufacturing, where workers enjoy higher wages, formal employment, and access to global supply chains. The advanced sector drives innovation, attracts investment, and fuels economic growth.
Cities such as Buenos Aires are characterized by having both an advanced economic sector and a subservient sector existing side by side.
The duality creates a layered reality. A city like New York or London might boast gleaming financial districts while nearby slums house workers scraping by in the informal economy. These are not just economic divides but social and cultural ones, shaping distinct lifestyles, opportunities, and even worldviews.
This divide inspires powerful narratives. Artists and writers often explore themes of exclusion, who gets to participate in the “modern” world? The informal sector’s invisibility resonates in stories of marginalized voices, while the idea of parallel worlds invites speculative takes on alternate realities coexisting in one space.
Advanced sectors of the economy, such as Artificial Intelligence (AI) often benefit from government policies and public investment, while the subservience sector is left to fend for itself. This dynamic perpetuates inequality.
The dual economy is not just a quirk; it is a structural challenge. The advanced sector often benefits from government policies, infrastructure, and global trade, while the subsistence sector is left to fend for itself. This perpetuates inequality, as those in the informal economy lack access to education, healthcare, or capital to transition to higher-productivity work. Bridging this gap requires targeted policies: microfinance, skill development, and infrastructure investment can help integrate the subsistence sector into the broader economy.
Yet, the dual economy also highlights resilience. Informal workers, often excluded from formal systems, demonstrate remarkable adaptability, creating livelihoods against the odds. Their stories deserve to be told, not just as tales of struggle but as testaments to human ingenuity.
The dual economy is more than an economic framework, it is a reflection of stratified, parallel worlds within a single society. It challenges us to see the invisible, to question who benefits from progress, and to imagine ways to bridge the divide. Whether through policy, art, or storytelling, exploring this concept invites us to confront the layered realities of our world and envision a more inclusive future.
The US Economy added 263,000 jobs in November, defying aggressive action from the Federal Reserve to cool the economy and bring down decades-high inflation. The unemployment rateheld steady at 3.7%, according to the Labor Department, which released the latest monthly jobs snapshot on December 2. Economists surveyed by Refinitiv had expected the pace of hiring to slow to a gain of only 200,000 jobs in November and the unemployment rate to stay flat at 3.7%. Some of the largest monthly job gains were in the leisure and hospitality sector, as well as health care. The hot jobs report also showed an unexpected spike in average hourly earnings, another knock against the Fed’s efforts to rein in inflation by cooling demand. Officials at the central bank have expressed concern about rising wages keeping inflation elevated.
In November, average hourly earnings increased 0.6% from the month before and 5.1% year over year. Economists were expecting those rates of increases to slow from October, where they increased by a revised 0.5% month-over-month and 4.9% year-over-year. “The November employment report delivers a holiday season package of good news for American workers, including a strong increase in wages,” said Mark Hamrick, Bankrate senior economist, in a statement. “In keeping with the classic divide sometimes seen between Main Street and Wall Street, the report tells the Federal Reserve it has more work to do in its battle against inflation.”
The picture of the labor market is becoming more mixed, reflecting a number of forces at play, said Sophia Koropeckyj, managing director at Moody’s Analytics. “First, the tight labor market has definitely limited holiday hiring, but employers are also hiring more cautiously given the uncertainty about the strength of consumer spending,” she wrote in a note Friday. “In addition, employers may be more cautious in order to support margins amid rising labor and material costs. Some interest-rate sensitive industries have also been pulling back. It should be noted that pulling back does not necessarily mean laying off workers. It can mean more cautious hiring. This explains in part the low number layoffs and low unemployment rate.”
The November jobs report report also contained significant revisions: September was revised down by 46,000 to 269,000 jobs, and October was revised up by 23,000 jobs to 284,000. Considering those updates, November’s monthly gain, which remains considerably above pre-pandemic monthly averages, is now the lowest total jobs added since April 2021. Still, that might not bring much solace to the Fed, which has raised its benchmark lending rate by 3.75 percentage points this year in hopes of cooling off demand and bringing down white-hot inflation. While some areas of the economy show the effects of the Fed’s actions, home sales have fallen and inflation rates are starting to slow, the labor market has remained robust in its efforts to continue to recover jobs lost during the pandemic and adjust to continued strong consumer spending, especially in services.
The November employment report marks the very last jobs report before the Fed’s next meeting on December 13-14, when officials are expected to raise rates by half a percentage point, slightly lower than in the four previous meetings. And the hot jobs report is unlikely to shift the Fed away from thatintention to moderate its pace of increases, said Angelo Kourkafas, investment strategist at Edward Jones. “But what it does is it potentially dashes some of the hopes that the Fed will be cutting rates any time soon,” he told CNN Business. “We’re not there yet.”
The strong US labor market is showing signs of cooling, with the Labor Department reporting on November 4 a slower pace of Job Growth and higher unemployment. While the closely watched October jobs report was strong by historical standards, it suggests a series of rate hikes by the Federal Reserve meant to cool the economy has, as yet, had only a limited impact on employers’ desire to hire more workers. The report shows employers added 261,000 jobs in October and the unemployment rate rose to 3.7% from 3.5% in September, a lower monthly jobs gain than the revised September number of 315,000, though it is above the 200,000 forecast from economists surveyed by Refinitiv.
October marks the smallest monthly jobs gain for the US economy since December 2020. But it is also a solid gain by historical standards. The economy added an average of 183,000 jobs a month over the course of the decade before the pandemic. “Today’s stronger than expected report illustrates the difficult task that still lies ahead for the Fed wrestling a resilient labor market and sticky inflation,” said Mike Loewengart, head of model portfolio construction for Morgan Stanley Global Investment Office. “While the number may be disappointing for investors hoping for a dovish Fed sooner rather than later, keep in mind it was the lowest reading in nearly two years.”
Economists had expected a smaller rise in the unemployment rate, to only 3.6%. The unemployment rate is calculated using a separate survey of households rather than the employer survey used to count workers on the job. The higher-than-expected unemployment rate is also still low by historical standards, as September’s 3.5% reading matched a half-century low.
Federal Reserve Chairman Jerome Powell has warned that the economy may need to shed jobs as part of the central bank’s battle to tamp down the pace of economic growth as a way of combating higher prices.The continued strength in the labor market could leave the door open for the Fed to continue to hike rates at its upcoming meetings. Several economists said they think the Federal Reserve could slow the pace of rate hikes to a half-percentage point, rather than the three-quarters of a point increases it has been approving at recent meetings. “The bottom line here is that the labor market is softening, but has not yet reached the point where the data are screaming at the Fed to stop tightening,” said Ian Shepherdson, chief economist for Pantheon Macroeconomics. “But if these trends continue, as we expect, markets will start to push the Fed, and especially Chair Powell, to rethink the idea of continued hikes next year.”
The jobs report was praised as good news by Labor Secretary Marty Walsh. “Obviously, 261,000 jobs is great,” he told CNN in an interview after the jobs report was released. However, he noted that while total employment is now above where it was before the pandemic, there are still some sectors, such as leisure and hospitality and public schools, where employment is not yet back to pre-pandemic levels. But he acknowledged that even with the strong labor market, high prices, not jobs, are on the minds of most Americans. “No matter how many jobs that I can get in front of this camera and tell you how we’ve added and how great they are, people are still feeling the struggle at the kitchen table,” he said. The Biden administration is working to address rising prices with its Inflation Reduction Act, he added.
In addition to employment totals, one other key metric the Fed focuses on is wage growth, since higher wages can create inflationary pressure by putting more money in the hands of consumers and driving up demand for goods and services. The October jobs report showed a slowdown in wage gains, with the average weekly wage paid by businesses up just 3.8% from the 4.1% annual gain in September, and well off the gains of 5% or more seen earlier this year and during many months of 2021. Even when wage growth was at 5%, that did not keep up with the pace of price increases being paid by consumers, which stood at an average of 8.2% in the most recent Consumer Price Index. The slower pace of wage increases in this report indicates that it will be even harder for American consumers to pay higher prices.
Job growth rose far more than expected in January despite surging Omicron cases that seemingly sent millions of workers to the sidelines, the Labor Department reported February 4. Nonfarm payrolls surged by 467,000 for the month, while the unemployment rate edged higher to 4%, according to the Bureau of Labor Statistics. The Dow Jones estimate was for payroll growth of 150,000 and a 3.9% unemployment rate. The stunning gain came a week after the Biden Administration warned that the numbers could be low due to the pandemic. COVID cases, however, have plunged nationally in recent weeks, with the seven-day moving average down more than 50% since peaking in mid-January, according to the CDC. Most economists had expected January’s number to be tepid due to the virus, though they were looking for stronger gains ahead.
Along with the big upside surprise for January, massive revisions sent previous months considerably higher. December, which initially was reported as a gain of 199,000, went up to 510,000. November surged to 647,000 from the previously reported 249,000. For the two months alone, the initial counts were revised up by 709,000. The revisions came as part of the annual adjustments from the BLS that saw sizeable changes for many of the months in 2021. Those changes brought the 2021 total to 6.665 million, the biggest single-year gain in US history since 1983. “The benchmark revisions helped the numbers a bit just because it moved out some of the seasonal factors that have been at work. But overall the job market is strong, particularly in the face of omicron,” said Kathy Jones, chief fixed-income strategist at Charles Schwab. “It’s hard to find a weak spot in this report.”
For January, the biggest employment gains came in leisure and hospitality, which saw 151,000 hires, 108,000 of which came from bars and restaurants. Professional and business services contributed 86,000, while retail was up 61,000. Earnings also rose sharply, accelerating 0.7%, good for a 12-month gain of 5.7% and providing confirmation that inflation continues to gather strength. That yearly move was the biggest gain since May 2020 when wage numbers were distorted by the pandemic. The rate of wage gains, however, still lags inflation, which was running around 7% in December as gauged by the consumer price index. The labor force participation rate rose to 62.2%, a 0.3 percentage point gain, taking the rate, which is closely watched by Fed officials, to its highest level since March 2020 and within 1.2 percentage points of where it was pre-pandemic. The labor force participation rate for women rose to 57%.
“These data make it clear that the labor market ahead of Omicron was much stronger than previously believed, and it’s very tempting to argue that the [January] data mean that all danger of an Omicron hit has passed,” wrote Ian Shepherdson, chief economist at Pantheon Macroeconomics. ” We’re a bit more cautious than that, not least because the near-real-time data fell through most of [January] and have only just begun to recover.” The job gains brought employment back to about 1.7 million below where it was in February 2020, a month before the pandemic declaration.
The US economy grew 5.7 percent last year, the biggest increase since 1984, according to a January 27 Commerce Department report. That said, however, the growth “wasn’t a straight line,” notes Mark Zandi, chief economist at Moody’s Analytics. “The economy remains tethered to the pandemic.” For example, though gross domestic product expanded at a whopping 6.9 percent annual rate in the final three months of 2021, it “recently lost momentum” explains The Wall Street Journal, “with business activity undermined by pandemic-induced shortages of supplies and workers.” Still, as a whole, “2021 marked the strongest economic rebound in decades.”
American Businesses initially boomed during the vaccine rollout last spring and early summer, as protected Americans began to once again travel and dine out. That surge slowed, however, once the Delta variant arrived, notes NPR, and Omicron reared its ugly head not too long after. “Q4 started with a bang and ended with a whimper,” Zandi told NPR. “October was a fantastic month for the economy — consumer spending, investment — everything was kind of firing on all cylinders. And then by December, Omicron came on the scene quickly and did a lot of damage.” Even with its strength, last year’s economic growth fell short of economists’ hopes, proving COVID has still held the recovery back, note NPR and the Journal. “There were just too many people who didn’t get vaccinated,” Zandi added. “It’s admirable how well the economy did perform, despite the fact that vaccines didn’t exactly solve the problem.”
Positively, however, though consumer spending slowed in the first half of January, it did not decline drastically, suggesting Americans “aren’t too spooked and should keep output growing.” To that end, even with Omicron’s drag, economists believe “activity should normalize as the variant fades and spring approaches,”
Hotels, fitness clubs, tour bus companies, and minor league baseball clubs are part of a long line of businesses seeking billions of dollars in new COVID relief aid in response to the Omicron variant surge, if they can overcome opposition from many Republicans who say Congress has already given enough. Lobbyists for the businesses say their campaign has taken on new urgency as the Omicron variant sweeps across the country, forcing many companies to scale back or shut down operations as employees call in sick and customers cancel orders and reservations. A few Republican lawmakers support more relief funding for targeted industries, but most are generally opposed to spending more funds to help struggling businesses. These opponents say that the government has already provided sufficient relief, including more than $900 billion through the Paycheck Protection Program, and that more government spending will fuel inflation and budget deficits. “The U.S. government has no money to give anyone,“ said Senator Rand Paul (R-KY). ”In the past two years, Congress piled on several trillion dollars to our already substantial deficit. This unprecedented accumulation of debt is causing today’s inflation and will continue to wreak havoc in the future.”
Lobbyists for those seeking aid, which also includes restaurants and Broadway stage productions, contend that their clients were left out of previous relief efforts or didn’t get nearly enough to cover losses. Industry lobbyists are targeting legislation being crafted by Senator Ben Cardin (D-MD), the chairman of the Senate Small Business Committee, who had found an ally in Sen. Roger Wicker (R-MS) for a bill that would deliver roughly $60 billion in grants from the Small Business Administration.
Efforts to provide COVID relief assistance appear to have support in the House. Nearly 100 Democratic and Republican lawmakers signed a letter in December calling for help for businesses. Prospects are sketchier in the Senate. Under modern Senate procedures, most legislation needs 60 votes for approval. Democrats and their allies control 50 votes, so Senator Ben Cardin is seeking to sweeten the stimulus bill with provisions that can draw the support of 10 Republicans. He has the support of roughly a half-dozen Republicans so far.
Lobbyists for various industries are angling to add their COVID relief proposals to a large appropriations bill that Congress must approve by mid-February to fund the government for the current fiscal year. But that too could prove tricky. Most Republican lawmakers say they are not eager for more government spending, though that could change if the Omicron surge further disrupts the economy and forces business closures and layoffs.
The US Inflation rate hit its fastest pace in nearly four decades last year as pandemic-related supply and demand imbalances, along with stimulus intended to shore up the economy, pushed prices up at a 7% annual rate. The Labor Department said on January 12 that the consumer-price index, which measures what consumers pay for goods and services, rose 7% in December from the same month a year earlier, up from 6.8% in November. That was the fastest since 1982 and marked the third straight month in which inflation exceeded 6%. The so-called core price index, which excludes the often-volatile categories of food and energy, climbed 5.5% in December from a year earlier. That was a bigger increase than November’s 4.9% rise, and the highest rate since 1991. On a monthly basis, the CPI increased a seasonally adjusted 0.5% in December from the preceding month, decelerating from October and November.
The last time consumer prices clocked in at such an annual increase was in June 1982, but the circumstances were very different from today. While inflation right now is rising, back then it was falling after peaking at 14.8% in 1980, when Jimmy Carter was still president and the Iranian revolution had pushed up oil prices. By then, newly installed Federal Reserve Chairman Paul Volcker had set out to crush inflation by raising interest rates dramatically, causing a brief recession in 1980. As rates reached 19% in 1981, a much deeper recession began that lasted into 1982. By the summer of 1982, both inflation and interest rates were falling sharply.
Today, the Coronavirus pandemic has caused supply-chain disruptions, and a shortage of goods and materials, particularly autos, coupled with strong demand from consumers flush with the benefits of government stimulus are behind the inflation surge. Prices for autos, furniture, and other durable goods continue to drive much of the inflationary surge, fueled by largely pandemic-related imbalances of supply and demand that most economists expect to fade as COVID’s impact on economic activity eases. Prices of used cars and trucks soared 37.3% in December from a year earlier, while living room, kitchen and dining room furniture jumped 17.3%.
Economists and the Federal Reserve expect inflation to ease this year as supply bottlenecks clear and demand normalizes, but the Omicron variant has renewed uncertainty about the economic outlook as the pandemic continues. Constance Hunter, chief economist at KPMG, expects the booming demand for goods to reverse in the first half of 2022, easing overall price pressure. “I do think we’ll get back to some semblance of normal as people run through their savings and, hopefully, as we move past Omicron,” she said. Fed Chairman Jerome Powell in congressional testimony said he was optimistic supply-chain issues would ease this year and help bring inflation down. However, he also noted that the smaller U.S. labor force “can be an issue going forward for inflation, probably more so than these supply-chain issues,” Powell said.
The December inflation data suggest a mixed initial impact of the Omicron variant, which is posing a new threat to the economy as the pandemic enters its third year. Prices for airline fares and, in particular, hotels accelerated in December, though those for recreation services fell. Prices for in-person services generally slumped during previous surges in COVID infections. Gains in energy prices—which had been driven by pandemic-related disruptions as well as by weather and geopolitical factors—showed signs of flagging, with gasoline prices falling 0.5% in December from November. However, food inflation remains elevated, rising 0.5% in December from November, a slightly slower pace than the prior month.
The US economy created far fewer jobs than expected in November, in a sign that hiring started to slow even ahead of the new coronavirus Omicron variant threat, the Labor Department reported on December 3. Nonfarm payrolls increased by just 210,000 for the month, though the unemployment rate fell sharply to 4.2% from 4.6%, even though the labor force participation rate increased for the month to 61.8%, its highest level since March 2020. The Dow Jones estimate was for 573,000 new jobs and a jobless level of 4.5% for an economy beset by a chronic labor shortage. A more encompassing measure of unemployment that includes discouraged workers and those holding part-time jobs for economic reasons dropped even more, tumbling to 7.8% from 8.3%. The household survey painted a brighter picture, with an addition of 1.1 million jobs as the labor force increased by 594,000.
“This report is a tale of two surveys,” said Nick Bunker, economic research director at jobs placement site Indeed. “The household survey shows accelerating employment gains, workers returning to the labor force, and low levels of involuntary part-time work. The payroll survey shows a significant deceleration in job growth, particularly in COVID-affected sectors.” “The underlying momentum of the labor market is still strong, but this month shows more uncertainty than expected,” he added. Leisure and hospitality, which includes bars, restaurants, hotels, and similar businesses, saw a gain of just 23,000 after being a leading job creator for much of the recovery. Though the sector has regained nearly 7 million of the jobs lost at the depths of the pandemic, it remains about 1.3 million below its February 2020 level, with an unemployment rate stuck at 7.5%.
Following the disappointment, markets initially shrugged off the numbers but then turned negative after the open. Initial jobs tallies this year have seen substantial revisions, with months showing low counts initially often bumped higher. The October and September estimates were moved up a combined 82,000 in the report. Sectors showing the biggest gains in November included professional and business services (90,000), transportation and warehousing (50,000), and construction (31,000). Even with the holiday shopping season approaching, retail saw a decline of 20,000. The government lost 25,000 jobs. Worker wages climbed for the month, rising 0.26% in November and 4.8% from a year ago. Both numbers were slightly below estimates.
Policymakers have been watching the employment figures closely to gauge how close the economy is to a full recovery from the depths of the pandemic. The US suffered its shortest but steepest recession in the early days of the coronavirus pandemic in March and April of 2020 and has been on a progressive but volatile path since. Federal Reserve officials put a new wrinkle into the picture this week when they indicated that the measures they instituted to support growth could be coming to an end sooner than expected. In congressional testimony earlier in the week, Fed Chairman Jerome Powell said he expects the central bank’s policy committee to discuss at its meeting this month stepping up the level at which it is tapering its monthly bond purchases. Powell said he sees the unwinding to conclude “a few months” sooner than expected, a move that would open the possibility for interest rate hikes.
“The disappointing 210,000 gain in non-farm payrolls in November suggests the labor market recovery was faltering even before the potential impact of the new Omicron variant, possibly as a result of the rising infection rates in the Northeast and Midwest,” wrote Andrew Hunter, senior US economist at Capital Economics. “Nevertheless, the Fed will still push ahead with its plans to accelerate the pace of its QE taper at this month’s FOMC meeting.” St. Louis Fed President James Bullard commented on the jobs numbers upon their release, saying the economy as measured by GDP has recovered fully and can operate with less policy stimulus, particularly considering the pace at which inflation is running. “These considerations suggest, on balance, that the Federal Open Market Committee should remove monetary policy accommodation,” Bullard said.
President Joe Biden said on November 23 that the administration will tap the Strategic Petroleum Reserve as part of a global effort by energy-consuming nations to calm 2021′s rapid rise in fuel prices. The coordinated release between the US, India, China, Japan, Republic of Korea, and the United Kingdom is the first such move of its kind. The US will release 50 million barrels from the SPR. Of that total, 32 million barrels will be exchanged over the next several months, while 18 million barrels will be an acceleration of a previously authorized sale. US oil dipped 1.9% to a session low of $75.30 per barrel following the announcement, before recovering those losses and moving into positive territory. The contract last traded 2.5% higher at $78.67 per barrel. International benchmark Brent crude stood at $82.31 per barrel, for a gain of 3.2%.
The announcement follows the Biden Administration saying for months that it was looking into the tools at its disposal as West Texas Intermediate crude futures surged to a seven-year high, above $85. Prices at the pump have followed the ascent and are hovering around their highest level in seven years. The national average for a gallon of gas stood at $3.409 on Monday, according to AAA, up from $2.11 one year ago. Crude prices make up between 50% and 60% of what consumers pay to fill up their tanks, AAA said. “The President stands ready to take additional action, if needed, and is prepared to use his full authorities working in coordination with the rest of the world to maintain adequate supply as we exit the pandemic,” the White House said in a statement.
As of November 19, the SPR held 604.5 million barrels spread across four sites, according to the Department of Energy. It takes 13 days after a presidential announcement for the oil to hit the market, the department said. In total, the SPR, which was founded in 1975 after the oil embargo, can hold 727 million barrels. The SPR can be tapped in three ways: a full drawdown to counter a “severe energy interruption,” a limited drawdown of up to 30 million barrels, or a drawdown for an exchange or test sale, according to the DOE. “This is a well-timed move to try and lower oil prices,” John Kilduff, partner at Again Capital, said after the announcement. “This added supply should help to bridge the production shortfall ahead of winter, especially if we get confirmation of meaningful supply, as well, from several of the major Asian consuming nations.”
In August, the Biden administration called on OPEC and its oil-producing allies to boost output in the face of rising energy prices. But the group decided to maintain its previously agreed-upon schedule of raising production by 400,000 barrels per month. In April 2020, the group made the unprecedented decision to remove nearly 10 million barrels per day from the market as the pandemic sapped demand for petroleum products. Other producers, including the US, also curbed production as oil prices plunged to never-before-seen lows. Since then, demand has rebounded while producers have been slow to return oil to the market, which has pushed crude to multiyear highs. “Today marks an official emergence of an ‘anti-OPEC+’, a group of top oil-consuming countries that are taking the supply-side dynamics into their own hands in the unconventional and unprecedented release of strategic petroleum reserves to create artificial looseness in the oil market and deliver a negative blow to oil prices,” said Louise Dickson, senior oil markets analyst at Rystad Energy.
The US and China jolted the United Nations climate summit here with a surprise announcement on November 10, pledging the two countries would work together to slow global warming during this decade and ensure that the Glasgow talks result in meaningful progress. The world’s two biggest greenhouse gas emitters said they would take “enhanced climate actions” tomeet the central goals of the 2015 Paris climate accord, limiting warming to “well below” 2 degrees Celsius (3.6 Fahrenheit) beyond preindustrial levels, and if possible, not to exceed 1.5 degrees Celsius. Still, the declaration was short on firm deadlines or specific commitments, and parts of it restated policies both nations had outlined in a statement in April of 2021. To try to keep those temperature limits “within reach,” Chinese and American leaders agreed to jointly “raise ambition in the 2020s”and said they would boost clean energy, combat deforestation and curb emissions of methane, a potent greenhouse gas.
The US and China, plus other major emitters such as the European Union, have come under fire in recent days for not yet delivering on some of the lofty rhetoric their leaders showcased last week. But many leaders have demonstrated a willingness during COP26 to go further than they have before, as shown by a new draft of the agreement conference president Alok Sharma released barely 12 hours before the US-China declaration came out. The draft, which Sharma said he hoped would be signed by the end of the week, proposed a breakthrough not seen in three decades of U.N. climate negotiations: an explicit acknowledgment that nations must phase out coal-burning faster and stop subsidizing fossil fuels. “It’s fossil fuels that cause climate change,” said Mohamed Adow, director of the Kenya-based think tank Power Shift Africa. “Explicitly mentioning it gets on the path to addressing it.”
Many nations have come under scrutiny at the summit, but few have faced closer examination than the US and China. Speaking before US Climate Change Envoy and former Secretary of State John Kerry at an unannounced news conference, Chinese special climate envoy Xie Zhenhua said that as superpowers, the two countries have a special obligation to work together on keeping the world a peaceful and sustainable place. “We need to think big and be responsible,” Xie said, adding, “We both see that the challenge of climate change is an existential and severe one.” He acknowledged that “both sides recognize there is a gap between the current efforts and the Paris agreement goals.”
Both envoys on November 10 said the joint declaration was a product of nearly three dozen negotiating sessions over the year. While many of those meetings were virtual, US and Chinese diplomats also had face-to-face talks in China, London, and during the Glasgow summit. The declaration also marked a payoff for the men who announced it. John Kerry has spent this year pursuing extensive personal diplomacy, and he has broken with other Biden aides to advocate robust engagement with China on climate issues. Meanwhile, Xie, a veteran Chinese climate negotiator who led his delegation at previous talks in Copenhagen and Paris, came out of retirement to manage China’s climate diplomacy in the run-up to the high-profile talks in Glasgow.
The news drew various reactions, from outright praise to skepticism over whether the agreement would lead to new and concrete action. “Tackling the climate crisis requires international cooperation and solidarity, and this is an important step in the right direction,” UN Secretary-General António Guterres tweeted. “This is a challenge which transcends politics,” tweeted the EU’s top climate envoy, Frans Timmermans. “Bilateral cooperation between the two biggest global emitters should boost negotiations at #COP26.” Manish Bapna, president of the Natural Resources Defense Council, agreed that having the US and China on the same page on climate change trumps having them at odds. But, he added in a statement, if the world is to meet the goals it set six years ago in Paris, “we urgently need to see commitments to cooperate translate into bolder climate targets and credible delivery.”
China and the US, which together account for about 40 percent of the world’s emissions, are central to any international accord on climate change. The two nations have joined forces before with outsize influence, most notably when President Barack Obama and Chinese President Xi Jinping forged a similar partnership a year before the Paris climate accord, helping to make that landmark pact a reality.
The US Economy and job market snapped back in October, with nonfarm payrolls rising more than expected while the unemployment rate fell to 4.6%, the Labor Department reported on November 5. Nonfarm payrolls increased by 531,000 for the month, compared with the Dow Jones estimate of 450,000. The jobless rate had been expected to edge down to 4.7%. Private payrolls were even stronger, rising 604,000 as a loss of 73,000 government jobs pulled down the headline number. October’s gains represented a sharp pickup from September, which gained 312,000 jobs after the initial Bureau of Labor Statistics estimate of 194,000 saw a substantial upward revision in the report.
The numbers helped allay concerns that rising inflation, a severe labor shortage, and slowing economic growth would tamp down jobs creation. “This is the kind of recovery we can get when we are not sidelined by a surge in Covid cases,” said Nick Bunker, economic research director at job placement site Indeed. “If this is the sort of job growth we will see in the next several months, we are on a solid path.” Markets rallied strongly on the news, with the Dow up nearly 350 points in early trading and government bond yields mostly lower.
The critical leisure and hospitality sector led the way, adding 164,000 as Americans ventured out to eating and drinking establishments and went on vacations again as COVID numbers fell during the month. For 2021, the sector has reclaimed 2.4 million positions lost during the pandemic. Other sectors posting solid gains included professional and business services (100,000), manufacturing (60,000), and transportation and warehousing (54,000). Construction added 44,000 positions while health care was up 37,000 and retail added 35,000. Wages increased 0.4% for the month, in line with estimates, but rose 4.9% on a year-over-year basis, reflecting the inflationary pressures that have intensified through the year. The average workweek edged lower by one-tenth of an hour to 34.7 hours.
The unemployment rate drop came with the labor force participation rate holding steady at 61.6%, still 1.7 percentage points below its February 2020 level before the pandemic declaration. That represents just shy of 3 million fewer Americans considered part of the workforce and is reflective of ongoing concerns about staffing levels. “While the strength of employment was an encouraging sign that labor demand remains strong, labor supply remains very weak. The labor force rose by a muted 104,000, which is not even enough to even keep pace with population growth,” said Michael Pearce, senior US economist at Capital Economics. However, one metric that the Federal Reserve watches closely, the participation rate among so-called prime-age workers 25 to 54, ticked higher to 81.7%.
Treasury Secretary Janet Yellen weighed in on the report with a Twitter thread in which she said the administration’s aggressive fiscal policies that have pumped in more than $5 trillion to the economy helped stave off more dire consequences from the pandemic. “Bold fiscal policy works,” Yellen wrote. “A rebound like this was never a foregone conclusion. When our administration took office back in January, there was a real risk that our economy was going to slip into a prolonged recession. Now our recovery is outpacing other wealthy nations’.”
The report comes amid heightened concerns about the state of the labor market, particularly a chronic shortage that has left companies unable to fill positions to scale back production and cut hours of operation. Companies have been increasing wages and adding other incentives as the working share of the potential labor force operates well below its pre-pandemic level. Since adding more than a million jobs in July, the labor market had slowed sharply through the rest of the summer, with sizeable letdowns in August and September as economists greatly overestimated growth in both months. However, revisions showed that the numbers for those months were not quite as dismal. Along with the boost from September’s initial count, August’s final reading came up another 117,000 to 483,000.
The House vote followed a day of wrangling over how to enact the two planks of the party’s agenda. The push-and-pull exemplified party leaders’ months-long struggle to get progressives and centrists, who have differing visions of the government’s role in the economy, behind the same bills. Democrats entered the day planning to pass both the infrastructure legislation and the party’s larger $1.75 trillion social safety net and climate package. A demand from a handful of centrists to see a Congressional Budget Office estimate of the social spending plan’s budgetary effects delayed its approval. Progressives sought assurances the holdouts would support the bigger proposal if they voted for the infrastructure bill. After hours of talks, and a call by President joe Biden into a progressive caucus meeting urging lawmakers to back the infrastructure bill, the party’s liberal wing got assurances from centrists that they would support the larger package.
Congressional Progressive Caucus Chair Congresswoman Pramila Jayapal (D-WA) said the group reached a deal to back the infrastructure plan in exchange for a commitment to take up the safety-net bill “no later than the week of November 15.” A group of five centrists separately issued a statement saying they would back the Build Back Better legislation pending a CBO score that assuages their concerns about long-term budget deficits.
In a statement after the House vote, President Joe Biden said the legislation would “create millions of jobs, turn the climate crisis into an opportunity, and put us on a path to win the economic competition for the 21st Century.” He also noted that the procedural vote on the second Democratic bill will “allow for passage of my Build Back Better Act in the House of Representatives the week of November 15th.” The bills together make up the core of President Biden’s domestic agenda. Democrats see the plans as complementary pieces designed to boost the economy, jolt the job market, provide a layer of insurance to working families and curb climate change.
President Joe Biden and Democrats have looked for a signature achievement they can point to on the 2022 midterm campaign trail as the president’s approval ratings flag. President Biden will welcome the developments, as House passage of the bill followed a strong October jobs report and approval of Pfizer’s Covid vaccine for 5-to-11-year-olds in the US. While President Biden could sign the infrastructure bill soon, the safety net and climate package will likely take weeks longer. The House will have to wait for a CBO score. The Senate may pass a different version of the plan, which would require another House vote. Senate Majority Leader Chuck Schumer has set a Thanksgiving target to pass the larger Democratic bill.
Despite much bipartisan support, many Democrats considered the infrastructure bill inadequate because it did not address issues including child care, pre-K education, Medicare expansion, and the enhanced child tax credit. Those policies, priorities for President Joe Biden and top Democrats, made it into the House version of the social safety net bill. Democratic leaders tied the proposals together in an effort to keep centrists and progressives on board with both plans. A thorny legislative process has unfolded for months as Democrats try to get disparate groups with varied visions of the federal government’s role in the economy to back both packages.
The Senate gave overwhelming bipartisan approval on August 11 to a $1 trillion infrastructure bill to rebuild the nation’s deteriorating roads and bridges and fund new climate resilience and broadband initiatives, delivering a key component of President Joe Biden’s agenda. The vote, 69 to 30, was uncommonly bipartisan. The yes votes included Senator Mitch McConnell of Kentucky, the Republican leader, and 18 others from his party who shrugged off increasingly shrill efforts by former President Donald Trump to derail it. “This historic investment in infrastructure is what I believe you, the American people, want, what you’ve been asking for for a long, long time,” President Biden said from the White House as he thanked Republicans for showing “a lot of courage.” Senator McConnell, who publicly declared that his priority was stopping the Biden agenda, said in a statement that “I was proud to support today’s historic bipartisan infrastructure deal and prove that both sides of the political aisle can still come together around common-sense solutions.” The measure faces a potentially rocky and time-consuming path in the House, where Speaker Nancy Pelosi and a majority of the nearly 100-member Progressive Caucus have said they will not vote on it unless and until the Senate passes a separate, even more ambitious $3.5 trillion social policy bill this fall. That could put the infrastructure bill on hold for weeks, if not months.
The recently passed infrastructure bill is one of the largest passed by the Senate in recent years. It would be the largest infusion of federal investment into infrastructure projects in more than a decade, touching nearly every facet of the American economy and fortifying the nation’s response to the warming of the planet. Funding for the modernization of the nation’s power grid would reach record levels, as would projects to manage climate risks. Hundreds of billions of dollars would go to repairing and replacing aging public works projects. With $550 billion in new federal spending, the measure would provide $65 billion to expand high-speed internet access; $110 billion for roads, bridges, and other projects; $25 billion for airports; and the most funding for Amtrak since the passenger rail service was founded in 1971. It would also renew and revamp existing infrastructure and transportation programs set to expire at the end of September.
Its success, painstakingly negotiated largely by a group of Republican and Democratic Senators in consultation with White House officials, is a vindication of President Joe Biden’s belief that a bipartisan compromise was possible on a priority that has long been shared by both parties, even at a moment of deep political division. “This is what it looks like when elected leaders take a step toward healing our country’s divisions rather than feeding those very divisions,” Senator Kyrsten Sinema (D-AZ), a key negotiator, said before the bill’s passage. Senator Rob Portman (R-OH), said that “everyone involved in this effort can be proud of what this body is achieving today — the Senate is doing its job.”
With a bipartisan victory pocketed, Democrats turned immediately to a more partisan venture, a second social policy package that would fulfill the remainder of their spending priorities. The Senate’s $3.5 trillion social policy budget, which is expected to pass along party lines later in the week, will allow Senate committees to draft legislation packed with policies to address climate change, health, education, and paid family and medical leave, and pass it over the threat of a filibuster. It will also include tax increases and is expected to generate unanimous Republican opposition. “Despite this long road we’ve taken, we have finally, finally reached the finish line,” said Senate Majority Leader Chuck Schumer (D-NY). But, directing his comments to colleagues eager to take up unaddressed priorities, he added, “We are moving on to a second track, which will make a generational transformation.”
The Senate vote capped a grueling, months-long negotiation between the Biden administration and Senators in both parties over the scope and size of an infrastructure bill. After an abbreviated effort to work with Senator Shelley Moore Capito (R-WV), on a plan that could win backing from Republican leaders, President Joe Biden turned his focus to a group of 10 moderate Republicans and Democrats who had helped strike the compromise that paved the way for a postelection pandemic relief package in December. The Senators and top White House officials spent weeks debating how to structure and finance the legislation over late-night meals, virtual meetings, and phone calls. Even after the group triumphantly announced an outline in June, it took a month to translate that framework into legislation. Along the way, the effort appeared on the brink of collapse, after it failed a test vote in the Senate and former President Donald Trump sniped at it from the sidelines, trying to persuade Republicans that they would pay a steep political price for supporting it.
“When we have more people on both sides of the aisle who want to do things in a partisan way, as opposed to figuring out how we can work together, I don’t think that’s in the best interests of the country,” Senator Jeanne Shaheen (D-NH), one of the key negotiators, said in an interview. “It was really important for the continued relationships within the Senate that are so important to getting things dome. Negotiators were particularly bedeviled by the question of how to pay for their plan. Republicans declared that they would not support any legislation that raised taxes and rejected a proposal to beef up IRS enforcement against tax cheats, and Democrats ruled out raising user fees for drivers.
Democrats and President Joe Biden, who had initially proposed a $2.3 trillion infrastructure plan, made significant concessions. The package includes far less funding than they had wanted for lead pipe replacement, transit, and clean energy projects, among others. To finance what remained, analysts said the government would most likely have to borrow heavily. On August 5, the Congressional Budget Office said the legislation would add $256 billion to the deficit over 10 years, contradicting the claims of its authors that their bill would be fully paid for. That is nearly half of the new spending in the legislation, which includes a patchwork of measures purported to raise revenue to pay for it, including repurposing unspent pandemic relief funds, more tightly regulating cryptocurrency and delaying carrying out a Trump-era rule that would change the way drug companies can offer discounts to health plans for Medicare patients.
The infrastructure bill also carries major policy changes. It amounts to a tacit, bipartisan acknowledgment that the country is ill-prepared for a worsening climate. Billions of dollars would be invested in projects to protect homes from weather calamities, move vulnerable communities out of harm’s way and support new approaches to countering climate change. It also includes $73 billion to update the nation’s electricity grid so it can carry more renewable energy, $7.5 billion to construct electric vehicle charging stations, $17.5 billion for clean buses and ferries, and $15 billion for removing lead pipes. The agreement targets critical resources toward underserved communities, although not as much as President Joe Biden had requested. It would direct $1 billion over five years, slightly more than half of it in new federal funding, to a program to help reconnect communities divided by highway construction, as well as millions of dollars to help improve access to running water in tribal and Alaska Native communities.
The infrastructure bill also includes money to restore lakes across the country, $66 billion in new funding for Amtrak, and more funding for programs intended to provide safe commutes for pedestrians. It also creates a $350 million pilot program for projects that reduce collisions between vehicles and wildlife. The bill dedicates an increasing amount each year for grants to clean up drinking water by removing lead-contaminated pipes and making other infrastructure upgrades. The legislation reserves at least $25 million per year for “small and disadvantaged communities.” In the days before the measure passed, senators engaged in a last-ditch attempt to allow some exemptions to strict tax regulations on cryptocurrency brokers that had been included in the original bill, after pushback from senators in both parties. But without agreement on other amendments, negotiators ultimately failed to secure unanimous consent to make those changes.
Despite the fact that the infrastructure bill passed the Senate by a decent margin, legislation faces a tricky path in the House, where House Speaker Nancy Pelosi has repeatedly said she will not take it up until the Senate clears the reconciliation bill. The House has also passed its own infrastructure bill, which includes more money for climate change mitigation and nearly $5.7 billion to pay for 1,473 home district projects, or earmarks, that the House Transportation and Infrastructure Committee vetted. A handful of moderate Democrats have urged House Speaker Pelosi to avoid delaying a stand-alone vote on the bipartisan agreement. But leaders of the Congressional Progressive Caucus, in a letter to Pelosi, warned that a majority of its 96 members confirmed they would withhold their support for the legislation until the second, far more expansive package cleared the reconciliation process in the Senate.
Job growth in the US rose in July at its fastest pace in nearly a year despite fears over the Coronavirus Delta variant and a tightening labor supply, the Labor Department reported on August 6. Nonfarm payrolls increased by 943,000 for the month while the Unemployment rate dropped to 5.4%, according to the Bureau of Labor Statistics. The payroll increase was the best since August 2020. Most economists expected 845,000 new jobs and a headline unemployment rate of 5.7% for July, thus the overall jobs gains exceeded their expectations. However, estimates were diverse amid conflicting headwinds and tailwinds and an uncertain path ahead for the economy. Additionally, average hourly earnings also increased more than expected, rising 0.4% for the month and are up 4% from the same period a year ago, at a time when concerns are increasing about persistent inflationary pressures. “The data for recent months suggest that the rising demand for labor associated with the recovery from the pandemic may have put upward pressure on wages,” the BLS said in the report, though it cautioned that the Coronavirus impact is still skewing data and wage gains are uneven across industries.
The drop in the US unemployment rate looked even stronger considering that the labor force participation rate ticked up to 61.7%, tied for the highest level since the pandemic hit in March 2020. A separate calculation that includes discouraged workers and those holding jobs part-time for economic reasons fell even further, to 9.2% from 9.8% in June. As has been the case for the past several months, leisure and hospitality led job creation, adding 380,000 positions, of which 253,000 came in bars and restaurants. The sector took the hardest hit during the pandemic but showed consistent gains during the economic reopening.
The July jobs numbers come amid a surge of new Coronavirus cases in the US and around the world, with the most severe illnesses happening in states with larger unvaccinated populations such as Alabama, Louisiana, Florida, Texas, and Missouri. The increase has raised fears that it could slow economic activity in a recovery that began in April 2020 and has shown resilience despite the periodic flareups of Covid cases. At the same time, the US is fighting a continuing battle with a scarcity of labor. Job placement site Indeed estimated there were 9.8 million job openings as of July 16, far more than the 8.7 million considered unemployed. In a survey of 5,000 job seekers, however, the amount of those citing health concerns as a reason for not looking for a job declined, with a growing number citing a lack of need due to a financial cushion as the top response.
Since the Coronavirus pandemic began in March of 2020, the US unemployment rate has remained elevated, peaking at 14.8% in April of 2020. Though the unemployment rate has tumbled roughly 9% since the pandemic began, it remains well above the 3.5% prior to the crisis. Federal Reserve policymakers have vowed to keep ultra-easy monetary policy in place until they see stronger signs of full employment, though that may risk higher inflation in the long term. Overall, the improving economic picture in the US shows that the economic policies implemented by the Biden Administration are working as intended and will allow the US to emerge from the Coronavirus pandemic in a relatively strong position.
The US Economyadded 379,000 jobs in February, roundly beating economists’ estimates of 210,000, and indicating that one year into the Coronavirus pandemic, the labor market is finally showing signs of recovery. In the first full monthly employment report under President Joe Biden, the unemployment rate fell to 6.2 percent, from 6.3 percent in January, according to data released Friday by the Bureau of Labor Statistics. “The ship is pointed in the right direction, and the additional stimulus coming from Congress should be the wind in the sails to get the economy back on track,” said Charlie Ripley, Senior Investment Strategist for Allianz Investment Management. The latest jobs report comes after a month of stumbles in the Coronavirus vaccine deployment and frigid weather that plunged Texas and large parts of the South into a deep freeze that froze oil rigs, ruptured household plumbing, and cost lives. The January jobs report, which showed just 49,000 jobs were added, was revised upwards on Friday to 166,000. Although the economy has been adding jobs, those gains mask the extent to which the labor market is still being held back, and the number of people who have been sidelined for a diverse array of reasons, from child care obligations to health concerns to a lack of job opportunities in fields still devastated by the pandemic.
Although monthly job gains have surged and ebbed wildly over the past year, an overarching pattern of slowing employment gains worries labor market observers. “The unemployment rate itself is a bad descriptor of the current labor market conditions,” said Andrew Stettner, a senior fellow at the Century Foundation. Dan North, chief economist, North America at Euler Hermes, said that although nearly 60 percent of the jobs lost since the onset of the pandemic have been recovered, the labor force participation rate shows another story. “When you go and look at the participation rate, we’ve recovered about 41 percent of what was lost — so it is slower,” he said. The discrepancy arises because of how the government tallies who has a job, and who is actively looking for a job. People are not captured by the official unemployment rate if they have dropped out of the labor force. “There’s a lower participation rate because people have left. That’s the disconnect,” North said. Federal Reserve Chair Jerome Powell said last month that the nation’s real unemployment rate is closer to 10 percent, and the flagging labor force participation rate, which was 63.4 percent in February 2020, when unemployment was at just 3.5 percent, reflects that.
While college-educated people lost proportionately fewer jobs over the course of the pandemic and have regained more of them, people who graduated high school but never obtained a college degree have not been so lucky. “Lower-paid workers, lower-educated workers … they’ve been left behind. They’ve got skills that haven’t been developed, and we’re all less wealthy because of that,” said Bob Phillips, co-founder of Spectrum Management Group. Women, and particularly young women, have lost ground, an observation noted by the Fed’s Powell as well as other officials as a stumbling block that could impede a broader economic rebound. “Women are staying at home because of the school situation, so that is a really significant change that Covid has brought about and will probably stick with us for a while, I think — schools are only slowly opening up,” North said.
Nonfarm payrolls rose by a lower than expected 661,000 in September, and the unemployment rate was 7.9%, the Labor Department said on October 2 in the final jobs report before the November election. Economists surveyed had been expecting a net job gain of 800,000, and the unemployment rate to fall to 8.2% from 8.4% in August. The payrolls miss was mainly due to a drop in government hiring as at-home schooling continued, and Census jobs fell. “The issue is momentum, and I think we’re losing it,” said Drew Matus, chief market strategist for MetLife Investment Management. “When you go through a significant disruption to the labor market, it takes time to fix itself. That’s without regard to whether there’s a virus.”
The decline in the unemployment rate came with a 0.3 percentage point drop in the labor force participation rate to 61.4%, representing a decline of nearly 700,000. However, a separate, more encompassing measure that counts discouraged workers and those working part-time for economic reasons also saw a notable decline, falling from 14.2% to 12.8%. The unemployment decline for African Americans was even sharper than the headline rate, falling from 13% to 12.1%. The Asian rate declined from 10.7% to 8.9%. Leisure and hospitality led job gains with 318,000 while retail added 142,000 and health care and social assistance increased by 108,000. As expected, government jobs were the biggest drag on the month, losing 216,000 due to a drop in local and state government education as many schools maintained at-home instruction due to the virus. A reduction in Census workers also pulled 34,000 from the total. In other sectors, health care and social assistance gained 108,000, professional and business services contributed 89,000 and the transportation and warehousing sector was up 74,000. Manufacturing grew by 66,000, financial activities added 37,000, and the other services category rose by 36,000. Markets reacted little to the report, with stocks still heading for a lower open following news that President Donald Trump said he and first lady Melania Trump tested positive for Coronavirus.
Despite the deceleration in job creation, there were some positive signs as the economy continues its pandemic-era recovery. Those reporting being on temporary layoff fell by 1.5 million to 4.6 million. Workers holding part-time jobs for economic reasons fell by 1.3 million to 6.3 million, and the totals for longer-term layoffs also decreased considerably. The temporary layoff total peaked at 18.1 million as payrolls fell by 22 million in March and April. However, permanent job losses increased by 345,000 to 3.8 million, in total a 2.5 million increase since February, the month before the World Health Organization declared the Coronavirus pandemic. “Permanent jobs losses rose by more than 300,000. That’s not a good thing. The labor force participation rate declined, which pulled the overall unemployment rate down. That’s not a good sign, either,” said Kathy Jones, head of fixed income at Charles Schwab. “We’re looking at state and local government layoffs, we’re looking at a higher level of permanent job losses and more people leaving the workforce. None of that is good for the long run.”
US Median Household Incomehit a record high in 2019, and the poverty rate fell, according to a government survey released on September 15 that offered a snapshot of the economy before millions of American jobs were destroyed by the Coronavirus pandemic. Census officials cautioned, however, that the Coronavirus pandemic impacted their data collection, which was conducted after lockdowns this year, and may have skewed the results. “Given data-collection challenges during the pandemic, we are concerned about bias in the 2019 estimate,” the census agency officials wrote in a blog post, explaining that lower-income and minority household response to the survey dropped.
The US Census Bureau said in their report that real median household income jumped 6.8% from $64,324 in 2018 to $68,703 last year, the highest since the agency began tracking the data in 1967. It also said the nation’s poverty rate fell last year to 10.5%, a 1.3-percentage-point drop. Another measure of poverty that adjusts for government aid programs for low-income Americans showed a drop to 11.7% last year from 12.8% in 2018. Simultaneously, however, the number of people without health insurance for at least part of the year hit 29.6 million, up 1 million from the year before. The number of uninsured children also grew.
The report offered a look back at the economy’s state before the Coronavirus outbreak hit the US in February and March of this year, shuttering many businesses as the country sought to contain the pandemic. Since then, more than 6.5 million people in the US have contracted the highly contagious virus, and more than nearly 200,000 have died. Vast swaths of the economy were devastated, and 22 million Americans lost their jobs. While activity is now rebounding, economists warn the recovery may be uneven as federal stimulus money runs out with no signs of replenishment. A potential second wave of Coronavirus infections this autumn and winter as people move back indoors also looms large.
President Donald Trump, who had staked his re-election on economic gains before the outbreak, has downplayed the impact of the virus and risk of another wave, as he has urged states to fully re-open. He has also repeatedly touted gains on Wall Street (a narrow gauge of economic performance) and pledged to rebuild the economy if he wins a second term. His Democratic rival in the Presidential election, former Vice President Joe Biden, has said the gains since Coronavirus emerged have been notched and have left many segments of the working population still reeling.
The US Economyadded around 1.4 million jobs last month, reflecting a slow return to labor market growth, according to data released on September 4 by the Bureau of Labor Statistics. The unemployment rate fell into the single digits for the first time since the Coronavirus pandemic began, dropping from 10.2 percent to 8.4 percent (still the highest rate since 2011), the monthly report showed. Before the coronavirus’ stranglehold on the economy, the rate was at 3.5 percent, the lowest since 1970. “Great Jobs Numbers!” President Donald Trump Tweeted after the numbers were released. “1.37 Million Jobs Added In August. Unemployment Rate Falls To 8.4% (Wow, much better than expected!). Broke the 10% level faster and deeper than thought possible.”
Great Jobs Numbers! 1.37 Million Jobs Added In August. Unemployment Rate Falls To 8.4% (Wow, much better than expected!). Broke the 10% level faster and deeper than thought possible.
The August data indicates a halting recovery of the more than 22 million jobs lost since March, with July’s revised total of 1.73 million gains and June’s addition of 4.8 million positions. “We have had three huge months of job gains, but so far have regained less than half of the losses in March and April,” said Dan North, senior economist at Euler Hermes North America. “Job gains so far have probably been the easy ones to get, where a business opened back up and brought back in its employees.” The payrolls report is the first one issued since the CARES Act expired, along with its $600 in additional weekly unemployment benefits. Lawmakers continue to debate the finer points of a further coronavirus fiscal aid package, with some Republicans expressing concern that the “generous” unemployment stipend acts as a deterrent to those who would otherwise be attempting a return to the workforce. The Federal Reserve noted in its most recent Beige Book on economic conditions that businesses who were looking to add employees found “day care availability, as well as uncertainty over the coming school year and jobless benefits” were the main factors impeding rehirings.
The August jobs snapshot comes on the heels of a decline in weekly initial jobless claims that showed 881,000 people filed for first-time unemployment benefits last week. While down from the Coronavirus pandemic peak of almost 7 million, it still indicates an elevated level far above the previous average of 200,000 claims a week. Layoff announcements have ramped up in recent days, with airlines warning of tens of thousands of layoffs as government aid expires, and Paycheck Protection Program funds dwindle for many business owners. The sluggish pace of economic recovery hit the stock market after a slew of disappointing economic data sparked a sell-off that included many of the highly valued tech stocks that have driven the market to multiple record highs since the pandemic began. Apple alone lost $180 billion on September 3, the biggest one-day loss on record for any company. In addition to the jobs report, the Labor Department issued a projection that the pace of job gains over the next decade would slow considerably, predicting that just 6 million new jobs would be created during the period of 2020-29. While that growth rate does not include the impact from the coronavirus, it does note that the virus is likely to create “new structural changes to the economy.”
At his Bedminster, New Jersey golf resort on August 10, President Donald Trumpsigned four executive actions to provide economic relief amid the coronavirus pandemic. The actions amount to a stopgap measure, after failing to secure an agreement with Congress. The three memorandums and one executive order called for extending some enhanced unemployment benefits, taking steps to stop evictions, continuing the suspension of student loan repayments, and deferring payroll taxes. President Trump promised that funds would be “rapidly distributed” to Americans in need, although it remains unclear whether the president has the authority to do certain steps unilaterally, without congressional approval. In any case, legal challenges are expected, which could delay any disbursement of funds.
In one memorandum, President Donald Trump authorized the federal government to pay $300 per week for people on unemployment. States would be asked to pay an additional $100, for a total of $400 weekly for unemployed workers. “If they don’t, they don’t. That’s up to them,” President Trump said when asked what happens if governors don’t have the funds available. “The states have money. It’s sitting there.” The previous enhanced unemployment benefits, which added $600 a week to standard state unemployment benefits, expired at the end of July. The text of the memorandum calls for up to $44 billion of federal funds for the benefits to come from the Department of Homeland Security’s Disaster Relief Fund. The White House said states could use funding from the March Coronavirus relief package, the CARES Act, to fund their portion of the benefits. Given the current number of Americans unemployed, those disaster funds would likely last only a handful of weeks.
In an executive order calling to minimize evictions, President Donald Trump directed various federal agencies to make funds available for temporary financial assistance to renters and homeowners facing financial hardship caused by the Coronavirus. “It’s not their fault that this virus came into our country,” he said of renters and homeowners. “It’s China’s fault.” That order also directs the Department of Health and Human Services and the Centers for Disease Control and Prevention to consider whether measures to temporarily halt residential evictions for failure to pay rent “are reasonably necessary to prevent the further spread of COVID-19” from one state to another. A federal moratorium on evictions expired on July 24, allowing landlords to begin issuing 30-day notices to vacate their properties. It is estimated that the temporary ban on evictions covered more than 12 million renters, preventing them from being pushed out of their homes even if they could not pay rent.
President Donald Trump also extended relief for student loan borrowers. Student loan interest rates were cut to zero earlier this year, and students could suspend payments through September. President Trump directed the secretary of education to extend the relief through the end of the year and said an additional extension is likely. And a fourth action defers payroll tax collection for workers earning less than $100,000 a year, beginning September 1. “This will mean bigger paychecks [for a time] for working families, as we race to produce a vaccine and eradicate the China virus once and for all,” Trump told reporters. Trump said the “payroll tax holiday” would last through the end of the year but could be made permanent if he is reelected. The connection to November’s election wasn’t subtle. “If I’m victorious on Nov. 3, I plan to forgive these taxes and make permanent cuts to the payroll tax. I’m going to make them all permanent,” Trump said, then turning to jab congressional Democrats and his opponent, former Vice President Joe Biden. “So they will have the option of raising everybody’s taxes and taking this away. But if I win, I may extend and terminate. In other words, I will extend it beyond the end of the year and terminate the tax. And so, we’ll see what happens.”
Both congressional Democrats and Republicans alike opposed this payroll tax proposal when President Donald Trump was trying to get them to include it in the coronavirus relief package. Payroll taxes fund Medicare and Social Security, and this deferral won’t do anything to help the millions of Americans currently unemployed. Trump is likely doing this through the same mechanism that allowed taxpayers to put off filing their taxes until July 15 this year, says Andrew Rudalevige, a professor at Bowdoin College who specializes in presidential executive actions. “The Treasury secretary is authorized to delay the deadline for any action required under tax law up to one year,” said Rudalevige, in the case of a federally declared disaster, and all states are currently operating under one because of the pandemic. “So payroll tax payments could under this provision be delayed. But not forgiven — those taxes are still owed.” There are already significant concerns about the long-term solvency of the popular social safety net programs. Reducing payroll taxes would hasten those problems.
President Donald Trump’s actions come after weeks of talks between Republicans and Democrats on Capitol Hill over the next round coronavirus relief. As of August 8, they were still far from reaching an agreement. Democratic Senate Minority Leader Chuck Schumer and House Speaker Nancy Pelosi responded to President Trump’s executive actions on August 9, calling them “unworkable, weak and narrow policy announcements.” In a statement, they called for Republicans to return to negotiations.
The US Economy added another 1.8 million jobs in July, a sharp slowdown from June and a small step for an economy that is still down almost 13 million jobs since the start of the Coronavirus pandemic. It was the third straight month of improvement after the spring lockdown that decimated the labor market, and the July job gain exceeded economists’ expectations. Even so, it was far fewer than the 4.8 million jobs added in June. The unemployment rate fell to 10.2%, the Bureau of Labor Statistics reported August 9 but remains above the recent highs of 10% that were recorded in November of 1982 and October of 2009.
Overall, the most recent jobs report presented a mixed picture, and economists are still trying to come to grips with how the labor market is behaving in this unparalleled situation. For example, the number of people working part-time rose by 803,000 to 24 million in total in July. The government defines part-time work as anything under 35 hours per week. “We added more jobs than most people expected, but the gains really were disproportionately part-time workers,” said Kate Bahn, economist, and director of labor market policy at the Washington Center for Equitable Growth. “To me that means even if workers are coming back it’s to jobs that pay less, and families will be worse off.” Meanwhile, the unemployment rate fell in all demographic groups. The rate remains by far the highest for Black workers at 14.6%, which is concerning, Bahn said. “Research from previous downturns suggests that Black workers are the most likely to be displaced,” she added. Then there are seasonal adjustments, which are based on historical trends in the job market, but because the pandemic is unlike any other moment in history, they are distorting the data at the moment. Without seasonal adjustments, only 591,000 jobs were added in July.
One positive sign in this jobs report is the number of permanent job losses: it was more or less flat from June at 2.9 million. This might not sound exciting, but it would have been very bad news for the recovery had the number gone up. “Granted still more than double from before the crisis, but we’ll take the one-month reprieve,” said Daniel Zhao, senior economist at Glassdoor. Since the Coronavirus pandemic hit, the government has struggled to count the enormous number of people who are out of work. That’s in part because it has been increasingly difficult for workers themselves to discern whether they have been temporarily laid off or employed but not at work. The share of misclassified responses was smaller in June and July than in the months before, the BLS said. Including the misclassified workers, the July unemployment rate would have been about one percentage point higher than reported.
The reopening of the economy and a resurgence in Coronavirus infections in some states, paired with business and individuals running out of federal aid, has created a unique set of conditions for the jobs market. A survey from Cornell University showed that 31% of workers who were recently rehired have lost their jobs for a second time during the pandemic. Another 26% have been told that they might get laid off again. Meanwhile, the Federal Reserve Bank of St. Louis said states with more Coronavirus cases since June also registered the weakest employment recovery. This was most notably true for Arizona, Florida, California, and Texas.
The August 9 jobs report comes during tense times in Washington, as Republicans and Democrats are butting heads over the next stimulus bill. One point of contention is the government’s boost of unemployment benefits. The CARES act provided a weekly boost of $600 to regular jobless aid. But this provision ran out on July 31. Now Congress is arguing about how to proceed: Democrats want to keep the $600 weekly supplement for the rest of the year, while Republicans want to cut it to $400 a week. For millions of Americans, the benefit expansion contributes a large portion of their income at the moment, so cutting it could hamper the recovery. At the same time, some economists believe that too much unemployment aid actually keeps people from returning to work. The question is what is too much aid during an economic crisis of unprecedented proportions.
The US Economy contracted at a 32.9% annual ratefrom April through June, its worst drop on record, the Bureau of Economic Analysis said on July 30. Business ground to a halt during the pandemic lockdown inbeginnign in early March of 2020, and America plunged into its first recession in 11 years, putting an end to the longest economic expansion in US history and wiping out five years of economic gains in just a few months. A recession is commonly defined as two consecutive quarters of declining gross domestic product, the broadest measure of the economy. Between January and March, GDP declined by an annualized rate of 5%. But this is no ordinary recession. The combination of public health and economic crises is unprecedented, and numbers cannot fully convey the hardships millions of Americans are facing. In April alone, more than 20 million American jobs vanished as businesses closed and most of the country was under stay-at-home orders. It was the biggest drop in jobs since record-keeping began more than 80 years ago. Claims for unemployment benefits skyrocketed and have still not recovered to pre-pandemic levels. While the labor market has been rebounding since some states began to reopen, bringing millions back to work, the country is still down nearly 15 million jobs since February.
The Coronavirus pandemic pushed the US economy off a cliff. The second-quarter GDP drop was nearly four times worse than during the peak of the 2007-2010 financial crisis, when the economy contracted at an annual rate of 8.4% in the fourth quarter of 2008. Quarterly GDP numbers are expressed as an annualized rate. This means that the economy did not actually contract by one-third from the first quarter to the second. The annualized rate measures how much the economy would grow or shrink if conditions were to persist for 12 months. Not annualized, GDP declined by 9.5% between April and June, or by $1.8 trillion. But by either measure, it was still the worst quarter on record. The US only began keeping quarterly GDP records in 1947, so it is difficult to compare the current downturn to the Great Depression. Earlier recorded quarterly declines also pale in comparison to this year. Between April and June of 1980 (the start of the 1980-82 recession), the economy contracted at an annual rate of 8% on the heels of rising oil prices and restrictive monetary policy to control inflation. Additionally, in early 1958, GDP declined by an annualized 10%, as production slowed and high-interest rates put an end to the post-World War II expansion. The downturn followed the Asian flu pandemic of 1957, which killed 116,000 people in the US, according to the Center for Disease Control.
In response to the Coronavirus pandemic shutdown, the US government has deployed trillions of dollars in monetary and fiscal stimulus to help the country through the recession. Loan programs for companies, expanded unemployment benefits, and checks sent directly to many Americans were designed to get the economy back on track as quickly as possible. Economists predict the current, third quarter of the year will witness a sharp upswing, with the Federal Reserve Bank of New York, for example, forecasting an annualized 13.3% jump between July and September. While that would be good news, it does not mean the crisis is over. Earlier this week, the Fed extended its various lending programs through the end of the year to help business and market functioning. The central bank’s main street lending facility that is geared at small and medium-sized companies became operational only in mid-June, three months after the lockdown began.
President Donald Trumpannounced regulatory changes to the National Environmental Policy Act on July 15, a change that will speed up approval of federal projects such as mines, highways, water infrastructure, and gas pipelines, effectively weakening what’s considered to be a landmark conservation law. President Trump announced the implementation of the newly revised regulations in Georgia at the UPS Hapeville Airport Hub, which is set to benefit from the expedited review of a highway expansion project that will allow the hub’s operations to be more efficient. Trump claimed that “mountains and mountains of red tape” slowed the approval and development of infrastructure projects, but added that “all of that ends today.” “Today’s action completely modernizes the environmental review process under the National Environmental Policy Act of 1969. We are cutting the federal permitting timeline … for a major project from up to 20 years or more … down to two years or less,” Trump said, later adding that at “the same time, we’ll maintain America’s gold standard environmental protections.”
President Donald Trump announced his administration’s plans to rewrite the NEPA regulations in January, saying at the time that the existing regulations “(led to) endless delays, waste money, keep projects from breaking ground and deny jobs to our nation’s incredible workers. The administration claims the change will speed up the process for getting environmental reviews approved that are required for major infrastructure projects. “You spend three, four, five years on the environmental review before you ever break ground. That’s a problem,” Environmental Protection Agency administrator Andrew Wheeler said in an interview with Gray TV. Environmental advocacy groups view the policy change as another example of the Trump administration dismantling important conservation safety guards that protect the environment and public health from pollution. The change “drastically curtails environmental reviews for thousands of federal agency projects nationwide, a move that will weaken safeguards for air, water, wildlife, and public lands,” the Center for Biological Diversity, an advocacy group, said in a statement responding to the decision.
NEPA, signed into law in 1970 by President Richard Nixon, is considered one of the foundational environmental laws formed at the beginning of the modern environmental movement. Rolling back this policy “may be the single biggest giveaway to polluters in the past 40 years,” according to Brett Hartl, Center for Biological Diversity government affairs director. “The Trump administration is turning back the clock to when rivers caught fire, our air was unbreathable, and our most beloved wildlife was spiraling toward extinction. The foundational law of the modern environmental movement has been turned into a rubber stamp to enrich for-profit corporations, and we doubt the courts will stand for that,” Hartl said in a statement. Environmental advocacy groups such as the National Resource Defense Council Inc. and the Sierra Club believe that the change will harm minority communities more than others. “NEPA gives a voice to communities whose health and safety would be threatened by destructive projects, and it is despicable that the Trump administration is seeking to silence them,” Sierra Club executive director Michael Brune said in a statement. “As the country faces a global pandemic and grapples with persistent racial injustice, the last thing communities need is an attack on this bedrock environmental and civil rights law.” In contrast, Mike Sommers, the President and CEO of the American Petroleum Institute, which represents America’s oil and natural gas industry, said in a statement that the regulatory changes are “essential to US energy leadership and environmental progress, providing more certainty to jumpstart not only the modernized pipeline infrastructure we need to deliver cleaner fuels but highways, bridges and renewable energy.”
President Donald Trump on July 14 signed legislation and an executive order that he said will hold China accountable for its oppressive actions against the people of Hong Kong, then quickly shifted his speech in the Rose Garden into a campaign rally-style broadside against Democratic rival Joe Biden. The legislation and order are part of the Trump administration’s offensive against China for what he calls unfair treatment by the rising Asian superpower, which hid details about the human-to-human transition of the Coronavirus. The almost daily administration broadsides against China come as Trump is defending his response to the virus, despite a surge in Coronavirus cases, in the US and as he works to portray Joe Biden, the presumptive Democratic nominee, as weak on China. “So Joe Biden and President Obama freely allowed China to pillage our factories, plunder our communities and steal our most precious secrets,” Trump said, adding, “I’ve stopped it largely.” Trump added: “As vice president, Biden was a leading advocate of the Paris Climate accord, which was unbelievably expensive to our country. It would have crushed American manufacturers while allowing China to pollute the atmosphere with impunity, yet one more gift from Biden to the Chinese Communist Party.”
During his address, President Donald Trump Trump did not limit his criticism of Joe Biden to China. He delivered broadside after broadside against Biden on issues from energy to the economy, education, to immigration. Aides have pushed the president to go more negative on Biden, whom President Trump has largely spared from attacks, save for the “Sleepy Joe” nickname. Trump has gone after Biden far less aggressively than he did against his 2016 opponent, Hillary Clinton. Trump, once more, talked up his own tough approach to Beijing, though he spent the early weeks of the pandemic praising Chinese President Xi Jinping, in hopes of securing a new trade deal. But since the two nations signed phase one of the trade deal, the talks have stalled with virtually no hope of restarting before the November election.
The legislation President Donald Trump signed into law targets police units that have cracked down on Hong Kong protesters as well as Chinese Communist Party officials responsible for imposing a new, strict national security law widely seen as chipping away at Hong Kong’s autonomy. The mandatory sanctions are also required to be imposed on banks that conduct business with the officials. Lawmakers from both parties have urged President Trump to take strong action in response to China’s new national security law that erodes the “one country, two systems” framework under which the UK handed Hong Kong over to China in 1997. Hong Kong is considered a special administrative region within China and has its own governing and economic systems. “This law gives my administration powerful new tools to hold responsible the individuals and the entities involved in extinguishing Hong Kong’s freedom,” Trump said. “Their freedom has been taken away. Their rights have been taken away, and with it goes Hong Kong in my opinion because it will no longer be able to compete with free markets. A lot of people will be leaving Hong Kong, I suspect.”
The House of Representatives on July 1 passed a $1.5 trillion infrastructure bill that would sharply increase Infrastructure spending on roads and transit, push for deep reductions in pollution, direct billions to water projects, affordable housing, broadband and schools, and upgrade hospitals and US Postal Service trucks. House Speaker Nancy Pelosi (D-CA) said Democrats were making good on a promise to rebuild America with “green, resilient, modern and job-creating infrastructure,” adding that the Moving Forward Act “shows that everything in our country is connected, from the education of our children to the technologies of the future to the road map to get there.” The bill is meant, in part, to address the expiration in September of a law authorizing spending on highways, transit, and other transportation programs. Backers, including Transportation Committee Chairman Peter DeFazio (D-OR), said the bill represents an ambitious, years-in-the-making push to buttress and expand aging infrastructure in a sustainable way. The bill’s passage “is proof that finally, there is a majority of us in Congress who won’t accept the status quo and instead are willing to fight for a new vision” that puts “millions of people to work in jobs that cannot be exported, while harnessing American-made materials, ingenuity, and innovation,” DeFazio said.
House Republicans objected to the bill’s concentration on reducing carbon pollution and slammed the process that resulted in what they dismissed as the “My Way or the Highway” bill. Pelosi is seeking to “heap an irresponsible amount of debt onto our children instead of seeking market-driven, collaborative, bipartisan solutions to improve our infrastructure,” said Congressman Sam Graves (R-MO) the ranking Republican on the House Transportation Committee. The bill passed largely along party lines after days of debate and amendments, with three Republicans voting yes and two Democrats casting no votes. The bill now goes to the Senate, where it drew immediate criticism from Majority Leader Mitch McConnell (R-KY). “House Democrats appear addicted to pointless political theater,” McConnell said. “So naturally, this nonsense is not going anywhere in the Senate. It will just join the list of absurd House proposals that were only drawn up to show fealty to the radical left.” Senator John Barrasso (R-WY), chairman of the Environment and Public Works Committee, which passed a narrower, bipartisan transportation bill last July, called the House bill “a road to nowhere” and urged the House to “get serious about infrastructure.”
If the full Senate passes transportation or other combined infrastructure bill, Congress could move to create a conference committee to seek to reconcile the diverging visions, congressional aides said. Or they could try to come to an agreement on a temporary extension of the five-year transportation law, known as the Fast Act, that expires in September, though members from both parties say they oppose such a move. Either would be complicated further by broad differences over how such infrastructure should be paid for, a disconnect that has stymied many plans in recent years, despite widespread bipartisan and popular support for addressing infrastructure needs.
The US economyadded a record 4.8 million jobs in June, according to federal data released on July 2, but a surge in new Coronavirus infections and a spate of new closings threatens the nascent recovery. Two key federal measurements showed the precarious place the economy finds itself in three and a half months into the pandemic as the country struggles to hire back the more than 20 million workers who lost their jobs in March and April. While companies have continued to reopen, a large number of Americans are finding their jobs are no longer available. The unemployment rate in June was 11.1 percent, the Bureau of Labor Statistics said, down from a peak of 14.7 percent in April but still far above the 3.5 percent level notched in February. And another 1.4 million Americans applied for unemployment insurance for the first time last week and more than 19 million people are still receiving unemployment benefits, stubbornly high levels that show how many people are struggling to find or keep work. The Congressional Budget Office said the Coronavirus pandemic gave such a shock to the labor market that it would not fully recover for more than 10 years.
President Donald Trump touted the jobs that were added at a news conference called shortly after they were released, saying they were a sign that “America’s economy is now roaring back to life like nobody has ever seen before.” “All of this incredible news is the result of historic actions my administration has taken,” President Trump said. But his top aides acknowledged there was still a long way to go. “There is still a lot of hardship, and a lot of heartbreak, in these numbers,” National Economic Council Director Larry Kudlow said. “I think we have a lot more work to do.” The stock market initially rose on the news, with the Dow Jones industrial average rising 400 points, or 1.5 percent, before retreating. It closed up 92 points on the day.
Economists called the 4.8 million jobs added encouraging, saying they were a sign that the massive financial incentives that Congress passed appeared to have succeeded at stanching even greater job loss. But the good news came with a couple of significant asterisks: It was gathered the week of June 12, when the country was reporting less than 25,000 new cases a day, not the current average of more than 40,000 that has sent new closures and shutdowns cascading across states and counties. “The pandemic pushed us into a very deep economic hole,” said Mark Zandi, chief economist at Moody’s Analytics. “We can certainly fall back.” The more than 14.7 million people who are still out of work have left the country with an unemployment rate higher than any point during the Great Recession. The unemployment insurance data, based on statewide claims that are separate from the survey that informs the jobs report, paints an even less sanguine picture: Last week was the 15th straight where unemployment claims exceeded 1 million, a sign that the economic recovery has not taken hold for many Americans.
The data bring into sharper focus the turmoil facing the US economy after many businesses sent workers home in March during the beginning of the spike in deaths caused by the virus. Many companies began rehiring in May and June, but there are signs that some workers are getting laid off for the second time in just a few months. Many Americans remain employed but are working drastically reduced schedules, more than 9 million workers reported working part-time because of economic reasons, more than double the level in February before the pandemic. Still, a participation rate of 61.5 percent in June, slightly up from April and May but nearly a percentage point below February, indicates that others may be leaving the labor force altogether, an echo of the deep economic turbulence in the Great Recession. Economists said there are other reasons to be concerned as incentives for businesses to retain employees and some benefits that have allowed people out of work to stay afloat financially are winding down without more federal action.
Federal and state officials struggled to time their reopening efforts in April and May, in some cases ignoring warnings from public health officials. Now, cases in some of the states that reopened the fastest, or with the loosest restrictions, are seeing the biggest spikes, such as Florida, Arizona, and South Carolina. In recent days, Texas shut down all bars just weeks after they had reopened. California announced the closure of bars and indoor dining in 19 counties, more than 70 percent of the state. And at least nine other states have slowed or reversed their reopenings. Restaurant bookings have begun to sink in hard-hit states such as Florida, Texas, and Arizona. Job postings on the Indeed website, though up from a low of 39 percent, are still down 24 percent from last year.
The American economy defied forecasts for a Depression-style surge in Unemployment this week, signaling the economy is picking up faster than anticipated from the coronavirus-inflicted recession amid reopenings and government stimulus. A broad gauge of payrolls rose by 2.5 million in May, trouncing forecasts for a sharp decline following a 20.7 million decrease during the prior month that was the largest in records back to 1939, according to Labor Department data released on June 5. The figures were so astonishing that President Donald Trump held a news conference, where he called the numbers “outstanding” and predicted further improvement before he is up for re-election in November. While the overall picture improved, there remain several underlying issues facing the economy. For example, 21 million Americans remain unemployed with a jobless rate higher than any other time since 1939, indicating a full recovery remains far off with many likely to suffer for some time. And the return to work is uneven, with unemployment ticking up among African Americans to 16.8%, matching the highest since 1984, even as unemployment rates declined among white and Hispanic Americans. That comes amid nationwide protests over police mistreatment of African-Americans, which have drawn renewed attention to race-based inequality.
The latest figures may give a boost to President Donald Trump, who has siginficantly fallen behind Democratic challenger Joe Biden in polls amid dissatisfaction with his response to the pandemic and the death of George Floyd. The numbers could also reduce pressure on policy for another round of fiscal support, with Democrats and Republicans at odds over the timing and scope of new measures following record aid approved by Congress. “The only thing that can stop us is bad policy, like raising taxes and the Green New Deal,” President Trump said on June 5. He also said that he will ask Congress to pass more economic stimulus, including a payroll tax cut.
One caution noted by the US Labor Department is that the unemployment rate “would have been about 3 percentage points higher than reported,” so 16.3% if data were reported correctly, according to the agency’s statement. That refers to workers who were recorded as employed but absent from work due to other reasons, rather than unemployed on temporary layoff. The broader U-6, or underemployment rate, which includes those who have not searched for a job recently or want full-time employment, fell only slightly to 21.2% in May from 22.8%, which is its highest rate since 1982. In February, it was 7%, with the main unemployment rate at a half-century low of 3.5%.
On May 15, the House of Representatives passed a $3 trillion tax cut and spending bill aimed at addressing the devastating economic fallout from the growing Coronavirus outbreak by directing huge sums of money into all corners of the economy. The Trump Administration and Senate Republicans have decried the measure’s design and said they will cast it aside, leaving uncertain what steps policymakers might take as the economy continues to face severe strains. The sweeping legislation, dubbed the “Heroes Act, passed 208-199. Fourteen Democrats defected and opposed the bill, reflecting concerns voiced both by moderates and liberals in the House Democratic caucus about the bill’s content and the leadership-driven process that brought it to the floor. The bill won support from just one Republican, Congressman Peter King of New York, generally regarded as a relatively moderate Republican. House Speaker Nancy Pelosi (D-CA) pushed forward despite the divisions in her caucus and Republican opposition, arguing that the legislation will put down a marker for Democrats’ priorities and set the stage for negotiations on the next bipartisan relief bill. Americans “are suffering so much, in so many ways. We want to lessen their pain,” Pelosi said during the House floor debate. “Not to act now is not only irresponsible in a humanitarian way, it is irresponsible because it’s only going to cost more, more in terms of lives, livelihood, cost to the budget, cost to our democracy.”
As Washington scrambled to deal with the growing impact of the coronavirus pandemic earlier this year, the Trump administration, state governments, local officials, and businesses took steps to send many Americans home as a way to try to contain the contagion. This led to a mass wave of layoffs that began more than two months ago and has continued every week since, particularly as Americans have sharply pulled back spending. Congress has passed four bipartisan coronavirus relief bills that have already cost around $3 trillion to try to blunt the economic fallout. While Republicans and Trump administration officials agree that more action will be necessary at some point, many say it’s time to pause and see how the programs already funded are working before devoting even more federal funds to the crisis as deficits balloon. “The president has said he would talk about state and local aid, but it cannot become a pretext for bailing out blue states that have gotten themselves into financial trouble, so while he’s open to discussing it he has no immediate plans to move forward,” White House press secretary Kayleigh McEnany said, adding, “The Pelosi bill has been entirely unacceptable.”
In a reflection of clashing priorities that might make it difficult to come to an agreement on additional relief legislation, White House National Economic Council Director Larry Kudlow floated slashing the 21 percent corporate tax rate in half for companies that return operations to the United States from overseas, a dramatic change that drew immediate opposition from Democrats. President Donald Trump has also called for a payroll tax cut and new legal liability protections for businesses in any future legislation, policies that have already been rejected by Democrats, and, in the case of the payroll tax cut, some Republicans as well. President Trump himself is pushing for the economy to reopen as quickly as possible and said recently that he’s in “no rush” to sign off on additional spending.
This video by CaspianReport presents an overview of the Chinese Belt and Road Initiative Project. In 2013, Chinese President Xi Jinping announced the launch of both the Silk Road Economic Belt and the 21st Century Maritime Silk Road, two ambitious infrastructure development and investment initiatives that would stretch from Eastern Asia to Western Europe. The project, termed as either the Belt and Road Initiative (BRI) or the New Silk Road, is one of the most ambitious infrastructure projects ever conceived. Some analysts see the project as an extension of China’s rising power on the global stage. Additionally, the US is concerned that the BRI could be a Trojan horse for China-led regional development, military expansion, and the decline in the bilateral global order implemented by the US over the past few decades. Here is an analysis of the BRI project.
The original Silk Road came into being during the westward expansion of China’s Han Dynasty (206 BCE–220 CE), which forged trade networks throughout what are today the Central Asian countries of Afghanistan, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan, as well as modern-day India and Pakistan to the south. Those routes extended more than four thousand miles to parts of the Middle East such as present-day Iran, Saudi Arabia, Egypt, and into parts of Europe including modern-day Italy, Greece, Spain, and Portugal. Central Asia was thus the epicenter of one of the first waves of globalization, connecting eastern and western markets, spurring immense wealth, and intermixing cultural and religious traditions. Use of the route peaked during the first millennium, under the leadership of first the Roman and then Byzantine Empires, and the Tang Dynasty (618–907 CE) in China. With the advent of the Crusades in the 11th Century, as well as the conquering of China by the Mongols during the 13th Century, the old Silk Road trade routes began to lose much influence and their decline in influence and use economically isolated Central Asian countries from each other.
President Xi Jinping first announced the BRI during visits to Kazakhstan and Indonesia in 2013. The plan was two-pronged: the overland Silk Road Economic Belt and the Maritime Silk Road. The two were collectively referred to first as the One Belt, One Road initiative but eventually became the Belt and Road Initiative. Xi’s vision included creating a vast network of railways, energy pipelines, highways, and streamlined border crossings, both westward, through the mountainous former Soviet republics, and southward to Pakistan, India, and the rest of Southeast Asia. Such a network would expand the use of Chinese currency, while new infrastructure could “break the bottleneck in Asian connectivity,” according to Xi. In addition to physical infrastructure, China plans to build numerous economic zones, modeled after the Shenzhen Special Economic Zone, which China launched in 1980 during its economic reforms under leader Deng Xiaoping. Xi subsequently announced plans for the 21st Century Maritime Silk Road at the 2013 summit of the Association of Southeast Asian Nations (ASEAN) in Indonesia. To accommodate expanding maritime trade traffic, China would invest in port development along the Indian Ocean, from Southeast Asia all the way to East Africa.
China’s overall ambition for the BRI is staggering. As of early 2019, more than sixty countries, accounting for nearly 70% of the world’s population, have signed on to projects or indicated an interest in doing so. Analysts estimate the largest so far to be the $68 billion China-Pakistan Economic Corridor, a collection of projects connecting China to Pakistan’s Gwadar Port on the Arabian Sea. Additionally, the trade and infrastructure development agreements between China, Iran, and Russia constitute a major part of the BRI initiative. In total, China has already spent an estimated $200 billion on such efforts. It has been predicted that China’s overall expenses over the life of the BRI could reach over $1 trillion by 2027, though estimates on total investments vary.
China has both geopolitical and economic motivations behind the BRI. President Xi Jinping has promoted a vision of a more assertive China and sees China’s rise as an opportunity to end the US-dominated world stage. Additionally, China’s economic growth has declined somewhat in recent years, which has put pressure on the country’s leadership to open up new markets for its goods and excess industrial capacity. International observers see the BRI as one of the main planks of Chinese statecraft under Xi, alongside the Made in China 2025 economic development strategy.
The BRI is also seen as a Chinese response to a renewed US focus on Asia, launched by the Obama administration in 2011. Many in China read this as an effort to contain China by expanding US economic ties in Southeast Asia. In a 2015 speech, retired Chinese General Qiao Liang described the BRI as “a hedge strategy against the eastward move of the US.” At the same time, China was motivated to boost global economic links to its western regions, which historically have been neglected. Promoting economic development in the western province of Xinjiang, where separatist violence has been on the upswing, is a major priority, as is securing long-term energy supplies from Central Asia and the Middle East, especially via routes the US military cannot disrupt.
Despite the overwhelming success of the BRI thus far, there have been some roadblocks preventing its full implementation. While several developing countries in need of new roads, railways, ports, and other infrastructure have welcomed BRI investments enthusiastically, the initiative has also stoked opposition, particularly related to the costs associated with the project in relation to the overall GDPs and resources of many of the developing nations that have expressed interest in signing onto the project. Additionally, some BRI investments have required the use of Chinese firms and their bidding processes have lacked transparency. As a result, contractors have inflated costs, leading to canceled projects and political pushback.
Several major world powers have also expressed some concern regarding the implementation of the BRI project. For example, Indian Prime Minister Narendra Modi argued that the BRI is an embodiment of a “String of Pearls” geoeconomic strategy whereby China creates unsustainable debt burdens for its Indian Ocean neighbors and potentially takes control of regional choke points. Additionally, the US government under both Presidents Barack Obama and Donald Trump have argued that the BRI represents a major threat against continued American hegemony and power and have responded to the BRI with proposals ranging from the Trans-Pacific Partnership to the BUILD Act. Despite much US opposition to the BRI, some international observers argue that the implementation of the project may benefit the US in a number of ways. For example, Jonathan Hillman of the Center for Strategic and International Studies stated that the US could use BRI projects as a way to have China pay for infrastructure initiatives in Central Asia that are also in the interest of the US.
President Donald Trump backed off his plan to impose tariffs on all Mexican goods and announced through Twitter on June 7 that the US had reached an agreement with Mexico to reduce the flow of migrants to the Southwestern border. President Trump tweeted the announcement only hours after returning from Europe and following several days of intense and sometimes difficult negotiations between American and Mexican officials. Trump’s threat that he would impose potentially crippling tariffs on the US’ largest trading partner and one of its closest allies brought both countries to the brink of an economic and diplomatic crisis, only to be yanked back from the precipice nine days later. The threat had rattled companies across North America, including automakers and agricultural firms, which have built supply chains across Mexico, the US, and Canada.
I am pleased to inform you that The United States of America has reached a signed agreement with Mexico. The Tariffs scheduled to be implemented by the U.S. on Monday, against Mexico, are hereby indefinitely suspended. Mexico, in turn, has agreed to take strong measures to….
Business leaders in the US, Mexico, and Canada had warned that the Trump Administration’s proposed tariffs would increase costs for American consumers, who import a whole host of goods ranging from automobiles to appliances from Mexico, and prompt retaliation from the Mexican government in the form of new trade barriers that would damage the US economy. But the trade war ended before it began, forestalling that economic reckoning and an intraparty war that President Donald Trump had created by threatening tariffs to leverage immigration policy changes. Trump’s tactic had drawn protests from Republicans, including many Senators who have long opposed tariffs and worried the measure would hurt American companies and consumers. In an unusual show of force against their own party’s President, Republican Senators had threatened to block the tariffs if President Trump moved ahead with them, and had demanded a face-to-face meeting with Trump before any action. For Mexico, Trump’s threat was a replay of past episodes in which he ranted about the country’s lack of immigration enforcement. This year, he threatened to shut down the entire Southwestern border, backing off only after aides showed him evidence that Mexican authorities were taking aggressive action to stop migrants.
According to a US-Mexico Joint Declaration distributed late on June 7, Mexico agreed to, “take unprecedented steps to increase enforcement to curb irregular migration,” including the deployment of its national guard throughout the country to stop migrants from reaching the US. The declaration, distributed by the State Department, said Mexico had also agreed to accept an expansion of a Trump administration program that makes some migrants wait in Mexico while their asylum claims are heard in the US. “The United States looks forward to working alongside Mexico to fulfill these commitments so that we can stem the tide of illegal migration across our southern border and to make our border strong and secure,” Secretary of State Mike Pompeo said in a statement. But the declaration by the two countries included an ominous warning, as well, stating that if Mexico’s actions “do not have the expected results,” additional measures could be taken. The declaration said the two countries would continue talking about other steps that could be announced within 90 days to increase enforcement to curb irregular migration,” including the deployment of its national guard throughout the country to stop migrants from reaching the US.
Black Friday sales this year revealed a major trend in favor of online retailers, perhaps signaling the end of traditional “big box” retailers as we know them today.
More shoppers turned to the internet for deals to kick off the holiday shopping season as opposed to shopping at traditional retail stores, data released on November 24 revealed. Black Fridaypulled in $6.22 billion in online sales, up nearly 24% percent from a year ago and set a new record high, according to Adobe Analytics, which tracks transactions for 80 of the top 100 internet retailers in the US including Walmart and Amazon. These figures arrived as many retailers have pushed big digital deals, days in advance of the holiday weekend.
The Friday after Thanksgiving this year was also the first day in history to see more than $2 billion in sales stemming from smartphones, said Adobe. The group found ~34% of e-commerce sales Friday came from mobile devices, compared with ~29% in 2017. “Retailers have done their part of building better mobile experiences for consumers and turning nearly 10 percent more smartphone visitors into buyers this Black Friday versus last,” said Taylor Schreiner, director of Adobe Digital Insights. With regards to actual smartphone sales this Black Friday, smartphones using Droid OS outsold Apple iPhones by nearly 10%, perhaps signaling a significant decline in Apple’s overall share of the smartphone market.
Buy online pick up in stores continues to be a popular option for shoppers this holiday season, with “click-and-collect” orders up 73% from Thursday to Friday. Target, Kohl’s, Kmart and Walmart are just a few companies that have been touting that option this year, hoping that when customers arrive to pick up their items, they will buy more items as well. Earlier in the week, sales online Thanksgiving Day totaled $3.7 billion, up 28% from a year ago, making it the fastest-growing day for e-commerce sales in history. Thursday also saw $1 billion in sales from smartphones, with shoppers spending 8% more online Thursday compared with a year ago.
For the first time, online prices Thanksgiving Day “were as low as on Black Friday,” potentially stealing some of Black Friday’s traditional crowds of shoppers at malls and other stores. There were reports that traffic at many shopping malls Friday was lighter than in past years. Instead, more consumers turned to their phones or desktop computers to grab bargains. Kohl’s said it has a record day for online sales this Thursday, with Cyber Monday still to come. Adobe is expecting Cyber Monday sales online to set a new record of $7.8 billion, up nearly 18% from last year.
On November 23, the US government released a long-awaited report stating the effects of global warming and climate change in the US are worsening and that the potential for irreversible environmental damage is steadily increasing. The report’s authors, who represent numerous federal agencies, say they are more certain than ever that climate change poses a severe threat to Americans’ health and pocketbooks, as well as to the country’s infrastructure and natural resources. And while it avoids policy recommendations, the report’s sense of urgency and alarm stands in stark contrast to the lack of any apparent plan from President Trump to tackle the problems, which, according to the government he runs, are increasingly dire.
The Congressionally mandated document, the first of its kind issued during the Trump administration, details how climate-fueled disasters and other types of worrisome changes are becoming more commonplace throughout the country and how much worse they could become in the absence of efforts to combat global warming. The report notes that Western mountain ranges are retaining much less snow throughout the year, threatening water supplies below them. Coral reefs in the Caribbean, Hawaii, Florida and the Pacific territories administered by the US are experiencing severe bleaching events. Wildfires are devouring ever-larger areas during longer fire seasons. And the country’s sole Arctic state, Alaska, is seeing a staggering rate of warming that has upended its ecosystems, from once ice-clogged coastlines to increasingly thawing permafrost tundras.
The National Climate Assessment’s publication marks the government’s fourth comprehensive look at climate change impacts on the US since 2000. The last came in 2014. Produced by 13 federal departments and agencies and overseen by the U.S. Global Change Research Program, the report stretches well over 1,000 pages and draws more definitive, and in some cases more startling, conclusions than earlier versions. The authors argue that global warming “is transforming where and how we live and presents growing challenges to human health and quality of life, the economy, and the natural systems that support us.” And they conclude that humans must act aggressively to adapt to current impacts and mitigate future catastrophes “to avoid substantial damages to the U.S. economy, environment, and human health and well-being over the coming decades.” “The impacts we’ve seen the last 15 years have continued to get stronger, and that will only continue,” said Gary Yohe, a professor of economics and environmental studies at Wesleyan University who served on a National Academy of Sciences panel that reviewed the report. “We have wasted 15 years of response time. If we waste another five years of response time, the story gets worse. The longer you wait, the faster you have to respond and the more expensive it will be.”
That urgency is at odds with the stance of the Trump administration, which has rolled back several Obama-era environmental regulations and incentivized the production of fossil fuels. President Trump also has said he plans to withdraw the nation from the Paris climate accord and questioned the science of climate change just last month, saying on CBS’s “60 Minutes” that “I don’t know that it’s man-made” and that the warming trend “could very well go back.” Furthermore, as the Northeast faced a cold spell this week, Trump tweeted, “Whatever happened to Global Warming?” This shows a misunderstanding that climate scientists have repeatedly tried to correct, a confusion between daily weather fluctuations and long-term climate trends. President Trump did not immediately respond to a request for comment on Friday’s report. However, the administration last year downplayed a separate government report calling human activity the dominant driver of global warming, saying in a statement that “the climate has changed and is always changing.”
In the East, it could be the COLDEST New Year’s Eve on record. Perhaps we could use a little bit of that good old Global Warming that our Country, but not other countries, was going to pay TRILLIONS OF DOLLARS to protect against. Bundle up!
This video by CaspianReport discusses “Saudi Vision 2030,” a plan proposed by the government of Saudi Arabia that seeks to reduce the countries dependence on oil, diversify its growing economy, and develop public service industries such as health, education, infrastructure, recreation, and tourism. The goals of the plan include reinforcing economic and investment activities, increasing non-oil industry trade between countries through consumer goods, and increasing government spending on the military. The details of the plan were first announced on April 25, 2016, by Crown Prince Mohammad bin Salman (MbS), and the Council of Ministers has tasked the Council of Economic and Development Affairs with identifying and monitoring the mechanisms and measures crucial for the implementation of “Saudi Arabia’s Vision 2030.”
The main rationale behind the Saudi Vision 2020 plan is to decrease the dependence that the Saudi economy has on oil revenues. The oil industry comprises close to 50% of Suadi Arabia’s total GDP, and the Saudi government has sought to decrease its reliance on oil revenues since the 1970s with an overall poor track record of success. The core priority of the Saudi government is to be able to develop more alternative sources of revenue for the government such as taxes, fees and income from the sovereign wealth fund. Another significant proposal is to lower the dependency of the citizens of the country on public spendings such as spending on subsidies and higher salaries and to increase the portion of the economy contributed by the private sector to provide more employment opportunities and to provide growth in the GDP.
Suadi Vision 2020 has three main pillars: the status of the country as the “heart of the Arab and Islamic worlds,” the determination to become a global investment powerhouse, and to transform the country’s location into a hub connecting three of the most influential areas of the world (Western Asia, Europe, and Africa). The plan is supervised by a group of people employed under the National Center for Performance Measurement, the Delivery Unit, and the Project Management Office of the Council of Economic and Development Affairs. The National Transformation Program was designed and launched in 2016 across 24 government bodies to enhance the economic and development center
Saudi Vision 2030 is built around four major themes which set out specific objectives that are to be achieved by 2030. The four themes are:
A vibrant society: urbanism, culture and entertainment, sports, Umrah, UNESCO heritage sites, life expectancy.
A thriving economy: Employment, women in the workforce, international competitiveness, Public Investment Fund, Foreign direct investment, the private sector, non-oil exports
An ambitious nation: Non-oil revenues, government effectiveness, and e-government, household savings and income, non-profits and volunteering.
Projects: About 80 major projects are to be developed in Saudi Arabia by the year 2030. Most of these projects are financed by the Public Investment Fund of Saudi Arabia.
One such project that is part of the Saudi Vision 2030 is the National Transformation Program. First approved on June 7, 2016, the National Transformation Programa sets out the goals and targets to be achieved by the Kingdom by 2020. It is the first out of three phases each lasting for five years. Each step will accomplish a certain number of goals and targets that will eventually help the Kingdom in reaching the ultimate goals of Vision 2030. To assist the Kingdom of Saudi Arabia to finance all the projects to be developed and facilitate the process of achieving the goals and targets of Vision 2030, Crown Prince Mohammad bin Salman announced in early 2016 that an IPO of Saudi ARAMCO is going to take place. However, only 5% of the company will be offered on the stock market. Other projects put forward under the Saudi Vision 2030 plan are the construction of a luxury resort located on the Red Sea between the cities of Umluj and Al-Wajh, the expansion of the Saudi entertainment industry, and the expansion of women’s rights. In the realm of women’s rights, the Saudi Vision 2030 plan seeks to grant women the right to vote, own property, travel abroad freely, and attend higher education facilities.
Overall, the international reaction to the Saudi Vision 2030 plan has been somewhat mixed. Many critics argue that the lack of formal political institutions, inefficient bureaucracy and a significant gap between the labor force required by the Saudi labor market and current educational system serve as a hindrance on many of the growth prospects that the country has proposed. Other critics argue that the Saudi Vision 2030 plan does not take into account the fact that rapid reform efforts may not be entirely accepted by the Saudi population, and that a slow and gradual reform plan would be a more viable policy to implement. Despite some criticism towards the reform proposals, many international observers feel that it represents a genuine opportunity for the Saudi government to reform and create a far more positive view on the country in the eyes of the international community.
In the third chapter of the book “Democratization: theory and experience,” Laurence Whitehead looks at the concept of civil society and its relationship to democratization. If democracy is to be viewed as a complex and open-ended process, a more explanatory account is needed to describe it more effectively. Before a democratic transition can begin, there must exist a political community receptive to such change and willing to participate in a democratic system. The ideas of civil society and social capital provide condensed analogies to explain the structure of and simplify the ideas regarding the long-term changes that stem from democratization. Instead of focusing on political actors and what they seek to accomplish, political theorists should instead focus on the large-scale and broadly-based features of the entire political community.
Laurence Whitehead then goes on to highlight the factors that help to define the idea of civil society. Theorists of civil society have seen more success in erasing its highly specific origins and have converted it into a free-standing category of thought that comes to mind when Westerners make comparative statements about the density of associative life in diverse political communities. Additionally, most non-Western discourses tend to lack an equivalent concept to the idea of civil society. Even though some argue that non-governmental organizations can be considered to be civil societies, they tend to lack the surrounding ethos, authenticity, and autonomy that are considered to be hallmarks of civil societies. Moreover, non-governmental organizations also lack the well-structured support from the larger community that civil societies often have. The definition of civil society also excludes associations such as households, religious institutions, and hierarchical institutions such as conscripted military forces and the bureaucracy of national government. Between such extremes, there may be an independent sphere of voluntary association in which interactions are governed by the principles of autonomy and self-respect.
Laurence Whitehead also considers the factors that characterize stronger civil societies. Strong civil societies are characterized by a wider set of boundaries for interaction between individuals in society and by a larger acceptance of personal freedom and individual rights. As such, a strong civil society will allow for a greater chance for democracy to be successful and long-lasting despite challenges. Even if people reach an agreement on the factors that allow for the successful implementation of civil society, the results of their agreement will not be quantitative and more descriptive in nature. The idea of a descriptive category, according to Whitehead, is akin to an “empty box,” as there are not previously existing theories within it. As such, people can apply their own theories in interpretations regarding the political process. Additionally, such factors raise the question of how an “empty box” descriptive category shape such dynamic and long-term political process such as democratization. Any linkage between both factors would require both a description and an explanation of how the norms of civility can be compelling enough to reproduce over generations and override the loyalty demands of the state and the primary descriptive groups.
After going over some of the theoretical approaches to the idea of civil society, Laurence Whitehead goes over what would be a tentative definition of the concept of civil society. If groups such as terrorist organizations, armed paramilitary groups, and criminal organizations are not to be defined as being members of civil society, Whitehead highlights the need to stipulate a general definition of civil society that highlights the importance of civility. According to Whitehead, civil society is defined as a set of self-organized intermediary groups that are relatively independent of both public authorities and private units of reproduction and production, can discuss collective actions in the defense and promotion of their interests, do not seek to replace state agents or private reproducers or to accept responsibility for governing the polity as a whole, and agree to act within pre-established legal guidelines. Additionally, Whitehead states that civil society rests on four different conditions. The first two conditions are that of dual autonomy and collective action. The next two conditions are non-usurpation and civility. The definition of civil society tends to exclude criminal organizations and paramilitary groups and any organizations that threaten individual rights.
Laurence Whitehead next looks at the idea of civility and incivility. Following such a definition of civil society, it is unlikely that political scientists will find forms of voluntary associative organizations distributed evenly throughout the geographical and social terrain that is covered by the modern nation-state. Whitehead argues that neither the market or the state can be effectively used to even out the uneven social geography that is present throughout the world. The reason why the market is ineffective in evening out social geography because it obeys consumer sovereignty. Additionally, the state cannot solve such issues because its policies are skewed towards societal groups with the highest level of influence. Such factors lead to the question of what mechanism can be used to address the issue of uneven social geography, as civil society will eventually become out of sync with democratic citizenship. The weaknesses of civil society are often evident in many of the newer democracies. For example, efforts at democratization in many post-authoritarian countries are often overshadowed by antisocial forms of individualism that substitute the forms of civil associationalism favored by civil society theorists. Thus, the main advantages of civil society tend to be highly concentrated among a minority of the people in many of the new democracies.
The dynamic between civil society and democratic citizenship is also addressed by Laurence Whitehead. Civil society tends to develop unevenly over time in a logic distinct from state formation. The resulting patterns of associative life and social communication typically emerge as highly structured with insiders, traditional favored sectors, and excluded sectors. Additionally, new democracies often only work effectively if they can restrain such exclusionary tendencies and indulge the people with the most social capital to adapt to a broader and longer-term view of their civic engagement in society. Even though civil society developed incrementally, modern political regimes are often created quickly and with short notice. Examples of political regimes created abruptly include the new nations created Europe after World War One, Asia and Africa during the 1950s and 1960s, and the democracies created in the wake of the collapse of the Soviet Union during the late 1980s. In all cases, formal political equality was established at a specific moment and the citizens earned a full set of democratic rights even though the creation of exclusionary political societies did not coincide with pre-existing maps of associative life between the citizenry.
Civil society may also experience slow growth that eventually allows for the creation of the conditions favorable to democracy. Examples of the gradual development of civil society include Great Britain during the 17th Century and Spain during the 1970s. Additionally, it is also the case that the implementation of a democratic government will foster the development of civil society and create the conditions necessary for its success. Examples include many of the former communist countries and to the experience of many of the former territories of countries such as the US and Great Britain. There also exists the possibility that a civil society attains a high level of development, but never produce a democratic political regime, as in the case of Hong Kong. Moreover, a civil society may develop on the basis that its freedoms and rights can only be secured if there exists a series of exclusionary measures that prevent some members form full participation. Examples include the Palestinian population in Israel, the Cypriot population in Turkey, and African Americans in the Southern part of the US up until the 1960s.
In conclusion, Laurence Whitehead explores the concept of civil society and its role in democratic transitions in “On Civil Society.” Whitehead underscores the importance of political theorists examining the factors that result in the development of strong civil societies that allow for the long-term stability of democratic governments. Additionally, Whitehead goes on to characterize the factors that characterize an effective civil society and the dynamic between civil societies and the expectations of democratic citizenship. An in-depth understanding of the idea of civil society will allow political scientists and political theorists to more effectively understand the factors that allow democratic governments to succeed in certain countries but ultimately fail in others. Moreover, the concept of civil society can be applied to explain potential democratic transitions in countries that a presently authoritarian.
In the book “The Civic Culture: Political Attitudes and Democracy in Five Nations, An Analytic Study,” Gabriel Almond and Sidney Verba present a study of the political culture of democracy and discuss the social structures and processes that help to improve its overall stability. A common concern among political scientists is the future of democracy at the global level. In the years following World War II, events such as de-colonialization have raised some questions about the long-term stability of Democratic political systems and placed the issue into the broader context of the world’s culture. Despite the fact that Almond and Verba feel that the direction of political change at the global level is unclear, they argue that a political culture based upon individual participation will emerge due to demands by ordinary citizens. Additionally, Almond and Verba propose that the emerging nations will be presented with two different models of the participatory state, the democratic and totalitarian models of participation. The democratic model of participation offers the ordinary man the opportunity to take part in the political decision-making process as an influential citizen, whereas the totalitarian offers him the role of the “participant subject.” Both the democratic and totalitarian models of participation have appealed to emerging nations, but it is unclear which one will ultimately win.
According to Gabriel Almond and Sidney Verba, the democratic model of participation will require more than the introduction of formal institutions of democracy such as freedom of speech, an elected legislature, and universal suffrage. A participatory democratic system also requires a consistent political culture. On the other hand, Almond and Verba argue that there are several problems with transferring democratic political culture to emerging nations. The first issue is that many of the leaders in developing states have little experience with the working principles of democratic policy and civic cultures such as political parties, interest groups, and electoral systems. As a result, the idea of democratic policy as conveyed to the leaders of new countries is incomplete and heavily stresses ideology and legal norms as opposed to conveying the actual feeling and attitude towards democratic ideals. A further reason why the diffusion of democracy to new nations is difficult is that they are confronted with structural problems. For example, many of the new nations are entering the global stage at a time in which they have not fully developed industrially. As a result, individual leaders may be drawn to a policy in which authoritarian bureaucracy promotes industrial development and technological advancement, and where political organization becomes a device for human and social engineering.
Gabriel Almond and Sidney Verba then go on to discuss the idea of the civic culture. The civic culture is a mixed set of values that contains attributes from both modern and traditional cultures and allows them to interact and interchange without polarizing and destroying each other. Additionally, Almond and Verba describe the civic culture as pluralistic and based on communication and persuasion, consensus, diversity, and accessibility to gradual political change. Almond and Verba then explore the development of civic culture in Great Britain. One of the circumstances that resulted in the creation of a modern society in Britain was the emergence of a thriving merchant class and the involvement of the court and aristocracy in economic decisions. Moreover, the English Reformation and the increasing prevalence of religious diversity resulted in a higher level of secularization within British society, leading to greater modernization. As a consequence of both factors, Britain entered the 18th Century with independent merchants and aristocrats who established a parliamentary system that made it possible to assimilate rapid social changes without any sharp discontinuities. By establishing a civic culture, ordinary people were able to enter into the political process and develop British democratic structures.
Gabriel Almond and Sidney Verba describe several different types of political cultures. According to Almond and Verba, political culture refers to the overall attitudes that individuals have regarding the political system and their attitudes toward their respective roles in the system. The term political culture is used because it allows Almond and Verba to separate the non-political concepts from their study and allows them to employ an interdisciplinary approach to their analysis of mass attitudes towards democracy. In classifying objects of political orientation, Almond and Verba start with the general political system, which deals with the organization as a whole. In explaining the components of the political system, Almond and Verba distinguish the specific roles or structures, the functions of incumbents, and particular public policies, decisions, or enforcement of decisions. These structures, incumbents, and decisions are then classified by involvement either in the political (input) process, or in the administrative (output) process.
In their study of mass attitudes and values, Gabriel Almond and Sidney Verba have identified three distinct types of political cultures. The first type of political culture mentioned by Almond and Verba is the parochial political culture. A parochial political culture emerges when the citizens of a particular nation have no understanding of the national political system, do not possess any tendency to participate in the input processes and have no consciousness of the output operations. Additionally, there are no specialized political roles within a parochial political culture, and the leadership roles are not separated from their religious and social orientations. Examples of parochial political cultures include African and Native American tribes and indigenous communities within particular nations. A subjective political culture is when people are aware of the mechanism of government and the political process, but are not taught to or are not allowed to participate in the system. Examples of subjective political cultures include traditional monarchies or authoritarian government systems. In a participant political culture, the populace is involved in the decision-making process and more or less has a say in public policy decisions. Examples of participant political cultures include the United States, Great Britain, and many other countries throughout the world. The three different classifications of political culture described by Almond and Verba does not assume that one classification replaces the other. On the other hand, the introduction of new classifications serves as a way to encourage previous political orientations to adapt.
Gabriel Almond and Sidney Verba also mention that a number of political cultures are systematically mixed. A systematically mixed political culture occurs when there are elements of more simple and more complex patterns of political orientations. The first example of a systematically mixed political culture is the parochial-subject culture, which occurs when a majority of the population has rejected the exclusive claims of diffuse tribal, village, or feudal authority and has developed allegiance towards more complex political systems. Examples of parochial-subject political cultures include the Ottoman Empire and the loosely articulated African kingdoms. In a subject-participant culture, a substantial part of the population has acquired the ability and desire to become more engaged in governmental decisions, whereas the rest of the population continue to be oriented toward an authoritarian political structure and have a relatively little desire to get involved in critical public policy decisions. Additionally, a successful shift from a subject to a participant culture requires the diffusion of positive orientations toward a democratic infrastructure, the acceptance of norms of civic obligation, and the development of a sense of civic competence among a substantial proportion of the population. France during the 19th Century and Germany during the early 20th Century are examples of subject-participant political cultures. A parochial-participant political culture occurs when elements of a participatory system are introduced to a traditionally parochial society. As a result of the lack of structure and experiences with democracy, parochial-participant political cultures have the most experiences with instability and teeter back and forth between democracy and authoritarianism.
Gabriel Almond and Sidney Verba focus on the political cultures of five different countries in their study: The United States, Great Britain, Germany, Italy, and Mexico. Almond and Verba selected these countries because they have experienced a wide range of historical and political experiences and have gone through a number of events that influenced their political systems. The United States and Great Britain both represent relatively successful experiments in democratic governance despite the fact that the rationale behind their acceptance of democratic values is different. For example, the political culture in Great Britain combines deference toward authority with a lively sense of the rights of citizen initiatives, whereas the political culture of the United States is based on political competence and participation rather than obedience to legitimate authority. Germany is included because its experiments in democratic governance during the late 19th and early 20th Century never resulted in the development of a participatory political culture necessary to legitimize democratic institutions of government. Almond and Verba include Italy and Mexico in their study because both represent less developed societies with transitional political systems.
Gabriel Almond and Sidney Verba then go on to discuss the feelings towards government and politics that are prevalent in the United States, Great Britain, Germany, Italy, and Mexico. The first metric that they measured was the national factors in which the resident of all five countries were most proud of. A majority (85%) of American respondents cited their political system as the greatest source of pride they feel towards their country. In contrast, only 46% of British, 30% of Mexican, 7% of German, and 3% of Italian respondents cited their governmental institutions as their greatest source of national pride. Moreover, American and British respondents were more likely to refer to public policy accomplishments than the respondents from other countries. The Italian respondents cited their countries contributions to the arts and its cultural treasures, whereas the German respondents cited their countries economic system as the greatest source of national pride. Additionally, Mexican pride was distributed equally between the political and economic systems and the physical attributes of their country.
The findings show that the Americans and British express great pride in their political institutions and thus feel the least alienated towards their political systems. On the other hand, the Germans and Italian respondents express a low level of pride in their political institutions and feel more alienated towards their governments. The results from the Mexican respondents show that they have a keen interest in political involvement despite the fact that their political culture is largely parochial. The fact that Mexican respondents expressed an interest in politics is due to past feelings associated by the populace with events such as the Mexican Revolution. The continued connection to the Mexican Revolution shows that the Mexican people believe that the revolution did not accomplish its stated political goals and that the process of political change is ongoing. When broken down by educational level, a majority of American, British, and Mexican respondents with higher levels of education expressed more pride in their respective political systems. Additionally, the fact that educational attainment does no influence the levels of national pride among the German and Italian respondents further suggests alienation from the political system as opposed to a lack of awareness of the system.
Gabriel Almond and Sidney Verba also go on to explore the expectation of treatment by governmental authorities among the respondents from all five countries. Both Almond and Verba hypothesized that if the respondents expected fair treatment by governmental authorities, they would, in turn, express more support for legitimate authority. The respondents from the United States, Great Britain, and Germany expected a higher level of treatment by governmental authorities than the respondents from Italy and Mexico. Additionally, the expectation of treatment by governmental authorities varies by educational attainment. For example, respondents from the United States, Great Britain, and Germany with higher educational levels expect more equitable treatment by political authorities than respondents with lower levels of education. Even though the number of Italian and Mexican respondents expecting fair and equal treatment in government were relatively low, the differences between the advantaged and less advantaged groups regarding education were larger than in the United States, Great Britain, and Germany. Such findings show that there is a connection between expectations regarding treatment by governmental authorities and alienation from the political system.
The attitudes towards political communication are also discussed by Gabriel Almond and Sidney Verba. A key component of democratic governments is the willingness for ordinary men and women to get involved in the political process. The main factor that influences such willingness is the level of comfort with discussing political issues. Respondents from the United States and Great Britain expressed the highest level of willingness to discuss politics. Additionally, even though German respondents expressed the highest frequency of following reports about public affairs, the number of people who discuss politics on a regular basis was lower than in the United States and Great Britain. On the other hand, the Mexican and Italian respondents expressed a relatively low willingness to discuss political affairs. With regards to the percent of respondents who refused to report their voting decision, the American, British, and Mexican respondents expressed little reluctance when revealing their political choice, whereas the German and Italian respondents expressed the highest level of reluctance. The reluctance on the part of the German and Italian respondents to reveal their voting choices shows that they feel that identifying with a political party is unsafe and inadvisable. Additionally, their unwillingness to reveal their voting choices indicates that there is a higher level of alienation from the political system on the part of the German and Italian respondents when compared to the American, British, and Mexican respondents.
Gabriel Almond and Sidney Verba then discuss the relationship between the civic culture and democratic stability and the impact of political culture on the political system that it belongs to. One view that Almond and Verba discuss is the rationality-activist model, which stipulates that a stable democracy involves the population to be informed and active in politics. Additionally, the rationality-activist model requires the citizens to base their voting choices on careful evaluation and carefully weighing in the alternatives. On the other hand, Almond and Verba mention that current research shows that most citizens in democratic nations rarely live up to the rationality-activist model. As such, Almond and Verba feel that the rationality-activist model is only a part of the civic culture and does not make up its entirety. Moreover, Almond and Verba describe the civic culture as a mixed political culture that involves both citizens who are informed and take an active role in politics and citizens who take a less active role in politics. The diverse nature of the civic culture also implies that the different roles in political such as parochial, subject, and participant do not replace each other and instead build upon each other.
In conclusion, Gabriel Almond and Sidney Verba discuss the idea of the political culture and its relationship to democracy in “The Civic Culture: Political Attitudes and Democracy in Five Nations, An Analytic Study.” A major concern among political scientists is what factors result in the establishment of a political culture that allows for the stability of democracy within a particular country. In their study of political culture, Almond and Verba looked at several factors such as citizen views on government, views on treatment by governmental authorities, and the willingness of people to discuss political issues and the views that respondents from five different democracies have regarding them. The results of their study determined that countries with a long-term history of democratic governance were more likely to have political cultures that foster democratic ideas than countries with a shorter history of democratic government. Additionally, Almond and Verba discuss the relationship between political culture and the long-term stability of democratic political systems.
This video by PressTV presents a review of President Donald Trump’s first full year in office. One year has passed since Donald Trump has been elected US President. Since then, the world has seen a US President unlike any other. One that is aggressive, impulsive, uninterested in politics, and egotistical. Despite coming into office with a grand series of promises to change American politics for the better, the case can be made that the policies pursued by the Trump Administration have changed American politics for the worst. Trump has thus far failed to realize any of his campaign promises, fanned the conspiracy flames regarding his relationship with Russia, contradicted and insulted his staff, and made enemies of allies throughout the world. Additionally, President Trump has attacked the governmental institutions he oversees, threatened to use his powers to ruin the lives of his political opponents, waged war against members of his own party, and engaged in race-baiting, sexism, ableism, and religious bigotry when pursuing his destructive agenda.
One such area in which President Donald Trump left his mark during his first year was his immigration executive order banning (mostly Shi’a Muslim) immigrants, travelers, and refugees from seven majority-Muslim countries (Syria, Iran, Iraq, Yemen, Sudan, Somalia, and Libya). This action ignited a firestorm of protest and revealed the bigoted, white supremacist agenda underlying the Trump Administration’s policies. President Trump also rattled the nuclear-saber more than any other President in US history with his incitement of North Korea, going as far to threaten the North Korean government with “fire and fury.” Many politicians on both sides of the aisle worry that Trump has misused the moral authority surrounding the office of the Presidency through such statements and actions.
President Donald Trump claimed during his first year in office that he has the unilateral authority to order the Justice Department to open or close investigations into his political opponents. Such rhetoric threatens to set a negative precedent in future Administrations that goes directly against the principles of separation of power spelled out in the US Constitution. President Trump’s outreach to autocratic regimes such as Saudi Arabia and Israel further characterized his first year in office. By backing the Saudi Crown Prince Mohammad bin Salman, President Trump has given the green light for Saudi Arabia to escalate its three-year-long intervention in Yemen, which has resulted in the deaths of thousands of innocent people and has encouraged hatred towards Shi’a Muslims throughout the world. Additionally, President Trump’s choice to recognize Jerusalem (“al-Quds” in Arabic) as the capital of Israel has encouraged the Israeli regime to expand its crusade against the Palestinian people.
President Donald Trump also left a negative mark within the realm of international politics and has adopted a firm, neoconservative view regarding the role of the US in the world. President Trump has repeatedly denounced the Iranian nuclear deal, calling it the “worst deal ever negotiated” despite the fact that it was upheld by numerous organizations, most notably the United Nations and International Atomic Energy Agency (IAEA). Additionally, President Trump has proposed a hardliner stance towards Iran, calling it a “terrorist nation” and calling for US military action to remove the current Iranian government from power. These actions on the part of the President have led to many European leaders such as German Chancellor Angela Merkel and French President Emmanuel Macron to rethink their reliance on US political and diplomatic leadership on the world stage.
In terms of domestic policy, President Donald Trump generally has had an abysmal first year in office. Trump failed to follow through on repealing The Patient Protection Affordable Care Act (“Obamacare”) despite the fact that his party controls both houses of Congress, and has relied on Executive Orders more often than any other first-year President in US history. The only true legislative achievements of President Trump’s first year in office are his nomination of Neil Gorsuch to the Supreme Court and the passage of the Tax Cuts and Jobs Act of 2017. Many critics argue that the presence of Neil Gorsuch on the Supreme Court will move the Judicial branch far to the right and have a profound (and what many view as a negative) impact on decisions such as drug policy, women’s rights, abortion, gay rights, and electoral reform. Additionally, nearly all economic organizations point out that the Tax Cuts and Jobs Act is a clear giveaway to the wealthiest 1% and only serve to further the widening income gap between the wealthy and the poor.
Everyone is shocked oil has gone down in the last few years when it was close to $4 a gallon now under $3. Why has gas dropped so low in the US and worldwide?
In the United States under the Obama Administration, an increased amount of “fracking” occurred where they increased domestic production to reduce dependence abroad. The strong U.S. dollar has been the main driver for the price decline of crude oil over the last few years. In fact, the dollar is at a 12-year high against the euro, leading to appreciations in the U.S. dollar index and a reduction in oil prices. This puts the market under a lot of pressure because when the value of the dollar is strong, the value of commodities falls. Global commodity prices are usually in dollars and fall when the U.S. dollar is strong. For example, the surge in the dollar in the second half of 2014 caused a sharp fall in the leading commodity indexes (Evan Tarver Investopedia). More reason are that OPEC has been unwilling to stabilize oil prices and is actively competing with the US. But also higher fuel efficient US/EU (somewhat due to Obama) has resulted in less demand for oil. The Iran Nuclear Deal also help Iran sell more oil on the market lower prices.
The reason oil and many other industries are likely to die is simple, they require to much water. It takes 2-7 barrels of water to create 1 barrel of oil. Varies based on method. Let’s talk fracking!
“Water use and wastewater production are two of the chief environmental concerns voiced about hydraulic fracturing,” said Avner Vengosh, professor of geochemistry and water quality at Duke’s Nicholas School of the Environment. (Duke Staff)
So to get oil, it requires the intense use of water and dumping of the dirty water back into areas which can create more water problems.
Kondash said. “Drilling a single well can require between 3 to 6 million gallons of water, and thousands of wells are fracked each year. Local water shortages could limit future production.”Finding ways to treat and dispose of or recycle the large volume of chemical-laden flow back water and brine-laden wastewater that is produced over the lifetime of an unconventional oil or gas well also poses challenges, the researchers stated.“Given the high levels of contaminants these waters contain, it’s startling that the amount of wastewater being produced from hydraulic fracturing in the United States is nearly on the same level as the amount of water used to frack the wells in the first place,”(Duke Staff).
So if you following me here, there will be a major shift in the use of petroleum because profits are declining, the benefits are being reduced and the dollar value of clean water will only continue to increase. This does not way in regulations like a carbon tax or other taxes likely to take affect in the next 20 years. Almost all countries are Earth will have water problems in the next 15 years. The only direction to move is away from oil production and into new energy sources. Electric cars, a proper transit system, solar, tidal and other technologies that have a lower impact on the environment and aren’t as resource heavy. To speed it up, a good plan would be to increase taxes or higher standards to speed up the process.Another good way is to encourage divestment from oil producers/heavy use things like cars and into more community-based technology like transit. The only problem with that is the World currency is the US dollar. The US dollar is based on Petroleum. A collapse of Petroleum could have ripple effects that most economists probably don’t have the wherewithal to predict. Looks like the sun is setting on the future of petroleum.
Read more: 4 Reasons Why the Price of Crude Oil Dropped
Investopedia http://www.investopedia.com/articles/investing/102215/4-reasons-why-price-crude-oil-dropped.asp#ixzz4wwjh8qem
The Republican Party is one of the two main political parties currently active in the United States. Founded by anti-slavery activists, economic modernizers, and liberal Whigs and Democrats in 1854, the Republicans dominated politics nationally and was the majority political party in the Northeast, Midwest, and Great Plains for most of the period between 1854 and 1932. The Republican party has won 24 of the last 40 U.S. presidential elections, and there has been a total of 19 Republican Presidents between 1860 and 2016, the most from any political party.
Liberal Republicans & The Civil War
The Republican Party was founded in Ripon, Wisconsin in 1854 and soon became the main anti-slavery political party within the US.
The Republican Party was officially formed in the small town of Ripon, Wisconsin on March 20, 1854, as a coalition of anti-slavery Whigs and Democrats opposed to the Kansas–Nebraska Act, which opened Kansas Territory and Nebraska Territory to slavery and future admission as slave states, thus repealing the 34-year prohibition on slavery in territories north of the Mason–Dixon line. This change was viewed anti-slavery members of Congress as an aggressive, expansionist maneuver by the slave-owning South. In addition to supporting an anti-slavery platform, the Republican Party followed a platform based on economic modernization, a more open interpretation of the constitution, expanded banking, openness to new immigrants, and giving free western land to farmers as a way to discourage the spread of slavery to the Western territories. Most of the support for the new political party came from New England (particularly Vermont, Maine, and parts of Upstate New York), the Midwest, and certain areas in the Upper South such as Eastern Tennessee, Southeastern Kentucky, and Western Virginia (regions where slavery was non-existent).
The Republican Party almost immediately made a mark on American politics and soon superseded the Whig Party as the chief opposition party. The first Republican Presidential nominee was John Frémont, a former general during the Mexican-American War and a strong opponent of the spread slavery. In the 1856 Presidential Election, Frémont scored 33% of the vote and came very close to defeating Democratic candidate James Buchanan in the Electoral College. The strong performance of the Republican Party was an impressive feat despite the fact that the party lacked a strong organizational structure and was not on the ballot in all states. The Republican Party built upon their successes by winning control of both House of Congress in the 1858 midterm elections.
The election of Abraham Lincoln in 1860 and the subsequent start of the Civil War led to the first era of Republican domination of the American political system.
The election of Abraham Lincoln in 1860 and the subsequent start of the Civil War opened a new era of Republican dominance at the federal level known as the Third-Party System. President Lincoln proved brilliantly successful in uniting the factions of his party to fight for the Union. Most of the remaining Democrats at first were War Democrats and supportive of the Union war effort until late 1862. When in the Fall of 1862 Lincoln added the abolition of slavery as one of the leading war goals, many War Democrats became “Peace Democrats” and thus became more sympathetic to the cause of the Confederacy. The Republicans condemned the peace-oriented Democrats as disloyal and won enough War Democrats to maintain their Congressional majority in 1862. In 1864, the Republicans formed a coalition with many War Democrats (such as Tennessee military governor Andrew Johnson) as the National Union Party which reelected Lincoln in a landslide.
Nearly all of the state Republican parties accepted the idea of the abolition of slavery except Kentucky. In Congress, the Republicans established legislation to promote rapid modernization, the creation of national banking system, high tariffs, the first income tax, paper money issued without backing (“greenbacks”), a large national debt, homestead laws, federal infrastructure spending (particularly on the railroads and industries), and federal aid for education and agriculture. These legislative efforts added to the perception that the Republican Party was the more liberal of the two main political parties.
Post Civil-War Republicans
After the successful conclusion of the Civil War in 1865, the Republican Party leadership was faced with the challenge of Reconstruction. The Republican Party soon became split between the moderates (who favored a lenient approach to Reconstruction) and the Radical Republicans (who demanded aggressive action against slavery and vengeance toward former Confederates). By 1864, a majority of Republicans in Congress were part of the Radical branch of the party. These tensions reached their boiling point after President Lincoln’s assassination in April of 1865. The Radical Republicans at first welcomed President Andrew Johnson (Lincoln’s second Vice President and a Southern Democrat who supported the Union), believing that he would take a hard line in punishing the South and enforce the rights of former slaves. However, Johnson denounced the Radicals and attempted to ally with moderate Republicans and Democrats. The showdown came in the Congressional elections of 1866, in which the Radicals won a sweeping victory and took full control of Reconstruction, passing laws over President Johnson’s veto. President Johnson was impeached by the House of Representatives in 1868 but was acquitted by the Senate by only one vote.
The Republican Party of the 1870s sought to establish a viable political coalition based on the ideas of racial equality and progressive public policy.
With the election of Ulysses S. Grant in 1868, the Radicals had control of Congress, the party structure, and the army and sought to build a Republican base in the South using the votes of Freedmen, Scalawags, and Carpetbaggers, supported directly by the US army. Republicans all throughout the South formed clubs called Union Leagues that mobilized the voters, discussed policy issues and fought off white supremacist attacks. President Grant strongly supported radical reconstruction programs in the South, the Fourteenth Amendment and equal civil and voting rights for the freedmen. Despite President Grant’s popularity and devotion to the cause of racial and social equality, his tolerance for corruption led to increased factionalism in the Republican Party. The economic depression of 1873 energized the Democrats at the Congressional level. The Democrats won control of the House of Representatives in 1874 and formed “Redeemer” coalitions which recaptured control of each southern state. Reconstruction came to an end when an electoral commission awarded the contested election of 1876 to Republican Rutherford B. Hayes, who promised through the unofficial Compromise of 1877 to withdraw federal troops from the control of the last three southern states (Mississippi, South Carolina, and Louisiana). The South then became known as the Solid South, giving overwhelming majorities of its electoral votes and Congressional seats to the Democrats for the next century.
Economic Conservatism
The Republican Party by and large remained the dominant political party at the Presidential level for the next five decades, with the Democrats only winning the Presidency in 1884, 1892, 1912, and 1916. Starting in the mid-1890s, both of the political parties began to shift on economic policy due to events such as the 1893-1897 economic depression. During the 1896 Presidential Election, the Democrats nominated former Congressman William Jennings Bryan of Nebraska, whereas the Republicans nominated Governor William McKinley of Ohio. In contrast to previous Democratic nominees, Bryan followed a platform aligned with contemporary liberalism. Some of the main components of Bryan’s platform included increased federal aid to farmers and factory workers, opposition to the gold standard, a federal income tax, opposition to the wealthy elite, and economic populism. In contrast, Republican William McKinley took an entirely opposite position, arguing that the application of classically liberal economic policies, the continuation of the gold standard, and protectionism would lead to widespread prosperity. Ultimately, McKinley defeated Bryan by a comfortable margin, but the political shifts from this election would have ramifications moving forward. Even though the Republican Party moved towards the left-wing of the political spectrum once more under the Presidencies of Theodore Roosevelt and William Howard Taft, the conservative branch would win out by 1920 with the nomination and subsequent election of Warren Harding to the Presidency.
A Party in Decline & Flux
Senator Robert Taft of Ohio led the conservative wing of the Republican Party from the late 1930s to the early 1950s and advocated for the party to support fiscally conservative principles.
The initial era of Republican domination at the Presidential level would come to an end with the start of the Great Depression in 1929. President Hoover attempted to alleviate the widespread suffering caused by the Depression, but his strict adherence to Republican principles precluded him from establishing relief directly from the federal government. Additionally, President Hoover became the first Republican President to openly-endorse white supremacy and supported the removal of blacks from state-level Republican parties, which alienated black support for the Republican Party. The Depression cost Hoover the presidency with the 1932 landslide election of Franklin D. Roosevelt and allowed the Democrats to gain a substantial Congressional majority for the first time since the 1850s. The Roosevelt Administration implemented a legislative program known as the “New Deal,” which expanded the role of the federal government in the economy as a way to alleviate the suffering caused by the economic decline and to prevent another economic decline on the scale of the Great Depression from occurring again. Additionally, President Roosevelt sought to gain the support of voter groups that typically voted Republican such as African-Americans, ethnic minorities, and rural farmers. Roosevelt’s efforts were ultimately successful and led to strong victories for the Democratic Party at the ballot box for the next three decades. During this period, the Democratic Party retained control of Congress for every year except 1946 and 1952 and won the Presidency in all elections except 1952 and 1956, when Dwight Eisenhower, a liberal Republican, defeated a fractured Democratic Party.
In response to the New Deal and the policies of the national Democratic Party, the Republicans split into two factions. The first wing was the liberal faction, which favored expanding the New Deal social programs, but felt that such programs would be managed better by Republican administrations. Additionally, the liberal faction of the Republican Party firmly favored civil rights legislation and worked closely with Northern Democrats to push forward positive legislative changes in that arena. The other group was the conservative faction, which advocated a return to laissez-faire economics and fiscal conservatism. Even though the conservative faction of the Republican Party also supported civil rights reforms, they started to form alliances with conservative Southern Democrats in the late 1930s as a way to prevent progressive laws from passing. After the 1938 midterm election, the “Conservative Coalition” formed a majority in Congress and prevented successive Democratic administrations from expanding the New Deal and other associated social programs. It can be argued that the “Conservative Coalition” controlled Congress until 1958, when a large group of liberal Democrats was elected to the Senate and House of Representatives.
The Southern Strategy & The Republican Resurgence
The political parties began to shift again in the 1960s due to policy changes within the Democratic Party. The main split in the Democratic Party came about due to the struggle for civil rights. Since the late 1930s, the Democratic Party experienced a major split between the liberal and moderate factions, which favored civil rights, and the Southern faction, which was steadfast in its opposition to federal civil rights legislation. These tensions came to a head when Lyndon Johnson became President after John F. Kennedy was assassinated in 1963. Despite being a Southerner, Johnson had a record in support of civil rights since the mid-1950s and felt that civil rights represented a major political opportunity for the Democratic Party. Over the course of his Presidency, major civil rights legislation was passed in 1964, 1965, and 1968 and the Democrats soon became associated with civil rights reform. In response to these changes, the Republican Party began to appeal to white Southerners opposed to the changes to their way of life. These appeals first became apparent in the 1962 Alabama Senate Election between Democrat Lister Hill and Republican James Martin. Despite being a supporter of segregation, Hill was targeted relentlessly by Martin as a covert supporter of federal civil rights legislation. Ultimately Hill won the race, but by only a 1% margin. The Hill-Martin Senate race served as a prelude to the 1964 Presidential Election, in which Republican Barry Goldwater lost in every region of the country except the Deep South due to his opposition to the Civil Rights Act of 1964.
Modern Republicans look up to President Ronald Reagan (1981-89) as the main political leader to emulate.
The Republican Party began to see a resurgence at the federal level during the late 1960s that continue to this day. As a result of the aforementioned civil rights reform, the ongoing Vietnam War, and the failure of the Democratic Party leadership to reform the party structure, the Republican Party regained control of the Presidency in 1968 and retained control of this office in each election except 1976, 1992, 1996, 2008, and 2012. On the other hand, the Republican Party did not regain control of the Senate until 1980 and the House of Representatives until 1994. The growth of the Republican Party over the past 50 years can be attributed to the implementation of a conservative platform on both economics and foreign policy as well as the rise of the Christian Right political movement in the late 1970s. The modern Republican Party considers President Ronald Reagan (1981-89) as the political leader to look up to, much like how Democrats view Franklin Roosevelt as their political idol. During his Presidency, Reagan implemented neoliberal economic policies, expressed strong support for socially conservative values, increased defense spending and advocated an internationalist foreign policy that some credit with contributing to the end the Cold War.
Contemporary Republican Party
Today, the Republican Party is at its highest level of support since the late 1920s. The Republicans control both House of Congress and have gained total control over historically Democratic areas such as the Appalachian and Ozark regions of the South since 2010 and are increasingly becoming dominant in the industrial Midwest. On the other hand, the Republican Party has lost nearly all of their historic support in the Northeast and West Coast due to their adopting of a socially conservative and xenophobic platform over the past decade.
In the 2016 Presidential Election, Republican Donald Trump defeated Democrat Hillary Clinton with 304 Electoral Votes but lost the popular vote by 3 million. Trump performed strongly in the Midwest, Appalachia, Ozarks, and some states in the Northeast such as Maine, Rhode Island, and New Hampshire. Additionally, Trump performed very poorly in several typically Republican states such as Texas, Georgia, Arizona, North Carolina, and Utah. Perhaps the 2016 Presidential Election signals a new realignment for both political parties. Future elections may see the Republican Party cementing their gains in the Midwest, Appalachia, and Ozarks, and the Democratic Party continuing to grow in support along both coasts of the US and picking up parts of the cosmopolitan Southern states and the Southwest.
What is Universal Basic Income?
The idea that every citizen of a state should receive a basic income to survive. Instead of work 9-5 regular job, you would only need to if you want extra then bear minimum in society.
Who is proposing Universal Basic Income?
Right now many people see a future of automation as a destroyer of “jobs” for people to survive in the current monetary society. Major captains of industry have come out supporting it. Like who? Elon Musk -Mark Zukeburg Sam Altman, Andrew Ng, Bill Gross, Ray Kurzweil and more. You can find an introduction to the people on a link below.
The How, What and Why?
As robots replace human labor what is to become of the workforce? How will society coop with men not operating jobs that maintain and produce capital? Well as the narrative goes, they are supposed to be good little workers and accept what society hands them. If people fight for the Universal basic income then it can become their right to have it. If they don’t get it, they have to accept it. But is universal basic income anything but to keep the fundamental restructuring of society and to keep the management of “production” out of the hands of the average man? The leaders of industry clearly see a time where the work is 95% machine driven and people really won’t have a place in the type of society it will create. It is saying there are no losers just above the tide people and people above the floor of desuetude. But it neglects to address the fundamental arguments of inequality, power, and egalitarianism. Who gets a say in what gets done? Who gets a say in what’s made? Who gets a say in how we do things? Fundamentally a society with and or without Universal basic income still presents a serious dilemma. Wealth in most societies like the US, influence, determines and often changes elections against the “popular” consensus of society. So Elon Musk is willing to give you a basic house, with solar panels and probably other essentials but it should not be mistaken men like him do this to keep his big house, expensive car and the mob off his company. Jean Ziegler a former UNO Special Rapporteur said it best when he said,
“The agriculture of the world could feed 12 billion people with no problem. A child that starves to death today is murdered.”
The human potential to feed everyone is possible, it’s the governments and large companies that prevent them from doing so because they would lose money-“capital”. Proposing that we feed everyone is a good start but asking why they are hungry is a better one.
“When I give food to the poor, they call me a saint. When I ask why the poor have no food, they call me a communist.” Dom Helder Camara, a Brazilian Archbishop
The quote by the Brazilian Archbishop echoes a truth, the reason people starve is because we let them. The reason people let it happen is because small groups of generally wealthy American men find it immoral to lose a profit even though someone loses a life. Distribution of resources is a key area here that is not well discussed in Universal Basic Income. Yes, everyone in the state would theoretically receive an income to survive, but what they would not receive is real opportunities to climb out of that zone, lets call it climbing the ladder. With wealth concentration, monopolization of industry, patenting of technology it would become increasingly difficult for individuals to climb up to a substantially higher level of “wealth” or up the ladder.Currently, economic mobility is at its lowest point in a very long time in the US and around the world. Could UBI fix this? It remains to be scene with it not addressing the monopolization of wealth and industry. Why should one man own more than 90 or 100 million? There is no good answer to that, especially with the result of it, the concentration of power. Regardless of your stance on any political issue, who argues that one man should be a king when he has no right to be a king?It is not divinely ordained. It is not because of merit or intelligence, its is largely the result of being born at the right place at the right time to the right circumstances. Under an increasing non-competitive, low labor society we could see worse inequality rise. I am not applying that historically competition was strong because it has usually been the opposite, but it will likely become worse. You have 400 families controlling half the world’s wealth today. Under Universal basic income will that change? I am not sure. But a great doubt hovers the minds of many on the issue.
Dangers
What could evolve is an exacerbation of the current problem, dumb, bullshit pass time crap. I am talking about wasting 3 hours a day watching sports when it has no “value” whatsoever. In the days of the Romans, they built Colosseum’s like the Circus Maximus, not just because they wanted to see people cut each other heads off for fun, but to keep people entertained and not thinking too much. It is important to constantly question the hierarchy and establishments of power in current human civilizations. Fuck apes. Society has the potentially to become an even more trapped and detached human consciousness with the increase of technologically development in virtual reality. Today we have an intense focus on entertainment while the world falls apart, environmental destruction, the potential for nuclear holocaust, drug epidemics, disease, famine, deep poverty and more. Many of these things will not be addressed by simply giving a “citizenry” Universal Basic Income. Be Weary my friends and stay thirsty for knowledge. For without the thirst we lose our humanity.
“There is only one good, knowledge, and one evil, ignorance.” Socrates
Jean Zieglar
https://www.theguardian.com/world/poverty-matters/2012/oct/05/jean-ziegler-africa-starve
Circus Maximus
https://en.wikipedia.org/wiki/Circus_Maximus
Said something about Apes?But here is some fun aside from it
http://www.consumepopculture.com/#/make-america-apes-again/
Why will Universal Basic Income become the future? Understanding Automation, video somewhat neo-liberal perspective
Marco Palladino is a 22-year-old running for public office to represent his idea of equality justice and a pursuit of a better American Society. His pursuit is for simple ideas to be incorporated into public policy and to get the fat cats on a diet. Marc believes in cutting inefficient and bad policy spending program that don’t benefit the American people
Quick Resume
Intern for Monmouth University Peace Corp Prep
Intern for New Jersey Universal Health Care Coalition
Intern for Food and Water Watch
Economics and Social
https://www.facebook.com/ezraklein/videos/676725529181719/?autoplay_reason=all_page_organic_allowed&video_container_type=0&video_creator_product_type=0&app_id=273465416184080&live_video_guests=0
Supporting Strong Credit Unions
Living Wage
$15 wage is necessary for people to survive in today’s world.
Universal Health Care
Increase Taxes on people making over $500,000 and adding higher estates taxes which only affect 0.001 of the population.
Prison Reforms
Mandate possession of any drug must be in high quantities in order to become a crime unless under the age of 16 where minors should be assigned a social worker.
https://www.youtube.com/watch?v=_wg6_hqu2Ck Environmentally Policy
A ban on Pesticides should and is a top priority statewide to protect NJ residents for cancer and other health issues. It is also an issue of keeping the eco-system alive, keep pesticides out of the water we drink and the animals drink. A ban on pesticides and a mandate for using other techniques will be key to kill pesticides be they weeds or insects.
Sustainable Farming Habits combined with crop rotation will dramatically reduce the need for pesticides. Crop rotation show pesticides are less worrisome has been a historical tactic as well as large scale indoor farming.
An example? How about giving Exxon tax credits for cleaning up their oil spill? To Marc that doesn’t make sense, they shouldn’t be fined on basic numbers but percentages of their global income. Marc is from New Jersey, a place with the most Superfund sites in the country. A Superfund site is a site so toxic the federal government has to step in. Public officials, private officials have failed to solve this problem sometimes because of will, but often because long tedious legal battles that end up sucking money from actually solving the problem. A recent example X, where the state won but most of it was put toward the legal fees. It is a dire need to reduce costs and to get to action when cleaning up toxic waste that makes NJ less healthy.
Why everyone should be an environmentalist
Ban on Pesticides or other toxic Chemicals
Using pesticides is a way to generally get rid of weeds we do not want or even insecticides for insects.What has been shown over time is that these products are not only ineffective because over time plants or bugs build resistance but that they are a danger to the users. We need to reform how we use toxic chemicals, a metaphor for this is like using a shotgun instead of a flyer swatter. We do not need to use these chemicals and often we have the natural solutions available. Before I get into them, it’s worthy make note that many farms use them too much and risk their health and the public’s’ health to do such. We can systematically reduce risk and increase human health but first reducing consumption of goods by high taxes and training courses on sustainable none pesticide use agriculture. Organic agriculture reduces the use of toxic chemicals of which end up in the water supply of which the affects are severe in certain places more than others. The question we should ask ourselves is always is it worth it? With contamination of water, huge determent to human health(cancers) for workers and for regular townsfolk, is it worth it?
Simple solution to chemicals
A common found around the house weed killer is actually vinegar, it is known to kill many plants and is not toxic to human health! Don’t be dumping 200 pounds in a yard though.
Another good idea is to plant certain types of plants around the house to keep bugs out!
https://www.facebook.com/homeyhomeTV/videos/153265455214383/?autoplay_reason=all_page_organic_allowed&video_container_type=0&video_creator_product_type=2&app_id=2392950137&live_video_guests=0
Carbon Cutting on Public Policy of State/Government
We need to cut all the excess carbon out of the air that we are producing with our machines, agriculture, and technology. One of the ways we begin to do that is by auditing the carbon output of different areas and after that data taking steps to cut it which should create tons of environmental and engineering jobs around the tri-state area. Right now the US military is one of the biggest polluters, making sure they are accounted for and making smart public policy choices that not only improve public health but create a more sustainable future. It’s why military barracks all over are getting solar on them which is a great choice.
Investment in Research and Development as Share of GDP to Increase
We must increase our military and generally spending on technologies that are likely to benefit public. Over the last decade spending has been cut in research and development, the United States is the only country to do such and will suffer long term shortfall unless its a leader in technology.
Investing in Energy Infrastructure in all homes and other efficient devices to reduce energy and water waste.
Investing in clean solar and Wind energy where its most efficient will be key to pushing NJ to Marc’s goal of 100% renewable by 2035.
Cooperating and making non-profits a part of the conversation like Food and Water Watch remain key for a more policy-focused future.
Offshore Wind
Solar
International Conflict Resolution
“Call it peace or call it treason, call it love or call it reason, I aint marching anymore.”- Phil Orchs
Funding Art
http://www.nj.gov/state/njsca/dos_njsca_about.html
Water Conservation
We are running out of clean water and doing on road to serious trouble by 2020. Investing in clean long term public water systems is critical for the future of New Jersey and doing it in key areas. Changing prices systems based on use/income and setting limits so people get charged after they go over a certain amount. Upgrading age-old water infrastructure will be important for maintaining health, especially in high-density areas. Forcing a water tax on consumers to promote lower water use and to also build centers all over the state in ideal locations for high-cost effectiveness. Also planting the right type of tree, native to the region, could have the affect of promoting more sustainable water system.
Corruption
Corruption is a plaque on the American political system, the American economy and the ability to have a “democracy of maximums and plutocracy of minimums. We need to work on banning money from different groups who have the least interest in the health of the American society. Killing corruption via banning lobbying, making corporations with historically lobbying power pay an additionally tax for a public defender against the companies interests to level the playing field. First by going for limbs than buying going for the centrally nervous system.
Corruption is a bug to be killed by concerned and active citizens. https://www.youtube.com/watch?v=kdrjzE1SE58
Wolf-Pack – Helps fight corruption
Serious Economic Viability Schemes-Reduce-Reuse- Recycle
Turning foreclosure into a benefit for small business and entrepreneurs will be key to upgrading areas and making use of already available resources. Fixing old malls up and converting them to tech hubs and vertical farms will create strong industries to the public benefit.
https://www.vox.com/science-and-health/2017/5/9/15183330/america-water-crisis-affordability-millions
Reforming agriculture is another way to cut water consumption as a significant portion of water use goes to agriculture.
Converting Office Buildings into productive community spaces.
http://www.useful-community-development.org/adaptive-reuse.html
https://www.fastcompany.com/3041551/unconventional-ideas-for-using-empty-office-buildings
Building Transportation hubs that makes sense and to have a 100 year plan.
Convicted Felonies should have the right to vote after they serve their sentence. They served their time in jail and should not have the right to vote taken away from them.
Take the Pledge to support
Universal Healthcare
Clean Energy
Nuclear Disarmament
Human Rights
Free Speech
Civic Education
Higher Clean Drinking Water Standards
Universal Suffrage for All
Marc Has a desire
“Weapons of Mass Dissent”-https://www.youtube.com/watch?v=ngOchfbbgz0
Bitcoin? Not sure
http://www.ontheissues.org/Background_War_+_Peace.htm
https://uselections.com/m/sites/view/OnTheIssues
In recent centuries, many different economic theories have emerged to address pressing economic issues facing individual societies and the global economy. Diverse economic theories such as Marxism, Mercantilism, and Keynesian economics have been applied to solve economic problems and the changing demands in societies. One such approach that influenced contemporary global economic policy is Classic Liberalism. Originally developed during the late 18th and early 19th Centuries, Classic Liberalism follows the principles of limited government intervention in the economy, free trade, and the idea that increased economic competition is beneficial for the economy. According to Classic Liberalism, these principles allow for the maximum level of economic growth and enable the individual to play the primary role in determining the proper economic decisions. Some of the major figures behind Classic Liberalism include Adam Smith, David Ricardo, Jean-Baptiste Say, and John Stuart Mill. The principles put forward byClassic Liberalism explain the structure and mechanisms that define international trade and the economic successes created by current global trade policies. Despite the success of Classical Liberalism policies in the realm of trade, current global political trends threaten to alter the existing trade structure
The concept of Classic Liberalism developed in response to the Industrial Revolution. During the 18th Century, the world was shifting at an ever-increasing rate due to industrialization in and colonialism. Additionally, political reform in North America Europe necessitated a change in economic thinking. The new opportunities for wealth accumulation in the New World resulted in individuals beginning to question the economic status quo. The dominant economic approach in place at the time was Mercantilism, which is a form of economic nationalism based on creating as much wealth as possible within one’s national borders. Under Mercantilism, the import of finished goods is undesirable because it results in a decrease in a country’s overall wealth. Countries placed tariffs on all imported goods, which reduced competition with domestically finished goods they produced to sell to other nations and preserved their overall wealth. Because of these factors, the goal of Mercantilism was the accumulation of wealth and power to strengthen the state and ensure its survival.
In contrast, Classic Liberalism presents an entirely different approach to economic. Adam Smith is considered the originator of the ideas behind this theory. In the 1776 work “The Wealth of Nations,” Smith puts forward the idea that the economy functions most efficiently and at its greatest potential when interference, either by the government or by private individuals, is limited. Additionally, Smith argues that individual pursuit of self-interests serves as the basis for all economic decisions and that persons pursuing their self-interest will ultimately be beneficial for all members of society. To illustrate his idea of a self-regulating economy, Smith employs the principle of the invisible hand. The invisible hand describes how buyers and sellers respond to market condition changes. Under an entirely free market economic system, Smith argues that the existence of the invisible hand will allow the economy to remain balanced and that any inefficiencies in the market equilibrium will correct themselves without outside intervention.
Adam Smith further promoted the idea of labor specialization and the division of labor. As opposed to one person following all the steps in the production of a good, Smith argues that it is advantageous for each person to specialize in one step of the manufacture of a product. Through specialization and labor division, Smith feels that both productivity and skill will increase and that the level of economic innovation will improve. Smith also explores the theoretical approaches behind international trade. With regards to international trade, Smith promotes the idea of absolute advantage. The main idea behind the notion of absolute advantage is that a country should improve production techniques in every industry to develop a dominant position in the global economy. By mastering the production of all goods, Smith argues that countries will have an absolute advantage in the international economy and will see their wealth and aggregate income increase.
In addition to developing several ideas regarding the structure of international trade, British economist David Ricardo explores the value theory. The value theory focuses on the overall value of goods and argues that the economic value of products is dependent on the total amount of labor required in their production, as opposed to their usage or the level of satisfaction the user receives from them. Ricardo was also a proponent of free trade and promoted the idea of comparative advantage. As opposed to absolute advantage, comparative advantage follows the notion that countries should concentrate on the production of the goods that they produce the most efficiently, and that the trading of products they manufacture efficiently for goods that they do not as effectively produce should be the basis of international trade. Through industry specialization at the national level, Ricardo felt that the global trade structure would improve and that trade would be beneficial to all the countries involved.
The main ideas promoted by Classic Liberalism explain the structure of international trade and the ways in which the global market is set up. The concepts of labor division and specialization describe the production of goods at the international level. Different countries specialize in each of the steps in the manufacture of products and thus develop their niche in the global market. This labor specialization helps to make the production of goods more efficient and serves to lower the costs of goods and increase their availability to a wider array of consumers.
Moreover, the distribution of labor at the international level helps to encourage greater international cooperation by involving many different countries in each step of production and has allowed previously poor and under-developed countries to gain a stronger presence in the increasingly globalized economy. Labor division and specialization at the international level has only grown in importance with the rise of globalization and the increasing influence and spread of multi-national corporations.
An example of the division of labor at the international level is the steps involved in the production of different types of electronics such as smartphones. The entire supply chain and each stage in the manufacture of smartphones is an embodiment of the idea of labor division. The components used in the production of smartphones originate from under-developed countries or countries that are in the process of developing primarily in regions such as Africa, Asia, and Latin America. The assembly of electronic products such as smartphones tends to occur in developing countries such as China and the marketing and sales of such products occur in developed countries such as the United States. As such, the production of smartphones is a representation of the very type of labor division and market specialization that was discussed by Adam Smith and David Ricardo as a primary component of trade under a system based on Classic Liberalism.
The existence of niche markets in individual countries is another example of the Classic Liberal concepts of comparative advantage and labor specialization. An example of an industry that follows the ideas of comparative advantage is the oil industry In the Middle East. Several nations in the Middle East such as Iran, Saudi Arabia, and the Gulf States are rich in oil reserves. Because of their abundant oil reserves, these countries have specialized in the production of oil and based their economic systems on the development of infrastructure meant to facilitate the refinement and transportation of such products. On the other hand, many industrialized nations in North America and Europe lack the tools or resources to produce and refine oil in an efficient manner despite the high demand for oil in their economies. Due to the continuing demand for oil, countries with non-oil economies seek to trade with the oil-rich countries through products that they produce efficiently for the oil products that they do not produce as well. In turn, the oil-rich countries receive goods that their domestic economies do not specialize in manufacturing through this trade relationship. As such, the trade relationship between the Western countries and the Middle East regarding oil is an example of comparative advantage and industry specialization at the global level.
Another component of Classic Liberalism is the idea of free trade and the reduction of economic barriers between nations. The creation of free trade policies leads to numerous economic advantages according to Classical Liberal Theory. One such advantage is the reduction in prices of goods and services through the expansion of the market. As the market expands and an increasing number of people have access to goods and services, the costs of previously expensive goods ultimately decline. An expansion in the access to trade increases the global marketplace for goods produced within individual countries, which increases the overall economic growth within different countries and helped to transform the economic situation in many developing countries. With expanded access to trade, firms within countries will face more competition from abroad. The increase in competition will give businesses the incentive to reduce costs and improve their efficiency. Considering these factors, proponents of Classic Liberalism view free trade and the reduction in previously-existing trade barriers as beneficial for the global economy.
Another example of Classic Liberalism playing a role in determining international trade policy is the existence and growth of free trade agreements between nations. Some of the most significant free trade policies and proposals in recent history include NAFTA, the European Economic Area, and the Trans-Pacific Partnership. Because of the end of the Cold War and the growing importance of globalization over the last few decades, many nations have begun to shift towards policies of trade liberalization and the reduction in previously-existing trade barriers. The primary rationale behind these policies is to increase economic and political cooperation between the nations involved in the agreements. By increasing economic cooperation, participants in free trade agreements sought to reduce the chances of international conflict from occurring and present a united face in addressing emerging global challenges. Additionally, the member-nations attempted to increase their overall economic growth and competitiveness on the international stage by increasing their access to trade. Participants in free trade agreements also seek to increase the spread of new ideas and enrich their cultural experiences through the promotion of free trade. Because of these factors, many different nations have promoted free trade policies and frame the policy idea of free trade as a positive and stabilizing force that fosters increased international stability and economic growth.
The Classical Liberal idea of free trade has led to sharp increases in economic growth and wealth creation and gave rise to increasing levels of innovation through expanded economic competition between nations. An example of open trade policies encouraging growth and technological innovations is the case of the software industry of India. Between 1990 and 2000, the total revenue of the Indian software industry rapidly increased from $128 million to $4 billion due to increasing trade with much of the world. Additionally, the increase in global trade and competition from technologically advanced countries such as the US encouraged India to implement technological advances within its computing and software industry to maintain an advantage in its computing industry and to lower the costs of the products that it produced.
The increase in labor division between nations has had a positive impact by allowing previously poor and underdeveloped countries to enter the global marketplace and has reduced the prevalence of poverty and other long-standing inequalities within them. Makki and Somwaru determined that international trade and increased foreign investment are some of the primary sources of economic growth in developing countries. Additionally, international trade has allowed developing countries to have access to information and technology previously only available to wealthier countries. These factors have ultimately contributed to the reduction of long-standing inequalities existing between developing and developed countries. Considering these factors, one can argue that the Classic Liberal principles of free trade and labor division between countries has allowed for a stronger global economy and allowed for increased levels of stability in the international arena.
Despite the economic benefits created through the application of Classical Liberal economic concepts in international trade, current political trends and economic changes threaten to upend the current international trade policies. Events such as the 2008 Financial Crisis exposed many vulnerabilities in the global economy that were brought forward by expanded trade opportunities and higher levels of globalization. One such vulnerability exposed is that increased economic interdependence made is so that countries previously shielded from global market pressures felt the effects of economic turbulence more deeply than in previous years. Additionally, the slow recovery from the crisis and the subsequent decline in economic opportunities in many of the Western countries has created resentment towards the existing structure of international trade. In response to these developments, a growing number of individuals have begun to question the benefits of a trade policy based on the ideas of Classic Liberalism and call for a change in global trade policies.
The renewed opposition to trade liberalization and criticism of globalization has become more apparent in recent years and has resulted in events such as the Brexit referendum, increasing support for economic populism in the US and much of Europe, and the withdraw of the US from the Trans-Pacific Partnership trade agreement. The emerging populist political movements seek to roll back long-standing trade agreements, arguing that policies promoting free trade contribute to economic instability and are only beneficial to primarily developing countries. The proponents of economic populism support the idea of economic nationalism and the improvement of the domestic economic system. The effects of this rise in populism and economic nationalism will become more apparent over the next few years, and the effectiveness of these policies will ultimately determine the role that international trade will play in the economy.
In conclusion, the economic theory of Classic Liberalism has played a significant role in determining international trade policies. Classic Liberalism developed during the late 18th and early 19th centuries and is based on the ideas of minimal economic intervention by outside forces and allowing the individual to play the main role in economic decision-making. Policies put forward by Classic Liberalism such as free trade and labor division have contributed to the current global trade policies and have allowed for much economic success. Despite the successful application of Classic Liberalism in the realm of international trade, there has been a recent push-back against such policies. Only time will tell if the ideas of Classical Liberal Theory will continue to influence the structures of international trade, or if alternative economic theories will come to define the structure of international trade.
Works Cited
Bentes, P., Ettinger, S., Ryan, J., Simpson, M., Smith, L., Sales, M., & Salkeld, D. (2010). International Trade. The International Lawyer, 44(1), 93-111. Retrieved from http://www.jstor.org/stable/40708236
Bishop, J. (1995). Adam Smith’s Invisible Hand Argument. Journal of Business Ethics, 14(3), 165-180. Retrieved from http://www.jstor.org/stable/25072635
Chandra, R. (2004). Adam Smith, Allyn Young, and the Division of Labor. Journal of Economic Issues, 38(3), 787-805. Retrieved from http://www.jstor.org/stable/4228057
Dorussen, H., & Ward, H. (2010). Trade networks and the Kantian peace. Journal of Peace Research, 47(1), 29-42. Retrieved from http://www.jstor.org/stable/25654526
Henderson, J. (1977). Adam Smith, Ricardo, and Economic Theory. The Centennial Review,21(2), 118-139. Retrieved from http://www.jstor.org/stable/23738299
Makki, S., & Somwaru, A. (2004). Impact of Foreign Direct Investment and Trade on Economic Growth: Evidence from Developing Countries. American Journal of Agricultural Economics, 86(3), 795-801. Retrieved from http://www.jstor.org/stable/3697825
Maneschi, A. (2008). How Would David Ricardo Have Taught the Principle of Comparative Advantage? Southern Economic Journal, 74(4), 1167-1176. Retrieved from http://www.jstor.org/stable/20112020
Merry, R. W. (2016). Protectionism in America. National Interest, (146), 28-36.
Mitchell, J. (2010). World Oil Trade: New Oil Axis. The World Today, 66(3), 9-11. Retrieved from http://www.jstor.org/stable/41962497
Murali Patibandla, Kapur, D., & Bent Petersen. (2000). Import Substitution with Free Trade: Case of India’s Software Industry. Economic and Political Weekly, 35(15), 1263-1270. Retrieved from http://www.jstor.org/stable/4409147
Murray-Evans, P. (2016). Myths of Commonwealth Betrayal: UK–Africa Trade Before and After Brexit. Round Table, 105(5), 489-498. doi:10.1080/00358533.2016.1233760
Otto Mayr. (1971). Adam Smith and the Concept of the Feedback System: Economic Thought and Technology in 18th-Century Britain. Technology and Culture, 12(1), 1-22. doi:10.2307/3102276
Pires, A. (2012). International trade and competitiveness. Economic Theory, 50(3), 727-763. Retrieved from http://www.jstor.org/stable/23254341
Quadir, I. (2013). Adam Smith, Economic Development, and the Global Spread of Cell Phones. Proceedings of the American Philosophical Society, 157(1), 67-91. Retrieved from http://www.jstor.org/stable/23558141
Afghanistan, the United States, the Soviet Union, And Illegitimacy PS 401: Seminar in Political Science
Fall 2016
Marco Palladino
(Work In Progress citations not cited properly due to format of blog- can submit original copy if needed(word doc)
Abstract
Intervention in a failed state is not an effective counterterrorism tool when it is reliant on military power to prop up a perceived illegitimate government. Additionally, foreign hegemonic forces are often viewed as invaders even if that does not represent the underlying goal of the intervention. This study will focus on the policies implemented by the US and the Soviet Union over the courses of their interventions in Afghanistan, which is at the forefront of America’s failed counter-terrorism campaign in the Middle East and North Africa. Afghanistan has a history of being invaded and pushing invaders out. For example, Greece, Great Britain, and the Soviet Union all invaded Afghanistan at various points in time, but their efforts ultimately ended in a resounding defeat. All these unsuccessful invasion help give Afghanistan the nickname of “The Graveyard of Empires.” This paper seeks to explore what are the likely results of an intervention by foreign hegemonic forces in a failed state to install and maintain an illegitimate government. The methods measured include casualty rates, economic indices, military spending on intervention by hegemonic power and results of such interventions, and various social indices. Examining the long-term effects of war and insurgency will be critical to determine the effectiveness of foreign intervention against terrorism.
Introduction
The ongoing “War on Terrorism” has been a major foreign policy challenge over the past decade and a half.
A major foreign policy issue in recent years has been the ongoing War on Terror, which is an international effort to destroy groups, organizations, and affiliates that are a threat to the United States or its Allies. The War on Terror began as a response to the 9/11 Attacks by North Atlantic Treaty Organization (NATO), which includes the United States, France, United Kingdom and Germany. Even though NATO was set up as a military and political alliance during the Cold War era, its focus has shifted towards intervention in numerous failed states and has conducted many aerial bombings in attempting to combat “terrorism” and to implement governmental change.
According to the Global Political Forum, a failed state is “a government that can no longer provide basic functions such as education, security, or governance, usually due to fractious violence or extreme poverty”. Using United Nations data on casualty rates, stability, corruption, and social well-being will determine if the country is moving forward or backward. Military spending will also factor in the results if the amount of money invested was spent wisely and has had a noticeable positive effect on national progression. Is there a lack of diplomacy or willingness to negotiate that could be reducing possible results?
This paper will examine the effects of foreign intervention by hegemonic forces and their role in exacerbating the problems in “failed states” such as Afghanistan. The hypothesis is that a heavy reliance on military intervention in a country to prop up a perceived illegitimate government will have largely negative results. This paper will also look at the robust strategic patterns of the United States and the lack of ensuing results through military intervention in failed states in addition to general campaigns in Afghanistan and their correspondence to the objective of the reduction of terrorism and increasing stability in the nation-state. This paper focuses on Afghanistan, which has been considered the epicenter for global terrorism and had large-scale intervention by foreign hegemonic forces. The result of the intervention in many states has been largely negative for the population in question. The cases study will look at Afghanistan as a whole and the large-scale military intervention by NATO in the last few year’s outcomes. The case study will look at spending habits and how they factor into the successful elevation of suffering and counter-terrorism in a failed state. The final area will be how diplomacy factors into resolving a crisis in a failed state.
Originally part of Iran, Afghanistan received its independence in 1709 after a successful revolt against the Iranian government, then under the leadership of Shah Sultan Husayn, a member of the Safavid dynasty which ruled Iran from 1502-1722. Over the ensuing centuries, Afghanistan was characterized by conflicts with European powers such as Great Britain and the Russian Empire. By 1919, Amanullah Khan was finally able to remove British influence from Afghanistan and began to pursue an independent foreign policy. Over the next few decades, Afghanistan was led by Mohammed Zahir Shah, who ascended to the throne in 1933. Mohammed Zahir Shah shares some similarities with Shah Mohammed Reza Pahlavi of neighboring Iran in that he sought to increase economic modernization and secularism within Afghanistan. Additionally, Mohammed Zahir Shah was generally a far less repressive leader than Pahlavi and allowed a much higher level of political freedom overall in Afghanistan than in Iran.
Beginning in 1955, the Soviet Union provided large amounts of military training and materials to Afghanistan that gradually increased over the next two decades. For example, 1 out of every 3 members of the Afghan military was trained on Soviet soil by the early 1970s. The major political event to note during Mohammed Zahir Shah’s rule was the creation of the People’s Democratic Party of Afghanistan (PDPA) in 1965. The PDPA ultimately split into two factions, the Khaliqis led by Noor Taraki, and Parachamists led by Babrak Karmal. The Khaliqis has a base of support in rural areas and among the Pasthuns. The Parachamists primarily had support from urban areas and were the reformist political faction within Afghanistan. In 1973, Prime Minister Mohammed Daoud peacefully overthrew Mohammed Zahir Shah. The Khalq faction never fully recognized Daoud’s leadership, viewing his overthrow of the King as a plot to gain power.
On April 28, 1978, Afghani soldiers supportive of the Khalq faction killed Mohammed Daoud and his family in his presidential palace, thus allowing Noor Taraki to become Prime Minister and Babrak Karmal to become Deputy Prime Minister. The Carter Administration viewed the overthrow of Daoud as a communist takeover. Internal Afghan politics complicated the US and Soviet influence during this period. Hafizullah Amin, an ally of Taraki received word that Karmal was planning a Paracham plot to overthrow the Taraki regime. Amin executed many Parchasmists to reinforce his power. The overthrow damaged the communist revolution that was attempting to spread across the country. The communist governance was now by the winter of 1978 met with armed insurgency across the country. Amin and Taraki signed a treaty allowing direct Soviet military assistance against any insurgency threatening the regime.
In mid-1979, the Soviets began to sends advisers to Bagram Air Base outside Kabul. In response, the Carter Administration started supplying non-lethal aid to Afghan Mujahideen, a Sunni Islamic insurgent group. Amin believed the Soviet intervention was designed to strengthen Taraki at his expense. As a result, Amin ordered the death of Taraki in October of 1979, earning the ire of the Soviets. Additionally, Islamic fighters were defeating the Afghan army and the Soviets were forced to either lose their foothold in Afghanistan. As such, the Soviets invades Afghanistan on December 26, 1979, and initially sent in motorized divisions and Special Forces. The Soviets killed Amin and installed Barak Karmal as head of Afghanistan. President Carter subsequently stepped up aid to the insurgents and announced his own doctrine to protect Middle Eastern oil supplies from encroaching communism. Washington wanted to make the Soviet occupation as painful and as brief as possible. The Soviet war in Afghanistan ended up lasting 10 years and millions of lives lost. The Soviets spent $50 billion dollars and lost 15,000 men in addition to a strong uprising emerging in Afghanistan, this igniting a civil war.
After the Soviets left in 1989, Afghanistan was destabilized and was characterized by various political groups vying for power. The Taliban, an Islamic fundamentalist group, ultimately took power by 1992. The Taliban would later allow Osama bin Laden to establish training bases in Afghanistan beginning in 1996. Their rationale behind this decision was to make Afghanistan an outpost for Wahabbi Islam and to ultimately attack Iran, which is majority Shi’a and strongly opposed to radical Islamic ideologies.
Afghanistan would subsequently suffer from major social, political, economic, and governmental problems following the 2001 invasion by the United States. The result of the invasion would be the exacerbation of all the problems in Afghanistan from food shortages to increased levels of violence precipitating the region and more complex problems arising. Before the invasion, millions of people were on the edge of starvation and many aid groups had to leave before the invasion because it wasn’t safe. The number of civilian casualties in Afghanistan is increasing every year. A United Nations Assistance in Afghanistan report states ” During the time covered by this report, 157,987 Afghans were displaced because of the war. This brings the estimated total number of conflict-induced displacement Afghans to 1.2 million.” All this is indicative of 40 years of intervention by NATO in a conflict-prone area increasing casualties and failing to solve the problem through the use of diplomacy.
Methodology
The paper will use various variables relating to the state of Afghanistan, either progressing further into or out of a “failed state” that help demonstrate government legitimacy. The United State’s relation to that progression or regression will be key in the country. Such variables like civilian deaths per year (graphs/charts, including deaths from violence), drug production levels (estimated # of tons), internal/external displaced populations (note population displacement is hard to calculate and numbers often conservative, Afghans are the 2nd largest refugee population in the world).
The fiscal problems facing the Afghan government include a small GDP and a heavy reliance on foreign money from the United States. Looking at insurgent attacks over the last decade will help paint a picture of future violence. The goal of the gathering of these statistics is to map out where the future of Afghanistan is headed and to provide an overview of the growing problems in the country. In relation to these problems, the United States & Soviet Union’s role in the country may be positive or negative. What has been the effectiveness of the United States at legitimizing through solving these problems? Examining basic areas of spending patterns will support understanding on if investments proved worthwhile long-term (10-15 year period).
There are some limitations to this analysis, however. One such issue is the measurement of insurgent members in Afghanistan. Finding this data is difficult due to the fact that many attacks are unreported because the government of Afghanistan does not have effective record-keeping procedures. As such, the level of casualties is used to help blanket insurgent levels. Looking at micro use-spending habits could also prove difficult to uncover and total spending habits also may be hard to figure out, as a result of how certain projects are classified. Examples could include, weapons programs being tested, use of special forces, the cost of technology, soldiers with PTSD or other medical issues that encompass US Spending in Afghanistan. The numbers keep growing and examining simpler terms would provide a better overview of the situation rather than smaller difficult programs to map out the impacts. Determining the number of munitions dropped by the US in Afghanistan alone is an impossible task for the research to dive into because there is a lot of shock and awe tactics (where large sums of bombs are dropped quickly). The cultural, linguistic, and religious variables that affect Afghanistan will not be included. A 14-week schedule makes an analysis of a wide variety of data difficult at best. The motivation behind the methodology is to look at simpler variables to construct a conceptualization and overview of Afghanistan at present as well as its future. The research is by no means to suggest solid claim of Afghanistan future but merely a roadmap in the direction in which the country is heading.
Literature Review
Carl Von Clausewitz was one of the earliest philosophers who studied the notion of warfare.
The philosophy of war has a long and arduous history ranging from the Ancient Greeks to the modern members of Congress that make military decisions. The literature review will focus on contemporary theorists in the philosophy of war. One of the earliest theorists was Carl Von Clausewitz, a 19th Century Prussian general, and military theorist. Primarily influenced by the Napoleonic Wars and Frederick the Great, Clausewitz focused on the moral and political aspects of war and said that “War is the continuation of politics by other means.” According to Clausewitz, the US war in Afghanistan would be considered an unideal and unjust war due to the fact that the US has been indiscriminate in harming civilians and other non-military targets.
On the other hand, John Keegan has the opposite perspective and is referred to in political science as the anti-Clausewitz. His perspective is that modern wars like Vietnam were not immoral and instead fought the wrong way. Essentially, Keegan is saying that it is not the crusade that was wrong but the way the crusade was carried out. According to Keegan, the War in Afghanistan would be perfectly moral and flawed only due to the fact that the US did not entirely commit itself to fight the war successfully. Keegan would suggest that the US should dramatically expand its presence in Afghanistan and not hold back in its efforts to prosecute the war to a successful conclusion.
it is not the crusade that was wrong but the way the crusade was carried out
Neorealism is another well-known theory in international relations.
Kenneth N. Waltz, Patrick James, and David Fiammenghi are proponents of neorealism. The neorealist theory states that international politics is defined by anarchy, and by the distribution of capabilities. As such, there exists no formal central authority and that every sovereign state is formally equal in this system. The states, in turn, act according to the logic of self-help, meaning they seek their own interest and will not subordinate their interest to the interests of other states. Additionally, the security dilemma in realism states that a situation in which actions by a state intended to intensify its security, such as increasing its military infrastructure or building alliances, can lead other states to respond with similar measures, producing increased tensions that create conflict, even when neither side desires it.
Charles L. Gaster is a proponent of the concept of the security dilemma and illustrated the political consequences of military strategies within individual countries. Gaster stated that “The first focused on military capabilities and implicitly assumed that the basic goals of the Soviet Union were fixed; its central concern was to determine what military capabilities the United States required to deter or defeat the Soviet Union. The second component focused on what I term political consequences the effect of U.S. policy on the basic goals of the Soviet Union and on Soviet views of U.S. resolve. Sharp disagreements about political consequences played an important role in dividing the American cold war debate over military policy.”
Another theory in realism is the prisoners’ dilemma. As described by Robert Jervis and R. Harrison Wagner in a January 1978 World Politics journal article, the prisoners’ dilemma shows why two completely rational individuals might not cooperate, even if it appears to be in their best interests to do so. An example could be the dynamic between Iran and Russia on one hand, and the US on the other hand regarding the Syrian Civil War.
Defensive Realism is the theory that aggressive expansion as promoted by offensive neorealists upsets the tendency of states to follow to the balance of power theory, thus decreasing the primary goals of the state, namely ensuring their security. Kenneth N. Waltz considered the founder of defensive realism as a theory, explains his perspective on international relations after the cold war by stating that the “one condition for success is that the game is played under the shadow of the future. Because states coexist in a self-help system, they may, however, have to concern themselves not with maximizing collective gain but with lessening, preserving, or widening the gap in welfare and strength between themselves and others. The contours of the future’s shadow look different in hierarchic and anarchic systems ”
Offensive Realism holds the anarchic nature of the international system responsible for aggressive state behavior in international politics. John Mearsheimer is one of the first who explored this theory in his 2001 book “The Tragedy of Great Power Politics.” Offensive Realism depicts powerful states as power-maximizing information control entities, that force others to fight while they are on the sidelines, overbalancing strategies in their ultimate aim to dominate the international system. Contributing theorists include Glen H. Snyder, Eric J. Labs, Fareed Zakaria, Colin Elman, Randall L. Schweller. Steven E. Lobell writes, “According to offensive realism, security in the international system is scarce. Driven by the anarchical nature of the international system, such theorists contend that states seek to maximize their security through maximizing their relative power by expansionist foreign policies, taking advantage of opportunities to gain more power, and weakening potential challengers. The state’s ultimate goal is hegemony. How a state will go about expansion will vary from nation to nation (due to geography, military tradition, etc.)—offensive realism does not predict the same security strategy for every state. ”
Is there an offensive-defensive theory of realism? According to Sean M. Lynn-Jones, “Offensive-defense theory argue that there is an offense-defense balance that determines the relative efficacy of offensive and defensive security strategies. Variations in the offensive-defensive balance, the theory suggests, affects the patterns of intentional politics.”
The Neo-Classical realist perspective is closer to the defensive realistic perspective, the actions of a state in the international system can be explained by systemic variables, the distribution of power capabilities among states, as well as cognitive variables, such as the perception of systemic pressures, other states’ intentions, or threats and domestic variables such as state institutions, elites, and social actors within society, affecting the power and freedom of action of the decision-makers in foreign policy. While holding true to the neorealist concept of balance of power, neoclassical realism further adds that states’ mistrust and inability to perceive one another accurately, or state leaders’ inability to mobilize state power and public support can result in an under expansion or under balancing behavior leading to imbalances within the international system, the rise and fall of great powers, and war.
Gideon Rose states that “Neoclassical Realism argues that the scope and ambition of a country’s foreign policy are driven first and foremost by the country’s relative material power. Yet it contends that the impact of power capabilities on foreign policy is indirect and complex because systemic pressures must be translated through intervening unit-level variables such as decision-makers’ perceptions and state structure.”
Noam Chomsky is a critic of the idea of American Exceptionalism.
Relative material power brings the discussion to the United States with its exceptional power over other nations. American Exceptionalism is the idea that American is unique and superior to other nations, Marilyn B. Young, a Harvard scholar on American Foreign Relations, says “There’s an arrogance born of power”. In here view America has become very deceptive in how a leader in government talk about, how the military reacts to war and the lack of transparency in some areas. Noam Chomsky depicts the United States as a country which goal of its foreign policy is to create more open societies where the United States can expand control of politics and the market.
In contrast, Neo-Conservatives think that the military is there for the United States to use it. Essentially we have the power so we need to use it to push our way into practice by force. Senior officials in the Bush Administration such as Vice President Dick Cheney and Secretary of Defense Donald Rumsfeld are prominent followers of this ideology which is an extension of American Exceptionalism. Former UN Ambassador Jeane Kirkpatrick is another neoconservative who criticized the foreign policy of Jimmy Carter, who endorsed de-escalation of the Cold War.
Another component of neoconservatism is the Bush Doctrine, which holds the idea of a preemptive attack on perceived enemies of the US. William Kristol, a supporter of the Bush Doctrine, wrote in 2002 that the “world is a mess. And, I think, it’s very much to Bush’s credit that he’s gotten serious about dealing with it. … The danger is not that we’re going to do too much. The danger is that we’re going to do too little. ” Neo-Conservatives hold true the idea of policing the world as a way to ensure political peace and stability and would argue that intervention in Afghanistan by the US is an appropriate step for this goal.
Current Problems Facing Afghanistan
The decade-long Soviet intervention in Afghanistan left 15,000 Soviet military personnel and nearly a million Afghani civilians dead. The war was a proxy for the United States against the Soviets in which the United States used “our gold and their blood” (referring to Afghani civilians). During the war, the CIA encouraged Islamic extremists to join in the war to defend Islam against an invasion by the “godless Communists.”. Much of the weapons in Afghanistan today were paid for by either the United States or the Soviet Union and left there an estimated total of 45 billion dollars in arms/ammunition. The mass amounts of weapons would aid the conflict of the civil war that plagued Afghanistan from 1989 to 1996. The Taliban came to power in the ruins of the civil war and ruled Afghanistan as an Islamic state based largely on the ideology of Wahhabism. Bin Laden would later find refuge there where he helped the government fight off the Soviets in the 1980s and was largely viewed as an honorable man within Afghanistan due to the fact that he successfully repelled a foreign imperialist invader who sought to install an illegitimate government into power.
The United States invaded Afghanistan on October 7th, 2001 in retaliation for the 9/11 attacks. The Taliban government did not provide any material support or personnel (mostly Saudi Nationals) for the attacks on 9/11, though they allowed Osama Bin Laden to have a safe haven. The Taliban refused to release Bin Laden to the United States and said they would give him to a neutral 3rd party. The United States rejected their offer. The Taliban also asked for evidence and the US declined their request. According to the UN and aids groups, prior to the invasion, it was thought there would be a mass famine where millions would starve because of Afghanistan’s dependence on foreign food. After the United States bombed Afghanistan for 2 months, the Taliban government ultimately surrendered in December of 2001. The United States would install a government that Afghani civilians view as illegitimate, corrupt, and weak. Displacement of the population is one of the biggest problems in Afghanistan and the Middle East from war and conflict.
Afghanistan has one of the worst population displacements problems in the world. Afghans make up the 2nd largest refugee population in the world and it is estimated that 3.7 million Afghans have been displaced by the conflict in the last decade or so. That is a daunting number no government or institution can handle alone to manage. One million are estimated to have fled to Iran, another 1.5 million into Pakistan. From a 2014 report, 700,000 are expected to be displaced in Afghanistan itself. Every year the numbers get worse and worse, more death and more casualties beating the last year. There is a variety of reason for this but many civilians die in either ground engagements or through IEDs that are leftover or part of the current war. The surge under President Obama, which was the deployment of 30,000 additional troops to Afghanistan, did not make Afghanistan safer and their withdrawal has not reduced the casualties rates. Killing members of Taliban have only created more instability and turned various areas of the country into a devastated war zone. In this climate, these policies undermine government legitimacy constantly because the government cannot provide basic necessities. Additionally, this policy has the government of Afghanistan largely taking orders from NATO and the US, which have large cultural differences and questionable understanding of the country. For example, Afghanistan is predominantly Muslim (~85-93% Sunni and ~7-15% Shi’a) and the main languages spoken are various dialects of Farsi (an Iranian-based language which is not widely taught in the West).
Heroin usage and production is a major problem facing Afghanistan, as it produces 80-90% of the world’s supply of Heroin. The Taliban profits nearly a billion dollars a year from the trade, namely by exporting opioids to other countries. It is estimated that there are around 1.6 million drug users in Afghan cities and another 3 million in the countryside. Unfortunately, the opium production has helped fuel severe problems with addiction to opium which has worsened the situation in Afghanistan. In 2001, The Taliban government issued a fatwa forbidding heroin use, which essentially put a stop to the problems of its use in Afghanistan. The US invasion that same year and the subsequent installation of Hamid Karzai as the Afghan President saw the prior ban go away and thus opium production skyrocket starting in 2002.
The US invasion had multiple coalitions of groups such as the Northern Alliance in Northern Afghanistan and the Puston Warlords in the South-East who also played a major role in the trafficking in Heroin which would result in it’s come back largely in Afghanistan. The whole story isn’t told there, “The drug trade accounted for most of its tax revenues, almost all its export income, and much of its employment. In this context, opium eradication proved to be an act of economic suicide that brought an already weakened society to the brink of collapse. Indeed, a 2001 U.N. survey found that the ban had “resulted in a severe loss of income for an estimated 3.3 million people,” 15% of the population, including 80,000 farmers, 480,000 laborers, and their millions of dependents”. As such, banning opium, which was largely pushed by Westerners, was a severe miscalculation on the part of the Taliban-led government. Ideally, it would have been smarter to have a transition period meant to phase out opium production and allow those whose livelihood depends on its production to developing alternative sources of income.After the invasion in 2001, the Taliban went back to selling heroin to fund the insurgency but there are other segments that sell and control opium distribution.
Prior to the Soviet-Afghan war (1979-1989), opium production in Afghanistan and Pakistan was directed to small regional markets. There was no local production of heroin. The CIA helped design the Afghan Narcotics economy to fund the Taliban and launder money during the War against the Soviets in Afghanistan. Currently, the problems of heroin fuel the insurgency and corrupt the government while increasing drug usage both inside and outside the country. The US would later spend 7.6 billion to eradicate opium in Afghanistan and in every measurable way they have failed. Instead, it helps fuel the insurgency by upsetting locals and fueled government corruption. Again undermining the legitimacy of the government while pushing cultivation practices that they have helped start in the first place. That 7.6 billion wasted in opium eradication is just the tip of the iceberg with unsustainable spending patterns.
The financial problems facing the Afghan government, such as a small GDP and reliance on foreign money from the United States and others present serious problems. The reliance of foreign money make long-term success difficult and, if foreign money is withdrawn from the economy, the government would collapse. Corruption is also a major problem in Afghanistan. Many hands are taking money out of the government coffers for personal gain. The corruption isn’t something that is only on the local level but stretches all the way to the top. It’s difficult to measure the level of corruption but there are key findings to support the idea that the Afghan government has serious corruption problems which undermine the government as an institution and waste precious money needed to support the Afghan people. In 2012, nearly half of Afghan citizens paid a bribe while requesting a public service and the total cost of bribes paid to public officials amounted to $3.9 billion US dollars. This corresponds to an increase of 40 percent between 2009 and 2012. So the government abuses its position which increases the cost for the people who pay taxes and then pay again to get something done. A snapshot of Afghan culture is that bribery is embedded in social practices, with patronage and bribery being an acceptable part of Afghan culture. These practices of bribery are also in other regions without government.
Non-governmental groups like village associations and the Taliban have patronage systems. Bribery usually occurring in government to change police or judicial results or provide governmental services faster. The bribes can undermine government institutions which are flooded with money. Examples of government corruption can be to keep a family or relative from going to jail by paying the judge or police off. An instance of corruption is the people put in power, namely family relatives, for example, the director of Education was put in power because of his relatives but could not read or write.
These problems are worsened by the uncertainty of how long the US will stay and fight. If one thinks they’re leaving next week or not here to stay then obviously you’re going to abuse the money that comes in. You have elections where they have large accusations of voter fraud and reinforcement of the idea that Afghanistan looks like a “tin-pot dictatorship”. It costs somewhere around $12 billion dollars a year to train Afghan security forces and neither the US nor the Afghan government can sustain that figure. So in no way is the situation an economically manageable one, especially with record numbers of security forces being killed and high levels of desertions. “Between October 2013 and September 2014, more than 1,300 Afghan army troops were killed in action and 6,200 were wounded”. Senior US Officers have called that “unsustainable”. Desertion is a problem but there are poor numbers on this so it’s just important to mention it as a problem. The Taliban have been killing more and more people in the security forces and expanding their territory.
Growing insurgency problem across the countries level of violence grows worse.US Policy may appear to be helping reinforce insurgency numbers. The basic premise of counter-insurgency strategy is you’re only as good as the government you represent. The government that represents Afghanistan lacks legitimacy with Afghan people and it can’t even hold the Taliban at bay. While the US in for example in 2011, was killing 360 insurgent leaders in a 90 day period using Special Forces, there were more attacks against coalition forces and no reduction in overall violence. Basically, it goes back to the old adage of “if you hit me, I hit you.” Abdul Hakim Mujahidin, the Taliban Envoy to the UN from 1998 to 2001 said” They consider that the continuance of the war in this country is not for the benefit of their people. But in practice, they are using their military against the Taliban. They are forcing the Taliban to respond militarily”. Osama Bin Laden was not part of the Taliban but Al Qaeda and his objective were to drive the US into Afghanistan to shatter will at home and push US and Allies to get out of the Islamic world. The war in Afghanistan is now the longest war in US history and the US government has still been unable to ensure Al Qaeda’s come back into Afghanistan. Some reports show drone strikes are counterproductive and other say they are. It’s hard to tell productive ones from unproductive ones when they target high-ranking leaders but when they kill innocent civilians or low-level combatants they can help fuel an insurgency.
What has the US Invested For Afghanistan’s Success? The United States is spending too much money on Afghanistan, so much so that the numbers are often unknown or hard to pin down. Many different sources provide different estimates for costs on different things, but to figure out the total and cost year by year is simply too long of a process. For instances, some institution will say the cost of Iraq X and others Y. From Pew, it was shown that the US is spending around $16-17 billion dollars a year on counter-terrorism. What exactly does that cover? Again hard to pin down what exactly all these funds are being spent on. You also have heightened violence which is going to require more mobilization of the military to things like Veterans health which are extremely costly. These costs are often stuck with other wars. Here are some estimates on the spent money in key areas, reconstruction, $110 billion dollars, the largest portion of that is $60 billion being spent on training Afghan security forces.But this may not be accurate because many costs are left out of such reports so it’s better to give a bulk total of 4 to 6 trillion on the costs then try to micro-manage every cost exactly into the bill. Again this is unsustainable spending and if the US pulls out tomorrow and loses everything much of that investment could prove worthless, which is why many are reluctant to do so.
At the same times it getting harder for members of Congress to justify trillions of dollars spent for a deteriorating situation. The government gives aid to Pakistan and sometimes that aid is used to train the Taliban and other groups while fighting against Al Qaeda. Pakistan has received military aid from the US since 1948. Since 2001, the US has given Pakistan roughly $2 billion per year in military and assistance some of which has been used to support insurgent groups.This aid has gone up and down and appears to have no effect on reduction of violence in Afghanistan or Pakistan. These failures undermine the US influence in Muslim countries and appear to not give the Afghan government more legitimacy. Instead, it is akin to throwing money down a drain and hoping that something sticks.
American Exceptionalism
American Exceptionalism is the idea that America is unique, just and always on the side of good. The idea of American Exceptionalism date back to the founders, but has become largely ingrained in American Society and Politics in the 21st century following World War II. The American Military is a manifestation of this Exceptionalism and when it does something with the use of force it is always to protect our Democratic system and protect our national interests. An example of this is the perception of the Iraq where US citizens perceived the invasion of Iraq to be freeing the people of Iraq and keeping the world safe for democracy. The truth tends to be different from the perception by the American public. There is the problem of Amnesia, where people forget what the US had done wrong like people will say the government did that in the past or not remember it at all.
People also preach the perceived values of the US even if their false and the idea the US has the right to break the rules to enforce the appropriate world order. This type of clouded perception of US intervention has helped lead to two costly wars, namely, Iraq and Afghanistan. The Idea that the US was on the side of right when it invaded allowed it to label others as the bad guys versus the good guys which is one of the biggest reason for the strategic blunder. The biggest mistake the Bush Administration admits too is not differentiating the Taliban from Al Qaeda. That mistake has helped continue years of bloodshed which looks like a result of that clouded perception by the US mindset and no victory coming closer. Again this idea of American Exceptionalism is a weakness Osama Bin Laden used to push the US to invade Afghanistan and undermine its legitimacy has a hegemonic power.
The United States repeated and made the same mistakes the Soviets did in Afghanistan such as invading the country and installing/propping up an illegitimate government. There is also a large disillusion that the problems could be solved in a few months where it would appear they cannot t be solved in 16 years. Both the Bush Administration and the Soviet Union thought they would have victory in Afghanistan relatively quickly, but long-term insurgency never seemed to be defeated completely. They would kill tens of thousands and there would be a battle the next day. There was also this feeling that once the Soviets got in, the fight was about “National Prestige”(Vietnam Syndrome)(much like American Exceptionalism). If they left they would shame their country, so the Soviets stayed for 10 years and then got kicked out. There was a very large disconnect between the Afghan culture, language and the invaders (US/Soviet). There continues to be a problem that stems very much from Afghanistan, Jihad to protect Islam whether or not it’s true it is an idea that has spread. There was the idea that both the Soviet Union and the US had about creating stability even though their actions did the opposite (referencing actions of Soviets in the 1980s vs the US today). In Afghanistan, they were almost always high casualties largely taken by poor farmers who felt they were defending their country or pro-government forces caught between tribal disputes. There is still consistent aid and travel by the Taliban in and out of Pakistan. There is also the problems of people deserting the Afghan army which the hegemony supports. Both countries become involved in a war they thought they won in weeks but ended up turning into something like the Sopranos where everyone is killing everyone and the hegemony is caught in the middle.
Possible Options To Increase The Legitimacy Of The Government Of Afghanistan *Gain control of opium production and put it under some form of governmental control. The government needs the money and many of them are already involved in the opium trade it’s a legal barrier of just legitimizing it to gain more secure control of the country. It always puts a lot of people to work and helps many people to make a living, after Afghan is more built up its possible to move it away from there after large improvements are made.
* Make peace with large portions of the Taliban and allow them to govern more legitimately (in the eyes in the Afghan people). This policy is difficult to implement and will require much work, negotiation, and large term forward-thinking on the part of policymakers in the US.
*Reduce bombing campaigns to be more strategic and at all costs reduce refugee populations
* Figure a way to build large housing developments in a cost-effective manner and again working with the Taliban to make a safer country long term. These policies would help alleviate problems of population displacement and allow the people of Afghanistan to live in safety.
*Work heavily with Iran, Russia, Pakistan, and other neighboring countries to improve stability within the Middle East. Some of the ways include increased military cooperation, political planning, and population management. Another solution is to partition Afghanistan between Iran and Pakistan. Iran would gain the primarily Shi’a Western regions of Afghanistan, whereas Pakistan would get the Sunni-dominated regions in Eastern Afghanistan. The key to this proposal is to implement it democratically through an UN-sponsored referendum. If this step is not done democratically, it can further embolden insurgents and make the already difficult situation in Afghanistan much worse.
*Governance should be looked at a provincial level rather than a Federal state (small self-governing provinces). Tribalism playing a role here.
*There needs to be a transition from a strategy of killing Taliban and Al Qaeda Leaders to legitimizing Afghan government, as key counter-insurgency means.
*Increase and incorporate region cultural understand, natural, economic and political problems as the heart of counter-insurgency.
What does Trump mean for the future of Afghanistan? President Donald Trump has made many negative and inaccurate statements about Islam, which does not do any good to help the image of the legitimacy of the Afghan government. Trump is appointing neoconservatives which are generally more hawkish than Neo-liberals such as President Obama or Bill Clinton. A more hawkish approach would be to increasing militarizing the situation by increasing bomb campaigns which will likely worsen the situation. Trump’s view of the conflict with terrorism as an ideologically struggle against where the enemy is 110% evil echoes the same problems the Bush Administration pushed where they failed (even Obama), a reasonable understanding of the situation is crucial to success. Trump seems to display a profoundly ignorant understanding of the conflict.
Trump has also spoken in favor of a hardened US policy towards Iran for the nuclear reason, which is largely rooted in ignorance and misunderstandings of the sorts. If a war was launched against Iran, it would ensure that Al Qaeda and other terrorist groups become stronger than ever. Iran borders Afghanistan and conflict in the area would make both countries less safe. Trump’s dislike for NATO could mean the United States occupies Afghanistan alone and increases the requirements for more troop deployments. Trump embodies the idea of American Exceptionalism in a negative way. Trump’s position on Russia was formerly stable, but his advisers pushed him away from that stance into a more confrontational one due to the issue of Syria. Trump has already reneged on many campaign promises so it’s hard to tell what the policy will be but he has surrounded himself with the people who lead the country into Iraq.
Conclusion
The United States and NATO need to refocus on why they are in Afghanistan and the plans for the future. If they plan to continue fighting heavily in Afghanistan they need a new long-term strategy. The United States needs to increase accountability with aid and better keep track of resources in order to maximize efficiency. Increasingly high casualties taken by civilians and security forces undermine government legitimacy. A record number of refugees destabilize the region where countries like Iran, Pakistan, and others taken in millions of refugees. The new administration coming in needs to make sure it uses forces to find a political solution and not to defeat the insurgency because ultimately Afghanistan will be solved by a political solution whether it be dividing Afghanistan up or other solutions like negotiating heavily with the Taliban. If the government wants to become more legitimate curbing corruption is a major hill to climb as well as developing a proper narcotics strategy that makes sure the Afghan people are put first. Poor results have been shown to develop with high levels of violence, high population displacement, high corruption, and war. Perhaps it’s impossible given the problems to remove the label from Afghanistan of Failed State under the next administration.
Citations
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The theory on democratization by Seymour Lipsett focuses on the relationship between economic development and the likelihood of a country to become and remain a stable democracy. In the 1959 article “Some Social Requisites of Democracy: Economic Development,” Lipsett hypothesizes that the more developed a country is economically, it is more likely that the country would be a democracy and be characterized by a more stable political situation overall.
For his study, Lipsett looks at a number of countries in both Latin America and Europe and uses several different indices such as per capita income, education levels, the percent of a countries population employed in the agricultural sector, and urbanization. Even though the indices were presented separately, they point in favor of Seymour Lipsett’s initial hypothesis that democracy and the level of development within societies are interconnected and show that if a country is more economically developed, the chances for the emergence of a democratic political system is much higher than for underdeveloped countries.
Lipsett’s study also suggests that the first step in modernization is urbanization, which is followed by media growth and literacy. The next stage is rapid industrial development, which fosters improved communication networks. The growth of advanced communication networks, in turn, encourages the development of formal democratic institutions such as voting and citizen participation in the decisions of their governments.
This article is a response to the article “Some Social Requisites of Democracy,” written by Seymour Lipsett in 1959 and available at: http://eppam.weebly.com/uploads/5/5/6/2/5562069/lipset1959_apsr.pdf
In the article “The political economy of democratic transitions,” Stephen Haggard and Robert Kaufman explore the effects of socioeconomic factors on democracy. Since the early 1970s, articles by Dankwart Rustow on democratic transitions have been reference consistently by experts. Rustow analyzed the socioeconomic, political, and psychological prerequisites of democracy. Democratization is the result of regime change, among numerous other factors. Most contemporary theories of democratization do not specify the resources that contending parties bring to negotiation and do not consider what is at stake for those involved. In contrast, the approach by Kaufman and Haggard examines the leverage of incumbents against the opposition. Additionally, they look at ten middle-income countries in Latin America and Asia to better explain where democracy came from.
Stephen Haggard and Robert Kaufman start in the 1970s. Guillermo O’Donnell argued that economic changes create issues and incentives for militaries and individuals to abandon democracy and turn to authoritarianism. Additionally, Juan Linz and Alfred Stepan (other theorists) instead argued that electoral institutions increased polarization (such as the recent Clinton-Trump Presidential divide). Both Linz and Stephan argue that polarization is a reflection of a failure of democratic leadership.
The collapse of authoritarian regimes in Southern Europe and Latin America during the 1970s and 1980s increased interest in democratic transitions. During this period, politicians were influenced by Rustow’s emphasis on strategic interaction and negotiation. For example, after the Cold War, a number of new democracies throughout Europe due to these strategic negotiations.
The approach by Stephen Haggard and Robert Kaufman focuses on the effects of economic circumstances on the preferences, resources, and strategies of the most important political actors in democratic transitions. In addition, they recognize that many factors contributed to the democratic transformations of the 1980s and 1990s such as diplomatic pressures, structural changes associated with long-term economic development, and the spread of democratization within neighboring countries Moreover, Haggard and Kaufman argue that there is no relationship between regime change and economic crises.
Stephen Haggard and Robert Kaufman go over the responses to the economic crises by authoritarian regimes. The financial crises of the 1970s and 1980s were far reaching and cut across all social classes, necessitating policy reform. Kaufman and Haggard argue that poor economic performance reduces the power of authoritarian leaders. Economic declines such as the 2008 Great Recession alter the status quo between governments and the private sector. Cooperation between private sector business groups and authoritarian rulers is crucial for the stability of authoritarian rule. If the private sector loses confidence in the ability of the government to manage the economy, businesses begin supporting opposition groups. In contrast, even though authoritarian regimes may decline in periods of weaker economic growth, they have greater power in a stronger economy because of public dissatisfaction.
Stephen Haggard and Robert Kaufman go on to further support their arguments by comparing transitions from military rule in ten different countries. The six crisis transitions the look at include Argentina, Bolivia, Uruguay, the Philippines, Brazil, and Peru. The regime transitions in Argentina, Bolivia, Uruguay, and the Philippines occurred during economic downturns. Even though the transition in Brazil occurred during economic recovery, it experienced severe economic shocks several years earlier and still continued to face a series of unresolved adjustment challenges at the time of their respective transitions. The four non-crisis transitions they examine are Chile, South Korea, Thailand, and Turkey. The authoritarian governments in these transitions withdrew due to a variety of international and domestic political pressures. Additionally, the transitions in each country occurred against the backdrop of strong economic growth and economic stability. These conditions help to account for variations in the terms of the transition and the political alignments that emerged under new democratic regime.
The first area that Stephen Haggard and Robert Kaufman look at is the terms of the transitions in both the crisis and non-crisis scenarios. One area in which the differences between the crisis and non-crisis cases exists is through the processes through which constitutional orders were written and implemented. In Chile, Turkey, and Thailand, the transitions occurred under constitutions drafted by the outgoing authoritarian government. Even though incoming opposition political leaders succeeded in including some amendments, these constitutions provided the framework in which new democratic governments operated. On the other hand, opposition forces held much greater influence during crisis transitions. Their influence was particularly strong in the Philippines and Argentina. In such cases, opposition political leaders made choices with little input from the outgoing government and returned to the constitutions in effect prior to authoritarian rule. The relative strength of authoritarian and opposition forces in the negotiation process also influenced governmental design. The two objectives of outgoing authoritarian rulers were to preserve the military’s organizational autonomy and to impose limits on the opposition.
Stephen Haggard and Robert Kaufman then go over the fact that outgoing authoritarian political leaders often create authoritarian enclaves in the noncrisis transitions. The main authoritarian enclave set up by the outgoing authoritarian rulers was the military. For example, Thailand’s military continued to be a dominant force in its political system despite the country’s transition towards democracy and Pinochet remained as the commander of the Chilean military after he stepped down from power in 1990. Additionally, civilian oversight of the Turkish army remained limited after its transition to democracy in 1983. On the other hand, economic difficulties and loss of support prevented outgoing leaders from preserving either military prerogatives or other means of political influence in the crisis scenario. In the case of the Philippines, the military provided crucial support for the democratic transition and thus had considerable support within the new democratic government. Additionally, the Brazilian military retained the most extensive institutional rights of any military among the crisis transitions but left office constrained by deep internal divisions and a decline in support among both politicians and the general public. As a result, its influence on the new Brazilian constitution is relatively limited when compared to a number of non-crisis transitions such as Chile and Turkey.
Restrictions on political participation is another way in which both the non-crisis and crisis scenarios vary. In the non-crisis transitions, mechanisms of exclusion range from bans on political activity and outright repression to subtle manipulation of electoral laws. Exclusionary mechanisms were most visible in Turkey. For example, the government used legal restrictions on Islamic fundamentalism to clamp down on press freedom. The main labor confederation also remained banned after the transition in 1983 and the government sought to persecute union activists. Moreover, the Turkish military also banned numerous political organizations. On the other hand, the elimination of restrictions on labor and political groups was much more evident in the crisis cases. For example, labor unions regained the right to organize, strike, and press their political demands in countries such as Bolivia and many of the countries characterized by crisis transitions implemented open electoral laws that resulted in the development of strong multi-party political systems.
Stephen Haggard and Robert Kaufman also explore the political economy of new democracies. Even though both Haggard and Kaufman reject the notion that social interests determine the prospects for democracy, they recognize that the opportunities for political elites to mobilize support is dependent on how economic policy affects the distribution of income across different social groups. The first important factor that Haggard and Kaufman note is that the economic legacy of authoritarian rule determines the policy agenda of democratic successors. New democratic governments that come to power in the wake of crises confront a difficult set of economic policy choices. New democratic leaders can often trade political gains for short-run economic losses, but the transition itself raises expectations that government will respond to new political challenges. Additionally, policy reform is difficult because economic problems are pressing and demands for short-term economic relief are widespread. Economic evidence from middle income developing countries provides broad support for these expectations. For example, average budget deficits were almost twice the level of the pre-transition period, whereas in the noncrisis cases deficits remained low. Moreover, four of the crisis cases (Brazil, Argentina, Bolivia, and Peru) experienced hyperinflation during their first democratic governments.
In the noncrisis transitions, new democratic governments faced a different agenda of policy reforms. Even though economic reform was less pressing, even the most economically successful authoritarian governments were faced with societal issues that could erupt under democratic rule. Among the noncrisis transitions, the consequences of a large social deficit were most evident in Turkey, where inequality grew steadily during the 1980s. Despite such challenges, many of the countries that experienced non-crisis transitions made headway. For example, Chile’s democratic government had some success in reducing poverty and allowing for increased economic equality while maintaining strong economic growth throughout the 1990s. On the other hand, the continuing power of interests linked to the old regime placed limits on the extent to which the new democratic governments could adequately address the economic demands of previously excluded social groups.
Stephen Haggard and Robert Kaufman also argue that the transition paths also affect the evolution of the political institutions by which economic demands and policy dilemmas are addressed. In the non-crisis cases, new democratic governments often had to deal with the persistence of nondemocratic enclaves, the autonomy of the military establishment, and links between political groups and business elites. Efforts to address political legacies risked to unravel the democratic bargain and make the respective societies more at risk to return to authoritarianism. On the other hand, the crisis cases exhibited a different set of institutional dilemmas. The overall economic circumstances encouraged executives to concentrate their authority. Such a pattern has been evident where economic issues require complex stabilization packages. Divergent forces within the party system also increased the difficulty of sustaining support and strengthened the incentives for executives to govern in an autocratic manner. Democratic institutions may also be undermined by a failure to take swift and effective action in the cases of severe economic crises. However, the absence of institutionalized consultation with legislators and interest groups deprives executives of needed feedback that may be essential to correct past policy errors.
In conclusion, Stephen Haggard and Robert Kaufman explore the impact of economic crises on democratic transitions in “The political economy of democratic transitions.” Their case study includes several different countries from Latin America and Asia and focuses on factors such as economic performance and the types of transitions towards democracy in each country. Through their study of the experiences of each country, Haggard and Kaufman conclude that economic policy and performance serves as a way to influence both transitions towards democracy and the future success of newly established democracies.
In the book “The development of underdevelopment,” Andre Gunder Frank discusses the factors that have resulted in underdevelopment in certain areas of the world and rapid development in others.
Dependency Theory is a concept based on the global relation of economic domination and exploitation by the more economically powerful countries over the less economically powerful countries. As a result of the unequal distribution of power and resources, some countries have developed at a faster pace than others. Frank further argues that we cannot formulate an adequate development policy for a majority of the world’s population without knowing how their past economic and social history influenced their current underdevelopment. Additionally, he states that we tend to believe that their history tends to resemble the history of the more developed countries and that such assumptions lead to misconceptions about contemporary development and underdevelopment.
The ideas regarding development that Frank expresses in “The development of underdevelopment” go directly against the ideas that Rostow explored in “The Stages of Growth.” Frank rejects the idea that underdevelopment stems from an individual country’s isolation from the larger world and due to the influence of more traditional societies. On the contrary, Frank believes that underdevelopment results from the unequal distribution of resources and exploitation of the less developed and emerging countries by the more developed countries through the so-called “metropolis-satellite relations” theory. Additionally, Frank rejects the development belief promoted by Rostow that an accurate way to explain development is to look at the past experiences of countries in North America and Europe. On the other hand, Frank believes that holding such views creates numerous misconceptions and prevents an accurate view of contemporary development from emerging.
Dependency Theory is the idea that resources flow from a “periphery” of poor and underdeveloped states to a “core” of wealthy states, enriching the latter at the expense of the former.
Additionally, it can be argued that the development theory proposed by Andre Gunder Frank is dissimilarly promoted by Seymour Lipsett in “Some Social Requisites of Democracy: Economic Development and Political Legitimacy.” In his work, Lipsett argues that economic development and the level of democracy go hand in hand and that increased economic development will, in turn, result in increased democracy and political freedom. Furthermore, Lipsett requires that studying democracy requires the scholar to look at the conditions that caused democracy to emerge in specific countries. Much like with Rostow’s theories, Frank would reject this view because it requires looking at past experiences in certain countries as a way to generalize the belief of economic development and democracy. Moreover, Lipsett’s theory ignores the relationship between powerful (core countries) and the less developed (periphery) countries and the fact that the developed countries taking advantage of the less developed ones resulted in an unequal balance of power on the international stage.
Andre Gunder Frank asserts that Latin America experiences its highest rates of industrialization during the period between the end of World War 1 and the beginning of World War II. As a case study, Frank focuses on the economy of Brazil and describes how its capital, Sao Paulo, became one of the largest and most developed industrial hubs in Latin America. Despite the rapid development of Brazil, Frank argues that Brazil will not break out of the cycle of underdevelopment due to its continued reliance on the more developed nations as a way to export its resources.
In the realm of economic development at the global level, there are a multitude of theories that can be used to explain the development policy of certain countries. Each of the different development methods focuses on several factors, ranging from the history of growth to the factors that have resulted in growth in some countries and underdevelopment in others. Two examples of development theory are Structuralism and Institutionalism. Institutionalism focuses on the importance of formal government and economic structures and considers reliance on both to be critical to economic stability. On the other hand, structuralism attempts to explain the structural aspects that have had an effect on economic policy in individual states.
Structuralist development theory emerged in the 1950s as a response to the perceived failures of Classical Liberalism, in particular, the belief that economic stability and growth stems from a stronger reliance on the free market as opposed to the governments of individual states. On the contrary, Structuralism attempts to identify specific inflexibilities and intervals of the structure of developing economies that affect economic changes and the choice of development policy. Structuralism also serves as a way to explain the failures of the free market to address issues such as the uneven distribution of income and the balance of payments disequilibrium in developing countries. The methodology of Structuralism is based on the belief in a dual economy and the concept of complementarity in demand, which underlies the theories of balanced growth. The idea of the dual economy stems from the observation that development operates unevenly both between and within different sectors of the economy due to inherent structural inefficiencies. Additionally, Structuralism argues that the differences between both developing and developed countries will not disappear overnight. Instead, the structural differences between the developed and less developed countries call for an entirely new analytical approach than the one offered by proponents of alternate theories.
One such country that Structuralism can be applied to is South Korea. Shortly after the end of the Korean War, the South Korea government set up policies that encouraged domestic savings and opened up the country to international trade. South Korea’s economy is defined by a high-level government intervention in the economy, and its political system was characterized by an authoritarian system until the late 1980s. As a result of government-led economic planning, South Korea’s economy grew at a rapid rate since the early 1960s and the country served as a model for successful state economic planning. In 1997 however, the South Korean economy experienced a severe downturn that came about as a result of a shortage of foreign currency. In the years since the financial crisis, South Korea has taken steps to restore confidence in its economy and to reform its previously lax regulatory structure.
The economic experiences of South Korea can be used to both evaluate the strengths and weaknesses of Structuralism. For example, Structuralism promotes the belief that the state must play a significant role in fostering economic growth and development. It can be argued that as a result of government intervention in the economy, the South Korean economy was able to undergo unparalleled success and emerge as one of the strongest economies in Southeast Asia. On the other hand, the fact that South Korean political leaders failed to heed the warnings that led to the 1997 financial crisis highlights the belief that structuralist theory may not adequately address issues such as market failure and may not be the best way to explain the causes behind financial collapses.
One of the most significant political theories of the 20th Century is Ayn Rands Objectivism. Rand is known for promoting the philosophical idea of objectivism. She defines objectivism as a philosophy that emphasizes personal freedom, individuality, and rational egoism. Her anthology of fiction books describes the political theory of Objectivism through the actions and speeches of the main characters. Her additional non-fiction works continue to explore that political and social philosophy. Rand was influenced by a number of theorists such as Aristotle and writers including Victor Hugo and Edmond Rostand. Objectivism is a controversial political theory and has been criticized by academic philosophers due to its view on the role of government and human nature. On the other hand, the popularity of Rand’s work continues to grow and has an influence on political thought to this very day.
Rand was born as Alissa Rosenbaum in 1905 in St. Petersburg to a middle-class Jewish family. From a young age, she expressed great ambition and an interest in pursuing a career in writing. A singular event that occurred in her early years was the 1917 Russian Revolution, in which the country transitioned almost immediately from a monarchy into a Communist state. She had numerous experiences in Soviet Russia that helped to mold her sociopolitical beliefs. For example, the nationalization of her father’s chemistry shop transitioned her family from relative affluence to poverty. Despite the loss of her family’s assets under the Soviet regime, she was able to attend university and graduate with a degree in history. Changing her name from Alissa Rosenbaum to Ayn Rand, she left the Soviet Union for the United States in 1926 to pursue her dream of becoming a screenwriter. Over the succeeding years, Rand found success first as a screenwriter, and eventually as a playwright and author.
Ayn Rand c. 1930s
An important factor that influenced Rand’s writings over the course of her life was her personal experience in numerous political eras. From monarchy in Russia, to the transition to the Soviet Union, to Great Depression era America, her youth was characterized by many stark contrasts in political and economic systems. Rand’s writings against communism were influenced by what she observed and she wrote numerous works outlining Objectivist theory throughout World War II and the early Cold War era. In response to the Cold War and the threat of Communism spreading worldwide, Rand cautioned against the belief of collectivism in books such as The Fountainhead and Atlas Shrugged. Both The Fountainhead and Atlas Shrugged are fictional works that promote the belief in personal freedom and rationality, and speak out against the spread of Communism and Socialism.
Ayn Rand personally cites Aristotle as one of her primary influences. Aristotle was a Greek logician, philosopher, and scientist as well as one of the founders of western political theory. Rand explains, “it is not the special sciences that teach man to think; it is philosophy that lays down the epistemological criteria of all special sciences.” Just as Ayn Rand believed that science was one of the most important values of society, Aristotle argued that politics is the master science because mankind is a political animal. As Aristotle believed in “biology expressed in the naturalism of politics,” his concept of morality and the world aligned with Rand’s concepts of philosophy and politics being inextricably tied to science. Similarly, Aristotle argued that mankind engaged in politics through all of its actions. Rand believed that each person acts as an individual to create the political society that exists. If each individual acts according to the principles and morals of Objectivism, such as those of rational thought and the execution of free will, sociopolitical order will naturally emerge. Aristotle contends that politics is the study of values, ethics, what is right and wrong, what should be, and what could be.
Despite the fact that Rand cited Aristotle as one of her primary influences, their views on the ideal form of government were dissimilar. For example, Aristotle viewed democracy as flawed because it resulted in competition between social classes and felt that the proper form of government consisted of its leaders governing with the common interest of all its people in mind as opposed to governing based on individual interests. Additionally, Aristotle felt that a key role of the government would be to provide for and promote the public good and explored the idea of the organic theory of the state throughout his works. The organic theory of the state theory stipulates that the power and authority of the state transcends the power of the individual. On the contrary, Rand believed that the role of government would be limited to protecting individual rights and serving as an agent for people’s self-defense. A government that promoted the opposite values, according to Rand, has no justification and is the primary threat to the structure and nature of human society.
One of the major values of Objectivism is a belief in rational egoism. Objectivism believes in the “concept of man as a heroic being, with his own happiness as the moral purpose of his life, with productive achievement as his noblest activity, and reason as his only absolute.” With this, Ayn Rand is saying there is no more important moral goal in Objectivism than that of achieving happiness. Achieving happiness, according to Objectivists, requires rational respect for the facts of reality, including those regarding human nature and our own needs. In order to achieve such goals, Rand argues that people must behave in a way that conforms to “rational egoism,” in which the promotion of one’s self-interest is in accordance with that of reason. Rand further promotes the logic of this theory in The Virtues of Selfishness. Rand argues that selfishness is a proper value to pursue and rejects the idea of altruism, the belief that self-sacrifice is a moral ideal to pursue. Additionally, Rand rejects the idea of “selfless selfishness” of irrationally acting individuals and instead argues that to be ethically selfish entails a commitment to reason rather than to emotionally driven whims and instincts.
In addition, Objectivism promotes a unique view on the nature of reality and views knowledge and reason as important aspects in society. Objectivism holds that “reality exists as an objective absolute—facts are facts, independent of man’s feelings, wishes, hopes or fears.” Rand’s Objectivism begins with three self-evident concepts: existence, consciousness, and identity. All three truths are interconnected and exist simultaneously. Ayn Rand goes on to further explain that anything that is metaphysically given is absolute and cannot be changed. Objectivism holds that all knowledge is reached through reason, the “faculty that identifies and integrates the material provided by man’s senses.” This view of reason in an Objectivist society was further exhibited by the main characters and themes in Rand’s 1957 novel Atlas Shrugged. The work dramatizes the idea that the reasoning mind is the basic source of the values on which human life depends.
Furthermore, Rand supported a belief in secularism through Objectivism and also promoted a distinct purpose of morality. Objectivism is a purely secular ideology that views the role of religion as having a negative influence on reason and capitalism. The purpose of morality under Objectivist thought is to allow people to enjoy their own lives. This belief is further exemplified by John Galt, the embodiment of Objectivism in Rand’s Atlas Shrugged, when he said, “The purpose of morality is to teach you, not to suffer and die, but to enjoy yourself and live.” Rand felt that religion is an “ideology that opposes man’s enjoyment of his life on earth” and thus, in violation of the key principles expressed though Objectivism. Objectivism rejects both mysticism (the idea that knowledge can be acquired through non-rational means) and skepticism (the belief that knowledge is impossible and cannot be acquired by any means). Objectivism also teaches us that a harmony of interests exists among rational individuals, so that no one’s benefit will come at the expense of another’s. As such, a life of mutual respect and benevolent independence is possible through Objectivism.
Objectivism includes several suggestions as to what constitutes a proper society. One such element is the support for individual rights and freedom from coercion. The ethics of Objectivism hold that each person can live and flourish through the free exercise of his or her rational mind. Unless faced with threats of coercion or force, it is essential for people to exercise their own free will. The threat of force makes people accept someone else’s dictates, rather than follow their own judgment. Rand argues that certain societies, such as that of the Soviet Union, and certain ideologies, such as communism, are doomed to failure due to the lack of individual rights and the use of coercion to limit freedoms. Rand further argues that “freedom, in a political context, has only one meaning: the absence of physical coercion” and that societies must secure the principle that no one has the right to use physical force or coercion against any other.
In “Capitalism: An Unknown Ideal,” Rand states, “government is the most dangerous threat to man’s rights: it holds a legal monopoly on the use of physical force against legally disarmed victims.” Objectivism calls for a limited form of government and promotes the belief that an excessive government is a threat to individual freedom. Additionally, Rand argues that the government also has a role in defending its people from foreign enemies, providing a system for arbitration of disputes, and developing a system for enforcement of the law. Objectivism also argues that the main source of government power comes from “the consent of the governed,” which means that the only rights that the government has are delegated to it by the citizens for a specific purpose.
Objectivism considers Capitalism to be a proper political economy. Rand considered capitalism in its purest form to be a social system characterized by individual freedom and diversity. Additionally, she felt that Capitalism was an egalitarian system that treated all people as individuals with no regard to ethnic, religious, or other collective principles enshrined by law. Moreover, Objectivism, like Capitalism, is a social system based on the recognition of individual private property rights. Objectivism expresses the belief that respect for property rights is key in the development of a capitalist economic system and as a way to ensure the upholding of individual rights and economic freedoms. Property rights are important to Objectivists because they ensure that people can keep what they earn. As Objectivism emphasizes production and creation, the property acquired through hard work is the most essential representation of the exercise of free will. Rand states that, “without property rights, there is no way to solve or to avoid a hopeless chaos of clashing views, interests, demands, desires, and whims.”
Not everyone, however, is fully receptive to Rand’s ideas on morality. While she does have a large following, there are numerous critics of her somewhat rigid interpretation of social values. One of the main points of criticism is her influence as a moral and political philosopher. For example, it has been claimed that the ideas expressed by Rand throughout her works are not important in the realm of philosophy and did not constitute and groundbreaking ideas. Furthermore, Rand’s view on ethics is also criticized, in particular, her defense of the morality of selfishness. The view on politics that Rand expressed in Objectivist theory is also criticized by some of ignoring the central role that government often plays in society.
In conclusion, Ayn Rand is one of the most influential political theorists of the 20th Century. Rand is known for developing the philosophy of Objectivism, which promotes the ideals of rational egoism, individual liberty, reason and knowledge, and secular values. Rand has expressed the idea of Objectivism through numerous writings, in fiction and non-fiction alike. Moreover, Rand’s views on sociopolitical issues were influenced by past experiences growing up in Soviet Russia and her early adult years in Depression-era America. Rand’s political philosophy still remains significant to this very day and her works continue to retain mainstream popularity.
Sources:
Ayn Rand , “Introducing Objectivism,” The Objectivist Newsletter Vol. 1 No. 8, August 1962, p. 35
Ayn Rand “Faith and Force: The Destroyers of the Modern World,” in Philosophy, Who Needs It? p. 62.
Bell-Villad, Gene H. “Who Was Ayn Rand?” Salmagundi 141/142 (n.d.): 227-42.
Miller, Fred. “Aristotle’s Political Theory.” Stanford University. 1998. Accessed February 24, 2016.
Biddle, Craig. “Atlas Shrugged and Ayn Rand’s Morality of Egoism.” The Objective Standard 7, no. 2 (Summer 2012).
Throughout the 2003 book FDR’s Folly: How Roosevelt and His New Deal Prolonged the Great Depression, Jim Powell argues that the policies of U.S. President Franklin Roosevelt and the New Deal did little to restore the American economy during the height of the Great Depression and that they only contributed to the stagnant economic situation and high rate of unemployment. In addition, he argues that the New Deal necessitated a heightened level of government intervention in the economy through the establishment of a myriad of regulations in nearly every aspect of economic life. To back up his argument, Powell examines the long-term effects of the New Deal and analyzes President Roosevelt’s policies in order to assert that they had an adverse impact on the economy overall. In the introduction, Powell attempts to clarify what went wrong during the Great Depression, declaring that it would have been “avoidable” with better governmental policies. He determines that “chronic unemployment persisted during the 1930s because of a succession of misguided New Deal policies.”
Overall, Powell’s assessment of President Roosevelt’s economic policies represents a new interpretation of U.S. economic history. The conventional belief among historians is that the New Deal reforms ultimately saved the U.S. economy from ruin and that the Great Depression was primarily caused by the lack of government regulation in the economy. For example, in the introduction to “The Great Depression: America 1929-1941,” historian Robert McElvaine argues that the Great Depression was caused primarily by the lack of government regulation and oversight in the economy, further stating that the policies of the New Deal ultimately succeeded in their goal to prevent another economic collapse as severe as the Great Depression. Additionally, McElvaine argues that President Roosevelt was too cautious with spending on the New Deal and that increased spending would have made the New Deal programs more efficient. In contrast, Powell argues that the Great Depression was caused in part by changes in monetary policy by the Federal Reserve in 1929 and due to the Federal Reserve’s failure to adequately respond to the subsequent drop in consumer demand.
Powell mentions that President Roosevelt harmed the economy by increasing taxes during his term in office. To end the Great Depression and restore economic stability in the U.S., Roosevelt sought to increase government influence over the economy by requiring higher taxes. Initially, Roosevelt pushed for higher excise taxes on products such as tobacco, liquor, and gasoline during his first year in office, and further sought to increase income taxes beginning in his second year. The 1934 Revenue Act impacted higher-income individuals, through raising taxes on all incomes above $9,000 annually. Additionally, the Social Security Act of 1935 introduced the payroll tax, which increased the cost of hiring people and prolonged high unemployment. The implementation of a variety of tax increases by the Roosevelt administration reduced the spending power of both average and wealthy Americans and prolonged the difficult financial situation.
Powell argues that the New Deal resulted in increased costs for consumers through the enacting of numerous federal regulations. Powell cites the National Industrial Recovery Act (NIRA), which set up the National Recovery Administration (NRA), as an example of a New Deal program that established new economic regulations. The primary goal of the NRA was to bring business, labor and government together to create codes of fair practices and to fix prices to reduce competition from monopolies. The NRA also implemented regulations requiring businesses to reduce output and keep established prices to increase the wages of their employees. In reality, the policies of the NRA increased the cost of consumer goods and did little to cure persistent unemployment. Additionally, the NRA created government-sanctioned cartels between industries through the establishment of uniform codes businesses had to follow. Ultimately, the NRA was struck down as unconstitutional by the Supreme Court in 1935. After the NIRA had been overturned, economists declared that “the NRA on the whole retarded recovery” by increasing regulations on businesses and raising the costs of consumer goods.
Powell then goes on to explore the economic effects of the public works program established through the New Deal such as the Public Works Administration (PWA), which was established to construct complex and large-scale public works projects such as highways, bridges, and dams. As a result, most PWA projects tended to employ skilled workers as opposed to poorer and unskilled workers affected most by the Great Depression. Much of the money allotted for relief and public works programs were also used to promote favoritism and patronage towards supporters of the Democratic Party and President Roosevelt, thus encouraging corruption at the highest levels of government. For the Democratic Party to attract the loyalty and votes of states such as Nevada and Utah, Powell contends that the Western region benefitted most from the New Deal public works programs even though the area was affected less by the Great Depression than the South and larger urban centers in the Northeast.
Powell contends that the recovery from the 1937-38 Recession was worsened by the Fair Labor Standards Act, which specified a minimum wage of 25 cents per hour. The implementation of a minimum wage depressed the economy by increasing the cost of hiring new employees and necessitating an increase in wages that many employers could not afford. The minimum wage particularly impacted African American agricultural workers in the South. For example, the Labor Department reported in 1938 that some thirty to fifty thousand workers, primarily southern African Americans, lost their jobs within two weeks of the implementation of the Fair Labor Standards Act. As a result of the economic downturn in 1938, many Americans began to turn against the New Deal, and it increasingly looked like President Roosevelt did not have a clear economic policy.
Despite the factual basis of Powell’s argument, there are several instances of bias throughout the text. For example, Powell shows bias towards the economic belief that reducing taxes and government spending is the primary factor that leads to economic recovery. Powell exhibits this conviction in the final chapter when he is comparing the recovery from the Great Depression with recoveries from preceding economic downturns. Powell mentions that the reason the U.S. recovered from the 1837 Recession and the 1920 Recession was through reductions in government expenditures and taxes. However, his comparisons may not be entirely valid, as at the time such economic downturns took place, the U.S. economy lacked the 1930s-levels of industrialization and globalization.
Moreover, Powell at times criticized President Roosevelt in a way that lacks objectivity. For example, Powell compares Roosevelt’s actions regarding economic regulation to the actions of dictators such as Juan Peron and Mao Zedong. Additionally, Powell accuses some of the advisors to President Roosevelt as pushing for socialism through their support of progressive economic policies. Powell then implies that President Roosevelt’s advisors pursued economic policies based purely on a form of idealism that did not take into account the potential negative effects of government intervention in the economy. The chapter titles may also serve as an indicator of Powell’s own bias, as they are worded as questions asking the reader why a particular policy of President Roosevelt and the New Deal negatively impacted the economy.
To sum it up, Jim Powell argues that the New Deal programs and the economic policy of President Franklin Roosevelt ultimately failed to end the Great Depression and instead worsened the economic situation in the U.S. In order to back up his arguments, Powell cites examples of President Roosevelt’s economic policy such as the low effectiveness of the public works programs, tax policy changes during the 1930s, banking policy, and economic regulatory policy. Overall, Powell makes a compelling case against the New Deal through the factual basis of his opinions, though his own personal bias takes away from the central focus of his arguments at times throughout the text.
Throughout the 1980 book The Elusive Republic: Political Economy in Jeffersonian America, Drew McCoy attempts to explore the competing economic visions in the U.S. during the aftermath of the Revolutionary War and how different leaders such as Thomas Jefferson, James Madison, and Alexander Hamilton had conflicting ideas regarding what economic system would be the most suitable for the newly independent nation. Hamilton advocated a commercialized economy in which manufacturing was fundamental. On the other hand, Madison and Jefferson felt that an agrarian economy would be best for the U.S. and would ensure its success as a nation. McCoy explores the relationship between political economy and morality and how this definition shifted during early American history. Furthermore, McCoy argues that the economic visions of Thomas Jefferson and James Madison were short-lived and that several factors prevented them from becoming permanent.
In the first chapter, McCoy discusses the debate during the 18th Century over economics and morality and how they would later influence the founding fathers. By the mid-18th Century, Europe was undergoing a commercial and industrial revolution that led to profound changes in its economic conditions. In addition, the rise of industrialization raised many questions about its effect on society and helped to alter the opinion regarding luxury goods. Since the middle ages, luxury was considered to be a corrupting influence in society and a danger to public welfare. However, the 18th Century marked a transitional period in the perception of luxury goods. As a result of increased materialistic impulses, some began to redefine the meaning of luxury and explore the societal implications of the increased emphasis on luxury goods.
McCoy describes the reaction to the changes in the economy by philosophers during the 18th Century. A major critic of the new social order was Jean-Jacques Rousseau. Rousseau argued that the commercialization of society would have a harmful effect on society and would promote a multitude of artificial needs and desires in men, to which they would become enslaved. Furthermore, Rousseau felt that the drive for status and wealth would never fully satisfy individuals and that it would increase social inequalities. In contrast, David Hume defended the commercialization of society that came as a result of the industrial revolution. Hume argued that the advancement of commerce, mechanical arts, liberal arts, and fine arts were interdependent on one another. As a result of their interconnection, Hume argued that the advancement of commerce would be beneficial to society by establishing a more refined culture. The differences in opinion regarding the growth of commerce and its effects on society would soon influence the debate in post-Revolutionary America over which type of political economy would develop in the new country.
McCoy first discusses the economic ideas of Alexander Hamilton, who served as Treasury Secretary under George Washington. The political economy of Hamilton advocated an aggressive expansion of American commercial interests and the development of a strong manufacturing sector with the cooperation of a strong federal government. Hamilton’s economic plan called for a funding of the national debt and the incorporation of the Bank of the United States, which would help the new government establish its credit and encourage the investment of private capital in the development of a commercial sector. Hamilton viewed the development of commercial relations with Great Britain as a way to supply America with the capital and credit that could ignite the economic growth that he envisioned .
Additionally, Alexander Hamilton felt that a manufacturing economy was a sign of social progress and that the social inequalities resulting from it were inevitable. Proponents of the Hamiltonian system argued that a growing manufacturing sector would also increase individual liberty by giving people more freedom in choosing an occupation. Hamilton’s economic policy was further pushed forward by the Jay Treaty, signed between the U.S. and Great Britain in 1794. In addition to averting a major war between both countries, the Jay treaty opened up limited trade between the U.S. and several of Britain’s colonies. The resulting increase in foreign trade helped to fuel further the commercial revolution and made its eventual spread to the U.S. increasingly inevitable.
In contrast to Alexander Hamilton, James Madison advocated a political economy that focused on agriculture and the growth of a household goods industry as opposed to rapid commercialization. The main component of Madison’s political economy was westward expansion and national development across space rather than across time. By encouraging a spread across western lands, Madison argued that the U.S. would remain a nation of industrious farmers who could market their surplus crops overseas to purchase manufactured goods from Europe. As a result, America could remain a young and virtuous country and at the same time offer a market for advanced manufactured goods from Europe. Unlike Hamilton, Madison believed that the rise of industrialization in countries such as Great Britain was a sign of moral and societal decay. He concluded that Hamilton’s plan threatened to subvert the principles of republican government and would lead to the “Anglicization” of the American government.
McCoy then goes on to describe the political and economic aspirations of Thomas Jefferson after his election in 1800. Jefferson described his election as a return to the original values and ideals of America that were overturned and repudiated under Federalist rule. The main aspects of Jefferson’s political economy included his advocacy of western expansion as a way to encourage the continued strength of a primarily agrarian economy; a relatively liberal international commercial order to offer markets for American agricultural surplus; and a reduction in government spending and the national debt. Through such steps, Jefferson sought to evade the social corruption of an increasingly commercialized society and preserve the republican vision of American society. Jefferson’s political economy was enacted through the Louisiana Purchase of 1803. By purchasing the Louisiana territory from France, Jefferson hoped that the addition of new lands would preserve the agriculture-based U.S. economy and add to his notion of a continuously expanding “empire of liberty” across the western hemisphere.
McCoy main thesis in “The Elusive Republic” is that the political economy advocated by Thomas Jefferson and James Madison ultimately failed and was not realized in the long term. Overall, the basis of his argument is strong and is based on several key factors. The first two factors were the outbreak of the wars resulting from the French Revolution in 1792 and the signing of the Jay Treaty in 1794. Despite the widespread belief that European demand for American exports would decline as a result of the wars, it instead increased dramatically after 1792. McCoy argues that the wars resulting from the French Revolution marked a major turning point in the American economy because it made it profitable for Americans to export goods and materials to Europe. Additionally, the Jay Treaty helped to open the door to increased international trade and cemented America’s economic ties with Great Britain.
Furthermore, McCoy argues that the Louisiana Purchase augmented the spread of slavery and in turn, undermined the political economy of Jefferson and Madison. Despite the fact that the Louisiana Purchase removed several obstacles to the realization to Jefferson’s republican vision, it also exposed some of the contradictions within his vision. For example, the supporters of Jefferson frequently boasted of the isolation and independence of the U.S., but in reality American republicanism depended on both an open international commercial order and the absence of any competing presence in North America. The U.S., McCoy argues, could isolate itself from foreign influences only if it were to resign itself from international trade and westward expansion (204). In addition, the Louisiana Purchase fueled the spread of slavery as the U.S. expanded westward. The Jeffersonian political economy had hoped by the controlled exploitation of land would reduce the need for slavery and that it would eventually die out. In reality, the demand for slave labor increased dramatically as the agricultural industry expanded westward (252).
In conclusion, Drew McCoy explores the competing economic visions in early America in The Elusive Republic: Political Economy in Jeffersonian America. The major figures in the debate over political economy in America were Alexander Hamilton, James Madison, and Thomas Jefferson. Ultimately, the political economy of Jefferson and Madison did not come to define the U.S. in the long-term, and several diverse factors prevented it from becoming permanent. Furthermore, McCoy discusses the implications of the shift towards a highly commercialized economy and the changing moral beliefs regarding luxury goods throughout the 18th and early 19th Centuries.
One of the most important aspects of the debate over economic policy is the effectiveness of the Minimum Wage and the prospects for its increase. The ongoing debate over the minimum wage is an important facet of the country’s economic future and helps to determine its economic competitiveness. Proponents of the minimum wage increase argue that the benefits of having a higher rate outweigh the costs. Opponents of a higher minimum wage, on the other hand, argue that a higher minimum wage is, in fact, harmful to the economy overall. The objective of this report is to discuss the effects of the minimum wage and to analyze the respective positions of both sides of the argument.
The first federal minimum wage law in the United States came into effect in 1938, through the Fair Labor Standards Act, which set the minimum wage at a rate of $0.25 an hour (roughly $4.13 in today’s dollars). In addition, the Fair Labor Standards Act also banned the use of child labor and set the maximum workweek at 44 hours (Grossman). Over the ensuing years, the minimum wage has been gradually increased to different levels. The most recent increase occurred in 2009, when the federal minimum wage rose by about 10%, from $6.55 to $7.25. Over the last several months, there have been various proposals discussed that would boost the federal minimum wage once again. The most prominent proposal came from President Barack Obama. In his recent State of the Union Address, President Obama suggested a $10.10 federal minimum wage, which would amount to a 40% increase from its current level. The proposed increases in the minimum wage ignited a large number of discussions on both sides of the political spectrum, with Democrats favoring the increase and Republicans nearly universal in their skepticism of such a plan. Furthermore, most economists cannot reach a consensus regarding the effectiveness of such a move.
Proponents of an increase in the minimum wage argue that a higher wage would not have a huge effect on businesses and would not lead to an increase in prices of goods. According to recent data compiled by the Center for Economic and Policy Research (CEPR), there is no direct evidence to claim that an increase in the minimum wage would have an adverse impact on employment. That data contradicts the argument used by opponents of increasing the minimum wage that any increase would have a detrimental effect on employment and economic growth. Furthermore, the same research shows that a hike in the minimum wage would not have a huge impact on the prices of goods and services provided by companies. For example, assuming that the minimum wage is to be increased by 10% over a 2 year period, the prices of goods would only increase by roughly 0.18%. Those increases in prices are negligible when compared to the overall gains in purchasing power for many workers.
Another argument in favor of increasing the minimum wage is that an increase will help to reduce the poverty rate. For example, if the minimum wage was to be increased from $7.25 to $10.10, it is estimated that the number of people who live below the poverty line will reduce by about 4.6 Million. In addition, the average incomes of the bottom 10% of earners are expected to increase by $1,700 per year due to such a raise. The belief that an increase in the minimum wage can reduce poverty is shared by many economists, even those who are skeptical about the results of the minimum wage on businesses. For example, minimum wage opponent David Neumark wrote in 2011 that an increase in the minimum wage by 10% would reduce poverty among 21-44-year-olds by 2.9%.
Proponents of increasing the minimum wage argue that the current minimum wage is too small when compared to the overall cost of living. While the federal minimum wage is $7.25 and is as high as $8.00 in states such as California, the minimum wage is often not enough for people to keep up with the cost of living. A worker who works 40 hours per week at $7.25 an hour can expect to only earn $15,080 per year. In contrast, the federal poverty line for a two-person household is $15,130. According to a study by Amy Glasmeier, the cost of living in various cities ranges from $12-15 per hour in smaller cities and up to $20 per hour in larger cities. Often, people who earn the minimum wage have to rely on working multiple jobs in order to keep up with their financial demands and continue to scrape by on a meager lifestyle.
Another argument from proponents is that raising the minimum wage will help to reduce income inequality. For example, the income rates of the top 1% of earners rose by a whopping 275% between 1979 and 2007 while the bottom 20% only saw an 18% increase during that comparable period. If the minimum wage had kept up with the productivity increases during that time, it would be $21.72 today, according to research by the Center for Economic and Policy Research (CEPR). Over the last several decades, income inequality and class distinctions have become a major societal issue in the United States and the stagnation of the purchasing power of the minimum wage is partially to blame. According to data provided by the Economic Policy Institute, the federal minimum wage had reached a peak in overall purchasing power in 1968 and since has declined by close to 23% over the past four and a half decades.
Furthermore, it can be argued that a higher minimum wage can also help to reduce gender inequality. When considering who earns the minimum wage, women made up roughly 64% of overall minimum wage earners in 2012. In addition, the minimum wage for tipped workers is $2.13 per hour and women comprise approximately 72% of all tipped employees. Furthermore, women are disproportionately paid a lower wage than men. The economic inequality between men and women is a serious economic concern that the U.S. continues to face and could weaken the economic prospects of the country in the years to come. An increase in the minimum wage could have a positive effect on the economic prospects of women and decrease the inequalities regarding gender than many women face on a daily basis in the workplace.
In the debate over increasing the minimum wage, there are numerous economists who take the position that a hike in the minimum wage is, in fact, harmful to the economy and not beneficial to the very workers that it is intended to help. Opponents of increasing the minimum wage often argue that a higher minimum wage will have a drastic impact on the economy. Opponents often argue that a higher minimum wage will have an effect in reducing employment among low-skilled workers, create an undue burden on businesses, harm U.S. economic competitiveness and increase consumer debt.
One common argument among proponents of the minimum wage is that an increase in the minimum wage will help the poor. However, according to the American Enterprise Institute, an increase in the minimum wage will do little to help the poor improve their standard of living and will reduce employment levels among lower skilled workers. Research indicates that a 10 percent increase in the minimum wage can reduce employment among low-skilled workers by roughly one to three percent. The proposed 40 percent increase can have an even greater effect on employment. In addition, studies by the AEI show that nearly all minimum wage jobs are held by teenagers from middle-class backgrounds who seek part-time employment. Furthermore, additional analysis by the AEI shows that only 10 percent of minimum wage earners came from households below the poverty line in 2007.
Another argument that can be used against raising the minimum wage is that a higher minimum wage can have a negative impact on economic growth and competitiveness. Those who are skeptical to a hike in the minimum wage feel that the effects of a higher minimum wage are especially felt on those who are seeking employment in entry-level jobs. A recent study by the Congressional Budget Office speculated that if the minimum wage were to be increased to $10.10 per hour, a job loss of over half a million could potentially occur. That belief is further corroborated in a study by David Neumark. In his study, Neumark uses a panel approach analyzing data regarding its effects and found that a higher minimum wage, in fact, increases unemployment.
It can also be argued that a higher minimum wage can lead to companies deciding to outsource their jobs to areas with considerably lower labor costs. One of the major economic problems that the U.S. faces are the outsourcing of jobs to countries overseas with lower costs of labor and prevailing wages such as China, Mexico, Brazil, and India. One can draw a direct correlation between a higher minimum wage and the outsourcing of jobs. As businesses seek to expand their profits, a higher minimum wage can ultimately affect their profit margins. In order to make up for their loss in revenue, a business may decide to transfer most of their jobs to an area where the minimum wage is considerably less. The practice of outsourcing is a common practice by many major businesses and is a major factor in the loss of a competitive edge in many economic indices by the U.S.
Opponents of increasing the minimum wage also argue that a higher minimum wage will discourage people from finding work in the U.S. by limiting the negotiation power for higher wages by prospective employees. A major work ethic philosophy in the U.S. is that one should find work at a rate that the free market determines as fair for one’s skill level. Though there are mandates on business by government, such as a minimum wage, people often lack the bargaining power to negotiate a fair rate for their skills and are trapped at the lowest wage level. Due to their lack of negotiation powers, people often decide not to seek employment and in turn, increase their reliance on government assistance programs such as food stamps and various forms of welfare. With the current financial status of the U.S., further demands on its entitlement system can potentially have a devastating effect on its economic future in the years to come.
Proponents of increasing the minimum wage argue that a higher minimum wage will lead to higher economic growth and more consumer demand. While most evidence shows that a hike in the minimum wage can boost consumer spending in the short term, overall a minimum wage increase can lead to consumers taking on more debt on the purchase of durable goods. According to a paper by Daniel Aaronson and Eric French, most adult workers at the very bottom end of the wage scale spend an additional $700 per quarter in response to a $1 wage hike. Most of the additional spending is paid for through forms of credit. When factoring an increase in the minimum wage from $7.25 to $10.10, a worker in the bottom of the economic scale would spend an additional $1,995 per quarter on consumer goods, again mostly paid for by increasing their personal debt.
Through the analysis of both sides of the debate over the minimum wage, it can be concluded that a clear position regarding its results is not reachable. When going over the data gathered by economists over many decades, it seems that the minimum wage affects many groups in entirely different ways. The effects of the minimum wage tend to be negative, as a higher minimum wage can potentially reduce business profits and harm economic competitiveness. On the other hand, a higher minimum wage will provide a myriad of benefits to workers such as the ability to keep up with the ever-rising standard of living and allow for a reduction in economic inequality. With regards to the proposed legislation on increasing minimum wage to $10.10, a compromise position can be reached that can satisfy the demands of both employers and workers. An example of a compromise would be to increase the minimum wage to $10.10 at a more gradual rate. Furthermore, such a plan could also call for granting companies several incentives such as tax credits or a slight reduction in their income taxes if they hire more employees. A proposal such as that would reduce the potential adverse effects of a large minimum wage hike on business and also allow the workers at the bottom of the economic scale to have a chance to improve their standard of living.
In conclusion, the debate over the minimum wage is one of the more controversial economic debates in the U.S. today. Much like with other debates, the dispute over the minimum wage is split along political lines. Those in support of a higher minimum wage explain its merits and illustrate its positive results, while opponents of a higher minimum wage take the contrary position. In addition, proponents of both sides of the minimum wage debate take many different positions and go over numerous arguments to back up their respective beliefs. Furthermore, many economists have not reached a conclusion regarding the ultimate effect of the proposed minimum wage increase. As time goes on, the true effects of the minimum wage increase may become more apparent and a conclusion regarding the future of the wage can be reached.
A current economic issue facing the U.S. is the aftermath of the Subprime Mortgage Crisis. The Subprime Mortgage Crisis coincided with the late 2000s economic crisis and was characterized by a substantial decline in home prices, increases in the rate of foreclosure, and intervention by the federal government through the issuing of bailouts. The causes of the Subprime Mortgage Crisis are directly traced back to several factors. One such factor was the 1999 repeal of the Glass-Steagall Act, which separated commercial and investment banks. The repeal of Glass-Steagall encouraged banks to engage in higher risks to earn a larger return on their investments. Additionally, the Federal Reserve reduced interest rates to 1 percent after the early 2000s recession, thus encouraging investments in high-yield mortgage-backed securities instead of lower-yield government bonds.
Another factor behind the Subprime Mortgage Crisis was misguided intervention by the federal government in the housing market. For example, both the Reagan and Clinton administration sought to encourage higher levels of home ownership through the loosening of mortgage requirements for lower income borrowers through the reform of the Community Reinvestment Act (CRA). As originally established in 1977, the CRA mandated regulators to consider whether a bank was serving the needs of the community in which they operated. New regulations for the program implemented in 1982 and 1995 required banks required the use of flexible lending practices to address loan needs of low-income borrowers. The less stringent standards vastly encouraged speculation in the housing market, spurring a bubble in home prices.
Both the Democratic and Republican parties have proposed several ways to address the subprime mortgage issue. The Democratic party has offered to make it easier for families to refinance their mortgages and to provide tax credits to first-time homebuyers. The Democrats also proposed requiring financial institutions to provide relief to struggling homeowners. In contrast, Republicans argue that the best way to solve the subprime mortgage crisis is to establish a mortgage finance system based on free enterprise and one that promotes personal responsibility on the part of borrowers. Additionally, the Republicans feel that a reduction in federal involvement in the housing sector will be crucial to reducing fears on the part of borrowers.
The policy proposals by the Republican party make the most sense to address the subprime mortgage issue. A key factor discouraging recovery in the housing market is a lack of confidence. Through establishing a mortgage system that balances both regulation and competition, trust in the housing market will improve. Another reason confidence in the housing market remains weak is due to the bailouts by the federal government directed the largest financial institutions involved in the crisis. The Republican proposal for promoting personal responsibility on the part of borrowers will serve as a way to limit federal involvement in the housing market and prevent taxpayer-funded bailouts from being used in the future.
In conclusion, a major economic issue currently facing the U.S. is the aftermath of the Subprime Mortgage Crisis. The crisis came about through actions by the federal government and private sector. Both the Republican and Democratic parties have come up with their own sets of solutions to address the subprime crisis and restore confidence in the housing market. The debate over ways to address the aftermath of the subprime mortgage crisis will continue to define U.S. economic policy over the coming years.
