I have to start the post off with a hilarious cartoon from Mike Luckovich.
Fabulous isn’t it!
And with that lets dig in for this Wednesday morning reads. I have a few links for you on Trade Agreements, US Factory Orders and the new bill regarding Chinese Currency.
Susie Madrak over at C&L, has this to say about the trade bills: Obama Sends Bush Trade Agreements to the Do-Less-Than-Nothing Congress | Crooks and Liars
My father used to say, “If you can’t say anything nice, don’t say anything at all.” So I have no comment:
President Obama submitted three free trade bills with South Korea, Colombia and Panama to Congress today after a years-long holdup of the deals since the most recent Bush administration. Speaker John Boehner announced immediately that the House will act on them quickly along with Trade Adjustment Assistance (TAA) for displaced workers.
“Now that all three agreements have been transmitted, they will be a top priority for the House,” Boehner said in a statement. “We will quickly begin the required process to consider these bills and intend to vote on them consecutively and in tandem with Senate-passed TAA legislation.”
Earlier today, Majority Leader Eric Cantor told reporters “we intend to address this and hopefully put a win on the board for the people of this country.”
He said the House would act on the bills next week.
“I am glad President Obama has finally sent Congress the long-awaited free trade agreements with Colombia, Panama and South Korea which will help create thousands of new jobs and spur economic growth,” Cantor said in a Monday statement. “Moving forward on these agreements will provide manufacturers with the help they need to increase exports and increase production. The more manufacturers produce, the more workers they need and that means job creation.”
The agreements would ease trade restrictions between the United States and the three countries. According to the International Trade Commission, the easing of tariffs with South Korea alone would boost exports by up to $10.9 billion. The agreement with Colombia would mean around 75 percent of all U.S. exports to that country would be duty free.
The three pacts have been held up for years over disagreements between Democrats and Republicans over the need to extend Trade Adjustment Assistance (TAA), a government program that provides job training, income support and health care assistance for workers displaced by free trade agreements. Passage of TAA is a requirement for the White House before they will send to Congress trade bills with South Korea, Columbia and Panama. But Republicans see the program as duplicative, expensive and ineffective.
Public Citizen, however, has a lot to say – none of it good.
According to a new survey, One Third of Americans One Paycheck Away From Homelessness « naked capitalism Of course that is no surprise to me, but the survey finds that more affluent Americans are still one paycheck away from living in a cardboard box.
The implications are grim. The odds of an economic recovery any time soon are close to non-existent. Many large companies (like Bank of America) have announced layoffs. Flagging top lines and a likely to be weak Christmas season, if Chinese shipping volumes are any guide, means more cuts are likely go be announced next year. And that’s before you factor in the impact of a strengthening dollar, state and local government belt tightening and a possible financial crisis.
With so many citizens on a knife’s edge financially, a slackening of demand will have a more severe impact than usual. I strongly suspect that most macroeconomic models don’t allow for the shock of job losses leading so quickly to the loss of the primary residence or extremely rapid curtailment of spending (as regular readers once know, once a homeowner misses a mortgage payment or two, pyramiding late fees pretty much assure they are on a path to foreclosure). In other words, if we have another economic leg down, it will feed on itself in a more pernicious manner than most experts foresee.
Some of the experts seem to be “off” when it comes to predicting more suckass economy figures…Here is another economy link for you… : US Factory Orders Fell Unexpectedly in August – CNBC
New orders for U.S. factory goods fell in August for the second time in three months, suggesting a possible softening in the manufacturing sector which has carried the economic recovery.
The Commerce Department said on Tuesday orders for manufactured goods decreased 0.2 percent after a downwardly revised 2.1 percent increase in July.
Economists had forecast orders to be unchanged after a previously reported 2.4 percent increase in July.
Why is it all these downward or upward numbers indicating the economy is getting worse always “unexpected?” I am no economy expert, but I know crap when I see it…
Bernanke spoke about the recovery yesterday: Bernanke Warns Recovery ‘Close to Faltering’ – ABC News
Federal Reserve Chairman Ben Bernanke bluntly warned Congress on Tuesday of what most of America has sensed for some time: The economic recovery, such as it is, “is close to faltering.”
The central bank chief spoke on a day when the stock market spent most of the trading hours in bear market territory — down 20 percent from its most recent highs in April. A late-day rally helped the market finish higher.
Bernanke’s exchange with lawmakers seemed to capture the growing belief that no one is prepared to help the global economy in any meaningful way anytime soon. Speaking in unusually frank terms, he also captured the nation’s sour economic mood.
He also criticized China and its role in obstructing the recovery of global economy: Bernanke criticises China over currency – FT.com
The chairman of the US Federal Reserve has accused China of damaging prospects for a global economic recovery through its deliberate intervention in the currency market to hold down the value of the renminbi.
Speaking just hours after the Chinese government sharply criticised a US congressional bill that would punish Beijing for alleged currency manipulation, Ben Bernanke told a congressional committee that an undervalued renminbi was preventing the rebalancing of global demand towards emerging market economies.
“Right now, our concern is that the Chinese currency policy is blocking what might be a more normal recovery process in the global economy,” he said. “It is to some extent hurting the recovery”.
More on the Chinese currency debate in a moment. The Washington Post has a debate coming up that they will host with Bloomberg…so they are asking for some photo contributions from the real people out there. What does the economy look like where you live? Show us with your Instagram photos (#EconDebate) | 2012 Unfiltered – The Washington Post
“2012 Unfiltered” aims to strip away the political rhetoric through photos — specifically your photos. If a picture is worth a thousand words, then this is your chance to speak volumes, showing political leaders and the country what’s on your mind.
From now through the 2012 election, we’ll be asking you to share your “unfiltered” view of the issues through the popular iPhone app Instagram. We’re launching our project in conjunction with the Washington Post/Bloomberg presidential debate next Tuesday, Oct. 11, with a simple question: What does the economy look like where you live?
To participate, snap a photo that visualizes the current economic climate where you live with Instagram, a photo community of over 10 million users. Be sure to include anywhere in the caption the special tag #econdebate and a quick thought on how your snapshot shows what the economy looks like where you live.
I don’t know, but that sounds like an advertising nod to one of WaPo’s paid sponsors. However, that gives me the incentive to go out and take a snapshot of the economy in my little backwoods town. What the Washington Post should do is take a snapshot of the Occupy protest or even better, grab some of the images on the We are the 99 percent site.
Sticking with this theme, the Senate has debated a new bill that would require the Treasury Department to investigate the possible manipulation of China’s currency, and if they find China is manipulating their currency, they will impose tariffs on trade goods. China Criticizes U.S. Senate’s Currency Manipulation Bill – NYTimes.com
China expressed strong objections on Tuesday to a bill in the United States Senate that would threaten higher tariffs on some Chinese goods in response to what the bill’s sponsors call China’s policy of keeping its currency artificially depressed to give its exports a price advantage.
Ma Zhaoxu, a spokesman for the Chinese Foreign Ministry, said the bill “seriously violates rules of the World Trade Organization and obstructs China-U.S. trade ties.” The statement, reported by Xinhua, China’s official news agency, urged senators to “rationally understand Sino-U.S. trade cooperation, which is mutually beneficial in nature, and stop pressuring China through domestic lawmaking.”
The statement did not specify what steps, if any, China might take if the legislation were to pass. But Mr. Ma said the bill would “further escalate the exchange rate issue by adopting protectionist measures with an excuse of ‘currency imbalance.’ ”
As far as Boehner, the White House and Reid, they have expressed the expected sentiment.
“It’s pretty dangerous to be moving legislation through the U.S. Congress forcing someone to deal with the value of their currency,” Mr. Boehner said.
The White House has also reacted coolly to the bill. While administration officials have not rejected the measure outright, they have suggested that it could create trade problems with China.
Though some Republicans suggest that the bill would set off a trade war, others, as well as some Democrats, say the bill is needed to save American jobs. Senator Harry Reid of Nevada, the majority leader, told reporters in a rejoinder to Mr. Boehner, “It’s dangerous for our country to continue to be bullied by China.”
When I read about this, the comments Hillary Clinton has made in regards to China holding the purse strings ring true.
As with anything dealing with the economy, I will defer to the woman from New Orleans. I know that she is busy, but there was so much going on with the links up top, I had to include them in today’s post.
Occupy protest has gotten a big endorsement: Unions endorse, will join Occupy Wall Street protests – CNN.com
Several unions endorsed the two-week-old Occupy Wall Street movement and plan to join the protesters’ street theater in New York on Wednesday, labor leaders said.
“It’s really simple. These young people on Wall Street are giving voice to many of the problems that working people in America have been confronting over the last several years,” Larry Hanley, international president of the Amalgamated Transit Union, which has 20,000 member in the New York area, told CNN.
That is a bit of good news…
Transport Workers Union Local 100 spokesman Jim Gannon said the Occupy Wall Street movement, which denounces social inequities in the financial system and draws inspiration from the Arab Spring revolutions in Africa and the Middle East, has advanced issues that unions typically support.
“Their goals are our goals,” Gannon said. “They brought a spotlight on issues that we’ve believed in for quite some time now…. Wall Street caused the implosion in the first place and is getting away Scot-free while workers, transit workers, everybody, is forced to pay for their excesses.
“These young folks have brought a pretty bright spotlight,” Gannon added. “It’s kind of a natural alliance.”
I think it is good that unions get involved in the protest. From what I have read, there are many teachers participating in the Occupy Wall Street movement. It seems like a welcomed move to me.
And finally, this little diddy over at the New York Magazine is a nice diversion. In Which We Inform Samuel L. Jackson About N-ggerhead — Daily InIn Which We Inform Samuel L. Jackson About N-ggerhead
On Sunday morning, the Washington Post ran its bombshell story about the racist name of the a hunting camp that the Perry family has leased on and off since the early eighties. But by Monday night, when we caught up with Samuel L. Jackson at a benefit for the Children of Bellevue’s Reach Out and Read Program, the actor still hadn’t heard about it. So we looped him in. All things considered, he took it pretty well. In fact, he wasn’t surprised at all.
NYM: What do you think about the controversy surrounding the name of Rick Perry’s hunting camp?
SLJ: How do I not know about it? What’s the name?
NYM: I’ll show it to you.
NYM: Yes. Does that surprise you?
NYM: Really? You honestly aren’t surprised?
SLJ: I grew up in the segregated South, nothing surprised me. [Laughs.] That’s not surprising at all.
NYM: I guess Herman Cain came out condemning it and he caught a bunch of backlash from other Republicans.
SLJ: Well, that’s just what they’re going to do. But it’s not going to hurt Perry’s reputation in a whole lot of places, so it’s not a big deal.
NYM: You don’t think so?
SLJ: He’ll be fine.
NYM: You don’t think he’ll be affected by this scandal?
SLJ: No! Are you serious? He’s a Republican and this is America.
NYM: Can you elaborate?
SLJ: He’ll actually gain respect from a lot of people that he didn’t have respect from before. He’ll be all right.
I think Sammy is right on that point…He goes on to agree with the comments made by Morgan Freeman last week about racism in the GOP.
Lets just end with this news out of Miami: Giant Alien Snails Attack Miami, Though They’re Not in Much of a Rush – WSJ.com
Floridians have grown accustomed to invasions of exotic creatures, like the Burmese pythons slithering throughout the Everglades. But residents here are especially grossed out by the latest arrivals: giant African land snails that grow as long as eight inches, chew through plants, plaster and stucco, and sometimes carry a parasite that can infect humans with a nonlethal strain of meningitis.
The gastropods are among the most dangerous in the world, agriculture officials say. They each have male and female reproductive organs and can lay 1,200 eggs a year, allowing them to proliferate rapidly. Thousands of them have infested at least five separate neighborhoods in the Miami area.
Homeowners who discover the creatures in their yards often find them disgusting. The snails’ engorged bodies extend far from their shells, and they eat so ravenously that they leave trails of excrement on walls and the ground.
Federal and state agriculture officials have responded with a large-scale eradication effort. They’ve deployed 70 people to hunt for the pests house by house in the affected areas. Since the snails were first detected on Sept. 8, workers have collected about 10,000 of them from 114 properties.
So if these snails have male and female reproductive parts…does that make them as bad as Tribbles? Hmmm…I see a new reality show for Animal Plant: Trouble with Giant African Land Snails. Ah, it doesn’t flow as well as the classic Star Trek episode. I am sure a suitable title will eventually come to me…of course it will have a “porno” sort of ring to it, keying in on the hermaphrodite angle.
Well, I am feeling a bit out of sorts. While writing this post, Tron Legacy was on the tube. Even watching it a second time did not help, I still don’t get it. So with an evening of economic reads and this seizure inducing movie, my mind is fried. What are you reading about today? Share your links…and if someone can explain that Tron movie to me, please give it your best shot.
I came across a really provocative and perceptive post at HuffPo by Robert Prasch, an economics professor at Millbury college and author of the book How Markets Work: Supply, Demand, and “The Real World.” Prasch questions why Obama is giving a speech on jobs and unemployment now, since it has been clear from day one of his presidency that unemployment is a huge problem and since Obama and his closest advisers have shown no interest in doing anything about the problem other than periodically expressing “concern.” In Prasch’s words:
As a “rule of thumb,” it is a fair guess that the actual rate of unemployment is three-quarters again (1.75x) as high as the official or “headline” rate (BLS calculates a less-known data series called U-6 that validates this estimate). So, for example, with today’s official rate at 9.1%, it is reasonable to guess that 15.9% of the labor force is un- or under-employed (the U-6 number for August 2011 is 16.1%). This, then, is the context that best interprets the current “headline” rate of unemployment. It is, to put it mildly, a narrow definition that leaves out many people who we would usually consider unemployed. Contemplated alongside other numbers, it is evident that many American families are in desperate straights — and the situation is getting worse. Thirty percent of America mortgagees owe more on their home than its market value. As this percentage is continuing to rise, it is increasingly made up of “prime” borrowers. An amazing fifteen percent of all Americans are on foods stamps, including one-quarter of all children. This number is also rising. With so many families in such precarious condition, can anyone be surprised that wages are stagnating, unionization rates are declining, and the distribution of income is worsening?
This brings us to President Obama’s speech. Why now? After all, unemployment has been high since the day he took office. Actually, it rose initially and has remained high since. Early in his administration there was a half-hearted attempt to provide a “stimulus” to the economy, but the program was — even then — widely understood to be too small and too-heavily weighted toward tax cuts to be effective (For a criticism of tax cuts for the wealthy as an employment strategy see here). From the start it was evident that the administration’s core approach to the economy was to do whatever was necessary to support Wall Street’s largest and most irresponsible firms through thick and thin. The idea, if we can call it that, seems to have been that “trickle down” or the “invisible hand” would take care of the unemployed. So again, why now?
Prasch’s answer is both fascinating and maddening; and yet it makes a great deal of sense. He argues that the speech and any “jobs plan” along with any legislation that comes out of it, is designed to distract the media and the public while Obama and his real base–his donors–organize the passage of several free trade agreements that are strongly desired by the corporatocracy but despised by most Americans.
It is common knowledge that the White House plans to submit three completed “Free Trade” agreements to the Senate this September — South Korea, Colombia, and Panama. (As always, these treaties are primarily about guarantees and protections for financial and investment flows, restrictions on intellectual property, and related issues. But exploring their content will have to await another post.) With a remarkable sense of timing, the administration also plans to mark Labor Day 2011 by opening multi-party talks on a Trans-Pacific Free Trade Area. (Trade negotiators, lawyers, lobbyists, and hundreds of corporate honchos are invited to these talks — critical economists, civil society groups, and the public are not.) The President’s “voter base” is firmly opposed to these secretive and largely detrimental deals, as is the bulk of the American public. This opposition would most likely intensify if the public were fully briefed on their contents. Simultaneously, there is no question that the President’s “donor base” is highly enthusiastic about these deals — after all, they were in the room when the details were hammered out. Wall Street, the Chamber of Commerce, and the National Association of Manufacturers are beside themselves with excitement. The treaties promise extraordinary protection of financial and investment flows, innumerable exemptions from regulation, new and lucrative opportunities for off-shoring jobs, and political recognition and validation of the absence of labor protections and union rights that is a characteristic of most of these nations and regions. K-Street lobbyists can look forward to high fees and lavish banquets during and after the Senate vote. Big agricultural intermediaries look forward to crushing South Korean farmers with their heavily subsidized produce. This year, Colombia is on track to outperform its 2010 record of murdered unionists. If you’re a plutocrat or one of their paid representatives, what’s not to like?
My conjecture is that the forthcoming speech and any accompanying legislation was and is intended to provide political cover and a welcome distraction throughout the passage of these “Free Trade” treaties.
And, Prasch argues, any parts of the proposals that might actually help the unemployment problems will be stripped out by the Republicans, and Obama can claim that he really wanted to create jobs but the mean old Republicans wouldn’t allow it. The usual Obama apologists will defend the poor, put-upon president.
As I said this makes a lot of sense to me. And it makes me utterly livid. Obama is quickly becoming a laughing stock, but he doesn’t seem to care as long as he can please the ultra rich. I have to admit, I can’t understand how someone with such a huge ego can surrender his own dignity like this. But it’s happening. A child could see it at this point.
A couple of days ago Newt Gingrich made the bizarre claim that
President Barack Obama’s tenure in the White House “is a Paul Krugman presidency.”
Of course we know that Obama cannot stand Paul Krugman, because Krugman has been criticizing Obama since the back in 2008. No, Obama’s is not “a Krugman presidency.” It’s “a ‘the dog ate my homework'” presidency. It’s a “smoke and mirrors” presidency. Or maybe a “confidence fairy” presidency.
Spokesman Jay Carney says there is no question that economic growth and job creation have slowed over the past half year.
But, Carney told a White House briefing, “We do not believe that there is a threat of a double-dip recession.”
Really? And how do you know this, Jay?
He blamed the earthquake and tsunami in Japan, higher energy prices, default worries in Europe and recently resolved uncertainty over raising America’s borrowing limit. Carney said, “We believe the economy will continue to grow.”
Uh huh. But what’s that based on? Where is your evidence? Carney never produced any.
Now here’s Tim Geithner on the dramatic spending cuts included in the debt ceiling bill:
GEORGE STEPHANOPOULOS: So this won’t cost us jobs?
TIM GEITHNER: No, it will not. Now … if we put this behind us then we can turn back to the important challenge of trying to find ways to make sure that we do everything we can to get more people back to work, strengthen our growth. And we’ll have more ability to do that now with people more confident and we can start to get our arms around the long-term problems.
Leaving aside the fact that no one I know is “more confident,” and Wall Street sure doesn’t seem “confident,” how will “confidence” translate into jobs? Especially now that there are caps on domestic spending that will prevent the government from helping create jobs?