Mark WeisbrotThe Nation, February 14, 2017

Last summer the Center for American Progress released a report on the problems with the Unemployment Insurance (UI) system in the United States. They cited, among other things, the historically low number of jobless workers who received UI benefits in 201

According to Vox and the Washington Post, the Trump Administration is considering an Executive Order that would have a profound impact on the current system of lawful, family-based immigration. To understand what’s at stake, it’s helpful to first know som

Dean Baker
Truthout, February 13, 2017

Jake Johnston
Jacobin, February 13, 2017

Robert Samuelson is unhappy that people continue to believe something that is true — that we bailed out the bankers — and happy that people still believe something that is not true — that we prevented a second Great Depression. In his column Samuelson complains:

"The real Dodd-Frank scandal is that this misinterpretation of events, widely embraced by both parties, has been allowed to stand. In many bailouts, banks’ shareholders suffered huge losses or were wiped out; similarly, top managers lost their jobs. The point was not to protect them but to prevent a collapse of the financial system."

Okay, let's imagine the counterfactual. We decide to take the free market seriously and let it work its magic on Citigroup, Bank of America, Goldman Sachs and the rest of the high rollers. These huge banks all go into bankruptcy with the commercial banking parts of the operations taken over by the FDIC. All insured deposits are fully protected, with the FDIC and Fed having the option to raise the limits to protect smaller savers.

The shareholders of these banks are out of luck. They have zero. Samuelson is right that share prices were depressed during the crisis, but that is different than going to zero. Furthermore, operating with the protection of Treasury Secretary Timothy Geithner's promise of "no more Lehmans," the share prices soon bounced back.

This is really getting over the top. Republicans in Congress are debating an overhaul of the corporate income tax which would eliminate many of the opportunities for gaming the current tax code. To my mind this is great news, because the tax-gaming industry is where many of the richest people in the country, like private equity fund partners, make their money.

This means that the current corporate tax code is a mechanism for transferring money from the rest of us to the likes of Mitt Romney and Peter Peterson. It's understandable that these people would be very upset by a plan to end their tax-gaming windfalls, but why is Neil Irwin at NYT so upset?

The story he pushes is that border adjustability rules in the proposed reform would create enormous disruptions in the economy because it would lead to a sharp rise in the value of the dollar. Irwin tosses around a hypothetical 25 percent increase in the value of the dollar which he warns:

"...could shift trillions of dollars of wealth from Americans to foreigners; set off an emerging markets financial crisis; wreak havoc in global oil markets; and cause sustained harm to the American higher education and tourism industries (including, as it happens, luxury hotels with President Trump’s name on them)."

Okay, this is more than a little bit silly.

Mark WeisbrotPhiladelphia Inquirer, February 14, 2017

Febrero 2017, Mark Weisbrot, Jake Johnston y Lara Merling

February 2017, Mark Weisbrot, Jake Johnston, and Lara Merling

Dean Baker
Fortune, February 9, 2017

In 2012, Republican presidential candidate Mitt Romney famously commented that 47 percent of Americans were “dependent on government” because they didn’t pay any federal income taxes. He went on to explain that his job was “not to worry about those people.”

Journalists and other public figures often claim that only the rich pay taxes, supporting this with the argument that the rich pay the vast majority of federal income taxes. However, federal income taxes are just one part of the broader tax code. When we consider other types of federal taxes as well as state and local taxes, it becomes clear that the overall tax code isn’t extremely progressive – in other words, it doesn’t “soak the rich,” and it certainly doesn’t let the poor off the hook.

The aforementioned “47 percent” do pay substantial state and local taxes, but even ignoring these taxes, it’s worth noting that income taxes represent just half of all federal tax revenue:

In fiscal year 2013 – the last year for which we have full federal, state, and local data – the federal government raised over $2.6 trillion in total tax revenue. It also raised an additional $134 billion in funds from other sources, most notably customs duties, remittances from the Federal Reserve, and miscellaneous fees and fines. About $1.3 trillion of revenue came from the progressive federal income tax, while another $274 billion came from the progressive corporate profits tax. Estate and gift taxes, which are also progressive, accounted for $19 billion, equivalent to just 0.7 percent of federal tax revenue.

Economists have been worried about the weak productivity growth of the last decade, with some worried it will continue indefinitely. In the last decade, productivity growth has averaged less than 1.0 percent annually. This compares to a rate of close to 3.0 percent a year in the decade from 1995 to 2005 as well as the quarter century from 1947 to 1973. Slower productivity growth limits the extent to which wages can rise, except through redistribution.

However, Thomas Friedman apparently believes that if we end NAFTA, we will bring back manufacturing to the United States. But he argues that the new manufacturing capacity will be far more productive than the industry at present, and therefore mean very few jobs. He told readers:

"And if Trump forces all these U.S.-based multinationals to move operations from Mexico back to the U.S., what will that do? Help tank the Mexican economy so more Mexicans will try to come north, and raise the costs for U.S. manufacturers. What will they do? Move their factories to the U.S. but replace as many humans as possible with robots to contain costs."

Economists usually believe that expanding trade leads to higher productivity, so Friedman is offering a novel thesis with this idea that contracting trade will lead to more rapid productivity growth.

Jovenel Moïse will be inaugurated as Haiti’s new president today as the country returns to constitutional order after a one-year extra-constitutional period of interim rule due to electoral delays.  Moïse had previously come in first in an October 2015 election, only to have the results thrown out due to fraud. Rerun in November 2016 under the interim government that replaced former president Michel Martelly, the elections had Moïse securing more than 50 percent of the vote, winning in the first round.

But serious questions continue to dog Moïse as he takes office. Jacqueline Charles of the Miami Herald reports:

Since his win, Moïse has been on a countrywide tour, celebrating his victory, endorsing candidates for the recently held local elections — and battling money-laundering suspicions.

Moïse has dismissed the suspicions as the work of political opponents. The probe began in 2013 under Martelly’s administration when the anti-financial crimes unit was tipped off about a suspicious bank transaction, the current head of the unit, Sonel Jean-François, has said.

Over the weekend, an investigative judge assigned to the case sent his findings to the government prosecutor, but the judge’s order has not been made public. Government prosecutor Danton Léger has yet to say whether he will dismiss the case, send it back to the judge for further review, or prosecute Moïse.

Should he seek to prosecute Moïse, Haiti could find itself in an even deeper crisis than the one triggered by the annulled October 2015 presidential elections.

In a 7-page letter dated February 6, Leger, the government prosecutor, requested further information on the allegations against Moïse, ensuring it will continue to hang over the new president.

The money laundering allegations, however, are far from the only topic overshadowing Moïse’s inauguration today. A new report on Haiti’s November elections, from international legal observers, has raised questions as to how effective the new administration may be given the historically low turnout. The report’s authors also note that Haiti’s national identity office was hindered by significant problems, affecting the ability of Haitians to vote:

The report notes that despite many improvements in security and electoral administration over the 2015 elections, the 21 percent voter turnout represents the lowest participation rate for a national election in the Western Hemisphere since 1945. “Many Haitians did not vote, not because they did not want to, but because they were unable due to difficulties in obtaining electoral cards, registering to vote and finding their names on outdated electoral lists,” said attorney Nicole Phillips, delegation leader and co-author of the report.

The report documents how many would-be voters were disenfranchised on November 20, due to pervasive errors on electoral lists, difficulties accessing identity cards, and lack of voter education. Haitian electoral authorities also failed to take adequate measures against fraudulent voting. Prior to the election, the head of the National Identification Office (ONI) admitted that 2.4 million activated but undistributed cards had gone missing, which opened the door to fraud via trafficked identity cards.

The report’s authors also note with concern that Moïse could follow in the footsteps of his predecessor, former president Michel Martelly, who surrounded himself with figures from the Duvalier dictatorship and was criticized by human rights groups for his intimidation of journalists and imprisonment of opposition activists. “With a majority in parliament, the temptation for President Moïse to run roughshod over any opposition will be great,” said Brian Concannon, the executive director of the Institute for Justice and Democracy in Haiti, which published the report with the National Lawyers Guild and the International Association of Democratic Lawyers. “But with the backing of only 9.6 percent of registered voters, the incoming president will face serious limits to his popular mandate.”

February 6, 2017

Dean Baker
Truthout, February 6, 2017