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Article Artículo

Inequality

United States

Workers

Gender Employment Gap in U.S. Is High By International Standards

In November 2014, over one hundred women were elected to the United States Congress for the first time in history. While this may be a historically significant event, women are still far less likely than men to ever work in Congress.

In many ways, what is happening in Congress illustrates what is happening in the economy more generally. While the gender employment gap has been shrinking for decades, significant disparities remain. The most recent data from the Bureau of Labor Statistics indicate that the employment rate of prime-age men is about 14 percentage points higher than the employment rate of prime-age women. (“Prime-age” refers to the ages 25 to 54. These are the years in which people are the most likely to be employed.)

CEPR and Nicolas Buffie / October 13, 2015

Article Artículo

Globalization and Trade

David Brooks, Hillary Clinton, and the TPP

David Brooks is shocked, shocked to find out that political considerations might affect Hillary Clinton's stand on the Trans-Pacific Partnership (TPP) in the presidential campaign. Brooks goes through the basic story. Yes, Clinton had been a supporter of the TPP in the Obama administration, but now Brooks tells us that Clinton has changed her position because she'll say what "she needs to say now to become Bernie Sanders in a pantsuit."

Let me give a brief sidebar on the sexism here. Yes, Hillary Clinton is a woman. Does that mean it is not possible to discuss her political positions without referring to what she wears or how she looks?

I'll skip over Brooks' general complaint about how Clinton has changed her positions on other issues. I want to talk about the TPP.

Brooks has apparently become a big humanitarian worried about the plight of people in the developing world.

"Third, there’s the humanitarian issue. Clinton once supported the Pacific trade deal for good reason. According to a report from the Peterson Institute for International Economics, the deal would bolster U.S. gross domestic product growth and jobs over the next decade. It would lift Malaysian growth by 6.6 percent and Vietnamese growth by 14 percent. It would also build a solid Asian alliance to balance Chinese hegemony. If Clinton’s flip-flop ends up sinking the deal, she will have helped sentence millions of people to further poverty and destabilized the world’s most dynamic region."

That sounds pretty awful. But before we worry too much about the millions of people who Secretary Clinton has sentenced to poverty in Malaysia and Vietnam, it is worth looking at these numbers a bit more closely. First, Brooks meant GDP, not growth. When the benefits of the TPP are fully realized in about a dozen years, the report projects that Malaysia's GDP will be about 6.6 percent higher and Vietnam's GDP will be about 14 percent higher.

Second, the vast majority of these projected gains do not come from anything that the United States or the other TPP countries are giving Malaysia and Vietnam, they come from reducing their own tariff and other trade barriers. This is almost always the story with trade agreements. In the standard modeling, tariffs are distortionary taxes. If you reduce or eliminate them, your country will benefit even if no other country has made any change in their own barriers.

Dean Baker / October 10, 2015

Article Artículo

Economic Growth

United States

World

The U.S.A. as Number 1? Part 2

A previous CEPR blog post titled “The U.S.A. as Number 1?” raised the question of whether the U.S. has the biggest economy in the world.

In terms of national income, the United States is no longer number one—that title now belongs to China, which surpassed the U.S. for the first time last year. Many commentators have noted, correctly, that the U.S. still has a much greater level of per capita GDP (income per person) than China. But if we are to judge economies by this standard, the U.S. still isn’t number one.

CEPR and Nicolas Buffie / October 08, 2015

Article Artículo

Ben Bernanke on Not Seeing the Crisis

Ben Bernanke was on the Diane Rehm show on Tuesday (unsolicited plug: one of the most serious talk shows around). Anyhow, there was much good back and forth on the show. I will skip over most of what the former Fed chair said (here's my comment on saving Lehman), but I do want to address his response to the question of why the Fed didn't see the financial crisis coming.

Here's the sequence:

"REHM It's remarkable that you said that the recent financial crisis was the worst in human history, even worse than the Great Depression. But that's where I think an awful lot of people wonder, if it was so big, why didn't you see it coming and why couldn't you have done something to stop it before it happened?

11:30:18

"BERNANKE Well, again, we were aware of the fact that house prices were very high. And we thought it quite possible that they would correct at some point. By 2006, 2007, we also were aware of the problems in the subprime lending market. What we did not anticipate and no one anticipated was the vulnerability of the financial system overall to a run, a panic. You know, in the 19th century, early 20th century, we had bank runs all the time. People would run to the bank, pull their cash out and the bank would have to close. That was this, in the 1930s story. So now we have deposit insurance. We didn't see that coming.

11:30:58

"BERNANKE But there's still a lot of short-term money in banks — whether it was lent through what's called the repo market or — in any case, money that is not insured, which ran just like the old-fashioned depositors ran. And, you know, we — there was just not enough appreciation that that was possible or that it would happen. Once it happened, it brought the whole financial system down, essentially to its knees. And then, you know, the rest is history, as they say."

Dean Baker / October 08, 2015

Article Artículo

Haiti

Latin America and the Caribbean

World

Clinton Emails Reveal “Behind the Doors Actions” of Private Sector and US Embassy in Haiti Elections

Recently released e-mails from Hillary Clinton’s private server reveal new details of how U.S. officials worked closely with the Haitian private sector as they forced Haitian authorities to change the results of the first round presidential elections in late 2010. The e-mails documenting these “behind the doors actions” were made public as part of an ongoing Freedom of Information Act (FOIA) lawsuit.

Preliminary results from the deeply flawed 2010 presidential and legislative elections were announced on December 7, 2010, showing René Préval’s hand-picked successor Jude Célestin and university professor Mirlande Manigat advancing to a second-round runoff. The same day, the U.S. Embassy in Haiti released a statement questioning the legitimacy of the announced results.

Behind the scenes, key actors were already pushing for Célestin to withdraw from the race, according to the e-mails.  Just a day after preliminary results were announced, U.S. Ambassador to Haiti Kenneth Merten wrote to Cheryl Mills, Tom Adams and Daniel Restrepo, all key State Department Haiti staff. “Boulos + private sector have told RP [René Préval] that Célestin should withdraw + they would support RP staying til 7 Feb.” “This is big,” the ambassador added.

HRC email merten

“Boulos” here refers to Reginald Boulos, one of the largest industrialists in Haiti and a member of the Private Sector Economic Forum. Importantly, Boulos also suggested they would support Préval staying in office through February 7, but with the election delayed due to the earthquake, a new president would not be able to take office by then. Many had advocated for Préval’s early departure, and during a meeting of international officials on election day, Préval was even threatened with being forced out of the country.

The e-mail also shows that Merten was in close contact with Michel Martelly’s campaign. Protests had already broken out across Port-au-Prince and in other cities throughout Haiti, with protesters alleging that their preferred candidate, Michel Martelly, should be in the runoff. Merten writes that he had personally contacted Martelly’s “camp” and told them that he needs to “get on radio telling people to not pillage. Peaceful demo OK: pillage is not.” Documents obtained through a separate FOIA request have shown that a key group behind the protests later received support from USAID and went on to play a role in the formation of Martelly’s political party, Parti Haïtien Tèt Kale.

The following day, as per Merten’s suggestion in the e-mail, the U.S. Embassy released another statement calling for calm and urging political actors to “work through Haiti's electoral contestation process to address any electoral concerns.” As the e-mail reveals, however, efforts were underway to remove Célestin from the race before any contestation process could even begin.

Jake Johnston / October 08, 2015

Article Artículo

Of Course Ben Bernanke Could Have Saved Lehman

Ben Bernanke just released his memoir which includes his account of the events around the financial crisis. According to Andrew Ross Sorkin, Bernanke claims the decision to not save Lehman in the fall of 2008 was not really a decision. Bernanke claims that the Fed did not have the ability to save Lehman. This is not true. Since the Fed has essentially a limitless ability to lend money, it surely could have provided enough loans at below market interest rates, for a long enough period of time, that Lehman would eventually have been a viable bank.

Sorkin points to $200 billion in losses suffered by Lehman creditors. This is comparable to the sums lent to both AIG and Fannie and Freddie (combined) at the time they faced insolvency, so getting enough money to at least temporarily patch any holes would clearly have been doable. In October of 2008, the assets held by Lehman were near their lowest levels. (That's not based on an analysis of specific assets, just looking at house prices and the price of other assets.)

Suppose that the Fed had lent Lehman the money needed to meet all its immediate obligations and gave the bank Timothy Geithner's "no more Lehmans" guarantee. This was a commitment that big banks would not be allowed to fail. Geithner repeats it endlessly in his autobiography. This would have allowed the bank to continue to operate and presumably make around $3 billion a year in profit (its pre-crisis level) on its ongoing business.

Dean Baker / October 07, 2015