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Article Artículo

The Crisis of Too Little Land

If you have been worried about the demographic crisis leaving us with too few workers or the technological revolution leaving us with too few jobs, my friend Noah Smith now warns us of the crisis of too little land. The problem is that we have too much money going to owners of land, who are not entirely accurately referred to as "landlords" by Noah.

There are a few problems with this story. First, the trend for an increasing share of income to go to land owners is less clear than he suggests. In the United States (I know Noah is referring to the OECD as a whole, but if the U.S. can be an exception, it's not a law of capitalism) there was no trend for an increasing share of income going to land owners until the eighties. This makes it at least a shorter term story here than the one dating from the 1950s in Europe.

In the U.S. the rise in property values relative to GDP has coincided with a sharp drop in interest rates over this period. This is exactly what we would expect. Land prices rise when interest rates fall, just as the price of a bond or any other asset that provides an annual payout rises. The point is that it is far from clear that we are staring at some inexorable trend.

The second point is the logic of ever rising land prices is far from clear. Yes, there are economies of agglomeration, people benefit from clustering in or near cities. But this has always been true. What has changed is the ability to quickly communicate over long distances has increased enormously. The fact that we have the Internet, while not eliminating the benefits of agglomeration, surely has to reduce them.

Dean Baker / September 10, 2015

Article Artículo

Haiti

Latin America and the Caribbean

World

Political Party that Played Key Role in Bringing about Elections Drops out of Race

Haiti’s internationally backed electoral process was thrown further into disarray yesterday as a leading political party announced its withdrawal from the electoral process. In a press statement, the Vérité platform, closely associated with former president René Préval, said it was pulling out of the elections because it was the primary victim of the August 9 “electoral mess,” and called for a “good” electoral council in order to “run a good election.”

Haiti’s August 9 election was characterized by extremely low voter turnout, with just 18 percent of registered voters going to the polls. Additionally, nearly one-quarter of all votes were never counted due to violence on election day, problems transporting ballots and other issues. In 25 of the 119 races for deputy, elections will need to be re-run due to the scale of irregularities. Over the last month, an increasingly large cadre of candidates has taken to the streets, leading protests against the Provisional Electoral Council (CEP) and a government who they claim has rigged the process.

Also yesterday, INITE, Préval’s former political movement, called on its representative, Ariel Henry to leave the “consensus” government that has run the country since the terms of parliament expired in January. To “remain part of a government that has undertaken and continues this electoral coup of August 9, would be contrary to our principles, our democratic ideals,” the party stated in its letter to President Martelly.

Preliminary results released last month showed Vérité candidates advancing to the second round in 30 of the 85 races that were counted and where no candidate won in the first round, second only to President Martelly’s PHTK. Vérité has mulled the decision to withdraw for some time, as the party’s presidential candidate, Jacky Lumarque, was excluded from participating after originally being accepted. The CEP, after announcing the final list of candidates, kicked Lumarque out of the race because he had been named to a presidential commission under former president Préval and therefore needed a discharge document. Despite a ruling from Haiti’s highest court in favor of Lumarque, the CEP has maintained the exclusion and Vérité has led regular protests for his reentry into the race.

While Vérité has consistently denounced flaws in the electoral process, it has been accused by opposition groups of being close to the governing party and being one of the main benefactors of the recent election. And it’s true; there may never have been an election without the support of Préval.

At least as early as November 2014, senior United States diplomats began to meet with the former president and others deemed to be in the more “moderate” opposition. At the time, with delayed elections still not scheduled and terms of sitting parliamentarians expiring in January, Haiti was engulfed by a growing protest movement calling for the departure of President Martelly and the holding of elections. There needed to be a compromise that would move Haiti toward elections and remove the instability from the streets; Préval, whom the U.S. described as “Haiti’s indispensable man” in a 2009 diplomatic cable published by WikiLeaks, was the one to do it.

Jake Johnston / September 09, 2015

Article Artículo

Inequality

Unions

United States

Workers

Union Membership and Income Inequality

The union membership rate tracks the percentage of all workers who are members of a union. In 1955, the membership rate peaked at 35 percent. Union membership remained strong until the late 1960s. In 1970, the membership rate stood at 29.1 percent. Since then it has fallen steadily. The most recent data from the Bureau of Labor Statistics shows a nationwide membership rate of 11.1 percent. There have been a number of negative impacts that correlate with the decline in union density. One of the clearest is an increase in income inequality.

CEPR and Evan Butcher / September 09, 2015