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Article Artículo

Economic Growth

Latin America and the Caribbean

Mexico

World

John Kerry on the Latin American Economies: Getting it Half-Right

On Sunday U.S. Secretary of State John Kerry published an op-ed in the Miami Herald, in which he gave the official Washington view on democracy and economic progress in Latin America.

“Not so long ago, naysayers doubted that the growth of democracy in Mexico and elsewhere across the Americas would translate into better lives for the people who live there,” he writes.

And then the bait and switch: “The last decade has been a story of democracy and economic achievement in Latin America and the Caribbean. The region’s economies grew at a rate of 4 percent a year, trade with the United States nearly tripled, and more than 73 million people were lifted out of poverty.”

Now the part about the regional growth rate is true. But Mexico didn’t share in the recovery:

Figure 1. Mexico and Latin America: Average Annual Real Per-Capita GDP Growth, 1960-2013
Mexico v LA blogpostimage

The above figure used GDP growth per person, which is a better measure than the overall growth rate that Kerry uses (since population growth doesn’t increase living standards). Note that Latin America and the Caribbean did in fact experience a growth rebound in the past decade. Average annual growth was just 0.4 percent annually from 1980-2000 – a long-term growth failure that is uncommon in the history of capitalism.

The region grew at a vastly better 2.0 percent annual rate from 2000-2013, despite the Great Recession. But not Mexico, which averaged only 0.6 percent annually, slightly worse than during the lost decades. The poverty rate in Mexico in 2012 (52.3 percent) was as bad is it was in 1994 (52.4 percent). So much for “democracy and economic achievement” in Mexico. The U.S. government of course is reluctant to acknowledge this because Mexico has been run by friendly right-wing governments for decades, and NAFTA has been the model for subsequent commercial agreements.

CEPR / June 04, 2014

Article Artículo

NPR Hypes the Job Loss Story on Restricting Carbon Dioxide Emissions

Like building a new airport, restricting carbon dioxide emissions will cost jobs. (If it's not obvious that building a new airport will cost jobs, then you better study more economics. The new airport will pull business away from other forms of transportation and other airports. That will cause people to lose jobs. On net, there will likely be job gains, but there will definitely be people who lose their job as a result of the new airport who either don't get another job or at least another job that is comparable to the one they lost.)

The reason that many people may not immediately realize that most government measures to improve the infrastructure, or really promote any form of economic development, lead to job loss is that the media generally ignore the job losers. They don't talk to the workers at the airports that are losing business, the truck drivers who might be displaced by air freight, or all the workers in restaurants, stores, and hotels who served the old facilities.

That is clearly not the case with measures to restrict carbon dioxide emissions. We have already heard numerous accounts of how this will devastate the economies of large parts of the country that are dependent on coal. NPR ran two such pieces on Morning Edition today.

It would be helpful if these stories gave some idea of the numbers involved. According to the Bureau of Labor Statistics there are just under 80,000 employed by the coal mining industry. This is less than 0.06 percent of total employment. If the economy generates jobs at the rate of 200,000 a month (roughly its pace over the last year), the total number of jobs in the coal industry are equal to the number that would be generated in 12 days.

Of course the measures proposed by Obama would not immediately eliminate all the jobs in the industry. They are supposed to be phased in by 2030 and even then the number of jobs in the industry is not likely to be zero. If we assume that the job loss occurs at an even pace over the next 16 years, it comes to a bit less than 5,000 jobs a year.

Dean Baker / June 03, 2014

Article Artículo

Honduras

Latin America and the Caribbean

World

108 Members of Congress Urge Action on Political Repression and Human Rights Abuses in Honduras

Last week, Secretary of State John Kerry received a letter regarding “egregious violations of human rights” in Honduras signed by 108 members of Congress. The letter represents the latest in an ongoing effort by social movements and citizens’ organizations in Honduras, diaspora community groups, U.S. solidarity activists and many others to reverse the trend of political repression and human rights abuses since the 2009 coup ousting President Manuel Zelaya.

Rep. Jan Schakowsky (D- IL), who circulated the letter, and early signers Rep. “Hank” Johnson (D- GA) and Rep. Sam Farr (D – CA) have all been engaged on this issue for years. The signers are concerned with human rights violations that have been documented under the National Party governments of President Porfirio Lobo and the current president, Juan Orlando Hernández. In terms of U.S. foreign policy, the most important change they are calling for is an end to U.S. government support and training for groups and individuals responsible for these human rights abuses.

The situation in Honduras is alarming. That country has the highest homicide rate in the world, with an average of 19 murders each day in 2013. Since targeted and politically-motivated killings have become an almost regular occurrence, people struggling for justice put their lives at risk. Based on the government’s record keeping, at least 33 journalists were killed during the previous president Porfirio Lobo’s term (2010-2014). As the congressional letter says, other targeted groups include “members of the LGBT community and indigenous and campesino activists.” Many lands rights activists have been killed, and the letter to Secretary Kerry explains how the Honduran government has allowed the homicides to take place with impunity:

CEPR and Stephan Lefebvre / June 02, 2014