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Latin America and the Caribbean

Snowden’s Revelations Go from Being a “Serious Breach” to Not “Significant” as Obama Administration Shifts Message

As we have previously noted, the Obama administration has reversed course, seeking to lower the profile of the Snowden case after its threats against Russia, Ecuador, and Hong Kong backfired and after apparently realizing that public support for Snowden remains high despite a U.S. government-led effort to demonize him in the media. This has resulted in a litany of mixed messages from senior administration officials.

The Guardian and AP reported on Saturday that when asked about Snowden, Ambassador Susan Rice, who yesterday began her new position as National Security Adviser, had responded that “I don't think the diplomatic consequences, at least as they are foreseeable now, are that significant.” But, the AP reported, “U.S. Defense Secretary Chuck Hagel and Gen. Martin Dempsey, chairman of the Joint Chiefs of Staff, have called Snowden's leaks a serious breach that damaged national security. Hagel said Thursday an assessment of the damage is being done now.”

AP also noted that Rice attempted to do damage control, responding to “commentators who say Snowden's disclosures have made Obama a lame duck, damaged his political base, and hurt U.S. foreign policy.”

Rice’s statements on Snowden – which were made before revelations in Der Spiegel regarding U.S. spying on the E.U. – also contrast with rhetoric from top legislators, both Democrats and Republicans. Senator Dianne Feinstein has accused Snowden of “treason,” and House Speaker John Boehner called him a “traitor.”

The change in the White House’s tone came last week as Obama told reporters during his visit to Senegal, “I'm not going to be scrambling jets to get a 29-year-old hacker,” and “I get you that it’s a fascinating story for the press,” …but “in terms of U.S. interests, the damage was done with respect to the initial leaks.”

CEPR / July 02, 2013

Article Artículo

Did President Obama's Climate Change Speech Pass the Market Test?

It would be wrong to place too much emphasis on short-term movements in stock prices. As a practical matter they can be moved by almost anything, in either direction. Nonetheless, some folks were anxious to note a plunge in stock prices while President Obama was giving his speech on global warming as evidence that the President really meant business. For example, Andrew Revkin told readers:

"But if you doubt the reality of this shift [away from coal], just look at the news coverage from Monday of the drop in the price of shares in coal companies ahead of the speech. This headline in Street Insider says it all: 'Coal Stocks Routed as Pres. Obama Preps to Tackle Carbon Emissions.'"

Being a curious sort, I checked the price of the coal stocks listed and noticed that most had largely recovered by the end of the day, although they were down for the week. Here's what the picture looks like for the 5 coal companies mentioned in the referenced article.

pizza 28205 image001

Source: StreetInsider.com.

Dean Baker / June 29, 2013

Article Artículo

Wage Growth and Unemployment in the States

The median wage in 2012 (about $16.28/hr) was only 5.7 percent higher (in real, inflation adjusted dollars) than it had been in 1973. Part of this is explained by a 3.5 percent drop in the downturn, but the bigger story was the three prior decades of paltry wage growth.

The culprits in this story are legion and include--over the long haul--a collapse in private sector union density, a meager (in value and scope) minimum wage, workers-be-damned trade policy, and job growth crowded into low-wage service occupations.  But a big part of the story is simply slack in the labor market.  Over the past generation, the only respite from unrelenting downward pressure on wages came during a brief spell of full employment in the late 1990s.  Those years saw wage gains across the board, closely resembling the shared prosperity of the 1947-1973 era.  But on either side of that boom, when high rates of unemployment were the norm, wages (especially for those at the median and below) fell steadily.

We can see the importance of full employment at work in the relationship between wage growth and unemployment in the states across the boom of the late 1990s and across the last business cycle.  The graph below plots the change in real wages for two seven year periods: from 1996-2002 and from 2006-2012 (the latter running from the year before the recession to the most recent available annual data) against each state’s unemployment rate at the midpoint of the period (1999 and 2009).

In the late 1990s, state unemployment rates clustered around that national rate of just over 4 percent, and only three states suffered unemployment rates over 6 percent.  Workers at most deciles, accordingly, enjoyed robust wage growth.  Full employment was especially important for workers at the bottom of the wage distribution.  Wage growth—and the relationship between full employment and wage growth—was strongest at the 10th decile and weakest at the 90th.

CEPR and Colin Gordon / June 28, 2013