Message to the US:

Blame the Wars, Not China

By Paul Kellogg

Progressive America Rising via PolEconAnalysis

Dec 4. 2010 – There is a growing chorus of voices in the media and the academy singling out the actions of the Chinese state as central to the dilemmas of the world economy. This focus finds its most articulate presentations, not in the xenophobia of the right, but in the polite analysis of many left-liberals.

Paul Krugman, for instance, writing in the run-up to November’s G20 summit in South Korea, praised the United States’ approach of creating money out of nothing (“quantitative easing”) as being helpful to the world economy, and criticised the Chinese state’s attempts to keep its currency weak as being harmful. “The policies of these two nations are not at all equivalent”, he argues, adding his influential voice to the chorus which is increasingly targeting China for the world’s woes.[1] Krugman’s, however, is a simplistic analysis which overlooks the role of the US over decades in creating huge imbalances in the world economy, and has the dangerous effect of scapegoating one of the poorest nations of the world (China) for the problems created by the world’s richest.

Krugman’s argument proceeds through a sleight of hand. He objects to the attempts by the Chinese state to keep down the value of its currency – the yuan – as a series of policies whose “overall effect … on foreign economies is clearly negative”. This is a common theme – China’s “weak-yuan” currency being good for China (making its exports cheaper in world markets) and bad for the rest of the world.

But there is a problem. By his own admission, the US policy of creating money out of nothing will result in a “weaker American dollar”. What he doesn’t say, but what is implicit in his analysis, is that this US policy is identical to China’s – a “weak-yuan” policy in the latter, matched by a weak-dollar policy in the former. Krugman nonetheless lets the US off the hook because, he argues, even though the US dollar is certain to fall in value as a result of the new trillions being created, “that is not the ultimate goal”.

Judging a policy on its intent rather than its effect is disingenuous. Brian Burke’s intent as general manager of the Toronto Maple Leafs has been to deliver a Stanley Cup to Toronto. Hockey fans are unlikely to forgive him, though, for the fact that his policies see the Leafs sitting, again, near the basement of their conference. However, let’s take Krugman at face value. Why does he see the US policy as good for the world? Because, he argues, “basically, the United States is pursuing a policy that increases overall world demand” and China “is pursuing a contractionary domestic monetary policy, reducing overall world demand”.

Let’s begin with some of the key facts. At the peak of the economic crisis, the United States, Canada, and the European Union had to borrow hundreds of billions of dollars from the rest of the world to finance stimulus programs to stabilise their economies. China also engaged in serious fiscal stimulus (relative to GDP virtually on the same scale as the United States)[2], but unlike the North American and European powers, it was able to do so without borrowing a penny from the rest of the world.[3]

Continue reading Blame US Wars for Our Economic Problems – not China →

Before a vote on legislation in the House of Representatives under regular order, you need a vote on the rules for debate. That’s what we just saw with their upcoming vote today on extending the tax cuts put in place by George W. Bush for the first $250,000 of income. And we have the results of that vote. Every Republican opposed, along with 33 Democrats. 18 members, nine in each party, didn’t vote on the rule.

The Democratic no votes included mostly people who lost their election (lame duck Congress members in CAPS):

ADLER, Altmire, BAIRD, BEAN, BERRY, Boren, BOYD, BRIGHT, Chandler, Connolly, DAHLKEMPER, A.DAVIS, ELLSWORTH, HERSETH SANDLIN, Himes, KIRKPATRICK, Lipinski, MARSHALL, Matheson, McIntyre, MINNICK, MITCHELL, Moran, PERRIELLO, Peters, Peterson, POMEROY, Ross, Shuler, SPACE

As expected, Republicans gave the usual line about this being a tax increase on small businesses, etc. I think what the 33 Democratic defections shows a combination of wanting rich people to have tax cuts (Connolly, Moran) and not wanting there to be a vote on the final bill so as not to be tarred as a tax-raiser, despite the fact that the vote cuts taxes for everyone in America. Democrats ingeniously found a work-around that ensures a single vote on just the tax cuts on the first $250,000 of income, without the possibility of a motion to recommit or other amendments.

Alarmed & Angry at Christmas Time

By Carl Bloice – BlackCommentator.com Editorial Board
Black Commentator
November 2, 2010

http://www.blackcommentator.com/404/404_lm_angry_christmas_time.php

It was just a routine call to set up the logistics for weekend football watching and I was somewhat stunned by the response I got from my friend when I asked him how he was. “I am angry,” he said. About what? “Those (explicative) are not going to extend unemployment insurance.” I recalled that I had recently sent out a couple emails that used another expletive to describe the first vote in the lame duck Congressional session which didn’t reach the two-thirds majority needed to take emergency action to keep benefits going to nearly 2 million people unsuccessfully looking for work. “They really going to do it,” he said, reflecting the sudden, shocking awareness that that one third of the members of the U.S. House of Representatives were prepared to allow all those people – victims of an economic crisis not of their making – to face the holidays with no income.

The number of people who have been out of a job for more than six months is now 6.2 million. Congress has never cut off extended benefits when the unemployment rate was above 7.4 percent. It’s now at 9.6 percent.

“It is hard to believe, as the holidays approach yet again amid economic hard times, but Congress looks as if it may let federal unemployment benefits lapse for the fourth time this year,” the New York Times said editorially last week.

That’s something to get really mad about.

Any shrink will tell you that there’s not something necessarily bad about being angry; in fact, trying to repress being damn mad might not be good for you. Still, we are heading into the holiday season and the pressure is on to “be of good cheer.” Yet, all over the North “Atlantic Community,” situations are being described as “dickensonian,” a reference to Charles Dickens’s “A Christmas Carol.” The problem is despite being repeatedly reminded of our Judeo-Christian heritage, Scrooge seems to be getting the upper hand on Santa,
the Maccabeen insurgents and the Nazareth carpenter’s son.

The richest and most powerful nation on the planet somehow can’t afford to maintain an adequate educational system. College tuition costs go up, classes are cut and secondary school teachers are laid off while many of those who remain find themselves using their own money to buy reading materials and school supplies. More than 2.3 million homes have been repossessed by banks and mortgage lenders over the past three years; more than one million American households expected to have been foreclosed upon this year 2010.
About 40 percent of families facing eviction are renters whose landlords were foreclosed upon and the number of children displaced from their homes, schools and neighborhoods steadily increases.

Continue reading Alarmed & Angry at Christmas Time →

TOM BREEN,Associated Press

Watch Ed Show segment on benefits here.

Extended unemployment benefits for nearly 2 million Americans begin to run out Wednesday, cutting off a steady stream of income and guaranteeing a dismal holiday season for people already struggling with bills they cannot pay.

Unless Congress changes its mind, benefits that had been extended up to 99 weeks will end this month.

That means Christmas is out of the question for Wayne Pittman, 46, of Lawrenceville, Ga., and his wife and 9-year-old son. The carpenter was working up to 80 hours a week at the beginning of the decade, but saw that gradually drop to 15 hours before it dried up completely. His last $297 check will go to necessities, not presents.

“I have a little boy, and that’s kind of hard to explain to him,” Pittman said.

The average weekly unemployment benefit in the U.S. is $302.90, though it varies widely depending on how states calculate the payment. Because of supplemental state programs and other factors, it’s hard to know for sure who will lose their benefits at any given time. But the Labor Department estimates that, without a Congress-approved extension, about 2 million people will be cut off by Christmas.

Congressional opponents of extending the benefits beyond this month say fiscal responsibility should come first. Republicans in the House and Senate, along with a handful of conservative Democrats, say they’re open to extending benefits, but not if it means adding to the $13.8 trillion national debt.

Continue reading 2 million to lose jobless benefits as holidays arrive →

NEW YORK | Tue Nov 30, 2010 10:57am EST

NEW YORK (Reuters) – The New York State Assembly on Monday gave final approval to a six-month moratorium on a controversial method of natural gas extraction while state and federal agencies review its possible health impacts.

The moratorium — which calls for no drilling permits to be issued until at least May 15, 2011 — was approved by the state Senate in August.

The legislation now heads to Governor David Paterson, who leaves office in January and has until the end of this year to sign the measure into law.

In an interview last week on a local radio program, Paterson indicated support for the bill, saying the state would not “risk public safety or water quality.”

Continue reading New York State Assembly Approves Moratorium on Fracking →

Poverty Fuels Anger During

General Strike in Portugal

By Emilio Rappold
Portside.org via Monsters and Critics

PNov 24, 201 – Lisbon – Fatima, 82, barely has enough to eat herself, yet she has come to distribute bread buns to pickets in front of a Lisbon post office to express her support for Wednesday’s general strike in Portugal.

‘I fully back the strike, because we are hungry,’ she fumes.

‘Two of my three sons have no job,’ the petite woman complains. ‘When did we last see such a situation in Portugal?’

Continue reading Portuguese Workers Use General Strike to fight Bankster Austerity →

A huge win for clean energy in Kentucky

Clean energy activists are elated over a big victory in the heart of coal country, where a Kentucky power cooperative has agreed to cancel plans to build a new coal-fired power plant.

The East Kentucky Power Cooperative struck a deal with an alliance of grassroots activists and others to halt plans for the proposed coal-burning unit at Smith Power Station in Clark County, Ky. The agreement involves the grassroots citizens group Kentuckians for the Commonwealth along with the Kentucky Environmental Foundation, Sierra Club, the Kentucky attorney general and Gallatin Steel, the EKPC’s biggest industrial customer. Also involved in the agreement were individual co-op members including noted Kentucky author and farmer Wendell Berry, a member of the Shelby Energy co-op.

Besides canceling the plant’s construction, EKPC will also commit $125,000 to working with the public interest groups and its member co-ops to come up with ideas for new energy efficiency programs and clean-energy options.

“Renewables and demand-side management programs will play increasingly important roles in the energy industry,” said EKPC Chief Financial Officer Mike McNalley. “This collaborative will help EKPC gather ideas and feedback to explore the realistic potential of renewables and demand-side management here in Kentucky.”

Continue reading Power Company Cancels New Coal Fired Plant in Kentucky →