Iceland’s Recovery Proves Fallacy of Economic Austerity
As Greece teeters toward collapse because of austerity measures imposed upon it by international lenders, the current doctrine of cutting public employment and programs in the midst of an economic crisis perhaps deserves a reassessment.
In his New York Times column, Nobel Prize-winning economist Paul Krugman describes the austerity doctrine, so in vogue these days, this way:
EPI Honors Krugman with Distinguished Economist Award
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Paul Krugman, The New York Times columnist and Nobel Prize-winning economist, was honored last night with the Economic Policy Institute’s (EPI‘s) first-ever Distinguished Economist Award.
In this EPI video, Krugman shares his vision for a decent society, discusses the radicalizing impact of the policy debates of the past decade and reveals his philosophy on making our society a better one for all.
Krugman, says Robert Johnson, executive director of the Institute for New Economic Thinking,
does this translation from the technical, high church of economic thinking to things that common sense people can understand.
The award was presented at EPI’s 25 anniversary celebration that also honored former Labor Secretary Ray Marshall, one of EPI’s founding members, and the workers in Wisconsin who rose up against Gov. Scott Walker’s (R) attack on collective bargaining and sparked a nationwide movement. Click here for a video tribute to Marshall and here for a slide on the Wisconsin actions.
N.J.’s Wowkanech: Workers’ Rights, Civil Rights Same Struggle
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At a jammed Electrical Workers (IBEW) hall in Trenton yesterday, New Jersey State AFL-CIO President Charles Wowkanech reminded the audience of union, community and civil rights activists that Dr. Martin Luther King Jr.:
“understood the link between economic justice and social justice, and that the fight for labor rights and civil rights was the same struggle.”
The We Are One event on the anniversary of King’s 1968 assassination included AFT President Randi Weingarten, Pulitzer Prize-winning economist and New York Times columnist Paul Krugman, civil rights leaders and lawmakers.
King was killed in Memphis helping sanitation workers fighting for collective bargaining rights and a union. Weingarten tied King’s life-long struggle for equality to today’s struggles for workers’ rights.
Dr. King fought for civil rights, economic opportunity and educational opportunity, and that’s what we are fighting for today—not budget issues.
Paul Krugman: Walker’s Power Play
Wisconsin Gov. Scott Walker’s attacks on working families are not about shoring up state finances, economist Paul Krugman correctly points out today.
…what’s happening in Wisconsin isn’t about the state budget, despite Mr. Walker’s pretense that he’s just trying to be fiscally responsible. It is, instead, about power. What Mr. Walker and his backers are trying to do is to make Wisconsin — and eventually, America — less of a functioning democracy and more of a third-world-style oligarchy. And that’s why anyone who believes that we need some counterweight to the political power of big money should be on the demonstrators’ side.
Wall Street CEOs and their politican puppets like Walker recognize that the strongest and most effective counterweight to unbridled greed is unions. And crippling workers’ ability to speak with a strong voice through their unions is what Walker’s power play is really all about.
There’s a bitter irony here. The fiscal crisis in Wisconsin, as in other states, was largely caused by the increasing power of America’s oligarchy. After all, it was superwealthy players, not the general public, who pushed for financial deregulation and thereby set the stage for the economic crisis of 2008-9, a crisis whose aftermath is the main reason for the current budget crunch. And now the political right is trying to exploit that very crisis, using it to remove one of the few remaining checks on oligarchic influence.
Krugman further points out that anyone who cares about retaining government of the people by the people should hope that attacks on unions. Because ultimately, it’s not about unions. It’s about all people who work for a living and about maintaining an effective counterweight to the .
You don’t have to love unions, you don’t have to believe that their policy positions are always right, to recognize that they’re among the few influential players in our political system representing the interests of middle- and working-class Americans, as opposed to the wealthy. Indeed, if America has become more oligarchic and less democratic over the last 30 years — which it has — that’s to an important extent due to the decline of private-sector unions.
Talking Unions this Holiday Season
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At gatherings with family and friends this holiday season, you may run into those who don’t see unions as key to rebuilding America and the middle class. Be prepared with the facts. Our friends at American Rights at Work have compiled this guide to help you shed light on what unions are really all about.
MYTH: Unions are run by big, overpaid bosses.
FACT: Unions are run by workers.
- A union is simply a group of employees who join together to address workplace issues, so they can improve their working conditions and have a fair shot at a better life for themselves and their families.
- Unions are democratic institutions. At the local, state, and national level, all union leadership is elected by majority votes—just like elections for public office.
Urgent Action Needed to Stop Currency Manipulation
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It’s no secret that the Chinese government’s currency manipulation policy has caused the loss of millions of manufacturing jobs. But the question is whether the federal government has the will to act “to level the playing field and provide the support and assistance that millions of American workers and their communities expect and deserve,” United Steelworkers (USW) President Leo W. Gerard said today.
Testifying before the U.S. House Ways and Means Committee this morning, Gerard said passing the Currency Reform for Fair Trade Act (H.R. 2378) would be a vital first step to begin the process of economic recovery. The bill would give the U.S. Treasury Department new tools to combat currency manipulation.
Over the past 10 years, the Chinese government’s policy of deliberately devaluing its currency has caused the U.S. trade deficit with China to balloon from $84 billion in 2001 to $227 billion in 2009. The Economic Policy Institute (EPI) estimates that the growth in the U.S. trade deficit with China since 2001 cost 2.4 million U.S. jobs between 2001 and 2008.
Bold Action On China Currency Would Help U.S. Economy
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In two days of hearings that begin tomorrow, the House Ways and Means Committee will take a close look at the impact of the Chinese government’s policy of manipulating its currency on our economy.
He’s not on the Ways and Means witness list, but the committee should check out what economist Paul Krugman has to say about the subject. Writing in the New York Times yesterday, Krugman says the Chinese government has intimidated U.S. policymakers and businesses into not acting in our best interests because they are afraid that the Chinese governmnet—our biggest bond holder—will call in our debt if we get in their face about their currency policies.
But Krugman says, in effect, “bring it on.” He says that in a world awash with excess savings, “we don’t need China’s money” especially because the Federal Reserve could and should buy up any bonds the Chinese sell.
It’s true that the dollar would fall if [the Chinese government] decided to dump some American holdings. But this would actually help the U.S. economy, making our exports more competitive.
Congress Must Fix Trade Deficit by Addressing China Currency Manipulation
The U.S. trade deficit hit $49.9 million in June, the highest it’s been in nearly two years. But many in Congress don’t see the need to solve this dangerous imbalance by addressing the problem behind the deficit—China’s currency manipulation.
Economist Paul Krugman correctly opposes such a timid position. Today, he took issue with an editorial by the New York Times—his employer—that called for a soft approach to China. Krugman writes:
My colleagues believe that we should lecture the Chinese on what a bad thing they’re doing, but not actually threaten sanctions, lest we start a trade war. My belief is that this gets us nowhere.
Right now, China is following a policy that is, in effect, one of imposing high tariffs and providing large export subsidies because that’s what an undervalued currency does. That should be a violation of trade rules; it might in fact be a violation, but the language of the law is vague on the subject.
Health Care Reform Makes Us ‘More Decent’ Nation
This morning, The New York Times op-ed columnist Paul Krugman presented the straight-forward, reasoned and no-hype case why the U.S. House this weekend should pass health care reform.
For one thing, he writes, the bill would end abuses like those of a South Carolina health insurance company that had “a systematic policy of revoking its clients’ policies when they got sick.”
What is on the table, ready to go, is legislation that is fiscally responsible, takes major steps toward dealing with rising health care costs, and would make us a better, fairer, more decent nation.
Read Krugman’s entire column here and then call 1-877-3-AFLCIO and tell you representative to vote this Sunday to pass health care reform.
Momentum Building for Action on China Currency Manipulation
The momentum is building for the United States to take strong action to counteract manipulation of its currency by China’s government.
More than 130 members of Congress signed on to a letter from Reps. Mike Michaud (D-Maine) and Tim Ryan (D-Ohio) delivered today that urges Treasury Secretary Timothy Geithner and Commerce Secretary Gary Locke to take strong action up to and including countervailing duties (CVD) or tariffs because of currency manipulation.
Michaud and Ryan’s letter is the latest in growing calls by Congress and by top economists for the United States to act on the manipulation of currency by China’s government. If Geithner does act, the administration could impose remedies, such as tariffs, to create a fairer trade balance with China.
AFL-CIO President Richard Trumka, who co-chairs the Fair Currency Coalition, thanked Michaud and Ryan for their letter:
The working families of this country need jobs now. If we want a recovery that will invest in manufacturing, boost exports, balance trade, and create jobs we must stop China and other countries from illegally manipulating their currency. China’s prolonged undervaluation…is an illegal export subsidy. That is why the U.S. government must allow CVD cases to proceed. American workers expect their government to stand up for them.
