Category - Economics: USA

TPP talks make progress but no deal on Pacific trade

BBC, August 1

Negotiators from 12 Pacific nations have finished a week of talks without agreement on a regional trade deal.

But the US trade representative Michael Froman said ministers were more confident than ever that a deal on the proposed Trans-Pacific Partnership was within reach.

He said it would support jobs and economic growth.

Among the sticking points were issues relating to the automobile sector and access to dairy markets.

No date has been set for the next round of talks.

Jobs Report Disappoints, Participation Rate Falls to Lowest Since 1977

Bloomberg Business, By Sho Chandra, July 2

The U.S. labor market took one step forward and one back in June as job creation advanced while wages stagnated and the size of the labor force receded.

The addition of 223,000 jobs followed a 254,000 increase in the prior month that was less than previously estimated, a Labor Department report showed Thursday in Washington. The jobless rate fell to a seven-year low of 5.3 percent as more people left the workforce.

The figures indicate corporate managers are confident they can temper hiring and meet demand against a backdrop of stronger consumer spending and feeble overseas markets. At the same time, more moderate job gains may still be enough to reduce the unemployment rate, consistent with the Federal Reserve’s perceived timetable to raise borrowing costs by year-end.

“One month’s low number wouldn’t shake our optimism,” Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, said before the report. “The job market still has a ways to go but we’re making progress.”

Puerto Rico’s Governor Says Island’s Debts Are ‘Not Payable’

New York Times, By Michael Corkery & Mary Williams Walsh, June 28

Puerto Rico’s governor, saying he needs to pull the island out of a “death spiral,” has concluded that the commonwealth cannot pay its roughly $72 billion in debts, an admission that will probably have wide-reaching financial repercussions.

The governor, Alejandro García Padilla, and senior members of his staff said in an interview last week that they would probably seek significant concessions from as many as all of the island’s creditors, which could include deferring some debt payments for as long as five years or extending the timetable for repayment.

“The debt is not payable,” Mr. García Padilla said. “There is no other option. I would love to have an easier option. This is not politics, this is math.”

It is a startling admission from the governor of an island of 3.6 million people, which has piled on more municipal bond debt per capita than any American state.

Why Is The U.S. Desperate To OK Slavery In Malaysia?

Huffington Post, By Akbar Shahid Ahmed, Ryan Grim & Laura Barron-Lopez, May 26

Washington – On Friday night, in an impressive display of dysfunction, the U.S. Senate approved a controversial trade bill with a provision that the White House, Senate leadership and the author of the language himself wanted taken out.

The provision, which bars countries that engage in slavery from being part of major trade deals with the U.S., was written by Sen. Bob Menendez (D-N.J.). At the insistence of the White House, Menendez agreed to modify his language to say that as long as a country is taking “concrete” steps toward reducing human trafficking and forced labor, it can be part of a trade deal. Under the original language, the country that would be excluded from the pending Trans-Pacific Partnership pact is Malaysia.

But because the Senate is the Senate, it was unable to swap out the original language for the modification. (The chamber needed unanimous consent to make the legislative move, and an unknown senator or senators objected.) So the trade promotion authority bill that passed Friday includes the strong anti-slavery language, which the House will now work to take out to ensure that Malaysia (and, potentially, other countries in the future) can be part of the deal.

Observers are left with a deeper question: Why, in the year 2015, is the White House teaming up with Republican leaders essentially to defend the practice of slavery?


But Malaysia also borders what is effectively China’s jugular vein: the Strait of Malacca.

Via Naked Capitalism: America’s First Black President Throwing Slaves Under the Bus on TPP

Senate Cuts Deal To Pass Obama’s Secretive Trade Bills

Huffington Post, By Jessica Schulberg & Michael McAuliff, May 13

Washington – Senate leaders reached a deal Wednesday to push ahead with votes on President Barack Obama’s trade deals.

The agreement came after Democrats blew up an earlier agreement Tuesday over fears that key measures they have sponsored would fail, or never get votes.

But Senate Majority Leader Mitch McConnell (R-Ky.) announced Wednesday afternoon that leaders had found a way around the impasse by agreeing to let Democrats have votes on key trade enforcement measures before holding votes on the fast-track authority that Obama needs to finish new massive trade deals with Pacific Rim countries and Europe.

“I think that we’ve come up with something that is fair,” Senate Minority Leader Harry Reid (D-Nev.) said.

Obama Administration Says Yes To Drilling In The Arctic

Climate Progress, by Emily Atkin, May 11

The Obama administration has given conditional approval to a controversial proposal by Royal Dutch Shell to drill for oil in the Arctic Ocean this summer.

On Monday, the Department of Interior’s Bureau of Ocean Energy Management (BOEM) approved Shell’s exploration plan for the Chukchi Sea, which entails drilling up to six wells approximately 70 miles northwest of Wainwright, Alaska. The plan is for exploratory drilling, a sort of first step that companies take to determine whether a region is feasible for large-scale production.

In announcing the conditional approval, BOEM cited its recently-issued safety regulations for drilling in the U.S. portion of the Arctic Ocean, including the Chukchi Sea, where big oil companies have long been hoping to lay their claim. Those regulations require companies to have contingency plans for mishaps — companies must be able to “promptly deploy” emergency containment equipment to deal with a spill, and must build a second rig close to their initial operations so a relief well could be drilled in the event of a blowout, among other things.

“We have taken a thoughtful approach to carefully considering potential exploration in the Chukchi Sea, recognizing the significant environmental, social and ecological resources in the region and establishing high standards for the protection of this critical ecosystem, our Arctic communities, and the subsistence needs and cultural traditions of Alaska Natives,” BOEM Director Abigail Ross Hopper said in a statement. “As we move forward, any offshore exploratory activities will continue to be subject to rigorous safety standards.”

Sanders Raises $3 Million in Four Days; Will He Split the Party?

Naked Capitalism, By Gaius Publius, May 10

My headline has two parts (you can see it above) but the second is, for me, the most important and the most interesting. I’ve been writing about the split — the chasm, really — between progressives and “progressives” in the Democratic Party for at least a year, and Howie has been documenting the sins of money-bought “Democrats” like the DCCC since forever.

Some want that split to heal, and some want it to widen. Democrats who want it to heal are motivated by two main interests, it seems. One is the desire, understandable enough, to keep government out of the hands of Republicans, who really are the greater evil, if only by a little.

The other interest, though, is more insidious and far less defensible. If the party pulls together, those whose careers are tied to the success of its money-soaked DLC wing will see those careers advanced — in some cases, spectacularly.

The losers in all this? Unbailed-out mortgagees; students with crushing personal debt; the soon-to-explode bomb of poverty among soon-to-retire 401k-holders — the jobless; the poor; the barely-making-it in a Nike and Apple “made in Asia” economy. The bottom 80% who are going nowhere or going down. The traditional constituents, in other words, of the real Democratic Party as constituted in the pre–Bill Clinton years.

Who wants the split in the Democratic Party to widen? Anyone who wants progressive change in America at a non-incremental pace. And everyone, voter or activist, who no longer wants to reward “professional Democrats” — self-serving, money-serving women and men — for their constant and regular betrayals.

We Can’t Let John Deere Destroy the Very Idea of Ownership

Wired, By Kyle Wiens, April 21

It’s official: John Deere and General Motors want to eviscerate the notion of ownership. Sure, we pay for their vehicles. But we don’t own them. Not according to their corporate lawyers, anyway.

In a particularly spectacular display of corporate delusion, John Deere—the world’s largest agricultural machinery maker —told the Copyright Office that farmers don’t own their tractors. Because computer code snakes through the DNA of modern tractors, farmers receive “an implied license for the life of the vehicle to operate the vehicle.”

It’s John Deere’s tractor, folks. You’re just driving it.

Several manufacturers recently submitted similar comments to the Copyright Office under an inquiry into the Digital Millennium Copyright Act. DMCA is a vast 1998 copyright law that (among other things) governs the blurry line between software and hardware. The Copyright Office, after reading the comments and holding a hearing, will decide in July which high-tech devices we can modify, hack, and repair—and decide whether John Deere’s twisted vision of ownership will become a reality.


General Motors told the Copyright Office that proponents of copyright reform mistakenly “conflate ownership of a vehicle with ownership of the underlying computer software in a vehicle.” But I’d bet most Americans make the same conflation—and Joe Sixpack might be surprised to learn GM owns a giant chunk of the Chevy sitting in his driveway.

The Trans-Pacific Partnership: Toward Absolutist Capitalism

Naked Capitalism, By Lambert Strether, April 20

There are many excellent arguments against the Trans-Pacific Partnership (TPP), two of which — local zoning over-rides, and loss of national sovereignty — I’ll briefly review as stepping stones to the main topic of the post: Absolutist Capitalism, for which I make two claims:

1) The TPP implies a form of absolute rule, a tyranny as James Madison would have understood the term, and

2) The TPP enshrines capitalization as a principle of jurisprudence.

Zoning over-rides and lost of national sovereignty may seem controversial to the political class, but these two last points may seem controversial even to NC readers. However, I hope to show both points follow easily from the arguments with which we are already familiar. Both flow from the Investor-State Dispute Settlement (ISDS) mechanism, of which I will now give two examples. more

MoJo Explicator: Here’s What You Need to Know About the Trade Deal Dividing the Left

Three Charts Explain the Student Loan Mess

Bloomberg Business, By Noah Smith, April 17

Here are three charts about student loans that have me worried. First, the total amount of student loans in the U.S. has risen steadily, doubling just since the financial crisis:

This is troubling, although by now it’s a story that most people know. But what fewer people realize is that the federal government has rapidly taken over almost the entire student-loan market since the crisis. Federally owned student loans rose from zero in the mid-1990s, to a bit more than $100 billion on the eve of the crisis, to about $850 billion in late 2014:

…Student debt now comprises 45 percent of federally owned financial assets. Oy!