What Ever Happened to Latin America?

March 30, 2017

U.S. foreign policy has often been driven by responding to crises or threats to our national interests and security.  This response is no different under the Trump administration, although the public pronouncements and policy decisions are to say the least unconventional.  As in the past we send troops to fight Middle East wars; we engage China and the rest of Asia over trade and investment; we pay close attention to our relationship to our European allies, especially in terms of dealing with growing Russian expansionism; and we often provide generous assistance to those desperately poor and ill in Africa. But as was the case with other administrations, this country takes a pass on Latin America. We know it’s there south of our border but that’s pretty much the extent of our interest.

Sure we are wrapped in an epic struggle with Mexico over the wall and the North American Free Trade Agreement, but our relationship with our neighbor to the south is more about domestic issues than foreign policy concerns. Take Mexico out of the equation and all the other Latin American countries are not viewed within the context of crises, interests and security. To quote the oft-used slogan, “There is no there there.”

The fact that Latin America is way down our foreign policy agenda is probably a good thing, since we have enough on our plate with the rest of the world. But it is kind of interesting that a part of the world that sends us cocaine, baseball players, tangos, rumbas, sambas, precious metals, cheap clothes, fresh fruits and vegetables, and of course Gisele Bundchen is all but forgotten. See what happens when a part of the world is generally at peace without war, border disputes, terrorists or crazed leaders.  Sure there is massive corruption, areas of gang violence, and desperate poverty, but compared to many parts of the world Latin America is likely happy to be ignored.

U.S. disinterest was not always the case as during the 20th century we sent our troops throughout the Caribbean and Central America to “bring order and democracy” and help the people become ” like us.” This work as policeman to the hemisphere didn’t really pan out as we left the region not so much better off as relieved. Now in the 21st century our mission is largely business related – to spread Wal-Marts everywhere, bring our brand of football to the masses (the Patriots play the Raiders in Mexico City in November) and make sure that the lithium from the deserts of Bolivia and Chile make their way north to our battery manufacturers.

Thank goodness Latin America is just “there” to our south so we can spread mischief, mayhem, and malice in other parts of the world.

 


The 47%

May 24, 2016

There are a laundry list of reasons why Americans are angry, disillusioned or filled with anxiety these days. For some they feel the country is headed in the wrong direction or is directionless, for others they do not trust President Obama, others are concerned about the impact of diversity on the white population, and others just see Washington as broken and a partisan mess.

Let me add another reason to this laundry list of national depression. In a recent issue of The Atlantic, Neal Gabler, an award winning writer, talked about the travails of the middle class. In his piece he referenced a yearly survey conducted by the Federal Reserve Board that monitors American consumers. One of the questions asked was how the respondents would likely pay for a $ 400 emergency. The answer from 47% was that they would cover the $ 400 by borrowing the money, selling possessions or they would not be able to come up with the cash. Let me say that again, 47% of American consumers polled said that they could not come up with $ 400 for an emergency.

Now these Americans without the $ 400 are likely a cross section of our country – some may be receiving assistance, some are seniors on a fixed income, some are making minimum wage and some are folks from what used to be the solid middle class. (  I suspect a goodly number of the respondents were from what is generally described as the middle class since we are talking about a huge number- 47% of those who answered the questionnaire).

You want to know why people are angry and in a foul mood toward political and economic elites, the lack of $ 400 to cover an emergency is certainly at the top of the list. Income inequality is a fancy term used by economists to describe that in our economy there are winners and losers, but in the last twenty years, especially since the Great Recession, the number of losers has exploded and the middle class is in tatters.

Sadly, there is no short term solution to the $ 400 dilemma of the 47% – a comprehensive minimum wage increase is years away and is a band aid; significant pay jumps  for workers are not in the cards, only incremental cost of living bonuses; corporations are either sitting on trillions in cash and doing little with it or are shipping it offshore to avoid government-sponsored distribution programs; and any talk of freebies, whether college tuition, universal health care, parental leave or day care, are dismissed as socialistic and contributing to a furthering of that gaping hole in the national debt.

So the short and long term condition of the middle class is an acceptance of economic and financial struggle as a fact of life and a continued erosion of the American dream.What’s astounding is that at first glance $ 400 is really not a lot of money, but tell that to the 47% of American consumers.


Not That Great of a Year

December 28, 2015

In the waning days of 2015 there will be much written about the 365 days that made up this latest year of the 21st century. It is safe to say that 2015 had more downs than ups and the glass can best be described  as being half empty.

There were some encouraging economic signs in terms of job expansion and modest but consistent growth. The stock market had its moments of  excitement, but in the end the year was mostly flat. The national debt marched forward now approaching 19 trillion dollars, although the deficit began to recede a bit in large part due to budget cuts and more taxes paid by those returning to work.

Violence and personal safety took a big hit as terrorist attacks tested the resolve of the American people, mass killings became commonplace and the relationship between the police and the black community imploded. Race relations deteriorated as blacks marched in the streets to protest the killings of young men, too many unarmed or with severe mental illness.

Politics and electoral campaigning became the big story as Donald Trump tapped into the anger of white America with his no holds barred rhetoric and his authoritarian bluster, and Bernie Sanders tested the popularity and inevitability of Hillary Clinton, despite his socialist agenda. Both the Republican and Democratic establishment paid the price of do nothing government and its failure to address the economic plight of those whites at the low end of the economic ladder. President Obama did little to help the turn to the right by his annoying penchant for remaining”too cool” and failing to keep his promises.

Needless to say the mood of America is depression-filled. A huge majority say the country is on the wrong path, support for Congress is at an all time low and Obama’s popularity hasn’t been above 50% in ages. Clearly the American people want someone different at the helm, but who? Trump has no answers just outrageous statements, Hillary is viewed with extreme suspicion, Congress is likely to remain dysfunctional and Obama is playing out the string. 2016 looks like another bad year marked by tension, disappointment, division, death and a whole lot of craziness. Hope your year will be better.

 

 


Workers of the World Unite

September 16, 2010

A few numbers to help you understand the winners and losers in this time of great economic distress. Pre-tax corporate profits increased $388 billion from the second to the third quarter this year, while wages increased $68 billion. Also employee health premiums rose 13.7%, while employers’ contributions to workers health care programs dropped by .9%. Add an unemployment rate that will not budge because businesses won’t bump up hiring and the only conclusion that can be reached is that the rich get richer and the middle class gets the shaft.

Now there are many ways to look at why the middle class is getting the shaft; it could be the failed policies of Obama, or the refusal of the Republicans to cooperate with the White House, or the capitalist system is rigged in favor of big business and big banks, while the workers  struggle.

But there is another answer out there and it involves a possible solution to this economic distress in the middle class. Unfortunately, most Americans have no interest in this solution. In a word it is unions.

In Europecountries like Germany, France and England have had recessionary problems but unemployment rates that are not so intractable and entitlement programs that provide a more secure safety net.  But what these countries have are strong and active labor unions that challenge the government, take on big business, and demonstrate for better working conditions and better pay.

Right now 93% of the American work force is non-unionized, and proudly so. Americans often see unions as a goon squad that takes dues money and weakens the free market.Yes, there are examples of hard knock union bosses and annoying attacks on the free market, but what the unions do is fight for the working class and even the professional middle class.

Many fair-minded analysts of the European situation credit the unions for the far better conditions experienced in the labor force than that found in the U.S.It’s not rocket science that when people organize, speak with one voice, demand better pay and benefits and threaten their bosses with a strike, the result is often times some sort of economic victory.

So the growing gap between the haves and the have nots in this country is really not a mystery. It is the result of the organized power of big corporations and big banks and the lack of organization and power of the rest of us. Workers of the US unite.


1937 – Back to the Future

June 28, 2010

I wasn’t around in 1937 but in that year President Franklin Delano Roosevelt, facing pressure from deficit critics, decided to lessen the government’s role in spending as a way of getting out of the Depression. After five years of what we call today stimulus programs, FDR turned his attention to balancing the books and avoiding huge deficits.

Most fair-minded economists state that FDR’s decision on deficit spending had a significant effect on prolonging the Depression. Only the onset of World War II got the US out of the Depression, and of course the war was the ultimate government stimulus plan.

President Obama is now locked in a similar debate with Congress and his political rivals over continuing if not expanding the stimulus program or instead turning his attention to deficit reduction by cutting spending. Many Americans are deficit hawks as they see the government acting irresponsibly and digging us deeper into a fiscal hole. They are encouraged in their deficit fears by the Republicans who feel they have the issue to take back Congress and perhaps the presidency.

But many historians of the Roosevelt era point out that by failing to continue government spending, the US slipped back into a depression. It was government spending that was clearly moving the country back on track, but the change of direction to deficit reduction brought the country back into the dumps.  

Obama’s economic team is afraid that stopping the stimulus effort will create a double dip recesssion. They too are concerned with deficits, but they are also confident that the spending spree will create enough econmic energy to make the country healthy again, and then the debt incurred by stimulus spending can be addressed.

It is hard for many Americans to think about trillions and trillions of dollars of debt, since they equate their own household budgets with that of the entire country. But since consumers aren’t spending and business is not hiring, the only alternative is to have the government pick up the slack. Republican tax cuts sound attractive, but those cuts also create deficits, witness the Reagan and Bush years where the deficits and debts ran rampant creating most of today’s fiscal woes.

Currently, the deficit hawks are winning the argument and the stimulus programs are in jeopardy, which worries economists who are convinced we may be back on the road to a renewed recession. This is no means an easy call, but it is important to remember what happened in 1937 when FDR gave up government spending in favor of deficit reduction.


The Odd Language of the Meltdown

April 27, 2010

Watching the congressional hearings on the financial reform legislation has started to give me a headache. The major problem is the language that is used to describe what went wrong when this country and its citizen investors almost veered into a depression. There are derivatives, credit-default swaps, hedge funds, sub-prime mortgages, sovereign bonds and shadow banks – its enough to make you long for the days of the local bank down the street where you put your money in a passbook account and walked away feeling secure.

How did making money become so complicated? There of course is no simple answer, but if there is a culprit in this whole meltdown mess and the political fallout it is speculating on debt. We now live in a world where making money by not having money is accepted as common practice. Government runs on debt, speculators bet on debt, banks create ways to profit from debt, and countries hold other countries debt. The words surplus and cash on hand are almost absent from our financial lexicon.

So naturally when government, in this case the Obama administration and Democrats in Congress, want to protect the average investor who knows nothing about all these fancy debt-generated pathways to the big payday, the financial elites on Wall Street and the investment houses complain to high heaven that they are being denied an opportunity to make money as they did during the gold rush days of the Bush years. To them a 401K is chump change compared to the real money out there that is unregulated and unknown except to a fortunate few.

We are now in the midst of a new gigantic political battle, only this time it is not with the health insurance industry and the big hospital conglomerates. This time the Obama administration is taking on the financial interests who have no shame, no scruples, no soul and I think it is fair to say no spirit of patriotism. These speculators act as if the meltdown didn’t occur and that they had nothing to do with destroying the dreams of average Americans.

As is the case with all controversial matters that enter the political process in this country, there will be financial reform legislation, but it will do little to deal with the root cause of the financial crisis this country has faced the last two years – speculation on debt. The law will create some sort of consumer protection agency, there will be some loose regulation of hedge funds, and greater monitoring of all these arcane ways to make big bucks. But in the end most real people will just have to trust that somebody out there is watching their money and protecting them from another meltdown. I sure wish the days of the bank down the street with the passbook account would return.


What’s All The Complaining About?

April 6, 2010

My conservative friends send me anti-Obama and anti-government jokes and cartoons on a regular basis. I don’t mind them, in fact many of them are downright funny, and of course they are my friends. But I started to ask myself the other day, why are these job-holding, professionally paid middle class friends of mine so upset with Obama and his policies?

Let’s review the record for a moment. Since Obama took office, and especially in the last six monthy the stock market has taken off and I suspect that most of my friends began to recoup a least a substantial portion of their 401K losses. As far as I know, the federal government hasn’t increased their taxes, and if they make less than $ 250,000 ( they don’t) the health care bill won’t have a tax impact on them at all.

Then there is the growing health of the economy – growth rates in the 4% range, no sign of a double dip recession, small business is getting tax incentives, housing starts are on the increase, and all the key indicators except unemployment are on the uptick. Even employment is showing some signs of life. And those terrible bank bailouts are in some cases beginning to yield some profit for the U.S. taxpayer. Add all this to the fact that the President has taken away their precious guns, and the question becomes, what’s all the complaining about?

I can certainly understand the anger and frustration among those Americans who lost a job or a house or their life savings, but these guys and millions like them are doing much better a year into the Obama presidency. In fact it is not an exaggeration to state that the guy in the White House saved, yes saved, the American economy.

Now I know that this is a country of two parties and two points of view, so these Obama Know Nothings have every right to hold contrary opinions and make fun of the President; its a long-standing American tradition. But all this Obama bashing really doesn’t make sense when the economy clearly is on the mend. The only answer is that these guys spend way to much time surfing conservative websites and listening to Fox, where you would think the sky is indeed falling and that sometime, somewhere, somehow Obama will pick their pockets and form an alliance with Communist Cuba.

Politics is a rough business and rarely do presidents keep their ratings high- there is always something to complain about. Still, this fear and loathing about Obama just doesn’t make sense; that is unless you bring race into the picture.