What We’re Writing, What We’re Reading

What We’re Writing

Bofeng Cai, Xin Bo, Lixiao Zhang, James K. Boyce, Yanshen Zhang, Yu Leif, Gearing carbon trading towards environmental co-benefits in China

Martin Khor, A toast to the right to development

Sunita Narain, Redefining gender issues and conservation

Matias Vernengo, On the Recent Productivity Slowdown (at the Rick Smith Show) (audio)

Tim Wise, Rules, Rights, and Resistance: The Battle Over TPP and TTIP – Session 3: Health and Food (video)

What We’re Reading

Stop Austeridad, Ending austerity policies to open a new time in Europe

Prabhat Patnaik, The Phenomenon of Negative Interest Rates

Robert Pollin, The Green Growth Plan to Climate Stabilization

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Enforcement of Puerto Rico’s Colonial Debt Pushes Out Young Workers

“Compromise” protects vulture funds, not Puerto Rico

José A. Laguarta Ramírez

At least 23 of the 49 people killed in the mass shooting that took place at Pulse nightclub in Orlando on June 12 were born in Puerto Rico. While the horrendous hate crime targeted LGBT people of all ethnicities, the large proportion of island-born casualties is not surprising, as the central Florida city has become a preferred destination of Puerto Rican migrants over the past two decades. Steadily growing since the onset of the island’s current “fiscal” crisis in 2006, yearly out-migration from Puerto Rico now surpasses that of the 1950s. The island’s total population has begun to decline for the first time in its history.

Nearly a third of the island-born victims of the Orlando massacre were 25 or younger, most of them students employed in services or retail. This is the population group that will be hit hardest when the ironically named Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA) comes into effect. Among its other “promises” for working-class Puerto Ricans, PROMESA will cut the minimum wage in Puerto Rico for those under 25, from the current federally mandated $7.25 to $4.25 per hour, and scale back the federal nutritional assistance program on the island. Purportedly aimed at “job-creation,” these measures will likely intensify the outflow of able-bodied “low-skilled” workers. Ongoing out-migration has already decimated the number of available healthcare and other professionals on the island. Puerto Rico’s 2013 median household income of $19,183 was barely half that of Mississippi, the poorest U.S. state (at $37,479), despite a cost of living that rivals that of most major cities in the United States. Inequality on the island is also greater than in any of the states.

The U.S. House of Representatives approved PROMESA on the evening of June 9, following a strong endorsement by President Barack Obama. The bill, which would also impose an unelected and unaccountable federal oversight board and allow court-supervised restructuring of part of the island’s $73 billion debt, now awaits consideration by the Senate. Its advocates hope the president can sign PROMESA into law before July 1, when $1.9 billion’s worth of Puerto Rico general obligation bonds will come due. Unlike those issued by public utility corporations and certain autonomous agencies, general obligation bonds, under Puerto Rico’s colonial constitution, must be repaid before any further public spending for the following fiscal year is authorized. Puerto Rico’s government has partially defaulted three times within the past year, but not on general obligation bonds. Puerto Rico is not the only place, under the global regime of austerity capitalism to face predatory creditors and the imposition of unelected rulers —as illustrated by cases like Argentina, Greece, and post-industrial U.S. cities such as Flint, Mich.— but its century-old colonial status has made it particularly vulnerable and defenseless.

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The Global “New Normal” Is Not New– But it is still a real concern


C.P. Chandrasekhar and Jayati Ghosh

Many different explanations have been proffered for the “new normal” of “secular stagnation” in the global economy ever since the Great Recession. This is supposed to be exemplified by low growth, verging on stagnation, in the advanced economies, now combined with slower growth in the developing world.

Certainly the recovery from the Great Recession of 2008-09 has been anaemic at best, even as it has failed to generate much employment outside of the US (and even there it has created mostly casual, part-time and poor quality jobs). Deflation has persisted in Japan for many years now, and has become evident in the Eurozone and the US as well. Financial markets are febrile and display nervously erratic behaviour, often without proximate cause – such as in the recent collapse in bond yields across the advanced economies.

But purely in terms of GDP growth, are the last five years really so very different from past patterns of global capitalism, even compared to the supposedly more dynamic period of globalisation? Chart 1 tracks annual GDP growth in developed and developing/transition economies from 1990. The period from 2002 to 2007 does show acceleration of growth across economies, but that came to end in the collapse of 2008-09, and since then GDP growth rates have been similar to those of the 1990s.

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Facing Up to the World’s Health Crises

Martin Khor

The global health situation is facing many critical challenges, and urgent action is needed to prevent crises from boiling over. This is the impression one gets from this year’s World Health Assembly (WHA) in Geneva last week.

The WHA is the world’s prime public health event, attended by 3,500 delegates, including Health Ministers from most of the 194 countries.

In her opening speech, World Health Organisation director-general Dr Margaret Chan gave an overview of what went right and what is missing in global health.

First the good news: 19,000 fewer children dying every day, a 44% drop in maternal mortality, the 85% cure rate for tuberculosis, and 15 million people living with HIV now receiving therapy, up from just 690,000 in 2000.

Then Chan described how health has become a globalised problem, with air pollution becoming a transboundary health hazard, and drug-resistant pathogens being spread through travel and food trade.

The recent Ebola and Zika outbreaks showed how global health emergencies can quickly develop. The world is not prepared to cope with the dramatic resurgence of emerging and re-emerging infectious diseases.

Chan said the global health landscape is being shaped by three slow-motion disasters: climate change, antimicrobial resistance and the rise of chronic non-communicable diseases.

She described these as man-made disasters created by policies that place economic interests above health and environmental concerns.

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And Now, Price Deflation in India and China?

C.P. Chandrasekhar and Jayati Ghosh

Ever since the Global Financial Crisis, advanced economies have been grappling with the spectre of deflation. While this was very clearly a reflection of the downswing in economic activity in the aftermath of the crisis, such price deflation has proved remarkably impervious to the most expansionary monetary policies and liquidity expansion that the world economy has yet seen. This has had adverse consequences in terms of producers’ expectations, which in turn have kept investment low. It has not benefited working people because wages have stayed low or continued to fall. And it has generated tendencies of the debt deflation-type that Irving Fisher had warned against, whereby the real value of debt and of debt servicing keep rising because of falling prices, and make it harder for debtors to deleverage or to increase their spending.

All this has been true of the developed economies at the core of global capitalism for some years now. But in general it was presumed the developing countries, especially the more prominent emerging markets, were less prone to such tendencies. Indeed, because the developing world as a whole continues to grow faster than the North, and because some large emerging economies like China and India continue to experience recorded GDP growth rates of 6 to 7 per cent, it was perceived that they would also have inflation rates that would show rising or stable prices. In countries such as India that are still hugely affected by agricultural cycles affecting food prices and other forms of sectoral supply bottlenecks, there seemed to be no reason for prices to fall, beyond the secondary impact of the global fall in prices of primary commodities like oil.

However, it now appears that this too was a misconception about the new economic patterns emerging in the Global South, including in economies like those of China and India. Recent trends show a remarkable – and worrying – convergence of producer prices in these countries with those in the advanced economies, where price deflation has become rampant.

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What We’re Writing, What We’re Reading

What We’re Writing

C.P Chandrasekhar, No Clue to the Furture

Martin Khor, Facing Up to the World’s Health Crises

Sunita Narain, Garbage is About Recycling

Léonce Ndikumana and Mare Sarr, Capital Flight and Foreign Direct Investment in Africa

What We’re Reading

Pablo Bortz, A Novel Capital Controls Proposal

Arthur MacEwan, Do Trade Agreements Foreclose Progressive Policy?

Robert Pollin, The Green Growth Path to Climate Stabilization

Argeo Quiñones-Pérez and Ian Seda-Irizarry, Politics, Primaries, and Crisis in Puerto Rico

Triple Crisis welcomes your comments. Please share your thoughts below.

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The Trans-Pacific Shell Game

Jomo Kwame Sundaram

The Trans-Pacific Partnership (TPP) trade agreement is being portrayed as a boon for all 12 of the countries involved. But opposition to the agreement may be the only issue that the remaining US presidential candidates can agree on, and Canada’s trade minister has expressed serious reservations about it. Are the TPP’s critics being unreasonable?

In a word, no. To be sure, the TPP might help the US to advance its goal of containing China’s influence in the Asia-Pacific region, exemplified in US President Barack Obama’s declaration that, “With TPP, China does not set the rules in that region; we do.” But the economic case is not nearly as strong. In fact, though the TPP will bring some benefits, they will mainly accrue to large corporations and come at the expense of ordinary citizens.

In terms of gains, one US government study on the topic projected that, by 2025, the TPP would augment its member countries’ GDP growth by a meager 0.1% at most. More recently, the US International Trade Commission (ITC) estimated that, by 2032, the TPP would increase America’s economic growth by 0.15% ($42.7 billion) and boost incomes by 0.23% ($57.3 billion).

But TPP advocates have largely ignored these results, preferring to cite two studies by the Peterson Institute of International Economics, a well-known cheerleader for economic globalization. In 2012, the PIIE claimed that the TPP would boost total GDP in member countries by 0.4% after ten years. In January, it declared that TPP would augment total GDP by 0.5% over the next 15 years. In a World Bank study released the same month, the authors of the PIIE research projected a 1.1% average increase in GDP in TPP member countries by 2030.

Something is clearly amiss.

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Societal Involution in the North

Jayati Ghosh

The term “involution” – which means to turn into oneself, or to shrink, or to reverse a process of evolving – may seem like a strange one to apply to societies. Yet that is the term that increasingly comes to mind when considering recent social and political trends in the United States and in some parts of Europe.

Consider the United Kingdom, currently in the throes of a heated debate before the referendum that will be held about whether or not Britain should stay in the European Union. Many issues and concerns have been raised on both sides, and politicians and business leaders inside and outside the country, from top financiers to US President Obama, have pitched in with their own views and warnings about the implications of “Brexit”. But within the country, public discussion appears to be focussed essentially on only one issue: immigration.

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