Despite scepticism about its sustainability, attention is focused on evidence that the crisis of 2008-09 is behind us, because of the fiscal stimulus put in place by governments across the world. But figures from the International Labour Organization (ILO) indicate that the impact of the stimulus on employment is uneven. In its January 2010 update, the ILO estimates global unemployment at 212 million in 2009, or around 34 million above its 2007 level, with most of the increase having occurred during 2009. In sum, the impact of the fiscal stimuli delivered by many governments does not seem to be, as yet, adequate to stall, let alone reverse the employment decline resulting from the crisis. This increase in unemployment was unevenly distributed, with Developed Economies and the European Union, Central and South-Eastern Europe and former Soviet states, and Latin America and the Caribbean accounting for more than two-thirds of the increase in the number of unemployed during 2009. In other words, Asia and the Pacific were much less affected.
Employment in the “Recovery”
Despite scepticism about its sustainability, attention is focused on evidence that the crisis of 2008-09 is behind us, because of the fiscal stimulus put in place by governments across the world. But figures from the International Labour Organization (ILO) indicate that the impact of the stimulus on employment is uneven. In its January 2010 update, the ILO estimates global unemployment at 212 million in 2009, or around 34 million above its 2007 level, with most of the increase having occurred during 2009. In sum, the impact of the fiscal stimuli delivered by many governments does not seem to be, as yet, adequate to stall, let alone reverse the employment decline resulting from the crisis. This increase in unemployment was unevenly distributed, with Developed Economies and the European Union, Central and South-Eastern Europe and former Soviet states, and Latin America and the Caribbean accounting for more than two-thirds of the increase in the number of unemployed during 2009. In other words, Asia and the Pacific were much less affected.
The Greek Present
The Brazilian expression “Greek Present” (Presente de Grego) means unwelcome gift, an obvious reference to the infamous Trojan Horse. The current crisis in Greece might show that the euro was just one of those presents. If the European Union (EU) does not provide sufficient resources to preclude not just a default, but also and more importantly a profound recession, then the advantages of the euro for Greece and other countries in the periphery of Europe should be seriously questioned.
The Greek financial crisis is an exemplar case of the perils of macroeconomic orthodoxy, and of the exceedingly narrow measure of the changes that have taken place since the global financial crisis started. The same conventional ideas about fiscal adjustment are repeated, no matter that their record in the past has been dismal. The price tag of learning, once again, about the limitations of conventional wisdom is the staggering human suffering, in this case of the people in Greece, that European authorities are demanding.
Volcker Rule May Not Be the Right Rule
President Obama’s decision to support what is now called the “Volcker rule” has opened up a Pandora’s box of difficult issues—and may yet force policymakers to face some hard truths. It is unlikely the president fully understood that this would happen. What’s less likely is that some on his economics team didn’t understand. Increasingly, there is a sense that the combination of the old Clinton guard, most of them deeply linked at one time or other to the banking community and the deregulation movement itself, and a somewhat conservative University of Chicago group of Washington newcomers, led by Austan Goolsbee and Cass Sunstein, are not providing the president a full plate of options or adequate analyses of those he does get.
Support for a Financial Transaction Tax
A number of the TripleCrisis contributors have joined an international coalition calling for the institution of an international financial transaction tax. The proposed tax, dubbed the “Robin Hood Tax,” would levy a small charge on trades in financial assets in order to potentially reduce speculation in financial markets, and generate significant revenue that could be invested in public projects or deficit reduction.
Read the economists letter backing the tax.
Read more about the proposed Robin Hood Tax.
Or watch the video:
Climate in Crisis, and Crisis in Climate Talks
One of the three crises covered in this blog is the ecological crisis. And in this sphere, climate change has emerged as perhaps the most serious of the ecological issues, because of its systemic threat to the global environment and to the survival of humanity itself.
The seriousness of the climate crisis has been accepted worldwide in recent years. There are the skeptics and the industries who are fighting this acceptance, and they have recently given some serious blows to the credibility of some climate scientists and the way climate science is conducted. But despite Climate-Gate and the uncovering of some Intergovernmental Panel on Climate Change (IPCC) errors, such as the melting of Himalayan glaciers, much of climate science remains intact.
What Caused the Financial Crisis?
In this post I will concentrate on the consequences of the application of the neoliberal economic philosophy to the economies of low-income countries, i.e. those that are in the early stages of development and industrialization. The crisis is not over, as it is a systemic one; it will be repeated more frequently in the future unless the system, and the theory behind it, is modified. The recent crisis is to be a wake-up call for poor countries, in order to change their development strategies, based on neoliberal thinking and “Washington consensus” ideology imposed on them. In this and my next post, after clarifying a couple of concepts, reference will be made to the origin and the root causes of the systemic crisis, and the context in which the recent crisis emerged. A third post will be devoted to the events in the recent crisis. In the last part, I will make a few proposals as remedial measures.
Carbon Caps: Who gets the cash?
Any policy that limits supply of fossil fuels must raise their price. An inexorable economic logic binds price to scarcity, regardless of whether scarcity arises from OPEC-engineered production limits, climate policies to cap carbon emissions, or other initiatives that keep fossil fuels in the ground.
The key question is who gets the money? As governments move to cap carbon emissions, attention is turning to this hundred-billion-dollar question. In video interviews on the Real News Network, economist James K. Boyce outlines three possibilities:
Aiding Haiti: Let's get it right this time
Before I joined the Global Development and Environment Institute in 1999, I was the executive director at Grassroots International, a Boston-based aid organization. With a focus on structural change and empowerment, Grassroots started an emergency program in Haiti after the first ouster of President Jean Bertrand Aristide in 1991. Later, we watched up close as the large US-funded aid effort, after Aristide’s return in 1994, undermined Haitian government priorities, undercut food production, and weakened civil society institutions. The aid empowered foreign aid agencies and multinationals rather than Haiti’s people. We documented the aid disaster with a report: “Feeding Dependency, Starving Democracy.”
Aiding Haiti: Let’s get it right this time
Before I joined the Global Development and Environment Institute in 1999, I was the executive director at Grassroots International, a Boston-based aid organization. With a focus on structural change and empowerment, Grassroots started an emergency program in Haiti after the first ouster of President Jean Bertrand Aristide in 1991. Later, we watched up close as the large US-funded aid effort, after Aristide’s return in 1994, undermined Haitian government priorities, undercut food production, and weakened civil society institutions. The aid empowered foreign aid agencies and multinationals rather than Haiti’s people. We documented the aid disaster with a report: “Feeding Dependency, Starving Democracy.”