Watch Your Health and Your Pocketbook: A Bi-partisan Scheme for Regulatory Deform

Gerald Epstein

Right wing politicians in the U.S. have gotten very good at channeling George Orwell: As the world economy teeters on the brink of another economic catastrophe whose precipitating cause was a twenty year project to de-regulate finance in the U.S. and abroad, they insist that the cause of our woes is “job killing” regulations. Never mind that, according to the World Bank, the U.S. ranks 5th in the world in terms of ease of doing business in relation to regulations, and that over the past 5 years, doing business in the U.S. overall has become easier, not harder. The same report shows that in the OECD the ease of doing business has stayed the same or improved since 2006. Yet in the OECD countries 50% more people were unemployed in 2010 than in 2007.

But repeat the “job killing regulation” mantra often enough – and have the echo chamber of the media spread it around relentlessly – and it begins to sink in. All of this serves to soften up the citizenry to accept the corporate goals of killing as many undesirable regulations and to prevent as many new ones. (Of course, they will continue to push for the regulations they like with gusto).

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Prepare now for a new global downturn

Martin Khor

The last two weeks have seen a clear downward shift in expectations on the global economy.  The dominant view now is that the world has slipped into stagnation that may well become a recession.

Warnings that the economy had entered a “danger zone” generated the gloomy mood at the annual Washington gathering of the International Monetary Fund and World Bank, as well as the G20 finance ministers’ meeting.

Prominent economists are predicting the new crisis will be more serious and prolonged than the 2008-9 Great Recession.

If the United States and its sub-prime mortgage mess was the immediate cause of the last recession, the epicentre this time is the European debt crisis.  The eurozone’s GNP grew by only 0.2% in the second quarter, and the European Commission predicts the rates will be 0.2% and 0.1% in the third and fourth quarters.

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Triple Crisis bloggers launch Econ4: Economics for people, the planet and the future

Triple Crisis bloggers James Boyce and Gerald Epstein recently launched an exciting new initiative called Econ4: economics for people, the planet and the future. Econ4 is an online platform that disseminates innovative thinking in economics through original films and articles. Econ4’s aim is to break the stranglehold of corporate media and ideological orthodoxy in the teaching of economics and public conceptions of how the economy works and should work. Learn more at the Econ4 website.

Trading Away Development: The US-Colombia Free Trade Agreement

Kevin P. Gallagher

Since the early 1990s Latin American nations have been signing trade treaties with the United States that have brought small gains and high costs. Pending deals between the United States and Colombia and the United States and Panama are no different. Each is based on the same template that has been the cornerstone of US trade policy since the North American Free Trade Agreement (NAFTA).

In a new paper I review estimates of the gains from trade from numerous Latin American-US free trade agreements (FTAs) from the 1990s to the present, and juxtapose such gains with the fiscal and regulatory costs associated with those treaties. The analysis shows that Latin American nations are signing deals where the net benefits are ambiguous at best. Indeed, estimates show that the US-Colombia trade treaty pending in the US Congress would yield negative net welfare benefits for Colombia, cost the Colombian government $633 million in tariff revenue, and force Colombia to deregulate its financial sector, and choke its policies for innovation and productive development.

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