Matias Vernengo

The World in 2013 by The Economist has been out for a while. Got it at the airport this weekend and read a few pieces. Really bad. Nothing new. One piece caught my attention though. On the fiscal cliff and the elections this terrible article says:

“Mr Obama will maintain that his victory, along with continued Democratic control of the Senate, constitute a mandate for his version of deficit reduction. But in fact the elections produced mixed results: Mr Obama narrowly won the popular vote and the Republicans retained their majority in the House of Representatives.”

First, facts; yes the GOP won the House, but Democratic House candidates won more of the popular vote than their Republican counterparts. Redistricting or Gerrymandering is what explains this failure of democracy. Dems probably need more than 55% of the popular vote to win the majority in the House.

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James Crotty, Guest Blogger

That the Republican Party undertook a vigorous campaign in the recent election to suppress voting in those states and localities in which it had effective control of government is widely understood. Pictures of long lines at polling places and reports of long hours waiting to vote in neighborhoods largely populated by African American and Hispanic voters provide clear evidence of this. But to be fully effective, the democratic process must not only make it easy to vote, it must also make it easy for voters to be well-informed about the effects of the policy positions taken by contestants for office and by the Parties they represent.

The Republican Party has been waging a war against both foundations of the democratic process. Along with voter suppression, it has been constructing the infrastructure required to support oligarchy – control of the political process by large corporations and wealthy individuals. The movement toward oligarchy is evidenced by the recent Citizen’s United ruling by our ultra-conservative Supreme Court that allows corporations and the rich to spend without limit to influence elections.

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Matías Vernengo

Today, the United States will choose between a moderate Republican, with a pro-business agenda, or Mitt Romney. Yes President Obama has saved the economy from a 1930s-like catastrophe with a smaller than necessary, but still very effective, fiscal package, and monetary easing has prevented a collapse of the banking and financial sector like the Great Depression one. Yet, his economic views and policies remain to the right of Richard Nixon. Obama agreed with Mr. Romney that government does not create jobs, and has accepted the anti-Keynesian rhetoric regarding the need of reducing the fiscal deficit, even though the recovery has been very slow.

If Obama wins (and I do believe that Nate Silver is right and his chances are greater than Romney’s) we should not simply expect a continuation of the current policies. Yes, Ben Bernanke will maintain interest rates close to zero in nominal terms and continue the gradual Quantitative Easing which, precluding a collapse of the euro and the flight to dollar denominated bonds, will lead to a more depreciated dollar. But the US cannot expect to grow through exports, particularly to developing countries like China (China bashing was one the silliest and most disingenuous issues raised during the campaign).

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Kevin Gallagher

During the last presidential debate, Mitt Romney put the spotlight on an aspect of his five-point economic plan that has received little scrutiny.  Romney said forging trade deals with Latin American nations would be a cornerstone of his plan to revitalize the U.S. economy. “The opportunities for us in Latin America we have just not taken advantage of fully. As a matter of fact, Latin America’s economy is almost as big as the economy of China,” he said.

Like the other parts of the plan, Romney’s Latin American trade plan is short on details. There are two details that should make Americans think twice about whether more trade deals with Latin America can lead to prosperity.  First, the U.S. already has trade deals with most of the major Latin American countries. Second, the outstanding countries, most notably Brazil, would likely not negotiate a trade deal on Romney’s terms.

If any U.S. president wants to significantly increase trade with Latin America, he will have to change the template for U.S. trade deals so that they can truly make the U.S. and its trading partners better off.  Time is running out.  China has quickly become the largest trading partner for many South American nations and Chinese trade deals are much more amenable to Latin Americans.

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Jeff Madrick

Lo and behold, Mitt Romney says he will now support parts of the Affordable Care Act, which the Republicans disdainfully call Obamacare. The Financial Times called it a u-turn. My prediction is that the word Obamacare will conjure up the same positive connotations as Medicare now does.

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