It’s standard practice in public discussions to refer to the United States as being the richest country in the world. Even though this is repeated all the time, it’s worth asking if it is true.

In terms of having the largest economy in the world, it is no longer true. If we measure the size of economies by assigning the same price to all goods and services they produce (purchasing power parity GDP), China passed the United States last year. Of course China has more than four times the population as the United States, so on a per capita basis it is still much poorer.

Last Friday the Bureau of Labor Statistics (BLS) released its “Employment Situation Summary” for the month of January. The Bureau’s data show that both employment and unemployment increased last month; seasonally adjusted employment increased from 147.4 million workers in December to 148.2 million in January, while unemployment increased from 8.7 million workers to 9.0 million. Because of the uptick in the number of unemployed workers, the unemployment rate rose 0.1 percentage points to 5.7 percent. 

But as I wrote last month, the unemployment rate is an imperfect measure of labor market health. My own preferred measure, as I explained in January, is the employment-to-population ratio (EPOP) of the working-age population, consisting of Americans aged 25 to 54.

Speaking at a press conference on Tuesday, members of the CEP put forth their proposal for an electoral calendar leading up to presidential elections by the end of 2015. CEP president Pierre Louis Opont said they were considering holding legislative elections, including 20 of 30 Senate seats and the entire 99-member Chamber of Deputies, in July. The second round of the legislative elections would be held alongside Presidential elections on October 25, 2015 with the second round of the presidential race and local elections taking place sometime in January.

In a press release on February 9, the CEP said they had circulated a draft electoral decree to political parties for comment and would send it on to the executive by Friday, February 13 to be officially published (Laurette Backer posted a version of the draft electoral decree here).  Political parties, civil society and other stakeholders were given until 4 PM Wednesday to submit their comments to the CEP, however many political groupings have stated they were not consulted prior to the CEP’s announcement.  

Announcement Gets Mixed Reaction from Political Parties 

The Fusion political party, which supports the government, denounced the CEP’s announcement. “I think the CEP was misguided to take such a decision without consultation. It’s a clumsy move, which could plunge the country into more difficulties,” a Fusion representative told Alterpresse. Fusion stated they had sent a letter to the government about their concerns with the CEP’s actions and reiterated their proposal of holding a single election in 2015 for all positions. Rosemand Pradel of Fusion told Le Nouvelliste that “Political parties are important actors in the electoral process, the CEP cannot define an electoral calendar on its own.”

Sauveur Pierre-Etienne, coordinator of OPL, stated that the CEP had yet to make contact with political parties and that he saw “shenanigans” in the announcement from the CEP. “The proposed electoral calendar is completely absurd,” Pierre-Etienne told Le Nouvelliste, “How do you organize elections spread out over a six-month period?“ According to Le Nouvelliste, he suggested that this could be a strategy aimed at “ruining” the opposition defined by the CEP and those in power.

John Henry Ceant of Renmen Ayiti pointed to the political agreement signed January 11 at the Kinam hotel, which stated that the CEP would find consensus between the presidency and political parties around the formation of the electoral law and timetable. “The CEP has put the cart before the horse,” Ceant told Le Nouvelliste.

Responses were relatively muted from opposition groups. MOPOD coordinator Jean André Victor told Alterpresse, “No, we have not yet considered the issue. We remain, for the moment [focused on] demonstrations supporting the departure of Michel Martelly from power.” Fanmi Lavalas, which was prevented from participating in the previous election, said in a statement to Alterpresse that the executive committee was “studying the situation.” In comments to Le Nouvelliste, Dr. Maryse Narcisse of Fanmi Lavalas said the organization had yet to receive the draft electoral decree that the CEP said was sent to political parties last week. No political party can handle “the social and material costs of several elections in one year,” she added.  

Role of International Community

In January, President Martelly called for legislative elections to be held by May, according to Haiti Libre, noting that, “According to some experts…we should wait at least 5-6 months to have the elections, which brings us to July-August. When we think to two rounds, each time, we must wait for the results, challenges, that brings us to October. So I feel that at this point, those proposing elections in six months are talking about one turn.” Among those that have advocated for legislative elections in July is U.S. Ambassador Pamela White, who reportedly relayed this preference to some of the remaining 10 Senators still in office at a meeting last week. In private meetings in Washington D.C., U.S. officials have continually stated a preference for one single election to take place in 2015, given the problems with logistics and funding.

Wow, this stuff just keeps getting worse. Apparently anything goes when the big corporations want a trade deal. Otherwise serious people will just make stuff up, because hey, the big campaign contributors want a trade deal to make themselves richer. The latest effort in creative myth-making comes from Third Way, which tells us that post-NAFTA trade deals aren't job losers like NAFTA.

As Jim Tankersley and Lydia DePillis point out, this implicitly tells us that all those pro-NAFTA types weren't right in telling us that NAFTA would create jobs. (Hey, when did these folks stop telling us things about trade that were not true?)

But getting to the meat of the matter, the line from Third Way is that our trade negotiators have learned from past mistakes. Now, trade agreements include labor and environmental standards and other provisions that ensure they will be job gainers. They show this by comparing U.S. trade deficits in goods with the countries with whom we have signed trade pacts in this century, in the years since the pact with the decade prior to the pact. In their analysis they find that in 13 of the 17 countries the trade deficit was smaller in the years since the pact than in the decade before the pact.

Before anyone becomes convinced that we can now count on new trade deals to reduce our trade deficit, let's pretend that we approached this like serious people. We would want to control for overall trends in the deficit and region-specific trends (e.g. compare the pattern in Chile after the signing of the pact with the pattern with other Latin American countries).

I don't have time to do a full analysis (no one pays us for correcting this dreck), but a very quick look shows how the deck is stacked in favor of getting the Third Way result. Most of the trade deals were signed right as the United States was reaching its peak deficit (2006) or in the years just after.

To see how this stacks the deck, the table below shows average trade deficit (in constant dollars) in the decade prior to the year of the pact and for the years since: [The data is available from Bureau of Economic Analysis, Table 1.1.6; modify the table to to show additional years]

           Prior decade             Years since pact

2006   $530.5 billion             $488.7 billion

2007   $587.3 billion             $456.7 billion

2008   $616.5 billion             $439.5 billion

2009   $618.3 billion             $448.8 billion

2010   $616.4 billion             $446.3 billion

2011   $612.2 billion             $441.9 billion

2012   $599.0 billion             $436.6 billion

2013   $576.8 billion             $452.6 billion

 

In short, this methodology would lead you to find smaller trade deficits in the years following an agreement even if the U.S. trade balance with these countries worsened compared to other countries. This ain't serious stuff, but like they say, when pushing trade deals, truth doesn't matter.         

Eileen AppelbaumThe Hill, February 12, 2015

Dean Baker
Cato Unbound, February 11, 2015

Nicole Woo
The Hill, February 10, 2015

Dean Baker, Arjun Jayadev, and Joseph E. Stiglitz
Project Syndicate, February 10, 2015

In December of 2007, the unemployment rate rose above 5 percent for the first time in over two years. That same month, the economy entered its longest recession since the Great Depression.

By the official end of the recession in June 2009, unemployment had risen to 9.5 percent. The rate peaked at 10.0 percent in October of that year before finally beginning to come back down.

February 2015, John Schmitt

Dean Baker
Truthout, February 9, 2015

Yes, it's Monday morning at the Washington Post and Robert Samuelson wants to raise the retirement age and cut Social Security and Medicare benefits. How else would one begin the week?

He apparently thinks he is being clever by claiming that because the government is meeting these obligations to its seniors, it is failing elsewhere. Somehow, it doesn't occur to Samuelson that if we want to get extra money for other areas of government spending we could

1) raise taxes,

2) cut government payments for doctors, drug companies, and medical equipment suppliers in Medicare, Medicaid, and other government programs;

3) shoot for lower unemployment rates by not having the Fed choke off the recovery with higher interest rates;

4) default on the national debt.

 

The first point is straightforward. We have raised taxes many times in the past. If this were 1970 and we projected forward budgets for a decade with no increases in Medicare or Social Security taxes, the budget would have shown very large deficits. The same would have been true in 1980. This is what we are doing now. This is not to say that a tax increase would be politically easy, but cutting Social Security and Medicare are not exactly politically easy either. Apparently Samuelson is prepared to go after seniors, but not wealthy people who presumably would disproportionately bear the brunt of any tax increase.

The second point is straightforward also. We pay close to twice as much per person for our health care as people in other wealthy countries. This is not because we get better health care, but because our drug companies, medical equipment suppliers, and physicians get twice as much money as their counterparts in other wealthy countries. We could take steps to bring our costs into line, such as medical trade, but again Samuelson would rather hit seniors than these high income folks.

The third point is hugely important and under-appreciated. We got budget surpluses at the end of the 1990s not because of budget cuts and increased taxes; we got budget surpluses because the Fed allowed the economy to grow more and the unemployment rate to fall far lower than was thought possible by most economists.