A complaint from Haitian communities and supported by New York University’s Global Justice Clinic and Accountability Counsel has been rejected by the World Bank on technical grounds. The groups had asked for the Bank’s Inspection Panel to review whether assistance the Bank is providing to the Haitian government follows Bank guidelines relating to transparency and environmental safety.

Since 2013, the World Bank has provided technical assistance to the Haitian government in rewriting its mining laws, leading to a new mining law being drafted in 2014. Though Haiti has not seen large-scale commercial mining for decades, the government awarded multiple concessions in 2012 over opposition protests. In 2013, following a forum on mining sponsored by the World Bank, then Prime Minister Laurent Lamothe declared that to advance Haiti’s development, “we are counting heavily on the contribution of the mining sector.”

The Haitian communities’ complaint [PDF] states:

Complainants fear that, due to the government’s weak capacity and the law’s inadequacies, this increased investment in the mining sector will result in serious social and environmental harms, including contamination of vital waterways, impacts on the agriculture sector, and involuntary displacement of communities. Complainants are also concerned about the exclusion of Haitian people from the law reform process, particularly when contrasted with the reported regular participation of the private sector in drafting the new law. Further, Complainants fear that the government of Haiti lacks the capacity to regulate and monitor mining company activity.

In its response, the World Bank’s Inspection Panel says that it “has decided not to register the case.” The Panel acknowledged that the issues raised were “serious and legitimate,” and agreed that the new mining law could “have significant and considerable adverse environmental and social consequences.” However, because the World Bank support was provided through a technical assistance mechanism, “policies and procedures applicable to design, appraisal and implementation of a project, including the safeguard policies, were not applied to the Haiti Mining Dialogue.” The mechanism is not subject to the World Bank’s safeguard policies and therefore the Inspection Panel refused to hear the complaint.

Dean Baker
The Hankyoreh, February 18, 2015

Dean Baker
Al Jazeera America, February 17, 2015

Dean Baker
Truthout, February 16, 2015

A NYT piece on the release of new data showing Japan's economy grew at a 2.2 percent annual rate in the fourth quarter gave an excessively pessimistic view of Japan's economic performance under Prime Minister Shinzo Abe. The article tells readers:

"The economy did not grow at all in 2014, with two quarters of recession almost exactly canceling out two quarters of expansion, according to Monday’s report. Growth in the two years since Mr. Abe began his campaign has added up to a modest 1.6 percent, slightly less than the 1.8 rate recorded in 2012, the year before he took office."

As the article notes, the reason the economy did not grow in 2014 was because of a sharp increase in the sales tax that had been planned before Abe took office. While it says that the resulting downturn was a surprise to economists, this is exactly what standard economics would predict. The sales tax increase was clearly foolish policy (Abe has put off another hike that had been scheduled this year), but the economy clearly would have grown at a healthy pace in the absence of this rate hike.

It is also worth noting that Japan's employment to population ratio (EPOP) rose by 2.2 percentage points from the fourth quarter of 2012, when Abe came to power, to the fourth of 2014. By comparison, the EPOP in the United States has risen by 1.1 percentage point over the same period. News reports have been nearly ecstatic over the rate of job growth in the United States.

That would have an appropriate headline for a NYT article on the fact that many members of Congress may refuse to support fast-track trade authority without some rules on currency. At one point it refers to comments by Bruce Josten, a senior lobbyist at the U.S. Chamber of Commerce and supporter of fast-track, who argued that the administration could not effectively write rule on currency values:

"Would the Federal Reserve’s program of 'quantitative easing' — basically printing money to keep interest rates low — be an actionable offense under a strict currency regime? What about large government spending programs financed by international borrowing?"

It is difficult to believe that anyone involved in these negotiations would have difficulty distinguishing between policies explicitly focused on boosting the U.S. economy and policies that have the explicit purpose of lowering the value of the dollar. (If Mr. Josten is confused, quantitative easing is when the Fed buys U.S. government bonds. If the main purpose was to lower the value of the dollar the Fed would be buying the bonds of other countries.)

Fred Bergsten and Joe Gagnon, two prominent economist at the very pro-trade Peterson Institute for Economics have developed guidelines for defining currency manipulation that negotiators should be able to learn from if they are confused on the topic. As a practical matter, defining currency manipulation is almost certainly much simpler than many other topics covered in the Trans-Pacific Partnership (TPP), like defining "bio-similar" drugs so that patent protections can be extended to them or defining the types of regulatory takings that could be actionable under the investor-state dispute resolution tribunals established by the pact. (For example, can a company claim damages for a higher minimum wage?)

There are several other errors in the article. At one point it tells readers:

As regular readers know, the Washington Post editorial board has problems with economics. They were foremost among the Very Serious People who warned about financial crises and soaring interest rates if we didn't tame the deficit. They still regularly issue demands for what they consider fiscally responsible policies (e.g. cutting Social Security and Medicare).

Anyhow, today they used their lead editorial to wag their finger at supporters of the Affordable Care Act (ACA) for not acknowledging that it would lead many employers to cut workers' hours. The issue is a provision in the law (which has yet to be applied) that would require large employers to provide insurance for workers who work more than 30 hours per week or to face a fine.

The editorial noted a directive from Staples to its store managers to restrict part-time workers to less than 25 hours as evidence of this ACA effect. The piece then cited work by Ben Casselmen to support its "Iron Law No 1: Incentives influence behavior":

"In 2009, 9.7 percent of part-timers worked between 25 hours and 29 hours and 7.7 percent worked between 31 and 34 hours. In about mid-2013, just before the employer mandate’s original implementation date, the gap between those numbers began to widen, hitting 11.1 percent and 6.6 percent, respectively, by year’s end."

Are you impressed by that iron? Let's add some more details.

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.