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Latin America and the Caribbean

Mexico

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Former Ambassador Says Mexico Provoked Cuba to Appease Bush White House

In response to Wednesday’s announcement that the United States would work to restore full diplomatic relations with Cuba, Mexico’s former ambassador to Cuba revealed that his country had pursued a strategy of provoking the Cuban government in order to gain favor with the Bush administration. Ricardo Pascoe, who served as Ambassador from 2000-2002, says that Mexican President Vicente Fox and Foreign Minister Jorge G. Castañeda worked to appease the White House by damaging Mexico’s ties with Cuba, while he fought to maintain the bilateral relationship. Pascoe says his position is now vindicated since Mexico, a natural interlocutor between the U.S. and Cuba, which could have played a large role in the two country’s negotiations, lost out to Canada as host for secret bilateral talks.

“Mexico was in the worst position of all: completely left out,” said Pascoe, also exclaiming: “They didn’t choose Mexican territory for the talks (as would have been natural in other times). But with Fox and Castañeda we lost our historic standing with the island!”

Pascoe explained that the bilateral relationship between Mexico and Cuba could not be repaired under the governments of Felipe Calderón and current President Enrique Peña Nieto. For Pascoe, this not only demonstrates the failure of Mexico’s foreign policy toward Cuba, but more generally the country’s foreign policy toward Latin America.

CEPR and / December 19, 2014

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If You Can Find a Way to Show Middle Income Families Are Gaining, the Washington Post Will Give You Lots of Coverage

While the Washington Post might generally be sympathetic to the idea of giving a few bread crumbs to the hungry and having shelters for the homeless, it hates the idea that middle class people should be able to enjoy a decent standard of living and share in the gains of economic growth. This explains its never ending quest to cut Social Security and Medicare along with the pensions of public sector workers. This stems from a basic philosophical principle that a dollar that is in the pocket of a middle class person is a dollar that could be in the pocket of the rich.

In keeping with this theme the Post decided to highlight a new paper by Steve Rose. (Note: Steve is a friend and a decent person, who just happens to be wrong.) Steve's paper shows that middle income families made substantial gains in income over the last 40 years, contrary to what so many of us have been saying. To get this result, Steve includes the value of government benefits, like Social Security and Medicare, at the price the government pays. He also ignores the sharp rise in the number of workers per family and uses a different price deflator than is generally used. 

Dean Baker / December 18, 2014

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Schumer Should Focus on Keeping Government from Redistributing Income Upward

There is a bizarre cult in Washington policy circles that likes to say that the markets are causing inequality, but the government can reverse the problem. E.J. Dionne treated up to an example of this cult, declaring that New York Senator Charles Schumer is a main ally. The basic story is that technology and trade have displaced large numbers of middle class workers, and thereby redistributed income upward, but government can redress this problem.

Every part of this story is wrong. Let' start with technology. Yes, computers are wonderful. Robots will displace workers. But let me tell folks a little secret. Technology has been displacing workers (i.e. costing jobs) for decades, in fact centuries. This is not new. This is not new. (I repeated that in case any pundit types are reading.) The question is the rate at which workers are being displaced. And here the news is the opposite of what we are being told. Technology is actually having less effect in recent years than in prior years because productivity growth has slowed as shown in this beautiful graph from the good people at the Bureau of Labor Statistics.

Productivity Growth (year over year change)

productivity

                                            Source: Bureau of Labor Statistics.

Productivity growth has averaged less than 1.5 percent over the last decade. This compares to more than 2.7 percent in the quarter century from 1947 to 1973. Yes, we all know stories about robots or computers making this or that job obsolete. The point is that if we bothered to look we would know many more such stories about jobs in the 1940, 1950s, and 1960s. The fact that we may not is simply a result of ignorance or laziness. And our ignorance cannot change what is true in the world.

In short, we do not have a technology story, how about a trade story? Yep, we can find low paid manufacturing workers in places like Mexico, Vietnam, and China who are costing jobs for steel workers and auto workers in the United States. The problem is that if you think this is just a natural process, then you have not been doing much thinking.

Dean Baker / December 18, 2014

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CEPR's Greatest Hits, Volume Two

CEPR turned 15 this year! Fifteen years of speaking the economic truth to power. To celebrate, we’ve compiled a list of some of our top accomplishments over the past 15 years - accomplishments that we couldn’t have achieved without your help. Here are just a few: 

CEPR and / December 17, 2014

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The Fed, Interest Rates, and High School Fashion

There is growing pressure on the Fed to abandon its zero interest rate policy. The big question is why?

Just to remind people, the reason the Fed typically raises interest rates is to slow the economy to prevent problems with inflation. Higher interest rates will discourage people from buying cars and houses. Higher interest rates will discourage businesses from investing and state and local governments from borrowing for infrastructure and other needs. Through these and other channels, higher interest rates will reduce demand and slow growth. This will mean fewer jobs. That is turn means less upward pressure on wages, which will reduce inflationary pressures in the economy.

CEPR / December 16, 2014

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UN Troops Use Live Ammunition on Haitian Protesters, Pledge Investigation

“The freedom to demonstrate and freedom of expression are rights guaranteed by international conventions, enshrined in the Haitian constitution and supported by the law,” Sandra Honoré, the head of the United Nations Stabilization Mission in Haiti (MINUSTAH), said last month following a week of protests across the country, which resulted in a number of reported deaths. Honoré added that the Haitian government must ensure that “offenders are prosecuted.” But Honoré may have an opportunity to lead by example after videos from Haitian media surfaced over the weekend showing a U.N. soldier firing a handgun in the direction of protesters. The video shows him discharge his weapon multiple times, then aggressively try to prevent a cameraman from filming him.

In a statement today, Amnesty International condemns this episode as well as injuries suffered the day before by protesters allegedly at the hands of the Haitian National Police. Protests calling for the resignation of both the president and prime minister have been occurring nationwide over the last month in response to the government’s failure to hold elections?—?now more than three years overdue. In an attempt to quell the unrest, Haitian Prime Minister Laurent Lamothe resigned Saturday night, after President Martelly signaled Friday that he would accept the recommendations of a presidential advisory committee, which had called for Lamothe’s ouster. U.S. State Department officials Thomas Shannon and Tom Adams were in Haiti last week, apparently helping pave the way for the resignation.

“The political climate in Haiti is getting tenser and tenser. It is imperative that the Haitian National Police and the MINUSTAH are able to cope with the situation in a way that ensure protection of human rights. People must be allowed to exercise their right to freedom of expression and peaceful assembly, without fear of being shot at,” said Chiara Liguori, Caribbean researcher at Amnesty International.

Jake Johnston / December 15, 2014