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Article Artículo

David Brooks' Primitive Defense of the Rich

David Brooks is sweating hard trying to defend the one percent against the rest of the country and reality. His column today desperately warns readers:

"Some on the left have always tried to introduce a more class-conscious style of politics. These efforts never pan out. America has always done better, liberals have always done better, when we are all focused on opportunity and mobility, not inequality, on individual and family aspiration, not class-consciousness."

Funny, I thought Social Security, the Fair Labor Standards Act (i.e. the 40-hour workweek), the National Labor Relations Board, and other products of the New Deal were pretty big accomplishments. Much of this was done quite explicitly with a sense of class consciousness. These were all measures that were backed by mass movements that sought to ensure that working people got their share of the economic pie. Good thing we have David Brooks to tell us the opposite.

This is far from the only place where Brooks seems to be at odds with reality. Brooks condemns focusing on inequality because it leads to ineffective policies like raising the minimum wage. He then cites a study by Joseph J. Sabia and Richard V. Burkhauser telling readers:

"Consistent with some other studies, they find no evidence that such raises had any effect on the poverty rates.

"That’s because raises in the minimum wage are not targeted at the right people."

Actually the Sabia and Burkhauser study goes against the overwhelming majority of other studies on the topic as summarized in this analysis by University of Massachusetts professor Arin Dube.

Dean Baker / January 17, 2014

Article Artículo

Latin America and the Caribbean

US Congressional Appropriations Bill Would Impose New Restrictions on Honduras Support

The new budget appropriations bill passed by the U.S. House of Representatives yesterday, and set to be taken up by the Senate in the coming days, includes several passages that are relevant for Honduras, including stronger restrictions on U.S. assistance for the police and military. It also includes language opposing involvement by international financial institutions like the World Bank and IADB in the financing of large dam projects, such as those planned in Rio Blanco, and other language that could help victims of the May 2012 DEA operation in Ahuas -- that resulted in four villagers killed and several others injured -- finally receive compensation.

Under the "Honduras" section, the bill [PDF] reads:

  1. Of the funds appropriated by this Act under the headings ‘‘International Narcotics Control and Law Enforcement’’ and ‘‘Foreign Military Financing Program’’, 35 percent may not be made available for assistance for the Honduran military and police except in accordance with the procedures and requirements specified under section 7045 in the explanatory statement described in section 4 (in the matter preceding division A of this consolidated Act).

  2. The restriction in paragraph (1) shall not apply to assistance to promote transparency, anti-corruption, border security, and the rule of law within the military and police.

This 35 percent is a significant increase from the 20 percent previously withheld over concerns about human rights violations by Honduran security forces.

The “procedures and requirements” appear under the section (Division J) titled “Military Construction and Veterans Affairs, and Related Agencies Appropriations Act, 2014”:

Honduras. - The agreement modifies language in the Senate bill regarding Honduras in subsection (e). There is concern with the security challenges facing Honduras, which has become a transit hub for illicit drugs from South America. The assistance provided by this Act is intended to help stem the trafficking and address related violence, corruption, and impunity. The agreement recognizes the need for fundamental reform of Honduran law enforcement and judicial systems. In accordance with section 7045(e) of this Act, 35 percent of funds that are available for assistance for the Honduran military and police may be obligated only if the Secretary of State certifies that-

Dan Beeton and Alexander Main / January 16, 2014

Article Artículo

Brazil

Latin America and the Caribbean

World

More Forced Evictions in Rio de Janeiro: What Happened to the Statute of the City?

On the night of January 7 another series of forced evictions took place in the Metrô-Manguiera favela slum in Rio de Janeiro. Approximately 500 meters from Maracaná stadium, site of the 2014 World Cup final match, 40 families were brutally kicked out of their homes by the military police who used pepper spray and tear gas grenades.

Unfortunately, this did not come as a surprise to anyone who has been following preparations for Olympics and World Cup in Rio de Janeiro. Thousands of people have already been evicted due to event-related construction projects and real estate speculation activities. They have received compensation settlements well below market rates or have been relocated to the far outskirts of the city,  in violation of the City’s Organic Law which stipulates that victims of forced evictions have to be relocated close their previous residences. How can these types of activities still happen 12 years after the national Statute of the City was passed?

The Statute of the City of 2001 mandates that all cities of over 20,000 implement a Master Plan that follows a series of norms to guarantee effective public participation in all city government spending and project implementation.  When the Statute was passed, cities were given a grace period of 5 years to either facilitate new Master Plans or revise their current plans to abide by the new directives.  At the time, Rio de Janeiro’s 1992, 10- year plan was still in effect.  With the 5 year grace period granted by the Statute of the City, it remained legally binding until 2006.  The City Council passed a further, 2 year extension, however the new Master Plan was only ratified in February,  2011.

During the legislative vacuum between the expiration of the old Plan and the ratification of the new one, the City Council passed a series of laws to facilitate real estate speculation related to the World Cup and the Olympics. Furthermore, Mayor Eduardo Paes issued Decree N. 32080 on April 7, 2010, which authorizes forced evictions in all areas that the City Government decides are at risk for natural disasters.  This decree is being used as a political tool to clear out areas of interest for the real estate industry in places like Providencia Favela, located in the newly gentrifying port area, where the City is building a cable car system for tourists and over 800 families are targeted for eviction. Since there was no Master Plan in effect during this period, are these new laws and decrees legal?

CEPR and / January 13, 2014

Article Artículo

Inequality

Workers

Minimum Wage and Poverty
University of Massachusetts economist Arindrajit Dube (on leave this spring at MIT) has an excellent new paper looking at the impact of the minimum wage on the federal poverty rate. In the past, I have generally relied on analyses along the lines of this

John Schmitt / January 13, 2014