Yesterday WikiLeaks announced the release of a new archive of U.S. diplomatic cables and other documents, 205,901 of which “relat[e] to former U.S. Secretary of State Henry A. Kissinger." This new addition contains cables, intelligence reports and congressional correspondence from 1973-1976 and is part of the larger collection of almost two million documents and U.S. diplomatic cables that WikiLeaks’ founder Julian Assange has called, “the single most significant body of geopolitical material ever published.” WikiLeaks has grouped the material together in a searchable database called the “Public Library of U.S. Diplomacy.”  

The first of these cables to make a splash about Latin America is one that exposes the Vatican’s reaction to news of human rights atrocities in Chile under dictator Augusto Pinochet, who participated in the military coup that toppled the democratically-elected government of Salvador Allende in September of 1973. Pinochet was responsible for the torture and murders of thousands of people.

In the cable to then-U.S. Secretary of State Henry Kissinger, dated five weeks after the military take-over, the Vatican’s deputy Secretary of State Giovanni Benelli dismissed reports of torture and murders by the military government as “exaggerated coverage of events” and denounced the media’s coverage “as possibly greatest success of Communist propaganda,” lamenting that this showed “how Communists can influence free world media in future."

As if on cue from the CIA –whose covert operations in Chile were instrumental in the toppling of the Allende government- the cable insists that reports of torture, disappearances, and murders by the military regime were fabrications, “leftist propaganda”:

Despite Vatican’s efforts, leftist propaganda has been remarkably successful even with number of more conservative cardinals and prelates who seem incapable of viewing situation objectively.

April 2013, Alexander Main and Annie Bird

Eileen AppelbaumCongress Blog (The Hill), April 8, 2013

Dean Baker
Truthout, April 8, 2013

The Washington Post seems to have a quota for pieces that spread misinformation on manufacturing. Today's piece by Robert Samuelson fills the quota for the day.

The gist of the piece is that manufacturing employment has been declining in importance in the U.S. for decades and also everywhere else around the world. Therefore we should not expect any substantial boost to manufacturing employment.

This is the sort of three-card Monte story that people expect from the Post when discussing economic issues that are relevant to working people. Yes, manufacturing has declined in importance everywhere and yes, it has long been declining in the United States. However the issue is the rate of decline.

According to the Bureau of Labor Statistics, from 1973 to 1989 manufacturing employment declined at an annual rate of 0.3 percent. By contrast, it declined at a rate of 1.7 percent annually between the years of 1989 to 2012. If we had simply maintained the earlier rate of decline we would have another 4.7 million manufacturing jobs. 

These years are business cycle peaks, however we get an ever sharper picture if we put the break in 1997 when Robert Rubin was able to put muscle behind his high dollar policy through his control of the IMF's bailout of the East Asian countries from their financial crisis. The annual rate of decline from 1973 remains the same at 0.3 percent, however the decline since 1997 has been 2.5 percent. If we had maintained the 1973 to 1997 rate of decline through 2012 we would have 4.9 million more manufacturing jobs today. That would be more than a 40 percent increase in manufacturing employment.

In the same vein, we have the comparison with other countries. As Samuelson's colleague Dylan Matthews showed us last month, the manufacturing share of employment in Germany fell by roughly a third between 1973 and 2010. By contrast, it fell by 60 percent in the United States. If the U.S. had seen the same pace of decline as Germany we would have another 8 million manufacturing jobs.

The Post had a good piece noting the large number of people dropping out of the workforce, presumably because they can't find jobs in the weak economy. However the problem is likely worse than the piece indicates.

There are a large number of people who do not respond to the Bureau of Labor Statistics' Current Population Survey (CPS), the standard survey used to measure labor force participation. In recent years the non-response rate overall has been close to 12 percent, as opposed to just 5 percent three decades ago. The non-response rate varies hugely by demographic group. For older white men and women it is 1-2 percent. By contrast, for young African American men it is close to one-third.

The Bureau of Labor Statistics effectively assumes that the people who don't get picked up in the CPS are just like the people who do. This assumption may not be plausible. The people who don't respond may be more transient or may have legal issues that make them less willing to speak to a government survey taker. For these reasons they may be less likely to be employed than the people who do respond to the survey.

My colleague, John Schmitt, examined this issue by looking at the 2000 Census (which has a 99 percent response rate) and comparing the employment rates overall and for different demographic groups in the CPS and the Census for the months when the Census was conducted. He found that the overall employment rate was 1.0 percentage point higher in the CPS. For groups with high non-response rates the gap was larger, with a gap of 8 percentage points for young African American men.

It was easy to see that the economy was not growing rapidly long before Friday's jobs reports. The economy grew at just a 0.4 percent annual rate in the fourth quarter. While this weakness was largely attributable to unusual factors, even averaging in the prior quarter the economy only grew at a 1.7 percent rate in the second half of 2012.

It's not clear what someone would have had to have been smoking to expect a marked upturn from this pace. Did they think the ending of the payroll tax cut would spur growth? Did the fact that new orders for capital goods (excluding aircraft) in February of 2013 were virtually unchanged from February of 2012 lead them to expect an investment boom? Perhaps the fact that job growth over the  5 months from October to February averaged just 40,000 less than in the same months a year ago was the basis for predictions of acceleration?

Yes, housing construction is up. That's good news. Residential construction is 2 percent of GDP. Get out your calculator and figure out how much impact this has.

In short, any serious look at the data would have told people that the economy was weak before the March numbers were released yesterday, nonetheless the Post tells us:

"The economy added a paltry 88,000 jobs last month, less than half the number expected. The healing housing market, resilient consumers and record highs on Wall Street had fueled hope that the recovery was finally taking off. That momentum was seen as essential to helping the economy overcome the drag of automatic government spending cuts known as the sequester over the next few months."

The New York Times reported yesterday that the Obama administration plans to change the way U.S. food assistance to other countries is conducted. The reforms, according to the Times’ Ron Nixon, would notably focus on local procurement of food rather than

UCLA’s Roger Farmer has suggested that the government should bid up asset prices—say, purchasing shares of companies in the S&P 500 in order to drive up the stock market.  In essence, he argues that the wealth effect will stimulate consumption and investm

Dean Baker
Politix, April 5, 2013

Dean Baker
The Exchange (Yahoo! Finance), April 4, 2013

April 5, 2013