The Haitian government’s Société Nationale des Parcs Industriels (SONAPI) hired a U.S. lobbying firm in February to draft documents and arrange meetings “with Congressional Members and staff and Administration officials to seek change to trade legislation” and to help “implement” worker rights provisions, according to Foreign Agent registration documents. SONAPI is the government entity which owns the newly-opened Caracol industrial park, and is the institution responsible for locating, organizing and managing industrial parks throughout Haiti. Yesterday, a presidential decree named business owner Bernard Schettini as the new head of SONAPI, replacing George Sassine, the ex-president of the Association of Industries of Haiti and the former Executive Director of CTMO-HOPE, the commission in charge of implementing U.S. preferential trade legislation.

Lobbying disclosures show that Sorini, Samet & Associates has been hired at the rate of $5,000 a month to help SONAPI lobby congress. Andrew Samet, the co-founder and principal of the firm, was the Deputy Undersecretary of Labor under President Clinton and later worked for law firm Sandler Travis and Rosenberg which counted the industry group the American Apparel and Footwear Association as a major client (the Association in turn has supported “free trade” deals such as CAFTA and HELP legislation for Haiti). Samet was hired as a lobbyist by Colombia in 2008 when it was pushing for passage of a “free trade” agreement with the U.S. Samet was hired to provide “a strategy on labor issues directed to support favourable consideration” of the FTA with the U.S. and to assist "the government of Colombia in presenting information on labor issues with relevant U.S. stakeholders, including U.S. Congress, the administration, labor advocacy groups, trade unions and the media." The FTA with Colombia was eventually passed despite the ongoing killing of unionists in the country, which continues to this day. In June 2012 the AFL-CIO issued a report documenting how the Labor Action plan attached to the FTA was failing to prevent labor and human rights violations. For six months of work in 2008, Sorini, Samet & Associates received over $100,000, according to lobbying disclosuredocuments.

The firm has also done previous work for Sassine and the Haitian government during Sassine’s tenure at CTMO-HOPE, earning nearly $400,000 from 2008-2010 lobbying Congress for the passage of new trade legislation and the implementation of “worker rights provisions.” Industrial parks and garment manufacturing are seen as vital development tools by the Haitian government and many of its international backers. The industry is reliant on trade preferences offered by the United States which started in 2006 with the HOPE act and culminated in the “HELP” act, which was passed soon after the earthquake. According to stakeholders, the HELP legislation, which extended the length of the preferences and increased the amount of textiles that would be subject to benefits, was a key part of bringing in Sae-A Trading, the global manufacturer that recently opened a factory at the Caracol industrial park.

While Sorini, Samet & Associates was previously hired to help implement “worker rights provisions” associated with the HOPE legislation, factories in Haiti are still in violation of a significant number of provisions under the preferential trade legislation. The most recent Better Work Haiti report found that 21 of 22 factories covered in their analysis (Caracol is not covered yet) were non-compliant with minimum wage laws, for example. This past summer, the Office of the U.S. Trade Representative, in their annual compliance report, found that “there was sufficient credible evidence to conclude that three specific producers were non-compliant with one or more of the core labor standards.” This was the first time in four years that the report named specific factories. The violations included non-compliance in: sexual harassment, freedom of association and forced labor.

I got an email yesterday from Elaine Kamarck, resident scholar at Third Way. We don't know each other, but she wanted to let me know about a new Third Way study: Wayward Sons: The Emerging Gender Gap in Labor Markets and Education (pdf). I had already rea

Ezra Klein put up a blog post last night on the corruption of national politics and the media. It showed graphs from the International Federation of Health Care Plans that compared the cost of various medical procedures and products in the United States with the cost elsewhere in the world.

The graphs showed that the United States is a huge outlier, paying two or three times as much as other countries (sometimes more) for nearly every item on the list. The bottom line is that we spend 8.1 percentage points ($1.3 trillion a year) more of our GDP on health care than the average for other wealthy countries. We have nothing to show for this in terms of better health care outcomes. (The gap is actually larger, since average income in these countries is around 25 percent less than in the United States. We would expect to have better outcomes even if we spent the same share of our income on health care, just as we would expect better housing if we spent the same share of our larger income.)

The reason why Klein's charts reveal the corruption of politics and the media is that this information is news to anyone. The media and politicians harp endlessly on the cost of Social Security routinely yelling about how outrageously expensive it is. In fact, National Public Radio just did a major piece on the Social Security disability program and proclaimed to listeners that it was unaffordable. 

While the cost of the disability program has increased due to the economic collapse, once the economy recovers it is projected to cost less than 0.9 percent of GDP, a bit more than one tenth of the excess cost of our health care system. In fact the entire cost of the combined Social Security retirement and disability program are projected to peak at under 6.4 percent of GDP in the mid 2030s, less than 80 percent of the excess cost of the U.S. health care system. NPR has no problem pronouncing the cost of the disability program as unaffordable, implying to its listeners that it must be changed, but it doesn't make the same pronouncements about the U.S. health system.

Mark WeisbrotAl Jazeera English, 17 de marzo, 2013En Inglés | En Portugués

March 26, 2013

March 26, 2013 (Housing Market Monitor)

Associated Press reporters Alberto Arce and Katherine Corcoran have written a follow up article to Arce’s investigative feature last week on the continuation of death squad activity by the Honduran police. The new article, which appeared in the New York T

In a report for Third Way, David Autor and Melanie Wasserman hypothesize that the decline in the share of children living with both their biological mother and biological father “may magnify the emerging gender gap in educational attainment …”.           

Dylan Mathews promised that "this chart will change how you think about U.S. manufacturing." The piece actually has two charts, but neither rises to the bar.

Both charts come from a new book by Robert Z. Lawrence and Lawrence Edwards: Rising Tide: Is Growth in Emerging Economies Good for the United States?. I've not seen the book, but I am familiar with Lawrence as a long-time optimist about the state of the economy and one who pooh poohs the idea that trade might hurt large segments of the workforce. He also seems prepared to ignore substantial evidence, using standard methodology, that shows it does.

Anyhow, the first chart shows a trend line with a rapid decline in manufacturing over the last 5 decades. According to the chart, we are pretty much right on trend. I hate to be picky here, but the fitted portion of the trend-line, which runs from 1961 to 1979, lies almost entirely above the actual data points for these years. That is not supposed to happen, which makes one wonder a bit about this trend. One might also wonder whether it is reasonable to expect a linear relationship. Will manufacturing employment really be zero in 26 years? We might expect a flattening curve as the manufacturing employment share gets small.

But let's leave these quibbles aside, the more striking part is the second graph that tells us the decline in manufacturing is happening everywhere. The chart shows us that Germany, the Netherlands, and Sweden also had sharp declines in manufacturing employment since 1973.

Let's just pick Germany here for comparison purposes. Eyeballing the chart we see that the manufacturing share of employment in Germany fell from roughly 36 percent in 1973 to 24 percent in 2011. Let's call it a decline of one-third.

Dean Baker
The Guardian Unlimited, March 25, 2013

Dean Baker
Truthout, March 25, 2013

Well, at least someone is. Let's look at his case:

"The long-dormant housing market is reviving. Home prices and sales are up; homebuilders are increasing production to satisfy rising demand. Personal finances have improved. Loans have been repaid or written off. Since year-end 2009, the ratio of household debt to disposable income has dropped from 130?percent to 111 percent, according to Federal Reserve data. It’s probably still declining. Over the same period, a rising stock market and higher home values have increased household wealth by almost $10 trillion.

"The other piece of good news is the job market. 'The last five months .?.?. we’ve seen over 200,000 jobs a month in the private sector,' Fed Chairman Ben Bernanke noted last week at a news conference. 'Unemployment [insurance] claims are at the lowest level they’ve been since the crisis.'

"So two large sources of middle-class anxiety and insecurity — jobs and wealth — are slowly easing. The share of 'underwater' homeowners (with mortgages exceeding the value of their homes) has dropped from 21.2 percent in mid-2009 to 14.8 percent in the third quarter of 2012, reports Moody’s Analytics."

Starting with the household debt story, it is important to realize that consumption was unusually high relative to disposable income at the peak of the bubble. It is unlikely to return to such heights unless the bubble returns, which it is not close to doing (thankfully in my view). The vast majority of the wealth created since 2009 has been in the stock market which has doubled in value. The housing market, which was still falling in 2009, is roughly back to its 2009 levels.

Nope, I'm not kidding. In his column today, Hiatt complained that no one seems to be moving forward on his deficit reduction agenda. He then told readers:

"What could shake them out of their own devices? One possibility, a fiscal hawk in the Obama administration told me almost wistfully, would be a 'minor market event.' A stock market plunge, an interest rate spike, a race to the exits by America’s foreign lenders — just enough to spook Congress.

"But as long as the Federal Reserve is gobbling up U.S. debt to keep interest rates low, such a mishap seems unlikely."

Yes, it must be awful when you have a view of the economy that the economy refuses to corroborate. (In fairness, Hiatt, does add that such a market event could spin out of control, so "it is not really to be wished for.")

As usual, Hiatt is upset that President Obama is not pushing hard enough for cuts to Social Security and Medicare. While he does give Obama credit for proposing some cuts to Medicare (what happened to the chained CPI?), what really has him upset is that President Obama doesn't talk about inflicting pain:

As we get our latest dose of euro crisis thrills with the battle of the Cypriot banks, it might be a good time and step back to reflect on the havoc wreaked by the European Central bankers. While the double-digit unemployment rates throughout much of the region have grabbed headlines, if we flip the picture over and look at employment rates we see a somewhat more complicated picture.

First, if we look at employment population ratios for the adult population as a whole (ages 16-64), the euro zone story does not look especially dire.  

Source: OECD.

If we want to do a direct comparison of employment population ratios (EPOP) for the euro zone as a whole, the relevant lines are the top line and the third line. In 2006 the United States had an EPOP for its adult population of 72.0 percent compared to 64.6 percent for the euro zone as a whole. By 2011 most of this gap had closed as the EPOP for the U.S. had dropped to 66.6 percent compared to 64.3 percent for the euro zone.

The closing of this gap is the story of two Europes. The north, led by Germany, has seen a rise in its EPOP since the downturn. While Germany had an EPOP in 2006 that was 4.8 percentage points below that of the U.S., in 2012 data (not on the chart), its EPOP was more than 6 pp higher.