NDN Blog

I think i'll leave this article without too much comment. In relation to the wisdom NDN's soccer campaign, i'd say it pretty much speaks for itself:

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On soccer Sundays, Hispanic immigrants crowd parks across nation

By MATT REED Associated Press Writer

(AP) - COLUMBUS, Ohio-The buzz of a nearby highway can't drown out the yelling, the shouts in Spanish, the referee's whistle - the sounds of soccer being played on a weekend afternoon.

At Rhodes Park on any given summer Sunday, families and friends gather to watch teams with names such as Club Chiapas, Cantaranas or Quiroga - names that recall professional soccer teams or home villages in Mexico and Honduras.

As more immigrants settle outside the Southwest, Hispanic soccer is becoming more competitive and organized around the country and attracting interest from businesses looking to reach young Hispanic immigrants.....The secret is to reach Hispanics where they are, and they're gathering on the soccer fields, not at high-end malls.......

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Fed Chair Ben Bernanke is off in Wyoming at the moment, at the Fed's annual economic pow-wow. Moving on from how wonderfully nerdy the cocktail chat must be, Bernanke gave a really very interesting speech about Globalization this afternoon. Its full of intriguing history lessons, and includes a fun quote from that noted sage of the global economy, Martin Luther.

The most interesting issue from NDN's point of view are the parallel's he draws between the current period of global integration, and previous analgous times in history. His lessons are particularily apt: 

A second conclusion from history is that national policy choices may be critical determinants of the extent of international economic integration. Britain's embrace of free trade and free capital flows helped to catalyze international integration in the nineteenth century. Fifteenth-century China provides an opposing example. In the early decades of that century, the Chinese sailed great fleets to the ports of Asia and East Africa... These expeditions apparently had only limited economic impact, however... Evidently, in this case, different choices by political leaders might have led to very different historical outcomes.

At a time in which the rise of protectionist sentiment is evident in America, we would do well to head his words. Integration made by policy can be so undone. But perhaps his third lesson is even more important at present: 

Social dislocation, and consequently often social resistance, may result when economies become more open. An important source of dislocation is that--as the principle of comparative advantage suggests--the expansion of trade opportunities tends to change the mix of goods that each country produces and the relative returns to capital and labor. The resulting shifts in the structure of production impose costs on workers and business owners in some industries and thus create a constituency that opposes the process of economic integration. 

This is wise advice for those around the President, including sadly his otherwise impressive new Treasury head, who think nothing needs to be done to help those currently not feeling the benefits from Globalization and Trade. As Robert Rubin has said recently, the case for trade is overwhelming, but its benefits must be broadly-enjoyed. The clear and present danger is that a globalization whose benefits are enjoyed by only a few cannot be sustained. Bernanke seems to understand this. We must hope his boss can be won round soon enough. 

The economy isn't doing well. This we know. Figures yesterday showed ever more evidence of a housing slowdown. Stocks took a tumble as a result. Paul Krugman, noticing the same McMansion decline i discussed yesterday, took a swipe at housing gloom today. As if this isn't enough, today we had the most tellingly indicator of all. The Editorial page of the Wall St Journal ran had a big piece trying to put the housing decline squarley within the context of past monetary policy. Put another way, they judged the decline in house prices as sufficiently politically dangerous that they needed to try and find a way not to blame the President.

The Journal is now a key indicator of economic bad news. So wedded are they to Bush administration, that they feel compelled to defend even the worst performing parts of the economy. Amid mounting evidence of a slowdown, they returned last month to their concept of the "Dangerfield Economy", named after Rodney Dangerfield, and so coined because the economic expansion gets "no respect.' And recently their place on the fringes of mainstream economics has been confirmed by repeated denials of the Phillips Curve, the orthodox economic view that a short term trade off exists between growth and inflation.

Bottom line: if the WSJ says something isn't the President's fault, you can be almost certain it is. And if they say the economy deserve respect, its time to buy abroad. But - hey! - don't take our word for it. Ask Dick Cheny. Since its friday i thought it'd be ok to link to a fun report on Alternet claiming that our sharp-shooting Vice-President is busy moving his private wealth into foreign securities to avoid the coming downturn in the american economy. I'm not exactly sure what the piece means when it says "in markets that do not fluctuate based on the U.S. dollar". Any foreign denominate security must eventually be sold back to earn dollars, so their value depends on the exchange rate. Nevertheless, if the Vice-President thinks that the economy is in the tank, then perhaps the more aggressive reccesion forcasters might not be so far off?

Robert Reich packs a big brain in a small body. And he has been using it to good effect to explain the mystery behind public dissatisfaction with the economy. As you might expect, it doesn't really take all of Reich's grey matter to come up with the answer:

Rarely before in history has the American economy grown so nicely without most Americans sharing in the growth. Corporate profits are fatter than they've been in years. What corporations aren't using for investment they're awarding to their top executives or distributing to their shareholders. The top one percent of income earners, gleaning over $750,000 this year, are doing wonderfully well and are quite happy about the economy. The typical family -- with stagnant income, a house that's no longer a piggy bank, and higher fuel bills -- is not. Hence the real disconnect.

Obvious, when you think about it. Strange the President hasn't figured it out yet. Perhaps he is too busy with his faintly implausible summer reading list?

Its a grim day in Iraq. But isn't every day? Perhaps the damning headline of the war is on the front page of this morning's Post - Bush's New Argument on Iraq: It Could Be Worse. I'm not sure how. The article is pretty devastating for anyone retaining a positive view of the war's future. I'm going to go along to this intriguing looking event at the New America Foundation at lunchtime - Moral Clarity and the Middle East: Long War, Wider War, or the Return to a Peace Process? - to see how much longer the long war can be expected to drag on. I can't think its going to be uplifting. I'll report back later. 

These are worrying times for free trade. Back in the dog-days of the 1990s, Republican commentators would wax alarmist about the danger's of "mission creep" during international peace keeping operations. Get into Somalia, they would say, and you'll suddenly be there for years. The rise of protectionism works in much the same way. Without any grand vision on the future of liberalization since "time out" was called on the Doha round, "protection creep" is going to be all around us in the months up to the election. In the FT this morning, we have the latest development over attempts to politicize the CFIUS process of green-lighting foreign investment. Reform proposals were introduced following the Dhubai Ports debacle earlier in the year. Current congressional overhaul plans are the worst of both worlds. They stand a good chance of lessening foreign investment and doing little to increase American security. Much better, as the National Foundation for American Policy suggested recently, to avoid alarmist legislation in the first place. Elsewhere in the FT the reliably sane Guy De Jonquires details exactly what happens when Protection Creep sets in. The problem? His depressing conclusions about the way forward.

When gardens are neglected, weeds sprout. The withering of the Doha trade round has led, predictably, to a flourishing crop of alternatives. Washington has claimed more recently that its use of muscular bilateral trade diplomacy will re-energise the multilateral system by unleashing a wave of "competitive liberalisation". The Doha debacle has exposed that theory for what it is. In practice, bilateralism has fed off itself, intensifying the rush into preferential deals while draining energy from the Doha talks, polarising the US Congress and further diminishing its appetite for trade initiatives of all descriptions..... In the absence of strong leadership, regional trade talks simply rake over the same problems that have proved insoluble in other forums..... So, has trade liberalisation hit the buffers? Not necessarily. One "plan B" has proved its worth: it is for governments to stop leaning on each other to open markets and do it by themselves.

What a mess. The remaining hope for liberaliztion under President Bush is the pie-in-the-sky wish that countries will decide to open markets uniltaerally. Meanwhile protectionism is everywhere on the rise. Creeping up on us we have CFIUS, the upcoming row over China's currency, further potential WTO rows with China over IP, the review of the GSP, and the likely decision by the President to give up on Doha without asking congress to renew his trade negotiation authority. Add to this to strong likelyhood of electioneering politicians wheeling out open markets as election year cartoon villain. Unless supporters can come back with a grand vision for the future of trade liberalization, battling back Protection Creep one inch at a time seems to be where the battle will lie. NDN will be making our contribution to trying to promote such a vision in the coming weeks.

In a new, very occasional feature on the NDN blog, we present the Lunchtime competition. Today's question: which of the following stories do we believe less ? The miracle of the President's reading habit, or the miraculous progress being made in the middle east? First up: President Bush Renaissance Man from US News and World Report.

President Bush now wants it known that he is a man of letters. In fact, Bush has entered a book-reading competition with Karl Rove, his political adviser. White House aides say the president has read 60 books so far this year (while the brainy Rove, to Bush's competitive delight, has racked up only 50).

Second up, Republican Senator James Inhofe from Oklahoma on the situation in Iraq (via CAP).

Contrary to most reports, Inhofe said, many Iraqis are pleased about the U.S. intervention. "Iraqi security forces now number 275,000 trained and equipped," he said. "The commanders in the field and the Iraqis say when this reaches 325,000, that would equal 10 divisions..... What's happened there is nothing short of a miracle."

Answers on a post card.

Are McMansion owners the last group deserving of sympathy in a slowing economy? What about the people who build them? Toll Brothers are the company most responsible for the rise of "the estate home". The eponymous Mr Toll - a man whose very name invites headlines of doom, see above - claims in this morning's WSJ that the housing market slowdown is as bad as he has seen:

In his 40 years as a home builder, Mr. Toll says, he has never seen a slump unfold like the current one. "I've never seen a downturn in housing without a downturn in employment or... some macroeconomic nasty condition that took housing down along with other elements of the economy," he says. "This time, you've got low unemployment, you've got job creation, you've got a stable stock market and relatively low interest rates."

This on top of a lengthy report in last week's FT describing the housing market as "feeble". Given that investment in home equity is to the current expansion what investment in stock was to the last, a slowdown will carry consequences. I don't pretend to fully understand the economics of the American housing market. But declining house prices carry devastating political consequences, as voters struggle with mortgage payments or find themselves trapped in negative equity. And i guess McMansion owners might be joining McMansion builders among the hardest hit.

No one seems to have put this up on here yet, so i'll do it. No wonder Arnold is communicating in Spanish. A recent addendum to Census data shows that 42% of Californians don't speak English at home, with the vast majority speaking Spanish. Another take on the data, this time in Ad Age, looks at the English language skills of hispanics. Bottom line: younger hispanics are good to go, but ' fewer than half (47%) of those ages 18-64 speak English "very well," and 19% speak English "well." Among those 65 and older, just 36% speak English "very well" and 19% "well." ' 

A terrific, racey piece from Clay Risen at TNR about the dangerous rise of protectionist sentiment. Its title - The End of Free Trade - is, of course, absurdly dramatic. But Risen is particularily good on how the Bush administration's warm words hide a melange of base politics (steel tarrifs), a conspicous lack of leadership (doha) and political cowardice (the rest) to leave the case for open markets much more vulnerable at the end of his Presidency than at the beginning:

Bush is seen by many as having given up because the political consequences at home are too great. Consider: the bruising battle over the Central American Free Trade Agreement, the successful opposition to the bid by the China National Offshore Oil Corporation to buy Unocal last year, the Dubai Ports World fight this year, the near-failure of a trade deal with Oman, and the possible failure of a similar deal with Peru. All a consequence of protectionist sentiment in Congress, all instances where Bush's supposed trade leadership was hampered by domestic political concerns. With the midterm elections coming, it's a good bet that Bush doesn't want to hurt his party any more than he already has--and pushing GOP congressmen to back more free-trade efforts would hardly help. This may be no-brainer politics at home, but, to the rest of the world, it is a dismaying retreat.