Globalization Initiative

Yesterday, the U.S. House of Representatives overwhelmingly passed H.R. 3221, the Student Aid and Fiscal Responsibility Act. Included in the legislation were provisions proposed in H.R. 2060, The Community College Technology Access Act, which would offer free computer training to all Americans through the nation’s community colleges. Sponsored by House Democratic Caucus Chair John Larson, H.R. 2060 was based on a 2007 NDN paper by Globalization Initiative Chair Dr. Robert Shapiro entitled Tapping the Resources of America's Community Colleges. These provisions are designed to increase worker skills in a 21st century economy in which facility with and connectivity to the global communications network are prerequisite for success. A companion bill, S. 1614, has been sponsored by Senator Chuck Schumer.

"Community Colleges reach every corner of this country with over 1100 in urban, rural and suburban settings." Larson said. "The legislation we passed today takes a bold step to expand the mission of our community colleges – making them a hub for training our workforce by opening their doors to provide the public with the basic computer training skills our workers need to succeed in a modern economy. I would particularly like to thank NDN and Dr. Robert Shapiro, for their hard work and advocacy on this issue as well as Chairman George Miller for including our language in his legislation."

"I salute the House of Representatives and especially Chairman John Larson for passing legislation that taps the resources and technology of community colleges to provide America's workers with the information-technology skills they'll need to succeed in a very competitive U.S. and global marketplace, particularly during tough times," Shapiro said. "Tens of millions of Americans entered our workforce before computers and the Internet became so ubiquitous. Many of them now are in what should be their most productive and highest-earning years. As non-wired jobs become increasingly rare, Americans without solid IT skills will find themselves economically marginalized. This legislation will help millions more American workers thrive in our idea-based economy."

Last week, Professor Jagdish Bhagwati joined NDN to discuss the changing global economy. At the G-20 in Pittsburgh next week, sure to be discussed is the impact the Great Recession has had on the international trading system. Here are Bhagwati and Dr. Rob Shapiro discussing that very topic:

According to the Financial Times, the G-20 will also address global economic imbalances (Bhagwati and Shapiro discussed that topic as well), a timely topic in light of the ongoing U.S. - China tire spat. 

A couple of interesting notes out on wages today: As background, we've long argued that getting wages and incomes up was the primary governing challenge of the day, going back to the Bush economy that saw wages stagnate and incomes decline. 

David Leonhardt from the New York Times points out that wages are actually increasing in the recession for those who are employed. But those who aren't are having an incredibly hard time finding a new job. Employment churn seems to be at quite the low.

Mark Thoma excerpts the latest Economic Outlook from the San Francisco Federal Reserve, which sees "anemic recovery" and "weakness in wage growth." Not good.

For more on the politics of incomes and wages, take a look at Simon's recent essay on focusing national attention on creating a new economic strategy for America. 

Last Tuesday, September 8, Professor Jagdish Bhagwati joined us here at NDN and the New Policy Institute to discuss the major international economic challenges facing us in the months since policymakers confronted the worst economic crisis in the modern era. I'll be posting segments of his talk with Globalization Initiative Chair Dr. Robert Shapiro over the next few days, but, in light of the growing U.S. – China trade spat, I wanted to begin with the part of the discussion focusing on rising powers and trade policy.

As you can hear at about 7:40, Bhagwati doesn't think the selective safeguard mechanism was particularly wise to include, but is sympathetic toward the President's desire to act on the provision agreed to by the Chinese. The Chinese retaliation, directed toward American the auto industry and chicken, is certainly unfortunate – hopefully the upcoming G-20 can smooth all this out and prevent a trade war – but it is certainly politically astute. It's hard to imagine a more politically sensitive industry right now than automobiles, and one might notice that the brand new chair of the Senate Agriculture Committee is from Arkansas, the home of Tyson Foods.

Please join NDN and its affiliate, the New Policy Institute, today at noon for the kick-off a new series of events discussing the challenges facing the American and global economies. The series, coming months after policymakers confronted the most serious global economic crisis of the modern era, will examine domestic and international economic issues with the ultimate aim of envisioning a new economic strategy for the age of globalization. This event comes at a particularly important moment in this conversation as America and an increasingly important group of the world's leading economic powers prepare for the G-20 meeting in Pittsburgh later this month. 

Joining us today will be leading international economist Dr. Jagdish Bhagwati, Senior Fellow for International Economics at the Council on Foreign Relations, the University Professor at Columbia University, special adviser to the UN and the World Trade Organization, and author of In Defense of Globalization and Termites in the Trading System. He, along with NDN Globalization Initiative Chair Dr. Robert Shapiro, will discuss the impact of the Great Recession on international trade and the trading system, the danger of protectionism, and the path forward on the Doha Development Round. Shapiro will open the event with brief remarks and moderate a question and answer period. Both speakers will take questions from the live audience and those watching online.

Tuesday, September 8; light lunch served at 12:00pm
NDN: 729 15th St. NW, First Floor
A live webcast will begin at 12:15 p.m. ET
RSVP | Watch webcast

To learn more about the work of NDN's Globalization Initiative, which seeks to create a 21st century economic strategy for America, visit www.ndn.org. For more on NDN's affiliate, the New Policy Institute, visit www.newpolicyinstitute.org.

For some background material prior to the event, please take a look at:

• The Key to the Fall Debate: Staying Focused on the Economy by Simon Rosenberg, Huffington Post, September 3, 2009.
• Noticing and Solving the Problems with Jobs and Wages by Robert Shapiro, July 23, 2009
• Legal Trade Barriers Must Be Kept in Checkby Jagdish Bhagwati and Arvind Panagariya, Financial Times, June 12, 2009
• The G-20 Summit and Beyond (video) Robert Shapiro, April 3, 2009
• Check It by Jagdish Bhagwati, The New Republic, April 1, 2009
• President Obama and Trade Policy (speech) Jagdish Bhagwati, February 19, 2009
• The Fallout of the Great Recession for Tradeby Robert Shapiro, February 11, 2009

With the G-20 in Pittsburgh just three weeks away and India hosting the world's trade ministers in Delhi, attention has again turned to the Doha Development Round. The New York Times brings good, if not a little skeptical news about the "a breakthrough" and resumption of Doha negotiations:

Trade ministers from around the world said Friday that they would resume negotiations on a stalled free-trade agreement even as it became clear that developing countries and the United States remain far apart on critical issues.

After two days of meetings in the Indian capital about how to restart the trade talks known as the Doha Development Round next year, trade ministers said they were committed to reaching a deal in 2010. But the tenor and substance of their comments suggested that few are willing to soften their stances.

The global economic downturn, which analysts say has led to increased protectionism around the world, was a strong undercurrent to the meeting. While all the delegates said the downturn made reaching a deal imperative, some bluntly said it would be harder now to sell any trade deal back home because political leaders are especially concerned about protecting domestic farmers and businesses.

On the Doha front, the Economist opens fire on bilateral trade agreements, a hallmark of the Bush Administration's approach to trade, and one that is now pervading Asia, as being detrimental to the goal of completing important, multilateral agreements:

Some claim that the tricky issues that stand in the way of a multilateral deal can be more easily resolved when only two countries are sitting at the table. That rarely happens: in the rush to conclude an agreement, such issues are often shelved. India’s deal with ASEAN last year, for instance, put aside the poisonous question of farm trade, which was one of the deal-breakers in the Doha talks last July.

Bilateral agreements, thus, do not, on the whole, serve as stepping stones to a comprehensive global deal. On the contrary, they both distract governments from the multilateral process and offer cover for politicians’ failure to advance it. Moreover, the fear of losing favourable treatment in a bilateral agreement can deter governments from talking tough in multilateral negotiations.

If this topic even vaguely interests you, I'd recommend joining NDN this coming Tuesday as NDN Globalization Initiative Chair Dr. Robert Shapiro hosts a conversation with Professor Jagdish Bhagwati, Senior Fellow for International Economics at the Center on Foreign Relations and economics professor at Columbia University. The two will discuss the impact of the Great Recession on international trade and the trading system, the danger of protection, and the path forward for the Doha Development Round. For more on the event, and to RSVP, click here. 

Please join NDN and its affiliate, the New Policy Institute, next Tuesday, September 8 at noon for the kick-off a new series of events discussing the challenges facing the American and global economies. The series, coming months after policymakers confronted the most serious global economic crisis of the modern era, will examine domestic and international economic issues with the ultimate aim of envisioning a new economic strategy for the age of globalization. This event comes at a particularly important moment in this conversation as America and the world's leading economic powers prepare for the G-20 meeting in Pittsburgh later this month. 

Joining us next week will be leading international economist Dr. Jagdish Bhagwati, Senior Fellow for International Economics at the Council on Foreign Relations, the University Professor at Columbia University, special adviser to the UN and the World Trade Organization, and author of In Defense of Globalization and Termites in the Trading System. He, along with NDN Globalization Initiative Chair Dr. Robert Shapiro, will discuss America's international economic policy, the upcoming G-20 Summit, and the future of global economic liberalization. Shapiro will open the event with brief remarks and moderate a question and answer period. Both speakers will take questions both from the live audience and those watching online.

Tuesday, September 8; light lunch served at 12:00pm
NDN: 729 15th St. NW, First Floor
A live webcast will begin at 12:15 p.m. ET
RSVP  |  Watch webcast

Background from Bhagwati and Shapiro:

• Noticing and Solving the Problems with Jobs and Wages by Robert Shapiro, July 23, 2009
• Legal Trade Barriers Must Be Kept in Check by Jagdish Bhagwati and Arvind Panagariya, Financial Times, June 12, 2009
• The G-20 Summit and Beyond (video) Robert Shapiro, April 3, 2009
• Check It by Jagdish Bhagwati, The New Republic, April 1, 2009
• President Obama and Trade Policy (speech) Jagdish Bhagwati, February 19, 2009
• The Fallout of the Great Recession for Trade by Robert Shapiro, February 11, 2009

Below, please find my comments today on the reappointment of Federal Reserve Chairman Ben Bernanke and the new OMB report estimating that the deficit will reach $9 trillion over the next decade.

On the new OMB estimates:

The new numbers today from the Office of Management and Budget remind us that short term and long term deficit projections are very uncertain. What is equally certain is that the economy needs stimulus today, whatever the short term cost to the deficit, as well as sharp reductions in long term deficits. Those long-term reductions have to form the basis for the other reforms in health care, energy, education and training which our economy and nation need. Addressing both of these tasks remains the administration’s most important domestic challenge.

On Chairman Bernanke's reappointment:

Chairman Bernanke did not see this crisis coming, but he steered the economy well once it arrived. The country still needs his wisdom, because this crisis is not over. Our large financial institutions remain fragile, as they continue to hold most of the toxic assets which brought down other financial giants. The economy remains vulnerable to additional shocks from the financial system, including the deteriorating commercial real estate markets. Foreclosures continue to rise, which in turn drain more of the value of the mortgage-backed securities still held by financial institutions. The only reason we haven’t seen greater effects is that we suspended their mark to market accounting. But underneath the bookkeeping, these problems remain serious. All of this portends a very challenging economic environment and the prospect of a difficult recovery. The President was right to opt for continuity in the face of this large and critical agenda, which we hope Chairman Bernanke will help resolve.

The Washington Post's Ticker blog reports on new jobless claims:

New jobless claims last week jumped to 576,000, a figure higher than economists expected, the Labor Department reported moments ago.

The new jobless claims number was up 15,000 from the previous week's revised numbers. Economists expected a drop of about 11,000 last week.

The figure wiped out stock futures gains that had been promising a higher market opening today.

It also suggests more job losses to come this month. The official national unemployment rate stands at 9.4 percent, but most economists -- and the White House -- expect the figure to peak at more than 10 percent.

Analysts suggest that the economy needs to see fewer than 500,000 new jobless claims per week for several weeks in a row before an unemployment bottom can be called.

More data suggesting that the underlying economic situation is less sound than many believe. The economy didn't fall off the cliff, but it seems like we're still sliding down that mountain. Also, Nouriel Roubini wants us to stop asking when the recession will end.