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CEPR News December 2011

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Written by Dawn Lobell   
Thursday, 22 December 2011 12:45

The following highlights CEPR's latest research, publications, events and much more.

CEPR on Latvia
CEPR’s recent paper,  “Latvia's Internal Devaluation: A Success Story?” by CEPR Co-director Mark Weisbrot and Research Associate Rebecca Ray, concludes that Latvia’s deep recession and slow recovery hold important lessons for other eurozone countries that may rely on an “internal devaluation” in an attempt to boost their economies through exports.  According to Mark, “The economic and social costs of Latvia’s economic strategy since the global financial crisis and world recession of 2008-2009, of ‘internal devaluation,’ have been enormous for the people of Latvia,” not the least of which have been the high unemployment and other harmful impacts on working people that are inherent to such “internal devaluations.” “The case of Latvia has important implications for the current debate on the eurozone crisis, since similar pro-cyclical policies are being implemented in a number of countries,” Mark concludes.

The paper received a great deal of press, both in Europe and the United States, including this mention by Paul Krugman and it was the focus of this story in The Guardian and this article on CBS’ Moneywatch. The paper was also widely discussed in the Latvian Press.


CEPR on the Eurozone
CEPR has written extensively on the ongoing eurozone crisis, having a significant influence on the policy debate. In columns for Al Jazeera and The Guardian, Co-directors Dean Baker and Mark Weisbrot were among the first to suggest that if the European Central Bank (ECB) were to continue to refuse to fulfill its mission as a lender of last resort then the U.S. Federal Reserve should consider doing so, since the impact of the eurozone crisis is already projected to slow the U.S. economy. This helped to push the Fed to reduce emergency dollar borrowing costs for European banks, which Dean and Mark praised in this joint press release, though they added that more needs to be done. Dean and Mark each wrote about the ECB’s role in perpetuating the crisis as well. The ECB, they point out, could end the crisis at any time. However, Dean suggests that the ECB may be prolonging the crisis in order to extract painful austerity concessions from weaker eurozone countries.

CEPR staff took to the airwaves as well. Mark was interviewed about the eurozone on Al Jazeera, PRI’s The World, and CTV (Canada), while CEPR Senior Economist John Schmitt discussed the Fed’s response on the Rick Smith radio show [MP3].


CEPR on Haiti

Mark issued this press release and wrote this op-ed for The Guardian calling for the United Nations Stabilization Mission in Haiti (MINUSTAH) to take responsibility for having caused the cholera outbreak that so far has killed over 7,000 people and infected 500,000. CEPR has been covering MINUSTAH and its role in the cholera outbreak in the Haiti: Relief and Reconstruction Watch blog since the outbreak began. The blog’s main contributor, CEPR Research Assistant Jake Johnston, posted this piece on MINUSTAH that was picked up by both Common Dreams  and Truthout.  Jake also wrote an article exposing contractor companies in Haiti that have defrauded the U.S. government – but that continue to receive U.S. government funds through backdoor channels - for The Hill.


CEPR on the Financial Transactions Tax
Dean Baker was interviewed by the Coffee Party on the Financial Transactions Tax (FTT). The Coffee Party joins a growing list of supporters of the financial transaction tax and has featured it in its position paper. In the interview, Dean explains the benefits of the tax and shoots down critics. As noted in the introduction, Dean “has been advocating for this tiny tax on Wall Street transactions for years and it is now finally gaining support and momentum around the world”.  This is especially true in Europe, where an increasing number of officials are going on the record in support of the FTT.. (In this CEPR Blog post, Dean critiques the European Commission’s model, which projects a 1.76 percent decline in output in the long term if the tax were to be enacted. Opponents of the tax were quick to seize on this projection as a basis for opposing the tax.)

Last month, Senator Tom Harkin and Representative Peter DeFazio introduced the Wall Street Trading and Speculators Tax bill, which as Dean explains would raise tens of billions of dollars a year while reining in dangerous speculative trading. Harkin and DeFazio discuss the prospects of the bill passing in this piece in the Huffington Post, stating that the White House would be wise to adopt the measure so that voters will see him as the “Main Street candidate” in 2012.


CEPR on the NLRB
Earlier today, the National Labor Relations Board approved proposals that would streamline procedures involved in unionization elections. Under the new rules, the average amount of time to hold unionization elections would be reduced, a move that labor leaders say will help unions sign up more members.

In July of 2011, Dean Baker participated in the NLRB’s open meeting on the proposed rules where he presented the findings of two papers by John Schmitt and CEPR Senior Research Associate Ben Zipperer on the risk of dismissal in the course of a unionization drive.  Schmitt and Zipperer used data on reinstatements from the National Labor Relations Board (NLRB) to update prior work on the probability of a worker being dismissed in the course of a unionization election.


CEPR on the World Trade Organization (WTO)

CEPR's Director of International Programs, Deborah James, coordinates global civil society activity on the WTO with the Our World Is Not for Sale (OWINFS) network. This year's 8th WTO Ministerial took place in Geneva, Switzerland from December 15-17. James provided an overview of the issues at stake in an article, "WTO Turnaround: Food, Jobs, and Sustainable Development First!" which circulated just prior to the Ministerial. Last week, James was there coordinating a delegation of 55 civil society representatives including trade unions, farmers, consumer activists, and development advocates.

What should have been on the agenda of the Ministerial was a series of fixes outlined in the OWINFS statement, such as getting rid of WTO constraints on Financial Regulation, which would allow countries more policy space to deal with the global economic and other crises. Instead, the U.S., EU countries, Australia, and other rich countries pushed a "pledge against protectionism" which could seriously curtail policy space for developing countries, and was thus roundly rejected by civil society organizations and the ALBA countries in Latin America, among other developing nations. The corporate agenda also included pushing "pluri-lateral" negotiations within the WTO on issues such as investment and trade facilitation only among a "coalition of the willing." These extreme market-access demands – in the face of a global crisis of financial deregulation and unemployment, which WTO rules have contributed to and failed to ameliorate – inspired James and other civil society members to take a page from the global Occupy movement and interrupt both business receptions and the WTO conference center with "mic check" actions. In the future, OWINFS and CEPR will keep working for a global trade regime that can discipline corporate behavior and harness trade for development, rather than just providing small GDP gains to corporations in rich countries at the expense of the world's workers, farmers, environment, and general public interest.


CEPR on Social Security
In December’s installment of the Congressional Accuracy Campaign, Senator Mike Johanns (R-NE) received a letter from Dean explaining that the Social Security trust fund is not, as the senator had claimed, full of IOUs. Dean also weighed in on the payroll tax cut and its implications, here.


CEPR: New and Noteworthy
-- Beat the Press was named "Most Valuable Economic News Source" by The Nation for their Progressive Honor Roll for 2011!

-- Paul Krugman likes Dean’s Beat the Press post on Robert Samuelson and John Maynard Keynes. Krugman also supports Dean’s take down of Samuelson (and others) who claim that the excessive welfare state caused the euro crisis, and he agrees with Dean’s critiques of other eurozone coverage as well.

(In other Keynes’ related news, click here to follow Dean’s month-long debate on Cato Unbound entitled “The Will the Real John Maynard Keynes Please Stand Up?”) 

-- CEPR Senior Economist Eileen Appelbaum, Rosemary Batt of Cornell University, and Ian Clark of the University of Birmingham presented their coauthored paper, "Financial Capitalism and Collateral Damage," at the 50th Anniversary Conference of the British Journal of Industrial Relations, held at the London School of Economics on December 13th. The conference agenda can be found here, and Eileen’s presentation can be accessed here.

-- On December 4, 2011, Eileen’s article “Macroeconomic Policy, Labour Market Institutions and Employment Outcomes” was published by Work, Employment and Society, a leading international peer-reviewed journal of the British Sociological Association. The online version will be available within the next few weeks.

-- John Schmitt traveled to Seoul, South Korea where he discussed "Lessons on Low-Wage Work from the Wealthy World" as part of the conference "Welfare States’ Response to Labor Market Dualism and The Working Poor," organized by the Korea Labor Institute (KLI) NRF-SSK of Center for Peace and Public Integrity at Hansin University. For more information, visit the event's website. John’s paper from the conference will be available soon at www.cepr.net.

-- Mark Weisbrot’s McClatchy column on Occupy Wall Street appeared in 24 newspapers, including the Chicago Tribune, Times of India, Sacramento Bee and the Palm Beach Post.

-- CEPR Senior Research Associate Shawn Fremstad was on Radio Islam on December 5th, talking about Obama’s poverty measures.

-- CEPR Director of Domestic Policy Nicole Woo and Dean were both acknowledged in a recent paper released by the Indiana Institute for Working Families. “Work Sharing: A Win-Win-Win Strategy for Avoiding Job Losses” provides an overview of work sharing and includes seven recommendations for implementation of a work-sharing program in Indiana. The paper also referenced CEPR’s turnover calculator, a paper, blog posts, and a graphic economics figure.
Click here for a complete listing of CEPR’s publications on work sharing.

-- CEPR’s paper on Asian American Pacific Islander workers continues to receive attention. It will soon be featured on the website of the Washington State Commission on Asian Pacific American Affairs.

--Just in time for your last-minute holiday shopping, Dean Baker’s latest book The End of Loser Liberalism: Making Markets Progressive is now available in paperback on Amazon.com and Barnes and Noble (BN.com). People are saying some nice things about the End of Loser Liberalism, including Jared Bernstein, Slate, rortybomb, The Montreal Gazette and The Somerville News.

-- CEPR Senior Research Associate Helene Jorgensen’s book Sick and Tired: How America's Health Care System Fails Its Patients is now available for Amazon’s Kindle, also just in time for the holidays.


Happy Holidays from CEPR

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