The Economy Slows
It has long been clear that economists do not see the world the way people experience it. That disconnect is especially pronounced now.
The economy lost steam in the first quarter. Growth in personal consumption — the single largest component of the economy — slowed markedly. Business-related construction cratered and residential construction fell. Exports stumbled. The only unambiguous plus was continued business investment in equipment and software, which is necessary but not sufficient for overall growth.
In all, economic growth slowed from an annual rate of 3.1 percent in the fourth quarter of 2010 to 1.8 percent in the first quarter of 2011.
Not to worry. Ben Bernanke, chairman of the Federal Reserve, called the slowdown “transitory,” a judgment echoed by many economists who believe that the poor performance can be chalked up to bad weather, political unrest and other presumably temporary setbacks.
If only. Take jobs: When lauding the economy, Mr. Bernanke and many other economists and politicians point out, correctly, that the unemployment rate has declined from a recession high of 10.1 percent in late 2009 to 8.8 percent now. That would be encouraging news if it indicated robust hiring for good jobs. It does not.
Over the last year, the number of new hires has been outstripped by the masses who have either given up looking for work or who have not undertaken a consistent job search, say, after graduating from high school or college. Those missing millions are not counted in the official jobless rate; if they were, unemployment today would be 9.8 percent. The rate would be 15.7 percent if it included those who took part-time jobs in lieu of full-time ones.
Another purported bright spot in the unemployment data — the relatively low jobless rate for college-educated workers — does not stand up to scrutiny. For college educated workers over age 25, unemployment is indeed lower than for other groups. But for college graduates under age 25, unemployment over the last year has averaged 9.7 percent, and shows no sign of improvement.
Inflation is another example. Mr. Bernanke and others say that today’s inflation will likely be temporary, and they are probably right. But one of the reasons for believing higher prices won’t endure is that, in general, for inflation to take off, wages must also rise. There’s no sign of that. Stagnant wages mean Americans will have to cut consumption in the face of higher prices, and as demand drops, prices are subdued — hardly reason to cheer.
The economy still needs help and, specifically, a sustained focus on jobs and income. Instead, policy makers are gearing up for deep spending cuts, ignoring the damage they are likely to cause. Last quarter, cutbacks by governments at all levels took a chunk out of overall growth. If cuts of similar or greater magnitude become the norm, the slow economic pace of the first quarter also could very well become the norm. It’s nice to believe slowing growth is transitory. But as long as spending, jobs and incomes are at risk and policy priorities are skewed, it’s hard to believe in a turnaround.
From Secrecy to Absurdity
Anyone, anywhere, with Internet access can read the internal documents from Guantánamo Bay that were published last week. Anyone can analyze them and argue about them. Except lawyers for the people in those documents.
The Justice Department has warned lawyers representing prisoners held by the military in Cuba that the documents remain legally classified. That means the lawyers may not look at them except at a secure facility in Washington and may not discuss any classified information they learn. The rules, which serve no valid purpose, infringe on their ability to effectively represent their clients by promptly rebutting the government’s accusations and testing its basis for detention.
The papers include the military’s risk assessments of 700 past or present Guantánamo prisoners, including Saifullah Paracha, a Pakistani businessman accused of discussing further plots against the United States with Al Qaeda after Sept. 11, 2001. A lawyer handling Mr. Paracha’s challenge to his detention, David Remes, has asked the Federal District Court in Washington to let him “print, copy, disseminate and discuss” the documents without fear of losing his security clearance or other punishment.
The Justice Department says it is studying the issue. The right answer is clear. Administration officials should make the petition unnecessary by agreeing to Mr. Remes’s request and treating the publication as de facto declassification. If they do not, the court should order it.
The government has a real interest in classifying certain information. But it is hard to see a current threat to national security in the released files. (They are certainly an embarrassing portrait of the Bush team’s incompetence in judging whether detainees were legitimately held.)
There is no sense in continuing to classify the files unless the aim is to improperly gag defense lawyers and let the government’s one-sided account of the evidence regarding their clients go unchallenged in public.
This ridiculous dust-up should occasion a thorough re-examination of the whole edifice of secrecy governing habeas cases filed by Gitmo prisoners. Beyond overclassification of documents and foot-dragging in declassification, lawyers are barred from discussing key information with their clients, all information obtained from clients is presumptively classified, and there is broad insistence on secret hearings.
Standing Up for Guest Workers
The suits allege that labor recruiters and employers lured, trapped and abused foreign workers hired through federal guest-worker programs. The government charges that more than 500 Indian men hired by Signal International of Alabama for rebuilding after Hurricane Katrina were confined in squalid camps, illegally charged for lodging and food, and subject to discrimination and abuse. When they complained, the suit says, Signal agents tried to intimidate workers’ families in India. Two lawsuits filed in Hawaii and Washington against other employers make similar charges about 200 men brought from Thailand.
The United States urgently needs to strengthen protections for guest workers who are lied to by recruiters and tied to employers with too much power to exploit them. Today’s shackles are the threats of deportation and financial ruin. They might as well be iron.
A recent agreement by the federal Labor and Homeland Security Departments to work together on immigration and labor enforcement at work sites is encouraging, though there are serious concerns about Homeland Security’s past behavior. Sworn testimony in a separate civil lawsuit against Signal International charged that rather than protecting the Indian workers, immigration officials coached the company on how to silence and deport them.
Workers in the new lawsuits may win some money and be eligible for special visas for trafficking victims. But they are only a handful of workers — both documented and undocumented — stranded in a system that accepts their labor but fails to prevent their exploitation.
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