Message from Team AOC

Since 1972, no Democratic presidential candidate has won the popular vote in Iowa, New Hampshire, and Nevada.

Yesterday, Bernie shattered that record — winning the Nevada caucuses by an incredible margin, all thanks to a movement built by voters of color, working-class families, and young people.

Today, we are so much closer to putting a real progressive in the White House and defeating Donald Trump. But that leader must have a progressive House and Senate if we’re going to pass Medicare for All, a Green New Deal, and more.



Just last week, AOC announced her inaugural slate of Courage to Change Champions. In honor of Bernie’s incredible progressive win, can you split a donation to help ensure he has a slate of progressive allies in Congress?

If you've stored your info with ActBlue Express, we'll process your split contribution between Kara Eastman, Georgette Gómez, Marie Newman, Jessica Cisneros, Cristina Tzintzún Ramirez, Teresa Leger Fernandez, Samelys Lopez, and Courage to Change instantly:



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Cross-Country Comparisons of Wealth

https://weapedagogy.wordpress.com/2020/02/13/cross-country-comparisons-of-wealth/





This continues a sequence of posts on how objective looking statistics conceal hidden values, because a positivist approach prohibits open expression and discussion of value judgments. Previous posts in the sequence are: Lies, Damned Lies, and Statistics, Subjectivity Concealed in Index Numbers, and The Values of a Market Society.

Countries compete with each other on the GDP numbers, without any awareness of the values which are embodied in such competitions. Such comparisons are fraught with many difficulties. We illustrate the difficulties which arise when we try to compare GDP across nations. To being with, let us examine the GDP data measured in Local Currency Units (LCU) for the countries India, Pakistan, Malaysia, Bangladesh, China and Irland from the World Development Indicator (WDI) data set of the World Bank[1] which is presented in Table 1. Firstly, look at the column for the year 1970. The largest GDP is the one for Malaysia which is 13.10 trillion MYR. On the other hand, Irland has the smallest GDP which is 2.26 billion IEP. On this basis, can one say that in 1970 Malaysia had the largest wealth and Irland had the smallest wealth? Well obviously not, because the numbers are not comparable since they are measured in LCU. The currency units are not comparable across countries. We must learn how to translate one local currency unit into another, in order to be able to compare countries according to GDP.

Country LCU 1970 1980 1990 2000 2010

India Trillion INR 0.48 1.50 5.86 21.70 78.00

Pakistan Trillion PKR 0.05 0.24 0.86 3.83 14.80

Malaysia Trillion MYR 13.10 54.30 119.00 356.00 795.00

Bangladesh Trillion BNT 0.04 0.28 1.00 2.37 6.94

China Trillion CNY 0.23 0.46 1.87 9.92 40.20

Ireland Billion IEP 2.26 13.00 36.70 106.00 156.00


Data is take from the World Bank WDI data set.

At first glance, this does not seem like a difficult problem. Why not use the exchange rate between the two currencies? Deeper thinking about this reveals great difficulties. First, the exchange rate is determined by international trade, exports, imports, balance of payments, and Central Bank policies. For these reasons, it can fluctuate substantially. These fluctuations do not relate to the domestic wealth of the countries. For example, going from 2018 to 2019, the dollar appreciated strongly against the rupee going from PKR 100/USD to PKR 150/USD. Measured in dollar terms, the GNP of Pakistan declined by a rather large amount. However, while this change made imports expensive, it boosted exports, and strengthened import substituting industries in the domestic economy. It makes no sense to consider this change as a reduction in the domestic wealth of Pakistan, because resources within Pakistan were not affected by the change in the exchange rates. Yet, unless we standardize the wealth by using common units of measurement, by converting to dollars, how can we compare the wealth of Pakistan with the wealth of any other country?

To compare wealth across countries, we cannot use the LCU – local currency units – because these are arbitrary and unrelated to each other. Yet, any common unit of measurement we use introduces arbitrary subjective biases into the picture, while giving an appearance of objectivity. Different types of benchmarks can be used to convert an LCU into a common unit for cross-country comparisons. However, we can use this arbitrariness to get any desired conclusions, since there are no objective methods to make such comparisons. To illustrate this, we consider a graph of the Chinese GDP from xxxx to xxxx based on WDI data. The top curve in Figure 1 is Chinese GDP in trillions of Yuan. The other curves are conversions to Dollars, gold and Indian Rupees. As can be seen from the Figure 1, each curve shows a different pattern of growth in Chinese GDP.





Which of these four curves represent the objective “true” picture of the growth of the Chinese economy? None of the numbers (not even the LCU picture, as we will show later) is objective truth. In fact, objective truth does not exist in this situation, and the subjective choices we make create the facts via manufactured numbers. If the subjectivity and arbitrariness is openly acknowledged, these numbers may be of some use for different purposes. The real-world context and goals must be specified and the statistical analysis must be adapted to suit the real world purpose. Again this shows the impossibility of separating the statistical analysis from the real-world context. The appearance of objectivity created by numbers allows experts to deceive the public. Someone who wants to portray the growth of China in a bad light could use the Dollar based curve, which shows the least growth. Someone who uses gold valuation of Yen could argue that the GDP of China has gone down in terms of its gold value in the recent past. Those who are not aware of the arbitrary choices made in creating such comparison could easily be decieved by this modern rhetoric based on apparently objective numbers.

Message from Common Dreams

Yesterday, Bernie Sanders won the Nevada caucus with a commanding 46% of the vote—more than double the support of his closest rival.

And as the results came in, MSNBC went into "full-blown freakout” mode.

They described Bernie voters as a “squeaky, angry minority.”

They said Vladimir Putin was the biggest winner of the caucus.

They even compared Sanders’ win to the Nazi invasion of France in 1940—and said four more years of Trump might be better than a Sanders presidency.

The enormous gap between the corporate talking heads on Comcast-owned MSNBC and actual voters has never been so embarrassingly obvious—and as the November election approaches, their bias toward the 1% will become more and more damaging.

Common Dreams exists to counter the dominant corporate media narrative that says change is impossible. Will you donate to help support our ongoing coverage of the 2020 election and the issues that matter to the 99%?

MSNBC might be an extreme example, but it is hardly alone. The corporate media is blind to the needs of everyday Americans because their super-rich owners and executives live in an impenetrable bubble of wealth.

They dismiss broadly popular proposals like Medicare for All and the Green New Deal as “pipe dreams” and “unrealistic.”

Meanwhile, they cheer for America’s forever wars and ignore the massive transfers of wealth caused by 40 years of trickle-down economics and tax cuts for the 1%.

Common Dreams is the antidote to the achingly out of touch voices of the corporate media. But because we have no corporate owners or advertisers, we count on you, our readers, to help us keep reporting the news for the 99%.

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For the whole Common Dreams news team

6 Microbes Saving the Environment

https://www.youtube.com/watch?v=hoiwllrRW34&feature

G20 and COVID-19

by michael roberts



The finance ministers and central bankers of the top 20 economies in the world met this weekend in Riyadh, Saudi Arabia. The G20 finance summit had a lot to ponder. First, there was the coronavirus epidemic. Would it turn into a pandemic? Would the impact of global growth, trade and investment be so severe as to tip the world economy into recession in 2020? Also, what is to be done about curbing and reducing greenhouse gas emissions with the world’s temperatures continuing to rise towards an increase above that set by the last international climate change agreement? Finally, is there nothing to be done about high and rising inequality of wealth and income and continued shift of profits by multi-nationals and rich oligarchs into ‘tax havens’?

The Saudi Arabia G20 communique provided no answers to any of these questions. At Riyadh, IMF managing director, Kristalina Georgieva, having previously announced a reduction in IMF forecasts for global growth to just 2.9%, now added a further reduction due to COVID-19. She reckoned that the epidemic will likely cut 0.1% from global economic growth to 2.8%, the lowest rate since the end of the Great Recession over ten years ago. And it would drag down growth for China’s economy to 5.6% this year from 6.0% previously forecast. “In our current baseline scenario, announced policies are implemented and China’s economy would return to normal in the second quarter. As a result, the impact on the world economy would be relatively minor and short-lived,” she said. But even that could be optimistic. “But we are also looking at more dire scenarios where the spread of the virus continues for longer and more globally, and the growth consequences are more protracted,”

French Finance Minister Bruno Le Maire said in Riyadh. “The question remains open whether it will be a V-shape with a quick recovery of the world economy, or whether it would lead to an L-shape with a persistent slowdown in world growth.” He said the V-shaped scenario was more likely.

As the ministers met, the latest data on COVID-19 suggested that China was getting the epidemic under control. It reported a sharp fall in new deaths and cases of the coronavirus, but world health officials warned it was too early to make predictions about the outbreak as new infections continued to rise in other countries. “Our biggest concern continues to be the potential for COVID-19 to spread in countries with weaker health systems,” WHO chief Tedros Adhanom Ghebreyesus said. The U.N. agency is calling for $675 million to support most vulnerable countries, he said, adding 13 countries in Africa are seen as a priority because of their links to China.

The Chinese authorities put on an optimistic air. Chen Yulu, a deputy governor of the People’s Bank of China, said policymakers had plenty of tools to support the economy, and were confident of winning the war against the epidemic. “We believe that after this epidemic is over, pent-up demand for consumption and investment will be fully released, and China’s economy will rebound swiftly,” Chen told state TV.

Other commentators are less convinced that China can recover quickly from shutting down industry, stopping tourism and keeping millions at home. Zhu Min, a former deputy managing director of the International Monetary Fund, reckoned that COVID-19 could slash US$185 billion off China’s economy in January and February. Dips in tourism and consumer spending could reduce first-quarter growth by three or four percentage points, according to Zhu Min, While online spending – particularly on education and entertainment services – would offset some of the losses, the total drain on the economy over the period could be as much as 1.38 trillion yuan, said Zhu. Based on figures from China’s National Bureau of Statistics, that would represent about 3.3 per cent of the country’s total retail sales in 2019.

Car sales, fell by 20.5 per cent year on year in January, their largest monthly dip in 15 years, according to figures from the China Passenger Car Association. And sales in the first two weeks of February fell 92 per cent from the same period of 2019, mainly due to showroom closures. Over the whole of 2020, the coronavirus epidemic could cost China 1 million car sales, or about 5 per cent of its annual total, the industry group said. “The falling consumption in the first quarter could knock down growth by three or four percentage points,” Zhu said. “We need a strong rebound, and that needs 10 times as much effort."

Chen Wenling, chief economist at the China Centre for International Economic Exchanges, a Beijing-based think tank, said this week that even if national production returned to 80 per cent by the end of February, first-quarter growth would still be less than 4.5 per cent. By comparison, China’s economy grew by 6.4 per cent in the first three months of 2019.

What to do? At Riyadh, Japan’s answer was to call for increased government spending. Finance Minister Taro Aso called on G20 countries with ‘fiscal space’ (like Germany) to ramp up spending to help the global economy. “I told the G20 ministers that the spread of the coronavirus epidemic ... could have a serious effect on the global economy,” Aso pointed out that Japan has deployed fiscal spending quite a bit, so wants other countries with fiscal room to do the same. This is ironic when it is realised that Japan’s permanent annual budget deficits do not appear to have saved the economy from dropping into recession, even before the effects of COVID-19 epidemic hit.

But don’t worry. Aso claimed that Japan continued to recovery moderately as a tight job market and rising household income offset some of the weaknesses in exports and output. “At this stage, I don’t think risks to Japan’s economy have suddenly heightened sharply.” That is wishful thinking.

As I have argued in many posts before, fiscal stimulus is likely to have a negligible effect on achieving economic recovery once a slump sets in and the capitalist sector stops investing and consumers stop spending (as much). That’s because government spending outside of welfare transfers is no more than 10% of most economies’ GDP and government investment (as opposed to spending on public services) is no more than 3% of GDP compared to 15-20% of GDP invested by the capitalist sector. It will take a huge increase in government investment to have an effect.

Moreover, the ability and willingness of governments to resort to such huge fiscal injections are limited. Gavyn Davies in the FT is sceptical: “the next global recession may result in a merging of what has traditionally been viewed as the two separate wings of macro policy, fiscal and monetary. It is a difficult question of political economy whether the central bank or the treasury is better placed to lead the design of an effective policy response in this environment. Japan has been in this position for several years and has so far failed to cut the Gordian knot. Policymakers in the US and Europe should be thinking well in advance about how they can co-operate both internationally and domestically to produce a better outcome. There is no sign of this happening yet."

Perhaps only one country is capable to doing that. Given the size of the state sector and government control in China, a fiscal boost can have much more effect, as it did during the 2008-9 Great Recession, when China continued to grow while virtually every other economy went into a slump or slowed drastically. The Chinese government is ready to spend and invest big time to turn things round once the virus epidemic fades.



Even so, if China’s growth slows sharply for a couple of quarters, that will only add to the woes of the major economies. The latest economic activity indexes for the major advanced capitalist economies make sombre reading. Japan's business activity indexes in February showed a significant fall below the stasis level of 50. Japan's manufacturing PMI dropped to 47.6 in February 2020 from 48.8 in the previous month. The latest reading was the steepest pace of contraction in the manufacturing sector since December 2012. And the services PMI declined to 46.7 in February from 51.0 in the previous month. This was the steepest contraction in the service sector since April 2014, So the overall index fell to 47.0 from 50.1 in January. Again, this was the steepest contraction in private sector activity since April 2014. Japan is clearly in a slump.



Eurozone private sector activity showed a slight improvement in February. The overall 'composite' PMI in the Euro Area increased to 51.6 in February from 51.3 in January. This slight improvement was due mainly to German manufacturing, which is still contracting - but at a slower pace. The Eurozone is still growing, but at a snail's pace.

The UK’s manufacturing activity in February jumped into mildly positive territory, up to 51.9 from 50.0 in January. This was a ten-month high, which is not saying much as the index was over 55 three years ago. The services sector index weakened a little in February but still showed modest growth at 53.3. So the overall 'composite' index was unchanged at 53.3. That means the UK economy is growing but very modestly in the first quarter of 2020.

But the big shocker was the US. The US economic activity indicator went below 50, signalling a contraction in the economy for the first time since the PMI survey began in 2014. The overall 'composite' indicator fell to 49.6 in February from 53.3 in January. The manufacturing index also fell to 50.8 from 51.5 in January. But the real bad news was the fall in the larger services sector, which dropped to 49.4 from 53.4. It seems that the US is joining Japan and the Eurozone in stagnating or even contracting in Q1 2020, and China has yet to report on the full economic impact of the coronavirus outbreak.



Other G20 economies are also on the cusp. Australia’s index was below 50 in February; South Africa too. We await data on the others.

In my last post on the nature and impact of COVID-19, I commented: "it could be a trigger for a new economic slump because the world capitalist economy has slowed to near ‘stall speed’. The US is growing at just 2% a year, Europe and Japan at just 1%; and the major so-called emerging economies of Brazil, Mexico, Turkey, Argentina, South Africa, and Russia are basically static. The huge economies of India and China have also slowed significantly in the last year and if China takes an economic hit from the disruption caused by 2019-nCoV, that could be a tipping point."

Up to now, the world’s stock markets have ignored this risk, convinced that zero or negative interest rates for borrowing and speculating would continue, thanks to the US Federal Reserve, and also in expecting the epidemic to dissipate by the end of this current quarter, so the 'business as usual' can be resumed. But with the outbreak picking up outside China and the likely slow economic recovery by China, the stock fantasists may be overoptimistic. And remember, global corporate profits are stagnant along with business investment, the main cause of the global slowdown.

As for the other issues discussed by the G20 ministers: climate change, inequality and tax havens, forget it. Nothing was agreed. For the first time, the final G20 communique included a reference to climate change “to examine the implications of climate change on financial stability”. It was ok to worry about the impact on financial assets and stock markets, but the US vetoed any mention of the impact on the world economy and people.

Nothing happened on inequality because the European countries could not agree on a common tax strategy on global tax avoidance.

Malcolm X: Thought Provoking Speech

https://www.youtube.com/watch?v=D3KmdJ6_dZE&feature

Roger Waters Protest In London

https://www.youtube.com/watch?v=u48k5y4xjkI&feature