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...from "The Hipcrime Vocab": In which 'escapefromwisconsin' not merely refutes the various claims of The Austerity Mafia, but completely eviscerates them and then outlines - in detail - a whole raft of positive solutions to the present 'crisis'...

I - Where the Workers Are Going.

One of my blog posts that got a bit of attention was this one-What if a Collapse Happened and Nobody Noticed? In that post, I pointed out that waiting for a collapse was a rather foolish proposition because it is already happening. The problem is, people tend not to see it because it does not conform to certain preconceived notions of what a collapse "should" look like-notions fostered by Hollywood rather than by history, including shelves empty of food, dry gas pumps, ATMs unable to dispense cash, and chaos and rioting in the streets.

Also, the unevenness makes it hard to detect. Gasoline was indeed rationed - but only in the aftermath of hurricane Sandy. There are still plenty of suburbs, but total miles driven is slightly down for the first time ever, the average age of cars on the road is at an all-time high, and many of those homes lie empty and deserted. The pumps still dispense gas, but you're paying more for it without a corresponding raise in salary. Some areas are gentrifying and gaining population, whereas others are virtual ghost towns. There is indeed mayhem and civil war in the streets - but it is in Syria. There are indeed deactivated ATMs, but they are in Cyprus. An unknown wag coined the term Detroitification, and I think I will co-opt it. Like a spreading mold, it's coming to a town near you.

We humans are designed by evolution to respond to immediate threats, but slow-motion catastrophes simply do not register or generate any source of alarm. Another of the underlying themes of this blog is to remind people that it is indeed happening, but is subject to what I'll dub the Gibson Principle - the future is already here; it's just not evenly distributed. If you look closely, though, you'll see the subtle signs everywhere. See for example - California water managers despair over snowpack, and FAA to close 149 air traffic towers as budget cuts bite. If every single one of these towers ever reopens, I'll run through the streets naked.

Just as I attempted to gain notoriety by being the first to actually predict collapse, I will now predict the date of the arrival of the post-work society. It is right here, right now. [con't below]

Part I: http://hipcrime.blogspot.com/2013/04/the-post-work-society-is-not-future.html

Part II - The Other Wards of the State: http://hipcrime.blogspot.com/2013/04/the-post-work-society-is-not-future_7.html

Part III - Corporate Welfare: http://hipcrime.blogspot.com/2013/04/part-iii-corporate-welfare-of-course.html

Part IV - A Modest Proposal: http://hipcrime.blogspot.com/2013/04/the-post-work-society-is-not-future_8.html

Part V - But, But, But...: http://hipcrime.blogspot.com/2013/04/the-post-work-society-is-not-future_10.html

Part VI - The Alternative: http://hipcrime.blogspot.com/2013/04/the-post-work-society-is-not-future_997.html

Part VII - Conclusion: http://hipcrime.blogspot.com/2013/04/the-post-work-society-is-not-future_11.html

Part VIII - Charts: http://hipcrime.blogspot.com/2013/04/the-post-work-society-is-not-future_6596.html

Some Additional Notes: http://hipcrime.blogspot.com/2013/04/some-additional-notes.html
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ECRI Recession Call 2013


Updating ECRI Recession Call 2011, ECRI Recession Call 2012...

ECRI Recession Call YouTube
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Are banks too big to jail?

From Salon.com
Wednesday, Jan 23, 2013 10:09 AM PST
PBS Frontline's stunning report shows how the Obama administration undermined the rule of law
By David Sirota

Are banks too big to jail? (Credit: AP/Pablo Martinez Monsivais)

PBS Frontline’s stunning report last night on why the Obama administration has refused to prosecute any Wall Streeter involved in the financial meltdown doesn’t just implicitly indict a political and financial press that utterly abdicated its responsibility to cover such questions. It also — and as importantly — exposes the genuinely radical jurisprudential ideology that Wall Street campaign contributors have baked into America’s “justice” system. Indeed, after watching the piece, you will understand that the word “justice” belongs in quotes thanks to an Obama administration that has made a mockery of the name of a once hallowed executive department.

The Frontline report is titled “The Untouchables,” a tongue-in-cheek salute to how that term once referred to those heroes who fought organized crime and yet now appropriately describes those doing the criminal organizing. Rooted in historical comparison, it contrasts how the Reagan administration prosecuted thousands of bankers after the now-quaint-looking S&L scandal with how the Obama administration betrayed the president’s explicit promise to “hold Wall Street accountable” and refused to prosecute a single banker connected to 2008′s apocalyptic financial meltdown.

The piece by PBS reporter Martin Smith looks at how Obama has driven federal prosecutions of financial crimes down to a two-decade low. It also documents the rampant and calculated mortgage securities fraud perpetrated by the major Wall Street banks, who, not coincidentally, were using some of the profits they made to become among President Obama’s biggest campaign donors.

As we see, that campaign money didn’t just buy massive government bailouts of the banks, a pathetically weak Wall Street “reform” bill or explicit reassurances from Obama’s campaign that the president would refrain from criticizing bankers. Frontline shows it also bought a Too Big to Jail ideology publicly championed by the white-collar defense lawyer turned Obama prosecutor Lanny Breuer.

In the single most damning part of the PBS report, we learn that Breuer, fresh off a lucrative stint defending Moody’s and Halliburton, was appointed by President Obama to head the Justice Department’s criminal enforcement division and was soon sculpting this unprecedented ideology and embedding it into the department’s mission. As Frontline shows, he bragged to his colleagues in the legal profession that as the United States government’s chief criminal prosecutor, he is not primarily worried about lawbreaking in the financial world, but about whether prosecuting financial crime will harm the criminals, their accomplices and their industry.

As this excerpt from Breuer’s 2012 speech to the New York City Bar Association shows, that characterization of Breuer’s declarations is not an overstatement (emphasis added):

To be clear, the decision of whether to indict a corporation, defer prosecution, or decline altogether is not one that I, or anyone in the Criminal Division, take lightly. We are frequently on the receiving end of presentations from defense counsel, CEOs, and economists who argue that the collateral consequences of an indictment would be devastating for their client. In my conference room, over the years, I have heard sober predictions that a company or bank might fail if we indict, that innocent employees could lose their jobs, that entire industries may be affected, and even that global markets will feel the effects.

In reaching every charging decision, we must take into account the effect of an indictment on innocent employees and shareholders, just as we must take into account the nature of the crimes committed and the pervasiveness of the misconduct.

I personally feel that it’s my duty to consider whether individual employees with no responsibility for, or knowledge of, misconduct committed by others in the same company are going to lose their livelihood if we indict the corporation. In large multi-national companies, the jobs of tens of thousands of employees can be at stake. And, in some cases, the health of an industry or the markets are a real factor. Those are the kinds of considerations in white collar crime cases that literally keep me up at night, and which must play a role in responsible enforcement.

Save for the intrepid Marcy Wheeler and now Frontline, this speech received almost no news media attention despite being arguably one of the most important statements to come from a top law enforcement official in recent history.

The highlighted parts of that speech are what is so significant. In them, Breuer is saying that enforcing the law should not be — and no longer is, in the Department of Justice — prosecutors’ chief priority. Rather, he says listening to Wall Street’s economic arguments about the alleged cost of stopping and/or punishing lawbreaking should be.

Before you say that Breuer is just being a kind, compassionate guy, remember that the foundational notion of equal justice under the law is not supposed to be kindness or compassion. It is supposed to be blindness — specifically, blindness to a person’s stature and station, regardless of whether that person is a single human or a corporation. Even though that principle has never been applied perfectly (to say the least), the government is supposed to at minimum rhetorically honor its ethos.

Yet, here you have the Obama administration via its chief prosecutor setting the precedent for exactly the opposite: namely, a government that brags that when it comes to Wall Street, justice is not — and should not — be blind. Instead, as Breuer demands, prosecutors should be “kept up at night” worrying primarily about how an enforcement action will affect bankers who break laws and harm millions of Americans.

That’s not nice or compassionate, that’s a corporate defense attorney paying back the banking industry whose campaign contributions installed his boss in the White House and, consequently, him at the top of the Justice Department.

To understand how revolutionary a notion the Obama administration’s Too Big to Jail is, do the mental exercise of switching out the pinstriped Wall Street criminals and replacing them with your mental image of the leaders of drug cartels. They, too, head multinational businesses involving scores of front companies and, thus, thousands of people who may not even know that they are participating in an illegal enterprise. If Breuer applied the very same Too Big to Jail ideology to those cartel leaders, he would be effectively arguing that we shouldn’t prosecute Pablo Escobars because that would result in an unacceptable loss of wages for those kingpins’ secretaries, messengers and secondary workforces.

If such a hideous legal argument about drug cartels was ever even whispered by any official in Washington, you would expect it to be grounds for congressional hearings, if not full-on impeachment proceedings accusing said official of jeopardizing U.S. national security. And in many cases it would be — except, of course, if the drug dealers in question were somehow connected to the financial industry’s profits. After all, it was Breuer who sculpted the Obama administration’s settlement with megabank HSBC after the bank admitted laundering money for drug cartels and terrorist organizations.

In that decision not to criminally prosecute any HSBC executive who had enabled such laundering, Breuer explicitly cited the same radical Too Big to Jail principle aired in the PBS Frontline report. He said: “Our goal here is not to bring HSBC down, it’s not to cause a systemic effect on the economy, it’s not for people to lose thousands of jobs.”

For pure adversarial and investigative journalism horsepower, the PBS Frontline piece rivals Bill Moyers’ epic PBS indictment of those charlatans who enabled the Bush administration’s march into the Iraq War. It is a must-watch in the truest sense of the overused term because it so powerfully explains how Obama’s campaign motto of “change” meant something entirely different than what many thought. In the case of financial crime, it meant the embrace of a radical Too Big to Jail ideology, one that creates a moral hazard, encourages exactly the same kind of crimes and therefore makes it more likely that another financial meltdown will happen.

UPDATE: A mere hours after the PBS Frontline piece aired, Lanny Breuer just announced he is resigning his post at the Justice Department. Meanwhile, PBS reporter Martin Smith just reported that in response to his report, the Obama White House has decided to block access to Frontline reporters in their future reporting.

David Sirota David Sirota is a nationally syndicated newspaper columnist, magazine journalist and the best-selling author of the books "Hostile Takeover," "The Uprising" and "Back to Our Future." E-mail him at ds@davidsirota.com, follow him on Twitter @davidsirota or visit his website
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YES! Magazine [1] / By Lori Wallach [2]
December 5, 2012  |  

While the election season seized everyone’s attention, government officials and 600 official corporate “advisors” were working behind closed doors to complete the Trans-Pacific Partnership (TPP).

Negotiations have been cloaked in unprecedented secrecy and its proponents have mislabeled the TPP as a “free trade” agreement. In reality, the TPP is about much more than trade. It threatens a stealthy, slow-motion corporate coup d'etat, formalizing and locking in corporate rule over most aspects of our lives.

Thirteen years ago, at the World Trade Organization’s [3] (WTO) Seattle Ministerial, a similar threat in the form of a massive expansion of the powers and scope of the WTO was stopped. 

At the Battle in Seattle, the immovable object called grassroots democracy was victorious [4] over the allegedly unstoppable force of corporate-led globalization. The “Doha Round,” which followed two years later and continued the attempt to expand the WTO’s reign, was alsoderailed [5] thanks to tenacious campaigning [6] by organizations and activists worldwide.

Recalling these historic moments, when people power stopped the dangerous expansion of corporate power, is especially sweet today, when we must again act to safeguard these inspiring victories. All of us who will live with the results must become active to stop the TPP, the latest iteration of corporate coup via “trade” agreement.

What Would the TPP Do?

Eleven countries are now involved—Australia, Brunei Darussalam, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, and the United States—and there is an open invitation for more to join. Think of the TPP as a NAFTA on steroids, which could encompass half of the world.

This is the largest, most potentially damaging agreement since the 1995 establishment of the WTO. And you may never have heard about it before. That’s because the negotiations, which have been underway for three years, are being conducted in extreme secrecy [7]. The public, Congress [8], and the press are locked out, but the 600 official corporate advisors have access to the negotiating texts.

The TPP is the latest strategy by the same gang [9] who got us into the North American Free Trade Agreement (NAFTA) and pushed for the expansion of the WTO: American job-offshorers like GE and Caterpillar; banksters like Citi; pharmaceutical price-gouging giants like Pfizer; oil, gas, and mining multinationals like Chevron and Exxon; and agribusiness monopolists like Cargill and Monsanto. 

They’ve misbranded the TPP as a model 21st-Century “trade” deal to try to sell it with the usual false promises of it expanding exports. But only two of the TPP’s 29 chapters are about “trade.”

Most of the TPP’s proposed provisions instead comprise a corporate power grab [10]. The TPP would includeextreme protections [11] for foreign investors, which would help corporations offshore American jobs to low-wage countries. These terms would require governments to provide foreign investors a guaranteed “minimum standard of treatment” when they relocate, including special privileges and rights that domestic firms and investors do not enjoy. Foreign firms—or foreign subsidiaries of U.S. firms—could extract unlimited amounts of taxpayer money as compensation when investors claim that U.S. government actions undermine a corporation’s expected future profits. Seriously. [12]

Equal Status for Corporations and Country

The investor rules would elevate individual foreign firms and investors to the same status as the sovereign nations that would be party to the TPP. Corporations and investors would be empowered to privately enforce the agreement by suing a signatory government before the World Bank and other foreign tribunals. In this “investor-state dispute resolution,” three private-sector lawyers, who rotate between suing governments and acting as “judges,” could order governments to pay large amounts of our tax dollars to investors who do not want to follow the same laws as domestic firms. 

Under similar, if less grandiose, provisions in NAFTA, investors have been paid hundreds of millions of dollars in cases attacking bans on toxic chemicals, land use rules, and more. Phillip Morris Asia has attacked  [13]Australia’s cigarette plain packing law—which requires that health warnings be included in cigarette packaging—before such a tribunal. Australia announced [14] in April that it will not agree to be bound to the investor-state regime in the TPP. Negotiators from the United States have declared that all TPP nations must submit to this regime.

Either by winning an investor-state dispute or by preemptively putting a chill on government actions to address critical public needs, the TPP’s investor rights would impose an outer bound of the possible for communities and countries setting policies related to health, the environment, water, or other natural resources. There is almost no progressive movement or campaign whose goals are not threatened, while vast swaths of public-interest policy achieved through decades of struggle are poised to be undermined as these attacks proliferate.

Progressive Achievements Rolled Back

The TPP would also ban existing and future “Buy Local” and “Buy American” [15] procurement policies. These are rules that direct federal and state governments to reinvest our tax dollars to create American jobs by buying domestically made cars, steel, food, and more, and by giving contracts to local construction firms or call centers firms. 

The TPP also would expose to attack green and sweat-free procurement rules that specify that only recycled paper, non-old-growth wood products, renewable-source energy, or products made under fair labor standards can be purchased with government funds. Under these terms, democracies would no longer be able to decide that we want to invest our tax dollars to create jobs at home or to create markets for green energy or morally produced goods. Instead, the TPP would require our governments to send our money offshore [16] and spend it with firms trashing human rights and the environment.

The TPP would limit financial regulation [17] by forbidding bans on risky derivatives and other dangerous financial products, as well as the use of capital controls  [18]to counter wild surges of speculative investments in and out of countries, which destabilize the global economy. The massive financial firms that caused the financial crisis could use these terms to roll back the new financial regulations implemented in the U.S. and around the world.

As far as health care goes, the TPP would grant new monopoly privileges to Big Pharma that would jack up medicine prices and cut consumers’ access to life-saving medicines [19] in the developing countries involved in the TPP. There is a proposal to allow pharmaceutical firms to challenge the pricing decisions of cost-saving drug formularies, which are used by developing countries and, increasingly, by the United States, to bargain for better prices with drug firms. 

One chapter would even attack Internet freedom by imposing through the backdoor damaging aspects of the Stop Online Piracy Act (SOPA) [20], which citizen activism derailed in the U.S. Congress.

A Trade Justice Coalition Emerges (Again)

That’s only the tip of the iceberg. [21] But it’s precisely the extreme nature of the TPP corporate wish list that is its greatest vulnerability—and our greatest opportunity. The 1-percenter TPP agenda would harm most of us in the United States and in the other countries involved. It can only survive if left shrouded in darkness. Citizen activists in many of the TPP countries are building an inspiring global movement implementing the “Dracula strategy” [7] to drag the TPP into the sunshine so those who will have to live with its consequences can know what’s coming and take action.

Civil society groups representing millions of members worldwide [22] have joined together in raising the alarm. And, given the stunning audacity of the TPP’s prospective corporate power grab, activism is reaching beyond the environmental [23]consumer [24], labor [25], family farm, and access to medicines [26] groups who have been the mainstay of movements against past “trade” agreement attacks. Amnesty International, the American Civil Liberties Union, Avaaz, Consumers International, tobacco controls groups, and many other organizations have become involved [27]

From the United States to Australia [28] and even to Malaysia [29] (where any public gathering the authorities consider to be a protest is illegal and participants are subject to arrest), protests are growing. Outside each posh resort where TPP negotiators meet behind closed doors, citizens gather to chant “Flush the TPP,” [30]“Release the Text,” and “Peoples’ Needs, Not Corporate Greed!”

At the next round of negotiations, which will be held in early December in Auckland, New Zealand, negotiators hope to finish several chapters of the deal, so they can sign the whole thing in the first quarter of 2013. 

Each of us can make a difference [31]. Given the threats that the TPP poses to a stunningly broad range of fundamental rights and public needs, this is a fight—like the Battle in Seattle in 1999 [32]—that can unite a powerful coalition of movements. And it is people power that will be victorious against the TPP corporate power grab, if you help spread the word.


Lori Wallach wrote this article for YES! Magazine [33], a national, nonprofit media organization that fuses powerful ideas with practical actions. A Harvard-trained lawyer, Ms. Wallach has promoted the public interest regarding globalization and international commercial agreements in every forum: Congress and foreign parliaments, the courts, government agencies, and the media. She is director of Public Citizen [34]’s Global Trade Watch.

Interested?

See more stories tagged with:
tpp [38],
trade [39],

Links:
[1] http://www.yesmagazine.org
[2] http://www.alternet.org/authors/lori-wallach-0
[3] http://citizen.org/Page.aspx?pid=758
[4] http://www.citizen.org/Page.aspx?pid=758
[5] http://www.citizen.org/documents/owinfs-press-release-doha-text-april-21-2011.pdf
[6] http://www.citizen.org/trade/article_redirect.cfm?ID=1582
[7] http://youtu.be/cWgtygGCbfU
[8] http://www.wyden.senate.gov/news/blog/post/iycmi-wyden-statement-introducing-congressional-oversight-over-trade-negotiations-act
[9] http://www.tppcoalition.org/documents/Members%20of%20the%20Coalition%20(7-2011).pdf
[10] http://youtu.be/9SOokUdKYcM
[11] http://www.citizen.org/documents/Leaked-TPP-Investment-Analysis.pdf
[12] http://www.citizen.org/documents/investor-state-chart.pdf
[13] http://kluwerarbitrationblog.com/blog/2012/01/29/investor-state-arbitration-and-plain-packaging-the-new-%E2%80%98anti-tobacco-movement%E2%80%99-has-begun/
[14] http://www.sierraclub.ca/en/main-page/multiple-countries-rejecting-investor-state-dispute-settlement
[15] http://donnaedwards.house.gov/uploads/Buy%20American%20TPP%20Ltr%20to%20Admin.pdf
[16] http://www.citizen.org/documents/TPP-Buy-American.pdf
[17] http://www.citizen.org/documents/memo-korea-fta-capital-controls-2-24-12.pdf
[18] http://democrats.financialservices.house.gov/FinancialSvcsDemMedia/file/press/112/Frank_%20Levin%20letter%20to%20Geithner%20RE%20capital%20controls_%20May%2023_%2020120003.pdf
[19] http://www.citizen.org/TPPA
[20] https://www.eff.org/deeplinks/2012/08/whats-wrong-tpp
[21] http://citizen.org/tpp
[22] http://www.ituc-csi.org/IMG/pdf/Final-Official_ITUC_TransPacific_Partnership_Labor_Chapter.pdf
[23] http://www.sierraclub.org/trade/trans-pacific-partnership-agreement.aspx
[24] http://www.citizen.org/TPP
[25] http://www.cwa-union.org/issues/entry/c/trans-pacific_free_trade_agreement/#.UI8FPobn-So
[26] http://www.doctorswithoutborders.org/press/2011/MSF-TPP-Issue-Brief.pdf
[27] http://www.citizen.org/tpp#moc
[28] http://www.citizen.org/TPFTA-melbourne
[29] http://www.citizen.org/documents/Pictures%20from%20Malaysia%20protest.pdf
[30] http://www.citizen.org/trans-pacific-partnership-leesburg-round-14#photos
[31] http://www.citizen.org/tppaction
[32] http://www.yesmagazine.org/issues/the-wto-in-seattle/wto-1999-in-seattle
[33] http://www.yesmagazine.org/
[34] http://www.citizen.org/
[35] http://www.yesmagazine.org/new-economy/treaty-like-its-1999
[36] http://www.yesmagazine.org/new-economy/the-tricks-of-the-trade-deals
[37] http://www.yesmagazine.org/issues/its-your-body/wto-votes-against-labeling-meat
[38] http://www.alternet.org/tags/tpp
[39] http://www.alternet.org/tags/trade-0
[40] http://www.alternet.org/tags/corporations
[41] http://www.alternet.org/%2Bnew_src%2B

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ECRI Recession Call 2012 May Verify, After all?


U.S. Economy at Increasing Risk of New Recession as Eurozone Enters 2cd Year of its 2cd Recession of the Global Financial Trainwreck, Sandy Hurts & Fiscal Cliff Looms

Euro Area Business Cycle Dating Committee Pegs the Start of Euro's 2cd Recession of the 2007-2012 Global Financial Trainwreck to Q3 2011
The European counterpart to the U.S.'s Business Cycle Dating Committee has affirmed what we all knew to be true long ago: The Eurozone slid back into recession well over a year ago now, without ever coming anything close to a full recovery from the extraordinarily deep recession of 2007-09, making this entire event ever so clearly what most would consider to be a Depression.

Euro Area Business Cycle Dating Committee:
Euro Area Business Cycle Peaked in Third Quarter of 2011,
Has Been in Recession Since
The Euro Area Business Cycle Dating Committee of the Centre for Economic Policy Research (CEPR) met in Paris on 10 September 2012 and continued its deliberations by e-mail exchange throughout September and early October 2012. The Committee’s task is to establish the chronology of recessions and expansions of the 11 original euro-area member countries plus Greece for 1970-1998, and of the euro area as a whole from 1999 onwards...

This document concerns the euro area in 2012, which consists of 17 member countries since Estonia joined on 1 January 2011. The Committee has determined that a peak in economic activity occurred in the third quarter of 2011. This follows the trough in economic activity in the euro area in the second quarter of 2009, as had been determined earlier for the then 16 member euro area.

The third quarter of 2011 thus marks the end of the expansion that began in the second quarter of 2009 and the beginning of a euro-area recession. 1 This recovery lasted 10 quarters. The total increase in output from trough to peak was 4.03 percent...

It is important to note that the expansion that ended in the third quarter of 2011 was not strong enough to bring euro-area GDP back to its pre-financial crisis level. At its 2011Q3 peak, GDP in the euro area was still roughly 2% below its previous 2008Q1 peak... (READ MORE...)


ECRI's Lakshman Achuthan Reaffirms ECRI Recession Call 2012, Yet Again


ECRI
The Tell-Tale Chart

Following our September 2011 recession call, we clarified its likely timing in December 2011. Based on the historical lead times of ECRI’s leading indexes, we concluded that, if it didn’t start in the first quarter of 2012, it was very likely to begin by mid-year.

But we also made it clear at the time that you wouldn’t know whether or not we were wrong until the end of 2012. And so it’s interesting to note the rush to judgment by a number of analysts, already asserting that we were wrong.

So, with about a month to go before year-end, what do the hard data tell us about where we are in the business cycle? Reviewing the indicators used to officially decide U.S. recession dates, it looks like the recession began around July 2012. This is because, in retrospect, three of those four coincident indicators – the broad measures of production, income, employment and sales – saw their high points in July (vertical red line in chart), with only employment still rising.



U.S. Recession/Recovery Indicators Also Have Never Fully Recovered
Like Europe, the recovery in the states has so far not come close to fully recovering what it lost from the Great Recession. With the exception of GDP, which frankly is not as good a recession/expansion indicator as one might think, these four other primary economic data points clearly show how far down we went and how much ground is left to cover. (Image credit: AdvisorPerspectives.com)

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There Is No Nobel Prize in Economics

AlterNet [1] / By Yasha Levine [2]

October 12, 2012  |  

It’s Nobel Prize season again. News reports are coming out each day sharing the name of the illustrious winner of the various categories — Science, Literature, etc. But there’s one of the prizes that’s a little different. Well, that’s putting it lightly… you see, the Nobel Prize in Economics is not a real Nobel. It wasn’t created by Alfred Nobel. It’s not even called a “Nobel Prize,” no matter what the press reports say.

The five real Nobel Prizes—physics, chemistry, literature, peace, and medicine/physiology—were set up in the will left by the dynamite magnate when he died in 1895. The economics prize is a bit different. It was created by Sweden’s Central Bank in 1969, nearly 75 years later. The award’s real name is the “Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel.” It was not established by Nobel, but supposedly in memory of Nobel. It’s a ruse and a PR trick, and I mean that literally. And it was done completely against the wishes of the Nobel family.

Sweden’s Central Bank quietly snuck it in with all the other Nobel Prizes to give free-market economics for the 1% credibility. One of the Federal Reserve banks explained it succinctly [3], “Few realize, especially outside of economists, that the prize in economics is not an “official” Nobel. . . . The award for economics came almost 70 years later—bootstrapped to the Nobel in 1968 as a bit of a marketing ploy to celebrate the Bank of Sweden’s 300th anniversary.” Yes, you read that right: “a marketing ploy.”

“The Economics Prize has nestled itself in and is awarded as if it were a Nobel Prize. But it’s a PR coup by economists to improve their reputation,” Nobel’s great great nephew Peter Nobel told AFP in 2005 [4], adding that “It’s most often awarded to stock market speculators .... There is nothing to indicate that [Alfred Nobel] would have wanted such a prize.”

Members of the Nobel family are among the harshest, most persistent critics of the economics prize, and members of the family have repeatedly called for the prize to be abolished or renamed. In 2001, on the 100th anniversery of the Nobel Prizes, four family members published a letter in the Swedish paper Svenska Dagbladet, arguing that the economics prize degrades and cheapens the real Nobel Prizes. They aren’t the only ones.

Scientists never had much respect for the new economic Nobel prize. In fact, a scientist who headed Nixon’s Science Advisory Committee in 1969, was shocked to learn that economists were even allowed on stage to accept their award with the real Nobel laureates. He was incredulous: “You mean they sat on the platform with you?”

That hatred continues to simmer below the surface, and periodically breaks through and makes itself known.  Most recently, in 2004, three prominent Swedish scientists and members of the Nobel committee published an open letter [5] in a Swedish newspaper savaging the fraudulent “scientific” credentials of the Swedish Central Bank Prize in Economics. “The economics prize diminishes the value of the other Nobel prizes. If the prize is to be kept, it must be broadened in scope and be disassociated with Nobel,” they wrote in the letter, arguing that achievements of most of the economists who win the prize are so abstract and disconnected from the real world as to utterly meaningless.

The question is: Why would a prize that draws so much hatred and negativity from the scientific community be added to the Nobel roster so late in the game? And why economics?

To answer that question we have to go back to Sweden in the 1960s.

Around the time the prize was created, Sweden’s banking and business interests were busy trying to ram through various so-called "free-market" economic reforms. Their big objective at the time was to loosen political oversight and control over the country’s central bank.

According to Philip Mirowski, a professor at the University of Notre Dame who specializes [6] in the history of economics, the “Bank of Sweden was trying to become more independent of democratic accountability in the late 60s, and there was a big political dispute in Sweden as to whether the bank could have effective political independence. In order to support that position, the bank needed to claim that it had a kind of scientific credibility that was not grounded in political support.”

Promoters of central bank independence couched their arguments in the obscure language of neoclassical economic theory of market efficiency. The problem was that few people in Sweden took their neoclassical babble very seriously, and saw their plan for central bank independence for what it was: an attempt to transfer control over economic matters from democratically elected government and place into the hands of big business interests, giving them a free hand in running Sweden’s economy without pesky interference from labor unions, voters and elected officials.

And that’s where the Swedish Central Bank Prize in Economic Sciences came in.

The details of how the deal went down are still very murky. What is known is that in 1969 Sweden’s central bank used the pretense of its 300th anniversary to push through an  independent prize in “economic science” in memory of Alfred Nobel, and closely link it with the original Nobel Prize awards. The name was a bit longer, the medals looked a little different and the award money did not come from Nobel, but in every other way it was hard to tell the two apart. To ensure the prize would be awarded to the right economists, the bank managed to install a rightwing Swedish economist named Assar Lindbeck, who had ties to University of Chicago, to oversee the awards committee and keep him there for more than three decades. (Lindbeck’s famous free-market oneliner [7] is:  “In many cases, rent control appears to be the most efficient technique presently known to destroy a city — except for bombing.”)

For the first few years, the Swedish Central Bank Prize in Economics went to fairly mainstream and maybe even semi-respectable economists. But after establishing the award as credible and serious, the prizes took a hard turn to the right.

Over the next decade, the prize was awarded to the most fanatical supporters of theories that concentrated wealth among the top 1% of industrialized society of our time.

In 1974, five years after the prize was first created, it was awarded to Friedrich Hayek, one the leading "laissez-faire" -- enrich the rich -- economists of the 20th century and the godfather of neoclassical economics. Milton Friedman, who was at the University of Chicago with Hayek, was not far behind. He won the prize just two years later, in 1976.

Both Hayek and Friedman were huge supporters of the political independence of central banks. In fact, they built their careers on bashing government intervention in economic matters. Hayek developed a whole business cycle theory that blamed government and government-controlled banking systems  for all economic ills. He also equated all government intervention will inevitably lead to totalitarianism. Friedman with a whole new subsection of neoclassical economics called “Monetarism” that had a scientific formula worked out, specifying exactly how much money central bankers needed to keep floating around in the economy to keep inflation low and unemployment high enough to keep big business happy. No democratic control over banking policies needed, just let the free-markets do its thing!  The Swedish central bankers couldn’t get better spokesmen for their cause.

But Hayek and Friedman’s usefulness went way beyond Sweden.

At the time of the prizes, neoclassical economics were not fully accepted by the media and political establishment. But the Nobel Prize changed all that.

What started as a project to help the Bank of Sweden achieve political independence, ended up boosting the credibility of the most regressive strains of free-market economics, and paving the way for widespread acceptance of libertarian ideology.

Take Hayek: Before he won the award, it looked like Hayek was washed up. His career as an economist was essentially over. He was considered a quack and fraud by contemporary economists, he had spent the 50s and 60s in academic obscurity, preaching the gospel of free markets and economic darwinism while on the payroll of ultra-rightwing American billionaires. Hayek had powerful backers, but was out on the fringes of academic credibility.

But that all changed as soon as he won the prize in 1974. All of a sudden his ideas were being talked about. Hayek was a celebrity. He appeared as a star guest on NBC’s Meet the Press, newspapers across the country printed his photographs and treated his economic mumblings about the need to have high unemployment in order to pay off past inflation sins as if they were divine revelations. His Road to Serfdom hit the best-seller list. Margret Thatcher was waving around his books in public, saying “this is what we believe.” He was back on top like never before, and it was all because of the fake Nobel Prize created by Sweden’s Central Bank.

Billionaire Charles Koch brought Hayek out for an extended victory tour of the United States, and had Hayek spend the summer as a resident scholar at his Institute for Humane Studies. Charles, a shrewd businessman, quickly put the old man to good use, tapping Hayek’s mainstream cred to set up and underwrite Cato Institute in 1974 (it was called the Charles Koch Foundation until 1977), a libertarian thinktank based on Hayek’s ideas. Even today, Cato Institute pays homage [8] to the Swedish Central Bank Prize’s role in the mainstreaming of Hayek’s ideas and Hayek’s influence on the outfit:

The first libertarian to receive the Nobel Prize was F.A. Hayek in 1974. In the years leading up to the prize announcement, Hayek had reached a professional and personal nadir. Unable to maintain an appointment in the United States, Hayek had returned to Austria to take up a position at the University of Salzburg, Austria. With the announcement of the prize in 1974, however, Hayek’s work, and the fortune of Austrian economics, took a remarkable turn.

Hayek’s influence on Cato is profound. Two of Cato’s first books were by Hayek: A Tiger by the Tail: The Keynesian Legacy of Inflation & Unemployment and Monetary Policy: Government as Generator of the “Business Cycle.” Perhaps more than any other intellectual in the twentieth century, Hayek has inspired Cato and its researchers to develop policies that ensure a free society. When Cato moved into its current location in 1992, its auditorium was named in Hayek’s honor.

Friedman’s Nobel Prize had a similar impact. After getting the prize in 1976, Friedman wrote a best-seller, got his own 10-part PBS series Free to Choose and became President Ronald Reagan’s economic advisor, where he had a chance to put the society-crushing policies he developed in Chile under Pinochet.

Friedman would spend the rest of his time denying it, but he was deeply involved and invested in the Pinochet’s totalitarian-corporate  economic experiment. Chilean economist Orlando Letelier published an article inThe Nation in 1976 outing Milton Friedman as the  “intellectual architect [9] and unofficial adviser for the team of economists now running the Chilean economy” on behalf of foreign corporations. A month later Letelier was assassinated in D.C. by Chilean secret police using a car bomb.

Friedman’s monetary theory was used by Federal Reserve Bank Chairman Paul Volcker to restrict the money supply, plunging American into a deep recession, doubling the unemployment rate and had the added bonus of getting Reagan elected President. . . . And Hayek and Friedman were just the beginning.

For instance, in 1997 two economists won an award for their derivative risk models that minimized risk, just before the derivatives would explode in the 2000s real estate bubble.

The award was shared by economists Robert Merton and Myron Scholes for their work in figuring out how to value derivatives so as to minimize risk. The two economists used their Nobel-worthy economic models to run “the world’s biggest hedge fund,” which was called Long Term Capital Management (LTCM). And the fund really lived up to its name. Nine months after winning the Swedish Central Bank Prize in Economics, LTCM went belly-up, racking up over $1 billion in losses over a period of just two days. It was of course bailed out by then-Federal Reserve Chairman Alan Greenspan, who considered LTCM “too big to fail.”

Then there’s Vernon Smith. In 2002, Vernon Smith, adored and funded by Libertarians like Charles Koch, won the “Nobel” — his patron looked at the money he spent funding Smith’s academic career as a good investment, saying simply: “The Koch Foundation’s gift was an excellent investment.”

Smith’s research basically entailed setting up theoretical “wind tunnels” to test how, for example, the privatizations of markets would respond in various conditions all in a way that has nothing to do with reality.It will take a brave act to bring this sham to the attention of the public.

One year, one of the prize winners will have to speak out, and explain this ruse to the public as he wins the award.

See more stories tagged with:

Links:
[1] http://www.alternet.org
[2] http://www.alternet.org/authors/yasha-levine
[3] http://www.minneapolisfed.org/publications_papers/pub_display.cfm?id=3547
[4] http://www.thelocal.se/2173/20050928/
[5] https://www.evernote.com/shard/s1/sh/ebbca597-42ab-4e8a-ba11-1120c53d3769/c761a720b35084f1dec0939d4c90f7d5?noteKey=c761a720b35084f1dec0939d4c90f7d5&noteGuid=ebbca597-42ab-4e8a-ba11-1120c53d3769
[6] http://www.youtube.com/watch?v=dLtEo8lplwg]
[7] http://www.fff.org/freedom/fd0606d.asp
[8] http://www.cato.org/people/nobel-index.html
[9] http://www.evernote.com/shard/s1/sh/21eebc85-ff4e-445b-b53d-13bf46c0be34/8261400fe7fe2823dc60c191f95591f2
[10] http://www.alternet.org/tags/nobel-prize
[11] http://www.alternet.org/tags/economics-0
[12] http://www.alternet.org/tags/nobel-family
[13] http://www.alternet.org/tags/milton-friedman
[14] http://www.alternet.org/tags/vernon-smith
[15] http://www.alternet.org/%2Bnew_src%2B

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Tuesday, October 16, 2012


Fascinating article on the BBC about a modern incidence of corvee labor – Uzbekistan requires its citizens to handpick cotton in the fields for free.
Uzbekistan is one of the world's main producers of cotton and the crop is a mainstay of its economy. The government controls production and enforces Soviet-style quotas to get the harvest off the fields as quickly as possible.

A history of using child and forced labour at harvest time has led to a number of retailers - including H&M, Marks and Spencer and Tesco - to pledge to source their cotton from elsewhere.

In response, earlier this year Uzbekistan's Prime Minister Shavkat Mirziyayev issued a decree banning children from working in the cotton fields. Yet many adults, including teachers, cleaners and office workers, are still forced to return to the land during October and November.

This year, like last year, medical staff have been ordered to join them. There are reports of patients in towns being turned away because their doctor is "in cotton".
Doctors and nurses forced to pick cotton (BBC)

Wikipedia entry on corvee labor is instructive.

I first heard about Uzbekistan’s forcing its citizens to pick cotton because it was used as a prime example of extractive institutions on the Why Nations Fail blog:
Government-imposed prices at which you’re forced to sell; coerced labor; expropriation of assets by the intelligence services and the president’s family. These are just some of the examples of what we call extractive economic institutions — economic institutions designed to extract resources from the population and businesses for the benefit of a narrow elite.

Like almost all nations that are poor, Uzbekistan fails because its people operate under extractive economic institutions, which provide few incentives for investment or technological ingenuity, and force people to engage in activities that they do not wish or are not well-suited to (such as farmers being forced to grow crops that they don’t want and children being forced to pick cotton rather than learn in school).

And the important point is this: these extractive economic institutions are not there by mistake. They have been designed this way for the benefit of the elite. There was no coerced child labor in Uzbekistan when cotton was produced by state-owned firms. This economic institution was introduced when Karimov and his cronies realized that at the prices they were imposing on farmers, cotton production was going to plummet.
Extractive institutions in action: Uzbekistan

This is especially ironic as cotton-picking was a major driver of slavery and indentured servitude in the antebellum United States. The mechanical cotton picker sent millions of former slaves and sharecroppers to northern industrial cities just in time for deindustrialization. Northern cities became ghettos as whites got in their automobiles and decamped to seperatist enclaves in the corn fields surrounding urban areas while America's formerly world-class cities to deteriorated to third-world levels. From these enclaves they could wage a war on the very idea of collective purpose and civil government.

Just as no old and obsolete technology has never truly vanished, it seems like no economic system has ever truly died. It’s almost a guarantee that somewhere on earth today you will be able to find “extinct” economic forms - corvee labor, debt bondage, indentured servitude, chattel slavery, plantations, sharecropping, etc., if you look hard enough. It’s a corrective to assuming that our mutual-obligation system of wage slavery (fixed amount of time per day in exchange for lump sum of currency and subsidized benefits) that we call a “job” is a permanent feature of the human condition.

I and others have noticed a dramatic return to unfree and unpaid labor all around the world as our economic system deteriorates. First there is the vast amount of prison labor used today, including in the United States, the world's jailer. Then there are the “unpaid internships” which keep all but the children of the rich who are subsidized by their families from the most desirable professional jobs. Then there are the “welfare to work” schemes which make the unemployed work essentially for free in lieu of welfare benefits. Then there is the vast amount of overtime “expected” of terrified salaried workers lest they get laid off in the next corporate purge.

Today’s college graduates are often referred to as “indentured servants” because they are forced to fork over large parts of their salaries in wage garnishments to college debt collection agencies in return for the “work chit” of a degree. Tell me materially how this is different from traditional indentured servitude, where people were fined heavily for being transported to America, and then forced to work to pay back their sponsors for free. And of course, the laws protecting debtors have been stripped away, returning to an almost eighteenth-century mode of unforgivable debt and no limits to what can be done to collect it. We’ve even seen the backdoor return of debtor’s prisons. Others have noted the breakdown of what’s commonly referred to as “the rule of law” in financial matters and noted the creation of separate rules and standards of conduct for the rich as opposed to ordinary people. Of course we are all free to "choose" our jobs, just as we are free to be starving and homeless as those jobs disappear.

All around the world we are regressing. Welcome to capitalist “progress.” Uzbekistan is the future.


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Friday, October 5, 2012

So the news today is all about how job creation has picked up. In fact I saw two job postings today, one at my local cafe and one outside Toys R'Us. Happy days are here again, right? Jeff Madrick points out the inconvenient truth: all we're creating is bad jobs.
The reason that the economic recovery is coinciding with middle class decline is increasingly clear. America is creating jobs, but they are bad jobs: retailing, food preparation, and table waiting, for example—in other words, jobs that don’t pay much. Economists like David Autor of MIT and Larry Mishel of the Economic Policy Institute have been talking for years about the hollowing out of middle-level jobs in offices and manufacturing.

Annette Bernhardt of the National Employment Law Project did the hard empirical work recently and found that most of the job losses from 2008 to early 2010 were in the middle-income category, jobs that pay from roughly $14 to $21 an hour. What is disturbing is that in the job turnaround since then, only one in five such jobs came back. Instead, very low-end jobs, paying $7.70 to $13.80 an hour, accounted for most new employment. This is a stark continuation of the hollowing out.

The mystery, then, is not what is going on in the economy but what to do about it. And neither candidate has a satisfactory plan. Romney is offering a repeat of the George W. Bush approach, which involves mostly large tax cuts for upper income “job creators.” Even before the devastation of 2008, job growth was slower under Bush than under any other postwar president.
Our Crisis Of Bad Jobs (New York Review Of Books)

But a job's a job right? As a comment to this article put it, "The job, along with what is our much of our present politics are creations of the industrial era; to look at the jobs that have been “created” in America in the last four decades and then to make part of you political platform the “need for more jobs” – both Dems and Reps cry! – is dumbfounding. We need a lot better thinking, but it shows how comfortable we become with our shackles, especially if they come with a little padding...People didn't have jobs prior to industrialism, they were farmers, shopkeepers, hunters. The “job” which your piece is about, not work, is an industrial creation."

UPDATE - Via The Guardian:
Buried in the Friday's jobs report is evidence that a disturbing trend continues: the creation of more part-time jobs, many of them low-wage, taking the place of solid middle-class careers. Positions in sectors like manufacturing continued to decline last month, replaced by new jobs in the healthcare, warehousing and retail industries. A lot of these jobs don't allow workers to rack up enough hours to earn healthcare benefits – let alone break out of poverty.

 The key data in the new report can be found in a table called "A-8". It shows that more workers are in stuck in part-time jobs because their hours were cut back or they're unable to find full-time positions. The number of workers in this category shot up to 8.5 million in September – an increase of 581,000 from last month. This month's figure is nearly double what it was in September 2007, the eve of the recession.

It's distressing to think that after 20th-century labor struggles won the battle for the 40-hour work week, the 21st-century struggle is a fight for enough working hours to make a living wage. That's not what I'd call progress.

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Welcome visitors, members one and all! I hope you find this community as informative, useful and entertaining as we do!

If you haven't done so already, please take a moment to review the couple of guidelines we have in place by clicking on the community profile. From the main profile page you can also familiarize yourself with the many websites and resources members have recommended since this community started. Some of our personal favorites include Calculated Risk, Economic Cycle Research Institute & Jeffrey Frankel's Blog.

You may also want to participate in our LiveJournal Global Economic Poll - "The Economy Around The World: A Real Live Journal Global Poll" .

As the economies around the world teeter once again, with many already having slipped into "Growth Recession" if not outright technical recession, and with many more looking at the real possibility of outright recession in 2012 and 2013, "the recession" in 2011 was seeming mild by way of comparison to what could be lurking just around the corner.

Will "Recession 2012" look as bad as "The Great Recession" of 2007-2009? Could we skirt by this time without a full-on economic death spiral? Will the economy get better by election day? Or will Obama lose the election for economic reasons? (Presidential elections are usually won or lost for base economic reasons in this country, after all).

Stay tuned. I think it's fair to say that it is going to continue to be a pretty wild ride for the world economy for some time to come. Recession 2013? Recession 2014? Did the Great Recession ever really end in the first place? Many think not!









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What is the
definition of recession?


According to the laypress, and even many economists, a recession is defined as two consecutive quarters of negative GDP (Gross Domestic Product). While this very simple definition is usually the case during recessions, it is not always so.

Most experts now acknowledge that GDP alone is an insufficient determinant of recession.

For one, GDP is often revised several quarters - even years - later, as more complete information becomes available that changes the components of the earlier, initial GDP estimates in what can be very substantial ways.

For another, not all serious downturns exact as serious a toll on GDP. Often, the decline is much more pronounced in GDI (Gross Domestic Income) and/or employment. If the income or employment of a nation is undergoing a pronounced, pervasive and prolonged decline even if for whatever various reasons its GDP may be holding up, is it not foolish to deny that a recession is underway?

For these reasons and others, the NBER (National Bureau of Economic Research), the official arbiter of recessions and expansions in the United States, determines whether or not the US has fallen into recession using a much more holistic approach.

As the NBER explains it:
Q: The financial press often states the definition of a recession as two consecutive quarters of decline in real GDP. How does that relate to the NBER's recession dating procedure?

A:
Most of the recessions identified by our procedures do consist of two or more quarters of declining real GDP, but not all of them. In 2001, for example, the recession did not include two consecutive quarters of decline in real GDP. In the recession beginning in December 2007 and ending in June 2009, real GDP declined in the first, third, and fourth quarters of 2008 and in the first quarter of 2009. The committee places real Gross Domestic Income on an equal footing with real GDP; real GDI declined for six consecutive quarters in the recent recession.

Q: Why doesn't the committee accept the two-quarter definition?

A:
The committee's procedure for identifying turning points differs from the two-quarter rule in a number of ways. First, we do not identify economic activity solely with real GDP and real GDI, but use a range of other indicators as well. Second, we place considerable emphasis on monthly indicators in arriving at a monthly chronology. Third, we consider the depth of the decline in economic activity. Recall that our definition includes the phrase, "a significant decline in activity." Fourth, in examining the behavior of domestic production, we consider not only the conventional product-side GDP estimates, but also the conceptually equivalent income-side GDI estimates. The differences between these two sets of estimates were particularly evident in the recessions of 2001 and 2007-2009.

Q: How does the committee weight employment in determining the dates of peaks and troughs?

A.
In the 2007-2009 recession, the central indicators–real GDP and real GDI–gave mixed signals about the peak date and a clear signal about the trough date. The peak date at the end of 2007 coincided with the peak in employment. We designated June 2009 as the trough, six months before the trough in employment, which is consistent with earlier trough dates in the NBER business-cycle chronology. In the 2001 recession, we found a clear signal in employment and a mixed one in the various measures of output. Consequently, we picked the peak month based on the clear signal in employment, as well as our consideration of output and other measures. In that cycle, as well, the dating of the trough relied primarily on output measures.

Q: Isn't a recession a period of diminished economic activity?

A:
It's more accurate to say that a recession–the way we use the word–is a period of diminishing activity rather than diminished activity. We identify a month when the economy reached a peak of activity and a later month when the economy reached a trough. The time in between is a recession, a period when economic activity is contracting. The following period is an expansion. As of September 2010, when we decided that a trough had occurred in June 2009, the economy was still weak, with lingering high unemployment, but had expanded considerably from its trough 15 months earlier.









What is a
"Double Dip Recession"?


In the most general sense a Double Dip Recession occurs when an economy falls back into contraction for at least a couple of months (usually at least six) after a relatively brief expansion.

By this definition, the recession of 1981-82 which followed a year-long expansion after the very short, two quarter's long 1980 recession, seems to qualify. Also by this broad definition, the 1937 recession that occurred four years after the end of the 1929-1933 recession also qualifies. While each of those were technically "new" recessions, they happened so soon after their predecessors that many people tend to think of the separate 1980 & 1981-82 recessions as one nasty, long recession. Similarly, most people think of the 1929-1933 & 1937 recessions as encompassing "The Great Depression."

Another definition of a "Double Dip Recession" would be that of a recession which technically has not ended, and was only punctuated by a quarter or twos worth of head-fake rise in GDP. Many recessions throughout history have had such false hopes, only to swoon back down into contraction, until they finally came to an end.


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List of Recessions:
Post-1900 US Recessions

Mo/Yr Started Duration
Sep 1902 - 23 Months
May 1907 - 13 Months
Jan 1910 - 24 Months
Jan 1913 - 23 Months
Aug 1918 - 7 Months
Jan 1920 - 18 Months
May 1923 - 14 Months
Oct 1926 - 13 Months
Aug 1929 - 43 Months
May 1937 - 13 Months
Feb 1945 - 8 Months
Nov 1948 - 11 Months
Jul 1953 - 10 Months
Aug 1957 - 8 Months
Apr 1960 - 10 Months
Dec 1969 - 11 Months
Nov 1973 - 16 Months
Jan 1980 - 6 Months
Jul 1981 - 16 Months
Jul 1990 - 8 Months
Mar 2001 - 8 Months
Dec 2007 - 18 Months


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What is
Gross National Happiness (GNH)?


An alternate measure of a nation's wealth was conceptualized several decades ago as a means of cutting through the overemphasis on materialism of traditional wealth measures, and seeing the bigger picture.

According to GNHUSA.Org

  Gross National Happiness (GNH) is an indicator developed in Bhutan in the Himalayas, based on the concept elaborated in 1972 by the then King Jigme Singye Wangchuck. Since then, the kingdom of Bhutan, with the support of UNDP (UN Development Program), began to put this concept into practice, and has attracted the attention of the rest of the world with its new formula to measure the progress of a community or nation.

GNH is based on the premise that the calculation of "wealth" should consider other aspects besides economic development: the preservation of the environment and the quality of life of the people. The goal of a society should be the integration of material development with psychological, cultural, and spiritual aspects - all in harmony with the Earth.

The Four Pillars of GNH

  • the promotion of equitable and sustainable socio-economic development
  • the preservation and promotion of cultural values
  • the conservation of the natural environment, and
  • the establishment of good governance.



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