How to Tank an Economy

There is scant data on the U.S.-Korea Free Trade Agreement. The only thing clear is that "free trade" needs to be put in quotation marks, since the first announcements make it clear that the U.S. is interested in imposing trade restrictions upon South Korea in terms of intellectual property rights. The population of South Korea is clearly upset: Workers hold protests against U.S.-South Korea free-trade talks.

Despite the fact that 80,000 people took to the streets, there is very little information out there about these protests, particularly in the L.A. Times which serves the largest Korean-American community in the country. The Korean TV news showed pictures of windows being broken and police riots, but provided little explanation as to why. The protests have been heavier in the poorest areas of the country.

This FTA is definitely going to devastate South Korean agriculture – there is already a plan to provide $119 billion to farmers over 10 years. There should be little doubt that this money will only cover a small part of the damage done. It may also hurt the film industry, which is protected by screen quotas that Hollywood hates. Medical costs are set to soar as well with the price controls on drugs being removed.

Reading through the data provided by the United States Trade Representative, I don't see anything that will actually help South Korea. So, reading between the lines, this is being shoved down the throat of South Korea at the threat of economic violence. The claims that this will increase GDP are easily counterbalanced by the fact that nearly all countries that have entered into "free trade" agreements with the U.S. have seen GDP growth shrink, not grow.

Oh Yeah, You Might Want to be Able to Get There

Another minor oversight in the full-frontal assault on health care for working people here in L.A.: City Considers Transit Changes In Wake Of King-Drew Downsizing. Now that people in South Central no longer have access to a hospital, they have to go to another one that is 11 miles away. But, oops, it is 18 miles and 90 minutes by bus. Minor oversight.

And, continuing to rub salt into the wounds, we have this quote from Councilwoman Janice Hahn: "Many people in South Los Angeles were dying 40 years ago because of the distance they had to travel to access health care. Forty years later, we're back in the same situation." I think Hahn (who is complicit in all this) is trying to point out how good people have it now, because the current plan in the works is to move things back 100 years.

About Inflation Statistics

Wonderful piece from Consumer Reports, Inflation’s sharp pinch on your bottom line. They break down what the CPI means, how it is arrived at, and why it is that it doesn't seem to match up with the reality we face day to day.

The article also mentions the website Shadow Government Statistics, where if you delve into it you can see that these skewed inflation statistics aid in skewing GDP as a useful statistic as well, since it is adjusted for inflation. That is, it makes overall growth of the economy look rosier than it really is.

In the end, these changes to the calculations make useful tools for pushing more sacrifices onto working people. For the economists, though, they turn to more accurate statistics if their real interest is figuring out where the economy is going. But then, most economists don't dare buck the consensus for fear that things might start to appear as bad as they really are.

An Injury to One is an Injury to All

Nice article today about immigration law and the workplace: Latinos walk out amid firings. After 50 workers were fired at the Tar Heel, NC Smithfield pork processing plant on the pretext of immigration violations, a large number of workers (mostly Latino) walked out in protest. But they'd been fighting for some time, so this was just another straw on the camel's back.

There couldn't be a more textbook example of how employers use immigration to divide workers, lower their wages, and intimidate them into being docile. The ability to marginalize any part of the working class allows wages and working conditions to be driven down for every member of the working class. And of course, in the face of blatant firings of union supporters, a company can simply claim that they are complying with federal law. Of course, when it doesn't suit them, they aren't worried about federal law at all – and the lack of enforcement allows that to be the case most of the time.

Horray for Subtlety

I remember in the weeks approaching the election, there were a number of articles and economists talking about the lower gas prices. One thing they strove to point out was that the falling prices were mistakenly seen by laymen as a political maneuver by the oil companies. They offered one explanation or another as to why this was wrong.

Here we are, a week after the election, and sure enough, gas prices have rise by about $0.15 here in Los Angeles. Pure coincidence, I'm sure. Let's see what happens to gas prices in the coming weeks and months.

But for everyone who was afraid to vote for Proposition 87 because it "would raise gas prices," what the analysts and commercials failed to mention, was that gas prices would rise no matter how we voted.

Talking about Jobs ...

Saturday's article, Strong U.S. job growth boosts GOP hopes, brings up the idea that improved job numbers might help the Republicans out in Tuesday's elections. Of course, the reality is that although job growth is getting a little better, it still isn't enough to meet the needs of the population. The article does point out this roughly 35% deficiency.

Another point that the article doesn't mention, though, is that over 50% of the job growth in the recent job numbers have come from government jobs. This is probably typical, though I don't have older numbers to back me up. With elections coming up, incumbent parties hoping to woo a segment of the population, create a few more jobs in September and October. Simple enough election trick, but how long will the jobs last?