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      in US Politics

      Automakers could be required to install technology to detect drunk drivers

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      Automotive industryAutomakers could be required to install technology to detect drunk driversCars would be prevented from starting if the operator is impaired – but some critics worry about who could access the data Edward Helmore in New YorkFri 17 Sep 2021 06.00 EDTLast modified on Fri 17 Sep 2021 06.02 EDTCar manufacturers would be required to include technology to monitor whether US drivers are impaired by alcohol and to disable the vehicle from operating under a proposal contained in the infrastructure bill awaiting a Senate vote.While advocates say the proposal could save thousands of lives, the move has some critics worried it could cross ethical boundaries and raise civil rights issues.The proposal is to develop technology that can passively monitor a driver to detect impairment or passively detect blood alcohol levels and prevent operation of a vehicle if impairment is detected or if levels are too high. The National Highway Traffic Safety Administration (NHTSA) estimates that drunk-driving is involved in 10,000 deaths a year in the US, one person every 52 minutes, and US police departments arrest about 1 million people a year for alcohol-impaired driving.According to the Automotive Coalition for Traffic Safety, which represents the world’s leading automakers, the first product equipped with new alcohol detection technology will be available for open licensing in commercial vehicles later this year.The technology will automatically detect when a driver is intoxicated with a blood alcohol concentration (BAC) at or above 0.08% – the legal limit in all 50 states except Utah – and then immobilize the car.Partly funded by the federal government through the NHTSA, the technology centers on sensors that could measure alcohol in the air around the driver, or a sensor in the start button or driving wheel to measure blood alcohol content in capillaries in a driver’s finger.But the NHTSA has warned that any monitoring system will have to be “seamless, accurate and precise, and unobtrusive to the sober driver”.If the proposal in the infrastructure bill becomes law it will mandate that “advanced drunk and impaired driving prevention technology must be standard equipment in all new passenger motor vehicles.”Within three years of its becoming law, the Department of Transportation would be required to sign off on accepted technology. Carmakers would have a further three years to comply. The transportation secretary, however, can extend the timeframe of approval for up to a decade if requirements are “reasonable, practicable, and appropriate”.According to reports, the agency is keen to avoid a repeat of seatbelt technology in 1970s that was designed to prevent a car from starting unless they were buckled but frequently malfunctioned, stranding drivers.The technology emerged after a panel of auto industry representatives and safety advocates convened by Mothers Against Drunk Driving (Madd) was formed to encourage and support the development of passive technology to prevent drunk-driving. Citing a study by the Insurance Institute for Highway Safety, Madd estimates that more than 9,000 lives a year could be saved if drunk-driving prevention tech were installed on all new cars.The Center for Automotive Research (Car) has said that the challenge for the auto industry is to come up with something that is affordable and functions efficiently enough to be installed in millions of new vehicles.“I don’t think that will be as easy as people might think,” Car’s chief executive, Carla Bailo, told NBC News. An impaired-driver sensor, Bailo added, was likely to be expensive and would have to be especially effective because “people will try to cheat”.But the technology also raises ethical questions about surveillance, even if that surveillance is in service of reducing a social problem that costs $44bn in economic costs and $210bn in comprehensive societal costs, according to a 2010 study.Madd does not support punitive measures, including breath-testing devices attached to an ignition interlock that some convicted drunk drivers are required to use before starting their vehicles, but advocates instead that anti-drunk-driving measures should be integrated in vehicle systems.“If we have the cure, why wouldn’t we use it?” said Stephanie Manning, Madd’s chief government affairs officer. “Victims and survivors of drunk-driving tell us this technology is part of their healing, and that’s what they have been telling members of Congress.”Manning points out that the auto industry has invested billions in autonomous vehicles, and alcohol detection technology is just one type of driver-distraction technology that the Department of Transportation needs to consider.“The technology we favor is the one that stops impaired drivers from using their vehicles as weapons on the road,” Manning said. “The industry has the technology that knows what a drunk driver looks like. The question is, at what point does the car need to take over to prevent somebody from being killed or seriously injured?”But the technology raises serious ethical and data privacy questions, including how to ensure collected data doesn’t end up in the hands of law enforcement or insurance companies.Wolf Schäfer, professor of technology and society at the Stony Brook University, said: “It’s a policy question that has ethical implications. Cars are increasingly pre-programmed and that brings up questions of responsibility for the actions of the car. Is it the programmer? The manufacturer? The person who bought the car?“Many people accept that one shouldn’t drive drunk and if you do, you commit an infraction. But in this situation the car becomes supervisor of your conduct. So ethics-wise, one could get away with that. But should this be reported to authorities presents grave ethical problems,” Schäfer said. “The privacy issues are real because sensors collect data, and what happens to this data is a question that’s all over the place, not just with cars.”The American Civil Liberties Union said it was “still evaluating the proposal”.TopicsAutomotive industryUS politicsAlcoholnewsReuse this content More

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      in UK Politics

      Food shortages ‘permanent’ and shoppers will never again enjoy full choice of items, Britons warned

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      Food shortages in supermarkets and restaurants are “permanent” and shoppers will never again enjoy a full choice of items, an industry boss has told Britons.In an extraordinary warning, the head of the Food and Drink Federation said staff shortages – triggered by a combination of Covid and Brexit – had killed off the “just-in-time” delivery model.“I don’t think it will work again, I think we will see we are now in for permanent shortages,” Ian Wright said.But Downing Street rejected the claim of a broken system and, in a potential hostage to fortune, predicted the shortages will be over by the festive season.Pressed on whether the shortages will ease to allow people to enjoy a “normal Christmas”, Boris Johnson’s spokesman told The Independent: “I believe so, yes.”The clash came as the government rebuffs calls to loosen post-Brexit immigration rules – to attract more HGV drivers, for example – insisting businesses must stop relying on EU workers.But the hit to trade from leaving the EU and the pandemic was laid bare by new figures revealing trade with the bloc plunged in July, with exports £1.7bn lower than in July 2018 and imports down £3bn.Worryingly, the UK is on course to fall out of Germany’s top 10 trading partners for the first time in 70 years, data issued by the German government revealed.“The UK’s loss of importance in foreign trade is the logical consequence of Brexit. These are probably lasting effects,” said Gabriel Felbermayr, the president of the Institute for the World Economy.In the UK, McDonald’s, Greggs, the Co-op and Ikea are just some of the big retailers that have struggled to supply products to their customers in recent weeks.The CBI business group has warned the labour shortages behind the gaps on shelves and restaurant menus could last up to two years, without urgent government action.The Food and Drink Federation stepped up that pressure when Mr Wright told a think tank event: “It’s going to get worse, and it’s not going to get better after getting worse any time soon.”He then added: “The result of the labour shortages is that the just-in-time system that has sustained supermarkets, convenience stores and restaurants – so the food has arrived on shelf or in the kitchen, just when you need it – is no longer working.”But the prime minister’s spokesman rejected the warning, saying: “We don’t recognise those claims.“We have got highly resilient food supply chains which have coped extremely well in the face of challenges and we believe that will remain the case.”Nevertheless, the fear of creating a bigger crisis is expected to see the government shelve full post-Brexit import controls on imports from the EU, for a second time.The food and drink industry is short of around half a million workers, Mr Wright said, meaning it is short of about 1 in 8 of the total number of people it needs in its workforce.The dearth was partly the result of EU nationals leaving the UK, as a result of both the pandemic and of Brexit.The lack of lorry drivers was partly caused by them moving to online retailers and starting to deliver for Amazon and Tesco – to get better hours and pay, he said.The latest ONS trade figures were seen as a possible indication that the UK is losing its overall competitiveness, within Europe.In July, total exports of goods exports to the EU plunged by £900m – while, at the same time, exports to non-EU countries increased by £700m. More

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      in UK Politics

      UK set to drop from Germany’s top 10 trading partners

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      The UK is on course to lose its status as one of Germany’s top 10 trading partners for the first time since 1950, official German statistics suggest.In the first six months of this year, German imports of British goods drop by nearly 11 per cent, according to data from the Federal Statistics Office.Britain left the EU’s single market, which allows frictionless trade and the free movement of people between member states, at the end of 2020. But even before this, Germany had already begun to reduce ties with the UK.Before the 2016 referendum, the UK was Germany’s fourth most important trader. By the end of this year, Britain is projected to be in the 11th spot.A December 2020 survey showed one in five German companies were reorganising supply chains in order to source goods from EU suppliers instead of British ones.“More and more small and medium-sized companies are ceasing to trade (in Britain) because of these (Brexit-related) hurdles,” Michael Schmidt, President of the British Chamber of Commerce in Germany, told Reuters.The decline in the first half of 2021 was driven by pull-forward effects before new barriers, such as customs controls, kicked in in January.“Many companies anticipated the problems… so they decided to pull forward imports by increasing stocks,” Mr Schmidt said.In particular, the agriculture and pharmaceutical sectors were particularly hit hard. The data shows German imports of British agricultural products fell by more than 80 per cent in the first six months, while imports of pharmaceutical products nearly halved.“Many small companies simply can’t afford the extra burden of keeping up to date and complying with all the kicked-in customs rules such as health certificates for cheese and other fresh products,” Mr Schmidt said.In contrast, German goods exports to Britain rose by 2.6 per cent. Mr Schmidt said the new trade realities had harmed British companies more than German ones.“In Britain, the picture is different. For many small British firms, Brexit meant losing access to their most important export market… It’s like shooting yourself in the foot. And this explains why German imports from Britain are in free-fall now.””The UK’s loss of importance in foreign trade is the logical consequence of Brexit. These are probably lasting effects,” Gabriel Felbermayr, President of the Kiel-based Institute for the World Economy (IfW), told Reuters.Additional reporting by Reuters More

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      in World Politics

      Infrastructure: The Key to the China Challenge

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      China has been recognized by Washington as the major rival to the United States in nearly every field. However, this isn’t the first time an Asian country has posed a threat to America’s economic dominance. In the mid-1980s, Japan built up a massive trade surplus with the United States, igniting a fierce backlash from both Republicans and Democrats over how it acquired US technology — often by theft, according to US officials — and how Tokyo used the government’s deep influence to push its companies into a dominant global position.

      But there was no nefarious scheme. In reality, Japan had made significant investments in its own education and infrastructure, allowing it to produce high-quality goods that American customers desired. In the case of China, American businesses and investors are covertly profiting by operating low-wage factories and selling technologies to their “partners” in China. American banks and venture capitalists are also active in China, funding agreements. Furthermore, with the Belt and Road Initiative (BRI), China’s infrastructure investment extends far beyond its own borders.

      The Unintended Economic Impacts of China’s Belt and Road Initiative

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      The BRI is Chinese President Xi Jinping’s hallmark foreign policy initiative and the world’s largest-ever global infrastructure project, funding and developing roads, power plants, ports, railroads, 5G networks and fiber-optic cables all over the world. The BRI was created with the goal of connecting China’s modern coastal cities with the country’s undeveloped heartland and to its Asian neighbors, firmly establishing China’s place at the center of an interlinked globe.

      The program has already surpassed its initial regional corridors and spread across every continent. The expansion of the BRI is worrying because it may make countries more vulnerable to Chinese political coercion while also allowing China to extend its authority more widely. 

      Infrastructure Wars

      US President Joe Biden and other G7 leaders launched a worldwide infrastructure plan, Build Back Better World (B3W), to counterweight China’s BRI during the G7 summit in Cornwall in June. The plan, according to a White House statement, aims to narrow infrastructure need in low and middle-income countries around the world through investment by the private sector, the G7 and its financial partners. The Biden administration also aims to use the plan to complement its domestic infrastructure investment and create more jobs at home to demonstrate US competitiveness abroad.

      The US government deserves credit for prioritizing a response to the BRI and collaborating with the G7 nations to provide an open, responsible and sustainable alternative. However, it seems unlikely that this new attempt would be sufficient to emulate the BRI and rebuild America’s own aging infrastructure, which, according to the Council on Foreign Relations, “is both dangerously overstretched and lagging behind that of its economic competitors, particularly China.”

      On the one hand, it’s unknown if B3W will be equipped with the necessary instruments to compete. The Biden administration has acknowledged that “status quo funding and financing approaches are inadequate,” hinting at a new financial structure but without providing specific details. It remains to be seen if B3W will assist development finance firms to stimulate adequate new private infrastructure investments as well as whether Congress will authorize much-needed extra funding.

      Embed from Getty Images

      Even with more funding, B3W may not be sufficiently ambitious. While the World Bank predicts that an $18-trillion global infrastructure deficit exists, the project will be unable to make real progress until extra resources are allocated to it.

      Also, the United States still lacks an affirmative Asia-Pacific trade policy. To compete with the BRI, the US will need to reach new trade and investment agreements while also bolstering core competitiveness in vital technologies such as 5G. It will also need to devote greater resources to leading the worldwide standards-setting process, as well as training, recruiting and maintaining elite personnel.

      On the other hand, China is often the only country willing to invest in vital infrastructure projects in underdeveloped and developing countries, and, in some cases, China is more competitive than the US as it can move quickly from design to construction. 

      Desire to Invest

      Furthermore, China’s desire to invest is unaffected by a country’s political system, as seen by the fact that it has signed memorandums of understanding with 140 nations, including 18 EU members and several other US allies such as Japan, South Korea, Australia and New Zealand. Even the United Kingdom, as a member of the G7, had a 5G expansion deal with Huawei that was canceled owing to security and geopolitical concerns. Nonetheless, the termination procedure will take about two years, during which time the Chinese tech behemoth will continue to run and upgrade the UK’s telecoms infrastructure.

      As a result, the BRI has fueled a rising belief in low and middle-income nations that China is on the rise and the US and its allies are on the decline. The policy consequence for these countries is that their future economic growth is dependent on strong political ties with China. 

      Unlike the US and European governments, which only make up for part of the exporters’ losses, Beijing guarantees the initial capital and repays the profits to the investing companies and banks. In addition, since there is no transfer of power and government in China, there will be virtually no major policy changes, meaning that investors will feel more secure. So far, about 60% of the BRI projects have been funded by the Chinese government and 26% by the private sector. 

      Unique Insights from 2,500+ Contributors in 90+ Countries

      For far too long, the US reaction to the BRI has been to emphasize its flaws and caution countries against accepting Chinese finance or technology without providing an alternative. Until now, this haphazard reaction has failed to protect American interests. The United States is now presenting a comprehensive, positive agenda for the first time. Transparency, economic, environmental and social sustainability, good governance and high standards are all emphasized in Build Back Better World.

      While providing a credible US-led alternative to the Belt and Road Initiative is desirable, the US must commit adequate financial and leadership resources to the effort. This is a good first step, but Washington must be careful not to create a new paranoia by demonizing economic and geopolitical rivals such as China and Japan to the point where it distorts priorities and leads to increased military spending rather than public investments in education, infrastructure and basic research, all of which are critical to America’s future prosperity and security.

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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      in US Politics

      ‘We’re peons to them’: Nabisco factory workers on why they’re striking

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      US unions‘We’re peons to them’: Nabisco factory workers on why they’re strikingWhile the CEO of Nabisco’s parent company is paid nearly $17m a year, plants are closing, jobs outsourced to Mexico, and older workers are unable to retire on weakened pension benefits Michael SainatoMon 23 Aug 2021 06.00 EDTLast modified on Mon 23 Aug 2021 06.01 EDTThe pandemic drove many people to the cookie jar and helped Nabisco, maker of Oreos, Chips Ahoy!, Fig Newtons and other sweet treats weather the worst of the outbreak. But as the company’s profits continue to recover, workers at its US plants are striking over the outsourcing of jobs to Mexico and concessions demanded by their employer in new union contract negotiations.On 10 August, about 200 workers in Portland, Oregon, represented by the Bakery, Confectionery, Tobacco Workers and Grain Millers (BCTGM) went on strike. Union workers in Aurora, Colorado, began their strike on 12 August, followed by those in Richmond, Virginia, on 16 August and Chicago, Illinois on 19 August.Through the pandemic, Nabisco’s parent company, Mondelēz International, has recorded billions in profits; in the second quarter of 2021, the company reported more than $5.5bn in profits and spent $1.5bn on stock buybacks in the first half of 2021. The CEO of Mondelez International received $16.8m in total compensation in 2020, 544 times the company’s median employee annual compensation of $31,000.“It’s greed. They don’t have any respect for their workers that gave them the opportunity to make that kind of money. We’re peons to them, and everyone is at the point where enough is enough,” said Darlene Carpenter, business agent of BCTGM local 358 in Richmond and a former employee at the plant. “We’re at the point where we’re saying this is how the cookie is going to crumble now because we can’t do this.”According to Keith Bragg, president of BCTGM local 358 who has worked at the Nabisco plant in Richmond for 45 years, during a discussion about contract negotiations with management, the company said that when the company does well, employees do well.He took offence to this notion, citing his concerns about the treatment of workers over the past few years and the recent concessions being asked of them. During the pandemic, many workers had to work 12-hour shifts, six to seven days a week for several months and were praised as “heroes” for their roles as essential workers. But now workers are being asked to give up overtime pay and concede to a two-tier healthcare system, Bragg said, which would downgrade benefits for new employees and cut overall wages.“They’re doing well, we’re losing all the way around,” said Bragg. “They shut down two plants this year, they’re cutting overtime, they’re making profits, but we lost half of our union membership. How is it that we’re doing well?”In 2012, Kraft Foods split into two companies, with Mondelēz International formed as the parent company of Nabisco. Since the split, the union has been pressed to accept concessions during drawn-out contract negotiations, such as eliminating union pension contributions in May 2018 and switching to 401 retirement plans.“A lot of folks were very close to retirement, and were able to do so under the old plan, but when the company pulled out that basically meant that they had to continue working, they were no longer eligible to retire,” said Mike Burlingham, who has worked at the Nabisco plant in Portland since 2007 and serves as vice-president of local 364. “It impacted all of us in a way that we can no longer count on this as being a place we can retire comfortably from.”Mondelēz International has shuttered several Nabisco plants in the US over the past several years, offshoring much of the work to Mexico. The plight of its workers briefly became a campaign issue during the 2016 election cycle, with both Hillary Clinton and Donald Trump attacking plans to shift jobs overseas. “I’m not eating Oreos any more,” Trump told voters in New Hampshire.But despite the political heat the trend has continued. In 2021, Nabisco plants in Fairlawn, New Jersey, and Atlanta were closed, resulting in the loss of about 1,000 jobs. Mondelēz International denied that jobs from the two plants shut down in 2021 were offshored to Mexico, but a petition for trade adjustment assistance alleging outsourcing by the union at one of the plants is under review by the Department of Labor. In 2016, hundreds of workers were laid off at the Nabisco plant in Chicago and a plant in Philadelphia was shut down in 2015.“We can’t compete with the Mexican workers,” said Cameron Taylor, business agent at Local 364 in Portland. “They just want to exploit cheap labor. If we were to accept all of what they want us to, accept all the working conditions and the two- tiered system of healthcare, this job would turn into a job not even worth fighting for.”In 2016, the union launched a “check the label” boycott campaign that was endorsed by the AFL-CIO, asking consumers to refuse to buy Nabisco products that are made in Mexico. Workers have frequently reported finding Nabisco products for sale near their plants that were produced in Mexico.“We are disappointed by the decision of the local BCTGM unions in Portland (OR), Richmond (VA) and Aurora (CO) to go on strike,” said a spokesperson for Mondelēz International, noting the company has a continuity plan in place at the facilities where workers are on strike. “Our goal has been – and continues to be – to bargain in good faith with the BCTGM leadership across our US bakeries and sales distribution facilities to reach new contracts that continue to provide our employees with good wages and competitive benefits, including quality, affordable healthcare, and company-sponsored Enhanced Thrift Investment 401(k) Plan, while also taking steps to modernize some contract aspects which were written several decades ago.”TopicsUS unionsUS politicsCoronavirusMondelēznewsReuse this content More

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      in US Politics

      American CEOs make 351 times more than workers. In 1965 it was 15 to one | Indigo Olivier

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      OpinionInequalityAmerican CEOs make 351 times more than workers. In 1965 it was 15 to oneIndigo OlivierRather than address stagnant wages for hourly workers and yawning inequality, corporations are blaming a ‘labor shortage’ Tue 17 Aug 2021 06.24 EDTLast modified on Tue 17 Aug 2021 06.25 EDTLast week, the Economic Policy Institute, a nonpartisan thinktank, released a report on the increasing pay gap between chief executives and workers. This research tells a familiar story with updated figures. When taking into account stocks, which now make up more than 80% of the average CEO’s compensation package, the report found that chief-executive pay has risen by an astounding 1,322% since 1978. That’s more than six times more than the top 0.1% of wage earners and more than 73 times higher than the growth of the typical worker’s pay, which grew by only 18% in the same time period. Most remarkable, however, is the 18.9% increase in CEO compensation between 2019 and 2020 alone.Bob Woodward’s third book in Trump trilogy to cover handling of pandemicRead moreCEO compensation outpacing that of the 0.1% is a clear indication that this growth is not the product of a competitive race for skills or increased productivity, the EPI report explains, so much as the “power of CEOs to extract concessions. Consequently, if CEOs earned less or were taxed more, there would be no adverse impact on the economy’s output or on employment,” the report concludes.This report joins a slew of data sounding an alarm on a massive upward transfer of wealth to the top 1% over the course of the pandemic. One estimate by the Institute for Policy Studies puts this figure as high as $4tn, or a 54% increase in fortunes for the world’s 2,365 billionaires.Today in the US, the CEO-to-worker pay gap stands at a staggering 351 to one, an unacceptable increase from 15 to one in 1965. In other words, the average CEO makes nearly nine times what the average person will earn over a lifetime in just one year.It’s worth remembering that the federal minimum wage would be $24 an hour today had it kept pace with worker productivity, rather than $7.25, where it’s been stuck since 2009. Additionally, inflation has resulted in a nearly 2% pay cut over the past year despite modest gains in hourly wages, according to the Bureau of Labor Statistics.This reality is unfolding against a narrative of a “labor shortage,” with small businesses, retail giants and fast-food chains expressing difficulty in filling poorly paid positions – even though there are one million more unemployed workers than there are open jobs. Clearly, something else is going on here.The grim reality is that a huge section of the American labor force – between 25% and 40% – made more on unemployment than they ever have working full-time at a minimum wage job. $7.25 an hour is $290 a week before taxes, compared with the $300 in weekly federal benefits that pandemic unemployment assistance provided. Nor does this account for the additional weekly state benefits that those on unemployment received.In our current milieu, “labor shortage” has become doublespeak for a stubborn reluctance on the part of politicians and businesses to address poverty wages, the remedy for which has been to let pandemic unemployment assistance expire so that workers are desperate enough to go back to the exploitative conditions that billion-dollar companies insist are necessary to keep the economy running.Rather than succumb to mainstream accounts that our “labor shortage” is the consequence of welfare-induced idleness, we should have an honest discussion about how we’ve allowed the essential workers who uphold our standard of living to be abused for so long while the mega-wealthy billionaires whom they work for realize their infantile fantasies of starting colonies in space.The EPI is correct. A wealth tax on the 1% would not hinder the economy nor employment, so much as rein in the excesses of the billionaire space race and luxury doomsday bunkers that stand in stark relief to the floods, fires, famine and pestilence that have currently taken hold.Among the report’s policy recommendations for reversing skyrocketing pay for CEOs are raising the marginal tax rate on the ultra rich to “limit rent-seeking behavior” and penalizing companies with unacceptable CEO-to-worker pay ratios with higher corporate taxes. Let’s examine the feasibility of both under Joe Biden’s administration.When Biden came into office, Trump had cut corporate tax rates from 35% to 21% and lowered rates on the ultra-wealthy to such an extent that the richest 400 people in the US paid a lower tax rate than any other group in the country – including the minimum wage workers who are rightly refusing to return to the same conditions they withstood before the pandemic. Investopedia called Trump’s Tax Cuts and Jobs Act the “largest overhaul of the tax code in three decades”.Biden, seeking to undo some of this pillaging of the public sphere, has proposed raising corporate taxes to 28% – 7% lower than what they had been when Barack Obama left office – and raising the top rates for individuals back to 39.6% from Trump’s 37% as part of the Democrats’ $3.5tn budget proposal (though there was some suggestion that Biden would concede to a 25% corporate tax rate if it would please congressional Republicans). Biden has also stated that he will not increase taxes on those making less than $400,000 – meaning less than the top 2% of wage earners.In other words, popular slogans taking aim at the top 1% have resulted in an administration of corporate Democrats that will attempt to take aim at the 1%, but make clear to their base that the 1% is as far as they’re willing to go.This is a far cry from the popular policies Bernie Sanders proposed during the presidential primaries, such as giving workers an ownership stake in the companies they’re employed by, democratizing corporate boards through employee elections, passing a wealth tax, banning stock buybacks and more. And it falls short of what is by far the cheapest and easiest solution to stimulating the economy and vastly reducing income inequality while steering clear of Republican interference: full student debt cancellation through executive order.With the stroke of a pen, Biden could provide life-changing financial relief for one in eight people living in the US. Each day he chooses not to is further proof that Biden is keeping to his original promise to rich donors on the campaign trail: “… nobody has to be punished. No one’s standard of living will change, nothing would fundamentally change.”
      Indigo Olivier is an investigative reporting fellow at In These Times magazine
      TopicsInequalityOpinionUS politicsEconomic policyExecutive pay and bonusescommentReuse this content More

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      in US Politics

      The Guardian view on post-Covid recovery: powered by the state not the market | Editorial

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      OpinionCoronavirusThe Guardian view on post-Covid recovery: powered by the state not the marketEditorialThe Thatcherite wing of the Conservative party desires a restoration of ideas whose time has come and gone Mon 9 Aug 2021 14.02 EDTLast modified on Mon 9 Aug 2021 15.35 EDTThe Conservative party hooked British capitalism to the state’s life support system for the past 18 months. So it takes chutzpah to think, as business secretary Kwasi Kwarteng does, of putting the free market at the heart of a post-Covid recovery. Yet lengthening NHS waiting lists, hiking consumer energy bills and welfare cuts when poverty is rising all betray a mindset that regards the re-legitimation of state intervention as threatening a way of life rather than securing it.What the Thatcherite wing of the Conservative party desires is a restoration. For them this is an opportunity to go back to 1979 and use tried-and-tested ways to stabilise prices, crush labour and discipline poorer nations. These rightwingers yearn for higher interest rates, to prioritise financial returns on assets and the use of creditor power to squeeze the global south.Such ideologues are likely, in part, to be disappointed. The US president, Joe Biden, does not see the world their way, saying this April that “trickle-down economics”, associated with Ronald Reagan, didn’t work. The president aims to show that the state can do good, and the early results are promising. His Covid-related aid boost will push the share of Americans in poverty to the lowest level on record. Mr Biden’s treasury secretary, Janet Yellen, professes a “free market” scepticism. She has promoted the social benefits of running the economy “hot” by maximising the use of all available resources. Her inspiration is the economist Arthur Okun, who in 1973 argued that governments increasing employment would foster “a process of ladder climbing” in the job market that would reduce inequality and stimulate productivity growth. Ms Yellen has stuck to this playbook in office.Perhaps the greatest pushback against the return of laissez-faire dominance in economics comes from China. Beijing has surpassed the US in some key technologies. Mr Biden’s economic team is blunt about needing to use the state for more “targeted efforts to try to build domestic industrial strength … when we’re dealing with competitors like China that are not operating on market-based terms”.The state is, clearly, not powerless against global capital. During Covid it paid for millions of workers without breaking a sweat. Contrary to conventional thinking there was no threat from rising deficits to interest rates. Thatcherism was defined by Nigel Lawson as “increasing freedom for markets to work within a framework of firm monetary and fiscal discipline”. This saw the state put in service of business interests rather than mediating between labour and capital. It also left Britain woefully unprepared, and ill-equipped, for the pandemic. A Thatcherite approach will not produce a fairer distribution of growth. It will militate against support during downturns and plans to “level up” the regions. Ministers ought to outline a new role for the state rather than relying on failed ideas about what the market can do.TopicsCoronavirusOpinionConservativesMargaret ThatcherEconomicsJoe BidenUS politicsRonald ReaganeditorialsReuse this content More