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For free real time breaking news alerts sent straight to your inbox sign up to our breaking news emails Sign up to our free breaking news emails The pound has fallen again in the aftermath of chancellor Kwasi Kwarteng’s “mini-Budget” in September. The latest drop, which saw £1 sterling buy $1.10, came after Andrew Bailey, […] More
For free real time breaking news alerts sent straight to your inbox sign up to our breaking news emails Sign up to our free breaking news emails The pound has fallen again in the aftermath of chancellor Kwasi Kwarteng’s “mini-Budget” in September. The latest drop, which saw £1 sterling buy $1.10, came after Andrew Bailey, […] More
For free real time breaking news alerts sent straight to your inbox sign up to our breaking news emails Sign up to our free breaking news emails The Bank of England’s emergency action may need to be extended beyond this week to help manage market turmoil, according to a leading pensions industry body. The Pensions and Lifetime Savings Association (PLSA) said a […] More
For free real time breaking news alerts sent straight to your inbox sign up to our breaking news emails Sign up to our free breaking news emails The Bank of England has announced an expansion of its emergency gilt-buying programme, launched after chancellor Kwasi Kwarteng’s mini-Budget sparked market turmoil which left the UK on the brink of a financial crisis. The Bank said […] More
The broken US economy breeds inequality and insecurity. Here’s how to fix itJames K GalbraithOn one side, oceans of wealth and power. On the other, precarity and powerlessness. But we have the tools for reform Rising interest rates, a falling stock market, a seesaw in the price of gas, a high dollar and chaos in world finance – we see in all this, once again, the folly of trying to run the world’s largest economy through a central bank. It’s time to rethink the basics: what has happened in America? And what should be done?Adam Smith wrote: “Wealth, as Mr Hobbes says, is power.” Today in the United States we find islands of wealth and power on one side and an ocean of precarity and powerlessness, alongside poverty, on the other. This is a structural development over 50 years, the effect of politics and policies, but also of industrial change, globalization and new technologies, with intense regional, social, demographic and political implications.US mortgage rates climb to 6.7%, highest for 15 yearsRead moreFrom the 1930s to the 1970s America had a middle-class economy centered in the heartland, feeding and supplying the world with machinery and goods while drawing labor from the impoverished south to the thriving midwest – an economy of powerful trade unions and world-dominant corporations. This has become a bicoastal economy dominated by globalized finance, insurance and high-end services on one coast, and by information technology, aerospace and entertainment on the other.Finance and technology do not create many jobs, and the conduct of business in those sectors is rapacious and predatory, shading often into fraud. Some years ago we calculated the rise of income inequality measured between counties during the 1990s boom years, and found that half the increase was due to income gains in just five counties: Manhattan, Silicon Valley, Seattle. There have been other big gainers since, but the fact remains: the largest income and wealth gains in America have become highly concentrated in a few very specific places, sectors – and people.Yet practically all new jobs created in the past 30 years have been in services, and most of those in “stagnant services” – the profusion of restaurants, retail shops, hospitals and clinics, offices and entertainment venues, fueled by household incomes (and borrowings) exceeding requirements for material goods. Pay in these jobs is mediocre and employment is unstable. Families compensated by having two or more earners, each sometimes holding two or more jobs, where 50 years ago the norm was one earner with a steady job paying a living wage. Then Covid blasted the sector.For better or worse, we can’t go back: globalization and the digital revolution are irreversible facts of life. The June 2021 White House Review on the supply chain made this very clear, using semiconductors, rare earths, batteries and pharmaceuticals as examples. Our advanced sectors need world markets – including the Chinese market – as much as they need access to the world’s resources. US consumers benefit from imported goods and from the efficiencies of the information age.The question is: what do we do now? We can adjust, and build a fair and secure middle-class society, free of poverty and of oligarchy alike, with tools that are broadly familiar. These tools include:Expand social insuranceSocial security, Medicare, Medicaid, unemployment insurance and Snap already greatly reduce poverty, insecurity and hunger in America. They can be broadened and strengthened. If we can’t get Medicare for All, then drop the age of eligibility to 55 – that would cover a large part of the most vulnerable population and reduce in a stroke the burden of private health insurance on employers.Raise the minimum wageA federal minimum wage at $15 per hour would provide a raise to at least 20% of all working Americans. It would solve in a stroke the supposed problem of “labor shortage” – without hurting any employer relative to any other. Nor would it encourage immigration, since US workers would step up to take decently paid jobs.Implement a job guaranteeA federal job guarantee is well-prepared proposal that would eliminate involuntary unemployment, set a basic wage standard, and provide willing workers with continuous employment on useful projects, giving private employers a labor pool from which they can easily recruit the workers that they need.Stabilize energy prices and suppliesThe TVA and other agencies provide stable power under long-term contracts. Why should oil and gas be run by private equity on a boom-and-bust basis? Stabilize energy prices and supplies – with regulation, quotas, price controls (as in Germany right now), long-term contracts and public utilities – and many other problems would become much easier to solve.Build public services, infrastructure, and fight climate changeAnd do this while cutting military commitments and spending. The main job of infrastructure is to improve the quality of life, with clean water and air, good transport and communications, and – urgently – to change the resource mix so as to mitigate, so far as possible, global warming. We cannot meet these needs and at the same time devote our talents and resources to wars – the limits to that are clear after Afghanistan and Iraq. It is past time to end the illusion that the United States can or should run the world.Shift taxation toward land rentA great principle of classical economics was that taxes should encourage labor and enterprise while discouraging waste in both the public and private spheres. In the 1980s, taxes were shifted away from personal and corporate incomes and capital gains and toward payrolls and sales – and the unsurprising result was the rise of an oligarchy of hyper-wealthy persons. The remedy now is to tax these accumulations and the associated rents – land values, mineral rights, technology “quasi-rents” – so as to bring the new plutocrats back to earth. A stronger estate-and-gift tax can spur the transfer of great fortunes to foundations and non-profits, such as hospitals, universities and churches, while working to prevent the emergence of dynasties, financial and political.Reform banking before it’s too lateThe Glass-Steagall Act protected the middle class – the ordinary depositor at a commercial bank – from the speculative whims of the elites. Today big money is back in charge, despite the great financial crisis – and much of the American public as well as the larger world is sick of it. Perhaps the toughest, most necessary reform is to reduce debts including student debts, to shrink the banks, to restore effective regulation, to prosecute frauds, and to discipline finance to serve the public good. This will take the glamour out of being a banker – and the intoxicating power out of running the Federal Reserve.Is this program realistic? Perhaps not. But consider the path we’re on. What I propose is an alternative – to pitchforks, anarchy and civil war.
James K Galbraith holds the Lloyd M Bentsen Jr chair in government/business relations at the Lyndon B Johnson School of Public Affairs at the University of Texas at Austin. In the 1970s, he drafted the monetary policy oversight provisions of the original version of the Humphrey-Hawkins Full Employment and Balanced Growth Act
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The American EV boom is about to begin. Does the US have the power to charge it? States have plans to ban gas-powered cars and the White House wants chargers along highways, but implementation is a challengeSpeaking in front of a line of the latest electric vehicles (EVs) at this month’s North American International Auto Show, President Joe Biden declared: “The great American road trip is going to be fully electrified.”Most vehicles on the road are still gas guzzlers, but Washington is betting big on change, hoping that major federal investment will help reach a target set by the White House for 50% of new cars to be electric by 2030. But there are roadblocks – specifically when it comes to charging them all. “Range anxiety,” or how far one can travel before needing to charge, is still cited as a major deterrent for potential EV buyers.The auto industry recently passed the 5% mark of EV market share – a watershed moment, analysts say, before rapid growth. New policies at the state and local level could very well spur that growth: the Inflation Reduction Act, which passed this summer, offers tax credits of $4,000 to purchase a used EV and up to $7,500 for certain new ones. In August, California, the nation’s largest state and economy, announced rules that would ban all new gas-powered cars by 2035. New York plans to follow.So now, the race is on to provide chargers to power all those new EVs.The administration’s target of 500,000 public charging units by 2030 is a far cry from the current count of nearly 50,000, according to the Department of Energy’s estimate. And those new chargers will have to be fast – what’s known as Level 2 or 3 charging – and functional in order to create a truly reliable system. Today, many are not.Last week, the White House approved plans for all 50 states, along with Washington DC, and Puerto Rico, to set up chargers along highways, unlocking $1.5bn in federal funding to that end. The money comes from the landmark infrastructure bill passed last year, which invests $7.5bn for EV charging in total.Electric vehicle charging stations get green light across USRead moreBut how much of that money is spent is largely going to be determined at the local level. “It’s a difference between policy and practice,” said Drew Lipsher, the chief development officer at Volta, an EV charging provider. “Now that the federal government has these policies, the question becomes, OK, how does this actually get implemented?” The practice, he said, is up to states and municipalities.As EV demand spikes, a growing number of cities are adopting policies for EV charging construction. In July, the city of Columbus passed an “EV readiness” ordinance, which will require new parking structures to host charging stations proportionate to the number of total parking spots, with at least one that is ADA-accessible. Honolulu and Atlanta have passed similar measures.One major challenge is creating a distribution model that can meet a diversity of needs.At the moment, most EV owners charge their cars at home with a built-in unit, which governments can help subsidize. But for apartment dwellers or those living in multi-family homes, that’s less feasible. “When we’re thinking about the largest pieces of the population, that’s where we need to really be focusing our attention. This is a major equity issue,” said Alexia Melendez Martineau, the policy manager at Plug-In America, an EV consumer advocacy group.Bringing power to people is one such solution. In Hoboken, New Jersey, Volta is working with the city to create a streetside charging network. “The network will be within a five-minute walk of every resident,” said Lipsher. “Hopefully this is a way for us to really import it to cities who believe public EV charging infrastructure on the street is important.” Similarly, in parts of Los Angeles – as in Berlin and London – drivers can get a charge from a street lamp.And there may be new technologies that could help, exciting experts and EV enthusiasts alike. That could include the roads themselves charging EVs through a magnetizable concrete technology being piloted in Indiana and Detroit. And bidirectional charging, where, similar to solar panels, drivers can put their electricity back into the grid – or perhaps even to another EV, through what’s known as electric vehicle supply equipment (EVSE). Nissan approved the technology for their Leaf model this month.Prochazka said he imagined a future where cities rely on excess EV charge when energy demand spikes, rather than polluting peaker plants that are currently turned on to boost supply. “We haven’t even scratched the surface on the opportunities that are gonna exist once we get bidirectional happening,” said Prochazka.Experts hope these advances will help bridge the gap in historically disconnected areas, such as rural communities and communities of color. But first, planners have to listen: although extensive community engagement trials have been praised in states such as Arizona, the local National Association for the Advancement of Colored People (NAACP) chapter in Indiana accused the state’s draft plan of excluding Black communities.“The more the community has input on where these chargers go, how they’re used and how they’re designed,” said Melendez Martineau, “the better they’re going to serve the community.”Still, the US seems significantly more poised to electrify now than it did six months ago, says Dale Hall, a senior researcher who focuses on EVs at the International Council on Clean Transportation (ICCT).He says that the private sector, which is behind much of the charging infrastructure, is moving ahead with clear signals of support from the public sector. Stronger local policies or cutting-edge technology will only help dictate the speed of that transition, Hall added.He thinks the Biden administration’s goal for chargers is achievable. “The business case is just going to keep getting better.”TopicsElectric, hybrid and low-emission carsBiden administrationUS politicsClimate crisisAutomotive industrynewsReuse this content More
‘Slavery by any name is wrong’: the push to end unpaid labor in prisonsA nationwide movement hopes to close the ‘slavery loophole’ that enables the exploitation of 800,000 prisoners in the US When prison reformer Johnny Perez was incarcerated he made sheets, underwear and pillowcases working for Corcraft, a manufacturing division of New York State Correctional Services that uses prisoners to manufacture products for state and local agencies. His pay ranged between 17 cents and 36 cents an hour.“We have a system that forces people to work and not only forces them to work but does not give them an adequate living wage,” said Perez. “Slavery by any name is wrong. Slavery in any shape or form is wrong.”Perez is now part of a nationwide movement that hopes to reform what some have called the “slavery loophole” that allows incarcerated people to be paid tiny sums for jobs that – if they refuse to do them – can have dire consequences.The 13th amendment of the US constitution, ratified in 1865, abolished slavery and involuntary servitude. But it contained an exception for “a punishment for crime whereof the party shall have been duly convicted”.This exception clause has been used to exploit prisoners in the US as workers, paying them nothing to a few dollars a day to perform jobs ranging from prison services to manufacturing or working for private employers where the majority of their pay is deducted for room and board and other expenses by the jurisdictions where they are incarcerated.A report published by the American Civil Liberties Union in June 2022 found about 800,000 prisoners out of the 1.2 million in state and federal prisons are forced to work, generating a conservative estimate of $11bn annually in goods and services while average wages range from 13 cents to 52 cents per hour. Five states – Alabama, Arkansas, Georgia, Mississippi and Texas – force prisoners to work without pay. The report concluded that the labor conditions of US prisoners violate fundamental human rights to life and dignity.A campaign to amend the constitution at the federal level and end the exception of the 13th amendment is being promoted by the US representative Nikema Williams and the senator Jeff Merkley. The bill has 175 co-sponsors in the House, 170 Democrats and 5 Republicans, and 14 co-sponsors in the US Senate, but has yet to leave committee for a floor vote in either the House or Senate.In the meantime the #EndTheException coalition, consisting of more than 80 national organizations, including criminal justice reform, civil rights and labor groups, is leading efforts to pass the abolition amendment at the federal level and through ballot initiatives at the state level.In November voters will decide on whether to remove exception clauses from their state constitutions in Alabama, Louisiana, Oregon, Tennessee and Vermont. An abolition amendment passed in the California assembly, but failed to receive a Senate vote this year so that it could be on the ballot for voters this November.“The reality is that it is 2022 and in the United States, slavery is still legal,” said Bianca Tylek, founder and executive director of the non-profit Worth Rises. “These five states would join Colorado, Utah and Nebraska, states that have already ended the exception of their state’s constitutions. And so that would be exciting, that would bring that number to eight, with five out the eight being red states and I think that bodes well for where the campaign can go at the federal level.”It is time for change, said Johnny Perez. He emphasized that in prison, individuals aren’t provided adequate basic necessities such as food, toiletries, clothing and office supplies, and that the measly wages paid by these jobs don’t cover these extra expenses.Refusing a work assignment can also have adverse consequences, he said, ranging from being placed in solitary confinement to having any work issues placed on your record which affects parole and status within a prison that determines what privileges you receive. Workers in prison do not get any paid time off and are often forced to work even when sick unless an infirmary affirms they are not able to work.Despite having five years’ full-time experience manufacturing textiles while in prison, that experience isn’t included on Perez’s résumé; incarcerated people, rather than have educational programs available to better support them upon release, are forced to do arduous manual labor jobs and often aren’t able to find work in the same industry when they are released.“It’s still continuing to happen and it disproportionately impacts Black, brown and Indigenous people in this country,” said Perez. “So long as the exception clause exists, we will always have an underclass in this society that is going to be the dumping ground for our problems and our shortcomings.”This month the #EndTheException coalition launched the Except For Me digital campaign to raise awareness of the issues, ending with the delivery of a petition to Congress in support of the abolition amendment and an art installation in Philadelphia, Pennsylvania.“This exception is about people and it’s about people for whom the 13th amendment doesn’t apply,” added Tylek. “We really want people to see those people and see the people that society has successfully otherwise hidden away.”Among those featured in the campaign is Britt White, who worked at a Burger King franchise in Alabama while in community status until 2014; about 60% of her wages were taken by the state of Alabama to cover fees, room and board or restitution.“Prison itself is expensive,” said White. “I can only speak for the state of Alabama where I was incarcerated, so providing hygiene, trying to supplement the lack of nourishment is very expensive, and my family had their own bills and financial responsibilities they had to take care of. I still had more support than most people did and it was still very difficult to survive in prison because everything has a cost associated with it.”White explained there were medical fees associated with received medical care and sometimes the food provided was not fit for human consumption.“I just can’t emphasize enough the lack of agency that you have,” added White. “If we are going to allow people who are incarcerated to work jobs, we need to pay them a livable wage and we need to center their dignity. We don’t need to place them in positions where there are hostile environments where they can be retaliated against and lose their agency.”Her experience in the Alabama department of corrections drove her to work as an organizer in criminal justice reform to address the corruption and despair she witnessed and experienced in the prison system.“We cannot condemn people, and then say that you deserve to be put away or you can’t come back to society, you’re not trustworthy enough to live in the community with other people, but you are still good enough for us to make a profit. That is unforgivable,” White said. “And that is the part that is still very reminiscent of slavery that my ancestors went through is that they were not good enough to be viewed as 100% as human beings, but they weren’t substantial enough to make a profit off of. That is the exception that has to be ended in our communities.”TopicsUS prisonsUS politicsfeaturesReuse this content More
For free real time breaking news alerts sent straight to your inbox sign up to our breaking news emails Sign up to our free breaking news emails The pound has plummeted to its lowest level against the dollar in history, falling more than 4 per cent, as the markets responded to the announcement of Britain’s […] More
