Excerpts from recent editorials in the United States and abroad:
Dec. 2
The Washington Post on the U.S. economy:
It has been a miracle year for the U.S. economy. Inflation has plummeted without triggering a recession. Many experts said that could not happen without widespread layoffs and a downturn. The economy has gained 2.4 million jobs so far this year, and growth has accelerated, with an annualized rate topping 5 percent in the third quarter. The good news has also fueled a stock market rally. In polls, people are downbeat about this economy, but their actions don’t match their words. There has been a consumption boom this year. Americans continued to spend heavily on apparel, concerts and vacations. In many ways, this is the year the economy finally returned to something close to normal. But many people seem to have forgotten what normal looks like after a traumatic few years.
It seems inevitable that growth will slow from here. Many American consumers have been spending more than they earn lately, enabled by all the extra savings people built up during the covid-19 pandemic (and an alarming rise in credit card balances ). At some point, consumers have to scale back. Americans have also been buoyed by unprecedented growth in their wealth in recent years, largely because of surging home and stock market prices. It wasn’t just the rich getting richer. Net worth rose for Americans of all income levels, ages and races from 2019 to 2022, according to Federal Reserve data. Still, there are signs consumers are getting choosier. As retailer Nordstrom warned in its recent earnings call, “We continue to see a cautious consumer.” It’s still possible the United States will see a “soft landing” that avoids a painful recession, but growth is likely to be lackluster in 2024 as consumption cools.
The job market is the key indicator to watch. It has been easy to find a job in recent years. That, too, has helped boost consumption. But hiring is slowing down. Companies are getting more selective. Workers are no longer quitting en masse, and people are staying unemployed longer, a sign that it’s getting harder to find a new job after a layoff. The current unemployment rate of 3.9 percent is very low, but even a modest rise in that rate could spook Americans.
Federal Reserve officials are almost certainly done hiking interest rates. They need to recognize that the labor market is back in balance. Job openings still appear high, but companies are being very picky. The hiring rate has fallen sharply this year. Meanwhile, inflation is getting close to the Fed’s 2 percent target. Data released Thursday shows the Fed’s preferred inflation metric has fallen to a 2.5 percent annualized rate in the past six months. The recent years’ inflation spike was driven a lot more by supply problems than many realized — or admitted. It appears that spike was transitory. It just took longer than many expected to work out the supply chain chaos and hire back enough workers. With gas prices back down and rent and food price increases moderating, the Fed looks likely to meet its inflation goal in 2024.
The debate now is when the Fed will start cutting interest rates. Stocks have been rallying in recent weeks as investors are betting a cut will come by May. That would certainly help the housing market, which has frozen with mortgage rates at the highest levels in about two decades. The Fed has to see how the data comes in this winter, but it would make sense to bring rates back to a lower level now that many pandemic problems are over. That doesn’t mean a return to near-zero. But, as New York Fed President John Williams said Thursday, rates are “ the most restrictive in 25 years.” The Fed cannot declare the inflation fight won prematurely, but current rates might soon seem excessive.
As for President Biden and Congress, they can help by finally agreeing on a budget for this fiscal year and, even better, launching a bipartisan debt commission to begin tackling the nation’s dire long-term fiscal challenges.
So who gets credit for the economic miracle? It’s clear the Fed restored trust in its judgment and, in turn, that inflation would come down. Mr. Biden’s $1.9 trillion stimulus also played a role by beefing up people’s savings. That is still fueling stronger-than-expected consumption. Mr. Biden’s aid also drove a lot of hiring this year in state and local governments.
But the biggest factor is a return to normal — companies untangling supply chains even as people returned to stores. The United States has a chance to stick its soft landing. It would be even better — for the country’s economy and its politics — if Americans believed it could happen.
ONLINE: https://www.washingtonpost.com/opinions/2023/12/02/us-economy-2024-recovery-normal/
___
Dec. 1
The Wall Street Journal on congressional expulsion:
George Santos, assuming that’s his real name, is a classic type, and in another era he’d be selling miracle elixirs out of a horse-drawn wagon or perhaps founding a religion based on his divine revelations. Instead he went to Congress. On Friday the House expelled the indicted New Yorker, but however bad Mr. Santos’s conduct, it’s a worrying precedent for a polarized age.
Mr. Santos faces 23 federal charges, including fraud and identity theft. Yet he has pleaded not guilty, and even politicians get a presumption of innocence. Before Friday’s expulsion, which passed 311-114, only five people in history had been booted by the House. Three were removed in 1861 for serving the Confederacy. The other two, in 1980 and 2002, were convicted of serious crimes.
The drawback of waiting for due process and a criminal conviction is that scoundrels can linger in office. Those with a sense of shame often spare themselves and the country by resigning, which Mr. Santos refused to do. But he said he wouldn’t run for re-election, his trial is scheduled for next September, and two months after that voters could pick his replacement.
One advantage of holding off on expulsions is that a conviction provides a clear, neutral limiting principle. What’s the rule now? Shortly after Mr. Santos’s ouster, Pennsylvania Sen. John Fetterman renewed his call to eject Sen. Bob Menendez, who recently pleaded not guilty to federal crimes. “If you are going to expel Santos,” he said, “how can you allow somebody like Menendez to remain?” Mr. Santos’s lies were almost funny, he added: “Menendez, I think, is really a Senator for Egypt.”
After Friday, drawing lines will be more difficult. It’s no good to argue that Mr. Santos is a fabulist who fibbed his way into office. How is that a distinction? When a politician is engaged in wrongdoing, he tends not to advertise it. Instead he tells voters that he goes to church on Sundays, he’s committed to honest dealing, and he named his three daughters Faith, Prudence and Rectitude.
Mr. Santos is clearly disreputable, and his constituents in New York have a right to be angry about his behavior. But in breaking the seal of expulsion without conviction, Friday’s majority has lowered the bar in a way that partisans will be tempted to abuse. As much as the House didn’t want to put up with Mr. Santos for another minute, lawmakers may come to regret that they didn’t leave his fate to the courts and the voters.
ONLINE: https://www.wsj.com/articles/george-santos-expelled-from-congress-bfeb4f9b
___
Nov. 30
The Los Angeles Times on the Voting Rights Act:
A federal appeals court panel handed down a decision last week that would hobble enforcement of the Voting Rights Act by holding that only the U.S. attorney general, not aggrieved citizens, can file lawsuits to enforce one of the landmark civil rights law’s key protections. The Supreme Court, which has a checkered history when it comes to protecting voting rights, must overrule this radical decision if it is appealed, which is likely.
In a dispute arising from challenges to a legislative redistricting plan in Arkansas, the U.S. 8th Circuit panel ruled that, because the text of Section 2 of the Voting Rights Act doesn’t authorize lawsuits by private individuals, such suits may not proceed.
Writing for the 2-1 majority, Judge David R. Stras said that “silence is not golden for the plaintiffs.” Never mind that, as a dissent by Chief Judge Lavenski Smith pointed out, federal courts across the country, including the Supreme Court, have considered numerous Section 2 cases brought by private plaintiffs. Congress also made clear in committee reports that it envisioned private lawsuits, a fact shrugged off by the majority opinion with the dismissive comment that there “are many reasons to doubt legislative history as an interpretive tool.” (Earlier this month, another federal appeals court, the U.S. 5th Circuit Court of Appeals, concluded that private parties could sue under Section 2.)
The Voting Rights Act, originally signed into law in 1965, initially was seen as protection against blatant attempts by states, mostly in the South, to prevent Black voters from participating in elections, despite the guarantee in the 15th Amendment that the right to vote “shall not be denied or abridged by the United States or by any state on account of race, color, or previous condition of servitude.”
The law requires that jurisdictions with a history of voting discrimination to “pre-clear” changes in election procedures with a federal court or the U.S. attorney general — a provision that was gutted by a disastrous 2013 decision in Shelby County vs. Holder. But it also includes a provision, Section 2, that applies nationwide and prohibits voting practices or procedures that discriminate on the basis of race, color or membership in language minority groups.
As the Voting Rights Act has evolved and been amended, it addresses not only restrictions on an individual’s right to vote but on official action — such as redistricting maps — that give minority groups “less opportunity than other members of the electorate to participate in the political process and to elect representatives of their choice.” That development is entirely appropriate. In an ideal world, the racial makeup of a legislative or congressional district might be irrelevant. But in the real world of persistent racism, the Voting Rights Act provides a check on even subtle attempts to weaken the political power of nonwhite voters.
The law is not much of a protection, however, if it can’t be enforced through litigation. Richard L. Hasen, a voting rights expert at UCLA Law School, warned that it was “hard to overstate how important and detrimental this decision would be if allowed to stand: the vast majority of claims to enforce Section 2 of the Voting Rights Act are brought by private plaintiffs, not the Department of Justice with limited resources.”
Although it hasn’t repented of its reckless decision in Shelby County vs. Holder, the Supreme Court sometimes has ruled in ways that support the ambitious objectives of the Voting Rights Act. In June, the court by a 5-4 vote ruled in a case involving citizen plaintiffs that Alabama likely had diluted the power of Black voters in fashioning a congressional map. The majority opinion was written by Chief Justice John G. Roberts Jr., the author of the Shelby County opinion. Roberts and the other justices should similarly bolster voting rights by reversing the 8th Circuit panel’s misreading of the law if and when it comes before them.
ONLINE: https://www.latimes.com/opinion/story/2023-11-30/editorial-the-voting-rights-act-supreme-court
___
Dec. 3
The Guardian on a fossil fuel non-proliferation treaty:
Colombia’s economy is dependent on fossil fuels, which account for about half of its exports. But at the UN climate summit this weekend, Gustavo Petro, the country’s president, committed to stop the expansion of coal, oil and gas exploitation and reorient his nation away from such “ poisons ”. Colombia is the first big economy to endorse a fossil fuel non-proliferation treaty. This is a sensible, globally significant step – which raises the question of why other carbon-exporting OECD members, such as Britain, shouldn’t follow suit.
What is crazy is that governments plan to produce more than double the amount of fossil fuels in 2030 that is consistent with a “safe” global temperature rise of 1.5C. The paradox the treaty seeks to address is that the Paris agreement does not mention the fossil fuels responsible for global heating. But a handful of nations could show how phasing out fossil fuels can lead to sustainable green development and rebut the absurd denialism of Sultan Al Jaber, the oil boss and Cop28 president. There are precedents: the 1997 mine ban treaty began with few backers, but was later ratified by 164 countries.
Humanity is at risk if there is no transition away from an extractive growth model to a greener one. Developing nations, such as Colombia, often run deficits in energy and food while exporting low-value goods relative to their imports. Africa’s largest crude oil exporter, Nigeria, imports nearly all its fuel. Seven in 10 economies import more food than they export. Consequently, developing nations suffer a structural trade deficit that leads to a weakening currency and the need to borrow dollars. Poor nations under such a regime transfer about $2tn a year to rich ones, studies suggest.
Developing nations want to replace the current inequitable model of globalisation with a fairer one. This has been done before. After 1945, West Germany was to be a “ pastoral state ” – dependent on others for energy, food and technology. But two years later, to keep the country from Moscow’s orbit, it was allowed to industrialise under the Marshall plan. Half the debt accumulated after two world wars was cancelled. Germany was allowed to replace imports with home-manufactured goods that, thanks to generous trade concessions, could be exported to richer nations. Despite recovering from war, the US sent Germany 5% of its GDP, about $1.5tn in today’s money.
What’s needed today is a “ green Marshall plan ”. But former colonial powers with historical climate responsibility won’t stump up the cash. The world’s poorest countries are paying more than 12 times as much to their creditors as they are spending on preventing environmental destruction. Some resource-rich poor nations are negotiating a place in green industrial supply chains by playing the US off against China. But the Kenya-based economist Fadhel Kaboub is right: the climate emergency needs not incremental but transformational change in the trade, investment and finance architecture.
Fossil fuels are today’s weapons of mass destruction, representing an existential threat. There are parallels with 1968’s treaty on the non-proliferation of nuclear weapons. Part of the solution to the climate emergency is to increase the use of renewables. But equally important is to stop the expansion of fossil fuel production, and not just with a vague promise that emissions will be abated in the future. Richer nations that benefited the most from coal, oil and gas extraction should commit to ending, equitably, the era of fossil fuels. Anything else, as the president of Timor-Leste, José Ramos-Horta, says, would be “ crocodile tears ”.
___
Dec. 3
China Daily on U.S. aid to Ukraine:
The tremendous amounts of military aid the United States has been providing to Ukraine to support its conflict with Russia has long been proclaimed by the Joe Biden administration as the necessary cost to defend “the free world”.
However, the first breakdown of which US states have benefited from the billions of dollars spent on arming Ukraine the Biden administration has been circulating on Capitol Hill since last week exposes a less noble picture. The aid is an investment for the benefit of the US, both economically and strategically, as President Biden hinted in an address in October.
The circulated spending breakdown is a move to persuade more Republican lawmakers to support Biden’s new aid proposal for Kyiv, worth $60 billion, which is contained in the $106 billion emergency supplemental released in October for Israel and the “Indo-Pacific” strategy as well. But it also reveals an important reason why the Biden administration is so keen to replenish the Ukraine aid the moment it nears depletion. As Biden said in the speech in October when he unveiled the supplemental spending bill. “Let me be clear about something,” Biden said. “We send Ukraine equipment sitting in our stockpiles. And when we use the money allocated by Congress, we use it to replenish our own stores, our own stockpiles with new equipment.”
As The Washington Post said in its report on the “best-kept secret about US military aid to Ukraine”, the “funds that lawmakers approve to arm Ukraine are not going directly to Ukraine but are being used stateside to build new weapons or to replace weapons sent to Kyiv from US stockpiles”. Of the $68 billion in military and related assistance Congress has approved since the conflict broke out in February last year almost 90 percent is going directly to upgrade the US’ military capabilities.
There is another meaningful revelation in the circular. The state-by-state breakdown for the latest $27 billion worth of investments allocated by Congress, and the spending on “munitions and tactical vehicle procurements”, clearly demonstrates that companies in four states — Arizona, Pennsylvania, Arkansas and Wisconsin — collectively received contracts totaling more than $1 billion for their products that aid Ukraine. Another $18 billion in contracts is spread around manufacturing facilities located in more than two dozen other states.
Although Biden claims “just as in World War II, today patriotic American workers are building the arsenal of democracy and serving the cause of freedom”, he should not have pretended to not know that both Pennsylvania and Arizona are the pivotal swing states in the presidential election next year. As major beneficiaries of his administration’s generous aid project, Biden wants to see these key states to vote in his favor in the upcoming presidential election.
To the Ukrainians, who have long woken up to the fact that the conflict is becoming a proxy war to defend US hegemony in Europe and beyond, it is not “patriotic American workers” that are building an “arsenal of democracy” and “serving the cause of freedom”, but greedy US military-industry complexes running full steam to make money from Ukrainian lives, serving the political cause of the Democrats.
ONLINE: https://www.chinadaily.com.cn/a/202312/03/WS656c6079a31090682a5f12a7.html
