Article 43


Saturday, April 30, 2011

Bad Moon Rising Part 41 - 2016


When China Overtakes The US
After more than a century as the world’s largest economy, the US will need to adjust to its declining global hegemony.

By Mark Weisbrot
The Guardian UK

April 27, 2011

Various observers have noted this week that China’s economy will be BIGGER than that of the United States in 2016. This comes from the International Monetary Fund’s (IMF’s) latest PROJECTIONS,, which were made in its semi-annual April world economic outlook database. Since 2016 is just a few years away, and it will be the first time in more than a century that the United States will no longer be the world’s largest economy, this development will be the object of some discussion from various perspectives.

First, let’s consider the economics. China has been the world’s fastest growing economy for more than three decades, growing 17-fold in real (inflation-adjusted) terms since 1980. It is worth emphasising that most of this record growth took place (1980-2000) while the rest of the developing world was doing quite badly by implementing neoliberal policy changes indiscriminate opening to trade and capital flows, increasingly independent central banks, tighter (and often pro-cyclical) fiscal and monetary policies, and the abandonment of previously successful development strategies.

China clearly did not embrace these policy changes, which were promoted from Washington by institutions such as the IMF, World Bank, and later the WTO. (China did not even join the WTO until 2002.) It is true that China’s growth acceleration included a rapid expansion of trade and foreign investment. But these were heavily managed by the state, to make sure that they fitted in with the government’s development goals -quite the opposite of what happened in most other developing countries. China’s goals included producing for export markets, promoting higher levels of technology (with the goal of transferring technology from foreign enterprises to the domestic economy), hiring local residents for managerial and technical jobs, and not allowing foreign investments to compete with certain domestic industries.

China’s economy is still very much state-led, with the government controlling most of the financial system, the exchange rate, and about 44% of the assets of major industrial enterprises. That is why China was able to plow through the world recession with GDP growth of 9.8%, despite losing about 3.7 percentage points of GDP due to falling net exports.

Now for the politics and international implications. First, much of the discussion of China’s rise is written from a Washington perspective that is, from the perspective of an empire. From this view, China’s rise is a “threat”. Since this view sees the supremacy of Washington and its allies as good for the world, China’s rise is also seen as a threat to the world. It is assumed that China will become an empire like the United States, but will not be so “benevolent” as the United States is.

This view is not supported by the facts. To take just current and recent history, it is the United States that invaded Iraq, leading to an estimated million deaths, is occupying Afghanistan, bombing Pakistan and Libya, and threatening Iran. The United States’ and its allies’ control over many developing countries’ economic policies through the IMF, World Bank and other institutions has also caused a lot of damage over the past few decades.

So, a shift of power toward a more multipolar world is likely to give us a more PEACEFUL and just world. In fact, it is already happening: the majority of South America, for example, is now governed by democratic left governments that have produced positive reforms that benefit the majority - something that was practically impossible to achieve while Washington dominated the region. And of course, the vast majority of people in the United States also stand to benefit from a smaller US role in the world, as we transition back to a republic from an EMPIRE - less spending on senseless wars, fewer casualties, fewer enemies, less distraction from our real problems at home.

China’s foreign policy is mainly geared toward securing the raw materials and trade that will fuel its growth and development. This is done through commercial transactions. Of course, its corporations like those of the rich countries - have come under criticism in various countries. But China does not try to tell other countries what their foreign policy towards other countries, or their overall economic policies, should be as the United States often does. This is an important difference between a country that pursues its own national and economic interests, and an empire that seeks to impose its own order on the world.

It is always possible that China, once it becomes a rich country - and this is many years away - could develop imperial ambitions. But so far, its leadership seems to see China as a developing country seeking to become a high-income country, and doesn’t see a role for empire-building in this process. “Hide brilliance, cherish obscurity,” Chinese leader Deng Xioaping once said.

A few months ago, press reports, using an exchange rate measure of GDP, announced that China had become the world’s “second largest economy” just this year. But by a purchasing power parity (PPP) measure, which adjusts for the difference in many prices between China and the US, China had become the second largest economy years ago. A technical matter: if we measure China’s economy in dollars at current exchange rates, it reached $5.9tn in 2010, as compared with $14.7tn for the US. By a purchasing power parity measure, its economy reached $10.1tn in 2010. It is that measure that the IMF projects to grow to $18.98tn in 2016, putting the US in second place at $18.81tn.

However, it is likely that even the IMF’s PPP measure understates China’s GDP: economist Arvind Subramanian has estimated that China’s PPP GDP in 2010 was already about even with that of the United States. An IMF spokesperson, quoted this week by the Financial Times, weighed in on the debate:

“The IMF considers that GDP in purchase power parity (PPP) terms is not the most appropriate measure for comparing the relative size of countries to the global economy, because PPP price levels are influenced by non-traded services, which are more relevant domestically than globally ֖ The Fund believes that GDP at market rates is a more relevant comparison. Under this metric, the US is currently 130% bigger than China, and will still be 70% larger by 2016.”

It is true that the “market rate” measure is better for some comparisons. But one important place where the PPP measure is more relevant is in military spending. The cost of producing a military plane and training a pilot in China is much lower than in the United States. Washington’s current policy is to maintain military supremacy in Asia, but an arms race with China could make the cold war look cheap by comparison. The Soviet Union’s economy was just a quarter of United States’ economy when we had that arms race. If the US were to have a serious arms race with China, we could forget about Medicare, social security and most of what our federal government spends money on.

Fortunately, a new cold war with China is not in the cards for now. But the size of China’s economy is another good reason to make sure that it doesn’t happen.


Bad Moon Rising
Part 1 - Part 2 - Part 3 - Part 4 - Part 5
Part 6 - Part 7 - Part 8 - Part 9 - Part 10
Part 11 - Part 12 - Part 13 - Part 14 - Part 15
Part 16 - Part 17 - Part 18 - Part 19 - Part 20
Part 21 - Part 22 - Part 23 - Part 24 - Part 25
Part 26 - Part 27 - Part 28 - Part 29 - Part 30
Part 31 - Part 32 - Part 33 - Part 34 - Part 35
Part 36 - Part 37 - Part 38 - Part 39 - Part 40
Part 41 - Part 42 - Part 43 - Part 44 - Part 45
Part 46 - Part 47 - Part 48 - Part 49 - Part 50
Part 51 - Part 52 - Part 53 - Part 54

Posted by Elvis on 04/30/11 •
Section Bad Moon Rising
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Sunday, April 24, 2011

The Class of 2011

High unemployment among new college graduates in particular underscores the fact that todays unemployment problem did not arise because workers don’t have the right skills. Nor is high unemployment for well-educated young workers the result of a mass shift among undergraduates toward the wrong major, a lack of motivation or work ethic, or even lack of skills in finding jobs. The class of 2011 is one of the many casualties of a lack of demand for workers in the overall economy. When recovery comes to the broader labor market, it will come to the youth labor market as well. Unfortunately, most economic indicators suggest that such a recovery will be excruciatingly slow.
- Heidi Shierholz , EPI

Young workers face a dire labor market without a safety net

By Heidi Shierholz and Kathryn Anne Edwards
Economic Policy Institute
April 20, 2011

The Great Recession left a crater in the labor market that has been devastating for unemployed Americans of all ages. After more than two years of unemployment at well over 8%, we have a hole of more than 11 million jobs, with average spells of unemployment lasting nearly nine months. But the weak labor market has been particularly tough on young workers. In 2010, the unemployment rate for workers age 16-24 was 18.4% - the worst on record in the 60 years that this data has been tracked. Though the labor market has started to slowly recover, the prospects for young high school and college graduates remain grim. This BRIEFING PAPER examines the dire labor market confronting young workers and concludes with ways that government policy could help. Specifically, our analyses found the following for calendar year 2010:

· The unemployment rate for 16- to 24-year-old workers averaged 18.4%, compared with 9.6% for U.S. workers overall.

· Young high school graduates have been hardest hit: The unemployment rate for high school graduates under age 25 who were not enrolled in school was 22.5%, compared with 9.3% for college graduates of the same age.

· Young high school graduates are not keeping pace with their older peers: Their 22.5% unemployment rate is more than double the 10.3% rate among high school graduates age 25 and older.

· While their degrees afford them more opportunities in the labor market than other young workers, young college graduates still lag far behind older college-educated workers: 9.3% of them are unemployed, more than double the 4.7% unemployment rate for college graduates age 25 and older.

· Since unemployment among young college graduates still shows no improvement, the class of 2011 will likely face the highest unemployment rate for young college graduates since the Great Recession began.

· Young blacks and Hispanics are suffering disproportionately. The unemployment rate for black high school graduates under age 25 and not enrolled in school was 31.8%, compared with 22.8% for Hispanic high school graduates and 20.3% for white high school graduates. The unemployment rate for young black college graduates was 19.0%, compared with 13.8% for young Hispanic graduates and 8.4% for young white graduates.

· Young workers as a group have not been sheltering in schoolӔ during this downturn. School enrollment rates since the start of the Great Recession have not increased by noticeably more than the long-term trend.


Posted by Elvis on 04/24/11 •
Section Dying America
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Thursday, April 07, 2011

Jobs Picture March 2011

Why the Middle-Aged Are Missing Out on New Jobs

By Rick Newman
April 1, 2011

Jobs are back. Just not for everybody.

Like many other things in the stutter-step economic recovery, the job market is finally recovering, but progress is uneven and some people are being left out. The latest jobs report, for example, shows that the economy created 216,000 jobs in March, for a total of about 1.9 million new jobs since employment levels bottomed out at the end of 2009. That’s a healthy pace of job growth that will help bring down the uncomfortably high unemployment rate, and, with luck, cement the recovery.

But digging into the numbers reveals some of the unusual ways that work and retirement may be permanently changing for millions of Americans. Most of the new jobs created since the end of 2009, for one thing, are going to workers under the age of 34, or over the age of 55. Employment levels for middle-aged workers, meanwhile, are stagnant or still falling. Here’s a breakdown:

Age group- Job gains last 15 months - Unemployment rate

All adults 16 and over 1.9 million 8.8%
16 - 24 490,000 17.6%
25 - 34 709,000 9.1%
35 - 44 -143,000 7.2%
45 - 54 -454,000 7.1%
55 and over 1.3 million 3.1%


Posted by Elvis on 04/07/11 •
Section Dealing with Layoff
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Friday, April 01, 2011

Cell Phone Tracking

It’s Tracking Your Every Move and You May Not Even Know

By Noam Cohen
NY Times
March 26, 2011

A favorite pastime of Internet users is to share their location: services like Google Latitude can inform friends when you are nearby; another, Foursquare, has turned reporting these updates into a game.

But as a German Green party politician, Malte Spitz, recently learned, we are already continually being tracked whether we volunteer to be or not. Cellphone companies do not typically divulge how much information they collect, so Mr. Spitz went to court to find out exactly what his cellphone company, Deutsche Telekom, knew about his whereabouts.

The results were astounding. In a six-month period from Aug 31, 2009, to Feb. 28, 2010, Deutsche Telekom had recorded and saved his longitude and latitude coordinates more than 35,000 times. It TRACED HIM from a train on the way to Erlangen at the start through to that last night, when he was home in Berlin.

Mr. Spitz has provided a rare glimpse - an unprecedented one, privacy experts say of what is being collected as we walk around with our phones. Unlike many online services and Web sites that must send cookies to a user’s computer to try to link its traffic to a specific person, cellphone companies simply have to sit back and hit record.”

“We are all walking around with little tags, and our tag has a phone number associated with it, who we called and what we do with the phone,” said Sarah E. Williams, an expert on graphic information at COLUMBIA UNIVERSITY’S architecture school. “We don’t even know we are giving up that data.”

Tracking a customers whereabouts is part and parcel of what phone companies do for a living. Every seven seconds or so, the phone company of someone with a working cellphone is determining the nearest tower, so as to most efficiently route calls. And for billing reasons, they track where the call is coming from and how long it has lasted.

“At any given instant, a cell company has to know where you are; it is constantly registering with the tower with the strongest signal,” said Matthew Blaze, a professor of computer and information science at the University of Pennsylvania who has testified before Congress on the issue.

Mr. Spitz’s information, Mr. Blaze pointed out, was not based on those frequent updates, but on how often Mr. Spitz checked his e-mail.

Mr. Spitz, a privacy advocate, decided to be extremely open with his personal information. Late last month, he released all the location information in a publicly accessible Google Document, and worked with Zeit Online, a sister publication of a prominent German newspaper, Die Zeit, to map those coordinates over time.

This is really the most compelling visualization in a public forum I have ever seen,Ӕ said Mr. Blaze, adding that it shows how strong a picture even a fairly low-resolution location can give.Ӕ

In an interview from Berlin, Mr. Spitz explained his reasons: “It was an important point to show this is not some kind of a game. I thought about it, if it is a good idea to publish all the data - I also could say, O.K., I will only publish it for five, 10 days maybe. But then I said no, I really want to publish the whole six months.”

“In the United States, telecommunication companies do not have to report precisely what material they collect,” said Kevin Bankston, a lawyer at the Electronic Frontier Foundation, who specializes in privacy. He added that based on court cases he could say that “they store more of it and it is becoming more precise.:

“Phones have become a necessary part of modern life,” he said, objecting to the idea that “you have to hand over your personal privacy to be part of the 21st century.”

In the United States, there are law enforcement and safety reasons for cellphone companies being encouraged to keep track of its customers. Both the F.B.I. and the Drug Enforcement Administration have used cellphone records to identify suspects and make arrests.

If the information is valuable to law enforcement, it could be lucrative for marketers. The major American cellphone providers declined to explain what exactly they collect and what they use it for.

Verizon, for example, declined to elaborate other than to point to its privacy policy, which includes: “Information such as call records, service usage, traffic data,” the statement in part reads, “may be used for marketing to you based on your use of the products and services you already have, subject to any restrictions required by law.”

Sense Networks, a company that uses data from AT&T, uses anonymous location information “to better understand aggregate human activity.” One product, CitySense, makes recommendations about local nightlife to customers who choose to participate based on their cellphone usage. (Many smartphone apps already on the market are based on location but that’s with the consent of the user and through GPS, not the cellphone company’s records.)

Because of Germany’s history, courts place a greater emphasis on personal privacy. Mr. Spitz first went to court to get his entire file in 2009 but Deutsche Telekom objected.

For six months, he said, “there was a Ping Pong game” of lawyers letters back and forth until, separately, the Constitutional Court there decided that the existing rules governing data retention, beyond those required for billing and logistics, were illegal. Soon thereafter, the two sides reached a settlement: “I only get the information that is related to me, and I don’t get all the information like who am I calling, who sent me a SMS and so on,” Mr. Spitz said, referring to text messages.

Even so, 35,831 pieces of information were sent to him by Deutsche Telekom as an encrypted file, to protect his privacy during its transmission.

Deutsche Telekom, which owns T-Mobile, Mr. Spitzs carrier, wrote in an e-mail that it stored six months of data, as required by the law, and that after the court ruling it immediately ceased storing data.

And a year after the court ruling outlawing this kind of data retention, there is a movement to try to get a new, more limited law passed. Mr. Spitz, at 26 a member of the Green Party’s executive board, says he released that material to influence that debate.

“I want to show the political message that this kind of data retention is really, really big and you can really look into the life of people for six months and see what they are doing where they are.”

While the potential for abuse is easy to imagine, in Mr. Spitz’s case, there was not much revealed.

“I really spend most of the time in my own neighborhood, which was quite funny for me,” he said. “I am not really walking that much around.”

“Any embarrassing details? The data shows that I am flying sometimes,” he said, “rather than taking a more fuel-efficient train. Something not that popular for a Green politician.”



Hill eyes phone-tracking policies

By Tony Romm
March 30, 2011

Capitol Hill is taking new interest in the ways AT&T, Verizon, Sprint and T-Mobile track their own customers’ whereabouts.

Reps. Ed Markey (D-Mass.) and Joe Barton (R-Texas), co-chairmen of the Congressional Bipartisan Privacy Caucus, sent letters Tuesday to the four wireless providers, asking them to detail at length how they collect, use and store cell phone location data.

The letters follow a story in The New York Times this week that revealed the extent to which Deutsche Telekom the German company that seeks to sell T-Mobile to AT&T ֖ had stored data on the whereabouts of Malte Spitz, a Green Party politician. The Times discovered that Deutsche Telekom had tracked the German lawmaker’s longitude and latitude coordinates more than 35,000 times over a six-month period.

Cell phone providers typically track the location of a customer’s iPhone, BlackBerry, Android or other device as a means of servicing calls with the closest cell towers. Experts told the Times that providers and phones perform similarly when users access their e-mail accounts.

But the extent to which Deutsche Telekom had tracked Spitz has prompted Markey and Barton to ask AT&T, Verizon, Sprint and T-Mobile to explain their own collection practices.

In the letters sent Tuesday, the members ask each company’s CEO to “describe the policies and procedures your company utilizes to comply with Section 222 of the Communications Act.” That provision, which Markey authored, requires “express prior authorization of the customer for use, disclosure of or access to the customer’s location information for commercial purposes,” according to the letters.

Markey and Barton also ask the telecom giants to explain how each uses and stores the data and for how long. They request to know “any other mechanisms” deployed to take note of location, such as “how frequently the customer checks her e-mail,” and why. They also inquire whether any location details are used for marketing purposes, and if the companies make it a “common practice . . . to inform the customer when data is being collected and how this data is being used.”

The letters asked AT&T, Verizon, Sprint and T-Mobile to respond within 15 days, or by April 19.

The members interests in the issue comes at a time when members of Congress are eyeing a host of issues in the realm of cell phone privacy. Sen. Ron Wyden (D-Ore.), for one, is preparing legislation that would set new rules for cell phone location tracking as it relates to law enforcement.



Judge OKs Warrantless Cell-Site Data in Landmark Privacy Case

By David Kravets
December 18, 2012

Federal prosecutors may introduce cell-site data obtained without a warrant in the retrial of a District of Columbia drug dealer who was the subject of one of the Supreme Courts biggest electronic privacy decisions in decades.

The decision by U.S. District Judge Ellen Segal Huvelle of the District of Columbia is a victory for prosecutors who are shifting their focus to warrantless cell-tower locational tracking of suspects in the wake of the Supreme Court ruling that law enforcement SHOULD ACQUIRE PROBABLE-CAUSE WARRANTS from judges to affix GPS devices to vehicles. (.pdf) Just after the high court’s January decision, the FBI PULLED THE PLUG on 3,000 GPS-tracking devices.

Huvelle’s ruling came as part of pretrial proceedings in the prosecution of Antoine Jones, the previously convicted drug dealer whose conviction and life sentence was reversed by the Supreme Court which found the government’s placement of a GPS tracker on his vehicle was an illegal search.

Until the Supreme Court ruled in Jones case, the lower courts were mixed whether the police could secretly affix a GPS device on a suspect’s car without a warrant. And despite Huvelle’s ruling, the lower courts are still divided about whether a probable-cause warrant is required to obtain cell-site data.

Lawyers for Jones maintain that the authorities should have obtained a probable cause warrant for the data, saying they government “seeks to do with cell site data WHAT IT CANNOT DO with the suppressed GPS data.”

But Huvelle sidestepped the Fourth Amendment argument and declined to analyze whether the Supreme Court’s ruling in Jones case has any bearing on whether cell-site data can be used without a warrant.

Instead, she focused on a doctrine called the ”GOOD-FAITH EXCEPTION,” in which evidence is not suppressed if the authorities were following the law at the time. The data in Jones’ case was coughed up in 2005, well before the Supreme Courts ruling on GPS.

“The court, however, need not resolve this vexing question of Fourth Amendment jurisprudence, since it concludes that the good-faith exception to the exclusionary rule applies,” she wrote.

Monday’s decision was first reported by Mike Scarcella of The Blog of Legal Times.

With that, prosecutors are legally in the clear to use Jones phone location records without a warrant. Among other things, the government wants to use the records to chronicle where Jones was when he made and received about four months of mobile phone calls in 2005.  The records show each call the defendant made or received, the date and time of calls, the telephone numbers involved, the cell tower to which the phone users connected at the beginning and/or end of the call and the duration of the call.

The authorities only had to show that such information was ғrelevant to an investigation to get a judge to authorize Cingular to turn them over. No probable cause was needed.

According to the authoritiesԒ application to a judge for the data:

Knowing the location of the trafficker when such telephone calls are made will assist law enforcement in discovering the location of the premises in which the trafficker maintains his supply narcotics, paraphernalia used in narcotics trafficking such as cutting and packaging materials, and other evident of illegal narcotics trafficking, including records and financial information,Ӕ the government wrote in 2005, when requesting Jones cell-site data.

That data was not introduced at trial, as the authorities used the GPS data instead.

Even so, the Obama administration claimed that the high courtҒs GPS decision was wholly inapplicableӔ when it comes to cell-site data.

The administration noted that the high court said the physical act of affixing a GPS device to a vehicle amounts to a search and generally requires a warrant. But when the government merely compels a third-party service provider to produce routine business records in its custody,Ӕ the government wrote, no physical intrusion occurs, and the rule in Jones is therefore wholly inapplicable.Ӕ (.pdf)


Posted by Elvis on 04/01/11 •
Section Privacy And Rights • Section Broadband Privacy
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