Punting the Pundits

Three pieces of seemingly good economic news dominated the headlines last week.

The official unemployment rate dropped to 7.0 percent, its lowest level since 2008, reflecting the fact that the economy has created upwards of 200,000 jobs for each of the past two months.

The GDP growth rate for the third quarter was revised upwards to an impressive 3.6 percent.

And while money markets briefly lurched downward out of fear that the good news would cause the Federal Reserve to slow down its program of massive bond purchase, quite possibly raising interest rates and aborting a stronger recovery, the markets quickly shook off those fears. Investors and traders evidently concluded that the economy had found a Goldilocks spot of not too cold and not too hot. Stock indexes closed the week only a shade below their historic highs.

Should we be encouraged? Is this, at long last, the recovery of broadly shared prosperity we’ve been waiting for?

Not yet, I’m afraid.

Robert Reich: JP Morgan Chase, the Foreign Corrupt Practice Act, and the Corruption of America

The Justice Department has just obtained documents showing that JPMorgan Chase, Wall Street’s biggest bank, has been hiring the children of China’s ruling elite in order to secure “existing and potential business opportunities” from Chinese government-run companies. “You all know I have always been a big believer of the Sons and Daughters program,” says one JP Morgan executive in an email, because “it almost has a linear relationship” to winning assignments to advise Chinese companies. The documents even include spreadsheets that list the bank’s “track record” for converting hires into business deals.

It’s a serious offense. But let’s get real. How different is bribing China’s “princelings,” as they’re called there, from Wall Street’s ongoing program of hiring departing U.S. Treasury officials, presumably in order to grease the wheels of official Washington? Timothy Geithner, Obama’s first Treasury Secretary, is now president of the private-equity firm Warburg Pincus; Obama’s budget director Peter Orszag is now a top executive at Citigroup.

Or, for that matter, how different is what JP Morgan did in China from Wall Street’s habit of hiring the children of powerful American politicians?

Richard (RJ) Eskow: The Democrats’ “Third Way” Quarrel Could Change Your Future

There was a big dust-up in the Democratic Party last week, triggered by a somewhat incoherent op-ed in the Wall Street Journal from the leaders of a Wall Street-funded “think tank”/lobbying group called Third Way. Many of the responses dealt with the op-ed’s attack on Sen. Elizabeth Warren, but don’t be distracted by that. As Sen. Warren would undoubtedly agree, the issues involved are much more important than the personalities.

As politicians affiliated with Third Way hasten to distance themselves from the op-ed, the question remains: Why are Democrats affiliated with a group which works so strenuously to gut Democratic programs? Voters deserve more than platitudes from these politicians. They deserveclear answers about the issues.

Juan Cole: Solar Would Be Cheaper: US Pentagon Has Spent $8 Trillion to Guard Gulf Oil

It has cost the United States $8 trillion to provide military security in the Gulf since 1976. According to Roger Stern, a Princeton economist, the US has spent as much on Gulf security as it spent on the entire Cold War with the Soviet Union! In recent years through 2010 it has been $400 billion a year, though the US withdrawal from Iraq at the end of 2011 and the gradual withdrawal from Afghanistan this year and next presumably means that the figure is substantially reduced. Still, we have bases in Kuwait, Qatar and elsewhere, and a Naval HQ in Bahrain, none of which is cheap. If it were $200 billion a year, that is a fair chunk of the budget deficit the Republican Party keeps complaining about. And if we could get that $8 trillion back, it would pay down half of the national debt. [..]

The right argument is that we shouldn’t be using petroleum and nor should our allies. The supreme tragedy is that the US has bankrupted itself ensuring military security for the oil-producing nations of the Gulf when oil production is destroying the world. We need a crash program to get the world off petroleum, some 70% of which is used to power automobiles. People should be given incentives to move back to cities so they don’t have to commute. Better public transport is needed. Portland is an example of how a concerted push can change the urban transportation situation quickly. 8% of commuters in Portland now get to work on bicycle, 10 times more than any other American city. Portland adopted a global warming action plan in 1993 and has renewed it, and demonstrates what can be accomplished in only 20 years if a city puts its mind to it. And, we should move as quickly as possible to hybrid plugins or where practical electric vehicles (EVs).

Michael T. Klare: Rushing for the Arctic’s Riches

WHILE many existing oil and gas reserves in other parts of the world are facing steep decline, the Arctic is thought to possess vast untapped reservoirs. Approximately 13 percent of the world’s undiscovered oil deposits and 30 percent of its natural gas reserves are above the Arctic Circle, according to the United States Geological Survey. Eager to tap into this largess, Russia and its Arctic neighbors – Canada, Norway, the United States, Iceland and Denmark (by virtue of its authority over Greenland) – have encouraged energy companies to drill in the region. [..]

For Russia, which recently seized a Greenpeace ship and is prosecuting 30 of the group’s activists for attempting to scale an oil platform, the temptation to exploit the Arctic Ocean is especially powerful. Russia’s economy is heavily dependent on exports of oil and gas, and the government relies on these sales for much of its income. Until recently, the Russians could draw on reservoirs in western Siberia to satisfy their needs, but now, with many of these fields in decline, they are counting on Arctic supplies to maintain current production levels. “Our first and main task is to turn the Arctic into Russia’s resource base of the 21st century,” Dmitri A. Medvedev, then the president, declared in 2008.

The Russians have explored drilling options in several offshore areas of the Arctic. In the Pechora Sea, above northwestern Siberia, the Russian energy giant Gazprom has installed its Prirazlomnaya platform – the one protesting Greenpeace activists attempted to board. Further east, in the Kara Sea, the state-owned Rosneft is collaborating with ExxonMobil to develop promising deposits; Rosneft has also teamed up with Statoil of Norway and Eni of Italy to investigate prospects in the Barents Sea.