Violence has broken out in Egypt as secularists in Egypt protested new powers asserted by President Morsi seemed to fly in the face of the constitutional processes of reform. The violence comes just a few days after Morsi successfully brokered a cease-fire between Hamas and Israel, indicating that while the majority of Egyptians favor his peace-keeping role, they care more about domestic politics and the state of the Egyptian economy. Just as in the US, domestic policy trumps foreign policy. The protests, however, will certainly give the US pause in embracing Morsi fully as an ally, something that seemed almost assured a few days ago.
The European Union discussion on its new 7-year budget has broken down. The contentious issues included the British demand for greater austerity and the French demand for maintaining the very expensive (and trade-violating) agricultural subsidies. Acrimony is not usual in these discussions, but the EU has an informal rule that the budget should never be more than 1% of the total Gross Domestic Product of the Union itself. The proposed budget was within this tradition, but the fissures within the Union–essentially along the same lines as the debt crises within the Union–appear to be quite serious. Since the EU as a whole seems headed for a recession, the budget discussions could be quite protracted.
As we near our discussion on globalization, it is perhaps instructive to think a little about how wages abroad affect domestic wages. US wages have remained stagnant for about 40 years and most Americans complain about jobs going overseas and how low wages abroad are responsible for the lack of wage growth in America. Walmart, however, is an example where that explanation is not completely accurate. Here’s a guide to thinking about the union controversy at Walmart.
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