8 August 2018   Leave a comment

The Trump Administration has used economic sanctions (including tariffs) more frequently than most other US administrations.  According to Carol Morello, writing for the Washington Post, notes that just in the single month of February 2018:

“One package of measures issued by the Treasury Department targeted North Korea, with dozens of ships, companies and other entities cited for shipping coal and fuel to the country in violation of previous sanctions.

“Before the month was over, sanctions had also been slapped on Colombian drug traffickers, smugglers of Libyan oil and individuals accused of sex abuse and recruiting child soldiers in Congo.

“More sanctions rained down on abettors of various terrorist groups in Pakistan, Somalia and the Philippines, plus Hezbollah in Lebanon. And the State Department added to its list of designated terrorist groups organizations in the Philippines, West Africa, Bangladesh and Burkina Faso.”

 The evidence, however, suggests that the effectiveness of sanctions is limited.

The law firm, Gibson Dunn did an analysis of US sanctions:  “The Trump administration continued a nearly two-decade bipartisan trend of increasing reliance on sanctions.  Across the full range of sanctions programs, nearly 1,000 entities and individuals were added to the Specially Designated Nationals and Blocked Persons (the “SDN” or “black”) list.  (see below).  This represented a nearly 30 percent increase over the number added during President Obama’s last year in office, and a nearly three-fold increase over the number added during President Obama’s first year in office.”

US Sanctions over Time

Sanctions Designations by Year

 

Researchers are suggesting that greenhouse gas emissions are coming very close to creating a “hothouse” earth.  Some researchers have identified the current age in which we live as the “Anthropocene”, i.e., an age when human activities dominate the development of the earth as a system. These researchers believe that human activity is more important than the geologic processes that have shaped the earth since its beginnings:

“The knowledge that human activity now rivals geological forces in influencing the trajectory of the Earth System has important implications for both Earth System science and societal decision making. While recognizing that different societies around the world have contributed differently and unequally to pressures on the Earth System and will have varied capabilities to alter future trajectories, the sum total of human impacts on the system needs to be taken into account for analyzing future trajectories of the Earth System.”

The researchers do not believe that a “hothouse” earth is inevitable, but that if it is to be averted, significantly greater actions need to be taken immediately.

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Branko Milanovic is one of my favorite economists and has done pioneering work on the question of income inequality.  There is little question that in nominal terms, the US has more extreme income inequality than other developed countries.  But some question whether the raw data really reveals the state of the poor in the US and they argue that welfare programs and the tax mechanism actually favor the poor, and that income alone does not accurately capture the quality of life o the poor in the US.  Milanovic and others have released a paper which suggests that these transfers do not raise the standard of living for the US poor to the level consistent with the status of the poor in other rich countries.  Milanovic summarizes the conclusions of the paper for Global Policy by comparing the impact of the transfers in the US and Germany:

“The ‘poor’ always gain from redistribution but US gains are always smaller than German gains. What is noticeable is that the gains from social transfers were about the same in the US and Germany until 1995, then increased in both countries. In the US they were at their peak in 2010 when unemployment benefits were extended by Obama and afterwards, since US welfare is very modest, they rapidly went down.

“Even more interesting is the evolution of the gains from direct taxes. Here we see that the American “poor” gain throughout less than the “poor” in Germany and that the level of gains does not seem to change much in the US.”
The difference between Germany and the US can be demonstrated graphically:
                                   
The results again suggest that addressing the problem of income inequality in the US requires a more focused and determined effort.

Posted August 8, 2018 by vferraro1971 in World Politics

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