1. The Return of Passenger Rail?
Governor Hassan Ceremoniously Signs Legislation Moving NH Closer to Expanding Passenger Rail to Manchester
by NH Labor News, nhlabornews.com, August 27, 2015
Nashua, NH – Governor Maggie Hassan ceremoniously signed two bills this morning in Nashua pushing the state closer to extending passenger rail to Manchester along the New Hampshire Capitol Corridor. Senate Bill 63 will help make the Rail Transit Authority (NHRTA) both more efficient and more appealing to federal agencies seeking to invest in states with well-organized rail authorities, and Senate Bill 88 establishes a committee to study public-private partnerships for intermodal transportation projects. During the signing ceremony at Nashua City Hall, Governor Hassan was joined by NHRTA Chairman Michael Izbicki, State Senator Bette Lasky, Nashua Mayor Donnalee Lozeau, Michael Skelton, President and CEO of the Greater Manchester Chamber of Commerce, and Tracy Hatch, President and CEO of the Greater Nashua Chamber of Commerce, along with business leaders and rail supporters.
“Senate Bill 88 and Senate Bill 63 mark important steps in the process of expanding rail along New Hampshire’s Capitol Corridor, which could have a transformative impact on our state’s economy,” said Michael Izbicki, Chairman of the New Hampshire Rail Transit Authority. “Along with helping NHRTA operate more efficiently, this legislation could help open the door for New Hampshire to seek out alternative funding sources for critical infrastructure improvements, including rail. NHRTA, the state’s two largest Chambers of Commerce, 68% percent of New Hampshire residents and a growing list of businesses all agree that we need to invest in the state’s rail infrastructure, and this legislation gets us closer to that goal.”
Along with streamlining the membership of NHRTA’s board of directors, Senate Bill 63 also establishes an advisory board for NHRTA. Under Senate Bill 88, a legislative committee will identify potential revenue sources to fund passenger rail and other intermodal transportation options. These new sources of funding could help shift the burden from the state and enable New Hampshire to invest in its crumbling transportation infrastructure. The legislative committee has already begun studying these types of partnerships.
“A modern, safe transportation infrastructure is critical to the success of our people and businesses, and bringing commuter rail from Boston to Nashua and Manchester will help ensure that our people and businesses have the full range of modern transportation options that they need, help bring more young people to New Hampshire and help spur economic growth. Commuter rail is one of my priorities for attracting more young people to the Granite State and encouraging innovative economic growth, and I am proud to have signed these two bills that represent an important part of the process to moving commuter rail forward into law.”
Across the country, public-private partnerships are becoming a more viable option for financing needed infrastructure improvements. With $1 billion in private financing, a public-private partnership in Denver called the Eagle P3 Project is helping to construct three new commuter rail lines. The Louisville and Southern Indiana Bridges Authority is developing a major tunnel and bridge project as part of the Ohio River Bridges Project through a public-private partnership. The Virginia Department of Transportation is relying on a public-private partnership to redevelop a 14-mile stretch of its Capital Beltway, creating a managed-lane model.
“These types of partnerships carry a number of potential benefits, like engaging private sector innovation to help drive down costs which can help and sustain price certainty, even in long-term budgeting,” Izbicki added.
The bill signing ceremony today comes on the heels of an announcement last week that the Southern New Hampshire Planning Commission (SNHPC) had been awarded a $30,000 challenge grant to continue public education and advocacy for advancing commuter rail to Manchester. In an effort to keep up the momentum, SNHPC is using the challenge grant to engage key stakeholders, business leaders and the public to continue to build on a still-growing base of rail supporters.
Earlier this year, the state released the NH Capitol Corridor Study, which analyzed the 73-mile corridor from Boston, MA to Concord, NH. The study indicated that the Manchester Regional Rail alternative, which would serve two stations in Nashua, one in downtown Manchester and one at the Manchester-Boston Regional Airport, would offer the greatest economic benefit with a relatively moderate investment.
The next step in the rail expansion process is the critical project development phase, which costs $4 million and consists of establishing a detailed financial plan, preliminary engineering, environmental permitting and preparation of funding applications for submission to the Federal Transit Administration and Federal Rail Administration.
To learn more about efforts to expand passenger rail in New Hampshire, please visit www.nhrta.org.
About the NH Capitol Corridor Study
In early 2015, a comprehensive analysis of the 73-mile corridor from Boston, MA to Concord, NH known as the NH Capitol Corridor Study was released which indicated that the Manchester Regional Rail alternative, which would serve two stations in Nashua, one in downtown Manchester and one at the Manchester-Boston Regional Airport, would offer the greatest economic benefit with a relatively moderate investment. After reviewing the results of the study, NHRTA voted to formally support extending passenger rail service to Manchester, with continued interest in extending passenger rail to Concord.
According to the study, the Manchester Regional Rail alternative would create approximately 230 jobs through construction of the rail line and an additional 3,390 construction jobs would be created to build real estate development generated by rail. Beginning in 2030, the expansion of rail would create 1,730 new jobs every year. Real estate development would add $750 million to the state’s output between 2021 and 2030, with reinvested earnings would add $220 million per year beyond 2030.
The total capital investment to bring passenger rail to Manchester is estimated at $245.6 million, but New Hampshire’s investment could shrink to $72 million with contributions from regional partners coupled with 50% federal support. The investment required to cover debt service on a 20-year bond and annual operating and maintenance costs would be $11 million annually.
About the NH Rail Transit Authority
The NH Rail Transit Authority (NHRTA) was established in 2007 and is tasked with encouraging and overseeing the redevelopment of passenger rail services throughout New Hampshire with an initial emphasis on the NH Capitol Corridor. The NHRTA is administratively attached to the New Hampshire Department of Transportation and consists of a nine-member board of directors comprised of the NH Department of Transportation, the NH Department of Resources and Economic Development, a member of the NHRTA advisory board, two representatives from the House Transportation Committee and four appointees by the governor. NHRTA’s board of directors takes guidance from an advisory board comprised of broad based membership from 14 cities and towns, 9 regional planning commissions, the NH College and University Council, the Manchester-Boston Regional Airport and three members appointed by the governor. Learn more at www.nhrta.org.
2. Republican Tax Cuts and the Hole in the Budget
NH GOP Playing “Games” With Budget By Forcing Tax Cuts That “Do Not Pay For Themselves”
by NH Labor News, nhlabornews.com, August 27, 2015
GOP-Appointed CBO Director Makes Clear “Tax Cuts Do Not Pay For Themselves”
Concord, N.H. – As Republicans in Concord continue to refuse to negotiate in good faith on a responsible budget compromise, Senate President Chuck Morse admitted “he could not guarantee” that the unpaid-for corporate tax cuts Republicans are pushing would promote economic growth.
Morse added, “We never came in and said, we’ll lower the business taxes, and we’ll have all this growth.”
House Speaker Shawn Jasper previously admitted that Republicans’ unpaid-for tax cuts would create a massive budget hole, writing “I do not believe that cutting [corporate taxes] will bring in more revenue, nor do I believe that by themselves they will make New Hampshire a more attractive state for businesses to locate to or to expand.”
“It’s completely irresponsible that Republicans like Chuck Morse and Shawn Jasper are continuing to push unpaid-for corporate tax cuts that they themselves admit would create a budget hole while not promoting economic growth,” said New Hampshire Democratic Party Chair Ray Buckley. “All you have to do is look around the country at places like Kansas that have already tried these failed Koch Brothers economic policies to see that all they bring is rivers of red ink and cuts to critical economic priorities.”
The Hill also reports, “The director of the nonpartisan Congressional Budget Office (CBO), who was appointed by GOP lawmakers earlier this year, said Tuesday that tax cuts don’t pay for themselves… ‘No, the evidence is that tax cuts do not pay for themselves,’ Hall said. ‘And our models that we’re doing, our macroeconomic effects, show that.’”
Yesterday, Neal Kurk said out loud what observers have long known to be true: New Hampshire Republicans are playing political games with the state’s budget and economy.
When asked why Republicans blocked funding to pay for road maintenance, Kurk told NHPR, “some of it has to do with the fact that some of us believe that there are consequences to the Governor’s veto of the budget and one of them is that things that normally would have gotten done, will not get done, or will get delayed.”
The Concord Monitor also reported, “Partisan politics were on full display at the meeting Wednesday” as Republicans blocked transportation funding and tried to score political points against Governor Hassan.
“At least give Neal Kurk points for honesty for admitting that Republicans are deliberately seeking to hurt New Hampshire’s people, businesses and economy as they try to score political points against Governor Hassan,” said New Hampshire Democratic Party Chair Ray Buckley. “It’s no surprise that the Republican legislature’s approval is under water for the first time since 2012 considering that Republicans are now openly admitting that they are trying to harm the state’s economy for their own political gain.”
3. With the Nation's Eyes on Us
Live Free or Trump
Editorial, vnews.com, August 27, 2015
The rise of Donald J. Trump to the top of the Republican presidential heap in New Hampshire polls has national political commentators wondering whether Granite Staters have taken leave of their sensible, substantive approach to vetting the candidates.
As Al Hunt of Bloomberg View put it earlier this week, “For more than a half-century, New Hampshire has been a proving ground for vetting and testing presidential hopefuls, forcing them to hone their political and policy knowledge. If the Trump model prevails, it not only could change the fabric of the party, but also could spell an end to this substantive, searching type of retail politics.”
To which one is tempted to respond: Pat “The Peasants Are Coming With Pitchforks” Buchanan, an unabashed nativist who won the 1996 New Hampshire GOP primary over Bob Dole on a protectionist, anti-NAFTA platform. We’re bound to say that Buchanan had a sort of personal charm that appears foreign to Trump, but perhaps he is the exception that proves the rule that New Hampshire voters take their vetting responsibilities seriously.
So what to make of the Granite State’s current infatuation with Trump, whose appeal is hardly substantive. A focus group consisting of 12 New Hampshire Republicans and independents who back Trump was convened late last month by Bloomberg Politics, and the results suggest that his support amounts to a cult of personality. The focus group subjects were largely unfamiliar with the billionaire’s positions, but loved his business resume and, in particular, his penchant for blunt, tell-it-like-it-is tough talk. His persona appeals to party members frustrated with and angered by “political correctness” and the conventions of modern political campaigns. And if Republicans have proved anything in recent years, it is that anger management is not their strong suit.
Trump’s appeal shouldn’t come as a bolt from the blue. There certainly have been signs in recent years that New Hampshire voters are generally fed up, as demonstrated by their biennial alternation from red to blue and back again. In the 2010 legislative elections, for instance, they voted overwhelmingly Republican, and the party picked up more than 100 seats. That many of those seats were filled by angry males became evident when the new majority focused on social instead of economic issues, trying to repeal gay marriage, tighten abortion restrictions, and push for exemptions from contraception insurance coverage requirements. The voters booted them out in 2012, only to swing back again in 2014.
This year, it has been widely observed that Trump’s anti-immigrant stance has been received with unexpected warmth in New Hampshire, which is about as far away from the Mexican border as you can get and still be in the United States. There is little mystery in this. New Hampshire’s population is aging rapidly and remains overwhelmingly whiter and wealthier than the rest of the country — exactly the sort of voters who see a familiar demographic scene passing away and a scapegoat readily at hand.
We’re not entirely sure that New Hampshire’s reputation for acumen in sorting through the quadrennial batch of presidential candidates was ever fully deserved, but the state has clung desperately to its first-in-the-nation primary status because of the prestige it affords and the economic activity it generates. Now it has come to this: With Trump towering over the rest of the GOP field, the state faces the prospect of embarrassing itself before the rest of the country has a chance to.
AND NATIONALLY
4. The "Scandal" Con
Out of Touch Punditry Should Get a Grip -- Hillary's Email Is Non-Story
by Robert Creamer, huffingtonpost.com, August 24, 2015
A message to the out-of-touch Washington pundit class: get a grip. What was or was not on Hillary Clinton's email server when she was Secretary of State is not a game-changing news story.
In fact, no one outside the chattering class -- and right-wing true believers -- could give a rat's rear about this story -- and there is a good reason: there is no "there" there. If someone really thinks the great "email" story -- or the Benghazi investigation -- are going to sink her candidacy, I've got a bridge to sell them.
Of course, this is not the first time that the media -- with an assist from right-wing political operatives -- have laid into Hillary Clinton in an attempt to create a "scandal" where there was none.
Over the weekend, syndicated columnist Gene Lyons quoted a New York Timeseditorial as saying:
"These clumsy efforts at suppression are feckless and self-defeating." It argued that these actions are "swiftly draining away public trust in (her) integrity."
That editorial actually appeared in January 1994. The Times was expressing outrage at Hillary Clinton's turning over Whitewater documents to federal instigators rather than the press, which, as Lyons pointed out, " had conjured a make-believe scandal out of bogus reporting of a kind that's since become all too familiar in American journalism."
Speaking on NPR's Diane Rehm show, the Atlantic's Molly Ball sounded the same notes 21 years later. The email issue "continued to contribute to the perception that she has something to hide."
The Times' Sheryl Gay Solberg added that the email issue "creates and feeds into this narrative about the Clintons and Mrs. Clinton that the rules are different for them, and she's not one of us." Really?
What might really feed a negative narrative would be the New York Times' own story several weeks ago that falsely accused Ms. Clinton of being under criminal investigation. Which she is not and never was. The Times public editor acknowledged that the story was false and that it feed another narrative: that the New York Timeshad an ax to grind against the Clintons.
Of course the bottom lines of this story are simple:
At the time Ms. Clinton was Secretary of State there was no prohibition against the Secretary of State having a private email server. In fact, no Secretary of State before Ms. Clinton had a government email account.
None of the emails on the Secretary's personal account were classified at the time they were sent or received. That is not in dispute. There is an on-going controversy between various agencies of what ought to be classified in retrospect as the material is released to the public by the State Department, but that does not change the fact that none of it was classified at the time. In fact, one of the several emails at issue actually says the word "unclassified" in the upper left hand corner and can still be accessed by the general public on the State Department web site.
Finally, no one has ever pointed to an instance where the fact that something was on her server instead of a government server had any negative consequences whatsoever.
There is no issue here, period.
And as for the Benghazi "affair," none of the many investigations that have already been completed concerning the events surrounding the death of the American Ambassador to Libya in the Benghazi attack has found a shred of evidence that that Hillary Clinton did anything wrong whatsoever leading up to or in response to that attack.
And frankly if you ask most people about the Benghazi affair they think you're talking about something you rub on your muscles to reduce pain.
So now Congressman Trey Gowdy, who is the Chair of the Select Committee that was set up by the Republicans in the House to once again investigate this non-scandal, has decided to investigate the non-existent issue of the Clinton email server as well -- even though he acknowledges that it has nothing to do with Benghazi.
Not withstanding the lack of substance to any of these issues, people like Chris Cillizza of the Washington Post proclaim that they could be a terrible weight on her candidacy.
Who exactly are these pundits talking to? Rarely have they been so out of touch with the real American electorate. The perceptions and narratives they are discussing are the perceptions and narratives of the insider pundit and political class -- not normal voters.
And the same goes for often-unnamed Clinton backers that are wringing their hands that Clinton has not yet put the email issue behind her.
No one is handed the American presidency -- and that is especially true of a candidates that are not incumbent Presidents.
Every candidate faces many challenges and hurdles to getting elected -- and Hillary Clinton is no different. But the email-server issue is not one of them.
Clinton's campaign completely recognizes that it must fight for every delegate in the primaries and every vote in the general election.
In the general election, she must motivate Democratic base voters to turn out in massive numbers. She must excite new voters -- especially young people and women. And she must persuade undecided voters that she will fight effectively to actually change the rules of the political and economic game so that we have economic growth that benefits every American, not just Corporate CEO's and Wall Street Banks.
These are her real challenges -- and her campaign is focused like a laser on meeting those challenges.
It's time for her supporters to focus on those challenges as well -- and for the media to resist continuing to play its role as enabler of baseless right wing attacks like the great email and Benghazi "scandals" of 2015.
Why Hillary Clinton’s “Emailgate” Is a Fake Scandal
by Kurt Eichenwald, newsweek.com, August
When it comes to the teapot tempest that is the Hillary Clinton email imbroglio, the real controversy isn’t about politics or regulations. It’s about journalism and the weak standards employed to manufacture the scandal du jour.
Because luminaries such as the public editor of The New York Times have dismissed critics of the emailgate coverage as rabid members on one side of a partisan divide—the pro-Hilary screamers versus the anti-Hillary frothers—I feel obligated to cut off that self-satisfied response up front: My opinion of Clinton is on par with my opinion of Jeb Bush. Neither is crazy, stupid or unelectable, which can’t be said about most other politicians stomping their way around Iowa these days. I’m not a Clinton supporter or opponent. I’m a Clinton agnostic.
Now let’s look at the real scandal—the one in journalism that’s been exposed by this whole episode.
There are two parts to emailgate: One, that Clinton used a personal email account when she served as Secretary of State, and the other, that neither she nor her aides preserved the emails. Break out the fainting couches and the smelling salts.
The first article about this episode (sorry, can’t even call it a scandal) appeared in The New York Times. The headline, as it now exists on the Times website, is “Hillary Clinton Used Personal Email Account at State Dept., Possibly Breaking Rules.” So step one of this story—the part so important it hit the headlines—is that Clinton used a personal email account.
In what has to be one of the most snide journalistic defenses in a long time, Margaret Sullivan, the Times public editor, calls detractors of the piece as just Hilary supporters and dismisses most of the criticism by helpfully linking to the 2009 Federal Register, which lists an exceptionally technical series of regulations relating to the use and preservation of emails. She even cites a place to look, section 1236.22b. With all those numbers and letters, and the information coming out of a document as dull as the Federal Register, the story must be true, right?
Well, no. In fact, the very rule that Sullivan cites contradicts the primary point of the Times story. For everyone except the two people who actually followed the link Sullivan posted, here is what the section actually says:
"Agencies that allow employees to send and receive official electronic mail messages using a system not operated by the agency must ensure that federal records sent or received on such systems are preserved in the appropriate agency recordkeeping system."
Catch the problem? The regulation itself, through its opening words, “specifically designates that employees of certain agencies are allowed to use non-federal email systems.” And one of those agencies just happened to be…drumroll please.… The State Department. In other words, not only was the use of a personal email account not a violation of the rules, it was specifically allowed by the rules.
That’s why, after many, many paragraphs of huffing and puffing about how terrible it is that Clinton used a personal email account, the Times article goes on to mention that Secretary of State Colin Powell did the same thing. And, just a tidbit—so did every other Secretary of State up until the current one, John Kerry. Why? Because the rules changed in 2014, after Clinton left office, and now it’s required to use a federal system. If Kerry used a personal account, he would be violating a regulation. Clinton did not.
Now that we’re past the headline and the primary point of the scandal, let’s get to part two of emailgate—that the agencies are required to make sure emails from non-federal accounts are preserved. Here is what the Times article says about that: Clinton "may have violated federal requirements that officials’ correspondence be retained as part of the agency’s record." The article goes on to say that: “Regulations from the National Archives and Records Administration at the time required that any emails sent or received from personal accounts be preserved as part of the agency’s records. But Mrs. Clinton and her aides failed to do so.”
Let’s dismantle this one part at a time. There is a term in journalism for the word may. It’s called a weasel word, which helps readers gloss over what the story is really saying: That the Times doesn’t know if the regulations were violated, but it sure sounds good to suggest that it could have been.
Then there is the part about how “Clinton and her aides failed” to preserve the records. Well, guess what? Under the very same regulation that Sullivan cites, it is not the responsibility of the email senders, recipients or their aides to make sure that the records are preserved. It is the responsibility of the State Department itself, which does so through technical analysis of all of the systems being used. The methods of preservation and ensuring preservation take up a whole page of federal regulations, which pertain to the systems built into the electronic structure. Or, as the regulations permit, the emails can just be printed out.
Let’s wipe a couple of elements off the table right away. Every email that Clinton sent to any federal email account was preserved, automatically. And what kind of preservation systems existed in the server for Clinton’s personal emails that didn’t go into a federal server? Were they copied into the DoD–5015.2 STD-certified product (a lot of techno-speak which means a particular record-keeper)? Was there an automatic relay out of the server into a preservation system? Hell, my email account has that.
The Times article makes it sound like Clinton just opened up a Gmail account and started sending emails without any consideration for the State Department techno-geeks responsible for following the rules and regulations,which, again, allowed for private email accounts to be used. The real scandal would be if Clinton and her aides were the ones who figured out a preservation system, since they were wholly unqualified to do so. Did the State Department fail to follow the preservation regulations? Since Clinton appears to be producing thousands of emails to Congress, which the Republicans then used to gin up this controversy, that’s unlikely.
But what about all the other stories about emailgate? The Times public editor cited those to show that, well, the Times story must be good because other articles have advanced it. And once again, plenty of links.
Let’s see what those links show. A Washington Post story: "A State Department review of Hillary Rodham Clinton’s emails from her time leading the agency could reveal whether she violated security policies with her use of a private email server, a senior department official said Thursday night."
Seriously? A review could determine if she violated the rules? That is what is known as a truism. A federal audit of your taxes could determine whether you violated the tax laws. A medical exam performed today on you could determine whether you have cancer. An inspection of your car tires could determine whether they are not inflated enough. All of those statements are true. And all of them mean…absolutely nothing.
Next, Sullivan links to an Associated Press article that says business records used for Clinton’s email server were registered under the home address for her residence in Chappaqua, New York. The implication: All of these emails were stored at her house, so anyone could break in and steal them. Yet as Clinton said on Tuesday, the server in question is the same one used by former President Bill Clinton and is located on private property, guarded by the Secret Service.
The rest of the stories Sullivan links to show things such as Democrats reacting to the Times story and that Clinton’s daughter Chelsea had an email account on the same domain name. (Which is a truly bizarre point, since every employee at the State Department—down to the lowliest person on the rung of authority—would be using the same domain name as Clinton if she was on the federal system.) Then there’s a statement from the White House press office that President Barack Obama issued guidance that federal employees should use federal emails—without any suggestion when this guidance was given and with specific statements that folks could still use private email accounts if they had document preservation systems in place.
The end question: Was security compromised? Was the process she used inappropriate or create any dangers? Or was it potentially safer, with more protections than exist in the federal system? I don’t know. But what’s sad here is, neither do the reporters who are huffing and puffing about this folderol. And aren’t journalists supposed to know if there is a scandal before declaring that one exists?
5. Sanders: From the Vermont to the National Stage
The phenomenon of Bernie Sanders
Editorial, The Times Argus, in nashuatelegraph.com, August 25, 2015
As the rest of the nation gets acquainted with the phenomenon of Bernie Sanders, the press from out of state is asking one persistent question: How has Sanders maintained popularity in Vermont, not just with the Ben & Jerry's crowd of liberals in Burlington, but with Vermonters across the political spectrum, including conservatives?
Sanders is not universally admired in Vermont. The business community has always viewed his hostility to business as narrow and destructive. Businesses have their own agenda, their own self-interest, and Sanders' brand of government activism sometimes gets in their way. The wealthy who wish above all to keep the government's hands off their private fortunes tend not to like Sanders at all.
But what of the working man with his tools in the back of his pickup and not enough money in his pocket? Over the years, Sanders has maintained his popularity in the Northeast Kingdom and other rural regions of Vermont, even in towns where in years past "Take Back Vermont" signs were frequently seen evidence of a conservative backlash. Hostility to liberals in Montpelier has not always extended to Sanders, even if his views on issues such as gay marriage are as liberal as those of anyone else. How has he done it?
Sanders has always spoken up on behalf of those who are getting the short end of the stick. That would include people who are cheated by banks through predatory credit card charges. It would include people who have lost jobs because of international competition or heartless corporations. It would include anyone who senses that a failing health care system is partly the fault of billionaires unwilling to cough up the tax revenue to fix it. It would include anyone sick of political corruption and big money in politics. In other words, it includes a lot of people across the political spectrum.
Sanders is ideological in his rhetoric, but the consistent theme that rings constantly throughout his speeches is the sense that it's not fair. What's not fair? The entire system. Conservatives and liberals can agree on that.
Sanders has thrived in Vermont partly because of the absence of two social phenomena that drive politics in many parts of the country. One is race. White working class people often view politics through the lens of race. They see government efforts to help low-income people as welfare for black people, and they don't like it. Thus, for some Americans, health care reform is a way of giving free health care to blacks - even if it also serves the interests of millions of whites.
Because of the absence of a large black population or a history of slavery, race has played a relatively minor role in Vermont politics, apart from Vermont's historic role as a supporter of abolition and civil rights.
The other absent social phenomenon is evangelical Christianity. In other regions, conservative Christians have made issues such as abortion and gay marriage touchstones of their politics, forcing politics in a conservative direction. Because evangelical Christianity plays a relatively minor role in Vermont, working people have less reason to be scared away from a politician such as Sanders.
On the national stage, Sanders has been forced to address issues of race in ways that he has not had to do in Vermont. His language tends to describe the world in terms of economic class, and he has always thought that economic injustice subsumes issues of racial injustice. In talking about the former he is also talking about the latter. But lately, African-American activists have forced him to address specifically issues of racial injustice, particularly the violence against blacks that engendered the Black Lives Matter movement.
Appealing to the electorate of Vermont is one thing. Grass-roots politicking here can overcome many traditional barriers, as Sanders has shown. It remains to be seen how successful Sanders will be in stitching together a coalition from the broad sweep of the American electorate.
6. Reminder: Stock Market Is Not the Economy
No Need to Panic: The #BlackMonday Stock Volatility Doesn't Mean Much for the Broader Economy
by Dean Baker, cepr.net, August 25, 2015
[Monday], markets in the U.S. and world-wide experienced dramatic falls that saw the Internet and social media panicking over #BlackMonday. As U.S. and other global markets begin to rebound, though, there are a couple of important takeaways.
The most important point to remember is that the stock market is not the economy. The ups and downs of the market have no direct correlation to gross domestic product. The plunge of more than 20 percent in the 1987 crash here in the U.S. did not correspond to any actual bad news, past or future, in the economy. Even over the longer term, there is no tight link. The stock market lost more than 40 percent of its value in the 1970s (in real terms), but it more than doubled in the 1980s. GDP growth averaged 3.2 percent from 1970 to 1980 and 3.3 percent from 1980 to 1990.
Even in principle, the stock market is not supposed to be a barometer of economic activity. It is supposed to represent the current value of future profits. This means that if people expect the economy to slow down, but also expect a big shift in income from wages to profits, then we should expect to see the market rise. So there is no sense in treating the stock market as a gauge of economic activity; it isn't.
The most important point to remember is that the stock market is not the economy. The ups and downs of the market have no direct correlation to gross domestic product. The plunge of more than 20 percent in the 1987 crash here in the U.S. did not correspond to any actual bad news, past or future, in the economy. Even over the longer term, there is no tight link. The stock market lost more than 40 percent of its value in the 1970s (in real terms), but it more than doubled in the 1980s. GDP growth averaged 3.2 percent from 1970 to 1980 and 3.3 percent from 1980 to 1990.
Even in principle, the stock market is not supposed to be a barometer of economic activity. It is supposed to represent the current value of future profits. This means that if people expect the economy to slow down, but also expect a big shift in income from wages to profits, then we should expect to see the market rise. So there is no sense in treating the stock market as a gauge of economic activity; it isn't.
In terms of this specific downturn, China's problems were a huge factor. It is very clear that China had a serious stock bubble. Its market rose by more than 60 percent from the start of the year to its peak in early June. At that point, it was more than 150 percent above its level a year ago. Even with the recent plunge, it is still well above the year-ago level.
It was inevitable that this bubble would burst—the only question was when. The collapse undoubtedly hurt some Chinese investors, many of whom recently entered the market, often with large amounts of leverage. However, the direct impact on the Chinese economy is likely to be limited. These people would not, in aggregate, have enough wealth so that any reduction in spending would hit the economy in a big way. (Remember, people who were in the market last year are still way ahead.) There may be a political issue for the Chinese government, though, which apparently encouraged people to buy into the market.
There is a larger issue for the Chinese economy: its ability to convert from an investment and trade driven economy to one driven by consumption. This is not an easy task and it would not be surprising if China finds it difficult. This could also be troubling for the United States.
It was inevitable that this bubble would burst—the only question was when. The collapse undoubtedly hurt some Chinese investors, many of whom recently entered the market, often with large amounts of leverage. However, the direct impact on the Chinese economy is likely to be limited. These people would not, in aggregate, have enough wealth so that any reduction in spending would hit the economy in a big way. (Remember, people who were in the market last year are still way ahead.) There may be a political issue for the Chinese government, though, which apparently encouraged people to buy into the market.
There is a larger issue for the Chinese economy: its ability to convert from an investment and trade driven economy to one driven by consumption. This is not an easy task and it would not be surprising if China finds it difficult. This could also be troubling for the United States.
For the U.S., a failed transition for China will lead to an increase in its trade surplus with the world. If the value of the yuan continued to fall, China would export more and import less. Slower GDP growth would further increase the surplus. If we assume that this increased trade surplus is shared evenly between the U.S., Europe and the rest of the world, this implies an increase in the U.S. trade deficit of roughly $70 billion. That could reduce GDP growth over the next year by $105 billion, or a bit less than 0.6 percent. A 0.6 percentage point hit to GDP is hardly trivial, but not the sort of thing that gives us another recession.
Finally, it is worth noting that investors will often react irrationally in a situation like this. A lot of people see the market falling, think that it's time to get out, and sell. When the market rebounds and prices start to go up, these same people often decide to buy in at a higher price. As a result, they lose a lot of money. This is bad news for them, even if may not mean much to the overall state of the economy.
The moral of this story is that if you have money in the stock market, it's probably best not to panic. If you don't have money in the market, then there is definitely no reason to panic.
Finally, it is worth noting that investors will often react irrationally in a situation like this. A lot of people see the market falling, think that it's time to get out, and sell. When the market rebounds and prices start to go up, these same people often decide to buy in at a higher price. As a result, they lose a lot of money. This is bad news for them, even if may not mean much to the overall state of the economy.
The moral of this story is that if you have money in the stock market, it's probably best not to panic. If you don't have money in the market, then there is definitely no reason to panic.
FINALLY
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