Necessary Economic Policy Changes Towards Latin America

Necessary economic policy changes towards Latin America

By Adrián Boutureira, United for a Fair Economy

United for Fair Economy believes the Obama administration faces great challenges as well as great opportunities inour future relationship with Latin America.

During his election campaign, candidate Obama courageously stated he would not support the Colombia Trade Agreement due to the impunity in which human rights violations and violence against labor organizers occur in that country. While we applaud Mr. Obama for bringing these sobering facts to the attention of the American people, weinvite him to go further. President Obama must not only condemn the Colombian government's complicity in the gross violation of human rights of labor and community leaders, but he must also confront and address our own nation's economic and military complicity in those violations.

Furthermore, the new administration must not only examine and rectify these inherent inconsistencies in the proposed US-Colombia trade agreement, but also those of other existing bilateral and multilateral 'free' trade agreements in the hemisphere, such as NAFTA, CAFTA, and the US-Peru Trade Agreement.

A truly new phase in US-Latin America relations calls for a rejection of many past and present US trade policies that have played a key role in the creation of social instability, lack of economic opportunity, and gross economic inequality that has led to the displacement and forced emigration of millions of human beings.

Any real change in direction inimmigration and US policy towards Latin America calls for President Obama toalso quickly distance himself from past foreign policies that have mainly supported the interests of multinational corporations and entrenched local oligarchies. He should instead develop a new comprehensive strategy that willgenerate a foreign policy that will support Latin American social movements and governments that aim to advance the rights of workers, women, the indigenous,small farmers, and other historically oppressed majority populations as they struggle for social, economic, cultural, and environmental justice.

To this end, UFE respectfully suggests the following changes in USpolicies towards Latin America and its citizens:

1.  Initiate and institute changes in US foreign policy that:


  • Respect the economic, political and territorial sovereignty of all Latin American nations.
  • End all covert and overt military and intelligence intervention in the internal affairs of all Latin American nations.
  • End the present political belligerence toward popularly elected governments throughout the region, such as Bolivia, Ecuador and Venezuela, among others.
  • Provide political, technological and financial support for those Latin American governments that pursue sustainable, locally determined, economically, socially and environmentally just development strategies, regardless of their alignment to US corporate interests.
  • Close the Western Hemisphere Institute for Security Cooperation.
  • Close the International Law Enforcement Academy in San Salvador.
  • Stop the funding of Plan Colombia and cut off all military aid to that country.
  • Stop the funding of the Merida Initiative and the militarization of the US/Mexico border.
  • Close the National Endowment for Democracy and return USAID to its original foreign aid mission.
  • Help return President Aristide to Haiti's presidency and support the end of the UN occupation.
  • End the embargo against Cuba and normalize relations with that nation.

2. Establish tradeagreements with Latin America that:

  • Include comprehensive agreement-drafting mechanisms that allow for full transparency in all aspects of the negotiations and that are drafted by democratically elected government representatives and other major non-governmental stakeholders. (For example, civil society organizations that represent autonomous indigenous communities affected by the proposed policies);
  • Ensure that corporations cannot challenge international treaties and agreements; local, state and federal public interest policies; and/or international labor, human rights, health, environmental, and safety laws and regulations;
  • Promote and enforce the implementation of a common, best practices standard for the rights of workers, Indigenous Peoples, small farmers, consumers and women;  
  • Support the autonomy and integrity of the public sector and the full protection of the environment;
  • Establish practices that focus on local economies, support fair trade and sustainable growth principles, and aim at serving the interests of working people in the US and the working people of our Latin American trading partner/s equally;
  • Include alternative indicators for measurements of wealth and progress other than the GNP and GDP, such as the Genuine Progress Indicator (GPI), that reflect the importance of accurately measuring the adverse effects of certain economic activity on human welfare and environmental sustainability;
  • Shift measuring the impact of natural resource exploitation and the introducing of potentially hazardous substances into the environment away from Risk Assessment methodology and towards the use of methods that employ the Precautionary Principle.

3. Initiate the creation of a just immigration reform that:

  • Prevent the passage of anti-immigrant legislation and the criminalization of undocumented immigrant workers and their families;
  • Halt the militarization of the border and the continued building of the wall separating historically culturally and economically interconnected cross-border communities;
  • Cease all deportation proceedings of undocumented workers with children living and or born in the US;
  • Reject the guest worker program as a viable alternative for normalizing the status of undocumented immigrant workers;
  • Reject undocumented worker employer sanctions and "no match" letters;
  • Develop a comprehensive path to citizenship for undocumented immigrant workers;
  • Facilitate speedy family reunification;
  • Protect and advance the civil rights of all immigrants and their families;
  • Protect labor rights and promote a living wage for all immigrant workers.


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Workers Laid Off, Executives Paid Off, Bernard Madoff

The global financial crisis deepens, with more than 10 million in the U.S. out of work, according to the Department of Labor. Unemployment hit 6.7 percent in November. Add the 7.3 million “involuntary part-time workers,”� who want to work full time but can’t find such a job. Jobless claims have reached a 26-year high, while 30 states reportedly face potential shortfalls in their unemployment-insurance pools.Truth Dig. Read the full article in Truh Dig.
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The Recession is Official...Sorta

For the first time in nearly a year, despite the obvious deteriorating economic situation for the majority of people in this country, we have received confirmation that we are experiencing a recession. The National Bureau of Economic Research, the organization that determines an “official”� recession, states that this country has been in a recession since December 2007. For most people this is not news, but it is validation. RaceWire. Read the full article in RaceWire.
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National City deal worth $200M to executives

Read the whole article from the Pittsburgh Tribune-Review.
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Estate Tax Training & Lobby Day Background

Background on the estate tax:

With your help over the past decade, we've succeeded in preventing repeal of the estate tax. Now the imminent battle is over reform. There is a real threat that a weak version of the estate tax that results in little revenue and worsening economic inequality will prevail.   Our objective in 2009 is to defeat reckless estate tax proposals and to pass legislation to maintain a robust federal estate tax that generates significant revenue.  

Our Strategy

Press for Progressive Estate Tax Reform.   President Obama advocates freezing the estate tax at its current 2009 exemption ($3.5 million for an individual and $7 million for a couple) and indexing it for inflation.   Conservatives are still pressing for reckless proposals that would gut the law. Progressive alternatives, such as our "Sensible Estate Tax" proposal, would maintain a lower wealth exemption ($2 million per spouse) and introduce a progressive rate structure, with higher rates on larger estates.  

A progressive estate tax will preserve most of $1 trillion in revenue over the next decade, provide a powerful incentive for charitable giving, and reduce inequalities of wealth. Eliminating or irresponsibly reforming the tax will shift tax obligations onto lower income taxpayers or future generations.   Building Congressional support for a more progressive estate tax will help defeat conservative efforts to gut the law.  

As Bill Gates Sr. has written, "the estate tax is a means by which wealthy people pay back the society and the commonwealth that has made their wealth possible."

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Obama is right to take on the very rich

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Evaluating Elected Officials on Taxes

Evaluating Elected Officials on Taxes

Both at the state and federal level, elected officials are crafting proposals and taking positions on tax policy.

While tax policy can be used for a wide range of purposes, in our view one of its most important functions is addressing economic inequality.

Some elected officials, but not all, share this value. But often it's difficult to see through the rhetoric and evaluate an official's position – especially on topics as complex as taxes.

That's why we created Action Tools for evaluating elected officials on taxes. They contain short descriptions and definitions of key progressive principles and sample questions that you can ask as you research elected officials' proposals and positions.

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The $900 Billion Recovery Plan

February 11, 2009

See ProPublica's Comparison of the Economic Stimulus Plans

See the Associated Press' Comparison of the Economic Stimulus Plans

The Senate bill provides $40 billion less to cash-strapped states to bolster their spending on education, including help to avoid classroom cuts, and $16 billion less to renovate and rebuild schools. It also cuts food stamps and aid to the unemployed.

See Paul Krugman's take in the NY Times.

See Dean Baker's critique, "Fewer Jobs: Stimulus on the Cheap."

The Senate version adds three costly tax breaks:

  1. Extends the alternative minimum tax "patch" through 2009 at a cost of $70 billion; this mostly benefits upper-income people.  
  2. A $11.5 billion measure to encourage the purchase of autos by allowing buyers to write-off local sales taxes and interest on loans.
  3. A $35.5 billion measure would create a new tax credit equal to 10% of a primary-home purchase, up to $15,000, which would primarily benefit wealthier people.


February 6, 2009

Where the money goes:

In the stimulus plan before the Senate, much of the billions in spending is divided among these areas: $142 billion for education, $111 billion for health care, $90 billion for infrastructure, $72 billion for aid and benefits, $54 billion for energy, $16 billion for science and technology and $13 billion for housing.   The tax cuts amount to about $350 billion.

The White House released a state by state chart of how many jobs the economic recovery plan will create in each state.  

It's timely:

The official cost estimates of the Congressional Budget Office show that 85 percent of the effects of the House bill, and 94 percent of the effects of the Senate bill, would occur during the 2009 - 2011 period - when the CBO says the nation's economic output will be far below its potential and fiscal stimulus thus would be beneficial.  


Ways the Economic Recovery bill could get worse:

Senate Republicans want less spending and more tax cuts in the bill. A Center for Economic and Policy Research report states " tax cuts are substituted for government spending, there will be fewer jobs created by the stimulus and that African Americans and Hispanics will feel this effect disproportionately. Insofar as corporate tax cuts are substituted for spending, the impact of a given amount of stimulus will be only one-fifth as great. This sort of substitution could lead to considerably higher rates of unemployment for African Americans and Hispanics.

Senators who vote against the stimulus are opposing $900-1000 in tax cuts for families with children”¨in most states.   A Citizens for Tax Justice report states about half of the tax cut portion of the bill consists of a refundable "Making Work Pay Credit" worth up to $500 for most working people or $1,000 for married couple- basically credits on payroll taxes that people pay. The tax cuts in the stimulus bill are much more distributed towards lower and middle income people than the Bush tax cuts were.

The House Republicans only want to give this tax cut to those who pay income taxes, which would leave out 35 percent of Americans who need it the most and would spend it quickly.

Sen. Demint's plan swipes tax benefits from families, teachers and college students. It costs $3.1 trillion (three times as much as Obama's), would give a $320,000 tax cut to the average CEO and nothing to a worker making the minimum wage, and would take away deductions from 45 million families who pay state and local taxes, 10 million families with steep medical expenses, 7.5 million families paying off college loans, and 3.4 million teachers who buy supplies for their students.   It would gut the estate tax.

Ways the Economic Recovery bill could be better:

  • Don't extend the alternative minimum tax "patch" through 2009; it makes no sense as economic stimulus. It costs $70 Billion for one year.  
  • Don't give Verizon $1.6 billion in tax cuts without generating a single new job. Money originally intended to encourage companies to bring high speed internet to underserved low-income and rural communities has turned into a billion dollar giveaway to big telecom.


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Idiots of the Universe - On Planet Wall Street, $18 Billion in Bonuses

Read the full story in the Washington Post.

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State of the Dream 2009 Charts

Click to open larger images in a new window.

Children Income Above Parents' Income by Race

Households with Zero or Neg Net Worth 2004

Poverty Rate 1972-2007 Bottom Quintile Child Mobility

Median Family Income 1968-2007 Median Family Income by Race 1947-2005

High School Completion Rate 1968 and 2005 Unemployment by Race 1972 and 2008

Incarceration Rates 1974 to 2001 Average Jail Sentence in 2002 by Race

Child Poverty Rate 1973 to 2007 Homeownership Rates 1970 to 2007

People Living in Poverty Neighborhoods Boston 1999

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Documenting the Silent Depression

Bill Fletcher writes: "Growing up my father would regularly say to me that while the Great Depression officially ended during World War II, for African Americans it never really ended. While most economists would take issue with my father's analysis, he was onto something that both mainstream economists and political figures wanted to avoid: structural racist oppression has represented, to borrow from Columbia University Professor Manning Marable, the underdevelopment of Black America. Specifically, the conditions under which we have operated, often in the so-called best of times, have represented recession or sometimes near depression-like realities for millions of people.

"My father's analysis was not his alone. Discussions about the economic underdevelopment of Black America have taken place, and continue to take place regularly in our community. The majority of White America either ignores or is oblivious to these exchanges, and in fact, tends to live in denial as to the realities of structural racist oppression, making the current discussions of an alleged ”˜post-racial era' nearly laughable."

Read the full story in Black Commentator.

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Recession Worsens the Racial Divide

UFE staffer Mike Lapham writes: "During any crisis, it is common to focus on the surface troubles and thereby miss opportunities for addressing underlying problems. Already, as the new administration tackles the current economic crisis, it seems diligent about plugging today's holes, to the exclusion of preventing more holes in the future.

"For example, one gaping hole has to do with the myth that a rising economic tide lifts all boats. This has been completely disproven by the extreme growth of economic inequality during the last 30 years. Instead, we learned that some boats can be lifted spectacularly high, while others sink deeper in the mud. So, even as we scramble to keep the whole economic ocean from draining, it's vital that we pay attention to all the boats - big and small. The obvious implication is that if we want to build an economy that's inclusive, we must pay special attention to the worst off.

"But while we watch the first black president take office, we risk falling into another trap: Thinking that race is finally irrelevant. The truth is that, in an economic sense, race continues to be a major barrier."

Read the full article in the Asheville Citizen-Times.

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