Connect with us

Economy

Divided Government Will Doom the Economy – The Atlantic

Published

 on


An illustration of a red and blue Capitol divided.
SHUTTERSTOCK / THE ATLANTIC

Congress has failed since the spring to pass much-needed additional economic stimulus. The ousted Trump administration has lost interest in pushing for a new bill. With just a few working weeks left in their lame-duck session, House Democrats want a $2 trillion to $3 trillion measure, while Senate Republicans are recommending a skinnier $500 billion to $650 billion measure. The two sides might fail to come to an agreement, and once President-elect Joe Biden is inaugurated, obstructionist Republicans will have even less incentive to get a deal done.

As Washington dithers, the country will suffer. The novel coronavirus, fueled by indoor transfer over the winter holidays, will continue to maim and kill. States and cities will buckle under their budget gaps, and slash more jobs and social services. Millions of Americans will lose work. And the country’s unemployment-insurance expansion, student-loan-deferral program, and eviction moratoriums will expire, leaving the poor families bearing the brunt of this recession even more vulnerable. A double dip is possible, given that the recovery is already slowing down.

None of this might come to pass, of course. House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell might work out a middle-of-the-road stimulus measure, helping to speed the recovery. Democrats might take both of the Georgia seats in the January runoff, thus clinching control of the Senate. Biden—a congressional veteran who is legitimately liked on both sides of the aisle and has a history of bipartisan dealmaking—might break the logjam. The economy might recover faster than expected without additional support from Washington, as businesses adjust and reopen.

But the 2020 electoral outcome—Democratic White House, Republican Senate—was the worst one in terms of getting anything done in the Capitol, and is thus a pending disaster for the country’s sick, unemployed, and poor. A Trump win likely would have eased the passage of a small but important stimulus. A Biden blowout would have allowed Democrats to pass something huge. Instead, Washington has that old 2011 feeling again.

A decade ago, the world learned what a Democratic White House and a Congress under partial Republican control could do together: nothing, or very close to it. At the time, the economy was slouching out of the worst recession since the Great Depression. The $800 billion American Recovery and Reinvestment Act, passed in the early days of the Obama administration, had shored up state and local finances, expanded unemployment insurance, and aided failing businesses. But it was too small by roughly half, economists estimate. With Republicans in control of the House as of 2010 and with a filibustering minority in the Senate until they won it outright in 2014, they crushed every attempt to rectify the problem.

No American Jobs Act. No cloture on even noncontroversial bills. The point was to damage the Democrats’ electoral chances, more than anything else. And the tactic worked, arguably. But it also slowed the recovery down. The United States took 10 long years to return the unemployment rate back to its prerecession low.

Similar dynamics are now at play: The economy needs more. Roughly 10 million fewer Americans are working now than were in February, wages are down sharply, and more than 1 million people are losing their jobs each month, even as the unemployment rate drops. The large, successful stimulus programs created by Congress in the spring are ending, and the cash Uncle Sam distributed is drying up. The slowing recovery might slow further, and households might become far more strained—even as the pandemic reaches deadly new heights.

Yet the real state of the economy does not seem to matter much to partisans on the Hill. On Friday, McConnell described the October jobs report—a very good one, but not one that signals an economy even close to healed—as a “stunning indication of a dramatic comeback” and justification for a smaller stimulus.

As happened a decade ago, Republicans are newly interested in tackling deficits and the debt instead of spending to boost the economy. Having spent four years not paying for anything, including giant tax cuts for rich people and corporations, they have suddenly, predictably rediscovered their concern for the supposed fiscal burdens the old are placing on the young. Senator Lindsey Graham, for instance, said that you would see him “trying to find common ground that would benefit all of us, and a good place to start, I think, would be the debt,” as well as infrastructure and immigration. Soon enough, some prominent politician will suggest a bipartisan, blue-ribbon commission to figure out the tough math, and start talking about trading pennies of short-term spending boosts for dollars of long-term debt reduction.

The only capable body left standing? The Federal Reserve, which has already cut interest rates to zero, set up new programs to help calm the financial system, and purchased trillions of dollars of government debt. Yet, as a decade ago, it cannot do what Congress can, and put money directly in American families’ pockets. “It’s for Congress to decide the timing, size, and components of further fiscal support for the economy,” Fed Chair Jerome Powell said at a press conference this month. “I do think it’s likely that further support is likely to be needed.” A divided government is a hobbled government, and one that will hobble the recovery.

Four years of Trump have surely changed the Democratic Party, which has become less concerned about debt and become more concerned about the structure of Congress preventing legislation from passing. Statehood for Washington, D.C., and Puerto Rico; the elimination of the filibuster; expanding the Supreme Court; ending gerrymandering; stopping voter suppression: These are much more pressing concerns for liberals. But have four years of Trump changed the Republican Party? If so, it has become only more antidemocratic and obstructionist. The way back for Republicans means denying President Biden any victories at all, and particularly bipartisan ones. The country’s workers, as always, will be the biggest losers.

We want to hear what you think about this article. Submit a letter to the editor or write to letters@theatlantic.com.


Annie Lowrey is a staff writer at The Atlantic, where she covers economic policy.

Let’s block ads! (Why?)



Source link

Continue Reading

Economy

Five priorities for a sustainable ocean economy – Nature.com

Published

 on


Ocean ecosystems are under threat. They also hold solutions. Climate change is increasing sea levels and making the ocean warmer, more acidic and depleted in oxygen. The ocean has absorbed around 90% of the excess heat trapped by greenhouse-gas emissions and one-third of the carbon dioxide emitted by human activities since the 1980s1.

Excessive and destructive fishing threaten ocean habitats and biodiversity, from coastal margins to open waters and the deep sea2. Unsustainable development along coastlines is destroying coral reefs, seagrass beds, saltmarshes and mangrove forests. These house biodiversity, sequester carbon, provide nurseries for fish and buffer coasts against storm surges (go.nature.com/3m4trjd). Plastics and nutrients washed from the land are also killing wildlife (go.nature.com/3t4ffpa). All of these threats erode the capacity of the ocean to provide nutritious food, jobs, medicines and pharmaceuticals as well as regulate the climate. Women, poor people, Indigenous communities and young people are most affected.

For much too long, the ocean has been out of sight, out of mind and out of luck. Attention has been scant — from governments, funding agencies, financial institutions, food-security organizations and the climate-mitigation community. Nations usually manage their waters sector by sector, or issue by issue. The resulting hodgepodge of policies fails to consider collective impacts.

Countries are agreed on what needs to happen — use marine resources responsibly and equitably and manage them sustainably, avoiding overfishing, pollution and habitat destruction. Our knowledge about the ocean is deep. But political action to deliver a healthy ocean has been lacking. Until now.

In September 2018, 14 nations, led by Norway and Palau, commissioned a major science-based review of ocean threats and opportunities as a baseline for resetting policies. Today, this High Level Panel for a Sustainable Ocean Economy (the Ocean Panel) publishes its conclusions3 and commitments4.

The reports highlight what stands to be gained by 2050 by taking a holistic approach to the ocean, by asking what it can deliver, and for whom. They find that a healthy ocean could, with 30% of it protected effectively, deliver the following: 20% of the carbon emission reductions needed to achieve the Paris climate agreement’s warming limit of 1.5 °C above pre-industrial levels; 40 times more renewable energy than was generated in 2018 (see go.nature.com/3767y3b); 6 times more sustainable seafood5; 12 million jobs; and US$15.5 trillion in net economic benefits (go.nature.com/366fnf2). These outcomes are not guaranteed. They require new policies, practices and collaborations.

As co-chairs of the expert group of scientists convened by the Ocean Panel, here we highlight five priority areas for policy action.

Hidden crisis

The Ocean Panel is an ad hoc group focused on the seas that is made up of serving world leaders with direct authority to trigger, amplify and accelerate action worldwide. Co-chaired by Norway and Palau, the panel comprises Australia, Canada, Chile, Fiji, Ghana, Indonesia, Jamaica, Japan, Kenya, Mexico, Namibia and Portugal, with support from the United Nations Secretary-General’s Special Envoy for the Ocean. Collectively, these leaders manage nearly 40% of the world’s coastlines and nearly 30% of its exclusive economic zones, 20% of the world’s fisheries and 20% of the world’s shipping fleets.

At the panel’s invitation, we chaired an expert group (go.nature.com/2vdsutz) of more than 75 scientists chosen for their knowledge, experience and diversity of perspectives. We also worked with a larger group of scientists and policy or legal experts, totalling more than 250 people from 48 countries or regions, to produce syntheses of knowledge and options for action on topics identified by the Ocean Panel (go.nature.com/3nnowty and go.nature.com/2j8c51b). The 19 syntheses ranged from food5, energy and mineral production (go.nature.com/3m9jdod), genetic resources6 and conservation6 (go.nature.com/376dapp) to climate change (go.nature.com/3m52poz), technology7, equity (go.nature.com/378hjjy), illegal fishing8, crime9 and ocean accounting10 (go.nature.com/39gpims).

A parallel group of more than 135 organizations, called the Advisory Network (go.nature.com/39dsz8v), included representatives from industry, financial institutions and civil society. Participants coalesced as Action Coalitions around areas of shared interest — for example, renewable ocean energy, sustainable seafood or ocean accounting.

Underwater view of colourful coral and marine life, with a set of four lights approaching from a distance

A reef in the Maldives displays a wealth of biodiversity.Credit: Giordano Cipriani/Getty

Five priorities

Investing in the following five areas, the reports found, would address global challenges, create jobs and boost economies, while protecting people and the planet.

Manage seafood production sustainably. Currently, fish, crustaceans and molluscs provide only 17% of edible meat5. More protein and essential nutrients will be needed to feed the world’s rising population, expected to reach almost 10 billion by 2050.

Land-based agriculture is hard to expand, because doing so would exacerbate climate change, biodiversity loss and water scarcity. Sustainable fisheries and mariculture together, however, might deliver 36–74% higher yields by 2050, meeting 12–25% of the extra meat needed5.

Aquaculture has greatest potential for expansion, notably un-fed seafoods such as molluscs, including oysters, clams and mussels, which obtain their food by filter feeding. Currently, most mariculture (around 75%) requires feed, typically fishmeal and fish oil. Such production of fed bony fish could be increased somewhat5. But there are ecological limits to how much fish and feed could be caught without depleting stocks.

Policy reforms are needed11. And Ocean Panel leaders commit to restoring wild fish stocks, catching them at sustainable levels and expanding sustainable mariculture by 2030. They pledge to eliminate illegal, unreported and unregulated fishing and prohibit harmful fisheries subsidies. They will implement science-based plans to rebuild depleted stocks, develop climate-ready fisheries (go.nature.com/3m52poz) and strengthen international Regional Fisheries Management Organizations. Policies to minimize environmental impacts and accelerate sustainable practices will be introduced for mariculture. Seafood businesses in the Advisory Network are highly supportive.

Mitigate climate change. Around the world, climate change is wreaking havoc on weather patterns, producing more powerful hurricanes, floods and storm surges. Warmer waters are eating away at the bases of Antarctic glaciers and killing coral reefs1. Greenhouse-gas emissions need to be reduced sharply. But most mitigation options focus on the land — clean wind and solar energy, for example, or increasing the efficiency of transportation, buildings and appliances. More consideration needs to be given to the ocean.

The panel’s reports suggest that ocean-based options might deliver as much as one-fifth of the total emissions reductions needed to limit warming to the Paris goal of 1.5°C by 2050 (11.8 gigatonnes of CO2 equivalents (GtCO2e) annually). The numbers are tentative and based on maximum contributions from five sectors: renewable energy (5.4 GtCO2e), transport (1.8 GtCO2e), coastal and marine ecosystems (1.4 GtCO2e), food (1.2 GtCO2e) and carbon storage in the seabed (2 GtCO2e) (go.nature.com/3767y3b; see also ref. 12). Although carbon storage needs further study, three other opportunities warrant immediate action.

Ocean-based renewables offer varied options for power generation — wind, wave, tidal, current, thermal and solar — suitable for different places. Ocean Panel leaders pledge to invest in research, development and demonstration projects to make these technologies cost-competitive, accessible to all and environmentally sustainable. They will work with industry to address environmental impacts and market impediments to deployment.

Decarbonizing shipping is sorely needed. More than 90% of global goods move across the seas. But ships use heavy fuel oils that release soot and sulfur as well as CO2 — amounting to 18% of some air pollutants and 3% of greenhouse-gas emissions. Panel leaders agree to set national targets and strategies to decarbonize vessels and develop and adopt technologies for producing and storing new zero-emission fuels. They will incentivize low-carbon ports to support clean shipping, and strengthen regulations within the International Maritime Organization. These include minimizing the transfer of aquatic invasive species by ships, reducing engine noise and banning the use of heavy fuel oil in the Arctic.

Aerial view of a bulk carrier that has run aground and split into two sections, spilling oil into the surrounding ocean

A cargo ship ran aground near Mauritius in late July, spilling oil as it broke up near the Blue Bay Marine Park in August.Credit: AFP/Getty

‘Blue carbon’ ecosystems of mangroves, seagrass beds and salt marshes store carbon at up to ten times the rate of terrestrial ecosystems. Much of that ends up in the atmosphere if these ecosystems are damaged or destroyed. Although they cover only 1.5% of the area of land forests, degraded blue-carbon ecosystems release 8% of the total emissions from these and terrestrial deforestation combined. Between 20% and 50% of these ecosystems have already been lost. Ocean Panel leaders pledge to halt that decline and improve the extent and condition of these ecosystems. Successful restoration of 3,000 hectares of seagrass beds in Virginia lagoons along the US eastern seaboard has resulted in sequestration of about 3,000 tonnes of carbon per year, for example13.

Stem biodiversity loss. The diversity of plants, animals and microbes that inhabit ocean ecosystems, from the deep sea to estuaries and from the tropics to the poles, is the main reason the ocean delivers so many benefits. That biodiversity is being lost. In 2019, an international assessment of biodiversity2 identified overharvesting as the biggest single threat.

Effective marine protected areas (MPAs) are the most powerful tool to stop this loss. Fishing and other damaging activities are banned within them (go.nature.com/3ma76rf). But they take time to implement. They require planning, design, funding, compliance and enforcement. Only 2.6% of the global ocean is in fully or highly protected classes of MPAs (https://mpatlas.org). Many scientific analyses have concluded that at least 30% of the ocean globally should be covered to protect biodiversity (see, for example, ref. 14). The Ocean Panel supports that goal by 2030.

Seize opportunity for economic recovery. Ocean workers and sectors have been largely absent from economic stimulus packages in response to the COVID-19 pandemic. Yet a ‘blue recovery’ effort holds great potential for jump-starting economies.

The Ocean Panel highlights five opportune areas for economic investment (go.nature.com/3otqsdp). First, restore coastal and marine ecosystems to create jobs and enhance tourism, fisheries and carbon sequestration. After the 2008–09 crisis, for instance, every $1 million invested in coastal restoration in the United States created an average of 17 jobs, or more than twice those created per dollar spent on road construction and fossil-fuel exploration and extraction combined15.

Second, extend sewage and wastewater infrastructure to create jobs and improve health, tourism and water quality. Over the past 30 years, wastewater and sewage run-off has cost the global economy $200 billion to $800 billion per year (go.nature.com/2kjdthr).

Third, invest in sustainable, community-led, non-fed mariculture such as shellfish, especially in developing and emerging economies. This would enhance local livelihoods and diversify economies while producing food and other products.

Fourth, catalyse incentives to encourage zero-emission marine transport. This would create jobs, accelerate a transition to lower carbon emissions, promote efficiency gains and help to minimize stranded assets in the maritime shipping sector, such as existing ships that burn dirty fuels. Decarbonizing shipping could yield a benefit of between $1 trillion and $9 trillion over 30 years16.

Fifth, investing in ocean-based renewable energy could deliver climate benefits, reduce local and global pollution, and build energy security. Projections suggest that this could be a $1-trillion industry that has the potential to deliver up to one million full-time jobs by 2050 (go.nature.com/3otqsdp).

Manage the ocean holistically. Patchy management cuts across all areas mentioned. For example, plans for a new port or tidal energy project might not consider the destruction of blue-carbon ecosystems or the impacts of shipping on fish.

Tools for ecosystem-based management and integrated ocean management exist17. These consider a suite of current or anticipated activities, how they might coexist successfully and what combination can operate without serious harm. It is a major undertaking: all stakeholders must be involved (go.nature.com/378hjjy), data and maps must be assembled, probable impacts identified and interactions considered. Success requires clear goals, funding and an inclusive process.

Achieving the three main goals of the Ocean Panel — to protect effectively, produce sustainably and prosper equitably — will require being smarter about ocean uses, seeking greater efficiencies, using leapfrogging technologies7 and seeking ongoing scientific guidance (https://en.unesco.org/ocean-decade). It also requires heeding lessons from other transitions18, acting with precaution (for example, in deep-sea mining19) and paying closer attention to the welfare of all people (go.nature.com/3nukkzf) and to the health of ecosystems.

Ultimately, the High Level Panel for a Sustainable Ocean Economy commits member nations to manage all of their ocean area sustainably by 2025. Other coastal and ocean states should join this effort, so that by 2030, all waters under national jurisdiction are sustainably managed. If guided by science and mindful of equity, sustainable management of national waters could be a boon for people, nature and the economy20.

Let’s block ads! (Why?)



Source link

Continue Reading

Economy

Australia's economy rebounds sharply in third-quarter from COVID-19 recession – TheChronicleHerald.ca

Published

 on


By Swati Pandey

SYDNEY (Reuters) – Australia’s economy rebounded sharply in the third quarter from a coronavirus-induced recession as consumer spending surged though the country’s top central banker signalled monetary policy will stay accommodative for a while.

Data out earlier showed the A$2 trillion ($1.5 trillion) economy expanded by a bigger than expected 3.3% in the September quarter, following a 7% contraction in June, as the country largely got COVID-19 under control.

The rebound was led by household spending, which rose 7.9%, driven by massive fiscal and monetary stimulus since March.

The Australian dollar briefly hit a day’s high of $0.7389.

Economic growth is expected to be “solidly positive” in the December quarter as well, Reserve Bank of Australia (RBA) Governor Philip Lowe said, underscoring the country’s success in curbing the pandemic.

The optimism is underlined by card spending data by the country’s biggest banks which showed consumers splurged in the last week of November during Black Friday and Cyber Monday sales.

Top lender Commonwealth Bank reported a 12% jump in spending on cards for the week-ending Nov. 23 from last year while ANZ saw a 28% surge.

Australia is not yet out of the woods, as escalating tensions with top trading partner China hang heavily on the outlook.

Australian Treasurer Josh Frydenberg said on Wednesday the deteriorating trade relationship with China was a “very serious” matter though domestic consumption was key to Australia’s post-pandemic recovery.

China has so far curtailed Australia’s exports of lobsters, beef, timber, coal and wine though the broader economic hit is expected to be minimal as long as iron ore is spared, analysts said.

Agriculture exports account for just 0.02% of Australia’s annual output, while iron ore exports account for 7.5% of GDP.

“We expect some softening in tensions, especially given China’s multi-decade need to source key bulk commodities and metals from Australia,” said Paul Xiradis, chief investment officer at Ausbil.

RECESSION OVER?

Despite the brisk pace of quarterly growth, economic output is still down 3.8% over the year after Australia entered its first recession in three decades in the first half of 2020 due to coronavirus-driven lockdowns.

Lowe said the third-quarter GDP result was “good” but warned an economic recovery from the pandemic will likely be “bumpy and uneven” going forward.

“There is still a high degree of uncertainty about the outlook,” Lowe told lawmakers.

“We are prepared to do more, if that is required. Having said that, we are still of the view that a negative policy interest rate in Australia is extraordinarily unlikely.”

On Tuesday, the bank left its cash rate at a record low 0.1% and maintained its A$100 billion quantitative easing programme.

Despite the measures, unemployment is still hovering above 7%, from around 5% before the pandemic, while inflation and wage pressure are weak.

“Make no mistake, Australia is still functionally in a recession,” said Callam Pickering, economist at global job site Indeed.

“Both fiscal and monetary support measures will need to remain in place throughout 2021 and beyond to ensure that the recovery remains on track.”

(Reporting by Swati Pandey; Editing by Ana Nicolaci da Costa)

Let’s block ads! (Why?)



Source link

Continue Reading

Economy

Australia's economy rebounds sharply in third quarter, beats forecast – TheChronicleHerald.ca

Published

 on


By Swati Pandey

SYDNEY (Reuters) – Australia’s economy handily beat forecasts last quarter, rebounding from a coronavirus-induced contraction helped by massive stimulus, while growth is expected to be even stronger this quarter with near-zero new COVID cases.

The economy expanded by 3.3% in the three months to September, data from the Australian Bureau of Statistics (ABS) showed on Wednesday. Economists in a Reuters poll had forecast a 2.6% rise after a 7% contraction in second quarter.

Despite the brisk pace of quarterly growth, GDP still contracted 3.8% on an annual basis, suggesting the recession-stricken economy is not out of the woods yet and that policy support will be needed for some time.

The rebound was led by household spending, which rose 7.9%, the data showed.

But annual output is not expected to reach pre-COVID levels until late next year, provided Australia is able to keep the virus at bay.

The country, which has recorded nearly 28,000 coronavirus cases, has been lauded globally for successfully reopening its economy in late-May after curbing the pandemic.

That, together with A$300 billion ($221.55 billion)in fiscal stimulus and record low cash rate of 0.1%, have boosted jobs, credit demand, home prices and household consumption.

In a sign of solid consumer demand, Australia’s top lender Commonwealth Bank saw nationwide spending on its credit and debit cards jump 12% for the week-ending Nov.23 from last year.

ANZ Banking Group said spending on its cards surged 28% for the week to end-November, helped by Black Friday and Cyber Monday sales.

“Q4 growth is currently shaping up to be solid,” ANZ economists wrote in a note.

“The strong rebound in activity in Melbourne, the broader bounce in consumer and business confidence, along with upside surprises from the high frequency data are currently suggesting that December quarter growth will be pretty solid.”

Victoria state, of which Melbourne is the capital, reopened from its marathon lockdown in late October.

(Reporting by Swati Pandey; Editing by Ana Nicolaci da Costa)

Let’s block ads! (Why?)



Source link

Continue Reading

Trending