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Mark Weisbrot

Mark Weisbrot

Mark Weisbrot is Co-Director of the Center for Economic and Policy Research in Washington, D.C. He received his Ph.D. in economics from the University of Michigan. He is author of the book Failed: What the "Experts" Got Wrong About the Global Economy (Oxford University Press, 2015), co-author, with Dean Baker, of Social Security: The Phony Crisis (University of Chicago Press, 2000), and has written numerous research papers on economic policy.

Articles by Mark Weisbrot

Trump’s trade war with China: Is it about to end?

October 2, 2019

From Mark Weisbrot
The latest de-escalation of the trade war with China — with exemptions from some tariffs on both sides — has left markets uncertain as to whether it will end before there is serious escalation. But if I were managing a hedge fund, I would bet on it.
To see why, we must start with Trump himself. Distraction is Trump’s modus operandi; this was true for his 2016 campaign and he must have concluded from its success that this was also the best way to govern. Trump’s trade wars are therefore best understood as a set of distractions. The end result doesn’t matter all that much to him politically, and is therefore not worth that much political risk.
Of course there are things that some of his donors might actually want to win from this fight with China: stricter enforcement

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IMF reforms can make things worse: The case of Ecuador

August 28, 2019

From Mark Weisbrot
When people think of the damage that the high-income countries ― typically led by the US and its allies ― cause to people in the rest of the world, they usually think of warfare. Hundreds of thousands of Iraqis lost their lives as a result of the 2003 invasion, and then many more as the region became inflamed.
But the rich countries also have considerable power over the lives of billions of people through their control over institutions of global governance. One of these is the International Monetary Fund. It has 189 member countries, but the US and its rich-country allies have a solid majority of the votes. The head of the IMF is by custom a European, and the US has enough votes to veto many major decisions by itself ― although the rich countries almost never vote

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Who is to blame for Argentina’s economic crisis?

August 21, 2019

From Mark Weisbrot
Argentines remember the role the IMF played in the last depression. They also remember the improvement in their lives under Kirchnerism.
What are we to make of Argentina’s surprise election results on August 11, which jolted pollsters and analysts alike, and roiled the country’s financial markets? In the presidential primary for the country’s October election, the opposition ticket of Alberto Fernández trounced President Mauricio Macri by an unexpected margin of 15.6 percent.
The Fernández coalition attributes its victory to Mr. Macri’s failed economic policies, blaming him for the current economic crisis, recession and high inflation. Mr. Macri, by contrast, blames the fear of a future government of Kirchnerism — his label for the opposition — for the postelection

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Tariffs are a bad response to an imaginary border crisis

June 10, 2019

From Mark Weisbrot

Donald Trump won the presidency–despite losing the popular vote by 2.8 million—with a campaign that careened wildly from one distraction to another. He has clung to this as a Twitter and governing strategy ever since. As there are 190 countries in the world, and the United States trades with most of them, trade wars so far have provided a shovel-ready supply of such diversions. So, here we are: Last Thursday, just in time to distract from the more potentially violent foreign ventures that are not going very well (Iran, Venezuela), Trump announced plans for a new set of tariffs against Mexico.
This trade war is different from other trade wars: It’s not about trade. It’s not even about “trade” in the expanded, grossly misleading but commonly used definition that

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Tariffs are a bad response to an imaginary border crisis

June 7, 2019

From Mark Weisbrot

Donald Trump won the presidency–despite losing the popular vote by 2.8 million—with a campaign that careened wildly from one distraction to another. He has clung to this as a Twitter and governing strategy ever since. As there are 190 countries in the world, and the United States trades with most of them, trade wars so far have provided a shovel-ready supply of such diversions. So, here we are: Last Thursday, just in time to distract from the more potentially violent foreign ventures that are not going very well (Iran, Venezuela), Trump announced plans for a new set of tariffs against Mexico.
This trade war is different from other trade wars: It’s not about trade. It’s not even about “trade” in the expanded, grossly misleading but commonly used definition that

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Labor has lost much in past four decades, and Fed threatens recent gains

September 2, 2018

From Mark Weisbrot
This Labor Day, the vast majority of Americans who need to work for a living still have a long way to go before they recover what they have lost over the past four decades. The real (inflation-adjusted) median wage is only about 10 percent above what it was in 1979.
As economist Dean Baker has noted, we can also see part of this transformation of the United States into a more shamefully unequal society if we look at the distribution of national income between profits and labor. If not for this redistribution from wages to profits from 2000 to 2016, the average worker would have an additional $4,000 per year in annual income.
This historic redistribution of income and wealth was the result of choices made by our political leaders and decision-makers. They chose to

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The Transatlantic Alliance will survive Trump

August 28, 2018

From Mark Weisbrot
Every week, and often more than once a week, there is another article in the major media or in foreign policy publications about the demise of the post-World War II Anglo-American world order. These analyses typically single out the Transatlantic Alliance between the US and Europe ― two of the world’s largest economies ― for special concern and anxiety as the underpinning of this world order. Not surprisingly, President Trump’s wildly fluctuating comments on NATO (despite the fact that he is expanding it), his unprecedented rudeness to European leaders, and his friendliness with Putin at the Helsinki summit have all added to the angst.
The basic story behind this moaning and melancholy is that the leaders of America put together a “rules-based” system based on “open

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The threat of a trade war is overblown ― real war is far more likely

April 1, 2018

From Mark Weisbrot
Talk of trade wars and falling skies has taken up much space in the media since Donald Trump first announced tariffs on imported steel and aluminum on March 1. But such fears are highly exaggerated, which should not be surprising in a country where the benefits of a succession of misnamed “free trade” agreements have been grossly exaggerated for decades. Within weeks of announcing the tariffs, the administration had already exempted most of the major suppliers of steel and aluminum to the United States  —including the European Union, Brazil, Argentina, South Korea, and Australia, along with Canada and Mexico.
China’s retaliation was minuscule: It announced tariffs on just $3 billion in US goods, or 0.13 percent of American exports. The Chinese, like most of the

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The International Monetary Fund’s world economic outlook in theory and practice

October 13, 2017

From Mark Weisbrot
The International Monetary Fund (IMF) released its biannual “World Economic Outlook” (WEO) today, presenting a 300-page overview of the world economy and where it might be going. The Fund is one of the most powerful and influential financial institutions in the world. Despite the fact that this flagship publication, and the Fund’s hundreds of PhD economists, missed the two biggest asset bubbles in US and world history (the stock market bubble in the late 1990s and the housing bubble that triggered the Great Recession), the WEO is taken very seriously and contains much valuable data and analysis.
The fall WEO is relatively upbeat for the world economy in the short run but is more worried about downside risks in the medium term. It lists a number of concerns that

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Curb your enthusiasm: Macron is just the beginning of a new fight for France and Europe

May 14, 2017

From Mark Weisbrot
The media response to the French election reads like some people had too much cannabis. From the first paragraph of a front page news analysis of the New York Times: “It was globalization against nationalism. It was the future versus the past. Open versus closed.”
Let’s not get carried away. It’s great that Marine Le Pen, whose National Front party with deep racist roots that go back to French collaborators during the Nazi occupation, as well as French colonialism, was defeated by a large margin of the votes cast. There were no signs that she had any realistic chance of winning, but people were understandably nervous after the Brexit and Trump votes. On the other hand, her 34 percent of the vote was about twice that of her father in 2002, who ran against the

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How the Eurozone damaged French politics — and this year’s presidential election

May 5, 2017

From Mark Weisbrot
As France heads into the second and final round of its presidential election on Sunday, a number of observers have compared the choice between the far-right candidate Marine Le Pen and centrist neoliberal Emmanuel Macron with the Trump-Clinton contest of 2016. There are similarities: Le Pen, who is politely called xenophobic, like Trump represents an anti-immigrant, right-wing nationalism combined with some populist appeals. Macron is a former investment banker and economy minister under the current Socialist government who, like Hillary, is widely seen as too close to powerful financial interests.
But one significant difference is that if Hillary had won the US presidency in 2016, she would most likely have tried to win some net improvements in the living standards and economic security of the majority of the electorate — including working class and poor people — who voted for her. The same cannot be said for Macron in France. His public platform has been vague, but insofar as it has a discernible trend, it is in the same direction that the country has moved over most of the past decade. That has included large public pension cuts, labor law reform that has weakened the bargaining power of unions and made it easier for employers to dismiss workers (including the Macron Law, as it is called, of 2015), and spending cuts.

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Could a leftist bring growth back to France?

April 20, 2017

From Mark Weisbrot
If the first round of the French presidential election on Sunday is now too close to call, that’s partly because of Jean-Luc Mélenchon’s last-minute surge in the polls. The media describe him as a populist from the far Left, and as he has risen, attacks on him have intensified.
One common criticism is that his economic proposal to jump-start growth in France while reducing mass unemployment and inequality is pie in the sky.
Is it, though?
Mr. Mélenchon would certainly face significant political hurdles if elected, including the need to build political support for his program in Parliament. But the French economy, despite serious problems, could sustain, as well as benefit from, his proposals.
He wants to reduce unemployment from 10 percent, its current level, to about 6 percent over the next five years, partly by increasing government spending by some 275 billion euros, or about 2.3 percent of GDP. The money would go to major public spending in renewable energy and environmental projects, housing and antipoverty programs, as well as toward lowering the retirement age and increasing wages in the public sector.
Mr. Mélenchon’s critics say that France is already living beyond its means.

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NAFTA has harmed Mexico a lot more than any wall could do

February 11, 2017

From Mark Weisbrot
President Trump is unlikely to fulfill his dream of forcing Mexico to pay for his proposed wall along the United States’ southern border. If it is built, it would almost certainly be US taxpayers footing the bill, with some estimates as high as $50 billion. But it’s worth taking a step back to look at the economics of US-Mexican relations, to see how immigration from Mexico even became an issue in US politics that someone like Trump could try to use to his advantage.
NAFTA (the North American Free Trade Agreement) is a good starting point. While it has finally become more widely recognized that such misleadingly labelled “free trade” agreements have hurt millions of US workers, it is still common among both liberal and right-wing commentators to assume that NAFTA has been good for Mexico. This assumption is forcefully contradicted by the facts.
If we look at the most basic measure of economic progress, the growth of GDP, or income, per person, Mexico ranks fifteenth out of 20 Latin American countries since it joined NAFTA in 1994. Other measures show an even sadder picture. According to Mexico’s latest national statistics, the poverty rate in 2014 was 55.1 percent ― actually higher than the 52.4 rate in 1994. 
Wages tell a similar story: almost no growth in real (inflation-adjusted) wages since 1994 ― just about 4.1 percent over 21 years.

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Italy’s political troubles have deep economic roots

December 9, 2016

From Mark Weisbrot
Much of the media, and the analysts on which it relies, have provided a misleading narrative on the current political problems in Italy, following Sunday’s “no” vote on a referendum on constitutional changes. It has been lumped together with Trump, Brexit, the upsurge of extreme right-wing, anti-European or racist political parties and “populism,” ― which in much of the media seems to be code for demagogic politicians persuading ignorant masses to vote for stupid things. “Stupid things” here is defined as whatever the establishment media doesn’t like.
Of course we do not have a detailed map of why various Italian voters rejected the proposed constitutional changes. The most obvious explanation is that Prime Minister Matteo Renzi, who has been in power since February 2014, had promised to resign if the people voted no. This mobilized all of his political opponents, including those within his own party.
Those who wanted to defend Renzi had a hard sell. He was not offering a future for the country, and especially for the young people who most overwhelmingly voted “no.”  Unemployment is at 11.6 percent, and youth unemployment is more than 36 percent. Of the unemployed, most are long-term unemployed, having been out of work for more than a year.

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Can the Venezuelan economy be fixed?

October 25, 2016

From Mark Weisbrot
The international media has provided a constant fusillade of stories and editorials (not always easily distinguished from each other) about the collapse of the Venezuelan economy for some time now. Shortages of food and medicine, hours-long lines for basic goods, incomes eroded by triple-digit inflation, and even food riots have dominated press reports.
The conventional wisdom has a set of predictable narratives to explain the current economic mess. “Socialism” has failed ― never mind that the vast majority of jobs created during the Chávez years were in the private sector, and that the size of the state has been much smaller than in France. The whole experiment, it is said, was a failure from the beginning. Nationalizations, antibusiness policies, populist overspending during the years of high oil prices, and then the collapse of these oil prices since 2014 sealed Venezuela’s fate. The downward spiral will continue until the chavistas are removed from power, either through elections or through a coup (most pundits don’t seem to care which). 
The reality is somewhat more complicated. First, the Bolivarian experiment did pretty well until 2014. From 2004, after the Chávez government got control over the national oil industry, until 2014, real income per person grew by more than 2 percent annually.

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The stock market’s fear of Trump could be final nail in his coffin

October 6, 2016

From Mark Weisbrot
Republican nominee Donald Trump’s embarrassments and scandals keep piling up, from his Twitter meltdown last Friday night to The New York Times revelations that he could have gotten away without paying income taxes for the past 18 years.

These may have some impact on the race, although it’s tough to guess how much. But a recent piece in the Times about Trump’s potential influence on the stock market could really take some votes away from him, if it happens to go viral.
The article, by economist Justin Wolfers, estimates that a Trump victory on Nov. 8 will take 10 to 12 percent off of the value of the stock market. It’s a crude estimate, but the logic appears to be sound. He bases it on the performance of stock market index futures on the evening of the September 26 presidential debate. To summarize very briefly, when Trump was doing badly in the debate — e.g., when Democratic nominee Hillary Clinton was hammering him about his tax returns and prediction markets indicated that his chances of winning the election were falling — the stock market index futures went up. The correlation is strong enough to extrapolate an estimated impact of an actual Trump win.
There are many people currently planning to vote for Trump on Nov. 8 for mostly personal monetary reasons.

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Will the IMF become irrelevant before it changes?

August 30, 2016

From Mark Weisbrot
The neoliberal reforms it has imposed on countries around the world have been disastrous.

The UK’s vote in June to leave the European Union, combined with an extraordinary backlash against trade agreements as manifested in the US presidential election, has set off an unprecedented public debate about globalization and even some of the neoliberal principles that it embodies in its current form. It is therefore of great relevance to look at what is happening to one of the most powerful promoters of neoliberal globalization in the world economy: the International Monetary Fund.
An article in the June issue of the IMF’s quarterly magazine, Finance and Development, raised a lot of eyebrows in Washington policy circles. “Neoliberalism: Oversold?” was the title, and the authors presented some evidence in the affirmative, for at least some important neoliberal policies. To most of us, it was like an op-ed from Donald Trump titled “Insulting Your Opponents: Oversold?”
Neoliberalism refers to a set of policies that the IMF has been promoting all over the world for decades.

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Bringing the Troika to Paris

June 15, 2016

From Mark Weisbrot
I have argued for years, and in my last post on this blog, that a big part of the story we have seen in Europe over the past eight years is a result of social engineering. This has involved a major offensive by the European authorities, taking advantage of an economic crisis, to transform Europe into a different kind of society, with a smaller social safety net, lower median wages, and — whether intended or not — increasing inequality as a result.

In recent weeks France has faced strikes and protests as the battle has come to their terrain, over a new, sweeping labor law. Among other provisions, the law would weaken workers’ protections regarding overtime pay, the length of the work week, and job security. But most damaging of all are the provisions that would structurally weaken unions and undermine their bargaining power. These would push collective bargaining away from the sectoral level, and toward the level of individual companies, thus making it more difficult for unions to establish industry standards for wages, hours, and working conditions.
Such structural “reforms” have been promoted by the European authorities (including the IMF) for years, and the ostensible rationale is to reduce unemployment.

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IMF economists discover some of the big failures of neoliberalism: about time

June 7, 2016

From Mark Weisbrot
The International Monetary Fund (IMF) has gotten some attention in the past week for the publication of an unusual article in its quarterly magazine, Finance and Development. The article’s title, “Neoliberalism: Oversold?” itself is a shocker, since the institution has been the most influential proponent of neoliberalism in the world for more than four decades. It’s kind of like an op-ed from Donald Trump titled, “Insulting Your Opponents: Oversold?”
From the authors (Jonathan D. Ostry, Prakash Loungani, and Davide Furceri):
[T]here are aspects of the neoliberal agenda that have not delivered as expected. Our assessment of the agenda is confined to the effects of two policies: removing restrictions on the movement of capital across a country’s borders (so-called capital account liberalization); and fiscal consolidation, sometimes called “austerity,” which is shorthand for policies to reduce fiscal deficits and debt levels. An assessment of these specific policies (rather than the broad neoliberal agenda) reaches three disquieting conclusions:The benefits in terms of increased growth seem fairly difficult to establish when looking at a broad group of countries.­

The benefits in terms of increased growth seem fairly difficult to establish when looking at a broad group of countries.­

The costs in terms of increased inequality are prominent.

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