Marketplace of Ideas
As you mark the unofficial start to summer with Memorial Day barbecues, remember that the holiday has its origins in tributes to those who died in the Civil War. Before firing up the grill, you should also check out these stories from the week’s economic news:
- Americans who enjoy the British TV drama Downton Abbey should take note that the class distinctions it depicts are not relics of the past: London’s Sunday Times has published its Rich List for 2014 showing Britain’s richest 1,000 people are 15.4% wealthier than they were a year ago. Collectively, they are worth one third of U.K. GDP. To get on the list, you have to be worth at least £85 million—that’s about $143 million. Meanwhile, total wage income in the U.K. was up just 1.4% in the first quarter of 2014, according to data published by the Office for National Statistics this week. The numbers don’t look any better in the U.S. An article in the New York Times this week on the uneven economic recovery has these statistics: Since 2009, GDP has grown 11 percent, the S&P 500 has risen 83 percent, corporate profits have gone up 53 percent , and median household income has fallen 4 percent. According to Bloomberg, the U.S. has higher income inequality than Britain—and also Bangladesh and Ethiopia. “Economic equality isn’t automatically a wonderful thing,” says Businessweek, but “most people would agree that having a high level of inequality is undesirable and potentially damaging.”
- What do Oregon and Russia have in common? They are both looking to ban genetically modified crops. Two counties in Oregon voted overwhelmingly this week in favor of banning GMOs, despite a million dollar campaign by chemical companies to sway voters and an Oregon state law prohibiting counties from instituting such bans. Meanwhile, there’s a bill in Russia’s parliament to levy the same punishment for the illegal use of GMOs as for terrorists. While 93 percent of soy and 85 percent of corn grown in the U.S. are genetically modified, according to the USDA, other countries have been less keen to introduce GMOs into their diets. The European Union subjects all GMO seeds to a strict evaluation, and very few are approved, especially for human consumption. The EU also requires all food products with a 1 percent or greater makeup of GMOs to be labeled. One of the reasons why GMO labeling hasn’t gotten off the ground in the U.S., despite widespread support in states from California to Maine, is because chemical companies such as Monsanto, which manufactures GMO seeds, have spent hundreds of millions of dollars to keep regulations at bay. Some argue that GMO crops are helpful to farmers’ finances, but a recent USDA study shows “no significant differences” in yield between GMO seeds and non-GMO seeds—and Monsanto is known for its adversarial relationship with farmers. This weekend, the consumer group March Against Monsanto is staging events in 52 countries worldwide.
- Russia this week inked a $400 billion deal to export natural gas to China. President Vladimir Putin is shopping alternative markets for Russia’s key export, as relations with Europe deteriorate over the Ukraine crisis. The alignment with China will advance Putin’s effort to build a “Eurasian Economic Union” to rival the European Union and consolidate Russia’s influence in the global economy. Meanwhile, inside Europe, right-wing parties have been gripped by a “contrarian fever of enthusiasm” for Russia ahead of European Parliament elections this weekend. Those parties are looking to break “submission” to U.S. influence by aligning with Russia. That gives them something in common with NSA leaker Edward Snowden, who is now working for the Russian federal security service, the intelligence agency that replaced the KGB. Pick your sides for the New Cold War!