CAN YOU TRUST THE EXPERTS?

Patricia Cohen, "Ivory Tower Unswayed by Crashing Economy," New York Times, March 5, 2009:

Unquestioning loyalty to a particular idea is what Robert J. Shiller, an economist at Yale, says is the reason the profession failed to foresee the financial collapse. He blames “groupthink,” the tendency to agree with the consensus. People don’t deviate from the conventional wisdom for fear they won’t be taken seriously, Mr. Shiller maintains. Wander too far and you find yourself on the fringe. The pattern is self-replicating. Graduate students who stray too far from the dominant theory and methods seriously reduce their chances of getting an academic job.

“I fear that there will not be much change in basic paradigms,” Mr. Shiller wrote in an e-mail message. “The rational expectations models will be tweaked to account for the current crisis. The basic curriculum will not change.” “I hope I am wrong,” he added.

David Colander et. al, "The Financial Crisis and the Systemic Failure of Academic Economics," 2009:

"The economics profession appears to have been unaware of the long build-up to the current worldwide financial crisis and to have significantly underestimated its dimensions once it started to unfold. In our view, this lack of understanding is due to a misallocation of research efforts in economics. We trace the deeper roots of this failure to the profession’s insistence on constructing models that, by design, disregard the key elements driving outcomes in real-world markets. The economics profession has failed in communicating the limitations, weaknesses, and even dangers of its preferred models to the public. This state of affairs makes clear the need for a major reorientation of focus in the research economists undertake, as well as for the establishment of an ethical code that would ask economists to understand and communicate the limitations and potential misuses of their models."

Jeff Madrick, "How the Entire Economics Profession Failed," The Daily Beast, January 8, 2009:

"At the annual meeting of American Economists [January 2-5, 2009] most everyone refused to admit their failures to prepare or warn about the second worst crisis of the century. I could find no shame in the halls of the San Francisco Hilton, the location at the annual meeting of American economists that just finished. Mainstream economists from major universities dominate the meetings, and some of them are the anointed cream of the crop, including former Clinton, Bush and even Reagan advisers.

There was no session on the schedule about how the vast majority of economists should deal with their failure to anticipate or even seriously warn about the possibility that the second worst economic crisis of the last hundred years was imminent. “No one questioned their contribution to the current frightening state of affairs, no one humbled by events.”

I heard no calls to reform educational curricula because of a crisis so threatening and surprising that it undermines, at least if the academicians were honest, the key assumptions of the economic theory currently being taught. There were no sessions about why the profession was not up in arms about the deregulation of so sensitive a sector as finance. They are quick to oppose anything that undermines free trade, by contrast, and have had substantial influence doing just that."

Bruce Bartlett, "Who Saw the Housing Bubble Coming," Forbes.com, January 2, 2009:

"The current economic crisis is raising many legitimate questions about the failure of economists and financial analysts to foresee the housing bubble and warn of its collapse. There were, in fact, many warnings dating back more than seven years--but in the euphoria of rising home prices, no one listened. . . . Federal Reserve Chairman Alan Greenspan first addressed the question of a housing bubble in testimony before the Joint Economic Committee on April 17, 2002. He dismissed the idea--or, for that matter, any comparison to the stock market, which had recently gone through a high-tech bubble--on the grounds that housing was different because of substantial transaction costs and more limited opportunities for speculation. Greenspan also argued that there really wasn't a single national market for housing, but rather a collection of many local markets. Even if a bubble emerged in one market, he said, there was no reason to think it would spill over into other markets."

In January 2008, the Washington Post argued against active government intervention to support economic growth, claiming that "There is not yet any proof of a recession, defined as two straight quarters of negative growth; Mr. Bernanke [head of the Federal Reserve Board] said yesterday that the economy probably grew 'at a moderate pace' in the past three months. Nor is there any consensus that a recession, if one comes, will be severe; Goldman Sachs thinks it's likely to be short and mild."

Paul Krugman reminds us that "Some people say that the current crisis is unprecedented, but the truth is that there were plenty of precedents, some of them of very recent vintage. Yet these precedents were ignored. . . . Time magazine famously named Mr. Greenspan, Robert Rubin and Lawrence Summers “The Committee to Save the World” — the “Three Marketeers” who “prevented a global meltdown.” In effect, everyone declared a victory party over our pullback from the brink, while forgetting to ask how we got so close to the brink in the first place."

Measuring Unemployment: The official unemployment rate (U-3) significantly understates the degree of unemployment. For example, it counts people involuntarily working part time as fully employed and it does not count people that want to work but have given up looking for work. The government does have an alternative measure of unemployment that corrects for these shortcomings, which it calls U-6. The official March 2009 unemployment rate was 8.5 percent; the official U-6 rate was 15.6 percent. See Daniel Gross, "The unemployment rate seems low. That's because it's not counting all those underemployed workers," Slate, Oct. 22, 2008.

Total Unemployment: The unemployment rate measures the percent of the labor force that is unemployed at a moment in time. The percentage of people that suffer unemployment over a period is much higher than the average unemployment rate for that period. For example, according to government records the percentage of people that suffer unemployment over a year is approximately twice the yearly average unemployment rate. Thus, while the unemployment rate for 2007 was 4.6 percent, approximately 9.2 percent of the work force experienced some unemployment over the year.

Unemployment Highs: The official unemployment rate reached 10.8 percent in 1982 as a result of the early 1980s recession. This was the highest unemployment rate since the end of the Great Depression. It hit 9 percent in 1975 following the mid-1970s recession, 7.8 percent in 1992 following the early 1990s recession, and 6.3 percent in 2003 following the 2001 recession. The December 2008 unemployment rate stands at 7.2 percent—how high will it go as this recession gathers force? Jobs Bytes offers a monthly look at employment trends

A Broken Unemployment System: According to the New York Times, a report by the Center for American Progress and the National Employment Law Project found that "tighter rules mean that just 37 percent of unemployed Americans are receiving jobless benefits today, down from 42 percent during the 1981-82 recession and 50 percent during the 1974-75 downturn. Americans today receive a maximum of 39 weeks of unemployment benefits, down from 65 weeks in the 1970s. The average weekly benefit is $293. And low-income workers — a category that tends to include women and those in part-time employment — are one-third as likely to receive unemployment insurance as higher-income workers. Another liberal group, the Center for Budget Policy and Priorities, said that as states have imposed tougher restrictions on welfare, just 40 percent of very poor families who qualify for public assistance today actually end up receiving it, compared with 80 percent in the recessions of 1981-82 and 1990-91."

• BUSINESS IS BOOMING AT THE FOOD BANKS--According to Julie Bosman, "Newly Poor Swell Lines at Food Banks,"
  New York Times, February 19, 2009: Once a crutch for the most needy, food pantries have responded to the deepening recession by opening their doors to what Rosemary Gilmartin, who runs the Interfaith Food Pantry here, described as “the next layer of people” — a rapidly expanding roster of child-care workers, nurse’s aides, real estate agents and secretaries facing a financial crisis for the first time.

  Demand at food banks across the country increased by 30 percent in 2008 from the previous year, according to a survey by Feeding America, which distributes more than two billion pounds of food every year. And instead of their usual drop in customers after the holidays, many pantries in upscale suburbs this year are seeing the opposite.

• RISING HUNGER AND FOOD INSECURITY--According to a report issued in November 17, 2008, hunger and food insecurity rates in the United States increased in 2007. More than 36.2 million people lived in households struggling against hunger in 2007, compared to 35.5 million in 2006 and 33.2 million in 2000. The number of people in the worst-off category – the hungriest Americans – has risen 40 percent since 2000, from 8.5 million to 11.9 million. More specifically:

  * The 36.2 million people in food insecure households in 2007 includes 23.8 million adults (10.6 percent of all adults) and 12.4 million children (16.9 percent of all children).
  * 11.9 million people lived in households that were considered to have “very low food security,” a USDA term (previously denominated “food insecure with hunger”) that means one or more people in the household were hungry over the course of the year because of the inability to afford enough food.
  * Black (22.2 percent) and Hispanic (20.1 percent) households experienced food insecurity at far higher rates than the national average.

  Since 1995, the United States Department of Agriculture, using data from surveys conducted annually by the Census Bureau, has released estimates of the number of people in households that are food insecure. Food insecure households are those that are not able to afford an adequate diet at all times in the past 12 months.

• A BROKEN WELFARE SYSTEM--According to Jason Deparle, "Welfare Aid Not Growing As Economy Drops Off," New York Times, February 1, 2009: "Despite soaring unemployment and the worst economic crisis in decades, 18 states cut their welfare rolls last year, and nationally the number of people receiving cash assistance remained at or near the lowest in more than 40 years. . . . Of the 12 states where joblessness grew most rapidly, eight reduced or kept constant the number of people receiving Temporary Assistance for Needy Families, the main cash welfare program for families with children. Nationally, for the 12 months ending October 2008, the rolls inched up a fraction of 1 percent." The reason: The 1996 reform of welfare "ended a 60-year-old entitlement to cash aid, replacing it with time limits and work requirements, and giving states latitude to discourage people from joining the welfare rolls. While it was widely praised in the boom years that followed, skeptics warned it would fail the needy when times turned tough. Supporters of the program say the flat caseloads may reflect a lag between the loss of a job and the decision to seek help. They also say the recession may have initially spared the low-skilled jobs that many poor people take. But critics argue that years of pressure to cut the welfare rolls has left an obstacle-ridden program that chases off the poor, even when times are difficult. Even some of the program’s staunchest defenders are alarmed." And they have every reason to be.
  
  
• Just to make you feel better--According to Ben White, "What Red Ink? Wall St. Paid Hefty Bonuses," New York Times, January 28, 2009: "Despite crippling losses, multibillion-dollar bailouts and the passing of some of the most prominent names in the business, employees at financial companies in New York, the now-diminished world capital of capital, collected an estimated $18.4 billion in bonuses for the year [2008]."

• Ambrose Evans-Pritchard, "We need shock and awe policies to halt depression," Telegraph, Februrary 28, 2009:
  
  Factory output is collapsing at the fastest pace everywhere. The figures for the most recent month available are, year-on-year: Taiwan (-43pc), Ukraine (-34pc), Japan (-30pc), Singapore (-29pc), Hungary (-23pc), Sweden (-20pc), Korea (-19pc), Turkey (-18pc), Russia (-16pc), Spain (-15pc), Poland (-15pc), Brazil (-15pc), Italy (-14pc), Germany (-12pc), France (-11pc), US (-10pc) and Britain (-9pc). Norway sails blissfully on (+4pc). What do they drink up there?

  This terrifying fall has been concentrated in the last five months. The job slaughter has barely begun. Social mayhem comes with a 12-month lag. By comparison, industrial output in core-Europe fell 2.8pc in 1930, 5.1pc in 1931 and 3.9pc in 1932, according to RBS.

• Greg Miller, "Global economic crisis called biggest U.S. security threat," The Los Angeles Times, February 13, 2009.

The nation's new intelligence chief warned Thursday [February 12, 2009] that the global economic crisis is the most serious security peril facing the United States, threatening to topple governments, trigger waves of refugees and undermine the ability of America's allies to help in Afghanistan and elsewhere. The economic collapse "already looms as the most serious one in decades, if not in centuries," said Dennis C. Blair, director of national intelligence, in his first appearance before Congress as the top intelligence official in the Obama administration.

• Crisis in Manufacturing--The Economist, "The collapse of manufacturing," February 19, 2009:

Industrial production fell in the latest three months by 3.6% and 4.4% respectively in America and Britain (equivalent to annual declines of 13.8% and 16.4%). Some locals blame that on Wall Street and the City. But the collapse is much worse in countries more dependent on manufacturing exports, which have come to rely on consumers in debtor countries. Germany’s industrial production in the fourth quarter fell by 6.8%; Taiwan’s by 21.7%; Japan’s by 12%—which helps to explain why GDP is falling even faster there than it did in the early 1990s. Industrial production is volatile, but the world has not seen a contraction like this since the first oil shock in the 1970s—and even that was not so widespread. Industry is collapsing in eastern Europe, as it is in Brazil, Malaysia and Turkey. Thousands of factories in southern China are now abandoned. Their workers went home to the countryside for the new year in January. Millions never came back.

• Anthony Faiola, "Downturn Accelerates As It Circles The Globe, Economies Worse Off Than Predicted Just Weeks Ago," Washington Post, January 24, 2009:
  
  The world economy is deteriorating more quickly than leading economists predicted only weeks ago, with Britain yesterday becoming the latest nation to surprise analysts with the depth of its economic pain. . . . The depth of the troubles, analysts say, indicates that nations may need to spend more than the billions of dollars already planned on stimulus packages to jump-start their economies, and that a global recovery could take longer, perhaps pushing into 2010.

  Analysts are particularly concerned about the slowdown in China and the recession in Europe. There is mounting concern about the stability of the euro and the British pound, which dropped to a 24-year low against the dollar yesterday. Analysts are fretting about the possibility of a debt default in a euro-zone country that could send fresh shock waves through global financial markets.

  The problems in Europe now appear to be as bad if not worse than those in the United States. In the last quarter of 2008, the British economy shrank at an annualized rate of 6 percent. That is worse than economists expected, but also showed the British recession may be even harsher than the one in the United States, where analysts predict data expected next week will show the U.S. economy to have contracted between 5 and 5.5 percent in the last quarter of 2008.
  

• Peter G. Gosselin, "U.S. economy may sputter for years, Unemployment could be worse than now by the time President-elect Barack Obama's first term ends," Los Angeles Tiimes, January 19, 2009:
  
  If renewed consumption isn't going to revive the U.S. economy, and a growing world able to buy more U.S. exports has vanished, one of the few options for recovery that's left is business investment. But investment, especially in high technology, was barely growing even during the boom years of this decade. With the economic crisis, it has plunged.

Lonski, the Moody's economist, used government statistics to examine business investment in such high-tech items as computer and telecommunications equipment. What he found was that in most previous cycles, companies quickly resumed investing after the economy moved from bust to boom, pushing computer and telecom orders back above their pre-bust highs. But not in this decade.

Between the last recession in 2001 and the current one, high-tech investment has barely crawled upward. That has left telecom and computer orders still down nearly 50% from their previous highs. "This shows that technological progress was lagging" during the decade's good years, Lonski said. It seems unlikely the pattern should improve now that times are bad.

Obama seems to be backing away from his early promises of meaningful stimulus

• Nick Baumann, "James Galbraith: Obama Isn't Doing Enough to Solve the Financial Crisis," Mother Jones, February 26, 2009.
  
  
  
• Alec MacGillis, "Democrats Among Stimulus Skeptics, Some See Long-Term Goals Going Unmet ," Washington Post, January 28, 2009:

  [House Democrats] disappointment centers on the relatively small amount devoted to long-lasting infrastructure investments in favor of spending on a long list of government programs. While each serves a purpose, the critics say, they add up to less than the sum of their parts, and fall far short of the transformative New Deal-like vision many of them had entertained. The bill to be voted on today includes $30 billion for roads and bridges, $9 billion for public transit and $1 billion for inter-city rail -- less than 5 percent of the package's total spending. . . .

  Even some Republicans echo the call for more infrastructure spending, saying they would be more willing to support the bill if it showed more tangible and focused benefits, instead of being scattered across an array of existing programs. Rep. John L. Mica (Fla.), the ranking Republican on the transportation committee, called the proposed infrastructure spending "almost minuscule" and expressed regret that the administration had not crafted its plan around an ambitious goal such as building high-speed rail in 11 corridors around the country, which Mica said would cost $165 billion. "They keep comparing this to Eisenhower, but he proposed a $500 billion highway system, and they're going to put $30 billion" in roads and bridges, he said. "How farcical can you be? Give me a break."
  

• Paul Krugman, "Ideas for Obama," New York Times, January 12, 2009:

  On Saturday, Christina Romer, the future head of the Council of Economic Advisers, and Jared Bernstein, who will be the vice president's chief economist, released estimates of what the Obama economic plan would accomplish. Their report is reasonable and intellectually honest, which is a welcome change from the fuzzy math of the last eight years.

  But the report also makes it clear that the plan falls well short of what the economy needs.

  According to Ms. Romer and Mr. Bernstein, the Obama plan would have its maximum impact in the fourth quarter of 2010. Without the plan, they project, the unemployment rate in that quarter would be a disastrous 8.8 percent. Yet even with the plan, unemployment would be 7 percent — roughly as high as it is now.

  After 2010, the report says, the effects of the economic plan would rapidly fade away. The job of promoting full recovery would, however, remain undone: the unemployment rate would still be a painful 6.3 percent in the last quarter of 2011.
  

• Paul Krugman, "Stimulus arithmetic (wonkish but important)," New York Times, January 6, 2009:

Bit by bit we’re getting information on the Obama stimulus plan, enough to start making back-of-the-envelope estimates of impact. The bottom line is this: we’re probably looking at a plan that will shave less than 2 percentage points off the average unemployment rate for the next two years, and possibly quite a lot less. This raises real concerns about whether the incoming administration is lowballing its plans in an attempt to get bipartisan consensus.

Treasury and Fed policy to this point has largely been concerned with stabilizing a financial system that has not served majority interests. It is time to pursue nationalization.

• Joe Nocera, "Propping Up a House of Cards," New York Times, February 27, 2009.
  
  
• CNBC.com, "Dr. Doom: Nationalizing Banks is 'Market Friendly'," February 24, 2009.
  
  
• Sam Stein, "Bank Nationalization: As American As Apple Pie," HuffintonPost.com, February 22, 2009.
  
  
• Francesco Guerrera, "Nationalisation is most likely way out of US banking mess," Financial Times, February 20 2009.
  
  
• Denis Campbell, "Obvious Solution to Global Banking Crisis," L.A. Progressive, February 16, 2009.
  
  
• Bill Moyers and Simon Johnson, "Geithner vs. the American Oligarchs," Bill Moyers Journal, February 13, 2009.
  
  
• David E. Sanger, "Nationalization Gets a New, Serious Look," New York Times, January 25, 2009: "taxpayers are now the biggest shareholders in Bank of America, with about 6 percent of the stock, and in Citigroup, with 7.8 percent. But the government’s influence is far larger than those numbers suggest, because it has guaranteed to absorb the losses of some of the two banks’ most toxic assets, a figure that could run into the hundreds of billions of dollars."

• A group of economists and progressive organization leaders has drafted this Main Street Recovery Program to meet urgent needs unaddressed by efforts to shore up Wall Street financial institutions. This program calls for a substantial, strategic, and sustained effort to not only address the impact the of current recession on the real economy but to reshape the economy for the 21st century.
  

• Rick Wolff, "Policies to 'Avoid' Economic Crises," MRZine, June 11, 2008.
  
  
• David Leonhardt, "Top Priority Is Stabilizing the Patient," New York Times, November 5, 2008.
  
  
• Robert Kuttner, "Time to Nationalize a Bank," The American Prospect, October 31, 2008.
  
  
• Robert Pollin, "How to End the Recession," Nation Magazine, November 6, 2008.
  
  
• Ethan Pollack, "A Meaningful Stimulus for Main Street," Economic Snapshots, Economic Policy Institute, October 22, 2008.
  
  
• Linda Hirshman, "Where are the new jobs for women?" New York Times, December 9, 2008.
  
  
• Dollars and Sense, "Open Letter to O. on Jobs and Gender," December 16, 2008:
  
  "We are also concerned that if the stimulus package primarily emphasizes construction it is likely to reinforce existing gender inequities. Women today make up 46 percent of the labor force. Simple fairness requires creating that proportion of job opportunities for them. Some of this can and should be accomplished through training programs and other measures to help women enter traditionally male-occupied jobs. But it can also be accomplished by creating much-needed jobs in the vital sectors where women are now concentrated."

Noam Chomsky, speaking about the economic crisis and democracy, had the following to say:

In a democracy, in a functioning democracy, what would be happening is that popular organizations, unions, political groupings, others would be developing their programs, putting them forth, insisting that their representatives implement those programs. And there are possible programs that might make a difference, but none of this is happening. And the reason this isn't happening is because there is no functioning democracy. The role of the public is restricted to shouting, 'No'. The [bailout] bill passed in the House because the alternative was quite dire, but it doesn't mean it was a good proposal, or by any means the best proposal. I mean there are serious problems, and they have deep roots.

The US Scene

• Global Labor Strategies, "Buy American? Buyer Beware!," March 4, 2009.
  
  
• NATIONAL CALL FOR “FIRST FRIDAY” ACTIONS TO DEMAND GOOD JOBS FOR ALL NOW!!, February 2009.
  

• David Bacon, "Unions Needs a Radical Vision," Monthly Review, February 2009.
  
  
• Jeremy Brecher, "Can Green Jobs Be Good Jobs?" The Nation, February 16, 2009.

The Revolt in Greece--the first credit-crunch riots?

Peter Popham, "Greece's riots are a sign of the economic times. Other countries should beware," The Independent, Saturday, 13 December 2008:

After firing 4,600 tear-gas canisters in the past week, the Greek police have nearly exhausted their stock. As they seek emergency supplies from Israel and Germany, still the petrol bombs and stones of the protesters rain down, with clashes again outside parliament yesterday.

Bringing together youths in their early twenties struggling to survive amid mass youth unemployment and schoolchildren swotting for highly competitive university exams that may not ultimately help them in a treacherous jobs market, the events of the past week could be called the first credit-crunch riots. There have been smaller-scale sympathy attacks from Moscow to Copenhagen, and economists say countries with similarly high youth unemployment problems such as Spain and Italy should prepare for unrest. . . .

Although Greece's headline unemployment of 7.4 per cent is just below the eurozone average, the OECD estimates that unemployment among those aged 15 to 24 is 22 per cent, although some economists put the real figure at more like 30 per cent.

"Because of unemployment, a quarter of those under 25 are below the poverty line," said Petros Rylmon, an economist at Linardos, the Labour Institute of the Greek trade unions. "That percentage has been increasing for the past 10 years. There is a diffused, widespread feeling that there are no prospects. This is a period when everyone is afraid of the future because of the economic crisis. There is a general feeling that things are going to get worse. And there is no real initiative from the government."

Greece's official youth unemployment statistics are not far removed from the rates in other European countries with a history of mass protest, such as France, Italy and Spain. With the graffiti "The Coming Insurrection" plastered near the Greek consulate in Bordeaux this week, the warning signs to the rest of the continent's leaders are clear.

Timesonline, "New wave of riots expected as 100,000 face sack in Greece," December 15, 2008:

“A massive wave of redundancies will kick in come the new year when, according to our estimates, 100,000 jobs will be lost, which represents an additional 5 per cent on the unemployment rate,” said Stathis Anestis, of the General Confederation of Greek Workers.

An opinion poll at the weekend showed that about half of Greeks considered the violence to be a “popular uprising”, while almost 70 per cent thought that the Government – the main focus of the rioters’ ire – had responded to the crisis inadequately.

Leigh Phillips, "Sarkozy fears spectre of 1968 haunting Europe," Euobserver.com, December 23, 2008:

"Things are heating up everywhere in Europe, in Greece, but also in Spain, Italy and even in France. The slogan of the Greek students about ‘the €600 Generation' could easily catch on here," President Sarkozy told his ministers.

Around the world things are heating up

Britain--"Police are preparing for a "summer of rage" as victims of the economic downturn take to the streets to demonstrate against financial institutions, the Guardian has learned. Britain's most senior police officer with responsibility for public order raised the spectre of a return of the riots of the 1980s, with people who have lost their jobs, homes or savings becoming "footsoldiers" in a wave of potentially violent mass protests."

Riga--"The old Baltic trading city had seen nothing like it since the happy days of kicking out the Russians and overthrowing communism two decades ago. More than 10,000 people converged on the 13th-century cathedral to show the Latvian government what they thought of its efforts at containing the economic crisis. The peaceful protest morphed into a late-night rampage as a minority headed for the parliament, battled with riot police and trashed parts of the old city. The following day there were similar scenes in Vilnius, the Lithuanian capital next door."

Paris--"Burned-out cars, masked youths, smashed shop windows, and more than a million striking workers. The scenes from France are familiar, but not so familiar to President Nicolas Sarkozy, confronting the first big wave of industrial unrest of his time in the Elysée Palace. Sarkozy has spent most of his time in office trying to fix the world's problems, with less attention devoted to the home front. From Gaza to Georgia, Russia to Washington, Sarkozy has been a man in a hurry to mediate in trouble spots and grab the credit for peacemaking. France, meanwhile, is moving into recession and unemployment is going up. The latest jobless figures were to have been released yesterday, but were held back, apparently for fear of inflaming the protests."

Ireland--"Up to 120,000 protesters brought Dublin city centre to a standstill on Saturday [February 21, 2009] over government austerity measures aimed at stabilising the once high-flying economy now wracked by recession."

Guadeloupe, Caribbean--French government [in February 2009], was sending police reinforcements to the Caribbean island of Guadeloupe after a month of strikes and protests over low pay and high prices followed by clashes between police and protesters. Strikers have been demanding a raise of $250 a month for low-wage workers who now make about $1,130 a month. "Underlying much of the unrest in Guadeloupe and Martinique is anger within the local Afro-Caribbean community ... that the vast majority of wealth and land remain in the hands of colonist descendants," noted Al Jazeera. Across much of the world, and much of Latin America in particular, the global economic crisis is going to play out against a legacy of extreme inequality and poverty. The unrest in Guadeloupe may be a preview of what's coming worldwide if there isn't a change in Washington's priorities.