November 28, 2009

Watching the World

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John Judis a few days ago on the possible fallout from the Dubai World crisis:

You have to remember that the Great Depression only became “great,” that is, global, when an obscure Austrian bank went under in 1931, and set off a massive financial explosion around Europe.  Capitalism is an irrational system that is often full of unpleasant surprises. The collapse of Dubai World may turn out to be nothing.  But it could also turn out be one of those unpleasant surprises.

Hopefully not.  But this has always been my biggest concern.  A slow jobless recovery seems all but certain at this point, but I also think we’ll be lucky if that’s as bad as it gets.  The nightmare scenario is that something like Dubai World panics investors and sends them fleeing back to quality; Eastern Europe can’t roll over its debt; Brazil goes kaboom as hot money suddenly stops flowing; Western European banks start to fail; etc.  You can fill in the rest.  I was unpleasantly reminded of all this by the lead to this story in the Washington Post today:

DUBAI CRISIS IS WAKE-UP CALL
Investors weigh risks in emerging economies

Global markets were jolted in recent days following the threat by a state-owned company in Dubai to default on its debt, as investors reawakened to the risks posed by mammoth debts in developing economies.

After the credit collapse of 2008, financial folks rushed to tell us that they had learned their lesson.  But a lot of us were skeptical: sure, maybe they’d learned their lesson for a few years while the wounds were still fresh, but what about five years from now?  Ten?

In the end, though, it didn’t take five or ten years.  It took one.  Twelve months after the catastrophe of September 2008, hot money is racing around the globe, the carry trade is as big as ever, Wall Street profits are at record highs, and the chase for supposedly risk-free returns seems to be as widespread as it’s ever been.  That combination didn’t end well even when it took place against the background of a strong economy, so how’s it likely to end against the background of a weak and fragile one now that investors are “reawakening”?

Beats me.  I sure hope I’m just a worrywart.

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“This could be the first time a corporation would be held criminally liable for forced labor in their own supply chains,” according to a retired special agent we talked to.

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WHO DOESN’T LOVE A POSITIVE STORY—OR TWO?

“Great journalism really does make a difference in this world: it can even save kids.”

That’s what a civil rights lawyer wrote to Julia Lurie, the day after her major investigation into a psychiatric hospital chain that uses foster children as “cash cows” published, letting her know he was using her findings that same day in a hearing to keep a child out of one of the facilities we investigated.

That’s awesome. As is the fact that Julia, who spent a full year reporting this challenging story, promptly heard from a Senate committee that will use her work in their own investigation of Universal Health Services. There’s no doubt her revelations will continue to have a big impact in the months and years to come.

Like another story about Mother Jones’ real-world impact.

This one, a multiyear investigation, published in 2021, exposed conditions in sugar work camps in the Dominican Republic owned by Central Romana—the conglomerate behind brands like C&H and Domino, whose product ends up in our Hershey bars and other sweets. A year ago, the Biden administration banned sugar imports from Central Romana. And just recently, we learned of a previously undisclosed investigation from the Department of Homeland Security, looking into working conditions at Central Romana. How big of a deal is this?

“This could be the first time a corporation would be held criminally liable for forced labor in their own supply chains,” according to a retired special agent we talked to.

Wow.

And it is only because Mother Jones is funded primarily by donations from readers that we can mount ambitious, yearlong—or more—investigations like these two stories that are making waves.

About that: It’s unfathomably hard in the news business right now, and we came up about $28,000 short during our recent fall fundraising campaign. We simply have to make that up soon to avoid falling further behind than can be made up for, or needing to somehow trim $1 million from our budget, like happened last year.

If you can, please support the reporting you get from Mother Jones—that exists to make a difference, not a profit—with a donation of any amount today. We need more donations than normal to come in from this specific blurb to help close our funding gap before it gets any bigger.

payment methods

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