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Legislator expresses optimism Senate will support economic amendments to Constitution

A DEPUTY SPEAKER said deliberations on economic amendments to the Constitution will likely continue in May for timely transmission to the Senate, where he is confident the amendments will find support.

In a statement Thursday, Representative Rufus B. Rodriquez said: “Since we will have a break next week on March 25, the deliberations will continue when we resume session on May 17.”

Mr. Rodriguez said by the time the amendments are transmitted to the Senate, that chamber will have sufficient time to consider the proposed changes to the Constitution.

The House committee on constitutional amendments last month adopted Resolution of Both Houses No. 2 which inserts the phrase “unless otherwise provided by law” in the foreign investment restrictions in the Constitution, which would allow greater foreign participation in the economy with the passage of appropriate laws.

“The changing of those restrictions will hasten the country’s recovery from this crippling pandemic,” he said, adding that statements of support by some Senators makes him confident that the chamber “will tackle our amendment proposals once transmitted to them and will eventually consider approving them.”

He added that the House will propose only economic amendments.

Senate President Vicente C. Sotto III said in January that a one-line amendment to relax foreign ownership limits in the Constitution has a chance of being passed by the Senate. — Vann Marlo M. Villegas

LGU real property tax cases worth P4.53B resolved in 2020

THE Central Board of Assessment Appeals (CBAA) resolved cases raised by local government units (LGUs) last year involving an estimated P4.53 billion worth of real property taxes, the Department of Finance (DoF) said Thursday.

Twenty-two cases remain pending after hearings were suspended at the height of the lockdown last year, according to the DoF, citing a report from CBAA Chairman Robert Hernando Tobia.

Of the 16 resolved cases received by the board, nine were from Mindanao, four from Visayas and three in Luzon.

Republic Act No. 7160 or the Local Government Code, created the CBAA as an independent, quasi-judicial body to rule on assessment and collection cases brought by municipalities, cities and provinces.

Mr. Tobia said in his report that six of the resolved cases are awaiting rulings from the Court of Tax Appeals.

The DoF said several Local Boards of Assessment Appeals (LBAAs) remain inactive or have yet to be organized, “depriving taxpayers of real property tax remedies and procedures that should be available to them.”

Finance Secretary Carlos G. Dominguez III said the CBAA should work with the Department of the Interior and Local Government to help organize LBAAs even during quarantine. — Beatrice M. Laforga

Peso rebounds on dovish Fed

THE PESO rebounded versus the greenback on Thursday as the US Federal Reserve renewed its commitment to keep rates low to support the recovery of the world’s largest economy.

The local unit closed at P48.68 versus the dollar yesterday, appreciating by 4.5 centavos from its P48.725 close on Wednesday, data from the Bankers Association of the Philippines showed.

The peso opened Thursday’s session at P48.64 per dollar. Its weakest showing was at P48.68 while its intraday best was at P48.62 versus the greenback.

Dollars traded dropped to $748.3 million from $793.7 million on Wednesday.

The peso strengthened after the Fed said it would remain accommodative, a trader said in an email.

Fed Chairman Jerome Powell said the recent uptick in US inflation will not change their pledge to leave the benchmark overnight interest rate near zero to support the virus-stricken economy, Reuters reported.

“We are committed to giving the economy the support it needs to return as quickly as possible to a state of maximum employment,” Mr. Powell said at the close of the US central bank’s two-day policy review.

The Fed’s higher economic growth and employment estimates also boosted the peso, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a text message.

Fed officials said they expect US gross domestic product to expand by 3.3% and 2.2% in 2022 and 2023, beyond the estimated long-term potential growth of 1.8%.

Meanwhile, the Fed sees unemployment settling at 4.5% by end-2021, better than the 6.4% outlook it gave in June last year.

For Friday, the trader gave a forecast range of P48.50 to P48.70 per dollar, while Mr. Ricafort expects the local unit to move within the P48.63 to P48.73 levels. — LWTN with Reuters

PHL shares rise as Fed keeps key rate near zero

PHILIPPINE SHARES climbed on Thursday after the US Federal Reserve kept its key interest rate near zero to support the recovery of the world’s largest economy.

The Philippine Stock Exchange index (PSEi) rose by 64.02 points or 0.97% to close at 6,630.85 on Thursday. The all shares index also climbed by 40.31 points or 1.01% to finish at 4,005.09.

“Market moved up [on Thursday] in line with most regional markets as [the] US Fed maintained overnight rates to reassure the market of its tolerant stance on inflation [and] renewed emphasis on continued policy support,” Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said via text message.

“The PSEi climbed higher led by recently battered blue chip property and bank stocks. Trading volumes continue to decline as investors take a wait-and-see approach,” AAA Southeast Equities, Inc. Research Head Christopher John J. Mangun said in an e-mail.

The US economy is heading for its strongest growth in nearly 40 years, the Federal Reserve said on Wednesday, and central bank policy makers are pledging to keep their foot on the gas despite an expected surge of inflation, Reuters reported.

“Strong data are ahead of us,” a confident Fed Chair Jerome Powell said after a two-day policy meeting, ticking off the list of forces Fed officials expect will produce 6.5% gross domestic product growth this year — from massive federal fiscal stimulus to optimism around the success of coronavirus vaccines.

The Federal Open Market Committee’s policy statement, which kept the benchmark overnight interest rate in a target range of 0-0.25%, was unanimous.

“We are committed to giving the economy the support it needs to return as quickly as possible to a state of maximum employment,” Mr. Powell said in a briefing after the Fed released its new economic projections and latest policy statement.

Back home, all sectoral indices improved except for holding firms, which declined by 3.93 points or 0.05% to 6,694.43.

Meanwhile, financials went up by 32.05 points or 2.28% to 1,436.33; property improved by 71.29 points or 2.18% to 3,333.76; mining and oil increased by 134.28 points or 1.58% to 8,619.13; industrials rose by 54.82 points or 0.64% to 8,582.71; and services added 3.45 points or 0.24% to close at 1,438.68.

Value turnover climbed to P8.85 billion on Thursday with 3.06 billion shares switching hands from the P6.85 billion with 4.62 billion issues traded on Wednesday.

Advancers beat decliners, 149 against 64, while 41 names closed unchanged.

Net foreign selling grew to P397.96 million on Thursday from the P256.96 million seen the day prior.

“There is still some hope that the pandemic situation will improve in the coming weeks which will give the investor sentiment a boost,” AAA Southeast Equities’ Mr. Mangun said. “Until then, the market will continue sideways with a slight negative bias.” — KCGV with Reuters

The other side of the pandemic

The International Monetary Fund’s (IMF) recent issue of Finance and Development for March highlighted the other side of the health pandemic. The virus that we dread helped accelerate the digital future and its good and bad consequences. The Fund drew global attention to its potential impact on poverty and inequality following the pandemic shock and the quality of public health response.

IMF’s chief economist Gita Gopinath estimated that 90 million people are likely “to fall into extreme poverty during 2020 and 2021, reversing the trend of the past two decades.”

The Philippines is no stranger to poverty. This is a reality close to the experience of at least the families of the four million unemployed as of January. In addition, underemployment prevents people from mitigating their material lack. Between October 2020 and January 2021, underemployment rose from 14.4% to 16%, or nearly seven million Filipinos.

Labor market statistics here and in other countries would confirm that unemployment has exacerbated pre-pandemic poverty and inequalities.

Work automation, the threshold to the digital future, has no doubt contributed to labor redundancy.

Gopinath explained that the upgrades in the growth projections in the January’s World Economic Outlook assumed mass vaccination, sustained policy support in large economies and adherence to social distancing rules. With uncertainty in the implementation of public policy, the Fund was concerned with divergences in the growth prospects of member countries.

How did the Fund propose to achieve minimal economic scarring?

We completely agree that the “the pandemic is not over until it is over everywhere.” Thus, the Fund proposed global action to increase vaccine production, additional funding for the COVAX initiative to scale up coverage beyond 20% of the global population, and greater logistics support for administering the vaccines.

On the economic side, the Fund reiterated the need for expansion of public spending even by borrowings. Those with limited fiscal space should prioritize health mitigation and cash transfers to the poor. Support can also be extended to small business. The Philippines supported the poor and the vulnerable during the pandemic and helped small business. However, we failed in our pandemic mitigation. Therefore, we also failed in protecting our livelihoods. Today, we continue struggling with surges in new cases and mortalities, and weak business activity.

With a longer-lasting scar, school closures can also threaten the livelihood of a generation of children. This could widen the divergence in growth prospects.

The IMF believes in the primacy of addressing the pandemic first through strategic and quick deployment of multiple vaccines and the orchestrated moves of all sectors to “avert a great divergence in prospects across countries.”

MIT’s Daron Acemoglu of Why Nations Fail fame with James Robinson, raised the need to regulate automation if we wish to reverse the widening inequality.

Acemoglu observed what seems obvious to many. Economic growth in the US and the rest of the industrial world has become much less shared since the 1980s. It has been less inclusive. This phenomenon involves widening inequality, the disappearance of good, high-paying jobs; and the drop in the real wages of those with less education. These factors were behind the pervasive discontent and social protests across the political spectrum. Populism and authoritarianism are fueled by social alienation.

Acemoglu found that automation, among other factors, would explain this phenomenon of less inclusive economic growth. With more advances driven by machine learning and artificial intelligence, automation could increase inequality. The challenge is to properly harness it and direct it through appropriate public policy to contribute to more inclusive growth.

True, automation has been an engine of growth since the Industrial Revolution. Its labor-saving effect has been more than matched by the significant gains in labor productivity and employment opportunities.

However, the pandemic has recently incentivized employers to explore various ways to further intensify machine use and recent evidence confirms this. The evidence also disproves that idea that “new technologies will increase productivity and enrich us, even if they dislocate some workers and disrupt existing businesses and industries.” Industries that are more reliant on these new technologies have not performed better in terms of total factor productivity (TFP), output, or employment growth. Acemoglu claimed that the gains in TFP in the last 20 years of technological leaps and bounds paled in comparison with those after World War II.

Why this irony?

Acemoglu explained that automation has been quite excessive. Businesses automate beyond those levels that reduce production costs. Social costs actually increase because jobs are lost and labor wages decline. Productivity growth is also weak because the singular focus on automation technologies may lead businesses “to miss out on productivity gains from new tasks, new organizational forms, and technological breakthroughs that are more complementary to humans.”

This disconnect between technology use and productivity gains may not be true as yet in the Philippines but with globalization and business process outsourcing, spillovers may not be too far behind. We need to keep a good balance between automation and human creativity especially during this pandemic.

We share Acemoglu’s assertion that the path of future technology centered on automation is not “preordained.” The choice made in the past should be rectified to direct the technology of automation to boost productivity rather than simply to save on labor.

Acemoglu’s recommendation might surprise many. He would like the government to provide incentives that would shift the composition of innovation from undue focus on automation to more human-friendly technologies. Government is not expected to block or discourage technological progress but to keep the mantra of business to provide job opportunities and allow for a more inclusive growth.

This can be done in education and healthcare to better equip their constituencies through AI and machine learning. In manufacturing, the so-called augmented reality and computer vision could enhance labor productivity.

Indeed, Zoom and digital payments have multiplied people’s coping capability during the pandemic and therefore technological innovations should continue with the same thrust of helping people. People can be retooled and technology should be able to create new opportunities by pointing the way.

This is not to make governments authoritarian. Acemoglu suggested the same direction that was followed in the discovery and development of antibiotics, sensors, and the internet. Without public intervention, these game-changing innovations would not have been possible.

The biggest challenge in harnessing technology is its potential impact on democracy.

With fake news and misinformation easily transmitted globally, AI-powered social media could also undermine democratic discourse.

Therefore, digitalization technology can only promote inclusiveness if it has public value. Of relevance here is the article on the need for public goods to support private innovation written by Bank for International Settlements (BIS) staff Jon Frost, Leonardo Gambacorta, and our friend Hyun Song Shin, economic adviser and head of research.

The BIS zeroed in on digital technology transforming the financial industry in payments, savings, borrowing and investment on digital platforms. Fintech and Bigtech companies, according to the BIS, now compete with banks and other financial market players in a wide spectrum of financial services.

While progress in this area has been impressive, as 1.2 billion adults gained access to financial accounts between 2011 and 2017, BIS argued that for digital technology to further bolster financial inclusion, public goods are critical. “Public goods provide the underpinnings of financial inclusion.”

The pandemic imposed social distancing and economic lockdowns and since then, digital payments have become the lifeline of many people — selling and buying goods, depositing and transferring money without contact.

Related to this, the BIS raised a most fundamental point that has been sadly missed by many proponents of financial inclusion. Digital technologies cannot succeed on their own. They need enablers: mobile phones, internet, storage and processing of large volumes of digital data, and other infrastructure like cloud computing, machine learning, distributed ledger technology, and biometric technologies.

Because digital technology is scalable and can improve risk assessment based on the same by-product of data, numerous services and functionalities have been opened by digital technology. Lending without collateral may now be possible. Bigtech companies hold a great amount of credit information about the potential borrower. But Bigtech companies have become too big to fail.

BIS proposed five policies to leverage on the benefits of digital technology while safeguarding financial stability and consumer rights. One, open, inclusive digital infrastructures should be built. Two, common standards should be introduced to encourage competition. Three, competition policies should be updated. Four, data privacy should be strengthened. And finally, policymakers like central banks, regulatory, competition and privacy authorities should get and work together.

This is the other side of the pandemic. It has spawned innovation that unless tamed, could in fact exacerbate poverty and inequality.

 

Diwa C. Guinigundo is the former Deputy Governor for the Monetary and Economics Sector, the Bangko Sentral ng Pilipinas (BSP). He served the BSP for 41 years. In 2001-2003, he was Alternate Executive Director at the International Monetary Fund in Washington, DC. He is the senior pastor of the Fullness of Christ International Ministries in Mandaluyong.

Vaccine vacuity

One year and six days ago, on March 13, 2020, after several weeks during which the growing number of COVID-19 cases had forced other countries to bar visitors from likely sources of the novel coronavirus such as China, the Duterte administration finally imposed what turned out to be the longest-running lockdown in the world. This was after the Secretary of Health resisted a ban on Chinese visitors (“why single them out?”), and government spokespersons had minimized the threat.

As usual, President Rodrigo Duterte put the former military men in his administration in charge as the number of cases multiplied despite the lockdown and ban on visitors from other COVID-afflicted countries. The police and military arrested people without face masks, erected checkpoints, deployed heavily armed soldiers at key points in cities and countryside, and used other coercive means against the populace with little effect on curbing the rapid increase in the number of cases. They quite probably even helped spread the disease in the country’s prisons by cramming in them those they were arresting for violations of health protocols. Meanwhile, the “pastillas” racket at the Bureau of Immigration, which for P10,000 each allowed tourists and POGO (Philippine Offshore Gaming Operators) workers from China to enter the country, undermined the effectivity of the ban on visitors and very likely helped boost the number of the infected. The usual corruption and indifference to the public welfare that afflict much of the bureaucracy were still at work, and at the expense of the health and lives of the populace.

As the number of cases surged enough to put the Philippines ahead of other countries in Southeast Asia; as millions of workers lost their jobs; as schools and businesses ceased operations and even closed permanently; and as the economy spiraled into a recession, apparently at a loss over what to do, Mr. Duterte on a number of occasions declared that only a vaccine could stop the pandemic.

Vaccines have since been developed in Russia, China, the United States, Belgium, the United Kingdom, and India. But the country that for two months last year led all other ASEAN countries in the number of COVID-19 cases is now the last to get, and, in an agonizingly slow process, to administer them.

Without citizens’ being inoculated fast enough and in sufficient numbers, there might as well be no vaccine at all. The Duterte regime has offered all sorts of excuses for the inexcusable delay, with some of its officials blaming the pharmaceutical firms for it. But as the British publication The Economist noted in a Feb. 10 article that was quoted by Philippine media, “Few countries have handled vaccine procurement as shambolically (in as disorganized a manner) as the Philippines.” Translation: government has only itself to blame.

The Department of Health in fact hemmed and hawed for months before it concluded a procurement agreement with Pfizer, a US pharmaceutical firm, apparently because the Duterte regime, rather than welcoming vaccines from whatever source so long as they’re safe and effective, preferred vaccines from China. As early as during his State of the Nation Address in July last year, Mr. Duterte begged President Xi Jinping for the Chinese government, once its laboratories develop a vaccine, to make it immediately available to the Philippines on credit.

China instead donated to the Philippines 600,000 doses of the Sinovac vaccine one of its drug firms has developed. The shipment arrived via a Chinese air force plane on Feb. 28, 2021 amid great media fanfare, and voluminous praise for the Chinese government from Philippine officials led by Mr. Duterte himself. It has since been distributed to health workers and some local governments despite initially widespread resistance, which was generally interpreted as due to the antipathy to vaccinations generated by the exaggerated and politicized accounts in 2018 of the supposedly dangerous reactions of some children to the anti-dengue Dengvaxia vaccine.

But it wasn’t so much resistance to vaccinations per se but fears of a particular vaccine’s side effects and awareness of its limited efficacy that were driving health workers’ and other sectors’ hesitation in having themselves inoculated. The reluctance of a majority of the population was due to Sinovac’s reported 50.4% efficacy and its possible side effects to which the news media referred when they reported that some of those inoculated with it had suffered “adverse reactions” — without saying, however, exactly what those side effects were.

Neither did Mr. Duterte’s breaking his earlier promise that he would be the first to be inoculated help generate public confidence in Sinovac.

Nevertheless, health workers and some government employees eventually agreed to be inoculated with Sinovac since, despite assurances from Duterte “vaccine czar” retired General Carlito Galvez, Jr. that Pfizer and AstraZeneca vaccines would arrive mid-February, by March 1 it was still the only one available.

Some 400,000 plus doses of AstraZeneca did arrive on March 4, but, together with the Sinovac doses, added up to only a little over a million shots, or far, far less than what are needed — 70 million — to achieve herd immunity for the country’s over 100 million population. Not a single Pfizer dose has so far found its way to the Philippines as of March 17. But even if there were enough shots available, at the inoculation rate of 20,000 per day that the Department of Health claims, it will take a decade to meet the 70 million target.

In the midst of the chaos and contradictions in official statements and spur-of-the-moment policies, and despite the arrival of the vaccines, came the resurgence of Philippine COVID-19 cases this month to September 2020 levels at the rate of 3,000 to 4,000 new infections a day, with some experts predicting they could go up to 5,000 to 8,000 daily by the end of March. As usual, government spokespersons are blaming the surge on the citizens, whom they say are in violation of health protocols. But it was the National Government itself that in its less than well-thought-out decision to hasten the recovery of the economy allowed the reopening of cinemas and relaxed the requirements for domestic travel and international tourism despite the objections of local government executives.

The COVID-19 pandemic could not have come to the Philippines at a worse time. It has tested the mettle of leaders and governments across the planet, some of which have proven themselves equal to the tasks of combating the contagion and keeping its impact on the economy and their citizens at a manageable level. But the mess the Philippines is in has only exposed not just the inadequacies of its healthcare system, but also the weaknesses of its State institutions and the intellectual and moral limitations of the bureaucrats who constitute what passes for its leadership.

Those limitations explain why the Philippine power elite is unable to even plan ahead, or to transcend such of its ideological biases as its reliance on the goodwill and approval of a foreign power while risking the displeasure of another despite the obvious imperative during these perilous times to, in the words of the late statesman and Senator Claro M. Recto, “make no enemies where (the Philippines) can make no friends.” The veritable vacuity of the vaccination program has its counterpart in, and is due to, the competency vacuum in government and its indifference to the health, the well-being, and the very lives of the millions it is supposed to serve.

 

Luis V. Teodoro is on Facebook and Twitter (@luisteodoro).

www.luisteodoro.com

How job-killing technologies liberated women

AS THE MANY MOTHERS who’ve left their jobs to cope with pandemic remote schooling can testify, “free” household labor isn’t really free. It always entails the opportunity cost of what you could otherwise be doing.

But women’s domestic tasks get short shrift in the history of labor-saving technology because historically much of that work received no direct monetary compensation. “We are all familiar with our grandmothers’ adage, ‘A woman’s time is nothing,’” wrote an essayist in 1870, lamenting how little inventive effort was going toward easing women’s domestic burdens. Whether by unpaid housewives or poorly paid servants, the work still had to be done.

March is Women’s History Month, a good time to remember that the history of women’s work sheds light on the broader questions raised by labor-saving technologies, past and present. Viewed through the lens of women’s experiences, inventions often derided as job-killers look like “Engines of Liberation,” the title of an influential 2005 article by economists Jeremy Greenwood, Anath Seshadri and Mehmet Yorukoglu.

By making women more productive and opening new demands for their services, labor-saving technologies gave them greater control over their time, more freedom to choose their occupations and the earning power to shape their own lives — all while propelling economic changes that boosted the overall standard of living.

Consider a few examples:

THE WATER-POWERED GRIST MILL
This technology for grinding grain spread through Europe in the Middle Ages, revolutionizing how women spent their time. To digest cereal grains like wheat, humans first have to remove their husks and turn them into flour. That means many hours of pounding and grinding. As late as the 1990s, women in rural Mexico were still using these traditional methods to produce masa, the corn flour in tortillas. Food historian Rachel Laudan estimates that it takes about five hours of grinding to produce enough masa to supply a family of six with a day’s tortillas.

Grist mills opened up women’s time for other tasks, most prominently spinning. Less arduous than grinding grain, it was no less necessary or time-consuming. A Medieval woman using a spinning wheel would have spent about 110 hours spinning enough wool for a pair of trousers.

By freeing women to produce more yarn, historian Constance H. Berman argues, grist mills enabled the wool-based trade that set off the commercial revolution of the late Middle Ages, leading to new financial institutions and the rise of prosperous new centers like Antwerp, London, and Florence. “It is possible that without this change in women’s work,” she writes, “such industry would not have taken off as it did.”   

SPINNING MILLS
Spinning remained the bottleneck in textile production. “The spinners never stand still for want of work; they always have it if they please; but weavers are sometimes idle for want of yarn,” wrote the agronomist and travel author Arthur Young, who toured northern England in 1768. Supplying a single weaver, he noted, took at least 20 spinners.

In a workforce of 4 million Britons, economic historian Craig Muldrew estimates, well over a million women were working as spinners. Their labor was the biggest expense in cloth production other than raw fiber, often totaling more than twice the cost of weaving. Yet spinners’ wages were pitiful, for the simple reason that it took so many hours to produce a useful amount of yarn. The spinning machines that set off the Industrial Revolution in the late 1700s changed that calculus. Suddenly yarn that once required days to spin could be had in hours, or even minutes.

Before the Civil War, the “mill girls” of New England found new independence in the region’s textile plants. Although the work was grueling, the mills gave young women their own incomes and a chance to broaden their horizons. “There are girls here for every reason, and for no reason at all,” one wrote in an 1844 edition of the Lowell Offering, a magazine published by female mill workers. Many were drawn by the opportunity to buy their own clothes. By making “pretty gowns and collars and ribbons” affordable, the textile revolution created a powerful enticement to cash employment.

Even when wages and working conditions worsened, mill work gave women new forms of autonomy, including the role of labor leaders. The work offered women a public identity, beyond hearth and home.

ROTARY PRESSES
That mill girls could publish their own literary magazine testifies to another invention rarely noted as a liberator of women: the steam-powered rotary printing press. Invented in the 1840s, it increased printing speeds tenfold, a pace soon doubled by an invention allowing machines to print both sides of the paper simultaneously. By lowering the cost of high-volume printing, the new technology vastly expanded the market for books, magazines and newspapers — and the writers to fill them.

Fiction writers like the Brontë sisters and Louisa May Alcott, as well as many now-forgotten popular authors, could now make an independent living. With Jane Eyre, Charlotte Brontë earned 25 times her salary in the hated job of governess. Alcott ground out “blood and thunder tales” for magazines and wrote Little Women for the money.

“Newspaper girls” filled the columns of the mass-market press. Touting their own lifestyle in articles, they created a new model of “the bachelor girl,” a single professional woman distinct from the sad stereotype of the old maid. “These women are for the most part our best modern type, educated, energetic, independent, enterprising,” declared the New York Press in 1894.

Some female journalists offered womanly advice or chronicled the social whirl, while others pursued investigative reporting. In her Memphis newspaper, Ida B. Wells exposed lynching in the South. New York World reporter Nellie Bly went undercover in a mental hospital. Elizabeth L. Banks labored in sweatshops on the Lower East Side and lived on $3 a week, “telling each day in the paper just what I had to eat, and describing all my comforts and discomforts.” In London, she hired out as a maid and worked in a laundry.

THE SEWING MACHINE
It was widely recognized as the exception to 19th century inventors’ indifference to the value of women’s time. “It is the only invention that can be claimed chiefly for woman’s benefit,” declared the New York Times in 1860. A sewing machine bought on time could clothe a family or set up a business.

Working with a hand needle, a good seamstress took about 14 hours to make a shirt. With a sewing machine, she could do the same job in an hour. It was an early example of “the robots are taking our jobs.” In an 1888 essay titled “Labor-Saving Machines as an Evil,” the Ohio journalist Samuel Rockwell Reed used the sewing machine as a prime example, singling it out for “enhancing the hard fate of women” by putting hand-sewers out of work. A single machine, he calculated, “deprives 25 children and five widows of bread.”

The claim was actually satirical. Human history, Reed pointed out, is a progression of such inventions. The steel needle replaced the bone needle, with which “three or four wives might be sufficiently employed in making up one man’s rude garments, whereas such facility was given to this by the invention of the steel needle that he hardly had a need of one wife.”

Instead of impoverishing widows and orphans, the sewing machine made seamstresses more productive, giving rise to a large ready-to-wear industry. Although we now remember it mostly for its sweatshops and the labor activism they sparked, it offered generations of mostly female workers, from the Lower East Side to Vietnam, the first step out of poverty.

THE WASHING MACHINE
Elizabeth Banks’s stint wading through soapy water points to another liberating invention: the electricity-powered washing machine. Before its arrival, laundry was such a laborious task that even poorly paid shop girls hired someone else to do it. Just reading the list of “equipment for a home laundry” in a 1900 laundry manual is exhausting.

In Engines of Liberation, Greenwood, Seshadri, and Yorukoglu cite a study of farm wives that found that doing a 38-pound load of laundry by hand required four hours, with another four or five for ironing. Using electrical appliances, the washing took just 41 minutes and the ironing an hour and 45 minutes. The number of steps walked in the process was cut almost 90%. “No man worth his salt would spend a seventh of his time at a tub,” declared journalist Allan L. Benson in a 1912 Good Housekeeping article.

“Power laundry machinery is not so expen-sive that people in ordinary circumstances cannot afford to buy it, whereas washing by hand is so hard that no woman should do it,” Benson wrote. “It makes no difference who the woman is, whether she is a housewife or a servant, washing is too hard for her. In the winter, it invites pneumonia. At all times of the year, it is drudgery.”

SYNTHETIC FIBERS
A 19th century laundress would have envied her 1940s counterpart, but even by the mid-20th century, washing, drying and ironing still took plenty of time and attention. The invention of nylon in 1934 set off a materials revolution — the advent of synthetic fibers and plastics — and further eased the laundry burden.

Synthetic fibers fostered a fundamental fashion shift that continues to today’s pandemic yoga pants. “More than looks,” writes business historian Regina Lee Blaszczyk, “the characteristic that I call ‘high performance’ distinguished the panoply of postwar products from their early-20th century predecessors…. Curtains that could be drip dried, uniforms that never needed ironing, and sweaters that could be washed without shrinking reduced domestic burdens.” When large numbers of American women entered the workforce in the 1970s, they did so wearing easy-care polyester pantsuits.

Over the succeeding decades, synthetic fabrics got better — softer, more breathable, less likely to snag and pill, more varied in look and feel. Today’s women — and men — are free to use their time in more productive and fulfilling ways.

Looking back on the endless labors of our foremothers reminds us that it’s easy to create jobs by making work harder and slower. But you create wealth — and freedom — by making it faster and easier. The next time you throw a detergent pod into a load of clothes and go off to work on your laptop, consider all the could-be washerwomen now doing something else.

BLOOMBERG OPINION

No excuse for judicial activism

An interesting point that made the news recently is whether members of the judiciary can resort to “judicial activism,” that is, to issue rulings effecting a judge’s policy preferences rather than decide based on what the law actually says, under the excuse that no law is applicable or the that applicable law is “vague” or “ambiguous.”

The short answer is “no.”

The reason again has to do with the separation of powers doctrine which underlies the fundamental structure of our Constitution. As has been repeatedly pointed out here (most recently in “Enough with the penumbra’s! Let the enduring Constitution prevail,” 2019), contrary to what many learn in law school, the people’s best protection against tyranny is not the Bill of Rights but rather our constitutional structure of separate and equal branches: “A bill of rights has value only if the other part of the constitution — the part that really ‘constitutes’ the organs of government — establishes a structure that is likely to preserve, against the ineradicable human lust for power, the liberties that the bill of rights expresses. If the people value those liberties, the proper constitutional structure will likely result in their preservation even in the absence of a bill of rights; and where that structure does not exist, the mere recitation of the liberties will certainly not preserve them.” (Scalia).

Judicial activism, usually under the theory of a “living constitution,” upends this crucial structure, allowing activist (and unelected) judges to impose their will beyond the Constitution and effectively establish a “judicial oligarchy.”

The “living constitution” theory thrives on the idea that the words of the fundamental law can “evolve,” it not being “static,” and is supposed to “keep up with the times.” And this had always been partnered with the idea that the venerable Supreme Court is the final defender of the Constitution.

This notion, however, popular as it may be, is utterly not grounded in any actual constitutional provision. It is, in essence, a good example of the Mandela effect, alongside the quite undemocratic idea that the Constitution (or any law for that matter) is “what the Supreme Court says it to be.”

Doubtless, jurists can wax poetic in saying the Constitution should “grow,” it being a “living organism,” and that it must be “broad” and “flexible,” a “dynamic document,” as the drafters could not possibly anticipate everything about the future. However, the inherent problem with the “living constitution” theory is that it provides cover (usually exploited by leftist progressives) to deviously circumvent the will of the People, pushing an ideological agenda through the academe and the courts what activists can’t successfully do through democratic elections.

So, certainly, the living constitution theory has its flaws. Being prone to the vagaries of changing public opinion or the evolving standards of society, it ultimately encourages social instability and allows power or mob politics to dictate what the law should be rather than the law being directed by carefully thought out reason, as well as objective standards of right and wrong.

As former US Supreme Court Chief Justice William Rehnquist puts it (in his The Notion of a Living Constitution), the nature of political value judgments in democratic societies is therefore ignored whenever the living constitution theory is used: “Beyond the Constitution and the laws in our society, there simply is no basis other than the individual conscience of the citizen that may serve as a platform for the launching of moral judgments. There is no conceivable way in which I can logically demonstrate to you that the judgments of my conscience are superior to the judgments of your conscience, and vice versa. Many of us necessarily feel strongly and deeply about our own moral judgments, but they remain only personal moral judgments until in some way given the sanction of law.”

Accordingly, then, how should a member of the judiciary approach a constitutional case, even when faced with ambiguous or vague provisions? The following, by dint of historical experience, common sense, and constitutional logic are suggested:

• Use the evident meaning of the words according to the vocabulary of the times, particularly those relevant to the drafting and ratification of the Constitution;

• Read a provision within the context of the entire Constitution;

• The meaning of the words should be used in the context of the contemporaneous social, economic, and political events;

• Only afterwards may reference may be made to the meaning the Constitutional Commission members used for such words in their submissions and pronouncements, as well as the elucidation of the meanings by debate within the Constitutional Commission;

• Commentary made after the ratification by legal experts or academics.

The foregoing list is partial and is illustrative of the fact that there are ultimately many interpretative tools, presently strengthened by technological developments, that are available to and enable a judge to decide within the ambit of the law rather than impose her or his own beliefs.

 

Jemy Gatdula is a Senior Fellow of the Philippine Council for Foreign Relations and a Philippine Judicial Academy law lecturer for constitutional philosophy and jurisprudence.

https://www.facebook.com/jigatdula/

Twitter @jemygatdula

For Asian-Americans, Atlanta shooting sows fresh fear

ATLANTA — Before the COVID-19 pandemic began last year, Kyung Cho noticed people sometimes gave him odd looks or asked if he spoke English.

These days, Mr. Cho said, attitudes toward Asian-Americans like him have become far more hostile.

“It’s gotten worse,” the 50-year-old handyman said as he shopped at an Asian grocery store in an Atlanta suburb on Wednesday. “The other day I was in a parking lot and some kid shouted for me to go back to China. I’m from Korea.”

Across the United States, many Asian-Americans reeled at the news of a shooting spree at three spas in and around Atlanta on Tuesday night that left eight people dead, including six Asian women. Authorities said the 21-year-old white male suspect told them he had a sex addiction and that the attacks may not have had a racial motivation.

But after a year in which reports of hate crimes against Asian Americans have skyrocketed, the shooting sparked fresh outrage, fear and demands for a government response.

“We’re besieged,” said Russell Jeung, a professor of Asian American Studies at San Francisco State University and a founder of Stop AAPI Hate, a coalition that has tracked anti-Asian violence during the pandemic. “The overall community is traumatized.”

In a report released on Tuesday before the shooting, the coalition said it received 3,795 reports of hate incidents between Mar. 2020 and Feb. 2021. The majority of the discrimination consisted of verbal harassment and shunning, with women reporting incidents about two times more often then men.

A study published earlier this month by the Center for the Study of Hate and Extremism, a nonpartisan research center, showed that reported hate crimes against Asian Americans in 16 major US cities rose by 149% from 2019 to 2020, while overall hate crimes dropped 7% in the same time period.

Advocates for the community say the surge is largely the result of Asian Americans being blamed for the coronavirus, which was first identified in Wuhan, China in late 2019. Former US President Donald Trump repeatedly referred to COVID-19 as the “China Virus” and “kung flu,” rhetoric seen by some as inflaming anti-Asian sentiment.

A Reuters/Ipsos poll of 4,430 Americans, conducted from Feb. 18-24, showed that 37% believed that COVID-19 was created in a lab in China, including 24% of Democrats and 54% of Republicans. Researchers are still trying to identify the origins of the virus, but there is no credible evidence to suggest it was accidentally released from a Chinese lab.

Lily Huynh, 24, said she was upset by the deaths of the women in Georgia.

She said she has increasingly worried that her mother, an immigrant from Vietnam who owns a nail salon in Mesquite, Texas, might be targeted due to her heavy accent and nationality.

“You think about these women, and you recognize your own mother could have been them,” Ms. Huynh said.

Asian-American leaders on Wednesday called for government officials to do more to protect and support their communities, and the hashtag #StopAsianHate circulated widely on social media. A US House of Representatives committee planned a hearing for Thursday to address the issue.

“Asian Americans are afraid to leave their homes, and not just because of disease. They’re afraid to leave their homes because there’s a real risk, just walking down the street minding your own business, that you’ll be blamed for a global pandemic and that people will come after you,” said Frank Wu, the president of Queens College, City University of New York, who studies anti-Asian discrimination in the United States.

Almost half of the anti-Asian hate incidents recorded by Stop AAPI Hate occurred in California, where Asian Americans make up some 15% of the population.

Ronald Lisam, a 45-year-old Chinese-American who was grocery shopping in San Francisco’s Chinatown on Wednesday, said he has started to question his safety in public.

“Every day I’m worried about being attacked, robbed, assaulted,” he said. — Reuters

COVID-19 reinfection rare, but more common in older people

LONDON — The majority of people who have had coronavirus disease 2019 (COVID-19) are protected from getting it again for at least six months, a study published on Wednesday showed, but older people are more prone to reinfection than younger people.

The study, appearing in the Lancet medical journal, found that just 0.65% of patients tested positive a second time for COVID-19 after previously being infected during Denmark’s first and second waves. That was much lower than the 3.27% who were positive for the virus using highly accurate PCR tests after initially being negative.

However, the study found that people over the age of 65 had only 47% protection against repeat infection, compared to 80% protection for younger people.

“Our study confirms what a number of others appeared to suggest: reinfection with COVID-19 is rare in younger, healthy people, but the elderly are at greater risk of catching it again,” said Steen Ethelberg of Denmark’s Statens Serum Institut.

“Since older people are also more likely to experience severe disease symptoms, and sadly die, our findings make clear how important it is to implement policies to protect the elderly during the pandemic.”

The authors of the study found no evidence that protection against reinfection declined over a six month follow-up period, but said further studies were needed to assess protection against reinfection from variants of the coronavirus.

The data analyzed was collected through Denmark’s national testing strategy, under which 69% of the population, or 4 million people, were tested over the course of 2020.

Commenting on the results, Imperial College London professors Rosemary Boyton and Danny Altmann, said the results showed lower protection and were “more concerning” than previous studies.

“These data are all confirmation, if it were needed, that for SARS-CoV-2 the hope of protective immunity through natural infections might not be within our reach and a global vaccination programme with high efficacy vaccines is the enduring solution,” they said in a linked comment piece also published in the Lancet. — Reuters

Powell holds dovish line as Fed signals zero rates through 2023

FEDERAL RESERVE Chair Jerome Powell and his colleagues continued to project near-zero interest rates at least through 2023 despite upgrading their US economic outlook and the mounting inflation worries in financial markets.

The decision, which came on a volatile day for investors with Treasury yields surging ahead of the announcement, masked a growing number of officials who saw liftoff before then — though Mr. Powell stressed this remains a minority view.

“The strong bulk of the committee is not showing a rate increase during this forecast period,” Mr. Powell told a virtual press conference Wednesday following a meeting of the Federal Open Market Committee (FOMC), adding that the time to talk about reducing the central bank’s asset purchases was “not yet.”

Seven of 18 officials predicted higher rates by the end of 2023 compared with five of 17 at the December gathering, showing a slightly larger group who see an earlier start than peers to the withdrawal of ultra-easy monetary policy, according to fresh quarterly Fed projections.

“Indicators of economic activity and employment have turned up recently, although the sectors most adversely affected by the pandemic remain weak,” the FOMC said in its policy statement. “Inflation continues to run below 2%.”

The Fed expects that a bump in inflation this year will be short-lived. Officials saw their preferred measure of price pressures slowing to 2% next year following a spike to 2.4% in 2021, according to the projections. Excluding food and energy, inflation is forecast to hit 2.2% this year and fall to 2% in 2022.

Ten-year Treasury yields reversed their earlier rise as Powell spoke and US stocks closed higher.

Asked about the recent move up in yields, Mr. Powell pushed back against the idea the Fed should lean against the market, noting that the current stance of Fed policy, including its asset purchase program, was appropriate.

Massive fiscal support and widening vaccinations that will help reopen the economy have buoyed investor expectations for rate increases and inflation, propelling Treasury yields higher as the central bank and federal government keep adding stimulus.

The target range of the benchmark federal funds rate was kept at zero to 0.25%, where it’s been since last March. Wednesday’s FOMC decision was unanimous.

US central bankers left asset purchases unchanged at $120 billion a month and repeated that this pace would be maintained until “substantial further progress” is made on their employment and inflation goals. Mr. Powell told reporters that the Fed would signal well in advance when that threshold was on track to being achieved.

Mr. Powell and his colleagues met as the economy continues to improve. Job gains picked up last month and President Joseph R. Biden signed an additional $1.9 trillion of pandemic aid into law on Mar. 11. Vaccinations continue apace, allowing states to start easing lockdown restrictions that could release a torrent of consumer spending. 

The economy remains far from the Fed’s goals, though. Even with 379,000 jobs added to payrolls in February, 9.5 million fewer Americans have jobs compared with a year ago and inflation remains well below the Fed’s 2% target.

“This particular downturn was a direct hit on the part of the economy that employs many minorities,” Mr. Powell said.

Still, prospects for stronger growth have ignited some concern about higher inflation, contributing to a rise in 10-year Treasury yields in recent weeks. Mr. Powell told lawmakers in testimony last month that the economy still has a long way to go before there’s any risk of overheating.

They also upgraded forecasts for economic growth and the labor market, with the median estimate for unemployment falling to 4.5% at the end of 2021 and 3.5% in 2023, while gross domestic product was seen expanding 6.5% this year, up from a prior projection of 4.2%.

Christopher Waller, who joined the Board of Governors in late December, contributed projections for the first time this month. — Bloomberg

Gambler who bet millions on AirAsia wants everyone to notice

WHEN Stanley Choi became one of AirAsia Group Bhd.’s biggest shareholders a month ago, he did so with no intention to pursue the aggressive tactics favored by activists in Europe and the US Instead, he saw an opportunity to create a buzz.

Mr. Choi, a poker-playing Hong Kong financier, boosted his stake in the Malaysian budget carrier to almost 9% on Feb. 18 in a private placement at a cost of about $27 million. He hadn’t previously been looking to invest in the travel industry.

“If I bet on Boeing or American Airlines, I probably wouldn’t be seen in any media,” 51-year old Mr. Choi said in an interview in his penthouse office in Hong Kong. “With this kind of size, no big airline would pay any attention.”

The shares have surged more than 50% since his stake purchase was made public.

Mr. Choi said he went into the investment without an exit strategy or an ideal return rate, and has yet to meet the two founders Tony Fernandes and Kamarudin Meranun in person. He bought the shares about seven months after the firm’s auditor Ernst & Young said the carrier’s ability to continue as a going concern may be in “significant doubt.” The statement triggered an 18% plunge in AirAsia’s shares on the day.

“If it can survive, its stock price should be much higher than where it is now,” said Mr. Choi, who is chairman and founder of local brokerage Head & Shoulders Financial Group. “If it cannot survive, the rest of the aviation companies won’t be able to survive either. AirAsia will be one of the last groups to fall.”

Like most airlines around the world, AirAsia has been hit hard by the coronavirus pandemic and its devastating impact on travel. The company’s Japanese unit filed for bankruptcy in November and a month later it sold its stake in AirAsia India Ltd. to local partner Tata Sons Ltd. Long-haul unit AirAsia-X, meanwhile, is undergoing debt restructuring and has been essentially grounded by the virus.

Mr. Choi is used to playing the odds. He won more than HK$50 million ($6.4 million) as first prize in a super high-roller poker championship in Macau in 2012. A framed photo of him holding the outsized check sits on a side-table in his office in Hong Kong’s Central district.

While he was initially skeptical of the investment in AirAsia, which he came across via “some common friends” in Malaysia, he said he is confident in the ability of Fernandes and Kamarudin as “world-class entrepreneurs” to lead the airline out of its difficulties.

“As long as they keep running and keep creating value for their passengers and clients, the market will reward us,” Mr. Choi said. “The aviation industry has bottomed out.”

A second private share placement saw billionaire David Bonderman and several partners of TPG Capital, the private equity firm he co-founded, emerge as shareholders, along with Aimia, Inc., AirAsia said in a statement Wednesday. Mr. Choi didn’t take part.

Mr. Choi hasn’t always made the right call. In 2018, International Entertainment Corp. — a company he controls — bought Wigan Athletic, a UK soccer team, before selling it to fellow Hongkonger Au Yeung Wai Kay last year. Just weeks later, Mr. Au Yeung put the club into administration, generating a stir in British media.

“It was a mistake, not a good decision to buy for sure,” Mr. Choi said.

Mr. Choi now has a way to deal with misfortunes. He had the phrase “let it be” tattooed on the inside of his left forearm in cursive script in December, which he looks at to calm himself in times of trouble.

“My poker master told me that you shouldn’t get mad because of the result,” Mr. Choi said, the scent from a recently smoked cigar lingering in his office. “You only get mad because the way you play didn’t fit yourself.” — Bloomberg