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    For Turkey, Erdogan Victory Brings More Risky Economic Policy

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    The Turkish lira has hit a new low, and analysts see few improvements ahead as re-elected President Erdogan pursues unconventional economic policies.Since winning re-election, President Recep Tayyip Erdogan of Turkey has publicly doubled down on his idiosyncratic economic policies.“If anyone can do this, I can do it,” he declared in a victory speech last Sunday, referring to his ability to solve the country’s calamitous economic problems.His brash confidence is not widely shared by most analysts and economists.The Turkish lira dropped to a record low against the dollar this week, and foreign investors have been disheartened by the president’s refusal to stray from what is widely considered to be an eccentric economic course.Instead of combating dizzying inflation by raising interest rates and making borrowing more expensive — as most economists recommend — Mr. Erdogan has repeatedly lowered rates. He argues that cheap credit will boost manufacturing and exports.But his strategy is also fueling inflation, now running at an annual rate of 44 percent, and eroding the value of the Turkish lira. Attempts by the government to prop up the faltering currency have drained the dwindling pool of foreign reserves.As the lira’s value drops, the price of imported goods — like medicine, energy, fertilizer and automobile parts — rises, making it more expensive for consumers to afford daily costs. And it raises the size of debt payments for businesses and households that have borrowed money from foreign lenders.The national budget is also coming under increasing strains. The destructive earthquakes in February that ripped up swaths of southern Turkey are estimated to have caused more than a billion dollars in damage, roughly 9 percent of the country’s annual economic output.At the same time, Mr. Erdogan went on a pre-election spending spree to attract voters, increasing salaries for public sector workers and payouts for retirees and offering households a month of free natural gas. The expenditures pushed up growth, but economists fear that such outlays will feed inflation.President Erdogan in Istanbul last month. Foreign investors have been disheartened by his refusal to stray from what is widely considered to be an eccentric economic course.Sergey Ponomarev for The New York TimesAn effort to encourage Turks to keep their savings in lira by guaranteeing their balances against currency depreciations further adds to the government’s potential liabilities.Critics of the president’s economic approach were somewhat heartened by reports that Mr. Erdogan is expected this weekend to appoint Mehmet Simsek, a former finance minister and deputy prime minister, to the cabinet. Mr. Simsek is well thought of in financial circles and has previously supported a tighter monetary policy.“What Turkey really needs now is more exports and more foreign direct investment, and for that you have to send a signal,” said Henri Barkey, an international relations professor at Lehigh University. One signal could be Mr. Simsek’s appointment, he said.Mr. Barkey argues that Mr. Erdogan will have no choice but to make a U-turn on policy by winter, when energy import costs rise and some debt payments are due.Others are more skeptical that Mr. Erdogan will back down from his insistence that high interest rates fuel inflation. Kadri Tastan, a senior fellow at the German Marshall Fund, a public policy think tank based in Brussels, said that regardless of the cabinet’s makeup, he didn’t believe a policy turnaround was imminent.“I’m quite pessimistic about an enormous change, of course,” he said.To deal with the large external deficit and depleted central bank reserves, Mr. Erdogan has been relying on allies like Russia, Qatar and Saudi Arabia to help bolster its reserves by depositing dollars with the central bank or extending payment deadlines and discounts for imported goods like natural gas.In a note to investors this week, Capital Economics wrote that any optimism about a policy shift is likely to be short-lived: “While policymakers like Simsek would probably pursue more restrained fiscal policy than we had envisaged, we doubt Erdogan would give the central bank license to hike policy rates to restore balance to the economy.”Turkey’s more than $900 billion economy makes it the eighth largest in Europe. And Mr. Erdogan’s efforts to position himself as a power broker between Russia and the European allies since the war in Ukraine began has further underscored Turkey’s geopolitical influence.Mr. Erdogan, who has been in power for two decades, built his electoral success on growth-oriented policies that lifted millions of Turks into the middle class. But the pumped-up expansion wasn’t sustainable.As the lira’s value drops, the price of imported goods rises.Sergey Ponomarev for The New York TimesThe borrowing frenzy drove up prices, spurring a cost-of-living crisis. Still, Mr. Erdogan persisted in lowering interest rates and fired central bank chiefs who disagreed with him. The pandemic exacerbated problems by reducing demand for Turkish exports and limiting tourism, a large source of income.Mr. Erdogan is likely to keep up his expansionary policies until the next local elections take place next year. Until then, Hakan Kara, the former chief economist of the Central Bank of Turkey, said the country would probably just “muddle through.”“Turkish authorities will have to make tough decisions after the local elections, as something has to give in eventually,” Mr. Kara said. “Turkey has to either switch back to conventional policies, or further deviate from the free market economy where the central authority manages the economy through micro-control measures.”“In either case,” he added, “the adjustment is likely to be painful.” More

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    Inflation Plagues Democrats in Polling. Will It Crush Them at the Ballot Box?

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    Americans are extremely attuned to the cost of living, and as midterm election voters head to the polls, they are divided over whom to blame.Inflation has roared back onto the scene as a key issue ahead of the 2022 midterm elections, after five decades during which slow and steady price increases were a political nonissue.It was once a potent driver of politics in America, one that panicked former President Richard M. Nixon and his administration, and later helped to make Jimmy Carter a one-term president. As prices surge, inflation is again taking center stage, and could help decide who controls Congress.Household confidence has plummeted as inflation has climbed, and economic issues have shot to the top of what voters are worried about. A full 49 percent of voters overall said that the economy is an extremely important issue to them in an October Gallup survey, notably outranking abortion, crime and relations with Russia. That’s the highest level of economic concern headed into a midterm election since 2010, when the economy was coming out of the worst downturn since the Great Depression.Inflation is almost certainly the issue pushing the economy to its current prominence. Consumer prices picked up by 8.2 percent in the year through September, far faster than the roughly 2 percent annual gains that were normal in the years leading up to the pandemic. That has left many families feeling like they are falling behind, even as unemployment lingers near a 50-year low, employers hire at a solid clip and job openings abound.The disconnect between the strength of the economy and the way that voters feel about it illustrates why Democrats are barreling into the midterms on the defensive. Elected politicians have a limited role to play in fighting inflation, a job that falls mostly to the Federal Reserve. That has made talking about price increases all the more challenging.Survey data suggest that while voters disagree over whom to blame for today’s rapid price increases, a larger share of independent voters believe that Republicans would be better for the economy and their finances. And irritation over the state of the economy could be enough to prompt some people to vote for change even if the other party doesn’t offer clearly better solutions, according to political scientists. The question is less whether inflation will be a factor driving votes — and more whether it will be a decisive one.“It matters enormously to the election this week,” said Elaine Kamarck, a senior fellow in the Governance Studies program at the Brookings Institution, noting that gas and grocery prices are omnipresent realities for most families. “It is obvious what is happening in inflation every single day: Voters don’t get to forget it.”Across the political spectrum, many Americans are feeling less positive about their personal finances: An AP-NORC Center for Public Affairs Research poll from October found that 36 percent of Democrats now say their finances are in bad shape, up from 28 percent in March. Among Republicans, that number was 53 percent, up from 41 percent. Independents were fairly unchanged, with 53 percent feeling negative.That could be particularly bad for Democrats, because they are often seen as less strong on the economy.Which Party Is Better for the National Economy?Independents and Republicans both tend to rank Republicans ahead of Democrats economically, based on University of Michigan data.

    Note: Survey from September and October 2022.Source: University of MichiganBy The New York TimesNew survey data from the University of Michigan showed that 41 percent of voters felt neither party had an advantage when it came to helping their personal finances. But of those who did think there was a difference, 35 percent thought Republicans would be better — versus 20 percent for Democrats. Consumers also expected Republicans to win in national races.“By and large, respondents expect Republicans to gain control of both the House and the Senate,” Joanne Hsu, director of the University of Michigan’s consumer surveys, wrote in the Nov. 4 release.Which Party Is Better for Your Personal Finances? Republicans and Independents tend to rank Republicans higher on issues of personal finance, though many see no difference.

    Note: Survey from September and October 2022.Source: University of MichiganBy The New York TimesWhether they are right could hinge on whether inflation proves as salient for actual votes as it is in sentiment surveys.Prices may be rising quickly — annoying consumers and occupying their attention — but unemployment is very low, which Ms. Kamarck said might alleviate the angst. Plus, she said, critical groups of voters — most notably women — may focus on other issues including a Supreme Court ruling from earlier this year that overturned Roe v. Wade and ended the constitutional right to abortion.Hally Simpson Wilk, 36, from Broadview Heights, Ohio, is feeling inflation at the grocery store, but she does not think that Republicans would necessarily be better at solving the problem than Democrats. Plus, she said, the abortion ruling had “lit a fire under” her. She expects to vote Democrat.It is hard to guess whether unhappiness over rising prices will drive actual votes in part because there isn’t much recent precedent. While inflation has a history of driving politics in America, it hasn’t been a major issue in 50 years.Back in the 1970s and 1980s, inflation was even faster, touching peaks as high as 12 and 14 percent. Those price increases, and the nation’s response to them, played a big role in driving the national conversation and deciding elections during that era. Mr. Nixon in 1971 instituted wage and price caps to try to temporarily keep prices under control ahead of the 1972 election, for instance.“Inflation robs every American, every one of you,” Mr. Nixon said during his surprise announcement, which included other major economic policy changes. “Homemakers find it harder than ever to balance the family budget. And 80 million American wage earners have been on a treadmill.”.css-1v2n82w{max-width:600px;width:calc(100% – 40px);margin-top:20px;margin-bottom:25px;height:auto;margin-left:auto;margin-right:auto;font-family:nyt-franklin;color:var(–color-content-secondary,#363636);}@media only screen and (max-width:480px){.css-1v2n82w{margin-left:20px;margin-right:20px;}}@media only screen and (min-width:1024px){.css-1v2n82w{width:600px;}}.css-161d8zr{width:40px;margin-bottom:18px;text-align:left;margin-left:0;color:var(–color-content-primary,#121212);border:1px solid var(–color-content-primary,#121212);}@media only screen and (max-width:480px){.css-161d8zr{width:30px;margin-bottom:15px;}}.css-tjtq43{line-height:25px;}@media only screen and (max-width:480px){.css-tjtq43{line-height:24px;}}.css-x1k33h{font-family:nyt-cheltenham;font-size:19px;font-weight:700;line-height:25px;}.css-1hvpcve{font-size:17px;font-weight:300;line-height:25px;}.css-1hvpcve em{font-style:italic;}.css-1hvpcve strong{font-weight:bold;}.css-1hvpcve a{font-weight:500;color:var(–color-content-secondary,#363636);}.css-1c013uz{margin-top:18px;margin-bottom:22px;}@media only screen and (max-width:480px){.css-1c013uz{font-size:14px;margin-top:15px;margin-bottom:20px;}}.css-1c013uz a{color:var(–color-signal-editorial,#326891);-webkit-text-decoration:underline;text-decoration:underline;font-weight:500;font-size:16px;}@media only screen and (max-width:480px){.css-1c013uz a{font-size:13px;}}.css-1c013uz a:hover{-webkit-text-decoration:none;text-decoration:none;}Our needle is back. The needle is an innovative forecasting tool that was created by The Times and debuted in 2016. It is intended to help you understand what the votes tallied so far suggest about possible winners in key contests, before the election is called. Look for one needle on which party will control the House and one on which party will control the Senate.Here’s a deeper dive into how it works.Those wage and price caps may have been politically astute, but research since has showed they just delayed price jumps — they didn’t stop them. When Mr. Carter became president in 1977, inflation was still raging. The Fed wrestled it under control with super-high interest rates that sent unemployment soaring, a campaign that is widely credited with helping to cost Mr. Carter a second term.America’s experience during the 1970s also illustrates a harsh reality: Even if inflation drives the nation’s politics, there is relatively little politicians can do to address it, aside from trying to avoid making the problem worse by stimulating the economy. Taxing and spending policies to offset price increases mostly have comparatively small effects.The country’s main tool for fighting rapid price increases is Fed policy — and that is a painful solution. When the central bank lifts interest rates, it slows economic demand, cools hiring, moderates wage growth and eventually drags prices lower as shoppers pull back and companies find that they can no longer charge more.“There is not an easy fix for inflation — the fix is a recession,” Ms. Kamarck said. For Democrats, “it is very hard to have an economic message.”Economists typically attribute today’s rapid price increases partially to government spending, including a package that Democrats passed in 2021 that helped to fuel consumer demand. But they are also global in nature, tied partly to lingering supply issues amid the pandemic, and food and fuel market disruptions caused by Russia’s invasion of Ukraine.Many voters believe that today’s price increases are not wholly — even principally — the Democratic administration’s fault. But that assessment divides along party lines.About 87 percent of Democrats attribute inflation to factors outside of President Biden’s control, versus 48 percent of independents and 21 percent of Republicans, based on AP-NORC polling data from last month.What Is to Blame for Rapid Inflation?A poll asked voters what was to blame for higher-than usual prices: President Biden’s policies, or factors outside of his control.

    Note: Survey from October 6-10, 2022Source: AP-NORCBy The New York Times People who were already on the fence could have their minds swayed by inflation — especially in places where it is particularly painful. Price increases are reported at a metro level, and some cities in key battleground states are facing particularly rapid price increases: Inflation was at 11.7 percent in Atlanta; 13 percent in Phoenix; and 9 percent in the Seattle metro area as of the latest available data.And even if inflation is hovering near the national average in some places, it is still the fastest pace in decades.Pennsylvania’s Senate race is closely contested, and Christopher Borick, director of the Muhlenberg College Institute of Public Opinion in Allentown, Pa., thinks that rapid price increases could be one factor that is helping the Republican candidate Mehmet Oz run a competitive race despite very low favorability ratings.“We often see in midterm races that if people aren’t happy, a price is paid by the incumbent party,” Mr. Borick said. Inflation “places people in a mood that really does open up the door to alternatives that might not otherwise be acceptable.” More

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    Workers at Trader Joe’s in Brooklyn Reject Union

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    Workers at a Trader Joe’s store in Brooklyn have voted against unionizing, handing a union its first loss at the company after two victories this year.The workers voted 94 to 66 against joining Trader Joe’s United, an independent union that represents employees at stores in Western Massachusetts and Minneapolis. Workers at a Trader Joe’s in Colorado filed for an election this summer but withdrew their petition shortly before a scheduled vote.“We are grateful that our crew members trust us to continue to do the work of listening and responding to their needs, as we always have,” Nakia Rohde, a company spokeswoman, said in a statement after the National Labor Relations Board announced the result on Thursday.The result raises questions about whether the uptick in union activity over the past year, in which unions won elections at several previously nonunion companies like Starbucks, Amazon and Apple, may be slowing.Union supporters recently lost an election at an Amazon warehouse near Albany, N.Y., and the pace of unionization at Starbucks has dropped in recent months, though the union has won elections at over 250 of the company’s 9,000 corporate-owned U.S. stores so far.Workers at a second Apple store recently won an election in Oklahoma City, however, and unions have upcoming votes at a Home Depot in Philadelphia and a studio owned by the video game maker Activision Blizzard in upstate New York.As of June, Trader Joe’s had more than 500 locations and 50,000 employees across the country and was not unionized. Early in the pandemic, the company’s chief executive sent a letter to employees complaining of a “current barrage of union activity that has been directed at Trader Joe’s” and arguing that union supporters “clearly believe that now is a moment when they can create some sort of wedge in our company.”The company has said it is prepared to negotiate contracts at its unionized stores. An employee involved in the union, Maeg Yosef, said the two sides were settling on bargaining dates.Union supporters at the Brooklyn store had said they were seeking an increase in wages, improved health care benefits and paid sick leave as well as changes that would make the company’s disciplinary process more fair.Before union supporters had a chance to talk with all their colleagues, management became aware of the campaign and announced it in a note posted in the store’s break room in late September. The company also fired a prominent union supporter a day or two later.Amy Wilson, a leader of the union campaign in the store, said organizing had become more difficult after the firing and the note from management.“The last core of people hadn’t been spoken to directly by their co-workers, and we lost them instantly,” she said, referring to the note. “It undermined the trust, the relationship. They felt excluded and offended.”Ms. Rohde, the Trader Joe’s spokeswoman, did not respond to a question about why management posted the break room note. She said that while she couldn’t comment on the firing of the union supporter, “we have never and would never fire a crew member for organizing.”Trader Joe’s is known for providing relatively good wages and benefits for the industry, though workers have complained that the company has made its health care and retirement benefits less generous over the past decade. More

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    Lessons From Liz Truss’s Handling of U.K. Inflation

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    The sharp policy U-turn by Liz Truss, Britain’s prime minister, reveals the perils of taking the wrong path in the fight against scalding inflation.Government leaders in the West are struggling with rising inflation, slowing growth, and anxious electorates worried about winter and high energy bills. But Liz Truss, Britain’s prime minister, is the only one who devised an economic plan that unnerved financial markets, drew the ire of global leaders and the public and undermined her political standing.On Friday, battered by savage criticism, she retreated. Ms. Truss fired her top finance official, Kwasi Kwarteng, for creating precisely the package of unfunded tax cuts, billion-dollar spending programs and deregulation that she had asked for.She reinstated a scheduled increase in corporate taxes to 25 percent from 19 percent, a rise she had previously opposed. That announcement came on top of backtracking last week on her proposal to eliminate the top 45 percent income tax on the highest earners. The prime minister, in office a little over five weeks, also promised that spending would grow less rapidly than proposed, although no specifics were offered.The drama is still playing out, and it’s unclear if the Truss government will survive.In the United States, President Biden, while waging his own political battles over gas prices and inflation, has not proposed anything like the kind of policies that Ms. Truss’s government attempted, nor have any other leaders in Europe.Still, for European governments whose economies are suffering greatly from shocks and energy price surges caused by Russia’s war in Ukraine, there are timely lessons from the debacle playing out in London.One of the strongest was delivered early on by the International Monetary Fund: Don’t undermine your own central bankers. The I.M.F., which usually reserves such scoldings for developing nations, on Thursday doubled down on its message. “Don’t prolong the pain,” Kristalina Georgieva, the managing director, admonished.How to blunt the impact of inflation on the most vulnerable without further stoking inflation is the dilemma that every government is confronting.The Bank of England in London has aggressively tried to slow the sharp rise in prices by slowing the British economy.Alberto Pezzali/Associated Press“That is the question of the hour,” said Eswar Prasad, an economist at Cornell University who was attending the annual meetings of the World Bank and I.M.F. in Washington this week.Tension between the fiscal spending policies proposed by a government and the monetary policies controlled by central banks is not unusual. At the moment, though, central bankers are engaged in delicate policy maneuvers in the fight against a level of inflation not seen in decades. With the rate in Britain nearing 10 percent, the Bank of England has moved aggressively to slow down climbing prices through a series of interest rate increases aimed at crimping consumer and business spending.Any expansion of government spending is going to interfere with that aim to some degree, but Ms. Truss’s plan was far too big and too ill defined, Mr. Prasad said.“Measures to help households hit hard by energy increases, by themselves, would not have created that much of a stir,” he said. Many other countries have proposed exactly that. And the European Union has proposed a windfall tax on energy profits to help finance those subsidies.Ms. Truss, instead of coming up with a way to pay for energy assistance, pushed to eliminate a corporate tax increase and cut income taxes for the wealthiest segment of the population. The result was a reduction in government revenue and a ballooning of Britain’s debt.“Overall, the package did not have much clarity in terms of how it would support the economy in the short run without raising inflation,” Mr. Prasad said.By contrast, Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, cited the way governments and central banks worked in tandem when the pandemic struck in 2020 to keep economies from collapsing, issuing vast amounts of public debt.“Central banks printed every single dollar, euro and pound that governments spent” to support households and businesses because of the Covid crisis, Mr. Vistesen said. But now the circumstances have changed, and inflation is setting economies aflame.The actions of the Federal Reserve in the United States illustrate the switch central banks have made: In the harrowing early weeks of the global outbreak of the coronavirus, the Fed embarked on an extraordinary program to stimulate the economy and stabilize markets. This year, the Fed has been swiftly raising interest rates in a bid to slow growth.Both the United States and eurozone countries have somewhat more wiggle room than Britain, because the dollar and the euro are much more widely used around the world as currencies held in reserve than the British pound.Kwasi Kwarteng, Britain’s former chancellor of the Exchequer, left 11 Downing Street after Ms. Truss fired him on Friday.Kirsty Wigglesworth/Associated PressEven so, European governments can help households and businesses get through an energy crisis, Mr. Vistesen said, but they can’t embark on an open-ended spending spree.They also need to take account of what is happening in other economies. The richest countries that make up the Group of 7 are essentially part of the same “monetary and fiscal convoy,” said Will Hutton, president of the Academy of Social Sciences. By championing a Thatcher-era blend of steep tax cuts and deregulation, he said, the Truss government strayed too far from the rest of the flotilla and the economic mainstream.The adherence to 1980s-era trickle-down verities also revealed the risks of sticking with outdated policies in the face of changing circumstances, said Diane Coyle, a ​​public policy professor at the University of Cambridge.“The situation in 1979 was very different,” Ms. Coyle said. “There were sclerotic high taxes and an overregulated economy, but not anymore.” Today, taxes in Britain are lower, and the economy is less regulated than the average member of the Organization for Economic Cooperation and Development, a club of 38 major economies.“The character of the economy has changed,” she said. “Public investment in research and skills are more important.”In that sense, what was missing from Ms. Truss’s economic plan was as important as what was included. And what Britain is lacking, said Mariana Mazzucato, an economist at University College London, is a visionary public investment program like the trillion-dollar climate and digitalization plans adopted by the European Union or the climate and infrastructure program in the United States.A rate of Inflation nearing 10 percent in Britain has affected the price of groceries and how people spend their money.Alex Ingram for The New York Times“If you don’t have a growth plan, an industrial strategy innovation policy,” Ms. Mazzucato said, “then your economy won’t expand.”Both Ms. Mazzucato and Ms. Coyle emphasized that Britain had some specific economic handicaps that predated the Truss administration, including the 2016 vote to exit the European Union, a stubborn lack of productivity, anemic business investment, and lagging research and development.Still, Ms. Coyle offered some advice that referred pointedly to Ms. Truss. “I think the main lesson is: Don’t shoot yourself in the foot.” More

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    Why the British Pound Continues to Sink

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    Britain’s pound coin — rimmed in nickel and brass with an embossed image of Queen Elizabeth II at the center — could always be counted on to be significantly more valuable than the dollar.Such boasting rights effectively came to an end this week when the value of the pound sank to its lowest recorded level: £1 = $1.03 after falling more than 20 percent this year.The nearly one-to-one parity between the currencies sounded the close of a chapter in Britain’s history nearly as much as the metronomic footfalls of the procession that carried the queen’s funeral bier up the pavement to Windsor Castle.“The queen’s death for many people brought to an end a long era of which the soft power in the United Kingdom” was paramount, said Ian Goldin, professor of globalization and development at the University of Oxford. “The pound’s demise to its lowest level is sort of indicative of this broader decline in multiple dimensions.”The immediate cause of the pound’s alarming fall on Monday was the announcement of a spending and tax plan by Britain’s new Conservative government, which promised steep tax cuts that primarily benefited the wealthiest individuals along with expensive measures to help blunt the painful rise in energy prices on consumers and businesses.The sense of crisis ramped up Wednesday when the Bank of England intervened, in a rare move, and warned of “material risk to U.K. financial stability” from the government’s plan. The central bank said it would start buying British government bonds “on whatever scale is necessary” to stem a sell-off in British debt.The Bank of England’s emergency action seemed at odds with its efforts that began months ago to try to slow the nearly 10 percent annual inflation rate, which has lifted the price of essentials like petrol and food to painful levels.Rising Inflation in BritainInflation Slows Slightly: Consumer prices are still rising at about the fastest pace in 40 years, despite a small drop to 9.9 percent in August.Interest Rates: On Sept. 22, the Bank of England raised its key rate by another half a percentage point, to 2.25 percent, as it tries to keep high inflation from becoming embedded in the nation’s economy.Energy Bills to Soar: Gas and electric charges for most British households are set to rise 80 percent this fall, further squeezing consumers and stoking inflation.Investor Worries: The financial markets have been grumbling with unease about Britain’s economic outlook. The government plan to freeze energy bills and cut taxes is not easing concerns.The swooning pound this week has carried an unmistakable political message, amounting to a no-confidence vote by the world’s financial community in the economic strategy proposed by Prime Minister Liz Truss and her chancellor of the Exchequer, Kwasi Kwarteng.To Mr. Goldin, the pound’s journey indicates a decline in economic and political influence that accelerated when Britain voted to leave the European Union in 2016. In many respects, Britain already has the worst performing economy, aside from Russia, of the 38-member Organization for Economic Cooperation and Development.“It’s just a question of time before it falls out of the top 10 economies in the world,” Mr. Goldin said. Britain ranks sixth, having been surpassed by India.Eswar Prasad, an economist at Cornell University, said this latest plunge had delivered a bracing blow to Britain’s standing. A series of “self-inflicted wounds,” including Brexit and the government’s latest spending plan, have accelerated the pound’s slide and further endangered London’s status as a global financial center.Dozens of currencies, including the euro, the Japanese yen and the Chinese renminbi, have slumped in recent weeks. Rising interest rates and a relatively bright economic outlook in the United States combined with turmoil in the global economy have made investments in dollars particularly appealing.But the revival by the Truss government of an extreme version of Thatcher and Reagan-era “trickle-down” economic policies elicited a brutal response.“The problem isn’t that the U.K. budget was inflationary,” wrote Dario Perkins, a managing director at TS Lombard, a research firm, on Twitter. “It’s that it was moronic.”To some, the pound’s journey indicates a decline in Britain’s economic and political influence.Suzie Howell for The New York TimesDuring the more than 1,000 years in which the pound sterling has reigned as Britain’s national currency, it has suffered its share of ups and downs. Its value in the modern era could never match the value of an actual pound of silver, which in the 10th century could buy 15 cows.Over the centuries, British leaders have often gone to extraordinary lengths to protect the pound’s value, viewing its strength as a sign of the country’s economic power and influence. King Henry I issued a decree in 1125 ordering that those who produced substandard currency “lose their right hand and be castrated.”In the 1960s, the Labour government under Harold Wilson so resisted devaluing the pound — then set at a fixed rate of $2.80, high enough to be holding back the British economy — that he ordered cabinet papers discussing the idea to be burned. In 1967, the government finally cut its value by 14 percent to $2.40.Other economic crises thrashed the pound. In the 1970s, when oil prices skyrocketed and Britain’s inflation rate topped 25 percent, the government was compelled to ask the International Monetary Fund for a $3.9 billion loan. In the mid-1980s, when high U.S. interest rates and a Reagan administration spending spree jacked up the dollar’s value, the pound fell to a then record low.The pound’s dominance has been waning since the end of World War II. Today, the global economy is experiencing a particularly tumultuous time as it recovers from the aftermath of the coronavirus pandemic, supply chain breakdowns, Russia’s invasion of Ukraine, an energy shortage and soaring inflation.As Richard Portes, an economics professor at London Business School, said, currency exchanges have enormous swings over time. The euro was worth 82 cents in its early days, he recalled, and people referred to it as a “toilet paper” currency. But by 2008, its value had doubled to $1.60.What might cause the pound to revive is not clear.The Truss government’s economic program has forcefully accelerated the pound’s slide — the latest in a series of what many economists consider egregious economic missteps that peaked with Brexit.Much depends on the Truss government.“The plunge in the pound is the result of policy choices, not some historical inevitability” said Ian Shepherdson, chief U.S. economist at Pantheon Macroeconomics. “Whether this is a new, grim era or just an unfortunate interlude depends on whether they reverse course or are kicked out at the next election.”As it happens, the Bank of England is preparing to issue new pound bank notes and coins featuring King Charles III, at the very moment that the pound has dropped to record lows.“The death of the queen and the fall of the pound do seem jointly to signify decisively the end of an era,” Mr. Prasad of Cornell said. “These two events could be considered markers in a long historical procession in the British economy and the pound sterling becoming far less important than they once were.” More

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    United Auto Workers reformers prevail in vote to choose president by direct election.

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    Members of the United Automobile Workers union have voted decisively to change the way they choose their president and other top leaders, opting to select them through a direct vote rather than a vote of delegates to a convention, as the union has done for decades.The votes on the election reform proposal were cast in a referendum open to the union’s roughly one million current workers and retirees and due by Monday morning. About 143,000 members cast ballots, and with 84 percent of the vote counted on Wednesday night, a direct-election approach was favored by 63 percent, according to a court-appointed independent monitor of the union.The referendum was required by a consent decree approved this year between the union and the Justice Department, which had spent years prosecuting a series of corruption scandals involving the embezzlement of union funds by top officials and illegal payoffs to union officials from the company then known as Fiat Chrysler.More than 15 people were convicted as a result of the investigations, including two recent U.A.W. presidents.Reformers within the U.A.W. have long backed the one member, one vote approach, arguing that it would lead to greater accountability, reducing corruption and forcing leaders to negotiate stronger contracts. A group called Unite All Workers for Democracy helped organize fellow members to support the change in the referendum.“The membership of our great union has made clear that they want to change the direction of the U.A.W. and return to our glory days of fighting for our members,” said Chris Budnick, a U.A.W. member at a Ford Motor plant in Louisville, Ky., who serves as recording secretary for the reform group, in a statement Wednesday evening. “I am so proud of the U.A.W. membership and their willingness to step up and vote for change.”David Witwer, an expert on union corruption at Pennsylvania State University at Harrisburg, said the experience of the International Brotherhood of Teamsters, which shifted from voting through convention delegates to direct election in 1991, after an anti-racketeering lawsuit by federal prosecutors, supported the reformers’ claims.Dr. Witwer said the delegate system allowed seemingly corrupt union leaders to stay in power because of the leverage they had over convention delegates, who were typically local union officials whom top leaders could reward or punish.“Shifting the national union election process from convention delegates to membership direct voting was pivotal in changing the Teamsters,” he said by email.At the U.A.W., leadership positions have been dominated for decades by members of the so-called Administration Caucus, a kind of political party within the union whose power the delegate system enabled.Some longtime U.A.W. officials credit the caucus with helping to elevate women and Black people to leadership positions earlier than the union’s membership would have directly elected them.But the caucus could be deeply insular. The Justice Department contended in court filings that Gary Jones, a former U.A.W. president who was sentenced to prison this year for embezzling union funds, used some of the money to “curry favor” with his predecessor, Dennis Williams, while serving on the union’s board.Union officials have said Mr. Williams, who was recently sentenced to prison as well, later backed Mr. Jones to succeed him, helping to ensure Mr. Jones’s ascent. More

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    Canada Goose workers vote to unionize in Winnipeg.

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    Workers at three plants owned by the luxury apparel-maker Canada Goose in Winnipeg, Manitoba, have voted overwhelmingly to unionize, according to results announced by the union on Wednesday.Workers United, an affiliate of the giant Service Employees International Union, said it would represent about 1,200 additional workers as a result of the election.Canada Goose, which makes parkas that can cost more than $1,000 and have been worn by celebrities like Daniel Craig and Kate Upton, has union workers at other facilities, including some in Toronto, and has frequently cited its commitment to high environmental and labor standards. But it had long appeared to resist efforts to unionize workers in Winnipeg, part of what the union called an “adversarial relationship.”The company denied that it sought to block unionization, and both sides agree that it was neutral in recent weeks, in the run-up to the election. The union said 86 percent of those voting backed unionization.“I want to congratulate the workers of Canada Goose for this amazing victory,” Richard A. Minter, a vice president and international organizing director for Workers United, said in a statement. “I also want to salute the company. No employer wants a union, but Canada Goose management stayed neutral and allowed the workers the right to exercise their democratic vote.”Reacting to the vote, the company said: “Our goal has always been to support our employees, respecting their right to determine their own representation. We welcome Workers United as the union representative for our employees across our manufacturing facilities in Winnipeg.”Canada Goose was founded under a different name in the 1950s. It began to raise its profile and emphasize international sales after Dani Reiss, the grandson of its founder, took over as chief executive in 2001. Mr. Reiss committed to keeping production of parkas in Canada.The private equity firm Bain Capital purchased a majority stake in the company in 2013 and took it public a few years later.The union vote came after accusations this year that Canada Goose had disciplined two workers who identified themselves as union supporters. Several workers at Canada Goose’s Winnipeg facilities, where the company’s work force is mostly immigrants, also complained of low pay and abusive behavior by managers.The company has denied the accusations of retaliation and abuse and said that well over half its workers in Winnipeg earned wages above the local minimum of about 12 Canadian dollars (about $9.35).Workers United is also seeking to organize workers at several Buffalo-area Starbucks stores, three of which are in the middle of a mail-in union election in which ballots are due next week.Nearly 30 percent of workers are unionized in Canada, compared with about 11 percent in the United States. More

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    Teamsters Vote for Sean O'Brien, a Hoffa Critic, as President

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    Sean O’Brien scored a decisive victory among union members after criticizing the current leadership as too timid in UPS talks and Amazon organizing.Sean O’Brien was a rising star in the International Brotherhood of Teamsters in 2017 when the union’s longtime president, James P. Hoffa, effectively cast him aside.But that move appears to have set Mr. O’Brien, a fourth-generation Teamster and head of a Boston local, on a course to succeed Mr. Hoffa as the union’s president and one of the most powerful labor leaders in the country.A Teamsters vice president who urged a more assertive stand toward employers like the United Parcel Service — as well as an aggressive drive to organize workers at Amazon — Mr. O’Brien has declared victory in his bid to lead the nearly 1.4 million-member union.According to a tally reported late Thursday on an election supervisor’s website, he won about two-thirds of the votes cast in a race against the Hoffa-endorsed candidate, Steve Vairma, another vice president. He will assume the presidency in March.The result appears to reflect frustration over the most recent UPS contract and growing dissatisfaction with Mr. Hoffa, who has headed the union for more than two decades and whose father did from 1957 to 1971. The younger Mr. Hoffa did not seek another five-year term.In an interview, Mr. O’Brien said success in organizing Amazon workers — a stated goal of the Teamsters — would require the union to show the fruits of its efforts elsewhere.“We’ve got to negotiate the strongest contracts possible so that we can take it to workers at Amazon and point to it and say this is the benefit you get of being in a union,” he said.David Witwer, an expert on the Teamsters at Pennsylvania State University at Harrisburg, said it was very rare for the Teamsters to elect a president who was not an incumbent or backed by the incumbent and who was sharply critical of his predecessor, as Mr. O’Brien was of Mr. Hoffa.Since the union’s official founding in 1903, Dr. Witwer said in an email, “there have been only two national union elections that have seen an outside reformer candidate win election as president.”During the campaign, Mr. O’Brien, 49, railed against the contract that the union negotiated with UPS for allowing the company to create a category of employees who work on weekends and top out at a lower wage, among other perceived flaws.“If we’re negotiating concessionary contracts and we’re negotiating substandard agreements, why would any member, why would any person want to join the Teamsters union?” Mr. O’Brien said at a candidate forum in September in which he frequently tied his opponent to Mr. Hoffa.Mr. O’Brien has also criticized his predecessor’s approach to Amazon, which many in the labor movement regard as an existential threat. Although the union approved a resolution at its recent convention pledging to “supply all resources necessary” to unionize Amazon workers and eventually create a division overseeing that organizing, Mr. O’Brien said the efforts were too late in coming.“That plan should have been in place under our warehouse director 10 years ago,” he said in the interview, alluding to the position of warehouse division director that his opponent, Mr. Vairma, has held since 2012.The outcome appears to reflect frustration over the union’s growing dissatisfaction with the tenure of James P. Hoffa.Calla Kessler/The New York TimesIn an interview, Mr. Hoffa said that the union was broke and divided when he took over and that he was leaving it “financially strong and strong in every which way.”He said he was proud of the recent UPS contract, calling it “the richest contract ever negotiated” and pointing out that it allows many full-time drivers to make nearly $40 an hour.He said Mr. O’Brien’s critique of the union’s efforts on Amazon was unfair. “No one was doing it a decade ago,” Mr. Hoffa said. “It’s more complex than just going out and organizing 20 people at a grocery store. He sounds like it’s so simple.”Mr. O’Brien did not elaborate on his own plans for organizing Amazon, saying he wanted to solicit more input from Teamsters locals, but suggested that they would include bringing political and economic pressure to bear on the company in cities and towns around the country. The union has taken part in efforts to deny Amazon a tax abatement in Indiana and to reject a delivery station in Colorado.Mr. O’Brien, who once worked as a rigger, transporting heavy equipment to construction sites, was elected president of a large Boston local in 2006. Within a few years, he appeared to be ensconced in the union’s establishment wing.In a 2013 incident that led to a 14-day unpaid suspension, Mr. O’Brien threatened members of Teamsters for a Democratic Union, a reform group, who were taking on an ally of his in Rhode Island. “They’ll never be our friends,” he said of the challengers. “They need to be punished.”Mr. O’Brien has apologized for the comments and points out that the reform advocate who led the challenge in Rhode Island, Matt Taibi, is now a supporter who ran on his slate in the recent election.The break with Mr. Hoffa came in 2017. Early that year, the longtime Teamsters president appointed Mr. O’Brien to a position whose responsibilities included overseeing the union’s contract negotiation with UPS, where more than 300,000 Teamsters now work.Understand Amazon’s Employment SystemCard 1 of 6A look inside Amazon. More