LyrArc Article Gist
Turkey's transition to democracy and a growing emerging market. Turkey's example provides a pathway for modernization in Egypt.

LyrArc Article Gist
Economists using data from Greek banks estimate the tax evasion in 2009 through unreported income at 28 billion euros. Using a tax rate of 40% 11.2 billion euros of taxes were evaded by Greek taxpayers. This is one third of the Greek deficit in 2009. The economists say doctors and engineers were prominent in the tax evasion list and find that these groups have large representation in Greece's parliament. Italy has taken steps under the Monti government to crackdown on tax evasion, but Greece is still to take action in this area, which is particularly glaring considering that the previous Greek government agreed to cut the minimum wage in Greece.

LyrArc Article Gist
Liberal groups feel president Obama has lost the leverage he had after the McConnell-Biden fiscal cliff deal of Jan. 1, 2013, saying this only sets the stage for talk of spending cuts.

LyrArc Article Gist
A proposal by U.S president Obama to increase the minimum wage to $9.00 per hour from $7.25 to reduce poverty and inequality. This was announced in the State of the Union address of 2013.

LyrArc Article Gist
ECB president Mario Draghi describes the problem of financial fragmentation in the EU, as each country's national supervisors ask their banks to withdraw their activities to within national boundaries. This ringfencing of liquidity positions means the interbank market is not functioning. Draghi says this financial fragmentation is within the mandate of the ECB to correct. He points to the risk of convertibility that has more and more to do with the premia being charged for Spain's and Italy's government bonds, not just the perception that the counter party can fail.-"To the extent that these premia have to do with factors inherent to my counterparty, they come into our mandate, they come within our remit." Draghi's effort to define the issues of financial fragmentation, and sovereign premia "hampering the functioning of the monetary policy transmission channels," is critical because the ECB sees it important to act within its mandate. The final point he makes is a political one about the future of the euro: "When people talk about the fragility of the euro, and the increasing fragility of the euro, and perhaps the crisis of the euro, very often non-euro area member states or leaders underestimate the amount of political capital that's been invested in the euro. We view this, and we are not unbiased observers in Frankfurt. We think the euro is irreversible. And its not an empty word now, because it preceded saying exactly what actions we are making that would make it irreversible." On the progress made, the acceptance of one financial and banking supervisor by member countries of the EU is seen as part of the idea of shared sovereignty necessary to put meaningful supervision across national boundaries in place. And on the structural reforms and deficit controls needed to be put in place he sees "the pace has been set, and all the signals that we get are they don't stop reforming themselves."...

LyrArc Article Gist
A Tax Policy Center study (joint project of the Brookings Institution and the Urban Insitute) shows $157 billion would be generated in the first year from an increase in taxes on the top 1% of income earners in the U.S., about 1.13 million households earning average $2.1 million, by increasing the federal tax rate from current 33.4% for this group to 40%. This could pay for a program to provide tution free education in America's colleges and universities. Even increasing the federal tax to 40% on the 115,000 households earning over $9.4 million on average, the top 0.1% of American households, would generate $55 billion in the first year, enough to pay for the $47 billion cost of tution free education at all of America's public colleges and universities, according to the Tax Policy Center. Economists including Stiglitz and others, point to significant impact of revenue generated from such a tax when applied to improving educational opportunity for the middle class and lower income groups. Education is a great leveler of income disparities as seen in the U.S. after World War II. During recent decades the highest income groups weren major beneficiaries of tax and economic policy, at the very time the middle class and factory workers were hit hard by global competition which lowered wages and exported jobs. The interest rate policies of the Fed after boom bust cycles also favored large investors in equity markets over smaller income earners with savings account deposits, whose savings experienced little growth under interest rates close to zero. ...

LyrArc Article Gist
U.S. President Obama's 2013 State of the Union address focussed on the problems facing the U.S. middle class, calling it "our generation's task" to tackle this problem. Economic changes have changed the patterns of economic growth and jobs, growth, income growth, that prevailed from the end of the Second World War to about 1989. But he offered few solutions beyond increasing the minimum wage to $9.00 from $7.25 to reduce poverty.

LyrArc Article Gist
Eric Cantor is the senior Republican leader in the House of Representatives. He is a key figure in the negotiations with the Obama White House over the budget, deficit reduction, and raising the debt ceiling. Cantor and House Speaker Boehner are leading the negotiations on the Republican side. Cantor rejects any compromise on tax increases. He told reporters: "I think behind this notion of 'We want shared sacrifice' that they continue to say means 'We want to raise taxes,' and we don't accept that we raise taxes in an economy like this." Cantor is a lawyer and a former state legislator from a district that covers the Richmond, Virginia, suburbs. He was elected in 2000. Through his "Young Guns" program Cantor recruited many of the 87 new Republicans who were elected in 2010. It is this support from rank and file Congressman that has propelled Cantor into a leadership position for the deficit talks. Responding to critics that say a compromise is needed from both sides in the talks, Cantor says- "I don't think the White House understands how difficult it is for fiscal conservatives to say they are going to vote for a debt-ceiling increase." On June 23, Cantor pulled out of talks with the White House. In the current round of negotiations Boehner pulled back from "a grand bargain" which included tax increases, after consulting with Cantor....

LyrArc Article Gist
A mid-July 2011 CBS poll on where Tea party supporters stand on raising the debt ceiling and on a balanced deficit reduction approach combining tax increases and spending cuts. This poll shows 66% of Tea Party supporters saying Republicans in Congress should compromise on their positions to reach an agreement to raise the debt ceiling. Only 31% said they should stick to their positions even if this meant not reaching an agreement. On a balanced approach 53% said it should be the path taken including tax increases and spending cuts for a solution to deficits, and 45% said only spending cuts was the right way. This shows a more flexible Tea Party than is presented in the media reports and strident statements of politicians.

LyrArc Article Gist
Moore points out that there are twice as many people working for the government in the U.S. (22.5 million) than in manufacturing (11.5 million). In 1960, the situation was quite different, there were 15 million workers in manufacturing and 8.7 million working for the government. More workers in the U.S. work for the government than in construction, farming, fishing, forestry, manufacturing, mining and utilites put together. Every state in the U.S. has more people working for the government- except for Indiana and Wisconsin- than people in manufacturing industrial goods. And California has 2.4 million government workers, which is twice the number in manufacturing in that state. New York and Florida have a 3:1 ratio, and New Jersey a 2.5:1 ratio of government workers to workers making industrial goods. Part of the reason for this is the huge increase in productivity and the advances in technology that make it possible to have higher production with fewer workers. This kind of productivity is missing in the government sector. And efforts to improve productivity tend to be blocked by the unions who favor the status quo....

LyrArc Article Gist
Standard and Poor's changed its rating of U.S. Treasury securities from stable to negative. U.S. Treasury securites are still rated AAA. Moody's made no change in the rating. U.S gross debt as a percentage of GDP is 91.6%, with the comparable number for Germany at 80%, France 82%, Canada 84%, the UK at 77%, Japan 221%. The U.S. budget deficit as a percentage of GDP is 10.6%, the comparable number for Germany is 3.3%, France 7%, Canada 5.5%, the UK 10.4%. John Chambers, the head of the sovereign ratings committee at Standard & Poor's stated that "the sign of political gridlock was a key determinant in our outlook change." The budget deficit will go up to $1.5-$1.65 trillion, or over 10% of America's GDP in 2011. The gross debt for the U.S. is at $14.219 trillion, just short of the $14.294 trillion cap. With rising entitlement costs and the interest on debt this is expected to go over the debt ceiling as early as July 8, 2011. Again political gridlock and the divide between Republicans and Democrats about deficit reduction is causing concern about the delay in raising the debt ceiling....

LyrArc Article Gist
Pessimism about the pace of democratization in China with the continued dominance of the Communist party in the business and economc structures of the country. The interrelationships of the party with state owned companies and the role of its 80 million members in running all aspects of life in China. Experts in China say the 18th party Conress showed no signs of change in the party's control and no sign of experimentation to allow for change comng from within the system so that China could establish a constitutional democracy with the rule of law. Experts in China say the new leaders Jinping and Keqiang may not be able to make changes even if they wanted to, because of the party's control and the earlier presidents and prime ministers from the last two decades who still retain a strong influence on the direction of the country.

LyrArc Article Gist
Since 2004 consumer spending's share of the economy in China has fallen from 40% to 35%.

LyrArc Article Gist
The European Banking Authority has lost credibility after two rounds of stress tests by the EBA failed to turn up the problems at Spanish banks that required a $125 billion recapitalization by the EU rescue fund. Now EU officials are turning to the European Central Bank as the eurozone's main banking regulator. The U.S. Federal Reserve is performing this role after the 2008 financial crisis, with the FDIC in charge of bank closures and resolution. ECB president Mari Draghi says, letting the ECB perform supervisory tasks, a decision made at the June 28 EU summit talks, is fully in line with the bank's mandate. Separate decisions will be needed for a bank resolution authority like the FDIC. The ECB will then have to hire hundreds of banking experts to make on site visits to eurozone banks and check their loan books and make independent assessments of bad loans, bank risks, and capital requirements. The important thing is an agency which is free of local and political interference to make the correct evaluations....