LyrArc Article Gist
Daniel Altman's proposal for a tax on wealth over $1 million. He makes the case for taxing wealth not incomes to reduce inequality as this is where the situation in terms of inequality has worsened for the U.S. in recent decades. To support this proposal Altman cites the change in the U.S. Ginni coefficient, which measures inequality. The Ginni coefficient is anumber from 0 to 100 which goes up with higher income inequality. From the late 70's to the 1990's, the Cnesus Bureau showed this to be in the low 40's. By 1992 the Ginni coefficient went up to the mid-70's, according to the Federal Reserve data. It increased to about 80 in 2010. In 1992 the top 10% in the U.S. population controlled 20 times the wealth of the bottom 50%. By 2010 this figure triples to 65 times. and the graduated income tax even if it redistributes a small share of the wealth does little to affect the trend of wealth extremes from building up and threatening the social fabric of America, reducing mobility and opportunities for the bottom 50% to unprecedented levels since the 1950's. ...

LyrArc Article Gist
Efforts to boost the share of national income that goes to rural households and workers in China. The share of income taken by state owned enteprises and taxes paid by the enterprises would have to change for reducing the gap in incomes and reducing inequality in China.

LyrArc Article Gist
Friedman compares the anti-corruption movements in India and the U.S., the world's two largest democracies. The Occupy Wall Street anti-corruption movement in the U.S. focusses on the excessive influence of banks on lawmakers, regulators, and the government, through the use of campaign money, revolving door for government officials and regulators to join banks, and intense lobbying. The anti-corruption movement focusses on corruption in government at higher levels, such as the handling of government licenses, and at the basic levels of needing to bribe officials for something as simple as getting a birth certificate or other government document. Both have pernicious effects, in the U.S. excesssive bank influence leads to taking excessive risk for higher bonuses, putting the entire financial system at risk and creating a crisis in housing that delays the economic recovery. And in India the corruption leads to retarded progress, as funds to invest in infrastructure and development are siphoned off, business and entrepreneurs are required to pay bribes at each step, and ordinary people face the need to pay bribes for the most routine interactions with government officials. In the process this creates more unequal societies by skewing the distribution of benefits from wealth created to groups that are better equipped to game the system. The economic system once distorted in these ways has tendencies to take talent away from productive activity and innovation which create wealth, and direct it towards speculative activities....

LyrArc Article Gist
Kessler in the WP corrects Obama's claim that he created 800,000 jobs. He says this is clever arithmetic as it takes a low point in Feb. 2010 following the financial crisis. Kessler points out that according to the Bureau of Labor Statistics, U.S. manufacturing jobs were 12.56 million in Jan. 2009 when Obama became president. In Nov. 2016, early estimates show there were 12.26 million manufacturing jobs, a loss of 300,000. This loss does not reflect the problems in the U.S. auto industry and older industries in the midwestern states as a result of trade and globalization that speeded up with the rapid industrialization of China. And led as Greg Ip pointed out in a recent WSJ report to a rapid acceleration of job losses in a decade that did not happen in the same scale during Japan's industrialization and urbanization in the sixties. This aggravated the situation in Michigan, Ohio, Wisconsin, Indiana, and Pennsylvania, and was met with a feeble response from Democrats. Even a economist like Krugman favoring the Obama administration's efforts came to the conclusion that TPP did not add much to gains from trade as most of the gains had already been realized. More of the gains went to tech and IT in California, at the expense of the auto industry based in the midwest. A report in WP show a president too close to IT in California and failing to grasp the situation in the midwest. Voters punish whoever is in power, regardless of being Conservative or Liberal, in Canada the hollowing out of manufacturing under Harper in Ontario and Quebec led to the win by Trudeau's Liberals.  ...

LyrArc Article Gist
John Taylor on the dangers of a loose U.S. monetary policy and the effects this had in fueling a housing bubble in Spain, Ireland and other EU countries. Taylor points to the bubble ocurring in emerging market economies from low interest rates. Taylor says the ECB's interest rate moves in 2003-2005 were affected by the Fed's low interest rates. He estimates the ECB set rates about two percentage points too low leading to housing bubbles in EU countries. A similiar process is taking place today with the Fed's near zero interest rate policy. Taylor points to interest rates in a group of 18 emerging market economies- including Brazil, China, India, Mexico and Turkey, which have held interest rates on average about 5 percentage points below widely used benchmarks fueling a doubling of global commodity prices between 2009-2011. The U.S. Fed's policies make it harder for central banks in emerging market economies to take aggresssive action against bubbles developing in these countries. Taylor says his does not mean that the Fed should not pay attention to the U.S. unemployment rate and long term unemployed, but should keep in mind the negative effects of slowing demand in emerging market economies and in the EU as a result of its monetary policy of keeping rates at near zero for long periods of time. This feeds back to the U.S. economy at a critical time....

LyrArc Article Gist
Arne Duncan describes the improvements in K-12 education in two regions of the U.S.- the District of Columbia and Tennessee between 2011 and 2013, shown by the 2013 National Assessment of Educational Progress (NAEP). The hard work of educators, parents and school officials is paying off and offers examples for other parts of the country, says Duncan. Lessons include facing the facts, not dumbing down by setting low standards. With higher standards Tennessee students were only 34% proficient in math and 45% in reading compared to the 91-92% with lower standards. Republicans followed up on the work of Democrats in the state. Soliciting feedback from critics and experts- the feedback was used to improve systems and learning to help teachers and students. Schools chancellor Kaya Henderson says improving teacher quality was critical, and so was academic rigor. Still Duncan says more needs to be done, this only shows the right direction for states lagging behind, and one should not get complacent. The other areas college enrollment and dropout rates need to be followed carefully. International PISA results still show the U.S. at 27th in math and 14th in reading of 65 countries- making this only the beginning in setting the future course for U.S. educational improvements....

LyrArc Article Gist
France's central bank chief Christian Noyer, says public spending to create jobs has the drawback of creating yesterday's jobs, but lasting job creation has to look at today and the future for effective job creation. Once government spending crosses a certain level, about 55% of GDP, a level France has crossed, further spending becomes counterproductive, reducing public confidence in the economy, as higher future taxes are anticipated canceling any benefits.

LyrArc Article Gist
Kristof says social ills- the lack of stable marraiges, drug use, poor day care resources- compound the problems of lack of education beyond high school in America's white underclass. The lack of good manufacturing jobs and lower wages have hit people with only a high school education the hardest. Two decades of decline in good manufacturing jobs with globalization have hit this part of the population in the U.S. hard creating increasing inequality in America. He sounds a Moynihan type call to the plight of America's poorest white communities.

LyrArc Article Gist
Martin Feldstein says China is gaining control of three problems it faces of shrinking export markets, the effects from a large stimulus in response to the 2008 financial crisis, and inflation especially high real estate prices. The economy is shifting to higher role for services and less dependence on exports under the new five year plan. The real estate prices are levelling off after steep increases. And inflation is under control. New investment will go into infrastucture needs such as power development and low income housing. As the economic problems are being tackled, the political problems remain. China faces an aging population under its one child policy, and it will have to support an increasing number of retired people in the future. Inequality and corruption are two problems that continue to grow and present challenges to the new leadership taking over in 2013.

LyrArc Article Gist
Van Dam says its not that great being a worker in the U.S. because it is hard for the unemployed resulting from competing with workers in other countries with lower wages, and for those who are unemployed harder because worker collective bargaining is weakened over 3 decades. He cites a 296 page OECD report showing very little government support for unemployed and at risk American workers. It says this has contributed to higher income inequality and larger share of lower income people than almost any other advanced a nation. Only Spain and Greece are shown as having more households earning less than half the median income- showing large numbers of people are poor or close to being poor. In the U.S. an average of 1 in 5 lose their jobs each year, and 23% of workers 15 to 64 are in their job less than a year in 2016. The job churn hurts workers because of firing and layoffs being frequent, more than is healthy for a economy. The U.S. and Mexico are the only two countries not requiring advance notice before firings. And fewer than half of workers find a job within a year in the U.S. Two in three families with a displaced worker fall in poverty for some time. Unemployed workers with typically 26 weeks support get less support than any other country in the study. Only 12% of workers in U.S. are covered by collective bargaining. ...

LyrArc Article Gist
Krugman points out that the federal tax rate for the top 1% is 34% in 2013, according to the Congressional Budget Office, because president Obama let the high end Bush tax cuts to expire. It is the number to remember says Krugman- 34. In 2008 the figure was 28.2. Under Hillary Clinton the average tax rate for the top 1% would go up by 3.4 percentage points, according to the Tax Policy Center. Some of this would help pay for the tution plan to provide access to the middle class to public universities. Under populist Trump, Krugman points to the elimination of the inheritance tax and tax rates going down substantially, and no such programs to promote the upward mobility that everyone is talking about, and no way to pay for a big infrastructure building effort for growth and jobs- upward mobility that is the focus of every candidate's election campaign including Sanders, Trump in appealing to older white working class families, Clinton, Ryan, Bush, and others in both parties.   ...

LyrArc Article Gist
President Obama's program for education includes promoting charter schools, closing failed schools, making teacher pay reflect the quality of education they can provide, and providing financing to support better education and better classrooms. Here he outlined his plans in a major speech on education to an Hispanic group.

LyrArc Article Gist
A number of issues came up at the Women20 Summit in Berlin. Annette Niederfranke, Director of the International Labor Organization, brought up the issue of family reconciliation as "one of the toughest challenges for working women worldwide," that in order to meet obligations women tended to work in "non standard forms of employment and in part time work linked to lower wages, lower social security, lower benefits, and fewer training possibilities." Childcare was also an issue that was prominent considering the lack of adequate childcare in many countries including in the European Union. With responsibilities for the elderly, babies, and small children women tend to be in the workforce for shorter periods leading to men taking up many of the higher positions. Angela Merkel pointed out that Gemany tended to take a narrow view of professions available to girls, saying- "So it is very very important that we take a broader view of things while girls are still at school." Merkel also supports a Africa compact that would help women set up small and middle size businesses in poor countries. The "Digital" aspects of this and other efforts for women were a major topic being discussed. One idea that came up was that more cooperation from men was needed to make things happen. This is the third Women20 Summit after ones in Turkey and China, and a sense of momentum was felt by women. ...

LyrArc Article Gist
A new report, "China: 2030," by the World Bank and the Development Research Center (DRC), has major implications for the course of action taken by new Chinese leaders. The limits to China's economic model with the dominant role of state owned companies has been pointed out in the past. It has now reached a point where China must choose to move to a modified model or face the "middle income trap" of countries like Brazil and Mexico, where income levels and growth reaches a certain level and then decelerates suddenly with little warning. The report makes some major recommendations that would modify the current system. It says the state owned companies should be supervised by asset management firms focussed on commercializing these companies, and not supervised by the State-owned Assets Supervision and Administration Commission (SASAC). The asset management firms would restrict the state owned companies on what areas they participate and sell off businesses to make it possible for private companies to compete. Zoellick says- "China needs to restrict the role of the state-owned companies, break up monopolies, diversify ownership and lower entry barriers to private firms." The state owned companies would be required to pay sharply higher dividends to the government which could then be used for social programs. Currently state owned companies invest in land which is sold by local governments for revenue helping fuel the real estate bubble. Significantly, the report had its origins when it was proposed by Mr. Zoellick, head of the World Bank, during a visit to Beijing in Sept 2010. It was supported by Li Keqiang, then vice premier, and now expected to be the new prime minister of China. The World Bank is widely respected by Chinese leaders because of its assistance during the early stages of reform in the 1980's. The DRC reports to China's State Council, a top governmental institution, and the No. 2 person at DRC, Liu He, is a senior advisor to the Politburo Standing Committee. He helped draft the current five year plan and is close to Li and Xi Jinping, the next president of China. The SASAC has opposed these ideas, especially any shift in its personnel selection of management at the state owned companies, which it shares with the Communist party's personnel department. Respected China economists say China faces large risks of a sudden sharp slowdown because the the state owned companies have largely copied foreign technology and have not generated enough technological advances, which will be needed for the next stage of growth. Lower growth rates could worsen problems in China's banking system leading to a crisis. The Conference Board, estimates China's growth at 8% for 2012, slowing to an average annual growth rate of 6.6% from 2013 to 2016. Barry Eichengreen of UC Berkeley, Donghyun Park of the Asian Development Bank, and Kwanho Shin of Korea University, say the annual growth rate will drop by at least 2 percentage points by 2015....

LyrArc Article Gist
Pope Francis is strongly critical of the manner in which the capitalist system has functioned in recent decades, increasing inequality, and hurting the marginalized, the working class and poor. Pope Francis tells people during his visit to the poorest countries in Latin America, Ecuador, Bolivia and Paraguay, that the Catholic Church committed grave errors during the period of Spanish colonialism by allying with the ruling classes and creating great inequalities and suffering. The director of the Institute for Policy Research and Catholic studies at Catholic University of America, Stephen Schneck, says the Pope is reflecting a century of activism on social issues since the Pope Leo XIII encyclical in 1891, calling for social and economic fairness for labor, with the encyclical "Rerum Novarum" - or "On the Condition of Labor." The Pope's message in Santa Cruz, Bolivia, to nearly 2000 social activists, farmers and trash workers, neighborhood activists, was that change has to come from grassroots, that the local communities have acquired the knowledge which is valuable to act for economic and environmental betterment. He praised cooperatives and local organizations that enhanced the value of labor. His message resonates say Catholics because he has stayed in close contact with local communities, and the poor, working class people in Argentina. It is focussed on empowerment of local communities. In Bolivia the left government has adopted measures that attract foreign capital and investment, so that it is a model that stays away from socialist ideology, while at the same time embracing the grassroots idea of empowering local people and communties. In this way it has improved living standards in Bolivia and received favorable ratings in capital markets....

LyrArc Article Gist
Tourists from China went up by 20% in 2015, going over 1 million. Foreign enrollment at Australian educational institutions was up significantly in 2015, going up to 645,000, up 25% over 2012 with the weaker Australian dollar. Australia's services sector including inbound education and tourism exceeded in value the minerals and metal ores exports in the last two months of 2015. This enabled the Australian economy to grow by 3% in the 4th quarter of 2015 over the prior year.

LyrArc Article Gist
France with about 6 million Muslims and a history of colonial rule in North African Arab countries (Algeria, Tunisia, Morocco, and other countries) faces a challenge of integrating Muslims into French society. Germany with a large population of Turkish origin also faces a similiar challenge. The attack on the satirical weekly Charlie Hebdo for poking fun at Islam, in a manner similiar to its satirical work on Catholicism, leads to the death of 12 journalists, a policeman and a policewoman. Erlanger and Bennhold describe the reaction of people in France. Peter Neumann, director of the International Center for the Study of Radicalization at King's College , London, says about anti-immigrant sentiment increasing in Europe to the point where it is uncoupling working class families from the elites in Europe and reaching into the mainstream of society.