Friday, September 28, 2012

The root of Europe's riots; France's harshest budget in 30 years; A cancer patient's best friend; Punjab's drug problem; 215m full-time child workers

1 The root of Europe’s riots (Ha-Joon Chang in The Guardian) Throughout the 1980s and 90s, when many developing countries were in crisis and borrowing money from the International Monetary Fund, waves of protests in those countries became known as the "IMF riots". They were so called because they were sparked by the fund's structural adjustment programmes, which imposed austerity, privatisation and deregulation. Those rioters were not just expressing general discontent but reacting against the austerity measures that directly threatened their livelihoods, such as cuts in subsidies to basic commodities such as food and water, and cuts in already meagre welfare payments.

The IMF has made a lot of changes in the past decade or so. It has become more cautious in pushing for financial deregulation and austerity programmes, renamed its structural adjustment programmes as poverty reduction programmes, and has even (marginally) increased the voting shares of the developing countries in its decision-making. Given these recent changes in the IMF, it is ironic to see the European governments inflicting and old-IMF-style programme on their own populations.

What has been happening in Europe – and indeed the US in a more muted and dispersed form – is nothing short of a complete rewriting of the implicit social contracts that have existed since the end of the second world war. In these contracts, renewed legitimacy was bestowed on the capitalist system, once totally discredited following the great depression. In return it provided a welfare state that guarantees minimum provision for all those burdens that most citizens have to contend with throughout their lives – childcare, education, health, unemployment, disability and old age.

The danger is not only that the new austerity measures are killing the European economies but also that they threaten the very legitimacy of European democracies – not just directly by threatening the livelihoods of so many people and pushing the economy into a downward spiral, but also indirectly by undermining the legitimacy of the political system through this backdoor rewriting of the social contract.

2 France’s harshest budget in 30 years (The Guardian) To the dismay of a swath of French bankers, business leaders and the wealthy, President Francois Hollande has remained true to his word and unveiled €20bn in new taxes, including a 75% "supertax" band that will hit the rich. In what Hollande has described as France's harshest budget in 30 years, business and personal taxpayers were asked to make an "unprecedented effort" to slash the country's public spending deficit. However, the Socialist government sidestepped swingeing cuts in public spending, including pensions and state salaries, in its 2013 budget, which aims to find €36.9bn in savings.

The budget was a delicate balancing act in which Hollande sought to reassure investors and the financial markets, while simultaneously hiking taxes on large businesses and high-earners. However, it commits the government to an austerity programme that will be unpopular with leftwingers in the party, at a time when unemployment is rising and the economy teeters on the brink of recession.

3 UK’s AAA credit rating at risk (The Guardian) The UK has come a step nearer losing its AAA credit rating after one of the big three ratings agencies warned that rising debts and slowing growth jeopardised its status as a safe haven for investors. Fitch said the likelihood of a downgrade had increased after the economy's poor performance over the last year during which it has slipped back into recession. The ratings agency pointed out that the UK had a debt mountain second only to the US among those countries with a AAA rating and was nearing the upper limit the agency set for the most creditworthy countries.

"Fitch now expects the economy to contract by 0.3% in 2012 compared to an expectation of growth of 0.8% when the UK sovereign rating was last formally reviewed in March 2012. It added: "The weaker than anticipated economy is reflected in lower corporate tax returns and higher public sector net borrowing. The US was downgraded by rival ratings agency Standard & Poor's last year, but retained its AAA rating with Fitch and Moody's.

4 Spain needs $76bn to recap banks (The New York Times) Spain’s ailing banking industry could need as much as $76.4 billion, in additional capital, according to an independent banking assessment. The report paves the way for Madrid to request bank rescue loans that European finanche number was within the range of previous estimates and well below the potential 100 billion euros, or $128.8 billion, in bailout money that Spain negotiated with other euro zone countries in June.

And of the 14 banks assessed by the consulting firm Oliver Wyman, half are not in need of emergency funds. These include Santander, BBVA and La Caixa, the country’s three largest financial institutions. Presenting the report, Fernando JimĂ©nez Latorre, the Spanish secretary of state for the economy, said at a news conference that Spain would probably soon request about 40 billion euros, roughly $50 billion, of the European bailout offer. 

5 A cancer patient’s bet friend (Suleika Jaouad in The New York Times) When I was growing up, my dream was to one day become a veterinarian. But as I got older, there was college, summer travel, then my first real job, at a law firm in France. I was entering the “real world,” as they say in commencement speeches. And there was no room in my adult life for a dog. Then, a year and a half ago, came my cancer diagnosis, and with it the return home. I found myself pleading with my parents for a puppy, just as I’d done as a child. But I knew the medical reality: My weakened immune system, the result of chemotherapy, made getting a dog impossible. 

In early September, I was shocked when I received a voice mail message from one of the nurses in the bone marrow transplant clinic. My doctors had decided to give me the green light on adopting a furry friend. In fact, they encouraged it. Caring for a pet, my doctors told me, might even be therapeutic. As a cancer patient, I’m always being prescribed medicine. But I never thought I’d get a prescription for a puppy.

I’m giddy these days since Oscar came into my life. Caring for a pet is a welcome distraction from the day-to-day reality of being a cancer patient. In the short time Oscar has been in my life, he’s had an effect on my relationships. Rather than staring at my bald head, passers-by stop to play with Oscar and to tell me how cute he is. It is a sign of my progress that I’m allowed to be around a dog at all. My immune system is getting stronger, my doctors tell me. Oscar can’t change what’s going on in my bone marrow. But I can feel that he’s already working magic.

6 Punjab’s drug problem (Dawn) In the 1970s, Punjab was regarded as India’s “bread basket”, due to its fertile soil, prosperous farmer community and booming agricultural output. Some, like former addict Navneet Singh, see the growing appetite for drugs as “a problem of abundance.” Singh, a successful restaurant owner who has been clean for 11 years, grew up in a wealthy family. He believes that Punjab’s relative affluence and its cultural norms, coupled with the easy access to drugs, make addiction a commonplace reality. “What does the Punjabi do when he gets rich? He buys an SUV, a gun and he gets high,” he said. “Then as time passes and you get addicted you will do anything to support the habit,” he added.

Doctor J.P.S. Bhatia has witnessed the problem of addiction in Punjab from close quarters. When the psychiatrist set up his hospital in 1991, he would see one or two drug-related cases a week. Today, out of the 130 patients he sees every day, some 70 to 80 per cent are battling drug addiction, he tells AFP. The Amritsar neighbourhood of Maqboolpura has lost so many young men to overdoses or drug-related illnesses, that it is locally known as “the village of widows”.

7 Poverty in South Asia (Dawn) Poverty in Pakistan is a multifaceted problem – deeply rooted in its socio-political and economic structure of governance, asserts the annual report of the Mahbub ul Haq Centre launched in Lahore last week. The centre’s ‘Poverty of Opportunity Index’ estimates that 29.2% of the country’s total population, or more than 52.5 million people out of 180 million, live in poverty. The index shows countries like India, performing better with respect to poverty of education opportunities, have a lower incidence of poverty (27.8%) as measured by poverty of opportunity index in spite of suffering from a greater incidence of calorie-based income poverty.

Out of the four South Asian countries ranked in the index, only Bangladesh fares worse than Pakistan with its 35.2% population living in poverty. Sri Lanka has a remarkably low incidence of poverty of 7.8%, indicating its commendable performance with respect to provision of education, health and income opportunities to its people.

8 Around the world, 215m children work full-time (Straits Times) According to the International Labour Organisation, there are around 215 million children working. Many of them work full-time and do not receive proper nutrition and care. Universal Children’s Day will be marked on Nov 20.

Thursday, September 27, 2012

Global financial system still at risk, says IMF; How we know when we've won; France's jobless top 3 million; SA's ANC 'is in ICU'; The wages of pride

1 Global financial system still at risk, says IMF (The Guardian) The global financial system remains as risky as it was before the credit crisis, with the necessary “reboot” of the banking sector delayed by the emergency measures taken to prop up economic growth, the International Monetary Fund has warned. It argued that despite a blizzard of new regulations, the banking system remains vulnerable.

The IMF was one of the global institutions blamed in the wake of the Great Crash of 2008-09 for exaggerating the benefits of financial globalisation, and failing to issue strong enough warnings about its risks. In its latest analysis, it found that the world’s banks are just as big and intertwined, and just as reliant on short-term wholesale funding — rather than more solid savers’ deposits as before the crash.

“Although some countries, notably the US, have reduced their dependence on short-term funding, the bulk of the evidence suggests that the structure of the system has not changed in healthier directions,” it said. The IMF pointed out that in many countries, including the UK, troubled banks were swallowed up by their stronger rivals at the height of the crisis, leaving the financial sector even more concentrated than before 2008.

2 How we know when we’ve won (Thomas L Friedman in The New York Times) Whenever I was asked during the Iraq war, “How will you know when we’ve won?” I gave the same answer: When Salman Rushdie can give a lecture in Baghdad; when there is real freedom of speech in the heart of the Arab Muslim world. There is no question that we need a respectful dialogue between Islam and the West, but, even more, we need a respectful dialogue between Muslims and Muslims. What matters is not what Arab Muslim political parties and groupings tell us they stand for. What matters is what they tell themselves, about what they stand for and what excesses they will not tolerate.

This internal debate had long been stifled by Arab autocrats whose regimes traditionally suppressed extremist Islamist parties, but never really permitted their ideas to be countered with free speech — with independent, modernist, progressive interpretations of Islam or by truly legitimate, secular political parties and institutions. Are we seeing the start of that now with the emergence of free spaces and legitimate parties in the Arab world? Again, too early to say, but the ongoing moderate backlash to the extremist backlash is worth hailing — and watching. 

3 France’s jobless top 3 million (BBC) The number of unemployed people in France has topped 3 million for the first time since 1999, according to latest labour ministry figures. August's jobless total rose by 23,900 to 3.011 million, a 9% increase on a year earlier, marking the 16th consecutive monthly rise. Speaking before the data was officially announced, Labour Minister Michel Sapin said: "It's bad. It's clearly bad."

"These three million unemployed embody the failure of economic and social policies undertaken during the last few years," the labour ministry said in a statement. "In the face of this difficult report, the government is determined to implement as soon as possible reforms", it said. The news will, however, add pressure on President Francois Hollande, who came to power on a promise to revive the economy.

4 Jamaica may be loudest island on the planet (BBC) Everywhere you go in Jamaica, you hear music - loud music. Although authorities recently enforced an island-wide musical curfew, there is a growing campaign to relax the restrictions. Why has the Caribbean nation gained a reputation for being the loudest island on the planet?

Driving around the capital Kingston, the volume dial on the taxi driver's radio appears to be permanently glued to a point beyond 11, as music blasts through speakers worthy of a mobile dancehall. In many of the world's cities, irritated commuters might tut at the tinny leakage from a fellow traveller's earphones but on Jamaica, no-one bothers with earphones.

Welcome to the loudest island on the planet - up until 02:00 anyway. Recently, after so many sleep-deprived tourists complained about the noise, the government began to enforce legislation which curbs all music publicly aired beyond the early hours of the morning, especially in and around resorts.

5 SA’s ANC ‘is in ICU’ (Johannesburg Times) The gloves came off this week as top ANC members took on President Jacob Zuma - pointing out how the ruling party was degenerating under his leadership. NC Youth League deputy president Ronald Lamola told Wits University students the ANC under Zuma's leadership was in the intensive care unit and that, if the youth were not careful, they would inherit a ''skorokoro'' or a wreck of an organisation.

At the same gathering, Sports and Recreation Minister and ANC executive member Fikile Mbalula called on the youth to mobilise society to support the struggle for economic freedom. In Polokwane, where Zuma's nemesis, Julius Malema, appeared in court on money-laundering charges allegedly involving R4.6-million, ANC treasurer-general Mathews Phosa said those found to have failed to deliver on the ANC mandate should be shown the door.

Zuma is expected to face a challenge from his deputy, Kgalema Motlanthe, for the top post at the party's elective conference in Mangaung in December. Mbalula told the students that the youth under former president Nelson Mandela also faced challenges of a leadership that refused to change.

6 The wages of pride (Saba Karim Khan in Dawn) It is the 21st century and Pakistan still reports numerous cases of honour killing annually despite the phenomenon of underreporting. Honour-killing is defined as “gender-based violence … the homicide of a member of a family or social group by other members, due to the belief the victim has brought dishonour upon the family or community”.

Karo-kari falls under the same ambit, literally translating into ‘black male’ (karo) and ‘black female’ (kari). After labelling a ‘dishonourable’ woman ‘kari’, the family aims to restore its honour by killing both the ‘karo’ and ‘kari.’ The concept of women being viewed as property has long existed and the birth of the girl child in many societies continues to be viewed as a blow to the family’s so-called pride. In some societies a man is hit with a shoe seven times if a daughter is born.

The continued lack of attention by public-sector and law-enforcement agencies alike towards demanding accountability of those who commit honour killings has played a big role in perpetuating such incidents, which are at odds with the modern era we inhabit. Human rights and women’s protection has never been a sustained priority for the government.

The existence of gender-based violence including karo-kari is a reiteration of the reality that the quest for external reassurance continues in humans unabated. Women must abide by socially restrictive practices to ensure that no damage is done to the family’s honour and thus safeguard the reputation of men. Social approval and outer scorecard at play yet again. Who thinks what and of whom? Alas, they are the superior sex indeed!

Friday, September 21, 2012

India's 'tired regime runs out of ideas'; In iPhone 5 fever, don't count Samsung out; 'Serial mastery' is sign of the times; Is tech destroying San Francisco?; Sam Becile and imbeciles

1 India’s ‘tired regime runs out of ideas’ (Jayati Ghosh in The Guardian) India's ruling coalition has been rocked after its second-largest partner withdrew this week. The latest round of political instability comes about because prime minister Manmohan Singh announced a number of economic measures without consulting his allies. The announcements – that diesel prices were to be raised, and that India's retail and domestic aviation sectors were to be opened up to overseas companies  – were the government's attempt to woo back foreign investors who had become cynical about India's growth prospects.
The popular anger against the rise in diesel prices is easy to understand – Indian prices of this essential fuel are already among the highest in the world. This increase will affect all other prices, raising farmers' costs and causing already high food prices to soar. If the government is really concerned with controlling inflation, this is a foolish and unjust measure, bound to cause further inflation without delivering much in public savings.

Most sectors are already open to foreign investors to varying degrees, but the proposals to allow foreign investment in this area have evoked strong responses on both sides and generated massive public debate. The international evidence suggests that the greater market power of large supermarket chains actually leads to higher marketing margins and exploitation of small producers.
The employment impact is likely to be very negative. The retail trade in India employs about 40 million – mostly very small-scale traders who are largely self-employed, who would not be able to compete with large organised corporations. So the hue and cry about opening up retail trade in India is hardly surprising. What is more surprising is the government's insistence on pushing through this relatively minor "reform" barely a month after it had promised parliament it would do so only by consensus. The entire episode speaks of a tired regime that has run out of ideas.

2 In iPhone 5 fever, don’t count Samsung out (The New York Times) By many measures, Samsung Electronics should be on the ropes. Last month, it lost an important patent battle with its rival Apple after a jury in the United States ruled that Samsung had illegally copied aspects of Apple’s groundbreaking iPhone. Apple introduced its newest model, the iPhone 5, to enthusiastic reviews and a worldwide consumer frenzy. This week, Apple shares hit a record high and cracked the $700 threshold. So why is Samsung not only holding its own, but thriving?
Even as the Apple juggernaut has rolled over Research in Motion, which makes BlackBerry handsets, and Nokia, Samsung reported record earnings for its latest quarter, which ended June 30. Its handset profits, fueled by the introduction of its high-end Galaxy S III model in May, leapt 75% over the previous year. Samsung’s stock has gained over 65% in the last year.

Samsung can’t claim the intense media coverage, the passionate fan base or the cult of personality that grew up around Steve Jobs. But the giant South Korean manufacturer has built an impressive lead in global mobile phone sales. The research firm IDC reported that Samsung had 24.1% of the global handset market compared with Apple’s 6.4% at the end of the last quarter. Samsung also had a commanding lead in the lucrative smartphone market: 32.6% compared with Apple’s 16.9%, although the gap is likely to narrow because of the iPhone 5’s introduction.
3 Sign of the times: ‘Serial mastery’ (The New York Times) Going back to school for months or years is not realistic for many workers, who are often left to figure out for themselves what new skills will make them more valuable, or just keep them from obsolescence. In their quest to occupy a useful niche, they are turning to bite-size instructional videos, peer-to-peer forums and virtual college courses. Lynda Gratton, a professor of management practice at the London Business School, has coined a term for this necessity: “serial mastery.”

“You can’t expect that what you’ve become a master in will keep you valuable throughout the whole of your career, and you want to add to that the fact that most people are now going to be working into their 70s,” she said, adding that workers must try to choose specialties that cannot be outsourced or automated. “Being a generalist is, in my view, very unwise. Your major competitor is Wikipedia or Google.”
Businesses have responded by pouring more money into training, even in the current economic doldrums. They have experimented by paying employees to share their expertise in internal social networks, creating video games that teach and, human resources consultants say, enticing employees with tuition help even if they leave the company.

4 Is tec h destroying San Francisco? (San Francisco Chronicle) The latest salvo in the debate over San Francisco’s tech boom 2.0 comes in the October issue of “San Francisco” magazine. In a piece entitled “How Much Tech Can One City Take?” founder David Talbot writes: The unique urban features that have made San Francisco so appealing to a new generation of digital workers—its artistic ferment, its social diversity, its trailblazing progressive consciousness—are deteriorating, driven out of the city by the tech boom itself, and the rising real estate prices that go with it.
Talbot, a longtime San Francisco journalist and author of a recent book that delves into S.F.’s more turbulent times, goes beyond rent. He says tech CEOs and companies aren’t engaging the community and City Hall policies favor tech over the arts.

Talbot’s rallying cry is hardly targeted at the tech workers themselves, as he says “…one gets the sense that this latest generation of strivers has only the barest understanding of what has long made the city such a cool, gray oasis.” But maybe San Francisco’s soul is just being laid out on Instagram now. Tech workers don’t love the city? A million pics of the Golden Gate Bridge, Four Barrel coffees and Giants games show otherwise.
5 A movie and the limitations of the US President (Irfan Husain in Dawn) As thousands demand that he hang the producer of the film Innocence of the Muslims, and enact laws to prevent others from carrying out similar acts of blasphemy, the US government is actually quite impotent in the matter. Despite being the most powerful man on the planet, in reality the president of America’s powers to act domestically are very limited.

In this case, the First Amendment to the US constitution specifically guarantees the freedom of speech to all American citizens. To enact a law limiting this fundamental right, the amendment would have to be altered, and for that, Obama needs a far bigger Democratic majority in the federal and state legislatures than he enjoys.
An indication of the limits to Obama’s powers lies in the fact that Google, the owner of the video website YouTube, where clips from the film first appeared, has refused the government’s request to take down the offensive footage. As an explanation, Google has referred the White House to its website laying down what is permissible on the site.

A fundamental difference between Western and Muslim perceptions is the fact that most Muslims belong to states that are, or until recently were, authoritarian. They just cannot believe that an American president cannot issue orders to lock somebody up when he wants to. In their experience, rulers can do anything they feel like to their citizens.
6 Sam Becile and imbeciles (Pinky Daniels in Khaleej Times) They say his name is Sam Becile, and he has eight personas, that‘s eight aliases. I have named him I. M. Becile. He is the coward who posted a clip from his outrageous film that turned the world into a sad, confused place. Freedom of speech he claimed, it’s in the American Constitution.  Really? And some innocent people have to pay for your right to make a mockery of freedom of speech? Like our dead ambassador in Libya who loved the Middle East, and whose people loved him back. Like the four other Americans who were killed in the protest. And the others, for there are others and there will be more sadly.

Shame and baloney I say. Here in America we do not use the so-called ‘N’ word. It is an insulting, ugly description of our African Americans. And, if you do use the ‘N’ word, be prepared to pay the price pal because there will be one. We won’t go into the terror at the Wisconsin Gurdwara that was the result of ignorance and fanaticism, yes that too.
It’s all too depressing to say the least. What’s more this is an election year and our President Barack Obama is trying hard to be the best he can for the sake of the people, both here and elsewhere. Now he, and to be fair, his opponent, are stuck with the actions of an imbecile.

Thursday, September 20, 2012

Global slowdown is in the air; Quantitative easing isn't magic; Books in times of war; Is teleworking driving us crazy?

1 Global slowdown in the air (The Guardian) The prospect of a synchronised recession across the global economy looms larger after news that China's factory output shrank for an 11th straight month, Europe's recession intensified and the manufacturing sector in the US had its weakest quarter in three years. Four years after the collapse of Lehman Brothers triggered the biggest slump since the 1930s, a range of gloomy data highlighted the struggle of policymakers to boost activity.
Analysts said Europe's sovereign debt crisis, high commodity prices, the legacy of the financial collapse and tension between the world's three biggest economies had soured the economic environment since the start of 2012.

Japan, involved in a territorial row with China over disputed islands, reported a drop in exports for a fourth month, leaving the country on course in 2012 to run a trade deficit for a second year. Meanwhile, a flash estimate of US industry in the third quarter from Markit showed that output has barely been rising over the summer.
"Manufacturing isn't looking good," said David Sloan, economist at 4Cast in New York. "The global situation is a restraint on the US economy. "Certainly, there is not going to be much growth in Europe. Growth in Asia, and China in particular, is slowing down, so US growth is going to have to be domestically generated."

Analysts were particularly worried about the big fall recorded in France, seeing it as confirmation that even Europe's biggest economies were not immune from the knock-on effects of the debt crisis. Although Germany put in a stronger than expected performance, financial markets are braced for official growth figures to show that the eurozone contracted by 0.3-0.4% in the third quarter.
2 Quantitative easing isn’t magic (James K Galbraith in The Guardian) Quantitative easing, the third tranche of which was announced in the US last week (QE3), is just a fancy phrase for buying bonds, notably mortgage-backed-securities, in which operation the Federal Reserve takes assets from the banks and gives them cash. This raises the bond price and lowers the yield. It also tends to boost stock prices – very nice for people who own stock – and it can spur mortgage refinancing, improving the cashflow of solvent homeowners.

And the effect on the economy of all this is? Mostly indirect and quite small. People don't generally spend capital gains as windfalls. Saving on mortgage debt helps to support spending but some of it goes to paying down other debts. People who are already underwater on their mortgages can't refinance anyway, and are not affected. Yes, there is some effect. But powerful stimulus, this is not.
Meanwhile, the European Central Bank is buying the dregs of the European bond market, propping up their price. The operation is similar to QE but the help for the economy is even less. Mario Draghi, the bank chief, aims to save the euro, not the eurozone; his conditions actually prevent beneficiaries from using the money they save; in fact, to get the aid they must spend less. So long as this goes on, unemployment, budget deficits and debt will get worse. It's no surprise that sensible countries refuse the deal for as long as they can.

What we need instead, today, is a candid review of what central banks cannot do. Yes, they can usually forestall panic. Yes, for better or worse they can keep zombie banks alive. No, they cannot bring on economic recovery or solve any of our deeper economic problems, from unemployment and foreclosures in America to unemployment and economic collapse in Greece and elsewhere. The sooner we stop thinking of central bankers as wizards and magicians, the better.
3 Books in times of war (Zubeida Mustafa in Dawn) A children’s literature festival in Quetta sounds like a contradiction in terms. Quetta is in Balochistan and one doesn’t have to be reminded that the province is in the grip of a violent insurgency. The festival amounts to making a political statement: children need peace. We knew that whatever the state of security, life has to go on. Yet one could not turn a blind eye to the tight security which in turn made one feel insecure. The event was not advertised and was reported in the media only after the show was over.

Death haunts the hills and valleys, the towns and villages. The Human Rights Commission of Pakistan titled its recent report on Balochistan Hopes, Fears and Alienation which captures the emotions being generated by the crisis. How is this affecting the children? No one has time to really address the issue. The impact of violence on the child’s education, health and family life has not been documented sufficiently. And no one speaks of what violence does to a child’s mind.
Against this backdrop the proposal to hold the Children’s Literature Festival in Quetta was a courageous move and an act of humanism. It needs a woman to think of the children. On this occasion there were two women with a third prodding them on.  Ameena Saiyyid of the Oxford University Press and Baela Raza Jamil of Idara-i-Taleem-o-Agahi are the brains behind the idea of a children’s literature festival, the first of which was held in Lahore last November. Zobaida Jalal, a former education minister, now an MNA and the founder of the Female Education Trust, suggested Quetta as the venue and mobilised local support.

4 Is teleworking driving us crazy? (BBC) As the boundaries between work and family life become increasingly blurred in the "always-on" era of digital communications, what psychological pressure does this put on us and our relationships with partners and families? A study by the US not-for-profit organisation WorldatWork indicated the number of people working from home or another remote location for an entire day at least once a month fell from 33.7 million in 2008 to 26.2 million in 2010. When the job market is tough, it seems workers fear out of sight really does mean out of mind. The issue particularly affects younger, less established workers.
In a major study into the wellbeing of mobile workers conducted for iPass, a network provider, Dr Carolyn Axtell, senior lecturer at Sheffield University's Institute of Work Psychology and Management, found more than a quarter of respondents said they worked 15 to 20 hours extra a week, largely because technology enabled them to do so, a trend "likely to have significant repercussions for work-life balance and employee well-being".

A third of these workaholics said they had logged on even while on holiday and that this was expected of them by managers and colleagues, leading to greater stress and poorer quality sleep. In turn, this was having a negative impact on family relationships.

Wednesday, September 19, 2012

Greece embarks on firesale; Nanny state & mollycoddling business; French cartoons inflate film tension; Arctic sea ice sets new low

1 Greece embarks on firesale (The Guardian) When you hit hard times, it is time to pawn or part with the family silver – and an unprecedented clearout is now under way in Athens. Greece has announced it will sell anything it can do without – and in the case of the debt-choked nation that means letting go of islands, royal palaces, prime real estate, marinas, airports, roads, the state-owned gas company, lottery and post office. Indeed anything, really, that can be sold.
This week, the nation learned the downsizing would also include diplomatic residences abroad – starting with the Victorian townhouse that was once the Greek consul general's residence in London. The sell-off emerged just a day after Athens's finance minister revealed what most Greeks feared but had never been officially told – that with national income projected to fall 25% by 2014 their economy is not just shrinking but slipping inexorably into a 1930s-style Depression. And officials are now working frantically to get the mother of all firesales off the ground.

For potential buyers of ambassadorial homes and consul's quarters, the good news is that the foreign ministry is fully aware of what and where the properties are – unlike the Greek state, which until recently was still struggling to attain an inventory of what it actually owned given the lack of a proper land registry.
Since the outbreak of Greece's great economic crisis in late 2009, the country's diplomatic presence abroad, like so much else, has been dramatically scaled back as governments have sought to rake in expenditure. The consulate in London, home to a thriving Greek community, was one such victim.

2 Nanny state & mollycoddling business (Zoe Williams in The Guardian) The youth contract is one of those initiatives that made very little impression until a select committee started worrying about it. In its report, the committee concludes that it's well-intended but probably won't meet its own targets – of 160,000 wage incentives and 250,000 additional work experience places.
Both of those phrases make me think of money, either in the form of a free person, or in the form of actual money going to the employer. Sure enough, the "wage incentives" amount to a government grant of £2,275 for employing someone aged 18-24 for more than 26 weeks.

It has been inexorable, this move to shift the cost of training away from the employer on to the young person. As it becomes clear that people at the start of their careers often cannot front this cost, the government steps in; anything to keep the cost of training away from the employer. Well, sure, in a kingdom of the unproductive, the half-arsed hirer is king – but this new maths, where the under-24s are worth so little that even taking them on unpaid amounts to a social service, has an attendant narrative.
The advice leaflet aimed at employers begins: "For some young people a lack of understanding of the working world is a significant barrier to finding and sustaining employment." It's interesting: when did young people ever understand the working world? The subtle but persistent message is that young people are getting steadily worse at the transition from education to work; this is then amplified by "business leaders" who deliver puzzling broadsides about how this generation looks scruffy and can't spell.

The problem with business leaders, apart from the way they overpay themselves and underpay everybody else, is that they rarely feel the need to stand up their claims. The world is their golf club. They simply make a statement about, say, grade inflation or "young people's attitudes", and its very provenance makes it true.
Finally, we can't permanently write off the younger generation as constitutionally useless and reframe the employer's need for labour as civic generosity. This would be unjust and illogical – not all jobs need experience, but they still need doing, and if they need doing, they warrant paying.

3 French cartoons inflate film tension (San Francisco Chronicle) France has stepped up security at its embassies across the Muslim world after a French satirical weekly revived a formula that it has already used to capture attention: Publishing crude, lewd caricatures of Islam's Prophet Muhammad. Wednesday's issue of the provocative satirical weekly Charlie Hebdo, whose offices were firebombed last year, raised concerns that France could face violent protests like the ones targeting the US over an amateur video produced in California that have left at least 30 people dead.
The drawings, some of which depicted Muhammad naked and in demeaning or pornographic poses, were met with a swift rebuke by the French government, which warned the magazine could be inflaming tensions, even as it reiterated France's free speech protections. The principle of freedom of expression "must not be infringed," Foreign Minister Laurent Fabius said.

Anger over the film "Innocence of Muslims" has fueled violent protests from Asia to Africa. In the Lebanese port city of Tyre, tens of thousands of people marched in the streets Wednesday, chanting "Oh, America, you are God's enemy!" The controversy could prove tricky for France, which has struggled to integrate its Muslim population, Western Europe's largest. Many Muslims believe the Prophet Muhammad should not be depicted at all — even in a flattering way — because it might encourage idolatry.
4 Arctic sea ice sets new low (The New York Times) The drastic melting of Arctic sea ice has finally ended for the year, scientists announced Wednesday, but not before demolishing the previous record — and setting off new warnings about the rapid pace of change in the region. The apparent low point for 2012 was reached Sunday, according to the National Snow and Ice Data Center, which said that sea ice that day covered about 1.32 million square miles, or 24%, of the surface of the Arctic Ocean. The previous low, set in 2007, was 29%.

When satellite tracking began in the late 1970s, sea ice at its lowest point in the summer typically covered about half the Arctic Ocean, but it has been declining in fits and starts over the decades. “The Arctic is the earth’s air-conditioner,” said Walt Meier, a research scientist at the snow and ice center, an agency sponsored by the government. “We’re losing that. It’s not just that polar bears might go extinct, or that native communities might have to adapt, which we’re already seeing — there are larger climate effects.”
Scientists consider the rapid warming of the region to be a consequence of the human release of greenhouse gases, and they see the melting as an early warning of big changes to come in the rest of the world. Some of them also think the collapse of Arctic sea ice has already started to alter atmospheric patterns in the Northern Hemisphere, contributing to greater extremes of weather in the United States and other countries, but that case is not considered proven.

Tuesday, September 18, 2012

Don't tell anyone, but the stimulus worked; What if the US falls of the fiscal cliff; Greek economy may shrink 25% in 2014; The 'isms' of yesterday

1 Don’t tell anyone, but the stimulus worked (The New York Times) The reputation of the stimulus is meticulously restored from shabby to skillful in Michael Grunwald’s important new book, “The New New Deal.” His findings will come as a jolt to those who think the law “failed,” the typical Republican assessment, or was too small and sloppy to have any effect. On the most basic level, the American Recovery and Reinvestment Act is responsible for saving and creating 2.5 million jobs.
The majority of economists agree that it helped the economy grow by as much as 3.8%, and kept the unemployment rate from reaching 12%. The stimulus is the reason, in fact, that most Americans are better off than they were four years ago, when the economy was in serious danger of shutting down.

But the stimulus did far more than stimulate: it protected the most vulnerable from the recession’s heavy winds. Of the act’s $840 billion final cost, $1.5 billion went to rent subsidies and emergency housing that kept 1.2 million people under roofs. (That’s why the recession didn’t produce rampant homelessness.) It increased spending on food stamps, unemployment benefits and Medicaid, keeping at least seven million Americans from falling below the poverty line.
Mr. Grunwald argues that the recovery act was not timid, but the administration’s effort to sell it to the voters was muddled and ineffective. Not only did White House economists famously overestimate its impact on the jobless rate, handing Mr. Romney a favorite talking point, but the administration seemed to feel the benefits would simply be obvious.

2 What if the US falls off the fiscal cliff (The Guardian) In 2011, Congress passed the Budget Control Act. It was the seed of what we now call the fiscal cliff. Here's what to expect: shortly after 1 January, unless Congress intervenes beforehand, we'll see two things happen: $100bn of automatic spending cuts, along with the demise of a batch of tax cuts that have been a crutch for the weak economy – the Bush-era tax cuts that have kept taxes low for eight years; and Obama's 2% payroll-tax holiday.
Each of these separately – tax hikes or spending cuts – would not be enough to dent the US economy by much. But together, the spending cuts and the tax hikes are enormous. The Committee for a Responsible Federal Budget and the Congressional Budget Office both expect that a recession would immediately follow if Congress does not address the fiscal cliff.

The spending cuts, for instance, will add up to $100bn pulled out of the economy by the government, in everything from the defense budget to Medicare. The idea is to reduce the federal deficit by $1tn over 10 years. The tax hikes will return tax rates to what they were before 2003, which means the top tax rate for households could be over 39%, according to press reports.
There is another aspect to the fiscal cliff that neither the CBO nor Congress can solve for, and it is the biggest: the effect on the financial markets. Four years after the financial meltdown of 2008, the markets are at new highs, both in stocks and bonds. The benefit of a strong stock market has been elusive to regular Americans – who need jobs rather than boisterous stock portfolios – but it has been a boon for banks and companies, which have found it easy to finance their operations.

Most insiders expect Congress to reach an agreement on avoiding the fiscal cliff … at the last moment. That's the way lawmakers have addressed everything from the passing of the Tarp bank bailouts to the debate over raising the debt ceiling last year. But there is a cost to this last-minute thinking, and it is not Congress, but workers and companies, that have to pay the price.
3 Greek economy may shrink 25% in 2014(The Guardian) The ailing Greek economy is on the verge of a 1930s-style Great Depression, as the Athens government predicted a 25% fall in GDP by 2014, putting intense pressure on the EU to relax the terms on the country's €130bn bailout package. Finance minister, Yannis Stournaras, said a decline in tax revenues and spiralling unemployment will deepen the country's four-year recession, which critics of the EU's stance said could lead to a recession as long and deep as America's pre-war decline.

"The cumulative reduction (of gross domestic product) since 2008 is just under 20% and is expected to reach 25% by 2014," he told a Greek–Chinese business forum in Athens. "The time frame for the adjustment, the conditions of the real economy should be taken into consideration," he said. "Otherwise there is a great risk of prolonging the negative consequences for the economy and society."
The finance minister made the plea after revealing that while Greece would meet its nominal 2012 deficit reduction targets, its primary deficit would reach 1.5% of GDP compared to the projected 1% following a sharp decline in the economy's output.

4 The ‘isms’ of yesterday (Suresh Kumar in Khaleej Times) For a while, the Reserve Bank of India (RBI) ploughed a lonely furrow. Arguably, they revel in using blunt monetary instruments like hiking interest rates and restricting credit to certain sectors. Sadly, these are like broad-spectrum antibiotics i.e. they kill the good and the bad.  The real inflation-propellers in India are the fiscal and trade deficits. The former is caused by profligate non-productive expenditure of the government and the latter is fuelled by galloping gold imports, among other things.
Ultimately, the jury is out across geographies as to whether such quick-fixes do indeed help. Much of the malaise that we see, stem from structural and chronic factors that are fiscal / budget deficits made worse by bloated bureaucracies in all these big countries. The Dubai-Singapore city state models, on the other hand, represent a refreshingly workable approach.  Such city states tend to operate efficiently, as Singapore Inc. or Dubai Inc., thanks to the absence of political interference, multiple layers of bureaucracy and hands-on decision-making at the helm of affairs.

Ultimately, growth, development and economic progress are agnostic to the obsessions of the 19th and 20th century i.e. the various ‘isms’ – socialism, communism, statism, pluralism etc. These dogmas have dogged entire generations with sub-optimal solutions to what are simpler issues of efficiency and effectiveness in public services, manufacturing and trade, across the entire economic spectrum.
The ‘isms’ of yesterday ought to be replaced by robust economic models such as Public-Private Partnership (PPP) in vital sectors and competitive enterprises of various corporate forms. These are more equitable and superior to unbridled capitalistic and public-markets-driven economies. Rather than relying on the gyrations of the stock and bond markets to initiate economic stimuli, actionable PPPs deliver results — pro and anti-cyclically.  But that’s another story!

Friday, September 14, 2012

US debt rating cut to AA-; Arctic sea ice at record low; India's cautious welcome to foreign retailers; Video insult rage spreads; Brazil growth forecast cut to 2%

1 US debt rating cut to AA- (San Francisco Chronicle) Egan-Jones, an independent credit-research firm, downgraded its rating on US government debt to AA- from AA, citing the Federal Reserve's plans to try to stimulate the economy. The credit rating agency said the Fed's plans to buy mortgage bonds will likely hurt the economy more than help it. The plan will weaken the value of the dollar and push up prices for oil and other commodities, Egan-Jones said. That would leave less for consumers to spend on other things.
But at the same time, Egan-Jones warned that the federal government's borrowing costs are likely to slowly rise as the global economy recovers. On Thursday, the Fed said it would buy $40 billion of mortgage bonds a month to help the economic recovery. It's the second time the Haverford, Pa. shop has downgraded US government debt in five months. In April, Egan-Jones lowered its rating on the US to AA from AA+. It stripped the US of a top AAA rating in July 2011.
Standard & Poor's stripped the government of its "AAA" rating on its bonds in August 2011. Fitch Ratings issued a warning of a potential downgrade.

2 Arctic sea ice at record low (The Guardian) Sea ice in the Arctic has shrunk to its smallest extent ever recorded, smashing the previous record minimum and prompting warnings of accelerated climate change. Satellite images show that the rapid summer melt has reduced the area of frozen sea to less than 3.5 million square kilometres this week – less than half the area typically occupied four decades ago.
Arctic sea ice cover has been shrinking since the 1970s when it averaged around 8m sq km a year, but such a dramatic collapse in ice cover in one year is highly unusual. A record low in 2007 of 4.17m sq km was broken on 27 August 2012; further melting has since amounted to more than 500,000 sq km. Scientists predicted that the Arctic Ocean could be ice-free in summer months within 20 years, leading to possibly major climate impacts. "I am surprised. This is an indication that the Arctic sea ice cover is fundamentally changing. The trends all show less ice and thinner ice," said Julienne Stroeve, a research scientist.

3 India’s cautious welcome to foreign retailers (The Guardian) India's government has opened the country's retail sector to foreign supermarkets, a sign that long-awaited major reforms regarded as vital to relaunch the country's flagging economy may now be pushed through. Several major international brands such as Tesco, Carrefour and Walmart have been hoping to set up shop in the emerging economic power to exploit a £300bn retail market.
Other long-awaited moves included measures to allow foreign airlines to take stakes of up to 49% in India's troubled domestic domestic airlines and a sell-off of state-owned companies. A proposal has also been cleared which will allow overseas investors to buy up to 74% of broadcast carriage services, such as cable and internet TV.

The government of prime minister Manmohan Singh, the 79-year-old economist credited with reforming India's economy in the early 1990s, has been under fierce attack in recent months following a series of corruption scandals and a failure to halt sliding growth, tackle a growing fiscal deficit or support a weakened Indian rupee.
The new measure to allow overseas retailers into India is controversial. Critics claim it will destroy the livelihoods of millions of shopkeepers - including 15m "kirana" - owner-managed general shops and stalls. Currently most urban Indians get their groceries from corner stores, markets or barrows. Supporters say the move - which will allow foreign firms to own 51 % of ventures within India and sell directly to shoppers for the first time - will bring down soaring prices and help modernise India's ramshackle distribution systems.

4 Video insult rage spreads to 20 countries (The New York Times) Anti-American rage that began this week over a video insult to Islam spread to nearly 20 countries across the Middle East and beyond on Friday, with violent and sometimes deadly protests that convulsed the birthplaces of the Arab Spring revolutions, breached two more US embassies and targeted diplomatic properties of Germany and Britain.
The broadening of the protests appeared to reflect a pent-up resentment of Western powers in general, and defied pleas for restraint from world leaders, including the new Islamist president of Egypt, Mohamed Morsi, whose country was the instigator of the demonstrations that erupted three days earlier on the anniversary of the Sept. 11, 2001, attacks.

The wave of unrest not only increased concern in the West but raised new questions about political instability in Egypt, Tunisia and other Middle East countries where newfound freedoms, once suppressed by autocratic leaders, have given way to an absence of authority.
5 Brazil growth forecast cut to 2% (BBC) Brazil has cut its growth forecast for this year as the global downturn hits exports and rising local debt levels weigh on consumption. The country will grow 2% this year, down from its previous forecast of 3%, Finance Minister Guido Mantega predicted. That would be the weakest annual performance since 2009 and a sharp slowdown from growth of 7.5% in 2010. Brazil became the world's sixth-largest economy this year, overtaking the UK.

President Dilma Rousseff recently launched the first in a series of measures that could inject up to $50bn (£32bn) into the economy over the next five years. The plan included privatising about 14,000km of railways and roads, followed by selling ports and lowering energy costs. Expensive energy, poor infrastructure and increasing labour costs - known as "Custo Brasil" or the "Brazil Cost" - have weighed on growth, analysts say.