1 UK austerity may extend to 2018 (Andrew Atkinson, Bloomberg) Chancellor of the Exchequer George Osborne may have to extend his austerity program by another year to 2018 after a deterioration in Britain’s economic prospects, according to the Institute for Fiscal Studies. The London-based research group said Osborne is on course to miss his target of seeing the burden of government debt falling by 2015, and further tax increases and spending cuts may be needed to erase the structural deficit in five years, the mainstay of his economic strategy. It means the total squeeze may last eight years.
“The outlook for the UK economy has deteriorated and government receipts have disappointed by even more than this year’s weak growth would normally suggest,” said IFS Deputy Director Carl Emmerson. Osborne may face another hole in the public finances, requiring a further 11 billion pounds ($18 billion) of welfare cuts or tax increases on the top of the 8 billion pounds of welfare reductions already under discussion, according to the IFS. Osborne had originally planned for the cuts to end by the time of the 2015 general election.
Even under an “optimistic” outlook, debt will continue to rise as a share of GDP in 2015-16 instead of falling, the IFS said. It called on Osborne to abandon his target rather than tighten policy to meet it, saying it had little “to commend it in terms of the economics of managing the public finances.” Net debt climbed to 1.07 trillion pounds last month, or 67.9% of GDP, according to the Office for National Statistics.
2 Staying up in a down world (The Guardian) American motivational speaker and author Zig Ziglar, who died last week aged 86, was a legend in many parts of the US. The self-styled ‘Master of Motivation’ was a direct link to the world of Dale Carnegie and Norman Vincent Peale, authors who rose to prominence in the aftermath of the Great Depression with the hopeful thought that, given the right mindset, a happy and meaningful life might be possible despite the odds. It was an individualist message but not a mean-spirited one. Nor was it delivered without humour. “People often say motivation doesn’t last,” Ziglar often said, in response to his critics. “But neither does bathing. That’s why we recommend it daily.”
The point of positive thinking, Ziglar insisted, was to provide motivation for doing hard work; nothing was possible without labour. Unbridled positive thinking fuelled by the self-help industry, the social critic Barbara Ehrenreich has argued, may also have helped bring about our current financial crises. A belief that success must be both guaranteed and easy is an excellent path, if you’re an investment banker, to catastrophic failure. But Ziglar’s claim was never that life could be effortless.
Nonetheless, the Ziglar approach seems to be on its way out, and this may be just as well. A powerful body of psychological research testifies to the fact that the techniques of positive thinking are often counterproductive — that repeating upbeat affirmations, for example, can make people with low self-esteem feel worse, or that visualising the successful completion of a goal can sometimes make it less likely to be achieved.
Meanwhile, the challenges we face, from economic to environmental crises, are surely too collective and complex to benefit much from a philosophy consisting solely of exhortations to individual hard work, generosity and cheer.
3 Degree inflation? More jobs require BAs (Catherine Rampell in The New York Times) Despite the sob stories you hear about unemployed college graduates, bachelor’s degrees have actually gotten more valuable over time. The wage gap between the typical college graduate and those who have completed no more than high school has been growing for the last few decades. In the late 1970s, the median wage was 40% higher for college graduates than for people with more than a high school degree; now the wage premium is about 80%.
Some of that wage premium has to do with the changing nature of American jobs and the skills (and social networks) attained in college. Some of it may have to do with a change in the mix of students who go to college and those who don’t. As college enrollment becomes more expected of high school students — as of October 2011, 68.3% of 2011 high school graduates were enrolled in college — the shrinking group of students forgoing college may have other characteristics that are associated with lower wages. At the very least it seems as if more employers are using bachelor’s degrees as a signal of drive or talent, regardless of the relevance of the skills actually learned in college.
4 The bizarre tale of John McAfee (Khaleej Times) Prostitutes, gun-toting bodyguards, experimental drugs, police raids, poisoned dogs, murder, elaborate disguises, cloak-and-dagger interviews: welcome to the incredible world of John McAfee. In a plotline worthy of a Hollywood thriller, the American anti-virus software pioneer went on the run from his Belize island home hours after his Florida expat neighbor Gregory Faull was murdered early on November 11. With 20-year-old girlfriend Sam in tow, McAfee has evaded capture for more than three weeks.
In the McAfee story, the truth is an
enigma. Did he actually commit the crime? If he did, why leave such an
elaborate e-trail? If he didn’t, why go on the run at all? A successful Silicon
Valley entrepreneur who cashed out to live the life of an adventure seeker,
McAfee amassed huge wealth from the antivirus software that bears his name. He
decamped to Belize in 2009 after losing an estimated $96 million of his $100
million fortune due to bad investments and the financial crisis. Jeff Wise, a
science and adventure writer who has known McAfee for years, told Fox News that
his increasingly odd behavior earlier this year had seen him become estranged
from the US expatriate community in Belize.
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