1 US economy losing steam (Jason Lange in Khaleej Times) The number of Americans filing new claims for unemployment benefits climbed last week at the fastest pace in six months, the Labour Department said. Initial claims for state unemployment benefits jumped by 32,000 to 360,000. That was the biggest jump since November and confounded analysts’ expectations for a more modest increase.
The US economy has shown signs that growth slowed late in the first quarter and in April as Washington’s push to trim the budget deficit weighed on consumers and businesses. The federal government hiked taxes in January and initiated sweeping budget cuts in March. Data on jobless claims has been a relative bright spot in the US labour market, and analysts will be cautious over reading too deeply into one week of dour data, which showed claims at their highest since late March.
Housing has also been an economic bright spot, but a separate report showed ground-breaking for new US homes plummeted more than expected in April. The Commerce Department said starts at building sites for homes fell 16.5% last month to a 853,000-unit annual rate. Still, permits to build new homes increased, a reassuring reminder that the housing sector could still contribute to the economic recovery.
A sharp drop in gasoline costs led US consumer prices to tumble in April by the most in over four years, while a gauge of underlying inflation was also weak. The Labour Department said its Consumer Price Index slipped 0.4%, the biggest decline since December 2008 when America was suffering some of the darkest days of its financial crisis. Much of April’s decline in prices was fuelled by an 8.1% dive in gasoline costs, the biggest decline since December 2008.
2 Mulling capitalism’s future (Chrystia Freeland in The New York Times) One of the most urgent questions in economics today is the connection between inequality and growth. There are two main and contradictory ideas about how the relationship might work. One is that inequality is the price of robust economic growth. If the private sector is thriving, the most successful capitalists will be getting very rich. The other view is that rising inequality is not a symptom of a fast growing economy or an incentive that will help create one. Instead, too much income inequality crushes economic growth.
There are different arguments for why that might
happen. One is that high income inequality creates an unstable system that is
vulnerable to costly booms and busts. Another is that when too much of the
income goes to the very top and not enough goes to the middle, spending slumps,
putting a brake on growth.
David Howell, a professor of economics at The New
School in New York, has written a draft paper that investigates the first
argument. Mr. Howell argues that the US and Britain have acted over the past
three decades on what he calls the laissez-faire theory, that the equation of
rising inequality and increasing gross domestic product is correct. As he puts
it, “the laissez-faire case for high inequality is grounded in the belief that
growth in output and employment depends mainly on strong incentives to work and
invest.”
He tested that view by comparing the US and Britain to
their peers. He asked whether “compared to other rich countries, US income
inequality has paid off in relatively high growth.” His answer: not
particularly. He finds that “there is no simple correlation between our
measures of growth and income inequality.” Lars Osberg, an economist at
Dalhousie University in Nova Scotia, argues that a growing chasm between those
at the very top and everyone else imperils the overall economy. His worry is
financial instability.
“Go back to the
1920s or the 1870s and economists were worried about the stability of the
capitalist system,” Mr. Osberg said. “One of the things the 1930s experience
teaches us is there are some catastrophic outcomes which can happen.” The investing class and the academic world are
focused on those dangers. “Can capitalism survive?” is one of the trendiest
conference topics. So far, at the ballot box and on the street, this question
has not been as salient. That does not mean it will not be in the future, and
in ways we cannot predict.
3 Dell profit falls 79% (BBC) Dell has reported a 79%
slide in net profit, underlining a fall in personal computers sales as more
consumers shift to smartphones and tablets. The PC maker's net profit fell to
$130m in the three months to 3 May, on revenue down 2% to $14bn. Dell is in the
middle of a dispute between founder Michael Dell and two of its biggest
shareholders. Mr Dell wants to take the company private, but some investors
oppose the plan.
4 India’s agrarian crisis (Neeta Lal in Khaleej Times) Farmers — once regarded as the heart and soul of India’s social and economic fabric — are a dwindling tribe today. According to a recent census by the Registrar General of India, the number of farmers in India has plummeted by nine million during the decade 2001-2011, and hovers at 118.7 million today.
Although
agriculture constitutes only 21% of India’s GDP, its importance in the
country’s economic, social, and political arenas goes well beyond this
indicator. The rural areas still host over 70% of India’s 1.1 billion people, a
majority of whom are poor. Most of these rural poor depend on rain-fed
agriculture and fragile forests for their livelihoods. Sustained agricultural
growth in the 1990s whittled down rural poverty to 26.3% by 1999/2000. Since
then, however, the deceleration in agricultural growth has been worrisome.
India’s rice yields are one-third of China’s and about half of those in Vietnam
and Indonesia. With the exception of sugarcane, potato and tea, the same is
true for most
Who’s to blame?
The ruling political dispensation has been focusing on reducing poverty by
raising agricultural productivity. However, given the current scenario,
agricultural economists suggest that India needs bold policy initiatives to
shift gears from the existing subsidy-based model that’s no longer tenable, to
a durable architecture for a highly productive, internationally competitive and
diversified agricultural sector.
Raju Das, a
developmental studies professor at York University in Canada, diagnoses that
farmer suicides represent part of a “broader political-economic problem.” Even
now, seven decades after the British left, 70% of India’s farmland depends on
the monsoon. It seems the Indian government’s priority is now clearly the
country’s new urban high-tech based economy. India’s transformation from a
rural economy to an urban-based manufacturing and technology behemoth, has
resulted in this paradigm shift. So unless the State begins addressing pressing
problems like irrigation, rural credit, and regulation of the business
practices of multinational corporations, among other things, the Indian farmers’
crisis will continue.
Islamic denotes something/ somebody as mandated by Islam or having Islamic credentials to reflect Islamic character. The word Muslim, on the other hand, denotes an individual who happens to be a Muslim. It does not show what that individual did that was Islamic.
What this does is that it allows historians and scientists to be relatively free to discuss, examine and judge that person’s acts of commission and omission. When a strong epithet of Islamic is added to a concept or a person, it immediately exalts the entity to a ‘sacred’ status and makes it difficult if not impossible to examine it/him/her critically, using or applying the conventions of historical analysis/critical discourse analysis.
Interestingly enough, now this epithet (Islamic) is being used with so many personalities or concepts that practically anything done by a Muslim ‘hero’ or a ruler becomes sanctified and he/she becomes infallible. This appears quite contrary to the historical epochs that we call formative. In sum, writers should use the terms ‘Islamic’ or ‘Muslim’ discerningly which can prevent standardisation of everything Muslims do or don’t do in a particular society at a particular time and in a particular context.
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