Winning and losing the war on poverty; Red tape tethers India projects; Tesla beats production forecasts

1 Winning and losing the war on poverty (Robert J Samuelson in Khaleej Times/Washington Post) We are awash in retrospectives of the “War on Poverty,” launched 50 years ago this month by Lyndon B. Johnson. In reality, we both won and lost the war on poverty. We won in the sense that programmes for the poor have dramatically reduced hardship and have kept millions from destitution. To those who think that Washington mainly serves “fat cats”, Ron Haskins of the Brookings Institution says: “Look at the numbers.” In 2011, he estimates federal spending dedicated to the poor averaged $13,000 for every person below the government’s poverty line, now $23,000 for a family of four.

The war on poverty is often branded a failure because the share of Americans below the official poverty line has barely budged. In 1982, at the end of a harsh recession, it was 15 per cent. In 2010, after the Great Recession, it was 15 percent. The trouble is that the official poverty rate is a lousy indicator of people’s material well-being. It misses all that the poor get — their total consumption. It counts cash transfers from government but not non-cash transfers (food stamps, school lunches) and tax refunds under the EITC.

People at the bottom aren’t well-off, but they’re better off than they once were. Among the official poor, half have computers, 43 per cent have central air conditioning and 36 per cent have dishwashers. But this wasn’t the war LBJ envisioned — and we lost that war, which aimed to catapult the poor into the economic mainstream. The root problem, Johnson said, was that many poor didn’t have “a fair chance to develop their own capacities”. The government would remove the obstacles holding them back through “better schools ... health ... training”.

This failed dismally. America remains a tiered society with millions at the bottom still living more chaotic and vulnerable lives. The government’s capacity to boost them into the mainstream was oversold. Worse, the breakdown of marriage and spread of single-parent households suggest that poverty may grow. Regardless of the causes and despite many exceptions, children in single-parent households face a harder future. They’re more likely to drop out of school, get pregnant before age 20 or be unemployed. Poverty becomes self-perpetuating. This tale of two wars has left the fight against poverty in a costly and unsatisfying stalemate. 

http://khaleejtimes.com/kt-article-display-1.asp?xfile=data/opinion/2014/January/opinion_January24.xml&section=opinion

2 Red tape tethers  India projects (Neha Thirani Bagri in The New York Times) Proposed in the early 1970s, the Mumbai Trans Harbor Link, a 14-mile series of pillars supporting an eight-lane highway and a rail line, was supposed to be an artery relieving pressure on India’s financial capital, while feeding a new city and fresh growth. The trouble is, it has never been built. Instead, the project , estimated to cost $1.5 billion, is both a symbol of India’s emerging economic aspirations and the entrenched bureaucracy hindering its development.

The Mumbai Trans Harbor Link is one of numerous infrastructure projects in India that are sorely needed to create economic growth but have stalled because of seemingly intractable red tape. Projects worth $110 billion have been delayed by difficulties in acquiring land, getting environmental and other regulatory approvals, and obtaining long-term financing, according to data compiled by a consortium of state-run banks last March.

As government officials in India increasingly find themselves embroiled in allegations of corruption, they have become wary of making swift decisions. While private sector spending on infrastructure has increased 10 times over the last decade, the government is seen as falling short in handling contracts and disputes.

 “India is caught in a dilemma where you have to lift the poor out of poverty, but while doing that you have to protect both the social and environmental after-effects,” said a senior Finance Ministry official. “It got to the point where numerous projects were mired in red tape and a potential investor in infrastructure was unclear when he would get his clearances.”

Since July, a committee started by Prime Minister Manmohan Singh has given fast-track regulatory approval to 125 previously stalled infrastructure and manufacturing projects worth $64 billion, but that is still considered inadequate. “This is not a solution for the industry’s problems. This is an exercise in crisis management,” said Madhu Terdal, chief financial officer of GMR Infrastructure, a Bangalore-based builder of airports, energy projects, highways and urban infrastructure.

http://www.nytimes.com/2014/01/15/business/international/indias-infrastructure-projects-stalled-by-red-tape.html?_r=0

3 Tesla beats production forecasts (David R Baker in San Francisco Chronicle) Tesla Motors blew past its own production forecast in the fourth quarter, building and delivering roughly 15 percent more cars than expected. The maker of luxury electric cars reported that it sold and delivered nearly 6,900 vehicles in the waning months of 2013, well above its forecast of 6,000. 

The announcement brings the Palo Alto company’s delivery total to 22,400 cars for the year. Revving up production without sacrificing quality was the company’s key focus last year. The timing of the announcement appeared designed to calm investors after reports surfaced that Tesla had recalled more than 29,000 of its cars, reports the company and CEO Elon Musk quickly labeled false.

 “No Tesla vehicles are being physically recalled by Tesla,” Musk wrote on Twitter. “The word ‘recall’ needs to be recalled.” Tesla investors seemed satisfied with the explanation, as well as the production news. The company’s stock rose 15.7 percent Tuesday to close at $161.27 per share.

http://blog.sfgate.com/energy/2014/01/14/teslas-production-jumps-stock-surges/