1 Falling oil clips 7,000 jobs at Chevron (Sam
Thielman in The Guardian) The plummeting price of oil has ripped into the once
booming US energy industry so dramatically that the oil sector has laid off
87,000 people so far this year. Chevron became the latest company to dismiss
workers, announcing that it would lose between 6,000 and 7,000 jobs – the
second four-figure round of dismissals at the company since July.
The company is cutting investment by a fourth. “With
the lower investment, we anticipate reducing our employee workforce by
6,000-7,000,” the chairman and CEO, John Watson, said in a statement.
Oil prices have fallen from $115 just over a year
ago to under $50 this month causing woes across a once-booming industry.
Cheaper energy prices fuelled a 64% drop in third-quarter profit at Chevron,
the US’s second-biggest oil company behind Exxon Mobil. Earlier this week Royal
Dutch Shell announced an $8bn loss, caused in part by lower energy prices.
2 How mergers damage the economy (The New York Times
editorial) In many industries, like airlines, telecommunications, health care
and beer, mergers and acquisitions have increased the market power of big
corporations in the last several decades. That has hurt consumers and is
probably exacerbating income inequality, new research shows.
A paper by two economists, Jason Furman and Peter
Orszag, says that consolidation might have contributed to the trend of some
businesses earning “super-normal returns” that are about 10 times as large as
the median returns, up from three times in the early 1990s. This trend may have
driven the rise in income inequality by increasing the income of executives and
shareholders of those businesses relative to everybody else.
The George W. Bush administration, for example,
allowed Whirlpool to acquire Maytag even though the two companies controlled
three-quarters of the market for some home appliances. The Obama administration
has also waved through some big mergers. Officials approved two big airlines
mergers — United and Continental, and American and US Airways. Just four
national airlines now carry the vast majority of domestic passenger traffic,
down from six when Mr. Obama came into office.
With fewer competitors to worry about, consolidated
businesses can raise prices more easily without worrying about losing
customers. Mergers tend to lead to more mergers. In the health care industry,
big insurers like Anthem and Aetna say they need to get bigger to have more
leverage in negotiations with hospitals and doctors’ practices that have become
bigger through acquisitions in recent years.
The presence of a few dominant companies in an
industry also makes it harder for entrepreneurs to start new businesses in that
sector. The rate at which new businesses are created in the economy as a whole
has been steadily falling since the 1970s, according to the Census Bureau. In
2013, the growth rate was 10.2 percent, down from 17.1 percent in 1977.
Given the already high consolidation in many
industries, government officials have to be vigilant about investigating
businesses that abuse their dominant position. In extreme cases, antitrust laws
allow officials to seek the breakup of businesses, as the Justice Department
did with the old AT&T monopoly in 1974. Markets work best when there is
healthy competition among businesses. In too many industries, that competition just
doesn’t exist anymore.
3 India intellectuals alarmed at intolerance (San
Francisco Chronicle) First writers then artists, followed by filmmakers,
historians and scientists. The chorus of Indian intellectuals protesting
religious bigotry and communal violence grows louder by the week with a single
message for Prime Minister Narendra Modi: protect India's tradition of
secularism and diversity.
Those protesting are angry and worried by a spate of
deadly attacks against atheist thinkers and minorities, and by Modi's relative
silence through it all. That silence appears to have encouraged some of his
party colleagues to make comments asserting Hindu pride and superiority.
Last week, more than 100 scientists, including some
of India's top nuclear physicists, space scientists and mathematicians,
expressed their anguish at the ways in which they said "science and reason
were being eroded in the country." The protest by scientists is
significant, given that most work for the government or in state-funded
organizations and so could risk being punished for speaking out.
The uproar among intellectuals began in late
September, when a village mob beat a Muslim man to death and put his son in
critical condition over rumors that their family was eating cow meat. In fact,
it had been a goat. There have been other incidents in recent years, including
the killings of three atheist scholars who had campaigned against religious
superstition, and more mob killings over rumors of cow slaughter or smuggling.
Many Hindus, who make up more than 80 percent of
India's population of 1.25 billion, consider cows to be sacred, and many states
ban the slaughtering of the animals. India has still largely been seen as
overwhelmingly tolerant, with a cacophony of cultures that have lived side by
side for centuries. Secularism is enshrined in its constitution.
Since taking office, however, Modi has said very
little on the subject of tolerance and diversity, even questioning why his
government should be called on to comment on local matters. Indian Culture
Minister Mahesh Sharma suggested that unhappy writers could stop writing if
they found the country's cultural climate not conducive to their work.
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