RE: THE WORLD ECONOMY IN 2035: Rasau Romeo

worldeconomy 2035



Parent Post

The next 20 years or so will be exciting in many ways, but especially economically. Americans bear witness to the political gridlock of Washington, D.C. and feel a sense of cynicism, and frustration. The problem is that while the U.S. dithers and its policies and its mindset remains static, the world moves on.

There are several countries that have ascended economically in the past 20 years and are hoping to build on that success in the next two decades. These countries, especially China, India, Brazil, have been amazing success stories, so much so that as of October 2014, China overtook the American economy, albeit in purchasing power and assumed first place. India will also follow China’s lead, harnessing the market potential of its massive population to become a sustained global economic power. The European Union will continue to underperform as a whole, in part because of an aging population but mostly because of economic policies that can often hinder poorer EU nations. The United States will eventually have to do some soul searching and decide whether it will continue with policies and practices that will continue to lead it down a path of even higher income inequality, a less educated populace and less respect on the world stage. Africa, while it still has many issues to overcome, has been making gains in certain keys areas such as childhood education, infant mortality, increased investment, resource extraction and more importantly: political stability, which may very well make it into the next economic “big thing”.

Economic projections cannot be made in a vacuum, so I also decided to look at other factors that can have an effect on how economies develop.

-First, military strength should be considered a major influence. There is nothing to suggest that the U.S. military would not remain the most dominant fighting force for the next few decades, however, it will certainly face more challenges. History has shown and as many great powers can attest (Rome, Great Britain, etc.): sooner or later, power wanes. China’s military prowess continues to grow and will no doubt be an even more formidable force in the next two decades. In addition, as more and more developing nations come online, they will require ever increasing amounts of fossil fuels; conflicts are almost certain to arise because of energy – or the lack thereof. The world as a whole will continue to militarize and this, sadly will have an effect on which economies succeed or falter.

-Poverty will also be a big factor, as the poor (by necessity) will refuse to be ignored and demand change, leading to some levels of instability in parts of Asia and South America.

-Population. It is estimated that in the next 20 years the world’s population will increase by about a fifth to nearly 9 billion souls. The issue of food and emerging diseases will no doubt be a major issue as well as sustainability. How will the planet be able to support 9 billion people who have very little regard for it?


-Climate change, the mother of all variables. Climate change for me brings to mind that idiom: “a lot of fingers, a lot of pies”. While it is worth noting that China and the U.S. came to an agreement just this week on greenhouse gas emissions (See: 2014 APEC summit), the fact is, it is too little too late. Climate change is upon us and what we need to do now is mitigate the effects as best we can. Weather has become more violent and unpredictable: droughts have and will continue to ravage sub-Saharan Africa, parts of Europe and central Asia, leading to decreased farmland. Rising water temperatures will continue to affect, and ultimately destroy sea life. In addition more rising sea levels will affect, shall we say more “noteworthy” nations than Kiribati, which as I type is sinking. Even more disturbing, is as the warmer temperatures melt the Arctic ice sheets, previously unattainable resources become attainable and more countries will move to stake their claim – as several already have, setting the stage for future conflict.

Why can’t a billion Chinese people rise up and overthrow the Communist Party and make China democratic?


Why can’t a billion Chinese people rise up and overthrow the Communist Party and make China democratic?
Kevin Wong
Kevin Wong

Imagining you have 2 options:
A. Enjoying the fast economic growth in your country every year, one of the best city infrastructure in the world, stable and safe society for personal career development, better education in China as well as opportunity sending kids to a foreign university for better education, and the ability of traveling around every year.

BUT, you do not have the right to elect your president directly.

B. Enjoying over 10 years chaos in your country during your golden age. Ruining the best city infrastructure, opportunity to be killed by a bullet every minute, being forced to join the army to support the side you may not support, no education for your children or even worse, and your children need to join the army.

After 10 years chaos, it may highly possible lead to neither democracy nor wealthy. (Last time we overthrown a government with the name of “democracy and freedom”, we built up the CPC government.)

So, why do we bother to do that again now?


U.S. Senator Ted Cruz (R-TX) (C) departs the Senate floor after a late-night vote rejected budget legislation from the Republican-controlled House of Representatives at the U.S. Capitol in Washington, September 30, 2013. The U.S. government was on the edg

attribution: REUTERS

Sen. Ted Cruz wants Senate Republicans to block almost every one of President Obama’s nominations in retaliation for him immigration executive order. He said so in an op-ed in Politico: “If the president announces executive amnesty, the new Senate majority leader who takes over in January should announce that the 114th Congress will not confirm a single nominee—executive or judicial—outside of vital national security positions, so long as the illegal amnesty persists.” There’s a bit of a problem there, though, as “Fox News Sunday” host Chris Wallace pointed out. Blocking every nomination means keeping Attorney General Eric Holder in place.

“Are you saying that the Senate should refuse to confirm Loretta Lynch, the president’s new nominee for attorney general, and thereby leave Eric Holder, who you don’t like very much, in that position even longer?” asked Wallace.Cruz largely avoided Wallace’s question, simply saying that Republicans “should use the constitutional checks and balances we have to rein in the executive.”

Wallace, however, persisted, and asked the question again. This time, Cruz still did not state directly that the Senate should block Lynch, but implied as much by saying that only positions of “vital national security” should get to the floor for a vote.

“In my view, the majority leader should decline to bring to the floor of the Senate any nomination other than vital national security positions,” the senator said. “Now, that is a serious and major step.”

Clearly, Cruz is not prepared to acknowledge reality. Or change his talking points to acknowledge reality. Same thing. But if he decides to continue to be a one-man stonewall, it doesn’t bode well for more nominations getting through this lame duck session.

“Can Republicans hold on to Senate majority in 2016? There’s reason for doubt”


Blogger’s note: These Washington post reporters do not tend to favor an optimistic view for the Democrats. Quite the opposite. If they are not Republicans, they tend to report and “editorialize” in a way that is favorable to that party. fls
 November 9 at 5:17 PM   
Congratulations, Republicans! You won the Senate majority! Now, can you hold on to it for more than two years?Looking at the 2016 Senate map, there’s reason for doubt. Republicans will have to defend 24 seats, compared with 10 for Democrats. And the raw numbers don’t even tell the whole story. Seven seats held by Republicans — Florida, Illinois, Iowa, New Hampshire, Ohio, Pennsylvania and Wisconsin — were carried by President Obama in 2008 and 2012. And there is chatter about potential Republican retirements in Arizona and Iowa. If either John McCain or Chuck Grassley decided to call it a career, each of those races would be major Democratic targets.

On the other side of the coin, Republican takeover opportunities are few and far between. By far, the most endangered Democrat is Senate Majority Leader Harry Reid, who survived in 2010 but could face Nevada Gov. Brian Sandoval (R), who won a second term Tuesday with more than 70 percent of the vote. Reid has said he will run again, although his demotion from majority leader to minority leader might make him rethink those plans. The only other Democrat who starts the 2016 cycle in serious jeopardy is freshman Michael Bennet (Colo.), who, like Reid, was a surprise winner in 2010. The convincing win by Cory Gardner (R) over Sen. Mark Udall (D) on Tuesday in the Rocky Mountain State will undoubtedly energize Republicans, though it’s less clear what the GOP bench looks like in a race against Bennet.

Outside of those two seats, there’s almost no vulnerability on the Democratic side. Even if Sen. Barbara Boxer (Calif.) or Barbara Mikulski (Md.) decide not to run again, both sit in very, very Democratic states — particularly at the federal level.

To win back the Senate majority in two years, Democrats will probably need to net four (if they hold the White House in 2016) or five (if they don’t) seats. Republicans control 52 Senate seats in the 114th Congress, but Sen. Mark Begich (D) is behind by 8,000 votes in Alaska and is likely to lose, and chances for Sen. Mary Landrieu (D) don’t look great in Louisiana’s Dec. 6 runoff.

Gaining five seats is not out of the question for Democrats — though it might be a bit of a stretch — given the Senate map of 2016. Of the 10 most vulnerable seats listed below, Republicans hold eight. The No. 1 race is the most likely to flip party control in 2016.

10. Kentucky (Republican-controlled): As Tuesday’s election showed, Kentucky isn’t exactly fertile ground for Democrats. But something interesting happened even as Mitch McConnell walloped Alison Lundergan Grimes: Democrats held on to their majority in the state House. That means Sen. Rand Paul (R-Ky.) can’t count on changing state law to be able to run for president and Senate at the same time. Hence, a possible open seat.

9. Florida (R): Sen. Marco Rubio (R) has suggested that he won’t run for both president and reelection to the Senate in 2016. If he pursues the former and isn’t on the Senate ballot, this becomes an open-seat race in a true swing state in a presidential year — in other words, a good opportunity for Democrats. If Rubio passes on a White House bid or drops out with enough time to mount a Senate bid, Republicans would probably feel better about holding this seat.

8. Ohio (R): Sen. Rob Portman is one of several Republican members of Congress who have been mentioned (or mentioned themselves) as possible White House contenders. So, this could end up being an open seat. If Portman decides to run for reelection, his deep connections to donors through his work as National Republican Senatorial Committee vice chairman should ensure that he will be a financial behemoth. Portman is not terribly polarizing, and there is no obvious Democratic recruit waiting in the wings.

7. New Hampshire (R): The Granite State was one of the few bright spots for Democrats nationally as Sen. Jeanne Shaheen (D) beat back a challenge from Scott Brown. It could be a Senate battleground again in two years if Gov. Maggie Hassan (D), who won reelection Tuesday with 53 percent of the vote, decides to take on freshman Sen. Kelly Ayotte (R). There is also considerable chatter among conservative activists about a primary challenge to Ayotte, though it remains to be seen whether a serious one might materialize. And, just to make things more complicated, Ayotte is likely to be in the vice presidential mix no matter who wins the Republican presidential nomination.

6. North Carolina (R): The GOP picked off a seat here Tuesday. It’s safe to assume, however, that if the environment wasn’t so good for the GOP, Kay Hagan would still be a senator come January. Her colleague, Sen. Richard Burr (R) is up for reelection in 2016, and even if he doesn’t retire — he has raised very little money the past two years, which is usually a precursor to retirement — he is likely to find himself targeted.

5. Colorado (Democrat ic-controlled): Bennet probably doesn’t want to think about 2016 yet. He just finished a stint as chairman of the Democratic Senatorial Campaign Committee, during which his party lost the Senate majority and he became the first chairman in more than four decades to lose a home-state colleague in the process. But Bennet won by the narrowest of margins in 2010 and probably would have lost had Ken Buck, the Republican candidate, not said some unhelpful things.

4. Pennsylvania (R): 2010 was about as good a year as a Republican could hope for in Pennsylvania. And Sen. Pat Toomey (R) still won with only 51 percent of the vote. In a presidential year, Toomey’s challenge will be even more serious. Republicans haven’t carried the Keystone State at the presidential level since 1988. One thing working in Toomey’s favor: a relatively weak Democratic bench. State Attorney General Kathleen Kane apparently has no interest in running for the Senate. The only person actively looking at a bid is former congressman Joe Sestak, who lost to Toomey in 2010.

3. Illinois (R): The first big question that needs to get answered in this race is whether Sen. Mark Kirk (R) will run again. Kirk, who suffered a severe stroke in early 2012, has insisted that he plans to seek a second term, but even some Republicans are taking a wait-and-see approach. Democratic speculation — matter what Kirk does — will center on state Attorney General Lisa Madigan, but she seems a much more likely 2018 challenger to Gov.-elect Bruce Rauner (R). Assuming Madigan is a no-go, look for Rep. Tammy Duckworth to be at the top of Democratic wish lists.

2. Nevada (D): Reid will soon no longer be majority leader. The question is whether he wants to be minority leader and whether he sticks around. He’s got bad approval numbers and is staring at a potential matchup with Sandoval. Tuesday’s election was actually pretty big here. Not only did Sandoval cruise to reelection with 71 percent of the vote — 71 percent! — the GOP also cruised in the lieutenant governor’s race, a huge proxy war that Reid badly wanted to win. That means Sandoval can run in 2016 without worrying about the governor’s seat going to a Democrat.

1. Wisconsin (R): Sen. Ron Johnson starts the 2016 election cycle as the most vulnerable senator on the map. He’s undefined in the eyes of many,and he’s running in a state that has gone Democratic in seven straight presidential elections. To boot, there are rumors that Democrat Russ Feingold, whom Johnson unseated in 2010, may run.

Republicans Got Only 52 Percent of the Vote in House Races

Rob Richie November 7, 2014

Republicans Got Only 52 Percent of the Vote in House Races
How did they end up with 57 percent of the seats?

As the final Election Day votes are being counted, national attention has focused on the Republicans’ near-sweep of close elections for Senate and governor. But elections for the other congressional branch deserve more scrutiny. Given that Republicans will only win about 52 percent of votes in House races, how are they ending up with 57 percent of seats? Why did Democrats concede control of the House months ago, even when congressional approval is so low?

The reason is bracing to believers in accountable and representative government. The House is shockingly skewed toward the Republican Party. It’s always hard to oust incumbents—some 96 percent just won re-election—but now it extends to control of the chamber. In 2012, Republicans won a lopsided majority of seats despite securing only 48 percent of the vote, about the same vote share as Democrats this year. To keep the House in 2014, Republican needed only 45 percent of votes. Putting it another way: control of the House comes from winning 218 races or more. The 218th biggest Republican margin was fully 14 percentage points.

Looking forward, it’s even worse for Democrats. FairVote’s Monopoly Politics projection model was, as usual, highly accurate in this election—of 368 projections made a year ago, only two were wrong. We’ve already released our projections for 2016—that’s two years away, folks—and picked sure winners in 373 districts, leaving only 14 percent of the House even potentially in play. To win a majority of 218 House seats, we project that Democratic candidates would need to win ten million more votes than Republicans.

Imagine if analysts assumed that structural bias in the Electoral College would allow the Democrats to keep the White House in 2016 even if their candidate lost by 10 million votes. That distortion would stir an uproar—remember that when Al Gore lost in 2000, he had won the popular vote by 500,000 votes. Yet the partisan skew in House elections draws barely a yawn.

There’s every reason to care. Our founders designed the House to reflect the people, yet its leaders today are electorally unaccountable to voters in November. All Republican House leaders and committee chairs represent safely Republican districts won by Mitt Romney in 2012, and now an absolute majority of House seats will be held by Republicans in Romney-won districts. With little to fear from general election voters, Republicans representing such districts are incentivized to play to their party’s base to fend off primary challengers. The 113th Congress was one of the least productive in history, and it’s hard to see the 114th Congress being much better.

Gerrymandering Is Only Part of the Story

Those who notice the partisan skew usually misrepresent its origins by placing the blame either on gerrymandering or campaign spending. Yes, gerrymandering is wrong, and Republicans leaders in swing states like Florida, Michigan, North Carolina, Ohio, and Pennsylvania drew brutally unfair congressional maps—ones where Republicans packed Democrats into relatively few districts and won most of the rest. But the skew’s origins run deeper. It’s a combination of a changing electorate and increasingly politically polarized voting.

Over the past twenty-five years, Democratic gains in the electorate have come from increases in the number of voters who are people of color and single women, but Democrats have lost support among white voters overall. The result is a startling urban/rural divide, with the Democratic base increasingly concentrated in cities—as evidenced by the fact Jimmy Carter in 1976 won 1,711 counties, nearly three times the 693 counties won by Obama in his comparably close win in 2012. This inefficient distribution of Democratic votes explains why even impartial redistricting will strongly favor Republicans. Indeed, the district skew was already in place by 1996, when Bill Clinton ran behind his national share of the popular vote in 55 percent of districts despite Democrats having drawn most of them—exactly the same share of districts where Obama trailed his national average in 2012.

In 2006 and 2008, Democrats won the House, but only by winning in dozens of Republican-leaning districts. That route to retaking the House has become much harder. Fewer voters now split their tickets between Republicans and Democrats. In 2012, Democrats failed to take over a seat in Romney’s best 201 districts, and after 2014, Democrats represent only five of the 226 districts carried by Romney.

Politically polarized voting largely explains the Senate and House election outcomes this year, but it next extends down to state legislature. Of the hundreds of legislative districts in Georgia, North Carolina and Texas, fewer than ten have a representative from a party whose presidential nominee didn’t win that district’s vote. In this partisan reality, any House district where one party has an underlying advantage of just 53 percent to 47 percent is essentially safe for an incumbent absent personal scandal or a national partisan wave.

A Reform Roadmap

There is only one way to ensure that partisan representation in Congress accurately reflects voters in congressional elections: replace winner-take-all, single-winner elections with fair representation forms of proportional representation. Proportional representation describes a family of electoral systems in which like-minded voters earn representation in proportion to their share of the vote. In fair representation systems, which are already used to elect more than 100 city councils and schools boards, from Peoria, Illinois, to Amarillo, Texas, voters are directly cast for candidates (instead of for parties, as in other forms of proportional representation).

Winning fair representation for the House is not a pipedream. More than a quarter of House seats before 1842 were elected in multi-winner districts, most state legislators were elected in multi-winner districts as recently as the 1950s, and most local officials today represent multi-winner districts. We don’t support the winner-take-all rules that were used in these multi-winner races, but Illinois showcased how fair representation voting works when it elected its house of representatives with a cumulative voting system in three-winner district until 1980, when a misguided ballot initiative shrunk the size of the legislature and installed winner-take-all elections. Former state Treasurer Judy Baar Topinka captured what most old-timers in Illinois say when writing, a decade ago, “Cumulative voting provided proportional representation, a fairer way for the public to participate. It could accommodate more women, ethnic and minority legislators, independents and yes, even ‘characters’ who march to different drummers and dare to push the envelope with new ideas and visions for Illinois.”

Eliminating winner-take-all only takes a congressional statute. Our proposed legislation requires states to adopt fair representation voting methods in larger, multi-winner elections. As detailed in FairVote’s interactive map at FairVoting.US, just over a quarter of voters would then have the power to elect a representative in a three-winner district, and 17 percent of voters would do so in a five-winner district. One example of a fair representation method would be ranked choice voting, as used today in Minneapolis and Cambridge, Massachusetts, and by every voter in Australia, Ireland, New Zealand and Scotland. Voters rank candidate in order of choice, with backup choices counting in the event their first choice loses, and nearly all voters ending up electing a preferred candidate. The result would be that voters would almost always be able to vote for candidates they truly believe in and end up with representatives who fairly reflecting each district’s left, center and right—Republicans would win in Manhattan, Democrats in Oklahoma and so on.

As an example, Louisiana would replace its six single-winner districts that are now locked down for five Republicans and one Democrat with two competitive multi-winner districts each with three seats. African-Americans in both districts would have the power to elect representatives, as would conservative Republicans. Each district’s third seat would be in play, with the winner better representing the more moderate voters who are nearly shut out of House elections in the South today.

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By expanding the number of voters able to elect preferred candidates, our plan completely eliminates today’s partisan skew—winning 51 percent of the vote nationwide would mean earning the most seats. Democrats and Republicans would likely be elected to represent voters everywhere in the nation. That would mean every district would be meaningfully contested and both parties would better represent their “big tent” of supporters even as independents and minor parties could hold the major parties more accountable. Women and racial minorities would among the beneficiaries, making them important allies in our drive for reform.

Can we win fair representation? Republicans may not take the lead, as they would lose their unfair advantage in House elections, but many Republicans want to be able to compete in areas with Democratic majorities and better adapt to our changing electorate in order to win the White House. Democrats that have the most to gain, of course, and many congressional Democrats already back legislation to take on gerrymandering with independent redistricting commissions. But that in itself won’t end the partisan skew nor do much for women, racial minorities and stranded Democrats in Republican turf. It’s time to think bigger, support fair representation, and rally behind the goal of achieving truly free and fair elections for Congress.

Rob Richie is executive director of FairVote, a nonpartisan organization.

IS HE RIGHT? In part, but we are not so sure [Krugman Nov. 6 TRIUMPH OF THE WRONG, ny times]


The Opinion Pages | OP-ED COLUMNIST

Triumph of the Wrong

The race is not to the swift, nor the battle to the strong, neither yet bread to the wise, nor yet midterms to men of understanding. Or as I put it on the eve of another Republican Party sweep, politics determines who has the power, not who has the truth. Still, it’s not often that a party that is so wrong about so much does as well as Republicans did on Tuesday.

I’ll talk in a bit about some of the reasons that may have happened. But it’s important, first, to point out that the midterm results are no reason to think better of the Republican position on major issues. I suspect that some pundits will shade their analysis to reflect the new balance of power — for example, by once again pretending that Representative Paul Ryan’s budget proposals are good-faith attempts to put America’s fiscal house in order, rather than exercises in deception and double-talk. But Republican policy proposals deserve more critical scrutiny, not less, now that the party has more ability to impose its agenda.

So now is a good time to remember just how wrong the new rulers of Congress have been about, well, everything.

First, there’s economic policy. According to conservative dogma, which denounces any regulation of the sacred pursuit of profit, the financial crisis of 2008 — brought on by runaway financial institutions — shouldn’t have been possible. But Republicans chose not to rethink their views even slightly.They invented an imaginary history in which the government was somehow responsible for the irresponsibility of private lenders, while fighting any and all policies that might limit the damage. In 2009, when an ailing economy desperately needed aid, John Boehner, soon to become the speaker of the House, declared: “It’s time for government to tighten their belts.”

So here we are, with years of experience to examine, and the lessons of that experience couldn’t be clearer. Predictions that deficit spending would lead to soaring interest rates, that easy money would lead to runaway inflation and debase the dollar, have been wrong again and again. Governments that did what Mr. Boehner urged, slashing spending in the face of depressed economies, have presided over Depression-level economic slumps. And the attempts of Republican governors to prove that cutting taxes on the wealthyis a magic growth elixir have failed with flying colors.

In short, the story of conservative economics these past six years and more has been one of intellectual debacle — made worse by the striking inability of many on the right to admit error under any circumstances.

Then there’s health reform, where Republicans were very clear about what was supposed to happen: minimal enrollments, more people losing insurance than gaining it, soaring costs. Reality, so far, has begged to differ, delivering above-predicted sign-ups, a sharp drop in the number of Americans without health insurance, premiums well below expectations, and a sharp slowdown in overall health spending.

And we shouldn’t forget the most important wrongness of all, on climate change. As late as 2008, some Republicans were willing to admit that the problem is real, and even advocate serious policies to limit emissions — Senator John McCain proposed a cap-and-trade system similar to Democratic proposals. But these days the party is dominated by climate denialists, and to some extent by conspiracy theorists who insist that the whole issue is a hoax concocted by a cabal of left-wing scientists. Now these people will be in a position to block action for years to come, quite possibly pushing us past the point of no return.

And we shouldn’t forget the most important wrongness of all, on climate change. As late as 2008, some Republicans were willing to admit that the problem is real, and even advocate serious policies to limit emissions — Senator John McCain proposed a cap-and-trade system similar to Democratic proposals. But these days the party is dominated by climate denialists, and to some extent by conspiracy theorists who insist that the whole issue is a hoax concocted by a cabal of left-wing scientists. Now these people will be in a position to block action for years to come, quite possibly pushing us past the point of no return.

But if Republicans have been so completely wrong about everything, why did voters give them such a big victory?

Part of the answer is that leading Republicans managed to mask their true positions. Perhaps most notably, Senator Mitch McConnell, the incoming majority leader, managed to convey the completely false impression that Kentucky could retain its impressive gains in health coverage even if Obamacare were repealed.

But the biggest secret of the Republican triumph surely lies in the discovery that obstructionism bordering on sabotage is a winning political strategy. From Day 1 of the Obama administration, Mr. McConnell and his colleagues have done everything they could to undermine effective policy, in particular blocking every effort to do the obvious thing — boost infrastructure spending — in a time of low interest rates and high unemployment.

This was, it turned out, bad for America but good for Republicans. Most voters don’t know much about policy details, nor do they understand the legislative process. So all they saw was that the man in the White House wasn’t delivering prosperity — and they punished his party.

Will things change now that the G.O.P. can’t so easily evade responsibility? I guess we’ll find out.

Russia may ban circulation of US dollar: US NEWSBLOG


Russia may ban circulation of US dollar
[ 05 November 2014 14:46 ]

The State Duma has been submitted a relevant bill

Moscow. Farid Akbarov – APA. Russia may ban the circulation of the United States dollar.

The State Duma has already been submitted a relevant bill banning and terminating the circulation of USD in Russia, APA’s Moscow correspondent reports.

If the bill is approved, Russian citizens will have to close their dollar accounts in Russian banks within a year and exchange their dollars in cash to Russian ruble or other countries’ currencies.

Otherwise their accounts will be frozen and cash dollars levied by police, customs, tax, border, and migration services confiscated.

After the law enters into force, it will be impossible to obtain cash dollar in Russia. The ban or termination of the US dollar will not apply to the exchange operations carried out by Russian Central Bank, the Russian government, ministries of foreign affairs and defense, the Foreign Intelligence Service and the Federal Security Service.

From Reuters: India, isolated, toughs it out in WTO food-stockpiling row

NEW DELHI/GENEVA Wed Nov 5, 2014 10:03am ESTIndian PM Modi speaks with Finance Minister Jaitley during the launch of the Jan Dhan Yojana, or the Scheme for People's Wealth, in New Delhi

Related Topics

(Reuters) – India defied the world on Wednesday in a row over food stockpiling that has crippled attempts to reach a global trade agreement, raising doubts that backroom talks can reach a compromise before a Group of 20 summit this month.

At the end of July, Prime Minister Narendra Modi pulled the plug on implementing a so-called trade-facilitation deal struck in Bali last year, linking it to the emotive issue of rural poverty in his country of 1.25 billion people.

India wants to keep a so-called ‘peace clause’ that protects its huge state food purchases until the World Trade Organization can strike a definitive deal on stockpiling. As originally envisaged in Bali, the clause would expire in four years.

Critics say the food stockpiling amounts to paying farmers to produce food, which is likely to lead to food surpluses that will get dumped on world markets.

New Delhi’s blockade has plunged the WTO into its worst crisis in two decades, leading Director General Roberto Azevedo to float the idea of abandoning the consensus principle on which the 160-member group operates.

Modi’s tough line jars with the ‘Make in India’ pitch he has taken to investors abroad in his first five months in charge. Having failed to make progress on trade when he met U.S. President Barack Obama in Washington, he could find himself isolated at his first G20 summit of world leaders in Brisbane, Australia, on Nov. 15-16.

“India’s position on trade facilitation has been completely misunderstood because of unreasonable positioning by some of the developed countries,” Finance Minister Arun Jaitley told a World Economic Forum conference in New Delhi.

Jaitley repudiated suggestions that India was fundamentally opposed to trade facilitation, which would entail easing port and customs procedures and, by some estimates, add $1 trillion and 21 million jobs to the global economy.


India has begun backroom efforts to break the deadlock, sending a top trade ministry official to Geneva this week for talks with Azevedo and key WTO members.

Trade diplomats said that there was no hint, however, that a compromise could be reached on India’s demands, which have been vague and varied in the months since its veto.

On Monday, Modi held a meeting of Indian trade ministry officials to discuss how the deadlock could be broken without compromising India’s food-security concerns.

“If India has to submit a proposal, it would be presented at the right time,” a senior trade ministry official with direct knowledge of the matter told Reuters.

India refuses to bow to foreign calls to scale back a scheme to buy wheat and rice that it distributes to 850 million people. In a recent disclosure to the WTO, India said those purchases cost $13.8 billion in 2010-11 – part of the $56.1 billion it spent in total on farm support.

“All that we are requesting is the settlement of the dispute with regard to the food stock holdings, and the peace clause must continue to co-exist,” Jaitley said.

Diplomats say that without a WTO deal on trade facilitation, countries could simply tack the draft agreement onto their existing membership terms, putting the onus on India to object – and explain why its interests had been damaged by such a move.

Yet economists say WTO members lack any effective means to bring pressure to bear against Asia’s third-largest economy, which is home to a sixth of the world population.

“It’s an issue that in India is so politicized – you have hordes of the population living in poverty and depending on food aid,” said Shilan Shah, an economist who covers India at Capital Economics in London.

“The WTO hasn’t really shown the kind of will to move on without India’s agreement. What it demonstrates is how important India is to the global trading community.”

(This story corrects typo in ‘a’ in first paragraph)

(Reporting and writing by Douglas Busvine)

The Kids Need Cash A simple way to reduce child poverty is to give families cash: From US NEWSBLOG NOV 5


Last week, UNICEF released a report detailing the state of child poverty in 41 of the world’s richest countries. The United States, all on its own, put 1.7 million children into poverty since the 2008 recession. As it turns out, we are second only to Mexico in terms of creating poor children.

So what can our country do better, when it comes to our children?

We could piggyback on the recent popularity of an old social security policy idea that’s been dusted off and circulated around the Internet blogosphere — the Universal Basic Income. The concept is simple: Every person in America would get a yearly stipend, say, $10,000, which would either bolster or replace other forms of social insurance. Services are streamlined into one simple payout, and there are no messy administrative barriers. If you’re alive, you make the cut. Such a policy would guarantee that all households, whether they had children or not, would get an income boost.

Given the extreme skepticism in the United States toward the social safety net, a universal basic income’s recent surge in popularity is encouraging.

[SEE: Political Cartoons on the Economy]

But I think the wrong issue is being put on the table.
For starters, even supporters of guaranteed income acknowledge that it is politically infeasible in the United States — and probably anywhere else, for that matter. The only precedent we have among our developed counterparts is in Switzerland, a much smaller, wealthier, and more homogeneous state. Even there, the policy isn’t actually in place yet — advocates have simply gathered enough support to hold a referendum sometime in the future.

So, as much as policy wonks would like to hope otherwise, in its current state, and with the state of our gridlocked government, the Utopian idea of a basic income remains more a political theory than a policy in reality (albeit a compelling one). It’s just not going to happen.

But there is a related policy idea that social democracies have used for years that I think deserves as much, if not more, of our attention: cash for children.

Child benefits and conditional cash transfers, which give money to children (or, rather, the households in which they reside), are examples of existing basic income-like policies that have proven to work. But unlike guaranteed income, which has no current working models, child benefits have been put in practice in nearly every European country. Because of this, we have years worth of data that shows child benefits help to reduce child poverty. They are also Latin America’s poverty-cutting policy tool of choice, and their benefits have been rigorously measured and tested.

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In fact, among economically advanced countries evaluated by an earlier UNICEF report on child poverty, the United States is the only one that does not have a child cash benefit policy. It also happens to have the second highest child poverty rate among the same cohort.

The theory behind providing child benefits lies in the fact that, while children are necessary for a healthy economy, they are an extremely expensive undertaking for their parents. The total cost of raising a child is $241,080, as estimated by the U.S. Department of Agriculture. Lessening this burden, so that children would not be raised in poverty, would be in the national interest, for many reasons.

In most child benefit systems, cash is given monthly, usually to mothers, and is adjusted depending on the number of children they have. Benefits can be means-tested (conditional on income level) or universal, big or small, but evidence shows the more cash transferred, the more you cut child poverty. An annual transfer of $3,000 per child would reduce child poverty by 40 percent in the United States, as estimated by Steven Pressman.

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Perhaps most importantly, there is a much better chance of implementing child benefits in the United States than universal income. The latter would require a massive overhaul of how our country views and treats poverty, and require our government to spearhead a relatively uncharted redistributive policy. On the other hand, the universal child benefit is not a far cry from tax credits we already have in place, such as the earned income tax credit and the child tax credit, which give money back to working parents.

The main difference is parents must have an income to receive the benefits, and while the EITC is refundable (if the benefit exceeds a low-wage worker’s income tax liability, the balance will be paid back), the child tax credot is only partially and regressively so. For example, families receive a refund from the credit equal to 15 percent of their earnings above $3,000 — a family earning $4,000 would only receive $150, while a family earning $10,000 would receive $1,050. This counter-intuitive benefit means the less parents make, the less money they get back. A universal child benefit could help close this gap and give cash to parents who need it the most.

The child benefit also differs from traditional welfare in the United States, or the Temporary Assistance for Needy Families, due to the fact that it is not tied to work requirements, nor are funds spent on anything other than cash to parents (less than 30 percent of TANF dollars are spent on cash assistance).

With one out of five children in the United States living under the poverty line, universal child benefits deserve our attention more than guaranteed income. While the tagline for child benefits may not be as sexy, it’s a long-awaited policy for children who have waited too long.

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