Fiscal Cliff Talks Turn Into a Game of Chicken

By ERIC PIANIN, The Fiscal Times

November 30, 2012

 

 

The critical negotiations over a way to avoid the fiscal cliff are fast turning into a game of chicken.

Shedding his optimistic disposition, House Speaker John Boehner, R-Ohio, summoned reporters Thursday afternoon to declare it was time that President Obama and the Democrats revealed how they intended to cut spending and slow the rate of growth of Medicare and other costly entitlements as part of a Grand Bargain of deficit reduction.

“I’ve got to tell you, I’m disappointed in where we are and what has happened in the last couple of weeks,” Boehner said.

US Birth Rate at Lowest Level Since 1920

By TARA BAHRAMPOUR, The Washington Post

November 30, 2012

The U.S. birth rate plunged last year to a record low, with the decline being led by immigrant women hit hard by the recession, according to a study released Thursday by the Pew Research Center.

The overall birth rate declined by 8 percent between 2007 and 2010, with a decrease of 6 percent among U.S.-born women and 14 percent among foreign-born women. The decline for Mexican immigrant women was more extreme, at 23 percent. The overall birth rate is now at its lowest since 1920, the earliest year with reliable records.

Shocking Chart on Tuition vs. Earnings for College Grads

By BLAIRE BRIODY, The Fiscal Times

November 30, 2012

 

Student debt levels have reached a new high – rising $42 billion in the last quarter to $956 billion, according to a report this week from the New York Fed. At the same time, tuition rates have seen a staggering 72 percent increase since 2000.

Obama’s economic philosophy, in 8 charts

Posted by Zachary A. Goldfarb on November 28, 2012 at 5:27 pm

If you look at President Obama’s biography and policies, you see one unifying theme more than any other: Obama wants to reduce income inequality.

His policies seem designed to achieve other objectives. The 2009 stimulus sought to end the recession. The 2010 Affordable Care Act strove to expand health-care coverage as widely as possible. And in the upcoming tax policy debate, Obama is seeking to shrink the nation’s deficits over time. But in each case, Obama is also trying to reverse three decades of growing income disparity in the United States.

Egypt Crisis Raises Fears Of 'Second Revolution'

Protesters run as they face Egyptian riot Police during clashes on Omar Makram street, off Tahrir Square, on November 28, 2012 in Cairo. Police fired tear gas into Cairo's Tahrir Square, where several hundred protesters spent the night after a mass rally to denounce President Mohamed Morsi's assumption of expanded powers. (GIANLUIGI GUERCIA/AFP/Getty Images) 

CAIRO -- Faced with an unprecedented strike by the courts and massive opposition protests, Egypt's Islamist president is not backing down in the showdown over decrees granting him near-absolute powers.

Activists warn that his actions threaten a "second revolution," but Mohammed Morsi faces a different situation than his ousted predecessor, Hosni Mubarak: He was democratically elected and enjoys the support of the nation's most powerful political movement.

Inequality Breeds Resistance to Globalization

Don’t blame globalization for inequality – but rather policies hijacked by a few

Pranab Bardhan

YaleGlobal, 27 November 2012

Rich economy, poor management: China’s rich flaunt their wealth (top); India’s poor children wait for a mid-day meal

BERKELEY: Economic globalization in the sense of expansion of foreign trade and investment is, of course, somewhat anemic, reflecting the impact of global recession, although still vigorous in the sense of continuous international transmission of technology, information, ideas and social media.

But in the world of politics and policymaking a cold wind is blowing, dimming earlier enthusiasm for global integration and market liberalization. The Doha round of trade negotiations is moribund. Economic integration in Europe is in disarray. Not merely is the fuming against imports from China and immigrants from Mexico now a staple of American electoral politics, the populist anger in all countries, rich or poor, against the galloping rise in inequality is often directed at the dark forces of global intrusion and competition.

The Fiscal Cliff: Absolutely everything you could possibly need to know, in one FAQ

Posted by Suzy Khimm, Ezra Klein, Dylan Matthews and Brad Plumer on November 27, 2012 at 9:00 am

Washington is engaged in an all-consuming debate about how to resolve the “fiscal cliff” — which we like to call, for reasons that will soon be explained, “the austerity crisis.” But what is that and why does it matter? We at Wonkblog put together a FAQ to sort it out. And we’ll keep updating this FAQ as the debate rages on.

Want to tax capital and income equally? Try the Buffett rule

Posted by Dylan Matthews on November 27, 2012 at 10:09 am

Warren Buffett (Daniel Acker — Bloomberg)

Enthusiasm is building for a “minimum tax” for the wealthy, in which millionaires would have to pay, say, 30 percent of their income in taxes, no ifs or buts. Republicans in Congress have floated taxing the entire income of high-earners at 35 percent, while Warren Buffett has renewed his call for a minimum tax of 30 percent for millionaires.

Let’s hope the austerity crisis is holding back business spending

Posted by Neil Irwin on November 27, 2012 at 10:18 am

Can they reach a deal? Business investment spending may hang in the balance.

There are new signs that businesses are pulling back on their investment spending in advance of the looming austerity crisis. And that’s the good news.

Shipments of core capital goods, a measure that excludes defense spending and aircraft — a common measure of business investment — fell 0.4 percent in October, the Commerce Department said Tuesday. There is an obvious and likely explanation: Firms were becoming all the more wary of what might happen with the “fiscal cliff,” the wave of tax hikes and spending cuts scheduled to take effect on Jan. 1 absent a new agreement. If you are a corporate executive weighing the purchase of a piece of industrial equipment or a truck for your delivery fleet, you may well decide “I’ll just wait to see how all this shakes out.”

Does advertising help or harm the economy?

Posted by Brad Plumer on November 27, 2012 at 11:21 am

It’s impossible to escape advertising. Truck ads on billboards, beer ads on television, pop-up ads for credit cards on the Internet. It’s everywhere. Last year, U.S. companies spent about $144 billion on commercials and other forms of marketing—about 1 percent of the GDP. So what effect do all these ads have on the economy?

The dangerous fiscal deadline isn’t Dec. 31 – it’s February 2013

Posted by Suzy Khimm on November 27, 2012 at 2:43 pm

(Source: Mark Lennihan / AP)

The debt ceiling has largely taken a backseat to the looming fiscal changes that are scheduled to take effect on Dec. 31. But unless it’s dealt with in the lame duck Congress, we’re going to hit another debt limit come February 2013, according a new analysis by the Bipartisan Policy Center.

What’s holding back the economy, in 10 charts

Posted by Zachary A. Goldfarb on November 27, 2012 at 3:09 pm

Lately, there has been quite a bit of excitement that the big overhang of debt left over from the financial crisis may be starting to ease. Treasury Secretary Timothy F. Geithner has noted that there’s been a “significant reduction” of debt, and a number of indicators point to American households getting their finances in better shape.

How U.S. can once again define the future

By Patrick Doherty, Special to CNN

November 27, 2012 -- Updated 1859 GMT (0259 HKT)

 

Editor's note: Patrick Doherty is the deputy director of the National Security Studies Program at the New America Foundation and author of the forthcoming report, "Grand Strategy of the United States of America."

(CNN) -- Washington is all about the fiscal cliff these days. In Doha, Qatar, world leaders are negotiating over climate change. Federal debt and carbon emissions are indeed two big problems on the nation's front burner. But they are just the beginning.

Tobacco companies ordered to admit they lied over smoking danger

Reuters in Washington guardian.co.uk, Wednesday 28 November 2012 04.59 GMT

US judge says tobacco firms must spend their own money on a public campaign admitting deception about the risks of smoking

The public advertisements are to be published in various media for as long as two years. Photograph: Alex Segre/Alamy

 

Major tobacco companies who spent decades denying they lied to the US public about the dangers of cigarettes must spend their own money on a public advertising campaign saying they did lie, a federal judge ruled on Tuesday. 

The ruling sets out what might be the harshest sanction to come out of a historic case that the justice department brought in 1999 accusing the tobacco companies of racketeering.

Greece, markets satisfied by EU-IMF Greek debt deal

By Jan Strupczewski and Luke Baker

BRUSSELS | Tue Nov 27, 2012 4:58pm EST

 

(Reuters) - The Greek government and financial markets were cheered on Tuesday by an agreement between euro zone finance ministers and the International Monetary Fund to reduce Greece's debt, paving the way for the release of urgently needed aid loans.
The deal, clinched at the third attempt after weeks of wrangling, removes the biggest risk of a sovereign default in the euro zone for now, ensuring the near-bankrupt country will stay afloat at least until after a 2013 German general election.

Xi feels threat of a China Spring

By Brendan O'Reilly

Recent statements from China's new leadership suggest a growing awareness of serious economic and political problems. The era of relative political stability garnered through rapid economic growth may be coming to an end. A rising tide lifts all boats, but structural problems in the world's second largest economy have the potential to dam the flow of increasing prosperity. Concrete reforms must accompany the promising slogans if the Communist Party is to maintain its monopoly on political power.

The World According to Xi

This illustration is by Paul Lachine and comes from NewsArt.com, and is the property of the NewsArt organization and of its artist. Reproducing this image is a violation of copyright law.

BEIJING – On November 15 Xi Jinping became General Secretary of the Chinese Communist Party and Chairman of the CCP’s Central Military Commission, giving him supreme authority over China’s armed forces. Next March, he will become President of China as well.

China’s Leadership Change Puts Pair Ahead of Their Peers for 2017

By EDWARD WONG

Published: November 26, 2012

BEIJING — When American diplomats in China scanned the political landscape this year for officials on a fast track to the Communist Party’s top ranks, one name jumped out: Hu Chunhua. 

So in June, the United States ambassador, Gary F. Locke, traveled to Inner Mongolia, the coal-rich region of grasslands and boom cities, where Mr. Hu is party chief. At a banquet in Hohhot, the regional capital, Mr. Hu proudly opened a bottle of local liquor, and Mr. Locke joined in a toast.

Sun Zhengcai, A Rising Star

Last week Sun Zhengcai, 49, was named as the secretary general of Chongiqong Province, the same position that Bo Xilai held before being purged from the CCP.

Sun is part of a small group of young rising stars in the Chinese Communist Party (CCP) that many believe are being prepared as China's 6th generation leaders who are expected to take power from Xi Jinping and Li Keqiang in 2022. Sun became one of the fifteen new Politburo members at the 18th Party Congress.

Sun obtained a doctorate in agriculture from Beijing Agriculture University in 1987 and spent a year in the British countryside as a visiting fellow at Britain’s Rothamsted Experimental Station.

Reconsidering Vietnam’s political system

November 26th, 2012

Author: Benedict J. Tria Kerkvliet, ANU
Despite being a one-party state, Vietnam’s political system has often been responsive to peasants, workers and others pushing for better economic, social and political conditions.

Major policy shifts in the last 25 years — especially replacing a centrally planned economy with a market economy and abandoning collective farming in favour of individual household farming — have been consequences, to a considerable measure, of bottom-up pressure for change, to which the country’s Communist Party leadership has acquiesced.

Is China Up to the Challenge?

Long menu of problems: New Party Secretary General Xi Jinping (top); angry protesters demand cancellation of polluting petrochemical plant in Zhejiang

WASHINGTON: China has ended the suspense by announcing the new leadership headed by Xi Jinping to the nation and the world. While the Communist Party and Central Military Commission elites are now identified, we must wait until March for a clearer idea of the policy orientations of China’s new elite, when the National People’s Congress will appoint ministers of State Council and other government officials. But it is not premature to identify their main challenges and speculate about how the leaders  may respond.

There exists a surprisingly strong consensus inside and outside of China on the principal problems and what reforms are needed. They essentially constitute significantly relaxing state and party control and allowing private sector and civil society greater leeway, while redirecting resources to spurring innovation and reducing social inequities. Specifically, urgent tasks include: 

 – reorienting the economic growth model away from investments into physical infrastructure and subsidized exports to one driven by domestic consumption and innovation, emphasizing the knowledge economy and service industries;

Businessman paid for Vietnam bank governor's son to attend British university to 'curry favour', court hears

SFO takes tough line on bribery by foreign companies  Photo: REUTERS

A business tycoon “desperate” to secure a £90million printing contract paid for the son of a Vietnamese bank governor to attend a British university to "curry favour", a court has heard. 

Bill Lowther, 73, is accused of paying £18,000 in tuition fees and thousands of pounds more for student accommodation for the son of a Vietnamese bank governor to attend Durham University.

China's princelings come of age in new leadership

By Benjamin Kang Lim

BEIJING | Sun Nov 25, 2012 4:19pm EST

Xi's ascension, along with the other members of the red aristocracy, came at an awkward moment for the princelings.

In this photo released by China's Xinhua news agency, China's new leaders, from left, Communist Party General Secretary Xi Jinping, Li Keqiang, Zhang Dejiang, Yu Zhengsheng, Liu Yunshan, Wang Qishan, and Zhang Gaoli, arrive for a press conference after being elected members of the Standing Committee of the Political Bureau of the 18th Central Committee of China's Communist Party at the Great Hall of the People in Beijing on Nov. 15. (AP Photo/Xinhua)

(Reuters) - In China they are known as "princelings" — the privileged children of the revolutionary founders of the People's Republic of China. And in the generational leadership change that just took place in Beijing, it could not have been clearer that having the right family bloodlines is among the most important attributes an ambitious cadre could possess.

Foreign Policy Under Xi Jinping

By M. Taylor Fravel

Following the conclusion of the 18^th Party Congress, a new Politburo Standing Committee, the top leadership body of the Chinese Communist Party, has been named.  Much of the recent commentary has revolved around whether or how China’s new leaders will pursue much-needed economic and political reforms.  An equally important question concerns the future direction of Chinese foreign policy under Xi Jinping.

Euro Ministers Take Third Swing at Clearing Greek Payment

Antonis Samaras, Greece's prime minister, center, arrives to speak at a news conference following the European Union (EU) leaders summit meeting at the European Council headquarters in Brussels, Belgium, on Friday, Nov. 23, 2012. Photograph: Jock Fistick 

Euro-area finance ministers try for the third time this month to clear an aid payment to Greece and forge a blueprint to keep the country a solvent member of the currency bloc.

Finance chiefs from the 17-member single currency return to Brussels today, less than a week after an all-night meeting failed to yield agreement and days after a European Union summit broke up without a proposed seven-year budget. At stake at the euro meeting is the continuation of a three-year mission to return Greece to financial health.

Fiscal Cliff Talks Sure to Rattle Wall Street Nerves

By RODRIGO CAMPOS, Reuters

November 24, 2012

 

Volatility is the name of this game.
With the S&P 500 above 1,400 following five days of gains, traders will be hard pressed not to cash in on the advance at the first sign of trouble during negotiations over tax hikes and spending cuts that resume next week in Washington. President Barack Obama and U.S. congressional leaders are expected to discuss ways to reduce the budget deficit and avoid the "fiscal cliff" of automatic tax increases and spending cuts in 2013 that could tip the economy into recession.

How Big Banks Can Spread Bigger Financial Ills

By The Staff of FUTURITY.ORG, Futurity.org

November 25, 2012

 

Looking at large national and international banks in terms of ecosystem stability and contagion models reveals that their influence and potential power for destruction far exceeds their actual size.

Vietnam’s November Inflation Accelerates to 6-Month High

(Bloomberg) – Vietnam’s inflation quickened to a six-month high as health care and education costs climbed.
Consumer prices gained 7.08 percent in November from a year earlier, after rising 7 percent in October, the General Statistics Office in Hanoi said today. That was the biggest increase since May and the third straight acceleration. Prices rose 0.47 percent from the previous month.

Analysis: "Caveat emptor" as foreigners rush to ride China rebound

By Vikram Subhedar

HONG KONG | Sun Nov 25, 2012 8:33pm EST

Investors look at computer screens showing stock information at a brokerage house in Shanghai in this June 8, 2012 file photo. Foreign investors have started rebuilding their China equity portfolios, tempted by low valuations after two years of market underperformance and signs economic growth may be stabilizing. They have pumped nearly $4 billion (2 billion pounds) into Chinese equity funds in the past two months alone, trying to get in early on what they hope will be a sustained rally. Picture taken June 8, 2012. 

(Reuters) - Foreign investors have started rebuilding their China equity portfolios, tempted by low valuations after two years of market underperformance and signs economic growth may be stabilizing.
They have pumped nearly $4 billion into Chinese equity funds in the past two months alone, trying to get in early on what they hope will be a sustained rally.

China's role in Southeast Asia questioned

FILE - In this Nov. 20, 2012 file photo, China's Premier Wen Jiabao, right, chats with U.S. President Barack Obama, left, as Cambodia's Prime Minister Hun Sen stands between them during a family photo at the 7th East Asia Summit Plenary Session in Phnom Penh, Cambodia. China's finding the once friendly ground of Southeast Asia bumpy going, with anger against Chinese claims to disputed islands, once reliable ally Myanmar flirting with democracy and renewed American attention to the region. (AP Photo/Vincent Thian, File)

BEIJING (AP) - China is finding the once friendly ground of Southeast Asia bumpy going, with anger against Chinese claims to disputed islands, once reliable ally Myanmar flirting with democracy and renewed American attention to the region.

Lobbying, a Windfall and a Leader’s Family

Ping An, one of China’s largest financial services companies, is building a 115-story office tower in Shenzhen. The company is a $50 billion powerhouse now worth more than A.I.G., MetLife or Prudential. 

SHENZHEN, China — The head of a financially troubled insurer was pushing Chinese officials to relax rules that required breaking up the company in the aftermath of the Asian financial crisis.  

The survival of Ping An Insurance was at stake, officials were told in the fall of 1999. Direct appeals were made to the vice premier at the time, Wen Jiabao, as well as the then-head of China’s central bank — two powerful officials with oversight of the industry.