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One of the great hopes of health care reform is that it will reduce the number of Americans who file for bankruptcy because of medical debt. A new study in Massachusetts is providing evidence that the reform law passed in that state in 2006, and which served as the model for the Affordable Care Act, is indeed making a significant dent in bankruptcy filings.
As fellow tech giants have reached billion-dollar deals in recent years to add significant new arms to their businesses, Apple has ventured down a different path. The company has avoided jaw-dropping takeovers in favor of a series of smaller deals, using the companies to buttress or fill a gap in products that already exist or are in development.
While historic winter storms have battered much of the US, California is suffering its worst drought on record. So why is America’s most valuable farming state using billions of gallons of water to grow hay – specifically alfalfa – which is then shipped to China? Cheap water rights and America’s trade imbalance with China make this not just viable, but profitable.
Republicans sputtered with outrage when the Congressional Budget Office said that immigration reform would lower the deficit, strengthen Social Security and speed up economic growth. What Republicans fail to mention is that Tuesday’s report from the budget office, a federal nonpartisan agency, was almost entirely positive about the benefits of raising the minimum wage to $10.10 by 2016.
Putting aside GMOs for the moment, how many of the groceries sold at Walmart would never be stocked on Whole Foods shelves? The 78 ingredients on their blacklist end up comprising over 54% of all the foods sold in Walmart stores. What’s more, approximately 97% of the soft drinks/soda sold at Walmart contain ingredients that Whole Foods considers “unacceptable.”
You don’t really read the endless pages of terms and conditions connected to every website you visit or phone call that you make, but every day billion-dollar corporations are learning more about your interests, friends, family, finances and secrets precisely because of this, are selling the information to the highest bidder, and you agreed to all of it.
If George Orwell were to return from the Spanish civil war today, he would be arrested under the Terrorism Act 2006. If convicted of fighting abroad with a “political, ideological, religious or racial motive” he would face a maximum sentence of life in prison, but not, strangely, if he possessed a financial motive. Far from it: such motives are now eminently respectable. You can even obtain a City & Guilds qualification as a naval mercenary. Sorry, “maritime security operative”. As long as you don’t care whom you kill or why, you’re exempt from the law. But what clearer case could there be of the “use or threat of action … designed to influence the government … for the purpose of advancing a political, religious, racial or ideological cause” than the war with Iraq?
As research continues and other nations increasingly invest in R&D, nanotechnology is moving from the laboratory to commercial markets, mass manufacturing, and the global marketplace–a trend with potential future import that some compare to history’s introduction of technologies with major economic and societal impact, such as plastics and even electricity.
Obama’s desire for fast-track authority on the TPP and other agreements clashes with reducing income inequality. Data on NAFTA poses a significant challenge for President Obama. He said he wants to battle the plague of income inequality and to expand the NAFTA model with TPP, but he cannot have it both ways.
The world’s wealthiest people aren’t known for travelling by bus, but if they fancied a change of scene then the richest 85 people on the globe – who between them control as much wealth as the poorest half of the global population put together – could squeeze onto a single double-decker.
The greatest danger is one that will not be faced for decades but that is lurking out there. If we move to a system where half of the country is either stagnant or losing ground while the other half is surging, the social fabric of the United States is at risk, and with it the massive global power the United States has accumulated.
Unless something goes unexpectedly wrong in 2014, the level of real per capita GDP in the United States will match and exceed its 2007 level. That is not good news. US output is now seven years – 14% – below the level that was reasonably expected back in 2007. If we combine the costs of idle workers and capital during the downturn and the harm done to the US economy’s future growth path, the losses reach 3.5-10 years of total output. That is a higher share of America’s productive capabilities than the Great Depression subtracted.
President Obama’s speech on inequality was important in several respects, but there’s a crucial dimension the president left out: the revival, since the mid-1970s, of the laissez-faire ideology that prevailed in the Gilded Age. It’s no coincidence that this laissez-faire revival has unfolded over the very period in which inequality has soared to levels not seen since the Gilded Age.
Over the course of American history, support for economic redistribution has been the exception, not the rule. The substantial gains of the left on cultural and social issues and recent electoral victories in New York and Boston have created a misleading perception among liberals that the country is moving in the same direction on economic issues. That is not the case: an ethos of self-reliance and individual responsibility continues, as it has for the past 237 years, to grip the American imagination.
BlackRock’s Aladdin keeps its eyes on almost 7% of the world’s $225 trillion of financial assets. This is unprecedented—and it means flaws in the system could matter to more than just BlackRock, its investors and its customers. If that much money is being managed by people who all think with the same tools, it may be managed by people all predisposed to the same mistakes. If models are always wrong, as BlackRock posits, it should perhaps be a little worried that so many people are using the ones it offers.
The same kinds of politics that influence other aspects of society also help explain why some countries, such as the United States, suffer repeated banking crises, while others, such as Canada, avoid them altogether. A country does not choose its banking system; it gets the banking system it deserves, one consistent with the institutions that govern its distribution of political power.
Ultimately, what stands in the way of meaningful change is the Controlled Substances Act. As long as it is in place, the Justice Department will bring forward marijuana prosecutions. President Obama is unlikely to spend political capital pushing to change federal law. The man marijuana reformers elected in 2008 will likely leave office in January 2017 having changed as little as possible.
The rise of cat bonds and other “insurance-linked securities” is starting to affect the price of insurance, particularly on the reinsurance side. Some weathered insurance executives are warning that naive investors are distorting prices, creating a frothy “shadow insurance” sector with systemic implications.
Germany slaughters 58 million pigs a year and has built an efficient meat industry second only to the US in pork exports. Its optimized breeding, feeding and killing system churns out wondrously cheap cutlets — but at a hidden cost to the environment and our health.
The growing rate of default on home mortgages in America precipitated the financial crisis. These delinquencies became impossible for some investment banks to bear. The contagion spread and nervous banks and other creditors stopped lending. Recessions and financial rescues led to a surge in government debt which raised fears about the solvency of various countries in the euro area. Debt was both a cause and a consequence of the crisis.
A world “government” could never have democratic legitimacy, but the idea of world government can illuminate a sensible path for capturing the benefits of a more effective global polity. Given a fully interdependent global market, we should worry less about the risk of bad rules and policies from imperfect global institutions and more about how to exploit these institutions’ potential to lock in policies at home and abroad that minimize risks and maximize opportunities for people everywhere.
Novelist John Lancaster, given access to the Snowden Files, discusses his impressions. At a moment of austerity and with a general sense that our state’s ability to guarantee prosperity for its citizens is in retreat, that same state is about to make the biggest advance ever in its security powers. Our spies and security services can, for the first time, monitor everything about us, and they can do so with a few clicks of a mouse and – to placate the lawyers – a drop-down menu of justifications. Looking at the GCHQ papers, it is clear that there is an ambition to get access to everything digital. And yet nobody, at least in Britain, seems to care. Snowden’s revelations are not just interesting or important but vital, because the state is about to get powers that no state has ever had, and we need to have a public debate about those powers and what their limits are to be.
Increased regulation and low interest rates are driving lending from the regulated commercial banking system into the unregulated shadow banking system. The shadow banks, although free of government regulation, are propped up by a hidden government guarantee in the form of safe harbor status under the 2005 Bankruptcy Reform Act pushed through by Wall Street. The result is to create perverse incentives for the financial system to self-destruct.
Five years after the collapse of Lehman Brothers triggered the largest global financial crisis since the Great Depression, outsize banking sectors have left economies shattered. Worse, despite years of debate, no consensus about the nature of the financial system’s problems – much less how to fix them – has emerged. And that appears to reflect the banks’ political power.
It’s easy to be depressed about America these days. We’ve got messes aplenty abroad and the Republican-dominated House of Representatives is totally paralyzed. Fortunately, there is another, still “exceptional,” American reality out there. It’s best found at the research centers of any global American company.
The state has played a central role in producing game-changing breakthroughs, its contribution to the success of technology-based businesses should not be underestimated. There are many reasons why policymakers must modernise the state and bring entitlements under control. But one of the most important is that a well-run state is a vital part of a successful innovation system.
Just when you thought genetically modified mosquitoes and mutated dinner entrees were the extent of biotech’s hunger to manipulate the genetic coding of the planet, scientists have now unleashed a plan to launch thousands of ‘frankenfly’ style insects into the wild in order to combat pests.
It was laughable when Coca-Cola launched a campaign to fight obesity. And even more laughable when the king of soda’s anti-obesity campaign shifted all the blame for those extra pounds to lack of exercise and chairs. But now, the company that donated $1.7 million to defeat last year’s GMO labeling initiative in California has gone from laughable to dangerous.
Occasionally, the object of speculation has been one of those fundamental technological innovations that eventually transforms the economy. In these cases, the prospects of short-term financial gain from riding a bubble mobilizes far more investor capital than prudent professional investors would otherwise dole out.
The great battle of the 20th century was between the state and business. And the state was likely to win because the thinkers and bureaucrats at its service were better at occupying the moral and intellectual high ground. Today the problem is not the marginalisation of business but its excessive influence.
What Bezos saw that others didn’t was that his business was about distribution, not inventory or product categories. With the right system in place, Amazon will be able to deliver anything to customers the same day it’s purchased online. It marks the beginning of the end of shopping as the whole world knows it.
Walmart has grown into the greatest force in retail the world has ever known. Walmart now employs more than 2 million people, by far the most of any company and behind only the U.S. Department of Defense, the Chinese Army, and China’s state owned railway system. Like every empire to come before it, Walmart is beginning to rot from the inside out.
Mander draws attention to capitalism’s obsessive need to dominate and undermine democracy, as well as to diminish social and economic equity. Designed to operate free of morality, the system promotes permanent war as a key economic strategy. Worst of all, the problems of capitalism are intrinsic to the form.
Jessica is a social entrepreneur focused on empowering others through entrepreneurship and access to capital. She currently serves as a Venture Partner with the Collaborative Fund, focused on investing in creative entrepreneurs who want to change the world through emerging technologies.
John Doerr warns that carbon-dioxide-sputtering, gas-powered capitalism will destroy us all, and that going green may be the “biggest economic opportunity of the 21st century.” So Kleiner Perkins has invested $200 million in so-called greentech, a combination of startups that are pioneering alternative energy, waste remediation and other schemes to prevent the coming environmental calamity. But Doerr is afraid that it might be too little, too late.
Central bankers have always carried a mystique far beyond justification. Even as their policies and procedures have become markedly more transparent, the air of secrecy and power about them persists. And the ongoing financial crisis has brought their activities to the center stage of both economic policymaking and political attention, even as the crisis has revealed many inherent limitations of monetary policy and economic forecasting more broadly.
I worry that because of the excess hype, 3D printing will soon suffer the same backlash as solar energy and electric cars. We are only in the early stages of 3D printing. The curve is flat for the foreseeable future. We are about to see a renaissance in design. So let’s be excited, but adjust our expectations – the large-scale manufacturing revolution will happen only after we become bitterly disappointed.
Many Europeans believe that China, one of the EU’s ten so-called strategic partners, behaves more like a competitor. And many Chinese, for whom the EU is just one of more than 70 strategic partners, complain that the EU’s policy toward China is more commercial than strategic. The time has come for the world’s largest developing country and largest bloc of developed countries to define and deepen their strategic partnership.
Capitalism rests on a foundation of myths. First, capitalism somehow “invented” entrepreneurship; second, capitalism provides the only “market” economy; third, only capitalism is compatible with “self-reliance” and individual responsibility; fourth, capitalism is the model of “efficiency,” when in truth it generates enormous waste of all kinds; finally, there Is No Alternative. All of this is nonsense. The economy of the Emilia Romagna region of Italy and its largest city, Bologna, is living proof.
The less free-market thinkers are regulated, the less they seem to care about others. They ignore the fact that America’s most productive eras were driven by progressive taxes that funded entrepreneurship in the middle class. And they fail to see the deficiencies in a system that relies solely on profit-making to the exclusion of social responsibility.
If you’d like to know where American political debates are headed, the data suggest a simple answer. The next major struggle – in economic terms at least – will be over whether taxes on personal wealth should rise – and by how much. Wealth-to-income ratios in these nations climbed from a range of 200 to 300 percent in 1970 to a range of 400 to 600 percent in 2010.
Hundreds of millions of times a day, thirsty Americans open a can of soda, beer or juice. And every time they do it, they pay a fraction of a penny more because of a shrewd maneuver by Goldman Sachs and other financial players has cost American consumers more than $5 billion over the last three years. Similar practices are taking place in other areas of commodities trading as well.
The world’s richest economies endorsed a blueprint to curb widely used tax avoidance strategies that allow some multinational corporations to pay only a pittance in income taxes. However, it could be years before any changes take place in national tax laws, and big corporations and other interest groups are sure to lobby heavily to preserve their tax breaks.
Entrepreneurship is the modern-day philosopher’s stone: a mysterious something that supposedly holds the secret to boosting growth and creating jobs. But what exactly is entrepreneurship (apart from a longer way of saying “enterprise”)? And how should governments encourage it? The policymakers are as confused as the gurus.
The New America Foundation is a nonprofit, nonpartisan public policy institute that invests in new thinkers and new ideas to address the next generation of challenges facing the United States. The foundation’s mission is animated by the American ideal that each generation will live better than the last. That ideal is today under strain.
The median compensation of chief executives at 200 of the nation’s biggest public companies came in at $15.1 million last year, a 16 percent jump from 2011. Is that excessive? One way to answer that question would be to look at the pay gap, the ratio of the pay of the chief executive to that of the company’s employees. But nobody really knows what the gaps are.
CEOs are legendary for defending their tax paying records, and eager to imply that government is responsible for any of their tax delinquencies. For example, just 32 companies avoided enough in 2012 taxes to pay the entire 2013 federal education budget. Changing the tax rules is a specialty of big business, but so is flouting the tax rules.
The 2012-13 high court session, which concluded June 26, saw the justices continue a multiyear pattern of interpreting regulations and statutes in a manner that insulates corporations from liability risks. The Supreme Court under Chief Justice John Roberts has narrowed the avenues available to employees and consumers seeking to take their grievances before a judge.
Britain’s top dozen ‘payday’ lenders – some charging interest rates of more than 4,000% – made almost £1bn in the last 12 months. The figure is more than four times greater than the turnover of the entire industry assessed just three years ago. Half of the biggest high-risk loan companies in the Bureau’s research also posted profit margins of more than 30%.
Progressive Democrats in Congress are ramping up pressure on the Obama administration to release the text of Trans-Pacific Partnership, a secretive free trade agreement with 10 other nations, amid intensifying controversy over the administration’s transparency record and its treatment of classified information.
While the public and media are not allowed to see the text of the Trans-Pacific Partnership, and members of Congress only receive limited, heavily restricted access, 600 corporations, including some of America’s worst corporate citizens, have been advising the president and suggesting amendments with full access to the documents.
Smart machines are evolving at breakneck speed and have reached a new social frontier. There are concerns that modern technologies will widen inequality, increase social exclusion and provoke a backlash. Policymakers need to think as hard about managing the current wave of disruptive innovation as technologists are thinking about turbocharging it.
Pricing carbon to reduce emissions and tackle global warming is moribund in Congress for now, but not elsewhere. A new World Bank report finds that more than 40 national governments and 20 sub-national governments have either put in place carbon-pricing schemes or are planning one for the years ahead.
The Sustainable Economies Law Center (SELC) charts the changing legal territory of the new economy, educating communities and individuals about the possibilities and limits of creative economic structures, and advocating for laws that clear the way for more sustainable economic development.
The struggle in Iceland is ongoing, but the nation’s people have achieved monumental results in a relatively short amount of time due to the nature of their movement building – five goals should be sought in the US: Strive For Unity, Turn a Few Central Demands into Goals, Be the Banks, Be the Government, Crowdsource a New Constitution.
Elder financial exploitation is the illegal or improper use of an older adult’s funds or property. It has been described as an epidemic with society-wide repercussions. While combating elder financial exploitation is largely the responsibility of state and local social service, criminal justice, and consumer protection agencies, the federal government has a role to play in this area.
B Lab is a nonprofit that serves a global movement of entrepreneurs using the power of business to solve social and environmental problems. B Corps are certified by the nonprofit B Lab to meet rigorous standards of social and environmental performance, accountability, and transparency. Certified B Corporations are leading a global movement to redefine success in business.
Investment bankers are a bright and resourceful lot. Some of the best minds of this generation are in search of the next big innovation in credit markets or risk management that will bring back the heady days before the financial crisis. But the industry’s voyage back to profitability will probably be slow, and not all banks will make it. Paradoxically, stricter regulation intended to tame banks that were thought too big to fail is leading to the creation of even bigger and more systemically important institutions.
Niall Ferguson is Laurence A. Tisch Professor of History at Harvard University. He is also a Senior Fellow at the Hoover Institution, Stanford University, and a Senior Research Fellow at Jesus College, Oxford. His books include Colossus: The Rise and Fall of the American Empire, The War of the World: Twentieth-Century Conflict and the Descent of the West, and The Ascent of Money: A Financial History of the World.
Economic growth, when widely shared, does more than increase living standards, it helps ease tensions within societies. Trade has an important role to play in boosting both growth and security, even more so when complemented by policies to ensure that its benefits are widely shared. Geopolitics is back. Or at least it should be – what we have been seeing instead is a paradox.
Income taken home by top earners in the United States has risen over the past few decades, along with popular concern about economic inequality. Outrage has centered on the compensation of the United States’ top corporate executives. The reality of executive compensation reveals a far different picture from this caricature of skyrocketing pay packages and crony capitalism.
The Supreme Court’s business decisions are almost always overshadowed by cases on controversial social issues. But the business docket reflects something truly distinctive about the court led by Chief Justice John G. Roberts Jr. They have been, a new study finds, far friendlier to business than those of any court since at least World War II.
The Global Sustainable Investment Alliance’s mission is to deepen the impact and visibility of sustainable investment organizations at the global level. Its vision is a world where sustainable investment is integrated into financial systems and the investment chain and where all regions of the world have coverage through membership institutions that advance sustainable investing.
Green Depot is the nation’s leading supplier of environmentally friendly building products, services and home solutions. Green Depot’s mission is to make green building products readily accessible, affordable and gratifying so that sustainable practices can easily be adopted into standard construction operations.
Some carmakers try harder than others to be green. Besides making their models cleaner to run, many carmakers are also trying to reduce the environmental impact of manufacturing them. Having been depicted as environmental villains since the 1950s, cars and their makers may soon be able to move out of the spotlight.
For consumers, homebuilders, and companies that want to feel confident that their buildings are made with environmentally friendly materials, it can be hard to know what building materials to use. Seizing on this lack of information in the market, and consumer interest in sustainability, Sarah Beatty started Green Depot.