26 March 2016
Conservative Government's Policies Likely to Increase Income Inequality in the UK
An article in this week’s issue of The Economist compares the effect on income distribution in Britain
of the fiscal policies of the 2010-15 Conservative-Liberal Democrat Coalition
Government and those of the current Conservative Government. While the benefit cuts imposed by the Coalition
Government reduced the incomes of the poor, the effects of those cuts were largely
offset by increased employment among low-income Britons. At the same time, wealthy Britons earned
smaller bonuses and paid higher taxes.
As a result, income distribution in the UK became more equal during the
Coalition Government.
The Conservative Government, however, is making even deeper
cuts to benefits payments: “spending on working-age benefits will fall three
times as fast in this parliament as in the last one” (64). These cuts will not be offset by increases in
earnings; unemployment is unlikely to fall further, and wages are projected to
fall in real terms. At the same time,
the Conservatives are cutting the taxes paid by the wealthiest Britons. The Economist,
therefore, predicts that income inequality will grow throughout the life of the
Conservative Government.
“In It Together?” The
Economist 26 March 2016: 64. The Economist Newspaper, Ltd. Web. 26 March
2016.
20 March 2016
The Uses of an Energetic Foreign Policy
An article in this week's issue of The Economist examines how Russian President Vladimir Putin has used Russian intervention in Ukraine and Syria to buttress his popularity with the public. Although Russia is suffering through a serious economic crisis, Putin's approval ratings are higher than they were five years ago; Russians are prepared to make significant sacrifices in their standard of living in order to stand up to what the Russian news media portray as Western bullying. Putin's foreign policy initiatives are limited, however, in one significant respect. His countrymen will not tolerate significant Russian combat deaths in a war outside Russia's borders:
http://www.economist.com/news/briefing/21694997-his-willingness-and-ability-act-abroad-gives-vladimir-putin-big-boost-home-strategy
http://www.economist.com/news/briefing/21694997-his-willingness-and-ability-act-abroad-gives-vladimir-putin-big-boost-home-strategy
19 March 2016
Economic Crisis Grows in Nigeria
The fall in the global price of crude oil has hit the Nigerian economy hard. With export earnings down, Nigerians have less foreign currency with which to purchase imports. This has resulted in shortages of essential goods, inflation, and growing corruption at the Central Bank of Nigeria, which decides which importers are able to buy foreign currency. According to The Economist, the efforts of Nigerian President Muhammadu Buhari to prevent the value of the Nigerian currency from falling (in order to limit inflation) are only adding to the country's economic problems:
http://www.economist.com/news/middle-east-and-africa/21695065-how-make-hard-currency-shortage-worse-can-you-spare-dollar
http://www.economist.com/news/middle-east-and-africa/21695065-how-make-hard-currency-shortage-worse-can-you-spare-dollar
Slower Economic Growth in China Fuels Labor Unrest
China's economy is not growing as rapidly as it was a decade ago. China's GDP increased by 12.7% in 2006 and 14.2% in 2007; the Chinese government's current target for annual economic growth is 6.5-7.0%. As a result, the Chinese economy is likely to shed millions of jobs in the coal, steel, aluminum and glass industries. The Chinese government predicts that 1.8 million Chinese workers will lose their jobs in the next five years; some private analysts forecast far greater levels of job loss.
Many of China's state-owned enterprises, moreover, are deeply in debt. Some of them have stopped paying their workers regularly. Unpaid wages, and the prospect of mass layoffs, have led to a dramatic increase in the number of demonstrations and strikes in China's industrial centers:
http://www.economist.com/news/china/21695091-large-protests-miners-augur-ill-governments-reform-plans-deep-pit
Many of China's state-owned enterprises, moreover, are deeply in debt. Some of them have stopped paying their workers regularly. Unpaid wages, and the prospect of mass layoffs, have led to a dramatic increase in the number of demonstrations and strikes in China's industrial centers:
http://www.economist.com/news/china/21695091-large-protests-miners-augur-ill-governments-reform-plans-deep-pit
China to Reduce Greenhouse Gas Emissions
China is moving decisively to reduce its reliance on fossil fuels. China will have little trouble meeting its commitment to reducing its total carbon dioxide emissions beginning in 2030; indeed, the country's total CO2 emissions may already have begun to decline. The Economist suggests that the Chinese government established too easy an emissions reduction goal for the country:
http://www.economist.com/news/china/21694577-research-shows-chinas-dirtiest-days-could-be-over-sooner-officials-say-aiming-low
http://www.economist.com/news/china/21694577-research-shows-chinas-dirtiest-days-could-be-over-sooner-officials-say-aiming-low
12 March 2016
Power Privatization in Nigeria Not Yet Successful in Boosting Supply of Electricity
In 2013, Nigeria privatized its electric power plants, as well as the local "distribution grids that carry power to homes and businesses" (46). Privatization was expected to increase the production of electricity in Nigeria, permitting the development of a more diverse, industrial economy. Power generation, however, has not increased significantly since privatization. A recent Economist article explains why:
"Powerless." The Economist 5 March 2016: 45-46. The Economist Newspaper, Ltd. Print.
"Powerless." The Economist 5 March 2016: 45-46. The Economist Newspaper, Ltd. Print.
Reformists and Moderates Make Gains in Iranian Elections
Iran's Guardian Council disqualified most of the reformist candidates ahead of last month's Majles and Assembly of Religious Experts elections. Nonetheless, reformist and moderate candidates made solid gains at the polls. The election results should help Iranian President Hassan Rouhani, a pragmatic moderate, enact modest economic and social reforms:
http://www.economist.com/news/middle-east-and-africa/21693937-boost-reform-long-way-still-go-mr-rohaniu2019s-complicated
http://www.economist.com/news/middle-east-and-africa/21693937-boost-reform-long-way-still-go-mr-rohaniu2019s-complicated
