In 2014, an unusual book topped bestseller lists around the world: Capital in the Twenty-first Century, an 816-page scholarly tome by the French economist Thomas Piketty that examined the massive increase in the proportion of income and wealth accruing to the world’s richest people. Drawing on an unprecedented amount of historical economic data from 20 countries, Piketty showed that wealth concentration had returned to a peak not seen since the early twentieth century. Today in the United States, the top one percent of households earn around 20 percent of the nation’s income, a dramatic change from the middle of the twentieth century, when income was spread more evenly and the top one percent’s share hovered at around ten percent. Piketty predicted that without corrective action, the trend toward ever more concentrated income and wealth would continue, and so he called for a global tax on wealth.
25 October 2017
Quartz: Eastern Europe’s major economies are having an underappreciated “Goldilocks moment”
The IMF now forecasts that “emerging and developing Europe” economies to grow 4.5% this year, upping their prediction by 1.5 percentage points from six months ago. This increased optimism is based, in part, on bumper growth in the second quarter of 2017, when Romania’s economy increased 5.7% versus a year earlier, the Czech Republic’s by 4.7%, and Poland’s by 4.4%. By comparison, the EU average was 2.4% growth over the same period.
All of these economies are still heavily reliant on manufacturing, exporting much of their production to the rest of the EU. For example, the Czech Republic—er, Czechia—has the lowest unemployment rate in the EU and about 35% of the Czech labor force is employed in manufacturing, the highest proportion of any EU country. When Europe is growing, demand for the things made in these economies grows. Often this means cars: automakers including Toyota, Volkswagen, and Peugeot have factories in the Czech Republic. Romania’s largest exporter is Dacia, a subsidiary of French car company Renault. [...]
Poland is also benefiting from a surge in workers from Ukraine. It’s estimated that as many as 1 million Ukrainians are working in Poland at any one time, who come for higher wages and more opportunities, especially since the recession that hit after the 2014 annexation of Crimea by Russia. Ukrainian workers have helped address Poland’s demographic issues—an aging population and low fertility rate—in addition to counterbalancing the emigration of millions of Poles after the nation joined the EU in 2004. [...]
For now, the benefits of their economic models seem to outweigh the risks, so the EU’s eastern economies are likely to keep growing, according to JPMorgan’s Amoa. EU funds are there to be invested, central banks have supportive monetary policies, and political tensions aren’t yet at a breaking point. JPMorgan Asset Management is buying these countries’ currencies and government bonds in Poland, Amoa said.
Vintage Everyday: Amazing Photographs of 1980s New York City Subway Through the Lens of a Teenager
Most of these photographs below were shot in 1982 and 83 by native New Yorker Ken Stein when he was 17 and 18 year old, and was the staff photographer for a weekly community newspaper in The Bronx. Through his work he managed to capture the spirit of a New York quite different than the one we currently know, one with an undertone of danger and edge that has transformed over the past few decades. "The city was different back then," he told Gothamist. "I think it was quieter, the street lights were darker, there was more room to walk and more places to wander—often everything seemed new and the different areas of the city were just that; different."
Ken Stein recently shared some of his old photos of New York City from the 1980s on his Flickr page. "I pulled my slides from 20 years ago out of storage and began scanning them. It's like a portal back to my teenage years when i dreamed of going to art school to become a photojournalist."
SciShow Psych: What Causes Near-Death Experiences?
The light at the end of the tunnel, the peacefulness, your life flashing before your eyes—it's all been documented thoroughly in pop culture. What usually gets left out, though, are the potential scientific explanations for what happens to your brain during a brush with death.
Bloomberg: How Ukraine's Elites Are Holding the Line
The Ukrainian government, however, shows signs of lapsing into a "muddling-through" mode. The pension reform required by the International Monetary Fund to stabilize public finances has been watered down with 1,000 legislative amendments. President Petro Poroshenko and his cabinet are not pushing hard on another key element of Western aid conditionality, the introduction of a free market in land, because the immediate benefits are uncertain. The Russian market for Ukrainian agricultural goods is all but closed, the quotas for exports to the EU are tiny, and the owners of Ukrainian agricultural businesses fear that, once land can be bought and sold, foreign competitors with deep pockets will eat them alive. Privatization efforts have largely failed because of a lack of investor interest ("Corruption and war are not incentives to invest," the Chatham House report notes drily.) [...]
Meanwhile, the Ukrainian political elite is strikingly unpopular. Poroshenko is still the most popular choice for president, but according to the latest poll by the Razumkov Center for Political and Economic Research, only 9.3 percent of Ukrainians would vote for him now. Just 9.6 percent would vote for Poroshenko's party, now the biggest in parliament. That's understandable: According to the World Bank's October report on Ukraine, poverty is still higher than it was before the 2014 revolution. Ukraine traditionally runs extremely long election campaigns, and it's time for Poroshenko to prepare for the 2019 election. Both he and the parliamentary parties have strong incentives to use the fruits of macroeconomic stabilization and tax reform to boost social spending. That's already happening: The World Bank expects the public deficit to exceed its 3 percent target this year after hitting 2.2 percent in 2016. [...]
Poroshenko and his team have hit a point where neither the Western donors nor Putin can apply much pain without overreaching themselves. Last week, a group of opposition parties and civil society movements -- including some of the organizers of the original 2013 protests -- tried to stage a major rally in the government quarter in Kiev to demand "a big political reform" including tougher action on corruption. The protest, however, wasn't well-attended. Unlike in 2013, Ukrainians are not ready to rise up for pro-Western or, much less, for pro-Russian causes.
Social Europe: Europe’s Attackers From Within (Joschka Fischer)
On October 1, the Catalan government held an independence referendum in which less than half – some estimates say a third – of the region’s population participated. By the standards of the EU and the Organization for Security and Cooperation in Europe, the vote could never be accepted as “free and fair.” In addition to being illegal under the Spanish constitution, the referendum did not even have a voting register to determine who was entitled to participate. [...]
The EU is an association of nation-states, not regions. Although regions can play an important role within the EU, they cannot stand in as an alternative to member states. If Catalonia were to set a precedent of secession, encouraging other regions to follow suit, the EU would be thrown into a deep, existential crisis. In fact, one could argue that nothing less than the EU’s future is at stake in Catalonia today. [...]
One can only hope that reason will prevail, particularly in Barcelona, but also in Madrid. A democratic, intact Spain is too important to be jeopardized by disputes over the allocation of tax revenues among the country’s regions. There is no alternative but for both sides to abandon the trenches they have dug for themselves, come out to negotiate, and find a mutually satisfactory solution that accords with the Spanish constitution, democratic principles, and the rule of law.
Social Europe: Dutch Aggression
On September 26, Emmanuel Macron made a speech on new a vision for Europe. He spoke about the need to harmonize corporate taxes in the European Union, tackle tax avoidance and protect our welfare states. Just one day later President Trump gave a speech on exactly the same topic, albeit with an entirely different message. He vowed to lower corporate taxation for American companies by a whopping 15 percentage points.
Unintentionally, the two speeches give an excellent illustration of the dilemma that countries, and especially EU countries, face. This is a result of a new logic in corporate taxation, in which 20th century tax systems designed for brick-and-mortar industries are no match for the 21st century developments of digitalization and globalisation. The choice is clear. Either countries work together to tackle the ingenious tax avoidance schemes ran by multinationals, or they participate in the cynical race towards the lowest tax rate. [...]
In that sense, the Netherlands sets a bad example, taking a step back from earlier solutions, and thus genuflecting towards Trump’s bogus solution. The new four-party cabinet revealed its plan to reduce the corporate tax rate incrementally from 25 to 21 percent, and even from 20 to 16 percent for the first €200K of profit. Besides that, a 15 percent tax on shareholder dividends will be removed. Any reference to an EU-coordinated effort to modernise the corporate taxation system is missing. All that said, one good thing is that the incoming government wants to introduce a source tax on royalties and interest to counter the Netherlands’ reputation for facilitating letterbox companies.
Deutsche Welle: Saudi Crown Prince Mohammed bin Salman pledges more 'moderate' kingdom
Saudi Arabia's Crown Prince Mohammed bin Salman said his country would become more "moderate" and "open" on Tuesday and pledged to "eradicate" radical Islamist ideology from the Gulf kingdom.
"We are returning to what we were before – a country of moderate Islam that is open to all religions and to the world," the 32-year-old said at a major investment conference in Riyadh. [...]
In September, the Saudi government issued a decree that overturned a previous ban on women driving. Some officials have hinted the government may soon permit long-banned cinemas.
The young prince has also been the primary force driving "Vision 2030," an initiative designed to wean Saudi Arabia off of its traditional dependency on oil revenues by creating a more dynamic and diverse Saudi economy. [...]
Earlier Tuesday, bin Salman promised the conference attendees, which included representatives from some of the world's largest companies, that the Gulf kingdom will create a massive economic zone along the country's northwestern coastline.
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