Tag Archives: Economy

Fiscal Cliff Averted, But What’s Next?

The Fiscal Cliff has been averted. Due to savvy political maneuvering and the dedication of senior lawmakers, the self-created asteroid of austerity set to strike at the heart of American economic recovery has been disintegrated by the atmosphere of bipartisanship and compromise… well… sort of. While the President has managed to get enough Republicans in line with his vision on taxes, the issue of spending has still not been addressed. Through the legislation, the automatic across-the-board cuts (know as the sequester) have been put off for two months.

So technically the cliff hasn’t been avoided, it’s been cut into two less scary hills or, maybe, two moderately imposing sets of stairs, one of which still looms ahead. Ridiculous metaphors aside, this means the discussion on spending will happen at the same time as the debate about raising the debt ceiling. On the latter point the President articulated in last night’s briefing that:

‘I will not have another debate with this Congress about whether they should pay the bills that they’ve already racked up.’

This is a firm position to take and is indeed an attempt by the White House to capitalize on its recent victory and set the tone for the upcoming debt ceiling discussion by saying it’s not up for discussion at all. Whether this is wishful thinking remains to be seen, but one thing is for sure, the discussions surrounding the other major issue, spending, will be ugly.

The GOP, in the House particularly, just sacrificed on some pretty fundamental points of their economic ideology, namely that if you tax rich people less they’re inclined to invest more that this creates jobs. The most substantive gain that the GOP got was raising the income threshold for tax hikes from $250,000 to $450,000. A number they could have had at $1 million had they taken up Speaker Boehner’s Plan B. Simply put, they come out of this discussion looking like the losers and will be fighting hard for a win on spending.

While the President can walk tall after his recent victory, in the upcoming spending discussions he has less to negotiate on. The tax issue has been put to bed so options for compromise are limited. However he does hold one card that the GOP lacks, the President doesn’t need to run for re-election.

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Photo Credit: United States Government

George Osborne’s Welfare Cuts: A Necessary Step

There are plenty of opportunities out there to get some form of qualifications and work your way up towards an average salary which is able to support a small family. Not only is having a job beneficial to the economy, but it also creates a positive atmosphere in a particular community and in the nation as a whole.

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the welfare state is proof of god

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During his Party Conference speech on the 8th of October George Osborne has proclaimed that the Government will press ahead with plans to cut £10 billion from the welfare budget by 2016-17 on top of the £18 billion cuts already under way. Osborne has secured the agreement of Work and Pensions Secretary Iain Duncan Smith, something he said would be necessary in order to avoid additional cuts in other Whitehall departments. The announcement, made in Osborne’s speech to the Conservative Party conference in Birmingham, will set the Tories on collision with their Liberal Democrat coalition partners.

Nick Clegg told his party’s conference last month that he would not allow “wild suggestions” of a £10 billion cut in welfare, while Chief Secretary to the Treasury Danny Alexander said, “We simply will not allow the books to be balanced in a way that hits the poorest hardest.”

The rhetoric by George Osborne will undoubtedly create new tensions between the political right and left, between the supporters of cuts and the supporters of spending to kick start the economy. It is perhaps too easy to claim that George Osborne is taking a typical Conservative means to end the deficit – cut the funding to the poorest while the rich are left unscathed. I am going to lay down all my cards on the table and truthfully say that I am personally not a fan of the Conservatives. In fact I am a member of the Green Party therefore in theory I should despise any policies put forward by the Tories. However, George Osborne and his team are onto something with their idea on cutting the welfare budget and in this article I will explain why.

When I immigrated to Britain in 2001 from Russia, I was surprised to learn that thousands of people in this country are able to be unemployed yet still live fairly comfortably. In Russia, if a citizen does not have a job, chances are he may end up on the streets. Even as a young child back then I was proud that a country like Britain looks after their citizens who were unlucky enough to be jobless. But as I grew older I realised an uncomfortable truth, that many of these jobless citizens chose to be unemployed and made the jobseekers benefits their life choice. As I studied the whole purpose of the welfare system, I learned that benefits were meant to be a safety net for the society rather than something people jump on in order to escape employment and watch Jeremy Kyle instead. It angered me that some people choose to live their whole life on welfare benefits and I began supporting the Conservative Party for a number of years.

Yet even now, as a centre-left individual, I believe that there should be cuts to the welfare budget. Having watched a programme recently on a council estate in Blackburn and having heard some young people on the programme claim that they are on benefits “because it’s just easier than getting up early every morning” I thought it was time for the government to take some measures.

George Osborne put forward an idea that families who have children for the sake of receiving child benefits will also feel the full wrath of the welfare cuts. Once again, I have to agree that this is a necessary action to take.  In my short lifetime, I have lived in some poor areas and I was saddened to see poor families having children for the sake of having more cash rather than because they genuinely wanted to create a family. Not only am I a believer that it is wrong to bring children into this world if you are not able to financially support them, but I am also a believer that bringing up children without fully understanding the responsibilities it will entail to bring these children up properly will create a nasty vicious circle. This circle goes round as follows: a financially poor mother has a child, the father of the child is long gone, the mother is unable (or does not want to) bring her child up properly, the child grows up with no respect towards society and his country and thus also takes the life of a benefit scrounger and/or a criminal.

Ultimately it is important to change the culture of Britain. Irrespective of my leftward-leaning ideology, I am happy to announce my belief that some citizens of this country must stop relying on Jobseeker’s Allowance and child benefit to get through life. There are plenty of opportunities out there to get some form of qualifications and work your way up towards an average salary which is able to support a small family. Not only is having a job beneficial to the economy, but it also creates a positive atmosphere in a particular community and in the nation as a whole.

Having said all of that, I undoubtedly understand that the current economic situation in Britain is dire and the rate of unemployment is high. Of course citizens who genuinely cannot find a job must receive benefits in order to support themselves while they search for employment. Nevertheless, there are far too many people who see benefits as “free money” rather than a safety net, and against all odds, I am therefore supporting the policies by George Osborne to cut the welfare budget.

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Photo credit: Bettysnake

US Presidential Election Roundup 1/9 – 8/9

This week’s roundup of the US Presidential elections..

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Romney ‘bounce’ fluctuates [Reuters] After his speech to the Republican National Convention, a brief boost to Mitt Romney’s poll popularity has subsequently deteriorated.

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RNC behind in ratings [Nielsen Wire] Nielsen reports that the last night of the Republican National Convention was watched by around 8.6 million fewer people than in 2008.

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Axelrod criticises Republican platform [National Journal] Obama campaign adviser David Axelrod has said that the Republican platform is ‘locked up in the same vault as Mitt Romney’s tax returns.’

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Obama responds to Clint Eastwood [CNN] President Obama has said that he was not offended by Clint Eastwood’s address to the Republican National Convention.

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North Carolina poll tie [The Hill] The left-leaning Public Policy Polling said this week that Mitt Romney and President Obama are tied at 48% in North Carolina.

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Poor reception for Romney address [NBC] Respondents to a Gallup poll gave Romney’s convention address historically low ‘excellent’ or ‘good’ ratings.

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Obama visits Louisiana [The Guardian] President Obama has visited areas affected by hurricane Isaac this week.

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Ryan goes fundraising [NBC] NBC reports on the Republican VP nominee’s fundraising schedule for the week.

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Obama ad attacks Romney’s tax proposals [The Hill] A new Obama campaign ad has criticised Mitt Romney’s tax proposals, suggesting that they will raise taxes on the middle class.

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Ryan makes Carter comparison [CNN] Republican VP nominee Paul Ryan has suggested similarities President Obama and President Jimmy Carter, who lost the presidency to Ronald Reagan after one term.

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Washington DC voting rights campaign continues [Washington Post] The Washington Post reports that campaigners for congressional voting rights in the District of Columbia will travel to the Democratic National Convention to further their case.

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Obama accuses Romney of distortions [USA Today] In an interview, President Obama has criticised Mitt Romney for ‘creating a fictional Barack Obama.’

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Obama ahead in Michigan and Colorado [Talking Points Memo] Public Policy Polling has found that President Obama is ahead of Mitt Romney by 7 points in Michigan and 3 points in Colorado.

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Romney ahead in North Carolina [The Hill] Despite earlier reports of a tie, multiple polls have suggested that Mitt Romney is ahead in North Carolina.

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Pelosi makes case to women voters [The Hill] Nancy Pelosi has commented on the benefits of re-electing President Obama for women.

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Romney comments on global warming [The Hill] Mitt Romney has said that he believes ‘human activity’ contributes to climate change.

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Romney attacks Democrats for Jerusalem stance [CBS News] Mitt Romney has criticised the Democratic party platform for not acknowledging Jerusalem as the capital of Israel.

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Ryan weighs in on debt [Politico] Paul Ryan has commented on the news that the US national debt has increased to $16 trillion.

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Israel quotes clarified [Fox News] Michael Oren, the Israeli ambassador to the United States, has denied that he described Republican policies as ‘dangerous’.

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Michelle Obama addresses DNC [ABC] First lady Michelle Obama has given her speech at the Democratic National Convention.

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Emanuel to focus on fundraising [Huffington Post] Rahm Emanuel is leaving his post as national co-chairman at the Obama campaign to assist the pro-Obama Priorities USA Action super PAC in raising funds.

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‘Mansion’ used for Romney debate preparations [CNN] CNN reports that the Romney campaign is using a ‘$3.9 million’ property to prepare for the upcoming presidential debates.

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No balloons at DNC [Huffington Post] A change in location due to poor weather conditions means that the traditional convention balloon drop will be absent from the Democratic National Convention.

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Media costs after DNC venue change [Politico] Reports suggest that the change of venue for the last night of the Democratic National Convention will cost media organisations ‘hundreds of thousands of dollars.’

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Convention conflict in Jerusalem vote [Huffington Post] A vote to change elements of the Democratic party platform on Jerusalem after criticism from Republicans has been met with hostility from the floor.

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Clinton addresses DNC [Reuters] Former President Bill Clinton has given his speech at the Democratic National Convention.

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Biden gives DNC address [Huffington Post] The full text of Vice-President Joe Biden’s address to the Democratic National Convention.

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President Obama addresses DNC [National Journal] The full text of President Barack Obama’s address to the Democratic National Convention.

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‘Final campaign sprint begins’ [Reuters] With the party conventions now at an end, the Obama and Romney campaigns enter the final stage of presidential race.

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Romney ‘pounces’ on Obama [Reuters] After the release of disappointing job figures, Obama is challenged by Romney.

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Democrats’ ‘headache over Jerusalem’ [BBC] Obama personally intervenes to ensure that the Democratic Party’s main policy document includes the sentence “Jerusalem is and will remain the capital of Israel”.

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Compiled by Patrick McGhee.

Putin: From Hero To Zero?

As opposition grows in the former Soviet state, is Vladimir Putin’s credibility diminishing in the eyes of the Russian people despite his recent re-election?

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Putin

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[dropcap]A[/dropcap]s Putin took the oath to become President, an office he first occupied 12 years ago, he said that serving Russia “was the meaning of my whole life”. If that is the case then he certainly has done a good job so far. During the Putin era, Russia has changed considerably. The country has doubled its GDP, paid off its foreign loans, reasserted its regional influence and tricked the Russian citizens into thinking that Russia is an authentic democracy.

Yet not all is well in the quest for Putin to serve Russia without any hindrance. The protests seem to be only growing in strength and their cry for political representation and respect is growing louder. Putin could have left politics 12 years ago as a hero and as one of the best leaders of Russia. Yet he decided to come back for more and test the crowd’s patience. To understand why Putin decided to do that is not easy as not much is known about the man behind the steal exterior.

By observing how he ruled the state of Russia during his first term as President, it is possible to argue that Putin is certainly power hungry and has an uncontrollable need to regulate power using the institutions he built up himself. As his time as President wore on around the year 2004, Putin succumbed to the urges to consolidate control and purge potential rivals. The money which flooded in through oil and gas sales certainly helped Putin to stamp his authority and more importantly keep the Russian citizens happy by increasing their wages and pensions. The price that the people had to pay was authoritarian control under Putin and a lack of decent opposition, be it political opposition or a truly free press.

In exchange for loyalty (often in the form of votes), officials further down the bureaucratic chain, from regional governors to local police chiefs, can oversee their fiefdoms however they like, collecting millions or allowing abuse to flourish. On a more international level, the current Chechnya President Ramzan Kadyrov also sits in the pocket of Putin as he said in the Russian newspaper in 2009: “I am wholly Putin’s man. I shall never betray him; I shall never let him down. I would rather die 20 times.” Ultimately Putin has built a peculiar set of relationships. His game plan is: support me and I might support you back. Disobey me and you will regret it. Mikhail Khodorkovsky, the former multi billionaire Russian tycoon who was put in prison certainly learned the hard way not to disobey Putin.

Nevertheless, how will Putin be able to deal with the masses of protestors who disobey him? Russia’s profound economic and social transformation during Putin’s tenure has created for the first time a true middle class, largely comprised of educated urban professionals living in Moscow. As this section of Russian society has become more secure financially, they are beginning to worry about having a political voice. The recent upsurge in technological advances and internet access in Russia, with greater access to the Western media, has also helped to ensure that the middle class ask for more.

It is ironic how the same people who want Putin out are the ones who have to thank him for ensuring their economic and social stability. Some may call them ungrateful, yet in every normal democracy, it is the citizen’s right to ask for fair elections and last December’s parliamentary elections which were marked by widespread evidence of falsification certainly didn’t not meet the standard required by the people of Russia. The problem does not merely lie within the confines of urban cities; rising standards of living in small villages are leading to higher expectations and local grievances, whether about poor infrastructure or particularly corrupt officials with discontent directed back at Russia.

The way Putin has dealt with the above problems is simple: he has provided the citizens with choices and freedoms everywhere except politics. The Russians can now afford to open their own business, travel abroad on holiday and become part of the consumers as witnessed in the West. As long as the citizens are given the freedom to make something decent out of their lives, not many of them will bother protesting in the freezing Russian streets. Having said that, if Russia continues to feel the effects of the global economic crisis and financial stability continues to falter, the citizens may turn on Putin at the flick of a finger.

We are still yet to see where Putin takes Russia during his new Presidential term in office. If he plays his cards right, he may still keep his status as one of the best politicians in the country. However, if his bluff fails, he may end up going from hero to zero and he would have nobody to blame but himself.

America & Japan: The Strangest Of Friends

In previous wars involving America and Japan, military clout was everything, now it is no more than a side show. Today, the war will be over oil, trade routes and national debts, and in every factor, it is China that is on the attack.

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USA and Japan

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[dropcap]I[/dropcap]n 1940, when the US cut the supply of oil to Japan, they began a chain of events which within the year would result in the Japanese attack on Pearl Harbour, and within five years the destruction of the majority of every Japanese city by US bombing raids leaving hundreds of thousands dead. The seizure of Japan by the US, and the partitioning of their remaining territory with Russia and China has defined the northern pacific ever since.

And yet tomorrow, Japan’s Prime Minister is making a trip to Washington D.C. to discuss the future terms of a very different relationship from the one played out between defeated enemy and victorious occupier. Though many still live with memories of the burning ships in Pearl Harbour or the flashes of nuclear bombs over Hiroshima and Nagasaki, no other pairing between two former enemies has appeared so close. After half a century of US-imposed pacifist governance, their maritime partner is now inviting Japan to join them in a very different balance of power to the one that began a century ago.

All that time ago, the US had a very limited presence in the pacific, being more interested in holding the rest of the world back from the Americas, its own personal sphere of influence. Britain’s power was beginning to fade as Germany challenged its dominance and the Boers proved a challenge they should not have been. But China, the empire which had remained a constant centre of power for millennia, had been struck down by the European powers. The vice-like-grip of the Dutch East India company began a downfall cemented by the opium wars against Britain, leaving a crippled state more than tempting to the insatiable appetite of Japan. Where European influence had broken China, it had opened the isolated isles of Japan to a world they were more than prepared to face, armed by the US they broke the Russian fleets and seized Korea and Manchuria, their influence stretching across the isles of the pacific. They ate up the Chinese coast and Indo-China, struck down only when those who had once supplied and financed their war efforts drew back in horror at the devastation they were unleashing on Asia, and visited it back upon them tenfold.

In the years after the bombs dropped in their thousands upon the cities of Japan, engulfing them in fire-storms the world had never seen, Japan recovered more swiftly than anyone could have expected. As the first of the Asian dragons they leapt upon opportunities as they came, and emerged an economic powerhouse. But with the rise of the USSR and then China, the Japanese grew ever closer to the one force which could hold the hungry expansion of communism at bay, their previous occupiers.

In what strikes as a nation-scale case of Stockholm Syndrome the Japanese stuck fast to the US throughout the new two-sided conflict with communism, taking capitalism to heart as no other country had done. After Japan regained independence in 1952 the US proved their worth as protectors in the Korean war, holding back the hordes of China and the USSR. A long relationship would continue to warm as the US declared its dedication to protecting Japan against all military threats in a treaty in 1960, and would return the islands seized in 1945 before 1972. As the USSR collapsed and the US turned its attention to the Middle East, Japan would return the favour by deploying its first set of troops since 1945 to Iraq, and developing missile systems with the US. With the fading wars in Europe, and the increased anchoring of Britain to the ever growing political clout of the supranational EU, Japan may very well be set to replace Britain as the true special partner of the US.

Just as Britain formed a special relationship with the colony responsible for the first chink in its ever-growing global empire, so Japan seems to have formed a relationship with the power which destroyed its empires and cities in the interests of protection and the prospects of a future world order. As China continues to rise just across the sea, and the death of Kim Jong-Il seems not to have hampered the isolated insanity of North Korea, Japan represents one of the few fronts in the increasing clashes between China and the 20th Century’s greatest superpower. As Japan drags itself away from the brink of economic crisis and the destruction of the tsunami, it will rise above the waters to see an ever-more aggressive and able China more than willing to flex its muscles in an international arena unrecognisable a century ago.

In this new arena the US is backing a faltering Japan in the face of an increasingly aggressive China in a mirror image of the events of 1940. Then, the conflict was open for all to see in the unstoppable march of Japan’s armies, now the change of hands is more subtle. The early 1990s financial crisis set back the progress of Japan in the same way the opium wars broke the military muscle of China, and now China is marching onwards in a war of economics and trade the indebted Japan may struggle to resist. Even as the US sets up forces in Australia, and Japan’s military begins its first significant expansion, they may be facing a very different shift in power. Expecting a declaration of increased military co-operation between Japan and the US, Guam is to rise as the new pacific military hub for the two powers and will represent a new militarism in Japan not seen in half a century.

Japan finds itself on the opposite side of a new pacific war against an expansionist power. But while previously military clout was everything, now it may be no more than a show. Today the war will be over oil, trade routes and national debts, and in every factor right now China is on the attack.