Economist 6/30/14

  1.  Pamela Harris, a mother in Illinois, says she is not a state employee.Ms Harris looks after her severely disabled son at home. The government pays her to do this, via Medicaid. Because Ms Harris and other home-health assistants accept a cheque from the government, Rod Blagojevich, a former governor of Illinois, decreed in 2003 that they were public employees, and that therefore they could unionise.he state’s argument was that workers who did not join the union were still obliged to chip in “fair share” fees, as they also benefited from the union’s representation.”Illinois deems personal assistants to be state employees for one purpose only, collective bargaining,” wrote Mr Alito. Such bargaining has raised the hourly wages of home-health assistants from $7 in 2003-2007 to $11.65 now (with another increase to $13 coming in December),
  2. Mr Subrata Roy’s dream was to join the Indian Air Force. Instead he created Sahara India Pariwar, a conglomerate which spans hotels, a Formula One team and Macedonian dairy projects, but whose spine is a shadow bank that for decades has persuaded India’s underclass of rickshaw drivers, peasants and peons to trust it with their rupees. Sahara says it has 80m customers and a net worth of $11 billion, and that it is a victim of bullying officials. It has an army of 600,000 agents who go where big banks fear to tread, into the countless feudal villages that are untouched by formal finance.  In the 1970s it offered prize schemes. Then it sold housing finance and after that changed tack to become a “mutual benefit” firm. Later it raised deposits until the central bank ordered it to wind down in 2008 and repay $4.5 billion to depositors. By 2009 Sahara was selling the rural masses fiddly convertible bonds. In 2011 the securities regulator demanded that Sahara refund $5 billion of these bonds. Only 35% of adults have bank accounts and less than a third of household savings goes into the formal financial system, with gold and local moneymen being popular alternatives.
  3. On June 25th Etihad Airways of Abu Dhabi struck a deal to bail out Alitalia in return for a 49% stake. The latest “equity alliance” struck by Etihad is another leg of its strategy to compete with the other fast-growing rivals from the Gulf, Emirates Airlines and Qatar Airways. Etihad has been acquiring stakes in struggling regional carriers that will feed passengers into its long-haul routes. Alitalia joins Air Berlin, Aer Lingus, Virgin Australia and Jet Airways of India, among others. Since restrictions on foreign ownership of airlines often force Etihad to stop short of taking control, it is limited to offering cash injections as an incentive for the airlines it invests in to perform better.Etihad insists that none of its investments is made lightly. It studied Air Berlin for two years before making a move. Alitalia’s books have been under scrutiny for months.Etihad also argues that, unlike Swissair, it will not try to run the airlines it invests in but will help them to achieve the cost cuts.
  4. The world’s oil-shale beds may contain the equivalent of up to nine times as much oil as all of its conventional wells.Oil shale, a soft rock that has hydrocarbons trapped in its pores.Confusingly, oil shale has nothing to do with fracking, a technique for extracting oil and gas from a different sort of shale through horizontal drilling and hydraulic fracturing. America is blessed with prodigious quantities of both types of shale.Frustratingly for Jordan, as it eyes its rich, oil-drenched Gulf neighbours, the country sits on the world’s fifth-largest oil-shale reserves but has to import 97% of its energy needs.In all these projects, the shale is “cooked” cheaply, cleanly and productively in oxygen-free retorts to separate much of the oil and gas. In Enefit’s process the remaining solid is burned to raise steam, which drives a generator. So the process produces electricity, natural gas (a big plus in Estonia, a country otherwise dependent on Russian supplies). Oil shale varies hugely in quality.Estonia’s is clean, Jordan’s has a high sulphur content, Utah’s is laden with arsenic. 
  5. Mr  Sean Parker has made a habit of being bumped out of one company only to pop up in another. Napster’s board pushed him out about a year before it went under. Later he founded Plaxo, a digital address-book service, but was asked to leave by investors. Then he served as president of Facebook, but was again asked to step down, after being arrested for alleged possession of cocaine.He joined Spotify’s board and helped it expand into America.Mr Shawn Fanning had been Napster’s poster child, appearing alone on a Time magazine cover about the firm.After Napster folded Mr Fanning tried to start a rights-management service for music, Snocap, but the record labels were not interested, and Apple’s success with iTunes helped to seal its fate. Snocap burned through its cash, and closed. Mr Fanning’s biggest success post-Napster was Rupture, a social network for gamers, which he sold for a reported $15m in 2008. But around a year later he was laid off. In 2010 he was a founder of Path, a social network for mobile devices, which has yet to become socially mobile.The two Napster founders’ attempts at comebacks illustrate how hard it can be to live up to the ideal of the “serial entrepreneur”.

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