Economist 8/19/14

  1. How did America’s police forces get so well-armed? In this as with so much else in American governance, it starts with federal cash. Every year Congress passes the National Defence Authorisation Act, which sets out the Defence Department’s budget and expenditures. The version passed in 1990, in the wake of a sharp rise in drug-related violence, allowed the Defence Department to transfer military gear and weapons to local police departments if they were deemed “suitable for use in counter-drug activities”. Between 2002 and 2011 the Department of Homeland Security, established after the attacks of September 11th 2001, disbursed more than $35 billion in grants to state and local police forces. In addition the “1033 programme” allows the Defence Department to distribute surplus equipment to local police departments for use in counter-terrorism and counter-drug activities. In 1980 SWAT teams across America were deployed around 3,000 times. Deployments are estimated to have risen nearly seventeen-fold since, to 50,000 a year.And while SWAT teams remain essential for high-risk and dangerous situations, most SWAT teams are deployed to serve routine drug-related warrants on private homes, often with disastrous consequences.
  2. During the last 23 years the minimum wage of Mexico has dropped by 43% after accounting for inflation, according to the Economic Commission for Latin America and the Caribbean (ECLAC), a part of the United Nations.Since 1991, annual inflation has fallen from more than 22% to less than 4%.Those who earn the minimum wage in Mexico get 19% of their country’s average wage. In Chile it is 43%.It is often argued in Mexico that the minimum wage hardly matters because few earn it. But base wage serves as a guide for pay rises in the broader economy.
  3. VENEZUELA’S western border is a smuggler’s paradise.The most lucrative trade of all is in petrol: Venezuela’s energy minister, Rafael Ramírez, reckons the equivalent of 100,000 barrels a day of oil is smuggled out of the country.Petrol in Venezuela is so cheap that an entire 50-litre (11-gallon) car-tank can be filled for well under $1, or less than six cents at the black-market rate. Over the border, gasoline costs about $1.20 a litre. The government says it loses to smuggling 40% of the subsidised food that it supplies to state-owned grocery stores. On August 11th, in the latest attempt to plug the leaks, Venezuela began nightly closures between 10pm and 5am of its 2,200km (1,400-mile) border with Colombia. Heavy-goods traffic in the border area is now banned for 11 hours a day, starting at 6pm.
  4. Under Chinese sovereignty since 1997, Hong Kong’arithmetic has got even harder. When untold thousands took to the streets on July 1st for what has become an annual march demanding full democracy for the special administrative region of China, the police estimated 98,600 people took part..In comparison the estimates of attendance at the “pro-China” demonstration on August 17th are in a rather tighter range: 111,000, said the police; 193,000 the organisers.  The aim of the demonstration was to oppose “Occupy Central with Peace and Love” (OCPL), a movement that threatens to occupy Hong Kong’s central business district, bringing traffic and commerce to a halt, if China refuses to meet its demands for genuine “universal suffrage” in the election for Hong Kong’s chief executive in 2017. So the demonstration was not so much “pro-China”, though Chinese flags were much in evidence, as “anti-disruption”.
  5. VISIT an outlet of Chilango, a Mexican food chain in London, and you will be invited to “become part of the story”, not just by eating a burrito but by buying a “burrito bond”. These are four-year loans to the firm of at least £500 ($835), paying annual interest of 8%, along with a variable number of free burritos, depending on how much an individual lends. Helped by Crowdcube, a crowdfunding website, Chilango has already raised £1.8m in this way—80% more than its initial goal—from 585 bond-buyers. In Britain “mini-bonds” are more loans than bonds, in that they are not tradable. But also unsecured, giving them little recourse if the loan sours. They are cheaper to issue than a normal bond, which involves much more paperwork.

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