Economist 1/30/14

1. FIRST umami. Then kokumi. For many Japanese the classical gustatory quartet of sour, sweet, salty and bitter seems insufficient. Umami, imparted by glutamic acid, a type of amino acid, and most commonly associated with a derivative of that chemical called monosodium glutamate (MSG), was identified in 1908 by Kikunae Ikeda, a chemist at what was then Tokyo Imperial University (now called the University of Tokyo).Kokumi, similarly compounded from “rich” and “taste”, has been the subject of scientific inquiry. It is as much a feeling as a taste, and is described variously as “mouthfulness”, “thickness” and “heartiness”. Garlic, onions and scallops are all said to possess it. But, though the source of kokumi is suspected to be a group of chemicals called gamma-glutamyl peptides, the search continues for special receptor-cells on the tongue, or anywhere else, that are tailored to detect these and thus create the sensation of kokumi.
2.   In 1963  there were around 400,000 cases of measles in America. In the decade to 2013 the average number of annual cases dropped below 100. The disease is no longer endemic in America.An ongoing outbreak of measles traced back to a tourist at California’s Disneyland in December illustrates the risk posed by those who shun vaccines. Dozens of people have since caught the disease; most were unvaccinated. The sick have now spread measles to seven other states. The measles vaccination rate for young children in America was 92% in 2013. Although that is lower than in most rich countries, it is about the rate needed for herd immunity. But it conceals big differences across states—from 82% in Colorado to nearly 100% in Mississippi—and within them. This variation is in part explained by different laws. Although all 50 states require vaccines for students, 19 allow them to opt out without a doctor’s approval or religious justification.One such state is California, where many schools have vaccination rates lower than are needed for herd immunity. After rising for 12 years, the number of parents seeking a waiver on philosophical grounds declined in 2014, when a law went into effect requiring them to see a health-care professional first.
3. Under the common-law system that America inherited from England, a person performing a prohibited act (actus reus) must also possess a guilty mind (mens rea) in order to be convicted of a crime. In other words, intent matters. In keeping with this tradition, many states differentiate between criminal behaviour that is purposeful, negligent or something in between. But things have got fuzzy lately. New criminal laws often lack intent requirements—sometimes on purpose, often by mistake. Most states, though, are ignoring the problem, even as a flood of new laws means more will be unwittingly broken. Federal statutes contain some 4,500 crimes, and there are thousands more in the federal regulatory code. In 2009 the Heritage Foundation, a think-tank, and the National Association of Criminal Defence Lawyers (NACDL) found that two-thirds of the non-violent criminal offences enacted by the 109th Congress lacked an adequate intent requirement. 
4. Official data released this week from China confirm that the economy grew by 7.4% last year, the slowest rate in 24 years. A crackdown on official corruption has made it impossible to win friends in government. And antitrust authorities have taken a tough line with foreign carmakers, drugmakers and other firms that had hoped their guanxi (connections) offered them protection. Over the past two decades, China has maintained a highly restrictive, complex set of rules on how foreigners can invest on the mainland. In the many industries deemed “strategic”, for example, they must invest only through a joint venture and must transfer technology to the local partner. Flows of funds in and out of the country are also tightly controlled. The government unveiled a dramatic proposal to ease its restrictions on foreign investment.Foreign firms would supposedly be treated the same way as national ones. The clunky system of case-by-case approvals will be replaced by a simpler “negative list”: if your industry is not on it, you do not need permission to invest.
   
5. THE International Monetary Fund is meant to be the firefighter of the world economy. Recently, though, it is China that has responded to the ringing of alarms. First, it lent Argentina cash to replenish its dwindling foreign-exchange reserves. Next, with the rouble crashing, China offered credit to Russia. Then Venezuela begged for funds to stave off a default. The World Bank and the IMF have been criticised for attaching too many conditions to loans. China, by contrast, is undemanding, worryingly so. The fear is that, as international use of the yuan grows, China will start to provide pariah states with a means to evade Western financial sanctions but China is not seeking to displace established multilateral institutions, but to gain the power befitting an economy of its size.

Economist 1/29/15

1. Symphony, an Indian aircooler company does just one thing, and does it so well that it is not only the leading brand at home, but sells more than a fifth of its production abroad. Symphony’s success started when its founder, Achal Bakeri, returned to India in 1988 with an American MBA, determined to sidestep the family property business.Air-coolers, which work on simple evaporation, are cheaper—but the models on sale in India tended to be clunky, noisy appliances, made to order in simple workshops. Mr Bakeri designed an elegant, quiet, mass-produced alternative. Success came quickly.vestors pressed it to bring its innovative flair to other appliances, such as water heaters and washing machines.To save his firm, Mr Bakeri junked everything but the air-cooler business.Shares in Symphony could be picked up for pennies in 2004. They now sell for 2,207 rupees ($36), making it one of India’s best-performing stocks over the past decade.
2. The suicide rate in America has risen from 11 per 100,000 people in 2005 to 13 seven years later.What drives people to self-destruction? Those who suffer from depression are, unsurprisingly, most at risk. The suicide rate also rises when times are hard. During the Depression it jumped to a record 19 per 100,000. But now it is the middle-aged who are most at risk. In 2012 the suicide rate for Americans aged 45-54 was 20 per 100,000—the highest rate of any age group. For those aged 55-64 it was 18; for the over-65s it was 15. The middle years can be stressful, because that is when people realise that their youthful ambitions will never be fulfilled.Women make nearly four times as many suicide attempts as men, but men succeed four times as often.Military veterans are especially prone to suicide. Data from 48 states suggest that 30 out of 100,000 veterans kill themselves each year—a rate far higher than among civilians.Some who ponder suicide may be dissuaded by counselling.Making it slightly harder to kill yourself is also surprisingly effective.In Oregon, Washington and Vermont “Death with Dignity” laws allow terminally ill, mentally competent residents to ask for prescription drugs to hasten their deaths.A suicide deeply affects six people close to the deceased, research suggests.
3. IMMIGRANTS have become an easy target for populist politicians in Europe. Sluggish economic growth, an influx of refugees and the recent terrorist attacks in Paris have stirred up public antipathy to foreigners. But Europe’s ageing workforces need replenishing. The median age of Europeans living in their own country is 43, compared with 35 for migrants. Britain does particularly well in attracting young and employable foreigners: most are in their 20s and 30s. Some two-thirds of the immigrants in Germany, France and Italy are aged between 25 and 64, the prime working age; only around half of the natives are. Immigrants are often better educated than the locals, too.
4. On January 28th McDonald’s announced that itschief executive Mr Thompson will leave on March 1st. He will be replaced by Steve Easterbrook, the chief brand officer.The abrupt exit comes after one of the worst years in McDonald’s recent history.Some analysts wonder whether Mr Easterbrook, as a longtime insider, is the fresh blood needed at the top of McDonald’s. But he has a good track record: he turned around the firm’s fortunes in Britain, his home country, now one of McDonald’s best-performing markets, after becoming boss of the local operations in 2006.
5. Activists for internet freedom and other causes are up in arms. Without strict network-neutrality rules, they warn, toll booths and other checkpoints will mushroom, robbing the network of what has made it great.America’s Federal Communications Commission (FCC) is expected to start discussing plans on February 5th (and vote on them on February 26th).Chile, the Netherlands and Slovenia have already passed strict network-neutrality laws; several others, including Norway, have opted for softer rules or are planning to do so.The strictness of neutrality rules varies. Chile forbids any kind of traffic prioritisation. Others allow plenty of exceptions. In Slovenia, for instance, network operators can block spam and manage traffic to avoid congestion or for security reasons.EU governments must agree on common regulation, but each has its own agenda. Big member states, such as Italy, tend to defend the interests of their big telecoms firm.The next network-neutrality battle has already begun—over “zero-rating”, a practice by which mobile operators allow customers access to certain services, such as Facebook or Wikipedia, without charging them for the data usage.

Economist 1/28/15

1. “broken windows” policing, an approach to law enforcement based on the theory that cracking down on minor crimes helps to prevent major ones. Critics argue that the effect is discriminatory, as police statistically tend to target non-whites. Defenders such as Bill Bratton (pictured), the head of the New York Police Department (NYPD), and George Kelling, the architect of the original theory, champion the theory as the reason why crime is plummeting in so many cities.The term “broken windows” refers to an observation made in the early 1980s by Mr Kelling, a criminologist, and James Wilson, a social scientist, that when a building window is broken and left unrepaired, the rest of the windows will soon be broken too.While Mr Bratton was head of New York’s transit police in 1990, he ordered his officers to arrest as many turnstile-jumpers as possible. They found that one in seven arrested was wanted for other crimes, and that one in 20 carried a knife, gun or other weapon. Within a year, subway crime had fallen by 30%.“Broken windows”-style policing has arguably helped to reduce crime. But other factors have also helped.
2. China has many large cities—more than 100 of them have more than a million people—but that some are supersized. At the end of last year the government at last acknowledged the special nature of these, introducing the term “megacity” to describe those whose populations, including that of their satellite towns, exceed 10m. Of the 30 cities worldwide that match this definition, six are in China: Shanghai (23m), Beijing (19.5m), Chongqing (13m), Guangzhou (12m), Shenzhen (11m) and Tianjin (11m).Medium-sized cities of 1.5m-6.5m are outperforming bigger ones in terms of environmental protection, economic development, efficient use of resources and the provision of welfare.The giant cities are polluted, pricey and congested.The number of cars has increased more than tenfold in the past decade, to 64m. The combination of superblocks and car-lust often adds up to a giant jam.The ill-defined ownership rights of farmers have encouraged the sprawl. Officials can expropriate rural land easily and at little cost.China’s megacities are less dense than equivalents elsewhere in the world.
3. . A new report by the Pew Research Centre shows that the majority of Americans think women are just as capable of being good political and business leaders as men.After all, the 114^th Congress includes a record number of women (104) serving in the House and Senate. On the corporate front, 26 women now lead as CEOs of Fortune 500 companies; that’s up from zero in 1995.But, in fact, the 104 congresswomen only make up 19% of Congress and the female CEOs are only 5% of all Fortune 500 CEOs.In light of the numbers and research, how is it possible that most Americans still express such positive views of female leadership?Americans claim to hold equitable views—they know these are the right views to have, much like most people will certainly say they are not racist. But converting such views into practice is another matter entirely.
4. China and Pakistan , the two countries have such a long-standing and harmonious relationship.Yet misgivings are also abound.Chinese engineers working on aid projects in Pakistan have been killed by Pakistani extremists.The authorities in the capital do not do enough, the Chinese complain, to destroy Pakistani havens of the East Turkestan Islamic Movement, a Muslim separatist group drawn from the Uighur ethnic minority who live in China’s western Xinjiang region.China helped Pakistan acquire the nuclear bomb, and is Pakistan’s biggest supplier of military equipment. Now it is building two sizeable civilian nuclear reactors that should help ease the country’s chronic energy shortfall.
5. The FDLR, the Democratic Forces for the Liberation of Rwanda, is accused of rape, plunder and the killing of civilians in the border area around Lake Kivu, contributing to the political chaos that has reigned in Congo ever since their arrival. The UN has long tried to neutralise the FDLR, along with more than a dozen other militias around the lake. Six months ago it issued a deadline of January 2nd for the FDLR to hand in its weapons. Only a small number of militiamen complied.Plans for the attack by the UN contingent, which is expected within days, follow diplomatic pressure from America and Rwanda. The main contributors to the intervention force, South Africa and Tanzania, have been less keen.Nowhere else does the UN conduct offensive military operations. The UN does have some form in stamping out murderous militias.he UN will never have enough troops to secure the vast country, and the national army is corrupt, ineffectual and brutal.

Economist 1/27/15

1. For the 70th anniversary ceremony the liberation of Auschwitz by Red Army being held today, probably the last major one the ageing survivors will attend, the plan was to make the survivors the centre of attention. Putin decided not to attend the ceremony in Auschwitz, feeling snubbed because Polish authorities had not invited him. In fact, the Poles had deftly avoided inviting any politicians in person. Poland has been one of the strongest advocates in the European Union for taking a tough line against Russia over its armed interference in Ukraine.Besides honouring the Holocaust’s victims, organisers of the events in Prague and at Auschwitz want to bring public attention to a renewed wave of anti-Semitism and intolerance in Europe.
2. America is marching away from the death penalty. The number of executions rose from 31 in 1994 to a peak of 98 in 1999, then began dropping as more and more states declared death penalty moratoriums or abolished it altogether. In 2014, of the 35 people who were put to death in America, at least three died grisly, apparently painful deaths.Last Friday, the Supreme Court agreed to hear a case challenging three upcoming executions in Oklahoma. The inmates contend that Oklahoma’s drug cocktail violates the eighth amendment’s ban on cruel and unusual punishments. They zero in on one of the three drugs in the state’s protocol, midazolam, a substitute for barbiturates that European manufacturers opposed to capital punishment are no longer selling to American prisons. It seems midalozam may be less effective than the other drugs in bringing about “a deep, coma-like unconsciousness”, and thus might expose a person being executed to a great deal of pain when the other two drugs—one to induce paralysis, another to stop the heart—are injected.As Adam Liptak reminds us in the New York Times, it takes only four justices to agree to hear a case but five to issue a stay of execution.
3. Orchard is just one of many “fintech” firms sprouting in Wall Street’s shadow. But it stands out due to the prominence of its seed investors, including former chief executives of Citigroup (Vikram Pandit) and Morgan Stanley (John Mack). Orchard serves as a conduit between large entities that have money to invest and an emerging world of firms that originate loans.There are now at least 450 originators, Mr Burton estimates, focusing on half a dozen niches including loans to consumers, small businesses, students and property investors. To the extent the originators resemble one another, it is that they tend to make relatively small loans and use innovative methods to evaluate risk. For example, SoFi, based in San Francisco, refinances law-school debt for graduates who have passed the bar and are thus particularly likely to repay.So far Orchard’s platform is connected to seven of these originators and 36 institutional investors.Most originators, in contrast, are not regulated as banks, and are not subject to the same expensive capital requirements or suffocating red tape.
4. Attitudes to the right way to spend early childhood years still vary around the world. Scandinavians dislike formal early schooling but relish subsidised day care earlier on. German parents put relatively few of their toddlers into formal crèches, but are happy for them to head off to kindergarten when they are three. Ambitious Asians, notably in South Korea, are keen on solid pre-schooling as a chance to improve educational outcomes and make them more consistent. The Swiss prefer to keep their kids at home a bit longer, but still do well by them overall.Andreas Schleicher, head of the OECD’s education team, says early-years investment does not “automatically produce gains in learning, unless systems transfer this to primary and secondary level”.
5. But Sunday’s result in the Greek election marks a turning-point because Syriza, the radical-left party that has prevailed at the polls, campaigned on casting aside austerity, backtracking on the reforms and renegotiating the vast debt that Greece owes its European creditors. These policies are unacceptable to the euro-zone countries, especially Germany, that have lent Greece so much money.From the perspective of Northern creditor nations, Greece was the architect of its own misfortune by mismanaging its public finances on a staggering scale. It has been lent an astonishing amount of money in not just one but two bail-outs, amounting to €246 billion ($275 billion), worth more than the country’s entire economic output. From a Greek perspective, however, the country has suffered a calamitous decline in GDP, which at its low in late 2013 was 27% down on its pre-crisis peak.Greeks feel that they have lost control of their country, which is now instead being directed by the hated troika: the European Commission, the IMF and the European Central Bank.

Economist 1/26/15

1. Some 386 jails in America—about 12% of the total—offer “video visits”.The option of a video visit might be useful for loved ones who live far away, so long as in-person visits are also allowed. But many prisons offer screen time instead of face time, arguing that prisoners do not need the latter since they can have the former. What is more, kiosks for calls are in public spaces, meaning that inmates have to be careful what they say. And calls are costly: $29.95 for 20 minutes of talk in Wisconsin’s Racine County, for example. Securus, a large firm providing communications services to 2,200 lockups, typically charges a dollar a minute for a video call . Five of the seven main companies that run video chats, including Securus, require a chunk of time to be bought in advance of a scheduled call—irritating if glitches ruin a session, as they often do.in-person visits ought to be encouraged: just one can reduce the likelihood of an inmate reoffending by 13%, according to a study in 2011. Incredibly, 74% of jails have banned visitors from seeing inmates after introducing video services. Securus has even demanded it.
   
2. In Thailand, anyone who “defames, insults or threatens” the King, his heir, the Queen or a regent risks between three and 15 years in jail due to the lèse-majesté laws. For decades, the number of cases averaged around ten a year, but since 2004, they have soared to several hundred each year, as friction between Thailand’s populist governments and its traditional ruling establishment has erupted into conflict.Anyone can report an offence, and it is not only speech that breaks the rules. In 2011 a 61-year-old received a 20-year sentence for sending four offensive text messages; he denied the charges and died in prison the following year. People who fail to stand for the royal anthem, still played before most film screenings, or deface banknotes, which bear the King’s image, have fallen foul of the law. Foreigners who break the lèse-majesté law are often swiftly deported, but in recent years more of them have served jail terms.The palace regularly issues pardons, particularly if cases are well-publicised and miscreants apologetic, but the volume of prosecutions is moving upwards, all the same.
3. With separatist forces again on the offensive, eastern Ukraine is taking ever darker turns. Nine months of battle and 5,000 deaths have only fueled the spread of cynicism and hate.Convoys carrying humanitarian aid, including medicine, to Donetsk and Luhansk have been blocked by Ukrainian battalions, drawing condemnation from Amnesty International.he West has found itself in a corner of its own: inaction now would amount to capitulation, while action means engaging in a fight few want. A “deeply concerned” President Obama has promised to consider all measures “short of military confrontation”. New sanctions seem likely, though America will have to cajole an already hesitant European Union.And with the Donbas rumbling, Russia’s other neighbours are taking note. Belarus’s newest military doctrine warns of little green men; Lithuania recently issued its citizens a Russian invasion survival manual.
4. CATALAN independence, if it ever happens, has been pushed back at least seven months after the region’s president, Artur Mas, decided not to call a snap election but to opt instead for September 27th. The election is still being promoted as a plebiscite on independence, but not in the way Mr Mas once hoped. His original plan for a single list uniting all the separatist parties has been dropped at the insistence of his rivals from the Catalan Republican Left (ERC). In last-minute horse-trading, he accepted that ERC would stand separately from his own Convergence and Union (CiU) coalition, in exchange for its support for this year’s budget, which his minority government could not pass alone.
5. FOR all their fans’ passion, Italian football clubs struggle to make profits. In the 1990s Italy’s Serie A was the most glamorous and high-profile of Europe’s five main football leagues; it has since fallen, in revenue terms, from second to fourth place. Italy’s league fell behind its peers partly because of the complacency of clubs’ owners. Tycoons treated them as trophy assets more than businesses. For those seeking to turn around a club’s finances, one of the most important tasks is to boost match-day takings, which account for 11% of total revenues in Serie A, compared with 23% in both the English Premier League and the German Bundesliga. That means improving the match-day experience.There is plenty of money coming in from television: the amount that broadcasters pay to show Italian football matches is second only to that in England.Italian businesspeople tend to take clients to dinner or the opera; and to persuade them to start bringing them to football matches, the facilities at grounds would need to be improved.

Economist 1/23/15

1. No matter how good voice-recognition software becomes, it will always be hostage to its sonic environment.Previous attempts to get computers to lip-read have focused, understandably enough, on the shape and movement of the lips as they produce phonemes (individual sounds like “b”, “ng” or “th”). Such shapes-of-sounds are called visemes. The problem is that there are just a dozen visemes for the 40 to 50 phonemes in English; “pan” and “banned”, for example, look remarkably similar to a lip-reader. That makes it rather taxing to reconstruct words from visemes alone. Instead, Dr Hassanat has been trying for the past few years to detect the visual signature of entire words all at once, using the appearance of the tongue and teeth as well the lips. VocalZoom is an Israeli start-up whose idea is to use a low-power laser beam on a speaker’s cheek to measure vibrations, and from those to infer the frequencies of speech.
2. A TOUR of the Middle East by Shinzo Abe, Japan’s prime minister, was knocked sideways by the news on January 20th that Islamic State (IS), the extreme jihadist group in Iraq and Syria, threatened to kill two Japanese hostages unless Japan quickly pays a ransom of $200m. The sum demanded is equal to an amount Mr Abe had committed days before in Egypt to give to countries battling IS.He vowed to use all means to secure the two men’s release. Yet paying a ransom would anger America, Japan’s ally.
3. Myanmar, with a bigger population than Spain, is one of the last great “unphoned” countries. In 2013 its military-backed government invited bids for the right to build its first modern mobile networks. The services that Telenor and Ooredoo, a Qatari rival, began to roll out last year are a crucial step towards reanimating an economy anaesthetised by five decades of dictatorship.Locals once paid $1,500 each for SIM cards raffled by the state network, and coverage was scant. Now a SIM costs just $1.50, and new towers are popping up everywhere. Myanmar Posts and Telecommunications, the state-run incumbent, is transforming itself in partnership with KDDI and Sumitomo, two Japanese firms.Since Telenor lost its domestic monopoly in the 1990s it has rediscovered the Viking spirit of adventure, launching into foreign markets ranging from Bulgaria to Bangladesh.Ooredoo, a brash outfit owned by the government of Qatar. Known for years as Qtel, Ooredoo did not venture abroad until 2005. It is now one of the world’s fastest-growing mobile firms.
4. Now, many private-equity funds are making Africa a primary target, and record amounts are being raised to invest in businesses there. On January 12th Helios Partners, a London-based firm, said it had raised the first Africa fund worth more than $1 billion. Abraaj, a rival, is expected to follow suit soon.In some respects it is no surprise that Africa has become such a popular destination for business investment. It certainly needs more capital—an extra $90 billion a year for infrastructure alone, the World Bank reckons.Large funds usually want to buy businesses worth more than $100m, but last year there were only seven such deals, and about half the firms bought were worth less than $10m.Local partners are often unwilling to sell, and undeveloped or non-existent local stockmarkets make it hard to unload a stake by means of a listing.One thing successful managers agree on is that investors should not expect to fly in, do a deal and fly out again. The funds that are doing well are those with a strong understanding of local conditions and good business connections in their target countries, such as Catalyst.Ahmed Heikal of Qalaa Holdings, an Egyptian firm, has concluded that it is not. His firm has abandoned the private-equity model and now follows a strategy of buy, improve and hold.
5. In America the main providers of e-book subscriptions include Amazon, Oyster and Scribd. Similar companies have sprung up in Spain, Scandinavia and China. Their reach is limited so far, but it is growing. Around 4% of book buyers have tried an e-book subscription service in America, according to Nielsen.Consumers have shown an increasing preference for such all-you-can-eat bundles, as opposed to buying each item separately. That worries book publishers and authors, who still make most of their money from sales of single copies.Only three of America’s five biggest publishers have so far made their works available on Oyster or Scribd.The record companies tolerate music-streaming services like Spotify, which pay them only modest fees, because the alternative is a continued rise in music piracy—on which they earn nothing at all. However, piracy of e-books is not such a problem.

Economist 1/22/15

1. Today’s rich increasingly pass on to their children an asset that cannot be frittered away in a few nights at a casino.  It is brains.Such “assortative mating” increases inequality by 25%, by one estimate, since two-degree households typically enjoy two large incomes. Power couples conceive bright children and bring them up in stable homes—only 9% of college-educated mothers who give birth each year are unmarried, compared with 61% of high-school dropouts. They stimulate them relentlessly: children of professionals hear 32m more words by the age of four than those of parents on welfare. They move to pricey neighbourhoods with good schools.The link between parental income and a child’s academic success has grown stronger, as clever people become richer and splash out on their daughter’s Mandarin tutor.A young college graduate earns 63% more than a high-school graduate if both work full-time—and the high-school graduate is much less likely to work at all.America is one of only three advanced countries where the government spends more on schools in rich areas than in poor ones. Its university fees have risen 17 times as fast as median incomes since 1980, partly to pay for pointless bureaucracy and flashy buildings.Many schools are in the grip of one of the most anti-meritocratic forces in America: the teachers’ unions, which resist any hint that good teaching should be rewarded or bad teachers fired.Finally, America’s universities need an injection of meritocracy. Only a handful, such as Caltech, admit applicants solely on academic merit.
2. IT WAS a surprise, but not a big one, when on January 15th the Reserve Bank of India (RBI) reduced its benchmark interest rate by 0.25 percentage points, to 7.75%. The decision to cut was made outside the normal cycle of monetary-policy decisions.Figures released on January 13th showed that India’s consumer-price inflation in December was 5%, lower than forecasts. The RBI is thus confident that it will be able to keep inflation below 6% by next January, as it has pledged.the rupee has been stable against a basket of other currencies. The slump in commodity prices has hurt some emerging markets, but is a boon for India, which imports 80% of the oil it consumes.Bullish pundits reckon interest-rate cuts will kick-start a new cycle of business investment, which has been rather flat.But the overhang of corporate debt and a growing bad-loan problem at India’s banks is a bigger obstacle to a recovery in capital spending than the level of interest rates.
3. he 2013 book, by the former chief of Atlanta’s fire department, Kelvin Cochran, lays out his conservative Christian views, defining “uncleanness,” for example, as “whatever is opposite of purity; including sodomy, homosexuality, lesbianism etc.But in the eyes of Atlanta’s mayor, Kasim Reed, Mr Cochran’s real sin was handing out copies of his self-published tome to nine people at work—three of whom did not want it. First suspended from the fire department in November, Mr Cochran’s dismissal was announced by the mayor earlier this month.Speakers at a rally for him on January 13th also voiced their support for a “religious freedom” bill under consideration by Georgia’s lawmakers. Based on the Religious Freedom Restoration Act of 1993, the bill deems that the exercise of religious beliefs should not be impeded by government without “compelling justification.” Opponents of the bill, however, worry that it would give legal cover for discrimination against gays.Big employers in the state, such as Coca Cola, Delta Airlines and Home Depot, helped defeat the passage of similar legislation last year. Eighteen states have adopted similar religious freedom laws of their own, while 12 more now maintain the same legal standards through court decisions.
4. “ransomware”—a virus that encrypts files on a computer and posts an onscreen message demanding cash to unlock them.The emergence of bitcoin, a digital cryptocurrency that can be used anonymously, is a big part of the reason. Most ransoms must be paid in it, and ransom notes typically explain how to buy it.Many of the extortionists are from Russia; its authorities are uninterested in hunting them down. In Australia alone, estimates the Australian Crime Commission, a government agency, between August and mid-December around 16,000 individuals, firms and government bodies paid a total of A$8m ($7m) after downloading ransomware.Ransomware programmers keep ahead of antivirus software by continually tweaking their code. According to Gregg Housh, an online marketer who is close to Anonymous, a hackers’ collective, the average ransom has fallen from about $800 in the past few years as extortionists have found the sweet spot where their victims simply pay up.
5. Boko Haram has carved out a “caliphate” the size of Belgium in the impoverished north-eastern corner of Nigeria. And like IS, it is exporting jihad across post-colonial borders.What started as a radical but mostly political movement in 2002 has turned, especially since a heavy-handed crackdown in 2009, into a jihadist insurgency that has grown more violent every year. In the same week the world was outraged by jihadist attacks in Paris that killed 17 people, little attention was paid to news that as many as 2,000 had been killed by Boko Haram in and around the Nigerian town of Baga. Nigeria’s own leaders have wilfully ignored the carnage in their country.Ironically, Boko Haram’s success has made his re-election more likely. The president’s political base is in the mainly Christian south which, untroubled by the northern insurgency, is enjoying an economic boom.Nigeria spends $6 billion a year on defence and security but soldiers often mutiny or desert, in part because senior officers skim off money for kit and pocket the lower ranks’ wages. Many citizens are almost as terrified of the undisciplined army and police as they are of Boko Haram.

Economist 1/21/15

1. For most of its history, Islam has had a deep aversion to the lifelike portrayal of animate beings, especially human beings, and above all to the representation of Muhammad, the messenger of God—or indeed any of the preceding prophets. Muhammad, the messenger of God is reported to have spoken harshly to a man who made his living through art. “Whoever makes a picture will be punished by Allah till he puts life in it, and he will never be able to do that.” This is taken to mean that for a human, to try “making” a new being is usurping God’s role—and is in any case doomed to fail.The belief is most strongly held by the Sunnis who form the great majority of the world’s Muslims, especially the more puritanical and zealous groups such as the Wahhabis who dominate Saudi Arabia. Shia Islam is much more open to the depiction of human beings, up to and including Muhammad himself. This difference fuels the zeal of violent Sunni groups like Islamic State who have destroyed Shia shrines and images, claiming in doing so to be purifying their religion of idolatrous accretions.
2. POPE FRANCIS broke the papal record for crowd-pulling this week when at least 6m Catholic faithful attended an open-air service he led in a Manila park on January 18th—more people than live in Frankfurt, Toronto, or Libya. The current head of the Catholic Church broke a record set by Pope John Paul II in 1995, when at least 4m attended a service of his, in the same park.About four-fifths of the nearly 100m people who live in the Philippines are Catholic. Spanish conquerors brought the religion in the 16th century.What makes Filipinos stand out among Christian-majority populations is their ardent expectation that piety and morality will be rewarded on earth, not just in heaven.
3. A study of staff at a range of German workplaces, carried out over three years by Hans-Georg Wolff and Klaus Moser of the University of Erlangen-Nuremberg, found a positive correlation between the amount of effort the workers said they put into building contacts—inside and outside their offices—and their pay rises and career satisfaction.The first principle for would-be networkers is to abandon all shame. Be flagrant in your pursuit of the powerful and the soon-to-be-powerful, and when you have their attention, praise them to the skies. Academic research has found that people’s susceptibility to flattery is without limit and beyond satire.But shamelessness needs to be balanced with subtlety. Pretend to disagree with your interlocutor before coming around to his point of view; that gives him a sense of mastery. Discover similar interests or experiences. People are so drawn to those like themselves.The second principle is that you must have something to say. Success comes from having a well-stocked mind, not just a well-thumbed Rolodex.The third principle is that you need to work hard at networking. Swot up in advance on the most important people who will be at an event. If you manage to meet them, follow up with an e-mail and a suggestion to meet again.
4. Premium carmakers have been busily launching an unprecedented number of new models.But a carpark-full of new models are also being launched for the very wealthiest drivers.There are three main reasons behind the push. First, growing wealth has boosted demand for the most luxurious or speedy vehicles over the past decade. Rolls-Royce and Bentley both sold a record number of cars in 2014.Second, bosses of car firms that make cheaper models believe that fast and fancy cars can help to put a shine on their brand, luring in younger buyers and encouraging others to trade up.Third, and most important, profit margins on luxury vehicles are high—as much as 15% for Ferrari and 10% for Rolls-Royce.
5. WHEN China started opening up in 1978, its first economic reforms included raising the prices it paid to farmers for their crops. The decision, not surprisingly, led to bumper harvests. Controls on procurement prices for most farm products were eventually scrapped—but not on tobacco leaves. Only this year, nearly four decades later, will the government at last stop fixing their price.Tobacco companies remained exclusively in state hands. Prices of the leaf were set in order to assure farmers of an income and dissuade them from switching to other cash crops. Local governments wanted to boost tobacco farming, not least because of the taxes it yielded.China’s 5m tobacco farmers now produce more than 3m tonnes of tobacco a year, 43% of the world’s total—more than the combined output of the next nine tobacco-producing countries. China is home to a third of the world’s smokers, most of them men. Thanks to low sales taxes, cigarettes have become more than twice as affordable since 1990.Because sales are assured and prices set, farmers produce too much low-quality tobacco.

Economist 1/20/15

1. It was not until the spread of satellite observations in the 1990s that measurement of sea levels became reliable and global. All sorts of adjustments are needed to make sense of earlier data and produce a complete record.Dr Hay and her colleagues have come up with a new way of doing this, reported in this week’s Nature. They use a statistical technique called probabilistic estimation in which probabilities are assigned to estimated or unknown figures.The team re-examined records from 622 tidal gauges (about a third of the total) since 1900. Applying probabilistic techniques, she puts mean sea-level rise between 1901 and 1990 at 1.2mm a year, plus or minus 0.2mm. That is much lower than previous estimates. The most recent assessment by the Intergovernmental Panel on Climate Change (IPCC, which represents mainstream climate scientists) said sea levels had risen about 1.7mm a year in 1901-2010. But if Dr Hay is right, the puzzling difference between the predicted and real figures disappears.Dr Hay applied her probabilistic techniques to more recent tidal-gauge data (between 1993 and 2010). Her estimates give a mean sea-level rise of 3mm a year in that period, almost exactly the same as estimates from satellite data.
2. As Colorado celebrated a year of cannabis legalisation, Founders Fund, a venture-capital firm with $2 billion in assets that backed Facebook, has announced an investment in Privateer Holdings, a marijuana outfit behind names such as Leafly and [Bob] Marley Natural. Four states and Washington, DC, have now legalised recreational weed. A further 21 allow medical consumption under differing restrictions. Legal recreational and medical sales amounted to $2.6 billion last year, most of them in California and Colorado. That is just 6% of the estimated $40 billion still going to criminals (over $200 billion a year is spent on tobacco and alcohol). Cannabis venture capital was a tiny $104m in 2014 and opportunities remain limited because of federal restrictions.
3. LI KA-SHING has long been Asia’s premier dealmaker.The value of his sprawling empire is now approaching $100 billion. His acumen has made the octogenarian Mr Li one of Asia’s richest men, and earned him the nickname of Superman in his adopted home of Hong Kong. At the moment, most of his assets are in two sprawling, listed conglomerates, Cheung Kong and Hutchison Whampoa. He also controls Husky Energy, a Canadian firm. Under the new plan, the two largest firms would be merged as CK Hutchison Holdings; then their various property holdings will be spun out into a firm called CK Property. The two new entities will also be listed but Mr Li will retain control, with roughly a 30% share in each.Why is Mr Li shaking things up? One reason, says the firm, is to unleash value. Another reason given for the reorganisation is to make it easier for analysts to assess acquisitions the group makes. Mr Li has officially anointed his elder son Victor (aged 50) as his successor, and declared that he will finance the business ventures of his younger son, Richard (48).
4. But one measure South Korea is far from liberal: its National Security Law punishes, with up to seven years in prison, anyone who praises the gangster regime to the north. The law was adopted in 1948 to safeguard the new country from communist infiltration from North Korea. Under Park Geun-hye, the country’s conservative president who took office in 2013, 119 were arrested on suspicion of breaking the law in her first year. The continued use of such draconian powers has prompted calls from the UN to abolish them.Fresh instances continue to justify it, say its supporters. Last year Lee Seok-ki, a member of the United Progressive Party (UPP), a minor hard-left grouping, was sentenced to 12 years in prison on charges of plotting a pro-North rebellion to overthrow the government. In December the constitutional court disbanded the UPP, stripping its five other MPs of their seats in the National Assembly. And the UPP was one of the few political groups actively promoting peaceful reunification—supposedly a national tenet.
5. In the first two weeks of the year, when Russia was on holiday, the rouble fell by 17.5% against the dollar. Inflation is up into double figures. The price of oil, Russia’s main export, has slid below $50 a barrel, prompting economists to revise their forecasts down. GDP is now expected to contract by between 3% and 5% this year.Yet the fall in oil prices to below $50 a barrel will cost the state budget, which was calculated on the basis of $100 a barrel, 3 trillion roubles ($45 billion), or 20% of planned revenues, according to Anton Siluanov, the finance minister.The Kremlin hopes to ride out the crisis, as it did in 2008-09 when GDP contracted by 7.5%. Then the government was able to stimulate demand by increasing public spending and saving indebted firms. It no longer has that option. Russia’s reserves are lower than they were four years ago and may last only for a year and a half, at best.Alexei Kudrin, a former finance minister, and Evsey Gurvich, an economist, argue that Russia’s economy cannot be repaired by monetary or fiscal measures. Even weak institutions are a secondary issue. At the heart of Russia’s malaise is the weakening of market forces and suppression of competition, which means there is no longer much of a market economy. The expansion of the state means that, although Russia no longer has Gosplan, its economy is dominated by state or quasi-state firms whose revenues depend not on their economic efficiency but on political contacts.

Economist 1/19/15

1. In 2013 Consumers Korea, a lobby group, surveyed how much 60 products cost in each of 15 rich countries. For more than half of them South Korea was in the top five priciest places.But most tellingly, all three South Korean products in the sample were more expensive in their home country than anywhere else.South Koreans have been paying over the odds, especially for local goods, for decades. In the 1960s Park Chung-hee, a military strongman who oversaw an industrial boom, encouraged the overpricing of local products to subsidise exports, partly by sealing off the country to foreign brands. In the past three years South Korea has implemented a series of trade-liberalisation deals with 50-odd other countries (including the European Union’s member states).As a result of these, Koreans now have more choices than ever.One in ten locals now owns a foreign car, up from about one in 100 a decade ago. South Koreans have discovered that they can save a fortune by shopping on foreign websites. They are clicking away merrily on Amazon and a Chinese counterpart, Taobao, buying clothes, toys and electronic gadgets, including “Made in Korea” ones. The value of direct buying from overseas doubled to 1.1 trillion won between 2011 and 2013. In 2014 the government doubled the maximum value of goods that can be shipped tax-free into the country from America, to $200, giving direct foreign purchasing a further boost.
2. After the Supreme Court ruled in 1987 that Native American tribes, being sovereign, could not be barred from allowing gambling, casinos began popping up on reservations everywhere. Today, almost half of America’s 566 Native American tribes and villages operate casinos, which in 2013 took in $28 billion.During that time, casinos owned by those tribes doubled their total annual take in real terms, to $2.7 billion. Yet the tribes’ mean poverty rate rose from 25% to 29%.Experts offer several explanations. Drug and alcohol abuse are rampant on reservations, so many tribal members find it hard to hold down a steady job. Poor health is another problem: Native Americans have high rates of obesity and diabetes, which are often aggravated by a lack of good medical care. Per capita payments have grown as gaming revenues have risen.Of the 17 tribes in the study that handed casino profits directly to members, ten saw their poverty rates rise.One very small tribe in the study, Jamestown S’Klallam in northern Washington, has eliminated poverty entirely. That tribe does not issue any per capita payments and has used its casino profits to diversify into other businesses, such as harvesting huge molluscs for export to China.
3. FIRST Sweden in 2007, then Cuba in 2013, and now Norway have left the small club of countries that ban professional boxing. The centre-right coalition in power since 2013 promised to cut taxes and red tape—and to let Norwegians indulge in pastimes its predecessors deemed too dangerous, including cheaper wine and spirits, jetskis and Segways. And last month 33 years without pro boxing came to an end, leaving Iceland with the Nordic region’s sole boxing ban.
4. EXPERTS are calling it the African “Smack Track”: a circuitous route to smuggle heroin from Afghanistan to Europe, passing through east Africa. Two drug busts in November, netting 712kg of the stuff, closed a record year for heroin seizures off the coast of Kenya. Most heroin from Afghanistan travels to Europe by two main routes: a northern one through Central Asia and a western one via Iran. The minor “southern route” through east Africa has existed since the 1980s, but last year’s seizures—totalling some 3,500kg, according to the UN Office on Drugs and Crime (UNODC)—point to a growth in traffic.Alan Cole of UNODC says the shift was caused by “improved law enforcement in central Europe and the conflict in Syria”.nstead smugglers have taken to the seas. Shipments of heroin are unloaded from dhows and cargo ships off the shores of Kenya and Tanzania, and taken ashore on small speedboats. In Kenya and Tanzania criminal gangs with close ties to political and security elites control the trans-shipment.n. Countries including Ghana, Mali and Senegal became—and remain—key trans-shipment points for South American cocaine bound for Europe. Some is also routed through South Africa. Tiny, poor, coup-prone Guinea-Bissau has been branded Africa’s first “narco-state”.
5. AT THE start of a new Congress everything seems possible. Republicans have spent much of 2015 on bucolic retreats, pondering how to remake America. One rather ambitious idea is to repair both the budget and the country by supporting marriage. Most mothers under 30 are not married to the fathers of their children.There are indeed marriage penalties in the tax code and in the welfare system: a single mother who marries a man with a job can lose all kinds of means-tested benefits. But there are also some marriage bonuses, and the tax code is so complicated that few Americans know whether tying the knot will mean they owe the taxman more or less. The federal government has made $114 billion-worth of pro-marriage fiddles to tax laws in the past decade with nothing much to show for it. A debate about marriage should begin by acknowledging that the high rates of the 1950s and 1960s were a peak rather than the norm. The marriage rate in America has only recently dipped below where it was at the end of the 19th century, according to Andrew Cherlin of Johns Hopkins University. In the post-war years, an American working man could expect to double his earnings between the ages of 25 and 35, while women’s wages were flat, according to Stephanie Coontz, a historian of marriage. It is no coincidence that the decline in marriage has accompanied the improvement of women’s prospects in the workplace.