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.
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