Economist 4/29/15

  1. Utah was founded by exiles from the United States. After leading his disciples from Ohio, Illinois and Missouri in 1847, Brigham Young, the polygamist leader of the Church of Jesus Christ of Latter-day Saints, chose a plain fringed by the snow-capped Wasatch mountains deep in the desert West as the place to found his Zion, Salt Lake City.For the next 40 years the Mormons’ insistence on polygamy stopped their homeland being fully accepted into the United States; only after the practice was formally renounced in 1890 could the Utah Territory become a state.Utah’s curious history still defines it: the state’s population is nearly two-thirds Mormon.The state is among the most Republican: in 2012 just 25% of its people voted for Barack Obama. Its governor, both senators and the entire congressional delegation are all Republicans.Yet, oddly, it is not the most conservative state in America.
  2. In several aspects of policy, Utah is quietly forging a model of constructive Republicanism.Over the past decade Utah has reduced by around 75% the number of people living permanently on the street, by giving them homes without first insisting that they quit alcohol or drugs or solve their mental-health problems.Whether that is true or not, the Mormon church has a direct influence on the state’s politics. The sexual-discrimination bill passed largely because the church supported it,The state is 92% white; and yet, because Mormons marry young and have large families, it is the youngest state in America. It also has the lowest level of income inequality and one of the lowest poverty rates. That is partly thanks to a highly successful economic policy: it has a flat income tax of 5% and invests heavily in infrastructure.
  3. Just as restaurants promising more “natural” ingredients have been winning customers from McDonald’s in recent years, Kraft and other American processed-food makers have lost out to smaller food firms peddling healthier fare. At the same time, consumers who are less choosy about ingredients have become more picky on price, switching to supermarkets’ own-label foods . Americans’ growing interest in healthier, simpler fare is providing opportunities for all sorts of startups.Kind, which makes fruit and nut snacks, has gone from nothing to annual sales of more than $100m in ten years. Just as Kraft is promising with its macaroni, so Nestlé, the world’s biggest food firm, is pledging to remove all artificial flavours and colours in more than 250 types of chocolate sold in America. More recently PepsiCo said it would remove aspartame, an artificial sweetener, from Diet Pepsi sold in America. In 2012 Campbell’s bought Bolthouse Farms, which makes organic juices; a year later it took over Plum Organics, a maker of baby food. In 2013 Coca-Cola bought Innocent, a maker of fruit smoothies.
  4. This week Mylan, based in the Netherlands, rejected a $40 billion bid from Teva, of Israel, arguing that it “lacks industrial logic”. To be on the safe side it has enacted a poison-pill defence against hostile takeover. Combining the world’s largest generic-drug maker, Teva, with the third-largest, Mylan, would create a company with around $30 billion in annual revenues and, Teva says, $2 billion in cost savings.The merger proposals have triggered speculation that consolidation could cause the price of generic drugs to rise. All around the world, health-care providers are keen on buying cheaper generic copies of branded drugs whose patents have expired. There is no consensus among analysts as to the effects that mergers such as that of Teva and Mylan, if it happens, will have on drug prices.
  5. Volkswagen’s chairman, Ferdinand Piëch resigned on April 25th, instead of pushing out Mr Winterkorn.Having got rid of the group’s previous CEO, Bernd Pischetsrieder, in 2006, through a combination of a public snub and a behind-the-scenes campaign, Mr Piëch probably reckoned the same trick would work again.But other members of the group’s supervisory board backed the CEO.n many respects Mr Piëch leaves the company on a high. By building factories across the globe and making a string of acquisitions, from Bentley, a maker of luxury cars, to Scania, a lorry-builder, he has made Volkswagen the second-largest vehicle maker in the world, behind only Toyota. Last year it turned out more than 10m vehicles and made record net profits of €10.8 billion ($12 billion).VW hopes to boost these margins to 6%, around the group’s average. But this will be hard.
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