Economist 7/29/15

  1. Yemen is only the latest of many theatres in which Saudi Arabia and Iran have sparred over the three and a half decades since an Islamic revolution ended Iran’s own monarchy. The Saudis and their Gulf allies funded Saddam Hussein when he invaded Iran in 1980, while Iran’s proxy in Lebanon, Hizbullah, battled Saudi-backed militias during the 1975-90 Lebanese civil war. In 2011 Saudi Arabia and its allies poured troops into the neighbouring kingdom of Bahrain to help quell a popular revolt. The demands for democracy in a country that is 60% Shia were seen as an Iranian plot to gain power.. The Saudi coalition’s foothold in Aden may presage a redivision of Yemen, a country only united in 1990, into southern and northern halves, an arrangement Saudi Arabia prefers.Rather than seeing the reduction of an Iranian nuclear threat as an advantage, the Saudi government frets instead that its oldest ally, America, is poised to abandon the kingdom and appoint Iran as its new regional policeman.
  2. IN THE three decades since the restoration of democracy in Brazil, the centrist Party of the Brazilian Democratic Movement (PMDB) has rarely been out of power. The two presidents with no PMDB ministers in their cabinets had cause to regret it.The PMDB is an indispensable part of the coalition led by Dilma Rousseff, who belongs to the left-wing Workers’ Party (PT). Her vice-president, Michel Temer, is the PMDB’s chairman; the presidents of both houses of Congress are members.If numbers were all that mattered, the PMDB would be the most powerful party by far. Besides having more seats in Congress than any other, it outguns its main rivals, the PT and the centre-right opposition Party of Brazilian Social Democracy (PSDB), in state and local governments.. To maintain its broad appeal, it kept its ideology flexible. Asked what the PMDB stands for, grandees start with freedom of speech—then clam up. Its programme brims with platitudes: its only firm position is against the death penalty. It is more pro-business than pro-market, often lobbying for local and industry-specific benefits.
  3. London is a popular destination for money launderers, especially those from Africa, the Middle East and Eastern Europe. (Latin Americans still prefer Miami.)Mr Cameron will call for the Land Registry to publish data on which foreign companies own which land and property titles in England and Wales. The government will also consult on whether any foreign company bidding on a government contract should be made to reveal its “beneficial” (ie real as opposed to legally registered) owners.Transparency International, found last year that one in ten properties in Westminster, a central London borough, is owned by an offshore firm, the most popular domicile being the British Virgin Islands.Britain is working to create the world’s first nationwide public register of company owners and is urging others to follow suit. The prime minister stresses the need for co-ordinated global action, and links progress to reform of Britain’s offshore dependencies in the Caribbean and Channel Islands.
  4. WHEN a monopoly on casinos in Macau ended in 2002, American gambling firms rushed into the former Portuguese colony, eager to set up in the only part of China where casino gambling was legal. The bet paid off, and the world’s gambling centre of gravity shifted to Asia. By 2006 Macau’s gambling revenue had exceeded that of Las Vegas. Today eight of the world’s ten highest-grossing casinos are in Macau, with the other two in Singapore. No casinos in America even crack the top 15. A crackdown on corruption by China’s leader, Xi Jinping, has stemmed the flow of mainland Chinese gamblers into the tiny enclave. Worldwide, gamblers have also held back.
  5. When Britain set a new minimum wage in 1998 doom-mongers forecast that jobs would vanish. Employment proved resilient. Minimum wages help offset firms’ bargaining power over employees reluctant to risk moving elsewhere.Encouraged by this evidence, many are clamouring to make minimum wages far more generous. In America campaigners want the federal minimum wage more than doubled from today’s stingy $7.25 an hour to $15 an hour.By moving towards sharply higher minimum wages, policymakers are accelerating into a fog. Little is known about the long-run effects of modest minimum wages (see page 66). And nobody knows what big rises will do, at any time horizon.One danger is that a high minimum wage will push some workers out of the labour force for good.This is the worst time to be raising the cost of workers. Technological advances are enabling firms to replace more and more people with computers and robots, imperilling jobs.The Congressional Budget Office reckons that only one-fifth of the income benefits go to those beneath the poverty line.Tax credits (income top-ups for low earners) are a much more efficient way for governments to help the poor—about three-quarters of the benefit ends up with employees. To the extent that firms benefit, they are encouraged to employ low-skilled workers rather than automate jobs.

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