Economist 8/17/15

  1. DESPITE two catastrophic air crashes (the disappearance of MH370 over the Indian ocean, and the shooting down of MH17 over Ukraine), 2014 was the safest year on record for civil aviation—with only one accident for every 4.4m flights. Even among commercial airlines, carelessness, fatigue and lack of experience by flight crew account for around 60% of fatal air crashes. For private planes, pilot error is responsible for a greater proportion still. The most dangerous phases of flight are take-off and initial climb (which account for 20% of fatalities, despite amounting to just 2% of the duration of a typical flight), and final approach and landing (36% of fatalities during 4% of flight duration).
  2. More than 40% of pilot fatalities are the result of a stall that turns into a spin. If this happens at low altitude, there is little room for recovery. And low altitude is just where it does tend to happen. Some 80% of stall-spins occur within 1,000 feet (300 metres) of the ground.In level flight, this “angle of attack” is 3° or 4°. Increasing it increases the lift generated, but only up to a maximum of between 15° and 20°., eddies start to form in the airsteam flowing over the wing, causing that flow to separate from the wing’s surface. When this happens, the amount of lift starts to fall off dramatically. Clearly, if planes could be designed so they would not stall, they would be unable to spin in this way.One reason is cost. Fabricating a spin-resistant airframe with leading-edge “cuffs” and other lift-generating devices is not cheap. It is less expensive to endow a plane (at least small ones) with a parachute all of its own, to lower it down gently in case of an emergency. Another reason is weight.
  3. AMERICAN companies are on the move. On August 6th CF Industries, a fertiliser manufacturer, and Coca-Cola Enterprises, a drinks bottler, bothFor more than 30 years companies, especially American ones, have been merging with foreign firms or acquiring them outright in order to shift their tax bases abroad. said they would move their domiciles to Britain after concluding mergers with non-American firms.Ever since, this kind of move, called a “corporate inversion”, has been an attractive way for American companies with overseas earnings to reduce their tax bills.When company A (based in America, say) acquires company B (based in Ireland) the managers of the combined A+B entity get to choose a domicile. If they choose the United States, they are in effect choosing to pay relatively high American corporate rates—up to 39%—on all the overseas profits they repatriate. If they choose Ireland instead, they will have to pay a much lower tax rate (12.5%) on profits generated in Ireland, but the crucial bit is that they will pay only the local rate on whatever profits are generated in foreign subsidiaries—because Ireland, like most other countries, taxes on a strictly territorial basis.
  4. New York City needs the housing. The population has swollen to 8.4m, up nearly 3% since 2010, but the housing stock has not kept up. A tight market with few vacancies (a 3.45% rate in 2014) has been pushing up prices. The median rent paid in the city grew by 12% between 2005 and 2013, after adjusting for inflation. One factor is a flood of money coming in from overseas. Developers are benefiting from investors from China, Russia, Brazil and other countries where wealthy people are looking for a relatively safe place to park their money. New York city’s steadily rising property prices are still seen as a relative bargain when compared with London and Hong Kong.
  5. The sudden spike is largely attributable to a clause in the city’s complicated property-tax code, which taxes different types of abode at different rates, and favours homeowners at the expense of renters. In order to reduce taxes on the construction of new multi-family high-rises—which tend to be taxed at especially high rates—developers rely on something called the 421-a programme, which exempts new construction from property taxes for decades on the condition that they also build some more affordable units, and is yet to be renewed by the state legislature.The 421-a scheme costs the city an estimated $1.1 billion in lost tax revenue every year, making it a pricey way to build new housing.

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