INEQUALITY - Game of Wealth

"In a game of wealth, fat cats who don’t share keep winning" PBS NewsHour 10/8/2015

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SUMMARY:  An online game asks players to share some of their wealth on faith that the others will reciprocate.  But each player has the option of choosing not to share, amassing more and more wealth.  In designing a game to test human behaviors that fuel economic inequality, Yale University researchers are finding that the poor stay poor and the rich stay rich.  Economics correspondent Paul Solman reports.

PAUL SOLMAN (NewsHour):  So how does this game work?

AKIHIRO NISHI, Yale University:  So in front of you now, you have a tablet.

PAUL SOLMAN:  Right.

Akihiro Nishi is prepping me to play an economic inequality game at Yale University’s Human Nature Lab.  In the game, each player is at the center of a small group within the larger community.  And in each round of the game, without knowing what the others are doing, we choose either to cooperate, that is donate 50 units, which automatically double, to each of the others in our group, or to defect and not donate to anyone, just take from those who cooperate.

The game is designed to explore the human behaviors that fuel economic inequality, a hot political issue for several years now, which Senator Bernie Sanders has made the centerpiece of his presidential campaign.

As he told Judy Woodruff in May:

SEN. BERNIE SANDERS, Democratic Presidential Candidate:  Ninety-nine percent of all new income is going to the top 1 percent.  The top one-tenth of 1 percent owns almost as much wealth as the bottom 90 percent.  That is immoral and unsustainable.

PAUL SOLMAN:  Back in the Human Nature Lab, it was time to recruit players online.

AKIHIRO NISHI:  If you will look behind you for a moment, you will see now the job is actually posted, and all these people are joining from all over the world.

PAUL SOLMAN:  And so here I have 200.

AKIHIRO NISHI:  Right.

PAUL SOLMAN:  In the game.

We’d each been assigned a certain amount of wealth.  The distribution mimicked the degree of inequality in the U.S.

And I have four other players with 200, and I have one player with 1,150.  Where did this guy come from, Silicon Valley?

AFRICA - Central African Republic Humanitarian Crises

BACKGROUND:  One of the things that has happened due to Climate Change is the where Antarctic Jetstream flows.  In the past the jetstream would pass over the land on the East African coast during the rainy season replenishing the rivers and hence well water.  This jetstream has moved further east OFF the coast of East African  (over the ocean) resulting in the decade long drought.  This in turn forced villagers from the drought area to move east to the cost and the ethnic conflicts today.

"Multiple crises emerge from conflict in the Central African Republic" PBS NewsHour 4/2/2014

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JUDY WOODRUFF (NewsHour):  Leaders from Africa and the European Union met today in Brussels to confront the crisis in the Central African Republic.  More than 800,000 people have been displaced in the CAR in the past year, caught in the crossfire between warring Muslim and Christian groups.

Yesterday, Gwen recorded this conversation about what’s behind the recent violence and the humanitarian situation it’s caused.

WORLD - New Global Climate Regime?

"Did Warsaw conference put world on track towards 'new global climate regime'?" PBS Newshour 11/27/2013

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JUDY WOODRUFF (Newshour):  The devastating typhoon that struck the Philippines illustrated the vulnerability of island nations to extreme weather and added a spark to the international debate already under way over who bears the costs from climate change.

MARCIN KOROLEC, Environment Minister of Poland:  Climate is a global issue, global problem, and a global opportunity at the same time.

JUDY WOODRUFF:  The United Nations' 12-day conference on climate change began earlier this month with an audacious goal: a new agreement to cut climate-altering greenhouse gas emissions.

They met with renewed purpose.  Typhoon Haiyan had just slammed into the Philippines with 195-mile-per-hour winds.  Among the strongest storms ever recorded, it caused massive flooding, widespread destruction and took at least 5,200 lives.

Although scientists have not pointed to global warming as the direct cause for massive superstorms, they caution that greenhouse gas-fueled climate change could bring about extreme weather.  A delegate from the Philippines went on hunger strike to demand an ambitious deal.

NADEREV YEB SANO, Philippines Climate Change Commissioner:  We stand together on this urgent call for climate action and solidarity among the most vulnerable peoples on Earth.

ECONOMY - Tax Talks, Raising Tax Rates for the 'Rich'

"Tax Talks Raise Bar for Richest Americans" by DAVID KOCIENIEWSKI, New York Times 11/19/2012

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By most measures, the personal finances of Anne Zimmerman, a small-business owner in Cincinnati, have little in common with those of Oracle’s chief executive, Lawrence J. Ellison.

Ms. Zimmerman runs an accounting business and a cloud-based Internet service company with combined annual profit of $250,000 to $500,000 in recent years. Mr. Ellison made nearly $15 million in salary, bonuses and perks in 2011, even without the $62 million he received in stock options from Oracle.

In the deficit reduction debate now consuming Washington, however, both Mr. Ellison and Ms. Zimmerman are grouped in the same, sprawling category: wealthy Americans targeted for tax increases.

President Obama has focused efforts on raising revenue from the wealthiest 2 percent of taxpayers — individuals earning more than $200,000 a year and families with adjusted gross incomes above $250,000 — calling them “millionaires and billionaires who can afford to pay a little more.” Republicans have thus far resisted those efforts, countering that the high earners are job creators and that increasing their taxes would discourage hiring.

But for all the broad brush rhetoric of political debate, the rate increases and limits on deductions now being discussed by the president and Congressional Republicans are calibrated to take the biggest bite out of the highest earners. They would lead to a smaller increase for those who earn less than $500,000 a year. The figures are all adjusted gross incomes, and since some deductions would be preserved, a household would probably have more than $250,000 in total income, perhaps $300,000, before it would fall into the wealthy definition used by the president.

If all Mr. Obama’s tax proposals for wealthy Americans were enacted, they would raise $1.6 trillion over the next decade. And an analysis by the Tax Policy Center, a nonpartisan research firm, found that the increases would be heavily weighted toward the wealthiest. Taxpayers with adjusted gross incomes over $1 million would see average increases of $184,504, the study found, with higher taxes on the ultrawealthy bloating that average. Those with adjusted gross incomes from $200,000 to $500,000 would face a tax increase averaging $4,446, with people toward the lower end having only a modest increase and people on the higher end paying several times more.

A married couple with two children earning $300,000 would see its effective tax rate increase to 21.1 percent from 16.5 percent, according to an analysis by the Tax Policy Center. A married couple with two children earning $2 million would see its effective federal income tax rate rise to 26.8 percent from 21.6 percent.

To Ms. Zimmerman, the Cincinnati businesswoman, that amount sounds reasonable.

“I’m not going to change my business decision-making process based on a few percentage points of tax increases,” she said. “If it helps get the country on a better path, well, we’re all in this together.”

ECONOMY - Plummeting American Family Wealth

"Families' Plummeting Wealth Reflects 'Deep Mess' Americans Face" PBS Newshour 6/12/2012

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GWEN IFILL (Newshour): The financial crisis and recession led to a major decline in the household wealth of most Americans, setting many back to levels not seen since the early '90s. The Federal Reserve household survey shows the median net worth of a U.S. family dropped by nearly 40 percent, from $126,000 in 2007 to $77,000 in 2010.

The main culprit, the collapse of the housing market. But income dropped as well, from a median income of $49,600 in 2007 to $45,800 in 2010.

The survey shows the recession was wide, as well as deep.

We look more closely at all this with Paul Taylor of the Pew Research Center, and Rob Shapiro, chair of Sonecon, an economic advisory firm. He's a former undersecretary of commerce.

POLITICS - The Tax and Income Issues

"Shields, Brooks on 'Flexible' U.S. Policy in Middle East, Deficit Plans" PBS Newshour Transcript 4/15/2011

Excerpt on tax issue

JIM LEHRER (Editor, Newshour): But the President and Secretary Geithner on this program that same night said, look, if there is going to be deficit reduction, you're not going to do it without raising taxes.

DAVID BROOKS, New York Times columnist: Yes. That, I absolutely...

JIM LEHRER: And then he drew a line.

DAVID BROOKS: Right. And he's absolutely right about that.

JIM LEHRER: He is right, you think?

DAVID BROOKS: Right. So, but -- he is absolutely right. But there are simply not -- even if you did it by raising taxes -- and this is a very tax-heavy plan -- there are simply not enough rich people to pay for the tens of trillions of dollars in unfunded deficits these programs are racking up.

And so I think you have to talk about the middle class. You have to talk about seniors. And his program is very careful to not touch those third rails.

MARK SHIELDS, syndicated columnist: It's not a tax-heavy plan. If you want to talk about a tax-heavy plan, come up with the plan that was authored, written by Alice Rivlin, a Democrat, and Pete Domenici, a longtime Republican senator. Theirs was $2 of cuts, $2 of revenue.

Obama's is like the Simpson-Bowles. It's $2 of cuts -- I agree with you, the lacks of specific -- only $1 of tax increase. And so, I think that the case he has to make is: I believe in these programs. The program is in trouble. And if you want it saved, I am the guy that's going to save it. I believe in it.

And I agree with David that the sacrifice is going to have to be universal. It cannot be simply -- it can't be done by the wealthy. But I would point out that the wealthy, as the president pointed out very well in the speech, the top 1 percent have seen, on the average, their income go up $250 million in this past decade, while 90 percent of lower earners, 90 percent, have seen their average income go down.

And that's where the Republicans just don't get it, in my judgment. They say fairness doesn't really come into it. You have got to believe in the market.

JIM LEHRER: And, David, the Republicans said in response to what Mark just repeated that the president said, that's class warfare. That's unfair.

DAVID BROOKS: Yes. And, here, I think they're wrong. I do think we have to raise taxes on the top 1 percent. I think we have to have a big tax reform that raises revenue. And here...

JIM LEHRER: But that's raising taxes, too.

DAVID BROOKS: Right. Exactly. But you have got to raise revenue across more than just the rich. We have got to raise it on the rich to some degree, but you have got -- there's just -- as I said, there's just not enough.

And so you're going to have -- what you have to do is do what Bowles-Simpson suggested, which is lower the rates and broaden the base and close those loopholes. I think the Bowles-Simpson plan on tax reform had the right plan.

Now, the president sort of said, he suggested maybe he was a little for Bowles-Simpson. But he also says, oh, we have got to raise the rates. So he went against Bowles-Simpson. And so he is sort of two minds about that. So, you know -- go ahead.

Again, I agree, you CANNOT balance the budget without tax increases.

If, we "the people" want programs like Medicare, Social Security, and others, we have to pay for them especially if any cuts would make the program ineffective or useless. There IS no "free lunch."

Comment for Republicans; call it "class warfare" if you want, but it is still unfair. Further, I consider it un-American to have such a big imbalance.

ECONOMY - Columbia's Influx of U.S. Dollars

"Foreign investment: Colombia's too-mighty peso" by John Otis, GlobalPost 10/29/2010

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Colombia’s transformation from pariah state in the eyes of investors to dynamic emerging market has led to a massive influx of U.S. dollars. But the flood of greenbacks is drowning some of the nation’s most important producers.

Until the Bogota government took action this month, the Colombian peso had gained nearly 13 percent against the American dollar this year and ranked as the world’s most revalued currency.

That’s good news for Colombians traveling to Disney World or for those purchasing imported refrigerators and lawn mowers, which are now cheaper. But it’s a blow to many of the country’s exporters.

True, world commodity prices remain high thus Colombia’s oil, mineral and coffee exporters are holding their own. But the strong peso makes Colombian flowers, foodstuffs, garments and other textiles more expensive abroad and less competitive. As their profits tumble, these industries are laying off thousands of workers.

“For most Colombians, the revalued peso is a bad thing,” said Mauricio Cardenas, a former economic development minister who is now a senior fellow at the Brookings Institution in Washington. “Your average Colombian works in manufacturing or agriculture and these sectors have been hit very hard. The strong peso keeps unemployment high.”

The jobless rate is 12 percent while 34 percent of working Colombians labor in the informal sector and are considered "underemployed." In a letter to government officials this month, the country’s main business associations warned that the revaluation of the peso “jeopardizes the Colombian economy’s positive outlook.”

The peso’s rally is the result of economic troubles in the United States, fiscal policies in China and an oil and mining boom at home.

Bold-blue emphasis mine

POLITICAL NOTE: This is what the top 2% of American income do with their wealth. They put their money where the profit is, which CAN mean NOT in the USA. They do NOT deserve a tax cut.

WORLD - Bragging Rights of Wealth

(click for larger view)
"India: Behind Mumbai's conspicuous consumption" by Hanna Ingber Win, GlobalPost 10/29/2010

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In a city where the majority of people lives in slums, the world’s fourth-richest man has built a 27-floor house.

It is an act most global media outlets have touted as a symbol of India's robust economy on the upswing. News outlets have pointed to the dramatic increase in the number of billionaires (69) and a rapidly growing middle class. A McKinsey Global Institute report predicted that India’s 22 million middle-class urban households could increase to as many as 91 million in the next 20 years.

But inside India, the response has been more varied. Some news commentators have called Mukesh Ambani’s mansion, which cost $1 billion and is the most expensive in the world, distasteful and even vulgar.

From the average Mumbaikar, however, there has been very little resentment despite an awareness of the contrast between this one home’s splendor and the rampant poverty that surrounds it.

Rather than a slap in the face, many Mumbaikars say they are proud of Ambani's ostentatious display, which, at 570 feet, is complete with helipads, a swimming pool and home theater.

Taxi drivers point out the towering home with a sense of honor at what their city has produced, much the same way they point to the Bandra-Worli Sea Link, an attractive bridge that took 10 years to build and connects the western suburbs to Central Mumbai.

Indians do not tend to resent others’ wealth, said Samar Halarnkar, the editor-at-large of the Hindustan Times. In cities like Mumbai with a high level of upward mobility, people tend to see another’s success and rather than scorn it, admire it and strive to achieve it.

“Everyone thinks that they can get there as well,” Halarnkar said. “They might not actually get there, but there’s always hope.”

India’s young see this growth and these opportunities, and they believe that they can be a part of it.

“Definitely there is a feeling that there are opportunities here for anyone to seize,” said Rupa Subramanya Dehejia, an economist and writer based in Mumbai. She said she travels back and forth between North America and India and notices a significant difference between how the young see their future. In the United States and Canada, she said, she senses “doom and despair.” In India, the youth emit a sense of optimism.

“They think that they’re only going to go up,” she said of India’s young people.