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SWFs can help the financial system in times of trouble Sovereign wealth funds should be credited with coming to the rescue of the global financial system during the turmoil of 2008. With their long-term horizons for a return on their investments they have been willing to provide billions of dollars in new capital to d... | |
SWFs should be welcomed for the benefits they bring rather than ostracized for doing what others do. Developed countries are guilty of a great deal of hypocrisy in their attitude to the sovereign wealth funds of emerging economies. In the past their own companies were used as instruments of state power, for example BP... | |
Restricting SWFs is protectionism Restricting the activities of sovereign wealth funds is a form of protectionism, which is itself likely to stimulate further demands for barriers against globalisation. Western countries oppose protectionism when it is from other countries preventing western companies investing so it ... | |
SWFs represent good economic management by countries with surpluses Sovereign wealth funds are highly beneficial for states with large financial surpluses. Traditionally they have been run by resource-rich countries which wish to diversify their assets to smooth out the impact of fluctuations in commodity prices on th... | |
The amounts sovereign wealth funds invest in the poorest countries is tiny compared to their overall portfolio. In 2008 the head of the World Bank Robert Zollick was attempting to persuade sovereign wealth funds to invest just 1% of their assets in Africa. [1] Investment by SWFs in Africa is not all good. Sovereign wea... | |
Sovereign Wealth Funds could potentially help the financial system but they will only do so if it is in the national interest of their country to do so. It is this political dimension that is the reason for more regulation. Moreover regulation of SWFs will not prevent these funds from helping the global financial syste... | |
This price-lowering effect is most likely to be felt in those industries where the majority of the costs are in wages; these industries are likely to be service based industries. Individuals, especially poorer individuals, rarely buy services, so the effect on the poorest is likely to be limited. | |
This will distribute wealth more evenly As a result of having to pay important directors and employees a lower wage, businesses will be able to produce their goods and services for a lower cost, and sell therefore sell them for a lower price. This will lead to a more equitable distribution of wealth, as the poorest wi... | |
It is equally likely that money is a significant motivator in productivity, and that limiting wages will therefore harm productivity. | |
Equality is in and of itself a good thing Firstly, it limits social tension that may arise due to public dissatisfaction with high wages; see the attacks on the famous banker Sir Fred Goodwin in the UK1. Secondly, people may feel that society recognizes them as being more equal, increasing the perceived self-worth of ... | |
Systems for implementation This system would be best implemented by imposing a mandatory 100% tax on all personal income over $150,000, and all bonuses over $30,000. This means that some revenue could still be raised from this if people did continue to pay large salaries and bonuses, although they are unlikely to do s... | |
Some evasion of this is inevitable; figures show $2 trillion of unreported income in the US in 20081. Furthermore, international cooperation is unlikely, as each country has a strong incentive to renege on agreements to attract more talented people to their country. 1 E . Feige, "America's Underground Economy: Measuri... | |
Social tensions are greatly exaggerated, and only actually felt when a specific crisis and against a very specific figurehead (in the case of Fred Goodwin, an entirely isolated example, the large amounts of media coverage he received for his role in the banking crisis). Furthermore, feelings of inferiority are typicall... | |
It is likely that foreign demand will displace national demand for properties, especially in key city areas (such as New York or London). Furthermore, having a nice house is one of the strongest incentives to have a job and be a productive tax-paying member of society; loss of this incentive may decrease a society's ou... | |
This will enable people to better choose their jobs When wages are better standardized across professions, people are less likely to feel socially pressured into seeking out a higher paid job. As such, they are more likely to choose their job on the basis of other factors, such as how much they enjoy the job, or how e... | |
This will limit the control of the rich over key scarce resources Some resources –most notably housing – are very important to large numbers of people, and owning them gives people a great deal of happiness. This policy will limit richer people owning several properties while others live in rented accommodation or sma... | |
There is still significant social prestige to being a doctor that will motivate people to take up the role; the same will be true for other high-paid jobs where there is a lot of training, such as lawyers. This prestige is often a key part of the reason people do the job in the first place; many doctors are paid far le... | |
The effect of high salaries on levels of labor supply is likely to be marginal. People work in part due to the significant social pressure of having a job and advancing themselves comparatively against others. This motivation will still exist, as there will still be rewards to advancing your career; a salary closer to ... | |
This motion will lead to people leaving the country, and will limit the intake of skilled workers Many industries, especially at the highest paying end, rely on people of various nationalities. This is especially true in places seen to be financial centers of the world, such as New York, London and Tokyo – for example... | |
High salaries incentivize people to take risks and undertake research Many entrepreneurs are driven by profit. This is the reason that people take out large loans from banks, often with their home as security, and use it to set up a business; the hope of profit and a better life. Without that incentive, the risk has a... | |
High salaries incentivize people to do difficult or unpleasant jobs Some jobs are extremely difficult or unpleasant. Consider a doctor, who trains for many years, often unpaid, in order to do their job – and the average doctor’s salary in the USA is close to the proposed cap, and surpasses it with merely 5 years exper... | |
High salaries incentivize people to work hard People respond to incentives, and one of the most direct incentives is a financial one. Higher salaries encourage people to deploy their labor. This benefits society by increasing tax revenues that can be spent on redistributive policies; for example, consider the much mal... | |
Under this policy, companies will not be able to spend their profits on inflating their salaries, and so are more likely to have a long-term outlook to the company. The best way to advance long-term interests is through research; it is possible that all their excess profit will be spent on this. While entrepreneurs may... | |
The significant difficulty of moving country, such as leaving behind friends and family, and leaving behind an area (or even language) you know well, are likely to limit emigration. As for immigration, the skill set is typically already within the country; if not, this policy may encourage a focus on an educational sys... | |
The single biggest impact the US government, or any government, can have on the economy is what it does with its own money. By creating jobs through public expenditure it stimulates local economies and creates growth. Proponents of the baby boomer crisis theory also ignore one very significant fact – these people did ... | |
Paying off national debt via austerity measures would free-up money used for interest payments The first of the baby boomers start retiring in 2011 and, as a result, qualify for Medicare. There are 78 million people in this generation and all of the statistics suggest that they are likely to live significantly longer ... | |
The only ways to control the deficit, other than stimulating growth and the tax revenues it produces, would be either to cut services or to increase taxes. Both actions would harm the longer term objective of stimulating growth as they both take cash out of the real economy. By contrast, focusing on domestic spending ... | |
Governments need to live within their means Ultimately the US Government has to pay its bill just like everyone else. Ultimately maintaining a permanent deficit harms the economy creating both inflationary pressures and effecting interest rates. However, these pressures are not the main source of concern. Although de... | |
It is incredibly unlikely that China would ever call in its debts as any damage done to the dollar would be fairly insignificant compared to the impact on China’s own economy and currency. America can afford to service its debts and doing so is a major stimulus to the global economy. Nobody has an interest in breaking... | |
Many of the reasons for operating a debt have now been eliminated At the end of the Clinton presidency the government was running at a healthy surplus following the longest sustained period of growth in US history. Bush Chose to spend that on tax cuts and two extremely expensive wars (the War in Iraq was the mostly co... | |
If China moves to recall the trillion dollars or so that they are owed because they no longer trust US debt, or even just to offload it, the effect on the average American would be devastating. The benefits in increased exports would be more than compromised by increased costs for basic goods and services. Inflationary... | |
This may well have been the case when a AAA credit rating could simply be taken for granted but it is no longer the case. Standard and Poor has down-graded America’s credit rating [i] and China looks set to follow suit [ii] . A lower rating means paying higher interest on government borrowing. This is new territory fo... | |
A recession is not the point at whcih debts should be paid back. The state should focus on job creation strategies It would be the height of irresponsibility for the US government to even think about giving anything a higher economic priority than the creation of jobs at a time when unemployment is running at 9.1%. I... | |
The US should focus on divising ways in which to pay the medicare and medicaid bills faced by its population The realities facing the US government are that it has two separate sets of bills to pay. On one hand there are those to central banks and overseas investors. The others are to its own citizens who have been gi... | |
Nobody is going to risk financial instability in the US by calling in the principle sum on the loans that it has taken out There really is no problem with the Federal Government running at a deficit virtually permanently – as it has for most of its history. There is no threat of a default as this would require any len... | |
At some point the US needs to come to terms with its debts and a gradual collapse of confidence in the US’s ability to pay its debts will not help the American economy or anyone else’s. With a declining tax base – both as a result of unemployment and an increasing burden of economic inactivity through retirement, the g... | |
The social problems that have taken root in America result from a number of converging causes. While many individuals may desperately want to contribute to the debate surrounding these problems, attributing the declining performance of the American economy highly visible social divisions is misleading and unproductive.... | |
The Jobs Act Redresses the Balance Between the Wealthy and the Middle Class One of the more divisive problems in America is the increasing inequality between the wealthy and members of other classes. The harms that could, and have resulted from this extend to the Occupy Protests in the tail end of 2011, as well as rio... | |
The American Jobs Act may be projected to create a lot of jobs. However, this comes following tax cuts and a fiscal stimulus package in 2009. In the past these measures to help the economy failed, with unemployment remaining stagnant at around 25 million despite the efforts by the government in 2009. The reason this o... | |
The American Jobs Act Will Help the Long Term Unemployed The long term unemployed in America are important to the economic recovery. Whilst those who are temporarily unemployed will eventually come back into employment and start contributing to the economy, they will often be offset by those losing work. For the U.S. ... | |
Whilst long term unemployment is an issue within America, it is not an issue to be focused on during a time of economic recovery and potential recession again. In a recession there are significantly more people who suffer from temporary unemployment because businesses that are unable to survive the hardships of the rec... | |
The American Jobs Act Helps Small Business and Creates Jobs The American Jobs Act helps small businesses and is also set to significantly increase the number of jobs available to people. Small enterprise is particularly important in the creation of jobs because these businesses tend to be start-up businesses. Many sta... | |
Whilst successful individuals may be confronted with an increased tax bill, the American Jobs Act also significantly reduces taxes on businesses. This is especially important with respect to innovative risk as it is businesses, not individuals, which bear the main brunt of risk following innovation. As such, it is rea... | |
Even if the American jobs act is not deficit neutral, it will have a significant effect in the future, through spending more in the present to speed the American recovery period and prevent a double dip recession. During the boom period it will be significantly easier to pay any increased deficit back. Further, even if... | |
The American Jobs Act Encourages Risk Without Infrastructure or Results in Inaction By The American Jobs Act is problematic because one of the main causes of the recession was excessive risk taking in certain businesses. This reckless behaviour was the result of poor regulatory infrastructure – the state and independe... | |
The American Jobs Act Will Not Help Successful Businesses While the American Jobs Act gives help to small businesses it does nothing to help proven companies that already have a record of success as is shown by their size. Indeed these companies may even be hit by the revenue raising side of the act. It is often the w... | |
The American Jobs Act is Not Deficit Neutral One of the issues with the American Jobs Act is that while it is claimed that it will be deficit neutral this may not actually be the case as the costs are front loaded whereas the revenue is not. The Congressional Budget Office estimates it will be neutral by 2021 but will... | |
Whilst the jobs act does not fully cover infrastructure, more acts can be drafted in order to deal with this problem. Further, the financial sector is likely to now be significantly more wary of the problems that initially caused the recession. This is because the collapse of Lehman and the Sub Prime crisis as well as ... | |
For countries that are dependent on their resources and lack developed industries, free trade does not promote efficiency. Free trade makes them overly dependent on their resources, which other countries are coming in and buying. This is because their domestic industries cannot compete with those of the developed world... | |
Free trade promotes global efficiency through specialization. Operating at maximum productivity is one of the most important aspects of an efficient economy. The right resources and technology must be combined to produce the right amount of goods to be sold for the right price. Therefore all markets should strive for ... | |
Therefore, there is no empirical evidence that proves that poverty is reduced. If countries removed all agricultural subsidies domestic production would decrease and world food prices would increase. Poor countries that import food will suffer from increased food prices due to trade liberalization. 45 of the least-deve... | |
Free trade creates substantial cooperative relationships between trading partners. There has long been a debate as to whether aid or trade is more effective in promoting development and cooperative relationships. Being interlocked through trading relationships decreases the likelihood of war. If you are engaged in a m... | |
Free trade is the economic policy that many liberal countries—who are less likely to go to war with each other—have chosen. It’s not the policy that makes them liberal. These studies show such a strong correlation, because the countries that have chosen free trade are largely a huge block of countries that already get ... | |
Although free trade may promote innovation and growth, because of issues like dumping (where rich countries sell their products very cheaply in poorer countries and make it impossible for local industry to compete), or jobs being exported to places where labor is cheaper, free trade has significant costs and does not n... | |
Free trade reduces poverty. Free trade reduces poverty for two reasons. First, it creates direct "pull up" as Columbia economist, Jagdish Bhagwati calls it because it creates demand for a country's good and industry and thus employs the poor and expands jobs1. Additionally it creates more revenue for government that c... | |
Free trade promotes growth in all countries. Through global competition, specialization, and access to technology, free trade and openness allow countries to grow faster—India and China started in the 1980s with restrictive trade policies, but as they have liberalized they have also improved their growth enormously1. ... | |
Even with tariffs the steel industry in losing jobs. Nothing can save steel. It simply does not operate as effectively as other global steel industries. Further, protectionism helps a small group of workers, the rest of American industry that is dependent on steel for their operation is hurt by high prices and ineffici... | |
Marian Tupy of the Center for Global Liberty and Propensity states, "In the history of the world, no country has ever suffered military defeat, or capitulated to sanctions, due to the inability to produce a domestically producible product"1. Globalization also means there are many partners to trade with, so even if a c... | |
Free trade hurts the world's poor Free trade creates demand for extremely cheap products produced by poor people in terrible conditions in third world countries. In Indonesia, there are people working in sweatshops for 60 cents an hour1. It is estimated that there are 158 million child workers around the world2. Free ... | |
Implementing true free trade is unfeasible because it is unreasonable An increasing number of countries are looking to bilateral Free Trade Agreements that will help them specifically. They are not directly open to free trade with all countries. These FTAs are undermining the position of the World Trade Organization w... | |
It is just to protect industry and jobs. When countries dump their products in other markets without barriers, they undercut the ability for local industries to compete. If those local industries try to compete, large foreign or multinational companies can use extremely low predatory pricing to make it impossible for ... | |
Free trade jeopardizes countries' security. If a country goes to war with one of its trading partners, it needs to have the capacity to produce all of the necessary tools for war domestically, and not depend on other countries for supplies and parts. Additionally there is fear that disease-causing agents and bioterror... | |
Opening up in FTAs is the first step towards liberalization in the larger sense and opening up to all free trade, so it should not be considered a failure. Additionally, free trade needs to balance international and domestic goals so coming to an agreement is difficult, but the WTO has been successful in the past. The ... | |
Sweatshops are unfortunate, but free trade can benefit from cheap labor without relying on exploiting workers. Economically, cheap labor is a step in the right direction for poor countries and their people. Making 60 cents an hour in a factory that exports goods is better than 30 cents an hour working in the field, try... | |
Guaranteeing a temporary job for young people is a temporary solution. Having a job for a short period of time will not guarantee more permanent employment. Britain’s Mandatory Work Activity scheme does some of this proposal by having very short term unpaid job placements however a study has shown that having this plac... | |
This policy is necessary to avoid a lost generation Rising youth unemployment can be considered an international timebomb. Young people are the next generation of workers and consumers in the economy. When they are unemployed, the situation can be alarming. This is because of the importance of getting a job early on s... | |
While there is a benefit to diversity it does not have to be obtained by employing younger people but instead by having racial and gender diversity. Companies have the right to choose their own recruitment practices. It is up to them, and them alone, who they choose to recruit. If they believe in such benefits and tha... | |
The EU should guarantee youth a job in order to equal their chances. The EU member states should rely more on public employment services, which should be focused on finding jobs for young people. With government funding, they can work with the private sector to offer decent temporary jobs to young people. This model i... | |
Age ‘discrimination’ runs both ways. Many companies operate policies of age discrimination against older workers. Older employees are often likely to have more out of date skills. According to a survey of businesses, the reasons for not hiring older workers are their lack of flexibility and unwillingness to learn new t... | |
These placements will only be for six months. This combined with the intent not to make the program too expensive means that the benefit will be limited in terms of the fiscal boost provided. Those who are getting a salary only for six months are not likely to feel rich from getting that money so will probably try to s... | |
Increased workforce diversity While we often think of workplace diversity as being about having people from all over the world and both men and women a good age balance is necessary too. By bringing in this policy, younger workers will be in the same workplaces as older employees, and vice versa, making for more workp... | |
This policy is good for EU economies. If the government is employing people then it is going to be boosting the economy. Providing a fiscal boost by spending money is one of the most accepted ways of boosting the economy. In this case spending money on temporary workers is good in several ways. First it is a fiscal b... | |
Training is indeed the answer but it makes sense for this to be done on the job rather than simply in lecture theatres. Where there are skills gaps these gaps should be filled by encouraging and paying for temporary jobs to help fill those roles. In this way the young people involved will gain the skills for an area of... | |
Businesses are already regulated in who they can hire and on what terms– for that reason there are child labour, minimum wage and anti-discrimination laws. These kind of regulations come both from national governments and the European Union. Governments have always had this right. This policy is therefore not damaging... | |
This policy would only serve to discriminate against unemployed people older than 25 Even though there are large numbers of young people unemployed, they only make up around a fifth of the total unemployed population. 26.654 million men and women were unemployed in July 2013 in European Union. Only 5.560 million of th... | |
The policy is not a long term solution. Job guarantees for young people may place them in employment for some time at a low cost, but does not offer a permanent solution. The Swedish job guarantee scheme has been criticised for this reason [1] . They will not create a solution based on skills, qualifications and econo... | |
Temporary employment for youth acts against freedom of choice for businesses In a free market the core concept is freedom of choice. The consumer chooses what they want to buy. And by the same measure there needs to be freedom of choice for employers. They need to be able to decide what products to make, how to market... | |
It should not be assumed that today’s unemployed youth will be the target for recruiters in the future. In four or five years’ time there will be more graduates from high schools and universities looking for work and those companies that want to employ young people will look to them rather than people who have been out... | |
If those who are unemployed were the right people to be doing those jobs, they already would be. Employers want to maximise their bottom line and will hire the best workers they can find. Forcing them to take on lower skilled and less able employees reduces competitiveness and causes inefficiencies. "The bell curve fo... | |
There should be a legally mandated ceiling on weekly working hours, because it creates employment. According to the CIA World Factbook, non-industrialised countries have an average of 30% unemployment and industrialised nations have somewhere between 4-12% unemployment1. Underemployment is considered to be even higher... | |
Business will replace workers not with other workers, but with machines, especially in the age of robotics and other automated mass production methodologies. Businesses will replace the lost manpower not with more manpower, but with machines wherever possible. "Automation has eliminated some 10 million jobs, mostly in ... | |
There must be a maximum amount of performance that people are capable of, given rest and reward. To work people too long is to waste their potential. Human beings require downtime in the form of sleep and rest in order to maintain their peak functioning. Long working hours cut into this rest and sleep time and therefo... | |
While people do indeed need proper rest and downtime in order to perform to their maximum potential, exactly how much rest they need changes from individual to individual. A "one size fits all" approach through legislation will necessarily mean that some people who could work quite comfortably with no ill effects will ... | |
Workers already have protection from over work. They have the ability to say "no" and they also have the ability to find themselves other, less lengthy employment. The fact that jobs with long hours exist is proof that people are happy with the situation. A survey of people opting out of the European working time dire... | |
Introducing a cap on working hours would reduce unemployment. One of the most fundamental principles of economics is that of supply and demand. By artificially reducing the supply (of hours) then demand must increase for other labour, ceteris paribus. The only question once that is realised is what limit should there... | |
A maximum working week provides protection for workers. In the Universal Declaration of Human Rights in article 23 “Everyone has the right to work… to just and favourable conditions of work” and article 24 “Everyone has the right to rest and leisure, including reasonable limitation of working hours and periodic holida... | |
It isn't actually being suggested that we reduce the total amount of work done. What is being suggested is that we have some of the unemployed be allowed to get access to the labour that is required via limiting the hours existing workers can put in. GDP growth can still be achieved as the amount of work remains unchan... | |
That's right, even more jobs would be created by hiring people to check on procedures, workplaces and hours worked. When there are literally millions of displaced potential workers and all the social and economic problems unemployment can cause this is no bad thing. Not only that but there are already policing of busi... | |
The market already limits worker hours when left to its own devices, no intrusion is required. Long hours which reduce worker effectiveness already make a business less competitive. The invisible hand will remove those businesses which exploit their workers, or who don't take into account employee motivation and what ... | |
Small and mid sized businesses cannot afford the extra costs involved in complying with such a policy. Each new worker has certain fixed costs associated with their employment. Tax, insurance, training, office space, record keeping, background checks, sickness, disciplinary as well as necessary equipment, the actual c... | |
There should be no legally mandated ceiling on weekly working hours as it limits economic growth. The transaction, hiring and human resource costs of forcing businesses to take on more workers mean that productivity is reduced and resources are wasted. While GDP might rise because of these actions, GDP will rise due t... | |
Policing such a policy creates its own set of problems for the society and costs for the economy Complying with any regulation has a cost attached, and so does policing that regulation in order to make it effective. How would anyone know who was working where and for how long without either a very accepting populace o... | |
Only some SME will be affected, and those on such a knife edge financially would probably not have lasted long in the face of competition in any event. Such enterprises are really being subsidised by taking advantage of their workers at the expense of those workers health. | |
Given the market is already moving in such a direction, there is no need to wait for the slow whittling away of the less optimal when it can be done right away by legislation. This will give a huge head start compared to any economy which uses the market mechanism and make any economy who takes this road advance in ter... | |
Unfortunately housing upgrade programs do not always equate to reductions in disease. The vital components including the need for improved community sanitation, access to services - including water and health-care are often ignored. Ananya Roy (2009) shows how the informal nature of India’s state constricts effective p... | |
Upgrading housing: tackling the disease burden Slum upgrading involves in-situ investment to improve informal settlements; and integrate slums into the city. Two forms of slum upgrading may be classified: the provision of basic services (i.e. housing and sanitation) and the provision of secure land tenure. The burden... | |
There are schemes to finance homebuilding Affordability is a key challenge for slum-dwellers to enter the housing sector - challenges range from being able to access capital required to buy property, to the volatile prices in Africa’s property market. Improving housing in slums enables dwellers a choice to exit and mo... | |
To tackle gender discrepancies an engendered strategy is required on land, not only housing. For example, Gulyani and Connors (2002) illustrate the Kalingalinga slum upgrading project in Zambia resulted in negative effects for women. Following investment in slum upgrading the proportion of female-headed households dec... | |
Ensuring supply = demand A key issue ensuring the growth of slums is the demand for housing is failing to be met. Investment is required to supply housing. Taking the case of Social Housing programs provided by PAHF (Pan-African Housing Fund) demand is being met by providing affordable houses. 41.5mn US$ has been con... | |
Cost-effective planning for ‘Slum Cities’ We live in a planet of slums (Davis, 2006), and slums remain a key, and growing, characteristic of contemporary African cities. Slums articulate the infrastructural deficit across African cities - investments are needed. Slums are a key urban challenge; and need to be tackled... |
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