For the Germans, July 8 was a good day. Not just because it also happened to be your columnist’s birthday or because of Germany’s emphatic 7-1 win over Brazil in the World Cup, but because this year, it also marked Germany’s Tax Freedom Day. Until then, theoretically all that the average German earned in income over the year was taxed away by government. Now Germans can actually start earning money for themselves for the rest of the year.

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hOccupy Central with Love and Peace, a civil-disobedience campaign for democracy and direct elections in Hong Kong, was initiated a year and a half ago by Benny Tai, an associate professor of law at the University of Hong Kong.

Hong Kong’s chief executive officer is currently chosen by a 1,200-member election committee consisting of individuals and groups, which are increasingly pro-Beijing. The Chinese central government has promised universal suffrage in the next elections, in 2017, raising much hope among Hong Kong’s people.  Continue reading

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Dr. Barbara Kolm talks about the grim economic outlook for Europe in an interview with the Washington Times.

The ECB’s policy with its negative interest rates and European politicians living in a “parallel universe” constitute the biggest problems for future growth within the EU. “The modest growth rates of below 1% over the last years can not really be considered growth”, Kolm states. Future developments will depend on politicians smarting up and embracing wise policies that may eventually lead to serious and sustainable growth, providing reasonable incentives for enterprises. At the moment however these positive changes are quite out of sight.”

 

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Dr. Barbara Kolm talks to Kitco NEWS about the current economic situation in Europe.
While she thinks that some things have improved and private business are doing quite well or are recovering in most of the countries productivity is still an issue in general. However, it is governments which continue to be in trouble and are still reluctant to reduce their sovereign debts. The political framework all over Europe needs urgent reform!
Especially the policies of the ECB have been flawed over the last few years. While its original task consists in merely keeping the money- supply constant and avoiding inflation, it is engaged in the frivolous printing of new money and the bailing out of banks and whole countries.
“Structural reforms may hurt in the beginning, but they need to be implemented nevertheless. In the long round sound economic policy will definitely pay off”, Kolm is convinced.

 

 

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BIS1by John E. Charalambakis

In the most recent report from the Bank for International Settlements (BIS) – the central bank of the central banks- we observed one the clearest divisions between the accommodative/coordinated policies of the most important central banks and the opinion of the BIS. The latter is warning of potential dangers in the global economy due to the over-accommodative policies, and emphasized that the central banks in their zeal to overcome the Great Recession may be ignoring the concept of financial cycles.

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by Jan Winiecki

Here we go again, straight into the old debate as to from what the poor benefit more: growth or redistribution. It has been rekindled by the near simultaneous appearance of two books written by Indian economists. I think I am justified in calling professor Jacques Dreze an (honorary) Indian, given his attachment to that country (even if I definitely do not share his and professor Amartya Sen’s prescriptions…).

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by Tyler Cowen

Income inequality has surged as a political and economic issue, but the numbers don’t show that inequality is rising from a global perspective. Yes, the problem has become more acute within most individual nations, yet income inequality for the world as a whole has been falling for most of the last 20 years. It’s a fact that hasn’t been noted often enough.

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by Sydney Williams

Asininity is a common malady of the political class. Nevertheless, one of the more moronic examples I have seen was a letter by Treasury Secretary Jack Lew to House Committee on Way and Means Chairman Dave Camp on July 15th. In the letter Mr. Lew argues we should fence in American corporations, calling for “a new sense of economic patriotism.” He argues that American companies, in being responsible stewards of their owner’s wealth, are “effectively renouncing their citizenship.” That was a curious metaphor for an Administration that argues, in cases like Citizen’s United and Hobby Lobby that corporations are not individuals. To whom is owed a corporation’s primary loyalty – the government of the United States, or their shareholders, customers and employees?

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by Adrian Moore

I have lived in California for 52 years, save a few when the Army stationed me elsewhere.

I could fill pages and pages with lists of things I love about California, including the incredible natural beauty up and down the state, cool history, awesome ethnic enclaves of every type, fun cities and peaceful mountains.

But, on July 1, I am moving out of California, with regrets but without second thoughts. This state is simply no longer a desirable place to live for my family.

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Image by © Dreamstime

by Stewart Dompe and Adam C. Smith

Joesph Stiglitz, 2001 Nobel laureate in economics, wants to revitalize industrial policy through greater government intervention in favoring certain technologies over others. Stiglitz correctly points out the importance of learning and technological development in economic growth, citing such luminaries as Joseph Schumpeter and fellow laureate Robert Solow in defending his position that industrial policy is a productive tool for states in both the developed and developing world.

Stiglitz’s emphasis on development through innovation and technology is noteworthy if for no other reason than it shows that mainstream economics is finally moving beyond archaic models of development, where the panacea for developing nations was to airdrop “shmoo” capital upon an economy and wait for the catch-up effect to lift them out of poverty.

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