Ebola-Stricken West African Economies Are Crashing

We warned five weeks ago of the potential economic damage that the Ebola virus could do to West African economies, and now it appears The IMF, The World Bank, and the United Nations Food and Agricultural Organization have warned that Liberia and other West African economies, as WaPo reports, begun a frightening descent into economic hell. Fear that "that people would abandon the fields and factories, that food and fuel would become scarce and unaffordable, and that the government’s already meager capacity to help, along with the nation’s prospects for a better future, would be severely compromised" are no longer scenarios – they are real! Annual inflation rates have doubled, fuel sales are down 35%, Liberia's productivity is down 50-75%, and "micro-trade" financing is "completely depleted."

The IMF warns “In addition to exacting a heavy human toll, the Ebola outbreak is having a severe economic and social impact, and could jeopardize the gains from a decade of peace.”

With WHO and CDC expecting a worst case scenario now, the $809 million collapse in GDP across Sierra Leone, Guinea, and Liberia is stunning…

 

As The Washington Post reports,

Three recent reports from international organizations that seem to bear out the worst-case scenarios of months ago: that people would abandon the fields and factories, that food and fuel would become scarce and unaffordable, and that the government’s already meager capacity to help, along with the nation’s prospects for a better future, would be severely compromised.

 

They are no longer scenarios. They are real. While these trends have been noted anecdotally, the cumulative toll is horrific.

 

The basic necessities of survival in Liberia — food, transportation, work, money, help from the government — are rapidly being depleted, according to recent reports by the United Nations Food and Agricultural Organization, the International Monetary Fund and the World Bank.

 

 

The International Monetary Fund said in a separate report that restrictions on public transport, internal travel and trade are burdening the country’s ability to distribute the food that is available.

 

The combination is driving up food prices rapidly, said the IMF even as “panic buying” is boosting demand, according to the World Bank. The IMF is projecting an inflation rate of 13.1 percent by year’s end, compared with 7.7 percent before the Ebola epidemic started taking its toll.

 

Transportation has been badly disrupted, one indicator being a drop of between 20 and 35 percent in fuel sales.

 

The services sector, about half of Liberia’s economy, employing about 45 percent of the work force, has experienced a drop in turnover of 50 to 75 percent, the World Bank says.

 

Savings and loan programs, called “susu,” that finance “micro-trade” and small businesses — especially those run by women — have been “completely depleted,” with participants no longer able to pay their debts, said the FAO.

 

Projections for short-term and long-term economic growth are getting ratcheted downward, with the worst-case estimates nothing short of catastrophic. The World Bank, looking at 2014 alone, projected a reduction in growth in Liberia from 5.9 percent to 2.5 percent, a plunge that would be considered calamitous in any country. In 2015, under its most dire but altogether realistic scenario, Liberia’s output could decrease by nearly 12 percent in 2015.

 

Projections for inflation are moving upward, with the IMF estimating an inflation rate of 13.1 percent by year’s end, compared with 7.7 percent the year before.

 

On top of it all, the revenue coming in to the Liberian government has dropped sharply, by 20 percent, Liberia’s foreign minister Augustine Kpehe Ngafuan told the United Nations earlier this week. “Consequently, our ability to provide for basic social services and continue to fund key development projects are significantly diminished.

*  *  *
“The Ebola epidemic is washing away years of progress and hard work,” said the FAO in its Sept. 23 report.




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Eric Holder Tells Prosecutors to Stop Coercing Guilty Pleas With an Especially Terrifying Sentence Enhancement

Families
Against Mandatory Minimums (FAMM)
notes
further evidence of Attorney General Eric Holder’s
efforts to make the criminal justice system
less senselessly punitive
: Last Friday he issued a

memo
instructing federal prosecutors that they should not use
sentence enhancements based on a defendant’s criminal history
merely to coerce a plea agreement. Under Title 21, Section
851
of the U.S. Code, a prosecutor has the power to
dramatically increase the mandatory minimum sentence a defendant
faces by filing an “information” noting prior convictions.
Prosecutors have often used that threat to avoid the inconvenience
of a trial by scaring defendants into pleading guilty. Not anymore,
says Holder:

Prosecutors should decline to seek an enhancement pursuant to 21
U.S.C. § 851 unless the “defendant is involved in conduct that
makes the case appropriate for severe sanctions”…Whether a
defendant is pleading guilty is not one of the factors enumerated
in the charging policy….An § 851 enhancement should not be used
in plea negotiations for the sole or predominant purpose of
inducing a defendant to plead guilty….A practice of routinely
premising the decision to file an § 851 enhancement solely on
whether a defendant is entering a guilty plea…is inappropriate
and inconsistent with the spirit of the policy.

To give you a sense of the high-pressure tactic Holder is trying
to stop, here are a couple of examples drawn by FAMM from a

decision
by U.S. District Judge John Gleeson in U.S.
v. Kulpa
, a case I mentioned in a 2013
column
about the penalties people can receive for exercising
their right to trial:

  • In 2002, Dennis Capps, a methamphetamine addict, pled guilty to
    trafficking “an amount of drugs you can hold in your hand.” He went
    on to become a model prisoner and a model probationer, according to
    his judge. A decade later, he relapsed into substance abuse and was
    again caught with drugs. He refused a plea bargain, so federal
    prosecutors filed a section 851 enhancement to count his conviction
    from 2002, which actually covered two offenses that occurred a
    month apart. Instead of receiving the 10-year mandatory minimum
    that his most recent offense required, the filing of a section 851
    enhancement required his judge—against her wishes—to sentence
    Capps, now 39, to life in prison without the possibility of
    parole.
  • Kenneth Harvey had two prior drug convictions when prosecutors
    filed a section 851 enhancement against him in 1984. Neither of
    Harvey’s prior convictions had resulted in him spending time in
    jail. Yet at the age of 24, he received a mandatory life sentence
    without the possibility of parole for selling less than $10,000
    worth of drugs. Harvey’s judge opposed the sentence and recommended
    that he receive executive clemency after 15 years.

“FAMM applauds the attorney general’s repudiation of this
heavy-handed practice,” says Mary Price, the group’s general
counsel. “The trial penalty is intolerable. This guidance to
prosecutors makes it quite clear that massively enhanced drug
mandatory minimums may not be invoked absent cause. While the
practice of threatening defendants with the trial penalty to induce
them to plead guilty should be abandoned altogether, this is a
good start.”

As Price notes, Section 851 is just one of the mandatory-minimum
provisions that give prosecutors
tremendous leverage
in plea negotiations. Another powerful tool
of intimidation is Title 18, Section
924
, which prescribes mandatory minimums for possessing a gun
in connection with a drug offense. The first such offense triggers
a five-year sentence, each additional instance triggers a 25-year
sentence, and the sentences must be served consecutively. Pretty
much any gun-owning drug offender could be charged under this
provision, but that is much more likely to happen if he insists on
a trial (as
Weldon Angelos
 did). When you recognize the terrifying
implications of such laws, it is easier to understand why 97
percent of federal criminal cases end
in guilty pleas
.

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Former Czech President Blasts “The West’s Lies About Russia Are Monstrous”

Authored by Neil Clark, originally posted at The Spectator,

Václav Klaus has made a habit of saying things others shy away from saying, but it doesn’t seem to have done him much harm in the popularity stakes. Quite the opposite: the 73-year-old ardently Eurosceptic free-marketeer has legitimate claims to be regarded as the most successful ‘true blue’ conservative politician in Europe over the past 25 years. He was, after all, prime minister of the Czech Republic from 1992 to 1998 and then his country’s president for a further ten years, from 2003 to 2013.

So when we meet after a typically hearty Serbian lunch — at the International Science and Public Conference in Belgrade — I am keen to ask if he has any advice for David Cameron and the British Conservative party.

‘I was invited to a conference last year in Windsor which was called the Conservative Renewal Conference,’ he says. ‘I made a speech in which I asked the question: “Do you really need a renewal — or don’t you think it would be sufficient to have a return?” My speech stressed the need to return to standard conservative ideas and approaches. I am afraid the current leadership of the Conservative party are not exactly doing that.’

Klaus’s message clearly resonates more with activists than with the serial ‘modernisers’ at the top of the party. ‘After I had finished my speech, two or three older ladies came up to me and said, “It was like Maggie’s speech!” So I find the Conservative party now rather confused in its ideas. The party is playing with the green ideas in a way I can’t accept.’

Klaus is not too keen — to say the least — about another element of the ‘modernising’ agenda. ‘The same-sex marriages and all that stuff about family, to put it broadly, is for me another tragic misunderstanding by the current leaders of the party and I am very sorry about that.’

We move on, inevitably, to Europe. What effect does Klaus think a British referendum on EU membership — and the prospect of a UK withdrawal — might have for the Continent? ‘It would send a strong signal. I was very angry, even in the communist era, looking at Britain from the outside, from behind the Iron Curtain, that Britain decided to leave EFTA to join the EEC in the early 1970s.’

It was a Conservative prime minister, Edward Heath, who took that momentous step. What, I wonder, does Klaus think of the present Conservative leader’s line on Europe? ‘I have met Mr Cameron several times and I am not so sure about his credentials on the EU. I understand he must somehow reflect the division in the whole country and in his party, but nevertheless I don’t think that in a secret ballot in a referendum that he would vote yes [for Britain to remain in the EU] — but this is only my guesstimate.’

Listen to Klaus in full flow on the absurdities of the EU and it’s hard to think why any sane individual — on left or right — would want their country to stay in it. ‘A few days ago I studied the names of the EU commissioners under Mr Juncker, and their portfolios. We in my country say that 16 is already too high for having meaningful portfolios. But the EU now has 28, more than in any country in our part of the world. If you look at the names of those portfolios, I really don’t believe my eyes. The former Estonian prime minister is a commissioner for digital markets. As an economist I really don’t know what the term “digital markets” means. Plus there is another, a German politician, Günther Oettinger, who is the commissioner for “digital economy and society”. We would laugh in the communist era to have such names for the members of our cabinet. I can’t imagine what these commissioners are doing.’

I put it to Klaus that in the bloated and bureaucratic EU economic model, we have the worst of all worlds — one which pleases neither genuine socialists, nor Thatcherite free-marketers, and he readily agrees. ‘What we have in Europe now is not the German Soziale Marktwirtschaft — the social market economy — but the German model deteriorated by another adjective, “ecological”.’

‘I started my political career after the fall of communism with a well-known slogan: “I want to introduce markets without adjectives.” There was a big fight in the country about this phrase. They said, “Klaus wants to introduce markets without social policy.” “No,” I said. “There can be a social policy, but the slogan means a market economy with an additional social policy and not a social market.”The sequence of the words is all important. At present we are going deeper and deeper and deeper into the ecological and social market economy.’

Whatever we decide to call the current system, he adds, it clearly isn’t working for Europe. ‘I am really shocked to see leading EU and European politicians pretending that everything is OK, which is ridiculous and funny,’ Klaus says. ‘I recently read an article by a well-known German economist, Professor Sinn, who has studied the situation in Italy. He presented statistical data which showed that GDP in Italy has declined by 9 per cent since 2000. It’s unimaginable! I don’t think communist Czechoslovakia would have survived such a long-term decline. At the same time, industrial output declined in the same period by 25 per cent! One quarter of the economy simply disappeared.’

Klaus believes the EU is beyond reform and has called for it to be replaced with an ‘Organisation of European States’ — a simple free trade association which would not pursue political integration. He recalls his own experience at the forefront of Czechoslovakia’s Velvet Revolution in 1989. ‘When we started to change my country we quite deliberately did not use the term “reform” — we used the word “transformation”, because we wanted a systemic change. Such a systemic change is needed in Europe today.’

It’s not just on the economy that Europe has got it wrong, says Klaus. He doesn’t agree with the western elite’s current hostility towards Russia, which he believes is based on a false and outdated view of the country. ‘I remember one person in our country who at one moment was minister of foreign affairs, telling me that he hated communism so much that he was not even able to read Dostoevsky. I have remembered that statement for decades and I am afraid that the current propaganda against Russia is based on a similar argument and way of thinking. I spent most of my life in a communist Czechoslovakia under Soviet domination. But I differentiate between the Soviet Union and Russia. Those who are not able to understand the difference are simply not looking with open eyes. I always argue with my American and British friends that although the political system in Russia is different from the system in our countries and we wouldn’t be happy to live in such a system, to compare the current Russia with Leonid Brezhnev’s Soviet Union is stupid.’

He says, with finality: ‘The US/EU propaganda against Russia is really ridiculous and I can’t accept it.’

Klaus wants to transfer other democratic decision-making powers back to the nation states. ‘I’m not just criticising the EU arrangements — at the same time I’m very critical of global governance and the shift to transnationalism. A week ago I was in Hong Kong and I criticised the naive opening up of countries without keeping or maintaining the anchoring of the nation state. Doing this leads either to anarchy, or to global governance. My vision for Europe is a Europe of sovereign nation states, definitely. But we have already gone well beyond simply economic integration. The EU is a post-democratic and post-political system.’

Klaus has spent his political career standing up for sovereignty and rejecting the dominant orthodoxies of the day. Unlike other leaders in the former Soviet bloc countries, he did not feel inhibited about criticising western policies when the Berlin Wall came down. He was one of the few to oppose the Clinton/Blair ‘humanitarian’ bombardment of Yugoslavia in 1999 (he was also strongly critical of the Iraq war).

Yet he feels the freedom to hold — and express — ‘unfashionable’ views in the West is now under increasing threat.

‘If you ask me whether I think liberty is under huge attack in Europe now, I would say yes. I feel repressed by not being allowed to express my views. I have permanent troubles with this. Suddenly I have discovered, for the first time in 20 years, having been invited to be a keynote speaker at a conference, that the organisers find out I have reservations about the EU, about same-sex marriages, about the Ukraine crisis, and they say, “We are very sorry, we have already found a different keynote speaker, thank you very much.” This is something I had experienced in the communist era but not in so-called free Europe. Only a very narrow range of opinions is now considered politically correct.’

It’s to fight this worrying trend that Klaus has decided to launch a new project. ‘I am planning, if we can get the money and people together, to start a new quarterly journal in 2015 called Europe and Liberty.’

It’s hard not to wish him well. In the not too distant past, Europe did have leaders who had clear and distinct visions: on the left, the likes of Sweden’s Olof Palme and Austria’s Bruno Kreisky; on the right, de Gaulle and Margaret Thatcher. You could agree or disagree but you could never say you didn’t know what they believed in, or that the views they held were not sincere. But they’ve been replaced by a generation of bland, uninspiring, consistently ‘on-message’ politicians.

Václav Klaus is different, a throwback to the days when our leaders did stand for something and weren’t afraid to speak their minds. Let’s hope he does not turn out to be Europe’s last conviction politician.




via Zero Hedge http://ift.tt/YPgMp6 Tyler Durden

Former Czech President Blasts "The West's Lies About Russia Are Monstrous"

Authored by Neil Clark, originally posted at The Spectator,

Václav Klaus has made a habit of saying things others shy away from saying, but it doesn’t seem to have done him much harm in the popularity stakes. Quite the opposite: the 73-year-old ardently Eurosceptic free-marketeer has legitimate claims to be regarded as the most successful ‘true blue’ conservative politician in Europe over the past 25 years. He was, after all, prime minister of the Czech Republic from 1992 to 1998 and then his country’s president for a further ten years, from 2003 to 2013.

So when we meet after a typically hearty Serbian lunch — at the International Science and Public Conference in Belgrade — I am keen to ask if he has any advice for David Cameron and the British Conservative party.

‘I was invited to a conference last year in Windsor which was called the Conservative Renewal Conference,’ he says. ‘I made a speech in which I asked the question: “Do you really need a renewal — or don’t you think it would be sufficient to have a return?” My speech stressed the need to return to standard conservative ideas and approaches. I am afraid the current leadership of the Conservative party are not exactly doing that.’

Klaus’s message clearly resonates more with activists than with the serial ‘modernisers’ at the top of the party. ‘After I had finished my speech, two or three older ladies came up to me and said, “It was like Maggie’s speech!” So I find the Conservative party now rather confused in its ideas. The party is playing with the green ideas in a way I can’t accept.’

Klaus is not too keen — to say the least — about another element of the ‘modernising’ agenda. ‘The same-sex marriages and all that stuff about family, to put it broadly, is for me another tragic misunderstanding by the current leaders of the party and I am very sorry about that.’

We move on, inevitably, to Europe. What effect does Klaus think a British referendum on EU membership — and the prospect of a UK withdrawal — might have for the Continent? ‘It would send a strong signal. I was very angry, even in the communist era, looking at Britain from the outside, from behind the Iron Curtain, that Britain decided to leave EFTA to join the EEC in the early 1970s.’

It was a Conservative prime minister, Edward Heath, who took that momentous step. What, I wonder, does Klaus think of the present Conservative leader’s line on Europe? ‘I have met Mr Cameron several times and I am not so sure about his credentials on the EU. I understand he must somehow reflect the division in the whole country and in his party, but nevertheless I don’t think that in a secret ballot in a referendum that he would vote yes [for Britain to remain in the EU] — but this is only my guesstimate.’

Listen to Klaus in full flow on the absurdities of the EU and it’s hard to think why any sane individual — on left or right — would want their country to stay in it. ‘A few days ago I studied the names of the EU commissioners under Mr Juncker, and their portfolios. We in my country say that 16 is already too high for having meaningful portfolios. But the EU now has 28, more than in any country in our part of the world. If you look at the names of those portfolios, I really don’t believe my eyes. The former Estonian prime minister is a commissioner for digital markets. As an economist I really don’t know what the term “digital markets” means. Plus there is another, a German politician, Günther Oettinger, who is the commissioner for “digital economy and society”. We would laugh in the communist era to have such names for the members of our cabinet. I can’t imagine what these commissioners are doing.’

I put it to Klaus that in the bloated and bureaucratic EU economic model, we have the worst of all worlds — one which pleases neither genuine socialists, nor Thatcherite free-marketers, and he readily agrees. ‘What we have in Europe now is not the German Soziale Marktwirtschaft — the social market economy — but the German model deteriorated by another adjective, “ecological”.’

‘I started my political career after the fall of communism with a well-known slogan: “I want to introduce markets without adjectives.” There was a big fight in the country about this phrase. They said, “Klaus wants to introduce markets without social policy.” “No,” I said. “There can be a social policy, but the slogan means a market economy with an additional social policy and not a social market.”The sequence of the words is all important. At present we are going deeper and deeper and deeper into the ecological and social market economy.’

Whatever we decide to call the current system, he adds, it clearly isn’t working for Europe. ‘I am really shocked to see leading EU and European politicians pretending that everything is OK, which is ridiculous and funny,’ Klaus says. ‘I recently read an article by a well-known German economist, Professor Sinn, who has studied the situation in Italy. He presented statistical data which showed that GDP in Italy has declined by 9 per cent since 2000. It’s unimaginable! I don’t think communist Czechoslovakia would have survived such a long-term decline. At the same time, industrial output declined in the same period by 25 per cent! One quarter of the economy simply disappeared.’

Klaus believes the EU is beyond reform and has called for it to be replaced with an ‘Organisation of European States’ — a simple free trade association which would not pursue political integration. He recalls his own experience at the forefront of Czechoslovakia’s Velvet Revolution in 1989. ‘When we started to change my country we quite deliberately did not use the term “reform” — we used the word “transformation”, because we wanted a systemic change. Such a systemic change is needed in Europe today.’

It’s not just on the economy that Europe has got it wrong, says Klaus. He doesn’t agree with the western elite’s current hostility towards Russia, which he believes is based on a false and outdated view of the country. ‘I remember one person in our country who at one moment was minister of foreign affairs, telling me that he hated communism so much that he was not even able to read Dostoevsky. I have remembered that statement for decades and I am afraid that the current propaganda against Russia is based on a similar argument and way of thinking. I spent most of my life in a communist Czechoslovakia under Soviet domination. But I differentiate between the Soviet Union and Russia. Those who are not able to understand the difference are simply not looking with open eyes. I always argue with my American and British friends that although the political system in Russia is different from the system in our countries and we wouldn’t be happy to live in such a system, to compare the current Russia with Leonid Brezhnev’s Soviet Union is stupid.’

He says, with finality: ‘The US/EU propaganda against Russia is really ridiculous and I can’t accept it.’

Klaus wants to transfer other democratic decision-making powers back to the nation states. ‘I’m not just criticising the EU arrangements — at the same time I’m very critical of global governance and the shift to transnationalism. A week ago I was in Hong Kong and I criticised the naive opening up of countries without keeping or maintaining the anchoring of the nation state. Doing this leads either to anarchy, or to global governance
. My vision for Europe is a Europe of sovereign nation states, definitely. But we have already gone well beyond simply economic integration. The EU is a post-democratic and post-political system.’

Klaus has spent his political career standing up for sovereignty and rejecting the dominant orthodoxies of the day. Unlike other leaders in the former Soviet bloc countries, he did not feel inhibited about criticising western policies when the Berlin Wall came down. He was one of the few to oppose the Clinton/Blair ‘humanitarian’ bombardment of Yugoslavia in 1999 (he was also strongly critical of the Iraq war).

Yet he feels the freedom to hold — and express — ‘unfashionable’ views in the West is now under increasing threat.

‘If you ask me whether I think liberty is under huge attack in Europe now, I would say yes. I feel repressed by not being allowed to express my views. I have permanent troubles with this. Suddenly I have discovered, for the first time in 20 years, having been invited to be a keynote speaker at a conference, that the organisers find out I have reservations about the EU, about same-sex marriages, about the Ukraine crisis, and they say, “We are very sorry, we have already found a different keynote speaker, thank you very much.” This is something I had experienced in the communist era but not in so-called free Europe. Only a very narrow range of opinions is now considered politically correct.’

It’s to fight this worrying trend that Klaus has decided to launch a new project. ‘I am planning, if we can get the money and people together, to start a new quarterly journal in 2015 called Europe and Liberty.’

It’s hard not to wish him well. In the not too distant past, Europe did have leaders who had clear and distinct visions: on the left, the likes of Sweden’s Olof Palme and Austria’s Bruno Kreisky; on the right, de Gaulle and Margaret Thatcher. You could agree or disagree but you could never say you didn’t know what they believed in, or that the views they held were not sincere. But they’ve been replaced by a generation of bland, uninspiring, consistently ‘on-message’ politicians.

Václav Klaus is different, a throwback to the days when our leaders did stand for something and weren’t afraid to speak their minds. Let’s hope he does not turn out to be Europe’s last conviction politician.




via Zero Hedge http://ift.tt/YPgMp6 Tyler Durden

Tonight on The Independents: Stossel on the ‘Mean’ World, Montel Williams on the Marine in Mexico, Plus S.S. Follies, ISIS Folly, the Hong Kong Challenge, the Worst 2016 Presidents, and Two Minutes Hate!

Ever feel like your country has been at war forever, all over
the world, with no particular overarching intelligence behind it
all? On
last night’s episode
of The Independents, Kmele Foster
reminded us that we’re still keeping 10,000 U.S. troops in
Afghanistan, for whatever reason:

Tonight’s installment (Fox Business Network, 9 p.m. ET, 6 p.m.
PT, with re-airs three hours later) continues in the discussion
that Americans have already stopped having, namely whether the our
new war against the Islamic State is wise, comprehensible, or
constitutional. Helping in those deliberations are Party Panelists
Dagen McDowell (Fox
News correspondent) and Whitney Neal (Bill of Rights
Institute person), who will also weigh in on Secret Service
Director Julia Pierson’s
resignation
, and the important question of who would be the
worst possible president in 2016.Montel Williams today. ||| Tom Williams/CQ Roll Call

Radio titan and veterans’ rights champion

Montel Williams
comes on to talk about his impassioned
congressional testimony today
on behalf of the jailed-in-Mexico
Marine vet Sgt. Andrew Tahmooressi. Gordon Chang, author of

The Coming Collapse of China
, provides some fascinating
context for what the Hong Kong protests mean for the world’s most
populous commie state. Eponymous Fox Business
Network
host, Reason.com
columnist, and American hero John Stossel will preview his
Thursday special on
scaremongering
and our allegedly “meaner” world. Finally, Fox
Human Resources tattletale
Bernie Maxsmith
will read a bunch of mean things that you, dear
Reason reader, wrote about our humble television show.

Follow The Independents on Facebook at http://ift.tt/QYHXdB,
follow on Twitter @ independentsFBN, and
click on this page
for more video of past segments.

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How New Jersey’s Creeping Wage Hikes Are Crippling Mom-And-Pop Restaurants

Another day, another unintended consequence of the socialist state’s eagerness to “make things better” for everyone, blowing up in its face.

For today’s anecdote we go to New Jersey where legislation introduced by Assemblywoman Shavonda Sumter, D-Paterson which passed in the Assembly’s Labor Committee on a party-line vote last March, calls for an increase in the minimum wage for tipped workers. It would increase the federal minimum of $2.13 per hour to $3.39 by the end of this year and $5.93 by 2016.

Assemblywoman Shavonda Sumter wants an increase in the
minimum wage for tipped workers from the federal minimum of
$2.13 per hour to $3.39 by the end of this year. (Photo:
New Jersey Assembly Majority Office)

So far so good: after all, in isolation, it’s a tiny amount, and will hardly impact the employer, while it should boost the bottom line of minimum wage employees, leading to a win-win for everyone right?

Well, no, because nothing is ever “in isolation.” However, to grasp the practical implications of how minimum wage hikes flow through the system one needs to actually be a small business owner – the person paying the wage – not a politician, who may have the best intentions in mind (if only for one’s own bank account and delusions of grandeur) yet have zero practical understanding that such centrally-planned meddling in the free market always does more bad than good.

Case in point, the following story of Rob Pluta who owns and operates Leonardo’s II, an Italian eatery in Lawrenceville, New Jersey as recounted by The Daily Signal

Pluta wasn’t wild about the constitutional amendment New Jersey voters approved last year that raised the state’s overall minimum wage from $7.25 to $8.25 and linked annual increases to the Consumer Price Index. But he’s even more concerned about legislation introduced by Assemblywoman Shavonda Sumter, D-Paterson. Sumter’s bill, A857, which passed in the Assembly’s Labor Committee on a party-line vote last March, calls for an increase in the minimum wage for tipped workers. It would increase the federal minimum of $2.13 per hour to $3.39 by the end of this year and $5.93 by 2016.

 

For restaurant owners, that’s even worse than it sounds, Pluta says. Under current law, if employees don’t make $8.25 counting tips and base, the employer makes up the rest. Pluta says he’s never had to pay—his employees routinely make $15 to $20 per hour or more.

 

If this legislation passes—a companion bill in the state Senate has not moved, and it’s unclear if Republican Gov. Chris Christie would sign it if it did reach his desk—Pluta would have to pay out up to $24,000 more per year, plus payroll taxes. His employees, however, would see little difference in their paychecks.

In short, “This is not a logical proposal,” he says. “It’s an additional cost and an additional burden.” However, there is no populism in being logical: one wins relection by pandering to the lowest common denominator even if it means a wholesale increase in food prices which has a ripple effect on demand, and ultimately, may likely lead to the evisceration of the mom and pop restaurant industry of New Jersey.

Pluta’s customers understand what this will mean. Kevin and Eve Connelly are regulars. They like to order a shrimp platter with cocktail sauce. It’s not on the menu and is supplied only by request.

 

“If the restaurant suddenly has to pay for something it didn’t have to pay before, one way to cover that cost is to raise menu prices,” Kevin Connelly says. “So we are probably going to have to pay more for that shrimp.”

 

And that, says Eve Connelly, will have a ripple effect. Higher prices mean people go out less often, which means less in tips for the wait staff at Leonardo’s II. “I wonder if this is something the politicians understand,” she says.

No, they don’t. But they are not paid to understand. If they were, they would grasp that corporations will pass on costs first, middle and last, to the point where the business crosses its viability point and competitors come and, pardon the pun, eat its lunch. 

“What I keep trying to drive home is that we are forced into paying costs we never had to cover before in addition to the minimum wage increase that is already in motion,” he says. “This will cripple the restaurant industry. This is especially true for start-ups and other borderline businesses operating at the margins.”

Ironically, in pursuing this kind of wealth redistribution, politicians are crushing the small and medium businesses, those which traditionally are the biggest sources of new jobs, and handing over their business to established, franchised mega corporations, which have the economy of scale to offset such cost hikes.

T.C. Nelson, who owns the Trenton Social on South Broad Street in Trenton, told The Daily Signal the winners will be chain restaurants, which “have the economy of scale to absorb these costs.” The losers, Nelson says, will be neighborhood bars that can’t survive the extra expense.

 

“What this proposal does is take the art of service and hospitality out of the hands of the small business,” he says. “Right now, it’s hard to know how much this will cost. But you can be sure some of the smaller, local neighborhood places will go under.”

 

Pluta is not optimistic.

 

“This is an easy issue to demagogue,” he says. “If this bill does go through it will mean higher consumer costs and less business in restaurants, which works to the disadvantage of the very workers the politicians say they are trying to help.”

Well yes, but it will also help the major restaurant chains, most of which are subsidiaries of publicly owned holding companies (which most likely have been buying back their shares hand over fist courtesy of Bernanke’s policies and rewarding management for doing… nothing at all) and which have also spent countless dollars lobbying the Shavonda Sumters of the world to do their bidding, while masking this corporatist hypocrisy with the pleasant face of “we are just trying to make lives better for the minimum wage earners” populism.

That, like the stock market, only works until it doesn’t, until all small businesses are ultimately crushed or simply decide to go away, and there is no marginal creator of any jobs left, period. Which, needless to say, leads to a far worse outcome for everyone.




via Zero Hedge http://ift.tt/1qXnsYn Tyler Durden

How New Jersey's Creeping Wage Hikes Are Crippling Mom-And-Pop Restaurants

Another day, another unintended consequence of the socialist state’s eagerness to “make things better” for everyone, blowing up in its face.

For today’s anecdote we go to New Jersey where legislation introduced by Assemblywoman Shavonda Sumter, D-Paterson which passed in the Assembly’s Labor Committee on a party-line vote last March, calls for an increase in the minimum wage for tipped workers. It would increase the federal minimum of $2.13 per hour to $3.39 by the end of this year and $5.93 by 2016.

Assemblywoman Shavonda Sumter wants an increase in the
minimum wage for tipped workers from the federal minimum of
$2.13 per hour to $3.39 by the end of this year. (Photo:
New Jersey Assembly Majority Office)

So far so good: after all, in isolation, it’s a tiny amount, and will hardly impact the employer, while it should boost the bottom line of minimum wage employees, leading to a win-win for everyone right?

Well, no, because nothing is ever “in isolation.” However, to grasp the practical implications of how minimum wage hikes flow through the system one needs to actually be a small business owner – the person paying the wage – not a politician, who may have the best intentions in mind (if only for one’s own bank account and delusions of grandeur) yet have zero practical understanding that such centrally-planned meddling in the free market always does more bad than good.

Case in point, the following story of Rob Pluta who owns and operates Leonardo’s II, an Italian eatery in Lawrenceville, New Jersey as recounted by The Daily Signal

Pluta wasn’t wild about the constitutional amendment New Jersey voters approved last year that raised the state’s overall minimum wage from $7.25 to $8.25 and linked annual increases to the Consumer Price Index. But he’s even more concerned about legislation introduced by Assemblywoman Shavonda Sumter, D-Paterson. Sumter’s bill, A857, which passed in the Assembly’s Labor Committee on a party-line vote last March, calls for an increase in the minimum wage for tipped workers. It would increase the federal minimum of $2.13 per hour to $3.39 by the end of this year and $5.93 by 2016.

 

For restaurant owners, that’s even worse than it sounds, Pluta says. Under current law, if employees don’t make $8.25 counting tips and base, the employer makes up the rest. Pluta says he’s never had to pay—his employees routinely make $15 to $20 per hour or more.

 

If this legislation passes—a companion bill in the state Senate has not moved, and it’s unclear if Republican Gov. Chris Christie would sign it if it did reach his desk—Pluta would have to pay out up to $24,000 more per year, plus payroll taxes. His employees, however, would see little difference in their paychecks.

In short, “This is not a logical proposal,” he says. “It’s an additional cost and an additional burden.” However, there is no populism in being logical: one wins relection by pandering to the lowest common denominator even if it means a wholesale increase in food prices which has a ripple effect on demand, and ultimately, may likely lead to the evisceration of the mom and pop restaurant industry of New Jersey.

Pluta’s customers understand what this will mean. Kevin and Eve Connelly are regulars. They like to order a shrimp platter with cocktail sauce. It’s not on the menu and is supplied only by request.

 

“If the restaurant suddenly has to pay for something it didn’t have to pay before, one way to cover that cost is to raise menu prices,” Kevin Connelly says. “So we are probably going to have to pay more for that shrimp.”

 

And that, says Eve Connelly, will have a ripple effect. Higher prices mean people go out less often, which means less in tips for the wait staff at Leonardo’s II. “I wonder if this is something the politicians understand,” she says.

No, they don’t. But they are not paid to understand. If they were, they would grasp that corporations will pass on costs first, middle and last, to the point where the business crosses its viability point and competitors come and, pardon the pun, eat its lunch. 

“What I keep trying to drive home is that we are forced into paying costs we never had to cover before in addition to the minimum wage increase that is already in motion,” he says. “This will cripple the restaurant industry. This is especially true for start-ups and other borderline businesses operating at the margins.”

Ironically, in pursuing this kind of wealth redistribution, politicians are crushing the small and medium businesses, those which traditionally are the biggest sources of new jobs, and handing over their business to established, franchised mega corporations, which have the economy of scale to offset such cost hikes.

T.C. Nelson, who owns the Trenton Social on South Broad Street in Trenton, told The Daily Signal the winners will be chain restaurants, which “have the economy of scale to absorb these costs.” The losers, Nelson says, will be neighborhood bars that can’t survive the extra expense.

 

“What this proposal does is take the art of service and hospitality out of the hands of the small business,” he says. “Right now, it’s hard to know how much this will cost. But you can be sure some of the smaller, local neighborhood places will go under.”

 

Pluta is not optimistic.

 

“This is an easy issue to demagogue,” he says. “If this bill does go through it will mean higher consumer costs and less business in restaurants, which works to the disadvantage of the very workers the politicians say they are trying to help.”

Well yes, but it will also help the major restaurant chains, most of which are subsidiaries of publicly owned holding companies (which most likely have been buying back their shares hand over fist courtesy of Bernanke’s policies and rewarding management for doing… nothing at all) and which have also spent countless dollars lobbying the Shavonda Sumters of the world to do their bidding, while masking this corporatist hypocrisy with the pleasant face of “we are just trying to make lives better for the minimum wage earners” populism.

That, like the stock market, only works until it doesn’t, until all small businesses are ultimately crushed or simply decide to go away, and there is no marginal creator of any jobs left, period. Which, needless to say, leads to a far worse outcome for everyone.




via Zero Hedge http://ift.tt/1qXnsYn Tyler Durden

This is huge: Chinese renminbi becomes directly tradable with the euro

shutterstock 154194383 This is huge: Chinese renminbi becomes directly tradable with the euro

October 1, 2014
Santiago, Chile

The Chinese central bank, People’s Bank of China, issued a press release announcing the authorization of direct trading between the renminbi and the euro on the inter-bank foreign exchange market.

This is huge. The euro is the second most traded currency in the world, after the US dollar. The European Union is already China’s biggest trading partner and this is a major step in further increasing trade and investment ties with the EU as there is now a direct exchange rate between the two currencies, without the need to use the US dollar as the conduit.

The renminbi is quickly marching down the path of internationalization as the Chinese currency is now directly exchangeable with the US dollar, Australian dollar, New Zealand dollar, Japanese yen, British pound, Russian ruble, and Malaysian ringgit.

The use of renminbi in international trade settlement nearly tripled in value worldwide over the past two years according the The Society for Worldwide International Financial Telecommunications (SWIFT), and over one third of financial institutions around the world already use renminbi for payments to China and Hong Kong.

This is  another sign of how the system is changing. And it’s a major one. As the following chart from Deutsche Bank clearly shows, the last two centuries or so of Western domination in the global economy is nothing but an anomaly on a long timeline of history.

The rise and fall of empires This is huge: Chinese renminbi becomes directly tradable with the euro

China and the Indian subcontinent have always been the two major population centers of the world, as well as global economic powerhouses. Spectacular Chinese decline over the course of the 19th century was a result of an archaic state of the Chinese society, as well as its unwillingness to open up and adjust to the world that has clearly changed with the advent of the industrial revolution and the first major wave of globalization.

This resulted in the British Empire being propelled to the top spot as the world’s superpower. World Wars changed that and the United States became the undisputed top dog in the 20th century.

Now, this historical anomaly is being rectified and China is again reclaiming its spot in the world, with the Chinese currency following suit.

For anyone following this trend closely, this is a very exciting time to be alive. Major changes like this happen rarely; perhaps every hundred years or so. And these changes offer incredible opportunities for those attuned to them, and a tremendous amount of turmoil for those ignoring the trend.

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Addiction: Easier to Beat Than Its Reputation

Great drug reporter and commentator (and Reason
contributor
) Maia Szalavitz speaks some obvious but too
often ignored truths about “addiction,”
over at

Alternet
:

According to the American Society of Addiction
Medicine, addiction is
“a primary, chronic disease of brain reward, motivation, memory and
related circuitry.” However, that’s not what the epidemiology of
the disorder suggests. By age 35, half of all
people who qualified for active alcoholism or addiction diagnoses
during their teens and 20s no longer
do
, according to a study of over 42,000 Americans in a sample
designed to represent the adult population.

The average cocaine addiction lasts four years, the average
marijuana addiction lasts six years, and the average alcohol
addiction is resolved within
15 years. Heroin addictions tend to last as long as alcoholism, but
prescription opioid problems, on average, last five years.
In these large samples, which are drawn from the general
population, only a
quarter
 of people who recover have ever sought assistance
in doing so (including via 12-step
programs
). This actually makes addictions the psychiatric
disorder with the highest
odds
 of recovery.

The hype machine of addiction, especially from industries
dedicated to trying to manage it, helps hide this fact.

Moreover, if addiction were truly a progressive disease,
the data should show that the odds of quitting get worse over time.
In fact, they remain the same on an annual basis, which means that
as people get older, a higher and higher percentage wind up in
recovery. If your addiction really is “doing push-ups” while you
sit in AA meetings, it should get harder, not easier, to quit over
time….

So why do so many people still see addiction as hopeless? One
reason is a phenomenon known as “the clinician’s error,” which
could also be known as the “journalist’s error” because it is so
frequently replicated in reporting on drugs. That is, journalists
and rehabs tend to see the extremes: Given the expensive and often
harsh nature of treatment, if you can quit on your own you probably
will. And it will be hard for journalists or treatment providers to
find you.

That’s why it always helps, when people are hyping legal
“solutions” to the allegedly insuperable problem of “drug
addiction” that “recovery” is likely even without legal or
psychiatric interventions (often the same).

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Cops Distribute ‘Internet Safety Software’ That’s Actually Unsafe Spyware

An estimated 245 law
enforcement agencies in 35 states have for years been distributing
software called ComputerCOP as a way for parents to ensure their
children have a safe web-browsing experience. The problem is,
ComputerCOP is just glorified spyware that lacks basic safety
features.

The Electronic Frontier Foundation (EFF) today
published
its findings about this “internet safety software,”
and it’s not pretty:

As security software goes, we observed a product with a
keystroke-capturing function, also called a “keylogger,” that could
place a family’s personal information at extreme risk by
transmitting what a user types over the Internet to third-party
servers without encryption. That means many versions
of ComputerCOP leave children (and their parents, guests, friends,
and anyone using the affected computer) exposed to the same
predators, identity thieves, and bullies that police claim the
software protects against.

The EFF notes that there’s a gaping window of opportunity for
abuse of the keylogger function. One could just as easily use it to
steal information from a coworker or roommate. ComputerCOP would
actually be a cyberstalker’s wet dream, as it didn’t elicit an
alert from any major malware scanning tools.

And, the fact that it stores sensitive information unencrypted
means that “when a child with ComputerCOP installed on their laptop
connects to public Wi-Fi, any sexual predator, identity thief, or
bully with freely available packet-sniffing software can grab those
key logs right out of the air.”

When it isn’t outright endangering people, ComputerCOP is just
inept. Regarding its search function, which is supposed to find
drug, sex, and crime-related files and images:

On some computer systems, it produces a giant haystack of false
positives, including flagging items as innocuous as raw computer
code. On other systems, it will only produce a handful of results
while typing keywords such as “drugs” into Finder or File Explorer
will turn up a far larger number of hits.  While the marketing
materials claim that this software will allow you to view what web
pages your child visits, that’s only true if the child is using
Internet Explorer or Safari. The image search will potentially turn
up tens of thousands of hits because it can’t distinguish between
images children have downloaded and the huge collection of icons
and images that are typically part of the software on your
computer.

Read the rest of the EFF’s in-depth report
here
.

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