Showing posts with label Economics and Finance. Show all posts
Showing posts with label Economics and Finance. Show all posts

April 13, 2014

Is Ukraine becoming for the West what Syria has been for Russia?

    Sunday, April 13, 2014   No comments





Riding the wave of protests known as the Arab Spring, many Syrians rallied to demand more political and civil rights. Without the hesitancy that characterized their initial reaction to the protest movements in Tunisia and Egypt, Western administrations and some of the Persian Gulf regimes immediately threw their support behind the protesters. Assad’s regime belonged to the so-called non-moderate Arab governments and the protesters offered the West and its allies an opportunity to overthrow it. They formed the “Friends of Syria” group, now consisting of only eleven nations, to provide the opposition with all needed support, including deadly arms, to achieve that goal. After three years of brutal war, Syria’s economy and society are severely damaged and its allies, mainly Russia, China, and Iran have invested a huge political, economic, and military capital to help the Syrian government survive. The Friends of Syria claimed that Assad became illegitimate because he killed Syrians. Assad claimed that he was fighting armed terrorists and thugs.

Now fast-forward to 2013. 

May 9, 2013

To compete globally, BRICS nations need reputation, not imitation

    Thursday, May 09, 2013   No comments


by Ahmed E. Souaiaia* 

BRICS nations
The economic, political, and social rise of the Western block of nations was founded on the single most enduring currency: reputation. Reputation, the source of credibility and trust, is the real asset that allows the U.S. to project its stature around the world. BRICS nations cannot rise to prominence by mimicking developed countries. They must build their reputation first. Wealth is only a byproduct of this more precious commodity, and countries who have it can squander it just as emerging economies can acquire it. For either of those results to happen in any country, circumstantial conditions and principled actions must converge.

March 27, 2012

Burdening the victims: impact of US sanctions on human rights at home and abroad

    Tuesday, March 27, 2012   No comments
The case for peoples' diplomacy


On the occasion of the start of the Persian New Year (Nowrūz), President Obama delivered a recorded video message to the Iranian people. In it, he highlighted the many ways the Iranian government denies its citizens access to information, including censoring media outlets and filtering the Internet. He declared that his administration is committed to communicating with the Iranian people despite the objections of their government “by making it easier for Iranian citizens to get the software and services they need to connect with the rest of the world through modern communications methods.”

As a candidate, Obama insisted—despite harsh criticism from other presidential candidates— that he would reach out to the Iranian leaders and talk to them in order to end the 30 year cold war. During his first year in office, President Obama offered to start a conversation with the Iranian leadership based on mutual respect. He then sent a letter, whose content was not disclosed, to the leader of the revolution, Ayatollah Seyed Ali Hosseini Khamenei. As his first term in office ends, having failed to start any significant dialogue with the Iranian regime, the President outlined a new strategy designed to bypass the Iranian government and religious leaders and talk to the Iranian people directly. Will this strategy succeed? Unlikely; and here are several compelling reasons.

January 21, 2012

Class warfare or economic justice?

    Saturday, January 21, 2012   No comments
When Romney resisted releasing his tax records unless he becomes the GOP nominee, the discussion that was started by the Occupy movement found new life. The fundamental issue is fairness in the U.S. economic system—not class warfare, as some would like to characterize it. Many in the Occupy movement believe that corporate influence in the political process unfairly disadvantages working people and rewards greed. One of the areas unfairly influenced by wealthy corporations and persons is the tax code. Many Occupiers want that system reformed.
The 1% have the means to not only influence the debate, but to buy the political leverage necessary to secure favorable outcomes. The absolute majority of the 99% want a fair system that neutralizes these influences. They don't want giveaways from the 1% and they are not opposed to capitalism and private property ownership.

The NYT reported that Mitt Romney, for instance, “has called for keeping the current low rates for capital gains and eliminating capital gains altogether for taxpayers making less than $200,000.” Joe Scarborough, a conservative commentator and former lawmaker, defended the low 15% percent tax rate paid by Romney and other wealthy individuals by suggesting that the money taxed at the 15% rate is actually taxed twice: first it is taxed as income at a higher rate and then taxed again as investment income. That is a disingenuous and misleading characterization of the facts. Here is why:
Let's say a hardworking Joe makes $100,000 a year. That income will be taxed at a rate closer to 35% than to 15%. After years of hard work, Joe saves $50,000, which he invests. At the end of the year, Joe receives a statement showing that he earned $2500 through capital gains, dividends, interest, etc. Only the $2500 Joe earned on top of his original investment of $50,000 will be taxed at the 15% rate; Joe is not taxed at a 15% rate on $52,500 (his original investment plus his gains). So there is no double taxation.
Now let's look at another scenario. John is a software engineer who has worked for Microsoft since the early 1990's. John's yearly salary is about $67,000. But when John was hired, he took the stock option the company offered its employees, which consisted of 5000 shares priced at $5 a share. After more than five years, John was able to sell these shares for the market value of $300 per share (a gross sale value of $1,500,000). The net income (after deduction for cost and fees) is taxed only once, at the 15% rate. Furthermore, it is only taxed the year it is sold, not every year John saw gains through increase in stock prices.
Let's look at a third example. Brinn is a programming guru. He quit school to start an Internet company. His company was so successful he valued it at $1,000,000 and made it a public company. Before the initial IPO, Brinn decided arbitrarily to fix the value of each share in his company at $1. Now Brinn's company is available for public trade, but not before he reserved 500,001 shares for himself and 200,000 shares for his employees or his favorite charity. Brinn is now the CEO of the new public company, too. He decides that he will receive $1 a year in salary, but will receive additional compensation in the form of stock options. 
Because Brinn's company is awesome, everyone wants in. Joe used some of his saved money to place a bid to buy some shares. Before Joe is able to fulfill his order, the price of a single share in Brinn's company jumps to $50. Suddenly, Joe becomes the proud owner of 100 shares costing him about $5000, which drives Brinn's wealth to over $25,000,000. 
Five years later, Joe sells his 100 shares at $100 per share (earning about $5000 on top of his original investment). Brinn, on the other hand, earns $50 million. He will pay the 15% tax rate on those earnings, because he does not have to claim it as earned salary income on his tax return. That is a best case scenario. Another equally likely scenario is this: after five years, Joe is forced to sell his shares to pay for an unexpected event. Although the price of the stock was up at some point near $100, when Joe needed to the cash however, the stock was $48 per share. Joe lost $200 in this investment. Brinn is still $47 per share ahead.

Capital venture investors use a multitude of methods to avoid paying the higher tax rate that 99% of monthly wage earners must pay. Stock options, property reclassification, tax shelters, and charitable donations are just few ways they control their wealth and avoid paying higher taxes. Business professionals have access to tools and knowledge that allow them to find the loopholes they need to pay minimum taxes.

Moreover, corporations and wealthy individuals "tax" the infrastructure, the natural resources, and environment more than the rest of us. They use heavy trucks on our highways and roads to transport their goods. CEOs travel in private jets that pollute our environment while hundreds of us travel crammed in crowded airplanes, buses, and trains. They use more energy in their huge mansions and air-conditioned offices in skyscrapers, while the 99% share fewer resources and use communal services.

In short, the 99% are not asking to take the 1%’s money, they just want a fair system that offers everyone equal access to resources, to public servants, and to the law. The 99% want true equal opportunity.

December 14, 2011

Libyan and European rulers’ treatment of Blacks and immigrant workers: Apathy in the face of Cruelty

    Wednesday, December 14, 2011   No comments
by Ahmed E. Souaiaia*


Since the start of the Libyan uprising, mainstream news outlets have reported that African and even Eastern European mercenaries were fighting with Qaddafi’s forces. The Libyan rebels, eager to minimize any support for Qaddafi among the Libyan population, have fed western media horror stories of mass murder carried out by Black Africans. Consequently, many immigrant workers were caught between the ire of a regime that did not care much for them and a new wave of prejudice and discrimination fueled by the media and rebel propaganda. The fact that some foreigners fought for the regime does not tell the full story. Most African immigrants were unwilling participants in a war that no one had anticipated.


In order to understand the presence of so many Africans and non-Africans in Libya, one must understand the role played by the former dictator.



October 17, 2011

CHARTS: Here's What The Wall Street Protesters Are So Angry About...

    Monday, October 17, 2011   No comments

by Henry Blodget

The "Occupy Wall Street" protests are gaining momentum, having spread from a small park in New York to marches to other cities across the country.

So far, the protests seem fueled by a collective sense that things in our economy are not fair or right. But the protesters have not done a good job of focusing their complaints—and thus have been skewered as malcontents who don't know what they stand for or want.


(An early list of "grievances" included some legitimate beefs, but was otherwise just a vague attack on "corporations." Given that these are the same corporations that employ more than 100 million Americans and make the products we all use every day, this broadside did not resonate with most Americans).

So, what are the protesters so upset about, really?

Do they have legitimate gripes?

To answer the latter question first, yes, they have very legitimate gripes.

And if America cannot figure out a way to address these gripes, the country will likely become increasingly "de-stabilized," as sociologists might say. And in that scenario, the current protests will likely be only the beginning.


The problem in a nutshell is this: Inequality in this country has hit a level that has been seen only once in the nation's history, and unemployment has reached a level that has been seen only once since the Great Depression. And, at the same time, corporate profits are at a record high.

In other words, in the never-ending tug-of-war between "labor" and "capital," there has rarely—if ever—been a time when "capital" was so clearly winning.

…read Article


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