By all accounts, Australia is experiencing what is one of the greatest credit-fuelled real estate bubbles in modern times. On the back of a collapsing mining sector, we can thank the RBA, APRA, ASIC and the political elite in Canberra for creating a flawed household wealth-creation strategy that shares all the hallmarks of a predictable economic disaster.
In plain English, since the mid-1990s, Australia’s strategy is for home buyers and investors to borrow heavily from lenders and flip houses to the next buyer who has taken out even more debt to speculate.
Today, all this country has to show for it is a $1.9 trillion mountain of household debt that will make the US credit-fuelled housing bubble of the last decade look like a walk in the park when our housing bubble bursts.
The unfortunate victims of today’s “wealth-creation” strategy are young home buyers and middle-income earners who are either completely priced out of the market or leveraged through the roof.
Egypt Says It May Send Troops to Yemen to Fight Houthis →
Egypt said Thursday that it was prepared to send troops into Yemen as part of a Saudi-led campaign to drive back the Iranian-backed Houthi advance, signaling the growing likelihood of a protracted ground war on the tip of the Arabian Peninsula.
A day after Saudi Arabia and a coalition of nine other states began hammering the Houthis with airstrikes and blockading the Yemeni coast, President Abdel Fattah el-Sisi of Egypt said in a statement that the country’s navy and air force had joined the campaign and that its army was ready to send ground troops “if necessary.”
Social Insurance Makes America More Entrepreneurial →
Entrepreneurs are actually more likely than other Americans to receive public benefits, after accounting for income, as Harvard Business School’s Gareth Olds has documented. And in many cases, expanding benefit programs helps spur new business creation...
Obviously only up to a point. And yes, there is always going to be some waste and abuse. But it's about finding that optimal point.
Small businesses may be losing a lifeline →
The Great Recession produced a startling change in the makeup of America's banks. According to a report from the Federal Reserve Bank of Richmond, from 2007 through 2013 the number of new commercial banks fell by 14 percent. Most of the decline came from community banks, the type of institution most of us think of when we hear the term "traditional bank."
And given the how much small businesses rely on community banks for funding, this shrinkage could have an impact on the formation and survival of small business enterprises.
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Why have bank entries tumbled? The report cites two possible explanations: the fall in bank profits during the Great Recession, and regulatory changes from the Dodd-Frank legislation. The drop in bank profits appears to be the biggest factor, but earnings also fell to similar levels during previous recessions, yet bank formation didn't turn down as much. So, changing regulations may be at work as well.
Which one of these factors turns out to be the primary cause has implications for the banking system's structure in the future. If falling profits are to blame, then bank entries ought to recover as the economy rebounds. But if regulations are holding back entries, the difficulties that creates for small business could be more permanent.
The Real Cost of Coal →
CONGRESS long ago established a basic principle governing the extraction of coal from public lands by private companies: American taxpayers should be paid fair value for it. They own the coal, after all.
Lawmakers set a royalty payment of 12.5 percent of the sale price of the coal in 1976. Forty years later, those payments remain stuck there, with actual collections often much less. Studies by the Government Accountability Office, the Interior Department’s inspector general and nonprofit research groups have all concluded that taxpayers are being shortchanged.
This is no small matter. In 2013, approximately 4o percent of all domestic coal came from federal lands. A recent study by the independent nonprofit research group Headwaters Economics estimates that various reforms to the royalty valuation system would have generated $900 million to $5.6 billion more overall between 2008 and 2012.
This failure by the government to collect fair value for taxpayer coal is made more troubling by the climate-change implications of burning this fossil fuel. Taxpayers are already incurring major costs in responding to the effects of global warming. Coastal infrastructure is being battered by sea rise and storm surges; forests are being devastated by climate-aided pest infestations; and studies are suggesting that temperature rises have increased the likelihood of devastating droughts in California.
Moreover, as the Council of Economic Advisers documented in a report last July because of the long-lived nature of greenhouse gases in the atmosphere, these costs will continue to rise.
Exclusive: Amazon makes even temporary warehouse workers sign 18-month non-competes →
The more I read about Amazon's warehouses, the more I think of "indentured servitude." I'm surprised that this is legal.
The work is repetitive and physically demanding and can pay several dollars above minimum wage, yet Amazon is requiring these workers — even seasonal ones — to sign strict and far-reaching noncompete agreements. The Amazon contract, obtained by The Verge, requires employees to promise that they will not work at any company where they “directly or indirectly” support any good or service that competes with those they helped support at Amazon, for a year and a half after their brief stints at Amazon end. Of course, the company’s warehouses are the beating heart of Amazon’s online shopping empire, the extraordinary breadth of which has earned it the title of “the Everything Store,” so Amazon appears to be requiring temp workers to foreswear a sizable portion of the global economy in exchange for a several-months-long hourly warehouse gig.
The company has even required its permanent warehouse workers who get laid off to reaffirm their non-compete contracts as a condition of receiving severance pay...
In College and Hiding From Scary Ideas →
The confusion is telling, though. It shows that while keeping college-level discussions “safe” may feel good to the hypersensitive, it’s bad for them and for everyone else. People ought to go to college to sharpen their wits and broaden their field of vision. Shield them from unfamiliar ideas, and they’ll never learn the discipline of seeing the world as other people see it. They’ll be unprepared for the social and intellectual headwinds that will hit them as soon as they step off the campuses whose climates they have so carefully controlled. What will they do when they hear opinions they’ve learned to shrink from? If they want to change the world, how will they learn to persuade people to join them?
Women’s Integration into Combat Stuck in a Physical Stalemate →
Physical standards are- by far- the greatest sticking point when it comes to debates on women in combat. Opponents of gender integration have long argued that the average physical differences between men and women are proof that women are inferior. They also argue that any adjustments in the current physical standards would be tantamount to ‘softening’ ‘diluting’ or weakening the standards and thereby reducing military effectiveness. Focusing on whether women can meet the current physical standards maintains a stalemate in terms of their full integration into the US military and limit the military’s ability to develop standards that reflect modern warfare. There are three reasons for this:
1. Physical standards are out of date and disconnected from the job.
2. Physical standards are not as objective as we think.
3. There are no exclusive combat roles, and therefore no need for exclusive combat physical standards. Let me explain:...