Posts Tagged ‘spending money’

Stocks steady with markets hopeful on US tax plan — But if U.S. Congress fails to act, Banks warn of trouble ahead

August 23, 2017


    23 August 2017 – 13H00
© AFP | Markets steadied after a rebound based on renewed optimism over chances President Donald Trump may succeed in reforming the US tax system.

LONDON (AFP) – European and Asian stock markets steadied Wednesday after a global equities rally driven by optimism over a US tax reform plan, but President Donald Trump’s comments about terminating a key trade agreement capped gains.The euro gained against the dollar following well-received eurozone data, analysts said.

“Manufacturing and services PMIs from the eurozone, Germany and France were all very strong and well above the level that separates growth from contraction, suggesting that the recovery is continuing to gain traction,” said Craig Erlam, senior market analyst at Oanda trading group.

In London, British advertising giant WPP saw its share price slump almost 12 percent to 1,405 pence after the company cut its full-year revenue forecast.

“WPP is very much seen as the bellwether of the advertising industry and as such is widely regarded as a global economic barometer and so it is unsurprising the shares have reacted,” Graham Spooner, investment research analyst at The Share Centre, said in a client note.

Provident Financial won 1.1 percent to 596 pence, a day after the ailing UK lender’s share price had crashed 66 percent.

Overall, stock markets had chalked up a comeback Tuesday after struggling in recent weeks owing to a standoff between the US and North Korea, which had been compounded by last week’s terror attack in Barcelona.

The US president’s woes have fuelled speculation he will struggle to push through his market-friendly economy-boosting policies that fanned a global market rally in the months after his November election.

Despite ongoing chaos at the White House, markets have been heartened by reports suggesting that the Trump administration was making headway on a tax reform plan.

“Some of the US political uncertainty may have been removed by a report on the Trump administration making progress on tax reform, but a wait-and-see mood is strong ahead of Jackson Hole and tensions in North Korea still in place,” said Tsutomu Nakamura, strategist at Ueda Harlow Corp., referring to a central bankers meeting on Friday.

The yen rose as investors pushed into safer investments after Trump said in a US speech that he may end the North American Free Trade Agreement, and vowed to pressure Congress to fund a border wall with Mexico that was at the centre of his election campaign.

The stronger yen pared some gains in Tokyo where the benchmark Nikkei 225 index ended 0.3-percent higher Wednesday, while Seoul and Taipei edged up 0.1 percent and Singapore was flat.

But Shanghai ended 0.1-percent lower and Sydney slipped 0.2 percent.

Hong Kong’s stock market was closed as powerful Typhoon Hato brought the southern Chinese city to a standstill.

All eyes are on the Jackson Hole symposium in Wyoming at the end of the week, which brings together the world’s top central bank chiefs.

Much of the attention will be on Federal Reserve boss Janet Yellen, with hopes for some clues about the bank’s plans to wind in its huge bond holdings.

European Central Bank chief Mario Draghi’s speech will also be closely watched as Frankfurt-based policymakers consider cutting back their bond purchases.

– Key figures around 1015 GMT –

London – FTSE 100: FLAT at 7,379.18 points

Frankfurt – DAX 30: DOWN 0.1 percent at 12,223.04

Paris – CAC 40: FLAT at 5,132.31

EURO STOXX 50: FLAT at 3,454.63

Tokyo – Nikkei 225: UP 0.3 percent at 19,434.64 (close)

Hong Kong – Hang Seng: closed

Shanghai – Composite: DOWN 0.1 percent at 3,287.71

Euro/dollar: UP at $1.1781 from $1.1764 2100 GMT

Pound/dollar: DOWN at $1.2796 from $1.2821

Dollar/yen: DOWN at 109.33 yen from 109.56 yen

Oil – Brent North Sea: DOWN 30 cents at $51.57 per barrel

Oil – West Texas Intermediate: DOWN 18 cents at $47.65




Americans Feel Good About the Economy, Not So Good About Trump

July 17, 2017

By John McCormick

July 17, 2017, 4:00 AM EDT
  • Just 40 percent approve of president’s performance in office
  • Narrow majority expect stock market to be higher by year’s end
Traders pass in front of an American flag displayed outside of the New York Stock Exchange (NYSE) in New York.

 Photographer: Michael Nagle/Bloomberg

Almost six months into Donald Trump’s presidency, Americans are feeling fairly optimistic about their jobs, the strength of the U.S. economy, and their own fortunes. That should be welcome news for the president, except for one thing: The public’s confidence largely appears to be in spite of Trump, not because of him.

The latest Bloomberg National Poll shows 58 percent of Americans believe they’re moving closer to realizing their own career and financial aspirations, tied for the highest recorded in the poll since the question was first asked in February 2013.

A majority expect the U.S. stock market to be higher by the end of this year, while 30 percent anticipate a decline. Yet they don’t necessarily think Trump deserves credit for rising markets and falling unemployment.

Just 40 percent of Americans approve of the job he is doing in the White House, and 55 percent now view him unfavorably, up 12 points since December. Sixty-one percent say the nation is headed down the wrong path, also up 12 points since December.

Trump scored his best numbers on his handling of the economy, but even there the news for him isn’t great. Less than half of Americans — 46 percent — approve of Trump’s performance on the economy; 44 percent disapprove. He gets slightly better marks for job creation, with 47 percent approving.

“If you take the president’s scores out of this poll, you see a nation increasingly happy about the economy,” said pollster J. Ann Selzer, who oversaw the survey. “When Trump’s name is mentioned, the clouds gather.”

In nearly every measure of his performance, the poll indicates that Trump’s tumultuous presidency is not wearing well with the public. A 56 percent majority say they’re more pessimistic about Trump because of his statements and actions since the election. That’s a huge swing since December when 55 percent said his statements and actions made them more optimistic about him.

Read the poll questions and methodology here.

The public has grown more skeptical that Trump will deliver on some of his most ambitious campaign promises. Two-thirds don’t think he’ll succeed in building a wall along the Mexican border during his first term. More than half say he won’t be able to revive the coal industry.

A majority — 54 percent — believe Trump will manage to create trade deals more beneficial to the U.S., but that’s down from 66 percent in December. There’s division on whether he’ll be able to bring a substantial number of jobs back to America, or significantly reform the tax code.

And despite his assurances that he and congressional Republicans will repeal Obamacare and replace it with a “beautiful” new health care bill, 64 percent of Americans say they disapprove of his handling of the issue. That’s especially significant because health care topped unemployment, terrorism and immigration as the issue poll respondents chose as the most important challenge facing the nation right now.

There are at least two areas where Americans say they believe Trump will deliver: Almost two-thirds say he will make significant cuts in government regulation, though it’s not clear whether most think that’s a good or bad thing. Likewise, 53 percent believe he will succeed in deporting millions of immigrants living in the U.S. illegally.

The public is also skeptical about Trump’s abilities as a world leader, with 58 percent saying they disapprove of the way he handles relations with other countries and 46 percent disappointed in his actions on trade agreements.

Americans are more pessimistic about foreign policy than they were in December. Fifty-five percent now say they expect dealings with Germany to get worse during the next four years, up 22 points. The share of poll respondents who anticipate worsening relations with the U.K., Mexico, Cuba and Russia also increased by double digits.

The public is also wary of Trump’s motives in his negotiations with other countries. Just 24 percent said they were “very confident” that Trump puts the nation’s interests ahead of his businesses or family when dealing with foreign leaders.

Americans have plenty of other worries about the world. Majorities believe it’s realistic that terrorists will launch a major attack on U.S. soil (68 percent) and that North Korea will launch a nuclear weapon aimed at the U.S. (55 percent).

Trump has called the expanding investigations into possible connections between his presidential campaign and Russia a “witch hunt.” But the public isn’t necessarily taking his side. Since the president’s decision to oust former FBI Director James Comey, the Federal Bureau of Investigation’s standing has improved. It’s now viewed favorably by 68 percent, up 10 points since December. Comey is viewed positively by 43 percent, while 36 percent see him negatively.

Meanwhile, most Americans don’t share the president’s apparent soft spot for Vladimir Putin: 65 percent view the Russian president negatively — and 53 percent say it’s realistic to think Russian hacking will disrupt future U.S. elections.

There is one notable bright spot for Trump. Though views of the White House as an institution are at the lowest level ever recorded by the poll — with 48 percent now viewing it unfavorably, up 21 points since December — Trump’s voters are still sticking with him. Among those who cast ballots for him, 89 percent still say he’s doing a good job.

The telephone poll of 1,001 American adults has a margin of error of plus or minus 3.1 percentage points, higher among subgroups. It was conducted July 8-12 by Iowa-based Selzer & Co.

For Many Firms, China’s ‘New Normal’ Spells Doom — Sometimes being big is not as important as being small and strong

July 20, 2015

China Faces Slower Growth: Industrial city’s struggle illustrates how slower economic growth is squeezing manufacturers

Vendors sell clothing at a makeshift market in downtown Tengzhou, a city of 1.5 million that has been hit hard by layoffs and factory closures.
Vendors sell clothing at a makeshift market in downtown Tengzhou, a city of 1.5 million that has been hit hard by layoffs and factory closures. Photo: Mark Magnier/The Wall Street Journal

The Decay of Corruption and Economic Failure Sparked Revolt in Ukraine

February 21, 2014
Deal: Vitali Klitschko (left), leader of Ukraine's UDAR opposition party, German Foreign Minister Frank-Walter Steinmeier (centre) and Ukrainian President Viktor Yanukovych (right) after the signing of the Agreement in the Presidential Palace on Friday

Deal: Vitali Klitschko (left), leader of Ukraine’s UDAR opposition party, German Foreign Minister Frank-Walter Steinmeier (centre) and Ukrainian President Viktor Yanukovych (right) after the signing of the Agreement in the Presidential Palace on Friday, February 21, 2014.


Associated Press

The battle in Kiev is, in large part, a fight for the country’s economic future – for better jobs and prosperity.

Ukraine’s protesters want to pry their country away from Russian influence and move closer to the European Union. A look at neighboring Poland, which did just that, suggests why.

The two countries emerged from the collapse of the Soviet Union two decades ago in roughly similar economic shape. But Poland joined the EU and focused on reforms and investment – and by one measure is now three times richer than Ukraine.

Ukraine, on the other hand, sank in a post-Soviet swamp of corruption, bad government and short-sighted reliance on cheap gas from Russia.

Per capita economic output is only around $7,300, even adjusted for the lower cost of living there, compared to $22,200 in Poland and around $51,700 in the United States. Ukraine ranks 137th worldwide, behind El Salvador, Namibia, and Guyana.

Protests broke out in November after President Viktor Yanukovich backed out of signing an agreement with the EU that would have brought the economy closer in line with European standards. After violent protests resulted in scores of deaths, the government and the opposition signed an agreement on Friday. But it is unclear whether it will succeed in providing a stable government that can heal the rifts and improve the economy.

It didn’t have to be this way, experts say. Ukraine has a large potential consumer market, with 46 million people, an educated workforce, and a rich potential export market next door in the EU. It has a significant industrial base and good natural resources, in particular rich farmland.

How did things go so wrong? Here are the main reasons.

OLD INDUSTRY: Ukraine did little to move away from Soviet-era industries producing commodities such as steel, metals and chemicals. Former communist state companies, often privatized to politically connected figures, relied on cheap gas from Russia and growing demand from the world economy for their raw materials.

That helped Ukraine’s economy grow rapidly from 2000 to 2008, but reduced pressure to modernize.

When the world economy fell into a crisis in 2008, demand for Ukraine’s materials plunged. Then in 2009, Russia significantly raised the price of its gas supplies, further pulling the rug from underneath the country’s export industries.

Pekka Sutela, an economist at Finland’s Lappeenranta University of Technology who has extensively studied post-Soviet economies, calls the gas-based export boom “the Ukrainian curse.”

“The economy was able to grow without making the necessary changes,” he said.

GAS FOLLIES: Ukraine’s state gas company, Naftogaz, charges customers only about 20 percent of what it pays for imported Russian gas. That means the government spends about 7.5 percent of the entire economy’s output each year on a massive home heating subsidy aimed at keeping voters happy. That results in large budget deficits that the government must borrow to cover.

The International Monetary Fund tried to help Ukraine through its post-crisis troubles, with loan packages in 2008 and 2010. Each time, the IMF turned off the money tap after Ukraine refused to follow policy requirements including raising gas prices or cutting back sufficiently on generous government salaries and pensions.

CORRUPTION: A recent World Bank study of the economy cited “pervasive” corruption as a major factor holding back the economy. At street level, businesses are subjected to arbitrary treatment by officials and demands for bribes. Higher up, there is widespread public skepticism over the fortunes amassed by the connected, known as oligarchs. In particular, attention has focused on the career of Yanukovych’s son Oleksandr, a dentist who according to Forbes Ukraine has amassed a $510 million fortune through various business enterprises.

Ukraine ranked 144 out of 175 countries in the 2013 corruption perception index compiled by Transparency International, an anti-corruption group, behind Papua New Guinea, Nigeria, and Iran.

RED TAPE: Business advocates say owners sometimes prefer paying bribes to obeying regulations and taxes that are so complicated and burdensome that they would be out of business if they complied. The country’s complex business tax laws require 390 hours a year to comply with and take 54.9 percent of profits. That put Ukraine 164th out of 189 countries in ease of paying taxes in a World Bank survey.

BROKEN FINANCES: Ukraine’s finances now are in such bad shape that it will have trouble paying its debts this year without outside help. With continuing deficits, it faces borrowing needs of between $7 billion and $10 billion this year. Its poor prospects mean it’s unlikely to be able to borrow more on bond markets.

Red Tape

On top of that, the central bank has been spending its dwindling foreign currency reserves, which were down to $17.8 billion at the end of January, to prop up the exchange rate of the hryvnia currency. One reason it is doing so is likely that many businesses and consumers owe money in dollars – a sharp drop in the hryvinia could trigger widespread bankruptcies.

Unfortunately, keeping the currency artificially strong hurts exports.

Russia had promised $15 billion in credit – an inducement to abandon closer ties with the EU and join a Russian-sponsored trade group. Even that money, however, seems to be on hold due to uncertainty about the fate of the Yanukovich government. Ratings agency Standard & Poors said Friday Ukraine would likely default without a significant improvement in the political crisis.

Sutela said that even Russian help would only be a stopgap and couldn’t paper over the need for fundamental change.

“Next autumn, they will go cap in hand and beg the Russians for money again,” he said.

Obama’s Economy: More people express uncertainty in chance to achieve the American Dream

November 26, 2013

American workers are living with unprecedented economic anxiety

Four years into an economic recovery in which most of the benefits have flowed to the top earners, a majority believe that the American Dream is becoming markedly more elusive, according to the results of a Washington Post-Miller Center Poll exploring Americans’ changing definition of success and their confidence in the country’s future.

Jim Tankersley and Scott Clement
Washington Post

CHESTER, Pa. — The alarm rang on John Stewart’s phone at 1:10 a.m. Up at 1:30, he caught one bus north into Philadelphia a little after 2 and another bus, south toward the airport, half an hour after that. He made it into work around 3:25 for a shift that started at 4, for a job that pays $5.25 an hour, which he cannot afford to lose.

Stewart is 55, tall and thin and animated. At work he wears a clip-on tie, a white cotton shirt with a fraying collar and a pair of black sneakers he nabbed on sale for $12.99 a few days ago. He wheels elderly air passengers from the ticket counters through security and to their gates, and back again, and every once in a while they tip him. Usually for lunch he buys a candy bar. His skin flakes from psoriasis, which gets worse when he worries, which, these days, is all the time. He can’t pay for treatments to soothe the itching or for a car to shorten his pre-dawn commute.

“I can’t save money,” he said recently, “to buy the things I need to live as a human being.”

American workers are living with unprecedented economic anxiety, four years into a recovery that has left so many of them stuck in place. That anxiety is concentrated heavily among low-income workers such as Stewart.

More than six in 10 workers in a recent Washington Post-Miller Center poll worry that they will lose their jobs to the economy, surpassing concerns in more than a dozen surveys dating to the 1970s. Nearly one in three, 32 percent, say they worry “a lot” about losing their jobs, also a record high, according to the joint survey, which explores Americans’ changing definition of success and their confidence in the country’s future. The Miller Center is a nonpartisan affiliate of the University of Virginia specializing in public policy, presidential scholarship and political history.

Job insecurities have always been higher among low-income Americans, but they typically rose and fell across all levels of the income ladder. Today, workers at the bottom have drifted away, occupying their own island of in­security.

Fifty-four percent of workers making $35,000 or less now worry “a lot” about losing their jobs, compared with 37 percent of ­lower-income workers in 1992 and an identical number in 1975, according to surveys by Time magazine, CNN and Yankelovich, a market research firm. Intense worry is far lower, 29 percent, among workers with incomes between $35,000 and $75,000, and it drops to 17 percent among those with incomes above that level.

Lower-paid workers also worry far more about making ends meet. Fully 85 percent of them fear that their families’ income will not be enough to meet expenses, up 25 points from a 1971 survey asking an identical question. Thirty-two percent say they worry all the time about meeting expenses, a number that has almost tripled since the 1970s.

Americans’ economic perceptions often divide along political lines; supporters of the incumbent president are usually more optimistic about the job market and the health of the economy. But that’s not the case with this new anxiety. Once you control for economic and demographic factors, there is no partisan divide. There’s no racial divide, either, and no gender gap. It also doesn’t matter where you live.

What matters in this new anxiety, what unites the people who worry more now than ever, are income and education. Workers who earn less, and workers who didn’t graduate from college, fear losing their already weaker livelihoods more than anyone else.

Spend a day with John Stewart — a man who has worked low-wage jobs since the late ’70s — and you start to understand why.

Back then, fewer worries

His first job — he doesn’t remember if it was in 1978 or ’79 — was cooking eggs and pancakes at a five-and-dime in New York City. He made $2.35 an hour, which would be a little less than $8 an hour today. He was 19 years old, a high school graduate who had grown up in Brooklyn and North Carolina. He hadn’t gone to college. He was sending chunks of his paycheck south to his parents, who were battling health issues. It was an anxious time in the national economy, with inflation running high.

He worried hardly at all, about any of it.

“In the years back then,’’ Stewart explained recently, “if you left a job, you were able to find another job, within the next day or the same week.”

He did leave that cooking job, fairly quickly. He found work right away as a messenger, running documents all over the city. In later years he would work in offices and at a trash dump infested with rats. He tried college for six months but left when his mother died. He has never gone back, though he would like to; he says he has never had the time or money for school. Eventually he landed in New Jersey at a Wal-Mart, poised, he thought, for a manager’s job. But he lost the promotion chance and the job — he was late to work too often, because of unreliable public transportation, he says — and in the fall of 2010 he retreated to Philadelphia to live with a cousin and look for a new gig.

This time, finding a job took him five months. It’s sadly typical for this recovery: In October, more than 4 million Americans had been looking for work longer than six months. That was down from nearly 7 million people at the start of 2010, but still 1 million more than at any point in U.S. history before the Great Recession.

When Stewart finally got the job at the airport, through a man at his church, he thought he was signing on for $7.25 an hour. On the first day they told him no, it’s $5.25 plus whatever tips come your way. That’s not usually very much. He brings home about $600 most months after taxes and accounting for unpaid sick days, he says. He pays a family friend $400 a month to live in her basement.

It makes him grateful to be a bachelor: “I’m glad I don’t have a family,” Stewart said. “Because if I had a family, man, we’d be hit.”

He has held the job for two years, arriving hours before sunrise on the circuitous bus route that takes more than an hour to cover what would be a quick ­seven-mile drive.

Before the shift begins at 4 a.m. he sits with colleagues, usually chatting about family and friends and complaining about work. On a recent Thursday, his first assignment came at 4:05. He picked up a 91-year-old woman at the counter and wheeled her through security, helping her shed her coat and walk through the checkpoint. It was a cold morning in the terminal, as usual, and he wore a blue jacket over a navy windbreaker over a navy sweater over his usual shirt and tie. At the gate she tipped him. He wouldn’t say how much.

Tips vary from day to day — sometimes he leaves work with enough cash in his pocket for a takeout dinner. Sometimes hardly any at all. Some folks bark directions sternly at the man pushing them around. Some passengers in the terminal curse him when they need to move as he rolls the chairs through. One man tried to fight him after Stewart asked him several times to make way.

The job is hardest before the sun comes up, Stewart said, but he tries to treat every day like he’s “going to a party” when morning comes.

“I believe in God,” he said, “and I try to keep that smile on my face, even though I may be struggling.”

He is usually tired by 6 a.m.

“My feet hurt now,” he said, boarding the bus, shortly after his shift ended at noon. “I’m tired. I always get tired.”

A stagnant labor market

There is a reason workers like Stewart are so nervous in today’s economy. That reason is the economy itself. There are still 11 million Americans looking for work who can’t find a job. The unemployment rate is 7.3 percent, higher than it has been since 1980, except during recessions and their immediate aftermaths. Adjusting for inflation, average household incomes for the poorest 40 percent of workers have fallen steadily — by more than 10 percent, total — since 2000.

Lower-income workers get most of their money from wages, as opposed to investments or other capital gains, said Heidi Shierholz, an economist with the liberal Economic Policy Institute, who writes extensively about unemployment and income.

“It’s no surprise that security concerns are off the map now [among those workers] because the labor market is so bad,” Shierholz said. “High unemployment hurts workers across the board, but it hurts workers with low and moderate incomes more.”

Even worse, there aren’t many signs that job and wage growth will rocket upward anytime soon — especially for workers like Stewart without college degrees.

“High-paying jobs for people who didn’t go to college just aren’t there anymore” in large numbers, said Melissa Kearney, an economist who directs the Hamilton Project at the Brookings Institution.

As low-income workers tightly grip their current jobs, few are seeking the skills and education often required to land better-
paying ones, the Post-Miller Center poll suggests. Fewer than four in 10 of those earning less than $35,000 annually said they’ve taken training programs in the past year to update their knowledge or skills, compared with about half of middle-income workers and nearly two-thirds of those whose household income tops $75,000.

Several economists say there’s a simple explanation for that gap: Poorer people can’t spare the time or money to go to school. Stewart, for example, would love to ditch his airport job to work as a hospital aide, hopefully for higher pay and at least some health benefits. (His job now offers none.) He’d need to take classes to earn a certification to qualify for that work. He has no idea how he’d swing that, financially. But he has hope that he will — and that, too, is typical of low-earning, anxious workers today.

Nearly six in 10 of those workers think it’s likely they’ll find a new job that pays better in the next five years, compared with fewer than four in 10 middle- and upper-income workers. Almost half expect a significant raise at their current job in the next half-decade, again outpacing the optimism of those who currently take home more.

Day to day, though, Stewart battles fatigue and depression. He rode two buses home from work when his Thursday shift ended, then hopped off and walked a few blocks toward his basement apartment. He had visitors, so he sat in the upstairs living room, near a computer table with pictures of the smiling Obama family, and talked for almost an hour.

But if it were a normal day, he said, if he were alone, he’d have walked off the bus and into the house and straight downstairs. He’d strip off his shirt and light a cigarette and lie down. Just to take it easy, for a bit.

Peyton M. Craighill contributed to this report.

Vietnam: Growing Gap Between Rich and Poor

October 15, 2013

A vendor sells fruit on a street in Hanoi. For more than two decades, Vietnam has notched up rapid and stunning economic growth and there have been warnings against the gap between the rich and the poor. The country’s 13 year-low economic growth of 5.03 percent last year has continued to punish the poor and only exacerbates the gap between the haves and have-nots. PHOTO: AFP

Vietnam’s wealth gap is only widening and poses the most worrying threat to the survival of the political regime, said Communist Party chief Nguyen Phu Trong.

Though the economic chasm has been oft-discussed, it remains unaddressed, he noted.

“The rich-poor divide… [only] shows signs of getting worse,” Trong said October 9 in his wrap-up speech at a regular meeting of the Party Central Committee, a powerful grouping of 175 senior Party members.

It was not the first time the country’s top leader has warned against socioeconomic disparity. Trong emphasized the rich-poor gap at another meeting of the Central Committee last year, saying the gap existed even inside the Party.

“Some Party members have gotten richer so quickly, leading a lavish life that is miles away from that of the workers,” Trong said at that time.

For more than two decades, Vietnam has notched up rapid and stunning economic growth and there have been warnings against the gap between the rich and the poor. But these concerns have largely been ignored in the euphoria of being the latest Asian economic tiger on the block.

The country’s 13 year-low economic growth of 5.03 percent last year has continued to punish the poor and only exacerbates the gap between the haves and have-nots.

The number of extremely wealthy people in Vietnam has grown by 14.7 percent this year, the second fastest rate in Southeast Asia after Thailand, according to a recent report released by Singapore company Wealth-X and Swiss bank UBS. The inaugural World Ultra Wealth Report says the number of ultra-high net worth individuals (UHNWIs), defined as those with assets of US$30 million and above, has risen to 195 this year and they have a combined wealth of $20 billion.

Other regional countries that saw the number of UHNWIs increase are Singapore, Malaysia, the Philippines, and Indonesia. Thailand is at the top with a year-on-year increase of 15.2 percent –from 625 last year to 720 now – and Indonesia is third with an increase of 10.2 percent.

Vietnam joined the lower-middle income bracket in 2009, with per capita income rising to $1,555 last year from $110 two decades earlier, according to the World Bank.

But Vietnam’s rich were 9.2 times wealthier than the poor in 2011 compared to 8.9 times wealthier in 2008, according to the latest data compiled by the General Statistics Office.

In major cities like Hanoi and HCMC, the gulf is glaringly evident.

Major luxury brand boutiques – Marc Jacobs, Cartier, Gucci, Louis Vuitton, or Hermès – preen on the streets before the eyes of construction workers and street vendors who sit at sidewalk eateries, spending less than a dollar on a meal.

In Vietnam’s highlands areas, a majority of the ethnic minority residents are still struggling to eat enough food every day, while a 2014 Rolls-Royce Wraith is set to ply the Vietnamese streets that already teem with all the luxury brands – Bugatti, Ferrari, Lamborghini, Maybach, Rolls-Royce and Bentley – soon as a local resident recently bought it at a cost of around VND19 billion ($902,000), Tuoi Tre (Youth) newspaper reported.

The best way economists and political scientists have to measure inequality is the Gini coefficient. In using the Gini coefficient, zero represents perfect equality and 100 perfect inequality.

According to the most recent World Bank data, Vietnam is at 35.57. Elsewhere in Vietnam’s neighborhood, the Philippines is at 42.98 and Malaysia has gotten worse at 46.21.  Indonesia was 34.01 (better than in the past) and Thailand 40.02 (getting worse).  Cambodia is 37.85, Laos 36.74 and Myanmar has no data.

“Vietnam is hardly the worst in the region, but the trend lines are not good,” Zachary Abuza, a Washington-based Southeast Asia analyst, told Vietweek.

“Vietnam is not a wealthy country, per capita income is still very low, so the disparities are very apparent, and also challenge the ruling ideology and social contract,” Abuza said.

Whose hand on the money faucet?

Vietnam has prided itself on achieving the first United Nations’ Millennium Development Goal (MDG) on poverty reduction well ahead of the 2015 deadline. MDGs is a set of targets for education, poverty, health and other areas.

The country has lifted some 30 million people out of poverty in the past two decades, the Ministry of Labor, War Invalids, and Social Affairs said in a recent report to the National Assembly, Vietnam’s legislature. The poverty rate fell from nearly 58 percent of the population in 1993 to 7.8 percent currently.

But while experts tout Vietnam as a success story in alleviating poverty, they have repeatedly urged the country not to rest on its laurels.

The World Bank said in a report earlier this year that macroeconomic instability has now left the remaining poor harder to reach. Growth has slowed in recent years due to macro instability and external shocks, inequality is rising, and ethnic minority poverty remains persistently high, it said.

The report said Vietnam’s 53 ethnic minority groups make up less than 15 percent of the population but they accounted for nearly 50 percent of the poor in 2010. Most minorities continue to reside in more isolated and less-productive mountainous regions of the country, it said.

The rapid economic transformation of the last few decades has left people in rural areas with limited access to high quality education and health services, as well as good jobs.

“Poverty reduction will become more difficult in the coming time as the poor people in Vietnam are now in more difficult positions, i.e., those that are in remote areas,” a foreign diplomat told Vietweek on condition of anonymity.

Analysts say what makes inequality in Vietnam unique is that it is a nominally socialist system, ostensibly committed to creating a classless society. 

Beyond that obvious point is that what is allowing this gap to increase is that people are able to gain control over public assets, they say.

“Vietnam has had incomplete market reforms,” Abuza, the Washington-based analyst, said.  “There is still too much state control over the economy, which allows connected insiders to profit.”

Vietnam’s top leadership has admitted to the surging influence interest groups have on the policymaking process, saying these groups could sway the decision making process of the nation’s bread-and-butter policies.

During a meeting with the Vietnamese diaspora in Denmark as part of his visit to the Scandinavian country last month, President Truong Tan Sang yet again warned against the pitfall of economic growth in which the profits only accrue to several groups with vested interests while a majority of ordinary people are left behind.

There has been little statistical or empirical evidence linking inequality to increased criminality. But apparently, such a correlation does exist in countries that record high Gini coefficients.

The Philippines has a lot more crime such as kidnapping for ransom, murder, and bank robberies.  Indonesia too has a lot of crime, though some of it is religiously motivated. Though Thailand, whose Gini coefficient is also rising, hasn’t seen a large increase in crime, it has seen much more political violence and the polarization of society, including mass riots. 

Given the regional context, Vietnam may not be immune from such development. Media stories of people not hesitating to kill others for the most insignificant reasons have continued to sprout up in the country. Meanwhile, crime rates have shown no sign of abating.

“A rising number of people have mysteriously made a windfall and this has done nothing but to add salt to the gaping wounds of the poor,” Pham Bich San, a Hanoi-based sociologist, said.

“It is those nouveau riches emerging with no cultural and intellectual base that have fueled jealousy and the desire to have the same from the have-nots.”

Huynh Ngoc An, a taxi driver in the tourism-haven Phu Quoc Island in the Mekong Delta province of Kien Giang, is not excited about a government plan to grant the island special administrative region status on the lines of Hong Kong in a bid to cash in on its tourism potentials.

“Clearly, Phu Quoc will continue to thrive but people like us will also continue to struggle to make ends meet,” An said.

“For years, economic development has benefited only a handful of officials and powerful people.”

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By An Dien, Thanh Nien News (The story can be found in the October 11th issue of our print edition Vietweek)

By the Numbers: The Incredibly Shrinking American Middle Class

October 15, 2013

by Karin Kamp
Moyers and Company

A typical American household made about $51,017 in 2012, according to new figures out from the Census Bureau this week. That number may sound familiar to anyone who remembers George H. W. Bush’s first year as president or Michael Jackson in his prime. That’s because household income in 2012 is similar to what it was in 1989 (but back then it was actually higher: you had an extra $600 or so to spend compared to today).

That sobering statistic gives an indication of where the American middle class appears to be headed. Take a look below at a snapshot of where the middle class is now, the problems they face and what our Facebook audience has to say about squeaking out a living these days.

A note on the term “middle class”: There is no single, universal definition so we turned to economic analyst Robert Reich – who spoke to us this week – for some direction. Reich suggested defining middle class as those with income levels 50 percent above and below the median income. Median is a term that means the “middle of the middle.”  Median earnings are a key indicator of how the middle class is doing.

A Snapshot

The income range to be considered middle class:$25,500 – $76,500

The median middle class household income in 2012: $51,017 and in 1989: $51,681

Year inflation-adjusted median household income peaked at $56,080: 1999

Income needed in a two parent, two child home in St. Louis for an adequate living standard: $64,673 and in New York City: $94,676

The Problem

Share of self-described middle-class adults who say it’s more difficult now than a decade ago for middle-class people to maintain their standard of living: 85

Percentage of Americans that consider themselves to be “lower class” (the highest percentage ever): 8.4

Percentage increase in salary growth for the median worker from 1979 to 2012: 5

Percentage drop in average real income per family since 2007: 8.3

The median net worth of a family in 2010: $77,300 and in 2007: $126,400

Percentage of Americans that are unemployed/underemployed rate: 14

Number of states in which poverty rates rose between 2007 and 2010: 46

Approximate poverty rate from 2009 to 2012: 15

The last time it remained at or above 15 percent for three years running: 1965

The Work

Average number of hours U.S. workers put in annually: 1,790 what the Norwegians work: 1,420 and the French: 1,479

Percent increase in productivity from 1979 to 2012: 75

What the median middle-class income ($51,017) would be if wages grew at the same rate: $77,131 (Check out this handy tool from EPI to see what your income would be if it had kept up with productivity.)

Number of guaranteed days of paid vacation given to U.S. workers: 0

Number of vacation days U.S. workers are entitled to, but don’t take, in a typical year: 175 million

Number of paid maternity days in Germany: 98 (100% pay) Number of paid maternity days in France: 112 (100% pay) Number of paid maternity days in U.S.: 0

Number of industrialized countries that do not mandate paid maternity leave: 1 (yes, the U.S. is the only one that does not require paid leave.)

The Costs

Average out-of-pocket health care expenses per household in 2012: $3,600 and in 2011: $3,280 and in 2005: $2,035

Average amount needed to send a child to an in-state college for the 2012-13 academic year: $22,261 and for a private college: $43,289

Percentage of Americans near retirement with less than $30,000 in their retirement accounts: 75

Percentage increase in housing prices since 1990: 56

Share of Americans that do not have enough money saved to pay their bills for six months: 3/4

The Inequality

Percentage of income gains captured by the top 1 percent in the first three years of the economic recovery: 95

Percentage income growth since 1967 for the top 5 percent of earners: 88 and for the top 20 percent of earners: 70 and for middle-income households: 20

Average income of top 1 percent: $1.2 million

Average net worth of the top 1 percent: $16.4 million

The share of wealth held by the richest 400 Americans: 1/2

The median household net worth in 2010: $57,000 and in 1983: $73,000

Percentage of the 1 percenters who said they were “middle class at heart”: 76

The total number of Americans living in poverty — with incomes of $23,492 for a family of four or $11,720 for an individual: 46.5 million

Age of Obama: While Most Media Sides With Obama, Evidence Mounts that Obamacare Hurts the Economy, Fewer Jobs Available, Taxes Up, American Quality of Life in Decline

October 5, 2013

Cartoon: Uncle Sam Crying by James Corcoran

The quality of life in the United States has fallen dramatically in the Age  of Obama, eroding the American dream, suffocating our economy, making jobs ever harder to come by.

By Donald Lambro
The Washington  Times

Instead of uniting our country in one common purpose, President Obama has  divided us by making class warfare one of the major weapons in his politics. He  came into office with our nation sinking into a deep recession from which it has  never fully recovered. He has talked endlessly about delivering good-paying,  full-time jobs for everyone, but has never successfully delivered on his promise  to do so. Not even close.

No issues before the American people are more critically important than the  continuing decline of the once-mighty U.S. economy and the dimming of the  American dream. These issues, however, have been effectively eclipsed by the  fight over the government shutdown in an effort to force Mr. Obama to give in to  GOP demands that he delay the start of  Obamacare, or make major changes in its dictatorial provisions.

The so-called Affordable Health Care Act is imposing many regulations, taxes,  penalties and costly regulations on the economy and businesses that will kill  jobs. Indeed, it is already doing so, as small businesses lay off workers or cut  back on their hours to skirt the threshold number of full-time employees and  avoid providing them with health insurance.

No one’s talking about this, or the other troublesome economic repercussions  in Obamacare. The discussion in much of the country and in the news media is all  about the government shutdown; about programs and agencies that have ceased  operations; about tourists who cannot enter government landmarks and national  parks; and about the economic impact on the country.

In their refusal to send a “clean” continuing resolution to the Senate to fund the government, House Republicans hoped it would spark a needed debate  over Obamacare, that it would lead to a one-year delay in its mandates and maybe  a chance to take control of the Senate in 2014.  That hasn’t happened. Instead, the political debate is all about the  shutdown.

As I predicted in my previous column, the news is saturated with sad stories  about workers who have been furloughed without pay and unable to pay the rent.  Aged World War II veterans, making perhaps one last trip to their marble  memorial on the Mall, found that it was fenced off. Food-safety inspectors are  off the job and national-security analysts are not at their posts. The stock  market is tanking on fears that this shutdown may last longer than expected,  hurting the economy and in the process, shrinking retirement funds. These and  other factors have blotted out any discussion about the Obama economy, high  unemployment, slow job creation and weak economic growth.

In a perverse way, the battle over the shutdown has handed Mr. Obama a gift,  a temporary reprieve from what is and has been his biggest failure as president.  It has also helped him target Republicans, whom he relentlessly blames for all  the ills that now beset the government, the country and his presidency. Mr.  Obama brought in some of Wall Street’s top leaders to a White House briefing  Wednesday, and they dutifully went before the cameras to warn of a looming  catastrophe — especially if Congress doesn’t raise the debt limit before Oct. 17  and the government is forced to default on paying some of its debts.

He effectively blunted charges he wouldn’t meet with House and Senate leaders by calling lawmakers in late Wednesday. The meeting was “cordial but  unproductive,” Senate Minority Leader Mitch  McConnell said. No surprise there.

Mr. Obama has the bully pulpit in this fight and is using it for all it’s  worth, while Republicans seemed unusually mute and confused about how to  respond. If Obamacare is truly as harmful to the economy and the government’s  future solvency, as I believe it is, then where were the arguments saying so?  House Speaker John A. Boehner’s podium is no match for the White House pulpit  and the unending TV reports of America’s government shutting down.

There is plenty of evidence showing how Obamacare hurts our economy, as  reports have come in from across the land of employers reducing their hiring and  health care premiums rising faster than workers’ incomes. However, it is nearly  impossible to find any Republican in Congress who can fashion a compelling  indictment of the Obama administration’s five-year record on the economy.

In his day, the late, great Jack Kemp effectively delivered the tax-cut  arguments for stronger job growth, using John F. Kennedy’s anti-class warfare  declaration that “a rising tide lifts all boats.” President Reagan embraced  Kemp’s ideas for a rebirth of American capitalism that led us out of a severe  recession in two short years. Republicans should be pounding Mr. Obama daily  over his painfully lackluster economy, and dishing out the figures showing how  Obamacare will make it much worse.

A Washington Post-Miller Center Poll late last month revealed a large  majority of Americans have a much dimmer view of their economic future.  Three-fourths of those polled said it’s harder to “find good jobs,” 71 percent  said it’s harder to “save for retirement,” 66 percent said it’s harder to “get  ahead financially,” and 54 percent said it’s harder to “find decent, affordable  housing.”

Mr. Obama is not getting the level of blame he deserves for the economic  hardships these Americans are enduring. It’s time for Republicans to take off  the gloves and start hitting back harder in this shutdown fight. They’ve got  some powerful ammunition but, tragically, they’re not using it.

Donald Lambro is a syndicated columnist and contributor to The Washington  Times.

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Senate Majority Leader Harry Reid, D-Nev., tells reporters that Speaker of the House John Boehner, R-Ohio, and House Republicans are the obstacle to ending the government shutdown crisis, at the Capitol in Washington, Thursday, Oct. 3, 2013. President Barack Obama brought congressional leaders to the White House on Wednesday for the first time since a partial government shutdown began, but there was no sign of progress toward ending an impasse that has idled 800,000 federal workers and curbed services around the country. (AP Photo/J. Scott Applewhite)

The ObamaCare Wars Are Just Starting

September 25, 2013

The health law has set in motion long-run forces that could erode the political foundation of Medicare.

The ObamaCare fight is turning hot and heavy. House Republicans have made an implausible threat to shut down the government to defund ObamaCare, but a plausible motive is to create fear, uncertainty and doubt (which already exists in abundance regarding ObamaCare) during the crucial sign-up period that begins next month.

On the flip side, the administration’s last-minute decision not to require income documentation in the first year can only do wonders for enrollment. A handy Kaiser Family Foundation calculator shows how: A single person who estimates his 2014 income as $33,000 would get a measly $6. Change the estimate to $30,000 and, hey, get $507.

This is war—turning sectors of the economy into partisan battlefields is a cost of their agenda that liberals, with their pure faith in “programs,” never factor in. But wars also have a way of leading to unexpected outcomes.

Consider the speed with which Trader Joe’s, a grocery chain, went from goat to hero in the media last week for canceling insurance coverage for part-time workers. Bad Trader Joe’s. But the chain would also give them $500 each to buy health insurance on an ObamaCare exchange, which would actually be a better deal for most employees. Good Trader Joe’s.



A tea-party rally in Washington, D.C., Sept. 10. Photo by Jonathan Ernst/Reuters

The fine balance here is between two subsidies in our oversubsidized health-care system. Figuring out where these lines cross is the kind of thing that keeps economists busy. If all employees for whom it made sense to trade in the tax benefit for employer-provided insurance in favor of ObamaCare’s direct tax credits did so, how many would shift?

According to a new Stanford study, 37 million (at an additional annual cost of $132 billion).

That’s a huge number of people quitting our employment-based health insurance system. The only ones staying would be the affluent, who get the biggest tax subsidy because they’re in the highest tax bracket. At a stroke, undermined is the political coalition that has long sustained one of the most destructive and regressive subsidies in our health-care system. And that’s just one of the accidental features of the bundle of liberal compromises that make up ObamaCare.

ObamaCare also sets in motion long-run forces that could erode the political foundation of Medicare. Don’t believe it?

ObamaCare already contains a large implicit subsidy for the old (regardless of income) in the form of protection of pre-existing conditions and its limitation on how much higher rates insurers can charge the old than the young.

Medicare, for its part, is already means-tested and will become more so. Millions of Medicare users already have opted for a private insurance option. How many ObamaCare customers might one day decide they’d also like to keep their private insurance rather than enroll in fee-for-service Medicare—especially as no signal has been clearer from Washington than the signal that Medicare quality will decline as reimbursements to doctors and hospitals are trimmed back?

Now let’s just dream for a moment: If Medicare and the tax handout to employers declined in importance, what would be left would be ObamaCare plus Medicaid—essentially a schedule of declining subsidies (irrespective of age) that phase out with income.

Voila, this sounds a lot like the alleged GOP cure for our health-care system.

Our point is that when Washington legislates on a grand scale, it sets in motion a game whose long-run outcome nobody can predict.

ObamaCare, to be sure, was not reform—it was a piling on of subsidies that can only throw fuel on the fire of health-care inflation. Not even the usual mouthpieces pretend otherwise anymore.

But a society can’t give a subsidy to everybody for the same reason you can’t give a subsidy to yourself—you end up paying for your own subsidy and aren’t better off. In fact, you are worse off thanks to the administrative overhead involved in taking money away from you and giving it back to you.

You are also worse off because of the perverse incentives engendered by diverting yours and everyone’s health-care spending through a common pot.

These pathologies have undermined U.S. health care for two generations, and nothing has been solved, nothing has been fixed, due to ObamaCare.

It should be noted, finally, who is really rooting for the Affordable Care Act to be a train wreck: It’s people on the left, like L.A. Times columnist Michael Hiltzik, who anticipates that “glitches, loopholes and shortcomings” will lead to a single-payer system. It’s people like Sen. Harry Reid, whom Mr. Hiltzik quotes telling voters back in Nevada that ObamaCare is “far from having something that’s going to work forever.”

Our health-care wars still have a long way to run.