pension reform

66 results back to index


pages: 572 words: 94,002

Reset: How to Restart Your Life and Get F.U. Money: The Unconventional Early Retirement Plan for Midlife Careerists Who Want to Be Happy by David Sawyer

Airbnb, Albert Einstein, asset allocation, beat the dealer, bitcoin, Cal Newport, cloud computing, cognitive dissonance, crowdsourcing, cryptocurrency, David Attenborough, David Heinemeier Hansson, Desert Island Discs, diversification, diversified portfolio, Edward Thorp, Elon Musk, financial independence, follow your passion, gig economy, hiring and firing, index card, index fund, invention of the wheel, knowledge worker, loadsamoney, low skilled workers, Mahatma Gandhi, Mark Zuckerberg, meta analysis, meta-analysis, mortgage debt, passive income, passive investing, Paul Samuelson, pension reform, risk tolerance, Robert Shiller, Robert Shiller, Ronald Reagan, Silicon Valley, Skype, smart meter, Snapchat, stakhanovite, Steve Jobs, Tim Cook: Apple, Vanguard fund, Y Combinator

If you don’t trust this method, develop your own spreadsheet; or google it, find someone else’s and modify to suit you. However you do it, the important thing is you track the performance of your stash and net worth for the rest of your days. Chapter 26 #4: 2015 UK Pension Reforms FOR MOST OF MY adult life, pensions were things I couldn’t and didn’t want to understand. The fact that I would need to pay money into something I couldn’t access until I was 65, and even then need to buy something called an annuity, meant pensions never had me in their thrall. The pension reforms of 2015 changed all that. I can access my pension when I’m 55 – that’s only ten years away. I can take a 25% lump sum tax-free when I’m 55 (if you were born after 1972, it’s 57[263]). Even if I have a defined contribution or benefit scheme, I can still set up a Self-Invested Personal Pension (Sipp) and pay into that as well.

Digital Declutter 14. Mental Declutter 15. Physical Declutter 16. Part III Index Card 17. Halftime Downer Interval Part IV: Getting F.U. Money – a Plan 18. Structure 19. You’re Not alone – Money is the Commonest Problem 20. What Do Rich People Look Like? 21. Financial Independence and F.U. Money 22. Four FI Fundamentals 23. #1: Stash Maths 24. #2: Net Worth 25. #3: One Pot 26. #4: 2015 UK Pension Reforms 27. The FIRE Triumvirate 28. Section 1: Budgeting 29. Section 2: Efficiency/Frugality 30. Section 3: Investing (Options, Interest and the SWR) 31. Section 3: Investing (Wise Words & the Case for Indexing) 32. Section 3: Investing (RESET's 10-Point Investing Plan) 33. Section 3: Investing (Final Salary and State Pensions) 34. Section 3: Investing (Legacy – After You've Gone) 35. Part IV Index Card Part V: 11 Core Principles to Guide You in Work and Life 36.

However, if you’ve left the employer, or your current employer’s final salary scheme has been wound up (eg, it’s still there, but you and the employer are no longer contributing), that’s different. Let’s take a closer look. A closer look While it’s fair to say former chancellor of the exchequer George Osborne has his detractors, we middle-class midlifers should be grateful to the man for his 2015 pension reforms Bye-bye being forced to buy an annuity in retirement, hello freedom and choice. In fact, I’d say George Osborne has done more to further financial independence for UK professionals of our generation than anyone. But what he may not have envisaged is the little-known rush to cash in final salary schemes, which saw an estimated 120,000 final salary scheme members “transfer out” in 2017/18, up from 80,000 in 2016/17[407].


pages: 309 words: 93,958

22 Days in May: The birth of the Lib Dem - Conservative coalition by Laws, David

first-past-the-post, income inequality, pension reform, smart grid, smart meter

A Lib–Lab government would be distrusted by the markets, and it would be vital to show we could deliver on deficit reduction.’ I said that there were some clear ways in which we could demonstrate credibility, for example, we could establish a commission to review the affordability and fairness of public sector pensions. Danny said that this could be established on similar lines to Adair Turner’s very successful commission on the state pension reforms. Peter Mandelson and Lord Adonis looked sympathetic, enthusiastic even. But Ed Balls, Ed Miliband and Harriet Harman recoiled in horror, and competed to look shocked, horrified, and as if a rather unpleasant odour had assaulted their senses. Not only was the Labour team clearly divided in its attitude to talks, but some interesting old/new Labour divisions were emerging during the policy discussions too.

Ed Balls muttered: ‘This would be very bad for credibility, because we couldn’t do it.’ Harriet Harman said: ‘What if we fail to convince the markets, while panicking our people on public services?’ ‘Look, these are only the first tough decisions we are going to have to take to reduce the deficit – even on your spending plans,’ I said. ‘We are going to have to take action in areas such as public sector pensions reform, too.’ Ed Miliband looked horrified: ‘Oh no,’ he said. ‘We cannot go further than our existing agreements with the unions.’ ‘That sounds like a line from your Labour leadership campaign!’ joked Danny. Ed Miliband tried to look mystified. There was a long pause. Ed Balls looked determinedly grumpy. Peter Mandelson looked a little confused. I felt that we were getting a glimpse not merely of the differences of view between Labour and the Liberal Democrats, but of some of the deep-seated divisions over spending, taxation and the deficit within the Labour Party.

But the problem was that the economy is rather an important area in policy terms. To me, for whom these issues were of central importance, it seemed rather like telling a chef that his food was shockingly bad but that the tablecloth was beautifully ironed. The truth was that we had no agreement on delivering a £10,000 personal tax allowance. We had no agreement on funding the pupil premium. We had no agreement on a banking levy, or on public sector pensions reform, or on restoring the pension earnings link. We had no agreement on a strategy for deficit reduction, and no agreement on spending. All of that meant that we were nowhere near being able to conclude a coalition agreement. Meanwhile, we could not know if a Lib–Lab minority coalition could command the support to survive in the House of Commons, or even deliver the Labour votes necessary to push through a referendum on AV.


pages: 344 words: 94,332

The 100-Year Life: Living and Working in an Age of Longevity by Lynda Gratton, Andrew Scott

3D printing, Airbnb, assortative mating, carbon footprint, Clayton Christensen, collapse of Lehman Brothers, creative destruction, crowdsourcing, delayed gratification, disruptive innovation, diversification, Downton Abbey, Erik Brynjolfsson, falling living standards, financial independence, first square of the chessboard, first square of the chessboard / second half of the chessboard, future of work, gender pay gap, gig economy, Google Glasses, indoor plumbing, information retrieval, intangible asset, Isaac Newton, job satisfaction, longitudinal study, low skilled workers, Lyft, Nelson Mandela, Network effects, New Economic Geography, old age dependency ratio, pattern recognition, pension reform, Peter Thiel, Ray Kurzweil, Richard Florida, Richard Thaler, Second Machine Age, sharing economy, side project, Silicon Valley, smart cities, Stanford marshmallow experiment, Stephen Hawking, Steve Jobs, The Future of Employment, uber lyft, women in the workforce, young professional

Reform tends to be slow and as the voting population ages, it becomes increasingly resistance to pension reform. The details of reform vary considerably from country to country, but the general principles are the same: increase the retirement age so as to increase the number of years of tax paying; reduce the number of years of claiming a pension; and target pensions more to those with low incomes and assets. Across the OECD a total of eighteen countries have raised the retirement age for women, and fourteen have done so for men. However to date these increases are at a modest pace: 2.5 years for men and 4 years for women between 2010 and 2050. That is slower than the projected increase in life expectancy and so we expect this trend of pension reform to continue or accelerate. If you are a high earner, it is also important to realize that the state will play a smaller role in your pension provision going forward.

If you are a high earner, it is also important to realize that the state will play a smaller role in your pension provision going forward. For example, in 2000 a wealthy UK pensioner could expect a state pension worth more than 35 per cent of their final salary; by 2060 that will be only 20 per cent. If state pension reform is slow, changes in corporations’ occupational schemes have, in contrast, been rapid. Pensions are expensive to run and not something most firms are good at, and increasing longevity has made company pension schemes a major financial liability. The result is a dramatic decline in the number of such schemes, while existing schemes are already closing their membership to new workers. In 1987 in the UK, for example, there were 8.1 million members attached to occupational pension schemes in the private sector; by 2011 that number had fallen to 2.9 million.7 In the US, the number of employees with access to defined benefit pensions declined from 62 per cent in 1983 to 17 per cent by 2013.8 Furthermore, even among those schemes that survive, many are reducing their generosity in order to achieve financial sustainability.

Jimmy: The three-stage life is stretched We now turn our attention to Jimmy, who was born in 1971 and has a life expectancy of 85.9 We are investigating the finances behind a three-stage life, so we assume that Jimmy graduated from college aged 21 in 1992 and intends to work until he reaches the age of 65 in 2036. Like Jack, he wants to achieve a pension worth 50 per cent of his final salary. However, we will make one key change for Jimmy: our calculations are based on the assumption that he does not have access to a company pension scheme. Despite the state pension reforms we mentioned above, we will continue to assume that he receives a state pension worth 10 per cent of his final salary. Figure 2.3 shows the financing requirements for Jimmy. Whereas Jack had to save 4.3 per cent of his income every year to retire at 65, Jimmy has to save 17.2 per cent each year. Balancing is much trickier for Jimmy. He doesn’t have the benefit of a company pension and so he has to finance twice as much of his pension, and, unlike Jack, he works for forty-four years and retires for twenty.


pages: 471 words: 124,585

The Ascent of Money: A Financial History of the World by Niall Ferguson

Admiral Zheng, Andrei Shleifer, Asian financial crisis, asset allocation, asset-backed security, Atahualpa, bank run, banking crisis, banks create money, Black Swan, Black-Scholes formula, Bonfire of the Vanities, Bretton Woods, BRICs, British Empire, business cycle, capital asset pricing model, capital controls, Carmen Reinhart, Cass Sunstein, central bank independence, collateralized debt obligation, colonial exploitation, commoditize, Corn Laws, corporate governance, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency peg, Daniel Kahneman / Amos Tversky, deglobalization, diversification, diversified portfolio, double entry bookkeeping, Edmond Halley, Edward Glaeser, Edward Lloyd's coffeehouse, financial innovation, financial intermediation, fixed income, floating exchange rates, Fractional reserve banking, Francisco Pizarro, full employment, German hyperinflation, Hernando de Soto, high net worth, hindsight bias, Home mortgage interest deduction, Hyman Minsky, income inequality, information asymmetry, interest rate swap, Intergovernmental Panel on Climate Change (IPCC), Isaac Newton, iterative process, John Meriwether, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, knowledge economy, labour mobility, Landlord’s Game, liberal capitalism, London Interbank Offered Rate, Long Term Capital Management, market bubble, market fundamentalism, means of production, Mikhail Gorbachev, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, mortgage debt, mortgage tax deduction, Myron Scholes, Naomi Klein, negative equity, Nelson Mandela, Nick Leeson, Northern Rock, Parag Khanna, pension reform, price anchoring, price stability, principal–agent problem, probability theory / Blaise Pascal / Pierre de Fermat, profit motive, quantitative hedge fund, RAND corporation, random walk, rent control, rent-seeking, reserve currency, Richard Thaler, Robert Shiller, Robert Shiller, Ronald Reagan, savings glut, seigniorage, short selling, Silicon Valley, South Sea Bubble, sovereign wealth fund, spice trade, stocks for the long run, structural adjustment programs, technology bubble, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Bayes, Thomas Malthus, Thorstein Veblen, too big to fail, transaction costs, undersea cable, value at risk, Washington Consensus, Yom Kippur War

., p. 55. 63 José Piñera, ‘Empowering Workers: The Privatization of Social Security in Chile’, Cato Journal, 15, 2-3 (Fall / Winter 1995/96), pp. 155-166. 64 Ibid., p. 40. 65 Teresita Ramos, ‘Chile: The Latin American Tiger?’, Harvard Business School Case 9-798-092 (21 March 1999), p. 6. 66 Laurence J. Kotlikoff, ‘Pension Reform as the Triumph of Form over Substance’, Economists’ Voice (January 2008), pp. 1-5. 67 Armando Barrientos, ‘Pension Reform and Pension Coverage in Chile: Lessons for Other Countries’, Bulletin of Latin American Research, 15, 3 (1996), p. 312. 68 ‘Destitute No More’, Economist, 16 August 2007. 69 Barrientos, ‘Pension Reform’, pp. 309f. See also Raul Madrid, ‘The Politics and Economics of Pension Privatization in Latin America’, Latin American Research Review, 37, 2 (2002), pp. 159-82. 70 All figures are for 2004, the latest comparative data available from the World Bank’s World Development Indicators database. 71 I am indebted here to Laurence J.

In 1980, just seven years after the coup, Pinochet conceded a new constitution that prescribed a ten-year transition back to democracy. In 1990, having lost a referendum on his leadership, he stepped down as president (though he remained in charge of the army for a further eight years). Democracy was restored, and by that time the economic miracle was under way that helped to ensure its survival. For the pension reform not only created a new class of property-owners, each with his own retirement nest egg. It also gave the Chilean economy a massive shot in the arm, since the effect was significantly to increase the savings rate (to 30 per cent of GDP by 1989, the highest in Latin America). Initially, a cap was imposed that prevented the AFPs from investing more than 6 per cent (later 12 per cent) of the new pension funds outside Chile.65 The effect of this was to ensure that Chile’s new source of savings was channelled into the country’s own economic development.

The growth rate in the fifteen years before Friedman’s visit was 0.17 per cent. In the fifteen years that followed, it was 3.28 per cent, nearly twenty times higher. The poverty rate has declined dramatically to just 15 per cent, compared with 40 per cent in the rest of Latin America.68 Santiago today is the shining city of the Andes, easily the continent’s most prosperous and attractive city. It is a sign of Chile’s success that the country’s pension reforms have been imitated all across the continent, and indeed around the world. Bolivia, El Salvador and Mexico copied the Chilean scheme to the letter. Peru and Colombia introduced private pensions as an alternative to the state system.69 Kazakhstan, too, has followed the Chilean example. Even British MPs have beaten a path from Westminster to Piñera’s door. The irony is that the Chilean reform was far more radical than anything that has been attempted in the United States, the heartland of free market economics.


pages: 367 words: 108,689

Broke: How to Survive the Middle Class Crisis by David Boyle

anti-communist, banking crisis, Berlin Wall, Big bang: deregulation of the City of London, Bonfire of the Vanities, bonus culture, call centre, collateralized debt obligation, corporate raider, Credit Default Swap, credit default swaps / collateralized debt obligations, deindustrialization, delayed gratification, Desert Island Discs, Eugene Fama: efficient market hypothesis, eurozone crisis, Fall of the Berlin Wall, financial deregulation, financial independence, financial innovation, financial intermediation, Francis Fukuyama: the end of history, Frederick Winslow Taylor, housing crisis, income inequality, Jane Jacobs, job satisfaction, Kickstarter, knowledge economy, knowledge worker, market fundamentalism, Martin Wolf, mega-rich, mortgage debt, Neil Kinnock, Nelson Mandela, new economy, Nick Leeson, North Sea oil, Northern Rock, Occupy movement, off grid, offshore financial centre, pension reform, pensions crisis, Plutonomy: Buying Luxury, Explaining Global Imbalances, Ponzi scheme, positional goods, precariat, quantitative easing, school choice, Slavoj Žižek, social intelligence, too big to fail, trickle-down economics, Vanguard fund, Walter Mischel, wealth creators, Winter of Discontent, working poor

It was all going very well: the indications were that she was behind Fowler’s findings (though she short-sightedly vetoed any idea of raising the retirement age). It was then that the trouble began. Nigel Lawson turned out to be implacably opposed to making private pensions compulsory. Nobody ever accused Lawson of being a social reformer, but he was gripped at the time by his own radical agenda — to cut taxes and make enough savings in government spending to make that possible. And to do so as quickly as possible. The Fowler pension reforms had the whiff of something that would cost money. He began to search for objections. The first meeting of the cabinet committee was due on 6 February. The papers had already gone out and were sitting in the red dispatch boxes of ministers ready for their long journeys home by ministerial car. On the last day of January, Fowler was at 10 Downing Street for a meeting of the full cabinet and a group photograph, now that John Wakeham and Norman Tebbit were back at work after recovering from their injuries from the Brighton bomb.

Thomas, 48 Chamberlain, Joseph, 304 Chamberlain, Neville, 91 Champy, James, 174, 255 Channel Tunnel, 202 Charter Consolidated, 146 Chase Manhattan, 149 Chatfield, Admiral Lord, 233 Cheltenham & Gloucester Building Society, 109–10, 118 Chevalier, Albert, 172 childcare, 13, 15, 18–19, 76, 81 see also nurseries Cisco, 114 Citibank, 96, 100 Citigroup (Citicorp), 146 secret reports, 24–6, 152, 159 Citizens’ Charter, 222–3, 258 City of London, 129–31 deregulation, 134–40, 147–51, 285 hostility to industry, 152 and occupational pensions, 190 pay and bonuses, 142–4, 149–50, 160–1 Clarke, Kenneth, 177 Cobbett, William, 282–3, 290–2 Cobden, Richard, 106 Coles, Adrian, 109–13, 117–19 collateralized debt obligations (CDOs), 154, 156 Columbus, Christopher, 277–8 Community Development Finance Institutions, 96 comparative advantage, 298 Comprehensive Performance Assessments, 265 Conrad, Joseph, 286 Conservative Party, 58–9, 63, 137, 188, 222, 227 and pension reforms, 176–85, 194 conveyancing, 101 Cooke, Sue, 252 Co-operative Bank, 118 co-operatives, 299 corporate re-engineering, 174, 255–6, 261 ‘Corset’, the, 57, 60–1, 65–8, 70, 72, 97, 99, 285 Cotton, Kathleen, 328 council houses, sale of, 63, 67, 100 County NatWest, 145, 148 courts, closure of, 252 Crabtree, Tim, 292–6 credit cards, 18, 80–1, 168, 300 credit default swaps, 156 Credit Suisse First Boston, 114, 151 credit unions, 96 Cresswell-Turner, Sebastian, 65 Crunchies, 44, 49, 83 Crystal Palace station, 52–4 D Dad’s Army, 93–4 Daily Express, 183, 185 Daily Mail, 9–10, 38, 189, 271 Daily Mirror, 190–1 Daily News, 38 Daily Telegraph, 15, 83, 130, 139, 181, 288 Darling, Alistair, 118 Dartford Grammar School, 216–17 Davies, Brian, 113 Davis, Brooklyn, 16 Dearing, Ron, 227 debt advice, 17 ‘deliverology’, 262, 266–7 democracy, 26 ‘property-owning’, 63 shareholder, 107 Demos, 257 Denmark, 77, 286 Department of Education, 218, 224, 227 Department of Health and Social Security (DHSS), 177, 184 Department of Trade and Industry, 188 Department of Work and Pensions, 17 derivatives, 141–2, 155–6, 158–9 Direct Edge, 155 Disney, 142–3 divorce, 79–80 Dluglash, Alan, 20 Dorset, 18, 292–6 dot.com boom, 114–15, 132–3, 140–1, 154, 169 downshifting, 12, 44, 52, 73, 83, 292 Drexel Burnham Lambert, 148 Dulwich, 287 Dulwich Preparatory School, 204–6 Dunkley Marshall, 138 Dunn, Robert, 225 dyslexia, 230 E Edinburgh, 18 education, 19–20, 207–41 and character, 233–4 and choice, 207–11, 213, 216, 221–3, 238 comprehensive, 220, 234, 237 and globalization, 212, 239 national curriculum, 220, 227 ‘open admission’ policy, 220–1 private, 5, 10–13, 19–20, 36, 143, 169, 211–12, 236, 238–9, 242 SATs, 226–7 ‘Three Wise Men’ report, 226 see also Black Papers on Education; schools Efficient Market Hypothesis, 128–9, 131, 133, 140, 157 Eisner, Michael, 142 Eleven-Plus, 217–18 Eliot, T.

Edgar, 122 Hopkinson, David, 139, 146, 150 Horta-Osorio, Antonio, 155 Hoskyn, John, 59 hospital consultants, 89, 249 house-price inflation, 3, 15, 18, 20–1, 24, 55–85, 160, 280, 284, 286 ‘Barber Boom’, 56 and building societies’ cartel, 65–6, 71–3 and divorce, 79–80 and housing density, 78–9 and Lloyd’s scandal, 28, 32 and mortgage interest tax relief, 108–9 and rents, 68–9 and school catchments, 20, 210–11, 221 and size of houses, 77–9 and working couples, 74–6 house prices, 56, 61, 68–9, 74, 87 household loans, increase in, 69 housing market, parallel, 301–2 housing shortages, 56 Howard, Michael, 177 Howe, Elspeth, 58 Howe, Sir Geoffrey, 58–60, 62–7, 97, 99, 128, 130 Human Scale Education, 235 Hutber, Patrick, 5, 36–7, 45, 47, 55, 60, 174–5, 283 I IKB, 156 IMF, 59, 128 immigrants, 39 Imperial College, London, 140 income tax, 36 Independent, 118 Independent on Sunday, 175 index-linked funds, 197–8 Industrial Revolution, 152 inflation, 36, 58, 161, 199, 279–80, 284, 286, 289 Initial Rentokil, 295 Institute of New Economic Thinking, 157 insurance, 171 interest rates, artificially low, 195, 203 ISAs, 171 It’s a Wonderful Life, 122–3 Italy, 97, 299 J Japan, 75, 152, 176, 299 Jenkins, Simon, 72, 226, 266 Jersey, 147 Jews, 39 job seeker’s allowance, 271 jobbers, 136–7, 145–7 Johnson, Rob, 157 Johnson, Simon, 151 Jones, Owen, 68, 287–8 Joseph, Sir Keith, 58, 99, 177, 220 JP Morgan, 143, 152 Judd School, 216–17 Julius II, Pope, 278 Jung, Carl, 95 junk bonds, 148, 154 K Katz, Cindi, 46 Kay, John, 104 Kensington and Chelsea, 211 Kent, 216–19 Keynes, John Maynard, 157, 290 Killik, Paul, 147 King, Mervyn, 129–31, 141 King’s School, Tyneside, 238–9 Kingsland Foundation School, 204–6 Kinnock, Neil, 31 Kinsman, Francis, 174 Kozlowski, Dennis, 117 Kramer, Sebastian, 80 Kynaston, David, 130, 311 L Labour Party, 24, 66–7, 179, 182, 194, 287 Lambton, Lucinda, 224 Lane, Deborah, 11–14, 17 Latin American debt crisis, 71 Lawson, Nigel, 58–60, 62–6, 71–2, 128, 130 and building societies, 97, 99–100, 104 and City deregulation, 138, 149 and end of MIRAS, 108–9 and pension reforms, 177, 180–5, 188, 190, 194 Leeds, 225 Leeson, Nick, 158 Leigh-Pemberton, Robin, 151 leisure time, 17 Leith, William, 15, 83 Lewis, Michael, 153–4 Lewis, Roy, 37–9 Liberal Democrats, 211 libraries, 17 Little Venice, 1–2 Lloyd George, David, 38, 172, 255 Lloyd’s of London, 27–35, 50–1, 69, 286 Lloyds Bank, 71, 109, 118, 122, 155, 171 Local Enterprise Partnership, 293 localism, 299 Lockheed Martin, 132 London education, 210–11, 219, 221, 232, 240 housing, 68–9, 85 middle classes, 41–2 wealth disparities, 284 London Olympics, 221 London Oratory School, 228 London Rebuilding Society, 296 London School of Economics, 140–1 London Stock Exchange, deregulation of, 135–40, 147–51 M M&G, 139 McDonald’s, 47 Maclnnes, Colin, 305 McKinsey, 261, 266 ‘Macmillan Gap’, 152 McRae, Hamish, 118 Major, John, 30–1, 101, 176, 213, 258, 263–4 and education reforms, 221–5 Major, Stephen, 113 Manchester, 95, 189, 224, 255 Manchester High School for Girls, 225 Mandelson, Peter, 24, 263 Mangan, Lucy, 76 Marks & Spencer, 243, 248 Martin’s Bank, 96, 122 Marx, Karl, 272–3 Mass Observation, 40 Maude, Angus, 37–9 Maxwell, Robert, 190–1, 201 Meacher, Michael, 182 medical schools, 212 Meeker, Mary, 133 Merrill Lynch, 139, 155 Merton, 211, 213 Metroland, 82 Mexico, 200 Michelangelo, 278 Middle Class Association, 37 Middle Class Defence Organisation, 38 Middle Class International, 38 Middle Class Union, 38 middle-class values, 13–14, 46–9 aspiration, 88, 234 authenticity, 242 confidence, 87 corrosion by financial sector, 154–6, 158–62 education, 14, 45–6, 49–50, 204 independence, 52, 69, 84, 86, 174, 283 internationalism, 163 moderation, 125, 160 thrift, 36, 39, 45, 49, 108, 120, 160, 169, 174, 195, 283, 301, 305 tolerance, 47, 274 middle classes and assimilation, 39 average incomes, 274 ‘casualisation’ of, 175 and children’s intelligence, 229–30 Cobbett’s description of, 282–3 definitions of, 39–45, 52 demography, 35–6 differences of taste within, 305 disapproval and embarrassment, 46–9 disparities of wealth within, 116 impoverishment, 267–72 in London, 41–2 and racism, 230 solidarity with working classes, 289–90 and status, 20, 267 vilification of working classes, 230, 287–8 Middle England, 39 middle managers, 255 Middleton, Peter, 182 Miliband, Ed, 22 miners’ strike, 148, 288 Mischel, Walter, 45 Moody-Stuart, Elizabeth, 211 Morgan, John Pierpont, 143 Morgan Grenfell, 135 Morgan Stanley, 133 Morris, Peter, 175 Morris, William, 255 Morrison, Steve, 205 mortgage interest tax relief, 61, 108–9, 182 mortgages, 14–15, 18, 20, 203, 270, 287, 290 and building societies, 71–2, 97–8, 101 ‘Grandparent Mortgages’, 75 and house-price inflation, 56–7, 60–1, 65–6 interest-only, 75, 171 and lack of choice, 82–4 and multiples of salaries, 75 and rents, 68–9 see also remortgaging Mount, Ferdinand, 26 Mrs Miniver, 275 Muesli Belt, 44, 83 Multis, 43 musicals, 44, 53 N nannies, 169 napkin rings, 39–40 Nasdaq index, 155 National Association of Pension Funds, 180, 184, 191 National Childbirth Trust, 73, 164–5 National Health Service (NHS), 85, 177, 180, 249, 253–4, 260, 267, 291 National Insurance, 181–2, 184 National Lottery, 221, 253 National Theatre, 125–6 National Trust cafés, 87–9, 163 Nationwide Building Society, 112–14, 119 NatWest, 30, 71, 96 Neill Report, 33 Nelson, Admiral Horatio, 198 Nether Wallop, 245–7 Netscape, 114 New Economics Foundation, 116 New Labour, 230 New Public Management, 263–4 New York, 78, 122, 186, 218 New York Stock Exchange, 155 newspapers, 253 Nikko, 149 noise complaints, 78 Nonconformists, 39 Norman, Montagu, 95 North Sea oil, 64, 279 Northern Ireland, 221 Northern Rock, 72, 101, 110, 112, 118 Northwood, 73 Nottingham, 225, 238, 295 nurseries, 19, 76–7, 299 O Oakwood High School, 224 Obama administration, 152 Observer, 110 Occupy movement, 289–90 Office of Fair Trading (OFT), 135–6 Ofsted, 205–6, 231, 269 oil prices, 59, 299 old age pensions, introduction of, 38, 172 Oliver, Jamie, 295 One Per Cent, the, 23–6, 45, 69, 121, 159, 161, 163, 165, 193 O’Neal, Stanley, 155 Orpington, 162 Osborne, David, 261 Outhwaite, Dick, 30–1 outsourcing, 23, 26, 41, 160, 248, 285 Owen, Wilfred, 234 Oxford University, 80, 88, 234 P Pahl, Ray, 49 Palmer, Alasdair, 175 Parents’ Charter, 222–3 Parkinson, Cecil, 137–8, 149 parks, 17 Patten, John, 224, 226–8, 238 Pawson, Andrew, 233 Pearce, Edward, 62 Penhaligon, David, 102–3 Penman, Andrew, 213–14 pensions, 167–203, 270, 281, 284–5, 290, 302 annuities, 172, 196–7 automatic enrolment, 202 average pot, 204 Brown’s tax on, 19, 194 Conservative reforms, 176–85 defined benefit vs. defined contribution, 175–6, 195–6 and home ownership, 14, 19, 21, 85, 200–1, 203 mis-selling of, 188 occupational, 172–3, 175, 178, 185, 188, 190–3, 196–7, 201–2 public sector pensions, 43, 192, 202, 253 SERPs, 179–84 state pensions, 81, 178, 200–1 surpluses, 193–4 Pepper, Gordon, 66 Perry, Grayson, 289, 297, 305 pets, 10 Pinchin Denny, 138 Pinsent Masons, 189 plutonomy, 25, 143, 152, 159–60 political economy, 48, 51 Popcorn, Faith, 83 post offices, closure of, 252 Post-Autistic Economics campaign, 157 Potosí, 279–80 Power, Michael, 257 ‘Precariat’, 17 Pride and Prejudice, 281–2 Priestley, J.


pages: 372 words: 92,477

The Fourth Revolution: The Global Race to Reinvent the State by John Micklethwait, Adrian Wooldridge

Admiral Zheng, affirmative action, Affordable Care Act / Obamacare, Asian financial crisis, assortative mating, banking crisis, barriers to entry, battle of ideas, Berlin Wall, Bernie Madoff, Boris Johnson, Bretton Woods, British Empire, cashless society, central bank independence, Chelsea Manning, circulation of elites, Clayton Christensen, Corn Laws, corporate governance, credit crunch, crony capitalism, Deng Xiaoping, Detroit bankruptcy, disintermediation, Edward Snowden, Etonian, failed state, Francis Fukuyama: the end of history, full employment, Gunnar Myrdal, income inequality, Khan Academy, Kickstarter, knowledge economy, Kodak vs Instagram, labor-force participation, laissez-faire capitalism, land reform, liberal capitalism, Martin Wolf, means of production, minimum wage unemployment, mittelstand, mobile money, Mont Pelerin Society, Nelson Mandela, night-watchman state, Norman Macrae, obamacare, oil shale / tar sands, old age dependency ratio, open economy, Parag Khanna, Peace of Westphalia, pension reform, pensions crisis, personalized medicine, Peter Thiel, plutocrats, Plutocrats, popular capitalism, profit maximization, rent control, rent-seeking, ride hailing / ride sharing, road to serfdom, Ronald Coase, Ronald Reagan, school choice, school vouchers, Silicon Valley, Skype, special economic zone, too big to fail, total factor productivity, War on Poverty, Washington Consensus, Winter of Discontent, working-age population, zero-sum game

Most of us in the West only know one model—the ever-expanding democratic state that has dominated our lives since the Second World War. However, history before then tells a different story. Indeed, Europe and America surged ahead precisely because they kept changing: Government was engaged in a continual process of improvement. Looking back, others might identify dozens of small revolutions, such as Thomas Cromwell’s “revolution in government” in Tudor England or Otto von Bismarck’s pension reforms in nineteenth-century Germany. In this book we simplify and argue that the Western state has been through three and a half great revolutions in modern times. The first took place in the seventeenth century, when Europe’s princes constructed centralized states that began to pull ahead of the rest of the world. In the 1640s, when a middle-aged royalist on the run called Thomas Hobbes produced his anatomy of the state against the background of the English Civil War there were good reasons to believe that the future lay with China or Turkey.

The finances of a lot of California cities still look precarious. But if even dysfunctional California can stir itself, surely there is hope for others? It is indeed possible to find a few flickers of hope: The region’s ability to recover from misfortune and repair its mistakes is still its most admirable feature. The euro crisis is forcing some badly managed countries to change: Italy passed a pretty impressive piece of pensions reform, and Spain has begun to tidy up its skewed labor market. In America more is going on at the state level than in Washington. Kansas has created a post called “the Repealer” to get rid of red tape and pays a “bounty” to high schools for every vocational qualification their students earn in certain fields. Forty-five states are developing new curriculums, thirty-eight have introduced a performance element in teachers’ pay, and forty-two allow charter schools.

., 236 International Monetary Fund (IMF), 15, 76, 90 Asian financial crisis and, 142–43 Internet, 191, 260 health care and, 208–9 self-help and, 209 Iran, China and, 152 Iraq, 253 Iraq War, 143, 253 Ireland, 38 public spending in, 99–100 Isabella I, Queen of Castile, 37 Islamic world: antiscientific attitudes in, 41 in sixteenth and seventeenth centuries, 35 Istanbul, 35 Italy, 196, 259 pension reform in, 130 politicians’ pay and benefits in, 115 public spending in, 99–100 voter apathy in, 12 It’s Even Worse Than It Looks (Mann and Ornstein), 125–26, 227 Jackson, Andrew, 55 Jacques, Martin, 163 Jagger, Mick, 90 James I, King of England, 31 James II, King of England, 43 Japan, 15, 17, 36 Jarvis, Howard, 91 Jay, Douglas, 77 Jiang Jiemin, 154 Jiang Zemin, 142 Johnson, Boris, 216–17 Johnson, Lyndon, 77, 80, 87 Joseph, Keith, 92, 93 Juncker, Jean-Claude, 128 Kamarck, Elaine, 131–32 Kangxi, Emperor of China, 40 Kansas, 130 Kant, Immanuel, 224 Kaplan, Robert, 144 Kapoor, Anish, 34 Kennedy, Joseph, 73 Kentucky Fried Chicken, 185 Kerry, John, 96 Keynes, John Maynard, 22, 69–70, 76, 97 pragmatism of, 70–71 Keynesianism, 71, 77, 83, 95 counterrevolution against, 82–84 Khan, Salman, 180 Khan Academy, 180 King, Martin Luther, Jr., 79 Kingsley, Charles, 58 Kirk, Russell, 85 Kissinger, Henry, 133, 136 Kleiner, Morris, 118 Knight, Frank, 84 Knowledge Is Power Program (KIPP), 215 Kocher, Robert, 200 Kotlikoff, Laurence J., 120 Kristol, Irving, 87 Kroc, Ray, 185 Labour Party, British, 68, 69, 70, 77, 93, 94–95, 114 laissez-faire economics, 56, 57, 61, 65–66, 70, 71 Laski, Harold, 68, 134 Latin America: economies of, 8 entitlement reform in, 17, 206, 244 Lazzarini, Sergio, 153 Lee Hsien Loong, 135, 138 Lee Kuan Yew, 4, 17, 53, 133–34, 137, 139–41, 143, 144, 145, 147, 156, 170, 183, 244 authoritarianism of, 137, 138 small-government ideology of, 140, 165 Left, 62, 73, 88, 183 government bloat and, 10–11, 98 government efficiency and, 20, 187, 213 and growth of big government, 10, 98, 131, 175, 185, 228, 230, 231 subsidy-cutting and, 234, 237–38 Lehman Brothers, 14 Lenovo, 150 Le Pen, Marine, 259 Le Roy, Louis, 276 Leviathan, 10 Leviathan (Hobbes), 29, 32, 33, 34, 42 Leviathan, Monumenta 2011 (Kapoor), 34 Liberal Party, British, 68, 70 liberals, liberalism: and debate over size of government, 48, 49, 232 freedom as core tenet of, 69, 223–26, 232 right to happiness as tenet of, 48, 49 role of state as seen by, 21–22, 222–23, 226, 232 see also Left; liberal state liberal state, 6–7, 8, 220, 221 capitalism and, 50–54 competition and, 247 education in, 7, 48, 58–59 equality and, 69 expanded role of government in, 56–62 Founding Fathers and, 44–45, 222 freedom as ideological basis of, 69, 223–26, 232, 268 industrial revolution and, 246–47 meritocracy as principle of, 50, 52–53 protection of rights as primary role of, 45 rights of citizens expanded by, 7, 9, 48, 49, 51 rise of, 27–28, 269 small government as principle of, 48, 49, 51–52, 61, 232 libertarian Right, 82 liberty, see freedom Libya, 253 LifeSpring Hospitals, 202–3 Lincoln, Abraham, 62, 92 Lindahl, Mikael, 176 Lindgren, Astrid, 170 Lisbon, Treaty of (2007), 258 Little Dorrit (Dickens), 50 Liu Xiaobo, 166 Livingston, Ken, 217 Lloyd George, David, 62 lobbies, Congress and, 238–40, 257 Locke, John, 42, 43, 45 social contract and, 42, 222 Logic of Collective Action, The (Olson), 111 London School of Economics, 67, 74 Louis XIV, King of France, 38 Lowe, Robert, 58–59 L.


pages: 471 words: 109,267

The Verdict: Did Labour Change Britain? by Polly Toynbee, David Walker

banking crisis, Big bang: deregulation of the City of London, Bob Geldof, Boris Johnson, call centre, central bank independence, congestion charging, Corn Laws, Credit Default Swap, decarbonisation, deglobalization, deindustrialization, Etonian, failed state, first-past-the-post, Frank Gehry, gender pay gap, Gini coefficient, high net worth, hiring and firing, illegal immigration, income inequality, Intergovernmental Panel on Climate Change (IPCC), knowledge economy, labour market flexibility, market bubble, mass immigration, millennium bug, moral panic, North Sea oil, Northern Rock, offshore financial centre, pension reform, plutocrats, Plutocrats, Ponzi scheme, profit maximization, purchasing power parity, Right to Buy, shareholder value, Skype, smart meter, stem cell, The Spirit Level, too big to fail, University of East Anglia, working-age population, Y2K

Private pensions were then the rage, for those who could afford them; others assumed their company schemes would provide; for the rest, the state minimum. Labour presided over an awakening. Occupational schemes had miscalculated the length of time they would have to pay out to pensioners surviving for longer and longer. Private pensions had been mis-sold, both literally to those induced to opt out of the state schemes and figuratively to those who had believed the patter about them paying off. In a parallel universe, pension reform might have been Labour’s forte. All pensions systems ultimately had to be social democratic; even the most ironclad free marketeer had to accept the need for state provision and tight regulation. But if reforms were to last, a measure of bipartisanship was needed. Things started badly when Labour were accused of damaging private pension funds in 1997 by adjusting a tax break on corporation tax.

With hindsight it probably was mildly damaging, but the funds’ rhetoric was overblown. So, too, were persistent allegations that pension entitlements being racked up by public-sector staff were over-generous. But the state was accumulating hundreds of billions in liabilities and the government obfuscated when it might have fought prejudice with facts about the relative remuneration enjoyed in public and private sectors and the small average size of public-sector pensions. Reforms were needed but Labour went AWOL. The biggest question confronting an ageing society was similar to that posed by Sir Nicholas Stern over climate change: how much would people cut consumption in the here and now for the sake of tomorrow? It was not one likely to be tackled by a government that believed its political fate depended on keeping the fires burning. The choice was either to save more now or extend working lives.

It was not compulsory to join the scheme – but it was reckoned inertia would ensure few people would opt out. The age of retirement would probably need to keep rising faster, with a review every four years to make sure pensions were keeping up with life expectancy. Later on, Labour tried to inject more equity into pensions by stopping the tax deductibility of pension contributions for those on higher earnings from 2011. Labour’s principal pension reforms were meant to address inequality. They introduced a future pension entitlement aimed at carers, disabled people and the low paid who had failed to accrue regular National Insurance pension rights. As many as twenty million people could gain extra post-retirement income in future if this reform were to stick. The Blair–Brown rivalry played out over pensions policy. If Tweedledum could win praise over child poverty, Tweedledee determined to earn his by promising to end poverty among pensioners.


pages: 376 words: 109,092

Paper Promises by Philip Coggan

accounting loophole / creative accounting, activist fund / activist shareholder / activist investor, balance sheet recession, bank run, banking crisis, barriers to entry, Berlin Wall, Bernie Madoff, Black Swan, Bretton Woods, British Empire, business cycle, call centre, capital controls, Carmen Reinhart, carried interest, Celtic Tiger, central bank independence, collapse of Lehman Brothers, collateralized debt obligation, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency peg, debt deflation, delayed gratification, diversified portfolio, eurozone crisis, Fall of the Berlin Wall, falling living standards, fear of failure, financial innovation, financial repression, fixed income, floating exchange rates, full employment, German hyperinflation, global reserve currency, hiring and firing, Hyman Minsky, income inequality, inflation targeting, Isaac Newton, John Meriwether, joint-stock company, Kenneth Rogoff, Kickstarter, labour market flexibility, light touch regulation, Long Term Capital Management, manufacturing employment, market bubble, market clearing, Martin Wolf, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, mortgage debt, Myron Scholes, negative equity, Nick Leeson, Northern Rock, oil shale / tar sands, paradox of thrift, peak oil, pension reform, plutocrats, Plutocrats, Ponzi scheme, price stability, principal–agent problem, purchasing power parity, quantitative easing, QWERTY keyboard, railway mania, regulatory arbitrage, reserve currency, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Reagan, savings glut, short selling, South Sea Bubble, sovereign wealth fund, special drawing rights, The Chicago School, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Wealth of Nations by Adam Smith, time value of money, too big to fail, trade route, tulip mania, value at risk, Washington Consensus, women in the workforce, zero-sum game

The pension burden can also be cut by reducing the extent of inflation-linking. Britain has already made this move, announcing that public-sector pensions will increase in line with the consumer price index, rather than the retail price index. The former tends to rise by around 0.7 per cent a year less than the latter. This change may reduce the government’s pension bill by 10 per cent or so. Indeed the proposed British pension reforms for the public sector involved a combination of different measures – as well as a change in inflation-linking, the government also planned to make public-sector workers retire at the state pension age (rather than at sixty), switch them to career-average schemes and increase the level of their contributions. This quadruple whammy prompted a strike in late June 2011 and further disputes looked inevitable.

Mohanty and Fabrizio Zampolli, ‘The Future of Public Debt: Prospects and Implications’, Bank for International Settlements, Working Papers 300. 21 Quoted in Arnaud Mares, ‘Ask Not Whether Governments Will Default, But How’, Morgan Stanley research note, 20 September 2010. 22 Irving Fisher, ‘The Debt-Deflation Theory of Great Depressions’, Econometrica , 1 (4), 1933. 23 Reinhart and Rogoff, in ‘Ask Not Whether Governments Will Default’. 24 For a sweeping critique, see John Irons and Josh Bivens, ‘Government Debt and Economic Growth: Overreaching Claims of Debt “Threshold” Suffer from Theoretical and Empirical Flaws’, Economic Policy Institute briefing paper no. 271, July 2010. 25 Antonio Afonso and Davide Furceri, ‘Government Size, Composition, Volatility and Economic Growth’, School of Economics and Management, Technical University of Lisbon, working paper ISSN 0874-4548, January 2008. 11 . BEQUEATHING OUR DEBTS 1 ‘Global Demographics – From Golden to Grey, Long-Term Asset Return Study’, Deutsche Bank, 10 September 2010. 2 Quoted in David Willetts, The Pinch: How the Baby Boomers Took Their Children’s Future – And Why They Should Give it Back, London, 2010. 3 Ibid. 4 Martin Neil Baily and Jacob Funk Kirkegaard, ‘US Pensions Reform: Lessons from Other Countries’, Peterson Institute for International Economics, 2009. 5 ‘Global Demographics’. 6 ‘Global Aging 2010: An Irreversible Truth’. 7 Eileen Norcross and Andrew Biggs, ‘The Crisis in Public Sector Pension Plans: A Blueprint for Reform in New Jersey’, http:://mercatus.org/pensions. 8 Robert Novy-Marx and Joshua Rauh, ‘Public Pension Promises: How Big Are They and What Are They Worth?’

., 2010. 11 A long-standing deal has seen Americans head the World Bank and Europeans the IMF. 12 Carmen Reinhart and Belen Sbrancia, ‘The Liquidation of Government Debt’, NBER Working Paper 16893, March 2011. 13 Russell Napier, ‘Bretton Woods on Speed’, CLSA research note, November 2010. Bibliography Some suggestions for further reading: Acharya, Viral and Richardson, Matthew, eds, Restoring Financial Stability: How to Repair a Failed Financial System, New York, 2009. Ahamed, Liaquat, Lords of Finance: 1929, the Great Depression and the Bankers Who Broke the World, London, 2009. Baily, Martin Neil and Kirkegaard, Jacob Funk, US Pension Reform: Lessons from Other Countries, Washington, DC, 2009. Barbera, Robert J., The Cost of Capitalism: Understanding Market Mayhem and Stabilizing Our Economic Future, New York, 2009. Belloc, Hilaire, Usury, London, 1931. Bernholz, Peter, Monetary Regimes and Inflation: History, Economic and Political Relationships, Cheltenham, 2003. Bootle, Roger, The Death of Inflation: Surviving and Thriving in the Zero Era, London, 1996.


pages: 352 words: 107,280

Good Times, Bad Times: The Welfare Myth of Them and Us by John Hills

Capital in the Twenty-First Century by Thomas Piketty, credit crunch, Donald Trump, falling living standards, full employment, Gini coefficient, income inequality, income per capita, longitudinal study, mortgage debt, pension reform, plutocrats, Plutocrats, precariat, quantitative easing, Right to Buy, unpaid internship, very high income, We are the 99%, working-age population, World Values Survey

The chapter looks at what national wealth inequality now looks like, and at how it differs, both between different generations and within those generations. Is the key issue wealth inequality between generations, such as the ‘baby boomers’ and the rest, or is it inequality within each generation? It examines two kinds of policies concerned with how the state helps people accumulate resources over their lives: pensions policy, and the rationale for the recent wave of pension reforms in the UK; and the other hugely varied (and often contradictory) range of policies that affect or are affected by the way people accumulate wealth and other assets. Chapter 7 then looks at financial and other links across the generations. Given their very different family backgrounds, what do the life chances look like of young George Ackroyd compared to those of young Edward Osborne, both born in July 2013?

Also, as the middle panel of Figure 6.3 showed, the wealthiest quarter of pensioners have non-pension wealth of £300,000 or more, including financial wealth of more than £100,000 (2008–10 figures). One response is to argue that pensions – and other extra payments to pensioners, such as Winter Fuel Payments or free TV licences for the oldest pensioners – should become means tested. But we have just been through a series of major pension reforms designed, with widespread support, to reduce the spread of means testing in old age. This reached its logical conclusion with the flat-rate ‘single tier pension’ introduced by the Coalition for those reaching pension age from 2016, set at a level that will carry most clear of means testing. This was for good reasons, given the public interest in there being clear benefits to people from providing for part of their own income in retirement.

Figure 8.9: ONS projections for percentage of population in each age range, 2011 and 2051 That people are living longer is good news. But in combination with the age-related patterns of demands on the welfare state of the kind shown in Figure 3.5 in Chapter 3, this means a large increase in what we would expect to have to spend in the future, if we carry on treating people of a given age in the same way as we do now. The independent OBR looks each year at what pressures of this kind – alongside other factors such as pension reforms already under way – would mean for future public spending. The results of its 2013 exercise are shown in Figure 8.10. Such projections are, of course, vastly uncertain – we cannot be at all precise about how the age structure of the population will actually evolve over the coming decades, and many features of the welfare state are bound to change, as they have in the last 50 years. But the projections do give an idea of the scale of the problem.


pages: 777 words: 186,993

Imagining India by Nandan Nilekani

addicted to oil, affirmative action, Airbus A320, BRICs, British Empire, business process, business process outsourcing, call centre, clean water, colonial rule, corporate governance, cuban missile crisis, deindustrialization, demographic dividend, demographic transition, Deng Xiaoping, digital map, distributed generation, farmers can use mobile phones to check market prices, full employment, ghettoisation, glass ceiling, global supply chain, Hernando de Soto, income inequality, informal economy, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), joint-stock company, knowledge economy, land reform, light touch regulation, LNG terminal, load shedding, low cost airline, Mahatma Gandhi, market fragmentation, mass immigration, Mikhail Gorbachev, Network effects, new economy, New Urbanism, open economy, Parag Khanna, pension reform, Potemkin village, price mechanism, race to the bottom, rent control, rolodex, Ronald Reagan, school vouchers, Silicon Valley, smart grid, special economic zone, The Wealth of Nations by Adam Smith, Thomas L Friedman, Thomas Malthus, transaction costs, trickle-down economics, unemployed young men, upwardly mobile, urban planning, urban renewal, women in the workforce, working poor, working-age population

The shift to the defined-contribution scheme affected the take-home salaries of civil servants without creating an uproar—an unimaginable political win. But once the government changed after the unexpected election rout of the NDA government in May, the progress toward the pension reform came to a standstill. While it got Chidambaram’s support, he was bent on getting legislation introducing the pension regulator through parliament, which stalled when the left parties opposed it. Chidambaram waited and finally, in exasperation at two and a half years of stalling, decided to start work on the scheme without legislation. The opponents of the bill have been furious with the finance minister ever since and have labeled it “Chidambaram’s pension reform,” implying that he is working on it without the parliament’s aye. With all the committee meetings and changes in government, Gautam says, “The NPS reforms have got delayed by a decade.”

“There was a familiar tendency among company management to make long-term promises they did not have to fulfill personally,” Marty says. “They made these promises without an idea where their revenues would stand. In some ways, these disasters were inevitable.” Our great, big growth advantage As Surendra Dave notes, one of the first things the Indian economists in the committee working on pension reforms did was study the failure of these social security systems in the West. India, in shaping a universal social insurance scheme so late in the game, had a great opportunity to survey the disasters gone past and frame a better policy. At the very least, the challenges developed markets are facing around pensions and social security tell us “what not to do”—which mechanisms, for example, trigger health carelessness, low savings and high future taxes.

In 2004 the Indian government, with the Sensex at 5,000 points, proposed that 10 percent of pension funds be pumped into equities. We entered 2008 with the stock market having risen more than three times that, but with the shift yet to be made. Even after its steep falls in September 2008, a fund that had invested money in 2004 would have turned in good returns. The stock market is expected to touch $5 trillion by 2020, and we are still stalling. A BIG CHALLENGE to pension reforms and a sustainable social security policy is the danger of politics creeping in. What our experiences and those of developed markets make clear is that a universal scheme, to be effective and sustainable, must be insulated from political compulsions as much as possible. Otherwise, long-term funds become easy prey for election-minded governments and end up getting tweaked and changed and overhauled, especially in times of low growth.


pages: 304 words: 22,886

Nudge: Improving Decisions About Health, Wealth, and Happiness by Richard H. Thaler, Cass R. Sunstein

Al Roth, Albert Einstein, asset allocation, availability heuristic, call centre, Cass Sunstein, choice architecture, continuous integration, Daniel Kahneman / Amos Tversky, desegregation, diversification, diversified portfolio, endowment effect, equity premium, feminist movement, fixed income, framing effect, full employment, George Akerlof, index fund, invisible hand, late fees, libertarian paternalism, loss aversion, Mahatma Gandhi, Mason jar, medical malpractice, medical residency, mental accounting, meta analysis, meta-analysis, Milgram experiment, money market fund, pension reform, presumed consent, price discrimination, profit maximization, rent-seeking, Richard Thaler, Right to Buy, risk tolerance, Robert Shiller, Robert Shiller, Saturday Night Live, school choice, school vouchers, transaction costs, Vanguard fund, Zipcar

“Strategy Fads and Strategic Positioning: An Empirical Test for Herd Behavior in Prime-Time Television Programming.” Journal of Industrial Economics 50 (2002): 57–84. Kessler, Daniel, and Mark McClellan. “Do Doctors Practice Defensive Medicine?” Quarterly Journal of Economics 111 (1996): 353–90. Ketchum, Christopher. “Enron’s Human Toll.” Salon.com, January 23, 2002. http://archive.salon.com/tech/feature/2002/01/23/enron_toll/index1.html. Klevmarken, N. Anders, “Swedish Pension Reforms in the 1990s.” April 2002. http://www.nek.uu.se/Pdf/wp2002_6.pdf. Kling, Jeffrey, Sendhil Mullainathan, Eldar Shafir, Lee Vermeulen, and Marian Wrobel. “Choosing Well: The Case of Medicare Drug Plans.” Working paper, Harvard University, August 2007. Koehler, Jay, and Caryn Conley. “The ‘Hot Hand’ Myth in Professional Basketball.” Journal of Sport and Exercise Psychology 25 (2003): 253–59.

Michigan Journal of Gender and Law 10 (2003): 169–88. Nordhaus, William D. “The Stern Review on the Economics of Climate Change.” Journal of Economic Literature 45 (2007): 686–702. Nordhaus, William D., and Joseph Boyer. Warming the World: Economic Models of Global Warming. Cambridge: MIT Press, 2000. Norman, Donald. The Design of Everyday Things. Sydney: Currency, 1990. Normann, Goran, and Daniel J. Mitchell. “Pension Reform in Sweden: Lessons for American Policymakers.” Heritage Foundation Backgrounder no. 1381, 2000. http://www.heritage.org/Research/SocialSecurity/bg1381.cfm. O’Donoghue, Ted, and Matthew Rabin. “Doing It Now or Later.” American Economic Review 89, no. 1 (1999): 103–24. ———. “Studying Optimal Paternalism, Illustrated by a Model of Sin Taxes.” American Economic Review 93, no. 2 (2003): 186–91.


pages: 353 words: 98,267

The Price of Everything: And the Hidden Logic of Value by Eduardo Porter

Alvin Roth, Asian financial crisis, Ayatollah Khomeini, banking crisis, barriers to entry, Berlin Wall, British Empire, capital controls, Carmen Reinhart, Cass Sunstein, clean water, Credit Default Swap, Deng Xiaoping, Edward Glaeser, European colonialism, Fall of the Berlin Wall, financial deregulation, Ford paid five dollars a day, full employment, George Akerlof, Gordon Gekko, guest worker program, happiness index / gross national happiness, housing crisis, illegal immigration, immigration reform, income inequality, income per capita, informal economy, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Jean Tirole, John Maynard Keynes: technological unemployment, Joshua Gans and Andrew Leigh, Kenneth Rogoff, labor-force participation, laissez-faire capitalism, longitudinal study, loss aversion, low skilled workers, Martin Wolf, means of production, Menlo Park, Mexican peso crisis / tequila crisis, Monkeys Reject Unequal Pay, new economy, New Urbanism, peer-to-peer, pension reform, Peter Singer: altruism, pets.com, placebo effect, price discrimination, price stability, rent-seeking, Richard Thaler, rising living standards, risk tolerance, Robert Shiller, Robert Shiller, Ronald Reagan, Silicon Valley, stem cell, Steve Jobs, Stewart Brand, superstar cities, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, trade route, transatlantic slave trade, ultimatum game, unpaid internship, urban planning, Veblen good, women in the workforce, World Values Survey, Yom Kippur War, young professional, zero-sum game

The reason for America’s prolificacy could also be that pensions in the United States are particularly stingy, making kids more useful as old-age insurance. A typical worker in the United States receives as little as 40 percent of his or her last wages from Social Security. European pensions are more generous. In Italy, fertility started rising slowly in 1996 after plummeting for ages. Perhaps not coincidentally, that was the year in which pension reform kicked in, reducing the payments promised to younger workers from 80 percent of their last wage to only 65 percent. Indeed, economists found that the odds of having a kid rose 10 percent for those workers who had their pensions cut, relative to those who hadn’t. But the most convincing explanation seems to be that the United States has been better at accommodating work and childbearing than other nations.

storyId=102005062&ft=1&f=1001, accessed 07/18/2010). Data on government pension replacement rates and their impact on fertility comes from Olivia S. Mitchell and John W. R. Phillips, “Social Security Replacement Rates for Alternative Earnings Benchmarks,” University of Michigan Retirement Research Center Working Paper, May 2006; and Francesco C. Billari and Vincenzo Galasso, “What Explains Fertility? Evidence from Italian Pension Reforms,” CEPR Discussion Paper, October 2008. Arguments about work’s impact on fertility in Europe are drawn from Bruce Sacerdote and James Feyrer, “Will the Stork Return to Europe and Japan? Understanding Fertility Within Developed Nations,” NBER Working Paper, June 2008; and Samuel Preston and Caroline Sten Hartnett, op. cit. Evidence of the financial benefits of marriage is found in Martin Browning, Pierre-André Chiappori, and Arthur Lewbel, “Estimating Consumption Economies of Scale, Adult Equivalence Scales, and Household Bargaining Power,” Economics Series Working Paper, Oxford University Department of Economics, August 2006; Graziella Bertocchi and Marianna Brunetti, “Marriage and Other Risky Assets: A Portfolio Approach,” CEPR Discussion Paper, February 2009; Libertad González and Berkay Özcan, “The Risk of Divorce and Household Saving Behavior,” IZA Working Paper, September 2008.


pages: 261 words: 103,244

Economists and the Powerful by Norbert Haring, Norbert H. Ring, Niall Douglas

"Robert Solow", accounting loophole / creative accounting, Affordable Care Act / Obamacare, Albert Einstein, asset allocation, bank run, barriers to entry, Basel III, Bernie Madoff, British Empire, buy and hold, central bank independence, collective bargaining, commodity trading advisor, corporate governance, creative destruction, credit crunch, Credit Default Swap, David Ricardo: comparative advantage, diversified portfolio, financial deregulation, George Akerlof, illegal immigration, income inequality, inflation targeting, information asymmetry, Jean Tirole, job satisfaction, Joseph Schumpeter, Kenneth Arrow, knowledge worker, law of one price, light touch regulation, Long Term Capital Management, low skilled workers, mandatory minimum, market bubble, market clearing, market fundamentalism, means of production, minimum wage unemployment, moral hazard, new economy, obamacare, old-boy network, open economy, Pareto efficiency, Paul Samuelson, pension reform, Ponzi scheme, price stability, principal–agent problem, profit maximization, purchasing power parity, Renaissance Technologies, rolodex, Sergey Aleynikov, shareholder value, short selling, Steve Jobs, The Chicago School, the payments system, The Wealth of Nations by Adam Smith, too big to fail, transaction costs, ultimatum game, union organizing, Vilfredo Pareto, working-age population, World Values Survey

As a minimum, they would need to be strictly prohibited from doing private business with or taking favors from investment managers. There are plenty of examples from other countries to copy: the US individual retirement account system is based on the Chilean pension reform of 1980/81 that in turn was based heavily on proposals made in the book Capitalism and Freedom by Milton Friedman. In response to the Chilean system facing a likely collapse in a few decades time, it was substantially overhauled in 2008 to require mandatory participation of all citizens in exchange for universal pension coverage. Another example is that of Sweden, which enacted a series of very famous pension reforms in 58 ECONOMISTS AND THE POWERFUL 1998 followed by refinements in 2010 – there an individual’s personal retirement account defaults to an age-determined mix of an equity index tracking fund and a fixed income fund, but that can be switched at any time into any other investment by its owner.


pages: 900 words: 241,741

Total Recall: My Unbelievably True Life Story by Arnold Schwarzenegger, Peter Petre

Berlin Wall, California gold rush, call centre, clean water, cleantech, Donald Trump, financial independence, Golden Gate Park, illegal immigration, index card, Maui Hawaii, Mikhail Gorbachev, Nelson Mandela, oil shale / tar sands, pension reform, risk tolerance, rolodex, Ronald Reagan, Saturday Night Live, Silicon Valley, stem cell, Y2K

Teachers, firefighters, and cops quickly joined the nurses protesting at my public appearances. Every time I arrived at an event, they’d be out there, waving signs, booing, chanting, and ringing cowbells. The unions formed coalitions with names like the Alliance for a Better California and started pouring millions of dollars into TV and radio ads. One commercial featured a firefighter who was convinced that my pension reforms would take away benefits to widows and orphans. Another showed teachers and PTA members saying how disappointed they were with me for trying to put California’s budget troubles on the backs of the kids. The heat of the protests surprised me, but the reforms were too important to give up. My spokesman told the press, “Our door will be open twenty-four hours a day to any Democrat who is serious about negotiating.

I coaxed legislative leaders of both parties to go along with me, and they all paid a price. The Democrats, senate leader Darrell Steinberg and assembly speaker Karen Bass, made themselves wildly unpopular with the liberals by agreeing to support open primary elections as well as even more welfare reforms—removing things like automatic cost of living increases. They enraged the public-employee unions by agreeing both to pension reform and to another condition I insisted on: the creation (at last!) of a strict rainy-day fund that could be used only in a true emergency. The Republican leaders paid an even higher price. The party stripped State Senator Dave Cogdill of his leadership position the night of the vote and forced Mike Villines, the assembly Republican leader, out of his post a few weeks later—all because they had accepted a compromise that included a tax increase.

I was disappointed when I learned that my successor, Governor Jerry Brown, signed a bill to remove those reforms from the 2012 ballot at the behest of Democrats and labor unions. The polls had shown it headed for a landslide victory this time, with 84 percent planning to vote yes, according to the reform group the Think Long Committee for California. In the end, politics as usual produced a tax increase with no real safeguards to restrict further spending. And now the budget reform initiative will not be voted on until 2014. In the fall, I signed a historic pension reform that rolled back some of the worst excesses threatening to bankrupt the state. By cutting a lot of red tape, we issued permits for so many solar power plants in California—more than 5,000 megawatts in 2009 alone (one hundred times all the solar permitted in the United States a year earlier)—that California was being called the Saudi Arabia of Solar. California is now on track to build not just the most but also the largest solar projects in the world.


pages: 368 words: 32,950

How the City Really Works: The Definitive Guide to Money and Investing in London's Square Mile by Alexander Davidson

accounting loophole / creative accounting, algorithmic trading, asset allocation, asset-backed security, bank run, banking crisis, barriers to entry, Big bang: deregulation of the City of London, buy and hold, capital asset pricing model, central bank independence, corporate governance, Credit Default Swap, dematerialisation, discounted cash flows, diversified portfolio, double entry bookkeeping, Edward Lloyd's coffeehouse, Elliott wave, Exxon Valdez, forensic accounting, global reserve currency, high net worth, index fund, inflation targeting, intangible asset, interest rate derivative, interest rate swap, John Meriwether, London Interbank Offered Rate, Long Term Capital Management, margin call, market fundamentalism, Nick Leeson, North Sea oil, Northern Rock, pension reform, Piper Alpha, price stability, purchasing power parity, Real Time Gross Settlement, reserve currency, Right to Buy, shareholder value, short selling, The Wealth of Nations by Adam Smith, transaction costs, value at risk, yield curve, zero-coupon bond

In this book, we will try to see whether it lives up to its claim, and how well it will stand a market downturn. I will explain how the London insurance market, including Lloyd’s, works. There is a new chapter on reinsurance, which covers the impact of catastrophes such as Hurricane Katrina in 2005, and how insurers have started to tap capital markets for extra reinsurance capacity. In personal finance, we will take a critical look at pension reform, and controversies related to sales of payment protection insurance. We look at current thinking on mortgages. Elsewhere, we compare types of pooled investment. Since the first edition was published, regulation and corporate governance have evolved, and this book covers how they work today. We focus on the role of the Financial Services Authority and the development of its principles-based regulatory regime, which is not always helped by the onset of EU financial services legislation.

As an employee, you are included in the state second pension, unless you contract out, which is to give up the entitlement and build up a sum instead in your own pension fund. HM Revenue and Customs rebate part of your National Insurance contributions into your personal pension. You are free to contract back in. State pension package The Pensions Act 2007, which received Royal Assent in July 2007, is mainly about state pension reform. It has three strands. People will receive the state pension later than before. This will be on a phased basis. In 2024–26, they will start taking the pension at the age of 65–66, and in 2034–36, they will start at the age of 66–67. In 2044–46, they will take it at the age of 67–68 years. The basic state pension rises every year with the Retail Prices Index. From 2012 or slightly later, it will rise instead by earnings, which should make the pension more generous.


pages: 409 words: 118,448

An Extraordinary Time: The End of the Postwar Boom and the Return of the Ordinary Economy by Marc Levinson

affirmative action, airline deregulation, banking crisis, Big bang: deregulation of the City of London, Boycotts of Israel, Bretton Woods, business cycle, Capital in the Twenty-First Century by Thomas Piketty, car-free, Carmen Reinhart, central bank independence, centre right, clean water, deindustrialization, endogenous growth, falling living standards, financial deregulation, floating exchange rates, full employment, George Gilder, Gini coefficient, global supply chain, income inequality, income per capita, indoor plumbing, informal economy, intermodal, invisible hand, Kenneth Rogoff, knowledge economy, late capitalism, linear programming, manufacturing employment, new economy, Nixon shock, North Sea oil, oil shock, Paul Samuelson, pension reform, price stability, purchasing power parity, refrigerator car, Right to Buy, rising living standards, Robert Gordon, rolodex, Ronald Coase, Ronald Reagan, Simon Kuznets, statistical model, strikebreaker, structural adjustment programs, The Rise and Fall of American Growth, Thomas Malthus, total factor productivity, unorthodox policies, upwardly mobile, War on Poverty, Washington Consensus, Winter of Discontent, Wolfgang Streeck, women in the workforce, working-age population, yield curve, Yom Kippur War, zero-sum game

On the appeal of social spending to economic planners, see Hans-Peter Ullmann, “Im ‘Strudel der Maßlosigkeit’? Die ‘Erweiterung des Staatskorridors’ in der Bundesrepublik der sechziger bis achtziger Jahre,” Geschichte und Gesellschaft 22 (2006): 255–263, and Werner Ehrlicher, “Deutsche Finanzpolitik seit 1945,” VSWG: Vierteljahrschrift für Sozial-und Wirtschaftsgeschichte 81 (1994): 10–19. 19. On the changes in Italy, see Daniele Franco, “A Never-Ending Pension Reform,” in Martin Feldstein and Horst Siebert, eds., Social Security Pension Reform in Europe (Chicago: University of Chicago Press, 2002), 213–214. 20. Data on food stamps from US Department of Agriculture Food and Nutrition Service, at www.fns.usda.gov/sites/default/files/pd/SNAPsummary.pdf, viewed June 1, 2015. 21. The average retirement age for women in the OECD countries fell from 63.4 years in 1970 to 61.4 in 1980; the average retirement age for men in OECD countries dropped from 65 years to 63.3 during the same time period.


pages: 424 words: 115,035

How Will Capitalism End? by Wolfgang Streeck

accounting loophole / creative accounting, Airbnb, basic income, Ben Bernanke: helicopter money, Bretton Woods, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, centre right, Clayton Christensen, collective bargaining, conceptual framework, corporate governance, creative destruction, credit crunch, David Brooks, David Graeber, debt deflation, deglobalization, deindustrialization, disruptive innovation, en.wikipedia.org, eurozone crisis, failed state, financial deregulation, financial innovation, first-past-the-post, fixed income, full employment, Gini coefficient, global reserve currency, Google Glasses, haute cuisine, income inequality, information asymmetry, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, Kenneth Rogoff, labour market flexibility, labour mobility, late capitalism, liberal capitalism, market bubble, means of production, moral hazard, North Sea oil, offshore financial centre, open borders, pension reform, plutocrats, Plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, post-industrial society, private sector deleveraging, profit maximization, profit motive, quantitative easing, reserve currency, rising living standards, Robert Gordon, savings glut, secular stagnation, shareholder value, sharing economy, sovereign wealth fund, The Future of Employment, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, transaction costs, Uber for X, upwardly mobile, Vilfredo Pareto, winner-take-all economy, Wolfgang Streeck

However, while this should make them interested in states being, if not debt-free, then reliably able to fulfil their obligations to their creditors, it may also mean that they have to pay for their government’s liquidity in the form of deep cuts in public benefits and services on which they also in part depend. However complicated the cross-cutting cleavages in the emerging international politics of public debt, the price for financial stabilization is likely to be paid by those other than the owners of money, or at least of real money. For example, public pension reform will be accelerated by fiscal pressures; and to the extent that governments default anywhere in the world, private pensions will be hit as well. The average citizen will pay – for the consolidation of public finances, the bankruptcy of foreign states, the rising rates of interest on the public debt and, if necessary, for another rescue of national and international banks – with his or her private savings, cuts in public entitlements, reduced public services and higher taxation.

This process is expected to continue, assisted by deep changes in political-economic institutions which, for example, prevent the central bank from accommodating an expansionary fiscal policy: The medium-term financial forecast of the Swedish government for the years 2013–2015 projected surpluses of up to three percent of GDP … The estimated annual surplus is up to three percent of GDP. The improvement of the budget balance would be achieved solely by expenditure cuts and not by revenue increases.59 The economic downturn after 2011 did not cause a rethinking of fiscal priorities. Transition from high to low taxing and spending was accomplished, among other things, by a pension reform (1994/1998) that has made the pension system ‘completely independent financially from the budget. There is no longer any cross-subsidization from the public purse to the pension funds’ (ibid.: 17). In spite of the fiscal surplus, pensions were cut in 2010 and will be further cut in future, in line with expected shortfalls in revenue due to demographic change. There also was what was called the ‘tax reform of the century’ in 1990 and 1991, which contributed to the fiscal crisis of the early 1990s and helped justify the subsequent cuts in public expenditure.


pages: 131 words: 41,052

Why Europe Will Run the 21st Century by Mark Leonard

Berlin Wall, Celtic Tiger, continuous integration, cuban missile crisis, different worldview, European colonialism, facts on the ground, failed state, global reserve currency, invisible hand, knowledge economy, mass immigration, non-tariff barriers, North Sea oil, one-China policy, Panopticon Jeremy Bentham, pension reform, reserve currency, Robert Gordon, shareholder value, South China Sea, The Wealth of Nations by Adam Smith, Thomas Malthus, trade liberalization, Washington Consensus

Every study has shown that the simple move of raising the retiring age can immediately remove the ticking time bomb of growing dependency ratios.18 The European Commission forecasts that if member-states succeed in raising the average retirement age by five years from sixty to sixty-five, without raising benefits, the cost of Europe’s pension system would remain stable.19 This is a painful political challenge, but it is one that all European governments are already grappling with, through pension reforms – many based on a Swedish template – that will reduce the fiscal pressures from population ageing and encourage longer working lives. Another partial solution to Europe’s demographic dilemma is the move towards supporting ‘managed migration’ that has taken hold across Europe. All European countries are now ending their blanket ban on economic migration and developing criteria for admitting labour migrants based on qualifications or salary.


Battling Eight Giants: Basic Income Now by Guy Standing

basic income, Bernie Sanders, centre right, collective bargaining, decarbonisation, diversified portfolio, Donald Trump, Elon Musk, full employment, future of work, Gini coefficient, income inequality, Intergovernmental Panel on Climate Change (IPCC), job automation, labour market flexibility, Lao Tzu, longitudinal study, low skilled workers, Martin Wolf, Mont Pelerin Society, moral hazard, North Sea oil, offshore financial centre, open economy, pension reform, precariat, quantitative easing, rent control, Ronald Reagan, selection bias, universal basic income, Y Combinator

In the 1920s, the idea was seen as an issue for cranks and utopians. By 1946, every British family with more than one child was receiving a family allowance. (2) A basic income is unaffordable. Some politicians and commentators have asserted that a basic income would be unaffordable without a big rise in direct taxes. These calculations assume that basic income from the outset would replace all existing benefits. However, like pension reform and other changes to the social protection system, basic income could be introduced gradually. There would still be savings from a reduction in meanstested benefit payments.7 And there are other ways of paying for a Why Basic Income Beats the Alternatives 57 basic income without sharp increases in income tax, including from a Commons Fund. That said, there is scope for tax increases. The tax take in Britain is 35% of GDP, which is low by past standards and by comparison with other comparable countries.


pages: 412 words: 128,042

Extreme Economies: Survival, Failure, Future – Lessons From the World’s Limits by Richard Davies

agricultural Revolution, air freight, Anton Chekhov, artificial general intelligence, autonomous vehicles, barriers to entry, big-box store, cashless society, clean water, complexity theory, deindustrialization, eurozone crisis, failed state, financial innovation, illegal immigration, income inequality, informal economy, James Hargreaves, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, joint-stock company, large denomination, Livingstone, I presume, Malacca Straits, mandatory minimum, manufacturing employment, means of production, megacity, meta analysis, meta-analysis, new economy, off grid, oil shale / tar sands, pension reform, profit motive, randomized controlled trial, school choice, school vouchers, Scramble for Africa, side project, Silicon Valley, Simon Kuznets, Skype, spinning jenny, The Chicago School, the payments system, trade route, Travis Kalanick, uranium enrichment, urban planning, wealth creators, white picket fence, working-age population, Y Combinator, young professional

The ancestor household in Japan; respect for elders On the concepts of oyakoko and ie in the ancestor household, see Yoshimitsu (2011). For the impact of Confucian concepts on economic outcomes – for example, corporation organization – see Nakane (1970) and Kumagai (1992). Intergenerational inequality A recent review of intergenerational equity is given by Motoshige (2013). An early paper on the risk pension reforms posed to Japanese notions of solidarity is Takahashi (2004). On government programmes that aim to bring generations together, see Larkin and Kaplan (2010). The two samurai Oda Nobunaga, born in 1534, played an important role in unifying Japan. A deft ruler also known as an economic strategist, he destroyed many opponents and competitors and was assassinated in 1582, aged 47. Tokugawa Ieyasu, born in 1543, was another of Japan’s unifiers.

Statistical Handbook of Japan 2018 (2018), (Tokyo: Statistics Bureau, Ministry of Internal Affairs and Communications). Takahashi, K., Tokoro, M., and Hatano, G. (2011), ‘Successful Aging through Participation in Social Activities Among Senior Citizens: Becoming Photographers’, in Matsumoto, Y. (ed.), Faces of Aging: The Lived Experiences of the Elderly in Japan (Stanford: Stanford University Press). Takahashi, M. (2004), ‘The Social Solidarity Manifested in Japan’s Pension Reforms’, Shimane Journal of Policy Studies, 8, 125–42. Traphagan, J. W. (2004), ‘Interpretations of Elder Suicide, Stress, and Dependency Among Rural Japanese’, Ethnology, 43 (4), 315–29. Ueno, C. (2009), The Modern Family in Japan: Its Rise and Fall (Melbourne: Trans Pacific Press). United Nations (2017), World Population Prospects: The 2017 Revision, Key Findings and Advance Tables, ESA/P/WP/248 (New York: United Nations).


pages: 537 words: 144,318

The Invisible Hands: Top Hedge Fund Traders on Bubbles, Crashes, and Real Money by Steven Drobny

Albert Einstein, Asian financial crisis, asset allocation, asset-backed security, backtesting, banking crisis, Bernie Madoff, Black Swan, Bretton Woods, BRICs, British Empire, business cycle, business process, buy and hold, capital asset pricing model, capital controls, central bank independence, collateralized debt obligation, commoditize, Commodity Super-Cycle, commodity trading advisor, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency peg, debt deflation, diversification, diversified portfolio, equity premium, family office, fiat currency, fixed income, follow your passion, full employment, George Santayana, Hyman Minsky, implied volatility, index fund, inflation targeting, interest rate swap, inventory management, invisible hand, Kickstarter, London Interbank Offered Rate, Long Term Capital Management, market bubble, market fundamentalism, market microstructure, moral hazard, Myron Scholes, North Sea oil, open economy, peak oil, pension reform, Ponzi scheme, prediction markets, price discovery process, price stability, private sector deleveraging, profit motive, purchasing power parity, quantitative easing, random walk, reserve currency, risk tolerance, risk-adjusted returns, risk/return, savings glut, selection bias, Sharpe ratio, short selling, sovereign wealth fund, special drawing rights, statistical arbitrage, stochastic volatility, stocks for the long run, stocks for the long term, survivorship bias, The Great Moderation, Thomas Bayes, time value of money, too big to fail, transaction costs, unbiased observer, value at risk, Vanguard fund, yield curve, zero-sum game

During the 2008-2009 fiscal year, the pension fund lost 31 percent, prompting officials to claim that they would never be able to meet liabilities. Because of the inherent complexity and subjectivity associated with calculating the funding levels for pension funds, the true costs are often disguised in the near-term (see box on page 7). The shortfall associated with underfunded pensions can be made up by either investment performance or pension reform (i.e., changing the structure of the pension in some way). Yet pension reform amounts to fiscal tightening at a time when the global economy is weak and personal budgets are stretched. At the same time, these decisions are made by politicians, whose tenure in office does not compel them to make difficult, long-term decisions. Because voters do not opt for more tax or less benefits, the problems are often ignored, growing bigger by the day.


Britannia Unchained: Global Lessons for Growth and Prosperity by Kwasi Kwarteng, Priti Patel, Dominic Raab, Chris Skidmore, Elizabeth Truss

Airbnb, banking crisis, Carmen Reinhart, central bank independence, clockwatching, creative destruction, Credit Default Swap, demographic dividend, Edward Glaeser, eurozone crisis, fear of failure, glass ceiling, informal economy, James Dyson, Kenneth Rogoff, knowledge economy, long peace, margin call, Mark Zuckerberg, Martin Wolf, megacity, Mexican peso crisis / tequila crisis, Neil Kinnock, new economy, North Sea oil, oil shock, open economy, paypal mafia, pension reform, price stability, profit motive, Ronald Reagan, Sand Hill Road, Silicon Valley, Stanford marshmallow experiment, Steve Jobs, Walter Mischel, wealth creators, Winter of Discontent, working-age population, Yom Kippur War

These are out of reach for the majority in the private sector who are paying for the pensions in the public sector. 70 Britannia Unchained Overall, 40–45 per cent of adult lives are now spent in retirement compared to roughly 30 per cent in the 1950s. The balance between the years we spend in work and the years we spend in retirement has grown unbalanced. So, while the Unison union bemoans the ‘Great Pension Robbery’, the reality is that their campaign to frustrate pension reform would be socially unjust, by loading up more debt or higher taxes for the next generation to pay off. A further factor undermining the British work ethic is the rise of welfare dependency. The postwar welfare state was designed as a safety net to help the poorest and most vulnerable. It has ballooned beyond all recognition, corroding the UK work ethic. Based on research into European unemployment levels, Jean-Baptiste Michau at the London School of Economics argues that ‘the expansion of the scope and size of the unemployment benefits system that occurred after the Second World War decreased the returns from having a strong work ethic’.36 In Britain, there has been a massive rise in welfare dependency.


Investment: A History by Norton Reamer, Jesse Downing

activist fund / activist shareholder / activist investor, Albert Einstein, algorithmic trading, asset allocation, backtesting, banking crisis, Berlin Wall, Bernie Madoff, break the buck, Brownian motion, business cycle, buttonwood tree, buy and hold, California gold rush, capital asset pricing model, Carmen Reinhart, carried interest, colonial rule, credit crunch, Credit Default Swap, Daniel Kahneman / Amos Tversky, debt deflation, discounted cash flows, diversified portfolio, dogs of the Dow, equity premium, estate planning, Eugene Fama: efficient market hypothesis, Fall of the Berlin Wall, family office, Fellow of the Royal Society, financial innovation, fixed income, Gordon Gekko, Henri Poincaré, high net worth, index fund, information asymmetry, interest rate swap, invention of the telegraph, James Hargreaves, James Watt: steam engine, joint-stock company, Kenneth Rogoff, labor-force participation, land tenure, London Interbank Offered Rate, Long Term Capital Management, loss aversion, Louis Bachelier, margin call, means of production, Menlo Park, merger arbitrage, money market fund, moral hazard, mortgage debt, Myron Scholes, negative equity, Network effects, new economy, Nick Leeson, Own Your Own Home, Paul Samuelson, pension reform, Ponzi scheme, price mechanism, principal–agent problem, profit maximization, quantitative easing, RAND corporation, random walk, Renaissance Technologies, Richard Thaler, risk tolerance, risk-adjusted returns, risk/return, Robert Shiller, Robert Shiller, Sand Hill Road, Sharpe ratio, short selling, Silicon Valley, South Sea Bubble, sovereign wealth fund, spinning jenny, statistical arbitrage, survivorship bias, technology bubble, The Wealth of Nations by Adam Smith, time value of money, too big to fail, transaction costs, underbanked, Vanguard fund, working poor, yield curve

The media picked up the issue as well; an NBC Reports special that aired in 1972 called “Pensions: The Broken Promise” received abundant press and was viewed widely across the country, spotlighting the issue during a divisive congressional battle over pensions.30 Together, these events and the ensuing media coverage helped garner political support for pension reform. Given their involvement in the early pension problems, the United Auto Workers (UAW) had an interesting position on the subject of pension reform. On the one hand, the UAW did not, of course, want to see labor suffer when firms were facing dire financial straits. On the other, because it had often pushed for retroactive increases in pension benefits, it did not necessarily want to require full funding of plans at all times because that would increase the push back against the UAW’s negotiation of more pension benefits, since the firm would be required to make an immediate cash outlay to meet the liability after new benefits were set.31 The thrust of the UAW’s push for reforms was to establish pension reinsurance more than it was to create requirements for fully funded pension plans. 112 Investment: A History Congress responded with efforts from a variety of committees.


pages: 180 words: 61,340

Boomerang: Travels in the New Third World by Michael Lewis

Berlin Wall, Bernie Madoff, Carmen Reinhart, Celtic Tiger, collapse of Lehman Brothers, collateralized debt obligation, Credit Default Swap, credit default swaps / collateralized debt obligations, fiat currency, financial thriller, full employment, German hyperinflation, Irish property bubble, Kenneth Rogoff, offshore financial centre, pension reform, Ponzi scheme, Ronald Reagan, Ronald Reagan: Tear down this wall, South Sea Bubble, the new new thing, tulip mania, women in the workforce

Two years into his tenure, in mid-2005, he’d tried everything he could think of to persuade individual California state legislators to vote against the short-term desires of their constituents for the greater long-term good of all. “To me there were shocking moments,” he says. Having sped past a DO NOT ENTER sign, we are now flying through intersections without pausing. I can’t help but notice that, if we weren’t breaking the law by going the wrong way down a one-way street, we’d be breaking the law by running stop signs. “When you want to do pension reform for the prison guards,” he says, “and all of a sudden the Republicans are all lined up against you. It was really incredible and it happened over and over: people would say to me, ‘Yes, this is the best idea! I would love to vote for it! But if I vote for it some interest group is going to be angry with me, so I won’t do it.’ I couldn’t believe people could actually say that. You have soldiers dying in Iraq and Afghanistan, and they didn’t want to risk their political lives by doing the right thing.”


pages: 586 words: 160,321

The Euro and the Battle of Ideas by Markus K. Brunnermeier, Harold James, Jean-Pierre Landau

Affordable Care Act / Obamacare, asset-backed security, bank run, banking crisis, battle of ideas, Ben Bernanke: helicopter money, Berlin Wall, Bretton Woods, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Celtic Tiger, central bank independence, centre right, collapse of Lehman Brothers, collective bargaining, credit crunch, Credit Default Swap, currency peg, debt deflation, Deng Xiaoping, different worldview, diversification, Donald Trump, Edward Snowden, en.wikipedia.org, Fall of the Berlin Wall, financial deregulation, financial repression, fixed income, Flash crash, floating exchange rates, full employment, German hyperinflation, global reserve currency, income inequality, inflation targeting, information asymmetry, Irish property bubble, Jean Tirole, Kenneth Rogoff, Martin Wolf, mittelstand, money market fund, Mont Pelerin Society, moral hazard, negative equity, Neil Kinnock, new economy, Northern Rock, obamacare, offshore financial centre, open economy, paradox of thrift, pension reform, price stability, principal–agent problem, quantitative easing, race to the bottom, random walk, regulatory arbitrage, rent-seeking, reserve currency, road to serfdom, secular stagnation, short selling, Silicon Valley, South China Sea, special drawing rights, the payments system, too big to fail, union organizing, unorthodox policies, Washington Consensus, WikiLeaks, yield curve

A good example of the constraining role of the ECB in relation to government actions came with the two letters addressed to the Italian and Spanish governments in August 2011, with the signatures of both the president of the ECB, Jean-Claude Trichet, and the national central bank governors, Mario Draghi (who would be Trichet’s successor) and Miguel Ángel Fernández Ordóñez. (See chapter 15 for details.) The letters included not only fiscal demands but precise conditions on pension reform, the liberalization of services, a loosening of collective bargaining, and the implementation of an unemployment insurance scheme. Italy started to implement the reforms, but most were left to Silvio Berlusconi’s successors as prime minister, Mario Monti, Enrique Letta, and Matteo Renzi. Similarly, in Spain, Prime Minister Zapatero did not act, but the letter provided a basis for the policy agenda of the government of Mariano Rajoy.

Schröder had forged an alliance with the then French president Jacques Chirac to weaken the SGP. Klaus Regling resisted, and he submitted a court case against the European Council’s decision to weaken the excessive deficit procedure for Germany and France. Only losses in German regional elections and strong arguments by German economists made Schröder concede and opt for reforms. Labor market and pension reforms were implemented. At that time, the Economist famously called Germany “the sick man of Europe.”23 After a few years, Germany benefited from the reforms and presented itself as a model for the rest of Europe. OTHER STRUCTURAL REFORMS IN EUROPE The roots of the concerns that drove the Germans lay further back, in the perception that under the Nazi dictatorship the expansion of state expenditure had been a way of increasing state control and the possibilities for arbitrary and corrupt actions.


pages: 219 words: 65,532

The Numbers Game: The Commonsense Guide to Understanding Numbers in the News,in Politics, and inLife by Michael Blastland, Andrew Dilnot

Atul Gawande, business climate, correlation does not imply causation, credit crunch, happiness index / gross national happiness, Intergovernmental Panel on Climate Change (IPCC), moral panic, pension reform, pensions crisis, randomized controlled trial, school choice, very high income

The fault here is not with numbers and the inevitable way that they must bully reality into some semblance of orderliness. It is with people, and our tendency to ignore that this compromise took place, while leaping to big conclusions. Is this a mere tabloid extravagance? Not at all: it is commonplace, in policymaking circles as in the media. When, amid fears of a pension crisis, the British government- appointed Turner Commission published a preliminary report in 2005 on the dry business of pension reform, it said 40 percent of the population was heading for “inadequate” provision in retirement. With luck, your definitional muscles will now be flexing: what do they mean by “inadequate”? In reaching that 40 percent figure—a shocking one—the Commission had said each to their own resources: either you have a pension or you don’t, a hard-and-fast definition like the interpretation in the yob survey of the law on assault, in or out but nothing in between, covered or not, according to your own and only your own finances.


pages: 225 words: 11,355

Financial Market Meltdown: Everything You Need to Know to Understand and Survive the Global Credit Crisis by Kevin Mellyn

asset-backed security, bank run, banking crisis, Bernie Madoff, bonus culture, Bretton Woods, business cycle, collateralized debt obligation, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, cuban missile crisis, disintermediation, diversification, fiat currency, financial deregulation, financial innovation, financial intermediation, fixed income, Francis Fukuyama: the end of history, George Santayana, global reserve currency, Home mortgage interest deduction, Isaac Newton, joint-stock company, Kickstarter, liquidity trap, London Interbank Offered Rate, long peace, margin call, market clearing, mass immigration, money market fund, moral hazard, mortgage tax deduction, Northern Rock, offshore financial centre, paradox of thrift, pattern recognition, pension reform, pets.com, plutocrats, Plutocrats, Ponzi scheme, profit maximization, pushing on a string, reserve currency, risk tolerance, risk-adjusted returns, road to serfdom, Ronald Reagan, shareholder value, Silicon Valley, South Sea Bubble, statistical model, The Great Moderation, the new new thing, the payments system, too big to fail, value at risk, very high income, War on Poverty, Y2K, yield curve

CAPITAL MARKETS TAKE OVER The same decade that saw the banking industry enter its perfect storm saw the beginning of the longest bull market in Wall Street history. The 25-year bull market that ended in 2008 coincides with a vast increase in pension fund assets under professional management. Some of this merely reflects demography as the Baby Boomers began to accumulate wealth. The Employee Retirement Income Security Act (ERISA) pension reforms of 1974 and the implementation of tax The Natural History of Financial Folly deferred personal pension plans, 401(k)s, in 1981 were key factors. The 1982 bipartisan commission on Social Security chaired by Alan Greenspan and Daniel Patrick Moynihan led Congress to raise payroll taxes and retirement ages in 1984, but the need for personal retirement savings became widely recognized. At the same time, corporations were anxious to shift the burden of retirement plans on to their employees. 401(k) plans are defined contribution schemes in which the plan sponsor is not responsible for providing a specified future benefit like a traditional pension.


pages: 267 words: 74,296

Unhappy Union: How the Euro Crisis - and Europe - Can Be Fixed by John Peet, Anton La Guardia, The Economist

bank run, banking crisis, Berlin Wall, Bretton Woods, business cycle, capital controls, Celtic Tiger, central bank independence, centre right, collapse of Lehman Brothers, credit crunch, Credit Default Swap, debt deflation, Doha Development Round, eurozone crisis, Fall of the Berlin Wall, fixed income, Flash crash, illegal immigration, labour market flexibility, labour mobility, light touch regulation, market fundamentalism, moral hazard, Northern Rock, oil shock, open economy, pension reform, price stability, quantitative easing, special drawing rights, supply-chain management, The Great Moderation, too big to fail, transaction costs, éminence grise

Indeed, in their first encounter with the European semester, several national leaders, even those normally thought of as pro-European, went out of their way to criticise the Commission for its intrusiveness. Spain’s Mariano Rajoy announced in 2012 that it was for his government, not the Commission, to decide the right level of the Spanish budget deficit. In France, Hollande early on declared that, while the Commission was within its rights to demand pension reform, his government should be left to decide what sort of changes to make and how quickly to make them. The Italian government rejected a criticism of its longer-term debt sustainability. And when Belgium, the most pro-European country of all, was rebuked over its budget deficit, one Belgian government minister asked aloud: “Who is Olli Rehn?” (the economic-affairs commissioner).5 Yet it is too simple to see the problem as merely one of excessive Commission interference in matters better left to elected national governments.


Crisis and Dollarization in Ecuador: Stability, Growth, and Social Equity by Paul Ely Beckerman, Andrés Solimano

banking crisis, banks create money, barriers to entry, business cycle, capital controls, Carmen Reinhart, carried interest, central bank independence, centre right, clean water, currency peg, declining real wages, disintermediation, financial intermediation, fixed income, floating exchange rates, Gini coefficient, income inequality, income per capita, labor-force participation, land reform, London Interbank Offered Rate, Mexican peso crisis / tequila crisis, microcredit, money: store of value / unit of account / medium of exchange, offshore financial centre, old-boy network, open economy, pension reform, price stability, rent-seeking, school vouchers, seigniorage, trade liberalization, women in the workforce

Reduced oil revenue and the need to increase public expenditure on account of El Niño, together with the inflexibility of public expenditure, combined to increase the public deficit. The authorities simply could not reprogram expenditure sufficiently in response to their changed priorities. Three additional aspects of Ecuador’s public-sector structural-reform agenda go beyond the government budget narrowly defined. These are (a) the need for pension reform, (b) the issue of political and administrative decentralization, and (c) the lagging privatization of publicly owned assets. Like many of South America’s older national pension systems, Ecuador’s pay-as-you-go social-security system has become financially unviable, and a fundamental reform, like those of Chile, Bolivia, Argentina, and Peru, is clearly necessary. Since the mid-1980s, in addition to contributions for its own staff, the central government has been providing a subsidy to the IESS (the Instituto Ecuatoriano de Seguro Social, that is, the Ecuadoran Social Security Institute) covering 40 percent of pension payments due as well as certain specific pension deficits, including those of the national police and armed forces.


pages: 322 words: 84,752

Pax Technica: How the Internet of Things May Set Us Free or Lock Us Up by Philip N. Howard

Affordable Care Act / Obamacare, Berlin Wall, bitcoin, blood diamonds, Bretton Woods, Brian Krebs, British Empire, butter production in bangladesh, call centre, Chelsea Manning, citizen journalism, clean water, cloud computing, corporate social responsibility, creative destruction, crowdsourcing, digital map, Edward Snowden, en.wikipedia.org, failed state, Fall of the Berlin Wall, feminist movement, Filter Bubble, Firefox, Francis Fukuyama: the end of history, Google Earth, Howard Rheingold, income inequality, informal economy, Internet of things, Julian Assange, Kibera, Kickstarter, land reform, M-Pesa, Marshall McLuhan, megacity, Mikhail Gorbachev, mobile money, Mohammed Bouazizi, national security letter, Nelson Mandela, Network effects, obamacare, Occupy movement, packet switching, pension reform, prediction markets, sentiment analysis, Silicon Valley, Skype, spectrum auction, statistical model, Stuxnet, trade route, undersea cable, uranium enrichment, WikiLeaks, zero day

In fact, research shows that digital activism, when it leads to street protests, is usually nonviolent.12 Strange protests like the one I attended don’t happen just in Azerbaijan. They aren’t all as abstract as the ones in Minsk.13 They happen in Havana. In the final days of Burma’s military junta, they happened there, too. What is common is a rising level of innovation in protest strategy. Russia’s Pussy Riot does aggressive culture jamming. In Ukraine, the Femen network of young women bare their breasts in public but then talk about pension reform. The Russian art collective Voina painted a two hundred–foot penis on a Saint Petersburg drawbridge to protest heightened security. Ukrainian activists launched a Kickstarter campaign to buy themselves a “people’s drone” that would let them watch Russian troop movements in their country.14 The internet of things is putting tough regimes into digital dilemmas on a regular basis, because leaders have to choose between two equally distasteful actions.


pages: 627 words: 89,295

The Politics Industry: How Political Innovation Can Break Partisan Gridlock and Save Our Democracy by Katherine M. Gehl, Michael E. Porter

Affordable Care Act / Obamacare, barriers to entry, business cycle, capital controls, carbon footprint, collective bargaining, coronavirus, COVID-19, Covid-19, David Brooks, deindustrialization, disintermediation, Donald Trump, first-past-the-post, future of work, guest worker program, hiring and firing, illegal immigration, immigration reform, Joseph Schumpeter, Kickstarter, labor-force participation, Menlo Park, new economy, obamacare, pension reform, Ronald Reagan, Silicon Valley, stem cell, Steve Jobs, Upton Sinclair, zero-sum game

These individuals are motivated to be loyal soldiers and are threatened with losing their positions or being denied promotions if they stray from ideological purity.56 Majority-party leaders have extra privileges, setting the size of committees, distributing seats and staff between the parties, and selecting the chair.57 The partisan chairs of congressional committees wield substantial control over big decisions, such as the committee’s schedule. In 2003, for example, the Republican-controlled House Ways and Means Committee tried to rush through pension reform before the Democratic members had a chance to read the bill. When the Democrats protested, committee chair Bill Thomas called the US Capitol Police to remove Democrats from the committee library.58 Partisans transformed committees from havens for negotiation and problem solving into battlegrounds. Committee hearings were once used to learn from stakeholders and experts as part of deliberations.


pages: 389 words: 87,758

No Ordinary Disruption: The Four Global Forces Breaking All the Trends by Richard Dobbs, James Manyika

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, access to a mobile phone, additive manufacturing, Airbnb, Amazon Mechanical Turk, American Society of Civil Engineers: Report Card, autonomous vehicles, Bakken shale, barriers to entry, business cycle, business intelligence, Carmen Reinhart, central bank independence, cloud computing, corporate governance, creative destruction, crowdsourcing, demographic dividend, deskilling, disintermediation, disruptive innovation, distributed generation, Erik Brynjolfsson, financial innovation, first square of the chessboard, first square of the chessboard / second half of the chessboard, Gini coefficient, global supply chain, global village, hydraulic fracturing, illegal immigration, income inequality, index fund, industrial robot, intangible asset, Intergovernmental Panel on Climate Change (IPCC), Internet of things, inventory management, job automation, Just-in-time delivery, Kenneth Rogoff, Kickstarter, knowledge worker, labor-force participation, low skilled workers, Lyft, M-Pesa, mass immigration, megacity, mobile money, Mohammed Bouazizi, Network effects, new economy, New Urbanism, oil shale / tar sands, oil shock, old age dependency ratio, openstreetmap, peer-to-peer lending, pension reform, private sector deleveraging, purchasing power parity, quantitative easing, recommendation engine, Report Card for America’s Infrastructure, RFID, ride hailing / ride sharing, Second Machine Age, self-driving car, sharing economy, Silicon Valley, Silicon Valley startup, Skype, smart cities, Snapchat, sovereign wealth fund, spinning jenny, stem cell, Steve Jobs, supply-chain management, TaskRabbit, The Great Moderation, trade route, transaction costs, Travis Kalanick, uber lyft, urban sprawl, Watson beat the top human players on Jeopardy!, working-age population, Zipcar

That trend has broken. Since the mid-1990s, fourteen countries have increased or plan to increase pension ages for men, and eighteen have done so or plan to do so for women. Over the next forty years, almost half of OECD countries are set to increase the pension age. But, as the OECD noted, this is just “running to stand still,” because life expectancy is rising. The United Kingdom’s Turner commission on pension reform has suggested that the state pension age should be increased to seventy years.45 Faced with the lengthening retirement periods of their former employees, the private sector is increasingly moving away from defined-benefit pension plans. Starting in the 1980s and accelerating in the 2000s, advanced economies have seen a shift toward defined-contribution plans.* Between 1980 and 2008, the proportion of US private-sector payroll workers enrolled in defined-benefit pension plans fell from 32 percent to 20 percent; the proportion plummeted to 16 percent in 2013.


pages: 327 words: 90,542

The Age of Stagnation: Why Perpetual Growth Is Unattainable and the Global Economy Is in Peril by Satyajit Das

"Robert Solow", 9 dash line, accounting loophole / creative accounting, additive manufacturing, Airbnb, Albert Einstein, Alfred Russel Wallace, Anton Chekhov, Asian financial crisis, banking crisis, Berlin Wall, bitcoin, Bretton Woods, BRICs, British Empire, business cycle, business process, business process outsourcing, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, Clayton Christensen, cloud computing, collaborative economy, colonial exploitation, computer age, creative destruction, cryptocurrency, currency manipulation / currency intervention, David Ricardo: comparative advantage, declining real wages, Deng Xiaoping, deskilling, disintermediation, disruptive innovation, Downton Abbey, Emanuel Derman, energy security, energy transition, eurozone crisis, financial innovation, financial repression, forward guidance, Francis Fukuyama: the end of history, full employment, gig economy, Gini coefficient, global reserve currency, global supply chain, Goldman Sachs: Vampire Squid, happiness index / gross national happiness, Honoré de Balzac, hydraulic fracturing, Hyman Minsky, illegal immigration, income inequality, income per capita, indoor plumbing, informal economy, Innovator's Dilemma, intangible asset, Intergovernmental Panel on Climate Change (IPCC), Jane Jacobs, John Maynard Keynes: technological unemployment, Kenneth Rogoff, knowledge economy, knowledge worker, light touch regulation, liquidity trap, Long Term Capital Management, low skilled workers, Lyft, Mahatma Gandhi, margin call, market design, Marshall McLuhan, Martin Wolf, Mikhail Gorbachev, mortgage debt, mortgage tax deduction, new economy, New Urbanism, offshore financial centre, oil shale / tar sands, oil shock, old age dependency ratio, open economy, passive income, peak oil, peer-to-peer lending, pension reform, plutocrats, Plutocrats, Ponzi scheme, Potemkin village, precariat, price stability, profit maximization, pushing on a string, quantitative easing, race to the bottom, Ralph Nader, Rana Plaza, rent control, rent-seeking, reserve currency, ride hailing / ride sharing, rising living standards, risk/return, Robert Gordon, Ronald Reagan, Satyajit Das, savings glut, secular stagnation, seigniorage, sharing economy, Silicon Valley, Simon Kuznets, Slavoj Žižek, South China Sea, sovereign wealth fund, TaskRabbit, The Chicago School, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, the market place, the payments system, The Spirit Level, Thorstein Veblen, Tim Cook: Apple, too big to fail, total factor productivity, trade route, transaction costs, uber lyft, unpaid internship, Unsafe at Any Speed, Upton Sinclair, Washington Consensus, We are the 99%, WikiLeaks, Y2K, Yom Kippur War, zero-coupon bond, zero-sum game

An Australian gaming group proposed a new lottery, known as Set for Life, to tap into customers’ dreams of giving up working; the prize was A$20,000 a month for twenty years. People will have to live for a shorter time, survive on less, save more, or work longer. Unable to build adequate savings, and with an inadequate social safety net, retirement will become a luxury available to only a small part of the population. Many workers will have to work as long as they are physically capable or until death. Spanish pension reforms termed it “active aging.” Most will find kinship with singer Annie Lennox's song “Cold,” where she confessed that dying was easy but living scared her to death. The existing economic model also creates intergenerational issues because of its reliance on deferring economic, resource, and environmental adjustments into the future. In each area, short-term gains have been pursued at the expense of risks and costs that only emerge later, entailing a transfer of wealth from the future to the present.


words: 49,604

The Weightless World: Strategies for Managing the Digital Economy by Diane Coyle

"Robert Solow", barriers to entry, Berlin Wall, Big bang: deregulation of the City of London, blue-collar work, Bretton Woods, business cycle, clean water, computer age, Corn Laws, creative destruction, cross-subsidies, David Ricardo: comparative advantage, dematerialisation, Diane Coyle, Edward Glaeser, everywhere but in the productivity statistics, financial deregulation, full employment, George Santayana, global village, hiring and firing, Howard Rheingold, income inequality, informal economy, invention of the sewing machine, invisible hand, Jane Jacobs, Joseph Schumpeter, Kickstarter, knowledge economy, labour market flexibility, laissez-faire capitalism, lump of labour, Marshall McLuhan, mass immigration, McJob, microcredit, moral panic, Network effects, new economy, Nick Leeson, night-watchman state, North Sea oil, offshore financial centre, pension reform, pensions crisis, Ronald Reagan, Silicon Valley, spinning jenny, The Death and Life of Great American Cities, the market place, The Wealth of Nations by Adam Smith, Thorstein Veblen, Tobin tax, two tier labour market, very high income, War on Poverty, winner-take-all economy, working-age population

His scheme ‘should be viewed as the first, hopefully, of a number of schemes where social and individual efforts are collectivised in a manner acceptable to voters’. Collectivised or not, it also manifests self-help philosophy in a way that is equally acceptable to right-wing politicians. All that remains is for political leaders to sell this idea to the voters. In individualist Britain and America it should not be difficult. In continental Europe the task looks likely to be much harder, despite the greater urgency of pension reform. Most Europeans see pensions as falling firmly within the domain of the state although they would probably not vote for the tax increases necessary to close their pensions deficit. Such is the passion about state provision of pensions that German, Italian and French citizens have demonstrated on the streets to defend it. Indeed, two million German civil servants marched in protest at the suggestion that they should merely start to contribute directly to their own pensions for the first time, foregoing 0.2 per cent of their annual wage increase from the year 2001.


pages: 279 words: 90,888

The Lost Decade: 2010–2020, and What Lies Ahead for Britain by Polly Toynbee, David Walker

banking crisis, battle of ideas, Boris Johnson, call centre, car-free, centre right, collective bargaining, congestion charging, corporate governance, crony capitalism, David Attenborough, Dominic Cummings, Donald Trump, Downton Abbey, energy transition, Etonian, first-past-the-post, G4S, gender pay gap, gig economy, Gini coefficient, global village, high net worth, housing crisis, income inequality, industrial robot, Intergovernmental Panel on Climate Change (IPCC), James Dyson, manufacturing employment, mass immigration, moral panic, mortgage debt, North Sea oil, offshore financial centre, payday loans, pension reform, quantitative easing, Right to Buy, Saturday Night Live, selection bias, smart meter, Uber for X, urban renewal, working-age population

The consequences will take some time to become apparent. So it was not all plain sailing for the old. John Major’s government had equalised the state pension age for men and women in the 1995 Pensions Act, to be phased in. Labour raised the retirement age. Cameron speeded things up, leaving many women in their fifties and sixties hard done by, some having to work much longer than they had planned or felt able to. A major pensions reform enacted under Labour came in during 2012, auto-enrolling all employees for the first time into pension schemes. People were free to opt out, but few did, and as a result 10 million people earning over £10,000 now had the prospect of a pension for the first time. Since earnings were still low, only a fifth of them were estimated to be saving enough to pay for a decent level of income in retirement, but take-up of the scheme, branded NEST, was impressive.


pages: 317 words: 101,475

Chavs: The Demonization of the Working Class by Owen Jones

Asperger Syndrome, banking crisis, Berlin Wall, Boris Johnson, British Empire, call centre, collapse of Lehman Brothers, credit crunch, deindustrialization, Etonian, facts on the ground, falling living standards, first-past-the-post, ghettoisation, Gini coefficient, hiring and firing, housing crisis, illegal immigration, income inequality, informal economy, low skilled workers, low-wage service sector, mass immigration, Neil Kinnock, Occupy movement, pension reform, place-making, plutocrats, Plutocrats, race to the bottom, Right to Buy, rising living standards, The Bell Curve by Richard Herrnstein and Charles Murray, The Spirit Level, too big to fail, unpaid internship, upwardly mobile, We are the 99%, wealth creators, Winter of Discontent, women in the workforce, working-age population

Itwas the biggest workers' protest for over a generation. Here was a cross-section of the modern British working class, hundreds of thousands strong, standing up to a government that was forcing them to pay for a crisis they had no role in causing. The protest marked the beginning of a new wave of trade-union resistance. After assuming office, the Conservative-led government announced so-called reforms to public sector pensions-'reforms' being a term that had long since changed in meaning from 'social progress' to 'rolling it back'. Arguing that public sector pensions were becoming unaffordable, the government unveiled plans to make workers pay more and work longer for their pensions and receive less. Yet a recently commissioned Government report written by ultraBlairite ex-Labour Minister John Hutton revealed that public sector pensions would fall as a proportion of Britain's economy: in other words, they were set to become more affordable.


pages: 336 words: 95,773

The Theft of a Decade: How the Baby Boomers Stole the Millennials' Economic Future by Joseph C. Sternberg

Affordable Care Act / Obamacare, Airbnb, American Legislative Exchange Council, Asian financial crisis, banking crisis, Basel III, Bernie Sanders, blue-collar work, centre right, corporate raider, Detroit bankruptcy, Donald Trump, Edward Glaeser, employer provided health coverage, Erik Brynjolfsson, eurozone crisis, future of work, gig economy, Gordon Gekko, hiring and firing, Home mortgage interest deduction, housing crisis, job satisfaction, job-hopping, labor-force participation, low skilled workers, Lyft, Marc Andreessen, Mark Zuckerberg, minimum wage unemployment, mortgage debt, mortgage tax deduction, Nate Silver, new economy, obamacare, oil shock, payday loans, pension reform, quantitative easing, Richard Florida, Ronald Reagan, Saturday Night Live, Second Machine Age, sharing economy, Silicon Valley, sovereign wealth fund, TaskRabbit, total factor productivity, Tyler Cowen: Great Stagnation, uber lyft, unpaid internship, women in the workforce

They’ve expended considerable political energy trying to make it seem impossible to cut benefits. They always talk about Social Security and Medicare as a political “third rail,” that electrified track on a subway that’s deadly to touch. But it’s starting to look like generous benefits aren’t sacrosanct after all. State and local pensions are the canaries in the fiscal coal mine. Most states have implemented pension reforms since the Great Recession, and as part of that process most states have reduced benefits.45 Usually those reductions only limit future payouts that will be available for new hires when they retire several decades down the road. But increasingly, current retirees aren’t as safe from cuts as they used to be. When Detroit’s city government filed for bankruptcy in 2013, its retirees were forced to take a 4.5 percent pension cut and will lose future cost-of-living adjustments.


pages: 371 words: 98,534

Red Flags: Why Xi's China Is in Jeopardy by George Magnus

3D printing, 9 dash line, Admiral Zheng, Asian financial crisis, autonomous vehicles, balance sheet recession, banking crisis, Bretton Woods, BRICs, British Empire, business process, capital controls, carbon footprint, Carmen Reinhart, cloud computing, colonial exploitation, corporate governance, crony capitalism, currency manipulation / currency intervention, currency peg, demographic dividend, demographic transition, Deng Xiaoping, Doha Development Round, Donald Trump, financial deregulation, financial innovation, financial repression, fixed income, floating exchange rates, full employment, Gini coefficient, global reserve currency, high net worth, hiring and firing, Hyman Minsky, income inequality, industrial robot, Internet of things, invention of movable type, Joseph Schumpeter, Kenneth Rogoff, Kickstarter, labour market flexibility, labour mobility, land reform, Malacca Straits, means of production, megacity, money market fund, moral hazard, non-tariff barriers, Northern Rock, offshore financial centre, old age dependency ratio, open economy, peer-to-peer lending, pension reform, price mechanism, purchasing power parity, regulatory arbitrage, rent-seeking, reserve currency, rising living standards, risk tolerance, smart cities, South China Sea, sovereign wealth fund, special drawing rights, special economic zone, speech recognition, The Wealth of Nations by Adam Smith, total factor productivity, trade route, urban planning, Washington Consensus, women in the workforce, working-age population, zero-sum game

An even longer-run study of age-related spending based on current laws, including residential care costs, and covering more than a hundred countries going out to the end of the century argues that richer countries will have to boost spending from 16 to about 25 per cent of GDP. US spending would have to rise to 32 per cent of GDP, and spending in the EU and Japan would have to increase to 24 and 28 per cent, respectively. These increases are predominantly related to healthcare, because pension reforms in recent years have already contained expected outlays.18 China’s pension and healthcare expenditure are predicted to rise from 7 to about 20 per cent of GDP. These predictions are, if anything, on the low side, and are highly sensitive to fertility and mortality assumptions. Consequently, if the expected stabilisation of fertility at around 1.85 children falls short, and/or if life expectancy rises further, then these estimates will be overshot.


pages: 391 words: 102,301

Zero-Sum Future: American Power in an Age of Anxiety by Gideon Rachman

Asian financial crisis, bank run, battle of ideas, Berlin Wall, Big bang: deregulation of the City of London, Bonfire of the Vanities, borderless world, Bretton Woods, BRICs, capital controls, centre right, clean water, collapse of Lehman Brothers, colonial rule, currency manipulation / currency intervention, deindustrialization, Deng Xiaoping, Doha Development Round, energy security, failed state, Fall of the Berlin Wall, financial deregulation, Francis Fukuyama: the end of history, full employment, global reserve currency, greed is good, Hernando de Soto, illegal immigration, income inequality, invisible hand, Jeff Bezos, laissez-faire capitalism, Live Aid, market fundamentalism, Martin Wolf, mass immigration, Mexican peso crisis / tequila crisis, Mikhail Gorbachev, moral hazard, mutually assured destruction, Naomi Klein, Nelson Mandela, offshore financial centre, open borders, open economy, Peace of Westphalia, peak oil, pension reform, plutocrats, Plutocrats, popular capitalism, price stability, RAND corporation, reserve currency, rising living standards, road to serfdom, Ronald Reagan, shareholder value, Sinatra Doctrine, sovereign wealth fund, special economic zone, Steve Jobs, Stewart Brand, The Chicago School, The Great Moderation, The Myth of the Rational Market, Thomas Malthus, trickle-down economics, Washington Consensus, Winter of Discontent, zero-sum game

The Harvard historian Niall Ferguson argues, “Thatcher and Reagan came later. The backlash against welfare started in Chile.”8 Awkwardly for those who like to believe that political and economic freedom are indivisible, the Chilean reforms were launched after a military coup that overthrew the leftist government of Salvador Allende in 1973. Chile’s policies of slashing tariffs and taxes, inflation fighting, privatization, and pension reform were regarded as a model by free-market reformers around the world. But they took place against a background of the imprisonment, torture, and murder of dissidents. General Pinochet’s embrace of the market and assault on inflation came in 1975, after a visit by Milton Friedman, the doyen of the Chicago school of economists, who was to receive the Nobel Prize for economics the following year.


Corbyn by Richard Seymour

anti-communist, banking crisis, battle of ideas, Bernie Sanders, Boris Johnson, British Empire, call centre, capital controls, centre right, collective bargaining, credit crunch, Donald Trump, eurozone crisis, first-past-the-post, full employment, gender pay gap, housing crisis, income inequality, knowledge economy, land value tax, liberal world order, mass immigration, means of production, moral panic, Naomi Klein, negative equity, Neil Kinnock, new economy, non-tariff barriers, Northern Rock, Occupy movement, offshore financial centre, pension reform, Philip Mirowski, precariat, quantitative easing, race to the bottom, rent control, Snapchat, stakhanovite, Washington Consensus, wealth creators, Winter of Discontent, Wolfgang Streeck, working-age population, éminence grise

The fall has been pronounced in the public sector in recent years as austerity measures and recession have eroded employment, but the worst coverage continues to be in the private sector, where over 85 per cent of workplaces have never seen a union rep – and it is part of a global decline, registered first in the United States but apparent in all the core industrial economies.8 In a weakened condition, unions had put up little resistance to austerity measures, barring a brief flurry of strike action against pension reforms in 2011, after which the rate of strike action fell to the lowest levels on record.9 The labour movement, having become more top-down, more politically timid and more constrained by hostile legislation, has been poorly placed to put up much of a fight – in a way, supporting Corbyn’s candidacy, as the big unions did, was by far the most radical thing they have yet done to address their existential decline.


pages: 339 words: 105,938

The Skeptical Economist: Revealing the Ethics Inside Economics by Jonathan Aldred

airport security, Berlin Wall, carbon footprint, citizen journalism, clean water, cognitive dissonance, congestion charging, correlation does not imply causation, Diane Coyle, endogenous growth, experimental subject, Fall of the Berlin Wall, first-past-the-post, framing effect, greed is good, happiness index / gross national happiness, hedonic treadmill, Intergovernmental Panel on Climate Change (IPCC), invisible hand, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, labour market flexibility, laissez-faire capitalism, libertarian paternalism, longitudinal study, new economy, Pareto efficiency, pension reform, positional goods, Ralph Waldo Emerson, RAND corporation, risk tolerance, school choice, spectrum auction, Thomas Bayes, trade liberalization, ultimatum game

A large body of psychological research suggests that these preoccupations are associated with increased rates of mental illness, including depression, substance abuse, anxiety and personality disorder.4 Less dramatically, and anecdotally, we can live in a prosperous economic environment, and still discover that modern life is rubbish. So how can a better understanding of economics help? Talk of improving quality of life might provoke expectations that the following chapters include detailed discussions of integrated transport policies, pension reforms and endogenous growth theory. In other words, the kind of policy wonkery which few of us care passionately about. But we do care about the principles at stake - whether it is fair to tax the rich more highly, whether environmental damage can be boiled down to a sum of money, whether surveys can really measure our quality of life or happiness. This book is about these principles. Black box economics obscures them.


pages: 375 words: 105,067

Pound Foolish: Exposing the Dark Side of the Personal Finance Industry by Helaine Olen

American ideology, asset allocation, Bernie Madoff, buy and hold, Cass Sunstein, Credit Default Swap, David Brooks, delayed gratification, diversification, diversified portfolio, Donald Trump, Elliott wave, en.wikipedia.org, estate planning, financial innovation, Flash crash, game design, greed is good, high net worth, impulse control, income inequality, index fund, London Whale, longitudinal study, Mark Zuckerberg, money market fund, mortgage debt, oil shock, payday loans, pension reform, Ponzi scheme, post-work, quantitative easing, Ralph Nader, RAND corporation, random walk, Richard Thaler, Ronald Reagan, Saturday Night Live, Stanford marshmallow experiment, stocks for the long run, too big to fail, transaction costs, Unsafe at Any Speed, upwardly mobile, Vanguard fund, wage slave, women in the workforce, working poor, éminence grise

She has since taken her idea to the states, where, she said, the influence of the mutual fund industry is less strong than in Washington. She advocates opening up the state pension systems to private workers, a proposal recently endorsed by both New York City comptroller John Liu and California state treasurer Bill Lockyer. “What I’m thinking is that it would be a very smart political and policy move by those who want to keep defined-benefit public pensions to link the move for pension reform to a demand for a meaningful retirement-security option for California private sector workers like the one proposed by Dr. Ghilarducci,” Lockyer said in a recent speech. The interest of state government officials points to the real reason Ghilarducci is viewed as the wicked witch by more than a few in the financial services industry. The Guaranteed Retirement Accounts could bring new players into the general retirement industry, new players like the state pension funds and the institutional and hedge funds they invest their money in, players with power to challenge the stranglehold the mutual fund industry and other retail-investment arms currently have over our retirement savings via the 401(k), an instrument that serves their bottom line more than the ones of the workers it is supposed to be benefitting.


pages: 408 words: 108,985

Rewriting the Rules of the European Economy: An Agenda for Growth and Shared Prosperity by Joseph E. Stiglitz

Airbnb, balance sheet recession, bank run, banking crisis, barriers to entry, Basel III, basic income, Berlin Wall, bilateral investment treaty, business cycle, business process, Capital in the Twenty-First Century by Thomas Piketty, central bank independence, collapse of Lehman Brothers, collective bargaining, corporate governance, corporate raider, corporate social responsibility, creative destruction, credit crunch, deindustrialization, discovery of DNA, diversified portfolio, Donald Trump, eurozone crisis, Fall of the Berlin Wall, financial intermediation, Francis Fukuyama: the end of history, full employment, gender pay gap, George Akerlof, gig economy, Gini coefficient, hiring and firing, housing crisis, Hyman Minsky, income inequality, inflation targeting, informal economy, information asymmetry, intangible asset, investor state dispute settlement, invisible hand, Isaac Newton, labor-force participation, liberal capitalism, low skilled workers, market fundamentalism, mini-job, moral hazard, non-tariff barriers, offshore financial centre, open economy, patent troll, pension reform, price mechanism, price stability, purchasing power parity, quantitative easing, race to the bottom, regulatory arbitrage, rent-seeking, Robert Shiller, Robert Shiller, Ronald Reagan, selection bias, shareholder value, Silicon Valley, sovereign wealth fund, TaskRabbit, too big to fail, trade liberalization, transaction costs, transfer pricing, trickle-down economics, tulip mania, universal basic income, unorthodox policies, zero-sum game

Box 8.1: Reversing Pension Privatizations In the 1990s–2000s, many eastern European countries privatized their pension systems: Hungary (1998), Croatia and Poland (1999), Latvia (2001), Bulgaria and Estonia (2002), Lithuania and Romania (2004), Slovakia (2005), Macedonia (2006), and Czech Republic (2013). The objective was to avert a crisis in which social expenditures would drive up government spending; to promote individual savings; to avoid government mismanagement of pension funds; and to encourage the development of the private financial sector that would manage people’s savings. However, such pension reforms did not yield the expected results: Negative social impacts. With the introduction of individual savings accounts, privatizations broke the social contract enshrined in government-run social security in which current workers support retired workers. The privatizations led to increasing inequalities, especially when Europe entered a phase of higher unemployment; those with low incomes had very small savings and ended up with small pensions.


Discover Greece Travel Guide by Lonely Planet

car-free, carbon footprint, credit crunch, G4S, haute couture, haute cuisine, low cost airline, low cost carrier, pension reform, sensible shoes, too big to fail, trade route, urban renewal

Public opinion soured further in 2007 when Prime Minister Kosta Karamanlis’ government was widely criticised for its handling of the emergency response to severe summer fires, which were responsible for widespread destruction throughout Greece. Nevertheless, snap elections held in September 2007 returned the conservatives to power, albeit with a diminished majority. Over recent years, a series of massive general strikes and blockades highlighted mounting electoral discontent. Hundreds of thousands of people protested against proposed radical labour and pension reforms and privatisation plans that analysts claim would help curb public debt. The backlash against the government reached boiling point in December 2008, when urban rioting broke out across the country, led by youths outraged by the police shooting of a 15-year-old boy in Athens following an alleged exchange between police and a group of teenagers. Concern continues over political tangles in numerous ongoing investigations regarding corruption among state executives.


EuroTragedy: A Drama in Nine Acts by Ashoka Mody

"Robert Solow", Andrei Shleifer, asset-backed security, availability heuristic, bank run, banking crisis, Basel III, Berlin Wall, book scanning, Bretton Woods, call centre, capital controls, Carmen Reinhart, Celtic Tiger, central bank independence, centre right, credit crunch, Daniel Kahneman / Amos Tversky, debt deflation, Donald Trump, eurozone crisis, Fall of the Berlin Wall, financial intermediation, floating exchange rates, forward guidance, George Akerlof, German hyperinflation, global supply chain, global value chain, hiring and firing, Home mortgage interest deduction, income inequality, inflation targeting, Irish property bubble, Isaac Newton, job automation, Johann Wolfgang von Goethe, Johannes Kepler, Kenneth Rogoff, Kickstarter, liberal capitalism, light touch regulation, liquidity trap, loadsamoney, London Interbank Offered Rate, Long Term Capital Management, low-wage service sector, Mikhail Gorbachev, mittelstand, money market fund, moral hazard, mortgage tax deduction, neoliberal agenda, offshore financial centre, oil shock, open borders, pension reform, premature optimization, price stability, purchasing power parity, quantitative easing, rent-seeking, Republic of Letters, Robert Gordon, Robert Shiller, Robert Shiller, short selling, Silicon Valley, The Great Moderation, The Rise and Fall of American Growth, too big to fail, total factor productivity, trade liberalization, transaction costs, urban renewal, working-age population, Yogi Berra

In a press briefing, the new British Chancellor of the Exchequer, George Osborne, 284   e u r o t r a g e d y said, “Greece is a reminder of what happens when governments lack the willingness to act decisively and quickly, and when problems are swept under the carpet.”4 The IMF’s European Department and European leaders pronounced that much-​needed austerity was working in Greece. In August, just three months after the start of the rescue program, Poul Thomsen, head of the IMF’s operations in Greece, portrayed the rosy picture of a Greek miracle in the making. Among notable successes, Thomsen pointed to pension reforms, which he said “were a sweeping change in one step.” He gave a human face to austerity and won the hearts of many Greeks when he said that the “wealthy will have to pay their share, after pensioners and workers did their bit.”5 Even the stern German finance minister, Wolfgang Schäuble, joined the celebration. He spoke of his “great respect for the Greek government’s resolve.” That resolve, Schäuble emphasized, was paying dividends.

Senior European leaders and the cheering media believed it was only proper for European technocrats to step in. In 2012, with Monti as prime minister, the Italian economy contracted by 2.5 percent. The unemployment rate jumped to 11 percent, with the pain most acutely felt by young Italians. While Italy labored under the ECB’s tight monetary policy, Monti pushed structural reforms. His major achievement was a politically controversial pension reform, which raised the minimum age at which Italians would be eligible to start receiving pensions. In December, Berlusconi withdrew parliamentary support for the Monti-​ led government, Monti stepped down, and elections were scheduled for February 24–​25, 2013. The election campaign quickly turned into a contest between the “Europeans” and the large numbers of Italians who were angry at their worsening economic condition and the imposition of austerity by a prime minister with ties to Brussels.


pages: 387 words: 120,155

Inside the Nudge Unit: How Small Changes Can Make a Big Difference by David Halpern

Affordable Care Act / Obamacare, availability heuristic, carbon footprint, Cass Sunstein, centre right, choice architecture, cognitive dissonance, collaborative consumption, correlation does not imply causation, Daniel Kahneman / Amos Tversky, different worldview, endowment effect, happiness index / gross national happiness, hedonic treadmill, hindsight bias, IKEA effect, illegal immigration, job satisfaction, Kickstarter, libertarian paternalism, light touch regulation, longitudinal study, market design, meta analysis, meta-analysis, Milgram experiment, nudge unit, peer-to-peer lending, pension reform, presumed consent, QR code, quantitative easing, randomized controlled trial, Richard Thaler, Right to Buy, Ronald Reagan, Rory Sutherland, Simon Kuznets, skunkworks, the built environment, theory of mind, traffic fines, twin studies, World Values Survey

Another came from the most famous example from our book – an image of a housefly etched near the drain in the urinals at Amsterdam’s Schipol airport which reportedly reduced ‘spillage’ by 80 percent – this was considered to be as good as it would get when it came to nudging. The other main criticism came from the political left, who worried that the Tories would use nudging as an excuse for avoiding tougher, presumably more effective policies. Fortunately, neither of these criticisms turned out to be well-founded. A good example of the potential power of a gentle nudge is the pension reforms that in 2010 were being prepared for a roll-out in Britain under a plan devised by Lord Adair Turner. Under the plan, employers were required to automatically enrol workers into the plan, but employees were free to opt out if they wished to do so. Left-leaning sceptics thought that participation should be mandatory, and that the mere nudge provided by automatic enrolment would not suffice. These fears turned out to be misplaced.


pages: 441 words: 136,954

That Used to Be Us by Thomas L. Friedman, Michael Mandelbaum

addicted to oil, Affordable Care Act / Obamacare, Albert Einstein, Amazon Web Services, American Society of Civil Engineers: Report Card, Andy Kessler, Ayatollah Khomeini, bank run, barriers to entry, Berlin Wall, blue-collar work, Bretton Woods, business process, call centre, carbon footprint, Carmen Reinhart, Cass Sunstein, centre right, Climatic Research Unit, cloud computing, collective bargaining, corporate social responsibility, creative destruction, Credit Default Swap, crowdsourcing, delayed gratification, energy security, Fall of the Berlin Wall, fear of failure, full employment, Google Earth, illegal immigration, immigration reform, income inequality, Intergovernmental Panel on Climate Change (IPCC), job automation, Kenneth Rogoff, knowledge economy, Lean Startup, low skilled workers, Mark Zuckerberg, market design, mass immigration, more computing power than Apollo, Network effects, obamacare, oil shock, pension reform, Report Card for America’s Infrastructure, rising living standards, Ronald Reagan, Rosa Parks, Saturday Night Live, shareholder value, Silicon Valley, Silicon Valley startup, Skype, Steve Jobs, the scientific method, Thomas L Friedman, too big to fail, University of East Anglia, WikiLeaks

So between 2001 and 2009, Atlanta’s unfunded defined-pension obligation grew from $321 million to $1.484 billion. Reed couldn’t cut existing pensions without lawsuits, but he reduced pensions for all new employees to pre-2000 levels and raised the vesting period from ten to fifteen years. When union members picketed city hall, Reed invited them all into his office—in shifts—and patiently explained, with charts and spreadsheets, that without pension reform everyone’s pensions would eventually go bust. By getting the city’s budget under control, Reed then had some money to invest in more police and, what he wanted most, to reopen the sixteen recreation centers and swimming pools in the city’s most disadvantaged neighborhoods, which had been shuttered for lack of funds. “People were shooting dice in the empty pools,” he said. Local businesses have since funded some after-school job-skills programs in the reopened centers.


pages: 462 words: 129,022

People, Power, and Profits: Progressive Capitalism for an Age of Discontent by Joseph E. Stiglitz

"Robert Solow", affirmative action, Affordable Care Act / Obamacare, barriers to entry, basic income, battle of ideas, Berlin Wall, Bernie Madoff, Bernie Sanders, business cycle, Capital in the Twenty-First Century by Thomas Piketty, carried interest, central bank independence, clean water, collective bargaining, corporate governance, corporate social responsibility, creative destruction, Credit Default Swap, crony capitalism, deglobalization, deindustrialization, disintermediation, diversified portfolio, Donald Trump, Edward Snowden, Elon Musk, Erik Brynjolfsson, Fall of the Berlin Wall, financial deregulation, financial innovation, financial intermediation, Firefox, Fractional reserve banking, Francis Fukuyama: the end of history, full employment, George Akerlof, gig economy, global supply chain, greed is good, income inequality, information asymmetry, invisible hand, Isaac Newton, Jean Tirole, Jeff Bezos, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John von Neumann, Joseph Schumpeter, labor-force participation, late fees, low skilled workers, Mark Zuckerberg, market fundamentalism, mass incarceration, meta analysis, meta-analysis, minimum wage unemployment, moral hazard, new economy, New Urbanism, obamacare, patent troll, Paul Samuelson, pension reform, Peter Thiel, postindustrial economy, price discrimination, principal–agent problem, profit maximization, purchasing power parity, race to the bottom, Ralph Nader, rent-seeking, Richard Thaler, Robert Bork, Robert Gordon, Robert Mercer, Robert Shiller, Robert Shiller, Ronald Reagan, secular stagnation, self-driving car, shareholder value, Shoshana Zuboff, Silicon Valley, Simon Kuznets, South China Sea, sovereign wealth fund, speech recognition, Steve Jobs, The Chicago School, The Future of Employment, The Great Moderation, the market place, The Rise and Fall of American Growth, the scientific method, The Wealth of Nations by Adam Smith, too big to fail, trade liberalization, transaction costs, trickle-down economics, two-sided market, universal basic income, Unsafe at Any Speed, Upton Sinclair, uranium enrichment, War on Poverty, working-age population

The Congressional Budget Office (CBO) estimated in November 2017 that as a result of the 2017 tax bill, an additional 13 million will join the uninsured by 2027. See “Repealing the Individual Health Insurance Mandate: An Updated Estimate” (CBO, Nov. 8, 2017). 8.This option basically means that what were subsidies provided by the healthy to the unhealthy through the private insurance system are instead achieved through the tax system. 9.See Peter R. Orszag and Joseph E. Stiglitz, “Rethinking Pension Reform: Ten Myths about Social Security Systems,” in New Ideas about Old Age Security, eds. Robert Holman and Joseph E. Stiglitz (Washington, DC: World Bank, 2001), 17–56. Most individuals don’t know the fees charged by alternative plans, and thus don’t realize the impact of fees on their retirement income. In the US, transaction costs on IRA accounts are estimated to reduce retirement benefits by some 30 percent.


pages: 461 words: 128,421

The Myth of the Rational Market: A History of Risk, Reward, and Delusion on Wall Street by Justin Fox

activist fund / activist shareholder / activist investor, Albert Einstein, Andrei Shleifer, asset allocation, asset-backed security, bank run, beat the dealer, Benoit Mandelbrot, Black-Scholes formula, Bretton Woods, Brownian motion, business cycle, buy and hold, capital asset pricing model, card file, Cass Sunstein, collateralized debt obligation, complexity theory, corporate governance, corporate raider, Credit Default Swap, credit default swaps / collateralized debt obligations, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, discovery of the americas, diversification, diversified portfolio, Edward Glaeser, Edward Thorp, endowment effect, Eugene Fama: efficient market hypothesis, experimental economics, financial innovation, Financial Instability Hypothesis, fixed income, floating exchange rates, George Akerlof, Henri Poincaré, Hyman Minsky, implied volatility, impulse control, index arbitrage, index card, index fund, information asymmetry, invisible hand, Isaac Newton, John Meriwether, John Nash: game theory, John von Neumann, joint-stock company, Joseph Schumpeter, Kenneth Arrow, libertarian paternalism, linear programming, Long Term Capital Management, Louis Bachelier, mandelbrot fractal, market bubble, market design, Myron Scholes, New Journalism, Nikolai Kondratiev, Paul Lévy, Paul Samuelson, pension reform, performance metric, Ponzi scheme, prediction markets, pushing on a string, quantitative trading / quantitative finance, Ralph Nader, RAND corporation, random walk, Richard Thaler, risk/return, road to serfdom, Robert Bork, Robert Shiller, Robert Shiller, rolodex, Ronald Reagan, shareholder value, Sharpe ratio, short selling, side project, Silicon Valley, Social Responsibility of Business Is to Increase Its Profits, South Sea Bubble, statistical model, stocks for the long run, The Chicago School, The Myth of the Rational Market, The Predators' Ball, the scientific method, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Kuhn: the structure of scientific revolutions, Thomas L Friedman, Thorstein Veblen, Tobin tax, transaction costs, tulip mania, value at risk, Vanguard fund, Vilfredo Pareto, volatility smile, Yogi Berra

In this view it wasn’t the riskiness of an individual stock or bond that mattered, but the way it fit in to a portfolio. By the mid-1970s, this approach had a name—modern portfolio theory—and was beginning to make slight inroads in the institutional investing world. Then Washington gave it a huge boost. In the wake of several corporate bankruptcies that left pensions unpaid, Congress passed pension-reform legislation in 1974. The Employee Retirement Security Act has since gone on to have many interesting consequences. The first had to do with the standard of prudence laid down by the law and in subsequent regulations from the Department of Labor. No longer a legal concept based on tradition, prudence was redefined to mean following the scientific dictates of modern portfolio theory.8 IN THIS ACCOUNTING, RISK CEASED to be a vague, unquantifiable menace that could be tamed only with judgment.


pages: 428 words: 134,832

Straphanger by Taras Grescoe

active transport: walking or cycling, Affordable Care Act / Obamacare, airport security, Albert Einstein, big-box store, bike sharing scheme, Boris Johnson, British Empire, call centre, car-free, carbon footprint, City Beautiful movement, congestion charging, correlation does not imply causation, David Brooks, deindustrialization, East Village, edge city, Enrique Peñalosa, extreme commuting, financial deregulation, Frank Gehry, glass ceiling, Golden Gate Park, housing crisis, hydraulic fracturing, indoor plumbing, intermodal, invisible hand, Jane Jacobs, jitney, Joan Didion, Kickstarter, Kitchen Debate, laissez-faire capitalism, Marshall McLuhan, mass immigration, McMansion, megacity, mortgage tax deduction, Network effects, New Urbanism, obamacare, oil shale / tar sands, oil shock, Own Your Own Home, peak oil, pension reform, Peter Calthorpe, Ponzi scheme, Ronald Reagan, Rosa Parks, sensible shoes, Silicon Valley, Skype, the built environment, The Death and Life of Great American Cities, the High Line, transit-oriented development, union organizing, urban planning, urban renewal, urban sprawl, walkable city, white flight, working poor, young professional, Zipcar

And his commute back home was easy: his apartment is only a ten-minute walk from Balard, the station at the western end of the line. We rode back to Paris in another train with Michel, a young driver who sported a Celtic cross in his left earlobe and a shock of blue hair over his forehead. The drivers’ union had announced a 24-hour strike, and François thought he’d participate, but Michel hadn’t made up his mind yet. (Nationwide strikes over the issue of pension reform would erupt a couple of months later, limiting service on some transit lines.) What was really bothering them, though, was what was happening on line 1. At great expense, and without interrupting service, the first-born of Paris’s métro lines was being converted to all-automatic operation. Automation is a step beyond autopilot: the new trains wouldn’t need drivers at all, and an entire line can be run by only six employees.


pages: 515 words: 142,354

The Euro: How a Common Currency Threatens the Future of Europe by Joseph E. Stiglitz, Alex Hyde-White

bank run, banking crisis, barriers to entry, battle of ideas, Berlin Wall, Bretton Woods, business cycle, buy and hold, capital controls, Carmen Reinhart, cashless society, central bank independence, centre right, cognitive dissonance, collapse of Lehman Brothers, collective bargaining, corporate governance, correlation does not imply causation, credit crunch, Credit Default Swap, currency peg, dark matter, David Ricardo: comparative advantage, disintermediation, diversified portfolio, eurozone crisis, Fall of the Berlin Wall, fiat currency, financial innovation, full employment, George Akerlof, Gini coefficient, global supply chain, Growth in a Time of Debt, housing crisis, income inequality, incomplete markets, inflation targeting, information asymmetry, investor state dispute settlement, invisible hand, Kenneth Arrow, Kenneth Rogoff, knowledge economy, light touch regulation, manufacturing employment, market bubble, market friction, market fundamentalism, Martin Wolf, Mexican peso crisis / tequila crisis, money market fund, moral hazard, mortgage debt, neoliberal agenda, new economy, open economy, paradox of thrift, pension reform, pensions crisis, price stability, profit maximization, purchasing power parity, quantitative easing, race to the bottom, risk-adjusted returns, Robert Shiller, Robert Shiller, Ronald Reagan, savings glut, secular stagnation, Silicon Valley, sovereign wealth fund, the payments system, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, too big to fail, transaction costs, transfer pricing, trickle-down economics, Washington Consensus, working-age population

The worry is that attempts to regulate, to prevent such abuses, will now become a cross-border dispute, with the German government (and therefore the Troika) taking the side of the oligarch/German partnership against the public interest. 31 In the case of Greece, the historically tense relationship with Turkey makes cutbacks in military spending especially difficult, even though when Georges Papandreou was foreign minister, there was a serious rapprochement. 32 See John Henley, “ ‘Making Us Poorer Won’t Save Greece’: How Pension Crisis is Hurting Its People,” Guardian, June 17, 2015. 33 Matthew Dalton, “Greece’s Pension System Isn’t That Generous After All,” Wall Street Journal, February 27, 2015. 34 Whether part of the formal or implied contract is of secondary concern. 35 There is an exception: when pensions have been gratuitously increased after the work has been done. In that case, the worker has been given a “gift,” which was not part of the contract. Reducing, or even eliminating, the gift, in the presence of extreme budgetary stringency, may then make sense. 36 In February 2014. 37 There are other anomalous aspects of the demands for pension reform. Part of the problem that the pension system finds itself in is because it held Greek government bonds, which experienced significant write-downs as part of debt restructuring. Had the restructuring been done earlier (in 2010) and had the Troika not imposed such contractionary policies, the size of the write-downs would have been markedly less. Thus, the Troika itself is partly to blame for the problems in the pension system. 38 As we noted earlier in the book, part of what was going on was a hidden recapitalization of the banking system. 39 According to OECD data on long-term interest rates (rates for government bonds with 10-year maturity). 40 Whether the ECB would be willing and able to do whatever it takes when put to the test has been put into question by the constant haggling with its German board members—for example, over whether buying the bonds of a country in crisis is desirable, or even permissible. 41 Moreover, the bailout provides an opportunity for the short-term private creditors to take out their funds, leaving an even greater burden on the rest. 42 There are a few exceptions, which are worth noting.


pages: 586 words: 159,901

Wall Street: How It Works And for Whom by Doug Henwood

accounting loophole / creative accounting, activist fund / activist shareholder / activist investor, affirmative action, Andrei Shleifer, asset allocation, asset-backed security, bank run, banking crisis, barriers to entry, borderless world, Bretton Woods, British Empire, business cycle, capital asset pricing model, capital controls, central bank independence, computerized trading, corporate governance, corporate raider, correlation coefficient, correlation does not imply causation, credit crunch, currency manipulation / currency intervention, David Ricardo: comparative advantage, debt deflation, declining real wages, deindustrialization, dematerialisation, diversification, diversified portfolio, Donald Trump, equity premium, Eugene Fama: efficient market hypothesis, experimental subject, facts on the ground, financial deregulation, financial innovation, Financial Instability Hypothesis, floating exchange rates, full employment, George Akerlof, George Gilder, hiring and firing, Hyman Minsky, implied volatility, index arbitrage, index fund, information asymmetry, interest rate swap, Internet Archive, invisible hand, Irwin Jacobs, Isaac Newton, joint-stock company, Joseph Schumpeter, kremlinology, labor-force participation, late capitalism, law of one price, liberal capitalism, liquidationism / Banker’s doctrine / the Treasury view, London Interbank Offered Rate, Louis Bachelier, market bubble, Mexican peso crisis / tequila crisis, microcredit, minimum wage unemployment, money market fund, moral hazard, mortgage debt, mortgage tax deduction, Myron Scholes, oil shock, Paul Samuelson, payday loans, pension reform, plutocrats, Plutocrats, price mechanism, price stability, prisoner's dilemma, profit maximization, publication bias, Ralph Nader, random walk, reserve currency, Richard Thaler, risk tolerance, Robert Gordon, Robert Shiller, Robert Shiller, selection bias, shareholder value, short selling, Slavoj Žižek, South Sea Bubble, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Market for Lemons, The Nature of the Firm, The Predators' Ball, The Wealth of Nations by Adam Smith, transaction costs, transcontinental railway, women in the workforce, yield curve, zero-coupon bond

"The Equity Premium: Stock and Bond Returns Since 1802," Financial Analysts Journal (February), pp. 28-38. Simmel, Georg (1978). The Philosophy of Money (Boston: Beacon Press). Simmons, Jacqueline (1996). "Home Prices Soar in Unexpected Places," Wall Street Journal, February 13- Simons, Katerina, and Stephen Cross (1991). "Do Capital Markets Predict Problems in Large Commercial Banks?," New England Economic Review (May-June}, pp. 51-56. Singh, Ajit (1995). "Pension Reform, the Stock Market, Capital Formation, and Economic Growth; A Critical Commentary on the World Bank's Proposals," mimeo, Cambridge University, Economics Department (December). Sloan, Allan (1994). "KKR Deal Makes a Silk Purse Out of a Cow's Ear," New York Newsday, September 18, p. A86. Smith, Adam (1976). An Inquiry Into the Nature and Causes of the Wealth of Nations, edited by R.H. Campbell and A.S.


pages: 475 words: 155,554

The Default Line: The Inside Story of People, Banks and Entire Nations on the Edge by Faisal Islam

Asian financial crisis, asset-backed security, balance sheet recession, bank run, banking crisis, Basel III, Ben Bernanke: helicopter money, Berlin Wall, Big bang: deregulation of the City of London, Boris Johnson, British Empire, capital controls, carbon footprint, Celtic Tiger, central bank independence, centre right, collapse of Lehman Brothers, credit crunch, Credit Default Swap, crony capitalism, dark matter, deindustrialization, Deng Xiaoping, disintermediation, energy security, Eugene Fama: efficient market hypothesis, eurozone crisis, financial deregulation, financial innovation, financial repression, floating exchange rates, forensic accounting, forward guidance, full employment, G4S, ghettoisation, global rebalancing, global reserve currency, hiring and firing, inflation targeting, Irish property bubble, Just-in-time delivery, labour market flexibility, light touch regulation, London Whale, Long Term Capital Management, margin call, market clearing, megacity, Mikhail Gorbachev, mini-job, mittelstand, moral hazard, mortgage debt, mortgage tax deduction, mutually assured destruction, Myron Scholes, negative equity, North Sea oil, Northern Rock, offshore financial centre, open economy, paradox of thrift, Pearl River Delta, pension reform, price mechanism, price stability, profit motive, quantitative easing, quantitative trading / quantitative finance, race to the bottom, regulatory arbitrage, reserve currency, reshoring, Right to Buy, rising living standards, Ronald Reagan, savings glut, shareholder value, sovereign wealth fund, The Chicago School, the payments system, too big to fail, trade route, transaction costs, two tier labour market, unorthodox policies, uranium enrichment, urban planning, value at risk, WikiLeaks, working-age population, zero-sum game

Of course we want to live better and not be too frugal.’ The building of social security systems in China and other emerging economies is one of the great challenges for the world economy. Few leaders in these countries are much impressed by the European welfare system. But they will have to provide. What would a Chinese National Health Service look like? Part of the spike in Chinese savings rates can be dated back to a pension reform that severely limited retirement payouts to state workers. Financial markets will need to develop to help the Chinese masses save and smooth their incomes over time. In China, however, the experts refute the notion that high savings really are the problem. The flipside of the ‘savings glut’ in China that America complains about is the ‘investment famine’ in the rest of the world that China is only too keen to point out.


Not Working by Blanchflower, David G.

active measures, affirmative action, Affordable Care Act / Obamacare, Albert Einstein, bank run, banking crisis, basic income, Berlin Wall, Bernie Madoff, Bernie Sanders, Black Swan, Boris Johnson, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, Clapham omnibus, collective bargaining, correlation does not imply causation, credit crunch, declining real wages, deindustrialization, Donald Trump, estate planning, Fall of the Berlin Wall, full employment, George Akerlof, gig economy, Gini coefficient, Growth in a Time of Debt, illegal immigration, income inequality, indoor plumbing, inflation targeting, job satisfaction, John Bercow, Kenneth Rogoff, labor-force participation, liquidationism / Banker’s doctrine / the Treasury view, longitudinal study, low skilled workers, manufacturing employment, Mark Zuckerberg, market clearing, Martin Wolf, mass incarceration, meta analysis, meta-analysis, moral hazard, Nate Silver, negative equity, new economy, Northern Rock, obamacare, oil shock, open borders, Own Your Own Home, p-value, Panamax, pension reform, plutocrats, Plutocrats, post-materialism, price stability, prisoner's dilemma, quantitative easing, rent control, Richard Thaler, Robert Shiller, Robert Shiller, Ronald Coase, selection bias, selective serotonin reuptake inhibitor (SSRI), Silicon Valley, South Sea Bubble, Thorstein Veblen, trade liberalization, universal basic income, University of East Anglia, urban planning, working poor, working-age population, yield curve

While both are called “populist,” they have conflicting policies, so it isn’t surprising that their efforts to form a government ultimately failed. The Five Star Movement called for a universal basic income of $920 a month, implying a huge increase in government outlays. The Northern League has called for a flat tax rate of 15 percent and actions against refugees. It would also like to see heavy spending on infrastructure. Both parties wish to roll back pension reforms and other plans aimed at boosting competitiveness. Both are strongly Eurosceptic and show little inclination to be bound by European Union rules and regulations. Both call for scrapping sanctions against Russia. There is likely to be a new set of elections where the main topic will probably be continued membership in the Euro. However, a recent Ipsos poll suggested only 29 percent of Italians supported quitting the Euro.27 Italy has one of the lowest approval levels for membership of the single currency, but disapproval may not be the same as quitting.


The New Map: Energy, Climate, and the Clash of Nations by Daniel Yergin

3D printing, 9 dash line, activist fund / activist shareholder / activist investor, addicted to oil, Admiral Zheng, Albert Einstein, American energy revolution, Asian financial crisis, autonomous vehicles, Ayatollah Khomeini, Bakken shale, Bernie Sanders, BRICs, British Empire, coronavirus, COVID-19, Covid-19, decarbonisation, Deng Xiaoping, disruptive innovation, distributed generation, Donald Trump, Edward Snowden, Elon Musk, energy security, energy transition, failed state, gig economy, global pandemic, global supply chain, hydraulic fracturing, Indoor air pollution, Intergovernmental Panel on Climate Change (IPCC), inventory management, James Watt: steam engine, Kickstarter, LNG terminal, Lyft, Malacca Straits, Malcom McLean invented shipping containers, Masdar, mass incarceration, megacity, Mikhail Gorbachev, mutually assured destruction, new economy, off grid, oil rush, oil shale / tar sands, oil shock, open economy, paypal mafia, peak oil, pension reform, price mechanism, purchasing power parity, RAND corporation, rent-seeking, ride hailing / ride sharing, Ronald Reagan, self-driving car, Silicon Valley, smart cities, South China Sea, sovereign wealth fund, supply-chain management, trade route, Travis Kalanick, Uber and Lyft, uber lyft, ubercab, UNCLOS, UNCLOS, uranium enrichment, women in the workforce

Interview. 2. Elizabeth Malkin, “To Halt Energy Slide,” New York Times, April 11, 2019; Jude Webster and Michael Stott, “Mexico: Lopez Obrador Makes a Big Bet,” Financial Times, October 3, 2019 (“technocrats” and “sovereignty”); Sergio Chapa, “Mexico’s New President Takes Nationalist Tone,” Houston Chronicle, March 21, 2019 (“transformation”). 3. Andres Schipani and Bryan Harris, “Can Brazil’s Pension Reform Kick-Start the Economy?,” Financial Times, October 22, 2019. Chapter 6: Pipeline Battles 1. Remarks by President Obama on American-Made Energy, Cushing, Oklahoma, March 22, 2012; Jane Mayer, “Taking It to the Streets,” New Yorker, November 20, 2011 (“game over”); Kevin Birn and Cathy Crawford, “The GHG Intensity of Canadian Oil Sands Production: A New Analysis,” IHS Markit Canadian Oil Sands Dialogue, June, 2020.


Greece Travel Guide by Lonely Planet

active transport: walking or cycling, Airbnb, capital controls, car-free, carbon footprint, credit crunch, haute couture, haute cuisine, illegal immigration, indoor plumbing, Kickstarter, low cost airline, low cost carrier, pension reform, period drama, sensible shoes, trade route, urban sprawl

Greek banks closed and began running out of cash, and markets around the world fell as the EU produced a detailed plan for a possible Grexit – Greece’s removal from the EU. At the eleventh hour, Tsipras secured an €86 billion bailout loan – but the austerity measures attached were even more rigorous than those proposed before the referendum and many felt that, with Greek banks on the brink of collapse, Tsipras had been bullied into accepting the terms. Further tax hikes, pension reforms, and privatisation of €50 billion worth of public companies have left many viewing Greece as a financial ward of Europe. Dissent within Syriza and ANEL, brought on by hardliners opposed to the bailout, led Tsipras to resign in August 2015 and return to the polls in September. This was Greece’s fourth election in just over three years. The outcome was an unexpectedly large victory for Tsipras, just six seats short of an absolute majority.

Public opinion soured further in 2007 when the conservative government (who had come to power in 2004) was widely criticised for its handling of severe summer fires, responsible for widespread destruction throughout Greece. Nevertheless, snap elections held in September 2007 returned the conservatives, albeit with a diminished majority. In the following years, a series of massive general strikes and blockades highlighted mounting electoral discontent. Hundreds of thousands of people protested against proposed radical labour and pension reforms and privatisation plans that analysts claimed would help curb public debt. The backlash against the government reached boiling point in December 2008, when urban rioting broke out across the country, led by youths outraged by the police shooting of a 15-year-old boy in Athens following an alleged exchange between police and a group of teenagers. Youths hurled stones and firebombs at riot police who responded with tear gas.


pages: 1,202 words: 424,886

Stigum's Money Market, 4E by Marcia Stigum, Anthony Crescenzi

accounting loophole / creative accounting, Asian financial crisis, asset allocation, asset-backed security, bank run, banking crisis, banks create money, Black-Scholes formula, Brownian motion, business climate, buy and hold, capital controls, central bank independence, centralized clearinghouse, corporate governance, credit crunch, Credit Default Swap, currency manipulation / currency intervention, David Ricardo: comparative advantage, disintermediation, distributed generation, diversification, diversified portfolio, financial innovation, financial intermediation, fixed income, full employment, high net worth, implied volatility, income per capita, intangible asset, interest rate derivative, interest rate swap, large denomination, locking in a profit, London Interbank Offered Rate, margin call, market bubble, market clearing, market fundamentalism, money market fund, mortgage debt, Myron Scholes, offshore financial centre, paper trading, pension reform, Ponzi scheme, price mechanism, price stability, profit motive, Real Time Gross Settlement, reserve currency, risk tolerance, risk/return, seigniorage, shareholder value, short selling, technology bubble, the payments system, too big to fail, transaction costs, two-sided market, value at risk, volatility smile, yield curve, zero-coupon bond, zero-sum game

The decline that occurred between 2000 and 2005 is notable, as it was due in large part to the Treasury’s decision in 2001 to suspend its issuance of long bonds, with its last sale in August of that year. The suspension was related in part to the bright fiscal picture at that time, with the United States running yearly budget surpluses from 1998 to 2001. A return to deficits in 2002 almost certainly played a role in the Treasury’s decision to resume issuance of long bonds beginning in February 2006. Another major factor was the global movement toward pension reform, which boosted demand for longer maturities for use as a match against future pension liabilities. Scant global supply of long bond issue also played a role, with many “natural” investors such as insurance companies left clamoring for the paper. Treasury bonds used to be callable during the last five years of their life. The last such issue that the Treasury sold was the 11¾s of 2014, callable in 2009.

Estrella and Mishkin found that the yield curve spread between the 10-year Treasury note and the 3-month T-bill was one of the most successful models of recession four quarters in the future. • One of the more popular theories behind the low level of long-term interest rates of recent years has been attributed to a drop in term premiums. Low inflation expectations, increased Fed credibility, increased foreign buying, and global pension reform are other factors likely at play. • In January 1997, the Treasury began issuing inflation-protected securities (TIPS). TIPS are indexed to the Consumer Price Index for All Urban Consumers (CPI-U). The break-even rate on TIPS is used by many as a gauge of the bond market’s inflation expectations. • Zero-coupon securities (note and bond issues carrying a zero coupon), or STRIPS, represent a relatively small portion of the Treasury market, with $183 billion outstanding in early 2006, down from a peak of about $230 billion in 1998.


Basic Income: A Radical Proposal for a Free Society and a Sane Economy by Philippe van Parijs, Yannick Vanderborght

"Robert Solow", Airbnb, Albert Einstein, basic income, Berlin Wall, Bertrand Russell: In Praise of Idleness, centre right, collective bargaining, cryptocurrency, David Graeber, declining real wages, diversified portfolio, Edward Snowden, eurozone crisis, Fall of the Berlin Wall, feminist movement, full employment, future of work, George Akerlof, illegal immigration, income per capita, informal economy, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Kickstarter, Marshall McLuhan, means of production, minimum wage unemployment, open borders, Paul Samuelson, pension reform, precariat, price mechanism, profit motive, purchasing power parity, quantitative easing, race to the bottom, road to serfdom, Second Machine Age, secular stagnation, selection bias, sharing economy, sovereign wealth fund, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, Tobin tax, universal basic income, urban planning, urban renewal, War on Poverty, working poor

Useful websites (in EnÂ�glish) include: Basic Income Earth Network (BIEN): http://Â�w ww╉.Â�basicincome╉.Â�org Unconditional Basic Income EuÂ�rope (UBI-Â�E): http://Â�basicincome╉-Â�europe╉.Â�org United States Basic Income Guarantee Network (USBIG): http://Â�w ww╉.Â�usbig╉.Â�net Citizen’s Income Trust (UK): http://Â�citizensincome╉.Â�org╉/Â� References Abe, Aya K. 2014. “Is Â�There a Â�Future for a Universal Cash Benefit in Japan? The Case of Kodomo Teate (Child Benefit).” In Yannick Vanderborght and Toru Yamamori, eds., Basic Income in Japan: Prospects of a Radical Idea in a Transforming Welfare State, 49–67. New York: Palgrave Macmillan. Abrahamson, Peter, and Cecilie Wehner. 2003. “Pension Reforms in Denmark.” November, Department of Sociology, University of Copenhagen. http://Â�w ww╉.Â�lse╉.Â�ac╉.Â�u k╉/Â�european╉ Institute╉/Â�research ╉/Â�hellenicObservatory╉/Â�pdf╉/Â�pensions╉_Â�conference╉/Â�AbrahamsonWehner╉ -Â�Pensions╉.Â�pdf. Ackerman, Bruce. 1980. Social Justice in the Liberal State. New Haven: Yale University Press. Ackerman, Bruce, and Anne Alstott. 1999.


pages: 859 words: 204,092

When China Rules the World: The End of the Western World and the Rise of the Middle Kingdom by Martin Jacques

Admiral Zheng, Asian financial crisis, Berlin Wall, Bob Geldof, Bretton Woods, BRICs, British Empire, credit crunch, Dava Sobel, deindustrialization, Deng Xiaoping, deskilling, discovery of the americas, Doha Development Round, energy security, European colonialism, failed state, Fall of the Berlin Wall, Francis Fukuyama: the end of history, global reserve currency, global supply chain, illegal immigration, income per capita, invention of gunpowder, James Watt: steam engine, joint-stock company, Kenneth Rogoff, land reform, land tenure, lateral thinking, Malacca Straits, Martin Wolf, Naomi Klein, Nelson Mandela, new economy, New Urbanism, one-China policy, open economy, Pearl River Delta, pension reform, price stability, purchasing power parity, reserve currency, rising living standards, Ronald Reagan, Scramble for Africa, Silicon Valley, South China Sea, sovereign wealth fund, special drawing rights, special economic zone, spinning jenny, Spread Networks laid a new fibre optics cable between New York and Chicago, the scientific method, Thomas L Friedman, trade liberalization, urban planning, Washington Consensus, Westphalian system, Xiaogang Anhui farmers, zero-sum game

(London: Demos, 2007) Wilson, Dominic, and Anna Stupnytska, ‘The N-11: More Than an Acronym’, Goldman Sachs Global Economics Papers, 153 (28 March 2007) ——and Roopa Purushothaman, ‘Dreaming with BRICs: The Path to 2050’, Goldman Sachs Global Economics Papers, 99 (2003) Wolf, Martin, ‘The Brave New World of State Capitalism’, Financial Times, 16 October 2007 ——‘Life in a Tough World of High Commodity Prices’, Financial Times, 4 March 2008 ——‘Why Agreeing a New Bretton Woods is Vital’, Financial Times, 4 November 2008 ——‘Why America and China Cannot Afford to Fall Out’, Financial Times, 8 October 2003 ——Why Globalization Works (New Haven: Yale University Press, 2005) Wolferen, Karel van, The Enigma of Japanese Power: People and Politics in a Stateless Nation (New York: Vintage, 1990) Wong, Herman, ‘On Global Catwalks, a New Face That’s Hot - Asian’, China Daily, 24 May 2006 Wood, Frances, No Dogs and Not Many Chinese (London: John Murray, 1998) Woodall, Pam, ‘The New Titans’, survey, The Economist, 16 September 2006 Wooldridge, Adrian, ‘After Bush: A Special Report on America and the World’, The Economist, 29 March 2008, p. 10 World Bank, At China’s Table: Food Security Options (Washington, DC: 1997) ——China Engaged: Integration with the Global Economy (Washington, DC: 1997) ——Clear Water, Blue Skies: China’s Environment in the New Century (Washington, DC: 1997) ——The East Asian Miracle: Economic Growth and Public Policy (Washington, DC: Oxford University Press, 1993) ——Financing Health Care: Issues and Options for China (Washington, DC:1997) ——Old Age Security: Pension Reform in China (Washington, DC:1997) ——Sharing Rising Incomes: Disparities in China (Washington, DC:1997) ——‘Will Resilience Overcome Risk? East Asia Regional Outlook’, November 2007, posted on www.worldbank.org Wu, David Y. H., and Sidney C. H. Cheung, eds, The Globalization of Chinese Food (London: RoutledgeCurzon, 2002) Xie, Andy, Asia/Pacific Economics, report for Morgan Stanley, November 2002 Xinran, What the Chinese Don’t Eat (London: Vintage Books, 2006) Xu, Gary Gang, Sinascape: Contemporary Chinese Cinema (Oxford: Rowman and Littlefield, 2007) Yahuda, Michael, ‘The Evolving Asian Order: The Accommodation of Rising Chinese Power’, in David Shambaugh, ed., Power Shift: China and Asia’s New Dynamics (Berkeley: University of California Press, 2005) ——Hong Kong: China’s Challenge (London: Routledge, 1996) Yan Xuetong, ‘The Rise of China in Chinese Eyes’, Journal of Contemporary China, 10:26 (2001) Yardley, Jim, ‘After the Fury in Tibet, Firm Hand Trembles’, International Herald Tribune, 18 March 2008 ——‘China Offers Defense of Its Darfur Stance’, International Herald Tribune, 8-9 March 2008 ——and Somini Sengupta, ‘Beijing Blames the Dalai Lama’, International Herald Tribune, 19 March 2008 Yoshino, Kosaku, Cultural Nationalism in Contemporary Japan (London: Routledge, 1992) Yu Bin, ‘China and Russia: Normalizing Their Strategic Partnership’, in David Shambaugh, ed., Power Shift: China and Asia’s New Dynamics (Berkeley: University of California Press, 2005) Yu Yongding, ‘China’s Macroeconomic Development, Exchange Rate Policy and Global Imbalances’, unpublished paper, Asahi Shimbun Symposium, October 2005 ——‘China’s Rise, Twin Surplus and the Change of China’s Development Strategy’, unpublished paper, Namura Tokyo Club Conference, Kyoto, 21 November 2005 ——‘China’s Structural Adjustment’, unpublished paper, Seoul Conference, 2005 ——‘The Interactions Between China and the World Economy’, unpublished paper, Nikkei Simbon Symposium, 5 April 2005 ——‘Opinions on Structure Reform and Exchange Rate Regimes Against the Backdrop of the Asian Financial Crisis’, unpublished paper, Japanese Ministry of Finance, 2000 Zakaria, Fareed, The Post-American World (London: Allen Lane, 2008) Zha Daojiong, ‘China’s Energy Security and Its International Relations’, China and Eurasia Forum Quarterly, 3:3 (2005) Zhang, Peter G., IMF and the Asian Financial Crisis (Singapore: World Scientific, 1998) Zhang Wei-Wei, ‘The Allure of the Chinese Model’, International Herald Tribune, 1 November 2006 Zhang Yunling, ed., Designing East Asian FTA: Rationale and Feasibility (Beijing: Social Sciences Academic Press, 2006) ——East Asian Regionalism and China (Beijing: World Affairs Press, 2005) ——and Tang Shiping, ‘China’s Regional Strategy’, in David Shambaugh, ed., Power Shift: China and Asia’s New Dynamics (Berkeley: University of California Press, 2005) Zhao Suisheng, ed., Chinese Foreign Policy: Pragmatism and Strategic Behavior (New York: M.


pages: 613 words: 200,826

Unreal Estate: Money, Ambition, and the Lust for Land in Los Angeles by Michael Gross

Albert Einstein, Ayatollah Khomeini, bank run, Bernie Madoff, California gold rush, clean water, corporate raider, Donald Trump, estate planning, family office, financial independence, Irwin Jacobs, Joan Didion, Maui Hawaii, McMansion, mortgage debt, Norman Mailer, offshore financial centre, oil rush, passive investing, pension reform, Ponzi scheme, Right to Buy, Robert Bork, Ronald Reagan, Silicon Valley, stem cell, Steve Jobs, Steve Wozniak, The Predators' Ball, transcontinental railway, yellow journalism

Soon he was under investigation by the Los Angeles–based Organized Crime Task Force. Simultaneously, the Nevada Gaming Commission was investigating the man who actually ran the Stardust for the mob, Frank “Lefty” Rosenthal (aka “Ace” Rothstein, played by Robert De Niro in the Scorsese movie). Next, the Labor Department piled on, asking whether the Teamster loans to Glick violated a brand-new pension reform law implemented to curb abuses like those that had already plagued Beverly Ridge. Then, Nevada charged Glick with failing to report loans to his casinos. Finally, Glick’s name surfaced in the investigation of the gangland-style execution of Tamara Rand, a fifty-four-year-old San Diego businesswoman whose safe deposit box was stuffed with $400,000 in crisp new currency. A former consultant to one of Glick’s companies, she’d sued him a year before her death after he allegedly refused to give her 5 percent of his gambling shares in return for more than a million dollars she’d loaned him.


pages: 772 words: 203,182

What Went Wrong: How the 1% Hijacked the American Middle Class . . . And What Other Countries Got Right by George R. Tyler

8-hour work day, active measures, activist fund / activist shareholder / activist investor, affirmative action, Affordable Care Act / Obamacare, bank run, banking crisis, Basel III, Black Swan, blood diamonds, blue-collar work, Bolshevik threat, bonus culture, British Empire, business cycle, business process, buy and hold, capital controls, Carmen Reinhart, carried interest, cognitive dissonance, collateralized debt obligation, collective bargaining, commoditize, corporate governance, corporate personhood, corporate raider, corporate social responsibility, creative destruction, credit crunch, crony capitalism, crowdsourcing, currency manipulation / currency intervention, David Brooks, David Graeber, David Ricardo: comparative advantage, declining real wages, deindustrialization, Diane Coyle, disruptive innovation, Double Irish / Dutch Sandwich, eurozone crisis, financial deregulation, financial innovation, fixed income, Francis Fukuyama: the end of history, full employment, George Akerlof, George Gilder, Gini coefficient, Gordon Gekko, hiring and firing, income inequality, invisible hand, job satisfaction, John Markoff, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, labor-force participation, laissez-faire capitalism, lake wobegon effect, light touch regulation, Long Term Capital Management, manufacturing employment, market clearing, market fundamentalism, Martin Wolf, minimum wage unemployment, mittelstand, moral hazard, Myron Scholes, Naomi Klein, Northern Rock, obamacare, offshore financial centre, Paul Samuelson, pension reform, performance metric, pirate software, plutocrats, Plutocrats, Ponzi scheme, precariat, price stability, profit maximization, profit motive, purchasing power parity, race to the bottom, Ralph Nader, rent-seeking, reshoring, Richard Thaler, rising living standards, road to serfdom, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Reagan, Sand Hill Road, shareholder value, Silicon Valley, Social Responsibility of Business Is to Increase Its Profits, South Sea Bubble, sovereign wealth fund, Steve Ballmer, Steve Jobs, The Chicago School, The Spirit Level, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, transcontinental railway, transfer pricing, trickle-down economics, tulip mania, Tyler Cowen: Great Stagnation, union organizing, Upton Sinclair, upwardly mobile, women in the workforce, working poor, zero-sum game

Though still low, the share of German women and men aged 60–64 working in 2009 was nearly double their share a decade earlier.16 And France, like the United States and Germany, has increased the threshold age for full retirement benefits for most to age 67 from age 65, and the early retirement threshold to age 62 from 60. The Hollande government last year allowed a few quite limited exceptions to those tougher standards (for those who began working careers as teenagers and the like). These reforms have worked. In combination with earlier pension reforms (1993, 2003), the net impact is projected by the French statistical agency Insee to increase the workforce there by two million employees by 2030.17 CHAPTER 26 INCENTIVIZING AND REWARDING WORK “France’s labour force … has never had an international reputation as being work-shy.”1 CHRISTOPHER CALDWELL Weekly Standard, November 2008 Critics of stakeholder capitalism might argue the superior work incentives of Reaganomics.


pages: 935 words: 267,358

Capital in the Twenty-First Century by Thomas Piketty

"Robert Solow", accounting loophole / creative accounting, Asian financial crisis, banking crisis, banks create money, Berlin Wall, Branko Milanovic, British Empire, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, central bank independence, centre right, circulation of elites, collapse of Lehman Brothers, conceptual framework, corporate governance, correlation coefficient, David Ricardo: comparative advantage, demographic transition, distributed generation, diversification, diversified portfolio, European colonialism, eurozone crisis, Fall of the Berlin Wall, financial intermediation, full employment, German hyperinflation, Gini coefficient, high net worth, Honoré de Balzac, immigration reform, income inequality, income per capita, index card, inflation targeting, informal economy, invention of the steam engine, invisible hand, joint-stock company, Joseph Schumpeter, Kenneth Arrow, market bubble, means of production, mortgage debt, mortgage tax deduction, new economy, New Urbanism, offshore financial centre, open economy, Paul Samuelson, pension reform, purchasing power parity, race to the bottom, randomized controlled trial, refrigerator car, regulatory arbitrage, rent control, rent-seeking, Robert Gordon, Ronald Reagan, Simon Kuznets, sovereign wealth fund, Steve Jobs, The Nature of the Firm, the payments system, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, trade liberalization, twin studies, very high income, Vilfredo Pareto, We are the 99%, zero-sum game

There are many others, however, who began work early and whose work is arduous or not very rewarding and who legitimately aspire to retire relatively early (especially since their life expectancy is often lower than that of more highly qualified workers). Unfortunately, recent reforms in many developed countries fail to distinguish adequately between these different types of individual, and in some cases more is demanded of the latter than of the former, which is why these reforms sometimes provoke strong opposition. One of the main difficulties of pension reform is that the systems one is trying to reform are extremely complex, with different rules for civil servants, private sector workers, and nonworkers. For a person who has worked in different types of jobs over the course of a lifetime, which is increasingly common in the younger generations, it is sometimes difficult to know which rules apply. That such complexity exists is not surprising: today’s pension systems were in many cases built in stages, as existing schemes were extended to new social groups and occupations from the nineteenth century on.


Lonely Planet Greek Islands by Lonely Planet, Alexis Averbuck, Michael S Clark, Des Hannigan, Victoria Kyriakopoulos, Korina Miller

car-free, carbon footprint, credit crunch, eurozone crisis, G4S, haute couture, haute cuisine, low cost airline, low cost carrier, Norman Mailer, pension reform, period drama, sensible shoes, sustainable-tourism, trade route, transfer pricing, urban sprawl

Greece’s dispute with its Balkan neighbour, Former Yugoslav Republic of Macedonia (FYROM), stems from their claim to the name Macedonia and on Greece’s favourite son, Alexander the Great – despite Alexander’s home of Pella still standing in the province of Macedonia in northern Greece. Crunch Time Over recent years a series of massive general strikes have highlighted mounting electoral discontent. Hundreds of thousands of people have protested against proposed radical labour and pension reforms and privatisation plans that analysts claim will help curb public debt. The backlash against the ND government, also mired in a series of political scandals, reached boiling point in December 2008, when urban rioting broke out across the country, led by youths in Athens outraged by the fatal shooting by police of a 15-year-old boy. A mid-term general election held in October 2009, saw PASOK take back the reins in a landslide win.


Greece by Korina Miller

car-free, carbon footprint, credit crunch, Google Earth, haute cuisine, illegal immigration, informal economy, invention of the printing press, pension reform, period drama, sensible shoes, too big to fail, trade route, upwardly mobile, urban renewal, urban sprawl, women in the workforce

Public opinion soured further in 2007 when Karamanlis’ government was widely criticised for its handling of the emergency response to severe summer fires, which were responsible for widespread destruction throughout Greece. Nevertheless, snap elections held in September 2007 returned the conservatives, albeit with a diminished majority. Over recent years, a series of massive general strikes and blockades have highlighted mounting electoral discontent. Hundreds of thousands of people have protested against proposed radical labour and pension reforms and privatisation plans that analysts claim will help curb public debt. The backlash against the government reached boiling point in December 2008, when urban rioting broke out across the country, led by youths outraged by the police shooting of a 15-year-old boy in Athens following an alleged exchange between police and a group of teenagers. Youths hurled stones and firebombs at riot police who responded with tear gas.


Italy by Damien Simonis

active transport: walking or cycling, airport security, bike sharing scheme, Bonfire of the Vanities, call centre, car-free, carbon footprint, centre right, clean water, congestion charging, discovery of the americas, Frank Gehry, haute couture, illegal immigration, Kickstarter, large denomination, low cost airline, low cost carrier, Murano, Venice glass, pension reform, period drama, Peter Eisenman, Skype, spice trade, starchitect, sustainable-tourism, trade route, urban planning, urban sprawl, women in the workforce

He promises to run Italy like a corporation but the following five years are marked by economic stagnation. 2005 Pope John Paul II dies aged 84. His death unleashes a wave of sorrow and crowds outside St Peter’s chant santo subito (sainthood now). He is succeeded by Benedict XVI, the German Cardinal Ratzinger. 2006 In April, Berlusconi narrowly loses general elections to a broad centre-left coalition led by the technocrat Romano Prodi, who immediately runs into trouble with the Telecom bugging scandal and the pension reform quagmire. 2006 Juventus, AC Milan and three other top Serie A football teams lose points and receive hefty fines in a match-rigging scandal that also sees Juventus stripped of its 2005 and 2006 championship titles. 2007 Former heir to the Italian throne, Vittorio Emanuele di Savoia, is cleared of corruption and fraud charges in connection with alleged illicit dealings, among others, involving the casino in Campione d’Italia, an Italian enclave in Swiss territory. 2008 Italy’s national airline, Alitalia, files for bankruptcy and is later resurrected, in reduced form with fewer routes, aircraft and staff, as a private airline. 2009 Italy’s Constitutional Court overturns a law giving Berlusconi immunity from prosecution while in office, opening the possibility that he could stand trial in several court cases.


France (Lonely Planet, 8th Edition) by Nicola Williams

active transport: walking or cycling, back-to-the-land, bike sharing scheme, British Empire, car-free, carbon footprint, centre right, Charles Lindbergh, Columbine, double helix, Guggenheim Bilbao, haute couture, haute cuisine, Henri Poincaré, Honoré de Balzac, illegal immigration, industrial robot, information trail, Jacquard loom, Joseph-Marie Jacquard, Kickstarter, Louis Blériot, Louis Pasteur, low cost airline, low cost carrier, Mahatma Gandhi, means of production, Murano, Venice glass, pension reform, post-work, QWERTY keyboard, ride hailing / ride sharing, Saturday Night Live, Silicon Valley, Skype, Sloane Ranger, supervolcano, trade route, urban renewal, urban sprawl, V2 rocket

A few months later, in a bid to appease a discontented electorate, parliament granted greater power to local government Click here on economic and cultural affairs, transport and further education. The constitutional reform also gave the green light to local referenda – to better hear what the people on the street were saying (though the first referendum subsequently held – in Corsica – threw up a ‘No’ vote, putting Paris back at square one; for details Click here). Spring 2003 ushered in yet more national strikes, this time over the government’s proposed pension reform, which was pushed through parliament in July. ‘We are not going to be intimidated by protestors’ was the tough response of centre-right Prime Minister Jean-Pierre Raffarin, in office since May 2002. An extreme heatwave that summer, sending temperatures in the capital soaring above 40° and claiming 11,000 predominantly elderly lives, did little to cool rising temperatures. * * * SUITE FRANÇAISE The story behind literary stunner Suite Française is as incredible as the novel itself.