Still on the Edge

The article goes into great detail regarding the recent progression of the Ukrainian economy and that even though it is progressing there are things to be skeptical about. Value added tax rebates on exports have been a particularly tricky issue because no one has actually tried to clean up the lucrative system of actually claiming them. However; the 2016 budget proposal is pretty reasonable but it is hindered by people who are resisting the abolition of inefficient tax loopholes.

There dodgy elements in  the Ukrainian economy are a source of skepticism for locals as well 

as foreigners. With threats of resignations still up in the air, Ukraine remains at  risk.

Berlin's refugees wait to register, Businesses cannot wait to employ them

Germany has been struggling to cope with the 1 million refugees that have entered the country this year, Berlin receiving about 90,000. Refugees have been waiting in queues to get registered with the state so that they are able to receive health care and services as well as employment. Berlin is not a very competent city for this task. Even before refugees began to arrive, it was in deep debt, received subsidies from other states, and the schools are among some of Germany's worst.

Humanitarian organizations in Germany have been watching a humanitarian crisis build up in Berlin. Refugees who have experienced trauma and arrive with health problems still wait to be registered, some barely able to communicate with locals and fill out paperwork because of their broken English. A refugee boy was plucked from the line one day by a German man and was then sexually abused and strangled.

On the other hand, Berlin's civil society is "brimming with energy." Volunteer efforts to collect clothes and food, teach refugees German and English, and provide shelter have flourished. For those refugees who have been able to be placed with an internship or job, the reviews from the German public have been good. Businesses are pleased with their new employees and are excited to hire more with the same work ethic.

This goes against the talk of refugees bringing an economy down as they take jobs from citizens. While its still early to make a judgment, it appears as though businesses are still doing well.



http://www.economist.com/news/europe/21684169-berlins-refugees-wait-register-businesses-cannot-wait-employ-them-all-down-line?fsrc=scn/tw/te/pe/ed/alldowntheline

Hundreds of Companies Paid Little or No Tax in Australia

        Australian tax authorities have recently released a report saying that on third of the largely foreign-owned corporations, including Google and Apple, paid very little or no tax in 2014. Names of some of the companies that did not pay taxes were oil services company Halliburton, the hotel chain Hilton Worldwide Holdings, the aviation company Boeing, its British rival BAE Systems, the beer company SABMiller and the automakers Honda Motor and the Ford Motor Company. However, for SABMiller case, they had no taxable income, while Google and Apple pay only a small portion of their income. Their representatives have been refusing to make any comment on such subject. Peter Burn, head of policy at business lobby the Australian Industry Group, said the data release showed tax laws needed to be updated, not that companies were evading their responsibilities.

Source: http://www.nytimes.com/2015/12/18/business/international/hundreds-of-companies-paid-little-or-no-tax-in-australia.html?ref=economy

GOP, House Poised to Renew $600B in tax cuts

GOP members of the house appear to be poised to push the $600B tax cut through by Thursday, amid some opposition from house Democrats, notably minority leader Nancy Pelosi. She called the proposition "practically an immorality," as some Democrats believe the cut is too focused on business, saying 60% of cuts are directed at permanent reductions to businesses and 40% to families. Republicans believe that this tax cut will be a start to further tax and health care overhauls next year, fully expecting vetos and hoping to excite conservative voters ahead of next years election.

This news coupled with the Fed's announcement of raised interest rates may cause more inflation than expected. It will be interesting to see how voters view these tax cuts, as most voters are not educated in economics and are more adverse to taxes than nearly any other nation. I am concerned that many are unaware of the possible negative impact this could have on the economy.



http://www.cnbc.com/2015/12/17/led-by-gop-house-poised-to-renew-600b-in-tax-cuts.html

FED Raises Key Interest Rate for First Time in Almost a Decade

Today, for the first time in almost a decade, the Federal Reserve has raised interest rates. This highly anticipated move only comes because of the strength of our domestic economy. Unemployment has fallen to below five percent, a level historically consistent with a healthy economy. Inflation also remains somewhat low. However some areas of the economy are weak, like the recent drop in oil prices. The FED must keep an eye on the changes in the economy both domestic and globally. If they wait too long they risk losing control of inflation. http://www.nytimes.com/2015/12/17/business/economy/fed-interest-rates.html?_r=0

Canadian start-up sells bottled air to China, says sales booming

A Canadian company selling air bottled in a ski resort says it's now seeing huge demand from Chinese customers.

Vitality Air said that the first batch of 500 canisters filled with fresh air from the Rocky Mountain town of Banff went on sale in China last month and sold out within two weeks.

"Now we're taking lots of pre orders for our upcoming shipment. We're getting close to the 1,000 mark," said Harrison Wang, director of China operations.

The air sells for $14 to $20, depending on the size of the canister.

Read More

Northern China is often cloaked in smog, especially during the cold winter months when homes and power plants burn coal to keep warm. Last week, Beijing issued its first ever red alert because of poor air quality, closing schools and restricting traffic.

http://www.cnn.com/2015/12/15/asia/china-canadian-company-selling-clean-air/index.html

Financial Turmoil in South Africa?

Within the last week, South Africa has had three finance ministers. The current minister, Pravin Gordhan, took his position on Sunday night and tried to ease some of the confusion in the country. Gordhan addressed journalists explaining the government will begin in emphasize sound fiscal management and smart spending by state-owned enterprises like South African Airways. These promises seem meaningless to some people when previous finance ministers have promised the same thing. The South African president, Jacob Zuma, fired the previous minister last week who tried to cut down spending. This caught many people off guard and has led many to demand the recall of the president. This is one of the many acts that have led to the anger against the ANC, the party in control currently. Some political analysists have marked this period as the Fall of the ANC. We could see big changes in South Africa if President Zuma continues on this path and ignores the voices of the people.  

http://www.economist.com/news/middle-east-and-africa/21684043-investors-are-hoping-south-africas-latest-finance-minister-can-steady-ship-south 

In Denver, Worries That the Fed Will Chill a Sizzling Recovery

The Denver-area economy has enjoyed one of the strongest rebounds from the recession, even amounting to a 3.1% unemployment rate in October. However, with the looming rise in interest rates, many local businesses are worried. They're concerned that people won't be able to spend their extra income on these newly formed businesses.

Along with a rapidly growing economy, housing prices have climbed 24% above what they were before the recession. Some say that modestly higher interest rates won't slow the growth, however, others think it definitely will. People think the economy isn't strong enough to handle the possible higher rates.

I do wonder if similarly sized cities are worried about this as well. Also, if interest rates are raised, it would be harder to sell houses and property. Will rates actually affect the incredible expansion of this city? Or are these worries not necessary?

http://www.nytimes.com/2015/12/14/business/economy/in-denver-worries-that-the-fed-will-chill-a-sizzling-recovery.html?ref=business&_r=0

Ecological Economics

Kenneth Boulding, a British economist, talks about the need for economic policies that are conscious of our Earth's finite resources and utilizes them in a manner that allow for sustainability. Practitioners of this have begun calling themselves Ecological Economists.
To its practitioners, ecological economics is neither ecology nor economics, but a fusion of both. Their starting point is to recognise that the human economy is part of the natural world. Our environment, they note, is both a source of resources and a sink for wastes.
There are two ways our economies can grow, ecological economists point out: through technological change, or through more intensive use of resources. Only the former, they say, is worth having. They are suspicious of GDP, a crude measure which does not take account of resource depletion, unpaid work, and countless other factors. In its place they advocate more holistic approaches, such as the Genuine Progress Indicator (GPI), a composite index that includes things like the cost of pollution, deforestation and car accidents.
The GPI however, is highly criticized as a subjective measure and should not carry much weight. Either way I believe it is important to consider the effect on the environment when creating economic plans.

China's pollution causes environmental concern

http://www.wboc.com/story/30734058/chinas-efforts-on-climate-deal-partly-due-to-its-pollution

Up until 2015 China had been the world's fastest growing economy. The growth was due in large part to the construction "of hundreds of coal-fired power plants and an increase in car ownership" (Watt, 2015). As China continues to innovate and progress its society with the implementation of new technology, it also pollutes the air on its own and from their factories.

With the public becoming increasingly aware of these environmental concerns, economic growth has taken a slight backseat to the environment among the Chinese population. The article states that China's cities are "among the world's dirtiest" which has people concerned "with environmental issues and taking that on par with wanting to make money".

With these concerns, the Chinese government is trying for a push for a global climate pact. Its purpose would be to pledge to "keep global temperatures from rising another degree Celsius (1.8 Fahrenheit) between now and 2100." China's president, Xi Jinping, has pledged $3.1 billion to help other developing countries fight climate change. Already China has become a leader in curbing greenhouse gas emissions "by investing in solar wind and hydro power". The efforts by China should be applauded by the rest of the world as they help take a step in the direction of maintaining a livable environment on our planet. Although their coal power plants were a major cause of a large portion of the world's greenhouse gas emissions, their current efforts to clean the air should not go unnoticed.