- At the State of the Union, a President Outgunned in Congress Is Still Combative
The New York Times JAN. 20, 2015
The circumstances facing President Obama as he delivered his State of the Union address Tuesday night could not have seemed less promising: a presidency with only two years left to get anything done in a Congress that is now totally in the control of a party that has routinely ignored his pleas for cooperation. So he chose wisely to send a simple, dramatic message about economic fairness, about the fact that the well-off — the top earners, the big banks, Silicon Valley — have done just great, while the middle and working classes remain dead in the water. His remedy: skim from the rich and redistribute to those below, while deploying other weapons to raise wages and increase jobs.
He did not frame the debate over inequality as starkly as many economists have, preferring instead to talk about the virtues of “middle-class economics.” But he came close. “It’s now up to us to choose who we want to be over the next 15 years, and for decades to come,” he said. “Will we accept an economy where only a few of us do spectacularly well? Or will we commit ourselves to an economy that generates rising incomes and chances for everyone who makes the effort?”
Mr. Obama knows his prospects of getting Congress to agree are less than zero; Republicans dismissed his ideas before he even voiced them. That does not make them irrelevant. Mr. Obama was speaking not just to the present but to the future, to the 2016 presidential elections and even beyond. By simply raising the plight of the middle class (and, looming behind it, the larger issue of economic inequality), he has firmly inserted issues of economic fairness into the political debate. Hillary Rodham Clinton or whomever the Democrats nominate cannot ignore them now. Even Republicans, disinclined to raise taxes on top-tier earners, may find attractive the idea of doing something for those in the middle.
Further, while the rhetoric was combative, even defiant in parts, the president’s proposal is hardly radical. It would raise the capital gains tax to 28 percent — which is where it was in the Reagan era. It would impose ordinary income tax rates on dividends and end a provision in the tax code that shields hundreds of billions of dollars in appreciated wealth passed on to heirs. These changes, plus a new fee on big banks, would finance a set of tax breaks for middle-income families, including credits for two-earner couples, increased child care and college tuition credits, as well as other programs, including two years of tuition-free community college for some students. And the whole thing is designed to be revenue-neutral, the tax increases paying for the new programs to avoid the endless wrangling over deficits that have exhausted both political parties as well as the American public.
It was hardly surprising that a president who expects so little from Congress devoted some of his speech to celebrating the things that he has accomplished against considerable odds. With Congress’s help, he rescued the automobile companies, jump-started the renewable energy industry, imposed new rules on financial institutions and, most dramatically, engineered a major overhaul of the health care system. On his own initiative, he ordered major reforms in immigration policy, forged a landmark agreement with the automobile companies on fuel efficiency and proposed tough restrictions on greenhouse gas emissions from power plants.
His task will be to defend these initiatives from almost certain congressional attack, wielding his veto pen, or threatening to wield it, much as President Bill Clinton found himself doing after Newt Gingrich and his Republican majority took over the House in 1995. President Obama should also seek out opportunities to use his executive authority to improve conditions for the middle class and for workers, such as fixing overtime rules, and, at every opportunity, use the bully pulpit on important matters like improving the minimum wage.
There is one other thing he must do: Resist his instinct to follow the false promise of compromise. Give-and-take is part of the legislative process, but trade-offs amounting to Republican legislative triumphs are unacceptable. Gridlock seems almost foreordained over the next two years. Mr. Obama should do nothing to confuse the voters as to where the responsibility lies.
- Singapore Dollar Is Weakest Since 2010
The Bloomberg January 28, 2015
The Monetary Authority of Singapore (MAS).
(Bloomberg) -- Singapore unexpectedly eased monetary policy, sending the currency to the weakest since 2010 against the U.S. dollar as the country joined global central banks in shoring up growth amid dwindling inflation.
The Monetary Authority of Singapore, which uses the exchange rate as its main policy tool, said in an unscheduled statement Wednesday it will seek a slower pace of appreciation against a basket of currencies. It cut the inflation forecast for 2015, predicting prices may fall as much as 0.5 percent.
The move was the first emergency policy change since one following the Sept. 11, 2001 attacks for the MAS -- which only has two scheduled policy announcements a year -- reflecting how the plunge in oil has changed the outlook in recent months. Singapore becomes at least the ninth nation to ease policy this month, as officials from Europe to Canada and India contend with escalating disinflation and faltering global growth.
“They’re essentially trying to stay ahead” by moving before the scheduled April policy review, said Song Seng Wun, an economist at CIMB Research in Singapore. “We’ve already seen so many central banks cut. For Singapore to do such an unscheduled move, it has to be against the backdrop of enormous uncertainty.”
ECB Action
The European Central Bank announced quantitative easing plans this month while Canada, Denmark and India cut interest rates. More may come -- the Bank of Japan chief said the country may need to get creative in any further monetary stimulus and Thai policy makers face growing pressure to lower borrowing costs.
Countries seeking cheaper currencies are running up against a limited number of major economies where policy makers are at ease with appreciation. The exceptions include the U.S. and Switzerland, which abandoned its exchange-rate cap this month. In Australia, where an acceleration in core inflation sent the local currency higher Wednesday, the central bank has signaled it would prefer a weaker exchange rate.
Singapore’s dollar fell 0.9 percent to S$1.3512 per U.S. dollar as of 2:11 p.m. local time, the weakest since September 2010. The currency has fallen almost 6 percent against the U.S. dollar in the past three months, the third-biggest loser among 11 most-traded Asian currencies tracked by Bloomberg.
Significant Shift
The MAS will probably weaken the Singapore dollar “quite solidly” and the currency may drop to about S$1.4 against the U.S. dollar by the end of March, said Tsutomu Soma, department manager of the fixed-income business unit at Rakuten Securities.
While the exchange rate has weakened aginst the U.S. dollar, it has gained against the ringgit, euro and yen in the last three months, the central bank said.
“Since the last Monetary Policy Statement in October, developments in the global and domestic inflation environment have led to a significant shift in Singapore’s CPI inflation outlook for 2015,” the MAS said. “The global economy continues to grow at an uneven pace” and falling oil prices have curbed inflation, it said.
Singapore’s consumer prices fell for a second month in December for the first time since 2009, according to data compiled by Bloomberg. The central bank cut its 2015 inflation forecast to a range of negative 0.5 percent to 0.5 percent, from the October prediction of 0.5-to-1.5 percent.
- The air pollution that's choking Asia
(CNN)At the age of 13, Tan Yi Han could not see the edge of his schoolyard. It was 1998 in Singapore, the wealthy city-state known for its tidy streets and clean, green image. But for much of that particular school year, clouds of smoke shrouded the skyline. The record-setting air pollution, which had begun in 1997 and lasted for months, caused a 30% spike in hospital visits. It would later be remembered as one of southeast Asia's worst-ever "haze episodes."
Haze episodes have occurred in southeast Asia nearly every year since. Back in 1998, and for years afterwards, Tan didn't think too deeply about them. Yet at some point in his late 20s, he began to wonder: where did the haze come from? And why did it keep coming back?
Dirty air
Air pollution kills around 7 million people every year, according to the World Health Organization (WHO), accounting for one in eight deaths worldwide in 2012. The main causes of death were stroke and heart disease, followed by chronic obstructive pulmonary disease (COPD), lung cancer, and respiratory infections among children.
It is especially bad in the Asia-Pacific region, which has a population of over 4.2 billion and high population density. China and India alone, with a combined population of around 2.7 billion, are both enormous sources and victims of air pollution.
In 2010, 40% of the world's premature deaths caused by air pollution were in China, the world's largest emitter of carbon dioxide, according to a survey published in the Lancet. The University of Hong Kong's School of Public Health reported more than 3,000 premature deaths in the city in 2013, and the situation in many mainland Chinese cities is reckoned to be far worse. A poll by the U.S. Pew Research Center found that 47% of Chinese citizens thought air pollution to be a "very big" problem in 2013 (up from 31% in 2008) . It is now a central focus for many Chinese environmental groups and a growing source of anxiety for the country's leadership.
Similar health concerns are building in India, where air pollution is now the fifth-leading cause of death. Between 2000 and 2010, the annual number of premature deaths linked to air pollution across India rose six-fold to 620,000, according to the Center for Science and Environment, a public-interest research and advocacy group in New Delhi. In May 2014, the WHO said that New Delhi had the worst air of 1,600 cities surveyed worldwide and that rising air pollution had increased the risk of strokes, cancers and heart disease. Another 2014 study has linked a significant drop in India's wheat and rice crop yields to rising levels of two air pollutants -- black carbon from rural cooking stoves and ground-level ozone formed from motor vehicle exhausts, industrial emissions, and chemical solvents -- between 1980 and 2010.
In both China and India, air pollution is one consequence of a massive exodus from farm to city that has occurred in recent decades. The change has contributed to rising emissions from both vehicles and factories, especially coal-fired power plants, and an emerging middle class that increasingly desires a range of consumer goods that are common in Europe and the United States.
Southeast Asia has encountered similar problems in recent decades as its economies and populations have boomed. In fact, according to the WHO, nearly one million of the 3.7 million people who died from ambient air pollution in 2012 lived in southeast Asia.
But on top of smokestacks and tailpipes, the region faces an added burden: smoke haze produced in Indonesia that is a by-product of the world's $50 billion palm-oil industry.
