NEWS,11.11.2012

What did they learn?

The 2012 presidential election shattered spending records, further polarised a divided country and launched a thousand hashtags. The race appeared to be a nail-biter going into Tuesday night but in the end, it came down to the state that most had been saying for weeks that it would Ohio.

Here are five things we learned from Tuesday:

1. The GOP has a Latino problem

"If we don't do better with Hispanics, we'll be out of the White House forever," says Republican strategist and CNN contributor Ana Navarro, who was the national Hispanic co-chair of Senator John McCain's 2008 presidential campaign.

"The big issue Republicans are going to have to wrestle with is the Hispanic issue," adds Republican strategist and CNN contributor Ari Fleischer, who served as former president George W Bush's first press secretary. "Republicans are going to have to find a different way forward."

The national exit polls tell the story. Latinos are the fastest growing-segment of the population. Their share of the vote expanded from 9% in 2008 to 10% in this election. The president won 67% of the vote four years ago. He increased that to 71% this year.

Latinos were crucial in helping Obama win the battleground states of Colorado and Nevada, and in putting the president in the lead for Florida's 29 electoral votes. And they were just as important in turning the former swing state of New Mexico into what appears to be an increasingly safe state for the Democrats.

If the current trend continues, Arizona and Texas could turn from red to purple.

The 2012 election is a loud wake-up call for the GOP to change its stance on illegal immigration.

And that's being acknowledged by arguably the best known Latino Republican senator.

"The conservative movement should have particular appeal to people in minority and immigrant communities who are trying to make it, and Republicans need to work harder than ever to communicate our beliefs to them," said Senator Marco Rubio of Florida in a statement on Tuesday night.

2. The youth vote came up big and the white vote got smaller

A big question heading into Election Day was whether younger voters would show up at the polls.

More of them did than last time.

According to national exit polls, 18-29 year olds increased from 17% to 18% of the electorate from 2004 to 2008. They made up 19% of the electorate this time around. That jump in size from four years ago made up for the president's drop in capturing the youth vote, from 66% in 2008 to 60% in 2012.

It wasn't just age, but also race, that worked in the president's favor.

Obama's share of the white vote dropped from 43% four years ago to 39% this year. But that was negated by the shrinking of the white vote from 74% of the electorate four years ago to 72% now. And the African-American percentage of the electorate stayed steady at 13%. Some GOP strategists said that the white vote needed to be 74% for Romney to win.

"The youth vote and the black vote turned out once again and that's to the president's credit," Fleischer said.

3. The auto bailouts helped drive Obama to victory in Ohio

For months, the Obama campaign touted the taxpayer bailouts of General Motors and Chrysler, and they were given prominent prime-time placement during the Democratic National Convention in early September.

It's a strategy that the Obama campaign thought could be the difference in Ohio, a major base for the auto industry that eventually decided the election.

"The American auto industry is back on top," Obama said campaigning last week in the Buckeye State.

The bailouts were started under President George W Bush in 2008 but Obama grabbed the keys to the programme the next year, managing and funding the assistance.

Romney opposed the bailout and pushed for a privately financed and managed bankruptcy of the two automakers. The Obama campaign and other Democrats have attacked Romney over his opposition to the federal intervention, which aided the companies through their eventual bankruptcies.

And in the final weeks leading up the the election, the Obama campaign highlighted pushback by General Motors and Chrysler to a Romney TV ad and a radio spot this past week that claimed both domestic auto makers were sending US jobs to China.

It seemed to work. Nearly six in 10 Ohio voters said they approved of the federal government's role in helping the troubled domestic automakers, and according to exit polls, the president won three quarters of those voters.

4. Romney wasn't able to expand the map

Much was made of campaign visits by Romney and his running mate, Representative Paul Ryan, to Pennsylvania in the final weekend before the election, and Romney's return to the Keystone State on election day.

The Romney campaign and allied super PACs supporting the GOP nominee flooded Pennsylvania airwaves in the final weeks with a flurry of TV ads.

To a lesser degree, there was a similar push in Minnesota, another solidly Democratic state where public opinion polls tightened last month.

There was talk by Romney campaign officials of being on offense and of expanding the electoral map.

It didn't pan out.

While Romney performed stronger than 2008 Republican nominee John McCain in Pennsylvania and Minnesota, it wasn't enough. And of the swing states that swung blue four years ago, it appears Romney was only able to turn Indiana and North Carolina red again.

Romney's 'all' proved not enough

5. What will $6bn get you?

We had a Democratic president, a Republican House of Representatives, and Democratic Senate going into the 2012 election. And we'll have a Democrat in the White House, with a Republican House and a Democratic Senate after the election.

When all the bills are in, total spending for the 2012 election (all federal and state races) could top a record-breaking $6bn. And what did all that money buy?

Some would argue ... nothing.

 

Greece votes on budget to unlock aid

Parliament in Athens are preparing to vote on an annual budget that will cut spending and raise taxes yet again but which the government insisted will kill off talk of Greece being forced out of Europe's currency union.An anti-austerity demonstration called by major trade unions mustered thousands of protesters outside during the debate but a spokesman for conservative prime minister Antonis Samaras's coalition reflected confidence the government majority would see the 2013 budget bill pass, probably around midnight."With today's vote, we put an end to the Grexit talk," Simos Kediglou told a Greek television channel, using the term coined for the possibility Greece might force to exit the euro zone.The measure, following a separate package of belt-tightening approved last week, should ensure Athens receives further credit from international lenders and so avoid imminent insolvency.However, many of the 10 million Greeks, driven to despair by five years of debt-laden economic slump, fear attempts to cut the public deficit will only deepen the crisis and many poorer citizens say living standards in a country where unemployment is running at 25% are becoming hard to bear."All those measures throw us back 50 years," said Thymios Marvitsas, 75, during a communist protest march to parliament during the budget debate. "Our pensions and wages are cut. My life is getting harder and harder."Police estimated the crowd outside parliament at 13,000.Arguments about the wisdom of cutting spending have also divided the political establishment and today's vote poses a test of confidence in Samaras's three-party coalition.It managed to pass Wednesday's austerity and reform package by only a narrow majority after the smallest of the partners, Democratic Left, abstained. However, its leaders have said the party will vote for the 2013 budget and, with Samaras having nominal support from 168 of the 300 members, it should pass.Hours later, euro zone finance ministers meet in Brussels for talks likely to be dominated by the Greek crisis though a final decision on extended more credit is not expected.Securing both pieces of budget-cutting legislation has been a condition of renewing bailout funding and unlocking more than 30 billion euros in financing from the International Monetary Fund and European Union later this month.The government, formed after a tumultuous election in June, has ignored sliding poll numbers and occasionally violent street protests in pursuit of favour with its creditors."Today we must demand sacrifices so there is hope for future generations," Finance Minister Yannis Stounaras told parliament on Saturday. "Re-establishing our credibility is our only passport to recovery."For the opposition, Panagiotis Lafazanis of the leftist SYRIZA party, responded: "For three years you have been going from bailout to bailout, rescue to rescue."You've already bankrupted the Greek people."According to the budget draft, the Mediterranean state's economy will shrink for its sixth year running, by 4.5%.The budget deficit will be 5.2% of gross domestic product (GDP), down from 6.6% expected this year. But once the cost of paying interest on its huge debt is removed, Greece will show a tiny surplus for the first time in decades.These deficit figures assume Athens's lenders will extend a deadline for it to narrow its fiscal shortfall by two years in exchange for the new belt-tightening package.The biggest cost-reductions next year are pension cuts of up to 15% for almost half the total 9.4 billion euros in budget savings and public wages cuts of 1.2 billion.Greece's fiscal adjustment has hit workers more than the wealthy elite. This has become a sore point in a nation where media have published lists of bankers, lawyers and shipping magnates who they say have moved cash to Switzerland."It's always the same. The poor pay and no one touches the rich and the tax evaders. Winter is coming and I can't afford heat," said 41-year-old housewife Angeliki Petropoulou.

Brics eye $240bn forex reserves pool

Leading emerging market countries are discussing pooling up to $240bn in foreign exchange reserves to protect themselves from short-term liquidity pressures, according to documents outlining plans by the five Brics nations.Brics countries China, Russia, India, Brazil and South Africa announced a working group in June to look into jointly pooling reserves and creating a new development bank to fund infrastructure projects in the developing world.According to the documents, the pool of central bank money would be available to Brics facing balance of payments difficulties. Some, however, are also pushing for a precautionary credit line, similar to the IMF's that provides countries with insurance against outside economic shocks.The move is part of growing frustration among the Brics and other developing countries with the continued dominance by the United States and European countries of global institutions like the International Monetary Fund and World Bank.Brics officials meeting on the sidelines of a recent G20 summit of finance ministers from developed and developing nations sought to advance their plans ahead of a Brics leaders' summit in South Africa in March.Planned currency swap arrangements would also give Brics the ability to lend to each other to keep markets liquid. fficials at the G20 Brics meeting, who spoke on condition of anonymity, said China had emphasised that the size of the reserve pool needed to be sufficiently big to be taken seriously by markets.Officials believe that the Brics reserve pool should be similar in size to the Chiang Mai Initiative of southeast Asian countries, which was doubled to $240bn in May to boost their protection against external shocks. The Chiang Mai program, first agreed in 2000, has never been put to use because it would require the country to request a program from the IMF, which was blamed for insufficient bailouts during the Asian currency crisis of 1998.Eswar Prasad, a Cornell University economics professor and senior fellow at the Brookings Institution in Washington, said the proposed plan for pooling resources posed a "strong and serious challenge to existing global monetary arrangements.""Irrespective of the logic and possible complications of these schemes to pool their funds, these proposals from the Brics may have the salutary effect of prodding global monetary reforms along at a faster pace," Prasad said.Countries like China are keen to see its currency, the yuan, added to the IMF basket of currencies, currently including the pound, yen, euro and dollar, that make up the IMF unit of account, the Special Drawing Right.   While a number of the Brics believe disbursements from the reserve pool should be made in US dollars, others preferred to use the SDR. "In terms of disbursement, the preference would be to use the US dollar or other reserve currencies, but the view was also expressed that part of the disbursements could be made available in Brics national currencies," according to the documents.Discussions are also looking at what conditions should be attached to the reserve pool. One question is whether the scheme should be linked to an IMF program, which could be a bitter pill to swallow for any of the Brics. Some Brics are arguing for a partial link to the IMF, with an initial quick disbursement subject to rules of the pooling. The Brics are also considering creating a new development bank to support financing of long-term infrastructure projects for emerging and developing economies, to meet the pressing need for roads, railways, ports and electricity.The Brics bank would be in competition with the World Bank and other multilateral development banks, which also provide loans for infrastructure projects. However, countries like India are already facing limits on its borrowing from the World Bank.The Brics documents noted that existing multilateral development banks are under-capitalised compared to the growing needs of emerging economies and developing countries.The new bank would initially issue non-concessionary project-linked finance to members, meaning that the financing would be at a higher cost. A small window of low-cost loans could be considered as the bank expanded, the documents said.The World Bank and other institutions have long insisted that lending to poor countries should involve low-interest loans to avoid pushing up their debts to unsustainable levels.

NEWS,05.08.2012

Monti fears Europe could tear apart

Italian Prime Minister Mario Monti has voiced fears that tensions sparked by the eurozone crisis have already turned countries against each other and must not be allowed to rip Europe apart.Asked about resentment in Italy towards Germany and complaints of German arrogance in its handling of the debt crisis, Monti told Monday's edition of the German news magazine Der Spiegel that he was "concerned".He said he had talked about growing resentment in Italy not only towards Germany and at times Chancellor Angela Merkel but also towards the EU and the euro, with Merkel herself, according to an advance copy of Der Spiegel.But he said the problem went far beyond the relationship between Germany and Italy."The pressures, which have accompanied the eurozone in recent years, already bear the traits of a psychological breakup of Europe," Monti said. "We must work hard to contain it."And he warned that if the euro became a reason for Europe to drift apart, "the foundations of the European project" would be destroyed.The Italian prime minister also said he welcomed comments by the European Central Bank last week that the government bond market, where Italy and Spain's borrowing costs have soared, was distorted.The problems behind this, he said, must be quickly resolved to prevent further uncertainty about the ability of the eurozone to deal with the crisis.He also called on government chiefs to maintain clear room for manoeuvre in relation to their national parliaments. "If governments were to let themselves be bound completely by the decisions of their parliaments without maintaining their own scope for negotiation, Europe is more likely to break up than see closer integration," he warned.

Cayman Expat Tax: Haven's Planned Fee Could Damage Country's Economy

 

One among thousands of lawyers, accountants and other workers from around the globe, Paul Fordham is escaping cold weather and the taxman by working in a sunny British territory in the Caribbean. He and many others, however, worry they soon may be looking for another haven.The Cayman Islands have lost some of their allure by proposing what amounts to the territory's first ever income tax. And it would fall only on expatriate workers like Fordham who have helped build the territory into one of the most famous or, for some, notorious offshore banking centers that offer tax advantages for foreign investment operations."The discriminatory nature of the tax has stirred up so much uncertainty for people who moved here thinking they knew what they were getting into," said Fordham, an insurance sector specialist from the London area who moved to the main island of Grand Cayman 6 1/2 years ago. His recent attempt to sell his house collapsed because an interested buyer was spooked by the prospect of the islands' first direct tax.In the seaside capital of George Town, where financial experts in casually elegant clothes unwind over beer or white wine, conversations have been about little else since July 25, when Premier McKeeva Bush declared his intention to impose a 10 percent income tax on expatriate workers as part of an effort to bail the government out of a financial hole.Bush refuses to call it a tax, preferring instead to dub it a "community enhancement fee." The 10 percent payroll levy, as things stands now, will be imposed Sept. 1 on expatriates who earn more than $36,000 a year.It's a monumental shift for the territory of 56,000 people where zero direct taxation, friendly regulations and the global money they lured in recent decades helped transform the economy of the island chain, a dependency of Jamaica until 1959, from a reliance on seafaring, fishing and rope-making.Government data show 91,712 companies were registered as of March 2011. A total of 235 banks, including most of the world's top 50 banks, held licenses at the end of June as did 758 insurance companies. Assets for the registered companies totaled $1.607 trillion last September, down from $1.725 trillion a year earlier.Bush says the tax is necessary to meet British government demands that the territory diversify its sources of revenue beyond the fees and duties it now relies on, that have left his administration with a budget deficit."This is not an us-and-them story, no matter how many screaming headlines call this an expat tax," Bush told a crowd of critics and supporters late Wednesday during a four-hour meeting in a school gym, where each side vented complaints against the other.Opponents argue that a social contract may have been broken by targeting only the roughly 5,875 expatriates who are paid more than $36,000 a year, saying it could drive some away and hurt the financial services and tourism sectors that are now the pillars of the Caymans' economy. Government reports say a majority of the wealthiest residents are Cayman citizens.Numerous competing tax havens, from Jersey to the British Virgin Islands, impose income taxes on workers, but not on one sector of the population. Under a controversial "rollover" immigration policy, expatriates in the Cayman Islands already are required to leave the islands for a year after living and working locally for a period of seven years.Richard Murphy, director of British-based policy consultants Tax Research LLP, thinks fears are overblown that a direct tax on expatriates will cause an exodus."The finance industry in Cayman exists to sell to foreigners, and, like it or not, many are heavily invested in Cayman structures. They'll bear the additional price," Murphy said in an email.But leading businessmen argue that indirect taxes such as work permit fees, stamp duty on real estate deals and duties on imported goods already make the Caymans a relatively pricey place to do business. Work permit fees are typically 5 percent to 15 percent of salary and would remain along with the income tax, raising an expat worker's tax costs to between 20 percent and 30 percent of salary.Anthony Travers, chairman of the Cayman Islands Stock Exchange, described the tax plan as "probably the single greatest existential threat to the Cayman Islands in over 200 years.""The whole economic structure in the Cayman Islands has been based on having no direct taxation," he said in a phone interview.Many people complain that Bush's proposal was made without public consultation and note that it came roughly three years after a government-commissioned report said a payroll tax combined with the work permit fees would make the Caymans less competitive in the market for skilled professionals.And it's not just finance types who are troubled. At a small beach in downtown George Town, local fishermen gutted glistening jacks and snappers debated the merits of the new tax. They agreed that overspending and excessive hiring by the government was behind the islands' financial difficulties."The way I see it, this tax on expats is causing a division in this society and that's not good. It's too much spending by the government that got us here," said fishing boat captain Dennis Downs, sitting next to a table displaying the morning catch.Bush said he is looking for any feasible alternative for solving the government's revenue problems and rumors are swirling that he may withdraw the tax proposal because of the heated reaction.On Saturday, he told local TV station Cayman 27 that he was open to recasting the "community enhancement fee" on expats but only "if a solution can be found that does not affect ordinary Caymanians."Even if it is revoked, some believe damage has already been done."It has stirred up so much uncertainty," said Fordham. "It's hard to say if this place could ever be the same."

Venezuela Presidential Elections: Thumbprint Readers Stir Vote Fairness Fears

 

With President Hugo Chavez in his tightest re-election race yet, some of his opponents are warning that the use of thumbprint readers at Venezuelan ballot boxes could scare away voters, adding to fears about the fairness of the Oct. 7 vote.The country's electoral council has long used fingerprint scanners at the entrance to polling places to ensure voter identification. But this year, the readers will be hooked to the electronic voting machines themselves. Citizens must press down a thumb to activate the ballot system.Many say they fear that could let the government know how each person votes."If the thumbprint makes the machine work, how do you know it doesn't end up being recorded who you voted for?" asked Jacqueline Rivas, a 46-year-old housewife.Experts say there is no evidence the system has ever been used to reveal voters' preferences, and most opposition leaders, who stand to suffer if supporters don't vote, have been eager to assure the system is safe.But worries have persisted. Many Venezuelans say they see a pro-Chavez bias in the National Electoral Council and remember a previous scandal in which the names of Venezuelans who petitioned to recall Chavez in 2004 were publicly leaked. Hundreds of people alleged they were fired or suffered discrimination after their names turned up on the so-called "Tascon List," named after a pro-Chavez lawmaker who released it.Chavez later urged supporters to "bury the list" and put it behind them.Worries about the government obtaining the names of anti-Chavez voters led the opposition to destroy many lists of voters after a February primary, flouting a Supreme Court ruling that the lists should be turned over to the electoral council."A government that has fired people for thinking different, for voting different, that drew up the Tascon List and that puts out thumbprint machines, that puts in people's minds ... makes them fear the thumbprint," said Ramon Muchacho, an opposition politician.Opposition presidential candidate Henrique Capriles and his campaign aides have sought to assuage fears, saying that they are sure voters' choices will remain secret and that no one should cave to any government attempts at intimidation.Others who question the thumbprint readers include the vote watchdog group Sumate. Ricardo Estevez, the group's executive director, said past checks of the system have shown that safeguards are in place to ensure secrecy. "But the problem is the perception," Estevez said.When a voter presses a thumb to the reader, the image is instantly checked against a government database of thumbprints, which are collected when citizens apply for national identification cards.The National Electoral Council has been touting the system in television ads that show a smiling man pressing a thumb onto the screen as a voice assures voters that the automated identification system is a "secure key to vote."Sumate and other critics question how effective the system is, pointing to the statements by election officials that the thumbprint data are incomplete and saying the voter rolls haven't been audited to weed out errors and duplicate registrations.Diego Arria, a Chavez opponent who is a former Venezuelan ambassador to the United Nations, said the thumbprint system won't ensure that each voter casts only one ballot. "But it will work for something, and it's the fundamental aim: to intimidate voters."In addition to public employees who may fear for their jobs, there are also more than 1 million Venezuelans who have given their thumbprints when they applied for public housing, Arria said. "It serves to scare them."Even critics who say they're confident the vote will remain secret worry about the fairness of the election campaign, saying the electoral council tilts in Chavez's favor.Four of the five members of the council are either Chavez allies or perceived as favoring the president. The National Assembly, where Chavez backers have long held a majority, appoints the council members, who include a former congresswoman from Chavez's party and a former minister in his Cabinet. The council's former chief, Jorge Rodriguez, is now Chavez's campaign manager.The council has largely ignored opposition complaints that Chavez is hogging campaign airtime and abusing his presidential authority by regularly forcing all Venezuelan TV and radio stations to interrupt programming for his marathon speeches.Last week, council Vice President Sandra Oblitas accused Capriles of "contempt of the electoral authority" for ignoring council warnings about using a baseball cap with the colors of the national flag. Campaign regulations ban use of the flag's colors in electoral propaganda, but Capriles maintains he has done nothing wrong."In Venezuela, there's no electoral referee. There's a ministry of elections of the regime," Arria said. "When such a sophisticated system is put in their hands, it makes it more dangerous. "Tibisay Lucena, the president of the electoral council since 2006, insists the body is fully independent and defends the country's automated voting system, which also involves manual auditing of paper receipts printed out by the ballot machines."The Venezuelan electoral process is one of the most audited in the world," Lucena told reporters recently. "We have controls that make impossible any attempt to interfere with the public will."Capriles has been trailing in the polls, though the margin has varied widely in surveys. The Venezuelan polling firm Datanalisis found Chavez with a 15-point lead in one June poll, but also said 23 percent were undecided or didn't reveal a preference. The poll had a margin of error of nearly 3 percentage points."Beyond the automated system and other factors, we have no doubt that if we have low abstention and the presence of witnesses in all the voting centers, we're going to win," said Teresa Albanes, who leads the opposition's election commission.