L'Humanite: Thousands of Judges under Arrest [feedly]

Thousands of Judges under Arrest
http://www.humaniteinenglish.com/spip.php?article3009

Thousands of Judges under Arrest

Translated Wednesday 20 July 2016, by Henry Crapo

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After the failed "coup d'état", the purge continues in the army and in the justiciary. 9000 civil servants have been fired. A European commissioner expresses his belief that "we at least have the impression that something had been prepared in advance".

It was Turkish President Recep Tayyip Erdogan's dream. With the coup aborted, he can realize it: almost 9 000 employees of the Turkish Ministry of the Interior, mostly police and gendarmes, have been dismissed. A provincial governor and 29 governors of municipalities have also been laid off, the agency adds. Some 6000 members of the military have also been placed in custody and nearly 3000 arrest warrants have been issued against judges and attorneys. Officially, this house-cleaning is aimed at people suspected of links with the exiled preacher in the United States, Fethullah Gülen, accused by the president Erdogan of plotting the coup attempt; Gülen categorically denies it. But in reality, he who is often called "the new sultan" has shifted into high gear toward what is his main goal: to strengthen presidential powers, to redraw the political-administrative map more to his liking, and to restore the death penalty. The Peoples Democratic Party (HDP) is opposed to this; they demand that the rule of law be protected.

The unpreparedness of the putschists and their amateurism

These are not merely speculations. Since the events that occurred on Friday night, many questions have arisen. And the attitude of power only serves to strengthen these concerns. One can also be amazed by the unpreparedness of the coup plotters, or, in any case, by the amateurism that led them not to follow the basic rules of the coup, including that of neutralizing the number 1 in the country. Instead, Recep Erdogan was able, via video-conferencing equipment, to contact the country and then to get on a plane from his resort town to reach Istanbul, where his supporters were waiting. The coup leaders did not seek to block the garrisons that were not in revolt, nor the areas where special forces were based. An attempted coup in haste, without much chance of success, therefore. At this stage, one can legitimately ask whether the domestic intelligence services, which remained loyal to the central government, simply let the coup proceed, in order to trigger the current "cleansing" operation in the administration and the army. Especially as, be it connected with Fethullah Gülen or not, in a very recent meeting of the military council, dissension had appeared among the staff.

"One has at least the impression that something had been prepared. The lists (for arrests - Ed) were ready, suggesting that they were prepared to serve at one time or or another. I am very concerned. This is exactly what we feared," said even the European Enlargement Commissioner, Johannes Hahn. An unusual tone that is found among many European leaders, starting with the French Foreign Minister, usually more discreet with regard to Turkey. "For the future (...) we want the rule of law to be fully functioning in Turkey; this is not a blank check to Mr. Erdogan," said the head of French diplomacy on France 3. The Europeans will remind him (...); in Brussels, we will talk about Turkey and insist that Turkey must also comply with European democratic standards. No purges; the rule of law must apply." Even more surprisingly, asked to say if Turkey remained a reliable ally in the fight against the jihadist organization, Jean-Marc Ayrault said: "There are questions that have been posed, and which we will pose. There is a some question of reliability, and some part of suspicion, I must say in sincerity. "

With these new developments, Recep Erdogan now wants to go right to the end, even engaging in a standoff with the United States on the extradition of Gülen, all the while calling for the mobilization of his supporters. For months, Erdogan has attacked all forms of dissent in the country. Journalists and press are prime targets, not to mention his violations of parliamentary law, aimed at members of the HDP.

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We append a translation of a recent article by reporter Thierry Meyssan, as published in Al Watan.

Manipulation in Turkey

by Thierry Meyssan

President Erdoğan is a product of the Millî Görüş, an Islamist militia that supported the jihadists in Russia in the 90s and hatched a coup in 1999.

In 2003, Recep Tayyip Erdogan became prime minister of a member state of NATO.

In 2011, the Erdoğan government signed a secret treaty with France, involving it in the wars against Libya and Syria in exchange for the "right" to expel its Kurdish population into a state that would be created for the occasion.

In 2012, President Erdoğan took over Prince Bandar bin Sultan's role as coordinator of jihadist networks.

In 2013, President Erdoğan took over the role of Emir Hamad of Qatar in sponsoring the Muslim Brotherhood. He then moved to Izmir the headquarters of Land Forces Command of NATO, the Landcom, which coordinates the war against Syria.

In 2014, the Erdoğan government participated in the transformation of the Islamic Emirate in Iraq by providing the 80,000 fighters of the Iraqi brotherhood Naqchbandis, the group that had created the Millî Görüş in Turkey.

Also, the attempt to overthrow the Erdogan government appeared to be the end of the war against Syria. Yet, it would simply disorganize the international coalition for the time necessary for the different functions of President Erdoğan to be re-assigned to other leaders.

The military involved in the July 16 events have been betrayed from within: no regime personalities have been arrested, neither Hakan Fidan, nor Recep Tayyip Erdoğan. Those who took the premises of national television TRT made the fine announcement that they controlled the country, but none of the strategic objectives had been targeted. There have been many rumors, but no trace of a coup, save perhaps by those who attacked the empty buildings of the National Grand Assembly; traces of which attack now appear as a warning to the Deputies.

No leader of the coup has made contact with the opposition to join in forming a new regime, so that the latter, frightened at the idea of ​​the possible return of a military dictatorship, joined ranks with their enemy, the AKP.

Even before the end of the attempted coup, President's Erdoğan's men arrested the gendarmerie officers who had opposed him, but were in no way involved in the coup. By the time it was over, they not only had arrested the plotters of the coup, but also more than 7000 other people, sacked more than 8000 officials, suspended 2700 judges and the Vice President of the Constitutional Court. The lists of their names had long been waiting in the white Palace. The great purge of followers of Fethullah Gülen continues.

The United States seemed most surprised by this betrayal. After consulting the former president Abdullah Gül, then a magistrate, as possible successors of the president, they aided the Peoples Democratic Party (HDP) during the rigged elections of November 2015, and recently a magistrate. Clearly, they were informed in advance of the coup and were rejoicing. France, also aware, had closed its embassy and consulate on the evening of July 13.

Having now destroyed his opposition, President Erdoğan can continue unhindered to lead his country along the road of the Sultan Abdühamid II and of the Young Turks: ethnic cleansing.

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Will Fear Strike Out? [feedly]

Case: I wonder who Krugman imagines he s talking to in this article?

Will Fear Strike Out?

http://krugman.blogs.nytimes.com/2016/07/22/will-fear-strike-out/

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Poverty and income predictions for 2015 [feedly]

Poverty and income predictions for 2015
http://jaredbernsteinblog.com/poverty-and-income-predictions-for-2015/

I know–why predict 2015 outcomes. That's last year, right?

Right. But the Census Bureau publishes estimates of household income and poverty results with a lag. This year, their results for 2015 will come out on Sept. 13. I'll write them up that day, as is my wont, but for reasons I can't explain, I always like to try to forecast them.

My track record isn't great. Last year, I was fairly confident that poverty fell in 2014, but it held at 14.8%, meaning that's the share of the population with 2014 incomes below the poverty thresholds (plural because the thresholds change by family size). However, the 2014 results were somewhat ambiguous because Census did some redesigning of their income questions. There may have been some comparability issues with the samples used to compute the changes in poverty and income.

(I took some solace in that my forecasts matched the results from a different Census survey–the American Community Survey–which comes out a couple of days after the one discussed here. I think the ACS data were more reliable last year.)

This year, I'm moderately confident that I'm right, at least directionally. My forecasts are:

–poverty fell half-a-percentage point, from 14.8% to 14.3%.

–real median HH income rose 1%.

The poverty change would be statistically significant; the income change would not be.

For a variety of reasons, we could see more of an upside than a downside surprise–i.e., a greater fall in poverty and rise in income than I'm predicting. For one, I think the survey changes may have missed the decline in 2014, so there's some pent-up juice there. For another, inflation was almost 0 last year, and that turns out to matter in these data.

The poverty thresholds are adjusted by the rate of inflation. So if inflation is very low, the thresholds hardly change at all. Meanwhile, people's nominal incomes tend to rise year-over-year, especially when the job market's tightening, as it was in 2015. That should push up the real HH median income and bring down the poverty rate.

My model runs off of mostly inflation and labor market variables, and since I have these outcomes for 2015, I can make the prediction.

So, based on very low inflation and the growth in jobs and real wages last year, I think the results will be a marked improvement over last year's. That doesn't imply happy days, ftr. After six years of recovery, both variables will still have not returned to their pre-recession levels back in 2007.

The politics of this are always interesting in an election year. The R's just finished a convention that painted what I'd bet is the most negative picture of America ever to come out of party's nomination process. If I'm in the ballpark, the results may cause some dissonance, though that assumes an acceptance of data/facts–a strong assumption, indeed.

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In Transition: The Outlook for Latin America and the Caribbean [feedly]

In Transition: The Outlook for Latin America and the Caribbean
https://blog-imfdirect.imf.org/2016/07/20/in-transition-the-outlook-for-latin-america-and-the-caribbean/

NOTES

Add note

By Alejandro Werner

Versions in: Português (Portuguese),  Español (Spanish)

Following a rough start at the beginning of the year, both external and domestic conditions in Latin America and the Caribbean have improved. But the outlook for the region is still uncertain.

Commodity prices have recovered since their February 2016 trough, but they are still expected to remain low for the foreseeable future. This has been accompanied by a brake—or even a reversal—in the large exchange rate depreciations in some of the largest economies in the region.

Most recently, the U.K. referendum on Brexit led to a sharp increase in volatility in global financial markets, especially in equity prices and exchange rates. While direct trade exposures of countries in Latin America and the Caribbean to the U.K. are small (on average about 1 percent of total exports), the region is exposed to the broader slowdown in the rest of the world—through trade and financial linkages—and fickle investor sentiment. At the same time, however, a more gradual pace of monetary normalization in the United States, with compressed U.S. term premium, should help contain funding cost pressures for both the public and private sector.

Taking all this into account, the growth outlook for the region for 2016 and 2017 has been revised up modestly—by 0.1 percentage points both years relative to the April 2016 forecasts (see table). Following the small contraction of activity in the region in 2015, we expect economic activity to contract by 0.4 percent this year (slightly better than the -0.5 percent envisaged in the April 2016 projections), followed by a modest rebound in growth in 2017 to 1.6 percent. But frequent bouts of increased financial market volatility, even if short-lived, are a constant reminder that benign market conditions can flip overnight. Such global volatility could also feed into corporate sector vulnerabilities, given increased debt burdens and lower profitability.

Mixed growth performance

Growth performances continue to differ across the region, due to a combination of external and domestic forces.

South America: an interplay between trade and domestic factors

Chile, Peru, and Colombia continue an orderly adjustment in response to a relatively sizable terms-of-trade shock (sharp drop in export revenues).

Chile's growth outlook was revised slightly up to 1.7 percent in 2016 as momentum into the year was stronger than anticipated. The investment outlook, however, remains weak, with lower and more uncertain copper prices stalling mining investment, and weak external demand and uncertainties related to an incomplete delivery of the reform agenda delaying non-mining investment. Overall, monetary accommodation and a credible fiscal framework have helped smooth the impact of low copper prices and weak global demand.

In Peru, growth has been supported by increased production in primary sectors, as long-planned mining projects came online, and is expected to gain further momentum in 2016 (3.7 percent) and 2017 (4.1 percent). Continuing with education reforms, increasing labor market flexibility, reducing red tape, and rationalizing fiscal decentralization are the policy priorities.

In Colombia, a coordinated fiscal and monetary policy tightening will help contain the current account deficit and inflationary effects from weather-related and exchange rate shocks. Recent advances in the peace process have increased prospects of a near-term final agreement, which would further boost market confidence and spur growth. The authorities' infrastructure agenda is on track and should also help boost growth over the medium-term.

In Brazil, GDP continued to contract in the first quarter, but by a lesser extent than expected, implying that the widely anticipated contraction for 2016 will be less sharp than previously envisaged. The economy is expected to hit bottom this year, and 2017 should see some positive growth in economic activity, although the elevated level of unemployment will be a drag on domestic demand. The interim government has outlined a gradual deficit reduction strategy that aims to curtail unsustainable spending pressures over the medium term. The proposed consolidation strategy has been broadly welcomed by markets, and the government needs to focus on overcoming implementation challenges.

In Argentina, the transition to a more coherent and credible macroeconomic policy framework continues, and should bolster medium-term growth prospects, although the adverse impact on activity in the near term has been greater than previously expected. The relative price adjustment in the first half of 2016—following the exchange rate depreciation and increase in utilities tariffs—has accelerated inflation and hurt private consumption. Economic activity is now likely to begin recovering toward the end of 2016, as inflation moderates gradually, spending is boosted, and interest rates are lowered. The easier monetary and fiscal policy stance is expected to support growth in 2017, but would make meeting inflation and fiscal targets announced earlier this year more challenging.

In Ecuador, in addition to the adverse impact of the April earthquake, the economy continues to endure the effects of low oil prices, a strong U.S. dollar, and tight financing conditions. It is expected to contract this year, but at a milder pace than projected earlier, due to the relative recovery in oil prices and more availability of external financing (mainly from China). Financing provided by the IMF under the Rapid Financing Instrument should help the country meet balance of payments needs due to the damages caused by the earthquake.

In Uruguay, growth has come to a virtual halt. However, with inflation well above the target range and public debt rising, there is little room for countercyclical policies. Efforts should focus on structural reforms, such as improving the quality and enrollment of secondary education, upgrading infrastructure, and enhancing labor market efficiency to better tie wages to productivity, to boost the economy's productive potential.

Venezuela's economic condition continues to deteriorate, as policy distortions and fiscal imbalances remain unaddressed. Economic activity is expected to contract by 10 percent in 2016, and inflation is expected to exceed 700 percent, marking the worst growth and inflation performance in the world.

Mexico, Central America, and the Caribbean: benefiting from the U.S. recovery

Mexico is expected to continue growing at a moderate pace, although a relatively weak performance of U.S. industrial production would increase risks. It will be important to proceed with planned fiscal consolidation and the restructuring of Pemex (the state-owned oil company) to maintain market confidence. The central bank increased policy rates recently to ensure that inflation remains close to the target. In the context of ongoing fiscal consolidation and well-anchored inflation expectations, it would be important to keep the monetary policy stance relatively accommodative.

Central America and the Dominican Republic have continued to benefit from low oil prices, a stronger U.S. growth, and higher remittances, despite a small downward revision related to the the U.S. outlook. These countries should use the relatively favorable external conditions to strengthen their fiscal positions (Costa Rica, El Salvador), protect financial stability (Honduras, Panama), and adopt reforms to boost potential growth.

Likewise, tourism-based countries in the Caribbean are benefiting from the U.S. recovery, although risks are increasing from Zika, the withdrawal of global banks, and Brexit. Conversely, still low commodity prices continue to weigh on growth prospects for commodity-based economies in the Caribbean. Addressing fiscal vulnerabilities, strengthening the financial sector, and boosting long-run growth are the key policy objectives for most countries.

How to stabilize and boost growth

Given the sizable terms-of-trade shocks and increased volatility in global financial markets, exchange rate flexibility remains the first line of defense. Reassuringly, in countries with well-established inflation-targeting frameworks, large exchange rate depreciations have had a relatively limited pass-through to domestic inflation (see Chart 1). Clear central bank communication continues to be key in keeping inflation expectations well anchored.

Fiscal space remains limited across most countries in the region, and particularly so for commodity exporters, given still low commodity prices and recent bouts of volatility. Preserving policy buffers remains vital in case further risks materialize. A faster pace of adjustment is warranted for countries with large debt burdens and sizable market pressures (see Chart 2). Countries benefiting from a positive external environment and decent growth should also use this period to strengthen their fiscal positions.

Finally, now would be the right time to address bottlenecks to reinvigorate potential growth in the region. Policies aiming at improving education and infrastructure, and strengthening the rule of law would help support growth and increase resilience to shocks.

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In Defense of Equality (without Welfare Economics) [feedly]

In Defense of Equality (without Welfare Economics)
http://economistsview.typepad.com/economistsview/2016/07/in-defense-of-equality-without-welfare-economics.html

Branko Milanovic:

In defense of equality (without welfare economics): When I taught recently at the Summer School at Groningen University, I began my lecture on the measurement of inequality by distinguishing between the Italian and English schools as they were defined in 1921 by Corrado Gini...

I put myself squarely in the camp of the "Italians". Measurement of income inequality is like measurement of any natural or social phenomenon. We measure inequality as we measure temperature or height of people. The English (or welfarist) school believes that the measure of income inequality is only a proxy for a measure of a more fundamental phenomenon: inequality in welfare. The ultimate variable, according to them, that we want  to estimate is welfare (or even happiness) and it is distributed. Income provides only an empirically feasible short-cut to it.

I would have been sympathetic to that approach if I knew how individual utility can be measured. There is, I believe, no way to compare utilities of different persons. ... The only way for the "welfaristas" to solve this conundrum is to assume that all individuals  have the same utility function. This is such an unrealistically bold assumption that I think nobody would really care to defend it...

Now, the welfarst approach continues to be associated with pro-equality policies. Why? Because if all people have the same utility function, then the optimal distribution of income is such that everybody has the same income. ...

My students then asked how I can justify concern with inequality if I reject the welfarist view which is the main ideological vehicle through which equality of outcomes is being justified. (A non-utilitarian, contractarian alternative is provided by Rawls. Yet another alternative, based on equal capabilities—a close cousin to equality of opportunity (of which more below) is provided by Amartya Sen.)

My answer was that I justify concern with income inequality on three grounds.

The first ground is instrumental: the effect on economic growth. ...

The second is political effect. In societies where economic and political  spheres are not separated by the Chinese wall (and all existing societies are such), inequality in economic power seeps and ultimately invades and conquers the political sphere. ...

The third ground is philosophical. As Rawls has argued, every departure from unequal distribution of resources has to be defended by an appeal to a higher principle. Because we are all equal individuals (whether as declared by the Universal Charter of Human Rights or by God), we should all have an approximately equal opportunity to develop our skills and to lead a "good (and pleasant) life". Because inequality of income almost directly translates into inequality of opportunities, it also directly negates that fundamental equality of all humans.  ...

I have to say here that in addition inequality of opportunity affects negatively economic growth...

My argument, if I need to reiterate it, is: you can reject welfarism, hold that inter-personal comparison of utility is impossible, and still feel very strongly that economic outcomes should be made more equal—that inequality should be limited so that it does not strongly affect opportunities, so that it does not slow growth and so that it does not undermine democracy. Isn't that enough?

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From newyorker.com: A Surprising Coalition Brings A New Leader To Peru

A Surprising Coalition Brings A New Leader To Peru
http://www.newyorker.com/news/news-desk/a-surprising-coalition-brings-a-new-leader-to-peru

Medicare Leads in Controlling Health Costs [feedly]

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Medicare Leads in Controlling Health Costs
// Center on Budget: Comprehensive News Feed

Medicare has been the leader in reforming the health care payment system to improve efficiency and has outperformed private health insurance in holding down the growth of health costs, as we note in our newly updated report on Medicare's finances.  Since 1987, Medicare spending per enrollee has grown by 5.7 percent a year, on average, compared with 7.0 percent for private health insurance.  (See figure.)

 

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