Monday, August 24, 2015

Sri Lanka Elections : Verdict for Progressive Change

The hung Parliament comes as a blessing in disguise for Sirisena-Ranil tie-up. They decided to swim or sink together ever since UNP proposed the former as the common opposition presidential candidate. The Presidential poll was the first step in political partnership and now they have taken the second step. In this marriage of convenience they both need each other even more now than in the past eight months.

by Seshadri Chari

( August 24, 2015, New Delhi, Sri Lanka Guardian) Trust the electorates in Sri Lanka to vote on the predicted lines! It was widely speculated that it would be a hung Parliament with no party or coalition getting majority. At a time when politicians are not expected to keep pre-poll promises, Sri Lankan President Maitripala Srisena declared Parliamentary elections as promised by him thereby drawing the attention of the world once again towards the Island’s keenly contested elections. His quitting the party and contesting against his one time leader and also winning made him a political heavyweight overnight. But soon afterwards, his ambivalence on his predecessor’s political come back remained the talk of the town.

Sri Lanka Elections Verdict for Progressive Change by Thavam Ratna

President says ‘anybody can sit in the opposition’ while retaining his right to annul M.P. positions of mischief makers

(Lanka-e-News- 24.Aug.2015, 10.20AM) ‘Those who are not ready to join with the united government can sit in the opposition without forming factions,’ president Maithripala told categorically to the SLFP M.P.s yesterday at the meeting held with their participation. Previously, several pro Mahinda extreme racist SLFP M.P.s via the facebook had expressed they would sit in the opposition.

A constitution affairs expert speaking to Lanka e news said , if these troublesome M.P.s act in breach of party policies, there are legal provisions to annul their parliamentary positions. His analysis in a nutshell is hereunder :

In the past this had happened in respect of a majority of MPs who pole vaulted from the opposition to the government side. The presidents of those governments granted ministerial portfolios to all of them. Under the 1978 constitution, those who cross over lose their M.P.posts. This is primarily because an M.P. is elected to parliament on the votes of the party which is considered first, and therafter the preferential votes are taken into account , and hence if the M.P. thereafter acts in breach of the party policies, the constitution stipulates , the party secretary can expel that defector from the party and appoint the next in line who has polled the highest number of preferential votes.

Nevertheless, these defectors escaped from this punishment and could circumvent the law because of a court decision given by ex chief justice (CJ) Sarath N Silva. The latter based his decision on the legal right the president has to summon any M.P. and give him a ministerial portfolio.

According to that judgement, such a defector securing a minister post is compulsory, and his M.P. position too is safeguarded. Owing to that the cabinet swelled into a mega cabinet (‘swollen headed’ cabinet), and pole vaulting from one party to another became a ‘sport and play’ for local politicians.

Today , changes have been effected to this somersaulting culture, and that cannot happen now. Those MPs who occupy the opposition benches shall not be appointed as ministers. Accordingly they cannot enjoy the advantage granted under Sarath Silva verdict . Hence if they act in contravention of the party disciplinary laws under the 1978 constitution , they can be expelled by the party secretary.

In the circumstances, from tomorrow, if the MPs who sit in the opposition act counter to the views of SLFP and UPFA president Maithripala Sirisena , a disciplinary proceeding can be instituted against them, and if they are found guilty, only a letter addressed to the Elections commissioner dismissing that particular M.P. is all what is necessary. The Elections commissioner after annulling that MP’s post based on that letter, then appoints the next in line in the preferential voting list to succeed the dismissed M.P.

Not only the SLFP M.P.s, even all the UPFA M.P.s elected under the betel symbol who sit in the opposition , if they violate the stipulations in the agreement signed by the United Government , they all become liable to dismissal compulsorily, the legal expert on constitutional affairs who made an analysis from a legal perspective revealed to Lanka e news.

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by (2015-08-24 04:58:05)

Dullas oppose giving the opposition leader post to Sampanthan

Aug 24, 2015

Dullas Alahapperuma has vehemently opposed a proposal by a group of SLFPers that it would be better if TNA’s R. Sampanthan is appointed opposition leader.

Alahapperuma also expressed strong reservations to another suggestion by Dilan Perera and others that the ethnic issue should be resolved within a unitary Sri Lanka.

Presidential advisor Ashoka Abeygunawardena sided with Alahapperuma.

Following a lengthy discussion, the SLFP has decided not to make any references to the ethnic question.

Alahapperuma also told the SLFP MP-elects that he was totally against the formation of a national government.

He said he would work to fulfill the opposition’s responsibility of forming an alternative to Ranil Wickremesinghe government.

President Maithripala Sirisena asked that the SLFP central committee’s policy decision to support a national government be not criticized.

He warned that he would have to act against anyone opposing the decision.

Scandalous Abuse Of National List Provision

By Ameer Ali –August 24, 2015

Dr. Ameer Ali

The constitutional provision for appointing members to the parliament through the national list is based on a very sound democratic and ethical principle. It is a measure to rectify an unfortunate shortcoming arising from the way parliamentary democracy functions. Party-based parliamentary elections do not always produce the most desirable results. The candidates who contest the elections and win, either under a party ticket or as independents, may be popular with the voters for all sort of reasons but some of them may not have the intellectual capacity and ethical and moral composure expected of them to contribute meaningfully to the debates in the parliament and to the formation of sound and positive national policies. The national list provision therefore enables the parties concerned to fill this gap by bringing in personalities to the parliament through the backdoor who would otherwise remain reluctant to enter and face the rough and tumble of electioneering. Such individuals would have the intellectual calibre and moral and ethical principles to make invaluable contributions to the affairs of the nation. Such people are badly needed as leaders in Sri Lanka and the country is not bereft of such personalities. They are available in all ethnic communities.

In the past, when the Sri Lankan parliament operated under the bicameral legislature system the Senate or the Upper House performed that function. Without mentioning names I can vividly remember the contributions made by some of those senators in debating such crucial issues like citizenship, national language and nationalization. In the current system the National List provision is an adequate substitute to that type of representation.

Gota grilled for six hours

Tuesday, 25 August 2015

Ex-Defence Secretary quizzed on release of 500 Rakna Arakshaka Lanka staff for election work during presidential poll; lease of weapons

Former Defence Secretary Gotabaya Rajapaksa was grilled for six hours yesterday by the Special Presidential Commission Investigating Large-Scale Fraud and Corruption to answer allegations pertaining to Rakna Arakshaka Lanka Ltd. (RALL), a security company set up by the Ministry of Defence during his tenure.
The former regime strongman entered the Commission offices at 10 a.m. and left around 4 p.m. after officials recorded his evidence 02-2

about several misappropriations and irregularities at RALL.
Rajapaksa told reporters after his six-hour grilling that he had not been issued notice to return before the Commission.
“I was questioned regarding Rakna Arakshaka Lanka,” the former top official said as he left the BMICH offices of the Commission.
The controversial commercial enterprise founded under the auspices of the Defence Ministry has been implicated in major corruption scandals, including the lease of State-owned weapons to the private maritime security company, Avant Garde, without Cabinet or Parliamentary sanction.
Speaking to reporters, Secretary to the Commission Lacille De Silva said the former Defence Secretary had been questioned regarding the alleged release of 500 employees of RALL for election work during the last presidential election.
De Silva said those vacancies had been filled with personnel from the Civil Defence Service, who had been made to wear different uniforms and serve in the Government affiliated limited liability company.
The Special Commission had also quizzed Rajapaksa on allegations that RALL weapons that were property of the Government had been leased to other entities.
President Maithripala Sirisena set up the Special Presidential Commission of Inquiry to investigate allegations of large scale fraud and corruption in State institutions over the past five years.
The Commission is chaired by Chairman High Court Judge Preethi Padman Surasena, and comprises Judges Amendra Seneviratne, Vikum Kaluarachchi and Gihan Kulathunga and retired Auditor General A.P. Prematilake. (DB)

Rajapakses used BOC Seychelles branch for money laundering: FCID unearths copious information; Gota before Pres. Commission

(Lanka-e-News -24.Aug.2015, 11.30) The Financial crimes invetsigation department (FCID) that is conducting investigations based on a complaint had unearthed a wealth of information regarding the colossal sums of money earned fraudulently via robbery of public funds by the Rajapakse family which have been remitted to Seychelles Island and are with the Seychelles State . It is also revealed that the Bank of Ceylon branch which was opened in Seychelles some time ago has been used as a center for their money laundering activities.

With a view to obtain the relevant files and the details of the account holders in connection with the complaint , the FCID had submitted a B report B-663/15 to the Fort magistrate.

Investigations had disclosed that there is no valid reasonable ground to open a Bank of Ceylon branch in Seychelles. Yet , from the beginning , when considering the money exchange that took place, a massive sum in excess had been exchanged.

In the circumstances , it has come to light that the Rajapakse family had used the bank branch for its money laundering activities, and such monies have been used by the Rajapakse family.The FCID is also probing into the passengers who travelled to Seychelles via Mihin Lanka airlines , and the officers of the Seychelles bank branch are also being questioned.

Meanwhile Gotabaya Rajapakse is scheduled to appear this morning before the presidential commission which he was dodging for a while. A statement is to be recorded of his pertaining to his involvements with Rakna Lanka establishment.

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by (2015-08-24 18:34:50)

Kadawata -Mirigame highway deal to be fully investigated

- Aug 24, 2015

The UPFA charged that during the recent elections that the first phase of the Kandy - Colombo highway project was approved without following any proper tender procedure and awarded to MCC a Chinese company, the local owner is the well known deal maker Prabath Nanayakara.

According to them the First phase Kadawatha to Mirigama cost around Rs.140 Billion. Some of the UPFA parliamentarians allege that the project could have been done for around Rs 90 Billion .

The Chinese company MCC had benefitted immensely form this transaction. The contracts were negotiated by the well known deal maker Mr R Paskaralingam, a man previously found guilty by a Presidential Commission, strangely now made an Advisor to the Prime Minister.

UNP insiders say the Prime Minister is ruining his reputation for he is known for doing things in a very transparent way and Mr Paskaralingam would surely become the next Mahendran for the Prime Minister.

The UPFA parliamentarians have requested the President to investigate this transaction immediately and not to involve the Prime Minister in the investigations, they fear otherwise that like the Bond Fraud this transaction would also be hushed up by the Prime Minister's office.

A debate would also be called for in parliament in September according to UPFA sources.

Good Governance Activist

Dozens hurt as Beirut rubbish demos turn on government

Protesters and security forces have been injured in clashes over uncollected rubbish in Lebanon's Beirut

Lebanese riot police fire tear gas towards protesters during clashes following a "You Stink" rally (AFP)

Monday 24 August 2015 08:26 UTC

Protesters demanding the Lebanese government resign over its failure to remove uncollected rubbish from the streets clashed on Sunday with police in Beirut for a second day, leaving dozens injured.

The demonstration in downtown Beirut turned violent when around 200 youths entered Riad al-Solh Square, hurling projectiles at security forces who responded by firing tear gas and water cannon.

Officials said 43 protesters were hospitalised while 30 members of the security forces were also injured.

It came hours after Prime Minister Tammam Salam pleaded for calm and said he was ready to meet members of the "You Stink" protest movement which blames political divisions for the crisis.

Anger about rubbish overflowing in the streets since Lebanon's largest landfill was closed on 19 July boiled over on Saturday when thousands rallied outside the prime minister's office in central Beirut.

But Saturday's peaceful demonstration turned violent as protesters pelted police with water bottles and firecrackers, and police retaliated with tear gas, water cannon and apparent gunfire. Sixteen people were injured.

In response, Salam pledged to hold accountable those responsible for using "excessive force against civil society and against the people", but violence erupted again on Sunday.

Around 200 youths, some wearing scarves or masks to cover their faces, threw stones and bottles filled with sand at police and tried to pull down security barricades, an AFP correspondent said.

They also set on fire a motorcycle and tried to erect their own barricades.

Police retaliated with water cannon and tear gas.

A Red Cross official said 43 protesters were injured and taken to hospital, while another 200 people were treated on the spot.

A security official said 30 members of the Internal Security Forces were also injured, one seriously.

Shots also rang out near the prime minister's office, where thousands of people had also clashed the day before. It was not immediately clear if the shots were live fire, blanks, or rubber bullets.

Protesters chanted "Down with the regime" and "Freedom", slogans borrowed from the Arab Spring uprisings that toppled several governments in the region.

One demonstrator held up a placard with a message that read "Some trash should not be recycled" and below it the pictures of more than a dozen politician.

‘Political trash'

Videos posted online by protesters showed members of the security forces firing into the air and beating the demonstrators.

The "You Stink" movement insisted they were opposed to violence and distanced themselves from those attacking security forces.

"They're not among us... they're a very small group of troublemakers," said Joey Ayoub, who sits on You Stink's organising committee.

He said his movement had moved the protest from Riad al-Solh Square, where the clashes occurred, to nearby Martyrs Square "to show that we are not involved in this violence".

Ayoub said the movement's most pressing demand was for security forces to be held accountable for Saturday's use of force.

An online statement also called for the prosecution of Interior Minister Nuhad Mashnuq.

Furious demonstrators have posted videos and photos on social media of security forces firing into the air and beating back protesters during Saturday's unrest.

The prime minister tried to ease tensions, saying he was ready to meet with a You Stink delegation, saying "I am ready to listen to you and sit with you".

"We cannot allow yesterday's events to pass without accountability and follow-up," said Salam.

He called on Lebanon's cabinet to meet this week to find a solution to the crisis, railing against political divisions that have paralysed the country's institutions

Profound political rifts have kept Lebanon without a head of state since May 2014, leaving a caretaker cabinet -- also deeply divided -- in charge.

Salam said the country's trash crisis was the "straw that broke the camel's back."

"But the story is bigger than this straw. This is about the political trash in this country," he said.

Furious demonstrators have posted videos and photos on social media of security forces firing into the air and beating back protesters during the weekend's unrest.

- See more at: http://www.middleeasteye.net/news/dozens-hurt-beirut-rubbish-demos-turn-government-319577815#sthash.xUBQXq7U.dpuf

80,000 in UK demand Netanyahu arrest

In rejecting call for Netanyahu’s arrest during an upcoming visit to London, UK makes false statements justifying Israel’s attack on Gaza.

10 Downing Street

Ali Abunimah Rights and Accountability 24 August 2015

Almost 80,000 people have signed a petition at the UK Parliament’s website calling for the arrest of the Israeli prime minister when he comes to London for a planned visit next month.

If the number of signatures reaches 100,000, then the matter will be debated in parliament, according to the petitions procedure.

“Benjamin Netanyahu is to hold talks in London this September,” the petition states. “Under international law he should be arrested for war crimes upon arrival in the UK for the massacre of over 2,000 civilians in 2014.”

Government responds

But in an official response containing several false statements, the government of Prime Minister David Cameron asserts that Netanyahu enjoys immunity, and justifies Israel’s destruction and killings of Palestinians in Gaza as “self-defense.”

“Under UK and international law, visiting heads of foreign governments, such as Prime Minister Netanyahu, have immunity from legal process, and cannot be arrested or detained,” the government response states.

“We recognize that the conflict in Gaza last year took a terrible toll. As the prime minister said, we were all deeply saddened by the violence and the UK has been at the forefront of international reconstruction efforts,” the government notes. “However the prime minister was clear on the UK’s recognition of Israel’s right to take proportionate action to defend itself, within the boundaries of international humanitarian law.”

False statements

It adds: “We condemn the terrorist tactics of Hamas who fired rockets on Israel, built extensive tunnels to kidnap and murder and repeatedly refused to accept ceasefires. Israel, like any state, has the right to ensure its own security, as its citizens also have the right to live without fear of attack.”

In fact, Hamas and other Palestinian factions have consistently held to ceasefires while Israel has habitually broken them.

Israel has violated the ceasefire agreed on 26 August last year hundreds of times, according to international agencies, with relentless shooting across the Gaza boundary especially at Gaza farmers and fishermen that has caused deaths and injuries.

The independent inquiry into the 51-day Israel assault on Gaza last summer, commissioned by the UN Human Rights Council and published in June, found that Palestinian resistance groups only used tunnels dug from Gaza to attack “legitimate military targets” in present-day Israel.

The UK was among the 41 members of the Human Rights Council that voted to “welcome” and accept the report. (Only one government, the US administration of President Barack Obama, voted against it and five abstained.)

Israeli officials must still find official pretexts for visits to the UK in order to ensure they are covered by diplomatic immunity.

Several Israeli officials have narrowly escaped arrest in the UK in recent years, often with official complicity.

The UK changed its law in 2011 specifically so that Israeli war crimes suspects would have an easier time traveling there.

Going to the ICC

In its response to the petition, the UK government also asserts that it “welcome[s] the fact that Israel is conducting internal investigations into specific incidents during Operation Protective Edge,” the name Israel gave its assault that killed more than 2,200 Palestinians including 551 children in Gaza last summer.

A year later, there have still been no charges in any case. And, as the UK surely knows, Israel’s record when it comes to investigating itself is to provide its personnel with blanket immunity and impunity for killing Palestinians.

“We have also encouraged the Israeli authorities, as we do all countries, to cooperate with the independent Prosecutor of the International Criminal Court (ICC) regarding the preliminary examination into the situation in the Occupied Palestinian Territories since 13 June,” the UK response adds.

“I honestly don’t expect [Netanyahu] to get arrested,” Damian Moran, who launched the petition, told Al Jazeera. But he added that the growing number of signatures is “a clear message to him that there’s a massive amount of people who don’t want him here.”

Welcoming Netanyahu is only one aspect of UK complicity in Israel’s crimes. The UK continues to allow arms sales to Israel despite the carnage in Gaza.

If the ICC prosecutor resists US and Israeli political pressure and brings charges against Israeli leaders, then under international rules even the diplomatic immunity Netanyahu will hide behind in London would no longer protect him.

Toronto police report two suicides associated with Ashley Madison hack

Local police in Canada say two suicides are being investigated together because of the leak of millions of customer profiles for extramarital dating service

Toronto police give the latest updates on the leak, including unconfirmed reports of two suicides link to the data breach - video

Sam Thielman in New York-Monday 24 August 2015
Unconfirmed reports suggest that two people in Toronto have killed themselves over the Ashley Madison hack, local police said in a briefing providing details about the beginning of the leak.

“As of this morning, we have two unconfirmed reports of suicides that are associated because of the leak of Ashley Madison customers’ profiles,” Toronto police service staff superintendent Bryce Evans said at a press conference on Monday.

Evans said the nature of the dating site for married people was “of no interest to us as the investigative teams”.

Security analyst Brian Krebs said last week he feared exactly that outcome. “There’s a very real chance that people are going to overreact. I wouldn’t be surprised if we saw people taking their lives because of this, and obviously piling on with ridicule and trying to out people is not gonna help the situation,” Krebs,who first reported the hack, said on Wednesday.

The hack, in which some 33m profiles from the service were published online, has been the focus of extortion and phishing attempts. Among them are “hack checking” websites that compile the emails of the curious entered into them and then send malicious software to those emails.

Evans also said that a new scam, claiming to erase names from the Ashley Madison database in order to preserve users’ privacy, had sprung up in the few days since the hack.

“By clicking on these links, you are exposing your computer to adware, spyware, malware and viruses,” Evans said. “Multiple sites have now downloaded [the Ashley Madison user database] and are present. Nobody is going to be able to erase that information. There are confirmed cases of people trying to extort Ashley Madison clients.”

On 12 July, Evans told reporters, workers at the Toronto-based company logged into their computers and were greeted with “a threatening message” read over AC/DC’s Thunderstruck by hackers (or hacker) the Impact Team. The hack was made public on 20 July by the Impact Team alongside a note demanding Ashley Madison cease operation; on 20 August, Impact Team released all the information onto a deep-web site with a message that began “Time’s up!” Information from Ashley Madison’s sister site, Established Men, has not been released.

“When reporting these events to the police, Avid Life Media advised that the suspects had already made good on the threat by releasing the information on two Ashley Madison clients, one from Mississauga, Ontario, and the other from Brockton, Massachusetts, through the internet, which happened on July the 19th,” Evans said.

Avid Life Media, the company behind Ashley Madison, has offered a $500,000 Canadian dollar ($380,000 US) reward for information leading to the arrest of the hackers.

• In the US and Canada, the National Suicide Prevention Hotline is 1-800-273-8255. In the UK, the Samaritans can be contacted on 08457 90 90 90. In Australia, the crisis support service Lifeline is on 13 11 14. Hotlines in other countries can be found here.

Fix This Economy Now!

It’s time to bring the American economy into the 21st century — here’s how.

BY DANIEL ALTMAN-AUGUST 24, 2015

Stock markets are tumbling, the Federal Reserve is dithering about raising interest rates, Donald Trump is claiming the unemployment rate is 42 percent, and some smart people are wondering whether inflation will ever return to the American economy. Maybe things aren’t quite as bad as all that, but there’s definitely room for improvement — and that’s not surprising, given how little the architecture of the economy has changed in the past century.

The U.S. economy is built on a strong foundation, but it’s also an old one. Regulations are enforced and statistics are collected the same way they have been for decades, even as the economy has changed. Once in a while, we try to update our approach with legislation like the Clean Air Act or the Dodd-Frank financial reforms. But we’re always fighting the last battle. Our politics is reactive rather than proactive, since politicians have little incentive to planfor a future when they might not even be in office.

That’s a shame, because there’s so much we can do to improve how the economy works. Among the most pressing problems we face is the utilization of our labor force. The number of people between the ages of 20 and 64 — one measure of the stock of potential workers — is likely to shrink in the next 20 years, and participation rates still haven’t recovered from the last recession. Plenty of people who could work aren’t working, and those who are aren’t becoming more productive as quickly as they used to.

This is a path to stagnant or falling living standards. One way to reverse it is for American workers to raise their game through more schooling or training. The need for both of these is strongest among workers who have lost their jobs as a result of globalization or technology. For them, a new G.I. Bill — call it a “Globalization Intervention Bill” — funding higher education would provide the opportunity to recoup years of production, targeted to the workers who need it most.

Even for older workers, a new G.I. Bill would make sense. Imagine a 50-year-old laborer whose job has disappeared and who is likely to drop out of the labor force. As an alternative, the federal government might offer to pay four years of college tuition at a public university, at a cost of roughly $40,000. If the worker managed to find a job paying $50,000 a year after college, the resulting taxes paid until retirement would easily cover the cost of the initial tuition grant — and the economy’s output would rise by the full value of the worker’s production, which would be much more. And that still doesn’t include the many social benefits of employment. Even if only half of jobless workers completed this turnaround, the program might be budget-neutral and growth-positive.

American workers also suffer from underinvestment in training. Because they can move between jobs so easily — a great contributor to the labor market’s flexibility — companies are less likely to make costly investments in training. But with a market for training, this problem would vanish. For example, companies could offer workers a chance to train for industry-wide certifications that would each have a price tag attached. This already happens in the global soccer industry, where big clubs compensate smaller teams for training young players by paying a fee to sign them. Similarly, when a worker switched jobs, the new employer would compensate the old employer for each certification. When companies wanted to lay off workers, they would waive the right to charge for certifications.

It’s not just mature workers who need help, though. Improving education for children is always a priority during presidential campaigns, and yet the United States has done a pretty poor job of it. There’s precious little money available in the federal budget to bolster education nationally, so unlocking funding from the private markets could be crucial. Offering equity investments in cohorts of students might offer an opening; investors would stump up money to finance the education of, say, the United States public high school class of 2030, and in return they would receive a share of the pupils’ future incomes. The money might be collected by Social Security number via tax returns or withholding, just as with the public entitlement system today.

Of course, school financing does not always translate into school quality — and school choice, at times the darling of both major political parties, has not always raised quality across the board. Even with choice, schools in wealthy areas continue to be better than schools in poorer areas. Yet this might not be the case with students allotted to schools via randomization across diverse communities. Not knowing which schools their children would attend, parents might attempt to ensure that all possible schools met a minimum standard.

Unfortunately, even children with access to good schools sometimes fail because of a lack of support at home, including poor nutrition. Hunger is still a huge problem in the United States; one in five households with childrencouldn’t procure enough food at some point during 2013. Bizarrely, Congress is actually moving in the opposite direction by trying to cut existing assistance programs. Again, accessing private funds might be the answer.

Just as the global health charity UNITAID has raised billions to fight epidemics through small surtaxes on airline tickets, a tiny anti-hunger tax or point-of-sale donation at fast food restaurants might generate the needed funds. The industry collects roughly $200 billion in revenue annually; even 0.1 percent of that amount would be enough to buy several meals for every child in need. The key would be to prevent these private funds from replacing public funds.

Managing public funds is another area where the United States has performed poorly. The federal budget had a decade of projected surpluses worth trillions of dollars ahead of when George W. Bush took office, but tax cuts and profligate spending sent the nation deep into debt well before the global financial crisis. Applying so-called “golden rule” budgeting, by balancing spending and revenues over the economic cycle, might end the boom-bust rollercoaster in Washington. Governments would run surpluses when economic growth was strong and dip into the resulting savings when times were lean.

To bolster the budget even more, the nation could create a sovereign wealth fund for risky and long-term investments. Because very few investors have as long a time horizon as the United States Treasury, the government is in a unique position to take on opportunities with high but long-delayed returns. And because the government also has enormous financial clout, it can take on riskier investments as well; with an enormous portfolio, it could diversify risks much more than almost any other investor. The government already invests in things like medical research and renewable energy, but it could do much more, both here and abroad — and American taxpayers would reap the profits. Of course, the current Congress doesn’t even like the public institutions that already make a profit for taxpayers, like the Export-Import Bank and the Federal Reserve.

Even with such an entity in place, the government would still need to find the bulk of its revenue somewhere else. Right now it relies in part on the corporate income tax, a volatile and unpredictable instrument that affects shareholders, workers, and consumers in ways economists hardly understand. The current tax system has also failed to deal with the misallocation of opportunity due to inequality. As I’ve written before, theeconomic pie gets smaller every time an opportunity goes to a stupid rich kid instead of a smart poor kid. Inequality of wealth — both your parents’ and your own — affects the allocation of opportunities more than any other kindof inequality.

To mitigate this effect, wealth has to be redistributed; indeed, a wealth tax could help to replace the corporate income tax, providing a steadier source of revenue that would also put a dent in inequality. Wealth taxes aren’t popular, of course, and they might not even be constitutional. But a hybrid income and wealth tax might pass muster with legal and economic experts alike. The tax rate on income would depend on wealth, according to a sliding scale; strivers with high income but little wealth would pay less than people who chose to live off the interest from their fortunes.

If the sum of these proposals lifted the production of American workers by even a couple of percentage points a year, the United States would hit Jeb Bush’s 4 percent target easily. But they would do much more, too, by raising living standards more equitably and equipping future generations for a new century of prosperity.

Photo credit: Spencer Platt/Getty Images

'Black Monday': markets plunge over China fears

MONDAY 24 AUGUST 2015

The Chinese government's failure to take action sparks panic across global stock markets, with the FTSE 100 dipping to its lowest level since January 2013.

London's FTSE 100 continued to drop, down more than 5 per cent on Monday afternoon, after fears about the Chinese market came to a head on what Beijing has described as "Black Monday".

New York's Dow Jones had its largest drop in a day since 2008 after markets across Europe also tumbled.

China's Shanghai Composite Index has been a cause of concern for some weeks, but when an expected intervention by China's central bank failed to materialise on Monday, the situation spread panic across already jittery global markets.

On Monday, China's stock markets gave up all their gains for the year on a massive sell-off. Alarm bells rang across world markets after the 9 per cent dive in Chinese shares and a sharp drop in the dollar and major commodities panicked investors.

Jasper Lawler, market analyst at CMC Markets, said investors around the world were spooked after China's central bank "spectacularly failed" to stimulate the economy, in a world where huge stimulus efforts are underpinning recovery efforts in Europe and the US.

Chancellor George Osborne said the slump in world financial markets shows that Britain must "get its house in order".

What is the problem in China?

China's economy, which grew at 9 per cent and above per year in the period of rapid industrialisation in the 2000s, has slowed considerably as China reported a sharp fall in exports and producer prices to a near six-year-low.

At the beginning of July, as the British fixated on fears about the Greece economy, Channel 4 News Business Correspondent Helia Ebrahimi wrote that markets were far more concerned about China.

Between the end of June and the beginning of July more than £1.5tr has been wiped off the value of shares, equivalent to 10 times Greece's annual GDP, prompting fears that China's stock market roller coaster ride could have much broader implications for the global economy.

Then in August China "stunned the world" by devaluing its currency, the yuan. It was described by China's central bank as a "one-off depreciation" in a bid to boost export markets.

At the time Channel 4 News Economics Editor Paul Mason said the Chinese bank promised to "take more notice of the markets" when setting interest rates in future. And China's central bank's failure to react to the worsening of the crisis caused market panic today.

On currency markets, the pound was little changed against the US dollar and down slightly against the euro. However, in equities, trading screens turned red with almost all of the UK's top 100 listed stocks falling.

Worst hit were companies in the commodities sector, where prices have been severely hit by fears over China.