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1 Hints of a US rate rise in 2015 (BBC) The US Federal Reserve Chair Janet Yellen has hinted that interest rates in the US could start to rise in early 2015. She said the Fed could begin raising rates six months after it halts its monthly bond-buying programme. She made the remarks after the Fed said it will scale back bond purchases by a further $10bn per month. This is the third time in a row that the central bank has tightened its stimulus efforts.
The latest reduction brings the Fed’s monthly bond-buying down to $55bn from $85bn last year. If bond purchases end – as expected – later this year, this would imply rate increases around April 2015. The Fed lowered its overnight interest rate to 0% in December 2008 as part of the steps it took to trigger growth in the economy amid the global financial crisis. That crisis hurt the US economic growth and resulted in high levels of unemployment.
Along with lowering the interest rates, the central bank also started buying bonds in an attempt to keep long-term borrowing costs low. The idea was to encourage businesses to borrow and spend more, to try and spur growth in the economy and create more jobs. The stimulus efforts appear to have had an impact, with the US economy showing signs of recovery of late. That has seen the central bank scale back its key stimulus measure – the bond-buying programme also known as quantitative easing – for three months in a row.
2 UK is ‘in deep trouble’ (Larry Elliott in The Guardian) In his fifth budget George Osborne made sure that there was no repeat of the “omnishambles” of two years ago. There was house-building, support for regional theatre and a pledge that Britain will cash in on its discovery of graphene. Not a pasty tax or a granny tax anywhere in sight.
But all the headline-grabbing stuff was beside the point. The real gist of Osborne’s speech was that Britain remains a country in deep, deep trouble. He promised to level with voters, and duly did so. Although growth is now picking up, the deficit is too high and investment too low. Britain, he said, had 20 years of catching up to do and the budget marks the start of the long haul ahead.
Osborne is the first to admit that the Treasury coffers remain empty and upfront about the need for austerity to continue deep into the next parliament. But he has real trouble accepting that he might be in any way responsible for the fact that borrowing in 2014-15 is expected to be £96bn against the £37bn predicted in the first coalition budget in June 2010.
All that said, Osborne’s assessment of the fundamental state of the economy is right. For decades, weaknesses have been papered over by debt, North Sea oil and the willingness of other countries to allow us to live beyond our means. The challenge of raising investment, boosting production and increasing saving will face whichever party wins the 2015 election.
3 In China, human rights are mostly indoors (Jonathan Power in Khaleej Times) In1989 all the hopes for a democratic spring in China were dashed. Students who had gathered in Tiananmen Square to protest bad governance were crushed by tanks sent in by order of Deng. Many observers believe that because of the “Colour Revolutions”, the Arab Spring and the tense situation in Xinjian the rules against political dissent have been tightened up in recent years. Despite that there have been ongoing reforms: Educational institutions have more autonomy; and protests against misrule by local party officials and factory bosses have increased sharply and have often been listened to and demands met.
Although the notion of human rights is a relative novelty to Chinese it is quite surprising how much teaching of it is allowed. In over 10 universities around the country, Sweden’s prestigious Wallenberg Institute for Human Rights helps organise human rights courses. In Beijing University human rights can be the minor subject in a degree. Over five other universities have substantial human rights programmes. Wallenberg even lays on programmes for the police.
The Chinese professors Wallenberg works with are knowledgeable and also idealistic, accepting they will be unlikely to be promoted to the top of the academic tree, given their subject of interest. “The government doesn’t care what you think. It cares only what you do” is the mantra of those concerned with human rights. Thinking inside a university is okay. The government is prepared to pounce when that rule is broken.
When it comes to human rights issues you can talk to your friends without fear of being listened to, travel abroad, sound off on social media or work quietly behind the scenes inside government and the legal system to advocate reform. But don’t protest publicly, don’t organise protests and don’t write that the government must go. The time has not come for that. We may have to wait, as Deng said, until 2030 for democracy and freedom of speech to arrive, and for human rights to be taken seriously.
4 Success outside the dress code (Shirley S Wang in The Wall Street Journal) Past research has largely examined why people buy or wear branded items. Less work has focused on what others think of those who try to communicate that they are different or worthy of attention. Efforts to be different are interesting because humans are wired to conform and be part of a group.
In a series of studies published in the Journal of Consumer Research, Silvia Bellezza, a doctoral student, and two Harvard professors sought to examine what observers thought of individuals who deviated from the norm in the workplace and in a retail setting. What they found was that being a little different can socially benefit people—in some situations.
“The problem is that conforming to norms is an easy and safe spot to be in,” Ms. Bellezza said. “If you’re willing to deviate, there are upsides.” It’s also long been known that people veer from what’s expected after they’ve built up enough trust within a group. But, she says, acting differently risks losing the benefits that come with conforming, such as shared group identity and automatic group trust.
There are boundaries to the benefits of looking different, the Harvard work showed. If an individual was viewed as accidentally out of sync with everyone else, such as mistakenly wearing a red bow tie rather than black at a formal event, that erased positive feelings about him among those surveyed. Those opinions only improved when the survey group believed their contrarian acted differently on purpose.
Willingness to deviate can be useful for groups as well, particularly when it comes to decision-making, says Charles Pavitt, a University of Delaware communications professor. Perhaps the best strategy for preserving your place in the group while presenting offbeat ideas is to state explicitly that you are playing devil’s advocate, Dr. Pavitt says.
Marshall Scott Poole, a communications professor at the University of Illinois at Urbana-Champaign, cautions that while groups tend initially to make an evaluation of status based on external characteristics, over time people focus less on those characteristics and more on behavior. Dr. Poole’s best practical advice: “Don’t talk a lot if you have high status. People will assume you’re competent and when you talk, they will listen to you.”