70% top marginal tax rate and other links for the weekend

Alexandria Ocasio-Cortez favours 70% marginal top tax rate to pay for climate change. Something to think about?

When Wall Street firms behave in this fashion, Alexandira Ocasio-Cortez’ proposal does not seem so outlandish or outrageous. The story is about Goldman Sachs with 1MdB in Malaysia and Credit Suisse in Mozambique:

According to the International Monetary Fund, the loans Credit Suisse and others arranged effectively doubled the cost of servicing the country’s debt. …

Mozambique defaulted and then restructured its debt. Last year, the country’s economy was due to grow at the slowest rate in 18 years — a burden that its citizens will be left to bear. 

Whatever the outcome of these cases — no doubt, risk controls will be tightened and new standards set — the bitter taste of these experiments with market capitalism will linger. [Link]

On climate change, these lines should strike fear in Indian hearts. It is about Yemen:

“The civil war in Yemen seems to be a politically-motivated competition for power among many actors with varying motives,” he wrote in his paper. “But underlying all other motives is the ongoing need by all parties to secure access to the diminishing water supply.” [Link]

Staying in the desert, let us read Noah Smith’s article on Saudi Arabia. The drastic fall in the fertility rate in the country is remarkable.

This FT article on how investors are pushing companies to look at all stakeholders’ welfare rather than maximise profits as Milton Friedman advised in 1970 was not impressive because it did not have any other name than Larry Fink, as the investor doing it. In other words, institutional investors are not exactly forcing companies to look at a bigger picture than shareholders, much as the FT writer would like to believe or have us believe.

But, it was good to see that the now-departed chairman and founder of Southwest Airlines walked his talk on profits and employee welfare too. Remarkable story, written well by Joe Nocera.

“Should a self-driving car kill the baby or the grandma? Depends on where you’re from.” That is the header of an article in MIT Technology Review. The article presents results of a voluntary survey in which millions participated from different countries. Responses varied from country to country.

This is a re-statement of the old trolley problem (I did not know about it although I had seen variants of it) in the era of artificial intelligence and self-driving cars.

Greg Ip begins the New Year with an optimistic take on how the world is getting relentlessly better. It is true but it is also true that it is a partial analysis.

Greg Ip has a more penetrating take on the US-China trade dispute. The observations by Senator Dan Sullivan, cited in the article, are pertinent:

Dan Sullivan, a Republican senator from Alaska, personifies these broader forces reshaping the U.S. approach to the world. Mr. Sullivan has followed the rise of China for decades—as a Marine sent to the Taiwan Strait in 1996 in a response to Chinese provocations; as an official in George W. Bush’s National Security Council and State Department; and for a time as Alaska’s commissioner of natural resources.

As companies moving goods from China to the U.S. face heftier tariffs, some have developed creative techniques to avoid paying them. The WSJ’s Steven Russolillo takes to the field to explain how some businesses sidestep import duties.

When Mr. Xi visited the U.S. in 2015, Mr. Sullivan urged his colleagues to pay more attention to China’s rise. On the Senate floor, he quoted the political scientist Graham Allison: “War between the U.S. and China is more likely than recognized at the moment.”

Last spring, Mr. Sullivan went to China and met officials including Vice President Wang Qishan. They seemed to think tensions with the U.S. will fade after Mr. Trump leaves the scene, Mr. Sullivan recalled.

“I just said, ‘You are completely misreading this.’” The mistrust, he told them, is bipartisan, and will outlast Mr. Trump.

The Guardian has an unsurprisingly condescending piece on the new Brazilian President. I think he is interesting and India needs to build its ties with him closely before China does.

This NYT profile article on Bob Lightheizer is a good one. More strength to him.

A colleague of mine pointed to this CATO Institute policy analysis titled, ‘Nostalgia and the Liberal Order’. Yet to read it. I like the sound of it, though. It was published in June 2018.

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