Separatists around the world

Jordan Fraade
Sep 19, 2014 16:29 UTC

Scottish voters rejected independence yesterday by a surprisingly decisive margin of 55-45. But while the United Kingdom remains united, secession movements elsewhere are still going strong. The number of UN member states has increased almost fourfold, from 51 to 193, since the organization’s founding in 1945, though growth in the number of countries overall has been much slower in the post-Soviet era. A peaceful, fairly decided election in Scotland may give breakaway regions a new precedent to point to.

In particular, the Catalonia region of northeastern Spain is getting ready to make breakaway moves. Despite the “no” vote in Scotland, the Catalan regional government has promised that it will push ahead with its own independence referendum on November 9. That’s not going to be easy: the central government in Madrid has said that even a non-binding vote would violate the Spanish constitution. Catalan regional leader Artur Mas responded to the Scottish vote by saying, “What happened in Scotland is not a setback for us, because what we really want in Catalonia is to have the chance to vote.”

The Catalan independence movement has counterparts in Eastern Ukraine’s pro-Russian separatists, Tibet’s independence activists and Canada’s Quebec. Even in the U.S. a new poll brought the surprise news that as many as a quarter of Americans wouldn’t object to their state seceding from the union.

Here is a map highlighting the countries where breaking away remains on the political agenda.

Reuters Independence graphic.jpeg

Interest rates aren’t going up anytime soon

Sep 18, 2014 15:56 UTC

Rate hikes are still a ways out: that was the message from Janet Yellen and the Fed yesterday after the Federal Open Market Committee’s statement came out. However, Yellen also hinted that once interest rates do start to rise, they could go up faster than many currently expect. Rates are currently lower — and have stayed low for longer — than in any recovery in recent memory. Here’s what interest rates have looked like in every recovery since 1982:


And here’s a breakdown of how long it has taken the Fed historically to raise rates:


Clawing out of poverty

Sep 17, 2014 16:22 UTC

Finally, the U.S. poverty rate is moving in the right direction.

For the first time since 2006, the poverty rate declined last year — to 14.5 percent from 15 percent in 2012 — according to a new report out by the Census Bureau. “Last year’s decrease appeared driven by fewer people relying on part-time work, as the survey found an additional 2.8 million Americans were working full-time during the year,” writes Jason Lange.

While that’s good news, the report also says that median household income increased by less than $200, to $51,939 — a gain that isn’t deemed statistically significant. Americans still earn about $5,000 less at the median than they did in 2007. Nor is the new rate reason for unequivocal celebration: Lange notes that the poverty rate was still 2 percentage points higher than it was seven years earlier.

Here’s how the poverty rate, as well as the absolute number of of people in poverty, have changed in the last half century:



Above and beyond the minimum wage

Sep 16, 2014 14:35 UTC

The campaign to raise the U.S. minimum wage is gaining traction this election cycle. There are six statewide initiatives — four of them in Republican-controlled states — to raise the state wage floor above the federally mandated $7.25 per hour. “Activists on both sides of the issue say the proposals stand a good chance of passing,” writes Andy Sullivan.

This is where the initiatives are on the ballot:


The movement to raise the minimum wage has been a traditional policy initiative of the Democrats, with President Obama’s proposal to raise the minimum wage blocked by congressional Republicans. If multiple measures pass in heavily Republican states, however, Congress might feel pressure to reconsider the federal issue, says Sullivan. The ballot questions could also boost Democrats’ chances of retaining Senate control in the November midterms, adds Sullivan, by encouraging low-wage workers to come to the polls.

The last federal hike was in 2007, after Arizona, Colorado, Missouri, Montana, Nevada and Ohio, all successfully raised state minimum wages. If the current ballot initiatives succeed, an estimated 419,000 workers would get pay increases.

Bankruptcy isn’t what it used to be

Sep 15, 2014 16:06 UTC

Radio Shack is considering bankruptcy. The electronics retailer has struggled in the digital age, and announced today that its CFO, John Feray, resigned last week. He will be replaced by Holly Etlin, a managing director at AlixPartners, which has been advising Radio Shack financially since 2013. Even with outside help, the company’s share price has tumbled since 2010:


Bankruptcy isn’t quite as helpful for a company as it used to be. While retailers used to be able to use Chapter 11 as a shelter to devise new business plans, with around half emerging from bankruptcy, a 2005 law has changed all of that.  Reuters reports that if Radio Shack files for Chapter 11, it isn’t likely to recover, thanks to the nine-year-old law that only gives companies 210 days to turn things around. Now, only 12 percent of companies emerge from bankruptcy without going out of business. ”Circuit City Stores, Borders Group, Filene’s Basement, Linens ‘n’ Things, Coldwater Creek and plenty of smaller chains have gone out of business after filing for Chapter 11,” write Tom Hals and Nick Brown.

In reality, they add store chains do not even have seven months. “Lenders will typically only offer companies about three or four months of financing during bankruptcy to ensure that, if things do not work out, there is enough time to conduct a going-out-of-business sale.” That might make it a good time to stock up on those items for your home office.

from Equals:

How letting women fail can help them succeed

Aug 29, 2014 15:15 UTC

In life, and especially at work, women often are afraid to break the rules. They are also afraid to fail in ways that can differ from men. Often, this holds them back in their careers. It isn't an irrational position. Instead, it’s more likely a reaction to social pressures that tell them they will be more harshly judged than their male peers on their perceived missteps.

Over at the Harvard Business Review blog this week, Tara Sophia Mohr writes that she is skeptical of the “confidence gap” as a reason that women aren’t getting as far up on the career ladder as their male peers. She did a survey of professionals and asked them: if they looked at a job, but decided not to apply, why not? It usually wasn’t because they didn’t think they could do the job well, she says.

Instead, she found that most often, men and women don’t apply for jobs because they feel that they don’t meet all the requirements in the job description. In other words, “what held them back from applying was not a mistaken perception about themselves, but a mistaken perception about the hiring process.”

Here’s the full division of answers:

Screen Shot 2014-08-28 at 2.35.39 PM.png

It’s interesting how little variation between men and women there seems to be. Where there are differences, they are that 1) women are afraid to fail and 2) women believe they must follow the guidelines as written. These two issues seem to be rooted in traditional notions of femininity: women are expected to be gentle and deferential.

This is important because it’s not just about how women think of themselves, but about how people perceive those women. It isn’t an accident that women internalize these expectations. We expect women to act that way. Then, generally, reactions to women in the workplace fall in line with those expectations.

This is where personality comes in. In the same situation, a man may be considered confident, whereas a woman would be called abrasive. And that affects who gets the job or who gets promoted. In another informal study out this week, Kieran Snyder looked at the performance reviews of high-achieving men and women. She found that even in positive reviews, women are more likely to receive critical feedback.

Screen Shot 2014-08-28 at 3.54.25 PM.png

Snyder writes that, “negative personality criticism—watch your tone! step back! stop being so judgmental!—shows up twice in the 83 critical reviews received by men. It shows up in 71 of the 94 critical reviews received by women.” The two polls, taken together, paint a picture of women being more risk averse than men — for very practical reasons.

Mohr’s post points to the fact that women need to break the rules more often. But with Snyder, it’s unclear that women who break the rules are rewarded in the same way as their male counterparts, so that can’t be the only answer. We probably make small judgements daily that contribute to the continuation of this way of thinking. It can only stop if we make ourselves stop.

Women shouldn’t be afraid to fail. But we as a society (men and women), need to stop judging women so harshly for their flaws. For them to be equally good, it has to be okay that they are equally bad sometimes.

The expense of sprawl

Aug 26, 2014 20:32 UTC

It’s expensive to live in a big city. But what if it’s more expensive to live in a small city? The Citizen’s Budget Commission, a non-profit financial watchdog organization in New York, took a look at housing costs in US metro areas recently, then added in transportation costs. By these two metrics, New York City (and most dense metro areas with good public transportation) is one of the cheaper urban options.

This is what housing and transportation costs look like for a typical household in various urban areas around the country (New York is highlighted because that’s  the CBC’s focus)*:


Added together, that looks like this:


Obviously more goes into the cost of living than just these two data points, but it does highlight just how expensive urban sprawl can be.

(h/t City Lab)

*What’s a “typical household”? From the report: “This policy brief uses data for what HUD defines as the “typical regional household.”2 This household is a statistical creation based on average values for selected characteristics – median income, household size, number of workers in the household, and commuting patterns for the workers – of households in the area. For example, a typical household in New York City has 2.69 people, 1.2 commuters, and annual income of $63,915.”


Bank of America’s big fine

Aug 22, 2014 16:24 UTC

You’d be forgiven for thinking that Bank of America settles crisis-era mortgage cases with the U.S. government once a week or so. But the one this week, at $16.65 billion, is the big one. That is, it’s the biggest settlement to date, eclipsing not only previous settlements by the bank (which now come to a total of about $65 billion), but also all of the similar settlements reached by other banks. JP Morgan paid $13 billion and Citigroup $7 billion recently for similar reasons. The bank will pay “$9.65 billion in cash to resolve more than a dozen federal and state investigations, and provide $7 billion in help to struggling homeowners and communities,” according to Reuters.

Here’s our updated chart of the biggest bank settlements in history:

bank fines (again!)


No individuals were charged, but Bank of America has admitted to some of its terrible pre- and post-crisis behavior. There are, as usual, some embarrassing emails involved. Here are some details from the Reuters story:

Under the out-of-court settlement, Bank of America acknowledged that Merrill Lynch told investors in subprime mortgage bonds in 2006 and 2007 that the loans generally complied with underwriting guidelines, though reviews suggested as many as 50 percent did not.

A statement of facts cites one email in which a Merrill employee wrote: “(h)ow much time do you want me to spend looking at these (loans) if (the co-head of Merrill Lynch’s RMBS business) is going to keep them regardless of issues?”

Bank of America also acknowledged that Countrywide did not generally tell investors the extent to which it made exceptions to its own internal guidelines.

The settlement also covered some post-crisis conduct, including Bank of America’s admission that from 2009 to 2012 it submitted loans for government insurance under the Federal Housing Administration that did not qualify.

Europe’s economic disaster

Ben Walsh
Aug 21, 2014 18:18 UTC

Wonkblog’s Matt O’Brien looks at the current state of Europe’s recovery and calls it “one of the biggest catastrophes in economic history.” Paul Krugman agrees with that assessment. More than six years since the financial crisis began, Europe still hasn’t had a real recovery, “and… that’s about to make it worse than the worst of the 1930s.” Wonkblog puts the current malaise in context by charting how many years it took after other crises to return to pre-crisis peak gross domestic product. The current era is the black line, and it’s not pretty:


All the more galling, O’Brien argues, is that this is a “policy-induced disaster” of fiscal austerity and weak monetary stimulus. Ryan McCarthy pointed out in 2012 that the pattern to “Euro crisis flare-ups is getting very familiar”: problems get contained but fundamental causes remain unaddressed. The head of the European Central Bank, Mario Draghi, has rolled out a negative interest rate on bank deposits to try to spur lending and boost inflation. Draghi is also talking about quantitative easing, but it’s not clear that he has the power to implement such a policy.  Unfortunately, that means there’s not that much more monetary policy can realistically do to offset disastrous fiscal policy.

Years of living dangerously

Aug 20, 2014 20:06 UTC

Yesterday, the Islamic State released footage of the beheading of American journalist James Foley, who was captured in Syria two years ago. The group also says it may execute another American journalist depending on the next moves of President Obama.

Reuters reports that the gruesome decapitation video seemed to suggest that the Islamic State was opening a new anti-U.S. front that could result in attacks on U.S. interests or even American soil. “The stronger the war against the States gets, the better this will help hesitant brothers to join us,” said one Islamic militant.

Iraq has by far been the most dangerous country for journalists over the past two decades, with 165 journalist deaths there since 1992.

But press freedom is threatened even in countries that don’t necessarily resort to violence against journalists. According to the Committee to Protect Journalists, the countries with the most journalists in prison include Turkey, China, Iran, Eritrea, and Vietnam:

Screen Shot 2014-08-20 at 3.10.26 PM.png


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