November 5, 2012
Greece: More Austerity Despite Strikes, Dissent
By THE ASSOCIATED PRESS
ATHENS, Greece (AP) — Greece's conservative-led coalition detailed a new four-year package of austerity measures late Monday, facing down escalating protests by unions and dissent from its left-wing government partners.
The bill, to be voted in parliament late Wednesday, will impose further wage and benefit cuts on Greeks who are heading into a sixth year of recession and are already struggling with 25 percent unemployment.
Unions had already called a 48-hour general strike starting Tuesday in anticipation of the measures.
Police late Monday cordoned off streets around main government buildings in preparation for potentially violent protests.
The drastic spending cuts and tax hikes demanded by the country's bailout creditors aim to save some €13.5 billion ($17.3 billion) in 2013-14, but austerity will be extended through 2016.
Other measures include a two-year increase in the retirement age to 67, a new round of tax increases, and making it easier to fire and transfer civil servants.
If lawmakers reject the measures, Greece could lose vital rescue loans that have kept it afloat since May 2010 — raising the threat of bankruptcy and a euro exit.
The next loan installment of €31.5 billion out of a total of €240 billion is already overdue and without it, conservative Prime Minister Antonis Samaras has said Greece will run out of euros on Nov. 16.
After nearly three years of successive income cuts and tax hikes, Greeks have little stomach for more.
On Monday, doctors launched a three-day strike that will leave state hospitals functioning on emergency staff, while news broadcasting was canceled by a 24-hour journalists' strike.
During a general strike Tuesday and Wednesday, schools, tax offices and public administration will shut down, and there will be no train or ferry services across the country. Flights will be disrupted for three hours Tuesday.
Since forming his government after June elections, Samaras has fought on two fronts: To persuade debt inspectors from the European Union, International Monetary Fund and European Central Bank to approve the country's €31.5 billion loan installment, and to talk his two center-left coalition partners into backing the necessary spending cuts and labor reforms.
Persuading politicians at home has proved the hardest task. The main Socialist partner in the coalition has agreed to the package, but faces increasing dissent from its own lawmakers.
And the smaller Democratic Left party says it will not support the bill because of new labor reforms.
"Our position remains unchanged," Democratic Left leader Fotis Kouvelis said late Monday. "From the outset, we said we would not support these labor reforms."
The coalition government has the support of 175 lawmakers in the 300-member parliament — 127 from conservative New Democracy, 32 from Socialists and 16 from the Democratic Left.
The austerity package only needs a simple majority to pass and the Democratic Left's opposition to the bill does not pose a direct threat to its passage. But approval with fewer than 151 votes would reinforce opposition politicians' argument that Samaras lacks legitimacy.
On Sunday, Samaras warned conservative lawmakers about the risks if the measures are rejected.
While acknowledging Greeks had already lost some 35 percent of their income in the past two years, he added: "We would lose at least twice that amount within a few weeks — about 80 percent of our standard of living" if the country was forced out of the euro.
Opposition leader Alexis Tsipras is demanding elections — although the country has already had two popular votes and four governments in the past year.
His Radical Left Coalition party is leading opinion polls, which have also seen a rapid rise in popularity for the militant far-right Golden Dawn party, which has been linked to violent attacks on immigrants.
On Sunday night, Parliament will also vote on the 2013 state budget, which provides for a sixth year of recession in which the national debt will rise to 189.1 percent of the country's gross domestic product of €194 billion. All three coalition partners are expected to back the budget.
11/06/2012 01:07 PM
Cyprus Bailout Talks Stalled: Money Laundering Accusations Could Delay Aid
By Carsten Volkery
Talks on a euro-zone bailout for Cyprus could be delayed by accusations reported in SPIEGEL that the island is helping rich Russians launder money. Cyprus has denied the accusations but is likely to come under increasing pressure to reform its financial sector to secure aid.
Negotiations about the planned bailout for Cyprus from the European Stability Mechanism, the euro zone's permanent bailout fund, will likely not be completed until 2013, a spokesman for the German Finance Ministry said.
Cyprus had applied in June to become the fifth nation to receive a bailout in the euro crisis. But not much has happened since that first call for help. The talks between the Cypriot government and the troika, made up of the European Commission, the European Central Bank and the International Monetary Fund, have been stalled for weeks. There are no signs whatsoever that Cyprus is willing to commit to a serious austerity program, sources in Brussels said.
The talks could now be delayed by accusations that Cyprus is lax on money-laundering. According to information obtained by SPIEGEL and first reported on Monday, an internal study by the German foreign intelligence agency, the Bundesnachrichtendienst (BND), says banks in Cyprus hold $26 billion (€20.33 billion) in deposits by Russian investors. According to the BND, most of this money has been illegally moved abroad to evade Russian tax authorities. By Cypriot standards it's a tremendous sum given that the island's entire annual GDP amounts to €17 billion.
The Cypriot government on Monday denied the money-laundering accusation. A government spokesman said SPIEGEL was trying to besmirch the reputation Cyprus has as an international investment location. The country had effective money-laundering rules and adhered to EU law, the spokesman said.
Low Taxes Attracting Russian Money
But Russia's crucial role for the Cypriot economy is well known. This mini-state with just 900,000 inhabitants is the biggest foreign direct investor in Russia thanks to its huge holdings of Russian money. It works like this: attracted by low tax rates, wealthy Russians transfer their money to Cyprus and then re-invest it in Russia via companies registered in Cyprus.
Opposition lawmakers from Germany's Social Democrat and Green parties have already called on the German government to broach the low corporate tax rate of 10 percent and the money-laundering accusations in the aid negotiations with Cyprus. The two parties have long been complaining about the tax haven in the Eastern Mediterranean. They want the ESM aid to be attached to strict conditions such as the creation of an EU task force to combat money laundering, similar to the task force set up for Greece. "It's time to exert pressure," said one SPD lawmaker.
The German Finance Ministry has given assurances that it will raise the issue. But the Euro Group, which includes the 17 euro-zone finance ministers, hasn't had a single in-depth discussion about Cyprus yet, say members. EU diplomats expect that several European finance ministers will insist on Cyprus taking effective steps against money laundering once the government has come up with a workable reform plan.
The problem played a role during the visit by German Economy Minister Philipp Rösler in Slovakia in August. Newly-elected Slovakian Prime Minister Robert Fico told Rösler that his country could imagine backing EU aid for Cyprus, but only if the island reveals the people investing their money there. Slovakia too wants to find out which wealthy Slovakians are using Cyprus to evade tax in their home country.
Ireland Also Refused to Hike Taxes -- And Still Got Aid
So far, the Cypriot government has tried to maintain the status quo by playing off the euro group against Russia. At European summits President Dimitris Christofias and his finance minister have told their colleagues that Cyprus can get help from Russia if the EU refuses aid. After all, the Kremlin wants the island's banking sector to remain intact to protect the Russia investments there. It helped out Cyprus once before, in 2011, when it granted a credit of €2.5 billion. But that money has now been used up and the Russian government appears reluctant to provide any more.
Christofias, a communist, is reluctant for domestic political reasons to accept EU aid because it would only be granted on condition that Cyprus undergo a three-year austerity program including a 15 percent cut in public sector wages and the sale of state-owned enterprises to the private sector. The EU also wants Cyprus to abolish the inflation-indexing of wages and the payment of an extra month's salary at the end of the year.
Cyprus faces a presidential election on February 17 and although Christof ias is not standing again, his party doesn't want to wreck its chances of staying in power.
The election is one of the reasons why officials in Brussels don't expect any progress in the aid talks before 2013. In addition, Christofias appears to be trying to secure direct aid for Cypriot banks from the ESM so that the help wouldn't have to be channelled through his creaking budget. But the German government says any direct banking aid won't be available before 2014 at the earliest.
It's uncertain whether Cyprus will end up with an EU task force against money laundering. It is even more unlikely that Cyprus will raise it corporate tax. After all, the EU bailed out a European tax haven once before. In 2010, Ireland got €85 billion. Germany wanted Ireland to raise its corporate tax rate above 12.5 percent. But the Irish government refused -- and got its way.
11/06/2012 01:07 PM
Greek Editor Vaxevanis on Tax Scandal: 'Many Friends of Leading Politicians Are on the List'
Police arrested Kostas Vaxevanis at the end of October for publishing the names of hundreds of rich Greeks suspected of tax evasion, only to be released a short time later. He tells SPIEGEL that Greek politicians are complicit in the scam and seek to pass laws to retroactively legalize tax offenses.
SPIEGEL: Were you surprised when you were arrested for publishing a list of names of people suspected of evading taxes?
Vaxevanis: Yes I was. Dozens of police surrounded my house as though I were a dangerous criminal. But three different governments have done all they could to make sure that this list remains secret. There had frequently been rumors, but nobody wanted to take the risk of naming names. It is absurd: A majority of Greeks are being squeezed by austerity measures while the elite are bunkering their money abroad.
SPIEGEL: The public prosecutor has now asked parliament to investigate further to determine if politicians were guilty of failing to pursue tax evasion.
Vaxevanis: The only problem is that many friends of leading politicians are on the list. Everyone is connected with everyone.
SPIEGEL: What makes you so sure that this is indeed the so-called "Lagarde List," the collection of names of HSBC account holders that then-French Finance Minister Christine Lagarde handed to Greece in 2010?
Vaxevanis: Not even our politicians dispute the authenticity of the list. First, we called the owners of shipping companies, who are allowed to hold large quantities of money in offshore accounts. They confirmed the list contents. We spoke with HSBC employees and then called people to see how they reacted. Parliamentarian Giorgos Voulgarakis denied everything even though there is evidence that he failed to declare large sums of money being held in a Swiss bank account. An advisor to Prime Minister Antonis Samaras told us that, as a lawyer, he was managing the money for someone else. There are peculiar networks.
SPIEGEL: Do you think that the lax approach to tax-code violations will now change?
Vaxevanis: Germany used the Lagarde List to go after tax evaders, as did France and Spain. But in Greece, the list simply disappeared. Why? Because everyone here is complicit: politicians, business leaders and journalists. Laws are passed here that retroactively legalize violations. Evangelos Venizelos, head of the socialist PASOK party, is an expert in the discipline. But nobody writes about it.
British banks set aside £10 billion to compensate clients who were ‘mis-sold’ insurance policies
By Agence France-Presse
Tuesday, November 6, 2012 6:20 EST
British banks have ramped up the amount of cash they are setting aside to compensate clients who were mis-sold insurance policies to more than £10 billion, significantly slashing their profits in the process.
The latest earnings season for major banks wrapped up on Monday, with HSBC announcing it was hiking provisions to compensate customers in Britain who were mis-sold payment protection insurance (PPI) by $353 million (276 million euros).
That brought its provision to $2.1 billion, about a fifth of the £10 billion ($16 billion, 12.5 billion euros) total set aside by Britain’s banks, which have also been rocked by humbling state bailouts, money-laundering and the Libor rate-rigging scandal.
PPI is “turning out to be the most economically damaging crisis, there’s no question about that but what is probably the most surprising of all is that the banks themselves have been completely unable to determine how much they have to pay”, independent banking analyst Ralph Silva told AFP.
JP Morgan Cazenove estimates that the total bill could hit £15 billion, while the Financial Services Authority regulator said that customers have together so far received compensation of £6.5 billion for mis-selling going back more than a decade.
British banks last year lost a high court appeal against tighter regulation of PPI, which provides insurance for consumers should they fail to meet repayments on a credit product such as consumer loans, mortgages or payment cards.
PPI became controversial after it was revealed that many customers had been sold it without understanding that the cost was being added to their loan repayments.
British authorities subsequently banned simultaneous sales of PPI and credit products.
“It’s extraordinary that we’ve received our 500,000th complaint about PPI — and despite these record numbers, this mis-selling scandal shows no sign of slowing,” said Natalie Ceeney, chief executive at the Financial Ombudsman Service watchdog.
The additional provision announced on Monday by HSBC contributed to the bank’s net profits tumbling by more than half to $2.5 billion in the third quarter compared with a year earlier.
HSBC was also hurt by an increase in the amount set aside for fines linked to money-laundering in the United States, to $1.5 billion, and owing to large fluctuations in the value of its own debt.
Rival Barclays and state-rescued lenders Royal Bank of Scotland and Lloyds Banking Group last week each announced hikes to their PPI provisions.
Barclays, which recently suffered a boardroom shake-up amid the Libor interest rate-rigging scandal, said it had set aside another £700 million to compensate PPI customers.
Royal Bank of Scotland, which is 81-percent owned by the government after a huge bailout amid the global financial crisis, booked another £400 million hit. Lloyds Banking Group said its new provision would take its total bill for the insurance mis-selling to a staggering £5.3 billion.
“The banks have been in denial about the true scale of this scandal,” said Peter Vicary-Smith, chief executive of consumer watchdog Which?
“Their piecemeal approach to topping up provisions is an inadequate response to what is now the biggest financial mis-selling scandal of all time”.
November 5, 2012
Harassers of Women in Cairo Now Face Wrath of Vigilantes
By KAREEM FAHIM
CAIRO — The young activists lingered on the streets around Tahrir Square, scrutinizing the crowds of holiday revelers. Suddenly, they charged, pushing people aside and chasing down a young man. As the captive thrashed to get away, the activists pounded his shoulders, flipped him around and spray-painted a message on his back: “I’m a harasser.”
Egypt’s streets have long been a perilous place for women, who are frequently heckled, grabbed, threatened and violated while the police look the other way. Now, during the country’s tumultuous transition from authoritarian rule, more and more groups are emerging to make protecting women — and shaming the do-nothing police — a cause.
“They’re now doing the undoable?” a police officer joked as he watched the vigilantes chase down the young man. The officer quickly went back to sipping his tea.
The attacks on women did not subside after the uprising. If anything, they became more visible as even the military was implicated in the assaults, stripping female protesters, threatening others with violence and subjecting activists to so-called virginity tests. During holidays, when Cairenes take to the streets to stroll and socialize, the attacks multiply.
But during the recent Id al-Adha holiday, some of the men were surprised to find they could no longer harass with impunity, a change brought about not just out of concern for women’s rights, but out of a frustration that the post-revolutionary government still, like the one before, was doing too little to protect its citizens.
At least three citizens groups patrolled busy sections of central Cairo during the holiday. The groups’ members, both men and women, shared the conviction that the authorities would not act against harassment unless the problem was forced into the public debate. They differed in their tactics: some activists criticized others for being too quick to resort to violence against suspects and encouraging vigilantism. One group leader compared the activists to the Guardian Angels in the United States.
“The harasser doesn’t see anyone who will hold him accountable,” said Omar Talaat, 16, who joined one of the patrols.
The years of President Hosni Mubarak’s rule were marked by official apathy, collusion in the assaults on women, or empty responses to the attacks, including police roundups of teenagers at Internet cafes for looking at pornography.
“The police did not take harassment seriously,” said Madiha el-Safty, a sociology professor at the American University in Cairo. “People didn’t file complaints. It was always underreported.”
Mr. Mubarak’s wife, Suzanne, who portrayed herself as a champion of women’s rights, pretended the problem hardly existed. As reports of harassment grew in 2008, she said, “Egyptian men always respect Egyptian women.”
Egypt’s new president, Mohamed Morsi, has presided over two holidays, and many activists say there is no sign that the government is paying closer attention to the problem. But the work by the citizens groups may be having an effect: Last week, after the Id al-Adha holiday, Mr. Morsi’s spokesman announced that the government had received more than 1,000 reports of harassment, and said that the president had directed the Interior Ministry to investigate them.
“Egypt’s revolution cannot tolerate these abuses,” the spokesman quoted Mr. Morsi as saying.
Azza Soliman, the director of the Center for Egyptian Women’s Legal Assistance, dismissed the president’s words as “weak.” During the holiday, she said, one of her sons was beaten on the subway after he tried to stop a man who was groping two foreign women. The police tried to stop him from filing a complaint. “The whole world is talking about harassment in our country,” Ms. Soliman said. “The Interior Ministry takes no action.”
For years, anti-harassment activists have worked to highlight the problems in Egypt, but the uprising seemed to give the effort more energy and urgency.
Over the holiday, the groups staked out different parts of Cairo’s downtown. One avoided any violence, forming human chains between women and their tormentors. The other group forcefully confronted men and boys it suspected of harassment, smacking around suspects before hauling them off to a police station.
One of that group’s founders, Sherine Badr el-Din, 30, started her work as an anti-harassment activist by asking men to get off the women-only cars on the Cairo subway, regarded as a safe zone. When they refused, she videotaped them and posted their pictures on the Internet, she said.
Last summer, one of the men attacked her. “I wanted to file a case, but the police officer refused, claiming they were only there to monitor the train schedules.” She said the group escalated its tactics out of frustration, after the police started releasing suspects the group had caught.
“Violence is not our method,” she said. “But the pressure was tremendous.”
Last week, as the group gathered near Tahrir Square, one member had what looked like a stun gun, and another shook a can of spray paint. Most participants were men, and some wore fluorescent green vests, with the words “combating harassment” written on the back.
They mused on the reasons for the frequency of the attacks on their sisters, mothers and friends, finding no sure answer in the blame often laid on poverty or religion, society’s indifference or the state’s contagious chauvinism.
They seemed more certain of the solution, as they plunged into the holiday crowds over several evenings. Some bystanders were supportive. But when violence broke out, there was less support. “I will tell the government on you,” one man screamed as the activists wrestled with a suspect.
Sometimes the patrol acted after seeing a woman being groped. At other times, it justified its attacks as preventive.
Two boys on a scooter hardly knew what hit them. One minute, they were driving along the Nile Corniche, saying something — maybe lewd, maybe not — to two girls strolling on the sidewalk. The next, they were being hauled off the scooter by the men in green vests. The melee that broke out afterward stopped traffic on one of downtown’s busiest roadways, before the police chased the patrol members off.
Afterward, Muhaab Selim, 23, a member of the group, could barely contain his anger. “Why do I have to wait until he touches them?” he yelled. “Why do people defend the harassers?”
By the end of the holidays, one of the group’s leaders, Muhammad Taimoor, 22, had been arrested after fighting with a suspect on the subway. Even so, he called the weekend a success. “We caught some harassers, sprayed them with paint and published their pictures everywhere,” Mr. Taimoor said. “The Interior Ministry wasn’t cooperating with us at all. They weren’t protecting women in the streets.”
While Mr. Taimoor and his colleagues were on patrol, another group, called Imprint, was in a nearby square. Nihal Saad Zaghloul, 27, an activist with the group, said its members stopped more than 30 men who were trying to harass women.
When the group believes someone is being harassed, some members form a wall between the attacker and the victim, while others take the woman to safety. “We don’t push back, and we don’t fight,” Ms. Zaghloul said. They ask police officers to be present, in case the woman wants to file a report.
Ms. Zaghloul, who became active after she and a friend were assaulted, was less critical of the patrol officers than some of the other activists. “They are understaffed, and at the same time, they are part of a society that always blames women, although they know it’s wrong.” She worried that the other group’s methods would alienate the public.
But she added, “No one understands their frustration better than me.”
Asmaa Al Zohairy contributed reporting.
In the USA...
November 4, 2012
The Republican Id
By BILL KELLER
This patch of southern Ohio between Cincinnati and Dayton is not the up-for-grabs Ohio you’ve read so much about. This is decided country, where House Speaker John Boehner is running for re-election unopposed, where “Defeat Obama” and “Romney/Ryan” lawn signs glisten in the chilly drizzle.
At the heart of it is a university whose students, according to a poll by the campus paper, favor Romney by 49 percent to 40 percent, and tend to think, as one senior half-joked, “that Sean Hannity is the news.” This is clearly not the place to gauge the last-minute mood swings of a state that many consider decisive.
It is, however, an interesting place to ponder the governing mentality of a Romney/Ryan administration, if that is what voters deliver on Tuesday. Miami University, a pretty grid of red brick, lawns and autumn foliage, is the place where Paul Ryan’s view of the world jelled, under the tutelage of an economist he describes as his mentor. I decided to spend my last column before the election peeking through this little window into the Republican id. If Mitt Romney is our next president, many in the party hope Ryan will play the role of chief ideologist. And if Romney loses, Ryan starts the 2016 campaign for his party’s nomination near the front of the line.
Ryan’s alma mater draws mostly white, upper-middle-class students from Midwest Republican families that are attracted to Miami as a place unlikely to turn their children against them. A well-endowed business school (Ryan majored in economics and political science) and a robust frat culture (Ryan was an enthusiastic Delta Tau Delta) tend to reinforce the conservative values represented by the Republican ticket — with one important asterisk we’ll get to later. In 2008, many Miami students veered out of character, thrilled by the historic Obama campaign, but now that enthusiasm has given way to disappointment and to something few of these kids have ever experienced: economic anxiety.
The macroeconomics professor who helped shape Paul Ryan is a voluble, passionate supply-sider and self-described “hard-core libertarian” named William R. Hart, known as Rich. Listening to him, you can imagine that you are hearing what Paul Ryan would say if he were not inhibited by the demands of electoral politics. Hart is the opposite of politic — to the point of regularly, publicly denouncing Miami University for what he regards as declining academic rigor and coddling of students, all in the university’s pursuit of “money, money, money.” Hart is not a coddler. He proudly reports that of the 112 students who took his latest Principles of Macroeconomics exam, 56 failed and 27 got D’s.
Rich Hart does not speak for Paul Ryan, but he spent many hours talking to Ryan, his eager student, and regards the candidate as a good friend and kindred spirit. What they share is an enduring and astringent kind of Republicanism that rests on a reverence for self-reliance, a conviction that government assistance leads to crippling dependency.
Hart sees the election not as a difference of approaches but a clash of philosophies. “Do we want to become a sort of European socialist welfare state?” he asked when we chatted in his office, decorated with Elvis and Nascar memorabilia, with Paul Krugman’s economics textbook demoted to a doorstop. “Or do we want to be a free-market capitalist economy where people who are productive get rewarded for working hard and creating wealth? What happens with these European welfare states is, everybody’s equally poor. I much prefer a little income inequality.”
Hart’s policy expectations for a Romney/Ryan regime are familiar from the campaign. They include rolling back environmental regulations that slow development of natural gas and coal. (“Not green energy,” he said with disgust. “Fossil fuel energy.”) They include entrusting health care for the poor, and as much else as possible, to the mercies of the states; requiring that Medicare compete in a voucher market; cutting marginal tax rates, of course. What is striking, talking to Ryan’s mentor, is not the policies but the fervor and the deep suspicion of the other side’s motives.
“My liberal friends say, well, Paul Ryan doesn’t care about the poor,” Hart said. “I would argue it’s the Democrats who don’t care about the poor. They’re the ones that make them wards of the state. And just write them welfare checks.”
This enslavement, as Hart sees it, is not well-intentioned nannying gone wrong, but cynical self-interest by liberal groups: “My view of the N.A.A.C.P. is, you can’t represent a group of downtrodden if you don’t have a permanent group of downtrodden to represent.”
Ryan, his former professor says, wants to “make these people productive members of society, where they can lift themselves up. Maybe others think along these lines, but he’s the only one that would actually try to implement policies.”
In his infamous 47-percent video and in some of his primary-season rhetoric, Mitt Romney leaned toward this view — that programs like food stamps and welfare and jobless benefits and the minimum wage had produced a parasite class. But in Romney, that feels like a casual attitude born of lifelong privilege. In Ryan, I think, it is bedrock. It’s not just a belief that austerity works, but an embrace of austerity as a moral imperative.
“I don’t know how I would have handled the 47 percent comment, if only because I would never have said such a thing,” Hart told me. “Although I understand the context of the remark given the dependency state that government policies have created for so many. Instead, I would have stressed from the outset the need for policies to end long-term dependency by so many on government handouts, policies that wean them off the taxpayer dole and make them productive elements of society — make them givers rather than takers.”
The vision of hands-off government will strike many — strikes me — as harsh, and particularly harsh now, against the backdrop of the storm’s ravages. Romney spent last week avoiding his earlier suggestion that the Federal Emergency Management Agency be disbanded, and you aren’t hearing anything of the kind from Ryan. When I put that to Hart in a follow-up e-mail, he replied, a little grudgingly, that it was “not inappropriate to have a federal agency to ‘coordinate’ relief efforts after national disasters. Having said that, my bet is FEMA, like most government agencies, is too big/bloated and could coordinate relief efforts with (far) fewer resources than it currently receives from taxpayers.”
It is possible that Romney’s inherent pragmatism, the moderation that emerged late in his campaign, could drive his presidency. I hope so. But that would require the cooperation of Ryan’s fellow House Republicans, who revere Ryan more than Romney and who seem unlikely to regard a Republican victory as a mandate for compromise.
“I just don’t think Paul would have gotten on the ticket if he didn’t get some kind of firm commitment,” Hart told me.
The one area where Ryan’s libertarian mentor is utterly out of sync with the Republican ticket is on social issues like abortion rights and gay marriage. “I want the Democrats out of my damn pocketbook,” he said, “and I want the Republicans out of my bedroom.”
This is also where Miami University’s student body is about as liberal as the rest of its generation, according to the university’s own research. Ryan’s no-exceptions opposition to abortion and embrace of the Defense of Marriage Act are such anathema here that the campus Republican chairman, Baylor Myers, told me his executive committee voted to avoid social issues altogether.
“We won’t discuss it this election,” he said. “Our entire focus is economic.” He added that he wished the national Republican Party would drop abortion from its platform and “reform its position” on gay rights. Because if the economy revives and questions of jobs and growth no longer overshadow issues of personal liberty, Paul Ryan can no longer count on being the big man on this campus.
November 5, 2012
Record Number Complete High School and College
By TAMAR LEWIN
Although the United States no longer leads the world in educational attainment, record numbers of young Americans are completing high school, going to college and finishing college, according to a Pew Research Center analysis of newly available census data.
This year, for the first time, a third of the nation’s 25- to 29-year-olds have earned at least a bachelor’s degree. That share has been slowly edging up for decades, from fewer than one-fifth of young adults in the early 1970s to 33 percent this year.
The share of high school graduates in that age group, along with the share of those with some college, have also reached record levels. This year, 90 percent were high school graduates, up from 78 percent in 1971. And 63 percent have completed some college work, up from 34 percent in 1971.
The study attributed the increase both to the recession and a sluggish jobs recovery, which led many young people to see higher education as their best option, and to changed attitudes about the importance of a college education. In a 2010 Gallup survey, about three-quarters of Americans agreed that a college education is very important, up from only 36 percent in 1978.
The wage premium for those with college degrees has leapt 40 percent since 1983, according to Anthony P. Carnevale, director of the Georgetown University Center on Education and the Workforce.
“The demand for college graduates has been increasing about 3 percent a year, while the supply has increased only 1 percent a year, which is why the college wage premium has increased so precipitously,” he said.
The United States was the undisputed global leader in educational attainment until 1992. But more recently, some European countries have been producing degree-holders at a higher rate — and a faster-growing rate.
“The recent increases in the U.S. come at a time when other advanced economies are registering similar or greater gains, leading experts and college presidents to question whether the U.S. has been losing its competitive position as the global leader in higher education,” the report said.
Over the past few years, education experts have warned that the United States had undergone a worrisome “education reversal,” in which older Americans are more educated than younger ones. For example, in 2007, the share of adults aged 45 to 64 who had graduated from high school or earned a bachelor’s degree was slightly higher than among 25- to 29-year-olds.
But now, the report found, “the education reversal that arose in the first decade of the 2000s has vanished or been reversed by recent improvements in the education attainment of young adults.”
November 5, 2012
Hacking of Tax Records Has Put States on Guard
By ROBBIE BROWN
The theft of tax information from a South Carolina computer system appears to have been the largest cyberattack ever on a state government and has put other states on high alert, computer security experts say.
The state announced late last month that an international hacker had stolen 3.6 million Social Security numbers and 387,000 credit and debit card numbers. Now tax departments across the country are inspecting their own security systems.
“When one employee’s laptop gets stolen, it’s a big deal,” said Verenda Smith, the deputy director of the National Federation of Tax Administrators. “So you can imagine the reverberations when this news came out.”
Since 2005, at least 11 state tax agencies have faced security breaches, according to the Privacy Rights Clearinghouse, a consumer rights group. But most were caused by internal accidents, not attacks, and none were on this scale.
“As a cyberattack, this appears to be in a league of its own,” said Beth Givens, the group’s director.
The hacking has raised questions about whether South Carolina was unprotected or simply unlucky. Most of the stolen credit cards were encrypted, but the Social Security numbers were not. The computer system that was hacked did not have a free layer of security monitoring offered to all South Carolina agencies, according to the State Budget and Control Board.
In a lawsuit filed last Wednesday, a former state senator, John Hawkins, said the state had failed to protect taxpayers and had not reported the attack promptly. The tax agency detected the attack on Oct. 10 and, after notifying federal authorities, alerted the public on Oct. 26.
“Obviously these hackers picked South Carolina because it was vulnerable,” Mr. Hawkins said. “I equate it to a burglar going into a neighborhood. He’s going to break into the house with no alarms and the door open.”
But South Carolina is hardly the first state to suffer a large-scale security breach. In Texas last year, Social Security records for 3.5 million people were inadvertently disclosed to the public on a computer server.
In Georgia in 2007, a computer disk containing personal information on 2.9 million people disappeared. At the federal Veterans Affairs Department in 2006, an employee lost a laptop and an external hard drive containing the Social Security records of 26.5 million active-duty troops and veterans.
Gov. Nikki R. Haley said that South Carolina had a state-of-the-art security system but that the hacker nevertheless found a way around it. Her office said on Friday that it was encrypting all tax files to reduce the harm if any were stolen, and that the process would be completed within 90 days. The state is paying up to $12 million to provide a free year of credit monitoring and identity theft prevention to anyone affected.
Last Wednesday, the state disclosed that tax records for 657,000 businesses had also been hacked.
Anyone who has filed a tax return since 1998 has been urged to contact state law enforcement officials. By last Thursday, 653,000 people had called the state’s emergency hot line, and 521,000 had signed up for identity protection.
Within state governments, tax agencies face the highest risk for hacking, said Larry Ponemon, the founder of a security research firm, the Ponemon Institute. If stolen, their data can be used for tax fraud, credit card fraud and identity theft.
“This is the crown jewel for a cyberattacker: having the Social Security numbers, personal information and credit card for the same person,” he said.
After the attack, state tax agencies, including in California, said they were monitoring their security particularly closely.
Michael Hicks, the director of the Maryland Cybersecurity Center at the University of Maryland, said states needed a clearer understanding of the attack in South Carolina.
“The only way states can raise the level of vigilance,” Mr. Hicks said, “is if they really get to the bottom of what really happened in this attack.”
November 5, 2012
Georgia’s Voters Will Decide on Future of Charter Schools
By MOTOKO RICH
ATLANTA — Staff members in the charter school division of the Georgia Department of Education keep notepads in their offices inscribed with a mantra: “Is it best for students? Then do it.”
But when it comes to charter schools, parents, teachers, education officials and legislators are deeply divided over what exactly would be best for students.
Here in Georgia, the future of charters, which are publicly financed but privately operated, could be determined Tuesday by a ballot measure that asks voters to amend the State Constitution so that an appointed statewide commission could authorize new schools.
Along with high-stakes testing and tenure changes, legislative efforts to expand charter schools are among the most contentious issues in education circles. Proponents say charters can experiment with new teaching strategies to help struggling students or those stuck in failing public schools. Detractors say the charters drain precious public money and energy from neighborhood schools.
At issue in Georgia is who should decide whether a charter school can open. Supporters of the amendment say a commission focused exclusively on charters is necessary to override resistant local school boards and ensure that parents have ample educational choices.
“Education is one of the few things in our country that you have no choice,” said Lyn Carden, the board chairwoman of the Georgia Charter Educational Foundation, which operates two charter schools that were initially denied applications by their local school boards.
“You live in this neighborhood, you go to this school,” Ms. Carden said. “For some parents, it works great, but not all schools are right for all kids.”
Critics of the amendment say families already have plenty of choices, including charter schools authorized by local school boards.
“We are not arguing the merits or demerits of charter schools,” said Herb Garrett, the executive director of the Georgia School Superintendents Association. “We’re just saying that decisions about new schools in a community ought to be made by elected officials who represent those citizens, not a bunch of political appointees in Atlanta who have no idea what’s going on in a local school district.”
The Georgia initiative, as well as a ballot measure in Washington State that would permit charters there for the first time, is being closely watched across the country. In both states, the measures have attracted financial support from national business leaders and advocacy groups.
In Washington, donors supporting the charter ballot initiative include Bill and Melinda Gates; the parents of Jeff Bezos, the founder and chief executive of Amazon; and Nicholas Hanauer, a prominent venture capitalist. Alice Walton, the daughter of Walmart’s founder, Sam Walton, has contributed to campaigns supporting the measures in both Georgia and Washington.
Americans for Prosperity, the Tea Party organization founded by the billionaire Koch brothers, has donated to a committee supporting the charter amendment in Georgia. Students First, a group run by Michelle A. Rhee, the former schools chancellor in the District of Columbia, has also contributed and is helping to organize supporters in the state.
The roster of contributors in Georgia includes several companies that manage charter schools, including K12 Inc., Charter Schools USA and National Heritage Academies. In all, committees supporting the ballot measure have collected 15 times as much as groups opposing the measure, according to public filings.
Opponents point to such wealthy donors and argue that the charter amendment is part of a broader agenda designed to privatize education and discredit public schools.
The heavy spending, some education experts say, could rouse the kind of opposition that exploded during the teachers’ strike in Chicago in September. The union there railed against teacher evaluations and challenges to union seniority that are advocated by some of the same groups behind the charter movement.
The Chicago strike “was a serious pushback against these fairly radical reformers coming in with a lot of money,” said John S. Ayers, the executive director of the Cowen Institute for Public Education Initiatives at Tulane University. “It will be interesting to see what happens in Georgia.”
As with many battles over public education, political alliances are being remade. Here in Georgia, where the charter amendment could give the state more power to overrule local education boards, conservatives who typically champion decentralized government are giving the amendment full-throated support.
Meanwhile, some Tea Party members have joined Democratic legislators, including State Senators Jason Carter and Vincent D. Fort, in opposing the measure. The state’s school superintendent, John D. Barge, a Republican, has come out against it as well.
The measure’s supporters say local school boards tend to be hostile to charter school applicants because they see them as competing for students and state financing. Public school districts “have a monopoly they wish to protect,” said Chip Rogers, a Republican state senator who sponsored the bill that put the measure on the November ballot. “But if they’re not serving their kids, you have to give them an additional option.”
Critics note that local school boards have repeatedly granted approval for charters. Of the 108 independent charter schools operating in Georgia, nearly 9 of 10 were authorized locally, said Louis Erste, the director of the State Education Department’s charter schools division.
Although the State Supreme Court last year struck down a previous incarnation of a state charter commission established in 2008, charter applicants rejected by local school boards may still appeal to the State Board of Education.
Many voters simply find it difficult to understand the amendment’s details and consequences.
“I find it offensive that voters literally have to have a law degree to figure out what is going on here,” said Elizabeth Hooper, a mother of three children who have attended public schools in Alpharetta, a suburb of Atlanta. “The General Assembly is using the voter as a pawn.”
At a forum about the measure last month, Monica Henson, the executive director of the Provost Academy, an online school that had been authorized by the now defunct state commission, said the amendment would help other similar schools start and grow.
“How can something like this be bad for kids?” she asked.
Ms. Henson said the school, which allows students to work on computers at home, served students who were at risk of dropping out of traditional schools, many of them from poor and minority families.
Such arguments anger black leaders who say charter schools either isolate African-American students or allow white families to escape to schools where children can avoid black classmates.
“Charter schools tend to resegregate or reinforce segregation,” said Mr. Fort, the chairman of the legislature’s black caucus committee on education.
Mr. Fort and others point to Pataula Charter Academy, a school in the southwest corner of the state that was approved by the short-lived charter commission three years ago. Three-quarters of the school’s 358 students are white, while the five counties that feed into it have populations that are 50 percent to 90 percent black.
“Of course, these numbers are not where we want to be,” said Cheryl Weathersby, Pataula’s business director. Ms. Weathersby said the school, which admits students by lottery, received few applications from black families.
Along the road leading to Pataula, neighbors had stuck orange signs into their front yards that read “Yes, Public Charter Schools — Amendment One.” A teacher at the school wore a green T-shirt with “Vote Yes for Charter Schools” emblazoned on the back.
Ms. Weathersby said the charter amendment was crucial to Pataula’s survival. “It scares me for parents,” she said. “What about our children? They’d have to go back to schools that didn’t work for them.”
Robbie Brown contributed reporting.
Supreme Court considers limits on class-action cases
By Agence France-Presse
Monday, November 5, 2012 22:15 EST
WASHINGTON — The US Supreme Court heard two cases that could limit the scope of class action lawsuits, after the court rejected a discrimination claim by 1.5 million female workers against retail giant Wal-Mart.
Comcast, the largest US cable operator, faces a class action lawsuit from two million of its customers in the eastern state of Pennsylvania.
The court also heard arguments in a case brought by the Connecticut Retirement Plans and Trust Funds against pharmaceutical laboratories Amgen.
The plaintiffs argued that the company artificially inflated the market price for Amgen stock by making misrepresentations about the safety of two Amgen drugs designed to stimulate red blood cell production and to reduce the need for blood transfusions.
Comcast subscribers argue that the cable company giant bought up competitors and, with control of nearly 70 percent of the market, were able to raise cable television subscription prices in the Philadelphia area.
“These actions were designed to eliminate competition, raise barriers to entry for potential competition and increase prices for services to supracompetitive levels,” the plaintiff’s brief read.
Comcast, however, wants the Supreme Court to reject the lawsuit because the plaintiffs as a group have not shown “a violation of the antitrust laws, individual injury resulting from that violation” or “measurable damages.”
The case is further complicated by an out-of-court settlement reached between the parties in June, two weeks before the case reached the court.
The Supreme Court must say whether a lower court was correct in allowing the Comcast case to proceed, or if — as the cable operator claims — it should have adopted an “admissible evidence” rule attesting to common damage suffered by the plaintiffs.
“The question on damages,” said Justice Stephen Breyer, “is to what extent did the absence of competition… raise price above the competitive level?”
The attorney representing the Comcast customers, Barry Barnett, said that “the only thing that’s really before the court is whether it’s more likely than not the plaintiffs have presented a model” demonstrating that the plaintiffs have suffered harm.
Rulings on the cases are expected next year.
In a landmark June 20, 2011 ruling, the top US court voted that since Wal-Mart had no overarching employment policy, the women that sued the company could not all have suffered discrimination for the same reasons.
The justices said the world’s largest retailer should therefore not be held liable for the tens of billions of dollars in backpay and damages sought by the plaintiffs.
November 6, 2012Obama Wins New Term as Electoral Advantage Holds
By JEFF ZELENY and JIM RUTENBERG
Barack Hussein Obama was re-elected president of the United States on Tuesday, overcoming powerful economic headwinds, a lock-step resistance to his agenda by Republicans in Congress and an unprecedented torrent of advertising as a divided nation voted to give him more time.
In defeating Mitt Romney, the president carried Colorado, Iowa, Ohio, New Hampshire, Virginia and Wisconsin, a near sweep of the battleground states, and was holding a narrow advantage in Florida. The path to victory for Mr. Romney narrowed as the night wore along, with Mr. Obama winning at least 303 electoral votes.
A cheer of jubilation sounded at the Obama campaign headquarters in Chicago when the television networks began projecting him as the winner at 11:20 p.m., even as the ballots were still being counted in many states where voters had waited in line well into the night. The victory was far narrower than his historic election four years ago, but it was no less dramatic.
“Tonight in this election, you, the American people, reminded us that while our road has been hard, while our journey has been long, we have picked ourselves up, we have fought our way back,” Mr. Obama told his supporters early Wednesday. “We know in our hearts that for the United States of America, the best is yet to come.”
Mr. Obama’s re-election extended his place in history, carrying the tenure of the nation’s first black president into a second term. His path followed a pattern that has been an arc to his political career: faltering when he seemed to be at his strongest — the period before his first debate with Mr. Romney — before he redoubled his efforts to lift himself and his supporters to victory.
The evening was not without the drama that has come to mark so many recent elections: For more than 90 minutes after the networks projected Mr. Obama as the winner, Mr. Romney held off calling him to concede. And as the president waited to declare victory in Chicago, Mr. Romney’s aides were prepared to head to the airport, suitcases packed, potentially to contest several close results.
But as it became increasingly clear that no amount of contesting would bring him victory, he called Mr. Obama to concede shortly before 1 a.m.
“I wish all of them well, but particularly the president, the first lady and their daughters,” Mr. Romney told his supporters in Boston. “This is a time of great challenges for America, and I pray that the president will be successful in guiding our nation.”
Hispanics made up an important part of Mr. Obama’s winning coalition, preliminary exit poll data showed. And before the night was through, there were already recriminations from Republican moderates who said Mr. Romney had gone too far during the primaries in his statements against those here illegally, including his promise that his get-tough policies would cause some to “self-deport.”
Mr. Obama, 51, faces governing in a deeply divided country and a partisan-rich capital, where Republicans retained their majority in the House and Democrats kept their control of the Senate. His re-election offers him a second chance that will quickly be tested, given the rapidly escalating fiscal showdown.
For Mr. Obama, the result brings a ratification of his sweeping health care act, which Mr. Romney had vowed to repeal. The law will now continue on course toward nearly full implementation in 2014, promising to change significantly the way medical services are administrated nationwide.
Confident that the economy is finally on a true path toward stability, Mr. Obama and his aides have hinted that he would seek to tackle some of the grand but unrealized promises of his first campaign, including the sort of immigration overhaul that has eluded presidents of both parties for decades.
But he will be venturing back into a Congressional environment similar to that of his first term, with the Senate under the control of Democrats and the House under the control of Republicans, whose leaders have hinted that they will be no less likely to challenge him than they were during the last four years.
The state-by-state pursuit of 270 electoral votes was being closely tracked by both campaigns, with Mr. Romney winning North Carolina and Indiana, which Mr. Obama carried four years ago. But Mr. Obama won Michigan, the state where Mr. Romney was born, and Minnesota, a pair of states that Republican groups had spent millions trying to make competitive.
Americans delivered a final judgment on a long and bitter campaign that drew so many people to the polls that several key states extended voting for hours. In Virginia and Florida, long lines stretched from polling places, with the Obama campaign sending text messages to supporters in those areas, saying: “You can still vote.”
Neither party could predict how the outcome would affect the direction of the Republican Party. Moderates were hopeful it would lead the rank and file to realize that the party’s grass-roots conservatism that Mr. Romney pledged himself to during the primaries doomed him in the general election. Tea Party adherents have indicated that they will argue that he was damaged because of his move to middle ground during the general election.
As he delivered his brief concession speech early Wednesday, Mr. Romney did not directly address the challenges facing Republicans. His advisers said that his second failed quest for the White House would be his last, with his running mate, Representative Paul D. Ryan of Wisconsin, standing as one of the leaders of the party.
“We have given our all to this campaign,” said Mr. Romney, stoic and gracious in his remarks. “I so wish that I had been able to fulfill your hopes to lead this country in a different direction.”
The results were more a matter of voters giving Mr. Obama more time than a second chance. Through most of the year slight majorities of voters had told pollsters that they believed his policies would improve the economy if they could stay in place into the future.
Mr. Obama’s campaign team built its coalition the hard way, through intensive efforts to find and motivate supporters who had lost the ardor of four years ago and, Mr. Obama’s strategists feared, might not find their way to polls if left to their own devices.
Up against real enthusiasm for Mr. Romney — or, just as important, against Mr. Obama — among Republicans and many independents, their strategy of spending vast sums of money on their get-out-the-vote operation seemed vindicated on Tuesday.
As opinion surveys that followed the first debate between Mr. Romney and Mr. Obama showed a tightening race, Mr. Obama’s team had insisted that its coalition was coming together as it hoped it would. In the end, it was not a bluff.
Even with Mr. Obama pulling off a new sweep of the highly contested battlegrounds from Nevada to New Hampshire, the result in each of the states was very narrow. The Romney campaign was taking its time early Wednesday to review the outcome and searching for any irregularities.
The top issue on the minds of voters was the economy, according to interviews, with three-quarters saying that economic conditions were not good or poor. But only 3 in 10 said things were getting worse, and 4 in 10 said the economy was improving.
Mr. Romney, who campaigned aggressively on his ability to turn around the deepest economic downturn since the Great Depression, was given a narrow edge when voters were asked which candidate was better equipped to handle the economy, the interviews found.
The electorate was split along partisan lines over a question that drove much of the campaign debate: whether it was Mr. Obama or his predecessor, George W. Bush, who bore the most responsibility for the nation’s continued economic challenges. About 4 in 10 independent voters said that Mr. Bush should be held responsible.
The president built a muscular campaign organization and used a strong financial advantage to hold off an array of forces that opposed his candidacy. The margin of his victory was smaller than in 2008 — he held an advantage of about 700,000 in the popular vote early Wednesday — but a strategic firewall in several battleground states protected his Electoral College majority.
As Mr. Romney gained steam and stature in the final weeks of the campaign, the Obama campaign put its hopes in perhaps one thing above all others: that the rebound in the auto industry after the president’s bailout package of 2009 would give him the winning edge in Ohio, a linchpin of his road to re-election.
Early interviews with voters showed that just over half of Ohio voters approved of the bailout, a result that was balanced by a less encouraging sign for the president: Some 4 in 10 said they or someone in their household had lost a job over the last four years.
He defeated Mr. Romney 52 percent to 47 percent in Hamilton County, home to Cincinnati, but only because of the number of votes he banked in the month leading up to Election Day.
Mr. Obama won despite losing some of his 2008 margins among his key constituencies, including among younger voters, blacks and Jewish voters, yet he appeared to increase his share among Hispanics and Asians. Early exit poll results showed Latinos representing about 1 in 10 voters nationwide, and voting for Mr. Obama in greater numbers than four years ago, making a difference in several states, including Colorado and Florida.
He held on to female voters, according to preliminary exit polls conducted by Edison Research, but he struggled even more among white men than he did four years ago.
Mr. Romney’s coalition included disproportionate support from whites, men, older people, high-income voters, evangelicals, those from suburban and rural counties, and those who call themselves adherents of the Tea Party — a group that had resisted him through the primaries but had fully embraced him by Election Day.
The Republican Party seemed destined for a new round of self-reflection over how it approaches Hispanics going forward, a fast-growing portion of the voting population that senior party strategists had sought to woo before a strain of intense activism against illegal immigration took hold within the Republican grass roots.
It was the first presidential election since the 2010 Supreme Court decision loosening restrictions on political spending, and the first in which both major-party candidates opted out of the campaign matching system that imposes spending limits in return for federal financing. And the overall cost of the campaign rose accordingly, with all candidates for federal office, their parties and their supportive “super PACs” spending more than $6 billion combined.
The results Tuesday were certain to be parsed for days to determine just what effect the spending had, and who would be more irate at the answer — the donors who spent millions of dollars of their own money for a certain outcome, or those who found a barrage of negative advertising to be major factors in their defeats.
While the campaign often seemed small and petty, with Mr. Romney and Mr. Obama intensely quarreling and bickering, the contest was actually rooted in big and consequential decisions, with the role of the federal government squarely at the center of the debate.
Though Mr. Obama’s health care law galvanized his most ardent opposition, and continually drew low ratings in polls as a whole, interviews with voters found that nearly half wanted to see it kept intact or expanded, a quarter wanted to see it repealed entirely and another quarter said they wanted portions of it repealed.
In Chicago, as crowds waited for Mr. Obama to deliver his speech, his supporters erupted into a roar of relief and elation. Car horns honked from the street as people chanted the president’s name.
“I feel like it’s a repudiation of everything the Republicans said in the campaign,” said Jasmyne Walker, 31, who jumped up and down on the edge of a stone planter in a downtown plaza. “Everybody said that if he lost it would be buyer’s remorse — that we were high on hope in 2008. This says we’re on the right track. I feel like this confirms that.”
Michael Cooper contributed reporting.
Click to watch Obama's victory speech: http://www.youtube.com/watch?v=ddx8t6zGWxA
November 6, 2012President Obama’s Success
President Obama’s dramatic re-election victory was not a sign that a fractured nation had finally come together on Election Day. But it was a strong endorsement of economic policies that stress job growth, health care reform, tax increases and balanced deficit reduction — and of moderate policies on immigration, abortion and same-sex marriage. It was a repudiation of Reagan-era bromides about tax-cutting and trickle-down economics, and of the politics of fear, intolerance and disinformation.
The president’s victory depended heavily on Midwestern Rust Belt states like Ohio, where the bailout of the auto industry — which Mr. Obama engineered and Mr. Romney opposed — proved widely popular for the simple reason that it worked.
More broadly, Midwestern voters seemed to endorse the president’s argument that the government has a significant role in creating private-sector jobs and boosting the economy. They rejected Mr. Romney’s position that Washington should simply stay out of such matters and let the free market work its will.
The Republicans’ last-ditch attempt to steal away Pennsylvania by stressing unemployment was a failure there and elsewhere. Voters who said unemployment was a major issue voted mainly for Mr. Obama.
Mr. Romney, it turns out, made a fatal decision during the primaries to endorse a hard line on immigration, which earned him a resounding rejection by Latinos. By adopting a callous position that illegal immigrants could be coerced into “self-deportation,” and by praising Arizona’s cruel immigration law, Mr. Romney made his road in Florida and several other crucial states much harder. Only one-third of voters said illegal immigrants should all be deported, while two-thirds endorsed some path to legal residency and citizenship. The Republican approach, if unchanged, will cost them dearly in the future.
Still, Mr. Obama’s victory did not show a united country. Richer Americans supported Mr. Romney, while poorer Americans tended to vote for Mr. Obama. There also remained clear divisions among voters by gender, age, race and religion.
African-Americans and Hispanics overwhelmingly supported Mr. Obama. White men voted for Mr. Romney; he won among those who said they opposed gay marriage, wanted to outlaw abortion, or favored mass deportation of illegal immigrants. None of those are majority positions in this country anymore.
Mr. Romney’s strategy of blaming Mr. Obama for just about everything, while serenely assuring Americans he had a plan to cut the deficit without raising taxes or making major cuts in Medicare, simply did not work.
A solid majority of voters said President George W. Bush was to blame for the state of the economy rather than Mr. Obama. And voters showed more subtlety in their economic analysis than Mr. Romney probably expected. Those who thought the housing market and unemployment were the nation’s biggest problems said they voted for Mr. Obama. Those most concerned about taxes voted heavily for Mr. Romney.
Significantly, 60 percent of voters said taxes should be raised either on the rich or on everyone. Only 35 percent said they should not be raised at all; that group, naturally, went heavily for Mr. Romney. The polling made it clear that Americans were unhappy with the economic status quo, and substantial numbers of voters said the economy was getting worse. But Mr. Romney did not seem to persuade voters that the deficit was a crushing problem. Only 1 in 10 voters said the deficit was the most important issue facing the country.
Republicans had to be disappointed in the results of their unrelenting assault on Mr. Obama’s health care reform law. Only around a quarter of Americans said it should be repealed in its entirety.
People who were comfortable with the rightward slide of the Republican Party (as measured by their comfort with the Tea Party) voted heavily for Mr. Romney.
But Christopher Murphy’s victory over Linda McMahon in the Senate race in Connecticut, Joe Donnelly’s defeat of Richard Mourdock in Indiana’s Senate race and Claire McCaskill’s defeat of Todd Akin in the Missouri Senate race showed the price the Republicans are paying for nominating fringe candidates in their primaries.
The polls were heartening in that they indicated that a solid majority of Americans believe abortion should be legal, and that half of Americans now say their states should recognize marriages between same-sex couples.
That the race came down to a relatively small number of voters in a relatively small number of states did not speak well for a national election apparatus that is so dependent on badly engineered and badly managed voting systems around the country. The delays and breakdowns in voting machines were inexcusable.
11/07/2012 08:48 AMPresidential Election in US: Europe Welcomes Obama's Win
Europe was quick to congratulate US President Barack Obama on Wednesday morning as he won his re-election battle against Republican challenger Mitt Romney. Markets in European capitals appeared poised for a rally, but dark clouds loom ahead.
In the end, it wasn't even that close. US President Barack Obama easily surpassed the 270 electoral votes he needed to defeat Republican challenger Mitt Romney on Tuesday evening as swing state after swing state fell into the incumbent's column. At just after 1 a.m. on the East Coast, with his deficit insurmountable, Romney conceded defeat.
"This is a time of great challenges for America and I pray that the president will be successful in guiding our nation," Romney said in remarks before supporters in Boston. "I so wish that I had been able to fulfill your hopes to lead the country in a different direction, but the nation chose another leader." Just prior to his concession speech, Romney had called Obama to congratulate him.
European stock futures signalled a strong opening on Wednesday morning on the news as the uncertainty hanging over the leadership of the US economy was removed. Analysts, however, fear that the bump will be short-lived as the first challenge of Obama's second term approaches, that of coming to agreement with Republicans on a deficit reduction deal to dodge the $600 billion in spending cuts and tax increases that will automatically go into effect on Jan. 2, 2013 in the absence of such a deal.
German Chancellor Angela Merkel sent a letter to Obama on Wednesday morning to congratulate him on his victory. She noted how relations had always been close and cordial with Obama. "I am pleased to be able to continue with this," she wrote. "I would be pleased to host you again as my guest in Germany." She said the two had a common task in managing the global financial and economic crisis, the military and reconstruction mission in Afghanistan and the challenges posed by Iran's nuclear program.
In France, President François Hollande said Obama's re-election had been a "clear choice for an open, united America that is totally engaged on the international scene." According to the news agency AFP, he said that Obama's victory would "once again reinforce our partnership to facilitate the return of economic growth in our countries, to fight unemployment and to find solutions to crises that threaten us, notably in the Middle East."
Meanwhile, former German Foreign Minister Frank-Walter Steinmeier, now prominent member of the political opposition, said it is time for Europe to invest more in the trans-Atlantic relationship. "We have an interest in Europe remaining important which is why we have to invest more in cooperation across the Atlantic," said Steinmeier, who is currently the floor leader for the opposition Social Democrats in parliament. "We are always pouting in the corner waiting for the Americans to redefine the trans-Atlantic relationship."
Steinmeier, speaking on German public television station ARD, welcomed Obama's re-election, saying "I was concerned that a President Romney would have further divided an already fractured country."
Congratulations from Europe
European Union leaders likewise released a statement on Wednesday morning congratulating Obama. "We have the pleasure of extending our warm congratulations to President Obama on his re-election as president of the United States of America," read the statement released by European Commission President José Manuel Barroso and European Council President Herman Van Rompuy. "The United States is a key strategic partner of the European Union and we look forward to continuing the close cooperation established with President Obama over these last four years, to further strengthening our bilateral ties and to jointly addressing global challenges, including in the fields of security and economy."
Despite trailing slightly in the popular vote with some 70 percent of precincts across the US reporting, Obama managed an almost complete sweep of the nine swing states which appeared to be teetering between the two candidates on the eve of the vote. Obama took Ohio, Wisconsin, Virginia, Iowa, New Hampshire, Colorado and Nevada, ceding only North Carolina to Romney. Florida remains too close to call.
Obama thanked his supporters via Twitter before taking the stage in Chicago for an ecstatic victory speech. "Whether I earned your vote or not, I have listened to you," he said. "I have learned from you. And you've made me a better president." He vowed to continue efforts to work with Republicans.
Exit polls showed that the struggling US economy was top in voters' minds as they went to the polls, but also revealed that about half believe that many of the difficulties remain a holdover from the disastrous economic conditions that Obama inherited from his predecessor George W. Bush four years ago. With unemployment still high in the US and the economic recovery fragile, Romney had presented himself as the candidate better equipped to improve the lot of America's middle class.
'Best Is Yet to Come'
But polls also indicate that many voters had come to the conclusion that Romney was the candidate of rich Americans and believed that Obama would do more to help the country's poor. Obama also did better than Romney among Hispanics -- important for his victory in New Mexico and the swing state of Colorado -- and blacks, two voting blocs that Republicans have had a hard time attracting in recent elections. Exit polls also indicated that a majority of women tended to support Obama over his Republican challenger, who had been dogged by ill-considered comments on rape and abortion by two different conservative Republican candidates for the Senate. Both of them -- Todd Akin in Missouri and Richard Mourdock in Indiana -- lost.
Despite a victory that came quicker than many pundits had predicted, the next four years promise to be a hard slog for Obama. Republicans managed to defend their majority in the House of Representatives, while Democrats won a small majority in the Senate. Furthermore, with the popular vote split down the middle, it seems unlikely that a wave of bipartisanship is about to wash over Washington D.C.
And that could make Obama's next few weeks extraordinarily challenging. With unemployment at 7.9 percent -- the highest it has been for an incumbent president seeking re-election since Franklin D. Roosevelt in the 1930s -- and all eyes on the $1 trillion budget deficit, Obama must also quickly come to agreement with Republicans to avoid the so-called "fiscal cliff" looming in the new year. As part of the Budget Control Act of 2011, US lawmakers agreed that immediate $600 billion in across-the-board spending cuts and tax hikes would automatically go into effect at the beginning of 2013 should the two parties not reach agreement on budget deficit reduction measures -- cuts that economic experts believe would send the US economy into recession. In late 2011, the so-called "Supercommittee" of leading Congressional Democrats and Republicans failed to find a compromise acceptable to both parties.
Still, the mood in Chicago in the wee hours of Wednesday morning was one of celebration. And Obama did his best to stoke the wildly cheering crowd. "Tonight in this election you, the American people, reminded us that while our road has been hard, while our journey has been long," he said. "We have picked ourselves up, we have fought our way back, and we know in our hearts that for the United States of America, the best is yet to come."
07 November 2012 - 12H27
World leaders hail Obama victory, pledge cooperation
AFP - World leaders on Wednesday hailed President Barack Obama's sweeping re-election, with allies pledging to deepen cooperation with the United States on fighting the world economic slump and maintaining security across the globe.
Congratulations poured in from across the world, including fellow UN Security Council members Britain, China, France and Russia as well as its staunch Middle East ally Israel and Obama's ancestral home in Kenya.
Russia President Vladimir Putin, whose relations with Washington have often been frosty, sent a telegram congratulating Obama on his victory over Republican challenger Mitt Romney.
"We hope that the positive beginnings that have taken hold in Russian-US relations on the world arena will grow in the interests of international security and stability," Russian news agencies quoted Putin's spokesman Dmitry Peskov as saying.
Moscow is ready to "go as far as the US administration is willing to go," Foreign Minister Sergei Lavrov was quoted as saying by the RIA Novosti news agency.
In Beijing, Chinese President Hu Jintao, who himself is handing over power at a Communist Party congress starting this week, noted "positive progress" in Sino-US relations over the past four years despite tensions over issues such as trade and territorial disputes involving US allies.
China will "look to the future and make continuous efforts for fresh and greater progress in the building of the China-US cooperative partnership," foreign ministry spokesman Hong Lei told reporters.
Israeli Prime Minister Benjamin Netanyahu, who at times appeared to have tense relations with Obama, also joined the well wishers.
"I will continue to work with President Obama to ensure the vital security interests of Israel and the United States," said Netanyahu, who had appeared to throw his support behind Romney during the election campaign.
Iran, facing Western pressure particularly from the United States as well as archfoe Israel over its controversial nuclear drive, has yet to comment on Obama's win.
British Prime Minister David Cameron said he was looking forward to working again with his "friend" Obama on several fronts, including kickstarting the world economy and finding a solution for the escalating Syria conflict.
"There are so many things that we need to do: we need to kickstart the world economy and I want to see an EU-US trade deal," Cameron said.
"One of the first things I want to talk to Barack about is how we must do more to try and solve this crisis," he said, referring to the near 20-month conflict in Syria that world leaders have so far failed to resolve.
Elsewhere in the Middle East, Palestinian president Mahmud Abbas urged the US leader to pursue peace efforts while Palestinian negotiator Saeb Erakat said he hoped that Obama's re-election would mean the creation of a Palestinian state in the next four years.
Direct talks between Israel and the Palestinians have been on hold since September 2010.
In Europe, German Chancellor Angela Merkel wrote to Obama saying she looked forward to continuing cooperation "so both our countries can continue to stand side-by-side to contend with the important foreign policy and economic challenges that we face as friends and allies".
Her message was echoed by European Union President Herman Van Rompuy, Commission President Jose Manuel Barroso and French President Francois Hollande.
Hollande said Obama's re-election is a "clear choice for an open, united America that is totally engaged on the international scene".
Kenyan President Mwai Kibaki told Obama that people in his ancestral homeland were celebrating his "well deserved victory".
"Kenya, as always is proud of our association with you," Kibaki said in a statement. "We look forward to the deepening of relations between our two countries during your second term in office."
"The reason why he has won is because God has given it to him," said Sarah Obama, 90 this year and the third wife of the paternal grandfather of the president, who has said he regards her as a grandmother.
South African President Jacob Zuma urged the United State to continue playing a positive role in Africa, saying "we value our relations with the United States and look forward to strengthening bilateral cooperation in the years to come."
Egypt's Islamist President Mohamed Morsi also hailed the win, saying he hoped it would strengthen the "friendship between the two countries".
In Muslim majority Malaysia, Prime Minister Najib Razak urged Obama to continue to foster understanding and respect between the United States and Muslims worldwide.
There was no immediate official reaction in nuclear-armed Pakistan, a key US ally in the "war on terror" but whose relations with Washington are only now beginning to rekindle after lurching from crisis to crisis last year.
Israel PM congratulates Obama, says ties strong
AFP - Israel Prime Minister Benjamin Netanyahu on Wednesday congratulated US President Barack Obama on his re-election, saying ties between their two countries were "stronger than ever."
"The prime minister congratulates the president of the United States for his victory in the election," Netanyahu said in a statement. "The strategic alliance between Israel and the United States is stronger than ever."
"I will continue to work with President Obama to ensure the vital security interests of Israel and the United States," Netanyahu added, saying he would meet later Wednesday with US ambassador to Israel Dan Shapiro.
Relations between Obama and Netanyahu have at times been tense, with the Israeli leader appearing to throw his support behind Obama's Republican opponent Mitt Romney during the election campaign.
But in recent weeks, as Obama's re-election looked increasingly likely, Israeli officials stressed that a second term for the US president would not mean a deterioration in bilateral ties.
Israel's Defence Minister Ehud Barak also offered Obama his congratulations, saying he expected the US president to continue to offer Israel strong support.
"I have no doubt that the Obama administration will continue its policy whereby Israel's security is at its very foundations, as well as its efforts to tackle the challenges facing all of us in the region," he said in a statement.
"I believe that in the tradition of deep friendship and with a backdrop of shared experiences accrued with President Obama, it will also be possible to overcome any differences in stance, should they arise."
Israeli Vice Prime Minister Silvan Shalom offered a similar assessment.
"All the US administrations have supported Israel on the political, security and economic fronts because we have common interests and values," he told public radio.
"Barack Obama has been with us during the most sensitive moments," he added. "Those who say that it will be hard and that there will be a confrontation during the second Obama term are wrong."
07 November 2012 - 10H53
Palestinian president welcomes Obama win.
AFP - Palestinian president Mahmud Abbas on Wednesday congratulated US President Barack Obama on his re-election and called on him to pursue Middle East peace efforts.
Abbas "congratulated US President Barak Obama on his re-election as US president for a second term," said a statement carried by official news agency WAFA.
"The president hopes that Obama continues his efforts to achieve peace in the Middle East."
Direct talks between Israel and the Palestinians have been on hold since late September 2010, when they ground to a halt over settlement construction.
While Obama's administration sought to renew an Israeli partial settlement freeze to push talks forward, it also opposed both a Palestinian bid for full UN membership and the admission of Palestine as a UNESCO member.
Palestinian negotiator Saeb Erakat said he hoped Obama's re-election would mean the creation of a Palestinian state in the next four years.
"We hope that a Palestinian state will be implemented in Obama's next term," he told AFP.
Erakat pointed out that Israel had announced new settlement tenders as Americans were going to the polls on Tuesday, and called on Obama to take swift action to prevent continuing Israeli settlement activity.
He also urged the new administration to back Palestinian plans to seek enhanced status at the United Nations General Assembly, where they are expected to request non-member status later this month.
"We hope Obama will stop settlements immediately and not stop the Palestinians from going to the UN to get non-member status because non-member status will protect the peace process and the two-state solution," Erakat said.
In Gaza, the ruling Hamas movement reacted cautiously to Obama's win, with spokesman Taher al-Nunu saying the group was "waiting to see if there will be a positive change in Obama's policy or not."
"We hope that Obama commits to legitimate Palestinian rights and stops his policy of double standards and bias towards Israel."
Egypt's Morsi hopes Obama win boosts 'friendship'
07 November 2012 - 10H53
AFP - Egypt's Islamist President Mohamed Morsi on Wednesday hailed his US counterpart Barack Obama re-election and said he hoped it would strengthen the "friendship" between their two countries.
Morsi hoped for a "strengthening of the friendship between the two countries to serve their common interests, namely justice, freedom and peace," in a telegram of congratulations released by the official news agency MENA.
Despite the fall of its key regional ally president Hosni Mubarak in last year's uprising, Egypt remains the second largest recipient of US foreign aid -- after Israel -- totalling $1.5 billion a year, mostly for its military.
In September, however, Obama sparked intrigue over the state of US relations with Egypt after he said the country, which is Islamist-dominated in the post-Mubarak era, was neither a friend nor a foe.
Obama's comments came after a mob raided the US embassy in Cairo in protest at a film made on US soil and deemed anti-Islam that also caused riots across the Muslim world.
« Last Edit: Nov 07, 2012, 07:53 AM by Rad »
November 7, 2012
Abroad, Obama’s Victory Brings Demands for Attention
By ALAN COWELL
LONDON — World leaders sought comfort from the familiar on Wednesday after President Obama’s re-election but, with the global political landscape substantially unchanged and crises on hold while the vote unfolded, many vied with new vigor for his attention and favor as he embarks on a second term.
In marked contrast to a euphoric surge four years ago when many hailed Mr. Obama’s victory as a herald of renewal, the mood was subdued, reflecting not only the shadings of opinion between the American leader’s friends and foes but also a generally lowered expectation of America’s power overseas.
Mr. Obama, one French analyst said, is “very far from the hopes that inflamed his country four years ago.”
Even in Kenya, where Mr. Obama’s father was from, the energy surrounding this election was just a shadow of what it had been in 2008, when it seemed like the entire African continent was cheering him on. Many Kenyans have been disappointed that Mr. Obama has yet to visit as president, part of a broader feeling on the continent that Africa has not been a priority, certainly not compared with the unfolding nuclear debate in Iran and the civil war in Syria.
Some were quick to list their conflicting requirements, signaling the diplomatic shoals ahead.
Iranian officials hinted that talks between Iran and the United States were a possibility.
“If it benefits the system, we will negotiate with the U.S.A. even in the depths of hell,” Mohammad Javad Larijani, one of several brothers with key positions in the ruling elite, told the semiofficial Mehr news agency, saying bilateral talks — rumored but denied in Washington and Tehran — were “not taboo.” At the same time, Danny Danon, the deputy speaker of the Israeli Parliament who is regarded as a staunch ally of the Republicans, evoked “the existential threat posed to Israel and the West by the prospect of a nuclear-armed Iran.”
“Now is the time for President Obama to return to the wise and time-honored policy of ‘zero daylight’ between our respective nations,” Mr. Danon said.
Mr. Danon is a member of the conservative Likud Party led by Israel’s prime minister, Benjamin Netanyahu, who has tense relations with Mr. Obama and who was widely perceived in Israel and the United States as having supported the Republican challenger, Mitt Romney.
“It was our mistake that Bibi went and kissed the other one before the election,” said Michael Pashko, a worker in an electrical supplies store in Jerusalem, referring to the prime minister by his nickname. “Those kisses will cost him dearly.”
Mahmoud Abbas, the president of the Palestinian Authority, said in a brief statement that he hoped Mr. Obama would press for peace in the Middle East.
That call seemed mirrored in Malaysia, where Prime Minister Najib Razak urged Mr. Obama to “continue in his efforts to foster understanding and respect between the United States and Muslims around the world” — a relationship to which the American leader committed himself at the beginning of a first term.
Before the outcome was known, Chinese analysts had summed up what seemed to be a widespread calculation that the Chinese leadership, itself scheduled to change in two days’ time, favored Mr. Obama “because he’s familiar,” said Wu Xinbo, deputy director of the Center for American Studies at Fudan University in Shanghai. A victory for Mr. Romney would have made China “a little nervous because he might bring new policies.”
President Hu Jintao of China, praised the “hard work of the Chinese and American sides” over Mr. Obama’s first term in creating “positive developments” in their relationship.
“With an eye toward the future, China is willing, together with the United States, to continue to make efforts to promote the cooperative partnership between China and the United States so as to achieve new and even greater development, bringing better benefits to the people of the two countries and the people of the world.”
China’s response was colored by a pre-election pledge from Mr. Romney to label Beijing a currency manipulator. “With Obama continuing,” said Poon Tsang, a street market vendor in Hong Kong, “there should be some stability in his relationship with China.”
Across Europe, many greeted news of Mr. Obama’s re-election with a sense of mild relief, though it was not immediately clear whether those feelings were accompanied by any enhanced expectation that, armed with a new mandate, the Obama administration would find solutions to the huge challenges still facing it in Afghanistan, Iran, Pakistan, Syria and the Middle East.
Imran Khan, a prominent Pakistani politician, urged the re-elected Mr. Obama to “give peace a chance” after a first term marked by “increased drone attacks, a surge in Afghanistan, increased militancy in Pakistan as a result of that.”
Most Afghans appeared pleased by the election result, welcoming the continuity it offered in a country buffeted violently by change and conflict over the past few years, although many were worried that Mr. Obama could accelerate the withdrawal of American troops from the country, due for 2014.
Mr. Obama is also under pressure to increase his involvement in ending the Syrian war.
Speaking to reporters during a visit to Jordan, Prime Minister David Cameron of Britain said early on Wednesday: “One of the first things I want to talk to Barack about is how we must do more to try and solve this crisis.”
On the ground in Syria, rebels fighting to overthrow President Bashar al-Assad seemed divided over the impact of a second term for Mr. Obama. A commander who asked to be identified only by his first name, Maysara, said he expected Washington to take a much clearer stance within 10 days. “If they don’t, Syria will become like Somalia,” he said.
By contrast, Fawaz Tello, an opposition figure living in Germany, referred to a Romney proposal to help the rebels while “Obama made no clear proposals.” A second term for Mr. Obama, he said, was “not a good sign.”
Some of the favorable responses to Mr. Obama reflected campaign blunders by Mr. Romney who drew barbs from both Britons and Spaniards for remarks about their countries.
“We in Spain wanted Obama to win because he is more like us, we still see him as a transformative leader,” said Manel Manchon, a political scientist. “Romney insulted Spain, and you can’t just blame Spain for this crisis.”
Like most western Europeans, Britons are broadly more liberal than Americans; even most British conservatives sympathize far more with Democrat than with Republican views on social issues like abortion, the death penalty and health care.
There is also a perception in Britain and elsewhere in Europe that a Romney government would have been parochial, suspicious of foreigners and untested in world affairs, while Mr. Obama’s victory, as the left-leaning Guardian newspaper put it, “is good for Americans, good for America, and good for the world.”
Britain has been a close ally of successive American administrations in the wars in Iraq and Afghanistan and in its response to the so-called Arab Spring, priding itself on what Mr. Cameron and others call a “special relationship.”
Washington’s reach elsewhere seemed more ambiguous.
After his election in 2008, for instance, Mr. Obama promised a “reset” with Moscow. But the United States and Russia took opposing positions on the Libyan and Syrian crises and the Kremlin has depicted the American response to antigovernment protests in Moscow as undermining the return to power of President Vladimir V. Putin.
Russian leaders “feel they have been duped and victimized and the U.S. has it in for them,” said Vladimir Pozner, who hosts a talk show on Russia’s Channel 1. But after Mr. Obama’s victory became clear, Russian officials issued the most optimistic comments to be heard in months about relations with the United States.
Dmitri S. Peskov, spokesman for Mr. Putin, said that “in general, the Kremlin took the news about Barack Obama’s victory in the elections quite positively.”
In Indonesia, where Mr. Obama spent some of his childhood, students at his former elementary school cheered his victory, as did elite Indonesians gathered at a party hosted by the American Embassy. On the streets, motorcycle taxi drivers raised their fists, shouting “Obama, Obama.”
For some Europeans, the victory offered an object lesson in the politics of economic hardship that has cost leaders in Britain, France, Spain and elsewhere their jobs.
“Obama has succeeded where Sarkozy, Zapatero and Brown failed — to be re-elected amid a major economic crisis,” deputy editor François Sergent wrote in a special edition of the leftist newspaper Libération in France.
The sense that Mr. Obama’s second term would be less constrained by electoral considerations offered analysts a rich theme. “For all the criticism of Obama, he now has the tail wind and the independence of not having to seek re-election,” said Claudia Schmucker, of the German Council on Foreign Relations. “He can use that for foreign policy, too.”
But there was unease in Germany that Mr. Obama’s focus on Asian issues, in particular the rise of China, had sapped transatlantic ties with Europe. “I hope he will not only be the Pacific president, but also the trans-Atlantic president,” Philipp Missfelder, a leading member of Chancellor Angela Merkel’s Christian Democrats, said in an interview.
Few analysts dwelt on the racial implications of Mr. Obama’s re-election. But in South Africa, whose prism is shaped by the decades of apartheid, Mathews Phosa, a senior member of the ruling African National Congress, said the outcome made Mr. Obama a potent symbol of the triumph of merit over race. “There is hope for the future if we all transcend racial patterns and look at people as people on their merits,” he said.
Reporting was contributed by Jane Perlez and Keith Bradsher in Beijing; Hilda Wang in Hong Kong; Isabel Kershner and Jodi Rudoren in Jerusalem; Ellen Barry and Andrew Roth in Moscow; Sara Schonhardt in Jakarta, Indonesia; Scott Sayare in Paris; Dan Bilefsky in Barcelona, Spain; Tim Arango and Hwaida Saad in Antakya, Turkey; Sebnem Arsu in Istanbul; Sarah Lyall in London; Lydia Polgreen in Johannesburg; Nicholas Kulish and Chris Cottrell in Berlin; Jeffrey Gettleman in Nairobi, Kenya; Graham Bowley in Kabul, Afghanistan; Salman Masood in Islamabad, Pakistan; Ramtin Rastin in Tehran; and Thomas Erdbrink in Amsterdam.
November 6, 2012
Greece Prepares to Vote on $23 Billion in New Cuts
By LIZ ALDERMAN and RACHEL DONADIO
ATHENS — Destabilized by scandals yet held together by a lack of alternatives, the Greek government prepared to push a raft of politically toxic new austerity measures through Parliament on Wednesday, a move aimed at securing international financing and ensuring that the debt-racked nation will remain in the euro zone.
But some members of Prime Minister Antonis Samaras’s fragile three-party coalition government were expected to break ranks and vote against the measures, reviving questions about how long the coalition can hold together.
On the streets, austerity-weary Greeks kicked off two days of nationwide strikes on Tuesday to protest the new measures, which will total $23 billion over the next four years.
The measures, which are expected to pass by a razor-thin margin in Parliament, are required to unlock $40 billion in rescue financing that the country needs to meet expenses. The European Union’s commissioner for economic and monetary affairs, Olli Rehn, said in Brussels on Monday that lenders were on track to release the aid.
But with so many volatile elements in play, including a series of interlocking scandals in Greece that are gaining momentum, analysts said that it was unclear if the Samaras government could survive under the pressure. “All systems are in critical condition, even the smallest thing can destabilize the system or the government,” said Paschos Mandravelis, a columnist for the daily newspaper Kathimerini.
Even as they jockey over a new round of austerity, leaders are under fire for failing to crack down on high-level tax evasion, after they were handed a list two years ago of more than 2,000 Greeks said to have Swiss bank accounts.
Called the Lagarde list, after Christine Lagarde, the International Monetary Fund chief who provided the information, it was published last week by the magazine HotDoc, prompting the arrest and rapid acquittal of the publication’s editor. The entire affair has done substantial damage to the already weakened Socialist Party, the second largest in Mr. Samaras’s coalition. Two Socialist finance ministers — Evangelos Venizelos, the current Socialist leader, and George Papaconstantinou, his predecessor — are under fire for failing to act on the list.
Most analysts said they believed the government would hold up for now. But two other rival parties are gaining ground in opinion polls. If the country were to hold new elections today, the leftist Syriza party — which has risen rapidly from virtual obscurity on a platform of repudiating Greece’s bailout but staying in the euro — would place first, followed by Mr. Samaras’s New Democracy Party, the polls suggest.
Since claiming power in June, Mr. Samaras has labored to restore Greece’s credibility with its European partners, particularly with Chancellor Angela Merkel of Germany, who has insisted that Greece remain a part of the euro zone.
“It’s clear that this government is making all the right noises,” said Mujtaba Rahman, Europe analyst at the Eurasia Group. “They’re much more credible, and creditors are happy with the progress they have made.” Nevertheless, he added, even when the next wave of financial aid arrives, “Greece is not at all out of the woods.”
The new austerity measures, which include further cuts to pensions, civil service salaries and social benefits, are expected to reduce gross domestic product by 9 percent, dealing a new blow to an economy entering its sixth year of recession and likely adding to an unemployment rate already exceeding 25 percent. A total of $17 billion in cuts and tax increases will be put into effect in the next two years. But because the Greek economy is shrinking even faster than expected, an additional $4.5 billion in austerity measures will be required between 2015 and 2016 to meet the country’s fiscal targets.
As matters stand, Greece is still staggering under a mountain of debt, which is expected to rise to 189 percent of gross domestic product in 2013, from 175.6 percent now, as interest piles up on all the loans Greece must repay. The deficit next year is expected to swell as well, to 5.2 percent of G.D.P. from a forecast of 4.2 percent.
Other euro zone governments have discussed forgiving some or part of the nearly $68 billion in loans they made to Greece, a step that many economists regard as inevitable if Greece is ever to emerge from its fiscal straitjacket. But it is considered politically unpalatable, especially in Germany, where Ms. Merkel faces an election next year.
Meanwhile, the bulk of new aid — $30 billion — is going directly into Greece’s feeble banks, which must be recapitalized after sustaining severe losses this year when the government halved the value of Greek bonds that the banks had been required to hold.
Mr. Samaras has said the infusion will help the banks revive the economy by lending again to businesses, after tens of thousands of small and medium-size firms collapsed amid a lack of liquidity.
But Constantine Mihalos, president of the Athens Chamber of Commerce, said that was unlikely. “The funds can help improve the health of the banks, but that is not sufficient to provide liquidity even in terms of working capital, which is of essential importance for companies,” he said.
The vote comes amid growing polarization in Greece between the country’s elite, many of whom keep their savings abroad, and ordinary Greeks who feel they are suffering unduly for the country’s political failures. The measures include a proposal to raise the fares on all public transportation and to reduce benefits to families with children.
The retirement age will rise to 67 from 65, and the current pool of 665,000 civil servants will be reduced by 80,000 through 2016. The most disputed measures involve changes to labor laws that would allow private employers to negotiate salaries beyond collective labor agreements; the abolition of a 10 percent salary increase for employees who marry; and a reduction of severance for workers at private firms.
The measures have rankled people like Yiannis Antivasis, 45, a craftsman who makes brass lighting fixtures for a small business in Peristeri, in western Athens, and his wife, Maria Sifaki, 39, who is unemployed and has multiple sclerosis.
Mr. Antivasis has had his salary reduced by 35 percent in the past two years, to $1,150 a month, and will see his income slashed further under the new measures. “We’ve gone back to the Middle Ages,” he said. “They’re demolishing everything.”
The cuts to pensions heralded in the new bill worry the couple, who have relied on some support from their parents in the past. “My father already had his pension cut, and I’m not sure how he’ll cope if they cut it again,” Mr. Antivasis said, adding that his father had asked him for money for the first time this summer.
While austerity has been imposed on the Greek people before, “the difference this time is that people are at their wits’ end,” Mr. Antivasis added. “People are ready to go out on the street with guns.”
Niki Kitsantonis contributed reporting.
11/06/2012 05:14 PM
Eve of Austerity: Strikes Consume Greece Ahead of New Cuts
Thousands of Greeks took to the streets of Athens on Tuesday on the first of two days of strikes to protest yet more biting austerity measures. Their anger is palpable, but if parliament fails to pass the cuts on Wednesday, the consequences could be dire.
Hundreds of thousands of Greeks began a 48-hour nationwide strike on Tuesday, shutting down schools, banks, local government offices and ports to protest the government's latest round of austerity measures.
Transportation in Athens became difficult as subway and taxi services were halted and flights in and out of the country were stopped for three hours early in the day. State hospitals were running on emergency staff.
About 16,000 people gathered at a union-organized protest outside parliament in Athens, where lawmakers on Wednesday will vote on the law, chanting slogans like, "People, don't bow your heads!" and "This strike is only the beginning!" Several thousand more marched in a separate demonstration in Athens, and about 20,000 protested in Greece's second-largest city, Thessaloniki.
In addition to further tax hikes and cuts to pensions, the expected measures will raise the retirement age from 65 to 67 and make it easier to fire or transfer civil servants. Altogether they are aimed at saving the state €13.5 billion ($17.3 billion) and are a key condition of Greece's international creditors to continue to receive emergency bailout funds.
Socialist Defections Threaten Majority
The measures are expected to pass with a slim majority. The three-party governing coalition holds 176 out of 300 seats in parliament, but the smallest partner, the Democratic Left, has said it will vote "no." In addition, a small number of center-left Socialist lawmakers said they will break party ranks and also vote against the measures, leaving the government with 154 votes -- just enough for the necessary absolute majority.
The main opposition Radical Left Coalition called on demonstrators to surround parliament during the vote, saying the austerity measures "will turn the country into a financial and social desert" and "will lead us decades back, without medicine or state health care, without schools and universities, without a future, with endless armies of unemployed, suicides and desperate people."
A rejection of the savings measures would mean that Greece would not have access to its next tranche of bailout credit, worth €31.5 billion. Without those funds, Greece would be unable to pay back its debt, pushing the country into default and potentially forcing it to abandon the euro currency. A return to its previous currency, the drachma, would result in hyper-inflation, decimating any savings held in Greek bank accounts and creating all new problems for the country.
European Council President Herman Van Rompuy said at the end of an Asia-Europe summit in Laos that Greece must continue with its efforts to cut its deficit, particularly through privatization of state assets.
"I call on the Greek government and the ruling parties to make all the necessary decisions in order to reach agreement with the troika," he said, referring to the tripartite group of creditors, the European Commission, the International Monetary Fund and the European Central Bank.
Decision on Bailout Tranche Looms
Athens is hoping for an extension on the troika's prescribed 4.5-percent primary budget surplus -- a figure that excludes debt payments -- which would ease some of the pressure to cut spending. However the government has forecast an even worse economic contraction next year that originally thought, as well as a peak of its total debt burden at 192 percent of gross domestic product in 2014 -- 10 percentage points higher than its previous forecast.
The troika's latest report on Greece's progress in reducing its deficit is due sometime this month. The Eurogroup of euro-zone finance ministers is expected to discuss the next bailout payment to Greece at its next scheduled meeting on Nov. 12, although officials have played down speculation that they will also decide on whether to approve the payment.
"A deal is still likely in November, but not necessarily on Nov. 12," an EU official told Reuters on the sidelines of the G-20 summit in Mexico City on Monday.
November 6, 2012
France Announces Cut in Payroll Taxes for Businesses
By DAVID JOLLY
Responding to calls to make French industry more competitive by reducing labor costs, the Socialist government of President François Hollande said Tuesday that it would cut payroll taxes for businesses. But the government stopped short of adopting the broader changes that an expert panel led by a prominent business executive, Louis Gallois, recommended a day earlier in a report that called for a “competitiveness shock” to the French economy.
Prime Minister Jean-Marc Ayrault, after a meeting of officials to discuss the economy, said in a statement on Tuesday that the government had to act because “France has known 10 years of industrial stagnation.” If the trend were allowed to continue, he added, the country’s decline “would be a certainty.”
The government’s plan to cut payroll taxes by 20 billion euros, or $25.6 billion, over three years is “a cultural shift for the French Socialists,” said Gilles Moëc, an economist at Deutsche Bank in London. “They’ve always looked with suspicion on the idea that there was a labor-cost problem in France.”
To make up for the revenue shortfall, the government plans to raise the main sales tax while also making budget cuts.
The Gallois report notes that France has lost 750,000 industrial jobs over the last decade as the country’s trade balance has deteriorated. Prominent among the report’s criticisms is that the tax burden borne by businesses and their employees — as well as contracts and rules that make it difficult to fire workers — renders French industry uncompetitive.
The centerpiece of the response announced by Mr. Ayrault is a payroll tax cut that will lower the cost of labor for French companies. In theory, that would encourage new investment and reinvigorate exports. The first stages of the tax break will be applied to businesses’ 2013 taxes when they file in 2014.
By 2016, the 20 billion euro tax break would be fully in place and offset by 10 billion euros of yet unspecified spending cuts and at least 3 billion euros in environmentally focused “green taxes,” as well as money from the higher sales tax.
The size of the payroll tax reduction is in line with the recommendation of the government-commissioned report prepared by the panel led by Mr. Gallois, a former chief executive of European Aeronautic Defense and Space. The report offered proposals meant to revive the French economy. But its prospects for success remain to be seen.
The government chose to phase in the reduction over three years, rather than the one or two years Mr. Gallois said was necessary for the full impact. And it rejected his proposal that the share of payroll taxes paid by employees be cut by 10 billion euros.
Mr. Ayrault said the tax credit would work out to a 6 percent reduction in social security charges on workers who make up to 2.5 times the minimum wage, which is now 9.40 euros an hour.
Paying for the measures will require the government to break a vow by Mr. Ayrault in September that there would be no increase in sales taxes during Mr. Hollande’s five-year term.
The decision could prove highly unpopular on the left because sales taxes are among the most regressive levies a state can impose, with the burden falling disproportionately on the poor, who spend a higher portion of their income than the rich do.
The main sales tax, the value-added tax, will rise in January 2014 to 20 percent from 19.6 percent, but the minimum value-added tax, on basic needs like food, will fall to 5 percent from 5.5 percent.
The “intermediate tax,” which covers things like restaurant meals and home renovations, will rise to 10 percent from 7 percent.
Mr. Hollande won the French election in June, and the confidence of many investors, with a promise to bring France’s 2013 budget deficit down to 3 percent — the standard set by the European Union — from about 4.5 percent this year.
But many economists and some of his allies on the left have argued that cutting spending and raising taxes could weaken the economy further at a time when the euro zone is in recession and the global economy is faltering.
The focus on cutting labor costs “is an economic misdiagnosis, it’s a social error,” Jean-Claude Mailly, secretary general of Force Ouvrière, a relatively militant union, told Europe 1 radio on Tuesday. It will lead to “social dumping,” he said, because the Germans will feel obligated to cut their own labor costs. “It will never end,” he added.
France’s welfare state, one of the world’s most generous, is largely financed by payroll taxes. And the so-called social wedge — the reduction in workers’ take-home pay that results from the taxes paid by them and their employers — is among the largest in the world, according to data from the Organization for Economic Cooperation and Development.
Unions and others on the left fear that reductions in financing for the system could lead to pressure for reduction in benefits for workers that include universal health care and solid pensions.
Jörg Krämer, chief economist at Commerzbank in Frankfurt, noted that Germany had gone through its own labor-market restructuring over the last decade. A core element of that program, he said, was a sharp reduction in benefits to the long-term unemployed and a wider availability of temporary work, which put pressure on the unemployed to take any job. The result was a more flexible labor market and more moderate wage demands.
The International Monetary Fund forecast on Monday that the French economy would expand 0.4 percent in 2013, after 0.1 percent this year. Mr. Moëc of Deutsche Bank said the government’s action would probably have little immediate economic effect.
“I don’t want to diminish the symbolic significance of what they’ve announced today,” Mr. Moëc said, “but the impact will probably be less than what the government would like to communicate.” For one thing, he noted, businesses are already facing a tax increase next year, “and this will partially offset that.”
To some extent Mr. Hollande’s government is giving back what it has already taken away. It raised business taxes in July as part of a supplementary budget. The 2013 budget that was introduced in September ended the full deductibility of interest payments, a de facto tax increase.
Mr. Hollande also alienated many of the country’s elite in September by announcing that he would raise the tax rate on all income exceeding $1 million a year to 75 percent from the current 41 percent.
Raising taxes on households to ease the burden on corporations is also tricky for the Socialists because they opposed a similar effort by former President Nicolas Sarkozy.
Speaking Tuesday on TF1 television, Mr. Ayrault denied that the government had gone back on its promises, saying, “The situation is quite serious and I’m looking at it straight on. We’re facing our responsibility.”
The tax cut would have an important impact, he said.
“A company with 20 employees, half of whom are earning the minimum wage, is going to see its taxes cut by about 30,000 a year,” Mr. Ayrault said. That, he added, would encourage the business to invest more and take on more workers.
He estimated that the tax cut would add half a percentage point to economic growth and generate as many as 300,000 or 400,000 jobs by 2017.
11/07/2012 09:14 AM
The Trans-Atlantic Take: Obama Victory to Further Euro-Crisis Clash with Berlin
A Commentary by Tyson Barker
The first administration of US President Barack Obama was heavily critical of Europe's hesitant approach to confronting the euro crisis. Things aren't likely to change in the second term. But there is hope that the White House will pivot back to Europe for a possible trans-Atlantic free trade agreement.
President Barack Obama's re-election, albeit a victory much narrower than in 2008, bodes for political consistency, at least in the near future. Second administrations are often about consolidating policies made during first terms; they prove moderating counterpoints to initial, ideologically charged initiatives. This was true for Ronald Reagan, Bill Clinton and George W. Bush. Obama will be no different.
Consistency will also mark the polarized domestic political climate that Obama will face. The hostility that he has confronted since the Tea Party wave of the 2010 mid-term election will most likely continue unabated. The return of a Republican House of Representatives means that wins at home and abroad will most likely be incremental and based on executive orders, regulations and interpretations of existing legislation, rather than the product of bold, new legislative initiatives.
The recurrent meta-theme of the 2012 Obama campaign has been "balance." In his debates with Governor Mitt Romney, the president spoke of a balanced approach to governance. This will be particularly true of his domestic economic policy, a blend of expenditure and revenue adjustment that he believes necessary for tackling America's fiscal crisis and anemic economic growth. But it will also apply to his international approach, particularly regarding Europe.
President Obama's theme of balance will continue to clash with Chancellor Angela Merkel on euro-zone crisis management. For the Democrats, Europe has pursued a tin-eared draconian policy of cutting deeply in the euro-zone South. The result has been economic pain and political unrest with little prospect of near-term growth. This critique holds that the current institutional set-up within the euro zone robs governments in Greece, Spain and Italy of the policy tools necessary to animate their economies, put vast swaths of unemployed workers back to work, and, consequently, reignite growth. This stance sees the euro-zone crisis as vindication for the Troubled Asset Relief Program (TARP), the 2009 American Reconstruction and Recovery Act and the subsequent banking stress tests, and deep bank oversight. The Obama team views Europe's chronic tumult as a demonstration that government-centered policy, particularly demand- and employment-driven action, is key to preventing a vicious cycle of deteriorating public balance sheets through smaller tax bases, lower economic productivity and increased capital flight.
The Democratic Party platform states that under Obama, the US will "continue to be in frequent contact with our European allies to discuss best practices and share valuable lessons from our own experience reversing our economic downturn, helping them chart the best way forward." Translation: The second Obama administration wants a seat at the table and will side more with an approach that includes employment and demand-driven policies, especially for the young and those in southern euro-zone countries. Germany might expect President Obama to spend some of his political capital in Europe -- heavily rooted in his stratospheric popularity on the Continent -- to make a more public case for deeper, more resolute integration and coordinated fiscal expansion.
Potential Free-Trade Agreement
As a counterpoint to Obama's euro-crisis policy, Berlin will welcome the president's renewed commitment to trans-Atlantic trade and his continued interest in climate change. These will be the carrots of Obama's second term. Long a chancellery priority, a major trans-Atlantic trade agreement was a centerpiece of Merkel's speeches at the World Economic Forum annual meeting in Davos in 2011 and at the Atlantik-Brücke meeting in July 2012. His trade team has been quietly working out the details for a trans-Atlantic free trade agreement and will be interested in pursuing this in earnest in 2013. The wildcard in this action is Congress. Although many Republicans would agree to the merits of a deal that would relax the barriers of commerce between the US and Europe, their desire to prevent Obama from accumulating political "wins" could keep them from authorizing the administration to conduct wide-ranging treaty negotiations.
The Obama team is also committed to pursuing policies to mitigate climate change in a resolute, albeit low-key fashion. This includes regulation and programs such as trade financing and established tax credits that have allowed for state-based industries such as wind-turbine factories in Iowa and smart-grid technology development Virginia.
Certain defense and security policy trends are also likely to continue under a second Obama term. NATO will remain an alliance, but its operations will be constituted more in terms of pragmatic partnerships based on the assets that member-states are able and willing to contribute. The pivot to Asia that began under George W. Bush will continue and perhaps accelerate, as it will become an indelible part of Obama's legacy: the first "Pacific" president. Intervention fatigue is strong in the United States after the protracted conflicts in Iraq and Afghanistan. War weariness transcends both parties despite rhetorical attempts to create distinctions in the campaign, and Obama will remain reticent to commit to overseas military operations. And he will continue the heightened use of drone strikes in Pakistan and Yemen as an anti-terrorism tool. With overwhelming support from the American electorate (62 percent approve), such strikes will likely remain a mainstay of US counterterrorism policy.
Obama will continue his cerebral approach to Europe, drained of the sentimentality that has often been a hallmark of the relationship. But his engagement with the Continent will increase. By necessity, Germany will be his partner of first instance. It is unclear whether it would be his partner of choice.
Tyson Barker is director of trans-Atlantic relations at the Washington, DC-based Bertelsmann Foundation.
Wage gap remains in Sweden despite equality efforts
By Agence France-Presse
Tuesday, November 6, 2012 15:14 EST
The wage gap between men and women persists in Sweden despite efforts to eradicate it in a country that prides itself on promoting gender equality, according to a report released on Tuesday.
“The total income in all age groups is lower for women than for men,” Statistics Sweden (SCB) said in a statement on the release of its annual report on gender equality.
In 2010, the latest year for which data are available, the median income for men aged 20 and above was 35 percent higher than for women, the agency said.
Graphs show a significant gap at the beginning of working life, reaching 37 percent for 20- to 24-year-olds, before gradually narrowing until retirement (26 percent for 40- to 44-year-olds, 24 percent for 60- to 64-year-olds), after which it balloons to 40 percent for 80- to 84-year-olds.
“Women are more educated than men,” SCB said, noting that this means they enter the job market later in life. Women between 20 and 64 years old currently have a 77-percent employment rate, compared to an 83-percent rate for men.
“An important factor for equality between the sexes is the possibility to combine parenting with a job,” the SCB said.
“One way to measure this is to look at the amount of parental leave taken. The men’s share continues to grow, but it’s nevertheless women who take the greater share” with 76 percent in 2011, it said.
That ratio is down from 80 percent in 2005 and 88 percent in 2000.
Sweden’s minister for European affairs, Birgitta Ohlsson, a frequent commentator on feminist issues, welcomed the report. “More parental leave taken by men!” she wrote on social networking site Twitter.
Sweden has one of the most generous parental leave systems in the world, with 480 days that can be claimed by either parent until the child turns eight. However, one parent can only use 420 of those days, with the 60 remaining days being forfeited if they are not used by the other parent.
Another explanation for the difference in income could be that around a third of all Swedish women work part-time, compared to only one in 10 of all men, SCB said.
Spain upholds same sex marriage after challenge
By Agence France-Presse
Tuesday, November 6, 2012 15:27 EST
Spain’s constitutional court upheld Tuesday a 2005 law allowing homosexual marriage and adoption after an appeal, a court official said.
Spain’s ruling conservative Popular Party had appealed the law, passed seven years ago by a Socialist government. Prime Minister Mariano Rajoy said his party objected to use of the word “marriage” in the law.
07 November 2012 - 12H43
France adopts gay marriage plan despite opposition
AFP - France's Socialist government Wednesday adopted a draft bill to authorise gay marriage and adoption despite opposition from the Roman Catholic Church and others.
"This is an important step towards the equality of rights," said Minister of Family Affairs Dominique Bertinnoti.
President Francois Hollande, who had made the issue a key part of his electoral platform, said it was an advance "for all of society".
Bertinnoti rejected criticism that the move would "destroy" the family, saying: "On the contrary it is a legal protection."
Europe and Asia leaders praise Australia PM for sexism speech
By Agence France-Presse
Tuesday, November 6, 2012 20:25 EST
Australian Prime Minister Julia Gillard said Wednesday that world leaders congratulated her at the Asia-Europe Meeting in Laos on her now famous misogyny speech, which went viral on the Internet.
Gillard, the nation’s first woman leader, made an aggressive speech in parliament last month accusing opposition leader Tony Abbott of misogyny and sexism, giving her a significant boost in opinion polls.
The speech was viewed by millions of people on YouTube and prompted a leading dictionary to broaden its definition of the word misogyny.
Gillard said she was pleasantly surprised at the reaction she received at the international summit which ended Tuesday in Vientiane, including from French President Francois Hollande and Danish Prime Minister Helle Thorning-Schmidt.
“The president of France congratulated me on the speech, as did the prime minister of Denmark, and some other leaders, just casually as I’ve moved around, have also mentioned it to me,” Gillard told ABC radio.
“So some approval here from some leaders at the Asia-Europe meeting.”
A fired-up Gillard accused Abbott of hypocrisy in her speech, saying she had been offended by many of his remarks over the years and she would not be “lectured about sexism and misogyny by this man”.
“I’ve had enough, Australian women have had enough. When I see sexism and misogyny I’m going to call them for what they are,” she said.
Elections are due in Australia next year.
November 6, 2012
As Dengue Fever Sweeps India, a Slow Response Stirs Experts’ Fears
By GARDINER HARRIS
NEW DELHI — An epidemic of dengue fever in India is fostering a growing sense of alarm even as government officials here have publicly refused to acknowledge the scope of a problem that experts say is threatening hundreds of millions of people, not just in India but around the world.
India has become the focal point for a mosquito-borne plague that is sweeping the globe. Reported in just a handful of countries in the 1950s, dengue (pronounced DEN-gay) is now endemic in half the world’s nations.
“The global dengue problem is far worse than most people know, and it keeps getting worse,” said Dr. Raman Velayudhan, the World Health Organization’s lead dengue coordinator.
The tropical disease, though life-threatening for a tiny fraction of those infected, can be extremely painful. Growing numbers of Western tourists are returning from warm-weather vacations with the disease, which has reached the shores of the United States and Europe. Last month, health officials in Miami announced a case of locally acquired dengue infection.
Here in India’s capital, where areas of standing water contribute to the epidemic’s growth, hospitals are overrun and feverish patients are sharing beds and languishing in hallways. At Kalawati Saran Hospital, a pediatric facility, a large crowd of relatives lay on mats and blankets under the shade of a huge banyan tree outside the hospital entrance recently.
Among them was Neelam, who said her two grandchildren were deathly ill inside. Eight-year-old Sneha got the disease first, followed by Tanya, 7, she said. The girls’ parents treated them at home but then Sneha’s temperature rose to 104 degrees, a rash spread across her legs and shoulders, and her pain grew unbearable.
“Sneha has been given five liters of blood,” said Neelam, who has one name. “It is terrible.”
Officials say that 30,002 people in India had been sickened with dengue fever through October, a 59 percent jump from the 18,860 recorded for all of 2011. But the real number of Indians who get dengue fever annually is in the millions, several experts said.
“I’d conservatively estimate that there are 37 million dengue infections occurring every year in India, and maybe 227,500 hospitalizations,” said Dr. Scott Halstead, a tropical disease expert focused on dengue research.
A senior Indian government health official, who agreed to speak about the matter only on the condition of anonymity, acknowledged that official figures represent a mere sliver of dengue’s actual toll. The government only counts cases of dengue that come from public hospitals and that have been confirmed by laboratories, the official said. Such a census, “which was deliberated at the highest levels,” is a small subset that is nonetheless informative and comparable from one year to the next, he said.
“There is no denying that the actual number of cases would be much, much higher,” the official said. “Our interest has not been to arrive at an exact figure.”
The problem with that policy, said Dr. Manish Kakkar, a specialist at the Public Health Foundation of India, is that India’s “massive underreporting of cases” has contributed to the disease’s spread. Experts from around the world said that India’s failure to construct an adequate dengue surveillance system has impeded awareness of the illness’s vast reach, discouraged efforts to clean up the sources of the disease and slowed the search for a vaccine.
“When you look at the number of reported cases India has, it’s a joke,” said Dr. Harold S. Margolis, chief of the dengue branch at the Centers for Disease Control and Prevention in Atlanta.
Neighboring Sri Lanka, for instance, reported nearly three times as many dengue cases as India through August, according to the World Health Organization, even though India’s population is 60 times larger.
Part of India’s problem is that some officials view reports of dengue infections as politically damaging. In September, Mamata Banerjee, the chief minister of West Bengal, dismissed reports of an increasing number of dengue-related deaths, saying doctors were misdiagnosing. “So everyone is earning a bad name,” she said at a news conference.
A central piece of evidence for those who contend that India suffers hundreds of times more dengue cases than the government acknowledges is a recent and as yet unpublished study of dengue infections in West Bengal that found about the same presence of dengue as in Thailand, where almost every child is infected by dengue at least once before adulthood.
“I would say that anybody over the age of 20 in India has been infected with dengue,” said Dr. Timothy Endy, chief of infectious disease at Upstate Medical University in Syracuse.
For those who arrive in India as adults, “you have a reasonable expectation of getting dengue after a few months,” said Dr. Joseph M. Vinetz, a professor at the University of California at San Diego. “If you stay for a longer period, it’s a certainty.”
The reason that such an extensive epidemic can hide in plain sight is that as many as 80 percent of dengue infections cause only mild symptoms of fatigue, said Anthony S. Fauci, director of the National Institute of Allergy and Infectious Diseases. For many, the disease is experienced as “maybe just a fever that someone shrugs off.”
But the remaining 20 percent may be affected by more serious flulike symptoms, with high fever, vomiting, searing pain behind the eyes, skin rash, and muscle and joint aches that can be so intense that the illness has been dubbed “breakbone fever.”
The acute part of the illness generally passes within two weeks, but symptoms of fatigue and depression can linger for months. In about 1 percent of cases, dengue advances to a life-threatening cascade of immune responses known as hemorrhagic or shock dengue.
This potentially mortal condition generally happens only after a second dengue infection. There are four strains of the dengue virus, and infection with a second strain can fool the immune system, allowing the virus to replicate. When the body finally realizes its mistake, it floods the system with so many immune attackers that they are poisonous. Such patients must be provided intravenous fluids and round-the-clock care to avoid death.
Twenty years ago, just one of every 50 tourists who returned from the tropics with fever was infected by dengue; now, it is one in six, said Dr. Velayudhan, the W.H.O. official. The Portuguese archipelago of Madeira is in the midst of an epidemic.
On Oct. 9, Puerto Rico’s Health Department declared a dengue epidemic after at least six people died and nearly 5,000 people were sickened.
The great danger of having hundreds of millions of people in India with undiagnosed and unacknowledged primary infections is that a sudden shift in the circulating dengue strain could cause a widespread increase in life-threatening illnesses.
“We have been fortunate so far,” said Dr. Kakkar of the Indian public health group. “But if, God forbid, we come across that situation we probably need far better health-care management and inpatient care facilities.”
Trucks spewing pesticides against mosquitoes are now a regular presence in New Delhi neighborhoods, but rapid and disorderly urbanization — a hallmark of India’s development — increases the risks of dengue proliferation, so few believe the government here can do much to halt its spread.
The best hope for relief is a vaccine, but a recent trial of the most advanced vaccine candidate largely failed.
“I think we’re looking at 10 to 12 years before we see an effective vaccine, and that’s if we’re lucky,” Dr. Halstead said. “In the meantime, we’re in trouble.”
Hari Kumar contributed reporting.