By Fareed Zakaria
America’s middle class left behind?
The split between corporate profits and middle-class living standards – call it America's ‘wedge economics’ – had its roots in the late 1970s, with Democrats in control of Congress and the White House, argues Hendrick Smith in the LA Times.
“For the previous 30 years, from 1945 through the 1970s, middle class Americans shared in the nation's growing prosperity. Based on Labor Department reports, economists tell us the productivity of the U.S. workforce rose 97 percent from 1945 to 1973, and the income of the average family rose 95 percent. In short, average workers reaped the benefits of rising U.S. efficiency along with their bosses.
“But since 1973, the picture has changed: Productivity has risen 80 percent, economists report, but the average family's income has risen only 10 percent, and that bump has come primarily because more women have entered the workforce, not because wages have gone up. According to the Census Bureau, the typical male worker made the same hourly pay and benefits in 2011 as in 1978, adjusted for inflation. Three decades of going nowhere.”
“Concerns about the Indian economy are shared by many elsewhere in Asia and beyond,” writes Frederic Grare in the Indian Express. “Nations that see India as a potential strategic partner, such as Australia, Japan, Singapore, Indonesia, Vietnam and some European countries, have integrated India into their long-term strategic calculations. An India incapable of living up to its economic potential will also be less likely to fulfill the strategic role that many, in the region and beyond, expect it to play. India's own perception of its regional role may differ from the expectations of its partners, but it will see its own position adversely affected if those partners lose confidence in its capacity to achieve its potential.”
“For two years, the U.S. State Department and the Pentagon have been incubating a plan to win the Afghan war without actually defeating the Taliban on the battleground,” writes Steve LeVine in Quartz. “The idea is to triumph commercially by building a “New Silk Road” – a transportation-and-energy route to the West whose long-term financial dividends would prompt combatants to set aside their arms and get rich instead.
“Now China is stepping up an apparent effort to outpace the U.S. plan to reconstruct the ancient trade route.”
Unfortunately for Putin, Moscow has limited capacity to make its Asia pivot dreams a reality, argue Fiona Hill and Bobo Lo in Foreign Affairs. “Hosting the APEC summit was more an Olympic moment than a paradigm shift. In spite of the recent flurry of activity, Asia remains a sideshow in Russian foreign and security policy. For all its posturing about turning Russia into a hub of intra-Asian trade and cooperation, Moscow’s strategic focus is still stuck on the West - its population is mostly in the West, its economic ties are mostly to the West, and its official military doctrine remains fixated on the United States and NATO. That will remain true for the foreseeable future. Old patterns are hard to break, and even the most promising of the new efforts are proving difficult to sustain.”
“The more Asia adds to its holdings of U.S. debt, the harder they become to unload. If traders got even the slightest whiff that China was selling large blocks of its $1.3 trillion in dollar holdings, markets would quake,” suggests William Pesek for Bloomberg. “The same goes for Japan’s $1.1 trillion stockpile. So central banks just keep adding to them. Pyramid scheme, anyone?”