The US on a fiscal cliff
The US on a fiscal cliff
If a deal between the executive branch of the government led by the elected president and the Congress is not reached before the end of the year, the government will face a shutdown as happened before during the first Clinton term.
The New York Times, in a lengthy editorial, endorsed President Barack Obama. It expressed confidence that he will challenge the Republicans on the fiscal cliff even if that means calling their bluff.
However, it expressed hope that a more compromising Congress will emerge after elections, willing to work for policies that the American public needs.
Days before the elections and almost two months before the country faces up to the fiscal cliff, the National Association of Manufacturers (NAM) in the US said that the ongoing recession has wiped out one million jobs this year alone, and that the economic depression will deepen if the Congress fails to act quickly and on time.
If that is to happen, another six million jobs will be lost in 2014, which will be sending unemployment to double-digit at an estimated 12 percent rate as a result of continuous layoffs, jobs becoming vacant and lack of investments that is expected to plateau at $ 60 billion.
The NAM report, seen as relatively independent and honest in reflecting the realities of the market and not affected by the ongoing election atmosphere, went a step further to call on politicians to stop blaming each other and show some care in facing up to problems that need concerted efforts and time to make the necessary turn around takes hold.
The fiscal cliff talked about is regarded as the toughest the country faces in four decades.
If not handled well, it will push the country back into a recession and the non-partisan Congressional Budget Office (CBO) predicts that such recession would be significant, though brief, but given the fact that the USFederal Reserve will be out of option to run a monetary policy since it has exhausted its use of interest rates cut, there is a growing possibility of a deep recession and worsening employment situation.
This is a great age of uncertainty. Accordingly, already the US GDP has lost 0.5 percent because of the uncertainty associated with the incessant talk about the upcoming fiscal cliff and the lack of political will and concentration on how to handle the issue.
One example is the issue over the national debt that has already exceeded $ 16 trillion. There are questions how to harness it and forge a way out. Here comes the difference between the two approaches of the democrats led by Obama, who prefers to allow Bush tax cuts on income of more than $ 250,000 a year to expire immediately, while the republicans led by Mitt Romney want to extend the tax cuts for another year and give the Congress the time it needs to come up with a thorough plan to reform the economy in a more drastic and detailed way.
Sensing the upcoming threat of the fiscal cliff, some 80 high profile executives expressed their willingness and readiness to accept more taxes in return for a sizable government spending cuts starting with the military, where the Pentagon is believed to be open to cut reaching as high as $ 400 billion proposed by Obama.
Though Romney tried during his debate with Obama to sound a less war monger and agree more or less to the line adopted by the current democratic administration as far as foreign policy is concerned, which involves less military involvement with the outside, yet the bottom line is how the US can live within its means, be able to generate more income and sharpen its educational, research and managerial expertise to compete well in a more globalized economy.
The national debt issue summarizes this situation. If it were not for America’s political and military clout, such debt would have been in the hands of the International Monetary Fund (IMF) to look for solutions, just like any developing country. Britain has been through this bitter medicine in the 1970s when the then labor government was forced to knock on the doors of the IMF.
IMF Managing Director Christine Lagarde, using the same term of the fiscal cliff, has already warned Washington that it does not have much of a time left after the presidential elections to face up to harsh economic realities that need one thing — tough decisions.
It is no longer business as usual, and no honeymoon in the offing for whoever is going to occupy the Oval Office.
Taxi drivers, Uber square up on Istanbul’s roads
- Uber has enjoyed soaring popularity in Istanbul, where users appreciate the cashless payment system, security and convenience of hailing a cab by phone
- This has stoked antagonism with official taxi drivers, who have brought legal cases in Istanbul in a bid to have the app blocked in Turkey
ISTANBUL: Istanbul’s bright yellow taxis, ubiquitous and perennially honking for custom, appear ingrained in the daily life of the Turkish metropolis.
But could the fast-growing ride sharing app Uber make them a thing of the past?
Uber has enjoyed soaring popularity in Istanbul, where users appreciate the cashless payment system, security and convenience of hailing a cab by phone.
But, as in several other European cities, this has stoked antagonism with official taxi drivers, who have brought legal cases in Istanbul in a bid to have the app blocked in Turkey.
Tensions have also spilt over into violence, with Uber drivers complaining of being verbally harassed, beaten up or even shot at.
Kemal Kuru, an Uber driver since last year, said he was cornered and beaten by a group as he set off for a concert hall in the Sisli district last month on a job.
“I went to pick up a customer around midnight but someone blocked the road and harassed me verbally,” he told AFP.
“I got out of the car and all of a sudden 10 people attacked me... My teeth were broken and my lip was split.”
Kuru said the assailants could not be immediately identified as they fled into the darkness. But he pointed the finger at taxi drivers.
“I believe our income is getting on their nerves and they think we are stealing their customers.”
In March, shots were fired at an Uber vehicle in Istanbul’s Kucukcekmece district. The driver escaped unhurt.
Uber drivers say they are easily targeted as the vans they generally drive are unusual in the city.
But representatives of official taxi companies condemn such accusations — widely publicized in the Turkish media — as a stunt to discredit their business.
Eyup Aksu, head of the main taxi drivers’ association in Istanbul, accused Uber of launching a “publicity campaign” in an attempt to influence the pending legal cases.
“Taxi drivers have never resorted to violence against Uber. This is a smear campaign to blacken the reputation of taxis,” he told AFP in his Istanbul office.
There are almost 17,400 official yellow taxis in Istanbul, providing an essential and relatively affordable service in a gigantic city where public transport often falls short.
But as new competitors like Uber have emerged, the official taxis have often failed to keep pace with changing times and society.
They have been slow to implement systems to pay by card, install panic buttons that help female passengers in particular feel more secure and are only now considering lights to indicate if the cab is occupied or free.
In a bid to trump Uber, Istanbul taxis are themselves now becoming part of a digital network called iTaksi that allows passengers to order them from their phone.
Aksu admitted some deficiencies in the taxi sector but said taxis were transforming to catch up with Uber’s standards.
“We are shifting to luxurious taxi transport. We now have VIP transport in some touristic places and airports,” he said.
Meanwhile horror taxi stories abound in Istanbul — not just from incredulous tourists but also exasperated locals — about being over-charged, driven a circuitous route to ramp up the meter or being given fake change.
In a well publicized case, an Istanbul court this month handed a taxi driver a suspended jail term for having taken a Saudi passenger on an epic city tour rather than to the airport as requested.
But Istanbul taxi drivers insist they are working hard to make an honest living from a tough business where margins were already tight and now squeezed further by Uber’s presence.
Taxi drivers rent their car from the owner of the license, whose cost of 1.5 million lira (300,000 euros, $370,000) is well beyond most drivers.
The number of license plates available for taxis has stayed stable as the city’s population boomed, driving up their price.
Taxi driver Burhan Yuksek, looking for passengers in the busy waterside Eminonu district, said his business is suffering “hugely” because of Uber.
“I work by a hotel. We used to receive 40-50 calls daily from the hotel and currently it has dropped to 15-20,” he said. “They are pirates. They are stealing our labor and bread.”
Taxi drivers feel they have political backing, with President Recep Tayyip Erdogan regularly pictured drinking tea with the taxi community.
In the bigger of two legal actions brought by taxi drivers’ associations against Uber, an Istanbul court is due to resume hearing the case on June 4.
The tension in Turkey is one of a number of headaches for Uber and its new chief executive Dara Khosrowshahi, who took over last August after founder Travis Kalanick was ousted following a series of scandals.
In London where its drivers number around 40,000, Uber lost its license over its approach to reporting serious criminal offenses and its criminal record checks for drivers.
But it is allowed to operate in the British capital pending an appeal set for later this year.
Uber also put a temporary halt to its self-driving car program in the United States after an accident involving one of its cars near Phoenix killed a pedestrian.
In service for three years in Turkey, Uber has 5,000 vehicles and 8,000 drivers in Istanbul.
Vedat Kaya, of the Tourism and Development Platform, said Uber represented a “revolt against the taxi monopoly,” adding that some 4,500 taxi drivers had already switched to work with Uber.
Former taxi driver Yavuz Sarac, who joined Uber last summer, says he did it after realizing he would not own his own business “no matter if I work for 150 years.”
“Uber has presented new opportunities. I’ve owned my business,” he said, complaining that taxi drivers were exploited by the plate owners, while the Uber license was much less costly.
“I earn a living for my family. To me, it is a kind of escape from slavery to freedom.”