News
How the UK’s Economy Became So Stagnant
(CTN News) –“Our economy has truly turned a corner,” Rishi Sunak, Britain’s prime minister, said last week as he introduced his party’s election manifesto. Recent data show that Britain’s economy exited a recession more strongly than expected at the beginning of the year, and inflation has slowed significantly.
Justifying the confidence, statistics released on Wednesday revealed that consumer prices increased by 2% in May from the previous year, reaching the Bank of England’s objective for the first time since 2021. That was also down significantly from 11.1 percent in October 2022, when Mr. Sunak began his leadership.
Many economists believe it will take more than a few positive economic indicators to change Britain’s economic trajectory after more than a decade of slow economic growth, chronically low productivity, high taxes, and struggling public services, including a significantly underfunded and overburdened National Health Service.
Polls indicate a desire to remove the Conservative Party from Downing Street after 14 years, in the upcoming general election. However, parliamentarians from the opposition Labour Party have already warned that if they win, they will inherit a weakened economy with little room for major reforms.
How did Britain arrive here?
A concentration on austerity.
When the Conservative Party took power in 2010, the country was reeling from the Great Financial Crisis. Debt had risen, and the country’s budget deficit was at a peacetime high.
David Cameron, the then-prime minister, and his chancellor, George Osborne, prioritized cutting government spending over raising taxes. Years of austerity followed, with massive budget cuts imposed on government departments.
Spending on services such as courts, libraries, and mass transit was reduced, as were investment budgets. Maintenance and development of schools, hospitals, and prisons were postponed or halted. Benefits for the unemployed and low-income workers were significantly reduced.
Britain “had quite a severe program of austerity,” according to Anna Valero, an economist at the London School of Economics. It was perhaps too deep, “hampering the recovery, hampering the extent to which our economy could invest,” she noted.
For many economists, the last 14 years have been defined by Britain’s lackluster productivity growth. Economic output per hour worked has been relatively constant. It is the primary determinant of living standards. Wages rise as productivity improves. After accounting for inflation, wages in Britain are nearly the same as they were at the end of 2007.
“We have to recognize that this is a pretty deep hole that the economy’s gotten into,” said Diane Coyle, a professor of public policy at Cambridge. “Many countries see reduced productivity growth. “We have none.”
According to the Resolution Foundation, a research organization, the average worker has lost 10,700 pounds (approximately $13,600) per year as a result of missed pay growth during the previous decade and a half.
The think tank concluded that middle-income Britons are 20% poorer than their counterparts in Germany and 9% poorer than those in France.
The long-term implications of Brexit
Though the economic impact of Britain’s exit from the European Union is still being felt, some of the costs of that decision are clearly visible. Following the vote, years of policy uncertainty under Theresa May’s government halted industry investment.
The new agreement with the European Union created trade obstacles, making labor tougher and more expensive for everyone, from Scottish fishermen to London financiers.
Brexit kept the British government from investing in infrastructure, innovation, and skills for a long time, according to Ms. Valero. “If everyone is concerned with how to actually do Brexit, how to make it work and all the political fallout of it, of course, people have less attention to focus on these long-term issues,” she stated.
Low investment and public budget cuts have led many to believe Britain is broken.
Despite the highest tax burden in 70 years, many public services look to be on the verge of collapse. More than seven million cases are on the waiting list for the National Health Service, social care is badly underfunded and understaffed, and spending per student is unchanged from 14 years ago.
Despite low unemployment, the number of people out of work due to long-term illness has increased significantly.
The list of obstacles is extensive and diverse: Court backlogs result in lengthy wait times for criminal cases. There isn’t enough affordable housing, and rents are at an all-time high.
Housing construction, as well as renewable energy infrastructure, data centers, and labs, are hindered by complex regulations and municipal authorities.
The number of people using food banks has increased in the last five years. Strikes, understaffing, and poor maintenance have hampered public transportation, and there are numerous concerns about potholes all around the country.
The Liz Truss experiment.
The turbulence was most blatantly evident in the 49-day premiership of Liz Truss, who set out to overhaul Britain’s economic policies, only to have investors balk at her ideas, forcing her to backtrack and eventually resign.
Ms. Truss had the right diagnosis — faster long-term economic development — but the wrong solution to Britain’s problem. She wanted to rebuild the economy by cutting taxes and borrowing extensively, after large amounts of expenditure to help households cope with the economic shocks of the pandemic and energy crisis caused by Russia’s invasion of Ukraine.
She ruined the Conservative Party’s image for sound fiscal management. Since then, policy from both main political parties has emphasized caution.
Both parties have committed not to raise Britain’s three major tax rates: personal income taxes, National Insurance, and VAT (a sort of sales tax). However, many people will still face higher taxes when their salaries rise, propelling them into higher tax rates that will remain stagnant for several years.
What happens next?
Many economists believe tax pledges will be difficult to keep. There is enormous pressure to spend more on public services, particularly to satisfy obligations to raise military spending and repair the National Health Service, while other government departments, such as the judiciary, cannot take more cuts. If spending cannot be lowered further, taxes must be raised to meet debt reduction goals.
However, the difficult predicament that Britain’s next leaders will face could be alleviated if economic development sustains improvement. So far, Britain’s economic growth has benefited from a population increase, owing primarily to migration. The economy remains the same size per person as it was in the previous election in 2019.
“If we’re actually thinking about sustainably growing, it comes down to productivity growth,” said Ms. Valero. That would also result in greater incomes and better living standards, necessitating increased investment in infrastructure, education, and innovation, as well as a planning system that enabled such investment, she said.
Meanwhile, voters will select which political party’s growth strategy they prefer on July 4.
Source: NYTimes
News
Google’s Search Dominance Is Unwinding, But Still Accounting 48% Search Revenue
Google is so closely associated with its key product that its name is a verb that signifies “search.” However, Google’s dominance in that sector is dwindling.
According to eMarketer, Google will lose control of the US search industry for the first time in decades next year.
Google will remain the dominant search player, accounting for 48% of American search advertising revenue. And, remarkably, Google is still increasing its sales in the field, despite being the dominating player in search since the early days of the George W. Bush administration. However, Amazon is growing at a quicker rate.
Google’s Search Dominance Is Unwinding
Amazon will hold over a quarter of US search ad dollars next year, rising to 27% by 2026, while Google will fall even more, according to eMarketer.
The Wall Street Journal was first to report on the forecast.
Lest you think you’ll have to switch to Bing or Yahoo, this isn’t the end of Google or anything really near.
Google is the fourth-most valued public firm in the world. Its market worth is $2.1 trillion, trailing just Apple, Microsoft, and the AI chip darling Nvidia. It also maintains its dominance in other industries, such as display advertisements, where it dominates alongside Facebook’s parent firm Meta, and video ads on YouTube.
To put those “other” firms in context, each is worth more than Delta Air Lines’ total market value. So, yeah, Google is not going anywhere.
Nonetheless, Google faces numerous dangers to its operations, particularly from antitrust regulators.
On Monday, a federal judge in San Francisco ruled that Google must open up its Google Play Store to competitors, dealing a significant blow to the firm in its long-running battle with Fortnite creator Epic Games. Google announced that it would appeal the verdict.
In August, a federal judge ruled that Google has an illegal monopoly on search. That verdict could lead to the dissolution of the company’s search operation. Another antitrust lawsuit filed last month accuses Google of abusing its dominance in the online advertising business.
Meanwhile, European regulators have compelled Google to follow tough new standards, which have resulted in multiple $1 billion-plus fines.
Pixa Bay
Google’s Search Dominance Is Unwinding
On top of that, the marketplace is becoming more difficult on its own.
TikTok, the fastest-growing social network, is expanding into the search market. And Amazon has accomplished something few other digital titans have done to date: it has established a habit.
When you want to buy anything, you usually go to Amazon, not Google. Amazon then buys adverts to push companies’ products to the top of your search results, increasing sales and earning Amazon a greater portion of the revenue. According to eMarketer, it is expected to generate $27.8 billion in search revenue in the United States next year, trailing only Google’s $62.9 billion total.
And then there’s AI, the technology that (supposedly) will change everything.
Why search in stilted language for “kendall jenner why bad bunny breakup” or “police moving violation driver rights no stop sign” when you can just ask OpenAI’s ChatGPT, “What’s going on with Kendall Jenner and Bad Bunny?” in “I need help fighting a moving violation involving a stop sign that wasn’t visible.” Google is working on exactly this technology with its Gemini product, but its success is far from guaranteed, especially with Apple collaborating with OpenAI and other businesses rapidly joining the market.
A Google spokeswoman referred to a blog post from last week in which the company unveiled ads in its AI overviews (the AI-generated text that appears at the top of search results). It’s Google’s way of expressing its ability to profit on a changing marketplace while retaining its business, even as its consumers steadily transition to ask-and-answer AI and away from search.
Google has long used a single catchphrase to defend itself against opponents who claim it is a monopoly abusing its power: competition is only a click away. Until recently, that seemed comically obtuse. Really? We are going to switch to Bing? Or Duck Duck Go? Give me a break.
But today, it feels more like reality.
Google is in no danger of disappearing. However, every highly dominating company faces some type of reckoning over time. GE, a Dow mainstay for more than a century, was broken up last year and is now a shell of its previous dominance. Sears declared bankruptcy in 2022 and is virtually out of business. US Steel, long the foundation of American manufacturing, is attempting to sell itself to a Japanese corporation.
SOURCE | CNN
News
2024 | Supreme Court Won’t Hear Appeal From Elon Musk’s X Platform Over Warrant In Trump Case
Washington — Trump Media, The Supreme Court announced Monday that it will not hear an appeal from social media platform X about a search warrant acquired by prosecutors in the election meddling case against former President Donald Trump.
The justices did not explain their rationale, and there were no recorded dissents.
The firm, which was known as Twitter before being purchased by billionaire Elon Musk, claims a nondisclosure order that prevented it from informing Trump about the warrant obtained by special counsel Jack Smith’s team violated its First Amendment rights.
The business also claims Trump should have had an opportunity to exercise executive privilege. If not reined in, the government may employ similar tactics to intercept additional privileged communications, their lawyers contended.
Supreme Court Won’t Hear Appeal From Elon Musk’s X Platform Over Warrant In Trump Case
Two neutral electronic privacy groups also joined in, urging the high court to hear the case on First Amendment grounds.
Prosecutors, however, claim that the corporation never shown that Trump utilized the account for official purposes, therefore executive privilege is not a problem. A lower court also determined that informing Trump could have compromised the current probe.
Trump utilized his Twitter account in the weeks preceding up to his supporters’ attack on the Capitol on January 6, 2021, to spread false assertions about the election, which prosecutors claim were intended to create doubt in the democratic process.
The indictment describes how Trump used his Twitter account to encourage his followers to travel to Washington on Jan. 6, pressuring Vice President Mike Pence to reject the certification, and falsely claiming that the Capitol crowd, which battered police officers and destroyed glass, was peaceful.
Supreme Court Won’t Hear Appeal From Elon Musk’s X Platform Over Warrant In Trump Case
That case is now moving forward following the Supreme Court’s verdict in July, which granted Trump full immunity from criminal prosecution as a former president.
The warrant arrived at Twitter amid quick changes implemented by Musk, who bought the company in 2022 and has since cut off most of its workforce, including those dedicated to combating disinformation and hate speech.
SOURCE | AP
News
The Supreme Court Turns Down Biden’s Government Appeal in a Texas Emergency Abortion Matter.
(VOR News) – A ruling that prohibits emergency abortions that contravene the Supreme Court law in the state of Texas, which has one of the most stringent abortion restrictions in the country, has been upheld by the Supreme Court of the United States. The United States Supreme Court upheld this decision.
The justices did not provide any specifics regarding the underlying reasons for their decision to uphold an order from a lower court that declared hospitals cannot be legally obligated to administer abortions if doing so would violate the law in the state of Texas.
Institutions are not required to perform abortions, as stipulated in the decree. The common populace did not investigate any opposing viewpoints. The decision was made just weeks before a presidential election that brought abortion to the forefront of the political agenda.
This decision follows the 2022 Supreme Court ruling that ended abortion nationwide.
In response to a request from the administration of Vice President Joe Biden to overturn the lower court’s decision, the justices expressed their disapproval.
The government contends that hospitals are obligated to perform abortions in compliance with federal legislation when the health or life of an expectant patient is in an exceedingly precarious condition.
This is the case in regions where the procedure is prohibited. The difficulty hospitals in Texas and other states are experiencing in determining whether or not routine care could be in violation of stringent state laws that prohibit abortion has resulted in an increase in the number of complaints concerning pregnant women who are experiencing medical distress being turned away from emergency rooms.
The administration cited the Supreme Court’s ruling in a case that bore a striking resemblance to the one that was presented to it in Idaho at the beginning of the year. The justices took a limited decision in that case to allow the continuation of emergency abortions without interruption while a lawsuit was still being heard.
In contrast, Texas has been a vocal proponent of the injunction’s continued enforcement. Texas has argued that its circumstances are distinct from those of Idaho, as the state does have an exemption for situations that pose a significant hazard to the health of an expectant patient.
According to the state, the discrepancy is the result of this exemption. The state of Idaho had a provision that safeguarded a woman’s life when the issue was first broached; however, it did not include protection for her health.
Certified medical practitioners are not obligated to wait until a woman’s life is in imminent peril before they are legally permitted to perform an abortion, as determined by the state supreme court.
The state of Texas highlighted this to the Supreme Court.
Nevertheless, medical professionals have criticized the Texas statute as being perilously ambiguous, and a medical board has declined to provide a list of all the disorders that are eligible for an exception. Furthermore, the statute has been criticized for its hazardous ambiguity.
For an extended period, termination of pregnancies has been a standard procedure in medical treatment for individuals who have been experiencing significant issues. It is implemented in this manner to prevent catastrophic outcomes, such as sepsis, organ failure, and other severe scenarios.
Nevertheless, medical professionals and hospitals in Texas and other states with strict abortion laws have noted that it is uncertain whether or not these terminations could be in violation of abortion prohibitions that include the possibility of a prison sentence. This is the case in regions where abortion prohibitions are exceedingly restrictive.
Following the Supreme Court’s decision to overturn Roe v. Wade, which resulted in restrictions on the rights of women to have abortions in several Republican-ruled states, the Texas case was revisited in 2022.
As per the orders that were disclosed by the administration of Vice President Joe Biden, hospitals are still required to provide abortions in cases that are classified as dire emergency.
As stipulated in a piece of health care legislation, the majority of hospitals are obligated to provide medical assistance to patients who are experiencing medical distress. This is in accordance with the law.
The state of Texas maintained that hospitals should not be obligated to provide abortions throughout the litigation, as doing so would violate the state’s constitutional prohibition on abortions. In its January judgment, the 5th United States Circuit Court of Appeals concurred with the state and acknowledged that the administration had exceeded its authority.
SOURCE: AP
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