Poverty is a complex issue with no easy solution. The debate over how to combat poverty has been ongoing for decades, but the recent report on the subject offers new insight into the effectiveness of government stimulus projects.
The economics current event articles is a report on poverty. It invites debate over the effectiveness of government stimulus.
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In May, a Quitman County Sheriff’s Department deputy distributed food boxes at a Marks, Miss., relief center. Credit: Rory Doyle/Reuters
The efficacy of government stimulus in reaction to the two most recent economic crises, the 2009 financial crisis and the 2020 coronavirus pandemic, has been compared in a study published on Tuesday that looked at poverty in the United States.
Despite the epidemic, the number of people living in poverty in the United States dropped to a new low last year, a result praised by economists and politicians from both parties as proof that the emergency stimulus package succeeded.
The statistics, according to Robert Reich, a Berkeley economics professor who served as Secretary of Labor under President Clinton, showed that government assistance was successful in combating poverty. The recent stimulus, according to Douglas Holtz-Eakin, the director of the conservative American Action Forum and a former advisor to Senator John McCain, was “the greatest policy response to a recession the United States has ever seen,” according to the DealBook newsletter.
There is, nevertheless, space for interpretation. According to the study, a measure of poverty that takes into account the effect of government programs dropped to 9.1% of the population last year, down from 11.8 percent in 2019. However, the official rate, which was established in 1963 by Mollie Orshansky, a Polish immigrant and Social Security administrator, is based almost exclusively on the cost of food and excludes several important assistance programs, increased to 11.4 percent last year. (There was even a storyline in “The West Wing” about the disparity between poverty measurements.)
Was the pandemic reaction the “best” in terms of emergency response? One advantage it seems to have is a favorable contrast to the government’s actions during the financial crisis of 2009.
Even though the economy started expanding again within a few months of its approval and it certainly helped fend off an even worse slump, President Obama’s 2009 economic assistance package has long been seen as a failure, as David Leonhardt of The Morning newspaper recently noted. According to the liberal-leaning Center on Budget and Policy Priorities, government subsidies and tax reforms pulled 53 million Americans out of poverty last year, more in absolute and relative terms than in 2009.
Take a look at the opposite side of the ledger, however. The government spent $810 billion on stimulus in 2009. The increase in government assistance was $1.8 trillion last year. This equates to approximately $35,000 per individual pulled out of poverty, compared to $20,000 in 2009, but not all of the money in either package went to lower-income Americans.
The argument over cost and efficiency will affect whether the government should spend billions more to finance more permanent government assistance programs, as President Biden and many Democrats now desire. Many Republicans, for example, may refer to statistics indicating an apparent decrease in the benefit per dollar spent as a reason to be wary.
However, Arloc Sherman of the Center for Budget and Policy Priorities, an economist, believes that spending now will save money afterwards.
He stated, “I wouldn’t argue the 2020 stimulus was a less effective stimulus.” “However, it might have been more efficient and successful in the first place if we had a thorough and well-designed security system.”
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Last Monday, Elizabeth Holmes, the founder of Theranos, stood outside the federal courtroom in San Jose, California, with her husband, Billy Evans. Credit… Mike The New York Times’ Kai Chen
SAN JOSE (California) — On Tuesday, a major whistle-blower against Theranos, the blood-testing start-up that went bankrupt in 2018 after a scandal, testified in Elizabeth Holmes’ fraud trial.
Erika Cheung, the whistle-blower, worked as a lab assistant at Theranos for six months in 2013 and 2014 before informing federal investigators at the Centers for Medicare & Medicaid Services about the company’s lab testing issues in 2015. Her first day of evidence confirmed what many who had been following the Theranos story already suspected: the company’s lauded blood testing technology did not function.
On Wednesday, her testimony is likely to resume.
Ms. Cheung said in front of a packed jury that she had turned down other job offers after graduation to join Theranos because she was captivated by Ms. Holmes’ charm and impressed by her success as a woman in technology. Ms. Holmes said that Theranos’ Edison devices would be able to determine if individuals had a range of health problems rapidly and inexpensively with only a few drops of blood.
Ms. Cheung stated of Ms. Holmes, “She was extremely eloquent and had a great sense of passion about her purpose.”
The Elizabeth Holmes Trial’s Who’s Who
Erin Woo is a reporter based in San Jose, California.
The Elizabeth Holmes Trial’s Who’s Who
Erin Woo is a reporter based in San Jose, California.
The New York Times’ Carlos Chavarria
Elizabeth Holmes, the discredited founder of the blood-testing company Theranos, is charged with two charges of wire fraud conspiracy and ten counts of wire fraud.
Here are some of the case’s main players:
The Elizabeth Holmes Trial’s Who’s Who
Erin Woo is a reporter based in San Jose, California.
Reuters/Stephen Lam
As a 19-year-old Stanford dropout, Holmes started Theranos in 2003. She became the world’s youngest millionaire after raising $700 million from investors, but she has been accused of lying about how effectively Theranos’ technology performed. She has entered a not guilty plea.
The Elizabeth Holmes Trial’s Who’s Who
Erin Woo is a reporter based in San Jose, California.
courtesy of Getty Images/Justin Sullivan
Sunny, Ramesh Balwani, was the president and chief operational officer of Theranos from 2009 to 2016, and he had a love connection with Holmes. He’s also been charged with fraud and may go on trial next year. He has entered a not guilty plea.
The Elizabeth Holmes Trial’s Who’s Who
Erin Woo is a reporter based in San Jose, California.
The New York Times’ Jefferson Siegel
David Boies, a well-known attorney, was Theranos’ lawyer and sat on its board of directors.
He attempted to silence critics of the company’s business methods, including whistleblowers and media.
The Elizabeth Holmes Trial’s Who’s Who
Erin Woo is a reporter based in San Jose, California.
Getty Images
Journalist John Carreyrou exposed Theranos’ deceptive activities in his articles.
His reporting for The Wall Street Journal contributed to Theranos’ demise.
The Elizabeth Holmes Trial’s Who’s Who
Erin Woo is a reporter based in San Jose, California.
Getty Images/Jeff Kravitz/FilmMagic
Former Theranos workers Tyler Shultz and Erika Cheung were whistle-blowers. In 2013 and 2014, they worked at the start-up.
Shultz is the grandson of former Secretary of State George Shultz, who served on the Theranos board of directors.
The Elizabeth Holmes Trial’s Who’s Who
Erin Woo is a reporter based in San Jose, California.
The New York Times’ Eric Thayer
James Mattis, a former four-star general, was on Theranos’ board of directors.
He then became Secretary of Defense under President Donald J. Trump.
The Elizabeth Holmes Trial’s Who’s Who
Erin Woo is a reporter based in San Jose, California.
The lawsuit will be overseen by Edward Davila, a federal judge in the Northern District of California.
Holmes’ main lawyer is Kevin Downey, a partner at the Washington law firm Williams & Connolly.
The government’s prosecution will be led by Robert Leach, an assistant US attorney for the Northern District of California, and other prosecutors from the US attorney’s office.
More about Elizabeth Holmes may be found here:
30th of August, 2021
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Ms. Cheung’s enthusiasm, however, waned when she saw activities at Theranos’ lab that she didn’t agree with, she said. Outlier blood test results were removed in certain instances to guarantee that Theranos’ technology passed quality control testing. Ms. Cheung was particularly concerned when she gave her own blood to Theranos and learned that testing on the company’s equipment said she had a vitamin D deficiency, despite the fact that conventional tests revealed she did not, she testified.
Despite Ms. Holmes’ claims about the Edison machines, Ms. Cheung said they could only process a few of the tests listed on a menu of approximately 90 blood tests provided by Theranos. She said that the remainder had to be done with conventional blood analyzers or submitted to a diagnostic firm.
Ms. Cheung eventually left due to her reservations about Theranos’ testing services.
“I was apprehensive about handling patient samples,” she said. “I didn’t believe the technology we were employing was up to the task of participating in that behavior.”
Ms. Holmes’ attorneys objected to a number of emails and other internal communications presented by the prosecution as evidence during Ms. Cheung’s testimony. The two parties argued over the standards of evidence and the significance of Ms. Cheung’s testimony.
Ms. Holmes’ lawyer, Lance Wade, said, “The CEO is not accountable for every communication that occurs inside a business.”
Prosecutor and assistant US attorney John Bostic claimed that papers revealing Theranos’ internal problems were important to the prosecution regardless of whether Ms. Holmes’ name was on them.
Mr. Wade argued that Ms. Cheung was a new employee who had little contact with Ms. Holmes.
“To our knowledge, the interview you just listened to was the longest discussion she’s ever had with our client,” he added.
Ms. Holmes sat calmly in a gray blazer and black dress, her face hidden beneath a surgical mask, observing the proceedings.
Ms. Cheung’s letter to the Centers for Medicare & Medicaid Services in 2015 detailing issues with Theranos’ testing prompted a surprise investigation by the agency, which led to the company’s closure. Another young employee at Theranos’ lab, Tyler Shultz, revealed information about the lab’s issues to The Wall Street Journal, which has published exposés on the business. Mr. Shultz has also been named as a possible witness in the case. (His name was misspelled as Schultz in an early version of this story.)
Ms. Cheung has become a champion for technological ethics since her involvement in Theranos’ collapse. She gave a TED Talk on speaking truth to power and co-founded Ethical in Entrepreneurship, a non-profit that offers ethics training and seminars to start-up founders, employees, and investors.
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In June, a demonstration against increasing energy prices took place in Madrid. Credit… Associated Press/Manu Fernandez
On Tuesday, Spain’s government approved emergency measures to assist families with the rising cost of energy, as well as a pledge to limit profits earned by electrical providers as a consequence of the recent increase in natural gas prices.
Natural gas wholesale prices in Europe have risen to levels almost five times higher than they were in 2019. Because gas is often used to produce power, the increasing price is driving electric costs to rise. Other European countries, notably Greece, have lately announced measures to assist consumers, including the establishment of a fund to subsidize home energy costs.
The rapid increase has become a political issue in Spain. Pedro Sánchez, the Socialist Prime Minister, heads a minority left-wing coalition administration that counts on the backing of Unidas Podemos, a party dedicated to defending the poorest families. The emergency plan would safeguard poorer households who are unable to pay their bills by extending the grace period before utilities may turn off their electricity.
Mr. Sánchez revealed his intentions in a televised appearance on Monday night, prompting the government’s response. He claimed approximately 650 million euros (about $770 million) in “exceptional earnings” will be seized from energy firms and “redirected to customers” without going into detail.
Some people were pleased with the government’s decision. “No Spanish administration has ever ventured to take on the energy corporations who dominate our market as an oligopoly,” said Javier Garca Breva, a former Spanish legislator and renewable energy specialist. “I believe this to be historic, but clearly it will generate a lot of resentment among these businesses,” he said.
Mr. Sánchez, according to Edmundo Bal of the Ciudadanos party, is hastily putting a “patch” to the energy issue rather than finding a long-term solution.
The measures, according to the electric providers, would be unproductive. Natural gas prices have increased in Europe as a result of a number of reasons, including a rebound in worldwide demand after pandemic lockdowns and a late-winter cold spell that depleted storage stocks.
Iberdrola, one of Spain’s three major electric providers, claimed energy costs were increasing due to “international circumstances” and that the government’s move would have little effect. In response, the group representing Spain’s nuclear power producers threatened to shut down operations.
Mr. Sánchez promised to bring power prices in line with those in 2018, minus inflation. The energy generating tax, which is paid by customers, would be reduced until the end of the year, according to the measures adopted Tuesday. The government lowered the value-added tax paid on energy bills from 21% to 10% in June.
According to the latest figures from the national statistics office, Spaniards spent approximately 35% more for energy last month than a year ago, and the wholesale price of electricity has continued to rise in recent weeks.
Spain’s minister for environmental transition, Teresa Ribera, told reporters that the emergency measures will help families save 22 percent on their monthly energy bills.
To do this, the government would set a limit on energy firms’ earnings from global natural gas price increases until at least March, when the issue will be reassessed.
“The prognosis for the next months indicates to an unprecedented spiral,” Ms. Ribera said, adding that this “affects the well-being of families as well as the whole Spanish economy.”
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Putting together a generator engine for one of the Generac backup generators. Credit… The New York Times’ Taylor Glascock
At the factory in Whitewater, Wisconsin, the finishing touches are being applied.Credit… The New York Times’ Taylor Glascock
Over the past year, demand for backup generators surged as housebound Americans concentrated on preparing for the worst just as a wave of severe weather guaranteed that many of them did.
Generac, a 62-year-old Waukesha, Wisconsin-based firm, responsible for approximately 75 percent of standby home generator sales in the United States. According to Matt Phillips of The New York Times, the company’s market domination and the rising danger presented by more unpredictable weather have transformed it into a Wall Street favorite.
Since the end of 2018, Generac’s stock price has risen almost 800 percent, and its earnings has roughly quadrupled since June 2020. The demand is being driven by the need. According to the Energy Department, the United States had 383 power outages in 2017, up from 141 in 2016. There were 210 this year as of the end of June, according to the most current statistics available, up 34% from the same time in 2020.
“We’re not climate experts, but weather events have gotten a lot more severe,” Generac CEO Aaron Jagdfeld said. He rattled off a litany of notable weather occurrences from the previous year, ranging from freezes to floods to droughts.
He said, “The air is hotter, and the water is warmer.” “And the combination of those two factors is causing more severe weather events.”
Demand and pandemic-related supply chain snarls have increased consumer wait periods to about seven months, despite the opening of a new facility in Trenton, South Carolina. READ THE ENTIRE ARTICLE
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The stimulus update is a report on poverty that invites debate over the effectiveness of government stimulus.
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