TIME

9 Countries That Hate America Most

Washington Nationals at New York Mets
Mar. 31, 2014. A giant American flag is unfurled on the field during ceremonies before the start of the game between the Washington Nationals and the New York Mets at Citi Field in Flushing Meadows, New York. Justin Lane—EPA

International approval of U.S. leadership improved last year, rising from of 41% in 2012 to 46% in 2013. This ended a downward trend in U.S. approval ratings, which had consistently declined since 2009.

While people around the world tended to have positive opinions of U.S. leadership, residents of some countries had a negative impression of the United States. In five nations, more than two-thirds of those surveyed disapproved of the current administration, according to the latest U.S.-Global Leadership Project, a partnership between Meridian International Center and Gallup.

Last year represented a major improvement for U.S. leadership, Ambassador Stuart Holliday, president and CEO of Meridian International Center, told 24/7 Wall St. There were several reasons for this, including a wind-down of America’s role in armed conflicts abroad. As a result, “The view that we are the major shapers of the world and our image as being the world’s policeman are fading,” Holliday said. An ongoing return to normalcy in the global economy, in which the United States plays an outsized role, has also helped, he added.

The United States has long-running political tensions with many nations that disapprove of the U.S. leadership. Among these is Iran, which has not had diplomatic relations with the U.S. since 1980, and whose nuclear ambitions and human rights violations are points of contention for the United States. In Pakistan, the U.S. has launched attacks against terrorists and insurgents inside the country. Most notable was the 2011 raid and killing of Osama bin Laden, which led to heightened tensions between the two nations.

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Another potential reason for high disapproval of U.S. leadership is the relationship with Israel. The U.S. State Department notes America was the first country to recognize Israel in 1948, and that “Israel has become, and remains, America’s most reliable partner in the Middle East.” Countries with long-running disputes with Israel — such as Lebanon and the Palestinian territories — also disapprove of U.S. leadership.

Ambassador Holliday noted the situation in the Middle East is also influenced by a lack of clarity over U.S. policy goals and, to some extent, perceptions of the U.S. government’s support of Israel. This is driven in large part by a 24/7 news cycle that chronicles every twist and turn of the peace process, Holliday added.

Several of the countries that dislike American leadership the most have also undergone recent political upheavals. Mass demonstrations in Tunisia, for example, set the tone in 2011 for what came to be known as the Arab Spring. There has also been considerable political upheaval in Egypt following the forced resignation and trial of President Hosni Mubarak in 2011. Mubarak was long considered a stable ally of the United States.

However, while it may be easy to conclude disapproval of U.S. leadership is largely limited to the Middle East and North Africa, this is not always the case. Most notably, in Slovenia, 57% of residents disapproved of U.S. leadership — despite the fact that the country is both a major ally in NATO and a member of the European Union.

But what Slovenia has in common with a number of other countries that disapprove of American leadership is the citizens’ negative opinion of their country’s government. In 2012, less than one-quarter of Slovenians had confidence in their own government, and a similar number lacked faith in their judicial system, lower than in the vast majority of the countries in the same region. Similarly, less than one-third of Pakistan and Iraq residents had confidence in their governments.

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America’s strong economy may also provoke resentment among residents of these countries. According to Jon Clifton, Managing Director of the Gallup World Poll, residents of many of these countries experience hardship and do not enjoy the kind of broad economic benefits seen in more developed countries. As a result, residents equate “U.S. leadership and the leadership of whatever the current economic order represents for them.”

GDP per capita in four of the nine countries that hate America the most was less than $10,000 last year. By contrast, U.S. gross domestic product totaled more than $50,000 per capita in 2013.

Limited access to basic needs may also add to the misery of the citizens in many countries that disapprove of the United States the most. Just 31% of Iraqis were satisfied with the quality of their drinking water in 2012, less than any of the 16 other peer countries in the Middle East and North Africa. In Slovenia, only 24% of residents said they were satisfied with the availability of good, affordable housing. This was less than in all but one other OECD nation.

To determine the countries that hate America most, 24/7 Wall St. relied on data from The U.S.-Global Leadership Project, a partnership between Gallup and the Meridian International Center. Gallup also provided data from a number of other indices it produced through polling in 2012. Additional economic information and estimates, including unemployment data, came from the International Monetary Fund’s (IMF) 2013 World Economic Outlook. IMF figures on GDP per capita are given at purchasing-power-parity in order to show real differences in wealth. Data on life expectancy was provided by The World Bank.

These are the countries that hate America most.

5. Iraq
> Disapproval rating: 67.0%
> GDP per capita: $7,132 (79th lowest)
> Unemployment: N/A
> Life expectancy: 69 years (57th lowest)

The United States and Iraq have a long history of conflict. The Gulf War in 1991 was followed by the Iraq War, which began in 2003 and lasted until U.S. forces left Iraq in December 2011. Although the war has ended, the U.S. State Department warned that traveling to the country is extremely dangerous because of civil unrest and threat of kidnappings and terrorist attacks. The long-running presence of the U.S. military and the years of conflict, during which hundreds of thousands of Iraqis, including civilians, died have likely contributed to negative opinions of Americans. The new government has struggled since the war began. Many citizens disapprove of the regime of Prime Minister Nouri al-Maliki, who was elected to office in 2010 under a free election overseen by the United States. As of 2012, however, Iraqis were less likely to express confidence in their national government, military or judicial system than citizens of peer nations, and just 30% believed their country had fair elections — lower than in any country in the region.

4. Yemen
> Disapproval rating: 69.0%
> GDP per capita: $2,348 (38th lowest)
> Unemployment: N/A
> Life expectancy: 63 years (38th lowest)

More than 100 Yemeni citizens have been detained at Guantanamo Bay over the years. The United States also has been concerned over terrorist activity in Yemen. It is therefore no surprise that the two countries have a strained relationship and that nearly 70% of survey respondents disapproved of U.S. leadership. Also, just 9% of Yemenite respondents approved of U.S. leadership, less than in any other country reviewed by Gallup. The country suffers from a very poor economy, with GDP per capita at just $2,348 last year, among the very lowest in the world. According to the World Bank, more than half of the country’s population lived in poverty as of 2012. U.S. citizens are currently under advisory from the U.S. State Department to avoid traveling to Yemen due to the extremely high security threat level.

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3. Lebanon
> Disapproval rating: 71.0%
> GDP per capita: $15,832 (66th highest)
> Unemployment: N/A
> Life expectancy: 80 years (tied for 23rd highest)

Like many countries that disapprove of U.S. leadership, Lebanon has a long history of conflict with Israel. Hezbollah, a militant group and political party deemed a terrorist organization by the United States and European Union, has operated out of Lebanon for several decades. In February, Israeli forces bombed a Hezbollah convoy on the Syrian-Lebanese border. Hezbollah subsequently claimed responsibility for the roadside bombing of an Israeli patrol along the Lebanese-Israeli border in retaliation. The country is also strapped with debt. Its gross debt was nearly 143% of its GDP last year, the third highest in the world. According to a recent AP report, the country’s debt problem is compounded by corruption and a government unwilling to act. In 2012, 85% of residents stated that corruption was widespread, the most of any comparable country.

2. Pakistan
> Disapproval rating: 73.0%
> GDP per capita: $3,144 (48th lowest)
> Unemployment: 6.7% (47th lowest)
> Life expectancy: 66 (46th lowest)

While 73% of Pakistani respondents still disapproved of U.S. leadership in 2013, this was a six percentage points improvement over 2012. Relations with Pakistan have been tense since the September 11, 2001, terrorist attacks on the United States by al-Qaeda. Shortly after the attacks, the U.S. made Pakistan the base of its operations in its hunt for al-Qaeda leader Osama bin Laden and the war on Afghanistan’s then-leadership, the Taliban. In 2009, a survey revealed that 59% of the Pakistani people viewed the United States as a bully and as a bigger threat than al-Qaeda. Further exacerbating the country’s negative view of the U.S. may be Pakistan’s struggling economy and poor governance. Just one in 10 Pakistanis said they lived comfortably on their incomes in 2012, according to Gallup, and only 23% of Pakistanis expressed confidence in their government.

1. Palestinian territories
> Disapproval rating: 80.0%
> GDP per capita: N/A
> Unemployment: N/A
> Life expectancy: 73 years (95th highest)

Four of five Palestinians disapproved of American leadership, by far the worst perception of the United States globally. One explanation for the country’s hostility toward the United States is Palestine’s conflict with Israel. Hamas, the organization that has effectively governed the Gaza Strip territory since 2007, is considered by the United States and European Union to be a terrorist organization. Possibly emphasizing the deep divides in the Palestinian territories, just 18% of respondents told Gallup the place they lived was a good place for racial and ethnic minorities in 2012, less than all but one other country in the region.

Read the rest of the list on 24/7 Wall St.

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TIME

The Digital Economy Is Profoundly Unequal

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Is unbridled innovation good for society? Can we trust the internet? Can we afford not to? These are some of the big picture questions being asked right now at the annual Institute for New Economic Thinking conference in Toronto. It’s a George Soros-sponsored academic shindig that has become a touchstone for the key economic policy conversations in the year ahead. This year, the topic is how to manage the societal fallout from our rapidly expanding digital world. At a time when much of what happens on the internet–from NSA snooping to runaway viruses like the Heartbleed bug to cyber-warfare with China–makes people scared, how do we craft a digital world that feels safer and more secure? And how can we make sure that the benefits of the digital economy–which currently accrue mostly to the top quarter of society–are more equally shared?

I discussed these issues with Quartz editor Kevin Delaney and the Guardian’s Heidi Moore, this week on WNYC’s Monday Talking (listen below). And I’m listening to some of the world’s top thinkers on the topic debate them here in Toronto. One of the things that I’ve found fascinating so far is how unequal the digital economy really is. Yesterday, University of Michigan professor Lisa Cook gave an illuminating (and somewhat depressing) presentation about this. For starters, innovation is making our economy more bifurcated. People who make their living interacting with technology and the digital world make a median salary of $74,000 a year. Those that don’t make $34,000. Women and minorities (with the exception of Asians) lag behind. 70 % of people in the “innovation economy” are non-Hispanic whites. And even for women with technology degrees, there’s a big pay differential. Men in the innovation economy make $80,000 per year and women make $53,000, in part because they tend to be concentrated in areas like life sciences, which pay less than physics or engineering or computer science.

So, what to do? Cook says the good news is that there’s reason to think that more diversity is good for business, and that can help drive change. Her research shows that co-ed patent teams, for example, are much more productive than single sex ones. And while pipeline issues used to be a big problem, women are getting more and more STEM degrees – roughly 40% of them now go to women, up from around 9% in 1970. Now, female entrepreneurs just have to start monetizing those educational gains. Cook says that women are founding less than 5% of new tech start-ups. All I can say is follow the money, sisters!

TIME Economy & Policy

The Government Is a Hit Man: Uber, Tesla and Airbnb Are in Its Crosshairs

San Francisco taxi drivers show their opposition to Uber which taxi drivers say is operating illegally in San Francisco
San Francisco taxi drivers protest Uber, which taxi drivers say is operating illegally in San Francisco, July 30, 2013. Beck Diefenbach—Reuters

The real losers are not just the next generation of innovators but also customers who lose out on more ways of getting what they need or want.

What the invisible hand of free-market innovation giveth, the dead hand of politically motivated regulation tryeth desperately to take away.

That’s the only way to describe what’s happening to three wildly innovative and popular products: the award-winning electric car Tesla, taxi-replacement service Uber and hotel alternative Airbnb. These companies are not only revolutionizing their industries via cutting-edge technology and customer-empowering distribution, they’re also running afoul of interest groups that are quick to use political muscle to maintain market share and the status quo.

The battle between what historian Burton W. Folsom calls “market entrepreneurs” and “political entrepreneurs” is an old and ugly one, dating back to the earliest days of the American experiment. Market entrepreneurs make their money by offering customers a good or new service at a good or new price. Political entrepreneurs make their money the old-fashioned way: they use the government to rig markets and kneecap real and potential competitors. In his great 1987 book The Myth of the Robber Barons, Folsom discusses how the 19th century steamboat pioneer Robert Fulton quickly went from a market entrepreneur to a political one by securing a 30-year monopoly from the New York legislature for all steamboat traffic in the Empire State.

Especially in today’s sluggish economy, it’s more important than ever that market innovators win out over crony capitalists. Letting markets work to find new ways of delivering goods and services isn’t just better for customers in the short term, it’s the only way to unleash the innovation that ultimately propels long-term economic growth. After all, no country has ever regulated its way out of a recession.

Tesla has done the unthinkable not once but twice: First, it built an electric car that people actually want to buy despite a price tag north of $70,000 for its cheapest models. Second, it has the temerity to sell directly to its wealthy customers rather than subjecting them to the ritualized hell known as auto dealerships. But because auto dealers account for as much as 20% of state sales taxes, their wishes often become legislators’ commands. At the top of their wish list? Don’t let carmakers sell directly to customers. The most glaring example of protectionism just took place in New Jersey, whose legislature added even more burdens to rules that already banned the direct sales of cars to customers. Now Teslas effectively can’t be sold in New Jersey, reports the New York Times, all in the name of ensuring consumer safety and protecting competition. News flash: Anyone who can afford a $70,000 car doesn’t need much protecting. And if you’re ready to believe car dealers when they argue that incredibly complicated rules making it impossible for new companies to enter their market are about protecting competition, I’ve got an expensive undercoating package I want to sell you.

The app-driven car service Uber, which bills itself as “everyone’s car service” and connects drivers and riders in minutes, presents a similar threat to traditional taxi and ride services in the 30-plus U.S. cities in which it operates. Rather than fight for customers by cutting fares, increasing the number of cabs or improving services, taxi commissioners and city councils from San Francisco to New York are instead trying to regulate Uber out of business on the grounds that it provides unfair and unsafe competition.

Never mind that Uber riders get to instantly rate their experience in a way no cab passenger ever does (just as amazingly, drivers get to rate passengers!). At the state level, California has already instituted a bevy of regulations on Uber, Lyft and other new ride-sharing services. These include mandatory criminal-background checks for drivers, licensing via public-utilities commissions, and driver-training programs. Last year, Washington, D.C., officials unsuccessfully tried to squeeze out Uber with regulations on the types of cars that could carry passengers, what sorts of credit-card processing machines could be used and how the company’s app operates.

Airbnb, a website that allows people to rent everything from vacation homes to spare couches for short-term stays, works great for everyone but conventional hoteliers and cities trying to bilk travelers for tourist taxes. Operating in 192 countries and typically showing hundreds of thousands of offerings, Airbnb has faced stiff regulation in towns supposedly famous for their weirdness and openness to lifestyle experimentation, such as Austin, which charges hosts an annual licensing fee and limits the number of participants, and Portland, Ore., which has banned the service in residential neighborhoods. In New York City, rent-control advocates are teaming up with hospitality-industry heavyweights to try and shut down Airbnb and similar services.

If mobsters were pulling these sorts of stunts, we’d recognize the attacks on new ways of doing business for what they are: protection rackets, with state regulators rather than professional hit men creating and enforcing rules to benefit well-connected businessmen. The real losers are not just the next generation of innovators but also customers who lose out on more ways of getting what they need or want.

Folsom’s study of political and market entrepreneurs also suggests that political entrepreneurs are ultimately unsuccessful. Indeed, Fulton claimed in 1817 that his monopoly meant no one could ferry passengers to New York City from neighboring states. A young Cornelius Vanderbilt was hired by a New Jersey businessman to challenge Fulton not in a court of law but on the Hudson River, ferrying passengers from Elizabeth, N.J., and Gotham. Vanderbilt cheekily flew a flag from his ship that read, “New Jersey must be free.” While evading capture, Vanderbilt lowered prices and changed the business climate.

It turns out that New Jersey must be free again — to sell Teslas. And New Yorkers should be free to rent out their rooms if they want to. And Uber to drive you where you want to go. The invisible hand of free markets shouldn’t have to spend so much of its time slapping away the dead hand of political entrepreneurship.

TIME Financial Planning

The President’s New Mission: Teach the Children (About Money)

President And Mrs. Obama Depart White House For Florida
Win McNamee—Getty Images

The President’s Advisory Council on Financial Capability for Young Americans opens for business Monday and is squarely focused on kids in the effort to empower Americans to take charge of a better financial future

Shakespeare asked: what’s in a name? His point was that names do not define the person or entity. But I would argue otherwise, at least as it relates to a top authority advising the President on how to empower Americans to take charge of their financial lives.

On Monday, the President’s Advisory Council on Financial Capability for Young Americans meets for the first time. The name itself is a mouthful; the acronym PACFCYA looks like it’s been Travoltified. Still, a lot can be read into this name, which promises to set a smart new course for financial education in the U.S.

American presidents have been on the financial education bandwagon formally since George W. Bush authorized a President’s Advisory Council on Financial Literacy in 2008. Bush’s famous vision was of an ownership society. “We want people to own assets,” he said in authorizing the first council. “We want people to be able to manage their assets.”

His lofty goal was to equip everyone with the financial know-how needed to parse complicated terms and fees, and generally get ahead by fending for themselves in the free marketplace. The hope was that a population smarter about its money would reduce odds of a repeat financial crisis. As chairman of the council, Charles Schwab, wrote in the first report: “The charge was simple, yet daunting: improve financial literacy among all Americans.”

The mission took on a new look under President Obama, who in his first term reconstituted the board under the new name: President’s Advisory Council on Financial Capability, swapping “Literacy” for “Capability.” As I wrote at the time, the simple word change spoke volumes about the new council’s approach. This group was more about equalizing access to key financial products like checking and savings accounts. A big part of its mission, as stated in the charter, was to “take into consideration the particular needs of traditionally underserved populations, such as youth, minorities, low- and moderate-income Americans, immigrants, and low-literacy adults.” Meanwhile, regulators would set up vast new protections so that a deeper understanding of money issues wasn’t critical for most people.

Both approaches have their virtues. Certainly, it’s good for consumers to understand and be able to fend for themselves rather than rely on regulators to keep the financial bad guys at bay. But not everyone gets it when it comes to personal finance, and those who don’t would clearly benefit from common sense dictates like simple financial statements and plain vanilla mortgages.

Now we come to the third iteration of this important body, and “for Young Americans” has been tacked on to the name. Teaching kids about money has always been part of the council’s mission. But now it is the sole focus, which puts the emphasis where it ought to be. Solving financial illiteracy is a long-term project that should begin with young people, and by that I mean students in first grade.

“The last council was for people of all ages,” says Beth Kobliner a financial author reappointed to the new council. “Now, the entire council is about young people.” She believes the new name provides absolute clarity of the mission and that there will be little tolerance for indecision. “Action is going to be the buzzword,” she says. “It’s no coincidence that President Obama declared ‘a year of action’ in his State of the Union address.”

Another reappointed member, activist John Hope Bryant, founder and CEO of Operation Hope, echoes Kobliner’s view, writing in his blog that “this new Council will be different. It’s primary focus will be action, moving the needle, and getting things done…this Council will be more innovative, more solution seeking, more impactful.”

Research shows that early and frequent financial education works. Indeed, the council can expect a dose of data on this point at its first meeting. “This group will be able to show the country how to truly make a difference in the financial capability of our children,” says another reappointed member, Ted Beck president and CEO of the National Endowment for Financial Education.

In many ways, the financial education movement in the U.S. has stalled. There has been little progress, for example, in states making personal finance a required line of school study. The mission has been bogged down with handwringing over what works and what doesn’t, and where to best target resources. The PACFCYA seems determined to break the logjam by zeroing in on what works with kids. That may be reading a lot into a name. But then I’m no Shakespeare.

TIME Economy & Policy

Dear Apple and Chipotle: It’s Hard to Be Socially Responsible When You’re Dead

Apple's logo at its flagship retail store in San Francisco, on Jan. 27, 2014.
Apple's logo at its flagship retail store in San Francisco, on Jan. 27, 2014. Robert Galbraith—Reuters

Putting people before profits is a stupid business plan, because companies that fail don’t help anyone

Can we get real about corporate social responsibility (CSR), the idea that businesses shouldn’t just increase returns for shareholders but also benefit for free the larger world around them? Between Chipotle’s cryptic warning that global warming threatens the planet’s guacamole supply chain and Apple CEO Tim Cook’s seemingly forsaking return on investment (ROI) for social causes, CSR’s stock is spiking like Pets.com in the late 1990s.

“People, not profits” may be a powerful slogan, but it’s a really stupid business plan, mostly because it assumes that the two priorities are mutually exclusive — and that businesses that go belly up have any chance of helping anybody. So when a “visibly angry” Tim Cook told Apple investors who questioned the notion of man-made climate change to “get out of this stock” at the company’s annual shareholder meeting in late February, he wasn’t really putting ideology over profits. In an economy where many people are willing to pay a premium to feel good about themselves or morally superior to less enlightened souls, he was bidding up his company’s stock price.

You can be forgiven for thinking otherwise, as Cook, who took over Apple in 2011 and has labored to step out from Steve Jobs’ shadow, reportedly went ballistic on the bottom line: “When I think about human rights, I don’t think about an ROI,” he told a representative of the National Center for Public Policy Research, a controversial free-market think tank and Apple investor that questions the company’s stance on a wide range of environmental issues. “I don’t think about helping our environment from an ROI point of view,” he added.

If Cook really means any of that, even environmentalists would be wise to dump their Apple stock. Apple’s core business isn’t furthering human rights or “helping our environment.” It’s making a wide range of appliances that sell for a lot more than they cost to produce. And let’s be clear: There’s absolutely nothing wrong or even slightly morally dubious about that, and there’s also nothing remotely opposed to human flourishing. Indeed, Apple’s major role in mainstreaming the personal-computer revolution — not to mention a similar place of pride in kick-starting digital music devices, smartphones and tablets — have not just made the world a more enjoyable place but also a freer one by decentralizing all sorts of power, knowledge and communications.

Put slightly differently: Bill Gates’ greatest contribution to mankind was building Microsoft into a company that helped bring computing power to the masses. Whatever he does to make the world a better place as a philanthropist — and he’s doing a lot — will be a footnote to his contributions as a businessman.

And so it is with Apple. The minute that Cook — or Virgin CEO Richard Branson, who congratulated Cook and wrote “businessess should stand up to climate-change deniers” — actually does prioritize people before profits, we’ll all be worse off. Business is about economics, and economics is fundamentally a study of trade-offs, of figuring out how to square unlimited desires with harshly limited resources. As a hugely profitable and innovative company, Apple can of course set an example that others may want to follow. What it can’t do is turn its back on making a buck. The less profit it makes, the less good it can do, both in terms of its core business and its philanthropic commitments.

The CSR debate all too often devolves into equal and opposite camps. On the one side are folks like the Nobel Prize–winning libertarian economist Milton Friedman, who famously proclaimed, “There is one and only one social responsibility of business — to use its resources and engage in activities designed to increase its profits.” On the other side are crunchy types who believe deep down that profit stems from increasing human misery, that Apple’s success in selling computers comes at the cost of someone’s freedom or unrestrained environmental degradation.

Both extremes are wrong. As John Mackey, the co-founder and co-CEO of Whole Foods Market, explained in last year’s Conscious Capitalism, running a business isn’t “all about money.” Lots of other things come into play. But as Mackey — a self-described, unapologetic and hugely successful “free-market libertarian” who has radically transformed the grocery business — argued in a debate with his “personal hero” Friedman in 2005, “[Whole Foods wants] to improve the health and well-being of everyone on the planet through higher-quality foods and better nutrition, and we can’t fulfill this mission unless we are highly profitable. High profits are necessary to fuel our growth across the United States and the world.”

Acknowledging that profits are the precondition for corporate social responsibility may take some of the shine off CSR as a pious form of self-abnegation, and it certainly lets the steam out of Tim Cook’s self-righteous bluster. It also forces us to recognize that much of our moral grandstanding rests upon a foundation of cold, hard cash. But that’s a small price to pay, isn’t it, for a world in which we can do good by doing well?

TIME Economy & Policy

Fed Policy Has the Emerging World Lamenting the Dollar’s Dominance

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But the whining about tapering is unfair, too

The U.S. Federal Reserve is taking heat these days from policymakers in the developing world. They have good reason to be disgruntled. Ever since the Fed signaled last year that it would begin scaling back – or “tapering” – its unorthodox program to stimulate the U.S. economy, emerging markets have been in turmoil. Investors, fearful that a cutback in Fed largesse would crimp funds flowing to the emerging world, have yanked their money back, causing currencies to tumble from Turkey to South Africa to India.

That has forced central bankers in the developing countries into unwelcome choices. Many have had to hike interest rates in an attempt to stabilize their currencies, a move that could slow growth. And they’re not too happy about it. The most outspoken has been India’s central bank governor, Raghuram Rajan, who has complained that global policy coordination has broken down, the Fed has acted on its own, and selfishly left the emerging world to its fate. “Industrial countries have to play a part in restoring that [co-operation], and they can’t at this point wash their hands off and say, we’ll do what we need to and you do the adjustment,” Rajan recently criticized. He continued his critique at this month’s G-20 meeting in Sydney. The message from the U.S. and other major economies “is that you [emerging markets] are all on your own, no one is going to come to your help,” he warned on CNBC. “If that’s the message that goes out, we’re setting in place the roots of the next crisis.”

Such sentiments are not Rajan’s alone. “It is very important to continue to communicate to discuss about the roadmap so that we in the emerging markets can prepare,” commented Finance Minister Muhamad Chatib Basri of Indonesia, another country that has gotten hit by Fed tapering. Even the G-20 communique reflected these concerns. “All our central banks maintain their commitment that monetary policy settings will continue to be carefully calibrated and clearly communicated, in the context of ongoing exchange of information and being mindful of impacts on the global economy,” it stressed.

The complaints have highlighted a key, and perennial issue facing the global economy. Because the U.S. dollar is the world’s dominant currency, the decisions made by American policymakers ripple through the entire global economy – as in the case of Fed tapering. However, the Fed makes its policy decisions not based on their potential consequences for the rest of the world, but on conditions in the U.S. economy – inflation and employment. Thus there is a mismatch. The Fed acts locally but has a global impact. As Rajan points out, that’s far from ideal. Fed policy aimed at achieving certain goals tends to have unintended spillover effects that other countries are forced to accommodate.

Yet the criticism the Fed is facing over its decision to taper is unfair as well. The very extreme and unusual nature of the Fed’s policy – which pumped hundreds of billions of dollars into the economy through a process known as “quantitative easing,” or QE – meant that they had to be temporary. Acting as if the Fed decision to scale back somehow caught emerging economies off guard means the policymakers themselves were unprepared for the inevitable. Even more, what exactly was the Fed supposed to have done? The Fed indicated its intentions to change course long before it actually did. Sure, the Fed does not really consider the international fallout from its choices. But the alternative is impossible as well – the Fed is simply not tasked with being the world’s central bank. And how would that work, anyway? It seems highly unwieldy for the Fed to have made its tapering decision based on consultations with central bankers all over the world, who all would have had their own interests in mind.

So in the end, Rajan and his emerging-market colleagues point out a serious flaw in the global financial system for which there is probably no workable solution – outside of replacing the dollar as the world’s No.1 currency. With that nowhere in sight, Rajan and others may be stuck doing a lot of complaining.

TIME Economy & Policy

10 States Where Income Inequality Has Soared

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A surprising number one

Although average real income in the United States increased by more than a third between 1979 and 2007, not all workers benefited equally. In each of the 50 states, income growth among the top 1% of earners rapidly outpaced that of the bottom 99%, according to a recent study.

In four states — Alaska, Michigan, Nevada and Wyoming — average income increased exclusively for the top 1% and declined for the bottom 99%. In another six states, the top 1% accounted for more than two-thirds of all income growth between 1979 and 2007, while the income of the bottom 99% grew at a much slower pace. Based on a report published by the Economic Policy Institute (EPI), 24/7 Wall St. reviewed the 10 states with the most lopsided income growth.

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In many of the states with the most lopsided income growth, real average income rose little, if at all, between 1979 and 2007. While the average income of the bottom 99% rose 19% nationwide, it rose less than 5% in eight of these states.

In an interview with 24/7 Wall St., Mark Price, coauthor of the study and a labor economist at the Keystone Research Center, said that to many observers the issue of income inequality is a story about Wall Street’s growth. But “It’s not just a story of the financial markets in New York City,” Price said. “Over time, that [top] group in each state is accruing an increasingly larger share of the growth in income.”

In fact, as of 2012, the financial sector comprised a larger share of the economy than in the United States overall only in three of the 10 states with the most imbalanced income growth. Additionally, the financial sector contributed among the least in four of these states. The financial industry accounted for just 2.3% of gross domestic product (GDP) in Wyoming in 2012, the lowest share of any state.

Another factor that does not appear related to uneven gains in income is economic growth. Price told 24/7 Wall St., “Looking at growth and GDP over time is a pretty blunt instrument,” and the relationship between unbalanced income gains and economic growth is weak.

MORE: 10 Weird Things Thieves Steal

GDP growth was the largest in Nevada, Arizona and Florida between 1979 and 2007 — all among the 10 states with most imbalanced income growth. However, among the remaining seven states were also Alaska and Michigan, for example, where GDP growth lagged much of the rest of the nation.

State tax structures, too, may not play as large a role as many observers may believe. Price noted that, for most Americans, the decision of where to live was not tied to taxes. While three states with the most uneven income growth did not levy an income tax, three of the other 10 states — Hawaii, New York and Oregon — had exceptionally high top income tax rates.

However, Professor Richard Burkhauser, the Sarah Gibson Blanding Professor of Policy Analysis at Cornell University, added that taxes and transfer payments should not be ignored. In an email to 24/7 Wall St., Burkhauser, who has argued against the significance of income inequality said, “Government tax and transfer policies [can] dramatically redistribute income from those who have large amounts of taxable market income to those who do not.”

Still, according to Price, inequality in income growth “is a trend which should concern policy makers independent of the impact of taxes and transfers,” and that incomes — net of such considerations — have still disproportionately risen for the wealthiest 1%.

To determine the 10 states with the most skewed growth in incomes, 24/7 Wall St. reviewed income growth figures from 1979 to 2007 from “The Increasingly Unequal States of America,” a study by Estelle Sommeiller and Mark Price published by the EPI. We also reviewed figures from 2009 to 2011 from the same study. The authors derived average income growth from taxable income data, net of inflation. Additionally, we also reviewed state GDP figures from the Bureau of Economic Analysis, unemployment data from the Bureau of Labor Statistics and an assortment of figures from the U.S. Census Bureau’s 2012 American Community Survey.

These are the top 5 states where income inequality has soared:

1. Alaska
> Share of growth captured by the top 1%: All
> Real income growth 1979-2007: -10.3% (the least)
> Income growth, bottom 99%: -17.5% (the least)
> Income growth, top 1%: 118.6% (10th least)

The average real income for all workers in Alaska dropped by more than 10% between 1979 and 2007, making Alaska the only state where total income declined during that period. Despite this, the average income of Alaska’s top 1% of earners more than doubled, and incomes among the wealthy represented the only income growth in the state. Alaska’s average income per worker in the bottom 99% was $58,482 in 2011, second highest in the nation, trailing only Maryland. Due to the state’s high corporate tax collections, as well as no state sales or income taxes, Alaska has among the lowest tax burdens in the country. Alaska also benefits from its petroleum profits tax, which is paid by companies based on the value of the oil and natural gas they produce.

2. Nevada
> Share of growth captured by the top 1%: 218.5%
> Real income growth 1979-2007: 8.6% (2nd least)
> Income growth, bottom 99%: -11.6% (2nd least)
> Income growth, top 1%: 164.0% (24th highest)

The average income in Nevada rose just 8.6% between 1979 and 2007, among the lowest increases in the nation. However, most of the state’s residents actually lost money during that time, as average real income dropped by 11.6% for the bottom 99% of earners. For the remaining top percentile of earners, average incomes rose by 164% between 1979 and 2007. As of 2007, the top 1% accounted for 28% of state residents’ total income, the fifth highest percentage in the United States. The gap between the top percentile and other earners has further increased in recent years. Incomes for the top 1% rose by 4% between 2009 and 2011, while incomes for the bottom 99% of earners slipped by a nation-leading 6.7%. Nevada has struggled with high unemployment in recent years, including an average unemployment rate of 11.1% in 2012, the highest in the nation that year.

MORE: Cities With Highest and Lowest Taxes

3. Wyoming
> Share of growth captured by the 1%: 102.3%
> Real income growth 1979-2007: 31.5% (23rd least)
> Income growth, bottom 99%: -0.8% (3rd least)
> Income growth, top 1%: 354.3% (4th highest)

While Wyoming’s wealthiest residents have enjoyed the benefits of the state’s immense resources, the average income of the bottom 99% of workers in the state slid by 0.8% between 1979 and 2007. The state’s overall real income grew by 31.5% in the same period, however, due entirely to a 354% increase in the average income of the top-earning 1%. The income gap continued to grow between 2009 and 2011 as well. Average income of the bottom 99% of workers rose 6.9%, and that of the top 1% increased by 13.6%. Roughly 12.7% of the state’s labor force worked in the agriculture and mining industries in 2012, the most in the nation.

4. Michigan
> Share of growth captured by the 1%: 101.7%
> Real income growth 1979-2007: 8.9% (3rd least)
> Income growth, bottom 99%: -0.2% (4th least)
> Income growth, top 1%: 100.0% (4th least)

Despite some good economic news for Michigan since the 2008 financial crisis, the state’s average real income growth between 1979 and 2007, as well as from 2009 to 2011, still trailed the nation as a whole. The wealthiest 1% enjoyed a 100% increase in average income between 1979 and 2007, while the average income of the bottom 99% dropped by 0.2% during those years. The income growth gap has remained wide in the years following the 2008 economic crisis. Between 2009 and 2011, the average income increase of the top 1% was 12.8%, while the average income increase of the bottom 99% was 0.2%. The good news for the bottom 99% of Michigan workers is that the U.S. auto industry has bounced back in terms of job creation and car sales.

MORE: States Where Children Are Struggling the Most to Read

5. Arizona
> Share of growth captured by the 1%: 84.2%
> Real income growth 1979-2007: 17.0% (8th least)
> Income growth, bottom 99%: 3.0% (6th least)
> Income growth, top 1%: 157.8% (23rd least)

In 1979, the top 1% of earners accounted for just 9.1% of all income in Arizona. By 2007, the top 1% accounted for a full one-fifth of all income. Incomes of the top 1% of earners soared by more than 157% during that time, while incomes of the bottom 99% rose by just 3%. Since then, matters have not changed. Between 2009 and 2011, the average real income of the bottom 99% of earners fell by 1%, even as incomes of the top 99% rose by nearly 6%. While real income growth in the state lagged the national rate over both periods, the state’s economy was among the fastest growing in the U.S. between 1979 and 2007. One possible explanation for why GDP grew as incomes remained flat is that Arizona added more than 1 million non-farm jobs between 1990 and 2007.

For the rest of the list, click here.
TIME

10 Cities Where Violent Crime Is Soaring

Peter Dazeley—Getty Images

No. 1 may surprise you

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This post is in partnership with 24/7 Wall Street. The article below was originally published on 247wallst.com.

According to data released by the Federal Bureau of Investigations, the United States is becoming safer nearly every year. In the 20 years through 2012, the U.S. violent crime rate has been almost cut in half. Just since 2007, the nation’s violent crime rate has declined from 471.8 to 386.9 incidents per 100,000 people.

While the prevalence of violent crime — which includes murder, rape, robbery, and aggravated assault — has declined in many of the nation’s metropolitan areas, in some regions it has increased. In Bismarck, North Dakota, the violent crime rate more-than doubled — from 167.5 cases per 100,000 people in 2007 to 354.3 in 2013. Based on figures published by the FBI, these are the metropolitan areas with the greatest increases in violent crime rate.

Not all measures of crime produce the same results. While reported offenses of violent crimes were down slightly on a per capita basis in 2012, the most recent year for which data is available, estimates that include non-reported offenses indicate that the violent crime rate actually rose in 2012. According to the Bureau of Justice Statistics, “Crime not reported to police and simple assault accounted for the majority of this increase.”

Although it remains difficult to precisely determine the violent crime rate, the exact relationship between crime and the economy is similarly unclear . Some experts believe that people are more likely to commit crimes as the economy stumbles, while others suggest this relationship is unresolved and that more opportunities to commit crime may arise as the economy improves.

“As you just sort of think through the mechanics of a crime, it makes total sense,” John Roman, senior fellow at the Urban Institute, told 24/7 Wall St. “Your car is much less likely to be stolen if its in your garage than if its in the mall parking lot…and your home is much less likely to be burglarized if you’re in it than if you’re somewhere else spending money.”

In many of the metro areas where crime rose the most, the economy has been especially strong. This is the case with Odessa, Texas, an oil boom town that has experienced rapid economic growth and large inflows of people. Two other metro areas, Columbus, Indiana, and Sioux Falls, South Dakota, have also experienced strong growth in recent years.

One of the hidden factors that could be driving up crime rates in areas with thriving economies may be shifting local demographics, Roman explained. “The biggest predictor of committing a criminal act is being young, male, and relatively low-skilled. And when you have these big natural resource booms you’re attracting lots and lots of those people to your community.” As a result, it is not organized criminals driving up crime rates as much as it is likely younger men looking for work, Roman said.

Generally, aggravated assault was the most reported violent crime in 2012, accounting for more than 62% of incidents. This was especially the case in many of the areas that led the nation in rising violent crime rates. Even as most of these areas had dramatic increases in assault rates, most had declining murder rates, and some even had decreases in property crime.

Aside from changing demographics, another factor that may affect crime statistics may be the area’s reporting trends. According to Roman, if police signal they are cracking down on crimes such as domestic violence, they may be able to encourage more people to report a crime.

Drug use, too, may play a role in promoting crime in some areas. Heroin use is on the rise in a number of metro areas because crackdowns on prescription pill abuse “drives people into the black market for heroin,” Roman said. While heroin users are no more likely to be violent, the environment in which drugs are bought and sold is often more dangerous, leading to potentially higher crime rates.

Based on figures published by the FBI’s Uniform Crime Report, 24/7 Wall St. determined the 10 metropolitan statistical areas where crime rates rose the most between 2007 and 2012. In order to be considered, areas had to retain the same geographic boundaries during the period covered, and they had to retain a consistent reporting practices. For some MSAs, less than all areas reported offenses. For these areas, FBI estimates totals based on offenses from areas actually reporting. Additionally, we also reviewed unemployment figures from the Bureau of Labor Statistics (BLS), as well as the BLS’s “Economy At A Glance” tables.

These are the 10 U.S. cities where violent crime is soaring:

1. Odessa, Texas
> 5-year increase in violent crime rate: 75.5%
> Violent crime per 100,000 (2007): 468.1
> Violent crime per 100,000 (2012): 821.3
> Murders per 100,000: 3.5

There were 672.2 aggravated assaults per 100,000 residents in Odessa in 2012, an increase of more than 80% since 2007. Most property crimes, such as burglary and theft, became less likely over that time period, declining by 13.8% and 19.0%, respectively. On the other hand, motor theft, in particular, increased by 17% to more than 500 incidents in 2012. Many reported auto thefts, however, may have been illegitimate, according to an officer the Odessa Police Department. Some incidents, for example, may have been insurance fraud attempts, or drunk drivers abandoning their vehicle and claiming it was stolen. Some vehicles were being stripped for scrap metal, while others being taken merely for joyrides.

2. Columbus, Ind.
> 5-year increase in violent crime rate: 70.1%
> Violent crime per 100,000 (2007): 101.6
> Violent crime per 100,000 (2012): 172.8
> Murders per 100,000: 1.3

There were just 76 violent crimes committed in Columbus in 2007, lower than in all but one other metro area where data was available. Although the violent crime rate remained relatively low when compared with most metro areas in 2012, the rate increased by more than 70% from 2007. Motor vehicle crime was up by nearly 50% in the area between 2007 and 2012, versus a 37% decline in auto theft nationwide. The area is also home to a number of major auto parts manufacturing operations, which are critical to the area’s economy.

3. Wheeling, W. Va.-Ohio
> 5-year increase in violent crime rate: 67.7%
> Violent crime per 100,000 (2007): 172.6
> Violent crime per 100,000 (2012): 289.4
> Murders per 100,000: 0.0

Although the violent crime rate in the Wheeling metro area rose by more than nearly all other such areas between 2007 and 2012, the region is still relatively safe. There were zero murders in 2012, and less than 40 robberies per 100,000 residents, considerably less than the national rates of 112.9 robberies and 4.7 murders per 100,000 residents that year. Marshall and Ohio county, which are part of the Wheeling metro area, are both considered part of the Appalachia High Intensity Drug Trafficking Area, according to the Office of National Drug Control Policy. A large scale law-enforcement operation investigating narcotic trafficking in 2012 resulted in numerous indictments of criminals distributing heroin, cocaine, and pain pills throughout the area.

4. Hanford-Corcoran, Calif.
> 5-year increase in violent crime rate: 65.3%
> Violent crime per 100,000 (2007): 299.0
> Violent crime per 100,000 (2012): 494.2
> Murders per 100,000: 2.6

While the violent crime rate across the nation declined by 18% between 2007 and 2012, in the Hanford metro area it increased by more than 65%. In particular, incidents of rape increased by nearly 80% over that time, more than all but six other urban areas. Aggravated assaults had also increased by more than 80%in those five years. Because of the increase in violent crime, local officials have had trouble dealing with serious overcrowding issues in the local prisons. In 2012, law enforcement officials were forced to release prisoners early. They also complained they couldn’t properly discourage and deter criminals who knew of the prisons’ overcrowding problems.

5. Redding, Calif.
> 5-year increase in violent crime rate: 53.8%
> Violent crime per 100,000 (2007): 470.2
> Violent crime per 100,000 (2012): 723.4
> Murders per 100,000: 3.9

There were 1,298 violent crimes in the Redding metro area in 2012, up from 851 violent crimes in 2007. On a standardized, per 100,000 resident basis, violent crime rose more than 53% in that time. Additionally, property crimes rose by more than 50%, the most of any metro area reviewed, despite a nationwide 12.7% decline in such crimes during that time. According to the Redding Record Searchlight, some area residents believe that the area’s high crime rates may be related to marijuana cultivation. Officials in Shasta County — which makes up the Redding metro area — recently elected to ban outdoor growing, although the city of Redding is not included in the ban.

For the rest of the list, click here.

Read more from 24/7 Wall Street:
Ten Brands That Will Disappear in 2014
Five Unusual Alternatives to Investing in Gold
America’s Least Healthy States

TIME Federal Reserve

3 Things Janet Yellen Must Focus on as Fed Chair

Dr. Janet Yellen during her confirmation hearing of the Senate Banking, Housing and Urban Affairs Committee on Capitol Hill November 14, 2013 in Washington.
Dr. Janet Yellen during her confirmation hearing of the Senate Banking, Housing and Urban Affairs Committee on Capitol Hill November 14, 2013 in Washington. Brendan Smialowski—AFP/Getty Images

The recently-installed Fed chair gave her first testimony Tuesday morning, laying out a roadmap for the future of the U.S central bank. TIME's Rana Foroohar offers the 3 key areas that Yellen must focus on to boost the economy

This morning, Janet Yellen began her first testimony to Congress as Federal Reserve chair. As she sums up the economic health of the nation and the direction that monetary policy will take over the next couple of hours, there are three key things in her comments to focus on:

  1. Despite previous hints that the Fed would consider the U.S. labor market healthy when unemployment dropped below 6.5 percent, Yellen is still cautious about pinning an interest rate hike on the jobs number alone. Indeed, she stressed that she wanted to see more healthy inflation in the economy (right now, we’re below the target of 2 percent) before monetary policy tightens up. Which means interest rates could stay low for a long time to come – the big question, though, is whether market rates will continue to follow the Fed’s “forward guidance,” or go their own way (likely up) as investors sense that winds are changing – that’s what happened last fall, and it had a dampening effect on the mortgage markets.
  2. Yellen is all about clarity. One of her legacies is making Fed communication much clearer and more seamless than it had been, and you can see that again today in her comments – she’s telling us what’s already been done, what’s going to be done, and what might be done, in soothing tones. Again, though, the question is whether clarity and forward guidance can substitute for real ammo (meaning rate cuts and asset purchases). The Fed doesn’t have much of the latter left.
  3. She’s watching financial markets carefully. That means she’s looking for bubbles and volatility (which, per her comments about the recent turmoil in the global markets, she doesn’t believe is too worrisome yet), but she’s also keeping a close eye on banks and banking reform. She still wants to see more capital and lower leverage ratios, quicker implementation of Dodd Frank, and a tighter global framework for reform. The Fed will be hosting a meeting next week on how banking reform should be strengthened – watch this space.
TIME Jobs

It’s Not Time to Despair Over the Terrible Jobs News—Yet

Views From A Job Fair As U.S. Added 238,000 Jobs In December
Prospective job applicants wait in line to learn about job openings at the Kentucky Kingdom Amusement Park during a job fair at the nearby Crowne Plaza Hotel in Louisville, Ky., Jan. 4, 2013. Luke Sharett—Bloomberg/Getty Images

With today’s lackluster jobs report, the Labor Department is now estimating that the economy added an average of 94,000 jobs per month in December and January, which is barely enough to keep up with population growth. Combine that with recent data showing weak auto sales, construction and manufacturing activity, and there’s plenty of evidence that we have a slowing economy on our hands.

So should we be worried? Probably not just yet. Economists are quick to warn against drawing any hard conclusion from any one or two data points–it’s the long-term trends are the real gauge of the economy’s health. Furthermore, there is reason to believe that the inclement weather plaguing much of the country this winter has put a damper on economic activity, an effect that will be reversed as things start to warm up.

As Kathy Bostjancic, an economist with the Conference Board, wrote this morning, the second straight month of disappointing jobs number is cause for concern, but, “We expect that an eventual return to more normal weather conditions will allow job gains to rebound back towards their previous 180,000 – 200,000 trend pace.” Doug Duncan, Chief Economist at Fannie Mae agrees, writing, “Today’s report did not change our view that economic growth will pick up modestly this year, boosted by private sector activity.”

So why aren’t economists changing their views in the face of data which seems to show a deceleration of the recovery? First of all, the monthly estimate of job growth by the Labor Department has a very large margin of error, somewhere around 90,000 jobs per month. That means that when the Labor Department estimates that the economy added 113,000 new jobs in a month, what it’s really saying is that it’s 90% certain that the economy added between 23,000 and 203,000 jobs.

Secondly, other data, like initial jobless claims, don’t corroborate the idea that the jobs recovery is slowing down. Yesterday’s jobless claims report and recent GDP growth data show a much stronger economy than is suggested by the Labor Department jobs data. Jim O’Sullivan, Chief Economist with High Frequency Economics, wrote in a note to clients this morning that though today’s report was disappointing other data are strong enough to make him “expect a catch up in the coming months.”

In other words, it’s not quite time to freak out yet. One more bad jobs report next month, however, and it might be time to worry.

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