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Even Inequality is Unequal

Even Inequality is Unequal

Inequality. It’s on everyone’s mind these days, right? Well, an important new report on the subject shows us that the extent and implications of income disparity differ widely from one part of the world to another. That is to say, even inequality is unequal these days.


Three snapshots and three questions:

The United States is more unequal than Europe: In 1980, the top 1% of earners controlled just 10% of income on both sides of the Atlantic. Since then that share has ballooned to 20% in the US, while inching (ok, centimetering) up to just 12% in Europe.

Key question: Europe’s more progressive taxes and social safety nets dampen inequality. But does that safety net blunt the appeal of populist nationalism or does it intensify nationalists’ questions about who gets to take advantage of those benefits?

India is more unequal than China: The top 10% in India take home 55% of the country’s income. In China, the same group captures a somewhat more modest 41%. Why the difference? Rapid growth and urbanization in China have lifted hundreds of millions out of poverty since 1980, when the average Chinese and Indian had the same income. Today, nearly two-thirds of China lives in cities — two-thirds of Indians still live in the countryside.

Key question: China’s made a strong case for authoritarian development — pulling people out of poverty faster than democratic India. But can China’s authoritarian model continue to satisfy its people at higher and higher levels of income? And in the long run, does India’s democracy help or hinder sustainable growth?

Russia and the Middle East — The worst of both worlds: The average adult’s income hasn’t increased much since 1980 in Russia and the Middle East, while inequality has skyrocketed. Here’s an eye-popper: In Russia, the top 1% of earners have captured 69% of the country’s income growth since 1980.

Key question: For most petrostates, diversifying the economy means sacking entrenched elites and cronies. Lower oil prices may have increased the pressure on these governments to reform, but for the time being most of the focus is on balancing budgets rather than serious moves to diversify the economy (or the political sphere, for that matter.)

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It almost didn't happen — but here we are again. President Donald Trump and his Democratic challenger Joe Biden face off tonight in the final presidential debate of the 2020 US election campaign.

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Back in 2016, presidential candidate Donald Trump presented his vision for an "America First" foreign policy, which symbolized a radical departure from the US' longtime approach to international politics and diplomacy.

In electing Donald Trump, a political outsider, to the top job, American voters essentially gave him a mandate to follow through on these promises. So, has he?

Trade

"A continuing rape of our country."

On the 2016 campaign trail, candidate Trump said that the Trans Pacific Partnership (TPP) — a 12 country trade deal pushed by the Obama administration — would "rape" America's economy by imperiling the manufacturing sector, closing factories, and taking more jobs overseas.

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In an op-ed titled "Iran Arms Embargo Reckoning," the Wall Street Journal editorial board argues that ending the UN arms embargo on Iran was a major flaw of the 2015 nuclear deal and questions whether Biden could do anything to contain Iran at this point. Ian Bremmer and Eurasia Group's Henry Rome take out the Red Pen to explain why this discussion misrepresents the importance of the embargo and the consequences for its expiration.

So, the US presidential election is now just days away, and today's selection is focusing on a specific aspect of foreign policy that will certainly change depending on who wins in the presidential contest—namely America's approach to Iran.

You've heard me talk before about the many similarities between Trump and Biden on some international policies, like on China or on Afghanistan. But Iran is definitely not one of those. Trump hated the JCPOA, the 2015 Iranian nuclear deal, put together under the Obama administration, and he walked away from it unilaterally. Joe Biden, if he were to become president, would try to bring it back.

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Following the terrorist attacks of September 11, 2001, US President George W. Bush demanded that Afghanistan's Taliban government surrender Osama bin Laden and end support for al-Qaeda. The Taliban refused.

On October 7, US bombs began falling on Taliban forces. NATO allies quickly pledged support for the US, and US boots hit the ground in Afghanistan two weeks later.

Thus began a war, now the longest in US history, that has killed more than 3,500 coalition soldiers and 110,000 Afghans. It has cost the American taxpayer nearly $3 trillion. US allies have also made human and material sacrifices.

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