Global Economy, Economic Environment, Recession, Money & Finance, Government Finance
Facing insolvency, the Argentine government defaulted on its roughly $130 billion of foreign debt in late 2001 following a four-year economic recession. Once the economy recovered, Argentina offered holders of defaulted bonds new debt instruments via sovereign restructurings in 2005 and 2010. In order to reach elevated acceptance levels, the new bonds were governed mostly under foreign law (some in Europe and some in New York) and included a “rights upon future offers” clause—giving bondholders the possibility to participate in any eventual voluntary restructuring offering better terms. As a result, 93% of the holders of defaulted debt accepted the restructurings. The remaining 7% (the “holdouts”) have been seeking payment in full via legal venues, with some turning to the U.S. courts.
Finance, Tax, U.S. Tax, Federal Tax Rules & Regulations, U.S. Tax Policy, Global Economy, Competitiveness, Government Policy, Money & Finance, Government Finance
Patriotism has little to do with an inversion, a process whereby a company moves its headquarters to another country, but in a midterm election year, it is easier for politicians to cast corporations as deserters than address root causes -- namely, the convoluted tax code.
The success of our free enterprise system over the past century—buoyed by the tremendous capacities of the industrial sector—has helped create a far wealthier and healthier society. In the span of one century in America, per capita income grew 358%, from $9,375 (in today’s dollars) to $43,000. More affluence means better healthcare and nutrition: the average life expectancy at birth grew 44%, from 55 to 79.
Europe hits the news headlines with increasing frequency these days. In addition to the faltering economy, domestic politics supply ample doses of uncertainty, testy intra-EU relations, and mounting social tensions. For businesses exposed to the European political and economic cycles, five potential risks stand out for 2014: deflation, a gas war, a third recession, a breakdown in trade negotiations, and political gridlock.
Global Economy, Economic Environment, Recession, Money & Finance, GDP, Growth & Innovation, Research & Development
Nearly five years past the trough of the Great Recession, the U.S. economy still finds itself in a post-crisis era. Economic growth has been persistently sluggish, averaging 2.3% between 2010 and 2013. Labor productivity data and labor force participation data raise concerns about a weakening of potential U.S. economic growth.
Much is needed for improved potential and performance. Human capital and business dynamism challenges must be addressed. But the economy also clearly needs a stronger dose of both innovation investment and capital investment.
The SEC’s conflict minerals rule is on the rocks, with the D.C. Circuit Court and two sitting SEC commissioners questioning its viability. Meanwhile, the SEC insists the June 2 reporting deadline stands, creating uncertainty for manufacturers.
Via new technical assistance documents, two federal agencies advise that to avoid violating anti-discrimination laws, employers should treat everyone equally when conducting background checks. When checks are conducted through a company in the business of compiling background information, the employer must comply with procedures required by the Fair Credit Reporting Act.
Global Economy, Economic Environment, Labor, Recession
The aging baby boom generation will keep the participation rate falling for at least another decade, and some individuals’ decisions to work longer will not be enough to offset the tendency to retire. In a couple of years, firms should see widespread, tight labor markets, making young talent particularly difficult to find.
Over 10 years, the stock of U.S. direct investment in Canada grew continuously, but the U.S. share of Canadian FDI decreased. Changes to Canada’s foreign investment regime may help sustain the upward trend of U.S. investment stock by making it relatively easier for private U.S. businesses to invest in our northern neighbor.
Finance, Tax, U.S. Tax, Federal Tax Rules & Regulations, U.S. Tax Policy, Global Economy, Money & Finance, Government Finance
In early March, President Obama sent his official FY15 budget to Capitol Hill. Judging by the reception, not just from House Republicans but from a jaded White House press corps, the proposal is clearly DOA. It’s not the first proposed budget to get such a congressional snub. But considering the White House’s cavalier approach to this budget, and Congress’s inability to agree to a formal spending plan over the past decade, the budget process created almost a century ago is in desperate need of reform.