Germany’s Leadership Role in Advancing Economic Freedom: Opportunity for …

Co-authored by Natasha Srdoc, co-founder, Adriatic Institute for Public Policy and International Leaders Summit, Becky Norton-Dunlop, vice president of The Heritage Foundation and former director of the White House Cabinet Office during President Ronald Reagan and Dr. Stefan Gehrold, head of European Office Brussels, Konrad Adenauer Foundation

Leaders at the Brussels dinner event hosted by the Konrad Adenauer Foundation, December 2014

The topics of strengthening the transatlantic partnership and advancing economic freedom were brought to the forefront, when we gathered in Brussels at a dinner event of the Konrad Adenauer Foundation in December 2014. At this meeting, leading politicians from Brussels as well as elected members of Germanys national parliament reviewed the trends highlighted by The Index of Economic Freedom which was co-published by The Heritage Foundation and The Wall Street Journal.

The discussed analysis included both selected EU member states such as Estonia or Germany and non-EU member states such as Switzerland, Ukraine and the United States. Recognizable trends appeared when comparing Western democracies to former communist countries. On the one hand Eastern European countries generally achieved higher scores in fiscal freedom due to the implementation of low flat tax pro-growth policies. Western European countries except Italy but including Estonia, on the other hand, scored much higher in the rule of law category, which encompasses protection of property rights and freedom from corruption.

Results of the Analysis

The annual Index of Economic Freedom report rates countries around the world by assessing ten categories of economic freedom. The Index has proven to be a useful tool for investors, the respective nations economic reformers, policymakers, academics, journalists, teachers, scholars and voters.

The authors of the Index of Economic Freedom clarified that The highest forms of economic freedom should provide an absolute right of property ownership, full freedom of movement for labor, capital and goods, and an absolute absence of coercion or constraint of economic activity beyond that which is necessary for the protection and maintenance of liberty itself.

When analyzing economic freedom, the authors observe the critical relationship between individuals and the government. In general, state action or government control that interferes with individual autonomy limits economic freedom. The Index of Economic Freedom demonstrates that a higher level of economic freedom leads to higher GDP per capita, higher living standard, reduces poverty, leads to more education opportunities, better health care, improves environmental performance, and promotes effective and democratic governance.

Decades of experience and research in economic development and transition economies provide a clear template of principles needed to achieve higher levels of economic growth. The Index of Economic Freedom classifies these principles in four broad categories over which governments typically exercise some policy control: (a) rule of law, (b) government size, (c) regulatory efficiency and (d) open markets.

These categories incorporate 10 specific components of economic freedom. Each economy rated in the Index of Economic Freedom receives an overall economic freedom score based on the weighted average of 10 economic freedoms, each graded on a scale from 0 to 100, with 100 being the best. The ten economic freedoms, which are equally weighted, are: Property rights, freedom from corruption, fiscal freedom, government spending, business freedom, labor freedom, monetary freedom, trade freedom, investment freedom and financial freedom.

The worlds top-5 performing economies in the 2015 Index of Economic Freedom are: Hong Kong, Singapore, New Zealand, Australia and Switzerland. Three European countries were rated among the top ten: Switzerland (5th), Estonia (8th) and Ireland (9th). With a score of 80.5 points, Switzerland is the only European country whose economy is rated as free.

Becky Norton-Dunlop, vice president of The Heritage Foundation and former director of the White House Cabinet Office during President Ronald Reagan

2015 Index of Economic Freedom Findings for Germany

The country achieved an overall score of 73.8 in the 2015 Index of Economic Freedom, making it a mostly free economy. By improving its overall score by 0.4 points year-on-year, Germany moved from 8th to 7th place in Europes region and from 18th to 16th place in the world ranking.

Germanys improved scores of labor freedom (+4.8), government spending (+1.9), monetary freedom (+0.7), and trade freedom (+0.2) outweighed worsened scores of freedom from corruption (-2.1), business freedom (-1.7), and fiscal freedom (-0.4).

Out of ten categories of economic freedom Germany is rated as economically free in five areas: property rights, business freedom, monetary freedom, trade freedom and investment freedom.

Germany achieved its lowest scores in the category of government spending, which is rated as repressed, and in labor freedom, which is rated as mostly unfree and is on the verge of the repressed category. Although rated as moderately free, Germanys fiscal freedom places the country in the 168th place out of 178 countries ranked globally. This shows that Germany is lagging significantly behind in pursuing a pro-growth tax policy.

In order to increase economic freedom for its citizens, Germany needs to reduce government spending, introduce more flexibility in the labor market, significantly lower its top marginal personal income tax rate and decrease the overall tax burden for its citizens.

Germanys government budget surplus which – according to Destatis – totaled EUR18 billion ($20.4 billion) in 2014, provides space for Germany to reduce top corporate and personal income tax rates and thus, generate higher economic growth. As incomes rise, this would lead to nominally higher tax revenues, yet lower tax burden.

Dr. Stefan Gehrold, head of European Office Brussels, Konrad Adenauer Foundation

Encouraging Economic Freedom in South East Europe

Since Germany is Europes largest economy, the most significant net contributor to the EU budget, and an export-driven economy, it is in its best interest to encourage economic freedom in other EU member states as well as in those aspiring to join the European Union.

This conclusion becomes even more significant as European countries with the lowest levels of economic freedom, such as Greece, received significant German taxpayer aid (EUR93 billion euro in guarantees). The recent member state Croatia is also heavily dependent on EU taxpayers aid. Therefore, advancing economic freedom in candidate countries would benefit EU member state taxpayers as well as citizens of accession nations.

In better understanding the corruption in the region, a study by Washington, DC-based Global Financial Integrity reveals that over $111.6 billion in illicit financial outflows via crime, corruption and tax evasion left the Balkans during 2001-2010 and was sent to financial institutions in Austria, Liechtenstein and beyond. The amount of illicit financial outflows equals in the case of Montenegro for example 138% of its GDP while the new EU member state Croatia features illicit financial outflow of 25% of its GDP.

Europes south is known for high government expenditures, opaque public finances and found repressed in the Indexs categories of freedom from corruption and property rights. These countries can learn from Estonias transformation led by Mart Laar and Slovakias reforms pursued by Dzurindas government. Estonia and Slovakia significantly increased economic freedom for their citizens. Member states with a well-functioning judiciary and administration should continue their assistance and support principled reformers in their quest to establish the rule of law.

Rather than continuing to transfer taxpayer money to weak rule of law states, donor countries should help advance economic freedom across the region.

Natasha Srdoc, co-founder, Adriatic Institute for Public Policy and International Leaders Summit

Conclusion

All 10 categories of economic freedom are within the domain of government policy. The combination of legislative framework and government policies can be pursued to increase economic freedom of each countrys citizens. According to the methodology of the Index of Economic Freedom a country can be categorized as completely free, if the following conditions are fulfilled:

  1. Establish an independent judiciary and the rule of law in order to protect property rights.
  2. Shine a bright light on corrupt practices and then eliminate them.
  3. Reduce taxes.
  4. Cut government spending.
  5. Simplify the process to register, operate and close a business.
  6. Offer a labor market based on a flexible regulatory framework.
  7. Maintain price stability through low inflation and allow market pricing to prevail.
  8. Eliminate tariffs and non-tariff barriers.
  9. Enable domestic and foreign actors to invest in all sectors without barriers.
  10. Enable greater competition of the financial sector and encourage capital market development by minimizing governmental interferences.

One of the most important prerequisites for achieving higher level of each of the ten economic freedoms is the rule of law. The law has to apply in the same way to all citizens at all times. No individual, no organization and no company should be favored. Furthermore, corruption has to be punished.

The Index illustrates that it is essential to create opportunities for all and favoritism for none. If one succeeds in increasing economic freedom, it will also alleviate significant brain drain. Therefore, advancing economic freedom is a worthy goal for political leaders.

Louisiana Spotlight: Colleges, roadwork get modest gains from the latest …

But they achieved smaller victories than they sought when the session ended this month, as their larger proposals got sidetracked by the states continued budget woes.

Lawmakers cant seem to have the broader conversations needed about long-term planning for priorities like higher education and infrastructure because they keep careening from financial crisis to financial crisis.

Higher education officials likely wont dwell on the disappointments of a legislative session in which they were threatened, with state financing cuts of 80 percent, but ended with a standstill budget that has increases for some campuses in the fiscal year that begins July 1.

That victory was hailed by university system presidents and college leaders around Louisiana. However, while they got the most important win, higher education still fell short of its repeated push for more financial freedom.

Grad’s essay on feeding cancer patients could net student loan payoff

SEATTLE – A local woman overwhelmed with student debt has a chance to pay it all off, thanks to a nationwide writing competition.

Its stressful to think my fate hangs in everybody elses votes, says Cacky Calderon. The Seattle native wrote dozens of college papers at the University of Pennsylvania, and Northwestern University, where she recently earned her law and masters degree at the same time.

Calderon also walked away with $300,000 in government and student loans.

Which breaks down to $3,000 a month in loan payments for 15 years, she says.

Calderon refinanced her loans with SoFi, and the lending company is hosting a national competition to pay off someones student loans. Calderon is one of 20 finalists out of the 2,400 people who applied.

I was really excited to apply to the contest, and I got to tell a very personal story about my mom, she said.

Calderon lost her mother Wanda to stomach cancer several years ago. The 31-year-old says she would use her financial freedom to start a company focused on healthy food for cancer patients. She plans to call it Palate Love Care.

I have firsthand experience with how hard it is feeding cancer patients when theyre sick, because their taste buds change so much, she said.

The winner is chosen by national votes, and Calderon has 1,800 – just enough to crack the top seven.

Calderon hopes her hometown is behind her.

I would love if you would take the time to read my story, and share it with your friends, and hopefully vote! said Calderon.

The contest closes on Tuesday, June 23rd. Vote for Cacky by visiting the SoFi website.

Why Uber Drivers Are Better Off As Independent Contractors

It seems everyone is talking about whether ride-share drivers should be classified as employees or independent contractors thanks to the California Labor Commissions recent ruling in the case of San Francisco Uber driver Barbara Ann Berwick. While the decision handed down by the Commission only applies to this one person, it could be a game changer in the long run, possibly leading to the reclassification of Uber drivers as employees.

I have been an Uber driver in Los Angeles for the past nine months and to be honest, the thought of becoming an employee of the company does not appeal to me. Ive been down that road before, and after years of being a corporate drone, I enjoy being an independent contractor. It allows me the opportunity to generate income without draining all of my energy, leaving me with enough free time to pursue other endeavors.

Would being classified as an employee bring some perks such as reimbursements of monies spent on gas and tolls, accruing vacation time, and receiving medical benefits? Perhaps, but thats not always a guarantee. I recently worked for a production company that kept me on the freelance payroll, which is an employers clever way of making sure its employees do not receive any of the aforementioned perks. However, I still received the same amount of headaches and frustrations that come with working a 40-hour workweek. So no, you dont always reap rewards from being deemed an employee.

One of the main components of Uber driving that I appreciate is that I do it on my terms. I dont have to submit a work schedule, or even worse, have one drawn up for me. Im also not required to adhere to a dress code. Dont get me wrong. Its not like Im driving around wearing beach bum couture, but at least I dont have to wear black Dockers and a polyester-blend polo with a U embroidered on the chest.

Employee classification could compromise the flexibility that I have come to know and love.

We seem to be living in an age of entitlement. People want guarantees when they embark on a new venture, especially a business-related one. The perception that ride-share drivers are owed money for start-up costs or investing in an entrepreneurial effort seems a bit off from my point of view. When we begin the application process we are fully aware that there are no assurances regarding income. Of course, most of us at some point have been regaled with stories of Uber and Lyft drivers who bring home upwards of $90,000 a year. Those urban legend stories are what inspire us to throw out hats into the ride-sharing arena. We have dollar signs in our eyes as we wait for the email that informs us we have been approved to drive.

Then we hit the road and within the first few weeks we realize that the expectation doesnt match up to the reality. At that point there are two options — stop driving or start thinking about the best way to maximize income as an Uber driver. In my case, I tried to figure out the hours when demand is highest and what neighborhoods are more densely populated with ride-share requesters. It took some trial and error, but I now have a pretty good grasp on what Im doing. And while there are no guarantees of where the day will take me, if I wind up in an unfamiliar area, I do not drive around aimlessly burning up gas and adding unnecessary mileage to my car. Instead, I find the nearest Starbucks, pull over, and enjoy a cup of coffee while I keep the drivers app open and wait for my next request.

There is more to being an Uber driving than just having the ability to operate an automobile safely and effectively. It also requires a certain amount of strategic planning. Thats what it takes to be successful as an independent contractor. I have figured out how to make the most of my time on the road. I save my ride-share related receipts, such as gas fill-ups and car washes, because as any savvy businessperson knows, all those expenses are legitimate deductions during income tax preparation.

The bottom line is that Ubers business model works just fine, and if it aint broke, dont fix it. The sharing economy that so many people are weary of is redefining America and giving people an opportunity to set the parameters for how they do business while carving out their own financial freedom.

This is the new America. Give me life, liberty and the pursuit of a Form 1099.

Stock Rating Update on J.G. Wentworth Company (The) (NYSE:JGW)

The sell-side brokers covering the equity also have issued projected stock price objectives on the company. The one year projections range from a high of $13 to the low of $10.5. The mean price target of all analysts taken into consideration by Zacks is $11.625.

Earnings at a Glance

Near term, Wall Street brokerage analysts are expecting JG Wentworth Company (The) (NYSE:JGW) to report earnings of $0.43 per share for the fiscal quarter ending on 2015-06-30. This is the calculated earnings per share estimate from the 4 polled by Zacks. In taking a look further ahead three to five years, analysts have a long-term growth EPS estimate of $N/A. This number is the best estimate for sales and earnings over that time frame.

Stock holders will be watching when JG Wentworth Company (The) reports their next earnings results on 2015-08-13. Most recently the firm announced earnings per share of $0.27 for the quarter which ended on 2015-03-31. Compared to analyst expectations just before the announcement, the actual results were $-0.06 away from that number, or a surprise factor of -18.18%.

JGWPT Holdings Inc. is a direct response marketer that provides liquidity to its customers by purchasing structured settlement, annuity and lottery payment streams, as well as interests in the proceeds of legal claims, in the United States. The Company act as an intermediary that identifies, underwrites and purchases individual payment streams from its customers, aggregates those payment streams and then finances them in the institutional market at discount rates below its cost to purchase. The Company operates two brands, JG Wentworth and Peachtree. Its products include structured settlements, annuities, lotteries and pre-settlement funding.

Stock Update (NYSE:MET): MetLife Amends Tender Offer for Its Series B …

[Business Wire] MetLife, Inc. announced today an amendment to the tender offer for its 6.500% Non-Cumulative Preferred Stock, Series B , par value $0.01 per share and liquidation preference $25.00 per share .
Read more on this.

MetLife, Inc. (MET), valued at $62.23B, opened this morning at $55.97.

Shares have traded today between $55.50 and $56.21 per share and has traded between $46.10 and $57.57 over the past 12 months.

MET shares are currently priced at 9.52x this years forecasted earnings, which makes them relatively inexpensive compared to the industrys 15.51x forward p/e ratio.

And for dividend hunters, the company pays shareholders $1.50 per share annually in dividends, yielding 2.70%.

According to a consensus of 19 analysts, the earnings estimate of $1.48 per share would be $0.09 better than the year-ago quarter and a $0.03 sequential increase. What we find to be interesting is that the full-year EPS estimate of $5.89 is a $0.15 better when compared to the previous years annual results.

The quarterly earnings estimate is predicated on a consensus revenue forecast of $17.69 Billion. If reported, that would be a 0.62% decrease over the year-ago quarter.

Recently, Piper Jaffray Initiated MET at Neutral (Jun 2, 2015). Previously, Goldman Initiated MET at to Neutral.

The average price target for MET shares by the analysts covering it is $58.21, which is 4.00% above where the stock opened.

Summary (NYSE:MET): MetLife, Inc. provides life insurance, annuities, employee benefits, and asset management products in the United States, Japan, Latin America, Asia, Europe, and the Middle East. It operates in six segments: Retail; Group, Voluntary amp; Worksite Benefits; Corporate Benefit Funding; Latin America; Asia; and Europe, the Middle East and Africa. The company provides variable, universal, term, and whole life products; individual disability income products; personal lines property and casualty insurance, including private passenger automobile, homeowners, and personal excess liability insurance; and variable and fixed annuities for asset accumulation and distribution needs, as well as mutual funds and other securities products. It also offers group insurance products, such as variable, universal, and term life products; dental, group short- and long-term disability, and accidental death and dismemberment coverages; and voluntary and worksite products consisting of personal lines property and casualty insurance, as well as LTC, prepaid legal plans, and critical illness products. In addition, the company provides annuity and investment products comprising guaranteed interest products and other stable value products, income annuities, and separate account contracts for the investment management of defined benefit and defined contribution plan assets; and structured settlements and products to fund postretirement benefits and company-, bank- or trust-owned life insurance, as well as health insurance, group medical, credit insurance, endowment, retirement, and savings products. It serves individuals and corporations, as well as other institutions and their employees. The company sells its products through sales forces, third-party organizations, independent agents, and property and casualty specialists, as well as through career agency, bancassurance, direct marketing, brokerage, and e-commerce channels. MetLife, Inc. was founded in 1863 and is based in New York, New York.

FINANCIAL FOCUS

Its almost the Fourth of July time for fireworks, picnics and a reflection on all the liberties we possess in this country. But if youre going to enjoy the freedom to do the things you want, especially during your retirement years, youll want to take the steps necessary to achieve your own Financial Independence Day.

Here are a few suggestions for helping you reach that goal:

Liberate yourself from debt. For most of us, a certain amount of debt is unavoidable. But the greater control you can gain over your debts, the better off you will be, because any dollars not spent in paying debts can be used to save and invest for your future. So look for ways to cut down on your spending and think about postponing some purchases until you can pay for them in cash. It may not be easy, but its possible. And by putting this found money to work immediately in quality investments, you may motivate yourself to keep a lid on your debt level.

Unlock the power of time. Albert Einstein once said, The most powerful force in the universe is compound interest. Einstein, who knew a thing or two about the nature of time, clearly recognized its importance in investing. In fact, as an investor, time may be your greatest ally. The more years in which you invest, the more dollars youll put in, and the longer youll have for your investments to potentially grow. Even if youre just starting out in your career and can only invest a small amount each month, youll be starting to accumulate the amount youll eventually need to enjoy the retirement lifestyle youve envisioned.

Release your investments growth potential. To attain financial freedom during your retirement years, you will need to invest for growth its that simple. So include an appropriate amount of growth-oriented vehicles in your overall investment mix. Ultimately, this mix should be based on your risk tolerance, time horizon and specific long-term goals.

Free your investments from clustering. In the investment world, as in many other arenas of life, you can have too much of a good thing. For example, if you own a particular investment, such as a stock, that has done well, you might think that its a good idea to own more of the same type of stock. But when investing, duplication can be dangerous, because if a market downturn affects one asset class particularly hard, and much of your portfolio is tied up in that asset class, you could take a big hit. Instead of clustering your dollars around a single asset or two, you could diversify your holdings by owning a mix of stocks, bonds, government securities and other vehicles. While diversification can potentially help you reduce the impact of volatility on your holdings, a diversified portfolio cant guarantee a profit or protect you from loss.

Achieving any type of freedom, in any kind of endeavor, takes time and effort. Thats certainly the case with financial freedom you will need to consistently make the right moves, over a period of many years, before you can finally declare your fiscal independence. But once you reach that point, you will likely conclude that your diligence and dedication were well worth it.

(This article was written by Edward Jones for use by Wilbur F. Yates, an Edward Jones Financial Advisor with offices at 619 E. Kay St., Kilgore)

Kawempe slum single mothers equipped with business skills

By Agnes Kyotalengerire

A total of 200 single mothers from Kawempe slums have been equipped with entrepreneur skills to under the Slum Women Economic Empowerment Program (SWEEP).

We have empowered the young women with critical practical business skills in catering, baking, hairdressing, pedicure, manicure, art and crafts to enable them start income generating activities so that they gain financial freedom, said Rehmah Kasule, the founder Century Enterprise Development Agency (CEDA) International.

Kasule was speaking during a graduation ceremony at Young Engaged Program (YEP) center in Kawempe last week.

Professor Wasswa Balunwya, the principal MUBS (Extreme left) awarding certificates. Looking on is Rehmah Kasule center), the brain child of the SWEEP. Photo/Agnes Kyotalengerire

During the ceremony over 200 marginalized young women aged between 15 to 30 years from the slums of Kawempe graduated after a 12 months mentoring and training program under the Slum Women Economic Empowerment Program.

The principal Makerere Business school; Professor Waswa Balunwya urged the women to remain focused and aim at making their future better.

Some of the single mothers attending the graduation ceremony with their children. Photo/Agnes Kyotalengerire

Forget about the mistakes you made while growing up and focus on how you progress in life, Balunywa said.

He said for the women to be efficient in their businesses they should embrace technology to connect them to their markets.

Kasule said the programme funded by the UN-HABITAT for Human-Urban Youth Fund targeted the slum women because they have inadequate guidance support systems in the community and limited access to role models to inspire and mentor them.

Graduands cutting cake with Professor Wasswa Balunwya, the principal MUBS and Rehmah Kasule (center) , the brain child of the SWEEP. Photo/Agnes Kyotalengerire

In addition, the women have few opportunities for positive engagement coupled with accompanying feelings of humiliation in society because they are single mothers.

The 2009 Living in Kampala Slum report by John Paul II Justice Peace Center indicates that the population in Kampala slums with Kawempe inclusive is rapidly increasing, with women carrying the burden of economic responsibility for their families and living under severe financial constraints.

Nelly Ssali exhibiting some of her cloth pieces during the ceremony. Photo/Agnes Kyotalengerire

This has escalated the plight of single mothers causing social stigma and economic exclusion, poverty, unemployment, gender based violence, human trafficking and related sexual exploitation.

In this regard, the Uganda Bureau of statistics report 2010 shows that 46% of the women in slums are unpaid workers employed at the lowest levels of the value chain where they earn less than $1 a day.

As part of the graduation ceremony activities, five women who emerged winners of the SWEEP business plan completion won grants of between Sh210, 000 to Sh500, 000.

Aisha Nakitende, a single mother of three and resident of Lugoba Kawempe, the first runner up of the business plan competition who won sh450,000, said through the skills acquired from the training , she set up a community initiative where she teaches people how to observe proper hygiene and sanitation.

Florence Luyiga, 22 the winner of the competition said the programme had equipped her with various entrepreneural skills.

Luyiga hopes to use the sh500, 000 to stock materials for her already running business.

New pension rules used by 60000 people

About 60,000 people have used new pension rules designed to give greater financial freedom in retirement, Chancellor George Osborne has said.

He told MPs in the Commons that more than £1bn had already been transferred out of pensions.

In theory, the new rules give pensioners the ability to withdraw money from their pension pots to do with as they wish.

But some pension firms are not offering full freedom to their customers.

Under the government changes introduced in April, those over the age of 55 have the ability to withdraw as much money as they like from their pension savings, subject to income tax.