The Gaurdian - Deutsche Bank’s pandemic solution? To make you pay for your privilege

The financial institution’s report has sparked backlash for saying that remote workers should be taxed for the good of society.

Deutsche Bank wants you to check your privilege

Deutsche Bank, which seems to be the financial institute of choice for money-launderers and registered sex offenders, has a few thoughts on making the world a fairer place. It’s simple really: people should pay for the privilege of working at home. A new report by economists from Deutsche Bank proposes that people pay a 5% tax for each day they choose to work remotely after the pandemic. This money, they suggest, could go to low-income workers unable to work remotely.

“[R]emote workers are contributing less to the infrastructure of the economy whilst still receiving its benefits,” Deutsche Bank strategist Luke Templeman explained in the report.

“Quite simply, our economic system is not set up to cope with people who can disconnect themselves from face-to-face society.”

What exactly do they mean by ‘our economic system’? Do they, perchance, happen to mean their own balance sheets? Funnily enough, Deutsche Bank just happens to be the top lender in US commercial real estate finance. It’s almost like they’ve got a vested interest in punishing people for not going into an office.

The Deutsche Bank report, which came out on Tuesday, has gone viral and sparked a backlash for obvious reasons. People do not take kindly to a bank lecturing them on how they ought to pay more tax for the good of society. Particularly when the bank in question financed the building of Auschwitz; contributed to the 2008 financial crisis; was fined record amounts for its role in rigging benchmark interest rates; was embroiled in a $20bn Russian money-laundering scheme; did business with Donald Trump and Jeffrey Epstein; and was fined over allegations that it hired unqualified relatives of Russian and Chinese government officials to win business. And that’s just to name a few of the scandals Deutsche Bank has been involved with.

To be fair, while Deutsche Bank’s report was laughably out of touch, there were some important points buried within it. The report is right to note that a shift to remote working after the pandemic has the potential to disproportionately benefit the affluent, and widen the gap between the rich and the poor. But you know what a very simple solution to that is? Taxing rich people and corporations more. The solution is not, as Deutsche Bank suggests, making someone who earns £35,000 pay around £7 a day for the privilege of working from home. The solution is not stigmatizing remote work and penalizing anyone who chooses to do it: a policy which will inevitably end up hurting women, who are still the main caregivers, the most.

What’s more, a shift to normalized remote working doesn’t necessarily have to exacerbate inequality. Indeed, it could help radically reduce it. If living in an expensive city is no longer a requirement for a good job, the talent pool that companies have access to widens considerably. Remote working could also help close the gender gap: according to a 2019 survey, 31% of women who took a career break after having kids said they didn’t want to but had to because of a lack of workplace flexibility. Additional studies show that flexible working allows mothers to stay in employment after the birth of their first child.

The pandemic “is a portal”, Arundhati Roy wrote in a beautiful essay earlier this year. “We can choose to walk through it, dragging the carcasses of our prejudice and hatred, our avarice, our data banks and dead ideas, our dead rivers and smoky skies behind us. Or we can walk through lightly, with little luggage, ready to imagine another world. And ready to fight for it.”

We have an exciting opportunity at the moment to reimagine the world of work. But it is becoming very clear that we are going to have to fight very hard against behemoths like Deutsche Bank who can’t wait to get back to business as usual.

Britney Spears’ dad still in control of every aspect of her life

A US court rejected the 38-year-old singer’s attempt to have her father removed from his role in the conservatorship that has controlled Spears’s life for the last 12 years. Spears has said she is afraid of her dad and will not perform again so long as he remains in charge of her life. There have been a lot of jokes and memes about the #FreeBritney movement but there is nothing funny about the situation the singer is in; she has been stripped of basically all her civil rights. As the ACLU has noted, there are far less draconian alternatives to conservatorships that can help vulnerable people.

Soccer star becomes first woman to coach a men’s pro team in Egypt

Faiza Heidar, who captained Egypt’s national women’s team, has been signed up by the fourth division side Ideal Goldi.

Mary Wollstonecraft statue causes a kerfuffle

The author of A Vindication of the Rights of Woman (1792) has finally got a statue in her honour. However, the sculpture, by artist Maggi Hambling, is proving as controversial as Wollstonecraft’s own work was. Some people are taking issue with the fact she is depicted as tiny, naked and very toned. Personally, I’m just glad it’s got people talking and discussing Wollstonecraft’s work.

There’s a new (lesbian) sheriff in town

Charmaine McGuffey, lost her job in the Hamilton county, Ohio, sheriff’s department three years ago; she claims one reason she was fired is because she is openly gay. This year she got her revenge: running against the guy who fired her and winning. She’ll be the sheriff now.

Emily Harrington makes history with El Capitan climb

The climber is the fourth woman to ever free-climb El Capitan in Yosemite national park and the first to do so using the Golden Gate route. As Outside magazine noted: “A shocking number of news organizations mistakenly characterized her as being the first woman ever to free climb El Capitan in a day, not just Golden Gate”, erasing the achievements of the women before her.

The week in poultry-archy

Three men have been fined hefty sums, sentenced to two years’ probation, and banned from Yellowstone national park for culinary crimes. They decided to prepare a very rustic picnic and boil a chicken (a dead chicken, to be clear) in the parks’ hot springs. Innovative but illegal. The punishment seems a little over the top: two of the men spent a couple of nights in jail meaning they’ve done more jail time for a poorly considered picnic than the Sackler family have for helping to cause an opioid epidemic that killed hundreds of thousands of Americans.

by Arwa Mahdawi

BBC News - Asian trade mega-pact set to be signed this weekend

 Asian leaders are due to sign a mammoth trade deal this weekend that has been nearly a decade in the making.

It includes the ten members of the Association of Southeast Asian Nations (Asean), plus China, Japan, South Korea, Australia and New Zealand.

The members make up nearly a third of the world's population and account for 29% of global gross domestic product.

The new free trade zone will be bigger than both the US-Mexico-Canada Agreement and the European Union.

India was also part of the negotiations, but pulled out last year, over concerns that lower tariffs could hurt local producers.

The Regional Comprehensive Economic Partnership (RCEP) is expected to be signed on the side lines of the mostly-online Asean conference this weekend.

What does it do?

RCEP is expected to eliminate a range of tariffs on imports within 20 years.

It also includes provisions on intellectual property, telecommunications, financial services, e-commerce and professional services.

But it's possible the new "rules of origin" - which officially define where a product comes from - will have the biggest impact.

Already many member states have free trade agreements (FTA) with each other, but there are limitations.

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"The existing FTAs can be very complicated to use compared to RCEP," said Deborah Elms from the Asian Trade Centre.

Businesses with global supply chains might face tariffs even within an FTA because their products contain components that are made elsewhere.

A product made in Indonesia that contains Australian parts, for example, might face tariffs elsewhere in the Asean free trade zone.

Under RCEP, parts from any member nation would be treated equally, which might give companies in RCEP countries an incentive to look within the trade region for suppliers.

'Low ambition'

Although the RCEP was an Asean initiative, it is regarded by many as a China-backed alternative to the Trans-Pacific Partnership (TPP), a proposed deal that excluded China but included many Asian countries.

Twelve member states signed the TPP in 2016 before the the US President Donald Trump withdrew the US in 2017.

The remaining members went on to form the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Although it includes fewer countries, the CPTPP cut tariffs further and included provisions on labour and the environment than the RCEP.

Speaking at an online event at the Peterson Institute of International Affairs, Australia's former Prime Minister Malcolm Turnbull said the new deal was old-fashioned.

"There'll be some hoopla about the signing and the entry into force of RCEP. I mean RCEP is a really low ambition trade deal. We shouldn't kid ourselves," said Mr Turnbull, who signed Australia up to the TPP.

Co-operation and loathing

RCEP brings together countries that have often had prickly diplomatic relationships - notably China and Japan.

Both Australia and China will also sign onto the deal, despite reports that China might boycott some Australian imports over a variety of political differences.

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"You can both co-operate with someone and just loathe them, even as a human being. RCEP has done an impressive job of separating itself from other things," said Ms Elms.

International trade was far lower on the agenda in this year's US election, and incoming president Joe Biden has said relatively little about whether his trade policy will change significantly or if he will reconsider entry into the TPP.

BBC News - UK out of recession but growth slows in September

 The UK's economy rebounded from recession in July to September, but growth showed signs of slowing down at the end of the three months.

Growth of 15.5% in July to September was the biggest on record, said the Office for National Statistics (ONS).

It came after a six-month slump induced by the first coronavirus lockdown.

However, growth was weaker in September than in the preceding months, while the country's economy is still 8.2% smaller than before the virus struck.

The economy had shrunk in the first three months of the year and then contracted by a record 19.8% in the April-to-June period. Two consecutive three-month periods of contraction are generally defined as a recession.

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Despite the rebound in July to September, analysts warned that the economy was likely to shrink again in the final three months of the year because of the impact of renewed lockdowns in different parts of the country.

A second lockdown began in England on 5 November and is due to finish on 2 December.

Thomas Pugh, UK economist at Capital Economics, said that in view of what had happened since, the figures felt "not just like old news, but like ancient news".

"We already know that GDP will struggle to rise in October as tighter restrictions were imposed and that it will take a hammering in November as the effects of the second Covid-19 lockdown are felt."

What is happening in the economy?

In September, growth was 1.1%, marking the fifth consecutive month of expansion. However, that was weaker than the levels seen in previous months.

Jonathan Athow, deputy national statistician for economic statistics at the ONS, said all sectors of the economy continued to recover, albeit more slowly.

"The return of children to school boosted activity in the education sector. Housebuilding also continued to recover, while business strengthened for lawyers and accountants after a poor August.

"However, pubs and restaurants saw less business after the Eat Out to Help Out scheme ended and accommodation saw less business after a successful summer."

In another sign of the impact of the pandemic on the economy, figures released on Tuesday showed the unemployment rate rose to 4.8% in the three months to September, up from 4.5%.

The number of people out of work rose by 243,000 in the three-month period, the largest increase since May 2009.

How are businesses coping?

Welsh food packaging firm Transcend Packaging saw its sales collapse by half during the depths of the first lockdown.

But boss Lorenzo Angelucci says they have are now higher than they were at the start of the year - partly because the firm has started making personal protective equipment which kept sales buoyant.

"Obviously the beginning of the pandemic was pretty tough," he told the BBC. "It forced us to be creative and come up with other types of products."

The firm, which supplies clients such as McDonald's, expects to benefit in coming months as takeaway services remain open.

"Food packaging is by default safer in this situation, because people still need to eat," he said. "But the economy itself, I don't think will be in a very nice position for a long time."

Should we be cheered or worried?

Record growth for the UK economy in July to September is a welcome partial reverse from the record fall seen in the spring. It means that lights are going back on in the economy that were switched off in the first lockdown.

It is, though, catch-up not recovery. It is rebound more than it is established bounce-back. The economy is still nearly a tenth smaller than it was before the pandemic struck.

More than that, the data is a rear-view mirror on the economy. It reflects a period of falling infections, the boost to growth and to footfall from the chancellor's Eat Out to Help Out scheme. It shows the rate of this rebound slowing in September, even as there was a boost from the return of school pupils.

Since then, there has obviously been a further, though less extensive shutdown, but both the Bank of England and the Treasury have boosted the economy. The great bit of sunlight on the horizon, however, is the vaccine. That will be the biggest economic stimulus imaginable.

What has the government got to say?

In a BBC interview, Chancellor Rishi Sunak said it was going to be "a difficult winter", but there were "reasons for cautious optimism".

"Our priority remains to protect as many jobs as possible," he said, adding that the extension of the furlough scheme and the creation of the Kickstart job scheme for young people would help to do this.

He maintained that England would be able to exit its second lockdown as planned on 2 December.

"I am very confident that the measures we have put in place will do the job that we need them to do," he said.

What is GDP?

Gross domestic product (GDP) is the sum (measured in pounds) of the value of goods and services produced in the economy.

But the measurement most people focus on is the percentage change - the growth of the country's economy over a period of time, typically a quarter (three months) or a year.

If the GDP measure is up on the previous three months, the economy is growing. That generally means more wealth and more new jobs.

If it is negative, the economy is shrinking.

What more can economists tell us?

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the economy was likely to shrink by about 0.5% in the final three months of the year.

"On a monthly basis, it probably won't recover to September's level until the spring, when it should be possible for Covid-19 restrictions to be sustainably relaxed," he added.

Looking further ahead, Sarah Hewin, chief economist at Standard Chartered bank, told the BBC there was "uncertainty" about the first three months of 2021, "particularly if we have trade disruptions related to Brexit as the transition period comes to an end at the end of the year".

 

What difference could a vaccine make to the economy?

Bank of England governor Andrew Bailey welcomed news that a possible Covid-19 vaccine had performed well in clinical trials: "It's encouraging for individuals, it's encouraging for businesses, and it's encouraging for the economy."

"The sooner that way out of Covid comes into effect, the more businesses are likely to survive in financial terms," he told the Financial Times in a video interview.

Mr Bailey said the news was "broadly consistent" with the Bank's latest set of economic forecasts, which assumed that the pandemic would start to recede after the winter as better treatments arrived.

But the news "reduces the huge level of uncertainty that we have in the forecasts", he added.

BBC News - Asian markets rally on Covid-19 vaccine hopes

 Asian stock markets have moved higher on good news about an effective vaccine for Covid-19

Japan's Nikkei 225 index opened more than 1.5% higher, to reach its highest level in almost 30 years.

Hong Kong's Hang Seng opened 1.8% higher while in China, the Shanghai Composite, also saw gains in morning trading.

Stock markets in Singapore, South Korea and Australia were also in positive territory.

"Japanese stocks are seen rallying for the sixth straight session, after the US market rocketed on news that a vaccine Pfizer and BioNTech are developing was 90% effective in protecting against Covid-19 infections," said a spokesman for Okasan Online Securities.

"It's big news amid worries about the virus infection spreading in Europe and in the US."

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In Japan, shares in carmaker Toyota and fashion retailer Uniqlo were both up by more than 2% on Tuesday.

Although gaming companies saw their shares prices head lower, with the possibility of an end to lockdowns prompting a sell-off.

Nintendo was down more than 5%, while Sony slipped by as much as 2%.

Global rally

On Wall Street on Monday, the Dow Jones Industrial Average rose 3%, while London's FTSE 100 jumped nearly 5%.

"Preliminary trials have caused markets to come alive, not that they needed much encouragement," Chris Weston, Pepperstone's Melbourne-based head of research, wrote in a note.

Markets were already building on gains from the election of Joe Biden as US president.

Pfizer said its Covid-19 vaccine, developed with German partner BioNTech, was more than 90% effective in preventing infection.

Pfizer and BioNTech said they had found no serious safety concerns yet and expected a regulatory decision as soon as December.

Tricky and expensive

While investors are in a buoyant mood, some observers are calling for caution.

"We're far from being out of the woods, yet," said Agathe Demarais, global forecasting director at the Economist Intelligence Unit (EIU).

"There will likely be bottlenecks around the actual manufacturing processes of the vaccine, and getting the jab rolled out across the world will be both tricky, and expensive," she added.

There are also concerns as to whether the vaccine continues to work after one year, and the need for regular boosters which would add on to costs for governments.

If the new vaccine is approved, the companies estimate they can roll out up to 50 million doses this year, and then produce up to 1.3 billion doses in 2021.

Pfizer shares lifted as much as 11% while BioNTech shares gained 12%.