Rising US prices Fed chief is dampening Inflation concerns

Status: 23.06.2021 9:39 a.m.

The head of the US Federal Reserve sees the reason for the current high inflation primarily in the recovery of the economy. The unexpectedly strong effects would soon fade, Powell said.

By Torsten Teichmann, ARD studio Washington

The demand in many industries is greater than the supply, meanwhile the prices for raw materials in the USA are rising, employers are having difficulties filling positions: All these effects of the economic upswing at the end of the corona pandemic are stronger than assumed, the head of the Federal Reserve (Fed), Jerome Powell, granted. Nevertheless, there will be no inflation, as in the 1970s, Powell said at a hearing in the US House of Representatives. “These factors will fade over time and we will get back to where we want to go. We are watching this carefully,” he said.

Interest rate hikes planned for 2023

The goal is an inflation rate of just over two percent. In May there was inflation at five percent . The Fed announced last week by the end of 2023, the key interest rate is expected to be increased in two steps to want. But in the short term it remains in the range between 0 and 0.25 percent. Powell had to defend his monetary policy at the hearing in the House of Representatives. Republican MP Steve Scalise accused a visibly annoyed Fed chief that the cheap money policy was harmful to hard-working families.

Steve Scalise criticized Fed policies as harmful to families. Image: REUTERS

Powell replied that lower income groups in particular have not yet benefited from the upswing in the United States. “Real incomes at the lower end of the spectrum are stagnating compared to those at the top,” he said. “Mobility across all income groups has decreased in the US and is now behind that in most other industrialized countries.”

Fed expects economic growth of 6.5 percent

These differences would hold back the US economy and the country as a whole. And that although the Fed is currently assuming that the US economy will grow by 6.5 percent this year with the help of the government’s trillion-dollar stimulus packages

Increasing number of passengers The US airlines lack pilots

As of: 22.06.2021 10:05 a.m.

The number of air travelers in the US is rapidly increasing again. In the meantime, the remaining pilots at some airlines are no longer sufficient to carry out all the planned flights.

By Torsten Teichmann, ARD studio Washington

The US airline Delta is looking for staff again. 1000 pilots are to be hired in the coming months. A year ago, in the middle of the corona pandemic and with constantly falling passenger numbers, the airline threatened to fire 1,700 pilots. In the end, the airline forced the unions to accept indirect wage cuts. Now Delta could even have to pay more for new employees in order to find staff again.

American Airlines is canceling flights as a precaution

American Airlines has similar problems. Especially on weekends, the number of pilots who have already been trained and tested is apparently not enough. In the event of delays and bad weather, flights are canceled because pilots would otherwise exceed their working hours and there is no one who can take over the shift. Now American canceled almost 1,000 flights for July as a precaution. The staffing level is so tight that the airline has been overwhelmed by rising demand and its own ambitious plans. The Wall Street Journal reports that there is also a frequent lack of ground crews to refuel aircraft.

Vacation trips partly at pre-crisis level

The number of vacationers in the US could return to pre-pandemic levels this month for some airlines. Delta expects the restrictions on transatlantic traffic to fall in the second half of the year. So far, travelers from Schengen countries such as Germany are still banned from entering the USA. US President Joe Biden has not yet announced that he will change anything

Aircraft builder Dispute over Airbus and Boeing put on hold

Status: 15.06.2021 6:17 p.m.

The transatlantic dispute between Airbus and Boeing had far-reaching consequences – in the form of special tariffs. Now the two aircraft manufacturers have buried the hatchet for the time being. By Torsten Teichmann, ARD studio Washington You speak of a breakthrough in Brussels. But the US and the European Union have not yet agreed on whether Airbus should repay subsidies or Boeing should forego funds. They have not found a long-term solution on how to regulate government support for the aircraft industry. Instead, both sides decided to freeze the dispute. US tariffs that have already been issued, which are intended as punitive measures for Europe, will remain suspended – for another five years. The same applies to punitive tariffs imposed by Europeans on certain imports from the USA.

“Armistice” in favor of jobs

The situation in the aviation industry certainly contributed to the compromise: The industry is severely affected worldwide by the consequences of the pandemic, travel restrictions and entry bans. Boeing needs security to invest in a successor to the 737 series, a new medium-haul aircraft with a single aisle and composite wings. For the USA there are a total of 1.2 million jobs, justified the trade representative of the USA, Katherine Tai, the readiness for a ceasefire in the trade conflict. The decision is in the interests of the American middle class.

June 15, 2021

Contribution to the transatlantic détente

And at the same time, the step serves the foreign policy goal of relaxing transatlantic relations again – as far as the domestic political sensitivities in Washington allow. Because the accusation of the elected US President Donald Trump that Europe is exploiting the United States has never completely disappeared. Specifically, the US is suspending higher tariffs on certain European imports as long as the EU’s support for Airbus does not go beyond the agreement that has now been made. And vice versa, presumably the same applies to the EU tariffs on Washington and Boeing.

June 15, 2021

Controversy has been smoldering for many years

The transatlantic trade conflict over direct and indirect state aid has existed for 16 years. The World Trade Organization (WTO) decided in autumn 2019 that subsidies for Airbus put its competitors at a competitive disadvantage. The WTO gave the United States the option of penalizing imports from Germany, France, Great Britain and Spain with tariffs totaling 7.5 billion US dollars annually. Since then, French cheese, German wine and EU aircraft have become significantly more expensive for the US market. Because nothing was progressing in talks from the US point of view, the administration under President Trump increased tariffs on European aircraft from ten to 15 percent in March 2020. In a second procedure, the WTO again approved the Europeans, who in turn paid higher customs duties on imports from the USA. It was about additional taxes amounting to 4.5 billion US dollars, for example on whiskey, nuts, tobacco and airplanes.

interview 11/10/2020

Business recently stagnated on both sides

In the past few months, Boeing and Airbus had only delivered a few machines. According to the “Wall Street Journal”, however, the tariffs on planes in the USA mainly affect Delta Airlines, which is expanding its Airbus fleet. In Europe, Ryanair in particular had to reckon with rising prices with its standard Boeing 737 fleet. It is not known whether the airlines took over the customs duties when the machines were delivered or the manufacturers themselves. The agreement in Brussels and the postponed conflict should give both sides a little more security.

11/9/2020

Focus on new competition

The US Trade Representative Tai also said that instead of fighting with your closest allies, they are coming together to face a different challenge. And the common adversary is – once again on this trip by US President Joe Biden through Europe: China. The People’s Republic is building its own aircraft industry with state investments. Europe and the US are complaining that China is violating the rules of international trade and laws protecting intellectual property. But that’s also true: a competitor is just emerging for medium-haul aircraft like the Airbus A320 or Boeing 737 – and that on the lucrative Chinese market.

Disclosure report Bezos, Musk and Co. hardly paid any taxes

As of: 06/09/2021 05:04 a.m.

A new report reveals that the richest Americans hardly pay any income tax – among them Amazon founder Bezos and Tesla boss Musk. The tax authority wants to determine how the confidential data became public. By Torsten Teichmann, ARD studio Washington In 2007, multibillionaire Jeff Bezos didn’t pay a dime in US income tax. In 2011, too, the Amazon founder offset his income against losses so much that the US tax authority IRS granted him an income-related child allowance of 4,000 US dollars. This had often been speculated about. But now the numbers are known. The foundation for investigative journalism ProPublica quotes from Bezos tax return. These tax tricks are not illegal. But the network of loopholes and discounts remains denied to most Americans due to lack of assets. They move from salary to salary, as US President Joe Biden complains time and again: “Sometimes I argue with friends in the Democratic Party about it: It’s okay to be a billionaire or a millionaire, but pay your fair share.”

What tax amounts are fair for the rich?

But how much should the top 0.01 percent in the US contribute financially to society? There is a dispute about this. The ProPublica report rekindles this debate. The foundation has obtained official tax documents from thousands of the richest Americans, says the journalist Jesse Eisinger involved in the NPR radio station. They cover a period of 15 years. ProPublica initially refers to the reported income from the tax returns of the 25 richest Americans and the increase in wealth over the period that is not taxed. In addition to Bezos, Tesla founder Elon Musk, Facebook boss Mark Zuckerberg and New York’s ex-Mayor Michael Bloomberg will be there.

If we look at the actual tax on capital growth – which is essentially your income – then its tax rate is 3.4 percent. For people like Jeff Bezos or Warren Buffet, it’s even less.

Far from the top tax rate of 37 percent

The investor Warren Buffet paid 0.1 percent tax on income and asset growth between 2014 and 2018, ProPublica calculates. At Bezos it is just under one percent. Americans pay an average of 14 percent income tax. The top tax rate would be 37 percent. America’s billionaires are far from that. The Biden administration reacted cautiously to the findings. Any unauthorized publication of government documents is against the law, said Biden’s spokeswoman Jen Psaki. The Ministry of Finance is trying to clarify how the tax returns have come to the public.

Generally speaking, we know that more needs to be done to ensure that businesses and high-income citizens do more of their fair share. This is what the President says in his proposals, in his budget, and this is how he wants to pay for his proposals. A government proposal provides for higher taxes for households with an annual income of more than $ 400,000. According to the ProPublica report, however, it is completely unclear whether a corresponding reform will generate additional income as long as the loopholes in the tax laws of the USA are not closed.