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Why is the Federal Reserve independent of the government and why is it so essential?

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Negotiations over the reform of the Reserve Bank of Australia took an unusual turn this week with the Greens he demanded government uses its reserve powers to chop rates of interest immediately.

Labor initially hoped to pass the reforms with the support of the Coalition. However, after a yr of negotiations, they refused. Labor’s attempts to save lots of the reforms through negotiations with the Greens now appear doomed to failure.

The Greens’ proposal for the government to chop rates of interest immediately could seem appealing, especially to thousands and thousands of mortgage holders struggling to fulfill their obligations amid the cost of living crisis.

However, for the government to take direct control over setting rates of interest can be contrary to each long-standing historical trends and international financial norms, including central bank independence.

Where did this independence come from?

The idea of ​​central bank independence has a protracted history.

Classical political economist David Riccardo warned already in 1824 This:

the government cannot safely be entrusted with the power to issue paper money; it will definitely abuse it.

Even the authoritarian Emperor of France, Napoleon Bonaparte he claimed in the creation of the Banque de France, which:

I would really like to see the bank more in government hands, but not an excessive amount of.

However, for many of the twentieth century, the common sense view was that monetary policy was a very important tool for government to administer the economy. According to Keynes’s worldview At that point, it would have been absurd for governments to desert such a very important economic lever as rate of interest control.

Even Napoleon Bonaparte thought that a point of separation between the central bank and government was a very good idea.
Snapshot

The prevailing wisdom began to alter after stagflation The Crisis of the Nineteen Seventies. Stagflation is a term meaning high inflation at the same time as high unemployment.

Neoclassical economists corresponding to Milton Friedman argued that only repeated and long-term increases in rates of interest could end the crisis of stagflation.

However, Friedman suggested that governments couldn’t be trusted to keep up high rates of interest because that will also cause unemployment. Therefore, an independent central bank was needed. It can be insulated from partisan political control and could do what was needed to stabilize the economy.

And what is it like in Australia?

In Australia, central bank independence developed slowly and informally.

The Reserve Bank of Australia was separated from the Commonwealth Bank and began operating independently in 1960. It was headquartered in Sydney to extend its independence from politicians in Canberra.

The RBA became de facto independent from government following financial deregulation under the Hawke government in the early Nineteen Eighties. Subsequent declarations by federal treasurers Peter Costello AND Wayne Swan confirmed the Government’s recognition of the RBA’s independence.

The government still has the power to overturn the RBA’s rate of interest decisions, but this “emergency power” has never been used.

Why independence is essential

Although central bank independence is often related to lower inflationThe historical performance of independent central banks is not without flaws.

For example, in Australia the unemployment rate was historically lower before the RBA gained independence. This reflects the RBA’s willingness to make use of higher unemployment levels as a mechanism to lower inflation.

Independent central banks also bear part of the blame for the outbreak of the global financial crisis in 2007. Many commentators suggested that then-Federal Reserve Governor Alan Greenspan’s decision to maintain rates of interest artificially low was accountable for the subprime housing bubble in the US. This ultimately led to a worldwide recession.

But the Greens’ try to use lower rates of interest as a negotiating chip satirically reinforces the importance of central bank independence. If governments took direct control of setting rates of interest, we’d expect monetary policy to be influenced by short-term election concerns relatively than the long-term health of the economy.

Creating a precedent whereby rates of interest may be cut to suit the needs of the current government would even have long-term inflationary effects.

What’s more, it will likely proceed to drive up house prices. That will exacerbate the housing crisis.

In contrast, the initial reforms proposed by Labor look like balanced. They recognise the competing political interests involved in the development of monetary policy while avoiding partisan interference in the day-to-day running of the RBA.

Although the Coalition has expressed concerns that Labor would use the reforms to fill the RBA board, each the Governor and the board have already been appointed by the current government, acting on the RBA’s recommendations.

It ought to be possible to search out a smart compromise that can improve the functioning of the bank while maintaining political independence.

If the alternative was to completely abolish central bank independence, the coalition should return to the negotiating table.

This article was originally published on : theconversation.com
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Business and Finance

The Rise of the ‘Megapub’: Is Bigger Really Better?

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Wetherspoons has unveiled its latest enterprise at London Waterloo Station – an enormous latest pub called The Lion and the Unicorn. The so-called “Superspoons” are part of a growing trend in the British hotel industry, where larger facilities have gotten transforming traditional experiences.

With a main location and a sprawling layout of 5,000 square feet and nearly 600 seats, the opening of the facility marks what some business commentators are describing as the starting of “megapub” waswhere for chains like Wetherspoons, greater is best.

Megapubs are designed to supply greater than just a fast pint. These large, multi-purpose venues aim to fulfill a spread of needs throughout the day, from morning coffee and business lunches to evening meals and live entertainment. The inclusion of expansive seating, a varied menu and designated areas for various activities – reminiscent of socialising or working on a laptop – goals to appeal to a wide selection of customers.

Offering a whole experience, they’re purposely designed to face out from the traditional pub model. And they position themselves as destinations, not typical pubs.

In keeping with Wetherspoons’ business model, the latest megapub guarantees competitively priced food and drinks options, which could make it a sexy option for budget-conscious shoppers. By offering a spread of experiences under one roof, megapubs try to entice customers in with convenience, variety and affordability multi functional package, while also making them feel part of community.

What could this mean for the hotel sector?

One of the principal concerns about the emergence of megapubs is the potential impact on smaller, independent pubs and restaurants. Over the past decade pubs are closing at an alarming rate as pub owners struggle to address rising delivery costs and overheads. More and more young individuals are also choosing abstain from alcohol. Such aspects have reduced demand for traditional pubs.

Megapubs, with their size and pricing power, can exacerbate these challenges by drawing customers away from independent venues that struggle to compete on price or scale, especially those who depend on area of interest markets or unique experiences.

While it’s still early days and the effects of megapubs aren’t yet visible, experts are already wondering whether or not they could make a difference the way we socializeBy combining affordability with a variety of amenities, megapubs like the latest Superspoons could set latest expectations for what a pub experience should appear like. Instead of having to go to multiple locations for various activities, people may prefer to spend their free time in a single multi-functional place where they’ll socialise, eat and work.

Wetherspoons is just not the only company experimenting with this latest model. In the hospitality and retail sectors, corporations are increasingly trying to create more versatile spaces to draw a wider customer base.



So could we see more businesses following Wetherspoons’ example? Given the current economic climate, where many consumers are tightening their belts, it seems likely. It might be the start of a long-term shift towards larger, multi-purpose facilities. Of course, this will just be a short lived response to the challenges of the current market.

Economically speaking, the concept seems well-suited to the financial challenges and uncertainties of our current times, as increasingly isolated people seek inexpensive ways to eat and socialize. By offering each affordability and a wide selection of options, these places could thrive during an economic downturn, appealing to budget-conscious consumers.

Whether you’re a fan of the traditional pub or intrigued by latest concepts like ‘Superspoons’, it’s clear that the way we socialise is evolving. As hospitality businesses proceed to push the boundaries, we could see a big shift in how we spend our free money and time.

This article was originally published on : theconversation.com
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Company sued after refusing to let stroke victim work remotely

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AI, EEOC, Equal Employment Opportunity Commission


A utility company has been sued by the Equal Employment Opportunity Commission (EEOC) for firing a girl who asked to work remotely after suffering a stroke.

On September 16, the EEOC filed a lawsuit against Osmose Utilities Services for allegedly refusing to accommodate the worker by allowing him to work remotely after his stroke, it reports. The worker’s role included handling customer inquiries, including submitting service requests by phone or electronically.

According to lawsuit after suffering a stroke, the girl asked to work from home full time due to her inability to drive and worsening stroke-related headaches attributable to office lighting. But management allegedly denied her request and a separate request to work from home two to three days per week when she had medical appointments.

Osmose allowed her to take day off for meetings but ultimately allegedly fired her when her supervisor questioned her absences and pressured her to stop attending, according to the filing. The company is now facing a lawsuit from the EEOC over allegations it violated the Americans with Disabilities Act (ADA) by denying reasonable accommodations to the worker and retaliating against her.

Central to most claims for distant work accommodations is the principle that under the ADA, an individual with a disability will not be considered a “qualified individual” if she or he cannot perform the essential functions of the job, with or with no reasonable accommodation, as defined by guidelines. These cases often hinge on whether the essential functions of the job should be performed on-site.

More and more firms are requiring employees to return to the office due to the COVID-19 pandemic, which has forced many to switch to distant work. In September 2023, research found that 90% of firms plan to return to office work by the tip of 2024.

In Osmose’s case, the worker had previously been working remotely, together with others in her department, for several months during an office move. After the office returned to in-person work, the worker suffered a stroke that led to vision impairment, memory loss, and headaches.

The lawsuit claims that the girl’s role as a “Single Call Locator” might have been performed with the reasonable accommodations she requested. However, Osmose failed to show any undue hardship that those accommodations would have caused and is accused of wrongfully firing her.


This article was originally published on : www.blackenterprise.com
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Business and Finance

Working in sales makes people nervous, but employers can protect their employees’ health – just look at the construction industry

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Neuroticism is certainly one of the Big Five personality traits, characterised by a bent to experience negative emotions comparable to anxiety, fear, and frustration. People with high levels of neuroticism are sometimes more sensitive to emphasize and more prone to react negatively to challenges.

This trait can have a big impact on job performance, mental health and overall life satisfaction, and can also exacerbate mental disordersin this comorbidity – co-occurrence of multiple disorders.

The negative effects of neuroticism are frequently transferred to healthcare systems, where the overall economic burden of neuroticism has long been exceeded the costs associated in the treatment of common mental disorders.



For sales professionals, the inherent uncertainties of the job—comparable to long sales cycles, complex negotiations, and reliance on commissions—can feed neurotic tendencies. This is particularly true for business-to-business (B2B) salespeople, whose work could be very different from the retail salespeople all of us take care of.

A retailer, for instance, could sell you a automotive—a process that may take just a few hours at most, with minimal repercussions if the deal fell through. A B2B seller, on the other hand, can be accountable for selling a fleet of vehicles to a big company or supplying wholesale parts to a automotive manufacturer.

These deals can take a protracted time to shut and involve large transactions, complex products, multiple stakeholders, and unpredictable outcomes. All of this significantly increases uncertainty.

Working in B2B Sales and Neuroticism

Our comprehensive studywhich surveyed some 1,700 B2B salespeople and 24,000 non-sales professionals, found a transparent link between B2B sales roles and increased neuroticism. Research shows that the constant uncertainty of B2B sales jobs triggers defensive emotional responses that, when ceaselessly activated, can reinforce and increase neuroticism over time.

This trend is driven by certain characteristics of B2B sales work:

  • Complex customer needs: B2B sellers often take care of customers who’ve multi-faceted requirements that require customized solutions. This can result in lengthy decision-making processes and unsure outcomes.

  • Long sales cycles: B2B sales cycles can last months, and success will depend on many variables, including the decisions of assorted stakeholders inside the client organization.

  • Negotiation toughness: B2B sales often involve tough negotiations with clients who’ve experience securing the best deals. This can create a high-pressure environment in which the seller’s success is continually at risk.

  • Variable pay: Many sales roles are heavily commission-based, meaning financial stability is directly tied to performance. This uncertainty can increase stress and anxiety, especially in periods of low sales.

Mental Health and Safety: Lessons from Construction Work

The harmful effects of chronic uncertainty in a salesman’s job – namely personality changes that can result in mental disorders – needs to be treated in much the same way as every other workplace hazard.

Just as the construction industry is taking steps to protect employees from physical harm, corporate organizations should consider protecting their employees from psychological harm, especially in high-pressure roles comparable to B2B sales.

While construction employees wear hard hats and safety gear, sales professionals need mental and emotional protections to scale back the risks related to their jobs.



The first step for each individuals and businesses is to acknowledge the risks related to B2B sales roles. For employers, this implies recognising that these roles can have a big impact on mental health – just as some jobs can carry physical risks – and supporting this by offering support to employees. For employees, it means accessing the facts and using them to make informed profession decisions, and taking their own mental health under consideration when accepting a brand new job.

Sales organizations can take proactive steps to support their employees’ mental health. This could include offering mindfulness programs, gym memberships, or access to mental health counseling, and ensuring employees have time to make use of these services. Providing paid time without work can also allow employees to take time without work once they need a mental health break, promoting a healthier work-life balance and helping to stop the rise of neuroticism.

Managers can also play a key role by redesigning sales roles to scale back the aspects that contribute to uncertainty and neuroticism. This could include simplifying sales goals, offering clearer feedback, or providing more stable compensation plans so salespeople are less depending on commissions.



Regular mental health checks also needs to be required. Just as safety checks are routine (and infrequently required by law) in physically demanding jobs, psychological assessments needs to be standard practice in sales organizations. By repeatedly assessing employees’ levels of neuroticism and other personality traits, firms can determine when intervention is required.

Finally, offering training programs that equip salespeople with the skills to handle long sales cycles and difficult negotiations can function each a developmental tool and a preventative measure against neuroticism. These programs not only improve job performance but also provide employees with strategies to take care of stressors that contribute to psychological harm.

This article was originally published on : theconversation.com
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