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Leader: The fiscal cliff has not been averted, just postponed

The deal struck by Obama and the Republicans leaves open the threat of dramatic spending cuts.

Since the global economic crisis began, the United States has avoided the path of austerity so hastily pursued by the UK and the eurozone. Subsequent events have vindicated its decision to do so. While Britain and the euro area have fallen back into recession, the US has experienced a sustained recovery. Its economy has grown for 13 consecutive quarters, with output now 2.2 per cent above its pre-recession peak, and unemployment has fallen to a four-year low of 7.7 per cent.

Failure to reach agreement on the “fiscal cliff”, the term coined by Federal Reserve chairman Ben Bernanke to describe the $607bn of tax rises and spending cuts which were due to take effect from 1 January, would have threatened almost all of this progress. The US Congressional Budget Office estimated that the total fiscal contraction of 4 per cent of GDP would cause the economy to shrink by 0.5 per cent this year and increase unemployment to 9.1 per cent. With its national debt now totalling $16.3trn (103 per cent of GDP), the US government needs a better balance between what it spends and what it earns, but such extreme austerity would be self-defeating.

It should have been possible for Barack Obama and Congress to reach agreement months ago on a deal that allowed for responsible deficit reduction while also protecting the economic recovery. That it was not was largely due to the intransigence of the Republicans, who grandstanded as fiscal conservatives while refusing to countenance tax rises on even the wealthiest Americans.

The deal eventually struck by Mr Obama and Senate Republicans in the final hours of 2012 was most notable for its limitations. Having won re-election on a pledge to raise income tax from 35 per cent to 39.6 per cent on those earning over $200,000 a year, while retaining the Bush-era tax cuts for other income groups, Mr Obama was forced to accept a significantly higher threshold of $400,000. At the same time, he agreed to the repeal of his administration’s reduction in payroll taxes (the US equivalent of National Insurance), meaning a higher tax bill for the low and middle income groups he aimed to protect. The return of the rate to 6.2 per cent from its current level of 4.2 per cent will cost a household earning the median income of $50,000 an extra $1,000 a year.

The wealthiest Americans, by contrast, retain most of the tax perks introduced by the Bush administration. Capital gains and dividends above $450,000 will now be taxed at 20 per cent, rather than 15 per cent, but this is still well below the 39.6 per cent rate seen during the Clinton administration, which ensured capital gains were treated in the same way as ordinary income. The top rate of inheritance tax will rise from 35 per cent to 40 per cent but the threshold remains an exceptional $5m, locking in favourable treatment for most of the country’s millionaires.

Both as a matter of social justice and economic policy, it is important for the richest, who are more likely to save, rather than spend, any tax giveaway, to bear the burden of austerity. But owing to the dogmatic stance of the Republicans, Mr Obama has sacrificed hundreds of billions in potential revenue. The danger remains that the US will seek to achieve debt reduction through dramatic spending cuts of $110bn, which the agreement reached this week simply postpones for two months. Once again, in a cynical game of chicken, the Republicans intend to use the forthcoming vote on raising the US debt ceiling (hitherto a formality under Republican and Democrat presidents alike) to extort large cuts to social security and Medicare. The fiscal cliff has not been averted; it has merely been postponed.

In his autumn statement last month, George Osborne rightly cited the uncertainty in the US as a threat to recovery of the British economy. Yet having pushed the UK off its own fiscal cliff in 2010, the Chancellor has little right to lecture political leaders across the Atlantic. Even with Britain in danger of an unprecedented triple-dip recession, there will be no let up in austerity this year. The decision to increase out-of-work and in-work benefits by just 1 per cent, below the rate of inflation, will further squeeze consumers’ spending power and reduce aggregate demand. In the case of the US, the hope remains that wiser minds will prevail and an unnecessary slide into recession will be prevented. But for the UK, the wrangling in Washington is an unhappy reminder that its fate was settled long ago.

This article first appeared in the 07 January 2013 issue of the New Statesman, 2013: the year the cuts finally bite

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This Ada Lovelace Day, let’s celebrate women in tech while confronting its sexist culture

In an industry where men hold most of the jobs and write most of the code, celebrating women's contributions on one day a year isn't enough. 

Ada Lovelace wrote the world’s first computer program. In the 1840s Charles Babbage, now known as the “father of the computer”, designed (though never built) the “Analytical Engine”, a machine which could accurately and reproducibly calculate the answers to maths problems. While translating an article by an Italian mathematician about the machine, Lovelace included a written algorithm for which would allow the engine to calculate a sequence of Bernoulli numbers.

Around 170 years later, Whitney Wolfe, one of the founders of dating app Tinder, was allegedly forced to resign from the company. According to a lawsuit she later filed against the app and its parent company, she had her co-founder title removed because, the male founders argued, it would look “slutty”, and because “Facebook and Snapchat don’t have girl founders. It just makes it look like Tinder was some accident". (They settled out of court.)

Today, 13 October, is Ada Lovelace day – an international celebration of inspirational women in science, technology, engineering and mathematics (STEM). It’s lucky we have this day of remembrance, because, as Wolfe’s story demonstrates, we also spend a lot of time forgetting and sidelining women in tech. In the wash of pale male founders of the tech giants that rule the industry,we don't often think about the women that shaped its foundations: Judith Estrin, one of the designers of TCP/IP, for example, or Radia Perlman, inventor of the spanning-tree protocol. Both inventions sound complicated, and they are – they’re some of the vital building blocks that allow the internet to function. 

And yet David Streitfield, a Pulitzer-prize winning journalist, someow felt it accurate to write in 2012: “Men invented the internet. And not just any men. Men with pocket protectors. Men who idolised Mr Spock and cried when Steve Jobs died.”

Perhaps we forget about tech's founding women because the needle has swung so far into the other direction. A huge proportion – perhaps even 90 per cent - of the world’s code is written by men. At Google, women fill 17 per cent of technical roles. At Facebook, 15 per cent. Over 90 per cent of the code respositories on Github, an online service used throughout the industry, are owned by men. Yet it's also hard to believe that this erasure of women's role in tech is completely accidental. As Elissa Shevinsky writes in the introduction to a collection of essays on gender in tech, Lean Out: “This myth of the nerdy male founder has been perpetuated by men who found this story favourable."

Does it matter? It’s hard to believe that it doesn’t. Our society is increasingly defined and delineated by code and the things it builds. Small slip-ups, like the lack of a period tracker on the original Apple Watch, or fitness trackers too big for some women’s wrists, gesture to the fact that these technologies are built by male-dominated teams, for a male audience.

In Lean Out, one essay written by a Twitter-based “start-up dinosaur” (don’t ask) explains how dangerous it is to allow one small segment of society to built the future for the rest of us:

If you let someone else build tomorrow, tomorrow will belong to someone else. They will build a better tomorrow for everyone like them… For tomorrow to be for everyone, everyone needs to be the one [sic] that build it.

So where did all the women go? How did we get from a rash of female inventors to a situation where the major female presence at an Apple iPhone launch is a model’s face projected onto a screen and photoshopped into a smile by a male demonstrator? 

Photo: Apple.

The toxic culture of many tech workplaces could be a cause or an effect of the lack of women in the industry, but it certainly can’t make make it easy to stay. Behaviours range from the ignorant - Martha Lane-Fox, founder of, often asked “what happens if you get pregnant?” at investors' meetings - to the much more sinister. An essay in Lean Out by Katy Levinson details her experiences of sexual harassment while working in tech: 

I have had interviewers attempt to solicit sexual favors from me mid-interview and discuss in significant detail precisely what they would like to do. All of these things have happened either in Silicon Valley working in tech, in an educational institution to get me there, or in a technical internship.

Others featured in the book joined in with the low-level sexism and racism  of their male colleagues in order to "fit in" and deflect negative attention. Erica Joy writes that while working in IT at the University of Alaska as the only woman (and only black person) on her team, she laughed at colleagues' "terribly racist and sexist jokes" and "co-opted their negative attitudes”. 

The casual culture and allegedly meritocratic hierarchies of tech companies may actually be encouraging this discriminatory atmosphere. HR and the strict reporting procedures of large corporates at least give those suffering from discrimination a place to go. A casual office environment can discourage reporting or calling out prejudiced humour or remarks. Brook Shelley, a woman who transitioned while working in tech, notes: "No one wants to be the office mother". So instead, you join in and hope for the best. 

And, of course, there's no reason why people working in tech would have fewer issues with discrimination than those in other industries. A childhood spent as a "nerd" can also spawn its own brand of misogyny - Katherine Cross writes in Lean Out that “to many of these men [working in these fields] is all too easy to subconciously confound women who say ‘this is sexist’ with the young girls who said… ‘You’re gross and a creep and I’ll never date you'". During GamerGate, Anita Sarkeesian was often called a "prom queen" by trolls. 

When I spoke to Alexa Clay, entrepreneur and co-author of the Misfit Economy, she confirmed that there's a strange, low-lurking sexism in the start-up economy: “They have all very open and free, but underneath it there's still something really patriarchal.” Start-ups, after all, are a culture which celebrates risk-taking, something which women are societally discouraged from doing. As Clay says, 

“Men are allowed to fail in tech. You have these young guys who these old guys adopt and mentor. If his app doesn’t work, the mentor just shrugs it off. I would not be able ot get away with that, and I think women and minorities aren't allowed to take the same amount of risks, particularly in these communities. If you fail, no one's saying that's fine.

The conclusion of Lean Out, and of women in tech I have spoken to, isn’t that more women, over time, will enter these industries and seamlessly integrate – it’s that tech culture needs to change, or its lack of diversity will become even more severe. Shevinsky writes:

The reason why we don't have more women in tech is not because of a lack of STEM education. It's because too many high profile and influential individuals and subcultures within the tech industry have ignored or outright mistreated women applicants and employees. To be succinct—the problem isn't women, it's tech culture.

Software engineer Kate Heddleston has a wonderful and chilling metaphor about the way we treat women in STEM. Women are, she writes, the “canary in the coal mine”. If one dies, surely you should take that as a sign that the mine is uninhabitable – that there’s something toxic in the air. “Instead, the industry is looking at the canary, wondering why it can’t breathe, saying ‘Lean in, canary, lean in!’. When one canary dies they get a new one because getting more canaries is how you fix the lack of canaries, right? Except the problem is that there isn't enough oxygen in the coal mine, not that there are too few canaries.” We need more women in STEM, and, I’d argue, in tech in particular, but we need to make sure the air is breatheable first. 

Barbara Speed is a technology and digital culture writer at the New Statesman and a staff writer at CityMetric.