Why a European, even a talented one, should not lead the IMF. The Economist. Well said. Also:
Let there be a real contest. FT editorial.
Background on the succession. Alan Beattie, FT.
Stan Fischer may run. Bob Davis, WSJ.
Who pays the taxes in the US? Chuck Marr and Brian Highsmith, Center on Budget and Policy Priorities. The income tax falls lightly on the less well-off, but the tax system as a whole does not. “When all federal, state, and local taxes are taken into account, the bottom fifth of households paid 16.3 percent of their incomes in taxes, on average, in 2010. The second-poorest fifth paid 20.7 percent.”
Is World War II still “the good war”? Adam Kirsch, NYT. “[A] necessary but terrible war is simplified into a ‘good war’, and we start to feel shy or guilty at any reminder of the moral compromises and outright betrayals that are inseparable from every combat.”
Martin Feldstein argues that Greece must (a) default and (b) take a leave of absence from the euro. Neither will be easy to arrange, but it is difficult to say what the second course even means.
The design of the debt restructuring that everybody thinks is coming will be important. Angelo Baglioni argues for a “leveraged buyback“. This would involve Greece buying back its debt using money borrowed from European Financial Stability Facility–with the crucial proviso that this loan would be senior to Greece’s existing bonds. This would keep Greek bonds cheap as it bought them back, thus transferring more wealth from creditors and letting Greece lower its debt burden more effectively. Baglioni says a buyback done this way would mitigate the knock-on effects of a conventional default (partial repayment or stretching out of maturities) through global financial markets. Looks right to me.
Jeffrey Frankel’s blog has a couple of good posts on learning from the Europe’s mistakes over Greece: where the ECB went wrong, and what to do about it next time.
Incarceration is the great American exception. The rest of the world contemplates the US prison system with disgust; here, it arouses surprisingly little controversy.
You would expect American progressives to be far more exercised about it than they are. They are properly concerned about prolonged detention of terrorist suspects and the treatment of leakers of official secrets such as Bradley Manning, but apparently not much worried about criminal-justice issues that are quantitatively far more significant: questionable court practices (including default recourse to the plea bargain, which has made trial by jury a comparative rarity); extended periods of remand in custody; astonishingly long sentences (including for non-violent offenders); the erosion of judicial discretion in sentencing; outrageous “three strikes” laws; and often deplorable prison conditions. These things affect literally millions of US citizens. Waterboarding rightly shocks the progressive conscience; rape in prison is permissible material for chat-show comic monologues.
Even criminals have rights. Yet for every liberal I’ve heard complain about conditions in US prisons, I’ve heard ten say it’s a disgrace that white-collar (ie, non-violent) offenders get off with short sentences at “Club Fed”.
Good for the Supreme Court, therefore, in voting 5-to-4 to require California, whose prisons are especially notorious, to reduce its prison population and curb overcrowding. The judgment included photos of inmates crammed together, and tiny cages in which some are confined. It is a shame that the order was necessary–the courts should not have to make prison policy this way–but what was the alternative? As an FT editorial put it:
It is indeed a desperate and unsatisfactory measure – yet warranted under the circumstances, which are extreme.