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Washington’s need for periodic scandal is almost biological. For legislators, it is the opportunity to strut on the national stage. For the party out of power, it is politics by other means. For the press, it is an escape from the boredom of a second term. Scandal means a break in the routine, a thrilling emergency. How else to explain the excitement with which two events – an attack on a US consulate in Libya and tax audits of conservative institutions – have been elevated into scandals? At some level, the political class loves it. Read more
Markets have not been enthused by the numbers coming out of China in recent months. Typical headlines are “China’s production indicators disappoint” or “analysts are worried that rapid expansion is faltering”. Estimates of China’s economic growth this year are slipping from more than 8 per cent to something closer to 7.5 per cent. Those concerned about the country’s longer-term growth challenges, however, tend to be more relaxed about near-term outcomes but preoccupied with the new leadership’s commitment to reforms.
Is there a trade-off between reviving the economy and establishing a sustainable basis for longer-term growth? Unfortunately there is. Beijing has run out of good options to further stimulate the economy as a strategy to buy time until western economies rebound. Read more
I have enormous respect for Martin Wolf, as he knows, and never miss a single one of his brilliant and indispensable columns. Indeed, I appreciate his responding, as did Paul Krugman and Joe Wiesenthal, to my recent FT article on the origins of recent eurozone austerity programs.
In further responding, let me emphasize that my argument is not pro-austerity or anti-austerity. Not at all. Rather, the main point which I tried to make is that financial markets originally pushed austerity onto the weaker nations, not politicians. A careful review of the timeline in this eurozone financial crisis bears this out. Read more
Even by the country’s dismal standards of rigged elections, military dictatorships and incompetent civilian governments, the polarisation, murder and mayhem on the streets is unprecedented. Coupled with the gross opportunism of all political leaders in ignoring issues on which the nation’s survival depends, this is causing immense international and public concern. The future after the elections will continue to look bleak unless the politicians can agree to work together on these crucial issues. Read more
Criticism of austerity has reached ferocious levels in Europe. Increasingly, it carries a moral tone, portraying the stronger north, especially Germany, as forcing harsh policies on to weaker nations. Opponents of austerity argue that the north is demanding fiscal tightening and labour market reforms from these stricken states in exchange for vital lending from entities such as the European Central Bank. They see it as kicking economies when they’re down. Read more
Carmen felt both exhausted and thrilled. Exhausted because her 78 years made the 15-hour bus ride too long. And thrilled because she had voted in the presidential election. To do so, she had to travel from Miami to New Orleans. The journey was caused by President Hugo Chávez’ decision to close his country’s consulate in Miami. So the 20,000 Venezuelans who live there (most of whom are not Chávez supporters) had to choose between not voting or going to New Orleans… Read more
In the west, discussion of the country’s prospects is focused on whether the change to date irreversible or whether the military could come roaring back to power. This preoccupation misses the point. The real question about is not whether it will go back but, rather, how it will go forward. There are already a few hints about what to expect. Read more
To give Germany the assurance it will need to agree to permanent burden-sharing, France needs to press on with reforms, and to do so boldly and visibly. It needs to reduce the size of the state, lower labour costs and so improve competitiveness and boost medium term growth prospects. Put bluntly, France needs to make its economy more German, and it needs to do so as quickly as possible. Read more
In September 2014, Scottish voters will decide whether to leave the UK and become an independent state. It will be a straightforward Yes-No referendum, but each person’s vote will be based on a mixture of rational and emotional considerations. The currency question touches both, and therefore it could be the deciding factor in this historic decision. Read more
Amazon has built its empire on the legitimate advantages it has over retail shopping: an endless range of products at a steep discount and stunningly good customer service. But it has also benefited from one unfair advantage over its bricks-and-mortar competitors: it does not have to charge a sales tax, which American states levy in varying amounts on consumer goods. Depending on where you live in the US, this can save you up to 12 per cent on purchases, making it foolish not to buy online when you can. Read more
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