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The domestic foreign-policy consensus in the US that has undergirded a half-century of American activism on the international stage is coming under serious strain. Despite the appearance of unified public support for prolonged conflict in a new, twilight fight in Iraq and Syria, there are growing fissures in the foreign policy consensus that cannot be papered over. The alignment that is under threat has shaped American foreign policy for decades. We are entering a challenging period in which the most pressing debates on what to do in the world are playing out inside the two established political parties rather than between them. Continue reading »
An Israeli friend and I were awaiting returns of the Scottish referendum in an Amsterdam bar last night, when he remarked: “I never used to believe in deliberative democracy. Look at the Scots. Now I do.”
Whatever else the referendum meant for participants – a grinding disappointment for the Yes campaign, euphoric relief for the No – for those who could only watch from bars in foreign countries, it aroused deep emotions about democracy. Here was a people deliberating together, figuring out its collective destiny, making a choice it knew was historic. Popular sovereignty recovered its majesty. Continue reading »
The popular Wall Street dance known to every corporate accountant as tax inversion is under attack from those who claim to speak for Main Street. “My attitude is I don’t care if it’s legal. It’s wrong, ” says President Barack Obama. Senator Sherrod Brown is so sure that tax inversion is iniquitous that he wants a boycott of the latest US company to want to do the inversion dance: Burger King.
The company’s offence is that inversion is an act of alleged infidelity in which a US multinational with substantial overseas revenues reincorporates in a foreign jurisdiction with a lower corporate tax rate. Upwards of 49 companies have done it; some 20 others are said to be flirting with the idea. Continue reading »
The US administration is trying to convince its populace and the world that it is successfully forging a new alliance in the Middle East in order to combat the Islamic State of Iraq and the Levant (known as Isis). What Americans tend to forget so easily, however, is that the US is distrusted, disliked and even hated by all the regimes it is dealing with and even more so by millions in the Arab street.
Nobody has forgotten America’s failures in Iraq, Afghanistan and Libya, its abandonment of the region after the failures of the Arab uprisings and the millions of refugees and homeless those failed wars have spawned. Arab leaders and their regimes cultivate long memories as much as they do conspiracy theories. Continue reading »
It sounds like the wishful thinking of a television news editor: encounters between politicians and journalists should involve less rudeness and more candour. Perhaps, indeed, the political interview – for decades the mainstay of Newsnight, whose editor Ian Katz expressed these wishes in the Financial Times last week – has already been replaced by social media, a forum for direct debate in which interviewers are redundant.
But assuming the form is not moribund yet, both interviewers and interviewees should reflect on whether they are serving their interests (and the public’s) by continuing in the same old style. Continue reading »
Can monetary policy alone really solve the eurozone’s deep-rooted problems?
Certainly, Mario Draghi appears to have the magic touch, whether he’s promising to do whatever it takes or, last week, planning to buy large amounts of paper in a bid to avoid the onset of deflation. Unfortunately, monetary policy – conventional or otherwise – has its limits. Even if Mr Draghi manages to alleviate the deflationary threat, the eurozone will still be faced with severe fault lines. Continue reading »
When presenting HSBC’s first-half results last month, Douglas Flint, the bank’s chairman, talked of “disproportionate risk aversion creeping into decision-making”. He ascribed this to the fact that managers now perceive “a zero tolerance of error” on the part of regulators, and feel they “may be criticised with hindsight”. The consequence is that their main preoccupation now is “to protect themselves and the firm from future censure” rather than taking well-informed decisions that inevitably entail accepting some risk of loss or failure.
The hostile political reaction to his statement showed that just as Bob Diamond, the former Barclays chief, discovered that the time for remorse was not over, so Mr Flint has discovered that the time to hit back at regulators has not arrived. He will, however, have received many private winks and smiles of recognition, as his statement reflects a view widely held in the financial sector. Many chairmen, and chairs of risk committees, will have said “hear, hear” – but quietly, so that the Bank of England could not hear. Continue reading »
The European Central Bank is the only major central bank in the advanced world that has not implemented quantitative easing – yet. A lot of arguments have been argued in defence of not following the Federal Resere, the Bank of England and Bank of Japan along the path of QE. But their validity is fast diminishing. Here is why QE’s detractors are wrong – possibly dangerously so. Continue reading »
It is an inconvenient truth for Russia, Europe and the US, but we must call a spade a spade: Russia and Ukraine are engaged in a war between sovereign states, even if Kiev is the only government yet willing to acknowledge it. There is evidence of Moscow’s direct involvement in Ukraine, including troops on the ground, shellings and the provision of advanced weaponry. A separatist leader has claimed that as many as 4,000 Russian citizens have fought on Ukrainian soil. Moscow has opened a new southern front in the fighting. The bottom line: Russia’s actions constitute an invasion.
But Russia and the west still will not call it that. Moscow wants to maintain implausible deniability, regardless of the facts on the ground. In his speech on Thursday,Barack Obama acknowledged that Russia was “responsible”, but the US president dubbed recent events nothing more than a “continuation of what we’ve seen for months”. The US and the EU feel that the “I word” would necessitate a sharp acceleration in their response. So they are sticking with a euphemism: “incursion”. The west cannot maintain this song and dance much longer. Continue reading »