Obama student loan fix spares rod, spoils borrower

June 11, 2014

Extending repayment caps and debt forgiveness to older graduates gives too many high earners a break. Making everyone pay a flat percentage of income would be simpler, fairer – and cheaper for taxpayers. It could also deliver a valuable lesson in financial responsibility.

Investors cheer for Brazil World Cup rout

June 10, 2014

Each dip in Dilma Rousseff’s poll numbers bumps the Bovespa. Markets are hoping her experimental economic policies will come to an end at the October ballot. With labor tight and millions lifted from poverty, however, it will take crushing defeat on the pitch for that to happen.

China’s mini-stimulus verges on micro-management

June 10, 2014

A tweak that lets some banks lend more to the rural sector will boost growth a bit, and maybe create some jobs. The cost is ever more complexity. That might suit regulators looking for more influence, but fine-tuning takes China further from its goal of being market-driven.

China-U.S. cyber spat risks corporate casualties

June 9, 2014

Beijing has responded to spying charges by taking aim at American tech companies. An escalating dispute could lead to blocked deals in the U.S. and lost sales in China. Though companies can try to ease security concerns, it’s hard for them to escape a political escalation.

China wrestles with repression of financial sort

June 4, 2014

Incomplete political reforms led to violence and retrenchment twenty-five years ago today. China is stable now, but the financial system shows a similar tension between opening up and control. Missteps could lead to chaos. Yet savers may be harder to suppress than activists.

Fed fundamentalists deserve fresh listen

June 3, 2014

After years of expanding policy and remit, the U.S. central bank risks biting off more than it can chew. Hawkish economists persuasively argue this creates a risk of failure, which could undermine Fed independence. More important, the Fed has to stop giving cover to a lazy Congress.

Italy’s lesson for Europe: do your homework

May 27, 2014

Matteo Renzi’s European election triumph will supercharge his reforms. The solid showing for a mainline party, despite a sickly economy, demonstrates that a strong domestic politician can be more appealing than euro-bashing. Hollande and Cameron could learn from the Italian PM.

U.S. firms get caught in China spying crossfire

May 26, 2014

China has threatened to block foreign companies due to a cyber espionage row with the United States. For most groups, the People’s Republic is still a small proportion of sales, but a bigger share of potential new orders. China’s weapon is shutting them out from future growth.

Chinese real estate is in real trouble

May 21, 2014

The coming correction could take several forms: shrinking investment, disappearing funding for developers, and lower prices. All three are connected. Financial pressures could be wide-ranging, but a downward spiral in property values is the hardest to reverse.

Asia can give the West a bubble-popping lecture

May 16, 2014

Regulators in Asia have been developing tools to smooth economic cycles for years. Yet the debate over “macroprudential” policy in the U.S. and Europe largely ignores this experience. Western regulators haven’t overcome the intellectual myopia that led them into the crisis.