Jan 16, 2015 15:37 UTC

Review: Why banking is flawed and how to fix it

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By Dominic Elliott

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

“The End of Banking” is an important book about finance. Jonathan McMillan, the nom de plume taken by an investment banker and a macroeconomist, provides a holistic and compelling explanation of the crisis of 2008. The authors predict a repeat, barring a revolution in finance.

Jan 9, 2015 16:18 UTC
Guest Contributor

Review: Trade can bring war

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By Edward Chancellor

The author is a guest columnist. The opinions expressed are his own.

Few doubt that international trade usually increases the wealth of nations. Does it also bring peace? Many think so, but economic historian James Macdonald points out in “When Globalization Fails: The Rise and Fall of Pax Americana” that the last high point of globalization ended just over a century ago in a devastating world war – between countries which were also each other’s largest trading partners.

New York Times Columnist Thomas Friedman writes about the “Dell Theory of Conflict Prevention,” positing that no two countries that are part of a global supply chain have ever fought a war with each other. Macdonald decries such thinking as simplistic and unhistorical.

Jan 2, 2015 11:42 UTC
Edward Hadas

Review: Two centuries of trust, frauds and finance

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By Edward Hadas

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Financial fraud can be fascinating. There is something compelling about the way confidence men, from Thomas Cochrane to Bernard Madoff, take advantage of both the human willingness to believe and the weakness of greed. Madoff’s scam was exposed as markets crashed in 2007. For Cochrane, who made a fortune on a false rumour of Napoleon’s death in April 1814 in London, Ian Klaus’ new book – “Forging Capitalism: Rogues, Swindlers, Frauds and the Rise of Modern Finance” – provides not only the facts but the economic context of that early example of market manipulation.

Dec 26, 2014 16:44 UTC

Review: Fixing the CIA – a novel approach

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By Martin Langfield

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Could an outsider best reform the CIA in the wake of torture revelations? In David Ignatius’ novel “The Director,” a pro-privacy tech CEO tries to drag an agency that has lost its way into a new world of tighter rules, leaky secrets and mounting cyberthreats. It’s a good idea, with uneven results for both Ignatius and his hero.

Dec 19, 2014 17:36 UTC

Review: An Icelandic tycoon’s sorry saga

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By Quentin Webb

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Bjorgolfur Thor Bjorgolfsson embodies Iceland’s volcanic rise and fall. He made a fortune in Eastern Europe, lost a bank in 2008 and caused Deutsche Bank years of grief. His memoir, “Billions to Bust – and Back Again,” is self-critical – but unlikely to win him new friends in Reykjavik.

Dec 12, 2014 15:52 UTC
Guest Contributor

Review: “Forgotten Depression” worth remembering

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By Edward Chancellor

The author is a Reuters Breakingviews Columnist. The opinions expressed are his own.

“The central irony of financial crisis is that while it is caused by too much confidence, too much lending and too much spending, it can only be resolved with more confidence, more lending and more spending.” This post-crisis advice from Larry Summers – a former U.S. Treasury secretary, presidential economic advisor and president of Harvard – represents the conventional wisdom of the economic policymaking elite. This is the same elite, you may recall, that failed to see the global meltdown coming in the first place. Could it be that they’ve got things wrong yet again?

COMMENT

Grant keeps peddling his snake oil about a brief and painless 1921 depression. If wages would only collapse we could have growth and prosperity again! In fact, the pain of the 1921 Depression continued until the back end of the 1920′s. Overproduction, deflation and political chicanery by the New York Fed caused the 1924 and 1927 bond buying programs. The two programs were responsible for a great increase in credit that fueled the boom and bust of 1929. Old economic texts from that time provide examples of a great many firms just barely holding on and making little or no profits even in 1929. Today their solution is propagate the old scheme of much lower wages and skimpy benefits as the way to fuel a new economy of revived growth and prosperity for all. It is the old retreaded scheme of the 1800′s- boom and bust with depressions and wars as the main course. We have a good example of slashed wages today in the form of Iceland. Average people working for a small fraction of what they made before the Krona collapsed. This is the old model peddled by Austrian, Laissez-faire and Hoovernomics advocates. The old models are wrong in so many ways. The last act of the New Deal known as Lend-Lease, produced The Golden Age of America. So many decades have passed everyone has forgotten. I enjoy nearly all of James Grant’s writings but Neoliberal snake oil will make a bigger mess than we find ourselves in today.

Posted by snakeoilpeddler | Report as abusive
Nov 28, 2014 16:34 UTC

Review: The shirk ethic – a user’s guide

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By Martin Langfield

The author is a Reuters Breakingviews columnist. The opinions expressed are his own. 

Work can be seen as a blessing or a curse. In his book “Empty Labor: Idleness and Workplace Resistance,” Swedish sociologist Roland Paulsen examines people who take mostly the latter view, asking how and why they shirk, and whether it’s always a bad thing. His study of idleness on the job is enlightening, amusing and sad.

COMMENT

No mention of many people who are often or regularly on standby for some busy or peak work period? To me, unrealistic to expect 100% daily time focused on “billable” hours, to various jobs, and how is this addressed? Those bathroom or other breaks, and indeed even the web surfing or cross-functional talk with other team members can be good for the company too, right?

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Nov 21, 2014 19:32 UTC

Review: Congo’s problems run deeper than oil

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By Kate Duguid

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Save the gorillas and save the Democratic Republic of Congo, urges “Virunga,” a new documentary from Netflix and enviro-mensches Leonardo DiCaprio and Howard Buffett. The film chronicles the machinations of British oil firm Soco International’s exploratory venture in Congo’s Virunga National Park, while park rangers struggle to thwart them.

Nov 14, 2014 15:44 UTC

Review: Through a distorting mirror, darkly

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By Martin Langfield

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

William Gibson’s new novel “The Peripheral” paints future worlds that are built of present fears writ large. Trading algorithms not only roil financial markets, they hunt in packs and travel in time. Nanotech eats people. Money corrupts and spies surveil even more than now. Human decency, though, has at least a fighting chance.

Nov 7, 2014 15:58 UTC
Guest Contributor

Review: The secret cause of economic crises

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By Edward Chancellor

The author is a guest columnist. The opinions expressed are his own.

What is the glue which holds an economy together? Disciples of Adam Smith would argue that self-interest serves as the organising principle. The problem with this way of thinking is that it overlooks the fact that man is not an island unto himself. He is a social animal, who must have constant dealings with other people. Besides, according to John Maynard Keynes, it is impossible to pursue our self-interest rationally, because we don’t have enough information to make probabilistic judgments about the future. Instead, we must rely on irrational animal spirits as a spur to action.

Trust, as Geoffrey Hosking points out in his engaging book, “Trust: A History” (OUP), provides a substitute for prescience. The unchecked pursuit of self-interest can undermine trust. The financial crisis which followed the 2008 bankruptcy of Lehman Brothers reminds us that when trust evaporates, the financial system ceases to function and the economic activity shrinks.

COMMENT

There seems to be an unsatisfying tautology embedded in the proposition. The argument seems to be unlimited self-interest leads to breakdown in trust, breakdown in trust leads to financial disruption. But why not vice versa – financial disruption leads to increase in self-interest? I am not persuaded that the order of causation is correct or that the ultimate causal factor is broached by Hosking’s hypothesis.

Posted by TomTherramus | Report as abusive