Global News Journal

Death-Defying Doha

Just as the World Trade Organisation is organizing an intensive push to complete the Doha round trade talks, the atmosphere among negotiators is as pessimistic as it ever has been. 

“Gloom” and “frustration” are just two of the more printable words circulating at the WTO’s headquarters by Lake Geneva.

It’s all the fault of those people who work and save too much

One thing we’ve learnt from the crisis is that if something sounds funny it probably is. All that talk about slicing and dicing subprime debt to turn it into triple-A securities was hard to understand at the time and now we know it was just the 21st century equivalent of alchemy.

The current debate about the responsibility that surplus countries like China, Germany and Japan share for the crisis has a similar ring.

Plenty of people warned that the huge deficits and debts that countries like the United States, Britain and Spain ran up over the past decade were unsustainable. Recently the argument has been made that the countries that sold the Americans and Brits all those things they bought on credit share the blame.

In economic terms, it takes two to tango: if one country has a deficit, there must be a surplus somewhere else. In fact, if you run a big surplus, you are practically forcing someone else to have a deficit.

Well before the crisis broke, in March 2005, Fed Chairman Ben Bernanke discussed the “global savings glut” as an explanation for the persistent and rising U.S. current account deficit.

In recent weeks, The Economist has subjected the economies of surplus countries China, Germany and Japan (as well as that of the United States) to critical examination in a series on “rebalancing the world economy”. In its latest edition, for example, it describes the Japanese as “serial exporters”.

Criticise Italy at your peril!

Attacks on Italian Prime Minister Silvio Berlusconi in the British press have hit an especially raw nerve as he hosts this year’s G8 summit and some Italian newspapers have had enough.

The summit has come at a particularly sensitive time for the beleaguered Italian leader, who has been dogged for weeks by salacious scandals involving allegations he has a soft spot for underage women and has entertained escort girls.

Britain’s irreverent media have had a field day, delving into his exotic personal life and publishing lurid cartoons of the veteran Berlusconi cavorting with naked women.

Adding insult to injury, the British press have also led the charge in accusing Berlusconi of chaotic organisation of the annual G8 knees-up, with a fanciful story in the Guardian suggesting Italy might be ejected from the rich nations club.

In an image-conscious country where looking bad is a unpardonable sin, that was the final straw for some Italians and a counter-offensive is underway.     Unsurprisingly, Il Giornale newspaper, owned by Berlusconi’s family, has led the charge.

“The attack on Italy? These English are still racist,” the paper wrote on its front page on Friday, taking umbrage at a cartoon showing a grinning Berlusconi holding up a bra.

But other papers have also decided to put their foot down.

from FaithWorld:

Pope urges bold world economic reform before G8 summit

Pope Benedict issued an ambitious call to reform the way the world works on Tuesday shortly before its most powerful leaders meet at the G8 summit in Italy. His latest encyclical, entitled "Charity in Truth," presents a long list of steps he thinks are needed to overcome the financial crisis and shift economic activity from the profit motive to a goal of solidarity of all people.

Following are some of his proposals. The italics are from the original text. Do you think they are realistic food for thought or idealistic notions with no hope of being put into practice?

• "There is urgent need of a true world political authority. .. to manage the global economy; to revive economies hit by the crisis; to avoid any deterioration of the present crisis and the greater imbalances that would result; to bring about integral and timely disarmament, food security and peace; to guarantee the protection of the environment and to regulate migration... such an authority would need to be universally recognized and to be vested with the effective power to ensure security for all, regard for justice, and respect for rights."
• The economy needs ethics in order to function correctly - not any ethics whatsoever, but an ethics which is people-centred..."
• "Financiers must rediscover the genuinely ethical foundation of their activity, so as not to abuse the sophisticated instruments which can serve to betray the interests of savers. Right intention, transparency, and the search for positive results are mutually compatible and must never be detached from one another."
• "Without doubt, one of the greatest risks for businesses is that they are almost exclusively answerable to their investors, thereby limiting their social value... there is nevertheless a growing conviction that business management cannot concern itself only with the interests of the proprietors, but must also assume responsibility for all the other stakeholders who contribute to the life of the business: the workers, the clients, the suppliers of various elements of production, the community of reference... What should be avoided is a speculative use of financial resources that yields to the temptation of seeking only short-term profit, without regard for the long-term sustainability of the enterprise, its benefit to the real economy and attention to the advancement, in suitable and appropriate ways, of further economic initiatives in countries in need of development."
• "One possible approach to development aid would be to apply effectively what is known as fiscal subsidiarity, allowing citizens to decide how to allocate a portion of the taxes they pay to the State."

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