The Great Debate UK

How do you police without a force?

–Laurence Copeland is a professor of finance at Cardiff University Business School. The opinions expressed are his own.–

You will often have heard it said that the euro zone cannot ultimately survive without fiscal union. This is complete nonsense. The truth is that, even with a full fiscal union, it cannot survive – at least, not with any form of fiscal union that one can imagine all the members signing up to.

This may be culturally difficult for Germans to understand. It is not that they lack experience of the problems of controlling spending by sub-central governments, because German Lander certainly do get into financial difficulties – three or four are virtually bankrupt at the moment, including the City of Berlin, no less. The problem is that this experience is not relevant to the euro zone for two very important reasons.

First, the willingness of frugal Lander such as Bavaria to subsidise a spendthrift like Berlin may not be unlimited, but it is undoubtedly far greater than the willingness of Germans (or Dutch, Finns or Estonians) to subsidise South Europeans. Secondly, on the whole, Germans are people who accept almost unquestioningly the categorical imperative to obey the law, even when, as in the case of the internal finances of the Bundesrepublik, the law is so complex that nobody except the experts understands it.

from The Great Debate:

A ‘terrorist’ is no ‘enemy combatant’

Photo

The alleged Boston bomber is talking. So far, both what he’s saying and the fact he’s saying it underscore that the government made the right decision in charging him as a criminal in a U.S. federal court, rather than designating him an “enemy combatant” in military custody.

Dzhokhar Tsarnaev has been charged with using weapons of mass destruction, a charge that could land him the death penalty. He’s reportedly told investigators that he and his brother acted on their own, without any instructions from al Qaeda, and that the attack was motivated by a desire to “defend Islam.”

from The Great Debate:

Boston bomber acted as ‘enemy combatant’

The Obama administration announced on Monday that suspected Boston Marathon bomber Dzhokhar Tsarnaev would “not be treated as an enemy combatant” who would be tried in a special military tribunal. Instead, White House spokesman Jay Carney declared, “we will prosecute this terrorist through our civilian system of justice.”

But this decision is a grave mistake for legal, political and practical reasons. As we sift through the challenging implications of last week’s events, we must aim to deter future acts of terror on our soil by U.S. citizens and legal residents. Treating and trying domestic terrorists as enemy combatants  can provide such a deterrent.

from The Great Debate:

Can Tsarnaev be ruled an ‘enemy combatant’?

Photo

Three major legal questions are now swirling around the Boston bombing suspect, Dzhokhar Tsarnaev.  Since his dramatic capture Friday night, the public debate has already begun muddling these issues.

An overarching question is whether the United States can legally treat Tsarnaev as an enemy combatant, and if not, whether his rights as a civilian defendant can be altered because he is accused of terrorism. President Barack Obama has taken a measured, but concerning, approach on this.

Sizing up Carney

–Kathleen Brooks is research director at forex.com. The opinions expressed are her own.–

Back  in the last quarter of 2012 when Mark Carney was announced as the Governor-elect of the Bank of England, imaginations ran wild about the new arsenal he could bring to the BoE’s toolkit for getting the UK economy moving again. GDP targeting and unlimited QE were not beyond the realms of possibility. Carney in the past had dismissed suggestions that central bankers were out of options when it came to stimulating over-leveraged developed economies. However, as we get closer to his start date the debate has shifted regarding monetary policy.

from John Lloyd:

The nuance behind the iron

There’s no time more apt for murmuring the ending of Brutus’s speech in Julius Caesar than the week of Margaret Thatcher’s funeral: “The evil men do lives after them/the good is oft interred with their bones.” No time better, either, to add that the “evil” that, in this case one woman, did is little examined by her detractors, who prefer to stick to a diabolical version of her 12-year rule.

Margaret Thatcher (narrowly) won the 1979 election because the Labour government of the 1970s, under Prime Ministers Harold Wilson and James Callaghan, had unsuccessfully tried to make a contract with the trade unions. In such a contract, pay would have been calibrated to productivity, and increases would be low in order to bring down high rates of inflation and to keep up investment in the socialized education, health and welfare institutions that disproportionately benefited the lower classes. It was the kind of social deal that the Germans and the Scandinavians had and still – in part – have: one that produces economies that, not by chance, have escaped the worst of the economic buffeting of the past five years.

from The Great Debate:

Thatcher: Master of the ‘unexpecteds’

Photo

The passing of Margaret Thatcher comes at a time when the great theme that shaped her years as Britain’s prime minister – the frontier between government and the private sector – is again the focus of serious public debate. Her historic achievement was to widen the frontiers of the “market” and, as she said, to have “rolled back the frontiers of the state.”

There is, however, a pendulum in this relationship between government and private sector. The role of government in the economy has expanded greatly since the 2008 financial collapse, along with government debt. So we will likely again see a struggle to rebalance the respective realms of state and market. And it will again be a battle.

We need data centres to thrive

–Cyrille Brisson is EMEA Vice President of Power Quality at Eaton. The opinions expressed are his own.–

Last month, British wholesale gas prices surged to a record high after one of the UK’s main import pipelines was temporarily shut by a technical fault, and continuing wintry weather led to delays restocking the domestic gas supply.

Dear Mark

–Laurence Copeland is a professor of finance at Cardiff University Business School. The opinions expressed are his own.–

Dear Mark Carney,

As you arrive in your new office, you will not be short of free advice, least of all from economists. Nonetheless, like a supporter of the away team valiantly trying to make himself heard above the roar of the home crowd, this is my feeble attempt to compete against the chorus of voices calling for ever more, ever larger doses of QE, ever lower interest rates and even more devaluation of the Pound.

from David Rohde:

A failure to lead at the U.N.

Photo

It is the world’s most important organization, yet remains one of the most dysfunctional.

This week a former United Nations employee described a pervasive culture of impunity inside the organization – one in which whistle-blowers are punished for exposing wrongdoing. James Wasserstrom, a veteran American diplomat, said he was fired from his job and detained by U.N. police – who searched his apartment and placed his picture on wanted posters – after he reported possible corruption among senior U.N. officials in Kosovo.

  •