The Great Debate UK

from Anatole Kaletsky:

When illogical policy seems to work

It’s cynical, manipulative and hypocritical – and it looks like it is going to work. How often do you hear a sentence like this, to describe a government initiative or economic policy?  Not often enough.

The media and a surprisingly high proportion of business leaders, financiers and economic analysts seem to believe that policies which are dishonest, intellectually inconsistent or obviously self-interested in their motivation are ipso facto doomed to fail or to damage the public interest. But this is manifestly untrue. The effectiveness of public policies and their ultimate desirability is in practice judged not by their motivations, but by their results.

Which brings me to the real subject of this column: the improving outlook for the world economy and why many economists and financiers cannot bring themselves to acknowledge it. Let me begin with a striking example anticipated in this column back in March: the boom in house prices and debt-financed consumption that the British government is pumping up in preparation for the general election in May 2015.

In the British budget announced on March 20, George Osborne, the British finance minister, announced a spectacular pre-election giveaway: a program of highly leveraged mortgage lending guaranteed by the government with the stated intention of pumping up British household debt by up to £130 billion. The enormity of this number can be gauged by translating it into an equivalent stimulus relative to the size of the U.S. economy: $1.7 trillion.

from Nicholas Wapshott:

Buying into Big Brother

Whatever high crimes and misdemeanors the National Security Agency leaker Edward Snowden may or may not have perpetrated, he has at least in one regard done us all a favor. He has reminded us that we are all victims of unwarranted and inexcusable invasions of privacy by companies who collect our data as they do business with us.

Some, like Google and Facebook, pose primarily as software companies when their main revenue source, and their main business, is to mine data and sell advertisers access to customers. We knew this already, of course, though it seems many of us would prefer to forget the true nature of the technology firms that have boomed in the last decade. Seduced by their dazzling baubles, we have bought in to Big Brother without truly understanding the true price we are paying and will continue to pay for access to their brave new world.

from Jack Shafer:

Edward Snowden and the selective targeting of leaks

Edward Snowden's expansive disclosures to the Guardian and the Washington Post about various National Security Agency (NSA) surveillance programs have only two corollaries in contemporary history—the classified cache Bradley Manning allegedly released to WikiLeaks a few years ago and Daniel Ellsberg's dissemination of the voluminous Pentagon Papers to the New York Times and other newspapers in 1971.

Leakers like Snowden, Manning and Ellsberg don't merely risk being called narcissists, traitors or mental cases for having liberated state secrets for public scrutiny. They absolutely guarantee it. In the last two days, the New York Times'David Brooks, Politico's Roger Simon, the Washington Post's Richard Cohen and others have vilified Snowden for revealing the government's aggressive spying on its own citizens, calling him self-indulgent, a loser and a narcissist.

Do you want shares in RBS and Lloyds?

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By Matt Scuffham, UK Banking Correspondent.

The government should hand most of its shares in Royal Bank of Scotland and Lloyds Banking Group to the public, an influential political think tank says, in what would be the country’s biggest privatisation.

The proposal would enable 48 million taxpayers to apply for shares at no initial cost and with no risk attached, the think tank said. A ‘floor price’ would be set and taxpayers would make a profit on any rise in the shares above that level.

US-China research ties should be a wake-up call to Europe

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–Dirk Jan van den Berg is President of Delft University of Technology, and was formerly the Dutch Ambassador to China and the Permanent Representative to the United Nations in New York. The opinions expressed are his own.–

Despite much media attention on disagreements, ranging from Taiwan to alleged cyber-attacks, as Chinese President Xi Jinping and U.S. President Barack Obama prepare for their first major summit meeting in California, there is a relatively new and growing basis for warmer ties: scientific and technological collaboration. 

from The Great Debate:

Addressing China’s ‘soft power deficit’

Xi Jinping (L) met with President Barack Obama in the Oval Office of the White House in Washington, Feb. 14, 2012.  REUTERS/Jason Reed

As Chinese President Xi Jinping prepares for his landmark summit with President Barack Obama in California Friday and Saturday, the critical mission of improving China’s image in the world could well be uppermost in his mind.

from The Great Debate:

A cry for worker fairness

People rescue a garment worker trapped under rubble of the collapsed Rana Plaza building in Bangladesh, April 24, 2013. REUTERS/Andrew Bira

The tragedy at the Rana Plaza clothing factory was a sober reminder that Bangladeshi garment workers still lack basic rights and protections. My mother was a seamstress. She worked in the textile factories of northern New Jersey. I saw how hard and tiring her work was. But it was never lethal. And it shouldn’t be.

How will the privatisation of RBS and Lloyds affect gilt supply?

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–Sam Hill is UK Fixed Income Strategist at RBC Capital Markets. The opinions expressed are his own.–

The return of RBS and Lloyds to the private sector is moving up the agenda but as the UK government prepares to set out the strategy for privatisation, the spotlight will, once again, fall on the gilt market and the public finances.

from The Great Debate:

Bradley Manning and the real war on leaks

Army Private First Class Bradley Manning in handcuffs for his motion hearing in Fort Meade in Maryland June 6, 2012. REUTERS/Jose Luis Magana

The most significant dispute over leaks this week is not in Washington, where Attorney General Eric Holder is under fire for the searches of journalists' files. It's 40 miles north in Fort Meade, Maryland, where the trial of Army Private First Class Bradley Manning begins Monday.

Is a low corporate tax rate really in Ireland’s benefit?

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

The tax affairs of Apple and Google have brought attention onto Ireland for all the wrong reasons of late. Ireland’s reputation has undeniably been dragged through the mud as the corporate tax affairs of some of the world’s largest companies come under scrutiny in Westminster and Capitol Hill.

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