The Great Debate UK
President Barack Obama's decision to impose safeguard tariffs on imported tyres from China has drawn predictable howls of outrage from economists, think tank staff and editorial writers -- none of whom has seen their job exported to China. It would be more constructive if they devoted the same effort to devising ways to compensate losers from globalisation in order to shore up waning public support for trade liberalisation.
Between 2000 and 2008, almost 4 million jobs were lost in U.S. manufacturing (22 percent of the total), many as the result of offshoring and increasing competition from lower-cost manufacturers in China and elsewhere in Asia.
Over the same period, the federal government provided just $1 billion per year in extended unemployment benefits and retraining under the Trade Adjustment Assistance (TAA) programme. In the fiscal year ending September 2008, TAA helped fewer than 100,000 workers who had lost jobs as a result of changing trade patterns.
No one questions the strong theoretical argument in favour of free trade over protectionism.
The problem is the highly uneven incidence of costs and benefits from the policy. Benefits tend to be distributed fairly widely among consumers in the form of cheaper prices. Costs are concentrated among those workers and households that lose income and jobs as the result of competition from lower-cost and more efficient producers abroad.
In 1873, Walter Bagehot wrote that "the business of banking ought to be simple; if it is hard it is wrong." He would have struggled to recognize today's banking system.
It is not just ever more ornate derivatives that bend the mind. Financial firms themselves have become fabulously complicated. Citigroup lists 2,061 subsidiaries and affiliates while the institutional chart of JPMorgan Chase is 267 pages long.
It beggars belief that humbled telecom equipment supplier Alcatel-Lucent could be scooped up by a Chinese rival with nothing better to do. Huawei or ZTE seem credible candidates. The question is, why would they ever bother?
That didn't stop shares of Alcatel-Lucent from rocketing up as much as 21 percent on Wednesday on rumors of an unnamed suitor. Momentum was helped by a rating upgrade on the depressed stock by French broker Natixis. The shares later settled back somewhat to trade at 2.75 euros, up 12 percent on the day in Paris.
Around the world, governments are struggling to drum up buyers for the mountain of bonds they need to sell. And that's especially true for big deficit, low savings countries like Britain and the United States.
The returns they are offering on conventional government bonds are low and there's the risk of inflation eating away at their value. Perhaps it is time for a different approach.
It's not often you get to lift the hood and watch a power struggle going on in the engine room of General Motors. But the vice-president of GM Europe, John Smith, has just provided tantilising details of the arguments over the rival bids for Opel/Vauxhall, the main European arm of the fallen U.S. auto giant. Smith is the chief negotiator on the sale of Opel.
In a blog apparently intended to reassure Opel staff, but accessible to the public, he insisted GM had not specified a preferred bidder. But he made clear his own preference for the bid from Belgian financial investor RHJ International, which is loosely related to U.S. private equity fund Ripplewood, over the offer by Canadian-Austrian car parts maker Magna and its Kremlin-backed Russian partner Sberbank.
from Pakistan: Now or Never?:
Joshua Foust is an American military analyst. He blogs about Central Asia and Afghanistan at Registan.net . Reuters is not responsible for the content - the views are the author’s alone.
It would be an understatement to call opium cultivation in Afghanistan America's headache. The issue of illegal drug cultivation and smuggling has vexed policymakers for three decades, and led to a multi-billion dollar campaign to combat the phenomenon.
A new poll shows public opinion in Pakistan has turned sharply against the Taliban and other Islamist militants, even though they still do not trust the United States and President Barack Obama. Reporting on the poll, our Asia specialist in Washington, Paul Eckert, said the WorldPublicOpinion.org poll, conducted in May as Pakistan's army fought the Taliban in the Swat Valley, found that 81 percent saw the Pakistani Taliban and al Qaeda as a critical threat to the country, a jump from 34 percent in a similar poll in late 2007. Read Eckert's report here. (Photo: Pakistani Taliban in Swat, 2 Nov 2007/Sherin Zada Kanju)
The poll shows a wide divergence between Pakistani public opinion and the views of the Taliban on the implementation of sharia, a religious issue sometimes cited to help explain earlier tolerance of the militants. Some 80 percent of the respondents said sharia permits education for girls, one of the first services the Taliban close down when they gain control of an area. And 75 percent said sharia allows women to work, which the Taliban do not.
- Luke Baker is a political and general news correspondent at Reuters. -
The mountains and deserts of southern Afghanistan are far removed from the elegant charms of Trieste in northern Italy, but there will be a link between the two this weekend.
Foreign ministers from the Group of Eight nations meet in the Italian city on the Adriatic on Thursday for three days of talks, with the state of play in Afghanistan, as well as developments in Iran and the Middle East, front and centre of their agenda.
The murder of Kansas abortion doctor George Tiller has been condemned by prominent groups and activists on both sides of this divisive and emotive issue.
But the language used by some opponents of abortion rights who reviled Tiller for his work providing late-term abortions remained very strong.
Well-intentioned legislation often has the opposite effect. The European Commission’s new alternative investment directive threatens investment trust companies, an attractive form of pooled investment.
The Commission aims to “enhance investor protection.” However, in addition to hedge funds, the original French and German target, investment trusts would be caught in the new regulatory net. Unlike other pooled funds, investment trusts offer transparency, low fees, the discipline of a public limited company and a vote.