Opinion

The Great Debate

How far right can Republicans go?

U.S. Senate Republican Leader Senator Mitch McConnell (R-KY) speaks to supporters during a campaign stop at the Lexington Airport in Lexington, Kentucky

The line between the Republican establishment and the Tea Party has blurred.  That spells trouble for the GOP in the long run.  Possibly this year, more likely in 2016.

It might not look like it right now. The Republican establishment, which has been on the defensive since the Tea Party emerged in 2009, is on a roll. Establishment candidates have won contested primaries in North Carolina, Florida and now Kentucky and Georgia.  Republican voters seem to be turning away from the kinds of fringe candidates they went for in 2010 and 2012,  like Christine O’Donnell in Delaware (“I am not a witch”) and Todd Akin in Missouri (“legitimate rape”). Candidates like that cost Republicans their chance to take back control of the U.S. Senate.

So this year, the party stands a good chance of taking over the Senate and expanding its majority in the House of Representatives.  The Obama era is over!

Oh, wait.  Barack Obama is still president.  And the Republican Party’s long-term problems are far from resolved.  For one thing, the party’s good fortune this year is mostly the result of temporary advantages:  – Democratic Senate seats up for grabs in strongly Republican states; Democrats defending House seats they won narrowly in 2012.

Tillis speaks with supporters before a debate between the four top-polling Republican candidates in North Carolina for the U.S. Senate, at Davidson College in DavidsonFor another thing, the Tea Party is not exactly vanquished.  Establishment candidates may be winning primaries — but that’s because most of them have moved right and pre-empted the Tea Party’s message.

from Breakingviews:

Rob Cox: ITT’s ghost hangs over Silicon Valley

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

The number of entrepreneurs in Silicon Valley familiar with the work of Harold Geneen would hardly fill a 140-character tweet. After all, Geneen wasn’t a technologist, the inventor of a new computing language or the founder of a seminal startup. He was the original M&A machine – the man whose deal-making 50 years ago turned ITT into a multibillion-dollar conglomerate.

As tech giants like Apple, Amazon, Facebook, Alibaba, Rakuten and Google mature and canvass the globe for businesses they can buy that are a few steps removed from their core activities, Geneen’s story is becoming more relevant. These titans of the internet age are embarking on diversification strategies not entirely dissimilar from those of Geneen’s ITT and its many followers, including LTV, Transamerica and Gulf+Western.

How Supreme Court rulings encourage racial discrimination

mahurin-for-troutt-

Recent events have driven home two stark truths: racism continues to percolate throughout our society and conservative Supreme Court justices appear determined to prevent us from doing anything about it.

The odious racism of outlaw Nevada rancher Cliven Bundy and Los Angeles Clippers owner Donald Sterling is painfully juxtaposed with the Supreme Court’s decision in Schuette v. BAMN, which reinforces the message that minority interests suffer in the hands of a majority of the court.

In giving Michigan’s white majority free rein to invalidate the use of lawful affirmative action by the state’s universities, the court continues its assault on remedies to redress the enduring effects of America’s racial caste system. This string of Roberts Court decisions threatens to undermine the foundation of anti-discrimination laws.

from Breakingviews:

Alibaba tries out role of the noble monopolist

By Ethan Bilby

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

Alibaba is trying out a new role: the noble monopolist. With an apparent 84 percent share of online consumer goods spending, it effectively owns the country’s Internet shoppers. Its payment affiliate is the biggest game in town. Both are attractions for its upcoming initial public offering. Alibaba’s long-term challenge is to keep showing that dominance helps the market rather than restricts it.

The company isn’t like China’s traditional monopolists. It comes from popularity rather than official handouts or restrictions – unlike, say, tobacco or salt, or the oligopolies that control telecoms and banking. Where “bad” monopolists promote inefficiency, Alibaba has done the opposite, connecting buyers and sellers who would never otherwise meet.

from Breakingviews:

AT&T puts shareholders on hold for DirecTV

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

AT&T is putting its shareholders on hold to buy DirecTV. Its $67 billion acquisition of the satellite TV operator announced on Sunday brings with it an unexpectedly robust $1.6 billion of cost savings. Even so, these don’t quite cover the cost of the premium. In any case, AT&T says it will use the money to roll out rural broadband service. Customers and regulators are getting the first call.

A little more than three years after AT&T launched an eventually torpedoed $39 billion bid for T-Mobile US, it has found another acquisition target big enough to match its ambitions. Instead of expanding in domestic cellular, though, the $190 billion company led by Randall Stephenson is aiming to marry video and broadband as the competitive landscape for television and internet service reshapes for the mobile and digital era.

from Breakingviews:

Europe slides towards the next Minsky Moment

By Neil Unmack

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

There’s little doubt that markets think the euro crisis is over. Bond yields have fallen below pre-crisis levels for most of the countries formerly known as peripherals; the grab for southern European assets is a crowded trade. Could this be the prelude to the next Minsky moment?

The last crisis fit perfectly the pattern described by the American economist Hyman Minsky. Investors’ exaggerated belief in stability leads them to price assets for perfection - for example no defaults by euro zone sovereigns. Then some imperfection arrives - a serious possibility of default - and there is a violent outbreak of instability - the euro crisis.

The best role for Kiev provisional government? Exiting.

kiev rally

Successful provisional governments are quickly forgotten. Failed provisional governments, like the one during the 1917 Russian revolution, can be remembered forever.

Ukraine’s current provisional government already has, in many ways, outstayed its welcome. If the May 25 presidential election produces a definitive result, however, it still has a chance of quietly leaving the stage.

Provisional governments have one essential task: restore legitimate rule. In virtually all cases, it is a race against time. Indeed, the designation “provisional” carries a lame-duck status, since it conveys a sense of temporariness that undermines the stability of a regime.

Why is the West betting against climate change?

The Las Pulgas Fire is seen burning near military structures at Camp Pendleton, California

With wildfires ravaging San Diego County, this year’s fire season is getting off to an early — and destructive — start.

A hotter and drier Southwest may result in the loss of the lion’s share of its forests to fire before this century is done, if extraordinary measures to protect them aren’t soon undertaken. Instead of extraordinary measures, however, Washington has made only token efforts to address this looming crisis.

That danger is already here for much of the West. Drought in Southern California and Texas, and near-drought elsewhere, means that forests are tinder-dry and expected to get even drier during summer. Which is scary — considering so many Americans now live or spend their summers in the “wildland urban interface,” the wooded areas in the West where fire danger is the greatest.

from Breakingviews:

Review: Brazil’s toughest tests lie off the pitch

By Dominic Elliott 

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

Michael Reid’s astute new book has a stark warning: the country of samba, sex and soccer is teetering on a knife-edge. “Brazil: The Troubled Rise of a Global Power” explains why protests against this year’s World Cup are turning increasingly violent. Reid, a journalist for The Economist, persuasively urges a return to the broad liberal consensus that served Brazil so well between 1994 and 2006.

Brazil taxes and spends like a European country and shares other bad habits with the West. Yet it produces “distinctly Latin American” results, says Reid. GDP per person is still a disappointing $12,000, about two-thirds of the level of Argentina, and it remains the world’s twelfth most unequal country. The masses understandably want more opportunity, as well as better hospitals, schools and public transport.

Fires in Vietnam could ultimately burn Beijing

vietnam

The spilling of blood and burning of factories by anti-Chinese rioters sweeping across Vietnam reinforces Beijing’s message to other countries claiming territory in the South China Sea: resistance is costly and ultimately futile.

But a region in which anti-Chinese sentiment grows and where sovereignty disputes disrupt trade and economic growth will burn Beijing as well. Over the long term, a commitment to peaceful dispute resolution in accordance with international law, including some concessions on historic claims, would serve China better than its current path.

China made the provocative first move in this latest incident by deploying a massive oil rig to the contested Paracel Islands. There was no doubt that Vietnam would respond, and China prepared by sending an armada of 80 ships — including seven naval vessels along with the rig. The two countries’ maritime forces are now locked in a standoff with aggressive and dangerous maneuvers, water canons and collisions at sea.

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