Opinion

The Great Debate

Holder follows GOP lead in easing harsh drug laws

Attorney General Eric Holder issued a directive last week, instructing all U.S. Attorneys to revisit current drug cases involving low-level, non-violent offenders and waive harsh mandatory sentencing requirements where appropriate.

In doing so, the White House is turning its attention to one issue — criminal justice reform — where Democrats and Republicans have actually found common ground.

Though crime levels have been falling for the last 20 years, incarceration rates and prison costs have sharply increased. It is the states, particularly those under Republican control, that are leading the way here — enacting reforms that have cut incarceration rates and costs and led to significant taxpayer savings.

The United States, which has 5 percent of the global population, houses 25 percent of the world’s inmates. This high U.S. prison population has been primarily driven by non-violent drug offences.

Mandatory minimum sentencing requirements are responsible for much of the drastic growth in per capita inmate costs, which have increased more than 34 percent in just the last 12 years — from $21,603 to $29,027. By comparison, the U.S. economy grew by 24 percent and the population grew by 11.5 percent during that same period.

IAEA and Iran: Resolving the nuclear impasse

President Hassan Rouhani generated a positive buzz yesterday with his United Nations General Assembly statements about Iran’s determination to resolve the nuclear impasse with the international community. Though he argued Tehran was not prepared to give up its enrichment program, the new president declared “nuclear weapons and other weapons of mass destruction have no place in Iran’s security,” adding that his government was now committed to “time-bound and result-oriented talks to build mutual confidence and removal of mutual uncertainties with full transparency” to resolve any doubts.

While this lays the basis for the resumption of negotiations with the United States and its allies, we need not await the results to test Rouhani’s sincerity. That can begin Friday, September 27, when Iranian and International Atomic Energy Agency officials sit down in Vienna in a long-scheduled meeting to break the protracted deadlock over unanswered questions about the breadth of Tehran’s nuclear enterprise.

Director General Yukiya Amano summed up the stakes in his September 9 statement to the IAEA’s board of governors: “The agency has not been able to begin substantive work with Iran on resolving outstanding issues, including those related to possible military dimensions on Iran’s nuclear programme.” The Vienna talks now provide the best opportunity to make progress.

Why girls’ education can help eradicate poverty

Educating girls and young women is not only one of the biggest moral challenges of our generation, it is also a necessary investment for a peaceful and poverty-free world. Until we give girls equal access to a good quality education, the world will continue to suffer from child and maternal mortality, disease and other byproducts of poverty.

This week, when world leaders at the United Nations General Assembly debate why many of the Millennium Development Goals remain out of reach, they should look no further than education disparities across the developing world. UNESCO’s Education for All Global Monitoring Report team has released new evidence that shows how education gives girls and young women the freedom to make decisions to improve their lives.

Education is linked to the age at which women marry and have children. In sub-Saharan Africa and in South and West Asia, child marriage affects one in eight girls; one in seven gives birth by the age of 17. Education can empower these girls to have a say over their life choices — by giving them the confidence to speak up for their rights, and to demand the opportunity to continue their studies. Our analysis shows that if all girls in sub-Saharan Africa and South and West Asia had primary education, there would be 14 percent fewer child marriages. If all girls received a secondary education, 64 percent fewer girls would be locked into marriage at an age when they should still be in school.

With unemployment high, France forces stores to close early

The French like to refer to the Champs Elysées in Paris as “the most beautiful avenue in the world,” and 300,000 people stroll up and down it every day to see for themselves, many of them tourists looking to shop. No surprise, then, to find that retailers from Nike to LVMH are willing to pay premium rents for space on the avenue, which runs in a straight line from the Place de la Concorde up to the triumphal arch at Etoile.

Just don’t try to buy anything in the evening. This week a Paris court of appeal ordered the cosmetics chain Sephora to close its flagship store on the avenue at 9 p.m., rather than staying open until midnight during the week and until 1 a.m. on Fridays and Saturdays. It was the latest ruling over store-closing hours that has already forced several other big name retailers in Paris both on and off the avenue to close early, including Apple, France’s Monoprix and the Japanese clothing retailer Uniqlo. Two other stores on the Champs Elysées, Abercrombie and Fitch and perfumer Marionnaud, are also facing legal action.

France has a raft of regulations governing shopping, and its labor unions ensure that they are strictly enforced. As well as strict limits on opening and closing hours, the rules only allow sales during certain periods of the year, price promotions are circumscribed, loss leaders are illegal, store sizes are limited and even the types of shops allowed to open up are regulated. The Swedish clothing retailer H&M fought a long legal battle against the Paris city authorities before it won permission in 2008 to open on the Champs Elysées; City Hall vetoed the plan on the grounds that it was one clothing store too many, and would change the character of the avenue. The issue was finally decided in H&M’s favor by the Conseil d’Etat, the nation’s highest administrative court.

Only Generation Lockdown can resolve America’s gun debate

On the website of the Nationwide Children’s Hospital in Columbus there is a statistic worth knowing if you live in Ohio. About 1,100 residents of the Buckeye State lose their lives at the trigger of a firearm every year. That includes homicides, accidental shootings and suicides.

It’s also a number that you’d think would be worth knowing if you represented the great state of Ohio in Congress. Yet until April it was not a figure that rolled off the tongue of Senator Rob Portman. Far more astonishing than Portman’s ignorance of the number of his constituents killed by guns every year are the circumstances in which this gap in his education was filled. Portman didn’t hear it from the hospital, a newspaper or cable news. He learned it from a 13-year-old boy named James Barden.

James had come to Washington with his mother and father and other grieving parents four months after his freckle-faced brother Daniel (who would be eight years old on Friday) was massacred in his first-grade classroom at Sandy Hook Elementary School, along with 19 of his classmates and six dedicated educators. These families had come to implore senators to support a bipartisan bill to ensure all gun sales are accompanied by a simple background check.

How ambitious the world?

For more than a decade, the very idea of multilateralism often seemed to be on life support — damaged by the Iraq invasion and its messy aftermath, buffeted by the global economic crisis and bruised by the difficulty of coming to agreement on critical trade and climate issues in Doha and Rio, respectively. Now, the world’s attention is riveted on whether the United States and Russia’s agreement to avert the immediate crisis triggered by the use of chemical weapons in Syria can be effectively overseen by the United Nations Security Council.

But a more consequential test for multilateral cooperation is looming, one that will shape the world for decades to come. That is whether, by 2015, the international community — from the halls of U.N. headquarters to the poorest corners of the globe — can identify our shared challenges and collectively act to solve them.

2015 marks the deadline for important negotiations on development, climate change, finance and trade. And the jury is still out on whether the world’s nations can reach agreement in any of these areas — much less all of them. Given the enormous stakes involved, all the U.N. member states must seize this opportunity to revive global partnership.

from The Great Debate UK:

How central bankers have got it wrong

If you asked someone to list the chief qualities needed to be a good central banker I assume that the list may include: good communicator, wise, attention to detail, clear thinking, credibility, and good with numbers.  However, in recent months these qualities have been sadly lacking, most notably last week when the Federal Reserve wrong-footed the markets and failed to start tapering its enormous QE programme.

The market had expected asset purchases to be tapered because: 1, Ben Bernanke had dropped fairly big hints at his June press conference that tapering was likely to take place sooner rather than later and 2, because the unemployment rate has consistently declined all year and if it continues moving in this direction then it could hit the Fed’s 6.5% target rate in the coming months.

In the aftermath of the September Fed decision the markets, analysts and Fed commentators were lambasted for being too hasty and for trying to second guess the Fed. While I agree that the markets can get too hung up on the movements of the US central bank, I think that the criticism is unfair this time.

America’s aging population undermines monetary policy

Last week the Fed announced it would keep buying assets, for now, to keep the economy afloat. But that raises the question: why haven’t all the Fed’s efforts so far worked better?

One reason is that the economy constantly evolves and each recession is different; that alters the way monetary policy is supposed to work. The latest recession is notable for the way it destroyed households’ wealth. Median household net worth fell nearly 40 percent between 2007 and 2010. The severity of the recession also heightened awareness that the world is riskier than many people thought. Each of these factors make people want to save more. The Fed’s policy is to keep interest rates low to juice demand. But the state of household balance sheets going into the recession and the aging U.S. population may be why the Fed has not been more successful.

The Fed is currently buying bonds and mortgage-backed securities to keep interest rates low. The low rates are supposed to increase demand through several different channels. One way is through firms; if you lower real interest rates it’s cheaper for them to invest, expand and hire. Also, low rates encourage more consumption. They lower the returns to saving so it’s cheaper to consume today instead of in the future. This is called substitution effect. Or, the lower rates change how wealthy you feel — this is a wealth effect.

For U.S.-Iran, it’s all in the timing

Four years after President Barack Obama famously extended his hand of friendship to Iran, Tehran finally seems willing to unclench its fist. The most decisive geopolitical handshake of this decade may take place today at the United Nations.

Iran’s new president Hassan Rouhani and Obama may have this encounter at the luncheon of U.N. Secretary General Ban Ki-moon Tuesday or in the U.N building’s corridors.

This new opening has taken the world by surprise. Washington’s dual track policy over the past three years — a combination of a little bit of diplomacy and a whole lot of strangulating sanctions — has produced a hardening of the Iranian position. Tehran’s nuclear activities have continued unabated, while its regional policies, particularly its support for the Assad regime in Syria, have intensified.

On U.S.-Iran deal, devil is in the details

The feel-good mood engendered by promising overtures from Iran’s new president Hassan Rouhani and President Barack Obama has raised hopes for a settlement in the Iranian nuclear crisis. But the devil — especially in this case — is in the details.

The nuts-and-bolts of Iran’s nuclear program, and whether Tehran can give guarantees that it is not designed to make nuclear weapons will determine whether a deal with the United States is possible.

Here is a look at what Iran has achieved in a decade of intense nuclear work; what the main areas of concern are, and how the Iranian program can be reined in to give adequate guarantees that Iran does not seek the bomb.

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