Opinion

The Great Debate

from Breakingviews:

Ushering Eric Cantor to revolving door

By Rob Cox

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

The following is a fictional letter that could be circulated in the corridors of K Street, the canyons of Wall Street and the hedgerows of the Hamptons this summer:

From the desk of Rick Rooter, Executive Placement Specialist

Dear Sirs and Madams:

I am writing to you as the exclusive agent for a former high-ranking member of the House of Representatives who will soon be eligible for employment by your organization. My client has asked to remain anonymous until he has cleared all remaining business with the current Congress, though the following will provide you with sufficient information based on his voting record, extensive legislative experience and public statements to assist with your consideration of his candidacy as a senior adviser to your business, both in counseling executives on important public policy matters and engaging with your clients on the same.

In the first instance, my client is particularly well suited for Wall Street despite never having worked directly in the financial industry. As you shall see, though, his qualifications extend far beyond banking, with a deep record of defending the interests of the food, restaurant and tobacco industries, and other major employers of import to the United States economy.

The aforementioned candidate fought hard in the legislative trenches against the bureaucratic forces threatening the lifeblood of American capitalism. He was a staunch opponent of the onerous Dodd-Frank Wall Street Reform and Consumer Protection Act, a proposal opposed by institutions large and small, and their respective trade associations. Ahead of the legislation’s passage just over four years ago, the candidate called the legislation “a clear attack on capital formation in America.”

from Breakingviews:

China’s Hong Kong experiment faces biggest trial

By Peter Thal Larsen

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

China’s experiment with Hong Kong is facing its biggest trial. The former British colony has mostly thrived in the 17 years since it was handed back to the People’s Republic. But a planned “Occupy Central” democracy protest is about to test Hong Kong’s openness – and China’s patience.

Hong Kong has defied the gloomy predictions of its demise that greeted the 1997 handover. Despite competition from Singapore and Shanghai, it has become a stronger financial and commercial centre. The authorities in Beijing have mostly respected Hong Kong’s special status, which former paramount leader Deng Xiaoping summarised as “one country, two systems”. Many citizens who decamped to Canada or Australia before 1997 have returned.

from Breakingviews:

James Hoffa: Let sun shine on corporate donations

By James Hoffa
The author is a Reuters Breakingviews guest columnist. The opinions expressed are his own.

Companies increasingly are playing an outsized role in U.S. elections. In many cases, they donate money to advocate controversial policies that could antagonize their customers and undermine their businesses. Because so many of these contributions are not disclosed, however, shareholders are left in the dark and unable to evaluate potential conflicts or risks.

Investors are demanding improved corporate disclosures through shareholder resolutions and by urging the Securities and Exchange Commission to adopt new rules. Despite hundreds of thousands of letters from investors urging the agency to take action, it dropped the issue from its list of regulatory priorities earlier this year.

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.

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.

from Breakingviews:

Modi’s big win gives India way out of policy limbo

By Andy Mukherjee 

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

Indian voters have just handed Narendra Modi their most decisive mandate in 30 years. The opposition politician’s landslide win ends a tortuous era of coalition politics that has stymied policymaking. It also offers India a way out of its current limbo.

Though all the votes have not yet been counted, Modi’s Bharatiya Janata Party is on track to capture a few more seats than the 272 it needs for a simple majority in the lower house of parliament. No single party has managed to do that since 1984, when Rajiv Gandhi won a landslide victory following his mother Indira’s assassination. The BJP-led coalition’s tally will likely cross 325.

from Breakingviews:

What Lagarde should’ve told Smith College’s grads

By Christopher Swann and Rob Cox
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

International Monetary Fund boss Christine Lagarde wimped out of speaking at Smith College’s commencement after a student petition accused the fund of supporting “patriarchal systems.” The fund has made many mistakes over the years. But that critique is mostly old hat. The IMF, particularly under Lagarde, has fostered social spending and championed female rights. Here’s what she ought to have told the 672 women graduating from the university in Northampton, Massachusetts on May 18.

Women of Smith

Congratulations on graduating from one of the world’s greatest women’s colleges. I understand that many of you had reservations about having me as your speaker. Student opposition also recently caused former Secretary of State Condoleezza Rice to cancel a similar address to the students at Rutgers.

from Breakingviews:

Rob Cox: Solving America’s homegrown Putin dilemma

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

As the eagle flies, it's a long way from Bunkerville, Nevada to Slovyansk, Ukraine. Right now, though, the two places have something insidious in common: armed vigilantism. That parallel sadly seems to escape the many American policymakers who have accused President Barack Obama of adopting the logic of appeasement in his dealings with Russian President Vladimir Putin. They're missing a big point. If the United States can't uphold the rule of law at home, it can have no credibility abroad.

Over the weekend, South Carolina Senator Lindsey Graham joined the chorus of Republicans branding Obama the new Neville Chamberlain. He told CBS's "Face the Nation" that the president is "delusional" and his latest economic sanctions "should have been called the Russian economic recovery act" for helping bolster the Russian stock market and rouble last week.

New York’s election suggests the waning of identity politics

To most Americans, the results of New York City’s local elections don’t matter much and often shouldn’t. Yes, there are City Hall occupants who manage to command a national stage, notably incumbent Mike Bloomberg, but in the 2013 race there have been no candidates even approaching his stature (or his wealth). The candidate who received the most votes in Tuesday’s primary, Public Advocate Bill de Blasio, is unknown outside New York City and until recently not well known inside it.

Yet there is an aspect of the 2013 campaign that might resonate well beyond New York’s five boroughs: voter behavior suggests that the era of identity politics may have ended or at least peaked.

Throughout the modern era, politicians in New York City (and many other places) have seen elections as a competition among voting blocs determined by ethnic and racial identities: African-American, Latino (which until the 1990s in New York City was primarily Puerto Rican), Jewish, white (which can be further broken down into the larger nationalities represented in New York, such as Italian, Irish, etc). Strategic alliances, endorsements, and policy choices could be used to deliver, somewhat reliably, these groups of voters to chosen candidates. As nonwhites became a majority some time in the mid-1980s, and the pool of viable candidates more diverse, most nonwhite voters saw a path of empowerment through supporting one of their own: that is, given a choice, African-American voters would usually vote disproportionately for the African-American candidate, Latino voters for the Latino candidate, and so on. In recent decades, women and LGBT-identified voters also became important self-aware constituencies, although the LGBT vote is difficult to measure and its effects have been seen more on neighborhood races than citywide ones.

When Republicans critique Obama, they critique their own policies

To all the vaunted traditions of the absurd partisan charade in Washington, we can now add another: Republicans attacking President Barack Obama for the results of their own policies. Most recently we saw it last Wednesday. No sooner did the Bureau of Economic Analysis (BEA) announce Wednesday morning that our gross domestic product had shrunk by 0.1 percent in the last three months of last year than Republicans began disseminating misleading talking points.

In an instant missive titled “President 0.1%,” the Republican National Committee complained, “Four years and $5.8 trillion later, Obama presides over an anemic economy.” Quoting Reuters, the RNC ominously warned, “The contraction ‘could spur fears of a new recession…” “Anti-growth policies and an anti-business White House produce just that — a lack of growth,” declared Representative Sam Graves, R-Mo., chairman of the House Small Business Committee. “The bottom line is that America’s economy continues to struggle primarily due to President Obama’s penchant for political brinkmanship and the pervasive uncertainty caused by his focus on higher taxes, regulation and Obamacare,” said Representative Kevin Brady, the Texas Republican and incoming chairman of the Joint Economic Committee.

On Friday, we learned that the economy added 157,000 jobs in January, 247,000 jobs in November and 196,000 in December, well above earlier estimates. The GOP was not so eager to discuss that.

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