Opinion

The Great Debate

from Edward Hadas:

Russia-Ukraine conflict shows money isn’t the root of all war

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Many people think politics is really a branch of economics. When the United States invaded Iraq in 1991, the common cry was that it was all about oil. On the same thinking, rich countries were indifferent to the brutal civil war in the Democratic Republic of the Congo – which has cost 5.4 million lives, according to the International Rescue Committee – because the economic stakes were too low to matter. This economic reductionism goes on in developed countries too. Pundits and pollsters argue that elections are won and lost above all else on the economy.

Such ideas can be traced back to the philosopher Karl Marx. He believed that material considerations motivated everything people do, including how they are governed. In modern surveys, people routinely say that the desire for better jobs or higher incomes is not what drives their voting behaviour. On Marx’s view, these respondents are either lying, or in denial. They may not realise that economic discontents and aspirations drive their action – and all of history.

Followers of this dialectic should be disconcerted by current events. Only a die-hard Trotskyite could see economic issues behind the conflicts in Ukraine and Iraq.

Economic explanations are inapplicable to the strategy of Vladimir Putin, even if the president of Russia is trying to reconstruct the glory of the supposedly Marxist Soviet Union. Putin treats narrow economic motivations with disdain. His creeping invasions are not cheap, the occupied areas are mostly in dire economic straits, and retaliatory sanctions will create economic hardship for all of Russia.

For Putin, power is clearly more important than prosperity. His propaganda machine is trying to persuade the Russian people to think the same way. That creates a good test for the neo-Marxist reading of history. Russia is sufficiently rich and large to tough out widespread foreign hostility, especially with some help from China and other sympathetic governments. However, tight sanctions will make the Russian people poorer. Will they put up with the required economic sacrifices, or will they eventually prefer greater prosperity to national pride?

Perry’s indictment: Crime and punishment, Texas-style

Texas Governor Perry, a possible Republican candidate for 2016 presidential race, answers questions from reporters following appearance at business leaders luncheon in Portsmouth

It’s a big country, where states have their own legal peculiarities, political cultures and definitions of what makes a debilitating political scandal. Take Texas, for example, where the Republican governor, Rick Perry, has been indicted for abuse of office.

In the past 25 years, we’ve seen politicians and government officials increasingly treat scandal less as catastrophe and more as just another cost of doing business. Perry, however, has taken this to a completely new level: He is wearing his indictment as a badge of honor and has smoothly returned to his 2016 presidential campaign without missing a beat.

His is a compelling change of pace. Consider: It’s been a hell of a decade for scandal among state governors — and virtually all reacted with an advanced degree of alarm. In 2004, Democratic Governor Jim McGreevey of New Jersey, threatened with a lawsuit by another man, promptly held a press conference, revealed himself as a “gay American” and announced his impending resignation. In March 2008, news broke that New York’s Democratic governor, scourge-of-Wall-Street Elliot Spitzer, had patronized call girls. Another press conference, another resignation. Later that year, Illinois Democratic Governor Rod Blagojevich was arrested by federal agents and charged with corruption for his attempt to sell Barack Obama’s vacated Senate seat. Blagojevich launched an animated attempt to clear his name before he was impeached, removed from office, tried and sent to prison.

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.

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.

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