Opinion

The Great Debate

Senate retirements narrow cap-trade window

– John Kemp is a Reuters columnist. The views expressed are his own –

kemp
LONDON – Yesterday’s announcement by Senator Byron Dorgan (Democrat, North Dakota) that he would not seek a fourth term in November, coupled with today’s expected announcement by Senator Chris Dodd (Democrat, Connecticut) that he won’t seek a sixth term, will remove two veterans, once secure legislators from the Democratic caucus.
It highlights the mounting problems confronting congressional Democrats facing voters in November’s midterms amid high unemployment, a relatively unpopular agenda led by the administration, and concerns about the party’s capture by special interests.

Dodd’s retirement is not surprising, given his plummeting poll numbers and criticism for being too close to the banking and insurance industries he regulates as chairman of the Senate Banking Committee but which have been major campaign contributors.

Despite trying to reinvent himself as a populist in recent months, the legislation he has worked on has sometimes appeared to show too much favouritism for the industry. He has also run into criticism for receiving VIP mortgages in 2003 from Angelo Mozilo’s failed Countrywide Financial.

Dorgan’s departure is more unexpected. He was re-elected with 68 percent of the vote in 2004. But the state leans towards the Republicans, breaking 53-45 percent in favour of Senator John McCain last year. A poll published last month showed Dorgan trailing behind popular state governor John Hoeven in a hypothetical match up.

China tightening could undo risk markets

saft2.jpgThe key decision for global markets in 2010 will very likely not be made in Washington but Beijing, where emerging inflation and a property bubble may push China to begin reining in expansionary policies earlier than will suit the developed world.

After returning to a breakneck pace of growth with amazing speed, there are already signs that China is weighing steps to curtail the bank lending that has been a huge source of stimulus, helping to drive property and other asset prices sharply higher.

“We emphasize the role of the reserve-requirement ratio, although the ratio was internationally seen as useless for years and it was thought central banks could abandon the tool,” Chinese central bank Governor Zhou Xiaochuan said at a Beijing conference on Tuesday.

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