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Mar 11, 2011
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Were Luddites the victims of 2011-style finances?

The British weavers known as Luddites, who destroyed looms precisely 200 years ago, thought rising unemployment within their ranks was due to machinery. But there’s a case to be made that inflation, money supply expansion, budget deficits and trade barriers were equally to blame. Maybe we haven’t learned much in two centuries.

The first Luddite riot occurred on March 11, 1811, an attack on wide knitting frames in the Nottinghamshire village of Arnold. The rioters were mostly skilled artisans, whose livelihoods had been endangered by what they perceived was a “dumbing down” of their skilled work by automated looms. The riots spread to the main cotton center of Manchester late in 1811. Prime Minister Spencer Perceval’s government, which had a robust approach to public order, made frame breaking a capital offense a year later, executing 17 offenders the following year. After that, Luddite activity gradually died down, petering out after 1817, when the economy improved.

Mar 10, 2011

Crony capitalism lives on for mega-rich

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

By Martin Hutchinson

WASHINGTON (Reuters Breakingviews) – It was a good year for billionaires. Rising markets helped create 200 more of them in 2010, bringing the tally to 1,210, according to the new Forbes rich list published on Wednesday. But when counting their fortunes against domestic economies, Russia and India rate among the highest. In some developing economies, connections are still the fastest track to wealth.

Mar 1, 2011

Govt misses opportunity in Budget 2011

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

By Martin Hutchinson

WASHINGTON (Reuters Breakingviews) – India missed a trick or two with its latest fiscal budget. Projections from Finance Minister Pranab Mukherjee of a moderately declining deficit make sense only by ignoring the funny accounting and assuming the economy keeps rocketing ahead. With state spending, inflation and commodity prices all increasing, India looks like it’s choosing a role model more Gordon Brown than Deng Xiaoping.

Feb 24, 2011
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Why Wisconsin matters to global financial markets

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

WASHINGTON — It’s hard to see how a bucolic Midwestern lakeside college town can matter much to the global financial markets. Yet while Madison, Wisconsin is no Athens or Tripoli, it has become ground zero for a pitched battle between public sector unions and cash-strapped governments over collective bargaining. If the state’s governor can end the practice he may set a precedent for fiscal reform that spreads nationally — and to Washington.

Feb 10, 2011
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Kevin Warsh could become the next Paul Volcker

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

Kevin Warsh’s resignation as a governor of the Federal Reserve removes one of Chairman Ben Bernanke’s closest advisors — and almost certainly the most hawkish of his inner circle. If current policies produce 1970s-style inflation, as many of Bernanke’s critics predict, Warsh could be well placed to take over as Paul Volcker did in 1979.

Feb 4, 2011
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Productivity growth keeps U.S. recovery jobless

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

By Martin Hutchinson

Only 36,000 jobs were created in the United States in January. The feeble reading was adversely affected by winter weather, and a decline in the unemployment rate to 9 percent was more encouraging. But despite stronger economic data of late, job growth remains slower than in previous cycles. One culprit may be cheap money, which leads businesses to substitute capital for jobs, raising productivity.

Jan 25, 2011
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U.S. housing prices likely to keep on dropping

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

U.S. house prices are down 31 percent from their peak. But they may have plenty further to fall. The 1993 low for the Case-Shiller 10-city index was almost another third below the current level in real terms. Lenders had better hope that inflation outpaces rising interest rates, lessening future declines.

Jan 13, 2011
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New Fed may see more dissent — at least privately

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

WASHINGTON — Are hawks with votes more likely to get their way? This year’s voting members of the U.S. Federal Open Market Committee include a trio forming a stronger hawkish group than last year’s lonely Thomas Hoenig. Rocking the boat on the current round of quantitative easing is unlikely. But their differences with Ben Bernanke, the Federal Reserve chairman, may emerge on interest rates.

Jan 7, 2011
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U.S. underclass growing faster than employment

The U.S. underclass is growing faster than employment. Non-farm payrolls increased 103,000 in December, but the ranks of the long-term unemployed rose by 113,000. True, America’s economic recovery is finally accelerating. But the expanding layer of near-permanently jobless people is bad news for long-term fiscal and social health.

At first sight, the last unemployment figures for 2010 were encouraging. While job creation was mediocre, it was accompanied by a total of 70,000 additional jobs in revisions for the two prior months. And the unemployment rate, based on different data, declined unexpectedly sharply to 9.4 percent.

Jan 4, 2011
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De-globalization forces remain strong into 2011

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

The forces of globalization have been challenged by new global market barriers in the Great Recession. In 2011, the de-globalization process even could gather pace if commodity prices continue their surge or if there is another financial crisis.

    • About Martin

      "Martin Hutchinson is a Reuters Breakingviews columnist and writes about emerging markets, particularly in Latin America, and monetary and macroeconomic issues. He is a former merchant/investment banker with 27 years of experience."
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