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from The Great Debate:

Should Obama mimic David Cameron’s austerity?

By Nicholas Wapshott
The opinions expressed are his own.

In medieval times, a key member of a monarch’s retinue was the food taster, a hapless fellow who ate what his master was about to eat. If the taster survived, the food was deemed safe for the king’s consumption. President Obama has a taster of sorts in David Cameron, the British prime minister, who has embarked upon an economic experiment that echoes the recipe of wholesale public spending cuts and tax hikes needed if both sides in Congress are to agree to raising the federal government debt ceiling. How the British economy is faring offers Obama an idea of what a similarly radical policy of cutting and taxing here would mean to the American economy.

Cameron’s election in May 2010 coincided with the start of the Greek debt crisis. The Bank of England governor Mervyn King warned him that the public debt in the UK was so large that Britain, too, might see its lending become impossibly expensive, so Cameron decided that there was no time to lose in putting the fiscal books in order. He decided to slash public spending by 25 per cent over four years and immediately raise value added tax on goods and services from 17.5 to 20 per cent. Such a radical remedy found favor with the rump of British Conservatives who felt that Margaret Thatcher’s free-market, small government, “sound money” policies of the Eighties had not been pressed to their limit. In turn, Thatcher’s prescription to reduce the size of the state derived from her favorite thinker Friedrich Hayek, the author of “The Road to Serfdom,” who believed like many Tea Party supporters that government intervention inevitably leads to tyranny.

Cameron’s experiment in applying a radical cure to the British economy caught the attention of a number of conservatives here, among them George W. Bush’s speechwriter Michael Gerson, who wrote in the Washington Post, “If Cameron’s approach works -- dramatically cutting deficits without stalling economic growth -- it will be an obvious, powerful example for America.” “If only the Obama administration and the U.S. Congress had been so courageous. Instead, they are choosing to put off these big decisions,” moaned Matthew Bishop, New York bureau chief of the Economist, in a piece co-authored with Michael Green in the Wall Street Journal. Even Treasury Secretary Tim Geithner thought the British experiment worth trying. “I am very impressed, as one man’s view looking from a distance, at the basic strategy [Cameron] has adopted,” Geithner told the BBC.

So, how is the British economy doing? Under Cameron’s Labour predecessor, Gordon Brown, Britain fell into depression, with the economy shrinking during the worldwide banking meltdown to minus 2.1 per cent in the last quarter of 2008 and the first quarter of 2009. By the time of the general election in May 2010, however, growth had slowly climbed to 1.1 per cent per quarter. With Cameron taking the reins and announcing his radical economic plan, the economy slumped back to minus 0.5 per cent in the fourth quarter of last year, before returning to growth of 0.5 per cent in the first quarter of this. But the latest economic growth figures, released this week, show a slowdown in economic activity, to a miserable 0.2 per cent growth between April and June. Cameron’s chancellor George Osborne has blamed the poor figure on widespread partying that accompanied the wedding of Prince William and the effects of the Japanese tsunami. The double-dip recession that Cameron’s critics predicted has not yet taken place, but the figures are clearly headed in the wrong direction.

from Breakingviews:

In all, News Corp’s papers could be worth $6 bln

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

LONDON -- The Sun is Britain’s biggest newspaper, outselling its two tabloid rivals combined by 50 percent. Yet it might fetch less than 500 million pounds ($800 million), were Rupert Murdoch’s embattled News Corp to sell up. Add in The Times and the Sunday Times, and a deal might be struck for 800 million pounds ($1.3 billion). His entire newspaper empire, including the Wall Street Journal, New York Post, and nearly 150 Australian titles, may be worth between $3 and 6 billion. The industry’s terrible economics, and the UK hacking scandal, both discourage M&A. But trophy buyers could emerge.

from Newsmaker:

Thomson Reuters Newsmaker with Sebastian Coe and Hugh Robertson

To mark the one year countdown to the London Olympics, Thomson Reuters held a Newsmaker event on July 21 with four-time Olympic medalist and chairman of the London Organising Committee for the Olympic Games, Sebastian Coe and Minister for Sport and the Olympics, Hugh Robertson MP. Below are highlights from the evening.

Legacy of 2012 includes economic dividend: Robertson

Transport system ready for 2012 demands: Coe

Olympic ticket sell-out is coup for London: Coe

Stadium dispute threatens future Athletics bid: Robertson

Testing crucial during Olympic countdown: Coe

UK on top of Olympic security threat: Robertson

Coe welcomes "Blade Runner" Pistorius to London 2012

Thomson Reuters Newsmaker with Sebastian Coe and Hugh Robertson

from Newsmaker:

Tick, tick, tickets – defusing an Olympic PR bomb

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-Adrian Warner is BBC London's Olympics Correspondent. The opinions expressed are his own.-

The morning after his surprise 800 metres defeat by Steve Ovett at the 1980 Moscow Olympics,  Seb Coe was sitting in his bed in the Olympic village when former decathlete and close friend Daley Thompson stormed into the room. Thompson went straight to the curtains and opened them up.

from Felix Salmon:

A few Murdoch questions

After taking phone calls about Rupert Murdoch on Brian Lehrer's show this morning and then immediately doing an hour-long diavlog with Alex Massie on the subject, I'm beginning to get a little Murdoch-ed out. But there are three newish points that are worth raising.

Firstly, what was the mechanism by which it was agreed that Rupert and James Murdoch would appear in parliament together? Having James by his side was a godsend for Rupert, and James clearly took his role as a shield for his father very seriously. I'm sure the more aggressive MPs would have preferred to be able to grill Rupert on his own, as they did Rebekah Brooks. How did that not happen?

from Felix Salmon:

The Murdochs pass their parliamentary trial

The biggest surprise for me, at the Murdoch hearings today, was the lack of political theater and crocodile tears of remorse. I was expecting a ceremonial piling-on -- a group of politicians all jumping at a very rare opportunity to tell Rupert exactly what they thought of him, with the billionaire mogul just sitting there and taking the insults, reiterating over and over again just how very sorry he was about everything that has happened.

But that's not how it turned out at all. The politicians didn't grandstand nearly as much as their US counterparts are wont to do, and instead asked substantive questions. The Murdochs, for their part, spent more time blustering and denying knowledge of key events at key times than they did apologizing.

Constitution in crisis as tyrannical journalists devour cowed politicians

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A sordid tale of excess and brutality, of a world dominated by journalists with their ears to the keyhole, of tyrannical newspapers wielding remarkable power and of a political class not only cowed, but consumed, by that power.

Sound familiar? With two of Britain’s most senior policemen out of a job, the prime minister under pressure for his serenading of News Corp and one of the world’s most powerful press barons, in the form of Rupert Murdoch, summoned to testify to parliament, it would be one way of describing the current state of affairs.

from Felix Salmon:

Could News Corp end up in play?

The increasingly-fragile nature of Rupert Murdoch's hold on News Corp has refocused attention on its dual-class share structure. As John Gapper noted last week, such structures aren't particularly good for minority shareholders like you or me. And if you plug today's share price into the Breakingviews Murdoch discount calculator, you'll see that the company is trading at roughly 30% below its fair value. Or, to put it another way, if Murdoch and his voting control were to disappear tomorrow, the shares could jump a good 45%.

Murdoch has a seemingly inviolable 39.7% position in the Class B voting shares of News Corp. No one else comes close: the only other shareholder with more than 2% of the Class B stock is Prince Alwaleed, with his 7% stake. The Class B shares are exactly the same as Class A shares, with the single difference that Class B shares have voting rights at the annual meeting and Class A shares don't. Both classes of share trade on the Nasdaq; here's a chart of how they've behaved over the past few years. The blue line is the B shares, the red line is the A shares, and the yellow line is the difference between the two. It's currently about 45 cents per share, down from a high of $2.60 per share in April last year.

from Left field:

ICC name best test team of all time. Right or wrong?

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The ICC has unveiled the best test team of all time as voted for by fans on the governing body's website. The ICC offered a shortlist to choose from.

Here it is:

Virender Sehwag

Sunil Gavaskar

Donald Bradman

Sachin Tendulkar

Brian Lara

Kapil Dev

Adam Gilchrist (wk)

Shane Warne

Wasim Akram

Curtly Ambrose

Glenn McGrath

Is it a bit 1980s focused? No Englishmen either but maybe that is not a big shock. Sehwag probably the biggest surprise.

from Felix Salmon:

News Corp’s future

The abrupt departure from News Corp today of Rebekah Brooks (early) and Les Hinton (late) is yet more proof that News Corp is flailing around and incapable of getting out in front of the phone-hacking story. It's a bit like the way in which the cost of bailing out Lehman Brothers would rise by a few billion dollars an hour at the height of the financial crisis in 2008: every day of bluster and delay just makes this crisis worse for News Corp and for Rupert Murdoch.

If the News of the World had been shut and Brooks and Hinton both defenestrated back in 2009 when the hacking allegations first surfaced, that would have been more than enough to signal that News Corp was taking them seriously, was saying that such behavior was unacceptable, and was drawing a firm line under an unfortunate and illegal episode. Now, however, such actions only serve to make News Corp look even more guilty -- especially since the time gap between the resignations served to draw the story out over two news cycles and makes the whole thing look ad hoc and teetering on the back foot. There's now a clear sense that the virus is moving up and across the News Corp org chart, from the News of the World to News International to Dow Jones, with no sign that its virulence is diminishing.

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