Countries with divided democratic government that have to pay off constituencies to hold together coalitions often run up government debt and put at risk not only sovereign creditworthiness, but also economic performance. I have in mind Italy, Japan, Israel and Brazil. India, alas, is the posterchild of this phenomenon. By contrast, governments which alternate between parties or at […]
Government debt is mounting all across the developed world. While Emerging Market countries such as China have low debt levels, and Brazil and India are beginning to grow out of their debts, the next crisis (or even the second half of this one) could be a fiscal shock — perhaps even a government bond default — in the industrialized […]
In today’s CSFB column on China (see below), Dong Tao and Christiaan Tuntono report that PBoC Governor Zhou Xiaochuan commented that China would like greater monetary policy flexibility in order to combat inflation. Not that inflation is so high in China, but the Asian giant’s return to breakneck rates of growth (11.9% growth year-on-year in 1Q10) may push prices higher. […]
After Lula, it looks like it’s the battle between Dull and Duller. Brazil’s presidential election in October is an important one, as the country’s success and new-found leadership role within the BRICs and G-20 make Latin America’s largest economy critical on the world stage. Lula has charisma, but his anointed successor from the PT party, Dilma […]
I don’t agree at all with the Economist’s leader this week, which suggests that Barack Obama’s presidency was headed for failure until his health care victory last week. The health care victory was the icing on the cake, coming fourteen months into Obama’s first term, after he rescued the planet from an economic meltdown in a cooperative […]
Bibi was defiant in the Knesset, refusing to halt Jewish settlement in East Jerusalem. The Obama administration has turned up the heat, higher than at any time since 1991 when H.W. Bush/Baker withheld loan guarantees because of settlements. This worries Israeli diplomats. Hillary is set to give a speech at the AIPAC conference beginning in six days. High […]
The Rising Powers blog has devoted some time in recent days to the diplomatic flap over Israel’s embarrassment of US Veep Joe Biden with the announcement of East Jerusalem settlements. See recent posts here and here. To update you, President Lula of Brazil, the one-time labor union firebrand who has united his country of extreme riches and […]
With the voluble Veep safely stateside, Hillary took off the gloves and expressed just how pissed off she and the Commander-in-Chief are with ally Israel, the behavior of which she found an “insult” to the United States. I wrote a piece on the Veep’s visit, found at this link and below. President Obama voiced his […]
The point that Jerusalem should not be divided, should remain under Israeli sovereignty with strong guarantees for Muslim control over Islamic holy sites, should not be dismissed out of hand.
A bad year for film in America. The Hurt Locker was a good anti-war film, but c’mon, Best Picture! The past year may have been a record year for Hollywood financially, but in terms of art, Tinseltown is in decline. Bad film. Bad TV. Bad Late night. What we badly need is some insight into the human […]
Like a thunderbolt from Zeus, financial markets are struck by the perils of a sovereign debt default. In financial crises, markets and policy makers fight the last war. In the Great Depression, countries made the mistake of balancing budgets instead of offering a Keynesian stimulus; in today’s crisis, they are spending like crazy by issuing debt (like […]
People like the analogy. The rise of Germany after 1890, mismanaged by Germany and its adversaries, and the rise of China today — mismanaged or well-managed? A NYTimes article today discusses the conflicting claims over rich offshore oil resources in the South China Sea among China and its much smaller neighbors, notably Vietnam, with which China fought […]
Christiaan Tuntono and Dong Tao of CSFB reported today on the only health care reform taking place in the G-2 at the moment, this one in China (see article below). In the workers’ paradise in East Asia, such welfare state fundamentals as health care, social security, and unemployment insurance are not provided extensively by the state. […]
“Canceling military discussions and calling in the American ambassador have been two standard Chinese measures in response to previous American arms sales to Taiwan. But the announcement of restrictions on the Chinese operations of American companies involved in the arms sales represents an unusual twist…” quoted from a NYTimes article today on the US-Taiwan arms […]
The government of China has expressed indignation over the Obama administration’s decision to sell $6.4 billion in defensive weapons to Taiwan. Taiwan is part of China, Beijing argues, and the U.S. is meddling in a domestic dispute. See article on the arms deal. Obama — with no “reset” button on China — is acting in accordance […]