The Londoner

Mervyn King perhaps under-estimates, as many do in this country, the political will that exists on the Continent for keeping the euro show on the road. You might imagine central bankers would have lost their capacity for surprise, after almost four years in which they have made increasingly unconventional and sometimes desperate moves to rescue the world economy. But testifying before a committee of the European Parliament earlier this week, Mario Draghi , the head of the European Central Bank , once again showed his huge talent for knocking an audience back on its heels with one simple sentence. With America on the edge of a fiscal cliff, Japan seemingly permanently paralysed, and China coping with a steeper than expected slowdown, he was asked where in the world there was any glimmer of economic hope.  “The eurozone,” he replied. Well, he would say that, wouldn’t he?   After all, he is the man who said a few month

Plan B Fails, Boehner Marches Toward Cliff People are using words like “meltdown” to describe the failure of the House of Representatives last night to pass “Plan B.” They’re doing that because House votes are traditionally a matter of pure formality, normally having all the suspense of a Politburo vote. John Boehner expected to squeeze 217 votes from his 241 Republican members because, once Boehner had decided on his course, they had no rational choice. It was vote with him or court pure chaos. Some number of his charges – at least a couple dozen – chose chaos. At the same time, the actual stakes of the vote were far from Earth-shaking. Let us consider the progression here. Boehner had been negotiating quite fruitfully with President Obama , and had brought the terms of the emerging agreement closer to where he started than Obama had started, with a deal-hungry Obama apparently ready to move even a bit farther. Then, almo

Can The Last Taxpayer Leaving France Please Turn Out The Lights? The fiscal frenzy that has seized French socialists is not only grinding France ’s economy to a halt; it is also attacking the very foundations of French society by destroying entrepreneurship and responsibility. Taxes are raining down on French citizens , and the promised shelters often disappear before they have even been introduced.   The French government’ s 2013 finance bill has announced confiscatory tax rates on incomes and capital gains, and payroll taxes will be increased as well. But the socialists are shooting themselves in the foot, as such tax rates will destroy wealth and drive out entrepreneurs, capital, businesses, and young people . Thus, tax revenues will ultimately not rise but fall. The message could not be clearer: The number of requests by French citizens to leave France are suddenly up

It's Official: Taxpayers Will Lose Big on the GM Bailout President Obama inspects a Chevrelot Silverado during a visit to the DC Auto Show, Jan. 31, 2012 in Washington, D.C. Obama touted his bailout of General Motors and Chrysler three years ago. When the Treasury Department sold its last remaining shares in insurance giant AIG recently, it announced that it had earned a profit on the controversial bailout that began in 2008. That will not be the case for General Motors. Treasury has finalized a plan to sell its remaining stake in the nation's biggest automaker over the next 15 months, beginning with GM buying back 200 million shares from the Treasury by the end of this year. That will leave the government holding about 19 percent of GM's shares, which it plans to sell throughout 2013 and perhaps into 2014. The government's final exit from GM will mark the start of a new era for the carmaker, which

In the course of making an argument about the coming collapse of China and Russia , Jackson Diehl made a rather forceful statement about Russia’s “deindustrialiation” under the malignant influence of Vladimir Putin.  I don’t want to get pulled into a larger discussion about the accuracy of Diehl’s thesis, needless to say I’m skeptical that both China and Russia will collapse in the near future, but I did want to focus in on his comment on the supposed death of industrial Russia (emphasis added): For Russia, the dilemma is summed up in the prices of oil and gas, and the role those two commodities have come to play during the Putin era. When Putin first took office in 1999, oil and gas earned less than half of Russia’s export revenue. Now that share is more than two-thirds. In part this increase is due to rising prices and production, but Russia has also deindustrialized under Putin . According to a report in Business New Europe, this year the country gave

Political Economy Finest Hour for Draghi and Europe Who is Europe’s most powerful man? If one phrased the question differently — who is Europe’s most powerful person? — the answer might well be Angela Merkel. But the deliberate use of the masculine excludes the German chancellor, leaving the field open to Mario Draghi. This answer can, of course, be disputed. How can one compare power in economics with power in, say, religion? Is it possible to rank the technocratic European Central Bank boss on the same scale, for example, as the pope? The best place to start is with an attempt to understand what power is. The British philosopher Bertrand Russell said it was the production of intended effects. By contrast, Steven Lukes, one of the top contemporary power theorists, said in an interview last week that power was the capacity to make a difference in a manner that is significant. What’s appealing about the way that Mr. Lukes, a professor of sociolo

By Frank Rich The fiscal cliff talks are (surprise, surprise) at an impasse. President Obama has now rejected the GOP's latest uncompromising compromise and insisted that he won't make a deal unless tax rates on the top 2 percent rise. How do you see this standoff playing out? The breathless and phony countdown to the fiscal cliff — What if they can’t agree? What if we fall off? Can America possibly survive? — is media hype, a desperate effort to drum up a drama to keep viewers and readers tuned in now that the election is over. It’s a Road Runner cartoon , Beltway-edition. And it’s going to end with a whimper like the similarly apocalyptic, now long-forgotten Y2K scare of the turn of the millennium. Everyone knows the Republicans are going to fold — the Republicans know   they are going to fold — and the only question to be resolved is when and on what terms. They have z

Coutts & Co, the private bank used by the Queen, has been fined £8.75m for failing to take required precautions against money laundering in the first case to emerge from a Financial Services Authority probe into the way banks handle accounts of overseas politicians and other high-risk customers. The FSA said that Coutts, which is part of the Royal Bank of Scotland, routinely failed to gather crucial information about so-called politically exposed persons, including the source of their funds, and did not properly monitor their transactions. These violations of UK rules continued from 2007 to 2010, when they were uncovered during the FSA’s industry-wide review. Read the full article here.

By Sikander Hayat I have always been very interested in Gwadar and have been a keen observer of the scaremongering that Western and Indian media have been spreading for a long time. They have never understood what Gwadar really is and what are its implications for the people of Baluchistan . Their only concern is China and how China has helped Pakistan build this port of Gwadar to achieve its own strategic objectives.  To understand Gwadar you have to understand Balochistan and its sense of deprivation over last many decades. Balochistan has no proper urban centres apart from the capital city of Quetta and this capital city lies on the Pakistan Afghanistan border. It has suffered hugely from the influx of Afghan refugees and general law and order condition over the border in Afghanistan . It does not make sense to have a capital of a large entity like Balochistan on a volatile frontier and then to hope that this city will become the engine of growth of all of Balochistan.

On June 10, 2000, Queen Elizabeth II opened the high-tech Millennium Bridge, which traverses the River Thames from the Tate Modern to St. Paul’s Cathedral. Thousands of people lined up to walk across the new structure, which consisted of a narrow aluminum footbridge surrounded by steel balustrades projecting out at obtuse angles. Within minutes of the official opening, the footway started to tilt and sway alarmingly, forcing some of the pedestrians to cling to the side rails. Some reported feeling seasick. The authorities shut the bridge, claiming that too many people were using it. The next day, the bridge reopened with strict limits on the number of pedestrians, but it began to shake again. Two days after it had opened, with the source of the wobble still a mystery, the bridge was closed for an indefinite period. Some commentators suspected the bridge’s foundations, others an unusual air pattern. The real problem was that the designers of the bridge, who included the architect Sir No