The Londoner

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

A Fiscal Deal Is Emerging—But Is It Any Good? An agreement on the "fiscal cliff" may be near. On Friday, House Speaker John Boehner endorsed the idea of higher tax rates on upper incomes--a real concession that allowed serious negotiations to go forward. Over the weekend, he and President Obama spoke by telephone. On Monday, they met at the White House. They could reach an agreement within the next few days—not a detailed blueprint for legislation, mind you, but an agreement on the basic principles. Of course, all the usual caveat apply. Talks could break down all over again, congressional delegations could throw a fit, and so on. The terms are still murky and, presumably, under discussion. The details will make a huge difference. But the broad outlines, first reported by  Ezra Klein  in the  Washington Post  on Monday afternoon, are coming into view. [Update: For details on the latest White House counter-offer, leaked to reporters on Mon

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

  European governments neared a deal on Wednesday to give the European Central Bank new powers to supervise banks across the bloc after Germany signaled a readiness to compromise on the scope of the ambitious financial reform. Last week German Finance Minister Wolfgang Schaeuble had clashed openly with his French counterpart Pierre Moscovici over key elements of the plan, but with time running out to meet a year-end deadline, they narrowed their differences, raising hopes of a breakthrough. Agreement on a common bank supervisor is a crucial first step towards a broader "banking union", or common euro zone approach to dealing with failing banks that in recent years have dragged down countries like Ireland and Spain. "We think that we have a good chance to reach a deal today," Schaeuble told journalists ahead of a meeting in Brussels with his European Union peers. "My intention is that we find a solution to the

At first glance, the British bank HSBC’s agreement to pay $1.9 billion to settle a money-laundering probe seems like very good news. It is the largest penalty ever imposed on a bank; the U.S. government accused HSBC of transferring funds “through the U.S. from Mexican drug cartels and on behalf of nations such as Iran that are under international sanctions.” Furthermore, the settlement is a “deferred-prosecution agreement,” which means that U.S. authorities can resume the case if HSBC does not strengthen internal oversight and avoid similar violations for the next five years. (Most settlements between big Wall Street firms and the U.S. government remove the threat of charges for the violations; the firms then make the same violations again a few years later .) Despite the impressive fine, the settlement still leaves much to worry about as regards Wall Street’s disproportionate power over the government. To begin with, while smaller companies’ executives  are (justly) head

When Spanish banks led by Santander and BBVA – along with a host of Spanish non-financial companies – began investing heavily in Latin America in the 1990s, it was quickly dubbed a “reconquest” of the New World by its original colonial masters. Nearly two decades later, the parallel is even more striking. Just as the continent’s gold and silver mines did 400 years ago, Latin America’s banking industries are providing a basis of support and defence at a time of increasing insecurity in Spain. Last year, Santander and BBVA made more money from their operations in Latin America than they did at home. This year, reckons Credit Suisse, more than €5bn of Santander’s estimated €7bn of profits will come from Latin America, with Brazil generating more profits than its operations in Europe (including the UK) combined. Of course, one reason for the rising importance of Latin America for both banks is the dwindling role played by profits at home. In the past few years, the sig

There have been lower and meaner presidential election campaigns: Richard Nixon’s “amnesty, abortion and acid” jibe against George McGovern in 1972 comes to mind. Even so, this was a gruelling and ill-tempered contest President Barack Obama faces an immediate test of leadership, not merely to overcome the divisions between Democrats and Republicans that have largely paralysed Washington. The greater challenge is how to rekindle a spirit of can-do optimism in a nation beaten down by the global financial crisis .  “What America needs right now is confidence,” says a Wall Street CEO, “all the ingredients are in place for a recovery but we need predictability and strong executive leadership.” This year’s election will be remembered largely as a referendum on economic management, if not an entire philosophy of government. Having inherited an economy in meltdown, Mr Obama spurned regressive tax cuts and deregulation and resorted to government borrowing and state in

Back away, dear reader, from the edge of the roof: All is not lost. The U.S. economy, it is true, has shown signs of spinning apart, but solutions to many of its problems remain in sight—perhaps, within reach. In the following pages, we examine eight of the predicaments America faces in trying to regain its economic strength. Some of the problems seem fixable, even in this era of political discord. Some—well, miracles do happen. INNOVATION By Don Peck Deep recessions aren’t without silver linings. One, typically, is a subsequent burst of entrepreneurial activity and new-product innovation. Laid-off employees start new ventures, based on ideas their former employers might have ignored; sclerotic companies fail, making room for nimbler enterprises. Needless to say, the United States could use such a burst today. Breakthrough innovation is what propels an economy quickly forward, creating new jobs as old ones obsolesce and disappea

President Obama has promised that by 2020 the US will regain its position as the global leader in the proportion of young people becoming graduates An integral part of the American Dream is under threat - as "downward mobility" seems to be threatening the education system in the United States. The idea of going to college - and the expectation that the next generation will be better educated and more prosperous than its predecessor - has been hardwired into the ambitions of the middle classes in the United States. But there are deep-seated worries about whether this upward mobility is going into reverse. Andreas Schleicher, special adviser on education at the Organisation for Economic Co-operation and Development (OECD), says the US is now the only major economy in the world where the younger generation is not going to be better educated than the older. "It's something of great significance because mu