The deal reportedly reached Thursday to release another 130 billion euro bailout for Greece is just one more temporary fix. Greece will get enough new cash to avoid the messy default it faced a few weeks hence, and the pain of adjustment will be shared by private bondholders, who are expected to write off about half the value of their Greek bonds; the European Central Bank, which this week agreed to forgo potential profits on Greek bonds it bought at a discount; and the Greek public, who will see benefits …
IMF Managing Director Christine Lagarde has been talking up the need for greatly expanded resources to bail out ailing European economies. European nations have offered to channel about $200 billion of their own funds to themselves through the IMF (a kind of gentleman’s money-laundering to avoid restrictions in their own treaties). Lagarde wants others to add $300 billion to that kitty. The U.S. Treasury has said no, and rightly so. Replacing current euro-debt with IMF loans, no matter how rigorously structured, will only prolong the agony. The failing euro-zone economies …
The Obama Administration’s decision to waive provisions of the Jones Act last month when releasing oil from the Strategic Petroleum Reserve is typical of this Administration’s disregard for the principle of equal protection under the law when it becomes too inconvenient. For example, we’ve seen well over 1,000 waivers of the new health care law for those with the influence to get them. The Jones Act waiver was even more transparently political, as the only real crisis at the time of the oil release was a crisis in President Obama’s …
Democracy is the best way we know to choose leaders. Where individuals offering alternative visions or policies compete fairly and honestly for leadership, governments are regularly refreshed and cleansed of corruption. And of course, true democracy is about much more than elections. It involves the rule of law, political pluralism, and respect for civil rights. The lack of democracy in the Middle East, and the problems that causes, are well-documented. Hereditary monarchs and military dictators dominate governments throughout the region. Their non-democratic governments tend to abuse human rights and suppress …
In his State of the Union address, President Obama used innovation as one of the key words in elaborating his vision for America’s economic future. He embraced the word quite often during his speech, mentioning “innovation” eight times. If other variations of the word, such as innovate and innovative, are counted, that increases the total to 10. Other primary words he used included jobs (12 times) and world (nine times). Obviously, the President was eager to talk about innovation and set the tone by saying, “The first step in winning …
President Obama reportedly spent much of his meeting this week with Chinese Premier Wen Jiabao urging action to revalue the Chinese Yuan relative to the dollar. Simultaneously, Democrats in Congress are pushing a bill that would tack countervailing duties on Chinese imports in response to an alleged distortion of the exchange rate. Whether the Yuan is undervalued is a hard question. Given the many distortions in the Chinese economy, and despite assurances by protectionists to the contrary, we cannot really know, absent a free currency market, what the real exchange …
The willingness of some in the media to accept even the most vapid of statements from international leaders as evidence of major policy change provides evidence daily that reporters, like the rest of us, can let their hopes get in the way of their judgment. A case in point is today’s editorial in the Washington Post by David Ignatius on the G-20 summit getting underway in Toronto. For Ignatius, President Obama’s recent letter to his G-20 counterparts, in which he called for restraint in easing government spending, fewer exports by …
In the often Orwellian world of government policy pronouncements, the Obama economic team is trying for new ground, with “self-sustaining” recovery, understood at least by the dictionary to mean “maintaining itself by independent effort,” now understood, according to Timothy Geithner and Lawrence Summers, as requiring extensive government support and intervention. In an op-ed published June 23 in The Wall Street Journal, the two most senior Administration economic officials call on their G-20 colleagues to maintain government spending, establish a global framework for financial regulation, and to make efforts in agricultural …
A page on the Canadian Government’s G-20 Toronto Summit website promises payments to citizens “to mitigate adverse financial consequences” as a result of the meeting of world leaders June 26-27. Unfortunately, the adverse consequences being referred to are only those incurred as a result of the security precautions that shut down cities when the world’s power brokers come to town. Those economic costs can run into the millions, as the citizens of Pittsburgh found out when they hosted G-20 leaders last year. The real economic damage to fear, of course, …
