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Posts Tagged ‘Project Syndicate’

Europe Must Oppose Trump

Posted by hkarner - 20. August 2019

Jeffrey D. Sachs, Professor of Sustainable Development and Professor of Health Policy and Management at Columbia University, is Director of Columbia’s Center for Sustainable Development and of the UN Sustainable Development Solutions Network. His books include The End of Poverty, Common Wealth, The Age of Sustainable Development, Building the New American Economy, and most recently, A New Foreign Policy: Beyond American Exceptionalism.

European leaders should recognize that a significant majority of Americans reject Trump’s malignant narcissism. By opposing Trump and defending the international rule of law, Europeans and Americans together can strengthen world peace and transatlantic amity for generations to come.

NEW YORK – With Donald Trump due to visit Europe again for the G7 summit later this month, European leaders have run out of options for dealing with the US president. They have tried to charm him, persuade him, ignore him, or agree to disagree with him. Yet Trump’s malevolence is bottomless. The only alternative, therefore, is to oppose him.

The most immediate issue is European trade with Iran. This is no small matter. It is a battle that Europe cannot afford to lose.Trump is capable of inflicting great harm without compunction, and is now doing so by economic means and threats of military action. He has invoked emergency economic and financial powers that aim to push Iran and Venezuela to economic collapse. Den Rest des Beitrags lesen »

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The End of “Peak Germany” and the Return of France

Posted by hkarner - 19. August 2019

Arnab Das

Arnab Das is Global Market Strategist at a London-based asset management firm.

Jacek Rostowski was Poland’s Minister of Finance and Deputy Prime Minister from 2007 to 2013.Europe works best, as the old quip has it, with the Russians out, the Germans down, and the Americans in. Today’s new European order has the Russians up, the Germans on the way down, the Americans potentially bowing out, Britons struggling toward Brexit – and France rising.

LONDON – At first blush, the result of the European Parliament election in May, and the subsequent nomination of the European Union’s new leadership team, augur continuity and not disruption for the bloc. Nationalist parties failed to make any significant gains in the election, and then large Western European status quo powers hand-picked federalists for the top EU jobs. In particular, the choice of Ursula von der Leyen to be the next president of the European Commission – making her the first German to hold the post in a half-century – seemed to confirm Germany’s continued dominance in Europe.

Yet undercurrents frequently diverge from the surface flow. History suggests that hegemons often assume formal leadership as their power wanes, not when it is strengthening. Today, several factors threaten Germany’s status as the EU top dog – and France stands to be the main beneficiary.Until now, German dominance has rested on two main pillars: seemingly permanent American defense guarantees, and the country’s world-leading manufacturing firms and massive net-creditor position. Den Rest des Beitrags lesen »

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When Leninists Overreach

Posted by hkarner - 19. August 2019

Nina L. Khrushcheva is Professor of International Affairs at The New School. Her latest book (with Jeffrey Tayler) is In Putin’s Footsteps: Searching for the Soul of an Empire Across Russia’s Eleven Time Zones.

Russian President Vladimir Putin and Chinese President Xi Jinping have for years flexed their foreign-policy muscles and consolidated power at home. But Russia and China now appear increasingly isolated on the world stage, and the question now is whether they have finally gone – or soon will go – too far.

MOSCOW – Ongoing street protests in Hong Kong and Moscow have no doubt spooked the authoritarian duo of Chinese President Xi Jinping and Russian President Vladimir Putin. The Moscow protests, the largest in many years, must be keeping Putin up at night, or they wouldn’t be dispersed with such unabated brutality. Yet rather than hold a dialogue with the people, Putin has been demonstrating that he is in control, even preening for photos in a tight leather outfit with his favorite motorcycle gang.

Nonetheless, the demonstrations have become a poignant sign of Putin’s declining popularity, including among Russian elites, whose views matter in ways that other forms of public opinion do not. For two decades, the Russian elite’s rival factions have generally seen Putin as the ultimate guarantor of their interests – particularly their financial interests. But as Russia’s economy has sunk into sanctions-induced , Putin’s leadership has started to look like more of a roadblock than a guardrail. Den Rest des Beitrags lesen »

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Trump’s One-Way Economy

Posted by hkarner - 14. August 2019

Jim O’Neill, a former chairman of Goldman Sachs Asset Management and a former UK Treasury Minister, is Chair of Chatham House.

If these were normal times, recent global developments would be showing up as sharply rising risk premia. But with monetary policymakers trying to sustain the current growth cycle in the face of disruptions from an incompetent US administration, these are anything but normal times.

LONDON – Nowadays, when people ask me how I am, I answer, jokingly, that I’m doing great, so long as I ignore Donald Trump’s presidency in the United States, Brexit, the crisis of the United Kingdom’s major political parties, and the performance of Manchester United.

But recently, the litany of unfortunate circumstances has gotten so long that the joke is hard to pull off. One now must also list the political in Hong Kong, a burgeoning diplomatic and economic dispute between Japan and South Korea, the Indian government’s of Jammu and Kashmir’s autonomy – and India-Pakistan tensions more generally – and growing turmoil within South Africa’s ruling African National Congress.Making matters worse, this has been a particularly rough summer in terms of the weather: heat waves across Europe and the US have served as a forceful reminder of the growing effects of climate change on our everyday lives. Den Rest des Beitrags lesen »

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The Real Reason for China’s Rise

Posted by hkarner - 12. August 2019

Zhang Jun is Dean of the School of Economics at Fudan University and Director of the China Center for Economic Studies, a Shanghai-based think-tank.

The standard account of China’s economic rise focuses on its state capitalism, whereby the government, endowed with huge assets, can pursue a wide-ranging industrial policy and intervene to mitigate risks. This explanation is wrong.

SHANGHAI – China’s rapid economic rise in recent decades has astonished the world. Yet the reasons behind the country’s success are often misunderstood and misinterpreted.

The rise of China widely attributed to its state capitalism, whereby the government, endowed with huge assets, can pursue a wide-ranging industrial policy and intervene to mitigate risks. Accordingly, China owes its success, first and foremost, to the government’s “control” over the entire economy.This explanation is fundamentally wrong. True, China has benefited from having a government with the capacity to implement comprehensive and complementary policies efficiently. With leaders not subject to the short election cycles that characterize Western democracies, China’s central leadership can engage in visionary and comprehensive long-term planning, exemplified by its Five-Year Plans.Moreover, the Chinese state’s power has buttressed its implementation capacity, which dwarfs that of most developing and transitional economies. A strong state – and the social and political stability that it underpins – has been essential to enable China’s rapid advancement in areas like education, health care, infrastructure, and research and development. Den Rest des Beitrags lesen »

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Elizabeth Warren’s Trade Makeover

Posted by hkarner - 11. August 2019

Dani Rodrik, Professor of International Political Economy at Harvard University’s John F. Kennedy School of Government, is the author of Straight Talk on Trade: Ideas for a Sane World Economy.

Senator Elizabeth Warren’s plan is not inherently protectionist. But if it occasionally requires some degree of trade protection – to shield labor, local communities, the tax regime, or environmental rules – it would be because there is a domestic program worth protecting.

CAMBRIDGE – US Senator Elizabeth Warren’s new trade plan solidifies her credentials as the Democratic presidential candidate with the best policy ideas. United States trade policy has long been shaped by corporate and financial interests, enriching those groups while contributing to the erosion of middle-class earnings and undermining many local communities. Warren’s plan represents a radical reimagining of trade policy in the interests of society at large. 

As Warren points out, we live in a world where import tariffs are for the most part already quite low. Trade negotiators today spend most of their time arguing not about import taxes and other barriers at the border, but about behind-the-border regulations such as intellectual property rules, technical standards, industrial policies, and the like. Contemporary trade agreements seek “deep integration” rather than “shallow integration,” to use a distinction coined by my Harvard colleague Robert Lawrence.Deep integration can foster greater levels of international trade and investment, but it is also more intrusive on domestic social bargains. It places constraints on countries’ tax and regulatory policies, and on their ability to uphold their own social and labor standards. Den Rest des Beitrags lesen »

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Trump’s Manipulation of Currency Manipulation

Posted by hkarner - 11. August 2019

Paola Subacchi

Paola Subacchi, Professor of International Economics at Queen Mary Global Policy Institute, Queen Mary University of London, is the author of The People’s Money: How China is Building a Global Currency.

By treating international trade as a zero-sum game in which the US makes its own rules, President Donald Trump’s administration has weakened the incentive for countries to engage in policy cooperation. Why should China bow to a US that treats it as an enemy?

LONDON – The weaponization of currency has rarely ended well for the United States. Look no further than the unilateral 1971 decision of President Richard Nixon’s administration to cancel the US dollar’s direct international convertibility to gold – a key element of the “Nixon Shock” that destabilized floating currencies and led to stagflation later in the decade. But that hasn’t stopped President Donald Trump’s administration from (mis)labeling China a currency manipulator.

The US has long accused China of keeping the renminbi artificially low, in order to secure an unfair advantage in international trade. But it has generally refrained from harsh action, and, until this latest decision, had not applied the “currency manipulator” label since 1994. Even during the mid-2000s, when the renminbi was widely considered to be significantly undervalued, US President George W. Bush’s administration chose not to make that designation, and instead pursued the bilateral Strategic Economic Dialogue on currency and other economic issues.But the renminbi’s recent drop below the psychologically significant threshold of CN¥7 to the dollar for the first time since 2008 was too much for the Trump administration to take. So, in a symbolic move that escalates America’s ongoing trade war with China, the US Treasury made the official designation.It is not at all clear, however, whether the label applies. A country is considered to be a currency manipulator if its monetary authority intervenes to engineer a devaluation, in order to boost the global competitiveness of its exports. The renminbi’s recent decline, however, was not the result of policy action.Nowadays, China maintains a managed floating exchange-rate regime: the renminbi’s value can fluctuate freely within a 2% band. But, because the authorities reset the exchange rate daily, a long period of weakness gradually moves the exchange rate downward, even if daily movements are marginal. That is what happened this week.In fact, far from intervening to devalue the renminbi, the People’s Bank of China (PBOC) has in recent years been its foreign-exchange reserves to prop it up. The difference this time is that it chose not to intervene, thereby allowing the currency to fall. Den Rest des Beitrags lesen »

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The European Parliament’s Misguided Ambitions

Posted by hkarner - 7. August 2019

Ana Palacio is former Minister of Foreign Affairs of Spain and former Senior Vice President and General Counsel of the World Bank Group. She is a visiting lecturer at Georgetown University.

The European Union’s core institutions are undergoing leadership successions while besieged by well-known internal and external challenges. And yet, at a time when the EU desperately needs to be able to act effectively, it seems simply to be engaging in more political jockeying.

MADRID – In moments of political transition, initial signals make all the difference, because they set the tone for the process that follows. As new leaders take over the European Union’s core institutions, the first signs are not promising – and in particular those coming from the European Parliament.

The EU is undergoing this succession process while besieged by well-known internal and external challenges: demographic, social, and economic pressures abound, while Europe is more a geopolitical chessboard upon which global powers are playing than a player in its own right. And yet, at a time when the EU desperately needs to be able to act effectively, and is in great need of a realistic but forward-thinking vision, it seems simply to be engaging in more political jockeying. Here, the European Parliament has been ground zero. That is the message of the confirmation process for the new European Commission president – a process that began in early July, when the European Council nominated Ursula von der Leyen for the post. Den Rest des Beitrags lesen »

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The Real Cost of Trump’s Trade Wars

Posted by hkarner - 7. August 2019

Daniel Gros is Director of the Centre for European Policy Studies.

Economic analysis suggests that bilateral trade wars are unwinnable in an interconnected world. By firing his latest tariff salvo against China, US President Donald Trump has further raised the stakes in an increasingly damaging dispute – and America is likely to emerge as the bigger loser.

BRUSSELS – For a while at least, trade tensions between the United States and China seemed to have settled into a “new normal.” After both countries imposed high tariffs on a substantial proportion of each other’s goods, US President Donald Trump refrained from further escalation. But, following another inconclusive round of bilateral trade talks in Shanghai last week, Trump announced that the US will impose 10% tariffs on a further $300 billion worth of Chinese goods, effective September 1.

Should this new measure take effect, almost all US imports from China will be subject to tariffs. (The US already levies 25% tariffs on $250 billion worth of Chinese imports.) Although the US has also imposed non-tariff barriers in its trade war with China, reciprocal tariffs are the most visible component of the dispute – and are likely to hurt America more than China. Den Rest des Beitrags lesen »

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Locating Equality

Posted by hkarner - 6. August 2019

Harold James is Professor of History and International Affairs at Princeton University and a senior fellow at the Center for International Governance Innovation. A specialist on German economic history and on globalization, he is a co-author of the new book The Euro and The Battle of Ideas, and the author of The Creation and Destruction of Value: The Globalization Cycle, Krupp: A History of the Legendary German Firm, and Making the European Monetary Union.

For years, wealth and income inequalities have been rising within industrialized countries, kicking off a broader debate about technology and globalization. But at the heart of the issue is a fundamental good that has been driving social and economic inequality for centuries: real estate.

MUNICH – Inequality is the leading political and economic issue of the current era, yet debates about it have long suffered from a degree of imprecision. For example, the standard measure of inequality, the Gini coefficient, reduces a country’s entire income distribution to a single number between zero and one, and is thus highly abstract. Similarly, while inequality is rising in many parts of the world, there is no simple correlation between that trend and social discontent or unrest. France is much less unequal than the United States, and yet it has similar or even greater levels of social polarization.

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