Comment, analysis and other offerings from Monday’s FT,
Clive Crook: Obama can cut a deal on taxes
To pass legislation in the next two years, Barack Obama and the new Republican-controlled House of Representatives will have to work together, says the FT columnist. In a similar situation after the midterm elections of 1994, Bill Clinton and the Grand Old Party joined forces, after a fashion, and got some big things done. Similarly far-reaching co-operation will be harder this time. However, it is not impossible – and, paradoxically, the prospects might be brightest on the issue that most deeply divides the two sides. That issue is taxes. You heard me, taxes – the subject that virtually defines the parties.
Robert Zoellick: The G20 must look beyond Bretton Woods
With talk of currency wars and disagreements over the US Federal Reserve’s policy of quantitative easing, the summit of the Group of 20 leading economies in Seoul this week is shaping up as the latest test of international co-operation. So we should ask: co-operation to what end? writes Zoellick, president of the World Bank Group, who served at the US Treasury from 1985-88. When the G7 experimented with economic co-ordination in the 1980s, the Plaza and Louvre Accords focused attention on exchange rates. Yet the policy underpinnings ran deeper. The Reagan administration, guided by James Baker, the then Treasury secretary, wanted to resist a protectionist upsurge from Congress, like the one we see today.
Analysis – Portugal: Peripheral nerves
For young, mobile Portuguese such as Daniel Rebelo and Bárbara Faria, the idea of life without the euro that they and most other west Europeans have known for more than a decade is almost inconceivable, write the FT’s Victor Mallet and Peter Wise. “I don’t think going back to a situation without the euro is possible,” says the 32-year-old Mr Rebelo, formerly a financial manager at a local motor parts subsidiary of Germany’s Continental. “I don’t see an environment where you could live without the euro.”
Steven Rattner: Green shoots through the gloom
For most Americans, the main lesson of last month’s jobs report was an unchanged unemployment rate of 9.6 per cent, another ugly statistic in a steady procession of bad economic news. But of equal importance was the better news that 159,000 new private sector jobs were added, making October the second strongest month of the year. The US economy might be struggling but it is not quite the basket case that dominates the public consciousness, argues Rattner, who has served as counsellor and lead auto adviser to the US Treasury secretary. And neither are its prospects – at least in the medium term – quite as gloomy as the daily drumbeat of apocalyptic forecasts would suggest.
Jonathan Fenby: Court China, Mr Cameron, but don’t kow-tow
Dear Prime Minister Cameron, Though brief, your visit to Beijing on Tuesday on your way to the G20 in Seoul could be the most important foreign trip you have made since getting to Downing Street – if you want to make it so, writes the China director of Trusted Sources, the research service, and author of the ‘Penguin History of Modern China’. You may be tempted to focus on bilateral issues. But, if I were you, I would leave that to your ministerial companions, to explore specific ways in which a medium-sized European power can establish stronger links with the world’s second biggest economy.
Lucy Kellaway: Being happy is a serious handicap
There is a teenage boy I know who worries me quite a lot, begins the FT columnist. He was born to a good family with plenty of money. He is extroverted and optimistic; people appear to like him. He’s relatively easy on the eye and reasonably bright. His health is good and he can kick, hit and catch balls of various shapes and sizes. He does not smoke, or take drugs, or do any more binge drinking than the next person. The problem with this boy is that he has never in his entire life made an effort at anything. He has spent his first 16 years having a jolly nice time on the path of least resistance and even though he has often been told that the path of greater resistance is the one that leads to success and fulfilment, he takes no notice.
Lex on African currency
Zimbabwe’s finance minister has been reported to have suggested a common currency for southern African countries by 2013, Lex notes. Tendai Biti is not the obvious leader for this cause, since his country’s inflation rate, until recently, lay somewhere between Neptune and Pluto. Besides, the travails of the eurozone have shown just how easy it is for monetary unions to get into trouble. But the eurozone experience can be read as teaching the opposite lesson.
Lex on Eastern promise for IPOs
Why did Mail.ru, the Russian internet company, choose London for its $912m initial public offering on Friday whereas compatriot Rusal, the aluminium producer, decided to tap the Hong Kong IPO market to raise $2.2bn earlier this year? It can be tough for a company to decide which stock exchange is best for a new listing, but those in Asia, and specifically Hong Kong, are increasingly favoured, writes Lex. So far this year, the region has attracted about $43bn worth of initial public offerings, about one-quarter more than the US and UK combined, according to Dealogic data. Hong Kong certainly benefits from being on China’s doorstep.