Comment, analysis and other offerings from Wednesday’s FT,
Martin Wolf: Obama’s economic challenges
In electing Barack Hussein Obama to the presidency, the American people have chosen an intellectual, a prophet of unity and a man with a Black Kenyan father and a white American mother. They have, at the same time, rejected the politics of fear and division that did such damage to their country.
Editorial comment: Pirates of the horn
Hardly a week goes by these days without news of yet another vessel being hijacked by Somali pirates in the Gulf of Aden. On Tuesday, a chemical tanker with 23 Filipino crew was taken hostage. Last week, a Danish ship with 13 people on board was overrun. The week before that, a Turkish bulk carrier was hijacked en route from Canada to Asia. The roll-call of attacks and hostage-taking off the Horn of Africa is a cause for alarm.
John Kay: Friedman and the limits of academic pluralism
The University of Chicago is appealing for $200m to establish a Milton Friedman Institute. The plan to honour the university’s most famous economist is arousing controversy. A petition to the university’s president from a group of professors reports that “many colleagues are distressed by the notoriety of the Chicago School of Economics, especially throughout most of the global south, where they have often to defend the University’s reputation in the face of its negative image”.
Comment: Human frality caused this crisis
Richard Thaler, a professor of behavioural science and economics at the Graduate School of Business, University of Chicago and Cass Sunstein, a Felix Frankfurter professor of law at the Harvard Law School, write: Mea culpas are rare these days. In a debate with John Kerry in 2004, President George W. Bush famously could not name a single mistake he had made in his first term. So it is both noteworthy and commendable that Alan Greenspan, the former US Federal Reserve chairman, fessed up that he had failed to anticipate the financial crisis.
Comment: Let the market set the level of executive rewards
Peter Montagnon, director of investment affairs at the Association of British Insurers and chairman of the International Corporate Governance Network writes: Executive remuneration is an emotive subject at the best of times, but the financial crisis and recession have raised the temperature still further. Around the world regulators are clamping down on banking bonuses. France and the Netherlands have legislated to limit pay-offs that reward failure and the European Commission is scrambling to introduce a new European Union-wide approach.
Lex on European corporate debt
No wonder policymakers are scared. Standard & Poor’s reckons a total of $2,100bn of European company debt will mature between now and the end of 2011, with more than $800bn due next year. Markets have never seen so much debt needing refinancing in such horrible conditions.
________