Comment, analysis and other offerings from Monday’s FT,
Constraints on Obama’s soft power
Clive Crook on how Mr Obama is a soft-power enthusiast and sees US standing abroad as a priceless asset, which he now wants back for America to command respect so that its friends will be better allies and its enemies will lose support.
Fatal flaw weakens German rescue package
Hans-Werner Sinn, president of the Ifo Institute for Economic Research, writes how Germany’s bailout package, in the eyes of many, is not doing all it can to prop up the economy. To cap it all, its bank rescue package is hobbled by what could prove to be a fatal flaw – the condition to limit the salaries of top management to €500,000 a year.
Editorial Comment: Perils of ignoring festering conflicts
From Kashmir, through Palestine to Somalia, the last weeks of last year were prodigal in reminders of how dangerous it is to ignore the festering disputes of the Middle East, South Asia and the Horn of Africa. Yes, they stew for a bit. But then they tend to boil over.
Sterling’s fall can rescue Britain
Peter Oppenheimer, a student emeritus of Christ Church, Oxford explains how the Brown boom, because it lasted so much long, meant a correspondingly prolonged overvaluation of sterling and of UK assets. It follows therefore that the most promising development for re-expanding Britain’s economy in the medium term is the decline in the sterling exchange rate.
Maverecon: Can the US economy afford a Keynesian stimulus?
Willem Buiter writes there is no chance that a nation as reputationally scarred and maimed as the US is today, could extract any true ‘alpha’ from foreign investors for the next 25 years or so.
Lex on US market performance
Over the past century the Dow Jones Industrial Average has risen in the first month of the year more than 60 per cent of the time. Although the average gain is a mere 1 per cent, insignificant in the context of a market that lost almost a third of its value last year, it is worth considering the prospects for equities to rally in the months ahead.