Comment, analysis and other offerings from Wednesday’s FT,
Analysis: Let battle commence
After the first wave of policy reforms unleashed by the administration of Barack Obama in response to the financial crisis, focused on short-term crisis measures, such as the “ stress tests” of the health of banks, the next frontier is a fight about how the financial industry is structured – and run.
Market Insight: Hopes for a quick recovery built on shaky foundations
The current rally in global equities and other risk assets has been massive, with investors and commentators in a feeding frenzy over morsels of economic data that support the end of the Great Depression scare. But there are three key flaws to panglossian hopes for a bull market and a V-shaped economic recovery writes David Roche of Independent Strategy.
Martin Wolf: Capitalism is dead, long live capitalism
Is the current crisis a watershed, with market-led globalisation, financial capitalism and western domination on the one side and protectionism, regulation and Asian predominance on the other? Or will historians judge it, instead, as an event caused by fools, signifying little? My own guess is that it will end up in between. It is neither a Great Depression, because the policy response has been so determined, nor capitalism’s 1989.
Us free trade promises must be honoured
When Washington enacted its $787bn (€580bn, £509bn) stimulus bill in February with Buy American provisions, the law promised – at the urging of President Barack Obama – that the language “shall be applied in a manner consistent with US obligations under international agreements”. That is not happening write Gary Hufbauer and Jeffrey Schott of the Peterson Institute.
Asian needs to ditch its growth model
The recent upturn in Asian economies is creating a dangerous optimism that almost wilfully ignores the difficulties ahead. Future historians will mark 2008 as the year that the development model that has driven much of Asia’s rapid growth for the past two decades went bankrupt writes Michael Pettis of Peking University.
Willem Buiter’s Maverecon blog: The wonderful world of negative nominal interest rates
For reasons I don’t understand, this topic generates almost as much heat and emotion as a critical piece on Obama. Some of the reactions to my previous post on the issue made me consider starting further posts on this issue with a health warning. Because the heat and emotion are based on heart-stopping ignorance and lack of elementary logic, I will have another go at explaining the basics.
John Kay: Beware bail-out kings and backbench barons.
We need to reassert the notion that roles of authority are positions of responsibility rather than declarations of personal merit and routes to personal enrichment. That notion goes with old-fashioned concepts of social obligation and public service. An insistence that power is a duty, not a prize, is probably the most important reason why some countries in the world are rich and others poor. The point needs to be brought home in equal measure to legislators, chief executives and bankers.