Comment, analysis and other offerings from Monday’s FT,
Clive Crook: Smarter ways to punish a banker
Whenever you wonder if rage at Wall Street is getting a little out of hand, some titan of the industry speaks up and makes you think, “Let’s go down there and smash some windows”. But anger is a poor basis for policy – especially when combined with a misunderstanding of the issues, says the FT’s Crook.
Analysis: Banking and the rarely pointed finger
George Meredith might not have had institutional investors in mind when he wrote “The Egoist”, says the FT’s John Plender. Yet his comic novel from the high Victorian period applies neatly to the widespread view that shareholders of the last decade behaved like absentee owners when confronted with excessive risk-taking by banks.
Paul de Grauwe: Ominous lessons from 1930s Europe
The Great Depression taught us several lessons, writes de Grauwe, professor of economics at the University of Leuven. The first is that central banks must be ready to provide ample liquidity to save the banking system. The second is that governments should not try to balance the budget when economic activity collapses. Recent responses show those lessons were learnt. But the third – about currencies and exchange rates – is an area where authorities are in the process of repeating the same mistakes.
Lex on China’s money supply
In their dreams monetary authorities tighten like Kaa, the Jungle Book python. Hypnotise the rank and file with assurances of a commitment to growth, while stealthily withdrawing various measures of support. Then, before anyone realises the squeeze is actually on, the policy coils keep a firm grip on inflation. In the real world, of course, it never works like that. Take the case of China.
In-depth, online report: Building Brics
The Bric countries – Brazil, Russia, India and China – have powered ahead economically over the past decade, but will they be able to take up the slack in the world economy from the US consumer? See FT.com’s special report combining FT analysis and reportage on the development of and prospects for this informal grouping.
Richard Lambert: Why Hare is wrong about business
Towards the end of The Power of Yes, Sir David Hares’ two hours of banker-bashing that is now filling the seats in London’s National Theatre, the playwright shifts his gun sights from the City of London to cover the whole of the business community, says Lambert, director-general of the CBI. But he makes assumptions that in at least four respects are fundamentally misconceived.
Book review: Game Change
The delicious thing about this book – its guilty pleasure – is that it transports you to a parallel universe in which everything in the National Enquirer is true, writes the FT’s Washington bureau chief Edward Luce. In Game Change: Obama and the Clintons, McCain and Palin, and the Race of a Lifetime, the reader travels with two diligent and workaholic reporters – John Heilemann and Mark Halperin. Their account elevates our understanding of what happened. It may be personal. But it is not trivial.
Lucy Kellaway: A proven formula for cheerfulness
Monday is supposed to be the most depressing day of the year. Not long ago, a man in Cardiff University came up with a formula that linked the weather, debt, the time since Christmas and various other factors to a measure of discontent. But for those wanting a more proactive approach to alleviating Monday’s misery, here is another formula tested on a statistically significant number of occasions. I + M = H, where I stands for “me”, H stands for “happiness” and M stands for a “packet of Maltesers”.