Comment, analysis and other offerings from Tuesday’s FT
Gideon Rachman: Mad as hell but not Mad Hatters
The Tea Party movement that is stirring up US politics means different things to different people. The intended reference is to the Boston Tea Party, the anti-tax, anti-colonial rebellion that sparked off the American revolution. To British ears, the movement brings to mind another famous tea party – the Mad Hatter’s tea party in Alice in Wonderland, whose convener spoke in illogical and exasperating riddles, says the FT’s Gideon Rachman.
Analysis: Saving the euro: Tall ambition, flawed foundations
In Europe’s capitals they still talk of the evening when George Papandreou, Greek prime minister, confessed to his fellow leaders that his nation was corrupt. “He was very impressive and very honest. He basically said: ‘My country is a corrupt country from A to Z,’” recalls one European Union policymaker present at the dinner in Brussels on December 10 2009 where Mr Papandreou bared Athens’ economic soul, writes the FT’s Tony Barber.
Michael Woodford: Bernanke needs inflation for QE2 to set sail
Debate is raging within the Federal Reserve about whether to do more to stimulate the US economy. It seems many of its leading figures would like to, and the minutes of their last Federal Open Market Committee meeting, released Tuesday, will be read carefully for hints. Yet Ben Bernanke, Fed chairman, knows that a cut in rates, his usual tool, is currently infeasible. Therefore, speculation has turned to a return to quantitative easing (QE2), or large purchases of long-term Treasury bonds, writes Michael Woodford, professor at Columbia University and author of “Interest and Prices: Foundations of a Theory of Monetary Policy”.
Philip Stephens: Spending cuts that fail the fairness test
Britain’s last Conservative prime minister, John Major, would sometimes grumble about the comfortable circumstances of cabinet colleagues. His quarrel was not with the size of their bank balances or the fact of the country estates, but with the distance this put them from everyday experience, says the FT’s Philip Stephens.
Editorial comment: Efficiency savings
It is hard to argue with Sir Philip’s analysis, or his view that some of this waste could be avoided. In the era of the internet, there is no excuse for not keeping track of spending. But his diagnosis is hardly new, notes the FT. Since 2004, at least three other reports have addressed the issue of efficiency savings. Data management has been a prominent theme.
beyondbrics: Thai-Burma port deal: great for trade, bad for reform
Logistically, south-east Asia is a nightmare. Until last year, if you wanted to get a container of goods from Bangkok to Hanoi you would have had to use three different trucks go get it there, one for Thailand, one for Cambodia and one for Vietnam, writes the FT’s Tim Johnston.
Money Supply: QE2 & pension underfunding
Falling bond yields are aggravating the underfunding of defined benefit pensions, and further quantitative easing will make the problem worse still. This from Jacob Funk Kirkegaard at the Peterson Institute, with a piece entitled: Central banks should also be wary what they buy, writes the FT’s Emma Saunders.
Michael Skapinker: Lessons they don’t teach on ‘The Apprentice’
The son of a poor tailor from London’s East End, he rose to become a millionaire entrepreneur, television celebrity and member of the House of Lords. So where did it all go wrong for Alan Sugar? asks the FT columnist.
Lex on oil reserves
Iraq says it has 25 per cent more proved oil reserves than the last time it looked. The revised estimate is 143bn barrels, the world’s third-largest after Saudi Arabia and Venezuela (excluding Canada’s oil sands). Iraq’s oil minister said there might be further upward revisions over time. Brazil says one of its recent discoveries could be 8bn barrels, twice as big as first estimated. According to BP, global oil reserves were 1,333bn barrels at the end of 2009. That was 23 per cent higher than a decade earlier, despite consumption of 300bn barrels over the period.