Income rise weakens Trump case for radical reform 13 Sep 2016 U.S. census data showed household income jumped in 2015 while poverty dropped, the first sign of recovery in the metric to show up since 2007. Evidence that Obama's programs are working will help Hillary Clinton's pitch for incremental change against Trump's radical economic populism.
Globalisation needs better cheerleaders 13 Sep 2016 Free trade and capital flows are often blamed for disadvantaging workers in the West. A new study suggests they have not all fared as poorly as many believe, and that domestic policies can make a difference. Still, statistics and studies alone won’t shake globalisation’s bad rap.
Chancellor: No hyperinflation, just Weimar malaise 13 Sep 2016 Central-bank money printing hasn't produced the spiralling prices that plagued the Weimar Republic. It has, though, delivered some of the social disquiet of 1920s Germany. Policymakers urging more extreme monetary actions need to exercise caution lest they get what they wish for.
Carney guessing game feeds bond market distortion 13 Sep 2016 The Bank of England has revealed corporate bonds eligible for its 10 billion pound buying spree. Its requirement that companies make a material contribution to the country still throws up some anomalies. Second-guessing the central bank makes capital markets less efficient.
Better to fly Europe’s airlines than buy them 12 Sep 2016 Fuel prices have fallen, but that has incentivised European carriers to keep too many planes airborne. Demand is too weak to meet the supply, which means ticket prices are set to fall, and with them airlines’ profitability.
Britain’s grammar school plan gets 5 out of 10 9 Sep 2016 Reintroducing selective schools won't necessarily fix the UK's two big problems: too-high inequality and too-low productivity. It fits, though, with an emerging trend of the state picking winners. Whether that works depends on the success of safeguards to protect the losers.
China tosses trading partners some import scraps 9 Sep 2016 In August, for the first time in 22 months, imports turned positive. But most foreign exporters and China bashers can keep the bubbly on ice. The data's timing has a whiff of diplomacy. Beijing will keep its aggressive trade policies in place so long as they serve other goals.
U.S. economic debate pits evolution vs. revolution 8 Sep 2016 Donald Trump's advisers advocate radical change, while allies of Hillary Clinton hope to build upon what they see as solid recent gains. The consequences of upheaval are not as predictable as proponents claim. As with Brexit, though, a shakeup of the status quo has appeal.
Freak euro bonds show ECB’s power – and its limits 8 Sep 2016 The central bank’s negative rates and bond-buying have forced down borrowing costs: German bearing maker Schaeffler is paying around 3 pct on risky notes that roll up interest payments. Yet smooth credit markets have not boosted investment. Europe’s governments need to step up.
Anti-immigration policies amount to bad economics 7 Sep 2016 Donald Trump has ramped up his tough talk against foreigners. He wants to beef up U.S. deportation forces and even halt some new green cards. The plans are pricey and require thousands of additional staff. On top of that, hundreds of billions of dollars in output would be lost.
Rakuten jig highlights Japan’s warped benchmark 7 Sep 2016 Shares of the shopping website leapt on news it would join the Nikkei 225. It shows the power of an arbitrary index weighted by share price instead of fundamentals like size or free float. The Bank of Japan's $60 bln-a-year push into index funds will only amplify the distortion.
Global leaders test limits of spreading wealth 6 Sep 2016 “Inclusion” was the buzzword at the G20 conflab. A fairer distribution of the fruits of growth is urgent when globalisation is under attack in the West. The challenge for politicians is to reduce inequality within rich countries without the rest of the world suffering.
U.S. employers give Fed a lame excuse 2 Sep 2016 The country added 151,000 jobs in August, fewer than were expected, while wage growth also was muted. Even so, the gains over three months have been solid alongside decent economic signals. It's beyond time to raise interest rates, but Janet Yellen now has pretext to stall again.
State spending revival would be good for growth 2 Sep 2016 As central banks struggle to boost economies, world leaders meeting at the G20 are once again looking to government-led investment. Ultra-low sovereign yields make borrowing to spend look a no-brainer. But even a small stimulus can face formidable political hurdles back at home.
Rousseff ouster gives Brazil impetus to grow 31 Aug 2016 The country's Senate has impeached the president. Her replacement Michel Temer may be able to use that to his advantage and push unpopular steps to cement recovery next year. But lawmakers who were keen to dump Rousseff may be less willing to back his austerity measures.
Argentina’s Macri loses skirmishes but winning war 30 Aug 2016 The president's big-bang approach to fixing the economy after years of state largesse has yet to pay off. A court has even blocked home-heating bill hikes. But Macri is learning no battle plan survives contact with the enemy. A more measured strategy will bring results in 2017.
TPP push could use a cattle drive 30 Aug 2016 The Obama administration's wobbly attempts to promote the trade deal are stalling. The nation's ranchers, meanwhile, have cooked up a juicy pitch highlighting the simple financial benefits of the pact. That's a far superior way to gather Americans around the same table.
Colombian peace may have a price before a dividend 25 Aug 2016 A deal to end 50 years of conflict with FARC comes at a difficult time. Oil output is shrinking and inflation proving stubborn. Tax reform before year-end should help but thousands of rebels also will now need jobs. Any financial benefit from the war's end could take some time.
Rajan reforms can thrive with India’s new RBI boss 22 Aug 2016 Urjit Patel is a safe choice to lead the central bank. The deputy governor was a key architect of reforms introduced by outgoing head Raghuram Rajan. To earn the same level of acclaim, Patel must see these through and ratchet up the fight against bad debts.
Young-old financial gap calls for mature debate 17 Aug 2016 Stagnant wages, a graying population and unaffordable pensions risk leaving millennials worse off than their parents. That could be toxic for the economy, markets and even democracy. Smart policy can head off inter-generational strife, but barriers to making that happen are high.