Renationalizing British Utilities and Rail Would Be a Mistake

A Heathrow Express train is seen at Paddington station, London, England, March 7, 2013
A Heathrow Express train is seen at Paddington station, London, England, March 7, 2013 (Renaud Chodkowski)

Rising energy rates and railway fares in the United Kingdom are lending credence to the argument that privatization was a mistake.

YouGov last year found majorities in favor of taking energy, water and railways back into state ownership.

Telecom is the exception. Only 30 percent believe it should be run by the government.

The reason may be that the benefits of telecom privatization have been obvious whereas those of other privatizations are harder to discern.

Compared to the 1970s, however, utilities and railways provide a far better service today. Read more

Coal and Steel? Donald Trump Is Living in the Past

American president Donald Trump speaks on the phone during a flight on Air Force One to Pennsylvania, January 26
American president Donald Trump speaks on the phone during a flight on Air Force One to Pennsylvania, January 26 (White House/Shealah Craighead)

Donald Trump isn’t big on technology.

“I think the computers have complicated lives very greatly,” he said last year. (The computers.)

The whole, you know, age of computer has made it where nobody knows exactly what’s going on.

By “nobody”, he means himself.

On another occasion, the president said, “I’m just not a believer in email.”

By contrast, Trump has spoken at length about American coal and steel and his desire to revive the two industries.

This doesn’t make economic sense. Read more

Britain Starts to Feel Consequences of EU Exit

A woman looks out over the skyline of London, England, May 13, 2014
A woman looks out over the skyline of London, England, May 13, 2014 (Ray Wewerka)

It’s only been a couple of weeks since British voters decided to leave the European Union in a referendum, but they are already starting to feel the consequences.

Away from Westminster — where apparently nobody anticipated nor prepared for the “wrong” outcome — local governments are bracing for years of financial hardship, the Financial Times reports:

Many fear that the billions of euros from EU development funds channeled into some of the most deprived areas of the country will not be replaced by Westminster, just as the slowing British economy is set to hit council budgets that are already stretched.

The newspaper cites estimates of £8.6 billion in regional development funds being lost between now and 2020. Read more

Obama Gets Economic Challenge Right, Regulations Wrong

American president Barack Obama takes questions from student reporters at the White House in Washington DC, April 28
American president Barack Obama takes questions from student reporters at the White House in Washington DC, April 28 (White House/Amanda Lucidon)

Reading Bloomberg Businessweek‘s interview with Barack Obama, I get the sense the president understands the big economic and social challenges of our time but still underestimates the impact of regulation on businesses. Read more

More State Aid Won’t Save British Steel

View of the Port Talbot Steelworks in Wales, October 31, 2006
View of the Port Talbot Steelworks in Wales, October 31, 2006 (Jef Thomas)

Tata’s decision to put its British operations up for sale has predictably triggered calls for state aid.

Sajid Javid, the Conservative business secretary, has fortunately ruled out nationalizing the Port Talbot steelworks in Wales, but he is leaving the door open to some form of government assistance.

The “steel industry is absolutely vital for the country,” said Javid. “We will look at all viable options to keep steelmaking continuing in Port Talbot.”

He would be wrong on both counts. Read more

Migration Policy Unnerves German Business Leaders

German chancellor Angela Merkel arrives for a meeting with other European conservative party leaders in Meise, Belgium, December 19, 2013
German chancellor Angela Merkel arrives for a meeting with other European conservative party leaders in Meise, Belgium, December 19, 2013 (EPP)

German businesses are largely dissatisfied with Chancellor Angela Merkel’s immigration policy.

In a survey conducted for Handelsblatt by the Forsa Institute, 68 percent of managers said they were unhappy with Merkel’s open-door policy against 32 percent who support it.

The owners of small and medium-sized companies are the least satisfied whereas 45 percent of executives are large corporations agree with Merkel’s approach.

Business leaders big and small nevertheless blamed her resistance to more stringent measures for the rise of the Alternative für Deutschland, an anti-immigrant party that made gains in state elections this weekend.

The survey, coming on the heels of a disappointing election result, is a wake-up call for Merkel, whose Christian Democrats rely heavily on the support of businesses. Read more

Greece Continues to Drive Businesses Away

The port of Thessaloniki, Greece at dusk, September 3, 2012
The port of Thessaloniki, Greece at dusk, September 3, 2012 (Flickr/Ghagaz)

Are there another people in Europe so determined to shoot themselves in the foot as the Greeks?

Against all the advice of other euro states, they elected — twice — in recent years leaders who vowed to reverse what little progress had been made to liberalize the Balkan nation’s economy. Labor market reforms came undone last year. Privatizations were canceled or pushed back.

The country only agreed to sustain reforms in return for a third, €86 billion bailout this summer when it, once again, teetered on the brink of default.

Now promises have already been broken and targets missed. Greece is typically slow to implement the economic policy changes it commits to undertake. Yet there seems to be no holdup in policies that make things worse. Read more