Thanks to Republicans, the Next Economic Crisis Will Be Worse

The skyline of Manhattan, New York, January 24
The skyline of Manhattan, New York, January 24 (ANG/Matt Hecht)

Ten years after the collapse of Lehman Brothers, economists Brunello Rosa and Nouriel Roubini — who famously predicted the Great Recession — warn that the next financial crisis is already in the making.

Of the ten warning signs they see, six are due to the policies of the Republican government in the United States. Read more “Thanks to Republicans, the Next Economic Crisis Will Be Worse”

EU Shields Companies from Trump’s New Sanctions on Iran

Donald Trump Giuseppe Conte
American president Donald Trump and Italian prime minister Giuseppe Conte arrive to a NATO summit in Brussels, July 12 (NATO)

The European Union has announced measures to protect companies that do business with Iran from American sanctions.

The BBC reports that an EU “blocking statute” bans European firms from complying with the sanctions, unless they get approval from the European Commission.

It also enables businesses to recover damages resulting from American sanctions on Iranian cars, gold and other metals. Read more “EU Shields Companies from Trump’s New Sanctions on Iran”

Macron Unveils Small-Business Reforms and Privatizations

Austrian chancellor Christian Kern and French president Emmanuel Macron visit Salzburg, August 23, 2017
Austrian chancellor Christian Kern and French president Emmanuel Macron visit Salzburg, August 23, 2017 (BKA/Andy Wenzel)

French president Emmanuel Macron has unveiled new economic reforms benefiting small- and medium-sized businesses:

Dutch Caribbean Caught Up in ConocoPhillips-Venezuela Oil Dispute

A cruise ship moored in Willemstad, Curaçao
A cruise ship moored in Willemstad, Curaçao (Shutterstock/Galina Savina)

The Dutch Caribbean have been caught up in a legal dispute between the American oil company ConocoPhillips and the government of Venezuela.

A judge has allowed Conoco to seize Venezuelan-owned and -operated refineries on the islands in order to collect $2 billion in compensation awarded by the International Chamber of Commerce for the 2007 nationalization of Conoco assets in the socialist-run country.

The seizure poses a “potential crisis” to the economy of Curaçao, Prime Minister Eugene Rhuggenaath has told Reuters. The Isla refinery, which processes 335,000 barrels of oil per day, accounts for a tenth of the island’s economy. Read more “Dutch Caribbean Caught Up in ConocoPhillips-Venezuela Oil Dispute”

Europe Can Stand Up to American Threats on Iran

Presidents Emmanuel Macron of France and Donald Trump of the United States speak in Paris, July 14, 2017
Presidents Emmanuel Macron of France and Donald Trump of the United States speak in Paris, July 14, 2017 (DoD/Dominique Pineiro)

Leonid Bershidsky is optimistic the EU can stand up to American threats and continue doing business with Iran. He writes for Bloomberg that the stakes are higher than President Donald Trump seems to realize:

With its influence on SWIFT, the Brussels-based payment-facilitation system, and its trade power, the EU is capable of blunting US sanctions. If they prove ineffective, and Iranians merely rally around their government as Russians have done in the face of American restrictions, the US may be exposed as less of a fearsome global policeman than Trump would like it to be.

Read more “Europe Can Stand Up to American Threats on Iran”

Renationalizing British Utilities and Rail Would Be a Mistake

British post box
A Royal Mail post box in London, England, July 26, 2011 (Tim Miller)

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 “Renationalizing British Utilities and Rail Would Be a Mistake”

Coal and Steel? Donald Trump Is Living in the Past

Theresa May Donald Trump
British prime minister Theresa May and American president Donald Trump speak in the Oval Office of the White House in Washington DC, January 27 (The Prime Minister’s Office/Jay Allen)

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 “Coal and Steel? Donald Trump Is Living in the Past”

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 “Britain Starts to Feel Consequences of EU Exit”

Obama Gets Economic Challenge Right, Regulations Wrong

Barack Obama Shinzō Abe
American president Barack Obama and Japanese prime minister Shinzō Abe at the White House in Washington DC, April 28, 2015 (White House/Pete Souza)

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 “Obama Gets Economic Challenge Right, Regulations Wrong”

More State Aid Won’t Save British Steel

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 “More State Aid Won’t Save British Steel”