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”

Greece Continues to Drive Businesses Away

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 “Greece Continues to Drive Businesses Away”

Don’t Expect Economists to be Objective

Economists aren’t neutral arbiters of policy. It is a point rightwingers have been making for years, especially when — as a 2003 survey found — left-leaning economists in the United States outnumber right-leaning ones three to one.

The Economist now recognizes as much, which is progress. But it takes away the wrong lesson from this, calling on economists to just try harder.

It would be better to accept that economics is inherently political. Read more “Don’t Expect Economists to be Objective”

Supreme Court’s Reputation Cannot Weigh Against Liberty

Facade of the Supreme Court of the United States in Washington DC
Facade of the Supreme Court of the United States in Washington DC (Shutterstock/Brandon Bourdages)

It’s an odd thing to be forced to pay for something you disagree with. It’s worse to be told it must stay that way for the sake of somebody else’s reputation.

Yet that is what the left-leaning justices on America’s Supreme Court are saying. Read more “Supreme Court’s Reputation Cannot Weigh Against Liberty”

Republicans Must Not Hold Trade Pact Hostage

Republican Senate leader Mitch McConnell speaks with President Barack Obama in the Oval Office of the White House in Washington DC, December 3, 2014
Republican Senate leader Mitch McConnell speaks with President Barack Obama in the Oval Office of the White House in Washington DC, December 3, 2014 (White House/Pete Souza)

Mitch McConnell, the Republican leader in the United States Senate, argued on Thursday that a trade pact with eleven other Pacific nations should not be send to Congress for approval until after Barack Obama’s successor is elected next year.

“I think the president would be making a big mistake to try to have that voted on during the election,” he told The Washington Post. “There’s significant pushback all over the place.”

Even McConnell, a free trader who previously expressed support for the treaty, said he now has “serious problems” with the Trans Pacific Partnership Obama negotiated.

It’s hard to take him seriously. Read more “Republicans Must Not Hold Trade Pact Hostage”

Young and Healthy Americans Spurn Obamacare

Shikha Dalmia writes at The Week that American president Barack Obama’s health reforms are unraveling.

UnitedHealthcare, the country’s largest insurer, has said it may need to pull out of the exchanges next year that were created under Obamacare.

The company expects a $425 million hit to its earnings, primarily due to mounting losses on the exchanges. “We cannot sustain these losses,” said the company’s boss, Stephen Hemsley.

Other insurers could follow. Some have already raised premiums by double digits to try to make end meets, but they still can’t make the numbers work. Read more “Young and Healthy Americans Spurn Obamacare”

Republicans Should Stop Obsessing About Tax Cuts

American president Ronald Reagan waves at people from the White House lawn in Washington DC, April 25, 1986
American president Ronald Reagan waves at people from the White House lawn in Washington DC, April 25, 1986 (Reuters/Joe Marquette)

Whereas Bernie Sanders’ supporters look to the 1970s for inspiration, many of the Republican Party’s presidential candidates seem stuck in the 1980s.

In a debate on Tuesday, televised by the Fox Business Network, all of the contenders for the Republican presidential nomination called for more deregulation and tax cuts: a combination of supply-side economic policies that has served their party well in the past.

But James Pethokoukis argues in the Financial Times that big tax cuts, particularly for the wealthiest, do not work in an age of high inequality and heavy debt. “Republicans need an economic agenda that respects markets while also recognizing the challenges facing America and its anxious middle class,” he suggests.

Deregulation and tax cuts under Ronald Reagan propelled America into a new era of prosperity.

Times have changed. Read more “Republicans Should Stop Obsessing About Tax Cuts”

Between the Crazy, Serious Ideas in Republican Debate

Wednesday’s Republican presidential debate hosted by CNBC was easily the worst so far this year. The moderators seemed more interested in catching the candidates in hypocrisies and discrediting their looniest proposals than encouraging a substantive debate — but at the same time let some of the most outlandish claims go unchallenged.

Between the crazy, though, there were glimmers of a reform-minded conservative platform taking shape. Read more “Between the Crazy, Serious Ideas in Republican Debate”

Labour Must Not Take Britain Back into the 1970s

View of the Houses of Parliament in London, England, April 9, 2010
View of the Houses of Parliament in London, England, April 9, 2010 (Geir Halvorsen)

As Britain’s Labour Party seems determined to take the country back into the 1970s, it’s worth remembering what that decade was like.

Many of the party’s new leader’s supporters weren’t alive at the time to see what the big-state policies Jeremy Corbyn advocates wrought.

Corbyn — who was elected leader this month with the help of tens of thousands of young supporters flocking to the Labour Party — wants to print money to finance investment and welfare spending, nationalize industries and strengthen trade unions. Not only are his policies far to the left of Middle England; they have been tried before and failed.

In the 1970s, the postwar Keynesian consensus — that had seen the British state take over large industries, enact price controls, borrow to finance benefits and sustain consumer spending at times of economic slowdowns and allow increasingly militant trade unions a veto over labor policy — broke down. Unemployment started to rise. Power cuts became a daily occurrence as a result of industrial action. Inflation reached nearly 30 percent. There were riots in the streets. The government introduced a three-day workweek and tried to persuade the unions to limit their pay demands to a 5-percent increase. They refused. A “Winter of Discontent” followed that finally convinced the country to elect Margaret Thatcher in 1979.

Britain’s economy in the 1970s was so weak that James Callaghan, the Labour Party leader, foresaw a “breakdown of democracy” and said, “If I were a young man, I would emigrate.”

The country even had to apply for an IMF loan. It was the Greece of its day, the sick man of Europe.

To understand what got Britain into that place, consider what it took to get out of it. Read more “Labour Must Not Take Britain Back into the 1970s”