The death of the hydra of inflation is also a myth.

Sir, Kenneth Rogoff’’s “The myth of how central banks slew the hydra of inflation”, August 30, correctly concludes after analyzing the effects of globalization that “there is some urgency in the need for central bankers to take greater pains to avoid taking too much credit for upside performance”.

I myself, in my book Voice and Noise, wrote a while ago that “to put some check on their egos, every time I see a central banker I urge him to take a shopping trip to the closest IKEA so as to see who really should get the credit of controlling inflation as we currently know it.” 

That said the issue is not really about who should get the credit for the death of the hydra of inflation, that is of secondary importance, as its demise might also have been a big myth. The way inflation is measurd by looking only at a cost of living basket while mostly ignoring the price of assets, might have in fact lulled us all into a very false sense of security. 

When Rogoff mentions “The advent of modern independent and anti-inflation oriented central banks is one of the great success stories of modern economic science” I also beg to differ. We should all know by now that placing your full trust into a non-accountable club of mutual admirers will, more sooner than later, induce incestuous thought processes that guarantee disasters.

When I also read in FT that “inflation-linked municipal bonds, a small and relatively unknown part of the US municipal bond market, have had a surge of issuance this year”, I start shivering at the pure thought of the consequences of having to restate inflation figures.

Has Dear Economist gone raving mad?

Dear Economist, August 26, when asked by Mr. Holden, a father preparing his will, whether he should favor more the daughter that being single is therefore more likely to provide him assistance in his old age, responds with a proposal of paying for the care services by the hour. Has Dear Economist gone raving mad?

Mr. Holden is a member of that union free cooperative called family and so when at last it is getting to be his turn to have someone else carrying the load for him, and he should most be in need of maintaining the institutional principle that a father loves each daughter more than anyone, equally, here comes Dear Economist and wants to upset the whole relation. Come on, they never paid Mr. Holden by the hour!

Dear Economist has to be one of those disoriented persons willing to release society from its responsibility of caring for him just in order to have the illusion of getting that extra percentage of earnings on his private pension plan, and which he knows will anyhow disappear into foggy fees. Perhaps he wishes also to suggest some fast competitive tender procedure on the open market for the hourly fee when needing to urgently contract the services of a policeman.

No, Dear Economist should know that in view of the many current financial and economic uncertainties, now it is more important than ever not to tangle with the family institution, treating therefore every daughter in exact equal financial terms, yet giving each one of them that special love that makes them feel different.

When reading Dear Economist’s answer to Mr Holden it reminded me again of how rarely we see in sophisticated studies on social security and pension plan issues elaborated by multilaterals, such as the World Bank, any mention of the importance of family, much less of the importance of having many daughters.

Sincerely,

Per Kurowski, a father of three loving daughters and who is aware that they, as individuals and as a portfolio, constitute the only real pension plan that he can afford but that he also wishes for.

PS. That he might end up paying for his daughters services by taking care of grandchildren well although that is a different issue it will neither be dealt with hourly fees.

Dear Economist

Great, now it is that you are concerned with Chávez? You’ve got to be kidding!

Sir, Venezuela is a notoriously divided country and yet its current Congress has 167 members in favor of Chávez and zero against. Its government is handing out 100.000 Kalashnikovs rifles to sympathizers, subsidizes oil consumers in Massachusetts, and 8 years into their surrealistic 21st Century Socialism sells petrol for less that 4 cents per liter and effectively transfer about 10% of GNP from the poorest poor to those who have cars. On pure impulses, without telling or asking anyone, we are taken out of the Andean Pact. Crime and corruption is rampant and of around 20.000 prisoners in jail-hells half of them have not been judged and last year more than 400 inmates were murdered. And we could go on and on.

Yet, on August 25, "Watching Chávez" you now say that the world should be concerned because he is trying to buy himself with our money a very expensive place in the United Nations Security Council? Sorry, but as a Venezuelan citizen my reaction was… you’ve got to be kidding! Your only true concern should be your lack of concern for us.

What you really need to exorcise the curse!

Sir, Wayne Murdy is clear about what he can do in “Mining companies can help lift the resources curse”, August 25, and we much appreciate his efforts. That said and as a citizen of a “cursed” nation I know all his efforts will come to naught until we get rid of the prime voodoo rite used. When in a non-resource rich country you elect your governments they work for you and you pay their salaries with taxes, but when you elect them, for instance in an oil rich Venezuela, they get the keys to the vaults and you are thereafter reduced to having to beg them. If you then also happen to be living an oil boom things get even worse since with so much money and so much begging these very simple vault-guards begin thinking of themselves as gods.

Therefore since the only way to build a country is to make its citizens responsible for the resource dividends these should of course be paid out directly to them. Unfortunately there are just too many interests, everywhere, in declaring citizens not up to snuff and so as to be able to negotiate on their behalf. That day that Murdy instead of referring to a “partnership between companies and government” could refer to a partnership with the people, most of the curse would just vanish.

Wayne Murdy resources curse

We were many and then granny gave birth

Sir, there’s a Spanish saying that goes “we were many and then granny gave birth” and it applies so well when a shrinking planet in need of so much urgent collaboration, for instance to protect its environment, could certainly do without many divisive issues, such as the patents on medicine.

When (August 24) you say that “the moral and practical case for providing poor countries with access to essential medicines, at a price they can afford to pay” is compelling, no one can disagree, but when you state that “The Industry’s incentive to innovate would be weakened if widespread erosion of patent protection enabled generic drug makers to eat away its profits” I must confess having at least some doubts, such if whether this type of protection does not also breed its own inefficiencies.

Whatever, in this vital matter of patents on medicines, the world needs and deserves some clear answers and also transparent ways of arbitraging among any conflicting objectives. Is it really impossible to gather a group of independent professionals with no conflicts of interest in order to get some credible answers? Since the United States has been much accused of working for the big laboratories, as an outsourced mercenary branding the weapon of trade agreements, they have obviously the most to gain from any clarifications, especially since in terms of their brush with bad reputation, lately, granny seems also to have been very active.

medicine patents

Letters to the editor

Do you think that all our comments to a newspaper such as Financial Times sent to letters.editor@ft.com are read right away by the editor of FT? Wrong! They go there so that a blue-collar editor can first make heads and tails out of our comment. Only then does it get forwarded to Sir.

Do you know who is a good editor? One fine day, you find yourself agreeably surprised by the fact that they have actually published your letter in FT and you say to yourself, “and this is exactly what I said, so this time I must have written it well.” I challenge you to go back to your original and find out how many changes were really made, some of them with feathers, but others with axes.

And so, talking about editors, this is an as-good-as-it-gets opportunity to thank them all.

For my letters to the Financial Times I have been able to identify two editors of my words, Heather Davidson and John Munch. If there are more of you over there, please tell me or consider yourself thanked in absentia.

For the editing of my one and (so far) only book, and of my many English-language major statements, my editor-in-friend is James T. McDonough, Jr., Ph.D., whom you can find through JTMcDJrPhD@aol.com.

Finally for all my writing in Spanish, it is my wife Mercedes who helps me out, not so much with feathers though, but I will not give you her e-mail address as she is exclusively retained by me. (Shhh! She doesn’t know it!)

And so, friends, the next time you read a posting in this blog and you don’t understand what Per Kurowski is talking about, most probably it is because his letter is still in the bottle, it never got there, or it was just hopeless.

Dear editors, once again, thanks!

Per

A global monetary fund needs foremost to go global

Sir, we agree with Peter Costello that “The global monetary fund needs to reform its quotas”, August 21, but we do not believe this is achievable by reshuffling some local interests. In order to globalize the International Monetary Fund what it really needs is to get free from many of the constraints imposed by outdated geographical considerations. In this respect the world has to find ways of providing the Fund with a representation that is more independent from borders, perhaps even giving a Chair to the Constituency of the International Rovers by which we mean all those workers, skilled or unskilled, legal or illegal, who nowadays represent jointly one of the largest economies of the world.

It is also somewhat contradictory with democracy being promoted around the globe to still hear that the voting rights in multinational organizations should be based on some dubious relative economic weights. Dubious? Yes indeed! Who says that it is the gross national product of a country that should be determinant? What about the net results (quality of life), what about the balance sheet (market capitalization), what about cross border trade, what about idea generations, what about other real power sources?

When I was an Executive Director in one of the international finance organizations, the World Bank, 2002-2004, what most worried me was how extremely underrepresented “Mother Earth” really was. It behooves us more to get a fix on that.

Peter Costello IMF World Bank quotas

Long-term benefits of a hard landing

Published in FT, August 23, 2006

Sir, While you correctly argue (“Hard edge of a soft landing for housing”, August 19,) that “even if gradual, a global housing slowdown would be painful” you do not really dare to put forward the hard truth that the gradualism of it all could create the most accumulated pain.

Why not try to go for a big immediate adjustment and get it over with? Yes, a collapse would ensue and we have to help the sufferer, but the morning after perhaps we could all breathe more easily and perhaps all those who, in the current housing boom could not afford to jump on the bandwagon, would then be able to do so, and take us on a new ride, towards a new housing boom in a couple of decades.

This is what the circle of life is all about and all the recent dabbling in topics such as debt sustainability just ignores the value of pruning or even, when urgently needed, of a timely amputation.

PS. At World Bank 2003: “Burning a little each year, thereby getting rid of some of the combustible materials, was much wiser than today’s no burning at all, that only allows for the buildup of more incendiary materials, thereby guaranteeing disaster and scorched earth, when fire finally breaks out, as it does, sooner or later.”

PS. When the moment came, 2007-08, they preferred to kick the can down the road. This would have had a better chance of success if they had eliminated the distortions in the allocation of credit to the real economy that the risk weighted capital requirements for banks cause. Unfortunately they did not, and the crisis can is still out there and it will roll back on us... ever so much

PS. December 2018: “What goes up too much must come down too much. The best countercyclical policy there is, is the elimination of the procyclical ones.” 

Can the markets do more for the moviegoer?

Mr. Arthur Spilling a socially conscientious moviegoer from Rochester, NY, commented that he felt a bit bad when watching a big-budget flick knowing he was paying the same price that those poor folks who were watching a cheap run-of the mill movies and so decided to ask Dear Economist August 19 in FT-Weekend, about why do not movie theaters have adjustable pricing.

Dear Economist answered with a set of very good arguments like that it was not really a question of movies being purchased but of screening time; multiplexes not wanting to sell cheap tickets that could be used to sneaking in on more expensive ones; no one wanting to be associated with discount movies (don’t know why? I would, if the pay is right); and the rumored possibility that the whole movie industry might in fact just be fronting for a much more profitable popcorn business.

I am no one to argue against such insightful comments but, nonetheless, especially since Dear Economist never really answered why more efforts were not made to get every seat in the house full, I felt that something went amiss. So let me try to deepen the discussion with humble comments.

First, if it really was screening time that was being sold, then of course the question would be how come Mr. Spilling who probably sat there with a partial view of screen and a totally stiff neck looking up could accept to subsidize a Mr. Poor Folk who most probably was enjoying something more close to a private screening. Then also Dear Economist, as an economist, should take us though the world of elasticity of demand in order to help us understand better how moviegoers would respond to differential pricing. One big issue is of course how markets could help? Is there room for a market in futures in-a-year-from-now-screenings-on-stage-4-at-7pm and, if so, could there be some derivatives through which you could cover bad movie risks and, if so, what critics might get a hold on the movie rating monopoly?

Honestly, I think we are just scratching the surface of issues that besides Mr. Spilling, must be concerning a lot movie producers and screen time or popcorn vendors in these times of confusing entertainment patterns, when movie industries are still able to sell an expensive experience based primarily on sharing it with others, in times when iPods are threatening with extinction such rock solid sharing concepts as “our song”.

Of course a more in-depth study could occupy Dear Economists a full year ahead and since we are aware there are many other economic anxieties out there in need of guidance, a good question would be how Dear Economist allocates his column space.

Dear Economist movies prices

How does FT know this is not a teenage prank?

“A powerful cocktail of data for predicting recession” by Simon Ward, August 17, tells you that by mixing “four key indicators of monetary indicators, both lagged and current . . . blended together appropriately” you turn into a especially good crystal ball reader. Sir, how does FT know this is not a teenage prank?

Simon Ward

Has the fat lady really sung for the libertarians?

Sir, as someone who has understood and accepted some of the fundamentals of the libertarian arguments but just as frequently opposed the too fundamentalist solutions they offer, I cannot but reject Michael Lind’s “The unmourned end of libertarian politics” August 17. The presence of any ideas and opinions should never be evaluated in terms of if they win or not politically, but in terms of how much they can contribute to the debate.

A world without extremes would be a very grey and dull world as Mr. Lind should do well remembering as he comes out as a sort of smugly satisfied self proclaimed pyrrhic victor.

And so, to all those libertarians out there, remember that there are many of us who hear you, respect (most of) you, appreciate much of your arguments and really feel you should keep on arguing just as we will keep on arguing our dissent.

Michael Lind

Forget the global warming fund and help instead the US to overcome its addiction.

Sir, Jagdish Bhagwati proposes that “A global warming fund could succeed where Kyoto failed”, August 16, and argues that “it is hard to imagine the US objecting to making nations pay for their total pollutions . . . [as] Such as tax is only way of creating a missing market”. Where has he been?

The US is a country that has gone berserk consuming petrol and therefore a tax to put some break on that would be a perfectly natural thing to do, and not only for environmental reasons. Nonetheless, such is the depth of its problem that even their high priest Al Gore does not even dare to mention a tax, not even as a possibility.

Since a fund, in order to function, needs that all its partners share in its objectives, and values, Mr. Bhagwati should instead join us in telling the US, as friends tell each other the truth, that it is really not worthy of sitting down to discuss global warming, until they have reduced their per capita consumption of petrol, at least 20%. Besides, if successful in helping the biggest oil addict to fight his habit one would, in environmental terms, have accomplished more than any ambitious global warming fund could ever dream of achieving, in more than a decade, or two.


Jagdish Bhagwati global warming fund oil addiction

WTO, please take your time!

Sir, Fred Bergsten’s “Plan B for world trade: go regional” August 16, reads a bit like a bewildered courtiers screaming out “The Kings is dead, long live the King” anxious to regain their footing and sense of order in life.

As I see it though, instead of rushing into new negotiations, desperately looking for results, any results, more could be gained from using the declared time out for some very serious house cleaning activities, destined to put some order into what is frequently described as the spaghetti bowl of trade agreements. Any global trading system, in order to be credible, needs at one point of time to be understandable and there is a feeling that there has been quite a long time since ordinary subjects, as I, have been able to understand and much less identify with what the monarchs were up to.

I have recently had the luck of being able to participate in a course about the Integrated Trade Solution (WITS) software being developed by The World Bank in collaboration with the United Nations Conference on Trade and Development (UNCTAD) and that helps to provide access to the major trade and tariffs data. After that course, the real unanswered question for me was how on earth did we get anywhere without instruments like these? Or, does anyone really know where we really are as a world in terms of trade? WTO, please, take your time before you start rushing again, otherwise you might really lose us.

The through-the-eye-of-the-needle index

Sir, “It is easier for a camel to pass through the eye of a needle than for a rich man to enter the Kingdom of God” (Matthew 19:24), and so, as you note on August 15, the Washington-based Center for Global Development should be commended for their through-the-eye-of-the-needle index that ranks 21 rich countries on how likely their policies are to promote development. That said, unfortunately this is yet another wishy-washy instrument in that it dilutes the useful though uncomfortable specificities into less tranparent and more debatable averages and you yourself end up with an “It is astonishing that we still know so little about what sort of aid works.”

If you have a thousand movies to see but only time for ten you sure appreciate a list of which could be, even speculatively considered, the 20 best and the 20 worst so as to have an inkling of which to see and which to avoid. Well, in terms of the World Bank and other developing agencies, there is nothing that even closely resembles a best and worst program and loan list and so therefore they have little choice, as you also say, than that of embracing the latest fashions, and on which FT will also duly report. Sir, speaking in the name of all the poor in need of developing policies that really works, please help to ask for a best and worst list and then let us get some real debate.

Center for Global Development Commitment for Development Index wishy-washy

Not much fizz but way too much oil consumption!

Stephen Roach warning that there is “Not much fizz left in the global economy”, August 14, is on the dot reminding us that what has kept the economy going lately has been the hot air provided by the foreign willingness to hold dollar assets and the US consumer spending stimulated by the boom in the housing market. He then goes through the list of support alternatives, comes back empty-handed, and declares the need for “back to basics”, which in this context must clearly mean getting some balance to the US economy. Since if the rest of world is going to help out sustaining some growth it will have to draw down on its dollar assets (do you remember recycling?) and consequently rates will go up and consequently the US must find immediate and drastic ways to curtail their various deficits, fiscal, energy, current account and the environmental responsibility in the most effective way, which of course could best be achieved by imposing a sufficiently large tax on the runaway consumption of gasoline in the US.

It is quite amazing to see how Roach can ignore the issue of the excessive oil consumption in the US, to such an extent that he even mentions that “big oil producers would also feel repercussions from a Chinese slowdown”, even though the US consumes about fifteen times more oil on a per capita basis than China. Being capable of sending away their sons to faraway places to die but not of putting some breaks on runaway consumption of oil is mind-boggling but there must be something so inconvenient about having to tax gasoline oil consumption in the US that even Al Gore finds it convenient to ignore it. Nonetheless, history will look back and shame the lack of leadership in the US for not being able to act on this issue in time, before the crisis.

Stephen Roach Al Gore inconvenient truth

Is it getting too close to home for comfort? Well do something real about it!

Sir, Christopher Caldwell in his “Utopia with border control”, August 12, lets no doubt shine through how even writers in a globalized paper find it hard to come to terms with globalization when it produces extensive migration to their own very local backyards.

Caldwell says that “after years of proclaiming a “solidarity” based on inclusion and values, the EU is beginning to practice a less utopian solidarity based on exclusion and defence” ignoring the important fact that true solidarity and inclusion needs not to be practiced only by keeping the gates to the city wide open, but could be carried out much more effectively for everyone by helping to make the conditions outside of the city much more bearable.

Another a bit unhelpful way of framing the choices is when Caldwell mentions that it is not moral guidance of Europe that citizens of poorer countries want but money and safety, as if these wishes were of any lower standing than moral guidance, and as if the European citizens themselves were in Europe primarily for moral guidance.

It should be very important at this moment for a paper such as FT to perhaps have a staff retreat where they can really talk over their role in a globalized world since it is important that some at least understand the simple fact that whenever you build a wall, it becomes thereafter quite difficult to ascertain who are the really excluded and who are the included, and that role reversals could very easily occur, most specially on a small planet where environmental problems are already breaking down all borders.

Whatever, we FT readers have the right to expect that it does not endorse the possibility of being able to get rid of a problem just by rounding it up and tossing it over a border, like we already hear some in the USA arguing in terms of their illegal immigrants.

Christopher Caldwell Europe migration

Are children responding more cleverly?

Sir, your “Are children getting cleverer?, in the FT-Weekend of August 12, did not fully answer the question but instead left me with the feeling that us adults might be getting more stupid, as I was not able to answer correctly any of your stupidly easy question examples, though I suspected the Stoker-Dracula connection, for no particular reason at all, least intelligence.

That said, and since you felt that your international readers were not in need of any help and did not supply the answers, I did what the young are supposed to do, I googled them and came up with the answers, which felt good, but again left me with the feeling that this had little relevance to intelligence.

The report, though quite interesting, reduced itself too much to the measuring of intelligence in terms of answers to questions, when we as a society are more interested and in need of clever responses. Why on earth should we benefit from having geniuses running around if they all insist on behaving like lunatics?

clever children

Dear, it is just Tim Harford’s book!”

Sir, Tim Harford, August 12, in trying to explain why his book is priced £17.99 and not rounded to £18.00, as this does seems insulting a buyer’s intelligence, reaches deep into his bag of excuses and proves to all of us that, in this department, he is a quite resourceful young man, mumbling something of having to come up with change reduces the risk of the salesman pocketing the full 18. Now, I as a writer, who also have a book listed at 17.99, albeit payable in much more humble US dollars, would just point my finger to the merchants. In fact, when I asked for my book to be priced at 18.01, as I wanted to send a clear message that it was worth 18, and then some, my request was blithely ignored with a very hard to counter “we know more about book buyers than you”.

Giving second thoughts to this whole pricing issue, it appears to me that a 17.99 also gives the transaction a quite attractive bona-fide ring since when it appears on your credit card statement no one would ever think of it as something else than book or something similarly serious. From here on whenever I have a couple of drinks with my friends I will ask the bartender to make out the tab to 17.99 so that… “Oh Dear, that’s Tim Harfords’s book!” If they would just send me the £0.01 for the copyright to this idea I could then probably afford to give away my book, for free, though, unfortunately, few read a free copy. (Why is that? Mr. Harford?)

Tim Harford

Thinking is being outsourced

Sir, you end up your editorial about future travel conditions on August 12 with a “computer junkies trapped in long-haul will have an unusual privilege foisted upon them: time to think. Not everyone will enjoy that, but it is scarcely a fate worse than death”. With it you quite elegantly let through your thoughts about computers being substitutes for thinking but gallantly ignore the fact that the average non computer carrying traveler might also be doing a lot less of that.

This is not meant as a defense of the computer but more as a denunciation of the generalized lack of thinking and that is spreading as a virus to such an extent that even many that presumptuously refer to themselves as think tanks are not feeling much responsible for doing it. How this sad evolution has come about takes more than a brief letter to discuss but it has to do with how responsibilities have been so haphazardly delegated. Two examples of it are how the elites of a society have delegated completely the management of it in the hands of politicians, and bankers, the credit evaluation to a couple of credit rating agencies. In other words, what has been happening is that thinking itself is being more and more outsourced, unfortunately, not necessarily to the best providers.

Let the Transparency Initiative come home

Sir, Robin Harding’s “Why business must back congestion charging”, August 11, leaves us with the feeling that we are getting somewhere, though we end up a little bit dizzy after the so many right and left turns that he takes, perhaps avoiding congestion charges. It should be clear though that the whole system is much more transparent when the congestion charges are paid in cash-tax than when they are paid in some more difficult to measure costs such as minutes of delays payable in individual currencies. That said everyone would benefit from knowing more where the cash goes. In this particular case the Extractive Industries Transparency Initiative comes to my mind. Why do you not do as has been done to Chad and put all the congestion charges, petrol taxes as well, into a big transparent pipeline so that everyone knows what’s up? We know it is difficult to be a prophet in your own land but, in this particular case, since the EITI is a UK idea, you would not have to pay royalties on it either.

Rober Harding congestion charges transparency
EITI

Drive out the risk out from where there should be none!

Sir, Andrew Hill in “A thirst for the most vital liquid asset”, August 7, serves a very good cause analyzing the finance of long term infrastructure projects through long term sources such as pension funds compared to the short term funds, and views, provided by actors such as private equity firms. But somehow, by concentrating too much on the time horizon, Hill misses the issue of risk. Given that providing long-term public services such as water should be the absolutely safest investments it is clear that society should do its utmost to benefit from attracting to it the cheapest and most risk-adverse money, widows and orphans. Problem is that currently, through leveraging-it-up-to-the-hilt and other mechanisms, they seem mostly to be attracting that risk-hungry money that can only signify more expensive water, electricity and others.

risk water electricity

It is just an Indian Summer

Sir, over the last couple of weeks we have read about the strong growth of the US tax revenues and that has somewhat shrunken their immense anticipated fiscal deficit. But, the wording used to describe this event, which to me seems only an Indian summer before winter, has been quite surprising since reading between the lines one gets the impression that mature minds might be close to thinking that the winter is over and the spring is here. Trying to find an explanation for this utterly strange behavior I suddenly recalled that I heard an expert warning about warning the elderly too much about the risks and way bouts of frauds and embezzlement schemes, since just a few repetitions of the warnings could by themselves, creepily, but indeed also quite creepy, breed in the recipients a sense of familiarity that increased the possibilities they would fall for the scams. And so it seems that all the warnings about the impending US financial disasters could now have morphed into signs that confirms that everything is normal, as it should be, so let us then go on, as if nothing.

US fiscal deficit

Basel is a monstrous factory of systemic risks.

Sir, Daniel Tarullo with his “A Simple escape route from the gridlock of Basel II”, August 4, reminds us of how the good intentions of building up a system of minimum capital requirements for the international banking system are turning into the greatest financial systemic risk factory ever seen. For instance the system favors bigger banks which will only signify placing more eggs in the same basket. It has delegated the diversified views of the market into the hands of a couple of few credit rating agencies in such an incestuous fashion that Paul Davies, FT August 3, reports that Fitch Ratings is going to launch a service predicting the likelihood of credit rating downgrades. It helps to tilt the financial markets towards doubtful areas such as the public sector finance incentives and away from the much more vital small entrepreneurs. And finally, to top it up all Basel mechanisms might just end up regulating nonexistent entities since much of the financial activities are responding by going elsewhere, to shadier places, where they are allowed to work as they best seem fit and can perhaps easier escape the Basel risks.

Basel systemic risk

Just a new crop of banana republics!

Sir, Desmond Lachman in “The disturbing deterioration of developed economies”, August 3, correctly informs that the distinction between emerging market economies and developed market economies is becoming more blurred. What he missed though was to make the right, though perhaps “inconvenient”, link to global warming, since there are some of us out there in the hot that sustain that the best evidence of it, is how lately the parallels of the banana republics have been moving north!
Regards from a sweltering Washington with over 100 degrees!

Desmond Lachman banana republics

You could also let out some hot air!

Sir Jacob Weisberg in “Sanctions help to sustain rogue states”, August 3, has us picking between economic sanctions and constructive engagement to topple Dictators but forgets to mention the possibility of other sensible tools such as ignoring them or plainly laughing your hearts out at them. The Dictators do normally have weak and problematic egos and so if there are ways to ridicules those in front of their followers, much of their strength and support would dwindle. Problem is that frequently the oppositions to these Dictators have weak egos too, which tempt them to make huge monsters out of their enemy, so they can be perceived as maid rescuing champions, and so we just end up with a lot of hot air balloons flying around, some quite colorful, but others just plain awful. Among the United Nation’s peacemaking arsenal we need some good ego shattering directors and producers from Hollywood and Bollywood. Where is Chaplin when we need him the most?

Jacob Weisberg sanctions rogue states

All cannot be that bad with Mr Blair!

Sir, there has to be something personal, otherwise for a foreigner - an outsider - it seems impossible to understand the viciousness of Rodric Braithwaite’s “Mr Blair it is time to recognise your errors and just go”, August 2, and for a start it seems to contain far too many adjectives for it to even have been published by FT. That said and sidestepping the issue of Mr Blair’s support to the Iraq war, we should never forget that there are also other things in life. At this moment when concluding reading the UK White Paper titled Eliminating World Poverty – Making Governance Work for the Poor, though I would of course debate some issues, let me as a foreigner assure you that this is indeed a document that should make any Englishman proud, and even make Mr Braithwaite recognise that with Mr Blair all is not bad, by far.

Blair Rodric Braithwaite White Paper UK OK poverty
governance

We need obnoxiousness indexes

Sir Adam Lerrick’s “Good intentions at the expense of the poor”, August 2, is full of good intentions when suggesting to NGOs to shut up but fails to be convincing as it gives little guidance to when they should not. He presents the case of Kiani Kertas pulp mill in Indonesia but, if only ordinary citizens were provided with some idea of how this specific pulp mill could classify on a scale of five, in a worldwide obnoxiousness of pulp mills index, this would help NGOs to focus better their good intentions, and perhaps even help out in getting finance for a Kiani Kertas so as to be able to request the closure of a worse pulp mill sinner. As is, the NGOs have unfortunately only the next in line project to go after and many of these just happen of course to be in poor developing countries. These obnox indexes are needed for ports, dams, power-plants and many more. By the way, obnoxiousness indexes would also allow for a more rational approach to solve the not-in-my-back-yard syndrome that affects many projects needed in developed countries.

Adam Lerrick good intentions Kiani Kertas obnox index