September 30, 2006

Sir, keep it simple please

Sir, in “Undead Pensions”, September 30, you describe well the risks that a higher than expected longevity could have for any pension plan, but be careful though that this does not turn into the perfect useful excuse that hides the much more serious consequences of too much optimism with respect to the estimated return rates. Now after rightly mentioning the role of the “real insurance company” you thereafter go into some not easily understood sophistications asking for “a market in longevity” and that if I read it correctly seems like a proposal for hedge funds that trade in longevity derivatives and cover themselves by going long in avian flu risks and look to settle their trades within their own lifetime. Financial Times in its great knowledge should never forget that there is also some wisdom and some value to keeping things simple, especially in such certain things as death and taxes.

September 29, 2006

In immigration you cannot and should not have the cake and eat it too

Sir, Marin Wolf’s suggestion that “Immigration can no longer be ignored” September 29, is a perfect example of how muddled this issue is since his prime recommendation that “the focus now should be on bringing in skilled people who are most likely to make a big economic contribution to the country” will of course only deepen that divide that makes unskilled labor even more willing to risk their life’s crossing it. When we think about the capital labor relation that economics is really all about going Wolf’s way makes us just think about “if only we poorer countries could classify the capital as skilled and unskilled”.

Wolf’s skilled/unskilled dilemma also reminded me of a new development of expensive houses close to Washington, where the new owners had to get together and build some low price houses, so that persons willing and capable of being firemen could afford to move in close enough to be able to arrive before the houses had burned down. Also, in the long term, it is very difficult to see how a country could be better off keeping the relative incentives for their domestic low skilled workers high, while imposing competition on the skilled ones since to me it sounds like a sure recipe to end up as servants to the newcomers.

Finally when Wolf tells us that “Countries matter . . . as communities with a shared destiny” he, as a columnist that thrives on globalization, should also remember that whether we like it or not, all these communities are part of a bigger humanity living on a small planet.

September 28, 2006

Ooops, we expected 30 seconds, or 30 minutes at the most

Sir, Timothy Geithner, Callum McCarthy and Annette Nazareth make a call for “A safer strategy for the credit products explosion” (September 28) and they clam us by giving credit to the industry for acting in advance of a crisis. But, since they also mention that “confirmations outstanding longer than 30 days have been reduced by 85 per cent” which sounds truly scary for any outsider like myself that would be expecting 30 seconds, 30 minutes at the most, I guess we all better knock on wood and pray they are right and that we are not riding on a full-blown crisis, only to be confirmed when the market really catches up with what it is doing.

September 27, 2006

Don’t suppress the fund’s board, allow it to function instead

Sir, Charles Wyplosz asks “Why not suppress the International Monetary Fund’s board altogether?” (December 27) and he is wrong. What you need to achieve though, and here I speak as a former Executive Director of the World Bank, a quite similar institution, is that the board has a chance to effectively perform its functions. Currently the board is literarily drowned in mind-boggling thousands of documents on thousands of issues. The day the management of the Bank and the Fund has to report on what they consider the best ten and the worst ten projects or programs, that day the board can really start working on what they should, instead of muddling away and diluting all of their voice on the grayish middle spectrum. What is stopping this from happening? The fact is that a list of the ten best and the ten worst is also an immensely effective tool for holding the management accountable.

I am looking for the 50 most influential bartenders, barbers and taxi drivers to discuss my blog

Sir, I just sent a letter commenting on a Martin Wolf article but I guess it is going to be hard for it to reach the presses now that he has appointed 50 of the world’s most influential economists to discuss his articles. What a splendid idea! I as a much smaller and humbler voice will now try to look for the 50 most influential bartenders, barbers and taxi drivers to discuss my blog. By the way with my choice of feedback I probably risk less to limit it incestuously to a club of mutual admiration.

"In the US we trust" becomes global term of economic faith

Sir, Martin Wolf’s “America could slow us down” (September 27) somehow ignores the possibility that just as the Americans did when they accepted the “In God we trust” printed on their bills as an act of faith when the dollar abandoned its convertibility into gold, the world is now willing to live with an “In America we trust”, at least while there is such a world shortage of better alternatives. If this is so, one could argue that we have still far to travel on the roads of the American current account deficit currently used by the world to dollarize since the fact is that, if you want to lay your hand on a dollar, you have to sell or give something for it.

Frightening? Yes, but is not the world itself a frightening place that needs many acts of faith in order to make life bearable?

September 26, 2006

What they need is some good ghostbloggers

In all modesty I have what I presume is the best blog THIS ONE, but if I dared check it, it probably receives very few clicks. In this respect I found Gideon Rachman’s “Apostles of the blogosphere may just be political Pooter” (September 26), where he describes the unsuccessful efforts of some politicians to create good blogs very interesting as it opens up new possibilities for establishing those PPP’s (Public Private Partnership) that are currently so much favored. As I see it many of our public sector figures are in deer need of a ghostblogger and I could be a good one, if only I could feed my needs some other ways, since blogs are, by all means, the poor man’s best ego trip.


Just no cell-phones or private consultants

Sir, as a reply to your article “MBA Students cheat the most” September 21, Guy Wroble replies with a suggestion of creating a SEC-like body “to police the academic performance of MBA students something that only has value from a job creation perspective. Instead examiners should develop open books exams because this does indeed reflect better the future working conditions of any MBA but they don’t do it, because they are lazy and it is easier to ask questions when designed for closed books. The way examinations are being done is stacking the MBA deck in favor of the cheaters, which presumably could have some negative societal consequences. The only tools I would keep out of any MBA examination rooms are cell phones and private consultants.

September 25, 2006

Stop egging them on!

Sir, on September 25 you tell us that “European critics inflict defeat on Wolfowitz” but reading it over and over again I cannot really fathom how you can even try to look for a victor in squabble where the only defeated will most ceartainly again be the poorest of the poor. We did not pick Wolfowitz, we might not like how he was picked, but the fact is that he was picked and given the extremely important real battles the World Bank has to fight out, it is now our responsibility to be as helpful as possible and call upon the discussant to reach workable agreements, instead of egging them on.

September 22, 2006

Is it time for a Victorian inflation measure?

Do we need a basket of consumer assets?

Sir Samuel Brittan in “It’s not he labour market, stupid” (September 22) talking about what his Victorian forebears did is sort of hinting at the need for a new inflation measure that instead of measuring the value of a basket of consumer goods just in term of dollars, pounds and what have you should also measure it in terms of a basket of consumer assets. Though perhaps too Victorian for many, it might not be a bad idea.

Tax gasoline rather than anything

Sir, since on the margin there is nothing that could help reduce the threath of global warming so much as to have the US reduce its gasoline consumption, and since on the margin there is nothing as effective for that than to tax it more, you are absolutely right when in your editorial (September 22) you spell out the truth telling your american friends to “Tax gasoline rather than sue carmakers”. This is what friends are for, even when the truth is so inconvenient that even an Al Gore does not dare to mention it. Next time though and since they are really in a full blown denying mode about their addiction, please do take the full step and make clear that they should tax gasoline… rather than anything.

How do you diversify for the investment advisor’s risk?

Sir, in “For many rich people, wealth is a consequence of being succesful, Peter Scholla, himself an investment advisor, tells us that “the rich through the hiring of independent advisers with broad ranging responsibilities and powers. . . end up employing a variety of firms” meaning private banks. This sounds like a good suggestion for a diversification technique although the follow-up questions would of course then be, how many independent advisors do you need to hire to diversify yourself out of the investment advisor’s risk?

We all need global communications to be a pure global commodity

Sir, Stephen Littlechild tells us that “Brussels has got it wrong on roaming charges” (September 22) and that “regulation undermines market discipline and incentives” which coming form a former UK electricity regulator could seem as a sign of very little solidarity with his brothers in arms but this is not so since until the fuel-cells arrive and free us from the need of the electricity lines the electricity sector is fundamentally different from the mobile telephone sector that has already been freed from the telephone lines. That said neither is Littlechild’s statement as pro free-market as it seem since there is currently no reason for not allowing free open global competition in the mobile phone sector. Having a good number of satellites flying around up there offering to connect us with anyone anywhere and turning communications into a pure commodity that is really what we the consumers are all waiting for, in Europe and everywhere.

September 20, 2006

Should we really give IMF management carte-blanche?

There is no doubt that the International Monetary Fund needs to evolve but that “The fund’s ancien régime will have to give up its privileges” in order for this to happen as Martin Wolf says (September 20), is not a foregone conclusion. Reducing the European representations, allowing the managing director to be from any country and giving more independence to management which are the three things that Wolf consider needed seems a bit like putting some order in your desk while you are thinking about what to do.

Wolf mentions that the IMF has the potential to play a valuable part in managing the world’s transition to an integrated global financial system and tough it sounds very right it would be good if he shared with us some concrete examples of what this would entail so that we can better share into his act of faith. As an outsider that has very respectfully questioned many of the Fund’s actions over the last decade, before giving what in Wolf’s French amounts to a carte-blanche to management, the least I would expect from them is a detailed plan of action which of course should also include the terms on which they themselves will be held accountable to stop them turning into even a less legitimate new ancien régime.

September 19, 2006

Why don’t you just try moving in together

Sir, I found Gideon Rachman’s “Clashing civilisations on the banks of the Bosphorus” (September 19), both interesting and confusing. Though I must confess ignorance about the specifics of the Turkey-Europe issue the fact that when it comes to sensitive issues such as borders knowledge does not guarantee much either I dare to put forward some thoughts that came to my mind.

The first is whether in a world that is globalizing you should still be looking to draw the borders along their natural lines, Bosphorus, cultures and what have you, or whether you might be better off placing those borders on more greyish terrain so as to not exasperate the differences. The second question, more pragmatically, is if instead of marrying why don’t you just move in together and see how it goes. You should never forget that a relation is always a two way street and so even while Europe might like the set up, Turkey might not. Finally, in case of separation, the “I am not good enough for you” has shown itself innumerable times to work much better than any alternative, not only because it is also frequently true.

September 18, 2006

Help parents to pick among school-brands

Sir, James Tooley in his “Low-cost schools in poor nations seek investors” (September 18), explores the immense possibilities that private sector education has to offer the poor in countries where weak institutions do not allow for good public sector education, and he is very right about it this especially when considering that competition is also useful for keeping strong public institutions strong. He also correctly hints at the important role that school brands could have in developing good standards but this is of course only as long as the value of the brands are based on educational facts and not just publicity stunts. In this respect we recently read about some extremely simple tests that the World Bank used in Peru and that by just measuring the number of words a child could read in one minute, were capable to tell very much about the quality. These tests which empower parents to navigate between school “brands” during those vital early years of their child’s education are extremely important tools, perhaps even for rich parents in rich nations.

September 13, 2006

IMF is enyoying the calm in the eye of the hurricane.

Sir, in his “Why bad news for the Fund is excellent news for its clients” September 13, Martin Wolf tells a story of countries that have finally learned that there is such thing as a limit to the inflows to your economy that can be productively digested but, since they do not want to stop these inflows by allowing an appreciation of their currency, as this would make them lose job-creating competitiveness in a global world, they instead accumulate foreign reserves. Does this mean that the problem is solved and that IMF is no longer needed? Of course not! The only thing that is happening is that instead of spreading around the imbalances around the world we are now putting them all in the same basket, the US and clearly when that unsustainability is not longer sustainable, and then IMF will be just too much back in business. Let us pray that IMF does not use this calm in the eye of the hurricane to diversify into other businesses but to build up their forces and their spirit to confront the perfect storm when it arrives.

September 12, 2006

The value of the inflation figure really depends on what you need guidance for

Sir, Stephen Cecchetti though making a good point explaining why “Core inflation is an unreliable guide” September 12, ignores the fact that depending on what you really are looking for guidance on, headline inflation might be just as off the charts. If we need to measure inflation for an “average” worker to make a cost of living adjustment then headline inflation could be alright but, if the inflation figure is to be used by an investor to make sure he is not losing purchasing power, then headline inflation might not mean anything at all. As an example let us imagine a world with just one product, a house, that can be either bought or rented. Since inflation as normally measured reflects the cost of renting houses and not their prices then, if the rent is not increased you will record zero inflation, even though the reason for it was that much savvier investors were all running to buy houses to protect their purchasing value and avoiding to rent like pest. When you consider that many public debt issues include inflation adjustments clauses one could be tempted to ask if the real meaning of inflation is truly transparently disclosed.

September 11, 2006

What institution is not maladapted?

Sir, in the editorial of September 11 you mention the World Bank Group as maladapted for life in this century but, frankly, what institution is not? Although we believe, as much or more than you that the World Bank has a vital role to play in a world of ever-growing interdependency we are not very sanguine about the possibilities of it being adequately reformed when the reformers themselves are those truly maladapted countries who do all they can to hang on to the illusion of being independent.

On another issue and observing how in the fight against corruption there seems to be more and more work to be done each day, we cannot think of one single reason why you feel the need to hit down so hard at Mr Wolfowitz qualifying his drive at it as obsessive. I have no doubt that the billions of individuals that suffer at the hands of corruption would all love him to be obsessive about fighting it, as long as he is was also effective.

September 09, 2006

About life in the buffet lane

Sir, this week, September 9, Dear Economist had to answer the question how to get the most out of a buffet and without falling into the trap of complicating life with analyzing whether the marginal utility of that extra carb lies on the frontier of the efficiency curve of the calories where it intersects with best value per spoonful, something which would be very hard for us normal economists without PhDs to follow, he does a superb analysis of the motivations of the kitchen telling us, if a restaurant, wait until the end since they want to fill you up early with the cheap stuff or, if a wedding, go for the hors d'oeuvres since they’re out to impress you and wedding cakes make lousy fireworks.

These are valid suggestions indeed and they would suffice for most occasions. Nonetheless knowing a bit myself about life out there on buffet lane, where sharp elbows compete, let me just add a couple of pointers. Mind you, just in case, for the record, let me assure you that I have never ever tried them myself, as I would hate to get entangled with some transparency advocates just because one of my parents spoiled what would otherwise be the perfect genetic map of a gourmet by spilling gourmand chromosomes all over it.

First, just as a precaution, always remember to keep a plastic bag in your pocket, for your doggy. Second do not ever sub-estimate the value of privileged information and so while looking like you’re looking for the men’s room always try to get a peek into the kitchen to see what’s cooking. Finally, numero uno, workable everywhere, even in private weddings, is to put a ten dollar bill into the hands of a waiter of your choice and then relax knowing you’re in for a special treat.

Ignorance is vital to keep the economy going

Sir, in your editorial “Back to work for the world’s investors” (September 9) you wisely remind us that “new paradigms often turn out to be new ways of losing money” but when you then, after only one paragraph, mention favorable possibilities in the trading of options on market implied volatility, this also reminds us of that old paradigm that says that investors go for what they least understand, since this is what allows them to harbor their largest illusions.

As someone who has extolled the virtues (and bliss) of ignorance since it helps to drive the search for greener valleys that is such an essential component of economic growth, I have been somewhat leery about the power of the web to spread too much knowledge. Luckily the duration of the information imprints are also shortening and so therefore we see that Argentina’s public debt is already back on the investor’s menu.

Finally let me congratulate you on your valiant effort to raise some sympathy for the hardships of investors and fund managers, even though it might not suffice to console those who only get their income through a salary exposed to the jaws of the global crusher.

September 08, 2006

What is really meant by international support?

Sir, Krishna Guha reports from Washington (September 8) that “The World Bank is to seek international support for a new push to help poor countries recover assets stolen by corrupt leaders and held in banks overseas” but that “Many governments have been skeptical about the plan, fearing it would overshadow the bank’s development objective, slow down disbursement of aid and lead to arbitrary decisions on which countries get help.”

As a citizen of a developing country I cannot help bit to reflect on the fact that if it only were we the citizens who voted on this issue, and not some of our governments, Mr Wolfowitz would count with all the international support he could ever wish for, not only with respect to the poor countries.

The confusion is global

Sir, yes globalization is indeed a difficult and confusing issue when even a Nobel Prize winner as Joseph Stiglitz can tell us that “We have become rich countries of poor people” (September 8), totally ignoring that this has less to do with globalization and much more with how the richness is distributed locally in each country.

Also on the issue that “so many countries end up with unmanageable debt burdens” he seems to blame it primarily on that those debts were contracted in foreign currencies, exposing it to global volatility and suggests as a solution that developing countries should be able to borrow in their own currencies or in a basket of currencies, but blithely ignoring the fact that most unmanageable debt burdens are just the logical consequence of the governments having contracted excessive debts for the absolutely wrong reasons.

As a citizen from a developing country I can testify that when your country cannot pay its debts because its government has wasted away the resources you really do not care whether you problem is in dollars or in pesos. Besides, if in dollars perhaps the mistakes are even more globally shared (haircuts) since, if in pesos, most of the cost, through inflation, would fall mostly on your own poorest poor.

Finally as to the high volatility of the global markets, I cannot but invite Mr. Stiglitz to try some of our attractions and then he would really be able to talk about volatility. As a financial consultant, I have seen hundreds of good projects go belly up precisely because they were not funded in dollars but in local currencies, when inflation and interest rates teamed up to overnight transform what were ten year repayment terms into effective ten months.

September 07, 2006

We must stop the emergence of a global lumpenproletariat

Sir, Desmond King and David Rueda do a very good job at scratching the surface of the immense problem with “Cheap labour is creating an outsider class in Europe” (September 7), especially since the problem is not only Europe’s; it is happening all over the world; the problem is growing rapidly so much that non-standard jobs are already standard in many countries; and as they mention it leads to a tendency of equating cheap labour with second-class citizenship, although perhaps the term ignored citizens would be even more appropriate.

There is an urgent need for the world to find ways of truly assimilating within their societies all these new non-standard workers, informal sector workers, illegal immigrants and workers that work in the everyday growing illicit activities because if we are ever going to have a chance of putting the global house in order, for instance in terms of protecting the environment, the last thing we need is the emergence of a global lumpenproletariat.

One of the real challenges we face finding solutions to these problems is the fact that since there is so little data available about these sectors our PhD researchers have nothing to run their regressions on, which makes many of them stand at loss as to what to do, and has them instead going back to study, again and again, the plenty data available about the formal sector and its standard jobs.

By the way the problems that we confront here are not really related to the issue of labor being cheap since the other side of exactly the same coin, is just that labor is too expensive.

September 06, 2006

When does the “loss” really occur, when the worker has become globally uncompetitive or when his job finally disappears?

Sir, Martin Wolf, back with vigor, tells us that “We must act to share the gains with globalization’s losers” (September 6), which sounds right but when he then says that “being opposed to trade is no more reasonable than being opposed to other sources of higher productivity” he also reminds us that there really is no reason why we should make a case of specifically differentiating losers from globalization from losers affected by other factors.

Fact is that whenever there is a more efficient alternative to deliver goods or services elsewhere but countries are not using them because of other considerations, like wanting to assure employments at home, these jobs are effectively placed on artificial life support and so the “loss”, when the jobs finally disappears, has much more to do with a reduction of the subsidies or the cost of keeping them, than with globalization. For instance in the case of the orange growers of rich Florida and that are now kept in business by specific duties on orange concentrate that in some cases have been equivalent to more than 70% ad-valorem duties, the already existing losers are those consumers of poor Arkansas that have to pay a higher price for their morning juice.

By the way the whole concept of “losers” is wrong if implies having to win all races, since the real losers from globalization and from all other sources of higher productivity as well, are those that hang on too long on days gone by without moving on.

September 05, 2006

Seems migration estimates were wrong all over

Sir, it was interesting to read John Kay’s piece on “How the migration estimates turned out so wrong” (September 5) where he describes the serious underestimations made in in official studies commissioned by the European Commission. These estimates stand out in stark contradiction with the extremely high unofficial estimates of millions I was told by my close to panicking European friends and family. From what we now see the estimates were normally distributed with reality coming out close to the average.

Bank ghostbusters?

Published in FT September 12, 2006

Sir, David Skeel ("The ghost of a crisis in equity funds hides real benefit", September 5), tells us the reason equity funds and hedge funds are "the ghosts of the market's future" is that they "may increasingly assume many of the functions traditionally handled by banks" and "use a wide array of financial instruments now available to hedge the kind of risks traditionally borne by the banks". If he is right then that would make them more like the ghosts of banks past and also turn the banking regulators in Basle into some slightly foolish-looking ghostbusters.

Global stability depends on globalization

Sir, Jan Kregel and William Milberg in their “Global stability rests on sharing the gains” (September 5) get it quite right in their title but from thereon their message seems a little bit muddled, perhaps because the authors are still suffering that wall-syndrome that makes us all want to believe you could isolate yourself sustainably from your neighbors.

Globalization, in any form, is unequivocally here and is as a bare minimum seeping through all borders with its environmental impacts and its spread of nuclear arms capabilities. Of course there are gains, and pains, to be derived from globalization but in order to understand them better we must move away from looking at short term data like this year’s GDP growth or last year’s unemployment rate and find ways to measure it more in terms of where we would have been without it, after a couple of decades.

For instance when Kregel and Milberg mention that in “the US, a strengthening of the pension systems, a substantial increase in the minimum wage and the provision of universal access to health insurance would protect against the unequal effects of globalization” they create false expectations. Better pensions and a health insurance could indeed, if provided independently, by redistributing some of the profits, help to aminorate some local inequalities (not global) but an increase in the minimum wage would just directly eat away on the possibilities of competing in the global markets, thereby willingly renouncing to capture some of the profits that could be shared.

This comment is not intended to criticize the authors but to try to illustrate the complexities of the issues. I am the first to admit taking some wrong turns in this debate, a couple of times a day.

Let us then wish for a good backlash

Sir, Gideon Rachman in “Why the world may regret the end of the neo-con era” (September 5), warns us about a possible backlash that could “take America back into isolationism or a cynical abandonment of the promotion of democracy”. This sounds indeed like very awful possibilities, until you look a little closer at the significance of the terms. For instance, doing foreign affairs “my way”, “on my own and with “God on our side”, is in fact just another very real type of isolationism, no matter how many times you visit your McDonald’s across the Rio Grande. From this perspective a backlash could be good if it leads America to a more participatory global responsibility.

The same could be said about democracy since when we outsiders observe the ever increasing powers of the lobbying industry in Washington and on how the representation of its younger citizens is diluted by the aging baby-boomers, some of us would argue that it could be good for America to take a time out from selling its democracy worldwide, so as to give their own an overhaul first.

That said what we truly need to worry about is if a backlash would change America from having a we-care-for-the-world attitude into a we-don’t-care-a-damn about them but that does not seem to have much to do with neo-cons either, as they sometimes have shown to care just a bit too much for their own good (and ours).

IMF cannot be the independent central bankers' clubhouse

Sir, In your editorial "What is the IMF for?" (September 1), you qualify the original formulas used to assign the quotas determining responsibilities of nations to deposit cash and the rights to borrow it as "arcane". Yet you seem to favour a recalculation that will just produce a reshuffling of the local interests. In a world where we see multinationals getting rid of their "home country", it might instead be time to introduce some representation in the International Monetary Fund that is not bound by pure arcane geographical considerations.

You mention a lack of credibility and legitimacy but seem to believe this could be solved by giving the professional staff a free rein. It is much more difficult than that. One of the reasons the IMF has lost credibility is in fact the mistakes of its staff and these go much further than the handling of the Argentine debt crisis. If you take a closer look, you will find them backtracking on so many of their "cast-in-iron" policies. The world needs not less accountability in the IMF, but much more.

In my view the Fund's problem is that it has now turned into the clubhouse of the "independent" central bankers. What instead we need the IMF to do is to open up its executive board and diversify the recruitment of its staff so there is a better chance for the board to have a healthier perspective of what the IMF's role should be.

Though I agree completely with you that the top job should not be reserved for a European, since "he must now defend interests wider than those that put him in place", may I also advance the idea that it should not be reserved for a central banker either?
Published in FT, September 5, 2006

September 02, 2006

Who told Dear Economist that parents are more able negotiators than children?

Mr. Gill Harnsley, September 2, in sheer desperation over his young children’s behavior that drives him crazy and sometimes makes him spank them reaches out in what most probably he considers a last resource to an economist for advise and comfort. Dear Economist though, believing he is being consulted on a much earlier stage responds with the whole shebang about creating a rational financial incentive system where in an open cry market of stars and black marks their weekly allowances are to be decided.

Little does Dear Economist realize, perhaps he is not yet a father, that Mr. Harnsley’s problems are way beyond that stage and has much more to do with his children turning out to be more able negotiators than he, having already developed their own charts with immediate rewards that go from hugs to the screaming out of accusations such as, mommy, daddy spanked me!

At the end of the day, of course it is all an issue of negotiation but where does Dear Economist get the notion that the children are more hooked than their parents to immediate gratifications? Since he blurts out something about children’s high discount rate and short term horizons I must ask him to look around and see the many non-existent savings rates and fiscal deficits that are out there in the world of the parents, just to finance their current consumption.

September 01, 2006

It is still good old Swedish pragmatism!

Sir, as you so correctly state in “Sweden’s decision”, September 1, many countries around the world do indeed follow with much interest what those Swedes are up to and so it is very important to be very clear about what they really do. For instance when you mention to “combine a vigorous private sector with high taxes”, we know that many in the developing countries would read that as having high corporate taxes, though in fact in Sweden high taxes are applied primarily to the individuals, after fairly low taxes on the corporations have allowed the individuals to find well paying jobs. In this respect my reading on what changes are currently on the menu in Sweden, especially those related to payroll taxes, sounds very much like traditional standard fare of old Swedish pragmatism and that looks to make it easier to create those jobs they intend to keep on taxing, just the same.