RAPID RESPONSES July 25, 2012 Green fiasco [Re: UK energy policies are sabotaging industry’s global competitiveness, Tuesday] Tony Lodge gets right to the core of why we can’t climb out of recession. The Climate Change Act, passed as the economy tipped off a cliff, stands as one of the greatest acts of stupidity in living memory. Britain won’t grow if it’s [...]
The coalition must press reset and make a positive case for austerity July 24, 2012 GEORGE Osborne’s fiscal strategy increasingly resembles alphabet soup: Plan A for austerity, Plan A+ for magic bullets, Plan B for debt and Plan I for infrastructure. Flexible planning is not necessarily a bad thing. What is a problem, however, is if revisions do not reflect changing economic circumstances but a weakness in the Treasury’s approach. [...]
Japan shows we can’t rely on inflation to tame rampant government debt July 24, 2012 THE DEBT problem currently afflicting the UK and Europe is essentially a question of political economy. Basically, there is a lot of debt around and everybody is wondering who is going to pay for it. All the economic theory in the world fails to get around this fundamental issue. Traditionally, bondholders took the hit when [...]
Push students into maths subjects or watch industry fail July 24, 2012 THE HOUSE of Lords select committee on science and technology has just published an insightful report into higher education in science, technology, engineering and mathematics (STEM) subjects. It rightly suggested that the jobs of the future will increasingly require people with the capabilities and skills that a STEM education provides. However, there is a mismatch [...]
As Spain nears a full bailout, will Germany accept fiscal union to save the Eurozone? July 24, 2012 YES Stephen Barber There is a good reason why markets have been unconvinced by the latest Eurozone intervention: policymakers continue to deal with symptoms while structural problems mount up. This is now the third summer in which investors have seen returns hit by a deepening euro crisis. Each time has resulted (eventually) in credible responses [...]
RAPID RESPONSES July 24, 2012 Mutual benefits [Re: It’s not all bad: Britain is becoming safer despite recession, Friday] Allister Heath is sceptical of mutuals’ ability to add something positive to the market for banking services. But the contribution of mutuals is simple – diversity. For too long, the banking sector has been dominated by a model that emphasises maximising [...]
UK energy policies are sabotaging industry’s global competitiveness July 23, 2012 THE revelation that George Osborne wants fossil fuels to remain a key and important supplier of Britain’s electricity generation shows he can talk the talk. But the chancellor will struggle to give legs to his policy. His statement comes immediately unstuck when you consider how the Treasury is preparing to lump huge taxes on such [...]
Tax and morality: Complicated laws make gaming the system inevitable July 23, 2012 I RECENTLY spent a family holiday in a static caravan in northern France. As we sat outside with a glass of wine, my wife and I wondered why the caravan had wheels – it seemed unlikely that they would need to be moved, and I doubted they would carry its weight. Perhaps it has something [...]
A one-size policy on pay won’t suit all firms equally July 23, 2012 PROFESSOR John Kay is right to try and tackle a culture of short-termism that some listed companies can get caught up in, as set out in his government-backed review of the financial sector. The downsides of short-termism are easy to identify: if investors focus too much on short-term returns, boards are left preoccupied with the [...]
Will Italy and Spain’s decision to ban short selling have any serious effect whatsoever? July 23, 2012 YES Ian Marsh This move by Spanish and Italian regulators was widely expected, as many others have used similar bans in recent years, hoping to stabilise volatile markets or support plunging stock prices. Unfortunately, bans on short selling don’t seem to do either, at least not for long. Apart from some hard-to-verify bounces on the [...]