[Peter Orszag] Four ways Congress can upgrade credit rating

Now that Standard & Poor’s has downgraded the U.S.’s “AAA” credit rating, it is important to respond boldly and, at the same time, lower expectations. The first step is for our political leaders to frankly acknowledge the problems at hand: The U.S. economy will face a hard slog for an extended perio

Aug. 9, 2011

[Noah Feldman] Debt-deal disaster shows genius of democracy

Imagine you are a senior official of the Chinese Communist Party trying to figure out whether democracy is a good idea. The brinkmanship over raising the debt ceiling is a prime example for the argument that democracy is irrational, right? So say the commentators, one and all. Just think of the reli

Aug. 9, 2011

[Editorial] S&P downgrade should make U.S. deal easier

Sunday was splendid for beach-goers and bikers. But it also brought nasty tail winds from the first credit downgrade in United States history:― For the half of U.S. households that own stocks, the news from Tel Aviv ― where Sunday is a trading day ― suggested a turbulent Monday as world markets dige

Aug. 9, 2011

[Editorial] Leaders, central banks should stop the stampede

Financial markets can create their own dangerous dynamic, as Warren Buffett pointed out after Standard & Poor’s downgraded U.S. debt securities on Aug. 5. Buffett was on the mark. The downgrade triggered panic selling around the globe on Monday, leading to demands for more collateral from investors,

Aug. 9, 2011

[Dominique Moisi] What failed in Norway?

PARIS ― Japan in March 2011 and Norway in July 2011: any comparison between the madness of nature and the pure madness of man in Norway may sound artificial. Yet, confronted with their respective tragedies, Japan and Norway displayed a very similar combination of qualities and flaws.In both countrie

Aug. 8, 2011

[Peter Allen, Barry Eichengreen and Gary Evans] Europe’s plan does nothing to reduce Greek debt

 Postmortems of last month’s European Union summit meeting have now turned to why the Greek debt rescue failed to restore investor confidence in the country’s finances. Many reasons are advanced: the failure to communicate clearly; the complexity of the plan; the inability to coordinate with th

Aug. 8, 2011

[Editorial] S&P’s dubious downgrade

We’ll find out soon enough what the markets will make of the decision by Standard & Poor’s to downgrade its rating of U.S. sovereign debt to AA+ from AAA. But the early response from the people who matter most in the controversy ― the Asian and European nations that Hoover up Treasuries ― seems to s

Aug. 8, 2011

[Thomas Klassen] Learning from the labor dispute at SC First Bank

The bitter seven week strike at SC First Bank, the longest in the Korean banking industry, reveals deep divisions between workers and management. More importantly, it exposes critical choices that workers, employers and government must make in the next few years.The planned introduction of a perform

Aug. 8, 2011

[Peter Goldmark] Can we even govern ourselves?

You’ve read about cults that lose touch with reality and gather on some hilltop to greet the end of the world.We have a large cult-like group in the House of Representatives who have lost touch with economic reality and whose delusions may cause the country they say they love incalculable harm.Even

Aug. 7, 2011

[Editorial] Lackluster investigation

The parliamentary investigation into the savings bank scandal has virtually ended without uncovering anything about the massive irregularities at the suspended banks. The outcome is disappointing, to say the least, and all the more so given the prosecution’s failure to answer a host of questions reg

Aug. 7, 2011

[Laurence Kotlikoff] Generational balance, not budget balance

Debt crises make great drama. The big shots attend meetings, look terribly worried, then stomp out, accusing each other of bad faith. Finally, at the witching hour, they reach agreement and tell us all is fine, for now. The tough thing is sorting out what’s really going on. In the U.S. case, the ans

Aug. 7, 2011

[William Pesek] Let’s get Homer Simpson’s hands off the controls

Japanese executives aren’t known for bucking the establishment. Hiroshi Mikitani is a rare exception at a time when rebellion is most needed. The president of Rakuten Inc., Japan’s biggest online retailer, turned 46 on March 11. That was the day when a record earthquake and tsunami set off the worst

Aug. 7, 2011

[Editorial] Japan’s economic white paper calls for resilience

The fiscal 2011 government white paper on the economy and state finances, issued July 22, analyzes economic conditions in the wake of the March 11 disasters. It calls for the creation of an economy resilient to crises and makes some policy proposals; however, the proposals are too general in the con

Aug. 5, 2011

[Editorial] Fast rail as a metaphor for authoritarian China

What began as a transport accident in the busy rail corridor of Zhejiang province is turning into a test of China’s authoritarian methods of preserving stability. Should the old template of information control prevail? Is it even possible? Mastery of online media by citizens is weakening notions of

Aug. 5, 2011