[Michael Schuman] To fix China, look to Korea

Earlier this week, markets made clear how little they think of China’s attempts to revamp the giant, state-owned companies that dominate its economy. After the government approved the merger of two massive shipping groups, two of their listed subsidiaries swiftly shed more than $850 million in value Monday. Investors appear to appreciate something the regime doesn’t: Simply tweaking the structure of state-owned enterprises -- professionalizing their management, inviting in private investors and

Dec. 18, 2015

[David Fogarty] Paris agreement kick-starts global energy revolution

The world has just signed one of the most important agreements in history. More than just an environmental pact, the Paris climate change agreement will kick-start a global energy revolution. 　Nearly 200 nations in Paris have signed on to an agreement under the United Nations Framework Convention on Climate Change that the world has to go on a carbon diet, signaling an end to dirty fossil fuels and deforestation, and giving green energy a big boost. 　Every year, we pump far more carbon dioxide i

Dec. 17, 2015

Tackling plastic waste, in honor of Paris pact

On Sept. 15, 15 retailing companies joined hands to launch the no-plastic bag campaign, urging consumers to bring their own bags when shopping at their venues on the 15th of each month. In return, additional discounts are on offer at some shopping centers. 　These retailers also plan to step up the efforts, by increasing the number of no-bag shopping days. 　For weeks, TV channel Thai PBS has launched the anti-plastic bag campaign. Celebrities have shown their faces, telling the sad stories about

Dec. 17, 2015

Privileges make mockery of the public

Last Saturday, EBC broadcast footage of a road block on Freeway No. 3 resulting from Democratic Progressive Party vice-presidential candidate Chen Chien-jen’s motorcade passing through for an election campaign event.  　The fuming passenger who shot the video footage complained that politicians seemed to forget that ordinary citizens also have their own business to conduct and schedules to accede to. It was not immediately clear whether Chen was aware that the cordon had been put in place for him

Dec. 17, 2015

Braced for Fed move

The rupiah fell to as low as 14,120 against the U.S. dollar on Monday, in part due to the U.S. Federal Reserve starting its monthly meetings on Tuesday, because the majority of analysts around the world are expecting the U.S. central bank to finally raise its benchmark interest rate, which is currently close to zero, by at least a quarter of a percentage point.　　Currencies and stocks in most other emerging economies are also on a roller coaster again as things remain in flux after several postpo

Dec. 17, 2015

The Fed’s new normal and fiscal policy　

Wednesday’s announcement that the Federal Reserve will raise its benchmark interest rate by a quarter of a percentage point may be the most widely anticipated news in the history of U.S. monetary policy. Had Fed Chair Janet Yellen said anything else, investors would have been stunned.　　All the pre-event chatter made the move mandatory. Fortunately, the decision was also correct, because slack in the labor market has diminished to the point where monetary policy needs to gradually get back to nor

Dec. 17, 2015

Stiglitz’s sticky prices give lessons on unemployment

For a long time, the assumption underlying much of mainstream economics was that the invisible hand worked its magic seamlessly. Prices moved smoothly up as demand outpaced supply and rushed back down when the tables were turned, keeping markets in equilibrium.　To be sure, many observers realized the truth was actually quite different — that prices, and wages and interest rates in particular, were often sticky, and that this sometimes prevented markets from clearing. In labor markets, this meant

Dec. 16, 2015

Cruz taps into disaffected conservatives’ anger

All year long, smart Republicans have been whispering: Keep a close eye on Ted Cruz. He’s got a message that appeals to the party’s most conservative voters. He’s running a good campaign, well organized and well funded. He’s going to be a finalist — and he might just win the nomination.　Well, what do you know: Right on schedule, as voters in Iowa settle on their favorites, Cruz’s fortunes are looking up.　A Monmouth University poll released last week found Cruz in first place among Iowans who are

Dec. 16, 2015

In Myanmar, malaria brings political changes

Myanmar is emerging from 50 years of isolation and military rule slowly. Even after the victory of the pro-democracy party in November elections, the country is fragile and fragmented. The military still holds much political power. The country is struggling with entrenched poverty. Decades of ethnic and regional warfare have left Myanmar with more armed groups than there are candidates in the U.S. Republican presidential primary.　What could improve this situation? Maybe malaria.　Last summer in W

Dec. 16, 2015

What I found on the other side of class divide

In the late 1970s, I went to Kingswood Oxford School and later Loomis Chaffee School. A member of the exclusive prep school club of Connecticut, mine was an insulated life of wealth and privilege. To me, the rules were clear: Chase those who are ahead, outrun those who are behind and ignore everyone outside my world because they’re irrelevant.　My cozy life was forever altered in the fall of my sophomore year at Loomis. My mother left her family and our swanky home in Hartford’s West End to marry

Dec. 15, 2015

A banner year for behavioral science

Behavioral science has become the usual term for psychological and economic research on human behavior, often designed to explore people’s biases and blunders. For that research, 2015 has been a banner year, with an unusually large number of important books. Five of them stand out — and two of these weren’t even written by social scientists.　“Phishing for Phools,” by George Akerlof and Robert Shiller, is an instant classic. Akerlof and Shiller contend that free markets lead companies to “phish”

Dec. 15, 2015

Paris climate pact is just a beginning

Given the grave danger posed by unchecked climate change, it’s understandable that concerned citizens worldwide would want to hail the historic carbon-emission deal inked in Paris last weekend. And, in fact, getting consensus from 195 nations with varying levels of economic and political development — let alone environmental consciousness — is a remarkable diplomatic accomplishment. But with climate scientists stating that the nonbinding agreement won’t fully solve the problem — even if it’s ful

Dec. 15, 2015

A deal worth celebrating

Governments have taken a vital step in confronting global warming. Until now, there was no universal commitment to address the problem, no common target and no system for measuring progress. The Paris climate talks provided all three.　That’s enough to justify the claim that the agreement reached this weekend was a breakthrough. Yet, as governments acknowledged, their pact won’t succeed without further effort. Paris is a promising departure. Getting to the right destination is another matter.　For

Dec. 15, 2015