MIA: Leadership In Europe And US
If you look closely at the back of your milk carton, you might see the faces of politicians in the US and Europe. Recent history shows that when it comes to dealing honestly and openly with the real challenges facing the economies on both sides of the Atlantic, political leaders are missing in action.
Lack Of Leadership Defines Fiscal Cliff Deal
Nouriel Roubini decries the absence of leadership in the recent fiscal cliff drama in his column in the Financial Times. Roubini says neither side will acknowledge that “maintaining a basic welfare state, which is right and necessary in our age of globalisation, rapid technological change and demographic pressure, implies higher taxes for the middle class as well as for the rich.”
The New York University professor adds that by keeping spending cuts out of the fiscal cliff deal, “Democrats have emboldened Republicans who are determined to slash taxes but lack a plan to pay for it. It is again up to Washington’s policy makers to fix the problem before the market does it for them. Tuesday’s deal suggests this will not happen with any ease.”
The Economist goes one step further by contending that the lack of leadership in Washington ” is disturbingly similar to the euro zone’s in three depressing ways.”
The failure to address the underlying systemic faults that have weakened the economy – debt and deficits – is just one commonality between the political class in Europe and the US. Secondly, the periodical says, is the overwhelming influence of narrow-minded interest groups.
Just as the Europeans were unwilling to look beyond “petty national concerns” about who would finance the bail-outs and who controls bank supervision has crippled EU efforts to revitalize the economic union.
Lastly, politicians on both sides of the Atlantic have demonstrated a continued inability to be honest and upfront with voters about the real challenges that demand real sacrifices.
“Democrats pretend that no changes are necessary to Medicare (health care for the elderly) or Social Security (pensions). Republican solutions always involve unspecified spending cuts, and they regard any tax rise as socialism. Each side prefers to denounce the other, reinforcing the very polarisation that is preventing progress,” laments the magazine.
The Debt Limit: A Primer
Replacing the fretting over the fiscal cliff is the worry about whether or not (and how) to raise the debt limit, but exactly what does that mean? The Congressional Research Service issued a paper in December 2012 outlining the history of the debt limit and recent actions taken to raise it.
Top Five Business Books of 2012
Inc. magazine offers its list of the top five books on business issues in 2012 – and no surprise that most focus on corruption in the financial system.