West loses its dominance over the world economy

Columnist Martin Wolf writes in the Financial Times that the dominance of the West over the world economy is now over. The rise of emerging nations, particularly in Asia, challenges old ideas about power and dominance.

QUOTE: The west is not the power it was; its debt-fuelled consumers are not the source of demand they were; the west’s financial system is not the source of credit it was; and the integration of economies is not the driving force it proved to be over the past three decades.

Socialism debate in the US is detached from reality

Columnist Thomas Frank writes in the Wall Street Journal that while many Americans consider President Obama a “socialist,” he actually favors more market-oriented policies. He argues that the debate over socialism in the United States is pointless because the phrase is only discussed in abstract terms without a sense for what it really means.

QUOTE: More than half of us believe the president is a socialist, but we have few self-identified social-democrats on our op-ed pages or Sunday talk shows to show us what one actually looks like.

China’s economy pushes forward but majority of workers still miss out

Willy Lam, a Jamestown Foundation senior fellow, writes in the Asia Times that China will continue to grow rapidly in 2010 but the majority of its wealth still does not reach the Chinese workers and peasants. Plus, local governments are on the brink of bankruptcy.

QUOTE: The lion's share of national wealth has continued to flow into central coffers as well as large-scale enterprises. In the first five months of the year, revenues accruing to the central government grew by 30.8% and profits for big firms soared by 81.6%, while the income of workers and farmers went up by a mere 10%.

Competitive devaluations threaten the eurozone

Simon Tilford, chief economist at the Centre for European Reform, writes in the International Herald Tribune that competitive devaluations between European nations threaten the eurozone. He argues that this poses a bigger threat to the single market than currency fluctuations did.

QUOTE: Eye-watering German wage restraint — German wages, adjusted for inflation, have barely risen in a decade — has boosted the price competitiveness of German-made goods within the currency union, while holding back German imports.

Silence in Thailand’s northeast masks mistrust and anger

David Streckfuss, a writer based in Khon Kaen, Thailand, writes in the Wall Street Journal that opposition supporters in Thailand’s northeast continue to feel suppressed by the government. The extension of emergency rule has led to a “pronounced silence” over the region, but this silence masks feelings of mistrust and anger.

QUOTE: Many in Thai society—and not just red shirts—are beginning to wonder whether the government's approach is leading Thailand back to dictatorship by extending the state of emergency for an undefined period.

Obama right to continue ban on deep-water drilling

An editorial in the New York Times argues that President Obama was right to continue the suspension of deep-water drilling in the Gulf of Mexico. It states that the oil industry’s claims that drilling will be safer in the future cannot be accepted without proof.

QUOTE: Until the industry shows it can drill safely in deep waters, and respond swiftly and surely to an accident, it should not be allowed to go forward with that kind of operation.

Republicans may gain from America’s economic pains

Katrina vanden Heuvel, editor and publisher of the Nation, writes in the Washington Post that Republicans have responded to the nation’s economic crisis by standing as “the guardians of entrenched corporate interests, as opposed to the common good.” They have tried to obstruct every one of President Obama’s reforms. But the Republicans can rightfully argue that the Democrats have failed to deliver enough jobs to the country.

QUOTE: Republicans staked a huge bet on the president's failure in the midst of a crisis, and, with the economic pain continuing, that bet may be coming in.

BP oil spill spells disaster for Great Britain

Frank Dohmen and Marco Evers write in Der Spiegel that BP’s continued failure in handling the oil spill and possible bankruptcy are likely to have a devastating impact on Great Britain. The company employs 10,000 people and pays out 7 billion pounds in taxes and fees to the government every year.

QUOTE: A significant chunk of British pensions depend on BP's well-being. Whether directly or via large private-equity funds, many Britons own a piece of the company. Their pension funds have taken a serious hit from the company's precipitous drop in value and missed dividend payments.

US financial reform bill will create more problems

Former SEC Chairman Harvey L. Pitt writes in the Daily Beast that the US financial reform bill will only create more problems for regulators. The bill does not set out to do what it intends, will lead to unintended consequences and sets the SEC up for failure.

QUOTE: What was, and is still needed, is a regulatory regime with better flexibility that is more nimble, and able to spot potentially damaging trends before those trends become full-blown crises. Instead, what we have is a bill that makes government less nimble, and more ponderous.

Debate over fiscal consolidation must take into account each nation’s needs

Barry Eichengreen, a University of California, Berkeley, professor of economics and political science, writes in Project Syndicate that economists and pundits make it sound like there is only one clear choice for solving the world’s economic problems: either fiscal austerity or additional spending measures. He argues that different nations have different needs.

QUOTE: What might work in southern Europe has no chance of working elsewhere. In other G-20 economies, including the United States, Germany, China, and Japan, the car is still cruising down an open road… In these countries, there is therefore no reason to think that fiscal consolidation would have a strong positive effect on confidence.

http://www.globalpost.com/passport/todays-views/100714/west-loses-dominance