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Tensions Rise After South Korean Drills

NYT: Free-market fundamentalists rule with their ‘zombie ideas.' Project Syndicate: The euro was meant to change with time. IHT: Weak nations should take a euro holiday.

Military escalation and heightened tensions will not benefit the Koreans

An editorial in the Korea Times welcomes North Korea’s decision to not retaliate after South Korea’s military performed live-fire drills on Yeonpyeong Island. It argues that a harsh response to common drills would only heighten tensions. But it also states that South Korea’s Lee Myung-bak has been wrong to adapt a hard-line stance without proper defense preparations.

QUOTE: [South Koreans] would have wished for their government to the exact opposite ― maintaining a soft, flexible policy outwardly but strong as steel in inward preparedness.

Floating currencies goes against globalization

Manuel Hinds, former finance minister of El Salvador, writes in the Wall Street Journal that the international monetary system of allowing and encouraging floating currencies runs contrary to the very idea of globalization.

QUOTE: Fragmentation also opens the door for currency and financial crises, turning capital flows, a naturally stabilizing force, into a destabilizing one through currency speculation.

China must conquer its political problems to address its economic challenges

George Magnus, senior economic adviser at UBS Investment Bank, writes in the Financial Times that China must overcome its political issues related to insecurity and intransigence in order to effectively deal with its significant economic challenges. It must control rising inflation and restructure its economy.

QUOTE: China’s leaders face big decisions as signs of overheating of the economy become apparent, and with increasing pressure to reboot the country’s development model. But politics in China mean responses to these challenges will be enigmatic and uncertain.

The euro was meant to change with time

George Soros, chairman of Soros Fund Management and of the Open Society Institute, writes in Project Syndicate that it is understandable that the euro is changing and adapting new mechanisms. When the euro was first created, it was understood that it was incomplete and would adapt to pressures and demands as they came.

QUOTE: That is how the European Union was created, taking one step at a time, knowing full well that additional steps would be required.

Free-market fundamentalists rule with their ‘zombie ideas’

Columnist Paul Krugman writes in the New York Times that “free-market fundamentalists” have been proven wrong again and again over the past few years. And yet, they continue to gain political importance and influence in America.

QUOTE: People who should have been trying to slay zombie ideas have tried to compromise with them instead. And this is especially, though not only, true of the president.

Tensions flare across East Asia

David Paul Kuhn writes in Real Clear Politics that as war becomes actually conceivable between North and South Korea, tensions are rising elsewhere in East Asia, notably between China and Japan. China’s recent assertive behavior has forced Japan to abandon its “basic defense force” policy.

QUOTE: China and Japan are also a long way from their early-twentieth century tension. But this sobered outlook does not mean that today's East Asian discordance is also regional politics as usual.

Europe’s new bailout fund undermines the euro’s original promise

An editorial in the Wall Street Journal argues that the European Union’s move to create a new permanent bailout fund, which creates more of a fiscal union between nations, will make the euro harder to maintain in the long run. It also undermines the original vision of the single currency.

QUOTE: The politicians are applauding themselves for moving toward a fiscal union, but they are doing so by undermining the original promise of the euro while encouraging more borrowing without consequences, and above all without pro-growth reforms.

American progressives need to come to terms with CEOs

Columnist E.J. Dionne, Jr., writes in the Washington Post that American progressives need to understand and accept that they live in a market economy, and a healthy business climate is crucial for society to operate best. Businesses and their CEOs should not be viewed as the enemy.

QUOTE: It's also important to recognize that there is no single business class or corporate model.

India and China unite over economic deals

An editorial in the Times of India argues that the recent trip by Chinese Premier Wen Jiabao to India made little progress on political issues but led to significant trade and investment deals between the two rising powers.

QUOTE: New Delhi needs to keep up the economic and strategic engagement with China, while hoping to get Beijing to show more sensitivity to its core concerns.

Weak nations should take a euro holiday

Harald Benink, professor of banking and finance at Tilburg University in the Netherlands, writes in the International Herald Tribune that countries like Greece, Ireland and Portugal should break away from the euro for the next 10 years. If they successfully implement changes to their economies and get their debts under control, they can rejoin it.

QUOTE: This is a big advantage over proposals, which advocate a split-up of the euro into a strong and a weak euro, which would involve an expensive conversion in all countries.