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Posts Tagged ‘Finance’

Warren Buffett’s right-hand man lashed out at government handouts while also praising the bailout in a speech at University of Michigan.

Charlie in charge

Berkshire Hathaway’s Vice Chairman Charlie Munger and his longtime business partner Warren Buffett apparently do not see eye to eye when it comes to charity. In 2006, Buffett donated pledged 85% of his $40 billion fortune to the Bill and Melinda Gates Foundation and has recently been urging more billionaires to do the same. Munger is having nothing of it. “There’s danger in just shoveling out money to people who say, ‘My life is a little harder than it used to be,’” Munger said at an event at the University of Michigan, which was moderated by CNBC. “At a certain place you’ve got to say to the people, ‘Suck it in and cope, buddy. Suck it in and cope.’”

Both billionaires, however, backed the bank bailout. Does Munger oppose individual charity but support corporate welfare? (more…)

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The tax loophole Fifa imposed on the World Cup’s developing nation host country was what originally attracted me to this piece. As I read more though, the post became less about “the Death Star that is Fifa,” as David Smith of South Africa’s Mail & Gardian put it, and more about how bad of an idea it was for the country’s leaders to take on this tournament.

With South Africans’ dreams of soccer glory dashed by the elimination of their Bafana Bafana from the tournament today, fans may now be hoping that at least the World Cup will deliver on the economic boost its organizers have repeatedly promised them. They are likely to be disappointed again. 

“We want, on behalf of our continent, to stage an event that will send ripples of confidence from the Cape to Cairo—an event that will create social and economic opportunities throughout Africa,” former South African President Thabo Mbeki said in the run up to the tournament. While Mbeki touted the international attention the World Cup would bring to South Africa, the government of his successor Jacob Zuma has made much of the attendant infrastructure improvements. Following a victory by Bafana Bafana in a friendly against Columbia in the newly renovated Soccer City stadium on May 27th, the national spokesman of the ruling ANC party issued a celebratory press release suggesting that the upgrades would “make the country ready to meet the many demands of a growing economy.”

The headline figures in a report from accountancy firm Grant Thornton released on the eve of the tournament seem to support the politicians’ claims. Despite the dampening effect the recession and weak global recovery have had on attendance, their study predicted that World Cup could add as much as half a percentage point to South Africa’s annual gross domestic product. That would be a huge boost for a country where GDP is only expected to grow by some 2.5 to three percent in 2010.

But there is good reason to question those figures…

Click here to read the rest of the post for TNR‘s World Cup blog or to make a comment.

Photo credit: AfricanGoals2010 (via Flickr)

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This was a self-selected Prospect article critique for my application to their fellowship program. See this post for more information.

They probably won’t vote for it. But by including GOP ideas in the finance bill, Democrats can make it difficult for Republicans to effectively campaign against it.

Tim Fernholz believes the best strategy for Democrats to win the fight over re-regulating Wall Street is to learn from the lessons of the health care reform. The question is, what exactly are the takeaways from that successful legislative battle?

The first lesson, Fernholz says, is to be assertive. In the wake of Massachusetts Republican Scott Brown’s election to the Senate, congressional Democrats realized they would have to take a strong, cohesive stance to enact health care reform. And with that decision made, they rallied together and passed a controversial bill. Fernholz notes that their assertiveness has boosted both the popularity of their health care reform overhaul and, if the breathless reporting of POLITICO is to be believed, the party’s midterm reelection chances.

Fernholz’s other lesson is that Republicans cannot be counted on to cooperate. “If Democrats want to replicate their health-care success,” Fernholz suggests, “the best strategy for strong reform is to bring a tough bill to the floor and dare Republicans to filibuster it.” But Republicans don’t need too much taunting to call a filibuster. Indeed, with little substantive provocation, the minority party has set a new record for obstinacy this congressional session. And, as Fernholz notes, this is a strategy Republicans have doubled down on in the wake of their crushing health care defeat.

By focusing primarily on the assertiveness Democrats showed at the last moment and the stonewalling of the GOP, Fernholz overlooks perhaps the most important lesson from the battle for health care: the importance of co-opting the best Republican ideas. (more…)

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Cover Of The 2/18/09 Issue: The death of conservatism

This was written as a part of my application for TNR‘s once sought-after reporter-researcher position while I was wrapping up my web internship at The Nation. In the past, the year-long position has been an important career springboard for many accomplished journalists. Now I’ve heard TNR, the venerable Washington institution, can only afford to pay some $5,000 a year to whomever is selected. In 2009, I didn’t even score an interview. In 2010, I wasn’t even interested in applying. Oh, the sorry state of journalism…

As far as the actual analysis goes, I think it’s held up pretty well. Maybe I wrote a bad cover letter. Who knows? Any critiques are welcome in the comments section below.

FINANCIAL TROUBLES

The most important argument against nationalization raised in the lead editorial is that “absent clear conditions… nationalization could easily provoke a panicked sell-off.”  The news that has come out of the Treasury since the editorial was published has been anything but “clear.”  Geithner’s widely derided speech outlining the disbursement of the second round of Trouble Asset Relief Program funds lost the confidence of the markets, which will likely limit his ability to take any action more bold than simply handing out money to banks.  This timid approach that TNR editorial rightly suggested would be the “worst course of action” appears to be the direction in which the Obama economic team is leading the US.

The first act of the “Geithner-Summers psychodrama” was especially interesting to read in light of these disappointing developments.  The next scene is no doubt well into production.  The muddled TARP II (re-branded as the Financial Stability Plan) speech did not clear up how the administration plans to dispose of the toxic assets eating away at banks’ balance sheets or who is really directing the financial clean up.  The combination of Geithner’s tax-tarnished confirmation and now his expectation management failure have made him appear as anything but an “Obama-like perma-cool” leader, as Scheiber put it.  Scheiber also missed the opening salvos of the State/Treasury border skirmishes: Geithner foolishly accused China of “manipulating” its currency in his written responses to the Senate Finance Committee’s confirmation questionnaire.

The financial troubles that Geithner, et al., are struggling to resolve will present a serious challenge to health care reform that was not discussed in Cohn’s otherwise excellent feature.  The hopeful confluence of public opinion in favor of reform with the rise of broad-based interest groups like “Divided We Fail” was thoroughly examined, as was the argument against health care reform (which he had previously identified as “the best case against universal health care”).  However, Cohn did not address what will likely be the loudest case Republicans make in their inevitable opposition to comprehensive reform: the ballooning budget deficit.  The right used their recent conversion to fiscal discipline as justification for trimming the much-needed stimulus program.  They are likely to use the same shrill scare tactics to minimize change to the broken health care system.

Russia too is suffering from the worldwide recession.  While I found the exposé of the Kremlin’s p.r. ploys fascinating, I couldn’t help but wonder whether they have the attention and budget necessary to continue with pricey consultants, “self-laudatory” summits, and Russia Today propaganda broadcasts given the collapse in the price of oil and, with it, the living standards of the formerly docile Russian people.  The p.r. offensive may be too costly a distraction for an increasingly embattled Russian government.

FRUM, COLEMAN, AND CONSERVATISM

The cover story on the history and future of conservatism provides a useful lens through which to view the divergent paths of David Frum and Norm Coleman.  (more…)

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