Bachmann: No One Would Take 10-1 Deal During Debate Because the Cuts Were ‘Fake’
August 14, 2011 No Comment
Click here to view this media Rep. Michele Bachmann was asked by Chris Wallace why all of the Republicans during the debate in Iowa were so completely unwilling to compromise that all of them would not even accept a ten to one deal on deficit cuts to tax increases. Rather than admit that Republicans are now so rigid on their stance of never, ever raising taxes after pledging their allegiance to Grover Norquist and that no sort of compromise will ever be acceptable to them, what was Bachmann’s response? They all raised their hands because the cuts in the deal would have been “fake.” WALLACE: Let’s go back to that moment in the debate, though, when you — and I’ve got to say, all the other candidates on that stage said that you would walk away from a debt deal, here it is right here, $10 in real spending cuts, to $1 in revenue increases. 10-1. Even Reagan’s top economic adviser, Marty Feldstein, said that is too hard-line, that that would be walking away from a huge conservative victory. BACHMANN: Well, I think probably Reagan would be the best example, because Reagan was going to get $3 in spending cuts for every $1 in tax increases. It ended up being $3 in tax increases for every $1 in spending cuts. That’s the way it works in D.C. The deal sounds so rosy in the very beginning, and usually the cuts are illusory, they are off into future years. And of course one Congress can’t bind the next Congress, and a Congress lasts for two years. So we can’t bind what future Congresses can do. We can beat our chests and be really proud and say, oh, we’re going to cut trillions of dollars, but we can’t guarantee what future Congresses will do. That’s why no one would take that deal on the Fox stage of the debate, because we all know that they’re fake cuts, essentially. They sound good. They’re soundbites, but they are not real. I am about reality. That’s what I care about. This is not a joke. This is not just a political game. This is getting the country back on the right track. People really are suffering, all across this state I have seen it. People want jobs, they want job growth, and they want someone who has the backbone to do it. I do. I guess by that measure, no one in Congress should ever vote on anything that can be overturned by a future Congress or those votes are meaningless. The truth of the matter is we’ve got one party that is so inflexible on tax increases that they don’t care how many lives it destroys as long as we never raise taxes on their rich campaign contributors.
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Over 100 of world’s top scientists write to PM warning of impact to range of industries of proposed cuts in research funding More than 100 of the world’s most senior chemists, including seven Nobel laureates, have written to David Cameron to warn of the impact of proposed cuts in funding for scientific research essential to industries ranging from biotechnology to agriculture. In a letter sent to the prime minister on Monday, and seen by the Guardian, professors of chemistry from universities including Imperial College London, Oxford, Leeds, Glasgow, Bristol and Queen’s University Belfast, argue that the decision to reduce funding for synthetic organic chemistry would “injure” the UK economy and “irreparably damage” its global competitiveness, while forcing chemists to look overseas for jobs. It was accompanied by a statement backing synthetic organic chemistry – which produces key compounds for everything from plastics, drugs and food to petrochemicals and paints – signed by more than 100 senior scientists from companies such as Novartis, Bayer and BASF, as well as Nobel laureates including Sir Harry Kroto, Sir Peter Mansfield and Sir John Sulston and heads of departments at Harvard University and the Massachusetts Institute of Technology. “Synthetic organic chemistry and the new molecules that synthetic chemists produce will in the 21st century come to influence vast tracts of human endeavour from molecular archaeology to molecular zoology,” it reads. “To even think of disadvantaging and disabling such important scientific innovation beggars belief.” Anthony Barrett, a professor of chemistry at Imperial, organised the letter after meetings last week with the government agency that distributes funds for chemistry in the UK, the Engineering and Physical Sciences Research Council (EPSRC), left him concerned that critical decisions affecting the future of the sector had been made without proper consultation with scientists. “As an academic and entrepreneur, I am seriously concerned by the damage which this EPSRC prioritisation will cause to many university departments of chemistry, vibrant industries and fragile new spin-out companies in the UK,” he told the Guardian. According to the Royal Society of Chemistry (RSC), chemistry-linked sectors contribute £258bn to the UK GDP, supporting directly and indirectly around 6 million jobs. The EPSRC announced a project this year called “Shaping Capability” aimed at prioritizing its annual budget of more than £760m of public funds to deal with expected budget cuts of up to 15% in real terms over the next few years. It plans to fund chosen research areas at the expense of others, based around the national importance of that field. One of the first announcements of areas earmarked for reductions was synthetic organic chemistry, which is currently funded with £44m through more than 200 grants. In their letter to the prime minister, the UK academics said they were “profoundly disturbed” by the EPSRC’s move. “Perhaps, most worryingly, this decision will significantly disadvantage biomedical research and innovation, resulting in fewer spinout companies and SMEs being created, such as the contract research organisations, which are a particularly successful sector of the economy.” The scientists called for MPs on the House of Commons science and technology committee to invite the EPSRC’s chief executive, David Delpy, to give evidence to them and defend his agency’s actions. A spokesman for the EPSRC said it had to take a strategic approach with its limited funding, if the UK was to maintain its global research standing. He said funding for synthetic organic chemistry was being rebalanced after a spike in 2008-09. “To provide renewed support to that degree will not be sustainable particularly when considering other priorities within the physical sciences portfolio therefore the EPSRC investment in this research area will be reduced relative to others in the portfolio.” David Phillips, president of the RSC said that UK chemists had been left in the dark about the EPSRC’s plans for future funding and that his organisation had not been consulted, by their definition, on the proposals. “If the EPSRC, as we are led to believe, has made this decision based on hard data provided by universities concerning money awarded and impact of research then it should engage with the chemistry community and present that to us.” An EPSRC spokesperson said the agency had “shared our developing plans with a wide range of stakeholders at various stages, discussed the approach and key sources of information and evidence being used, and invited them to highlight important information which should be taken into account, but we did not ask these bodies to make our decisions for us … This process could not have been done by holding a formal consultation process and we have been clear throughout that we did not do this.” Paul Clarke, a chemist at the University of York who sent a letter to science minister David Willetts last week in order to raise similar concerns from more than 100 UK chemists over the EPSRC’s plans, said that there was a risk that the agency’s ideas would undermine the scientific research base of the UK. “In five years time the skills for conducting fundamental science in the UK will not be here, because everyone will be chasing money to work on the widget the EPSRC thinks will solve societal problems. At the moment we’ve got a quango that appoints itself, is about to appoint the peer review people in line with its priorities. Who is it accountable to? Nobody is onboard with these policies. These policies will lead to nothing short of the destruction of fundamental scientific research in the UK.” Barrett said that it was understandable that chemists would get cuts to their public funding in present economic conditions. “I’ve no problem with downsizing, what we have an objection to is taking the downsizing and giving an additional burden to a sector of the economy that’s highly successful. We’re quite happy to take our punishment but we don’t see why we should take extra punishment because of a few people that are not qualified have made decisions that are wrong.” Chemistry Research funding Higher education Research Science funding crisis Science policy Alok Jha Ian Sample guardian.co.uk
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Ben Lopez has spent 17 years bartering with kidnappers – and he’s never lost a hostage. The secret, he says, is psychological skill and gut instinct ‘You must be John. I’m Ben Lopez.” “Good to meet you, Ben.” We both know he isn’t called Ben Lopez, but we maintain the pretence. Everyone has to have a name and his might as well be Ben Lopez. For the past 17 years, Lopez has worked as a kidnap and ransom negotiator, a job in which his own safety – as well as that of the hostages – depends on his anonymity. Not that you can miss him in the flesh as he is 6ft 5in tall and about as broad. Which turns out to be pretty much why he came to be offered the job. Lopez trained as a psychologist in the US and worked in a psychiatric hospital. Whenever patients threatened to become violent, the staff looked to Lopez to sort them out because of his size. “I enjoyed the challenge,” he says. “I found I could control the patients into doing what I
Continue reading …Michele Bachmann, Government Leech, Wins Iowa Poll. Claims She Knows All About ‘Job Creation’
August 14, 2011 No Comment
Click here to view this media (h/t Dave at Video Cafe) On This Week with Christiane Amanpour, Jake Tapper interviews Iowa straw poll winner Michele Bachmann. (Let’s point out that the Iowa straw poll is a fundraiser for the state GOP. It actually costs $30 to take part, so it tends to attract the true believers.) It’s traditional for the media to let candidates have their initial victory lap without too much in the way of hard questions, and Tapper pretty much leaves her alone — except for a few half-hearted jabs asking her what she would cut in government spending: TAPPER: So the Republican field gets smaller by one, with former Governor Tim Pawlenty dropping out, but Congresswoman Michele Bachmann, the victor, still has a long road to the nomination. And she joins me now. Congresswoman, first of all, congratulations on your victory. BACHMANN: Thank you, Jake. Thanks for having me on. TAPPER: Now, do you have any reaction to Governor Pawlenty dropping out? BACHMANN: Well, I wish him well. I have great respect for the governor. We’ve known each other for a long, long time. And he brought a really important voice into this race. And I’m grateful that he was in. He was a — really a very good competitor. TAPPER: You guys did have words during — during the campaign, and one of the — you seemed to represent a more uncompromising Republican. He seems to represent more of a compromising Republican, someone willing to make deals. One of the reasons you did so well in the straw poll was because your message resonated so much with Tea Party Republican, with Christian conservatives. I’m wondering, how do you expand beyond the Republican base? Why would a moderate Republican vote for you? BACHMANN: Well, everywhere I’ve gone, all across Iowa, there isn’t an event that I do that I don’t have people come up who say that, “Michele, I’m a Democrat, and I’m voting for you,” “I’m an independent, and I’m voting for you.” They’ll tell me, “I voted for Barack Obama, but I’m not voting for him again. I like you; I like what you say.” And I think it’s because I’m talking about what people really care about, and that’s turning the economy around and job creation. And I’ve been there, and I’ve done that. I’m a former federal tax lawyer. And my husband and I also started our own successful company. I get it with job creation. Oh, yeah. She goes from being a foster parent where she gets to claim the maximum from her state because her husband is a mail-order psychologist — and then they expanded into a clinic that takes government money for praying away the gay. And then she gets elected and starts collecting federal benefits. Doesn’t sound like “job creation” to me — more like “working the system.” And I think what people see in me is that I’m a real person. I’m authentic. And they want someone who’s going to go to Washington and represent their values. That’s really what you saw here in Iowa in the straw poll yesterday. You saw a big message sent to Washington. People really saw the kind of the punch to the gut that America got this last week, and they really want someone that they can trust that they believe in who’s actually going to turn the economy around. TAPPER: Governor Perry jumped into the race yesterday. And like you, he’s a hero to the Tea Party and to social conservatives, but he’s also the nation’s longest-serving governor with a record of creating jobs. He’s leading you in some national polls. He has great support among your base. He has the executive experience you do not have. Why should a Republican voter pick you over Governor Perry? BACHMANN: Well, I’ve been in Washington fighting the fights for the last four or five years. And I’ve been at the tip of the spear on these fights, for instance, raising the debt ceiling. I was the leader for the last two months saying, “Let’s not raise the debt ceiling.” I had a plan for not going into default and not raising the debt ceiling. The president had no plan. I was the first member of Congress to introduce the full repeal of Obamacare and of the Dodd-Frank law. And I fought against the Obamacare bill and brought literally tens of thousands of Americans to fight it. I think that’s what I’ve demonstrated, is that I have a core set of principles that I believe in. I’ll fight for them. That’s what we need in a president of the United States, because a president is more than just a manager. What they really bring is leadership to bear. They appoint good people, and they bring leadership. And that’s what we need, is someone who we can believe in and trust in, who’s going to stick to what they say. TAPPER: Don’t you think Perry is now your chief competitor, in terms of you — you guys are going after the same voters. You have a lot of the same themes. Why would someone pick you over him? BACHMANN: Well, I think because I have a demonstrated, proven record that I will fight for what people care about. I am bringing that message, of when it comes… TAPPER: And he hasn’t been fighting for what they care about? BACHMANN: Well, you know, he’ll run his own race, and he has his own message. I have mine. And I think of it, again, on the — on the national stage, I’ve been involved in all of these issues and will continue to be. TAPPER: Governor Pawlenty wondered if you even met the minimum requirement to be president because you lacked executive experience and results. BACHMANN: Well, you know, there is no requirement in the Constitution that one be a governor in order to go into public service. Ronald Reagan was a governor, but what made Ronald Reagan great wasn’t his governing experience as a governor. It was his core set of principles. Jimmy Carter was also a governor, but I don’t think anyone would argue that America prospered and flourished under Jimmy Carter’s presidency. So being a governor and having governor-level experience isn’t the number-one requirement. It’s really, who is the person? What is their character? That’s what the Federalist Papers talked about. What’s their character? Who are they? What have they done? In Minnesota, I led a movement and put my voice behind changing education. That’s really how I cut my teeth in politics, was on education reform. And we’re not a conservative state. We’re far more of a liberal state. But I brought Democrats and independents and apolitical people together. We actually changed our entire education system in Minnesota, because I brought people together, and we had reform. That’s what I’ll do as president of the United States. TAPPER: You talk about your leadership on the debt ceiling issue, but Rick Santorum, who came in fourth in the straw poll, called your position on just refusing to raise the debt ceiling, he said it was not only irresponsible, but outrageous, since immediately the government would have to cut 40 percent of the government. What cuts would you make? BACHMANN: Well, it’s not outrageous at all. What’s outrageous is turning us into the biggest debtor in the history the world. No nation has ever been in debt to the level that we are. And it wasn’t that long ago that we were the world’s largest creditor. We have to get our house in order. This year alone, we’ve brought in $2.2 trillion in revenue from all the taxes we pay in, and then we spent not only every penny of that, but we spent $1.5 trillion more. TAPPER: Right. So what would you cut? BACHMANN: That’s a problem. TAPPER: What would you cut? BACHMANN: Well, immediately, I think what we need to do is recognize that we will tell the markets that we will pay the interest on the debt, don’t worry about default. Number two, we will pay our men and women in military. It’d be irresponsible not to. And anyone who’s currently on Social Security, you get paid. But beyond that, I would bring all members of Congress together. And this isn’t some project for 10 years and 15 years down the road. Right now, we’re going to reform entitlements. We’re going to reform them for anyone who’s currently not on them. We’re going to change them so that they’ll work, because… TAPPER: Medicare, Medicaid? BACHMANN: Medicare, Medicaid, they have to be changed. Why should we continue to run these program the way we did 45 years ago? Systems have changed. We can — we can make these far more efficient than what they are. Social Security is another program, 80 years old. Why would we continue to run it in the same way we did 80 years ago? Let’s modernize it so it’s there for people who depend on it. TAPPER: One last question I wanted to ask about. You once characterized homosexuality as, quote, “personal bondage, personal despair, and personal enslavement.” Do you believe that? BACHMANN: Well, I am running to be the president of the United States. I am not running to be any person’s judge. And I give — I ascribe dignity and honor to all people, no matter who they are. And that’s how I view people. TAPPER: So you would appoint an openly gay or lesbian person to your administration? BACHMANN: I would look, first of all, will they uphold the Constitution of the United States? And, number two, are they competent to do what they need to do? And are they the best at who they are? That’s my criteria, nothing more. TAPPER: Last question, and that is, does Pawlenty leaving the race and Rick Perry coming into the race change your strategy at all? BACHMANN: Well, I think every day going forward we’ll take a look at what’s happening with strategy, but our main strategy is to win. Obama is my strategy. I intend to be the nominee of the Republican Party and to take him on and to defeat him in 2012, because we have to turn the economy around and create jobs. That’s what I’m going to do. And I’m committed to not resting until we repeal Obamacare. TAPPER: All right. Congresswoman Michele Bachmann, thanks so much for joining us, and congratulations again. BACHMANN: Jake, thank you.
Continue reading …Harnessed and in bulletproof vest, Anders ‘not unmoved’ by return to island but no remorse shown, investigators report Norwegian police took the self-confessed mass killer Anders Behring Breivik back to Utøya island on Saturday to stage a reconstruction of his slaughter of 69 people there three weeks ago. In a photograph of the visit in the VG newspaper, 32-year-old Breivik is shown standing in a shooting position, as if aiming a rifle at someone in the water. “We were able to animate his memory with regard to what happened out there,” police prosecutor Paal-Fredrik Hjort Kraby told reporters, adding that many new details emerged in the eight-hour journey around the island. “It was clear the suspect was not unmoved at being back on Utøya, but he did not want to elaborate on it to anyone and there was no expression of regret for his actions,” Kraby said. In VG’s pictures Breivik is shown harnessed with a rope leash while clad in a bulletproof vest and red sweater as he led investigators around Utøya under heavily armed protection. At times he also wore handcuffs and ankle cuffs. Kraby described Breivik as calm and co-operative, as he has remained through almost 60 hours of interrogation since the July 22 shooting, which followed a car bomb explosion in Oslo that killed eight. The victims had been attending an island summer camp run by the youth wing of Norway’s Labour party, which Breivik condemned in a rambling manifesto. Most of the victims were in their teens or 20s, and some were shot while attempting to swim to safety. Despite Breivik’s admission that he committed the attacks, Kraby said an extensive reconstruction was needed to show survivors and relatives exactly what happened. “It’s important they get to know as much as possible about what happened on the island, even if it has to come from the suspect himself,” said Kraby. “We’re seeking as many details as possible about each killing.” (Additional reporting by Terje Solsvik; Editing by Rosalind Russell) Anders Behring Breivik Norway Europe The far right guardian.co.uk
Continue reading …Iowa Republican Chair Tells Palin To "Get To Work" If She’s Looking To Be A Candidate
August 14, 2011 No CommentI would seriously love to delve deep into the psyche of Sarah Palin. There are entire libraries full of books to write on the unique blend of narcissism, hubris and willful ignorance that make up just her public persona. When all the GOP presidential candidates started to set up camp in Iowa, with the intent to woo potential support in the Ames Straw Poll, I knew it wouldn’t be long before Sarah grasped desperately for at least a little measure of that spotlight. And true to form, Palin made a surprise revival of her bus tour, eager to show her kids the “historical significance” of the Iowa State Fair and their sticks of fried butter. But no, she’s not there to launch a presidential campaign, or to divert attention from any of the other legitimately glad-handing politicos. It’s just a matter of coincidence that she was conveniently available to talk to the media there , dontcha know.? But that’s not good enough for Iowa Republican Chair Matt Strawn, who advised La Palin that if she thinks she can flounce in at the last moment and prove that she’s still a relevant candidate, she’s got another thought coming. It takes work for you to be taken seriously in the first completely meaningless political event: you have to shake hands, you have to kiss babies, you have to meet voters face to face and be prepared to answer questions from them. And that is why Sarah Palin–no matter how many times she pulls these diva acts and preens for the cameras, coyly saying she hasn’t made up her mind–isn’t running for President. It’s work. And it’s unpleasant to have to mingle with the riff-raff and pretend to care about their problems. There’s nothing about it that appeals to the Half-Governor. Being on camera and making snide remarks is far more rewarding.
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The bull – named Raton, or Mouse – has such a fearful reputation that its owners command a high price for festival appearances An inquiry was launched on Sunday after a 29-year-old man was gored to death by a bull during a festival in eastern Spain. The man, whose name was not released, died at a hospital in the town of Xativa on Saturday. A regional government official said an investigation into the goring had been opened. The 500 kilogram bull – named Raton – has killed two other members of the public during festivals over 10 years. Because of the animal’s reputation, his owners reportedly earn €10,000 (£8,750) each time it appears at a festival. “He’s the one that gets the highest prices,” owner Gregorio de Jesus said of Raton. “But still he works out the cheapest because wherever he goes organizers double the ticket price.” Television images showed the man being tossed in the air and then hit along the ground in Xativa’s bullring. In Spain, many summer festivals feature bull runs in streets or bullrings, where revellers can come close to the beasts. Witness accounts cited by Valencia’s Las Provincias newspaper said the man appeared to be under the influence of alcohol and had been escorted back to his seat in the stands during the bull run immediately before Raton’s appearance. He then made his way back down to the ring before the incident. Spain guardian.co.uk
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World Bank chief launches scathing critique of western economic leadership as US and Europe struggle to recover Global stock markets are entering a “new danger zone”, the head of the World Bank has warned in a scathing critique of economic leadership in the US and Europe. Robert Zoellick said the global economy was going through a multispeed recovery with western economies stuck in the slow lane following the downgrading of US government debt and the ongoing crisis in the eurozone. Investors have displayed increasingly erratic behaviour in recent weeks, with the FTSE 100 index in London rising and falling by 3% in successive days as financial professionals digested the prospect of another worldwide recession. “What’s happened in the past couple of weeks is there is a convergence of some events in Europe and the United States that has led many market participants to lose confidence in economic leadership of some of the key countries,” said Zoellick, whose institution invests in developing countries. Echoing the concerns of the Standard & Poor’s credit rating agency, which has stripped the US of its AAA credit rating due to fears of political paralysis in the world’s largest economy, the World Bank president indicated that American and European leaders were not acting quickly enough. He said: “I think those events combined with some of the other fragilities in the nature of recovery have pushed us into a new danger zone. I don’t say those words lightly … so that policymakers recognise and take it seriously for what it is.” Zoellick said that problems related to sovereign debts and uncompetitive economies in the 17-state eurozone had often been dealt with “a day late”, stoking investor concerns that governments and central banks were not getting on top of multiple crises or even approaching them in the right way. “That [worry] has accumulated and so we’re moving from drama to trauma for a lot of the eurozone countries,” he said. On the US, Zoellick said the fundamental strengths of the American economy were not the main concern, but “frankly that markets are used to the United States playing a key role in the economic system and leadership”. He said efforts to cutUS government spending had so far been focused on discretionary items rather than big-ticket welfare programmes such as social security. “Until they make an effort on those programmes, there is going to be continued scepticism about dealing with long-term spending,” he said. Zoellick added while market confidence had endured a torrid month, the real issue was whether this will spread to business and consumer confidence, something that was still unclear. “What is different from the world of the past is now emerging markets are sources of growth and opportunity. About half of global growth is represented by the developing world … so this is a very rapid change in a relatively short span of time in historical terms.” Zoellick spoke at the Asia Society in Sydney, Australia, on the eve of a summit between French president Nicolas Sarkozy and German chancellor Angela Merkel that will attempt to forge a co-ordinated path out of the eurozone crisis. Fears over sovereign debt burdens spread to France last week as destabilising rumours spread that the country might join the US in suffering the previously unthinkable punishment of losing its AAA rating, which threatens to raise the state’s borrowing costs. Chancellor George Osborne hinted that he shared Zoellick’s concerns when he admitted that closer fiscal union, perhaps driven by the issue of eurobonds underwritten by the 17 single currency members, might be the only solution to the crisis. Asked on BBC Radio4 if the only answer for the eurozone was some form of fiscal union, he said: “The short answer is yes.” World Bank Economics Global economy United States Europe Europe Dan Milmo guardian.co.uk
Continue reading …World Bank chief launches scathing critique of western economic leadership as US and Europe struggle to recover Global stock markets are entering a “new danger zone”, the head of the World Bank has warned in a scathing critique of economic leadership in the US and Europe. Robert Zoellick said the global economy was going through a multispeed recovery with western economies stuck in the slow lane following the downgrading of US government debt and the ongoing crisis in the eurozone. Investors have displayed increasingly erratic behaviour in recent weeks, with the FTSE 100 index in London rising and falling by 3% in successive days as financial professionals digested the prospect of another worldwide recession. “What’s happened in the past couple of weeks is there is a convergence of some events in Europe and the United States that has led many market participants to lose confidence in economic leadership of some of the key countries,” said Zoellick, whose institution invests in developing countries. Echoing the concerns of the Standard & Poor’s credit rating agency, which has stripped the US of its AAA credit rating due to fears of political paralysis in the world’s largest economy, the World Bank president indicated that American and European leaders were not acting quickly enough. He said: “I think those events combined with some of the other fragilities in the nature of recovery have pushed us into a new danger zone. I don’t say those words lightly … so that policymakers recognise and take it seriously for what it is.” Zoellick said that problems related to sovereign debts and uncompetitive economies in the 17-state eurozone had often been dealt with “a day late”, stoking investor concerns that governments and central banks were not getting on top of multiple crises or even approaching them in the right way. “That [worry] has accumulated and so we’re moving from drama to trauma for a lot of the eurozone countries,” he said. On the US, Zoellick said the fundamental strengths of the American economy were not the main concern, but “frankly that markets are used to the United States playing a key role in the economic system and leadership”. He said efforts to cutUS government spending had so far been focused on discretionary items rather than big-ticket welfare programmes such as social security. “Until they make an effort on those programmes, there is going to be continued scepticism about dealing with long-term spending,” he said. Zoellick added while market confidence had endured a torrid month, the real issue was whether this will spread to business and consumer confidence, something that was still unclear. “What is different from the world of the past is now emerging markets are sources of growth and opportunity. About half of global growth is represented by the developing world … so this is a very rapid change in a relatively short span of time in historical terms.” Zoellick spoke at the Asia Society in Sydney, Australia, on the eve of a summit between French president Nicolas Sarkozy and German chancellor Angela Merkel that will attempt to forge a co-ordinated path out of the eurozone crisis. Fears over sovereign debt burdens spread to France last week as destabilising rumours spread that the country might join the US in suffering the previously unthinkable punishment of losing its AAA rating, which threatens to raise the state’s borrowing costs. Chancellor George Osborne hinted that he shared Zoellick’s concerns when he admitted that closer fiscal union, perhaps driven by the issue of eurobonds underwritten by the 17 single currency members, might be the only solution to the crisis. Asked on BBC Radio4 if the only answer for the eurozone was some form of fiscal union, he said: “The short answer is yes.” World Bank Economics Global economy United States Europe Europe Dan Milmo guardian.co.uk
Continue reading …World Bank chief launches scathing critique of western economic leadership as US and Europe struggle to recover Global stock markets are entering a “new danger zone”, the head of the World Bank has warned in a scathing critique of economic leadership in the US and Europe. Robert Zoellick said the global economy was going through a multispeed recovery with western economies stuck in the slow lane following the downgrading of US government debt and the ongoing crisis in the eurozone. Investors have displayed increasingly erratic behaviour in recent weeks, with the FTSE 100 index in London rising and falling by 3% in successive days as financial professionals digested the prospect of another worldwide recession. “What’s happened in the past couple of weeks is there is a convergence of some events in Europe and the United States that has led many market participants to lose confidence in economic leadership of some of the key countries,” said Zoellick, whose institution invests in developing countries. Echoing the concerns of the Standard & Poor’s credit rating agency, which has stripped the US of its AAA credit rating due to fears of political paralysis in the world’s largest economy, the World Bank president indicated that American and European leaders were not acting quickly enough. He said: “I think those events combined with some of the other fragilities in the nature of recovery have pushed us into a new danger zone. I don’t say those words lightly … so that policymakers recognise and take it seriously for what it is.” Zoellick said that problems related to sovereign debts and uncompetitive economies in the 17-state eurozone had often been dealt with “a day late”, stoking investor concerns that governments and central banks were not getting on top of multiple crises or even approaching them in the right way. “That [worry] has accumulated and so we’re moving from drama to trauma for a lot of the eurozone countries,” he said. On the US, Zoellick said the fundamental strengths of the American economy were not the main concern, but “frankly that markets are used to the United States playing a key role in the economic system and leadership”. He said efforts to cutUS government spending had so far been focused on discretionary items rather than big-ticket welfare programmes such as social security. “Until they make an effort on those programmes, there is going to be continued scepticism about dealing with long-term spending,” he said. Zoellick added while market confidence had endured a torrid month, the real issue was whether this will spread to business and consumer confidence, something that was still unclear. “What is different from the world of the past is now emerging markets are sources of growth and opportunity. About half of global growth is represented by the developing world … so this is a very rapid change in a relatively short span of time in historical terms.” Zoellick spoke at the Asia Society in Sydney, Australia, on the eve of a summit between French president Nicolas Sarkozy and German chancellor Angela Merkel that will attempt to forge a co-ordinated path out of the eurozone crisis. Fears over sovereign debt burdens spread to France last week as destabilising rumours spread that the country might join the US in suffering the previously unthinkable punishment of losing its AAA rating, which threatens to raise the state’s borrowing costs. Chancellor George Osborne hinted that he shared Zoellick’s concerns when he admitted that closer fiscal union, perhaps driven by the issue of eurobonds underwritten by the 17 single currency members, might be the only solution to the crisis. Asked on BBC Radio4 if the only answer for the eurozone was some form of fiscal union, he said: “The short answer is yes.” World Bank Economics Global economy United States Europe Europe Dan Milmo guardian.co.uk
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