sexta-feira, 29 de novembro de 2013

Christopher Caldwell: The New World Pope shifts Church politics south

From the way Pope Francis discusses sex and money in his first major papal pronouncement, you can tell a lot about his plans for Catholicism. He wants Church leaders to scold people less for their sexual arrangements. He thinks capitalism in its present, lightly regulated state is a “new tyranny”.
The Pope’s apostolic exhortation, Evangelii Gaudium (“Joy of the Gospel”), was released this week. He calls it a set of guidelines for a “new phase of evangelisation”. The election in March of Francis, a charismatic priest serving the working class of Buenos Aires, was a milestone in this phase.
For all the Church’s recent difficulties, its leaders believe it has vast potential for growth. They are right. The consumerism and materialism of the past decades have wrought economic marvels, but they have left a spiritual void – what Francis calls “the desolation and anguish born of a complacent yet covetous heart”. And yet every time the Church clashes with hedonism, it loses. So, at one level, Francis is making his self-abnegating religion more marketable in this consumerist age. He has figured out that people would rather hear about the joys of salvation than the wages of sin. “An evangeliser,” he writes, “must never look like someone who has just come back from a funeral.”
This shift should not be mistaken for all-out modernisation. On fundamental questions – which include sex and money – the Pope is not revising the Church’s beliefs, although he may change dramatically its attitude towards power.
The cornerstone of the Pope’s thinking is that the Church is a community of sinners, subject to “self-absorption, complacency and selfishness, to say nothing of the concupiscence which preys upon us all”. Francis is harder on hypocrites within the church than without. His tone is occasionally bilious and angry. His fellow clergymen are pretentious. They write lousy homilies. They are cliquish and snobby, which leaves people feeling unwelcome. “The Eucharist,” he writes, “is not a prize for the perfect but a powerful medicine and nourishment for the weak.”
Those who follow the Catholic Church primarily to root against its sexual teachings will find little to please them in this document, which lays out a number of non-negotiable points. No women priests, no reconsideration of abortion and (by implication) no gay marriage. The Pope is not at odds with the way previous popes understood these things. He is just a bit more savvy about how, on television and online, “certain issues which are part of the Church’s moral teaching are taken out of the context which gives them their meaning”.
On economic matters, the Pope’s thinking is radical, albeit somewhat less radical than it looks. There are passages in Gaudium that sound like the manifesto of some mid-20th-century revolutionary front. (“Solidarity is a spontaneous reaction by those who recognise that the social function of property and the universal destination of goods are realities which come before private property.”) But the Gospels have always been an uneasy match with free markets. At heart, the Pope is urging believers to pay more attention to the poor. Nothing could be more mainstream than that. The poor, and Christians’ duty to them, are all over the Gospels. Latin American theology since the 1960s has stressed that theme tirelessly. “For the Church,” Francis writes, “the option for the poor is primarily a theological category rather than a cultural, sociological, political or philosophical one.”
These ideas will be harder for the Pope to apply in more prosperous parts of the world, where today there are, broadly speaking, two ways to help the poor. You can help them directly, by giving alms or tutoring or ladling soup. The help this affords is genuine, but it takes the heat off the wider system, centred in the west, which the Pope attacks as a tyranny. The other way to help is indirectly, through politics. In advanced European and North American democracies, however, “the poor” tend not to speak for themselves. They are represented by the more “compassionate” of parties of the relatively wealthy, whose “compassion” often consists of pillaging the other party’s voters to compensate their own. The poor wind up an afterthought.
In less-developed political societies, such as, historically, those of Latin America, it is easier to tell rich from poor. And a lot more politically charged, too. Either the first New World Pope understands European and North American politics less well than his predecessors or he has revealed a historic shift in the Church’s culture. The Vatican may still be in Rome, but the heart of the church is on other continents. After centuries of projecting its attentions outward, Catholic Europe now finds itself on the periphery. It is missionary territory.

Christopher Caldwell is a senior editor at The Weekly Standard

Fonte: FT

quinta-feira, 28 de novembro de 2013

Patrick Jenkins: Time to force banks to kick their easy money habit

The usually staid world of British banking has been titillated in recent days by revelations about the drug-taking of the Co-operative Bank’s former chairman, Paul Flowers. Crystal meth, it seems, was the reverend’s drug of choice. There are lessons for the co-operative movement to learn, mostly around governance. But there may be a more instructive parallel to draw with eurozone bank funding.
Any respectable drug-users’ dictionary will tell you that crystal meth delivers a long-lasting high with feelings of exhilaration and alertness, though often with secondary effects of agitation and confusion. These descriptions could equally apply to the after-effects of the more extreme market interventions of the European Central Bank. The time has come to get off the drugs.
It is two years since Mario Draghi launched his first big policy initiative as ECB president, with the longer-term refinancing operation gratefully taken up by about 1,000 banks across the eurozone. Many desperately needed the three-year money – scares about the stability of eurozone government finances, banks’ exposure to consequently riskier-looking government debt and the integrity of the euro project itself had scared off investors in droves.
The €1tn flood of cheap money extended under the scheme has served three vital purposes.
First, it ensured governments had ready buyers for the debt they needed to keep issuing. Even as banks have derisked since the crisis, cutting loans to companies and individuals, they have amplified their investment in sovereign bonds. Italian banks, the most enthusiastic sovereign bond investors, today hold more than 10 per cent of their total assets in government debt, up from 6 per cent a couple of years ago.
Second, the LTRO’s low interest rate, now just 0.25 per cent, inflated banks’ profit margins, allowing weaker institutions to build up capital reserves. That in turn has been key to boosting investor confidence in the robustness of the eurozone banking system.
Third, it levelled the playing field for banks across the region, albeit artificially. For the first time in an age Portuguese banks were borrowing money at the same price as their German counterparts.
Given the benefits, it has been unsurprisingly popular. Though more than a third of the money has been repaid early as banks have sought to prove their newfound strength, €630bn is outstanding and Mr Draghi has been lobbied to extend the programme when it expires in a year. Last month he suggested he might well heed the cry, saying the ECB was ready to renew the scheme “if needed”.
Doing so would be tantamount to forcing a recovering addict back on to class A drugs.
The truth is that the very existence of the LTRO is stopping the markets operating normally.
Securitisation, the practice of packaging multiple loans and reselling portions to investors, is a case in point. Despite seemingly rampant demand, particularly from US funds, the supply of new eurozone securitisations has been anaemic. Given the choice between funding lending through a market-rate securitisation or with super-cheap LTRO money, it is hardly surprising that few banks are choosing the former. According to the Association for Financial Markets in Europe, a trade body, new securitisation volumes are at 11-year lows. Interbank lending, which has traditionally greased the wheels of finance, has seized up for similar reasons.
Without the distortions that result from special schemes such as LTRO, many bankers reckon that nearly normal service would resume across funding markets. Already, just about any bank with a sustainable business model can issue debt in the bond markets at reasonable rates. It will still cost a southern eurozone bank more to fund itself than a northern eurozone one, but the differential is a fraction of what it was in 2011 at the height of the eurozone crisis.
By the time the LTRO is due to end – between November 2014 and January 2015 – investors should feel even more comfortable about European banks. The ECB’s forthcoming asset quality review and the follow-on stress test of banks’ balance sheets by regulators at the European Banking Authority are both due to be completed by October next year. And unless there are glitches, the transparency they provide should be heartening.
Whether the LTRO ends in a year, or is extended, withdrawal symptoms are inevitable, especially given the fundamental flaws in the make-up of the eurozone. Without further movement towards fiscal union, combined with pre-funded cross-border backstops for failing lenders and a credible system of “living wills” to help wind down those institutions in an orderly way, investors will continue to distinguish between the relative risk of Portuguese banks and German ones.
Given the political and economic sensitivities of all those issues, the ECB may need to come up with a gradual way to wean banks off the LTRO drug. A redesigned, far smaller scheme targeted at today’s emerging priority – the weak supply of credit to smaller businesses – could be the answer. Financiers and central bankers have apparently been discussing the idea in recent weeks, drawing on the lessons of the Bank of England’s Funding for Lending Scheme. To date, the FLS has hardly been a resounding success but there is emerging evidence of promise. The £17.6bn scheme helped to fuel positive lending overall in the second quarter of the year and that trend is expected to accelerate in the second half. It is not exactly clean living. But it feels like a healthier way of life for the eurozone’s banks.

Patrick Jenkins

Fonte: FT

quarta-feira, 27 de novembro de 2013

Politicians have learnt to lie in the language of scientists

The crusade against the unlovely language of government has had triumphs. Today, it would be a brave minister who implored stakeholders to mainstream a paradigm shift. “Going forward” has been rolled back and “fit for purpose” is anything but.
But there is a new linguistic menace. In this era of evidence-based policy, ministers have swapped the jargon of management for the argot of science. Owen Paterson, Britain’s environment secretary, rejected an attack on the government’s green credentials by 41 conservation groups as “unscientific”, “subjective” and put together by “active campaigning groups”. Here’s a thought: are political parties not the final word in active campaigning groups?
We had Esther McVey, a minister of state for employment, rubbishing a York university report suggesting a change to housing policy would save less money than the work and pensions department had predicted. The study, she insisted last month, was “flawed” because of the involvement of housing associations, which had an “agenda” in opposing the new diktat. How academics could possibly design a real-world study of tenant behaviour without the complicity of housing providers remained mysteriously unexplored.
Wherever science promises to elucidate, politicians are choosing to cower behind its terminology to obfuscate and retaliate. It is as if Malcolm Tucker, the foul-mouthed spin-doctor from BBC television series The Thick of It, is stalking the corridors of Whitehall hurling scientific journals at minions with barked orders to spew key phrases randomly at sticky moments. Don’t like the people having a go at you? Accuse them of being special interest groups harbouring an agenda. Rather not enact a public health policy? Exaggerate the uncertainty and call solemnly for more evidence.
That last tactic would surely be a Tucker favourite: sowing doubt gives ideological positions a veneer of scientific respectability. It is an effective way to shut down discussion, because the language of scientific evidence – error bars, confidence intervals, meta-analyses, methodologies – is outside the vernacular of most interviewers. When Britain’s government decided recently not to mandate plain packaging for cigarette packets, former health minister Anna Soubry said more evidence was needed to show it cut smoking. Scientists saw no such ambiguity in the 49 studies carried out so far, which point to plain packets having less consumer appeal. As Stirling university academics asked pointedly in the British Medical Journal: “How much evidence is enough?”
There is no such thing as a perfect body of evidence; it is the best available data that matter. Academics know precisely what it means for a study to be “flawed” – and it does not mean an analysis that you simply disagree with. They can handle “agendas” or conflicts of interest. If the government really believes that housing associations should not assist research into housing policy, then it should, for the sake of consistency, oppose National Health Service involvement in assessing the effects of health policy. We would then be in the peculiar position of having housing policy formulated without reference to tenants and healthcare policy without the input of patients.
Taken to extremes, pharmaceutical companies would never again be able to conduct a drug trial. While it is no hard task to discredit the drug companies – seek out Ben Goldacre’s Bad Pharma for a joyously rude precis – they do good science, too. Conflicts of interest do not automatically negate results: if a study is well designed, carefully described (so it can be replicated) and all conflicts of interest declared, the results can still stand.
Politicians who misappropriate the language of science to serve their own ends are bound to regret it. Without a true understanding of what evidence means and how it should be applied, the skies can quickly fill with the flapping sound of chickens coming home to roost. Or, in Mr Paterson’s case, badgers.
In the teeth of overwhelming opposition from scientists, the environment secretary ordered a badger cull to stop the spread of bovine tuberculosis. Shooting has not cut their numbers as hoped. Mr Paterson has since said the badgers “moved the goalposts” – a highly technical term for an own goal.

Anjana Ahuja was named best science commentator at the 2013 Comment Awards this weeks

Fonte: FT

terça-feira, 26 de novembro de 2013

Entrevista com a Anita Kon

Ótima entrevista com a minha colega da Católica de SP. Vale a leitura.

Valor: Os serviços hoje estariam puxando o crescimento das economias em todo o mundo, substituindo um papel que antes cabia à indústria? O mesmo ocorre no Brasil?

Anita Kon: O que estou escrevendo agora é que na atualidade os serviços puxam a economia. A ideia tradicional é que primeiro a indústria puxa a economia, e aí o emprego vai na onda da indústria. Mas com essa história de emprego criativo, com informática entrando em todas as áreas da economia, tem indústria que, se não fosse essa parte de serviços, ela não funcionaria. A minha ideia é que os serviços na atualidade puxam bastante a economia porque eles têm funções que fazem todos os setores funcionarem. Sem esses serviços, estes setores aliás nem funcionariam.

Valor: Nem todos os economistas concordam com isso...

Anita: É, alguns economistas acham que é a indústria que puxa o crescimento da economia. Isso vem mudando gradativamente e não é só no Brasil. Na década de 1990, quando a tecnologia nessas áreas de informática e comunicação começou a ficar mais avançada, o papel dos serviços veio aumentando nos países mais desenvolvidos, e depois isso se difundiu para os países menos desenvolvidos. Acho que, na atualidade, o papel de serviços ou se iguala ou é até mais importante que o da indústria. Há algumas indústrias em que a maior parte do emprego é serviços, e você não sabe o que é valor adicionado pela indústria ou pelo serviço que está dentro dele. Por exemplo, tem indústria de sapatos na qual o modelo, o corte e o tingimento são feitos com softwares automatizados. A pessoa que desenha o sapato está trabalhando em serviços. Depois, ela põe isso no computador e a máquina faz tudo que ela desenhou. Então, até que ponto o valor gerado na fábrica de sapatos é da indústria ou dos serviços?

Valor: Como é caracterizada uma economia que cresce principalmente baseada no emprego gerado pelo setor de serviços?

Anita: Tradicionalmente, em todos os países do mundo, não só no Brasil, os empregos nos serviços crescem mais rapidamente do que os da indústria, mas a questão é que tipo de serviços? E também entender que a indústria tem um limite. O setor de serviços aceita tudo, desde o pessoal qualificado até aquele que vende bala na esquina. Quando se fala que o emprego dos serviços é muito maior do que na indústria, em todas as economias desenvolvidas e menos desenvolvidas, isso é verdade. Ele puxa o emprego, mas de qual qualidade? O que tem por dentro disso? Entre 60% e 70% do emprego está em serviços no Brasil. Mas o que é formal é uma parte pequena, metade disso. Grande parte é de emprego informal. Então, só dizer que o emprego nos serviços é muito mais representativo do que na indústria não significa nada. Precisa ser analisada a qualidade desse emprego.

Valor: Há ainda muitas críticas justamente sobre a qualidade do emprego no setor de serviços, a alta informalidade...

Anita: É muito heterogêneo o setor de serviços. Há emprego de alta qualificação nesta parte de informática, em assessorias às empresas, em que às vezes a remuneração é maior do que na indústria. Tem autônomo que ganha muito mais neste tipo de serviço do que aquele que faz a mesma coisa dentro de uma indústria. Há pessoas que trabalhavam em indústrias, foram despedidas, e passaram a prestar serviços para a mesma indústria de forma informal. Algumas indústrias diminuem custos dessa forma. Mas também há os serviços de empregada doméstica que não é registrada em carteira, e pessoas que montam barraca para vender abacaxi na rua. Então, existem várias formas e qualidade de empregos dentro do setor de serviços. Você pode se virar para ganhar um dinheiro como informal nos serviços. Na indústria é mais difícil porque precisa de mais capital. Mas tem muita informalidade na indústria também porque pequenas empresas não querem se tornar formais por conta dos altos impostos. E, apesar de a informalidade estar reduzindo, ela vem diminuindo muito lentamente.

Valor: Na sua avaliação, então não é na indústria que está o emprego de maior qualidade?

Anita: Em termos de média [salarial], a indústria é melhor. Mas não se pode generalizar porque na média parece que serviços é uma coisa única e indústria é uma coisa única e não são. Dentro deles, há muita diversidade.
Valor: Há muitos pesquisadores que falam que o local de inovação principal de uma economia ainda é a indústria...

Anita: Não é verdade que a inovação na indústria é maior. Toda essa parte de serviços que ajudam outras empresas está sendo mais intensa em inovação do que a indústria. Na indústria, compramos tecnologia de fora, não temos um grande volume de pesquisas. Quando falam de inovação, as pessoas esquecem da inovação em serviços, isso não se estuda muito. E a inovação em serviços é intangível,você não a percebe.

Valor: Na a avaliação da Sra. acabou a preponderância da indústria como indutora da economia brasileira?

Anita: Não, eu não vou dizer que acabou, mas o setor de serviços está se equiparando à importância da indústria. As pessoas precisam da indústria manufatureira. Ela é importante. Mas, muitas vezes, certas indústrias só conseguem fazer isso a custos do uso de um software. Não é que a indústria perdeu sua qualidade de impulsionar a economia. Não é que são os serviços os grandes estimuladores, mas eles estão ganhando um espaço que antes era só da indústria e muitos analistas ainda não percebem isso.

Valor: O setor de serviços, na sua avaliação, é um tanto ignorado pelos pesquisadores porque são difíceis as bases estatísticas sobre isso?

Anita: No exterior, as estatísticas sobre serviços já estão bem desenvolvidas. No Brasil, existe muita dificuldade de conseguir bons dados sobre a área de serviços. Apenas há bem pouco tempo o IBGE vem desenvolvendo uma Pesquisa Anual de Serviços, mas ainda as informações não são tão amplas.

Valor: Essa mudança, com aumento da importância do setor de serviços, guarda muita relação com as alterações na forma de organização da grande empresa mundial?

Anita: Sim. A teoria evolucionária/neoschumpeteriana fala que a base da competição hoje em dia é a informação porque para competir melhor no mercado, para se desenvolver, a empresa tem que estar baseada na informação e em um gerenciamento inteligente e criativo. E isso tudo é serviços. Estamos num período diferente. Nos anos 1990, as empresas precisavam de muito capital fixo. Na atualidade, as grandes empresas estão dividindo suas atividades, estão se tornando menores fisicamente. Há determinados produtos que cada parte é feita num país diferente. Em termos de recursos investidos, as empresas continuam grandes, mas hoje se exige muito mais capital em áreas como Pesquisa & Desenvolvimento (P&D) [que é serviços] do que em instalação física.

Valor: E é possível inclusive o Brasil fazer exportação de serviços. Já somos grandes nisso?

Anita: Tem analista que fala que serviços é "non tradable". Mas isso não é verdade. Tem pessoas que ainda têm uma visão que se tinha nas décadas de 1970 e 1980. Mas estamos muito rapidamente em outra época. Há assessorias de construção civil, por exemplo, que são exportadas para países árabes, para Ásia e África. A parte de seguros também. Mas a participação do Brasil na exportação de serviços no mundo é muito pequena ainda. E tudo isso ajudaria o balanço de pagamentos, fomentaria a demanda interna, criaria empregos e elevaria a renda.

Valor: Quais os problemas que podem existir numa economia fortemente vinculada ao serviços?

Anita: Problema não tem. Existem algumas economias que são só de serviços. Alguns escritórios de desenvolvimento de software se estabeleceram em ilhas do Caribe que são baseadas só em serviços. As pessoas que estão lá têm alto nível e ganham bem porque desenvolvem um serviço de alta qualificação. A Espanha, por exemplo, tinha algum tempo atrás as maiores entradas de dólares em razão do turismo. Então, não tem um problema. Isso depende do tipo de serviços e do país. Um país muito grande como o Brasil ou os Estados Unidos precisam ter um parque industrial próprio, além dos serviços, porque não há divisas para importar toda manufatura que o mercado interno precisa. Nesta crise [a de 2008], a gente está importando muita coisa e isso tem reflexos sobre o déficit enorme da balança comercial.

Valor: Os industriais costumam argumentar que o setor industrial vive uma crise pela desindustrialização relativa...

Anita: Desindustrialização parece uma expressão pejorativa, negativa, parece que você está destruindo uma coisa. É negativo a indústria não se desenvolver na medida do necessário para produzir para a população e para exportar por causa desses efeitos sobre o balanço de pagamentos. Mas eu não vejo como uma quebra do parque industrial. O parque industrial do Brasil existe ainda, só que ele está marcando passo. Parece que desindustrialização é você acabar com a indústria. Muitas pessoas interpretam dessa forma.

Valor: Marcando passo, por quais razões? É um problema da macroeconomia: juros altos e real valorizado?

Anita: A indústria está em crise, uma crise de falta de infraestrutura. Não é a macroeconomia. O governo está trabalhando em cima de uma macro estável e está conseguindo. Sobem um pouco os juros e o câmbio, mas ela [a macro] está estabilizada. Onde pega é na infraestrutura porque para distribuir os produtos é preciso boas estradas, bons trens, rios navegáveis, e bons portos para exportar.
Valor: A perda de importância da indústria não tem relação com o câmbio necessariamente?

Anita: Se a gente tivesse competitividade, conseguisse chegar lá fora com um preço bom, não era o câmbio que iria atrapalhar. Ele tem um papel importante. Com ele mais favorável [desvalorizado], a indústria tem mais possibilidade de exportar. Não digo que não tem influência, mas não é o ponto essencial. No momento, o ponto essencial é aumentar a produtividade, poder concorrer lá fora em preço não só por causa do câmbio, mas pela qualidade do produto.

Valor: Alguns economistas falam que o setor de serviços não proporciona os efeitos multiplicadores que a indústria de transformação proporciona numa economia...

Anita: Ele [serviços] só tem efeitos multiplicadores. O que é transporte? Serviços. O que é comunicação? Serviços. O que é informática? Serviços. Olha o efeito multiplicador da renda de tudo isso.

Valor: Mas o predomínio no Brasil não é de um serviço de alta qualidade e nem de emprego de alta qualificação em serviços.

Anita: É verdade. Mas tem uma parte no Brasil de serviços qualificados. Falta uma mentalidade. Algumas indústrias ainda não perceberam a importância dos serviços para a concorrência. As pessoas têm que perceber que uma das saídas para nós é investimento em serviços e em inovação em serviços pelos seus efeitos multiplicadores. O pessoal só fala de investimento na indústria. Há muitos efeitos multiplicadores ao se investir em serviços de saúde e em educação, por exemplo.

Valor: Há economistas que acreditam que o país está em pleno emprego, em grande medida puxado pelos serviços. O que Sra. acha?

Anita: O IBGE calcula, na verdade, a taxa de desocupação. Emprego, pela Organização Internacional do Trabalho (OIT), possui aquele que trabalha com as regalias da carteira de trabalho. Isso é um emprego. E todo mundo um tempo atrás falava que o Brasil estava em pleno emprego. Coloquei a definição da OIT [em um artigo acadêmico] para mostrar o que é pleno emprego. Não estamos em pleno emprego porque isso não é só ocupar grande parte da população. Hoje, temos 90% da população ocupada (PEA). Mas pleno emprego é dar condições satisfatórias de remuneração, educação e saúde. Estamos em pleno emprego? Longe disso. O Dieese coloca os tais desalentados e então a taxa está em 10% e não em torno de 5% [como aponta a taxa de desocupação do IBGE]. Existe uma interpretação errada dos indicadores. O IBGE não está errado. O que está errado é a interpretação da pesquisa dele. O que a gente sabe é que o desemprego é muito maior do que isso [os 5%]. O Dieese calcula em 10%.

Valor: A Sra. acredita que deveria ser revista a forma de apuração dos institutos de pesquisa?

Anita: Não é isso. É como interpretam. Tanto Dieese quanto IBGE calculam essas taxas em algumas regiões metropolitanas. Toda a parte da zona rural - onde há mais emprego informal e salário mais baixo - não é calculada. Tem outra distorção aí, que é de uma amostra que é só das regiões metropolitanas. A análise que se faz é de que o Brasil é isso. Mas o Brasil não é isso. O Brasil tem uma série de diferenças. Não é porque estão mascarando. A pesquisa está ótima. A interpretação e a forma de colocar para o público pelo governo é assim porque tem outros interesses...

Valor: Em 2015, quem assumir a presidência da República deveria se preocupar com a situação da indústria no país?

Anita: Deveria, mas se vai conseguir eu não sei. Não é só a macroeconomia que vai resolver, mas uma política industrial efetiva, para resolver o campo micro. Mas na minha opinião o olhar não deve ser só para a indústria.

Valor: O governo desonerou nos últimos anos alguns setores industriais com esse olhar sobre a importância da indústria...

Anita: Mas não adianta fazer uma coisa para aumentar o consumo, se toda a infraestrutura não está preparada para atender esse aumento de consumo. O nosso povo tem um limite para consumir. Ele consome se endividando. Esses que compram liquidificador com IPI menor tem uma qualidade de vida melhor, mas se endividam muito e aumentam a inadimplência. Você tem que construir uma estabilidade nesta política, uma coisa sustentável. Na atualidade, estão só apagando o fogo.

Valor: A Sra. concorda com a avaliação de que para economia brasileira crescer mais precisa ter avanços da produtividade do capital e do trabalho?

Anita: A qualificação do trabalhador brasileiro é em média muito baixa em relação à população do país e em relação aos outros países. Para investir em modernização das empresas, trazer mais informática e comunicação, é preciso um pessoal que possa trabalhar com isso. Não é só importar uma máquina que aumenta a produtividade. Há algum tempo, importaram um aparelho de diagnóstico para um hospital e ele ficou mais de um ano parado porque não tinha alguém que soubesse operá-lo. Como é que a gente quer ir adiante desta forma?

Fonte: Valor

segunda-feira, 25 de novembro de 2013

Luiz Felipe Ponde: O crítico de bolso bacana

Excelente artigo do meu colega sobre os bacanas- personagem que habita os corredores das melhores instituições de ensino da pauliceia desvairada.Confesso que no passado distante era um "cidadão de jantares inteligentes", ainda que apenas por dever de oficio, já que era difícil aquentar a modestia dos bravos revolucionários e o famoso complexo de viralata.

Um dos traços essenciais de nossa psicologia é que queremos ser aceitos. Muitos filósofos, entre eles Adam Smith (1723-1790), diziam que nossa imaginação é constantemente presa à inquietação de como somos vistos pelos outros, fato este que é parte saudável da vida moral social, mas que também facilmente degenera numa angústia de dependência afetiva destruidora da autonomia.

Uma das formas mais seguras de se sentir aceito pelo grupo é desenvolver opiniões de rebanho. No fundo, temos horror a sermos recusados pelo bando, mas, hoje em dia, esse desejo de agradar é avassalador.

As redes sociais e sua mesmice brega, espaço de repetição do irrelevante, são prova de nossa condição de rebanho como pilar da (in)segurança psicológica.

As redes sociais criaram um novo perfil, o do crítico de bolso em versão pós-moderninha. O sonho dessa moçada, que se afoga na irrelevância e no desespero do anonimato cotidiano (que assola todos nós), é ter opiniões sobre as coisas, mas acaba mesmo falando da pizza que comeu ontem ou xingando os inimigos de plantão. O sonho de muitas dessas pessoas é frequentar jantares inteligentes nos quais gente bacana emite opiniões bacanas.

A forma mais fácil de frequentar jantares inteligentes é atacar a igreja, os EUA e a polícia. Mais sofisticado, mas que também garante acesso aos jantares inteligentes das zonas oeste e sul de São Paulo, é dizer que "o modelo social está ultrapassado". Esta frase leva algumas pessoas ao orgasmo (risadas?).

"O modelo social está ultrapassado" é a típica frase de quem quer se passar por crítico (mas, na realidade, é crítico de bolso), porque é a sociedade de mercado (ou como dizia Adam Smith, "commercial society"), a mesma que os comunistas chamam de "capitalismo", que nos retirou da miséria que é o estado natural da vida (e à qual voltamos rapidinho se o Brasil virar a Venezuela de Chávez e Maduro).

Toda riqueza que sustenta esse povo de jantares inteligentes, a começar pelo "bom vinho em conta", é fruto do mesmo modelo que consideram ultrapassado.

Aqui e ali, faça uma caricatura de quem você não consegue enfrentar porque lhe falta repertório conceitual. Diga que são racistas, "sequicistas" e homófobos. Conte, fingindo segredo, que seu filho é do círculo íntimo dos "maravilhosos" meninos do MPL e que sua filha é (incrível!!) black bloc, mas nunca bateu em ninguém.

Assim você chegará à sobremesa (leve, pois em jantares inteligentes ninguém quer engordar, porque sabe que os parceiros de jantares inteligentes são pessoas muito críticas) com segurança, sem dizer nada que ponha em risco sua cidadania de gente bacana.

Mas o que marca essa gente bacana é que na verdade nunca fala, nem tem contato real, com as pessoas fora das escolas de R$ 3.000 que paga para os seus filhos críticos desde os cinco anos de idade frequentarem, ou do seu círculo profissional chique e/ou da praia chique onde tem sua casa de praia típica de praias chiques.

O problema, quando você é um cidadão de jantares inteligentes, é que você acaba mesmo alienado e acreditando nas suas próprias críticas de bolso. Mas vamos ao que interessa. Vamos falar de um dos tópicos que autorizam você a se achar bacana e a frequentar jantares inteligentes: a polícia.

Outro dia, por acaso, conversei por cerca de três horas com um policial militar aposentado do Estado de São Paulo. Muito instrutivo, uma vez que sou egresso do mundo de gente bacana, que, portanto, nada sabe acerca do mundo real.

Ele definia sua classe como aquela que vive com a "mão no lixo" que essa gente bacana nunca vê de fato -a não ser quando resolve fazer ensaios fotográficos sobre "injustiça social". Reclama de como eles são invisíveis e de como a sociedade, na sua maioria, os considera parte do lixo. Um sofrimento profundo, devido a essa invisibilidade, marcava seu rosto de solitário. A polícia é um dos setores mais maltratados da sociedade, apesar de essencial.

Essa gente bacana sai correndo do jantar inteligente para o carro, com medo, sonhando com um baseado e uma bike em Amsterdã nas férias.

Luiz Felipe Ponde

Fonte: FSP

sexta-feira, 22 de novembro de 2013

Pedro Cavalcanti Ferreira e Renato Fragelli Cardoso: Os desenvolvimentistas no poder

Em nenhum momento do passado recente houve tanta unanimidade ideológica entre os formuladores da política econômica como no atual governo. A própria presidente, os ministros da Fazenda e do Desenvolvimento, o presidente do BNDES, o secretário do Tesouro, o ministro da Educação e seus principais assessores, são todos desenvolvimentistas assumidos, com passagem pelas principais escolas desta corrente. Somente no Banco Central se encontram economistas mais ortodoxos, mas estes têm tido pouca influência sobre o resto do governo.

Os desenvolvimentistas vêm diligentemente implantando as políticas econômicas que sua corrente sempre defendeu. Mas, para surpresa dos próprios desenvolvimentistas, embora não para economistas com outra formação, a experiência não deu certo. As políticas em vigor baseiam-se em quatro pilares. O primeiro é uma política cambial destinada a manter o câmbio desvalorizado, de forma a aumentar a competitividade das empresas nacionais, na esperança de que isso as estimule a adotar tecnologias de ponta. O segundo consiste numa política monetária que mantém os juros reais baixos de forma a estimular o investimento. O terceiro pilar é a atuação direta do governo via aumento dos gastos para estimular a demanda, ou indiretamente por meio das empresas estatais, ou ainda pela coordenação de investimentos privados por meio de bancos públicos. Finalmente, a política industrial trataria de estimular setores "estratégicos", incentivar a adoção de novas tecnologias e proteger da concorrência externa - talvez temporariamente - aquelas empresas e setores com potencial de crescimento.

Esses pilares dão continuidade às medidas adotadas (mais timidamente) durante os dois governos Lula. Desde a posse da atual presidente, a desvalorização nominal do câmbio foi de 40%, e a real de 20%. A taxa de juros Selic foi agressivamente reduzida, a partir de setembro de 2011, até atingir sua mínima histórica de 7,25%. Embora hoje esteja em patamar mais elevado, seu nível encontra-se bastante baixo em termos históricos.
Em relação à atuação do governo, não só os gastos públicos têm aumentado continuamente, como o ativismo e a maior intervenção na esfera produtiva tornaram-se marcos da atual administração. A despesa do governo federal aumentou R$ 79 bilhões - uma expansão de 13% - somente em 2013. O superávit primário deve cair à metade durante o atual governo, enquanto o déficit nominal atinge 3% do PIB. Os subsídios, benefícios financeiros e creditícios atingirão R$ 72 bilhões no ano, e o crédito dos bancos públicos, que se expandiu fortemente após a crise de 2008, continuará em patamar elevado. É verdade que os investimentos públicos estão estagnados, mas para quem até hoje considera que cavar e tapar buracos é uma eficiente política de demanda, isto não deveria ser um problema.

Finalmente, desde 2004, três ambiciosos programas de política industrial foram implantados: em 2004, a Política Industrial, Tecnológica e de Comércio Exterior; em 2008, o Programa de Desenvolvimento da Produção; e no atual governo, o Plano Brasil Maior. Esses programas buscavam, por meio de diferentes instrumentos, estimular a inovação, a modernização industrial, a inserção externa e exportações, bem como o aumento da taxa de investimento. Ainda no campo de políticas setoriais, acrescentem-se o progressivo fechamento da economia, as ambiciosas metas para componentes nacionais, bem como a agressiva atuação do BNDES no subsídio ao investimento e consolidação de grandes grupos nacionais.

Não faltou nada do receituário heterodoxo. O resultado, entretanto, mostrou-se um fiasco. O crescimento médio do PIB, ao longo dos quatro anos do atual governo, caminha para míseros 2% ao ano e a taxa de investimento permanece estagnada em 18,5% do PIB. Além de baixo, o pouco crescimento alcançado foi puxado pela agricultura e serviços, justamente os setores considerados menos nobres pelos desenvolvimentistas.

O desempenho não é melhor na área externa. Um dos objetivos das políticas industriais oficiais era a expansão das exportações, mas estas vêm caindo desde 2011, passando de US$ 256 bilhões para prováveis US$ 240 bilhões em 2013. E isto em um período de recorde de produção e exportação de commodities agrícolas. O déficit em conta corrente deve ficar em 3,6% do PIB, mais um recorde. Com a inflação dos preços livres acima de 7%, a inflação oficial só não superou o teto da meta devido ao controle dos preços administrados. Controle este que vem prejudicando fortemente a Petrobras, mais um contrassenso em um governo desenvolvimentista.

Finalmente, apesar das políticas industriais, das inúmeras medidas de micro gerenciamento, dos créditos subsidiados e da proteção comercial, o crescimento da indústria mostrou-se desapontador, assim como a inovação e adoção de novas tecnologias. Como bem registrou neste espaço há duas semanas David Kupfer, um insuspeito defensor de políticas setoriais, "há uma desagradável sensação de que o hiato da indústria brasileira frente à fronteira tecnológica internacional está novamente aumentando". A indústria não cresce e não inova.

Em suma, do ponto de vista dos seus próprios objetivos e metas, bem como de suas métricas de avaliação, o atual experimento desenvolvimentista se configura um retumbante fracasso: baixo crescimento, alta inflação, estagnação da indústria, atraso tecnológico e exportações em queda.

Pedro Cavalcanti Ferreira e Renato Fragelli Cardoso são professores da Escola de Pós-graduação em Economia (EPGE-FGV)

Fonte: Valor

quarta-feira, 20 de novembro de 2013

David Pilling: Keeping China moving will keep its leaders busy

It may be no exaggeration to say that Xi Jinping is now the world’s most powerful leader. To be fair, there’s not an awful lot of competition. Barack Obama, the US president, has been humbled abroad in Syria and weakened at home by the embarrassing failure of his healthcare plan. Perhaps prematurely, he is already being cast as a lame duck. Angela Merkel, the German chancellor, may not see out her third term as head of what, by Chinese standards, is a medium-sized national enterprise. Shinzo Abe, Japan’s prime minister, is in charge of the world’s most impressive printing press, though hardly its most robust economy. By default, that leaves Mr Xi, who has nine years left at the helm of an economy that could be the world’s biggest by the time he leaves office in 2020.
More, Mr Xi has wasted no time in shoring up his power base domestically. In just 12 months he has become arguably China’s strongest leader since Deng Xiaoping. Evidence of that came last Friday with the release of the unpromisingly titled, but potentially vastly significant, “Decision on Major Issues Concerning Comprehensively Deepening Reforms”. The document – already being referred to in English simply as “the Decision”, as if it had been handed down from on high – details what looks like the most ambitious reform push since Zhu Rongji, the former premier, oversaw a radical overhaul of the state sector more than 10 years ago. A blueprint for the next decade, the Decision shows that Mr Xi’s team has got to intellectual grips with the severe problems facing China’s lopsided, investment-heavy economy and, more to the point, is not afraid to do something about it.
Mr Xi’s consolidation of power has been swift. Unlike Hu Jintao, his wallflower predecessor, he immediately took on all three of the country’s top positions, becoming, in order of importance, general secretary of the Communist party, chairman of the military commission and, oh, president of China. He quickly launched an anti-corruption drive that sent a shiver of fear down the spines of party hacks. He has also cracked down on internet dissent and brought foreign policy more directly under his control, the latter reflected in the formation of a National Security Council.
Chris Buckley, writing in the New York Times, describes Mr Xi as an “imperial president” lauding it over his six colleagues on the politburo. Mr Buckley quotes Xiao Gongqin, a proponent of “neo authoritarianism”, who sees the new Chinese leader as a strongman capable of quelling political opposition in the interests of driving through necessary economic modernisation. Indeed, Mr Xi seems to be running the economic show too. Xinhua, the official news agency, in detailing how the Decision was formulated, refers only to Mr Xi by name, neglecting to mention Li Keqiang, who, as premier and a trained economist, was supposed to be in charge of economic policy. The breadth and ambition of reform outlined in the Decision, a 21,000-character document, has taken many by surprise. Credit Suisse says the package addresses 16 areas of reform with no fewer than 60 significant initiatives, fleshing out what the party has signalled will be a shift to a “decisive” role for the market.
The changes that caught the headlines include the virtual abandonment of the one-child policy, a long overdue relaxation that probably comes too late to head off an impending demographic crunch. The party will also abolish the notorious re-education through labour system. These are both welcome developments, particularly for those who want more children or who are currently breaking rocks in the interests of improving their mind. Yet the most far-reaching reforms are economic and financial.
The common theme is that, while the commanding heights of the economy will be left in state hands, much of the public sector will be subjected to greater market rigour. Thus, rather than being supplied with subsidised finance and subsidised inputs such as land and electricity, state-owned enterprises will increasingly be expected to pay the going rate. They will be squeezed harder by a state that needs to collect more funds to build a social safety net, itself an essential component in the so-far failed endeavour to wean the economy off investment and on to consumer demand. Local governments will be able to levy a property tax. Conversely, their ability to raise funds by expropriating land will be curtailed as landowners’ property rights are strengthened. That ought to make it easier for farmers to move to the cities, a potentially important driver of growth-sustaining urbanisation that will be helped by relaxation of the hukou registry system.
Of course, this is the theory. It is much easier to write all of this stuff down than to implement it. Yet if even a fraction of the Decision is put into practice, China’s economic model will change significantly. That should bring benefits in terms of economic rationality, though it will also cause pain by squeezing out inefficiency and overcapacity.
China’s economy is running out of juice, requiring ever-greater inputs for ever-diminishing returns. The Decision is an attempt to put it on a new track. It is a mammoth task. Mr Xi will not only have to keep the economic juggernaut on the road. He will also have to give it the equivalent of an oil change and a tyre change even as it lurches forward. In that sense, he may not be the most powerful leader in the world after all. He will be far too busy with affairs at home to worry too much about making his presence felt abroad.

David Pilling


terça-feira, 19 de novembro de 2013

Mohamed El-Erian: Yellen shows Fed will remain markets’ best friend

Janet Yellen’s confirmation hearing last week reaffirmed that the Federal Reserve remains risk markets’ best friend – and not by choice but by necessity.
This is music to the ears of investors conditioned to position their portfolios to gain from steadfast central bank liquidity support, especially in the US. But with Wall Street having already reflected this in asset prices, and with the benefits for Main Street continuing to disappoint, investors may well need an increasingly differentiated approach if they are to continue to benefit from the “central bank put”.
Ms Yellen’s key views may be summed up in five points:
• Concern at the human toll of continued sluggish economic growth and persistently high unemployment.
• Faith in the ability of unconventional Fed tools to materially improve the outlook, and to do so without triggering inflation.
• Willingness to underwrite the potential “costs and risks” of relying on this untested policy approach, be they domestic or cross-border.
• Belief that sufficient economic growth will be forthcoming to allow for the eventual orderly normalisation of monetary policy.
• To the extent a policy mistake is forced on the Fed, and every effort will be made to minimise this risk, it is better if it were one of excessive accommodation rather than premature tightening.
Asset markets still key
Based on these five points, Ms Yellen left no doubt that she is committed to maintaining the Fed’s current approach – one that places asset markets front and centre in the transmission mechanism linking Fed actions to policy objectives.
Positioning for the impact of Fed policy rather than fundamentals has been a winning strategy for investors – not only in the immediate aftermath of the 2008 global financial crisis, but also in the past three years during which the Fed has pivoted from normalising markets to pursuing much more ambitious macroeconomic objectives. But they now need to be increasingly mindful of the level of prices and the associated (and growing) number of disconnects that the Fed is underwriting.
This year’s impressive performance of risk assets (including the 21 per cent year-to-date increase in the MSCI world equity index as of Friday, powered in particular by US stocks) contrasts with a global economy still stuck in third gear.
It has materialised in a non-linear fashion, including a particularly rough patch in May-June when questions surfaced about the willingness of the Fed to continue its exceptional support for markets and the economy. It has involved a notable deviation in performance between advanced and emerging markets. And investors have repeatedly “looked through” harmful US political polarisation and Congressional dysfunction.
In reconciling all this, it would be foolish to ignore the role of the Fed in asset price determination – a role that has been direct, large and persistent; and one that has influenced both investor behaviour and companies’ capital structure operations.
Clear message
Looking forward, investors would be well advised to remember Ms Yellen’s correct observation that robust growth is the best way to allow for the orderly normalisation of monetary policy. Indeed, it is probably the only way. And, for investors, durably higher growth is what validates the current prices of most risk assets.
Unfortunately, apart from the Fed, it is hard to point to policy making institutions that are seriously engaged on pro-growth initiatives. Instead, most are sidelined by continued Congressional dysfunction.
In such a world, differentiation within and across asset classes becomes much more important: be it emphasising the front end of the government bond yield curve, seeking solid balance sheet companies with real profit prospects, or positioning for the forthcoming disposal of assets by deleveraging European banks.
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Greater analysis should also be devoted to the extent to which US equities can continue to outperform so sizably the rest of the world. Yes, Fed policy encourages companies to raise debt and give more cash to equity holders via dividends and share buybacks. But there is a limit to relative valuation deviations in today’s globalised world economy.
Ms Yellen’s message is clear: the forthcoming change at the helm of the Fed signals policy continuity. Yet in positioning for sustained Fed support, investors need to remember that Wall Street cannot – indeed, should not – deviate so much from Main Street.
So, pending stronger evidence that higher global growth will indeed materialise, many investors would be well advised to opt for great portfolio differentiation.

Mohamed El-Erian is chief executive and co-chief investment officer of Pimco

Fonte: fT

segunda-feira, 18 de novembro de 2013

Wolfgang Münchau: Why Europe needs to try unconventional policy

Last week’s dreadful data for the eurozone tell us that a long period of low economic growth and excessively low inflation lies ahead. France is falling back into recession; the signs of recovery in Italy have disappeared – again; even Germany has lost momentum.
What should the European Central Bank do now? It could, and probably should, cut interest rates again. The eurozone needs all the help it can get, but an additional cut will probably not be sufficient. We are in a situation of diminishing marginal returns. The main significance of rate cuts these days are their impact on forward rates – money market rates ranging from a duration of one week to one year. A cut in the main interest rate, together with policies to supply unlimited liquidity at those rates, would probably nudge forward rates down further. But if Mario Draghi, the ECB president, wants to make a real difference, he should contemplate quantitative easing.
There are three reasons why he should now look beyond the conventional. The first is, of course, the economic outlook, and the associated downside risk on inflation. When German commentators such as Hans-Werner Sinn criticise the ECB’s decision to cut rates they never discuss the decision in connection with the inflation target – which should be the primary benchmark. The current inflation rate of 0.7 per cent is below target, and forecasts tell us that it will remain so for at least two years.
The second reason is a lack of further policy tools after the next rate cut. The main ECB interest rate is now 0.25 per cent. The deposit rate – the one levied on commercial bank deposits at the ECB – is zero. The central bank could cut its main rate one more time and impose a small negative deposit rate. At that point, the ECB will have run out of policies. That would be an uncomfortable position.
The third set of reasons relates to Mr Draghi’s lender-of-last-resort promise – the outright monetary transactions he launched last year. The OMT has no doubt calmed down markets over the past year, but it is not a monetary policy instrument. It is an insurance policy. Its purpose is to reassure investors by reducing the likelihood of a country’s being forced from the eurozone. But it is still only a backstop. Quantitative easing, by contrast, is a monetary policy instrument. Its purpose would not be to bail out countries but to reduce medium to long-term interest rates in specific sectors of the economy.
Even though QE and OMT differ, they are both asset-purchase programmes in the end. If the OMT lost credibility you would need another asset purchase programme to take its place. That could happen if, for example, the German constitutional court were to rule against the OMT in one of its forthcoming judgments. The court is currently considering whether the OMT violates the German constitution. In a hearing in June, the chief justice left no doubt that he has fundamental problems with the programme. Even if the verdict is nuanced – as verdicts by this court usually are – any doubts about the OMT’s legality or practicality might upset investors. At that point, the ECB would be well advised to have a plan B in place. QE could meet that requirement.
Indeed, QE has the advantage that it is legally beyond reproach. With a programme of QE, the central bank would target specific types of securities without prejudice to their national origin. It is a pure monetary policy operation. Unlike the OMT, it cannot be mistaken for an illegal monetisation of sovereign debt – the use of the central bank’s balance sheet to reduce a state’s debt in real terms.
Would such a programme be feasible? QE is certainly more difficult in a monetary union with fragmented financial markets than in the US or the UK, where the central banks have used QE in part to help the housing market and the corporate sector. In the eurozone, the ECB would buy sovereign and corporate bonds – and perhaps some bonds that back loans to the property sector. Since small and medium-sized companies in the eurozone are heavily reliant on bank finance, they are beyond the direct reach of such a programme. For them, the impact on QE would be indirect. The ECB could, for example, speed up work it is already undertaking on securitised finance for small company loans, where it could become a central market maker. Or it could set up a scheme, similar to the Bank of England’s Funding for Lending programme, to assist bank lending.
Would QE work? Once you hit the zero limit on interest rates, QE is the most effective policy instrument. It is not a cure-all – we know from the US how hard it is to curtail. But the alternative is worse. Without QE, the eurozone economy threatens to get stuck in an equilibrium of low growth and ultra-low inflation, or even outright deflation. And if you are worried about the impact of QE on financial stability, you might want to consider the impact of a long depression.
The case for quantitative easing is overwhelming.

Wolfgang Münchau

Fonte: FT

sexta-feira, 15 de novembro de 2013

Scholars’ rude awakenings

It seems to me”, says Clive Bloom, emeritus professor of English and American studies at Middlesex University, “that academics are the rudest people on earth.”

Bloom’s first book, The Occult Experience and the New Criticism (1986), was greeted with a review claiming that it “mentions every orifice except the arsehole from whence [it] emerged”. Such “bitchiness”, he believes, comes from many reviewers thinking to themselves: “I wanted to write the book I’m reviewing” or “I’m the expert (but no one has noticed).”

And this, in Bloom’s cheerfully jaundiced view, is part of a wider sense of “resentment and defensiveness” resulting from the fact that most academics “don’t really produce anything that people want”. In extreme cases, this can lead to “hatred of the public and the world generally”. On one occasion, he recalls, his place of employment, at that time Middlesex Polytechnic, was visited by the mayor and mayoress of Haringey, “a small, olive-skinned Greek Cypriot couple, both in their chains of office. We gathered to meet them in the common room. As we stood in line with drinks and nibbles, one colleague turned to me and exclaimed rather too loudly: ‘Oh my God, they’ve invited the cast of EastEnders!’”

It is not difficult to turn up examples of academics being deliberately rude to each other, whether in print or in person, openly or anonymously. Another striking instance is recalled by Deborah Cameron, professor of language and communication at the University of Oxford. Many years ago she was invited by a similarly young and junior feminist academic to give a lecture on a feminist topic at a university in what was then West Berlin.

“I was surprised but initially gratified when the senior members of the department – elderly male professors – turned up,” she recalls. “But after the introduction, when I rose to speak, they all simultaneously opened their newspapers and ostentatiously read them throughout the proceedings.

“I don’t know if this piece of rudeness was directed more towards my German colleague (for having the temerity to invite a guest speaker rather than leaving such things to them), towards me or towards the very idea of feminist scholarship. Probably all of the above. Whatever it was, they wasted over an hour of their own time on the gesture, and, in the process, probably gave the students the impression that I was more important and more radical than anyone had previously supposed.”

The moral of the story, in Cameron’s view, is that “rudeness in the academy backfires more often than not. The most effective put-downs are the courteous, mild-mannered ones.”

Can the same be said about really vicious reviews? A celebrated example is the attempted demolition of On Consciousness, a book by Ted Honderich, Grote professor emeritus of the philosophy of mind and logic at University College London. The review by Colin McGinn, who recently resigned from a professorship at the University of Miami, was published in The Philosophical Review in 2007 and begins: “This book runs the full gamut from the mediocre to the ludicrous to the merely bad. It is painful to read, poorly thought out, and uninformed. It is also radically inconsistent…Honderich’s understanding of positions he criticises is often weak to nonexistent, though not lacking in chutzpah.”

The review is accompanied by a startling footnote that reads: “The review that appears here is not as I originally wrote it. The editors asked me to ‘soften the tone’ of the original; I have done so, though against my better judgment.”

Unsurprisingly perhaps, the review has generated a good deal of commentary. Yet far from just taking McGinn’s word for it that Honderich’s work is “shoddy, inept, and disastrous”, many have looked at their earlier printed remarks about each other to speculate about whether an “agenda” or past grievances lie behind the review. “Scores of philosophers have emailed me about it saying that [the review] was so extraordinary and self-destructive that I should not have replied,” Honderich told the press in 2007. “That I should have been Olympian and superior about it.”

Bloom found his savage review “so horrible that it was actually funny” and, instead of being downhearted, it left him determined to fight back: “I still use the wording to tell people never to give up and never let the bastards grind you down.”

Para ler o resto clique

quinta-feira, 14 de novembro de 2013

Hans-Werner Sinn: Why Draghi was wrong to cut interest rates

Europe fears the Japanese disease. In Japan, the gross domestic product deflator – a broad measure of the price level – fell by about 1.2 per cent a year from 1999 to 2013. Today it is as low as it was in 1980. This was a catastrophe, which Japan may only now be overcoming with its Abenomics aimed at a devaluation of the yen.
The eurozone GDP deflator was only 1.6 per cent higher in the second quarter of 2013 than a year before. The consumer price index by October had increased by merely 0.7 per cent. These are low figures indeed. Seen this way, the European Central Bank’s fear of deflation – and last week’s interest rate cut – is understandable.
However, deflation in parts of a currency union is not the same as deflation of a union as a whole, because its internal effects on competitiveness cannot be compensated for by exchange rate adjustments. In fact, Greece, Spain and Portugal need to devalue in real terms by about 30 per cent relative to the eurozone average in order to correct the distortions that were brought about before the crisis by the inflationary credit bubble created by the single currency and thus restore their competitiveness. The ECB should not act against moderate deflation in these countries, but rather aim to offset such deflation by inflating the northern eurozone – Germany, in particular. For this, restraint – not activism – is needed.
The market has been preparing for such a realignment of relative prices. German savers and institutions have turned towards their domestic property market, causing a construction boom that has made labour scarce, increased wages and could ultimately result in general pay and price inflation. The new boom has the potential to reduce Germany’s much-criticised current account surplus.
Paradoxically, the ECB is actively operating against such a self-correction. With its Outright Monetary Transactions programme, through which its offers to purchase government bonds of troubled countries at the taxpayers’ risk, the bank is escorting private German savings again to southern Europe, where they are reluctant to go voluntarily. The ECB has also been relocating its (electronic) printing presses from the northern to the southern central banks through its policy of allowing junk assets to be used as collateral for its lending to needy commercial banks. These schemes have exported more public capital from north to south than the official rescues.
Four-fifths of the eurozone’s monetary base has been created through open-market and refinancing operations by the central banks of the six official crisis countries. None of the base has been created through such operations by the Bundesbank and practically none by the Bank of Finland. All central bank money issued in Germany effectively comes from abroad.
The money available at low interest from southern printing presses has calmed the capital markets. But this has come at the price of slowing the realignment of the relative prices of goods needed for improving competitiveness. As the International Monetary Fund notes, hardly any of the recent trade improvements in the south have come from increased competitiveness. Industrial production in Italy, Spain and Greece has fallen dramatically.
The ECB’s policy may even be responsible for part of Germany’s current account surplus. Money from the southern printing presses was used not only to buy goods and assets inside the eurozone and to redeem eurozone debt. It also flowed to the international currency markets to buy assets and redeem non-eurozone debt. This depressed the euro exchange rate enough to allow Germany to run its disturbingly large surplus despite the deficits of southern Europe and Ireland disappearing. After criss-crossing the world, money from southern printing presses bought German goods.
Germany’s current account surplus in the five crisis years from 2008 to 2012 was €798bn. Usually, such a surplus would lead to the accumulation of marketable foreign assets by the private sector. Not this time. Three-quarters of Germany’s surplus, €585bn, was paid for with money created by the central banks of other eurozone countries. The Bundesbank acquired claims on other eurozone central banks in exchange, which now carry a mere 0.25 per cent interest rate.
This all calls to mind a doctor who does not understand the disease he wants to cure being surprised by grave, unanticipated side effects. The Maastricht treaty did not give the ECB a mandate similar to the US Federal Reserve’s for a reason. Even the Fed never carried out the regional fiscal policy that the ECB governing council, with its semantic skills, has conducted in the name of monetary policy. If the ECB stuck to a more conventional definition of monetary policy it would give markets a better chance of correcting Europe’s imbalances. The resulting German inflation, matched by a moderate southern European deflation, would do wonders to help avoid the Japanese disease.

Hans-Werner Sinn is president of the Ifo Institute for Economic Research

Fonte: FT

quarta-feira, 13 de novembro de 2013

Yukon Huang: How to make “comprehensively, deepening reform” in China

Was the outcome of the Third Plenum “unprecedented”, as one member of the standing committee expressed beforehand? Or at least “comprehensively deepening reforms”, as characterised officially? After four days of silence when the only indication that something important was happening was the increased security, the final communique offers both encouragement and uncertainty.
The communique was comprehensive in the tradition of previous statements. Present were both the obligatory homage to the past leadership is there (“the magnificent banner of Socialism with Chinese characteristics”, “Deng Xiaoping Theory”, “the important Three Represents thought”) and the affirmation of the dominant role of the Party. It also managed to mention all the issues without offending any constituency: “establishment of an innovative economy, governing the country according to the law and accelerate the perfection of cultural management.”
This was to be expected. The uncertainties revolved around two issues: how the plenum would deal with the role of the state and how the leadership would demonstrate its intentions to act.
On the first, the communique managed to tread a fine line. It clearly stated that the market would play a decisive role (in contrast to a “basic” role) in allocating resources, and the government would play a better role. Implicit here is that the government will move to eliminate major price distortions and curb the government’s interventions in the allocation of resources which are seen as having exacerbated inefficiencies. But the statement also reaffirms that “public ownership” is at the “core” of the economic system, signaling limits to the private sector’s role.
On the second, the decision to establish a central leading group to drive the reform agenda recognises that the reforms are now more complicated than before, embracing multiple sectors. The current compartmentalisation of responsibilities among the members of the Standing Committee and State Council has made it nearly impossible to address reforms involving multiple interests. The proposed committee could break this log-jam.
The Third Plenum did provide a “comprehensive framework for deepening reforms” but as expected no detailed action plan. The “what” was never that important since there is little disagreement on the menu of needed reforms. The continuing debate will be about how to do it, when to do it and by how much.
The few specifics are in areas where there are agencies with the orientation and capacity to carry out reforms at the national level, as in the financial and fiscal systems. For most issues, however, where more tailored approaches are warranted given the diversity of the regions, reforms will be driven locally with less predictable outcomes.
Years from now, this Plenum might be judged as “unprecedented” if it turns out that the state really does allow the market to play a more decisive role and the new team really is able reform, fundamentally, the major economic institutions.
But for markets, there are more immediate concerns about whether the leadership has a strategy for reversing the rapid debt build-up and developing a more sustainable basis for growth. They will want to see more concrete actions to break the unhealthy links between local authorities and the banks that they effectively control. With the state playing both the lender and creditor, this relationship has been a recipe for the excesses exemplified by the the surplus capacity of China’s so-called “ghost towns”.
Markets also want to see the private sector playing a bigger role in developing higher-value services: financial, media, telecommunications, education and health. The leadership is likely to shake up the protected positions of the state enterprises and allow private interests to take up an increasing share, but full privatisation remains an unlikely option.
For the average person concerned about growing inequities, corruption and pollution, there is support for the rule of law and at least one tangible action in the establishment of a restructured state security system. This could offer a more holistic and sensitive approach to addressing social tensions than in the past but it could also turn out to be a means for more heavy-handed treatment.
Although the link is not often recognised, a better-managed urbanisation process can address both social concerns and support growth. Urbanisation is not just about allowing more people to move into the cities. It is also about unifying and reforming rural and urban land markets, as noted in the communique, so that farmers can sell their use-rights to collectively owned plots at a fair price. Urbanisation is also about granting migrant workers full access to social services, which promotes equality and also stimulates consumption.
China’s future lies as much in maintaining political stability as in sustaining rapid growth. Many of the actions cited in the communique could feed into the wider changes needed to curb corruption and promote the sense of a more just society. Fiscal reforms and reduced dependence on banks will improve transparency and promote accountability. Rolling back the power of the state enterprises and streamlining government procedures will restrain opportunities for rent seeking. Promotion of a services-oriented economy will reduce dependence on energy-intensive industries and help mitigate environmental degradation. Urbanisation will strengthen the voice of the middle class and put pressure on liberalising the flow of information, as well as promote a more independent jury. In sum, this will all give substance to what President Xi has implied in his as yet undefined “China Dream”, to which he gave such prominence in this Plenum.

Yukon Huang is a Senior Associate at the Carnegie Endowment and a former World Bank Country Director for China.

Fonte: FT

terça-feira, 12 de novembro de 2013

Martin Wolf: Why Draghi was right to cut rates

The monetary policy of the European Central Bank has been too tight. This is shown in the fall of core annual inflation to just 0.8 per cent in the year to October 2013. The case for the monetary easing undertaken last week was overwhelming. Indeed, it was long overdue.
Yet, it has been leaked, the decision to cut the refinancing rate from ½ per cent to ¼ per cent split the council. Both German representatives – Jörg Asmussen, a member of the ECB’s board, and Jens Weidmann, head of the Bundesbank – as well as the heads of the central banks of the Netherlands and Austria voted against this move.
Open splits on national lines have emerged previously, but only over controversial programmes such as the Securities Markets Programme, launched under Jean-Claude Trichet, Mario Draghi’s predecessor as president of the ECB, and the Outright Monetary Transactions programme, launched by Mr Draghi in the summer of 2012. Both of these initiatives were intended to relieve market pressure on sovereign bonds. That was bound to be controversial, given German hostility to monetary financing of governments. But such splits over standard monetary policy decisions are new. This matters: they endanger the legitimacy of the ECB – and so of the monetary union.
Some have accused Mr Draghi of acting in the interests of Italy – and the objections of German representatives to the easing are bound to stimulate such suspicions. Yet the case for a cut in the ECB’s standard policy rate is, in truth, overwhelming: core inflation is now less than half the ECB’s target of “below, but close to, 2 per cent”.
As Mr Draghi argued, there are compelling reasons for not putting up with inflation below that level. First, an inflation rate recorded at 2 per cent might, in truth, be close to zero: inflation is almost certainly exaggerated at the moment in conventional measurements.
Second, needed changes in competitiveness inside the eurozone would be difficult even if average inflation were 2 per cent. They would be far harder at close to zero, given the resistance of workers to nominal wage cuts.
Third, monetary policy tends to be more ineffective the closer inflation comes to zero, partly because depressed economies may well need negative real interest rates – which are much easier to implement when inflation rates are positive.
To these I would add a fourth: the eurozone risks falling into deflation, given excess capacity and high unemployment. The ECB says that inflation expectations are anchored. That might be overconfident.
It is easy to identify other reasons why policy has been too tight. Between the first quarter of 2008 and the second quarter of 2013, nominal eurozone demand expanded by just 1 per cent. Nominal gross domestic product grew by a mere 3.4 per cent. Moreover, so-called M3 money – a measure of the “broad” money supply – has been virtually stagnant since late 2008. (See charts.)
What, then, are the arguments against the last Thursday’s decision? One was that the decision could well be postponed. But it has already been postponed too long: the longer the delay, the greater the danger. A second concern is that this move brings unconventional measures even closer. But the less promptly the ECB uses conventional measures, the greater the likelihood that extreme ones will be needed. If the ECB had moved rates decisively towards zero in 2010, it might have avoided at least some of today’s difficulties.
Another complaint is that interest rates on German savings are too low. As Benoît Cœuré, a member of the ECB Board, has argued, this is just wrong. First, savings have little value during a deep slump, such as that in the eurozone. Second, the principal determinant of the return on German savings is the long-term yield on German Bunds, which is now 1.8 per cent on 10-year debt. But it is the slump, plus Germany’s role as a safe haven, that creates such low rates. The less effective is the support provided to the eurozone economy, the more Bunds will stay a safe haven and the lower the return on German savings.
A final concern is that the monetary policy of the ECB is unsuitable for Germany and might even cause asset price bubbles. This is surely true, just as the monetary policy pursued before 2007 was unsuitable for Ireland and Spain and did indeed drive asset price bubbles. A central bank called upon to deliver a target rate of inflation in a union of diverse economies will destabilise nearly all the members at some time. But that is what joining a currency union entails for all members, including even the largest.
Between 2001 and 2007, the average core inflation rate of the eurozone was 1.8 per cent, with Germany on 1.1 per cent and Ireland, Greece, Portugal and Spain close to 3 per cent. If the overall inflation rate is to remain close to 2 per cent, while the inflation rates of the latter four countries, plus Italy, are to be well below this average, that of Germany and other surplus countries needs to be well above 2 per cent. Otherwise, overall inflation will be far too low. Moreover, real short-term interest rates are likely to be negative in these higher-inflation countries, just as they were for those now in difficulty, before 2008. Efforts to resist such adjustments guarantee a persistent crisis and so the low interest rates the critics detest.
Many in Germany might conclude that they would be better off outside the eurozone. I sympathise, But they should be careful what they wish for. In the absence of a currency union, a putative D-Mark would soar. The impact of a large real appreciation of the new currency would be similar to what has befallen Japan: large parts of German manufacturing output would shift into neighbouring countries; the economy would surely be pushed into a recession; and domestic prices would probably fall.
Without heroic unconventional measures, to which the Bundesbank is fiercely opposed, the deflationary spiral might be steep. Some Germans would benefit. But the dislocations could be huge. Compared to that, the costs associated with a successful eurozone adjustment, including a period of, say, 3 per cent inflation in Germany, would hardly be excessive.
Yes, the ECB cannot deliver optimal monetary policy for Germany: it is not supposed to do so. But it might still be far better than alternatives.

Martin Wolf

Fonte: FT

segunda-feira, 11 de novembro de 2013

"A Unicamp e o marketing da resistência (Luís Nassif, FSP, 06.09.1993)

Texto antigo que público, por considera-lo um serviço de utilidade pública.

"As denúncias formuladas pelo Professor Mario Possas contra o Departamento de Economia da Unicamp constituem-se, de longe, no mais completo retrato de um estilo acadêmico responsável pela mediocrização que tomou conta de parte da Universidade brasileira.

Possas é insuspeito – foi diretor do Instituto –, e a entrevista foi concedida ao Jornaleco, orgão dos estudantes de economia da Unicamp.

Nela, Possas comunica seu afastamento do departamento, e denuncia um processo que, no fundo, foi a pior herança legada pela repressão política.

Sabe-se de jornalistas que perderam o emprego, políticos que foram cassados, funcionários públicos que foram demitidos, professores universitários que foram proibidos de lecionar nos primeiros anos do regime militar.

Mas, o marketing da resistência política acabou exercitado pelos que ficaram em universidades e fundações públicas, com emprego e salário garantidos, como instrumento de reserva de mercado acadêmico.

Raio impiedoso

Sem risco pessoal ou profissional, esses grupos acabaram trazendo para a academia – que deveria ser o local por excelência da livre discussão de idéias –
o espírito militar stalinista que pontificaca nos grupos de esquerda (e direita) pré e pós 1964, a divisão do mundo entre brancos e pretos, a xenofobia primária, a utilização abusiva de rótulos, onde se conferia um tratamento moral, um patrulhamento grosseiro à divergência de idéias, apenas para garantir o sagrado direito de não prestar contas de seus atos aos contribuintes.

A entrevista de Possas traça um raio-x impiedoso desse estilo. “Uma coisa é voce ter uma certa tendência a ser gueto, quando se é perseguido pela ditadura”, diz ele na entrevista. “Outra coisa é, vinte anos depois, continuar como se o país não tivesse mudado”.

Medo da avaliação

Recentemente, denuncia ele, o professor Pedro Valls – que ele reputa o maior econometrista do país – foi preterido num concurso por um candidato sem nenhuma expressão acadêmica, mas ligado à patota.

Outro professor foi rejeitado por ter formação neoclássica. A matemática foi praticamente abolida dos cursos por preconceito ideológico.

A consequência foi a mediocrização geral, com dois resultados claros. O Instituto passou a fugir das reuniões anuais da Anpec( que reune cursos de pós-graduação de todo país), sob a alegação de que lá “so tem economista conservador”. No fundo, era o medo de muitos de submeter “suas abobrinhas” a avaliações externas.


As tentativas de estabelecer avaliações internas também esbarraram em uma oposição esmagadora do corpo docente, que tentou levantar ressalvas ideológicas. Mas “era basicamente para evitar que esta pressão resultasse em obrigação de terem desempenho”, diz Possas.

Noutra ponta, recorreu-se a um patrulhamento pesado contra quem pensasse diferentemente. Professores de reputação nacional passaram a ser ameaçados de demissão, por divergências de idéias, deixaram de receber salários.

Quem desistiu do Instituto foi tratado como dissidente. Chegou-se a tentar obrigar um professor a efetuar uma autocritica pública. “Os dinossauros estão soltos nesse parque jurássico e não querem biodiversidade” denuncia ele.

Na primeira reunião interna do departamento, a entrevista de Possas foi qualificada como “o início de uma ofensiva fascista contra o Instituto”.


Não é apenas o descaso com que núcleos acadêmicos como este tratam o dinheiro público que merece o repudio geral. Nem o fato de se ter transformado a Universidade em cabide de emprego. Ou ainda da busca da excelência acadêmica ter sido substituida por um jogo político miúdo.

A questão é que, em tempos de crises estruturais , como a atual, cabe à Universidade o papel de batedora de novas idéias que depois são disseminadas pela indústria de livros e pela imprensa, deflagram o debate nacional que muda as cabeças e permite a saída da crise.

A Universidade não cumpriu seu papel, porque muitos dos grupos mais proeminentes, estavam mais interessados em utilizá-la como trampolim para o poder, em disfarçar sua falta de inclinação pelo trabalho, em garantir seu sagrado direito de gastar dinheiro público sem ser questionado, do que pensar no país."

Fonte: Folha de S.Paulo

sexta-feira, 8 de novembro de 2013

Fed unveils Plan B for withdrawing QE

The bond market has been buzzing this week following the publication of two papers* from staff at the Federal Reserve that could provide officials with a possible way out of their quantitative easing box.
The papers, presented at a conference this week hosted by the International Monetary Fund, suggest a lower unemployment rate of 5.5 per cent before triggering a tightening of policy, while also tolerating a higher rate of inflation of around 2.5 per cent.
It is a framework that entails the Fed keeping its key overnight rate near zero into 2017 in order to get the economy moving. Such a commitment to keeping overnight interest rates lower for longer, known as forward guidance in central bank speak, should in theory anchor long term bond yields and facilitate a taper of QE.
But will it work?
It’s no secret that policy officials are worried that their hefty money printing is stoking an almighty bubble.
Bubble like signs were on display this week with the spectacular debut of Twitter, a social media platform yet to generate a profit. Elsewhere, the S&P 500 in dollar terms eclipsed this year’s gain in Japan’s Nikkei 225, as US equities continue to defy some already weighty valuations.
It’s a similar story in areas of the credit market: this week saw the debut of a new real estate securitisation that harvests rental income and comes with a triple A stamp for the most senior slice of the deal.
The problem for the Fed has been how to gently let the air out of a growing asset price bubble at a time when a recovery in the broad economy, led by decent paying jobs and rising income, is missing in action.
This summer, the bond market looked at any reduction in the Fed’s $85bn of monthly bond purchases, dubbed the taper, as a form of policy tightening and duly sent long-term bond yields sharply higher. The ensuing sell-off in the bond market ultimately prompted the Fed in September to defy market expectations and delay the taper.
Having decided that the US economy cannot handle a 10-year bond yield north of 3 per cent, the Fed is now floating its new approach ahead of Janet Yellen assuming leadership of the central bank next year.
The big question for the Fed is whether the bond market will listen to and respect what is known as Optimal Control. Last year, Dr Yellen outlined the idea in various speeches about how the central bank can use a model to calculate the optimal path of short-term rates that over time will enable the economy to hit unemployment and inflation targets.
Given the moribund rate of inflation with further downward pressure expected from sliding US petrol prices, there is scope for the Fed to pull this off for a while. It is hard to push long-term bond yields significantly higher in the absence of inflation.
The real danger, however, is that keeping rates low for longer only stokes the formation of the ultimate asset bubble.
By December, the Fed will have already maintained its emergency zero interest rate policy for five years. After a massive expansion of its balance sheet thanks to multiple rounds of QE, all we have is a sluggish economy.
The nagging concern is that there really is no plan to arrest a low-growth economy flirting with disinflation and the absence of solid wage growth.
“I’m very sympathetic to the view that the Fed is in a monetary policy corner,” says Ian Lyngen, at CRT Capital. “There is no obvious next step if the nature of the economic data doesn’t improve.”
For all the talk of plans, Mike Tyson nailed it when he said: “Everyone has a plan ’til they get punched in the mouth.”

Fonte: FT

*Aggregate Supply in the United States: Recent Developments and Implications for the Conduct of Monetary Policy, by David Reifschneider, William W Wascher, David Wilcox (RWW), and The Federal Reserve’s Framework for Monetary
Policy – Recent Changes and New Questions, Wlliam B English, J David Lopez-Salido, and Robert J Tetlow (ELST),

quinta-feira, 7 de novembro de 2013

Gavyn Davies: What Fed economists are telling the FOMC

While the markets have become obsessively focused on the date at which the Fed will start to taper its asset purchases, the Fed itself, in the shape of its senior economics staff, has been thinking deeply about what the stance of monetary policy should be after tapering has ended. This is reflected in two papers to be presented to the annual IMF research conference this week by William English and David Wilcox, who have been described as two of the most important macro-economists working for the FOMC at present. At the very least, these papers warn us what the FOMC will be hearing from their staff economists in forthcoming meetings.

Jan Hatzius of Goldman Sachs goes further, arguing that the papers would only have been published if their content had been broadly approved by both Chairman Ben Bernanke and by Janet Yellen. The new works take the Fed’s mainstream thinking into controversial areas which have certainly not been formally approved by the majority of the FOMC.

The English paper extends the conclusions of Janet Yellen’s “optimal control speeches” in 2012, which argued for pre-committing to keep short rates “lower-for-longer” than standard monetary rules would imply. The Wilcox paper dives into the murky waters of “endogenous supply”, whereby the Fed needs to act aggressively to prevent temporary damage to US supply potential from becoming permanent. The overall message implicitly seems to accept that tapering will happen broadly on schedule, but this is offset by super-dovishness on the forward path for short rates.

The papers are long and complex, and deserve to be read in full by anyone seriously interested in the Fed’s thought processes. They are, of course, full of caveats and they acknowledge that huge uncertainties are involved. But they seem to point to three main conclusions that are very important for investors.

1. They have moved on from the tapering decision

Both papers give a few nods in the direction of the tapering debate, but they are written with the unspoken assumption that the expansion of the balance sheet is no longer the main issue. I think we can conclude from this that they believe with a fairly high degree of certainty that the start and end dates for tapering will not be altered by more than a few months either way, and that the end point for the total size of the balance sheet is therefore also known fairly accurately. From now on, the key decision from their point of view is how long to delay the initial hike in short rates, and exactly how the central bank should pre-commit on this question. By omission, the details of tapering are revealed to be secondary.

2. They think that “optimal” monetary policy is very dovish indeed on the path for rates

Both papers conduct optimal control exercises of the Yellen-type. These involve using macro-economic models to derive the path for forward short rates that optimise the behaviour of inflation and unemployment in coming years. The message is familiar: the Fed should pre-commit today to keep short rates at zero for a much longer period than would be implied by normal Taylor Rules, even though inflation would temporarily exceed 2 per cent, and unemployment would drop below the structural rate. This induces the economy to recover more quickly now, since real expected short rates are reduced.

Compared to previously published simulations, the new ones in the English paper are even more dovish. They imply that the first hike in short rates should be in 2017, a year later than before. More interestingly, they experiment with various thresholds that could be used to persuade the markets that the Fed really, really will keep short rates at zero, even if the economy recovers and inflation exceeds target. They conclude that the best way of doing this may be to set an unemployment threshold at 5.5 per cent, which is 1 per cent lower than the threshold currently in place, since this would produce the best mix of inflation and unemployment in the next few years. Such a low unemployment threshold has not been contemplated in the market up to now.

3. They think aggressively easy monetary policy is needed to prevent permanent supply side deterioration

This theme has been mentioned briefly in previous Bernanke speeches, but the Wilcox paper elevates it to centre stage. The paper concludes that the level of potential output has been reduced by about 7 per cent in recent years, largely because the rate of productivity growth has fallen sharply. In normal circumstances, this would carry a hawkish message for monetary policy, because it significantly reduces the amount of spare capacity available in the economy in the near term.

However, the key is that Wilcox thinks that much of the loss in productive potential has been caused by (or is “endogenous to”) the weakness in demand. For example, the paper says that the low levels of capital investment would be reversed if demand were to recover more rapidly, as would part of the decline in the labour participation rate. In a reversal of Say’s Law, and also a reversal of most US macro-economic thinking since Friedman, demand creates its own supply.

This new belief in endogenous supply clearly reinforces the “lower for longer” case on short rates, since aggressively easy monetary policy would be more likely to lead to permanent gains in real output, with only temporary costs in higher inflation. Whether or not any of this analysis turns out to be justified in the long run, it is surely important that it is now being argued so strongly in an important piece of Fed research.


The implication of these papers is that these Fed economists have largely accepted in their own minds that tapering will take place sometime fairly soon, but that they simultaneously believe that rates should be held at zero until (say) 2017. They will clearly have a problem in convincing markets of this. After the events of the summer, bond traders have drawn the conclusion that tapering is a robust signal that higher interest rates are on the way.

The FOMC will need to work very hard indeed to convince the markets, through its new thresholds and public pronouncements, that tapering and forward short rates really do need to be divorced this time. It could be a long struggle.

Gavyn Davies

Fonte: FT

quarta-feira, 6 de novembro de 2013

Aristides Hatzis: Watch Greece – it may be the next Weimar Germany

Since the 2012 summer elections, Greece has rumbled with echoes of the Weimar Republic. There was no doubt that the composition of the Greek legislature was the worst in modern history. Parliament now contains the full spectrum of authoritarians: neo-Nazis, Stalinists and Maoists together with radical leftwingers, populist rightwingers and numerous defenders of paranoid conspiracy theories.
Nevertheless, for more than a year the situation looked superficially bearable. Greece has a strong coalition government trying to implement reforms, cut government spending and restore our economy. But to keener observers, failures outweigh the successes.
First, the major reforms have failed or were never really attempted. The few that were successful are fragile. Most government members are afraid of the political cost and reluctant of clashes with vested interests. Many crucial government positions are occupied by inadequate party apparatchiks.
At the same time, the opposition has broken every record in demagogy and populism. A strong combination of economic illiteracy, parochialism, ideological fixation and opportunism rules out any viable alternative to the mediocre current government. So in this context of depression and pessimism, extremism is flourishing. Political violence is not new to Greece. Terrorism, riots, violent clashes between members of different political parties, or between protesters and police, have been part of the country’s history since 1974.
However this time Greece surpassed its worst self. Greek voters not only trusted a neo-Nazi party – Golden Dawn – with a sizeable presence in the Greek parliament. They elected a party whose members (leaders included) did not even try to disguise themselves as peaceful ultra-rightwingers. On the contrary, Golden Dawn started bullying their political opponents, revealing their true colours. And this did not hurt them at all. Their poll numbers surged, approaching 15 per cent.
This success was the result of many factors. The party presented itself as the anti-system party. Media exposure made members’ faces familiar, normalising their views. The authorities were extremely lenient to them: some of the officials felt bewildered as to how to treat rogue members of parliament; others felt kinship.
Golden Dawn members believed their political momentum gave them immunity. But their violent acts could be tolerated no longer. They crossed the line when one of them killed an anti-fascist rapper in a cafeteria, in front of customers and slow-to-intervene police officers.
The government reaction was bold and embarrassing. It was bold because it decided to apply the law and prosecute their leaders, including members of parliament. It was embarrassing because there were more than several glitches in the application of the basic principles of the rule of law (due process, presumption of innocence, unreasonable searches). And it became obvious that several high-ranking officials were Golden Dawn sympathisers. Nonetheless, the fast government reaction and witch hunt that followed seemed to defuse the situation. Even the radical opposition was eager to overlook the legal technicalities and rejoice.
But the fun ended last Friday. In a mafia-like hit, two professional assassins murdered two Golden Dawn members in front of their party offices in northern Athens. Was this a terrorist attack, a revenge for the murder of the rapper? Or was it literally a mob hit, having nothing to do with politics?
The reader of this article who does not reside in Greece should be terrified by now. These are not everyday incidents for a European democracy. However, if you visit Greece you will be mesmerised by the tranquillity of its residents. Most of us are watching these dreadful acts as spectators of a soccer game.
Meanwhile, we stand by as pillars of our society are cracking. For example, take a case close to my heart: an unreasonable attempt to slash the cost of higher education has caused strikes that have shut down two leading universities (including that of Athens, my employer and Greece’s oldest and leading university). This has been going on for two months. The academic year has not started yet.
Administrative personnel have closed all buildings and forbidden every activity – not only administrative but also academic work. Exams and classes are cancelled, professors are not allowed to work in their offices or meet their students. Groups of strikers, radical students and “concerned” leftwing citizens patrol the campuses.
The students are desperate and dismayed, as are most faculty members. At the same time, the government and the strikers are determined not to back down. The word “compromise” in Greece has a pejorative meaning. And what is the consequence? Nobody really cares. There are other, more interesting segments on the evening news: political murders.

Aristides Hatzis is an associate professor of legal theory at the University of Athens and runs

terça-feira, 5 de novembro de 2013

Martin Wolf: Germany is a weight on the world

The criticisms that hurt are those one suspects might be fair. This might explain the outrage from Berlin last week over the criticism by the US Treasury of Germany’s huge and vaunted trade surplus. But the Treasury is to be commended for stating what Germany’s partners dare not: “Germany has maintained a large current account surplus throughout the euro area financial crisis.” This “hampered rebalancing” for other eurozone countries and created “a deflationary bias for the euro area, as well as for the world economy”. The International Monetary Fund has expressed similar worries.
The German finance ministry responded that its current account surplus was “no cause for concern, neither for Germany, nor for the eurozone, or the global economy”. Indeed, a spokesman stated that the country “contributes significantly to global growth through exports and the import of components for finished products”. This reaction is as predictable as it is wrong. The surplus, forecast by the IMF at $215bn this year (virtually the same as China’s) is indeed a big issue, above all for the future of the eurozone.
Export surpluses do not reflect merely competitiveness but also an excess of output over spending. Surplus countries import the demand they do not generate internally. When global demand is buoyant, this need not be a problem provided the money borrowed by deficit countries is invested in activities that can subsequently service the debts they are incurring. Alas, this does not happen often, partly because the deficit countries are pushed by the supply of cheap imports from surplus countries towards investing in non-tradeable activities, which do not support the servicing of international debts. But in current conditions, when short-term official interest rates are close to zero and demand is chronically deficient across the globe, the import of demand by the surplus country is a “beggar-my-neighbour” policy: it exacerbates this global economic weakness.
It is no surprise, therefore, that in the second quarter of 2013 the eurozone’s gross domestic product was 3.1 per cent below its pre-crisis peak and 1.1 per cent lower than two years before. Its highly creditworthy core economy is subtracting demand, not adding to it. Not surprisingly, the eurozone is also stumbling towards deflation: the latest measure of year-on-year core inflation was 0.8 per cent. Since demand is so weak, inflation may well fall further. This not only risks pushing the eurozone into a Japanese deflationary trap but thwarts the necessary shifts in competitiveness across the eurozone. The crisis-hit countries are being forced to accept outright deflation. This makes ultra-high unemployment inescapable. It also raises the real value of debt. (See charts.)
The policies pursued by the eurozone, under German direction, were certain to have this outcome, given the demand-destroying impact of the all-round fiscal austerity. In a recent paper for the European Commission, Jan in ‘t Veld argues that contractionary fiscal policy has imposed cumulative losses of output equal to 18 per cent of annual GDP in Greece, 9.7 per cent in Spain, 9.1 per cent in France, 8.4 per cent in Ireland and even 8.1 per cent in Germany, between 2011 and 2013. Inevitably, monetary policy is going to find it almost impossible to offset this. Before the crisis, it could work by expanding credit in what turned into the crisis-hit countries – above all, in Spain. Today, it is working against the background of a weak banking system, debt overhangs in crisis-hit countries and an aversion to borrowing in creditor countries.
The most likely way that a more aggressive monetary policy would be effective is by depreciating the euro’s exchange rate. If, for example, the ECB were to undertake large-scale quantitative easing, by buying the bonds of the members in proportion to their shares in the central bank, a falling euro would be the most likely result. But that would exacerbate the tendency of the eurozone, operating under German influence, to force its adjustment on the rest of the world.
As the vulnerable countries shrink their external deficits, while the chief creditor country remains in surplus, the eurozone is generating huge external surpluses: the shift from deficit towards surplus is forecast by the IMF to be 3.3 per cent of eurozone GDP between 2008 and 2015. Given the shortfall demand in the eurozone, the shift might need to be even larger, at least if the vulnerable nations are to have much chance of cutting unemployment. This is a beggar-my-neighbour policy for the world. The US has every right to complain about it, just as others had a right to complain about past US regulatory failures.
It will be impossible, however, for the eurozone to achieve prosperity on the basis of export-led growth: it is too large to do so. It has to achieve internal rebalancing, as well. Hitherto, as the IMF’s October World Economic Outlook shows, it is mass shedding of labour that has raised competitiveness, and collapsing domestic demand that has reduced external deficits in the crisis-hit countries. Thus the adjustment successes have been the other side of the coin of economic slumps and soaring unemployment. Yet, even so, the IMF does not forecast significant reductions in net liability positions. Their vulnerability will endure.
So what, in brief, is happening? The answers are: creeping onset of deflation; mass joblessness; thwarted internal rebalancing and over-reliance on external demand. Yet all this is regarded as acceptable, desirable, even moral – indeed, a success. Why? The explanation is myths: the crisis was due to fiscal malfeasance instead of to irresponsible cross-border credit flows; fiscal policy has no role in managing demand; central bank purchases of government bonds are a step towards hyperinflation; and competitiveness determines external surpluses, not the balance between supply and insufficient demand.
These myths are not harmless – for the eurozone or the world. On the contrary, they risk either trapping weaker member countries in semi-permanent depressions or leading, in the end, to an agonising break-up of the currency union itself. Either way, the European project would come to stand not for prosperity, but for poverty; not for partnership, but for pain. This, then, is a tragic story.

Martin Wolf

Fonte: FT