Digest: 4 November 2014
In Why Taxation Must Go Global, Wolfgang Schäuble (for The World Post) discusses the discrepancy between the development of tax avoidance mechanisms and the legislation to govern those mechanisms. Schäuble, Germany’s Finance Minister, argues that it will be necessary to continue to build on the implementation of uniform global standards to better manage the taxation of income. Recent efforts in Berlin, involving 122 countries, have produced an agreement on the automatic exchange of information on financial accounts. This development is expected to help curb the problem of governmental revenue losses as a result of diminishing tax bases.
In Driving Student Borrowers Into Default, The Editorial Board of The New York Times argues discusses how students with private loans often do not have the benefit of flexible payment plans, causing them to default on those loans. The Editorial Board argues that Congress must rescind the bankruptcy provision passed in 2005 that prevents the discharge of loans through the bankruptcy process, or it must require lenders to provide flexible payment plans that will allow students to meet their obligations when they are in a better financial position.
In Monetary Fallacy, Anne Seith (for Der Spiegel) discusses growing pressure on ECB President Draghi to engage in a large scale bond buying program in an attempt to stimulate the European economy. This method, called quantitive easing, is not without detractors, including the President of the German central bank. It did not necessarily work very well in Japan, and in the US, while bond buying programs have shown some short-term success, they have increased the Federal Reserve’s balance sheet to $4.5 trillion and it is not yet clear what long-term costs there may be.
In U.N. Panel Issues Its Starkest Warning Yet on Global Warming, Justin Gillis (for The New York Times) discusses the Intergovernmental Panel on Climate Change’s latest report, which describes the consequences of not reducing emissions. These consequences include food shortages, refugee crises, the flooding of major cities and island nations, and mass extinction of plants and animals. The report also finds that no serious policy exists to limit global warming, and that while governments are spending $600 billion a year subsidizing coal and petroleum companies, they are spending less than $400 to reduce emissions or otherwise respond to climate change.
In Do Nothing, Repeat, Eugene Robinson (for TruthDig) discusses the US political system’s long-term planning and execution failure. The problem is structural. What is needed includes a substantial increase in spending on basic research, and major improvements to K-12 education and infrastructure. Currently interest rates are at historic lows, Robinson argues now would be a good time to make some long-term investments.
In How to Watch the Election Returns Like a Pro, William A. Galston (for The Brookings Institution) discusses how smaller county elections can be overlooked in the media, but some of these are important bell-weathers for state-wide results. Galston considers the importance of particular counties in Colorado, Georgia, Iowa, Kansas, Louisiana, New Hampshire and North Carolina.
In Judges For Sale?, Kieran Petersen (for BBC News) discusses some of the adverse consequences of US states electing their judges. Judicial elections are starting to resemble congressional elections, increasingly reliant on campaign funding from donors. Some see the funding issue as a serious problem – if judges are reliant on funding for election campaigns, it may influence the way they decide cases. Others don’t see it as such an issue, but there is a risk in developing a system in which the law favors those who supply the largest contributions.
In The Years of Living Tactically, Javier Solana (for Project Syndicate) discusses the distinction between tactical and strategic thinking, and describes how short-term tactical concerns have prevented the development of a strategic plan for managing the transition from the post-WWII world to the present multilateral geo-political environment. This failure to strategize has resulted in a slew of governance and foreign policy failures. Solana describes these failures as including Ukraine, the Middle East, the support of autocracies, China, and security. In the case of the US recent failures are at least partly due to a defective US governmental system. These failures are the result of employing short-term tactical thinking. To create a habitable, stable, free, and prosperous world it will be necessary to think more strategically.