By Fareed Zakaria
“The list of potential policy actions that could benefit the United States – trade liberalization, comprehensive regulatory reform, and immigration and education reform, among others – is long,” writes Glenn Hubbard for Project Syndicate. “But only two policies are particularly promising for such a ‘Pact for America’: federal infrastructure spending and corporate-tax reform. Enactment of these reforms would generate a win for each side – and for both.”
“But such a bipartisan consensus requires removing both the left and the right’s ideological blinders, at least temporarily. On the left, a preoccupation with Keynesian stimulus reflects a misunderstanding of both the availability of measures (shovel-ready projects) and their desirability (whether they will meaningfully change the expectations of households and businesses). Indeed, to counteract the mindset forged in the recent financial crisis, spending measures will need to be longer-lasting if they are to raise expectations of future growth and thus stimulate current investment and hiring.
“The right, for its part, must rethink its obsession with temporary tax cuts for households or businesses.”
“For airlines, Asia's skies aren't terribly friendly. According to data compiled by Bloomberg, six of the 10 initial public offerings by airlines in Asia during the past five years are trading below their sale prices. Legendary investor Warren Buffett, who swore a decade ago never to invest again in the airline business following his losing $358 million bet on US Airways, is surely feeling vindicated,” writes Dhiraj Nayyar for Bloomberg View.
“India should stand out amid this grim landscape. Passenger traffic has grown rapidly over the last decade. At its peak between 2003 and 2009, traffic grew somewhere between 20 and 40 percent per year. Growth hardly slackened even after the economy stalled in 2013: Traffic that year was up 5 percent over 2012. Packed airplanes, however, have not led to profitable airlines.”
“Trade negotiations test democracies to their limits. In the final phases, weary negotiators attempt to find common ground. Small interest groups that fear being disadvantaged become more shrill and intransigent; larger business and industry stakeholders that would gain by the deal fall largely silent; and the public, which would gain most of all, is confused. Media coverage is saturated with ever more strident rhetoric over ever narrower issues, overshadowing the fundamental interests at stake,” writes Dennis Blair in the New York Times.
“This is the stage we have reached in the American-Japanese negotiations over the Trans-Pacific Partnership. Public debate has become dominated by, on one hand, the profits of pork farmers in Japan and the United States and, on the other, political maneuvering to assign blame in anticipation of a failure to close a deal. Lost in the discussion are the advantages to both countries’ overall national interest and an overwhelming majority of their respective citizens.”