World

So You Think You Have Problems?

Even if your parents didn't like who you dated, they didn't send him to Siberia. And while they may haunt you in various ways after their deaths, that haunting can never weigh on you as much as Stalin's overhanging ghost. Do read this sad obituary of someone who, because of her father, could never find a place in life: “Wherever I go,” she said, “here, or Switzerland, or India, or wherever. Australia. Some island. I will always be a political prisoner of my father’s name.” Yes, the sins of the fathers are indeed visited upon the children, often in very peculiar ways.

Good News, Bad News for Europe

The good news? France and Germany seem to be in agreement. The bad news? They agree Europe needs more belt tightening so that bankers can get more relief. The leaders of France and Germany, reportedly, are discussing ways to compel European nations to have a common fiscal policy without resorting to the cumbersome process of amending the EU treaty. This was enough to reassure stock markets for the moment, which are nothing if not subject to herd instincts. But who are we kidding here? More austerity may appease the bankers’ need for their pound of flesh, but it will only make the Great Deflation worse. A common fiscal policy is a good idea, but one biased towards austerity is exactly the wrong medicine Before this crisis is over, the Europeans will need to find their way to a common invest-and-grow strategy, which includes debt relief for struggling countries; as well as Euro-bonds and a real crackdown on banker abuses. And the European Central Bank will have to function as a true...

For Europe, High Stakes in Greece

Stabilizing one teetering economy won't end the eurozone's dance of death.

T he problems of the euro turned critical when the Greek government nearly defaulted in May 2010 and the International Monetary Fund and European Union agreed to a bailout. In truth, the 17-nation euro area had deep troubles long before that. Its oversized and undercapitalized banks, its common monetary policy but diverse and fragmented fiscal policies, the persistent economic imbalances among nations that use the euro, and a cumbersome decision-making structure all made the euro-area economy vulnerable. The crisis, which still bears the mark of the Greek tragedy that first set it off, has now spread far beyond Greece. The euro was created for normal times, but the EU lacked good mechanisms for crisis management. At every step of the Greek drama, policy-maker responses have remained behind the curve of economic deterioration. Slowly but surely, this erosion of confidence ensnared other countries, such as Ireland and Portugal, then spread to Spain and Italy, both perceived to be...

Woe Is Europe

A week of credit-rating downgrades and skyrocketing interest rates fuels fears the monetary union is doomed.

(AP Photo/Michael Probst) T hings are now hanging by a thread in Europe. In a disastrous auction of two-year bonds and six-month bills on Friday, Italy was forced to pay interest rates of 7.8 percent and 6.5 percent, respectively—levels far higher than those that sent Greece into the arms of its troika of lenders. Spain, despite the emphatic election a week ago of a new right-wing government committed to austerity, on Tuesday paid an average yield of 5.11 percent on three-month bills and 5.23 percent on six-month bills. The three-month yields were more than double what the country paid a month ago, while the six-month bills had cost it only 3.30 percent in October. Rumors have begun circulating that the new government is planning to ask for some form of outside help to service its debts. Belgium’s credit rating was downgraded by Standard & Poor’s and Portugal was downgraded to junk by Fitch. Even Germany felt the tremors of market turbulence, managing on Thursday to sell only 3.64...

Why Are They So Angry?

An Israeli dove in Jewish America

"He's lying! He's lying!" the man at the back of the hall shouted, in a tone as desperate as it was angry. "He hasn't read the Geneva Conventions. You haven't read them, so you don't know he's lying." The primary object of his rage was me. The secondary object, it seemed, was his fellow congregants, who'd allowed me to lecture at his New York-area synagogue. I'd spoken about threats to Israel's democracy, including those posed by ongoing expansion of West Bank settlements. This was the first time, I'd been told, that the congregation had hosted a speaker on Israel from outside a spectrum running from right-wing to very right-wing. During the question-and-answer period, I was asked about my statement that the legal counsel of Israel's Foreign Ministry had warned before the first West Bank settlement was established that it would violate the agreement of the Fourth Geneva Convention. That's when the man in the back came unstuck. The congregation's rabbi, who was moderating the Q&A...

The Body Politic

Criticism of an Egyptian blogger's nude photos underscore liberal worries about seeming too radical.

Aliaa El Mahdy
As the now historic Tahrir Square filled with protesters over the weekend, the tension between the hope and momentum of the February uprising that ended a 30 year dictatorship and the aggressive, violent military response to a mass civilian demonstration almost one year later was startling. After three days, 23 dead, and over 1500 wounded, it is clear that the transition to a new Egypt is not going to come easily. Surprisingly, the group that has proved to be the most awkward fit into the new Egypt are the youth who engineered the uprising that brought President Mubarak’s reign to an end. Idealistic, peaceful, and largely secular, the success of the Egyptian youth movement became an instant promise of change and possibility. Now, however, their moment in the sun seems to be fading, eclipsed by a military stronghold and the emerging power of the Muslim Brotherhood that was -once outlawed, and is now the main challenge to the military controlled government. With the state under a...

Lies, Damn Lies, and Adoption

Over the past two months, I’ve posted a few items about fraud and corruption in international adoption, a subject I’ve reported on extensively . Of the many articles I wrote on the topic, one story in particular broke my heart—and illuminated how such frauds occur. I’ve just heard, again, from one of the principals in the situation, and I’d like to post his letter. Before I do so, here’s a summary of—and links to—the articles that offer background. In brief: In 1998, Americans adopted 29 children from a town in Sierra Leone whose birth families now say they were stolen. At the time, the Americans believed they were saving desperate orphans from a brutal civil war. But the birth families have now testified that they were offered a free education for their children and were never told that those children would leave the country—much less that the children would be permanently taken away by foreigners. In reporting that story, I ended up talking to people at every stage of the adoption...

Exit Berlusconi, Enter Uncertainty

AP Photo
It was a busy weekend in Italian politics. The Chamber of Deputies passed the latest round of austerity measures, Prime Minister Silvio Berlusconi resigned, and President Giorgio Napolitano mandated Mario Monti, a respected economist and former EU commissioner, to form of a new government of national unity. The backdrop to all this frenzied activity was the country’s growing liquidity crisis: As Italy, the world’s third largest bond market, saw its borrowing costs rise to unsustainable levels in recent weeks, the rest of the planet could only watch in numb horror, as if observing a slow-motion car crash. On Monday, as Monti was in talks with the political parties for the formation of the new cabinet—made up almost exclusively of unelected technocrats—the main index of the Milan stock exchange opened with a 1 percent jump. By the end of the session, though, it was down 2 percent as were the main indices in Spain (-2.2 percent), Germany (-1.2 percent), and France (-1.3 percent). The...

A State of Chaos

How political failures and stagnant institutions brought Greece to the brink of collapse

A protester chants slogans during a protest in front of the Greek Parliament in Athens on Saturday, Oct. 15 2011. About 2,000 protesters turned up at Syntagma Square, outside Parliament, to protest against a new austerity package that is to be voted upon on Thursday. (AP Photo/Kostas Tsironis)
(AP Photo/Kostas Tsironis) About 2,000 protesters turned up at Syntagma Square, outside the Greek parliament, to protest against a new austerity package agreed to in October. G reece is at the breaking point. The autumn air is filled with despair at falling living standards and the inability to meet ever-burgeoning tax burdens and with fury at the political class, members of which are routinely mobbed, showered with eggs and yogurt, even occasionally beaten. Because of striking public-sector unions, Athens regularly lacks public transport, and its streets are often strewn with garbage. The young, with little hope of productive work, divide their time between rioting and looking for a promising place to emigrate. The older generation, those with families, medical bills, and after-school tuition fees, grimly hold on, cutting consumption down to the absolute necessities and eating into their savings to survive. Sometimes, they take to the streets, too. The middle class, such as it was,...

We're Not in Athens Anymore

The selection of Loukas Papademos as prime minister heralds a new era in Greek politics.

Greek and international media cover the statements of the new Greek Prime Minister Lucas Papademos , centre, outside the presidential palace in Athens, Thursday, Nov. 10, 2011. Papademos was named Thursday as the prime minister of the new Greek interim government, charged with keeping the debt-strapped country out of bankruptcy and firmly in the 17-nation eurozone. After four days of intense political negotiations, the 64-year-old former vice president of the European Central Bank was chosen to lead a coalition backed by both the governing Socialists and opposition conservatives that will operate until early elections in February. (AP Photo/Thanassis Stavrakis)
Greeks, Europeans, and anyone else who knew the score breathed a huge sigh of relief at the news that Loukas Papademos, the former deputy head of the European Central Bank, will be Greece’s new prime minister. His appointment, especially compared with some of the other names that were bandied about during the past few days as candidates for the post, is the best one could have hoped for if—at least if one believes that Greece belongs in the eurozone and that an exit from it, which became an ominously fashionable topic of discussion among Europe’s leaders the last few days, would be a disaster not only for Greece but for the whole euro project. As I mentioned Monday, Papademos is a serious man, who has the background and the respect among European leaders that will allow him to guide Greece through the treacherous months ahead. As the country moves forward—his term is expected to last about four to five months, though as he said yesterday, there is no fixed date for new elections—his...

Banker's Choice

In this, Monday, Oct. 30, 2006 file photo provided by the Italian presidency, Italian President Giorgio Napolitano, right, shakes hands with Mario Monti on the occasion of the opening of the academic year at the Bocconi university in Milan. Italy's president has unexpectedly named Wednesday, Nov. 9, 2011, as a senator-for-life Mario Monti, the former European competition commissioner who is widely considered to be a top contender for the Italian premiership, now that Silvio Berlusconi has pledged to resign soon. The surprise move Wednesday night could be a prelude to Monti's getting the nod to head the next government. President Giorgio Napolitano's office announced he had chosen Monti, who now runs prestigious Bocconi University in Milan, for the honor. Senators-for-life include notable figures outside of politics and have voting privileges in the Senate. (AP Photo/Enrico Oliverio,Italian Presidency Press office, File)
So Greece has a new prime minister – Lucas Papademos – and Italy looks about to have a new one, too – Mario Monti. To which not just you and I but damn near every Italian and Greek responds, “Who?” Neither Papademos nor Monti has ever held elective office, or even run for one. Neither has been a minister, sub-minister or even civil servant in one of their nation’s ministries. Neither has developed, or sought to develop, a public following from their careers as economic technicians, chiefly on the European supra-national level. Yet each is about to lead a major nation. Papademos and Monti are something new under the sun: national leaders elected by the markets. Imposed, not as pro-consels by foreign occupiers, but by the European banking community, by the finance ministers of the Eurozone powers – chiefly, Germany and France. Each has an impressive resume and a good reputation with the centrist political and economic elites of his own nation, but there’s no reason why the person on the...

Are They Orphans?

Beware of overseas orphanages seeking donations. If you're not careful, you may become the victim of an orphanage scam—in which a savvy entrepreneur in a poor country hustles up some children so that he or she can ask developed-world humanitarians for money for the children's support. In some of the notorious cases , the orphanage director pockets the money while the children are left to starve or sold for sex. Few people know that they may be underwriting kidnapping or other modes of defrauding local families out of their children. In other cases, the traffickers put the children—who are neither abandoned nor orphaned—up for international adoption, which can bring in astonishing fees. One version of the orphanage scam has just been uncovered in India by the Esther Benjamins Memorial Foundation. Several years ago, a now-infamous child-trafficker traveled through Nepal's Humla province, asking families to pay him to take their children to boarding schools in Kathmandu. Instead,...

Bunga Bunga and the Bond Market

It’s clear that the markets don’t want Silvio Berlusconi to continue as Italy’s prime minister. They were cheered yesterday, briefly, when word got around that Berlusconi was stepping down, then subsided into their accustomed grumpiness when he denied it. (We know this by following the interest rates on Italy’s bonds, which are soaring, save during the brief moment when it was thought Berlusconi’s departure was nigh.) But the markets’ moment may be at hand. The leaders of two of Europe’s Mediterranean governments are either hanging by a thread (Berlusconi) or have already gone (Greece’s George Papandreou), unable to reconcile the demands of their people not to have their lives decimated by austerity with the markets’ demands for precisely such austerity. Such a moment marks a triumph of the market over democracy, queasy as I am to identify Berlusconi with democracy. After all, it was Berlusconi who brought the logic of the market, and of marketing, into Italian politics, controlling...

One Big Question

Last Thursday, I attended a conclave, sponsored by the Frederich Ebert Foundation, of about 20 American liberals (chiefly economists and union representatives) and 20 German social democrats (economists, unionists, Social Democratic Party officials, and a couple of stray businessmen) to see what we could learn from each country’s respective economic, social, and political arrangements. Early on, one German friend posed a question to us Americans: “Where’s your [i.e., America’s] learning curve?” What he meant was that Germany and much of continental Europe had relearned certain key lessons after the financial meltdown of 2008 and its calamitous aftermath that America had apparently failed to process—chiefly, the need for an active and resourceful government capable of regulating markets and boosting the economy when the private sector is flat on its back. To be sure, with Northern Europe (Germany in the lead) currently promoting austerity to Southern Europe (Greece above all), it’s not...

Who Will Lead Greece?

Whoever becomes leader of the country's interim government has a tough road ahead.

Greek Prime Minister George Papandreou meets Greek President Karolos Papoulias at the Presidential Mansion in Athens, Greece on November 5, 2011. (J Liakos/Rex Features via AP Images)
After a weekend of intense haggling, sharp public statements, and hope trading places with despair every other hour or so, Greece is set for its first coalition government in 22 years. Last night, a little after ten o'clock, the office of the president of the republic released a short statement announcing that Prime Minister George Papandreou, leader of the left-wing PASOK Party, and the leader of the conservative opposition party, the Nea Demokratia, Antonis Samaras, had agreed to form a new, interim government with the purpose of implementing the bailout agreement reached at the October 26 European Union Summit. Afterward, the country will hold new elections. The statement noted that Papandreou will not lead the new government and that he and Samaras will communicate on Monday to decide on the person who will. (J Liakos/Rex Features via AP Images) Greek Prime Minister George Papandreou meets Greek President Karolos Papoulias at the presidential mansion in Athens, Greece yesterday...

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