Here's a pro tip: You can't bail anyone out if you don't have any money.
This isn't exactly breaking news, but it is a problem for Spain. Their government is running out of money, and so are their banks. This is normally the time to go to Germany for a sovereign bailout. But Spain has understandably resisted. They're terrified of fully surrendering fiscal sovereignty like Greece, Ireland, and Portugal. An even deeper depression would beckon.
So, instead, we get a game of chicken.
Let's step back a minute. Spain has a trio of problems. First, it has a frightening unemployment problem that's created a deficit crisis, due to its housing bust. Second, its banks have a bad loan problem, again due to its housing bust. And third, it has a capital flight problem. Depositors are moving their money out of Spanish banks into German banks -- some €100 billion or so in the first quarter of 2012 alone -- due to fears that Spain might devalue and abandon the common currency.
The chart below from the Institute of Empirical Research at the University of Osnabrück (via FT Alphaville) basically shows how much each euro zone member owes or is owed by the ECB. It's a good proxy for how much capital flight there's been from each euro zone country. Spain (purple) is the worst, just edging out Italy.
Spain's banks are dead. Their assets and deposit bases are both evaporating. But the government can't afford to bail them out.
Here's how the game of chicken works. Germany wants Spain to formally accept a bailout package. It would be just on the edge of affordable for Germany right now, but it would give Germany control of Spain's budget. Not so surprisingly, this doesn't sound like a good deal to Spain. So instead, Spain has more or less asked the ECB to print some money and give it to their banks. There is precedent for this: It's basically what the ECB has done with some Greek and Irish banks -- although that was after those countries had already accepted bailout programs. The ECB doesn't want to do this as a substitute for an outright bailout, so it has said no. Hence, the standoff.
Spain has another problem. They don't have much leverage. They can threaten to blow up the euro, but it's not that credible a threat. Even if Spain defaulted on all of its debt, it would still have a budget deficit of 6 percent of GDP. It would have to cut spending or raise taxes by roughly that much -- or print the difference. In other words, a disaster. At best, Spain can hope to wrest a few concessions from Germany before accepting a bailout -- like giving it more time to cut its deficit.
Italy should be paying attention. Like Spain, their banks are in trouble. But unlike Spain, Italy has a primary surplus -- that is, its budget minus its interest payments is in the black. A euro zone exit would still be a disaster, but it would be a manageable disaster. As crazy as it sounds, ex-Prime Minister Silvio Berlusconi is right: Italy should consider chucking the common currency if the ECB doesn't start printing money.
Things couldn't get much more upside-down now in Europe.
That sounds bad. Is it? Should I never run another marathon? Never run more than a few miles? Never leave this chair?
The nephrologist Chirag Parikh, a professor of medicine at Yale, was unsure what to tell his patients. He knew that running marathons tends to be associated with at least temporary kidney damage, but he didn’t know how or why exactly that happened.
Today he’s a step closer to understanding, as his lab has published a new study elaborating on the relationship. In one of the country’s premier kidney-disease journals, the American Journal of Kidney Diseases, Parikh found that the rate of acute kidney injury was likely closer to 75 percent. And the effect was not subtle. “We demonstrated that there is the same amount of injury and inflammation after marathon running that we see in patients coming out of cardiac surgery or in the ICU,” he told me.
If Republicans want to confirm President Trump’s nominee to the Supreme Court, they’ll likely have to change the rules and invoke the Senate’s “nuclear option.”
There’s an easy way and a hard way for the Senate to confirm Judge Neil Gorsuch to the Supreme Court, and it appears Democrats are going to make Republicans do it the hard way.
That Gorsuch would ultimately take the late Justice Antonin Scalia’s seat on the high court has scarcely been in doubt in the weeks since President Trump nominated him 11 days after he took office. A well-regarded judge on the 10th Circuit Court of Appeals in Colorado, Gorsuch has a legal resumé tailor-made for the Supreme Court, he’s won nearly universal praise from conservatives, and he emerged from his confirmation hearings with his reputation largely intact.
The only question has been whether Gorsuch would win the eight Democratic votes necessary to reach 60 and defeat a filibuster, or whether Democratic resistance would force Republicans to change Senate rules, invoke what’s known in Washington as “the nuclear option,” and confirm Gorsuch with a simple majority of 51 votes. Statements of opposition haveflooded in from Democrats this week, making the answer clearer every day: Gorsuch is likely to fall short of 60 votes, and Republicans will have to jam his nomination through the Senate on their own.
The Trump administration may be accelerating "Easternization," argues Gideon Rachman.
Next week, Chinese President Xi Jinping will travel to the United States to meet Donald Trump for the first time. But according to Gideon Rachman, the chief foreign affairs commentator for the Financial Times, power is flowing in the opposite direction. Rachman is far from the first analyst to argue that China and other Asian nations are rising while the Western world declines, nor is he the first to cite the now-familiar statistics about China’s ballooning economy and unparalleled manufacturing might. His contribution is to help explain some of the most confounding developments of the day—from the Middle East’s descent into anarchy to the ascent of populist politicians in the West to the emergence of nostalgia as a political force—through his theory of the “Easternization” of international affairs.
The Sony World Photography Awards has announced the winners of its Open categories and National categories for 2017.
The Sony World Photography Awards, an annual competition hosted by the World Photography Organisation, has announced the winners of its Open categories and National categories for 2017. This year's contest attracted 227,596 entries from 183 countries. The organizers have again been kind enough to share some of the winners and runners-up with us, gathered below. All captions below come from the photographers.
The Fox News host—like White House Press Secretary Sean Spicer—landed himself in hot water Tuesday for responding to how a woman of color looked, and not to what she said.
Tuesday was not a good day for America’s hard-charging white men. Fox News host Bill O’Reilly began his day on the set of Fox & Friends, where he was asked about remarks that Representative Maxine Waters made Monday evening on the floor of Congress about Trump supporters and patriotism. Instead of responding to Waters’s comments, O’Reilly opted to focus on something else. “I didn’t hear a word she said,” O’Reilly said, interrupting his hosts. “I was looking at the James Brown wig.”
In response, there were loud barks of (male) laughter on the set.
O’Reilly continued: “If we have a picture of James—it’s the same one.”
The laughter continued.
Host Ainsley Earhardt interjected, “No, I gotta defend her on that,” she said, “You can’t go after a woman’s looks. I think she’s very attractive.”
The program is based on the idea that habit-forming behaviors start in childhood.
At a Berlin day-care center, the children packed away all the toys: the cars, the tiny plastic animals, the blocks and Legos, even the board games and most of the art materials. They then stood in the empty classroom and looked at their two instructors.
“What should I do now?” my son, then 5, asked.
He did not get an answer to this question for a long time. His day-care center, or kita, was starting a toy-free kindergarten project. For several weeks, the toys would disappear, and the teachers wouldn’t tell the children what to play. While this practice may seem harsh, the project has an important pedagogic goal: to improve the children’s life skills to strengthen them against addictive behaviors in the future.
Angela Merkel’s country can resist the rightward pull in European politics.
Amid fears of a rising populist tide in Europe, Germany seems to be resisting its rightward tug with unique success.The day after Donald Trump’s election, The New York Timeshailed German Chancellor Angela Merkel as the “Liberal West’s Last Defender.” And it was to Merkel, the new “leader of the free world,” that Barack Obama directed his final phone call as president.
Meanwhile, others around the world are embracing right-wing populism, from the Britons’ stunning decision to leave the European Union to Indian Prime Minister Narendra Modi’s Hindu nationalist agenda to Philippine President Rodrigo Duterte’s authoritarian policies. Trump’s election has appeared at times to inject fresh energy into the right-wing parties of Europe.As some countries there brace for national elections this year, the prospects for these parties look bright. In France, for example, far-right National Front party leader Marine Le Pen is expected to advance to the second round of balloting in April’s presidential elections; recent polls show her beating scandal-ridden conservative candidate Francois Fillon in the first round.
Republican voters elected legislators on the basis of their refusal to compromise and a president who promised to cut deals. It’s no wonder they’re having trouble governing.
Do populist Republicans want a federal government where politicians stand on principle and refuse to compromise? Or do they want a pragmatist to make fabulous deals?
The intra-Republican conflict highlighted by last week’s failure to repeal or replace Obamacare is usefully understood as a consequence of confusion on those questions. Elected officials associated with the Tea Party, or the House Freedom Caucus, believe that they were sent to Washington, D.C., to replace sell-outs who compromised themselves by seeking earmarks for their constituents, buckling to establishment whips, or horse-trading with the Democrats.
Yet many populist entertainers, like Rush Limbaugh and Sean Hannity, who fancied themselves champions of the Tea Party’s no-compromise ethos, morphed, during Election 2016, into cheerleaders for a different kind of populist—Donald Trump—who pointedly declared that he was seeking the nomination of the Republican Party, not the conservative party, and regularly boasted during the campaign that he should be elected in large part because of his prowess as a dealmaker. Forget principle—the art of the deal was the way to make America great again.
Years of misleading coverage left viewers so misinformed that many were shocked when confronted with the actual costs of repeal.
As the Republican Party struggled and then failed to repeal and replace Obamacare, pulling a wildly unpopular bill from the House without even taking a vote, a flurry of insightful articles helped the public understand what exactly just happened. Robert Draper explained the roles that Stephen Bannon, Paul Ryan, and others played in deciding what agenda items President Trump would pursue in what order. Politicoreported on how and why the House Freedom Caucus insisted that the health care bill repeal even relatively popular parts of Obamacare. Lest anyone pin blame for the GOP’s failure on that faction, Reihan Salam argued persuasively that responsibility rests with poor leadership by House Speaker Paul Ryan and a GOP coalition with “policy goals that simply can’t be achieved.”
Senators Richard Burr and Mark Warner promised a long, slow, even dull inquiry into election interference—an implicit rebuke to the House’s ever-more-chaotic process.
As Tolstoy would have written if he were a national-security reporter, all dysfunctional committees are dysfunctional in their own way, while all functional committees are frustratingly tight-lipped.
Or something like that. In any case, a Wednesday press conference by Senators Richard Burr and Mark Warner, the chairman and ranking Democrat on the Senate Intelligence Committee, presented a glaring contrast to the House’s own intelligence committee, which seems to spin into greater chaos daily. The pair emphasized bipartisanship, process, and patience, offering little in the way of factual revelations while implicitly rebuking the House Intelligence Committee.