Economist 1/27/15

  1. For the 70th anniversary ceremony the liberation of Auschwitz by Red Army being held today, probably the last major one the ageing survivors will attend, the plan was to make the survivors the centre of attention. Putin decided not to attend the ceremony in Auschwitz, feeling snubbed because Polish authorities had not invited him. In fact, the Poles had deftly avoided inviting any politicians in person. Poland has been one of the strongest advocates in the European Union for taking a tough line against Russia over its armed interference in Ukraine.Besides honouring the Holocaust’s victims, organisers of the events in Prague and at Auschwitz want to bring public attention to a renewed wave of anti-Semitism and intolerance in Europe.
  2. America is marching away from the death penalty. The number of executions rose from 31 in 1994 to a peak of 98 in 1999, then began dropping as more and more states declared death penalty moratoriums or abolished it altogether. In 2014, of the 35 people who were put to death in America, at least three died grisly, apparently painful deaths.Last Friday, the Supreme Court agreed to hear a case challenging three upcoming executions in Oklahoma. The inmates contend that Oklahoma’s drug cocktail violates the eighth amendment’s ban on cruel and unusual punishments. They zero in on one of the three drugs in the state’s protocol, midazolam, a substitute for barbiturates that European manufacturers opposed to capital punishment are no longer selling to American prisons. It seems midalozam may be less effective than the other drugs in bringing about “a deep, coma-like unconsciousness”, and thus might expose a person being executed to a great deal of pain when the other two drugs—one to induce paralysis, another to stop the heart—are injected.As Adam Liptak reminds us in the New York Times, it takes only four justices to agree to hear a case but five to issue a stay of execution.
  3. Orchard is just one of many “fintech” firms sprouting in Wall Street’s shadow. But it stands out due to the prominence of its seed investors, including former chief executives of Citigroup (Vikram Pandit) and Morgan Stanley (John Mack). Orchard serves as a conduit between large entities that have money to invest and an emerging world of firms that originate loans.There are now at least 450 originators, Mr Burton estimates, focusing on half a dozen niches including loans to consumers, small businesses, students and property investors. To the extent the originators resemble one another, it is that they tend to make relatively small loans and use innovative methods to evaluate risk. For example, SoFi, based in San Francisco, refinances law-school debt for graduates who have passed the bar and are thus particularly likely to repay.So far Orchard’s platform is connected to seven of these originators and 36 institutional investors.Most originators, in contrast, are not regulated as banks, and are not subject to the same expensive capital requirements or suffocating red tape.
  4. Attitudes to the right way to spend early childhood years still vary around the world. Scandinavians dislike formal early schooling but relish subsidised day care earlier on. German parents put relatively few of their toddlers into formal crèches, but are happy for them to head off to kindergarten when they are three. Ambitious Asians, notably in South Korea, are keen on solid pre-schooling as a chance to improve educational outcomes and make them more consistent. The Swiss prefer to keep their kids at home a bit longer, but still do well by them overall.Andreas Schleicher, head of the OECD’s education team, says early-years investment does not “automatically produce gains in learning, unless systems transfer this to primary and secondary level”.
  5. But Sunday’s result in the Greek election marks a turning-point because Syriza, the radical-left party that has prevailed at the polls, campaigned on casting aside austerity, backtracking on the reforms and renegotiating the vast debt that Greece owes its European creditors. These policies are unacceptable to the euro-zone countries, especially Germany, that have lent Greece so much money.From the perspective of Northern creditor nations, Greece was the architect of its own misfortune by mismanaging its public finances on a staggering scale. It has been lent an astonishing amount of money in not just one but two bail-outs, amounting to €246 billion ($275 billion), worth more than the country’s entire economic output. From a Greek perspective, however, the country has suffered a calamitous decline in GDP, which at its low in late 2013 was 27% down on its pre-crisis peak.Greeks feel that they have lost control of their country, which is now instead being directed by the hated troika: the European Commission, the IMF and the European Central Bank.

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