Economist 12/18/15

  1. When the New York Times and CBS News asked people across America in April whether they expected a terrorist attack in the United States in the next few months, just 44% said it was very likely or somewhat likely. When they asked the same question this month, that figure had climbed to 79%.Yet their anxiety doesn’t seem to be affecting their travel plans—or maybe just barely. Yahoo Travel polled 2,670 American adults, of whom 1,000 plan to travel during the holiday season. Half of them said the recent terror attacks hadn’t changed their feelings about travelling. An additional 44% said they were more nervous to travel, but wouldn’t change their plans.Only 6% reported that they had changed at least some portion of their plans due to terrorism fears.
  2. In May 2015, George Osborne, the chancellor, announced that having an elected mayor would henceforth be mandatory for all big English cities negotiating devolution deals.He and his Conservative colleagues, as well as many on the opposition benches, are keen for Britain to import US-style directly-elected mayors with a range of beefed-up executive powers.The first British mayors, taking office in London in 2000 and in smaller towns like Hartlepool and Middlesborough in 2001, were integral to New Labour’s “modernisation” project and driven forward by the personal enthusiasm of the then prime minister, Tony Blair.British policy makers from Michael Heseltine in the 1980s to Mr Blair and now Mr Osborne believe that US-style mayors can help tackle the entrenched problems of Britain’s cities. In their view city councils, with their squabbling factionalism, can hold British cities back. Introducing executive mayors, such proponents argue, allows for decision-making to be streamlined.Currently,Britain remains far more centralised than America, and British mayors still lack most of the fiscal powers enjoyed by their American counterparts.
  3. THE Bank of Japan’s move to tweak its programme of quantitative easing (QE) on Friday came from left field.The BoJ began its QE—printing money to buy bonds—in April 2013, and in October 2014 it expanded the programme to ¥80 trillion a year ($660 billion at the current exchange rate), up from between ¥60 trillion and ¥70 trillion a year.The first was to lengthen the maturity of the Japanese government bonds (JGBs) that it is buying, from 7-10 years to 7-12 years, in order to “encourage a smoother decline in interest rates across the entire yield curve”.A second step added a little firepower and an intriguing qualitative twist. The bank will add an extra ¥300 billion to its existing scheme of buying exchange-traded funds (ETFs).To guard against the effects of any shortage of JGBs in the market caused by the central bank’s hoovering-up of bonds, it will now accept foreign-currency-denominated loans on deeds and housing-loans portfolios as collateral
  4. Since 1975 America has also distorted it by banning the export of almost all crude oil.On December 18th Congress voted to put an end to the problem by lifting the 40-year-old export ban as part of an omnibus budget bill. Republicans championed the proposal, which is backed by the oil industry. Reluctant Democrats supported it because in exchange they were able to negotiate an additional five years of tax credits for wind and solar power, which they are keen on.It will increase the market for the light, sweet crude pumped out of America´s shale deposits, which may eventually give the fracking industry a fillip. It will give refineries outside America access to a greater variety of oil, enabling them to operate more efficiently.
  5. IT WAS described as a “make-or-break” moment for Britain and the European Union. Yet, on the face of it, little happened at last night’s summit of EU leaders to advance Britain’s renegotiation of its membership.Britain’s renegotiation, he thought, particularly over migration of EU workers, needed a political energy boost, and he would provide it.He pointed to growing unhappiness with membership among British voters, and his fear that, in the referendum he has promised, they might vote to leave. And he urged those in attendance to understand that a confluence of factors—the EU’s freedom-of-movement rules, Britain’s open labour market, and its unusual “non-contributory” welfare system, which provides generous top-up payments to low-paid workers—was drawing an unsustainable number of European migrants to Britain.The prime minister’s preferred solution is a ban on in-work benefits for migrants until they have toiled in Britain for four years.
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