NewsTrust - All Rated Stories

America’s downgrade: Substandard & Poor

Thu, 11 Aug 2011 00:00:00 -0700

Economist - Aug. 11 (Editorial) - It was a humbling moment for America, and the decision by Standard & Poor’s to strip the country of its triple-A credit rating on August 5th came at a particularly sensitive time. Furious Obama administration officials immediately attacked the ratings agency—and the criticisms increased on August 8th, the first trading day following S&P’s announcement, when the Dow Jones Industrial Average plummeted by 5.5%. Was S&P justified? This matters for the downgrader as well as the downgraded. The reputations of the ratings agencies are still stained by their gross overstating of the quality of mortgage-backed bonds before the credit crisis (see article).

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Debate: The news industry

Sat, 16 Jul 2011 00:00:00 -0700

Economist - By Jay Rosen, Nicholas Carr, Tom Standage - Jul. 16 (Opinion) - There is no question that the internet is transforming the news industry, just as it has reshaped so many other industries. And, as in those other cases, the internet's impact has both positive and negative aspects. Does this, on balance, strengthen or weaken the news system? This question is not merely of academic interest, or self-interest on the part of journalists. Through an accident of history, the news industry is a largely commercial venture that provides important public goods: serving communities, facilitating public debate and holding those in power to account. This debate will hinge, I suspect, on the effectiveness and sustainability of the new models of accountability journalism that the internet makes possible.

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America's debt: Shame on them

Sat, 09 Jul 2011 00:00:00 -0700

Economist - Jul. 09 (Opinion) -

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The future of news: Back to the coffee house

Sat, 09 Jul 2011 00:00:00 -0700

Economist - Jul. 09 (Opinion) - Three hundred years ago news travelled by word of mouth or letter, and circulated in taverns and coffee houses in the form of pamphlets, newsletters and broadsides. “The Coffee houses particularly are very commodious for a free Conversation, and for reading at an easie Rate all manner of printed News,” noted one observer. Everything changed in 1833 when the first mass-audience newspaper, the New York Sun, pioneered the use of advertising to reduce the cost of news, thus giving advertisers access to a wider audience. At the time of the launch America’s bestselling paper sold just 4,500 copies a day; the Sun, with its steam press, soon reached 15,000. The penny press, followed by radio and television, turned news from a two-way conversation into a one-way broadcast, with a relatively small number of firms controlling the media. Now, as our special report explains, the news industry is returning to something closer to the coffee house. The internet is making news more participatory, social, diverse and partisan, reviving the discursive ethos of the era before mass media. That will have profound effects on society and politics.

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The end of mass media: Coming full circle

Thu, 07 Jul 2011 00:00:00 -0700

Economist - Jul. 07 (Editorial) - There is a great historical irony at the heart of the current transformation of news. The industry is being reshaped by technology—but by undermining the mass media’s business models, that technology is in many ways returning the industry to the more vibrant, freewheeling and discursive ways of the pre-industrial era. Until the early 19th century there was no technology for disseminating news to large numbers of people in a short space of time. It travelled as people chatted in marketplaces and taverns or exchanged letters with their friends. This phenomenon can be traced back to Roman times, when members of the elite kept each other informed with a torrent of letters, transcriptions of speeches and copies of the acta diurna, the official gazette that was posted in the forum each day. News travelled along social networks because there was no other conduit.

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The space shuttle: Into the sunset

Sun, 03 Jul 2011 00:00:00 -0700

Economist - Jul. 03 (Special Report) - If the weather holds and there are no unforeseen complications, then early in the morning on July 8th a woman and three men will ascend the launch tower at Florida’s Kennedy Space Centre, strap themselves into Atlantis, the last operational space shuttle, and, as the engines ignite, wait for the countdown to reach zero. Burning thousands of litres of rocket fuel every second and blasting superheated gas into the water-filled trench beneath the pad, the engines will kick up the vast gouts of steam and smoke that characterise a rocket launch.

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Zimbabwe and its diamonds: Forever dirty

Fri, 01 Jul 2011 00:00:00 -0700

Economist - Jul. 01 (News Analysis) - The Kimberley Process (KP) is in danger of collapse. Set up in 2003, the system is supposed to end the trade in “blood diamonds” which illicitly finance civil wars. But its Congolese chairman has unilaterally decided to let sales from Zimbabwe’s disputed Marange diamond fields resume. America, the European Union, Canada and Israel are hotly contesting the move. Rulings by the 49-member body, representing 75 diamond-producing and -trading countries, are supposed to be unanimous. Ever since diamonds were first discovered in a 60,000-hectare site in Marange in eastern Zimbabwe in 2006, reports of killings, torture, corruption, bribery, looting, smuggling and political skulduggery have been rife. The stakes are enormous. Tendai Biti, Zimbabwe’s finance minister, has described the field as “the biggest find of alluvial diamonds in the history of mankind”. Potential revenue has been estimated at $1 billion-2 billion a year. One mining expert involved in the area reckons it is “much, much more”. The IMF put Zimbabwe’s entire GDP last year at $7.5 billion.

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School funding: Public good, public cuts

Sun, 19 Jun 2011 00:00:00 -0700

Economist - Jun. 19 (News Analysis) - In 1783 Noah Webster, a schoolteacher, published the first edition of his American spelling book. It would become a standard text in classrooms around the country, selling 60m copies over the course of the next century. Webster’s view was that the new country deserved its own approach to English, more accessible than the version it had inherited. For Webster and his followers, literacy was a democratic goal as much as a pedagogical one. That vision of public education is a compelling one, although America has often fallen short in its pursuit of the ideal. This makes it troubling that many cities and states, struggling to make up budget shortfalls, have put schools on the chopping block. In Texas, for example, legislators expect $4 billion in cuts for schools over the next two years, a 6% decrease from the state’s projected funding formulas for 2012. The state convened a special legislative session to hash out the details, after a Democratic state senator filibustered the legislation in the regular session.

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Chinese manufacturers: The end of cheap goods?

Sun, 12 Jun 2011 00:00:00 -0700

Economist - Jun. 12 (News Analysis) - “It is the end of cheap goods,” says Bruce Rockowitz. He is the chief executive of Li & Fung, a company that sources more clothes and common household products from Asia than perhaps any other. In the low-tech areas in which Li & Fung specialises, the firm handles an estimated 4% of China’s exports to America and a sizeable chunk of its exports to Europe, too. It has operations in several East Asian countries, where it diligently searches for cheap, reliable suppliers of everything from handbags to bar stools. So when Mr Rockowitz says the era of low-cost Asian production is drawing to a close, people listen. He argues that Asian manufacturing has gone through a number of phases, each lasting about 30 years. When China was isolated under Mao Zedong, companies in Hong Kong, Taiwan and South Korea grew expert at making things. When China reopened in the late 1970s, after Mao’s death, these experienced Asian operators converged on southern China. With almost free access to land and labour, plus an efficient port and logistics hub in nearby Hong Kong, they started to make things ever more cheaply and sell them to the whole world. For the next 30 years manufacturers in China helped to keep global inflation in check. But that era is now over, says Mr Rockowitz. Chinese wages are rising fast. A wave of new demand, especially from China itself, is feeding a surge in commodity prices. Manufacturers can find some relief by moving production to new areas, such as western China, Vietnam, Bangladesh, Malaysia, India and Indonesia. But none of these new places will curb inflation the way southern China once did, he predicts. All rely on the same increasingly expensive pool of commodities. Many have rising wages or poor logistics. None can provide the scale and efficiency that was created when manufacturers converged on southern China.

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The new tech bubble

Sun, 15 May 2011 00:00:00 -0700

Economist - May. 15 (News) - Some time after the dotcom boom turned into a spectacular bust in 2000, bumper stickers began appearing in Silicon Valley imploring: “Please God, just one more bubble.” That wish has now been granted. Compared with the rest of America, Silicon Valley feels like a boomtown. Corporate chefs are in demand again, office rents are soaring and the pay being offered to talented folk in fashionable fields like data science is reaching Hollywood levels. And no wonder, given the prices now being put on web companies. Facebook and Twitter are not listed, but secondary-market trades value them at some $76 billion (more than Boeing or Ford) and $7.7 billion respectively. This week LinkedIn, a social network for professionals, said it hopes to be valued at up to $3.3 billion in an initial public offering (IPO). The next day Microsoft announced its purchase of Skype, an internet calling and video service, for a frothy-looking $8.5 billion—ten times its sales last year and 400 times its operating income. And those are all big-brand companies with customers around the world. Prices look even more excessive for fledgling firms in the private market (Color, a photo-sharing social network, was recently said to be worth $100m, even though it has an untested service) or for anything involving China. There has been a stampede for shares in Renren, hailed as “China’s Facebook”, and other Chinese web giants listed on American exchanges.

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The case against globaloney

Fri, 29 Apr 2011 00:00:00 -0700

Economist - By Schumpeter, Pankaj Ghemawat - Apr. 29 (Opinion) - Mr Ghemawat points out that many indicators of global integration are surprisingly low. Only 2% of students are at universities outside their home countries; and only 3% of people live outside their country of birth. Only 7% of rice is traded across borders. Only 7% of directors of S&P 500 companies are foreigners—and, according to a study a few years ago, less than 1% of all American companies have any foreign operations. Exports are equivalent to only 20% of global GDP. Some of the most vital arteries of globalisation are badly clogged: air travel is restricted by bilateral treaties and ocean shipping is dominated by cartels.

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The 1% solution

Fri, 15 Apr 2011 00:00:00 -0700

Economist - By M.S. - Apr. 15 (Opinion) - MY COLLEAGUE and I have something in common: we both think concentrations of power in alliances between gargantuan business instititutions and gargantuan government institutions are generally terrible. My colleague and I don't have much in common in how we analyse the formation of those concentrations of power, or what we think should be done about them. Another thing my colleague and I have in common is that we each think the other guy's approach to this problem is hopelessly naive. And another thing we don't have in common is that I largely agreed with Joseph Stiglitz's article in Vanity Fair, which my colleague describes as an example of self-refutingly absurd liberal ideology.

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Unorthodox links to the internet: Signalling dissent

Sat, 19 Mar 2011 00:00:00 -0700

Economist - Mar. 19 (News) - With a tin can, some copper wire and a few dollars’ worth of nuts, bolts and other hardware, a do-it-yourselfer can build a makeshift directional antenna. A mobile phone, souped-up with such an antenna, can talk to a network tower that is dozens of kilometres beyond its normal range (about 5km, or 3 miles). As Gregory Rehm, the author of an online assembly guide for such things, puts it, homemade antennae are “as cool as the other side of the pillow on a hot night”. Of late, however, such antennae have proved much more than simply cool. According to Jeff Moss, a communications adviser to America’s Department of Homeland Security, their existence has recently been valuable to the operation of several groups of revolutionaries in Egypt, Libya and elsewhere. To get round government shutdowns of internet and mobile-phone networks, resourceful dissidents have used such makeshift antennae to link their computers and handsets to more orthodox transmission equipment in neighbouring countries.

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The Difference Engine: The answering machine

Sun, 20 Feb 2011 00:00:00 -0800

Economist - Feb. 20 (News Report) - It was not quite a foregone conclusion, but all the smart money was on the machine. Since the first rehearsal over a year ago, it had become apparent that Watson—a supercomputer built by IBM to decode tricky questions posed in English and answer them correctly within seconds—would trounce the smartest of human challengers. And so it did earlier this week, following a three-day contest against the two most successful human champions of all time on “Jeopardy!”, a popular quiz game aired on American television. By the end of the contest, Watson had accumulated over $77,000 in winnings, compared with $24,000 and $21,600 for the two human champions. IBM donated the $1m in special prize money to charity, while the two human contestants gave half their runner-up awards away.

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Egypt Rises Up: The West should celebrate, not fear, the upheaval in Egypt

Wed, 09 Feb 2011 00:00:00 -0800

Economist - Feb. 09 (Opinion) - Some in the West...argue that America should redouble its efforts to secure a lengthy “managed transition” by shoring up either Mr Mubarak or someone like him...That would be wrong. The popular rejection of Mr Mubarak offers the Middle East’s best chance for reform in decades. If the West cannot back Egypt’s people in their quest to determine their own destiny, then its arguments for democracy and human rights elsewhere in the world stand for nothing.

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Nasty words: Toxic v ballistic rhetoric

Sun, 16 Jan 2011 00:00:00 -0800

Economist - Jan. 16 (Opinion) - What's scary about extreme right-wing rhetoric, to a great extent, is the way it's bound up with a legitimation of private violence as a defence of freedom. This has not always been the exclusive domain of the right. In the late 1960s and 1970s, it was extreme leftist groups such as the Black Panthers and the Weathermen whose rhetoric legitimated armed violence as a defence of "the people". It was appropriate for cooler heads then to denounce such rhetoric as scary on its own terms, and crippling to democratic politics. That lesson was effective: even the most inaccurate and excessive rhetoric on the left these days doesn't invoke violence. For the same reasons, today's right should drop its habit of couching political points in violent terms.

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Bigger and better than Wi-Fi

Thu, 23 Dec 2010 00:00:00 -0800

Economist - Dec. 23 (Special Report) - the FCC has used the switch to digital as an opportunity to liberate huge swathes of bandwidth for others to use. The most valuable frequencies of all, those in the 700MHz band (channels 52-69), have been auctioned off to mobile-phone operators. Between them, Verizon, AT&T and others paid nearly $20 billion to clinch this prime spectrum. The reason these channels are so valuable—and why they were chosen for terrestrial television in the first place—is that their signals travel for miles, can carry a lot of information, are unaffected by weather and foliage, and go through walls to penetrate all the nooks and crannies within the bowels of buildings.

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The redistribution of hope

Fri, 17 Dec 2010 00:00:00 -0800

Economist - By The Economist - Dec. 17 (Opinion) - For the past 400 years the West has enjoyed a comparative advantage over the rest of the world when it comes to optimism. Western intellectuals dreamed up the ideas of enlightenment and progress, and Western men of affairs harnessed technology to impose their will on the rest of the world. The Founding Fathers of the United States, who firmly believed that the country they created would be better than any that had come before, offered citizens not just life and liberty but also the pursuit of happiness.

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The rigged, revolving door: Our Peter Orszag problem

Thu, 16 Dec 2010 00:00:00 -0800

Economist - Dec. 16 (Opinion) - Progressives laudably seek to oppose injustice by deploying government power as a countervailing force against the imagined opressive and exploitative tendencies of market institutions. Yet it seems that time and again market institutions find ways to use the government's regulatory and insurer-of-last-resort functions as countervailing forces against their competitors and, in the end, against the very public these functions were meant to protect.

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The year of hope 2.0

Mon, 22 Nov 2010 00:00:00 -0800

Economist - By Arianna Huffington - Nov. 22 (Opinion) - In America, 2008 was all about “hope”: crossing our fingers and electing leaders who we thought would enact the change we desperately needed. Gazing into my crystal ball, I predict 2011 is going to be all about hope 2.0, the realisation that our system is too broken to be fixed by politicians operating from within it—and that real change will come only when enough people outside Washington demand it and make it politically risky to stick to the status quo. America is facing conditions that are highly volatile. On the right, rage is all the rage. Progressives, meanwhile, are awash in disappointment, finding it hard to come to terms with the fact that this president is just not that into them. And America’s middle class is facing a very uncertain future. Wall Street may have its casino up and running again, but Main Street shows no signs of bouncing back anytime soon. Awful statistics—on bankruptcy, unemployment, home foreclosures—flash warnings that the middle class is under assault, and that America risks turning into a third-world nation.

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Barack Obama in Asia: Glaring omission

Sun, 14 Nov 2010 00:00:00 -0800

Economist - By Banyan - Nov. 14 (Opinion) - Mr Obama’s four-country tour of Asia might have been designed to play on Chinese fears of American encirclement. Of course, it was not. Two of the four are on the itinerary as hosts of important international summits—the G20 in South Korea and APEC (Asia-Pacific Co-operation) in Japan.

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Education in America: Is it a bird? Is it a plane?

Sat, 02 Oct 2010 00:00:00 -0700

Economist - Oct. 02 (Opinion) - For America’s children the education system is often literally a lottery. That is the main message of a new documentary about America’s schools, “Waiting for ‘Superman’.” Made by the team that gave us “An Inconvenient Truth”, and supported with the sort of marketing budget that other documentary makers can only dream of, it is intended to create a surge in public support for education reform at least as great as the clamour to do something about climate change generated (for a while) by Al Gore’s eco-disaster flick. The timing could hardly be better. The “jobless recovery” is finally bringing home to Americans the fact that too many of those who go through its schools are incapable of earning a decent living in an increasingly competitive global economy. The number of jobs advertised but not being filled is increasing even as the unemployment rate stays resolutely high.

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Romanies: Home thoughts

Sat, 25 Sep 2010 00:00:00 -0700

Economist - Sep. 25 (News Report) - Finger-wagging rebukes from outsiders about the treatment of Romanies (Gypsies) in the European Union’s newish eastern members may go down less well in future. In these countries a substantial slice of the public, not just the far right, feels vindicated by the deportation of thousands of jobless Romani squatters from Italy and France. These people see Romanies as an ineducable, thieving menace who need to be segregated from, not included in, mainstream society. In Hungary the far-right Jobbik party has applauded the French move. It wants Romanies to be interned and stripped of their citizenship unless they show that they want to accept social norms. Corneliu Vadim Tudor, a Romanian far-right politician, asked mockingly why France was not sending Romanies back “to their home country, India”.

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Bank capital: Foundations of jelly

Tue, 31 Aug 2010 00:00:00 -0700

Economist - Aug. 31 (Opinion) - ... over the past few decades banks have been allowed to build complex capital structures made from inferior materials. The best sort of capital to ensure a stable banking system is equity, because it directly absorbs losses and can thus cushion against systemic shocks. It is, however, expensive, so banks have sought to dilute it with cheap fillers, such as the delightfully-named “hybrid capital” and other fancy instruments.

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The Rich are Different From You and Me: They're More Selfish

Wed, 04 Aug 2010 00:00:00 -0700

Economist - Aug. 04 (Review) - LIFE at the bottom is nasty, brutish and short. For this reason, heartless folk might assume that people in the lower social classes will be more self-interested and less inclined to consider the welfare of others than upper-class individuals, who can afford a certain noblesse oblige. A recent study, however, challenges this idea. Experiments by Paul Piff and his colleagues at the University of California, Berkeley, reported this week in the Journal of Personality and Social Psychology, suggest precisely the opposite. It is the poor, not the rich, who are inclined to charity.

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