25 October 2014   Leave a comment

Paul Krugman is a noted Keynesian economist–he favors government intervention in the market in order to stimulate demand.  Classical liberals oppose such policies because they believe that markets, if left alone, will produce more efficient and productive outcomes, and that government intervention produces political and not economic outcomes.  Krugman has written an op-ed piece in which he compares the protests in Hong Kong to politics in the United States.  His conclusions are that without government interventions, one can only expect greater income inequality in both economies.

Iran has set a deadline of 24 November for closing a deal with the P5+1 (the 5 Permanent members of the UN Security Council–the US, Great Britain, France, Russia, and China–plus Germany).  Typically, negotiations get much tenser as deadlines approach, but it seems clear that both sides want to come to an agreement.  There are reasons to believe that the negotiations will ultimately be successful, contrary to popular opinion when the negotiations started.  What is not clear is how the both the US Congress and Israel will react to the deal.  President  Obama will likely try to craft an agreement that does not need Congressional approval.

Italian Prime Minster Matteo Renzi has introduced new labor law reforms that are strongly opposed by Italian labor unions.   The unions organized protests across Italy and the one in Rome brought together almost a million people.  The unions are opposed to continued austerity measures designed to bring down the Italian budget deficit.  The protests mirror other protests against austerity across Europe.  It remains to be seen whether Germany will ease up on its demands that European Union nations adhere to the rule that budget deficits cannot be more than 3%.

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Posted October 25, 2014 by vferraro1971 in World Politics

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