25 December 2015   Leave a comment

Indian Prime Minister, Narendra Modi, paid a surprise visit to Prime Minister Nawaz Sharif of Pakistan today.  The meeting was unexpected and it came in the midst of a diplomatic trip by Modi to Afghanistan, which Pakistan has always viewed as within its sphere of influence.  The two countries have had a very tense relationship throughout their history since the partition in 1947 and current relations are quite bad.   It is difficult to determine how significant this personal meeting might be in terms of the relationship between the two states.

Russian airstrikes killed Zahran Alloush, the head of Jaysh al Islam, one of the most important rebel groups opposing Syrian President Assad.   The killing of Alloush is a serious blow to American and Saudi hopes of cultivating a “moderate” rebel opposition to Assad to offset the allure of Daesh (the Islamic State).  It is difficult to see any viable alternative for the Americans other than to accept Assad’s continuation in office to preserve the integrity of Syria.  The Russians closer to boxing the Americans into that position.

Manuel Funke, Moritz Schularick, and Christoph Trebesch are three German economists who have studied the political impact of financial crises.  They constructed a dataset of more than 800 elections from 1870 to 2014 and included 100 financial crises and their aftermaths, including protests and strikes.   Their conclusions are straightforward:

“The typical political reaction to financial crises is as follows: votes for far-right parties increase strongly, government majorities shrink, the fractionalisation of parliaments rises and the overall number of parties represented in parliament jumps. These developments likely hinder crisis resolution and contribute to political gridlock. The resulting policy uncertainty may contribute to the much-debated slow economic recoveries from financial crises.”

These conclusions resonate strongly with the experiences of the world since the financial crisis of 2008-09.


Posted December 25, 2015 by vferraro1971 in World Politics

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