Correo de Noticias al 01/03/08 (1)
WASHINGTON — Ben S. Bernanke, chairman of the Federal Reserve, signaled his readiness on Wednesday to bolster the economy with cheaper money even though inflation is picking up speed.
The Fed chairman acknowledged that the central bank faced increasingly contradictory pressures of slowing growth and rising consumer prices. But his bottom line was that, for now, the top priority would be fighting a recession rather than fighting inflation.
Mr. Bernanke’s view of the state of the economy, part of his semiannual appearance before Congress, came as the dollar sank to a historic low against other major currencies, introducing a possible third dimension to the economic problems the Fed chairman must tackle all at once.
Having already cut short-term interest rates by almost half since September, Mr. Bernanke painted a grim picture of consumers reluctant to spend, businesses reluctant to invest and banks reluctant to lend. On top of it all, housing prices keep falling.
“The economic situation has become distinctly less favorable” since last summer, he told the House Financial Services Committee. In words that investors immediately recognized as a hint of lower rates, he vowed to “act in a timely manner” and “provide adequate insurance against downside risks.”
The Fed’s decision to err on the side of faster growth poses risks. Ever since the wrenching experience with stagflation in the late 1970s, the rule of thumb in monetary policy has been that revving up a slow economy is far easier than slowing inflation once it becomes entrenched.
The hope is that lower interest rates will encourage consumers and businesses to spend more, while the risk is that the spending will aggravate inflation.
But the success or failure of the Fed’s strategy could depend on something outside Mr. Bernanke’s immediate control: foreign confidence in the American dollar and foreign willingness to keep financing the United States’ huge external debt.
The dollar has plunged 24 percent against a basket of six major currencies in the last four years, and on Wednesday it slipped to its lowest level yet since the United States let the dollar float freely in 1973.
A weak dollar can be both good and bad for the United States economy. It tends to bolster American exports by making them cheaper in foreign markets, but it also pushes up inflation by raising the cost of foreign imports. And while the United States pays for foreign oil in dollars, many analysts contend that part of the recent run-up in oil prices was tied to the steadily declining value of the dollar.
Over the long haul, the bigger worry for Mr. Bernanke may not be import prices as much as interest rates and the dollar’s value. Huge inflows of cheap foreign capital helped keep interest rates for mortgages and businesses low even as the Fed raised its benchmark overnight rates from 2004 to 2006.
If foreign investors become more wary, in part because of the dollar’s declining value, some economists worry they will not invest in the United States unless they get higher long-term interest rates — even as the Fed lowers its overnight rate.
“I don’t think there is any great danger of hitting a trigger point where people cut and run from the dollar,” said Kenneth Rogoff, a professor of economics at Harvard and a former director of research at the International Monetary Fund. “But there are hidden costs. The dollar’s pre-eminence in the international financial system provides a huge bonanza to the United States. We pay lower interest rates than we would otherwise. We can probably borrow money on short notice more easily than we could otherwise.”
Mr. Bernanke did not mention the dollar’s falling value on Wednesday, but he has said on previous occasions that he saw no sign that the dollar was in danger of losing its status as the world’s leading reserve currency.
On Wednesday, Mr. Bernanke carefully acknowledged that inflation had accelerated in recent months and would make the Fed’s job much more difficult if it became ingrained in public expectations.
“Any tendency of inflation expectations to become unmoored or for the Federal Reserve’s inflation-fighting credibility to be eroded would greatly complicate the task of sustaining price stability and could reduce the flexibility of the F.O.M.C,” Mr. Bernanke warned, referring to the Federal Open Market Committee, which sets interest rates.
“Accordingly, in the months ahead, the Federal Reserve will continue to closely monitor inflation and inflation expectations,” Mr. Bernanke said.
But Mr. Bernanke made it clear that Fed officials are more worried about a sharp slowdown and rising unemployment than they are concerned about inflation.
The Fed’s assumption is that slower economic growth will reduce inflationary pressure in the months ahead, because debt-laden consumers will be far more wary of spending money and businesses will be more cautious about investing in plant and equipment.
Though the Fed is still predicting that the economy will narrowly escape a recession, policy makers have sharply cut their forecasts for growth in 2008 to less than 2 percent and expect almost no expansion during the first six months of this year.
At the hearing on Wednesday, Mr. Bernanke cautioned that even the newer bleaker forecast could prove optimistic. He predicted that the housing downturn would continue to slow the economy “in the coming quarters,” noting that financial markets are still in turmoil and that credit has become more difficult to get.
Consumer spending has “slowed significantly,” he said, in part because of rising gasoline prices, slowing job growth and the decline in household wealth as a result of falling home prices.
On Wall Street, investors and analysts expressed relief that the Fed was indeed ready to lower rates again. It has already reduced the Federal funds rate to 3 percent from 5.25 percent since September, and investors had already been betting that Fed officials would lower it to 2.5 percent at its next meeting on March 18.
“We think Bernanke is (finally) right on” in placing top priority on fighting a recession, wrote Bernard Baumohl, managing director of the Economic Outlook Group in Princeton, N.J.
But some experts were sharply critical.
“They’re doing the same stupid things they did in the 1970s,” said Allan H. Meltzer, a professor of economics at Carnegie Mellon University and the leading historian of Fed policy. “They were always saying that we’re not going to let inflation get out of hand, that we’re going to tackle it once the economy starts growing, but they never did it.”
Even some economists who have warned about a recession for more than a year now expressed worry that the Fed’s policy of lower interest rates, combined with slowing growth and credit market problems, could undermine foreign confidence in the dollar, driving up both interest rates and inflation.
“I’m still of the view that the downside risks to the economy are more important than the inflation risks, but at some point the ability of the Fed to cut rates will be limited by the willingness of the rest of the world to finance the current account deficit,” said Nouriel Roubini, president of Roubini Global Economics in New York, referring to the broadest measure of the nation’s trade and investment balance.
ALABINO, Russia — Dmitri A. Medvedev, the man chosen to be the next Russian president, sat surrounded by soldiers. It was Feb. 23, Defenders of the Motherland Day, and Mr. Medvedev had traveled to the parade grounds of the Tamanskaya Motorized Rifle Division outside Moscow.
The division has long been a fixture of Russian political life. Its battalions have marched for decades in formation in Red Square.
Eight years ago, as President Vladimir V. Putin introduced himself to the world, its platoons fought for the capital of Chechnya, helping to forge Mr. Putin’s persona as a leader of icy resolve.
Now, Mr. Medvedev, the presidential successor personally selected by Mr. Putin, is creating his own public identity according to a choreographed script. And here, in a mix of Soviet and Russian symbols, the man rising to Kremlin power avoided the stern themes that have often accompanied Mr. Putin’s appearances.
He wanted to talk about living conditions, for soldiers and civilians alike. “Let’s talk about the problems that exist,” he said to the soldiers beside him before a bank of television cameras. “Let’s have a normal conversation. Please.”
The outcome of the monthlong presidential campaign, which culminates Sunday, when voters will cast ballots, is already known. Barring something extraordinary and unforeseen, Mr. Medvedev, 42, an unprepossessing bureaucrat who has never held an elected office, will win by a landslide and become the Kremlin’s new leader.
Mr. Medvedev, who lacks the imposing K.G.B. résumé of his sponsor, has said he will appoint Mr. Putin as his prime minister.
As he has become the country’s second most-watched man, he has implicitly presented himself as both a Putin loyalist and a president-in-waiting who will wield power in a manner more gentle than the world has seen under Mr. Putin’s brand of rule.
Whether this is a pose is an open question. Mr. Medvedev, in commentary outside of official Russian circles, has been cast as a puppet, a president who will labor according to Mr. Putin’s command.
But he has made unanticipated moves. In a speech on Feb. 15, he said liberty was necessary for the state to have legitimacy among its citizens. And he has laid out domestic policy goals in what seems like a communiqué to Russia’s expanding consumer class.
Mr. Medvedev has also struck a campy pose — hamming it up with Deep Purple, the British heavy metal band whose music was popular in Soviet times — that suggested a dormitory-life playfulness that is decidedly not Putinesque.
His words and behavior have raised unexpected but pervasive questions. Does Mr. Medvedev mean what he seems to say? Can he ease the grip on Russian political life that has been a central characteristic of Mr. Putin’s rule?
And if he does, will he clash with Mr. Putin, his principal source of power?
Analysts are split. Michael A. McFaul, director of the Center on Democracy, Development and the Rule of Law at Stanford University, said Mr. Medvedev had a more Western orientation than many Kremlin insiders. But he suggested that his official embrace of freedom was more packaging than substance. “That’s public relations,” he said. “That’s not strategic shift.”
Sergei Markov, a political scientist who is close to the Kremlin and a member of Parliament, said Mr. Medvedev, a lawyer with roots in St. Petersburg, had an affinity for the West. He expects that Mr. Medvedev will push for more political freedom, to a point.
“Medvedev will try to encourage political competition within the system without destabilizing the system,” he said. “How he does this, we will see. But I think stability will be the priority.”
He also said the model Mr. Putin had chosen for his transition from Russia’s highest office, and Mr. Medvedev’s flashes of liberal inclinations, could lead to unintended divides in Russia’s circles of power. That, he said, is a reason Mr. Medvedev will push only so far.
“The Russian government has weak institutions,” Mr. Markov said. “A split between two personalities could destabilize the political situation, and because politics plays a main role in the Russian economy, if there is a split it could destabilize the economy, too. So that is a major risk.”
As Russians and analysts contemplate the future with Mr. Putin out of the presidency, the contrasts between him and the president-to-be, and between the Kremlin’s latest words and its recent history, are visible in many ways, no less than in the very context of the discussion.
The election season here is not an election season as a Westerner would understand it. It is a certification.
Mr. Medvedev, who is a first deputy prime minister and chairman of the board at Gazprom, Russia’s gas monopoly, has toured the country without the distractions of competition, in part because the government blocked the sole true opposition candidate from the ballot.
There are three other candidates: Gennadi A. Zyuganov, the Communist Party leader, who has been marginalized in part by Mr. Putin’s popularity and his mastery of Soviet nostalgia; Andrei V. Bogdanov, the almost unknown head of an even less powerful Democratic Party; and Vladimir V. Zhirinovsky, an ultranationalist who has served as an unofficial jester in the Kremlin’s court.
The remnants of the organized opposition have suggested that these candidates are a troika encouraged to run by the Kremlin to create the appearance of a race. Polls predict that they may capture as little as a combined 20 percent of the vote.
With no viable candidate to compete against, the Kremlin has used the prelude to the formalities of inauguration to introduce a new leader. Mr. Medvedev, who emanates intelligence and calm but little intensity, is one step short of supreme; only Mr. Putin remains above him.
State-controlled television covers him extensively and warmly. There is little public contest over ideas about Russia’s course, much less questioning of Mr. Medvedev’s qualifications to be the next leader of a country with 140 million people, a nuclear arsenal and the world’s largest hydrocarbon reserves.
Instead, Mr. Medvedev has used the campaign as an open microphone, outlining an agenda to make Russia — which has rebounded from the financial crisis of the 1990s but has enduring problems with infrastructure, public health, corruption and an economy that relies on resource extraction — a vibrant and economically diversified state.
He has promised to improve schools, build housing, encourage business and amend the tax code in ways that will encourage household and social stability, including offering tax breaks for retirement savings, charitable donations and education and medical costs. Changes, he says, are on the way.
He has said he will modify the health care system to allow more choice. And he has challenged the persistent sense that Russia’s government, whose bureaucracy has expanded under Mr. Putin and remained inefficient and corrupt, is inevitably elephantine and beyond the ability of citizens to change.
Much of his agenda overlaps domestic plans Mr. Putin has himself outlined, including fighting corruption and reversing Russia’s poor state of public health
But the differences between the men’s styles can be stark. When Mr. Medvedev arrived to meet the soldiers here, he had to walk past a huge banner that bore Mr. Putin’s face beside scenes of weapons and combat.
“The work of a real man — to defend homeland, family and loved ones,” the banner read.
Mr. Putin, an exercise buff and martial arts expert, can emanate a catlike fitness and a comfort with conflict. Mr. Medvedev is trim but has no similar aura. He walked briskly by the poster, looking at the ground.
Unlike Mr. Putin, Mr. Medvedev, in most of his appearances, has also avoided dwelling on foreign policy or Russia’s tensions with the West.
Western capitals are hoping for a shift from Mr. Putin’s assertiveness. But aside from a statement of support for Serbia and a refusal to recognize Kosovo, Mr. Medvedev has not offered point-by-point proposals of how he will manage Russia’s role in the world. Few analysts expect significant changes.
“Personalities change, but that doesn’t change a nation’s interests,” said Boris Kagarlitsky, director of the Institution for Globalization Studies and Social Movements in Moscow.
Mr. McFaul, of Stanford, said he also expected the United States and Russia to still face diplomatic difficulties when Mr. Medvedev moves to the Kremlin, no matter what his inclinations may be.
“He’s more pro-Western, and more Western in his attitudes, than any of the other candidates out there,” he added. “Having said that, he is weak.”
One senior Western diplomat said that those following Russia closely have come up with a possible test of whether Mr. Medvedev will marshal power.
In the summer, the Kremlin will send a delegation to the Group of 8 meeting in Japan. Already informal bets are being taken, he said. Will Mr. Putin attend, or Mr. Medvedev, or both?
Killed while they played football, the child victims of Israel's revenge on Gaza
Four boys playing football have been killed in Gaza by Israeli air strikes, according to Palestinian officials, as Israel responded to the death of a man from a barrage of rocket attacks with a bloody escalation of violence.
At least 16 Palestinians – including the four children – were killed yesterday as Israel responded to the deadly attacks the previous day.
While the Israeli military said it had been targeting militants and rocket-launching squads, the officials said the boys were playing football close to their homes in Jabalya, northern Gaza.
A relative, Ahmed Dardouna, 42, said the family had located the bodies of the boys – reportedly two brothers and their cousins – at a local hospital after they failed to return home. Rocket fire from militants into Israel continued during the day lightly injuring two Israelis and forcing the Israeli Interior Minister, Avi Dichter, to take cover during a visit to the border town of Sderot. His bodyguard was one of those injured, in a rocket attack launched before the minister arrived. Four rockets reached Ashkelon, 12 miles north of Gaza.
Palestinian officials said that while the majority killed were militants, 10 civilians were among the total of at least 27 killed over the past two days – seven of which were children.
They said that one Palestinian was killed and four wounded in a helicopter attack on a police roadblock 150 yards from the home of the de facto Hamas prime minister Ismail Haniyeh.
Although Mr Haniyeh is said to have gone into hiding and was not at home at the time, the attacks were locally interpreted as a warning to Hamas's political leadership because the coastal area of the Beach refugee camp where he lives is not used for launching rockets.
The latest outbreak of violence began on Wednesday when an airstrike killed five militants, described by Hamas as "five of our best fighters", as they drove in a van in the southern Gaza town of Khan Yunis.
Hamas claimed responsibility for a subsequent and unusually heavy retaliatory barrage of more than 40 Qassam rockets, one of which killed a 47-year-old father of four at the Sapir College in Sderot.
Israel swiftly responded with a series of air strikes beginning on Wednesday, killing two other children aged 10 and 11, according to Palestinian officials. A missile attack on the Ministry of Interior building on Wednesday evening killed a baby, Mohammed al-Burai, living nearby and caused severe destruction at the adjacent offices of the Oxfam-funded Palestinian Medical Relief Society.
Oxfam said the missile destroyed £15,000 of drugs in the pharmacy, a disabled centre catering for 400 chronically ill patients, an ambulance and a generator needed during the frequent power cuts in Gaza. Oxfam said last night: "We call on all parties to end military action which affects civilians and targets civilian infrastructure."
The Israeli Defence Minister, Ehud Barak, yesterday hinted at the possibility of a large-scale ground operation in response to the Qassam fire, saying: "We must prepare for continued escalation... We are not eager [to carry out such an operation], and not shying away from it. Israel will reach the perpetrators and Hamas will pay a price for its actions."
But the Israeli Prime Minister, Ehud Olmert, who met the US Secretary of State Condoleezza Rice in Tokyo, where he is on an official visit, said there were no "magic formulas" to eliminate rocket fire. He added: "We are suffering painful blows, but are returning more painful blows. We will continue fighting in order for the danger to the residents to end."
One of the Palestinians killed was Hamza al-Haya, the son of a senior Hamas Palestinian legislative council member, Khalil al-Haya, and said by the Islamic faction to have commanded a rocket-launching squad in northern Gaza. Visiting the morgue at Gaza, Mr Haya said: "I thank God for this gift. This is the 10th member of my family to receive the honour of martyrdom."
There were unconfirmed reports that a fifth child was also killed in Jabalya last night. As the Palestinian Foreign minister, Riyad al-Malki, condemned both the Qassam attacks and the Israeli military actions, Nabil Abu Rdeineh, spokesman for the Palestinian President, Mahmoud Abbas, said yesterday's air strikes "meant only one thing: the Israeli government... aims to destroy the peace process".
Ms Rice said: "I am concerned about the humanitarian condition there and innocent people in Gaza being hurt. We have to remember that the Hamas activities are responsible for what has happened in Gaza."
Palestinians claimed the air strikes included the use of F16s and Apache helicopters.
Friday, 29 February 2008
Far too many children have been leaving primary schools unable to handle words and numbers properly, and the Blair government was determined to do something about it. It believed it had found the way. Set clear targets for schools, devise strategies for teaching literacy and numeracy, and hold everyone to account.
It may have sounded a very good idea in No 10. But the Government might have been warned by the collapse of the Soviet economy, which depended on numerical targets, strategies and sanctions. What has happened to primary education in England is not unlike what happened to Soviet industry.
The whole emphasis becomes on driving up the numbers. Because these numbers are so important to, in this case, the schools and teachers, all sorts of gaming takes place. Moreover, the schools and teachers had to demonstrate to inspectors that they have been following the prescriptions of not just what to teach but also how to teach it.
The scores on the national tests have gone up, but the quality of education is questionable. Still too many children go to secondary schools not being able to read, write and add, even though they have scored well on SATs. Concern has been expressed at the dip in performance on moving up to secondary, but more likely is that the primary scores were inflated.
Ministers have essentially reduced education to a series of numerical targets. The emphasis on achieving Level 4 numeracy and literacy scores has led to a narrowing of the primary school experience and insufficient attention to raising all children to the best levels they can achieve.
My own recipe for rescuing primary education would be tests, but not targets or league tables; broader more supportive inspections; and above all allowing teachers to exercise their professional expertise within a national curriculum.
Debe dejar el cargo mientras se le investiga por tráfico de influencias y otros delitos, afirman
■ El funcionario incurrió además en peculado y uso indebido de facultades, según Monreal
■ González Garza desecha que se vaya a recurrir a la SFP; el FAP estudia acciones legales
Andrea Becerril y Fabiola Martínez
El secretario de Gobernación, Juan Camilo Mouriño, debe retirarse del cargo mientras se lleva a cabo la investigación sobre su presunta responsabilidad en tráfico de influencias y otros delitos relacionados con la obtención de contratos de Petróleos Mexicanos (Pemex) cuando ya era servidor público, demandaron diputados y senadores del PRD.
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Vamos a ver qué hacen nuestros legisladores con el caso, señala
■ Asegura que los medios se ocupan más ahora de su movimiento
Roberto Garduño (Enviado)
San Blas, Nay., 29 de febrero. Ante las evidencias irrefutables de la participación de Juan Camilo Mouriño en negocios de su familia con el gobierno federal mientras se desempeñó como legislador del PAN, “esperamos a ver qué hacen nuestros diputados y senadores, porque él está utilizando el tráfico de influencias”, argumentó Andrés Manuel López Obrador.
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Vence en 2011 la moratoria para comenzar la explotación del hoyo de dona: Jorge Palacios
Israel Rodríguez J.
Al margen del debate sobre la participación de inversión privada en Petróleos Mexicanos (Pemex), los legisladores deben definir las características del nuevo acuerdo con Estados Unidos para explotar los yacimientos transfronterizos, antes del vencimiento del plazo de la moratoria por 10 años en 2011 para la extracción de crudo en el Polígono Occidental, mejor conocido como hoyo de dona, en el Golfo de México, urgió Jorge Palacios Treviño, diplomático de carrera.
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