A Mexican vote with big consequences

THE wood-panelled walls of Rodrigo Moya Torres’s study are decorated with hunting knives. On his desk lies a pistol; underneath is a rifle. Mr Moya, who wears a black Stetson and monogrammed cowboy boots, grew up on a ranch. But he has spent the past 31 years publishing a weekly newspaper in the town of Ecatepec, just north of Mexico City.

The firearms are for self-defence. The opinion pages of his newspaper, Morelos de Ecatepec, fulminate against corruption at all levels of government. Mr Moya has received death threats; a local politician tried to kidnap him, he says. No politician merits his respect. “They treat people badly and they don’t look after them,” he fumes.

Ecatepec is a violent part of the State of Mexico, which encircles the country’s capital city almost fully and provides a home to many people who work there. Many of its inhabitants seem to share Mr Moya’s contempt for politicians, which suggests that turnout in a...Continue reading

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Donald Trump asks the Supreme Court to reinstate his travel ban

“SEE you at the Supreme Court!”, Donald Trump tweeted angrily on April 26th, after his travel ban suffered a third defeat in a federal court. On June 1st, late in the evening, the president followed through on that threat. The Department of Justice filed a sheaf of papers with America’s highest tribunal, asking it to reinstate Mr Trump’s second executive order to pause America’s refugee programme and halt travel from six Muslim-majority nations. The president’s lawyers are pursuing a dual-track strategy: they would like the Supreme Court to hear the full appeal on an expedited schedule, and they request—since “expedited” in this slow-moving institution still means months—that in the meantime the justices issue a stay on unfavourable lower court rulings and let the order order take effect.

After his hastily released first travel ban, issued on January 27th, was blocked by a Seattle judge and the Ninth Circuit Court of Appeals refused to lift the stay, Mr Trump went back to the drawing board. His somewhat sanitised...Continue reading

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If Jobs are Plentiful, How Come No One is Getting a Raise?

U.S. unemployment is low, but it sure took a long time to get there.

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Plenty Can Go Right for Bristol-Myers

Last year’s cancer drug darling is this year’s value stock.

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Europe inches closer to a plan for fixing its financial flaws

DONALD TRUMP and Theresa May may have done more to push Europeans together, and open up an opportunity for reform of its institutions, than any pro-European American president or British prime minister could ever have dreamt. The Commission’s “Reflection paper on the deepening of the Economic and Monetary Union”, issued on May 31st, points the way towards a package deal that could be acceptable to Northern and Southern euro area countries. But some key elements are still missing.

Encouragingly, the Commission sets out a tight calendar for completing the banking union, with the creation of a common deposit insurance scheme and a common backstop for the European Resolution fund intended to be in place by 2019. These two elements are crucial if we are to stop the banks posing an existential risk to the states where they operate.

But avoiding the “diabolic loop” between banks and states also requires cutting the...Continue reading

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The super-rich are different: they pay less tax

The race to become Islamic banking’s fintech hub

FOR all the sophistication of some of its financial centres, and despite the ubiquity of smartphones, the Middle East has been a late adopter of financial technology, or fintech. Of more than $50bn in fintech investment globally since 2010, according to Accenture, a consultancy, only 1% has gone to the Middle East and north Africa.

Khalid Al Rumaihi, head of Bahrain’s Economic Development Board, blames institutional foot-dragging and a lack of infrastructure and venture capital. Yet he insists innovation is inherent to Islamic financial tradition. The modern cheque derives from an Arabic instrument, a written vow to pay for goods on delivery, to avoid carrying money on dangerous journeys. “In the 9th century”, he says, “a Muslim businessman could cash a cheque in China drawn on his bank in Baghdad.”

Several cities are now jockeying to establish themselves as fintech hubs. Last year Cairo launched two “accelerators”—schools to nurture startups. Abu...Continue reading

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America’s community banks hope for lighter regulation

A FEW weeks ago Standard Financial, a bank with assets of just $488m and a mere nine branches, merged with Allegheny Valley Bancorp, a slightly smaller neighbour in the suburbs of Pittsburgh. The main reason for the deal, says Tim Zimmerman, Standard’s chief executive, was the rising cost of regulation—though competition from PNC, a $371bn colossus based in the city, also played a part. “Without the regulatory overreach…since the crisis,” Mr Zimmerman says, “we’d probably both have gone along on our own, I think.”

Standard is one of America’s 5,400 community banks: local lenders, funded chiefly by deposits, who pride themselves on knowing their turf by the inch and their customers by name. Their size can range up to $10bn in assets, but most are much smaller: over 5,000 banks and savings institutions have less than $1bn and more than 1,500 under $100m. They account for 92% of federally insured banks. Though they make only 16% of all loans, they provide 43% of...Continue reading

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Will President Trump rescue failing pension funds?

TO THE exasperation of budget hawks, Donald Trump has long made clear that he will not reform Social Security (public pensions). But maintaining these entitlements does not fully protect workers’ retirement income. For many, pension promises from their employers are more important. These can shrink or vanish when firms fail. And, like Social Security, the programme that protects retirees against such losses—the Pension Benefit Guaranty Corporation—is going bust.

The PBGC levies premiums on defined-benefit pension plans in order to bail out those that fail (up to a maximum payout per worker). On current trends, one of its insurance schemes will probably run dry by 2025. The problem is so-called “multi-employer” funds (see chart). These involve multiple firms, usually under an agreement with an industry-wide union. They cover about 10m Americans, roughly 1m of whom are in a plan that admits it is probably broke. The biggest struggler is the Central States fund, which covers about 400,000...Continue reading

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Eastern Bank: a 199-year-old lender becomes a tech pioneer

LIKE other local bankers, Bob Rivers is counting the cost of red tape. At the end of 2015 and 2016 Eastern Bank, a Boston lender of which he is the chief executive, held its balance-sheet below $10bn by briefly parking some deposits elsewhere. Now Eastern—America’s oldest and largest mutual bank, founded in 1818—has crossed the threshold. It will thus become subject to a limit on the debit-card fees retailers pay to bigger banks, and lose $9m of revenue, Mr Rivers says. Other rules will also kick in, costing $6m. The $15m total is one-sixth of Eastern’s pre-tax earnings.

At least, unlike America’s many much smaller lenders, Eastern has the wherewithal to tackle another costly burden: information technology. It is just small enough to be called a “community bank”, but also just big enough to invest in IT. Being a mutual is essential too, Mr Rivers says: he does not have to answer to shareholders about quarterly profits.

In 2014 Eastern set up an...Continue reading

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Goldman Sachs is criticised for buying Venezuelan bonds

BONDS are bought and sold every second of every day without attracting attention. But it is not often that the seller is the central bank of a brutal, cash-strapped regime faced with protests; the buyer, a bulge-bracket American investment bank; and the size of the deal in the billions of dollars. A report in the Wall Street Journal on May 28th that Goldman Sachs had bought bonds with a face value of $2.8bn issued by Venezuela’s state-owned oil company, PDVSA, for 31 cents on the dollar (ie, for $865m) caused a stink.

Julio Borges, an opposition politician and president of the National Assembly, lambasted Goldman on May 29th in an open letter to its chief executive, Lloyd Blankfein, for its decision to “aid and abet Venezuela’s dictatorial regime”. For all its sins, that regime has met its obligations to bondholders. Mr Borges vowed to advise future Venezuelan governments not to repay the bonds in question. Protesters gathered outside Goldman’s...Continue reading

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Sweden’s economy is thriving, so why is monetary policy so loose?

ON A recent balmy day, people thronged the parks and promenades of central Stockholm. Swedes have much to feel sunny about. Real economic growth, at a heady 3.2% in 2016, has averaged 2.8% annually since 2009, compared with the euro area’s 1.1% per year. In April, Swedish inflation was close to the target of 2% aimed at by the Riksbank, Sweden’s central bank. Yet it decided not only to maintain the main policy rate at -0.50%, where it has been since February 2016, but to increase the amount of asset purchases under quantitative easing (QE) by a further SKr15bn ($1.7bn) during the second half of 2017.

One explanation for keeping policy so loose is that the inflation figure is deceptive. Johan Javeus of SEB, a bank, points out that some of the increase was driven by one-off factors, such as rises in air fares and energy prices. After raising rates prematurely in 2010 and 2011, the Riksbank is loth to do so again.

But also, it is hemmed in by the European Central Bank (ECB). The...Continue reading

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Global monetary policy is not tightening as expected

AT ITS outset, 2017 seemed likely to mark a turning-point for global monetary policy. The Federal Reserve had just raised its main interest rate by a quarter-point and was expected to add three such increases this year—or perhaps even more, if a new Republican Congress could agree on tax cuts with a new Republican president. In that case, low interest rates would no longer be the “only game in town” in terms of policy stimulus. The European Central Bank (ECB) would begin to wind down its programme of quantitative easing, or QE, probably by mid-year. The Bank of Japan would cut back on QE, too. In September it set a target yield for ten-year bonds, of 0.0%, which would probably require fewer asset purchases. Of the global giants, only China seemed likely to keep its policy settings as loose as in 2016.

In this context, the ECB’s meeting on June 7th and 8th was not long ago eyed as pivotal. The bank’s staff would produce new, upbeat economic forecasts. Many ECB-watchers (and maybe...Continue reading

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Taiwan’s economy has defied the pessimists

Tsai takes the flak

TAIWAN’S president, Tsai Ing-wen, has had a tough first year in office. Her popularity has plummeted as she has struggled to find a path through thorny policy debates. Hope that she might have a staunch ally in Donald Trump has receded. China has ratcheted up pressure, leaving Taiwan more isolated internationally. Less noticed is that Ms Tsai has, for now, won over one important group: investors. Cash inflows from abroad have made Taiwan’s stockmarket and currency among Asia’s best performers. Foreign direct investment in the electronics industry has also surged.

The government, to be sure, cannot take too much credit. A revival in global trade is the main reason for Taiwan’s improved fortunes. Exports rose 15% in the first quarter, the fastest rate in six years. The big gains for Taiwan’s stockmarket—up 40% in dollar terms since Ms Tsai’s inauguration—are about the same as those in South Korea, another economy whose growth is...Continue reading

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In Donald Trump’s America, the left rethinks its economics

DEMOCRATS thought they knew the boundaries of acceptable economic discourse. Then came Donald Trump, who trashed them, yet won the presidency. He upended Republican positions on trade, and exposed the vulnerability of the Democratic Party on its home economic turf: the well-being of American workers. He also seems to have liberated the left to think big ideas—and confront hard questions.

Since 1992 Democratic economic policy has been rooted in technocratic centrism, meant to smooth the rough edges of the market. “We reject both the do-nothing government of the last 12 years and the big-government theory that says we can hamstring business and tax and spend our way to prosperity,” read the party platform in 1992. “Instead we offer a third way.” This was a desperate effort to escape the political wilderness. Yet it also reflected intellectual trends in economics. Inflation and falling productivity in the 1970s seemed to bear out the views of economists such as Milton Friedman, that...Continue reading

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What's Missing Is What's Good About European Growth

Europe’s recovery hasn’t seen much bank lending. That may yet be a good thing.

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China Is a Highly Suspect Leader on Climate Change

The world’s largest carbon emitter is now titular leader of the Paris accord’s climate efforts—but until China fixes distortions in its power sector, foreigners will find profit opportunities limited.

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Why Paris Matters Less Than It Seems

President Trump’s decision to pull out of the Paris climate agreement will have less impact than expected and will hurt some companies that might have been expected to benefit.

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South Koreans get dewy-eyed about a former president

Roh and Moon, purveyors of possibilities

A DOCUMENTARY that intersperses old friends reminiscing about a late head of state with archive footage of him on the hustings hardly sounds like a blockbuster. Yet in South Korea, “Our President”, about the early political career of Roh Moo-hyun, is the film that moviegoers are most eager to see, according to pollsters. No other documentary has been even half as popular in its first week. In online forums self-described jungalmot (political dummies) say they “cried buckets” when they watched it.

The film is an unabashed eulogy: 30-odd former aides, friends and commentators reminisce along with members of Nosamo (“I love Roh”), a fan club that helped bring him to power and that is still active. A former secret-service agent who had been instructed to spy on Roh as a “dangerous” human-rights lawyer describes how he became his friend. Roh’s driver recalls how Roh, in a self-effacing...Continue reading

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How foreigners misunderstand Singapore

SINGAPORE has never been short of admirers. Many leaders of developing countries respect Lee Kuan Yew, its founding father, for taking his city-state from third- to first-world status while resisting Western calls for greater political liberalisation. Paul Kagame, Rwanda’s iron-fisted president, hopes that his country will become “the Singapore of Africa”. Fans of Rodrigo Duterte compare the Philippine president to Lee: strong-willed and intolerant of crime and corruption.

Lately the rich world, too, has begun to look at the island. “Want to ditch Obamacare? Let’s copy Singapore’s health-care miracle,” chirped an opinion piece on the website of Fox News, a conservative American broadcaster, soon after the election of Donald Trump. It argued that the “miracle” rested on two features dear to Republican hearts—“empowering consumers and fostering competition”. Some of the more vocal Brexiteers dream of turning Britain into “Singapore-on-Thames”: a low-tax, lightly...Continue reading

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Democracy has muzzled Myanmar’s parliament

MYANMAR’S laws are an abject muddle of colonial holdovers, socialist ukases and military decrees—a reflection of its troubled history. Some 140 of them require re-writing, reckons Htin Kyaw Aye of Open Myanmar Initiative, a think-tank monitoring parliament. Among the priorities are the century-old law governing private enterprise, which needs urgent updating; a badly worded defamation clause in the Telecommunications Law that is all too often deployed by anyone holding a grudge; and the passage of a law penalising violence against women, to deal with a glaring omission in the criminal code.

One might expect the first freely elected Hluttaw, or parliament, in more than half a century to be working overtime on this daunting list. Instead it is becalmed. Just days before it was due to reconvene in May, U Tun Tun Hein, chairman of the committee that organises parliamentary work, was at a loss to say what would be done in the next session. “I cannot tell you which laws will be...Continue reading

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Bangladesh’s government is pandering to Islamist zealots

IN THE dead of night workers prised the statue off its base, raised it onto the back of a truck and hauled it away. The blindfolded woman in a sari, sword in one hand and scales in the other, was supposed to represent justice. Made by a local sculptor and muralist whose work graces the police headquarters, the international airport and the Saudi ambassador’s residence, among other prominent spots, it had been installed in front of the supreme court only months before. But a puritanical Islamist movement, Hefazat-e-Islam (“Protectors of Islam”) had denounced the sculpture as a depiction of a living creature—something the most doctrinaire strands of Islam abjure. Sheikh Hasina Wazed, Bangladesh’s prime minister and leader of the theoretically secular Awami League, averred that she, too, disliked the statue. But when it disappeared, local media assailed the government for abandoning its principles. In the end, in an awkward compromise, the statue was reinstalled in front of an annex to...Continue reading

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The flaws in Donald Trump’s decision to pull out of the Paris accord

AFTER announcing on June 1st that America will abandon the Paris climate agreement, Donald Trump can at least claim to have honoured a campaign promise. Then again, as he also pledged to reinstate torture, eliminate the national debt in eight years and hail Iran’s supreme leader with “Hey baby!”, that isn’t saying much. And the president’s decision to withdraw from the accord is similarly unconscionable and fatuous. A repudiation of his predecessor’s main climate policy, it was opposed by most of Mr Trump’s advisers, most large American firms and two-thirds of Americans. Mr Trump has dealt a severe blow to America’s interests and standing.

More hot air than a flue-gas stack
The Republicans who had been arguing to leave Paris, including Scott Pruitt, who disputes that people cause climate change and heads Mr Trump’s Environmental Protection Agency, consider this as merely consistent with George W. Bush’s decision to exit the Kyoto protocol in 2001. Yet Mr Bush, though misguided, at least had an...Continue reading

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Donald Trump plans to undo Obamacare’s birth-control requirement

LAST month, surrounded by a throng of beaming pastors, nuns and rabbis in the White House’s Rose Garden, Donald Trump signed an executive order “promoting free speech and religious liberty”. Many religious leaders complained that it did no such thing: trumpeted as a move to allow the faithful to avoid activities that clashed with their beliefs it instead mostly amounted to a restatement of the Johnson Amendment, a rule from 1954 that makes churches’ tax-exempt status contingent upon them doing little political advocacy. 

But the order also instructed various government departments to consider amending a controversial regulation in the Affordable Care Act which require most employers to cover birth control in their insurance plans. “With this executive order, we are ending the attacks on your religious liberty!” proclaimed Mr Trump that day to a group of nuns from the Little Sisters of the Poor, a Catholic order that has waged war on the birth-control mandate since it was introduced in 2011. They...Continue reading

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The case for building a wall to keep Canadians out

AARON HEITKE, who heads the border patrol in Grand Forks, North Dakota, would like the federal government to send more money his way. Just over 2,000 agents patrol America’s northern border, compared with 17,000 down south. Mr Heitke wants some of them to come up and lend a hand. Heidi Heitkamp, a Democratic senator from North Dakota who co-authored the Northern Border Security Review Act, signed into law by then-President Barack Obama in December, would like more federal dollars for her state, too. The world’s longest land border, running through Montana’s mountains, four Great Lakes, glorious woods and wild prairies, is also one of the least patrolled and surveyed. Some see Donald Trump’s election as a chance to change that.

Between 2000 and 2010 taxpayers spent an estimated $90bn on the southern border, which included paying the salaries of guards, building fences, x-ray machines that can peer into cargo trains and trucks, tower-mounted cameras, ground sensors,...Continue reading

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Jared Kushner is alleged to have sought a hotline to Moscow

From back-channel to front lawn

AFFABLE and portly, Sergey Kislyak seems nevertheless to be an eminently forgettable man. Jeff Sessions, the attorney-general, forgot to mention his contacts with the Russian ambassador during his confirmation hearings. Michael Flynn, briefly Donald Trump’s national-security adviser, seems to have forgotten that he and Mr Kislyak discussed American sanctions, and paid with his job. Meanwhile Jared Kushner, the president’s son-in-law, omitted his own meeting with the ambassador at Trump Tower from his security-clearance form. Now the alleged substance of their conversation has brought fresh embarrassment to Mr Kushner and Mr Trump.

On May 26th the Washington Post reported that, in his encounter with Mr Kislyak in December, Mr Kushner proposed establishing a back-channel between Mr Trump’s team and the Kremlin. According to the Post, Mr Kushner suggested using equipment in...Continue reading

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Zbigniew Brzezinski feared Donald Trump would wreck valuable alliances

ZBIGNIEW BRZEZINSKI, who died on May 26th, was a child of war. The smashing of his Polish homeland to rubble, first by Nazi invaders and then by the remorseless, brutish violence of Soviet communism, jolted him from a life of privilege—he was the son of a diplomat and nobleman—to one of uncertain exile. After that early brush with destruction and collapse, it is small wonder that the word “constructive” was among his highest praise for a policy.

The former national security adviser to President Jimmy Carter did not get every call right: he strongly backed a failed attempt to rescue American hostages in Iran in 1980, for instance. But he was prescient about the hidden divisions and weaknesses of the Soviet bloc in Europe. He was right about the risks of invading Iraq in 2003. He will be remembered as among the most eloquent champions of an American-led international order that took a generous view of the superpower’s self-interest. He often sounded like a master-builder when...Continue reading

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A surge in activism could reinvigorate the Democratic Party

IT IS noon on a Wednesday so around 40 of Keith Rothfus’s constituents have gathered, as they do every week, outside the Republican congressman’s office in a northern suburb of Pittsburgh. Despite a light drizzle, they are in high spirits. Many wave stars-and-stripes flags or brandish placards daubed with slogans protesting against Donald Trump and Mr Rothfus, including especially the congressman’s weak-kneed refusal to meet them at a public event. “Investigate Russiagate!” reads one, “Real News, Fake President!” another. “Uncle Sam wants health care for all!” reads Carolyn Gibbs’s placard. A statistical analyst, who works for a commodities trader, the 55-year-old is wearing the Uncle Sam costume her teenage daughter bought for Halloween. “It’s important to me that our protest is joyful and expresses our patriotism,” she says.

Like many attendees at the weekly “Where’s Rothfus? Wednesday” protest, which was launched in February by a group of local women who...Continue reading

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South Florida tries to hold back the sea

Commute like Canute

TURRETS and terracotta tiles, palm trees and pillars adorn properties on La Gorce Island. Trucks roll by on their way to plots where homes are being torn down or built up. “There are a lot more people making improvements here than fleeing,” says Josh Gelfman, a developer. “None of my clients are that worried,” says David Pobiak, an estate agent who sells mansions to Americans, Brazilians and others. “Most people I deal with just want to be able to park their boat behind the property.”Yet the residents of this island towards the north of Miami Beach must go to ever-greater lengths to fight off the rising waters.

Sea levels continue to rise around the world at a rate of about one-eighth of an inch (0.3cm) each year. Quirks of geology, winds and ocean currents mean that different regions will suffer differently. By 2030, the average sea level in south-east Florida is likely to be six to ten inches above the mean level seen...Continue reading

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No lawmakers died in a meeting of the Texas legislature

A mess in Texas

THE Texas legislature has a constitutional duty to meet every other year and, it sometimes seems, to confirm that America’s second-most-populous state remains a land apart. The legislature adjourned on May 29th after a session that will probably be remembered as the one in which Matt Rinaldi, a Republican state representative, threatened to shoot one of his Democratic colleagues, Poncho Nevárez, in the face. It probably should be remembered that way, too, although Republicans have disputed this characterisation of the incident. In a statement Mr Rinaldi issued shortly afterwards, he confirmed that he told Mr Nevárez he would shoot him, albeit only in self-defence, after Mr Nevárez threatened to “get him”. He had, he added, sought police protection.

What is beyond dispute is that the threat was issued during the course of a scuffle that broke out on the floor of the Texas House. Mr Rinaldi overheard two other Democratic legislators,...Continue reading

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Hewlett-Packard Darkened by Microsoft's Cloud

For the second consecutive quarter, the enterprise technology half of Hewlett-Packard’s former empire has reported a sharp drop in server revenue. The main culprit, according to the company, is a “single Tier 1 customer” sharply reducing its spending. Several analysts believe that customer as Microsoft.

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A 30-year-old party leader is trying to remake Austria

Chancellor, maybe

TO UNDERSTAND Austria, visit the Karl-Marx-Hof. This vast municipal housing complex in Vienna is still riddled with bullet holes—not from fighting between Russians and Germans in 1945, but from a little-known civil war in 1934, when Austrian leftists and conservatives took up arms against each other. After the second world war, the country adopted a political system designed to prevent this from ever happening again: the Social Democrats (SPÖ) and the Christian Democrats (ÖVP) would rule together and divvy up public offices under a system known as Proporz.

For 43 of the past 72 years the two parties have run Austria jointly, in grand coalitions. Their networks politicise everything from school boards and business groups to social clubs and unions. The result is a uniquely corporatist country.

Today, however, that system is breaking up. Other parties—first the far-right FPÖ, then the Greens, then the liberal NEOS—have...Continue reading

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Donald Trump makes it hard for Europeans to keep their cool

IT WAS a friendly, local political event: a sweaty tent at a street festival in Munich on a Sunday afternoon. Angela Merkel arrived to a brass-band serenade and battled her way through the beery crowd to reach the podium. But her speech on May 28th made global news. Alluding to America and Britain, the chancellor said: “The times in which we could totally rely on others are to some extent over, as I have experienced in the past few days.” To prolonged cheers she added: “We Europeans must really take our fate into our own hands.”

This followed NATO and G7 summits at which Donald Trump offended European sensibilities. The president attacked the continent’s leaders for (mostly) failing to meet the alliance’s target for defence spending of 2% of GDP, and pointedly neglected to mention Article 5, NATO’s mutual-defence clause. In one meeting he reportedly called Germany “bad, very bad”, and threatened tariffs on the country’s car exports to America. Mrs Merkel was venting her...Continue reading

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Europe must seize the chance to fix the euro

PICK a note, any note. The bills of Europe’s single currency are adorned with handsome bridges, arches, vaults and aqueducts, testament to the glorious architectural history of the old continent. True, the constructions are a little lacking in character; the notes’ designers were told to depict generic examples rather than specific structures to avoid offending countries whose splendours might be overlooked. But they speak of strength, sturdiness and the confidence of what some used to believe might be the world’s next reserve currency.

The euro itself, though, remains a wobbly, half-built enterprise, desperately unprepared for the next shock. When Europe caught America’s flu after 2008, bond markets picked off the euro’s weakest members one by one. Greece, Portugal, Ireland and Spain were forced into bail-outs. Italy, the euro’s third largest economy, tottered. Emergency funds were created, the European Central Bank implied it would create unlimited quantities of cash if...Continue reading

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Who gets into more wars, kings or queens?

Russia was big, but she wanted it bigger

WOMEN were less likely than men to support the Vietnam war, the Gulf war, or the invasions of Afghanistan and Iraq. They commit far fewer murders. They are less likely to favour drone strikes. For scholars such as Steven Pinker, a psychologist, and Francis Fukuyama, a political scientist, these are grounds for thinking that a world run by women would be more peaceful.

But European history suggests otherwise, according to a working paper by political scientists Oeindrila Dube, of the University of Chicago, and S. P. Harish, of McGill University. They studied how often European rulers went to war between 1480 and 1913. Over 193 reigns, they found that states ruled by queens were 27% more likely to wage war than those ruled by kings.

This was not all the queens’ fault: men, seeing them as soft targets, tended to attack them. After Mary Tudor became queen of England in 1553, the Protestant reformer John Knox...Continue reading

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Montenegro completes NATO’s control of the northern Mediterranean

WHEN Donald Trump shoved Montenegro’s prime minister aside to get to the front of the pack at a NATO meeting on May 25th, a film of the incident went viral. But most people were interested in Mr Trump, not poor Dusko Markovic. For Mr Markovic the meeting was supposed to be a celebratory preparation for Montenegro’s formal accession to the alliance on June 5th. Instead the symbolic humiliation was seized on by those in the Balkan country who opposed joining. The Russian media, meanwhile, have been gloating.

In terms of muscle, Montenegro does add much to NATO’s strength. It has 1,950 military personnel, 13 helicopters, two frigates and three patrol ships. Its defence budget is €50m, or 1.7% of GDP. But its soldiers have taken part in NATO, European Union and UN operations, including the war in Afghanistan. Mr Trump hectors NATO’s leaders about the need to spend 2% of GDP on defence, but he still signed off on Montenegro’s accession.

Montenegro’s value has nothing to do with how many soldiers it has. Rather, its accession means that, apart from an insignificant strip of Bosnian coast, the entire northern shore of the Mediterranean from Portugal to the Syrian border belongs to NATO. The Bay of Kotor was a secure base for the Yugoslav and, before that, Austro-Hungarian navies. In 2013 Russia inquired about using Montenegrin facilities for its...Continue reading

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Emmanuel Macron is not the first to try to reform the French left

Emmanuel’s rock

ON A wooded bend of the Seine, as it winds its way downstream from Paris, sits the fine town of Conflans-Sainte-Honorine. Houseboats are moored at the stone quay. Halyards frap against masts. Container barges chug past on their way to the coast at Le Havre. The town’s embrace of the river that joins it both to France’s capital and to the port town in Normandy hints at another sort of connection, too. For it embodies an intellectual current that flows to the new president, Emmanuel Macron, as well as his prime minister, Edouard Philippe.

Conflans-Sainte-Honorine is best known as the place that launched Michel Rocard (pictured), a former Socialist prime minister, who was the town’s mayor in 1977-94. His ambition to create a moderate centre-left set him for years on a collision course with François Mitterrand, a former Socialist president, who was wedded to an anti-capitalist doctrine. Mitterrand won that battle, becoming president twice...Continue reading

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Buy the Bank Trading Dip

J.P. Morgan Chase and Bank of America may see a slight decline in second-quarter trading revenue, but investors shouldn’t panic.

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Why Joseph Kabila’s ambition endangers Congo

“LET’S march on the president’s palace and drive him out,” howled the speaker, and a couple of hundred supporters, packed into a sweaty courtyard at the headquarters of the Democratic Republic of Congo’s main opposition party, yelled their agreement. Outside, a contingent of police, heavily outnumbered, waited nervously. The march never happened. It would not have got anywhere near the president, and no one, for the moment, wants to risk a repeat of the violence last September, when police opened fire on crowds and a hundred or so people died. But the economy is tanking, civil war is raging again in the centre of the country, and patience is wearing thin with Congo’s dictatorial president, Joseph Kabila, whose final term in office expired five months ago.

Mr Kabila has misruled Congo for the past 17 years, after he took over from his father, who was shot by a bodyguard. The past few months have been particularly desperate. Congo depends on copper and cobalt, and to...Continue reading

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The return of the resource curse

WEARING a cowboy hat and holding two scrawny goats at the end of a tether, the farmer scowls when asked how business is going at Nyamata Market, a patch of dusty earth about 25km south of Kigali, Rwanda’s capital. “People have no money,” he grumbles, pointing at his unsold animals. As if to underscore the point one of the goats jets a stream of urine at your correspondent’s shoe. Rwanda’s economy, like many across Africa, has been hit by the twin blows of drought and low prices for minerals.

Growth in sub-Saharan Africa slumped to 1.4% last year, its slowest pace in two decades, reckons the IMF. Since the region’s population is growing at about twice that rate, this means that GDP per head fell for the first time in more than 20 years. Economies slowed in two-thirds of countries south of the Sahara.

A year earlier, cheaper oil helped speed growth in some countries. Nigeria and Angola, where the black stuff used to account for as much as 90% of exports, were walloped. But...Continue reading

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Syria’s new war millionaires

Life in Damascus goes on

AMID the ruins of Syria, Mohieddine Manfoush has carved out a kingdom built on cheese. An unremarkable man with 25 cows to his name before the conflict began, Mr Manfoush now has his own militia, a herd of 1,000 cattle and a company whose dairy products have become ubiquitous in Damascus.

For those with the right connections and an appetite for risk, the war has opened up lucrative sources of revenue. For Mr Manfoush, his new-found wealth is directly bound to the regime’s preferred tactic of siege warfare. This has proved effective at isolating, containing and strangling rebel redoubts into submission without consuming too much of the regime’s dwindling manpower. The sieges have generated lots of money, too.

Mr Manfoush’s cash cow has been the siege of Eastern Ghouta, a large rebel-held region east of Damascus. In mid-2013, regime forces surrounded the area, whose rich farmland supplied the capital with most of its...Continue reading

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Saudi Arabia allows concerts—even country music

Don’t get too excited

IT IS hardly surprising that Rachid and his friends had not heard of Toby Keith before seeing him perform. Mr Keith is an American country-music star who sings about drinking beer and chasing girls. Rachid and his pals live in Saudi Arabia, where that kind of thing is forbidden. So why did they go to his concert in Riyadh, the capital, last month? “I just wanted to see what was going on,” said Abdulaziz, another attendee.

A better question is: why was Mr Keith in Riyadh? His arrival coincided with a visit by Donald Trump. But the concert, which included Rabeh Saqer, a popular Saudi musician, is also part of a push to make the kingdom more fun. With cultural life restricted under the kingdom’s strict Islamic social code, so much so that even cinemas are banned, many Saudis head to places like Dubai for entertainment. The government wants to keep more of their money at home—and perhaps loosen things up a bit.

“What we...Continue reading

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There's a Paint Company to Own, But Akzo Nobel Isn't It

Akzo Nobel shareholders shouldn’t hesitate to sell. The Dutch paint group’s refusal to enter talks with U.S. peer PPG Industries has laid bare not just the board’s lack of commitment to owners’ interests but also the protection from shareholder pressure afforded by the company’s capital structure and Dutch law.

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Why Retailers Have More Debt Than Meets the Eye

Abercrombie is one of many retailers with net cash on its balance sheet but substantial lease obligations.

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Finding love in Lagos

LIFE in Lagos can be hard, even for a young, salaried professional. The long working hours, the endless traffic and the pressure to keep up appearances in a city that idolises wealth often leave people exhausted by the weekends, which are packed with lavish weddings and lengthy church services. They can also make it hard to find love.

Tinder, a dating app where users reject or select potential partners by swiping left or right, has not proved as popular in Lagos as it is with time-poor young people elsewhere. “Friends thought I was insane or looking to be murdered,” says a female lawyer. For those who dare, men mostly find “runs girls” (aka sugar babies) looking for rich boyfriends to buy them gifts, or outright prostitutes. Women find cheating husbands. “The first time I signed up…I saw three guys I knew who were married,” says Efua Oyofo, who runs the blog Dating While Nigerian.

However, many young women in Lagos want to be the “side chick” of a...Continue reading

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Yuan Rally Doesn't Have Far to Run

Chinese capital outflows have quietly gained steam again in recent weeks and a more hawkish-than-expected Fed could add fuel to the fire. China’s central bank is taking pre-emptive action.

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Baidu's Turn as a Bank Is Unwelcome

China’s biggest search engine has been selling risky investment products that could come back to bite it.

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A horrific attack in Afghanistan deepens Western dilemmas

EVEN for a city familiar with explosions, the power of the bomb that ripped through Kabul on May 31st was shocking. The device, hidden in a tanker truck, went off during rush hour in a crowded area near several foreign embassies. The blast shattered windows a mile away and sent clouds of black smoke swirling above the city. At least 90 people were killed and more than 460 wounded, making it one of deadliest attacks in the capital in the 16-year civil war.

Jan Ali Ghobar, who works for Roshan, a telecommunications company based nearby, was knocked unconscious: “When I came back, everything was dark, the ceiling had fallen down, our desk chairs, everything was crushed.” The German embassy was badly damaged; one of its Afghan guards was killed.

As The Economist went to press, no one had claimed responsibility for the blast. A spokesman for the Taliban denied that they were behind it. Islamic State militants have staged several attacks in Afghanistan in...Continue reading

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China's Debt Problem Moves Back to the Future

Chinese firms avoided bond defaults this spring by falling back on the old system of expensive shadow bank loans. That could spell trouble if inflation and profits start weakening later this year.

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What Is Essential to Make It in Smartphones

Andy Rubin’s new smartphone will need more than a sharp design to make a strong connection with buyers.

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