February 5-11, Finance and Economics: Oil, Inflation, Spanish Saving. Ole!

This blog is for you. You know who you are. You read "Leaders". You read "The Americas". You peruse "Lexington" and "Banyon". You probably get as far as "Bagehot", flip through the "Briefing", end up on "Finance and Economics" and then bam - done - this week's "The Economist" is cast away by your ink-stained fingers, tattered, wrinkled, rolled, and only half-loved. I'm with you. This week, you might have caught the articles on Somali piracy, US Health Care, and Egypt, but, you lazy bums, because you won't explore the nether regions of everybody's favorite hebdomadaire, you missed a few gems, and this blog will wrap them up nice and neatly for you - at least until the Economist makes me take the site down.*

This week is a doozy. For one thing, the Economist loves Germany, probably at the expense of the Spanish. Secondly, inflation seems to be a problem - so buy those beers now. Finally, never you fret about Egyptian democracy's effect on your SUV road trip. So - we have articles on:

• A fascinating analysis of how much oil exactly flows through the Suez (along with a cool map) and why concerns about the effects of political turmoil on oil supplies might be overblown.

• Everything you wanted to know, and probably forgot, about inflation
  
• More depressing news about America's housing market
• Look out - Savings and Loan trouble hits Spain's Cajas?
  
• Felonious larceny of carbon credits- a doozy of a heist
  
• ...and one for the "did you know" category - Citi now owns the Beatles via EMI. Shocking.
• Let's not forget the Economics focus piece -a big salute to the German economy. (continuing The Economist's ill-concealed love affair with the Teutons.)
  

This Week's Fun Economic Facts:

• Egypt exports very little oil, and actually imports some, but 4% of the global supply transits the Suez canal.
• OECD oil inventories currently cover up to 59 days of consumption
• The most recent war in Iraq only disrupted global oil supplies for three weeks
• Inflation in India, nearly 10%, is still below last year's high
• The U.S. federal government currently guarantees 85% or more of newly issued resident mortgages
• Of the $50 billion allocated to the Home Affordable Modification Program (part of TARP) in 2009, only one billion has been spent, representing modifications to only 522,000 mortgages
• Home ownership in the U.S. fell to 66.5%, the lowest since 1998
• For the first time eastern Germany has a lower unemployment rate than California.

Let's do a quick run through after the break (don't abandon me now!):

A Response to Lexington and The Economist on Egypt...

Although I am intent on getting something written - today - on the most recent issue's coverage of business, finance, and economics, I felt I had to respond to two recent articles. One, Lexington's post "Was George Bush Right?" and the other, the cover story about the uprising in Egypt.

Let me state from the outset that I would never presume to suggest I know anything about the Middle East, or Egypt in particular. But I am particularly sensitive to a need to be humble about the state of affairs in highly complex societies and I also think we need to be cautious about rushing out to assess the merits or deficiencies of "democracy promotion" without considering the context of a policy.

Let's start by challenging Lexington's claim that "Mr Bush was indeed a far more active champion of democracy than Mr Obama has been." Is that true? Lexington suggests that Bush "nagged, scolded, bribed and bullied its allies towards greater democracy." and provides as evidence that "The Americans leant on Egypt to hold more open elections in 2005, and in 2006 they talked an astonished Israel into letting Hamas contest Palestinian elections in the occupied territories. Even the Saudis were prevailed on to hold some (men only) local elections". But let's deconstruct this. What were the constraints on the democracy promotion agenda? Even if the US nominally encouraged more "open elections", were they not, as their predecessors, simultaneously providing tremendous amounts of foreign assistance to President Mubarrak and gladly using the services of his intelligence apparatus to detain and torture terrorism suspects? Certainly Hamas did contest elections, and in fact prevailed in parliamentary elections in 2006, but the Bush administration responded by cutting aid programs to Palestians, not by celebrating the democratic process. This is not to suggest that the Bush administration should have forgone its strategic interests in Egypt or that they did not have the prerogative to use aid as leverage to persuade Hamas to moderate its positions. But to suggest that the "freedom agenda" took precedence at the cost of security, which was paramount in the administration, ignores reality, much in the same way that some suggest that the Bush administration changed course of aid programs, spending a greater proportion of development assistance in countries where the policies were more apt to encourage development. We know for a fact that this did not really happen. (Shameless self promotion.)

More After the Break: