Economist

Leaders in driverless cars

Thu, 01 Oct 2015 14:46:08 +0000

THE inquiring progressive mind, scanning Europe for new thinking on the left, would not instinctively turn to France. No eager throngs gather for debates at the headquarters of the Parti Socialiste. No French intellectual review churns out required reading on how to remodel social democracy for the 21st century. If anything, under President François Hollande, France seems to be stuck chasing old ghosts and replaying its own history—a modern remake of the 1983 U-turn, when François Mitterrand jettisoned hyper-taxation and accepted the free market.

Yet the election in Britain of Jeremy Corbyn, Labour’s new retro leader, has the disconcerting consequence of making French socialism look like a bold step forward. Not that the Socialist Party machine itself has changed much. Its sectarian cliques still wage yesterday’s wars over platters of fruits de mer at seaside conferences. And the left’s intellectuals, including Thomas Piketty, an economist now on occasional loan to Mr Corbyn, remain preoccupied with denouncing austerity and modelling a more progressive tax system. Yet peer into a tiny corner of the...

The continuity candidate

Thu, 01 Oct 2015 14:46:08 +0000

AFTER the excitements of the previous week, when Switzerland’s attorney-general announced that FIFA’s limpet-like president, Sepp Blatter, was under formal investigation for two instances of “criminal mismanagement and misappropriation”, it has been a quiet few days at the Zurich headquarters of football’s world governing body. Passing almost unnoticed was the decision on September 29th by FIFA’s hard-working ethics committee to ban a Blatter crony, Jack Warner, a former vice-president of the organisation, from the sport for life.

Nobody, including Mr Warner, much cared. He has other things to worry about, not least fighting extradition from his native Trinidad to the United States. There he is under investigation by the Department of Justice for being a central figure in the corruption that has been endemic at FIFA for at least the past two decades. Mr Warner is at the heart of one of the charges levelled at Mr Blatter: the allegation that in 2005 FIFA sold the Caribbean television rights to the Caribbean Football Union controlled by Mr Warner for $600,000, only for the rights to be sold on to a Jamaican broadcaster for $20m through a Warner-...

A new spectacle for the masses

Thu, 01 Oct 2015 14:46:08 +0000

IF HIS intent was to draw attention to his military muscle, he certainly succeeded. Vladimir Putin, Russia’s president, became the first leader in the Kremlin since Leonid Brezhnev, who invaded Afghanistan in 1979, to send military aircraft on bombing missions outside the territory of the former Soviet Union. On September 30th, Russian jets began a targeted campaign in parts of Syria held by rebels in order to prop up the beleaguered regime of Bashar al-Assad, a Russian client.

Not since the Boxer rebellion in 1900 have Russian forces fought in such proximity to American ones. In Kosovo they came close. In Syria they share the same skies: America is attacking the jihadists of Islamic State (IS); Russia says it wants to strike IS but has in fact started by attacking other Sunni rebels (including some who have received American weapons) who pose a more direct threat to Mr Assad.

Mr Putin has ruled out the use of ground forces in Syria, for fear of awakening painful memories of the Soviet debacle in Afghanistan. But by deploying jets and air-defence systems, Russia is complicating Western operations in Syria. France this month joined America in the...

The trouble with Saxony

Thu, 01 Oct 2015 14:46:08 +0000

SAXONS have reason to be proud as they celebrate the 25th anniversary of German reunification on October 3rd. They were the first East Germans to take to the streets in 1989, shouting “Wir sind das Volk” (“We are the people”), a cry for freedom from their communist rulers. Within months their peaceful protest had spread across the country and toppled the Berlin Wall. In less than a year East Germany was dissolved and Saxony became one of the unified country’s 16 federal states.

Today Saxons are associated with a different cause. Members of a xenophobic movement calling itself PEGIDA, short for “Patriotic Europeans against the Islamisation of the Occident”, have been marching through the state capital of Dresden every Monday for the past year. Last week they numbered 10,000. Only 0.1% of Saxony’s population is Muslim (the German average is about 5%), and foreigners in general are rare. Yet the demonstrators are once again shouting “Wir sind das Volk”, this time with an ominous ethnic ring.

Some Saxons do more than shout. While other Germans welcomed Arab, African and other refugees pouring into the country this summer with sweets and...

No good deed goes unclaimed

Thu, 01 Oct 2015 14:46:08 +0000

FROM the Bodrum peninsula in Turkey the Greek island of Kos is only four kilometres (2.5 miles) away. European tourists can make the 45-minute crossing comfortably for $19, while those fleeing evil in Syria and elsewhere must pay smugglers a minimum of $1,000 for a perilous night journey in a crowded boat.

Turkey generously opened its borders after the Syrian civil war erupted in 2011. Nearly two million refugees are currently registered in the country, of which about 200,000 are housed in official camps, mostly in the south. A growing number are seeking a better life in the EU and are crossing over to Greece by the thousand every day, causing severe anxiety in parts of Europe and creating tensions along borders farther north.

Not unreasonably EU leaders have turned to the Turkish government for help to stem the flow of migrants. President Recep Tayyip Erdogan will visit Brussels in early October to discuss security issues including borders. But his government has rejected an EU offer to reassign €1 billion ($1.12 billion) in aid for refugees. It also opposes opening new camps or setting up processing stations.

Instead Turkey calls for the...

An offer they couldn’t refuse

Thu, 01 Oct 2015 14:46:08 +0000

A growth industry

CONFRONTED by a man in a mask brandishing a pistol, the owner of a jewellery shop in Battipaglia, south of Naples, quickly surrendered the afternoon’s takings of around €700. Police later discovered that the pistol was a replica, and the 49-year-old thief, who has not been named, went straight to a post office to pay the money into his overdrawn account.

His robbery was driven by an affliction that has become increasingly common in Italy in the past decade: addiction to gambling. The thief, who had no previous criminal record, lost all his family’s money and more on scratch-cards and gambling machines.

According to the Global Betting and Gaming Consultancy, Italians lost €17.2 billion last year, almost three times more than in 2001. They overtook Spaniards as southern Europe’s most ardent punters in 2005. The impact of the financial crisis was not felt until 2011, when amounts staked and lost declined modestly. Italy today prints a fifth of the world’s scratch cards and hosts a third of its video lottery terminals.

The gambling boom is linked to the Italian government’s difficult...

Red scare

Thu, 01 Oct 2015 14:46:08 +0000

ALONG the muddy banks of the River Severn in Newport, Wales, sits the “mega-shredder”, an industrial monster owned by one of the world’s biggest metal-recycling firms, Sims Metal Management. It is one of the planet’s biggest consumers of metals—literally. Every hour the 560-tonne machine gobbles up more than half its weight in cars, washing machines and other appliances, making the earth shudder as it grinds them to pieces. It then uses magnets to separate the ferrous from the non-ferrous bits, spitting out small nuggets of steel, copper and other scrap. These are shipped to smelters in Asia, where they are mixed with ore and re-blasted into the rods and sheets that feed that other great devourer of metals, China.

A decade ago, when the machine was installed, China’s hunger for scrap seemed insatiable. Plumbers the world over developed a nifty side business as copper merchants. Theft was so rife that Britain banned cash payments for scrap metal. But in the first half of 2015 exports to China were half the level of 2012, when demand was at its peak, says Ian Hetherington of the British Metals Recycling Association. Scrap dealers’ hunt for customers...

Muddled, yet united

Thu, 01 Oct 2015 14:46:02 +0000

SOME of its leaders are in jail. Others are banned from running for office. All are up against an autocratic government with formidable resources. Yet in legislative elections scheduled for December 6th, Venezuela’s opposition has its best chance of winning a national victory since 1998, when the late Hugo Chávez, a charismatic populist, began his career of authoritarian misrule. The public is enraged by shortages of everything from poultry to pharmaceuticals, by inflation approaching 200% and by rampant corruption and crime. Recent polls find that 70% of respondents expressing a preference will vote for opponents of the Socialist government led by Nicolás Maduro, Chávez’s hand-picked successor.

The prospective winner, the Democratic Unity (MUD) alliance, is a political mish-mash. Formed in 2008, it houses ideologies from Marxism to free-market conservatism, united only by a shared loathing of the government. The MUD’s most prominent leaders are Leopoldo López, a former mayor who was sentenced last month to nearly 14 years in prison on trumped-up charges of inciting violence, and Henrique Capriles, a state governor and former presidential candidate...

The man who would be king

Thu, 01 Oct 2015 14:46:02 +0000

NEARLY a decade has passed since Evo Morales took office as Bolivia’s first indigenous president. During his re-election campaign in 2014, he promised not to seek another term after this one. But the thin Andean air may be distorting lawmakers’ memories. During an all-night session on September 26th, Mr Morales’s legislative super-majority passed a reform that would allow him to run for another five-year term, which would expire in 2025.

If implemented, the change will reinforce a strong trend towards looser term limits, both within Bolivia and in Latin America overall (see table). Under the country’s constitution of 2009, Mr Morales should by rights have been ineligible to run last year. However, the government argued that his first term should not count since it occurred before the new constitution was adopted. Bolivia’s pliant Constitutional Court, which the opposition accuses of being lackeys of the president, duly accepted this logic.

On its own, the new law does not pave the way for the president to spend two decades in office. The proposal will now go to a referendum, currently pencilled in for February. Álvaro...

Hair apparent

Thu, 01 Oct 2015 14:46:02 +0000

When Justin Trudeau, the leader of Canada’s Liberal Party, left a campaign rally last month, he received rock-star treatment. The crowd lay in wait, eager to shake his hand, snap a selfie, score an autograph or just get him to hold their children. Even as he reached his bus, people continued to call out “Justin!”

Mr Trudeau has been in the public eye since he was born on Christmas Day 1971 to a Liberal prime minister, Pierre Trudeau, and his much younger wife. Although the centrist Liberals are now Canada’s third party, Mr Trudeau fils—the country’s answer to the late John F. Kennedy junior—enjoys greater name recognition than Thomas Mulcair, whose leftist New Democrats (NDP) are the official opposition. Yet his fame is also a handicap. The centre-right Conservatives, led by Stephen Harper, mock his “nice hair”, and say he “says things without thinking them through”.

Like all good political ads, it holds a grain of truth. Mr Trudeau is indeed relatively inexperienced. Before he became an MP for part of Montreal in 2008, he taught maths and French in a secondary school. He has been prone to gaffes: in 2013 he...

Dilma in the vortex

Thu, 01 Oct 2015 14:46:02 +0000

JUST as animals can smell fear in humans, financial markets pounce when they sniff government paralysis and division. So it was with Brazil in late September. In a fortnight the real plunged from 3.8 to the dollar to 4.2. Only when the Central Bank stepped in, offering dollars, was a semblance of calm restored. The immediate reason for the mayhem was the decision last month by Standard & Poor’s, a rating agency, to downgrade Brazil’s credit rating from investment grade to junk. That in turn was the inevitable result of the government’s fiscal adjustment coming apart at the seams.

After Dilma Rousseff narrowly won a second term as Brazil’s president a year ago, she signalled a change of economic course. Loose fiscal policy had pushed public debt to 60% of GDP in her first term. So she brought in Joaquim Levy, a fiscal hawk, as finance minister. He set a target of a primary surplus (ie, before interest payments) of 1.2% for this year (compared with a primary deficit of 0.6% in 2014) and of 2% next year.

Mr Levy said he could achieve this merely by trimming discretionary federal spending (on things like student and...

The vultures circle

Thu, 01 Oct 2015 14:46:02 +0000

THERE is no shortage of bad omens for the global economy at the moment. To name a few: plunging commodity prices, wobbly equity markets, weak world trade, reduced profit forecasts for American companies and lower long-term inflation expectations. In recent weeks, a new one has joined the list: rising corporate-bond spreads.

These spreads—the difference between the interest rates paid by governments and blue-chip companies and those paid by riskier borrowers—reflect the risk of default. Rising spreads imply that investors are getting antsier about being repaid. That anxiety may well stem from worry about the economy.

Spiking credit spreads have often been a harbinger of recession (see chart). As David Ranson of Wainwright Economics argues: “Yield spreads represent a market assessment of the strength of the economy and are not affected by any of the technical measurement problems that plague the GDP figures.”

As an indicator, credit is clearly not entirely reliable: a rise in spreads in 2012 was not followed by a downturn. As yet there is no sign of a rise in the default rate on high-yield debt: it dropped to 2.3...

Money for everything

Thu, 01 Oct 2015 14:46:02 +0000

CASH has many enemies. Banks have added contactless technology to their credit and debit cards; apps like Uber use pre-stored details for transactions and services such as Venmo allow people to make transfers to one another using only mobile phones. Peter Bofinger of the German Council of Economic Experts says cash should be phased out to save the money spent printing and distributing it, and to eliminate the annoying queues generated by shoppers who insist on using it. Lawmen dislike it, since it is an enticingly anonymous store of value for criminals. Now even central bankers are getting in on the act: the chief economist of the Bank of England has proposed eliminating cash as part of a plan to permit negative interest rates. (Storing bank notes under the mattress is an easy way of thwarting a bank intent on charging negative rates.) Yet for all its detractors, cash is puzzlingly resilient.

Economists had long assumed that as nations grow richer and their financial infrastructure becomes more elaborate, the amount of cash in circulation would first grow rapidly and then begin to slow, as alternatives gained traction. Eventually,...

Upwardly mobile

Thu, 01 Oct 2015 14:46:02 +0000

WHEN the bottom finally fell out of America’s housing market in 2006, it triggered the worst global recession since the 1930s. But rising house prices need not spell disaster. The Economist’s latest round-up of house prices across the globe shows that prices have risen over the past year in 21 of the 26 economies we track, at a median pace of 4.7% (see table). Not every rise is alike, however.

America is still—just—in the category of countries where the housing market remains in recovery. House prices there increased by 4.7% in the 12 months to July, according to the Case-Shiller national index. Prices have now risen by 25% from their 2011 trough, but still remain 7% from their 2007 peak. The Economist measures national affordability by comparing prices to the long-run average of their relationship with rents and income. On this basis, we reckon house prices in America are broadly at their fair value.

Not for long, perhaps. Activity is buoyant: sales of existing homes increased by 6.2% on the previous year. With 30-year fixed-rate mortgages at...

Under the cosh

Thu, 01 Oct 2015 14:46:02 +0000

BEING an emerging-market fund manager used to be fun. They enjoyed trips to exotic locations, faced less competition than those managing American or European equities and were so flush with cash that some funds could turn investors away. Today, emerging-market investing is less of a jaunt. The globetrotting that money managers do now is mainly to beg nervous investors not to sell up.

Their entreaties are falling on deaf ears. In August alone investors pulled $10 billion from bond funds and $24 billion from various types of equity funds, according to the Institute of International Finance. Add in the effect of falling markets and the stock of investment in emerging-market exchange-traded funds (ETFs) and mutual funds has fallen from $1.37 trillion in December to $1.17 trillion now, the lowest since June 2012. Money is being carted away from the emerging world almost as fast as during the “taper tantrum” of 2013. Brazil, China, Indonesia and Turkey have suffered the largest outflows, largely due to continuing doubts over their growth prospects and the stability of their currencies. Faced with pervasive uncertainty, investment managers of all stripes...

It’s getting hotter

Thu, 01 Oct 2015 14:46:02 +0000

SAVING the planet is now a matter of a few clicks—at least on a small scale. On September 22nd the UN’s Climate Change Secretariat launched Climate Neutral Now, a website that estimates an individual’s carbon footprint based on whereabouts, recycling habits, energy use and so on. Offsetting any resulting guilt is easy: the site takes donations to fund clean development projects. Your correspondent paid $24 to a facility capturing methane from pig dung to cover the carbon-dioxide emissions she had caused during the past year.

The initiative is one of many intended to spur action on greenhouse-gas emissions in the run-up to climate talks in Paris at the end of the year. Some seem quite successful: in recent weeks around 2,000 individuals and 400 organisations have committed to stop investing in firms that produce fossil fuels. More important, countries have responded to a shift in climate-change policy after the failure of negotiations in Copenhagen in 2009: rather than trying to agree on mandatory emissions reductions, they were asked to say by October 1st what they were willing to do.

America’s Clean Power Plan, announced in August,...

Good in parts

Thu, 01 Oct 2015 14:46:02 +0000

MODERN cars are packed with safety features designed to withstand horrifying pile-ups. The emissions-cheating scandal at Volkswagen (VW) will show whether carmakers are similarly resilient. VW’s finances and reputation will certainly suffer after its attempts to fool American regulators about the levels of nitrogen oxides (NOx) emitted by its diesel cars. But the effects will also be felt by an industry that was already facing huge costs to keep up with ever-tougher rules on emissions and fuel efficiency, while suffering from chronic overcapacity and poor returns.

The extent of VW’s cheating is becoming clearer, as is the mounting bill for the damage. On top of the costs of fixing the 11m cars affected, for which the firm has set aside €6.5 billion ($7.3 billion), VW may be fined billions of dollars in America and suffer a grave blow to its business there. Lawyers are preparing class-action suits. Some executives may face prosecution. That adds up to a daunting in-tray for the new boss, Matthias Müller, who has replaced Martin Winterkorn.

However, the scandal will also mean big repair bills for VW’s rivals. One ramification is that...

Lessons learned

Thu, 01 Oct 2015 14:46:02 +0000

THE auctioning of blocks of oil and gas fields, both onshore and in the Gulf of Mexico, is designed to bring foreign investment into Mexico’s decrepit energy industry as part of President Enrique Peña Nieto’s flagship reforms. The first of the “Round One” auctions, which took place in July, was a flop, with only two of the 14 blocks finding buyers. But the second, on September 30th, went a lot better.

Three of the five shallow-water production blocks on offer were awarded, thanks to bids far above the government’s stated minimums. Nine of the 14 companies and consortia that had qualified put in bids, which was also an improvement on last time. The two biggest, Shell and Chevron, stayed away, but that Eni of Italy was awarded the first block was a welcome sign of faith from one of the world’s energy majors.

Changes to the contracts and to the running of the auction showed how the state bodies involved had learned from earlier missteps. The government said in advance what minimum share of a field’s production it expected successful bidders to agree to give it, rather than revealing this after the auction. Last time, bids for three blocks were rejected for...

Warning light

Thu, 01 Oct 2015 14:46:02 +0000

VOLKSWAGEN doesn’t just make cars. Its enormous lending arm also helps customers to pay for them. With €164 billion ($184 billion) of assets, this is a big business for Germany’s national champion. Others do it too: in all, the finance arms of the world’s top ten carmakers have almost $900 billion of assets on their books. Four firms—VW, BMW, Daimler and Renault—account for half of the $350 billion of debt on the consolidated balance-sheets of carmakers that needs to be refinanced this year. All four of these diesel-focused European carmakers have seen the cost of insuring their debt against default rise sharply since VW’s misdeeds were made public earlier this month.

Loans to motorists are fairly short-term, and cars can be repossessed if drivers stop making payments. So this is a relatively low-risk form of lending. But the carmakers are highly dependent on using finance deals to drive sales—VW financed a quarter of the 10m or so vehicles it delivered worldwide last year.

The risk now is that worries about the cost of cleaning up the emissions scandal trigger a cash squeeze. VW is most at risk. It has €67 billion...

Capitalism and its discontents

Thu, 01 Oct 2015 14:46:02 +0000

DAVE SPART has been a stalwart of Private Eye, a British satirical magazine, since the 1970s. The bearded Bolshevik has never wavered in his enthusiasm for denouncing capitalism (“totally sickening”). But in recent years the Eye’s editors gave their fictional columnist progressively less space as the left made its peace with free markets and consumerism. Now, Mr Spart is back—not only on the pages of Private Eye but in the corridors of power. Britain’s main opposition Labour Party this week held its first conference under a new, hard-left leader, Jeremy Corbyn. In Greece and Spain new left-wing parties have emerged. Greece’s Syriza has come out on top in two successive elections and Spain’s Podemos is set to make big advances in December’s general election. In the United States, Bernie Sanders, a self-described independent socialist, is making a spirited run for the Democratic nomination. And in the Vatican Pope Francis denounces the “invisible tyranny of the market” and recommends “returning the economy to the service of human beings”.

Why is anti-capitalism gaining ground?...

A rig too far

Thu, 01 Oct 2015 14:46:02 +0000

Putting the Chukchi Sea on ice, again

OIL companies have a proud history of digging holes in inaccessible places and producing gushers of money. But in the Chukchi Sea, in the Alaskan Arctic, Shell has poured $7 billion into a single 6,800-foot exploratory well, making it possibly the most expensive hole yet drilled, only to admit this week that it had not found enough oil and gas to make further exploration worthwhile.

That was a big climbdown for a company that had spent seven years since acquiring the Chukchi licenses in 2008 in a highly public, drawn-out battle to drill in the Arctic. The decision boiled down to costs, financial and reputational. Most big oil firms face similar pressures. Some will take a lesson from Shell and put their Arctic plans on hold, though Eni, a big Italian oil firm, is vowing to press ahead with its efforts to drill in the Norwegian Arctic.

As the oil price has fallen by more than half over the past year, the economics of drilling in deep and treacherous waters have worsened considerably. Though Shell had sought to play down the dangers of its Chukchi conquest, observers long...

Snap, flip and crackle

Thu, 01 Oct 2015 14:46:02 +0000

NARENDRA MODI, India’s technophile prime minister, this week spent a good part of his visit to America, the second in a year, hobnobbing with Silicon Valley’s great-and-good. India has long been a supplier of talent to America’s tech firms. Its business-process outsourcing firms are a vital source of export earnings. But for years India has been an untapped market for consumer-facing technology firms. That is now changing. The rise of mobile-internet access has sparked interest in the potential of e-commerce in India. Bricks-and-mortar retailing is very fragmented. A trip to the mall can be an ordeal because of congested roads. In such difficult terrain, e-commerce may easily blossom.

Two home-grown outfits, Flipkart and Snapdeal, are vying to be the dominant player. Flipkart has the advantage of starting first. It was founded in 2007 by Sachin Bansal and Binny Bansal, two software engineers who had worked at Amazon. The head start gave Flipkart time to build its own distribution arm and to establish a good name for service. Flipkart pioneered a cash-on-delivery service for the majority of Indians who do not use payment cards.

Snapdeal began in 2010 as...

Not twilight, but sunrise

Thu, 01 Oct 2015 14:46:02 +0000

This galaxy ain’t big enough for the five of us

ESSEN is not one of Germany’s better-known cities. But for the world’s growing band of board-game devotees, it is paradise. Each October it plays host to Internationale Spieltage, or Spiel, a board-game convention that is half fan-club gathering, half trade show—and, alongside America’s Gen Con, one of the biggest gaming festivals in the world.

This year the organisers expect more than 160,000 visits over the festival’s four days. Attenders will be able to watch and play more than 850 board, card and role-playing games, including a much-anticipated board-game version of “Magic: The Gathering”, a highly popular card game launched in 1993 in which players take on the role of duelling wizards. The whole thing will be capped off with the largest contest yet seen of “The Settlers of Catan”, in which 1,000 people will compete to colonise a fictional wilderness.

The market for such “hobby games” is booming. ICv2, a consulting firm, reckons it is worth $880m a year in America and Canada alone. “We’ve seen double-digit annual growth for the past half-decade,” says...

Selling the farm

Thu, 01 Oct 2015 14:46:02 +0000

THE bare expanse of Anna Creek cattle station (as Australians call ranches) belies its strategic attraction to investors. Straddling the river plains of the state of South Australia, and reputed to be the world’s biggest cattle ranch by area, Anna Creek belongs to an empire of ten stations that Sidney Kidman, the “cattle king”, started in 1899 (see map). Now, 116 years later, his descendants have put their inheritance on the market. The sale of S. Kidman & Co, due by the end of the year, has touched raw nerves over foreign investment, as Chinese and other overseas contenders circle a company that many Australians associate with their frontier heritage.

The interest of would-be buyers is understandable. The Kidman herd of almost 200,000 cattle sprawls across a swathe of the outback about three-quarters the size of England, making it Australia’s biggest private landholding. Australia is the world’s biggest beef...

Ben Carson, false idol

Thu, 01 Oct 2015 14:46:02 +0000

AMERICA is having a Ben Carson moment. In July half of all Republicans told pollsters they had no clear sense of Dr Carson, a 64-year-old retired brain surgeon. Now he has surged to the front of the field of Republican presidential hopefuls. A recent poll put him within a percentage point of Donald Trump, the raucous property magnate who dominated politics all summer.

Dr Carson is not raucous. Softly-spoken, even drowsy, he shares Mr Trump’s disdain for conventional politics and his impatience with the detail of policy. Like his rival he presents himself as a providential outsider, entering the arena to save a great nation in peril. But whereas Mr Trump specialises in finger-jabbing, red-faced theatrics, Dr Carson offers a surgeon’s lofty calm.

Both men’s campaigns are built around striking life stories. Mr Trump, born into wealth and obsessed with success, promises to turn ordinary folk into “winners”. Dr Carson was brought up by a black single mother in Detroit. Hot-headed as well as poor, he nearly killed a teenage rival before finding God and his medical calling. He has long been hailed in schools and inner-city churches as a role...

Cruel and increasingly unusual

Thu, 01 Oct 2015 14:46:02 +0000

IN THE hours before her execution, Kelly Gissendaner observed the ghoulish regimen of the condemned. She thanked her lawyers. She had a physical check-up, to confirm she was in a fit condition to die. She ate a final meal that included two Whoppers with cheese and ice cream. She told her three children, whose father she conspired to murder, that she loved them.

All this took place on her second execution date. On the first, bad weather made the trip to Georgia’s lethal-injection chamber too risky. On this second occasion, in March, Ms Gissendaner was waiting in an anteroom to death when the procedure was delayed, then rescheduled, then put off indefinitely. Her third death date was set for September 29th and carried out shortly after midnight, one of three executions planned in America this week.

Another, that of Richard Glossip, who was due to be executed in Oklahoma the next day, was dramatically postponed at the last minute. His conviction in the murder of a motel-owner in 1997 rested largely on the shaky evidence of a man who performed the killing, and who avoided a death sentence by blaming Mr Glossip; his supporters maintain...

The heirs of Al Capone

Thu, 01 Oct 2015 14:46:02 +0000

IN “Breaking Bad” a high-school chemistry teacher from Albuquerque, New Mexico, sets up a crystal-meth lab to pay his medical bills. The television series, though entertaining, was unrealistic: meth labs are relatively rare in the American south-west. Although meth-usage rates are reported to be highest in the West, states in the Bible belt have the most meth labs. A survey in 2010 noted that counties containing meth labs tend to be disproportionately poor, white and evangelical.

Those same communities also happen to be the ones with stiffest restrictions on the sale of alcohol. When Prohibition ended in 1933, local governments began implementing their own bans on alcohol sales, many of which remain to this day. Fifty-three of Kentucky’s 120 counties have some sort of restriction on the sale of alcohol, while another 31 ban its sale altogether. One question posed by social scientists is whether alcohol is a complement to, or a substitute for, drugs. A new paper by Jose Fernandez, Stephan Gohmann and Joshua Pinkston of the University of Louisville claims the latter, suggesting that lifting the ban on alcohol would lead to a drop in...

The lowdown

Thu, 01 Oct 2015 14:46:02 +0000

INFLATION has lingered beneath the Federal Reserve’s 2% target for nearly as long as the goal, set in January 2012, has existed. Lately, the misses have been whopping. Data released on September 28th showed that prices have risen by only 0.3% over the past year, according to the Fed’s preferred measure. Conventional wisdom says this shortfall has been caused by one-off factors; chiefly, tumbling oil and commodities prices. For months, the Fed has said that prices will pep up once these effects dissipate. Could it be wrong?

Conventional wisdom is right, up to a point. Core inflation, which excludes fuel and food prices, is a healthier 1.3%. Yet this is still too low. In a speech on September 24th Janet Yellen, the Fed’s chairman, said a strong dollar—another one-off factor—was partly to blame. The greenback is 15% cheaper than a year ago on a trade-weighted basis. This has made imports cheaper and kept costs down for firms that rely on imported parts. If Ms Yellen is right, and if the dollar does not rise further, core inflation should rebound in 2016, with the headline rate not far behind.

Yet not everyone is convinced. A...

Gavels ready

Thu, 01 Oct 2015 14:46:02 +0000

AFTER springtime rulings friendly to gay rights and Obamacare, the Supreme Court is likely to swing back to the right when the justices dust off their robes and return to work on October 5th. Of the roughly three dozen cases they have already agreed to hear in their new term, as well as a few that seem destined for the docket, a handful could shake America’s political landscape.

A blow to public-sector unions looms in Friedrichs v California Teachers Association. The Centre for Individual Rights, a libertarian law firm, is representing ten teachers in California who object to the union fees they must pay. No one can be forced to join a union, but the Supreme Court ruled in 1977 that teachers, police officers and other public employees can be compelled to pay a “fair share” fee equivalent to membership dues. The justices reasoned then that since unions negotiate for benefits on behalf of a whole sector, such a charge prevents those who refuse to join a union from free-riding on those who do.

But the teachers say these fees violate their freedom of speech. In their brief to the justices, Thomas Jefferson plays a starring role: “To...

Not quite fireproof

Thu, 01 Oct 2015 14:46:02 +0000

Front-runner, backstage

LIKE most residents of Eastside in Charleston, a poor, mostly black, quarter of the South Carolinian port-city, Joe Watson, a grocer with strong political views, backed Hillary Clinton in the 2008 Democratic primary contest. At least, he did until the news from Iowa and New Hampshire suggested Barack Obama could actually win the thing, at which point he, and millions of other black voters across the South, abruptly ditched Mrs Clinton. But now, he says, raising his eyes from the Bible he keeps open on the counter of Mary’s Sweet Shop, he is for her again.

“Women got that focus, got that desire to help people, got that greater fellowship than us men,” he muses, pointing the interviewer to the polished stool he reserves for political talk. He likes her chances, too. After Mr Obama secured the Democratic nomination, Mr Watson rounded up 300 new voters for him; “They were so joyous in their cause, and it can be that way for Hillary, too.”

There is, in fact, little levity around Mrs Clinton’s campaign. Her lead over the Democratic field has shrivelled in recent weeks, as she has failed to...