3-8 Over-regulated America

http://www.economist.com/printedition/2012-02-18

Japanese manufacturing

From summit to plummet

Once global leaders, Japanese electronics firms are tumbling

Why I picked up the article

Do you agree with the article? Certainly, Japanese electronics companies don’t seem so lively today but we have experienced their attractive products for decades since we were born. I think it is temporary and they can reach the summit again if they can change.

Discussion topics

(1) Japanese electronics industry

A former executive at a electronics firm said in the article“Everyone knows we need to change, and no one can make the changes”. Who do you think can change and how?

(2) Competition and monopoly in the market

Should the government facilitate M&A that sometimes cause a monopoly of the market? Or should it encourage players to compete with each other making fairness of the market?

Summary

Japanese electronics firms are loosing their revenues and shares. Meanwhile America’s Apple and South Korea’s Samsung enjoys their prosperity. Since 2000, the big five Japanese electronics firms have lost two-third of their values. Not because of high costs, strong yen nor tax changes but the sickness runs deeper. Too many Japanese firms make similar things that cause inefficiency of the market and waste huge amount of capital.

※The story of NEC

NEC was the world biggest IT company but it failed to adapt changing world. Its shares have fallen by 90% and they forecast a \100 billion loss and would have to cut 9% of their workforce.

(1) Since foundation in 1899, its main customer was the state so NEC’s own culture has long been bureaucratic. (2) A business for NTT was a cosy arrangement for NEC but it was difficult to modify the specific technology for other client and it did not decide drastic reforms. (3) It also had little experience to make any business outside Japan. (4) Its brilliant technology was used to build the world fastest supercomputer and satellite network but these market were too small to make certain profit. 

3-7 How to set Syria free

http://www.economist.com/printedition/2012-02-11

Lexington

Obama’s “war on religion”

Why I picked up the article

“War on terror”, ”war on finance”and the next is ”war on religion”. American people like to battle with something else. I have read a book “Poor big power America ” written by Mika Tsutumi. It describes awful public care system in America. American know their own situation. Michel Moore’s “Sicko” focuses on health insurance and the pharmaceutical industry that failed to function properly. I would like to know why they hate social security system.

The discussion topic

1.       Do you agree with the claim of Republicans and Catholic Bishop that Obamacare really prevent the free exercise of religion?

2.       Why contraception becomes a big issue in every election in the US?

Background

     Patient Protection and Affordable Care Act nicknamed “Obama care” is a controversial new rule that Republicans and Catholic Bishops strongly against because it consists contraception problem. Last summer the health department decreed that all new health insurance should cover birth control services for women, including the morning after pill and sterilization.

    Nothing in the new rule interferes with the freedom to worship. Nor will it require anybody to practice contraception against their will. But the rule will require institutions to pay for contraceptive drugs and services that they find objectionable.

     This is a case of two principles colliding. Catholic institutions are making a principled stand for what they see as sanctity of life. Obama administration argues that the well-being of women depends on affordable access to contraception. At some point, the courts will probably decide but Mr Obama should avoid the collision by taking evasive action because such clashes, which is called “a culture-war issue” in which one tribe uses governmental power to damage other, damages something worthwhile. 

Lexington Obama’s “war on religion” words and phrases

pass up opportunity チャンスを逃す

non-aggregation pact 不可侵条項

evaporate = turn from liquid into vapor:

ammunition 弾薬、飛び道具

controversial = a useful word to describe topics

“Obamacare”= Patient Protection and Affordable Care Act

repeal　取り消す、撤回する

objectionable 異論すべき

decreed = order (something) by decree:

the morningafter pill

pro-lifers

sterilization= usu. be sterilized) deprive (a person or animal) of the ability to produce offspring, typically by removing or blocking the sex organs.

exempt = free from an obligation or liability imposed on others

denomination 宗派

bishop　主教

pulpit 聖職者、聖教壇

hyperventilating

practise contraception 避妊する

conscience 良心

pejorative 軽蔑的な

collide 衝突

sanctity 高潔さ

precedence　優先

evasive　回避的な　責任逃れの

absolutist　絶対主義者

relish = enjoy greatly

inflict 打撃を与える　苦しめる

religious vocation　宗教的職業

secular 世俗的な　ó sacred / religious

predicament 苦境

stifle 息を止める

3-6 The fistful of dollars

http://www.economist.com/printedition/2012-02-04

Buttonwood

The war on finance

Attacking your creditors is an intriguing strategy

“war on finance”=“war on terror”      

“vulture capitalists”=”terrorists”

similar uncertainty about how to define victory.

Discussion topics:

1.  Why do the people especially politicians have complaints on finance?
2. Where is the goal? What is the victory? Is it a win-win game?
3.  Also I would like to talk about using dormant bank accounts(休眠口座)

Summary:

Three main beefs(不平不満) that politicians have with the financial sector

1.       Bankers earn too much.

2.       Banks take reckless risks and then need rescuing by governments.

3.       Investors in financial markets have undue influence over an economy.

1. Redistributive taxation

People do not worry too much about footballers’ high pay. Why the people attack bankers is because of the extent to which they are subsidised by explicit and implicit taxpayer support.

2. Higher capital ratios

The problem of banks being “too big to fail” is being addressed by higher capital ratios. Higher capital ratios should mean lower returns on equity. So the bank bosses are harder to gain high payments because the pay of bank bosses correlated well with returns on equity, but not with returns on assets.

3. Politics and the markets

The political message seems to be:

“We hate private-sector creditors. We will penalise you by defaulting on your debts but not on debts to official creditors. We will endeavour to stop you protecting yourselves against our actions by making it difficult to collect on insurance in the credit-default-swaps market. Now, can we please borrow some money at a very cheap rate?”

What happens to countries like Greece which lose access to private- sector finance? 

3-5 The paradox of prosperity from China

http://www.economist.com/printedition/2012-01-28

Leaders: China

The paradox of prosperity

For China’s rise to continue, the country needs to move away from the model that has served it so well

Why I picked up the article:

As you already know, China is the center of attention from the global world. The Economist launched China’s section and the article got 986 comments on the website. That is the only reason why I picked it up. Let’s talk about China and their future.

Discussion points:

[China’s spring?] Democratic movement spread the Arab world and recently anti-Putin movement in Russia is taken notice. How about China? The article mentions that the Arab spring had few echoes in China because of its economic success, but does the situation continue?   

[Is China united or separated?] China has huge population and landscape governed by the one big party. By looking China as one, it has a superpower but it has also diverse people who have various interest and culture. This characteristic is also paradoxical. I think we should more focus on each region in China.

The Economist point of view:

1) China is now an economic superpower and is fast becoming a military force capable of unsettling America. But our interest in China

lies also in its politics: it is governed by a system that is out of step with global norms.

2) China’s bloody past has taught the Communist Party to fear chaos above all. But history’s other lesson is that those who cling to absolute power end up with none. The paradox, as some within the party are coming to realize, is that for China to succeed it must move away from the formula that has served it so well.