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 [Jan 18th 2025]

The world this week

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The world this week

Politics
None
1月 16, 2025 07:17 上午

Mediators in Qatar announced a six-week ceasefire between Hamas and

Israel, coming into effect on January 19th. There were quibbles about the
details on both sides, and the deal is opposed by Israel’s far-right parties.
But if all goes according to plan the militants will release 33 of the
remaining 98 hostages (half of whom may be dead) in the first phase of the
ceasefire in exchange for hundreds of Palestinian prisoners. Over 1,000
Israelis and tens of thousands of Palestinians have been killed in the
fighting.

General Joseph Aoun, the commander of Lebanon’s armed forces, was

elected the country’s president by parliament. The office had been vacant
for more than two years. Mr Aoun’s elevation to the presidency is a blow to

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Hizbullah, a much weakened Iranian-backed militia, as is the selection of
Nawaf Salam, head of the International Court of Justice, as prime minister.

Dozens of dead bodies were recovered from an illegal mine in South

Africa after a court ordered a rescue mission. More than 100 men were
pulled out alive, with hundreds more still believed to be underground.
Police had shut off most food and water supplies. The government says the
crackdown on illegal mining is necessary.

Daniel Chapo was sworn in as Mozambique’s president, extending his

Frelimo party’s half-century in power. He took office following months of
violent demonstrations against a flawed election in October. More than 300
people have been killed by security forces.

Volodymyr Zelensky said Ukraine had captured two North Korean

soldiers in Russia’s Kursk region and was willing to hand them over in
exchange for Ukrainian prisoners of war. A contingent of 12,000 North
Koreans is thought to have been deployed to Russia. Around 300 have been
killed and 2,700 injured, according to reports from South Korea.

NATO announced that it would deploy vessels, aircraft and drones in a

mission called Baltic Sentry to thwart sabotage against underwater sea
cables. There have been several incidents of ships, suspected of belonging
to Russia’s “shadow fleet”, dragging their anchors across the sea bed to
damage infrastructure. Meanwhile, Mark Rutte, NATO’s secretary-general,
warned that Europe must spend more on defence, and that NATO’s new
spending targets may be around 3.6% or 3.7% of GDP. Most EU countries
have struggled to hit 2%.

Crushed Tulip

In Britain Tulip Siddiq, a Treasury minister responsible for financial

conduct, resigned after she was named in a corruption case in Bangladesh
related to her aunt, Sheikh Hasina, who was ousted as Bangladesh’s prime
minister last year. Ms Siddiq was found not to have broken the ministerial
code, but resigned anyway as she had become a “distraction”. It was more

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bad news for the prime minister, Sir Keir Starmer, diverting attention from
his big announcement on making Britain a hub for artificial intelligence.

The Senate began hearings to confirm Donald Trump’s appointments to

government jobs. Pete Hegseth fired back against a barrage of questions
from Democrats about his fitness to lead the Defence Department amid
allegations about his private life. When grilled about his statements about
women not serving in combat roles, Mr Hegseth said they could serve as
long as combat standards were maintained. Joni Ernst, a wavering
Republican, said she would now vote for Mr Hegseth, all but ensuring his
confirmation.

In the dying days of the Biden administration, the Department of Justice

released a special counsel’s report into allegations that Mr Trump tried to
overturn the result of the 2020 election, concluding there was enough
evidence for a conviction at a trial that will now never happen. In response
Mr Trump reiterated his innocence. A few days earlier he was given a
conditional discharge without a fine in his criminal conviction for falsifying
business documents.

Firefighters made some progress containing the wildfires in Los Angeles.

At least 25 people have died and 12,000 structures are thought to have been

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destroyed or damaged in the Pacific Palisades and Altadena
neighbourhoods. Gavin Newsom, California’s governor, signed an order
suspending building and environmental restrictions in the devastated areas
to allow for quicker reconstruction. Karen Bass, the city’s mayor, issued a
similar order to speed up the rebuilding. Both are under intense pressure to
resign.

New York’s Metropolitan Transportation Authority reported that, year-on-

year, 219,000 fewer vehicles had entered Manhattan’s central business
district during the first working week of the new congestion charge, and
that the reduction in traffic meant that buses were moving faster. Traversing
the Brooklyn Bridge by car was 28% faster, the Lincoln Tunnel 39%
quicker and the Holland Tunnel 65%. The tunnels connect Manhattan with
New Jersey.

Mark Carney, the former governor of the Bank of England, readied his
campaign for the leadership of Canada's battered Liberal Party. Should he
win, Mr Carney would immediately replace Justin Trudeau and become
Canada's prime minister, though a recent survey indicates the Liberals are
supported by just 20% of voters. Opposition parties have promised to defeat
the Liberals in a vote of no confidence at the first opportunity.

Biden’s last stand

The Biden administration said it would remove Cuba from America’s list of
state sponsors of terrorism, which also includes Iran, North Korea and
Syria. Cuba then said it would release 553 political prisoners in a deal
brokered by the Catholic church, which the White House noted in its
announcement. Donald Trump added Cuba to the list at the end of his first
term as president.

America, Britain and the EU imposed new sanctions on Venezuelan

officials, as Nicolás Maduro was inaugurated for another term as president.
America also increased its reward for Mr Maduro’s arrest on drug-
trafficking allegations to $25m.

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South Korea’s president, Yoon Suk Yeol, surrendered to investigators who
want to question him about his brief declaration of martial law in
December. A previous attempt to arrest him had been abandoned amid a
stand-off with his hundreds of bodyguards. Mr Yoon reportedly refused to
answer questions at his first session with the investigators. The
Constitutional Court began the process of the impeachment trial that will
decide if Mr Yoon should be removed from office.
This article was downloaded by calibre from https://www.economist.com/the-world-
this-week/2025/01/16/politics

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The world this week

Business
None
1月 16, 2025 07:18 上午

The annual rate of inflation in America rose again in December, to 2.9%,

the third consecutive increase. Although there was some relief that the core
rate softened, markets expect the Federal Reserve to now slow its pace of
interest-rate cuts. Economists warn that inflation will only strengthen if the
new Trump administration imposes a harsh tariff regime. The sell-off eased
in bond markets, but yields remain high, adding to governments’ debt load,
especially in Britain, where higher yields have upended the government’s
fiscal plans. Investors in Britain found some relief when inflation there
unexpectedly slowed in December, to 2.5%,

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Argentina’s annual inflation rate eased again in December to 117.8%. The
peak last year was 289% in April. The month-on-month rate in December
rose slightly to 2.7%; in December 2023 it stood at 25.5%.

The German economy shrank by 0.2% in 2024, after contracting by 0.3%

in 2023. Output from construction was down by 3.8% and from
manufacturing by 3%, in part because of the problems that Chinese
competition and the transition to electric vehicles are causing Germany’s
car industry. Volkswagen’s global sales fell by 2.3% in 2024. In China
VW’s sales plunged by 10%.

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Oil prices rose to their highest levels since August, because of the new
sanctions America has imposed on Russia’s oil industry to try to curb its
exports. Brent crude traded above $82 a barrel; at the start of the year it was
around $75.

The resurgence of China’s exports last year helped push its annual trade
surplus up by 21% to $992bn, a third of which was with the United States.

The Biden administration imposed further restrictions on exporting

artificial-intelligence chips, including caps on exports of graphics
processing units. Nvidia, the leading supplier of GPUs, criticised the new
rules as a “regulatory morass, drafted in secret and without proper
legislative review”, which would “undermine” America’s leadership in the
technology. It also said that the first Trump administration laid the
foundation for America’s success in AI, which is perhaps a plea for the
incoming new government to scrap the restrictions.

Let the good times roll

JPMorgan Chase reported a net profit of $14bn for the final quarter of
2024, a 50% increase from the same period in 2023. Profit at America’s
biggest bank for the whole of 2024 came in at $58.5bn, a record for the
firm. Jamie Dimon, the bank’s chief executive, said businesses were
“encouraged by expectations for a more pro-growth agenda”. Goldman
Sachs doubled its profit in the fourth quarter, to $4.1bn. BlackRock,
Citigroup and Wells Fargo also posted bumper earnings.

Blue Origin, Jeff Bezos’s rocket company, successfully launched its heavy-
lift vehicle New Glenn into orbit. An attempt to recover its first stage
failed, however.

Qantas, Australia’s national airline, confirmed that it has had to delay flights
between Sydney and South Africa because of the danger from SpaceX
rockets returning to Earth over the Indian Ocean. The delays were caused
by late changes by SpaceX to both the timing of the rockets’ re-entries and
location co-ordinates.

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Johnson & Johnson agreed to buy Intra-Cellular Therapies for $14.6bn.
Intra-Cellular specialises in the growing field of neuroscience, developing
treatments for Parkinson’s disease and anxiety and depressive disorders.

Barrick Gold, a Canadian mining company, suspended operations at a gold

mine in Mali, after the government confiscated gold stocks from the
complex and placed them in a bank. A Malian judge ordered the seizure,
reportedly claiming Barrick owed the government $5.5bn. Barrick is
disputing the size of the state’s share of its mining revenues.
https://t.me/+JqE49xMjeM83Y2Nh

Meta joined a growing list of American companies that are ending or

scaling back their diversity, equity and inclusion policies. The social-
media company said the legal and policy landscape was changing, noting a
shift in the Supreme Court’s position. DEI had also become a “charged”
term, it said, coming to mean preferential treatment for some groups over
others. Banging a final nail into the DEI coffin at Meta, Mark Zuckerberg
ordered tampons to be removed from men’s bathrooms. He also mused
about a “culturally neutered” corporate culture and the need for more
“masculine energy”.

Closing the open-door policy

In another retreat from an inclusive policy, Starbucks issued a code of

conduct for its coffeehouses, ditching a guideline that had allowed anyone
to use the premises or toilets without buying anything. The restrooms are
now for use by customers only, the company warned, and no violence,
vaping, drugs or panhandling are allowed. In 2022 Starbucks closed 16
stores in urban areas because of “challenging incidents” that threatened
people’s safety.
This article was downloaded by calibre from https://www.economist.com/the-world-
this-week/2025/01/16/business

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The world this week

The weekly cartoon

None
1月 16, 2025 08:42 上午

Dig deeper into the subject of this week’s cartoon:

Leader: The Trump doctrine

The Americas: From Greenland to Panama and Mexico, leaders are in
shock
Europe: Can the good ship Europe weather the Trumpnado?

The editorial cartoon appears weekly in The Economist. You can see last
week’s here.

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This article was downloaded by calibre from https://www.economist.com/the-world-
this-week/2025/01/16/the-weekly-cartoon

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The Economist

This week’s cover

How we saw the world
1月 16, 2025 07:18 上午

THIS WEEK we published only one cover, considering Donald Trump’s

approach to foreign policy. Even before taking office on January 20th he
has helped secure a ceasefire and hostage deal in Gaza; he has bid for
control over Greenland, with its minerals and strategic position in the
Arctic. Mr Trump’s second term will not only be more disruptive than his
first; it will also supplant a vision of foreign policy that has dominated
America since the second world war.

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Social Media Pakistan 0342-4938217
Leader: The Trump doctrine
The Americas: From Greenland to Panama and Mexico, leaders are in
shock
Europe: Can the good ship Europe weather the Trumpnado?
This article was downloaded by calibre from https://www.economist.com/the-world-
this-week/2025/01/16/this-weeks-cover

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Leaders
Donald Trump will upend 80 years of American foreign
policy
American foreign policy :: A superpower’s approach to the world is about to be turned on its
head

Much of the damage from the LA fires could have been

averted
City of ashes :: The lesson of the tragedy is that better incentives will keep people safe

Rising bond yields should spur governments to go for

growth
Outrun the vigilantes :: The bond sell-off may partly reflect America’s productivity boom

Houthi Inc: the pirates who weaponised globalisation

Your money or your life :: Their Red Sea protection racket is a disturbing glimpse into an
anarchic world

How to improve clinical trials

Moving the needle :: Involving more participants can lead to new medical insights

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American foreign policy

Donald Trump will upend 80 years

of American foreign policy
A superpower’s approach to the world is about to be turned on its head
1月 16, 2025 08:37 上午

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DONALD TRUMP’S critics have often accused him of buffoonery and
isolationism. Yet even before taking office on January 20th he has shown
how much those words fall short of what his second term is likely to bring.
As the inauguration approaches, he has helped secure a ceasefire and
hostage deal in Gaza. Busting taboos, he has bid for control over Greenland,
with its minerals and strategic position in the Arctic. Mr Trump’s second
term will not only be more disruptive than his first; it will also supplant a

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vision of foreign policy that has dominated America since the second world
war.

For decades American leaders have argued that their power comes with the
responsibility to be the indispensable defender of a world made more stable
and benign by democracy, settled borders and universal values. Mr Trump
will ditch the values and focus on amassing and exploiting power. His
approach will be tested and defined in three conflicts: the Middle East,
Ukraine and America’s cold war with China. Each shows how Mr Trump is
impelled to break with recent decades: in his unorthodox methods, his
accumulation and opportunistic use of influence, and his belief that power
alone creates peace.

The Middle East illustrates his talent for unpredictability. The Israelis and
Palestinians eventually agreed to a deal over Gaza because he created a
deadline by threatening that “all hell would break loose” if they failed. He
will need to keep pressing them if the deal is to progress to its later phases.
Not since Richard Nixon has a president looked to behaving like a
“madman” as a source of advantage.

Caprice is bolstered by pragmatism. Unlike most peacemakers, Mr Trump

is blithely uninterested in the tortured history of the Middle East. The
Abraham accords, signed in his first term, suggest that he will use the
hostage release to promote a deal between Israel and Saudi Arabia, which
he sees as the route to prosperity—and a Nobel peace prize. Iran’s allies
have been crushed in Gaza, Lebanon and Syria. It may be ready to deal, too.

Yet the home of the three monotheistic religions will be a stern test of
whether people really are willing to put aside their beliefs and their
grievances for a shot at prosperity. Time and again, extremists on both the
Israeli and Palestinian sides have vetoed peace plans by using violence to
discredit the pragmatic centre. The Israeli right wants to annex Palestinian
land. Iran is teetering between engagement with America and dashing for a
nuclear bomb. What if the zealots and the mullahs get in Mr Trump’s way?

His answer will be to increase pressure using sanctions or the threat of

force, or to walk away. That is also the choice he faces in Ukraine, where he
has pledged to stop the fighting. Because he has more leverage over

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America’s allies than Vladimir Putin, the easier route is to walk away by
ending support and so force concessions on the government in Kyiv—
especially if, as his critics fear, he is flattered when Mr Putin deals with him
as one alpha male to another. But that would undermine his other goals.
Abandonment would court comparisons to Mr Biden and his hapless
departure from Afghanistan. Mindful of comparisons with Taiwan, China
might conclude he is a pushover. He may yet decide that being seen as
ready to back Ukraine will strengthen his hand against Mr Putin.

An opportunistic use of power has some benefits. Mr Trump will continue

to badger NATO members to spend more defending themselves against
Russia, which is good. But it also has costs. NATO can probably survive Mr
Trump’s threats to walk out, squabble over trade, support insurgent national
conservative parties and bully Denmark over Greenland’s sovereignty.
However, alliances thrive on trust. Putin-sympathising national
conservatives will act as a poison. Allowing for its size, Denmark lost as
many soldiers in Afghanistan as America did. Being arm-wrestled over
Greenland is the sort of treatment that casts America as a threat, not a
protector.

Despots will take comfort from a retreat from universal values. If Mr Trump
asserts a sphere of American influence that embraces Canada, Greenland
and Panama, they will claim it as an endorsement of their own principle that
international relations have in reality always been a trial of strength—handy
when Russia covets Georgia or China claims the South China Sea. If Mr
Trump scorns institutions like the UN, which embody universal values,
China and Russia will dominate them instead, and exploit them as conduits
for their own interests.

The Trump camp argues that what counts is America’s strength, and that
this will lead to peace with China. They warn of the need to prevent a third
world war, observing that Xi Jinping wants to be capable of taking Taiwan
by force by 2027. China is also rapidly building nuclear weapons and is
systematically mastering strategic technologies. America, they say, needs to
re-establish deterrence; and the panoply of “madman” diplomacy,
pragmatism and the accumulation of economic and military strength is the
way to do it.

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Alas, when it comes to Taiwan, there is a contradiction. If the source of
America’s strength is to be ruthlessly pragmatic about values, tough with
allies and open to deals with opponents, then those are exactly the
conditions for Mr Trump to trade Taiwan to China. Although the many
China hawks in his administration would fight that, the very possibility
points to a weakness at the heart of Mr Trump’s approach.

Pax Trumpiana

When the use of power is untethered by values, the result can be chaos on a
global scale. If ultra-loyal, out-of-their-depth would-be disruptors like Pete
Hegseth and Tulsi Gabbard are confirmed to head the Pentagon and
intelligence, the chaos will spread on the inside, too. Mr Trump is ill-suited
to separate his own interests from his country’s, especially if his and his
associates’ money is at stake, as Elon Musk’s will be in China. By turning
away from the values that made postwar America, Mr Trump will be
surrendering the single greatest strength that his despotic opponents do not
possess. ■

For subscribers only: to see how we design each week’s cover, sign up to
our weekly Cover Story newsletter.
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City of ashes

Much of the damage from the LA

fires could have been averted
The lesson of the tragedy is that better incentives will keep people safe
1月 16, 2025 07:18 上午

THE FLAMES are still roaring, the fire crews are still battling and the
people of Los Angeles have barely begun to grieve. As of January 16th, the
wildfires that struck the city had killed at least 25 people and destroyed
more than 12,000 buildings. Whole neighbourhoods look as if they have
been firebombed. JPMorgan Chase, a bank, estimates that the bill for the
damage will exceed $50bn, making these fires the costliest in American
history . Even before the flames are put out, many Angelenos are
wondering: could some of the pain have been averted? Alas, the answer is
yes.

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Living in Los Angeles has always involved risk. Cradled uneasily between
the mountains and the sea, America’s second-largest city is susceptible to
fires, floods and earthquakes. Climate change adds to the peril, by making
fires more frequent and severe. Weather “whiplash” set the stage for the
fires: the vegetation flourished after heavy rain, only to be parched to
kindling by a long drought. Flames, once sparked, flew far and fast on
strong Santa Ana winds.

Even if the world makes heroic efforts to curb emissions, favourable

conditions for wildfires will grow more common in the decades to come.
Vulnerable places everywhere will need to make themselves less
vulnerable. This is where politics in LA, California and America has failed.

Strict regulations in LA require new homes to be fire-resistant, but most

homes are not new. NIMBYism and convoluted environmental rules make
it extraordinarily difficult to build, so much of the housing stock pre-dates
the modern building code and is packed with flammable wood. Dense urban
development would be reasonably fireproof, but most of LA is zoned for
single-family homes, which sprawl out into the foothills, nestling against
flammable undergrowth. Clearing or thinning that flammable vegetation is
hard, since environmental objections can delay controlled burns for years.

A well-functioning insurance market would encourage sensible behaviour,

by charging people more if they own fire-prone homes in fire-prone areas,
and less if they make their homes safer or if they moved. But Californians
voted in 1988 to give an elected insurance commissioner the power to stop
insurance firms from raising prices. Insurers were forced to use historical
data on wildfires, and could not adjust premiums to the added risks from a
changing climate. Not only has a crucial incentive to make homes safer
been lacking, but some insurers have been pulling out of the state because
writing policies is unrewarding. A reform to allow them to use model-based
estimates of risk came into effect only on January 2nd.

California’s predilection for referendums also restricts the state’s freedom to

budget. A ballot initiative, passed in 1978, makes it hard to raise property
taxes. Deprived of revenue from taxes, cities are more dependent on fees
for services such as firefighting.

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The toll of natural disasters, from floods and fires to hurricanes, keeps
rising globally. National and local leaders should be working together to
reduce the damage. Instead Donald Trump stooped to partisan abuse by
blaming California’s governor, Gavin Newsom, for the disaster and calling
him “Newscum”. America urgently needs regulations and insurance
markets that create the right incentives by promoting cost-effective ways to
harden homes and encouraging people to live in safer places. LA will be
rebuilt: Mr Newsom talks of a new “Marshall plan” for the city. People will
always want to live in such a beautiful, vibrant place. But the city—and the
world—should learn from its tragedy. ■
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could-have-been-averted

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Outrun the vigilantes

Rising bond yields should spur

governments to go for growth
The bond sell-off may partly reflect America’s productivity boom
1月 16, 2025 08:37 上午

BRUTAL BOND sell-offs are not what you expect after interest-rate cuts.
But since the Federal Reserve started reducing its rates in September the
yield on America’s ten-year Treasury has risen by about a percentage point,
to 4.7%. A global repricing has followed. In Britain yields have climbed to
about where they were after Liz Truss’s disastrous “mini-budget” in 2022,
despite interest-rate cuts and austere government rhetoric. Yields are up in
the euro zone, Canada and across emerging markets. The striking exception
is China, where investors are worried about growth. Almost everywhere
else indebted governments, companies and homeowners must grapple with
the rising cost of capital.

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The bad news is that bond investors are looking aghast at genuine economic
uncertainty. The good news is that the uncertainty is two-sided, and on one
of those sides higher yields are a sign of a healthier economy. Though they
are painful now, there might yet be a reason to cheer them.

The first headache for investors is inflation. Globally it has fallen from an
annual rate of 10.4% in late 2022 to 4.4% today, leading to much
backslapping among central bankers. But in many places it is proving hard
to get down to the official target, usually 2%. That has reduced confidence
that deep interest-rate cuts are coming. Non-farm payrolls in America rose
by over a quarter of a million workers in December, feeding fears that the
economy is still too hot. In Britain growth is lacklustre, but surveys show

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inflation expectations creeping up. The oil price has risen by over 10%
since Christmas, to around $80 a barrel, in part because of American
sanctions on Iran.

Donald Trump’s agenda could give prices another boost. He threatens tariffs
that dwarf those implemented in his first term. It is unclear how much this
is a negotiating ploy, but his pledge on January 14th to establish an
“external revenue service” suggests he wants permanently high tariff
revenues. If his administration somehow manages to deport millions of
illegal migrants, there will be shortages in the labour market. Last time Mr
Trump was in office inflation was quiescent, but today central bankers are
on a hair trigger: his policies are more than enough to scare bond traders.

The last big worry is mounting public debts. Finance ministers have been
grappling with ageing societies, the pressure to spend more on defence and
the green-energy transition—plus populist resistance to spending cuts.
Budget rows have helped force Justin Trudeau to step down as head of his
party in Canada and caused chaos in France. A big fiscal fight looms in
America, where Mr Trump wants to cut taxes, even though the deficit is
already a gaping 6.9% of GDP.

Rising yields should discipline politicians to shrink their deficits. But the
danger today is that higher debt-interest costs push them further into the
red. The combined debt-to-GDP ratio among big rich economies is nearing
100%, a level at which a percentage-point increase in bond yields
eventually drains the public coffers by 1% of GDP annually, or more than
half of most European defence budgets. If higher interest rates and bond
yields simply bring about bigger deficits, the economy gets a stimulus, and
central banks can lose control of inflation.

It is an alarming prospect. Yet for any borrower, the cost of debt is only one
side of the equation. Growth in income also matters. In America GDP has
soared, thanks in part to labour productivity: output per hour worked has
risen 10% in five years. Optimists think things will soon get better still, as
artificial intelligence (AI) supercharges the labour force. America’s
stockmarket has long reflected such an expectation. And although it has
wobbled as bond yields have risen—the S&P 500 index is now not much

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higher than when Mr Trump won the election—stocks are still astonishingly
expensive.

Growth and interest rates are tightly linked. Just as Chinese yields have
been falling in anticipation of a protracted economic malaise, so America’s
might be rising partly in expectation of accelerating productivity.
Companies’ surging investment in AI is running at a pace of about $55bn a
year. Once in full swing, the dotcom boom led to extra investment worth
1.5% of American GDP, according to Goldman Sachs, a bank. More
demand for capital mechanically increases yields even if the investments
end up being a disappointment.

A booming America is only partial compensation for borrowers whose

bonds are tied to Treasuries—as emerging markets, which have long
suffered when American yields rise, can testify. But outside America, higher
growth is possible too. Sclerotic economies must make their labour markets
more flexible and avoid excessive regulations that hinder the adoption of
AI. They should avoid responding to protectionism with their own tariffs,
and deepen their own economic integration to offset Mr Trump’s trade war.
And they should avoid foolish industrial policies which suck up capital only
to waste it. High yields could portend disaster. But if they force
governments to try to match America’s fast growth then they might yet
bring about some good. ■
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Your money or your life

Houthi Inc: the pirates who

weaponised globalisation
Their Red Sea protection racket is a disturbing glimpse into an anarchic
world
1月 16, 2025 08:43 上午

YOU MIGHT think a ceasefire in Gaza would herald a period of calm in

the Middle East. But as we report this week, one militant group has created
a violent and lucrative new business franchise that is built to last. The
Houthis are holding Red Sea shipping to ransom, notionally in solidarity
with the Palestinians, but in reality to extract income from the industry and
exert influence over the region. They have had a banner year. The
Economist estimates that Red Sea cargo shipments are 70% lower by
volume and that, by shaking down ship owners, they are earning hundreds
of millions of dollars a year—or even billions—while imposing hundreds of

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billions of dollars of cost on the world. Far from going quiet when the
shooting stops in Gaza, the Houthis may be heralding an anarchic world
without rules or a policeman.

The Houthis, a political and religious group that originated in north-west

Yemen, are part of Iran’s “axis of resistance”, a network of proxies across
the Middle East. Whereas Hamas and Hizbullah have been smashed by
Israel and Bashar al-Assad’s regime in Syria has collapsed, the Houthis
have staying power. That is owing to the fact that are in a remote, rugged
country that is violent, divided and poor. Repeated American, allied and
Israeli air and naval strikes have had only limited effect at vast expense. An
earlier attempt to quell the Houthis by force, led by Saudi Arabia in 2015-
22, failed amid terrible civilian casualties.

For all their country’s failings, the Houthis have a clever business model.
Because of the proliferation of cheap missiles and drones to non-state
groups that can strike frequently and at long range, they pose a credible and
sustained threat to commercial shipping passing through the Red Sea via the
Suez Canal, which normally handles 12% of global trade. But they offer a
choice. If you cut a deal using their helpful customer-relations email
address and black-market payment systems, they will grant you safe
passage. By one estimate, illegal payments to the Houthis could amount to
$2bn a year.

Because their target is Western firms, which often want to avoid paying
protection money, the pattern of activity in the Red Sea has shifted. China’s
share of traffic in the strait has increased by a quarter since October 2023.
The big Western shipping lines are taking the longer route, around Africa.
The extra time and fuel this requires increases costs and eats up shipping
capacity. The Economist estimates that the bill, some of which is passed on
to consumers, amounts to $175bn a year.

What to do? Although the Houthis may pause following the Gaza ceasefire,
their ability to threaten ships will remain. Any “maximum pressure”
campaign against Iran by Donald Trump could affect the Houthis, who rely
on Iranian missiles and Iranian and Russian targeting information. Still,
America is not a big user of the Suez Canal, so Mr Trump’s appetite for
pursuing the Houthis directly may be limited. Besides, no one has yet

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identified an effective aerial and naval strategy against them and a ground
invasion of Yemen is out of the question.

Yet even if Iran were to disown them, the Houthis would have good cause
to continue the extortion and the money to buy the weapons they need.
They could also threaten other targets, including the oil-rich Gulf states.
Hence, if Mr Trump turns a blind eye to the Houthis, other countries in
Asia, the Middle East and Europe may eventually follow China and pay the
Houthis protection money despite also paying lip service to the principle of
freedom of navigation.

That would hardly break the world economy, but it would reshape it. A
permanent tail-risk would become embedded in financial and shipping
markets as investors factored in the possibility of a total closure of the Suez
Canal or Houthi strikes on other targets in the region. There would be an
enduring loss of efficiency. And market shares in shipping would shift as
Western firms lost business to vessels carrying the flag of China or other
rule-breakers.

Businessmen or believers?

Similar trends are discernible as other industries, including air travel, are
reshaped by swirling geopolitical risks. The Houthis have discovered that
the world is unwilling to work together, although the costs of inaction are
high. Indeed, they have been so successful at exploiting collective inertia
that other militias may pay them the compliment of imitating them. ■
This article was downloaded by calibre from
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Moving the needle

How to improve clinical trials

Involving more participants can lead to new medical insights
1月 16, 2025 08:37 上午

LAST YEAR Roche, a Swiss pharmaceutical firm, published a review of

the clinical trials on neurological drugs it had held between 2016 and 2021.
It found that black people were under-represented in all but one.
Surprisingly, that news represents progress, because it shows that trial
organisers are becoming more aware of a dangerous bias that sets back the
safety and efficacy of medical treatments.

Many trials exclude certain groups, and do so deliberately—children, for

example, or people with physical or learning disabilities, pregnant women
and the elderly. For such groups, participation has stalled or even
reversed. There are good explanations for the exclusion, such as the

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difficulty of getting informed consent or the potential harm to unborn
children.

Yet the consequences can be absurd. A recent review found that half of
trials around the world testing hip-fracture interventions excluded people
who lived in nursing homes, were old or had some level of cognitive
impairment. Though these groups make up almost a third of all patients
suffering hip fractures, it is unclear if the interventions will work as safely
or as effectively on them. Their doctors face an invidious choice: prescribe
anyway, with uncertain results; or deny their patients new treatments.

A shocking example of such exclusion is of people with Down’s syndrome.

They have long been left out of clinical trials, including recent trials of
lecanemab and donanemab, the first drugs against Alzheimer’s that seem to
slow the progress of the disease. This is despite the fact that those with
Down’s are highly likely to develop it. Yet without data from trials, doctors
will not prescribe them the drugs, for fear of unknown side-effects.

Obtaining informed consent for trials is not always easy, especially from
people with learning disabilities or dementia. Accounting for different
groups’ risks of side-effects can complicate the analysis of the data. And
some groups mistrust doctors because of a history of mistreatment, which
makes recruiting them harder.

Even so, broadening the range of trials’ participants can be practically

useful, because they may lead to new medical insights. Running trials on
people who are more likely to develop Alzheimer’s, such as those with
Down’s syndrome, might help researchers test whether their drugs work
preventively.

Something like that happened with the Dallas Heart Study in the 2000s. As
a large piece of epidemiological research, it included an ethnically
representative sample of people and found a genetic variant in some
African-Americans which was correlated with 40% lower bad cholesterol.
That gene is now one of the foremost drug targets in the fight against
cardiovascular disease.

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Fortunately, the bias of clinical testing may be changing. Almost half of
trial participants in America are now women (in the rest of the world it is
still only 40%). America and Britain look likely to publish regulations that
require trial organisers to explain whom they ought to include and how they
plan to recruit them.

The drug and medical-device industries are likely to object. Companies may
fret about the speed and cost of broad-based trials. During the covid-19
pandemic, Moderna slowed down its vaccine trial because its recruiters, a
private contractor, had not enrolled enough subjects from ethnic minorities.
In that time, millions contracted the virus.

The trade-off almost always favours efficacy. A pandemic on such a scale is

very rare. As broad-based trials become the norm, they will be easier and
faster to set up. Firms are rightly granted valuable monopolies as a reward
for financing the research needed to discover successful drugs and bring
them to market. A quid pro quo should be that the trials which lead to those
monopolies reveal who will benefit and by how much. ■
This article was downloaded by calibre from
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Letters
Letters to the editor
On Greenland and Canada, flooded homes, problematic oldies, the axolotl :: A selection of
correspondence

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On Greenland and Canada, flooded homes, problematic oldies, the axolotl

Letters to the editor

A selection of correspondence
1月 16, 2025 07:18 上午

Letters are welcome via email to letters@economist.com

Hands off Greenland

Greenland has long sought independence from Denmark and the idea that
America could simply take over Denmark’s role as security guarantor and
financial patron is deeply misguided (Free exchange, January 11th). It is not
acceptable for one country to bully others. It took us two world wars to
conclude that territorial sovereignty is the fundamental right of all
countries. Denmark and Greenland would have no problem with an
increased American commercial or military presence on the island. There
are indeed legitimate strategic concerns, such as the ability of Russian

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aircraft or submarines to cross over or under the ice-shelf undetected, but
these should not undermine the principles upon which international peace
and prosperity are built.

Emil Tao Bjorn

Aarhus, Denmark

Donald Trump says he wants to gain Greenland to bolster the security of the
United States, so focusing on the commercial value of the island is off the
mark. This is not a commercial transaction, but an existential strategy, so
the value of Greenland should not be based on its resources, but on those of
the United States. That’s not easy to calculate, but one estimate puts the net
wealth of the US at around $137trn. And since that takes no account of
human happiness and welfare, isn’t that the absolute minimum-starting
point from which to consider the proportion that is worth paying as
insurance?

Bill Young
Arlesheim, Switzerland

Greenland could join Canada instead. As a new Canadian province or

territory, Greenlanders would keep a large part of their autonomy, a
universal health-care system and better social security. They would
probably prefer Canada’s multiculturalism and First Nations rights to the
United States’ melting pot and disregard for anything un-American. Canada
is also much closer geographically to Greenland, making travel, trading and
services less expensive. Canada has unmatched mining expertise in the
frozen north and good laws to protect the environment.

André Moreau
Saint-Bruno-de-Montarville, Canada

The European flag with one of the stars as the red maple leaf representing
Canada.

Regarding Mr Trump’s goading about Canada becoming America’s 51st

state (Charlemagne, January 4th) perhaps the Republican should be

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reminded that the US has tried to take over Canada before, in the War of
1812. As I recall, this did not turn out too well for America.

David Brewer
Puslinch, Canada

Mr Trump gets the numbers wrong. Canada would not become the 51st
state. Leaving aside its three territories, Canada consists of ten provinces,
which would be new states 51 to 60. Adding ten states from our more
liberal northern neighbour would result in the Democrats enjoying
permanent control of the Senate, the House of Representatives and the
electoral college. Well played, Mr Trump.

George Kovac
Miami

Charlemagne proposed that Canada join the European Union. The country
shares many characteristics with Britain, Australia and New Zealand:
language, democracy, common law, culture and soft power. They are the
CANZUK countries. To counter the pressure from their larger neighbours—
America, the EU and China—the CANZUK group could co-operate more
closely. It would have the world’s largest area, the third-largest economy
and be a strong military power. It could operate without the over regulation
and undemocratic features of the EU, would be too big to be bullied and
could be a powerful force for progress on the world stage.

Peter McGarrick
Grittleton, Wiltshire

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When your home is flooded

You referred to a “state-backed scheme” in Britain that can soften the

insurance blow for those at risk from flooding (“Wet, wet, wet”, January
4th). That scheme, Flood Re, is often not well known or understood. It is
paid for by insurers, rather than the government. Only homes built before
2009 are eligible, to ensure that the scheme’s very existence does not
incentivise inappropriate house building. The scheme will end in 2039,
along with the subsidised insurance premiums that households benefit from.
Some mortgages may well extend beyond that date. If homes do flood,
households should tap Flood Re’s Build Back Better initiative to protect
against future flooding with relatively cheap and simple resilience
measures, such as airbrick covers and non-return valves.

For insurance to remain affordable to those at risk of flooding after 2039,

the government must continue to invest in new flood defences as well as
maintaining existing ones. One in four homes in England is at risk of
flooding. Climate change and new house-building policies will increase that
number. The rampant paving over of front gardens, often for charging
electric vehicles, is also not helping.

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Harriet Boughton
General counsel
Flood Re
London

Golden oldies

I strongly object to The Economist describing people over 55 as the new

problem generation, concluding that we are “behaving badly” (“Ageing
disgracefully,” January 4th). Having led our lives raising the next
generation, we deserve some self-determination when it comes to our
personal use of alcohol, drugs and rock and roll as we grow older. We don’t
need to hear the same demeaning judgments we heard when we were
young, only this time from the younger generation.

The Economist needs to instil in its younger writers the liberal set of values
that it has always been known for.

Sten Linnander
Konstanz, Germany

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You ignored the greatest revolution of the baby-boomer generation: our
participation in volunteerism and charitable giving. Volunteering was
unusual when I was growing up in the 1950s in my diverse Seattle
neighbourhood. Today virtually everyone volunteers among my large
network of friends and relatives. We give to charities far afield through
GoFundMe or Kickstarter, travel abroad to volunteer through the Rotary
Club, Habitat for Humanity, churches and medical missions. Our generation
has created many new ways to give through foundations, legacy giving and
estate planning and the creation of larger foundations that are composed of
many smaller charitable organisations. Many of these opportunities didn’t
exist in my parents’ time.

Kaethe Kauffman
Las Vegas

Problematic cohorts of people now aged over 55 learned to be antisocial as

teens in the 1980s, when committing crimes like joyriding and burglary was
easy. It turns out that the likelihood of antisocial behaviour across the
course of a life is determined not by when people are born, as often thought,
but by how easy crime is to commit when they are adolescents. Put another
way, opportunity makes the thief but also the persistently antisocial. This is
why, despite close to 90% declines in many property and violent crimes
since the early 1990s, these ageing cohorts remain troublesome.

Adolescent cohorts nowadays are marked by mostly low-crime-

involvement. However, we should be wary of the potential longer-term
effects of current easy crime opportunities, particularly those facilitated by
the internet, such as fraud, online harassment and other victimisation, and
by online marketplaces that make it easy to fence stolen goods. Phone theft
also remains easy. Recent spikes in car theft in America, where electronic
immobilisers are not mandated, could have longer-term cohort effects. All
this means that reducing the opportunities for crime should be the platform
on which crime-prevention policies are built.

Graham Farrell
Professor of crime science
University of Leeds

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Amusing amphibians

“The tadpole that conquered the world” (December 21st) reported on how
the axolotl has become a global megastar, with its image plastered all over
social media, toys and jewellery. The creature made its literary debut in
1956, in Julio Cortázar’s haunting short story “Axolotl”, where it is used as
a profound metaphor for alienation and transformation. Arguably,
Cortázar’s work played a role in embedding the axolotl in the global
imagination long before its resurgence as a cultural and ecological icon.

Piotr Zientara
Gdynia, Poland

Frank Herbert’s book “Dune Messiah”, published in 1969, mentions axolotl

(shortened to axlotl) tanks that are used to clone dead people.

Fredrick Gilkey
Retired air force lieutenant-colonel
Parkville, Maryland

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One of the axolotl’s most famous pop-culture appearances was in Mad
magazine in 1958. It featured in a poem that began thus (apologies to
Wordsworth): I wandered lonely as a clod/Just picking up old rags and
bottles/When onward on my way I plod, I saw a host of axolotls/Beside the
lake, beneath the trees/A sight to make a man’s blood freeze.

Truly a classic.

Nelson Smith
Toronto
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By Invitation
Trumpism is becoming more pragmatic, argues Reihan
Salam
The second Trump presidency :: But not all of the incoming president’s backers buy it

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The second Trump presidency

Trumpism is becoming more

pragmatic, argues Reihan Salam
But not all of the incoming president’s backers buy it
1月 16, 2025 07:37 上午

The audio version of this story is available in our app. It has been
produced using an AI voice. Learn more.

DONALD TRUMP is enjoying a honeymoon. As he wryly observed in

December, “[In] the first term, everybody was fighting me. In this term,
everybody wants to be my friend.” The president-elect was referring to the
ever-growing list of technology CEOs who had made the pilgrimage to
Mar-a-Lago, his Florida home. But he could just as easily have had in mind
the #Resistance media luminaries now seeking to mend fences, the swing-
state Democratic senators backing immigration-enforcement measures they

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once deemed anathema, or the anxious foreign emissaries hoping that he
can be talked out of walloping their economies with tariffs.

Why do so many of the great and good now want to be Mr Trump’s friend?
One explanation is that his victory in 2024 was broader and more
convincing than the one in 2016. This time, he won the popular vote by
drawing in more working Americans of all racial groups, Hispanics in
particular. Moreover, urban areas that were once Democratic strongholds
gave him significant support.

This broadened coalition, though, represents a change not just to Trump

voters, but to Trumpism. To win in 2024, Mr Trump adapted his ideological
formula just enough to capture a vitally important segment of the American
elite.

Thanks to surging inflation and illegal immigration, and with Mr Trump

growing more moderate on key social issues, many socially liberal voters
found themselves “mugged by reality”, as the conservative intellectual
Irving Kristol once put it. Business leaders, investors, Silicon Valley moguls
and academics who once considered Mr Trump beyond the pale began to
reconsider his virtues. The result is a new Trumpian synthesis—call it Neo-
Trumpism.

This is a stark departure from Mr Trump’s first bid for the Republican
nomination. Then, he made restricting immigration the centerpiece of his
domestic agenda. He jettisoned the free-trade internationalism of George W.
Bush and Ronald Reagan in favour of frank protectionism and a more
overtly transactional approach to America’s global leadership. Whereas
prominent Republicans such as Mitt Romney and Paul Ryan had pledged to
reform old-age entitlements, Mr Trump promised to leave them untouched.
To win over religious conservatives, he promised to advance the pro-life
cause.

Call this Paleo-Trumpism, both because 2016 is now ancient history and
because this ideological synthesis bore a strong resemblance to the
paleoconservatism of Pat Buchanan, the Republican rebel who campaigned
on protectionism and isolationism in the 1990s, when neoliberal globalism
was ascendant on both right and left.

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This first iteration of Trumpism fused together the GOP’s evangelical base
with the disaffected, secular working-class voters who swung Mr Trump’s
way. His ideas were also almost perfectly designed to alienate the educated
upper-middle class, including Country Club Republicans.

Perhaps inevitably, Paleo-Trumpism sparked a backlash from the

progressive left, which consumed elite institutions and transformed the
political landscape in sapphire-blue districts. At the height of the covid-19
crisis, censorious wokeism seemed to become America’s new civil religion,
and Democratic presidential contenders raced to the left on policing,
immigration, taxes, health care and the environment. Although the
comparatively moderate Joe Biden ultimately won the nomination, he made
common cause with socialists, Green New Dealers, anti-monopolists and
racial-justice activists to form the most left-wing presidential administration
in decades.

The progressive overreach of the Biden years created an opening for Mr

Trump, but an opening that was markedly different from what came before.
He could shift his focus from appealing to the traditional Republican base—
with whom his alliance was always uneasy—to affirming the centre’s anger
over Mr Biden’s overreach.

Take Mr Trump’s efforts to moderate the Republican stance on abortion, a

blow to the pro-life coalition. The Supreme Court’s Dobbs ruling, which let
states set their own abortion laws, buoyed Democrats in the 2022 midterm
elections. As many had predicted, the end of Roe v Wade meant that pro-
lifers now found themselves on the defensive, even in the reddest states.
Increasingly, pro-life social conservatism has been giving way to a softer
cultural conservatism that focuses on, for example, the excesses of gender
ideology or the perils of social-media addiction.

Then there was the Biden-era surge in illegal border-crossers and dubious
asylum claims, which moved a large majority of Americans in a
restrictionist direction. Though you might think this would be a boon for
Paleo-Trumpism, what incensed most Americans was lawlessness at the
border and the strain on social services from unvetted migrants, not the
ethnic character of the newcomers per se. Indeed, much of the backlash

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against irregular migration came from first- and second-generation
Americans living in overburdened urban neighbourhoods.

The spike in inflation that followed the budget-busting American Rescue

Plan revealed the limits of fiscal expansion and reminded American voters
of the downsides of unlimited welfarism. Swing voters weren’t suddenly
clamouring for entitlement reform, but they were more worried about the
rising cost of groceries than the need for more transfers.

Finally, Hamas’s October 7th attack on Israel served as a vivid reminder of

the threat of terrorist barbarism abroad and, closer to home, the extent of
anti-Israel, anti-Western sentiment among American leftists and in many
immigrant communities.

Paleo-Trumpism has thus had to make room for Neo-Trumpism: a more

pragmatic, less ideological tendency that emphasises law and order, pro-
growth economic policies, an assertive foreign policy, a more selective
approach to immigration and vigorous opposition to the entrenchment of
intersectional leftism in schools, workplaces and cultural institutions.

On the campaign trail, these tendencies can coexist. When it comes to

governing, however, there will be hard choices ahead, as evidenced by the
ferocious row over H-1B visas that recently pitted Elon Musk and his
Silicon Valley allies, who embrace skilled immigration, against MAGA
social-media influencers, who vehemently disagree.

There will, then, be pressure to abandon Neo-Trumpism, but Mr Trump

would be unwise to yield to it. Not only is it what put him back in the White
House. By expanding his coalition, and increasing its respectability, Neo-
Trumpism gives its namesake an opportunity to forge a lasting ideological
legacy. ■

Reihan Salam is president of the Manhattan Institute.

This article was downloaded by calibre from https://www.economist.com/by-
invitation/2025/01/16/trumpism-is-becoming-more-pragmatic-argues-reihan-salam

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Briefing
The right in Congress and the courts will reshape Donald
Trump’s agenda
Courtiers with ideas :: As dominant as the new president is, there is still life in Washington’s
institutions

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Courtiers with ideas

The right in Congress and the

courts will reshape Donald
Trump’s agenda
As dominant as the new president is, there is still life in Washington’s
institutions
1月 16, 2025 07:18 上午 | Washington, DC

HE WON WHAT was supposed to be a close election by a convincing

margin, even clinching the popular vote. His fellow Republicans controlled
both the House of Representatives and the Senate. He had laid out a bold
agenda and expected his party to follow. “I earned capital in the campaign,
political capital, and I intend to spend it,” George W. Bush boasted in 2004.
Yet what the president had hoped would be his signature policy, a partial
privatisation of social security, the state pension scheme, never even came

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up for a vote. Moderate Republicans revolted, allying with Democrats to
fend it off. Similarly ambitious plans for immigration reform flopped as
well. “Popularity is as fleeting as the Texas wind,” Mr Bush reflected
towards the end of his term.

Donald Trump is familiar with this dynamic. In his first term, his promised
repeal of Obamacare was thwarted at the last minute by John McCain, a
Republican senator and former presidential nominee. He was talked out of
his pledge to pull all American troops out of Afghanistan by the national-
security grandees he appointed to senior jobs. And even though he shifted
the judiciary to the right by appointing lots of judges, the courts scuppered
many of his administration’s initiatives. Will he again see much of his
agenda undermined or reshaped by fellow conservatives?

100 Pennsylvania Avenue

This time, Mr Trump has been careful to appoint ardent loyalists to senior
jobs in the cabinet and the White House. But he has less authority over
Republicans in Congress, who have a pivotal role in advancing his agenda.
The Senate, for instance, must approve his choices for more than 1,000
jobs, including all the members of the cabinet. Many of Mr Trump’s
campaign pledges cannot be fulfilled without legislation from Congress.

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There is not much margin for dissent. The Republicans have a slightly
firmer grip on the Senate than in 2017, with 53 rather than 52 of the
chamber’s 100 seats. But that still means Mr Trump can afford no more
than three defections on any given vote, assuming Democrats close ranks.
As for the House of Representatives, Mr Trump has the smallest majority
for a president entering office since George H.W. Bush was inaugurated in
1989 with the Republicans in the minority (see chart ). He has made matters
worse by nominating three House Republicans for jobs in his new
administration. One has already resigned; if, as is likely, the other two take
up their new posts, the Republicans will have a majority of just two, at least
until special elections are held to fill the vacancies. That would be the
narrowest majority since the 1930s. Mike Johnson, the Republican speaker,
has worried aloud about delayed flights or bouts of flu, which might lead to
unexpected defeats in the chamber.

Mr Trump has assigned J.D. Vance, his running-mate and a senator for the
past two years, to be his point man on Congress. The vice-president anyway
has the formal responsibility of presiding over the Senate and casting
deciding votes in the event of a tie. But some of Mr Vance’s former
colleagues see him as slightly presumptuous. He arrived in the chamber
aged 38 and began loudly questioning Republican orthodoxy on economics
and foreign policy.

Mr Vance’s first task is to help secure the Senate’s approval of Mr Trump’s

nominees. In many cases, it will not be easy. The Senate has become more
Trumpy since 2017, thanks to new arrivals like Bernie Moreno from Ohio
and Jim Banks from Indiana. But there are still a few moderate
Republicans, such as Susan Collins from Maine and Lisa Murkowski from
Alaska. Former members of the party’s leadership, including John Cornyn
from Texas and Mitch McConnell from Kentucky, are more institutional
than iconoclastic. When the Republican caucus chose a new leader to
replace Mr McConnell in November, it rejected the MAGA candidate, Rick
Scott from Florida, and plumped instead for John Thune from South
Dakota, a more collegial type. Mr Thune has said that he will not facilitate
Mr Trump’s agenda by scrapping procedural rules like the filibuster, which
sets a 60-vote threshold for most legislation to win approval.

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In similar fashion, Republicans in the Senate may not simply wave through
all Mr Trump’s most controversial nominees. Already Matt Gaetz, Mr
Trump’s first choice for attorney-general despite his louche personal life,
has had to withdraw in the face of resolute opposition. Although hostility to
Peter Hegseth as the next secretary of defence seemed to be evaporating
after a hearing this week, the prospects of other nominees remain in doubt:
Tulsi Gabbard as director of national intelligence, Robert F. Kennedy junior
as secretary of health and human services and Kash Patel as head of the
Federal Bureau of Investigation. Several Republican senators have sounded
sceptical notes about one or other of these choices. For instance Bill
Cassidy from Louisiana, a doctor, has hummed and hawed about Mr
Kennedy. Mr Thune, when asked whether such figures would be approved,
recently said, “We don’t have, at this point, I don’t think, clarity on that.”
He has himself sounded lukewarm about sending the Senate on holiday to
allow Mr Trump to make “recess appointments” without the Senate’s
approval.

Whereas Republicans in the Senate may dilute Mr Trump’s most radical

ideas out of a sense of moderation and propriety, the House may resist him
as not radical enough. A majority of Senate Republicans arrived in the
upper chamber before he first became president in 2017, but of the 220
Republicans elected to the House in November, only 70 predate him.
During the past eight years, moderates have seen their influence wane. Tevi
Troy, a presidential historian, predicts that most opposition to Mr Trump
will now come from his right: “It’ll be, ‘I’m not criticising Trump. I’m
criticising people who are undermining Trump.’”

Far-right members of Congress are some of Mr Trump’s fiercest supporters.

But many of them are also purists, who see compromise and pragmatism as
forms of corruption. “What we used to have was Ron Paul,” recalls Grover
Norquist, an anti-tax crusader, referring to a former Republican
representative who would oppose virtually all legislation as insufficiently
conservative. “When you have a 20- or 30-vote margin, you can have a Ron
Paul do that, and everybody gets the joke, right?”

The default option

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These days the hardline Freedom Caucus has dozens of members and the
joke is less funny. One of the group’s motivating beliefs is fiscal
conservatism. Mr Trump, in contrast, has never shown much interest in
fiscal discipline. Mr Trump and the Freedom Caucus have already clashed
over the “debt ceiling”, the legal cap on the federal government’s
borrowing, which Mr Trump said in December should be abolished or
suspended as part of a stopgap budget bill. Republican fiscal hawks rejected
the idea unless “real spending cuts are agreed to and in place”. They won
that skirmish: the idea was dropped. Even so, 38 Republicans voted against
the budget bill, which passed only with Democratic support.

The fiscal hawks will have more chances to flex their muscles: in March,
when December’s budget agreement expires, and over the summer, when
the debt ceiling will be hit. A rankled and perhaps nervous Mr Trump has
called for a more loyal conservative to challenge Chip Roy, the Freedom
Caucus’s policy chair, in a primary at the next election. He has also chosen
a former Freedom Caucus staffer, James Braid, to head the office at the
White House in charge of liaising with Congress.

The slender Republican majorities and the divergent dynamics of the House
and the Senate will make legislating fraught and unpredictable. Small
groups of representatives or even individual lawmakers may be able to hold
bills to ransom. The inevitable horse-trading is bound to dilute or modify
Mr Trump’s proposals. Big tests will come in the next few months, as
Republicans pursue legislation on immigration, energy and the budget.

On the campaign trail Mr Trump came up with lots of ideas for tax cuts,
many of which evoke more eye-rolling than enthusiasm on Capitol Hill. His
main goal is to extend the tax cuts he pushed through during his first term
as president, in 2017. That alone will cost some $5trn over a ten-year
period, according to estimates from the Committee for a Responsible
Federal Budget, a pressure group. Mr Trump also wants to exempt tips from
income tax ($300bn), as well as overtime pay ($2trn) and social-security
benefits ($1.3trn). Few observers expect all, or even most, of these
expensive giveaways to become law.

In fact, some in Congress would like to revise or undo certain elements of

the 2017 law. They have leverage, since most of the 2017 tax cuts will

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expire automatically unless Congress extends them. Mike Lawler, a
congressman from New York, wants to lift the 2017 law’s $10,000 cap on
state and local tax (SALT) deductions. “There’s more than enough members
to prevent passage of a bill,” he says of fellow blue-state Republicans
pushing for an increase to the cap. “There’s no room for error here…the
reality is that if no tax bill passes, SALT comes back unlimited.”

The 2017 law also raised the child tax credit from $1,000 to $2,000. Mr
Trump says he supports another “significant expansion”. Mr Vance, a keen
natalist, thinks it should be lifted to $5,000. But the credit’s biggest
champions have left the Senate and other senators have different spending
priorities. For instance, Roger Wicker, chairman of the Armed Services
Committee, wants to boost defence spending by $120bn over the next two
years. In the long run, he says, “It wouldn’t hurt” to nearly double spending
on defence to 6% of GDP—even though Mr Trump has reportedly talked
about getting the Pentagon “to do more with less”.

Congress is also likely to interfere with Mr Trump’s plans to raise revenue.

On the campaign trail he said that America could rake in “trillions” by
increasing tariffs. He suggested a universal tariff as high as 20% on all
imports except those from China, which would be subject to a 60% levy.
Although Mr Trump may try to impose such rises by decree, it would be
preferable to get Congress to adopt them, since he could then include the
resulting revenue in his reckoning of the overall cost of a tax bill. That is
important, since Republicans will only be able to get a budget bill through
Congress using a process called reconciliation, which is not subject to the
filibuster. Congressional rules, however, cap the cost of bills passed by
reconciliation. So Congress would, in effect, be allowing Mr Trump to cut
taxes or spend more if it went along with him on tariffs. Yet there is almost
no chance that it will. An across-the-board tariff increase would be dead on
arrival in the Senate, where free-trade Republicans still dominate.

The threat of the massive tax increase that will automatically occur if
Congress does not reach a compromise should ensure that some sort of
budget bill is passed. That bill is also likely to advance some of the policies
Mr Trump has advocated on immigration, allowing the new president to
claim victory on two counts. But on the details, Mr Trump may end up

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deferring to Congress, rather than the other way round. “He’s more focused
on just getting it done and keeping the promise,” says Paul Ryan, a former
speaker of the House who helped shepherd the 2017 tax cut through
Congress. Sometimes the president-elect seems to want to save face by
appearing to be in command, whatever the reality. “The tactic is always to
say, ‘This is horrible!’ Then you get a tiny tweak, and he’s like,
‘Amazing!’,” jokes a Senate aide. “It’s an interesting dance.”

Given the difficulty of getting legislation through Congress, Mr Trump will

often resort instead to executive orders. Those are vetted not by Congress,
but by the courts. In theory, this puts Mr Trump in a strong position, since
the courts are broadly deferential to presidential authority and since Mr
Trump himself appointed 226 federal judges in his first term, including
three Supreme Court justices.

Yet even before Mr Trump takes office, he is being reminded of the

independence of the courts. On January 9th the Supreme Court, despite its
expansive view of presidential immunity, declined to stop a court in New
York from sentencing Mr Trump for falsifying business records. This week
it seemed minded to reject a plea from Mr Trump to delay a ban on TikTok,
a popular video app that Mr Trump vowed to save during the campaign.
Although six of the nine justices have been appointed by Republican
presidents and are conservative in outlook, they clearly do not intend to act
as a rubber stamp for Mr Trump.

Bloc and tackle

Although the conservative justices often vote together on prominent cases,

such as their decision to overturn the right to an abortion, they do not
always rule in lockstep. Statistical analysis from Dean Jens of the
University of Central Florida shows that the 6-3 court is really a 3-3-3
court, with two conservative camps forming blocs as distinct as the liberal
one. For example, over the past two terms John Roberts, the chief justice,
voted with Elena Kagan, a liberal one, about as often as he did with two of
the most conservative justices.

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The courts routinely thwarted Mr Trump during his first term. The Supreme
Court blocked his attempt to cancel a programme that had prevented the
deportation of 700,000 undocumented immigrants brought to America as
children. It also stopped him from adding a question about citizenship to the
2020 census. A federal court prevented him from using defence funding to
build a wall on the border with Mexico. The courts rejected his initial
attempts to ban visas for people from certain predominantly Muslim
countries. In all, federal agencies faced legal challenges to 246 different
policies during Mr Trump’s first term, according to the Institute for Policy
Integrity, a think-tank. His administration prevailed only 54 times, losing in
court or retracting the disputed edicts in the other 192 instances.

Mr Trump has nonetheless signalled that he will keep trying to implement

pet policies using untested legal theories. He has talked, for instance, of
declaring America to be at war to permit the use of the army to help round
up illegal immigrants. If he goes ahead with this ruse, it is certain to be
challenged in the courts. Mr Trump may also seek to undermine Congress’s
power of the purse by refusing to spend money it has set aside for particular
purposes—a step known as impoundment. His acolytes have also talked
about invoking an obscure rule to sack bureaucrats en masse and replace
them with more loyal lieutenants.

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Erwin Chemerinsky, dean of the law school at the University of California,
Berkeley, expects that Mr Trump’s unambiguously unconstitutional
policies, such as withholding American citizenship from babies born in
America to illegal immigrants, will indeed be rejected by the courts. But he
remains “petrified” since Mr Trump clearly intends to push the boundaries
of his authority. He argues that despite some unusual splits, the Supreme
Court has consistently ruled 6-3 in favour of conservatives on “the issues
that ideologically divide society”, from presidential power to gun rights.

However, Ilya Shapiro of the Manhattan Institute, another think-tank, thinks

the courts’ willingness to frustrate Mr Trump “depends on the specific
issue”. He is likely to have more luck reshaping the bureaucracy than
attempting to evade or undermine laws he dislikes. “A president is always
on much firmer ground in doing things that affect the executive branch
rather than trying to create new laws or enact programmes through
executive order that Congress rejected.”

Mr Trump, in short, may appear a colossus, towering over national politics,

but his own notional allies in Congress and the courts, let alone his
ideological opponents, are not willing to let him have everything his way.
Even on the right, Washington is full of people who intend to remain long
after Mr Trump’s term ends in 2029. Fawning deference to the president in
public will often conceal the pursuit of agendas that differ from his in
private. And America’s founding fathers, for good or for ill, designed a
system of government in which the gears were deliberately sprinkled with
sand. Mr Trump will never get them running smoothly. ■
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Asia
India’s Faustian pact with Russia is strengthening
Old friends, new plans :: The gamble behind $17bn of fresh deals with the Kremlin on oil and
arms

What North Korea gains by sending troops to fight for

Russia
Terms of trade :: Resources, technology, experience and a blood-soaked IOU

Is Arkadag the world’s greatest football team?

61-0 :: What could possibly explain the success of a club founded by Turkmenistan’s dictator

After the president’s arrest, what next for South Korea?

K-drama :: Some 3,000 police breached his compound. The country is dangerously divided

Can Donald Trump maintain Joe Biden’s network of Asian

alliances?
Banyan :: Discipline and creativity will help, but so will China’s actions

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Old friends, new plans

India’s Faustian pact with Russia is

strengthening
The gamble behind $17bn of fresh deals with the Kremlin on oil and arms
1月 16, 2025 07:44 上午

EVER SINCE the start of the war in Ukraine, the West has tried to persuade
India to distance itself from Russia. India has consistently rebuffed the
entreaties. Its officials have pointed out—in often testy exchanges—that the
Kremlin has been a stalwart friend for decades. Russia also accounts for
about 65% of India’s arms imports over the past 20-odd years. Besides, they
argued, India needs to nurture the relationship to offset warming ties
between Russia and China, India’s chief rival.

Western officials and observers concluded that this dynamic would change
over time as India increasingly relied on America and its allies for

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commercial and military partnerships. Their governments decided to
strengthen economic ties and provide more advanced defence technology
rather than hectoring India. Thus followed deals such as one with America
in 2023 to jointly manufacture fighter-jet engines on Indian soil.

India, however, sees its future with Russia very differently, as recent
developments make amply clear. First came news that Vladimir Putin,
Russia’s president, would visit India in early 2025. A few days later, on
December 8th, India’s defence minister, Rajnath Singh, arrived in Moscow
to discuss new defence deals, including the purchase of a $4bn radar
system. That was followed by the two countries’ biggest-ever energy
agreement, worth roughly $13bn a year. Rosneft, Russia’s state oil
company, is to supply some 500,000 barrels per day of crude oil to
Reliance, a private Indian refiner, for ten years.

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India has for the past few years cheerfully bought Russian oil for less than
the $60-per-barrel price cap imposed by Western sanctions, becoming the
world’s second-biggest buyer of the stuff after Chinan (see chart 1). In 2021
just 2% of India’s oil imports came from Russia. Between April and
October 2024 nearly 40% did. ICRA, a rating agency, estimates that
discounted Russian oil has saved India at least $13bn since the war in
Ukraine began.

Rather than winding down an old cold-war friendship, as Western officials

hoped, India is deepening defence, energy and other ties with a partner it

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sees as a source of prosperity and security and as a linchpin of its “multi-
aligned” foreign policy. And it is hoping that this will become less
controversial with the return to the White House of Donald Trump. The
president-elect was friendly with India during his first term. His pledges to
bring peace to Ukraine through negotiation with Russia, if he follows
through and meets with success, could also help ease pressure on Russia—
and thus India.

This bet could pay off. But the risks are severe. That was demonstrated on
January 10th when America escalated sanctions on Russian oil. New
measures target producers, insurers and traders, as well as the “dark” fleet
of tankers that often carries Russian shipments. India (and China) could be
forced to buy pricier oil from the Middle East. Indian state refiners are now
scrambling to speed payments for Russian crude and to secure delivery of
4.4m barrels currently at sea within a 48-day “wind-down” period allowed
by American authorities, according to Bloomberg.

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Mr Trump may ease the sanctions but that could take time, to preserve
leverage in peace talks with Russia. If talks fail, the war could drag on. And
even if they succeed, and sanctions are lifted, the new oil deal is likely to
add to India’s substantial trade deficit with Russia (see chart 2).

Turn next to defence. India has indeed become less reliant on Russian arms,
buying from France, Israel and others. Yet the prime minister, Narendra
Modi, continues to cut deals with Russia. In July 2024, just before Mr Modi
visited Moscow, a Russian state arms manufacturer announced that it would
make tank rounds in India. Mr Modi and Mr Putin then agreed to pursue

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joint weapons development and manufacture. Russian and Indian firms
already jointly produce weapons in India, including tanks, fighter jets and
missiles.

Mr Singh, the Indian defence minister, added substance on his own

Moscow visit by discussing the purchase of Russia’s Voronezh radar
system. It can identify and track a range of threats, including ballistic
missiles and aircraft, over distances of up to 8,000km (5,000 miles). That
would greatly enhance India’s capabilities, giving it coverage far into
China, a range accessible only to a few powers. Perhaps as important for
India, some 60% of its components would reportedly be made in the
country.

All of which suggests that India continues to view Russia as its primary
source of top-end weaponry, much of which America and its allies remain
reluctant to share. And that Mr Modi sees Russia, alongside any willing
Western partners, as a means to strengthen India’s defence industry.

Yet here too India faces risks. Its defence co-operation with Russia has been
plagued by problems, including the delayed delivery of the last two of five
S-400 missile systems that it bought in 2018. Poor performance of some
Russian weaponry in Ukraine has caused concern among Indian military
leaders. And India has postponed or cancelled talks on several deals to buy
or upgrade Russian equipment, citing logistical issues arising from the
Ukraine war.

Mr Putin’s India trip, meanwhile, has been presented as a routine exercise

following the two leaders’ vow to meet annually. Still, it would be his first
trip to India since his full-scale invasion of Ukraine. And it could provoke
the sort of PR disaster that marred Mr Modi’s Moscow visit, when he bear-
hugged Mr Putin shortly after a deadly Russian missile strike on Ukrainian
sites including a children’s hospital. Even without another such atrocity, the
visit is likely to undermine Mr Modi’s efforts to present India as a neutral
party in the war.

For Indian officials the risks of strengthening ties with Russia appear to be
acceptable. But they may be underestimating a longer-term problem. Russia
is a useful short-term source of energy and technology. But its demographic

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and economic prospects are grim, even were peace to return. India is also
exposing itself to fallout from Russia’s inevitable domestic turmoil—Mr
Putin cannot live for ever—to say nothing of further Kremlin misadventures
abroad. ■

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weekly newsletter.
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Terms of trade

What North Korea gains by

sending troops to fight for Russia
Resources, technology, experience and a blood-soaked IOU
1月 16, 2025 07:18 上午 | SEOUL AND WASHINGTON, DC

NORTH KOREAN television viewers had a treat just after New Year’s Day.
The state broadcaster aired “72 Hours”, a new film, according to NK News,
a North Korean-focused news site. The movie tells the story of the first
three days of the Korean war and how the conflict was started by the evil
South. (In fact, North Korea’s founder, Kim Il Sung, launched the initial
attack.) Among the propaganda messages embedded in the tale, a big one is
the importance of close ties with Moscow. The film’s fans include the
Russian ambassador in Pyongyang, North Korea’s capital.

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These days Russia and North Korea are writing a new battlefield history
together. North Korea has dispatched some 12,000 troops to fight in
Vladimir Putin’s war against Ukraine. The soldiers are believed to be some
of North Korea’s most elite, hailing from the “Storm Corps”, a special-
forces outfit whose lineage may trace back to units sent on a daring but
ultimately unsuccessful mission to assassinate South Korea’s president in
1968. North Koreans began appearing at the Ukrainian front in early
November and have entered in recent weeks into ever fiercer combat in
Russia’s Kursk region, where Ukrainian forces seized territory last year.

The idea to send troops to aid Russia apparently originated from the North
Korean side. The deployment brings big risks for Kim Jong Un, the
country’s leader. The fighting has been gruelling. North Korean troops
appear ill prepared for modern drone warfare and for the flat, open
landscape around Kursk, unlike the mountainous terrain back home. On
January 11th Volodymyr Zelensky, Ukraine’s president, said Ukraine had
taken two North Korean soldiers prisoner. South Korean intelligence
agencies estimate that perhaps 300 North Korean soldiers have been killed
and another 2,700 wounded. Ultimately such losses “may influence North
Korean society as well”, says Kim Yung-ho, South Korea’s minister of
unification.

What does Mr Kim get in exchange? Probably more of the assistance that
was already being sent in exchange for North Korean ammunition: fuel,
food and other resources, which help North Korea withstand Western
sanctions. Since North Korea began aiding Russia’s war effort around mid-
2023, there have been “unprecedented levels of traffic” observed in satellite
imagery of customs areas between the two, says Victor Cha of the Centre
for Strategic and International Studies, an American think-tank. South
Korean intelligence agencies reckon the North Korean state may be
receiving as much as $2,000 per month for each soldier it sends.

North Korea is also seeking higher-end capabilities. Designs for

intercontinental ballistic missiles and re-entry vehicles, as well as
submarine and satellite technology, are thought to be on the wishlist. Such
assistance can be harder to spot. “It’s a blueprint in a suitcase; we won’t

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necessarily see it,” says Bruce Klingner of the Heritage Foundation, another
American think-tank.

Western governments assess that Russia has become more willing to share
technical knowledge that it once considered off-limits. During a recent visit
to South Korea, Antony Blinken, America’s secretary of state, said that
America believes Russia intends to share advanced space and satellite
technology with North Korea in exchange for battlefield help.

Yet the exchange goes beyond material goods or weapons designs. There is
also a “softer tech transfer” taking place, says Peter Ward of the Sejong
Institute, a South Korean think-tank. North Korea can see how its
ammunition and missiles perform in real battlefield conditions and against
Western air-defence systems. Soldiers are also getting rare real-world
exposure to the front, and have an opportunity to learn from Russia’s
experience of modern warfare. But the most vivid lesson appears to be
about the importance of drones and electronic warfare on modern
battlefields. In November Mr Kim visited a North Korean factory to inspect
drone demonstrations and ordered large-scale production of suicide-drones.

There are limits to what can be gleaned. Russia may be keener to use North
Korean troops as cannon fodder than to involve them in sophisticated
operations. Many of the soldiers will never make it back to North Korea,
says Jenny Town of the Stimson Centre, a think-tank in Washington. Those
who do survive may learn plenty that their regime prefers they had not.
Controlling access to information among soldiers on the front is tricky.
Troops may also be able to see how wealthy Russia and Ukraine are by
comparison with their homeland. “They will come back with valuable
experience, but possibly also dangerous ideas,” says Andrei Lankov of
Kookmin University in Seoul.

Mr Kim has clearly decided the potential rewards outweigh any risks. The
ultimate prize may be forging a longer-term strategic partnership that
outlasts the war in Ukraine itself. Sending soldiers to die for Mr Putin’s
ambitions is certainly one way to signal commitment. As Ms Town puts it:
“There’s a blood debt now.” ■

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61-0

Is Arkadag the world’s greatest

football team?
What could possibly explain the success of a club founded by
Turkmenistan’s dictator
1月 16, 2025 07:18 上午 | ALMATY

ARKADAG ARE the undisputed champions of Turkmenistan. Founded in

2023, the football (soccer) team won every match in its first two domestic
seasons, ending a hot streak of 61 straight wins only in November, with a
loss to Kuwait’s Al-Arabi in an international game. The team came close to
the all-time record set by Scotland’s Celtic FC just over a century ago,
undefeated for 62 games. But some of Celtic’s matches were draws.
Arkadag can still claim the longest winning streak.

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Yet Guinness World Records, a chronicler of such achievements, has denied
Arkadag due recognition, granting the honour instead to Saudi Arabia’s Al-
Hilal, which boasts just 34 straight wins. Doubts about the Turkmen
league’s governance made it impossible to verify Arkadag’s claim. Still, the
self-reported streak is a remarkable feat. What is the key to Arkadag’s
success?

The clue is in the name. “Arkadag”, meaning “Protector”, is also the

honorific of Gurbanguly Berdymukhamedov, Turkmenistan’s president
from 2006 to 2022 and still the power behind the throne now occupied by
his son, Serdar. The pair rule in tandem, though the father’s ebullient
personality eclipses his dour son’s. Berdymukhamedov the elder is an
action man, with a love of racing-cars and horses, the national symbol of
Turkmenistan. A talented crooner as well as a high-performing sportsman,
he once celebrated Turkmenistan’s annual horse festival by rapping a paean
to the steed with his grandson. Like the team that bears his title, he tends to
win any contest he enters.

The sports-mad potentate oversaw the design of Arkadag’s strip and logo (a
white horse), and its state-of-the-art stadium sitting, naturally, in a place
called Arkadag. The town boasts a 40-metre-tall statue of its namesake (the
ex-president, not the football team) and a main street called Akhan, after his
favourite horse. Hence Arkadag, the leader, goes to Arkadag, the town, to
watch Arkadag, the football team.

Not everyone in Turkmenistan is pleased with the team’s triumphs. There

were mutterings of foul play after Arkadag poached players from other
teams. There are suspicions that referees favour the newcomers. Despite—
or perhaps because of—all that, Arkadag’s sporting future looks rosy. The
Protector will, after all, live up to his name. ■
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K-drama

After the president’s arrest, what

next for South Korea?
Some 3,000 police breached his compound. The country is dangerously
divided
1月 16, 2025 08:37 上午 | TOKYO

THE PRESIDENCY of South Korea can be a treacherous job. Past office-

holders have been impeached and even assassinated. But until January 15th,
when investigators took Yoon Suk Yeol into custody, a sitting president had
never been arrested.

Mr Yoon’s detention on insurrection charges stems from his attempt to

impose martial law last month. Since that self-coup failed, Mr Yoon has
barricaded himself inside the presidential residence in central Seoul. The
National Assembly impeached him on December 14th, temporarily

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suspending him from office and triggering a trial at the constitutional court.
Separately, investigators from the Corruption Investigation Office for High-
Ranking Officials (CIO) opened a criminal case against him. (Insurrection
is an exception to presidential immunity in South Korea.)

After Mr Yoon refused to appear for questioning, the CIO sought a warrant
for his arrest. The first attempt to serve it, on January 3rd, ended in failure
after an hours-long standoff between police officers and armed guards from
the presidential security service, which chose to protect the president. In
recent weeks the president’s residence has been reinforced with barbed wire
and buses, gearing up for a second standoff. The possibility of an armed
clash appeared disturbingly real.

The police came back better prepared on the morning of January 15th.
Some 3,000 officers assembled, according to Yonhap, a South Korean news
agency. They pushed past crowds of Mr Yoon’s supporters and breached the
walls before dawn, using ladders to climb over fences. But this time the
bodyguards put up little resistance, and Mr Yoon relented, saying in a video
statement that while he considered the warrant “illegal”, he co-operated in
order to avoid “unpleasant bloodshed”.

The arrest brings the embarrassing standoff between branches of the South
Korean state to an end. But it is far from the finale in the unfolding drama.
Investigators have 48 hours to question Mr Yoon; they must seek an
additional warrant to hold him for another 20 days. If an indictment is
upheld, it will trigger a criminal trial that could theoretically end with a
sentence of life imprisonment or, though very unlikely, even the death
penalty. Mr Yoon has pledged to fight the charges.

In the meantime the constitutional court is pressing forward with its trial.
The process must conclude within 180 days of the day he was impeached;
at least six of the eight judges hearing the case must vote in favour for the
impeachment to stand. If Mr Yoon is ultimately removed from office, South
Korea’s constitution mandates fresh presidential elections within 60 days.

The sustained turmoil is straining the country. The consumer-sentiment

index dipped to 88.4 in December, from 100.7 a month earlier, the biggest
single-month drop since the start of the pandemic. The unemployment rate

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also rose from 2.7% in November to 3.7% in December, the highest rate
since mid-2021. Following the impeachment in early 2017 of Park Geun-
hye, one of Mr Yoon’s predecessors, foreign direct investment fell by nearly
40% during the subsequent quarter; the current crisis could make investors
similarly skittish.

Mr Yoon’s intransigence in the face of the charges against him has helped
rally his supporters and further polarised the country’s politics. Many of his
core supporters have come to believe his claims of election fraud; some
have protested with signs reading “Stop the Steal”.

Though a majority of South Koreans still support Mr Yoon’s impeachment,

their numbers have shrunk: 64% say the president should be impeached,
down from 75% a month ago, while 32% say he should be reinstated to
office, according to polling by Gallup Korea. That probably will not save
Mr Yoon. But it suggests that the country’s political strife will outlast him.■
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Banyan

Can Donald Trump maintain Joe

Biden’s network of Asian alliances?
Discipline and creativity will help, but so will China’s actions
1月 16, 2025 07:18 上午

AN ATTEMPT TO stage a self-coup in a democratic country—and an

American ally to boot—should be the sort of thing that causes the resident
of the White House to have some strong views. Yet when Yoon Suk Yeol,
South Korea’s president, imposed martial law on his country early last
month, President Joe Biden stayed mum. His national security adviser, Jake
Sullivan, said events in South Korea raised “alarm bells”. It took more than
a month before Mr Sullivan could bring himself to call it “wrong”.

Why the reserve? Mr Yoon went further than any leader in South Korea’s
modern democratic history in reconciling his country with Japan, a

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development sought by American strategists for decades. A summit between
leaders of the three countries in 2023 seemed like a breakthrough. Amid the
uncertainty around Mr Yoon’s future in the immediate aftermath of the
coup, the Biden administration hedged its bets.

Now the trilateral seems more likely to break down. Its close association
with the polarising Mr Yoon had made it unpopular in South Korea from the
start. After his failed putsch, the stigma will be even greater. Any successor
is likely to at least slow, if not reverse, the changes that America had so
desired.

The link between South Korea and Japan was to be one strip in what Mr
Sullivan has called a “latticework” of new, overlapping partnerships among
American allies and security partners in Asia. This, he explains, differs from
the traditional “hub and spoke” structure of security co-operation in the
region, with America at its centre. The idea is for countries to reinforce each
other, rather than simply rely on America. It is likely to be remembered as
among Mr Biden’s most important legacies in Asia.

The success of the policy is visible in the partnerships that have emerged in
recent years. Japan and Australia are working closer than ever before. The
Philippines has signed new security deals with both of them. The Quad, a
security grouping that brings together the leaders of America, Australia,
India and Japan, usually annually, has been given new energy and elevated
in importance to the level of summit meetings. A submarine-building pact,
known as AUKUS, brings Britain into the picture.

Yet the South Korean setback exposes a problem with the way Mr Biden
and his team have woven their latticework. Though he wooed leaders like
Mr Yoon, he tended to alienate their political opponents. Some left-wing
legislators in South Korea say they got the cold shoulder when they tried to
talk about security policy with Mr Biden’s people. The same lawmakers
may soon be in power in Seoul.

Another potential problem is the latticework’s complexity. A better

metaphor might be a mechanical watch, with its many moving parts of
varying importance. Mr Biden’s aides argue it will keep ticking on,
regardless of who is in the White House, powered by anxiety about China’s

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rise. Others worry that without constant American attention and
maintenance, it will begin to fall apart.

Which is the more likely under Donald Trump? The president-elect has
little patience for complications, leaving them to his advisers. In the first
term they worked to turn Mr Trump’s instincts on Asia into a coherent
approach, reframing American policy in the region around what they called
“competition” with China. The new paradigm stuck. But their capacity to
carry it out was limited because many Asia-policy roles went unfilled for
long periods. Stray interventions by the president made it difficult to focus
on what mattered.

A more disciplined second term might let Mr Trump maintain the machine.
A creative team might even add to it. There was some of this in the first
term. Mike Pompeo, Mr Trump’s secretary of state, joined the first meeting
since 2007 of foreign ministers from Quad countries. Mr Trump also put
some life into diplomacy in the Pacific, becoming the first president to host
the leaders of the Marshall Islands, Micronesia and Palau—all American
protectorates—at the White House. The Biden administration built upon
these initiatives.

Mr Biden’s advisers wave away concerns about their successors’ diplomatic

finesse. In fact, they refuse to claim credit for the latticework themselves.
They attribute it instead to their Chinese counterparts, whose audacity
alarms America’s allies and has them drawing closer to each other. The
system, they say, works even in the absence of disciplined American
leadership—provided that China gives it a kick now and then. ■

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China
An initiative so feared that China has stopped saying its
name
The Voldemort of economic plans :: “Made in China 2025” has been a success, but at what
cost?

Why foreign law firms are leaving China

Closing time at the bar :: A number of them are in motion to vacate

An outrage that even China’s supine media has called out

Black jails and angry wails :: Anger is growing over a form of detention linked to torture and
deaths

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The Voldemort of economic plans

An initiative so feared that China

has stopped saying its name
“Made in China 2025” has been a success, but at what cost?
1月 16, 2025 07:18 上午 | BEIJING

LIKE LORD VOLDEMORT from Harry Potter, “Made in China 2025” is

an initiative which induces so much fear and loathing abroad that Chinese
officials dare not speak its name. The plan, introduced a decade ago, called
for pouring money and resources into dozens of industries. The goal was to
turn China into a green and innovative “manufacturing power”, one that
relied less on labour and Western supply chains, and more on automation
and new home-grown technologies. This was Xi Jinping’s vision for the
Chinese economy.

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It has, for the most part, been a resounding success. Aided by the
government, Chinese firms have risen to the very top of some industries.
They have grown more automated and sophisticated. The torrent of goods
coming from Chinese factories (and weak domestic demand) resulted in a
record trade surplus of nearly $1trn in 2024. But China’s success has had
consequences, ranging from economic distortions at home to a backlash
abroad.

The details of Made in China 2025 are laid out in hundreds of official
documents. A so-called “Green Book”, published by a committee of China’s
top engineers, identified targets for government largesse. Ten sectors,
ranging from information technology to aerospace, were chosen. Within
these, hundreds of industries were designated for support in the form of
direct subsidies, cheap credit and inexpensive land. Producers of such
things as solar panels, chips and aircraft benefited. The project covered
much of China’s industrial base.

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The goals were sometimes vague, but the plan also laid out dozens of
statistical benchmarks. China appears to have exceeded most of these. It
was already the world’s largest manufacturer in 2015, accounting for 26%
of global value added in this sector. In 2023 that number was 29% (see
chart 1). More impressive, though, has been China’s performance in fields
deemed important by the state.

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Two of the clearest examples are electric vehicles (EVs) and drones. The
plan called for Chinese companies to sell 3m of the former in 2025. That
shouldn’t be a problem: they sold more than 10m last year, accounting for
nearly two-thirds of the global total. In the last quarter of 2024 China’s
biggest EV-maker, BYD, surpassed Tesla, an American firm, in worldwide
sales of battery-only cars. China’s biggest drone-maker, DJI, is even more
dominant. Its share of the global market in consumer drones is over 90%.

In the area of clean energy the aims were fuzzy, but the gains of Chinese
companies are unambiguous. Whereas in 2015 they produced 65% of the
world’s solar panels and 47% of its batteries, today they are responsible for
around 90% and 70%. The government’s support means they can make
these things at lower cost than firms elsewhere. In much of the world, the
green transition is powered by kit made in China.

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Chinese manufacturers are making more stuff, but the government also
wanted them to make more innovative stuff. So the plan called on them to
funnel 1.68% of their total revenue into research and development by 2025,
up from less than 1% in 2015 (see chart 2). They achieved that objective in
2023. A related aim, for firms to file more patents, has also been surpassed.

Which goals remained elusive? China hoped to be manufacturing its own

large commercial aircraft by now. In 2023 the C919, a Chinese-made
passenger plane, did have its first commercial flight from Shanghai to

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Beijing. But it was made with many foreign parts. Western firms still supply
most of China’s passenger planes.

An even bigger disappointment has been the slow progress in

semiconductor production. Most Chinese companies are still only capable
of making mid-range chips. Things were gloomy in the sector even before
America imposed export controls on chips and chipmaking equipment.
Some argue that these restrictions have spurred innovative workarounds. In
2023 Huawei surprised America when it introduced a phone containing an
advanced seven-nanometre chip. Meanwhile, China is increasing the
subsidies flowing to companies such as SMIC, its largest foundry.

Made in China 2025 has, then, achieved most of its aims. But at what cost?
The fiscal expense is impossible to calculate. One attempt by the Centre for
Strategic and International Studies, a think-tank, estimated that China spent
over 1.7% of GDP on industrial policy in 2017-19, which would add up to
over $3trn in today’s dollars if sustained for a decade. That money could
have been spent on other things, such as health care, which might have
better served the public: fewer EVs, more ICUs.

Beyond the fiscal burden, China’s industrial ambitions have also required a
big commitment of labour and capital. China’s manufacturing workforce
was over 123m people in 2023. These labourers have become more
productive: output per worker has increased by roughly 6% a year on
average from 2014 to 2023, falling only modestly short of the government’s
goals.

But that performance required enormous inputs of capital. When this

investment is taken into account, things look less impressive. The economy
as a whole has fared badly on measures of “total-factor productivity” (TFP),
which try to capture the growth in output that cannot be explained by
increases in capital or labour. This disappointment has been felt in high
places. It may lie behind Mr Xi’s recent push to cultivate “new productive
forces”, which will supposedly contribute to TFP.

A different policy mix could have encouraged greater household spending,

not capital spending, and flourishing services, not manufacturing muscle.
These two shifts could have complemented each other nicely. As people

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grow richer, they devote a higher share of their budgets to education, health
and recreation rather than manufactured clutter. Stronger consumer
spending would, therefore, have been a boon to China’s service firms,
which account for the majority of employment. That, in turn, might have
bolstered the labour market and created more of the kinds of jobs that
China’s millions of university graduates are equipped to fill.

Too much of a good thing

As it is, Chinese buyers do not come close to purchasing all of the things
that Chinese factories produce. So the country is busy exporting the rest.
Angry trade partners accuse it of flooding their markets with cheap goods,
undercutting their companies and hollowing out their manufacturing
sectors. They launched almost 200 anti-dumping cases and other trade
investigations against China in 2024, according to official data. India,
which has its own “Make in India” initiative, made more complaints than
any other country.

The fears of China and its foreign critics tend to feed on each other. For Mr
Xi, the primary goal of Made in China 2025 is self-reliance. He talks of
taking things “into our own hands”. That task has become more urgent in
the face of foreign tariffs and export controls. Donald Trump’s return to the
White House, surrounded by China hawks, has undoubtedly reinforced Mr
Xi’s vision for the Chinese economy.

But even if America had not taken a hawkish turn, it is difficult to imagine
the Communist Party under Mr Xi pursuing a different strategy. “They
basically think that rich countries are those that make stuff and the richest
countries are those that make the most advanced stuff,” says Gerard
DiPippo of the RAND Corporation, a think-tank. Although in many ways
China’s big bet on industrial policy has paid off, there have also been large
downsides. Just as Voldemort twisted the behaviour of the people he
possessed, the policy that must not be named has skewed the evolution of
the economy it inhabited. ■

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Closing time at the bar

Why foreign law firms are leaving

China
A number of them are in motion to vacate
1月 16, 2025 07:18 上午 | BEIJING

LAWYERS TEND not to inspire much sympathy, but spare a thought for
the foreigners drafting briefs in China. For decades they have confronted a
politicised legal system and navigated a difficult regulatory environment.
Now they are facing new pressures. China’s sluggish economy and
geopolitical tensions have been bad for business, such that many big-name
foreign firms are leaving the country.

Most notable has been the exodus of American outfits. According to

Leopard Solutions, an analytics company, 35 of the top-tier American law
firms that maintained operations in Beijing or Shanghai (and in some cases

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both) at the end of 2023 had, one year later, reduced their presence or shut
up shop entirely. Among the most prominent is Paul, Weiss, Rifkind,
Wharton & Garrison. The firm opened its Beijing office in 1981 and
boasted of having “one of the longest continuous presences of any foreign
law firm in mainland China”. In December it said it was leaving.

The best explanation for all this is the simplest one: business has been
drying up as China’s economy cools down. “Work on mergers and
acquisitions is not just slower, it’s pretty much dead,” says an American
lawyer in Beijing. “It’s the same with IPOs.” Adding to the dismal picture is
a decline in foreign direct investment, which had kept lawyers busy dealing
with screening requirements and official reviews.

Other developments may also be affecting the calculations of foreign firms.

Some lawyers worry about China’s increasingly stringent rules on data
privacy and the transfer of information abroad. Those working on
international deals often have to keep foreign regulatory bodies in the loop.
But they risk running foul of the law in China if they provide those bodies
with information about Chinese firms. “People are not crazy to worry that
they could end up in big trouble,” says a foreign lawyer.

In the past American law firms thought it good for their reputation to have a
presence in China. “Now everyone is really down on the country and that’s
no longer the case,” says an American lawyer. In some ways, though, the
friction between China and America has actually increased transnational
legal work. Business involving sanctions, tariffs and export controls is
expected to grow under Donald Trump, who has promised a trade war with
China. But lawyers say such work is better done in Washington, as opposed
to Beijing.

China’s law firms are not immune to the country’s economic woes. They
have been lowering salaries and cutting staff. But the government helps
them out. Many receive subsidies, and state-owned enterprises are
encouraged to shun foreign firms.

Some Chinese lawyers see the foreigners’ exit as a tacit acknowledgment

that local firms are increasingly capable (and less expensive). During a
lecture at Harvard University eight years ago, Tao Jingzhou, a French-

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trained Chinese arbitration lawyer, told the audience that “the golden age of
foreign law firms in China” was coming to a close. Now that it is
happening, he is sad to see his foreign friends go, but proud of his Chinese
colleagues. ■

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Black jails and angry wails

An outrage that even China’s

supine media has called out
Anger is growing over a form of detention linked to torture and deaths
1月 16, 2025 08:37 上午

No-comfort station

ON DECEMBER 19TH relatives of Xing Yanjun gathered in Beijing to

mourn the businessman’s death eight months earlier, allegedly by hanging
himself while in police custody. At the event a document was read out. It
was a statement by the police that Xing’s case had been closed “in the
absence of criminal facts”. The outrage his death has caused, however, will
take far longer to dissipate.

Even in coverage by China’s normally supine media, Xing’s treatment is

cited as an example of abuses linked to a form of detention that has become

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increasingly common during the rule of Xi Jinping. It often involves
holding people incommunicado for weeks on end in brutal conditions
without charge. “Residential surveillance at a designated location” (RSDL),
as the system is called, is used by police to extract confessions when
evidence is flimsy, and to terrorise dissidents. In a country where people
rarely dare to criticise human-rights violations by officials, RSDL has
generated unusually outspoken debate.

It sprang from a legal provision of 1996 that allowed the police to keep
suspects at a “designated” location in cases where they would normally be
placed under house arrest but had no fixed abode. It was supposed to be less
restrictive than being kept in jail. But police began taking advantage of this
to keep any kind of suspect anywhere they wanted. A revision to the law in
2012 specified that designated locations could also be used in cases
involving threats to national security, terrorism and serious corruption. The
police took that as a green light to make the practice more regular, and to
build special facilities.

After Mr Xi took power in 2012, use of it mushroomed. The Supreme

People’s Procuratorate, a body responsible for prosecuting crimes and
supervising implementation of the law, has called out abuses. Last year it
noted the use of torture, including starvation and sleep deprivation, in 2019
during RSDL in Jiangsu province.

But despite persistent calls from Chinese legal scholars for the system to be
scrapped or curtailed, Mr Xi’s sweeping campaigns against corruption and
dissent have turbocharged its growth. In 2018 the Communist Party
launched a parallel secretive system called liuzhi (retention in custody) for
use in cases involving not only party members—who had always been
subject to extra-legal forms of detention—but anyone in public service,
including academics and hospital staff. RSDL and liuzhi can be used for up
to six months.

Safeguard Defenders, an NGO based in Spain, says cases it has analysed

show that fewer than 500 people were held under RSDL in 2013. In 2019
the number was over 6,000. According to research by a postgraduate
student at Hunan University of Arts and Science, instances of RSDL
doubled in the following year as police turned to it as a way of preventing

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the spread of covid-19 in jails. Last year a UN working group said the
actual number of RSDL detentions could be more than three times higher
than the number officially acknowledged. It called the use of RSDL or
liuzhi “tantamount to an enforced disappearance”. Safeguard Defenders has
published a “conservative estimate” that 64,900 people were subjected to
RSDL and 78,000 to liuzhi between 2013 and mid-2023.

Even before the legal revision in 2012, targets of RSDL included those who
dared to challenge the party. One was Ai Weiwei, a dissident artist who was
detained in Beijing for 81 days in 2011. He later put on exhibitions abroad
featuring large dioramas of his padded cell, with two guards standing over
him round the clock, even in the lavatory (pictured). Such confinement,
often with no cellmates and no access to a lawyer, is typical of both
systems.

Angling for entrepreneurs

RSDL is sometimes used in connection with another widely resented form

of police behaviour, commonly known as “deep-sea fishing”. It involves
sending police from one jurisdiction to another to arrest someone, usually a
businessman, in the hope that a spell of RSDL will prompt the target to
confess to a financial crime. The aim is to use resulting fines and asset
seizures to fill the jurisdiction’s coffers. This has become more common as
local governments struggle with enormous debt.

Xing, the businessman in Beijing, was a deep-sea catch. In November 2023

he was seized in the capital by police from Inner Mongolia who took him
back to that province, accusing him of running a gambling website. The
local authorities refused to approve his formal arrest, however, so the police
confined him under RSDL. His death last April prompted yet more calls for
the system’s abolition. “RSDL: When will the tragedy end?” said a headline
in a state-run newspaper. Many legal experts hope the answer is in the next
round of revisions to the Criminal Procedure Law. But that may not happen
before 2028—and the government is making no promises. ■

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United States
How will calamity change Los Angeles?
The fires–and next time :: Short-sighted policies amplified the destruction. Will LA–and
California–learn from their mistakes?

How bad will the smoke be for Angelenos’ health?

Smoke alarm :: Expect more sickness and disrupted schooling

How hard is it to run the Pentagon?

The mightiest bureaucracy on Earth :: A look at the responsibilities Donald Trump is giving to
Pete Hegseth, a former platoon leader

Tulsi Gabbard, Sean Penn and the hunt for an American

hostage
Damascene excursion :: A controversial trip to Syria in 2017 produced a possible sighting of
Austin Tice, an imprisoned journalist

How flush Americans feel depends on their views of Donald

Trump
Seeing red, feeling blue :: Republicans expect a Trumponomics boom, Democrats dread a bust

How Joe Biden wound up serving Donald Trump

Lexington :: In some ways, his administration will look less like an interregnum than like
MAGA-lite

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The fires–and next time

How will calamity change Los

Angeles?
Short-sighted policies amplified the destruction. Will LA–and California–
learn from their mistakes?
1月 16, 2025 08:40 上午 | LOS ANGELES

“MY HUSBAND SAW a glow on the hill,” explains Laurie Bilotta. She is
standing in her backyard in Pasadena pointing at Eaton Canyon, where the
Eaton Fire broke out on January 7th. In the few seconds it took for Bob, her
husband, to yell “Fire!”, the flames were as tall as she was. Then “the whole
mountain just exploded. There were just flames everywhere.” The couple
grabbed their two Siamese cats and drove south towards safety. By a
miracle their house survived.

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The Eaton Fire is one of several that have swept across Los Angeles
County. At least 25 people have died and more than 12,000 buildings have
been destroyed. Parts of Altadena, a neighbourhood set ablaze by
windblown embers, look as though a bomb has gone off. Only scraps—a
toy truck, a swing, one very resilient lemon tree—are left amid the ashes.

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After a week the fires were still burning, though firefighters had made
progress in containing them. Already experts are predicting that they will
prove the costliest in America’s history, largely because of where they broke
out. With nearly 10m residents, LA County is more populous than 40 of
America’s 50 states. Many Angelenos live in picturesque neighbourhoods,
set against the mountains, that are extremely vulnerable to wildfires. A
typical home in Pacific Palisades, a ritzy area razed by the flames, cost
more than $3m before the fire.

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Even as fire crews battle against the flames, locals are asking two questions.
How could Los Angeles have prepared better for this calamity? And how
will it change America’s second city?

Fires are common around LA because of its terrain and dryness, but several
factors have added to their destructive power. Climate change has increased
the risk of conflagration. California is seeing more weather “whiplash”,
where fires follow heavy rainfall. Los Angeles has been bombarded by
atmospheric rivers during the past two years, delivering heavier rain than
usual. Its vegetation flourished. But a lack of rain since May dried out those
plants, and primed them to burn.

Research from Patrick Brown of the Breakthrough Institute suggests that

clearing flammable vegetation around Los Angeles could reduce fire
intensity in 2050 by roughly 15% relative to today. But federal and state
laws often require onerous environmental reviews that can delay prescribed
burns for years.

The city’s building code is strict, requiring new homes to be reasonably

fire-resistant. But NIMBYism makes it hard to build new homes at all, so
much of the existing stock pre-dates the stricter rules. Old neighbourhoods,
full of homes with flammable wooden parts, stretch into the foothills.
Narrow roads wind through the canyons, leaving little room for firetrucks.
In the unincorporated parts of LA County, such as Altadena, nearly 90% of
homes were built before 1990. In fact, the largest share of houses were
constructed in the 1950s during LA’s postwar building boom.

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Californian politics has also hampered LA’s response to the fires. Not
because water was diverted from cities to save “an essentially worthless fish
called a smelt”, as Donald Trump claimed. But the state’s penchant for
policymaking by ballot measure (ie, referendum) has made it harder to fund
public services, such as firefighting, and distorted California’s home-
insurance market. In 1978 Californians voted to cut the property-tax rate
and limit future increases. Local tax revenues plummeted. To make up for
the fiscal shortfall, cities slapped fees on development projects, which
raised the cost of new construction.

In 1988 another ballot initiative, Proposition 103, limited how much

insurers can raise their rates. So premiums do not reflect the true (and
rising) risk of owning inadequately fireproofed homes in the most fire-
prone areas.

Several insurance firms, unable to afford the cost of reinsurance, have left
the state. California’s insurance commissioner last week banned insurers for
one year from cancelling the policies of clients living in areas affected by
the fires, making the state even less attractive to insurers.

When the smoke clears, the fires could change Los Angeles in several ways.
There will be political repercussions, for a start. Karen Bass, the mayor,

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travelled to Ghana despite fire-weather warnings. Her absence while the
city burned may not play well with voters, and Ms Bass faces re-election
next year. Her response to the fires will feature prominently in that
campaign.

Some residents may leave. Recent polling from the Public Policy Institute
of California (PPIC), a think-tank, suggests that a quarter of Angelenos
have considered moving to avoid the effects of climate change. Yet
Americans more broadly are moving into risky areas, not away from them.
A bigger threat to LA’s population growth is that housing costs may rise as
Angelenos displaced by the fires search for somewhere to live. Some 47%
of Los Angeles residents surveyed by PPIC in 2023 said they had thought
about leaving because of housing costs.

Another big question is whether the city will rebuild better. Playing host to
some World Cup games in 2026, the Super Bowl in 2027 and the Olympics
in 2028 will focus minds. Officials will want to show the world that LA has
recovered. Gavin Newsom, California’s Democratic governor, says he is
organising a “Marshall Plan” for the city, a reference to the aid America
sent Europe to rebuild after the second world war. “We already have a team
looking at reimagining LA 2.0,” he says. To this end he issued an executive
order streamlining the rebuilding of homes in burned areas.

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New homes will be subject to modern fire codes, which will help. Stephanie
Pincetl, who runs the California Centre for Sustainable Communities at the
University of California, Los Angeles, thinks the city should seize this
opportunity to ease its housing shortage by building denser, mixed-use
neighbourhoods. You can have palatial apartments, she offers, “but then you
have places where the cleaning lady can actually live and not have to take a
bus for an hour and a half across town.”

Looking across a charred Eaton Canyon, Mr Bilotta points out a few

mansions on the hilltop across the way. After a big fire wiped them out in
1993, bigger ones were built in their place. He thinks the same thing will
happen this time round. “There will be more larger homes over there,” he
says. “That’s just a guess.” ■

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Smoke alarm

How bad will the smoke be for

Angelenos’ health?
Expect more sickness and disrupted schooling
1月 16, 2025 07:18 上午

Cloudy with a chance of sickness

WHERE THERE is fire, there is smoke. For the people of Los Angeles, this
will add to the misery. Some are already suffering from burning throats and
irritated eyes. Many miles from the wildfires, people are wearing masks;
shops are running out. The fires may also cause long-term problems.

When flames consume household items such as batteries and plastic, toxins
are released into the air. A study in the Proceedings of the National
Academy of Sciences in 2024 found that long-term exposure to wildfire
smoke was linked to an increase in mortality from heart disease and

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diabetes. Other studies have found harmful effects, such as higher blood
pressure and weaker immune systems.

Wildfires can affect learning, too. Nine schools have been damaged or
destroyed by the LA fires, and over half a million children have been
affected by school closures. After disruptions in New Orleans after
Hurricane Katrina in 2005, maths scores dipped by between 0.10 and 0.25
standard deviations (the equivalent of 13 to 31 days of learning).

Breathing smoke may be bad for young brains. At small doses, the effect is
barely detectable: a Stanford University study found that exposure to
wildfire smoke at some point during a school year reduced pupils’ test
scores by the equivalent of less than a day of learning. But wildfires have
grown more intense since 2016, when the study ended, notes Marshall
Burke, one of its authors. He estimates that this month’s fires could cause
three to four days of learning loss for primary-school pupils whose schools
were not destroyed. Not a catastrophe, perhaps, but an unwelcome extra
burden for a suffering city. ■

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The mightiest bureaucracy on Earth

How hard is it to run the

Pentagon?
A look at the responsibilities Donald Trump is giving to Pete Hegseth, a
former platoon leader
1月 16, 2025 07:18 上午

“SO VAST IS the [Department of Defence] and so multifarious are its

missions,” wrote Ash Carter, America’s 25th secretary of defence, “that it
dwarfs most institutions on Earth.” The Pentagon owns or maintains almost
30m acres of property, he noted, an area larger than Pennsylvania. Its
carbon emissions are about 1% of the country’s total. Its annual budget, a
little over $800bn, exceeds the GDP Of Taiwan, Belgium or Argentina.

On January 14th Pete Hegseth, a Fox News presenter tapped by Mr Trump

to be his defence secretary, was grilled by the Senate. Much of the session

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was about the nominee’s alleged alcohol abuse, sexual assault and
opposition to women in combat. But Mr Hegseth also promised to “restore
the warrior ethos” to the Pentagon, reform its acquisitions process and deter
China. Is he up to those tasks?

The secretary of defence is one of the most powerful individuals in

government. The military chain of command runs from the president to the
defence secretary and then—skipping the joint chiefs of staff and the heads
of the army, navy and air force—on to the commanders who oversee
different parts of the world. “It would be very hard for a president to
override the advice he was getting from the secretary and the chairman [of
the joint chiefs of staff],” noted Dick Cheney, who ran the Pentagon for
George H.W. Bush.

Mr Hegseth would not have a role in the nuclear chain of command, which
runs directly from the president to nuclear units, though he would expect to
be consulted in a crisis. James Mattis, Donald Trump’s first secretary of
defence, is said to have slept in gym clothes for fear that the president might
order a nuclear strike on North Korea in the middle of the night. “You’re
never on vacation, you’re never on leave, you’re always on duty,” noted
Caspar Weinberger, Ronald Reagan’s secretary. Mr Cheney recalls riding to
work every morning with a CIA briefer in the car and a copy of the
president’s daily brief.

The secretary’s next task is to keep America’s vast military enterprise

ticking over. Parts of it are out of his hands. The Department of Veterans
Affairs spends over $300bn annually. The Department of Energy designs
and builds nuclear weapons. But the Pentagon has its own fingers in many
pies. The National Security Agency, America’s signals-intelligence service,
dwarfs the CIA and reports to the Pentagon. The department employs
around 700,000 civilians, around a third of the federal civilian workforce. It
contains multitudes: in 2015 it transpired that the Pentagon had spent $84m
—more than the defence budget of some small countries—on erectile-
dysfunction drugs.

The secretary is not just a commander and manager. He is also a diplomat.

“This turned out to be a bigger part of the job than I thought when I went
into it,” notes Mr Cheney. “You end up having to spend a fair amount of

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time dealing with other defence ministers, attending NATO quarterly
meetings, doing all of those things.” Lloyd Austin, Joe Biden’s defence
secretary, visited Asia a dozen times in four years. In October 2022 it also
fell to him to phone Sergei Shoigu, his Russian counterpart, twice in three
days, to warn him against using nuclear weapons.

In practice, Mr Hegseth would not have to run all this alone. “I’m gonna
hire a lot of smart people to help with this,” he promised the Senate. The
Pentagon’s chief operating officer is the deputy secretary of defence. He or
she essentially runs the department on a day-to-day basis and organises its
budget. Mr Trump has nominated Stephen Feinberg, a billionaire investor,
for that role. But even if Mr Hegseth takes no interest in the minutiae of his
department, he would need to offer a vision for its shape and direction. “It’s
like running a giant aircraft-carrier,” noted Eric Edelman, the Pentagon’s
policy chief in 2005-09. “You can’t just make…rapid course changes
without having ripple effects throughout the whole organisation.”

Mr Trump’s enthusiasm for using the armed forces for domestic tasks, from
border security to suppressing protests, has previously sucked the Pentagon
into deeply sensitive matters. Mark Esper, Mr Mattis’s successor, warned
the head of America’s national guard that the president might seek to use
military forces to help overturn the result of the election in 2020. In Mr
Trump’s first term, his several defence secretaries largely acted as a brake
on his instincts. At his hearing, Mr Hegseth repeatedly declined to say
whether he would obey orders to shoot protesters in the legs, as Mr Trump
had suggested.

The lot of the secretary is not always a happy one. Donald Rumsfeld, who
served in the job twice, latterly under George W. Bush, compared the
department to “one of the last decrepit dictators of the world”, in thrall to
central planning. Bob Gates, a former CIA chief who succeeded Rumsfeld,
seems to have hated almost every minute of the job, complaining in his
memoirs about the Pentagon’s suffocating bureaucracy and the torment of
dealing with Congress and the White House.

The magnitude of these responsibilities and the rigours of the job have
weighed heavily on office-holders. Robert McNamara, who had excelled at
corporate management and reform, demurred when first asked by John F.

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Kennedy to serve as secretary of defence weeks after becoming president of
the Ford Motor Company in 1960. Despite having run one of the most
important firms in the world, he thought it would be “a mistake to put a
person as inexperienced as I in government in such a position”. Mr Hegseth
has no such qualms. ■

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Damascene excursion

Tulsi Gabbard, Sean Penn and the

hunt for an American hostage
A controversial trip to Syria in 2017 produced a possible sighting of Austin
Tice, an imprisoned journalist
1月 16, 2025 08:37 上午

The woman who will explain the world to Donald Trump

EARLY IN 2019 a Lebanese-American businessman tried to bring a

stunning piece of information to the attention of Tulsi Gabbard, then a 37-
year-old Democratic congresswoman from Hawaii. The man told her that
two years earlier, while they were visiting Syria together, he had met Austin
Tice, a freelance American journalist abducted in 2012 while working
outside Damascus.

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The man who delivered the news was Elias Khawam, who had contacts in
the regime of Bashar al-Assad and had helped arrange Ms Gabbard’s four-
day visit to Syria in January 2017. According to sources familiar with the
details, reported for the first time here by The Economist, Mr Khawam said
that he saw Mr Tice in the flesh—which would make him the last known
person to do so. (A thus-far fruitless hunt for Mr Tice has been ongoing
since the fall of Mr Assad in December 2024.)

Austin Tice, American journalist

The contents of the conversation between Mr Khawam and Ms Gabbard,

who is now Donald Trump’s nominee for director of national intelligence
(DNI), are contested. She denies that she learned of Mr Khawam’s reported
meeting with Mr Tice. “She didn’t get that information,” said Alexa
Henning, a spokeswoman for Mr Trump’s transition team, responding to
questions for Ms Gabbard. “She got no actionable information about Mr
Tice. Otherwise, she would have acted on it.”

According to interviews with participants and others familiar with the

episode, the Tice case gives a glimpse of the labyrinthine twists of the
intelligence world that Ms Gabbard will enter if confirmed as DNI. The role
involves assessing intelligence reports for the president and making
recommendations about the multi-billion-dollar budgets of 18 different

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agencies. The ideal person for the job would be a savvy operator with
institutional experience, who has a vision of how to adapt to the age of
artificial intelligence. Ms Gabbard is not that.

Back then, Ms Gabbard was a lonely voice of understanding for Mr Assad,

despite his record of brutality against his own people, which included the
use of chemical weapons. On her trip in 2017 she became the first sitting
member of Congress to meet Mr Assad since the Arab Spring. She did not
inform her party’s leaders in advance, citing security concerns. Nor did she
co-ordinate her travel with the State Department. Adam Kinzinger, then a
Republican congressman, called Ms Gabbard’s visit to Syria “a shame and a
disgrace”. Her critics still see the visit as evidence of her poor judgment and
a reason for the Senate to deny her nomination.

Yet there was more to Ms Gabbard’s visit than has been previously
reported. She was serving as a conduit between Mr Trump and Mr Assad,
according to two people familiar with her trip. In mid-November 2016, after
Mr Trump’s defeat of Hillary Clinton, Ms Gabbard met the president-elect.
They discussed Syria, Ms Gabbard said afterwards. On January 16th, four
days before Mr Trump’s inauguration, Ms Gabbard met Mr Assad and
asked if he would speak directly to Mr Trump after the latter became
president, according to one of the people familiar with her visit. (According
to the second person, Ms Gabbard delivered a letter from Mr Trump.) Mr
Assad said he would be willing to speak to the president-elect and provided
Ms Gabbard with a phone number. (A version of this exchange was reported
by a Lebanese newspaper in April 2017.)

Ms Gabbard denies that any of this took place, Ms Henning said. She
reiterated a statement Ms Gabbard made about the Lebanese newspaper
account soon after it was published: “The Trump Administration was not
aware or involved in her trip in any way, and she did not relay any
communications from the Trump administration.” Ms Henning added that
there was “bad intelligence” being circulated in Washington about Ms
Gabbard from unknown sources.

Mr Khawam’s reported encounter with Mr Tice occurred later in the same

trip, while Ms Gabbard was meeting captured Islamist fighters who had
come from abroad to join the rebellion against the Assad regime. At a

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facility in Damascus, Mr Khawam was reportedly taken to another room,
where he was introduced to an American prisoner. The man did not identify
himself. He appeared frail and unkempt. He quickly shouted at Mr Khawam
to leave him, ending the exchange. The prisoner may have believed that Mr
Khawam was another interrogator. Afterwards, Mr Khawam searched
online for images of Mr Tice and recognised him as the prisoner, according
to information Mr Khawam later gave officials in the Trump administration
who were working on the case.

The prisoner

The encounter with Mr Tice was arranged by aides to Mr Assad. The

regime’s apparent motive was to show Mr Khawam, a trusted American
interlocutor, that Mr Tice was alive and in Syrian custody at a time when
Mr Assad hoped to negotiate humanitarian aid or sanctions relief with the
incoming Trump administration, using the imprisoned journalist as a
bargaining chip. (The Assad government continually denied that it held Mr
Tice.)

The Trump administration wanted Mr Tice back. Mike Pompeo, the new
CIA director, called a Syrian counterpart to ask about the journalist on
January 23rd, three days after Mr Trump’s inauguration. Mr Khawam later
told associates that he felt apprehensive about being drawn into the matter.
After more than a year had passed, contacts in Mr Assad’s regime urged Mr
Khawam to tell Ms Gabbard that he had met Mr Tice, in the apparent hope
that the information would kickstart negotiations.

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 Sean Penn, American actor

Early in January 2019 Mr Khawam met Ms Gabbard at a charity fundraiser

at the Wiltern Hotel in Los Angeles organised by Sean Penn, an actor. (Mr
Khawam had worked with Mr Penn on a film project in Syria.) Mr Khawam
pulled the congresswoman aside and told her for the first time about his
encounter with the American prisoner he believed to be Mr Tice, according
to people familiar with the episode. Ms Gabbard denies this happened.

Robert O’Brien, then the Trump administration’s lead hostage negotiator,

did not learn about Mr Khawam’s report through Ms Gabbard. The
information came through Mr Penn, who told him that Mr Khawam might
be able to help with the Tice case. American officials assessed Mr
Khawam’s information to be credible, if uncertain. Mr Penn, Mr O’Brien
and Mr Khawam met in late January and again the next month to explore
whether Mr Khawam’s contacts in Syria could create a channel through
which to negotiate for Mr Tice’s freedom. However, the effort foundered by
the end of 2019.

Mr O’Brien declined to discuss specific sources of information he received

about Mr Tice’s case, but said: “My policy was to talk to everybody” who
might have a lead. “We tried to exhaust every effort.”

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Mr Khawam’s report did not provide definitive “proof of life”; he had not
obtained a time-stamped photo or video of the prisoner. But it became a
new thread of intelligence about Mr Tice’s whereabouts and condition. Mr
O’Brien, who became Mr Trump’s national security adviser later in 2019,
pursued a multi-track effort until the end of 2020, but was unsuccessful.

Debra Tice, the journalist’s mother, said she has recently come to believe
that, across three administrations, the American government sat on key
leads and failed to push Assad’s regime hard enough. “Now what I’m
hearing is that the entire time they knew exactly where Austin was, who
was taking care of him—everything,” she said. “I just see what a huge
failure our government deliberately has been for Austin.”

The new details about Ms Gabbard’s journey to Damascus show that she
handled her diplomatic task professionally, a useful quality in a prospective
spy chief. Yet other concerns cloud her suitability to become DNI. Three
principal issues have been raised: her lack of relevant experience, her views
about America’s adversaries and her ability and willingness to analyse
complex situations impartially, which is arguably the DNI’s most important
task.

Consider first her CV. Ms Gabbard has an admirable record of military

service. She enlisted in the Hawaiian National Guard before she earned a
college degree, deployed to Iraq, gained admission to an officer candidate
school, and is today a lieutenant colonel in the Army Reserve. In Congress,
she served on the House Foreign Affairs Committee and the House Armed
Services Committee. Even so, Ms Gabbard has never helped run a large
organisation or worked in intelligence. Still, other members of Congress
have done the job before. If Ms Gabbard’s inexperience were the only
worry, she would be all but certain to be confirmed.

More troubling is Ms Gabbard’s “sympathy for dictators like Vladimir Putin

and Assad”, according to a letter signed by dozens of former national-
security officials. This is a touch hyperbolic. Ms Gabbard, who was
disillusioned by America’s wars in the Middle East, does not evince
“sympathy” for tyrants, but her ideology and policy views are certainly
aligned at times with their interests.

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What kind of intelligence?

Ms Gabbard has been a fan of Edward Snowden’s whistleblowing and a

sceptic of intrusive snooping by America’s counter-terrorism and counter-
intelligence officials. In 2019 she called Hillary Clinton, once her party’s
standard-bearer, “queen of warmongers”. By backing anti-Assad rebels, Ms
Gabbard argued, America had embarked on another “counter-productive
regime-change war” in Syria that could empower Islamic State and al-
Qaeda, and even lead to a nuclear war with Russia.

Ms Gabbard was hardly alone in these concerns, but her silence about Mr
Assad’s brutality gradually isolated her within the Democratic Party. She
began to look sympathetically on Mr Trump’s non-interventionism. She
became an independent after a failed run in 2020 for the Democrat
presidential nomination. In 2024 she endorsed Mr Trump for re-election.

Yet a DNI with unconventional foreign-policy views could be an asset. The

most glaring problem with Ms Gabbard’s nomination is that she cherry-
picks information or rehashes undocumented propaganda to advance her
views. The DNI’s most important job is to provide the president and cabinet
with vetted and impartial intelligence, including in the top-secret president’s
daily brief.

Like many others, Ms Gabbard has criticised the American intelligence

system for publishing inaccurate intelligence about Saddam Hussein’s
arsenal. Yet Ms Gabbard makes similar errors when citing evidence to back
up her provocative opinions. In 2019 she published a sceptical report about
two chemical-weapons attacks in Syria attributed to Mr Assad’s regime.
After auditing the report, Eliot Higgins, the founder of Bellingcat, an open-
source-investigations group, described it as Ms Gabbard’s own collection of
“fake intelligence, dodgy dossiers and lies”. In 2022 she released a video
suggesting that labs in Ukraine funded by America were developing
dangerous germs, a spurious line of propaganda used by Russia to try to
justify its unprovoked invasion.

The Senate’s Republican majority, under pressure from Mr Trump, may

well confirm Ms Gabbard. The Economist’s reporting showed that her trip

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to Syria in 2017 required her to navigate a poorly mapped landscape. But
the possibility that she will distort sensitive intelligence to advance her
views, or withhold information that undermines her opinions, would make
her appointment a serious risk. Mr Trump is already not particularly well-
informed. She would make him less so. ■

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with fast analysis of the most important political news, and Checks and
Balance, a weekly note from our Lexington columnist that examines the
state of American democracy and the issues that matter to voters.
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states/2025/01/15/tulsi-gabbard-sean-penn-and-the-hunt-for-an-american-hostage

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Seeing red, feeling blue

How flush Americans feel depends

on their views of Donald Trump
Republicans expect a Trumponomics boom, Democrats dread a bust
1月 16, 2025 09:08 上午 | Washington, DC

THE INCOMING president will dramatically improve the economy. That,

at least, is what Republicans think. Democrats are sure he will drive it into a
ditch.

Partisanship now colours responses even to questions that ought to be

straightforward, such as whether one’s personal finances are in good shape.
The best measure of the split is a monthly survey of consumer sentiment
conducted by the University of Michigan. In October, shortly before the
election, the index was 91.4 for Democratic respondents—a level consistent
with robust economic growth—and 53.6 for Republican respondents—a

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level seen during recessions. As soon as Mr Trump triumphed, opinions
flipped. Republicans are now much more optimistic about the state of the
economy (see chart).

Other gauges paint a similar picture. A weekly survey by The Economist

and YouGov, an online pollster, asks Americans to rate their personal
finances. On the eve of the election 63% of Republicans said they were
worse off than a year ago. Today, that figure is only 48%. Numerator,
another pollster, finds the biggest shift is in expectations. In October 25% of
respondents in right-leaning counties said the economy would be better in a

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year’s time. In November, following the election, 52% thought it would be
better.

To some degree these results are understandable: Mr Trump’s supporters

naturally think he will do a good job. Nevertheless, the partisan gap in
economic perceptions is bigger than it used to be. Ryan Cummings and
Neale Mahoney of Stanford University have found that Republicans tend to
“cheer louder” than Democrats do when someone from their party is in
office and also “boo harder” when the opposition is in power. Mr Trump
seems to have accentuated this tendency. According to the Michigan survey,
the sentiment figure for Democrats is down 27% since the election, whereas
the figure for Republicans is up by a whopping 63%.

Ultimately, though, perceptions of the economy are affected not just by

partisanship but also by the state of the economy itself. When times are
good, views among Democrats, Republicans and independents usually
move up in parallel, says Joanne Hsu of the University of Michigan. When
times are bad, they typically decline in tandem. Inflation may present a
litmus test. Republicans now believe that prices will rise by just 0.1% over
the next 12 months; Democrats think they will shoot up by 4.2%. There is,
in other words, plenty of scope for Democrats to be pleasantly surprised by
Trumponomics—and for Republicans to be rudely awakened. ■

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with fast analysis of the most important political news, and Checks and
Balance, a weekly note from our Lexington columnist that examines the
state of American democracy and the issues that matter to voters.
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Lexington

How Joe Biden wound up serving

Donald Trump
In some ways, his administration will look less like an interregnum than like
MAGA-lite
1月 16, 2025 07:18 上午

REMEMBER “INFRASTRUCTURE WEEK”? Donald Trump declared it

in his first year as president to build support for fulfilling his pledge to
spend prodigiously to fix America’s roads and bridges. Within the political
class, at least on the left, Infrastructure Week became shorthand for his
haplessness as, year after year, he failed to persuade Congress to commit
the funds.

Where he failed President Joe Biden succeeded, securing not just $1.2trn
but the very sorts of “Buy American” requirements Mr Trump envisioned.

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But as Mr Biden lamented recently to USA Today, he never got much credit
for the law because “It didn’t have any immediate impact on people’s
lives.” His administration did not spend most of the money, much less
complete the projects.

Now, with the legislative obstacle overcome, the only challenge facing
President-elect Trump, besides cashing cheques and cutting ribbons, is one
at which he excels: branding. Do not be surprised to see his name appear on
signs for public works paid for by Mr Biden’s law. Do not be surprised,
either, to see Mr Trump apply similar marketing savvy to Mr Biden’s other
landmark legislation, tweaking his laws to invest in energy and
semiconductors just enough to lay claim to them, much as Mr Trump did
during his first term with the North American Free-Trade Agreement.

The uncomfortable truth, for Democrats, is that there would be justice in Mr

Trump’s taking some credit. Though America may seem like a runaway car
bouncing between guardrails as it veers from Mr Trump to Mr Biden and
back again, Mr Biden advanced priorities that Mr Trump shares and often
articulated first, and always more forcefully. On trade, industrial policy,
energy, foreign affairs and even the rule of law, Mr Biden’s term can be
viewed less as a radical departure from Mr Trump’s than as MAGA-lite.

In politics and diplomacy, style is also substance, and here the difference
between the presidents is profound. Mr Trump’s instinct is to inflame where
Mr Biden’s is to soothe; Mr Trump’s madman theory of everything
guarantees an exhausting change from Mr Biden’s old-man execution of
everything. Another caveat is that, because Mr Trump’s priorities are not
ideological but opportunistic, they can change: President Biden is about to
deliver on former President Trump’s executive order to ban TikTok from
America or force its divestment from Chinese ownership. But President-
elect Trump now sees things differently. Noting how much attention he gets
there, he asked recently on his own social-media platform, Truth Social,
“Why would I want to ban TikTok?”

But the jarring differences of style, and Mr Trump’s volatility, belie an

overlap on policy. Like Mr Trump, Mr Biden put America’s economic
interest, as he saw it, at the centre of foreign policy. He signed no new free-
trade deals and made no effort to revive the Trans-Pacific Partnership,

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signed by Barack Obama, from which Mr Trump withdrew. Mr Biden kept
Mr Trump’s sanctions on China and piled on more. Though Mr Biden
emphasised multilateralism, he blindsided allies in what he saw as
America’s interest. A French foreign minister compared him to Mr Trump
“without the tweets” after Mr Biden revealed he had struck a deal to sell
submarines to Australia, replacing a contract with the French.

Mr Biden fulfilled Mr Trump’s plan to withdraw from Afghanistan, and it is

hard to imagine how Mr Trump could have provided a freer hand to Israel
as it waged war after the attacks of October 7th 2023. It is equally hard, of
course, to imagine Mr Trump being as deft as Mr Biden in rallying support
to frustrate Russia in Ukraine. Yet Mr Trump’s decisions as president to
provide Ukraine with lethal aid, to resist a new Russian gas pipeline to
Germany and to nag NATO allies to increase military spending now seem
consistent with Mr Biden’s eventual approach, even far-sighted.

The two presidents differ on climate change, and Mr Trump says he will
withdraw again from the Paris agreement to which Mr Biden recommitted
America. Mr Trump has promised to do away with Mr Biden’s subsidies for
electric vehicles and other environmental regulations. Yet again the
appearance overwhelms the substance: Mr Biden pumped record quantities
of fossil fuels, and Mr Trump is not likely to withdraw Mr Biden’s other
energy tax credits, most of which are flowing to Republican districts and
big oil.

Despite his own promises to repeal Mr Trump’s tax cuts, Mr Biden did not
touch them. He displayed Trumpian indifference to the national debt.
Obviously, the two presidents are opposed in the culture wars. These
increasingly define the parties, yet directly affect relatively few. Mr Trump
will probably reverse Mr Biden’s reversal of his ban on transgender people
serving in the armed forces, scoring political points nationally at cruel,
focused cost.

Fewer than three terms, more than two

Together with the related issue of abortion, the two presidents’ competition
over the courts differentiates them most sharply. Mr Biden managed,

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narrowly, to appoint more federal judges than Mr Trump. This contest, like
Mr Biden’s pardon of his son Hunter and Mr Trump’s promised pardons of
January 6th criminals, is persuading Americans that the courts are just
another arena for politics. In that sense, Mr Biden and Mr Trump, not
equally yet in tandem, have worked towards the same dismal outcome.

Mr Biden is handing Mr Trump a booming economy, along with falling

rates of violent crime and of opioid-overdose deaths. Thanks partly to
Trump restrictions that Mr Biden belatedly restored, fewer migrants are
being arrested crossing the border than at the end of Mr Trump’s first term,
an implicit admission that he was right and Mr Biden was wrong—
disastrously so, as a political matter—about illegal immigration. But Mr
Trump owes Mr Biden thanks for more than keeping the seat warm. Far
from marginalising the predecessor who is now his successor, Mr Biden
has, in the end, increased his chances of transforming America. ■

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which brings together the best of our leaders, columns, guest essays and
reader correspondence.
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The Americas
From Greenland to Panama and Mexico, leaders are in
shock
The Trump doctrine :: As Donald Trump eyes fine new pieces of real estate in the Americas
and beyond

Tether’s move to El Salvador is a win for President Nayib

Bukele
Crypto coup :: Why the stablecoin firm has picked the Central American country for its
headquarters

Canada has adopted assisted dying faster than anywhere

on Earth
Choosing your moment :: The province of Quebec now allows those with deteriorating
illnesses to request an assisted death in advance

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The Trump doctrine

From Greenland to Panama and

Mexico, leaders are in shock
As Donald Trump eyes fine new pieces of real estate in the Americas and
beyond
1月 16, 2025 07:48 上午 | Nuuk, Panama city and Washington, DC

A cargo ship passes through a lock of the Panama Canal in Panama.

AT MIRAFLORES LOCKS trains guide a ship through the water as a

gaggle of tourists looks on. More than a century after American engineers
completed the Panama Canal, and 25 years after the United States handed it
over to Panama, Donald Trump, the president-elect, says he wants it back.
The canal, he says, was a “gift” that should never have been given.

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Cargoes to or from the United States dominate traffic on the canal (see
chart). But it has been transformed since the handover. The legacy locks
now account for just half of the goods by weight that pass between the
Atlantic and Pacific oceans every day. Instead Neopanamax vessels up to
370 metres (1,215 feet) long pass through a new, larger set of locks.
Liquefied natural gas cargoes can make the trip from Texas and Louisiana

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to Asia in under a month. The canal’s upgrade was paid for by the
Panamanian government and finished in 2016 at a cost of $5.2bn.

The canal is part of a bigger piece of real estate that Mr Trump is eyeing.
He wants to influence territory and infrastructure close to the United States.
He views Mexico as a source of unwanted migration, drugs and Chinese
goods, Canada as a liberal dystopia and Greenland as a weak link. Some of
his remarks are bluster. The Gulf of Mexico, he says, should be renamed the
Gulf of America. Marjorie Taylor Greene, a congresswoman, has drawn up
legislation for that purpose; Mexico’s leader, Claudia Sheinbaum, has
retorted that much of the continent should be renamed Mexican America.
Mr Trump says Canada should become the 51st member of the United
States, but among just a few other problems with that, absorbing relatively
liberal Canada into the United States would dilute the Republicans’ political
clout.

Yet his remarks about the Panama Canal, Greenland and Mexico touch on
real sensitivities and have tangible consequences. On January 7th Mr Trump
said the canal was “vital to our country” and claimed that it is being
“operated by China”. On January 9th Dusty Johnson, a Republican
congressman, proposed a bill to authorise the purchase of the canal from
Panama’s government, citing “China’s interest in and presence around the
canal”. José Raúl Mulino, Panama’s president, has responded to Mr Trump
by saying that “every square metre of the canal” belongs to Panama and
will continue to do so.

MAGA claims that China operates or owns the canal are false. Nonetheless
Panama’s government has become cosy with China in recent years. “China
doesn’t have control of the canal, but it has taken advantage of weak
institutions and endemic corruption to increase its influence in national
politics and business,” says Alonso Illueca of Santa María La Antigua
Catholic University in Panama city. In June 2017 Panama’s government
ended diplomatic relations with Taiwan and established them with Beijing.
The United States’ ambassador to Panama found out an hour before the
switch. Chinese firms had already won contracts to build a port, a power
plant and a convention centre, but activity increased after the diplomatic
realignment.

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Panamanian politicians have enjoyed junkets to China. Xi Jinping, its
president, visited Panama in 2019. The construction of a Chinese embassy
near the mouth of the canal was scuppered after intense pressure from the
United States. American attempts to regain commercial influence have
flopped: Bechtel, an American firm, bid to participate in the canal-
expansion project but didn’t win. When a port concession held by a Hong
Kong firm came up for renewal in 2021, Panama’s government resisted
calls to open the tender and renewed the contract.

Mr Trump also says “The United States of America feels that the ownership
and control of Greenland is an absolute necessity” for “purposes of national
security”. He has refused to rule out using force. Mute Egede, Greenland’s
prime minister, says its 57,000 residents do not want to be either Americans
or part of Denmark, as they are at present. Mr Trump’s allies point to
China’s “Polar Silk Road”, a spree of infrastructure-building in the Arctic,
as a threat, but that is old news. Though Greenland’s cash-strapped
government did welcome Chinese investment a decade ago, pressure from
Danish and American officials often blocked Chinese projects. Chinese
mines have faced financial obstacles and local opposition. China’s activity
is now mostly confined to fisheries. A poll in 2024 showed that 25% of
Greenlanders would welcome more co-operation with China, down from
47% in 2021.

That big island

It is undeniable that Greenland is important to America’s national security.

The shortest route for Russian nuclear missiles to reach America’s east
coast goes right over the island: Pituffik Space Base in the territory’s north-
west hosts part of America’s missile-early-warning system. The so-called
Greenland-Iceland-United Kingdom gap plays a central role in the high-
stakes submarine contest between NATO members and Russia. “Frankly,
this is our backyard…Actually, it’s our front door,” says Tom Dans, a
former Trump appointee at the US Arctic Research Commission.

A majority of Greenlanders want independence from Denmark. Under a

2009 home-rule law they have a road map to achieving it, though they
remain divided on timing and economic viability. An independent

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Greenland could be vulnerable to coercion and be an unreliable ally.
Greenlanders can have a Panglossian view of geopolitics. The government
has advocated non-militarisation. In 2024 only 2% of Greenlanders
considered growing military tension their biggest challenge.

What next? As usual with Mr Trump’s wildest pronouncements, deals are

much more likely than extreme outcomes. There are ways to improve
security without Greenland becoming part of the United States. A military
and economic reset is looming. Denmark announced an Arctic military
package worth $2bn in December. The Danes are buying more anti-
submarine warfare kits, surveillance drones and ships, and plan to upgrade a
civilian airport to handle F-35 fighter jets flown by Denmark and the United
States. In Nuuk on January 13th Mr Egede said he had been “shocked” by
Mr Trump’s comments, yet at the same time signalled closer co-operation
on defence, and welcomed American investment in mining. “The US
doesn’t need to own Greenland in order to support its presence there,” says
Kristine Berzina of the German Marshall Fund, a think-tank.

Likewise, an American invasion of Panama is not on the cards. Mr Mulino

has rejected any negotiation over the canal, which brings in $5bn in annual
revenue. Yet it seems likely that Panama will try to deepen commercial and
diplomatic links with the United States, and to reduce its China connection.
America’s most important immediate neighbour sets an example here. On
January 13th Ms Sheinbaum announced a new “Plan Mexico” aimed at
reducing its dependence on inputs from China, and reaffirmed the centrality
of the USMCA trade deal linking the United States, Mexico and Canada.
Will it be enough to placate Mr Trump? She also revealed that she had not
been invited to the president-elect’s inauguration. Mr Trump is not about to
invade his neighbours. But he is unlikely to prioritise building reliable
partnerships either. The new doctrine is one of demanding deference. ■
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americas/2025/01/14/from-greenland-to-panama-and-mexico-leaders-are-in-shock

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Crypto coup

Tether’s move to El Salvador is a

win for President Nayib Bukele
Why the stablecoin firm has picked the Central American country for its
headquarters
1月 16, 2025 08:37 上午 | MEXICO CITY

“WELCOME HOME,” crowed President Nayib Bukele on X, a social

network. On January 13th Tether, the world’s leading stablecoin firm,
announced that it had chosen El Salvador as the location of its first physical
headquarters. (Stablecoins are cryptocurrencies whose value is supposed to
track that of another asset, such as the dollar or gold.) The move is a
triumph for Mr Bukele, who has been trying to turn the Central American
country of 6.3m people into a crypto oasis.

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In 2021 El Salvador became the first country to make bitcoin legal tender.
The government started buying up the digital asset. Many Salvadoreans
were not impressed: cryptocurrencies are a volatile store of value for a
country where GDP per person is just under $5,400. The IMF didn’t like it
either. But regardless of who likes it and who does not, El Salvador’s
bitcoin portfolio is currently worth some $585m. Mr Bukele has doubled
his money. Nonetheless, a deal between the IMF and El Salvador’s
government announced in December saw Mr Bukele agree to curb his
crypto embrace. Bitcoin will no longer be accepted for tax payments and
businesses are no longer required to accept it as legal tender.

Bagging Tether is a real victory. Its market value is three and a half times El
Salvador’s GDP. If the firm pays tax and creates jobs, it will be a boon.
Despite Mr Bukele’s crackdown on crime, which has made El Salvador
relatively more attractive to firms willing to overlook his authoritarian
methods, economic growth remains lacklustre. The IMF reckons GDP will
grow by 3% this year, more slowly than neighbouring countries. If Donald
Trump does deport some of the millions of people who entered the United
States illegally, it will hurt. Remittances are worth a quarter of Salvadorean
GDP.

There are risks, too. Basing a valuable firm in a small, poor country may
give its bosses excessive influence. James Bosworth, who writes the Latin
America Risk Report newsletter, worries that Mr Bukele’s relationship with
Tether may become too cosy and that stablecoins may be put to uses that are
less than transparent. ■

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understand the forces shaping a fascinating and complex region.
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Choosing your moment

Canada has adopted assisted dying

faster than anywhere on Earth
The province of Quebec now allows those with deteriorating illnesses to
request an assisted death in advance
1月 16, 2025 08:48 上午 | Ottawa

SANDRA DEMONTIGNY watched early-onset Alzheimer’s transform her

athletic father from a robust patriarch into a battered shell of a man. Once
the disease took hold, his untethered energy compelled him to walk into
walls and crawl aimlessly along floors. He died aged 53, his face streaked
with tears of frustration. When Ms Demontigny was diagnosed with the
same, fatal neurodegenerative disease at 39, she vowed that she would not
endure her father’s undignified death. Now she can take comfort in
knowing she will not.

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A new law adopted in the province of Quebec on October 31st allows Ms
Demontigny to request what Canadians call medical assistance in dying
(MAID) long in advance of her deterioration. It represents a significant
expansion of Canada’s federal laws on assisted dying, which require
patients to provide consent immediately before they receive a set of lethal
injections. In Quebec, patients with an illness that will eventually render
them incapable of granting that consent can now make arrangements for
MAID months or even years in the future, long before their condition
deteriorates. Ms Demontigny, a radiant 45-year-old, says she is immensely
relieved that her death will come at a point of her choosing, and feels that it
will be more dignified for that.

Slightly over 1,000 Canadians opted for a doctor-assisted death in 2016, the
first year in which it was permitted. By 2023 that number had risen to
15,343, 4.7% of the 326,571 deaths in Canada that year. No country that
permits assisted dying has seen faster growth in the practice. (The
Netherlands has allowed assisted dying for more than two decades, and it
accounts for a higher share of deaths there than in any other country, 5.4%
as of 2023.)

A popular practice

Nowhere in Canada has adopted MAID faster than the French-speaking

province of Quebec. The share of deaths in the province that were doctor-
assisted reached 7.2% in 2023. Michel Bureau, who heads a commission on
end-of-life care that reports to the provincial legislature, says there is little
doubt that the province carries out the highest number of doctor-assisted
deaths in the world relative to its population. He says that Quebeckers now
see MAID as a fundamental part of their medical system. Surveys suggest
that three-quarters of Canadians support MAID. In Quebec that number is
86%. Dr Bureau says the number of people in Quebec choosing MAID will
keep rising, now that consent may be given in advance.

That pleases Georges L’Espérance, a retired neurosurgeon who runs the

Quebec Association for the Right to Die with Dignity. He says he has
helped hundreds of people end their lives, and has noticed a rise in requests
for his services since the law was changed in October. His relationships

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with patients seeking MAID tend to be very different from those shared
with patients awaiting brain surgery. He usually met people going under the
knife for a single consultation before surgery. Applying for MAID is a
multi-step process that requires repeated meetings with patients and can run
over several years.

Dr L’Espérance says MAID patients know there is no hope their lives can
be improved, but that “people are smiling 15 minutes before they know they
are going to die. They talk, share a glass of wine, and tell their family
members how much they are loved.” He stays with family members for at
least an hour after patients die. He answers all their questions. Often they
embrace him. “I never had that experience as a surgeon,” he says.

Opponents of MAID’s expansion in Canada say that too few of the doctors
recommend traditional palliative care as an alternative. Dr L’Espérance and
others point to statistics suggesting that 78% of those who opt
for MAID have tried palliative care first. Opponents also worry that some
patients choose MAID because Canada’s strained, publicly funded health-
care system has failed them.

A report published in October by the coroner from Canada’s most populous

province, Ontario, stated that 116 people who were given MAID in 2023
(2.5% of the 4,644 in total) were struggling with disabilities, but not dying.
One man in his late 40s who suffered from severe ulcers, multiple mental
illnesses and chronic suicidal thoughts ended his life with the help of a
doctor. The report found that people who opted for MAID tended
disproportionately to have lived in areas with poor access to housing and
labour markets, though it notes that this could simply be because old and
disabled people tend to live in those areas. The coroner also found that
people opting for MAID lived disproportionately in white neighbourhoods.

Live and let die

The federal government has deferred until 2027 a decision on allowing

mentally ill patients to apply for MAID. But although it could have
challenged Quebec’s expansion of the practice, it has chosen not to.
Canada’s health minister, Mark Holland, cited the torment his grandmother

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endured in her final years with Alzheimer’s in his decision to allow Quebec
to go ahead.

Ms Demontigny has been speaking to her husband and their three children
about the kind of life she wants to live before she dies. Those conversations
have been a gift to a woman who feared an agonising death: “I am so
relieved. I’m a naturally joyful person. I can find beauty in what others
might find ugly.” ■
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americas/2025/01/16/canada-has-adopted-assisted-dying-faster-than-anywhere-on-earth

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Middle East & Africa

After 15 months of hell, Israel and Hamas sign a ceasefire
deal
A ceasefire in Gaza at last :: Donald Trump provided the X factor by putting heat on Binyamin
Netanyahu, who insists the war isn’t over yet

First, the ceasefire. Next the Trump effect could upend the
Middle East
The Arabs, Iran and Israel :: Will Israel and Donald Trump use the threat of annexation to
secure a new grand bargain?

Violent jihadists are getting frustrated by the new Syria

A new leader under pressure :: Tipsy dancers, Christmas decorations, Shias and women’s
rights are in the crosshairs

West African booze is becoming a luxury product

Spirits of resistance :: Female entrepreneurs are leading the charge

A hidden refuge in Sudan that the internet, banks—and

war—can’t reach
Heading for a break-up :: A visit to the Nuba mountains provides a glimpse into the future of
the country

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A ceasefire in Gaza at last

After 15 months of hell, Israel and

Hamas sign a ceasefire deal
Donald Trump provided the X factor by putting heat on Binyamin
Netanyahu, who insists the war isn’t over yet
1月 16, 2025 08:37 上午

AFTER MORE than 15 months of war and just five days before Donald
Trump is inaugurated as America’s 47th president on January 20th, a
ceasefire in Gaza was at last announced. The deal, struck on January 15th,
is essentially the same proposal Joe Biden extracted from Israel in May. It
took eight months of tortuous mediation and the efforts of both old and new
American administrations, Egypt and Qatar, to get Israel and Hamas, Gaza’s
Islamists, to accept it. On January 16th Israel said that Hamas was reneging
on some aspects but it has not yet been abandoned.

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Mr Trump seems to have been the X factor. He made it clear to the Israelis
he has no desire to enter the White House having to manage yet more war
in the Middle East. That seems to have helped secure a deal in Lebanon,
and now one in Gaza.

Read all our coverage of the war in the Middle East

During the first phase of the truce, meant to last six weeks, Hamas will free
33 of the 98 Israeli hostages still in Gaza, in exchange for hundreds of
Palestinian prisoners. Further talks will be held to finalise the next stage of
Israel’s withdrawal and the release of the remaining hostages.

It is too soon to say the war is over. Each stage is fraught with risk. It is
unclear how many hostages are still alive (Israeli intelligence believes
around half of them). Nor is it certain that Hamas can deliver them all, since
some were captured by other Palestinian groups. Israel, which currently
occupies about a third of Gaza’s territory, is demanding security guarantees
in future phases, which Hamas will be loth to accept. And Israel’s
government still insists it is fighting for “total victory”, refusing to accept
officially that the war could soon end.

Meanwhile Hamas is divided between its leaders outside Gaza, who have
proved more flexible in the talks, and its surviving commanders in the
enclave, led by Muhammad Sinwar, a younger brother of Yahya, the
mastermind of the October 7th attack who was killed by Israel last October.
The younger Mr Sinwar now controls the fate of the Israeli hostages. He is
eager to prove to Palestinians and the rest of Hamas that he can drive a
tougher bargain in return for freeing the captives. He insisted on being the
last to give his assent to the ceasefire and may yet scupper it.

In Israel, too, Binyamin Netanyahu, the prime minister, still has to bring the
accord to his cabinet, where his more radical ministers remain opposed to
ending the war. He will almost certainly win that vote, but his government
may collapse as a result. Still, now that he has promised Mr Trump a deal, it
will be difficult for him to wriggle out of it, as he has done so often before.

Mr Trump’s approach is yielding results in part because his team has little
truck with the diplomatic niceties of the outgoing bunch. When Mr Trump’s

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new envoy to the Middle East, Steve Witkoff, a New York real-estate
mogul, arrived in Israel for talks on January 11th, he brusquely informed
the Israelis he would not wait for the Sabbath to end to meet Mr Netanyahu.

But it is not just manners. Despite his five decades of support for the Jewish
state, Mr Biden is less popular in Israel than Mr Trump. Mr Netanyahu
could at least tell his supporters that by refusing Mr Biden’s demands he
was standing up for Israel’s interests. His argument is less convincing when
the Israeli right sees Mr Trump as friendlier than his predecessor.

If the ceasefire holds, what next? For over a year Mr Biden and his
representatives have dangled the possibility of a grand bargain, which
would include an official alliance between Israel and the Saudis, as an
incentive for ending the war in Gaza and relaunching a diplomatic process
that would lead eventually to a Palestinian state. Mr Netanyahu demurred.
The deal with Hamas is a sign that he may finally be shifting in that
direction, and not only because Mr Trump is more insistent.

In the past year Israel has gone to war with Hizbullah, the Iranian-backed
Shia movement in Lebanon, destroying much of its military capabilities and
eliminating its senior leadership. It has done the same to Hamas in Gaza.
Mr Netanyahu claims to have “changed the face of the Middle East”. He
has taken credit for the fall of the regime in Syria. Now he may be ready to
secure what he believes would be his legacy as Israel’s long-serving leader:
a deal with the Saudis which he hopes would weaken Iran and curb its
regional ambitions.

To do so would probably mean losing his majority in the Knesset, Israel’s

parliament. His far-right allies have threatened to abandon him if Israel ends
the war in Gaza. Itamar Ben-Gvir, the national security minister, called the
deal with Hamas “terrible” and said it “squanders the achievements of the
war so far in Gaza, which cost much blood of our fighters”.

Mr Netanyahu is trying to keep his radical partners on side by promising

them that the war is not yet over. But those close to the prime minister
acknowledge that unless Hamas throws a spanner in the works, he is now
prepared to go the full course, even if it means losing his majority. Some
opposition parties have committed to supporting the government to ensure

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the Israeli hostages are released, and once the deal is done, he believes he
will be in a better position to face an early election.

Israel’s successes, against Hizbullah in particular, have revived Mr

Netanyahu’s flagging popularity, at least somewhat. And a clear majority of
Israelis now support a deal to end the war. In talks with the far right the
prime minister has emphasised that the second stage of the deal leading to a
full Israeli withdrawal and permanent ceasefire is far from inevitable. This
is true, but Mr Netanyahu knows that a return to full warfare in Gaza would
mean incurring the wrath of Mr Trump, a president whom, unlike the
outgoing one, the prime minister fears crossing. ■

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The Arabs, Iran and Israel

First, the ceasefire. Next the Trump

effect could upend the Middle East
Will Israel and Donald Trump use the threat of annexation to secure a new
grand bargain?
1月 16, 2025 07:18 上午 | DUBAI

What is coming down the road?

EVEN BEFORE the ceasefire in Gaza Donald Trump had begun to reshape
the Middle East. He was influential in pushing Israel to a truce with
Lebanon in November. The fragile deal struck between Israel and Hamas on
January 15th further reduces the intensity of the fighting in the region and
resets Israel’s domestic politics. It will also reinforce the president-elect’s
power over the Arab states that helped broker the deal, and over Binyamin
Netanyahu, the Israeli prime minister.

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He will need all the leverage he can get. As Mr Trump enters the White
House, he and his advisers face huge decisions about what policies to
pursue in a region that has been transformed since his first term.

Read all our coverage of the war in the Middle East

One dilemma is how much effort Mr Trump should expend on the region. In
his first term he pushed the Abraham accords, which normalised relations
between Israel and several Arab states, and drew up a peace plan for Israel
and the Palestinians (which was quickly shelved). His second stint as
president brings knottier questions, like who should govern the ruins of
post-war Gaza. The other dilemma is choosing between competing visions
of the region’s future: whether to enable Israel’s hard right, or constrain it in
pursuit of a grand bargain with Saudi Arabia.

Such a bargain would potentially have a knock-on benefit, of creating a

stronger grouping of Middle East countries opposed to Iran, making it
easier for America and its allies to contain the Islamic Republic or weaken
it further and force it to the bargaining table. Mike Waltz, the incoming
national security adviser, calls it a “huge priority”. Mr Trump sees it as his
ticket to a Nobel peace prize.

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Social Media Pakistan 0342-4938217
The agenda of right-wing Israelis remains ambitious. They dream of
rebuilding settlements in Gaza and of annexing the occupied West Bank
(see map), and are bullish about Israel’s recent incursions into Lebanon and
Syria. One of the most extreme individuals in Mr Netanyahu’s coalition is
Bezalel Smotrich, the hard-right finance minister. He has already spent the
past two years trying to bring about a de facto annexation of the West Bank,
pushing through bureaucratic changes that make it easier to expand Jewish
settlements there. He has also worked to bankrupt the Palestinian Authority
(PA), which governs parts of the territory, in part by freezing tax revenues
collected on its behalf.

When the United Arab Emirates (UAE) normalised relations with Israel in
2020, under the Abraham accords, it extracted a concession from Mr
Netanyahu, who abandoned a plan to annex parts of the West Bank. Emirati
officials could claim they acted to support the Palestinians, staving off a
plan that would have killed the hope for an independent Palestine.

But Mr Netanyahu had not sworn off annexation for ever. “The word
‘suspend’ was chosen carefully by all parties,” said David Friedman, then
America’s ambassador to Israel. “It’s off the table now, but it’s not off the
table permanently.” In private, American and Arab diplomats said Israel had
promised not to pursue annexation until the end of 2024.

The project of an expansive Israel also has sympathisers within Mr Trump’s

swirling group of advisers, among them Mike Huckabee, tipped to be the
next ambassador to Israel, an evangelical Christian who believes there is
“no such thing as a settlement”. Yet for all that, the Gaza ceasefire points in
a different direction. Many of Mr Trump’s close advisers—including his
son-in-law, Jared Kushner, and his Middle East envoy, Steve Witkoff—have
ambitious plans for regional diplomacy. Allowing Israel to annex the West
Bank would scuttle those and lay the groundwork for renewed conflict with
the Palestinians.

A major consideration is Saudi Arabia. Muhammad bin Salman, the Saudi

crown prince and de facto ruler, is eager for a deal that normalises relations
with Israel. He sees it as the gateway to better relations with America,
which has offered a formal defence treaty, nuclear co-operation and other
sweeteners. The plight of the Palestinians does not move him as it does

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older Saudi royals. Before the war Prince Muhammad was willing to make
a deal that offered them few benefits: he wanted Israel merely to make a
gesture towards ending its occupation. But the past year has forced him to
take a tougher stance.

In a televised speech in September, Prince Muhammad said the kingdom

would not normalise relations with Israel until a Palestinian state was
established. Well-connected Saudis expect the crown prince will eventually
soften his position. But for now the bar seems high.

Some officials in Washington and Jerusalem wonder if they might use the
threat of annexation as a lure. The Saudis would be presented with a choice:
normalise relations with Israel, or Mr Netanyahu will let his coalition
partners move ahead with their plans. Perhaps such an ultimatum, the
thinking goes, would give Prince Muhammad an excuse to do the deal.

But the crown prince cannot act as freely as his Emirati counterpart. He has
plenty of enemies in the kingdom: royals, clerics and spies whom he
crossed on his rise to power. He also has 19m citizens to worry about,
compared with just 1m in the UAE. Some are already grumbling about an
economic programme that has made them feel poorer. Many believe Israel
is committing genocide in Gaza. Prince Muhammad is said to have told
American interlocutors he fears going the way of Anwar Sadat, the
Egyptian leader assassinated after he made peace with Israel.

A deal establishing diplomatic relations between Israel and Saudi Arabia

will have to go far beyond ruling out annexation. The Saudis will want a
credible Israeli commitment to Palestinian statehood. That, in turn, requires
a reset of Israeli politics, with Mr Netanyahu facing down the hard-right
parties that he has come to rely on in order to build a viable coalition.

The Gaza ceasefire showed a new dynamic in play, with Mr Trump putting
pressure on Mr Netanyahu, who then overruled the extremists in his
cabinet. But Mr Netanyahu has yet to fully cross the rubicon: he continues
to maintain that the war has not ended and that Israel seeks a total victory
over Hamas. Far-right lawmakers have threatened to leave the coalition
over the ceasefire—although that might be an empty threat, with polls
showing they would fare poorly in early elections.

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What if Mr Netanyahu calls their bluff? He, or a future Israeli leader, could
pursue a grand bargain backed by Mr Trump. But a huge outstanding
question would still remain: the status of Gaza. Hamas has lost its top
leadership and thousands of fighters during the war, but it has had no
trouble finding more amid the strip’s teeming misery. “We assess that
Hamas has recruited almost as many new militants as it has lost,” Antony
Blinken, America’s secretary of state, said in a speech on January 14th.

The group’s past wars with Israel followed a familiar pattern. Gaza endured
days or weeks of bombardment. Once a ceasefire took hold, donor countries
stepped in to fix the damage. Hamas retained its grip on power. It hopes to
do the same this time. If it does, though, it is unlikely Gaza will be rebuilt
soon.

The UN estimates that there are now 40m tonnes of debris in Gaza, enough
to fill New York’s Central Park to a depth of eight metres. Hundreds of
thousands of homes have been destroyed; experts think it will take until at
least 2040 to rebuild them. With the economy in ruins, almost the entire
population will depend on foreign aid. Reconstruction will cost tens of
billions of dollars—but few Western or Arab donors will be willing to work
with a Hamas-led government.

Saudi officials say they are keen to help the Palestinians, but they want
Hamas out of power. So does the UAE, which has a warm relationship with
Israel and loathes Islamist groups. Qatar is friendly with Hamas, but it
worries about the diplomatic consequences of funding the group, especially
with Mr Trump returning to office.

Hamas will not find it easy to wield power in post-war Gaza—but there are
also no easy alternatives to its rule. Mr Biden had been keen for the PA to
take control of the territory. Mr Netanyahu refused even to discuss the idea,
let alone pursue it; he hoped to dump the job on Arab states. Mr Trump’s
views are a mystery. If he does not pursue a viable plan for governing the
strip, the ceasefire will remain fragile: reconstruction is meant to be part of
the deal. Israel will remain isolated. Ending the war will not buy it much
goodwill if Gaza still resembles an enormous refugee camp.

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Much has changed in the Middle East. That does not mean anything is
possible, though. A Saudi-Israeli deal is a realistic goal in the next four
years, but it may not be possible to strong-arm the Saudis.

Nor will Mr Trump negotiate that deal in isolation. He has also promised
another round of “maximum pressure” aimed at forcing Iran into a
diplomatic agreement that restrains its nuclear programme and, perhaps, its
support for regional militias as well. The events of the past year have left
those militias deeply weakened. Hizbullah, the Iranian-backed Shia group
in Lebanon, is no longer in a position to menace Israel. The Assad regime in
Syria has collapsed, yielding to an interim government that seeks
accommodation with Israel.

Empowering Israel’s far right would jeopardise these gains: the Palestinian
cause can still mobilise violence and unrest across the region. On the other
hand, a durable peace in Gaza and a fair settlement for the Palestinians
would get Mr Trump the deal he covets—and probably the peace prize, too.
■

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A new leader under pressure

Violent jihadists are getting

frustrated by the new Syria
Tipsy dancers, Christmas decorations, Shias and women’s rights are in the
crosshairs
1月 16, 2025 07:18 上午 | Damascus

Badgered and bearded

THE NEW commander of the old city of Damascus was miffed. Syria’s
new de facto leader, Ahmed al-Sharaa, had just reversed his order to take
over a grand old Ottoman palace. The arthouse within it had been used for
“improper behaviour”, the commander insisted. Its resident female artists
would sinfully come and go at all hours of the night, so he had posted two
armed jihadists to make them remove their books, sketches and sound
system by New Year’s Eve—and then get out.

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Had the intervention been an exception, the commander might have
stomached it. But since he and his fellow jihadists advanced from Idlib,
their northern enclave, and toppled the Assads on December 8th, such
rulings by Mr Sharaa have come thick and fast. He ordered the commander
to leave crosses on top of churches, to protect the Christmas decorations of
Christians and to respect the shrines of Shia Muslims (or “rejectionists”, as
the Sunni jihadists call them). Mr Sharaa even told them to leave alone the
bars where tipsy men and women were dancing together to ring in the new
year. In Idlib those committing such depravity would have been killed,
converted or expelled.

Frustration with Mr Sharaa is mounting among the Sunni fighters who

toppled the Assad regime. Zealots among them, like the commander, worry
he is ditching the jihadist faith he championed for 20 years. His supporters
in the countryside, which was his heartland, fear they will be forgotten.
Veterans who risked their lives, homes and jobs to join the rebellion worry
that they have empowered another despot. The country has many
discontents. But “the Sunni veterans could be the biggest faultline in the
new Syria,” says Malik al-Abdeh, a Syrian analyst in Damascus with ties to
the new order.

Religion is perhaps Mr Sharaa’s biggest challenge. In the past decade a new

generation who fled to the hills have been brought up as Salafists, puritans
who seek to replicate the mores of the Prophet Muhammad. Today’s
jihadists are taking over mosques and spreading their bile from the pulpit.
At least one moderate Sunni cleric has been killed since Mr Assad’s fall. At
a recent Friday service in a mosque in an upmarket part of Damascus, the
ambassadors of Saudi Arabia and the United Arab Emirates (UAE) were
shocked to hear a preacher castigate their rulers and warn that their fate
would be the same as the Assads’. Women are worried, too. Notices have
appeared on lampposts ordering them to wear the veil. The new justice
minister has talked of imposing Islamic law. Female judges fear losing their
jobs.

Moderate Syrians fear a new autocracy may be emerging. “He who

liberates, decides,” say Mr Sharaa’s men. But many who suffered under Mr
Assad are loth to see Mr Sharaa hijack their cause.

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Tugged to and fro

Mr Sharaa found controlling his men hard enough in Idlib. For months
before the breakout from that enclave, they marched through the streets
chanting against Mr Sharaa’s despotism, calling for him to step down. His
group, Hayat Tahrir al-Sham (HTS), of which the aggrieved commander in
Damascus is a member, has a reputation for discipline. It is thought to have
between 13,000 and 35,000 men. But it is thinly spread across a country
that Mr Assad failed to control with a much bigger army.

Mr Sharaa relies on the same hotchpotch of rebel militias who may yet
challenge his hold. Some 50,000 militiamen control the borderlands east of
Idlib. Their commanders are likely to do what Turkey, their paymaster and
Mr Sharaa’s chief ally, tells them. They have tentatively agreed to hand over
their heavy weapons in return for posts in Mr Sharaa’s new army. But some
prefer the profits they make from smuggling to slimmer salaries under the
fragile and cash-strapped new regime.

The southern Sunni factions who beat Mr Sharaa’s northern alliance in the
race to the capital are another force unto themselves. Their commander,
Ahmed al-Awdeh, is still paying salaries to his 15,000 fighters, but says he
is open to joining Mr Sharaa’s army, as long as his men keep their weapons
and retain control of their turf. Mr Sharaa has also turned for help to a
bunch of foreign fighters who have come down from the north. Hostile
pockets of Islamic State, even more extreme jihadists, pepper Syria’s east.

The jihadists’ frustrations are finding an outlet in attacks on the Alawite sect
that propped up the Assads. In Homs, a largely Sunni city where Mr Assad
resettled Alawites en masse, Sunnis from the north are forcibly reclaiming
their homes. Sunni preachers are reported to have marched through nearby
villages demanding that kuffar, or unbelievers, convert to Islam. Unverified
footage shows them shooting captured army officers, leaving them
handcuffed by the roadside. “When we hand over our weapons, they kill
us,” says an Alawite who had been trying to make a deal.

Still, Mr Sharaa is a master of Sunni politics. In Idlib he both wooed and

eliminated his foes. To keep rivals close, he has given a handful of foreign

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jihadists senior posts and appointed a justice minister who, while serving as
a judge in Idlib, had a prostitute shot dead. At the same time, he has named
his chief enforcer in Idlib, Anas Khattab, as his intelligence chief.

Idlib is no blueprint for a modern state, so Syrians hope that tolerance may
prevail. Bars remain open. Waitresses in the capital’s smartest hotel, where
Mr Sharaa hosts foreign dignitaries, have yet to wear veils, though alcohol
is no longer available. An art show at the national museum is set to reopen,
nudes included. Marwan Tayyar, the director of the disputed arthouse, is
still confident the city’s old ways will seduce its new arrivals. “You can
conquer Damascus, but you can’t beat it.” ■

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Spirits of resistance

West African booze is becoming a

luxury product
Female entrepreneurs are leading the charge
1月 16, 2025 08:37 上午 | Ahafo region

WEST AFRICA has long been a source of booze. In Yoruba mythology

Obatala, a deity sent to create humans, stumbled on palm wine and fell into
a drunken slumber before completing the task. Some of the world’s first
rums were made by Africans enslaved in the Caribbean, who may have
brought knowledge of local tipples with them. Yet today there are few
African names in the global market for high-end spirits. Some entrepreneurs
are trying to change that.

Amma Mensah, the British-Ghanaian owner of Reign Rums, and Lola

Pedro, of Pedro’s ogogoro in Nigeria, see the business as an act of

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reclamation. Ms Mensah’s distillery sits on a former colonial plantation that
she says was owned by white Europeans until a decade ago. Her bottles are
decorated with war horns, crowns and golden stools, insignia of power
among Ghana’s Ashanti kings. Ms Pedro seeks to popularise ogogoro, a
smoky, spicy spirit made from fermented palm sap, partly because it was
once a symbol of anti-colonial protest (in the early 20th century British
colonisers banned the drink, because it was seen as a threat to pricier
imports).

Both women are targeting the luxury market. Unlike informally produced
ogogoro, which is cheap and has not quite shed its illicit reputation, a bottle
of Pedro’s costs at least £60 ($74). Ms Mensah’s rums, aged in repurposed
barrels previously used to make cashew-apple brandy, retail at between £48
and £96 a bottle. She serves fancy shops and bars in Accra, Ghana’s capital,
as well as in London, and has plans to expand to America. Besides Nigeria,
Pedro’s is sold in Ghana and Britain, with Kenya, South Africa and France
next on the list.

For now, both distilleries produce only small batches, partly to emphasise
that they are selling something special. Scaling up and competing with
established global brands will be challenging. But if they manage, maybe
one day floral rum and smoky ogogoro will be as representative of west
Africa as wine is of France and tequila of Mexico. ■

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Heading for a break-up

A hidden refuge in Sudan that the

internet, banks—and war—can’t
reach
A visit to the Nuba mountains provides a glimpse into the future of the
country
1月 16, 2025 07:18 上午 | Kauda

TO GET TO Caen refugee camp in the Nuba mountains in Sudan, travel

first to Juba, the capital of neighbouring South Sudan. Then catch a UN
plane to fly 900km north. From there it is a day’s drive to Kauda, the de
facto capital of a self-governing mountain statelet in South Kordofan state
in southern Sudan. Once registered with the rebel group that runs it, drive
four hours to Caen, passing through mud-brick villages along rocky crags,
with no market or petrol station in sight.

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Largely cut off from the outside world since a group of Nuba rebels
launched the latest phase of their struggle against Sudan’s Arab-dominated
Islamist government in 2011, the mountains have become something of a
sanctuary from the country’s bloody civil war that began in 2023. As the
war increasingly threatens to split Sudan into rival mini-states, it not only
offers an insight into the humanitarian catastrophe unfolding in the country,
but also a glimpse of its possible future.

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A region roughly the size of Slovakia, the Nuba mountains have been under
siege by the Sudanese Armed Forces (SAF), the national army, for the best
part of two decades (see map). Run by a rebel group known as the Sudan

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People’s Liberation Movement–North (SPLM-N) the region has no mobile-
phone network, no paved roads and no electricity infrastructure. But as it is
in effect being governed separately from the rest of Sudan, it is one of the
few parts of the country largely untouched by fighting. Roughly 1m of the
11m people displaced by the war have fled there, ending up in camps like
Caen.

Unlike countless other rebel groups and tribal militias that have entered the
fray, Nuba’s rebels have not picked a side in the conflict that pits the SAF
against the Rapid Support Forces (RSF), a paramilitary group led by
Muhammad Hamdan Dagalo (known as Hemedti) from the western region
of Darfur, whose campaign of ethnic cleansing there was categorised as
genocide by America on January 7th. “There is no difference between
them,” says Nasardin, a teacher in Kauda. “We categorise both the RSF and
the SAF as enemies.”

Though the region is under pressure from both groups, fighting remains
limited to periodic skirmishes. But the influx of refugees, combined with
bad harvests, locust swarms and the SAF’s blockade of humanitarian
supplies, has spelled disaster. In Caen camp, nearly 4,000 refugees from
other parts of Sudan were living in wooden shacks without even plastic
sheets for roofs when your correspondent visited in December. There was
neither food nor medicine. Refugees said they were eating leaves and roots
to survive.

The UN and other groups quietly supply the Nuba mountains out of South
Sudan, taking care not to anger the SAF. But small numbers of aid workers
bring only a fraction of what is needed. “I don’t understand why more don’t
come,” complains Dawud Eshaya al-Full, the deputy governor. Towards the
end of 2024 the UN declared famine in the western Nuba mountains, the
first place outside North Darfur to be officially given the label.

The situation in the region may be a harbinger of the future for the rest of
Sudan. Since mid-2024 territory from the deserts of Darfur in the west to
the farmlands of Sennar in the south-east has been occupied by the RSF. As
in 2011, when the SPLM-N resumed its campaign against the army in
Nuba, the SAF’s response has been to combine air strikes with a punishing
siege. Aid to RSF-held areas is tightly restricted and payments for civil

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servants have been halted. Mobile-banking, internet and other services have
been shut off.

As a result, the partition of Africa’s third-largest country is becoming

entrenched. There are now “at least four de facto areas of administration” in
Sudan, says Jonas Horner of the European Council on Foreign Relations.
They include the Nuba mountains as well as another rebel-run enclave in
central Darfur.

The RSF has spent the past few months setting up its own bureaucracy,
complete with civilian governors and a system for registering and taxing
international NGOs. In response to the SAF’s attempts to choke the supply
of money into areas it occupies, the RSF also plans to print its own
currency. It may soon announce a government to rival the internationally
recognised one led by Abdel Fattah al-Burhan, the general who leads the
SAF. “Sudan’s break-up is on the horizon,” says Mr Horner.

It may be impossible to reassemble the pieces. Decades of war with the

north led South Sudan to secede in 2011. In Nuba, many struggle to
imagine living alongside their fellow Sudanese again. “At the end of the
day, an Arab is an Arab,” says the teacher in Kauda. Nuba’s rebel leaders
insist they are fighting for a united Sudan where all citizens—Muslim or
Christian, Arab or African—are equal. But the longer the war drags on, the
harder that will be. ■

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Europe
How the AfD got its swagger back
Rightwards and upwards :: Germany’s hard-right party is gaining support even as it radicalises

France’s new prime minister is trying to court the left

The new French government :: François Bayrou gambles with Emmanuel Macron’s economic
legacy

A TV dramatisation of Mussolini’s life inflames Italy

Il Duce’s message :: With Giorgia Meloni in power, the fascist past is more relevant than ever

A French-sponsored Ukrainian army brigade has been

badly botched
Brigade betrayed :: The scandal reveals serious weaknesses in Ukraine’s military command

Spain’s proposed house tax on foreigners will not fix its

shortage
Scarce as houses :: Pedro Sánchez will need the opposition’s help to increase supply

Can the good ship Europe weather the Trumpnado?

Charlemagne :: Tossed by political storms, the continent must dodge a new threat

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Rightwards and upwards

How the AfD got its swagger back

Germany’s hard-right party is gaining support even as it radicalises
1月 16, 2025 07:18 上午 | BAUTZEN AND WEISSWASSER

IT IS A bitingly cold evening in Bautzen, a handsome town nestled in the

hills of the Oberlausitz, deep in the east German state of Saxony. But spirits
are high at the election stand of the hard-right Alternative for Germany
(AfD). “Our land first, because we love Germany!” proclaim banners in the
party’s trademark bright blue. “The mood inside the party is really good,”
beams Frank Peschel, who sits in Saxony’s parliament. The AfD took 39%
of the vote here at last year’s European election, and your correspondent
struggles to find any local not planning to vote for it at the national election
on February 23rd. “The left calls us Nazis, but we just want a normal life,”
says Simon, a 20-year-old. He will deliver his first vote to the party next
month.

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There is a swagger to the AfD these days. Having fallen back in early 2024,
the party has engineered a well-timed recovery. Its current polling, at
around 20% and climbing, could double its representation in the Bundestag.
Party spirits have been lifted by events in Austria, where an AfD-like party
is set for power after a centrist attempt to block it fell apart. Elon Musk, a
plutocrat close to Donald Trump, recently conducted a rambling interview
with Alice Weidel, the AfD’s co-chair. Party insiders cringed, but say his
endorsement will spark the interest of younger voters and German business,
many parts of which remain deeply AfD-sceptical. Once-bitter divisions
inside the party have been muted in the service of election discipline—
largely in favour of its more radical wing.

This points to a puzzle. Comparable hard-right outfits in Europe, like the

National Rally in France or Giorgia Meloni’s Brothers of Italy, have
moderated to broaden their appeal. But the AfD has grown even as it
radicalises. At its pre-election conference in Saxony last weekend Ms
Weidel, an ex-banker once seen as a comparative moderate, thrilled
delegates with a red-meat speech culminating in a call for the “remigration”
of illegal migrants, a controversial term she lustily emphasised. The party
anointed her its first-ever candidate for the chancellery: a signal of its
confidence, if not an ambition that will be fulfilled any time soon. “Alice für
Deutschland!” hollered the crowd, a pun on “Alles für Deutschland”, a
banned Nazi-era slogan. “There aren’t really any moderates left in the
party,” says Anna-Sophie Heinze, a political scientist at the University of
Trier.

The AfD’s rebound has been powered by the government’s failures on

migration, energy prices and the economy, says Tino Chrupalla, who shares
the leadership with Ms Weidel. Just 22% of Germans think the country is up
to the challenges of the future. The AfD is honing its message for angry
voters, muffling issues that excite passions inside the party but have little
broader appeal, such as quitting the EU, while playing up concerns over
immigration and energy. Yet speaking out of both sides of its mouth is
essential to its success. Scandals help: in the latest, an AfD branch
distributed election flyers in the form of fake plane tickets pledging to
deport illegal immigrants, a stunt with roots in the Nazi era. The party says
it simply wants adherence to the law. But the dog-whistle is audible. “Yes,

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our rhetoric has sharpened,” says Mr Chrupalla. “But we just reflect
political reality. People are fed up.”

The AfD’s electorate has grown more heterogeneous as its support has
risen. In parts of the east it commands well over a third of the vote, yet it
has far more voters in the (larger) west. The archetypal AfD voter is a
middle-aged blue-collar worker in a small town, but the party is making
inroads among youngsters. Its voters are not notably poor members of the
“left behind”. But they tend to see themselves as badly off. The AfD’s big
weakness is with female voters, and candidates: just one in nine in next
month’s election is a woman.

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AfD voters tend to be loyal. Most do not see themselves as radical. Instead,
many regard other parties, including the conservative Christian Democrats
(CDU), as having gone soft. But they are disproportionately likely to hold
extremist views, including tolerance towards political violence (see chart).
The party is under surveillance by domestic spooks for “suspected right-
wing extremism”. More than 100 MPs have backed a proposal to ban it.

It is surely too late for that. But the AfD does remain locked out of power.
Elsewhere in Europe, centre-right parties’ firewalls against the hard right
have tumbled. But Friedrich Merz, head of the CDU and Germany’s
probable next chancellor, says to work with the AfD would be to “sell the
CDU’s soul”. In eastern states the CDU has formed ideologically outlandish
coalitions to keep it out. Many Germans turned off by the party’s fascist
aura vote tactically for its opponents. The anti-AfD firewall may even have
advanced the party’s radicalisation by removing an incentive to moderate.

Few AfD insiders think its polling can get much higher this time around.
Yet no one in the party thinks it can be blocked from power for ever. “If you
make firewalls, you’ll get burned behind them,” says Mr Chrupalla about
the CDU. And although Mr Merz has tacked right, he will probably have to
govern with a leftist party in coalition. That, says Krzysztof Walczak, from
the AfD’s Hamburg branch, means he will be unable to deliver his promised
(and AfD-adjacent) policies, such as rejecting asylum-seekers at Germany’s
borders. The party is campaigning hard on this message.

The firewall is most at risk in the east. Mr Chrupalla expects a new CDU-
led minority government in Saxony to fall apart, presenting an opening. An
election next year in Saxony-Anhalt, another AfD stronghold, looks
appetising. Nationally the task is harder; Mr Merz knows the risks of even
hinting at an opening to the AfD. But his aides fear that if they fail to get on
top of Germany’s problems, notably illegal immigration and economic
stagnation, the AfD could win the next election in 2029. That would not
necessarily open the door to power. But it would be a grim milestone.■

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The new French government

France’s new prime minister is

trying to court the left
François Bayrou gambles with Emmanuel Macron’s economic legacy
1月 16, 2025 07:18 上午 | PARIS

THERE ARE two ways to look at the new French government run by
François Bayrou, the 73-year-old centrist prime minister who took office
last month and laid out his plans to parliament on January 14th. One is that
the minority government is constructively seeking compromise among the
three rival blocs that make up the deadlocked National Assembly, with
particular attention to the left. The other is that it is opening the way to
unravelling President Emmanuel Macron’s economic policies, including his
flagship second-term reform, an increase in the pension age.

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The centrepiece of Mr Bayrou’s speech was a decision to reopen talks
“without taboo” on the pension reform. Forced through parliament without
a direct vote in 2023 after it prompted weeks of crippling strikes and
political opposition, this raised the legal minimum retirement age from 62
to 64. He has now handed discussion about adjusting the rules governing
pensions, which consume nearly a quarter of all government spending, to
representatives of employers’ federations and the unions. If within three
months they cannot reach agreement at net zero cost, declared Mr Bayrou,
he will keep the existing rules.

With this offer, Mr Bayrou is hoping to secure at least the tacit support of
the Socialist Party, and to peel its deputies away from the radical wing of
parliament’s four-party left-wing alliance. The prime minister runs a
minority government, composed of ministers ranging from ex-Socialists to
conservatives, which is not based on any formal coalition pact. Faced with
the same problem, his conservative predecessor, Michel Barnier, was
toppled by a no-confidence vote in December after just three months in
office. He was brought down by an unholy alliance of the left and Marine
Le Pen’s hard-right National Rally (RN).

This time, Mr Bayrou is hoping he can use pension talks to buy time and
get a revamped 2025 budget drafted and through parliament, without
courting the RN. In a nod to the left, his fiscal plans are already less
ambitious than Mr Barnier’s, which were designed to curb the budget
deficit from 6.1% of GDP in 2024 to 5% this year. Despite devoting a big
chunk of his speech to France’s dismal history of excessive public debt, Mr
Bayrou promises a more modest deficit reduction in 2025 to 5.4%—far
above the European Union’s 3% limit. This would mean some €50bn
($52bn) of budget savings and tax increases, probably on the rich and on
big firms. Eric Lombard, the new technocratic finance minister, is to reveal
details in the coming weeks. For now the government has rolled over the
2024 budget, without inflation adjustments.

In the short run Mr Bayrou is expected to survive his first no-confidence

motion, tabled by three of the left-wing alliance’s parties and scheduled for
January 16th. The fourth, the Socialists, are divided; some think Mr Bayrou

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has not compromised enough. The RN may not want to bring down another
government yet. But such caution may not apply to the budget.

France remains under surveillance. On January 13th the spread of French

ten-year sovereign bonds over Germany’s ten-year benchmark bond
widened to 0.88 percentage points, the same level it reached last month
amid worries over the previous budget. The new pension talks may fail. But
there is a real risk that the price of passing a new budget could be the
undermining of the business-friendly policies that have hitherto defined Mr
Macron’s presidency. “People in government aren’t worried so much about
his legacy,” says one centrist figure, “as about their own survival.” ■

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Il Duce’s message

A TV dramatisation of Mussolini’s
life inflames Italy
With Giorgia Meloni in power, the fascist past is more relevant than ever
1月 16, 2025 10:06 上午 | Rome

IN 1937, WHEN Benito Mussolini, then Italy’s fascist leader, opened

Cinecittà, a sprawling film complex in Rome, his government adopted a
variant of a slogan first ascribed to Lenin: “Cinematography is the most
powerful weapon.” On January 10th that weapon was turned with relish
against any who might be tempted to follow in the dictator’s footsteps. Sky
Italia, a satellite-TV platform, began televising “M—Il Figlio del Secolo”
(”M—Son of the Century”), an eight-part dramatisation of Mussolini’s rise
to power. The work of a British director, Joe Wright, it is based on a
bestselling novel by Antonio Scurati. The series has dazzled critics. Angela

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Calvini wrote in Avvenire, a Catholic daily, that “its incisive, unsettling
cinematographic style leaves [one] truly speechless.”

The violence it depicts will shock many Italians who have been lulled into
believing that Mussolini’s rule was pretty harmless. “Mussolini never killed
anyone,” declared Italy’s late prime minister, Silvio Berlusconi. “Mussolini
used to send people on holiday in internal exile.”

“M” is not just a bloodstained period drama, though. It is a cautionary tale

of the seductive power of authoritarianism. It opens with Mussolini, played
by Luca Marinelli, telling viewers: “There is always a time when lost
peoples lean towards simple ideas [and] the wise brutality of strong men.”
That is a controversial message in a country whose voters have handed
power to a party, the Brothers of Italy (FdI), with roots in neo-fascism.
Conservatives have bristled at the implied comparison.

Giorgia Meloni, the prime minister and leader of the FdI, does not seek a
fascist dictatorship. Her policies have been solidly Atlanticist and no more
radical than those of many other conservative governments. But with
Donald Trump about to re-enter the White House, she may be tempted by a
more radical approach. Ms Meloni is friendly with Elon Musk, a major
backer of Mr Trump. On January 4th she made an unannounced visit to Mr
Trump’s Mar-a-Lago residence. The incoming president called her “a
fantastic woman”.

With hard-right parties in government or sharing power in half a dozen

European countries, the relevance of “M” goes beyond Italy. Its depiction of
the storming by Mussolini’s militia of the Socialist daily Avanti! recalls the
assault on America’s Capitol four years ago. At a dinner, the future dictator
tells guests: “We are an anti-party. We practise anti-politics.” And inside
parliament, he offers the most enduring message of all. “Democracy is
lovely,” he tells viewers. “It gives you a load of freedoms. Even the
freedom to destroy it.” ■

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Brigade betrayed

A French-sponsored Ukrainian
army brigade has been badly
botched
The scandal reveals serious weaknesses in Ukraine’s military command
1月 16, 2025 07:17 上午 | Kyiv

Stinging criticism

THE FORMATION of Ukraine’s 155th army brigade was announced at the

D-Day anniversary ceremony in Normandy last June, complete with photo-
ops with the French president, Emmanuel Macron. Paid for, trained and
equipped by France, it was a showcase of NATO support, the first of what
Volodymyr Zelensky, Ukraine’s president, hoped would be 14 new brigades
sponsored by Western allies. Its deployment six months later was a disaster.

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Starting in November, articles by Yuriy Butusov, founder of the news
website Censor.net, revealed gross mismanagement: 1,700 men, about a
third of the brigade, had gone AWOL (some back to their old units), and 50
deserted in France. France had delivered the Caesar howitzers, armoured
vehicles and anti-tank missiles it promised, but Ukraine failed to provide
crucial drones and electronic-warfare capacity. On its return the brigade was
splintered: units and kit were hived off to other brigades, trained specialists
were reassigned to infantry platoons, and desertions spiked as
inexperienced units were sent to forward positions and took heavy losses.

Read more of our recent coverage of the Ukraine war

Mr Butusov notes that all seven new brigades Ukraine raised in 2024
suffered similar problems when first deployed. But the 155th’s desertions
have spotlighted Ukraine’s struggling mobilisation process, its unresponsive
high command and the increasing dismay of its allies, who underwrite the
war effort but have no say in strategy. The 155th is said to have cost around
€900m ($930m). “For better or worse, Ukraine makes all the decisions,”
says Jeffrey Edmonds, a former Pentagon official now at the Centre for a
New American Security, a think-tank in Washington.

“Nick” (his military call sign), a battalion commander in the 155th, said he
trained three tranches of recruits last year, only to see them sent to other
brigades. When the 155th went to France it instead brought raw recruits.
Only a dozen of his unit’s soldiers had combat experience before going to
France. The brigade’s return was jumbled; some officers stayed for
additional training. Nick and his soldiers were immediately sent to areas of
heavy fighting. At one point he personally led ten men to retake a position,
to demonstrate tactics to soldiers with no experience.

Mr Zelensky is now said to be overseeing an investigation into “abuses of

power”, to soothe French irritation. General Mykhailo Drapatyi, appointed
commander of Ukraine’s ground forces in November, stressed that the
French side “fully fulfilled its obligations to Ukraine”. He promised to
bolster the brigade’s officer corps and encouraged soldiers to contact him
directly.

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But for Mr Butusov the problems show failures in Ukraine’s high
command. A new mobilisation law enacted last spring has not stopped
people being summarily drafted on the street; desertions rose last year.
Some generals close their ears to bad news: an internal report rating the
brigade “unsatisfactory” was revised to “satisfactory” before it was
deployed. Others blame subordinates. After the scandal broke, the brigade’s
well-regarded chief was fired.

Many argue the army should be reinforcing existing brigades rather than
forming new ones. Commanders are loth to part with their best soldiers, so
new brigades struggle to attract veterans. America has pledged to create two
new brigades and the Germans one, but with both governments in transition
timetables have grown vague. After meeting Mr Macron in December, Mr
Zelensky announced France would create a second brigade; France says this
is still “under discussion”. The scandal has since reportedly led Mr
Zelensky to order a temporary halt to new brigades.

Nick talked to The Economist at midnight via a video call from his bunker
three kilometres from the front line. A screen behind him showed night-
vision surveillance of the battlefield and the 155th’s banner, with its
scorpion emblem. The brigade is training on the job. There are still
desertions, but over the past two weeks Nick has sensed the start of a “sense
of brotherhood”. The day, he sighed, had been much like the last 40. He has
not seen his wife for five months. “We are holding on.”■

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Scarce as houses

Spain’s proposed house tax on

foreigners will not fix its shortage
Pedro Sánchez will need the opposition’s help to increase supply
1月 16, 2025 07:18 上午

Housing non-solutions

ALICIA BOCUÑANO, a taxi driver, was living in a van in an encampment

of hundreds of people on the outskirts of Ibiza town last year when the
police came to force them out after neighbours complained. The eviction
was chaotic: families scrambled to collect belongings, and children cried as
their parents pleaded with officers. Ms Bocuñano had been homeless since
her landlord doubled her rent. Now she is waiting for the next eviction.

The lack of housing on islands like Ibiza and other Spanish beach zones is
partly due to tourism. Landlords have been turning homes for locals into

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tourist flats. But in Madrid, too, rents rose about 60% in real terms in the
past decade. When rental contracts expire, professional couples are forced
out to distant suburbs. Much of Europe faces housing shortages, but Spain’s
is especially acute. It is not just rents: 75% of Spaniards own property, but
for young people the prospect of a first-time buy is receding into middle
age.

Only 15 years ago the country had a massive housing surplus. The bursting
of that construction bubble in 2008 contributed to the great recession. Since
then, supply has plunged: Spain has built just two houses per 1,000 people,
while the average in Western countries is between three and four, notes
Ignacio de la Torre of Arcano, an investment bank. A labyrinthine permit
process, a shortage of skilled workers, the rising cost of materials and
scarce finance are all to blame.

At the same time, Pedro Sánchez’s left-wing government has favoured

immigration. The result is that around 250,000 new households are formed
each year but fewer than 90,000 new homes are built, according to the
government. The Bank of Spain reckons there is a shortage of 500,000
homes. Worse, housing demand is concentrated in cities while much of rural
Spain is depopulating. And public housing is only 2.5% of the total stock,
compared with an average of 9% in the European Union.

Big demonstrations last year forced politicians to take notice. Housing is at

the top of public concerns, according to a survey in December by the Centre
for Sociological Research, the state pollster. On January 13th Mr Sánchez
responded by proposing a dozen measures. A previouslyannounced state
housing company will buy several thousand empty homes left over from the
property crash. The government has begun to give subsidies to young
renters and will offer tax breaks to landlords who let at below-market rents.
He wants to levy VAT at the top rate on tourist apartments and impose a
100% tax on property purchases by non-residents who are not from the EU.
That is a swipe at Britons, but also rich Latin Americans who are buying
pieds-à-terre in Madrid. Whether the minority government can push the tax
changes through parliament is unclear.

The impact will be limited. Sales to non-resident foreigners (including from

the EU) totalled only 27,000 in 2023, Mr Sánchez said. His plans focus on

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regulating demand because control over land use and housebuilding lies
with regional governments and mayors. The centre-right opposition
People’s Party (PP), which runs 11 of Spain’s 17 regions, had unveiled its
own proposals the previous day. These would expand supply by cutting red
tape and offering tax breaks for housebuilding.

“The West faces a decisive challenge if it wants to avoid becoming a society

divided into two classes, of rich landlords and poor tenants,” Mr Sánchez
proclaimed. His rhetoric will doubtless strike a chord among many
Spaniards. But since taking office in 2018 he has done little to tackle the
housing problem. A law of 2023 allowed regional governments to impose
rent controls where housing is scarce. In Catalonia, the only region to apply
them fully, the main effect was to shrink the number of new rental contracts
by almost a fifth as landlords pulled out.

The housing problem requires a national plan, which can only come from
an agreement between Mr Sánchez’s Socialists and the PP. But that is not
the prime minister’s way. Public anger over housing is likely to grow before
it subsides.■

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Charlemagne

Can the good ship Europe weather

the Trumpnado?
Tossed by political storms, the continent must dodge a new threat
1月 16, 2025 08:37 上午

THE CREW of a boat whose rudder has fallen off can do little but pray for
calm weather and a speedy way to safe harbour. Democracies caught in
political gales similarly hope for more placid times as they work out how to
chart a new course. Alas, Europe finds itself in the midst of a perfect storm.
Not only is its economy facing stiff headwinds; voters are routinely tossing
their leaders overboard, and war on the continent has rocked the boat for
three years now. Amid these heavy waters, an even more concerning
prospect is focusing minds. A superstorm of uncertain severity—call it the
Trumpnado—seems to be headed straight in this rickety craft’s direction.

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All hands are on deck to try to limit the damage. But the prospects for plain
sailing look as distant as ever for the good ship Europe.

Navigators worry most about sailing uncharted waters. But Europe is

actually familiar with the treacherous seas that await it come January 20th,
when Donald Trump will be sworn in as America’s president. A nativist,
America-first president will again fray the links that bind the two main parts
of the West, and the international order the Atlantic alliance struggles to
uphold. In 2017 Europe somehow managed to stay on course. But Mr
Trump’s first term came under favourable conditions for Europe: its
undisputed captain, Angela Merkel of Germany, had been at the helm for
over a decade and its economy had entered calmer seas after the choppy
years of the euro-zone crisis. Even so, it struggled. In 2019 Emmanuel
Macron, France’s president (and, like Charlemagne, a fan of metaphors)
told The Economist that Europe was teetering on the edge of a precipice,
and that NATO was “brain-dead”.

Europe is in far worse shape as it awaits its second dose of Trumpism.

Politics are at their most chaotic in years. Germany is headed to the polls on
February 23rd, and will probably dump Chancellor Olaf Scholz—but a new
government is unlikely to be in office before late April. France is facing its
deepest political crisis in recent memory. A new government led by
François Bayrou may prove longer-lasting than the previous one, which
sank after a mere three months, but seems hardly seaworthy. Poland,
another one of the European Union “bigs”, is due to elect a president in
May. Should the candidate favoured by Donald Tusk, the liberal prime
minister, fail to win, several years of paralysis could ensue. Belgian
politicians are still haggling to form a government more than 200 days after
elections were held.

What political strength exists is hardly of the reassuring sort. A slew of

hard-right politicians, including Herbert Kickl in Austria and Viktor Orban
in Hungary, seem intent on capturing or scuttling the EU. They are being
overtly supported by Mr Trump and his acolyte Elon Musk; space has been
found for several nationalist European politicians to attend the inauguration
in Washington. In recent years the most stable part of the continent’s
political apparatus has been its central institutions in Brussels. But

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Trumpians hate the supranational Eurocracy. Worse, its figurehead Ursula
von der Leyen, the president of the European Commission, has spent the
first half of January hobbled by pneumonia, including a discreet stint in
hospital.

This is not a good time for Europe to take on foreign adversaries. Yet it now
faces three global geopolitical powers at the same time. Russia is the most
menacing, following up its big-gun salvo in Ukraine with cable-cutting in
the Baltic. China and the EU have been edging towards a trade war;
Europeans also resent China’s support for Russia in Ukraine. Mr Trump
now promises a trade war of his own, along with vague threats against
NATO (unless its members spend vastly more on defence) and outlandish
provocations towards Greenland. Tech titans who have the ear of the
president want him to neuter European regulations on social media. The
mood below Europe’s decks is grim. A poll of 24 countries by the European
Council on Foreign Relations, a think-tank, shows many places including
India and Russia think Mr Trump’s return is good news. Europeans in
contrast are panicked.

The EU’s leaders know they need to chart a new common course—but do
not yet agree what that might be. For Mr Macron, what matters is the
“strategic autonomy” of Europe, meaning its ability to get stuff done
without American support, for example by ensuring the continent develops
its own military kit. Others, notably in central Europe, think that is
delusional: to them it is clear America will be, for the foreseeable future,
indispensable to guaranteeing the continent’s security. Buttering up the
MAGA crowd by buying American jets and missiles is the surest way to
show Mr Trump that Europe is a worthy ally.

Keeling over

Through the pelagic fog, are there signs of hope? Perhaps. Mr Trump’s
team has given up trying to end the war in Ukraine “within 24 hours”, as he
had repeatedly promised on the campaign trail. A rushed end would have
favoured Russia, which currently has the upper hand militarily. Mr Trump
still wants to impose a peace on both sides quickly, but is alluding to looser
timelines—100 days, or even six months. Europeans are trying to persuade

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him that abandoning Ukraine would be a replay of America’s hasty retreat
from Afghanistan under his predecessor, Joe Biden: a failure that would
highlight American impotence.

Mr Trump’s arrival may yet lead to Europeans finally rowing in the same
direction. On February 3rd the EU’s 27 leaders will meet at an informal
retreat outside Brussels to discuss defence. The bloc has belatedly agreed
that far more needs to be spent on military preparedness. (Sir Keir Starmer,
prime minister of a former EU member and former great maritime power,
will attend too.) By then the Trumpnado may have struck, or remain just a
threat. Either way the choice facing Europe is simple: sink or swim. ■

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Britain
Britain’s government has spooked markets and riled
businesses
Breaking bonds :: Tax rises were inevitable. Such a shaky start was not

David Lammy’s plan to shake up Britain’s Foreign Office

Cultural revolution :: Diplomats will be tasked with growing the economy and cutting
migration

Britain is becoming a well-mannered but deceitful society

The national character :: Technology and sloppy government are to blame

Homelessness in England has risen by 26% in the past five

years
Down and out :: Manchester demonstrates how hard it will be to tackle

A plan to reorganise local government in England runs into

opposition
Local government reform :: Turkeys vote against Christmas

Has the Royal Navy become too timid?

Boats and bureaucracy :: A new paper examines how its culture has changed

Labour’s credibility trap

Bagehot :: Who can believe Rachel Reeves?

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Breaking bonds

Britain’s government has spooked

markets and riled businesses
Tax rises were inevitable. Such a shaky start was not
1月 16, 2025 08:47 上午

WHEN POLITICIANS start talking about bond yields it is a sure sign that
trouble is afoot. By that measure, the new year has been troublesome indeed
for the Labour government. Yields on 30-year gilts (British government
bonds) have spiked to a near-three-decade high. Sterling has tumbled.
Businesses are grumbling, too, about chunky tax rises and a higher
minimum wage due to bite in April—as well as the lack of a convincing
plan for boosting growth. The last time firms were this downbeat, surveys
say, was after Liz Truss’s brief and disastrous premiership in 2022 (see
chart 1).

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Six months after the government entered office, politicians are debating
how much it is to blame for this gloomy picture. Labour is hardly
responsible for “global volatility in markets”, said Rachel Reeves, the
chancellor. Her Tory counterpart, Mel Stride, insisted it was “a crisis made
in Downing Street”. On January 15th softer-than-expected inflation figures
soothed things a little. But eyeballs remain glued to Bloomberg terminals,
or other, cheaper streams of market data.

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On the narrow question of why gilts have been sold off so sharply, Ms
Reeves has a point. A contrast with Ms Truss’s 49-day tenure is that gilts
have moved in tandem with sovereign bonds globally (see chart 2).
Treasury yields shot up after Donald Trump’s win in November as markets
absorbed his inflation-inducing plans for tariffs, tax cuts and deportations.

But yields have risen furthest and fastest in Britain. Sterling has also been
particularly wobbly, falling against most other currencies. That suggests
that investors are fretting about Britain’s ability to keep government debt
under control. Given the country’s recent record, such worries are hardly

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unreasonable. In that light, Ms Reeves’s choice to deliver a big-borrowing
budget in October looks increasingly reckless.

However blame is divided, Ms Reeves is stuck with the consequences. Most

immediate is the prospect of breaking her own fiscal rules, which constrain
how much Britain can borrow. She loosened them substantially in the
budget, but gilt moves since then have eaten all that space away, estimates
Capital Economics, a consultancy. The Office for Budget Responsibility,
the fiscal watchdog, will publish its own assessment, along with broader

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economic forecasts, on March 26th. Unless bond yields come down again,
Ms Reeves may have to pencil in further tax rises or spending cuts for the
final year of the parliament.

Businesses are also in a sour mood. One gripe is the main tax rise of the
budget: an annual £25bn ($31bn, or 0.9% of GDP) increase to employers’
national insurance, a payroll tax levied on firms. That, along with new
labour-market regulations and a minimum wage that is now two-thirds of
average earnings, will make it more expensive for firms to hire and keep
workers. Some firms are already holding back. Giving workers sick pay and
parental leave as soon as they start a job will cost businesses £5bn a year,
according to the government’s own analysis.

In November more than 80 British retailers including Boots, Next and

Tesco criticised the budget, warning that job losses and price rises would be
“inevitable”. Following the latest turmoil Rupert Soames, the chair of the
CBI, Britain’s biggest business lobby, told the government to “stop
digging”. That is a striking volte-face, given that bosses cosied up to Labour
before the election. Some of their disappointment may stem from having
previously seen the party through rose-tinted spectacles. It was obvious, for
example, that Labour would find ways to raise money for creaking public
services.

More surprising has been the lack of a convincing narrative for boosting
Britain’s economic prospects. In her first speech as chancellor, Ms Reeves
warned of “difficult choices” and “the worst set of circumstances since the
second world war”. “They need to be very careful that the political need to
keep hammering the Tories doesn’t turn into a self-fulfilling prophecy
around the state of the British economy,” says one City boss. Firms want
reassurance. “Business confidence is at rock bottom,” says Anna Leach,
chief economist at the Institute of Directors.

Despite Ms Reeves’s insistence that “growth is the number-one mission”,

the government’s approach has been piecemeal at best. Ms Reeves passed
up the opportunity to use the budget to reform Britain’s tax system in a
more growth-friendly direction. Entreaties to the European Union to boost
trade links and undo part of the economic hit from Brexit have been slow
and muddled. The much-touted “stability dividend”—Labour’s hope that

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merely ending the recent chaos in British politics would be enough to make
investment flow in—has yet to amount to much.

There are some brighter spots. Efforts to cosy up to China could yield a
small export boost. A plan to attract AI investment looks promising. Most
significant of all could be much-trailed reforms to Britain’s sclerotic
planning system, due to be introduced in Parliament this spring.

After the latest wobbles, Ms Reeves has promised to go “further and faster”
in pursuit of higher growth. Regulators have been cajoled to cut red tape.
Wonks and lobbyists are pushing the government to sign off on shovel-
ready infrastructure projects. The spurt of energy is welcome—if it results
in a more convincing plan for Britain’s economy, the country will owe the
bond vigilantes a “thank you”. ■

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Cultural revolution

David Lammy’s plan to shake up

Britain’s Foreign Office
Diplomats will be tasked with growing the economy and cutting migration
1月 16, 2025 07:18 上午

FOR EUROCRATS, Sir Olly Robbins seemed like a relic of an age before
Brexit sent the British establishment loopy. Theresa May’s chief negotiator
was self-assured, fiercely intelligent and several steps ahead of the
politicians, writes Michel Barnier, his EU counterpart. He sends sweet text
messages and invitations to dinner. And few British officials, Mr Barnier
gushes, “boast such a deep understanding of domestic security and
intelligence issues”.

That last quality explains Sir Olly’s imminent return to Whitehall from the
private sector, as the permanent under-secretary, or top official, of the

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Foreign, Commonwealth and Development Office (FCDO). He is the first
non-career diplomat to lead the service in its history after a series of
security-related posts in the Treasury, the Home Office and Downing Street.

Breaking open the closed shop is intended to be disruptive. David Lammy,

the foreign secretary, wants to increase the clout of the FCDO within
Whitehall after years of marginalisation. (Even its grip on diplomatic posts
is eroding: Peter Mandelson, the incoming ambassador to America, and
Jonathan Powell, the new national security adviser, are both outsiders.)
Someone who understands the wiring of government, Mr Lammy’s logic
runs, can restore his department’s influence.

The fixation of Sir Keir Starmer’s Downing Street on “delivery” for

marginal voters makes the FCDO’s predicament more acute. The summer
spending review is a moment of danger: the Treasury will assess all
government budgets against how they contribute to domestic policy
“missions”. Already, the FCDO faces a budget crunch as a pot for capital
works, raised by selling old embassies, runs dry by 2027. Old justifications
about spreading Britain’s influence in the world may not be enough.

Mr Lammy’s answer is to make the FCDO the “international delivery arm”

of the prime minister’s twin goals of expanding the economy and cutting
immigration. Ambassadors will need to put more heft into trade diplomacy
(not just occasional cocktail parties) and negotiating deportation deals. He
intends to employ the performance-management techniques used under
New Labour. A Foreign Office “delivery unit” will monitor embassies’
performance against headline targets.

That will doubtless chafe those diplomats who argue that the building of in-
country knowledge and influence cannot be quantified like hip operations.
Some may not stay: the Treasury has agreed to fund a round of voluntary
redundancies. Mr Lammy recently told MPs that the department is “top
heavy” and its upper ranks will have to “move out and make way” for a
new generation. He wants a culture that is less hierarchical and London-
weighted and more open to outsiders.

AI, it is hoped, will do some of the heavy lifting. Mr Lammy sees two
practical use-cases. One, already employed by the American State

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Department, is to help draft briefings for diplomats. The more ambitious,
being pioneered by British spy agencies, is to combine in-house files with
open-source data to analyse a counterpart’s vulnerabilities and interests
ahead of a negotiation.

All this is a more difficult cultural shift for the diplomatic service than
might have been expected from Mr Lammy, an ebullient figure who in
opposition talked of boosting the morale of a downtrodden service. It will
fall to Sir Olly to make it work, but even those who admire his intellect and
Stakhanovite work ethic worry about his faults. Mrs May’s doomed Brexit
deal was cut in a tiny secretive circle, with key ministers and officials
frozen out. “He likes to be in the centre, and in control,” says one who
knows him. If only he can charm his colleagues as much as he charmed Mr
Barnier. ■

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The national character

Britain is becoming a well-

mannered but deceitful society
Technology and sloppy government are to blame
1月 16, 2025 07:39 上午 | WATFORD

THE MOON UNDER WATER pub is not far from Watford Football Club.
It is large, and its prices are low. It is the sort of place where you might
expect rowdy behaviour. And until a few years ago Kwame Tefe, who
manages it, often removed the chairs and served beer in plastic cups on
match days. Today he sees no need.

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In The Moon Under Water, and in Britain generally, disorder has become
rare. Two decades ago one-quarter of people told the Crime Survey of
England and Wales that public drunkenness or rowdiness were big problems
locally. Songs released at that time, by Lily Allen, Arctic Monkeys and The
Streets, were about fights in kebab shops and over taxis. Since then
rowdiness has fallen by half. Vandalism has declined even more (see chart
1).

Britain has become better behaved in some ways. But it has also grown
sneaky. Some kinds of dishonesty are more accepted and more common

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than they used to be. The same people—the young, especially men—appear
to be driving both trends. The emergence of a polite, lying society might be
due to a combination of technological change and sloppy government.

For many years the British Social Attitudes Survey has asked people what
they would think if an unemployed person earned £500 ($610) and did not
declare it to the benefits office. The proportion who see that as wrong has
fallen (see chart 2). Of course, inflation has eaten away the value of £500.
Yet people are now more relaxed about the failure to declare £3,000 than
they were about the failure to declare £500 less than a decade ago.

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Lest that be thought a purely theoretical measure, the Department for Work
and Pensions (DWP) estimates that 3.7% of its spending in the 2023-24
fiscal year went on overpaying benefits, up from 1.9% in 2015-16. Fraud is
not the only reason for overpayment; confusion over changes in the benefits
system is another. But the DWP thinks that dishonesty is growing.

Benefits recipients are not the only people at it. Grocers are suffering more
unexplained losses, or what they call “shrink”. The chairman of Marks &
Spencer, a high-street fixture, has suggested that middle-class shoplifters
are partly to blame. Many businesses seem to be dodging taxes. The
corporation-tax gap for small firms—the extent to which payments fall
short of theoretical liabilities—grew from 15% to 32% in the ten years to
2022-23, according to His Majesty’s Revenue and Customs.

By comparing surveys from 2011 and 2023, David Shepherd, a

criminologist at the University of Portsmouth, has shown that Britons have
become less tolerant of certain behaviours that seem likely to harm people,
such as speeding and underage sex. But they have become more tolerant of
cheating on benefits, buying stolen property and taking bribes—all
behaviours where the victim is less obvious. The decline in integrity has
been driven by the young. The old are as upstanding as ever.

Mr Shepherd thinks that the internet and social media may have encouraged
dishonesty. In another study, he found that more than half of 16- to 24-year-
old men admitted to knowingly buying counterfeit goods in the past year.
Many men say that the goods were endorsed by online influencers. “Young
people are influenced; old people are not,” Mr Shepherd notes.

Ofcom, a media regulator, found in 2023 that 87% of people had seen
something online that they thought was a scam, and 46% had been drawn in
(though few lost money). Contrary to the stereotype, the young and middle-
aged are no less vulnerable than the old. The failure of technology firms and
government agencies to stop online fraud may have persuaded people that
the digital world is dishonest. If you believe that, it might be easier to lie
online when applying for welfare benefits.

Technology could also be smoothing the road to offline theft. Emmeline

Taylor, an expert on retail crime at City, University of London, thinks that

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the spread of self-check-outs and hand-held scanners has turned shoplifting
from a tawdry crime into a trick or even a game, like playing a fruit
machine. Offenders may tell themselves that cheating a machine is not like
mugging someone. If challenged, they can say they made an honest
mistake.

Add to these technological temptations a growing belief that miscreants are

getting away with it. Between 2019 and 2022 the proportion of people who
told the British Social Attitudes Survey that benefit cheats were likely to be
caught fell from 41% to 28%. In October 2024 polling by YouGov showed
that half of Londoners who often take trains or the Tube frequently see
people squeezing through the barriers without paying. One-fifth of Britons
have witnessed shoplifting in the past year.

If, around 2020, Britons sensed that fraud was becoming less risky, they
were right. Between March and June of that year, as covid-19 raged, the
DWP relaxed fraud controls and redeployed thousands of counter-fraud
staff. The government also threw money at businesses to help them recover.
That led to £10.5bn-worth of fraud and error, according to the National
Audit Office, a watchdog.

When firms and the authorities get their act together, behaviour can
improve dramatically. Sir Tim Martin, the founder of Wetherspoons, which
owns 800-odd pubs including the The Moon Under Water, thinks that two
changes have made pubs more civil. The first is the growing tolerance of
children in bars, which has been driven by changes in licensing laws. The
second is the growth of Pubwatch schemes, which enable pubs to form a
united front against troublesome customers. A person who is barred from
one pub may be instantly barred from all nearby ones—a strong incentive
not to act up.

In the mid-1940s George Orwell asserted that the English were unusually
upstanding. Newspaper-sellers could safely leave their change on the
pavement when they went for lunch, the writer claimed. If Britons were
really unusual then, they are not now. Polling by the World Values Survey
shows that they are about average among Europeans when it comes to their
feelings about fare-dodging—although they are less inured to benefit fraud
than the residents of some countries, such as France and Spain.

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Orwell would have been disappointed. But another change would have
delighted him. In 1946 he wrote in the Evening Standard about a pub that
admitted children (although it was against the law at the time) and was
seldom bothered by “drunks and rowdies” even on Saturday nights. The pub
did not really exist—Orwell had invented it, along with a fanciful name. He
called it The Moon Under Water. ■

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Down and out

Homelessness in England has risen

by 26% in the past five years
Manchester demonstrates how hard it will be to tackle
1月 16, 2025 07:18 上午 | MANCHESTER

AARON IS HAVING a bad day. It is 7pm in Manchester city centre, and

the temperature is just above freezing. The 34-year-old’s decaying teeth and
soiled fingers are signs of his sleeping rough “on and off” for three years.
He is begging for £17 ($21) for a hostel for the night. He is one of some
9,000 people in England likely to go without much shelter this winter.

Rough sleeping is only the most visible part of England’s growing

homelessness problem. Add the many more placed by local authorities in
temporary accommodation, and in all 354,000 people in England have no

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home (responsibility for housing is devolved). In the past five years their
number has risen by 26%, according to data from Shelter, a charity.

The Labour government has set a lofty goal of “ending homelessness for
good”. In December it increased local-government funding to tackle it
during the coming fiscal year by 28%. Greater Manchester is a useful case
study, because Andy Burnham, the Labour mayor since 2017, has made
reducing homelessness a central aim.

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He can point to some progress. In the 12 months to October the number of
rough sleepers in Greater Manchester’s ten boroughs fell by 24%, from 148
to 112. (In London the figure rose by 34% over a similar period.) Paul
Dennett, the mayor of Salford and Greater Manchester’s homelessness tsar,
attributes the success to the city’s “a bed for every night” initiative. Each
night, this makes available 550 beds for people who would otherwise sleep
rough, at a cost of about £5.5m a year. Some £2m comes from the local
National Health Service board, as the beds help keep the homeless out of
hospital.

Immigration, especially via the asylum system, complicates the task. Anul,
a 29-year-old Sudanese man sleeping in a tent outside Manchester’s neo-
gothic city hall, says he was recently granted asylum 18 months after
arriving in Britain. But in December he was evicted from accommodation
paid for by the Home Office at 28 days’ notice. In the past year some 3,500
people have ended up sleeping rough after leaving such digs; single men
such as Anul fall well down the priority lists for housing. In Greater
Manchester Mr Dennett repurposed a community centre to help alleviate
the problem, putting in 40 blow-up beds.

The Home Office has extended its eviction-notice period from 28 to 56

days, on a pilot basis until June. That aligns it with legislation obliging local
authorities to provide shelter to people facing homelessness within eight
weeks. But as the Home Office has sped up the asylum process in order to
reduce its own accommodation costs, it has strained local authorities’
resources. Over the past year councils have assisted 22,000 recent asylum-
seekers who had left Home Office accommodation.

The biggest difficulty is the precarious state of the broader housing market.
In June 123,000 families in England were living in temporary
accommodation—such as B&Bs and hotels—a rise of 43% in five years.
That increase largely reflects people leaving privately rented homes at the
end of their tenancies. The government has promised to increase protections
for tenants, but it cannot prevent landlords from selling up, as many have.
Last year Manchester created a “Good Landlord Charter” that it hopes will
reduce evictions.

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Finding permanent housing can be daunting. Bobby, a 50-year-old former
construction worker, used to live with his mother in a housing-association
bungalow. Six months ago, after her death, he was evicted; he now lives on
the street. The benefits he receives will not pay for a home (people like him
are in competition with young professionals for private rentals). Bobby
hopes the local authority will find him one. But 90,000 families are on the
waiting list for social housing in Greater Manchester; and 1.3m across
England.

The most effective long-term way to reduce homelessness is to lower the

cost of housing by building more homes. Mr Burnham has promised to
build 10,000 “truly affordable” social homes by 2028. The government
wants 1.5m new homes of all tenures to be built during this parliament.

Being down and out does not always mean being down. All the rough
sleepers The Economist spoke to in Manchester were remarkably optimistic.
Yet Deborah Garvie of Shelter says the doors to decent housing “are firmly
shut” for many. It will take years to open them. ■

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Local government reform

A plan to reorganise local

government in England runs into
opposition
Turkeys vote against Christmas
1月 16, 2025 07:17 上午

THE GOVERNMENT has more eye-catching policies, such as a plan to

build millions of homes and a promise to “smash the gangs” that smuggle
asylum-seekers across the English Channel. But the policy with the greatest
chance of changing England for good is local-government reform. Labour’s
plans in that area are bold. They are also deeply unpopular in some quarters,
as local politicians made clear on January 10th in their initial responses to
the government’s proposals.

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Three in ten English people live in places with two tiers of local
government. District councils, which often cover areas with 100,000 to
200,000 inhabitants, collect the rubbish and deal with many planning issues.
County councils, which are larger, oversee highways and provide care for
old people. The national government wants to cover England in “unitary”
authorities containing at least half a million people, which would do
everything. These would clump together into huge “strategic” units, ideally
overseen by elected mayors.

Politicians in Westminster would have simpler lives if they could eradicate

smallish councils and create regional mayors. “They want to talk to no more
than about 30 people,” says Paul de Kort, the leader of St Albans district
council. But few district councillors welcome the prospect of being merged
or abolished. In Hertfordshire, Mr de Kort’s patch, the leader of the county
council has talked about creating a single unitary authority with a
population of 1.2m. All ten district councils oppose him.

Hertfordshire, on the northern edge of London, lacks a dominant city. It has

many towns, with distinct histories and cultures. Some, like St Albans, are
old cathedral cities or market towns. Others, like Stevenage, are post-war
“new towns” occupied by the descendants of working-class Londoners. Still
others are garden cities, with Quaker roots.

The district councils that run these towns have different political
complexions. St Albans and Watford are Liberal Democrat strongholds;
Stevenage is Labour; East Herts leans Green. The county as a whole is
Conservative. Abolishing district councils in Hertfordshire therefore means
destroying some parties’ power bases. The situation is similar in Surrey,
another southern county, where district councils also oppose the proposed
reforms. One of its districts, Epsom and Ewell, is dominated by
independent councillors.

Staffordshire, north of Birmingham, has a different problem. That county

does have a dominant city, Stoke-on-Trent. Unfortunately, Stoke is poor.
Reorganising local government in Staffordshire will mean glueing other
places to Stoke, which might overwhelm them because of its size and its
needs. Newcastle-under-Lyme, which is next to the city, boasts of its 852-

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year history of self-government. Its council leader warns, pointedly, that it
has fought previous attempts to merge it with Stoke.

Colin Copus, an expert on local government, says that district councillors

are “spitting feathers” about the plans. They are not powerful enough to
stop them. But they can try to ensure that Westminster regrets embarking on
reform. ■

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Boats and bureaucracy

Has the Royal Navy become too

timid?
A new paper examines how its culture has changed
1月 16, 2025 07:18 上午

Controlled aggression

THE FINAL signal sent by Horatio Nelson at the Battle of Trafalgar in

1805 is etched in the minds of officers in the Royal Navy: “Engage the
enemy more closely”. But has the Nelsonian spirit of aggression faded in
recent years? A recent paper by Andrew Livsey, who spent 25 years as a
naval-warfare officer and now works for the Royal Navy Strategic Studies
Centre, a think-tank, looks at how the culture of the service has changed.

It appears to have become more risk-averse. Mr Livsey cites an interview

with Vice Admiral Jerry Kyd, the fleet commander in 2019–21. When

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Admiral Kyd commanded HMS Queen Elizabeth, an aircraft-carrier, he
recalls a subordinate cancelling night flying merely because lightning had
been spotted nearby. The surface fleet and the fleet air arm, Mr Kyd thinks,
have lost their aggressive edge. Many naval officers consulted by The
Economist share this diagnosis.

John Foreman, a retired navy captain, notes that when in 1990 he operated
in the Barents Sea, near Russia’s Northern Fleet, his ships would venture to
12 nautical miles off the coast, the edge of Russian territorial waters. In
2021, he says, the navy had to remain more than four times farther away.
Some see a wider cultural shift. A person recently involved in leading war
games for senior officials says that he found that his students evinced a
surprising reluctance to use or threaten force.

Not all of this “excessive timidity”, as Mr Foreman puts it, is the navy’s
fault. Mr Livsey recounts an episode when the navy’s maritime-warfare
centre attempted to test the use of 40mm grenade-launchers, which have
been used on land for many years, at sea. It took over a year to get approval
from no fewer than seven bodies. Health-and-safety measures have
accumulated over the years to occasionally crippling levels, complains one
insider.

In practice, sailors are still entrusted with considerable responsibility. A

Chinese naval officer on board a ship in which Mr Livsey was second in
command was “amazed” by the scope of decisions that could be taken by
deputies. A junior lieutenant-commander, fifth in the chain of command, he
says, can make decisions which would fall personally to an American
commanding officer. Parts of the navy—the Royal Marines and submarine
service—also have a higher tolerance for risk than the rest.

Tom Sharpe, who commanded four warships in his 27 years in the Royal
Navy, is sceptical that the service has lost its edge. British destroyers in the
Red Sea have faced intense risks from Houthi drones and missiles. And
what looks like risk-aversion is often bureaucracy. The navy was keen on
sending a carrier to the Red Sea, says Mr Sharpe, but was overruled by the
Foreign Office.

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He argues that many of the old ways were pointlessly dicey. “You still have
to know how to drive a ship aggressively, sometimes, but that doesn’t mean
doing it all the time.” Frigate captains were once expected to berth at high
speeds without tugs. An admiral in Malta in the 1970s would send back out
to sea ships that did so without enough “panache”, recalls Mr Sharpe. “You
can’t do that now. We don’t have the assets to ride out the inevitable dinks
and scratches.” ■

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Bagehot

Labour’s credibility trap

Who can believe Rachel Reeves?
1月 16, 2025 08:37 上午

IF THE LABOUR PARTY had a two-word pitch going into the last general
election, it was “economic credibility”. Rachel Reeves, the then shadow
chancellor, said it at every turn. Labour was “the party of economic
credibility”, said Ms Reeves in one interview. “Out of the wreckage of Tory
misrule, Labour will restore our economic credibility,” declared the shadow
chancellor in another speech. There would be no tax rises on working
people, Ms Reeves told Middle England. There would be no spending cuts,
she reassured her base. And there would be iron-clad fiscal rules, she
warned one-and-all.

A peculiar thing has happened since. In government, pledges designed to

make Labour look credible now do the opposite. Measures to bind the

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chancellor to a steady course guarantee an erratic one. Rules aimed at
reassuring voters instead create political hysteria. The chancellor is caught
in a credibility trap, where abiding by one promise made in the name of
credibility undermines another. The government’s credibility relies on
incredible promises that cannot be met.

At the heart of the problem are Labour’s fiscal rules. Ms Reeves has
pledged not to borrow for day-to-day spending and to have debt falling as a
percentage of GDP by 2029-30. In March the Office for Budget
Responsibility, a watchdog, will judge whether she is on track to meet them.
A recent jump in the cost of British borrowing, which was met with a flurry
of gloomy headlines, means she may well not be. Looking credible can be a
curse if it is based on things over which the chancellor has little direct
control, like a global increase in the cost of government debt. Or as Mark
Blyth, an economist at Brown University, puts it: “If your fiscal rules are in
charge, you’re not in charge.”

An easy, if incredible, solution exists: a few tweaks to long-term spending

plans for 2029-30 and Labour’s fiscal rules are unbroken once more.
Everyone from Treasury civil servants to bank analysts to the Institute for
Fiscal Studies, an influential think-tank, knows that the spending plans are
meaningless. Yet each must pretend they are on some level real. Two civil
servants discussing spending plans for 2030 may as well be in a dialogue
from “Alice’s Adventures in Wonderland”: “Why, sometimes I’ve believed
as many as six impossible things before breakfast.”

If the fiscal-credibility problem—as seen through over-caffeinated

journalists examining a gilt chart for the first time—disappears, a problem
of political credibility appears. Labour was elected on a platform of
improving threadbare public services. For the sake of short-term political
credibility, the government may pledge to go against its fundamental
purpose. This rarely works.

The alternative of tax rises is just as incredible. Ruling them out is how
Labour thinks it wins elections. Labour was duly elected on an incredible
pledge not to increase any of Britain’s main taxes: income tax, value-added
tax, national insurance and corporation tax. This pledge is already broken,
yet Labour seems determined to glue it back together and pretend it is as

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good as new. Labour’s first budget raised £40bn (1.5% of GDP) in taxes.
Since then, Ms Reeves has toured television studios and C-suite breakfast
meetings, assuring every audience that it was a one-off. A ploy to look
credible comes off as anything but.

When caught in a credibility trap, media hysteria is inevitable. After all, it is

easy to see when promises have been broken. Difficult economic questions
(why have borrowing costs shot up globally?) are replaced by more
comprehensible, if inane, political ones (should the prime minister sack his
chancellor?). The prime minister, who has outsourced economic policy
almost entirely to Ms Reeves, could decide to sack his chancellor. In the
same way he could decide to walk out of Downing Street, lay down on
Whitehall and wait for a Number 159 bus to crush him.

Perhaps Labour, with its proclivity for spending on public services, cannot
govern in a time of genuine fiscal constraints. Yet there is nothing new
about Labour’s predicament. For all its spendthrift stereotype, it has a long
tradition of fiscal conservatism to draw on, point out Colm Murphy and
Patrick Diamond of Queen Mary University of London, in a forthcoming
paper.

Before the coalition government of the 2010s, austerity was most associated
with Clement Attlee, the sainted former Labour leader, whose government
implored Britons to “produce more and consume less”. Even New Labour,
which eventually showered public services with cash, was at first an austere
project, sticking to tight spending plans left over by the outgoing
Conservative government. Gordon Brown called it “prudence with a
purpose”.

Ms Incredible

Whenever Labour has governed in an austere manner, it was framed as a

project of morality rather than the performance of credibility. Fiscal
conservatism was pursued by centre-left governments not merely because it
was a pragmatic course, but because it was, they argued, right—just as it is
today when unemployment is low and debt is both high and expensive. By
contrast, under Ms Reeves, difficult choices are made on the basis of foolish

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rules designed to make the government look credible—even when their
actual effect does the opposite. Rather than a tool for social democratic
ends, looking credible has become a goal in itself.

Ugly choices will befall Ms Reeves in the coming year and beyond. The
government can still be the master of its destiny, rather than the victim of it.
If Labour wishes to reform Britain’s failing benefits system, it can do that,
rather than reverse-engineering a welfare system around fiscal rules
everyone admits are a farce. If Labour wants to rejig Britain’s tax system, it
can make the case for that rather than being forced into it by a market
wobble. Stop trying to look credible. Try to do right. ■

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which brings together the best of our leaders, columns, guest essays and
reader correspondence.
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International
Marco Rubio will find China is hard to beat in Latin
America
The Telegram :: China buys lithium, copper and bull semen, and doesn’t export its ideology

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The Telegram

Marco Rubio will find China is

hard to beat in Latin America
China buys lithium, copper and bull semen, and doesn’t export its ideology
1月 16, 2025 09:08 上午

SINCE ITS founding by landowners in 1866, the Rural Society of

Argentina—motto, “To Cultivate the Soil is to Serve the Nation”—has been
a potent ally for governments of the right and a daunting foe for the left.
The society’s campus in Buenos Aires, home to a big annual agricultural
fair, dominates a city block in the heart of the capital. Hosting The
Telegram for a chat about geopolitics, society officers deplore decades of
economic mismanagement by populist left-leaning governments, which
caused inflation to soar and the Argentine currency to sink. On the way out,
they show him some of the society’s historic treasures, including a carved
armchair used by the late Pope John Paul II.

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Yet when asked about the People’s Republic of China, they purr. “China is a
bottomless barrel. Whatever you can offer, they will take,” says Nicolás
Pino, the society’s president. He describes rising exports to China of
Argentine soyabeans, frozen beef, semen from prize bulls and other farm
goods worth billions of dollars. Latin American farming barons are often
selling to state-owned agencies, guided by orders to enhance Chinese food
security and self-reliance handed down by Communist Party leaders. If the
Rural Society has qualms, they involve not the political leanings of Chinese
officials, but their hard-nosed approach to commerce. When selling to
Europeans, once the price and quality of exports have been established “the
trade flows”, says Mr Pino. In contrast, Chinese importers decided not long
ago that they were paying too much for beef and unilaterally cut the price
by more than two-thirds, “and not only for future sales, but for meat that
was already at sea”. Alas, lower prices created new perils for Argentina,
Brazil and other Latin American countries that sell millions of tonnes of
meat to China each year. In the final days of 2024, Chinese regulators
announced a probe into imported beef prices at the demand of hard-pressed
domestic producers.

Still, cattle barons and other conservative interests call China an invaluable
partner. In interviews with politicians, industry bosses and diplomats from
across Latin America, there is praise for China’s business-friendly
“pragmatism”. That was not always a given. When China first showed a
serious interest in Latin America, a generation ago, it caused alarm in
Washington and other Western capitals by channelling some of its largest
investments and loans to left-wing anti-American regimes, notably in
Venezuela. In the years since, prominent conservatives have continued to
worry about enemies of the West colluding in the Southern hemisphere. In
late 2023 Marco Rubio, a Republican senator from Florida, demanded that
President Joe Biden impose sanctions on a former left-wing Argentine
president, Cristina Fernández de Kirchner. Noting Ms Kirchner’s conviction
for graft, Mr Rubio accused her of enabling “malign actors like China and
Iran to deepen their corrupt influence in a critical US ally, Argentina”. He
pointed in particular to “nebulous agreements for public works contracts
that compromise both the United States’ and Argentina’s security”. In
particular, Mr Rubio pointed to a satellite-tracking radar station built by

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China in a remote Argentine desert, operated by a branch of the People’s
Liberation Army.

Mr Rubio, a flinty Cuban-American conservative, will soon be making his

case in person to Latin American leaders, for he is President-elect Donald
Trump’s nominee for secretary of state. He has friends across the region,
including in Argentina, whose libertarian president, Javier Milei,
campaigned for office in 2023 by threatening to break relations with
China’s government, saying: “I don’t make pacts with communists.”

Mr Milei has changed his tune as president, declaring the Chinese “a very
interesting partner; they don’t ask for anything, except that they should not
be bothered”. Soon after his victory Chinese envoys did raise Mr Milei’s
campaign rhetoric, say well-informed Argentines. But they expressed
understanding about his disastrous inheritance, involving vast foreign debts
and a wrecked domestic economy, and declared that China would not be
“an obstacle to Argentina’s recovery”. In June 2024 China extended a
currency swap equivalent to billions of dollars for two more years, giving
Argentina’s foreign reserves some breathing room.

For China, friends come and go, interests are enduring

Local bigwigs are unsurprised, noting that China’s investments increased

after a pro-business, American-educated centrist, Mauricio Macri, defeated
Ms Kirchner to become Argentina’s president from 2015 to 2019. China’s
interests in Latin America are unquestionably strategic, says Carlos
Ruckauf, a former Argentine vice-president and foreign minister. He points
to Chancay, a Chinese-built and controlled port in Peru, which will be the
largest and deepest on South America’s Pacific coast. He acknowledges
warm Chinese ties with the Kirchners, who lavished praise on China’s
governance. But “with China, ideology is clearly in second place”, he says.
“We are lithium, copper and food for them.” The challenge for the continent
is to cut business deals with China that do not cross America’s red lines, he
suggests. Allowing Chinese firms into telecommunications networks “may
be a red line”. Chinese ambitions to develop a port near Antarctica were
“appalling” to America, he says. China’s space-peering radar station is a
“very hard” problem because it is governed by a bilateral treaty.

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Bigwigs from several Latin American countries have the same message for
the Trump team. To compete with China, America must offer alternatives.
In Chile, the Biden administration scored a win when a Chinese bid to build
a submarine internet cable from Chile to Asia was beaten by a Western
consortium including Google. The first Trump presidency saw many threats
and lectures directed at southern neighbours. To curb China’s influence,
“The Art of the Deal” would be a better guide. ■

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Business
Why elite MBA graduates are struggling to find jobs
School’s out :: Is a degree still worth it?

Can the Gulf states become tech superpowers?

From oil to AI :: The region’s rulers want to move away from fossil fuels

One of the biggest energy IPOs in a decade could be

around the corner
Hot stuff :: Venture Global, a large American gas exporter, is going public

Will Elon Musk scrap his plan to invest in a gigafactory in

Mexico?
Tesla and Mexico :: Donald Trump’s return to the White House may have changed Tesla’s
plans

Germany is going nuts for Dubai chocolate

Food fads :: Will the hype last?

The year ahead: a message from the CEO

Bartleby :: From the desk of Stew Pidd

The UFC, Dana White and the rise of bloodsport

entertainment
Schumpeter :: There is more to the mixed-marital-arts impresario than his friendship with
Donald Trump

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School’s out

Why elite MBA graduates are

struggling to find jobs
Is a degree still worth it?
1月 16, 2025 07:18 上午

IN BUSINESS THERE is no surer sign of distress than when a firm delays

its financial results. That also appears to be true of business schools. Around
Christmas—and in many cases behind their usual schedules—America’s
leading business schools published their equivalent of annual reports, which
include data on the new jobs of graduates from their Master of Business
Administration (MBA) programmes, typically two-year courses for students
with professional experience. We have crunched the numbers. At the top 15
business schools, the share of students in 2024 who sought and accepted a
job offer within three months of graduating, a standard measure of career

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outcomes, fell by six percentage points, to 84%. Compared with the average
over the past five years, that share declined by eight points.

Some declines are jaw-dropping. The Massachusetts Institute of Technology

(MIT) has a decent claim to be the world’s top university. But at its business

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school, named after Alfred Sloan, a giant of the car industry during the 20th
century, the wheels are coming off. During the decade to 2022, on average
82% of its students searching for a job had accepted one at graduation, and
93% had done so three months later. In 2024 those figures were 62% and
77%, respectively. At some elite schools the reality may be even worse than
it looks. One professor worries that some students who are counted as
entrepreneurs are in fact unemployed. American business may be booming.
But those who imagine themselves as its future leaders are suffering a
recession.

America’s business schools are used to criticism. The argument that

business is something which is done and not taught has been around at least
since the first Harvard Business School (HBS) class convened in 1908.
“Union cards for yuppies”, is how MBAs are described in “Snapshots from
Hell”, a memoir by Peter Robinson, a former Stanford student, published in
1994. “Today it is possible to find tenured professors of management who
have never set foot inside a real business,” snarled a 2005 article in, of all
places, Harvard Business Review. Some hold business schools responsible
for everything wicked about capitalism. Others, meanwhile, accuse their
graduates of being ineffective capitalists. Elon Musk has lamented the
number of MBAs running big firms.

The stereotype of profit-maximisation is not entirely unfounded. One study

by Daron Acemoglu, Alex Xi He and Daniel le Maire, three academics,
shows that managers with business degrees are less likely to share profits
with workers than their less commercially experienced peers. What are
these folks like on weekends? Another paper from 2007 by Nicole
Stephens, Hazel Markus and Sarah Townsend found that when compared
with firefighters, MBA students were orders of magnitude more likely to be
upset if a friend knowingly bought the same car as theirs.

What is beyond doubt, however, is the enormous success of America’s

business-school graduates. Entire classes of HBS graduates have been
eulogised: Fortune magazine dubbed the graduates of 1949 the “the class
the dollars fell on”. The class of 1982 included Jamie Dimon, the boss of
JPMorgan Chase, Jeffrey Immelt, the former boss of General Electric, and

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Seth Klarman, a notable investor. Nearly half of companies in the S&P 500
index are run by an MBA graduate.

That is a deep well of prestige. But it must be continuously replenished by

students snaring great jobs. Business success is, after all, the main object of
business education. And as recent employment data suggest, that success is
now less secure.

Consulting and finance industries have long absorbed the majority of

graduates from elite business schools. Every year McKinsey, Boston
Consulting Group and Bain, the top consultancies, send lots of their
promising employees to business schools. Many return after their degrees,
along with new converts to the industry.

The business-school-consulting complex allows the firms to bag qualified

students of an enthusiastic but obedient bent; business schools get a steady
stream of quick studies and reliable fees. The share of students opting for
jobs in finance, particularly at banks, has fallen since the financial crisis.
But there remains a sizeable cadre of private-equity bros on campus. Some
describe themselves arithmetically: one career path is the “2+2+2”, a
succession of two-year stints in investment banking, private equity and
business school, which serves as a well-paid and punishingly fast treadmill
for some of America’s brightest.

When consultancies slowed their hiring after a boom during the pandemic,
business schools felt the squeeze. Our analysis of data from four schools
(Chicago Booth, Columbia, MIT Sloan and NYU Stern) finds that the
number of graduates ending up at the big three consultancies declined by a
quarter last year, compared with the three years before.

Just as worrying for business schools is tech, which is also hiring fewer
MBAs. Declines in hiring by technology giants (Alphabet, Amazon, Apple,
Meta and Microsoft) are particularly stark. At the four schools in our
analysis students ending up in big tech fell by more than half last year,
compared with the average between 2018 and 2022, to about 50.

Some of these troubles are doubtless cyclical. The technology sector is

prone to booms and busts. After the dotcom bubble burst, the share of

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graduates from the Wharton School at the University of Pennsylvania who
entered “high tech” industries collapsed from 17% to 8%. This time the
decline in big tech’s interest in MBAs seems to have predated the post-
pandemic market correction. It is possible, then, that firms are beginning to
sour on professional managers. Even if the consulting industry springs back
to life, few think the MBA will be as critical to getting on in the future.
Advanced degrees, particularly in science and in engineering, are seen as
more credible by consultants’ clients today.

What other options do students have? A small but growing number are
choosing to run a small business, rather than work their way up a big one.
Investors are handing over cash to “search funds”, where recent business-
school graduates attempt to acquire and operate a firm. Investors’ returns
are impressive, even if numbers are small—a survey from Stanford says 94
funds were launched in 2023. “It’s a lower-risk way to try entrepreneurship;
the results are not as binary as if you start a new company,” says Lacey
Wismer of Hunter Search Capital, which backs such funds. “Some of the
best MBA students pursue this path. It’s not the McKinsey rejects,” says
Mark Agnew of Chicago Booth. Judging by the interest on campus, many
more are likely to try it.

Donald Trump, MBA

Convulsions in white-collar industries are only half the story. After all,
business schools have one foot in commerce and the other in the quad.
Their enthusiastic embrace of diversity, equity and inclusion (DEI) since
2020 means they have not been spared the crisis of legitimacy afflicting
their parent universities. Nestled between big universities, corporations and
consultancies—all of which have zealously pursued racial and gender
diversity in recent years—it is hardly surprising that some business schools
went all-in: Wharton even allows MBA students to major in DEI.

In other ways, too, business schools are out of step with the moment. If
America is reindustrialising, word has not yet reached the campus. Business
is the most common field of graduate study in America, with around four
times as many students doing master’s degrees in the subject as
engineering. Will business schools be as keen to change their teaching to

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reflect the rules of doing business in Donald Trump’s America? Probably
not. Even if hiring does improve, that will leave them exposed and out of
touch. ■

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From oil to AI

Can the Gulf states become tech

superpowers?
The region’s rulers want to move away from fossil fuels
1月 16, 2025 07:17 上午 | DUBAI

FEW MIDDLE powers have the towering technological ambitions of the

rich Gulf states. As they seek to shift their economies away from fossil
fuels, the Emiratis want to lead the world in artificial intelligence (AI) and
the Saudis want the kingdom to become home to startups in cutting-edge
areas such as robotics. Those aspirations, however, are about to collide with
geopolitical reality.

The fascination with tech is not new, but the scale of the plans is. In March
the United Arab Emirates (UAE) created MGX, a tech-investment company
with a target size of $100bn, which will invest in AI infrastructure, such as

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data centres and chips. It has also set up a $10bn AI venture-capital fund. In
Saudi Arabia a number of different funds with a combined firepower of
$240bn will splurge on AI, data centres and advanced manufacturing.

The rulers are making bets in three areas. One is model-making and
applications. The Technology Innovation Institute, a research unit backed
by Abu Dhabi, released Falcon, an impressive large language model (LLM),
in 2023. It is now working on new versions, as well as smaller models. Last
year G42, an Emirati-backed firm, unveiled Nanda, a Hindi model, while
the Saudi Data and AI Authority launched Allam, an Arabic LLM.
Mubadala, the main sovereign-wealth fund in Abu Dhabi, has invested in
Anthropic, a top AI startup, among a string of other AI firms.

The Gulf’s companies are also beefing up the region’s infrastructure. E&,
an Emirati telecoms company, will help to build part of a 45,000km-long
subsea cable that makes its way around south Asia, Africa, the
Mediterranean and Britain. A data-centre construction boom is under way,
too, with the likes of Khazna, a unit of G42, and Damac, an Emirati
property developer, building facilities.

Gulf companies are building data centres abroad, too. Damac is a

longstanding business partner of Donald Trump, helping him manage golf
courses in the Middle East (Hussain Sajwani, its boss, is known as the
“Donald of Dubai”). On January 8th Mr Trump said that Damac would
invest at least $20bn in data centres in America. In August Mubadala
invested in Yondr, a Los Angeles-based data-centre developer.

A third area is chip manufacturing, which the UAE seems especially keen
on. Samsung, a South Korean electronics giant, and TSMC, the world’s
largest chipmaker, have held talks with officials to build plants in the UAE.
Sam Altman, the boss of OpenAI, has convinced the UAE’s sheikhs, among
other investors, to fund his chipmaking plans.

There are early signs the strategy could come together. The total capacity of
all data centres currently in construction in Saudi Arabia and the UAE has
grown about ten-fold in the past five years. Investment has flowed in. The
Gulf recorded almost $8bn of foreign direct investment in tech
infrastructure and another $2bn in software in 2024, up three-fold from

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2017, according to fDi Markets, a data firm. Talent is moving, too. BCG, a
consultancy, says that the AI talent pool in the UAE and Saudi Arabia has
grown by over one-third and almost a fifth, respectively, since 2022.

But a big risk looms over the Gulf’s ambitions: souring relations between
America and China. The rulers have leaned heavily on America’s big
technology firms for partnerships. At the same time, they have struck plenty
of deals with large Chinese firms, including Huawei, a tech company, and
China Telecom, communications firm. Saudi Arabia has invested $400m in
Zhipu AI, one of China’s most prominent AI companies. Moreover, the
data-centre boom relies on China: about a third of imports of servers, chips
and storage devices by Saudi Arabia and the UAE come from the country.

American policymakers are clearly wary of this relationship. Last year

Cerebras Systems, an AI chipmaker that counts G42 as its biggest customer
and a minority investor, was forced to postpone its public offering
reportedly because of America’s concerns about the Emirati firm’s links
with China. And then on January 13th Joe Biden proposed tighter controls
on American exports of leading-edge semiconductors. That would involve
capping chip orders for countries that are not deemed allies—such as the
Gulf states.

The Gulf’s rulers may hope their close ties to big American tech firms will
help insulate them from such machinations in Washington. Google, for
instance, plans to set up an AI hub in Saudi Arabia. Microsoft has invested
$1.5bn in G42.

But ultimately they will face an uncomfortable choice. Geopolitical

tensions are likely to intensify during Mr Trump’s second term. America’s
tech giants already see themselves in a race with China. Brad Smith,
Microsoft’s president, says that “the real key to American leadership from a
long-term perspective is to put American technology around the world—
and to do it faster than China does.” If the Gulf’s rulers want their tech
dreams to materialise, they may eventually be forced to pick a side. ■

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Hot stuff

One of the biggest energy IPOs in a

decade could be around the corner
Venture Global, a large American gas exporter, is going public
1月 16, 2025 07:18 上午 | NEW YORK

THE DISRUPTIVE innovator of the global gas industry is stepping out of

the shadows. On January 13th Venture Global, a privately held exporter of
liquefied natural gas (LNG) based in Virginia, unveiled details of its
planned flotation in New York. About a decade ago it sprang from obscurity
and shocked incumbents in America’s Texan oil patch by using scalable,
modular equipment made in factories rather than costly, bespoke techniques
used by its competitors. In doing so, the upstart reduced the time required to
build a massive LNG terminal by about half, to less than three years. That
helped it to undercut rivals on price and win early contracts with prestigious
customers including Shell, a British oil major.

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Since then the firm has only grown in stature. When its second export
terminal in Louisiana comes fully online, it will become the second-biggest
LNG exporting firm in America, whose share of the world’s supply of LNG
is set to grow (see chart). Venture Global has already raised a whopping
$54bn in capital to fund its investments and expansions. Now the firm
wants to tap public equity markets. It aims to raise roughly $2.2bn, which
would make it one of the biggest energy public offerings in over a decade.
The proposal would value the company at more than $100bn, leapfrogging
the valuations of such giants as Britain’s BP and China’s Sinopec.

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If that sounds ambitious, consider three tailwinds. The first is that Venture
Global has proved itself. Its agile technical approach could revolutionise the
LNG business; competitors are now looking to adopt modular technologies.
That helped it earn $4.9bn in operating income and $7.9bn in revenues in
2023 (the latest full-year figures available), up from $3.6bn and $6.5bn,
respectively, in the previous year. On one estimate, its long-term contracts
are expected to rake in revenues exceeding $100bn over the next two
decades.

Second, the rise of artificial intelligence is proving to be a boon for natural

gas. Gas is much cleaner than coal, which matters for big tech firms that are
aspiring to meet their net-zero targets on carbon emissions. Gas plants run
reliably regardless of whether the wind blows or the sun shines, which gives
them an edge over intermittent renewables (unless those are deployed with
big batteries).

The final factor, and the reason Venture Global’s bankers and lawyers toiled
through the Christmas holidays on their listing documentation, is the most
important. It is no coincidence that shares of the firm are expected to start
trading on the New York Stock Exchange next week—just days after
Donald Trump is inaugurated as president on January 20th. He is an
unabashed supporter of fossil fuels, and has explicitly called for boosting
LNG exports. He has vowed that one of his first acts in office will be to end
a controversial “pause” imposed by President Joe Biden on the approval of
certain LNG projects. A reversal would remove a cloud hanging over the
industry.

Of course, not all will be smooth sailing. The firm may be too ambitious in
the pricing of its shares, and its listing may fall flat as a result. Its
aggressive commercial tactics have led big customers including BP and
Shell to file arbitration claims worth over $5bn combined. They say, among
other things, that when prices spiked Venture Global sold gas on the spot
markets rather than fulfilling its contractual obligations to the oil giants
(something the firm vigorously denies). Moreover, analysts predict that
within a few years the global LNG market will suffer from a glut that could
prove painful for suppliers. Venture Global may have to come up with yet

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more innovations if it is to fare as well as a public company as it has as a
private one. ■

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Tesla and Mexico

Will Elon Musk scrap his plan to

invest in a gigafactory in Mexico?
Donald Trump’s return to the White House may have changed Tesla’s plans
1月 16, 2025 07:18 上午 | MEXICO CITY

ELON MUSK likes to think big, from giant rockets to blockbuster pay
packets and massive, if misguided, investments in social media. In
Mexico’s case it was an investment, announced in March 2023, in “the
biggest EV plant in the world”. Tesla’s boss said that he would spend $5bn
to build a “gigafactory” in Nuevo León, a state bordering the United States,
that on completion in 2026 would churn out more electric vehicles (EVs)
than any of his existing facilities in America, China and Germany. Almost
two years later, however, Tesla has yet to break ground. Why has the
mercurial Mr Musk’s interest cooled?

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Many of the world’s biggest carmakers have set up shop in Mexico. Its
attractions include cheap labour, a well-established supply chain and a large
home market—sales hit almost 1.5m vehicles in 2024. Free-trade
agreements, not only with America but with 50 other countries, make it a
base for exports. The country has also had an edge in the switch to battery
power. America’s Inflation Reduction Act (IRA) makes free-trade partners
such as Mexico eligible for subsidies for EVs made with raw materials
sourced on their soil. And even though it nationalised its reserves in 2022,
Mexico has plenty of lithium, which is used to make EV batteries.

Yet Donald Trump’s election victory puts the IRA in jeopardy, dimming the
prospects of Ford and General Motors, which are making EVs in Mexican
plants, and Mr Musk’s gigafactory. The billionaire had already judged that
politics might be an impediment. In July 2024 he said that he was “pausing”
Tesla’s plans. Were Mr Trump to win the presidential election it would not
“make sense” to build a factory in Mexico, he said. Mr Trump has
threatened tariffs of 100-200% on cars made south of the border, in part to
encourage firms to bring production back to America and also to head off
Chinese carmakers. BYD and others might have hoped that building
factories in Mexico would have helped them sidestep hefty tariffs on
Chinese imports that have, in effect, banned their cars from America.

Mr Musk has since become the president-elect’s bosom buddy. Even so it is

uncertain that he would be able to persuade Mr Trump, a keen fan of tariffs,
to drop his plans. But another reason why Mr Musk is in no rush to make
cars in Mexico is a change in strategy. Tesla is now betting its future on
Robotaxis rather than the Model 2, a cheaper mass-market EV that would
undoubtedly have occupied a factory with capacity to make perhaps 1m
cars a year.

Mexican officials hope that Tesla will eventually revive its scheme. Marcelo
Ebrard, Mexico’s economy secretary, has said he is urgently seeking a
meeting with Mr Musk to see how the government can help. “Mexico
cannot afford to lose Tesla’s investment,” says Antonio Ocaranza, a
consultant, as it would be a powerful showcase to attract other foreign
companies.

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Mexico needs all the help it can get. Since Mr Trump started a trade war
with China during his first term, it has sought to position itself as an
alternative site for manufacturers beyond carmakers. Yet shortages of water,
energy and workers with the right skills are a challenge. Mr Musk’s changes
of mind are one thing. A failure to fix these basic problems means that
Mexico will be more exposed to the even mightier whims of Mr Trump for
four long years. ■

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Food fads

Germany is going nuts for Dubai

chocolate
Will the hype last?
1月 16, 2025 08:37 上午 | BERLIN

Middle Eastern delight

IT SOLD OUT in four days. The “Aldon Schokolade Dubai Style” was
created by patissiers at a fancy hotel in the centre of Berlin. It came in 500g
bars with ingredients like home-roasted pistachios and French Valrhona
chocolate. Only 50 were made and they went for the princely sum of €69
($71) apiece in November.

Germans usually resist food fashions. But since the end of last year they
have been hit with the Dubai chocolate craze. All over the country people
have feasted on imaginative treats based on the richly textured chocolate

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bars. At Christmas markets the young and old queued for Dubai chocolate
crêpes, hot Dubai chocolate, Dubai-style roasted almonds and Dubai
churros. A stand at one of Berlin’s markets even sold a half-metre Dubai
Bratwurst for €8. And when Lindt, a Swiss chocolate-maker, launched a
limited edition 150g bar called Lindt Dubai Style Chocolade for €14.99,
people queued for hours at shops in Düsseldorf and in Berlin.

Dubai chocolate was created by Sarah Hamouda, a British-Egyptian

entrepreneur based in Dubai, when she was pregnant in 2021 and craved an
unusual chocolate bar. She concocted a mix of pistachio cream, sesame
paste and knafeh, a crispy filo dough, which she encased in milk chocolate.
The colourful creations of the company she subsequently created, Fix
Dessert Chocolatier, became a viral sensation after Maria Vehera, a food
influencer, posted a video of herself eating a Fix chocolate bar on TikTok in
2023. It has since been viewed more than 100m times.

The success of the product is stirring up trouble at the border. Last month
customs officials confiscated 90kg of Dubai chocolate from a woman at
Hamburg airport. She had not paid import duties, and the sheer scale of the
haul (the chocolates were distributed between three suitcases) suggested
that she intended to sell them.

It is also the cause of corporate litigation. A court in Cologne recently sided

with Andreas Wilmers, an importer of chocolates from Dubai, who sued
Aldi, a discount supermarket chain, over its sales of the low-cost “Alyan
Dubai Handmade Chocolate”. Aldi sold the chocolate bars, which are made
in Turkey, for €3.79, vastly undercutting the €29.99 Mr Wilmers charges for
his imported handmade wares. The judge concluded that consumers might
assume the chocolate was made in Dubai because of its name. Aldi has
since dropped Dubai chocolate from its online offering. Mr Wilmers is also
suing Lindt (the firm argues that Dubai chocolate is a generic term, like
“Wiener sausage”).

Whatever the courts decide, the bigger question is whether the craze’s days
are numbered. Germans are notoriously frugal shoppers—which is one of
the reasons why Aldi and Lidl, another discount supermarket, are so
successful in the country. According to a recent survey by the Institute for
Generation Research, a German firm, more than 95% of respondents said

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that Dubai chocolate was too expensive, and more than 60% said that they
were not planning to buy any more.

Undeterred, Alois Müller, a dairy firm, is launching “Müllermilch Dubai

Chocolate Style” next month. Much like Lindt and the Adlon hotel, Alois
Müller is hedging, in case the popularity of the treat proves as ephemeral as
other social-media crazes such as the cronut (a cross between a croissant
and a doughnut) or the crookie (a croissant and a cookie). The chocolate-
milk drink will be available in shops for eight weeks. The secret to
sustaining consumers’ interest in confectionery in Germany may be keeping
production runs short—and sweet. ■

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Bartleby

The year ahead: a message from

the CEO
From the desk of Stew Pidd
1月 16, 2025 08:20 上午

DEAR FRIENDS and colleagues,

A belated happy new year to you all! This is my 11th new-year message to
you, but the first to come so late in January. As you know, I have been
recovering from a freak accident sustained during an equine leadership
course that I attended in Wyoming. I’d like to thank all of you who sent
good wishes, and reassure those of you who did not that I bear no grudges
towards you.

I have had a lot of time to think about what 2025 will bring over the past
few weeks. As I say every year, the business environment is more

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challenging than ever. The only thing we know about the future is that it is
coming. (And that it never arrives, but let’s forget about that for now.) In
2024 I coined the term “permavucalution” to describe the uncertainty we all
face. Although it has not caught on at all, I will be talking about it on a
panel at Davos next week. I would like it to be your constant watchword.

As I wrote in 2024 the biggest permavucalutionary trend by far is AI. I am

more and more convinced that artificial intelligence is the most important
technology in history since mankind discovered how to harness the power
of fire. It makes me wonder what the people who invented fire compared
that breakthrough to, assuming they could speak at all. (Maybe oxygen?)
Anyway, it really is a privilege to be alive at such a pivotal period in the
story of our species.

By using machine learning to make our budgeting processes a bit more

efficient we are already playing our part in history. Our task this year is to
keep up the pace of experimentation. Please keep sending your ideas for
how to incorporate this remarkable technology into our work to Denise and
the PRAIRIE team. Their motto—tinker, tailor, amplify, nothing beats the
power of AI—is one for all of us to follow.

This era of permanent upheaval is why I have been thinking a lot about our
culture as we begin the new year. Put simply, the world may change but we
must not. Our core values remain openness, humility and digital. I know
some people think that digital is not a value. But I believe that digital
changes everything, including grammar. That is why I’m pleased to
announce that we are changing the order of our values to literally put digital
first. Digital. Openness. Humility.

I have also been reflecting on my own leadership style. The equine course
had an unfortunate ending but it was an immensely meaningful experience
in so many ways. Horses do not care about titles. They do not care that I am
the chief executive of a major corporation. They do not know about my
work as a thought leader and philanthropist. It’s not clear to me that they
have any real appreciation of the business environment at all.

But in the time I spent with these magnificent creatures, I learned two
things. One is not to get too close. The other is that they respond

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instinctively to someone with a whip. There are lessons here for any
aspiring leader. I am sending all of the senior leadership team on the same
course this summer, and as long as they make it back safely, I am sure we
will all benefit from the results.

The equine course also convinced me that we will make real strides as a
team only if we are physically together. I know many of you are upset by
the requirement to be back in the office five days a week, but we simply
cannot build a thriving culture if many of us are working remotely. There is
a saying that you can lead a horse to water but you cannot make it drink.
But I have a follow-up question. How can a horse drink if it is not near
water in the first place?

Some of you have asked me whether we remain committed to causes that

we have championed in the past. I want to reassure you that we do. The task
of fighting climate change and saving our planet is not some kind of
corporate fad. Diversity also matters more to me than ever. Those who
know me will tell you that groupthink is my second-least-favourite thing,
after anchovies. But as so many of my fellow Davos attendees have
observed, we went too far in pushing an agenda that was nakedly political.
We will no longer be funding the Centre for Responsible Business, and will
use this money to set up a new foundation that promotes two long-standing
passions of mine: free speech and space exploration.

It is time for me to pack the merino gilet and head to the mountains. I feel
humbled to have led this company for so long after succeeding my father as
chief executive all those years ago. Thank you for your support and effort.

Here’s to 2025! Stew Pidd, CEO ■

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which brings together the best of our leaders, columns, guest essays and
reader correspondence.
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Schumpeter

The UFC, Dana White and the rise

of bloodsport entertainment
There is more to the mixed-marital-arts impresario than his friendship with
Donald Trump
1月 16, 2025 08:25 上午

“YOU LOOK thicker” sounds like a slight. Coming from Joe Rogan, the
thick-set podcasting megastar and martial artist, it is high praise. Directed at
Mark Zuckerberg, the uber-nerd behind Meta’s $1.5trn social-media empire,
it may seem highly misplaced. But it is true. Mr Zuckerberg does look
beefier than five years ago. During the covid-19 pandemic he got into
Brazilian jiu-jitsu, a rough combat sport. Now he would like to see more
“masculine energy” in the corporate world, too.

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A few days before he sat down with Mr Rogan, Mr Zuckerberg invited
Dana White, chief executive of the Ultimate Fighting Championship (UFC),
to Meta’s board. No other big sport league reeks more of testosterone than
the UFC, in which fighters square off in an eight-sided ring, (almost) no
holds barred. Few American business figures ooze in-your-face masculinity
more than the bald, bulky and brash Mr White. And not even Elon Musk is
as close to America’s alpha-male-in-chief.

Some observers point to Mr White’s decades-long friendship with Donald

Trump as proof that Mr Zuckerberg’s newly thick neck conceals a weak
spine. Meta has been the target of Trumpian ire since it banned the former
president from Facebook and Instagram after his bogus claims of a stolen
election led his followers to sack the Capitol four years ago. Having
someone with a direct line to the White House, where Mr Trump will be
moving back in on January 20th, is therefore mightily convenient.

This no doubt occurred to Mr Zuckerberg. Yet making Mr White’s elevation

at Meta out to be purely about toadying is to give neither man his due.
Whatever you think of his neck or spine, Mr Zuckerberg has a head for
commerce. He rightly sees in the UFC a growth business—and in Mr White
a canny businessman.

A Boston street brawler and amateur boxer turned gym operator in Las
Vegas, Mr White became enamoured with mixed martial arts some 30 years
ago. At the time the multi-discipline sport was being banned in many
American states and banished from big arenas. By the late 1990s some
fights were held in the car parks of third-rate gambling parlours in places
like Mississippi. Mr White spied an opportunity and in 2001 persuaded
Lorenzo and Frank Fertitta, childhood friends who ran a successful casino
business, to help him buy the struggling UFC for $2m.

At first red ink flowed as profusely as blood from fighters’ noses. But the
trio stanched the losses, cleaned up the sport and gradually won over
mainstream audiences. In 2016 they sold it for around $4bn to a consortium
led by Endeavor, a talent and sports-marketing powerhouse. Even adding
the $50m or so that the Fertittas chipped in to cover initial losses and to
bankroll “The Ultimate Fighter”, a reality-TV show now in its 32nd season
which helped humanise what critics had disparaged as “human

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cockfighting”, this translates to an average compound annual return of over
40%. Not quite what Mr Zuckerberg made Facebook’s early backers, but
tidy by most other measures.

In 2023 Endeavor and WWE, a pantomime wrestling franchise now

streaming on Netflix, combined their assets into a publicly traded company,
TKO Group. Since then the UFC has earned its listed parent $1.3bn in
revenue and $770m in gross operating profit and helped nearly double its
market value to $24bn over the past year. Some 700m people in 170
countries are fans. They are young, mostly male, with a median age in
America of 37, compared with 39 for the NBA (basketball), 41 for
NASCAR (motor racing) and 46 for the NFL (American football). Nearly
half are aged 18 to 34, the knock-out demographic group for advertisers.

Analysts expect an almighty bidding brawl when the UFC’s broadcasting

rights come up for renewal in the next few months. With no other big rights
up for sale until 2028, these could fetch more than $1bn a year, double its
current deal with Disney’s ESPN sports network. Sales of tickets to live
fights and money from sponsorship deals, including with Monster Energy
drinks, Bud Light beer and Timex watches, are up.

The UFC might not be where it is without Mr White. He is no teddy bear.

Last year TKO reached a $375m settlement with ex-fighters alleging the
UFC suppressed their pay. In 2022 a video surfaced of him slapping his
wife. His mother has called him a “tyrant”. But as a businessman, he
displays two important talents.

The first is his ability to spot trends. He filled a gap in the market for
controlled aggression left by a disarray in the world of boxing. The UFC
has fewer rules but more sway than that more genteel sport’s disparate
federations. It is commissioner, owner and promoter all in one, says Mark
Shapiro, TKO’s president. Mr White was also early to grasp the power of
reality-TV and social media to paint fuller pictures of the fighters outside
the ring, and of streaming to bring it all to audiences. This, plus clever
match-ups, makes him “a mastermind of unscripted drama”, says Gareth
Balch of Two Circles, a sports-marketing agency. Ampere Analysis, a
research firm, reckons 61% of UFC fans would pay to watch it, better than
NASCAR (44%) and not far off the NFL (65%).

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A White knuckle ride

Mr White’s other trait is pragmatism. Despite his ties to Mr Trump and the
UFC’s association with a right-wing bro culture, he is no MAGA warrior. In
2016 he helped persuade Democratic state lawmakers and the governor in
New York to legalise the UFC there. He rubs along with Ari Emanuel, CEO
of TKO Group and brother of Barack Obama’s White House chief of staff.
After the American right boycotted Bud Light over an ad featuring a
transgender influencer in 2023, while Mr White was cutting a deal with its
owner, AB InBev, he successfully pressed Mr Trump and his acolytes to
uncancel the brand. As one of the world’s top ad men, Mr Zuckerberg
would recognise this as a marketing coup for the annals. ■

If you want to write directly to Schumpeter, email him

at schumpeter@economist.com

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Finance & economics

Why global bond markets are convulsing
Yield to pressure :: Pity anyone taking out a mortgage

Will Donald Trump unleash Wall Street?

It’s all about bucks :: Bankers have plenty of reason to be hopeful

Iran is vulnerable to a Trumpian all-out economic assault

Mullahs cornered :: Oil prices are already at a five-month high

Ethiopia gets a stockmarket. Now it just needs some firms

to list
Ring hollow :: The country is no longer the most populous without a bourse

Are big cities overrated?

Up in smoke :: New economic research suggests so

Why catastrophe bonds are failing to cover disaster

damage
Buttonwood :: The innovative form of insurance is reaching its limits

“The Traitors”, a reality TV show, offers a useful

economics lesson
Free exchange :: It is a finite, sequential, incomplete information game

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Yield to pressure

Why global bond markets are

convulsing
Pity anyone taking out a mortgage
1月 16, 2025 07:18 上午

ALMOST EVERYWHERE, government-bond yields are in flux. Those on

ten-year American Treasury bonds are now at 4.7%. German bunds offer
2.6%, compared with close to 2% in December. Japanese bond yields are
climbing (see chart 1). Things are particularly extreme in Britain, where gilt
yields recently reached almost 5%, their highest since 2008. Rising yields
are bad news for governments, which must pay more to service debts. They
are also painful for all sorts of other borrowers, including many mortgage-
holders, whose bills ultimately depend on governments’ borrowing costs.

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What is going on? Central bankers across the rich world have cut interest
rates—yet the real economy is seeing little or no relief. The borrowing costs
facing firms and households have barely budged. In the euro area the
interest rate on new business loans has fallen by less than a percentage
point. A British consumer hoping to borrow £10,000 ($12,200) pays an
average rate of 6.75%, just short of a recent peak. In America the rate on a
30-year fixed mortgage is close to 7%, having risen by a percentage point in
the past few months. This marks a profound shift from before and during
the covid-19 pandemic, when yields were heading to all-time lows.

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Inflation is part of the explanation. In a world where consumer prices are
rising quickly, investors demand higher bond yields both because they
expect central banks’ policy rates to stay higher for longer, and in order to
compensate for the anticipated erosion of the principal’s purchasing power.
Sure enough, yields fell a little on January 15th after a data release showed
American consumer prices had risen by less than traders had feared (annual
inflation was 2.9% in December).

Despite this welcome surprise, the overall pace of price rises has quickened
in both America and other big economies. Across the G10 nominal wages
are still increasing at 4.5% a year, which, given weak productivity growth,
is probably sufficient to keep inflation above central banks’ targets. In the
euro area there are signs that wage growth is actually heating up. Survey-
based measures of inflation expectations, in some countries, are rising. So
are most inflation readings. Average inflation in the G7 rose from 2.2% in
the year to September to 2.6% in the one to November.

But market pricing suggests something else is also at play. Worries about
price rises are not—at least outside Japan—showing up in rising
expectations as measured by inflation derivatives (financial contracts with
pay-offs determined by price readings). In America, Britain and the euro
area such inflation expectations have fallen in recent weeks. Investors seem
to believe the economy has more inflationary pressure than previously
supposed, but also that central banks, in the most likely scenario, will be
able and willing to contain price rises with more hawkish monetary policy.

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Instead, the most significant change concerns increased uncertainty in
investors’ expectations. This could be pushing up the “term premium”—the
additional yield investors charge on long-term government bonds, over and
above that attributable to the changes in the central bank’s policy rate that
are already expected. The term premium compensates bondholders for the
risk that bond prices fall sharply, say if unexpected inflation forces central
banks to aggressively raise rates. Indeed, increases in the premium on ten-
year Treasury yields account for almost all the increase in these yields since
early December (see chart 2).

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Political betting

It is easy to see why uncertainty has spread through the market. Will
Donald Trump deport millions of people? Nobody knows. But if he
succeeds inflation could jump as employers lose workers. The story is
similar for tariffs, which would also increase prices. At the same time,
potential Chinese counter-measures in a trade war, such as a devaluation of
the yuan, could prompt a global deflationary shock.

Investors are also unsure about economic growth. The dominant narrative
veers from one extreme to the other. Some investors worry about the
damaging effects of deglobalisation and a slowing Chinese economy. Yet
there are optimists, too, including those who believe that Mr Trump’s
mooted economic-policy reforms, including slashing red tape and cutting
taxes on everything from tips to Social Security, will spur growth. Maybe
an AI-powered productivity surge is round the corner. The effect of all these
contradictory scenarios is to raise the term premium on government bonds
even more.

Fiscal policy is not helping matters. This year G7 governments are expected
to run an average budget deficit of 6% of GDP—unusually high given that
unemployment is low and economies are growing well enough. Funding
these deficits means issuing fresh bonds. America is expected to issue about
$2trn-worth (equivalent to 7% of GDP) this year, after accounting for
redemptions. Euro-zone governments will collectively issue perhaps
€500bn ($514bn, or about 3% of GDP).

Such hefty supply puts pressure on bond prices to fall—forcing up yields,

which move inversely. Plenty in the market fear that America’s fiscal
trajectory, long unsustainable, will soon be brutally exposed, especially if
Mr Trump’s promised tax cuts do indeed materialise. A revolt by
bondholders could send yields yet higher. Research by Goldman Sachs, a
bank, suggests that each percentage-point increase in the deficit-to-GDP
ratio raises long-term yields by about 20 basis points. In America the supply
of long-term Treasuries may grow by even more than the deficit would
suggest. Scott Bessent, Mr Trump’s pick for treasury secretary, has

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previously proposed borrowing less via short-term notes and more via long-
maturity bonds.

Central banks are making life harder still for spendthrift governments. To
deal with high inflation in 2021-23, they launched quantitative tightening
(QT), reducing the size of their balance-sheets by offloading government
bonds (and other securities). With central banks no longer buying bonds,
and in many cases actively selling them, private investors have to absorb
even more. We estimate that this year, because of QT, the average G7
country will in effect have to sell double the volume of bonds it officially
plans. The European Central Bank’s QT is likely to more than offset efforts
by national governments to cut issuance by reducing budget deficits.

What happens next is, like everything now, supremely uncertain. In some
countries, especially Britain, it would be no surprise if yields fell a little
more. In part because QT is set to slow, the country will soon be selling
fewer bonds to the market. Meanwhile, across the rich world worries about
resurgent inflation could turn out to be misplaced. The fundamental forces
driving up yields are unlikely to disappear, however. Expansionary fiscal
policy is in vogue, geopolitical tensions continue to rise and trade tensions
could intensify.

Bear in mind that, although the term premium has risen, it remains nowhere
near the levels of the past. After high inflation and rapidly rising interest
rates during the 1970s and 1980s, which ravaged the real value of bond
portfolios, investors shunned government debt. Well into the 2000s, the
term premium was measured in full percentage points, rather than the tenths
of today. Imagine that investors are mistaken about the odds of central
banks cutting interest rates this year, and policymakers are instead forced to
start raising them again. In such a scenario, investors would have ample
reason to shun sovereign bonds. If they do, there is plenty of room for
yields to rise even further. ■

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It’s all about bucks

Will Donald Trump unleash Wall

Street?
Bankers have plenty of reason to be hopeful
1月 16, 2025 07:18 上午 | New York

His people

ACCORDING TO JAMIE DIMON, chief executive of JPMorgan Chase

and king of Wall Street, bankers were elated by Donald Trump’s election
victory. Many chafed under Joe Biden’s presidency, as mergers and bank
fees faced additional scrutiny, and new capital-market rules came thick and
fast. Now, with the inauguration of Mr Trump imminent, American
financiers will discover just how much cause they have for celebration.

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The industry will certainly experience an abrupt change in how it is
overseen. America’s regulatory agencies will take a permissive approach in
banking and beyond, with new priorities when enforcing securities laws.
Crypto is about to go truly mainstream. And looser rules could enable the
consolidation of America’s banking system, home to a vast number of small
and mid-sized lenders. The only danger, from Wall Street’s perspective, is
that the Trump team’s MAGA instincts and chaotic approach prevent a
deregulatory boom.

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One appointment is emblematic of the coming shift. Gary Gensler,
departing head of the Securities and Exchange Commission, annoyed Wall
Street by demanding disclosures on pay and meddling with private-market
funds. His replacement, Paul Atkins, served as an SEC commissioner under
President George W. Bush, and has been a critic of the agency’s approach to
prosecuting suspected wrongdoers, which he believes favours quantity over
quality. Mr Atkins prefers an “open jacket” method, in which the SEC
presents defendants with its evidence up front. This, he believes, would
speed up the process by enabling defendants to decide whether to settle
cases or go to court.

So far, so typical for a Republican administration. But Mr Atkins comes

with a twist. He is co-chair of the Token Alliance, a pro-crypto advocacy
group—and he will be joined by fellow digital-asset enthusiasts. French
Hill, the incoming head of the House Financial Services Committee, says
that he will pursue legislation confirming which digital assets are
commodities and which are securities in the first 100 days of the new
Congress. The Biden administration has also forced banks to report the
crypto they hold for clients on their balance-sheets, unlike the practice with
other assets. This rule is likely to be axed.

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Elsewhere, change will arrive faster still. Mr Trump is expected to revive
executive orders from his first term and rescind ones issued by Mr Biden.
Bankers hope the bonfire will include orders that increased scrutiny of
mergers, slowing tie-ups among America’s many banks. In each of the past
two years, fewer than 150 mergers and acquisitions have taken place, in
contrast to at least 250 a year in 2015-19. Although high interest rates have
played a part, the time taken to complete a merger has climbed, reflecting
closer scrutiny.

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Mr Trump’s appointees will also oversee the implementation of
international banking standards, known as the “Basel III Endgame”. A
proposal from the Biden administration and Federal Reserve in 2023 would
have lifted capital requirements on forms of mortgage lending, and meant
an average 16% rise in capital at banks with more than $100bn in assets.
Lenders argued the proposal went well beyond what the international
standards required. A version of the new rule that does not, in aggregate,
require any capital-raising by big banks now looks more likely.

It is not just Wall Street that is hopeful about the new administration. Other
parts of American finance are similarly upbeat, in particular the private-
equity industry. Shortly before the end of Mr Trump’s first term, the
Department of Labour issued guidance stating that managers of defined-
contribution pension plans could include some private-equity assets in their
portfolios without violating fiduciary obligations—only for the advice to
then be scrapped. Marc Rowan, chief executive and co-founder of Apollo
Global Management, a private-equity giant with $733bn in assets under
management, has said that getting access to such savings is the firm’s
“single biggest opportunity”.

Dog eat dog

The consolidation of America’s alphabet soup of financial regulators is

another long-held Republican aspiration. Members of Mr Trump’s transition
team have reportedly asked candidates for top jobs whether some of
America’s financial agencies could be eliminated. Elon Musk, a billionaire
tech executive who will run Mr Trump’s Department of Government
Efficiency, has said he would like to “delete” the Consumer Financial
Protection Bureau, an agency created by legislation passed after the
financial crisis. Merging or abolishing agencies would require assent from
both houses of Congress, however. With a razor-thin margin in the House of
Representatives, doing so may prove difficult.

That is especially true given probable opposition from some quarters of the
Trumpian alliance. In 2023 J.D. Vance, the vice-president-elect, joined
Elizabeth Warren, a trustbusting Democratic senator, to criticise financial
regulators for allowing JPMorgan to acquire the assets of First Republic

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Bank, which collapsed that year, arguing the deal would increase corporate
concentration. Even if Mr Vance does not pick up the baton in government,
other MAGA types almost certainly will. As such, the administration’s
response to a proposed acquisition of Discover by Capital One, two banks
specialising in credit cards, will hint at just how laissez-faire it will be,
suggests Christopher Wolfe of Fitch, a credit-rating agency.

The coming wave of deregulation has plenty going for it. Mr Biden’s efforts
to raise capital levels would have been an unnecessary squeeze on the
business of big banks. Heightened scrutiny of mergers has slowed
consolidation in a fragmented industry. Even some regulation of digital
assets has been needlessly aggressive. Deregulators who hope for a big
bang may find themselves disappointed, given internal constraints and
haphazard policymaking. Yet Wall Streeters who have kept their ambitions
in check could find much to commend in the Trump administration. ■

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Mullahs cornered

Iran is vulnerable to a Trumpian

all-out economic assault
Oil prices are already at a five-month high
1月 16, 2025 07:18 上午

Pipe down

ON NOVEMBER 25TH the Elva, a tanker flagged in São Tomé and

Príncipe, clandestinely picked up 2m barrels of Iranian crude off Malaysia’s
coast. Sailing from there to north-east China, the vessel’s likely destination,
usually takes two weeks at most—but not this time. On December 3rd,
alleging the Elva had breached sanctions, America blacklisted the ship,
exposing anyone dealing with it to punishment. Six weeks on, it is still
stranded.

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And the Elva has company. Since October, when the Biden administration
started cracking down on Iran-linked tankers, their crude deliveries to
China, which buys nearly all of Iran’s oil, have shrunk by a quarter, to 1.3m
barrels per day (b/d). At the same time, loadings from Iran have continued
apace, in the hope of a change of circumstances. The result is that there is
now four times as much Iranian oil stranded at sea—20m barrels—most of
which sits off the coasts of Malaysia and Singapore.

In the final days of the Biden presidency America is striking Russia, too. On
January 10th officials announced new sanctions against 143 tankers, as well
as large exporters and insurers. This will cause headaches for Vladimir
Putin, and is one reason why Brent crude, the global benchmark, hit $82 a
barrel on January 15th, its highest in five months. Yet it is Iran that faces the
bigger threat. Although Donald Trump is ambivalent about blockading
Russia, he is committed to strangling Iran’s finances. He may well succeed,
and in doing so disturb global energy markets.

Joe Biden had turned a blind eye to Iran’s oil trade. Between 2018, when
the first Trump administration reimposed harsh sanctions, and last year, the
country’s crude exports grew 12-fold, to 1.8m b/d. Then, in October, Mr
Biden changed tack. In the months since, the Treasury has added 55 tankers
to its Iran-linked blacklist, equivalent to a third of the “dark” fleet tasked
with carrying Iran’s crude, says Homayoun Falakshahi of Kpler, a data firm.

Black mark

Officials seem to have realised that their lenient approach towards Iran has
failed. The country has been weakened not by sanctions but by Israel’s
victories over Hamas and Hizbullah, as well as the fall of Bashar al-Assad
in Syria. It is also close to building a nuclear weapon. Global oil supply is
plentiful and demand weak, making it less likely that sanctions will hurt
American consumers. Expensive petrol will, in any case, be Mr Trump’s
problem.

The Biden administration is making clever use of sanctions. Most of Iran’s

barrels are bought by small refiners in China’s north-east, dubbed “teapots”,
which rely on cheap crude to turn a profit. The teapots sell their products at

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home in local currency. That makes them immune to “secondary” sanctions,
which ban American firms from dealing with any company that knowingly
buys Iranian oil. But they still need Iran-linked tankers to dock at Chinese
ports, many of which also earn a living by shipping goods to America.

Aware of this, sanctions enforcers have targeted tankers on the last leg of an
Iranian barrel’s journey, often from Malaysia to China. Fearing punishment,
Chinese ports have started to reject such vessels. On January 6th Shandong
Port Group, which runs ports in Qingdao, Rizhao and Yantai, among other
places, banned tankers blacklisted by America. Since supply has begun to
dry up, Iranian crude now trades at just a $1.50 discount to Brent, the global
benchmark, compared with $6.50 three months ago. The price rise is
enough to have forced some teapots out of the market, in turn curtailing
demand for Iranian oil.

Iran is working hard to replace blacklisted tankers with “clean” ones. Yet
the global dark fleet has grown so large—it now absorbs most of Russia’s
oil exports—that doing so will take a long time, especially since Russia also
needs new tankers to replace those America blacklisted last week. On top of
this, China’s teapots were already struggling. A spate of larger, nimbler
refineries, built this decade, are eating away at their margins. The Chinese
government, which objects to their pollution, is granting them meagre
import quotas.

Enter Mr Trump. As a first step, his administration could add more tankers
and traders to the Treasury’s naughty list. A bigger step, which insiders say
Mr Trump’s team is discussing, would be to tell China that America will
place sanctions on any port receiving Iranian barrels. The most aggressive
option would be to impose eye-watering tariffs on China until its
government agrees to enforce a ban on imports of Iranian oil, among other
conditions.

Such tactics could lead Iranian exports to fall by 1m b/d by the summer,
against levels seen in 2024, says Bob McNally, a former adviser to
President George W. Bush. In a relatively benign scenario the global supply
surplus, coupled with spare production capacity, would keep the subsequent
price rise to $5-10 a barrel.

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A less benign scenario would see Iran respond by lashing out at other Gulf
countries—or, worse, blocking the Strait of Hormuz, a waterway through
which 30% of the world’s seaborne crude and 20% of its liquid natural gas
passes. America might in turn respond by sending in its navy. Iran’s leaders
have said that if they cannot export, no one else will. Once cornered, they
could resort to desperate measures. The time has never been better for an
economic assault on the Islamic Republic. That does not make it a safe
choice. ■

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Ring hollow

Ethiopia gets a stockmarket. Now it

just needs some firms to list
The country is no longer the most populous without a bourse
1月 16, 2025 07:18 上午 | Johannesburg

IT WAS A momentous occasion. But the peal of the bell did not initiate a
flurry of trading at the Ethiopian Securities Exchange, which opened on
January 10th. With no brokers and only one listed stock, the exchange
enjoyed a relaxed start to life. The country’s officials nevertheless see the
institution as a crucial part of their liberalising economic reforms. Ethiopia,
home to some 130m people, had been the most populous country without an
exchange.

The rudiments of an earlier stockmarket did not survive the Emperor Haile
Selassie’s overthrow in 1974. Later governments believed that economic

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development should be directed by the state. In contrast, Abiy Ahmed, who
became prime minister in 2018, talks up the potential of the private sector.
In July the central bank floated the birr, a signal of intent after decades of
dirigisme. The government is opening industries such as banking, retail and
telecoms to foreign competition.

A new stock exchange is the “icing on the cake”, says Tilahun Kassahun, its
chief executive, who hopes to attract 50 listings in the next five years. He
says that domestic companies require ways to raise capital without simply
relying on bank loans. Although that may be true, it does not follow that
they will rush to capital markets. Most African exchanges are small and
illiquid. The continent’s family firms are often reluctant to open their books
to scrutiny. As a familiar joke goes, the biggest listed companies in Africa
tend to be the BBC: banks, breweries and cement.

In Ethiopia, too, banks are the most obvious candidates to list. They already
have thousands of shareholders, even if buying and selling their shares is
currently a cumbersome process, often arranged informally between
strangers on social media, and completed with a visit to the bank in
question. Shares in Wegagen Bank, a mid-sized lender, are the first and so
far only to trade on the new exchange. The opening of Ethiopia’s financial
industry to foreigners, who can now own up to 49% of shares in local
banks, might also encourage some banks to seek capital on the market.

A second source of listings will be state-owned firms. Around 40 have been

brought together under Ethiopian Investment Holdings, a newish state
investment fund. Its boss, Brook Taye, says that the government wants to
reform its firms, rather than rush into privatisation. Ethio Telecom, the
national telecoms provider, is selling a 10% stake to retail investors, while
seeking a strategic partner to buy a further 45%. Listings are being
considered for five other state enterprises, variously involved in shipping,
insurance, printing, school supplies and duty-free shops.

The launch of the exchange complements other reforms that loosen the
government’s grip on finance. For decades the state has squeezed savers
and pushed credit towards its favoured development projects at below-
market interest rates. Ministers now plan to relax some of the rules which
made such an approach possible, including those forcing banks to buy state

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debt. Capital has been cheap but scarce, says Nebil Kellow of First Consult,
a consultancy. For many firms, it might now become dearer but more
abundant.

These reforms are being introduced at a supremely difficult time. Ethiopia’s

government is badly in need of finance itself. It is in a stand-off with
foreign bondholders after missing an interest payment in 2023. Last year it
signed up to a $3.4bn IMF programme. The birr has lost more than half its
value against the dollar over the past six months. Although that has so far
not led to a surge of inflation, tight monetary policy, such as caps on bank
lending, is weighing on business.

Ultimately it is security, not securities, that will determine Ethiopia’s

economic fate. A devastating war in the northern region of Tigray ended in
2022. Other conflicts continue, notably in the vast regions of Amhara and
Oromia. Industrial parks have emptied of factories. Flower farms have been
looted. Last year 16m people required food assistance, according to the
World Food Programme, run by the UN. These are rarely the sort of
conditions that entice investors. ■

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Up in smoke

Are big cities overrated?

New economic research suggests so
1月 16, 2025 08:37 上午

JUDGED BY THEIR revealed preferences, people love cities. Metropolises

such as London and New York are bursting at the seams, with house prices
to match. China, meanwhile, can boast at least six cities bigger than either
of them. Across the world, 25% of people live in cities of over a million, up
from just 15% six decades ago.

Economists tend to think this is a great development. Cities, they argue,

benefit from “agglomeration”, the consequence of so many people living in
close quarters. For one thing, government and businesses can run more
efficiently: scale helps everything from public transport to the recruitment
of staff. For another, finding the next big idea is easier when like-minded

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people crowd together. Although London makes up 15% of Britain’s
population, it counts for 22% of its economic output.

But have economists overestimated the benefits of big cities? That is what a
new working paper by Matthew Turner and David Weil, both of Brown
University, suggests. Their analysis applies existing estimates of the impact
of agglomeration on economic efficiency and the pace of invention to a
model of the American economy. This allows the researchers to answer a
provocative question: how different would America look if, from 1900 to
2010, no urban area had grown to a population of more than 1m people?

According to their calculations, the answer is “not all that much”. Growth
would have been slower, but only a bit: the researchers reckon that
America’s total output would have been 8% lower in 2010 than it was in
reality. Such an income gap is smaller than that between America and
Denmark. Cities do make residents more productive, but the size of the
conurbation does not matter too much. As Mr Weil puts it: “Without big
cities, we would still have modern life as we know it.”

City enthusiasts may not be entirely persuaded by the authors’ number-

crunching, which inevitably relies on some heroic assumptions. Edward
Glaeser of Harvard University points out that Messrs Turner and Weil
presume innovation becomes harder over time, as the easy wins are taken,
meaning big cities gain less than they would otherwise from bringing the
best and the brightest together. Whether this pattern will continue in the
future is uncertain. Artificial-intelligence boosters would certainly contend
that innovation is likely to accelerate in the coming years.

There is plenty about city life that is unpleasant. In September, for instance,
Eric Adams, New York’s mayor, convened a “National Urban Rat Summit”,
as part of his “war on rats”. But big cities also clearly afford benefits other
than growth, as Mr Weil is keen to point out. Ultimately, high housing costs
reflect people’s desire to live in them, and this does not only stem from
sizzling job markets. ■

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Buttonwood

Why catastrophe bonds are failing

to cover disaster damage
The innovative form of insurance is reaching its limits
1月 16, 2025 07:18 上午

THE SCENES of devastation in Los Angeles were just the latest in a recent
barrage. Last year hurricanes in the Atlantic, earthquakes in Japan and
flooding in Europe all carried huge financial and human costs. Indeed, 2024
is set to be the year with the third-biggest insured losses, adjusted for
inflation, in more than four decades.

Surely, then, it is a bad time to own catastrophe bonds? These are securities
that protect issuers, mostly insurers and governments, from severe losses in
the event of a natural disaster by paying out when certain conditions are
met. In fact, across the asset class, such bonds returned 20% and 18% in

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2023 and 2024, respectively—the strongest two years in recent decades.
Instead of paying up, bondholders have reaped vast profits. Issuance has
boomed and the market has doubled in size over the past ten years. It is now
worth $50bn.

The gulf between the devastation and the rude returns available to
bondholders is a stark demonstration of the limits of the asset class. Yet
sometimes buyers and sellers of catastrophe bonds are a match made in
heaven. Issuers hope to cover themselves against low-probability outcomes
with costs that could overwhelm them. Investors are hungry for assets that
do not move in tandem with the rest of their portfolio. This opportunity has
become only more attractive since 2022, when bonds and stocks fell
together, whacking investors who believed they had diversified by buying
both. Viewed in such a light, catastrophe bonds are an example of financial
markets at their very best.

Part of the reason for the lack of recent payouts is the exacting terms on
which bonds are frequently issued. After Hurricane Beryl struck Jamaica in
July, for example, the country’s GDP shrank by almost 3% in the third
quarter of the year, driven by a 14% drop in agricultural output. Despite this
painful decline in economic activity, a catastrophe bond issued by the
Jamaican government and the World Bank did not disburse funds. The bond
had so-called parametric triggers—ones based on measurable
environmental conditions. In Jamaica’s case, the air pressure measured
during the hurricane was a fraction higher than the maximum level allowed
for the bond to pay out.

When it comes to California’s wildfires, catastrophe bonds face a different

and more fundamental challenge. Since the 1990s, when such bonds first
emerged, the market has mainly protected issuers against “peak perils”, or
the largest and most damaging events such as earthquakes and hurricanes.
However, it is the more common “secondary perils”—a bucket including
everything from the current wildfires to hail and thunderstorms—that have
expanded to take up a much larger share of total insured losses owing to the
impact of climate change.

Some 61% of the catastrophe-bond market still covers only losses from a
single major event, according to Artemis, a data firm. The other 39% of

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bonds in the market disburse funds when costs rise above an annual
threshold, meaning that numerous secondary perils can add up to produce a
payout. On top of this, investors are now demanding enormous returns in
exchange for protecting issuers against losses from secondary perils. In the
most extreme cases, spreads over the yield on Treasury bonds can be above
20 percentage points.

This uncomfortably large premium reflects differences in how easily

catastrophes can be modelled. No natural disaster is predictable, but some
are more unpredictable than others. For instance, a handful of hurricanes
typically arrive during a specific season. Forecasters can rely on more than
a century of meteorological data, and the technology to forecast the path
and size of storms has improved in recent years. By contrast, both insurers
and investors find the challenge of modelling wildfires and thunderstorms,
which arrive in the thousands and spread in an erratic manner, considerably
more difficult. Many regular buyers of catastrophe bonds now mostly stick
to the peak perils.

It is hard to fault bondholders for their reluctance to offer reasonably priced

protection against new and more unpredictable disasters. They do not owe
the world their money, and in a market that is already capricious, they
appear to be reaching a limit. As losses from disasters grow ever larger,
insurers and governments therefore face enormous losses with little to
protect them. In the absence of fresh financial innovation, it is likely to be
the taxpayer who ends up on the hook. ■

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Free exchange

“The Traitors”, a reality TV show,

offers a useful economics lesson
It is a finite, sequential, incomplete information game
1月 16, 2025 08:37 上午

CLAUDIA WINKLEMAN, a television presenter with a helmet of shiny

hair, is not a typical economics teacher. Yet students should consider her
game show. Those learning outside Britain may opt for any of the 20 or so
versions of “The Traitors” screened elsewhere, including a popular
American option that has featured celebrities such as Deontay Wilder, a
boxing great, and John Bercow, a disgraced British parliamentarian. The
game, which involves lying and betrayal, is a chance to study both the
theory and reality of game theory, as well as to watch the panic on the face
of someone who, having decided a fake Welsh accent would make them
more trustworthy, comes across a native Welsh speaker.

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In game-theoretic terms, the show is a finite, sequential, incomplete
information game, meaning it has an end, occurs in stages and players are
kept in the dark about some things. A few are nominated by producers as
“traitors”; the rest are “faithfuls”. The two groups live together. Each night
the traitors pick a faithful to “murder”, who is then removed from the game.
The next day the remaining players, both faithful and traitors, select a
player to “banish”. Upon their exit, the banished player reveals whether
they are a traitor or a faithful. The game continues for a set number of
nights through to a final in which the last players have the option to
repeatedly banish others until all remaining players declare themselves
confident no more traitors remain. The survivors either split the prize—or
hand it over to any undiscovered traitors.

It is a variant of a game known as “Mafia”, which was invented in 1986 by

Dimitry Davidoff, a psychology student at Moscow State University and
secondary-school teacher on the side. Mr Davidoff invented the game for
his pupils, hoping to demonstrate that an “informed minority” would
triumph over an “uninformed majority”. They rarely do. He also aimed to
show players would not only fail to identify the guilty but also confidently
accuse the innocent, which does happen. The game spread by word of
mouth until, in America, it was given gothic trappings of werewolves and
villagers, rather than mafiosi, and became a staple at events in Silicon
Valley. From a world-weary Soviet psychological experiment, it became a
nerdy Californian parlour game and then, owing to a Dutch production
company, mass tea-time entertainment.

For a faithful, it is a fool’s errand to try to spot a lying traitor. Game theory
identifies two types of communication: “cheap talk” and “signalling”.
Saying you are “100% faithful”, as many contestants do, is cheap talk. It is
costless and unverifiable: both a faithful and a traitor would make such a
statement. Cheap talk is helpful only in a “co-ordination game”, where all
players want the same outcome. Psychologists suggest the odds of telling
whether someone is lying are little better than chance. As the game is finite
—it is not repeated—there is no opportunity to learn any “tells”.

There is also no chance for the more valuable kind of communication

known as signalling. When signalling, a player takes a costly action in order

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to tell another player something. Some see a university education as an
example of this: it costs cleverer and more conscientious types less to get a
degree than stupider and lazier ones, allowing employers to distinguish
between the two.

With talk cheap, the only way to find a traitor is to study who is murdered
and banished. One way of solving such a game is known as the “perfect
Bayesian equilibrium”. Employing such an equilibrium, a player would
calculate probabilities based on information revealed by behaviour: the
chance of someone being a traitor depends on how likely a traitor would be
to have taken their actions. In every “subgame” of the larger game, such a
player would follow an optimal strategy based on these updating beliefs.

Rational self-interest would suggest both faithfuls and traitors should turn
on their allies in the final round: fewer to split the pot between. The very
last game should consist of just three players who must choose to vote off
one of their number (when the game gets down to two players no more
voting can take place). A rational traitor should want to ensure this final trio
consists of people who trust them. Yet that should lead any faithful to
conclude that they have been kept in the game because they trust a traitor
and have benefited from his or her protection. As a result, they should
betray this person. The perfect Bayesian equilibrium, according to those
who have studied Mafia, is voting randomly according to a pre-set public
rule. Ensuring the rule is known to all players means that traitors who
deviate and “just by chance” use their extra information to vote out only
faithfuls are identified as doing so.

I think that you think that I think that you think…

Fortunately for television producers, contestants are not perfectly rational.

Colin Camerer of the California Institute of Technology suggests that most
players in actual games demonstrate “bounded rationality”, believing their
strategy to be the most savvy, and responding to what they think less
sophisticated players are doing. A “level zero” player might vote for who
they think the traitor is; a “level one” might bluff; a “level two” might
double-bluff, pretending to be unsophisticated. In cases where the skill of
others is uncertain, cheap talk may sometimes be a useful strategy.

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Often the players simply protect those in their cliques and banish those
whose behaviour is different. Abhijit Banerjee, a Nobel-prizewinning
economist, developed a model of “rational herding”. Because behaviour
provides information, and someone’s own information about the world is
uncertain, it can be rational just to follow the crowd. Such decision-making
may produce a feedback loop: as more people coalesce around an opinion,
it becomes a better decision for everyone else to agree with it. For traitors
this suggests an appealing strategy. Do not try to lead the discussion about
who to banish, which might draw too much attention. Do enthusiastically
agree with someone else’s mistake. ■

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which brings together the best of our leaders, columns, guest essays and
reader correspondence.
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Science & technology

Volunteers with Down’s syndrome could help find
Alzheimer’s drugs
Down’s and Alzheimer’s :: Those with the syndrome have more of a protein implicated in
dementia

A better understanding of Huntington’s disease brings

hope
Dancing with death :: Previous research seems to have misinterpreted what is going on

Is obesity a disease?
Fat and health :: It wasn’t. But it is now

Should you start lifting weights?

Well informed :: You’ll stay healthier for longer if you’re strong

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Down’s and Alzheimer’s

Volunteers with Down’s syndrome

could help find Alzheimer’s drugs
Those with the syndrome have more of a protein implicated in dementia
1月 16, 2025 08:37 上午

DEMENTIA LOOKS likely to dominate old age in the 21st century. A

study in this week’s Nature Medicine reckons the number of Americans
developing it each year will rise from 500,000 in 2020 to 1m in 2060. And
though drugs that have some effect on Alzheimer’s disease, dementia’s
most common manifestation, have recently been assessed in America and
Britain, not everyone is convinced.

The European Union’s drugs regulator, for example, refused last summer to
approve the first of them to come across its desk, though it has partially
reversed that decision. And in England, despite regulatory approval, the

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National Health Service does not yet offer them. Many researchers suspect
they might work better if given earlier, perhaps even preventively. The
easiest way to find out, they say, is to conduct clinical trials on people for
whom the onset of Alzheimer’s is nearly guaranteed: those with Down’s
syndrome.

As the life expectancy of people with Down’s has risen, it has become clear
that most will eventually develop Alzheimer’s. Studies suggest 70-88% will
do so by the age of 65. In the general population the comparable figure is 8-
10%. Until now, though, trials of Alzheimer’s drugs have excluded those
with Down’s, meaning doctors feel they cannot safely prescribe them to
those individuals. Including people with Down’s in future trials could not
only offer them treatment, it might also herald a future of Alzheimer’s
prevention for all.

The link between the conditions is a genetic hiccup. Those with Down’s
have an extra copy of chromosome 21 in their cells. This brings with it an
extra copy of the gene encoding amyloid precursor protein (APP), a
molecule involved in the growth and development of neurons.
Unfortunately, APP is also—as its name suggests—the precursor in certain
circumstances of a smaller protein, beta-amyloid, that forms clumps called
plaques in the brains of those with Alzheimer’s. The extra gene copy means
people with Down’s have higher levels of APP and, therefore, more beta-
amyloid. As a consequence, virtually all those with Down’s have beta-
amyloid brain plaques by the time they are 40. About 15 years later, most
have dementia.

A cascade of problems

Though Alzheimer’s in those without Down’s rarely has a clear genetic

cause, the connection (which emerged in the 1980s) between APP, beta-
amyloid and dementia suggests an underlying mechanism. In 1991 John
Hardy, a neuroscientist now at University College, London, and his late
colleague David Allsop (then at Queen’s University, Belfast) thus proposed
the amyloid cascade hypothesis. This posited a build-up of beta-amyloid in
the brain to be the driving force behind Alzheimer’s in all those affected by
it, whether they have Down’s or not. Other signs of Alzheimer’s, such as

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brain shrinkage and tangles of a second abnormal protein called tau, are
thought to come later.

The amyloid cascade hypothesis remains the most influential explanation

for how Alzheimer’s develops. A search is thus now on for drugs that get rid
of beta-amyloid. Trial after trial has failed. But two substances have been
found to do the job. These are artificial antibodies called lecanemab and
donanemab that bind specifically to beta-amyloid, flagging it for disposal.
However, though both drugs slow cognitive decline, they do not do so by
much. After 18 months, dementia scores for people receiving lecanemab
had deteriorated 27% less than those receiving a placebo. For donanemab, it
was 35%. Ideally the drugs would stop decline completely—or even reverse
it. Given that 20% of people receiving lecanemab and 24% of those
receiving donanemab develop small (though mostly harmless) brain
swellings and brain bleeds, scepticism that the new drugs are worth it is
understandable.

Critics of the amyloid cascade hypothesis reckon the antibodies’ lacklustre

performance is because beta-amyloid is the wrong target. They think tau, or
even APP itself, could be more important. Others, who still support the
Hardy-Allsop explanation, suspect the two drugs might work better if given
earlier in life. They suggest that by the time most patients take them, the
illness is too far gone to be stopped by amyloid removal alone. If that is
true, anti-amyloid drugs might be better suited to prevention than treatment.

An obvious way to test this would be to run clinical trials on a cohort for
whom eventual Alzheimer’s is a near certainty, but before symptoms set in
—in other words, those with Down’s syndrome. Obvious, but radical.
Companies are wary of including those with confounding conditions in
their trials, for fear of affecting their results. And obtaining truly informed
consent requires extra effort, to make risks understandable to them and their
families.

That is starting to change. ALADDIN, a trial of donanemab for those with

Down’s, organised by researchers at the University of Southern California,
will start later this year. And an existing trial, ABATE, which is testing a
different anti-amyloid immunotherapy in America, Britain and Spain,

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already includes them. This turnaround owes much to lobbying by people
with Down’s and their families.

One notable moment was a speech to an American Congressional hearing in

2017 by Frank Stephens, a board member of the Global Down Syndrome
Foundation who, himself, has Down’s. In the three years following this
speech, which received a standing ovation from the assembled
Congressfolk, annual funds disbursed by the National Institutes of Health
for research on Down’s rose from $35m to $111m. By 2023 the figure had
risen to $133m. Mr Stephens says it changed scientists’ attitudes towards
studying the syndrome.

These trials will require care to ensure any risks associated with high beta-
amyloid in the brains of people with Down’s are taken into account. Last
year a post-mortem study of brain tissue from 15 people with the condition
found lecanemab bound to amyloid stuck in the walls of blood vessels in all
analysed tissue. That binding is thought responsible for the brain swelling
and bleeding seen in the general-population trials. People with Down’s may
thus be at higher risk of those side-effects and might need lower dosages.

Yet if the drugs prove safe and effective when administered before the onset
of symptoms—or even before amyloid build-up—it could offer people with
Down’s the hope of several extra years, maybe even a whole life, without
Alzheimer’s. For others, in whom the onset of Alzheimer’s is harder to
predict, researchers would still need to improve early diagnosis to reap the
benefits fully. Work published in 2024, in Nature Aging, in which blood
proteins were used to help predict Alzheimer’s ten years before
conventional diagnoses could be made, suggests that may soon be possible.
Moreover, the drugs’ performance will reveal whether the prevailing
understanding of Alzheimer’s is correct. Thirty years on from the amyloid
cascade hypothesis, such a test is well overdue. ■

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Dancing with death

A better understanding of
Huntington’s disease brings hope
Previous research seems to have misinterpreted what is going on
1月 16, 2025 08:00 上午 | Cambridge, Massachusetts

HUNTINGTON’S DISEASE is horrible. It is also odd. Illnesses caused by

inherited aberrant genes are mostly what geneticists call “recessive”,
meaning someone must receive defective versions of the gene involved
from both mother and father. Huntington’s, the symptoms of which start
with involuntary jerking, mood swings and memory problems, and end with
death, is “dominant”—meaning only one parent need be a carrier to pass it
on.

Since a dominant gene’s ill effects cannot be covered up by a functional

version from an unaffected parent, the faulty DNA is generally purged by

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natural selection. This explains why dominant diseases are unusual. But
Huntington’s second, self-preserving, oddity is that unlike most genetic
disorders it rarely manifests until well into adulthood, giving plenty of time
for it to be passed on. The result is families where half the members are
living under premature death sentences.

So far, attempts to develop drugs to commute those sentences have failed.

But that may change. Steve McCarroll of Harvard University reckons one
reason for this failure is that the accepted explanation of how Huntington’s
plays out at a molecular level is incorrect. That may have led drug
companies up a blind alley. As they outline in Cell this week, he and his
colleagues have a better explanation—one that could potentially alter the
direction of pharmaceutical research.

Only with DNA sequencing did what is happening in Huntington’s start to

be understood. People affected are victims of a particularly long
chromosomal “stutter”, in which three letters of the genetic code (CAG) are
repeated over and over again (CAGCAGCAGCAG). The repeated DNA is
in the gene which encodes a protein dubbed huntingtin, which is produced
in brain cells.

For those born with fewer than 36 of these repeats, the stutter does not
matter. They are disease-free. Those with 36-39, however, may develop
symptoms. And those with 40 or more definitely will. Moreover, the more
numerous the repeats, the earlier the symptoms present themselves and the
younger the person dies.

Given these facts, the generally accepted explanation has been that
huntingtin proteins with too many of the extra amino-acid units encoded by
the stuttering section are toxic—and the longer the stutter, the more toxic
they are. Dr McCarroll begs to differ. He and his colleagues have
discovered that for a huntingtin protein molecule to be toxic the underlying
gene requires not 36 or more repeats, but 150 or more. Three dozen, he
thinks, is the threshold not for toxicity but rather for an instability that
causes the number of triplets in the expansion to increase slowly throughout
a person’s life.

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That such expansion happens was noticed in the 1990s, but not widely
thought important. Subsequent work showed, however, that patients with
mutations in their DNA-repair genes often showed unusually early or late
onset of disease. These same DNA-repair genes were also shown to affect
the stability of the repeats. This suggested repeat-expansion during a
patient’s lifetime might be important.

To investigate, the team developed a way to study the matter cell-by-cell in

post-mortem brain samples. Using this, they examined almost 600,000 cells
(or, strictly speaking, the nuclei of these cells) from brains donated by 50
people who had had Huntington’s and 53 others who had not. They also did
a deeper dive into the affected parts of the brains of six further
Huntington’s-affected donors.

By looking at molecules called messenger RNAs, which carry instructions

transcribed from the DNA of genes to a cell’s protein-making machinery,
they could tell which genes had been active in each of the cell nuclei they
examined. Also, specifically, the transcript of the huntingtin gene told them
how long the huntingtin triplet repeat was in that nucleus’s DNA.

Toxic shock

The team’s analysis showed two things. First, though all sorts of brain cells
express huntingtin, of those they were scrutinising only a type called striatal
projection neurons (SPNs) manifested profound expansion of the triplet
repeat—and it is these cells, not the others, that die in Huntington’s patients.
Second, even SPNs have normal gene-expression profiles until their
number of repeats exceeds 150, a process that takes decades and is variable
from cell to cell. Then all hell breaks loose, as hundreds of other genes
suddenly start behaving abnormally. That is more than enough to kill the
cell in question.

Putting all this together, Dr McCarroll reckons the lack of early symptoms
reflects the fact that few cells in younger patients have yet crossed the 150-
repeat threshold. The earlier onset of symptoms in those born with more
repeats, meanwhile, is because their longer expansions need less time to
reach the threshold.

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Current attempts to develop treatments for Huntington’s are based on the
premise that all mutant huntingtin is toxic, and that its suppression with
drugs will, therefore, prevent or ameliorate symptoms. Dr McCarroll’s work
suggests this sledgehammer approach will actually crack very few nuts, for
only a small fraction of cells contain toxic huntingtin at any given moment,
and they have it only briefly before it kills them.

A better way would be to stop the stuttering from reaching the critical
threshold of 150. Since other studies confirm the suspicion that a cell’s
DNA-repair mechanism is involved here—specifically, by making mistakes
when inspecting the expanded section for potential mutations—a drug that
fixed this, Dr McCarroll reckons, might be more likely to help than
reducing production of huntingtin.

What would really be useful, though, is an explanation of why some cell

types are susceptible to triplet-repeat expansion and others are not. Trying
to determine that is Dr McCarroll’s next project. ■

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Fat and health

Is obesity a disease?
It wasn’t. But it is now
1月 16, 2025 07:18 上午

FOR YEARS there has been a push to recognise obesity as a disease in its
own right, and therefore something that needs to be treated in and of itself,
rather than just as a risk factor for other things, such as diabetes, heart
disease, strokes and some cancers. And there is indeed much evidence that
being obese can result in exceptionally poor health. But many who are
obese are not unwell in the slightest. This argues that obesity per se should
not be treated as an illness.

Until two years ago, such discussion was of little practical relevance since
there were few treatments for obesity between the extremes of bariatric
surgery and the old-fashioned approach of eating less and exercising more.
However, the arrival in 2023 of GLP-1 weight-loss drugs in the form of

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semaglutide (known commercially as Wegovy) changed that. If these drugs
are to be prescribed sensibly and fairly, then who among the fat is sick and
who is not becomes an important question.

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Social Media Pakistan 0342-4938217
By coincidence (they started before GLP-1 drugs were approved for
slimming), a group of 56 doctors have just answered that question. This
group, called the Lancet Commission, and organised by the journal of that
name, have developed a better way of diagnosing obesity—one that
distinguishes when it has become pathological.

The usual current measure of obesity is body mass index (BMI). This has
the advantage of being easily calculated (by dividing a person’s weight by
the square of their height). Obesity is then defined as a BMI of more than
30. But some people with a high BMI show no signs of being unwell. And,
absurdly, stocky and well-muscled athletes have been known to qualify as
obese according to this classification. Nor does BMI take account of fat’s
bodily distribution. Yet it is well established that visceral fat (stored around
the internal organs, for an “apple-shaped” body), is far more unhealthy than
subcutaneous fat (stored directly under the skin, for a “pear-shaped” one).
The commission’s recommendations, though, take care of these points.

To diagnose their newly defined disease, which they call “clinical obesity”,
the commissioners require two things. First, the addition of a third measure
of body size (waist circumference, waist-to-hip ratio or waist-to-height
ratio) to those used to calculate BMI—though measuring body fat directly,
with sophisticated modern scanning tools is even better. Second, if this
revised measurement does, indeed, proclaim an individual to be obese,
some objective signs and symptoms of reduced organ function, or ability to
conduct daily activities—such as bathing, eating and dressing—are also
needed to declare that obesity to be clinically relevant.

The 18 diagnostics the commissioners have lit on include breathlessness,

obesity-induced heart failure, knee or hip pain, and obesity-driven signs of
dysfunction in many other organs, such as the liver, heart, kidneys and
urinary and reproductive systems. Those without these symptoms are not let
off scot-free. They are assigned to a limbo called “preclinical obesity”
since, though not ill, they are reckoned to have an increased risk of
developing clinical obesity and thus becoming so. But they are not
candidates for immediate drug treatment.

Francesco Rubino, a professor in metabolic and bariatric surgery at King’s

College, London, who is also one of the commissioners, reckons describing

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obesity as an actual disease is quite a radical shift. The next task—one
which others have already started, he says—is to work out who among the
1bn or so people on the planet who were classified as obese according to
the old definition qualify as being clinically obese under the new one, and
thus in need of treatment. Preliminary work, he says, suggests 20-40% of
them.

The commission’s approach already seems popular with medical

officialdom. Seventy-six of the world’s leading health organisations,
including the American Heart Association, the Chinese Diabetes Society
and the All Indian Association for Advancing Research in Obesity, have
already endorsed it. How quickly it will percolate into medical practice and
public perceptions of who is and is not dangerously obese is another matter.
■

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Well informed

Should you start lifting weights?

You’ll stay healthier for longer if you’re strong
1月 16, 2025 07:18 上午

BARBELLS; CHALK; the clang of iron plates. Strength training is having

a moment. Planet Fitness, one of America’s biggest gym chains, is cutting
back on treadmills in favour of power cages and kettlebells. Even Peloton, a
purveyor of expensive exercise bikes to the aspirational classes, is picking
up the dumbbells—it now has an app aimed at strength training, rather than
the cardio workouts on which it built its brand.

Gym fads come and go. But the rise of pumping iron will be welcomed by
doctors and public-health types, who have for years been trying to persuade
the public that though it is good to be fit, it is even better to be fit and
strong. In 2010 the World Health Organisation added a recommendation of
two sessions of muscle-strengthening exercise a week to its exercise

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guidelines. Many governments have followed suit (Japan, for example,
updated its advice in 2024).

Until recently, few heeded this advice. A study published in 2020 estimated
that around half of Western adults reported meeting weekly guidelines for
cardiovascular exercise such as jogging or cycling, but only between 10%
and 30%, depending on the country, claimed to meet the minimum for
strength work. But things are clearly changing.

There is no doubt cardio is good for you—it lowers blood pressure, cuts the
risk of heart disease, strokes and some kinds of cancer, and may even help
treat depression. Fit people live up to seven years longer than couch
potatoes. Being strong offers many of the same benefits.

In the same way that bones are more than just scaffolding for the body (they
also produce blood cells, for instance), muscle does more than merely move
limbs. Strengthen exercise helps to regulate metabolism, insulin sensitivity
and cholesterol levels. Though the evidence is less robust here than for
cardio, a review published in 2022 concluded that regular strength training
seems to reduce the risk of heart diseases, diabetes and cancer.

Much of the medical interest in strength exercise, however, comes from its
ability to prevent, or treat, sarcopenia. This is the decline in strength and
muscle size that accompanies ageing, and which doctors increasingly think
should be classified as a disorder in its own right. The body’s muscles
naturally begin to shrink in one’s 30s and that loss is disproportionately
from the powerful, fast-acting “type 2” fibres which are responsible for
explosive strength.

That process gathers pace in a person’s 60s and 70s. The result can be frail
and unsteady individuals struggling with what doctors call “activities of
daily living”, such as getting out of a chair or going out independently. Lack
of muscle increases the risk of falls, a big killer of the elderly. It makes it
harder to recover from injuries and illness. And it can worsen the prognosis
of cachexia, the rapid wasting which often accompanies diseases such as
cancer or heart failure.

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With most of the world ageing rapidly, sarcopenia is going to become only
a bigger problem. It could even be aggravated by the popularity of GLP-1
drugs like Wegovy. Some of the weight lost by people taking these drugs
seems to result from shedding muscle rather than fat, which is not so
healthy.

Some degree of decrepitude is inevitable with age. But the evidence

suggests that, even for people in their 80s, a bit of pumping iron can work
wonders. As so often in medicine, it is better to stop a disease taking hold in
the first place than to try to cure it afterwards. The squat rack beckons. ■

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Culture
Greg Gutfeld, America’s most popular late-night host,
rules the airwaves
Who gets the last laugh? :: The left gave him his perch

Want to spend time with a different American president?

The Economist Reads :: These are five presidential biographies, which will distract you from
today’s news

Los Angeles has lost some of its trailblazing architecture

Cinder blocks :: How will it rebuild?

What firms are for

Many happy returns? :: The framework for thinking about business and capitalism is
hopelessly outdated, argues a new book

Astrology is booming, thanks to technology and younger

enthusiasts
Star power :: Gen Z is full of stargazing users

Why matcha, made from green tea, is the drink of the

moment
World in a dish :: Is it really a healthy alternative to coffee? Not the way Gen Z orders it

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Who gets the last laugh?

Greg Gutfeld, America’s most

popular late-night host, rules the
airwaves
The left gave him his perch
1月 16, 2025 07:18 上午 | NEW YORK

RECENTLY GREG GUTFELD, who hosts America’s most popular late-

night show, on Fox News, became a father for the first time at the age of 60.
Like all comics, he mined his experience for material. During his first show
back, he took aim at his favourite targets, including liberals (“It amazes me
more that some moms can be so pro-abortion…because these moms know
that having kids is the best thing they’re ever going to do. Aside from
ironing”) and transgender people (“Any man who thinks putting on a dress
and a wig makes you a woman: no way! I was there when that baby popped

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out, and no dude can do that. You might as well put on a diaper and claim
you’re a baby”).

This formula—jokes guaranteed to offend politically correct lefties,

delivered with a knowing smile to camera—has made Mr Gutfeld
America’s most-watched late-night television host. Last year around 2.5m
people tuned into his show each night, on average; the runner-up, Stephen
Colbert on CBS, claimed 23% fewer viewers. Declaring him “the king of
late night” (as he has called himself in the title of one of his 11 books) does
not come without caveats: “Gutfeld!” airs at 10pm, when more people are
awake, while other networks’ comedy shows air later, between 11.30pm and
1am. He is also the only right-wing host in a left-leaning field, so liberal
viewers split among several shows; Mr Gutfeld has the conservative
audience to himself.

But his success embodies a dramatic shift: today right-leaning comedians

sit atop American political culture. The country’s most popular podcaster,
Joe Rogan, is a stand-up comic and owns a comedy club in Austin; like Mr
Gutfeld, he is a libertarian who supports Donald Trump and mocks liberal
piety. In the run-up to the election, Mr Trump declined an invitation from
“60 Minutes”, a network-news stalwart, but appeared on several
conservative podcasts, including Mr Rogan’s, as well as Mr Gutfeld’s show.
Tom Shillue, a writer and guest on “Gutfeld!”, says that he and like-minded
comedians “are selling out clubs that we’ve never sold out before”.

Conservative comedians are not new—in the early 2000s the Blue Collar
Comedy Tour featured conservative white Southern men—but they were
niche. Soon after Mr Trump’s first inauguration in 2017, Tim Allen, a
sitcom star, hyperbolically likened being conservative in the entertainment
world to living in Germany in the 1930s, because it forced conformity.
Nicht mehr.

Mr Gutfeld is small and elfin, with arched eyebrows and the slightly leering
grin of someone who has just got away with something. Asked to name the
people who made him laugh when he was young, he says, “That’s easy,”
and lists a dozen examples, including Monty Python (a British comedy
troupe) and comics Jonathan Winters and Steven Wright, whose influences
are all apparent in his work. Before joining Fox in 2007, he worked for

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magazines, including Men’s Health and Maxim. Now he also co-hosts “The
Five”, a panel discussion that is Fox News’s highest-rated show.

To a first-time viewer, the popularity of “Gutfeld!” might seem as jarring as

some of the jokes. The studio and set are small and simple. Unlike other
late-night programmes, there is no house band. Stars do not come on to flog
their new films. Instead, after a monologue—which Mr Gutfeld delivers
seated, often dressed in an open-collar shirt rather than a suit and tie—he
and panellists riff on the news and intersperse pre-recorded skits that are
sometimes filmed on iPhones.

Though it skewers targets on the left, the show is not a doctrinaire

endorsement of Republicanism. Mr Gutfeld says he finds politics
“disgusting” and “fake” and calls himself “a libertarian who questions his
libertarianism” and just wants to create “an absurd universe” on his show.

In the same way that Mr Trump’s bluster attracts those who find
mainstream politicians phoney, the unpolished aesthetic and taunting banter
of Mr Gutfeld’s show has a part-of-the-club appeal. From other late-night
hosts, Mr Gutfeld argues, “You get the sense that they think they’re better
than you are…They’re wealthier, they’re smarter, they have better-looking
friends and bigger homes…On my show, you’re basically hanging out with
your buddies…Viewers feel like they know us.”

They also feel catered to, after years of being overlooked. Joe DeVito, a
comedian and guest on “Gutfeld!”, says that “People come up to me to tell
me how…they’re so grateful that someone in the media is listening to them,
and not telling them they’re racist idiots all the time.”

There is a widely held view that comedy has an inherent left-wing bias, and
in their book “Late Night in Washington”, three academics, Stephen
Farnsworth, S. Robert Lichter and Farah Latif, found that it did—at least
after dark on TV. In the first third of 2021, late-night hosts (Mr Colbert,
Jimmy Fallon, Jimmy Kimmel and Trevor Noah) told nearly four times as
many jokes about Mr Trump as Joe Biden, despite the latter being president.
Of the 20 most popular political joke targets, the only Democrats other than
Mr Biden were Andrew Cuomo, who resigned as New York’s governor

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following allegations of sexual harassment, and Joe Manchin, a
conservative Democrat from West Virginia.

As for left-wing comedic bias more generally, Nick Marx, an academic who
co-wrote “That’s Not Funny”, a book about right-wing comedy, argues that
it does not exist. “Comedy is an empty vessel, used by any ideology to
create in- and out-groups: a group that gets a joke and another group
targeted by it,” he says. Some may think that Mr Gutfeld and his ilk are
punching down by joking about women and trans people. But fans of his
would argue that he is, in fact, punching up against cultural elites. In this
view, the true target of a joke about trans or homeless people is not just the
ones joked about, but scolds who try to set rules for permissible humour.

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Lefties may grumble into their organic oat-milk matcha lattes about Mr
Gutfeld’s popularity, but they bear some responsibility for his rise, and not
just because of their censoriousness. The animating spirit of satire, after all,

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is not left- or right-wing politics, but anti-institutionalism: the desire to
throw rocks at the establishment and stick it to the man. And in the
Trumpist era, Democrats have become reflexive defenders of cultural and
political institutions. Whatever the merits of their support for, say, the
independence of the Justice Department’s law-enforcement efforts, it is bad
for comedy. Mocking rule-enforcers is funnier and more fun than
conformity.

Will the show have to change when Mr Trump reassumes office on January
20th, and Republicans are no longer the underdogs? That night “Gutfeld!”
will ring in the new era with a live show from Washington, DC. Asked
whether Republican ascendancy may make his job harder, Mr Gutfeld
claims he is not concerned: “There will be enough clowns [and] enough
weirdness that I foresee no end in sight in terms of content…and when
whatever side in media or entertainment refuses to go after certain sacred
cows, I’ll be there to throw that cow right on the grill.” Viewers are likely to
stay hungry for whatever he serves up. ■

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The Economist Reads

Want to spend time with a different

American president?
These are five presidential biographies, which will distract you from today’s
news
1月 16, 2025 09:30 上午

WHATEVER YOU think of Donald Trump, his inauguration on January

20th is the capstone of the greatest ever comeback in American politics.
Whether you seek succour in history or are ready to escape the news cycle,
books can help. All 45 presidents have been the subject of at least two
biographies, but these are five of the best.

The Bridge.
By David Remnick.

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Inconveniently for biographers, Barack Obama is a gifted writer—second
among presidents, perhaps, to Ulysses Grant. He told his own story in
“Dreams from My Father” (1995). Still, “The Bridge”, by the New Yorker’s
editor, chronicles Mr Obama’s rise. Most entertaining is his account of
Chicago’s South Side, where Mr Obama began his electoral career. This is
not a comprehensive account of Mr Obama’s legacy—it ends shortly after
his first term began—but it is a colourful portrait of a man who met his
country’s moment.

John Adams.
By David McCullough.

Americans’ reverence for the Founding Fathers can obscure their flaws.
David McCullough’s John Adams is brave yet filled with self-doubt,
exacting yet fussy. (He and Benjamin Franklin, forced to share a room
while travelling, argue over whether the window should be open or closed
at night.) The magic of this book is that this ordinary, pudgy man is waging
an epic battle for his country’s independence. Often overlooked, Adams, Mr
McCullough argues, was central to America’s birth: he pushed relentlessly
for independence, served dutifully as vice-president and negotiated
shrewdly with European powers.

Reagan.
By Max Boot.

Ronald Reagan was a paradox: an affable communicator who won voters’

and staffers’ affection, but who was emotionally distant from everyone
except his wife. That remoteness has frustrated biographers: Edmund
Morris, who won a Pulitzer prize for his book on Theodore Roosevelt,
found Reagan “inscrutable” despite years of conversations; he ended up
writing a semi-fictionalised “memoir” of Reagan instead. Max Boot, a
historian who advised Republican presidential candidates but broke with his
party over Mr Trump, has triumphed over predecessors. He marshals a huge
amount of research to provide a full account of Reagan’s life, from his
boyhood in Illinois to his decline into Alzheimer’s.

Team of Rivals.
By Doris Kearns Goodwin.

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Steven Spielberg used this as the basis of his film “Lincoln” for good
reason: Doris Kearns Goodwin is a dogged researcher and vivid writer. Her
Abraham Lincoln is as Daniel Day-Lewis portrayed him: determined and
humane. Like his rivals for the Republican presidential nomination in 1860,
Lincoln opposed slavery, but was less radical than some. Being relatively
unknown was an advantage, as was coming from what was then the Wild
West of Kentucky and Illinois. It is a testament to Ms Kearns Goodwin’s
narrative genius that, despite every event being known, her book has a
propulsive sense of suspense: it is a genuine page-turner.

The Years of Lyndon Johnson: Master of the Senate.

By Robert Caro.

The third volume of Robert Caro’s masterful series spans Lyndon Johnson’s
arrival in the Senate in 1949 to his ascent to the vice-presidency. Johnson
began his political career as a consistent opponent of civil rights, like the
rest of his colleagues from the former Confederacy, but almost single-
handedly pushed through the Civil Rights Act of 1957, now largely
forgotten in the wake of President Johnson’s more ambitious legislation in
the 1960s. This is as much a biography of the Senate as of Johnson’s time in
it; readers will come away with a much deeper understanding of how the
legislature, and political power, function. ■

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Cinder blocks

Los Angeles has lost some of its

trailblazing architecture
How will it rebuild?
1月 16, 2025 08:37 上午 | LOS ANGELES

One of the survivors

LUISA FABBRI looked like an apparition as she walked down a deserted

tree-lined avenue in Altadena, the blackened remains of buildings on either
side of her, power lines on the pavement and smoke in the air. She carried a
pillow in one hand and a satchel of tax documents in the other. She had
evaded a National Guard cordon to retrieve them.

Her house miraculously survived the devastation wreaked by fires in

Altadena, 14 miles north-east of downtown Los Angeles. But she mourned
anyway. Her home is part of one of the first Modernist housing

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developments in America, built for working-class residents by Gregory Ain,
an architect, in the 1940s. Now all but a few of the 28 houses have burned
to the ground.

Fires in Altadena and Pacific Palisades have damaged or destroyed more

than 12,000 buildings, many of them homes. That includes oceanfront
residences of film stars between Pacific Palisades and Malibu. But the blaze
has also engulfed Modernist gems, some built in the mid-20th century,
when a group of architects designed small, affordable houses made of easy-
to-assemble materials, with open-floor plans and large windows that drew
the faintest line between indoors and outdoors. At the time Los Angeles had
few building regulations, so the city was a playground for experimentation.
The ethos spread across America.

The most famous of these, the Case Study Houses, designed by architects
including Charles and Ray Eames and Richard Neutra, appear to have
survived the infernos, says Adrian Scott Fine of Los Angeles Conservancy,
a heritage organisation. Ain’s Park Planned Homes were not so lucky. Nor
were later (more upmarket) Modernist icons, such as Ray Kappe’s Keeler
House, completed in 1991. Particularly heartbreaking, says Mr Scott Fine,
was the loss of the ranch house designed in the 1920s for Will Rogers, an
actor, in the state park that bears his name.

Ain was a social activist. He was inspired by Californian “starchitects” such

as Rudolph Schindler and Neutra, both of whom had worked for Frank
Lloyd Wright. He lost commissions in the McCarthy era (including for the
Case Study House programme), but his social conscience defined his work.
The original owners of some of his homes in Altadena were black
Americans; Ms Fabbri bought her house from Martin Luther King’s lawyer.
The development was built like a park, with lush landscaping, interior
courtyards and side-facing garages. It remained a multiracial, free-spirited
place.

Architects today still sympathise with the social concerns of their time.
Amid a homelessness crisis, LA needs more low-cost housing. But it may
not be feasible, nor desirable, to replicate the style of lost buildings.
Construction codes have changed; costs will be prohibitive; and the risk of
natural disasters is rising. “What is the point of having a simulacrum when

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it doesn’t meet the requirements of how we live today?” says Sarah
Lorenzen, professor of architecture at Cal Poly Pomona.

For her part, Ms Fabbri, an Italian, hopes that her neighbourhood will rise
from the ashes, however the next iteration of homes looks. “I’m a dreamer,”
she says. “That’s why I live in America, I guess.” ■

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Many happy returns?

What firms are for

The framework for thinking about business and capitalism is hopelessly
outdated, argues a new book
1月 16, 2025 07:51 上午

WHO OWNS a company? The usual answer is that shareholders do. Yet
they do not own it in the same way they might own, say, an umbrella. The
umbrella’s owner has acquired some rights: to possess it, use it and receive
any income from renting it out, for instance.

Buy shares in Amazon, and you have indeed purchased all these rights over
the shares. But even if you clubbed together with most of the other
shareholders, you would not be able to commandeer a data centre or
demand your online shopping free. You may own the shares, but you do not
own the company. You are entitled to a dividend if its executives declare
one; you are not entitled to any cash they get from selling a warehouse.

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A new book by John Kay, one of Britain’s leading economists, is packed
with examples like this. His argument is that many of the ways people talk
and think about business have little to do with how today’s most important
firms actually work but instead describe the capitalism of centuries gone by.
Back then, those rich enough to buy factories and machinery called the
shots for the companies that needed them. This “tripartite linkage” between
personal wealth, ownership of the means of production and control of
business “was a defining characteristic of the Industrial Revolution”, Mr
Kay writes.

The capitalist owner of a cotton mill used to hold the whip hand over its
manager because, without the flying shuttles and spinning jennies, no
manager could produce cotton. Now things are different. Today’s most
important means of production are no longer the mechanical equipment
needed to make things. Apple is not one of the world’s most valuable
companies because it runs stellar production lines. Rather, its value comes
from intangible factors, such as its employees’ knack for design, which
allow it to produce things others cannot. People have superseded land and
machinery as companies’ most productive assets, in other words.

The transformation of the most valuable means of production, argues Mr

Kay, is just one reason that shareholders are no longer in charge. A related
one is that many of the physical things businesses do need, from offices to
IT equipment, are fungible and can be rented from providers of “capital as a
service” (such as WeWork for offices, Prologis for warehouses and Foxconn
for the machines that assemble iPhones).

Corporate law, meanwhile, has evolved to favour executives over

shareholders. Not only do shareholders lack the right to manage a company,
but some also struggle to appoint managers of their choosing. The American
state of Delaware, wishing to attract big companies, has laws that make it
hard for investors to stage hostile takeovers, pack boards with allies or
propose their own directors. It has worked: two-thirds of the Fortune 500
list of the world’s largest firms are now incorporated there.

As well as analysing this shift in the balance of corporate power, the book
offers a lively discussion of what companies are, and what they are for.
Texts about purpose in business are all too often waffly and worthy; Mr

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Kay’s is admirably clear. A successful firm is not, he says, the mere “nexus
of contracts” described by academics from the 1970s onwards; treating
those relationships in purely transactional terms undermines the place of
business in society, by making them too short-termist and focused on
immediate profits.

If there is one topic on which the author moralises, it is the doctrine that
executives should seek to maximise shareholder value. Its proponents have
“often ended up destroying not only shareholder value but also the very
businesses that their abler and better-motivated predecessors had created,”
he writes. What follows is a litany of iconic firms that were run into the
ground by managers in pursuit of short-term profits, from Imperial
Chemical Industries (a 20th-century pharmaceuticals giant that discovered
beta-blockers) to Sears, Roebuck (a once-mighty American retailer). The
core of Mr Kay’s argument is that it is so difficult to decide what will
ultimately create or destroy value that executives are better off simply
focusing on building “great businesses”.

So what is a company for, if not maximising shareholder value? The

author’s answer is “the flourishing of the multiple stakeholders of the
corporation: employees, investors, suppliers and customers, the
communities in which it operates and the corporation itself”. It would be
miserly to contradict such a utopian, if vague, ideal. It is hard, though, to
imagine that today’s tech giants—whose businesses Mr Kay clearly admires
—were built with the flourishing of the communities in which they operate
as a primary aim. (Just ask anyone who lives in Silicon Valley.) In fact, all
these firms were founded at a time when the idea of maximising
shareholder value reigned supreme. They seem to have managed it rather
well. ■

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Star power

Astrology is booming, thanks to

technology and younger enthusiasts
Gen Z is full of stargazing users
1月 16, 2025 07:18 上午 | Singapore

TRANSITING PLUTO Semisextile Natal Uranus in Capricorn. That was

the response Co-Star, an astrology app, gave when your correspondent
asked if he should work harder. It meant, in plain(er) English, that the
position of Pluto vis-à-vis Uranus could spark creativity, reduce the need to
“conform to traditional work expectations” and unleash a “natural sense of
individuality, rebellion”. Citing the movement of planets for missing a
deadline, however, would not please your correspondent’s editor.
Horoscopes, be damned.

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More users globally are turning to astrology for advice. Co-Star, an
American firm, is reported to have more than 30m users, whom it charges
for queries ($2.99 gets you five questions). AstroTalk, an Indian firm,
connects more than 40,000 astrologers to 80m customers
remotely. Spending on astrology-related products and services is projected
to grow to $22.8bn by 2031, up from $12.8bn in 2021, reckons Allied
Market Research, a consulting firm.

Some 70% of Americans either “somewhat” or “strongly” believe in

astrology, according to a survey by the Harris Poll, a research firm, in
2024. One reason for this attraction is the decline of organised religion,
which has sparked a search for meaning in other places, from gyms to
politics. Another commonly cited explanation is the stress of modern life:
61% of Americans say that astrology provides comfort in uncertain times.
Interest surged during the covid-19 pandemic. On Google global searches
for the term “astrology” hit a ten-year high in December 2020.

Youngsters, in particular, are captivated by it. More than 60% of users of

InstaAstro, an Indian service that connects astrologers with clients, are Gen
Z. Many use the platform to seek relationship advice. In China, young
people are drawn to Cece, another app, for similar reasons.

Developments in technology tend to weaken pseudoscience, but in

astrology’s case they have expanded its reach. In the early 20th century
astrology spread through horoscope columns in newspapers; the internet
and smartphones expanded interest to new stargazing users.

AI is now making access to prophecies even easier. Whereas once clients

needed to see an astrologer in person to discover their prospects in love and
life, today they can simply input the details of the time and place of their
birth on digital services, such as KundliGPT. The firm generates responses
using a large-language model that has been trained on relevant data,
including planetary positions and astrological material sourced from
websites and forums. Co-Star uses AI tools to combine data from space
(sourced from NASA) with insights from human astrologers to give
personalised responses to users.

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AI and astrology may seem strange bedfellows, but there is a millennia-old
connection. In “A Scheme of Heaven”, a history of astrology, Alexander
Boxer, a data scientist, argues that the ancient study of stars was the world’s
first “grand data-analysis enterprise”. The methods employed to compile
datasets of planetary movements, used to produce horoscopes, have
influenced the big-data and machine-learning tools that generate today’s AI-
fuelled astrological predictions. It may be the ultimate cosmic cycle. ■

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controversies, sign up to Plot Twist, our weekly subscriber-only newsletter
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technology-and-younger-enthusiasts

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World in a dish

Why matcha, made from green tea,

is the drink of the moment
Is it really a healthy alternative to coffee? Not the way Gen Z orders it
1月 16, 2025 07:18 上午

IT WAS A freezing winter’s day in London as patrons jostled in a poky

outpost of Blank Street, a coffee-shop chain. You might have expected them
to pick up a warming cappuccino. Instead, many placed orders for iced
matcha lattes, which arrived in shades of green, cream (white-chocolate
flavour) or purple (blueberry).

Such is the craze for matcha that fans are willing to risk frostbite to get their
hands on one. Blank Street claims that it sells some form of the green-tea-
based drink “every four seconds” from its 80-odd shops in Britain and
America (though it refuses to say how much that adds up to). In Japan, the

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world’s leading producer of matcha, the export value of tea in 2023 rose by
33% from the previous year. The global market for matcha-based products
is worth around $4.24bn and will grow around 53% by 2029, predicts the
Business Research Company, a consultancy.

Matcha is big on social media: videos tagged #Matcha on TikTok have

more than 15bn views. Fans share recipes and teach their followers how to
tell a high-quality matcha powder from a shoddy one. (Apparently they
should look for “ceremonial grade”, which has a vibrant hue, fine texture
and higher price tag.) Asia is responsible for more than 40% of matcha
consumption: as well as going into bottled, pre-mixed drinks, the powder is
used in ice cream, biscuits and mochi (rice cakes).

Matcha is made from ground leaves of the Camellia sinensis plant. Tea
culture developed in China during the Tang Dynasty. Myoan Eisai, a
Japanese monk, came across it while travelling there in the 12th century; he
brought seeds back to Japan and wrote a book extolling green tea’s benefits,
describing it as “the elixir of the immortals”. Matcha later spread through
Japanese polite society with the rise of chanoyu, or the tea ceremony.

What explains the drink’s newfound popularity outside Asia? Matcha

mavens tout it as a healthier alternative to coffee. Some studies suggest that
green tea’s antioxidants can help stave off cardiovascular disease, improve
gut health and speed up metabolism. It also gives a steady boost of energy,
compared with the surge and crash of a cup of joe. A coffee contains around
100-200mg of caffeine; a matcha contains around 70mg, as well as L-
theanine, an amino acid, which together improve concentration and
alertness.

Gen Z and millennials—who drink less coffee than their elders, spend more
time online and care about wellness—are seeking it out. The irony is that
much of matcha’s growth in the West is driven by flavoured matcha lattes,
which are crammed with sugar. The future may not be all that sweet,
however. Tea production in Japan is decreasing, as is the area of land being
used for cultivation; farmers are retiring and are put off by rising prices for
fertiliser and other essentials. Lovers of the trendy iced beverage may soon
feel a chill when it comes to their bill. ■

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controversies, sign up to Plot Twist, our weekly subscriber-only newsletter
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drink-of-the-moment

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Economic & financial indicators

Economic data, commodities and markets
Indicators ::

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Indicators

Economic data, commodities and

markets
None
1月 16, 2025 07:18 上午

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financial-indicators/2025/01/16/economic-data-commodities-and-markets

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Obituary
Peter Fenwick became the world expert on near-death
experiences
Through the tunnel to the light :: The neuropsychiatrist and promoter of “the art of dying” died
on November 22nd, aged 89

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Through the tunnel to the light

Peter Fenwick became the world

expert on near-death experiences
The neuropsychiatrist and promoter of “the art of dying” died on November
22nd, aged 89
1月 16, 2025 08:37 上午

THE MAN who sat facing Peter Fenwick in his consulting room was lucky
to be alive. A while ago, he had come into St Thomas’ hospital in London to
have a catheter inserted in his heart. But things had gone wrong, and he
went into cardiac arrest. There was no respiratory effort and no brain-stem
reflex. For some minutes, to all the doctors round him, he was clinically
dead.

But not to him. From somewhere outside his body he watched what they
were doing to him, as he lay inert on the gurney. Then he went through a

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tunnel, towards a light that was strangely welcoming. At the tunnel’s end,
bathed in that light, was a garden of beautiful flowers. He wandered there
for a while, surrounded by love. He met dead relatives and silently
conversed with them. Briefly he saw his life in review, though no one
judged him except himself. Then he suddenly realised that if he went on, he
would die. So he returned to his body and its pain.

Dr Fenwick was shocked to hear this, from a patient he thought he knew.

He had heard about near-death experiences (NDEs), of course; he had read
Raymond Moody’s “Life After Life”, published the year before, which had
set up quite a stir. His verdict was that the book was absolute rubbish, flaky
Californian stuff. But perhaps there was something here to look into.

It touched on the subject that had fascinated him ever since his graduation
from Cambridge. What was consciousness, and how did it relate to brain
function? Was it transcendent reality (as he increasingly felt), or was it
secreted by the brain like bile from the liver? And what sort of research
could bridge the gap? When he went into medicine his first interest was
brain surgery, but he decided he didn’t want to look into the brain through
some deep, dark hole; he needed to study its workings in conscious patients.
The neurophysiology unit he ran for 20 years at the Maudsley Hospital
dealt with epilepsy, sleep, meditation and dreams. NDEs were a natural next
step.

Almost no work had been done on them. The field was clear; it was also
dismissed. The world according to science in the 1960s was mechanistic
and purely material. At Cambridge he hardly ever heard the word
“consciousness”. NDEs were dismissed as hallucinations, or the result of
drugs, anesthesia or oxygen deprivation; at worst, they were a sort of
common myth for people afraid of death. At Cambridge the master of his
college, Trinity, had won a Nobel prize partly for showing how neurons
communicated with each other by pulses of electricity. Once neurons were
completely understood, one critic told him, the debate would be over.

He had chosen a hard road. His attempt to set up a study of NDEs at the
Maudsley was laughed away by its ethics committee. The head of the
intensive-care unit said such things never happened there. A vicar, horrified,
said no-one in his congregation had ever experienced such a thing. But all

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were proved wrong; for in 1988 a BBC documentary featuring Dr Fenwick
brought in more than 2,000 letters from the Great British Public, who not
only cheered him with stories of their own NDEs but, when he sent 500 of
them detailed questionnaires, also gave him a wonderful database for a
study of the phenomenon itself.

About 98% of the respondents had not known what an NDE was. Almost
all, however, told much the same tale. They had left the body or gone down
a tunnel towards a bright light, which embraced them with love and peace.
At the end was a pastoral landscape or an English country garden, both a
paradise. About 40% met dead relatives or friends there, but as presences
rather than forms, and these often told them that it was not yet their time.
Some had a life review, from which they were gently encouraged to learn.
Then, when they reached a boundary they strongly felt they should not
cross, they turned back. It was always their decision: something urgent had
to be said, or done, before they actually died. One woman said she had to
finish a pile of ironing. The similarity of these experiences, and their
overwhelming realness for those who had them, fortified his own growing
belief in a consciousness that was universal, external and contained many
levels of reality: a consciousness that was only dimly filtered by the senses
and the ever-busy, marvellous brain.

He was most intrigued, though, by what happened at deaths from which

people did not return. When the brain died, did consciousness truly survive?
He was debarred from questioning the dying, so he talked to relatives and
carers in hospices. Attitudes varied widely: the doctors sceptical, some
hostile, but nurses more open-minded. They heard patients describe
deathbed visions and strange visitors, and at times met them too. They
watched birds perch near the window, and a strong spiritual light filling the
room. Far-off relatives described visits by the dead at the moment they died,
always with the simple message: “I’m OK”.

The hardest part of death, as he reported in “The Art of Dying”, was to give
everything up. The ego, so carefully constructed since childhood, so loud
with chatter and insistent on control, had to be stripped away completely to
achieve transcendence. While in this world, he had made a start. He studied
Zen, which he found hard, and did daily meditation. He also followed the

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teachings of Alain Forget, a philosopher whose system for losing the ego
was distancing and discernment. He discovered half-hidden walls in himself
he had to break down, especially his resentment of his mother for sending
him from Kenya, at the age of five, to boarding school in England. With a
bit of a struggle, he learned to live in the moment, discarding both future
and past.

In his many talks, he never hectored like a preacher. He spoke calmly and
happily, sometimes with his Burmese cat on his lap. His field of interest,
controversial as it remained, filled him with joy and curiosity. Whatever
was to come next, beyond the body, he knew it would be wonderful. He
could hardly wait. ■
This article was downloaded by calibre from
https://www.economist.com/obituary/2025/01/16/peter-fenwick-became-the-world-expert-
on-near-death-experiences

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