Canada’s prime minister clings on to office, for the moment

THERE are no tanks in the streets or protesters occupying the airport, but Canada is in the midst of political turmoil the like of which this normally placid country has rarely seen. Only seven weeks ago Stephen Harper, the prime minister, won a second term for his Conservative government, but once again without winning a parliamentary majority. Now the three disparate opposition parties—the centrist Liberals, the socialist New Democrats (NDP) and the separatist Bloc Quebecois—have ganged up in order to oust the Conservatives and replace them with a centre-left coalition. That left Mr Harper scrabbling for survival.

On Thursday December 4th he asked Michaelle Jean, who as governor-general acts as Canada’s head of state, to suspend Parliament until January. After a two-hour meeting, she agreed to do so. That means that for now Mr Harper has dodged a confidence vote scheduled for December 8th that the opposition parties, provided they stick together, were bound to win. The opposition holds 163 of the 308 seats in the House of Commons. ...

The most popular ways to fiddle expenses

EXAGGERATING expenses—thievery of a sort—may become more popular as recession worsens. A recent survey for GlobalExpense, an accounting firm, found that 22% of Britons who were polled admitted to bumping up claims at some point. Nearly a third said that fiddling expenses was acceptable, for example because of below-inflation pay rises and other miserliness by employers. Three-quarters of dodgy claims were inflated by GBP20 ($30) or less, perhaps explaining why unwary bosses only challenged 4% of claims. Those who bump up their expenses are most likely to do so when claiming mileage driven for work, or for living costs.

...

Defending political freedom in Russia and Britain

IMAGINE the outrage if the Russian police raided the Duma and arrested a leading opposition politician on the grounds that he had obtained leaked information embarrassing to the Kremlin. It would prompt pompous lectures from Western politicians and lobby groups about the dangers of autocracy, the need to maintain the separation of powers, and so on. When the same thing happens in Britain, it is not just bad for the political system in a country that likes to think it is the mother of parliamentary democracy. It also weakens the argument that tussles between Russia and the West are based fundamentally on values rather than geopolitics.

“Whataboutism” was a favourite tactic of Soviet propagandists during the old Cold War. Any criticism of the Soviet Union’s internal repression or external aggression was met by asking “what about” some crime of the West, from slavery to the Monroe doctrine. In the era when political prisoners rotted in Siberia and you could be shot for trying to leave the socialist paradise, whataboutism was little more than a debating tactic. Most people inside the Soviet Union, particularly towards the end, knew that their system was based on lies and murder. For all its shortcomings, the West was not that bad. ...

Europe's central banks make it a day of big interest-rate cuts

AS EUROPEAN economies have weakened far more than expected, their central banks have wielded their big weapon. Thursday December 4th will go down in monetary history as the day that they made drastic cuts in interest rates to ward off a severe recession.

It started with a bang when the Swedish central bank announced a far bigger reduction than expected in its policy rate. At a meeting brought forward from mid-December, the bank’s executive board lowered the repo rate from 3.75% to 2%. Economists had anticipated a much smaller cut—of up to a percentage point. ...

The president is seeking funds to boost the economy

Faced with slowing economic growth, dwindling reserves and an international financial crisis, Argentina’s president, Cristina Fernandez de Kirchner, is resorting to interventionist measures to prevent further economic and political deterioration. She is desperately seeking funds to service debt and finance a multi-billion dollar public-works program to boost the economy, and in the process improve her image. Ms Fernandez’s so-called anti-crisis plan includes controversial tax perks which are being questioned locally and internationally but are expected to be approved by Congress with little resistance.

Since early this year, Argentina’s president has been employing controversial measures to fill her government’s coffers. This began in March with an attempt to increase an export tax on farmers who, at the time, were benefiting from extremely high prices for commodities. Her efforts failed after 102 days of protests and roadblocks that ended when her own vice-president voted against the legislation, sealing its fate in an evenly divided Senate. ...

An economist descends into the trenches

I SUPPOSE I could be described as financially literate. I have a doctorate in economics; my dissertation focused on financial decision-making. I write about economics and finance, and I’ve worked in the financial industry, designing investment strategies. But, when I look at the balance of my brokerage account (those low-fee global-equity index funds do not seem like such a good idea at the moment) or my credit card statement (peppered with frivolous impulse purchases), I question my financial savvy. ...

Zimbabwe asks for help as hundreds die from cholera

THE latest catastrophe to hit Zimbabwe is an epidemic of cholera. It has spread across nine of the country’s ten provinces, hitting at least 12,000 people and perhaps many more. The UN says that at least 565 people have already died, but a local organisation says the death toll is already much higher. On Wednesday December 3rd Zimbabwe's rulers asked for urgent international help—medicine, equipment and funds—to tackle the outbreak.

The health-care system has collapsed. Harare’s two biggest hospitals have almost ceased to function. The water and sewerage system has broken down in many places, including Harare, where the authorities turned off the taps completely for a few days in a cack-handed attempt to stem the spread of the disease. Sick Zimbabweans are streaming into neighbouring South Africa. ...

Will Congress lend a helping hand to America's humbled carmakers?

HAVING flown their corporate jets into a hail of congressional bullets last month, the chastened bosses of Detroit’s Big Three car firms this week made their way back to Washington, DC, by road in fuel-sipping hybrids. Whether that belated gesture and the new restructuring plans the executives presented to legislators will land them the $34 billion of taxpayer-funded loans they are desperately seeking to stave off bankruptcy will not be decided until next week at the earliest.

That they will get something is not in much doubt. All three have made other obeisances to the prejudices of congressional Democrats. From now on, an increasing proportion of the vehicles they produce will use the latest technology to achieve low or zero emissions. Executive pay will be pegged—the three CEOs are promising to work for a dollar a year. Those company jets are all to be sold. ...

Coups and attempted coups are going out of fashion

REGIME change nowadays tends to be made through democratic means rather than by an army takeover. The number of coups has fallen in recent years, with only one recorded attempt in 2007, according to the Heidelberg Institute for International Conflict Research, a think-tank. This is a steep drop from the decades from 1960 to 1989, when an average of 12 coups or attempted coups were made every year. Many coups during the cold war years were backed by the Soviet Union or America as each superpower tried to gain footholds in strategically important countries, particularly in Latin America. But the biggest change was in sub-Saharan Africa, as decolonisation, especially in the 1960s, left weak governments vulnerable to the armed forces and to foreign mercenaries. The region is still the most prone to coups, although Asia is not far behind.

...

Where the terror trail so often leads

IT MAY have been a slip of the tongue. But there was something very revealing about a remark that Pakistan’s president, Asif Ali Zardari, made in an interview with an Indian television channel on November 30th. Asked about allegations that Pakistan was involved in the murderous onslaught on Mumbai, he promised, before the world, strict action “if any evidence points towards any individual or group in my part of the country”.

The (perhaps unintended) implication that Mr Zardari is in control of only part of Pakistan is all too true. And that helps explain why it is so difficult for India to respond. ...

Chile's outlook has darkened as commodity prices drop

In the light of the international economic turbulence since September—which has brought sharp drops in commodity prices, the value of the peso and in investment expectations—the outlook for Chile’s economy has deteriorated notably. A significant slowdown in growth is expected next year, and while the financial sector is strong enough to withstand fallout from the global crisis, the country’s corporate sector may be more exposed.

At its monetary policy meeting of November 13th the board of the Central Bank kept its monetary policy rate unchanged at 8.25%, a decision that it said was consistent with the sharp downward revision of its macroeconomic projections for the next two years, which it published a day later. The Bank now expects GDP growth to be 2-3% in 2009, but this is still well above the 1% growth forecast by the Economist Intelligence Unit. (Growth in 2008 is estimated at 3.9%.) ...

The governor-elect faces formidable challenges in Puerto Rico

A new governor, Luis Fortuno of the Partido Nuevo Progresista (PNP), will take office in Puerto Rico in January, following a hotly contested four-way race in which he defeated the incumbent on November 4th. For the last four years the island’s resident commissioner resident in Washington, Mr Fortuno won by a large margin, capitalising on widespread discontent with the corruption scandals and abysmal economic conditions that plagued the outgoing governor’s administration.

The defeated governor, Anibal Acevedo Vila, of the Partido Popular Democratico (PPD), ran for re-election despite his indictment by federal prosecutors for alleged fraud relating to the funding of his 2000 campaign for the post of resident commissioner in the US (which he held from 2000-04). The issue of the indictment figured prominently in the campaign, damaging Mr Acevedo’s prospects. He is expected to face trial just weeks after his successor takes office. Voters were also dissatisfied with an unpopular sales tax, and increases in electricity and water rates during Mr Acevedo’s term. Further, the economy has been stagnant for several years, and unemployment has spiked to nearly 12%. ...

The prime minister of Thailand resigns, in a victory for opposition protesters

IN THE end it was Thailand’s Constitutional Court that sent the prime minister packing. Somchai Wongsawat resigned on Tuesday December 2nd after his party and two others were dissolved for electoral fraud. But the noose around his neck was the week-long seizure of Bangkok’s two airports by opposition protesters, who have plunged the capital into chaos and sown fear of wider unrest. They may leave now, allowing Bangkok's airport to resume flights in time for a busy tourist season, and to start clearing a backlog of over 300,000 stranded foreign tourists. But the political upheaval is not over, and damage to Thailand’s battered economy and international reputation may well continue.

The verdict on Tuesday was widely anticipated. The leaders of Mr Somchai’s People’s Power Party (PPP) and two of its coalition partners had already been found guilty of financial trickery during elections in December 2007. The constitution, forged last year, lets judges disband an entire party when such an offence is committed, although they have discretion in deciding who should be penalised further. The nine-member panel of judges ruled that all the party executives were guilty and are thus barred from holding public office for five years. For the PPP that means disqualification for over 30 of its best and brightest. ...

Mergers and acquisitions could boom again next year

LIKE every other business activity nowadays (except bankruptcy-advisory work) merging and acquiring companies (M&A) is in a deep slump. Last week BHP Billiton, a mining giant, withdrew from its planned hostile acquisition of Rio Tinto. This is part of a trend of corporate grooms abandoning their would-be wives at the altar. According to Thomson Reuters, that takes the total value of cancelled mergers so far in this quarter to $322 billion, a two-year high and almost as much as the value of completed mergers in this quarter ($362 billion).

Another study, by UBS, found that one-third of the deals announced in America this year have been terminated before consummation. And the number of proposals is down overall this year. Worldwide, the value of mergers and acquisitions completed so far in 2008 is $2.8 trillion, down by 27% from the same time last year. ...

The company Christmas party is falling victim to the credit crunch

DRUNKEN passes at colleagues, ill-advised “secret Santa” presents and embarrassing dance moves. Chalk up three more victims of the credit crunch, as beleaguered companies take the axe to Christmas parties. According to a survey of members of the Chartered Institute of Personnel and Development, a British professional-development body, 60% of organisations will host a party or lunch for staff this year, down from nearly 70% last year. Although manufacturing and non-profit sectors are cutting back most, more of these firms will still put on parties than the Scrooge-like public sector. Is it better to have partied and lost than to have never partied at all?

...

Barack Obama introduces his national-security team

THE phrase “team of rivals” has been on every pundit's lips since it became clear that Barack Obama would make Hillary Clinton his secretary of state. Coming from the title of a book about Abraham Lincoln’s cabinet, it seems to highlight that Mr Obama wants to hear dissenting opinions, including from his biggest personal rival, Mrs Clinton. But a look at his national-security line-up, which was officially announced on Monday December 1st, suggests a team that will probably gel reasonably well.

Mrs Clinton and Mr Obama sparred sharply during the primaries. Mrs Clinton voted for the Iraq war and touted her experience. Mr Obama called his stance against the war a virtue, along with his newness in Washington, DC, and his willingness to talk to America’s enemies such as Iran. Mrs Clinton responded that he was naive. But the two were posturing for the Democratic primary voters. In truth, their positions are not so far apart, even on the Iraq war, where both want withdrawal relatively soon. ...