Inflation pervades every aspect of our lives, from skyrocketing gasoline to rents to well, corruption. But inflation in the cost of under-the-table payments is notoriously difficult to measure, and so it’s not included in any of the indices. But in Germany, which is historically paranoid, and rightfully so, about inflation, after two wipe-outs in one generation, there’s progress: inflation in the cost of corruption can now be estimated.
In early December, Christophe de Margerie, CEO of Total, the Exxon à la Française, shocked the French when he said that there was “no doubt” that a liter of gasoline would reach €2 and that the only question was when. He cited the calamities in the news at the time to justify the skyrocketing prices of oil and gasoline—source of Total’s mega profits. He was talking his book, obviously, which isn’t illegal, not even in France.
Natural gas is dirt cheap, hovering at a 10-year low. In the US, that is. In other parts of the world, natural gas is four, five times more expensive—a rare discrepancy in a globalized economy. But the US, largest producer in the world, stunningly, has no facilities to export it. So President Obama has made dirt-cheap natural gas a cornerstone of his energy policy, but investors are bloodied, and drilling activity is falling off a cliff.
France, tangled up in a presidential election with major implications for the Eurozone, has gotten used to watching President Sarkozy getting clobbered in a historic fashion by socialist Hollande. But on Tuesday, the country woke up to the news—quelle horreur—that their presumed loser was suddenly ahead in the polls. Amidst this chaos, two fundamental cross currents in the French economy went practically unnoticed, though they should have caused an outburst of national soul searching.
Republicans are trying to tar President Obama with gas prices that are creeping up on $4 a gallon and are shooting for an all-time high. The strategy is working. Obama’s approval rating on handling gas prices has plunged. In San Francisco, gas is already $4.50. Yet across the Bay are five oil refineries that together are the largest exporters of petroleum products in the nation.
Tokyo, May 1996. One of the newsstands at Takadanobaba station carries the Wall Street Journal Asia. Before 8 a.m., the wrinkled prewar archetype has two copies. By 8:45 a.m., he’s down to one. By 9 a.m., he’s out. And now that I live a few minutes away, I get there in time to grab the last copy. Surely, the same two guys have been buying them for years, and now I come along and muck up their system. I feel like a thief.
The earthquake and tsunami that hit Japan on March 11 a year ago and the nuclear catastrophe that followed are personal to me: my wife is from Tokyo, and my in-laws live there. To our immense relief, no one we know was hurt. But others weren’t that lucky: 15,854 died and 3,155 are still missing. This missive, written by my wife four days after the quake, depicts the chaos in Tokyo, the emotions, and the unique Japanese ways of coping with it.
“We owed it to our children and grandchildren to rid them of the burden of this debt,” said Greek Finance Minister Evangelos Venizelos about the bond swap that had just whacked private sector investors with a 74% loss. While everyone other than the bondholders was applauding, the drumbeat of Greece’s economic horror show continued in its relentless manner.
Two freaks—Greek bonds and bailout-queen Dexia—wormed their way into an earnings announcement today, this one by the French postal service. It has its share of strategic problems and government interference, much like the United States Postal Service. But it made a profit and will pay a dividend to the French government. Only the USPS is run by 535 clueless micromanagers in Washington.
Socialist François Hollande, frontrunner in the French presidential election, tried to score some points against President Sarkozy—criticized for his cozy relationship with the rich. “I don’t like the rich,” he said and followed up on TV with two new income-tax brackets for the rich: 45% and 75%. But now a hullaballoo broke out, not among his targets, the corporate chieftains, but in the world of … soccer. And it’s killing the new tax.