The first thing you notice as you approach John Kenneth Galbraith’s home in Cambridge, Massachusetts, a stone’s throw from Harvard University, is a ”Kerry/ Edwards for president” poster in a ground-floor window, a hint of the politics that has dominated his life. At 95, Galbraith, one of the greatest political and economic thinkers of the past century, is still politically engaged. He speaks about his new book.
Last week saw the definitive end to the cheap money that refuelled the United States and world economies in the dark days of the dotcom bust, September 11 and the war in Iraq. The US Federal Reserve, the world’s most powerful central bank, increased the federal funds rate to 1,25%. It is the first rate increase in four years. Now the bank’s chief needs to negotiate this rise in rates without triggering a market meltdown.
Brazil has won a landmark victory at the World Trade Organisation (WTO) that could spell the beginning of the end of rich countries’ subsidy payments to their farmers. The WTO, based in Geneva, has ruled that most of the ,5-billion of annual subsidies given by the United States government to its 25 000 cotton farmers are illegal.