Financial Times Europe - 07.10.2019

20 ★ FINANCIAL TIMES Monday7 October 2019

Oil and gas extraction

has huge, clear and

costly externalities

Thanks to Jonathan Ford for his Inside

Business column “Renewables industry

must tackle all forms of subsidy”

(September 30). It is all well and good

to emphasise the need for the

renewable industry to stand on its two

feet unattended but why aren’t we

asking the same from the fossil fuel

industry? After all, it is very clear at

this stage that extracting coal or oil has

huge externalities, yet these costs are

ignored (allocated to everybody

eventually) while the profits are

privatised today.

Capitalism and market forces are

best to generate wealth and growth, but

input costs have to be correctly

allocated to the end users. In the case

of fossil fuels, this sound principle has

been ignored for too long. This doesn’t

mean that the mistakes of the past

need to be continued today nor

tomorrow.

Olivier Lemaigre

New York, NY, US

Lost? There’s more

than one solution

In response to Pilita Clark’s column

“The war on weasel words is failing and

I am no help at all” (September 23): as

someone who has dedicated the last 20

years of her life to wayfinding, I should

like to outline why the word

“wayfinding” should be absolved of

such a derogatory label.

The whole concept of wayfinding is

about ensuring clarity. It refers to all of

the ways people move through the

built environment, as well as how they

perceive and orientate themselves in a

space. We have an innate desire to feel

safe, and when the world isn’t

constructed as we understand it then

we get lost. If you think there is only

one solution to being lost and that’s

signs, you’re missing the point.

Wayfinding concerns lighting,

colour, sound, landmarks — smells,

even (note how you can smell Lush and

Subway stores a country mile away) —

as well as signs. Good wayfinding

encourages specific behaviours and

actions. And yes, of course it’s about

navigation too.

While it’s rooted in strategy, it is a

discipline that makes the world more

legible. It helps circulate footfall,

controls crowds, and creates a sense of

place, purpose, and direction. It also

gives us amazing art. Think of the

Angel of the North — it’s not just art or

sculpture, it’s also a landmark, which is

a key part of wayfinding — and clearly

not a sign.

If this sounds a tad grandiose (or

overly business-y), consider how easy

it is to get lost in a hospital, shopping

mall or airport. Signage alone doesn’t

solve navigation issues. Visual cues

should be consistent, highly visible and

aligned with the overall look and feel of

a building.

Still not convinced? Consider the

implications in a more urgent setting —

in hospitals, where the impact of

flawed wayfinding has already been

significant. According toresearch yb

NHS England, almost 8m hospital

appointments were missed or recorded

as “did not attend” in 2017-18 — not

including appointments cancelled in

advance. The overall cost? Almost

£1bn a year. But thanks to a new digital

tool-cum-wayfinding map, it’s hoped

that these huge losses can be

avoided, saving individual hospitals up

to £2m a year.

I do sympathise with Ms Clark’s

frustration over buzzword bingo and

political newspeak. But in this

particular instance, perhaps by

highlighting what wayfinding is we can

avoid it being used out of context.

Alison Richings

Head of Wayfinding,

Endpoint,

London SE1, UK

Support for Trump has

held the GOP together

I don’t agree with Janan Ganesh’s

mildly optimistic take about the

chances of Republicans discarding

President Donald Trump

(“ Republicans have good reason to

desert Trump”, October 3). For

starters, my sense is that polls will

show Mr Trump maintaining

Republican support as impeachment

heats up. Moreover, Republican

support for Mr Trump is about much

more than political survival on Capitol

Hill in the near term.

The US is essentially a two-party

system and that’s unlikely to change

for the foreseeable future. Mr Trump

hasn’t just been politically useful from

a policy perspective — with

conservative judicial appointments,

deregulation, tax reform and more —

because Republican support for Mr

Trump has held the party together.

This unity will likely aid the long-term

wellbeing of the GOP.

Mr Trump’s presidency has been

terrible in many ways, and Republicans

in general and congressional

Republicans in particular have mostly

served as agents of cowardice,

subservience and enablement.

Nonetheless, a messy impeachment

battle is unlikely to alter the

calculations that have dominated

conservative politics since Mr Trump

came to power.

Taylor Dibbert

Takoma Park, MD, US

With reference to Benjamin Parkin’s

report “Tata warns India tax cut is

insufficient” (October 2): very true

indeed. The reduction in corporate

taxes from 35 to 25 per cent is not going

to fuel consumer demand for cars or

any other durables.

India had one of the highest

corporate tax rates globally. This move

to reduce taxes is wise. Hopefully the

corporate sector will cease the various

lay-offs of personnel and the closures

of ancillary factories, which were in the

pipelines, especially in the automobile

sector.

Now is the time to reduce the rate of

individual taxation, which at the

highest level is 30 per cent. It is

important to kick-start the economy by

igniting the buying cycle. It will be

smart to put more purchasing power in

the hands of the consumers by

rationalising the rates of income taxes

to a maximum of 20 per cent and

lowering the goods and services tax,

introduced in 2017, from the highest

tier of 28 per cent to a maximum of 15

per cent.

India’s growth story was fuelled by

agricultural productivity and rising

rural incomes. Demonetisation in late

2016 crippled the rural economy which

principally runs on cash. Thus,

agricultural labour is unemployed.

These workers live a hand-to-mouth

life, subsisting on daily wages. Since

they have no savings, they are in deep

trouble. Unemployment, which was a

serious problem in India at 6.1 per cent,

will augment further.

The government needs to launch

mass employment schemes in rural

areas to provide gainful employment to

the rural workforce, even in those

years in which the monsoons and

agricultural productivity is erratic.

Rural employment opportunities may

be found in building roads, in

improving agrarian infrastructure with

the construction of warehouses, canals

and so on, and in animal husbandry,

poultry farming and horticulture.

About 45 per cent of the demand

for many consumer products comes

from India’s 649,481 villages. A

weakening of demand in the villages

has a direct impact on corporate

performance. The salary increments

in the private sector corporations in

the current year have been the lowest

in the last decade. This has an

impact on the demand for housing,

cars, refrigerators and consumer

durables.

Rajendra Aneja

Mumbai, India

It is time to ignite the buying cycle in India

Letters

MONDAY7 OCTOBER 2019

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What broughtDonald Trump victory

in the 2016 US presidential election?

Plenty of ink has been spilled trying

to answer that question. Among the

proposed factors are Russian

interference, third-party candidates,

and the conservative media

supporting him. From Fox News, to

The Daily Wire, to The Gateway

Pundit,cross-pollinating news

sources defended Mr Trump from

what they considered liberal bias.

Brian Rosenwald, an academic and

journalist, argues that central to that

media ecosystem was talk radio.

Rejecting claims that the medium

acted as a Republican puppet, he

describes a curious relationship

between the Grand Old Party and talk

radio hosts, one that has had seriously

deleterious consequences for

American political life.

The book begins in 1987, with the

abolition of the US Federal

Communications Commission’s

“fairness doctrine” that had obliged

radio stations to present both sides of

controversial issues. Ironically, the

decision made in the twilight of

Ronald Reagan’s administration would

lead to the hollowing out of his party.

Among those pioneers of talk radio

in the late 1980s wasRush Limbaugh.

While earlier conservative ideologues

had been dogmatic and monotonous,

he fused ardent rightwing politics with

the interactivity of talk radio and his

own brand of high-energy comedy.

AM radio executives, unable to

compete with FM on music sound

quality, found shows like his were a

good way to boost revenues.

Talk radio predated social media as

a tool for younger and lower-profile

politicians to hijack the news agenda.

Cannyindividuals, such as former

Speaker of the House of

Representatives Newt Gingrich, forged

friendships with the hosts, giving them

easy access whenever they needed to

push a point. But as shows grew

increasingly influential, even more

established politicians had to pay

attention. President George W Bush’s

one-on-one meetings with Mr

Limbaugh and his fellow host Sean

Hannity in early 2009illustrate the

power they wielded even 10 years ago.

Yet it would be a mistake to see talk

radio hosts as another column of the

GOP. Certainly, there was a benefit to

both sides when Republicans were

given airtime, but the aims of the two

sides have always diverged.

Politicians, with an electorate who

want change, have to make at least

some compromises with Democratic

colleagues. By contrast, talk radio

hosts are empowered by “the tight

bond they shared with listeners”. So

their primary motivation is to keep

audiences plugged in by offering what

they want to hear. When it comes to

politics, purity trumps practicality.

Clashes with Democrats were “a battle

for the soul of America”, to quote

paleoconservative Pat Buchanan.

That divide meant that Republicans

found their right flank was just as

exposed to jibes and mocking

nicknames as their opponents. John

Boehner, another former Speaker,

dramatically reduced his appearances

on talk radio out of fear of being

harangued for not being sufficiently

wild-eyed. For some hosts, to be a

Rino — Republican In Name Only —

was little better than being an open

Democrat. As a slew of competitors

arrived, ranging from Fox News’

television channel to digital-only

outlets, hosts doubled down on their

rhetoric to keep audiences engaged.

All this, Rosenwald writes, was

necessary to make the Trump

presidency a reality. Mr Trump may

have taken a liberal position on issues

close to hosts’ hearts — his personal

record hardly lives up to the Christian

values they espouse. Yet, like the

mainstream media, even hosts who

found him distasteful had to talk

about him daily, during and after his

campaign. His appeal to the culture

war narrative, disdain for political

correctness and love for controversy

were all tools borrowed from the talk

radio handbook.

And as the conservative media fell

in line behind Mr Trump, those hosts

who remained defiant saw themselves

sidelined. In the final chapter,

Rosenwald gives a sobering

assessment of the future of talk radio.

The need for listeners and advertising

revenue has not slacked, he writes. In

the digital age, it has become even

more intense. The future of the

puritanical rightwing conservatism

that the medium has pioneered looks

stable, however.

The reviewer is an FT leader writer

Reinventing

conservatism

on the airwaves

Book review

Siddharth

Venkataramakrishnan

Talk Radio’s America:

How an Industry Took

Over a Political Party

That Took Over the

United States

by Brian Rosenwald

Harvard University Press £23.

OPINION ON FT.COM

Gavyn Davies

Can Donald Trump force the Federal

Reserve to cut rates?

http://www.ft.com/gavyn-davies

The attack on the European Central
Bank’s renewed stimulus bysix former
central bankers s extraordinary.i
Already, the ECB had been publicly
criticised inunusually sharp terms yb
dissenters on its own governing council
and leading German financial execu-
tives. But the new critics, in a memo
published on Friday, include some of
the grandest names in central banking,
such as Helmut Schlesinger, the 95-
year-old former Bundesbank head, and
Otmar Issing, an ECB board member
when the euro came into being.
Only one thing can match the stature
of the complainants and that is the hol-
lowness of their complaint. Their
memorandum reveals them as the
Bourbons of central banking: they have
learnt nothing and forgotten nothing.
They think monetary accommoda-
tion has damaged the financial sector,
turned banks and companies into zom-
bies, and increased the risk of financial
instability. But if the history of the euro
and global economic evidence demon-
strate anything it is that the true risk
both to the eurozone economy and to
the ECB’s mandate is a policy that is too
tight, not one that is excessively loose.
The memo disregards the fact that
the last time monetary policy was
tightened in the eurozone it helped tip
the economy into a second recession,
and unchained deflationary pressures
that were only reined in by a belated
programme of quantitative easing.
Other central banks, which loosened
earlier and more ambitiously than the
ECB, saw uninterrupted recoveries.
The memo ignores the fact that low
rates are a global phenomenon, as is
the latest slowdown. From Japan to the
UK, central banks are keeping policy
rates at historic lows. The Federal
Reserve has reversed its tightening and
thinks it may have gone too far in sell-
ing off bonds bought in quantitative
easing. If the signatories are right, it is

not just the ECB but the entire outside

world that is mistaken.

Behind a veneer of economic and

legal argument lies a partisan attack.

The memo is unconvincing in light of

the ECB’s mandate to support all-euro-

zone price stability and the EU’s other

economic objectives. It makes more

sense as a camouflaged fight for the

interests of savers against those of bor-

rowers. Only one signatory is not from

the big net saving economies of Ger-

many, Austria and the Netherlands,

and the memo all but accuses the ECB

of violating EU law to “protect heavily

indebted governments”.

Particularly revealing is the com-

plaint that loose monetary policy

favours “real assets” and deprives the

young of “safe interest-bearing invest-

ments”. Rates are low because too

many seek riskless savings and too few

want to invest in “real assets” — also

known as productive capital. If bank

deposits do not pay the returns they

once did, the fault is not that of central

banks but of market realities. Holding

back demand with tighter money can

only make things worse.

If they really wanted higher rates, the

critics would support the ECB’s call for

fiscal expansion to relieve monetary

policy. Instead their hard money

dogma reflects a deeper disagreement

that predates the euro, over whether

Europe is governed in Germany’s

image or Germany in Europe’s. Wolf-

gang Schäuble infamouslyblamed owl

ECB rates for the growth of the far-right

Alternative for Germany. In fact the

populist party’s origins lie in the sort of

hard-money lobbying for savers’ inter-

est that the memo represents — never

mind that the ECB has kept inflation

lower than the Bundesbank.

The memo expresses a generation’s

frustration that its ideas lost influence.

Today’s Europe — especially its youth

— may be fortunate that they did.

Risk to eurozone economy is overly tight, not loose, monetary policy

The euro’s guardians face

a roar of the dinosaurs

As an infant republic, the external
business of the United States was sur-
vival. The founders could not have
known that its foreign policy would
outgrow that basic exigency to become
a globe-moulding force. Had they seen
the future — American troops are sta-
tioned in most of the world’s countries
— they might have designed a presi-
dency with less discretion over foreign
affairs.
The case is growing thatDonald
Trump, the current possessor of that
awesome discretion,sought foreign
help against domestic opponents.
What started as a story about Ukraine
has widened to includeChina. What
centred on a phone call in July now
takes in a range of interactions over a
longer period. “They’re looking into a
keyhole,” says Bob Woodward, whose
reporting felled Richard Nixon, of the
Democrats investigating the president.
“And it’s a panorama.”
Thelegal and moral principles ta
issue are serious enough. Less dis-
cussed are the geopolitical implica-
tions. The scandal promises to leave
the US looking less reliable than ever as
an actor in the world. If it is seen to have
pressed a desperate country for kom-
promat, on pain of withheld aid, the
signal to other allies will be grim. A
revisionist power, such as Russia, will
suggest that a nation counts on Amer-
ica at its own risk. And it will be a diffi-
cult claim to refute.
American steadfastness has already
come into question in recent years. Mr
Trump’s disdain for Nato and with-
drawal from various treaties has seen
to that. But there were versions of this
unilateralism under previous adminis-
trations. The present controversy is of
another order of gravity. It implies
that, in a bilateral relationship with the
US, absolutely everything is negotiable
— and on Washington’s terms.
Even the impeachment and removal

of the president might not fix this prob-

lem. No ally can be sure that a future US

leader would not behave in similar

fashion. If it happens once, it is only

rational to entertain a repeat, which

means it is only rational to make alter-

native arrangements. That way lies the

decomposition of western alliances. Mr

Trump might turn out to be unique in

the extent to which he equates his own

interest with his nation’s. No prudent

foreign leader can assume as much.

The introduction of doubt is the point.

Perhaps it would reassure them if

other members of the administration

disavowed the behaviour in question.

Instead, Mike Pence and Mike Pompeo

have all but endorsed it. The vice-presi-

dent appears to have diluted his 2016

view that foreign governments should

not involve themselves in US politics.

Meanwhile, the secretary of state

defends the alleged quid pro quo as

routine diplomacy. “If you can help

with X, we’ll help you achieve Y”, he

says, not spelling out what each letter

might denote.

It will not just be allies who notice

this transactional cast of mind. Rival

powers might wonder if they can neu-

ter Mr Trump by giving him political

help. Democrats already suggest the

president will do a soft trade deal with

China in return for who knows what.

But then competing countries will

always try to work the angles against

each other. Allies count on a level of

trust. Mr Trump’s alleged conduct

plays havoc with it.

The impeachments of Andrew John-

son and Bill Clinton, as well as the

forced resignation of Richard Nixon,

were domestic matters. They started

and ended in America. As tawdry as

they were, they did not sap the coun-

try’s underlying credibility in the

world. They drained one person’s.

Would that the present scandal were so

contained.

Trump’s alleged conduct could have lasting geopolitical effects

Allies confront a less

reliable America

Without clients, there is

no money to pay workers

If you read Leo Strine’s op-ed “Workers

must be at the heart of company

priorities” (October 2), you might

forget it was just 30 years ago that the

Berlin Wall came crashing down.

It seems that everyone from Ray Dalio

to Larry Fink has become a self-

loathing capitalist, searching their

consciences and desperately trying to

be woke.

Mr Strine’s assertion that workers

have become “forced capitalists”

because tax rules “demand” that

employees put their money into

retirement and educational plans is

completely wrong: these are entirely

voluntary benefits. He also claims that

99 per cent of Americans’ wealth is

derived from their jobs, when it is

actually made up of their houses and

investments.

Mr Strine is a lawyer who has held

only lawyerly jobs, so I can forgive his

idealism that corporations should be

forced to put their employees first by

“requiring better disclosures”,

strengthening unions, taxing share-

dealing and asking institutional

investors to “align their voting

policies”.

The reality is that nearly 50 per cent

of people in the US work for small

businesses: restaurants, dental clinics,

stores, yoga centres, etc. It is within

this sector that most new jobs have

been created over the past decade.

Running a restaurant requires a

delicate trade-off between truculent

chefs, temperamental waiting staff,

litigious landlords, tardy food suppliers

and greedy bankers.

The heart of any good business is its

clients.During the 1990s, I witnessed

first-hand how the socialist countries of

eastern Europe rejected closed

economies focused on mass

employment (and low innovation) to

become client-centric, market-driven

ones, where people were free to make

their own decisions. There are many

improvements we can make to redress

the current imbalances in corporate

America, but we must always put

clients first. During the 1970s, General

Motors (under union pressure) put its

employees first. Wages doubled and

quality halved. A bankrupt Detroit was

the result.

Aron Miodownik

Cambrian Consulting,

New York, NY, US

It’s for the regulator to

assess transfer risks

Lex avers that the decision to block the

transfer of customers from one insurer

regulated by the Financial Conduct

Authority to another FCA-regulated

insurer is “in industry and consumer

interests” (“Prudential/policy

transfers: switch snitch”, October 3).

This, seemingly, implies some doubt

about the efficacy or impartiality of the

regulator, as does the suggestion that

the transaction could be “perilously

close to mis-selling”. Surely it is for the

regulator to assess the present and

future risks of the proposed transfer?

Mark Wood

Former Chief Executive, UK & Europe,

Prudential

Demand for many consumer products comes from India’s villages Alamy—

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