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EDITORIALS ELSEWHERE

on September 29, 2013 1:09 AM

Excerpts from recent editorials in newspapers in the United States and abroad:

Anniston, Ala., Sept. 23, The Anniston Star on the Keynesian approach:

Are we, to borrow a bit of a phrase from Milton Friedman, “all Keynesians now?”

Probably not.

There are those, like former U.S. Rep. Ron Paul of Texas, who have pointed to their brand of fiscal conservatism and contended that “we are all Austrians now.” It’s a tip of the hat to the school of economics that is more in line with his thinking than the followers of John Maynard Keynes.

Keynes argued, among other things, that in the short run a depressed economy can be stimulated by an infusion of capital by a central bank and/or complementing actions by a central government.

This can be seen in practice in the Federal Reserve’s decision last week to spend billions buying bonds in order to keep interests rates low, which makes borrowing money more attractive and, in this time of lackluster economic growth, helps to spur investment.

However, the Keynesian express seemed about to end as word spread before last week that the Fed would begin to slow its buying. ...

U.S. Stock Exchange investors had been particular nervous, so when the Fed announced that it had met with central bankers who promised to continue loaning if the government would continue to buy bonds, the stock market responded just as Keynes said it would.

Investors invested and the Dow Jones Industrial Average set a record last week. Some of that gain was erased the next day, as investors cashed in their gains, but for the moment at least the Keynesian approach seemed to work as predicted.

Add to this the unexpected rise in the sale of previously owned homes and the arrival of lower-than-expected unemployment reports and it was a pretty heady time on Wall Street.

No one expects the Fed to continue to buy bonds at this rate, but the Keynesian approach has given the economy a boost as well as a little more time to recover. That was what Keynes predicted in the first place.

New South Wales, Australia, Sept. 24, The Australian on Kenyan atrocity a wake-up call:

The slaughter of innocent men, women and children perpetrated by Islamic militants at the Westgate Shopping Mall in Kenya, a country that is a longstanding and important Western ally, should leave the international community in no doubt about the dire consequences when failed states are allowed to become breeding grounds for terrorism.

Somalia, the wreck of a country on the Horn of Africa from which the evil, al-Qaida-affiliated al-Shabab thugs responsible for the massacre emanate, has lacked stability since the regime of General Siad Barre, a Soviet toady, lost power in 1991.

In the ensuing anarchy — with the international community unable and unwilling to do much — the worst forms of malevolent Islamic extremism have spawned and thrived, leading to the attack by the al-Shabab terrorists. ...

Kenya, which has 4,000 soldiers in Somalia as part of an African Union military force battling to restore security to Somalia, is the al-Shabab terrorists’ immediate target, but Nairobi needs help and the international community should be unhesitating in coming to its aid because the threat posed by the Somali terrorists could spread beyond Africa. ...

Recently, perceptions had grown that al-Shabab was losing ground.

Senior U.S. officials claimed the Islamist group was on the run after staging a tactical retreat from Mogadishu, the Somali capital, and losing control of the port of Kismayo from which they launched their piracy and kidnapping attacks on the east African coast.

The horror perpetrated in Nairobi shows the optimism was misplaced.

Such atrocities cannot be tolerated and the international community cannot turn a blind eye. It is to the credit of the African Union that it is leading the way in seeking to deal with al-Shabab, but far more than Africa’s interests are at stake in the battle. As the death toll in the Nairobi massacre again shows, Islamic terrorism threatens us all, and the international community must do all it can to confront it. Somalia’s chaos and the terrorism it has spawned as a failed state was allowed to fester for far too long.

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