By Takashi Yokota

These should be thrilling days for the Democratic Party of Japan. As of press time, polls showed it cruising toward a crushing victory in Sunday's elections, with projections that it would win up to two thirds of Japan's Parliament and decisively end the 54-year reign of the Liberal Democratic Party. But don't expect the festivities to last long. For one thing, the Democrats' mandate isn't nearly as strong as it seems--most Japanese supported it only to reject the LDP, and surveys show that 64 percent of the country has low expectations for the winners. No wonder: the party is full of political novices, with freshman politicians making up half the DPJ's candidate list--which means they may have a tough time governing effectively.

Even more worrying is the possibility that a "shadow shogun" will take over and fracture the DPJ. Ichiro Ozawa, once the party's top boss, resigned in May after an alleged fundraising scandal, but has stayed busy mentoring young DPJ candidates. With many of those protégés now in office, he could regain enormous political clout and leverage over the prime minister. For some DPJ loyalists that's a frightening scenario, since Ozawa is often referred to as "the destroyer" of political parties: he's founded three of them in the past two decades, and all have disintegrated. Ozawa's disruptive tendencies--should they resurface--could fissure and hamstring the party, souring this week's festive mood.

It's been a rough international debut for the Scots. In the 10 years since the country won the right to limited self-rule, Scotland has barely figured on the world stage; foreign affairs remain firmly in London's hands. But then came the decision to free Libyan intelligence officer Abdelbaset Ali Mohmed al-Megrahi--and the ensuing transatlantic diplomatic disaster. The release of the terminally ill prisoner, convicted of bombing a U.S.-bound Pan Am flight in 1988, sparked a firestorm of criticism. American politicians, including Secretary of State Hillary Clinton, lined up to condemn the move. Angry citizens in the U.S. threatened to boycott Scottish products. Opposition politicians at home blasted the government for tarnishing the country's good name and blowing its big moment. 

But rather than make Scots lose all faith in their leaders, the international mudslinging may have the paradoxical effect of stiffening Scottish spines.

[MORE AFTER THE JUMP]

Noticed chilly relations between Australia and China recently? According to Prime Minister Kevin Rudd, the problem may have deep roots. As he recounted yesterday to university students about an early experience in his diplomatic career:

"Apparently, what I'd said as I sought to elevate his expression into a more classical form, was that China and Australia are currently experiencing fantastic mutual orgasm," he said, delivering a speech late Thursday.

"Ever since then, our Chinese friends have remembered my visits to Beijing, (saying) 'Ah, you were the one...'," added Rudd.

"Perhaps that explains some of the challenges in our current relationship with the Chinese."

Say what you will about him, but Silvio Berlusconi is a man of his word. This morning, the 72-year-old Italian prime minister's lawyer announced that Berlusconi is making good on his promise to pursue legal action against the myriad media outlets that have delighted in publishing photos and accounts of sexual antics that would make Jean-Claude Van Damme blush. Per Reuters, he is filing libel suits against newspapers in Italy, France, Spain, and Britain. The charges:

Lawyers acting for Berlusconi had sued the French weekly Nouvel Observateur for a story headlined "Sex, Power and Lies" and Spain's El Pais for publishing photos of guests at the billionaire premier's Sardinian villa cavorting naked.

In Italy they have sued La Repubblica, a tireless critic of the conservative leader, for repeating the Nouvel Observateur story and for defaming Berlusconi by repeating daily its "10 Questions" about his private life and political aspirations.

[British papers, which could also face lawsuits,] have taken a special interest in the scandals over Berlusconi's relationship with a teenage girl, prostitutes and divorce from his second wife.

Where does one even begin? This WON blogger is not normally sympathetic to tabloid-like obsessions with leaders' private doings. And she is certainly not eager to hear the gory details. But Berlusconi's offenses are no ordinary affairs. While some politicians keep their sexual politics in the bedroom, Berlusconi has made a consistent point of tying a woman's worth to her sexuality; as one female Italian academic pointed out in the NYT yesterday, he's appointed former starlets to government posts, flirted with female officials, and boasted about the physical features of his party's candidates.

Indeed, at the very same time he was filing his lawsuits, he presented the world with yet another case in point. Berlusconi's people also announced that he nixed a potentially awkward meeting with the Vatican's No. 2 man in the earthquake-hit city of L'Aquila, less than three hours before it was set to happen. Why? It may have something to do with the fact that Berlusconi was planning to participate in a religious service for─wait for it─the remission of sins. It may also have to do with the guest he chose to bring with him to the ceremony: Mara Carfagna, his equal-opportunities minister, a former model and TV personality to whom the premier once publicly professed: "If I weren't married, I'd marry you."

To recap: A man already rebuked by the Vatican for his behavior. Bringing his crush. To a religious ceremony on sin. In a town recently devastated by an earthquake. The man is his own worst enemy.

What's more, his was no ordinary reaction to tawdry media coverage. Berlusconi owns Italy's leading private media networks. Not surprisingly, his television stations are a case study in female objectification, showing scantily clad women as decorative sidekicks to older, fully dressed, authoritative men. Privately, that's his prerogative. But given how extensive his media holdings are─and how much of the news he controls through those television, magazine, book, and newspaper holdings─Berlusconi's legal offensive seems to have more to do with a sense of entitlement in exerting control of his message than with any substantive concern about truth and libel.

In closing, here is a humble suggestion for the prime minister: if you’d like newspapers to stop running photos of you cavorting with naked 20-somethings, please, for everyone's sake, stop cavorting with naked 20-somethings. When sex is an integral part of your politics, it is fair game in the news cycle. Basta, Berlusconi.

Today, Hitler gets a new reason to throw one of his epic meme-making temper tantrums: he's missed the market bottom.

Sadly, this incarnation of the meme is surely one of his lesser efforts. For one, it's about a bull market, not the Cowboys getting gloriously pummeled by the Giants (obviously, I'm biased). More egregiously, though, a slide at the very end makes it clear that the meme has been co-opted by an investment company trying to convince people to, well, invest. It seems Shares Property Money, the website behind the video, has turned Hitler's rant into a long advertisement for their investment strategies DVD.

Shameless though it may be, still, they have a point. The video is making the rounds in investor circles, with some saying it perfectly captures the mood of the folks in the know about the markets. Sure enough, smart bulls like Barton Biggs do think people should be in the market now. But before you go stocking up on investment DVDs, just remember: smart bears like Nouriel Roubini are also still warning of a double-dip recession.

A number of colleges had complained about the campaign, on the grounds that, among other things, it sends the wrong message about drinking. “We think it’s an ill-conceived and inappropriate campaign that runs counter to our collective efforts to combat underage drinking,” a spokesman for Boston College told the Associated Press.

On its face, restricting the ability of beer makers to target college students directly seems like a fine idea. After all, the logic seems to go, these people are old enough to be away from home, but not quite old enough to make responsible decisions.

But if college students aren’t quick-witted enough to see past colored beer cans, can we really trust them to navigate the slick marketing campaigns of other dangerous products? If we’re going to treat college kids like kids, then beer isn’t the only product that ought to have its marketing wings clipped by those who know what’s best. Here’s a list of products that get marketed to college students every day all across the country.

Cigarettes

Last year, the American Lung Association reported that after 1998, when the tobacco industry signed an agreement with 46 states that restricted tobacco advertising, the industry began targeting college students by spending more money on promotions in bars and nightclubs where those students spend time. In a 2000-01 survey, students at 115 of the 119 schools studied said they saw tobacco promotions at a bar or nightclub.

Moreover, those promotions seem to work. According to a 2004 paper by researchers at Harvard, students who were exposed to those promotions were more likely to smoke than those who didn’t.

Should society be concerned about Big Tobacco targeting college kids? You bet: according to the ALA, fully half of occasional college smokers were still smoking four years later.

Online Poker

A study by the Annenberg Public Policy Center last year suggested that a little more than 3 percent of American males between the ages of 14 and 22 play online poker for money at least once a month. Nationally, that means more than 700,000 Americans in that age group gamble online for money at least once a month—and 300,000 at least once a week.

Are online gambling sites targeting college students? They’d be crazy not to.

“Win Your Tuition Now,” shouts the Web site for the Absolute Poker College Challenge, adding, “Introducing the biggest college competition since beer pong.” By entering a free online poker qualifier, students are told they can get a chance at $40,000 in prizes.

According to a 2006 report by the Oregon College Problem Gambling Awareness Program, “Internet gambling sites are increasingly marketing directly to college students.” If college students can’t be trusted not to drink too much, shouldn’t we be worried about them gambling too much?

Credit Cards

The site FindCollegeCards.com offers a handy list of credit cards aimed specifically at college students. That list includes Citibank’s Card for College Students (no minimum income required!) and Discover’s Student Card (available in a catchy monogram edition).

Is there a problem with credit-card companies marketing directly to college students? Some government officials think so. Last year, New York State Attorney General Andrew Cuomo investigated agreements between credit-card companies and colleges in the state, allowing what he called “extremely aggressive” marketing practices.

In May, President Obama signed legislation that among other things restricted the ability of credit-card companies to offer credit to those under 21, making them first make sure students can pay or get their parents’ permission. But without a stronger government push against marketing to college students—who are, after all, these companies’ next generation of clients—it’s hard to imagine that credit-card companies will stop.

Each of these products is arguably as dangerous to students’ well-being as alcohol. Yet all of them are marketed at college students. If we’re going to be paternalistic, let’s at least be consistent.

Photo: AP / Raphael G. Satter

 

You know how you can choose which language you'd like your ATM to use in guiding you along to your cash? Apparently, in East London, you can now choose Cockney slang.

Check out this take on troubles brewing at General Motors' German Opel unit, from our European economic correspondent, Stefan Theil. Is this the beginning of a new union stand in Germany?

The Germans upped the pressure on General Motors today, trying to force the automaker to agree to a plan brokered by German chancellor Angela Merkel that would spin off GM’s struggling German Opel unit to a Russian-Canadian consortium. If it doesn’t sell, GM will face “civil restistance” at its German plants, the head of Germany’s powerful industrial union IG Metall, Berthold Huber, warned today. As a warning shot, union officials representing Opel's 25,000 German workers have withdrawn an earlier agreement to slash vacation bonuses, which could hit GM with a big bill for back pay next month. This weekend, Opel workers will demonstrate in front of the U.S. embassy in Berlin. The barrage came after leaked reports that GM was exploring other options, including holding on to Opel.

On the surface, the battle is over how to save Opel, kept precariously afloat by a $2 billion subsidy from German taxpayers. For years, the Germans have blamed Detroit for allegedly mismanaging Opel, whose dowdy, down-market cars have long been the least regarded brand in the land of sleek Audis, Mercs, and Beemers. There’s even a German children’s rhyme, “Jeder Popel fährt ‘nen Opel,” that roughly translates as “every snothead drives an Opel.” All but unanimously, German politicians and commentators have jumped at the chance to rid Opel of its unloved American masters. Under the German plan, 55 percent of Opel would be split between the Russians and Canadians for a total of 700 million dollars, 35 percent would stay with GM, and 10 percent would go to Opel’s workers. The workers’ shares would not be directly held by employees but be parked in a separate entity controlled and supervised by union functionaries.

This, of course, is the real agenda behind IG Metall’s ever-shriller threats. Not only would the union get a slice of a company whose assets – factories, R&D, dealers’ networks - are still estimated by analysts to be worth some 20 billion dollars. Much more importantly, however, Opel would set a huge precedent for IG Metall’s plans for a revolution in German corporate governance, giving workers majority control of potentially all major German companies. That’s because German corporate law already requires all companies that employ more than 2000 workers to give 50 percent of the voting seats on corporate supervisory boards (which appoint managers, supervise finances and approve strategic decisions) to workers’ representatives. Shareholders – i.e. the company’s owners - have a tie-breaking vote. A 10 percent block of Opel shares controlled by the union would thus add further union votes on the shareholder side, giving workers control of the company. IG Metall’s Huber has lately tried to push this model on other companies squeezed by the economic crisis, hoping they will be trade shares – and thus control – for pay freezes and other union concessions.

As German politicians and commentators keep busy bashing GM and Washington for not giving in to Berlin’s demands, and as Germany’s largely apolitical business community stays out of the fray for fear of influencing the final leg of Germany’s election campaign, it looks like the very future of Germany's economic system will in no small part be decided over the next few weeks in Detroit.

Rising foreclosures, unemployment near 10 percent, a $1.5 trillion budget deficit, and Americans are actually feeling better about things? Apparently so. According to The Conference Board’s latest Consumer Confidence Index, American consumers are more bullish on the future of the U.S. economy then they’ve been since December 2007, which is the exact month this whole Great Recession thing got started. The Confidence Index, which had retreated in July, bounced back in August and now stands at 54.1, up from 47.4 in July. When it comes to the present situation, consumers are less excited, 24.9 compared to 23.3 in July. Looking forward though, our expectations are considerably higher, up ten points from 63.4 in July to 73.5.

The survey is based on a sample of only 5,000 U.S. households, many of which surely got some cash for their clunker in the last month. Survey officials say the uptick is due to “consumers’ assessment of the job market.” Funny how losing 3.8 million jobs between November 2008 and April of this year, makes losing 1.2 million from May to July look like progress. The good consumer news, coupled with President Obama’s reappointment of Fed Chairman Ben Bernanke, goosed the stock market this morning, with the Dow Jones up 96 points at 10:30 am.

Let’s not get too carried away though. Consumer confidence is still depressed, though it has roughly doubled since bottoming at 25 in February, the lowest it’s ever been since The Conference Board started tracking it in 1967. Until last fall, consumer confidence hadn’t been below 50 since February 1991, the same month that American ground troops crossed into Iraq from Saudi Arabia, and U.S. unemployment rate was 6.6 percent. And of course we’re still light years away from a record high of 142 in September 2000, the tail-end of the dot-com boom.

Jones’s warning has since come to look prescient. Over the weekend, American military commanders told Richard Holbrooke, the administration’s special representative for Afghanistan and Pakistan, that they don’t have enough troops in Afghanistan to do their job. But with popular support for the war falling, the Obama administration will be hard-pressed to provide more troops—which makes Jones’s comments about the importance of economic development all the more important.

So how well is the administration following his advice? The record is mixed.

[MORE AFTER THE JUMP]

Just imagine the rumors swirling around a certain medium-security prison in Butner, NC right now. This morning, via the New York Post, we learned that legendary Ponzi schemer Bernard Madoff is dying of cancer, befriending the prison's "homosexual posse," and stripping off his shirt to participate in Native American religious purification ceremonies at a "sweat lodge." We also learned that some prisoners are regularly cooking sandwich wraps for him.

Then this afternoon we learned via the federal Bureau of Prisons that the story is "full of inaccuracies" and Mr. Madoff is not suffering from cancer.

And then again this afternoon, we learned that the Wall Street Journal checked with its sources and concluded that Mr. Madoff does have cancer. (No word on the Native American rituals, sandwiches or homosexual posses.)

What does it all mean?  As my colleague Nick Summers reported back in June, a cottage industry of prison consultants stands ready to help clients navigate such unexpected twists and turns of life behind bars. According to John Webster, who runs National Prison and Sentencing Consultants, if Mr. Madoff has taken to hanging out with small groups of minorities, that probably means he isn't exactly thriving at the top of the prison food chain.

"It's probably because everybody else just doesn't care for him," says Webster. In the prison hierarchy, those who steal from the elderly rank just a small step above child molesters. If he is indeed getting free sandwiches, says Webster, it's probably not because everyone wants to be his friend.  "If I were him, I would be wary of accepting favors from people," he adds.

Developing...

Porsche headquarters were raided by German investigators on Thursday under suspicion of insider trading by former CEO Wendelin Wiedeking, ousted last month following an epic takeover battle in which the luxury carmaker almost swallowed Volkswagen - Europe's largest carmaker and more than ten times Porsche's size - before VW turned the tables and is now set to gobble up Porsche instead.

In trying to buy up Volkswagen, Wiedeking had accumulated 43 percent of VW's shares but secretly held options on another 32 percent. Porsche did not disclose the options until October 2008, roiling the markets. The company said yesterday that the trades were perfectly legal under German law.

Under Wiedeking, Porsche turned itself into something like a hedge fund that happened to make fast cars. In the first half of the company's accounting year that ended March 31, Porsche reported $9.5 billion in profits from trading Volkswagen shares, versus the $700 million it earned by selling $4.2 billion worth of cars.

[MORE AFTER THE JUMP]

If you don't have something nice to say, you probably shouldn't say it at all. And if you're a senior diplomat at the United Nations, you certainly shouldn't write it.

But write it she did. Mona Juul, Norway's No. 2 at the U.N., wrote a confidential internal memo slamming Secretary-General Ban Ki-moon's leadership as weak, ineffective, lacking in charisma, and—more often than not—just plain absent. Yesterday, the memo leaked to the Norwegian press. Ms. Juul, on vacation with her husband, was unavailable to mop up the mess.

[MORE AFTER THE JUMP -- INCLUDING FULL TEXT OF LEAKED MEMO]

If you're chairman of the Federal Reserve, you don't get paid to spread gloom and doom. So, not surprisingly, Ben Bernanke had some uplifting things to say in today's speech at the Kansas City Fed's economic conference in Jackson Hole, Wyo. The economy is "beginning to emerge" from its deep global recession, he said. A year from now, we will have seen "substantial progress" toward a sustained economic recovery. Standard boilerplate.

But there was reason to take note. Bernanke's speech constituted his most extensive and aggressive argument that the Fed's actions—along with those of other central banks and government agencies—had averted what could have been another Great Depression. Almost simultaneously, the announcement of an unexpectedly large 7.2 percent increase in sales of existing homes in July seemed to vindicate optimism—and the stock market reacted accordingly, with the Dow closing up 1.6 percent to more than 9500. Victory, it seems, has been snatched from the jaws of disaster.

Still, with Bernanke's term as Fed chairman expiring in January, it's hard to read this speech just as an analysis of the crisis.

[MORE AFTER THE JUMP]

Poor Blackwater. They've tried a name change. They've kept a low profile. But still, they can't seem to keep themselves out of trouble.

Just when you think our days of howling over the misdeeds of private mercenary armies are behind us, the New York Times goes and exposes even more of their failings. This time, if you haven't heard, it's because the pre-Panetta CIA had been throwing everybody's favorite secretive military contractor unknown millions of dollars for a program designed to assassinate top Al-Qaeda operatives. Seven years and zero dead Bin Ladens later, I'd say it's safe to call this one a dud--and that's, seemingly, the conventional wisdom on Blackwater overall.Still, there was once a time when they were the hottest thing in Washington. Just for a quick refresher, here's a short timeline of Blackwater/Xe's rise and fall from grace:

January 1997: Blackwater is founded in North Carolina by former Navy Seal Erik Prince, who uses inherited money from his father's auto parts company to convert 6,000 acres of land into a state-of-the-art training ground rented out by local and federal government agencies. Prince's family was the major funder behind the conservative Family Research Council, where he had interned before moving on to a spot in the senior Bush's White House.

[MORE AFTER THE JUMP]

If great world powers own the high seas, it's no surprise that as India grows, it is ramping up its naval ambitions. India's Coast Guard recently acted on U.N. sanctions to apprehend a North Korean ship suspected of carrying illegal cargo. That naval bravado came on the heels of India's work last year to protect the Gulf of Aden from Somali pirates and its sinking of what it called a pirate "mother ship." The country has also announced plans to procure 100 new vessels over the next 10 years and recently christened its first home-built nuclear submarine. "They are projecting power and flying their flag a lot further from home," says Alex Pape, a naval-affairs analyst at Jane's, the research group.

Yet India faces many challenges before it could become a true maritime power. Its fleet is aged: its only aircraft carrier was built in the 1950s, and the new one bought from the Russians won't be delivered until 2012 (four years late) and at a cost of $2.8 billion (double the original agreement). More crucially, India lacks shipbuilding infrastructure. That's in contrast to China, which has developed its industry to the point where it can build ambitious new warships itself. A stronger Indian Navy may be on the horizon, but it'll be rough seas to travel there.

Just call him Huckabee the Macabee. That's the nickname former (future?) Republican presidential hopeful Mike Huckabee earned himself this week, after he essentially nixed the widely accepted goal of a two-state solution to the Israel-Palestine dispute. While on a three-day tour of Israel, hosted by a group of far-right settlers group who took him to some of the most contentious spots in the land, Huckabee dismissed the notion that there could be a Palestinian state "in the middle of the Jewish homeland" as "virtually unrealistic," according to AP reports.

It's a sharp disagreement with, well, pretty much everyone. For two decades, politicos earned their moderate stripes by shouting their commitment to partitions and 1967 borders. That even includes hyperconservative Israeli Prime Minister Benjamin Netanyahau, who, despite talking the hardline talk all year, was shown yesterday to have been quietly rejecting applications for new settlement projects in the West Bank (although so-called natural growth of existing settlements is still kosher).

But there are those who think the region would be better off with only one state, and they're getting second looks as the momentum behind two-state negotiations has fizzled. Most—OK, all—are on the fringes of both left and right, and some are wackier than others. But it's getting harder to know what a fringe really is when proclaiming the moderate mantra has become, as FP's Stephen Walt put it, a fig leaf for inaction. Do you know who's on board? Here's a rundown of the politicos who have hinted that they think two-state plans are passé:

Dick Armey: The former House majority leader told Chris Matthews in 2002 that he thought Israeli leaders should kick Palestinians out of the occupied territories, which could then become permanent parts of the state of Israel. "I'm content to have Israel grab the entire West Bank. I'm also content to have the Palestinians have a homeland, and even for that to be somewhere near Israel," he said. To which Matthews replied: "Well, where do you put the Palestinian state, in Norway?"

Gary Bauer: An adviser in the Reagan White House, Bauer inserted himself into the intifada in 2002, after Israeli officials had sent military forces into the West Bank to target Palestinian suicide-bombing networks. To the dismay of the White House, he critiqued Bush for pressuring Israel to withdraw once their operation finished up. Instead, he suggested, Israel should "do everything it can to drain the swamp that is producing these murders."

Muammar Kaddafi: On the other side of the fence, the Libyan president editorialized in The New York Times this January about the failure of two-state efforts and the promise of a single secular democratic state named Isratine. Yes, that's right. Isratine.

Ahmad Samih Khalidi: A Palestinian adviser to the negotiating teams back in the '90s, Khalidi wrote a column for The Guardian in 2003 proposing a single "one-man, one-vote"-based state west of the Jordan River. "Both sides can maintain their 'right of return' without this being at the expense of the other, and Israeli settlers would not need to be removed from where they are today," he wrote. "Jerusalem could truly become the shared capital of a unitary Arab-Jewish state."

Alon Pinkas: A former consul general of Israel in New York, Pinkas has suggested that the two-state solution is "very near death." He's dead set against the alternative, a binational one-state solution, but warns that it may become the inevitable political reality. "While the two-state solution is a wonderful idea, it is losing its appeal and becoming less and less viable as Israelis and Palestinians drift apart."

By Mohammed J. Herzallah 

A few rays of light have been poking through the gloom surrounding the U.S. housing market. Sales of existing homes rose 3.6 percent in June from the month before, while prices fell just 0.2 percent between April and May. It’s enough for some analysts, even Federal Reserve chairman Ben Bernanke, to say we’re near the bottom. But others believe these slight improvements are just temporary, and there’s plenty more downside. The fundamentals—default rates, employment, and year-over-year trends—remain cloudy. And one of the most vital fundamentals, the ratio between supply and demand, is still out of whack. At current selling rates, the U.S. in June had 9.4 months of inventory on the market, compared with 4.4 months in June 2005. That’s why a growing number of economists believe drastic measures are needed to truly cure housing.

Finding good news in the global financial crisis takes dedication and a microscope, but a small light now shines from an unlikely place at an even more unlikely time. It’s one of the givens of development that general economic woe is the enemy of the poor, who are, by definition, society’s weakest link. All the more so in a global economic meltdown that has, in a matter of months, erased decades of savings, destroyed jobs, and reversed poverty alleviation across the world. Now Brazil, known for its gnawing poverty, may be challenging this grim rule.

It’s not that the last are now first. But the distance between the penthouse and the poorhouse in one of the developing world’s most skewed societies has stopped growing and, by optimistic measures, may even be shrinking. Recent numbers from the Brazilian economy show that, thanks to a surprisingly resilient internal market and also to aggressive government stimulus spending, the poor have fared less miserably in the recession than might have expected and less miserably in Brazil than elsewhere.

[MORE AFTER THE JUMP]

The secret to turning a poor nation into a rich one can't be found in a World Bank report. It wasn't hatched in the corridors of the International Monetary Fund, either. It came from the British Empire.

That is one way, at least, of interpreting Stanford economist Paul Romer's new plan for turning economically backward countries like Cuba into engines of growth like China. Experts have long known that the traditional tools of development don't work: free trade, foreign investment, and charity have failed as many countries as they've helped. The rot in a dysfunctional country is at its core—in the laws, institutions, and informal rules that govern daily life.

How to fix a problem so fundamental? Let a rich country take over part of a poor one. The hope, says Romer, is that the superior norms of the developed country will take root abroad. He calls his plan Charter Cities...

[MORE AFTER THE JUMP]

Being poor is expensive.

Take, for example, one service targeted at the down-and-out: payday lending. Drive past any dusty suburban strip mall and neon lights flicker the promise of a “Cash Advance Here.” Payday lenders provide very small and very short-term loans (often just a couple hundred dollars for a week or so, until the next paycheck arrives). They’re not for everyone, but for families living from one paycheck to the next, these loans are sometimes the only way to keep the lights on.

Payday loans have long been vilified by politicians and the media because of their exorbitant fees. A two-week loan for $300 can easily carry $50 in fees and interest. That’s a compounded annual interest rate of 5,403 percent. And because the borrowers can be desperate for cash, payday lending has become nearly synonymous with words like “usury” and “predation.”

A London-based company, Wonga, wants to change that image.

[MORE AFTER THE JUMP]

By Andrew Bast
America is learning to love the United Nations all over again. After several years of flagging support, a new Pew Global Attitudes Project poll reports that 61 percent of Americans--up from 48 percent two years ago--hold a favorable view of the organization. Why the spike? The first, obvious answer: Barack Obama. 

Four years ago, on the heels of the Oil-for-Food scandal, George W. Bush appointed John Bolton U.N. ambassador. It was an antagonistic move: Bolton was known for suggesting that 10 floors be lopped off U.N. headquarters. There was "relentless, negative pressure on the U.N.," says Timothy Wirth, former senator and now president of the U.N. Foundation. Obama made an abrupt about-face, installing Susan Rice as ambassador and raising her position to cabinet rank, and placing international cooperation at the center of his foreign policy--and American attitudes have clearly followed suit.

 [MORE AFTER THE JUMP]

With both the price of oil and the Moscow Stock Exchange having roughly doubled in value over the past six months, Russia's leaders are downright bullish. Prime Minister Vladimir Putin has refused to make deep cuts in government spending, choosing instead to rely on $200 billion of saved up oil money. He recently told banks to increase lending and lower rates in order to signal the end of the crisis.

Don't be fooled: Russia's still reeling from the commodities crash, and things are poised to get worse before they get better.

[MORE AFTER THE JUMP]

During a recent trip to Japan, New York University economist Edward Lincoln was surprised to find executives at Toyota wringing their hands─not about sales, which were down 27 percent since the beginning of the year thanks to the global recession, but about their new position as the No. 1 automaker in the world. They nabbed the top spot last year after GM imploded. But Lincoln says that the Japanese automaker has come to realize that being the top dog means that you have to set the agenda for the rest of the industry, and also fend off all the people trying to knock you off the podium─a tough spot to be in

[MORE AFTER THE JUMP]

It takes about half an hour to ascend the well-paved highway from bustling Irbil to the mountaintop villas and elite homes where Kurdish leader Massoud Barzani, president of the Kurdistan Regional Government (KRG), lives. It may be that from those heights that the intricacies of compromise do not come easily. Barzani has made a series of defiant statements to reporters lately about relations with Baghdad and the tangled and emotional issue of who should rule the oil-rich, mostly Kurdish city of Kirkuk.

[MORE AFTER THE JUMP]

If she felt so inclined, Hillary Clinton could probably take it easy in Africa this week. That's what the numbers seem to imply, anyway. U.S. leaders enjoy some of their highest job performance ratings there, up even further from their dizzying heights during the Bush administration, according to a Gallup poll released Monday.

In Kenya, for example, where she kicks of her seven-country tour of the continent on Wednesday, 93 percent of the population approves of U.S. leadership. That's up from 82 percent last year. Among the seven countries surveyed, the median approval rating sits happily at 87 percent, up from 80 percent last year.

Not surprisingly, a lot of that has to do with Clinton's boss. Africans are enormously excited about the Obama presidency. Obama earned himself even more goodwill with his recent stop in Ghana. And the fact that Clinton's trip this week is the longest she's taken since assuming her diplomatic post earns the administration even more brownie points.

But even with all that good cheer in the air, Clinton is in for a bumpy ride--and that's largely her own doing.

[MORE AFTER THE JUMP]