Has America really escaped inflation? - The Economist | Another war could break out on the Israel-Lebanon border - The Economist | Imran Khan warns that Pakistan’s election could be a farce - The Economist | Gao Yaojie uncovered a scandal that shocked and shamed China

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Has America really escaped inflation? - The Economist

At some point American economic growth will disappoint expectations. For now, though, it appears to have ended 2023 much as it passed the previous few years, with yet another expansion that defied forecasts. Recent data suggest that the economy grew at an annualised pace of 2.5% or so in the final three months of the year, more than twice the median expectation of analysts at the start of the quarter.

Although such momentum is welcome, it complicates the outlook as the Federal Reserve contemplates when to start cutting interest rates. America’s strength is broad-based. Investment in manufacturing facilities has soared to record highs, propelled by the Biden administration’s subsidies for electric-vehicle and semiconductor production. Elevated mortgage rates have led to big falls in sales of existing houses, but property developers have responded to the dearth of single-family homes on the market by ramping up building. The government has remained a backstop to growth—albeit a worrying one from the standpoint of long-term fiscal sustainability—with its deficit running at about 7% of GDP, which is virtually unprecedented during peacetime without a recession.

Most important of all, American consumers have remained indomitable, defying expectations of a retrenchment in personal spending. Two factors help explain their resilience. The stash of savings accumulated by households during the covid-19 pandemic, thanks to the government’s fiscal largesse, has continued to offer them a buffer. Economists at the Fed’s branch in San Francisco reckon that households had about $290bn of excess savings, relative to the expected baseline, as of November. Moreover, the tight labour market has led to robust wage growth, especially for lower-income workers, who, in turn, have a higher propensity to spend. As inflation has come under control their real wage gains look even more substantial.

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Another war could break out on the Israel-Lebanon border - The Economist

T he bright winter sun playing over caves in the pockmarked cliffs and the views out over the Mediterranean are idyllic. Yet look more closely at the seemingly peaceful view from the point where Israel’s border with Lebanon meets the sea, and menace lurks. Naval patrol boats loiter close to the shore, their guns bristling in readiness. A normally popular tourist attraction is deserted save for armoured vehicles. A short drive up the wooded mountainside just south of the border fence reveals dozens of camouflaged bivouacs where paratroopers of the Israel Defence Forces (IDF) have been deployed since October 7th, the day of a devastating surprise attack by Hamas on Israeli communities and army bases in the south.

Though the scenery is tranquil, the risks are rapidly mounting of a full-blown war between Israel and Hizbullah, the Iran-backed Lebanese party and militia. Especially since a blast on January 2nd in Beirut’s Dahiye neighbourhood, Hizbullah’s main stronghold. The explosion, attributed to an Israeli drone strike, killed Saleh al-Arouri, a senior Hamas leader close to Iran, as well as several other commanders. Hizbullah responded by saying the killing would not go without “punishment” and that it has its “finger on the trigger”. Even before this strike, some European officials worried that the front could erupt within days or weeks.

Adding to the tension and uncertainty were two explosions on January 3rd in the Iranian city of Kerman that killed about 100 people near the tomb of Qassem Suleimani. Many of them had gathered to mourn the commander of the Quds Force, the foreign-operations wing of Iran’s Islamic Revolutionary Guard Corps (IRGC), who was assassinated in an American strike four years ago. Iran first blamed “terrorists” and then America and Israel for the latest blasts.

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Imran Khan warns that Pakistan’s election could be a farce - The Economist

TODAY PAKISTAN is being ruled by caretaker governments at both the federal level and provincial level. These administrations are constitutionally illegal because elections were not held within 90 days of parliamentary assemblies being dissolved.

The public is hearing that elections will supposedly be held on February 8th. But having been denied the same in two provinces, Punjab and Khyber Pakhtunkhwa, over the past year—despite a Supreme Court order last March that those votes should be held within three months—they are right to be sceptical about whether the national vote will take place.

The country’s election commission has been tainted by its bizarre actions. Not only has it defied the top court but it has also rejected my Pakistan Tehreek-e-Insaf (PTI) party’s nominations for first-choice candidates, hindered the party’s internal elections and launched contempt cases against me and other PTI leaders for simply criticising the commission.

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Gao Yaojie uncovered a scandal that shocked and shamed China - The Economist

The impoverished farmers of Henan province, in the Yellow river valley of northern China, had no name for the illness that began to strike them down in the 1990s. They called it “the strange disease”. It made them weary and nauseous, spread a rash on their bodies and made sores grow in their mouths. And it made people vanish. Muscles and strength wasted away, so that men could no longer work the flat brown fields. Families dwindled and disappeared. Owners of new-built houses never moved in, leaving them empty. Some people, realising they were sick, simply ran away. Instead of crops, the fields sprouted mud-mound graves.

Local doctors were as puzzled as the victims. So in 1996 they called in Gao Yaojie to help. She was nearly 70 then, and technically she had retired. But her fund of medical knowledge, especially in obstetrics and female cancers, was formidable. She had always had a pretty good head on her shoulders. In 1950 she had been one of the first women to enter the Henan Medical School, walking with a limp which she never lost, because for six years as a child her feet had been bound to fit her for a daintier, idler life. Not for her, thank you.

She identified the mystery illness with her first patient. It was AIDS, which was already prevalent in China’s big cities. The puzzle was how it had arrived here, in these remote rural places. The farm folk were not taking drugs or indulging in commercial sex. Her patient, though, had recently had a blood transfusion. HIV, the virus that causes AIDS, had come in that way.

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