The Ticker Quick Views on Politics, Economics and Finance

A trial in Africa has failed to prove the effectiveness of using HIV medicine to prevent HIV infection in women, but it did show one thing: People, especially the young, are pretty reckless when it comes to sex.

The study, called Vaginal and Oral Interventions to Control the Epidemic, tested three ways of delivering a daily dose of antiretroviral drug to the body: via a tablet of Truvada, a tablet of tenofovir and a vaginal gel containing tenofovir. In previous trials, ARVs in pill and gel form have reduced HIV infections, so one might have expected the study volunteers  -- sexually active women in Uganda, South Africa and Zimbabwe, half of whom were unmarried -- to have taken them.

With the Dow Jones Industrial Average having breached its October 2007 pre-crisis record, a bit of perspective is in order by way of a then-versus-now comparison. Here are a few data points:

Unemployment rate: Then, 4.7 percent; now, 7.9 percent.
Total unemployed: Then, 7.23 million; now, 12.33 million.
Labor force participation: Then, 65.8 percent; now, 63.6 percent.
Gross domestic product growth: Then, 2.2 percent; now, 1.6 percent.
Total public debt to GDP: Then, 36.3 percent; now, 74.2 percent.
Total public debt: Then, $9 trillion; now, $16.7 trillion.
Federal budget deficit: Then, $162 billion; now, $1.09 trillion.
Consumer confidence: Then, 95.2; now, 69.6.
Total household debt: Then, $13.7 trillion; now, $12.87 trillion
30-year mortgage rate: Then, 6.4 percent; now, 3.51 percent.
Median existing home price: Then, $206,700; now, $173,600.
Median household income: Then, $54,489; now, $50,054.
U.S. corporate profits: Then, $1.46; now, $1.97 trillion.
Dollar versus major currencies: Then, 78.5; now, 82.1. 
Crude oil per barrel: Then, $80.26; now, $90.87.
Regular gasoline per gallon: Then, $2.77; now, $3.74.
Federal funds rate: Then, 4.75 percent; now, 0.25 percent.
Federal Reserve assets: Then, $890 billion; now, $3.1 trillion. 
30-Year Treasury yield: Then, 4.86 percent; now, 3.1 percent.
Inflation rate: Then, 3.5 percent; now, 1.6 percent.
Misery index: Then, 7.5; now, 9.5.

The Wall Street Journal has a curious article about Citigroup Inc. and its new chief executive officer, Michael Corbat. It says he is "putting his stamp on the company with a simple formula: You can't manage what you can't measure."

Readers learn he spoke to a gathering of 300 executives at a New Jersey hotel last month where he "proposed a slate of new, more-rigorous ways to track both the performance of individual executives and the third-largest U.S. bank as a whole." Score cards will rate top managers in five categories: capital, clients, costs, culture and controls. (The Five C's!)

Sequestration, the arbitrary budget cuts that supposedly no one wanted, began taking effect last week, and it's hard not to notice that Republican leaders seem pleased with themselves. 

Speaker of the House John Boehner professes little interest in a deal to mitigate the cuts; he has more or less vowed to tie himself to the Statue of Freedom atop the Capitol before he'll accede to any additional tax revenue -- including the sort of loophole closing that Republicans of a previous era (circa 2012) claimed they desired. Meanwhile, conservative troops are cheering. 

If you think the politics of sequestration were bad, just wait until the political economists weigh in on the results.

Whether austerity -- the $85 billion of across-the-board discretionary spending cuts, about half of which will be implemented in fiscal 2013 -- hurts or helps the economy will be in the eye, and the political disposition, of the beholder.

Sequestration is by no means a welcome event, but it may serve at least one useful purpose: testing Republicans' theory that cutting government spending will jump-start economic growth.

Republicans have long insisted that Washington's "spending problem" is what stands in the way of a more robust economy and that winnowing outlays will open the economic spigot. Representative Kevin Brady, a Texas Republican and the Joint Economic Committee chairman, wrote recently: "Time and time again, economic studies have shown that countries that reduce their government deficits through spending cuts -- rather than tax increases -- can boost economic growth and job creation even in the short term."

This morning, Professors John Taylor and Laura Tyson presented competing visions for the future of fiscal policy at the National Association for Business Economics Economic Policy Conference. And Taylor’s presentation exemplified how conservatives mistreat the ratio of federal spending to GDP. The spending-to-GDP ratio is a reflection of our policy priorities, but conservatives act as if it should be a driver of them.

Taylor made arguments that are extremely familiar among conservative economists. Federal spending has risen well above historical averages and will remain above them for decades to come; revenues dipped in the recession but should soon be back in line with or a bit above historical averages. With spending above normal and revenue soon to be about normal, Taylor says it is “common sense” to bring spending back in line. He added (perhaps trying to get me to slam my head through a wall) that this is what a household or corporation would do in a similar situation.

There's a scandal brewing at the American Securitization Forum -- and sure to be a lot of schadenfreude to follow.

The trade association "fell into turmoil last week when most of the board resigned in a dispute with the group's executive director over governance and bonuses," Bloomberg News reported today, citing six unnamed people familiar with the matter. Members that quit include Bank of America Corp., JPMorgan Chase & Co., Deutsche Bank AG and Citigroup Inc.

Haruhiko Kuroda, the Japanese government's nominee to become head of the Bank of Japan, mostly told financial markets what they wanted when he appeared at a parliamentary confirmation hearing today. If he gets the job, monetary policy will change: The "scale and scope" of BOJ asset purchases will increase, he said.

Up to now the central bank has concentrated its version of quantitative easing on short-term government debt. Since this is a close substitute for cash, the policy has amounted to swapping one kind of money for another and hasn't accomplished much.

Switzerland, a bastion of moderation and discretion, doesn't often go for radical change, especially where corporations are concerned. Yet Swiss voters on Sunday overwhelmingly approved a referendum that will shackle boards and executives and, above all, limit CEO pay.

The Swiss government, lawmakers and chief executive officers say the changes are so severe that companies may be forced to decamp beyond Swiss borders. Jobs will be lost and economic growth will falter, they warn.

Arthur Brooks has an op-ed in the Wall Street Journal today that starts with a kernel of truth: Republicans are in trouble because most Americans think they don’t care about people like them or about the less fortunate. But he gets the diagnosis completely wrong, saying Republicans can fix this by refocusing their messaging. In fact, this perception is accurate: Conservative policies aren't good for the middle class or the poor.

Brooks argues that conservative policies are already good for the poor, and that would be clear if only they were framed differently. For example, he writes:

Last week, Spanish Prime Minister Mariano Rajoy gave investors and analysts a pleasant surprise, announcing that his country’s budget deficit had fallen to 6.7 percent of gross domestic product in 2012, far below the European Commission’s estimate.

Unfortunately, the lower number is probably wishful thinking on Rajoy's part, because he excluded the costs associated with recapitalizing Spain’s banks. The European Commission's estimate was much higher, at 10.2 percent of GDP, because it included them.

As I discuss in my column, Steven Brill's Time magazine cover story last week is an eye-opening expose of U.S. health care. He could also have mentioned that our system is the most expensive in the developed world and that the gap with other countries isn't narrowing.

In 2010, the last year for which data are available, according to the Organization for Economic Cooperation and Development, the U.S. spent 17.6 percent of its gross domestic product on health care. That's more than 50 percent more than Canada, the U.K. or Germany, all of which spend less than 12 percent of GDP on health care.

The U.S. State Department's new report on the Keystone XL oil pipeline is making the project's opponents uneasy, by acknowledging that whether or not the pipeline is built, heavy crude will still be extracted from Canada's oil sands. It also points out that refineries on the Gulf Coast will keep refining heavy crude from somewhere -- some of it shipped from Canada and some from Venezuela and Mexico.

That's not exactly surprising. There was little reason to expect that, in drafting a second environmental impact report on the pipeline, the State Department would suddenly come up with reasons to deny a permit that weren't in the report that came out a year and a half ago.

U.S. Republicans think they have nothing to lose from the sequestration. But nobody knows what the effects of the federal agencies’ spending cuts will be. Will it be chaos? Or will it be bearable? Your guess is as good as mine.

Until we have the answer, Republicans do have something to lose: the credibility of their own argument for spending cuts.

Republicans, when pushing back on the claim that their party is in dire straits, are fond of pointing out that the party holds 30 governorships. But there are increasing strains between Republican governors and national conservatives -- because the heterodoxy that has made it possible for Republican leaders to thrive at the state level is not what conservatives want.

I'm not just talking about New Jersey Governor Chris Christie. Seven other governors, many of them with high national profiles, have declared their intentions to accept Medicaid expansion funds. None of these governors are on the Conservative Political Action Conference agenda either. Beyond that group of eight, Virginia Governor Bob McDonnell cut a deal with Democrats creating a commission that may lead to Medicaid expansion -- in order to gather their support for his transportation funding reform, which conservatives also hate because it raises taxes.

This morning in China, the state-owned television network had an unusual announcement: At 1:30 p.m. it would air a two-hour special culminating in the televised execution of four Burmese drug runners convicted of murdering 13 Chinese sailors in 2011.

This sort of spectacle is not without precedent in Chinese history. During the imperial era, emperors held leisurely executions at court. During the Cultural Revolution, the Red Guards held them wherever was convenient. In both cases, the purpose was clear: impress upon the Chinese audience the consequences of defying the state and the Communist Party.

(Corrects second paragraph to reflect that Rodman appeared in matches for World Championship Wrestling, not the World Wrestling Federation.)

Sports and politics have a long tradition of intersecting, often with positive results. Probably the most famous example is the U.S. ping-pong team’s 1971 visit to China. More recently, two NFL players, Brendon Ayanbadejo and Chris Kluwe, have used their status as professional athletes to advocate for same-sex marriage.

Federal spending cuts known as sequestration officially kicked in today, but most of us probably haven't noticed. In the first days of sequestration, airport security lines won't be markedly longer. Teachers won't be thrown out of classrooms. Unsafe food won't suddenly appear on supermarket shelves (at least no more than it already does).

But don't let these noncatastrophic consequences fool you: The slow bleed of sequestration will hurt the U.S. economy and undermine perhaps its best chance for a robust recovery.

U.K. Prime Minister David Cameron's tactic of pledging to claw back powers from the European Union and then hold a referendum on whether to leave or stay in the bloc has failed its first election test.

That was the general consensus in the U.K. news media this morning, after Cameron's Conservative Party was reduced to a humiliating third place in a by-election in the southern constituency of Eastleigh. The Tories were beaten not only by their coalition partners, the Liberal Democrats (who held on to the seat), but also by the UK Independence Party.