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As politics becomes more alarming, optimism about global economic growth has been rising. This, as Martin Wolf writes in this week’s column, may lead us to conclude that we can happily let the two go their separate ways. But this would be to assume too much.

What, Martin asks, is likely to end this period of growth if it turns out to be unsustainable? Looking at the history of what creates sharp (and usually unexpected) slowdowns in global GDP growth, you can see that these have been due to financial crises, inflation shocks and conflict. Of these, war is the biggest risk to the economy.

Today, debt levels and inflated asset prices could hasten a bumpy end to growth. But Martin argues that politics is still the main risk, not only because it is damaging stable relations between nations, but also because policy shapes economies.

There is another, more optimistic possibility he outlines: that the positive economic outlook tempers the febrile politics or even heals political wounds. Either way, the two remain linked.

What do Iran’s protesters want? : David Gardner explains generational tensions and the anger against the post-revolutionary elite. Change is coming but so is a power struggle at the top, as the factions prepare for the eventual succession to Ayatollah Ali Khamenei as supreme leader.

May’s botched reshuffle: Sebastian Payne on the UK prime minister’s difficult start to 2018. A rearrangement of her ministerial personnel has failed to deliver the refreshed agenda she hoped for. As for stamping her authority? Not much of that either.

Battling India’s bureaucracy: Kiran Stacey shares recent insights into a civil service culture that deprives workers of the discretion to make reasonable decisions. It starts with registering his infant son and ends with why there are hold-ups on major international business deals.

Best of the rest

You’ve probably got two years, here are your seven steps to success: William Hague’s advice to new ministers in The Daily Telegraph

Is Oprah the un-Trump or the un-Clinton? Frank Bruni asks in the New York Times

Don’t count on the success of Germany’s coalition talks says The Economist’s Kaffeeklatsch

Made in Stoke on Trent: The Guardian’s documentary on life in “left behind” Britain.

What you’ve been saying

A system more about self-help than solidarity— letter from Erik Jones, Bologna, Italy

“Sir, Greek finance minister Euclid Tsakalotos makes the claim that Portugal is not like Texas because Texas benefits from the stabilisation afforded by federal fiscal flows (“Banking union is not enough to save the eurozone”, January 8). Specifically, “not only are there fiscal transfers into Texas, but also the citizens of all other states will contribute to the financing of those transfers”. That is not really how the US federal fiscal system works. True, Texas benefits from federal transfers, but those benefits depend upon how much Texas is willing to match from the federal government. The system is more about self-help than solidarity. Moreover, federal transfers only have a very limited impact on state per capita income.”

Comment from Daniel on Gideon Rachman’s Tuesday column, Donald Trump and Brexit are no longer identical twins

“Trump and Brexit may have been supported by similar constituencies in the US and the UK. However, more telling is that neither presented a coherent manifesto beyond vague slogans (“Make America Great Again” and “Take Back Control”) at the time of the vote or since. That they are now at odds with each other in terms of global trade should not therefore be surprising. In each case, the leader now in charge is casting around for policies that satisfy a group of voters who don't know what they voted for (and generally seem not to care). And, those policies and resulting positions are often inconsistent with each other, with the above vague objectives and with reality. A easy mistake is to try to find hidden meaning in both situations: perhaps there is a hidden secret masterplan which will be revealed in due course. There is not, in either case.”

Proof that the House of Lords is unfit for purpose— letter from Darren Hughes, London, UK

“Sir, Theresa May’s plans to appoint a dozen new peers to see through the Brexit bill (January 8) are a backwards step for our democracy. The fact that the UK prime minister of the day can pack our revising chamber with political appointees — in order to force through legislation — proves that the current set-up is totally unfit for purpose. The House of Lords is already bloated, comprising nearly 800 members. Yet despite apparent cross-party agreement on the need to cut this number, there has been no evidence to date that the government is willing to act. The recent Burns report, which recommended cutting the number of peers to 600 in 10 years, does not go any way near far enough. We need a fully and fairly elected second chamber of far fewer members to ensure that the House of Lords can be a revising chamber fit for the 21st century. Instead of expanding an already oversized house, Mrs May should get on with the urgent job of reform.”

Today’s opinion

FT Alphaville: Kodak makes last desperate bid for relevance with cryptocurrency

FT Alphaville: Let them eat cake that they have cooked from scratch

The latest Iranian protests are different They have spread outside Tehran and the target is the post-revolutionary elite

FT Alphaville: Alpha Agenda calendar, “bomb cyclone” truncated edition

FT View: Insurers join in on the slow squeeze on coal A pullback by European underwriters is a welcome and logical move

The world economy hums as politics sours But growth remains vulnerable to financial crises, inflation shocks and war

Battling India’s bureaucracy for babies and businesses A brush with the civil service reveals how complex deals end up being blocked

The weaponisation of the language of trade Linking foreign and domestic policy with populist rhetoric presents a nation as victim

Which Brexit for the financial industry? A goods-only deal would put complaints about EU rules to the test

FT Alphaville: The tax on university endowments is anti-intellectualism and cultural resentment masquerading as fiscal policy

Instant Insight: Theresa May’s botched reshuffle exposes her weakness The UK prime minister has failed to revamp her government as hoped

FT View

FT View: Insurers join in on the slow squeeze on coal A pullback by European underwriters is a welcome and logical move

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