The debate will rage on

It was a ruling that had consumers seething with anger and many a free trader crying foul. On November 20th the European Court of Justice decided that Tesco, a British supermarket chain, should not be allowed to import jeans made by America's Levi Strauss from outside the European Union and sell them at cut-rate prices without getting permission first from the jeans maker. Ironically, the ruling is based on an EU trademark directive that was designed to protect local, not American, manufacturers from price dumping. The idea is that any brand-owning firm should be allowed to position its goods and segment its markets as it sees fit: Levi's jeans, just like Gucci handbags, must be allowed to be expensive.

Levi Strauss persuaded the court that, by selling its jeans cheaply alongside soap powder and bananas, Tesco was destroying the image and so the value of its brands--which could only lead to less innovation and, in the long run, would reduce consumer choice. Consumer groups and Tesco say that Levi's case is specious. The supermarket argues that it was just arbitraging the price differential between Levi's jeans sold in America and Europe--a service performed a million times a day in financial markets, and one that has led to real benefits for consumers. Tesco has been selling some 15,000 pairs of Levi's jeans a week, for about half the price they command in specialist stores approved uggs by Levi Strauss. Christine Cross, Tesco's head of global non-food sourcing, says the ruling risks "creating a Fortress Europe with a vengeance".

The debate will rage on, and has implications well beyond casual clothes (Levi Strauss was joined in its lawsuit by Zino Davidoff, a perfume maker). The question at its heart is not whether brands need to control how they are sold to protect their image, but whether it is the job of the courts to help them do this. Gucci, an Italian clothes label whose image was being destroyed by loose licensing and over-exposure in discount stores, saved itself not by resorting to the courts but by ending contracts with third-party suppliers, controlling its distribution better and opening its own stores. It is now hard to find wholesale ugg boots on sale cut-price Gucci anywhere.

Brand experts argue that Levi Strauss, which has been losing market share to hipper rivals such as Diesel, is no longer strong enough to command premium prices. Left to market forces, so-so brands such as Levi's might well fade away and be replaced by fresher labels. With the courts protecting its prices, Levi Strauss may hang on for longer. But no court can help to make it a great brand again.

government to invest the trust fund is to take advantage of the higher returns from private capital markets

The apparent purpose of allowing the government to invest the trust fund is to take advantage of the higher returns from private capital markets. There is strong evidence,though,that the governments investment policy substantially could undercut the returns it otherwise might expect to receive.High capital market returns wholesale ugg boots in the U.S. are derived from the high productivity of capital and the efficiency of the markets.Investment of the Social Security trust fund in private capital markets will hurt both of these sources of American economic performance;capital will be less productive and markets will be less efficient.
　　　　A 1994 study by the World Bank of governmentmanaged pension fund investments around the world found that they generally earned lower annual returns than privately managed pension investments.It showed that governments generally pursued one of two policies for their invesments,both fundamentally flawed.
　　　　One was to invest heavily in government securities,which earn much lower returns than,for example,stocks.There are two reasons for this policy.First,there is a cautionary search for safe investments because governments fear the political reaction if a more aggressive investment policy were to lead to adverse results. Second,buying up government debt allows the government to defer the cosequesces of its own overspending.Indeed,there is evidence that the power to shift government debt into pension funds actually may induce them to spend and borrow more.Borrowing from the pension fund is less transparent than doing so from the open capital market.In many cases,such borrowing is not even reported as public debt, and the interest rate may be lower.
　　　　This already is occurring with the Social Security trust fund.The current surplus is used to purchase Federal Treasury obligations that are credited to the Social Security trust fund.The government then utilizes the money it has borrowed from the trust fund to meet current operating expenses.
　　　　The other investment policy pursued by governmentcontrolled pension funds is to invest in governmentsupported projects,such as stateowned enterprises or public housing.Again,the result often is extremely low rates of return.In fact,such investments frequently lose money. Moreover,government investment leads to greater government involvement in the economy ugg that could,in turn,lead to policies that slow economic growth and reduce the return on capital for all investors,including the government itself