NOVEMBER 3RD9TH 2018A budget to end austerity?Europe without MerkelRed October in the marketsHBO v NetflixWhy the mid-terms matterThe EconomistNovember3rd20185Contents continues overleaf1ContentsThe world this week8A round-up of politicaland business newsLeaders11The mid-termsAmerica divided12GermanyAngelas exit12America and IranTalk to Tehran14StockmarketsRed October16Doing BusinessrankingsRed in tooth, claw and tape17Britains budgetAn end to austerity?Letters18On Pik Botha, the City,China, Singapore, India,John Cockerill, airlinesBriefing21The DemocratsKick-starting the donkeyBritain25Is austerity really over?26Taxing tech titans28”Norway for now”28Leicester mourns a Thaibillionaire30Social housing inNorthern Ireland31Wealth and mortality31Disappearing coastlines32BagehotExplaining BrexitEurope33Angela Merkel calls time34Migrants trapped inGreece.35.and in Italy36Good news from Ireland36Volt, a new pan-EU partyUnited States37Caravan of copycats38Closing arguments39Predicting the elections40Rhetoric and violence41Housing on the ballot42LexingtonOn cultsThe Americas43The radicalism of JairBolsonaro44BelloThe demise ofBrazils centrists46Mexicos airport disaster46Which? Caribbean courtMiddle East and Africa47Sanctions on Iran48Netanyahu visits Oman48Iraqs new government49A hint of hope for Yemen49Re-education in Ethiopia50Farming in AfricaChaguanTo understandChinas vision forglobalisation, think of itas a giant sub-primelender, page 58On the coverPolitics is making Americansmiserable. The mid-termsofer a chance to change that:leader,page 11. Are theDemocrats a threat to DonaldTrump? Page 21. Republicansfall back on white identity,page 37. Their voters love thepresident for whom he hates:Lexington,page 42A budget to end austerity?Britains feel-good budget is toogood to be true: leader, page 17.The chancellor says austerity isover. It is not so simple, page 25. A new tax takes aim at ofshorecomputing giants, page 26Europe without MerkelAfter13 years, her era is over: leader,page 12. She will step down asCDU party chief in December,page 33Red October in the marketsAfter a bad patch, what happensnext depends on China: leader,page 14. A slowdown in Americais likely,page 67. Why have techstocks fallen? Schumpeter, page 66. China hopes to fix itsreputation for protectionism,page 68 HBO v NetflixThe incumbentprepares to challenge theupstart in streaming video, page 61PEFC/16-33-582Published since September 1843to take part in“a severe contest betweenintelligence, which presses forward,and an unworthy, timid ignoranceobstructing our progress.”Editorial offices in London and also:Amsterdam, Beijing, Berlin, Brussels, Cairo,Chicago, Johannesburg, Madrid, Mexico City,Moscow, Mumbai, New Delhi, New York, Paris,San Francisco, So Paulo, Seoul, Shanghai,Singapore, Tokyo, Washington DCSubscription serviceFor our full range of subscription ofers, includingdigital only or print and digital combined, visit:Economist.com/offersYou can also subscribe by post, telephone or email:Post:The Economist SubscriptionServices, PO Box 471, HaywardsHeath, RH16 3GY, UKTelephone:0845 120 0983or0207 576 8448Email:customerservicessubscriptions.economist.comOne-year print-only subscription (51 issues):UK.145PEFC certifiedThis copy ofThe Economistis printed on paper sourcedfrom sustainably managedforests certified by PEFCwww.pefc.orgPleaseRegistered as a newspaper. 2018 The Economist Newspaper Limited. All rights reserved. Neither this publication nor any part of it may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic,mechanical, photocopying, recording or otherwise, without the prior permission of The Economist Newspaper Limited. Published every week, except for a year-end double issue, by The Economist Newspaper Limited. The Economistis aregistered trademark of The Economist Newspaper Limited. Printed by Wyndeham Peterborough Limited.6ContentsThe EconomistNovember3rd2018Volume 429 Number 9116Asia51Turmoil in Sri Lanka52Japans cosseted pets52Racism in South Korea53Extremism in Pakistan54Cambodias garmentindustry54The worlds biggest statue 54New Caledonia votes55BanyanGay marriage inTaiwanChina56Hysteria over GM food57Fears for tigers58ChaguanLessons fromLatin AmericaInternational59A taxonomy of anti-Semitism in the WestBusiness61