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On the coverFarewell leftv right. The newpolitical contest is openclosed: leader, page 7.A closer Look at the new dividein rich countries, pages 16-18.The anger and fickleness ofAmerican voters are forcingchange. But in whichdirection? Page 22. Britain isunusually open to trade butalso unusually bad atmitigating its impact, page 43

Terrorism in Europe Signs ofchange in the paticalreaction to terror in France,page 39. In the face of a rashof attacks, Germans are stayingremarkably calm, page 40

:41

3 The E ist July 30th 2016Contents

The Economist online

Daityanalysis and opinion tosupplementthe printedition, plusaudio and video, and a daily chartEconomist.com•E-mail: newsletters andmobileeditionEconomist.com/email

Print edition: available online by7pm London time each ThursdayEconomist.com/print

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TheEconomist

Volume 420 N umber 9000

Published sinceSeptembem843to toke part in "a severe contest betweenintelligence, which presses forward, andan unworthy, timid ignorance obstructingour progress."

Editorialoffices in London and also:Atlanta, Beijing, Berlin, Brussels, Cairo, Chicago,Lima, Mexico City, Moscow, Murnbai, Nairobi,New Delhi, NewYork, Paris, San Francisco,Sáo Paulo, Seno!, Shanghai, Singapore, Tokyo,Washington DC

5 The world this week

Leaders

7 Globalisation and politicsThe new political divide

8 AbenomicsOverhyped,underappreciated

9 Russian dirty tricksDoping and hacking

9 The parable of YahooFrom dotcom hero to zero

10 Air pollutionCleaning up the data

Letters

12 On Republicans,Pokémon, blood-testing,Brazil, John Cleese,Italian banks

Briefing

16 Globalisation and politicsDrawbridges up

United States

19 The Democratic conventionBridging the torrent

20 On the trailPhi lly special

21 Putin, Trump and the DNCSignal and noise

21 The PGA championshipwin?

22 Southern livingFrom crop to pop

22 Political partiesDefining realignment

24 LexingtonAble Kaine

The Americas

25 Rio de JaneiroNot yet a medal contender

28 BelloCash in bin liners, ptease

Asia

29 THAAD and South KoreaOf missiles and metons

30 Politics in IndonesiaLook who's back

30 Murder in JapanMassacre in a rafe country

31 Terror in AfghanistanUnwelcome guests

31 Young aboriginesAustralia's Abu Ghraib

32 Politics in TaiwanA series of unfortunateevents

China

33 Flood controlA giant dam's drawbacks

34 Jiang ZeminThe cult of a formerpresident

34 Online mediaNo reporting withoutpermission

Middle East and Africa

35 Zimbabwe's presidentCom rade Bob besieged

36 Local elections in SouthAfricaYoung rivals

36 Nigeria's strugglingstatesRunning out of road

37 The Arab LeagueA new

37 The Saudi bombardmentof YemenWorse than the Russians

38 Water in the West BankNor yet a drop to drink

Europe

39 France's response toterrorismLoss of faith

40 How Germans handleterrorPure reason

40 NATO and TrumpDefend me maybe

41 Catholic youth in PolandCross purposes

42 CharlemagneAdvice for May and Merkel

Abenomics What Japan'seconomic experiment canteach the rest of the world:leader, page 8. Abenomics mayhave failed to live upto thehype butit has not failed. Andthe hype was necessary to itssuccess, page 57

Rio and the OlympicsThe Olympic city has been indecline since the 1960s. Thegames will not change that,page 25. A sobering history ofhow the Olympic gamesevolved, page 67

Contents continues overleaf

Pope Francis Despite hispopularity, the pontiff's effortsto reshape his church face stiffresistance, page 47

Big econc,,,,ic ideasThe second article in our serieson seminal economic paperstooks at Hyman Minsky'shypothesis that booms sowthe seeds of busts, page 54

1.9PEFC

pEK/29-31-58

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PEFC certified

This copy of The Economistis printed on paper sourcedfrom sustainably managedforests certified to PEFCwww.pefc.org

4 Contents The Economist July 30th 2016

Goodbye Yahoo The erstwhileSilicon Valley staris no longeran independent company. Itsfailure had many fathers:leader, paye 9. Verizon hasmade a bold, risky bet on the

•future of advertising, paye 49

Britain43 The impact of free trade

BLackburned

44 Northern IrelandFrontier spirit

46 BagehotCan Owen Smith saveLabour?

International

47 Pope FrancisHearts, minds and souts

Business

49 Verizon buys YahooDoes it ad up?

50 Rare diseasesFixing fate

51 US corporate governanceChange, or eLse

51 EricssonHans free

52 Electric cars in ChinaCharging ahead

52 Green strategiesIn the thicket of it

53 SchumpeterNot-so-clever contracts

Economics brief54 Finandal stabitity

Minsky's moment

Finance and economics

57 Japan's economyAbenomics assessed

59 ButtonwoodRisky pensions

60 The Federal ReserveStaying low

61 Road taxes in EuropeNot easy being green

61 Private share salesTrading unicorns

62 Free exchangeCompeting for workers

Science and technology63 Printed electronics

On a mil

64 Air pollutionBreathtaking

65 The ancient atmosphereTime capsules

Books and arts

66 American foreign policyObama's Long game

67 Olympic gamesDark history

67 American fictionMean gids

68 Jazz in the 21st centuryPlaying outside the box

70 JohnsonLiberaL bLues

72 Economic and financialindicatorsStatistics on 42 economies,plus a closer Look atmerchandise trade

Obituary

74 Geoffrey HillThe discomfort of words

City pollution The dangers ofdirtyair need to be nade muchmore transparenttocity-dwelters: leader, paye 10.Air-quality indices makepollution seem less bad than itis, page 64

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