Sep 15th 2018
As we mark the decennial of the collapse of Lehman Brothers, there are still ongoing debates about the causes and consequences of the financial crisis, and whether the lessons needed to prepare for the next one have been absorbed. But looking ahead, the more relevant question is what actually will trigger the next global recession and crisis, and when. The current global expansion will likely continue into next year, given that the US is running large fiscal deficits, China is pursuing loose fiscal and credit policies, and Europe remains on a recovery path. But by 2020, the conditions will be ripe for a financial crisis, followed by a global recession. There are 10 reasons for this. First, the fiscal-stimulus policies that are currently pushing the annual US growth rate above its 2% potential are unsustainable. By 2020, the stimulus will run out, and a modest fiscal drag will pull growth from 3% to slightly below 2%.
Sep 12th 2018
Next month, a judge in Oregon will begin hearing a case brought against the United States government on behalf of 21 young people, supported by the non-profit organization Our Children’s Trust, who allege that the authorities’ active contributions to the climate crisis violate their constitutional rights. The government defendants have repeatedly tried – so far without success – to have the case thrown out or delayed, and the trial is currently scheduled to start on October 29.
Sep 5th 2018
Wars are expensive, as the Russian people are now learning. The Kremlin is pursuing military adventures in Eastern Ukraine and Syria, and though these conflicts are limited in scope, one wonders if the country can really afford them.
Sep 1st 2018
This week, the California state legislature voted to mandate that all the state’s electricity come from non-carbon sources (chiefly wind, solar and hydro) by 2045. Since California if it were a country would have the world’s fifth largest economy, and since so many other states are economically integrated with it, this plan, if signed by governor Jerry Brown, could help transform the entire country. The goal is less difficult than it seems on the surface. California had already committed to getting one third of its electricity from renewables by 2020, and reached that goal in 2017. It committed to getting 50% of its electricity from renewables by 2030, and in fact will likely reach that goal 10 years early, in 2020.
Aug 29th 2018
Quote: "This may ultimately result in creation of a new accounting standard - the Enterprise Value of Data – which could become an integral part of financial statements, capturing the value of the largest and most ignored corporate asset: data."
Aug 29th 2018
What comes through clearly in polling on US public opinion is that there is a deep partisan divide on the Israeli/Palestinian issue, with key demographic groups increasingly more supportive of Palestinian rights and antagonistic to hardline Israeli policies. In some ways, the Netanyahu/Trump "marriage" has also helped to fuel the partisan divide. A Pew poll from earlier this year found that support for Palestinians far surpasses support for Israel among self-described "progressive" and "liberal" voters. And a recent Gallup poll shows that only 17% of Democrats now have a favorable view of the Israeli leader.
Aug 27th 2018
History suggests that current-account imbalances ultimately matter a great deal. A still-unbalanced global economy may be forced to relearn that painful lesson in the coming years.
Aug 27th 2018
The United States economy is doing well. But the next recession – and there is always another recession – could be very bad. The US Bureau of Economic Analysis estimates that GDP growth in the second quarter of 2018 reached 4.1% – the highest since the 4.9% seen under President Barack Obama in 2014. Another year of growth will match the record ten-year expansion of the 1990s. Add to that low unemployment, and things are looking good. But this cannot continue forever.
Aug 24th 2018
If Britain leaves the European Union with no deal in place to govern trade with its biggest partner, it will fall back on World Trade Organisation rules. The same set of rules would apply to EU countries and non-EU trade partners. This is why the UK government has published a series of “technical notices” detailing preparations for a no-deal Brexit. Here are seven reasons that sum up why a no-deal Brexit and defaulting to WTO rules would be bad for British businesses and the wider economy.
Aug 23rd 2018
Unlike today’s aspiring strongmen, a truly tough leader would stand up for international cooperation, and seek to persuade voters why it matters. One hopes that French President Emmanuel Macron, German Chancellor Angela Merkel, and Japanese Prime Minister Shinzo Abe will do precisely that in the coming months. In the meantime, we must pray that wannabe tough guys like Trump and Erdoğan do not do too much damage to their respective countries, and to the rest of us. It is time to make cooperation great again.
Aug 23rd 2018
Historians will mark August 21, 2018, as a turning point in American history. President Donald Trump’s personal lawyer pleaded guilty to 8 counts of criminal wrongdoing that could carry a sentence of up to 65 years. Most significantly, he pleaded guilty to having attempted illegally to interfere in an election “in coordination with and at the direction of a federal candidate for office.”
Aug 22nd 2018
As the usual political inferno between parties and private firms rages on, the phantom threat of mafia involvement in Italian construction has resurfaced. The region of Liguria sadly scores quite high in the assessments of mafia infiltration. In the area, Calabrian mafia clans of the ‘ndrangheta – Italy’s most powerful mafia today – have heavily invested in the construction sector, in public tenders and in the exploitation of the port of Genoa and the roads to France and to the rest of the Italian north, for the purposes of illegal trafficking.
Aug 15th 2018
Why do conspiracy theories and general charlatanism so often receive their strongest support from the world’s dictators? Sure, dictators are almost always oddballs themselves, but that cannot be all there is to it. In fact, it is worth asking whether quackery is a necessary feature of authoritarian rule.
Aug 15th 2018
Across the global economy, the potential for automation seems huge. Adidas’ “Speedfactory” in Bavaria will employ 160 workers to produce 500,000 pairs of shoes each year, a productivity rate over five times higher than in typical factories today. The British Retail Consortium estimates that retail jobs could fall from three million to 2.1 million within ten years, with only a small fraction replaced by new jobs in online retailing. Many financial-services companies see the potential to cut information-processing jobs to a small fraction of current levels. And yet, despite all this, measured productivity growth across the developed economies has slowed. One possible explanation.....
Aug 11th 2018
US President Donald Trump’s erratic unilateralism represents nothing less than abdication of global economic and political leadership. Trump’s withdrawal from the Paris climate agreement, his rejection of the Iran nuclear deal, his tariff war, and his frequent attacks on allies and embrace of adversaries have rapidly turned the United States into an unreliable partner in upholding the international order. But the administration’s “America First” policies have done more than disqualify the US from global leadership. They have also created space for other countries to re-shape the international system to their liking. The influence of China, in particular, is likely to be enhanced.
Aug 9th 2018
Wall Street is full of turnaround talk following Tesla’s second-quarter earnings results, sending shares in the futuristic electric car pioneer up almost 10%. Investors welcomed news that the company was burning through cash at a lower rate and revenues were considerably higher, yet the results also showed that Tesla’s financial and operational weaknesses have not gone away. From my reading of the figures, this is a company in real trouble.
Aug 1st 2018
By seeking to disrupt virtually all that has defined the West since the end of World War II, Trump has brought the world to a historical turning point. At stake is not the US-EU relationship, which remains strong, but rather the West’s dominant position on the world stage. Trump is accelerating a shift in the global balance of power that will leave both America and Europe weaker in relative terms. As income and wealth shift from the West to the East, China will increasingly be able to challenge the US as the world’s leading geopolitical, economic, and technological power.
Jul 28th 2018
Alarming stories about the diabetes epidemic that threatens millions of lives have become commonplace, and with good reason.......The link between cheap, sugary and fatty food and obesity and type 2 diabetes is indisputable. The healthy/unhealthy food cost ratio has to change because the evidence is that education – while valuable – is not enough by itself. The evidence from many countries shows that in most chronic, lifestyle-related diseases, legislation is faster and often more effective.
Jul 28th 2018
Last week, the Israeli Knesset passed a new basic law which in the main enshrines “Israel [as] the historical homeland of the Jewish people in which the State of Is
Jul 24th 2018
This past week by a vote of 62 to 55, Israel's Knesset passed legislation called "Israel as a Nation-State of the Jewish People." Heralding the passage of the bill, Prime Minister Benjamin Netanyahu described it as "a defining moment in the annals of Zionism and the annals of the state of Israel...We have determined in law the founding principle of our existence. Israel is the nation-state of the Jewish people, and respects the rights of all its citizens." In reaction, Israeli hardliners and their supporters in the US celebrated the legislation as "clarifying", while more liberal voices lamented "the damage the bill does to the 'Zionist vision.'" This is one debate where I cannot take the side of the liberals because in reality, the "Jewish Nation-State" bill is in fact "clarifying" as it merely establishes in "Basic Law" practices and policies that Israel has been implementing since its founding.