Regular readers will have noticed the recent disruption in our publishing. We just started a new job and have to reorganize our life accordingly. As a result, until we can get back to regular posting, we will change the format and get rid of the segmentation for now as it doesn’t really make sense with only a couple of links.
As far as we can say, the beginning of this year has been quite an eventful one, with President Trump actually doing the things he said he would. An insecure president at the top of the world’s most powerful country with a strong opposition from the establishment may result in brinkmanship politics as he desire to establish his credentials.
In any case, the unregulated globalization that benefited the rest of the world at the expense of the middle class in Western countries is likely to roll back in the coming years. This may not be good for ‘global growth’, but it is only normal since ‘global growth’ didn’t translate into increased living standards for working and middle class of Europe, North America and Australia.
Sure, they can benefit from lower prices for material things, but these things can’t replace actual work and earning a decent living. We’re not sure about the economics of de-globalization (i.e.: will it bring back economic growth and manufacturing in Western countries?), but the fact is that if you are not working in the upper management of multinationals or in sectors such as new technologies or finance, you are likely to work more to earn less, be unsure about your career prospects or might already be unemployed and unable to find a new economic activity.
In Europe, technocrats living with out of touch economic schemes do not understand the problem. According to their theories, unemployed middle aged Western Europe workers should migrate to countries where manufacturing is growing or change their line of work. It shouldn’t be a surprise that extremist parties perform well outside of large cities since these cities are out of reach for working/middle class.
To conclude, we still believe that the ‘nationalists’ or ‘populists’ parties will eventually bring their idea to the forefront of domestic politics. Except if countries actually get rid of their lower class or their elite separate themselves from the rest (look at California), the law of the numbers will work against the ‘elite’. ‘Winner take all’ economics cannot sustain itself. But sometime you can’t see the forest for the trees.
Consternation as Trump Starts Delivering on Campaign Promises While Making More Crazy Attacks on Critics – “There are far too many moving parts to have any firm view as to how the Trump Administration will pan out. But even though there was good reason to suspect that given the record of both celebrity politicians and DC outsiders, that Trump would wind up as Jimmy Carter squared, a President that didn’t get much done, the flip side is that underestimating Trump has proven to be a losing bet.“
Truth, lies and the Trump administration – (Hat tip Lao Ho) – “If the Trump administration now destroys American credibility, it will have handed the Russian and Chinese governments a victory of historic proportions.”
Saudi Arabia’s Economic and Demographic Reckoning – [Video] – “Stratfor Middle East Analyst Emily Hawthorne looks at the factors complicating Riyadh’s latest effort at reform.”
Three Theories Behind the Global Productivity Slowdown – “Most economists accept that “what we measure affects what we do; and if our measurements are flawed, decisions may be distorted”. But some go further, arguing that “the time is ripe for our measurement system to shift emphasis from measuring economic production to measuring people’s well-being. And measures of well-being should be put in a context of sustainability”.“
The biggest risk from technological change is inequality – Way too rosy but the underlying problem is real. “Regardless of which jobs are affected, we need to make sure the benefits of technology are shared equitably. It won’t happen naturally. The owners of businesses and machines – capital – are in a better bargaining position than ever.“
Things Just Got Serious in Europe’s War on Cash – “But perhaps the greatest beauty of cash is that it is one of the last remaining things that gives people a small semblance of privacy, anonymity, and personal freedom in their increasingly controlled and surveyed lives. However, according to the European Commission, privacy and anonymity do not constitute “fundamental” human rights.“
Picture of the week: Globe photos of the month, January 2017
About Carlito Riego
"Great perfection may appear imperfect, but its usefulness is inexhaustible. Great abundance may appear empty, but its usefulness cannot be exhausted. Great correctness may appear twisted, great skills appear crude, great eloquence appear awkward. Activity conquers cold; inactivity conquers heat. Clear serenity governs the world." - Lao Zi