Bloomberg (September 28)
“Something a little worrying has happened to the global economy: Trade is slowing down…. Trade has stopped growing as a percentage of output, the way it had in the past. A few years isn’t necessarily enough to establish a trend, but the slowdown in trade is unprecedented in the postwar era.”
Tags: Global economy, Output, Postwar era, Slowdown, Trade, Trend, Unprecedented, Worrying
Financial Times (September 27)
“It is disappointing that Mr Abe chose last week not to redouble his efforts,” especially on the third arrow of structural reform, “but instead promulgate three newer arrows: ‘strong economy’, ‘support for families’ and ‘social security’. Anything that confuses his original, and clearer message risks undermining its goals.” Moreover, his original program has been working. “Japan is no longer the deflationary outlier — virtually every developed country has seen negative inflation following the recent oil price falls. When this effect is stripped out, Japan’s CPI has been growing at between 0.5 and 1 per cent, well above its previous rate.”
Tags: Abe, CPI, Deflationary, Economy, Families, Japan, Negative inflation, New arrows, Oil, Social security, Structural reform, Undermine
New York Times (September 27)
Big money politics is reaching new highs in the U.S. “Top-tier Republican donors will pay $1.34 million per couple for the privilege of being treated as party insiders, while the Democratic Party will charge about $1.6 million.” Make that lows. “More big money can only leave less hope for voters concerned that the richest donors are buying ever more influence over politicians, with favoritism and corruption an inevitable result.”
Tags: Big money, Corruption, Democrat, Donors, Favoritism, Influence, Insiders, Politics, Republican, U.S., Voters
The Economist (September 26)
“With China’s “decades-old investment boom fast dwindling, it needs consumption to kick in as a new driver of growth.” Fortunately, rebalancing is progressing with retail sales increasing “by 10.5% in real terms this year, well ahead of economic growth.” Amid industrial downturn, “China’s consumer boom is real. But do not count on it to lift the global economy.” This great consumer rebalancing is even less likely to benefit “commodity-exporting countries whose fortunes have hinged on China.”
Tags: China, Commodities, Consumption, Growth, Industrial downturn, Investment, Rebalancing, Retail sales
Institutional Investor (September 24)
In the U.S., mounting unfunded liabilities of state retirement systems now total $1 trillion. The states desperately need to “find ways to slash costs,” but the “figure is expected to keep growing as states continue to put off pension and liability payments, and investment returns from capital markets sit in the low single digits.”
Tags: Costs, Investment returns, Markets, Pensions, Retirement systems, States, U.S., Unfunded liabilities
Wall Street Journal (September 24)
“It is now impossible to ignore that China is attempting to redefine its relationship to America and the rules of world order. Under Mr. Xi, Beijing sees itself as a strategic rival rather than a partner. Its foreign policy is increasingly aggressive, sometimes lawless…. The U.S. needs to show that it will resist this behavior—even as it seeks to steer China’s leadership back toward global norms.”
Tags: Aggressive, Beijing, China, Foreign policy, Global norms, Lawless, Partner, Rival, U.S., Xi
New York Times (September 23)
“What was Volkswagen thinking?” Clearly it was not about the massive fallout that has ensued since the automaker’s rigged emissions tests, affecting 11 million vehicles, came to light. “For something this deceitful and stupid, a corporate mea culpa is not enough. Volkswagen must explain how something like this could happen, and identify those who came up with the idea and authorized it.”
Tags: Automaker, Deceitful, Emissions, Fallout, Volkswagen
LA Times (September 22)
Chinese President Xi Jinping is stopping on the West Coast to meet with business leaders before meeting with President Obama in Washington. Many expect Xi to enlist the support of the business leaders he meets in derailing the likely imposition of “economic sanctions on China as punishment for cyber attacks, including the theft of millions of sensitive personnel records from U.S. government computers.” The 30 U.S. business leaders meeting with Xi in Seattle should be careful not to “undermine their long-term interests by giving Xi the wrong message on cybersecurity…. It would be shortsighted and foolish to try to dampen the federal government’s response to the relentless cyber attacks.”
Tags: Business leaders, China, Cyber attacks, Cybersecurity, Economic sanctions, Obama, Personnel records, Shortsighted, Washington, Xi
Bloomberg (September 20)
There has been “a huge and very worrying change in Japanese education policy….Essentially, Japan’s government just ordered all of the country’s public universities to end education in the social sciences, the humanities and law” with a non-binding order from Hakubun Shimomura, Minister of Education, Culture, Sports, Science and Technology. This is “a terrible direction for Japan to be going.” To succeed as a rich country in a service economy, Japan will need more conceptual thinkers who can communicate, rather than more engineers. “Japan needs to keep educating students in the social sciences and humanities. It needs to avoid a doomed attempt to return to a developing-country model of growth.”
Tags: Communicate, Conceptual thinkers, Education policy, Engineers Developing country, Government, Humanities, Japan, Law, MEXT, Rich, Service economy, Shimomura, Social sciences, Universities
The Economist (September 19)
“Corporate profits more than tripled in 1980-2013, rising from 7.6% of global GDP to 10%, of which Western companies captured more than two-thirds. The after-tax profits of American firms are at their highest level as a share of national income since 1929.” Yet a recent study suggests “the golden age of the Western corporation may be coming to an end.” The McKinsey Global Institute projects “that corporate profits may fall from 10% of global GDP to about 8% in a decade’s time.”
