Here's my Top 10 items from around the Internet over the last week or so. As always, we welcome your additions in the comments below or via email to bernard.hickey@interest.co.nz.
See all previous Top 10s here.
My must read is #6 on redistricting.
1. US recession coming? - This chart below from the US Federal Reserve showing the changes in its Labor Market Conditions Index helps explain why something funny is going on in the bowels of the US economy. The Labor market is just not doing what it should, which means the Fed is finding it difficult to put up rates.
Every time this conditions index has dropped this fast for this long, there's been a recession just around the corner.
2. Where's the Productivity growth? - One of the big puzzles globally right now is the strange absence of productivity growth around the world, despite all this amazing technology.
Even Janet Yellen from the Fed is worried, and said so in a speech this week.
The latest readings on the labor market and the weak pace of investment illustrate one downside risk--that domestic demand might falter. In addition, although I am optimistic about the longer-run prospects for the U.S. economy, we cannot rule out the possibility expressed by some prominent economists that the slow productivity growth seen in recent years will continue into the future.
3. NZ's woeful productivity record - This OECD chart tells the story of New Zealand's awful productivity record over the last 20 years. We are the fourth worst in the OECD over that period and we were the third worst over the last five years. We were way, way worse than Australia.
Lots of people are patting themselves on the back these days for economic growth, but unless we can lift GDP per hour worked then real wages are going nowhere fast.
4. Pathetic export performance - One of the big reasons for that woeful productivity record is our inability to grow the export part of the economy, thanks I would argue to our obsession with tax-free capital gains on property.
This chart (thanks to Michael Reddell at Croaking Cassandra for an excellent series of posts on this) tells the story. Its awful.
Successful economies, building on a sustainable footing, do so by selling more and different stuff in competition with the best the rest of the world has to offer. That doesn’t describe New Zealand at all – under this government or its predecessor.
We have
- no productivity growth
- a continuing high unemployment rate
- ruinous house prices, and
- a tradables sector that has achieved no per capita growth for 15 years.
5. Is this why people don't really believe? - This chart showing consumer confidence in the wider economy over the next five years has collapsed in the last six months to 25 year lows suggest a few people are working out the model is not working.
6. Wondering how Donald Trump happened? - You really need to understand how redistricting works to get a real handle on it.
Here's the New Yorker with a great summary of how the Republicans pursued a deliberate strategy of redrawing boundaries of congressional districts -- we'd call it Gerry Mandering -- to turn the map from blue to red.
The result, David Daley argues in “Ratf**ked: The True Story Behind the Secret Plan to Steal America’s Democracy” (Liveright), is a system so rigged that it hardly matters anymore who’s running for office.
Much of “Ratf**ked” is devoted to a Republican scheme optimistically called redmap, for Redistricting Majority Project. redmap was created in early 2010, at a point when the country’s electoral map was largely blue. In twenty-seven states, Democrats held the majority of seats in both houses of the legislature, and in six more they held a majority in one house. The Presidency, the U.S. Senate, and the House of Representatives were all in Democratic hands. To describe their own party, Republicans were using words like “wounded” and “adrift.”
And, as bad as things looked at the time, the G.O.P.’s prospects down the road looked even worse. In 2011, new census figures were due to be released, and this would trigger a round of redistricting. Republicans, Daley writes, were facing “a looming demographic disaster.”
7. Insane working hours - This piece in The Week takes a look at how the idea that working very, very long hours was a status symbol.
Research by the Center for Equitable Growth's Heather Boushey and Bridget Ansel, released last month, highlights something rather remarkable: access to longer hours has become a sign of privilege in American society.
The jobs where people are most likely to work over 40 or 45 hours a week are highly-paid professional positions like lawyers, business management, engineering, and finance. Low-income service jobs in health care, office support, the food industry, and the like are where people are the least likely to work long hours.
8. Perovskites - Vox reports on the great new hope for solar power.
In the future, solar power won't just come from bulky blue panels on rooftops. The solar panels of tomorrow will be transparent, lightweight, flexible, and ultra-efficient. We'll be able to coat shingles or skylights or windows with them — and it'll all be as cheap as putting up wallpaper.
And these solar cells will be made from a new material called perovskite.
9. Here's John Oliver on Brexit:
10. Totally Clarke and Dawe with some advice for Malcolm Turnbull.
51 Comments
Link the first items in your piece to the Free Market Economy Bernard and it all makes total sense. Can't grow continuously year on year on a finite world. And the Free Market economy results in less jobs, sinking real wages which means less spending power, less demand and so on. Rich getting richer, poor getting poorer, middle class sinking. Railroading America's democracy is another part of that picture. Difficult to fix when the Government itself is no longer interested in representing the people, and is more into looking out for it's own interests.
Pound Plunges as Early Results Come In
http://www.wsj.com/articles/u-k-pound-jumps-after-brexit-polls-close-14…
Lear to Social - pound pluges not because of Brexit because Britain has NOT left the EU but because the people dared to have a vote.
These people are just like terrorists in that they like to keep you living in fear.
Britain will be in the EU tomorrow guaranteed
Britain will be in the EU next month guaranteed
In fact it will take Britain at least 2 years to leave the EU
So why all the fear mongering now "Because you dared to have a say"
Real time Brexit results.
https://www.bloomberg.com/graphics/2016-brexit-referendum/
Productivity won't improve in NZ until the public services spending is strictly reigned in......they take too much in time and money to fund them. It is simple maths but gets lost on the socialists......
What are you exporting BH? Or are you too relying on other people to do it for you? The life of an exporter is a hard one it is far easier to take the P*^s out of everyone else.
Yellen really cracks me up. Should quit and write kids books about fairytales for a living really. Fed work like this: look at the data, look at the data, ignore QE, ignore fundamentals, continue looking at data, make sweeping threats of raising interests rates, do nothing, look at the data and scratch heads...
"The 2016 EU referendum is set to the biggest uprising against the people who run the UK since the Peasants Revolt in 1381.
Britain's bosses, politicians, church leaders, sports stars, bankers, economists and celebrities told the people to vote to Remain in the UK.
And (by the look of it now) the people sent back a massive V sign. Democracy indeed."
The vested interests could be in for a beating.
Absolutely has meaning, and I'm not intending to disparage that, but the level of rhetoric out of some outlets is just excessive.
Whichever way the final vote falls (and in all likelihood Leave looks to win) its going to remain a controversial and fractured topic for a while for the UK.
If you want ridiculous hype take a look at the outrageous nonsense trotted out by the remainders.
Anybody would think that the very idea of a sovereign, democratic nation was an untried, unworkable fantasy.
Good on the Brits if they've finally figured out they are being run by a foreign, unelected bureaucracy with God knows what agenda.
#7 there's an economically rational way to explain the longer-working-hours attractiveness.
The Affordable Care Act mandated insurance for 'full-time' workers, defining these as 30 hours or more per week. Below that cut-off, nada. YOYO coverage (Medicare, family safety nets etc).
Reaction from many industries (borne out in spades in the charts in the links): a lotta 29.995 hour jobs. http://fivethirtyeight.com/features/yes-some-companies-are-cutting-hour… The operative phrase is 'safe-harbor hours' http://obamacarefacts.com/questions/is-less-than-30-hours-part-time-und…
Unintended consequences rule: utopia slides towards dystopia etc etc....
#1 Bernard have you spoken to David about this?
David is constantly reminding us how great the US economy is doing
For example look at today's (Fri 24th) 90@9
http://www.interest.co.nz/news/82267/england-votes-us-data-positive-mar…
In the US, the number of Americans filing for jobless benefits fell last week to near a 43-year low. New home sales are running almost +9% above the same month a year ago. American June factory data picked up.
Everything is just rosy
#2, #3, #4, #4 (Redell) and #5. Productivity.
If you are surprised Bernard you misunderstand modern economic objectives. Success in the game does not come from efficiency - despite what they tell you. The way is to gain control. Central governments and Local Governments don't thrive because of efficiency, productivity or innovation. They prosper from establishing control of their income and outputs. Just try and change that and you will see the energy they will put into retaining their postion.
Privately owned industries are no different. Do you think the vast incompetence of Spark and Vodafone is because they don't manage well. No so. It's because they can profit from a captive market so all their skill is focused on maintaining their cosy position. Productivity is not an objective worth bothering about.
It's no different in energy, or with the banks. Control trumps productivity, innovation or efficiency every time.
Small business on the other hand seeks efficiency quite well, along with innovation and productivity. But in New Zealand they largely confined to the crumbs. And they have huge unavoidable outgoings to the monopolies.
If you think about it Bernard, this is true for the businesses you are personally involved with.
So key and nat supports please explain numbers 3 and 4 on the top 10 graph, or maybe just finally accept this government really has no idea and is doing a terrible job. The nats have no idea how to run a country properly.
There is a few things they are good at though, getting the country in billions in debt, muzzling anyone in the media that dare challenge them, spreading misinformation, faking economic growth by pumping immigration to record after record levels, and general dirty tricks.
Key and English will now be truly put to the test. Immigration was a major reason for Brexit yes vote and Kiwis are not gonna stand for much more of this mass immigration and Chinafication of Auckland. Would not be surprised if they run a snap early election as they are more likely to get back in now versus later next year.
52% of the uk has decided that it is willing to risk recession shows how unhappy they are about how their country is run. If there is a global recession it will only affect the global elite the majority are already in recession, with low paid jobs and no hope of ever buying a house.
The older generation were the same ones that were able to vote in the referendum to join the EEC. Perhaps having experienced both outcomes they are best placed to decide what is preferable.
The EU has been on shaky ground for a few years now. Perhaps getting out before it sinks is for the best.
Re #5
Brexit gets IMMIGRATION as its main cause according to some commentators.
Does this bit of local mistrust (the new low point in the 5 year expectation graph) in our future have any similar reason?
After all our immigration rate is three times that of UK on a per capita basis and a multiple of that again in Auckland !
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