Category Archives: Economics

Trade War with China: Who Wins?

We are now facing an escalating trade war between the US and China – started by the US. The question is: can the US win? And what will it cost the world?

It is worth listening to Carlos Gutierrez, co-chairman at Albright Stonebridge Group, a major global corporation and former U.S. Commerce Secretary who spoke on 18 June on “Bloomberg Daybreak: Americas”:

He reminds us that the free-trade agreements that have been brokered since the 1980s are not as bad as Trump would have it: they have consistently given the US a surplus. The point is: There never was a similar agreement with China. And he doesn’t mince words in describing the dangers for the whole world. He urges restraint.

Clearly Trump is not listening. A few hours after Gutierrez talked to Bloomberg, Trump had threatened an additional 10% tariffs on another $200 billions worth of goods:

Trying to answer the question of “who wins a trade war”, Bloomberg has rounded some major experts asking them what they thought. While the answers are interesting, they all focus on the short term and unfortunately don’t go beyond are the framework of classical economic analysis which overlooks geo-political factors:

  • China has limited room to retaliate in a trade war escalation: It only buys $130 billion worth of American goods while the US deficit with China runs to $375 billion; this is a “high stakes game of poker” and “China will run out of U.S. imports that it can hit with tariff countermeasures long before the U.S. does” (Rajiv Biswas, IHS Markit Singapore);
  • China needs to open up to global innovation and investment: “both China and the U.S. and other countries can really benefit from this Made-in-China 2025 strategy” (William Zarit, chairman of American Chamber of Commerce in China);
  • This is creating a “perfect storm” for China’s export Industry: it’s not just Trump’s tariff war but also the probable US Senate ban on ZTE, the Chinese electronic producer that Trump wanted to save; such a ban would  stop it from importing the American chips it needs for its phones and other products, hitting at the very heart of Made-in-China 2025 strategy;
  • There will be winners and losers, for example, China will need to buy agricultural goods from other sources than the US and that will benefit countries like Australia and Brazil; many Asian countries that are part of the China value chain will be hit.

Instead, to evaluate the dangers from a trade war, we need to look at the longer term and more broadly to geo-political factors. And here, the picture is not so reassuring.

The trade war with the US is but a battle in a much larger war. A battle that surely hurts in the short run, but will leave China victorious in the long run. Because China has acquired the “soft power” weapons to win.

Forget the Trade War: China’s Soft Power is Poised to Conquer the World

What has been happening since Trump took over the White House is this: A political void has been created, a void in world leadership that China is eager to fill, and most likely will.

Consider the facts.

Read the rest on Impakter, click here.

Advertisements

Leave a comment

Filed under Economics, politics, Uncategorized

Trump Watch: G7, the Gig is Up!

The G7 fiasco was not entirely a surprise, but the extent of the damage done is stunning. Here’s my assessment of the future of the G7 (it’s coming up against China-led Shanghai Cooperation Organization that met at the same time as the G7!). The article is on Impakter, here is the opening:

This G7 was like no G7 ever since it was founded in 1997.  Even before leaving for Canada, Trump rocked the boat, suggesting the G7 should be a G8, with Russia back in – conveniently forgetting why Russia was kicked out in 2014 (for invading Crimea and abetting rebels in Eastern Ukraine).

Then he turned up late. A bilateral meeting with Macron had to be postponed. He missed most of a working breakfast on the issue of women, he skipped the climate change meeting. He left nearly a whole day early to fly to Singapore for his “historic nuclear summit” with North Korea’s dictator – even though this meeting is still two days off.

In the end, Trump blew it up, refusing to sign onto a joint communiqué he had agreed to before leaving. Expect the G7 never to be the same again – at least not until America produces another President.

In his news conference before leaving, Trump was his usual aggressive self, grousing about unfair tariffs slapped on the United States by its closest allies – a claim roundly rejected by economists. Far from being huge as Trump claims, average trade-weighed tariffs are marginal: the latest WTO data (2015) shows that for the EU they stood at 3 percent, Canada at 3.1 percent and the US was slightly lower, at 2.4 percent.

The problem is that they vary by product and in the US, states slam on additional barriers. Not to mention Buy American laws that keeps foreigners out of US government procurement. Moreover, it appears that Trump confuses the European VAT for a tariff. In short, the US trade deficit is not caused by tariffs but by Americans’ purchasing preferences.

Once on the plane, he tweeted his withdrawal, threatening future tariffs on automobiles and accusing Trudeau of “false statements”:

Then he doubled down with insults, calling Trudeau “very dishonest and weak”:

Something like this has never happened before, and the fact that the American President did it makes it a watershed event. It’s not just a matter of being astonishingly rude to democratically elected colleagues. It’s a matter of starting a trade war with allies that jeopardizes America’s leadership and threatens global prosperity. World politics won’t ever be the same again.

Read the rest on Impakter, click here.

Leave a comment

Filed under Economics, European Union, politics, Uncategorized

Can Cryptocurrencies Ever Become Reliable Means of Exchange?

This is the third article in the Impakter magazine series about Bitcoin. Written by my sociologist friend Hannah Fischer-Lauder, it explores the question of what is needed to make cryptocurrencies usable as means of exchange. Here’s the beginning:

On 23 January, Stripe, the major firm that supports Bitcoin payments – it does so for more than 100,000 businesses online –  announced that it would start winding down its support immediately and stop all transactions by 23 April.

A thunderbolt in a clear blue sky that caught many Bitcoin investors unprepared, did it mark a watershed in the history of digital currencies?

The above describes Stripe services (September 2015) SOURCE: Kineticgrowth.com

If Bitcoin cannot be used as a means of exchange in a potential market of 100,000 businesses, then, surely, it is the end of its role as a currency – after all, enabling transactions is one of the two fundamental roles of currencies. The other is acting as a store of value. And we all know how that went, with Bitcoin’s infamous volatility.

Let’s put the Stripe decision in perspective.

Read the rest on Impakter, click here.

Comments Off on Can Cryptocurrencies Ever Become Reliable Means of Exchange?

Filed under Business, Economics

Bitcoin World: What Next?

I’m starting a series on cryptocurrencies, this is the first article, just published on Impakter:

ICOS: THE RISKS AND HOW TO ADDRESS THEM

 



Recent good news got lost in the midst of a flurry of bad news that shook the Bitcoin world at the end of January, causing a meltdown, with Bitcoin losing two-thirds of its value since hitting a peak of $20,000 in mid-December. Professor Roubini told Bloomberg that Bitcoin is “much worse than the Tulip mania”, that it’s the “mother of all bubbles”. At the time of writing, Bitcoin is still crashing, with no end in sight, though it is still significantly higher than the $900 value recorded a year ago (January 2017).

Among the avalanche of chilling events: the $530 million hack of Coincheck, a Japanese cryptocurrency exchange followed by a raid on the exchange by the Japanese authorities to check whether they had enough funds to repay customers; the Facebook ban on cryptocurrency ads; India’s Finance Minister declaration that cryptocurrencies would not be recognized as legal tender; the subpoena U.S. regulators sent to two of the world’s biggest cryptocurrency players, Bitfinex exchange and Tether, arousing suspicions of price manipulation; the announcement by major American banks (JP Morgan Chase, Bank of America and Citigroup) followed by a UK bank (Lloyds) that, starting in February, they would no longer allow their clients to purchase Bitcoin with credit cards; South Korea Customs Service’s disclosure of illegal Forex tradings of some $600 million worth of cryptocurrencies; North Korea accused of hacking cryptocurrencies and stealing billions of wons;  the finding by a leading cyber security firm that hackers make on average $100 million a year stealing from “miners”.

And yet amongst the wreckage there was some optimistic news. One was the declaration on 31 January from the South Korea Finance Minister that there was no plan to outlaw digital coin trading, which countered an earlier ban announced by the Minister of Justice in September last year.

The other came from the South China Morning Post that announced on January 31 that the Hong Kong authorities would not ban cryptocurrencies but launch in March “a campaign to educate the public” highlighting that “cryptocurrencies have fluctuated in price, are not backed by any physical commodity or the issuer, and are subjected to hacking risks.” Leo Weese, chairman of the Hong Kong Bitcoin Association, is strongly supportive: “We should know the difference between what makes a good ICO [and what doesn’t]” he said, “and how we differentiate between scams and legitimate projects.”

He has good reason to feel this way: ICOs (Initial Coin Offerings) are the vital lymph of cryptocurrency exchanges and for them to function well, there needs to be trust in their legitimacy.

Read the rest on Impakter, click here.

Comments Off on Bitcoin World: What Next?

Filed under Digital Revolution, Economics, politics

Bitcoin: The First Digital Ponzi Scheme

If you had invested $100 in Bitcoin in 2011, two years after it was invented, and if you had held onto it through the 2014 crash, when Mt. Gox, the biggest Bitcoin exchange, collapsed, today you’d have (almost) $4 million in your pocket.

That’s what the Winklevoss twins of Facebook fame and founders of the Gemini exchange did: They are, historically, the first believers and biggest investors in Bitcoin and today, now that they’ve turned bitcoin billionaires in 2017 (the only ones so far), they continue to believe in it, saying they won’t give it up, that “long-term, directionally, it’s a multi-trillion dollar asset”.

2017 was a special year. By December, the valuation of Bitcoin and the 700+ digital currencies that it has spawned had grown explosively, from less than $1,000 per bitcoin to over $15,000. 2018 is not looking so good, market cap is falling, but still high:

As shown above: By end 2017, total market capitalization (value) of all digital currencies exceeded $750 billion, though it is now falling fast and stands well below that value (520 billion on January 17, 2018): this is still and extraordinary multiple (16 times) of where it was a year ago SOURCEGLOBAL MARKET CAPITALIZATION CHART 28 April 2013 TO 17 January 2018 

On 17 January, Bloomberg spoke of a 26% slump noting that “traders brave the volatility” though some (rightly) worry about the growing threat from government regulations.

SO WHERE ARE WE GOING WITH BITCOIN?

To find out, read the rest on Impakter, click here.

2 Comments

Filed under Business, Economics, politics, Sociology, Tech

Cocaine: The Hidden Cost – Environmental Destruction

This is the second of a two-part article investigating cocaine, just published on Impakter. Part One surveyed the cost in human terms, focusing on Colombia, the world’s top coca producer (see here). Part Two investigates the environmental destruction caused by cocaine and also takes a look at Peru.

Uncle Sam’s fumigation program in Colombia has added a grim dimension to the environmental devastation that is, in any case, inherent to coca production when it is made illegal. When coca fields are mechanically torn up by the army or the police, farmers are pushed deeper and deeper into the jungle to clear more areas to grow coca along with the food needed for their own sustenance.

IN THE PHOTO: RAINFOREST PHOTO SOURCE: ANAHI MARTINEZ ON UNSPLASH

But when coca fields are sprayed with potent herbicides, fumigation turns the fertile earth into a desert, threatening local farmers’ health. In fact, for decades, Colombia has been the only government in the world that has allowed aerial herbicide spraying of coca, hurting its own population. But it did so at the bidding of the United States that ended up paying US$ 2 billion for the spraying.

An extraordinary cost to the American taxpayers with zero results in terms of reduced cocaine supplies.

It had, however, very measurable results in terms of environmental destruction of Colombia’s rainforests – precious not just for Colombia but for the whole world, as they act as major carbon sinks, playing a key role in stabilizing global climate.

To read the rest, click here. I feel very strongly about the conclusion of the article: The solution, in my opinion, is not yet another “war on drugs” to try and limit cocaine supplies (it never works) but treatment to limit demand. Addicts are not children to be punished, they are people who need our help. Your views?

Comments Off on Cocaine: The Hidden Cost – Environmental Destruction

Filed under Economics, Health, politics, Sociology

Cocaine: The Hidden Cost

My latest article, just published on Impakter:

A TRAIL OF BLOOD (PART ONE)

This is the first of a two-part article investigating cocaine. Part One surveys the cost in human terms, focusing on Colombia, the world’s top coca producer, while Part Two investigates the environmental destruction caused by cocaine.

On August 10, President Trump told reporters he was getting ready to “declare the opioid epidemic a national emergency”, in response to a chilling report from the White House commission on the opioid crisis, that said “142 Americans die every day from a drug overdose”, a death toll “equal to September 11th every three weeks”. Trump promised “a lot” would be done to stop drug flows into the US and ensuring young people never use drugs but he didn’t mention access to treatment. And it is not clear exactly how he would proceed, particularly now that natural disasters wrought by hurricanes Harvey and Irma demand attention.

So far, Congress has done little except pass the 21st Century Cures Act that was signed into law by President Obama in 2016. It added US$ 1 billion over two years for drug treatment and disbursement has just started.  Yet Trump talks up the role of the border wall and law enforcement while his proposed budget and congressional efforts to take down Obamacare are going in the wrong direction, preventing access to insurance to pay for treatment.

At state level, the move away from a criminal justice fix to the drug problem has been patchy at best. One reporter from Vox found that at least fifteen states followed Kentucky’s example of tightening penalties for low-level drug offenders, increasing mass incarceration rather than offering treatment.

Yet treatment is key.

The rest of the world, if not the US, has moved on past the obvious failure of the “War on Drugs” to focus on non-military, non-police, non-legal measures as possible solutions. That’s where improved access to treatment comes in. It is part of the UN Agenda 2030 and the Sustainable Development Goal 3, specifically target 3.5 which reads: “Strengthen the prevention and treatment of substance abuse, including narcotic drug abuse and harmful use of alcohol .”

Unfortunately, even within the United Nations, the political discourse is largely focused on other issues, like eradicating poverty as evidenced by the latest “outcome report” of the high-level “political forum” (10-19 July 2017), a ministerial meeting that reviews progress on the SDGs every year. Only one sentence addressed the drug problem: “We reiterate the need to strengthen the prevention and treatment of substance abuse.” Surely stronger statements are required, more needs to be done.

Yet the US-waged “War on Drugs”, started some 60 years ago, and costing an estimated US$ one trillion should have taught us a lesson. It began when President Lyndon Johnson first proposed a toughening of penalties for drug trafficking in 1968; it ballooned with President Nixon in 1971, coming to Colombia, Peru and Bolivia. Whatever improvement America was able to achieve at home, it quickly vanished: Since 2009 there are more deaths from drug poisoning every year in the US than from firearms, motor vehicle crashes, suicide and murders, said a recent US DEA report.

Meanwhile, in the Andean countries, the war left a devastating legacy, clearly traceable to US aerial fumigation programs to stop coca cultivation and anti-narcotics policing that quickly spiraled into full-scale civil war, particularly ferocious in Colombia, pitting Marxist-inspired guerillas against the central government. The war in Colombia lasted until 2016 when the Revolutionary Armed Forces of Colombia (FARCs) agreed to a peace deal with the government, but not before there were some 200,000 dead and five million people forced out of their home.

The lesson from History is clear:  fighting drug trafficking through military or police means solves nothing.

The US is the World’s Largest Cocaine User

The latest report (March 2017) from the Office of National Drug Control Policy on global cocaine trafficking confirms that the US is the largest cocaine user, consuming one third of world production.

Cocaine is known as a “rich man’s drug”, though one form, “crack cocaine” (smoked, not snorted) being much cheaper, is widely used in inner cities and by black communities, ensuring that the drug is prevalent in all social strata.

Cocaine is the second most popular illegal recreational drug in both Europe and the United States behind marijuana. More people use cocaine than heroin, and the number of cocaine users keeps rising (26 percent more in 2015 compared to the previous year, according to the U.S. National Survey on Drug Use and Health).

The street value of cocaine gives an idea of its importance as a recreational drug.  One calculation, often cited, is based on a model developed in 2005 by the UN drug agency (UNODC) which estimated that the US cocaine market exceeds some US$70 billion in street value per year. This is likely to be a conservative estimate but still true today considering that cocaine prices have been (slightly) dropping over the past decade.

US$70 billion spent on cocaine is a lot, as much as Americans spend on playing the lottery, more than on books, video games, movies and sporting events combined (2015 data) – none of which have the devastating impact on health that cocaine has, particularly from chronic use.

PHOTO CREDIT: HÄGGSTRÖM, MIKAEL (2014). “MEDICAL GALLERY OF MIKAEL HÄGGSTRÖM 2014“. WIKIJOURNAL OF MEDICINE 

Coca Production on the Increase

Increased drug supplies mean more deaths: cocaine-related deaths in the United States have increased by about 60 percent since 2010, according to the United States Centers for Disease Control and Prevention.

What makes the situation increasingly dangerous, is that production of cocaine in Colombia is higher than ever: according to the UN, it reached 866 metric tons in 2016, a 34 percent increase over 2015 when the war was still on-going. And that’s 200 million tons more than the average annual production of cocaine a decade ago (it stood around 650 million tons).

But some believe the UN data is too conservative.

Read the rest on Impakter, click here

Comments Off on Cocaine: The Hidden Cost

Filed under Economics, Health, politics, Sociology, Uncategorized

The American Dream is Dead, Long Live the American Dream!

My latest article on Impakter that I wanted to share with you:

THE AMERICAN DREAM IS DEAD, LONG LIVE THE AMERICAN DREAM!

BOOK REVIEWS: REQUIEM FOR THE AMERICAN DREAM: THE 10 PRINCIPLES OF CONCENTRATION OF WEALTH AND POWERBY NOAM CHOMSKY, PUBLISHED BY SEVEN STORIES PRESS (MARCH 2017); THE VANISHING MIDDLE CLASS: PREJUDICE AND POWER IN A DUAL ECONOMY BY PETER TEMIN, PUBLISHED BY MIT PRESS (MARCH 2017)

In a raft of bestselling books this year, our thinking elite has announced the demise of the middle class and the “American Dream”. At the heart of that “dream” is the idea that every generation, through hard work, would come out better off than the previous one. Of course, the 2008 Great Recession put a serious dent in the notion and Occupy Wall Street in 2011 pointed the finger at income inequality (it’s the One Percent!). In 2014, French economist Thomas Piketty’s magnum opus, Capital in the 21st Century, provided definitive scientific confirmation to every man’s perception that middle class income had been stagnant for decades, that the ultrarich was getting richer at the expense of everyone else.

Two important books from MIT luminaries addressing this issue came out in the same month (March 2017): Noam Chomsky’s Requiem for the American Dream and Peter Temin’s The Vanishing Middle Class. They both caused waves, loudly proclaiming that the American Dream is dead.

But can we really declare the American Dream dead? Both authors make suggestions though perhaps neither offer definitive solutions. That might require something more than a new set of policies and some people are beginning to talk about it. Recently New York Times journalist David Brooks suggested in an Op-Ed that “Trump is not just a parenthesis.” He is “the farcical culmination of a lot of dying old orders — demographic, political, even moral — and what comes after will be a reaction against rather than a continuing from.”

A lot of “dying orders” and one of them is the American Dream. It is essentially what kept the lights on in the “city on the hill”, the beacon that famously attracted the tired, poor and huddled masses to America – to paraphrase the American poet Emma Lazarus.

REQUIEM FOR THE AMERICAN DREAM

At the outset, it is striking how different Noam Chomsky’s Requiem is from all the other books he has written. It is far more accessible than the academic fare he has accustomed us to. Chomsky has taught at MIT for fifty years and he is one of America’s foremost thinkers, the most famous voice of dissent on the left. He is also an innovative linguist, credited with revolutionizing the field and as a political philosopher, the author of several seminal books, notably 9/11: Was There an Alternative?   considered the most influential post 9/11 book both at home and abroad.

The reason for Requiem’s greater accessibility probably derives from the fact that it is, bottom line, a movie tie-in. Based on the documentary of the same name released in April 2015, it encapsulates and builds on the main ideas presented in the film.

To read the rest, including about Peter Temin’s book and a possible solution suggested by Courtney E.Martin in a famous TED talk, click here 

Enjoy! These books are seriously good summer reading…

Comments Off on The American Dream is Dead, Long Live the American Dream!

Filed under Book review, Economics, non-fiction, politics, Sociology, Uncategorized

A New Class is Born

Here’s my latest article on Impakter. A must read for anyone concerned with what is happening to the middle class in America! It’s changing, and changing fast and in unexpected ways…

Book Review: The Sum of Small Things: A Theory of the Aspirational Class by Elizabeth Currid-Halkett, published by Princeton University Press (May 2017)

Have you ever wondered why in an America replete with 13,000 Starbucks stores, small bars serving totally unknown, unbranded coffees can survive, and even thrive though the coffee they sell may be more expensive?

These are “single origin specialty coffees”, like the ones served by the Intelligentsia coffee company that practices “direct trade”, working with farmers in Guatemala and elsewhere, removing the middleman:

IN THE PHOTO: DIRECT TRADE PRACTICE, LOCAL FARMERS BECOME PARTNERS. SOURCE: INTELLIGENTSIA COFFEE.COM

As explained on their website, the company adheres to sustainable farming and environmental practices and, at the same time, is committed to “paying above FairTrade prices for truly outstanding coffee”. The point is “responsible stewardship of the land and a sustainable business model” for the farmers whom they view as “partners”.

Also, to deliver quality coffee, special rapid roasting machines are used, including some of the last highly prized Gothot Ideal machines that date back to the 1940s and 1950s – they were produced by a German manufacturing firm founded in 1880.

Intelligentsia started off with a coffee shop in Chicago in 1995, and now they are present in four more cities, New York, Los Angeles, San Francisco and Atlanta. (In the photo: Logan Square Coffee Bar, in Chicago, one of Intelligentsia’s locations. Source: IntelligentsiaCoffee.com)

It is one of the many fascinating cases reported in Elizabeth Currid-Halkett’s latest book, The Sum of Small Things: A Theory of the Aspirational Class. Do read it this summer, it will change forever the way you view the American middle class. And it will give you a glimpse of what is ahead.

This is not the work of a neophyte. She is a Columbia University graduate and currently a professor at the University of Southern California (USC) where she holds the James Irvine Chair in Urban and Regional Planning and is professor of public policy at the Price School. Most recently she has contributed to a paper co-curated by USC and the World Economic Forum (WEF) on consumption patterns of the rising global middle class – more on this later.

The Sum of Small Things is her third major book after a couple of well-received works focused on art, high fashion and celebrities, and it is remarkable on two scores: the importance of the theme addressed – the rise of a new elite class in America – and the ground-breaking methodology used. The academic community was quick to take note, notably Tyler Cowen, author of The Complacent Class and Richard A. Easterlin, of Easterlin paradox fame (the idea that there is a disconnect between economic growth and happiness).

This is a book that manages to pull together a huge amount of data, for the first time mining American consumption data (the Bureau of Labor Statistics Consumer Expenditure Survey) that is usually ignored by researchers because of its complexity. The book draws conclusions that are both insightful and yet highly readable. The trick was to separate the “boring stuff” – all those statistical analyses that occupy a huge part of the book – from the chapters presenting the findings. Those chapters are given pride of place upfront; they are written in elegant English and filled with interesting anecdotes and observations that enliven the discourse and brings it home.

Many people will recognize themselves in this portrait of a new elite in America, that the author has aptly named “the aspirational class”.

In fact, among Amazon customers reviewing this book, several have said exactly that. One reader who defined herself as a “doctor and Mom” noted with surprise: “Our obsession with what our kids eat, their education and music lessons and the breastfeeding felt like a complete insight into my life! I live in Manhattan and we are dealing with the same issues and pressures as the moms in California.” Another wryly remarked, “As a reluctant member of the very class the author describes, I’ve been conscious of the quirky spending characteristics of my hipster cohort in all the places where I’ve lived as an adult (Brooklyn, Washington DC, and LA naturally) but never had an organizing theory for what I was witnessing. The author articulates these principles beautifully, and backs them up with interesting data. Despite its scientific rigor, this is a quick, fun and accessible read.”

It is indeed fun and accessible, which, considering the hefty subject matter, is a feat in itself. The last time a similar effort was made to analyze a rising new class in America was over hundred years ago: It was a stiff treatise written in wooden English yet it was replete with arresting descriptions of the habits of the new rich. And that is what salvaged it from oblivion. Today, it is best remembered for coining a couple of unforgettable terms, “conspicuous leisure” and “conspicuous consumption”.

I am speaking of course of the Theory of the Leisure Class (1899), the magnum opus of social critic and economist Thorstein Veblen. His book defined the Gilded Age, and gave a theoretical framework to those lampooning the “robber barons”.

 IN THE PHOTO: “THE BOSSES OF THE SENATE”, 1889 LITHOGRAPH FIRST PUBLISHED IN PUCK. CARTOONIST JOSEPH KEPPLER DEPICTS THEM AS GIANT MONEYBAGS REPRESENTING THE NATION’S FINANCIAL TRUSTS AND MONOPOLIES, THE COPPER TRUST, STANDARD OIL ETC. SOURCE WIKIMEDIA

Likewise, Currid-Halkett’s book aims to define our age, as the title of the first chapter suggests: “The Twenty-first Century ‘Leisure’ Class”. She uses Veblen’s concepts as her starting point and makes some illuminating comments, for example, pointing out that with industrialization and mass production, conspicuous consumption “goes mainstream” and became a defining feature of the middle class in its heyday, in the 1950s and 1960s.


To find out more, read the rest on Impakter, click here.

Comments Off on A New Class is Born

Filed under Book review, Economics, politics

The Real Impact of US Withdrawal from the Paris Climate Accord

I am happy to reblog this Editorial Board piece of Impakter Magazine, I wholly subscribe to what is said here and it really needs to be said.

THE REAL IMPACT OF US WITHDRAWAL FROM THE PARIS CLIMATE ACCORD

by MICHELE BONANNO on June 10, 2017

IMPAKTER EDITORIAL BOARD

 

President Trump’s withdrawal from the Paris Climate Agreement is likely to have two major consequences. The first is environmental, the other political.

Starting with environmental impact. It will be bad for the planet, but it will be bad primarily for the United States.

Above all, it means that the Federal Government will play no supporting role in the move to a non-fossil fueled economy, in total contrast to what governments of all other countries plan to do and are already doing. This leaves the United States at a clear disadvantage in the concert of nations. And it is already happening, to see this go no further than India, the world’s third largest polluter after China and the US: Prime Minister Modi has made abandoning coal-fueled electricity an official policy. India is embracing green energy because it is both cheaper and cleaner.

Can the American private sector fill in the void left by the Federal Government? Probably. The momentum is there, California is committed to a carbon-neutral future and California is a big player among American States with its 80 million people. Moreover, many States are following its example.

Equally important: Hundreds of American corporations have pledged to reduce their carbon footprint and have done so most recently in an open letter on the Wall Street Journal. Perhaps not all signatories are serious about fighting global warming, some have been caught funding anti-climate lobbies. But eventually their “green washing” is likely to turn into the real thing, as consumers and public opinion hold them to their pledge.

Yet, because the American economy will be lacking any Federal stimulus as environmental protection policies are eliminated, it is likely that job creation will be slowed down in what are today the more technologically advanced sectors of the economy. The new green energy sector won’t get the subsidies and tax breaks it needs in contrast to what will happen in other countries. Meanwhile, deregulation of American fossil-fuel industries that already enjoy tax breaks and subsidies will sustain their expansion.

This brings up an issue that has not been sufficiently raised in the media: The public health cost of an expansion in fossil-fueled industries, a cost that President Trump has not factored in. He has talked in terms of defending American jobs in the fossil fuel sector, he has never mentioned the loss of American lives and productivity, as people get sick.

A surge in coal production and fracking will clearly threaten the quality of water and air, this is not a matter for conjecture. The data is in, we can calculate the impact of diseases related to air and water pollution, and tally up the early deaths and cost to the Gross National Product in terms of increased cost care and work hours lost, and worse, the number of deaths. The numbers are staggering. For example, a recent scientific report on air pollution caused by energy production in the U.S. over a decade (2002-2011) concluded that, while there was an improvement as fossil fuel-industries were cut back, the damage still amounted to at least $131 billion in the year 2011 alone, thus confirming the success of more stringent emissions regulations on the energy sector while also pointing out the need to continue cracking down. A need that went unheeded by the Trump Administration.

To read the rest on Impakter, click here.

Comments Off on The Real Impact of US Withdrawal from the Paris Climate Accord

Filed under climate change, Economics, politics