Brexit, stagnant earnings and globalization

The British vote to leave the European Union was motivated by several factors and in nearly two-thirds of the seats held by the Labour Party (and in no less than four-fifths of those located in the North of England and the Midlands) a majority of voters voted to leave the EU − but across Britain as a whole, 63% of those who voted Labour in 2015 and who cast a ballot in the EU referendum, voted to Remain.

The Economist was more specific on how immigration impacted the vote: "Where foreign-born populations increased by more than 200% between 2001 and 2014, a Leave vote followed in 94% of cases. The proportion of migrants may be relatively low in Leave strongholds such as Boston, in Lincolnshire (where 15.4% of the population are foreign-born). But it has grown precipitously in a short period of time (by 479%, in Boston’s case). High levels of immigration don’t seem to bother Britons; high rates of change do." 

More than half Irish indigenous exports go to 4 Anglo-Saxon countries

Ryanair’s annual revenues in the 12 months to March 2017 were at €6.65bn. According to Enterprise Ireland indigenous tradeable exports in 2016 to Europe-excluding UK, Africa, Middle East, Russia, Central Asia and India, were valued at €6.95bn. UK exports were at €7.75bn and to US/Canada were at €3.74bn.

In 1973 when we joined the EEC about 55% of total exports went to the UK. Today the same ratio of indigenous exports go to 4 Anglo-Saxon countries: UK, US, Canada and Australia.

Even though there are more direct jobs in indigenous exporting firms, 201,100 at end 2016, compared with 199,900 in IDA Ireland foreign-owned (FDI: foreign direct investment) exporting client firms, it’s striking that the onset of Brexit has not focused attention on the narrow base of indigenous firms.

Irish myth of ultra-low French effective corporate tax rate

Source: US Congressional Budget Office

Since the Irish international economic rescue year of 2010 when Nicolas Sarkozy, then French president, suggested that the low Irish headline corporate tax rate of 12.5% should be raised, it has been commonly believed in Ireland that the French were hypocrites because they had even a lower effective rate than Ireland's, based on actual tax paid as a ratio of reported taxable income.

The 'Paying Taxes' annual report that is produced by PwC, the Big 4 accounting firm, for the World Bank, showed in that year that France had an 8.2% effective rate compared with Ireland's 11.9%.

Both these rates were misleading.

Irish Health Service: On money spent it should be among world's best

If it was only spending money that mattered in delivering a key national social service, Ireland would have one of the best health services among rich countries - there is something rotten in the hybrid public-private system that 6 health ministers starting with Micheál Martin in early 2000, have been unable to fix. Stripping out inflation, total health spending per head doubled in Ireland and UK in 2000-2016 and rose 37% in Germany; 38% in Denmark and 25% in France.

Ireland in 2016 was among the richest countries on per capita spending (adjusted for price differences between countries PPS) according to the OECD: Ireland- US$5,528; Germany $5,551; Denmark $5,199; France $4,600; Sweden $5,487; Spain $3,248; UK $4192. Europe's richest countries Norway and Switzerland spent $6,647 and $7,919.

The US per capita spending in 2016 was $9,892 compared with Canada's $4,644.

The above data relate to current expenditure. On investment in capital equipment/infrastructure, for some of the boom years at 0.6% of GDP (this denominator is inflated by a third due to tax avoidance etc) we tracked Norway; it was at 0.51% in 2013; 0.46% in 2014 and 0.39% in 2015 (this was the year of Leprechaun Economics when Ireland's GDP jumped 26% - so the realistic ratio was higher), while Denmark and France were at above 0.60% in each year.

Global consumer goods companies struggle with sales

Investors have been increasingly buying consumer goods companies' stocks with no growth and at unreasonable prices. The FT's Jonathan Eley explains why they still seem like worthy investments.

FT columnist Lucy Kellaway moves on after years of deriding corporate bullshit

July 2017: Financial Times (FT) columnist Lucy Kellaway has been writing on the strange and indecipherable language of chief executives and their companies for over 20 years. She looks back at a career of deriding the hot air and asks: has it made any difference?

　

FT columnist Lucy Kellaway says chief executives need to have a hard think before deciding to join Twitter. She looks at the successes and failures of CEO tweeters including Tim Cook, Marissa Mayer, Elon Musk and Warren Buffett.

　

After 31 years at the Financial Times, management columnist and associate editor Lucy Kellaway is leaving to start a new career as a teacher. In an FT Facebook Live discussion with Gideon Rachman, she explains her move.

Swiss basket of grocery items +91% more expensive than France in 2017

A Swiss basket of grocery items is +91% more expensive than France in 2017.

Switzerland is a wealthy country and the per head standard of living (based on consumption adjusted for price differences) is among Europe's highest. However, the rise in the value of the Swiss franc in recent years compared with the euro has made the country a very expensive place to visit and it is also bad news for low-income residents.

Uber gets a backseat driver as Kalanick exits top job

John Colley, Warwick Business School, University of Warwick

As the ride-hailing company Uber lurched from one clumsy mess to the next, it had appeared that CEO Travis Kalanick would somehow ride out the storm. His recent resignation is an admission that the company needs to explore new avenues.
I wrote recently about tech CEOs who had protected themselves from the usual pressure from shareholders, and were able to freely dictate strategy and culture. I’m happy to say that Kalanick’s departure from the top job (he will stay on the board) signals that there is indeed a line to cross where even disenfranchised investors can assert their power. It is not hard to see why: Uber is facing up to some tough decisions.

Two Swedish economists foresaw the backlash against globalisation — here's how to mitigate it

Rodrigo Zeidan, NYU Shanghai

The first article in the series Globalisation Under Pressure looks at work from the 1930s that anticipated the backlash against globalisation.

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Economists Eli Heckscher (1879-1952) and Bertil Ohlin (1899-1979) died more than three decades ago. But it’s fair to assume that neither would have been surprised by the underlying causes of Donald Trump’s election as president of the United States, or Brexit for that matter.

Their Heckscher-Ohlin (H-O) model of international trade – developed at the Stockholm School of Economics in the 1930s – clearly predicted today’s middle-class discontent bellowing at the ballot box.

Brexit: London's loss in euro trade

Financial Times: London's euro clearing dominance has been in the spotlight since the Brexit vote, as Europe would like this returned. The FT's Philip Stafford and Daniel Hodson, chairman of FSNForum and board member of Vote Leave, discuss the merits of such a move.

　

Thug Nation: Venezuela’s broken socialist revolution

FT Video: Once touted as a beacon of revolutionary socialism, today there are fears that Venezuela is on the cusp of becoming a failed state. Andres Schipani and Ben Marino report on the spiralling violence and economic, social and political crisis facing the oil-rich nation.

Last year 29,000 people were murdered in Venezuela

Seth Meyers and John Oliver show how Trumpcare will kill many Americans

On Monday the US Congressional Budget Office report on Trumpcare — the replacement for the health insurance system that the Obama Administration proposed for Americans without employer provided health insurance — estimated 14 million people losing insurance in the first year 2018 and 24 million by 2026, with premiums soaring for older, lower-income Americans. The CBO says Trumpcare would cut the annual budget deficit about $30 billion a year in a $19 trillion economy. It adds: “In 2026, an estimated 52 million people would be uninsured, compared with 28 million who would lack insurance that year under current law.” That’s a fifth of the non-elderly population left to fend for themselves, nearly double the current proportion.

Interview tricks of Trump's chief mouthpiece Kellyanne Conway

Kellyanne Conway has a supernatural ability to derail any interview that paints Donald Trump in a negative light. How does she do it?

　

Mika: Here's Why I Won't Book Kellyanne Conway | Morning Joe | MSNBC