Monday, December 10, 2018

US vs China Tech War raising risk of Thucydides Trap? Part 2

The agreement at the December 1 presidential dinner meeting of the US and China following the G20 summit in Buenos Aires, to freeze further moves on tariffs during a 90-day period when the two countries would seek agreement on trade and other issues, was followed with typical Trumpian exaggeration and confusion. Then mid-week American prosecutorial overreach highlighted the tech war between the two giant economies as the US seeks to contain the emergence of China as a global technology power.

Sunday, December 02, 2018

EU GDP per capita outpaced UK and US in 2000-2018

Andrew Sentance, who was a member of the Bank of England’s (BoE) interest-rate setting committee in 2006-2011, this week posted on Twitter the first chart here, showing that in the period 1972-2017, average GDP per capita of the G7 (Group of Seven industrialised nations) was highest in Japan, followed by the United Kingdom, the United States and Germany, Canada, France and Italy.

Tuesday, November 13, 2018

Brexit, Keynes and facts that don't change

Facts don’t change and there is no evidence that John Maynard Keynes (1883-1946) ever wrote or said "When the facts change, I change my mind. What do you do, sir?” Neither is the quote "If the facts don't fit the theory, change the facts," attributed to Albert Einstein (1879-1955), authentic.

Monday, November 12, 2018

The United States has a trade surplus with China - Part 1

Xi Jinping, the Chinese president, meets with Henry Kissinger, former US secretary of state, at the Great Hall of the People in Beijing, China, Nov. 8, 2018. The 95-year old Kissinger, who first visited China in 1971 to pave the way for the rapprochement between the US and China, is likely the most admired American in the former Middle Kingdom. (Xinhua/Pang Xinglei)

Reality Check: The United States has a trade surplus with China, which maybe surprising as a trade war exists between the two countries — official data distorts the real trading situation, which ignore sales by majority-owned US multinational affiliates in China.

Friday, November 02, 2018

Rupert Murdoch and the poisoning of American politics

Rupert Murdoch, the Australian immigrant, who founded the US cable industry’s conservative firebrand network in 1996, on Tuesday this week was given the award of ‘legend’ in New York by the American Australian Association, which had been founded by his father Sir Keith Murdoch in 1948.

"I believe in the good purpose of life, in the beauty of the universe, and the high destiny of man,” the 87-year old who had big successes in extending the family media empire to both Britain and the United States, said in quoting the words of his father. “I believe in the power and the spirit and triumph of the good in heart, " he added.

Monday, October 29, 2018

Ireland among low-voting nations in Europe

Michael D. Higgins was re-elected on Saturday as President of Ireland to a second 7-year term. In the election, 40% of the voting age population voted while the turnout of registered voters was 44%. President Higgins’ vote was 22.5% of the voting age population (VAP) based on the CSO’s (Central Statistics Office) estimate in 2018 of the 18+ population.

Wednesday, October 24, 2018

Similar economic structures fuel Ireland’s high Brexit risk

Despite the gulf in the sizes of the economies of the Republic of Ireland and the United Kingdom, they have similar economic structures — in particular, a high reliance on foreign direct investment (FDI) — which raises the Brexit risk for the Irish economy.

Sunday, October 07, 2018

Trump's rallies evoke spectacle of public lynchings in America

This week The New York Times in a major investigation revealed that the Trump family led by Fred Trump (1905-1999) was a criminal enterprise which had engaged in “instances of outright fraud” in evading taxes on the transfer of assets to his children. Also this week, Donald Trump with a history of sexual abuse of women and the most overtly racist president since Woodrow Wilson, was in Mississippi, in the Deep South, for a rally where the white family crowd, some with children, cheered the vile mockery of Prof Christine Blasey Ford, who has alleged that a drunken Bret Kavanaugh, the new Supreme Court Justice, had tried to rape her when they were both teenagers. 

Wednesday, October 03, 2018

Dublin to run out of rezoned residential land in 4 years — Part 3

Dublin will run out of rezoned residential land in 4 years according to an official of the Dublin City Council.

The city of Paris is divided into twenty arrondissements municipaux — administrative districts. The area is 105 km2 (kilometres) and with a population of 2.2m, it has a density of about 21,000 people per km2 — one of the highest in Europe. The area of the city of Dublin is 115 km² and the 2018 population is about 565,000The density is 4,910 inhabitants per km².

France's capital city is the core of the Paris Region called Île-de-France with an area of 12,011 km2 where about 12m people live. Its population density in 2018 was 1,019 per km2. The area of County Dublin is 921 km² and its population in 2016 was 1,345,402, giving a density of 1,461 per km².

Thursday, September 27, 2018

Trinity College Dublin and its Innovation District dream

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Trinity College, Dublin (TCD), founded in 1592, has announced an aspiration for a “new Innovation District, with a new university campus at its heart” that would be ”a vital step in enabling Dublin to be ranked as a top 20 global city for innovation.”   

We aim to make Ireland the tech capital of Europe and we have many of the ingredients to succeed,” Leo Varadkar, the taoiseach (prime minister), wrote in a July 2018 promotional brochure on the aspiration. “The evidence is all around us as we see so many high tech companies located here.”

Friday, September 14, 2018

Shortage of STEM graduates a myth in Europe and US

STEM is an acronym for science, technology, engineering, and mathematics and because of the importance of innovation for growth in a modern economy the term that was coined by the US National Science Foundation, has become a buzzword in many countries.

The high tech sector has been crying wolf for many years about the shortage of STEM graduates but there is no shortage and the motivation is to have a big pool that would enable it to select the cream.

Sunday, September 09, 2018

Epic failure of global war on drugs under lead of US

The United Nations Office on Drugs and Crime (UNODC) in its ‘World Drug Report 2018’ published in June 2018, reports that 275m people worldwide — roughly 5.6% of the global population aged 15–64 years — used drugs at least once during 2016. Cannabis which comes in 3 forms (marijuana from dried flowers and leaves; hashish made from the resin [a secreted gum] of the cannabis plant and hash oil, the most potent) accounted for illicit use by 70% of the drug-taking population.

UNDOC said cocaine manufacture in 2016 reached the highest level ever reported dominated by Colombia while from 2016-2017 global opium production jumped by 65%, with a rise in yields in Afghanistan — years of eradication efforts by the US in both countries had got nowhere.

However, it’s synthetic opioids, not the traditional plant-based ones that have the greatest danger, accounting for about 49,000 overdose deaths from a total of over 72,000 in the US in 2017 (this is likely an underestimate). In Canada in 2017 (population 37m, 11.3% of US level) there were more than 4,000 overdose deaths — more Canadians are now dying of overdoses than motor vehicle accidents and homicides combined.

Tuesday, September 04, 2018

Irish jobs top 2007 bubble peak as rural villages in peril

Last week data on jobs in the Irish economy showed that total employment in June 2018 had exceeded the peak property bubble total of 2.252m in September 2007, by almost 3,000 people. Meanwhile, an announcement by An Post, the state postal service, that it proposed closing 159 rural post offices in 25 of the 26 counties, raised fears that many villages would face a slow death. The service said its remaining 960 post offices would benefit from "investment and consolidation."

Last November the Government approved €30m of State funding to protect the future of the postal network. 

Also last week, the Central Statistics Office (CSO) reported that the number of immigrants to the State in the year to April 2018 was estimated to have risen by 6.7% from 84,600 to 90,300 while the number of emigrants fell over the same period, from 64,800 to 56,300 (-13.1%) resulting in net Irish inward migration in 2018 of 34,000 — the highest level of net inward migration since 2008.

Thursday, August 30, 2018

No Utopia but are Nordic countries happiness superpowers?

Top 10, World Happiness Report, Better Life Index and Social Progress Index 

Sir Thomas More (1478-1535), the English lawyer, scholar, writer, member of parliament and chancellor in the reign of Henry VIII, who died by public execution, was the first person to write of a 'utopia', a word used to describe a perfect imaginary world. According to the British Library, More's book, 'Utopia' imagines a complex, self-contained community set on an island, in which people share a common culture and way of life. He coined the word 'utopia' from the Greek ou-topos meaning 'no place' or 'nowhere.'

Nordic countries in particular, Denmark, Finland, Norway, and Sweden, are often cited for their quality of life, material standard of living, strong economies, work-life balance, high entrepreneurship, education, low inequality, transparency and high participation in politics coupled with low levels of corruption.

Friday, August 24, 2018

German import demand supports 5m jobs in European Union

Chancellor Angela Merkel met Spanish prime minister Pedro Sánchez in Andalusia, Spain, August 11, 2018
Photo: Bundesregierung/Bergmann

This week the Ifo Institute for Economic Research at the Ludwig Maximilian University in Munich, published an estimate for Germany's current account surplus in 2018 while Ifo economists separately reported on research which shows that countries with high current account surpluses like Germany are not responsible for unemployment in other countries. Earlier this year, work by Prognos AG, a Swiss consultancy, estimated that German demand — dominated by intermediate inputs for industrial sector — sustain almost 5m jobs in the European Union (EU).

Germany had 159 country trade surpluses in 2017; EU world’s top exporter

The German current account* is expected to fall to 7.8% of annual economic output this year following a 7.9% rate in 2017. 

Tuesday, August 21, 2018

Pessimism & Ignorance: The world of common people has never been better

The widespread ignorance about the great social and economic advances in the world coupled with misinformation on domestic trends, can trigger discontent when optimism is warranted — the question of whether the glass is seen as half-full or half-empty in deciding whether you're an optimist or pessimist, may depend on genes and William Shakespeare (1564–1616), the great English dramatist, has Hamlet, prince of Denmark, saying "there is nothing either good or bad, but thinking makes it so."

However, ignorance is not bliss whatever the view of the proverbial glass maybe.

Even in a decade in the European Union road deaths in 2016 at about 26,000 were down 40%; in the US, according to FBI data, the violent crime rate fell 48% between 1993 and 2016. Using Bureau of Justice Statistics (BJS) data, the rate fell 74% during that time span. In Dublin City, home ownership rose from 26% of households in 1946 compared with 61% outside the large cities, to 60% in 2016, down from over 70% in 2000, according to the Central Statistics Office.

In 1956 as the 6 founding states of what would become the European Economic Community were negotiating the terms of what they called a 'common market' (cited in Article 2 of the Treaty of Rome 1957),' Theodor Adorno and Max Horkheimer, two of Germany's leading philosophers, who were members of the Frankfurt School, began their own debate on producing a contemporary version of the 1848 'Communist Manifesto' which had been written by their compatriots, Karl Marx and Frederick Engels. Adorno commented, as his wife Gretel recorded, "We do not live in a revolutionary situation, and actually things are worse than ever. The horror is that for the first time we live in a world in which we can no longer imagine a better one." See: 'Towards a New Manifesto?'— 62 years later it's still possible to imagine a better world.

Thursday, August 16, 2018

Global city housing crisis and costly planning restrictions

BBC report August 15, 2018: How housing has divided the young 

I have discussed the impact of planning restrictions on property prices in the past (here for example) but while some, of course, are necessary, there is seldom an estimate of the cost — in 2015 Jason Furman, President Obama's chief economic adviser, cited a cost of 50% or more on a typical house in US urban areas; London School of Economics (LSE) research has estimated “that restrictive planning policies inflate the price of office space in the West End (of London) by about 800%. A square foot there is twice as expensive as in midtown Manhattan.” This year research published by the Reserve Bank of Australia estimated that that zoning restrictions raise detached house prices by 73% of marginal costs in Sydney.

Monday, August 13, 2018

James Joyce

Sylvia Beach meets James Joyce in her Parisian English language bookshop, Shakespeare and Company, in 1922 — this was the year she published 'Ulysses.' It began to be serialised in the US from 1918, resulting in a ban that was lifted in 1933.  

Last year a friend invited me to a performance of a revival of Tom Stoppard’s (b. 1937) brilliant 1974 play, 'Travesties,' at the Appolo Theatre in London. The drama is set in Zurich in 1917, and it brings together James Joyce, Tristan Tzara, the poet and founder of Dada — the nihilistic, anti-art movement — and, Vladimir Lenin.

The play is narrated by an elderly Henry Carr, who had been a clerk at the British Consulate in Zurich during the First World War. His memory is a bit flaky and he believes that he had been the consul in 1917, and the real consul had been his butler. In real life, Carr had a legal dispute with James Joyce about the cost of a pair of trousers worn by Carr in Joyce's amateur production in the city of Oscar Wilde’s 'The Importance of Being Earnest.'

Thursday, August 09, 2018

Brexit and rickety foundations of the Irish economy

In the early heady months after the surprise June 23, 2016 vote of 33.6% of UK adults* to leave the European Union, Boris Johnson, a putative British statesman, invoked the “triumph of hope over experience” when the British army of Afghanistan was wiped out in 1842 – almost to a man. He saw the quest for ‘Global Britain’ as reflecting a country with one in eight of the people born in Britain “now living abroad – a bigger diaspora than any other rich nation, you ask yourself what impulse drives this astonishing globalism, this wanderlust of aid workers and journalists and traders and diplomats and entrepreneurs, because whatever that feeling is, it isn’t xenophobia,” Johnson said, and added to dissenters “who say we are now too small, too weak, too poor to have any influence on the world, I say in the words of Scottish poet Robert Burns: ‘O wad some Power the giftie gie us /To see oursels as ithers see us!’”

Sunday, August 05, 2018

Facts of Week: Heatwaves the new normal of climate change

Bering Sea ice at record low — April 29, 2013 - April 29, 2018

Less ice formed in the Bering Sea during the winter of 2017-18 than in any winter since the start of written records in 1850. Normally, ice covers more than 193,000 square miles (500,000 square kilometers) of the sea in late April, roughly twice the size of Texas. The ice extent at that time in 2018 was only about 10 percent of normal. Changes in when and where the sea ice melts can affect phytoplankton blooms which, in turn, can affect the entire Bering ecosystem. Further, open water absorbs more of the Sun’s energy than ice, which contributes to the planet’s warming. Read more at NASA’s Earth Observatory

It's a fair guess that many climate change deniers who seek 100% irrefutable evidence of climate change, believe in a God despite no evidence of its existence.

Germany top beer producer in EU, Netherlands top exporter

To mark World Beer Day on August 3rd, Eurostat reported that in 2017, over 41bn litres of beer containing alcohol were produced in the European Union (EU), 2.5bn litres more than in 2016. The EU’s beer production was equivalent to almost 81 litres per inhabitant.

Brexit Video Reports: Sharp shift in UK public opinion

Sky Data poll: Public turning against Brexit — British public opinion has shifted sharply against Brexit, according to a new Sky Data poll. The survey reveals the government is haemorrhaging trust over Brexit, with two-thirds thinking the outcome will be bad for Britain.

Expected road chaos leading to Port of Dover and other reports.

Wednesday, August 01, 2018

Average Irish housing size lowest of EU's rich countries — Part 2

The average Irish housing size is the lowest of the rich countries of the European Union despite the low population density and the fact that houses account for 92% of housing stock in Ireland — the highest ratio in the EU.

Wednesday, July 25, 2018

Irish Housing Crisis: It’s time for radical solutions — Part 1

Ireland needs to take several radical measures to tackle the current housing crisis but a minority government would struggle to enact them.

Irish real house prices up 175% in 50 years, UK +405%, Germany -1%

Average Irish housing size lowest of EU's rich countries — Part 2

Land value capture

Land value capture (LVC) is a means of funding infrastructure improvements and providing finance for social housing by recovering all or some of the increase in property value generated by public infrastructure investment.

Thursday, July 19, 2018

Trump’s America: A banana republic with nukes

This week it was reported that the US government paid more than $77,000 to President Trump’s Scottish golf resort ahead of his stay there last weekend. The Turnberry course has been losing “an astonishing amount of money,” including $23m in 2016, according to Adam Davidson in The New Yorker.

Davidson asks: “Did he purchase and rehabilitate Turnberry, as he did so much else, with other people’s money?” — i.e. was it funded via money laundering for Russian nationals?  

Thursday, July 12, 2018

Irish real house prices up 175% in 50 years, UK +405%, Germany -1%

Irish real [consumer price index (CPI) inflation-adjusted) house prices rose by 175% in 1971-2016 (45 years); British prices rose by 405% in 1967-2016 (49 years) and German prices fell by -1% in 1968-2016 (48 years), according to the Bank for International Settlements — the BIS was founded in 1930 and is located in Basel, Switzerland. It is often called the "central bank for central banks."

Saturday, July 07, 2018

Brexit, the lost empire, and dodgy modern UK economy

*Just one-third of the UK voting age population voted for Brexit and it was crazy that David Cameron, prime minister 2010-2016, did not put a higher approval threshold for the hugely significant decision to leave the European Union that had been Britain's main trading partner for 43 years. Since the June 23, 2016 decision, the complexity of untangling regulations and agreements has been daunting.

George Macartney (1737-1806), a native of Antrim and graduate of Trinity College Dublin, in 1773 wrote a book on his period in office as chief secretary of Ireland — he was the second highest official in the British administration of Ireland. Macartney was a member of both the Irish and British parliaments and he made it clear that Ireland formed part of “a vast empire on which the sun never sets and whose bounds nature has not yet ascertained."

Monday, July 02, 2018

Best countries in world to start or run a business in 2018

Ireland has had a positive environment for business for many decades as successive governments sought to make the country an attractive location for foreign direct investment (FDI), besides the offer of low tax rates. During the general election campaign in early 2011, Enda Kenny, taoiseach/ prime minister, stressed the aspiration that by 2016 the country would be "the best small country in the world in which to do business."

“I will seek the trust of the Irish people to implement Fine Gael’s plan to get Ireland working again,” Kenny said on Jan 27, 2011. “I firmly believe that by 2016, Ireland can become the best small country in the world in which to do business, the best country in which to raise a family and the best country in which to grow old with dignity and respect.”

"Since coming into office 7 months ago I have told nearly all audiences that by 2016 I intend to make Ireland the best small country in the world in which to do business," Kenny said on October 28, 2011. "An integral part of this vision is to transform Ireland into the Digital Capital of Europe."

Friday, June 29, 2018

When 600-year old French word entrepreneur replaced capitalist

Ballyheigue, situated on the County Kerry coast between the mouth of Tralee Bay and the Shannon River Estuary, was the birthplace of Richard Cantillon, the 18th century economist and controversial Paris banker. He died in London in a fire at his home in 1734, where he may have been murdered. It is believed that the ancestors of Cantillon had left Northern France to accompany William the Conqueror in his 1066 invasion of England [genealogy: de Cantelon, Cantillon, Cantlon, etc.; Norman 'de Cauntelowe,' Latin 'de Cantulupo,' i.e., of Chanteloup in France (Seine-et-Oise)]. The name Ballyheigue comes from the Gaelic 'Baile Uí Thaidhg,' the town of the clan of Tadhg or Timothy. It is believed that the reference was to Tadhg Cantillon and in the 1300s, the family had a local castle when it was said to have been held by Ric de Clahull (Richard de Cantillon).

The word entrepreneur was first included in the ‘Dictionnaire de la langue française’ in the 1437 edition and it had been derived from the verb entreprendre, which has been in use from at least the 12th century.

Entreprendre means to undertake or set about doing something and the word entrepreneur was defined in the dictionary as “celle qui entreprend quelque chose” (in both 1437 and in Émile Littré’s edition in the 1870s; See here.) According to Bert F. Hoselitz (1913-1995), the Austrian-born economist who sourced the earliest record of the word, the entrepreneur in the early centuries was typically a contractor for the king, involving big projects, and of course, there was a risk in seeking profit from a fixed-price job.

Wednesday, June 27, 2018

High growth firms as the Holy Grail or fool’s gold?

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In 2006 Finfacts reported that Xsil, an Irish firm producing innovative laser micro-machining systems to the semiconductor industry, had won the top prize in that year's Deloitte Technology Fast 50 awards. The company had achieved an impressive aggregate growth in revenue of 17,333% in the previous 5 years. Three years later Peter Conlon, the co-founder, told The Irish Times that Xsil Ltd had no assets to speak of except stock, which had been valued at “a couple of hundred thousand dollars, but we’d be lucky to get a cent on the dollar for it” — note that the superlative performance was based on revenue, not profitability.

Monday, June 25, 2018

Economic Facts of Week: Brexit videos and Ireland's low science base

FT Whitehall editor James Blitz looks at the mounting frustration of leading UK companies  Siemens and John Lewis  over the Brexit process and the UK's future trading relationship with the EU.

Thursday, June 21, 2018

Irish 2017 per capita standard of living again below Italy and EU-28 average

Actual Individual Consumption (AIC) is a useful proxy for material standard of living and is based on goods and services actually consumed by individuals, irrespective of whether these goods and services are purchased and paid for by households, by government, or by non-profit organisations. In international volume comparisons of consumption, AIC is often seen as the preferable measure, since it is not influenced by the fact that the organisation of certain important services consumed by households, like health and education services, differs a lot across countries. Data are adjusted for price differences — Purchasing Power Standards (PPS) — and the AIC is more reliable than gross domestic product (GDP) per capita which tracks more than household welfare. Eurostat reports that in 2017 Ireland was again below the EU-28 average and also below Italy.

Irish broad rate of unemployment at 17% in March 2018

The Irish broad rate of unemployment was at 17% at the end of the first quarter of 2018. The Central Statistics Office (CSO) on Wednesday published the latest Labour Force Survey showing that the seasonally adjusted headline unemployment rate was 5.8% for Q1 2018 and the seasonally adjusted number of persons unemployed decreased by 12,900 to 137,300 (133,000 actual count) — the headline rate is based on employment of at least one hour per week according to an International Labour Organisation definition.

Monday, June 18, 2018

150 years for poor Irish child/ descendants to earn national average income: 60 years in Denmark

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The average disposable income of the richest 10% of the population is about 9.5 times that of the lowest 10% across OECD countries, compared with 7 times, 25 years ago. Wealth inequality is even more pronounced with the top 10% holding half the wealth while the bottom 40% have only 3%.

The United States has had greater social mobility than large European economies such as Germany, France, and the UK, according to the Organisation for Economic Cooperation and Development (OECD) — a think-tank for 35 mainly rich countries including Ireland —  but the US has higher levels of income and wealth inequality.

Thursday, June 14, 2018

Economic Facts of Week: US 2017 Balance of Payments surplus with EU at $14bn- EU says it had surplus of $170bn with US

Figure 1 above, shows that the US current account/ Balance of Payments with Europe has been approximately balanced since 2008 and has been in small surplus since 2009. It is the result of a substantial increase of the net income of companies (balance of primary income) and the surplus in trade in services with the EU. These gains are more than sufficient to outweigh the trade in goods deficit, and ultimately lead to a positive bilateral current account from the perspective of the US. Source: ifo Institute based on data from the US Bureau of Economic Analysis.

In Ireland we are familiar with distorted data resulting from massive tax avoidance and Eurostat, the European Union's statistics office also has a big difference in estimates of the Balance of Payments/current account balance with the US that is also related to the earnings of American companies.

Plan of Italy’s new Europe minister to exit euro includes 50% debt haircut

A plan to exit the euro drawn up by Paolo Savona, now Italy’s new europe minister, “seems to confirm Germany’s worst fears,” according to a recent analysis by Daniel Gros, EconPol (European network for economic research) expert and director of the Center for European Policy Studies (CEPS). “But what is particularly astonishing about the ‘plan’ is […] the open intention to stick it to the rest of the world, particularly Italy’s euro partners,” writes Gros

Wednesday, June 13, 2018

Brexit video reports May/June 2018

How does Brexit rank among Germany’s concerns? Mark Urban speaks to President of the Bundestag and Germany's former finance minister, Wolfgang Schäuble, on the issues facing Europe. June 2018

The EU and UK will soon launch the latest round of Brexit talks next week, and one man will be speaking for the 27 remaining countries: Michel Barnier.

Monday, June 11, 2018

Profits of US firms in Ireland at 800% of payroll costs

Profits of foreign firms in Ireland (mainly of US global multinationals) are almost 800% of their payroll costs in the country, according to a new academic paper that also says “close to 40% of multinational profits are shifted to low-tax countries each year.”

Thomas Tørsløv (University of Copenhagen), Ludvig Wier (University of Copenhagen) and Gabriel Zucman (University of California Berkeley and National Bureau of Economic Research) in their June 2018 paper, ‘The Missing Profits of Nations,’ write that “Between 1985 and 2018, the global average statutory corporate tax rate has fallen by more than half, from 49% to 24%. In 2018, most spectacularly, the United States cut its rate from 35% to 21%.” The authors say that the redistributive consequences of the process of shifting huge paper profits rather than actual productive capital “are major, and different than in the textbook model of tax competition. Instead of increasing capital stocks in low-tax countries, boosting wages along the way, profit shifting merely reduces the taxes paid by multinationals, which mostly benefits their shareholders, who tend to be wealthy.”

Sunday, June 10, 2018

Economic Facts of Week: Rise of corporate giants & New Gilded Age June 10, 2018

The Gilded Age’ was a satirical novel written by Mark Twain and Charles Dudley Warner, which was first published in 1873.  The book’s title became synonymous with graft, materialism, and corruption in American public life in the years after the end of the Civil War. The International Monetary Fund (IMF) asked at a recent conference titled ‘Digitalization and the New Gilded Age’ “Are technological advances leading to greater market concentration in firms such as Google and Facebook and, in turn, creating what could be described as a New Gilded Age?” — see video below.

The IMF says that the rise of corporate giants extends beyond Big Tech and has raised fresh questions about whether this trend might continue and, if so, whether some rethinking of policy is needed to maintain fair and strong competition in the digital age. However, corporate market power is hard to measure and common indicators such as market concentration or profit rates can be misleading.

The chart above is based on an upcoming IMF working paper using data for publicly listed companies from 74 countries. It tracks average markups on goods and services across all companies, comparing pricing in advanced and emerging and developing economies. A markup — the ratio between the cost of a good or service and its selling price — provides a measure of market power.

Saturday, June 09, 2018

Ireland has very low employer firm startup rate- UK is 4 times bigger

Ireland has the second-worst employer startup rate among mainly rich 29-member countries of the Organisation for Economic Co-operation and Development (OECD). Belgium has the worst rating while the United Kingdom is the best with a rate that is almost quadruple Ireland’s.

Ireland’s employer firm birth rate as a percentage of active employer firms was 4.1% in 2015 compared with Belgium’s 3.5% rate and Britain’s impressive 15.7% rate of birth. Ireland’s rate was at 3.7% in 2014. The death rates for 2014 and 2015 were 3.7% and 3% — meaning that the net growth rate of employer firms was stagnant in 2014 and very low in 2015. See table below

While the term ‘startup’ has become synonymous with the tech industry, we use it here as interchangeable with enterprise births, which is used by the OECD and Eurostat — the statistics office of the EU — in respect of the area of business statistics known as Business Demography.

The focus on employer firms with at least 1 employee at birth is important in terms of potential economic impact compared with a 1-person operation which may never grow even though many surviving employer firms also don't grow. Most new employer enterprises in OECD economies are created with between one and four employees. The average number of persons employed in employer enterprise births is typically higher in industry than in services, reflecting economies of scale.

Thursday, June 07, 2018

Currency devaluations alone do not magically provide growth

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John Maynard Keynes, the renowned British economist, wrote in 1919, “Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency.” The quote comes from Keynes’ book ‘The Economic Consequences of the Peace’ – the searing indictment of the vengeful Treaty of Versailles. In April of that year the London newspaper, The Daily Chronicle, and The New York Times (see image above) had published a story from Geneva, in which the author claimed it was based on “authentic notes of an interview with Vladimir Ulianoff Lenin, the high priest of Bolshevism, which were communicated to me by a recent visitor to Moscow.” Ulyanov was Lenin’s family name.

Tuesday, June 05, 2018

Germany had 159 country trade surpluses in 2017; EU world’s top exporter

Germany had goods trade surpluses with 159 countries in 2017 (using a threshold of €150m) compared with 56 for the United States (using a threshold of $160). While German surpluses come from all regions of the world, the American surpluses are both smaller and are mainly concentrated in Latin America (excluding Mexico, Ecuador and Venezuela,) the Carribean and the Middle East.

The United States last had a goods trade surplus in 1974 while Germany has had a surplus every year since 1952 and it has had a combined goods + services trade surplus every year since 1993.

German export value (goods + services) in 2017 as a ratio of GDP was 47%; France was at 31%; Italy's ratio was 32% — up from 26% in 2006, while Spain rose to 35% of GDP compared with 25% in 2006. The US rate was 12%.

China’s export value/GDP ratio was 19% in 2017 compared with over 35% in 2007.

Friday, June 01, 2018

Italy: A century of annual budget deficits and high public debt

Prof Giuseppe Conte, Italian prime minister-designate, arrives at Palazzo del Quirinale May 31, 2018

Italy's anti-establishment coalition partners reached a new deal on Thursday with a revised list of ministers, and Sergio Mattarella, the Italian president, will swear in the 66th Italian government since 1946, today Friday.

I wrote this comment on an Irish Times op-ed on Thursday. Below, I have added additional material including some positive news!

A populist alliance is likely to form the 66th or 67th government since 1945, and the president may well have been wise in seeking clarity on plans about the euro.  The published draft programme of the Five Star Movement and the League is unlikely to address the serious problems of the economy but the alliance should govern. As banks' retail customers often invest in bonds, the alliance doesn't wish to see them burned.  

Italy has a long-term problem with an annual budget surplus achieved only once in about 110 years and in its 157 years as a unified country, Italy has had a debt-to-GDP (gross domestic product) ratio below 60% in less than 30 of those years.

Economic Facts of Week: Tech giants killing young rivals and more June 02 2018

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Eurostat reported Thursday that the Euro Area (EA19) seasonally-adjusted unemployment rate was 8.5% in April 2018, down from 8.6% in March 2018 and from 9.2% in April 2017. This is the lowest rate recorded in the Euro Area since December 2008. The EU28 unemployment rate was 7.1% in April 2018, stable compared with March 2018 and down from 7.8% in April 2017. This remains the lowest rate recorded in the EU28 since September 2008.

Thursday, May 31, 2018

Italy and the euro: Sergio Mattarella has opened a window of opportunity to save the single currency

Carlo Cottarelli, Interim-PM, arrives at Palazzo del Quirinale, Rome, May 29, 2018

Crisis looms large over the eurozone yet again. And this time it’s swirling around Italy. If Cyprus was a tropical storm for the euro in 2013 and Greece a hurricane in 2015 what will Italy turn out to be in 2018?

Italy’s public debt is 132% of GDP. This is the second highest in the euro area (Greece is still out in front with 180.8%). In absolute terms, however, Italy’s public debt at €2.3 trillion dwarfs Greece’s €320 billion. Meanwhile, the eurozone’s third-largest economy contains a rising tide of populist, anti-EU sentiment.

Trump makes racism respectable again in America


One hundred years after Woodrow Wilson, a racist who restored segregation to the federal civil service, won re-election in the 1916 US presidential election, Donald Trump, another racist who in the 1970s with his father had been charged with housing discrimination against blacks by the Department of Justice, was elected president. In recent decades while overt racism had become a social taboo, Trump won many fans by propagating the lie that Barack Obama, the first black president, had been born in Africa not the United States – suggesting Obama was an illegitimate president.

This week Roseanne Barr, an actress and Trumpian, wrote in a tweet that Obama administration aide Valerie Jarrett was the baby of the “Muslim brotherhood & planet of the apes.” The odious cretin also tweeted that 87-year-old Hungarian-born Jewish billionaire George Soros, had collaborated with the Nazis to send fellow Jews to the gas chambers and steal their wealth – he was a child/teen during the Second World War.

Sunday, May 27, 2018

Can technology solve Brexit NI border issue? - BBC Newsnight May 2018



BBC News: Published on May 11, 2018- Brexit: Five steps to understanding the EU customs union - How the UK's future trading relationship with Europe is going to work is one of the biggest Brexit questions.

The New Silk Road: China's Route to Europe? | DW English

Radio Free Europe: China’s “New Silk Road” is a multibillion-dollar project, linking it to European markets via a corridor of trade and investment across Central Asia. Kazakhstan is a major partner, and the two countries speak glowingly of their cooperation. But beneath the veneer of warm words, corruption, bureaucracy, and old antipathies sometimes get in the way.


DW Germany: China is investing US$900 billion in the New Silk Road – possibly the biggest infrastructure project in history. Is the goal to foster trade and development? Or does China have a neo-colonial agenda?

Who was Karl Marx? | Videos: DW Germany Documentary & Economist

Karl Marx (1818-1883) was a German-born philosopher of the 19th century whose works covered economics, sociology and political theory and later revolutionized politics in large parts of the world.

Born in the city of Trier, Karl Marx fled to England and became stateless in 1849, after he became considered a political threat in Germany. Known as the "Father of Communism," he wrote the political pamphlet "The Communist Manifesto" (1848) with Friedrich Engels, and is the author of the founding theoretical text "Capital: Critique of Political Economy" (1867-1883).

Was Karl Marx right? | The Economist — Karl Marx remains surprisingly relevant 200 years after his birth. He rightly predicted some of the pitfalls of capitalism, but his solution was far worse than the disease.

Martin Wolf: how Italy became Eurosceptic and why it matters

FT's chief economics commentator looks at the potential for upheaval for the euro and the eurozone as a new populist Italian government edges closer.



Italy in crisis again but average incomes higher than Ireland’s

Tuesday, March 13, 2018

Claim Dutch East India Company most valuable in history not credible

This statue of Jan Pieterszoon Coen (1587-1629), the VOC governor general for Asia, was erected in his native Dutch town of Hoorn in 1893. In 1621 Coen had organised the genocide of about 14,000 inhabitants of the Banda Islands, a group of small volcanic islands within the archipelago known as the Spice Islands in Eastern Indonesia. Nutmeg was native to the Banda Islands. Image source: Wikimedia Commons
In 1602 the States-General of the Dutch Republic chartered the Vereenigde Oost-Indische Compagnie (VOC) — United East India Company in English, but commonly known as the Dutch East India Company — with a monopoly of trade with Asia. In 2012 it was claimed to be the most valuable company in history and in December 2017 multiple media outlets including Dutch ones, reported on a current day valuation of $7.9 trillion, equivalent to a market value of 20 global corporations, headed by Apple Inc.

The claim is real fake news as it is not based on evidence from the extensive surviving VOC documentation. The company was dissolved in 1799.