Tag Archives: the economist

The Economist proclaims that men are “The Weaker Sex”

Summary: A trend goes mainstream when it appears on the cover of the major weekly news magazines. So it is with the end of men. It’s a trend long in the making, now visible to all who care to see. But seeing the past tells us little about the future. What’s the effect of this trend on society? How will men respond to this new challenge?  {2nd of 2 posts today.}

The Economist cover, 30 May 2015

They talk about ‘a woman’s sphere’
As though it has a limit;
There’s not a spot on sea or shore,
In sanctum, office, shop or store,
Without a woman in it.
— Anonymous, from Jennie Day Haines’ Sovereign Woman Versus Mere Man (1905).

The weaker sex
The Economist, 30 May 2015.

AT FIRST glance the patriarchy appears to be thriving. More than 90% of presidents and prime ministers are male, as are nearly all big corporate bosses. Men dominate finance, technology, films, sports, music and even stand-up comedy. In much of the world they still enjoy social and legal privileges simply because they have a Y chromosome.

Yet there is plenty of cause for concern. Men cluster at the bottom as well as the top. They are far more likely than women to be jailed, estranged from their children, or to kill themselves. They earn fewer university degrees than women. Boys in the developed world are 50% more likely to flunk basic maths, reading and science entirely.

One group in particular is suffering (see article). Poorly educated men in rich countries have had difficulty coping with the enormous changes in the labour market and the home over the past half-century. As technology and trade have devalued brawn, less-educated men have struggled to find a role in the workplace.

Women, on the other hand, are surging into expanding sectors such as health care and education, helped by their superior skills. As education has become more important, boys have also fallen behind girls in school (except at the very top). Men who lose jobs in manufacturing often never work again. And men without work find it hard to attract a permanent mate. The result, for low-skilled men, is a poisonous combination of no job, no family and no prospects. …

This leader and the article tell the simple truth.

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The Economist recommends taking the easy path to inflation. But what if it’s closed?

Summary:  If the great monetary experiments underway in Japan and America succeed, then the world will change. Aggressive fiscal and monetary stimulus will become routine, even normal. For better or worse. Already the normalization process has begun by people unaware that in this new century the easy path to inflation has been closed, with as yet unknown consequences.

Money whirlpool

Christian Science Monitor, 8 November 2010

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Contents

  1. The world has changed, yet they still dream of monetary magic
  2. About inflation
  3. The Boomers’ secret lust for inflation
  4. For more information

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(1)  The world has changed, yet they still dream of monetary magic

QE3 will raise the Federal Reserve’s assets by almost 40% in its first year. Japan has adopted an even bolder strategy. One of the two arrows of the three arrows to Abenomics is doubling the money supply in two years in order to raise inflation to 2%. If these monetary experiments work, then the world will change. Already the yearnings for inflation, simmering since the crash (but expressed in euphemisms), are now expressed openly.

Secular stagnation: The second best solution“, The Economist, 21 January 2014  — Excerpt:

WITH a string of talks and op-ed columns, Larry Summers has revived discussion in the “secular stagnation” hypothesis. Income has become concentrated in the hands of groups, like reserve-accumulating foreign governments and the rich, with low propensities to consume, the thinking goes. That has generated excess saving and pushed down real interest rates until they are substantially negative at many durations. That, in turn, has made life very difficult for central banks, which have struggled to stoke up adequate demand with nominal interest rates wedged up against zero.

Mr Summers identifies three broad solutions to the problem.

  • One is to do nothing, or not much anyway, on the demand side. This is not a particularly attractive solution, as it implies a very long slump in which incomes are lower than they need to be, unemployment is higher, and the economy’s potential is eroding.
  • Another is to raise inflation expectations in order to reduce real, or inflation-adjusted, interest rates until demand is where we’d like it to be. This policy is not without its downsides …
  • The last option to address stagnation is to have the government soak up excess savings and boost demand through deficit-financed public investment.

The third option is quite clearly Mr Summers’ preferred course of action. And it is a very attractive option. It is a rare rich country that doesn’t have a list of infrastructure needs that could justifiably be addressed in the best of times. Pulling those off the shelf and taking them on amid rock-bottom interest rates and weak demand is a no-brainer. Unfortunately, governments are discinclined to seize these opportunities. That makes it very important to sort out the relative attractiveness of alternative solutions to stagnation.

My sense is that Mr Summers reckons the inflation strategy is not as easy to deploy successfully as I make it out to be. QE purchases focused on safe assets might have an ambiguous effect on the economy: boosting asset prices through portfolio balance effects but limiting lending growth by sucking up the supply of good collateral. And as Brad DeLong notes, high inflation could conceivably undermine the safe-asset status of some government securities. Meanwhile, central banks might not be comfortable mustering the bluster to convince markets that higher inflation is ahead. And if they did, increases in long nominal rates could create their own financial difficulties.

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A poll shows the source of America’s problems

Summary:  More evidence that I’m wrong, that greater public participation will not by itself benefit America.  Decades of learned ignorance (aka intense propaganda) have left us too ignorant.  We’re living in dreamland.  Only a crash will restore our awareness of the real world.  China’s leaders probably read such articles and smile (or laugh).

Fascinating but depressing data about America from the Economist/YouGov poll, 8 April 2010.  These are not the results of a people who can act together to govern themselves.

#17:  How about the federal budget deficit? When deciding whom to support in the 2010 elections, how important will the candidate’s position on the deficit be in your decision?  Percent answering “very important” or “most important”:

  • Liberals:  39%
  • Moderates:  59%
  • Conservatives:  83%

#21:  How concerned are you about the size of the federal budget deficit?  Percent answering “very concerned” or “somewhat concerned”:

  • Liberals:  78%
  • Moderates:  90%
  • Conservatives:  95%

FM:  Count me among the very concerned.  The Federal government’s public debt declined through the Clinton and early Bush Sr years to a cycle low of $3.3 trillion in mid-2001.  It rose to $5.2 trillion at the start of the recession in December 2007.  It’s now $8.4 trillion.   Source:  US Treasury.

#19:  How much responsibility do you think President Barack Obama has for the current size of the federal budget deficit?  Percent answering “most”:

  • Liberals:  4%
  • Moderates:  19%
  • Conservatives:  64%

FM:  note that Bush’s last budget, which ran through the end of September 2009.  Mandatory spending and discretionary spending on 2 year appropriations continue from the Bush Adminstration.  The biggest discretionary items, the military and economic polices, broadly continue Bush’s policies.   So far Obama has had a small effect on the budget.

From this point on the poll gets very interesting!  #22:  When, if ever, do you think the federal budget should be balanced?   Percent answering “immediately” or next year”:

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A sad picture of America, but important for us to understand

Looking in the mirror is the first step to growth and reform for an individual and a nation. 

Look at this graph.  Compared to other nations we have both a high degree of income inequality AND low social mobility (fathers’ and sons’ incomes are highly correlated).  This has many consequences, none of them good.  Esp given our high rate of immigration; this suggests that we are building an underclass.

 

From “Growing Unequal? Income Distribution and Poverty in OECD Countries“, OECD, October 2008 — Figure 8.2, page 213.  The little button to the right of the “Add to Basket” button allows a free download of the report.  This image of the graph is from “Pain all round, please“, The Economist, 23 October 2008 — “The importance of fairness in an economic downturn”

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