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from Anatole Kaletsky:

Karl Marx was right — at least about one thing

 A board displays the Dow Jones industrials average after the close at the New York Stock Exchange

Confidence in the global economy is steadily improving, as shown in the financial markets’ bullish behavior and confident comments from companies and policymakers over the past few weeks. Though these columns have argued in favor of a robust recovery, when investors get uniformly bullish, the pessimistic case deserves attention.

Many distinguished economists believe that the current improvement in global conditions is just a blip. They insist that the world faces years, if not decades, of “secular stagnation.” How seriously should we take them?

The good news is that there is little evidence of secular stagnation in global statistics. The “new normal” for the world economy since 2008 has not been very different from the pre-crisis period. The average growth of the global economy from 1988 to 2007, the 20 years before the crisis, was 3.6 percent, according to the International Monetary Fund World Economic Outlook database. The IMF latest forecast for 2014 is exactly the same -- 3.6 percent. Though Christine Lagarde, the IMF managing director, hinted at a modest downgrade this week.

International Monetary Fund Managing Director Lagarde addresses the Bretton Woods Committee annual meeting in WashingtonAt first glance, this continuity seems hard to square with the slowdown in economic activity in all major economies since 2008. The IMF expects only 2.2 percent growth this year in the developed countries, compared with an average of 2.8 percent during the two decades before the crisis. In the emerging economies, meanwhile, growth is projected at 4.8 percent this year, slightly below the average of 4.9 percent of the pre-crisis decades.

from Lawrence Summers:

Inequality is about more than money

Graduates from Columbia University's School of Business hold a sign as they cheer during university's commencement ceremony in New York

With Thomas Piketty’s book, Capital in the 21st Century, rising to number 1 on best-seller lists, inequality has become central to the public debate over economic policy. Piketty, and much of this discussion, focuses on the sharp increases in the share of income and wealth going to the top 1 percent, .1 percent and .01 percent of the population.

This is indeed a critical issue. Whatever the resolution of particular numerical arguments, it is almost certain that the share of income going to the top 1 percent of the population has risen by 10 percentage points over the last generation, and that the share of the bottom 90 percent has fallen by a comparable amount. The only groups that have seen faster income growth than the top 1 percent are the top .1 percent and top .01 percent.

from Breakingviews:

Review: Brazil’s toughest tests lie off the pitch

By Dominic Elliott 

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Michael Reid’s astute new book has a stark warning: the country of samba, sex and soccer is teetering on a knife-edge. “Brazil: The Troubled Rise of a Global Power” explains why protests against this year’s World Cup are turning increasingly violent. Reid, a journalist for The Economist, persuasively urges a return to the broad liberal consensus that served Brazil so well between 1994 and 2006.

from The Great Debate:

Elites focus on inequality; real people just want growth

kochs & warrenThe economic debate is now sharply focused on the issue of income inequality. That may not be the debate Democrats want to have, however. It's negative and divisive. Democrats would be better off talking about growth -- a hopeful and unifying agenda.

Democrats believe income inequality is a populist cause. But it may be less of a populist issue than an issue promoted by the cultural elite: well-educated professionals who are economically comfortable but not rich. There’s new evidence that ordinary voters care more about growth.

from Nicholas Wapshott:

The surprise success of Thomas Piketty

The surprise success of the French economist Thomas Piketty’s income disparity blockbuster Capital in the 21st Century has forced battlelines to be drawn in the world of political economics.

Piketty’s unremarkable contention, after having crawled through two centuries of data, is that the inequitable distribution of wealth in Western society has now led to an intolerable state of affairs. The super-rich have arranged matters so that almost all of a nation’s economic growth is delivered into their bank accounts.

from The Great Debate:

The increasing significance of race

Behind every Supreme Court decision is a sociology of ordinary life. Opinions reveal the justices’ view of what’s what in the world, how people act and why things change.

Justices probably prefer that we focus on their legal analyses, but we can glean the sociology behind their assumptions. Last week, judicial world views spun into interplanetary conflict when the court voted to affirm Michigan’s vote to bar all consideration of race, gender, ethnicity, color or national origin in public decision-making, including in state college admissions.

from Felix Salmon:

The Piketty pessimist

Screen Shot 2014-04-25 at 2.12.10 PM.png

This chart comes from the World Economic Forum’s 2014 Global Risks Report, which came out just before Thomas Piketty’s book started becoming the topic of discussion in economic and plutocratic circles.* You can clearly see what you might call the rise of inequality-as-an issue: before 2012 it’s nowhere to be found, but since then it’s been consistently in the top spot. My prediction is that in 2015, thanks to Piketty, the WEF will start talking less about income inequality, and more about wealth inequality.

The big question, though, is whether inequality is really much of a risk at all. After all, from the point of view of the average billionaire WEF delegate, inequality would seem to look much more like a reward.

from The Great Debate:

Why not a war on child poverty?

President Barack Obama’s recent speeches at the LBJ Presidential Library and National Action Network marking the 50th anniversary of the War on Poverty and the Civil Rights Act had a serious omission. While acknowledging “our work is unfinished,” Obama failed to mention this nation’s worst social trend: the stunning increase of children and youth living in poverty.

Since 1969, the proportion of children and youth in poverty rose by 56 percent, even as the economic fortunes of the elderly improved under programs like Medicare and Social Security. Today, 32 million American children and youth are confronting poverty -- including 7 million suffering utter destitution, another 9 million living in serious poverty and 16 million more in low-income households struggling just above poverty lines.

from The Great Debate:

The lost promise of progressive taxes

By midnight on April 15, roughly 140 million Americans will have filed their federal income tax returns and breathed a sigh of relief. Politicians from both parties, however, will spend most of the day criticizing our current tax system.

Conservatives bemoan that not enough people are paying taxes. They insist that a minority of “job creators” and “makers” are underwriting the social benefits that go to the “takers.” Liberals cite the growing concentration of wealth and lament that the rich don’t pay their fair share. In this new Gilded Age, they say, the 1 percent should be paying far more of their annual earnings.

from The Great Debate:

Self Help is no help for inequality

For all the howls of rage from plutocrats like Tom Perkins and Ken Langone over possible tax rate increases, there has been relatively little public anger about the increasing wealth disparity in the United States -- especially compared to the past.

During the Progressive era in the early 20th century and the Great Depression, we saw violent strikes and marches on Washington. These days, we have an army of sometimes-intemperate bloggers and a labor movement so bereft the United Auto Workers union recently failed to mobilize workers in a Volkswagen factory in Chattanooga, Tennessee. Occupy Wall Street, meanwhile, is now a distant memory, even as more than half of all Americans say they believe the nation remains in an economic recession.

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