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So, it's been quite a year, I'm sure we'd all agree. Well we're finally in December, and as we approach New Years I think it's a good time to reflect on what has happened this year. And to do that, we're going to look at The Economist's Top Ten Global Risks - both the current ones and the previous ones. Unfortunately their archiving capabilities leave something to be desired; they do have old forecasts available, but they aren't indexed in a way I've found useful. So I'm going to just link each of their individual predictions for your searching convenience.
Their risk calculations are two factors on a scale of 1 to 5: likelihood and impact. Their risk factor is the product of those two factors. Read their actual articles for full details, as listed below in their ranked order.
Previous risks:
Current risks:
Risks that pretty much just carried over: Grexit, EU fracture, jihadi terrorism. Incidentally they're all pretty big risks that are tied to internal problems within the EU. The Greek situation doesn't seem like a stable solution, there is little evidence that the refugee crisis (a big factor associated with the jihadi terrorism risk) is dying down soon, and the EU's internal conflicts only seem to grow more and more troublesome with each passing election (populism, but also various other realignments that tend towards a less pro-EU composition). This trend looks likely to continue into 2017.
Risks that are similar, but evolved: Chinese economy, South China Sea, and emerging markets credit crisis. The Chinese "hard landing" scenario does continue to seem likely; there are absolutely troubling signs there. China isn't in the middle of a visible crisis quite yet but it would be hard to think that it's not approaching that state. The South China Sea conflicts haven't happened yet, but they seem more likely to happen. On the other hand, The Economist does seem to predict some further stability for the emerging markets, with oil risks decreasing (the price appears to be somewhat stabler), credit issues less likely in a lot of emerging economies, and the possibility of a boom is feasible (some of said emerging economies do show some promising signs).
Risks associated with populist movements: Trump won, Brexit referendum resulted in a Leave vote, and the populist wave doesn't look like it's nearing its conclusion. Austria has at least an even chance of electing a populist, East Europe in general has some less pro-EU tendencies in recent times, and France and Germany will have populist challengers (Le Pen may or may not be relevant, probably not, and Germany's Merkel is unlikely to lose). The populist wave is more anti-globalist and it does seem like some hallmarks of that globalism (especially the TPP and TTIP) are in serious trouble. Hard Brexit is an associated risk here too, and I can't say that it looks clear which direction the government is ultimately going to go. I only see this 2016-esque populist tide continuing into the future.
Risks that have mostly fizzled out: oil seems to have stabilized, and the emerging markets credit crisis seems to have not come to pass (as described earlier). The Ukraine situation is likely on its way to a resolution; the Ukrainian government has plenty of internal instability to deal with, they no longer have any feasible chance of winning the conflict on the battlefield, and sooner or later this conflict will have to be resolved through some form of diplomacy. Syria is similar; on the military front the outcome seems to be quite clear, in that ISIS seems to be being pushed back and now it's time to find diplomatic arrangements that all the sides will agree to. Frankly it seems like Europe has lost much of the will to take an active role in any of these and they're looking for face-saving measures to back away from those conflicts. Related is that the will for sanctions on Russia seem rather weak, and besides some short-lived Aleppo drama it's mostly went down without much fanfare. Ultimately this is likely to wind down over the next year or so.
Risks that are important, but not well-represented: Nuclear proliferation and Iran, North Korea, and Pakistan. Dangerous countries with nuclear weapons or close to them. Hopefully the Iran deal shows promise; North Korea looks like it might get worse before it gets better. Pakistan is stable in a relative sense but it's an ever-present danger to worry about. Also dangerous is the Paris Accords and the willingness of countries to cooperate; it is hopeful that Trump does not back out of them, and thankfully it does seem like he is retracting his "rip up the Paris Accords" stance over the past month.
Happy 2016! And here's to another year. Hopefully we'll survive.
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On December 02 2016 05:30 Incognoto wrote:Show nested quote +“He has signaled to every corporation in America that they can threaten to offshore jobs in exchange for business-friendly tax benefits and incentives,” Senator Bernie Sanders of Vermont wrote in an op-ed on Thursday for The Washington Post. God damn it Bernie, no shit. Companies aren't bound to the USA by law, this isn't the Soviet Union. Companies are allowed to (and already) relocate manufacturing to elsewhere if it means improving profit. Why is it BAD that America be friendly to businesses, if it means that jobs stay in the USA. Shit, man. Trump can't catch a break, whatever he does, he does wrong.
There are just a lot of butthurt liberals who are upset that they didn't think of what Trump did first. It's pretty clear that this is a YUUUGGGGEE PR victory for Trump.
But in all seriousness, the federal government should be doing things to create a business friendly environment that, at the very least, doesn't do anything to encourage companies to relocate. This is why our corporate tax structure is so backwards. We should have lower corporate taxes (effective and nominal) and then make up the revenue shortfalls with taxes on higher wealth individuals. Discouraging companies from hiring Americans is just stupid.
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On December 02 2016 05:58 Nyxisto wrote:Show nested quote +On December 02 2016 05:52 Incognoto wrote:On December 02 2016 05:33 Nyxisto wrote:
Bernie is simply saying that you're trading a short term employment benefit for a structural problem. Keeping unproductive jobs and low tax economies alive is actually the worst of both worlds. line workers aren't unproductive though. the company i did my internship at made air conditioning systems (dehumidifiers, etc.) from start to finish. really nice machines you can be damn sure that the people who were putting the machines together were not unproductive. they were very productive, were skilled and organized. that company has been around since the 80s, making customized HVAC units for years, with huge clients such as air france, ikea, cinemas, etc. if you're a big enough company, then moving to mexico might scrape you a few % on your margins. for a smaller company like the one i worked at, moving jobs offshore is basically suicide because of the ridiculous amount of organization and other expenses require to make it work. the company i worked at had offices, CEO, design offices, etc. all in the same building. they were productive, as i'm sure that carrier was productive. the role of the government is to serve its people. if giving a few tax breaks to carrier allows it to scrape the margins it wanted by moving, while also keeping jobs (which is a legitimate economic boon to the USA) in the country, then i'd say it's good move. i mean it's not like it was the best deal in the world or anything, but i think this is more commendable then not but we can't really talk about it as if it is just one exception. If we're going to discuss if the policy makes sense we should look at what happens if this becomes the rule, and lowering taxes for companies who threaten to move abroad is essentially some kind of hostage situation. "Either you cut our taxes or.." isn't a very healthy direction. Also the US unemployment isn't high and growth is good, there's no real need for measures like this.
Well, may as well ask what you think about the alternative then.
Assuming that manufacturing businesses don't keep their business in the USA and export it elsewhere, what do you do with those who lost their manufacturing work?
Should inefficient workers just be laid off and that's that? "if your business model can't sustain these taxes, then perhaps you just should just shut down"
This is especially true for smaller companies, which don't have at all the resources to offshore their work. I'm all for efficiency and stuff, but having tons of unemployed line workers doesn't strike me as healthy for the economy either.
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On December 02 2016 06:07 Incognoto wrote:Show nested quote +On December 02 2016 05:58 Nyxisto wrote:On December 02 2016 05:52 Incognoto wrote:On December 02 2016 05:33 Nyxisto wrote:
Bernie is simply saying that you're trading a short term employment benefit for a structural problem. Keeping unproductive jobs and low tax economies alive is actually the worst of both worlds. line workers aren't unproductive though. the company i did my internship at made air conditioning systems (dehumidifiers, etc.) from start to finish. really nice machines you can be damn sure that the people who were putting the machines together were not unproductive. they were very productive, were skilled and organized. that company has been around since the 80s, making customized HVAC units for years, with huge clients such as air france, ikea, cinemas, etc. if you're a big enough company, then moving to mexico might scrape you a few % on your margins. for a smaller company like the one i worked at, moving jobs offshore is basically suicide because of the ridiculous amount of organization and other expenses require to make it work. the company i worked at had offices, CEO, design offices, etc. all in the same building. they were productive, as i'm sure that carrier was productive. the role of the government is to serve its people. if giving a few tax breaks to carrier allows it to scrape the margins it wanted by moving, while also keeping jobs (which is a legitimate economic boon to the USA) in the country, then i'd say it's good move. i mean it's not like it was the best deal in the world or anything, but i think this is more commendable then not but we can't really talk about it as if it is just one exception. If we're going to discuss if the policy makes sense we should look at what happens if this becomes the rule, and lowering taxes for companies who threaten to move abroad is essentially some kind of hostage situation. "Either you cut our taxes or.." isn't a very healthy direction. Also the US unemployment isn't high and growth is good, there's no real need for measures like this. Well, may as well ask what you think about the alternative then. Assuming that manufacturing businesses don't keep their business in the USA and export it elsewhere, what do you do with those who lost their manufacturing work? Should inefficient workers just be laid off and that's that? "if your business model can't sustain these taxes, then perhaps you just should just shut down" This is especially true for smaller companies, which don't have at all the resources to offshore their work.
I'd argue that starting publicly supported incubators and training programs in the affected states make sense to get workers jobs in sectors that will stay long term. Say heavy investment into green energy, digital infrastructure, IT service jobs and so on. Can also pay them to get a degree. I posted this a while ago but I'll just post it again, stuff like this:
https://backchannel.com/canary-in-the-code-mine-903884eca853
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On December 02 2016 05:33 Nyxisto wrote:
Bernie is simply saying that you're trading a short term employment benefit for a structural problem. Keeping unproductive jobs and low tax economies alive is actually the worst of both worlds.
It's worth pointing out Trump has effectively said this as well...
"I've been watching these politicians go through this for years," Trump said at a rally in Wilkes Barre, Pennsylvania, on October 10. "I've been watching them give low-interest loans. I've been watching them give zero-interest loans. These companies don't even need the money, most of them; they take the money. There were a couple of instances where geniuses with great lawyers gave them money and then they moved anyway…I mean, the whole thing is crazy."
Trump made the same point in August at a rally in Erie, Pennsylvania. (The Democratic super-PAC and opposition research outfit American Bridge found these examples and shared them with Mother Jones.) "Over the years, I've watched, for years, for 10 years, for 12 years, for 15 years, beyond Obama, and I've watched as politicians talked about stopping companies from leaving our states," Trump said. "Remember, they'd give the low-interest loans. Here's a low-interest loan if you stay in Pennsylvania. Here's a zero-interest loan. You don't have to pay. Here's a this. Here's a tax abatement of any kind you want. We'll help your employees. It doesn't work, folks. That's not what they need. They have money. They want to go out, they want to move to another country, and because our politicians are so dumb, they want to sell their product to us and not have any retribution, not have any consequence. So all of that's over."
Source: http://www.motherjones.com/politics/2016/11/indiana-manufacturing-deal-trump-pence-carrier
Though I am disappointed with the source that doesn't acknowledge that Trump only mentions loans here and he hasn't technically gone back on that yet (that we know of) even if he actions are making a jumble of his message (a tax break/restructuring vs a loan are pretty much just implementation details).
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On December 02 2016 06:05 xDaunt wrote:Show nested quote +On December 02 2016 05:30 Incognoto wrote:“He has signaled to every corporation in America that they can threaten to offshore jobs in exchange for business-friendly tax benefits and incentives,” Senator Bernie Sanders of Vermont wrote in an op-ed on Thursday for The Washington Post. God damn it Bernie, no shit. Companies aren't bound to the USA by law, this isn't the Soviet Union. Companies are allowed to (and already) relocate manufacturing to elsewhere if it means improving profit. Why is it BAD that America be friendly to businesses, if it means that jobs stay in the USA. Shit, man. Trump can't catch a break, whatever he does, he does wrong. There are just a lot of butthurt liberals who are upset that they didn't think of what Trump did first. It's pretty clear that this is a YUUUGGGGEE PR victory for Trump. But in all seriousness, the federal government should be doing things to create a business friendly environment that, at the very least, doesn't do anything to encourage companies to relocate. This is why our corporate tax structure is so backwards. We should have lower corporate taxes (effective and nominal) and then make up the revenue shortfalls with taxes on higher wealth individuals. Discouraging companies from hiring Americans is just stupid.
Just curious, how much lower on the effective rate for corporations, and how much higher for wealthy individuals are you imagining balances out?
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Why not just put tariffs on external products? I'm sure there's a good answer to this question but I don't know what it is
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On December 02 2016 06:17 Incognoto wrote:
Why not just put tariffs on external products? I'm sure there's a good answer to this question but I don't know what it is
you can totally do that. It has about the same effect long run. It protects some jobs but makes everyone poorer in the long run (and sometimes short run).
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On December 02 2016 06:18 zlefin wrote:Show nested quote +On December 02 2016 06:17 Incognoto wrote:
Why not just put tariffs on external products? I'm sure there's a good answer to this question but I don't know what it is you can totally do that. It has about the same effect long run. It protects some jobs but makes everyone poorer in the long run (and sometimes short run).
Doesn't it also piss off other countries who see it as threat to their own prosperity?
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On December 02 2016 06:20 Logo wrote:Show nested quote +On December 02 2016 06:18 zlefin wrote:On December 02 2016 06:17 Incognoto wrote:
Why not just put tariffs on external products? I'm sure there's a good answer to this question but I don't know what it is you can totally do that. It has about the same effect long run. It protects some jobs but makes everyone poorer in the long run (and sometimes short run). Doesn't it also piss off other countries who see it as threat to their own prosperity?
yes, who usually respond with tariffs of their own. which means far less trade, and you don't get comparative advantage by trading with people for what they do best. So everyone ends up poorer.
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Here's what I'd like to see as a follow up to Trump's Carrier thing: A big, enthusiastic endorsement of Carrier where Trump encourages Americans to support Carrier.
Being generous, let's say Carrier has an ENORMOUS bump in sales. Doesn't that send a clear signal to other countries? Americans will totally rally around a great company keeping manufacturing in the US.
Imagine this: Trump has a list of "Great" American companies who agree to improve US manufacturing. Could be big.
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On December 02 2016 06:05 xDaunt wrote:Show nested quote +On December 02 2016 05:30 Incognoto wrote:“He has signaled to every corporation in America that they can threaten to offshore jobs in exchange for business-friendly tax benefits and incentives,” Senator Bernie Sanders of Vermont wrote in an op-ed on Thursday for The Washington Post. God damn it Bernie, no shit. Companies aren't bound to the USA by law, this isn't the Soviet Union. Companies are allowed to (and already) relocate manufacturing to elsewhere if it means improving profit. Why is it BAD that America be friendly to businesses, if it means that jobs stay in the USA. Shit, man. Trump can't catch a break, whatever he does, he does wrong. There are just a lot of butthurt liberals who are upset that they didn't think of what Trump did first. It's pretty clear that this is a YUUUGGGGEE PR victory for Trump. But in all seriousness, the federal government should be doing things to create a business friendly environment that, at the very least, doesn't do anything to encourage companies to relocate. This is why our corporate tax structure is so backwards. We should have lower corporate taxes (effective and nominal) and then make up the revenue shortfalls with taxes on higher wealth individuals. Discouraging companies from hiring Americans is just stupid.
Americans are expensive, even lowering corporate tax rate won't magically make them move jobs back or keep them here. They will simply reap the benefits while still trying to move as much labor out of the country as possible. So more money for the corporations but shit all for workers.
I wouldn't mind cutting corporate taxes, if corporations actually used that money to benefit their employees.
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On December 02 2016 06:31 Mohdoo wrote:
Here's what I'd like to see as a follow up to Trump's Carrier thing: A big, enthusiastic endorsement of Carrier where Trump encourages Americans to support Carrier.
Being generous, let's say Carrier has an ENORMOUS bump in sales. Doesn't that send a clear signal to other countries? Americans will totally rally around a great company keeping manufacturing in the US.
Imagine this: Trump has a list of "Great" American companies who agree to improve US manufacturing. Could be big.
Until the novelty wears off and people forget about it. Keep in mind that Carrier is losing market share due to higher prices of its products, this deal won;t change that.
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Any talk of tax reform must also address the degree to which the corporate form is used to shelter the assets of individuals. Lowering the effective rate prior to confronting this dynamic is a recipe for further economic harm to everyone but the rich.
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On December 02 2016 06:32 Slaughter wrote:Show nested quote +On December 02 2016 06:31 Mohdoo wrote:
Here's what I'd like to see as a follow up to Trump's Carrier thing: A big, enthusiastic endorsement of Carrier where Trump encourages Americans to support Carrier.
Being generous, let's say Carrier has an ENORMOUS bump in sales. Doesn't that send a clear signal to other countries? Americans will totally rally around a great company keeping manufacturing in the US.
Imagine this: Trump has a list of "Great" American companies who agree to improve US manufacturing. Could be big. Until the novelty wears off and people forget about it. Keep in mind that Carrier is losing market share due to higher prices of its products, this deal won;t change that.
Keep in mind carrier was planning to move 2000 jobs from all accounts I can find* and only has promised to keep 1000. That doesn't make the deal a bad thing from the Trump side of it, but if you're all concerned about the jobs Carrier is still cutting 1000 so it's not like they're suddenly 'good guys'.
Basically even as a Trump victory, 1000s people are potentially losing the job making carrier not any less bad/more american than they were before.
*Though I recall seeing the numbers as 1400 were moving, 1000 promised to be kept.
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On December 02 2016 06:32 Slaughter wrote:Show nested quote +On December 02 2016 06:31 Mohdoo wrote:
Here's what I'd like to see as a follow up to Trump's Carrier thing: A big, enthusiastic endorsement of Carrier where Trump encourages Americans to support Carrier.
Being generous, let's say Carrier has an ENORMOUS bump in sales. Doesn't that send a clear signal to other countries? Americans will totally rally around a great company keeping manufacturing in the US.
Imagine this: Trump has a list of "Great" American companies who agree to improve US manufacturing. Could be big. Until the novelty wears off and people forget about it. Keep in mind that Carrier is losing market share due to higher prices of its products, this deal won;t change that.
Trump's single greatest strength, media/cultural manipulation, could end up being an extremely valuable weapon that empowers American businesses.
I think it is very possible that Trump pushing people to support a company could have a really, really big impact. Supporting a set of American manufacturing businesses as a matter of patriotism and politics could go very well.
Forgive me, but I think this is a time where his rally size is very relevant. He gets people seriously, seriously excited. I could imagine the Trump cult having a really noticeable impact on a business.
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On December 02 2016 06:33 farvacola wrote:
Any talk of tax reform must also address the degree to which the corporate form is used to shelter the assets of officials. Lowering the effective rate prior to confronting this dynamic is a recipe for further economic harm to everyone but the rich.
Why?
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On December 02 2016 06:39 xDaunt wrote:Show nested quote +On December 02 2016 06:33 farvacola wrote:
Any talk of tax reform must also address the degree to which the corporate form is used to shelter the assets of officials. Lowering the effective rate prior to confronting this dynamic is a recipe for further economic harm to everyone but the rich. Why?
Because an unadorned rate cut on corporations is also a rate cut for the rich, even if one raises rates on individuals. It also creates a strong incentive for individuals looking to avoid the hike on individual rates to make use of inversion/shelter mechanisms.
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On December 02 2016 06:26 zlefin wrote:Show nested quote +On December 02 2016 06:20 Logo wrote:On December 02 2016 06:18 zlefin wrote:On December 02 2016 06:17 Incognoto wrote:
Why not just put tariffs on external products? I'm sure there's a good answer to this question but I don't know what it is you can totally do that. It has about the same effect long run. It protects some jobs but makes everyone poorer in the long run (and sometimes short run). Doesn't it also piss off other countries who see it as threat to their own prosperity? yes, who usually respond with tariffs of their own. which means far less trade, and you don't get comparative advantage by trading with people for what they do best. So everyone ends up poorer.
Tariffs will reduce competitiveness of firms who are protected in the long term as well. This will only make the problem worse when tariffs go down again. There are few measures more damaging than tariffs.
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On December 02 2016 06:31 Slaughter wrote:Show nested quote +On December 02 2016 06:05 xDaunt wrote:On December 02 2016 05:30 Incognoto wrote:“He has signaled to every corporation in America that they can threaten to offshore jobs in exchange for business-friendly tax benefits and incentives,” Senator Bernie Sanders of Vermont wrote in an op-ed on Thursday for The Washington Post. God damn it Bernie, no shit. Companies aren't bound to the USA by law, this isn't the Soviet Union. Companies are allowed to (and already) relocate manufacturing to elsewhere if it means improving profit. Why is it BAD that America be friendly to businesses, if it means that jobs stay in the USA. Shit, man. Trump can't catch a break, whatever he does, he does wrong. There are just a lot of butthurt liberals who are upset that they didn't think of what Trump did first. It's pretty clear that this is a YUUUGGGGEE PR victory for Trump. But in all seriousness, the federal government should be doing things to create a business friendly environment that, at the very least, doesn't do anything to encourage companies to relocate. This is why our corporate tax structure is so backwards. We should have lower corporate taxes (effective and nominal) and then make up the revenue shortfalls with taxes on higher wealth individuals. Discouraging companies from hiring Americans is just stupid. Americans are expensive, even lowering corporate tax rate won't magically make them move jobs back or keep them here. They will simply reap the benefits while still trying to move as much labor out of the country as possible. So more money for the corporations but shit all for workers. I wouldn't mind cutting corporate taxes, if corporations actually used that money to benefit their employees.
Well why not lower taxes on employees then. 
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EPT
