posted by Lyric Hughes Hale on November 24, 2017 - 12:00am
In New York last week I heard a wonderful rendition of Paul Simon's The Boy in the Bubble at the Café Carlyle by Jessica Molasky and John Pizzarelli. They host a weekly jazz program I cannot live without, Radio Deluxe. Simon's lyrics perfectly capture the angst of 2017 although the song was written more than thirty years ago. Perhaps artists are better prognosticators than economists!
The entertainment we enjoy says a lot about our economy. At the height of the Depression, movies depicted the sumptuous lives of the rich and the privileged. Now that mainstream entertainment has been seized by human scandal, newer types of fantasy entertainment are bound to gain even more dominance. The world of anime, manga, and video games is expanding rapidly and not just for children.
I walked by the Nintendo Store in Rockefeller Plaza, and decided to ask the people in a very long line- most of them over 30- why they were waiting in the rain. They had played video games as children, and they were queuing up for the super scarce Super NES Classic, an updated version of the console of their youth. Come Black Friday, you will see lines for this product at Target, Best Buy, and Gamestop.
My next stop was Anime NYC a convention that attracted thousands of people, many in costumes who love Japanese animated films. In 2017 alone, there were over 200 of these conventions in the US. This is a huge and growing business. Anime sales in the US were $3.5B in 2014, and US sales of Japanese games were $15B in 2013, the latest figures available. I am positive that these numbers will soar. The other biggest market for Japanese games, anime, and manga? China. The Japanese government routinely employs friendly anime in their communications. In the US, anime figures have replaced human models in corporate compliance materials.
So to end this letter as it began, with music. Back in Chicago this weekend I attended a video game concert for Zelda with accompanying video of the games themselves. The Auditorium theater was packed, with people of all ages but especially 20-somethings. It struck me that this might be the newest form of opera, and that all of this is a underappreciated manifestation of Japanese soft power. Serious question related to our productivity section below -- does all of this activity add value?
I’m imagining that not many of our readers play video games, read manga or watch anime. But you might enjoy it. I am now a Level 10 (out of 50) player of Splatoon 2 which I can play remotely with my granddaughter (Level 35). Most of you do use emoji, another Japanese cultural contribution, so Happy Thanksgiving to you and your family. I hope you enjoy reading this selection of real-world research during your pre- or post-prandial downtime.
RESEARCH BY ECONVUE EXPERTS
Compared to incoming Fed chairs over the past 40 years, Powell has about average policy experience. Named to the Fed Board of Governors in 2012, Powell will have had nearly six years of direct work conducting monetary policy before taking the helm.
Republicans insist that their deep cuts in corporate rates will produce waves of new investment, mainly from abroad. That’s very doubtful – but if it did happen, it would also drive up the dollar’s value against other major currencies by about 10 percent. Here’s the rub: the currency changes would exact a $1.6 trillion windfall loss from U.S. investors holding foreign stocks and bonds -- $220 billion from retirement savers holding mutual funds invested abroad. But foreign investors holding U.S. stocks and bonds would reap windfall gains of $2.2 trillion!
Robert Shapiro joins the debate on tax reform plan on Fox news.
Ignoring the Doklam issue could cost both India and China dearly. A concerted effort toward a tripartite resolution is indispensable. Diplomatic channels should be immediately deployed to reinforce a fresh politico-legal framework which is comprehensive in scope and yet unambiguous and utilitarian in intent.
Congress may or may not end health systems’ ability to issue tax-exempt bonds. That decision will not alter the competitive landscape. In post-reform healthcare, capital formation is a means to value creation, not revenue optimization. Winning health systems understand that outcomes matter, customers count and value rules.
The wild ride in bitcoin and ICOs continues, as the story woven by this week’s links shows. I’ve attempted to select articles that balance the hype with realism and healthy skepticism.
This week, the banking drama unfolds in three acts: Payments Possibilities, Regulatory Ruminations and Lending Lessons.
STORIES IN OUR SPOTLIGHT
Massive infrastructure projects are failing at unprecedented rates
Keith Schneider 11/201/2017 National Geographic
The global megatrend of decentralization and fragmentation in politics and technology includes energy and infrastructure.
Look up: Financial red lights are flashing again
Niall Fergusom 11/19/2017 the Times
A sobering read.
The world of seven billion
3/2017 National Geographic
Gorgeous map shows economic status of world population. The stronger the wealth gap between nations the more likely borders are to be strictly controlled and regulated. @simongerman600
This map will change how you see the world's tech titans
Briony Harris 10/15/2017 World Economic Forum
Productivity still matters for median worker’s pay
Larry Summers 11/16/2017 Financial Times
Declines in productivity are not the only cause of stagnating wages, but are certainly part of the problem leading to increasing income inequality.
The Measurement that holds economic statistics back from reality
Diane Coyle 11/15/2017 Financial Times
A life of personal ease and entertainment is not necessarily a productive life. I’m not convinced that the substantial productivity declines we’ve seen can be ascribed to measurement issues. Still a puzzle.
Settling for Stasis: Americans use technology for comfort, not revolution
Ryan Streeter 10/17/2017 American Enterprise Institute
AEI: A Facebook employee put it well: "The best minds of my generation are thinking about how to make people click ads."
New paper on pay-productivity link does not overturn EPI findings
Lawrence Mishel & Josh Bivens 11/7/2017 Economic Policy Institute
Price of an easier lifestyle may be lower productivity
Philip Aldrick 11/8/2017 the Times
Is the cost of an easier lifestyle lower productivity?
Does studying economics make you selfish?
Shankar Vedantam 2/21/2017 NPR
Students who study economics are more likely to act selfishly aka rationally. Or is there some sort of self-selection involved?
Uh oh, mortgage #delinquencies are rising again!
Jeroen Blokland 11/17/2017 @jsblokland
Not yet a trend; still at historically low levels.
U.S. crude output set to rocket, according to IEA
11/14/2017 Financial Times
Growth in US oil output until 2025 will be the strongest seen by any country in the history of crude markets, making it the undisputed leader among global producers.
How Some Small Banks Are Firing the Fed
Christina Rexrode 11/9/2017 Wall Street Journal
Bank of the Ozarks wanted to cut costs, so it ditched the Fed.
Cities of #Chicago & #Toronto, now with similar populations, change in neighborhood incomes since 1970.
David Hulchanski 11/10/2017 Twitter
Fascinating comparisons, Toronto & Chicago
Analyst Raises Scenario of China's Takeover of North Korea, Others Have Doubts
Natalie Liu 10/7/2017 VOA News
If true, I wonder how Japan, South Korea, and US citizens would feel about an increase in Chinese territory in the region. Cannot imagine that this would be bloodless: North Koreans will fight.
A steady series of cautionary comments by China’s central bank governor.
'Singles Day' China shopping festival smashes record-$25 billion haul- but how much merchandise will be returned?
What China Wants From Trump
Mira Rapp-Hooper 11/7/2017 Foreign Affairs
Solid essay, but don’t agree that China has won the hearts and minds of its Asian neighbors over the US.
The Trump White House needs capable China hands to guide its US foreign policy
Chi Wang 11/10/2017 South China Morning Post
Experienced China hands are on deck...
Why China’s aerospace experts have become Xi Jinping’s new political elite
Jun Mai 5/5/2017 South China Morning Post
Giving new meaning to the term high-flier, four aerospace engineers have become provincial governors in the past four years.
What happens if China makes first contact?
Ross Andersen 12/2017 the Atlantic
The next big thing for tech could be contact with an alien civilization.
Advance Planning for Fiscal Insolvency
Motohiro Sato 11/9/2017 the Japan Foundation
Japan’s hidden weakness: dependency of local gov’ts on central gov’t funding.
Japan’s elderly turn to life of crime to ease cost of living
Leo Lewis 3/27/2016 Financial Times
This is eye opening. Annual pensions of under $7,000 don't go far.
Open Doors 2017 Executive Summary
Fewer Americans choosing to study abroad in China, w/their ranks down by 9% last year. Japan meanwhile is up 18%.
Drawbridge economics: the Brexit reality check is coming
Adam Posen, 11/2017 Prospect Magazine
What will happen to Britain's economy when the insular turn of Brexit meets the reality of global trade?
It’s pie in the sky to think Brexit talks can move on in December
Jonathan Lis 11/8/2017 the Guardian
If you want to understand Brexit read this thread. Best option: UK asks to delay Article 50, otherwise expect a crisis in December or January.
Can Germany fix Facebook?
Linda Kinstler 11/2/2017 the Atlantic
A new law seeks to protect “human dignity” on the Internet.
Russia’s election meddling is another American intelligence failure
Dana Priest 11/13/2017 the New Yorker
Add this to a long string of failures-Vietnam, 9/11, Iraq, etc etc-if our intel services were a company, it would no longer be in business. As the world’s melting pot, business and technology innovator, why aren’t we better than this?
Henry Kissinger: Negotiating black majority rule in Southern Africa
James K. Sebenius, R. Nicholas Burns, Robert H. Mnookin & Alexander Green 11/19/2017, a research paper from Harvard University
The road from Rhodesia and Ian Smith to Zimbabwe and Robert Mugabe- the remarkable roles of apartheid-era South Africa and Henry Kissinger.
The true size of Africa h/t @databreak
Map of every country's biggest export ( What's up with San Marino?)
Cool view of the world economy. Oil still dominates.
Muhammad Bin Salman Strikes
Marvin Zonis 11/5/2017
Fascinating readout of recent events in Saudi Arabia, led by its 32-year old crown prince.