Paul Wallbank – Brilliant Communications

Tag: economics

  • Hillary Clinton’s bid for the future

    Hillary Clinton’s bid for the future

    As the 2016 US Presidential election settles down into a competition between Republicans and Democrats, Hillary Clinton has released her vision for the American tech industry.

    Hillary Clinton’s Initiative on Technology & Innovation is a comprehensive document laying out the candidate’s plans to increase the American workforce’s skills and the nation’s infrastructure.

    What’s particularly notable about the Clinton plan is her aim of “building the tech economy on main street,” which is “focused on creating good jobs in communities across America.”

    Spreading the tech industry’s jobs, and wealth, beyond a few middle class enclaves is an important objective for all nations in the twenty-first century and Clinton’s objectives are an indication that the US political establishment is beginning to understand this.

    Other countries should be noting Clinton’s objectives to raise the skills of workers, build the tech infrastructure and get investment into smaller communities as something they too have towards.

    In an Australian context, Clinton’s initiatives highlight the missed opportunity of the Turnbull government’s Innovation Statement, a narrowly focused and weak document that has done little to encourage investment and even less to reform skills training.

    The Clinton move though shows technology, training and stimulating new businesses will be one of the imperatives of nations as they deal with a rapidly changing economy.

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  • Entering an era of surpluses

    Entering an era of surpluses

    With the global Zero Interest Rate Policy experiment failing, we’re now entering the era of negative interest rates with a quarter of the world’s central banks charging savers.

    The world is flooded with money, but we also have surpluses in manufacturing, a surplus in most commodities, of energy and an increasing surplus of labor.

    From Shanghai to Barcelona, the surplus of labor is beginning to be felt as industries become increasingly mechanised and the consequences of short sighted economic policies over the last thirty years begins to be felt.

    That labor surplus is also driving the political shifts in Europe and North America as workforces are finding their living standards being pressured and their economic prospects dwindling. As a consequence, voters are looking for scapegoats – immigrants in Europe, the EU in Britain and Mexicans in the US.

    Regardless of which scapegoat you choose to blame for the global economy’s uncertainty, the fact remains we are in a time where scarcity can’t be assumed.

    This means business models that are based upon restricted supply are, in most sectors, under threat. The whole economics of scarcity becomes irrelevant when there are no shortage of suppliers around the globe.

    In some fields, such as energy, technological change is seeing the dominant positions of oil companies, electricity generators and distributors being challenged in ways that wouldn’t have been thought possible a few years ago.

    Even regulated industries where government licenses artificially controlled supply – like taxis, broadcasting and telecommunications – increasingly new distribution methods are changing the economics of those industries. No longer is buying a government license a sure fire way to big profits.

    Right now, the imperative for businesses to find the areas where there is scarcity and supply constraints. For many industries that may be too difficult a transition.

    Negative interest rates though take us into uncharted territory. How the global economy responds to virtually free and unlimited money is going to be an interesting experiment.

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  • Switzerland debates giving away money

    Staid, conservative Switzerland is one of the first developed countries to seriously discuss a universal guaranteed income.

    While it appears the proposition will fail, the fact it is being debated indicates an acknowledgement of changing attitudes towards income and social security.

    In many respects governments – particularly in the English speaking world – have ignored the personal social consequences of their economic policies over the last thirty years that have seen working people’s and increasingly the middle classes’ incomes fall and become more precarious.

    Now those costs are being acknowledged in the face of increasing concentration of wealth with politicians and business leaders being forced to confront far less stable and cohesive societies.

    It may be that the discussion of a universal guaranteed income forms the foundations of a new social compact that defined the mid Twentieth Century, increasingly it looks like something is needed in increasingly divided economies.

    While a unified guaranteed income may not be the solution to addressing the economic and social needs of a substantial proportion of a workforce that is under employed and poorly paid, a discussion on what we can do needs to be had. At least the Swiss have started this.

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  • Rethinking economics in the face of demographics

    Rethinking economics in the face of demographics

    The Western World’s demographic chickens come home to roost. Investor John Mauldin shows nine charts that illustrate the low growth dilemma facing central banks.
    For governments to stimulate economies, they are going to have to find a way to increase productivity and the spending power of populations. The current remedy of pumping cheap money into the economy isn’t enough to do this.
    One concerning message for the tech sector in these figures is that simply boosting productivity will not be enough to boost the economy. In fact widespread automation of existing jobs may make the problem exponentially worse.
    The statistic that indicates younger workers are dropping out of the workforce to look after older relatives should be particularly worrying for economists and a warning to politicians that thirty years of the neo-Liberal model espousing smaller governments and reduced public services now threatens to change the political dynamic – something that the rise of Donald Trump is also a symptom of.
    For policymakers, the question is how to employ people in jobs that give them enough income to support their families without ringing up huge debts.
    Interestingly, much of the current tech mania is based upon the same credit based consumerism that’s driven the last thirty years of western economic growth. Apps like Uber, AirBnB and the countless delivery apps are good examples of businesses based on happy consumers jamming more on their credit cards.
    The era of 1980s thinking is over, we’re going to have to rethink what policies encourage employment and wealth creation along with seriously considering what capitalism is going to look like in the mid-21st Century.

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  • Rebuilding America’s communities

    Rebuilding America’s communities

    One of the features of the Twenty-first Century will be how communities take over providing their own services as cash strapped governments find it difficult to provide the services citizens expect.

    In many respects the United States is ahead of the rest of the world in this as the decentralised nature of US government sees many functions being the responsibilities of local county and city agencies.

    Following the 2008 financial crisis many smaller cities and rural counties found their revenues crunched, for many of them this compounded thirty years of economic decline as local industries folded or fled overseas.

    James Fallows in the Atlantic recounts a trip with his wife across the United States where they visited communities rebuilding themselves in the face of economic adversity.

    In his long piece detailing how those different communities are rebuilding, Fallows comes to the conclusion a new political consciousness is evolving among the groups working to change their cities. While early, the common objectives of these groups will evolve into a movement.

    Fallows marks what will almost certainly be a defining feature of today’s first world nations as their politics evolve around these movements.

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