economics

The Spider’s Web- a documentary

“The Spider’s Web: Britain’s Second Empire” is a documentary produced for 4,000 pounds, which traces how the City of London manages tens of trillions of dollars. The City of London itself is a bizarre structure, separate from the London with which we are all familiar. This strange subset of the city has its own governmental structure, which is largely dominated by financial interests. This well-researched and engrossing documentary explains how -after Britain’s empire collapsed in the 1960s- financial corporations based in the City of London created a series of secrecy areas or tax havens in U.K. territories from the Cayman Islands to Jersey. The result was a neo-colonial system, in which vast sums of money flowed by illicit means to the City. …

The Great Recession

New York Magazine has an outstanding article, “Ten Years after the Crash, we are still reliving in the world it brutally remade.” The article consists of a series of brief statements by economists, activists and academics, which underlines the centrality of this event to our modern social, political and economic systems. If you want to understand the rise of populism, the fall of fertility in the developed world, or why the pension crisis is so severe, this piece provides a succinct and easy to understand analysis. As I write these words, the Turkish lira is falling in a manner that reminds many economists of the Asian Financial Crisis, and housing prices in the United States have risen to dramatic highs in West Coast markets. Many market watchers are nervous. …

Global Debt

The website Visual Capitalist has a chart that shows how much of the world’s debt is owned by individual countries. The image is a giant circle. What immediately strikes one when looking at it is that half of the worlds debt is held by only two nations, the United States (31.8%) and Japan (18.8%). Some nations on the list are surprising. Is it really possible that Italy’s debt (3.9%) is roughly twice that of Spain’s?

The debts are color-coded, so that the nations with the highest debt to GDP ratios are in yellow. With this approach Japan is the clear standout, a giant block of yellow on a mostly mauve chart, with the lone exception of Greece. According to this chart, Japan’s debt to GDP ratio is currently 239.3%, the highest of any major nation. On the opposite end of the spectrum, Russia is only responsible for .3% of the world’s debt, which places it in a similar category as oil powers such as Saudi Arabia, the UAE and Nigeria. One often hears that Russia is suffering because of low oil prices. It’s also important to have the context that Russia has the lowest debt of any major power. Of course, with $20 trillion dollars in debt, the U.S. is by far the largest global debtor. …

Maps of U.S. Trade

I recently came across this great blog post by Yuka Kato, which has beautiful maps illustrating U.S. trade with different regions of the world. This would be a great tool in classes that address international political economy, including an Introduction to International and Global Studies class. You can also find other great maps for an introductory classroom on the blog.

Shawn Smallman, 2016

The Lights in the Tunnel

Ford’s book, The Lights in the Tunnel, is a bleak look at the future of global economies given an accelerating pace of automation. The book’s key idea is both clear and frightening: “The central thesis of this book is that, as technology accelerates, machine automation may ultimately penetrate the economy to the extent that wages no longer provide the bulk of consumers with adequate discretionary income and confidence in the future” (237). As a result, Ford suggests, governments will have to plan for radical rethink of the free market. …

Energy Reform in Mexico and Brazil

"The Offshore Drilling Oil Rig And Supply Boat Side View" by num_skyman at freedigitalphotos.net
“The Offshore Drilling Oil Rig And Supply Boat Side View” by num_skyman at freedigitalphotos.net

I’ve just returned from three weeks in southern Mexico, where the biggest political issue in the news has been the President’s energy reform plan. In 1938 Mexican President Lazaro Cardenas nationalized the petroleum industry. This measure attracted popular acclaim in Mexico, and fury in the United States. While President Roosevelt was pressured to act, he knew that World War Two was coming, and had little interest in alienating a key neighbor. The state oil company PEMEX is now Mexico’s largest economic organization, and a source of national pride. When you travel in Mexico, all of the gas stations have the green stripe and red eagle of PEMEX. But now the company faces massive challenges. …

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