Archive for the ‘#economy’ Tag

Richard Florida: Creativity Is the New Economy   Leave a comment

 

 

AN : Richard Florida’s ” The Rise of the Creative Class Revisited” was released at the end of June. Huff Post , by permission ,excerpted from the 3rd chapter and the posting here shares insight from that.

Richard Florida: Creativity Is the New Economy.

http://www.huffingtonpost.com/richard-florida/creativity-is-the-new-eco_b_1608363.html?utm_hp_ref=tw

 

BRIIC is a better BRIC | MINING.com   Leave a comment

Back in 2001 when tech weary investors first started noticing the allure of the emerging markets, Goldman Sachs analyst Jim O’Neill coined the acronym “BRIC” to collectively refer to Brazil, Russia, India and China, then considered the top tier of the emerging economies. The BRIC countries became a symbol of the shift in economic power from the G7 countries to the developing world. For much of the first decade of the 21st Century, the BRICs lived up to their billing. They largely led the world in GDP growth and delivered rock solid returns to those wise enough to invest early. See our current analysis of Latin American rail in our latest Global Investor Newsletter

Over the years, with investors continuously seeking the next wave in emerging markets, other clever acronyms came and went, but none caught on quite like the BRIC. In the investment world nothing is static, and at Euro Pacific Capital we feel it’s time for a change. But the BRICs don’t need to be abandoned, just expanded. In particular, it needs another “I” as in Indonesia. In other words, we think the “BRIC” bloc should now be the “BRIIC” bloc. For a variety of reasons, Indonesia has earned the right to be considered as a premiere destination for emerging market investment.

Most investors don’t realize that Indonesia is the 4th most populous country in the world, with more people than Brazil or Russia, two other charter nations in the BRIC club. They also may be unfamiliar with Indonesia’s enormous under developed natural resources, including oil/gas, coal, tin, gold, wood and rubber. Indonesia’s economy is well-balanced, with a large consumption component and limited reliance on exports to the developed world. Impressively, retail sales in Indonesia doubled from 2009 to 2012 (yes, doubled in three years) which we attribute to an improving labor market, favorable demographics, strong growth in wages and high consumer confidence. Meanwhile, developed markets struggle with high unemployment, an aging workforce, stagnant wages, and low consumer confidence. It’s no wonder retail sales in the US and Europe, struggling to grow 1% per year, create a stark contrast to Indonesia.

While Indonesia’s economy is still small relative to the other BRICs (roughly half the size of Brazil and Russia), it does have an economic growth rate that puts it well into the mix. According to the IMF, for the 17 year period between 1990 and 2007, Indonesia grew at an annual rate of 7.54%. While this is less than China (13.3%) and India (7.6%), it is more than Brazil (6.1%) or Russia (4.92%). The country is the largest economy in Southeast Asia and is a member of the G-20 group of the world’s major economies. ”

via BRIIC is a better BRIC | MINING.com.

Posted March 10, 2012 by arnoneumann in BRICS, Economic, Uncategorized

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Do Cities Need Universities to Survive?   Leave a comment

The so-called “town and gown” relationship between cities and universities has become increasingly important in recent years. As universities contribute more and more to the local economy through research, reputation and building, they’re seen not only as educational and cultural institutions, but economic development tools. But how much should cities rely on universities?

This essentially was the question posed to four university professors at a panel discussion in Los Angeles. Hosted by Zocalo Public Square and moderated by The Chronicle for Higher Education editor Jeff Selingo, the event asked whether universities can save cities.

“We really can’t believe that universities can save cities,” said Gene Block, chancellor at the University of California Los Angeles. He argues that even though universities contribute to a city’s culture and economy, they can’t be fully relied upon to solve major foundational problems should they arise.

And so far they haven’t, according to Rice University President David Leebron.

I don’t really see it so much as a question of whether universities can save cities. Cities generically aren’t really in any danger,” Leebron said. “The real question, I think, is can universities make our cities more competitive, and more competitive on a global scale?”

Leebron said universities can play a major role in helping cities provide jobs and education that attract people and businesses from all over the world.

That’s both in terms of what they can contribute to the economic advancement of the city, but also importantly what the universities contribute to the quality of life in the city and the quality of governance in the city,” Leebron said.

Arizona State University President Michael Crow said that universities will continue to be a part of ensuring a city’s economic success, but also that they will be a key part of a wider scale regional economic cohesiveness. He points to the concept of megapolitan regions, in which ten major clusters of metropolitan areas in the U.S. are expected to be home to about 80 percent of the country’s future population.

“The role of the universities in each of them is not to save the cities, because they are what they are,” Crow said. “It’s whether or not in the United States the universities can be facilitative of our megapolitans being competitive and at the same time have some concept of economic justice in the way that they evolve.”

The university heads pointed to some of the benefits they bring to the community, such as an increased involvement in K-12 education. But they also touched on the more physical side of university building projects. University of Southern California President C.L. Max Nikias pointed to a massive mixed use project the university is pursuing right off campus in South L.A. It will be the largest redevelopment project in the history of that part of town.

And though the university clearly is a developer, it’s not only a developer, according to Nikias.

“This university is in the business of educating people and doing research. We’re not a real estate company,” Nikias said.

Unsurprisingly, the four university heads spun their relationship with their cities in a positive light. None were willing to argue that their cities wouldn’t survive without them. But the link between the two is undeniably powerful. And as these universities and the knowledge-based economy they enable become more important, the interrelationship between universities and cities will become even closer.

via Do Cities Need Universities to Survive? – Jobs & Economy – The Atlantic Cities.

What the Banda Islands Tell Us About World Trade | The Curious Capitalist | TIME.com   Leave a comment

Though it is hard to tell by visiting the Bandas today, these miniscule islands played a pivotal role in global economic history. That’s because of what grows on them: nutmeg. For centuries, the Bandas were the primary source of the world’s nutmeg, once the condiment equivalent of gold. Prized for its supposed medicinal powers, nutmeg commanded outrageous prices inEurope, and awarded outrageous profits to anyone who controlled its supply. Finding the Bandas, and the rest of the nearby Spice Islands, was the main motivation behind Europe’s age of exploration. The dream of the Bandas sent the Portuguese around the Cape of Good Hope and Christopher Columbus accidentally towards America. The British and Dutch fought over the islands, and the Dutch, the eventually victors, grew fat off its monopoly of the nutmeg trade. One famous tale shows just how valuable these islands once were. In a peace treaty after a war fought in the mid-1660s, the English let the Dutch keep one island in the Bandas, called Run, that they had claimed. As part of the settlement, the Dutch recognized British control over another small island on the other side of the planet –Manhattan.

That deal seems ridiculous to us today.New York turned into the world’s financial capital, the Big Apple of the most important economy, covered with skyscrapers, luxury apartments and some of the best museums, theaters and universities anywhere. Meanwhile, Run is a rocky backwater covered with banana palms, nutmeg trees and a cluster of huts. While New Yorkers deal in high finance and international publishing, the residents of the Bandas still harvest nutmeg as they had centuries ago. Seeds can be seen drying in the sun outside of nearly every home. There are few signs in the Bandas today of their glorious history, beyond a handful of crumbling forts. And though the locals aren’t desperately poor – how can you be, when mangoes hang heavily from trees along village walkways – they’re not getting rich off their cherished nutmeg either. Now that the spice is a common ingredient, readily found in every supermarket across the U.S. and Europe, it has lost its value and could never command the lofty prices of yesteryear.

There is perhaps no better example in history of how trade rewards and punishes. When the Bandas had a clear comparative advantage over the production of a good in heavy demand – in other words, uncontested superiority over the technology, know-how and physical facilities (the trees) needed to make highly prized nutmeg – these islands could demand astronomical prices for their output and influence the course of global trade and world history. But no comparative advantage, no matter how secure it may seem or long it may last, can be perpetuated indefinitely. Though the Dutch went to great lengths to preserve their grip on the nutmeg trade, the high prices inevitably attracted competition. The British eventually figured out how to grow nutmeg in their own empire, global production increased, and the Bandas lost their unique comparative advantage. The islands descended from the pinnacle of the global economy into the isolated, anonymity of today.

The Bandas vanished from the global economy because they never changed with changing technology and consumer tastes. As the Bandas lost their dominance in the nutmeg trade, they needed to do something else – maybe capitalize on their farmers’ extensive knowledge of nutmeg to “move up the value chain” and shift into processing it into some new, more useful product. But that never really happened. To be fair to the locals, they did not possess the power to determine their own affairs. The Dutch ruled, and they were more interested in sucking what wealth they could from the islands back to Europe than developing a healthier local economy in the Bandas. Yet even since Indonesia’s independence, little effort has been made to turn the Bandas into much more than a bunch of nutmeg groves. There is talk of encouraging a tourism industry, but it remains mainly talk. That rickety propeller plane that flew us to the Bandas can never carry in enough brave tourists to make much of a difference to the local economy.

So, you ask, why is the story of the Bandas relevant to us today?

Read more: http://curiouscapitalist.blogs.time.com/2011/12/28/what-the-banda-islands-tell-us-about-world-trade/#ixzz1i60Idq00

via What the Banda Islands Tell Us About World Trade | The Curious Capitalist | TIME.com.

Posted December 31, 2011 by arnoneumann in Economic

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A new banking crisis: You can bank on it – Opinion – Al Jazeera English   Leave a comment

“You can bank on a banking crisis. You can bank on bankers who are primarily interested in their own portfolios. 

You can bank on banks remaining key behind-the-scenes players in our politics and outspoken when they sense that regulators are moving in on their permanent party of payouts.

You can bank on their outrage when someone, anyone, suggests that they should pay their fair share or that their greed has to be checked or practices punished.

Bankers are circling their guilded wagons to fight off attacks on many fronts.

In the public arena, they are increasingly fed up with the “imbecilic” – stronger language to come – critics from the likes of Occupy Wall Street that they fear are inspiring public hostility to the lords of finance.

There have even been protests at recruiting conferences on campuses where the MBA’s used to stand in line for a chance to rake in the outsized salaries that awaited kids blessed as bankster-worthy.

In-depth coverage of the global movement

This is upsetting to Jamie Dimon, the $23m a year CEO of JP Morgan Chase, who is taking umbrage, telling an investor’s conference: “Acting like everyone who’s been successful is bad and because you’re rich you’re bad, I don’t understand it.”

Bernard Marcus, a co-founder of Home Depot, and self-described “job creator” didn’t mince his words, according to Bloomberg News.

“If successful business people don’t go public to share their stories and talk about their troubles, they deserve what they’re going to get.” He said he isn’t worried that speaking out might make him a target of protesters.

“Who gives a crap about some imbecile?” Marcus said. “Are you kidding me?”

Marcus and Diamon and the small .01 per cent of the one per cent they are part of are not kidding about fighting back either. The protesters may piss them off, but they are fighting a deeper trench warfare now against regulators and central banks who say they want to save them from themselves.

Comments David Dayan on the website Firedog Lake:

“It should come as no surprise that this coterie of self-pitying “job creators” lines up pretty perfectly with right-wing Republicans and free-market fundamentalists. Just because this attitude completely crashed the economy about three years ago doesn’t mean they should be made to feel bad about it, however.”

He cites an article on the Roman Empire which says that, even with all its slaves, it had a more equitable income distribution than the US has today. Writes Tim DeChant:

“To determine the size of the Roman economy and the distribution of income, historians Walter Schiedel and Steven Friesen pored over papyri ledgers, previous scholarly estimates, imperial edicts and Biblical passages. Their target was the state of the economy when the empire was at its population zenith, around 150 CE. Schiedel and Friesen estimate that the top one per cent of Roman society controlled 16 per cent of the wealth, less than half of what America’s top one per cent control.”

Keeping wealth concentrated seems to be what the bankers do – but sometimes with enough excess and irresponsibility to bring themselves down.

In Washington, the Federal Reserve Bank, ironically founded and run by the very banks who have been blessed with secret subsidies in the trillions, fears another financial crisis driven by a banking crisis.

They want American banks to hold more capital – and to keep it more easily accessible. According to the New York Times, they have already compromised with pressure from their clients, adding that “the final capital rules were unlikely to be more stringent than international limits that were still under development. That is a small victory for banks who warned that they would be severely disadvantaged if capital requirements here were stricter than those governing overseas banks.”

Meanwhile, overseas, the same battle royale is underway. In England, regulators are considering new rules that would outlaw investment banking by commercial banks. This is the very problem that America’s Glass-Steagal Act was passed to prevent in the l930s.

When that law was “modernised” – ie dumped as unnecessary – by Congress with Bill Clinton’s blessing, the banks rushed into the game of largely unregulated speculation with disastrous consequences clear for all to see.

The international regulators have their own too big to fail list of 29 banks they call “G Sifis” to insure higher capital levels. The risky banks that first opposed the designation, are now using it to market themselves as safer. Go figure!

While many in the world support a tax on financial transactions, the US bank lobby has killed it here. They also colluded with subprime lenders, and before them, red-lining discriminatory lenders to scalp borrowers and promote fraudulent loans with little push back by politicians who were clearly bought off.

In Switzerland, Europe’s bank capital, a central banker trying to make the industry more prudent has come under sustained personal attack by his colleagues.

The New York Times reports:

Mr (Phillip M) Hildebrand, the president of the Swiss central bank, was called “arrogant” and “egotistical” by bankers quoted anonymously in the pages of Swiss newspapers. His supposed sin: Wanting banks to hold extra capital. The fact that Mr Hildebrand was himself a former hedge fund manager in New York seemed only to heighten the sense that he had betrayed his profession.

“He’ll never find another job in Switzerland”, the Swiss newspaper Der Sonntag quoted an unnamed high-ranking banker as threatening Mr. Hildebrand in 2010.

The unusually bitter attacks on a central bank chief were a measure of what was at stake. Mr Hildebrand, 48, had a high-visibility role in a struggle between bankers trying to preserve their most lucrative business practices and regulators trying to defuse a system that, many believe, nearly blew up the world economy.

This very public food fight offers a window into why bankers are fighting – and often winning their war on politicians and the public. They are relentless in pursuit of their interests and have the ability to pay for the best law firms and PR flacks.

The bankers are trying to come with theories for our depressing economic woes that places the blame on everyone but them. Fedhead Ben Bernanke says it was all a “global savings glut” that did us in. Hence, anyone that was more of a saver than an investor is responsible.

Hyun Song Shin, another Princeton professor, says bullocks to his colleague Benanke in a detailed paper refuting his strawman, arguing the crisis was caused by “a ‘global banking glut’, ie the rise in cross-border lending, than the ‘global savings glut’.”

Without falling down the rabbit hole of endless well-footnoted debates, the truth is that millions of savers have seen their savings shrink and most bankers, thanks to bailouts and cheap money, watched their holdings rise.

Blaming the victim for the crime has a long and dishonourable history,

As bad as the economy gets, and most forecasters suggest little hope for a rebound in the year ahead, even as there are blips of “positive data”, the bankers seem determined to save themselves if and when the ship sinks.

They already own the lifeboats.

The challenge facing the 99 per cent is how to organise more broadly and build the political muscle to break up the big banks, dissolve the “zombies” (failed banks on borrowed time) among them and rebuild an economy that works for all of us.”

via A new banking crisis: You can bank on it – Opinion – Al Jazeera English.

Posted December 26, 2011 by arnoneumann in banking, Banking System, Economic

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Invest 2% of GDP in 10 Sectors Result: A Green Global Economy | CleanTechnica   Leave a comment

International policies that would direct “just 2 percent of global GDP into 10 key sectors would kick-start” the global transition to a more sustainable, ‘Green Economy,’ according to a UN Environmental Program report.

All the elements to enact a transition to a “low-carbon, resource-efficient and socially inclusive global economic model” are here now, and businesses and governments are already promoting and fostering greater investments in 10 key sectors UNEP has singled out: agriculture, energy, buildings, water, forestry, fisheries, manufacturing, waste, tourism and transport.

Investing 2 percent of global GDP in these sectors would not only “shift the global economy on to a more sustainable growth trajectory, but it would maintain or increase growth over time compared to the current business models,” according to UNEP’s “Towards a Green Economy: Pathways to Sustainable Development and Poverty Eradication.”

Investing $100 billion to $300 billion per year in sustainable agriculture between now and 2050, according to UNEP, “could lead to better soil quality and better yields for major crops, representing a 10% increase over the current strategies.”

“The elements of a transition to a Green Economy are clearly emerging across developing and developed countries alike,” UNEP executive director Achim Steiner stated. “There are now some nations going further and faster than others, which is in many ways generating a ‘pull factor’ that, if maintained, may bring others along over the coming months and years.”

Time is Ripe

The time is ripe, the UN points out, as UN Framework Convention on Climate Change (UNFCCC) negotiators, stakeholders and participating observers prepare to convene in Durban, South Africa at the end of the month to try and negotiate an extension or a successor to the Kyoto Protocol.

“With the world looking ahead to the Rio+20 UN Conference on Sustainable Development in June 2012, the UNEP Green Economy report challenges the myth that there is a trade-off between the economy and the environment,” said Secretary-General Ban Ki-moon in a statement issued on the release of the report.

“With smart public policies, governments can grow their economies, generate decent employment and accelerate social progress in a way that keeps humanity’s ecological footprint within the planet’s carrying capacity.”

via Invest 2% of GDP in 10 Sectors Result: A Green Global Economy | CleanTechnica.

Posted November 18, 2011 by arnoneumann in Environment, Green

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Revealed – the capitalist network that runs the world – physics-math – 19 October 2011 – New Scientist   Leave a comment

The  conclusions from the analysis has insight and at the same time limitations. A double edged sword if you will. All power and control can be used for good , and it can be used to wield overbearing and evil control . This is why  oversight, transparency and  accountability.

“”Its disconcerting to see how connected things really are,” agrees George Sugihara of the Scripps Institution of Oceanography in La Jolla, California, a complex systems expert who has advised Deutsche Bank.

Yaneer Bar-Yam, head of the New England Complex Systems Institute NECSI, warns that the analysis assumes ownership equates to control, which is not always true. Most company shares are held by fund managers who may or may not control what the companies they part-own actually do. The impact of this on the systems behaviour, he says, requires more analysis.

Crucially, by identifying the architecture of global economic power, the analysis could help make it more stable. By finding the vulnerable aspects of the system, economists can suggest measures to prevent future collapses spreading through the entire economy. Glattfelder says we may need global anti-trust rules, which now exist only at national level, to limit over-connection among TNCs. Bar-Yam says the analysis suggests one possible solution: firms should be taxed for excess interconnectivity to discourage this risk.

One thing wont chime with some of the protesters claims: the super-entity is unlikely to be the intentional result of a conspiracy to rule the world. “Such structures are common in nature,” says Sugihara.

Newcomers to any network connect preferentially to highly connected members. TNCs buy shares in each other for business reasons, not for world domination. If connectedness clusters, so does wealth, says Dan Braha of NECSI: in similar models, money flows towards the most highly connected members. The Zurich study, says Sugihara, “is strong evidence that simple rules governing TNCs give rise spontaneously to highly connected groups”. Or as Braha puts it: “The Occupy Wall Street claim that 1 per cent of people have most of the wealth reflects a logical phase of the self-organising economy.

“So, the super-entity may not result from conspiracy. The real question, says the Zurich team, is whether it can exert concerted political power. Driffill feels 147 is too many to sustain collusion. Braha suspects they will compete in the market but act together on common interests. Resisting changes to the network structure may be one such common interest.” ”

 

via Revealed – the capitalist network that runs the world – physics-math – 19 October 2011 – New Scientist.

Posted October 23, 2011 by arnoneumann in Economic

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