September 27, 2013
In mid-August, Jim DeMint, the South Carolina Republican who quit the Senate in January to become president of the Heritage Foundation, the conservative Washington think tank, set off on a nine-city Defund Obamacare Town Hall Tour. DeMint, 62, is a courtly, polished Southerner who used to own a marketing business. These days he’s selling the idea that it’s not too late to kill the health-care law. In each city, hundreds and sometimes thousands of true believers crammed into hotel ballrooms to hear him explain how, with enough pressure on legislators, Congress could be persuaded to withhold funding for the law and thereby halt it before public enrollment begins on Oct. 1. “The House holds the purse strings,” DeMint told his crowds. If Republicans keep them cinched, he promised, the law would fail. ... DeMint’s idea was initially dismissed as quixotic. For one thing, the Affordable Care Act is mostly paid for by mandatory funds that can’t be blocked. For another, Democrats control the White House and Senate. Even so, the defund push has caught fire in Washington because activists have made it into a crusade.
In four quick years, the concept of the "new normal" has gone from being viewed as unlikely by most analysts and policymakers to becoming consensus. The popular application of the phrase now extends well beyond its original conceptualization that simply encompassed economic and financial prospects. It has also been used to describe medical procedures, unusual weather patterns and geopolitical shifts. It even gave rise to a television series. ... Yet all is not well for the concept of the new normal. Yes, its popularity has expanded. Yes, it has become conventional wisdom in most policy and market circles. And yes, the concept has proven consequential for evaluating the effectiveness of policies and the potency of traditional investment approaches. But there is also an important qualification: The concept itself is morphing, evolving to describe a contextual configuration that is less stable and more unpredictable. ... The purpose of this paper is to analyze what lies ahead for the new normal, and why.
It may be tempting to view recent declines in commodity prices as the end of the resource “supercycle”—the period of sharp price rises and heightened volatility since the turn of the 21st century. Yet rumors of the supercycle’s death are greatly exaggerated. Despite recent falls, commodity prices are still near their levels of early to mid-2008, just before the global financial crisis hit. (To track the movements in commodity prices over time, see the interactive, “MGI’s Commodity Price Index—an interactive tool.”) At a time when the world economy remains below full power, this phenomenon is striking, and a sign that the supercycle is alive and well. … We believe that resource markets will be shaped in coming years by a race between emerging-market demand and the resulting need to increase supply from a more challenging geology and the twin forces of supply-side innovation and resource productivity. Innovations such as the use of 3-D and 4-D seismic technologies for energy exploration can improve access to resources. Productivity gains can reduce the wastage of food and water and make buildings more energy efficient. The question is whether technology and resource productivity can improve fast enough to counter the impact of emerging-market demand and a more challenging geology. … The race is on.
1. The changing resource landscape
2. Energy: The race between technology and geology
3. Metals: The looming supply challenge
4. Agriculture: Falling yield growth hits prices
Why do things go viral, and should we care? … In an age where politicians campaign through social media and viral marketers ponder the appeal of sneezing baby pandas, memes are more important than ever—however trivial they may seem. … But trawling the Internet, I found a strange paradox: While memes were everywhere, serious meme theory was almost nowhere. Richard Dawkins, the famous evolutionary biologist who coined the word “meme” in his classic 1976 book, The Selfish Gene, seemed bent on disowning the Internet variety, calling it a “hijacking” of the original term. The peer-reviewed Journal of Memetics folded in 2005. “The term has moved away from its theoretical beginnings, and a lot of people don’t know or care about its theoretical use,” philosopher and meme theorist Daniel Dennett told me. What has happened to the idea of the meme, and what does that evolution reveal about its usefulness as a concept? … Dawkins explained, genes could not account for all of human behavior, particularly the evolution of cultures. So he identified a second replicator, a “unit of cultural transmission” that he believed was “leaping from brain to brain” through imitation. He named these units “memes,” an adaption of the Greek word mimene, “to imitate.” … Dawkins’ memes include everything from ideas, songs, and religious ideals to pottery fads. Like genes, memes mutate and evolve, competing for a limited resource—namely, our attention. Memes are, in Dawkins’ view, viruses of the mind—infectious.
- While Europe has emerged out of recession, the relative tightness of monetary policy means the eurozone is still struggling to get back to potential pre-Lehman growth rates.
- The European Central Bank should be able to maintain stability over the cyclical horizon while policymakers continue to address outstanding issues as they look to build a less vulnerable monetary union.
- We are selective in our approach to regional credit and remain neutral on the euro, balancing our cyclical outlook with longer-term secular concerns on the eurozone outlook and valuations.
Driven to despair by a plague that has laid to waste young shrimps across east Asia, Suraphol Pratuangtham, a seafood farmer in southern Thailand, suspended operations at his ponds for more than three months over the summer. … “This year is the worst for our shrimp production in the past 30 years,” laments Mr Pratuangtham, who is also president of the Thai Marine Shrimp Farmers Association and expects Thailand’s 2013 exports to halve from its peak levels. … The disease, known as early mortality syndrome (EMS), has for more than two years savaged Asia’s shrimp industry, including Thailand, Malaysia, Vietnam and China. But this year’s plunge in supplies from the region, which accounts for 80 per cent of global production, is the worst yet and led to a sharp rise in global shrimp prices to a 12-year high. … Shrimp is the most traded fish in the international market ahead of salmon and tuna
It’s difficult to understand the way the Classic Roll supercharges multiple senses at once—unless you have eaten one. The plastic knife cuts through an outside that’s mildly crusty before giving way to a softer middle. Frosting melts into the ridges of the bun, which sits in a brown puddle of excess. Take a bite and the buttery flavor bathes the edges of the tongue as the gritty sweetness of sugar and cinnamon washes over the tip. The texture is lighter than expected. The sensation of pure sugar can be overwhelming. It coats the mouth and clogs the back of the throat. Halfway through the roll, the body cries out for water or, even better, Diet Coke, which has a way of cutting through the varnish laid by the fats and sugars. Deep inside the roll, the bun’s core is hot and yet just barely cooked. Once gone, the bottom of the clamshell box is left smeared like a crime scene with a mash of syrup and cream cheese. Each one is 3 inches high and 4 inches in diameter and costs $3.69. ... The company is not run by Satan. It’s run by Kat Cole, 35, whose last job was at Hooters.
It sounds like a doomsday scenario drawn up by strategists at the height of the Cold War. … Chinese armies move south into the Korean peninsula and collide with American and South Korean forces moving north. The resulting clashes spark war between nuclear-armed superpowers. … A new report says such a confrontation is still a real danger in the event of a sudden collapse of the North Korean regime. … The report produced by the US research institute, the Rand Corporation, says that North Korea is a failing state that could fall apart at any moment. … It says agreement is urgently needed between Washington and Beijing on contingency plans - including setting up a temporary line of division inside North Korea to keep their armies apart. … Analysts have been predicting the imminent collapse of North Korea for the last two decades.
“Why, when I want to turn on my software and computer, do I need to have three fingers: control, alt, delete?” Rubenstein asked the living tech legend. “Whose idea was that?” The crowd laughed as Gates shifted his weight and scratched his ear sheepishly. His response began with some hemming and hawing, but he eventually wound his way to a straight answer
I’d heard about a celebrity inmate on temporary time-out from addiction treatment making his way around the rotisserie. His name, I admit, meant nothing to me. I’m an import from England; we don’t swaddle ourselves in body armor prior to playing a game. American football, to me, is overly refereed rugby for the squeamish. Even real football, what you Colonials insist on calling soccer, means little to me any longer. I’ve grown too old and brittle for hooliganism, so there hardly seems any point. I am simply not a sports fan. ... This was to serve me well with Leaf. After a couple of days he crawled out of both his doldrums and his tiny, one-size-doesn’t-fit-all bed at about the same time. We began some stimulating conversations, on any topic other than football.
One of the most iconic careers in major league history is ending: Mariano Rivera, two months from turning 44, 23 years removed from his start in professional baseball, will throw his last pitch. Goodbye to the alltime leader in regular-season and postseason saves. Goodbye to his cut fastball, which belongs with Carl Hubbell's screwball, Sandy Koufax's curveball and Nolan Ryan's fastball on the Mount Rushmore of greatest pitches. And goodbye to that trim, tailored figure who could work the noisiest room the way Astaire or Sinatra could, with a preternatural, unhurried cool and a lightness of being that made the difficult look easy. Only the tuxedo was missing. ... The son of a Panamanian fisherman became baseball royalty, though it was a hegemony hard-earned, not given. Rivera signed with the Yankees in 1990 at age 20 for just $3,000 and promptly made the first airplane trip of his life to report to spring training in Tampa. He injured his elbow in '92 and had ligament-repair surgery. He was left unprotected by the Yankees in the expansion draft later that year but went unclaimed by the Rockies and the Marlins, nearly was traded to the Tigers in '95 for lefthander David Wells and in '96 to the Mariners for shortstop Felix Fermin, and washed out as a major league starting pitcher with a 5.94 ERA in 10 chances in '95. Only then and in the bullpen, especially in October, did Rivera make his indelible mark. ... The end to his career, however, is hardly the end of his imprint. Rivera's personage is so humble, godly even, that his legacy will go on. Few players in any sport have retired with more reverence from his peers. "Probably not since Koufax have we seen anyone leave the game with so much respect," says Joe Torre, Rivera's manager with the Yankees for four of his five World Series championships. ... Like Koufax, Rivera has become an enduring ideal, a template of what it means to be a pitcher, a teammate and a friend. But the oral history of Rivera has only begun. This is the story so far, from some of the lives he has touched.
The West thought it was winning the battle against jihadist terrorism. It should think again … It all looked different two years ago. Even before the killing of Osama bin Laden in 2011, al-Qaeda’s central leadership, holed up near the Afghan border in Pakistan’s North Waziristan, was on the ropes, hollowed out by drone attacks and able to communicate with the rest of the network only with difficulty and at great risk. Al-Qaeda in the Arabian Peninsula (AQAP), its most capable franchise as far as mounting attacks on the West is concerned, was being hit hard by drone strikes and harried by Yemeni troops. The Shabab was under similar pressure in Somalia, as Western-backed African Union forces chased them out of the main cities. Above all, the Arab spring had derailed al-Qaeda’s central claim that corrupt regimes supported by the West could be overthrown only through violence. ... All those gains are now in question. The Shabab is recruiting more foreign fighters than ever (some of whom appear to have been involved in the attack on the Westgate). AQAP was responsible for the panic that led to the closure of 19 American embassies across the region and a global travel alert in early August. Meanwhile al-Qaeda’s core, anticipating the withdrawal of Western troops from Afghanistan after 2014, is already moving back into the country’s wild east. ... Above all, the poisoning of the Arab spring has given al-Qaeda and its allies an unprecedented opening.
A stagnant economy, a bloated state and mass protests mean Dilma Rousseff must change course … FOUR years ago this newspaper put on its cover a picture of the statue of Christ the Redeemer ascending like a rocket from Rio de Janeiro’s Corcovado mountain, under the rubric “Brazil takes off”. The economy, having stabilised under Fernando Henrique Cardoso in the mid-1990s, accelerated under Luiz Inácio Lula da Silva in the early 2000s. It barely stumbled after the Lehman collapse in 2008 and in 2010 grew by 7.5%, its strongest performance in a quarter-century. To add to the magic, Brazil was awarded both next year’s football World Cup and the summer 2016 Olympics. On the strength of all that, Lula persuaded voters in the same year to choose as president his technocratic protégée, Dilma Rousseff. ... Since then the country has come back down to earth with a bump.
Activities out in the sticks may add more to GDP than was thought … India’s villages and towns, far from the gaze of foreigners and the urban elite, have been on a tear. Over the past decade new roads have been built. Almost everybody these days has a mobile phone. Electricity has become more common, as have computerised land records. Fewer people have to spend time collecting firewood, using bottled gas instead. New houses built with walls and floors of brick or cement are more durable than wooden huts, and need less maintenance. … It means people can turn their energy to starting businesses and escaping subsistence farming. Poultry production is booming, as it has become easier to get chickens to market. Villagers eat more processed food—India’s artery-clogging pudding, gulab jamun, now comes in packets, made in small factories in nearby towns. Better communications are vital. … A bigger economy is good news, but it raises two questions. First, can the informal economy be insulated from the problems affecting the rest of India? … The second question is how swiftly India can bring its black economy into the daylight.
Many Americans grumble about the wealth of their politicians, but they are paupers compared with their Chinese counterparts. The 50 richest members of America's Congress are worth $1.6 billion in all. In China, the wealthiest 50 delegates to the National People's Congress, the rubber-stamp parliament, control $94.7 billion. Darrell Issa, a Republican from California, is the richest man in Congress, with $355m. China's richest delegate is Zong Qinghou, boss of Hangzhou Wahaha Group, a drinks-maker, whose wealth is almost $19 billion (including assets distributed to family).
Rising disability claims may explain America’s shrinking labour force … IN THE early 1980s the distressing persistence of high unemployment in Europe was labelled “Eurosclerosis”. Some now wonder whether “Amerisclerosis” is the right word to describe America’s labour market. It is true that unemployment has slowly dropped from a peak of 10% in late 2009, to 7.3% at present. But this decline overstates the health of the jobs market. … The labour-force participation rate, the share of the working-age population either working or looking for work, has plunged from 66% in 2007 to 63.2% in August, a 35-year low. If those people who have simply dropped out of the labour force were classified as unemployed, the headline jobless rate would be much higher.
Is the new central-bank governor’s optimism warranted? … WHEN Mark Carney was governor of the Bank of Canada he made a habit of warning his compatriots that a day of reckoning was coming if they did not stop piling up debt. The central bank would not keep interest rates low forever. Eventually the overnight rate would rise from 1%, where it has been since 2010, putting pressure on indebted Canadians. ... Mr Carney is now grappling with Britain’s overleveraged consumers. His successor at the Bank of Canada, Stephen Poloz, has been delivering a cheerier message since he took over in June, even though household debt and house prices are at record levels (see chart). He has expressed confidence that Canadian consumers are doing the arithmetic in order to manage their debts, and looks forward to the day when exports and investment drive economic growth. Has the situation changed, or just the man?
Hard-up countries flog passports … IN TIMES of austerity, travel documents come cheap. Portugal is the latest of several European countries to start selling visas to foreign investors; others are slashing their prices. These schemes grant the right to live and travel within the European Union. A passport often follows a few years later.
America’s dominance of the global helium market is ending … NOT every commodity contributes both to the gaiety of existence and life-saving technology. Helium does not just fill balloons and render voices squeaky. In gaseous form the inert, lighter-than-air gas is used in a range of applications from welding and fibre-optic technology to deep-sea diving. Super-cold liquid helium is essential to making and running the superconducting magnets for MRI scanners and to manufacturing electronic devices from TVs to phones. The world stands on the edge of a “helium cliff” precisely because the gas has always proved so useful. ... Unless American politicians can come to an agreement by October 7th, supplies could face a sudden and dramatic shortfall. A third of the world’s helium comes from an underground reservoir in Texas built up under government auspices and run by the Bureau of Land Management. Such was the supposed strategic value of helium, a by-product of natural gas, that a reserve was created in 1925 to supply the gas to inflate airships. So jealously did America guard its helium that other countries had to fill dirigibles with flammable hydrogen—the Hindenburg was one of dozens that went up in flames as a result.
A flawed system for judging research is leading to academic fraud … As China tries to take its seat at the top table of global academia, the criminal underworld has seized on a feature in its research system: the fact that research grants and promotions are awarded on the basis of the number of articles published, not on the quality of the original research. This has fostered an industry of plagiarism, invented research and fake journals that Wuhan University estimated in 2009 was worth $150m, a fivefold increase on just two years earlier. … Chinese scientists are still rewarded for doing good research, and the number of high-quality researchers is increasing. Scientists all round the world also commit fraud. But the Chinese evaluation system is particularly susceptible to it.