Category Archives: Global Economics

The Biggest Losers in Trump’s Potential Trade War

My Comments: It’s been hard to tell if the mistakes coming out of the White House are simply the result of the learning curve necessary to be competent or whether it’s the result of overt incompetence. But I do think it’s increasingly clear that Donald Trump is in over his head.

The person most likely in charge now is Steve Bannon, who reminds me of a James Bond villain, trying to take over the world. Nothing coming out of the White House, despite the rhetoric that it will all clear up soon, suggests it’s in our best interest as citizens. I don’t see him as an evil person, but his motivation is to ultimately do what is in Steve Bannon’s best interest, and we’ve given him the keys to the kingdom. There’s very little we can do about it. Yet. This writer is too wishy washy; we will all lose if we concede the economic high ground.

Ronald Brownstein Jan 30, 2017

If Donald Trump’s aggressive moves on the international economy spark a trade war, the American communities that will lose the most in absolute terms are the giant metropolitan areas, largely along the two coasts, that are most deeply integrated into global markets.

But in proportional terms, the biggest losers from a trade war would be small and midsized cities, almost entirely in interior states, that are heavily dependent on exports of manufacturing goods or energy products.

That distinction between the communities with the greatest absolute and proportional stake in access to global markets emerges from an important analysis of exports’ role in local economies that was released Monday by the Metropolitan Policy Program at the Brookings Institution.

That contrast frames the political risk of Trump’s flurry of moves to raise barriers against imports and withdraw from U.S.-led efforts to open markets around the world—for instance, abandoning the Trans-Pacific Partnership agreement across Asia and demanding a renegotiation of the North American Free Trade Agreement with Mexico and Canada.

If Trump’s moves ultimately reduce trade flows and squeeze exports, the biggest U.S. losers will include not only big metropolitan areas that almost entirely supported Hillary Clinton in November, but also the smaller places that provided the core of Trump’s support. “You have to tell both parts of that story to get the full local picture,” said Joseph Parilla, a Metropolitan Policy Program fellow who specializes in local economies, particularly their connection to the global market.

In the new analysis, Parilla and Mark Muro, the Metropolitan Policy Program’s director of policy, produced data on trade flows at the county and metropolitan-area level that quantify this split-level picture.

On the one hand, they found that although Trump won about five-sixths of all U.S. counties, the counties that supported Clinton accounted for 58 percent of all American exports in 2015. The counties that backed Trump only generated 42 percent of all American exports. That’s in line with earlier Brookings calculations that Clinton’s counties accounted for about two-thirds of the nation’s total economic output.

The overall export imbalance reflects Clinton’s dominance in the metropolitan areas that are most firmly integrated into global markets. In 2015, Brookings calculated, 15 U.S. metropolitan areas each generated at least $25 billion in exports. That list is topped by New York ($132 billion), Los Angeles ($98 billion), Houston ($80 billion), Chicago ($63 billion), Dallas ($59 billion), and Seattle ($51 billion). And it extends through Boston and San Francisco (about $41 billion each); Detroit ($38 billion); Philadelphia and Miami (about $31 billion each); Washington, D.C., San Jose, and Atlanta (about $27 billion each); and Portland ($25 billion).

These are all places that have accelerated their growth by steering into the jet stream of the global economy. “The big cities, one of the reasons they are so big is that they have figured out how to provide products and services that have a lot of global demand, and they have been able to build a lot of wealth because they are doing things that very few other places in the world can do,” Parilla said. “New York in finance and L.A. in media, and Houston in energy and Seattle in aerospace and tech, and San Jose in a range of technology and advanced-manufacturing sectors—these are absolutely global hubs for these advanced, traded industries. And a lot of the country’s wealth is invariably [generated] in those places.”

They are also almost all places where Clinton trounced Trump last fall. Overall, Clinton won 88 of the nation’s 100 largest counties, even slightly more than Obama did in 2012. In that way, a Trump turn toward protectionism would represent another offensive against the interests of major metros that overwhelmingly rejected him—a pattern evident in his attacks on so-called sanctuary cities, his drive to repeal the Affordable Care Act, and his demand for an investigation of voter fraud focused on urban areas.

But as Muro and Parilla show, the trade picture is more complex. Although the big metropolitan areas generate the most exports, selling to the world is often proportionally more important to smaller places. In fact, the Brookings analysis found that while the Clinton counties accounted for most of the nation’s absolute export volume, exports accounted for a larger share of the total economic output of counties that Trump won (13 percent) than of those that Clinton carried (10 percent).

The metropolitan areas where exports account for the largest total share of local economic output are smaller and midsized communities that are almost all hubs for either manufacturing or energy production. These places read like a recap of Trump’s campaign-travel itinerary: Columbus, Elkhart, Kokomo, and Lafayette in Indiana; Racine, Fond du Lac, and Sheboygan in Wisconsin; Lake Charles and Baton Rouge in Louisiana; Waterloo, Iowa; Hickory and Rocky Mount in North Carolina,; and Midland and Battle Creek in Michigan. The list of metropolitan areas where exports provide the greatest share of total gross domestic product doesn’t reach a big city until Seattle—which ranks about 40th.

For the big, mostly blue-leaning metropolitan areas, a turn toward protectionism is a relatively unambiguous threat. “This is pretty clearly negative for those places,” Parilla said. Not only do they depend on selling to global markets, but they also “benefit from the fact that people from all over the world come to these places because they see these locations as the best destination to advance their economic prospect.“ Protectionist trade policies, reinforced by immigration limits, could stanch those flows.

For smaller communities at the foundation of the Trump coalition, the ledger is more complex. Many of those smaller places, Parilla notes, would initially welcome a more protectionist trade policy, on the belief that it will force manufacturers now relocating or building new facilities abroad to reinvest in the United States. The downside for them is less visible, but potentially more consequential: the cost to their local economies if retaliation from other nations, or simply a diminished effort to open other markets, leads to fewer sales from American firms to the world.

“When you start to [assess] what the motivation is … [for] the new administration, they were brought in to respond to a lot of these smaller communities,” Parilla said. “And [a protectionist approach] is just really dangerous [for them] because of how export-intensive some of them are. The bet, obviously, on their part is [that] it is going to be beneficial—that more production is going to concentrate in these places as a result of us closing ourselves off. But that takes a zero-sum view of trade. And if you play that out and you suggest there is going to be retaliatory measures—and overall global trade becomes less and less an important part of what drives our economy—then the most export-intensive places stand to see some changes in their economy.”

For example, a protectionist approach might save jobs at one factory, but those policies could eventually mean another employer down the road doesn’t hire new workers, or lays off existing ones, because their export markets contract.

Parilla acknowledges that it’s difficult for local officials to keep that broader perspective in mind when trade’s losers are so much more visible than its beneficiaries. But the Brookings data showing the heavy reliance on trade in the smaller cities, he said, make clear that “what might incentivize production for one industry … might be limiting opportunities for another.” And that’s why a protectionist lurch that seemingly favors Trump’s small-town bastions over the Democratic-leaning major metropolitan areas might ultimately hurt both types of communities.

America’s Rise of Nationalism Has It Barreling Towards a Crisis

flag USMy Comments: The past 70 years have seen a remarkable transformation from what was essentially a sophisticated tribal approach to security for a given group of people, to one that begins to recognize we are one planet and all of us, to some degree, are intricately connected as we attempt to survive and thrive as a species.

While 70 years seems a lifetime to most of us, we can agree it’s a small fraction of time since humans first walked on this same planet. This recent transformation has moved in fits and starts, depending on where you live and the resources you have and use to define your success.

There is a reset happening which in the larger scheme of things is a good thing. It will either confirm that we’ve made some bad choices and/or it will create a road map for society to move forward. Either way, it was bound to happen. These comments by George Friedman and Allison Federika align closely with my values and wishes for the world that my children and grandchildren will inherit. It remains to be seen if what is happening will be in their best interest.

George Friedman and Allison Fedirka, Mauldin Economics / Jan. 18, 2017

This year, the United States will be the main geopolitical power. And President Donald Trump will run it. This will be the first big shift to nationalism in US politics.

This rise in nationalism is global. Its rise stems from the rejection of the internationalist model. This has ruled international relations since the end of World War II.

The US does not answer to any regional blocs or international powers. And yet, the US will still see a strong rise in nationalism.

Trump’s election portends an economic crisis

Since its founding, the US has met a crisis every 50 years. The most recent was the election of Reagan in 1980.

About ten years before a crisis, new socio-economic problems emerge. Trump’s election does not mean a crisis. But it does foresee the arrival of one in the 2020s.

The main inside economic problem for the US today is less middle-class buying power. A worker in the lower-middle class earns about $2,000 a month after taxes and has employer-provided health care. That person would not be able to afford more than rent for an apartment.

Economic chaos has political effects

One group badly hit by less buying power is the white working class. It can be thought that these pains would affect their voting. Trump knew this demographic. He used it as his base to win.

The rise of US nationalism shows that lengthy economic chaos must have political effects. They play out where domestic socio-economic crisis meets global economic slowing.

The 2008 financial crisis shook core ideas that upheld the benefits of free trade. The crisis’s other two big effects were economic slowing in industrial countries and more unrest in export-dependent countries.

This has been an issue since the founding of the nation

Free trade now must prove its worth. Protectionism—economic nationalism—has gained speed.

The balance of free trade and protectionism has been a major political issue in the US since the country’s founding. The US economy is mostly safe from a decline in exports, which make up 12.6% of GDP. But the crisis made space for a rethink of trade deals.

These trade talks tied to the US are over less buying power and standards of living.

US internal stresses will determine foreign policy

The debate about economic survival bleeds into big questions. These are immigration policy, military commitments, trade deal terms, and foreign aid—among others.

Today, nationalism looks better. For those who lost after the 2008 crisis, internationalism has not solved the world’s political, security, and economic crises. It’s also seen as the cause of those problems.

In the US—and at a global level—nationalism may not win. But this needs internationalism to present itself in a way that seems like a real option.

Except in war, foreign policy shifts do not happen quickly in the US. The US is under internal stresses that will be seen in its foreign policy.

The 16 countries with the world’s best healthcare systems

Cost-of-careMy Comments: With all the crap going on in Washington about repealing the ACA, it might be helpful to know (or maybe not) where we stand on the global stage when it comes to health care. A London based think tank created a Global Prosperity Index, and among their results is a ranking on health care. Below are the first 16 out of 150 countries on the relevant scale, counting down from Canada as #16.

On the aggregate index, the US ranks #17, but on the healthcare index, we rank #32. For those of you who want to make America great again, you need to look way beyond the politics of this. Unless you simply want to die early and in pain.

The guiding metric is the relative cost of care, and medical outcomes. For a country that prides itself on being a world leader, health care outcomes per dollar spent in this country, is pathetic.

Will Martin / January 13, 2017

The Legatum Institute, a London-based research institute released its 10th annual global Prosperity Index in November, a huge survey that ranks the most prosperous countries in the world.

The organization compares 104 variables to come up with its list, splitting those variables into nine subindexes. One of the big components of the ranking is how healthy a country’s people are.

Health is measured by three key components by the Legatum Institute: a country’s basic mental and physical health, health infrastructure, and the availability of preventative care.

Perhaps unsurprisingly, the countries that have the best scores in the Prosperity Index, and therefore rank as the world’s healthiest, are generally big, developed economies with large amounts of resources.

Britain — whose NHS pioneered free at the point of use healthcare globally — misses out on this list, finishing 20th in the Legatum Institute’s health sub-index.

Take a look at the top 16 countries below:
16. Canada — Canada’s 1984 Health Act entrenches in law the country’s system of free at the point of access healthcare, known as Medicare. Canada’s system is not perfect however, and in recent years the number of Canadians going south for private care in the USA has grown.
15. Qatar — The best standards of health in the Middle East can be found in the wealthy nation of Qatar. The nation has recently taken steps to implement a universal healthcare system across the entire country.
14. France — Famed for the quality of its health services, it is not surprising to see France close to the top of the pile. The country’s average life expectancy is 82.
13. Norway — Norway, along with its Scandinavian counterparts, often comes close to global quality of life rankings, and one reason is the health of its citizens. The country’s healthcare system is free for children under 16, but adults must pay for services. The country spends more per person on healthcare than any other country on earth.
12. New Zealand — New Zealand is one of the most active countries in the world, with the nation punching well above its weight in international sporting competitions. It has an average life expectancy of 81.6 years.
11. Belgium — With an average age of 81.1, Belgium’s life expectancy is just outside the world’s top 20. The country has universal healthcare, but also requires mandatory health insurance for all citizens.
10. Germany — Despite a love of beer and sausages, Germans are some of the world’s healthiest people. The country’s average life expectancy is 81.
9. Israel — Israel is the highest ranked of any Middle Eastern state on the Legatum Institute’s health sub-index, and the country has the 8th highest life expectancy on the planet, 82.5 years.
8. Australia — With great weather and low pollution, it is not surprising that Australia is ranked as the healthiest nation in the southern hemisphere. Its average life expectancy is 82.8, the 4th highest in the world.
7. Hong Kong — The tiny city-state of Hong Kong has 11 private and 42 public hospitals to serve its population of just over 7.2 million people. In 2012, women in Hong Kong had the longest average life expectancy of any demographic on earth.
6. Sweden — As with most quality of life and health rankings, northern European countries like Sweden score highly. Swedish men have the 4th highest life expectancy of any nation, living to an average of 80.7 years.
5. Netherlands — In 2015 the Netherlands gained the number one spot at the top of the annual Euro health consumer index, which compares healthcare systems in Europe, scoring 916 of a maximum 1,000 points
4. Japan — The country’s life expectancy — 83.7 — is the highest on the planet. That has caused demographic issues in the country, with its population aging rapidly.
3. Switzerland — Rich, beautiful, and incredibly healthy. Switzerland has pretty much all anyone could want from a country. Its healthcare service is universal and is based upon the mandatory holding of health insurance by all citizens.
2. Singapore — Another small city-state to make the top of the Prosperity Index’s health sub-index. Singapore’s 5.6 million citizens have an average life expectancy of 83.1 years old.
1. Luxembourg — Nestled between Belgium, France, and Germany, the wealthy nation of Luxembourg tops the Legatum Institute’s health sub-index. The country’s average life expectancy is 82.

The Risks That Threaten Global Growth

changeaheadroadsignMy Comments: Readers of this blog will recall my observations about risk in general and in particular, those that will influence our economic well being in years to come.

With the new administration seemingly in favor of conflicts over trade between nations, and of retreating from the forces that have fostered global economic growth for the past 7 decades, these comments by Martin Wolff seem prescient.

Just as I tend to agree with Trump’s call to ‘drain the swamp’, or in my words, re-assess the assumptions on all levels that led us to where we are now, there are major forces at work over which we have virtually no control that demand a reassessment of economic assumptions. The next few decades are going to be tough for a lot of us.

by Martin Wolff, January 3, 2017

What is going to happen to the world economy this year? Much the most plausible answer is that it is going to grow. As I argued in a column published at this time last year, the most astonishing fact about the world economy is that it has grown in every year since the early 1950s. In 2017 it is virtually certain to grow again, possibly faster than in 2016, as Gavyn Davies has argued persuasively. So what might go wrong?

The presumption of economic growth is arguably the most important feature of the modern world. But consistent growth is a relatively recent phenomenon. Global output shrank in a fifth of all years between 1900 and 1947. One of the policy achievements since the second world war has been to make growth more stable.

This is partly because the world has avoided blunders on the scale of the two world wars and the Great Depression. It is also, as the American economist Hyman Minsky argued, because of active management of the monetary system, greater willingness to run fiscal deficits during recessions and the increased size of government spending relative to economic output.

Behind the tendency towards economic growth lie two powerful forces: innovation at the frontier of the world economy, particularly in the US, and catch-up by laggard economies. The two are linked: the more the frontier economies innovate, the greater the room for catch-up. Take the most potent example of the past 40 years, China. On the (possibly exaggerated) official numbers, gross domestic product per head rose 23-fold between 1978 and 2015. Yet so poor had China been at the beginning of this colossal expansion that its average GDP per head was only a quarter of US levels in 2015. Indeed, it was only half that of Portugal. Catch-up growth remains possible for China. India has still greater room: its GDP per head was about a 10th of US levels in 2015.

The overwhelming probability is that the world economy will grow. Moreover, it is highly likely that it will grow by more than 3 per cent (measured at purchasing power parity). It has grown by less than that very rarely since the early 1950s. Indeed, it has grown by less than 2 per cent in only four years since then — 1975, 1981, 1982 and 2009. The first three were the result of oil price shocks, triggered by wars in the Middle East, and Federal Reserve disinflation. The last was the Great Recession after 2008’s financial crisis.

This is also consistent with the pattern since 1900. Three sorts of shocks seem to destabilise the world economy: significant wars; inflation shocks; and financial crises. When asking what might create large downside risks for global economic growth, one has to assess tail risks of this nature. Many fall into the category of known unknowns.

For some years, analysts have convinced themselves that quantitative easing is sure to end up in hyperinflation. They are wrong. But a huge fiscal boost in the US, combined with pressure on the Fed not to tighten monetary policy, might generate inflation in the medium term and a disinflationary shock later still. But such a result of Trumponomics will not occur in 2017.

If we consider the possibility of globally significant financial crises, two possibilities stand out: the break-up of the eurozone and a crisis in China. Neither is inconceivable. Yet neither seems likely. The will to sustain the eurozone remains substantial. The Chinese government possesses the levers it needs to prevent a true financial meltdown. The risks in the eurozone and China are unquestionably real, but also small.

A third set of risks is geopolitical. Last year I referred to the possibility of Brexit and “election of a bellicose ignoramus” to the US presidency. Both have come to pass. The implications of the latter remain unknown. It is all too easy to list further geopolitical risks: severe political stresses on the EU, perhaps including the election of Marine Le Pen to the French presidency and renewed inflows of refugees; Russian president Vladimir Putin’s revanchism; the coming friction between Mr Trump’s aggrieved US and Xi Jinping’s ascendant China; friction between Iran and Saudi Arabia; possible overthrow of the Saudi royal family; and the threat of jihadi warfare. Not to be forgotten is the risk of nuclear war: just look at North Korea’s sabre-rattling, the unresolved conflict between India and Pakistan and threats by Mr Putin.

In 2016, political risk did not have much effect on economic outcomes. This year, political actions might do so. An obvious danger is a trade war between the US and China, though the short-term economic effects may be smaller than many might suppose: the risk is longer term, instead. The implications of the fact that the most powerful political figure in the world will have little interest in whether what he says is true are unknowable. All we do know is that we will all be living dangerously.

An important longer-run possibility is that the underlying economic engine is running out of steam. Catch-up still has great potential. But economic dynamism has declined in the core. One indicator is falling productivity growth. Another is ultra-low real interest rates. Mr Trump promises a resurgence of US trend growth. This is unlikely, particularly if he follows a protectionist course. Nevertheless, the concern should be less over what happens this year and more over whether the advance of the frontier of innovation has durably slowed, as Robert Gordon argues.

A good guess then is that the world economy will grow at between 3 and 4 per cent this year (at PPP). It is an even better guess that emerging economies, led yet again by Asia, will continue to grow faster than the advanced economies. There are substantial tail risks to such outcomes. There is also a good chance that the rate of innovation in the most advanced economies has slowed durably. Happy New Year.

Welcome to the Exponential Age

18 years ago, the Eastman Kodak company sold 85% of all photo paper on the planet and employed 86,200 people, 46,300 of them in the US. By 2015, they employed 6,500 people and surrendered what was left of the photo paper business so they could emerge from bankruptcy.

You may recall digital cameras were invented in 1975 and the first images had only 10,000 pixels. But with Moore’s law and as with most exponential technologies, it was only a disappointment for a short time. It soon became far superior and today it’s the dominant technology when it comes to recording images.

A similar transition will now happen with Artificial Intelligence, health, autonomous and electric cars, education, 3D printing, agriculture and jobs. Welcome to the 4th Industrial Revolution. Welcome to the Exponential Age.

Over the next 10 – 20 years, what happened to Kodak will happen in a lot of industries and most people won’t see it coming. Did you think in 1998 that by 2002 you would never use film again to take pictures?

Software will disrupt most traditional industries in the next 5-10 years.

Uber is just a software tool, they don’t own any cars, and are now the biggest taxi company in the world.

Airbnb is now the biggest hotel company in the world, although they don’t own any properties.

Artificial Intelligence. Computers become exponentially better in understanding the world. This year, a computer beat the best Go player in the world, 10 years earlier than expected.

In the US, young lawyers already don’t get jobs. Because of IBM Watson, you can get legal advice (so far for more or less basic stuff) within seconds, with 90% accuracy compared with 70% accuracy when done by humans.

So if you study law, stop immediately. There will be 90% fewer lawyers in the future, only specialists will remain.

Watson already helps nurses diagnose cancer 4 times more accurately than human nurses. Facebook now pattern recognition software that can recognize faces better than humans. In 2030, computers will become more intelligent than humans.

Autonomous cars: In 2017 the first self driving cars will appear for the public. Around 2020, the complete industry will start to be disrupted. You don’t want to own a car anymore. You will call a car with your phone, it will show up at your location and drive you to your destination. You will not need to park it, you only pay for the driven distance and can be productive while driving. Our grandchildren will never get a driver’s licence and will never own a car.

It wiIl change the city landscape, because we will need 90-95% fewer cars for that. We can transform former parking spaces into parks. 1.2 million people die each year in car accidents worldwide. We now have one accident every 60,000 mi (100,000 km), with autonomous driving that will drop to one accident in 6 million mi (10 million km). That’s a million fewer car accident deaths each year.

Most car companies will probably become bankrupt. Traditional car companies will try the evolutionary approach and just build a better car, while tech companies (Tesla, Apple, Google) will do the revolutionary approach and build a computer on wheels.

Many engineers from Volkswagen and Audi are completely terrified of Tesla.

Insurance companies will have massive trouble because without accidents, the insurance will become 100x cheaper. Their car insurance business model will disappear.

Real estate will change. Because if you can work while you commute, people will move further away to live in a more beautiful neighborhood.

Electric cars will become mainstream about 2020. Cities will be less noisy because all new cars will run on electricity. Electricity will become incredibly cheap and clean: Solar production has been on an exponential curve for 30 years, but you can now see the burgeoning impact.

Last year, more solar energy was installed worldwide than fossil. Energy companies are desperately trying to limit access to the grid to prevent competition from home solar installations, but that can’t last. Technology will take care of that strategy.

With cheap electricity comes cheap and abundant water. Desalination of salt water now only needs 2kwh per cubic meter (@ 0.25 cents). We don’t have scarce water in most places, we only have scarce drinking water. Imagine what will be possible if anyone can have as much clean water as he wants, for nearly no cost.
Health: The Tricorder X price will be announced this year. There are companies who will build a medical device (called the “Tricorder” from Star Trek) that works with your phone, which takes your retina scan, your blood sample and you breathe into it.

It then analyzes 54 biomarkers that will identify nearly any disease. It will be cheap, so in a few years everyone on this planet will have access to world class medical analysis, nearly for free. Goodbye, medical establishment.

3D printing: The price of the cheapest 3D printer came down from $18,000 to $400 within 10 years. In the same time, it became 100 times faster. All major shoe companies have already started 3D printing shoes.

Some spare airplane parts are already 3D printed in remote airports. The space station now has a printer that eliminates the need for the large amount of spare parts they used to have in the past. At the end of this year, new smart phones will have 3D scanning

possibilities. You can then 3D scan your feet and print your perfect shoe at home.

In China, they already 3D printed and built a complete 6-storey office building. By 2027, 10% of everything that’s being produced will be 3D printed.
Business opportunities: If you think of a niche you want to go into, ask yourself, “in the future, do you think we will have that?” and if the answer is yes, how can you make that happen sooner?

If it doesn’t work with your phone, forget the idea. And any idea designed for success in the 20th century is doomed to failure in the 21st century.
Work: 70-80% of jobs will disappear in the next 20 years. There will be a lot of new jobs, but it is not clear if there will be enough new jobs in such a small time.

Agriculture: There will be a $100 agricultural robot in the future. Farmers in 3rd world countries can then become managers of their field instead of working all day on their fields.

Aeroponics will need much less water. The first Petri dish produced veal, is now available and will be cheaper than cow produced veal in 2018. Right now, 30% of all agricultural surface is used for cows. Imagine if we don’t need that space anymore. There are several

startups who will bring insect protein to the market shortly. It contains more protein than meat. It will be labeled as “alternative protein source” (because most people still reject the idea of eating insects).

There is an app called “moodies” which can already tell in which mood you’re in. By 2020 there will be apps that can tell by your facial expressions, if you are lying. Imagine a political debate where it’s being displayed when they’re telling the truth and when they’ re not.
Bitcoin may even become the default reserve currency. Of the world.

Longevity: Right now, the average life span increases by 3 months per year. Four years ago, the life span was 79 years, now it’s 80 years. The increase itself is increasing and by 2036, there will be more that one year increase per year. So we all might live for a long, long time, probably way more than 100.

Education: The cheapest smart phones are already at $10 in Africa and Asia. By 2020, 70% of all humans will own a smart phone. That means everyone has the same access to world class education.

Every child can use the Khan Academy for everything a child learns at school in First World countries. The software is already released in Indonesia and will soon be available in Arabic, Swahili and Chinese. The potential is staggering. They will give the English app away for free, so that children in Africa can become fluent in English within half a year.

For the record, Khan Academy is a non-profit educational organization created in 2006 by educator Salman Khan with a goal of creating an accessible place for people to be educated. The organization produces short lectures in the form of YouTube videos.

Please note: The title I gave this post, the reference to explain the Kahn Academy, and considerable additional editing, is my product. The idea itself arrived on my computer several days ago from an unknown source. I was intrigued by the idea, frustrated by not knowing the original source, but decided to check some of the claims and found several factual mistakes. I didn’t want to promote errors so began an editing process before sharing it. The Kodak numbers were clearly wrong so I corrected those and expanded on what happened to Kodak. A significant number of other edits were necessary, some just syntax or grammer and context. The image that accompanies the article was my contribution. My guess is that about 30% of this is mine, and 70% from someone/somewhere else. My apologies for not making this attribution comment before sending it out as a blog post. I was called on this by Dale Smith, for whom I thank for catching what was not an effort to mislead, but a rush to get something done between phone calls.

The World Is Getting Better and Nobody Knows It

CharityMy Comments: For me, the glass is always half full. I try to live today and worry only about the future. I am easily ticked off by those who try to live in the past, or try to re-litigate the arguments of history. It’s a waste of time in a world, that for me, is getting shorter. You can argue that I see the world through rose colored glasses, and maybe I do, but I am who I am and will probably remain so.

Johan Norberg | Friday, October 14, 2016 |

A couple of years ago, I commissioned a study in which 1,000 Swedes were asked eight questions about global development. On average, every age group and every income group was wrong on all eight questions – because they all thought the world was in bad shape and getting worse. Large majorities, for example, thought that hunger and extreme poverty have been increasing, when they have in fact been reduced faster than at any other point in world history. And those who had been through higher education actually had less knowledge than the rest.

It’s not just Sweden. In Britain, only 10 per cent of people thought that world poverty had decreased in the past 30 years. More than half thought it had increased. In the United States, only 5 per cent answered (correctly) that world poverty had been almost halved in the last 20 years: 66 per cent thought it had almost doubled.

Bad News and the Media

Why do we make these false assumptions? Many of them are formed by the media, which reinforces a particular way of looking at the world – a tendency to focus on the dramatic and surprising, which is almost always bad news, like war, murder and natural disasters.

A study from Baltimore, where crime has been falling rapidly, showed that 73 per cent of those who watched the news every day were careful not to stay out too late in the city, compared to 54 per cent of those who watched it no more than twice a week. Almost everybody thought that crime was prevalent – but they all thought it occurred somewhere other than where they lived. The environment they had first-hand knowledge of felt safe, but the places they heard about on the news seemed very risky.

Many journalists and editors acknowledge this tendency. The American public radio journalist Eric Weiner says: “The truth is that unhappy people, living in profoundly unhappy places, make for good stories.” When the Swedish TV journalist Freddie Ekman was asked about the biggest news stories during his half a century in the trade, he responded by listing the murder of Prime Minister Olof Palme in 1986, the sinking of the cruise ferry Estonia in 1994, and the terror attacks of 9/11. When asked about any positive stories during this period, he answered, “One doesn’t remember them, because they never get big.”

Data vs Emotion

From a broadcaster’s perspective, this makes sense. If a plane crashes, we want to hear about it. But this also means that we shouldn’t be content with getting our information from the news alone; we need background and context, history and statistics. What is really impressive is the fact that 40 million planes take off every year, and almost every one of them lands safely. Since the 1970s, the number of passengers has increased more than ten-fold, and yet the number of accidents and fatalities has halved – but you would never know it from following the news.

Max Roser, an economist at Oxford University who collects data on the world’s development, puts it this way: “Things that happen in an instant are mostly bad. It’s this earthquake or that horrible murder. You’re never going to have an article on the BBC or CNN that begins by saying: ‘There’s no famine in south London today’ or: ‘Child mortality again decreased by 0.005 per cent in Botswana’.

There are many benefits to the kind of instant news that global TV networks and the internet have brought us. At last we have learned about the conditions under which people live in other parts of the world. But it also makes it easier for someone, somewhere to find something truly shocking to report on. There is always a war, and there is always a child murderer on the loose, and that is what will top the news cycle – all the time. And, of course, political parties, campaigners and pressure groups always exploit our fear to promote their own ideologies.

It is our own fault. If we didn’t want to read about, listen to and watch bad news, journalists would not report it. Indeed, when something terrible happens anywhere, two billion smartphones will nowadays make sure that we find out, even if no reporters are on the scene.

It’s Evolution

This obviously has long-term consequences. The psychologists Daniel Kahneman and Amos Tversky have shown that people do not base their estimates of how frequent something is on data, but on how easy it is to recall examples from memory. This “availability heuristic” means that the more memorable an incident is, the more probable we think it is, so we imagine that horrible and shocking things, which stay in our thoughts, are more frequent than they are. We are built to be worried. We are interested in exceptions. We notice the new things, the strange and unexpected. It’s natural. We have been hardwired this way by evolution. Fear and worry are tools for survival: the hunters and gatherers who survived sudden storms and predators were the ones who had a tendency to scan the horizon for new threats rather than those who were relaxed and satisfied. If the building is on fire, we need to know about it immediately.

Steven Pinker mentions three particular psychological biases that make us think that the world is worse than it really is. One is the well-documented fact that “bad is stronger than good” – we are more likely to remember losing money, being abandoned by friends or receiving criticism than we are to remember winning money, gaining friends or receiving praise.

Another emotional bias is the psychology of moralisation. Complaining about problems is a way of sending a signal to others that you care about them, so critics are seen as more morally engaged. A third bias is our nostalgia about a golden age when life was supposedly simpler and better. As the cultural historian Arthur Herman observed: “Virtually every culture past or present has believed that men and women are not up to the standards of their parents and forebears.”

The fact that things have in fact been getting better – overwhelmingly so – does not guarantee progress in the future. After years of easy money and debt financing of companies and governments, a large-scale financial crisis is possible, when all the bills come due. Global warming may threaten ecosystems and affect the lives of millions. Large-scale war between major powers is possible. Terrorists could wreak havoc on a massive scale if they get access to our most powerful technologies, but they could also co-ordinate a large number of smaller attacks on civilians.

But more than that, people led by fear might curtail the freedom and the openness that progress depends on. When Matt Ridley, author of The Rational Optimist, is asked what he is worried about, he usually responds, “superstition and bureaucracy,” because superstition can obstruct the accumulation of knowledge, and bureaucracy can stop us from applying that knowledge in new technologies and businesses.

Yet in our era of globalisation, more countries, in more places, now have access to the sum of humanity’s knowledge, and are open to the best innovations from other places.
In such a world, progress no longer depends on the whim of one emperor. If progress is blocked in one place, many others will continue humanity’s journey.

Solar Power Capacity Tops Coal for the First Time Ever

My Comments: Yes, this is only in China. But I grew up when coal was virtually 100% (in England). While China is newly industrialized compared to our status in the world, this headline has huge implications.

Also, keep in mind as a Florida voter, to vote NO on Amendment 1. This was promoted by the oil and gas industry to limit flexibility with respect to solar energy. And while you’re at it, don’t automatically re-elect the three judges on the Florida Supreme Court that allowed Amendment 1 to appear on the ballot. They are Charles Canady, Jorge LaBarga and Ricky Polston.

by Geoffrey Smith | October 25, 2016

China alone installed two wind turbines per hour and 500,000 solar panels a day last year.

Solar power now accounts for more installed capacity than any other form of electricity generation, according to new data out Tuesday.

“About half a million solar panels were installed every day around the world last year,” the Paris-based International Energy Agency said in a new report on the renewables sector, as emerging markets in particular bet heavily on green power. China also installed the equivalent of two wind turbines every hour last year.

In total, over half the new power capacity installed last year—153,000 megawatts, or 153 gigawatts—was renewable-sourced. That’s a 15% increase from the previous year, and three-quarters of it came in the shape of wind (66 GW) or solar photo-voltaic (49 GW).

Capacity is what a plant can theoretically produce. Actual generation remains much lower, due to the basic unpredictability of resources such as sunlight and wind. But even on levels of actual generation, the IEA said renewables would close the gap rapidly going forward.

“We are witnessing a transformation of global power markets led by renewables and, as is the case with other fields, the center of gravity for renewable growth is moving to emerging markets,” said Dr. Fatih Birol, the IEA’s executive director.

The IEA said the share of renewables in the generation mix would rise to 28% within six years, from 23% at the end of last year. It raised its forecast for green power output in that timeframe by 13% “due mostly to stronger policy backing in the U.S., China, India and Mexico.”

Another factor expected to help is a continued fall in costs: the IEA reckons the cost of solar PV will fall by a quarter, and the cost of onshore wind will fall by 15%. Lower capital costs mean that an installation can break even with lower load rates.

While climate change policy plays a large role in countries’ policy choices, especially in the wake of the Paris summit last year, the IEA pointed out that cutting air pollution and diversifying energy supplies are just as important some some countries. In China, in particular, renewables are helped by the fact that overall energy demand is growing rapidly, and renewables are the only option for meeting demand in places where pollution is already a hard constraint.

In China and India, where the fastest growth in green power is expected, it will still cover less than half of the overall increase in electricity demand. By contrast, in developed economies, renewables will grow faster than overall generation.