By Bilal Hafeez 15-09-2019
In: top-picks, Other

Top Picks: Politics


3rd December

Economies in East Asia should be proactive on policies to avoid Latam like social unrest and what do Michael Bloomberg’s philanthropic endeavours indicate?

East Asia’s Political Vulnerability (Project Syndicate) Korea University professor Lee Jong-Wha argues that East Asian countries could follow the path of Latin American instability unless policymakers change their policies. He argues the case for economic policies that reduce inequalities but are balanced with fiscal sustainability. [Bearish East Asia]

What Mike Bloomberg’s giving says about Mike Bloomberg (Axios) Bloomberg has donated to support numerous social development causes. This could help reveal his likely policies. His major causes include controlling the use of tobacco, tackling climate changes, road safety, and  urban development

26th November

The hype around social media caused right-wing populism could be overstated. Meanwhile, the lefts big plans for healthcare spending could lead to less military spending. And ever wondered when protests turn into revolutions?

Why Elizabeth Warren’s Foreign Policy Worries America’s Allies (The Atlantic) It appears that Warren’s “Medicare for All” campaign will come at the expense of defense spending. This move is making foreign allies nervous.

Do Social Media Drive the Rise in Right-wing Populism? (Marginal Revolution) A recent research shows that in France, the UK and the US, increased use of social media did not contribute to the increase in popularity of right-wing candidates. [Bullish social media]

We Live in a World of Upheaval. So Why aren’t Today’s Protests Leading to Revolutions? (The Conversation) History professor Peter McPhee concludes six key characteristics for social movements to become revolutions. The major unrests we see in 2019 don’t check all the boxes as it’s hard for all parties involved to remain united around their core objectives.


19th November

Trade wars are the obvious source of geopolitical tensions. But we should add conflict over water and also over mobility – remember the Chile protests were triggered by rising costs of public transport.

The Growing Threat of Water Wars (Project Syndicate) More geopolitical conflicts are about access to water resources. However, most of these conflicts take place between developing economies, and many advanced economies still maintain water-consumption habits that won’t alleviate the global water stress.

Quantifying the Unemployment Effects of Trump’s Protectionist Policies (VOX EU) Researchers conclude that repealing NAFTA and the bilateral tariffs between the US and Mexico would reduce welfare by 0.31% in the US and by 6.6% in Mexico. However, evidence also shows that Canadianworkers are slightly better off as a result. [Bearish Mexico]

When Markets and Mobility Collide (Project Syndicate) Harvard Professor Ricardo Hausmann reflects on the recent Chilean protests over an increased metro fare. He concludes that this “market adjustment” on access to public goods and services – i.e. public transportation – is unfair to the economically disadvantaged population.

Congress, Nord Stream II, and Ukraine (The Brookings Institute) Steven Pifer argues that sanctioning parties that are involved in the construction of the Nord Stream II pipeline doesn’t make much difference. But the Congress could still amend legislation to help Ukraine take advantage of its position as a transit country for Russian gas. [Bullish gas]

12th November

Trump is casting a shadow of uncertainty on markets – he hasn’t yet signed an agreement to roll back trade tariffs on China and his impeachment proceedings can fly in either direction. Similarly, across the pond in the UK, Conservatives are scrambling for support in the North.

Did Trump’s Trade War Impact the 2018 Election? (Blanchard, Bown, Chor) Academics find trade war accounted for one-tenth of the observed nation-wide decline in Republican House candidates’ vote share between 2016 and 2018. Largely driven by retaliatory tariffs on agricultural products.

The 7 Ways Impeachment Could Shape The 2020 Election(Fivethirtyeight) Things could go in a number of directions – Trump could lose everything, but outcomes can also lead to utter chaos and destruction for the Democrats.

Can the Conservative Party Win in the North of England? (The Conversation) The Conservative’s strategy of appealing to the “Workington Man” in North England oversees the demographic complexity of this region and may not be as effective in the face of the upcoming UK election. [Bearish GBP]

We Are Finally Getting Better at Predicting Organized Conflict (MIT Technology Review) Shows the anatomy of “conflict models” and how it computes a “risk score” to assess the probability of social conflicts in a region. Such models successfully forecast the September 2018 conflicts in Ethiopia.

2nd November

Yesterday, the Fed cut rates for the third time this year. The persistent low rate environment seems to be a cause of bubbles forming after all. The least central bankers can do is help reduce carbon emissions – ‘Green QE’ is all in.

When Yields Talk, Sectors Listen (Advisor Perspectives) Low interest rates impact not only bonds but equity valuations too. And some sectors are more rate sensitive. Financials suffer whereas Utilities, Consumer Staples, and Healthcare outperform. [Bullish these latter sectors]

Herd Behaviour in Asset Markets: The Role of Monetary Policy(VOX) Argues against economist Robert Shiller’s findings that bubbles are random and unpredictable and instead finds they are closely linked to loose monetary policy. [Bearish stocks]

Jens Weidmann: Climate Change and Central Banks(Jens Weidmann)Discusses ways in which central banks can be involved in transitioning to a low-carbon economy. Heavy focus on green finance or ‘Green QE’, however, might distract from the main policy objectives and hinder bank independence. [Bearish green bonds]

26th October

We looked at how populism is turning left-wing in one of our specials this week. This might be holding true for Eastern Europe too, as some excellent Brookings analysis points at. Elsewhere, we picked out a curious list of the financiers attending “Davos in the desert”.

Is the Tide Turning Against Right-Wing Populism and Nationalism in Central Europe? (Brookings) Argues that the uniting of opposition parties is a key strategy to the diminishing power of right wing in European politics. Could support rise of left populism = less business friendly = lower stocks

The Grandees Headed to Saudi Arabia’s “Davos in the Desert” (Axios) Axios compiles the list of guests who will attend the Future Investment Initiative in Riyadh later in October – heads of state, high-profile Trump administration cabinet members, executives of the world’s largest financial institutions and will.i.am all made it to the list. Saudi unaffected by human rights issues.

U.S. Military Could Collapse Within 20 Years Due to Climate Change (Vice) A Pentagon research report highlights several climate-trigged factors that could be detrimental to the US Military in the upcoming two decades: a collapse of the power grid, disease epidemic and geopolitical tensions stemmed from climate-related population displacement.

19th October

Trump is likely to get away with it this time. At least, according to a great piece comparing his impeachment process to that of Nixon’s . Meanwhile, with Extinction Rebellion protests globally, we re-cap the negative externalities of climate change and how to tackle them.

Trump and Nixon: Three Key Differences Between 2019 and 1974 (The Conversation) Differences include Nixon’s impeachment process started in the Senate not the House, Republicans and Trump loyalists dominate today’s Senate unlike Nixon’s time and the media is more fragmented than earlier.

Anti-globalisation Bias and Public Policy (Project Syndicate) Argues that a number of anti-globalisation negative biases, most commonly nationalism, self-interest, and lack of economic understanding, result in misguided public policies.

The Necessity of Climate Economics (Project Syndicate) Re-visits the main economic concepts of negative externalities as ways to tackle climate change.

12th October

Geopolitics has taken a centre stage recently, especially with the climate movement across major cities. A few insightful pieces exploring how to try and respond to it.

High Finance is Wrecking the Economy and the Planet – but it Won’t Reform Itself(Prospect Magazine) Criticizes FT’s new campaign that aims at resetting rentier capitalism as meaningless and toothless. It does agree, however, that capitalists are searching for new ways to revamp capitalism as political insurgencies, protectionism and authoritarianism all threaten globalisation.

Free Trade is Expanding, Just Not With the US(Council on Foreign Relations) Highlights that despite countries accounting for more than a third of global output signing more than a dozen trade agreements in the last two years, the US chooses to stay on the sidelines

The Climate Risk You May Not be Thinking About (McKinsey Global Institute) Argues that the most significant risk of the current climate change predicament is not weather itself but our lack of adaptation to today’s volatility. Plenty of examples of one extreme event such as a storm significantly disrupting output.

Greta Thunberg’s Moment(Project Syndicate) Explores the mass movements of civil disobedience started by Thunberg and criticizes the failure of Governments to react.

4th October

Impeachment is all the focus now, bringing us back to the years of Clinton. It’s unlikely to lead to much, however. We compare how Republicans are performing in light of re-election hopes and how Trudeau lost his reputation – slowly, then all at once.

The Impeachment Trap (Project Syndicate) Argues that Democrats have made a mistake to call for Trump’s impeachment, hoping to follow Clinton’s experience. Trump retains the loyalty of his base supporters and enjoys majority support in the Senate. It’s been a info-leaky administration – nothing new was learned about Clinton after the Starr Report was issued, and nothing new will be learned about Trump.

Looking at America’s Two Economies (Econlife) Analyses the state of the economy in the Republican states in comparison to Democrats. In 2008, the Republican median HH income, at $55,000, was higher than the Democrats. By 2017, Democrats were up to $61,000 and Republican voters were down to $53,000. Argues that this is because with Democrats increasingly clustered in affluent coastal urban areas, they also represent a bigger share of productivity, education and better paying jobs than their opponents.

Justin Trudeau’s Spectacular Self-Destruction(Foreign Policy)Gives an insight into Justin Trudeau’s stunning fall from grace, with approval ratings of just 31% down from more than 60% in 2016. Not only has he been underdelivering on his promises, (despite millennials favouring his legalisation of cannabis) but he also backtracked from his pledges to revamp the electoral system. Far from his initial appeal of being a change maker, he is now seen as a run-of-the-mill politician.

Europe Needs a Migration Reset (Project Syndicate) Argues that Europe needs a rethink on how to handle the floods of migrants as camps are overflowing. Four actions – better secure external borders, handle economic and asylum migrants separately, repair the migrant distribution system to member states and forge stronger ties with countries of origin.

Political and Economic Drivers of Pogroms (VOX) – Analyses the interaction of political and economic factors to drive pogroms in an anti-semitic environment. The authors find that massacres occurred when economic downturns coincided with political upheaval. One of their key findings also indicate that occupational segregation between Jews and the mass played a significant role in triggering ethnic violence.

28th September

Six Small Facts About Globalization That Are Really Big (econlife) Highlights six key ingredients for globalisation: 1) refrigerated containers, 2) WTO, 3) Low non-tariff barriers , 4) FDI, 5) Services are important, 6) Mexico becoming important.

Companies Are Using a Depression-Era Law To Escape Trump’s Tariffs — And It’s Costing Them (ProPublica) An old law that allows free trade zones with the US is being revived

The Growing List of U.S. Government Inquiries into Big Tech (Axios) Lists the number of inquiries against Facebook (5), Google (4), Amazon (2) and Apple (1)

Why Global Trade Imbalances Could Get Worse Before They Get Better… (CFR) Argues that europe’s demand deficit and Asia’s excess savings are driving trade surpluses against the US. Their trends are not positive. Could keep trade wars in the headlines.

Tracking Global Corporate Tax Avoidance (Big Picture) 40% of multinationals profits are shifted to tax havens each year. This surely will be attacked by politicians.

20th September

US foreign policy has been changing since the height of interventionism during the Bush years. Now Trump may be setting the tone for years to come. Meanwhile, the UK may need to focus on trade deals with the US, Aust, Canada and NZ and we shouldn’t forget Ireland is key for Brexit.

How Trump is Remaking Republican Foreign Policy (Defense One) Out: neoconservatism and noninterventionism. In: a reactionary style that may outlast his administration.

Beyond Brexit – What a US-UK Trade Deal Will Really Look Like (CAPX) Argues for UK to focus on US and the broader 5 eyes alliance (Canada, Australia, NZ)

A Repeat of The Turmoil of 1914-1922? (Progressive Pulse) Compares the current dilemma of the Irish Backdrop Plan to the 1914 Crisis of the UK, where Ireland sought to break away from UK control and regain its sovereignty.