Economische aanraders: Veren of Lood biedt u op zondag wekelijks een inkijkje in (minstens) 15 belangrijke of informatieve artikelen en interviews die vooral de voorafgaande 7 dagen op economisch terrein verschenen op onafhankelijke sites.

De kop is de link naar het oorspronkelijke artikel, waarvan de samenvatting of de eerste (twee) alinea’s hier gegeven worden. Er zijn in deze rubriek altijd verschillende economische scholen vertegenwoordigd, en we streven er naar die diversiteit te handhaven.

We nemen wekelijks ook een paar extra links op naar artikelen die minder specialistische kennis vereisen. Deze met *** gemerkte artikelen zijn ons inziens ook interessant voor lezers met weinig basiskennis van economie.

——————————————————————————————————
Massive Stimulus Won’t Prevent a Eurozone Slowdown – Daniel Lacalle
28 augustus
The European Central Bank balance sheet has risen to 53.9 percent of GDP in July 2020. This compares to the 32 percent of the Federal Reserve and 33 percent of the Bank of England. This means a €1.78 trillion increase year to date. Furthermore, excess liquidity has soared to €2.9 trillion, a €1.2 trillion increase since January.
Added to this unprecedented monetary stimulus, the eurozone has included a record high 10 percent of GDP in various fiscal stimulus programs. None of it has prevented the economy from showing signs of slowing down in August.
——————————————————————————————————
***The Pandemic Is Accelerating Trends That Are Disrupting the Foundations of the Economy – Charles Hugh SAmith
25 Augustus
The problem is the economy that’s left has no means of creating tens of millions of jobs to replace those lost as the 1959 economic model collapses.
Fundamentally, the economy of 2019 was not very different from the economy of 1959: people went shopping at retail stores, were educated at sprawling college campuses, went to work downtown, drove to the doctor’s office or hospital, caught a flight at the airport, and so on.
The daily routine of the vast majority of the workforce was no different from 1959. In 2019, the commutes were longer, white-collar workers stared at screens rather than typewriters, factory workers tended robots and so on, but the fundamentals of everyday life and the nature of work were pretty much the same.
Beneath the surface, the fundamental change in the economy was financialization, the commodification of everything into a financial asset or income stream that could then be leveraged, bundled and sold globally at an immense profit by Wall Street financiers.
——————————————————————————————————
Want to Really Cut Taxes? Cut Government Spending – Frank Shostak
25 augustus
New government spending projects amount to little more than government squandering wealth. The fact that the private sector does not undertake these projects indicates that they are of low priority to individuals. The implementation of these projects will undermine the well-being of individuals, because they are funded at the expense of projects that are of a higher priority and would otherwise be undertaken in the private sector.
Moreover, whenever wealth producers exchange their products with each other, the exchange is voluntary. Every producer exchanges goods in his possession for goods that he believes will raise his living standard. The crux of the matter is that the trade must be freely undertaken. Government activities, however, are of a coercive nature; they are funded by forcing wealth producers to part with their wealth in exchange for less desirable government services. Producers of wealth are forced to exchange more for less. Obviously, this impairs their well-being.
——————————————————————————————————
The Market’s Descent Into Insanity – Tyler Durden
29 augustus
If there is just one chart that captures the unprecedented market moves observed not only since March, when the Fed threw aside any pretense of propping up equities and when the government launched a soft form of Universal Basic Income handing out benefits checks to virtually everyone including a new generation of traders who put much of the “free money” into momentum stocks, but also since late 2019 when two things happened – online brokerages eliminated trading commissions and the Fed started “NOT QE” to bail out JPM from a collapse in On-Off The Run treasury spreads – it is this one, which shows that as of Friday, Apple’s market cap is now 98% of the entire Russell 2000. A few more trading days, and one company will be more valuable than all small public companies in the US combined.
——————————————————————————————————
Rewiring supply chain networks – Hiromitsu Goto, Yuji Fujita, Wataru Souma
25 Augustus 2020
The current economic crisis calls for a pandemic-resistant supply chain network in the post-COVID-19 era. This column investigates the Japanese supply chain network at the firm level and discusses its dynamics, resilience, and robustness. It shows that the network can be characterised by a ‘walnut’ structure, with an intricately connected centre surrounded by upstream and downstream components. Despite the maturity of the Japanese economy, the network is actively changing, with fast-growing firms becoming more connected and slow-growing firms moving to the periphery. Fully understanding this structure will be crucial in making supply chain networks resilient to pandemics in the future.
——————————————————————————————————
The Social and Economic Side Effects of Negative Interest Rates – Pascal Hügli
26 augustus
Our world is currently suffering from acute schizophrenia. Banks are pushing impact and sustainable investing like crazy, companies are subordinating their production sites and supply chains to the noble goal of sustainability, and more and more parts of our society are discovering ecologism as the most meaningful political religion of our time.
At the same time—and this reveals the extent of the schizophrenia—our current economic structure is showing serious anomalies that are diametrically opposed to meaningful sustainability—first and foremost negative interest rates, which are increasingly eating into the structure of the economy and are turning the world upside down.
——————————————————————————————————
Fed’s Total Assets Fall Again, Week 11 Since Peak-QE: Crazy Charts for Crazy Times – Wolf Richter
27 augustus
“Two steps forward, two steps back”: Fed’s new song and dance, no?
Total assets on the Fed’s balance sheet for the week ended August 26, released this afternoon, fell by $20 billion, to $6.99 trillion, after two weeks in a row of increases, which had followed two weeks in a row of declines, which had followed two weeks in a row of increases, which had followed four weeks in a row of declines. Two steps forward, two steps back — the Fed’s new song and dance?
——————————————————————————————————
Trump Administration To Invest $1 Billion In Quantum Computing, AI – Alan McDonnell
26 augustus
The Trump Administration announced awards of more than $1 billion Wednesday for the establishment of 12 new artificial intelligence (AI) and quantum information science (QIS) research & development institutes across the United States. The administration says it is taking the action to ensure American leadership in what it termed “industries of the future,” which include 5G and other critical technologies.
——————————————————————————————————
***How Nations Collapse: Disunity – Charles Hugh Smith
24 Augustus
They may just opt out of the whole insane charade and stop paying the mountains of debt and stop trying to prop up the deranging pretense of middle-class snobbery.
Though many blame Donald Trump for dividing the nation, the nation was already disunited. Trump’s election simply added day-glo paint to the lines that had long been hardening between disunited, disaffected camps.
As I’ve explained over the years, disunity is the systemic source of collapse– not just of nations and empires but of enterprises and families. In other words, disunity is scale invariant: it breaks down marriages, family fortunes, partnerships, corporations, nations and empires with the same dynamics.
When challenges arise–and challenges always arise–the unified family, enterprise, nation or empire can make the shared sacrifices necessary to meet the crisis head-on, and not just survive, but as befits an anti-fragile system (as per Nassim Taleb’s definition of anti-fragility), become stronger as a result of adapting to the crisis.
——————————————————————————————————
Mises on Syndicalism – Ludwig von Mises
27 augustus
[This article is excerpted from Socialism: An Economic and Sociological Analysis.]
As political tactics Syndicalism presents a particular method of attack by organized labour for the attainment of their political ends. This end may also be the establishment of the true Socialism, that is to say, the socialization of the means of production. But the term Syndicalism is also used in a second sense, in which it means a sociopolitical aim of a special kind. In that sense Syndicalism is to be understood as a movement whose object is to bring about a state of society in which the workers are the owners of the means of production. We are concerned here with Syndicalism only as an aim; with Syndicalism as a movement, as political tactics, we need not deal.
——————————————————————————————————
***Beyond the public corporation: Insights from history – Timothy Guinnane, Susana Martínez-Rodríguez
28 Augustus
The decline in public corporations in the recent past has raised some concerns due to their perceived contribution to economic growth and lesser tendency to engage in corruption. This column utilises historical time series data from Spain along with complementary data from countries including Germany to examine patterns in the choice of enterprise form and evaluate the motives behind their adoption. It concludes that some of the seemingly new patterns in enterprise form may essentially be similar to those already seen in the past, making close analysis of historical data very important.
——————————————————————————————————
Dworkin and the Free Market – David Gordon
28 augustus
Ronald Dworkin was an outstanding American legal philosopher, but he is usually taken to be a strong opponent of the free market and defender of the welfare state. This perception of him isn’t wrong, but he is much more favorable to the free market than you might think, and we can learn a lot from him.
In his book Sovereign Virtue, he tells us that equality is the sovereign political virtue. Dworkin’s basic principle states: “No government is legitimate that does not show equal concern for the fate of all those citizens over whom it claims dominion and from whom it claims allegiance.” What could be more antilibertarian?
——————————————————————————————————
Office Towers in Hong Kong Battered from All Directions: Big Haircuts for Investors amid Falling Rents and Rising Vacancies – Nick Corbishley
29 augustus
As so often, this started well before Covid, but Covid is speeding up the process.
A case in point is the 73-storey Center office block. In late 2017, when Hong Kong’s multi-decade real estate boom was close to its vertiginous zenith, a consortium of business magnates called C.H.M.T Peaceful Development Asia Property bought 75% of the building from the city’s then-richest man Li Ka-shing for HK$40.2 billion (US$5.15 billion). According to real estate agents cited by South China Morning Post, it was the world’s most expensive transaction for a single building.
Each consortium member paid an average of HK$33,000 ($4,260) per square foot for their piece of the deal. The business plan was simple: rather than renting the office space, each member would divide the floors they owned into subdivided office units which they could then sell on to the occupants at a higher price, turning a tidy profit in the process.
——————————————————————————————————
Ex-post economic evaluation of competition policy: The EU experience – Fabienne Ilzkovitz, Adriaan Dierx
27 Augustus
With the increased globalisation and digitalisation of the economy and the challenge of recovery from the COVID-19 crisis, the future of EU competition policy is up for debate. In response, the European Commission is reviewing its enforcement practice and has brought forward new policy initiatives. In an effort to improve the evidence base of its activities, the Commission has become increasingly active in evaluating the economic effects of its competition policy interventions. This column summarises the main lessons learnt from this work and sets out areas for further research.
——————————————————————————————————
Why Americans Are Looking for a Safe Haven from the Dollar – Stewart Jones
27 augustus
As the Federal Reserve’s quantitative easing practices generate the biggest debt bubble in history, gold futures are trading at record highs, a phenomenon some have called “a bit of a mystery.” However, this “mystery” was solved long ago by the laws of economics. The only “mystery” here is why—contrary to centuries of economic wisdom—we allowed centralized paper money to become the dominant form of currency in the first place.
——————————————————————————————————
Lockdown accounting – Charles Gottlieb, Jan Grobovšek, Markus Poschke, Fernando Saltiel
29 Augustus
Many countries have implemented social distancing and lockdown policies to tame the spread of Covid-19. This column discusses the potential GDP and employment effects of lockdown policies for a broad cross-section of countries ranging in income per capita from Niger to Luxembourg. It shows that the employment and GDP effects of lockdown policies are U-shaped in income per capita. While workers in rich countries have a substantially higher ability to work from home, which mitigates declines in employment and GDP, poor countries concentrate employment and value-added in essential sectors that are not shut down. Middle-income countries see the largest declines as they feature relatively large employment shares in non-essential sectors and relatively low work from home ability.
——————————————————————————————————
Mexico’s Unexpected Fiscal Sanity – Dustin Leenhouts
24 augustus
When one hears about a regime that’s engaging in a surprising amount of fiscal restraint, one does not usually think “Mexico.” Yet in recent years, Mexico’s leftist leader Andrés Manuel López Obrador has become, in the words of one Latin American publication, “a fiscal hawk.” Even as calls for greater spending have increased during the economic stagnation and as destruction of the covid-19 crisis has grown, López Obrador has continuously avoided advocating for increased spending.
——————————————————————————————————
***The effect of international scrutiny on manufacturing workers: Evidence from the Rana Plaza collapse in Bangladesh – Laurent Bossavie, Yoonyoung (Yoon) Cho, Rachel Heath
27 Augustus
The collapse of the Rana Plaza factory building in Bangladesh in April 2013 is widely considered the worst accident in the history of the garment industry. It intensified local and international attention paid to working conditions in the industry and resulted in a series of reforms, including a minimum wage and high-profile but voluntary audits examining safety. This column studies the effects of those reforms on workers and finds that while working conditions increased after the reforms, women’s wages increased at first but fell in the longer run, as did the likelihood of having a formal work contract.
——————————————————————————————————
2020 Will Be a Record-Breaking Year for Debt. How Long Can This Last? – Ryan McMaken
26 augustus
The deficit narrowed during July after months of record shortfalls in federal tax revenues. During April, May, and June of this year deficits surges to unprecedented highs as economic activity dried up, workers were furloughed and laid off, and tax payments were deferred.
Nevertheless, according to the Treasury Department’s latest report on tax receipts and federal outlays, the gap between tax receipts and federal spending narrowed sizably during July. Although outlays increased to $626 billion during July (a 68 percent increase over July 2019), tax receipts surged to over $563 billion.
——————————————————————————————————
The Federal Reserve and quantitative easing: A boost for investment, a burden on inflation – Gregor Boehl, Gavin Goy, Felix Strobel
30 Augustus
Despite their pivotal role, the macroeconomic effects of large-scale asset purchases, known as quantitative easing, remain open to debate. This column provides insights from a structural investigation of the macroeconomic effects of the Federal Reserve’s quantitative easing programme during the Global Crisis. In line with the general consensus, the results suggest that asset purchases substantially eased borrowing conditions and facilitated new investment. The rise in investment led to an increase in the productive capacity which, in turn, lowered firms’ marginal cost. There were, however, inflationary effects as well.
——————————————————————————————————

Disclaimer: De VoL-redactie selecteert deze artikelen op interessante inzichten, of naar wij denken nuttige informatie. Wij kunnen echter geen enkele aansprakelijkheid aanvaarden voor de gevolgen van beslissingen die op grond hiervan door lezers zijn genomen, zakelijk zomin als privé.

Eerdere afleveringen van dit wekelijkse overzicht vindt u hier.