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Is Europe's gas supply threatened by the Ukraine crisis? | World news | The Guardian - 0 views

www.theguardian.com/...raine-crisis-russsia-pipelines
shared by Gene Ellis on 04 Mar 14 - No Cached
  • Is Europe's gas supply threatened by the Ukraine crisis?
  • more than a quarter of the EU's total gas needs were met by Russian gas, and some 80% of it came via Ukrainian pipelines. Austria, France, Germany, Hungary, Italy and Poland soon reported gas pressure in their own pipelines was down by as much as 30%.
  • While it was eventually resolved through a complex deal that saw Ukraine buying gas from Russia (at full price) and Turkmenistan (at cut price) via a Swiss-registered Gazprom subsidiary
  • ...10 more annotations...
  • But three years later, the same row erupted again: Gazprom demanded a price hike to $400-plus from $250, Kiev flatly refused, and on New Year's day 2009, Gazprom began pumping only enough gas to meet the needs of its customers beyond Ukraine.
  • Again, the consequences were marked. Inevitably, Russia accused Ukraine of siphoning off supplies meant for European customers to meet its own needs, and cut supplies completely
  • several countries – particularly in south-eastern Europe, almost completely dependent on supplies from Ukraine – simply ran out of gas.
  • Bulgaria shut down production in its main industrial plants; Slovakia declared a state of emergency
  • Many industry experts, though, point out that the world has changed since 2009, and that there are any number of reasons why Moscow's natural gas supplies may not prove quite the potent economic and diplomatic weapon they once were.
  • higher than normal temperatures are forecast to continue for several weeks yet, significantly reducing demand for gas and leaving prices at their lowest for two years
  • since the first "gas war" of 2006, many European countries have made huge efforts to increase their gas storage capacity and stocks are high. Some countries, such as Bulgaria, Slovakia and Moldova, which lack large storage capacity and depend heavily on gas supplies via Ukraine, would certainly suffer from any disruption in supplies
  • New Gazprom pipelines via Belarus and the Baltic Sea to Germany (Nord Stream) have cut the proportion of Gazprom's Europe-bound exports that transit via Ukraine to around half the total, meaning only about 15% of Europe's gas now relies on Ukraine's pipelines. Gazprom is also planning a Black Sea pipeline (South Stream), expected in 2015, meaning its exports to Europe will bypass Ukraine completely. Ukraine itself has cut its domestic gas consumption by nearly 40% over the past few years, halving its imports from Russia in the process.
  • Europe is increasingly installing specialist terminals that will allow gas to be imported from countries such as Qatar in the form of liquefied natural gas – while Norway's Statoil sold more gas to European countries in 2012 than Gazprom did. "Since the Russian supply cuts of 2006 and 2009, the tables have totally turned," Anders åslund, an energy advisor to both the Russian and Ukrainian governments, told the Washington Post.
  • Europe accounts for around a third of Gazprom's total gas sales, and around half of Russia's total budget revenue comes from oil and gas. Moscow needs that source of revenue, and whatever Vladimir Putin's geo-political ambitions, most energy analysts seem to agree he will think twice about jeopardising it.
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Can Oregon save American health care? - 0 views

www.washingtonpost.com/...egon-save-american-health-care oregon american health health care
shared by Gene Ellis on 18 Jan 13 - No Cached
  • Medicaid enrollment shrank by 46 percent as patients affected by the changes left the program — likely relegated to the ranks of the uninsured — between February and December 2003, according to research published in the journal Health Affairs.
  • Separate research has found that when Medicaid premiums rise by 1 to 5 percent of an uninsured family’s income, their odds of participating drop from 57 to 18 percent.
  • “For the last 30 years, both the private and public sector have done the same things to manage health-care costs,” said Bruce Goldberg, the Oregon Health Authority director who oversees the Medicaid program. “They’ve cut people from coverage, cut payment rates or cut benefits
  • ...8 more annotations...
  • St. Charles noted that 144 patients tended to use the emergency room the most. Taken together, they averaged 14.25 trips each over 12 months. These patients drove much of the area’s Medicaid spending.
  • The majority had unmet mental health needs, even though most had Medicaid, which provides mental health coverage.
  • It stationed community health workers in emergency rooms, who could help assess why patients had turned up.
  • Of the 144 patients in the study, only 62 percent agreed to work with a community worker on a plan for their care. The others proved difficult to track down or did not want to participate.
  • Emergency department visits fell by 49 percent. On average, the program generated about $3,000 in savings per patient.
  • “I’m reassured by people talking about the role primary care providers need to play,” said Ern Teuber, the clinic’s executive director. “Still, when we start talking specific dollars, the perception is there isn’t enough money to go around and that somebody has to lose.”
  • It’s a huge issue, and there’s no doubt that hospital business models are going to have to change,”
  • “Medicaid by itself isn’t enough to change things,” he said. “For a lot of hospitals, it’s maybe 7 percent of their business. We have another 600,000 people the state covers.
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The Greek Austerity Myth by Daniel Gros - Project Syndicate - 0 views

www.project-syndicate.org/...ty-myth-by-daniel-gros-2015-02
shared by Gene Ellis on 15 Feb 15 - No Cached
  • The Greek Austerity Myth
  • Greece actually spends less on debt service than Italy or Ireland, both of which have much lower (gross) debt-to-GDP ratios. With payments on Greece's official foreign debt amounting to only 1.5% of GDP, debt service is not the country's problem.
  • The new Greek government's argument that this is an unreasonable target fails to withstand scrutiny. After all, when faced with excessively high debt, other European countries – including Belgium (from 1995), Ireland (from 1991), and Norway (from 1999) – maintained similar surpluses for at least ten years each, typically in the aftermath of a financial crisis.
  • ...4 more annotations...
  • To be sure, one can reasonably argue that austerity in the eurozone has been excessive, and that fiscal deficits should have been much larger to sustain demand. But only governments with access to market finance can use expansionary fiscal policy to boost demand.
  • Had Greece not received financial support in 2010, it would have had to cut its fiscal deficit from more than 10% of GDP to zero immediately. By financing continued deficits until 2013, the troika actually enabled Greece to delay austerity.
  • Of course, Greece is not the first country to request emergency financing to delay budget cuts, and then complain that the cuts are excessive once the worst is over. This typically happens when the government runs a primary surplus. When the government can finance its current spending through taxes – and might even be able to increase expenditure, if it does not have to pay interest – the temptation to renege on debt intensifies.
  • The practical problem for Greece now is not the sustainability of a debt that matures in 20-30 years and carries very low interest rates; the real issue is the few payments to the IMF and the ECB that fall due this year – payments that the new government has promised to make.
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What will it take for the euro zone to cut Greece loose? - The Globe and Mail - 0 views

www.theglobeandmail.com/...article23799873
shared by Gene Ellis on 06 Apr 15 - No Cached
  • What will it take for the euro zone to cut Greece loose?
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U.S. Example Offers Hope for Cutting Carbon Emissions - NYTimes.com - 0 views

www.nytimes.com/...-cutting-carbon-emissions.html
shared by Gene Ellis on 20 Mar 13 - No Cached
  • Fatih Birol, chief economist of the International Energy Agency in Paris, points out that if civilization is to avoid catastrophic climate change, only about one third of the 3,000 gigatons of CO2 contained in the world’s known reserves of oil, gas and coal can be released into the atmosphere.
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Robert Samuelson: A dishonest budget debate - The Washington Post - 0 views

www.washingtonpost.com/...2-9f54-f3fdd70acad2_story.html budget debate washington
shared by Gene Ellis on 18 Mar 13 - No Cached
  • t’s the math: In fiscal 2012, Social Security, Medicare, Medicaid and civil service and military retirement cost $1.7 trillion, about half the budget.
  • As a share of national income, defense spending ($670 billion in 2012) is headed toward its lowest level since 1940.
  • States’ Medicaid costs will increase with the number of aged and disabled, which represent two-thirds of Medicaid spending. All this will force higher taxes or reduce traditional state and local spending on schools, police, roads and parks.
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  • Almost everything is being subordinated to protect retirees.
  • “for how long will we continue to sacrifice investments in our nation’s children and youth ... to spend more and more on the aged?”
  • In a Pew poll, 87 percent of respondents favored present or greater Social Security spending; only 10 percent backed cuts. Results were similar for 18 of 19 programs, foreign aid being the exception.
  • an aging America needs a new social compact: one recognizing that longer life expectancies justify gradual increases in Social Security’s and Medicare’s eligibility ages; one accepting that sizable numbers of well-off retirees can afford to pay more for their benefits or receive less; one that improves generational fairness by concentrating help for the elderly more on the needy and poor to lighten the burdens — in higher taxes and fewer public services — on workers; and one that limits health costs.
  • Government is being slowly transformed into a vast old-age home, with everything else devalued and degraded.
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Read, I, Pencil | Library of Economics and Liberty - 0 views

www.econlib.org/...rdPncl1.html
shared by Gene Ellis on 26 Apr 13 - Cached
  • Simple? Yet, not a single person on the face of this earth knows how to make me.
  • Not much meets the eye—there's some wood, lacquer, the printed labeling, graphite lead, a bit of metal, and an eraser.
  • a cedar of straight grain that grows in Northern California and Oregon
  • ...16 more annotations...
  • The logs are shipped to a mill in San Leandro, California.
  • The slats are waxed and kiln dried again.
  • The cedar logs are cut into small, pencil-length slats less than one-fourth of an inch in thickness. These are kiln dried and then tinted for the same reason women put rouge on their faces.
  • Don't overlook the ancestors present and distant who have a hand in transporting sixty carloads of slats across the nation.
  • Once in the pencil factory—$4,000,000 in machinery and building, all capital accumulated by thrifty and saving parents of mine—each slat is given eight grooves by a complex machine, after which another machine lays leads in every other slat, applies glue, and places another slat atop—a lead sandwich, so to speak. Seven brothers and I are mechanically carved from this "wood-clinched" sandwich.
  • The graphite is mined in Ceylon.
  • The graphite is mixed with clay from Mississippi in which ammonium hydroxide is used in the refining process. Then wetting agents are added such as sulfonated tallow—animal fats chemically reacted with sulfuric acid. After passing through numerous machines, the mixture finally appears as endless extrusions—as from a sausage grinder-cut to size, dried, and baked for several hours at 1,850 degrees Fahrenheit. To increase their strength and smoothness the leads are then treated with a hot mixture which includes candelilla wax from Mexico, paraffin wax, and hydrogenated natural fats.
  • My cedar receives six coats of lacquer. Do you know all the ingredients of lacquer? Who would think that the growers of castor beans and the refiners of castor oil are a part of it? They are.
  • Observe the labeling. That's a film formed by applying heat to carbon black mixed with resins. How do you make resins and what, pray, is carbon black?
  • My bit of metal—the ferrule—is brass. Think of all the persons who mine zinc and copper and those who have the skills to make shiny sheet brass from these products of nature. Those black rings on my ferrule are black nickel. What is black nickel and how is it applied? The complete story of why the center of my ferrule has no black nickel on it would take pages to explain. RP.18
  • An ingredient called "factice" is what does the erasing. It is a rubber-like product made by reacting rape-seed oil from the Dutch East Indies with sulfur chloride. Rubber, contrary to the common notion, is only for binding purposes. Then, too, there are numerous vulcanizing and accelerating agents. The pumice comes from Italy; and the pigment which gives "the plug" its color is cadmium sulfide
  • Actually, millions of human beings have had a hand in my creation, no one of whom even knows more than a very few of the others.
  • There isn't a single person in all these millions, including the president of the pencil company, who contributes more than a tiny, infinitesimal bit of know-how.
  • Here is an astounding fact: Neither the worker in the oil field nor the chemist nor the digger of graphite or clay nor any who mans or makes the ships or trains or trucks nor the one who runs the machine that does the knurling on my bit of metal nor the president of the company performs his singular task because he wants me.
  • There is a fact still more astounding: the absence of a master mind, of anyone dictating or forcibly directing these countless actions which bring me into being. No trace of such a person can be found.
  • For, if one is aware that these know-hows will naturally, yes, automatically, arrange themselves into creative and productive patterns in response to human necessity and demand—that is, in the absence of governmental or any other coercive masterminding—then one will possess an absolutely essential ingredient for freedom: a faith in free people. Freedom is impossible without this faith.
  • Gene Ellis on 26 Apr 13
     
    " Articles EconLog EconTalk Books Encyclopedia Guides Search "I, Pencil: My Family Tree as told to Leonard E. Read" A selected essay reprint Home | Books | Read | Selected essay reprint Read, Leonard E. (1898-1983) BIO Display paragraphs in this essay containing: Search essay Editor/Trans. First Pub. Date Dec. 1958 Publisher/Edition Irvington-on-Hudson, NY: The Foundation for Economic Education, Inc. Pub. Date 1999 Comments Pamphlet PRINT EMAIL CITE COPYRIGHT Start PREVIOUS 4 of 5 NEXT End "
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European Union Leaders Agree to Slimmer Budget - NYTimes.com - 0 views

www.nytimes.com/...ropean-union-budget-talks.html
shared by Gene Ellis on 09 Feb 13 - No Cached
  • Galileo, a grossly overbudget and still unfinished satellite navigation project that aims to free Europe from its dependence on the United States’ global positioning system, escaped the cuts and is to receive 6.3 billion euros from 2014 to 2020.
  • But he cheered the preservation of heavy spending on farm subsidies, of which France is the biggest beneficiary.
  • And about 1 billion euros in cuts came from the part of the budget used to employ 55,000 people, including 6,000 translators,
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  • he devoted much of a postsummit news conference to boasting about his steadfast defense of British interests, particularly a multibillion-dollar rebate that Britain receives each year on its payments.
  • In the Baltic nations, for example, farmers are furious that a system of cash payments to support agriculture is skewed in favor of farmers from richer countries like France and the Netherlands. Latvian farmers say they get less than 40 percent of the European Union’s average payment level for each acre of land. Dairy farmers say they fare even worse, getting just 20 percent of what their Dutch counterparts receive.
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Let Greece take a eurozone 'holiday' - FT.com - 0 views

www.ft.com/...30-11df-953f-00144feab49a.html
shared by Gene Ellis on 30 May 12 - No Cached
  • If Greece still had its own currency, it could, in parallel, devalue the drachma to reduce imports and raise exports, cutting the 15 per cent of GDP trade deficit. The level of Greek GDP and employment might then actually increase if the rise in exports and decline in imports added more to domestic employment and output than was lost through raising taxes and cutting government spending. But since Greece no longer has its own currency, it is not free to follow this strategy.
  • Bank balances and obligations would remain in euros. Wages and prices would be set in drachma.
  • Gene Ellis on 30 May 12
     
    Excellent FT piece by Martin Feldstein
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German and French banks call the shots - European, Business - Independent.ie - 0 views

www.independent.ie/...ks-call-the-shots-2607577.html german french banks ireland debt
shared by Gene Ellis on 11 Jul 12 - No Cached
  • German and French banks call the shots Print Email  NormalLargeExtra Large ShareNew  0  0   Also in European Debt crisis: European shares edge lower and growth worries persist Bank of England's Tucker 'wasn't encouraged to lean on Barclays' Draghi keeps door open to further interest rate cuts Marks and Spencers sales hit by summer deluge Spain's debt tops 7pc danger level as Madrid gets more time European Home "Shocking" 2012 HoroscopeWhat Does 2012 Have In Store For You? Shockingly Accurate. See Free!www.PremiumAstrology.comExpat Health InsuranceQuick, Compare, Trusted Website Expatriate Health Insurance Quoteswww.ExpatFinder.com/Instant-Quoteshttp://www.googleadservices.com/pagead/aclk?sa=L&ai=BMEejVeb8T8fDKoSG_QaAhrTCB-q_1OYBmoqphxvAjbcB0NkREAMYAyDgw6kIKAU4AFD4gumFAmCpsL6AzAGgAairsfEDsgESd3d3LmluZGVwZW5kZW50LmllyAEB2gFfaHR0cDovL3d3dy5pbmRlcGVuZGVudC5pZS9idXNpbmVzcy9ldXJvcGVhbi9nZX
  • d, for reasons best
  • known to itself, the ECB -- in clear contravention of both previous market precedent and financial logic -- has insisted that the senior bondholders be repaid in full and has lent the Irish banks, institutions which it must have known were hopelessly insolvent, €70bn to do so.
  • ...1 more annotation...
  • Top of the list are German banks, to whom we owe €92bn with a further €38bn of other exposures. Does the fact that Irish banks potentially owe their counterparts up to €146bn explain the German government's implacable opposition to any write-down of the Irish banks' debts? After the British and the Germans, it is the French banks -- with total Irish bank loans of almost €32bn and a further €23bn of other exposures -- who have the biggest exposure to Ireland. Does this provide at least a partial explanation for French president Nicolas Sarkozy's truculence when faced with Irish requests that senior bondholders be forced to accept a haircut?
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A Declining Euro Can't Cure All Ills - WSJ.com - 0 views

online.wsj.com/...3754904577531032942698056.html
shared by Gene Ellis on 17 Jul 12 - No Cached
  • but what would in normal times be a boon for the region may not help as much now, experts say.
  • Before the crisis, actions such as the European Central Bank rate cuts two weeks ago would have had a twofold effect in reviving the economy: Banks would have passed the lower rate on to their clients, while foreign-exchange markets would have marked the currency down, giving exporters better chances to sell their products abroad.
  • In today's polarized euro zone, it isn't that simple. For one thing, tThere is no certainty that euro-zone banks will pass on the cut in borrowing costs.
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  • Even if they did, he explained, the euro zone's problems are now so acute that few companies seem to want to borrow.
  • Mario Boselli, chairman of the Italian Chamber of Fashion, frets that larger emerging economies still account for only 10% of total Italian exports. "This is not enough" to offset the weakness in developed economies, he says.
  • Both Mr. Boselli and Philip Halpin, an adviser to the Irish Exporters' Association, say the euro would have to fall as low as $1.10 (from about $1.23 currently), to produce a robust export-led recovery.
  • Ludovic Subran, chief economist at French trade-credit insurer Euler Hermes, warns that might not be enough. Such a depreciation would have little effect in France because high taxes and rigid labor costs reduce the potential benefits, he says.
  • Any euro-zone economy would benefit from a drop in the euro to the extent that it can redirect more resources to external markets. But the willingness and ability of businesses to do that differs across the region. Nadio Delai, chairman of Italian research and consultancy firm Ermeneia, say a host of smaller, less prestigious Italian shoe and textile companies have started to export to emerging markets, riding the coattails of more famous names.
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Worried Banks Pose Obstacle to Forming Financial Union - NYTimes.com - 0 views

www.nytimes.com/...-push-for-financial-union.html banks pose obstacle union nytimes nytimes com com
shared by Gene Ellis on 18 Jun 12 - No Cached
  • French loans to Spanish banks plunged 34 percent in the fourth quarter of 2011 compared with the previous quarter, according to the latest data from the Bank for International Settlements.
  • For Italian banks, French bankers cut their exposure by 16 percent. German banks have also been increasingly wary of their Italian and Spanish peers, reducing lending to them by about 19 percent last year
  • In the last six months, as fears about Spain and Greece have intensified, Spanish and Italian banks have been by far the biggest users of the European Central Bank’s program of cut-rate, three-year loans to banks that cannot find money elsewhere.
  • ...4 more annotations...
  • But instead of funneling that money back into the Spanish and Greek economies as loans to cash-starved businesses and individuals, these banks have become the primary buyers of their governments’ bonds.
  • Most delicate will be whether the Spanish banks receiving the largest cash injections, like the nationalized mortgage giant Bankia, will be forced to impose losses on holders of their subordinated bonds. Those are the investors whose bonds are not backed by collateral and are thus considered more risky.
  • In Spain, though, the problem is that 62 percent of the holders of Bankia’s subordinated debt are Spanish individual investors, not overseas hedge funds and investment banks. It is not likely that Madrid will be willing to hit those citizens with a 65 percent loss — the loans are currently priced at about 35 cents on the dollar — at a time of 25 percent unemployment in the country.
  • “There are compelling reasons for the euro zone to insist on losses for subordinated and even senior bondholders, the least of which is a reduction in moral hazard,” said Adam Lerrick, an expert on banking and sovereign debt at the American Enterprise Institute. “Losses for bondholders is now euro zone policy, so Europe’s credibility is also at stake.”
  • Gene Ellis on 18 Jun 12
     
    Good article on bank behavior
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A Disease Cuts Corn Yields - NYTimes.com - 0 views

www.nytimes.com/...-disease-cuts-corn-yields.html GM
shared by Gene Ellis on 09 Jan 14 - No Cached
  • No one is certain why Goss’s wilt has become so rampant in recent years. But many plant pathologists suspect that the biggest factor is the hybrids chosen for genetic modification by major seed companies like Monsanto, DuPont and Syngenta. “My theory is that there were a couple of hybrids planted that were selected because they had extremely high yield potentials,” said Dr. Robertson, whose research is financed by Monsanto and the Agriculture Department. “They also may have been highly susceptible to Goss’s wilt.”
  • About 90 percent of the corn grown in the United States comes from seeds that have been engineered in a laboratory, their DNA modified with genetic material not naturally found in corn species. Almost all American corn, for instance, is now engineered to resist the powerful herbicide glyphosate (often sold as Roundup), so farmers can kill weeds without killing their corn.
  • As farmers grow more corn to satisfy the demand for ethanol, they are rotating it less frequently with other crops.
  • ...2 more annotations...
  • “One of the best management techniques for controlling Goss’s wilt is crop rotation — corn, then soy or another crop,” Mr. Anderson said.
  • nother possible factor is the growth of no-till farming, which leaves cornstalks, on which the bacteria can linger, to decay in the field after harvesting, rather than being plowed under.
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Nato defence spending falls despite promises to reverse cuts - BBC News - 0 views

www.bbc.co.uk/world-31619553 defence spending
shared by Gene Ellis on 03 Apr 15 - No Cached
  • Nato defence spending falls despite promises to reverse cuts
  • Europe's failure to pay its way in Nato is seriously worrying the US, which already provides 75% of all Nato defence expenditure (the US spends 3.8% of its GDP on defence).
  • Without any of its own maritime patrol aircraft, the UK recently had to request the help of Nato allies to search for suspected Russian submarines off the west coast of Scotland. In Germany there have been reports of serious malfunctions in military equipment.
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  • These figures are in line with earlier research carried out by the Royal United Services Institute which projected that UK defence spending could fall to about 1.7% of GDP by the end of the decade.
  • Nato has already set a target that member states should each spend a minimum of 2% of their national income or GDP on defence.
  • Contrast that with Russia's defence spending, which is rising from 3.4% of its GDP this year to 4.2% next year ($81bn or £52.2bn). Russia is also stepping up its military activity. A separate report by Ian Brzezinski for the Atlantic Council says there is also an "exercise gap" between Russia and Nato. Since 2013 Russia has conducted at least six military exercises involving 65,000-160,000 troops.
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Chevron and Ukraine Set Shale Gas Deal - NYTimes.com - 0 views

www.nytimes.com/...ne-sign-deal-on-shale-gas.html
shared by Gene Ellis on 06 Nov 13 - No Cached
  • Last year Ukraine consumed about 50 billion cubic meters of natural gas, most of it imported from Russia, while producing about 19 billion cubic meters, according to the BP Statistical Review of World Energy.
  • Shale gas technologies are altering the geopolitics of energy from Russia to the Middle East. Three territories — Russia, Iran and Qatar — hold about half the conventional reserves of natural gas. But shale is found in many other places, including India, China, Australia and in Eastern Europe, undercutting the power of the oil sheikhs and the Kremlin.
  • Ukraine, despite producing some domestic gas by conventional extraction, remains highly dependent on Russia’s Gazprom, which cut off its supplies in 2006 and 2009 in pricing disputes. As a result, Ukraine pays exceptionally high prices for natural gas,
  • ...2 more annotations...
  • Europe depends on Russia for about 40 percent of its imported gas, most transmitted through Ukraine.
  • The appearance of imported cheap liquefied natural gas on the European market from Qatar and reduced demand have already led Gazprom to negotiate cuts of about 10 percent in contracts with Western European utilities,
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Productivity: Technology isn't working | The Economist - 0 views

www.economist.com/...higher-productivity-and-better
shared by Gene Ellis on 05 Feb 15 - No Cached
  • Technology isn’t working
  • Technology isn’t working
  • n the 1970s the blistering growth after the second world war vanished in both Europe and America. In the early 1990s Japan joined the slump, entering a prolonged period of economic stagnation.
  • ...12 more annotations...
  • Between 1991 and 2012 the average annual increase in real wages in Britain was 1.5% and in America 1%, according to the Organisation for Economic Co-operation and Development, a club of mostly rich countries.
  • Real wage growth in Germany from 1992 to 2012 was just 0.6%; Italy and Japan saw hardly any increase at all.
  • And the dramatic dip in productivity growth after 2000 seems to have coincided with an apparent acceleration in technological advances as the web and smartphones spread everywhere and machine intelligence and robotics made rapid progress.
  • A second explanation for the Solow paradox, put forward by Erik Brynjolfsson and Andrew McAfee (as well as plenty of techno-optimists in Silicon Valley), is that technological advances increase productivity only after a long lag.
  • John Fernald, an economist at the Federal Reserve Bank of San Francisco and perhaps the foremost authority on American productivity figures, earlier this year published a study of productivity growth over the past decade. He found that its slowness had nothing to do with the housing boom and bust, the financial crisis or the recession. Instead, it was concentrated in ICT industries and those that use ICT intensively.
  • Once an online course has been developed, it can be offered to unlimited numbers of extra students at little extra cost.
  • For example, new techniques and technologies in medical care appear to be slowing the rise in health-care costs in America. Machine intelligence could aid diagnosis, allowing a given doctor or nurse to diagnose more patients more effectively at lower cost. The use of mobile technology to monitor chronically ill patients at home could also produce huge savings.
  • Health care and education are expensive, in large part, because expansion involves putting up new buildings and filling them with costly employees. Rising productivity in those sectors would probably cut employment.
  • The integration of large emerging markets into the global economy added a large pool of relatively low-skilled labour which many workers in rich countries had to compete with. That meant firms were able to keep workers’ pay low.
  • By creating a labour glut, new technologies have trapped rich economies in a cycle of self-limiting productivity growth.
  • Productivity growth has always meant cutting down on labour. In 1900 some 40% of Americans worked in agriculture, and just over 40% of the typical household budget was spent on food. Over the next century automation reduced agricultural employment in most rich countries to below 5%,
  • A new paper by Peter Cappelli, of the University of Pennsylvania, concludes that in recent years over-education has been a consistent problem in most developed economies, which do not produce enough suitable jobs to absorb the growing number of college-educated workers.
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