Trumponomics

Europe might just avoid what had been a widely predicted, Kremlin-induced energy crisis this winter, thanks to a surprisingly large stock of natural gas. But are the continent’s efforts to conserve giving a bah humbug to the holidays? Some of Europe’s best-loved Christmas markets are shutting their holiday lights earlier to save electricity or even banning them outright. Even worse, Frankfurt’s famous market is—perish the thought—forgoing heated toilets. In this episode we delve into the energy challenges facing Europe as it works to replace natural gas cut off by Russia. First, reporter Bastian Benrath visits with retailers in Frankfurt’s famed Christmas market, where cutbacks to the city’s large holiday light displays threaten to sap some of its magic and give shoppers less reason to turn out. Other cities like Zurich, Berlin and London also have trimmed holiday display hours or reduced their size, and Paris is turning off the lights at the Eiffel Tower an hour early. What really annoys retailers about this Scrooge-like behavior is that keeping the lights on may expend less energy than powering and heating the markets themselves. As Benrath reports, “in many places, cutting the Christmas lights might actually be more about saving face than actually about saving energy.” In a follow-up discussion, host Stephanie Flanders talks European energy with Maeva Cousin, Bloomberg’s senior euro-area economist, and Bloomberg Opinion columnist Javier Blas. The continent appears ready to confront the winter without mass shortages of gas, thanks in part to forecasts that were overly pessimistic, reduced demand from China and relatively mild European weather, Cousin says. Still, Blas warns that the continent isn’t out of the woods yet. In the short term, a harsher winter than forecast could still lead to blackouts. In the long term, Europe’s high energy costs could persuade companies to relocate to places with cheaper costs, like Texas. Finally, reporter Colum Murphy reflects on the protests over China’s “Covid zero” policy. The plight of residents stuck in lockdowns there has come into stark focus. While images of jubilant crowds at World Cup soccer games flicker on TV screens, “at home in China the people are living in strict conditions,” Murphy says. And for President Xi Jinping, the protests are a huge embarrassment, coming “just after receiving the backing of the whole party.”See omnystudio.com/listener for privacy information.

Back in the days when bands like Led Zeppelin or The Who toured America, teens lined up overnight at ticket booths, hoping for great seats when the window opened. As time went on, the queue moved to the telephone and ultimately online. All the while, one company increased its grip on the live-event market. That company is Ticketmaster.  But that could change thanks to Taylor Swift. Having waited years to see her live again, millions of fans were blocked by a combination of crushing demand, technical breakdown and the ascendance of bot-buyers who funnel tickets to a secondary market that charges sky-high prices. (In the 20th century, they were called scalpers.) As reporter Augusta Saraiva explains, this consumer calamity infuriated Swift’s fans, many of whom are swimming in cash saved up during the pandemic and desperate to spend it, regardless of the shaky economic landscape. This strange state affairs already has a name: “Swiftonomics.” Lawmakers have seized on the popular outrage, uniting with fans against what many have long alleged to be Ticketmaster’s monopoly power. Host Stephanie Flanders speaks with Bloomberg industry analyst Eleanor Tyler about how the debacle, and its growing political exploitation, may be the tipping point for increased antitrust regulation that finally breaks Ticketmaster’s spell over the live event marketplace. Then we dive headlong into a different thicket: how recycling doesn’t work as advertised. Consumers may feel better about mass consumption because there’s a blue bin for everything, but the hard truth is they’re fooling themselves. Most of the plastics, clothes and other items they seek to recycle wind up in landfills or dumped on the developing world. Along the shoreline of Accra, Ghana, what locals call “dead white people’s clothes” can be found in piles up to six feet high.  Reporter Natalie Pearson explains that while fast-fashion chains like H&M and Zara encourage recycling, only a small fraction of their clothes will ever be remade into new items. Bloomberg recently surveyed the problem in Accra, where some 40% of the imported clothes end up as trash, and in the Indian state of Gujarat, where roughly one-third have no use. Finally, Flanders sits down with Bennington College Senior Fellow and visiting faculty member Judith Enck, a US Environmental Protection Agency official during the Obama administration, to discuss just how broken the recycling system is, and how it could be made to work better.See omnystudio.com/listener for privacy information.

Buckle up. Global financial leaders warn that the current era of expensive money is likely to stick around for at least another year, and maybe longer. Easing up on interest rates now would only embed high inflation in people's assumptions, and "that's where it becomes very long-lasting," says former UBS Group AG Chairman Axel Weber. In this special edition from the Bloomberg New Economy Forum in Singapore, three experts in banking and monetary policy share with host Stephanie Flanders why central bankers will be battling inflation in the short term as well as the long. In the US, there's little doubt the Federal Reserve will bump up interest rates again this year, says Gita Gopinath, first deputy managing director of the International Monetary Fund. "For 2023, the question is more about how long are you going to keep these rates at the levels that they've moved them to. And we see a need to keep it at over 4% for all of 2023 to be able to bring inflation down durably,'' Gopinath said. Globally, changes in the supply chain and the transition to a greener economy will drive up energy costs and could lead to structurally higher inflation, said Davide Serra, chief executive of asset manager Algebris Investments. As usual, the poorest are most in jeopardy. Already, about 60% of low-income countries are in high-debt distress, Gopinath said, and while a systemic debt crisis has yet to materialize, she warns these are "very risky times."See omnystudio.com/listener for privacy information.

Investors were floored when China started cracking down on homegrown tech giants like Alibaba Group Holding Ltd. and Tencent Holdings Ltd. in late 2020. They shouldn't have been, argues Kendra Schaefer, an expert on Chinese tech policy with Beijing-based Trivium China. For almost 20 years, the Chinese Communist Party has struggled to understand how its sprawling internet and financial technology industry fit with a socialist market economy, and things finally boiled over two years ago, Schaefer says. Increasingly, Chinese leader Xi Jinping and his party want technology firms to meet "state-directed goals," she says. In this special edition from the Bloomberg New Economy Forum in Singapore, we dive into the complexities of Chinese economic policy. One of the more recent challenges for investors and foreign businesses operating in China is a lack of good intelligence, Schaefer tells host Stephanie Flanders. There's been an "exodus" of Chinese policy experts since the pandemic began, she says, partly because of restrictions on travel inside the country. Schaefer herself recently relocated to the US from Beijing. For now, many foreign companies have been confused by recent aggressive moves out of Beijing and powerless to do much about it. While investors were befuddled by new regulations on China's big tech firms, behind the scenes the country was increasingly uneasy with their power and apparent lack of interest in Communist Party objectives. Instead of "disrupting pizza delivery," tech giants should focus more on developing high-end computer chips, Schaefer says, citing the opinion of party leaders.  Meantime, manufacturers have seen production grind to a halt at the slightest spread of Covid-19. For sure, some companies have talked about mitigating risk and diversifying outside of China. However, leaving altogether is hardly an option for many. Duplicating the country's supply chain would take 10 years, so "people are just doing their best to hedge their bets," Schaefer says.See omnystudio.com/listener for privacy information.

Over the past few decades, the world's economic and political leaders were spoiled by relatively low inflation and minimal borrowing costs, a supercharged economy in China driving demand and generally modest geopolitical tension. But as we know, all of that has changed. With inflation soaring, Chinese growth slowing and Russia waging war on Ukraine, Bloomberg Chief Economist Tom Orlik contends the pillars that long underpinned rising prosperity have shifted. This week, the podcast is coming to you daily from the Bloomberg New Economy Forum in Singapore, where corporate and political leaders are discussing vexing issues like sustainability and the fragile supply chain. In today's edition, Orlik shares with host Stephanie Flanders why the current challenges will play out over years, instead of months. First, even if inflation in the US ticks down to 4% by mid-2023, that will still be "way outside the Federal Reserve's comfort zone," Orlik says. Fed Chairman Jerome Powell has said he'll raise interest rates until inflation subsides, but the risk is he'll ease up if unemployment gets uncomfortably high, Orlik warns, since any improvements in inflation could reverse. The second pillar, China's previous annual growth rate of almost 10%, may settle in closer to 4%, and even that could be too optimistic, says Orlik. Finally, while Chinese leader Xi Jinping and US President Joe Biden lowered the temperature between the two nations on the sidelines of the G20 summit in Bali, left unresolved was the US effort to restrict the sale semiconductors to Chinese customers.  On that note, during one of the forum's sessions Tuesday Senior Minister of Singapore Tharman Shanmugaratnam urged restraint on the part of both the US and China. Tariffs do no one any good, he said, while nations should protect their own national security without trying to limit other nations' economic growth. ``You can't prevent China from emerging as a major player in the global economy and in the global technology space," Shanmugaratnam told Flanders.See omnystudio.com/listener for privacy information.

Having children isn't only expensive, but it also puts a serious dent in your social calendar. Data show many single, childless women in the US are traveling freely and earning more money, including more than their single, childless male counterparts. But when too many people forgo kids, it raises questions about the future workforce and whether it will be able to adequately fund benefits for the elderly. Increasingly, nations are grappling with how to encourage people to have children while enabling them to live their lives as they wish. In this episode, we explore the subject of birth rates from two very different angles, and from opposite ends of the globe. In the US, editor Molly Smith shares the story of Anna Dickson, a 42-year-old from New York who's traveled to Alaska, Switzerland and Anguilla in the past year. It's something she probably couldn't have done if she had kids, she says. Likewise, a growing number of American women are making the same choice to forgo children, and they're reaping economic benefits. As of 2019, single women with no children had an average of $65,000 in wealth, or $8,000 more than similarly situated men, Smith finds. Stephanie later chats about birth rates and government policy with Isabel Sawhill, a senior fellow in economic studies at the Washington-based Brookings Institution. The total cost of raising a child in the US now exceeds $300,000, and that doesn't even include soaring college costs, Sawhill says. Despite those expenses, Congress has been lax in passing legislation to support families, she says. What's more, states with the most restrictive abortion laws also tend to be ones with the weakest social safety nets. In the Philippines, reporter Siegfrid Alegado says there's a different dilemma, given that it has one of the highest birth rates in Southeast Asia. Women there have 2.5 children on average, which is far higher than in many advanced nations. This threatens to exacerbate poverty among the urban poor and in the countryside, Alegado says. And any effort by new President Ferdinand Marcos Jr. to encourage women to use family planning faces a distinct challenge, namely that the largely Catholic country has historically frowned on contraception. See omnystudio.com/listener for privacy information.

Voters in Brazil just took a leftward turn in electing former President Luiz Inacio Lula da Silva, ousting the far-right populist incumbent. Next week, polls show US voters may move in the opposite direction, dealing a blow to Democratic President Joe Biden and his party. This week's Stephanomics episode explores the economic and political winds in two of the world's largest nations. First, Flanders talks US midterms with Anna Wong, Bloomberg's chief US economist, and reporter Nancy Cook. Overall, the US economy is functioning better than it appears to those focusing on inflation, with a strong job market and high balances in bank accounts, Wong says. Yet, high prices have a way of making consumers feel things are gloomier than they are, and that's not good for Democrats. And if Republicans seize control of one or both houses of Congress, Cook notes that will spell the end of meaningful economic legislation from the Biden administration until the end of the term. Next, reporter Maria Eloisa Capurro explains the challenges facing Lula after his defeat of Jair Bolsonaro. Brazil has seen progress this year on inflation, with rates falling from 12% to an expected 5.6% next month. However, economists note the improvement is less impressive than it seems, generated in large part by tax cuts instead of real changes in the economy. Meantime, the new president will be under pressure to deliver on campaign promises to cut taxes for the poor, increase them for the rich and provide a minimum income level for the most needy. In a follow-up discussion, analyst Richard Back of XP Investimentos in Brazil shares with host Stephanie Flanders why he thinks Lula is likely to propose moderate economic policies, despite his progressive reputation. With many acolytes of Bolsonaro still in Brazil's National Congress, Lula knows he cannot be "radical or revengeful," Back says. International investors see the new president as someone who "will make distortions, but he's not the guy that will blow everything."See omnystudio.com/listener for privacy information.

Ahead of next month's crucial US midterm elections, Democrats would usually be counting on the support of labor unions, historically a key constituency for the party. And unions are having a moment in this late pandemic era, with successful organizing drives among Starbucks baristas and Amazon warehouse workers. But despite President Joe Biden's efforts to woo them, many union members are showing a lack of enthusiasm for Democrats that may undercut the party's bid to keep control of both houses of Congress. In this week's episode of the Stephanomics podcast, reporter Katia Dmitrieva provides a dispatch from the traditional union stronghold of Macomb County, Michigan. Biden, who promised to be the most pro-union president ever, has followed through to an extent by regularly touting their importance while creating a labor task force, enacting its proposals and helping secure a deal that may yet avert a damaging railroad strike. Still, some workers in this Detroit-area county say they hoped for more. Democratic efforts to raise the federal minimum wage struck out in a sharply divided Congress, and the PRO Act, legislation to strengthen collective bargaining, has stalled. In the words of one Starbucks barista, who helped unionize her store, the Biden administration's efforts have been "a little bit performative." Then Stephanie speaks to University of California, Berkeley economist Bradford DeLong about his new book, Slouching Towards Utopia. DeLong argues that the 20th century essentially started in 1870, a technological turning point after which production was rapid enough that (at least theoretically) we could bake a large enough economic pie to provide for all. The fact that, in the real world, everyone doesn't have enough is a symptom of our failure to distribute goods and services equitably, DeLong observes. Getting in the way of that goal as well are human foibles including a desire to distribute wealth to their children and a related disdain for inheritance taxes, as well as abhorrence of people who appear to be getting a free ride, he says.See omnystudio.com/listener for privacy information.

As Xi Jinping embarks on his third term as China's president, the world's most populous nation has lost some of the zeal for growth, experimentation and global collaboration that defined it two decades ago. In its place, both Xi and China are focusing on security above everything else, argues Bloomberg Chief Economist Tom Orlik. Today, Beijing is "fighting with the US, fighting against pandemics, trying to secure what it has rather than open up and explore new opportunities," Orlik says. Everyone else is left trying to figure out how to cope with this less-freewheeling China. On this week's Stephanomics, we delve into the present and future of China's relations with the rest of the world following the Chinese Communist Party Congress. First, host Stephanie Flanders talks with Orlik about what a third term of Xi means. It's arguable China isn't in immediate danger of slipping into bad governance, and that--for all the economic turmoil of its "zero Covid" policy--China has done a better job protecting citizens from the coronavirus than the West. In the long term, though, there are dangers. Vital positions in China's central bank or its Ministry of Finance could be staffed by old-guard bureaucrats instead of dynamic reformers, Orlik says. Next, reporter Carolynn Look and editor James Mayger share how Europe's own relationship with China is fraying over reports of Chinese human rights abuses and anger over aggressive trade tactics against Lithuania. Still, for all the handwringing, few European companies show signs of scaling back investments in China. Finally, we reflect on an alarming speech by Scottish-born historian Niall Ferguson at a recent Group of 30 conference. He argues that, while everyone's worried that the 2020s will see a repeat of the inflationary 1970s, we may be fortunate if that's all that happens, given the prospect of economic calamity and global war.See omnystudio.com/listener for privacy information.

If the combination of inflation, Russia’s war on Ukraine and a surging dollar don’t send the world into recession, disastrous policy mistakes surely could. That’s the increasingly gloomy outlook among some who gathered in Washington this week for meetings of the International Monetary Fund and the Institute of International Finance. One pessimist, Martin Wolf, a longtime columnist at the Financial Times, predicts a deep downturn in Europe, one that includes the UK. That country has been dragged down by a leadership team Wolf calls “mad, bad and dangerous.” This week’s episode delves into the dicey economic and political climates enveloping three continents. First, Wolf joins host Stephanie Flanders to discuss Europe at the IIF’s annual membership meeting, where he unloads on UK Prime Minister Liz Truss and Chancellor of the Exchequer Kwasi Kwarteng for their panned efforts to enact tax cuts—which created chaos in the British bond market and sent the pound plunging. Beyond the UK’s borders, natural gas prices that have soared thanks to the Kremlin’s war will pull Europe into contraction, Wolf said. But there’s a brighter scenario, according to Flanders. If it’s a mild winter and natural gas prices fall faster than expected, Europe could end up with too much gas. Then, reporter Maria Eloisa Capurro details how politicians across Latin America are struggling to avoid protests over inflation that’s reached double digits in some nations. Already, people have blocked highways in Panama, rioted in Ecuador and demanded state assistance for the poor in Peru. Finally, we hear from reporter Colum Murphy, who reveals how the Chinese Communist Party tries to keep foreign journalists in the dark. The party holds its congress in Beijing next week for the first time in five years, and Murphy will be looking for the smallest clues that party members still support President Xi Jinping. In a country where few dare speak out, Murphy said reporters glean what they can from the level of applause to Xi’s speech, which lines get the most attention and whether the party gives him another official title to the three he already holds.See omnystudio.com/listener for privacy information.