Trumponomics

While the world's multimillionaires and billionaires (and multibillionaires) ponder inflation and supply shortages in the Swiss Alps, they might get a better view from the dusty landscape of Midland, Texas. Residents of the oil town have lived through inflation around 10% or higher for six months. Even worse, the forces driving up prices there may take months or even years to unwind. Bloomberg reporter Katia Dmitrieva takes listeners to that West Texas boom-and-bust community, home to the highest inflation rate among roughly 400 metropolitan areas tracked by Moody's Analytics. While there, she meets an excavation company owner who's run out of heavy-duty pickup trucks and bulldozers because of supply-chain shortages. Nurses are in such short supply that a local health-care company is paying $280 an hour to get them on contract. And the line of cars waiting at the West Texas Food Bank is longer than it's been since the worst days of the ongoing pandemic. Back in Davos, host Stephanie Flanders chats about deglobalization with economist Richard Baldwin, a professor at Geneva's Graduate Institute of International and Development Studies. He's skeptical that trade actually is fragmenting, arguing that China is the "OPEC of industrial inputs" and that "you can't shut off OPEC." Finally, Flanders talks global commerce at the World Economic Forum with the head of the World Trade Organization and the European Union trade commissioner, as well as officials with the Indian Ministry of Commerce and Industry and US-based logistics firm Flexport.See omnystudio.com/listener for privacy information.

Touted as a potential prime minister not long ago, Chancellor of the Exchequer Rishi Sunak's star has been falling fast of late. Some of the blame can be placed on inflation hovering at a 40-year high and embarrassing headlines about his rich wife's taxes. To resurrect his political career, Sunak may want to help Britons out of their financial funk while persuading them he's not disastrously out of touch.  Sunak tells Stephanie how the UK government is trying to alleviate the pain inflicted by 9% inflation. It's providing about £350 ($431) in energy bill discounts to families while also providing families with about £100 in relief by cutting fuel duties. Still, the efforts may be too little too late, as the average family is seeing a £2,100 increase in its cost of living, according to Bloomberg estimates.  It didn't help matters that Sunak's wife, Akshata Murthy, daughter of an Indian billionaire, was forgoing paying UK taxes on her overseas earnings, which while technically legal is arguably terrible politics. "I do think part of being a good husband is not presuming to dictate to my wife what to do, because she's an independent person and I support her decisions,'' Sunak says.  Also, in a discussion from Bloomberg's New Economy Gateway Latin America forum in Panama City, Panama, United Nations High Commissioner for Human Rights Michelle Bachelet speaks about troubling abuses in Venezuela, El Salvador, Nicaragua and Haiti, as well as efforts to hold Vladimir Putin accountable for war crimes in Ukraine. Finally, she calls the potential end of federal abortion rights in the US a "massive setback for women's rights."See omnystudio.com/listener for privacy information.

The old axiom about the sins of the father being visited upon their children got a shocking rebuttal this week, when Ferdinand Marcos Jr. won a landslide victory in the Philippines's presidential election. Whether Marcos will embrace progressive economic and social values or take after his father, the late dictator and kleptocrat Ferdinand Marcos, is anyone's guess.  Singapore-based Bloomberg Opinion columnist Daniel Moss explains how the younger Marcos deftly sidestepped press interviews and avoided revealing any policy preferences during his campaign. That ambiguity and a strong social media strategy helped to "if not erase, then dilute the memory of his father's period for a huge chunk of voters,'' Moss tells host Stephanie Flanders. Marcos comes into power at a precarious time. The Philippine economy has been far more robust than those of its neighbors, but its embrace of Chinese investment could backfire if China's economy continues to decline. In a second segment, Bloomberg's chief U.S. economist, Anna Wong, explains how China's slowdown might provide at least a little relief to the US's inflation woes. And, Rome-based economy reporter Alessandra Migliaccio takes listeners to bucolic Trevinano, Italy, where local leaders hope an injection of money from the European Union will help turn the hamlet into a center for tourists and artisans and stem years of depopulation.See omnystudio.com/listener for privacy information.

Persistently higher inflation and interest rates are probably in the offing as the world transitions to a greener economy. That’s hardly a selling point for politicians pushing climate-friendly policies, but it’s one they’ll have to cozy up to, says Isabel Schnabel, an executive board member of the European Central Bank. Unfortunately, she adds, before politicians will show enough urgency toward the threat of global warming, “it really seems that bad things have to happen.” On this week’s episode, Schnabel tells Stephanie about the financial consequences of the green transition, as the world moves away from fossil fuels and toward renewable energy. Eventually, she sees energy costs from solar, wind and other renewable sources falling below today’s prices for oil, gas and coal. But in the interim, people can expect traditional energy prices to rise as producers have less and less incentive to invest in fossil fuels. There’s also likely to be a spike in lithium, copper and nickel prices as green energy companies expand, Schnabel says. Finally, the massive investment needed from governments and the private sector to make the transition happen will probably lead to higher interest rates. Still, procrastinating isn’t an option. “Waiting makes everything much worse, much more costly in economic terms,” Schnabel says. In a related report, Bloomberg Opinion columnist Jonathan Levin shares how people in Miami don’t seem to be heeding the looming threat posed by the climate crisis. Despite rising sea levels, the tourist mecca’s real estate market is soaring and buyers seldom see disclosures about future flood risk.See omnystudio.com/listener for privacy information.

It’s hard to imagine a more chaotic world than the one we’re in right now—what with Russia’s war on Ukraine, a Covid-19 pandemic that won’t quit and the lockdowns spreading across China as a result. Now, add to the mix a debt crisis that’s threatening to cripple emerging markets. In the words of a former International Monetary Fund official earlier this month, “We can see this train wreck coming towards us.” Washington-based reporter Eric Martin explores a burgeoning economic crisis in the developing world, one exacerbated by the debt loads assumed by low-income nations as they try to cope with the coronavirus. In Tunis, a mother of two children relates how she comes away empty-handed when out searching for sugar and oil; and in Rio de Janeiro, a market vendor shares his struggle to buy vegetables in a nation with 12% inflation. All told, 60% of low-income countries are in debt distress or at high risk of it, according to the World Bank.  In a follow-up discussion on the crisis, Tim Adams, chief executive of the Institute of International Finance, tells host Stephanie Flanders about the particular risks facing Turkey and Egypt, both heavily dependent on food imports and reeling from fallout from the war. Finally, in a dispatch from France, reporters share why President Emmanuel Macron has precious little time to celebrate his victory over far-right opponent Marine Le Pen.See omnystudio.com/listener for privacy information.

When visiting El Salvador, be sure to bring sunscreen, a long-lens camera to memorialize its bountiful biodiversity and … Bitcoin. But have some U.S. dollars on hand just in case local merchants don’t accept it. On this week’s episode, we dive into the disparate ways in which global leaders approach digital currencies, from the Salvadoran embrace to the tentative exploration by central banks. Tiny El Salvador, population 6.5 million, was the first country to make Bitcoin legal tender, providing a test case for its widespread use. Bloomberg reporter Michael McDonald filed a dispatch from the Central American nation after testing Bitcoin at various restaurants, rental car agencies and street vendors. While some transactions went through just fine, McDonald reports, many Salvadoran merchants have sworn off crypto and are sticking with the country’s other legal tender, the U.S. greenback. Elsewhere, Stephanie finds central bankers and economists to be more circumspect about whether and how to create central bank digital currencies. Such crypto would be regulated by a country’s central bank and theoretically offer price stability. In a discussion sponsored by the Bank for International Settlements, a central banker from Sweden, the chief executive of Santander Bank and a Yale University finance professor weigh in on how to protect consumers while exploring this alternative form of payment.See omnystudio.com/listener for privacy information.

Last year, Larry Summers famously shot down one of the Federal Reserve's favorite buzzwords, "transitory." This year, he's taking aim at "soft landing."The Harvard University professor, former Treasury secretary and paid Bloomberg contributor says a combination of high inflation and low unemployment historically has spawned a recession. So, he's skeptical that the Fed can chart a path that will see the country out of its inflationary funk without causing an economic downturn. Once again, Summers is more pessimistic than his peers, with economists pegging the chance of recession in the next year at just 27.5% in a recent Bloomberg survey.This week, Summers shares his thoughts on why the Fed needs to be more willing to acknowledge what he calls its monetary policy failures. He also comments on why he thinks some recent Biden administration moves to ease prices increases will be ineffectual, and about why he thinks Americans need to sacrifice more in order to punish Russia for the "worst threat in 75 years of naked aggression."See omnystudio.com/listener for privacy information.

We may live in a global economy, but beyond the war in Ukraine, what's front-of-mind for policymakers in the U.S., Europe and China is very different. For China it’s Covid-19; for Europe, it’s the price of energy; and for the U.S., it's inflation. In the first episode of the new season, Stephanie Flanders takes us on a tour of the world economy, opening a window on the top concerns in all three regions. Bloomberg Chief Economist Tom Orlik reveals what’s behind his growth forecasts and how geopolitical tensions may affect globalization. Senior Reporter Shawn Donnan visits Indiana, where the red hot jobs market has laid bare the reality of finding workers for U.S. factories, and the perks needed to get them in the door.In Europe, reporters Carolynn Look and Jana Randow explore how Russia's invasion is overturning long-held views on both economic and foreign policy. And finally, Chief Asia Economics Correspondent Enda Curran turns his gaze to his long-time home of Hong Kong, and questions its future path amid increasingly aggressive interventions by Beijing. See omnystudio.com/listener for privacy information.

With his poll numbers falling, U.S. President Joe Biden is under pressure to do something—anything—to get inflation under control. That’s led his administration to scrutinize the prices you pay at the grocery store, even if some critics argue alleged price-gouging by consumer products giants is a convenient bogeyman.This week’s episode dives into the debate around corporate consolidation and whether it’s giving too much power to those companies. First, Bloomberg editor Molly Smith visits a New Jersey butcher shop where the owner suspects greedy multinational firms are behind the doubling of prices for some cuts of meat. The companies are pleading innocent, blaming instead labor shortages and soaring demand. But Bill Baer, a former antitrust chief at both the Justice Department and the Federal Trade Commission, sides with the butcher. He tells host Stephanie Flanders that some companies in concentrated industries are boosting prices well beyond just covering their extra costs.Finally, Rome-based reporter Alessandra Migliaccio reports on the “Groundhog Day” nature of the Italian government, with its long history of cyclical political crisis, salvation, infighting and crisis again. With Prime Minister Mario Draghi potentially leaving his post to become Italy’s next president, a more ceremonial role, many worry it won’t be long until the cycle begins again. See omnystudio.com/listener for privacy information.

When facing an economic crisis, the Fed's playbook normally skews toward juicing the economy too much rather than too little. After all, in the last go-round in 2007, being too stingy might have helped trigger a depression. Fifteen years later though, America's central bankers face the opposite problem: they need to move fast to cool inflation.That's one of the takeaways from a panel discussion among economists this week, moderated by Stephanie. With U.S. inflation at 7%, the Fed needs to do more than expected, said Bill Dudley, a former president of the New York Federal Reserve Bank and senior adviser to Bloomberg Economics. Dramatically raising interest rates by a half-point in March is worth a look, Dudley said, though unlikely to happen. Meantime, Bloomberg chief U.S. economist Anna Wong explains why U.S. workers, who've gone missing lately, are likely to rejoin the labor force soon. And, chief global economist Tom Orlik shares why President Xi Jinping isn't about to let China's economy implode while he seeks to cement lifetime power. Finally, on a lighter note, reporter David Hood shares everyone's frustrations with the IRS, where customer service is so bad that some tax professionals are hiring robots to wait in line for them.See omnystudio.com/listener for privacy information.