Britain's GDP fell again in the fourth quarter of 2012, raising the specter of a triple-dip recession
Britain's economy is a riddle wrapped in a mystery inside an enigma, but this much is clear: it's a disaster. After its Olympics-fueled growth, such as it was, lifted it out of recession in the third quarter of 2012, Britain might be headed back after its economy fell 0.3 percent at the end of the year -- the fourth time in five quarters its GDP has contracted. Britain's now verging on a triple-dip recession, which is just another way of saying a depression.
But it's not so simple.
Britain is stuck in its worst GDP slump in a century, but not so for jobs. As you can see in the chart below from Jonathan Portes, the director of the National Institute of Economic and Social Research, Britain's stagnating economy has left it in worse shape at this point of its recovery than it was during the Great Depression. GDP is still more than 3 percent below its 2008 peak, and it hasn't done anything to catchup in years. At this pace, there will be no recovery in our time, or any other time.
It's no accident this era of zero growth has coincided with an era of austerity. Despite entering office with borrowing costs at 50-year lows, the Cameron coalition decided the government deficit, and not the growth deficit, was the chief threat to future prosperity. It raised taxes and cut the growth of spending, but did so with little regard for what constituted smart cuts and what did not. As Portes points out, public net investment -- things like roads and bridges and schools, and everything else the economy needs to grow -- has fallen by half the past three years, and is set to fall even further the next two. It's the economic equivalent of shooting yourself in both feet, just in case shooting yourself in one doesn't completely cripple you. Austerity has driven down Britain's borrowing costs even further, but that's been due to investors losing faith in its recovery, rather than having more faith in its public finances. Indeed, weak growth has kept deficits from coming down all that much, despite the higher taxes and slower spending. In other words, it's economic pain for no fiscal gain.
But the story of Britain's flatlining growth isn't just one of ignoring Keynes' maxim that the boom, not the slump, is the time for austerity. It's more like an economic whodunit. The euro crisis -- yes, we're rounding up the usual suspects -- has kept Britain from exporting its way out of trouble, as its largest trading partner, the euro zone, has been too busy flirting with breakup and recession to buy as much stuff as it otherwise would. It hasn't helped that some of Britain's big productivity industries like oil and finance have gone into what might be the start of long-term declines; the North Sea oil and gas fields and the City of London have both shed output and jobs. But this downtrend in Britain's top industries doesn't nearly explain the real puzzle of its economy -- the collapse in productivity.
In other words, the disconnect between GDP and jobs. While the economy is, at best, stuck in neutral, Britain has been adding jobs at a better-than-decent clip the past year or so. Unemployment recently reached an 18-month low, and, in absolute terms, more people have a job today than in 2008 (though underemployment is a problem). This combination of zero GDP growth with positive job growth means Britain is working more to do less. Richard Davies of The Economist calculates Britain is 12 percent less productive today than it was at similar points in other recoveries -- and the decline of the North Sea fields and the City probably only explain 1-2 percentage points of this gap. That leaves a pair of, hardly mutually exclusive, possibilities: either Britain has some serious GDP mismeasurement problems or some serious economic problems, full stop. The former is usually the case any time there's an apparent disparity between GDP and jobs data, but the disparity is so large and so persistent in this case that it seems something else is going on. Davies hypothesizes zombie firms are starving new, more productive firms, for credit, which may well be true, but, again, doesn't seem to explain the full scope of the disaster.
The good news, if there is any, is Britain just poached Mark Carney, one of the top central bankers in the world, to run the Bank of England, and he seems determined to do more than his predecessor to get the country out of its economic rut. And that's it. There is no other good news. Thank goodness for stiff upper lips.
Five days after Hurricane Maria made landfall in Puerto Rico, its devastating impact is becoming clearer.
Five days after Hurricane Maria made landfall in Puerto Rico, its devastating impact is becoming clearer. Most of the U.S. territory currently has no electricity or running water, fewer than 250 of the island’s 1,600 cellphone towers are operational, and damaged ports, roads, and airports are slowing the arrival and transport of aid. Communication has been severely limited and some remote towns are only now being contacted. Jenniffer Gonzalez, the Resident Commissioner of Puerto Rico, told the Associated Press that Hurricane Maria has set the island back decades.
The greatest threats to free speech in America come from the state, not from activists on college campuses.
The American left is waging war on free speech. That’s the consensus from center-left to far right; even Nazis and white supremacists seek to wave the First Amendment like a bloody shirt. But the greatest contemporary threat to free speech comes not from antifa radicals or campus leftists, but from a president prepared to use the power and authority of government to chill or suppress controversial speech, and the political movement that put him in office, and now applauds and extends his efforts.
The most frequently cited examples of the left-wing war on free speech are the protests against right-wing speakers that occur on elite college campuses, some of which have turned violent.New York’s Jonathan Chait has described the protests as a “war on the liberal mind” and the “manifestation of a serious ideological challenge to liberalism—less serious than the threat from the right, but equally necessary to defeat.” Most right-wing critiques fail to make such ideological distinctions, and are far more apocalyptic—some have unironically proposed state laws that define how universities are and are not allowed to govern themselves in the name of defending free speech.
How could six senior presidential aides mimic the strategy for which Trump lacerated Hillary Clinton? Only if they believe they are as immune to the usual rules as he is.
Updated on September 25 at 8:20 p.m.
Late Sunday night, Josh Dawsey of Politico dropped a story that, in any other administration, would have been cause for concern but hardly surprise.
“Presidential son-in-law and senior adviser Jared Kushner has corresponded with other administration officials about White House matters through a private email account set up during the transition last December,” Dawsey wrote. “Kushner and his wife, Ivanka Trump, set up their private family domain late last year before moving to Washington from New York, according to people with knowledge of events as well as publicly available internet registration records.”
One hundred years ago, a retail giant that shipped millions of products by mail moved swiftly into the brick-and-mortar business, changing it forever. Is that happening again?
Amazon comes to conquer brick-and-mortar retail, not to bury it. In the last two years, the company has opened 11 physical bookstores. This summer, it bought Whole Foods and its 400 grocery locations. And last week, the company announced a partnership with Kohl’s to allow returns at the physical retailer’s stores.
Why is Amazon looking more and more like an old-fashioned retailer? The company’s do-it-all corporate strategy adheres to a familiar playbook—that of Sears, Roebuck & Company. Sears might seem like a zombie today, but it’s easy to forget how transformative the company was exactly 100 years ago, when it, too, was capitalizing on a mail-to-consumer business to establish a physical retail presence.
A small group of programmers wants to change how we code—before catastrophe strikes.
There were six hours during the night of April 10, 2014, when the entire population of Washington State had no 911 service. People who called for help got a busy signal. One Seattle woman dialed 911 at least 37 times while a stranger was trying to break into her house. When he finally crawled into her living room through a window, she picked up a kitchen knife. The man fled.
The 911 outage, at the time the largest ever reported, was traced to software running on a server in Englewood, Colorado. Operated by a systems provider named Intrado, the server kept a running counter of how many calls it had routed to 911 dispatchers around the country. Intrado programmers had set a threshold for how high the counter could go. They picked a number in the millions.
Senators Lindsey Graham and Bill Cassidy sparred with Bernie Sanders and Amy Klobuchar on CNN hours after their bill dismantling Obamacare appeared to collapse.
Ordinarily, you debate to stave off defeat. But for Senators Lindsey Graham and Bill Cassidy on Monday night, the defeat came first.
By the time the two GOP senators stepped on CNN’s stage Monday night for a prime-time debate over their health-care proposal, they knew they had already lost.
A few hours earlier, Senator Susan Collins became the third Republican to formally reject the pair’s legislation to repeal and replace the Affordable Care Act, effectively killing its chances for passage through the Senate this week. Graham and Cassidy had hoped to use the forum to make a closing argument for their plan, and to line it up against Senator Bernie Sanders and his call for a single-payer, “Medicare-for-All” health-care system. Instead, the two senators found themselves defending a proposal that was no less hypothetical—and probably much less popular—than Sanders’s supposed liberal fantasy.
A growing body of research debunks the idea that school quality is the main determinant of economic mobility.
One of the most commonly taught stories American schoolchildren learn is that of Ragged Dick, Horatio Alger’s 19th-century tale of a poor, ambitious teenaged boy in New York City who works hard and eventually secures himself a respectable, middle-class life. This “rags to riches” tale embodies one of America’s most sacred narratives: that no matter who you are, what your parents do, or where you grow up, with enough education and hard work, you too can rise the economic ladder.
A body of research has since emerged to challenge this national story, casting the United States not as a meritocracy but as a country where castes are reinforced by factors like the race of one’s childhood neighbors and how unequally income is distributed throughout society. One such study was published in 2014, by a team of economists led by Stanford’s Raj Chetty. After analyzing federal income tax records for millions of Americans, and studying, for the first time, the direct relationship between a child’s earnings and that of their parents, they determined that the chances of a child growing up at the bottom of the national income distribution to ever one day reach the top actually varies greatly by geography. For example, they found that a poor child raised in San Jose, or Salt Lake City, has a much greater chance of reaching the top than a poor child raised in Baltimore, or Charlotte. They couldn’t say exactly why, but they concluded that five correlated factors—segregation, family structure, income inequality, local school quality, and social capital—were likely to make a difference. Their conclusion: America is land of opportunity for some. For others, much less so.
The foundation of Donald Trump’s presidency is the negation of Barack Obama’s legacy.
It is insufficient to statethe obvious of Donald Trump: that he is a white man who would not be president were it not for this fact. With one immediate exception, Trump’s predecessors made their way to high office through the passive power of whiteness—that bloody heirloom which cannot ensure mastery of all events but can conjure a tailwind for most of them. Land theft and human plunder cleared the grounds for Trump’s forefathers and barred others from it. Once upon the field, these men became soldiers, statesmen, and scholars; held court in Paris; presided at Princeton; advanced into the Wilderness and then into the White House. Their individual triumphs made this exclusive party seem above America’s founding sins, and it was forgotten that the former was in fact bound to the latter, that all their victories had transpired on cleared grounds. No such elegant detachment can be attributed to Donald Trump—a president who, more than any other, has made the awful inheritance explicit.
More comfortable online than out partying, post-Millennials are safer, physically, than adolescents have ever been. But they’re on the brink of a mental-health crisis.
One day last summer, around noon, I called Athena, a 13-year-old who lives in Houston, Texas. She answered her phone—she’s had an iPhone since she was 11—sounding as if she’d just woken up. We chatted about her favorite songs and TV shows, and I asked her what she likes to do with her friends. “We go to the mall,” she said. “Do your parents drop you off?,” I asked, recalling my own middle-school days, in the 1980s, when I’d enjoy a few parent-free hours shopping with my friends. “No—I go with my family,” she replied. “We’ll go with my mom and brothers and walk a little behind them. I just have to tell my mom where we’re going. I have to check in every hour or every 30 minutes.”
Those mall trips are infrequent—about once a month. More often, Athena and her friends spend time together on their phones, unchaperoned. Unlike the teens of my generation, who might have spent an evening tying up the family landline with gossip, they talk on Snapchat, the smartphone app that allows users to send pictures and videos that quickly disappear. They make sure to keep up their Snapstreaks, which show how many days in a row they have Snapchatted with each other. Sometimes they save screenshots of particularly ridiculous pictures of friends. “It’s good blackmail,” Athena said. (Because she’s a minor, I’m not using her real name.) She told me she’d spent most of the summer hanging out alone in her room with her phone. That’s just the way her generation is, she said. “We didn’t have a choice to know any life without iPads or iPhones. I think we like our phones more than we like actual people.”
His delicate new song makes the problems of fame shockingly relatable.
If ever there were a time when the world could use more songs about the stresses of being rich and famous, the era of Drake and Taylor Swift 2.0 would not seem to be it. And yet even the most played-out topic can be made interesting again through talent and craftsmanship, as Chance the Rapper reminded America Monday night on The Late Show With Stephen Colbert.
The 24-year-old Chicagoan told Colbert, with whom he recently collaborated on the politically-charged opening medley for the Emmys, that the song he was about to premiere was written entirely in the last few days. On one hand, a quick turnaround might explain the spare sound and straightforward structure of the untitled track. But on the other, it’s mindbendingly impressive if the tune’s bracing poetry and melody wereindeed just tossed-off.