Links for 2nd April, 2019

  1. “The growing use of digital transactions—by consumers, investors, tax payers—as well as the rise of newer forms of data collection has the potential to revolutionise Indian public policy. It is unlikely that these newer forms of data will completely replace the more traditional numbers derived from surveys, national accounts and administrative data. They will more likely complement each other. Government agencies will increase their dependence on big data analytics in the coming years—though the risks to individual privacy should not be underestimated.”
    Niranjan Rajadhakshya on big data, data collection, and how we might reach conclusions on the basis of both over time. The papers he mentions towards the end are also worth reading in their own right!

  2. “According to the Handbook Of Statistics On Indian Economy 2016-17, since the 1991 reforms, the Union government’s revenue has increased 25 times and state government revenues have increased 28 times in nominal terms, and about 4 times in real terms. Economic growth and the consequent increase in revenue also increases the ability of the government to focus on inequality and deal with sector-specific distress.”
    The article is about why economic growth is important for poverty alleviation, an as the article itself says, this is both an obvious point, but also one that bears repetition. But the excerpt above was notable for me: obvious in retrospect, but worth thinking about. Government revenues have gone up significantly since liberalization.

  3. “In 2014, the Delhi High Court found both major parties guilty of violating foreign-exchange laws when they accepted a donation from London-based commodities giant Vedanta Resources Plc.(The suit, filed by a former top bureaucrat and the Association for Democratic Reforms, was against the political entities and Vedanta wasn’t a party. The company didn’t respond to request for comment. The BJP and Congress argued the donations weren’t foreign because the Vedanta units that channelled the money were registered under Indian law.)
    The law passed last year changed the definition of a foreign company all the way back to 1976, effectively nullifying the court’s verdict because Vedanta’s overseas parent owned less than 50 percent of the Indian unit.”
    A somewhat depressing, if all too predictable read about campaign financing in India. There isn’t that much more to say  do read the whole thing, though.

  4. “This jellyfish doesn’t mean to brag, but it’s both beautiful and immortal. If it gets sick, or even stressed, it just reverts into it’s younger self so it can get strong and mature again, bouncing between youth and adulthood forever.”
    It’s impossible to choose one particular thing to highlight – please (for a change!) read every single comment. Nature is an impossibly weird thing, and we know far too little about it.

  5. “One of the great sources of leverage is other people. You can get leverage via directing folks to do things (a superpower whose impact I probably underappreciated when running my business solo). You can also get it by making them more effective at doing things.”
    A very long essay, perhaps rambling in part – but a great read nonetheless. About a whole variety of things, but mostly about productivity, I’d say – the self and the organization, both.

What does economics have to say about (the emergence of) Mr. Trump?

It might seem like a rather weird topic for a blog called Economics for Everybody to think about, but what explains the rise, and the seemingly inevitable ascent to the Presidency of the USA, of Mr. Trump?

This blog post isn’t about the politics of Mr. Trump, endlessly fascinating a topic though it is. It is instead about an attempt at looking at the economic factors that caused this phenomenon to occur at all.

And one cause is related to this:

Of the jobs lost during the recession, about 60 percent of them were in what are called “mid-wage” occupations. What about the jobs added since the end of the recession? Seventy-three percent of them have been in lower-wage occupations, defined as $13.52 an hour or less.

That is pulled from a book written by Tyler Cowen, called Average is Over. Read the whole book, it is worth the price of admission. But the trend that is highlighted in this book is the trend that is causing the rise and rise of Mr. Trump.

One, there are likely to be fewer jobs for all of us in the future. Two, those jobs that do exist are not going to pay very well at the bottom of the pyramid. One shouldn’t describe a book in two sentences, but that’s the quick summary of Average is Over.

Here’s the thing, though: machines don’t vote. People do. And who do you think those seventy-three percent in the block-quote above are going to vote for? For the guy who promises to cure their problems by – well, by curing their problems.

Mr. Trump’s solutions might not win him an academic degree in economics, but that’s not the race he’s running. The race he’s running is being judged by the people who have mostly lost in this era of globalization, and according to some of them, he’s doing just fine. If this “disenchanted” group turns out to be large enough, and motivated enough, Mr. Trump stands a very real chance of becoming President Trump by year end.

The disenchanted workers of the globalization era is not a new idea, far from it. And there is a lot more to the idea than what has been written here. The reason I’m writing about it now, and the reason I’m highlighting this one factor above all else,  is because old theories are beginning to receive fresh validation,  and that makes it an exciting time to be an analyst.

Being a global citizen right now, on the other hand, might well raise the demand for blood pressure pills.