Much to the dismay of many people of Scottish ancestry around the world, a new nation was not created last Thursday. The people of Scotland, which is to say those who would have to live with the consequences of any action, narrowly decided to stay with the UK. In the lead-up to the election, when it looked like it might go the other way, the leaders of all the parties of the UK promised that Scotland would have more power to decide its own fate and that seemed to be good enough.
But a not-independent Scotland is just one of the many complications found within the UK and in many nations around the world. Simultaneously, an agreement was made in Ukraine to give more autonomy to the Russian speaking regions in an as yet undescribed power sharing arrangement if only everyone would stop shooting. And in Iraq that central government appears powerless as the autonomous Kurdish region uses its own army, the Peshmerga, to battle ISIL with help from many nations.
What, indeed, is a nation? The short answer is: whatever it needs to be.
When looking for economic data that tells us all how we’re all doin’, sometimes you just can’t beat the classics.
Long ago, the US was a nation that made stuff. Economic expansions or contractions could be measured by industrial output with a rather high degree of precision. Lower output meant that people were losing their jobs and the nation was slowing down.
The industrial capacity figure hasn’t been used much lately because we don’t rely on manufacturing for the bulk of the jobs anymore. At about 12M jobs, it’s just over 10% of all employment. But it still means a lot, and the results are encouraging.
A new international war has started in the Middle East as Syria continues to burn. Russia is slowly being strangled by international sanctions that are now cutting off their ability to produce and sell oil. With all of this happening in the world, something remarkable is happening to the price of oil – it’s dropping.
How could this happen? The short answer is that the US continues to move towards energy independence, producing its own oil while consumption is stagnant. It’s a good thing, all in all, but it means that the environmental degradation that was once found only in distant lands, and conveniently ignored by nearly everyone in the US, is now upon us. What can we do?
There’s a decent chance that the free market will actually sort it all out – once it’s been properly regulated to account for the environmental damage, that is.
Another year, another war in Iraq. Like the sunspot cycle, they seem to come ‘round about every 11 years. But this is not a natural cycle – this is caused by the instability built into a planet that is closer than ever before. Artificial “nations” created by outside powers with inherent instability, such as Iraq, are a burden on everyone.
There’s little point going into the strange history of Iraq and other nations like them because as it currently stands there are few ways to fix the problem. The climate of constant war makes redrawing boundaries in the Middle East (or, for that matter, in Ukraine) hard to imagine without making the situation worse in the short run. It usually takes years of peace and stability to contemplate a peaceful transition, such as the one that Scotland will vote on next week.
One question we can contemplate is why the burden always falls on the US. The short answer to that question is that we are by far the dominant military on the planet. But why?
This last week, the yield on a 2-year Irish Government bond turned negative, garnering a rate of -0.007%. That means that if you want to loan the Irish government some of your money, you have to pay for the privilege of doing so. Negative interest rates are not exactly new, but in the case of Ireland it’s particularly bizarre. Just three years ago, amid a potential default crisis, the same bonds were yielding 23%.
What changed? The short answer is no one knows. Shiela Kinsella, an Economics Professor at the University of Limerick, was exasperated. “The market is still in an irrational stage. It’s telling me that markets are lumping the same countries in again, and it’s just proof that nothing is ever learnt.”
Why did this happen? Investors in the Eurozone still can’t find anything to invest in as the European Central Bank (ECB) started a weak bond-buying program to goose investment. It’s a last ditch attempt to goose the economy and produce much needed jobs. But all it has created so far is a Bizarro World in finance.
Is the US ready for high speed rail? If The NorthEast Maglev (TNEM) gets its way, a solid demonstration project between Baltimore and Washington might be built sometime in the future for an undisclosed amount of money. The project is hardly scoped out yet, but the promise of being able to rocket between the cities at over 300 mph (500 kph) has attracted attention – and $5B in potential backing from the Central Japan Railway, the Bank of Japan, and the Japanese government. It’s a good downpayment on the guesstimated $10-15B the line will take.
How serious is this proposal? The government of Japan would love to start exporting some of its best technology, and it’s hard to pass up that kind of dough. And if TNEM gets their way, it’ll go on from there on a 240 mile line from Washington to New York, making the trip in just one hour. How much will that cost? The guesstimate of $100B is such a round number that you know it’s vague. But it’s a tantalizing worth investigating for a lot of reasons – and the money would come from private investors, not any government.
Russian troops have invaded Ukraine, this is not in question. Whether or not they have the official sanction of Russia itself or are merely “on vacation” fighting for a good cause is up to the reader to decide. The main contention so far is what exactly Putin is doing by playing a very silly game by trying to invade without invading, telling the world a fairly transparent fairy tale that no one believes
I think that the key question has to lie in Putin’s head, which is to say how he is responding to the forces on him. That requires a lot of speculation in the absence of any good information. Good reporters (and bloggers) don’t go deep into speculation, so if you don’t want to read this I’ll understand. But it seems that Putin is eyeballs deep into a war he can’t lose but also can’t fight.