Tag: Business and finance
Looking good can be extremely bad for the planet
STYLE is supposedly for ever. But the garments needed to conjure up eternal chic are spending less time on shop racks and in homes than ever before. Global clothing production doubled between 2000 and 2014, as apparel firms’ operations became more efficient, their production cycles became quicker and fashionistas got more for their money. From just a few collections a year, fast-fashion brands such as Zara, owned by Spain’s Inditex, now offer more than 20; Sweden’s H&M manages up to 16.
Dressing to impress has an environmental cost as well as a financial one. From the pesticides poured on cotton fields to the washes in which denim is dunked, making 1kg of fabric generates 23kg of greenhouse gases on average, according to estimates by McKinsey, a consultancy. Because consumers keep almost every type of apparel only half as long as they did 15 years ago, these inputs go to waste faster than ever before. The latest worry is shoppers in the developing world, who have yet to buy as many clothes as rich-world consumers but are quickly catching up.
Most apparel companies know that sooner or later, consumers’ awareness of this subject will rise. That is a…Continue reading
America may demand the right to peruse visitors’ mobile phones on arrival
THE effect that Donald Trump is having on American tourism seems pretty clear. Data from online travel agents, which analyse customers’ searches and are thus privy to the most timely information on travel trends, are unanimous in the bleakness of their assessments. Expedia, Cheapflights and Kayak are just some of the sites reporting that interest in travelling to the United States has fallen since Mr Trump’s inauguration and his attempted travel bans and drawbridge-up rhetoric. (The strong dollar hasn’t helped.) Economic forecasters are pessimistic, too. Oxford Economics, for example, reckons that as many as 6.7m fewer tourists will visit America this year; a fall of 8% compared to last year.
Those working in the American tourism industry are desperate to see the drip-drip of…Continue reading
Podcast: The robot era is dawning
As robots grow more nimble, humans look increasingly vulnerable. Are the machines poised to take over? Also: now that Article 50 has been triggered, is Ireland’s economy set to be damaged by Brexit? And despite Japan’s workforce growing by more than two million, wage gains aren’t enough to hit an inflation target of 2%. Why is this? Philip Coggan sits in for Simon Long.
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America’s disproportionate weight in global stockmarket indices
THE aims of a stockmarket index are threefold. First, to reflect what is actually going on in the market; second, to create a benchmark against which professional fund managers can be judged; and third, to allow investors to assemble well-diversified, low-cost portfolios. On all three counts, there are reasons to worry about the MSCI All-World Country Index, one of the most widely used gauges of the global stockmarket.
That is because the American market has a weighting of 54% in the index, as high as it has ever been (it reached the same level in 2002). In other words, anyone using the index to monitor the market is seeing a picture heavily distorted by Wall Street. The relative performance of international fund managers against the index will largely depend on how much exposure to America they are willing to take on. And anyone buying a tracking fund is making a big bet on the American market. Things are even worse if investors track the MSCI World Index, which covers only developed markets. In that benchmark, America’s weight is 60.5%.
Should America break up Washington?
CONCERNS about regional inequality and frustration with elites are contributing to interest in an intriguing idea: reining in the economic and political power of Washington by dispersing government agencies more widely. Tyler Cowen muses on the subject here. Matthew Yglesias makes the case for such a policy here. Ross Douthat makes a somewhat different but related argument here. So: is this a good idea? It certainly isn’t a terrible idea, but the more you dig into the matter the less it looks like an out-and-out good one. (Some disclosure: I work in Washington now, and once, long ago I was a federal government employee at the Bureau of Labor Statistics.)
It might be useful to begin with a little perspective. Funnily enough, Washington was a purpose-built capital, located outside the major cities of the day, partly in order to prevent a Philadelphia or New York from becoming dominant. America’s metropolitan geography remains multipolar in a…Continue reading
Qatar Airways thinks it has found a way around America’s laptop ban
THE ban on taking large electronic devices into plane cabins, imposed on March 20th by United States on flights from ten Middle Eastern airports, is a particular headache for the four “superconnector” airlines. Etihad, Emirates, Qatar Airways and Turkish Airlines, like many carriers, depend on premium travellers for their profits. Those in business-class cabins like to get work done on long journeys; that is difficult without a computer. But, as their epithet implies, these airlines are also unusually dependent on on connecting traffic. By one estimate, 60% of Emirates flyers use Dubai as a layover on the way to somewhere else. As of last week, travellers heading, for example, from New York to Mumbai, must now choose between a superconnecter flight on which they will be without their tablets and laptops, or connecting through Europe on a European or United States airline which is not affected by the ban. (Or, perhaps, an Emirates flight connecting in Milan, which would also be exempt.) It is a fair bet that many are choosing to avoid the Middle Eastern hubs.
It felt a…Continue reading
Democrats should be more comfortable discussing economic growth
STEVE BANNON is right. This week, in a New York Times Magazine piece otherwise dedicated to the President’s dance with Congress, he offered this:
I think the Democrats are fundamentally afflicted with the inability to discuss and have an adult conversation about economics and jobs, because they’re too consumed by identity politics. And then the Republicans, it’s all this theoretical Cato Institute, Austrian economics, limited government—which just doesn’t have any depth to it. They’re not living in the real world.
Lose the bit about identity politics, and you have a clear summation of American macroeconomics. Republicans are lost in theory, unburdened by empirical evidence. Democrats don’t seem to have much of a theory at all. And as Republicans dust themselves off and turn to rewriting America’s tax code, Democrats could use a working theory of economic growth. Judging from last year’s campaign, they aren’t ready to commit to one. Should they develop an interest, however, there are several to hand.
Grossly simplified, there are…Continue reading
Westinghouse files for bankruptcy
Who will see it through?THERE are few more storied innovators than Westinghouse. Founded in 1886, it is the company that brought electricity to the masses. When you plug in your toaster or flip your light switch, you have George Westinghouse’s alternating-current system to thank. In the 21st century the firm seemed poised to unleash a new revolution in nuclear energy. Its AP1000 pressurised water reactor was supposed to make nuclear plants simpler and cheaper to build, helping to jump-start projects in America and around the world.
But those nuclear ambitions have gone awry. On March 29th the firm filed for Chapter 11 bankruptcy in New York. Its troubles have been a running sore at Toshiba, its Japanese parent, a headache for its creditors, and the latest bad tidings for a nuclear industry beset with problems.
Toshiba was triumphant in 2006 when it paid $5.4bn for Westinghouse after a bidding war, beating out General Electric (founded by George Westinghouse’s archrival, Thomas Edison). Around the same time, Southern and SCANA, two big utilities based in Georgia and South Carolina, respectively, chose the AP1000 design for new nuclear…Continue reading
Luxury-goods companies in the digital era
IT TAKES at least a month to wash, comb, spin and otherwise prepare fine mohair to become cloth that is stitched into suits by Ermenegildo Zegna, a 107-year-old Italian brand. In Trivero, an Alpine village west of Milan, 150 artisans in an elegant factory work at carding, dying, weaving and warping. As looms rattle, bespectacled women stretch cloth over illuminated screens and check for imperfections. Others use a rack crammed with dried Spanish thistles to remove excess hair from fabric.
Zegna, run by its fourth generation of family owners, is distinctive in many ways. Big corporate successes are rare in Italy, which tends to nurture smaller firms. Sales from Zegna’s 500-odd shops worldwide, plus earnings from selling to other producers, amount to an annual €1.2bn ($1.3bn) or so. It controls its entire supply chain, which is unusual even in an industry that cherishes raw materials. Three years ago it bought a 6,300-acre farm with 10,000 sheep in Australia. A spokeswoman brags that vertical integration at Zegna runs “from sheep to shop”.
The company is also unusual because it has stayed independent of the few swaggering giants that bestride the luxury-goods…Continue reading
The nominee to run America’s drug regulator is a sound choice
WHEN the names of potential candidates for the new head of America’s regulatory agency for drugs, the Food and Drug Administration (FDA), were first circulated, you could almost hear the sound of jaws hitting desks throughout the pharmaceuticals industry. One contender was Jim O’Neill, head of Mithril Capital Management, an investment firm, who is such a libertarian that he doesn’t think the FDA should insist that medicines have to work. Another was Balaji Srinivasan, an entrepreneur from Silicon Valley, who thought roughly the same.
Removing such a core regulation might seem appealing to business. In fact, the idea of not approving drugs for efficacy is as unwelcome to the industry as it is to doctors and patients. It spends billions of dollars every year on research to deliver better treatments; this would be impossible to justify if drugs had merely to be safe. Patients, meanwhile, would face the awful prospect of having to identify which life-saving medications worked.
So, when the name of the FDA nominee was announced in March, there was widespread relief. Scott Gottlieb (pictured) a resident fellow at the American Enterprise Institute, a conservative…Continue reading