Trump May Kill the Global Recovery

In a sharp departure from this time last year, the global economy is now being buffeted by growing concerns over US President Donald Trump’s trade war, fragile emerging markets, a slowdown in Europe, and other risks. It is safe to say that the period of low volatility and synchronized global growth is behind us.

.. In 2017, the world economy was undergoing a synchronized expansion, with growth accelerating in both advanced economies and emerging markets. Moreover, despite stronger growth, inflation was tame – if not falling – even in economies like the United States, where goods and labor markets were tightening.
.. Stronger growth with inflation still below target allowed unconventional monetary policies either to remain in full force, as in the eurozone and Japan, or to be rolled back very gradually
.. Markets gave US President Donald Trump the benefit of the doubt during his first year in office; and investors celebrated his tax cuts and deregulatory policies. Many commentators even argued that the decade of the “new mediocre” and “secular stagnation” was giving way to a new “goldilocks” phase of steady, stronger growth.
.. Though the world economy is still experiencing a lukewarm expansion, growth is no longer synchronized. Economic growth in the eurozone, the United Kingdom, Japan, and a number of fragile emerging markets is slowing.
.. while the US and Chinese economies are still expanding, the former is being driven by unsustainable fiscal stimulus.
..with the US economy near full employment, fiscal-stimulus policies, together with rising oil and commodity prices, are stoking domestic inflation.
.. the US Federal Reserve must raise interest rates faster than expected, while also unwinding its balance sheet.
.. the prospect of higher inflation has led even the European Central Bank to consider gradually ending unconventional monetary policies, implying less monetary accommodation at the global level. The combination of a stronger dollar, higher interest rates, and less liquidity does not bode well for emerging markets.
..  Despite strong corporate earnings – which have been goosed by the US tax cuts – US and global equity markets have drifted sideways in recent months.
.. The danger now is that a negative feedback loop between economies and markets will take hold. The slowdown in some economies could lead to even tighter financial conditions in equity, bond, and credit markets, which could further limit growth.
.. Since 2010, economic slowdowns, risk-off episodes, and market corrections have heightened the risks of stag-deflation (slow growth and low inflation); but major central banks came to the rescue with unconventional monetary policies as both growth and inflation were falling.
.. These risks include the negative supply shock that could come from a trade war; higher oil prices, owing to politically motivated supply constraints; and inflationary domestic policies in the US.
.. this time the Fed and other central banks are starting or continuing to tighten monetary policies, and, with inflation rising, cannot come to the markets’ rescue this time.
Another big difference in 2018 is that Trump’s policies are creating further uncertainty. In addition to
  • launching a trade war, Trump is also
  • actively undermining the global economic and geostrategic order that the US created after World War II.

.. the Trump administration’s modest growth-boosting policies are already behind us, the effects of policies that could hamper growth have yet to be fully felt. Trump’s favored fiscal and trade policies will crowd out private investment, reduce foreign direct investment in the US, and produce larger external deficits.

  • His draconian  will diminish the supply of labor needed to support an aging society.
  • His environmental policies will make it harder for the US to compete in the green economy of the future.
  • And his bullying of the private sector will make firms hesitant to hire or invest in the US.

.. Even if the US economy exceeds potential growth over the next year, the effects of fiscal stimulus will fade by the second half of 2019, and the Fed will overshoot its long-term equilibrium policy rate as it tries to control inflation; thus,

achieving a soft landing will become harder.

.. By then, and with protectionism rising, frothy global markets will probably have become even bumpier, owing to the serious risk of a growth stall – or even a downturn – in 2020.

.. With the era of low volatility now behind us, it would seem that the current risk-off era is here to stay.

Older drivers: Insurance Institute for Highway Safety

In 2015, motor vehicle crashes accounted for less than 1 percent of fatalities among people 70 and older. 1People ages 70 and older are less likely to be licensed to drive compared with younger people, and drivers 70 and older also drive fewer miles. However, older drivers are keeping their licenses longer and driving more miles than in the past.

Per mile traveled, fatal crash rates increase noticeably starting at age 70-74 and are highest among drivers 85 and older. The increased fatal crash risk among older drivers is largely due to their increased susceptibility to injury, particularly chest injuries, and medical complications, rather than an increased tendency to get into crashes. 2

Babushkas for Putin

Russian women, who outlive men by more than a decade on average,
are among the president’s biggest fans, especially older women.

“Putin is respected by everyone, so men should pay attention to how and what he does,” Anna Veresova, 75, a retired teacher, told me. “In theory, he is the perfect man to have around.”

 61 percent of his votescame from women and just 39 percent from men. The gender gap has persisted:

.. For the election on Sunday, 69.2 percent of women said they planned to vote for Putin, while only 57.5 percent of men did

.. Most said they were doing so in part because he was a good man — strong, healthy and active.

.. Ms. Veresova and the other women I photographed live in a world of very few men. Russian women outlive Russian men by over a decade

.. women are expected to live until 76, and men to just 65.

.. By the time women reach retirement age, their husbands have often died, and their days consist of taking care of grandchildren, spending time with other older women and watching television.

.. On the one hand, no one I spoke with seemed to feel that they were worse off, exactly: Even before their husbands died, the women were already doing all the household chores. Most saw retirement as a chance to relax, to try things they’d always wanted to do. I met women who became professional divers, started horseback riding, were learning to use smartphones and were singing in choirs. One started a business.

.. And yet their emotional response to Mr. Putin — the only man their age who is a presence in their lives — seems to speak to both the holes and the scars that Russian men, in their absence, have left. Mr. Putin is not lazy, these women say. He doesn’t drink. He’s calm, sober, even charming.

.. He looked into the camera, praised Russia’s women who “take care of our homes and children every day.” He recited poetry. The babushkas alone in their homes watched.