It’s a green economy or nothing. Why primary deficits must come down. The global plusses and minuses of the EV revolution. Troubling psychological and societal traits inherent in all elites. Oh yes we do! Oh no we don’t! Free will: do we have it or not?
QUOTE OF THE WEEK
ARTICLE OF THE WEEK
David Wallace-Wells, The Godfather of Climate Science Turns Up the Heat
(The New York Times, 8 November 2023)
No need to beat around the bush – it is already worse than we think, and it is going to get even worse. James Hansen’s argument: the world’s climate is significantly more sensitive to carbon emissions than scientists have acknowledged. As a result, even those most focused on climate risks have been systematically underestimating how much warming the planet is likely to experience over the next couple of decades. To get a sense of why this is, delve into the “Faustian bargain” between air pollution and carbon emissions, and also read about scientists who disagree with some of Hansen’s conclusions. This makes uncomfortable reading but is key for all those who ponder whether investing in the green economy is a sensible choice. There is no choice! (Gifted article, reads in 8-10 min).
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Olivier Blanchard, If markets are right about long real rates, public debt ratios will increase for some time. We must make sure that they do not explode
(PIIE, 6 November 2023)
Highly relevant and concerning because written by a prominent academic whose research has been used in the past to justify higher public deficits. In this blog, he acknowledges that he didn’t expect the rise in long-term rates and sounds the alarm about rising debt. There is only one sensible solution: the US and other advanced economies should progressively eliminate their primary deficits (the difference between government revenues and spending, excluding interest payments). This will be difficult in Europe, but even more so in the US where the debt ratio could eventually explode (free access, reads in 7-9 min).
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Malcom Scott and others, EV Market’s Surge Toward $57 Trillion Sparks Global Flashpoints
(Bloomberg, 8 November 2023)
An easy and compelling read to understand how the EV (electrical vehicle) revolution is creating geopolitical, environmental and societal tensions around the world. Today, China leads the EV race with a 80% share of the world’s lithium-ion battery capacity and huge leads in most other critical components. But Joe Biden wants to change that (with the IRA)
and the EU is playing catch-up (with its investigation into China’s EV subsidies). Smaller economies are caught in the crossfire – some winning out as Chinese investment floods in, others benefitting from the IRA’s friend-sourcing rules, and many losing ground as their car industries built for a bygone era face obsolescence (gifted article, reads in 7-9 min).
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Geoff Beattie, Red Arrows: narcissism, immorality and lack of empathy are behind the dark psychology that can poison elites
(The Conversation, 6 November 2023)
A recent scandal in the UK prompts a famous psychologist to denounce some of the poisonous traits that affect those who belong to an elite group (any kind of elite). Here are a few in no particular order. Emotional displays and expressions of self-doubt are likely to be discouraged, resulting in very little empathy. The sentiment of feeling special feeds members of an elite with inherent narcissistic tendencies and breeds an in-group mentality that can become “dangerously inwardly focused.” Also, being in an elite group creates a sense of entitlement which can further stoke egos of narcissistic people and affect moral decisions. Read on and be warned! (free access, reads in 5-7 min).
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Dan Faulk, Yes, We Have Free Will. No, We Absolutely Do Not
(Nautilus, 2 November 2023)
For centuries, the issue of free will has been the ultimate philosophical whack-a-mole. A volley of new insights reignites the debate over whether our choices are ever truly our own. Sapolsky, a primatologist and professor of neurology asserts that ‘free will’ doesn’t exist because every act and thought are the product of “cumulative biological and environmental luck.” At the other end of the spectrum, Kevin Mitchell, a neuroscientist, argues that although we’re shaped by our biology, it’s that very biology that made us, over the course of billions of years of evolution, into free agents. In both camps, the arguments are subtle and nuance. A highly rewarding read (metered paywall, around 10 min).
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