Digest: 5 May 2013

Abstract

This weeks’ Digest consists of a variety of articles from The Economist, with particular attention to its optimistic Special Report on American Competitiveness:

Pessimists should reassess their view of the US economy, there is reason to be more positive: Policies instigating innovation and business development are being employed by governments across the country; The US has dropped in rankings of research & development as a percentage of GDP but it still spends more than any other country; Cheap energy from shale gas and oil is causing a surge in energy-intensive industries such as plastics and chemicals; Education at all levels is being overhauled across the country with an increasing ability to acquire inexpensive qualifications linked to specific market needs but little if any improvement has been shown so far.  On other fronts:  Carbon emissions from cars are decreasing all over the world as a result of government policy, some carmakers are more invested than others; Findings seem to show the global climate is less sensitive than previously thought, it is not clear what is causing the discrepancy between rising emissions and stabilising global mean temperatures, but this may effect mitigation policy; In a time of increasing concern regarding regulation of tech industry’s market power and use of personal data, two changes in the FTC and FCC are in process; US media is providing less and less investigative journalism and the bulk of online advertising money comes from Google, Yahoo, AOL, Microsoft and Facebook.

Economy

In Emissions: Green Wheels, The Economist, as part of its Special Report on the future of cars, discusses the international car industry’s response to concerns related to global warming and pollution.  Government policies from the EU to California to China are instigating this decrease in emissions, but some carmakers are more invested than others – efforts are also being made to decrease the environmental impact of car manufacturing.

In The Economy: Cheer Up, The Economist, as part of its Special Report on America’s Competitiveness, discusses what it considers to be encouraging signs for the US economy, and suggests in light of these that pessimists need to reconsider their position.  The consensus on the American economy has been for some time that it is in decline and greatly at risk.  The Economist points out that while these concerns are easy to understand, there is more to the picture than this – the failure of the Federal government to act appropriately has not stopped local, city, and state governments from doing so.  The Federal government would do well to support these efforts rather than hinder them.

In Innovation: Brainbox Nation, The Economist, as part of its Special Report on America’s Competitiveness, discusses the position of the US in regards to the instigation of innovation.  Although the US has dropped in the rankings of R&D expenditure to GDP, it still spends more than any other country.  This should give encouragement to those who perceive an increasing future downturn in US innovation in relation to competitor nations.  The best research still comes from government funded projects, but government funds for research are likely to diminish in the future.

In Energy: Deep Sigh of Relief, The Economist, as part of its Special Report on America’s Competitiveness, discusses the current shale gas and oil bonanza, specifically its effect on previously economically-depressed communities, and on the energy-intensive industries that benefit from cheap energy – such as plastics and fertilizers.  Chevron Philips, Dow Chemical, Formosa Plastics, Occidental Petroleum, and the Methanex chemical company, are all expanding/building new chemical plants on the Gulf Coast.

Environment

In Climate Science: Sensitive Matter, The Economist discusses the discrepancy between rising carbon emissions and the plateauing of the five-year mean global temperature over the last ten years, and considers approaches to an increased understanding of what is causing this divergence.  Until we have that understanding we won’t know with certainty how much warming can be expected from carbon emissions over time.  This uncertainty has policy implications regarding appropriate mitigation responses, but it is not sufficient for a change away from a policy of increasing mitigation.

Politics

In Regulating America’s Tech Firms: Logging Off, The Economist discusses the relationship between the tech industry and the Federal Trade Commission (FTC) and the Federal Communications Commission (FCC).  A new commissioner has recently been appointed to the FTC, and the head of the FCC has recently announced he would be stepping down.  In a time of increasing concern regarding how regulations will develop in regards to the tech industry’s market power and its use of personal data.

Social

In  The Media: No News Isn’t Good News, The Economist discusses the deteriorating quality of the US news industry.  US cable news organisations are providing fewer live objective reports in favor of opinion-based interviews.  Newspapers and magazines likewise are providing less investigative journalism.  Media outlets are turning to charging for access to their online content, but the bulk of money spent on digital advertising comes from only five firms – Google, Yahoo, Facebook, Microsoft, and AOL.  This does not bode well for the quality of media as a source of objective news and information.

In Education: Value-Added Remodelling, The Economist, as part of its Special Report on America’s Competitiveness, discusses the overhaul of US education systems that is currently taking place.  This initiative has grown out of local school systems, and State and Federal policy.  So far results have shown little if any improvement, and it is yet to be seen what results will come from ongoing efforts to align education with business needs.  Changes in sources of education will have their effect as well – the opportunity to quickly rack up inexpensive qualifications will continue to increase.