Economy

Almost 70% of Goldman Sachs Employees Are Millennials

Quartz: “The baby boom generation—people now aged between 52 and 70—is being gradually pushed out of the workforce by layoffs, buyouts, and forced early retirements even as they try to work longer to make up for retirement losses during the financial crisis. But is any employer getting rid of them faster than the world’s premier investment bank?”

“Goldman Sachs and its rival Wall Street firms are known for chewing up young folks fast and spitting them out, but to observers of a certain age (say, 40 and up) the relative youth at Goldman is stunning. In a LinkedIn post on Dec. 21, the company’s global head of human capital management—a title that itself tells us a lot about how Goldman thinks about people—writes that ‘our workforce is nearly 70% millennial—even our latest partner class is composed of 11% millennials, and of course, that number will only increase as the years go by.'”

The World Today Looks Ominously Like It Did Before World War I

Washington Post: “To some, it looks ominously like another moment in history — the period leading up to World War I, which marked the end of a multi-decade expansion in global ties that many call the first era of globalization.”

“In a recent report, Josh Feinman, the chief global economist for Deutsche Asset Management, says that the world could see a substantial backsliding to globalization in decades to come. After all, he writes, we have seen it happen before, in the years of chaos and isolationism that encompassed the First and Second World Wars and the Great Depression.”

“As before World War I, the second great wave of globalization led to a surge in immigration and increasing inequality in some countries, which likely helped to trigger the current backlash.”

Faster Growth? Two Things Trump Supporters Won’t Like

New York Times: “…the closer you look at the math of economic growth, the more you see the inherent contradictions in trying to make that happen. The two strategies that would most directly help achieve that goal clash with other planks of Mr. Trump’s economic agenda.”

“Economic growth can happen two ways: More hours are worked, or more economic output is generated from each hour of labor.”

“But if the economy quickly became more productive, it would, at least in the short run, also risk the livelihoods of some of the very working-class people whom Mr. Trump pledges to help. And the surest way to increase the number of hours worked is to allow more immigration, which would be directly at odds with Mr. Trump’s get-tough stance on that topic.”

Trump Could Hit a Brick Wall on NAFTA

Politico: “President-elect Donald Trump may have ridden to the White House on a wave of working-class hatred for NAFTA, but he’s going to find it tough to deliver on his promise to scrap the trade agreement that he blames for sending U.S. jobs abroad.”

“Dramatically changing the pact could instead threaten 14 million American jobs that rely on trade with Canada and Mexico and send tremors throughout the North American business community, which has invested billions of dollars in developing ways to manufacture everything from cars and airplanes to pharmaceutical products using labor from multiple countries.”

“So far, Trump has offered few details about what changes he’d like to make to the pact, other than threatening to withdraw from it entirely unless Mexico and Canada agree to new terms. Business groups are hoping they can persuade him to instead ‘fix’ the agreement in ways that will benefit them.”

Will Donald Trump’s Corporate ‘Tax Holiday’ Create Jobs? Not Necessarily

Leslie Picker: “President-elect Donald J. Trump has said he would like to create a “tax holiday” so that American companies can bring back profit that was generated overseas at a lower rate. In his view, this influx of cash will create jobs.”

“But corporate boards and executives may have different ideas.”

“They are likely to use much of the estimated $2 trillion held overseas to acquire businesses in the United States, to buy back their own stock or to pay down debt, say advisers of America’s top corporate executives.”

House Republicans Are Proposing a Big Corporate Tax Cut That Walmart Hates

Dylan Matthews: “Congressional Republicans, overseen by Speaker Paul Ryan and led by House Ways and Means Committee chair Kevin Brady, are planning a major overhaul of corporate taxes, as unveiled in their ‘A Better Way’ plan from June.”

“But perhaps most dramatically of all, they want to allow companies to totally exclude revenue from exports when calculating their tax burden, and to ban them from deducting the cost of imports they purchase.”

“The plan is a very clever way to address the political goals of both House Republicans and Donald Trump. The president-elect has made it clear he wants a populist trade policy that’s tough on imports and backs exporters. And while its actual effects on trade are milder than you might expect, the House GOP border adjustment plan offers Trump something that sounds like a populist trade policy without resorting to actual tariffs. Meanwhile, House Republicans have wanted a major corporate tax cut for years, and border adjustment, by increasing taxes on imports, raises lots of revenue and makes it easier to afford a huge rate cut.”

“But that doesn’t mean the policy is a sure thing. It’s already made some major corporate players — including retailers, who depend heavily on imports, as well as Koch Industries — into skeptics of Republican tax reform efforts, earning the GOP some powerful enemies as it begins its first major effort to remake the tax code in fourteen years.”

How States Can Reduce Income Inequality

Elizabeth McNichol: “…state policymakers, over the years, have tended to choose tax policies that favor the wealthy over the poor and favor corporations over workers. For example, most states rely heavily on sales taxes, which hit low-income families especially hard because they generally spend (rather than save or invest) most or all of their income.”

“States can help push back against this trend by using tax policy to reduce inequality instead of worsening it. They can raise taxes on high-income households by boosting their top income tax rate and capping tax breaks for high-income taxpayers. They can also create or expand Earned Income Tax Credits for low- and middle-income workers, raise taxes on inherited wealth, and eliminate costly and ineffective tax breaks for corporations.”

Donald Trump’s Trade Team Has Based Their Analysis on a Remarkably Silly Mistake

Matthew Yglesias: “…Trump has stated his intention to make Commerce Secretary (and billionaire investor) Wilbur Ross the lead authority on trade negotiations. The other is that he is tapping University of California economist Peter Navarro for a brand new White House job, heading up something Trump is calling the National Trade Council.”

“This makes sense, since Ross and Navarro were the co-authors of an important policy paper the Trump campaign put out during the election season that mostly focused on trade issues.”

“Unfortunately, the paper’s discussion of trade was incredibly shoddy. George Mason University’s Scott Sumner describes as ‘a complete mess,’ which, if anything, is too kind. When Adam Davidson profiled Navarro for the New Yorker, he wrote that even when he asked Navarro to help him out, he couldn’t find a single other economist who fully agreed with him on trade and China. Which is about what you would expect, since the Ross/Navarro trade policy analysis is based on a mistake that would get you flunked out of an AP economics class.”

How Inequality Leads to Obesity

Tom Jacobs: “Everyone who has ever turned to their friends Ben and Jerry for solace following a break-up is aware that painful emotions often lead to overeating. Yet when discussing the obesity epidemic among low-income families, policymakers tend to focus on more tangible factors, such as the cost and availability of healthy food.”

“Over the past few years, a number of researchers have begun pointing out this emotion blindness, suggesting the stress of poverty is an underappreciated underlying problem. Two new studies that confirm and refine this proposition have just been published.”

“So a more equal society, where most members feel respected and experience a sense of belonging, is a lower-stress society, and this reduces anxiety-based eating, which, in turn, combats obesity.”

10 Charts for Tracking Whether Trump Is Delivering on His Economic Promises

Quartz: “Many of Trump’s promises appear implausible. But we don’t have to rely on guesswork or partisan punditry to evaluate his progress; we’ve got reliable data to gauge Trump’s success.”

“The charts below provide an at-a-glance dashboard for measuring the economy under president Trump. We have collected 10 indicators that reflect his main campaign promises, with data from the George W. Bush and Barack Obama administrations to provide context. We’ll update the data as Trump puts his plans into action.”

Manufacturing Jobs Are Returning to Some Places. But These Jobs Are Different.

Washington Post: “The nation shed manufacturing jobs at a steady pace over most of the last quarter century. A combination of trade deals, automation and economic recessions sent the number of manufacturing jobs plummeting, with 6 million jobs being lost by 2011.”

“But since then, about half a million jobs have been regained.”

“They’re not the same jobs that left. They’re not coming back everywhere, or even in the same places where jobs were lost. The map of where products are made in this country is being redrawn.”