Ed Yardeni – The World is Flat

by Marilou Long on May 6, 2015

in Employment,Geopolitical


Today’s Yardeni Research Morning Briefing has a very interesting take on income inequality:

In 2005, Thomas Friedman published his international best-selling book, The World Is Flat: A Brief History of the Twenty-First Century. He argued that globalization, i.e., the integration of national economies through free trade, was leveling the commercial playing field. It would lead to more peace and freedom. It would also increase prosperity for those who rose to the competitive challenges of globalization. American workers would have to improve their skills to benefit from globalization. 

I was an earlier proponent of globalization than Friedman. In my September 10, 1993 topical study titled “The End of the Cold War Is Bullish,” I started to develop my thesis that the Cold War was, in effect, the greatest trade barrier of all times. So the fall of the Berlin Wall during November 1989 marked the end of this barrier and the start of globalization, with much freer trade–which I expected would lead to the proliferation of prosperity around the world and would be very bullish for stocks.

I think that worked out fairly well. However, there have been lots of critics of globalization. Most of them complain that it has worsened income inequality. The rich have gotten richer because they can sell their goods and services in global rather than just national markets. That’s a fact. However, the poor haven’t gotten poorer, on balance. Income equality has increased around the world as workers in emerging economies have seen their wages go up. In addition, all workers have more and better choices at lower prices for the goods and services they purchase.

The problem is that workers in the advanced economies have seen their wages stagnate or decline. In other words, there is more equality on a global basis. But that resulted in part from weakening incomes for highly paid workers, in the US, the Eurozone, and Japan. From their perspective, income inequality has worsened.



The short lived commodity “super cycle”

by Laura Ehrenberg-Chesler on May 1, 2015 in Commodities

Commodities prices are often used as a proxy for the health of the global economy.  This past Tuesday, Ed Yardeni had an interesting take on the commodity “super cycle” and the implications for its shorter life this go around. “Malthus was wrong, according to a 4/25 WSJ article titled “World Awash In Too Much Of […]

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China Plans a New Round of Easing

by Marilou Long on April 28, 2015 in Debt

  It appears that China is going to follow the European Central Bank in addressing its long term debt problems by helping lenders restructure debt in order to increase lending and boost their economy.  From the linked WSJ article: China’s central bank is planning to launch its own version of innovative credit-easing programs adopted by […]

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Capital Spending and the War on Cash video

by Laura Ehrenberg-Chesler on April 24, 2015 in Economic Indicators

This morning on CNBC, Rick Santelli had an interview with Peter Boockvar of The Lindsey Group.  They discussed the drop in capital spending, negative interest rates, and the War on Cash which I found interesting and a bit unnerving.  I thought the video was worth linking  here on our blog. To Peter’s point, it is not good when the government […]

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Low Oil Prices are Crashing Venezuela’s Economy – courtesy of Stratfor

by Marilou Long on April 14, 2015 in Energy

The fifty percent decline the price of oil has geopolitical implications in addition to hurting earnings.  From the linked Stratfor article on the impact of low oil prices on Venezuela: The country relies on the import of basic goods to meet its needs, but those imports have been declining for the past two years. In […]

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Another Great Retail Experience

by Laura Ehrenberg-Chesler on April 9, 2015 in lifestyle

A few weeks ago, I blogged about two great retail experiences I had over President’s Weekend.  So, I decided to share one more.  In this case, the company is Warby Parker.  It is not yet publicly traded, but will be one to watch when and if they decide to take it public. Warby Parker is a […]

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Ed Yardeni discusses “What Inflation is Doing”

by Laura Ehrenberg-Chesler on April 2, 2015 in Fed policy

This is from Ed Yardeni’s research on Tuesday.  It is most relevant in the context of the current discussion about how much, and when, the Fed will raise interest rates. “So what is inflation doing? February’s inflation data released in yesterday’s personal income report show that the core PCED remains stuck about half a point […]

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China PMI is Over 50

by Marilou Long on April 1, 2015 in Economic Indicators

The China March Purchasing Manager’s Index (PMI) rose out of contraction territory to 50.1.  China has been easing lending conditions the past several quarters to counter weaker economic trends.  From the linked article: “After a string of disappointing data, the improvement in the official PMI is welcome news and suggests that the recent rate cuts and […]

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Income Inequality analysis from our Favorite Economist

by Laura Ehrenberg-Chesler on March 26, 2015 in deficit spending

Marilou quoted Ed Yardeni in her post this week, and since he is our favorite economist, and tends not to be too political, I thought his discussion on income inequality was worth repeating on our blog. From his research Thursday: “Income equality is easy to achieve by making everyone but the ruling class poor. That […]

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Today’s Yardeni Morning Research Briefing – History Repeats Itself

by Marilou Long on March 25, 2015 in Geopolitical

Ed Yardeni is traveling in Spain this week, and this morning’s Research Briefing has some interesting historical perspective on the ongoing struggle between the West and Islamic terrorism: Crusades: Then & Now. While Christianity won the fight over Spain, it lost the battle for the Middle East. In 1095, Pope Urban II proclaimed the First […]

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