4 min read

Stumbling along

Russia's economy is stumbling along but the goods it produces are of lower quality and cost more; India's liberal democracy is at risk; Biden's student debt cancellation looks like a bad idea; and fifty ways to abolish your central bank.
Cartoon showing Putin boasting about being stuck in the 19th century.
Russia's economy hasn't fared as poorly as many expected, but its people will still be significantly worse off – almost as if they're living in a different century. Source.

1—Stumbling along

How has Russia's economy continued "stumbling along", six months after it invaded Ukraine, despite crippling Western sanctions? The Economist magazine offers up three possible reasons:

"The first is policy. Vladimir Putin has little understanding of economics, but he is happy to delegate economic management to people who do. The CBR is stuffed with highly qualified wonks who took swift action to prevent economic collapse...

The second relates to recent economic history. Sergei Shoigu, Russia’s defence minister, may have been on to something in February when, according to the Washington Post, he told the British government that Russians 'can suffer like no one else'. This is the fifth economic crisis the country has faced in 25 years...

The third factor relates to hydrocarbons. Sanctions have had a limited impact on Russian oil output, according to a recent report by the International Energy Agency. Since the invasion Russia has sold in the region of $85bn-worth of fossil fuels to the EU. The way in which Russia spends the foreign currency thus accumulated is something of a mystery, given sanctions on the government."

You can read the full article here (~6 minutes), which concedes that despite the better than expected results, "Over time, sanctions will take a toll, and Russia will produce goods of a worse quality at a higher cost."

2—The battle for India

"The challenges facing India in the next 75 years are colossal, perhaps even greater than the first 75 years. This year, northern India saw the hottest temperatures in history, reaching 49 degrees Celsius. Next year looks to be even hotter. By the middle of the century, New Delhi could become uninhabitable.

The country also has an enormous, restive, and largely unemployed youth population – half of its population is under 25. But only 36% of the working-age population has a job. To meet these challenges, it is crucial that the country stay united, and not fracture along religious lines, spend its energies building a brighter future instead of darkly contemplating past invasions."

That's from Suketu Mehta, a Hindu who is worried that the Indian government's "Hindu nationalist agenda", and the "sustained and systematic harassment of writers, journalists, artists, activists, religious figures – anyone who questions the official narrative", is putting India's liberal democracy at risk.

You can read Mehta's full article here (~4 minutes).

3—Biden's student debt cancellation

Tweet about Biden's student debt forgiveness.
The one-off debt relief amounts to around $300 billion, which aside from equity concerns (graduates earn more, on average, than non-graduates) and the incentives it creates for future students, is likely to fuel even more inflation in the US.

4—Fifty ways to abolish your central bank

With the spotlight of public opinion firmly focused on global central banks following their disastrous performance over the past couple of years, economist Scott Sumner pondered whether a central bank could be abolished completely. It wouldn't be easy:

"Removing the government from money is far more complex than removing the government from something like passenger rail. Amtrak could simply be auctioned off—dozens of countries have done something similar. It's far less clear as to what it would mean to remove the government from money. The US has more than $20 trillion in debt, which involves promises to pay a very specific type of money as far as 30 years out in the future.  It's often said that, 'You may not be interested in war, but war is interested in you.' The same is true of the US dollar."

You can read Sumner's full article here (~5 minutes), which goes into more detail about "3 of the 50 ways that Canada could get rid of the Bank of Canada".

5—Further reading...

👯 "Scientists have analysed unrelated people who bear a striking resemblance to one another, and found that they share genetic variants which not only make them look similar but also act in a similar way."

👩‍💻 One of the very few post-quantum cryptography candidates was broken "in an hour on a laptop... eliminating an encryption protocol that worked very differently from the vast majority of schemes".

🙏 "Once considered too low-status for many, peddling wares on the street has made a comeback as people who lost their jobs or closed down their businesses seek new ways to make a living and work around China's relentless anti-COVID policies."

💸 More supply-side stimulus: "The State Council, China's Cabinet, outlined a 19-point policy package on Wednesday, including another 300 billion yuan that state policy banks can invest in infrastructure projects, on top of 300 billion yuan already announced at the end of June. Local governments will be allocated 500 billion yuan of special bonds from previously unused quota."

🚘 California's government will ban the sale of new petrol cars by 2035, a decision "widely expected to accelerate the global transition toward electric vehicles".

❌ Time to get a new browser (Firefox or Brave are decent options): "Chrome says that they're no longer allowing ad-blocker extensions to work starting in January."

⛵ "Some of the biggest names in the maritime trade are investing in retrofitting or building newly designed vessels that harness wind energy to meet pollution-busting goals and emissions standards. From giant kites that pull cargo ships to inflatable sails to spinning rotors that create lift, the move toward wind-powered commercial vessels will generate a doubling of such ships on the water by 2023."