Wednesday Night #1857

How appropriate that Peter Berezin will be with us as the annual meetings of the IMF and World Bank are underway!

As we know from previous discussions, Peter remains sanguine – if not bullish – about the Trump effect, while many of us shudder daily and worry with  Mohamed El-Erian about The Risk of a New Economic Non-Order
Highlights of Peter’s current thinking:
• Economic Outlook: Global growth will stay strong over the next 12 months, with the U.S. surprising on the upside. Unfortunately, the global economy will succumb to a recession in 2019. Stagflation will become a major problem in the 2020s.
Nouriel Roubini presents Three Scenarios for the Global Economy asking is the IMF right to think that the recent growth spurt will continue over the next few years, or is a temporary cyclical upswing about to be subdued by new tail risks?

It would please Kimon to know that Tuesday’s IMF program included the Civil Society Policy Forum and an afternoon session titled, Youth Dialogue: A World Without Work?. Of course many more esoteric topics are on the packed agenda, e.g. Systemic Risk and Macroprudential Stress Testing, and Interconnectedness of Global Systemically-Important Banks and Insurers. In view of recent events, we noted The Effects of Weather Shocks on Economic Activity. How Can Low-Income Countries Cope?.

As the Annual Meetings opened, the world learned that Richard Thaler, had been awarded the 2017 Nobel Memorial Prize in Economic Sciences. The media was delighted. Here is a man who has according to The New Yorker “[persuaded] economists—a notoriously hidebound lot—to question the “rational economic man” assumption that they once held so dear.”   According to the informative piece in Vox, he “is obsessed with how people make decisions — not just investors or policymakers but everyday consumers and taxpayers. He’s tried to explain why people won’t sell wine they own for more than they paid for it, why people take out big loans even when they have plenty of savings, and how to encourage people to sock away more of their paychecks toward retirement. That’s made him an unusually public intellectual, as Nobelists go. He writes prolifically for the New York Times, his book Nudge with Cass Sunstein was a best-seller and remains widely influential, and he even had a brief cameo in 2015’s The Big Short, where he and Selena Gomez explained how synthetic collateralized debt obligations (CDOs) work.”
The Economist is less non-economist friendly, but still enthusiastic:
The Nobel prize for economics: Nudge nudge, win win
Behavioural economists rarely win the Nobel prize for economics. Richard Thaler, announced today as the newest such laureate, has joined their number. Mr Thaler is perhaps most famous as a pioneer of “nudging”. This is the use of behavioural insights as a public-policy tool, a practice followed by growing numbers of governments. Mr Thaler’s prize recognises not only his achievements but also the discipline’s newfound importance

Bitcoins remain a hot topic. Kenneth Rogoff is skeptical and writes on Project Syndicate  Crypto-Fool’s Gold? “The price of Bitcoin is up 600% over the past 12 months, and 1,600% in the past 24 months. But the long history of currency tells us that what the private sector innovates, the state eventually regulates and appropriates – and there is no reason to expect virtual currency to avoid a similar fate.”

For Canadians, the NAFTA negotiations (reopening on Wednesday in Washington) remain worrisome. Prime Minister Trudeau headed back to Washington, D.C., on Tuesday to promote Canada as another round of NAFTA talks begins. He will meet with Donald Trump on Wednesday and with Congress’s powerful Ways and Means committee. (Stephen Harper, coincidentally, is also in Washington tomorrow.) Mr. Trudeau continues on to Mexico City later this week, but Chrystia Freeland believes that ‘This may be most uncertain international moment since WWII’

Also of concern is the somewhat flailing policy of the Ottawa government on tax reforms. The latest (crass) attempt to extract money from the unsuspecting came with the CRA’s plan to tax employee discounts which in the face of reaction  (CRA under fire for new rule to tax employee discounts), may have been nipped in the bud.
Paul Wells is not impressed either: Throw another minister on the bonfire: the ballad of Bill Morneau – this is particularly entertaining as he links his argument to Richard Thaler’s theories.

Oh, for those who worry about the CBC’s pro-Liberal bias, Neil Macdonald’s Central ethos of the Trudeau government is to make all public statements as mushy as possible should disabuse them of that concern.

Less than a month away from municipal election (5 November) competition is heating up. Although we now live in Montreal, we are avidly watching the mayoralty race in Westmount where for so many years, Peter Trent was acclaimed. CBC rounds up the issues and candidates: More parking, less biking, and other proposals to unseat Westmount’s mayor — Incumbent Christina Smith is trying to hold onto to her job in the face of stiff competition

Referenda
Pretty much everyone agrees that Spain has completely mishandled the Catalonia referendum. It would seem that Carles Puigdemont is the (only) adult in the room. See Catalonia baulks at formal independence declaration to allow talks
Wednesday Night’s two Davids look at the Kurds’ vote for independence
David Jones: Kurdish Independence a Long Shot, But Possible, reminding us that “the states with such Kurdish populations: Iraq, Iran, Syria, and Turkey have no interest in being graciously accommodating to Kurdish aspirations. Moreover, bilateral Western relations with these states are deemed far more important than supporting chaotic Kurdish efforts for independence. This isn’t malign indifference, but rather realpolitik buttressed by the further problem that some Turkish Kurds are designated as terrorists.”
David Kilgour is a stronger advocate in The Kurds Have Made the Case for Kurdistan. He argues “The Kurdish people have more than earned their right to independence and the European empires, which drew the Middle East boundaries mostly to suit their own interests, are now mercifully gone. It is long overdue for the United States, Canada, and other democratic governments to stand with the Kurds instead of abandoning them again. American allies in the region, Europe, and Asia are watching carefully.Kurdistan, moreover, would help all members of the U.S.-led coalition fighting ISIS to push back against Russia and perhaps even to be an effective regional counter to Iran’s proposed Shiite crescent from Sanaa to Beirut.”

For Wednesday Nighters with spare change
The Glut of Private Jets Means ‘Insane’ Bargains for Buyers
Bombardier has offered discounts of as much as $7 million on the Challenger 350’s list price of about $26 million as it fends off competitors entering the super midsize space, he said. The weakness across the industry in private-jet sales is adding to the pressure on Bombardier, which is also struggling to sell its C Series commercial planes. The U.S. government slapped import duties of about 300 percent on the single-aisle jetliner in the last two weeks after a complaint by Boeing Co.

Westmount’s White House connection?
Rising star in Democratic party and possible Trump challenger in 2020 has Montreal roots
Kamala Harris’s political success is no surprise to those who knew her during her teen years at Westmount High School

For your calendar
Gerald Ratzer, billed as ‘believer in CC but it’s not primarily anthropogenic’ will be one of three experts on climate change to address the public at Victoria Hall on November 1