Good Outweighs Bad, Chinese Pollution and Polluted Data, and Help I’m Being Held Prisoner

We tread trepidatiously into the roiling, boiling controversial waters of the US Supreme Court nomination to raise a, well, under raised concern. Brett Kavanaugh went to Yale. It’s not that we have anything against that prestigious institution but we would like to point out that every other US Supreme Court Justice also either attended Yale or Harvard. We’re all for more racial, ethnic and gender diversity on the court but how about some scholarly institutional diversity as well? We could point to all sorts of scientific studies on the dangers of everyone in an organization coming from a similar background, some of them perhaps even conducted by researchers at Yale and Harvard, but it should be obvious, especially in these times, how detrimental to the Republic it is to have all of our Supreme Court Justices, who hold so much power, to all come from the same caste. So let’s give someone a chance from Arizona State, or UC Davis or Willamette or some other non Ivy League school (preferably west of the Mississippi) a chance to join the mighty nine. If the voters of Washington state, or any other state for that matter, were foolish enough to elect us to the U.S. Senate, we’d vote against Kavanaugh on those grounds alone. But we expect voters around the globe will entrust us to tell you about the continued good news in our world, polluted Chinese data and who is imprisoning people. It’s this week’s International Need to Know, pounding our gavel on the under known, important data and info of our little world.

Without further ado, here’s what you need to know.

The Good Outweighs the Bad

Recently we were involved in a conversation with a few people on where a visiting Chinese professor should live in our fair region. Like my colleagues, I want to ensure the professor lives in a safe area and has a good experience. But, my colleagues talked like the Seattle region is a combination of Escape from New York and the Bride vs the Crazy 88 scene in Kill Bill 1. I tried to remind them we are living in the safest era in human history and that crime remains at historic lows.* They did not believe me and perhaps you will not believe us when we tell you that extreme poverty in the world is at an all time low so strong is the cultural zeitgeist for end-of-times thinking. But it is true. The latest World Bank findings show that “The percentage of people living in extreme poverty globally fell to a new low of 10 percent in 2015 — the latest number available — down from 11 percent in 2013.” Now there are reasons to worry. The rate of progress is slowing. And in Sub-Saharan Africa, the total number of people living in extreme poverty actually increased from 2013 to 2015, though the percentage of the extreme poor in Africa declined. There is still lots of work to do and reasons to be concerned but we should also remember, as World Bank President Jim Yong Kim said on release of this data, “Over the last 25 years, more than a billion people have lifted themselves out of extreme poverty, and the global poverty rate is now lower than it has ever been in recorded history. This is one of the greatest human achievements of our time.” Our world is experiencing a market failure in the supply of hope and reason.

*In fact, the latest data was released this week and crime–murders, other violent crime and property crime–are all lower in 2017.  

Chinese Pollution and Polluted Data

In this space we have often expressed optimism about clean energy and prospects for soon reaching peak carbon energy usage. But if there is one recurring theme of INTN, it is that we all should be less sure of ourselves, especially, well INTN itself. We have often optimistically pointed to China’s clean energy efforts and plans but recent data shows that unfortunately their power consumption and pollution emissions are up. Industrial power consumption rose 8.8 percent year over year in August, according to China’s National Energy Administration. And Greenpeace reports that “China’s carbon emissions have risen this year by an amount that experts say is globally significant.” We are still cautiously optimistic although less so about the short term. China has been on track to meet its emission targets for the year 2030. But there are some short term worries as this data illustrates. And, of course, another worry is Chinese data itself. Some analysts point to the increases in emissions and use of power as evidence of a growing economy. But, some of these analysts claim it is also evidence of China inserting bundles of credit into the economy to prevent it from slowing. This happens at the same time China claims it is deleveraging (all the while official GDP figures maintain an eerie consistency). China’s data is more unreliable than ever, something we’ll delve into deeper in a future edition.

Help, I’m Being Held Prisoner

We have begun listening to the third season of the Serial Podcast. It focuses on the U.S. judicial system and confirms our bias that America imprisons too many people. The U.S. imprisons more people per capita than any other country in the world. But that’s fairly well known. Perhaps less famous are the other top imprisoning countries. Our World in Data tells us that El Salvador is second, followed by Turkmenistan, Thailand, Cuba and the Maldives. By contrast, the countries imprisoning the fewest people are Guinea Bissau, Faeroe Islands, the Central African Republic and Comoros which just goes to show that prison rates don’t tell the whole story of a country’s livability and success.

A Youthful Look at Aging, Robots are Coming and Visualizing the Wealthy

Perhaps you read this week about the discovery of Soviet jokes declassified by the CIA after 30 years which only confirms our already ensconced bias that when everything is classified nothing is secret. Maybe it is witnessing the last few hours of summer warmth washed away by the rains of autumn, but this revelation along with two others helped us bake some long undercooked ruminations. At a dinner event this week, a former U.S. official who would certainly know such things, noted that Americans don’t understand just how powerful U.S. government cyber capabilities are and what destruction America could wreak on other countries if it chose. But, he said, other countries do, which constrains their worst cyber terrorist tendencies. The next day at a lunch on the state of international trade, the speaker recounted talking to a U.S. Congressman who was complaining he could no longer talk recklessly anti-trade because the current U.S. president’s recklessness makes that impossible.  The Congressman was very happy to spout radical talk when there were no consequences. But now he has to speak the truth. Of course, all this occurs as computer technology is increasingly able to decipher what people are thinking or feeling regardless of whether they speak the thought or emotion. And, of course, many use Twitter to say things about others—athletes, politicians, ordinary people caught in the temporary winds of fame—that previously they only spoke to the person sitting next to them on a barstool. In other words, we can’t handle the truth but the truth can handle us. And so as we tell the one about perestroika and the seven kittens, we very seriously present three interconnected stories this week. Your homework is to determine how they are connected. It’s this week’s Memento version of International Need to Know.

Without further ado, here’s what you need to know.

A Youthful Look at Aging

The world, as we’ve noted in this space previously, is getting old. *Other than India and Africa, most countries face aging demographics. So which countries are best dealing with their demographic fate? The Global Aging Index, launched by researchers from Columbia University and the University of Southern California, aims to quantify this question. As you see in the chart below, of the 30 advanced countries tracked in the index, Norway, Sweden and the U.S. come out on top, with the Netherlands and Japan rounding out the top five. Given Japan is one of the oldest societies in the world, it is good their society is doing well at dealing with the situation. The index analyzes across five metrices: a) productivity and engagement, i.e. connectedness within and outside the workforce; b) health; c) equity; d) cohesion, social connectedness being one cohesion measurement; and e) security, both retirement support and physical safety. In the second chart below, you’ll note the U.S. is tops in productivity and engagement but low in equity. We’re always glad for a helpful index but notwithstanding we are getting older every day, we’d be interested in a youth index—they’re the ones most adversely affected since the Great Recession.

The Robots are Coming, The Robots are Coming!

Or so fret lots of people around the world, according to a new Pew Global survey of 10 advanced and emerging countries. “In all 10 advanced and emerging economies polled, large majorities say that in the next 50 years robots and computers will probably or definitely do much of the work currently done by humans.” Greece tops the list of technological worriers with 52 percent of Greeks definitely believing it will happen and 39 percent believing it will probably happen. Greeks are also most likely to believe people will have a hard time finding a job due to automation. Given the last decade of economic problems perhaps Greece is projecting a bit from current and past circumstances. In fact, those countries whose economies are performing better express less of a fear of automation in the survey.  In Brazil and Japan, it is the young who are most worried about the robots. This could be factored into a youth index. We live at a time of great anxiety, over refugees, robots and more. Whether we should be this scared is another matter.

Visualizing the Wealthy

We have a vague memory that Oprah once promoted an author whose book claimed one could become wealthy by visualizing it. We visualize that at least that author got wealthy, but the Visual Capitalist provides a great graphic of where the wealthy are located in our world (besides in very nice houses with great views). “The visualization breaks down the world’s 129,730 people that have fortunes of US$50 million and above. It’s a much narrower measure, representing just the upper echelon (top 1%) of the world’s millionaire population.” Unsurprisingly, North America is home to the most ultra-wealthy followed by Asia and Europe. But you might be surprised to learn that the two fastest growing locations for the ultra-wealthy are Russia followed by Latin America. Still, they have a long way to go to catch up to the United States which is home to nearly 30 percent of the world’s ultra-wealthy, with Japan a distant second at 7.7% and China third at 6.8 percent.

China Meets Joseph Conrad, Going Up, and Here, Worry about This

Context is everything. On Sunday we attended the Trombone Shorty Voodoo Threauxdown, a concert on the grounds of the zoo in Seattle. Five New Orleans bands played throughout the evening with a variety of Crescent City legends sitting in, including Kermit Ruffins, who once recognized us in the New Orleans Airport (we’ve attended many of his shows), which is perhaps the fifth-proudest moment of our lifetime. Any one who knows New Orleans, and its music, understands it is not a chamber concerto where one sits quietly and nods their heads in slight motion to the cello. This, however, did not stop the woman sitting behind us from complaining about our standing and dancing, which is perhaps the most stereotypical Seattle concert goer thing to do. Meanwhile the woman in front of us, decked out in a Clay Matthews Green Bay Packer replica jersey and hair dyed green and gold, was watching the Green Bay Packer football game on her smart phone, so engrossed in the contest that she merely flung a coat to her husband when their young son got cold, her eyes firmly on the glowing screen. Ordinarily one might have concerns about someone watching their cell phone during a concert but a) this was a bustling outdoor show and just about anything goes in New Orleans (even when in Seattle), b) the woman’s devotion to her team was very endearing and c) we too are a Green Bay Packer fan. When the sainted Aaron Rodgers threw the game winning touchdown to cap off a stunning comeback, the woman dropped to the muddy ground (it was raining through much of the concert) and raised her hands like Andy Dufrense emerging from the tunnel in the Shawshank Redemption. It was a beautiful moment as Trombone Shorty–the headliner–blew his horn and the whole crowd was on its feet swaying and dancing–save for the woman in front of us and the woman in back. So this week we give context to China’s Africa activities, Japan’s space elevator and yet another thing the world is worried about. It’s this week’s International Need to Know, neither assessing penalty points nor abusing our racket though occasionally calling “let” on the world. Trombone Shorty at Deluna Fest 2011 – “In Bloom” (Nirvana Cover)

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Last Week’s Survey Results: Nearly two-thirds of you think Aretha will be remembered with only 10 percent believing McCain will and 20 percent think neither will be remembered 200 years from now. Tough times for McCain fans.

Without further ado, here’s what you need to know.

China Meets Joseph Conrad

China has moved upriver in the world of international investments and aid. It famously is a big player in Africa, building infrastructure and providing other sorts of aid. In fact, China’s level of aid and loans is as large as the United States. But the composition is very different as you see in the chart below from AIDDATA (a project of William and Mary—William gets all the credit but Mary does all the work). While most of U.S. expenditures in Africa take the form of aid, much of China’s is in the form of loans. The bulk of China’s efforts are in the energy sector, followed by transportation. Some  criticize China for a mercenary approach. On the other hand, just how effective has U.S. aid been over the years?* But, there are reasons to be concerned about China’s commercial activities in Africa. Case in point, a big investor in a South African newspaper is China International Television Corporation (CITVC). After the investment, a columnist wrote an article for the newspaper about the Chinese government holding more than one million Muslim Uighur’s in internment camps. He no longer has a column,  or as Joseph Conrad wrote, “It was written I should be loyal to the nightmare of my choice.”

*This is an honest question. Some of the aid was certainly effective, some not. Perhaps self-interested loans may have a better overall outcome?

Going Up

We first read about the concept of a space elevator over a decade ago. It excited our imagination but since then very little progress has been made. However, Japan is now trying to change that. Wait, what the hell is a space elevator you may ask? Well, it is a means of transporting goods back and forth via a cable tethered to the earth and reaching all the way into space. The catch is for this to work the cable needs to be very strong. Unfortunately,  progress on developing new materials for such a cable have been very slow. But according to Electronics Weekly (the world’s 352nd most exciting periodical), “Shizuoka University and contractor Obayashi aim to launch two small (10 sq cm) satellites connected by a 10m steel cable from the International Space Station.” They plan to use carbon nanotube for the cable’s material. Therein may be the catch—can they create such a material that is strong enough for these purposes? If so, the cable would transport vehicles capable of holding 30 people (though more likely they would be transporting materials). The cable would start from a platform on the sea and reach up 36,000 kilometers above earth. One assumes like more pedestrian elevators here on earth, the “open door” button won’t actually work.

Here, Worry About This

Because people don’t have enough anxiety as it is, Nomura Holdings has created a Damocles Index that assesses the risk of currency exchange crisis for 30 emerging markets. Their index finds that of the 30 emerging markets, seven are at risk of exchange rate crises, meaning there is doubt they have enough foreign reserves to maintain their exchange rates (those with sharp memories may remember the Asian financial crisis of 1997 when the Thai baht could no longer be pegged to the U.S. dollar). The Index gauges factors such as foreign exchange reserves, debt levels, interest rates and import cover. Any market with a score over 100 is at risk. Sri Lanka tops the riskiest markets with a score of 175 followed by South Africa, Argentina, Pakistan, Egypt, Turkey and Ukraine. Perhaps surprisingly of the 30 emerging markets, Brazil has the least risk. Of course, that means that’s where the crisis will start.

Chinese/Korean Bakeries, Forget the Fish Eat the Tourists, and Education Levels

We watched, either live or later online, some of both of the memorials for John McCain and Aretha Franklin. Pop quiz: which one will be more widely remembered 200 years from now? Extra credit: Which one should be more widely remembered?

Which one will be more widely remembered 200 years from now?
Aretha Franklin
John McCain
Both will be forgotten

Which one should more widely remembered?
Aretha Franklin
John McCain

Feel free to email us with more thoughts on this all important matter and we may provide answers in a future INTN edition. But more important we need to discuss our love and admiration for Jennifer Hudson. We’ve noted before in this space that she had the greatest clutch performance in music history, though Aretha’s death reminded us of a worthy contender.  But, if you did not catch Jennifer Hudson’s remarkable performance of Amazing Grace near the end of the Queen of Soul’s memorial (given it was a seven-hour service, you could easily have missed it), do yourself a favor and watch it. We are not a religious person, but it is moments like that when we feel most closely tied to humanity. As we fight off restraining orders for repeatedly watching Jennifer Hudson iconic music moments, we smell the aroma of Chinese and Korean Innovation Bakeries, advocate skipping fish and eating the tourists, and cook up some education numbers. It’s this week’s International Need to Know, hoping to arrange seating arrangements for the next icons’ memorials while dishing up international data and information.

Jennifer Hudson Sings ‘Amazing Grace’ at Aretha Franklin’s Memorial

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Without further ado, here’s what you need to know.Chinese and Korean Innovation BakeriesFor decades, only a few countries brewed most of the world’s innovations. Or, as a new study by the IMF quantifies it, “From 1995 to 2014, three-quarters of the world’s patented innovations originated in the Group of 5 (G5) technology leaders—namely the United States, Japan, Germany, France, and the United Kingdom.” But the IMF study also notes that this is changing. It finds that China and Korea have joined the traditional R&D powers. The IMF cites two metrics illustrating this change. First is overall R&D spending: “China’s R&D spending is now second only to that of the United States ($460 billion) and is much larger than Japan’s ($150 billion). Korea, at $70 billion a year, spends close to the average of large European countries such as France, Germany, and the United Kingdom.” Second, the IMF looks at the number of patents (a metric we are not fond of) and the number of times new patents cite older patents, and from where. It turns out that a lot of today’s citations are increasingly citing patents from China and Korea (see second graph below). Some are worried by the rise of Asian innovation. We are not (and neither is the IMF study). Remember the world economy is not a pie with finite slices, it is a bakery. China and Korea are adding to the number of treats.Forget the Fish, Eat the TouristsMaybe a decade ago we were chatting with our Uncle in New York City, while eating a bialy, about all the tourists then inundating the city. Our Uncle, very much a wise-cracking New Yorker, turned serious and noted how all these tourists were degrading life for those living there. It was impossible to get around and markets, museums and other areas were overrun with people walking slowly, cameras at the ready. As the traditional summer tourism season closes out, we were reminded of this conversation by a column in the New York Times on Europe’s “overtourism” problems. Farhad Manjoo noted, “…the world’s most popular destinations cannot expand to accommodate an infinite flood of visitors. Advocates of curbing tourism say too many visitors are altering the character of historic cities, and making travel terrible, too.” Indeed the World Tourism Organization (UNWTO–is there an overorganization problem too?) reports that tourism in 2018 is well above forecasts, something that has been true for a number of years. In the larger picture Manjoo notes, “when the jet age began, around 25 million international trips were taken. Last year, the number was 1.3 billion.” When we were in Venice a few years ago, we noted both that it was a fabulous place to be but also that almost no one actually lives there anymore. It is no longer a city, it is a museum. Not everyone can do so but try to travel offseason and off the beaten path too. But eventually those paths will also be beaten. It is a trade-off of the world becoming wealthy.The Most Educated SocietiesWhich countries are most educated, or at least have the highest percentage of their population with a tertiary (college or above) education? It turns out Canada is number one, followed by Japan, Israel, South Korea and the U.K. The U.S. comes in number six, just ahead of Australia and Finland. All of these countries are above the OECD average of 35.7 percent. Italy, Tukey and Mexico bring up the rear among OECD countries. Note the correlation, or lack thereof, to today’s first story.