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Waste pickers roam collecting waste in Durban, South Africa
Hard Numbers: South African unemployment, migrant Med deaths mount, Argentina devalues Peso, and NYC rat sightings are … down
1,800: According to the International Organization for Migration, more than 1,800 migrants have died this year trying to reach Europe via the central Mediterranean route, the deadliest of the world’s migrant routes. This route claimed 11 more lives on Monday when a boat carrying Tunisian and sub-Saharan African migrants sank off Tunisia’s coast.
18: Following libertarian populist Javier Milei’s unexpected success in Sunday’s primary in Argentina, the government decided on Monday to devalue the peso by 18% in a move that analysts say was likely discussed with the IMF. This is meant to head off uncertainty amid concerns that Milei, if he wins the presidency this autumn, wants to dollarize the economy and do away with Argentina’s central bank, plans that are bound to cause market instability.
20: New York City’s newly appointed rat czar recently led Harlem in its first-ever Anti-Rat Day of Action, an initiative that may help explain why rat sightings in the Big Apple were down 20% year on year in July. (P.S.: This hard number is a hint for this week’s crossword puzzle!)
Protesters attend a demonstration against the French government's pension reform plan in Paris.
What We’re Watching: French pension strikes, Nord Stream saboteurs, a centrist battle in the US, Canadian elections vs. China
French workers vs. Macron
“Pas question!” (no way!) is what over a million striking French workers told President Emmanuel Macron on Tuesday as they tried to bring the country to a screeching halt over his controversial plan to raise the minimum retirement age from 62 to 64. In what was billed as the biggest strike to date against the pension reforms, protesters shut down schools, stopped transportation, and even blocked fuel deliveries. And they seem to have the people on their side – two-thirds of the French support their cause. But Macron has made the reform his No. 1 policy priority, seeing it as the only feasible way to ensure that the pension system stays solvent in a country with an aging population. And despite the pushback from the streets, Macron has the votes in parliament to ram through the changes. He’ll likely wait for the streets to die down a bit before he signs the reform bill – but sign it he will.
Nord Stream plot twist: Was it … Ukrainians?
It’s been five months since somebody blew up the Nord Stream gas pipelines linking Russia to Europe, and we still don’t know who did it. Was it Russia trying to freeze Europe into submission? Was it the US trying to isolate Russia? Or, was it, as Ian Bremmer theorized a few weeks ago, the Ukrainians trying to remove Russia’s leverage over Germany? Well, The New York Times on Tuesday reported that US officials have intelligence suggesting it was a “pro-Ukrainian group” – most likely including Ukrainian or Russian nationals – that had no official ties to the government of Volodymyr Zelensky. We’re watching to see where this latest plot twist leads, and whether the suspicion of Ukrainian involvement — official or not — affects both German and broader European unity in supporting Kyiv.
Check out Ian's response to yesterday's report here.
The centrist civil war
For years, public opinion polls have found that a majority of Americans want to see the emergence of a “third party” to challenge the two-party political dominance of Democrats and Republicans. A number of organizations have proposed, or offered themselves, as alternatives to the status quo. One is called “No Labels,” a “movement” of Democrats and Republicans who promise to look for bipartisan solutions to national problems. There is also “Third Way,” a self-described “national think tank that champions modern center-left ideas.” Third Way warned this week that a plan by No Labels to boost a “unity ticket” in the 2024 presidential election will take centrist votes away from Joe Biden and help re-elect Donald Trump, an outcome both groups say the nation must avoid. In other words, two groups that say they want to bridge the gap between the two parties are now arguing over which is more likely to elect the candidate they agree is too “extreme.” This is one more measure of the resilience of American polarization.
Trudeau probes Chinese meddling
Well, this is awkward. Canadian PM Justin Trudeau has appointed an independent investigator to assess allegations that the Chinese government interfered in Canada’s 2019 and 2021 elections … to help his party win. The reports are sketchy so far, and the interference was not so large that Beijing affected the electoral results. Still, Trudeau is in a tight spot. A fully transparent investigation could reveal details that are politically toxic to his government – particularly amid allegations that his office ignored reports of interference in 2019. But any evidence of soft-pedaling the probe could backfire in a similar way. For now, his government is projecting an air of total transparency in dealing with the story, but opposition leaders have already alleged a cover-up and are calling for a public hearing. Canada is hardly the only country concerned about alleged election meddling by China. Intelligence services in the US and Australia have voiced similar concerns, raising questions about how safe future elections will be.
US job growth slows for a fifth straight month, but labor market remains strong.
What We’re Watching: US jobs report & new China, Afghan energy extraction deal
Jobs report: US labor market remains strong
The Fed’s interest rate hikes, designed to battle inflation, have slowed US job growth for a fifth straight month. The American economy added 223,000 jobs in December, well below last year's peak of 714,000 in February but still above expectations of around 200,000. The December numbers put the monthly average for 2022 at 375,000. A slowdown has been in effect since last August, but the labor market is still hot: 4.5 million jobs were created last year, the second highest since 1940. Such resilience likely means more interest rate hikes are to be expected. Meanwhile, the unemployment rate hit a historic low of 3.5%. The leisure and hospitality industry saw the biggest job gains, followed by healthcare and construction, while retail, manufacturing, transportation, and warehousing saw the least. President Joe Biden said the historic job gains are giving American families more “breathing room” amid the “cost-of-living squeeze.”
China, Afghan energy extraction deal reached
The Taliban have signed their first energy extraction deal. A Chinese company has sealed a three-year, $540 million agreement with Afghanistan to drill and extract oil from the Amu Darya basin in the north. The deal spans three Afghan provinces and will create 3,000 jobs. No country officially recognizes the Taliban as Afghanistan’s government, and it has been globally criticized for its treatment of women. Yet, the Chinese have maintained and strengthened their diplomatic presence in the war-torn country, which sits atop an estimated $3 trillion of untapped oil and minerals. Beijing’s presence has been punished by the Islamic State, which attacked and injured several Chinese personnel in Kabul last month. But with tensions rising between Beijing’s erstwhile South Asian ally, Pakistan, and the Taliban, whose offshoots have stepped up their attacks on the nuclear-armed Islamic Republic, we’ll be watching to see whether the new oil deal might convince the Taliban to halt their support of terrorism.
How to support youth seeking peace
Youth in South Africa want to thrive — but they lack opportunities.
As a youth peacemaker for the Whitaker Peace & Development Initiative, Khadija Mayman works to educate young people on the values of peace in Cape Town. It's not an easy job with violence and unemployment rising.
Her message to those in power: Don't give us things, but you can help us.
"We are saying that we are here, we want to do the work, but we cannot do it without the necessary support and capacity," Mayman says during a Global Stage livestream conversation hosted by GZERO in partnership with Microsoft.
Watch the full Global Stage livestream conversation "The Road to 2030: Getting Global Goals Back on Track" .
What we need to know to fix US inflation
The recipe to fixing inflation depends on whether you see it as a demand or supply problem, economist and University of Chicago professor Austan Golsbee tells Ian Bremmer on GZERO World.
If inflation is being driven by too much stimulus, as economist Larry Summers believes, then the Federal Reserve is doing the right thing by raising interest rates to cool demand, Goolsbee explains. But if inflation is mostly due to the war in Ukraine or supply chain disruptions, rate hikes might result in stagflation.
US inflation is at a 40-year high and is therefore drives the perception among Americans that the economy is bad.
However, although real incomes have dropped due to high inflation, most Americans still have jobs, and many didn't take a big hit in their bank accounts — in part because the American Rescue Plan netted households an average of a $3,500 in tax cuts.
Note: This interview appeared as part of an episode of GZERO World with Ian Bremmer, "Explaining inflation & what's next for the US economy" on August 8, 2022.
- The Graphic Truth: 50 years of US inflation vs interest rates - GZERO ... ›
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Ask An Economist: How to lower inflation
US inflation is now at a 40-year high. So, what are we going to do about it?
That depends on where you think the problem is coming from, American economist and University of Chicago professor Austan Goolsbee says on GZERO World with Ian Bremmer.
If inflation is being driven by too much stimulus, like some economists such as Larry Summers believe, Goolsbee believes the Federal Reserve is doing the right thing by raising interest rates to cool demand. But if inflation is mostly due to the war in Ukraine or supply chain disruptions, rate hikes might result in stagflation.
"I think if we get a couple [...] more months like the ones we just saw [...] they're gonna be consulting the ghost of Paul Volcker," Golsbee says, referring to the former Fed chair who in the early 1980s triggered two recessions by upping interest rates to double digits in order to tame inflation.
What about risking more unemployment, like Summers has suggested? That would mean "a lot of pain for millions of people."
Watch the GZERO World episode: Explaining inflation & what's next for the US economy
- Global inflation shock - GZERO Media ›
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- The Graphic Truth: US inflation slows a bit, but ... - GZERO Media ›
- The Graphic Truth: US inflation slows a bit, but ... - GZERO Media ›
When high inflation meets high job rates
We live in odd economic times.
Polls show Americans now feeling so glum about the economy, yet okay about their individual finances?
Why? It's the unemployment, stupid, economist and University of Chicago professor Austan Goolsbee tells Ian Bremmer on GZERO World.
Although real incomes have dropped due to high inflation, most Americans still have jobs, and many didn't take a big hit in their bank accounts — in part because the American Rescue Plan netted households an average of a $3,500 in tax cuts.
Watch the GZERO World episode: Explaining inflation & what's next for the US economy
Explaining inflation & what's next for the US economy
US inflation is now at a 40-year high. So, what can we do about it?
The Federal Reserve is trying to cool down the overheated economy by raising interest rates. But if the Fed goes too far, the rate hikes could trigger a recession that'll hit low-income Americans hardest.
On GZERO World, Ian Bremmer speaks to economist and University of Chicago professor Austan Goolsbee, who says the recipe to fixing inflation depends on whether you see it as a demand or supply problem.
Goolsbee also shares his thoughts on why some COVID innovations like making masks domestically or WFH were just economic blips, why the Biden administration perhaps put up too much stimulus for the recovery, and why Americans feel glum about the economy yet still have cash in their pockets.
Bonus: find out why people are stealing CATS across America.