The Economist - 23 November 2024

Год выпуска: November 2024

Автор: The Economist Newspaper and The Economist Group

Жанр: Экономика/Политика

Издательство: «The Economist Newspaper Ltd»

Формат: PDF (журнал на английском языке)

Качество: OCR

Количество страниц: 188

Disrupter-in-chief

• Elon Musk is given the ultimate target: America’s government: leader, page 11.
• The tycoon and Donald Trump seem besotted. Where is their bromance headed? Briefing, page 16.
• Why Mr Trump is gaining ground with Silicon Valley: Lexington, page 25.
• How to make those budget-slashing dreams come true, page 61.

Britons and the right to die

• Why British MPs should vote for assisted dying: leader, page 12.
• The closest analogue to Kim Leadbeater’s bill can be found Down Under, page 46.
• Isaiah Berlin would recognise the debate unfolding in Britain over the right to die: Bagehot, page 48.

Germany’s broken economic model

• As elections loom, the economy is in serious trouble, page 41.
• Germany cannot afford to wait until after its election to relax the debt brake: leader, page 13.

Too many master’s degrees aren’t worth it

• The benefits of doing a master’s degree are smaller than they appear: leader, page 13.
• Second degrees are all the rage. But don’t bank on a big pay-off, page 49.

The world this week Politics

• Ukraine fired the first longer-range missiles supplied by America into Russia, after Joe Biden gave permission for the weapons to be used. The Army Tactical Missile System has a range of 300km (186 miles). ATACMS targeted a military facility in Russia’s Bryansk region. Russia said it shot the missiles down; Ukraine said it had hit an arms depot 110km inside Russia. Britain reportedly allowed Ukraine to use long-range Storm Shadow missiles, which targeted Russia’s Kursk region. America closed its embassy in Kyiv after receiving information about a specific Russian air attack. American officials said the decision to close the building was made out of “an abundance of caution.
• Vladimir Putin, meanwhile, signed an order that lowers the threshold for Russia’s use of nuclear arms. The new doctrine allows Russia to launch nuclear missiles at a nucleararmed country that merely supports any other country’s attack on Russia. And also to fire the weapons in response to a “critical threat” to Russia’s sovereignty. The decree was planned for a long time, but the timing of Mr Putin’s signature rattled some in the West.
• The G20’s statement at the conclusion of its summit in Rio de Janeiro weakened its support for Ukraine compared with its recent declarations, omitting any mention of Russia. The G20 also failed to promise any transition away from fossil fuels, though it did call for more aid for climate change, as well as taxes on the very rich and poverty relief.
• Germany described the latest damage to two underwater communications cables in the Baltic Sea as sabotage. Suspicion fell on a Chinese-registered vessel that had docked in Russia. Separately, Britain, France, Germany, Italy, Poland and Spain issued a joint statement declaring that “Russia is systematically attacking European security architecture.”

Rural affairs

• Thousands of British farmers descended on London to protest against the government’s decision to apply inheritance tax to farms. Officials claim that the changes will affect 500 estates. Farmers disagree, and say 70,000 farms will be hit. Celebrity farmers, such as Jeremy Clarkson, supported the tooting tractors. Farmers also demonstrated in France, over an EU-Mercosur trade deal, but were more robust in their protest than the genteel Brits. The French dumped manure and rotting food outside government buildings and burned haybales.
• Donald Trump filled out more appointments for his new government with loyal supporters. They include Howard Lutnick, the boss of Cantor Fitzgerald, who was nominated as commerce secretary, and Linda McMahon, best known for her connections to professional wrestling. She was nominated to lead the Department of Education, which Mr Trump hopes to grip in a half nelson by threatening to abolish it.
• Transit officials in New York approved a rejigged congestion-charging scheme, which could come into force in Manhattan’s central business districts on January 5th. The daily charge has been reduced to $9.
• Antony Blinken, the American secretary of state, took to X to declare that Edmundo Gonzalez is the “president-elect” of Venezuela. It was the first time that the United States has recognised the opposition candidate as president-elect since July’s election. Nicolas Maduro’s regime maintains that it won, but has refused to release voting tallies which might provide evidence of its victory. Mr Maduro is due to be re-inaugurated on January 10th.
• Brazilian police arrested four members of an elite army unit and one police officer who are accused of plotting to kill President Luiz Inacio Lula da Silva days before his inauguration in January 2023. The plot was part of a plan to keep the then incumbent president, Jair Bolsonaro, a far-right former army captain, in power after he lost the 2022 election. Separately, a supporter of Mr Bolsonaro blew himself up outside Brazil’s Supreme Court.
• Doctors Without Borders, widely known as MSF, suspended its operations in Haiti’s capital over worsening security. The charity’s staff have been threatened and an assault on one of its ambulances killed two patients. It will be missed; only around a quarter of Port-au-Prince’s health facilities are operating.
• Judges in Hong Kong sentenced 45 pro-democracy figures to between four and ten years in prison in the city’s biggest-ever national-security trial. The activists’ crime was to have held a primary election in 2020 in the hope of winning control of the legislature. They then planned to demand greater democracy—or else to vote down the government’s budget and so force the chief executive to resign. The state called this subversion. America and the EU criticised the case as politically motivated.
• American prosecutors charged Gautam Adani, one of India’s best known businessmen and one of the world’s richest people, in connection with a scheme that allegedly paid $25om in bribes to Indian officials to obtain state contracts for a renewables-energy firm owned by his conglomerate. The prosecutors claim that Mr Adani and seven others defrauded American investors. The Adani Group denied the allegations. The share prices of its companies swooned.

Left turn

• Sri Lanka’s snap parliamentary election was a landslide win for the left-wing coalition that supports the president, Anura Kumara Dissanayake. It took 159 seats in the 225-member legislature. Mr Dissanayake is also the finance minister and must present a budget, which the IMF will note as it prepares to release the latest tranche of its loan to the country.
• Almost 100 lorries carrying food aid to Gaza were looted by armed gunmen. Philippe Lazzarini, the head of UNRWA, the UN’s agency for Palestinians, said that the breakdown of civil order in Gaza meant it had become impossible to operate there. The UN said that almost no aid had reached parts of northern Gaza for 40 days and repeated its warning that famine was imminent.
• At least 36 people were killed in Israeli strikes on the Syrian town of Palmyra. The British-based Syrian Observatory for Human Rights said that the attacks had hit a weapons depot and other sites in and around an area inhabited by families who have relatives in Iranian-backed militias.
• Senegal’s ruling party won a parliamentary election. It is a big victory for the president, Bassirou Diomaye Faye, who was elected in March promising radical reforms, which include fighting corruption and having a bigger say in the country’s oil-and-gas industry.

The world this week Business

• Spirit Airlines filed for bankruptcy protection, the first big carrier in America to go bust since American Airlines in 2011. Spirit, a low-cost airline, has not made an annual profit since 2019 and, like other discount rivals, has seen ticket prices plunge amid a surplus of seats. In January a judge blocked its takeover by JetBlue Airways on competition grounds. A mooted merger with Frontier Airlines also came to naught. Spirit regularly features at the top of lists of America’s most hated airline, a crowded field.
• America’s Department of Justice asked a judge to force Google to sell its Chrome browser. The judge is considering what Google must do to comply with his landmark antitrust ruling, which found that it had used improper means to maintain a monopoly in online search. Google said the government was pursuing a “radical agenda that goes far beyond the legal issues”. By next August, well into the Trump administration, the judge will issue a decision on Google’s remedies, which it may then challenge.
• Nvidia produced another solid set of earnings. The chip company’s revenue rose by 94% in its latest quarter, year on year, to $35.1bn. Net profit soared by 109%, to $19.3bn. Amid strong demand for its next-generation chips for artificial intelligence, Nvidia forecast that revenue for this quarter would come in at $37.5bn, ahead of Wall Street expectations.
• The Biden administration finalised an agreement that provides TSMC, which manufactures about three-quarters of the world’s most cutting-edge computer chips for Nvidia and others, with $6.6bn in grants to build factories in America. With an additional $5bn in loans, it is the first big deal to be completed under the Chips Act of 2022. In October Donald Trump said that the “chip deal is so bad” because it benefits only “rich companies”.
• Xiaomi, a Chinese company best known for its smartphones, provided an update on its nascent business in electric vehicles. It delivered more than 67,000 of its SU7s in the first nine months of the year, and expects to have delivered 130,000 by the end of December. Revenue from the EV unit grew by 52% in the third quarter over the second quarter.

Wither the German miracle

• Volkswagen replaced the head of its business in North America. The German carmaker wants to expand in America to offset declining sales in China, but its ambitions on that front will become more complicated if Mr Trump imposes stiff tariffs on foreign-made vehicles. In another indication of the troubled state of European carmaking Ford announced that it was cutting 800 jobs in Britain and 2,900 in Germany, which is already contending with huge lay-offs at vw.
• Thyssenkrupp, a German engineering conglomerate, wrote down the value of its steelmaking business by a further €1bn ($1.1bn) and reported a 12-month €1.4bn net loss. Daniel Kretinsky, a Czech billionaire with interests in Britain, including an investment in West Ham football club, owns a 20% stake in the steel business and is considering raising it to 50%.
• The annual rate of inflation in Britain jumped from 1.7% in September to 2.3% in October. Energy bills have gone up after an increase to the cap on energy prices. But the core inflation rate, which strips out energy and food, also rose, to 3.3%.
• Comcast announced that it will spin off its portfolio of cable channels housed under NBCUniversal, which includes MSNBC and CNBC, into a new company. It will retain NBC’s other assets, including the TV broadcast network, sports coverage and films. More and more viewers are ditching their cable subscriptions in the age of streaming. Comcast is also keeping Peacock, the streaming service for NBC programming and movies.
• Shareholders in News Corporation voted against a proposal from activist investors to end the company’s dual-class share structure. The Murdoch family controls the media group through its voting power in class в shares, which News Corp argues provides stability.
• A judge in New York sentenced Bill Hwang, the founder of Archegos Capital Management, to 18 years in prison for artificially inflating the value of stocks in his portfolio. The collapse of Archegos in 2021 led to hefty losses at banks that dealt with the fund.

Seasonal joy, and pain

• Walmart issued a bumper set of earnings and lifted its profit forecast. The retailer expanded its market share, mostly because more households earning at least $100,000 are buying its goods. The company’s share price has risen by 60% this year. By contrast, profit shrank and sales barely grew at Target. Whereas Walmart raised its outlook heading into the Christmas shopping season, Target lowered its forecast.

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