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How Global Catastrophe Has Only Made Billionaires Richer · Stephanomics

0:14
Speaker 1: Hello, and welcome to Stephanomics, the podcast that brings the
0:17
Speaker 1: global economy to you, and that, of course was the
0:20
Speaker 1: mighty Mega Hunter t Rex, a toy you might want
0:23
Speaker 1: to buy your favorite three year old for Christmas this year.
0:26
Speaker 1: But with all the talk of global supply chain snarl ups,
0:29
Speaker 1: I know you're wondering, will those vital toy supplies from
0:33
Speaker 1: the North Pole and China get through and if so,
0:36
Speaker 1: what cost? Well, we have the very latest news from
0:40
Speaker 1: Hong Kong in a minute. We also have some hard
0:43
Speaker 1: numbers on the soaring wealth of the world's billionaires, and
0:47
Speaker 1: we take a few minutes to consider the new traffic
0:49
Speaker 1: light coalition in Germany and Angela Merkel's legacy after sixteen
0:54
Speaker 1: years as Chancellor. Stay tuned too if you want to
0:57
Speaker 1: find out what her staff gave her as a going
0:59
Speaker 1: a Way present this week. Clue, it's not socks and
1:03
Speaker 1: it's not a watch. But first, here's our senior correspondent
1:06
Speaker 1: in the current in Hong Kong with that vital update
1:09
Speaker 1: for anyone who has yet to finish their Christmas shopping
1:22
Speaker 1: m it's shaping up to be an expensive Christmas for
1:35
Speaker 1: Santa Claus. As the big supply crunch of one pushes
1:38
Speaker 1: up prices for toys. There's even a risk of some
1:41
Speaker 1: presents won't get to Santa Sligh in time. So I
1:45
Speaker 1: went along to meet Dave Cave, the owner of Dragon
1:48
Speaker 1: Eye Toys in Hong Kong, whose products include the Mighty
1:51
Speaker 1: Mega Hunter t Rex that you just heard, to find
1:55
Speaker 1: out the latest state of play for toymakers. But before
1:58
Speaker 1: we dive into the details, here's a dem of one
2:00
Speaker 1: of his dinosaurs. What we've done really well with should
2:04
Speaker 1: do a talk back junior megasaur. It has three play
2:09
Speaker 1: me functions on the actual dinosaur. It's about seven or
2:12
Speaker 1: eight in she's long, same in the height. It's a
2:14
Speaker 1: really cooled dinosaur. So when you press its foot, you
2:20
Speaker 1: hear it walking. When you press its tummy you can
2:24
Speaker 1: hear it's munching away there. And when you press its
2:27
Speaker 1: back you can hear it roaring. And when you press
2:33
Speaker 1: the top of the dino's head and you say something
2:36
Speaker 1: like welcome to Dragon Eye Toys, this is the talk
2:40
Speaker 1: back Dinoh, welcome to Dragon Eye Toys. And I can
2:44
Speaker 1: tell you parents and kids absolutely love it. Cave cells
2:50
Speaker 1: to leading retailers around the world. Unlike every other toymaker.
2:54
Speaker 1: He has spent a year dealing with surging prices and
2:56
Speaker 1: mathsfully disrupted transportation. While he's seeing some signs of stabilization
3:01
Speaker 1: in the supply crunch, Cave reckons the spike and costs
3:05
Speaker 1: still flowing through to consumers. Everybody's toys, everybody's kettles, everybody's
3:10
Speaker 1: whatever they're buying. If it's come from China and it's
3:14
Speaker 1: arriving in the last quarter of one and the first
3:18
Speaker 1: quarter of two, there's going to be pricing creases anything
3:22
Speaker 1: from five to depending on the product. Recent data in
3:27
Speaker 1: Asia is pointing to some easing of congestion at the
3:30
Speaker 1: region's biggest ports, and economists say and easing energy crunch
3:34
Speaker 1: in China will also help supply chains. But Cave is
3:37
Speaker 1: looking to Chinese New Year in February as a potential
3:40
Speaker 1: circuit breaker for the global supply crunch. That's the time
3:43
Speaker 1: of year when China's factories shut down for annual holidays,
3:47
Speaker 1: and it's normally associated with a lull in global trade.
3:50
Speaker 1: Recent data in Asia is already pointing to some easing
3:53
Speaker 1: of congestion at major ports, and economists say an energy
3:57
Speaker 1: crunch in China is easy and that will also boost supplying,
4:00
Speaker 1: so the supply chain is still difficult. The general feel
4:05
Speaker 1: is that Chinese New Year tends to be where everything
4:09
Speaker 1: breaks off and we restart everything, and so I think
4:13
Speaker 1: a lot of people are thinking maybe end of February
4:16
Speaker 1: early March things will change. Still cave cautions, it's not
4:21
Speaker 1: just supply chain snags that are hitting toymakers. The strength
4:25
Speaker 1: of the yuan and high oil prices could leave an
4:28
Speaker 1: impact long after ships are sailing on time. Again, I
4:32
Speaker 1: would say over the last eighteen months, we've had from
4:35
Speaker 1: the factors between a three and ten twelve percent increase
4:40
Speaker 1: over that eighteen months, which we've had to pass on
4:43
Speaker 1: to our customers as best we can because we you know,
4:47
Speaker 1: in our industry you have to be lean and mean,
4:49
Speaker 1: and there isn't that extra margin. And I think the
4:52
Speaker 1: buyers out there globally realized that prices will go up.
4:58
Speaker 1: The question they're all asking is are they going to
5:00
Speaker 1: go up again in two Nobody knows. Logically they shouldn't
5:07
Speaker 1: go up next year unless something quite fundamental happens within
5:11
Speaker 1: the industry and China. So we're looking to stabilize the
5:15
Speaker 1: pricing in two. But obviously, as I say, when we
5:19
Speaker 1: reset the market in end of February early March, we'll
5:23
Speaker 1: get a better indication of where the market is going.
5:27
Speaker 1: For now, Santa is going to have to dig a
5:30
Speaker 1: little deeper to fill his sleeve. Well, Santa, if you're
5:33
Speaker 1: out there, try your best to keep those prices down,
5:36
Speaker 1: but unfortunately, I think they're going to be a little
5:38
Speaker 1: more expensive than you deliver them last year. Santa for
5:48
Speaker 1: Bloomberg News in Hong Kong. I'm end the current now.
6:04
Speaker 1: You might have noticed it was a pretty big week
6:06
Speaker 1: for Germany, with Angela Merkel stepping down as chancellor and
6:10
Speaker 1: a new traffic light coalition taking over under Chancellor Schultz,
6:14
Speaker 1: the Social Democrat leader who's featured on this podcast not
6:17
Speaker 1: so long ago. So our Berlin producer Aggie Cantrill is
6:21
Speaker 1: at the German Parliament and I think could campaint the
6:24
Speaker 1: scene a bit for us, Aggie, I should say, we're
6:26
Speaker 1: talking about an hour after the official handover of power
6:30
Speaker 1: took place in the German Chancery. But it's it's been
6:33
Speaker 1: a pretty momentous day. Just tell us what's going on. Yeah,
6:37
Speaker 1: highest Japanese, So it has been quite a long day
6:40
Speaker 1: really in the in the Bundestag because firstly the Bundestag
6:43
Speaker 1: has to officially vote in the new chancellor, which they
6:46
Speaker 1: did um with he gained a majority, I believe of
6:51
Speaker 1: three and nine round about um. But then after that
6:57
Speaker 1: he was sworn in as Chancellor along within you roster
7:00
Speaker 1: of ministers, ministers that come from the Greens, the SPD
7:05
Speaker 1: and the Liberal Free Democrats, and then he went to
7:09
Speaker 1: meet Merkel at the Chantrey and have the official hand
7:13
Speaker 1: over this afternoon. And it's the coalition you just described
7:17
Speaker 1: it briefly, but it's it's been known as the traffic
7:19
Speaker 1: Light Coalition, which sounds very exciting, but just talk us through.
7:24
Speaker 1: So the traffic Light Coalition, I mean, it gets its
7:28
Speaker 1: name from the colors of the parties, as do all
7:30
Speaker 1: the coalitions. And thankfully this isn't one with clumsily named
7:34
Speaker 1: flag as many of the other coalitions are named. But
7:38
Speaker 1: this one is a coalition of the SPD that represents
7:43
Speaker 1: the red, the Social Democrats, the Greens that are obviously
7:47
Speaker 1: as their name would suggest, and the Liberals that are
7:50
Speaker 1: classically a yellow color. And there is a bit of
7:55
Speaker 1: a distance, especially between the Greens and between the FDP
7:59
Speaker 1: on it. A few issues when it comes to economic
8:02
Speaker 1: and fiscal policy, especially the Greens were always seen as
8:06
Speaker 1: these big spenders, all of these party that had questioned
8:09
Speaker 1: the merits of things like Germany's constitutional debt break, and
8:13
Speaker 1: yet now because of the compromises reached during the coalition agreement,
8:18
Speaker 1: we actually see probably a more fiscally conservative government than
8:23
Speaker 1: we would have expected if it were just, for instance,
8:25
Speaker 1: the Greens and the SPD, because there's a moderating force
8:29
Speaker 1: of the FDP that now are in charge of the
8:32
Speaker 1: finance ministry. And later on I think we're going to
8:35
Speaker 1: get a little bit into how these three parties could
8:38
Speaker 1: possibly agree because they sound very different. But one of
8:41
Speaker 1: the one of the striking points to come out of
8:43
Speaker 1: the coalition agreement that I think court people's eye outside
8:46
Speaker 1: Germany was the lowering of the voting age to sixteen.
8:50
Speaker 1: And that was I gather that was in a responsive
8:53
Speaker 1: part to a big grassroots movement. How did that happen?
8:56
Speaker 1: I think something that's really notable about that lowering of
8:59
Speaker 1: the voting age is it's something that actually appeals also
9:02
Speaker 1: to those parties. Specifically, the Greens and the FDP have
9:06
Speaker 1: a very strong support with among younger Germans. And I
9:10
Speaker 1: think there's an interesting conversation to be had about whether
9:15
Speaker 1: or not it's not a question of the c DU
9:17
Speaker 1: and the SPD losing out over all, but the fact
9:21
Speaker 1: that they're losing dominance within younger voters, and those voters
9:26
Speaker 1: are looking for a sort of alternative to the left
9:29
Speaker 1: right or progressive conservative dichotomy, but within two other parties,
9:35
Speaker 1: a party, one party that stands for digitalization and modernization,
9:39
Speaker 1: and another party that stands for a lot of progressive
9:43
Speaker 1: social issues and environmental policy. That's the Greens. Yes, that
9:47
Speaker 1: would be the Green. It's been quite low key though,
9:50
Speaker 1: or maybe it's just that I'm not sitting in Germany,
9:53
Speaker 1: but Angle and Michael has been around for sixteen years,
9:56
Speaker 1: has been this momentous figure. I mean, as it is,
9:59
Speaker 1: it just not a big deal this week because you've
10:01
Speaker 1: had you feel like you've been saying goodbye to her
10:03
Speaker 1: for at least a year. I actually think it has
10:07
Speaker 1: been quite a big deal. But I think the real
10:09
Speaker 1: momentous occasion was the election itself, which of course happened
10:12
Speaker 1: a couple of months ago now. And I think it's
10:14
Speaker 1: because now everyone's been wrapped up in the coalition agreement
10:18
Speaker 1: that it's sort of passed them by that this was
10:22
Speaker 1: actually Merkle's official last day. I think the real, the
10:25
Speaker 1: real drama happened around the around the election itself, and
10:29
Speaker 1: of course Merkele's party losing out on another term without
10:32
Speaker 1: her in charge. Well, it didn't pass us by on Stephanomics.
10:36
Speaker 1: What do you think Angler Mike is going to do now?
10:38
Speaker 1: I'm pretty sure she's going to go on a lot
10:40
Speaker 1: of hiking trips. That was her present from the chancellery
10:44
Speaker 1: staff today. They brought her some some hiking sticks and
10:48
Speaker 1: a tind to bring some sandwiches in on her trips,
10:52
Speaker 1: and I think she's probably going to take up quite
10:54
Speaker 1: a long time sped sped exactly, I can thank you
10:59
Speaker 1: very much, but I'm joined now by Holger Schmiding, chief
11:10
Speaker 1: economist for Behrenburg Bank and a wise observer of the
11:14
Speaker 1: German and broader European economy for many years. Holger thanks
11:18
Speaker 1: very much for joining Stephanomics and Angela Merkel has had
11:24
Speaker 1: sixteen years in office, one of the most influential politicians
11:29
Speaker 1: of our era by any measure. I don't feel like
11:32
Speaker 1: if it was any other country or any other chancellor,
11:35
Speaker 1: we'd be making much more fast about her departure. Now, Well, indeed,
11:39
Speaker 1: what we are seeing is a very smooth condition of
11:42
Speaker 1: power in Berlin, and it really does mark the end
11:46
Speaker 1: of an era. But it does not mark a major
11:49
Speaker 1: change in policies. And that's probably why there is only
11:53
Speaker 1: limited excitement about it. We'll get it, we'll get onto
11:57
Speaker 1: that the new government in a minute. And I think
11:58
Speaker 1: in any other country would seen more exciting. I know
12:02
Speaker 1: you're you're gonna carefully explain to us why we shouldn't
12:04
Speaker 1: be too excited. But if you think about when the
12:08
Speaker 1: history books have written, what are the main contributions that
12:12
Speaker 1: you think a Glamrker will be remembered for, she will
12:16
Speaker 1: not be remembered for one single contribution. She will probably
12:19
Speaker 1: be remembered most for two things. First of all, she
12:22
Speaker 1: presided over one of the best periods you could say,
12:25
Speaker 1: in German history, sixteen years of stability, of peace and prosperity,
12:31
Speaker 1: with a record rise in employment. The number of jobs
12:34
Speaker 1: where you earn enough who have to pay part payroll
12:37
Speaker 1: taxes on her watch rose by in a population that
12:42
Speaker 1: did not increase very much. So that is indeed one thing.
12:46
Speaker 1: The other thing is, of course her very contentious decision
12:50
Speaker 1: during the refugee crisis to not close Germany's borders again
12:54
Speaker 1: after the first rush of refugees from Hungary had been
12:58
Speaker 1: led in, and the subsequent webs and the subsequent wave
13:02
Speaker 1: of migrants, of course did sharpen and exacerbate divides in
13:07
Speaker 1: the country. In Europe, it probably contributed a bit to
13:11
Speaker 1: the British debate about Brexit. So that is one thing,
13:15
Speaker 1: the refugee crisis and are dealing with it, that she
13:17
Speaker 1: may be remembered for. But let's put that into contact.
13:21
Speaker 1: On the European level, she after some deliberation, did a
13:25
Speaker 1: lot to keep the EU, the Eurozone together as well
13:28
Speaker 1: as she could. She kept Greece in the Europe, overruling
13:32
Speaker 1: her own finance minister on that matter when she really
13:36
Speaker 1: had to. She put a lot of German money on
13:39
Speaker 1: the table during the pandemic to support heavily affected countries
13:44
Speaker 1: during the euro crisis. So she was in one sense
13:48
Speaker 1: a very strong European despite the controversies she triggered during
13:53
Speaker 1: and in the aftermath of the refugee crisis. I mean,
13:56
Speaker 1: you mentioned the refugee crisis. I suspect that was a
13:59
Speaker 1: time when Angela Merkel as a as an individual politician,
14:03
Speaker 1: really crossed people's radars outside of Europe because you had
14:08
Speaker 1: those pictures coming from the German train stations and the borders,
14:13
Speaker 1: and then her speech effectively saying to open the borders
14:17
Speaker 1: and that that anyone could come in. I mean, that
14:19
Speaker 1: was that was quite a moment at the time. What
14:21
Speaker 1: was the more long term impact on the political scene
14:25
Speaker 1: of that whole crisis on the German political scene, that crisis,
14:30
Speaker 1: the discussion about many, many migrants coming in, did revive
14:34
Speaker 1: the fortunes of the flagging far right a f E party,
14:39
Speaker 1: which now is a presence in the German Parliament with
14:41
Speaker 1: a good ten percent of the vote. It had been
14:44
Speaker 1: scoring below five before the refugee crisis. So it did
14:49
Speaker 1: sharpen the political debate in Europe in Germany and did
14:54
Speaker 1: add to support for right wing far right parties. Having
14:59
Speaker 1: said that, first of all, her big decision to let
15:02
Speaker 1: in refugees from Hungary was widely applauded across the political spectrum.
15:07
Speaker 1: It was her subsequent hesitation about closing the border again,
15:12
Speaker 1: her refusal coming from East Germany having been hemmed in
15:15
Speaker 1: by a wall for much of her life, while Germany
15:18
Speaker 1: was divided and she was on the wrong side of
15:20
Speaker 1: the war her refusal to erect a wall at the
15:23
Speaker 1: German borders figuratively speaking, that is, to strongly police the
15:28
Speaker 1: borders against migration. That refusal in the end proved to
15:33
Speaker 1: be quite controversial. She is still hugely popular today. Yes,
15:40
Speaker 1: she leaves office as the most popular policymaker in Germany,
15:44
Speaker 1: a position she has held through most of her time.
15:47
Speaker 1: With some ups and downs, you could say she leaves
15:50
Speaker 1: very much on a high note. And when it comes
15:53
Speaker 1: to the refugee segation, what we also have to say now,
15:57
Speaker 1: with six years having passed since the integration within Germany
16:02
Speaker 1: is not proceeding too badly. So the verdict is open
16:06
Speaker 1: whether in the longer term net net the problem sharpening
16:10
Speaker 1: divisions within the country or the benefit a country with
16:13
Speaker 1: an adverse demographic actually gets young people. Most of them
16:17
Speaker 1: are eager to work whether this net net will be
16:19
Speaker 1: a positive or a negative longer term. Simply, the verdict
16:23
Speaker 1: is not out yet. Certainly, from the outside, Germany seems
16:26
Speaker 1: to have been despite and maybe, as you say, perhaps
16:30
Speaker 1: in part because of the way immigrants have been able
16:34
Speaker 1: to be integrated in the labor force. But despite all
16:38
Speaker 1: those debates around the refugee crisis, Germany seems to have
16:41
Speaker 1: been largely spared the kind of extreme polarization and the
16:46
Speaker 1: toxic politics that we've seen, certainly in the UK and
16:50
Speaker 1: the US over the last few years. Is that is
16:52
Speaker 1: that right or is that just wishful thinking? That is
16:54
Speaker 1: absolutely right. Germany has been spared much of the um
17:00
Speaker 1: ooxification of politics that we see elsewhere. We have traces
17:03
Speaker 1: of it, but not to the extent that you see
17:05
Speaker 1: in many other countries. One reason for that is, of
17:08
Speaker 1: course history, having had far too much of a polarization
17:11
Speaker 1: of society in the ninet twenties and early thirties, and
17:14
Speaker 1: we all know the terrible consequences of that, Germans shy
17:19
Speaker 1: away from taking extreme positions. On top of that, the
17:22
Speaker 1: German constitution, the federal nature of it, de facto enforces
17:28
Speaker 1: a kind of consensus. Yeah. The government of Angla Merkel
17:32
Speaker 1: for three of her third terms included, apart from her
17:36
Speaker 1: center right Conservatives, the center left social Democrats, which meant
17:41
Speaker 1: that compromises between the two big strands of political thought,
17:45
Speaker 1: the center right and the center left, had to be
17:47
Speaker 1: struck within the government and also the strong role of
17:51
Speaker 1: the Constitutional Court and the upper house of Parliament, where
17:54
Speaker 1: typically the party that is in opposition in the federal
17:58
Speaker 1: government has a veto the fact to enforces that mainstream
18:02
Speaker 1: parties have to talk to each other and come up
18:05
Speaker 1: with a joint view. And as a result, Germany rarely
18:08
Speaker 1: does big policy shifts which do not enjoy broad political
18:12
Speaker 1: support across the isle. So you do have i mean
18:16
Speaker 1: on paper, just turning to the new government that we
18:19
Speaker 1: have that that takes power this week. Um, it's as
18:24
Speaker 1: you said, it's the Social Democratic Party along with the
18:28
Speaker 1: Free Democratic Party and the Greens, which in any as
18:33
Speaker 1: you said yourself, it's sort of crosses the political spectrum
18:36
Speaker 1: in Germany. In any other country, it would sound pretty
18:39
Speaker 1: difficult to manage, is it. Is it going to be
18:42
Speaker 1: an unworkable coalition at first? It may sound unworkable. I
18:46
Speaker 1: mean you have to imagine in the US as if
18:48
Speaker 1: sort of the Democrats were to cooperate with of the
18:53
Speaker 1: Republicans for one government within one government, that's roughly what
18:57
Speaker 1: we are. Biden can only dream of having that exactly,
19:00
Speaker 1: get the Democrats to cooperate with exactly, so, at least
19:04
Speaker 1: in Germany, we have seen that these three different parties
19:07
Speaker 1: have come up with a joint program to govern. Germany
19:11
Speaker 1: has a long tradition, at least a long postwar tradition
19:14
Speaker 1: of such coalition governments, which against threddled the political divide
19:18
Speaker 1: for us. This is normal that you try that you
19:21
Speaker 1: campaign on your own platform, but you basically know that
19:24
Speaker 1: once it comes to governing, you are not implementing your
19:27
Speaker 1: own manifesto. You are trying to combine your manifesto with
19:30
Speaker 1: that of your coalition partners of a different persuasion, and
19:34
Speaker 1: probably it will work simply because in this government the
19:38
Speaker 1: three parties have granted each other a bit of leeway
19:42
Speaker 1: when it comes to social policy, such as hiking the
19:45
Speaker 1: minimum wage. It is not a compromise. The social Democrats
19:48
Speaker 1: the center left have said we want the minimum wage
19:51
Speaker 1: twelve euros per hour. They get it. The Greens have
19:54
Speaker 1: said we want a faster exit from code, they get it.
19:58
Speaker 1: The Liberals have said no tax hikes to fund all
20:01
Speaker 1: of that, and they get it, which of course means
20:04
Speaker 1: we need a few tricks to actually fund the expert
20:06
Speaker 1: investment spending. But it's not just a compromise that is
20:10
Speaker 1: all murky. It is something where all of the three
20:12
Speaker 1: parties can say the government's programs it does bear to
20:16
Speaker 1: some extent our imprint. Hence we can and could sell
20:19
Speaker 1: it to our members. So events always happen. If it
20:23
Speaker 1: is never easy in government, stuff will happen. There will
20:26
Speaker 1: be discord, But I do think this government is as
20:29
Speaker 1: likely to be stable as previous German governments and full
20:33
Speaker 1: of super reasonable politicians who don't do any of the
20:36
Speaker 1: things that other politicians and other countries seem to do.
20:39
Speaker 1: When we think about the big challenges for the country obviously,
20:42
Speaker 1: and the environmental is one, the energy transition. People for
20:46
Speaker 1: a long time, particularly economists who are not German, have
20:50
Speaker 1: criticized Germany for being too dependent on its export sector
20:54
Speaker 1: and heavily reliant on that on that sort of manufacturing
20:59
Speaker 1: side of the economy, which has remained so much stronger
21:01
Speaker 1: than it is in many other European countries. I'm interested
21:04
Speaker 1: given the current climate concerns about US and China relations
21:09
Speaker 1: affecting um the integration of the global economy, and the
21:14
Speaker 1: now right now the supply chain issues that we're seeing,
21:18
Speaker 1: how has Germany been affected by that? The current supply
21:21
Speaker 1: chain is affect Germany a lot. What we are seeing
21:25
Speaker 1: is very subdued output in the car sector, say at
21:30
Speaker 1: least below what German companies could produce and what they
21:35
Speaker 1: could sell given that order books are full. So Germany's
21:39
Speaker 1: very dependence on manufacturing, which requires a lot of inputs,
21:45
Speaker 1: including semi conductors, forcast, for machine too its is now
21:49
Speaker 1: in the near term the significant weakness. It is one
21:52
Speaker 1: major reason why Germany in the recovery from the pandemic,
21:55
Speaker 1: is now lagging far behind or not just a little
21:58
Speaker 1: behind France. Having said that this is probably an issue
22:02
Speaker 1: that will no longer be that relevant, say two years
22:05
Speaker 1: from now, my private guess is that two years from now,
22:08
Speaker 1: with almost every government subsidizing seemi conductor production, we may
22:12
Speaker 1: have a glut or at least sufficient, if not too
22:15
Speaker 1: many seemi conductors. What we can say if we look
22:19
Speaker 1: back at the last twenty years. But all in all,
22:22
Speaker 1: Germany's focus on top not manufacturing has not served the
22:28
Speaker 1: country badly and it hasn't paid to bet against Germany
22:31
Speaker 1: in the last few decades. People, certainly in Britain and
22:35
Speaker 1: the UK in the US are a bit worried about
22:37
Speaker 1: getting their toys in time for Christmas. With all these
22:39
Speaker 1: supply chain issues are you Are you nervous of people
22:42
Speaker 1: in Germany nervous about that rushing out to get your
22:45
Speaker 1: toys early. Supply chain issues are a major problem in Germany,
22:49
Speaker 1: but they are more a problem on the production site
22:52
Speaker 1: affecting the car industry. There is much less talk than
22:55
Speaker 1: some other countries about the delivery problem, that is, getting
22:59
Speaker 1: that what arrives in the ports by truck towards the shops.
23:04
Speaker 1: There is a bit of anxiety here and there are
23:06
Speaker 1: people are being encouraged to buy their toys early, but
23:09
Speaker 1: at the moment this does not seem to be a
23:12
Speaker 1: big issue. One reason for that is probably that Germany
23:16
Speaker 1: is wide open with its land borders, so even if
23:18
Speaker 1: truck drivers asking us in part of the country, they
23:21
Speaker 1: could come from other part of the country, or more precisely,
23:25
Speaker 1: they could come from Poland from Romania. This is a
23:27
Speaker 1: pan continental European logistics market which is strained, but which
23:34
Speaker 1: does not seem to be anywhere near breaking point where
23:37
Speaker 1: you would have to fear that Santa Claus would not
23:39
Speaker 1: be bringing what the kids would love. And thank goodness
23:42
Speaker 1: for that Oldish Median, thank you very much, You're welcome.
23:55
Speaker 1: The pandemic has been a golden age for billionaire wealth.
23:59
Speaker 1: You might have suspected that to be true looking at
24:02
Speaker 1: stock markets and property prices soaring around the world, even
24:05
Speaker 1: when we were in the midst of the COVID slump.
24:08
Speaker 1: But now we have some hard numbers to prove it.
24:11
Speaker 1: Courtesy of the Global Inequality Lab, the research group established
24:15
Speaker 1: by the French economist Thomas Picketty. US economy reporter Augusta
24:19
Speaker 1: Surreva wrote up the story for US and is here
24:22
Speaker 1: for a quick chat about it. Augusta, thanks for joining us.
24:26
Speaker 1: What are the most eye popping numbers in this report?
24:29
Speaker 1: Thank you so much for having me. I think the
24:32
Speaker 1: most surprising thing of the studies not that billionaires have
24:36
Speaker 1: lots of money and control lots of wealth, right, but
24:39
Speaker 1: it's the fact that during the pandemic, that's when they
24:42
Speaker 1: gained the most wealth. So last year, for example, they
24:46
Speaker 1: saw billionaire wealth reached three point five percent from simply
24:50
Speaker 1: one percent when they started tracking these numbers. So it's
24:54
Speaker 1: been going up three point five percent of the world's
24:58
Speaker 1: wealth exactly. And that's only and that's fewer than three
25:02
Speaker 1: thousand people. Yes, that's controlled by about two thousand and
25:06
Speaker 1: seven and seven hundred and fifty people and nowadays they
25:10
Speaker 1: control three point five percent of the world's wealth. And
25:12
Speaker 1: at the same time, the poorest half of the global
25:15
Speaker 1: population controls only two percent of the global wealth. It's crazy.
25:20
Speaker 1: And what of the fact is that the driving the
25:23
Speaker 1: increased during the pandemic, because obviously we did have a
25:26
Speaker 1: recession in many countries, but we did see stock markets
25:29
Speaker 1: go up, I guess yes. And what we happened was
25:32
Speaker 1: also that we saw the rich get rereacher and the
25:35
Speaker 1: poor get poorer, right, so at the same time that
25:38
Speaker 1: we saw a lot of people going into extreme poverty. So,
25:41
Speaker 1: for example, one of the one of the numbers that
25:44
Speaker 1: the authors of the report mentioned to me when we
25:46
Speaker 1: spoke this week is that the World Bank estimates that
25:49
Speaker 1: a hundred million people are now living in extreme poverty
25:53
Speaker 1: since the beginning of the pandemic, at the same time
25:56
Speaker 1: that we've seen billionaire wealth sort right. So this is
26:00
Speaker 1: happening at a moment in which, as you mentioned, we're
26:03
Speaker 1: seeing both financial and real estate markets sore. Uh, and
26:07
Speaker 1: we're seeing a lot of people on the bottom half
26:10
Speaker 1: of the income distribution suffer a lot from the lack
26:15
Speaker 1: the lack of income during the pandemic, the lack of benefits,
26:18
Speaker 1: and this is a trend worldwide. Yeah, lack of benefits,
26:23
Speaker 1: lack of vaccine, and I could I also noticed in
26:28
Speaker 1: the report that the over over globally, the richest ten
26:32
Speaker 1: percent control maybe sixty of the wealth, but there is
26:37
Speaker 1: there are quite big distinctions across regions. So are the
26:40
Speaker 1: one of the most unequal places in the world. Yes,
26:43
Speaker 1: So some of the most unequal places in the world
26:46
Speaker 1: nowadays are of course the Middle East and North Africa,
26:50
Speaker 1: Latin America, and of course Russia and Central Asia. These
26:53
Speaker 1: are places where, of course you doubt in the past,
26:56
Speaker 1: with a lot of inequality. So this is not something new,
27:00
Speaker 1: But what the authors of the report are saying is
27:03
Speaker 1: that nowadays, what we're seeing is a shift from claudio
27:06
Speaker 1: inequalities into market inequalities in these places. Just showcase that.
27:12
Speaker 1: And I mean, the other thing that I guess was
27:14
Speaker 1: distinctive about this report is they talk about not just
27:17
Speaker 1: the wealth gap, but also the carbon footprint gap. The
27:22
Speaker 1: fact that the wealthier people, although they might talk a
27:26
Speaker 1: good game about helping the environment, actually have a much
27:30
Speaker 1: much bigger footprint carbon footprint. Yes, and what's surprising about
27:34
Speaker 1: that is some of the some of the highest inequalities
27:37
Speaker 1: are actually seen in some of the richest parts of
27:40
Speaker 1: the of the world. So for example, one of the
27:42
Speaker 1: regions where are you see, uh, some of the most
27:45
Speaker 1: striking inequalities when it comes to the carbon footprint is
27:48
Speaker 1: North America, where the top ten percent of the population
27:52
Speaker 1: emits on average seventy three metric times per capita each year,
27:57
Speaker 1: compared to last than ten times for the worst half
28:00
Speaker 1: of the population in North America. And that that is
28:04
Speaker 1: interesting with it within the country. And I found out
28:08
Speaker 1: thinking August, I mean when we've we've obviously talked about
28:10
Speaker 1: inequality before on this show, and that lots of people
28:13
Speaker 1: talk about it, and we've interviewed Thomas Picketty himself for Stephanomics,
28:18
Speaker 1: And there was this feeling in the midst of the pandemic,
28:22
Speaker 1: as it became clear that inequality was being exacerbated by
28:26
Speaker 1: the crisis, that there was going to be this great
28:30
Speaker 1: move political appetite post pandemic to tackle inequalities or at
28:37
Speaker 1: least start to reduce wealth inequalities in many countries. Do
28:43
Speaker 1: you feel like that that's panning out? Do you see
28:46
Speaker 1: any appetite for that, I mean, I'm thinking about some
28:48
Speaker 1: of the debates we've seen in Congress in the US,
28:50
Speaker 1: for example. Yes, it was definitely part of the conversation
28:53
Speaker 1: in the US for a long time. We saw Treasury
28:56
Speaker 1: Secretary Janet Yellen talk multiple times about it. Aldis not
29:00
Speaker 1: only has to end this race to the bottom when
29:03
Speaker 1: it comes to taxes, but also play a leadership part
29:06
Speaker 1: in that. But of course, right now we have many
29:09
Speaker 1: conversations happening at the same time on the policy brought right,
29:13
Speaker 1: and we're talking about infrastructure bill, we're talking about taxes,
29:16
Speaker 1: we're talking about building back better, and of course there's
29:20
Speaker 1: this whole conversation seems to be penning out a bit.
29:23
Speaker 1: I think that's also it's interesting in the in the
29:25
Speaker 1: UK there seems to be no appetite for that kind
29:28
Speaker 1: of action at all. And if anything, on the margins,
29:30
Speaker 1: the the extra spending and the tax changes have tended
29:34
Speaker 1: to benefit and high income people more. It's all interesting. Well,
29:38
Speaker 1: Gustus soever, thank you very much, thank you for having me. Well,
29:48
Speaker 1: that's it for this episode of Stephonomics. We'll be back
29:50
Speaker 1: next week. In the meantime, if you like the program,
29:53
Speaker 1: please take the time to rate it and follow as
29:55
Speaker 1: Economics on Twitter for more news and analysis from Bloomberg Economics.
30:00
Speaker 1: This episode was produced by Magnus Hendrickson, with special thanks
30:03
Speaker 1: to Ender Current, Augusta Serreva, Aggie Cantrill, and Holger Schmiding.
30:08
Speaker 1: Mike Sasso is executive producer of Stephanomics and the head
30:12
Speaker 1: of Bloombird podcast is Francesco Leafy h