Politics

At the top the environment

These days, environmental protection is at the top of the agenda of the discussions at the World Economic Summit in Davos. The negative consequences of global warming can no longer be ignored, and the pictures of the devastating wildfires in Australia once again show the explosive nature of the problem, even if it is still barely reflected in the economic statistics. Economic calculators were once developed to make economic success measurable – as income minus costs. The costs are all expenses that can be valued in monetary terms, both for the companies and at the macroeconomic level. The freely available environmental resources water and especially air have not been included for far too long. Even today, the costs of pollution are usually not borne by the polluter, but by the general public. This economic miscalculation must be changed as quickly as possible, there is probably broad agreement on this, although…

All quiet

The geopolitical start of 2020 was at times turbulent with developments in Iran. However, it has become clear once again that no party wants to risk the beginning of an escalation spiral. This was particularly striking and also surprising in the case of Iran. However, the way in which the provocation and subsequent de-escalation was provoked and then de-escalated follows a certain pattern that has been observed again and again in recent years. Political issues are likely to continue to dominate in 2020. Above all, the election of the president in the USA in November. There are many reasons for Trump’s re-election. The smouldering impeachment procedure could still prevent him from re-election. But this would require much more evidence and incriminating material against Trump. Otherwise, the US President should be able to rely on his majority in the Senate. Apart from the brexite, there are no major political events in…

2020 is an election year in the USA – a few facts and figures for the stock markets

In a few months the president will be elected in the USA. Today, it is not even known who will run. What is certain, however, is that emotional reporting and daily changing forecasts will soon be on the agenda. Since strong emotions are not known to lead to the best investment decisions and many election forecasts were clearly off target, here are some historical data. Due to the complicated US electoral system, a victory does not require a majority of votes, but a majority of electors. For example, Trump 2016 received only 46% of the votes, but 57% of the electorate. In almost 40% of the elections the winner did not have a majority of the votes. Moreover, the outcome of the election always depends on the result of the „swing states“, which depends on the inclination of the swing voters. Since the Second World War, there have been 18…

UK elections: the perfect blue wave

For over an hour now it has been clear what was already apparent last night in the exit polls: the Conservative Party, led by Boris Johnson, won the parliamentary elections with a large majority. The party managed to win 362 seats (plus 66), the largest absolute majority for the Tories since 1987, then under Margaret Thatcher. The Labour Party, on the other hand, suffered heavy losses, as did the Liberal Democrats. Jeremy Corbyn has already announced his resignation, while LibDems leader Jo Swinson has even lost her constituency. The only big winner alongside the Conservatives is the Scottish SNP, which has managed to make significant gains. Party leader Nicola Sturgeon has already announced that she will use this victory to push ahead with her plans for Scottish independence. The new parliament will look radically different. While the conservative faction is likely to become much more homogeneous and the inner-party quarrels…

US economy benefits from rising debt, an example for other countries?

A heated debate has flared up in Germany about the usefulness of the debt brake. The current regulation actually offers the government enough flexibility, but they don’t want to take advantage of it. In the USA, on the other hand, the path is completely different, which has led to a significant increase in the deficit in the state budget. In particular, tax cuts and rising social costs have significantly widened the gap in the US federal budget. Above all, the financial relief for companies and private households has provided positive economic impulses. According to estimates, the tax cuts by the Trump government have relieved companies by around USD 80 billion and private households by around USD 120 billion. This alone should have contributed to growth of around 0.7 percentage points. With expected GDP growth of 2.3% yoy in 2019, this is a not inconsiderable contribution. Whether planned or not, with…

The SPD has decided – the beginning of the end of the grand coalition?

  In the SPD, the opponents of the grand coalition win the member survey. This could be the beginning of the end of the government. Germany will suffer, France and possibly the USA could benefit. New elections in the current environment entail many risks, but also the chance for a Schröder effect. The SPD members have elected the new party leaders in a run-off election. With Saskia Esken and Norbert Walter-Borjans, the two candidates were elected who spoke out in favour of a quick end to the grand coalition. Instead, the two chairmen are aiming for a government to the left of the centre. The election itself was close. Esken and Walter-Borjans received 53% of the votes, Finance Ministers Scholz and Klara Geywitz received 45%. This couple had started with the goal of successfully continuing the coalition. The turnout was only 54%. Obviously, the long election process had tired the…

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