Ruchir Sharma: “The monthly survey releases still get a lot of attention in the media and on Wall Street, which is a bit odd since the results are essentially broken. Falling response rates distort their findings. Social media seems to breed discontent regardless of how fast the economy is growing. In a polarised environment, partisan voters always think conditions are dismal when a rival party is in power. For these reasons and more, recent studies have found the reliability of major surveys falling not only in the US but in the Eurozone and UK as well. Perhaps most significantly, surveys are naturally skewed by rising inequality. Unlike aggregate GDP growth figures, surveys give equal weight to every respondent. So they are never going to capture or foretell the full extent of GDP growth, when growth is increasingly dependent on the spending of a few. And that is what is happening now. In the US, the richest 10 per cent account for half of consumer spending, up from a third three decades ago. It should not be surprising the majority sounds pessimistic.”
Mint: “A large services company was on the verge of losing one of its oldest clients. Months of patient relationship-building had begun to unravel after a series of operational lapses. As the situation deteriorated, the leadership team reached a familiar conclusion. There was one executive they wanted involved immediately. Every organization has people like this. They are not necessarily the smartest or most outspoken and are rarely celebrated or placed in the spotlight, but they become the one everyone turns to. Somewhere along the way, they start carrying pieces of everyone else’s work. Institutions rarely distribute work or trust equally. At first glance, this seems rational. When the stakes rise, instinct takes over and important work naturally flows towards those least likely to disappoint.”
Deirdre McCloskey reading list of Real Economics.
FT: “For the world’s biggest AI labs, education represents both a chance to help society adapt to the seismic changes their inventions are bringing, and an enormous business opportunity. A report by Morgan Stanley put the size of the global education market at $6tn in 2022. And in students, AI companies have the chance to sign up tomorrow’s leaders and workers.”
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