1. From Japan Times
... in many parts of Japan... the number of akiya (abandoned buildings) swells to worrying levels nationwide. In 2018, these structures — the result of unsustainable growth for several decades followed by sharp demographic decline — totaled 8.5 million units, or 14% of Japan’s overall housing stock, according to government figures. The Nomura Research Institute has estimated that this figure could exceed 30% by 2033. According to government statistics, the total combined area of uninhabited properties in Japan is greater than the area of land on the island of Kyushu.
2. FT writes how the Russian invasion has united the west.
3. Interesting question about reviving nuclear power generation in Germany,
With sanctions against Russia likely to disrupt Germany’s energy supply, why, asked MP Marc Bernhard, couldn’t Berlin just restart its mothballed nuclear power stations? “If we reactivate the three plants that were switched off last December they could, together with the three that are still operating, replace all the coal we import from Russia or 30 per cent of the Russian gas,” the Alternative for Germany MP told Olaf Scholz, Germany’s chancellor, in the Bundestag earlier this month.
Clearly the answer in the negative is a measure of the political opposition to nuclear power in the country.
4. Martin Sandbu urges caution at excessive monetary tightening by the Fed. He points to the sectoral shift in consumption away from services (which continues to remain depressed) and towards consumer durables and non-durables, and the need for reallocation away from certain sectors. In this context, he argues for caution with monetary policy,
A recent paper by Veronica Guerrieri, Guido Lorenzoni, Ludwig Straub and Iván Werning shows that if keeping interest rates low makes reallocating resources easier, the optimal stance for a central bank is looser than it would otherwise be. Thus, if it is clear that labour and capital must move from one sector to another — and the faster the better — how can it possibly be right to tighten monetary policy, making investments in new capacity both more expensive and less attractive as demand growth slows... Since insufficient reallocation means lower productive potential in the future than could otherwise be had, it also means an overzealous fight against inflation today will either raise inflation in the future or increase the cost of keeping it low. What these questions together amount to can be put more simply. Today a pandemic, a war and a climate crisis all necessitate huge structural shifts — which may themselves maximise potential productivity and minimise long-term inflationary pressures. In such a situation, how could it be right for central banks to delay investment and jobs growth, and with them the needed reallocations?
5. Is Rajapaksa family in Sri Lanka peak-nepotism?
Before the current crisis, members of the Rajapaksa family headed up a third of Sri Lanka’s 28 ministries, including Mahinda as prime minister, a brother Basil in charge of finance and another brother Chamal holding the irrigation portfolio.
6. FT highlights Germany's reliance on Russia to meet its energy needs
This is an excellent summary of the events that have led to this level of dependence on Russian energy.
As Germany’s energy policy shifted, it grew ever more reliant on Russian gas. Under former chancellor Angela Merkel, Berlin decided to phase out nuclear power in 2011 and later also moved to close all of the country’s remaining coal-fired power stations. Yet with the buildout of renewables stalling, gas as a bridge fuel to a low-carbon future began to loom even larger in the energy mix. “In the last 20 years we have shut down every alternative,” says Birnbaum. “The Germans didn’t want anything . . . no hard coal, no lignite, no nuclear, and all of a sudden we were overdependent [on Russia].” Even as Russia invaded Georgia, intervened in Syria, annexed the Crimean peninsula and fomented a separatist war in eastern Ukraine, Germany continued to expand its energy partnership with Russia. Not only did Merkel’s government back the Nord Stream 2 pipeline to increase the flow of Russian gas pumped directly to Germany across the Baltic Sea, it also stood by as key pieces of Germany’s energy infrastructure were snapped up by Kremlin-controlled companies. One example is the PCK oil refinery in the east German town of Schwedt that is now owned by Rosneft; another, Rehden, western Europe’s largest gas storage facility, is owned by Gazprom. Both acquisitions occurred after Russia invaded Crimea. Meanwhile, Berlin took decisions that locked it into Russian supplies of gas for decades to come, to the exclusion of other sources. The Nord Stream 1 and 2 pipelines destroyed the business case for building import terminals for liquefied natural gas, which would have allowed Germany to diversify its energy inflows.
7. This is an excellent graphical feature on European dependence on Russian natural gas.
8. Interesting point about football club ownership in Germany. the 50+1 rule.
In short, it means that clubs – and, by extension, the fans - hold a majority of their own voting rights. Under German Football League [DFL] rules, football clubs will not be allowed to play in the Bundesliga if commercial investors have more than a 49 percent stake. In essence, this means that private investors cannot take over clubs and potentially push through measures that prioritise profit over the wishes of supporters. The ruling simultaneously protects against reckless owners and safeguards the democratic customs of German clubs.
9. There is a lot of evidence to suggest that road widenings and lane additions do not reduce congestion, but creates induced (or generated) demand which worsen congestion. The latest from Todd Litman,
Traffic congestion tends to maintain equilibrium; traffic volumes increase until congestion delays discourage additional peak-period trips. If road capacity expands, peak-period trips increase until congestion again limits further traffic growth. The additional travel is called “generated traffic.” Generated traffic consists of diverted traffic (trips shifted in time, route and destination), and induced vehicle travel (shifts from other modes, longer trips and new vehicle trips). Generated traffic often fills a significant portion of capacity added to congested urban road.
This is a good article in the Times about how Portland, Oregon, one of the leaders in transport planning and promotion of biking and reducing vehicle commutes in the US, is grappling with the issue of whether to add more roads. And it's struggling to curb car growth and their usage.
The highway expansions in Portland illustrate a nationwide truth: Cities, even those with big climate ambitions, don’t always control their own destiny when it comes to transportation. In Texas, the city of Austin plans to invest billions of dollars in a new light rail system. But at the same time, the state is pushing ahead with a $5 billion plan to add four lanes to Interstate 35 through downtown. In Illinois and Washington, state officials are eyeing highway widening projects around Chicago and Seattle even as they set goals for slashing greenhouse gas emissions. Opponents of these projects say traffic can be more effectively managed with tools like congestion pricing, which involves charging fees during peak travel periods, in order to discourage some trips. But others say highway expansions are hard to avoid.
10. Good graphical presentation that puts inflation in the US in perspective. US 10-year Treasury yields are kissing the 3% threshold.
11. Times long read on how farmers in the US are being impacted by the supply chain disruptions. As shipping containers become extremely scarce in supply, farmers are left struggling to transport produce which has already been purchased by foreign buyers - 1.1 billion pounds of almonds from last year's harvest are sitting in Californian warehouses. As demand for imports from China rises, shipping companies prefer to transport empty containers back to China instead of waiting to pick up goods from US ports.
This about almonds and California,
Every year, California farmers produce more than three billion pounds of almonds, or about 80 percent of the world’s supply. Nearly all those nuts are harvested on more than 6,000 farms in the Central Valley — a flat, arid zone characterized by relentless sunshine, furnace-like summer heat and some of the most prodigious soils on earth.
12. Aaron Brown in Bloomberg points to an area of growth in US college admissions amidst the general trend of falling admission rates since 2010.
There is one post-secondary educational sector with gangbuster growth. Enrollment in two-year agricultural sciences degrees rose 41% in 2021. Other hot two-year degrees include construction management - up 18% - while blue-collar technical fields are up an average of 7%... The students in these programs are usually working in their fields of study and looking for advanced instruction in theory and broader business skills so they can move up to management jobs or start their own businesses, taking positions that in the past would likely have been held by four-year college graduates without specific training... students in two-year programs making up about a third of all post-secondary students.
He makes an important point about the role of such education in driving innovation, job creation, and even fostering an equitable society,
Traditional thinking was that blue-collar workers learned rote skills and had to be protected from innovation. White collar workers were supposed to have general skills that could adapt to change, and professionals were the ones who could cause change and exploit its opportunities. But the experience of the last few decades seems to indicate that it was white-collar workers — mainly with college degrees in non-job-specific fields — who lost out to innovation, while blue-collar experience was more readily transported to fast-changing fields. In many cases it was former blue-collar workers and college dropouts driving change, not elite professionals with graduate degrees...Many people view a traditional four-year liberal arts degree — without a focus on job training — as a cornerstone of an educated citizenry... Some people will demand political fixes to increase four-year liberal arts enrollments, particularly among non-Whites. But perhaps a more egalitarian and progressive stance is to instead to encourage two-year technical degrees that lead to more small business formation, more company promotions from within and a more diverse upper-middle class. Running a business or managing a team of people engaged in technical work may represent a form of education as valuable to society as a four-year degree in literature or sociology. Of course, society needs both, but maybe we overinvested in the latter and underinvested in the former.
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