Disney to buy Fox

On Thursday, it was announced that the Murdoch family would be selling Fox to Disney. The move is expected to provide a significant boost in Disney’s assets and provide about $2.5 billion in synergies. Fox will be letting go of many of its entities that seem to have failed to keep up with times as they have been in decline and remain with only a select few channels and services. The deal is estimated to cost about $60 billion dollars and Fox stands to gain 25% of Disney  which is on its way to becoming an even greater business giant. The deal said to have been born out of a personal relationship between Disney’s Iger and Rupert Murdoch. A merger of this kind is likely to make the new company a top contender along with companies like Netflix and amazon prime which have escalated revenues through original productions. In essence it appears that the fox model was not working and it has now turned in favor of the likelihood of higher profits.The move is however not a done deal, it expected to undergo extensive regulatory scrutiny, due to its magnitude. There are also rumors that Murdoch who saw his take over of sky as unlikely due a need for parliamentary approval, is using this merger as an avenue to achieve this goal as it is likely to ameliorate the political contention of him taking it over personally due to his history as a news boss. 

http://www.bbc.com/news/business-42329731

Are the Chinese becoming soft power imperialists?

At this point in time, it seems almost unquestionable that there was some Russian interference in the 2016 election. Interestingly, it seems as if China has burrowed a page out of the book that the Americans and other states were using even before the Russians in 2016. China is historically known as a people who did not wish to impose their ideals on others, in fact they built the great wall to keep others out and themselves separate from other nations.

Only this week an Australian senator was forced to resign amid accusations that he was taking Chinese funds in exchange for him furthering Chinese interests in Australia. Germany and New Zealand have also made similar claims. Their presence in Africa is also rapidly expanding with 13  large infrastructural projects in 13 different countries and several arms agreements going on at the moment.  

This may seem trivial on the surface, however when we consider China’s huge economic growth over the past few years it starts to become more alarming. One wonders what their intentions are and how they could affect the global community economically and otherwise. Now that Trump is in power thanks in part to the Russians, certain things with potentially significant ramifications remain up in the air. ”As the rising superpower, China has an appetite to shape the rules of global engagement—rules created largely by America and Western Europe and routinely invoked by them to justify their own actions.” 

https://www.economist.com/news/leaders/21732524-china-manipulating-decision-makers-western-democracies-best-defence

Inequality on the rise globally

A study conducted by French economist Thomas Piketty, has revealed that even though countries all over the world have been developing at similar rates since 1980, the gap between the rich and the poor has increased very significantly. The study’s results were derived from the work of 100 researchers and with data from over 70 countries.

The study showed that within this time frame the 7 million richest people in the world made the same amount of money as 3.8 billion people or half the world’s population. The world economic forum reported that the increase in this disparity has been a key factor in the heightened levels of disunity we have witnessed in the last few years and has had big impacts on events like the election of Donald Trump and the UK brexit. The research shows that this trend is continuing largely due to national policies and that by 2050 "The global top 1 percent income share could increase from nearly 20 percent today to more than 24 percent" the report also said, " the global bottom 50 percent share could fall from 10 percent to less than 9 percent."

https://www.cnbc.com/2017/12/14/thomas-piketty-worldwide-inequality-report-shows-gap-between-rich-and-poor.html

The Trump economy is nothing special

https://www.vox.com/policy-and-politics/2017/12/11/16763314/trump-fixed-the-economy

According to the article, the economy has not changed much since Trump has become president. The growth is steady, but not extraordinary. It is definitely a positive progression, but nothing interesting has happened. Other regions such as Europe is experiencing a larger GDP growth. Japan is growing slower than the US, but they are growing beyond the expected rate.

It seems the economy is just flowing as it naturally should be. The change in government is not greatly affecting the economy, hence Trump cannot really take credit for the economy going the steady, right way. What citizens could do at this period is to maintain the confidence and do what they normally do in economic terms. A similar topic was discussed in the economic conference as well, and if the growth is happening, the US economy will do well.

Economy is doing well, and tax cuts won’t help

Growth in the four quarters of 2017 now looks likely to come in at 2.3 percent, marginally faster than the consensus just before the president’s election. Consensus expectations for 2018 are only marginally greater today than they were before the election. So, there has been no substantial updraft in the economy. In fact, the United States has trailed the global economy in the sense that other countries, notably in Europe, have seen greater upward forecast revisions.

The U.S. stock market has been very strong, rising by close to 25 percent since the election, which is far more than most observers expected a year ago. This appears to be heavily driven by increases in corporate profits. But performance is running behind that of Japan and Germany, belying the idea that the market is being driven by U.S.-specific policy factors.

The idea that U.S. fundamentals have importantly improved since the election is further called into question by the observation that the dollar has declined by 8 percent against the yen and 7 percent against the euro. If something fundamental had happened to improve the U.S. business environment, we would have seen capital inflows and an appreciating currency.

The growth that the United States has seen in 2017 is sustainable over the medium term. This seems unlikely, from both supply- and demand-side perspectives. From the supply side, it is hard to imagine that, with 4.1 percent unemployment, the economy can continue creating anything like 200,000 jobs a month, given that normal growth in the labor force is about 60,000 people. From the demand side, this year’s growth was driven in significant part by a more than $6 trillion increase in household wealth from the stock market rally. Even if the market holds its level, similar wealth increments cannot be expected on a regular basis in the future.

Even if growth can somehow be maintained or accelerated, it is foundational for a healthy economy that its benefits be widely shared. Unfortunately, the tendency has been very different in the United States. Inequality has steadily increased, and much of the growth that has taken place has been captured by a small share of the population. This reflects both increased dispersions in pre-tax income and the inadequate progressivity of the tax and transfer system. The tax-cut legislation now in conference committee on Capitol Hill exacerbates every important problem it claims to address, most importantly by leaving the federal government with an entirely inadequate revenue base. The tax-cut legislation now under consideration would leave the federal government with a revenue basis of 17 percent of GDP, a difference that works out to $1 trillion a year within the budget window. This will further starve already inadequate levels of public investment in infrastructure, human capital and science. It will likely mean further cuts in safety-net programs and cause more people to fall behind. And because it will also mean higher deficits and capital costs, it will likely crowd out as much private investment as it stimulates.