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Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

Category: Global economy
December 16, 2014 at 10:15 AM

Dangers of poking the bear

Russia is in recession. Not only that, but interests rates have risen to 17 percent as the central bank tries desperately to protect the free-falling ruble. Bank runs by the rich are siphoning out dollars and euros, although the central bank hasn’t yet unloaded dollars, which might help. One big problem facing Moscow is falling oil…


Comments | More in Global economy | Topics: Nuclear weapons, Oil prices, Russian economy

March 4, 2014 at 10:04 AM

The economic stakes in Ukraine

How horrible, fantastic, incredible it is that we should be digging trenches and trying on gas-masks here because of a quarrel in a far away country between people of whom we know nothing. — Neville Chamberlain Well the Ukraine girls really knock me out. They leave the West behind — The Beatles Here are five things to…


Comments | More in Global economy | Topics: Ukraine crisis

September 3, 2013 at 10:21 AM

The next crisis: ‘Submerging market’ nations

Not so fast on “the rise of the rest.” The BRICS (Brazil, Russia, India, China and South Africa) — always a false construction — are not decoupling from the world economy to become independent powerhouses, as was fashionable thinking a few years ago. As the American economy strengthens and the Federal Reserve prepares to back off on the stimulus that provided so much “hot money” investment in developing nations, capital is exiting most developing markets. China may, or may not, be serious about creating a more balanced, consumer-based economy. India, the world’s second most populous nation and soon to be first, is in outright trouble. The rupee is in freefall, growth has slowed, inflation is a problem and foreign investment is headed for the door. It is also suffering from a persistent and growing current-account deficit.

Ashoka Mody of Princeton writes that India squandered an opportunity to make a leap forward:

Infrastructure did not keep pace with the economy’s needs. And, more deplorably, educational standards lagged. For a country positioning itself as a leader in the global knowledge economy, neglecting investment in education was a grave error, with other countries now staking a claim to the role to which India aspired. And, even when times were good, India never gained a foothold in the global manufactured-goods trade.


Comments | More in Global economy | Topics: Emerging markets. BRICS, India

May 17, 2013 at 10:28 AM

Poll: Your big economic worries

The Dow is over 15,000, corporations are sitting on record amounts of cash, M&A activity is picking up, the deficit problem is on track to being solvedinflation is nearly non-existent and the U.S. economy is performing better than that of almost all other industrialized nations. Metropolitan Seattle, with 5.5 percent unemployment, is getting close to what economists would consider full employment. On the other hand, millions remain unemployed, wages are stagnant and inequality is the highest we’ve seen since the 1920s and perhaps even at a historic record. It’s a recovery, but one very different from those seen in the post World War II era.

Consider that a recession comes along around every seven years or so. Also, the banking industry is as dangerous as ever, and so politically powerful that it was most recently able to push back meaningful regulation of derivatives. Federal austerity is holding back a more robust recovery. Recession in the eurozone, a slowdown in China and political tensions in east Asia are among many concerns. What has you most worried?

Read on for the best links of the week and the haiku:


Comments | More in Aerospace/Boeing,, Banking, Boeing, Deficit, Eurozone, Global economy, Great reset, Jobs/Unemployment

May 15, 2013 at 2:52 PM

No easy solutions after Bangladesh factory deaths

The final toll of workers killed in the collapse of a garment factory in Bangladesh is 1,127. It is a staggering tally of loss. By contrast, the infamous 1911 Triangle Shirtwaist Factory fire in New York City killed 146. The Triangle fire, where factory managers had locked fire-escape doors, galvanized the Progressive movement in America, leading to new safety codes, labor laws and increased unionization. Such a favorable outcome in Bangladesh is much less likely.

As the Seattle Times’ Amy Martinez reports, officials at Nordstrom are scrutinizing the safety conditions at the three Bangladesh factories where some of its garments are made (none were made at the factory that collapsed). Benetton, H&M, Joe Fresh, Mango, Tesco and Zara are among the companies that are pushing a binding agreement that requires them to help pay for better safety conditions at Bangladeshi apparel factories. Gap, Sears, and J.C. Penney are among others who have yet to sign on. Gap, for example, has said it fears lawsuits from American lawyers. Wal-Mart, the biggest player, is drafting its own plan, but critics worry it won’t be enough to prevent further deaths.

In addition to the lack of a united front by Western retailers, the Bangladesh government is corrupt and deeply captured by the international garment industry. Ready made apparel is the poor country’s largest export. The government did say it would allow garment workers to unionize and raise the minimum wage, but it’s unlikely these reforms will do much good in such an environment.


Comments | More in Consumer spending, Global economy, Nordstrom

March 22, 2013 at 10:31 AM

Vote: Is the economy getting better for you

The stock market is up and housing sales are recovering. Unemployment remains stubbornly high and mandatory government cutbacks will be kicking in with the sequestration. Job openings increased slightly in January, but there are 3.3 job seekers for every position. The Seattle area is booming; the rest of Washington, not so much. Today’s poll asks how you are faring personally compared with six months ago:

Read on for the best links of the week and the haiku:


Comments | More in, Global economy, Gold and precious metals, Google, Great Recession, H1-B skilled foreign worker visas, Income/living standards, Jobs/Unemployment, Nordstrom, Outlook

September 19, 2012 at 10:00 AM

What is this thing called ‘free trade’?

Concern over the proposed Trans-Pacific Partnership is justified. We’ve come a long way from the NAFTA debate, where Al Gore, arguing for the agreement, demolished Ross Perot on national television. Back then, most Americans had been net winners from “free trade,” which was sold as all sides playing by the same rules, lowering barriers and liberalizing markets. What’s most memorable from the debate is Perot’s prediction of “a giant sucking sound” of U.S. jobs.

It’s happened, especially since China joined the World Trade Organization and plays by its own rules. Millions of jobs have been lost, not just in the industrial Midwest but in the devastated textile, apparel and furniture sectors of the Carolinas. There are only so many Wal-Mart greeter, call-center and server-farm janitor jobs to replace them. Washington is different, a net winner. But that might be different if not for Boeing, whose operations are subsidized by tax incentives and tax avoidance, military contracts and the U.S. government pushing hard to sell its airplanes abroad.

So it’s not really “free trade” we’ve seen the past 18 years but managed trade. And with the huge U.S. trade deficit — fixing it could go a long way to repairing high unemployment — we’re on the losing end. Our consumption mania, to be sure, is partly to blame. But so are the protectionist policies of countries such as China, and the eagerness of U.S. corporations to send jobs offshore. Not for nothing did America protect its industries with tariffs for most of the history of the republic.


Comments | More in Aerospace/Boeing, China economy and business, Global economy, Trade

July 2, 2012 at 9:44 AM

Hangfire on the economy || Jon Talton

A month ago, it looked as if the economy was confronting its worst dangers since the collapse of 2007-2008. In the United States, job creation and GDP growth had slowed significantly. Washington, D.C., was paralyzed and unable to address the situation. Europe, already in another recession, was facing the breakup of the eurozone. And growth was decelerating at an alarming rate in China. Since then, the Dow Jones Industrial Average has rebounded, a euro-supporting government was elected in Greece and life goes on.

Have we dodged the bullet? Unfortunately, no.

Today, the Institute for Supply Management reported that its manufacturing index had contracted for the first time since 2009. Things are no better in Europe, and Germany’s manufacturing sector is now slipping fast. Yet another report showed China factory output fell in June. And, as the New York Times reported, Beijing manipulates data to conceal the real condition of China’s economy. Commodity prices are dropping because of fears of a worse slowdown.


Comments | More in Banking, China economy and business, Eurozone, Global economy, Manufacturing

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