The continued economic decline of the west

The continued economic
decline of the West
Diagnosis and prognosis
Jon Moynihan
23 February 2012

The continued economic decline of the West

The challenge Potential actions Likely outcomes

© PA Knowledge Limited 2012 Page 2

How has the West’s economic decline happened? Will it continue?

Real GDP per capita Real GDP per capita
Change from 2007 to 2012 (forecast), % (1992 = 100)

United Kingdom 550
520
United States 490
460
Japan 430
400 China
France 370 India
340 United Kingdom
Germany
310
United States
Russia 280
250 Germany
Brazil 220 Japan
190 Brazil
India 160
130
China 100
70
-20 0 20 40 60
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
Source: IMF.


There are many competing explanations, some more persuasive than others:

5-Year CDS of Eurozone countries vs.
percentage of men living with parents
3500
Greece
5Y CDS of founding Eurozone countries

3000

2500

2000

1500
Portugal
1000 Ireland

Italy
500
France Belgium Spain
Finland Germany Austria
0
Netherlands
0 10 20 30 40 50 60
% of men aged 25-34 living with parents
R2 = 0.75282

Source: EuroStat, Bloomberg, via Boaz Weinstein, Saba Capital.


The central dilemma facing ‘Western’ economies:

The paradigm The paradigm
for the 1900s for the 2000s

Average annual
growth in 2% Negative
number of jobs:

Average annual
growth in real 3% Negative
wages:




Ineffectual
Global wage Poor allocation of
governments and ‘Entitled’ groups
disparity tax monies
credulous voters


A global wage disparity…

The global wage disparity, potentiated by the global adoption of capitalism,
is driving an unprecedented loss of wealth and growth for the Western economies.

Wage disparities
between OECD
and emerging With no job
As a result, a job The jobs drained supply, i.e. less
countries result
drain continues are not returning; demand for
in an almost
and is indeed rather, more will labour, wages in
insuperable
accelerating. be lost. the OECD must
competitive
inevitably fall.
advantage
for the ‘East’*.

* Includes Brazil etc.


This jobs drain is taking place, driven by the wage
disparities that exist between West and East:

Advanced Developing Waiting to
Economies1 Economies urbanise
(urban)2 (rural)2

Labour pool 500 million 1.1 billion 1.3 billion

$135 $12
Average daily wage $1-2?
(OECD, 2010) (China, 2008)

“Alarmist” worries about this were dismissed as overblown, even as many millions
of jobs migrated (indeed continue to migrate) from OECD to Third World 1995-2011.

Sources: 1 OECD; 2 Estimated: UN World Urbanization Prospects, 15-64 year olds, assuming 65% LFPR.




Wage disparities
between OECD
countries result
in an almost
insuperable
competitive
inevitably fall.
advantage
for the ‘East’.


A jobs drain continues…
Since globalisation began in earnest in the 1990s, OECD economies have,
despite government stimulus policies, been unable to sustain rates of job growth:

Total employment (1983=100)
Europe USA
160 160

150 150

140 140

130 130

120 120

110 110

100 100
1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010
Source: OECD


The last decade was the first decade since the
Great Depression to see no net job creation in the US:

Compound annual jobs
US job growth by decade, 1940s – 2000s growth by decade (%)
3.5
% change in non-farm payroll employment (%)

45
40
1940s, 37.7% 3
35
1960s, 31.1%
30 2.5
1970s, 27.6%
25 1950s, 24.7%
2
1980s, 20.2%
20
1990s, 19.8%
15 1.5

10
1
5

0 2000s, -1.1%
0.5

-5
0 1 2 3 4 5 6 7 8 9 10 0
40s 50s 60s 70s 80s 90s 00s
Year in decade
-0.5


Wages have increased for those with the most education,
while falling for those with the least:

Changes in wages for full-time, full-year male U.S. workers
1963-2008
190
180 Graduate school
170
160
150
140
College graduate
130
120
110
Some college
100 High school graduate
90 High school dropout
1963
1965
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
Source: Acemoglu and Autor (MIT), Skills, Tasks and Technologies: Implications for Employment and Earnings (2010).


In 1955, the biggest company in the world by value was GM A jobs drain continues…

(revenues: $105bn).* Today it is Apple (revenues: $108bn).
Employment patterns have, however, changed somewhat:

US employees Overseas employees Overseas contractors
800000
700000
600000
500000
400000
300000
200000
100000
0
GM 1955 Apple 2012
* At 2011 prices. At 1955 prices, revenues were $12.5bn.


The US labour market is the most flexible in the world. Unlike in previous
recessions, it looks as if lots of these jobs are not coming back:

Percent job losses in US recessions
1974 1980 1981 1990 2001 2007
1
0
-1
-2
-3
-4
-5
-6
6 million jobs lost
9 million jobs lost
-7
1 2 3 4
Number of years after peak employment

Whole industries – the ones the West was built on
– are disappearing to the East:

Crude steel production (megatons)
China USA Europe
800000

700000

600000

500000

400000

300000

200000

100000

0
1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011
Source: World Steel Association.


Whole industries – the ones the West was built on
– are disappearing to the East:

The commodity car industry is going the same way.
Luxury cars will take slightly longer:
Car production
USA Japan Europe China
25,000,000

20,000,000

15,000,000

10,000,000

5,000,000

0
1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010
Source: International Organization of Motor Vehicle Manufacturers.


With each stage of advancement up the industrial ladder in the East, there is a
corresponding jobs drain from the West:

The industrial development cycle: from delivery to creation

Low education Professional
Scientific and Other high
Low capital Medium and services
creative know-how
investment high capital Financial
intensity Design High-tech IP
Low know-how services
Know-how Entrepreneurialism
Steel è Auto Legal
Light manufacturing Ecosystem growth Venture capital
Accounting
Assembly

Cash surpluses
in developing Time
We are here
countries Western hostility
to high earners
Critical mass
Innovation centres ecosystems
Enablers of (universities)
advancement: Education




Wage disparities
between OECD
countries result
in an almost
insuperable
competitive
inevitably fall.
advantage
for the ‘East’.


The jobs are not returning…

At the same time, our own competitive advantages are steadily crumbling:

Competitive wage rates Unfeasible

Existing physical and intellectual Half-life is some
capital base 10-15 years

Barriers that
Propensity to invest new capital
could prevent
job loss from
the West to Encouragement of VCs
the East and entrepreneurs

Existing IP

Ability to generate IP


China has been investing almost half its GDP, while the West barely
invests a fifth:

Gross capital formation (% of GDP)
60

50

40

30

20

10

0
1970 1975 1980 1985 1990 1995 2000 2005 2010
China United Kingdom United States Source: World Bank



“Just catching up”?

Wuhan Liverpool St

Hongqiao King’s Cross





Barriers that
Propensity to invest new capital Vanishing
could prevent
job loss from
the West to Encouragement of VCs
the East and entrepreneurs

Existing IP




Western attitudes to high earners contrasts with some other countries:

“We need to get tough on irresponsible
and unjustified top remuneration”
Nick Clegg, UK Deputy Prime Minister

“To get rich is glorious”
致富光荣
zhìfù guāngróng
Deng Xiaoping, Former Leader of the People’s Republic of China





Barriers that
could prevent
job loss from
the West to Encouragement of VCs Western hostility
the East and entrepreneurs to high earners

Existing IP



The West has been haemorrhaging intellectual property,
with little sign of abatement:

Global value of counterfeit and pirated goods (2015): $1.5 trillion…
Known jobs lost due to counterfeiting and piracy: 2.5 million.
Source: Frontier Economics, Estimating the global economic and social impacts of counterfeiting and piracy (Feb 2011)

“The Chinese government has a national policy of economic
espionage in cyberspace… Although a rigorous assessment has
not been done, we think it is safe to say [this] easily means billions
of dollars and millions of jobs. ”
Source: Mike McConnell, Director of National Intelligence (2007-09), Michael Chertoff, Secretary of Homeland
Security (2005-09), William Lynn, Deputy Secretary of Defense (2009-11), Wall Street Journal (Jan 27 2012)





Barriers that
could prevent
job loss from

Cyber and
Existing IP
physical theft




A fifth of Western school leavers are functionally illiterate:

Percentage of students who do not attain the essential
reading skills needed to participate productively in society
30

25

20

15

10

5

0

Source: OECD PISA 2009.



The Chinese take advantage of the best education in the West:

1978 - 2007
Number of Chinese students studying abroad Number of Chinese students returning home
160000 50000
140000 45000
40000
120000
35000
100000 30000
80000 25000
60000 20000
15000
40000
10000
20000 5000
0 0
1978
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007

1978
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
Source: National Bureau of Statistics of China, 2009; Tina Hsieh and Ershad Ali, Auckland Institute of Studies.

“When our thousands of Chinese students abroad return home, you will
see how China will transform itself.”
Deng Xiaoping, Former Leader of the People’s Republic of China



And, indeed, they are innovating:

Patents granted to China Global percentage of patents granted to
90,000 China
10
80,000
9
70,000
8
60,000 7
50,000 6

40,000 5
4
30,000
3
20,000
2
10,000 1
0 0
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010

1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
China’s universities graduate more than 10,000 science PhDs each year.
Source: World Intellectual Property Organization, McKinsey Quarterly.





Barriers that
could prevent
job loss from

Cyber and
Existing IP
physical theft

Collapsing
education set-up





Wage disparities
between OECD
countries result
in an almost
insuperable
competitive
inevitably fall.
advantage
for the ‘East’.


OECD wages must fall…
In the West, average wages have plummeted
- from 3% real annual increases to 3% real annual declines:

Average annual growth rates of real average wages
1995-2000 2001-07 2008-10 2011
4

3

2

1

0

-1

-2

-3

-4
United States United Kingdom Source: OECD; 2011: BLS and ONS.


Precisely as one would expect, it is the low- and medium-skilled workers who
are losing out, while the most skilled retain their comparative advantage:

Annual percentage change in nominal weekly pay in UK by pay percentile
2010 2011
2.5 2.5

2 2

1.5 1.5

1 1

0.5 0.5

0 0

-0.5 -0.5

-1 -1

-1.5 -1.5
10 20 30 40 50 60 70 80 90 10 20 30 40 50 60 70 80 90

Note that inflation in the UK has been 5%, so wages are in fact plummeting.
Source: Annual Survey of Hours and Earnings (2009, 2010, 2011) UK Office for National Statistics.


We have every reason to think the trend will continue, leading to enormous
downward adjustment, disruption and dislocation for Western workers:

2010 2020? Equilibrium Beyond
price 2025* that?

OECD
daily wage $135
$100

$60
?
China/India
daily wage
$2-12

$20
?
Inflation and currency collapse seem to be the most likely ways
by which this process will be managed in the medium term
* Assumes annual world GDP growth rate of 5%; constant prices.




Ineffectual
credulous voters

Starting with the
Greenspan Put (1987),
governments, corporates This has been elevated Continued indefinitely,
and individuals have to a religion by the neo- this will destroy our
sought to borrow to fund Keynesians. economies.
the maintenance of an
unmaintainable lifestyle.


Ineffectual governments…
Since 1987, the response to any economic downturn
has been to flood the system with cheap money:

Fed Rate
25

20

15

10

5

0

36


For today’s Keynesians, there seems never to be a good time to run a surplus:

Surpluses and deficits (% GDP)
6

4

2

0

-2

-4

-6

-8

-10

-12

-14
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Japan United Kingdom United States Euro area Source: OECD.


The result of low interest rates (‘easy money’) and government deficits is
staggering levels of debt:

Total debt in selected countries around the world as percent of GDP
Households Nonfinancial business Government Financial Institutions
Ireland
Japan
Portugal
United Kingdom
Spain
Greece
France
United States
Italy
Germany
0% 100% 200% 300% 400% 500% 600% 700%

Source: McKinsey Global Institute (MGI), "Debt and deleveraging: Uneven progress on the path to growth," January 2012.

“The relationship between government debt and real GDP growth is weak for debt/GDP
ratios below a threshold of 90 percent of GDP. Above 90 percent, median growth rates fall by
one percent, and average growth falls considerably more.”
Reinhart and Rogoff, ‘Growth in a Time of Debt’, American Economic Review (May 2010)



All are agreed: we should spend our way out of this.

“Unfortunately, with savings going up to 5, 6, 7 percent, aggregate
demand is going to be weak. The only thing to fill it is government.”
Joseph Stiglitz, Aug 4 2010

“Standard macroeconomic analysis, applied in a standard way,
says that aggressive tightening of fiscal policy, of the kind
we are seeing now, is inappropriate and unnecessary.”
Jonathan Portes, New Statesman Aug 24 2011

“The idea, amazingly widely accepted, that the UK
cannot borrow any more seems quite absurd.”
Martin Wolf, Financial Times Nov 24 2011

“Isn't the truth of the matter, Mr Alexander, that you are collaborating
in a doctrinaire Conservative experiment which is not working?”
Jeremy Paxman, Newsnight Jan 25 2012

“That which cannot go on forever… won't.”
Herb Stein's Law



Indebtedness becomes a vicious downward spiral, Keynes à la grecque

Consumer borrowing Starts with normal counter-cyclical deficit spending
Corporate borrowing Spending proves sticky
(civil servants, benefits culture, etc.)
Banking borrowing
Debt-to-GDP levels begin to rise,
Credit market Government but below Reinhart/Rogoff levels
rebellion leads deficit
to financial Deficit spending distorts economy
spending
crisis Borrowing masks the problem
Calamity exposes those without swimming costumes
Greater Increase in
funding stock of Deficits suddenly massive
need debt
Judgment day can be put off by devices such as QE
(lowering the rate of interest)
Keynesian
monetary Higher level Keynesian voices warn against any pullback in
tactics of interest spending as per prior point
(e.g. QE) payments
temporarily The pain of restructuring becomes increasingly
lower interest impossible with every iteration
rates Higher rate Worsened The doom loop accelerates
of interest credit rating
Voila! Greece goes to Argentina


‘Entitled’ groups…
The problems are exacerbated by the claims made on shrinking
Western economies by an oddly disparate set of ‘entitled’ groups:



Ineffectual
credulous voters

Bankers CEOs Public sector Benefit claimants


The problems are exacerbated by the claims made on shrinking Western
economies by an oddly disparate set of ‘entitled’ groups:

Bankers’ sources of excess profits
(that also lead to massive socialised losses)
Cheap funding from government stimulus

Oligopoly in many markets (corporate lending, mortgages, credit cards)

Foolish acceptance of high prices by customers where oligopoly does not exist

Excessive leverage

Inside trading knowledge

Big bet culture

Willingness of boards and shareholders to countenance excessive rewards, in particular,
because the previous points create excessive profits


Bankers…

The financial sector has claimed a growing share of Western economies:

Financial sector compensation and profits as share of GDP
1929 - 2010
8
7.6%
7 6.9%
$547 billion in 2010
dollars
Share of overall GDP (%)

6
3.8%
3.7%
5

4

3

2

1

0

Source: Bureau of Economic Analysis (BEA) data on National Income and Product Accounts (NIPA), tables 1.1.5 and 1.1.4.


Bankers…

The excess profits in turn lead to excessive remuneration:

Historical excess wage in the financial sector
relative to nonfarm private sector, accounting for
education level, skill premium and unemployment risk
40% 1933 Glass-Steagall Act
1933 Securities Act
1934 Securities Exchange Act
1939 Trust Indenture Act
1940 Investment Advisers Act
1940 Investment Company Act
1956 Banking Holding Company Act
30% 1980-84 Removed interest-rate ceilings
(from Glass-Steagall Act)
1994 Riegle-Neal Interstate Banking &
branching efficiency act (repeals parts of
Bank Holding Co. Act)
1996 Investment Advisers Act amended
1999 Graham-Leach-Bliley Act (repealed
Glass-Steagall & parts of Bank Holding
Co. Act)
20% 2002 Sarbanes-Oxley Act

10%

0%

1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010

Source: Philippon and Reshef, Wages and Human Capital in the U.S. Financial Industry: 1909-2006 (2008).





Ineffectual
credulous voters



CEOs…
CEOs in the US and the UK have also ‘captured’ their
companies’ remuneration processes:

Ratio of average annual CEO compensation to average worker compensation, 1965-2010
350
299-to-1
300 277-to-1
243-to-1
250

200

185-to-1
150 126-to-1

100
100-to-1
24-to-1 35-to-1
50

0
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
Rectifying this would be important to ensure a cohesive society,
but the impact will be limited (too few CEOs).
Source: Adapted from Lawrence Mishel and Josh Bivens, Economic Policy Institute Briefing Paper #331 (2011).





Ineffectual
credulous voters



Public sector…
With the exception of the highest skilled,
public sector workers are significantly overpaid:
Average public/private sector pay gap by qualification
% Pay gap (public minus private sector) The government’s
UK US
(excluding pensions) (including pensions)
own conclusion:
8 40

6 30
“Allowing for [job]
4 20
differences as far as
2
10 possible, in April
0 2010, public sector
0
-2 employees were paid
-10
-4 on average 7.8 per
-6
-20 cent more than
-8 -30 private sector
High School Some Bachelor's Master's Prof. degree
No qual. Other
qual.
GCSE
A-C
A-Level Higher ed. Degree Diploma college degree degree or PhD
employees.”
NB: UK analysis excludes pension contributions, so greatly
understates the already large pay gap (private sector companies mostly
no longer have DB schemes).
Source: ONS, Estimating differences in public and private sector pay (July 2011);
Source: ONS.
CBO, Comparing the compensation of federal and private-sector employees (Jan 2012).


Public sector workers are also getting less productive, while the private Public sector…
sector company necessarily finds improvements, or closes down. Thus the
public sector is becoming a heavier and heavier drag on the public purse:

Annual growth in productivity in the UK
(1997 = 100)
Private Sector Public Sector
130

125

120

115

110

105

100

95

90
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Source: ONS, Estimating differences in public and private sector pay (July 2011).





Ineffectual
credulous voters



Benefit claimants…

Real spending on welfare continues to outstrip GDP growth:

Growth rates in GDP and welfare spending
1200
CAG: 3.87%

1000

800

600
CAG: 2.39%
400

200

0

Source: HMT, IFS Social Security GDP


Under Blair and Brown, spending on benefits should have Benefit claimants…

fallen as the economy boomed. It didn’t – becoming a
redistribution rather than a safety net.
UK welfare spending and unemployment 1974 - 2011
14.5
Welfare spending 12.0
13.5 (% GDP, LHS)
12.5 10.0

11.5
8.0
10.5

9.5 6.0

8.5 Unemployment rate 4.0
(%, RHS)
7.5
2.0
6.5

5.5 0.0

Source: HMT, IFS.



The system really has broken:

Caseload (1,000s) of working age clients by type of claim and duration
(May 2011)
3000

2500

2000

1500

1000

500

0
Job Seeker ESA and Lone Parent Carer Others on Disabled Bereaved
incapacity income related
benefits benefit
Up to 3 months 3-6 months 6-12 months 1-2 years 2-5 years 5 years and over
Source: DWP.


The cost is exacerbated by the large amount of Benefit claimants…

money spent on those not in need, as the state seeks
to develop a dependency mentality in its clients:

Percentage of benefit expenditure going to middle class households
90

80
“With universal suffrage, it becomes impossibly
70 expensive to bribe all of the electorate.”
60

50

40

30

20

10

0
Maternity pay Child benefit Disability living Retirement Housing benefit Student support
allowance pension
1998-99 2008-09 Source: Reform, The money-go-round (Oct 2010).



Managing the welfare state is, in itself, a very expensive operation:

Employees by Government Department (2011)
140,000 Take your Give it back to
money you
120,000

100,000 Manage Stop
the climate
80,000 economy change

60,000

40,000

20,000

0
HMRC Department Home Department Department DEFRA Department HM DECC
for Work Office for of Health for Treasury
and Education Transport
Pensions
Source: ONS, DWP.
DWP salaries in 2011: £3.5bn




Ineffectual
credulous voters


Poor allocation…
Since 1992, spending on health has ballooned (mostly on salaries),
while growth in education spending has fallen behind:

UK public spending (real £bn) NHS Education
140.0
CAG: 4.89%
120.0

100.0
CAG: 3.14%

80.0

60.0

40.0

20.0

0.0
1953-54 1958-59 1963-64 1968-69 1973-74 1978-79 1983-84 1988-89 1993-94 1998-99 2003-04 2008-09
Source: ONS. Compound annual growth calculated from crossover point (1993).




Reorient Accept
Reform the Develop new immediate cuts
government Tax properly in living
banks technologies
spending standards


Potential actions

Reorient Accept
banks technologies
spending standards

Education

Infrastructure


Reallocating public spending towards infrastructure and Reorient spending…

education has a large and highly statistically significant
effect on the long-run growth rate.

Effect of public spending mix on the long-run growth rate
0.14
0.12
0.1
0.08
0.06
0.04
0.02
0
-0.02
Education and
-0.04 infrastructure the key
-0.06
Transp & Education Health Defence Econ Housing Gen. pub. Welfare
Comms services services
Source: Gemmell, N., Kneller, R. and I. Sanz, “The Composition of Government Expenditure and
Economic Growth: Some Evidence from OECD Countries”, European Economy (2008).


Reorient spending…

The importance the West assigns to good teachers has plummeted:

Percentage of new American teachers who graduated
in the upper third of their classes
100
90
80
70
60
50
40
30
20
10
0
1930 2012
Source: McKinsey & Company, “Closing the talent gap” (2010); Milken Institute.


The strongest performers among high-income countries tend
to invest more in teachers:
545

540
OECD analysis
Korea
Finland “In general, the
535
countries that perform
530 well in PISA attract the
Mean reading scores

best students into the
525 teaching profession by
520 Japan
offering them higher
salaries and greater
515 Australia professional status.
510 High-performing
Netherlands
Belgium countries tend to
505
Norway prioritise investment in
Poland
500 Estonia Iceland teachers over smaller
United States classes.”
495
Source:
0 0.5 1 1.5 2 2.5
OECD Does Money Buy
Ratio of teacher salaries to GDP per capita Strong Performance in PISA?
R² = 0.61227



Quality of teaching matters above all:

Impact on student lifetime incomes by class size and teacher effectiveness
(compared to average teacher)
$1,000,000
90th percentile teacher
Impact on student lifetime earnings

$500,000 75th percentile teacher

$0

-$500,000


-$1,000,000
Class size
Source: Raj Chetty (Harvard), John N. Friedman (HKS), and Jonah E. Rockoff (Columbia), The Long-Term Impacts of
Teachers: Teacher Value-Added and Student Outcomes in Adulthood, NBER Working Paper No. 17699 (Jan 2012).




A teacher one standard deviation above the mean
effectiveness annually generates marginal gains of
over $400,000 in present value of student future
earnings with a class size of 20 and proportionately
higher with larger class sizes. Alternatively, replacing the
bottom 5-8 percent of teachers with average teachers
could move the U.S. near the top of international math
and science rankings with a present value of $100
trillion.
Source: Eric A. Hanushek (Stanford), The Economic Value of Higher Teacher Quality,
NBER Working Paper No. 16606 (Dec 2010).




Replacing a teacher whose value added is in the bottom
5% with an average teacher would increase the present
value of students’ lifetime income by more than $250,000
for the average classroom.
Source: Raj Chetty (Harvard), John N. Friedman (HKS), and Jonah E. Rockoff
(Columbia), The Long-Term Impacts of Teachers: Teacher Value-Added and Student
Outcomes in Adulthood, NBER Working Paper No. 17699 (Jan 2012).




With an annual discount rate of 5%, the parents of a
classroom of average size should be willing to pool
resources and pay an 84th percentile teacher considering
quitting approximately $130,000 ($4,600 per parent) to
stay and teach their children during the next school year.
Source: Raj Chetty (Harvard), John N. Friedman (HKS), and Jonah E. Rockoff
(Columbia), The Long-Term Impacts of Teachers: Teacher Value-Added and Student
Outcomes in Adulthood, NBER Working Paper No. 17699 (Jan 2012).


Potential actions

Reorient Accept
banks technologies
spending standards

Education

Infrastructure



Opportunities for high-return infrastructure investment abound:

Infrastructure needs in the US Exemplary infrastructure needs in the UK

US infrastructure ‘GPA’ Wolfson’s ‘Brain Belt’ Oxford-Cambridge motorway/science
ecosystem
A B C D
nil nil Solid waste (+) Energy (+) Other university/science/business ecosystem infrastructure

Bridges Aviation
Public parks and Dams Manchester-Sheffield motorway
recreation (-) Hazardous waste
Rail (-) Schools Other removal of congestion through building new
Transit roads and improving efficiency of existing roads
Drinking water (-)
Inland waterways (-) Local bypasses
Levees (-)
Roads (-)
Boris Island
Wastewater (-)
Source: American Society of Civil Engineers.
Universal WiMAX or fibre broadband


Potential actions

Reorient Accept
banks technologies
spending standards


The continued economic decline of the west

The continued economic decline of the west

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Viewers also liked

Viewers also liked (7)

Similar to The continued economic decline of the west

Similar to The continued economic decline of the west (20)

Recently uploaded

Recently uploaded (20)

The continued economic decline of the west