April 16 2024
Going Postal
1 Oil traders shrug off Iran attack
2 OPINION Successful defense of Israel bolsters allies, weakens Israel’s independence
3 Tesla to layoff 10% of workforce
4a Great Boomer Wealth Transfer set to begin
4b Older voters control world’s advanced democracies
4/16/1900 US Post Office issues 1st books of postage stamps
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1 Oil traders shrug off Iran attack
Crude oil's initial reaction to Iran's drone and missile attacks on Israel was muffled on Monday, with prices of the major contracts barely shifting. There were fears that the barrage of weapons fired at Israel signalled a major escalation of conflict in the Middle East, and the oil price would shift higher in response to heightened fears of possible supply disruptions. But the price moves in early trade in Asia were moderate, with global benchmark Brent crude futures and U.S. West Texas Intermediate (WTI) contracts little changed.
The message the market appears to be sending is that, for now, the risk of a major escalation and retaliatory strikes by Israel is relatively low.
2 OPINION Successful defense of Israel bolsters allies, weakens Israel’s independence
This successful interception sends a clear message also to the Israeli government that it still relies on the US and regional allies to ensure Israel’s security in the air space. They could not have succeeded in deterring Iran’s complex attack without them. Moving forward, this means that the US administration will have much more leverage at the negotiation table to request from Israel respect for its conditions, be it for a ceasefire in Gaza or a two-state solution. The other signal it sends is towards Russia. The successful air shield that prevented drones from entering Israeli airspace could protect Ukraine, too, if Russia insists on continuing its attacks. It shows to all potential challengers that the US is still the world’s most effective military force and one that can organise capable regional defence alliances.
Will we see another round of retaliation? Yesterday, Israel’s five-person war cabinet could not decide on how to respond to the attack. Depending on the options they will be presented with in the coming days, there will be a decision eventually. If they were to show restraint in the response to Iran’s attack, they are most likely to ask for a price in return. Already some raised the prospect for the Islamic Revolutionary Guard Corps, which orchestrated Saturday night’s attack, to be categorized as a terrorist group. But Israel already got the best prize of all from this episode. The nearly complete disruption of all drones and missiles assured the Israeli people that they are safe under the current air defense shield, and that they have the support of Israel’s allies when attacked. They would not have experienced this without Iran’s attack.
Eurointelligence
Ed note: I’m skeptical there was any lesson for Russia in this episode
3 Tesla to layoff 10% of workforce
Tesla plans to slash more than 10% of its global workforce and two of Elon Musk’s top deputies said they were leaving the company, a shake-up that reflects a broader cooling in consumer demand for electric vehicles. The changes revealed Monday come as the world’s most valuable automaker—long valued by Wall Street for its growth potential—adjusts to a weaker market for its battery-powered cars.
As the electric-vehicle market has cooled, Musk has pushed to increase adoption of a souped-up version of the company’s driver-assistance software called “Full Self-Driving.” The promise of this technology—and the hope that the company will one day develop fully autonomous vehicles—has underpinned Tesla’s lofty market valuation. Employees recently were told to give priority to a robotaxi project, the Journal has reported.
4a Great Boomer Wealth Transfer set to begin
By 2045, around $90tn in the US alone is set to be transferred from those born before 1964 to their heirs, according to research by Cerulli Associates. Many argue that governments should target that wealth rather than taxing the incomes and consumption of younger generations often struggling with higher education and housing costs.
Wealth taxes in general, and inheritance taxes in particular, currently collect very little revenue. But Lucas Chancel, co-director of the World Inequality Lab and Professor at Sciences Po and Harvard Kennedy School, says they are important “because they help prevent the reproduction of inequalities from a generation to the next and have the power to raise money for public goods”.
Swiss bank UBS, one of the world’s biggest wealth managers, estimated last year that the 1,023 billionaires around the world aged 70 or over had a combined worth of $5.2tn.
It also found that in 2023 more new billionaires were created through inheritance than through entrepreneurship for the first time since its annual survey began in 2015.
But inheritance taxes are politically difficult, despite their limited reach, partly because voters feel strongly that the bequests they make to their children are none of the government’s business. Experts warn that higher estate taxes alone are unlikely to mend state finances and will do little to address inequality, either between generations or within them. But they could result in forced asset sales that disrupt orderly markets and create disincentives to save, invest or take risks.
4b Older voters control world’s advanced democracies
The graying of electorates—and the officials who represent them—is becoming increasingly common in advanced economies, as people live longer and birthrates plunge. The world’s 10 largest countries by population now all have leaders older than 70. The advancing age of voters has raised concerns that governments, backed by bigger blocs of seniors, will give priority to programs geared toward the elderly at the expense of public spending aimed at younger people.
Younger voters in the U.S. are also experiencing a disconnect with their representatives. The two major presidential candidates in November’s elections—81-year-old President Biden and 77-year-old Donald Trump—are decades older than them. The median age of U.S. senators is 65.
Millennials and Gen-Z voters will represent 48.5% of the eligible electorate this fall
“If you look at what Congress has done in this world, they continue to spend, reinforce and help programs for senior citizens at the expense of doing something dramatic for younger people,” said Winograd, who, with Hais, has written three books on millennials and politics. Younger Americans show more interest in third parties or abstaining from voting, they said.
The world has never before witnessed a moment where older people have begun outnumbering younger ones, meaning many democracies are becoming “gerontocracies,”
The number of seniors, relative to working-age individuals, will double in wealthy economies over the next several decades—and will drag on global growth from 2040 onward, according to the Organization for Economic Cooperation and Development. Paying for soaring public debt for pensions, healthcare and other services could spur intergenerational inequalities, too, the OECD said.
4/16/1900 US Post Office issues 1st books of postage stamps
Thanks for reading!
