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The Future is Now
In this book, Bob McDonald shifts his attention to global energy sources and demonstrates how the pandemic’s worldwide shutdowns may have been just what was required to convince us that a greener future is possible.
Not another “wake-up call,” not another exhortation to pay attention to climate research. This is an investigation of the amazing tools that our species has at its disposal to escape the disaster we’ve created. To counterbalance the sense of despair that permeates most environmental conversations, it is a work of tremendous positivity.
Though several alternative energy sources, including solar, wind, and geothermal energy, have been around for decades, they are insufficient on their own. Small nuclear reactors the size of office desks and space-based solar power satellites with massive mirrors that can absorb sunlight, transform it into microwaves, and beam it to the ground to light up large cities would provide more electricity. We will harvest energy from hydrogen, tides, and waves. Smog-emitting tailpipes will no longer be found on automobiles. We’ll purchase food locally.
One of the economic areas with the quickest rate of growth is green technology, which will only take off as new goods are developed and existing ones continue to perform better. We are entering a new green era; use this book as a roadmap to the future. (Penguin Canada)
Since 1992, Bob McDonald has hosted Quirks & Quarks on CBC Radio. He often contributes science commentary to CBC News Network and serves as a science correspondent for The National on CBC TV. The Canadian Science Writers Association Book Award shortlisted his book Measuring the Earth with a Stick.
Forecasts for the World Economy in 2024
As 2023 draws to an end, the world economy is, for the most part, performing better than anticipated. Not only has the United States escaped a recession, but its growth has been consistent. In much of the world, unemployment has been low and—more importantly—inflation is declining.
The economic picture is still rather murky, though. Climate disasters are getting more frequent, conflicts are wreaking havoc throughout the planet, and higher interest rates are slowly making their way through the system. The global economy’s growth prospects for the next five years are at an all-time low.
Although the financial environment in 2024 will still be challenging and unpredictable, there are several important themes and issues that company executives should be aware of as we approach the new year. Even though the U.S. economy is the main focus of this examination, many of these same problems apply to much of the world.
Is inflation under control?
The consumer price index in the United States peaked at little over 9% higher than the previous year in June 2022. Since then, it has dropped precipitously, to 3.1% in November, which is close to the Fed’s stated aim of 2%.
Is inflation now under control? The optimistic case begins with rental costs, which account for a significant portion of household spending. Rent costs are growing much more slowly, but this takes a long time to show up in inflation numbers since the majority of renters in the United States sign year-long leases. As additional leases expire and their values remain steady or only slightly rise, the CPI may decrease even more. According to this logic, inflation is about where it should be; the only lag is in the numbers.
According to Matthew Klein, an economic expert and creator of The Overshoot newsletter, despite improved news on rent, we’re still “not quite” there on inflation. “The majority of the excessive price increases from 2021 to 2022 were caused by one-time events related to the pandemic, the response to the pandemic, and Russia’s invasion of Ukraine.” According to Klein, the impact of such disruptions peaked in the middle of 2022 and has since diminished. “Overall inflation remains somewhat faster than before the pandemic,” according to the report, because salaries and spending (in dollars) are both growing somewhat faster than before. If underlying nominal retail expenditure is expanding at 7% per year, inflation is unlikely to remain around 2% per year for long.”
The Federal Reserve is concluding the year on a very upbeat note, not only maintaining interest rates unchanged but also hinting at numerous rate decreases in 2024. However, according to Mihir Desai, a finance professor at Harvard Business School and co-host of the After Hours podcast, that route is not predetermined and things might still go wrong. “Absent a significant economic downturn, the final descent to 2% inflation will take longer, and have more zigs, zags and potholes than typically considered,” he said. “As the saying goes, the longest mile is the last mile home.”
(In Europe, where the Ukrainian conflict has had a more dramatic impact on oil prices, the European Central Bank and the Bank of England have remained slightly more hawkish in their remarks.)
Is the historically strong labor market coming to an end?
One of the most contentious issues in the previous two years has been whether unemployment must grow in order to reduce inflation. Fortunately, it hasn’t had to raise much.
“This is still one of the best times in U.S. history to be looking for a job,” Klein said. “The proportion of people in their prime working years is close to the highest it has ever been, though it remains below the late 1990s peak.” The proportion of persons working part-time when they would like to work full-time is near an all-time low.”
At least modestly, the labor market is cooling. According to LinkedIn, the number of new recruits has decreased dramatically in the last year, as has the number of job vacancies per jobless person. However, the unemployment rate in the United States remains very low. And, as The Economist has argued, the long-term picture for workers in the United States and Europe appears promising.
Can financial markets withstand rising interest rates?
After a textbook bank run, the FDIC took over Silicon Valley Bank in March. What is the root cause? Higher interest rates reduced the value of its bond holdings, jeopardizing its balance sheet and frightening its consumers. Signature Bank and First Republic both fell soon after. Higher interest rates have been affecting the economy, weighing on bondholders’ balance sheets and boosting the cost of borrowing. Could they cause financial market instability next year?
“All the impacts that one would expect from higher interest rates will still happen (and are happening) but just in slow motion relative to expectations,” Desai said in a statement. “As a result, the economy will come to a halt gradually rather than abruptly – perhaps by a thousand cuts.” That slowing process will be less immediately disruptive or noticeable, but more long-lasting and difficult to build an escape from given policymakers’ limited fiscal and monetary options.”
Corporate bankruptcies increased substantially in the United States this year, but remain well below the highs of the Great Financial Crisis.
“Many businesses are vulnerable to floating-rate debt, and they may feel squeezed at some point.” There have been reports of certain leveraged buyouts failing,” notes Klein. “However, the experiences of Australia, Canada, Europe, and the United Kingdom — other wealthy countries with far more short-term borrowing than we do — suggest that strong growth can make higher interest rates bearable.” While there may be hardship for some, the aggregate economic impact may be minimal.”
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