WEBVTT - How Global Catastrophe Has Only Made Billionaires Richer 0:00:14.840 --> 0:00:17.239 Hello, and welcome to Stephanomics, the podcast that brings the 0:00:17.239 --> 0:00:20.000 global economy to you, and that, of course was the 0:00:20.079 --> 0:00:23.480 mighty Mega Hunter t Rex, a toy you might want 0:00:23.480 --> 0:00:25.880 to buy your favorite three year old for Christmas this year. 0:00:26.360 --> 0:00:29.600 But with all the talk of global supply chain snarl ups, 0:00:29.920 --> 0:00:33.239 I know you're wondering, will those vital toy supplies from 0:00:33.240 --> 0:00:36.360 the North Pole and China get through and if so, 0:00:36.640 --> 0:00:40.200 what cost? Well, we have the very latest news from 0:00:40.200 --> 0:00:43.560 Hong Kong in a minute. We also have some hard 0:00:43.680 --> 0:00:47.040 numbers on the soaring wealth of the world's billionaires, and 0:00:47.120 --> 0:00:49.400 we take a few minutes to consider the new traffic 0:00:49.479 --> 0:00:54.400 light coalition in Germany and Angela Merkel's legacy after sixteen 0:00:54.480 --> 0:00:57.600 years as Chancellor. Stay tuned too if you want to 0:00:57.640 --> 0:00:59.800 find out what her staff gave her as a going 0:00:59.840 --> 0:01:03.080 a Way present this week. Clue, it's not socks and 0:01:03.160 --> 0:01:06.759 it's not a watch. But first, here's our senior correspondent 0:01:06.800 --> 0:01:09.520 in the current in Hong Kong with that vital update 0:01:09.640 --> 0:01:12.000 for anyone who has yet to finish their Christmas shopping 0:01:22.280 --> 0:01:35.240 m it's shaping up to be an expensive Christmas for 0:01:35.319 --> 0:01:38.880 Santa Claus. As the big supply crunch of one pushes 0:01:38.959 --> 0:01:41.840 up prices for toys. There's even a risk of some 0:01:41.959 --> 0:01:45.400 presents won't get to Santa Sligh in time. So I 0:01:45.400 --> 0:01:48.320 went along to meet Dave Cave, the owner of Dragon 0:01:48.400 --> 0:01:51.720 Eye Toys in Hong Kong, whose products include the Mighty 0:01:51.800 --> 0:01:55.280 Mega Hunter t Rex that you just heard, to find 0:01:55.320 --> 0:01:58.360 out the latest state of play for toymakers. But before 0:01:58.360 --> 0:02:00.360 we dive into the details, here's a dem of one 0:02:00.400 --> 0:02:04.680 of his dinosaurs. What we've done really well with should 0:02:04.680 --> 0:02:09.040 do a talk back junior megasaur. It has three play 0:02:09.040 --> 0:02:12.200 me functions on the actual dinosaur. It's about seven or 0:02:12.240 --> 0:02:14.920 eight in she's long, same in the height. It's a 0:02:14.960 --> 0:02:20.040 really cooled dinosaur. So when you press its foot, you 0:02:20.120 --> 0:02:24.639 hear it walking. When you press its tummy you can 0:02:24.680 --> 0:02:27.639 hear it's munching away there. And when you press its 0:02:27.639 --> 0:02:33.080 back you can hear it roaring. And when you press 0:02:33.160 --> 0:02:36.040 the top of the dino's head and you say something 0:02:36.120 --> 0:02:40.040 like welcome to Dragon Eye Toys, this is the talk 0:02:40.120 --> 0:02:44.680 back Dinoh, welcome to Dragon Eye Toys. And I can 0:02:44.720 --> 0:02:50.359 tell you parents and kids absolutely love it. Cave cells 0:02:50.400 --> 0:02:53.800 to leading retailers around the world. Unlike every other toymaker. 0:02:54.080 --> 0:02:56.760 He has spent a year dealing with surging prices and 0:02:56.960 --> 0:03:01.560 mathsfully disrupted transportation. While he's seeing some signs of stabilization 0:03:01.639 --> 0:03:04.880 in the supply crunch, Cave reckons the spike and costs 0:03:05.040 --> 0:03:10.640 still flowing through to consumers. Everybody's toys, everybody's kettles, everybody's 0:03:10.720 --> 0:03:14.000 whatever they're buying. If it's come from China and it's 0:03:14.080 --> 0:03:18.320 arriving in the last quarter of one and the first 0:03:18.360 --> 0:03:22.440 quarter of two, there's going to be pricing creases anything 0:03:22.480 --> 0:03:27.720 from five to depending on the product. Recent data in 0:03:27.760 --> 0:03:30.440 Asia is pointing to some easing of congestion at the 0:03:30.480 --> 0:03:34.359 region's biggest ports, and economists say and easing energy crunch 0:03:34.400 --> 0:03:37.720 in China will also help supply chains. But Cave is 0:03:37.760 --> 0:03:40.320 looking to Chinese New Year in February as a potential 0:03:40.360 --> 0:03:43.720 circuit breaker for the global supply crunch. That's the time 0:03:43.760 --> 0:03:47.160 of year when China's factories shut down for annual holidays, 0:03:47.200 --> 0:03:50.560 and it's normally associated with a lull in global trade. 0:03:50.920 --> 0:03:53.920 Recent data in Asia is already pointing to some easing 0:03:53.960 --> 0:03:57.640 of congestion at major ports, and economists say an energy 0:03:57.680 --> 0:04:00.440 crunch in China is easy and that will also boost supplying, 0:04:00.800 --> 0:04:05.120 so the supply chain is still difficult. The general feel 0:04:05.280 --> 0:04:09.520 is that Chinese New Year tends to be where everything 0:04:09.560 --> 0:04:13.600 breaks off and we restart everything, and so I think 0:04:13.640 --> 0:04:16.760 a lot of people are thinking maybe end of February 0:04:16.760 --> 0:04:21.720 early March things will change. Still cave cautions, it's not 0:04:21.800 --> 0:04:25.640 just supply chain snags that are hitting toymakers. The strength 0:04:25.760 --> 0:04:28.839 of the yuan and high oil prices could leave an 0:04:28.880 --> 0:04:32.680 impact long after ships are sailing on time. Again, I 0:04:32.680 --> 0:04:35.400 would say over the last eighteen months, we've had from 0:04:35.440 --> 0:04:40.400 the factors between a three and ten twelve percent increase 0:04:40.520 --> 0:04:43.000 over that eighteen months, which we've had to pass on 0:04:43.440 --> 0:04:47.400 to our customers as best we can because we you know, 0:04:47.480 --> 0:04:49.599 in our industry you have to be lean and mean, 0:04:49.720 --> 0:04:52.240 and there isn't that extra margin. And I think the 0:04:52.320 --> 0:04:57.960 buyers out there globally realized that prices will go up. 0:04:58.400 --> 0:05:00.880 The question they're all asking is are they going to 0:05:00.960 --> 0:05:07.000 go up again in two Nobody knows. Logically they shouldn't 0:05:07.000 --> 0:05:11.040 go up next year unless something quite fundamental happens within 0:05:11.080 --> 0:05:15.680 the industry and China. So we're looking to stabilize the 0:05:15.720 --> 0:05:19.640 pricing in two. But obviously, as I say, when we 0:05:19.760 --> 0:05:23.839 reset the market in end of February early March, we'll 0:05:23.839 --> 0:05:26.919 get a better indication of where the market is going. 0:05:27.680 --> 0:05:30.000 For now, Santa is going to have to dig a 0:05:30.040 --> 0:05:33.599 little deeper to fill his sleeve. Well, Santa, if you're 0:05:33.640 --> 0:05:36.200 out there, try your best to keep those prices down, 0:05:36.600 --> 0:05:38.720 but unfortunately, I think they're going to be a little 0:05:38.760 --> 0:05:48.160 more expensive than you deliver them last year. Santa for 0:05:48.240 --> 0:06:04.160 Bloomberg News in Hong Kong. I'm end the current now. 0:06:04.200 --> 0:06:06.520 You might have noticed it was a pretty big week 0:06:06.560 --> 0:06:09.960 for Germany, with Angela Merkel stepping down as chancellor and 0:06:10.000 --> 0:06:14.280 a new traffic light coalition taking over under Chancellor Schultz, 0:06:14.760 --> 0:06:17.560 the Social Democrat leader who's featured on this podcast not 0:06:17.640 --> 0:06:21.760 so long ago. So our Berlin producer Aggie Cantrill is 0:06:21.880 --> 0:06:24.560 at the German Parliament and I think could campaint the 0:06:24.560 --> 0:06:26.880 scene a bit for us, Aggie, I should say, we're 0:06:26.920 --> 0:06:29.960 talking about an hour after the official handover of power 0:06:30.160 --> 0:06:33.840 took place in the German Chancery. But it's it's been 0:06:33.880 --> 0:06:37.080 a pretty momentous day. Just tell us what's going on. Yeah, 0:06:37.160 --> 0:06:40.360 highest Japanese, So it has been quite a long day 0:06:40.400 --> 0:06:43.800 really in the in the Bundestag because firstly the Bundestag 0:06:43.880 --> 0:06:46.880 has to officially vote in the new chancellor, which they 0:06:46.880 --> 0:06:51.440 did um with he gained a majority, I believe of 0:06:51.720 --> 0:06:57.000 three and nine round about um. But then after that 0:06:57.080 --> 0:07:00.560 he was sworn in as Chancellor along within you roster 0:07:00.640 --> 0:07:04.760 of ministers, ministers that come from the Greens, the SPD 0:07:05.000 --> 0:07:08.880 and the Liberal Free Democrats, and then he went to 0:07:09.760 --> 0:07:13.400 meet Merkel at the Chantrey and have the official hand 0:07:13.440 --> 0:07:17.400 over this afternoon. And it's the coalition you just described 0:07:17.400 --> 0:07:19.880 it briefly, but it's it's been known as the traffic 0:07:19.960 --> 0:07:24.040 Light Coalition, which sounds very exciting, but just talk us through. 0:07:24.840 --> 0:07:27.920 So the traffic Light Coalition, I mean, it gets its 0:07:28.000 --> 0:07:30.000 name from the colors of the parties, as do all 0:07:30.040 --> 0:07:34.760 the coalitions. And thankfully this isn't one with clumsily named 0:07:34.840 --> 0:07:38.160 flag as many of the other coalitions are named. But 0:07:38.280 --> 0:07:42.960 this one is a coalition of the SPD that represents 0:07:43.000 --> 0:07:47.160 the red, the Social Democrats, the Greens that are obviously 0:07:47.560 --> 0:07:50.440 as their name would suggest, and the Liberals that are 0:07:50.440 --> 0:07:55.000 classically a yellow color. And there is a bit of 0:07:55.040 --> 0:07:59.040 a distance, especially between the Greens and between the FDP 0:07:59.520 --> 0:08:02.560 on it. A few issues when it comes to economic 0:08:02.600 --> 0:08:06.040 and fiscal policy, especially the Greens were always seen as 0:08:06.040 --> 0:08:09.920 these big spenders, all of these party that had questioned 0:08:09.960 --> 0:08:13.440 the merits of things like Germany's constitutional debt break, and 0:08:13.520 --> 0:08:17.640 yet now because of the compromises reached during the coalition agreement, 0:08:18.120 --> 0:08:23.240 we actually see probably a more fiscally conservative government than 0:08:23.320 --> 0:08:25.920 we would have expected if it were just, for instance, 0:08:25.960 --> 0:08:29.200 the Greens and the SPD, because there's a moderating force 0:08:29.400 --> 0:08:32.520 of the FDP that now are in charge of the 0:08:32.559 --> 0:08:35.240 finance ministry. And later on I think we're going to 0:08:35.320 --> 0:08:38.280 get a little bit into how these three parties could 0:08:38.280 --> 0:08:41.040 possibly agree because they sound very different. But one of 0:08:41.080 --> 0:08:43.760 the one of the striking points to come out of 0:08:43.800 --> 0:08:46.679 the coalition agreement that I think court people's eye outside 0:08:46.720 --> 0:08:49.960 Germany was the lowering of the voting age to sixteen. 0:08:50.120 --> 0:08:53.040 And that was I gather that was in a responsive 0:08:53.080 --> 0:08:55.920 part to a big grassroots movement. How did that happen? 0:08:56.440 --> 0:08:59.360 I think something that's really notable about that lowering of 0:08:59.440 --> 0:09:02.480 the voting age is it's something that actually appeals also 0:09:02.559 --> 0:09:06.400 to those parties. Specifically, the Greens and the FDP have 0:09:06.760 --> 0:09:10.520 a very strong support with among younger Germans. And I 0:09:10.559 --> 0:09:15.080 think there's an interesting conversation to be had about whether 0:09:15.280 --> 0:09:17.600 or not it's not a question of the c DU 0:09:17.880 --> 0:09:21.560 and the SPD losing out over all, but the fact 0:09:21.600 --> 0:09:25.680 that they're losing dominance within younger voters, and those voters 0:09:26.000 --> 0:09:29.160 are looking for a sort of alternative to the left 0:09:29.840 --> 0:09:35.480 right or progressive conservative dichotomy, but within two other parties, 0:09:35.520 --> 0:09:39.359 a party, one party that stands for digitalization and modernization, 0:09:39.600 --> 0:09:43.359 and another party that stands for a lot of progressive 0:09:43.400 --> 0:09:47.880 social issues and environmental policy. That's the Greens. Yes, that 0:09:47.920 --> 0:09:50.800 would be the Green. It's been quite low key though, 0:09:50.880 --> 0:09:53.160 or maybe it's just that I'm not sitting in Germany, 0:09:53.160 --> 0:09:56.160 but Angle and Michael has been around for sixteen years, 0:09:56.600 --> 0:09:59.480 has been this momentous figure. I mean, as it is, 0:09:59.520 --> 0:10:01.520 it just not a big deal this week because you've 0:10:01.520 --> 0:10:03.120 had you feel like you've been saying goodbye to her 0:10:03.160 --> 0:10:06.960 for at least a year. I actually think it has 0:10:07.000 --> 0:10:09.319 been quite a big deal. But I think the real 0:10:09.640 --> 0:10:12.800 momentous occasion was the election itself, which of course happened 0:10:12.840 --> 0:10:14.880 a couple of months ago now. And I think it's 0:10:14.920 --> 0:10:18.160 because now everyone's been wrapped up in the coalition agreement 0:10:18.720 --> 0:10:22.080 that it's sort of passed them by that this was 0:10:22.080 --> 0:10:25.520 actually Merkle's official last day. I think the real, the 0:10:25.520 --> 0:10:29.440 real drama happened around the around the election itself, and 0:10:29.480 --> 0:10:32.760 of course Merkele's party losing out on another term without 0:10:32.800 --> 0:10:36.000 her in charge. Well, it didn't pass us by on Stephanomics. 0:10:36.120 --> 0:10:37.760 What do you think Angler Mike is going to do now? 0:10:38.800 --> 0:10:40.600 I'm pretty sure she's going to go on a lot 0:10:40.600 --> 0:10:44.480 of hiking trips. That was her present from the chancellery 0:10:44.600 --> 0:10:48.560 staff today. They brought her some some hiking sticks and 0:10:48.679 --> 0:10:52.120 a tind to bring some sandwiches in on her trips, 0:10:52.600 --> 0:10:54.760 and I think she's probably going to take up quite 0:10:54.760 --> 0:10:59.840 a long time sped sped exactly, I can thank you 0:10:59.880 --> 0:11:10.560 very much, but I'm joined now by Holger Schmiding, chief 0:11:10.559 --> 0:11:14.040 economist for Behrenburg Bank and a wise observer of the 0:11:14.120 --> 0:11:18.640 German and broader European economy for many years. Holger thanks 0:11:18.720 --> 0:11:23.440 very much for joining Stephanomics and Angela Merkel has had 0:11:24.080 --> 0:11:29.360 sixteen years in office, one of the most influential politicians 0:11:29.400 --> 0:11:32.959 of our era by any measure. I don't feel like 0:11:32.960 --> 0:11:35.240 if it was any other country or any other chancellor, 0:11:35.280 --> 0:11:39.600 we'd be making much more fast about her departure. Now, Well, indeed, 0:11:39.640 --> 0:11:41.920 what we are seeing is a very smooth condition of 0:11:42.000 --> 0:11:46.040 power in Berlin, and it really does mark the end 0:11:46.120 --> 0:11:49.160 of an era. But it does not mark a major 0:11:49.320 --> 0:11:53.400 change in policies. And that's probably why there is only 0:11:53.640 --> 0:11:56.920 limited excitement about it. We'll get it, we'll get onto 0:11:57.000 --> 0:11:58.559 that the new government in a minute. And I think 0:11:58.559 --> 0:12:02.400 in any other country would seen more exciting. I know 0:12:02.440 --> 0:12:04.439 you're you're gonna carefully explain to us why we shouldn't 0:12:04.440 --> 0:12:08.280 be too excited. But if you think about when the 0:12:08.320 --> 0:12:12.440 history books have written, what are the main contributions that 0:12:12.520 --> 0:12:16.040 you think a Glamrker will be remembered for, she will 0:12:16.080 --> 0:12:19.240 not be remembered for one single contribution. She will probably 0:12:19.240 --> 0:12:22.240 be remembered most for two things. First of all, she 0:12:22.400 --> 0:12:25.600 presided over one of the best periods you could say, 0:12:25.600 --> 0:12:30.960 in German history, sixteen years of stability, of peace and prosperity, 0:12:31.080 --> 0:12:34.800 with a record rise in employment. The number of jobs 0:12:34.800 --> 0:12:37.480 where you earn enough who have to pay part payroll 0:12:37.520 --> 0:12:42.000 taxes on her watch rose by in a population that 0:12:42.080 --> 0:12:46.200 did not increase very much. So that is indeed one thing. 0:12:46.760 --> 0:12:50.199 The other thing is, of course her very contentious decision 0:12:50.400 --> 0:12:54.640 during the refugee crisis to not close Germany's borders again 0:12:54.840 --> 0:12:58.280 after the first rush of refugees from Hungary had been 0:12:58.400 --> 0:13:02.120 led in, and the subsequent webs and the subsequent wave 0:13:02.200 --> 0:13:07.520 of migrants, of course did sharpen and exacerbate divides in 0:13:07.600 --> 0:13:11.160 the country. In Europe, it probably contributed a bit to 0:13:11.200 --> 0:13:14.840 the British debate about Brexit. So that is one thing, 0:13:15.200 --> 0:13:17.800 the refugee crisis and are dealing with it, that she 0:13:17.880 --> 0:13:21.000 may be remembered for. But let's put that into contact. 0:13:21.120 --> 0:13:25.200 On the European level, she after some deliberation, did a 0:13:25.280 --> 0:13:28.800 lot to keep the EU, the Eurozone together as well 0:13:28.840 --> 0:13:32.559 as she could. She kept Greece in the Europe, overruling 0:13:32.559 --> 0:13:36.480 her own finance minister on that matter when she really 0:13:36.520 --> 0:13:39.320 had to. She put a lot of German money on 0:13:39.360 --> 0:13:43.960 the table during the pandemic to support heavily affected countries 0:13:44.280 --> 0:13:48.480 during the euro crisis. So she was in one sense 0:13:48.640 --> 0:13:53.760 a very strong European despite the controversies she triggered during 0:13:53.920 --> 0:13:56.880 and in the aftermath of the refugee crisis. I mean, 0:13:56.920 --> 0:13:59.080 you mentioned the refugee crisis. I suspect that was a 0:13:59.080 --> 0:14:03.080 time when Angela Merkel as a as an individual politician, 0:14:03.280 --> 0:14:08.199 really crossed people's radars outside of Europe because you had 0:14:08.240 --> 0:14:12.800 those pictures coming from the German train stations and the borders, 0:14:13.200 --> 0:14:17.360 and then her speech effectively saying to open the borders 0:14:17.440 --> 0:14:19.680 and that that anyone could come in. I mean, that 0:14:19.760 --> 0:14:21.760 was that was quite a moment at the time. What 0:14:21.840 --> 0:14:25.200 was the more long term impact on the political scene 0:14:25.360 --> 0:14:30.800 of that whole crisis on the German political scene, that crisis, 0:14:30.880 --> 0:14:34.760 the discussion about many, many migrants coming in, did revive 0:14:34.960 --> 0:14:39.000 the fortunes of the flagging far right a f E party, 0:14:39.120 --> 0:14:41.800 which now is a presence in the German Parliament with 0:14:41.880 --> 0:14:44.440 a good ten percent of the vote. It had been 0:14:44.480 --> 0:14:49.240 scoring below five before the refugee crisis. So it did 0:14:49.440 --> 0:14:54.640 sharpen the political debate in Europe in Germany and did 0:14:54.840 --> 0:14:59.200 add to support for right wing far right parties. Having 0:14:59.240 --> 0:15:02.640 said that, first of all, her big decision to let 0:15:02.720 --> 0:15:07.520 in refugees from Hungary was widely applauded across the political spectrum. 0:15:07.600 --> 0:15:11.880 It was her subsequent hesitation about closing the border again, 0:15:12.160 --> 0:15:15.760 her refusal coming from East Germany having been hemmed in 0:15:15.880 --> 0:15:18.320 by a wall for much of her life, while Germany 0:15:18.400 --> 0:15:20.440 was divided and she was on the wrong side of 0:15:20.480 --> 0:15:23.880 the war her refusal to erect a wall at the 0:15:23.920 --> 0:15:28.080 German borders figuratively speaking, that is, to strongly police the 0:15:28.120 --> 0:15:32.960 borders against migration. That refusal in the end proved to 0:15:33.000 --> 0:15:39.760 be quite controversial. She is still hugely popular today. Yes, 0:15:40.080 --> 0:15:44.280 she leaves office as the most popular policymaker in Germany, 0:15:44.280 --> 0:15:46.800 a position she has held through most of her time. 0:15:47.240 --> 0:15:50.400 With some ups and downs, you could say she leaves 0:15:50.640 --> 0:15:53.120 very much on a high note. And when it comes 0:15:53.160 --> 0:15:56.840 to the refugee segation, what we also have to say now, 0:15:57.240 --> 0:16:02.320 with six years having passed since the integration within Germany 0:16:02.600 --> 0:16:06.280 is not proceeding too badly. So the verdict is open 0:16:06.400 --> 0:16:10.479 whether in the longer term net net the problem sharpening 0:16:10.480 --> 0:16:13.720 divisions within the country or the benefit a country with 0:16:13.760 --> 0:16:17.240 an adverse demographic actually gets young people. Most of them 0:16:17.240 --> 0:16:19.880 are eager to work whether this net net will be 0:16:19.920 --> 0:16:23.200 a positive or a negative longer term. Simply, the verdict 0:16:23.240 --> 0:16:26.840 is not out yet. Certainly, from the outside, Germany seems 0:16:26.880 --> 0:16:30.360 to have been despite and maybe, as you say, perhaps 0:16:30.400 --> 0:16:34.600 in part because of the way immigrants have been able 0:16:34.640 --> 0:16:38.240 to be integrated in the labor force. But despite all 0:16:38.240 --> 0:16:41.520 those debates around the refugee crisis, Germany seems to have 0:16:41.640 --> 0:16:46.480 been largely spared the kind of extreme polarization and the 0:16:46.600 --> 0:16:50.240 toxic politics that we've seen, certainly in the UK and 0:16:50.280 --> 0:16:52.200 the US over the last few years. Is that is 0:16:52.240 --> 0:16:54.840 that right or is that just wishful thinking? That is 0:16:54.920 --> 0:16:59.480 absolutely right. Germany has been spared much of the um 0:17:00.000 --> 0:17:03.160 ooxification of politics that we see elsewhere. We have traces 0:17:03.200 --> 0:17:05.000 of it, but not to the extent that you see 0:17:05.000 --> 0:17:08.040 in many other countries. One reason for that is, of 0:17:08.040 --> 0:17:11.720 course history, having had far too much of a polarization 0:17:11.760 --> 0:17:14.679 of society in the ninet twenties and early thirties, and 0:17:14.720 --> 0:17:19.080 we all know the terrible consequences of that, Germans shy 0:17:19.160 --> 0:17:22.959 away from taking extreme positions. On top of that, the 0:17:22.960 --> 0:17:28.040 German constitution, the federal nature of it, de facto enforces 0:17:28.080 --> 0:17:31.919 a kind of consensus. Yeah. The government of Angla Merkel 0:17:32.400 --> 0:17:36.200 for three of her third terms included, apart from her 0:17:36.280 --> 0:17:41.040 center right Conservatives, the center left social Democrats, which meant 0:17:41.160 --> 0:17:44.760 that compromises between the two big strands of political thought, 0:17:45.000 --> 0:17:47.199 the center right and the center left, had to be 0:17:47.280 --> 0:17:51.320 struck within the government and also the strong role of 0:17:51.440 --> 0:17:54.720 the Constitutional Court and the upper house of Parliament, where 0:17:54.760 --> 0:17:57.960 typically the party that is in opposition in the federal 0:17:58.000 --> 0:18:02.119 government has a veto the fact to enforces that mainstream 0:18:02.160 --> 0:18:05.199 parties have to talk to each other and come up 0:18:05.240 --> 0:18:08.560 with a joint view. And as a result, Germany rarely 0:18:08.720 --> 0:18:12.400 does big policy shifts which do not enjoy broad political 0:18:12.400 --> 0:18:16.240 support across the isle. So you do have i mean 0:18:16.240 --> 0:18:19.520 on paper, just turning to the new government that we 0:18:19.600 --> 0:18:24.680 have that that takes power this week. Um, it's as 0:18:24.680 --> 0:18:28.800 you said, it's the Social Democratic Party along with the 0:18:28.880 --> 0:18:33.080 Free Democratic Party and the Greens, which in any as 0:18:33.080 --> 0:18:36.600 you said yourself, it's sort of crosses the political spectrum 0:18:36.640 --> 0:18:39.560 in Germany. In any other country, it would sound pretty 0:18:39.560 --> 0:18:42.000 difficult to manage, is it. Is it going to be 0:18:42.040 --> 0:18:46.399 an unworkable coalition at first? It may sound unworkable. I 0:18:46.440 --> 0:18:48.560 mean you have to imagine in the US as if 0:18:48.680 --> 0:18:53.359 sort of the Democrats were to cooperate with of the 0:18:53.359 --> 0:18:57.560 Republicans for one government within one government, that's roughly what 0:18:57.600 --> 0:19:00.680 we are. Biden can only dream of having that exactly, 0:19:00.720 --> 0:19:04.520 get the Democrats to cooperate with exactly, so, at least 0:19:04.520 --> 0:19:06.880 in Germany, we have seen that these three different parties 0:19:07.480 --> 0:19:10.960 have come up with a joint program to govern. Germany 0:19:11.000 --> 0:19:14.040 has a long tradition, at least a long postwar tradition 0:19:14.119 --> 0:19:18.240 of such coalition governments, which against threddled the political divide 0:19:18.480 --> 0:19:21.000 for us. This is normal that you try that you 0:19:21.240 --> 0:19:24.240 campaign on your own platform, but you basically know that 0:19:24.280 --> 0:19:27.440 once it comes to governing, you are not implementing your 0:19:27.480 --> 0:19:30.760 own manifesto. You are trying to combine your manifesto with 0:19:30.840 --> 0:19:34.560 that of your coalition partners of a different persuasion, and 0:19:34.840 --> 0:19:38.840 probably it will work simply because in this government the 0:19:38.920 --> 0:19:42.520 three parties have granted each other a bit of leeway 0:19:42.640 --> 0:19:45.560 when it comes to social policy, such as hiking the 0:19:45.600 --> 0:19:48.960 minimum wage. It is not a compromise. The social Democrats 0:19:48.960 --> 0:19:51.120 the center left have said we want the minimum wage 0:19:51.160 --> 0:19:54.520 twelve euros per hour. They get it. The Greens have 0:19:54.600 --> 0:19:57.840 said we want a faster exit from code, they get it. 0:19:58.480 --> 0:20:01.600 The Liberals have said no tax hikes to fund all 0:20:01.640 --> 0:20:04.359 of that, and they get it, which of course means 0:20:04.440 --> 0:20:06.760 we need a few tricks to actually fund the expert 0:20:06.840 --> 0:20:10.480 investment spending. But it's not just a compromise that is 0:20:10.520 --> 0:20:12.800 all murky. It is something where all of the three 0:20:12.880 --> 0:20:16.439 parties can say the government's programs it does bear to 0:20:16.520 --> 0:20:19.680 some extent our imprint. Hence we can and could sell 0:20:19.720 --> 0:20:23.440 it to our members. So events always happen. If it 0:20:23.600 --> 0:20:26.240 is never easy in government, stuff will happen. There will 0:20:26.280 --> 0:20:29.200 be discord, But I do think this government is as 0:20:29.320 --> 0:20:33.400 likely to be stable as previous German governments and full 0:20:33.440 --> 0:20:36.280 of super reasonable politicians who don't do any of the 0:20:36.320 --> 0:20:39.000 things that other politicians and other countries seem to do. 0:20:39.160 --> 0:20:42.040 When we think about the big challenges for the country obviously, 0:20:42.040 --> 0:20:46.000 and the environmental is one, the energy transition. People for 0:20:46.040 --> 0:20:49.840 a long time, particularly economists who are not German, have 0:20:50.280 --> 0:20:54.240 criticized Germany for being too dependent on its export sector 0:20:54.680 --> 0:20:59.040 and heavily reliant on that on that sort of manufacturing 0:20:59.080 --> 0:21:01.119 side of the economy, which has remained so much stronger 0:21:01.119 --> 0:21:04.120 than it is in many other European countries. I'm interested 0:21:04.680 --> 0:21:09.560 given the current climate concerns about US and China relations 0:21:09.600 --> 0:21:14.000 affecting um the integration of the global economy, and the 0:21:14.600 --> 0:21:18.359 now right now the supply chain issues that we're seeing, 0:21:18.560 --> 0:21:21.560 how has Germany been affected by that? The current supply 0:21:21.680 --> 0:21:25.280 chain is affect Germany a lot. What we are seeing 0:21:25.480 --> 0:21:30.040 is very subdued output in the car sector, say at 0:21:30.119 --> 0:21:35.120 least below what German companies could produce and what they 0:21:35.119 --> 0:21:39.800 could sell given that order books are full. So Germany's 0:21:39.960 --> 0:21:45.400 very dependence on manufacturing, which requires a lot of inputs, 0:21:45.640 --> 0:21:48.960 including semi conductors, forcast, for machine too its is now 0:21:49.480 --> 0:21:52.600 in the near term the significant weakness. It is one 0:21:52.720 --> 0:21:55.760 major reason why Germany in the recovery from the pandemic, 0:21:55.840 --> 0:21:58.119 is now lagging far behind or not just a little 0:21:58.160 --> 0:22:02.439 behind France. Having said that this is probably an issue 0:22:02.600 --> 0:22:05.600 that will no longer be that relevant, say two years 0:22:05.600 --> 0:22:08.480 from now, my private guess is that two years from now, 0:22:08.520 --> 0:22:12.840 with almost every government subsidizing seemi conductor production, we may 0:22:12.880 --> 0:22:15.840 have a glut or at least sufficient, if not too 0:22:15.840 --> 0:22:18.960 many seemi conductors. What we can say if we look 0:22:19.000 --> 0:22:21.920 back at the last twenty years. But all in all, 0:22:22.200 --> 0:22:28.199 Germany's focus on top not manufacturing has not served the 0:22:28.240 --> 0:22:31.840 country badly and it hasn't paid to bet against Germany 0:22:31.960 --> 0:22:35.000 in the last few decades. People, certainly in Britain and 0:22:35.040 --> 0:22:37.920 the UK in the US are a bit worried about 0:22:37.920 --> 0:22:39.879 getting their toys in time for Christmas. With all these 0:22:39.880 --> 0:22:42.800 supply chain issues are you Are you nervous of people 0:22:42.800 --> 0:22:45.280 in Germany nervous about that rushing out to get your 0:22:45.280 --> 0:22:49.480 toys early. Supply chain issues are a major problem in Germany, 0:22:49.520 --> 0:22:52.600 but they are more a problem on the production site 0:22:52.640 --> 0:22:55.560 affecting the car industry. There is much less talk than 0:22:55.680 --> 0:22:59.600 some other countries about the delivery problem, that is, getting 0:22:59.760 --> 0:23:03.600 that what arrives in the ports by truck towards the shops. 0:23:04.119 --> 0:23:06.200 There is a bit of anxiety here and there are 0:23:06.200 --> 0:23:09.480 people are being encouraged to buy their toys early, but 0:23:09.600 --> 0:23:12.119 at the moment this does not seem to be a 0:23:12.160 --> 0:23:16.000 big issue. One reason for that is probably that Germany 0:23:16.080 --> 0:23:18.800 is wide open with its land borders, so even if 0:23:18.840 --> 0:23:21.639 truck drivers asking us in part of the country, they 0:23:21.640 --> 0:23:24.600 could come from other part of the country, or more precisely, 0:23:25.040 --> 0:23:27.679 they could come from Poland from Romania. This is a 0:23:27.760 --> 0:23:34.080 pan continental European logistics market which is strained, but which 0:23:34.160 --> 0:23:37.200 does not seem to be anywhere near breaking point where 0:23:37.240 --> 0:23:39.720 you would have to fear that Santa Claus would not 0:23:39.840 --> 0:23:42.840 be bringing what the kids would love. And thank goodness 0:23:42.840 --> 0:23:46.320 for that Oldish Median, thank you very much, You're welcome. 0:23:55.320 --> 0:23:59.000 The pandemic has been a golden age for billionaire wealth. 0:23:59.520 --> 0:24:02.000 You might have suspected that to be true looking at 0:24:02.040 --> 0:24:05.680 stock markets and property prices soaring around the world, even 0:24:05.760 --> 0:24:08.040 when we were in the midst of the COVID slump. 0:24:08.640 --> 0:24:10.840 But now we have some hard numbers to prove it. 0:24:11.240 --> 0:24:15.040 Courtesy of the Global Inequality Lab, the research group established 0:24:15.080 --> 0:24:19.040 by the French economist Thomas Picketty. US economy reporter Augusta 0:24:19.119 --> 0:24:22.160 Surreva wrote up the story for US and is here 0:24:22.320 --> 0:24:25.720 for a quick chat about it. Augusta, thanks for joining us. 0:24:26.680 --> 0:24:29.440 What are the most eye popping numbers in this report? 0:24:29.760 --> 0:24:32.199 Thank you so much for having me. I think the 0:24:32.240 --> 0:24:36.159 most surprising thing of the studies not that billionaires have 0:24:36.280 --> 0:24:39.040 lots of money and control lots of wealth, right, but 0:24:39.119 --> 0:24:42.400 it's the fact that during the pandemic, that's when they 0:24:42.480 --> 0:24:46.239 gained the most wealth. So last year, for example, they 0:24:46.520 --> 0:24:50.240 saw billionaire wealth reached three point five percent from simply 0:24:50.320 --> 0:24:54.880 one percent when they started tracking these numbers. So it's 0:24:54.880 --> 0:24:58.080 been going up three point five percent of the world's 0:24:58.119 --> 0:25:02.160 wealth exactly. And that's only and that's fewer than three 0:25:02.200 --> 0:25:06.360 thousand people. Yes, that's controlled by about two thousand and 0:25:06.400 --> 0:25:10.159 seven and seven hundred and fifty people and nowadays they 0:25:10.160 --> 0:25:12.919 control three point five percent of the world's wealth. And 0:25:12.960 --> 0:25:15.600