Juggling Dynamite

Caught this documentary on Netflix last night: well worth the watch. All the usual behaviors and character types: bankers, international money laundering, fraud and greater fools. But also fascinating insight into the wine business.

Here is a direct video link to the trailer.

As stock markets have blown skyward since the election–led by financials and energy cos–bulls have tried to justify the most reckless equity valuations since the tech wreck peak in 2000 on belief that the Trump administration will drive “sustained 3 to 4% GDP” growth.  That would be miraculous indeed.

In reality, the potential GDP growth adds up to about 1%.  Economic Cycle Research Institute’s Lakshman Achuthan explains the math of growth in this interview starting at 3:23 on the playbar.

Potential labor force growth is projected to be less than ½%, plus productivity growth of about ½% for the past six years equals only 1% longer-term GDP growth.

Demographics are set in stone, so to get to 3½% GDP growth promised, productivity growth would have to be 3%, which is six times last six years’ average.

So, while Mr. Mnuchin promised “the largest tax change since Reagan,” we’d need to roughly double the productivity growth of the Reagan years. You’ll forgive me for being a bit skeptical.

The Litmus Test for any policy: will it boost long-term productivity growth?

Why has productivity slumped? Essentially, capital investment has plunged, relative to hours worked, as never before. That is what needs to be reversed. For more details, please see “Low Labor Productivity Growth The Main Culprit.”

Important to see leadership from big corps. In the end though, lowering operating expenses is just good financial management. This is a trend that will continue to spread for all the obvious reasons.

Last year, Google consumed as much energy as the city of San Francisco. Next year, it said, all of that energy will come from wind farms and solar panels…

“We are the largest corporate purchaser of renewable energy in the world,” said Joe Kava, Google’s senior vice president of technical infrastructure. “It’s good for the economy, good for business and good for our shareholders.”   See: Google says will run entirely on renewable energy in 2017

Neha Palmer, head of energy strategy and global infrastructure at Google, discusses the company’s renewable energy milestone and goals. Here is a direct video link.