Chinese Robots, New York Heartburn, And Goldman Sachs Central Role

In the continued absence of regular data, as the US federal government attempts to get back up to speed before the next lull, it is perhaps appropriate to continue on with this week’s parade of anecdotes. Here I’ll discuss three of them, each seemingly unrelated to the others.

To begin, we start with Chinese robots. It is the age of great economic uncertainty. Nobody really knows why, and in the absence of any explanation people will fill in the blanks with their imaginations. One nightmarish offshoot is as old as industrialization, that technology given sufficient attributes will steal all human labor.

The world’s economy has lost one decade and is well into a second. The Financial Times tells us that recent Chinese graduates are finding themselves in a job market condition all-too-familiar to America’s youth. All hail the machines (and M. Simmons):

“The banking sector was the one that hired the most people; now [the banks have] been hit by regulations [governing the finance sector] since last May, and they are automating more jobs,” said Cui Ernan, analyst at research firm Gavekal Dragonomics. “The impact on graduates has been big.”

Perhaps the problem isn’t regulations but something deeper and more fundamental still.

Our second anecdote for today is straight out of New York. Lawmakers in Albany are set to debate the state’s next budget and the Governor, Andrew Cuomo, is warning them this isn’t the time to be profligate.

Calling the situation “as serious as a heart attack,” the Democratic governor said revenues are $2.3 billion below projections for the fiscal year that ends March 31. That is on top of a $500 million revenue dip from personal income taxes that the Cuomo administration recently projected when it put together a budget plan last month.

This anticipated fiscal shortfall wasn’t anticipated until very recently. The economy was booming, and now perhaps not. Playing politics first, Cuomo blamed 2017’s tax reform which Democrats argue was written to punish high tax so-called blue states like New York. Many of those people subject to the comparative disadvantage may have pulled up stakes and relocated.

But why now? For that, the Governor suggested something more recent and closer to the heart of what’s left of the Empire State’s economy. “He added that the stock market drop in December may have had an impact, and also struck a blow to the bonuses given to Wall Street traders, which adds a considerable amount to the state’s annual tax collections.”

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Disclosure: This material has been distributed for informational purposes only. It is the opinion of the author and should not be considered as investment advice or a recommendation of any ...

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