As Italian, when I first moved to Los Angeles, it was not difficult to realize how much this city was driven on one hand by a great innovation, on the other hand by a very huge inequality. After living here for few days, it was easy for me to having a better sense of the social status of the people living in LA. Basically, you might trace a horizontal line that divides the city between north and south: norther you go, richer the people and neighborhoods you encounter, while southern you go the poorer are the people you encounter. Maybe this could sound a very approximate and stereotyped frame, but nobody can deny that, for someone you just move in LA, the impact with inequality is very strong: too many homeless people living alone in terrible situations along the streets, under the bridges, or in the tents – when they happen to be “lucky”. When I experienced this situation for the first time, honestly my first question was: how is a situation like this be possible in a rich and forward-thinking country as the United States? Yet, after few months living here I realized that, according to the current U.S. economy, unfortunately, it is totally possible. The United States is one of the most unequal country in the world (OECD Income Distribution Database).

According to an article published last week by the New York Times, U.S. elite professionals earn 3.5 times more than the typical (median) worker in all occupations. Its income inequality is testified by the Gini coefficient that, according to the United States Census Bureau, for the 2016 was 0.481. Such a huge different is overcame only by other two countries in the world: Israel and Mexico.

Additionally, when I looked at the NTY chart that refers to the analysis extracted from the World Income Database, I realized that even Italy (my home country) is much less unequal than the United States, where over the last year only the 1 percent’s share of national income has experienced a sharp growth: this information has really blown my mind, because before moving to the U.S. I believed that Italy was one of the worse country for what concerns inequality, because its rate has been rising without control. Actually, it is not.

What it’s really going on in the U.S.? Mr. Trump is taking advantage of the argument on increasing inequality spreading along the country, stating that the main causes of the rising poverty rate have to be referred to: the evil nations oversea, like China, that are responsible for unfair trade negotiations and stealing jobs to U.S. workers, or to the immigrants, who also steal jobs from U.S. workers. Conversely, others believe that the cause of this situation relies on the switch of the type of experts needed in the work place. The number of people employed in the information technology industry is still too tiny, and it has not been contributing to the rise of the average incomes.

Yet, one of the main reason, as the NYT states correctly, is connected to the fact that since 1980 all the norms, both legal or economical, have been shaped by the upper middle class. This factor has led the richer people increasing their influence in the political life so that they could execute their power on the economy, reforming and reshaping the norms according to their interests.

This issue inevitably refers to the recent, and debated, tax plan overhaul, that it does not seem helping to decrease inequality in the country.

As a result, as is shown in this interesting visualization, between 1980 and 2014 the largest income growth has been registered only by the 99.999^th percentile, a growth that will keep rising making richer people even more rich.

From The New York Times

Prior to Snap’s IPO in March, it had been evident that Snapchat was on its way to revolutionize the virtual communication process. However, this vision has been a concern for Wall Street. Ever since they went public, the company has lost over $3 billion and has not traded above its IPO price of $17 a share since July, despite the 44% surge during their first day of trade (Yahoo Finance).

On Tuesday, November 7, the California-based company released an earnings report, which included revenue and user growth for the third quarter, that was well below Wall Street expectations. This report was followed by a statement from their billionaire CEO, Evan Spiegel. He startled investors with news that Snapchat will undergo some major changes, indirectly justifying that the mobile app is struggling to compete with its archenemy, Facebook.

Snapchat has never had a strong revenue model. The company has always relied on tailor-made, custom advertising, which has been their primary source of revenue. However, Spiegel announced that they will be implementing a more programmatic method, using automated auctions to bid on a slot. Sounds familiar, right? Yes, Snapchat advertisements may start to feel a lot more like what you see on Facebook and Instagram. This is expected to result in less human involvement and much cheaper ads.

Snap also plans to completely redesign the Snapchat app, which is expected to launch on December 4, 2017. According to Spiegel, the redesign will be focused on responding to the feedback that the app is “difficult to understand or hard to use.” Most Snapchat users, including myself, would agree that the platform can get a bit confusing, especially for the older crowd. Its IPO filings even included a step-by-step tutorial on how to use the application.

Spiegel agreed that the redesign could be disruptive to their businesses in the short term and that is it unclear how their community will respond to the changes. However, he went on to explain that this is a risk they are willing to take because they believe in the long-term benefits. Ironically, Snapchat needs to do what Facebook did years ago and cater towards different age groups, not just teenagers.

This may be the reason behind Tencent’s decision to acquire a 12% stake in Snap Inc. just hours after Spiegel’s announcements. According to Bloomberg, Tencent, the Chinese company behind WeChat, has developed very successful chat apps through engaging content, integrated services, and advertising (Bloomberg). It is apparent that they are trying to do the same with Snapchat, which has a larger U.S. audience than Tencent.

Will these serious changes help Snap Inc. climb out of its deep hole? As of right now, it is still unclear. Although investors might not be convinced, Spiegel and his team are confident that the long-term benefits will be worth it. I guess we will just have to wait and see.

finance.yahoo.com/quote/SNAP

https://www.bloomberg.com/news/articles/2017-11-08/tencent-buys-10-percent-stake-in-social-media-company-snap

https://investor.snap.com/~/media/Files/S/Snap-IR/reports-and-presentations/snap-inc-q3-2017-prepared-remarks.pdf

Fine art is a status symbol, both in societal terms and economic terms. The uber-wealthy pull out their wallets at art auctions hosted by Christie’s and Sotheby’s every year and contest for collectable pieces by the world’s greatest artists. The prices naturally fluctuate with the ebbs and flows of the global economy so when buyers up the ante, those price tags can be used as a gauge for confidence in the market. The more money people have, the more likely they will spend it. According to the Washington Post, Christie’s auction house set a record this year by auctioning off the most expensive painting in history. Leonardo da Vinci’s, “Saviour of the World” (Salvador Mundi) was auctioned off for an astounding $450,312,500, shattering the previous record by over $270 million dollars. Spending that kind of money on a collector’s item is a direct result of the economy as a whole and the conviction the wealthy have in it.

Economic indicators come in many forms, but art is one that could be considered unorthodox given only the wealthiest of society participate. Art auctions like Christie’s is an interesting way to look at the health of the economy. Price tags like the one on Leonardo da Vinci’s painting are not small and the growing economy allows for pieces like that to go for hundreds of millions of dollars. Fortune magazine examines the art auction market a little deeper saying “robust sales are a sign the world’s wealthiest people feel bullish—making a recovering art market something that point-one-percenters and the other 99.9% can be equally excited about.” The art industry as a whole has been in a slump since 2015 so the numbers being reflected in this year’s auctions are a good sign for the industry and the shareholders of the auction houses. Confidence in the buyers also creates confidence in the sellers. That confidence stems from a myriad of elements including a sky-high Dow Jones, planned tax cuts from the Trump administration and other indicators that signifying a robust marketplace.
According to the New York Times, the tax cuts also include a provision that restricts “high-end art investors to sell works and quickly replace them with pieces of similar value and [thus] defer paying federal taxes.” If passed, this loophole in the system could potentially halt liquidity in the U.S. market to some extent because people will sell less and not have as much money to spend. With that being said, the current art market is sitting pretty at $60 billion, but is mostly made up of pieces that go for $1 or $2 million, unlike da Vinci’s piece, with buyers who hope to use those “smaller” purchases as an investment that they can gain profit on by resale down the road. The fact that material objects can generate this much revenue is surprising in a time where people are starting to value experiences more and more in society. Although it is not the strongest indicator, the confidence in the art market is very telling in a macro-economic sense. It will be interesting to see how long the confidence remains and if the economy really starts to reflect the experience-leaning consumerist shift or if fine art will continue to be as expensive. In the art world, some of the wealthiest people in the world invest in timeless pieces of art that also help excite a market that only the 1% can participate in. Fine art as an economic indicator is one that you will only see thriving when the economy is hot, and thriving to the extent where a few hundred million dollars is spent on a single work of art. That is not chump change, so when that kind of money is used to purchase a collector’s item, it is easy to assume that the economy is doing well and expected to do so for the near future.

Travel is frequently an indicator of the health of the economy. It is often viewed as a luxury or an unnecessary expense and when times are tough, people generally sacrifice their travel to have some extra cash for other expenditures. However, with lower travel costs combined with a growing economy, travel may be placed higher on families’ priority lists. With the holiday season quickly approaching, travel is expected to increase dramatically for the remainder of 2017.

This year, AAA expects nearly 51 million Americans to travel 50 miles or more away from their home for Thanksgiving alone. This number is the highest volume of travelers since 2005 and is a 3.3% increase over last year’s travel numbers.While gas prices generally dip prior to Thanksgiving, this year the prices have continued to rise as the oil and gas industry still works on normalizing post-hurricanes. Even with the increased prices at the pump (as they hit the highest Thanksgiving period prices since 2014) travelers are willing to pay a bit more to visit family and friends for the holiday. Americans are expected to spend $800 million more on fuel for holiday travel this year compared to last year. In South Carolina alone, the price of gasoline is 32.5 cents higher per gallon this year than it was last year at the same time.

While the price of traveling by car has increased this year, the price of travel by air isn’t inexpensive either. The average cost of a Thanksgiving flight is $385 if booked by the end of October. The most congested cities for Thanksgiving travel are expected to be Los Angeles, New York, San Francisco, Atlanta and Miami.

Regardless of the high gas prices, projected travel numbers remain higher than they have been in years. AAA’s senior vice president, Bill Sutherland, credits the strong year for the travel industry to a strong economy and labor market that has fueled higher incomes and consumer confidence.

With this massive increase in holiday travel and spending in 2017, the country’s economy as a whole is bound to reap the rewards as well. The World Travel & Tourism Council noted that travel and tourism directly contributed to GDP growth by 3.1% in 2016. This growth was faster than the economy as a whole, which grew at 2.5% the same year.In addition to GDP growth, travel and tourism contributed to employment growth of 1.8% in 2016, which totals almost 2 million jobs. Looking ahead to 2017, travel and tourism’s contribution to the economy’s GDP is expected to grow even more by 3.5%. Much of that growth will more than likely come from this year’s holiday travel numbers.

The world has a lot of recyclables, especially Americans. When I say a lot, I mean billions worth. According to Bloomberg, “by the mid-2000s, scrap paper was among the leading U.S. exports to China by volume.” China has been the largest importer of the world’s recycled goods for some time now as a result of the hunger it’s manufacturing boom caused. In order to feed the consumerist beast of The United States and others, China needs the scrap to keep up without breaking its bank. It is cheaper for China to import recycled scrap as opposed to making steel, paper, cardboard, etc. on their own so it seems like a win-win for the country. In July of 2017, China’s government announced it will stop eating up a majority of the world’s recyclables and will no longer be the world’s recycling bin. The government made this decision due to environmental concerns. Reuters reported that China told the World Trade Organization that in order “to protect China’s environmental interests and people’s health, we urgently adjust the imported solid wastes list, and forbid the import of solid wastes that are highly polluted.”

The environmental concerns are outweighing the trade benefits for China and they have for some time time now. In 2013, according to The Economist, the Chinese government launched Operation Green Fence to try and lessen the amount of foreign, low-quality waste from entering the country. This new announcement by the Chinese government is proposing to cut off a majority of recyclable imports for the sake of the environment. China is facing a $5 billion loss in trade with this proposal according to a report by The Economist. As of 2016, Reuters stated that China imported $3.7 billion worth of waste. This decision to choke scrap imports will rattle the global economy significantly.

Not only will China be heavily affected, but the United States will be too. Exporting waste takes work and work means more American jobs. Bloomberg reported that 40,000 Americans have jobs due to the exportation of recyclables. When China blocks the trading of trash, about 40,000 Americans will be left without a job and the American landfills will fill back up. The cost is significant as well. There could be a trickle-down effect here into individual American homes as well. If it begins to cost too much for smaller recycling companies, or even some larger ones to pay for more workers or equipment, this could mean the separation of waste could fall directly on the individual. The loss of this huge benefit to the trade deficit between China and the United States will leave many cargo ships empty of exports to take back to China.

With that being said, the recycling market will remain afloat, but domestically and at a smaller scale. According to Dylan de Thomas, vice president of industry collaboration for the Recycling Partnership, “the really large waste and recycling companies have a vested interest in the recycled fiber and plastic markets.” Not only large companies, but the general public in the United States has a vested interest in recycling as well. Due to America’s own concern for the environment, we may only see a small effect on the American economy as whole, but only time will tell if the United States can pick up where China left off or have to figure out a new strategy.

Heralded as a powerhouse to propel the world into the future, China has long been regarded as having one of the most sound demographics to power its economy. Recently, the country has announced that it is lifting the controversial one-child policy, which has been in place since 1979 as a means to control the population at a time when China was still poor and undeveloped. However, remnant effects are being felt by the country in 21st century, in the form of a destabilized demographic.

What would happen when your family is told that you are only allowed one child, and in some cases at most one son after having a daughter, in a country where sons are traditionally viewed as being more virtuous than daughters?

(An old propaganda poster supporting One-Child Policy: “Executing the One-Child Policy Is A Part of the Country’s Foundamental Principles.”)

Some simple math will tell us that male babies born will outnumber the female ones, and this is exactly the problem Chinese Millennials and Gen Zs face as they approach adulthood. In his article, BC Cook outlined the threats he thinks the Chinese society faces as a result of the One-Child Policy. The most pronounced issue, he argues, is the problem of “online brides”, or brides from neighboring Asian countries who come over to be married to Chinese single men who cannot find a wife.

Now, online dating is not illegal, not even in China. “However,” Cook argues, “Chinese men finding foreign brides and starting families is exactly what the Chinese government was trying to avoid. So the one-child, male-only mandate from the government has backfired.”

On one hand, there is a markedly obvious imbalance in the “supply and demand” of domestic brides, as a direct result of the One-Child Policy. On the other, the Chinese philosopher Mengzi summarized in a proverb: “Dishonor to the family has three forms, and having no child is of the worst.”（不孝有三，无后为大）The Chinese traditional culture heavily focuses on the idea of continuing one’s lineage by starting one’s own family. To this day, this idea still permeates all levels of Chinese society. Where demand exists supply must be sought, and in this case, in the form of online brides from Thailand, Vietnam, Laos, Cambodia, etc.

(“It sure would be nice to have a sibling, Mr. Xi!”)

Disregarding the ethical arguments, this aspect of the One-Child Policy’s remnant effects certainly has created social-political implications where the imbalance of a very sensitive supply-and-demand relationship sought balance elsewhere. “There is a limit to how much we can legislate human behavior,” summarized Cook, articulating his belief that the Chinese government has disrupted an instinctive economy of basic human needs.

It is very unlikely that the Chinese government will step in to regulate the online dating industry as a result, because online dating has created an in-demand economy across China. Still, the influx of foreign brides, many of whom are still undocumented, has most definitely created implications for the government.

Not only does supply create its own demand. Demand creates supply where necessary, too.