The success of our free enterprise system over the past century—buoyed by the tremendous capacities of the industrial sector—has helped create a far wealthier and healthier society. In the span of one century in America, per capita income grew 358%, from $9,375 (in today’s dollars) to $43,000. More affluence means better healthcare and nutrition: the average life expectancy at birth grew 44%, from 55 to 79.
Europe hits the news headlines with increasing frequency these days. In addition to the faltering economy, domestic politics supply ample doses of uncertainty, testy intra-EU relations, and mounting social tensions. For businesses exposed to the European political and economic cycles, five potential risks stand out for 2014: deflation, a gas war, a third recession, a breakdown in trade negotiations, and political gridlock.
Global Economy, Economic Environment, Recession, Money & Finance, GDP, Growth & Innovation, Research & Development
Nearly five years past the trough of the Great Recession, the U.S. economy still finds itself in a post-crisis era. Economic growth has been persistently sluggish, averaging 2.3% between 2010 and 2013. Labor productivity data and labor force participation data raise concerns about a weakening of potential U.S. economic growth.
Much is needed for improved potential and performance. Human capital and business dynamism challenges must be addressed. But the economy also clearly needs a stronger dose of both innovation investment and capital investment.
The SEC’s conflict minerals rule is on the rocks, with the D.C. Circuit Court and two sitting SEC commissioners questioning its viability. Meanwhile, the SEC insists the June 2 reporting deadline stands, creating uncertainty for manufacturers.
Via new technical assistance documents, two federal agencies advise that to avoid violating anti-discrimination laws, employers should treat everyone equally when conducting background checks. When checks are conducted through a company in the business of compiling background information, the employer must comply with procedures required by the Fair Credit Reporting Act.
Global Economy, Economic Environment, Labor, Recession
The aging baby boom generation will keep the participation rate falling for at least another decade, and some individuals’ decisions to work longer will not be enough to offset the tendency to retire. In a couple of years, firms should see widespread, tight labor markets, making young talent particularly difficult to find.
Over 10 years, the stock of U.S. direct investment in Canada grew continuously, but the U.S. share of Canadian FDI decreased. Changes to Canada’s foreign investment regime may help sustain the upward trend of U.S. investment stock by making it relatively easier for private U.S. businesses to invest in our northern neighbor.
Finance, Tax, U.S. Tax, Federal Tax Rules & Regulations, U.S. Tax Policy, Global Economy, Money & Finance, Government Finance
In early March, President Obama sent his official FY15 budget to Capitol Hill. Judging by the reception, not just from House Republicans but from a jaded White House press corps, the proposal is clearly DOA. It’s not the first proposed budget to get such a congressional snub. But considering the White House’s cavalier approach to this budget, and Congress’s inability to agree to a formal spending plan over the past decade, the budget process created almost a century ago is in desperate need of reform.
Global Economy, Competitiveness, Government Policy
Between 2009 and 2014, international rankings for ease of doing business improved in only about a third of 29 European economies. This would justify the (cautious) concern about European business slipping in competitiveness. The pro-business climate has decayed more in some countries than in others but the deteriorating trend is consistent across multiple rankings.
Global Economy, Money & Finance, GDP, Government Finance
Estimated at RMB 10.7 trillion as of the end of 2010, China’s local government debt has expanded rapidly over the past several years. The country's fiscal position, however, is not yet an acute concern and will not likely pose immediate threats to economic growth.