Every week seems to bring a new story about how vaping is really, really, really bad for you. Only a few years ago, electronic cigarettes were hailed as a new and healthier way for people to consume nicotine and pot; the number of vapers worldwide has grown sevenfold since 2011, to an estimated 41 million users. But now vaping is being attacked as a deadly habit that might be as bad for you as traditional smoking.
Reports of vaping-related deaths and respiratory illnesses appear daily on cable news shows, in newspapers, and online. The FDA is considering a ban on flavored e-cigarettes, and many states have already instituted strict regulations on vaping sales and use. Congress has voted to change the age for legal tobacco and e-cigarette sales to 21, up from 18. President Donald Trump signed the legislation into law just before Christmas.
Is vaping bad for you? Should we be panicking? What sorts of policies should govern the use of electronic cigarettes for nicotine and marijuana? To answer these and other questions, Nick Gillespie sat down with Reason Senior Editor Jacob Sullum, who has spoken extensively and authoritatively about the issue for years. Sullum argues that the current anti-vaping freakout is a classic case of moral panic, and that it is in fact making it harder for current smokers to transition to a safer method of getting nicotine or to quit altogether.
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In the wake of the Fukushima disaster in Japan in 2011, Germany ordered the immediate shutdown of eight of its 17 reactors, and plans to phase out nuclear power plants entirely by 2022.
The Philippsburg 2 reactor near the city of Karlsruhe in southwestern Germany has provided energy for 35 years. The Philippsburg 1 reactor—opened in 1979—was taken offline in 2011.
Over the past few years, nuclear power generation in Germany has been declining with the shutdown of its nuclear plants, while electricity production from renewable sources has been rising.
In January 2019, Germany became the latest large European economy to lay out a plan to phase out coal-fired power generation, aimed at cutting carbon emissions—a metric in which Berlin has been lagging in recent years.
A government-appointed special commission at Europe’s largest economy announced the conclusions of its months-long review and proposed that Germany shut all its 84 coal-fired power plants by 2038.
Germany, where coal, hard coal, and lignite combined currently provide around 35 percent of power generation, has a longer timetable for phasing out coal than the UK and Italy, for example—who plan their coal exit by 2025—not only because of its vast coal industry, but also because Germany will shut down all its nuclear power plants within the next three years.
The closure of all nuclear reactors in Germany by 2022 means that Germany might need to retain half of its coal-fired power generation until 2030 to offset the nuclear phase-out, German Economy and Energy Minister Peter Altmaier said earlier this year.
US Records Slowest Population Growth In Century As Births Decline
New figures from the US Census Bureau detail a troubling trend in the “greatest economy ever,” one where this year’s population growth is the slowest in a century due to decline births and lower immigration trends, reported AP News.
From 2018 to 2019, the population in the US expanded at .48% or about 1.5 million people, with a total population outstanding of around 328 million.
The report mentions how a lack of migrants entering the country along with a decline in natural increase has led to waning population growth since the 2008 financial crisis.
William Frey, a senior fellow at The Brookings Institution, told AP that the 2019 population growth is the slowest since 1917/18.
“With the aging of the population, as the Baby Boomers move into their 70s and 80s, there are going to be higher numbers of deaths,” Frey said. “That means proportionately fewer women of childbearing age, so even if they have children, it’s still going to be less.”
The Census Bureau said the natural population increased by 957,000 from 2018 to 2019, which is the first time it has breached 1 million since the late 1970s.
Immigration has also been on the decline since adding 1 million in 2016. From 2018 to 2019, immigration inflow only added 595,000 to the total population.
On a state by state analysis, New York lost 77,000 people; Illinois lost 51,000 residents; West Virginia lost 12,000 people, Louisiana lost 11,000 residents, and Connecticut lost 6,200 people. Alaska, Hawaii, Mississippi, New Jersey, and Vermont each lost about 5,000 residents over the period.
Regionally, the South recorded .8% population growth from 2018 to 2019, due mostly to natural increases and inbound domestic immigration. The Mid-Atlantic and Northeast regions saw population declines for the first time in a decade, declining .1% because of people moving to the South.
And while the population increases across the world are mainly behind us, the next big demographic trend is one where the global fertility rate could collapse in the coming decades.
We recently noted how Japan, the world’s third-largest economy, just recorded the lowest amount of births since 1874.
In China, the world’s second-largest economy, a significant dip in the country’s birth rate was recorded earlier this year that showed births in 2018 hit levels not seen since 1949.
Decelerating growth of the world’s births and soaring deaths are visible around the globe. This means policymakers in the US will take a page from China and Japan’s playbook and create incentives for women to have more children with hopes of starving off demographic armageddon.
With the large Conservative majority in government, both UK markets and the economy are likely to enter a honeymoon period in the months ahead. While many are focused on Brexit as the main shock that could hit the UK economy, there are at least three other potential shocks that could be as significant.
And crucially they could all materialise in the next five years during the term of the newly elected UK government:
(1) Recession shock
Since the 1950s there has been a recession every nine years on average. The last UK recession was in 2008 around the global financial crisis, and we are now entering 2020. So on that metric, we are overdue. Perhaps the UK facing no inflation problem (allowing the Bank of England to keep interest rates very low) has kept a recession at bay. Equally, perhaps the US fiscal stimulus of recent years has prolonged the global business cycle, and the UK has been a beneficiary.
But the odds of a UK recession in the next five years are very high. There is no new large China-sized economy that will emerge like it did in the 2000s. Nor are tech advances having the same economy-wide productivity boosts as they were in the 1990s. At the same time, UK debt levels are high, the UK current account deficit is widening, and unit labour costs are on the rise. All these factors suggest the foundations for a recession are being set. And though the timing is unclear, within the first term of the new UK government looks probable.
(2) Market shock
No economies escaped the trauma of the 2008 financial crisis, not even the UK. It was caused by credit-fuelled asset bubbles, notably in real estate. Banks were at the heart of this and, ever since 2008, they have been regulated to ensure such a crisis will not repeat itself. However, crises typically do not follow the script of their predecessors. The next crisis will probably occur just where regulators fail to focus, or worse, because of mistakes regulators make where they have been focused.
The most obvious candidate would be a crisis in the non-bank financial sector. Regulators have constrained bank balance sheets, while asset managers have more freedom. Moreover, private markets – where private equity and leveraged finance live – have exploded. And these have even fewer constraints.
Perhaps the biggest advantage these players have is that they can more easily invest in illiquid assets. And much like banks incorrectly valued their ‘level 3’ assets in the run-up to 2008, private equity and asset managers could be overvaluing their illiquid assets. Their potentially obvious error would be to assume those assets have liquid markets into which they can be sold.
Already in the UK we have seen the Woodford fund and M&G property funds suffer on this score. In the US we have seen spikes in the repo market as pools of liquidity have been segmented. If these are the early signs, then we could be in for a much larger market liquidity shock. This could have far-reaching consequences for the economy, especially business investment and household wealth.
(3) Pension shock
The long-heralded pension crisis is almost upon us. Twenty years ago in the UK, one in eight people were over the age of 65. Today that number is nearing one in five. Throw in people in their fifties and early sixties, then close to 40% of the population are worrying about their pensions.
What makes matters worse is that people are expected to live well beyond the statutory retirement age of 65. For example, on a cohort-basis, women in the UK are now expected to live to 92 years. That means – at the current age of retirement – potentially 27 years living off their pensions. The trouble is that current pension schemes will only offer on average 28% of earlier earnings in retirement. This is well below the OECD average of 60% and closer to what is seen in Mexico and Lithuania than France (74%), Germany (52%) or even the US (49%). This is a recipe for social unrest.
But what will trigger a crisis in the coming years is the collapse in bond yields. In the 1990s and 2000s, UK 10-year bond yields (adjusted for inflation) averaged over 4%. As a pension fund, if you compounded this out, funding future retirement benefits was straightforward. However, in the 2010s, the real yield has collapsed to 0.15%. Worse still, since 2017 the real yield has been negative. Now the compounding accelerates against pension funds.
Of course, many pension funds, especially in the public sector with its crippling defined benefits, have diversified into private equity and other riskier investments. The trouble with these are that their returns are falling too. If anything, they appear to be converging to those of public equity markets. This begs the question, why is the public sector paying the high fees of private equity to get an illiquid version of public equity returns?
In the end, public sector workers and others will need to increase their contributions to make up for any shortfalls. One of the largest pension schemes in the UK, the Universities Superannuation Scheme (USS), did try to do just that. However, their request was met by university lecturers and support workers going on strike. This is likely just the beginning. And lest one think this a UK problem – French workers have recently taken to the streets over sweeping pension reforms
Bottom Line
The UK is not only facing the potential of a Brexit-related shock, but there are three other plausible shocks and crises the UK government will face in its five-year term. This will require adept and creative central bank policy – that crucially will have to differ from the post-2008 policies that have led to these coming crisis. Moreover, with the central bank policy toolkit severely constrained, the onus will be on the government to avert or mitigate these. But is it ready to do so?
“No More Transit Risk”: Ukraine & Russia Ink Landmark Gas Transit Deal, Hammering European Gas Prices
Ukrainian President Volodymyr Zelensky has hailed the completion of an against all odds landmark deal with Russia’s Gazprom as ensuring “energy security and prosperity for Ukrainians.”
It will keep natural gas flowing to Western Europe via Ukraine for the next five years, which is estimated to net Ukraine $7 billion (€6.25 billion) in gas transit fees by 2024.
After a series of compromise breakthroughs over the past weeks, including Gazprom paying out $2.9 billion legal settlement to Naftogaz and Kiev in turn agreeing to wave a separate legal claim, the two sides finally inked the historic deal on Monday, which signals a broader thawing in tensions and dramatic deescalation after Moscow and Kiev have for years stood on the brink of open war.
Per Gazprom Chairman Alexey Miller, the accord has already gone into effect as of Tuesday: “After five days of uninterrupted negotiations in Vienna, definitive decisions have been made and final deals have been reached,” he said in a statement.
And Zelenskiy further presented it as an ‘everyone wins’ breakthrough: “Europe knows that we will not fail when it comes to energy security,” he said. Indeed European gas markets immediately felt the effects:
European gas and power prices extended declines after a last-gasp accord between Russia and Ukraine on natural gas flows averted a winter supply crisis.
“There’s no more transit risk,” said Thierry Bros, an associate at Harvard University’s Davis Center for Russian & Eurasian Studies. “We are in a world with a lot of LNG and piped gas and the Russians want to keep their market share in Europe.”
Benchmark Dutch gas prices dropped 0.7%, taking their record annual plunge to 44%. German power traded at its lowest level since May 2018.
This collective sigh of relief which came down to the wire, given the previous accord was set to expire on December 31, further comes ironically enough after sanctions-happy Washington has claimed all along to be acting in Ukraine and Europe’s best interest as it shouts “Russian interference” in Europe’s energy sector (especially given current US pressures over the Nord Stream 2 direct Russia-Germany pipeline).
Clearly the parties now hailing the new deal don’t see it that way. Instead, all indicators suggest a slow rapprochement between Russia and Ukraine, driven by necessity of supplying energy to Europe, and given Russia naturally wants to keep its significant chunk of the European market online.
It bears repeating that such good faith compromise between the two just isn’t supposed to happen! — that is according to the shrill cries of the neo-Cold War pundits who keep telling us Putin is not only bent on taking over Ukraine, but Europe as well — especially through gas and energy dominance.
In May 2009, Jack Balkin and Reva Siegel published an impressive volume of essays about the future of constitutional law, titled The Constitution in 2020. In October 2009, Yale Law School hosted a conference about the book. I live-blogged the proceedings on my then-nascent blog (See 1, 2, 3, 4, 5, 6, 7, 8, 9, 10).
October 2009 was a very constitutional universe. Boumediene v. Bush and District of Columbia v. Heller were barely a year old. The legal challenges to Proposition 8 were in their early stages. NAMUDNO v. Holder suggested that the Voting Rights Act was in jeopardy. Justice Sotomayor was now confirmed to the Supreme Court, and Solicitor General Kagan had recently argued Citizens United. The Affordable Care Act was winding its way through Congress, and rumblings about the individual mandate’s constitutionality began to form. We are in a very different place a decade later.
The book offered what it called “powerful blueprint for implementing a more progressive vision of constitutional law.” I am generally skeptical of any long-term strategies, especially when the courts are involved. I critiqued Chief Justice Roberts’s so-called “long game” in the wake of Justice Scalia’s passing:
The Supreme Court does not exist in a vacuum, where stasis is maintained. Everything changes. Even if the Chief Justice has a broad vision of what he wants to accomplish, had President Clinton appointed three new Justices, all of those plans would have vanished instantly. His first decade of planning and calculating would have been for naught, and the Chief Justice would have been in dissent for a generation. Even if a Republican President appoints two or three Justices, there is no way for Roberts to know how they’ll vote. Maybe those Justices will also have a different master plan, and will not agree with the Chief’s plan. Or maybe the nominee will turn out to be another Souter or Stevens. Or what if the plan falls apart much sooner? Justice Scalia’s unexpected death brings this entropy into focus.
I hope to write more this year about how the Constitution in 2020’s blueprint fared over the past decade.
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During colonial times, European powers exploited Africa for the vast resources that it possesses. But what China is doing today is actually much worse. Yes, the Chinese greatly desire African resources, but ultimately what they want is Africa itself. But instead of conquering Africa using military force, China is using economics instead. Today, more than 10,000 Chinese-owned firms are operating in Africa, and virtually every major road, bridge, railway and skyscraper is being built by the Chinese. As a result, most African nations are very deeply indebted to China at this point. And as you will see below, when those debts go bad that gives the Chinese a tremendous amount of leverage.
Many people believe that the endgame for China is to make a whole lot more money and to gain control over a whole lot more resources. And China is undoubtedly pursuing those goals, but as Forbes has noted, ultimately what this is about is turning Africa “into another Chinese continent”…
The reason Chinese corporations are in Africa is simple; to exploit the people and take their resources. It’s the same thing European colonists did during mercantile times, except worse. The Chinese corporations are trying to turn Africa into another Chinese continent. They are squeezing Africa for everything it is worth.
These days, it is difficult to find a major construction project on the continent that is not being handled by the Chinese, and this has enabled them to put their imprint on some of the largest African cities. For example, just check out what is happening in Nairobi, Kenya…
On the outskirts of Nairobi, Kenya, a small sign points to “Beijing Road,” where a new housing development called the Great Wall Apartments looks like the concrete towers you’d find in a Chinese city.
Across Africa, Chinese developers are building highways, light rail systems, apartment buildings, and entire cities.
Most of the “cities” that China is building are known as “special economic zones”. These “special economic zones” are essentially enormous self-sustaining Chinese cities that have been dropped right into some of the most strategic parts of Africa. For example, one of the biggest has been built right next to Lagos, Nigeria…
Next to Lagos, Nigeria, Chinese developers have built a walled-off “special economic zone”–basically a separate city, with separate rules designed to attract investors–based on a model they’ve used inside China for the last 30 years. After Shenzhen became a special economic zone in the 1980s, it went from a small town of 20,000 to, by some counts, 15 million today.
In these “special economic zones”, you will find Chinese factories staffed with Chinese managers that are supervising Chinese workers that are using Chinese equipment to make their products.
Bagamoyo, if the project goes ahead as planned, will be transformed into the largest port in Africa. That is looking ever more likely: after years of delay, the Tanzanian government says it is in the final stages of talks with state-run China Merchants Holdings International.
The lagoon will be dredged, to allow access to the vast cargo ships that will queue many miles out to sea. As for the special economic zone, the original masterplan shows factories in a fenced-off industrial area, and apartment blocks to accommodate the estimated future population of 75,000. There is even talk of an international airport. Many of the villagers have already accepted compensation for the loss of their homes.
Of course Chinese development is definitely not limited to these “special economic zones”. In Ethiopia, the capital city of the entire nation is literally becoming known as “the city that China built”…
Cars chug through the city on smooth Chinese roads, Chinese cranes lift the skyline, sewing machines hum in Chinese factories in Chinese-owned industrial parks, tourists arrive at the Chinese-upgraded airport and commuters ride modern Chinese trains to work.
Simply put, Addis Ababa is becoming the city that China built — but at what diplomatic and economic cost?
Are you starting to get the picture?
As the western world sleeps, the Chinese are literally taking over an entire continent.
And as they increasingly dominate the landscape economically, they are bringing their culture with them as well…
Chinese influence also goes beyond physical infrastructure. Now it’s possible to pick up a copy of China Daily, China’s state-run newspaper, in some African cities, and watch CCTV, China’s state-run news channel. Some cities have Chinese language schools, and some African students are given grants to go study in China.
Apologists for China could point out that all of this development has pulled millions of Africans out of poverty.
China is now Africa’s biggest trade partner, with Sino-African trade topping $200 billion per year. According to McKinsey, over 10,000 Chinese-owned firms are currently operating throughout the African continent, and the value of Chinese business there since 2005 amounts to more than $2 trillion, with $300 billion in investment currently on the table. Africa has also eclipsed Asia as the largest market for China’s overseas construction contracts. To keep this momentum building, Beijing recently announced a $1 billion Belt and Road Africa infrastructure development fund and, in 2018, a whopping $60 billion African aid package, so expect Africa to continuing swaying to the east as economic ties with China become more numerous and robust.
Needless to say, the Chinese are not doing all of this out of the goodness of their hearts. African governments are going very deep into debt in order to afford all of this infrastructure, and several of them are now in way over their heads…
There have already been warning signs: the $4 Addis Ababa-Djibouti Railway ended up costing Ethiopia nearly a quarter of it’s total 2016 budget, Nigeria had to renegotiate a deal with their Chinese contractor due to their failure to pay, and Kenya’s 80% Chinese-financed railway from Mombasa to Nairobi has already gone four times over budget, costing the country upwards of 6% of it’s GDP.
This is the sort of predatory lending that western powers once did so well, but now China has taken things to an entirely new level.
There have been credible reports of talks between the Zambian government and China on handing over the country’s national electricity company, ZESCO to the Chinese due to the inability of Zambia to meet its loan repayment promises. This is expected as China is already in control of the country’s broadcasting company, ZNBC. There are also fears the main airport in Lusaka could be the next target.
Obliviously, Zambia is in trouble. And for other African beneficiaries of Chinese loans, they should prepare for the same possibility in the eventuality that they aren’t able to repay China.
Basically, Zambia is in the process of becoming totally owned by China.
And this is going to happen in country after country until someone stops them.
But who is going to stop them?
After all, the U.S. is about a trillion dollars in debt to the Chinese at this point.
When it comes to foreign policy, China is playing chess while most of the western powers are playing checkers.
They are literally running circles around us, and we are so clueless that we don’t even understand what is happening.
In May 2009, Jack Balkin and Reva Siegel published an impressive volume of essays about the future of constitutional law, titled The Constitution in 2020. In October 2009, Yale Law School hosted a conference about the book. I live-blogged the proceedings on my then-nascent blog (See 1, 2, 3, 4, 5, 6, 7, 8, 9, 10).
October 2009 was a very constitutional universe. Boumediene v. Bush and District of Columbia v. Heller were barely a year old. The legal challenges to Proposition 8 were in their early stages. NAMUDNO v. Holder suggested that the Voting Rights Act was in jeopardy. Justice Sotomayor was now confirmed to the Supreme Court, and Solicitor General Kagan had recently argued Citizens United. The Affordable Care Act was winding its way through Congress, and rumblings about the individual mandate’s constitutionality began to form. We are in a very different place a decade later.
The book offered what it called “powerful blueprint for implementing a more progressive vision of constitutional law.” I am generally skeptical of any long-term strategies, especially when the courts are involved. I critiqued Chief Justice Roberts’s so-called “long game” in the wake of Justice Scalia’s passing:
The Supreme Court does not exist in a vacuum, where stasis is maintained. Everything changes. Even if the Chief Justice has a broad vision of what he wants to accomplish, had President Clinton appointed three new Justices, all of those plans would have vanished instantly. His first decade of planning and calculating would have been for naught, and the Chief Justice would have been in dissent for a generation. Even if a Republican President appoints two or three Justices, there is no way for Roberts to know how they’ll vote. Maybe those Justices will also have a different master plan, and will not agree with the Chief’s plan. Or maybe the nominee will turn out to be another Souter or Stevens. Or what if the plan falls apart much sooner? Justice Scalia’s unexpected death brings this entropy into focus.
I hope to write more this year about how the Constitution in 2020’s blueprint fared over the past decade.
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In May 2009, Jack Balkin and Reva Siegel published an impressive volume of essays about the future of constitutional law, titled 
