martes, 14 de agosto de 2018

Soviet Collapse Echoes in China’s Belt and Road

Grand investment plans for unproductive regions have caused empires to founder before. 

The drive to develop Siberia helped precipitate the Soviet Union’s collapse.

What causes empires to fall?

According to one influential view, it’s ultimately a question of investment. Great powers are the nations that best harness their economic potential to build up military strength. When they become overextended, the splurge of spending to sustain a strategic edge leaves more productive parts of the economy starved of capital, leading to inevitable decline.

That should be a worrying prospect for China, a would-be great power whose current phase of growth is associated with an increasingly aggressive military posture and a tsunami of capital spending in its strategic neighborhood.

People's Republic

China's labor force is forecast to decline in 2018 for the first time in five decades

Source: National Bureau of Statistics of China, Bloomberg Opinion calculations

Like the Soviet Union in the 1970s, China is coming to the end of a long labor-force boom, and hoping that an orgy of investment will keep the old magic going while stabilizing its fraying frontiers. The success or failure of its Belt and Road projects — and the still greater sums it’s spending domestically — will determine whether the nation achieves its dream of prosperity or succumbs to the same forces that doomed the U.S.S.R.

The conventional worry about the Belt and Road initiative — an open-ended framework for an estimated $1.5 trillion of infrastructure projects over the next decade across Southeast Asia, South Asia and Central Asia — is that it will doom the recipients of its largess to a future as indebted clients of Beijing.

A Billion Here, a Billion There

The bulk of major Belt and Road projects are in Malaysia, South Asia and Indochina

Source: Nomura Securities, AIIB, China-Pakistan Economic Corridor, news reports, Bloomberg Opinion calculations

Note: Indochina includes Myanmar, Thailand, Laos and Cambodia. We've broken Malaysia out separately and no projects in Vietnam are large enough to show on this chart.

Failed projects like Sri Lanka’s Hambantota port may indeed be a way for China to quietly extend its strategic power around the world. 1 But defaults on investments cause problems for creditors as well as debtors. The risk for President Xi Jinping is that the toll of all that misdirected spending gradually undermines the productivity growth on which China’s current might was built.

Consider some of the projects still on the drawing board. Think the $1.6 billion price tag Nomura Holdings Inc. has put on Hambantota looks excessive? Then check out Kyaukpyu in Myanmar, where Citic Group Corp. is leading the construction of a $9.6 billion deep-sea port and industrial zone to hook up with oil and gas pipelines built by China National Petroleum Corp.

There’s certainly a strategic logic here. China’s links to the western markets that consume its goods and the Middle Eastern countries it depends on for petroleum pass through a choke point in the straits of Singapore and Malacca, a worry for the country’s military planners. Building railways and pipelines to the Indian Ocean provides an alternative route west.

Put That in Your Pipe

Gas pipelines generally need to use at least half of their capacity to break even. The China-Myanmar pipeline has barely cracked one-third utilization since it opened in 2013

Source: China Customs General Administration, Bloomberg, Bloomberg Opinion calculations

Note: Complete trailing 12-month data starts in 2014, a year after the pipeline opened.

On the economics, however, the idea falls down. The gas pipeline to Kyaukpyu has barely run at one-third of capacity since it was inaugurated in 2013, and the parallel oil tube sat dry for years before the first cargo was loaded up last year — not a great return on the $2.5 billion spent building them. A 260,000 barrels-a-day processing plant at the end of the pipe in Kunming that’s about the size of the U.K.’s biggest oil refinery will be similarly underutilized unless more crude deliveries arrive at Kyaukpyu.

Or take the web of touted rail projects through central Asia which form a centerpiece of most maps of Belt and Road projects. As we’ve argued before, such plans misunderstand both the long history and basic economics of east-west trade, which has almost always been far more dependent on maritime transport via Southeast Asia, India and the Arabian Peninsula than on overland Silk Roads through the Eurasian steppe.

Go West, Young Man

Belt and Road projects off the Asian mainland in Indonesia, the Philippines and Sri Lanka constitute only a small portion of the total

Source: Nomura Securities; AIIB; China-Pakistan Economic Corridor; Bloomberg Opinion calculations

Note: There's no definitive accounting of Belt and Road projects, or which of the development belts identified projects belong to. We've attributed projects at the country level although (for instance), Myanmar's Kyaukpyu port could be considered part of the Maritime Silkroad rather than the China-Indochina belt.

The disadvantages of land transport are compounded these days by the existence of giant container ships capable of carrying almost $1 billion of cargo at a time, and the variety of different track gauges across Asia which require costly and time-consuming transfers.

The value of freight between Europe and Yiwu, a much-touted overland rail hub near Shanghai, came to 2.27 billion yuan ($330 million) in the first four months of this year, according to China Railway Express Co. That’s about one third of what you’d get on a single mega-container ship, and there are hundreds of somewhat smaller vessels plying east-west routes. China’s top four ports alone process about the same value of cargo every three hours.

I Must Go Down to the Sea

The overwhelming majority of China's trade with Europe is by sea and air. Overland routes don't cut it

Source: Center for Strategic and International Studies

Note: 2016 data.
It’s worth considering all this misdirected spending in the context of the Soviet Union’s decline. Around the middle decades of the 20th century, Moscow presided over a China-style economic miracle that caused many in the West to fear they would be overtaken. In the 1950s, the Soviet economy grew faster than that of any other major country barring Japan.

There are many reasons this development path started to falter in the 1970s, including the rigidities of a planned economy, a plateau in industrial workforce numbers, and the vast sums dedicated to Cold War-era military spending. Still, it’s hard to tell the story of declining Soviet productivity without also considering its own Belt and Road initiative, the development of Siberia.

From the 1960s, Siberia sucked up about a third of the Soviet Union’s heavy-construction equipment despite hosting just a fraction of the country’s population, as Moscow pumped in capital to develop gas fields, coal mines, aluminum plants, and a duplicate of the Trans-Siberian railway several hundred kilometers to the north.

Hard Times

Productivity declines in oil, coal and steel in the 1970s and 1980s dragged down the performance of the entire Soviet economy

Source: Allen, Robert C., "The Rise and Decline of the Soviet Economy", 2001

“The development of Siberian natural resources was a vast sink for investment rubles,” as economist Robert C. Allen wrote in a 2001 paper, diverting spending from more attractive projects west of the Urals and eventually undermining the productivity of the economy as a whole. “The Soviet Union’s ‘abundant’ natural resources had become a curse,” he wrote. “Resource development swallowed up a large fraction of the investment budget for little increase in GDP.”

Could something similar happen in China? As with the U.S.S.R.’s strategic concerns about shoring up its eastern fringes, Beijing’s fears of separatism in its west have driven a surge in capital projects there in recent years, next to which Belt and Road projects look like merely the tip of the iceberg.

Crowding Out

The share of China's fixed capital formation going to its most-productive eastern regions has been in decline for a decade

Source: National Bureau of Statistics of China, Bloomberg, Bloomberg Opinion calculations

Western China accounted for about 19.5 percent of the country’s fixed capital formation in 2016, compared to 15.4 percent in its dynamic Tier One cities and Guangdong province. Less developed parts of central, northern and western China have swallowed up the bulk of fixed capital ever since 2007, according to official data.

That’s matched the end of China’s productivity miracle, too. Unit labor costs have outpaced productivity growth since 2008, meaning the economy has been growing less and less competitive over time, according to a report last month by the Conference Board, a research group. About 90 percent of China’s advantage over the U.S. in terms of unit labor costs in 2016 was explained by currency effects alone, economist Siqi Zhou wrote.

China’s anxiety about its western fringes has many troubling effects. Compared with the hundreds of thousands of Uighurs who’ve been sent to re-education camps and the millions more under constant surveillance in Xinjiang province, wasted capital on transport mega-projects may seem like a minor problem.

It’s not, though. In a country where reliable economic data is thin on the ground and the number of people in work is now in absolute decline, the toll of ill-conceived investments risks eating away at the foundations of growth.

China’s rise this century was driven by its embrace of world trade and the coastal provinces most exposed to it. In this retreat inland, it’s sowing the seeds of decline.

lunes, 13 de agosto de 2018

The U.S. Becomes an Oil Economy

Booming production and falling imports shift its role in the business cycle

Up, up, up.

Justin Fox is a Bloomberg Opinion columnist covering business. He was the editorial director of Harvard Business Review and wrote for Time, Fortune and American Banker. He is the author of “The Myth of the Rational Market.” 

The oil market has changed a lot over the past decade. Here, for example, is the latest data on U.S. imports and exports of crude oil and petroleum products, released by the Energy Information Administration at the end of last month:

Closing the Oil Gap

U.S. monthly trade in crude oil and petroleum products, in barrels

Source: U.S. Energy Information Administration

The U.S. has gone from a big-time net importer of oil to a small-time one. The latest base-case forecast from the EIA is that it will be a “modest net exporter” from 2029 through 2045. Neither the EIA nor anyone else (that I know of, at least) foresaw a huge increase in U.S. oil production over the past decade, though, so let’s leave the forecasts aside. What has already happened is momentous enough. Here, for example, is the long view (going back to 1870) on U.S. crude oil exports:

Hmmm, This Is New

Annual U.S. crude oil exports, in barrels

Source: U.S. Energy Information Administration

2018 figure assumes exports will continue at January-May average.

Oil’s role in the U.S. economy has changed so much and so fast thanks to hydraulic fracturing and other new methods of getting oil out of shale that it’s worth pausing from time to time to consider what this entails. I’ve written before about the oil and gas boom’s role in keeping the trade deficit from exploding, and in making it harder for this country “to take the leading role in shaping the post-fossil-fuel energy landscape.” Now let us consider the domestic oil boom’s impact on the business cycle.

The standard story about oil and the U.S. economy, as University of California at San Diego economist James D. Hamilton laid out in a 1983 paper, a 1996 follow-up and a paywall-free 2005 summing-up, is that sharp oil-price increases have a habit of causing recessions. “The key mechanism whereby oil shocks affect the economy,” Hamilton wrote in 2005, “is through a disruption in spending by consumers and firms on other goods.”

Because the U.S. produced far less oil than it used, past oil-price increases not only took money out of Americans’ pockets, but also shipped much of it overseas. Booming U.S. oil production and a shrinking trade deficit in oil ought to change that equation, at least a little.

There hasn’t been a major price spike since the U.S. oil boom began (in part because the U.S. oil boom has precluded it), but there was a major collapse in the latter half of 2014, with the price of crude falling 59 percent in dollar terms in just six months. “This decline produced a stimulus of about 0.7 percentage points of real GDP growth by raising private real consumption,” economists Christiane Baumeister of the University of Notre Dame and Lutz Kilian of the University of Michigan concluded in 2016. “This stimulating effect, however, has been largely offset by a reduction in real investment by the oil sector.”

Since early 2016, oil prices have recovered somewhat, but not rapidly enough to put a big crimp in consumer or business spending. Real investment in the U.S. oil and gas sector, meanwhile, bottomed out in the fourth quarter of 2016 and, while it’s still not back to the levels of 2012 through 2014, appears to have been a major driver in the pickup in economic growth last year and so far this year. CNBC’s Steve Liesman talked to several economists in May who had concluded that rising oil prices were now a “wash” for the U.S. economy; I wouldn’t be surprised if, as long as the increase is gradual enough, they’re actually a net positive. After all, the energy intensity of the U.S. economy — the amount of energy consumed per dollar of real gross domestic product — has been declining steadily since the early 1970s. On aggregate, at least, we can afford somewhat higher energy prices.

That’s not to say that a sharp spike in oil prices would be great news for the U.S. economy. The disruption for households and non-oil businesses might well outweigh the profits of and increased investment by the energy industry. The share of economic activity accounted for by oil and gas extraction and refining is higher than it was in the 1990s and early 2000s, but that still leaves more than 95 percent of the economy in the hands of oil consumers.

Oil and the U.S. Economy

Industry value-added as a percentage of gross domestic product

Source: U.S. Bureau of Economic Analysis

The best economic situation all around, in fact, would seem to be prices that are high enough to allow oil drillers to turn a profit 1 but still stable. For the past half century, interestingly enough, the Organization of the Petroleum Exporting Countries has been trying (and often failing) to keep oil prices profitably high and stable through production quotas and other means. While it has often been assailed by U.S. politicians — including President Donald Trump — for this uncompetitive, anti-free-market behavior, OPEC actually got the idea from the U.S., where the Texas Railroad Commission regulated and restricted oil production from the 1930s through the 1960s. Before that, in the late 1800s, John D. Rockefeller had tempered the nascent oil industry’s boom-bust tendencies by seizing control of most of it. Now that the U.S. is a major oil power again, don’t be too shocked to see similar attitudes and efforts resurface here.

Argentina Hikes World’s Highest Rate Again Amid Turkey Contagion

Patrick Gillespie and
Carolina Millan

Pledges to hold it at that level until at least October

Central bank offers $500 million in extraordinary auction

The Central Bank of Argentina in Buenos Aires.

Argentina took emergency steps to stabilize its currency in the wake of an emerging-market rout caused by Turkey’s crisis, jacking up its already highest-in-the-world interest rate by 5 percentage points and outlining a plan to eliminate short-term notes.

Policy makers set the rate for seven-day notes at a record 45 percent and pledged to keep it at that level at least until October. The central bank will phase out 1 billion pesos ($33.2 billion) of short-term notes by December, and said it would sell $500 million at an auction Tuesday to relieve pressure on the peso.

Argentina’s dramatic moves are in contrast to what’s happening in Turkey, where President Recep Tayyip Erdogan’s government has lost the confidence of investors by refusing to raise interest rates in the wake of the crisis. While Argentina suffers from some of the same economic problems -- fast inflation and sizable current-account and budget deficits -- the Latin American country is reacting with orthodox policies blessed by advisers from the International Monetary Fund.

“The central bank is showing determination to prevent an overshooting of the the currency and inflation,” said Alberto Ramos, the head of Latin America research at Goldman Sachs. “An external shock has hit the currency and they’re reacting in the classic way -- what you need to do is hike rates and hope to be able to stabilize the currency with that.”

The peso recovered from its lows of the day after the rate announcement. It was down 2.4 percent to 29.98 per dollar on Monday afternoon after falling as much as 3.6 percent.

It was the fourth surprise rate hike by the central bank this year as officials try to combat a currency selloff spurred by concern inflation was out of control and the government wasn’t taking sufficient steps to shore up the economy. Argentina’s peso has tumbled 38 percent this year and the yield on its century bonds has soared past 10 percent.

But the most recent selloff in the peso --the more-than 6 percent drop of the past two days -- was spurred by concerns Turkey’s problems would infect other emerging markets. Argentina was seen as among the most vulnerable economies.

“They had to do something against contagion,” said Siobhan Morden, the head of Latin America fixed income at Nomura Holdings. “You have to do what you can to minimize financial contagion to the real economy.”

Monday’s announcement came the same day the IMF began its mission to Argentina after granting a $50 billion credit line to the South American nation in June. That was the same month former Finance minister Luis Caputo took over at the central bank from Federico Sturzenegger, who admitted he had lost credibility with investors as he resigned.

The Treasury Ministry separately announced Monday that it instructed the central bank to immediately cancel its daily dollar auction. It had been selling between $50 million and $100 million a day since June 21 to defend the peso. In its statement, the central bank reserved the right to sell its reserves as it sees fit.

domingo, 12 de agosto de 2018

Why is Your Brand at Risk?

The growth and development of the internet have created new risks, which are external to the organization and are not included in the conventional internal protection and information security systems of the organization. The uniqueness of these risks is in the exploiting of sensitivities and the performance of malicious activities and attacks of systems that are not within the control of the organization. They include cases of violation of intellectual property rights, exploiting of brand names, impersonations, identity theft, imitations, slander, misleading of customers, fraud, etc.

The Motives and Motivation of The Attacker

One of the major income sources on the internet is creating volumes of users to such sites that pay for each entry in the Pay-Per-click method, as well as other similar methods. As a result various parties are motivated to use illegitimate or controversial activities in order to attract traffic of users. One of the main means for these activities, are domain names that usually match brand names, upon which attacks are implemented.

Furthermore, the internet provides many opportunities and means to all those who wish to harm and incur damage to companies or organizations – such as hackers, former employees, disgruntled employees, competitors, cyber-squatters and lately also terrorist organizations. All of the above are motivated by a desire to damage the organization, gain economical profit or accomplish other ideological goals. The outcome shows that in all cases, there is direct economic and brand equity damage to the company.

The Risks

The usage of a company’s brand to attract users to other websites.

Domain names hijacking through counterfeits or modification in the registries.

Phonetic imitation of domain names.

Phishing and Pharming – fraud and corporate impersonation.

Web-site Shut-down through un-authorized modifications of domain definitions.

Slander and distribution of offensive information over the Internet.

Non renewal of domain names because of technical errors, which cause Shut-downs of web-sites, Shut-downs of mail servers, and the loss of the domain.

What is MARCAPOLITICA Reputation Protection?

Reputation Protection is continuous monitoring of the entire web, identifying and analyzing potential and actual threats to your brand reputation, and taking them down before they become your next full blown crisis.

Comprehensive reputation management is more than just who speaks badly about you, it’s who damages your revenues.

Traditional reputation management monitors top search engine results that account for only 4% of the web. The deep web includes so many other threats that damage your reputation and cause revenue loss. MARCAPOLITICA offers a comprehensive monitoring and analysis that includes both top search engines and the deep web.

MARCAPOLITICA Reputation Protection

MARCAPOLITICA’s robust technology monitors the entire web, then identifies and prioritizes the risks to your organization’s reputation and revenue. It also protects against revenue loss by providing various options to takedown reputation damaging content, infringing pages, fraud, knock-offs, etc. from all digital platforms.

MARCAPOLITICA’s unique capabilities:

Non-stop monitoring of the entire web.
Covers websites, domain names, search engines, mobile apps, PPC ads, marketplaces and social media.
Offers a variety of takedown options to deal with online reputation and revenue damages.
Groundbreaking pattern recognition finds major abusers.
Machine learning improves results based on your use of the system.
Traditional Reputation Management is Just Not Enough

Traditional reputation management service providers only monitor top search engine results and focus on those who speak badly about you.

MARCAPOLITICA offers a comprehensive monitoring and analysis that covers not only bad reputation but also all threats that damage your revenues, such as:
Loss of on-line customers – diverting on-line traffic is a common phenomenon. When potential customers the search for you are misled and diverted to other websites (such as competitors websites, fraudulent websites, counterfeit websites, etc.) you lose potential customers and potential sales revenue.
Trademark abuse – unauthorized use of your trademarks can dilute your brand image and affect your customers’ brand perception.
On-line counterfeit sales – when customers search for you and unknowingly buy counterfeit products, you not only lose the potential revenues from these customers, they also get substandard products, believing they bought a genuine one, which leads to disappointment and deterioration of your reputation.
Slanderous content –negative content about you your products or services can seriously damage your reputation. Whether these comments are valid or not, you need to monitor them and react when needed.
Improper trademark usage – associating your brand with improper online content (e.g. phishing, porn, gambling and violent content websites).

Why removing damaging websites from Google is insufficient

Many abusive websites block Google from scanning their websites.
Almost 3/4 of all web traffic comes from link surfing (using links to move from page to page on-line) and not search engines.
Google does not cover all digital platforms.
First page (or pages) in Google does not cover long tail results. Many websites with low traffic stats could cause more damage than 1 popular website.
Dealing with abusive sites before they reach the top in search result pages can save you time, money and can prevent the damage to your reputation and revenues.



Scans and monitors the Internet to find websites that abuse your brand.
Measures and collects data about suspicious websites.
and automatically analyzes
Web content
SEO data
Domain names
Traffic and statistics
Search engine results
and more
Prioritizes risks using automated metrics-driven analysis to help you better allocate your resources and focus your attention on the websites that present the most risk.

sábado, 11 de agosto de 2018

It’s Bernie’s Party Now


A voice crying in the wilderness is supposed to be ignored, not rewarded with accolades and growing influence.

Bernie Sanders is the prophet with honor in his own party. The former socialist gadfly is now the socialist trendsetter. At the moment, he has to be counted among the most successful ideological leaders in a generation in terms of moving the terms of the American political debate and putting previously discounted ideas on the agenda.

This doesn’t mean that he’ll be the next Democratic nominee for president, or even run. It doesn’t mean that his ideas are good (I personally consider them godawful), or that they will make for a salable platform for the Democratic Party (which I very much doubt).

It does mean that when it comes to domestic policy on the left, it’s Bernie’s world and the rest of the Democrats live in it.

It’s impossible to imagine a more successful protest campaign for president than his in 2016 (except for Donald Trump’s).

Sanders was an irrelevance for a couple of decades in Congress. He ran to get a higher profile, and succeeded not merely in that, but in seriously challenging Hillary Clinton. He is now is a pacesetter in the party while she rues what might have been.

To be sure, much of this was inevitable. Whatever brake on the left Barack Obama represented was going to be released once he went home, especially if Democrats couldn’t hold the White House. The advent of President Donald Trump pressed the accelerator on the party’s radicalization.

Moreover, the bar for being a refreshing voice in the party when Sanders emerged in 2016 wasn’t particularly high. All he had to do was say something new and sincere compared to Hillary Clinton, who represented a Clintonism shorn of the freshness and life it had when her husband first entered the national stage in 1992.

In 2016, though, Sanders embodied the first real political expression of a post-Obama left, disappointed by his alleged incrementalism and determined to move beyond it.

His success represents a version of what has happened to center-left parties around the West, as they have collapsed or been eclipsed by new forces. The two-party system is a durable feature of the American system, so the Democrats aren’t going anywhere, but Sanders is an interloper. As Hillary Clinton complains, he’s “not even a Democrat.”

This is not a cutting attack. Indeed, it doesn’t matter in the least to the Democrats in good standing who are vacuuming up Bernie’s ideas. You can hardly be a U.S. senator who hopes to run for president if you aren’t co-sponsoring pillars of the Sanders agenda such as Medicare for All, free college and the $15 minimum wage.

“Just a few short years ago,” Sanders crowed last year, “we were told that raising the minimum wage to $15 an hour was ‘radical.’” Indeed, he was told that, and for good reason. But he had five co-sponsors for a $15 bill in 2015 and has a majority of Senate Democrats now.

The Sanders policies are tangible and substantive (if misbegotten). Compare the period of Republican ferment when the party was out of power under Obama.

The Tea Party, for better or worse, didn’t have big, signature policy initiatives. It wanted to eliminate earmarks, a relatively trifling matter. It opposed amnesty, although the Republican base always had this position. It hated the debt, which led to some serious proposals for entitlement reform but also much posturing to little effect.

Tea Party candidates usually defined themselves by their tactical maximalism and their style, especially a contemptuous attitude toward the establishment. This is why it slid so easily into Trumpism.

In contrast, it’s difficult to how to see how serious Democratic candidates for president are going to avoid endorsing Bernie’s ideas.

This will be good for Bernie’s project, but his own future is cloudy. If he runs again, he will get more scrutiny as a plausible contender rather than a guerrilla candidate. He won’t have Clinton as a foil, but numerous contenders who want to ape his substance as younger, less quirky, more polished candidates.

Significantly, Sanders is a laggard when it comes to identity politics, which is becoming even more important to Democrats in reaction to Trump. A 76-year-old male from the whitest state in the union, who has devoted his life to a rigorously class-based politics, can do his best to play along but will never be a natural.

The voters, in the Democratic primaries and the next presidential election, will obviously have a say, and they can upset expectations.

A few years ago, Rand Paul was having a moment in the Republican Party before the influence of libertarianism was obliterated in the GOP by the rise of Trumpism. Paul Ryan developed a thorough, coherent approach to the debt that seemed to define the future of Republican policy, before Trump blew right through that, too. Few would have guessed it at the time, but events were about to make Pat Buchanan and Jeff Sessions look like the GOP prophets. Who knows how it shakes out for Bernie Sanders two or three years from now? What we do know is that he’s out of the wilderness

sábado, 4 de agosto de 2018

Majority of Americans approve of Trump's handling of the economy for the first time: CNBC survey

Trump’s economic approval rating surged 6 points to 51 percent, according to the latest CNBC All-America Economic Survey.
Fifty-four percent say the economy is good or excellent, the highest recorded by CNBC in the 10 years of the survey.
The recent headlines on immigration have not hurt his ratings, according to the survey.


For the first time since President Donald Trump took office, the CNBC All-America Economic Survey shows more than half the public approving his handling of the economy, and it appears to be having some impact on his overall job approval rating.

The president’s economic approval rating surged 6 points to 51 percent with just 36 percent of the public disapproving, a 6 point drop from the March Survey.

His overall approving rating rose 2 points to 41 percent from the first quarter survey, but the percentage of Americans who disapprove dropped 10 points to 47 percent, the lowest recorded by CNBC during his presidency. Trump’s approval rating remains negative, at minus 6, but it’s also the lowest negative rating recorded since he took office.

The survey suggests that the recent controversy over the president’s decision to separate children from their parents at the border has had little effect either way.

The poll of 800 adults nationwide, with a margin of error of plus or minus 3.5 percentage points, was conducted June 16 thru 19 while the controversy over the separation of children from their parents dominated the news. But any impact on the president’s approval rating is difficult to find in the data. A comparison of the polling conducted Saturday and Sunday with Monday and Tuesday, when the story was more prominent, shows little difference despite considerable public outrage.

“People are so locked in to their partisan views that it’s really hard to move those approval numbers,’’ said Micah Roberts with Public Opinion Strategies, the Republican pollster for CNBC. “The most consistent thing about his presidency is how much people who love him, love him and how much the people who hate him, hate him.”

The poll does show that a 51 percent majority of Americans disagree with the president’s immigration policies, but the level is unchanged from last quarter and last year. It is the worst issue for the president among the issues polled by CNBC.

The rise in the president’s economic approval comes with growth running about a percentage point higher than it did during the Obama presidency, with unemployment near a 20-year low and amid what is believed to be a very strong quarter for growth. That has translated into positive views by the public on the economy that are reaching new records for the survey.

Highest recorded

Fifty-four percent of Americans say the economy is good or excellent, the highest recorded by CNBC in the 10 years of the survey. Just 43 percent say the economy is fair or poor, the lowest in the history of the survey. Positive views on the economy have surged 20 points since the election. And for the first time, the percentage of Americans saying the economy is excellent outstrips the percent saying it is poor. Americans look for a strong 4 percent gain in their home values in the next year, equaling the highest percentage previously recorded in 2007.

The president’s economic approval numbers come with some support from Democrats, said Jay Campbell with Hart Research Associates, the Democratic pollster for the survey. “There is component of Democratic base that’s willing to acknowledge the improving economy and willing to give Trump a certain amount of credit for it,’’ Campbell said. “A large number still disapprove of Trump on the economy but 30 percent of Democrats is not nothing.”

However, there remains a 10-point gap among those who approve of Trump's handling of the economy and his overall approval rating. That gap exists even among conservative Republicans, who give the president a 96 percent approval rating on the economy but 85 percent overall. One of the biggest gaps is among nonwhites: 39 percent approve of his economic stewardship, but just 23 percent give his overall presidency a thumbs up.

On specific policies, the president’s biggest winners are tax cuts for individuals and businesses and renegotiating trade deals. His biggest losers: immigration, repealing Obamacare and reducing regulations on banks. A strong 58 percent majority also support his negotiations with North Korea. A plurality of 45 percent approve of Trump’s imposition of tariff’s, with 38 percent disapproving.

What's it mean for midterms?

One problem for the president: Just 34 percent of Americans say they have seen an increase in their take-home pay because of the tax cuts, roughly the same as when the question was asked in March. And just a quarter of the public give Trump direct credit for the improvement in the economy. Still, that far outpaces congressional Republicans at just 3 percent and former President Barack Obama at 6 percent.

“That result is pretty terrible for Republicans,’’ said Roberts. “Things are trending up for President Trump on the economy but it’s not necessarily translating into things trending up for Republicans.”

Asked whether controlling Congress would make the country better off, Republicans had a slight edge of 34 percent to 32 percent over Democrats, but 34 percent said neither or don’t know.

On the stock market, 42 percent said now is a good time to invest in stocks, 4 points below last year’s average when stocks surged but still above the long-run average. Roughly a third were unsure, which is the highest yet recorded, and 27 percent said it’s a bad time to invest.

The increase in gas prices, now averaging $2.85 a gallon, according to AAA, has had only a modest impact on driving habits with only 28 percent saying they are driving less now. But in 2007, when CNBC last asked the question, 55 percent said they were driving less with a national prices average of $3.10 a gallon.

viernes, 3 de agosto de 2018

When writing about survey data, 51% might not mean a ‘majority’

Rubén Weinsteiner
Mark Twain once said that “the difference between the almost right word and the right word is really a large matter – ’tis the difference between the lightning-bug and the lightning.” That advice is especially apt when writing about survey data.

For many people, “majority” is a word so common that they rarely have to think twice about what it means. But it’s a different matter for polling organizations like Pew Research Center. By their nature, polls provide an estimate of what a large group of people say, since they’re based on a sample rather than the entire population. This basic reality can create challenges for writers who want to summarize poll findings in a precise way.

Each headline includes the word “majority.” But take a moment to consider the wide variation in the survey data that’s actually being cited in each of the stories above. In the first article, a “majority of Canadians” refers to 72%. In the second story, “a majority of travelers” refers to 64%. And in the third article, a “majority of Americans” refers to 51%. These differences are substantial.

In order to present survey findings in an accurate and impartial manner in its reports, Pew Research Center has developed internal guidelines for using certain terms consistently. At the Center, writers cannot label a survey finding a “majority” unless it meets specific criteria.

One of these criteria is the survey’s margin of error. Since surveys only question a sample of a larger population that is being studied – whether that population is a single city, an entire country or something else – the margin of error describes the estimated range within which we would expect the exact answer to fall. (The results we would have gotten if we had surveyed everyone in that larger population is the “true population value.”) For example, if a survey has a margin of error of plus or minus 3 percentage points at the 95% confidence level, that means we can expect the result to be within 3 percentage points of the true population value 95 out of 100 times.

Let’s say our hypothetical survey asks a yes or no question about whether the economy should be the top concern of the country’s political leaders. If 51% of all respondents say “yes,” we would estimate the true population value to fall between 48% and 54%. As such, 51% in this survey would not necessarily translate to a “majority” of Americans. But if 54% say “yes” – again keeping in mind the 3-point margin of error – then we would estimate the true population value to fall between 51% and 57%. Therefore, it would be a fair characterization by our standards to say that a response of 54% or higher is a “majority” share of the population. (The Center’s writing guidelines note, however, that caution is always warranted when you’re close to the threshold.)

It is important to remember that there are several sources of uncertainty in survey estimates, some of which can’t be quantified. For instance, question wording can introduce error or bias into the findings of opinion polls. Another potential source of error is nonresponse bias – that is, when the people who respond to surveys differ in important ways from the people who don’t respond.

Although the Center’s writers can’t quantify all of the uncertainties when summarizing survey data, they seek to acknowledge them. Or, put another away, precise writing requires an accurate description of imprecision.