Latest news with #AdrianWooldridge
Gulf Today
03-08-2025
- Business
- Gulf Today
Britain is in the midst of one long, hot, nervous summer
Adrian Wooldridge, Tribune News Service There is an ominous sense in the air in Britain — a sense that the country is headed toward the rocks and that the captain has no idea how to steer the ship. This feeling is vague — hardly the stuff of graphs or numbers — but vague feelings can sometimes tell us more about the future than the hardest economic statistics. The two biggest rocks on the horizon are labeled debt crisis and civil unrest. Blood-curdling warnings from the right are par for the course. Andrew Neil warns in the Daily Mail that 'broke Britain is on the edge of financial disaster ... I'm scared for what's to come.' But equally dire warnings are coming from the left — and even from the very heart of government. Gary Smith, the general secretary of the GMB union, notes that 'our finances are precarious ... this could unravel very quickly.' Deputy Prime Minister Angela Rayner has told her boss that Britain could face a repeat of last year's summer riots unless 'the government shows it can address people's concerns.' Seven in 10 Britons think that it's likely the country will experience race riots in the future, according to a poll for The Economist. Why are the British in such a state of angst? And, more importantly, are they right to be so worried? The country's economic problems stem from a combination of rising debt and dismal growth. The Office for Budget Responsibility recently warned of Britain's 'relatively vulnerable' position, with the sixth-highest debt among 36 advanced economies, the fifth-highest deficit and the third-highest borrowing costs. The government recorded the second-highest June borrowing figure since records began in 1993 (and that was only exceeded by June 2020 when COVID was raging). Bond markets have traditionally given a lot of leeway to Britain because of its reputation for seriousness. They also give leeway to governments that have a large majority and a clear plan for dealing with their debt. But Starmer's Labour looks more like a divided minority government on its last legs than a one-year-old government with a huge majority. It failed to pass a modest package of welfare reforms that would raise £1.5 billion ($2 billion) from means-testing winter fuel payments and £5 billion from cutting health and disability benefits, when public spending stands at £1.3 trillion a year. The government's promise that it will grow its way out of its fiscal hole has evaporated, with Chancellor of the Exchequer Rachel Reeves instead digging deeper by increasing taxes on labor and driving away wealthy people (particularly non-doms) who pay a disproportionate share of taxes. The last fortnight has seen a couple of tense street protests — in Epping and Canary Wharf. In both cases, locals protested the government's decision to take over local hotels and fill them with young male asylum seekers, chanting 'send them home' and 'save our kids.' The protests quickly gained national resonance: Organized agitators from both the left and the right came in from across the country, and the internet lit up with furious posts. We have no equivalent of the OBR to give a balanced assessment of the state of the country's social fabric, but a bipartisan report by Sajid Javid, a former Conservative home secretary, and John Cruddas, a Labour grandee, published by the think tank British Future, makes for sobering reading: The authors warn that Britain is sitting on a 'powder keg' of social tensions that could easily ignite again. The social bonds that have traditionally held society together have been fraying for decades, they say, but the tensions have been significantly increased by rapid immigration and poor assimilation. Trust in politicians is at an all-time low with 45% of people in the 2024 British Social Attitudes Survey saying they 'almost never' trust governments of any party to put the needs of the nation above the interests of their own political party, up by 22 percentage points from 2020. I think it is still more likely than not that Britain will muddle through without either a debt crisis or a major series of riots, let alone a civil war, as one academic, David Betz, a professor of war studies at King's College, London, has predicted. Reeves has the option of breaking her electoral promise and raising general taxation. The government is, finally, giving the impression that it is taking the small boats crisis seriously by targeting the international gangs that profit from people smuggling and cracking down on the food delivery services that profit from illegal labor. What we are probably in for instead is prolonged pain rather than sudden crisis. But a major shock cannot be ruled out. The most serious worry is that the barriers that protect us from either a debt contagion or a social conflagration have been eroded. Britain's credit with the global markets is not what it was since the Liz Truss fiasco. And many people's trust in the establishment has been weakened by that establishment's failure to control the pace of immigration or manage the social consequences.
Mint
13-07-2025
- Mint
Rags to Riches from Rome to the China Seas
The hot Roman summer sun can ignite daydreams and, a few weeks ago, while visiting a friend at an art gallery on the Via Giulia, I walked by the nearly half-a-millennium old Palazzo Sacchetti and pondered the fate of the families who owned it, lost it, sold off parts of it and passed into history. My colleague Adrian Wooldridge has written columns about contemporary European and Italian dynasties and their effective stewardship of family businesses. But my thoughts were all about the romance of declines and falls — and what lessons there might be for today. The musings took me from Rome across 6,000 miles to the south China coast and a little beyond. I've never been to Zhangli village in Fujian province, just outside the city of Quanzhou, which the Venetian merchant Marco Polo described as one of the world's greatest ports in the 13th century. I'm not taking you that far back in time, just to the middle of the 19th and the construction of a set of 23 red brick mansions, arranged along five rows and spread across 16,300 square meters became lords of a commercial empire of their own, encompassing a sprawling bazaar in Manila as well as farming, forestry and construction interests. Also known as Chua Chengco, my great-great-grandfather was dubbed 'Mariano Velasco' by the colonial administrators who hoped the 'honor' would tie him — and his money — even more closely to the regime. Because there was a local Spaniard with the same name, he was referred to as Mariano Velasco el Chino. Still, it kind of worked: To this day, around the world, there are scores of Velascos of Chinese descent very proud of their Spanish apellido. I like to think of Spain as one of my 'old countries' — along with China and the Philippines. The money, however, has long dissipated. The Zhangli village property — built with repatriated wealth and exotic material from the family's plantations in the Philippines — needs both conservation and renovation. The provincial government would like to turn it an open-air museum. But that requires financing, and there really isn't a paterfamilias among the existing Velascos to take charge of the legacy. In fact, tracking what became of the Velasco wealth is a genealogical headache. In terms of business, there is a department store that can claim some descent from the old bazaar. The physical house that Velasco built in Manila may actually have been larger than the Zhangli complex, but it has vanished. With his two wives, Don Mariano had nine sons; and inherited assets diminished as they were divided among succeeding generations. Add in the depredations of the Spanish flu pandemic, the Great Depression, the Pacific war that left Manila a charred wreck… Sic transit gloria mundi. The Velascos are a chapter in the long sojourn of the Chinese in Southeast Asia, escaping poverty and chaos in the Middle Kingdom to win prosperity and influence in a new world. The historical experience involves questions of assimilation and integration as I've noted in a previous column. Some of the lessons are rags-to-riches sagas familiar to every culture. For example: A huge fortune will be hostage to many heirs, even if a clearly documented will exists. When the Indonesian industrialist Eka Tjipta Widjaja — born Huang Yicong in Quanzhou, China — passed away in 2019, some of his children sought control of the corporations he founded in addition to what had been left to them from his estimated $9.3 billion fortune. Sometimes, the feuds break out even before the dynastic founder is gone, as evidenced by the father-son battle in Singapore's Kwek family. It remains to be seen whether this age of 'high net worth family offices' — an industry that's growing dramatically among rich ethnic Chinese families — can discipline the human drive to bag the biggest inheritance. Most Chinese migrants learned that life in a new country was better with new names. Most didn't wait — as I assume Mariano Velasco did — until the authorities realized their worth and rewarded them with a culturally integrated moniker. They just took what they thought would help them with their prospects and careers, just as F. Scott Fitzgerald had James Gatz transform into Jay Gatsby in his famous novel about social climbing. They chose names that looked less foreign, that sounded more like the languages of their adopted lands. Hence, Huang became Widjaja in Indonesia. In the Philippines, the businessman Carlos Palanca — whose surname now graces the country's most prestigious literary award — was originally Chen Liulai . In the late 19th century, the Fujian-born migrant cadged the name of a Spanish diplomat who'd been briefly assigned to Manila a couple of decades before and wasn't around to contest the steal. Palanca's wealth was founded on a distillery that also had a distinctly Iberian name, La Tondeña . They also learned to avoid politics — there's a long history of xenophobic riots and massacre against foreign-born merchants who order locals around or who are perceived as a threat to the prevailing status quo. Indeed, the political dynamics of contemporary Malaysia are based on racial tensions among the native Malay and the descendants of Chinese and Tamil migrants. That didn't mean that rich Chinese families didn't support politicians. Often, they supported all the major parties simultaneously, spreading their bets to cover all eventualities. They preferred to be kingmakers rather than kings. And so, many ethnic Chinese clans look askance at the billionaire and former prime minister Thaksin Shinawatra as he and his clan are rocked back and forth by political controversy stirred up as they try to dominate Thailand. In Singapore, while the political legacy of founding prime minister Lee Kuan Yew is nowhere as turbulent , the family honor was still stained by an unseemly squabble among his heirs over a house he left them. That's spilled over into politics, with the ambitions of Lee Hsien Yang — who says he has won political asylum in the UK — now aimed at his older brother and former prime minister Lee Hsien Loong. Aiyah, as they say in Singapore. In the Philippines, ethnic Chinese still shy away from personal involvement in politics. Being too closely tied — even as a financier — to politicians is risky. The plutocrat Lucio Tan was an influential player in the administration of Philippine President Joseph Estrada, but that didn't save the billionaire from scrutiny after Estrada was ousted in a civilian coup in January 2001. Still, many descendants of Chinese migrants in the Philippines do engage in politics. For the most part, that's because they're members of the Chinese mestizo class — which, from generation to generation and every intermarriage, is less and less Chinese. The most successful example is the sprawling Cojuangco family, a clan founded by an immigrant from Fujian who made his fortune in sugar. The family's most famous politicians were Corazon Cojuangco Aquino and her son Benigno Aquino III, both of whom held the office of president. I have politicians in my family now. I'm particularly proud of my first cousin Josefina 'Joy' Belmonte, who is in her third term as mayor of Quezon City, a constituency of nearly 3 million people. Our grandmother — our mothers' mother — was the Velasco. For the Chinese, mestisaje is a poignant survival mechanism: preserving one's genes but slowly forgetting the ways of one's ancestors. I hope to one day visit Zhangli village and see what's left of the estate of Mariano Velasco. I wonder if my thoughts will then turn to Rome and the the Palazzo Sacchetti. There are echoes. It was designed by its first owner, a man named Antonio Cordiani. He'd grown up poor in Florence and moved to the city of the popes to apprentice with his uncles. Eventually he took their surname — Sangallo, which is still what Romans call the street by the Tiber next to the palazzo. The house didn't stay in his family for long. The building still stands. But the people who lived in it and their riches have faded away. It's almost Chinese. More From Bloomberg Opinion: The name-changes did not prevent calumnies. There is one theory that Don Mariano was the basis for the greedy and manipulative Chinese merchant Quiroga in El Filibusterismo, a novel by Jose Rizal, the Philippines' national hero. News reports of the anti-Chinese pogroms in California and the western US states as I noted in this column reinforced the anxieties of Chinese in Southeast Asia. This column reflects the personal views of the author and does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners. Howard Chua-Eoan is a columnist for Bloomberg Opinion covering culture and business. He previously served as Bloomberg Opinion's international editor and is a former news director at Time magazine.
Bloomberg
11-07-2025
- Politics
- Bloomberg
The Medieval Mindset Behind Modern Politics
World leaders are using language from the Middle Ages that reflects a dark shift in global politics, explains Bloomberg Opinion columnist Adrian Wooldridge. (Source: Bloomberg)
Time of India
29-06-2025
- Business
- Time of India
Is the Trump 2.0 agenda deliberately aimed at companies' bottom line?
Live Events (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel Corporate America's profits are slipping. Last week, the Bureau of Economic Analysis confirmed that corporate post-tax profits dropped in the first quarter by 3.3% — by far their biggest fall since the companies make less money, it's often a harbinger of an economic slowdown. In this case, it also raises the more profound question of whether the Trump 2.0 agenda is deliberately aimed at companies' bottom sounds outlandish. The S&P 500 just hit an all-time high, so Corporate USA is worth more than ever. But it makes sense. After-tax profits account for an unprecedented 10.7% of gross domestic product, when in the last 50 years of the 20th century, they never exceeded 8%. The only time approaching their current share of the economy was in 1929 on the eve of the Great Crash. If the nation is to deal with inequality, money must be redistributed from somewhere; corporate profits are an obvious source of in the Trump coalition have long held an anti-corporate agenda. A few months ago, Adrian Wooldridge argued in this space that MAGA wanted to 'end capitalism as we know it.' Specifically, he contended that many leaders in the Trump coalition wanted to 'deconstruct the great workhorse of American capitalism: the publicly owned and professionally managed corporation.'These are strong words, but sound understated compared to the writings of Kevin Roberts, head of the Heritage Foundation and a lead creator of Project 2025, an ambitious and radical agenda for Trump 2.0. He argues that BlackRock, the world's largest fund manager and a pillar of contemporary US capitalism, is 'decadent and rootless' and should be burned to the ground — a fate it should share with the Boy Scouts of America and the Chinese Communist Marjorie Taylor Greene, an outspoken Trump supporter in Congress, 'the way corporations have conducted themselves, I've always called it corporate communism.' She has urged government investigations of companies that stopped donations to Republicans after the Jan. 6, 2021, attack on Bannon, Trump's campaign chief in 2016, complained to Semafor that only $500 billion of the US government's $4.5 trillion came from corporate taxes. 'Since 2008, $200 billion has gone into stock repurchases. If that had gone into plants and equipment, think what that would have done for the country.'He advocated a 'dramatic increase' in taxes on corporations and the wealthy. 'For getting our guys' taxes cut, we've got to cut spending, which they're gonna resist. Where does the tax revenue come from? Corporations and the wealthy.'Several current policies are not explicitly anti-corporate, but more or less guaranteed to have that Lerner, head of the HOLT analytical service at UBS , points out that in data going back to 1870, the correlation between tariffs and companies' earnings yield (a measure of their core profitability) has been consistent. Tariffs hurt companies. Looking at the cash flow return on investment since 1950, it has risen (meaning companies grew more profitable) directly in line with rises in imports as a proportion of done jointly by Societe Generale Cross-Asset and Bernstein demonstrates that globalization has benefited US companies not only through international sales (40% of revenues for S&P 500 companies) but also through lower costs. In 2001, when China joined the World Trade Organization , the S&P's cost of goods sold accounted for 70% of the revenues generated by selling them. It had been around this level for many years. That has now dropped to 63% — a massive improvement of 7 percentage points in this basic margin. Technology, consumer and industrial firms have gained the most — and stand to lose the most from 2.0 policies so far have redistributed from shareholders to workers. Vincent Deluard, macro strategist at StoneX Financial, points out that the only tax not cut by the One Big Beautiful Bill currently before Congress is corporate income tax. 'The grand bargain of the Big Beautiful Bill is to compensate for the tariffs' inflationary shock with personal income tax cuts,' he says. 'If exchange-rate adjustments, foreigners, and consumers do not pay for tariffs, corporate profits will.'Beyond that, eliminating illegal immigration and restricting foreign students raises labor costs. Threats to tax foreign investments in section 899 of the bill — which now appear likely to be withdrawn — risked reducing capital inflows and make it harder to raise own behavior has contributed to these trends. Over history, their share of GDP has tended to oscillate with the economy, rising when labor organizations' negotiating power is weak. But in this century, their profits grew less susceptible to the economic cycle, surging higher after the Edwards, a macro strategist for SocGen, argues that they pushed through margin-expanding price increases 'under the cover of two key events, namely 1) supply constraints in the aftermath of the Covid pandemic, and 2) commodity cost-push pressures after Russia's invasion of Ukraine.'Margins matter more in an environment where people are conscious of the damage inflation can do to their standard of living. That gave rise to the concept of 'greedflation' — which Edwards thinks is deserved. Politicians have increasingly felt emboldened to intervene in companies' pricing decisions, something that's been off-limits since Richard Nixon's ill-fated price controls in the early 1970s. Kamala Harris proposed 'anti-gouging' policies in her unsuccessful presidential campaign; more recently, Trump forced a climbdown by companies like Amazon that proposed to itemize the impact of tariffs on the prices they to the top of a company never used to be a ladder to mega-wealth. That was reserved for entrepreneurs who founded their own firms. Modern executive pay has changed that and allowed CEOs to become billionaires by meeting unchallenging targets for their share price. The gulf between their pay and workers' wages shrieks of injustice; according to the Economic Policy Institute, the CEO-to-worker compensation ratio reached 399-1 in 2021; in 1965, it was only 20-1. From 2019 to 2021, CEO pay rose 30.3% while those workers who kept their jobs through the pandemic got a raise of 3.9%.This can easily be dismissed as the politics of envy, but executive compensation now arguably skews the entire economy. Andrew Smithers, a veteran London-based fund manager and economist, and nobody's idea of a leftist, has long inveighed against the bonus culture, which he holds responsible for a disastrous misallocation of argued that America's problem was 'two decades of underinvestment':The major cause has been a change in the way company managements are paid. The 1990s saw the arrival of the bonus culture, which massively shifted management incentives and thus changed management behavior. Sadly, the change did immense damage to the economy. Managements were encouraged to invest less and, with lower investment, growth argues that companies increased their investment in response to corporate tax cuts in earlier generations, but stopped doing this once executives were paid to prioritize their share price. That led them to cut back on investment, spending money on acquisitions and share buybacks. That dampened growth, but also ensured better returns in the short run for investing in stocks is still primarily a game for those who are already wealthy, this stoked inequality still further. Opposition to high executive pay is often couched as a populist class-warrior position, but there is far more to it than Trump coalition always had anti-corporate elements, but this didn't stop his first administration from delivering for the private sector in a big way. In 2024, Trump added the support of Silicon Valley, and took the oath of office for the second time in front of a serried rank of billionaires. But he's also losing old corporate Koch, the industrialist hated by Democrats as the architect of libertarian Republican policies, has lost patience. After funding Nikki Haley's run against Trump in last year's Republican primaries, he told the Cato Institute earlier this year that too many institutions had lost their libertarian principles, and 'people have forgotten that when principles are lost, so are freedoms.' How will people like Koch respond if the administration clamps down on companies?America's key political developments tend to happen within parties, not between them. The current Republican coalition is no stranger in concept than Lyndon Johnson's Democratic Party of the 1960s, the New Deal coalition that combined multi-racial liberals from the North and West with pro-segregationist whites from the South. Once Johnson decided to choose one wing over the other, with his civil rights acts, that alliance now, the MAGA coalition includes both America's largest corporations and their most trenchant critics. The policy choices of the next few months, and their effects, will determine whether that can continue.
Bloomberg
06-06-2025
- Politics
- Bloomberg
The Wrong Kind of Muscular Leadership
Poland's new president Karol Nawrocki is the latest political leader obsessed with muscle. But it will inevitably make Poland weaker, says Bloomberg Opinion's Adrian Wooldridge. (Source: Bloomberg)
