How Trump's moves against EV subsidies play into Tesla's hands. Why R&D spending does not raise productivity & Kazakhstan’s Golden Man.
Great links, images and reading from Chartbook Newsletter by Adam Tooze
Thank you for opening your Chartbook email.
İhsan Oturmak, “Uyku” 2017. Source: Kolecta
Noise about plans to revoke the EV tax credit is hurting renewable energy stocks in the US.
Eliminating the EV subsidy is a huge win for Tesla, since it kills it rivals.
Donald Trump’s criticism of electric vehicles looks likely to lead to the end of government subsidies for consumers who buy them, boosting Elon Musk’s Tesla by hitting its rivals with greater losses. The president-elect has said EVs would spell “complete obliteration” for the US car industry, even as adoption for the vehicles has climbed in other parts of the world, particularly China. Trump said in July when he accepted the Republican nomination that he would “end the electric vehicle ‘mandate’ on day one”, referencing proposed emissions rules that President Joe Biden’s administration had eased four months earlier. While Tesla is making money from its EVs, rivals’ losses on them have been narrowed by consumer tax credits worth up to $7,500 under Biden’s Inflation Reduction Act. “A Trump presidency would be an overall negative for the EV industry,” said Wedbush analyst Dan Ives. “However, for Tesla, we see this as a huge positive.” … “Take away the subsidies,” Musk posted in July on X, the social media site that he owns. “It will only help Tesla.” Trump’s election could also lead to swifter regulatory approval for autonomous driving technology, helping Tesla and other groups developing self-driving cars.
Source: Financial Times
Meanwhile, the Trump-surge into crypto continues
Why higher R&D spending is not translating into more rapid productivity growth in the US
In the 1980s, total US R&D investment represented 2.2 percent of GDP. Today, that figure is 3.4 percent, according to the National Science Foundation (see Chart 1). Private R&D spending by businesses more than doubled, to 2.5 percent of GDP from 1.1 percent.
Based on conventional economic models, that kind of increase in R&D spending should have led to accelerated economic growth rather than the slowdown that actually occurred. Productivity growth between 1960 and 1985 averaged 1.3 percent. Over the subsequent three and a half decades, gains in productivity fell below that average, except for a brief uptick in the early 2000s, and annual growth has generally been declining. … Over the past two decades, there has been a notable reallocation of innovative resources toward large, established companies, Goldschlag and Akcigiti documented in 2022. At the beginning of this century, roughly 48 percent of American inventors worked for these big incumbent companies—those that are more than 20 years old and employ more than 1,000 workers. By 2015, that figure had surged to 58 percent, marking a significant shift in where the nation’s innovative talent is concentrated. …. The evidence suggests that while the US is investing more in R&D, the concentration of resources among large businesses has led to diminishing returns in terms of productivity growth.
Source: IMF Finance & Development
HEY READERS,
THANK YOU for opening the Chartbook email. I hope it brightens your weekend.
I enjoy putting out the newsletter, but tbh what keeps this flow going is the generosity of those readers who clicked the subscription button.
If you are a regular reader of long-form Chartbook and Chartbook Top Links, or just enthusiastic about the project, why not think about joining that group? Chip in the equivalent of one cup of coffee per month and help to keep this flow of excellent content coming.
If you are persuaded to click, please consider the annual subscription of $50. It is both better value for you and a much better deal for me, as it involves only one credit card charge. Why feed the payments companies if we don’t have to!
And when you sign up, there are no more irritating “paywalls”
Baby Bust
For contributing subscribers only.
Ihsan Oturmak, Untitled, 2020
Source: John Burn-Murdoch in Financial Times
Source: Visual Capitalist
Kazakhstan’s Golden Man
Just 50 km east of Almaty, Kazakhstan’s largest city, lies a Saka burial mound dating back to the Iron Age. Unearthed in 1969, the site held the country’s most significant archaeological find—the Golden Man. Clad in a suit of gold with a tall, pointed headdress resembling a crown, the ancient warrior was buried with over 4,000 gold artifacts, a short sword and dagger, and a silver bowl inscribed with the oldest known example of runic writing in Asia. The artistry and craftsmanship of the artifacts—mostly animal motifs—are highly sophisticated, shedding light on a little-known civilization light-years ahead of its time. After Kazakhstan’s independence, the Golden Man became a national icon. The warrior’s armor takes pride of place in the national museum in Astana and tours the world, representing the country’s rich cultural heritage and deep roots in central Asia, and is depicted on various state symbols and emblems. Elements of this ancient culture are also featured in the design of the country’s new banknote series issued in December 2023, which is “dedicated to the Saka culture, emphasizing their connection with nature,” according to the National Bank of Kazakhstan. The Saka were an ancient tribe of nomadic warriors, later known as the Scythians. From about 900 to 200 BC they dominated the Eurasian steppe—a historically important travel and trade route that preceded the Silk Road. But they were largely unknown until the 18th century, when widespread looting of the burial mounds led to the discovery of hundreds of artifacts. Dozens of archaeological sites have been uncovered since, but the Issyk kurgan, excavated in the 1960s, was the first of only two burial mounds found completely intact. The front of the recently released 5,000 tenge banknote features a tree of life branch with a hovering bird from the Golden Man’s headgear, symbolizing the connection to nature. A golden eagle–shaped artifact—recovered from the Taldy 2 burial ground in the Karaganda region—represents freedom and strength, according to the bank, and the country’s strong ancestral ties to raptors, widely used for hunting. On the back is a DNA spiral, which symbolizes the “infinite passage of time.” As the late Shirin Akiner, a renowned scholar of Central Asian studies, noted in a documentary, there is still much to discover: “It does throw light on a period that really is dark—not because nothing is happening but because we simply don’t know enough about it.”
Source: ANALISA R. BALA in IMF Finance & Development
Ihsan Oturmak, “Illegal Excavation” 2022, oil on canvas. Source: MutualArt
If you have scrolled this far, you know you want to click: