一、Why is housing so unaffordable in America?
1Things seem to be hotting up again in the American housing market, where prices of skyrocketed and interest rates have gone up, that makes it much more difficult people to afford housing. The last time housing was this unaffordable was in 2007, immediately before house prices collapsed.
2To understand why things might be different now than they were in 2008, you have to understand the supply and demand dynamics. 1st in 2007. In 2008, demand was in part being fueled by extremely lax lending standards. People were being given enormous mortgages even if they had low credit schools or not much proof of income. Today, demand is being driven in large part by millennials, of which there are many aging into their prime home buying years. That structural demand still has a long way to run.
3The 2nd is supply. In 2008, those lax lending standards had helped kick off a massive boom in home buildings. Now things are very different. There really haven't been enough houses built in America over the last 15 years. At the same time, most Americans tend to take out 30-year fixed rate mortgages, which means that if they wanted to sell and move out, they have to swap a very low interest rate mortgage for a much, much higher one.
4They are in effect trapped in their existing homes. Both of those dynamics mean that there isn't that much apply available. In many ways, it might be good news that there isn't going to be a housing crash like there was in 2008. But on the other hand, affordability in so many developed countries is already so stretched. But that feels like a crisis of a different nature.
二、World in a dish：To everything there is a season Saving foods, however quotidian, for particular times and places is a joy
1WHAT IS NIRVANA for a potato? To be sliced and slivered and bathed in boiling oil before emerging as a French fry? To have its weight matched in butter and cream and be transformed into glorious mounds of mash? No. The answer is found in a plastic bag. For a potato, there is no nobler fate than to end up in a packet of Tayto cheese-and-onion crisps.
2Taytos are the consummate crisps (potato chips to Americans). The company was established in Ireland in 1954 by Joe “Spud” Murphy. He was not the inventor of crisps, but he has been credited with transforming them. Until then there was no way to flavour the individual crisps themselves; instead, each bag came with a small blue packet of salt to be sprinkled and shaken over the contents.
3The invention after the second world war of the gas chromatograph dispensed with that DIY process. It allowed food scientists to understand the chemical compounds behind flavours such as cheese. That in turn led to the development of artificial flavours, an advance on which Murphy seized to great effect.
4He started with cheese and onion. The pairing is a classic: think of the strings of Gruyère emerging from a bowl of French onion soup, or a dish of Käsespätzle, German dumplings that are mixed with cheese and topped with caramelised onions. And the flavour combines well with spuds. Potatoes, wrote Seamus Heaney, one of Ireland’s greatest poets, promise the “taste of ground and root”. The less poetic might describe them as a bit bland. sprinkled with the salty, savory umami of Murphy’s seasoning, however, they became a cut-price sensation.
5Taytos remain the quintessential Irish crisp, but now they are available elsewhere (as, of course, are many other brands of flavoured crisps). That is a mixed blessing. Once upon a time even industrially produced foods had a limited range. To travel was to discover not only the cooking in other places, but the snacks. Going to France was a chance to chug a bulbous bottle of Orangina, a fizzy drink. For Europeans, a trip to America—or a visit from Americans—was an opportunity to stock up on Reese’s Peanut butter Cups. Thanks to a globalised food system and the appetites of homesick migrants, such items are now available far beyond their lands of origin.
6That shift entails the loss of a modest joy. At first glance a bag of Taytos is the antithesis of a seasonal or local food, characteristics that today are prized. Encased in their silvery plastic, they survive in all seasons and locales. And yet, for your columnist at least, these potato snacks are entangled with their Irish roots.
7For her, Taytos are a once-a-year treat, to be eaten on a beach in south-west Ireland shivering after an icy swim or sweating at the top of a mountain. That is not out of necessity. They can be bought in London, her home city, or ordered on the internet, albeit at a mark-up. The ingenious seasoning should taste no different in a London Park than in Murphy’s homeland. But somehow it does.
三、Georgia: Slim pickings The peach State has no peach crop this year
1ON A MONDAY in March Robert Dickey went to bed feeling sick to his stomach. After a few tropical weeks the temperature was dropping, and when it got numbingly cold, he knew that his thousand acres of blooming peach trees would be icy by morning.
2This year 90% of Georgia’s peach crop was destroyed by the freeze—an unusually balmy winter meant trees blossomed early, only for spring frosts to kill the flowers. The trio of orchards in middle Georgia, that grow 95% of the state’s peaches, typically ship more than 150m peaches to grocery stores. This summer trees are bare and no commercial trucks are being packed. The last time the farmers lost an entire crop was in 1955.
3Though the peach is a fussy plant to begin with—a characteristic that awards successful growers prestige in husbandry circles—climate change is giving farmers conniptions. In order to bear fruit, peach trees need 600 to 1,000 “chill hours” a year, when temperatures drop below 45°F (7°C). But winter averages have been climbing in Georgia and since 2016 crisp nights have become rare.
4 Horticulturists are experimenting with spraying early buds with insulating goo to shield them from spring freezes and farmers are planting varieties that require less cold. Switching to pecans and strawberries (both far less temperamental crops) and chopping down timber helps growers get by.
5You might expect such a devastating harvest to bode badly for Georgia’s economy. In fact, the peach State has a perplexingly small market for stone fruit. cotton, peanuts, and corn each bring in far more revenue. (Peaches generated $34m in 2022; cotton $1.4bn.) Nor is Georgia the main domestic supplier of peaches. Last year California dominated the market and South Carolina took second place. Why, then, does the fruit loom so large in the state’s identity?
6Before the Civil War peaches grew wild on plantations and roadsides. On the eve of Reconstruction, with slavery scrapped and the Southern economy in shambles, businessmen were looking to rebrand themselves to attract Northern investment. cotton-growing stank of the Confederacy, but peaches were sweet. Soon Georgians took to growing them. Since spring came earlier down South, farmers could get fruit to the New York market before others, and buyers paid a premium for that. Yankee investors got hooked on the yellow, meaty Elberta variety, newly bred in Georgia, and by the 1920s refrigerated railcars hauled fruit north. Newspapers declared that “queen peach” had “dethroned king cotton”
7As a cultural marketing ploy the peach was a hit, says Tom Okie, a historian at Kennesaw State University. By the 1950s images of the fuzzy fruit were on license plates, peach festivals drew crowds and men called women they fancied “Georgia peaches”. The fruit symbolized a progressive, sophisticated and economically open new South.
8The peach harvest was always unpredictable, but as demand grew it became harder to promise stock to merchants. Farmers in the milder California valley offered more consistency. Profits in the Southeast fell. According to farm records, in 1885 Georgia farmers sold peaches for $15 a bushel. Though that is nearly $500 in today’s dollars, farmers claim they now struggle to charge $15.
9Pam Knox, a climatologist at the University of Georgia, says that orchards should be fuller next summer, since an El Niño cool phase is headed to the Southeast. But farmers see every year as a gamble, with the odds getting a tad worse each play. The occasional bumper crop fuels addiction. “A year like this makes me want to double down,” says Lawton Pearson, a fifth-generation peach farmer who vows to never walk away. “That’s the drug, that next year will be better.”
四、Latin America’s mothers：All the single ladies, and their kids
Helping single mothers enter the formal workforce could boost productivity
1When vanessa, a 22-year-old, finished school her goal was to get a job and move out of the favelas of Rio de Janeiro. Those plans were derailed three years ago when she got pregnant. vanessa and her boyfriend broke up soon after and she found herself raising her daughter alone. She has found it tricky to get a full-time job without childcare. For now, she runs a beauty salon from her front room.
2In Latin America and the Caribbean stories like vanessa’s are common. Some 11% of households are led by a single parent, almost always a mother, according to estimates by the un. That is above the global average of 8% (see chart). Even in sub-Saharan Africa—which does worse on other indicators, such as poverty and access to contraception—single-parent households make up 10% of the total. On average almost a third of Latin American women can expect to have a baby before the age of 20.
3The preponderance of single mothers is a reflection of how Latin America is stuck in a developmental limbo. No country within the region falls within the World Bank’s definition of low-income. Female enrolment in secondary school is near 100%. Despite being home to a third of the world’s Roman Catholics, attitudes to sex can be liberal in parts of the region. Asked how justifiable it is to have sex before marriage, around a fifth of respondents in Argentina, Brazil and Chile say it is “always justifiable”, according to the World Values Survey, a poll. Just 5% of people say the same in Ethiopia and Nigeria.
4Even so, religious attitudes still shape access to contraception in parts of the region. Over 80% of women of reproductive age in Latin America live in countries where the Centre for reproductive Rights, an advocacy group, describes abortion laws as “restrictive”. In some countries sex education focuses on abstinence. Machismo does not help. Diana Rodríguez Franco, secretary for women’s affairs in the mayor’s office in Bogotá, the capital of Colombia, describes a common pattern there: “A woman has a child, she is abandoned by the father, she has another child with another man, she is abandoned again.”
5The latest data from the World Bank suggest 78% of single mothers in Latin America and the Caribbean are in the workforce, either working or actively looking for work, above the average of 73% for all adults. Yet the unemployment rate among single mothers, at 9.2%, is higher than for any other group, including single childless women and single fathers. Even when they do find jobs, lone mothers earn far less than other adults. Often the only work that offers the flexibility required to juggle childcare is in the informal sector.
6This has wider effects on the economy. The un reckons that because women’s labour-force participation rate is lower, the gender gap will drag GDP per person down 14% in Latin America and the Caribbean between 2020 and 2050. According to the World Bank’s Human Capital Index, which measures expected productivity based on health and education, a girl born today in Brazil will accumulate more human capital by the age of 18 than a boy. Girls are more likely to finish school and less likely to get involved in gangs. But assuming nothing much changes in Brazilian society, this girl will not put that talent to use. Accounting for current labour-force participation rates, a woman in the labour market will probably put a third of her talent to use, while a man would utilise two-fifths.
7Governments are trying to address the problem. Argentina, Colombia, and Mexico have decriminalised abortion in recent years. Cash-transfer programmes target poor women. During the pandemic Brazil’s government offered single mothers double benefits. In Bogotá the mayor’s office has built 18 manzanas del cuidado, or “care blocks”, where women can get free vocational training, sexual-health services and help applying for government support.
8More could be done. In many countries the law obliges fathers to pay child support. But enforcement is weak, says Laura Cuesta at Rutgers University in New Jersey. The share of single-mother households receiving child support ranges from 15% in Guatemala to 50% in Chile. Franco Parisi, who ran in Chile’s presidential election in 2021, did not campaign in the country. One local difficulty was a judicial order against him for 207m pesos ($260,000) in child support owed to his ex-wife. (His lawyer denied the allegations, but Mr Parisi later reached an out-of-court settlement.) Even so, Mr Parisi still won 13% of the vote.
9Single mothers have to lean on their family for support, instead. Fully 43% of Peruvian mothers live with at least one other adult who is not their spouse or partner. Until governments and fathers start to provide support, abuelas (grandmothers) will have to fill the gap.
五、Executive pain：Nothing to whinge about. Is London suffering because bosses there are paid too little?
1Britain’s bosses are in a funk. Last year, one-tenth of the CEOs running FTSE 350 companies stood down, more than double the tally for 2021. The number of listed companies in London has fallen by two-fifths since 2008. Some of the country’s most treasured companies, such as Arm, a chip designer, are defecting to Wall Street.
2Many factors lie behind the malaise. Could relatively paltry pay for those in charge be a big one? At first glance, yes. America’s top earners are vastly better rewarded than those in Britain. Take the extraordinary case of Laxman Narasimhan, who used to run Reckitt Benckiser, a London-listed consumer-goods giant. In that job, in 2021, he got by (somehow or other) while earning £4.7m ($6.5m), excluding his bonus. When he decamped last year to become the CEO of Starbucks he accepted a package, over $28m, that more than quadrupled his compensation.
3That pay gap was not exceptional. Average rewards are far higher over the Atlantic. Chiefs of S&P 500 companies enjoy compensation typically more generous than Mr. Narasimhan’s: combine salary, bonus, stock awards and other perks and the median package is worth about $33m (£26m). That’s double the going rate of £13m for those running FTSE 100 firms, according to Refinitiv, a data provider. Julia Hoggett, who runs the London Stock Exchange, suggests that means the City scrimps on pay. And if companies won’t dole out top pound, she argues, they harm London’s ability to attract global talent.
4The trouble with Ms. Hoggett’s argument, however, is that the City brings in more foreign executives than are attracted to other stock exchanges. Around 45% of Britain’s largest businesses have a boss from overseas, whereas fewer than 10% of those in America are foreign, only 14% in France and 25% in Germany. As for those, like Mr. Narasimhan, who leave for big payouts, such cases are vanishingly rare. Of the FTSE 100 CEOs who stood down since the start of 2022, the vast majority either retired or moved to another job in Britain.
5It is likelier that American firms are overpaying, and perhaps needlessly. Evidence is patchy linking higher pay for CEOs with better company performance. As You Sow, a shareholder advocacy group which produces an annual ranking of overpaid S&P 500 bosses, says the most overcompensated are also those who underperform the index. Alexander Pepper, a professor of management at the London School of Economics, sees something similar in Britain. He notes how pay for FTSE 100 bosses accelerated in the 1990s but that had little bearing on the success or otherwise of firms. Too much, evidently, is out of the control of the boss.
6America looks more like an outlier, therefore, not a standard-setter. Few markets could anyway hope to keep pace with the large sums on offer on Wall Street, where companies are usually larger, harder to run and more at risk from lawsuits than in Britain. A better comparison, then, is with Europe. Brits do tend to out-earn their continental counterparts: in 2021, average CEO pay at the biggest companies in France reached the equivalent of $9.5m and in Germany $6.7m. Given that gap, institutional investors in British stocks are reluctant to fatten compensation packages more. A survey by the London Business School suggests that over three-quarters of shareholders see corporate pay as already too high.
7Investors will probably keep a lid on pay rises. Both Pearson and Unilever have suffered shareholder revolts over remuneration plans this year. And unlike in America, British law requires that shareholders approve pay packages: dissenting votes are thus more common. As British households come under ever more economic strain, any signs of excess by company bosses will also grow harder, politically, to justify. Expect more rebellions, not fewer.
六、Work and savoir-faire：From debutantes to directors
Europe’s last finishing school targets a new market
1The three-martini lunch may be over, but the business dinner is here to stay—and it is a prospect that fills some executives with horror. For those who find the multiple rows of cutlery and wine glasses baffling, or who keep forgetting which side-plate is theirs, help is on hand to decode the hidden rules of etiquette. On the hills overlooking Lake Geneva, a company offers executives an extra layer of social polish to boost their confidence—and, perhaps, their career.
2Established in 1954, the Institut Villa Pierrefeu, perched above Montreux, is the last finishing school in Europe. Its courses, which range from one to six weeks, cover everything from seating precedence and tea-service protocol to black-belt-level etiquette challenges such as eating a banana with a knife and fork. Historically, most of its students were young women preparing for the marriage market. Today, as social codes relax and demand for such an education wanes, Villa Pierrefeu is exploring a new pool of clients: business executives. Viviane Néri, the Institut’s principal, says it is no longer a finishing school but a “starting school”.
3A five-day course in the “European art of dining” (which costs around SFr5,000, or $5,570) features modules on menu planning, English-style table setting and French-style table manners. The students carefully taking notes on wine pairing and cutlery arrangement work in fields such as technology, corporate law and banking. Some are there to master a foreign culture. Ahmed Aftab Naqvi, the head of an advertising network in India, says that a spell at Villa Pierrefeu has helped him to “understand the diversity of cultures, customs, traditions and etiquette”. Others hope that their refined manners will command respect from colleagues. “I wanted to be elevated,” says one employee of a tech giant based in California.
4Some lessons have not changed in years. Students are instructed that, once a meal is over, they can place their linen napkin on the right (French style) or the left (English style). But in other ways the school has had to adapt. Ms. Néri has changed courses to suit professionals, scrapping the old nine-month diploma and offering classes all year-round which clients can attend on their annual leave. Schools which failed to adapt have had to close, or take on less glamorous roles. Le Manoir, a former finishing school in Lausanne, these days serves as the international headquarters of Tetra Pak.
七、AI and productivity：Not so fast
Some firms are adopting the latest AI technology, but its broad diffusion across the economy will take time
1The 2010s brought no shortage of miraculous technologies, from tablet computers and 4G mobile internet to new forms of artificial intelligence (AI)—Hey, Siri! But these had surprisingly little effect on the economy. During that decade productivity growth in the rich world averaged a measly 1% a year, holding down average wages. Innovative firms embraced new tech, but many less adventurous ones did not bother, and saw few efficiency gains as a result. The experience showed that technological wizardry and improvements in average living standards do not always go hand in hand.
2Generative AI, its boosters say, will be different. Not since the invention of the internet has a new technology so captured the public imagination. The technology is consumer-friendly: within days of its release to the public, ChatGPT, the most famous AI chatbot, had millions of users. It is easy to see how this innovation could improve all types of work at all types of firms, from increasing the accuracy of doctors’ diagnoses to helping programmers write software code more efficiently.
3Some companies are already incorporating AI into their operations. Tech firms are investing heavily in the technology, advertising for many thousands of roles. So are some bricks-and-mortar companies. A drug discovered and designed by AI is progressing through human trials in China. Analysts at UBS reckon that Domino’s Pizza can use AI to “improve the accuracy of order-delivery-time estimates”. Investors are rewarding the early adopters. Since the start of the year, the median share price of the most AI-enthusiastic firms in the S&P 500 has risen by 11%. For those moving more slowly, it has not changed at all.