20180608-NATIXIS-The_age_of_scapegoats_9页_1mb

Flash Economics Summary

Core Content

This document analyzes the populist reactions in several OECD countries and argues that these reactions are often based on misattributed causes of economic and social issues. It emphasizes that the real problems are internal to each country and not due to external factors such as unfair competition from China or the European Union. The summary outlines the specific issues in each country and the real underlying causes.

Main Points

• Populist reactions in OECD countries are responses to economic and living condition deterioration, but they often target scapegoats rather than the real issues.
• The real causes vary by country and are not related to external trade competition or EU rules.

United States: The Role of Income Distribution

• The stagnation of purchasing power and loss of factory jobs are attributed to income distribution distortion and industrial obsolescence, not to unfair competition from China or the EU.
• Table 1 shows that real household incomes have diverged significantly across quintiles, with the lowest quintile growing much slower than the highest.
• Chart 3A and Chart 3B illustrate the distortion in income distribution and the decline of industrial capacity, which are internal to the US economy.

United Kingdom: The Role of the Decline in Social Welfare

• Inequality and poverty are due to weak social welfare spending, not to EU membership.
• Table 2 and Table 3 show the Gini index and poverty rates, indicating a long-standing issue of social welfare inadequacy.
• Chart 4 highlights the low level of social welfare spending compared to other OECD countries.

Italy: The Role of Underinvestment

• The slow growth and high unemployment are attributed to low corporate investment and stagnation in productivity, not to EU constraints.
• Chart 6A and Chart 6B show the low potential growth and productivity stagnation in Italy.
• Chart 6C illustrates the decline in productive investment, which is a domestic issue.

France: The Role of Labour Force Skills

• High income inequality is due to low employment rates, especially among low-skilled workers, not to the "rich getting richer".
• Table 4 and Chart 8A show the Gini index and employment rates, indicating a skills gap.
• Chart 9A and Chart 9B compare OECD countries' PIAAC scores, showing France's lower skills levels.
• Table 5 provides PIAAC survey scores, highlighting France's lower performance compared to other OECD countries.

Key Information

• Populist politicians often blame external factors for domestic economic issues, which is not supported by data.
• Income distribution, social welfare, corporate investment, and labour skills are the real underlying issues in the respective countries.
• The Gini index and employment data are used to support these arguments.
• Chart comparisons help illustrate the internal nature of each country's economic problems.

Conclusion

• Populism tends to create scapegoats and divert attention from the real causes of economic and social issues.
• The real causes are domestic and include income inequality, weak social welfare, underinvestment, and low labour skills.

Disclaimer

• The document is intended for professionals and qualified investors only.
• It is strictly confidential and not a personalized investment recommendation.
• No liability is accepted for the accuracy or completeness of the information.
• All views are personal and may differ from those of Natixis.
• The document and its contents are based on public information and not an official confirmation of any transaction.