Nighttime Must-Read: Martin Wolf: Chronic Economic and Political Ills Defy Easy Cure

…First, deficient demand…. While demand is strengthening in the US and UK, as one might hope after years of aggressive monetary policies, the eurozone remains in a dangerously depressed condition. Meanwhile, Japan has still to escape its deflation trap. Second, stagnant productivity…. Third, fragile finance… in some respects even more fragile than it was before the crisis… the lack of transparency of balance sheets remains daunting….

Fourth, unstable politics. Deteriorating economic performance and rising inequality are generating substantial political stresses…. Fifth, tense geopolitics. Ours is an era of rapid changes in relative economic power, with the rise of China… and the relative decline of Europe and the US. China is assertive; Russia is irredentist; the west is cautious…. Sixth, challenge overload. These stressed political systems confront large domestic and international challenges… the supply of global public goods, which includes preserving the open world economy, peace and the global commons…. Managing climate change is the hardest. Yet 2014 was the hottest year on record.

These conditions are chronic, not critical…. They can, however, be managed…