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POPSCapitalism in Crisis
An interesting column by Richard Posner on the background of and some lessons from the financial crisis. In short: 1) Capitalism is risky and is prone to bubbles and depressions (take home message is not that capitalism is 'bad' but that one must diversify and hedge); 2) The crisis is a consequence of deregulation (not that deregulation is 'bad' but that deregulated capitalism carries with it more of the bubble/depression risks). But in the end, as with so many, Posner concludes that the whole mess should be laid at the feet of government. This is not the right conclusion, not that government is not the responsible party, they are. But the key issue that underlies the government's failure is not that government is inherently 'bad' as many are often led to conclude but that it was made that way. A systematic attack and undermining of governance has occurred in the U.S. since the early 1980s. Not all was bad, likely much of it early on was needed, but like so many other human expe
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POPSChina: Stimulus Appears To Kick In. China had a massive (relative to economic size) stimulus that is _investing_ in the country's infrastructure. Obama's stimulus, also beginning to show signs of helping the economy, has been hampered by old guard thinking that promotes destructive and vicious partisanship and thinks that the only solution to any economic problem is more tax cuts. Will this be seen as the moment where backward thinking and vicious partisan politics in the U.S. hampered our response and opened the door to Chinese supremacy in Asia? Let's hope not.
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POPSJapan's exports halved in January We are all cringing in fear - now is the time to open our arms. There is building, latent demand. Real, needed demand for goods and services. But everyone is waiting, fearful of making a move. The worst is behinds us, there is more bad news for sure, and it will seem downright frightening at some points, but the worst is behind us. Let us hope that our period of muddeling through will be short.
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POPSOkun's Law For my part, I tend to lean away from the Keynesian view that sees recessions as times of inadequate “aggregate demand.” Rather, recessions are essentially times when there is a mismatch between the mix of goods and services demanded by individuals in the economy, and the mix of goods and services that was previously supplied. The clear area of mismatch here is in housing, as well as various sectors of the economy that have made a business of irresponsibly increasing the debt burden of the nation (including mortgage companies, investment banks, and other purveyors of leverage). Those mismatched sectors are experiencing enormous losses, as they should. The job of economic policy is to ease that transition in a way that reduces the spillover onto the broader economy.
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POPSFree Market? Where are the defenders of the "free market "crying foul over government interference?
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POPSSustainable Economy: Five Policy Recommendations -- To serve the purposes of ending poverty and conserving the biosphere (sustainable development) we must first rescue the idea of purpose itself from the nether world of illusion and epiphenomena to which it has been banished by mechanist philosophers and neodarwinist biologists. If purpose is not causative in the real world then all policy is nonsense, and all theory on which policy is based is useless. This last quote is quite important and its conceptualization fundamental in the creation of a new non-Newtonian philosophy of systems dynamics and irreductionism. But the author doe not sell me on point number 4.
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POPS Desakota A new term to describe the new urbanization as seen in Asia (largely China).
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POPSWhy America Will Survive George W. Bush Otto von Bismarck saw how American blunders led to American power and allegedly said that God has a special providence for drunks, fools, and the United States of America. Walter Russell Mead (of the Council on Foreign Relations) puts Bush's 8-year stint in the White House into proper perspective. America's foreign policy has been short-sighted and often self-defeating from the get-go, alternately collaborative, passive, and interventionist. And, yet, miraculously, we always come out ahead. With the unstoppable rise of a global capitalist economy, Mead makes the case that America, for all its past and current faults, will continue to be the inevitable leader of this new international buoyancy. Not even our latest mistakes (unprecedented though they may be) can derail such a powerful incentive that is the modern American world trade system. Which means, more than ever, we're literally all in this together.
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POPSYouTube: The Great FireWall Strikes Again A modern nation and modern economy cannot function without some minimum of open information. A modern economy and innovation is reliant upon the consistency of services. On both counts China fails. Will China's political institutions modernize in step with their economy? Or will the CPC be so fearful of change that they would rather squelch future growth and modernization. I guess with present growth at about 11% they've chosen the second option. My bets are that they will not be able to maintain growth and a closed society at the same time for much longer.
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POPSGreenspan: Clinton Good, Bush Bad "House Speaker Hastert and House majority leader Tom DeLay seemed readily inclined to loosen the federal purse strings any time it might help add a few more seats to the Republican majority,"
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POPSBernanke: Mortgage Defaults Won't Hurt Economy Is there a disconnect in Washington? We've taken big hits before without major impact on the economy. But conventional wisdom has said that the economic growth of the past five or so years has been fed by housing inflation. Where will the next phase of growth come from? Maybe exports as the dollar sinks. Unless of course high interest rates makes the dollar attractive. Dismal science indeed.
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POPSDollar Crisis? How will the enormous indebtedness of not only the U.S. government (Thanks Bush) but the American people start to be addressed? People do not change their habits/addictions with ease. Sadly, it is usually through some crisis that people come to terms with reality, then they get down to business. May we have a real president when/if the crisis hits.
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