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Wednesday, March 31, 2010

China’s Growing Wealth Gap |

Also interesting is the chart which compares the population of provinces to countries. Shandong has more people than Germany.

China’s Growing Wealth Gap |

Harsh Criticism of the Fed

Alford: Time to Stop Giving the Fed a Free Pass � naked capitalism

Rules of economics?

Sometimes incentives do not matter. I would like to see a study done on this innovative pilot program and why it did not succeed. Incentives improved behavior to some extent but not outcome.

“You always hope that you’ll come across a magic silver bullet, and you never do,” he said. “If there were simple solutions, somebody would have found them a long time ago. And you make progress incrementally, particularly if you’re trying to focus on some of society’s biggest problems.”

New York to End Program to Give Cash to the Poor - NYTimes.com

Monday, March 29, 2010

Causes of the Crisis


Many continue to get this wrong, but Ritholtz nails it. Deregulation of derivatives was one cause of the downfall of AIG, Lehman and Bear. It allowed them to do poor underwriting without scrutiny.

The Big Picture � Blog Archive � Misunderstanding the Last Financial Crisis

Saturday, March 27, 2010

Afghanistan Atrocities

We have shot an amazing number of people, but to my knowledge, none has ever proven to be a threat,” said Gen. Stanley A. McChrystal,

Real trade numbers

Trade figures do not include value added flows:

the real U.S.-China trade deficit would be as much as 30% lower than last year's gap of at $226.8 billion, according to a number of economists.

At the same time, the U.S. trade deficit with Japan would have been 25% higher than the $44.8 billion reported last year, because many goods that China and others export to the U.S. contain parts purchased in Japan.


Some Say Trade Numbers Don't Deliver the Goods - WSJ.com

Sunday, March 21, 2010

The importance of having a soul mate

Talk Deeply, Be Happy? - Well Blog - NYTimes.com

Cognitive dissonance at WSJ

Amazing that the editors let this title slip by. This is why the Republicans are worried. This bill will not be repealed. 

Consumers Would Benefit Soon After Health-Care Bill's Enactment - WSJ.com
She listened to Obama's speech, starting from minute 7.

An Obama classic.
"We are not bound to Win, we are bound to be true"

Highlights at 7, 17 and 27 minutes.

Saturday, March 20, 2010

The Threat to Muddle Through

The Japanese yen was 350/$ in 1971. It is now 90. That is a 75% devaluation and Japan still runs a trade surplus with the United States. The yuan rate is not even the most important reason why China has a surplus with the US.

The Big Picture � Blog Archive � The Threat to Muddle Through

Happiness Research

Bok writes about happiness and government policy: treat unemployment, chronic pain and depression. Forget about everything else.

What can policymakers learn from happiness research? : The New Yorker

"The Misinformed Tea Party Movement"

Misinformed is an understatement.

Economist's View: "The Misinformed Tea Party Movement"

Thursday, March 18, 2010

Norm Ornstein Embarasses The GOP On Its Hypocrisy | Capital Gains and Games

Is there no shame?

Norm Ornstein Embarasses The GOP On Its Hypocrisy | Capital Gains and Games

Endowment Reports

Harvard Endowment Report 2009

Yale Endowment 2009

And comparison of asset allocation targets.

RMB

Great discussion of the RMB.
Revaluation of the RMB is not negative for China but will be a reallocation of wealth from government and manufacturers to households. Not clear it will help the US trade deficit as manufacturing will shift to other low cost producers.


How will an RMB revaluation affect China, the US, and the world?

Scott Sumner:
Five countries in Asia Singapore, Taiwan Korea Hong Kong and Japan combined have a ca surplus as big as China. They are richer. why are we not bashing them?

You cannot fix the problem if you cannot agree on the cause.

The crisis was a housing bubble caused by poor underwriting and exacerbated by securitization and  derivatives to hide risk from investors and regulators.
It does not seem that complicated.

Monday, March 15, 2010

Why are these headlines?

This is what countries are supposed to do. They fight for national interests. That is why U.S. uses trade rules to its advantage.

China Uses Global Trade Rules to Its Advantage - NYTimes.com

Thursday, March 04, 2010

Pandit Testimony

Congressional Oversight Committee testimony

And the video

"Appearance and Reality in Public Life"

It appears that we are in the nightmare scenario:

The nightmare scenario for democracy:
  • Elected officials have no sincere adherence to the public good; they pursue their own private and political interests through all the powers available to them. (Senator Jim Bunning's unembarrassed willingness to block extension of unemployment legislation for narrow personal and political reasons falls in this category.)
  • Elected officials are sometimes overtly corruptible, accepting significant gifts in exchange for official performance.
  • Elected officials are intimidated by the power of private interests (corporations) to fund electoral opposition to their re-election. (The Supreme Court decision on corporate free speech makes this much more likely.)
  • Regulatory agencies are dominated by the industries they regulate; independent commissioners are forced out of office; and regulations are toothless when it comes to environmental protection, wilderness protection, health and safety in the workplace, and food safety.
  • Lobbyists for special interests and corporations have almost unrestricted access to legislators and regulators, and are generally able to achieve their goals.

Economist's View: "Appearance and Reality in Public Life"

Adam Smith and Laisez faire

Adam Smith was for regulation.

Economist's View: Adam Smith and the Role of Government

Gun-non Control

"The only thing worse than a yuppie upset with how their frappuccino turned out is a yuppie with a gun who's unhappy with how their frappuccino turned out,'"


Starbucks, Other Retailers Dragged Into Gun-Control Dispute - WSJ.com: