Not Japan related directly, unless you consider the damage done to the Japanese (and world's) economy a direct result of the 2008 financial crisis*, but PBS has a short segment on the role of US ratings agencies---Moody's etc---in the crisis. They also discuss the responsibility of the US government, both political parties, and Wall Street. Lesson learned until the next bubble.
*Probably a good thing to consider.
Showing posts with label financial crisis. Show all posts
Showing posts with label financial crisis. Show all posts
Friday, November 19, 2010
Monday, November 01, 2010
Japan as Number One again
Since the sub-prime crisis began in 2008, we've seen story after story on the supposed lessons Japan holds for the US.
Most of these seem to be of use to those who want to push their own political/economic agenda at home using Japan as evidence to support their opinions. On his NYT blog recently, Paul Krugman used Japan as an example of why Friedman's monetarism does not work. However he has not, to my knowledge, used Japan's experience with Keynesian stimulus to claim that Keynesian economics do not work except to say that not enough was done and what was done was not soon enough---just as he says is the problem in the US.*
R.Taggert Murphy has posted a short piece on Japan Focus, Japan as Number One in the Global Economic Crisis: Lessons for the World?, which looks at Japan from another perspective. My short, overly simplistic summary of his piece is that Japan may have been the first country to experience the "New Normal."
*Krugman's blog, his NYT column, and perhaps his ABC This Week appearances are where he pushes partisan political opinion and probably should not be regarded in the same light as his economic work.
Most of these seem to be of use to those who want to push their own political/economic agenda at home using Japan as evidence to support their opinions. On his NYT blog recently, Paul Krugman used Japan as an example of why Friedman's monetarism does not work. However he has not, to my knowledge, used Japan's experience with Keynesian stimulus to claim that Keynesian economics do not work except to say that not enough was done and what was done was not soon enough---just as he says is the problem in the US.*
R.Taggert Murphy has posted a short piece on Japan Focus, Japan as Number One in the Global Economic Crisis: Lessons for the World?, which looks at Japan from another perspective. My short, overly simplistic summary of his piece is that Japan may have been the first country to experience the "New Normal."
*Krugman's blog, his NYT column, and perhaps his ABC This Week appearances are where he pushes partisan political opinion and probably should not be regarded in the same light as his economic work.
Saturday, October 30, 2010
Lookin' for trouble and finding it.
Most folks around these parts go out of their way to avoid trouble, such as some idiot hanging around in back alleys in the rain taking pictures.Others do not hesitate to look for it. For them, the NYT and Martin Fackler have published the second in the series on Japan (or is it the US?) and the "Great Deflation." Today, the never before discussed well-worn theoretical possibility of the US turning into Japan is explored in a nice quick way that answers no questions: U.S. Hears Echo of Japan's Woes. Could there be a better way to spend a rainy Saturday afternoon in Tokyo?
I guess we should just be thankful that Japan is even mentioned in a major US newspaper.
31 Oct: edited to correct spelling as neither blogger spell check nor I can spell.
Friday, September 10, 2010
Nobel Paul in Japan
Krugman flew in a few days ago and has been blogging on his NYT blog about Japan. A day or so ago, he wrote that the biggest single reason for the decline in Japan's GDP is the aging of working-age population. He now has a NYT op-ed Things Could Be Worse.*
Like their Japanese counterparts, American policy makers initially responded to a burst bubble and a financial crisis with half-measures.
I recall some pretty aggressive action by the US back in the last quarter or so of 2008. What's the "Like their Japanese counterparts" stuff?
So I find myself almost envying the Japanese. Yes, their performance has been disappointing. But things could have been worse. And the case Democrats now need to make — the case the president finally began to make in Cleveland this week — is that if Republicans regain power, things will indeed be worse.
Always happy to read Krugman as I know I am getting the unbiased opinion of an economist, not a politician.
(The comment section of this op-ed---now closed---is full of entertaining and informative comments. I was pleasantly surprised to learn that Japan, in contrast to the US, has a very good unemployment insurance system. Where does that kind of horse manure come from? [added later] A few challenged Krugman's assertions about Japan very well, I thought.)
*Yes, for example there could be 40,000 suicides per year---many related to economic problems----instead of 30,000. "Things could be worse." Noble Laureate.
Like their Japanese counterparts, American policy makers initially responded to a burst bubble and a financial crisis with half-measures.
I recall some pretty aggressive action by the US back in the last quarter or so of 2008. What's the "Like their Japanese counterparts" stuff?
So I find myself almost envying the Japanese. Yes, their performance has been disappointing. But things could have been worse. And the case Democrats now need to make — the case the president finally began to make in Cleveland this week — is that if Republicans regain power, things will indeed be worse.
Always happy to read Krugman as I know I am getting the unbiased opinion of an economist, not a politician.
(The comment section of this op-ed---now closed---is full of entertaining and informative comments. I was pleasantly surprised to learn that Japan, in contrast to the US, has a very good unemployment insurance system. Where does that kind of horse manure come from? [added later] A few challenged Krugman's assertions about Japan very well, I thought.)
*Yes, for example there could be 40,000 suicides per year---many related to economic problems----instead of 30,000. "Things could be worse." Noble Laureate.
Friday, August 20, 2010
WSJ, Reason, and Nobel Paul dissed
The notion that the U.S. recession will turn us into Japan emerged immediately after the September 2008 bankruptcy of Lehman Brothers, and has proved to be one stubborn meme. You might think that the actual growth of the U.S. economy over the last four quarters would dampen the Japan talk, but you would be wrong*....
...These days, how you use the Japan argument is really a proxy for what you believe about fiscal stimulus... Slate Moneybox
Oh thank you James Ledbetter. Of course his article will prove futile...
Disappoints me about Reason, though, as I used to read that magazine back in my Ayn Rand days. WSJ too, but their position is knee-jerk predictable.
*The link to Seeking Alpha is from the original article.
Dissed must be passe now that I have used it.
...These days, how you use the Japan argument is really a proxy for what you believe about fiscal stimulus... Slate Moneybox
Oh thank you James Ledbetter. Of course his article will prove futile...
Disappoints me about Reason, though, as I used to read that magazine back in my Ayn Rand days. WSJ too, but their position is knee-jerk predictable.
*The link to Seeking Alpha is from the original article.
Dissed must be passe now that I have used it.
Saturday, May 22, 2010
More like us
Wasn't that the title of a book by James Fallows written about twenty years ago concerning how the US should focus on its own strengths to compete with Japan rather then trying to emulate Japan?
Well, James wrote in vain, if Paul Krugman is correct with the latest piece in the US-is-gonna-get-the-Japan-disease genre: Lost Decade Looming:
Despite a chorus of voices claiming otherwise, we aren’t Greece. We are, however, looking more and more like Japan...
...I strongly suspect that some officials at the Fed see the Japan parallels all too clearly and wish they could do more to support the economy... NYT
I suppose if you generalize enough, and are vague enough, you can make any country's economic problems look like those of Japan. Why not when you have to write a column regularly and wanna say the same thing over-and-over, but in a different way? The "Japan disease" stuff is getting a bit out-of-date now. You'd figure a Nobel Prize winner could do better.
I like Paul, but I also can't stand him. That's what happens when you work as a supposedly unbiased economist, and then consistently take polemic partisan views. Which do we believe is the real Paul?
Well, James wrote in vain, if Paul Krugman is correct with the latest piece in the US-is-gonna-get-the-Japan-disease genre: Lost Decade Looming:
Despite a chorus of voices claiming otherwise, we aren’t Greece. We are, however, looking more and more like Japan...
...I strongly suspect that some officials at the Fed see the Japan parallels all too clearly and wish they could do more to support the economy... NYT
I suppose if you generalize enough, and are vague enough, you can make any country's economic problems look like those of Japan. Why not when you have to write a column regularly and wanna say the same thing over-and-over, but in a different way? The "Japan disease" stuff is getting a bit out-of-date now. You'd figure a Nobel Prize winner could do better.
I like Paul, but I also can't stand him. That's what happens when you work as a supposedly unbiased economist, and then consistently take polemic partisan views. Which do we believe is the real Paul?
Wednesday, February 17, 2010
Lots of idiots around...or is it just me?
Over the last few days there have been some stirrings about the DPJ possibly, maybe, perhaps opening discussion on raising the consumption tax. Of course PM Hatoyama countered Nutty Natto Kan with his version of "Read my lips, no consumption tax increase. We are just going to start talking about it during a recession to boost the economy. We'll let the voters decide although I am not going to increase it anyway maybe for sure."
I'm cool with this. Only a bunch of lunatics would try to run a country forever with promises of no new taxes except on the other guy, while spending the money of future generations for everything except filling in potholes in roads and in society because for one reason or another, deficits don't matter. But this is not about the USA.
Really, the DPJ has been trying its best to right the economy they inherited from the LDP. One of the things that impressed me is how the wasteful practice of moving large quantities of earth from one spot to another for no useful purpose seems to have decreased under the new government. I have no stats, but that's just an impression from my somewhat less frequent cycling workouts along the Tamagawa. Mud-moving projects have noticeably decreased in size if not quantity since the autumn.
Perhaps, however, the money was shifted elsewhere. Every day, on the walk from my Mansion to Denenchofu station, I get to pass through the now 2 (or 3?) year old water line project which makes the street nearly impassible for humans and autos. As on construction projects everywhere, there seem to be about 5 people standing around and "supervising" for each person who is actually working. But what makes this a great economic stimulus is that not only do we get to pay the salaries of folks who could be better utilized serving tea to those who are working, but we get to pay to have the street and sidewalk dug up every single morning and refilled and resurfaced (with asphalt) every single evening. Wonder how much time and money that costs? Did Yukio not notice this when he lived in Denenchofu just a few short months ago? But who am I---a taxpaying resident who should never be allowed to vote for fear upsetting the apple cart with dangerous foreign influence---to say anything about that. Let the neighbors grumble---which they are. (Hear anything Yukio?)
Speaking of EVIL foreign influence:
I'm cool with this. Only a bunch of lunatics would try to run a country forever with promises of no new taxes except on the other guy, while spending the money of future generations for everything except filling in potholes in roads and in society because for one reason or another, deficits don't matter. But this is not about the USA.
Really, the DPJ has been trying its best to right the economy they inherited from the LDP. One of the things that impressed me is how the wasteful practice of moving large quantities of earth from one spot to another for no useful purpose seems to have decreased under the new government. I have no stats, but that's just an impression from my somewhat less frequent cycling workouts along the Tamagawa. Mud-moving projects have noticeably decreased in size if not quantity since the autumn.
Perhaps, however, the money was shifted elsewhere. Every day, on the walk from my Mansion to Denenchofu station, I get to pass through the now 2 (or 3?) year old water line project which makes the street nearly impassible for humans and autos. As on construction projects everywhere, there seem to be about 5 people standing around and "supervising" for each person who is actually working. But what makes this a great economic stimulus is that not only do we get to pay the salaries of folks who could be better utilized serving tea to those who are working, but we get to pay to have the street and sidewalk dug up every single morning and refilled and resurfaced (with asphalt) every single evening. Wonder how much time and money that costs? Did Yukio not notice this when he lived in Denenchofu just a few short months ago? But who am I---a taxpaying resident who should never be allowed to vote for fear upsetting the apple cart with dangerous foreign influence---to say anything about that. Let the neighbors grumble---which they are. (Hear anything Yukio?)
Speaking of EVIL foreign influence:
Referring to the downgrading of the outlook for Japan's long-term government bonds by foreign rating companies, State Minister for Financial Affairs Shizuka Kamei said, "The Japanese are susceptible to foreign influences. There are lots of idiots." He thus indicated his dissatisfaction with the nature of credit ratings and the way people respond to them. Kamei is set to have regulatory power over credit rating companies starting in April. (From Feb 16 Asahi Shimbun. I cannot find a link as of yet.)
Now I don't really know what the hell this fellow was trying to say. He seemed to be angry that credit rating companies could rate Japanese bonds without asking. Maybe he was hinting at some future administrative guidance for those foreign companies. Why not? It's surely a lot easier than trying to un-screw-up the now decades old screwed-up economy. Besides, Japan owes most of its money to its own citizens, not foreigners, and it is easier to get away with screwing your own investors than it is screwing foreign investors. Or so the theory goes.
My question is: Does Kamei consider himself to be one of the idiots, or is he referring to the people whom he supposedly serves? (Let's pretend. We know that most folks in his line of work here do not consider themselves servants of the public, but more "nannies" of the childish masses. Tuche' to Fujiwara Masahiko.)
Incidentally, Kamei, a Shintaro Ishihara fan, "studied" economics at Tokyo University. Mr. Idiot also opposes foreigner suffrage* as allowing those bastards to vote could fuel nationalism. Who said that the LDP was dead?
A big arigatou in the direction of the Potomac for alerting me to this.
*We Western immigrants ought not be too hard on Kamei for this view, for he was apparently referring to those permanent residents of Korean heritage which makes it all OK.
22 Feb 2010 update: They have now begun to work directly on the road (instead of the sidewalk) and are no longer covering it with asphalt every evening. Time and money saved---what will they think of next?
Thursday, December 10, 2009
There isn't much to say to introduce this, except to note that R. Taggart Murphy has written another extremely interesting article for Japan Focus: In the Eye of the Storm: Updating the Economics of Global Turbulence, an Introduction to Robert Brenner's Update*---so interesting that I don't know where to begin. After seeing and living the results of the financial crisis and the resulting economic fallout for the last year, it seems obvious that there are much bigger, more serious problems facing the DPJ and Japan (and the US) than the current Futenma issue. And I'll bet the latest "stimulus" won't change that.
Murphy discusses and expands on Brenner's ideas especially as pertains to Japan, China, and the US.
Just a few excerpts from the article:
...Brenner fully grasps the significance to global capitalism of what has happened in East Asia since the appearance of the export-led, state-directed Japanese growth model...
...“the premature entry of high-competitive lower cost producers, especially in the newly developing regions of East Asia” would have led to serious crisis were it not for the ability of advanced capitalist governments to make available “titanic volumes of credit.”
...the continuation of capital accumulation has come literally to depend upon historic waves of speculation...
Japan had, from the mid 1950s on, deliberately staked its prosperity on the construction of excess global capacity in a series of key industries... ...Japan did not launch industries. Rather, it targeted markets that were already served by existing capacity... ...result was to destroy profitability...
He goes on to examine the current seemingly "bright spot" of China, and notes the country is heading toward the same "Mutual Assured Destruction" financial relationship that Japan and US have due to its up-to-now focus on an export-led economy and the reinvestment of profits into excess capacity and financing of US debt so that the US can continue purchasing those exports.
Now what was it that Obama has been running around the world saying about the world having to put an end to this sort of warped produce and loan/borrow and spend system?
*A link is also provided for Brenner's What's good for Goldman Sachs is Good for America: The Origins of the Current Crisis. At 73-pages, it is a bit long for reading on a computer, but is time better spent than reading about Tiger Woods' non-longer private affairs.
Murphy discusses and expands on Brenner's ideas especially as pertains to Japan, China, and the US.
Just a few excerpts from the article:
...Brenner fully grasps the significance to global capitalism of what has happened in East Asia since the appearance of the export-led, state-directed Japanese growth model...
...“the premature entry of high-competitive lower cost producers, especially in the newly developing regions of East Asia” would have led to serious crisis were it not for the ability of advanced capitalist governments to make available “titanic volumes of credit.”
...the continuation of capital accumulation has come literally to depend upon historic waves of speculation...
Japan had, from the mid 1950s on, deliberately staked its prosperity on the construction of excess global capacity in a series of key industries... ...Japan did not launch industries. Rather, it targeted markets that were already served by existing capacity... ...result was to destroy profitability...
He goes on to examine the current seemingly "bright spot" of China, and notes the country is heading toward the same "Mutual Assured Destruction" financial relationship that Japan and US have due to its up-to-now focus on an export-led economy and the reinvestment of profits into excess capacity and financing of US debt so that the US can continue purchasing those exports.
Now what was it that Obama has been running around the world saying about the world having to put an end to this sort of warped produce and loan/borrow and spend system?
*A link is also provided for Brenner's What's good for Goldman Sachs is Good for America: The Origins of the Current Crisis. At 73-pages, it is a bit long for reading on a computer, but is time better spent than reading about Tiger Woods' non-longer private affairs.
Tuesday, August 18, 2009
Back to "normal"
Last September, the "greatest financial crisis since the Great Depression" began. At the time, and for months afterward, I thought that the world---at least as it pertains to the US, Japan, and China---had changed forever. You could read about it everywhere which, of course, made it true. The over-consumption of US consumers would stop now and forever; not just until the economy recovered. And the US government? It would have to start paying its own way and stop borrowing from overseas. Taxes would have to be raised.
Japan, which has relied on an export-driven economy for decades would no longer be able to do so with the reduction in consumption in the US. Without the ability toexport unemployment rely on exports to the US, it would no longer be able to fund the US party.
I was so surprised (why?) by the developments of that fall and the early winter, that I actually started taking Paul Krugman seriously! (The Obama administration didn't. Points for Barack.) Fortunately, the crisis and the recession seem to be all but over now.
There have been a number of articles in the last 24 hours reporting that Japan may be* coming out of the recession and they point to...sigh...exports as driving the recovery. I guess that's no shock, what else would?
The expansion was in line with the 0.9 percent growth forecast that was the average of 10 economists surveyed last week. A 1.2 percent growth in public demand helped offset a 1.3 percent fall in demand from the private sector, the data showed. Overall domestic demand fell 0.7 percent from the previous quarter.
Recovery in these critical overseas markets whittled down inventories and released some pent-up demand, bolstering Japan’s exports of cars and electronics. Exports grew 6.3 percent from the previous quarter, while imports fell 5.1 percent. NYT
Strangely, for all of the monumental, historic changes that were said to be the likely result of the financial crisis, I can't find much about the US or Japan doing much to prepare for the new world. In the US, we can still have it both ways, government benefits and no tax increases except on some bad guys and the rest will be paid for with cuts in wasteful spending. In fact, they'll "pay for themselves." Bahahahahaha!
We've heard for at least 25 years that these sort of things can't go on forever, but then they do. Kind of makes economics seem like a social science heavily influenced or perhaps driven by political beliefs and a group of folks who---stealing a quote from here--- "think arithmetic is a substitute for reality." Oh wait...did I say seem like?
*A very iffy maybe.
Japan, which has relied on an export-driven economy for decades would no longer be able to do so with the reduction in consumption in the US. Without the ability to
I was so surprised (why?) by the developments of that fall and the early winter, that I actually started taking Paul Krugman seriously! (The Obama administration didn't. Points for Barack.) Fortunately, the crisis and the recession seem to be all but over now.
There have been a number of articles in the last 24 hours reporting that Japan may be* coming out of the recession and they point to...sigh...exports as driving the recovery. I guess that's no shock, what else would?
The expansion was in line with the 0.9 percent growth forecast that was the average of 10 economists surveyed last week. A 1.2 percent growth in public demand helped offset a 1.3 percent fall in demand from the private sector, the data showed. Overall domestic demand fell 0.7 percent from the previous quarter.
Recovery in these critical overseas markets whittled down inventories and released some pent-up demand, bolstering Japan’s exports of cars and electronics. Exports grew 6.3 percent from the previous quarter, while imports fell 5.1 percent. NYT
Strangely, for all of the monumental, historic changes that were said to be the likely result of the financial crisis, I can't find much about the US or Japan doing much to prepare for the new world. In the US, we can still have it both ways, government benefits and no tax increases except on some bad guys and the rest will be paid for with cuts in wasteful spending. In fact, they'll "pay for themselves." Bahahahahaha!
We've heard for at least 25 years that these sort of things can't go on forever, but then they do. Kind of makes economics seem like a social science heavily influenced or perhaps driven by political beliefs and a group of folks who---stealing a quote from here--- "think arithmetic is a substitute for reality." Oh wait...did I say seem like?
*A very iffy maybe.
Monday, June 22, 2009
Bubbles
Bubbles past is bit of a topic today, so perhaps this is a good time to link to a short article concerning the next possible bubble:
What happens when the most powerful nation in the world, with a reserve currency everyone trusts and holds, decides to push a big credit expansion — again, at the instigation of our financial sector?
...You borrowed from the Japanese at 1 percent and bought anything outside Japan that yielded a bit more (including United States subprime mortgages). The coming American carry trade is the same thing: it weakens the dollar, lifts the economy out of recession through exports, and creates inflation that reduces the real value of our debts. Economix, NYT
That'll work! Wouldn't want to be holding that debt though.
At the end of the article, the authors ask if we are laying the foundation for a much larger debt crisis. We are gonna find out...
What happens when the most powerful nation in the world, with a reserve currency everyone trusts and holds, decides to push a big credit expansion — again, at the instigation of our financial sector?
...You borrowed from the Japanese at 1 percent and bought anything outside Japan that yielded a bit more (including United States subprime mortgages). The coming American carry trade is the same thing: it weakens the dollar, lifts the economy out of recession through exports, and creates inflation that reduces the real value of our debts. Economix, NYT
That'll work! Wouldn't want to be holding that debt though.
At the end of the article, the authors ask if we are laying the foundation for a much larger debt crisis. We are gonna find out...
Wednesday, June 17, 2009
The party is over? Nah, just a toilet break...pass the beer
There's been a lot of great economic news over the last few days informing us that the worst recession since the Great Depression may be coming to an end. Actually, such a disastrous recession seems to have been little more than a slight blip. Things are said to be leveling out now, and naturally the only way to go is up.
Last September, as I watched the news over the weekend that the Lehman Brothers collapsed and Merrill Lynch was purchased by the BOA, I thought the world had changed for good. For one thing, I thought that the old idea that the US could live on the credit of foreign countries while those countries depended on over-consumption by US consumers would have to end. It seems I went a bit overboard as I don't see any evidence that any country involved is preparing for such a supposedly inevitable change.
PBS Frontline just ran a program about that September weekend and what went on behind the scenes in the deal for the Bank of America to buy Merrill Lynch. It reminds me of the story of JP Morgan in the 1907 Panic in which he locked a group of bankers in a room and would not let them out until they all agreed to sign an agreement to bail out Wall Street. This time, however, it was not a private banker doing the arm-twisting (or kneecap-breaking), but the US government in the person of Hank Paulson.
"If you don't get with the program and you don't sign this piece of paper, tomorrow morning you could turn on the television and see Hank Paulson talking about your bank in a negative way..."
and I'm beginning to get about enough of Paul Krugman again, who appears in the program just long enough to utter this brilliant insight:
"...[Paulson] doesn't strike me as the most reflective guy...but he must have been sitting there saying..."My god, we may be presiding over the second Great Depression..."
I can sure see why Mr. Krugman won a Noble Prize. Time to go back to the day job at the New York Times of blaming everything on earth on Little Bush. No, wait, Bush is gone. Maybe Sarah Palin.
At the end, we are assured that:
"This was one of the pivot points in American history. That old way of looking at things; that old way of puttin' on a party...It's over.
How can we tell? Other than the government running half the private sector now, and perhaps a few adjustments in financial regulations, what exactly has changed?
The program is one hour and a much better way to spend time than watching some goofy movie on WOWOW or a noisy variety show.
Last September, as I watched the news over the weekend that the Lehman Brothers collapsed and Merrill Lynch was purchased by the BOA, I thought the world had changed for good. For one thing, I thought that the old idea that the US could live on the credit of foreign countries while those countries depended on over-consumption by US consumers would have to end. It seems I went a bit overboard as I don't see any evidence that any country involved is preparing for such a supposedly inevitable change.
PBS Frontline just ran a program about that September weekend and what went on behind the scenes in the deal for the Bank of America to buy Merrill Lynch. It reminds me of the story of JP Morgan in the 1907 Panic in which he locked a group of bankers in a room and would not let them out until they all agreed to sign an agreement to bail out Wall Street. This time, however, it was not a private banker doing the arm-twisting (or kneecap-breaking), but the US government in the person of Hank Paulson.
"If you don't get with the program and you don't sign this piece of paper, tomorrow morning you could turn on the television and see Hank Paulson talking about your bank in a negative way..."
and I'm beginning to get about enough of Paul Krugman again, who appears in the program just long enough to utter this brilliant insight:
"...[Paulson] doesn't strike me as the most reflective guy...but he must have been sitting there saying..."My god, we may be presiding over the second Great Depression..."
I can sure see why Mr. Krugman won a Noble Prize. Time to go back to the day job at the New York Times of blaming everything on earth on Little Bush. No, wait, Bush is gone. Maybe Sarah Palin.
At the end, we are assured that:
"This was one of the pivot points in American history. That old way of looking at things; that old way of puttin' on a party...It's over.
How can we tell? Other than the government running half the private sector now, and perhaps a few adjustments in financial regulations, what exactly has changed?
The program is one hour and a much better way to spend time than watching some goofy movie on WOWOW or a noisy variety show.
Monday, February 23, 2009
Barack does a Taro
After a string of costly bailout and stimulus measures, President Obama will set a goal this week to cut the annual deficit at least in half by the end of his term, administration officials said...NYT
Has Obama gone Aso? Aso made the absurd assertion a while back that Japan would be the first country out of recession. Everyone responded by giggling. Is Obama's plan not equally giggle-worthy?
Maybe Michael Kinsley is on to something:
Kinsley, not being an economist, does not understand the magic behind how all this works and assumes that the US may use inflation to get rid of that debt. Good luck to those---China, Japan and others---who hold it. Giggle-giggle.
Has Obama gone Aso? Aso made the absurd assertion a while back that Japan would be the first country out of recession. Everyone responded by giggling. Is Obama's plan not equally giggle-worthy?
Maybe Michael Kinsley is on to something:
But even if the stimulus is a magnificent success, the money still has to be paid back. The plan of record apparently is that we keep borrowing, spending and stimulating, faster and faster, until suddenly, on some signal from heaven or Timothy Geithner, we all stop spending and start saving in recordbreaking amounts. Oh sure, that will work.
There is another way. If it's not the actual, secret plan, it will be an overwhelming temptation: Don't pay the money back. Washington Post.Kinsley, not being an economist, does not understand the magic behind how all this works and assumes that the US may use inflation to get rid of that debt. Good luck to those---China, Japan and others---who hold it. Giggle-giggle.
Wednesday, February 18, 2009
Inside the meltdown
When Lehman Brothers went under last September, it was obvious that something very serious was happening. So after being concerned I then had the strange thought that there would be a few good books about that weekend coming out a 6 or so months later. Of course, I never thought that the economies of many countries would be so bad that nobody would have the extra money to buy those books.
The US Public Broadcasting System's Frontline has released the first of three video reports Inside the Meltdown: First Tremors online, and you don't have to pay for it (It is about 1 hour long.).
"Unless you act, the entire system of this country---and the world---will melt down in a matter of days." Hank Paulson during an emergency meeting with senior legislators on September 18, 2008.
Isn't history so often better to read about (or watch programs about) when it is in the past than when you have yet to live through it?
The US Public Broadcasting System's Frontline has released the first of three video reports Inside the Meltdown: First Tremors online, and you don't have to pay for it (It is about 1 hour long.).
"Unless you act, the entire system of this country---and the world---will melt down in a matter of days." Hank Paulson during an emergency meeting with senior legislators on September 18, 2008.
Isn't history so often better to read about (or watch programs about) when it is in the past than when you have yet to live through it?
Wednesday, November 26, 2008
Reassurance
After all the time that I have wasted worrying about the global economy, I was reassured today by my buddy, the Thunderbird MBA, who explained the rationale behind his theory of why Japan will not be seriously affected by the downturn and will possibly once again (?) take over from the US the position of the world's top economic power.
It goes like this: Since Japan's financial system has not (!?) been affected by the global financial crisis, the fact that the other major economies of the world are having serious problems will provide Japanese companies with an opportunity to increase their market share in those countries. It will also cause foreign investment to increasingly flow into Japan (where we are to assume that it will be welcomed with open arms?) I am a bit confused as how companies will be able to increase market share of shrinking markets when nobody is buying anything unless Thunderbird guy is counting on a lot of bankruptcies. Of course, there would be no moves by any of those countries to protect their weakened industries either. Unfortunately, I never pursued those points any further.
However, just for fun I mentioned the indebtedness of US consumers and government and the dependence of the US on borrowing from foreign countries like Japan and China* (why did I so enjoy emphasizing Japan as a foreign country? How could Japan be foreign?) and wondered how he thought it could be sustainable. He seemingly had no knowledge of this and could not say much about it. Well, he is working in HR...
It has been said that you can judge the size of a man by the size of the things which irritate him. I am shrinking. Rapidly.
*I linked to this below, but Japan Focus has an article explaining in very easy to understand terms the risks and dangers of this system and why this system must be reformed or replaced. Debt Man Walking, by John B. Judis---very much worth reading.
It goes like this: Since Japan's financial system has not (!?) been affected by the global financial crisis, the fact that the other major economies of the world are having serious problems will provide Japanese companies with an opportunity to increase their market share in those countries. It will also cause foreign investment to increasingly flow into Japan (where we are to assume that it will be welcomed with open arms?) I am a bit confused as how companies will be able to increase market share of shrinking markets when nobody is buying anything unless Thunderbird guy is counting on a lot of bankruptcies. Of course, there would be no moves by any of those countries to protect their weakened industries either. Unfortunately, I never pursued those points any further.
However, just for fun I mentioned the indebtedness of US consumers and government and the dependence of the US on borrowing from foreign countries like Japan and China* (why did I so enjoy emphasizing Japan as a foreign country? How could Japan be foreign?) and wondered how he thought it could be sustainable. He seemingly had no knowledge of this and could not say much about it. Well, he is working in HR...
It has been said that you can judge the size of a man by the size of the things which irritate him. I am shrinking. Rapidly.
*I linked to this below, but Japan Focus has an article explaining in very easy to understand terms the risks and dangers of this system and why this system must be reformed or replaced. Debt Man Walking, by John B. Judis---very much worth reading.
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