Saturday, November 25, 2006
Does China have a slack labor market?
There are many questions that flummox me about China's economy (when will the central bank diversify its holdings? Are nonperforming loans a real problem or not? Why has Chinese saving increased just when Beijing took steps to boost consumption? Just how efficient is foreign and domestic Chinese investment?) In the Washington Post, Edward Cody suggests a new empirical puzzle -- how can I reconcile reports about the dearth of skilled labor in China with this one from Cody?
An open-ended rise in living standards, particularly for the educated middle class, has been part of an unspoken pact under which the party retains a monopoly on political power despite the country's turn away from socialism.The article suggests that a slackening economy is the culprit. Another possible explanation is that as labor productivity increases from the high rate of investment in capital stock, job growth in China will no longer keep pace with growth in GDP. Another, more quirky hypothesis is that the market for English students -- who disproportionately show up in western press reports -- is particularly bad.
But I'd be curious to hear other hypotheses.
Wednesday, November 22, 2006
I'm sure glad the Democrats are improving our standing in Latin America
The Nelson Report has been assuring me repeatedly that the Democratic takeover of Congress will not mean the end of U.S. trade policy. Here's one example from a report from last week:
It’s our contention that even if the Democrats had not swept the House and Senate elections, the US would still face increasing difficulty as the political arena wrestles over the challenges of adjustment to globalization, especially dealing with a downside which includes mitigating pain at home, and enforcing better behavior by trading partners.Nelson is correct to point out that trade integration was not exactly going gangbusters prior to the midterms -- but then again, this FT story by Eoin Callan points out that it's possible for integration to slow even further:
The US Congress will reject two trade deals agreed with Colombia and Peru, leading Democrats said, in a significant blow to President George W. Bush’s agenda for his final two years in office.UPDATE: The Washington Post's Sibylla Brodzinsky and Peter S. Goodman summarize how this kind of thing is going to be perceived south of the border:
"We watch the news and we're nervous about what might happen with what we send to the United States," said Janeth Palacio Ramirez, 35, who supports her 15-year-old daughter and her elderly parents by punching zipper stops onto 7,000 pairs of jeans a day, earning about $200 a month. "Everything we make here goes there, so if there are problems with exports, we'll all lose our jobs."....Hat tip: Pienso
What's the more disturbing video of the week?
Over the past week, there's been a lot of blog chatter about a tazer incident at a UCLA library that was partially captured on video. To quote James Joyner, "I agree that the use of a taser against a skinny student for the crime of being a dumbass would appear to be an excessive application of force."
The video is extremely disturbing for the cries of the tazed student, Mostafa Tabatabainejad. What I found interesting, however, was the way in which every person on that video acted according to type. The security officers acted as brutal thugs who would not have their authority questioned; the students acted as the righteously indignant chorus. Even Tabatabainejad seemed to be playing a role, the belligerent protestor ("here's your f#$%ing Patriot Act!!"). The violence is disturbing, but the characters playing their parts grounds the sequence into familiar tropes. It is, therefore, perhaps less shocking than it should be.
For me, the more discomfiting video was Michael Richards' apology on The Late Show with David Letterman for his racially profane diatribe at an LA comedy club over the weekend. Richards, a comedian, is acting in a non-comedic fashion. The audience, confused about what's going on, begins to laugh at Richards' apology. Jerry Seinfeld, a comedian, tut-tuts the audience for laughing. Richards, who on Seinfeld played a character who seemingly fell ass-backwards into success, has put himself into the exact opposite situation, someone who seems completely mystified about how he wound up in his current predicament.
Tuesday, November 21, 2006
In defense of Hillary Clinton
Anne Kornblut and Jeff Zeleny have an NYT front-pager that seems designed to knock Hillary Clinton down a peg or two:
She had only token opposition, but Senator Hillary Rodham Clinton still spent more on her re-election — upward of $30 million — than any other candidate for Senate this year. So where did all the money go?Now this would be an interesting story -- if the context suggests that she did in fact spend in a profligate manner compared to other politicos and diminshed her ability to collect future revenues.
Alas, the meat of the story suggests precisely the opposite:
[T]he way she spent the money troubled some of Mrs. Clinton’s supporters, many of whom have been called on repeatedly over the years to raise and give money for Bill Clinton’s two presidential campaigns, his legal expenses, his library, his global antipoverty and AIDS-fighting program and now his wife’s political career. One Clinton supporter said it would become harder to tap repeat donors if it appeared that the money was not being well spent.Look, any candidate that has enough money to hire a blog consultant is probably overspending just a bit. That said, anyone prepping for a 2008 run would be expected to overspend in this election cycle. Clinton needed to win convincingly and to amass a healthy donor base, and both of these activities cost money.
I'm hardly a big fan of Hillary's, but this piece seems like ovekill to me.
Greed and envy are good
This New York Times story by Katie Hafner seems pretty upfront in making this point:
Envy may be a sin in some books, but it is a powerful driving force in Silicon Valley, where technical achievements are admired but financial payoffs are the ultimate form of recognition. And now that the YouTube purchase has amplified talk of a second dot-com boom, many high-tech entrepreneurs — successful and not so successful — are examining their lives as measured against upstarts who have made it bigger....
Monday, November 20, 2006
In honor of Milton Friedman, I'd like to see....
Milton Friedman's significance to the world has been revealed in the bevy of obits that we've all read in the past week. Much of the effort has been focused on those aspects of Friedman's ouvre that have become accepted wisdom -- the importance of monetary policy, the
Here's an open invitation to readers -- which of Friedman's policy proposals that have not become accepted wisdom would you like to see implemented?
My choice is not a difficult one -- it's a policy proposal that would manage to address U.S. foreign policy, economic development, the rule of law, crime, and race relations in one fell swoop.....
If the United States were to legalize (and tax) illegal narcotics in the same manner that legal narcotics, like alcohol and tobacco, are treated, consider the effects on:
U.S. foreign policy: Because of current policies regarding narcotics, the United States is stymied in promoting the rule of law in Afghanistan and several Latin American countries because farmers in those countries keep harvesting products that American cunsumers demand. Because this activity is crminalized, the bulk of the revenues from this activity enriches criminal syndicates and terrorist networks. All for a supply-side policy that does nothing but act as a price support for producers.There are other benefits as well -- such as eliminating the racial bias that exists within drug sentencing guidelines at the federal level.
There are two potential downsides to this move. First, actual drug use would likely increase -- but this can be dealt with via larger treatment budgets. Second, once this genie is out of the bottle, I suspect there's no going back. (For an extended argument against legalization, check out this Theodore Dalrymple essay from City Journal).
Sunday, November 19, 2006
David Brooks rousts me from my Sunday torpor
In the past 24 hours I had to go from presenting a paper at the inaugural meeting of the International Political Economy Society to spending the night with my son at his Cub Scout campout. In other words, I'm wiped.
So I ordinarily wouldn't bother to blog today... until I saw David Brooks' column devoted to Milton Friedman.
Brooks accomplishes a unique two-fer in this column, simultaneously infuriating me on one point and making me agree with him on another.
So, in order... the part of the column that is utter horses%&t:
[Friedman's] passing is sad for many reasons. One is that from the 1940s to the mid-1990s, American political life was shaped by a series of landmark books: "Witness," "The Vital Center," "Capitalism and Freedom,""The Death and Life of American Cities," "The Closing of the American Mind." Then in the 1990s, those big books stopped coming. Now instead of books, we have blogs.Oh, please, spare me the crap about how today's deep thoughts fail to rival those of the past. Brooks listed five books to cover five decades. Here are five books from the past decade that would meet his criteria (note I am far from endorsing the content of these books -- but they're big in the sense that their arguments cannot be ignored):
Samuel Huntingon, The Clash of Civilizations and the Remaking of World Order.I did this without breaking a sweat. If I actually glanced over to my library or checked out my book club recommendations, I could probably come up with twenty more.
To paraphrase Gloria Swanson -- books are big, it's the politics that got small.
Oh, and it's not the blogs either -- the last three authors in that list either have blogs or have interacted with them on a regular basis.
At the same time, Brooks got me to nod with this pararaph:
His death is sad, too, because classical economics is under its greatest threat in a generation. Growing evidence suggests average workers are not seeing the benefits of their productivity gains--that the market is broken and requires heavy government correction. Friedman's heirs have been avoiding this debate. They're losing it badly and have offered no concrete remedies to address the problem, if it is one.