Tuesday, September 30, 2008

Links I Think You Should Follow

There are a number of articles that I read and some I think should be discussed more broadly; toward that, I submit the following headline links:
I firmly believe that copyright law in the U.S. is going to hold a primary role in the economic and political power development of the United States in the world in the next century
This is a decent introduction to Data Mining and the increasing importance the U.S. and other governments are giving this form of spying. I'd suggest that data mining and copyright are going to become inextricably intertwined in the future.
This Q&A gives some flavor of the Japanese Labor Market today and suggests rising domestic tensions, particularly in the young. This seems an important demographic to keep in mind: unemployment is up, the family model is shifting (largely because young people aren't getting married), the food supply is regularly seen as vulnerable, and the economy just won't pick up after over a decade of slow growth.
I mention this because it reminds me of Norway's Global Crop Diversity Trust
Did you know that the largest reserve of methane (more dangerous than CO2 in the Global Warming crisis) is in the Arctic? Did you know that there are techniques such as introducing seawater into low-lying marine clouds that could reduce the amount of sunlight entering the lower atmosphere? I didn't, interesting read.
Brad Setser is putting forward in this lil' ditty and in the comments a lot of trash about why it's the Chinese that are at the root of our economic policy problems we are facing.

If I've got Setser right, we should blame China for the mess we're in because they were buying lots of agnency bonds during what we now call the housing boom and so interest rates were made lower than they should have been.

But that's absurd: it's because deregulation in how American investment banks that individuals were told to sell more loans to more potential consumers. Why were there so many potential consumers? Not because we experienced some kind of population boom of people in need of houses, but because wages in the U.S. have continued to sag during the last ten years.

We've had an unsustainable economy operating for nearly 15 years and I'd say it's probably more like 20 years. Works like NAFTA created this situation, where what is important about America in the world economy is not the strength of its innovation nor its production, but its good name. The recently rejected bailout was intended to restore America's good name, and so get lending occurring again, not to actually address the problem: that America has too much debt at every level, micro and macro.

1 comment:

  1. I fail to understand your argument. I agree that wage stagnation is a problem, and that financial innovation produced the illusion that risky loans were not risky. But that doesn't change the fact that the US borrowed heavily from China and the oil exporters for the last five years -- and that in a global macroeconomic sense, the rise in the US household deficit offset the rise in the surplus of china and the oil exporters. Would you seriously argue that absent such inflows into the US, US interest rates would not have been higher -- and that higher rates wouldn't have slowed US household borrowing/ cut into the securitization process?