Hangzhou Lovin’

Cool article about anti-gravity, Zero Point energy fields, and the “black budget.” More particle physics research I say.

I’m becoming more and more convinced that the US economy is screwed. Just read an article by Joseph Stiglitz, a heavy hitting economist, (winner of the 2001 Nobel Prize in Economics and former world bank head), about what drove the economy in the 90’s. He concludes that it was mostly luck and the returns on wise spending in the past that fueled growth. He concludes that deregulations and forcing foreign countries to open their economies to investment did more harm than good (see Enron and WorldCom for deregulation gone bad and Asian financial crisis and Argentina for what happens when courtiers follow our advice). This is all pretty much old news though.

One thing interesting was his take on balancing the budget in the early 90’s. Normally in a recession you want to raise spending thereby increasing any deficits. However Stiglitz claims that this recession was driven by the saving and loan scandal and the reluctance of banks to make new loans. One of the reasons banks couldn’t make new loans was that they had to cover the risk that bond prices would go up in the future. But then the fed allowed the banks to ignore this risk, this move would have been bad if the interest rates had gone up, but by balancing the budget Clinton made sure that interest rates would stay low. I don’t think this is a problem now because rates are low and long-term bonds aren’t an attractive investment, but what if the budget deficit is increased due to a recession? The same problem could come back to haunt us.

the trade deficit is scarier. I’m reading more about it, though it’s mostly lefties or isolationists who right about it. Globalization people seem to ignore it… Well here’s an article I just found form the good ol’ boys at the Cato institute, I agree with most of there assessments actually. The protectionist argument against the trade deficit has to actually show that it causes a loss in jobs. The Cato article also doesn�t take into account the lowered wages caused by increased completion, but this might be offset by lower prices…

A trade deficit isn’t all-bad, but the thing I am most worried about is that it represents foreign debt. The Cato article presumes that we have a trade deficit because our economy is strong, if instead it is a Ponzi scheme, when the bubble bursts our foreign debt will only make matters worse as huge amounts of money leave the country. Here is a rather dated article that is the best economic analysis of the trade deficit I could find. Its conclusions might be a bit different if it were written after the bubble crash.
well that post was too long and probably filled with nonsense.

Please tell me where I am wrong.

Good article on the aftermath of an war in Iraq by James Fallows at the atlantic online. I need to go to bed so I’ll just post my favorite qoute.

Absent ninjas, getting Saddam out will mean bringing in men, machinery, and devastation

Look I’m an HTML genius. I added a permanent link to my page. It’s over there under the Blogger link. It connects you to the best damn comic strip ever. I feel it has has captured a bit of my soul and put it in three panel form…

I just watched Stars Wars II attack of the clones. It was pretty good, especially compared to the first prequel. It started out really slow but got better oncethe action started. Anakin is kind of a bad actor but it was cool when he went on the killing rampage. hopefully in the next episode there will be a lot more. I actually think the next should be good because it will be really dark, with anakin turning over to the dark side.

One second your all down on China what with the all the rules that aren’t posted anywhere and the ritualized politness that drags on and on, then the next moment the Cutest chinese girl you ever saw is at your door with moocakes just for you… This place is something else.

Good article in the NYtimes by Stephen S. Roach. It’s basic idea is that the US is in danger of a deflationary period, espiecially if the housing or consumer spending bubble breaks. It dosn’t come right out and say so but it seems to imply that this is inevitable. My thinking comes particularly from this qoute
“As their property values rise, hard-pressed consumers have been quick to extract purchasing power from their homes, taking advantage of low interest rates to refinance their property and use the savings to buy cars, furniture, appliances and other luxury goods. Thus the ever-expanding property bubble has become central to the culture of excess that is now driving the United States economy.”

If housing bubble debt is driving the consumer bubble that means the whole thing is a ponzi scheme that will come crashing down very hard when the Housing bubble (inevitably) pops. Plus with the war on Iraq taking out 1-2% of the GDP, we are really going to pay for our imperialistic dreams…

Need to study up on my economics.

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