Chinese Exports (other than Yao)

An interesting post from Coyote Blog regarding trade with China and an historical comparison with Japan.

China bashing during the past decade is reminiscent of the Japan bashing that
occurred during the 1980s. It turned out that Japan’s substantial export surplus
with the US, its extensive accumulation of US Treasury bonds, and its purchases
of assets in the US did not hurt the United States, but were for the most part
foolish actions on the part of the Japanese government and businesses. I believe
that similar conclusions will be reached about the parallel Chinese practices.

He posted a hypothetical from a Chinese citizen:

It is important to note that each and every one of these government
interventions subsidizes US citizens and consumers at the expense of Chinese
citizens and consumers. A low yuan makes Chinese products cheap for
Americans but makes imports relatively dear for Chinese. So-called
“dumping” represents an even clearer direct subsidy of American consumers over
their Chinese counterparts. And limiting foreign exchange re-investments
to low-yield government bonds has acted as a direct subsidy of American
taxpayers and the American government, saddling China with extraordinarily low
yields on our nearly $1 trillion in foreign exchange. Every single
step China takes to promote exports is in effect a subsidy of American consumers
by Chinese citizens.

It is an interesting thought. Certainly we know what happened to Japan. Could China really be in store for an economic downfall? It stands to reason that if/when china's economy gets to that point where the wealth in country exceeds that of export productivity the US will find another developing country to feed our insatiable desires for cheap goods. Hencho En Guatemala???

Weapon Ban

At the Cato Institute Blog David Rittgers talks over a renewed assault weapon ban. In the name of Mexico's war on the drug cartells, the Obama administration wants to ban similar assault weapons banned during the Clinton era.

The ban would be a revival of a law passed in the early years of the
Clinton administration that expired in 2004. The law prohibited the sale
of newly-manufactured magazines holding more than ten rounds of ammunition and
having two of five cosmetic features on semi-automatic rifles. If you had
a pistol grip and a detachable magazine, you couldn’t have a bayonet lug. More recent proposals have attempted
to ban “barrel shrouds,” which the rest of the world calls “handguards” - the
place you put your hand (instead of on a hot barrel) to prevent burning it while
firing.
The emphasis here is on the cosmetic - any rational discussion of the
issue ought to note that an “assault weapon” is any object you use to assault
someone with - and banning the presence of a bayonet lug on the barrel of a
rifle is senseless. Knives, tire irons, and bricks can all serve as
“assault weapons.” This is an instance where quotation marks are not just
appropriate, they are required.

Predictably, both Harry Reid and Nancy Pelosi have temporarily quashed the issue. Let’s hope
they keep it out of the halls of Congress, and focus instead on a sensible drug policy that impacts the demand created by an illicit drug market.
Pelosi and Reid realize
that this proposal will do is come back to haunt Democrats in the 2010 mid-term
elections, which historically trend against the president’s party anyway.
Many Democrats attributed the flip of the House of Representatives
to Republican hands in 1994 to the first “assault weapons” ban. Numerous
experts believe that the reason Al Gore could not carry his home state of
Tennessee in the 2000 election was his push for broader gun control.
Blue Dog Democrats that ran on pro-gun platforms in conservative districts must
be rolling their eyes. The rest of the country should do so as well, and
send this proposal to the dustbin

.

It seems Ironic that the gun lobby's faith lies in Nancy Pelosi, and Harry Reid. Apparently staying in power is more important that acting on your beliefs.

Porn in Utah

Over at Reason (Hit and Run) they link to an article that studied porn viewership across the US. Funny enough, they found Utah had the highest rate per populace (except on Sundays).

The biggest consumer, Utah, averaged 5.47 adult content subscriptions per
1000 home broadband users; Montana bought the least with 1.92 per 1000. "The
differences here are not so stark," Edelman says.

States where a majority of residents agreed with the statement "I have
old-fashioned values about family and marriage," bought 3.6 more subscriptions
per thousand people than states where a majority disagreed. A similar difference
emerged for the statement "AIDS might be God's punishment for immoral sexual
behaviour."

Although this study makes a lot of assumptions about the data inferring that it's mostly the religious conservative making the subscriptions, I would think it more evenly distributed throughout society without much difference in belief system. It might just be that conservative states tend to be less open about their porn consumption, whereas in more liberal areas there is just as much or more porn viewership, but done in a more public way. Very interesting none the less.

The Down Turn

An interesting article about what caused the economic down turn

From Cato:
The U.S. Didn’t Cause the World Recession
Posted by Alan Reynolds

In the Washington Post, Ricardo Caballero of MIT has a novel and promising idea about “How to Lift a Falling Economy.” Unfortunately, he echoes the mantra that all the world’s economic problems can be traced to the U.S. in general, and to big U.S. banks in particular. “Already,” he says, “this illness has spread to the global economy.”

Already? Industrial production in Japan began collapsing in November 2007, two months ahead of the U.S., and the Japanese industrial decline has been twice as fast.

Unlike the U.S., real GDP began falling in the second quarter of 2008 in Germany, France, Italy, Japan, Singapore and Hong Kong. By no coincidence, that was when the price of oil rose as high as $145 a barrel. Soaring oil prices raise the cost of production and distribution for many industries, and reduce real household incomes and therefore consumption. Nine of the ten postwar U.S. recessions were preceded by a major spike in the price of oil.

In a piece for the Claremont Review of Books (written last November), I conclude , “This recession is not just a U.S. problem, not just about housing, and not just financial.”

Compare the decline in real GDP over the past 4 quarters (from The Economist):
U.S.
-0.2%
France
-1.0
Germany
-1.6
Britain
-1.8
Italy
-2.6
Japan
-4.6


Does it make sense to blame the largest declines in GDP on one country with the smallest decline? If so, then we need some explanation of how some uniquely American “illness has spread” to so many innocent victims.

If the explanation is supposed to be falling U.S. imports, then the worst decline by far would have been in Canada and Mexico (where real GDP was rising even in the third quarter). If the alleged causality is supposed to be because of some undefined links between financial centers, then Italy would not be among the hardest hit.

When it comes to trade, in fact, the shoe is mainly on the other foot: Collapsing foreign economies crushed U.S. exports.

In the second quarter of 2008, U.S. exports accounted for 1.54 percentage points of the 2.83% annualized rise in real GDP. But falling exports subtracted 2.84 percentage points from fourth quarter GDP. Falling exports, not falling consumption, were the biggest single contributor to the overall drop of 3.8%.

After looking at which economies fell first and fastest, it might be more accurate to say that some foreign illness has spread to the U.S. economy than to assert or assume the causality ran only in the opposite direction.

GM

From Hit and Run on the GM, Chrylser Bailout:

GM, Chrysler to Gov't: Give Us More Money Now. Or More Money Later. But Definitely Give Us More Money.
Posted on February 18, 2009, 8:30am Nick Gillespie
There's a reason why GM and Chrysler announced their long-awaited, much-anticipated restructuring plans (the homework requirement for taking taxpayer loot last year): The plans pretty much model the Saturday Night Live sketch in which automakers explain to Congress that they will need more federal dollars even or especially if there's an uptick in the car business.
From the Detroit Free Press:
General Motors Corp. and Chrysler LLC summoned the prospect Tuesday of their collapse unless they get $7 billion in federal aid within six weeks—part of a dramatic plea for a total of up to $39 billion to survive the worst economic crisis in the history of Detroit's signature industry.
Yet the automakers warned that any new money from the federal government would be much cheaper than the staggering cost of bankruptcies and forced liquidation of the two companies. By their estimates, bankruptcies would cost a combined $124 billion in federal loans and up to 3 million lost jobs.
Saints preserve us, I've seen junkies with better raps than that one. Among the options outlined by Chrysler is a merger between it and GM, thus producing the fugliest business baby since Kmart and Sears hooked up.

Rampant Consumerism, The Cure/Disease

I got this from Coyote blog.

I had a blog topic talked about in the video (towards the end): The Republic Of Yellowstone

“Because there is no disaster that immediate, decisive, wrong action cannot make worse”

Now Is Not The Time For Profit, Its Time To Spend

Matt Welch at Hit and Run writes about the bailout of the banks. He has a good summation paragraph on how it's going down:

As President Obama said,

There will be time for them to make profits, and there will be time for
them to get bonuses--now is not that time.

It will likely never be that time, as long as the government is in the
business of running private commerce. Banks will be forced to write 4 percent
mortgages. Automakers will be forced to build magical green cars that spew out 3
million jobs from their exhaust pipes. Airlines will be forced to Buy American,
governors will be forced to spend their budget-filling bounty on unionized
teachers, and newspapers will be forced to run Rahm Emanuel columns. Local
commercial decisions will be made in Washington, based on politics, instead of
by business-owners, based on consumers. As a direct result, the once-autonomous
firms, despite all that fancy money, will get less and less competitive, spend
more and more of their time trying to please Washington instead of their
customers, and will continue coming back for more as long as the well doesn't
run dry. Even if some of the details are off, the general results are as
preditable as a Beltway school closing early on a snow day. Nationalizations
have happened time and time again over recorded history, and their rate of
success is not ambiguous.

I think Nationalization is the crux of the matter. People tend to loose trust in democracy when they realize that what gets them into office (power) can also replace them. Honestly I don't think 90% of the politicians in Washington even realize that what they are doing right now is very close to what was done in the great depression, and will probably ultimately lead to the down fall of our country as we know it. I firmly believe that we are heading for a Soviet Union like crash.

4% mortgage, must be time to buy. Except wait, what happened when low interest rates go back up and the people that overextended themselves getting into the perfect house can't make the new higher interest rate payment? We would all be better off, instead of a 1-2 trillion stimulus to be spent on making sure UAW still gets paid $75/hour, if the government paid off everybodys mortgage.