Got halfway through yesterday and the power went out. It's so damn cold the squirrels clime into power transformers to get warm and POW! They normally don't survive the experience, but screw the little buggers, it causes us to freeze our buns off until the get the damn things fixed. Which brings me to the heading. Anybody seen Fat Al? I think he must have frozen to death along with the Polar Bears up north. Sad. Anyway this is what I was writing...
While we were away, Paul Krugman did it again. Writing, as usual, on the op ed page of the NYT, created a new bad word: mercantilism, or Chinese mercantilism to be more precise. He's on the same old kick; one of the reasons that we are having so many problems is that the Chinese refuse to revalue their currency, choosing instead to leave it pegged to the U.S. dollar and gaining an unfair advantage against all other trading currencies...mercantilism. The really funny thing about this piece is that Krugman begins with this statement: "Actually, the biggest problems with China involve climate change..." Now Krugman is a hell of a smart guy so you really have to wonder why he can't see what it is that is staring him right in the face; the Chinese don't think climate change is THEIR problem, but if they must appear to be cooperating with the U.S. they would rather appear to cooperate on climate change as we pointed out in this space some weeks back. I say "appear" because you all must have read the nonsensical crap they put out in Copenhagen which, at best, was playing the ball square. No the biggest problem with China if you were to ask the Chinese is the 600,000,000 or so who don't have jobs. And yet, people read this crap and based upon his well-deserved Nobel for his work on international trade, the assumption is that he's right on this as well. Amusingly, in support of other arguments throughout the article he quotes Paul Samuelson who he says "more or less created modern economics," conveniently forgetting that the late Professor also "proved" that the centrally planned economy of the Soviet Union was more efficient than that of the U.S. and would soon surpass the same. I guess we all get it wrong every once in a while. By the by, did you know that Larry Summers is Samuelson's nephew?" He invented endowment investing, you know.
I can't help but get the feeling that Prof Krugman is beginning to get a sense of the possible outcome of he fiscal policies of this administration and without Bush 43 to kick around for much longer the boys in the back room are looking around for some one to blame if things go sneakers-up. The Chinese look like the perfect patsies. Problem is these guys always seem more interested in who to blame when things go wrong that getting it right the first time around. The Chinese are not going to shift their emphasis; we had better figure out just how we are going to deal with it. So far we haven't; indeed, we haven't much tried.
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Big surprise. Chris the Crook announced that he's going to pack it in in November. What does this mean for regulation We'll try to explore that tomorrow.
Since moving to the East Coast from the Midwest, I am even more acutely aware of the cold (though squirrels rarely cause such disruptions--rats are actually the nemesis here).
ReplyDeleteWhile Chris the Crook may be going away, he has not yet relinquished his legacy. Indeed, the American Banker article linked below argues that his ability to create a consumer protection agency may even be heightened following his decision to not seek reelection since his “motives won’t be held suspect that he is doing this or that for political purposes.” I am sure that Dodd’s “political purposes” will never recede outside his blinders nor am I convinced that he will retire quietly without leaving his hoof mark on regulatory reform.
Glad you are back, Charles, and I look forward to more musings.
http://www.americanbanker.com/issues/175_4/dodd-1005832-1.html