naked capitalism

attempter says:

Re the Pettis piece: It sure is rich seeing the EU and America whine about China's protected industries after the way the West has engaged in decades of agricultural dumping all over the global South, ravaging local agriculture and crop diversity everywhere, leaving scorched earth to be taken over by western GMOs and agrofuel production.

All of this won't matter much longer. Peak Oil is rolling back globalism. These trade and consumption/savings imbalances will be forcibly rectified by energy fundamentals.

So for the time being protectionism, just as a stop-gap measure, may make the most sense, since the world is once again going to be round and big anyway.

What's imperative is to rebuild domestic industries for domestic markets, and delusions about the perpetuity of globalism aren't going to serve that goal.

As for Obama, how typical that even as he continues with a policy which is, across the board, anti-public interest, anti-worker, anti-poor, pro-police state, and in all these ways assaulting poor blacks along with everyone else, that he suddenly finds himself as an angry activist to deplore the treatment of one of his fellow rich blacks.

That's your limousine liberal in action. Where's all his speeches about rampant police abuse of the poor, black or white? In the same place as his general concern for the poor – nowhere. Nonexistent.

Peripheral Visionary says:

Re: the Pettis piece, he is far too easy on the Chinese. For all the failings of the West, the Chinese are every bit as much to blame for the current situation. Their current policies, while not overtly protectionist, are clearly designed to give their domestic industries an unfair advantage, through weakening the currency, suppressing organized labor, lending at artificially low rates, and quietly burying bad debt in the opaque books of the state-run banks. The end result is an economy with ultra-cheap labor where repayment of loans is optional; what free market economy can compete with that?

The characterization of the Chinese economic approach as mercantilism is spot-on, even if, again, they aren't as blatantly protectionist. A fiat currency, however, will let them continue the mercantilist games for longer than would have been possible under a hard currency. As such, I think some measure of protectionism in the West is a necessary, if not pleasant, response until trade is rebalanced.

The "coordinated response" is a pipe dream. Any response to the current crisis will necessarily benefit the countries with contracting economies (the U.S. and Europe) at the expanse of countries with expanding economies (China.) As such, China will never agree to any sensible set of policies, and so they will necessarily have to be forced upon them by unilateral moves that will hurt everyone–but will hurt the Chinese much more, and will give the West a chance to get back on its feet.

Al Gore says:

From the 'bigger brains' article:
"…2 or 3 million years ago when temperatures were a few degrees warmer than today…"

There you have it, global warming sheeple.

attempter says:

C H Smith's argument is that without all this "free money" sloshing around on account of the FIRE economy, medical care would be priced according to real economy measures.

That brochure from the 50s (not that long ago, really) is quite a reality check, on how insane things have gotten since the financialization of the economy.

Keenan, it's apropos that you mention Orlov. While I was reading Smith's piece I was thinking, Peak Oil is sending us all back to reality regardless of what we will.

From that point of view, sometimes I have to remind myself that advocacy of e.g. single-payer or a rigorous public plan, as I do advocate, is really just trying to render the Orlovian boondoggles less painful for the weakest as we enter energy descent.

Hugh says:

The Das article is a good overview of the current economic and financial situation.

I found Buiter incoherent in his rant against Larry Summers (justified), his qualified praise but ultimate dismissal of Bernanke, and his strong support of Yellen on the basis of crib notes she wrote as a graduate teaching assistant. It wasn't just Helicopter Ben who missed the boat on the housing bubble and the financial meltdown so did Yellen. I find all 3 of these candidates for Chair of the Fed hopelessly compromised.

Buiter wants a monetarist and a macroeconomist. Well monetarism is what the Fed is supposed to do but it was Fed monetary policy which set the stage for this mess. So it is a little bizarre that Buiter castigates Summers for his role in deregulation but doesn't slam Yellen and Bernanke for their easy credit policies. I don't see any of the 3 as good macroeconomists. Doesn't missing the two defining financial events
of our times preclude this? Or is macroeconomics code here for the Fed's new and dubious ventures in fiscal policy?

So far we have Roubini going with Bernanke and Buiter with Yellen. My question is what causes intelligent economists to go all goofy when it comes to the Chairmanship of the Fed?

Re Charles Hugh Smith's on healthcare, aside from making no economic sense, it makes no economic sense.

Anonymous says:

This line from the FT article:

In 2005, according to the Stockholm International Peace Research Institute, China accounted for just 4 per cent of global military spending, a tad short of the UK and France

is typical of the breath-taking ignorance and sheer incompetence presented as informed reporting by London-NYC "elite" media.

I do thank Yves for highlighting this article. Henceforth I'll ignore the FT as studiously as I ignore the National Enquirer and Weekly World News.