Links 4/15/10

Plants ‘can think and remember‘ BBC

Gulf Oil Spill Hits Louisiana’s Largest Pelican Nesting Area Huffington Post

US moves to block new BP oil leases Financial Times

How the ultimate BP Gulf disaster could kill millions helium (hat tip reader John D)

Government for Sale: 2009 Lobbying $3.49 Billion Barry Ritholtz

More poverty by any measure Stateline (hat tip reader John D)

Study: Attack on Iran would be ‘start of long war’ Raw Story

Beijing starts gating, locking lower-income migrant villages Associated Press

Bank mortgage securities desks in hiring spree Financial Times. I must remind readers that the German government bond market showed considerable improvement in 1931 until shortly before Credit Anstalt collapsed. There are some very serious problems in the RMBS market that have not been addressed that look likely to surface in the next 6-18 months.

AIG Becomes ‘Benmosche Show’ After Departure of Chairman Golub Bloomberg. Further proof that a preening, bullying prima donna who cares only for his own interest is at the helm. I never worked with Golub directly but I know people who have, and they think highly of him. Benmosche appears to recognize that the absurd absentee ownership by Uncle Sam is rife for abuse, and he is not submitting to normal corporate governance. Think anything but a compliant chairman will take the job after the departure of a well regarded executive like Golub?

Watchdog: Small banks struggling despite bailouts Associated Press (hat tip reader Doc Holiday)


Ratigan’s Righteous Rant digby (hat tip reader Francois T)

Immigrants and US Innovation William Kerr, William Lincoln VoxEU

The capital tsunami is a bigger threat than the nuclear option Michael Pettis (hat tip reader bruno). Today’s must read. Key section:

The US, in other words, is not likely to face the “nuclear option” of a Chinese disruption of the US Treasury bond market. It is far more likely to be swamped by a tsunami of foreign capital. This tsunami will bring with it a corresponding surge in the US trade deficit and, with it, a rise in US unemployment. It will also force the US Treasury to increase the fiscal deficit as more of the jobs created by its spending leak abroad.

Antidote du jour:

Picture 15

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  1. russell1200

    The piece on an Israel attack on Iran is an exercise in political calculus with almost no meat.

    The military capabilities of the opponents is “assumed” and never justified.

    They talk about the closing of the Straights of Hormuz’s effect on oil prices without even realizing that this is the major source of resupply for US Military forces in Iraq, and that the US Military forces went to a Just-In-Time resupply strategy just prior to Operation Cobra (Iraq Invasion) and had had problems with it even then.

    They say nothing about Iran’s mine laying capabilities, or anti-ship missile quantities/ranges nor anything about US counter strategies.

    Net: the analysis is facile and incompetent.

    1. aet

      Any war with Iran would be a disaster for the state of Israel, no less than for Iran.

      Maybe if Israelis and Palestinians could reach some just settlement of their issues, wars involving hundreds of millions of their neighbors could be avoided.

      1. NOTaREALmerican

        Na… the males on both sides enjoy it way too much now. Part of their common culture now, fear of “those people”.

    2. Richard Kline

      I am not sanguine that Israel will _ever_ attack Iran. Those governing that state are crazy enough, that’s for sure. The facts stand, though, that militarily Isarel is totally chickenshit, and frankly they haven’t got the guts for the fallout. Period. Exactly once in Israel’s history have they ever attacked an enemy configuration remotely capable of striking back effectively, and that time, 1967, was in a complete sneak attack without declaration of war. In 1973 _they_ were attacked. Every other time, including the lie of ’48, Israel attacked a foe who was so wildly outgunned the outcome wasn’t remotely in doubt, even a risk to the state at all.

      I’m not minimizing the worries and planning of those who run Israel about their exposure, simply stating facts. And Israel’s performance on the ground in the last twenty years has been nothing to encourage confidence in a ready win. At all. Miscalculations can of course happen. But if Israel was going to launch any such attack, it already would have. We have recent example of just exactly how this is done and to whom: the attack on ‘a Syrian facility’ two years ago. Syria is immediately adjacent to Israel, but in no way able to reply militarily; Fact One. There was no prior announcement, no hint of “We Just Might Go;” Fact Two. The US was all smiles to the sortie; Fact Three. None of these facts apply to the present state of Iran. Just consider that matrix: Israel has an MO in these things. No part of that fits, here.

      Why, then, do we keep hearing about “The Sabras are coming!”? There are three principle reasons, more if one goes looking. Reason One: Distraction of the Masses. Israel is a VERY BAD ACTOR internationally and the pressure is building. It is very much in the interests of that state to point at another and say, “There’s the real [pejorative]!” And it is also very much in the interest of the American military and the American imperialist factions (by no means the same thing) to constantly shove mention before the public here of ‘those dirty SavageConqueringCommieFascistCommieGodlessTerrorist Rats.’ Because without constant reminder of some putative foreign threat Americans might well be taking aim at their own government and rentier elite, so no hour passes without mention of Those People.

      Secondly, it is needful to remind parties other than the US and Israel conjoined in concupiscence that ‘it might be a bad economic risk to invest in Iran because, y’know, things might blow up there, well ANY DAY.’ If the US is keeping it’s money home, Germany, China, and quite a few others would be quite willing to invest. A continuous heightened state, a permanent Orange Alert if you’re following this, serves as a line of flares on the tarmac of the highways of commerce, waving off at least the governments of other countries is not all of their economic actors.

      Thirdly, there is a cumulative psy-op factor of wearing down the despots running Iran, a hope to steer their behavior gradually away from something thought to be undesirable just by the sheer irritation of constant threat. The theocrats aren’t going to blink or give in per se, but the ever-present threat serves to dyke their course and grind away at that resolve. It is clear, for example, that the US and Iran did a no-deal deal on the Shiite government of Iraq in 2007 where Iran pinched off those who could have thrown the quisling regime there in the dust. Because it was in Iran’s interest to turn down the boil then. So the same is hoped for here: press, bully, stomp about, have someone quietly whisper a few shreds of a deal on the sly; edge them Thisway not Thatway.

      Is it better than open war? Well, yeah. Is it stupid bluster not fitting to the conduct of human affairs? Damn right. Iran would do a deal in a blink if it served their interest and they thought we’d keep it. They have repeatedly approached the US for twenty years; none of this is news. It is the US which keeps this going because the show serves the interest of a selfish few at the top of the heap in our OWN country. Iran is no threat to us, not to say in any way that the despots there are angels: It is we who are the threateners, and we threaten exactly because we’ve concluded that war is not a viable option in line with our practical interests but constant strife is.

      Where is it again, that City on the Hill? The flag of no nation flies over it, that’s all I know, so if you see a flag pull it down and start walking: you’re not there yet. That’s my view.

      1. curlydan

        Yes, we’re just stoking the fires there every once in awhile. I’ve been hearing about buildups of “batallions” and “aircraft carriers” being sent to the Gulf of Somewhere near Iran for the last 10 years and how this could be the big one.

        Our govts feel better with Iran as an enemy than a possibly solved “problem”

      2. Doug Terpstra

        Thanks for the insightful commentary. “…it is also very much in the interest of the American military and the American imperialist factions (by no means the same thing) to constantly shove mention before the public here of ‘those dirty SavageConqueringCommieFascistCommieGodlessTerrorist Rats.’ Because without constant reminder of some putative foreign threat Americans might well be taking aim at their own government and rentier elite, so no hour passes without mention of Those People.”

        And how easily we fall for such xenophobic, jingoistic tribal nonsense, again and again. We shouldn’t need an Oxford think tank to tell us that a war with Persia would not be a cake-walk. After Carter’s ruinous hostage crisis, Reagan pushed Saddam into a stalemated war with the Ayatollah in the ’80’s to no avial, even armed him with chemical weapons, despite millions dead. You would think after “mission (not) accomplished”; vanishing WMD’s; and the new decade-long quagmire in Af-Pakistan, we wouldn’t need a think-tank to avoid yet another Vietnam, but the MIC won’t let that stand in its way.

    3. Cynthia

      Notice that Jeffrey Goldberg, who’s a well-known liar for the Likudniks, broke this story about The United Arab Emirates (UAE) not wanting to live with a nuclear Iran:

      So this story probably has as much truth to it as the one that the Likudnik lying-machine cooked up about how Saudi Arabia has given Israel permission to use its airspace to bomb Iran:,7340,L-3742313,00.html

      This leads me to say that Israel can dream all it wants about dividing the Sunnis from the Shias or the Arabs from the Persians in order to maintain its sole superpower status in the Middle East, but neither dream is ever likely to come true. But I still don’t think this will stop the lying Likudniks from helping our war hawks to lie us into a war against Iran, just as they have done to us with regards to Iraq.

      Nevertheless, I will point out that the rulers of the UAE have allowed a Muslim hater like Dick Cheney to use their country as a safe haven for his tax dodging activities, and they even may allow another Muslim hater like Erik Prince to use their country as a safe haven for his war criminal activities:,0,0,1#comments

      So I think it’s quite conceivable that the Shia-hating, Persian-hating rulers of the UAE may indeed decide to back Israel in its war against Iran. But even if they don’t back the Israelis, I still think that the BRIC block, including Turkey, and possibly even Iran, will end up as winners with the US and Israel as the losers in an Israeli-led war against Iran.

  2. Richard Kline

    “I’m a panda!
    She’s a panda!
    You’re a panda!
    We’re ALL pandas!!
    Everyonnne’ss a band a paannnddaaAAAAAA BEAARRRRRRS!!!”

  3. Bates

    RE: “The capital tsunami is a bigger threat than the nuclear option” M Pettis

    I find nothing new in this article by Pettis. It is a rehash of what has been known for some time…but, let’s break down the seperate sections since it addresses, to some degree, both US and Chinese economic problems. BTW, I do not anticipate China using the ‘nuclear’ economic option of selling off large amounts of their US Treasury holdings.

    First I would like to point out that Pettis overlooked a couple of options open to China. 1) The Chinese can and are pushing for a downgrade of the debt issued by many Soverigns States while at the same time pushing for an upgrade of the debt of others. It may appear a small matter that one Chinese ratings agency has come out with a list of countries that the agency has re-assessed risk on, but it is not. The main stream US media ignored this story but savvy bond investors around the world miss little, if anything. See link:

    2) When Pettis writes of the fact that China has allocated some of it’s US Treasury Issues (debt) to commodities purchases from various commodity exporters he fails to mention that China is now the worlds largest producer of gold and that China is buying and stockpiling all of it’s own gold production. China is avoiding purchases of gold on the open market (as far as we can tell because purchase of gold by all central banks/countries is usually obscured). Gold is a tiny but important market and all central banks have been stockpiling gold for the last couple of years. Why? Probably as insurance against fiat currency collapse or in expectation of a new world currency backed, at least partially, by commodities including gold. At any rate…it is happening. See link here:

    On to what Pettis did not leave out… ” I really don’t think we should waste a lot of time worrying about the nuclear option [Chinese dumping US Treasury holdings].

    But that doesn’t mean there is nothing to worry about. In fact the problem facing the US and the world is not that China may stop purchasing US Treasury obligations. The problem is exactly the opposite.

    The major capital exporting countries – China, Germany, and Japan – are desperate to maintain or even increase their net capital exports, which are simply the flip side of their trade surpluses. The major capital importing countries, on the other hand, are likely to see their imports plummet.”

    There is absolutely nothing new in this observation by Pettis… I have linked to Triffin’s dilemma on NC before but I will do so again. Triffin was a Dutch/American economist that pointed out in the 1960s that a country using it’s own currency as the world reserve currency would have exactly the problems pointed out by Pettis today. Here it is from Wiki…

    “The Triffin dilemma (less commonly the Triffin paradox) is the observation that when a national currency also serves as an international reserve currency (as the US dollar does today), there are fundamental conflicts of interest between short-term domestic and long-term international economic objectives. This dilemma was first identified by Belgian-American economist Robert Triffin in the 1960s, who pointed out that the country issuing the global reserve currency must be willing to run large trade deficits in order to supply the world with enough of its currency to fulfill world demand for foreign exchange reserves.

    The use of a national currency as global reserve currency leads to a tension between national monetary policy and global monetary policy. This is reflected in fundamental imbalances in the balance of payments, specifically the current account: some goals require an overall flow of dollars out of the United States, while others require an overall flow of dollars in to the United States. Currency inflows and outflows of equal magnitudes cannot both happen at once.

    The Triffin dilemma is usually used to articulate the problems with the US dollar’s role as the reserve currency under the Bretton Woods system, or more generally of using a national currency as an international reserve currency.”

    “In the wake of the Financial crisis of 2007-2008, the governor of the People’s Bank of China explicitly named the Triffin Dilemma as the root cause of the economic disorder, in a speech titled Reform the International Monetary System. Zhou Xiaochuan’s speech of 29 March 2009 proposed strengthening existing global currency controls, through the IMF. [1] [2]

    This would involve a gradual move away from the US dollar as a reserve currency, and towards the use of SDRs (IMF Special Drawing Rights) as a global reserve currency.”

    Link to remainder of Wiki explanation:

    I have few comments on the second part of the Pettis article. Pettis seems to think that the Chinese real estate market is in a bubble and I don’t disagree, although I have not been to SE Asia for many years and have witnessed nothing first hand. China did follow the US/world lead in QE…so, why expect different results in China than the huge bubble in real estate that was created in Western Economies? Why is Pettis surprised by the RE bubble in China?

    Contrary to popular belief the Chinese are more than adaquate bankers and the Chinese are innovators. Chinese bankers dealing with their British, Dutch, French, American, Portugese, etc, counterparts prior to WW2 were rated better financiers than their Jewish counterparts…and thats pretty damn savvy! They will solve their internal problems in due course…and remember, don’t believe everything you hear. Macro economics IS continual low grade warfare and deception is to be expected…always.

    1. aet

      FWIW, I consider both the Chinese and the americans to be the shrewdest businesspeople of the world.

      Also FWIW, I think what the world’s economies really need are a few centuries of profound peace.

      My guess is an extended period of international peace would cure all ills.

      Easier said than done, though.

      1. tyaresun

        Yes, I totally agree with Pettis. Also, I am for a moratorium on war, say 5 years as a small begining. It will have a far more significant effect than a Fed announcement to keep interest rate at zero for 5 years.

        1. NOTaREALmerican

          Re: I am for a moratorium on war, say 5 years

          Sounds like a great idea.

          Let’s have a moratorium on pooping and gravity first tho; as both would be easier than a moratorium on something that males have been enthusiastically participating in for 10,000+ years.

          Most of human history can be explained with the 4 F’s of (male) life: Food, Fear, Fighting, and (uh) Sex.

  4. ds

    Although he gets at it in a roundabout way, the point Pettis seems to make is that China cannot rid itself of its USG Bond/USD holdings while maintaining the export surplus it runs against the US.

    First and foremost, the Chinese government values stability and social cohesion. The best way to achieve that is to have a growing economy as close to full-employment as possible. This is why they have chosen the path of export-led growth. Although in real terms China is less well off than otherwise, the consistent demand for cheap, assembled goods from the developed world promotes full-employment without the Chinese government having to explicitly direct economic activity.

    As Pettis rightly argues, the mainstream has it backwards — it is not the Chinese who are graciously financing the reckless spending of the American consumer, but rather it is the American consumer who is financing the domestic, full-employment objectives of the Chinese government.

    This should be a win-win scenario. We receive more containers of real goods from China than what we send back, while our productive capacity remains unaffected. The problem is that trade deficits do reduce demand for domestic output, and the deficit with China specifically puts pressures on unemployment and wages at the low-end of the scale. Since we see the situation as we currently do — that China is “financing” US debt — the fiscal posture of our government is consistently weak relative to the aggregate demand leakages from the trade deficit. Over the past 30 years, the output gap has only at times been bridged by explosions in private debt, and even these episodes have been uneven, temporary and unsustainable.

    Our currency is free floating. We cannot prevent China from pegging to it at an artificially low level. What our government can do however is to consistently maintain a fiscal posture which is at the very least equal in magnitude to the trade deficit.

    Also, as an aside, I think this has nothing really to do with the USD status as the “reserve currency”, whatever that means. China pegs to us because we have 300+ million affluent consumers, not because oil or whatever is priced in USD. Our currency is free floating and non-convertible. Whether the world uses USD for transaction purposes or not does not hinder the ability of the Federal Government to pursue the public purpose of full employment and output.

  5. Dirk

    Re: Immigrants and US Innovation William Kerr, William Lincoln VoxEU
    I am continually surprised by studies that go a roundabout way (in this case patents) of answering a question that they could better obtained by just asking the people that are its focus. Have the authors ever bothered to ask young Americans why they are reluctant to go into science and engineering? Have they ever bothered to ask why those that do flock to government-military-industrial jobs, which tend to be on the low end of patent production? And here again is that pernicious growth mantra. This world will not be right until people start focusing on quality of life as the standard.

  6. Tom Crowl

    Re: Government for Sale: 2009 Lobbying $3.49 Billion

    There’s more potential in networked citizen lobbying than may be readily apparent at first.

    The Power of Small Money, Large Numbers and Immediate Feedback!

    The Individually-controlled / Commons-dedicated Account*

    *A Commons-owned neutral platform for both political and charitable monetary contribution… which for very fundamental scaling reasons must allow a viable micro-transaction (think x-box points for action in the Commons). The resultant network catalyzes additional functionality for co-ordination of other ’social energy’ utilization. (P.S. Its the most neutral and ultimately politically viable method for the public finance of elections.)

    Personal Democracy: Disruption as an Enlightenment Essential

    Inertia brings extinction.
    We’ve reached that critical point now where…
    Evolution requires tools…
    Carefully thought out tools.


    And the truth is citizens don’t need to get anywhere close to that $3.9 billion…

    The mere existence of the capability for use by 3rd party organizers changes the dynamic in more ways than is at first apparent. At least I believe I can make a strong argument that that’s the case. Of course, I could be wrong… maybe best not to try anything at all.

    (Frankly I believe the capability is such a fundamental of speech and association that if the Founders had the technology, this right would have been guaranteed in the Constitution.)

  7. craazyman

    @ BBC – Plants can think and remember

    This is what I wrote here on June 14:

    “with the right sort of mind vibration you can send your awareness out anywhere in the universe, for free, and see what’s there and have telepathic conversations with alien beings of all sorts, everywhere. you can even talk to plants with sentient awareness :)”

    Science will eventually catch on. LOL.

    1. MyLessThanPrimeBeef

      Craazyman, I always see you as a prophet.

      Hopefully, you are not a vegetarian though.

      If plants can ‘think and remember,’ shirley they can feel.

      Remember that the next time you chew a living vegetable to death, slowing grinding them between your molars, you *%*#@ing murderous bas***ds!!!

      1. NOTaREALmerican

        Wasn’t there a movie in the 70’s (?) going around where somebody was chopping up a lettuce-head and the other lettuce-heads (“who” were all wired to some machine) “responded in terror”. I recall the movie was hysterical but – unbeknownst to me – the people I was with (and most of the audience) took it very seriously. I was never invited to another movie outing with them again.

        1. Yves Smith Post author

          I swear I read in the WSJ (their front page human interest story) a LONG time ago about how someone hooked up devices on a bunch of plants. Someone tore up one plant and according to their activity measures, the other plants “fainted”.

          Not only that, they “fainted” again when the plant murdered came back in the room later.

  8. Peripheral Visionary

    Re: “Ratigan’s Righteous Rant”

    Idiotic and totally unproductive. Ratigan is clearly angry, but everyone is angry. Ratigan has the opportunity to contribute to the discourse by actually discussing causes and solutions, but instead, just another angry rant.

    If Ratigan actually wanted to have a productive conversation, he would have discussed why Wall Street continues to make money (specifically, a deliberate Federal Reserve policy that allows banks to borrow money at lower rates than what Treasuries or other securities yield, thus allowing them to become de facto money printing machines) and why no jobs are forthcoming (because businesses are reluctant to hire at American wages, which are uncompetitive from a global perspective, and in an oppressive tax and regulatory structure that is also uncompetitive at the global level.)

    But no, instead we get

    ” . . . a poor player
    That struts and frets his hour upon the stage
    And then is heard no more: it is a tale
    Told by an idiot, full of sound and fury,
    Signifying nothing.”

    1. Anonymous Jones

      Well, you are right about some things (“just another angry rant”) and almost certainly wrong about others (“oppressive tax and regulatory structure that is also uncompetitive at the global level”…I’d like a few facts to back that one up…and please start with a comparison of our structure to Germany’s…); so as much as I like Shakespeare, I’d be cautious in throwing around quotes with “idiot” in them.

    2. emca

      You left out:

      “Life’s but a walking shadow…”

      The quote by Shakespeare refers to the general condition of mankind, not a political instance of its being. It is Macbeth’s lament after the news of his wife’s suicide.

      As it is today Faulkner still holds the best re-interpretation of that quote in Benjy’s bellowing and howling at the lack of repeatable order (disorder) (although paradoxically, he himself is shunned by society as the incarnation of chaos) in the context of time (which also paradoxically, Benjy has no concept of).

      In Faulkner’s study, the sound and the fury is most likely the disintegration of the “Old” South (all our yesterdays) and the vain attempt by its descendants to hold unto its antiquated values and lifestyle, something on which the author was keenly aware and was the theme or sub-theme of many of his works (I don’t need to document that statement, do I? – because I won’t).

      The criticism is of a lifestyle, but the manifestations in its current framework is political – conservative yearnings for past glory (again the sound the fury).

      So Ratigan’s rant is just that, fury that in itself, can be discounted as remedy to ailment. Unfortunately so also is your ‘why’ which is little more and much less than such blustering.

  9. tyaresun

    On highly skilled immigrants and innovation:

    I know scores of Ph.D. programs with empty labs because students were being refused visas and harrassed after 9/11. This changed the flow of students significantly with Australia and UK being the biggest beneficiaries. While things have improved since those days, it is still not back to normal.

  10. Brett Bim

    I have read the Pettis article as well as Bates’ and ds’ comments above and while I feel like I have a tenuous grasp on the situation, I feel like I don’t have a really good understanding of the fundamental concepts. Can anyone recommend a solid macro economics book that would be reasonably approachable by a dedicated layperson?

  11. curlydan

    Or could this be the most important quote from Pettis’ piece:
    “All this may turn out to be very bad for the US economy, but in the past massive capital recycling has usually been very good for asset markets. Might we see a surge in the US asset markets, at least until next year when Congress starts getting tough on the trade deficit? I would be willing to bet that we do.”

    1. MyLessThanPrimeBeef

      Can’t Pettis step back and see this as a hamster spinnig a wheel or a dog chasing its tail?

      When that stops, there will not be a tusnami of foreign capital, but it will be time for gold and cowrie shells.

  12. EmilianoZ

    In his blog, James Fallows (The Atlantic) recently pointed to an old article he had written in 1993. It’s a pretty interesting piece that addresses many issues we’ve discussed here. It could be entitled: “Adam Smith vs Friedrich List”. We all know Smith. Why List is virtually unknown here is one the questions JF asks. According to him, List had an important influence on Japanese industrialization. And since Korea and China copied Japan’s path to development, one could argue that List had a big impact on East Asia. In a nutshell Smith represents the “laissez faire” philosophy while List is the exponent of protectionism for the building of national industries.

    JF’s article is pretty long and rambling. I found it a bit boring until the second half, which presents a historical overview of the industrialization of Britain and the US. Despite all the hype for Smith’s free markets, Britain and the US of course followed the Listian path. It’s only when they achieved dominance that they started preaching the Smithian worldview, a self-serving posture designed to force foreign countries to open their markets to British and American goods. Perversely they now want us to believe that development was reached by following the Smithian path.

    I knew that the US had been protectionist for a long time. The article adds some interesting details I did not know, such as:
    “The United States had, just before Lincoln’s term, forced the Japanese to accept treaties to “open” the Japanese market. These provided that Japan could impose a tariff of no more than five percent on most imported goods. America’s average tariff on all imports was almost 30 percent at the time.”

    One question is: Can the US rebuild a manufacturing base by ditching Smith for List, a sort of back to basics? But wouldn’t that be a violation of WTO rules? And what about Smoot-Hawley?

  13. michel

    The Ultimate disaster piece is just a typical example of eco-hysteria written by liberal arts majors. No, it is not going to cause giant tsunamis, no, it is not going to destroy civilization, no, drilling one additional well was never going to do that.

    Utterly idiotic stuff.

  14. eric anderson

    Thoughts on Pettis:

    He presupposes that Americans will continue to increase purchases of Chinese goods.

    What if we are on the verge of another great slowdown? Possibly another general reduction in consumer spending will mean a reduction in imports from China and lower trade deficits.

    Or, on the other hand, millions losing unemployment benefits, income-strapped states laying off workers and purchasing less from the private sector causing even more job loss, leads to lower incomes. Anxiety-ridden consumers will purchase even more Chinese goods in preference to domestic products because they are less expensive, causing imports to surge and increasing the problem of balance with China.

    Pettis writes as if this flows here, that flows there, and it all balances out. Instead of a process of fluid dynamics, I see the world economic system as more akin to an aging jalopy bouncing down the road, minutes away from throwing a rod or the universal joint breaking. Our leaders keep pushing the accelerator pedals and brakes, violently. This does not end well. The tin-foil hats among us could be forgiven for thinking this is a deliberate push toward crisis. As the Pete Townshend song goes, “crashing by design.”

  15. John

    That article on immigration and h1-b visas was ridiculous. The two authors represent two of the most h1-b and new immigrant dependent institutions in the country (U MICHIGAN and HARVARD). They require large influxes of foreign students to pay full tuition (versus the US students these high tuition foreigners displace) to compensate for bloated administrator salaries.

    The article begins by alleging a link between an increase in the number of patents in the United States and increasing immigration in the United States.This position is unsupported by any facts.

    How would the authors know this? By then Indian names on the faces of the patents?

    And since most large US corporations have moved their R&D operations to India and China, the Indian names on the face of US patents may very well correlate to inventions created in India then patented in the United States.

    Most of the downfall in US industry can be linked to the GATT and WTO treaties in the 90’s which allow creative acts in foreign countries to carry much of the same weight as domestically inspired innovation.

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