Peter Morici, while recognising some
roles of the trade, has failed fundamentally and miserably to grasps
some of the most important fundamental implications of trade, that
is, income/wage equalisation.
Until he properly takes that into
account, he will not be able to come up with useful and practical
He has always tended to blame the
emerging economies, their governments for Americans' problems.
Unfortunately that only shows his
failures in intellectual, even though he is a professor and was the
chief economist of US trade commission some times ago.
That is also a fundamental problem with
most US elites that has been at the root of the problems US has been
faced, even though the $US and the largest economy status have
afforded it with unparalleled advantages over other countries.
One of them is copied below, public debts and budget deficits:
I provided the following comment:
Alan, do you also have data for household' wealth?
From that and the chart for household debt, a chart for net debt could be built.
Then combined with household income data, a chart of net debt and income ratio of household could be constructed.
Both charts may be informational too.
While it is ideally good that governments run balanced budgets, is there a point of process optimisation that may give rise to budget deficits and surplus in some years?
While monetary policy has been argued by many economists to be used as the macroeconomic policy tool to regulate the economy, haven't we already seen that monetary policy has its limitation as well, especially during the GFC 1, where interest rates were at or near 0 and economies were still struggling even with strong fiscal stimulus in the US and Europe?
Why do some economists only think along a particular line of thought with little regard to the reality and to whether it is working or not?
Besides, how can the traditional monetary policy along to deal with the two speed or patch work economy as Australia has witnessed with mining booms?
I think this is a very important piece of analysis with objectivity as opposed to ideology and Professor Breslin should be highly commended for that.
I am particularly and deeply impressed by the argument that the process of the Chinese economic development in the last 3 decades has been experimental as opposed to a grand design, a gradual reformist process as opposed to big bang theoretical approach, a process of seeking what works as opposed to following blindly textbook economics.
In that respect, the criticism of its relying too heavily on exports and investment could perhaps be put into a proper perspective and an appropriate place. That is, it worked at that time/stage, as opposed to a theoretically well balanced model that could be applied all stages of economic development.
That point of view is in essence no difference to an argument that most industrialised economies are post industry/manufacturing and they had a imbalanced economy in their industrialisation stage that they should not have had!
Isn't that a nonsense?
PS: the link of the Chinese economic development of the past 3 decades to the East Asian developmental models is very useful, especially in light of the experimental nature of the Chinese development process and the history of rapid growth of some East Asian economies prior to the Chinese process.
Comments on Amritha Thiyagarajan “Global climate financing must face greater scrutiny”, 13/12/2011,http://www.eastasiaforum.org/2011/12/13/global-climate-financing-must-face-greater-scrutiny/#more-23391 While the issue is obviously an important one, does Australia offer transparency in its criteria used in determining which countries and which areas should the funding be used, or should Australia hand over the funding to an UN agency to determine more fairly according to international standard, so there is accountability on both sides?
Comments on Scott Prasser “Private schools a public good“ 22/12/2011,http://www.theaustralian.com.au/national-affairs/opinion/private-schools-a-public-good/story-e6frgd0x-1226227945644 While Prasser made a god point in terms of the differences in the share of public/non-public students when criticising the AEU's claim that the share of public school funding in Australia is lower than the OECD average, he, however, has not made a more comparable comparison along the line of the AEU's argument and that is a bit of pity in terms of information and the debate of education funding in Australia. Presumably, it is possible to get a figure of government funding per student for public schools versus government funding per student for non-public schools. By using that ratio one can compare the relative funding of government for public school versus non-public schools with other countries. One has to wonder why didn’t the professor present such figures? Prasser argues that “The Gonski review is a lost opportunity to shift the school funding debate into an informed discussion of policies.” Hasn’t he lost a good opportunity to inform the debate?
PS: a compromise deal could be that a garranteed fixed proportion of funding per government student for non-government school student. If there is a need to make a difference between Catholic and private schools, then a higher proportion for the former could be more appropriate.
In the short to media term, the stability in the relation cross the Taiwan strait will be good for every party involved, including both sides of the strait, the US, as well as the DPP.
In the long term, it would be conceivable to establish a new special structure for the eventual political unification of the two sides of the strait.
Deng Xioping was said to have stated that a structure more loose than the "one country, two systems" structure that has been applied to both Honk Kong and Macao, including Taiwan has its own military system etc.
I personally think that a special political name for reference to Taiwan, such as Taiwan特州(洲)(special state), to differentiate from the “Special Administration Region” used for both Honk Kong and Macao.
In China's long history, there were periods when 州 was used as a region within China, so the use of this Chinese character may be acceptable to the Chinese, especially as a compromise between the two sides of the Taiwan Strait. 洲 could also be used, given that Taiwan is an big island, surrounded by water, hence the left part of the character.
If such a political structure or system were to be adopted, China would have several different special regions, including Taiwan as the most special one, then Hong Kong and Macao, then minority ethnic autonomous regions, special directly administered municipalities, beside the many provinces.
As long as Taiwan is unified with the mainland and both work for win-win outcome to benefit both, then Taiwan can be expected to have much broader international space.
Comments on Philip Stephens “A clean sweep of political disillusion”, 17/12/2011, http://www.businessspectator.com.au/bs.nsf/Article/Arab-Spring-Middle-East-democracy-euro-debt-crisis-pd20111216-PL2EU?OpenDocument&src=sph&src=rot
I think the point is clear, that no political system is perfect.
There is, however, a strong advantage in democratic political system to have the choice to mask its failures while dictatorship and authoritarian systems can't if the people have the ability to part with their systems.
In a democratic system, if a government fails then it may be voted out of office and replaced with a different government whether the new government is better or not is another question.
That is the way and a success way to mask failures of the system if it doesn't work.
In a dictatorship system, people may think a change of the system will solve all problems, so they can bring revolutions to overthrow the system. Again, whether the new system will be better in solving those problems or not is a totally different question.
While Rudd had his shortcomings during his prime ministership, Gillard has shown a remarkable lack of strategic leadership skills and sound judgement.
At the time when Gillard got the prime ministership from Rudd, many were hoping that she would continue her good standing that had been observed before that time.
And there were enormous good wishes from many people for the first female prime minister good and well.
So far, those people have been hugely disappointed by her dismal performance.
Gillard has let so many good wishing people down.
The tribunal has performed some of the worst acts in recent times, first was the statuary appointees, high level bureaucrats and now is the politicians, with increases in their pay by as much as 63% in the above case and possibly more.
One has to wonder whether its doing affect the pay of the top persons at the tribunal or not, presumably they are part of the beneficiaries of these deals.
Does the tribunal work with any budgetary constraints in its mind when they give so large pay rises to those people, as the government asks for 4% efficiency dividend from the Australian public services?
Presumably there is no budgetary constraints at all to the tribunal.
This is a highly unsatisfactory situation and it mus be changed or stopped!
Although what you said is true, there is, however, a clear and big difference between the visible part and the less visible part of emissions.
What you said is probably and largely the visible part of population like air quality and what quality. Those problems have largely been resolved in most developed countries.
The current issue that both Kyoto and ever since has been more focused on the less visible part of carbon dioxide that is said to cause global warming.
So, for China and many developing countries there are "double" tasks, one is to deal with the visible and local part, as sometimes shown on TV reports even by developed world such as in Australia about the air population in China, and the other is for the carbon dioxide.
Arguably, the first task has more rapid and localised effect on their people and countries.
It is not a bad idea to seek a legal framework to resolve the South China Sea dispute, although some may fear that whether the existing international legal system or parts of it is biased or influenced by some unfairly.
If the States involved agree it is the best way to move forward, perhaps they should set themselves a sunset clause or deadline, by that time they will move to an agreed international legal framework should the disputes still not resolved through the current precesses.
PS: there are maybe a need for a new international legal frame work to balance the existing ones and legitimate issues of fairness, should any of such issues exist.
Grenville has made excellent suggestions on this vital issue at the core of international and world economic and financial stability or instability/crisis.
The close inherent economic integration of the Asian region and the recent experience of its "parity maintenance" and the experience of the euro do provide essential lessons for a better future ahead, should the relevant/related countries decide to take active steps to strengthen or establish a mechanism to prevent or mitigate future financial crisis from the region point of view.
It may further provide a direction for a whole international structure or system to achieve the same objective for the world as a whole.
I think it would be beneficial to have another cut in rates.
In a world full of uncertainties including possible an another financial/banking crisis, and with inflation not out of control, as well as relatively low activities everywhere except mining, Australia can afford to lower its official interest rates to benefit consumers as well as most businesses.
A good monetary policy is to balance the benefits and costs of inflation control, so the national welfare can be maximised.
I am not sure the current policy setting meets that criterion.
Leaving the real motivations of China's push for internationalisation of the RMB aside, there are alternatives to internationalisation of the RMB for avoiding or at least mitigating the potential huge losses for China associated with a rapid currency appreciation.
Beside considerations and argument based on the effects of RMB appreciation on both China's and indeed regional economies in terms of jobs and production of manufacturing, China could and should mount an argument to those parties that argue for a rapid appreciation that those countries must allow any assets China holds in any other currencies against which the RMB would appreciate to be denominated in dual currencies, that is, both their and China's currencies.
If any of them refuses to do that, it would be hypocrite of them by asking China to make a huge loss in terms of its assets holding in those other currencies.
However, one may suspect that internationalisation of the RMB might have other more important effects as the Chinese economy becomes even larger and transaction costs of international trade and FDI become more significant.
I have no idea about the reality and more Importantly the prospect of the renminbi’s internationalisation, but one may be totally surprised or even shocked if the pace accelerates rapidly to an unprecedented speed.
Just as the rapid rise of the Chinese economy along with its international trade, it is entirely possible that the renminbi’s internationalisation may be even fast once China realise its benefits greatly outweigh its costs.
In theory, internationalise a currency should be easier than rapidly increase a country's share in international trade, given the fact currency similar to monetary adjustment can be instantaneous, while trade or the real economy would move rather slowly, as demonstrated by the famous exchange rate overshooting and the simple IS-LM curve macroeconomic framework.