Comments on “The US is only hurting itself”, by Bill Gross, Pimco, 3/12/2010, http://www.businessspectator.com.au/bs.nsf/Article/global-demand-bill-gross-pimco-recession-pd20101202-BQSWL?OpenDocument&src=rot
There is some truth to what is being said here.
A global fundamental realignment in production and income is inevitable and will have to occur sooner than later.
The continuing reliance on cheap labour wages in developing countries to subsidise the living standard in the US and other developed world is unsustainable when large developing countries catch up in industrial production.
You either have high unemployment in the developed world, or have them produce enough industrial goods that can compete with the goods produced in large developing countries. In competition for the same goods, the process of income equalisation between the developed and the developing countries is likely to accelerate.
The recent near death financial and economic crises and the difficulties of the recoveries of the developed economies are a manifestation of the likely more severe tensions between the two world in the years and decades ahead.
The world as a whole has to find a win-win solution to the future for both worlds.
Maybe the G20 is a forum for that solution to be found.
Showing posts with label industrialised economies. Show all posts
Showing posts with label industrialised economies. Show all posts
2010-12-03
2010-05-22
Why don't rich countries use easiest and most cost effective way for reducing emissions?
Comments on Peter Wood “Lessons from the US for strategies to put a price on carbon in Australia”, 21/05/2010, http://www.eastasiaforum.org/2010/05/21/lessons-from-the-us-for-strategies-to-put-a-price-on-carbon-in-australia-3/
Although it is extremely unlikely that the Australian states will do it given the changed circumstances, but were the Australian States to restart their process of introducing an emissions reduction scheme, it will show the ultimate failure of the Australian government in its emissions reduction policy at the national level.
Wood's idea of imposing a carbon tax when companies' reporting their emissions, though worth considering, but has been ruled out by the Rudd government. So from present to 2013 it is unlikely for both main political parties to have any carbon pricing or tax in place or introduced in Australia.
The difficulties with many emissions trading schemes are due to their fundamental flaws in not letting the public to decide the issue. They have been politically driven and highly politically manipulated so that the public don't see the costs and benefits of such schemes and left the main interest groups engaging in self interests seeking and distorting the policy, costs and benefits of any proposed schemes.
A much fairer and easier scheme is to provide no or little free permits to emitters, but distribute the carbon revenue to the public on equal per capita basis. In this way the costs of emissions will passed onto consumers and they will choose emission products like power based on prices. Energy producers will choose the most appropriate emission technologies to reflect the costs of emissions.
Of course, main political parties in industrialised countries don't like such an idea, because firstly it will leave political parties largely out of their power to manipulate to seek their own interests in the process, and secondly it will have international implications that industrialised countries don't want to have.
They have always been very skilful in hiding the easy, fair way and most cost effective way of reducing emissions and tend to blame others for any failures, either domestically or internationally.
That is the main reason why it has been so difficult to reach an international agreement on emissions reductions, because industrialised countries, the high emitters on per capita basis have been reluctant to embrace the just and fair principle in paying the prices for their high emissions.
It everyone is fair dinkum, it should be much easier to have an international agreement and to act on climate change globally.
It is noted that Wood did not mention what to do with the revenue from his idea of carbon pricing. Without giving it to the public, supports for it is unlikely to be very strong.
Of course, there is also an issue of how to deal with the issue of one country going it alone and most other countries not following suit.
Although it is extremely unlikely that the Australian states will do it given the changed circumstances, but were the Australian States to restart their process of introducing an emissions reduction scheme, it will show the ultimate failure of the Australian government in its emissions reduction policy at the national level.
Wood's idea of imposing a carbon tax when companies' reporting their emissions, though worth considering, but has been ruled out by the Rudd government. So from present to 2013 it is unlikely for both main political parties to have any carbon pricing or tax in place or introduced in Australia.
The difficulties with many emissions trading schemes are due to their fundamental flaws in not letting the public to decide the issue. They have been politically driven and highly politically manipulated so that the public don't see the costs and benefits of such schemes and left the main interest groups engaging in self interests seeking and distorting the policy, costs and benefits of any proposed schemes.
A much fairer and easier scheme is to provide no or little free permits to emitters, but distribute the carbon revenue to the public on equal per capita basis. In this way the costs of emissions will passed onto consumers and they will choose emission products like power based on prices. Energy producers will choose the most appropriate emission technologies to reflect the costs of emissions.
Of course, main political parties in industrialised countries don't like such an idea, because firstly it will leave political parties largely out of their power to manipulate to seek their own interests in the process, and secondly it will have international implications that industrialised countries don't want to have.
They have always been very skilful in hiding the easy, fair way and most cost effective way of reducing emissions and tend to blame others for any failures, either domestically or internationally.
That is the main reason why it has been so difficult to reach an international agreement on emissions reductions, because industrialised countries, the high emitters on per capita basis have been reluctant to embrace the just and fair principle in paying the prices for their high emissions.
It everyone is fair dinkum, it should be much easier to have an international agreement and to act on climate change globally.
It is noted that Wood did not mention what to do with the revenue from his idea of carbon pricing. Without giving it to the public, supports for it is unlikely to be very strong.
Of course, there is also an issue of how to deal with the issue of one country going it alone and most other countries not following suit.
2009-11-24
Challenges of the rapid rise of big developing economies
Comments on Michael Stutchbury “Up against a great wall”, 24/11/2009, http://blogs.theaustralian.news.com.au/currentaccount/index.php/theaustralian/comments/up_against_a_great_wall/
The Americans (and also most other industrialised countries included unfortunately) will have to adjust to the new world economic reality with the rise of big developing economies to increase the supply of goods and services globally.
It is reflected in cheaper labour, but can also make capital cheaper if those fast industrialising countries have high savings rates.
But the real catch is a realignment of the prices of goods and services internationally, with most prices of manufacturing goods and services that had been the main outputs of the industrialised countries to fall.
That means a reduction in the real wages of labour in the industrialised countries. This is just the results of standard trade theories.
Unfortunately, the Americans had misjudged the challenges to them and took only the good side of the cheaper capital and finances of the rise of big developing economies.
That caused their bubbles and the global financial crisis and with it the great global economic recession.
In this regard, Bergsten has been one of the very few who have a clearer mind.
All people should now rethink about the challenges and opportunities associated with the rapid rise of big developing economies.
The Americans need to live within their means, or trade assets or accumulated wealth for current consumptions, which means they can still run current account deficits, but only with greater lower future consumptions.
The Americans (and also most other industrialised countries included unfortunately) will have to adjust to the new world economic reality with the rise of big developing economies to increase the supply of goods and services globally.
It is reflected in cheaper labour, but can also make capital cheaper if those fast industrialising countries have high savings rates.
But the real catch is a realignment of the prices of goods and services internationally, with most prices of manufacturing goods and services that had been the main outputs of the industrialised countries to fall.
That means a reduction in the real wages of labour in the industrialised countries. This is just the results of standard trade theories.
Unfortunately, the Americans had misjudged the challenges to them and took only the good side of the cheaper capital and finances of the rise of big developing economies.
That caused their bubbles and the global financial crisis and with it the great global economic recession.
In this regard, Bergsten has been one of the very few who have a clearer mind.
All people should now rethink about the challenges and opportunities associated with the rapid rise of big developing economies.
The Americans need to live within their means, or trade assets or accumulated wealth for current consumptions, which means they can still run current account deficits, but only with greater lower future consumptions.
2009-07-21
Australia China economic relations and international order
Comments on Peter Drysdale “Weekly editorial – Stern Hu and the Chinese steel industry”, 20/07/2009, http://www.eastasiaforum.org/2009/07/20/weekly-editorial-stern-hu-and-the-chinese-steel-industry/
The recent world financial and economic crisis and the roles different economies have played in dealing with the challenges posed by the crisis suggest that the world is in a verge of a significant reshape of international economic order, or a new framework of economic governance.
Developing economies are increasingly having more economic weight or clout, while the relative weight of industrialised economies are on the decline. The relative shift of economic weight between the two camps and the current international institutions governing international economic affairs in which the past powers dominate the say requires reconciliation and realignment to reflect the changed and changing world reality.
In that broad context, it seems that the Australia China economic relations are a small part of it in a strange and interesting sense, i.e. equality (or inequality) and respect in dealing with each other.
The Stern Hu case has the feature of coincidence in that context, although many commentators and the public have made all sorts of speculations and comments, based on limited information and own systems of thinking. How much are correct and relevant remains to be seen for a long time.
The comments or demands by some politicians in Australia on the case reflect a deep rooted misunderstanding or contempt of another country and its system. That is where inequality and disrespect were shown and could be felt by others.
Of course, information through official channels was also strangely scarce. But it requires good analysis to see whether it was the beginning of a new process, or it was a response in a process.
But it is important for any new international economic order and governance to be fair to all, irrespective the past justice or injustice, equality or inequality, as well as sizes of the economy. It should be a new beginning to reflect universal justice and equality.
The international community needs to work in that direction, with great efforts and speed.
The recent world financial and economic crisis and the roles different economies have played in dealing with the challenges posed by the crisis suggest that the world is in a verge of a significant reshape of international economic order, or a new framework of economic governance.
Developing economies are increasingly having more economic weight or clout, while the relative weight of industrialised economies are on the decline. The relative shift of economic weight between the two camps and the current international institutions governing international economic affairs in which the past powers dominate the say requires reconciliation and realignment to reflect the changed and changing world reality.
In that broad context, it seems that the Australia China economic relations are a small part of it in a strange and interesting sense, i.e. equality (or inequality) and respect in dealing with each other.
The Stern Hu case has the feature of coincidence in that context, although many commentators and the public have made all sorts of speculations and comments, based on limited information and own systems of thinking. How much are correct and relevant remains to be seen for a long time.
The comments or demands by some politicians in Australia on the case reflect a deep rooted misunderstanding or contempt of another country and its system. That is where inequality and disrespect were shown and could be felt by others.
Of course, information through official channels was also strangely scarce. But it requires good analysis to see whether it was the beginning of a new process, or it was a response in a process.
But it is important for any new international economic order and governance to be fair to all, irrespective the past justice or injustice, equality or inequality, as well as sizes of the economy. It should be a new beginning to reflect universal justice and equality.
The international community needs to work in that direction, with great efforts and speed.
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