Links
June 2nd, 2009 12:03 am | by John Jansen |The WSJ on the conflicts which the Obama Administration will face in its role as the largest stockholder in the new General Motors. The government now has a vested interest in never discovering one more drop of oil.
The Atlanta Fed’s macroblog with an interesting piece on the need for an 21st century “Accord” between the Fed and the Treasury.
The mighty greenback as a reserve currency: safe for now.
A disturbing ( to me) view of the GM bailout from Robert Reich.
5 Responses to “Links”
By ndk on Jun 2, 2009 | Reply
The laughter of Peking University’s students at Geithner is noteworthy too. I’ve had a chance to work with the CS students there and they are _exceptionally_ sharp, far better than I’ve encountered anywhere else. Japan lags particularly, but the U.S. is pretty poor too. I’m really excited about China’s future and I’m pulling for them.
But as Reich points out, the future isn’t today. His view is typical of any futurist. That’s not to say that he’s wrong at all; in fact, I agree with most everything he wrote. But he glosses over some very major problems in his last little paragraph. Nobody doubts there will always be productive uses for a person; there is no singular lump of labor. We’re seeing immense frictional challenges on two fronts here though.
First, that’s a huge number of workers to retrain and an immense amount of wrenching change for an economy. I spoke with a VP from a major publishing company awhile ago, asked him about business, and he waxed philosophical about the pace and fashion of human progress. It’s NEVER a good sign for business when a VP waxes philosophical.
The second is that the marginal value and utility of labor are generally fairly low. People just really aren’t that valuable anymore, because everything runs itself. Until their marginal utility increases, expect wages to be under global pressure. Are unions an answer to that, as I suspect Reich will opine? Partly, probably. But that’s just further subjugation of competitive pressures, and competitive pressures always win in the long run.
These are dark days for wage-earners. I, unfortunately, am one of them.
By Counterpointer on Jun 2, 2009 | Reply
ndk – long time see, sound comment.
JJ – to me the macroblog comment is more worrying than Reich, who is a known quantity. Surely a robust intramural policy debate is an excellent thing to have, and sensible people can argue the ends and with decent process might come decent outcomes. But the increasingly likely spectacle of monetary and fiscal policy breaking out into kids rolling around on the lawn can’t be good for stability, predictability, and confidence? (ie even from their current very low base).
C
By Greg on Jun 2, 2009 | Reply
Like ndk, I would have listed the Chinese students laughing at Geithner as a very important link.
Maybe the students really do feel US assets are garbage– in which case the Chinese government is going to worry about creating “disharmony” by losing more billions on US financial products
Or maybe the Chinese government staged the laughter– suggesting they want to give themselves political cover to sharply reduce allocations to the US (this does not necessarily mean selling — it probably just means allowing bonds to mature since the average holding is under 3yrs)
Either way, the Chinese culture places great importance on saving face — both for themselves and for their guests.
Openly and publicly laughing at a (admittedly preposterous) statement from a foreign government official has a LOT more significance in China than it would in the U.S.
By John Jansen on Jun 2, 2009 | Reply
Thank you.
By Bman on Jun 2, 2009 | Reply
Greg, “Openly and publicly laughing at a (admittedly preposterous) statement from a foreign government official has a LOT more significance in China than it would in the U.S.” Agreed – we here in the U.S. are more concerned about watching American Idol on our cheap from China flatscreens.