Interesting data and argument in the long Economist survey/story “Flying on one engine.” “Since 1995 almost 60% of the cumulative growth in world output has come from America, nearly twice America’s share of world GDP... America’s disproportionate contribution to global growth reflects an extraordinary rise in American spending.
Old timers out there may remember this website, the oldest version of the Mises Institute home page stored at the Internet Archive. It was cached on October 18, 1996, about a year and a half after the site went live (the original URL was www.auburn.edu/~lvmises). Browsing the site sure brings back fond memories!
From the Financial Times (via Drudge): “Iraq’s recently appointed finance minister on Sunday announced a radical liberalisation of the economy, but his plans surprised US allies and were attacked by Iraqi business representatives.
Some Economists Think the Fed is Lying (CNN): When Federal Reserve policy-makers announced this week that they were leaving short-term interest rates at 40-year lows, they also said the labor market was weakening and that inflation could be in for a fall. Some economists thought that was a bunch of malarkey.
Guess what? Deflation has its beneficiaries, too! Japanese salarymen don’t have to commute for hours on a crowded bullet train to the ‘burbs anymore - they can afford a swanky condo right in the city.
“In the past everybody wanted to live in more fashionable and convenient downtown areas but it was too expensive,” said Takaya Endo, executive director of the residential development division at Mitsubishi Estate Co Ltd, a major real estate firm .
For those who know Bastiat’s Broken Window Fallacy, made famous by Hazlitt’s Economics in One Lesson, the following news item would be hilarious if it weren’t so pathetic: The Bright Side of Hurricanes (MSNBC):
From a story in today’s Wall Street Journal on the Fed’s overstating deflation fears earlier this year: “The catalyst for the debate was Fed officials’ widespread discussion during the spring of the risks of deflation, or generally falling prices, and what ‘unconventional’ measures it could take to combat it. The discussions prompted investors to drive bond yields down sharply and then back up again when they learned the Fed wasn’t that worried about deflation.”
Steel Tariffs Appear to Have Backfired on Bush (WashPost): In a decision largely driven by his political advisers, President Bush set aside his free-trade principles last year and imposed heavy tariffs on imported steel to help out struggling mills in Pennsylvania and West Virginia, two states crucial for his reelection. Eighteen months later, key administration officials have concluded that Bush’s order has turned into a debacle.
I have spent much energy and not a little force trying to explain to the Macromancers that Greenspan’s ‘object’ productivity - even if correctly measured (which is a dubious proposition) - is not the same as ‘value’ productivity, which is the real purpose of the exercise.
For example, 500 million miles of unlit fibre optic cable tells Uncle Al things are just cookin’ -whereas you and I know we’d rather have reliable power or cheaper prescriptions!
