FM newswire for 3 January, hot articles for your morning reading

Today’s links to interesting news and analysis.

  1. Keeping America’s Edge“, Jim Manzi, National Affairs, Winter 2010 — Powerful insights from a bright guy.
  2. China’s Population to Peak at 1.4 Billion Around 2026, India to Become Most Populous Country in 2025“, Census Bureau, 15 December 2009
  3. Rising Tide“, Mark Steyn, National Review, 22 December 2009 — About Islam in Britain and Europe
  4. Some notes on Teddy Roosevelt“, The Edge of the American West, 22 December 2009 — About one of our greatest Presidents, a reminder that we can select great leaders.
  5. The pace of change“, Michael Pettis (Prof, Peking U), 26 December 2009 — About China.  About America.

Afterword

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15 thoughts on “FM newswire for 3 January, hot articles for your morning reading

  1. and the rising tide story! did you know that there are more Christians (as a percentage) in Syria & Egypt than Muslims in Europe (I looked up in Wikipedia once).
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    FM reply: And so we hear all those stories from Syria and Egypt about Christians seeking special privledges, running schools advocating replacing Islam with Christian theocratic legal systems, etc. Oh wait, no so. What’s your point?

  2. “Keeping America’s Edge“, Jim Manzi, National Affairs, Winter 2010 — Powerful insights from a bright guy.

    Nice write up Jim. Good List of some and maybe many of the issues. Fine wordsmith. Grand intellectual adventure, certainly.

    Did you notice that just about none of his suggested paths for resolution have even a modicum of consensus available on the horizon — in the next year — stop digging a deeper hole, as he opines? Notice that he speaks/writes as if he is engineering an AI Robot?

    The title is really ex post facto. Try: How America Lost its Edge.

    It would be terribly rude to take issue with such an attempt to meaningfully elucidate the issues and an offer for a Path forward offered by an obviously caring and bright gent as this, however, I do suggest that he fails to see the direct interconnectedness of dissolution of social cohesion (and the stresses thereof today) with an economy that relies on a perceived need for continuous rapid innovation.

    Jim thinks a priori, “After all, we must have continuous, rapid technological and business-model innovation to grow our economy fast enough to avoid losing power to those who do not share America’s values — and this innovation requires increasingly deregulated markets and fewer restrictions on behavior.”

    …..gonna lose power to those evil ones who do not share our values! Good luck with THAT one, Jim. Game. Set. Match. This will not end well, folks.

  3. I’m mind bogglingly angry, this is off topic but related to a lot of things I have said before. There is no free market …. repeat no free market!

    Now I am a Dr Who fan. The latest (and the last of the David Tennet series) has been shown in the UK and the US. But here in Oz we have to wait a month. I want to watch it now. I’m happy to pay for it. Can I watch on the BBC web site nope, can I buy it from the BBC …. nope, I-tune .. nope. UK store only, which I cannot buy from. Can I get it from the US .. nope. And people wonder why there is piracy.

    Useless Ponzi ‘capitalism’, with so much ‘lip service’ about ‘free markets’ … rubbish. Now that the rant is over we can go back to normal channels. But it is indicative about how much nonsense is talked about in so much of economics. Remember the DVD regions … and that’s a free market?
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    FM reply: I do not understand your point. Failure to live up to your service requirements means “no free markets”? Smith must have missed that definition. As someone who has attempted to sell intellectual property, it’s not the easy street you seem to believe it is.

    “Remember the DVD regions … and that’s a free market?”

    Without coordination of standards the modern world of electronics would not be possible. Being necessary, there will be things you will not like about the resulting schemes. Don’t worry; in Heaven there are no DVD regions (a little-known codicil to “The Wealth of Nations”.

  4. Our illustrious fourfathers knew how to handle such problems :)

    [youtube=http://www.youtube.com/watch?v=nHGOl-jfUK0&hl=en_US&fs=1&]

  5. ” I do not understand your point”. Simply this is a so called ‘globalised free market society’. I want to buy something and I can’t. Happy to pay the various taxes. But I simply can’t.

    Therefore I have to (1) wait until a Govt owned institution allows me to watch it (2) Become a ‘criminal’.

    As for Smith, he would be turning in his grave at the misquotes attributed to him. He was anti-retentier, anti-financier, anti- crony capitalism, anti- business cartels .. etc, etc. If he was alive right now he would be horrified that some’big boys’ could carve up the World into trading blocks and ‘they’ decide when someonme can buy something, if ever .. at the price they decide, with different prices in different regions. That is actually ‘anti-capitalism’. Which part of ‘free’ do so called ‘free marketers’ not undertand.

    As usual it takes an ‘old leftie’ to point out the absurdities and contradictions of our so called ‘free market’ and ‘globalisation’. I should say as ‘an old leftie’ (well not actually because I’m pretty right wing about many things), that regulated free markets works (sort of freeish). But that does not mean I agree with something that means that I, happy to pay including the taxes, are blocked by some ‘vested interests’ who can buy a politician or two.

    While at the same time some hedge fund can long/short our currency and help/wreck our economy .. and pay no tax … do you see the absurdity. Or another absurdity some, dark of course, people who set of a minor bomb can be locked up forever while people who happily destroy whole companies and economies (and destoy far more people) get feted … and lots of money at low tax rates. That’s not socialism or capitalism it is fascism (look up the definition).

    Plus it is so stupid, after trying for hours to watch legally and/or buy legally something, I can can now listen to people who simply ignore that nonsense (god I’m so anal about legality at times) and have already downloaded illegally the programs and watched them. More fool me I say, the amount of energy over the years I have wasted setting up systems to catch bad guys, meanwhile an ex-CEO of mine goes and pays bribes to Saddam Hussain and gets paid millions doing it.

    The ‘honest person dillema’, after a while society is so totally currupt that you are a mug not to join in. How do you deal with that?
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    FM reply: I too like to bitch about the world petty irritants. But this is not the place to do it, at least in this fashion.

    “I want to buy something and I can’t.”

    Let’s rephase that. You want other people to sell you something when you want it, on terms that you like. You call that “free enterprise.” Well, that’s one name for it (but not the usual one).

    You’ve discovered the great insight of sophomores: other people’s businesses are so easy easy to run, and the people running them are just so dumb. How many changes of media has the entertainment biz coped with during the past century? No doubt you have simple solutions for managing complex businesses amidst rapidly changing market and technological conditions. Perhaps you should send a letter to the folks actually trying to run these businesses. No doubt they’d be awed by your insights.

    “While at the same time some hedge fund can long/short our currency and help/wreck our economy”

    That’s quite a switch from moaning about DVD sales. And there’s still slavery in East Africa. And then we all die. I don’t see your point.

  6. By the Mikyo, how did you do that (admiration here)? In a previous post I tried to put tables in and they were totally stuffed up.

  7. It is brilliant, grew up as Monty Python wathcher as a kid, saw my first ‘naked’ boob there … oh (sort of) happy mammories.

  8. Re:Christians seeking special priviledges…
    Look up the word “Tanzimat”(History of Turkey). Alas, History is dead and buried. “Freedom of religion” used to mean only equal political rights for previously disenfranchised religious minorities(Treaty of Westphalen), not any privileges. Here lies the problem today. IMHO religions, Christians and Muslims alike, encouraged by Bush(the younger) and perhaps Obama himself, sensed the chance of regaining **political** influence, this is happening today. The religious observance, the necessary privileges are the tried and tested pretext, they used throughout history. The result, as it has always been: war. The only correct answer would be: no privileges, no political influence, ban any religious argument from the political discourse and of course, no war. Pertinent to this, never forget: it is not the President, the government, etc. who is commanding an army, the Sargent on the spot is literally calling the shots. Witness the story of the German bombing in Kunduz lately. The war on terror in this sense has reached the “Wallenstein stage”. The population in the war theater gets it’s idea of the intentions of the army, not from any newspapers, or Oslo speeches, but from the bullets flying around. So, they probably think, it is a veritable crusade. Let’s think about ourselves as the Britons of the colonialist XIX. century, who were told, and believed, they are shouldering the white man’s burden. Only, in retrospect we(unhappy few, who still know History) know the truth.

  9. This is about the issue of innovation, reduction in employment level and constancy of output presented by Jim Mansi and commented on by Pettis. Leading up to 2006, and all the way till now, there has been a steady increase in the number of automobile assembly plants and auto component manufacturing firms geogrphically located in the Pacific Rim countries. What is commonly known as Bretton Woods II, combined with the development of telecommunications technology, reductions in the cost of international travel, etc – the macroeconomic environment created the incentives for US and Western Auto firms to outsource their manufacturing operations to the Pacific Rim countries.

    In earlier decades, the emergence of the Japanese Kanban system of manufacturing, with Toyota’s legendary success in Just-in-Time techniques and in reducing inventory to less than 2 hours plant running time;etc caused the loss of American manufacturing jobs, especially in the automobile sector.

    In recent years, different firms responded differently to these changes in the macroeconomic environment. One of the little known and less well analyzed factors in the recent General Motors bankruptcy is that while GM was well aware of these changes and wanted to respond to them; they had inked long term binding contracts with vendors. Their operational problem was that they had to convince existing long term vendors regarding planned org structure changes, off shoring, etc – which was quite difficult.
    While Daimler aggressively penetrated 13 markets in the Asia Pacific, successfully built new manufacturing operations in China and elsewhere, Chrysler was not doing as much in the international arena, and the two firms eventually split.

    Component supplier firms like Johnson, etc were faced with a situation to move signifcant parts of their operations lock, stock and barrel to the Pacific Rim geographies; and do so competitively with local firms in that space. Several of these decided instead to operate at lower capacity, obviously with lower manpower levels.

    Sadly, the Jim Latsis graph does NOT highlight superior American technical innovation resulting in the same levels of Auto output at reduced levels of manpower deployment. Instead, it DOES highlight ANOTHER, more DANGEROUS aspect of the US economy – namely, that the US economy is mostly an “import value added” economy. The benefits of the lower costs resulting from increased offshoring weren’t passed on to American consumers, at the macro level. “Share of manufacturing output in GDP”, measured of course at market prices, remained just about the same, though the “expensive” american workers were fired and replaced with Chinese, Koreans, Japanese, etc over time.
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    FM reply: Thanks for this interesting reply.

    “that the US economy is mostly an “import value added” economy.”

    Note the correction I posted today, which supports this (but does not explain it as clearly as you did). Gross manufacturing output has remained stable as a percent of GDP since 1980. But value-added of manufacturing has dropped from 20% GDP in 1980 to 11.5% in 2008. I suspect that much of this difference results from the effect you describe: importing key intermediate goods.

  10. INDIAN INVESTOR offers: “Sadly, the Jim Latsis graph does NOT highlight superior American technical innovation resulting in the same levels of Auto output at reduced levels of manpower deployment. Instead, it DOES highlight ANOTHER, more DANGEROUS aspect of the US economy – namely, that the US economy is mostly an “import value added” economy. The benefits of the lower costs resulting from increased offshoring weren’t passed on to American consumers, at the macro level. “Share of manufacturing output in GDP”, measured of course at market prices, remained just about the same, though the “expensive” american workers were fired and replaced with Chinese, Koreans, Japanese, etc over time.”

    Excellent. Exactly the type of detail that overreaching sermonettes exemplified by the Robot Man, Jim Mansi, fails to address (and for good reason). People like Mansi are nothing but apologists and cheeleaders (with a moral-neutral orientation) for the gutting of a Culture by the guys who should have been a bit more circumspect about the Policies they instituted. By intent he offers a broad swath of analysis and you can assent or dissent.

    But you have no idea how disparate the reality is between the autoworkers left behind and the multi-generational wealth that resides at the top. Never forget: The Wealthy sign the checks that the rich cash. This will not get better anytime soon. Good luck America.

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