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What is So Difficult About Transforming the Chinese Economy? By Liang Jing Dec 5, 2009 - 5:17:35 PM What is So Difficult About Transforming the Chinese Economy? by Liang Jing Everyone understands that to transform ChinaÂ’s economy, household consumption must increase, but few have real confidence in this strategy. What is so difficult about making over the Chinese economy? Overseas, people say that ChinaÂ’s consumption is inadequate because Chinese people save too much. This is actually a big misunderstanding. Some people save to buy property, to educate their children or in case of illness, but the bigger problem is that...

About 18 months ago, before the financial crisis swamped the news and obscured more basic trends, the summer 2008 edition of The Lord Abbett Review published an article titled, “Seismic Shifts.” Among other things, that piece pointed out how the need for households to deleverage would slow the growth of consumer spending going forward, especially compared with the free-spending ways of the prior 20 years. That discussion also described how the dollar’s long-term, cumulative weakness against almost every other currency would make American industry more competitive on global markets than previously. The confluence of both trends, it concluded, would shift...

Robert Reich: This Is No Time To Worry About Government Debt Joe Weisenthal|Oct. 2, 2009, 7:09 AM | 350 |12 Echoing fellow traveler Paul Krugman, former Clinton cabinet official Robert Reich is banging the drum on spending: Let me say this as clearly and forcefully as I can: The federal government should be spending even more than it already is on roads and bridges and schools and parks and everything else we need. It should make up for cutbacks at the state level, and then some. This is the only way to put Americans back to work. We did it...

China: More Trade Tensions 2 comments by: Michael Pettis September 25, 2009 | about: FXI / PSJ While the G20 leaders make reassuring noises about international trade, I think the risk of rising trade tensions have not abated at all. As I see it, everything depends on whether or not domestic Chinese polices had any role in creating the global imbalances, and if they did, then we are still in the early stages of a difficult process of assigning the costs of the global adjustment through trade. Beijing hates when anyone suggests that Chinese policies were partly at fault for...

Administration economists cited Keynesian models that predicted that the $787 billion stimulus package would increase GDP by enough to create 3.6 million jobs....more modern macroeconomic models predicted only one-sixth of that GDP impact. Consider first the part of the package that consists of government transfers and rebates. The nearby chart reviews income and consumption through July (DPI)--the total amount of income people have left to spend after they pay taxes and receive transfers from the government--jumped. The increase is due to the transfer and rebate payments in the 2009 stimulus package. However, as the chart also shows, there was no...

The Ongoing Chinese Annexation Of The US Consumer Submitted by Tyler Durden on 08/28/2009 09:21 -0500 Recent conversations over the symbiotic relationship between China and the US all end up focusing on three key concepts: - The lopsided trade balance (China exporting and the US importing) - China's willingness to continue investing in US assets even with a declining dollar, a debt load which will likely one day result in a payment moratorium (the banana republic syndrome) and collapsing economic drivers - Who can inflate yet another fiat bubble faster (opinions are split here, although China is conclusively in the...

"They rush about in disorder, anxious slaves of the three M's - the moment, the mode, and the mob. They see too well their want of dignity and fitness, and need a false elegance to hide their galloping consumption..." - Friedrich Nietzsche, Thoughts Out of Season II: The Use & Abuse of History (1874) NOW THE banking crisis is over - "Bernanke stays put, home prices up," as Fox News reports - the career academics who failed to spot and prevent it can get back to fretting about the most macro of tasks: How to rebalance the global economy? The...

Manufacturing employment in the U.S. peaked in June 1979 with 19,553,000 jobs (data here), and by July of this year manufacturing employment had fallen to 11,817,000, the lowest level of manufacturing jobs since April 1941 (see chart above).As a percent of the total labor force, manufacturing employment fell below 9% in July (see chart below), the lowest level in BLS history (back to 1939).

More than a few observers have pointed out that President Obama and the Democrats in Congress seem determined to repeat the errors of the 1970s by returning to inflationary spending, tax increases, auto company bailouts and cuts to the defense budget while coddling dictators who hate America....So it was inevitable that this recycling effort would get around to attempting the most brazen rehabilitation of all: Jimmy Carter was a visionary president!...It was 30 years ago this month that Mr. Carter reached the nadir of his presidency with his famous "malaise" speech in which he criticized the American people for their...

A FAMILY in Michigan has decided to give up modern living to pursue a simpler life on a 40-acre farm. It's a life with more time spent together, though with less money and material comforts. It does not sound like an economic so much as a lifestyle choice. But according to Peggy Noonan, because of the current climate, some have misinterpreted it as reflecting a new widespread trend of economic survivalism. After all, people are buying more supplies to make their own preserves; the first step in a slippery slope that ends with moving to Alaska and living off the...

China’s consumption is a disappearing act Published: April 8 2009 19:46 | Last updated: April 8 2009 19:46 /snip......... There are several factors holding back the Chinese consumer. First, people have for years witnessed the destruction of the “iron rice bowl”, as once-free health and education systems have been dismantled. Now the government is committed rhetorically – and, increasingly, in practice – to rebuilding the social safety net. But it will be years before people trust the state to look after them, and run down their precautionary savings. Second, most Chinese are what Dragonomics, a research firm, calls “survivors”, whose...

Saving Money is Bad for the Economy: Personal Savings Rate Higher, Consumption Slightly Up, Banks get new American Express, and Markets Begging for Money. Posted by mybudget360 in US Dollar, bailout, bankruptcy, banks, budget, credit cards, economy, monetary policy 0 Comments Last month the savings rate hit the 5 percent mark. That makes two months over 4 percent and for the first time in a decade that Americans have actually saved more than 4 percent for two consecutive months. Saved 4 percent of what? Of their personal income. You would think that most people would be saving a little bit...

Banks save while U.S. Consumers are Expected to Spend: The Convoluted Problem of Creating a Debt based Consumption System. I’ve read my fair share of financial books and I am certain that many of you have picked up a book regarding finances. Many times, these introductory books caution the reader that going into massive debt is a sin (or at the very least a hindrance to your financial independence). These books will usually show you the contrast between a dollar saved and compounded over time instead of someone burning that dollar on a trip to Las Vegas. The underlying premise...

The reason that stimulus packages cause a further loss of capital is that their starting point is the consumption of previously produced wealth. That wealth is part of the capital of the business firms that own it. The stimulus programs offer money in exchange for this wealth and capital. But the money they offer does not come from the production of any comparable wealth by the government or those to whom it gives money—wealth which has had to be produced and sold and thus put into the economic system prior to the withdrawal that now takes place. The starting point...

Home Economics of Anxious Times: Dyeing Your Hair in the Kitchen Sink By Ylan Q. Mui Washington Post Staff Writer Thursday, February 26, 2009; A01 The economic downturn is forcing America's households to learn a tough lesson: how to fend for themselves. Sales of starter sewing kits have shot up by 30 percent at Wal-Mart as families forgo the tailor. Landscaping companies have suffered a 7 percent drop in revenue over the past year. Procter & Gamble said that it has noticed more questions from customers about how to dye their hair at home to match salon coloring. The recession...

In their zeal to oppose the lunacy of the so-called "stimulus" plan, many radio talk show hosts and other pundits have fallen into the Keynesian trap. Rather than the politicians spending nearly a trillion dollars, they argue, it would provide much more stimulus if the government gave massive tax cuts. This would "put money back in the pockets of average Americans" and they would go to the mall and "get that money into circulation and boost the economy." Although the instincts behind such arguments are sound, they often betray an underlying Keynesian mindset. By justifying tax cuts on the grounds...

Tuesday, February 17, 2009 "The Worst is Yet to Come"-America undergoing a Permanent CHANGE! Posted Feb 17, 2009 12:53pm EST by Aaron Task in Investing, Recession There's no question the American consumer is hurting in the face of a burst housing bubble, financial market meltdown and rising unemployment. But "the worst is yet to come," according to Howard Davidowitz, chairman of Davidowitz & Associates, who believes American's standard of living is undergoing a "permanent change" - and not for the better as a result of: An $8 trillion negative wealth effect from declining home values. A $10 trillion negative wealth...

An ugly, unrecognizable recession Most of us haven't seen an economic decline like this one before, and as the slowdown gets slower, few will be unaffected. Are you ready for the 'frugal future'? [Related content: stocks, investments, recession, consumer goods, Jon Markman] By Jon Markman MSN Money Feeling frugal? You're not alone -- not by a long shot -- as butchers, bakers and billionaires alike are feeling the credit crisis this month in a way not experienced since at least 1946 or even 1938. It's not just a temporary wave of Scrooginess that's to blame for a retail-sales drop of...

Forecast: A Long, Cold Winter Stephanie Pomboy, Founder and President, MacroMavens By LAWRENCE C. STRAUSS AN INTERVIEW WITH STEPHANIE POMBOY: It will take consumers at least five years -- and probably more -- to recover from this crisis. "LIKE THE BUBBLE IN FINANCIAL ASSETS, THE NEW REAL-ESTATE bubble has its own distinctly disturbing characteristics," Stephanie Pomboy wrote in an April 2002 note titled "The Great Bubble Transfer." The founder and president of MacroMavens was on to something, even if she was early, and she worried about the big buildup of consumer debt fueled by rising home prices. Pomboy, whose Manhattan...

About seven years ago, University of Chicago economists Kerwin Kofi Charles and Erik Hurst were researching the “wealth gap” between black and white Americans when they noticed something striking. African Americans not only had less wealth than whites with similar incomes, they also had significantly more of their assets tied up in cars. The statistic fit a stereotype reinforced by countless bling-filled hip-hop videos: that African Americans spend a lot on cars, clothes, and jewelry—highly visible goods that tell the world the owner has money. But do they really? And, if so, why? The two economists, along with Nikolai Roussanov...

The Value of Drink "Sometimes when I reflect back on all the wine I drink I feel shame Then I look into the glass and think about the workers in the vineyards and all of their hopes and dreams . If I didn't drink this wine, they might be out of work and their dreams would be shattered. Then I say to myself, "It is better that I drink this wine and let their dreams come true than be selfish and worry about my liver." ~ Jack Handy WARNING: The consumption of alcohol may leave you wondering what the hell...

Russia calls for sturgeon fishing ban in CaspianRussia on Thursday proposed that Caspian Sea states impose a five-year ban on fishing for sturgeon, prized for its caviar eggs, to save stocks from collapse, a spokesman for the fisheries agency said. "We are ready to announce a moratorium," said spokesman Alexander Savelyev, adding that Russia would formally propose the ban to the other four Caspian Sea states of Azerbaijan, Iran, Kazakhstan and Turkmenistan soon. "This is because the sturgeon is about to disappear," said Savelyev, adding that Russia was not able to fish its annual quota of 50 tonnes of sturgeon...

Congregation of the Church of the Holy Organic, let us buy. Let us buy Anna Sova Luxury Organics Turkish towels, 900 grams per square meter, $58 apiece. Let us buy the eco-friendly 600-thread-count bed sheets, milled in Switzerland with U.S. cotton, $570 for queen-size. Let us purge our closets of those sinful synthetics, purify ourselves in the flame of the soy candle at the altar of the immaculate Earth Weave rug, and let us buy, buy, buy until we are whipped into a beatific froth of free-range fulfillment. And let us never consider the other organic option -- not buying...

A few years ago, Bill Cosby set off a firestorm with a speech excoriating his fellow African-Americans for, among other things, buying $500 sneakers instead of educational toys for their children. In a recent book, Come On People, he repeats his argument that black Americans spend too much money on designer clothes and fancy cars, and don't invest sufficiently in their futures. Many in the black community have been critical of Cosby for blaming poor people rather than poor public policies. Others have defended Cosby's comments as an honest expression of uncomfortable truths. But notably absent from the Cosby affair...

It might not come as a surprise to learn that the cars Britons own are smaller than the cars Americans drive or that Swedes favour safe, politically correct SAAB's and Volvo's. But there's more to be said. To begin with: WHO'S RICH, WHO'S NOT? - Swedes claim they enjoy the highest standard of living in the world and they also say poverty, in absolute terms, is extinct in their country. The income distribution is known for being extremely even. If this really is true, how is it reflected in Swedish car consumption? Furthermore, for the first time since the 19th...

No Need For Reduced Alcohol Consumption In Later Life, Study Suggests ScienceDaily (Dec. 20, 2007) — Provided they stick to the same guidelines about alcohol consumption as younger adults, regular moderate drinking poses no additional risks to the over 65s, and may even bring health benefits, according to two studies from the Peninsula Medical School in the South West of England. Researchers assessed the drinking levels of over 13,000 older people in England and the US and looked at the effects on physical disability, mortality, cognitive function, depression, and well-being. They concluded that moderate drinking is fine for the over...

Norway has more millionaires, measured in US dollars, than any other country in the world in terms of its size.

A group of local politicians from Sollefteå in northern Sweden have lodged a complaint to the Swedish Consumer Agency (Konsumentverket) after viewing an advert that promotes shopping. The three-member consumer delegation - consisting of Micael Melander from the Social Democrats, Tonny Molander of the Greens and Left Party representative Niklas Lind - discussed the advertisement for clothing chain Kapp-Ahl at a meeting on March 23rd. Related Articles Job prospects undone by girlfriend's blog 26th April 2007 Male witch threatened to kill flatmates 25th April 2007 New Miss Sweden risks disqualification 24th April 2007 Article Options Send to a friend Printable...

WASHINGTON - In his first State of the Union address to a Democratic-controlled Congress, President Bush is calling for Americans to slash gasoline consumption by up to 20 percent by 2017. Bush envisions the goal being achieved primarily through a sharp escalation in the amount of ethanol and other alternative fuels that the federal government mandates must be produced. The rest of the fuel use reduction is to come from raising fuel economy standards for passenger cars, Joel Kaplan, White House deputy chief of staff, told reporters in a briefing before Bush's Tuesday night speech to a joint session of...

Some people claim the iPod index tells you more about the economic situation of different countries than the Burger Index or GDP/capita statistics, in fact, some will even tell you it says more about this issue than any other stats available. Anyhow, In this case, what could one possibly make out of the compilation featured in the article below? What does the economies of Brazil, India and Sweden (my home country) have in common? I've heard of research reporting that Sweden is poorer than Mississippi (at least an internet profile like Instapundit - perhaps not the most frequent visitor to...

The article, from one of the world's leading newspapers, touches on what a blessing saying "hasta la vista" to socialism really can be - not to mention future prospects! Ask the people who live in the hottest city of Europe - and they don't speak "cockney" or french with a Paris accent. The fall of Communism in Russia and China in combination with the orientation towards pro-capitalism of Scandinavia has already lead to a explosion of trade between the world's 14th biggest economy, Russia, the world's 4th biggest economy, China and the 8th biggest one, the Scandinavian countries (Source: IMF...

Bottom trawling destroys deep sea lifeNew York: A long-awaited report by the United Nations shows the need for an international moratorium on bottom-trawling and other destructive fishing practices that damage deep sea life, Conservation International (CI) said. The U.N. Division for Ocean Affairs and Law of the Sea (DOALOS) reviewed measures to protect the vulnerable deep oceans of the high seas -- the 64 percent of ocean that lies beyond the national jurisdictions of any individual nation. Its review, ordered by the U.N. General Assembly in 2004, was based on reports from member states on steps taken to stop destructive...

Time to Remove Barriers to Boosting Oil Refining Capacity by Ben LiebermanPosted Jul 27, 2006The high price of oil is the main reason that the price of gasoline has nearly doubled over the last three years, but it is not the only reason. The cost of turning oil into gasoline has also risen, thanks in part to costly federal regulations on refinery operations and expansions. Many in Congress are aware of this problem, and the House recently passed the Refinery Permit Process Schedule Act (H.R. 5254) to address it. This very modest measure would streamline refinery-related regulations and would be...

The Office of Tax Analysis of the U. S. Department of the Treasury has performed an analysis of the recommendations of the president's commission on fundamental tax reform. The report details findings of OTA regarding each of the two reform proposals by the commission, plus analysis of a third option: a personal consumption tax (PCT). Which plan produces the highest growth in capital and in income? The PCT, of course. This study uses dynamic scoring, which is good. But the study would have been even better if it had analysed the Fair Tax, which has substantial support in Congress, particularly...

Denny Klein thinks he has found a new commercial use for hydrogen technology. Working in a small, two-room shop at the Airport Business Center, Klein, 63, said he has developed a gas that speeds welding and fusing times and improves automobile fuel efficiency 30 percent. Although the technology Klein uses -- electrolysis -- has been around for decades, he said it's the form of gas that comes out of his electrolyzer and the characteristics of the gas that set his hydrogen technology apart. Klein's gas is two parts hydrogen and one part oxygen. Sound familiar? Yep, it's water. Electrolysis is...

The hydrogen economy is closer than we think. At least, that's the image portrayed by this TV news report from FOX 26 (as far as I can tell, the report aired last year, and I'm not sure which city this FOX 26 is in. For our purposes, these details don't really matter). The report focuses on Denny Klein, president of Hydrogen Technology Applications, and his water-powered car. There is some impressive imagery at work in the piece. Seeing someone pour water into an engine and getting energy out of it is pretty amazing. And slicing through metal with a water-based...

I would challenge you democtatic underground lurkers (or a freeper with a DU account) to post this over there and see what sort of repsonses come from the left... I keep hearing how oil dependent we are and how higher consumption is driving up prices... I hear how it is adversely affecting 75% of americans, It seems like if that was the case, 75% of americans would cut the amount they use! I know I cant be the only person in america that has drastically cut the amount of fuel I use over the past year. I want to know...

People have been nagging me about my wasteful oil consumption for 30 years. I didn't pay much attention. I love my Mustang convertible. I was the kind of guy who, hearing President Bush tout the virtues of ethanol and decry America's "addiction" to oil in the State of the Union speech, would dismiss it as empty rhetoric. Except, recently, I was stopped in my tracks by a message on an airport billboard. "The world consumes two barrels of oil for every barrel discovered," it said. "So is this something you should be worried about?" The question was a grabber. But...

IN an effort to capitalize on the megadollars that megayachts can bring to a harbor area, coastal resorts around the globe are racing to build or retrofit their marinas to accommodate the colossal cruisers. [. . .] . . . new marinas . . . are being developed . . . To keep megayacht owners busy - not to mention spending - while their boats are parked at the marina, developers are surrounding their ports with high-end restaurants and retail shops. To entice yacht owners and their entourages to stay longer, they are also building luxury condominiums and five-star hotels....

Make no mistake about it, the Voluntary Human Extinction Movement isn't anti-child, it's more like anti-human. The VHE is dedicated to phasing out the human race in the interest of the health of the Earth, founder Les Knight told Wednesday's San Francisco Chronicle. With 16,000 people born per hour and a current global population of 6.5 billion, there are already more than enough people on the planet, Knight said. A 1994 study concluded a single person born in the 1990s would be responsible during a lifetime for 22 million pounds of liquid waste and 2.2 million pounds each of solid...

New research by a Canadian university has brought previously unknown parts of the world's oceans into focus and is raising new concerns about the global decline of big species. The study, released yesterday by the journal Science, found that the ocean contains a small number of "hot spots" where marine life concentrates and where stocks are declining dramatically. But the finding has also opened a new window of hope because it points to a few key areas, in a vast, featureless ocean, where conservation efforts could be targeted for maximum effect. By looking at 50 years of international fishing data...

Holy Cow! I believe that this is the first time other than on Boortz that I have heard an actual DISCUSSION of the Fair Tax on the air!

"A system of conservation based solely on economic self-interest is hopelessly lopsided. It tends to ignore, and thus eventually eliminate, many elements in the land community that lack commercial value, but that are (as far as we know) essential to its healthy functioning." - Aldo Leopold Economic growth is an increase in the production and consumption of goods and services and is a function of population and consumption, per capita. Economists measure growth by assessing a country's gross domestic product, the annual sum of goods and services produced and purchased in the nation, or by gross national product, which is...

Does crude oil above $50 have you scared? The conventional wisdom is that prices like these are recession-makers, but so far it hasn't been true. Motorists just keep pumping the gas and buying up a storm at Wal-Mart, too — and the economy keeps pumping along. But what's really scary is the nightmare vision of oil trading at even higher prices. There's no shortage of doomsday peddlers out there talking about $100 oil. But remember, when the NASDAQ was at 5,000 almost exactly five years ago, there were plenty of people who said it was headed to 10,000. Today's oil...

HONG KONG - A notable feature of 2004 was the volatility in oil prices - New York light sweet crude prices reached a peak of US$55.67 on October 25, ending the year up 33.6% at $43.45 per barrel. While a number of supply-side and supply-chain factors have contributed to this situation, the most significant long-term factor contributing to rising oil prices is an increase in Asian demand, most notably from China. China's unprecedented growth not only makes it a driver of a long-term increase in energy prices, but also the most vulnerable to rising oil prices. China, which has been...

China has "eclipsed" the US as a consumer nation China has overtaken the US in the consumption of basic agricultural and industrial goods, a new survey says. China, with its 1.3bn population and booming economy, is now the world's biggest consumer of grain, meat, coal and steel. China is well ahead of the US in the consumption of goods such as television sets, refrigerators and mobile phones. The Washington-based Earth Policy Institute said China was now an emerging economic superpower. However, per capita consumption in China - the world's most populous country - remains far below that of the US....

WASHINGTON — President Bush's tax reform panel listened Wednesday to the pros and cons of taxing money earned or money spent, leading one member to say that a hybrid should be considered. "It has merit," said John Breaux, a former senator from Louisiana and the panel's Democratic vice chairman.

Not long ago, Republicans were trying to pass a balanced budget amendment to the Constitution. Their worry was that large deficits would hamper growth and prosperity. At the same time, Alan Greenspan, Chairman of the Federal Reserve, preached deficit reduction too. He saw it as the solution not only to the country’s economic downturn, but also to its more long-term economic problems. Meanwhile, Democrats were skeptical. They believed that deficit spending had brought the country out of the Great Depression, and Democratic economists were overwhelming Keynesians. As such, they feared that raising taxes and lowering government expenditures to try to...

I happened to be in the dentist's office today, and read this article (isn't it great how you can review news over the past 3-4 months with the magazines in a doctor or dentist's waiting room)? Anyhow, I thought this article was good. It was originally in Fortune magazine; I found the document in PDF form (the link above) with Google. There are a lot of reasons that reducing oil consumption is a good idea. Beyond the simple fact that there are an increasing number of projections that indicate peak oil production will happen in 20-40 years (with pessimists even...

GENEVA — People are plundering the world's resources at a pace that outstrips the planet's capacity to sustain life, the environmental group WWF said Thursday. In its regular "Living Planet Report," the World Wide Fund for Nature said humans currently consume 20 percent more natural resources than the Earth can produce. Consumption of fossil fuels such as coal, gas, and oil increased by almost 700 percent between 1961 and 2001, it said. But the planet is unable to move as fast to absorb the resulting carbon-dioxide emissions that degrade the Earth's protective ozone layer. "We are spending nature's capital faster...