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2010
01/22/2010
China's Growth: Still for Real
This week, the Chinese government announced that China's economy had expanded by a stronger-than-anticipated 10.7 percent in the last quarter of 2009 and that it had grown 8.7 percent for the entire year. This news, however, was not greeted with relief but with the skepticism that has typically met such news emanating from China in recent years. The Wall Street Journal ran a story on its front page with the headline "China Seeks to Tame Boom, Stirs Growth Fears." Because the news was accompanied by higher inflation, primarily the result of higher food prices, global markets reacted negatively, under the assumption that the government would soon begin to curtail credit extended by banks and would look to cool off the economy before it "overheats." Beijing will almost surely try to curtail promiscuous credit, but only when domestic demand is strong enough to supplant it. And as for food prices, they remain a backdoor way for the government to transfer wealth from the cities (where most of the food is consumed) to the poor rural areas (where most of it is produced).
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01/26/2010
Taking Stock of Our Not-So-Great Recession
As the financial crisis of 2008-2009 slowly passes into history, the first round of autopsies is beginning, with congressional committees looking for culprits, and everyone from business leaders to economists to the proverbial man on the street grappling with answers as to what precisely caused the meltdown. It is now almost cliché to speak of how the so-called “Great Recession” nearly brought down the global financial system—how it was the worst crisis since the Great Depression and how the world has changed dramatically as a result. Clichés can be compact truisms, but in this case, what’s most striking about the world isn’t how much things have changed as a result of the crisis but how little.
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01/15/2010
Google and China: Silicon Valley Is No Longer King
The furor surrounding Google's bombshell announcement that it was contemplating withdrawing from business in China has centered on long-simmering issues of privacy, government control, and censorship. Google, a company whose DNA dictates that it "do no harm," is particularly well-cast in the role of defender of western values of freedom of expression and open access to information against a Chinese system that brooks no political dissent and reserves the right to forcibly prevent certain types of information ranging from political expression to porn.
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