The Economics And Politics Of A Currency Union

Ken Rogoff looks at the current eurozone crisis and he examines the economics and politics of a common currency union. The crisis in Europe may have been triggered by the US financial crisis but a strong currency union should be more able to withstand such a shock. He concludes that the common currency union, perhaps with fewer members, will require greater political integration in order to survive.

The Economist Covers A Bet On China's Growth And Raises The Bet

The Economist blog predicted that China's GDP would surpass that of the US by 2018. Michael Pettis, who teaches in China, challenged The Economist to a bet against its prediction. The Economist accepts and raises the bet in this article. There is a lot to learn about China's economy and its growth rate. These two articles on the betting provide lots of insights into China and its economy.

A Bet On China's GDP Growth

Michael Pettis challenged The Economist to a bet on China's GDP Growth. The Economist blog predicted that China's GDP would surpass the US by 2018. Pettis provides his rationale for betting against The Economist in this article.

The Rationale For Incorporating Ecology Into Economics

This link is to a video that makes the case for incorporating ecology into economics. It argues that economies are dependent upon ecology for essential resources necessary for economic output as well as for human well being. An economics that does recognize this dependence risks irrelevance due to resource depletion, which is not considered a cost of production, and the costs of dealing with climate changes and other disruptions to the global commons.

Why The US Should Be Nicer To US Multinational Corporations

In this aricle Laura Tyson, who was the Chair of Bill Clinton.s Council of Economic Advisors, provides a lot of data on US multination corporations who are being criticized for having less identity with their home country. The data tell a mixed story in the aggregate. She concludes that we should worry less about how they might have a negative impact on US competitiveness, and worry more about what we need to do to keep them in the US. Her conclusion seems to support the view that the role of government is to provide a climate that is favorable for the continuing operation of MNC's in the US. In other words, their attachment to their home country is primarily a business decision. We are fortunate that they choose to remain in the US.

Robert Reich Explains Social Darwinism For Obama

Robert Reich liked Obama's speech. In fact, he had pinned the social Darwinism tag on the GOP in an article that I posted before Obama's speech. The added value of this article is that he defines social Darwinism for those who may not be familiar with its origin.

Let it be understood that we cannot go outside of this alternative: Liberty, inequality, survival of the fittest; not-liberty, equality, survival of the unfittest. The former carries society forward and favors all its best members; the latter carries society downwards and favors all its worst members.

It would be difficult to find a better way to justify a plutocracy as a superior social system versus a less hierarchical democratic system. It also gets to the root of conservative ideology. It is basically a defense of social hierarchy. In Ayn Rand's books the social elite have the virtue of competence and creative powers that provide value to those less gifted. They do not provide value to the less gifted because they are altruistic. They do so because it is in their nature to create value. In fact, it was totally consistent with her philosophy to have her hero blow up a building that he had designed when his plans were altered by a less competent architect in "The Fountainhead". The ownership of private property had a junior position in relationship to the creativity of the architect who was the real "owner". Her vision of society was a radical meritocracy. That vision has been translated into defense of plutocracy. Those who make it to the top of the plutocracy have earned their way to the top because they are superior to those who have not done so. The Wall Street trader who sells a worthless security to a less competent customer deserves to be at the top of the heap because of superior intellect. In the real world, however, the plutocrats are those who own or manage property. Architects, scientists, artists and others who live by their intellect and creativity are more often the hired hands of those who own or manage institutions.

The NYT Praises Obama's "Thunderbolt" Speech Against GOP Radicalism

This NYT editorial describes the speech given by Obama yesterday in glowing terms. In the speech he tied his likely opponent in November to the Ryan budget plan which he had praised. The Ryan plan is both deceitful and far too radical for most Americans. Even those in the Tea Party like Medicare. Some of them don't know that it is funded by government, but they will get a lesson during the campaign.
Romney praised the Ryan plan in order to win primary votes from the far-right wing of the GOP. He had a chance in November if he could run as the successful GOP Governor of Massachusetts, but that version of Romney could not win the GOP primary. It will be Obama versus Ryan in November.