Authoritarian governments are winning

From Brad Setser's blog.

I've said before now that 2003 was the year the UK and USA blew it, with reckless credit expansion.

The US owes China a trillion dollars - Setser

"... China’s government already plays a significant role in determining the allocation of credit inside the US economy, not just the allocation of credit inside China’s economy..."

Brad Setser (htp: Jesse's Cafe Americain)

Setser reported to Congress a year ago on the USa's vulnerability to foreign creditors and investors. See my blog here and here.

Down

Mish reckons there will be - is - a global slowdown and credit contraction, savings will increase, and bond yields and interest rates will reduce.

Liberal economics and the Panama Canal: hope?

Read the following article from four years ago by Beth King in Innovations Report, as an analogy with globalization. Do you think it works?

The Panama Canal as a natural biological invasion experiment

Invasive species may cause severe economic losses. Thus the hot debate regarding the ecological mechanisms determining the outcome of biological invasions is of equal interest to scientific and business communities. Do invaders bump residents out by competing with them for scarce resources, or do they merely move in without causing harm to their neighbors?

In one of the first environmental impact studies ever, the Smithsonian Institution’s 1910 Panama Biological Survey provided baseline data for Panama Canal construction, a project creating the largest man-made lake in existence at the time. The Canal, completed in 1914, rerouted the Chagres River on Panama’s Atlantic slope into the Pacific Ocean--connecting watersheds across the continental divide. Since then, fish from the Atlantic and Pacific sides of Panama have intermingled, but the mix has not resulted in extinction of fish in tributaries on either slope according to new research published in the Proceedings of the Royal Society of London (online) by Scott Smith and Graham Bell of Canada’s McGill University and Eldredge Bermingham, Staff Scientist at the Smithsonian Tropical Research Institute in Panama.

At the beginning of the 20th Century, concern about human-induced environmental change was already on the agenda. Faced with the immanent flooding of 500 square kilometers of lowland tropical forest in Panama, the Panamanian government authorized the Smithsonian Institution to conduct the Panama Biological Survey (1910-1912), an extensive biological census of the region to be covered by Lake Gatun, the Panama Canal waterway.

The U.S. Bureau of Fisheries assigned Seth E. Meek from the Chicago Field Museum of Natural History and Samuel F. Hildebrand, his assistant, to census the fish fauna of the Canal area. They made lists of fish in the Chagres River on the Atlantic slope and in the Rio Grande, on the Pacific slope, rivers that would become part of the Canal waterway, a new freshwater corridor between two oceans.

It did not take long for fish to move from Atlantic to Pacific slopes and vice versa. When Hildebrand returned to Panama in the 1930’s many species had already moved into streams on the opposite slope.

In 2002, the authors of the new report returned to the Chagres and the Rio Grande to collect fish. In total, they found that three fish species had colonized the Chagres River and five had colonized the Rio Grande. Both sides of the Isthmus became more species rich as a result of the Canal connection. All of the original species found in each stream in Meek and Hildebrand’s initial, 1916 survey, are still there.

This is a significant contribution to our understanding of biological invasion because it shows that dispersal played a more significant role than local ecological interactions in the structure of the fish communities in these two rivers, even after many generations in this great natural experiment.

If at first you don't succeed - give up.

Think tank Policy Exchange has stirred up a hornet's nest with the suggestion that people in poorer Northern areas should quit backing a loser and head for the South-East, or the Golden Triangle.

Or the Golden Circle:


Isn't this the rational, liberal-economic thing to do? Or is mankind something more than a calculation in money terms? Is there any one measure for Man?

Are liberal economists rational? Do they describe the world as it is, or as they think it should be? Would it be dangerous for us to follow their prescriptions, if others elsewhere took a different view?

An after-thought: would it not be more rational to head for Scotland? Free tertiary education, more money spent on care for the elderly, etc?

Are the poor too rich?

I read a piece in Cafe Hayek a while back, lamenting the rise in the US minimum wage. I left a short quotation: "Qu'ils mangent de la brioche."

I didn't expect much response, even though Americans owe one of their most famous symbols and (in part) their very Revolutionary victory to the French. But I had a glance at the comment thread this morning and there was indeed a riposte:

"Jonah Golberg wrote a really good editorial on this about four years back. Good stuff and good Economics & History lesson, too!"

Can the realtor (estate agent) who posted this, and the salaried economics professor who hosted it, be right? Are the working American poor really so feather-bedded by their £3-something per hour earnings? Does anyone have a different Economics & History lesson?

Does even the slightest concern for the poor make me (the son of a refugee from the murderous ravages of the Red Army in East Prussia) a no-good pinko Commie son-of-a-gun?

I shall read my newly-acquired Sloman's "Essentials of Economics" and then I'll know the answer.

What is inflation?

One answer is to look at alternative currencies. Here's an FT article, originally from 1983, on the Mars Bar Index. Any more detailed updates?

Dearieme says "Mars Bars were 99p per pack of five in our Co-op recently. Bargain!" Is this proof of deflation?