Business/Economics Links (16 June 2009)

Advertising is Good for You:
How restaurants get you to spend more


Angry Bear:
Context for Trade Deficit

Trade Deficits Resume Upward Climb


Crooks & Liars:
President Promises 600K New Jobs This Summer

Report: The Employed Are Hurting, Too. Meanwhile, Heritage Foundation Blames Unemployment Checks for Unemployment.


Dilbert:
"Dogbert the Pirate." ("That's a different business model." Hah!)

"Job Interview"

"Pretend you don't know that."

"Dogbert the CEO"


Econbrowser:
The Dollar as a Reserve Currency: Apres le Deluge

Do you see what I see? ("I'm still looking for, and still not seeing, the economic recovery that everybody is talking about.")

How Important Is China to World Growth?


Economist's View:
Chinese Manufacturers Accused of Predatory Pricing in India

"Cultural Authenticity and the Market" (This was slightly off the beaten track for Thoma, but if you have any interest in archeology, you might find this post of interest.)

Rogoff: Rebalancing the US-China Economic Relationship

Fed Watch: Rate Hike? ("Seriously, a rate hike in this environment? Or anytime before the end of 2009? At the moment, I just can't see it happening. That said, long rate are higher, and inflation expectations in some corners of the market are rising. What is going on?")

2009 Reith Lectures: Markets and Morals ("After my piece ran, The Times was flooded with scathing letters - mostly from economists (LAUGHTER), some from my own university. I utterly failed to understand the virtue of markets, they said, or the efficiencies of trade, or even the most elementary principles of economic rationality. Amidst the torrent of criticism, I did receive a sympathetic email from my old college Economics Professor. He understood the point I was trying to make, he wrote, but could he ask a small favor: would I mind not publicly revealing the identity of the person who had taught me Economics? (LAUGHTER)")


Robert Reich:
The Great Debt Scare: Why Has It Returned?


The Bonddad Blog:
Volcker on Recovery

Flow Of Funds Charts, Part I ("Consider the following charts from the Flow of Funds. Then ask yourself, will the consumer be able to lead us out of recession?")

Consumer Confidence Up

Is the Debt Binge Over?

More Signs of Bottoming

It's Looking Like a Jobless Recovery ("Right now there is no reason to hire -- and there won't be for awhile." This is not a surprise.)

On Global Cities

The following appeared in ShanghaiDaily.com. Read the article first; I have some comments down below.

Is there anything negative about a global city?

Sassen: Global cities are two-edged swords. They bring economic dynamics - and that means jobs, life on the streets at night, vibrant restaurants, and so on.

But they do create 20 percent of the population which is extremely prosperous and a risk that they will take over key areas of the city with luxury office buildings, luxury housing and consumption spaces. This displaces smaller shopkeepers, the old modest middle classes. They lose.

My research suggests that ultimately cities are better off being dynamic (and hence global cities) but they do need political and civic leadership to balance out the extreme outcomes that markets left to themselves can produce.

European cities are much better than US cities. New York, the ultimate market town, has the highest share of very rich people and very powerful firms in the US and the highest share (over 20 percent) of officially counted poor ... and, according to the most recent count, over 100,000 homeless. That shows something about matters left to markets.


Will a global city lose its historic identity?

Chen: There is a tendency for cities to lose their historical identities and cultural traditions as economic forces push them to become more important centers in the global arena.

Cities like Mumbai and Dubai are doing what Shanghai is doing. They are all in the same race, running in the same direction, and trying to get to the same destination.

In doing so, these cities tend to lose their distinctive features and identities as they tear down traditional neighborhoods to build modern skyscrapers.

Shanghai has already gone far down this road. But global cities don't have to lose their historical and cultural identities.

In fact, some of Shanghai's traditional features are resilient enough to survive and even thrive in the face of penetrating global economic and cultural forces.

Some of the research I and a Fudan University collaborator have done has demonstrated a mixed local consumer lifestyle that reflects an interesting blend of being conscious of global brands and traditional motives. This will be shown in my work ''Shanghai Rising'' which will be published in Spring 2009.

Saskia Sassen is the Lynd Professor of Sociology and member of The Committee on Global Thought, Columbia University. Chen Xiangming is director of the Center for Urban and Global Studies and professor of Sociology and International Studies at Trinity College, Connecticut.

For most of my life I've lived in large cities (Phoenix, Arizona; Busan, South Korea, and Singapore) although, of the three, I think only Singapore classifies as a "global city." Both Phoenix and Busan try hard to be global cities, but neither succeeds, IMO, especially when compared to their larger neighbors, Los Angeles and Seoul, respectively.

Given the trade-off between vibrancy vs. pollution, I'd go with vibrancy any day. A town or city that cannot provide for its inhabitants economically is not worth living in. Pollution can be a problem, although, ironically, the cities I've lived in didn't have pollution problems so much of their own making, but due to either natural causes or from someone else's making (the winter temperature inversion in Phoenix and the "yellow dust" in Busan, blown in from the Gobi desert; the "haze" in Singapore that blows in from the Sumatran forest fires, where the Indonesians continue to practice slash-and-burn farming; likewise, in Hong Kong, the air pollution that blows in from the Chinese factories in the Pearl River delta).

The problem of the homeless seems to be more of a problem due to high costs of living. Granted, I haven't been to a whole lot of countries, but those countries that I've been to with the worst homeless problems were Japan and the US, both of which have very high costs of living. In Korea, Malaysia and Singapore, where the costs of living are lower, homelessness isn't much of a problem. When Dr. Sassen said, "That shows something about matters left to markets," from my own observations, the problem of homelessness is primarily due to the markets. The markets have priced people out of homes. People aren't able to cope with the high demands made on them by the markets, and they fall by the wayside. Those who think that the markets are the end all and be all, the panacea for every economic problem a society faces, are naive.

As for losing historic identities, I don't think this is much of a problem if local governments keep on top of the issue. Archaeology magazine had a recent article about how people in Beijing have been working to save the residential neighborhoods known as hutongs ("alleyways" flanked by courtyard houses). However, in my three cities, maintaining historic identities hasn't been a problem. The business districts weren't expanding to the point where they threatened older neighborhoods (as in the case of Beijing). However, I do think communities need to balance between creating the best business, industrial and residential facilities available, preserving one's past as best one can, and maintaining the heartlands (as we call the residential neighborhoods here in S'pore) so that all can live affordably.

HT: Economist's View

Movie Sunday - Raiders of the Lost Ark

For this week's Movie Sunday, the choice of movie is a no-brainer: Raiders of the Lost Ark. With the fourth movie being released Thursday (today as I write this) and Milady loving all the "Indy" movies - we've even bought the tickets last weekend - I don't have to use too many neurons to decide which movie to highlight.

(Update: Milady and I caught the movie yesterday (Saturday) afternoon. We were a little surprised at the small crowd; for Ironman you couldn't get tickets for days and days. Yesterday, the theater was less than half full. Still, we both enjoyed the movie. I'd give it 3.5 of 5 stars.)

I first caught this movie as a double feature with Jaws at the Heights Theater, which I'm happy to say is still open. That was the first time I saw both movies for the first time, actually. Talk about a bargain. ;)

BTW, Archaeology magazine has an article on the Legend of the Crystal Skulls in the current issue. As a sidebar article, there's some information about the South American idol that Indiana Jones takes in the first video clip below:

In the opening scenes of Raiders of the Lost Ark (1981), Indiana Jones is hot on the trail of an extremely valuable golden idol created by an unidentified ancient South American culture. The goddess's image, which Jones deftly snatches from an altar (setting off a series of booby traps that culminate with an enormous boulder nearly crushing our hero), is of a woman in the act of giving birth. The golden figure was modeled on a purportedly Aztec greenstone carving called Tlazolteotl, considered to be a masterpiece by the Dumbarton Oaks Museum in Washington, D.C.

In my research into the object's acquisition history, I discovered that a Chinese dealer in Paris sold the figure in 1883 to a famous French mineralogist, Augustin Damour. His friend, Eugene Boban, advised Damour on the purchase. In examining the artifact's iconography, I found that the birthing position is unknown in documented pre-Columbian artifacts or depictions in codices. I have also used scanning electron microscopy to analyze the manufacture of the idol and have found there is ample evidence of the use of modern rotary cutting tools on the object's surface. In my opinion, the Tlazolteotl idol, like the crystal skulls, is a nineteenth-century fake.

Indiana: The Ark of the Covenant, the chest that the Hebrews used to carry around the Ten Commandments.
Major Eaton: What, you mean THE Ten Commandments?
Indiana: Yes, the actual Ten Commandments, the original stone tablets that Moses brought down from Mt. Horeb and smashed, if you believe in that sort of thing...
[the officers stare at him blankly]
Indiana: Didn't any of you guys ever go to Sunday school?

Marion: You're not the man I knew ten years ago.
Indiana: It's not the years, honey, it's the mileage.