Tag Archives: economics

A Good First Step

Posted on by
Reply

The Obama administration is considering providing an emergency aid package to the cash-strapped Kurdistan Regional Government in Iraq after concluding that the KRG’s inability to pay Peshmerga fighters their salaries poses a threat to the US-led campaign against Islamic State, US officials said.

But we need to do two things more: we need actually to send the aid package (money for wages, food, and fuel for the soldiers)—money—rather than just consider it, and we need to ship them arms and provide the training and logistics with which to use them.  We also need to just do it.  Nominally, we’d need Baghdad’s permission for this, but they’re too slow and too much anti-Kurds for this sort of thing to be forced through the Iraqi government.

We also need to help them learn fiscal discipline; although maybe this administration isn’t capable of that.

Tax Dollars

Posted on by
Reply

Yours, and mine, at work. The paper from which the following excerpt was taken (h/t The Wall Street Journal) was funded by the National Science Foundation.

Ice is not just ice. The dominant way Western societies understand it through the science of glaciology is not a neutral representation of nature. The feminist glaciology framework draws attention to those who dominate and frame the production of glaciological knowledge, the gendered discourses of science and knowledge, and the ways in which colonial, military, and geopolitical domination co-constitute glaciological knowledge. Even in a globalized age where the place of women and indigenous people has improved markedly in some parts of the world, masculinist discourses continue to dominate, in subtle and determinative ways. Feminist glaciology advocates for a shift of preoccupations in research, policy, and public perceptions from the physical and seemingly natural, to a broader consideration of “cryoscapes,” the human, and the insights and potentials of alternative ice narratives and folk glaciologies.

The critique and framework outlined here illuminate experiences and narratives that emerged historically but remain potent today. Public discourse on the cryosphere continues to privilege, quite explicitly, manly endeavours and adventures in the field, and those who conduct their science in the manner of masculinist glaciologists and other field scientists of decades and centuries past….

The call for a feminist glaciology is not limited to ice and glaciers, but is a larger intervention into global environmental change (and especially climate change) research and policy.

Those were your tax dollars, and mine. Yeesh.

Another Reason

Posted on by
Reply

…to reduce investments in the PRC: it’s getting harder to get the money back out, this time from foreign exchange controls designed to be limits on how much money in yuan can be exchanged for other currencies, like the US dollar, the British pound, and the Japanese yen.

China’s foreign-exchange regulator in recent months has deployed a new system to monitor individual purchases of foreign funds and has asked banks to reduce foreign-currency transactions. It has summoned bankers to its offices to give guidance and has grilled them when foreign-exchange activity spikes, according to executives at Chinese and foreign lenders.

Nice little bank you got there….

But it’s more than just threats; the government controls are having material impacts on business’ ability to do straight-up cross border business.

A European chemicals manufacturer recently faced delays in Shanghai in obtaining US dollars, threatening its deadline for an overseas licensing payment. The Bank of Tianjin is having trouble getting funds from mainland investors for a planned Hong Kong public stock offering. A water-treatment company struggled to withdraw $2,000 for an engineer to travel to the US.

And

[Hong Kong law firm Harvey Law Corp Managing Partner—Worldwide, Jean Francois] Harvey said a Chinese client is having problems wiring $15 million to a Hong Kong company that for two years has been helping it buy equipment for a South American factory. “There’s no indication that the money will go through,” he said, “and we heard from our client that it was due to restrictions on money transfer.”

It goes on from there.

Stability vs Prosperity and Sovereignty

Posted on by
Reply

It appears that Mark Carney, Bank of England Governor, prefers stability at the expense of British prosperity and national sovereignty. He said last Tuesday that

uncertainty surrounding the outcome of the coming referendum on Britain’s future in Europe is already being felt in financial markets, and that a vote in favor of leaving could cause a short-term hit to the wider economy.

A possible departure represents “the biggest domestic risk to financial stability,” Mr. Carney said, with potential consequences for Britain’s balance of payments with the rest of the world, its housing market, foreign investment and its banks.

“It is a risk to domestic financial stability, and it has some potential to amplify pre-existing risks to financial stability[.]”

Of course things will be turbulent during the transition from EU member, subject to lots of EU regulation that runs contrary to British law or what the Brits would prefer to be British law (things like being required to spend British taxpayer money as benefits to non-citizens and to non-citizen family members not even resident in Great Britain—Prime Minister David Cameron’s tentative agreement with the EU is only a temporary measure).

Don’t want the uncertainty of the outcome of the referendum? Then Carney should get behind the exit and reduce the uncertainty.

What would the British get from leaving the EU? Quite a lot. London’s financial district would be free to operate on free market principles, not EU rules. Great Britain’s tax laws would be set according to what’s good for Brits and British business and for attracting foreign businesses and investment, not according to protecting precious continental jurisdictions from the evils of tax competition. Great Britain’s private enterprises would be free to operate in accordance with British law and not EU regulation.

What would the British lose from leaving the EU? Those impediments. Not much else.

Staying in the EU would provide a strong measure of economic stability; those rules are established and well understood. But that stability is only intermediate; the EU will dissolve in the foreseeable future. The current refugee flow crisis is not the threat, though, for all the press it’s getting. No, the threat is exactly what the British would be avoiding if they succeed in leaving: economic dissolution. That threat was made manifest by the Panic of 2008 and emphasized by the Greek default crisis. These exposed the utterly differing and irreconcilable economic philosophies of the constituent members.

The transition ensuing from that dissolution will be far more destructive than any sneezes from a Brexit in the next couple of years.

The PRC’s Economic Malaise

Posted on by
Reply

Andrew Browne had some thoughts in a recent Wall Street Journal article. PRC’s Premier, Li Keqiang, wanted to do some serious revamping of the nation’s economic structure and deemphasize a massively overbuilt industrial capacity, shifting the economy more toward consumer production and consumer spending. His words—”This is not nail-clipping; it’s like taking a knife to one’s own flesh”—were reminiscent of his predecessor’s actions. Zhu Rongji eliminated 30 million jobs in an actual overhaul attempt in the ’90s.

Thirty million jobs. That sounds like a lot, but with a workforce of roughly 800 million and roughly 95% employment (because, of course), those 30 million represent just 4% of the workers overall. That’s a sharp cut, but as job cuts go during downturns, it’s not that sharp.

But even that much was too much for Li. Or rather for PRC President Xi Jinping.

[H]igh-level economic policy-making and its practical implementation, once the preserve of the State Council headed by the premier, have increasingly fallen into the hands of Communist Party committees led by President Xi Jinping.

And

…Xi’s political preoccupations: to strengthen the party…to root out challenges to the régime, and to avoid social instability that could in any way threaten the party’s hold on power. If that means delaying unpopular economic adjustments, so be it.

“The party’s hold on power:” read that as Xi’s hold on power, say I. And the people of the People’s Republic can go hang.