Comments on: Barack Obama for President

By: justrecently

justrecently — Fri, 26 Sep 2008 13:30:26 +0000

Can´t disagree with you about the – possible – need to make new mistakes, i.e. I can´t tell if leaving the crisis to itself or buying rotten credits is the lesser evil. That said, in the case of a doubt I would leave the crisis to itself. It doesn´t help American bonds or the Dollar that the government starts eating shit. Besides, having their head firmly in the sand (as they had up to now, despite numerous warnings) was Keynesianism, too. It was pretty obvious that the government was going to face this crisis sooner or later. Fair enough that it happens before the presidential elections.
Actually, I think both Germany´s and China´s governments & economies, plus many other countries, were tacit accomplices here. Did we mind an America that kept buying from us, well beyond its means?

By: Hendrik

Hendrik — Fri, 26 Sep 2008 05:04:43 +0000

The US Dollar being the leading world currency they were always able to export their debts as most things are sold in $US.
With the rise of the Euro this is changing.

By: Aremonus

Aremonus — Fri, 26 Sep 2008 04:48:03 +0000

I don’t know anyone who would never go to China except for my grandparents – but they don’t go anywhere that’s more than 10 km away…

Buying the credits is pure keynesianism, that’s true – but I don’t know what would be the best solution here – the mistakes had been made 8 years ago, it’s probably too late to solve them without making new mistakes. The US admins just wanted to prevent the turmoils from spreading to other countries (here Europe would be first in line) and other sectors. Of course they actually can’t afford it.

By: Hendrik

Hendrik — Fri, 26 Sep 2008 02:26:38 +0000

You might have guessed already, I try to explain things by psychology…
but I want to understand the economic viewpoint better. Thanks for the recommendations, I will look into 1 or 2 books.

By: justrecently

justrecently — Thu, 25 Sep 2008 16:51:48 +0000

Book recommendation, Junjie? Hehe, I'd suggest Peter Bofinger see a list here. And some stuff by Stiglitz, maybe. I'll try to get there between xmas and new year. Haven't read much myself recently, and even less about economics...

By: justrecently

justrecently — Thu, 25 Sep 2008 16:42:56 +0000

I’d find it hard to quantify the numbers of economists who favor the current (still rather) supply-sided policies of most OECD countries (Germany included, actually) and those who want to redeploy some more Keynesianism. For sure, the number of those who advocate more of the latter isn’t small. The critical bit is about making sure that deficit-spending is for bad times – not for boom years. That is an aspect of Keynesianism that everyday politicians (especially those who have to stand in free elections) liked and like to ignore.
Then again, if buying rotten credits valued around 700 bn US dollars isn’t driving demand, dunno what would be.
As for Germany, I hope we will get a government that picks up Gerhard Schroeder’s domestic reform policies, and continues Angela Merkel’s foreign policies.
As for China’s economy, I see it this way: history doesn’t simply repeat itself. Some people are becoming rich indeed. But it won’t trickle down – neither within the coastal provinces, nor to the hinterland (which will stay pretty far away from the global economy, with some exceptions like Hunan Province or Chongqing, which are situated along a pretty big river). China will be an ageing society soon – but no society of golden elders.

By: Hendrik

Hendrik — Thu, 25 Sep 2008 14:18:26 +0000

Switzerland vs. Texas, this example is indeed much better indeed. I put some thought into but I can only come up with the idea that these political structures have been built over centuries. As far as I know Switzerland is pretty liberal (correct me if I’m wrong). Here is my idea: The Swiss people are liberal and put the individual’s right above the community’s. That’s why they have a banking law which is pretty private and helps the individual. Now everyone wants to invest there.

In Germany there is some tradition that the individual is stupid and corrupt and therefore the state has to ensure no one avoids tax etc. So Germany has a banking law that helps the state and the police. Who wants to invest there?

So why doesn’t Germany change? People are afraid of change. Small changes are fine, but major changes are rare and peope are scared of them. Many people stick with their job even if it’s so-so. Only few quit and seek for something better. Those are the people who have (financial) success in their live. And the same is true for politics.

Aremonus, You have been in China, right? How many people do You know who would never go to China? I don’t have to look far, here is a quote of my dad: “I would die of hunger in China.” People are seriously scared of change. Countries that have a tradition of good politics have a real advantage.

I need to read a book about economical systems. Any recommendations?

By: Aremonus

Aremonus — Thu, 25 Sep 2008 11:46:08 +0000

In Europe, people used to be very poor and have terrible working circumstances too 100 years ago when we were on China’s level – so that’s a flimsy excuse.
Tourism in Switzerland only produces 4% of the BIP, very few – but financial markets produce around 30% indeed. But why do these companies invest in Swizerland and not in Texas?

A government has a huge influence on the attractiveness of an environment, and this attractiveness makes companies go there and generate wealth. A company always invests where they expect highest benefits – so a goverment should provide this environment – and there we end up at supply-sided economy policy.

Now what Obama does, is certainly good: he stabilizes the country with a less aggressive foreign policy and provides a better environment by educating more people – but to be perfect for me, he’d also have to make a good economy policy.
McCain on the other hand makes a good economy policy – but that’s it already.
I’d probably vote for Obama, too – but nevertheles I want him to prevent american economy from crashing down, as it is important to Europe, especially UK, too. And american economy now is in a terrible condition, as it has high debts and the gov a wide deficit…