Lessons from Singapore

The Singapore Model of Economic Governance

http://www.nytimes.com/2011/01/30/opinion/30friedman.html

Singapore’s approach to workforce training:

Tom Friedman makes an interesting point on how Singapore deals with challenges of providing its workforce the necessary skills to compete in the global economy:

“Singapore probably has the freest market in the world; it doesn’t believe in import tariffs, minimum wages or unemployment insurance. But it believes regulators need to make sure markets work properly — because they can’t on their own — and it subsidizes homeownership and education to give everyone a foundation to become self-reliant. Singapore copied the German model that strives to put everyone who graduates from high school on a track for higher education, but only about 40 percent go to universities. Others are tracked to polytechnics or vocational institutes, so the vast majority graduate with the skills to get a job, whether it be as a plumber or a scientist.”– Tom Friedman

My take:

A multi-pronged approach is something that the US should consider. Waiting for some new and miraculous innovation to save the day (see Tyler Cowen’s piece) or expecting every high school senior to go to college and graduate with the requisite skills for the future appears to be a rather inchoate strategy for the world’s sole superpower. It would make sense to be more broad minded in preparing high school students to face the job market of the future.

Japanese Blues

Japan Blocks the Young, Stifling the Economy
http://www.nytimes.com/2011/01/28/world/asia/28generation.html

S.&P. Downgrades Japan as Debt Concerns Spread
http://www.nytimes.com/2011/01/28/business/global/28yen.html

The 'Tiger Mom' Debate

“The Tiger Mom” Debate

http://www.time.com/time/printout/0,8816,2043313,00.html

Interview with Amy Chua

http://healthland.time.com/2011/01/11/chinese-vs-western-mothers-q-a-with-amy-chua/

An Indian Perspective on the Debate:

http://blogs.wsj.com/indiarealtime/2011/01/27/india-journal-what-drives-tiger-mothers/tab/print/

Sovereign Debt Woes

Japan credit rating is downgraded. Who is next?

http://dealbook.nytimes.com/2011/01/26/as-europe-toils-on-debt-u-s-and-japan-watch-nervously/


The CBO predicts that US federal budget deficit for FY 2011 is likely to approach $1.5 trillion
http://cbo.gov/ftpdocs/120xx/doc12039/SummaryforWeb.pdf




See earlier post  as well

The Official Report on the US Financial Crisis

Everything (well almost) you ever needed to know on the financial crisis – the 662 page report from the Financial Crisis Inquiry Commission is now available to the public:
http://fcic.gov/report

Roubini on Global Economic Conditions

Job Search Process for New Grads

PBS's Paul Solman investigates the challenges college grads face in landing a job:

FT Interview with the new Dean of Harvard Business School

The new Dean of HBS offers some interesting insights on business education in the 21st Century.
http://www.ft.com/cms/s/2/ab936364-257e-11e0-8258-00144feab49a.html#axzz1BxWSWDiL

Useful Readings on Income Inequality

Cover Story from Next Week's Economist:
The rich and the rest
http://www.economist.com/node/17959590

Unbottled Gini
http://www.economist.com/node/17957381

The beautiful and the damned
http://www.economist.com/node/17957107


The Inequality That Matters by Tyler Cowen
http://www.the-american-interest.com/article-bd.cfm?piece=907

The Rise of the New Global Elite by Chrystia Freeland
http://www.theatlantic.com/magazine/archive/2011/01/the-rise-of-the-new-global-elite/8343/

Striking it Richer: The Evolution of Top Incomes in the United States by Emmanuel Saez
http://www.econ.berkeley.edu/~saez/saez-UStopincomes-2008.pdf

"Building a Better America—One Wealth Quintile at a Time” by Norton, Michael I., and Dan Ariely.
http://www.people.hbs.edu/mnorton/norton%20ariely%20in%20press.pdf

A Few Bright Spots for the US Economy

US Manufacturing Rebounds

http://online.wsj.com/article/SB10001424052748704029704576088412618821224.html

While the sector performance improves, job creation may not reach impressive levels, as the WSJ article notes:

“Despite the upbeat forecasts, job growth may remain modest because many companies are finding ways to increase production through greater efficiency and automation, without adding many workers. In the third quarter, U.S. manufacturing productivity increased as output rose 7.1% from a year earlier and hours worked grew just 3%.”

US Farm Sector Booms as Global Commodity Prices Skyrocket

http://www.bloomberg.com/news/2011-01-19/commodity-boom-signals-u-s-accelerating-with-corporate-america-benefiting.html

Doing Business in China

GE and the sharing of advanced jet technology

http://www.nytimes.com/2011/01/18/business/global/18plane.html

Meanwhile, Washington Post also has an interesting story on challenges faced by US firms doing business in China:

http://www.washingtonpost.com/wp-dyn/content/article/2011/01/17/AR2011011702588.html

An interesting take on the Renminbi undervaluation question:
http://www.nytimes.com/2011/01/18/opinion/18wu.html

My Take:

Interesting issues that need to be considered in the current news media frenzy regarding China’s attempts to “catch up” technologically with the advanced economies:

A. China can try to cajole companies to share technology by having US, German, Japanese, French and S. Korean companies compete against each other and try to bargain for the best offer. A good response from multinationals from advanced economies would be to not put so many eggs in the China basket. There are several other emerging markets that over time will offer huge benefits and strengthening these economies (especially India and Brazil) will create a counterweight to China.

B. China is taking an economically rational approach by trying to catch-up via technology transfer agreements. It makes very little sense to re-invent the wheel every time you need to make a bicycle.  

C. As far as I am aware, China did not sign any agreements that stated that it would be a low cost, low technology manufacturing based economy for the rest of history. Also, I am not sure that Boeing and Airbus have monopoly/duopoly rights for large commercial aircraft manufacturing for the rest of the 21^st century.

D. It is also worth noting the history of the rise of the US economy - not exactly a story of just pure creativity and domestic inventions (a great book to read on this topic - A Nation of Counterfeiters: Capitalists, Con Men, and the Making of the United States by Stephen Mihm)

When Will China's Economy Become the World's Largest?

Relatedly, see this post by A. Subramanian:
http://www.iie.com/realtime/?p=1935

US-China Trade Imbalances

Arvind Subramanian of the Peterson Institute for International Economics offers an excellent historical perspective on trade imbalances involving China and argues for the need for greater sensitivity on the part of the US:

http://www.iie.com/publications/opeds/print.cfm?researchid=1744&doc=pub

WSJ Interview with Ian Bremmer

Ian Bremmer Discusses China’s Rise as a Military and Economic Power

Krugman - A Eurosceptic

Paul Krugman on the Euro:

http://www.nytimes.com/2011/01/16/magazine/16Europe-t.html

“The tragedy of the Euromess is that the creation of the euro was supposed to be the finest moment in a grand and noble undertaking: the generations-long effort to bring peace, democracy and shared prosperity to a once and frequently war-torn continent. But the architects of the euro, caught up in their project’s sweep and romance, chose to ignore the mundane difficulties a shared currency would predictably encounter — to ignore warnings, which were issued right from the beginning, that Europe lacked the institutions needed to make a common currency workable. Instead, they engaged in magical thinking, acting as if the nobility of their mission transcended such concerns.”

India – An Ornithologists Paradise?

http://www.nytimes.com/2011/01/16/travel/16India.html

http://www.nytimes.com/slideshow/2011/01/16/travel/20110116COVER.html

http://www.nytimes.com/slideshow/2011/01/13/travel/20110116-INDIABIRDS.html