Rise of the Emerging Markets

Excellent Data from The Economist
http://www.economist.com/blogs/dailychart/2011/08/emerging-vs-developed-economies

Related Article:
http://www.economist.com/node/21525373

The Onion Takes on Bernanke

Very funny satirical piece from the Onion ... interestingly, the brief snippets of economic wisdom stated by the 'drunk Bernanke' character is actually right on the money:

http://www.theonion.com/articles/drunken-ben-bernanke-tells-everyone-at-neighborhoo%2C21059/

What Ails the US Economy?

An interesting article by WSJ’s David Wessel discusses the following diagnosis put forth by NYU economist Paul Romer:

“Two big sectors of the U.S. economy have been on steroids: finance and health care. If anything is crowding out more productive activities, it's them, as Mr. Romer argued in a recent National Academy of Sciences lecture.

The bloated financial sector—all those brains lured by big bucks who might otherwise have been employed in science, software, engineering or other fields—has harmed the U.S. economy more than any of our post-World War II communist adversaries did.

The American health system costs more per person than any other, but isn't delivering the world's healthiest people. The U.S. isn't getting its money's worth from either sector.

Why have they grown so big? Mr. Romer has a theory: Profit-seeking players in finance and health care have captured Congress, resisted regulation that would curb their excesses and exploited antiquated rules and policy for private gain.”


Paul Romer's full lecture (referenced in the WSJ article) can be viewed here:
http://fednet.net/nas051011/

AAA Ratings in the Business World

Only 4 companies in the S&P 500 have AAA rating:
Automatic Data Processing, Exxon Mobil, Johnson & Johnson and Microsoft

http://www.nytimes.com/interactive/2011/08/03/business/20110803-for-big-companies-little-allure-in-aaa-ratings.html

Technology and Jobs - Even China Can't Escape Robots

Foxconn (aka Hon Hai) is planning to widely introduce robots in its manufacturing facilities.  Even one of the world's largest contract manufacturers, and one of China's biggest employers, finds it necessary to replace workers with robots to stay competitive. As noted previously, technology and productivity improvements are the most important factors behind job market developments.

This piece from The Economist provides a nice summary of Foxconn's plans:
http://www.economist.com/blogs/schumpeter/2011/08/foxconn
According to the article:
"To pacify its increasingly restive workers, Foxconn has repeatedly bumped up their wages, improved facilities, provided counselling and swathed its factories with nets to catch anyone leaping from a window. All this has resulted in higher costs, and signs that the company’s hitherto hugely successful business model has run its course. At a closed retreat in late July, Terry Gou, the chief executive of the company (which is also known as Hon Hai) unveiled a plan to replace a huge amount of human labour with robots by 2013."

Hayek vs. Keynes

A brief yet informative introduction to Keynesian vs. Hayekian economic visions
http://www.bbc.co.uk/news/business-14366054

Promulgating Hayek's viewpoint, Prof. Selgin notes:

"The economy is like a drunk throwing up the morning after the night before. 
It is disgorging itself - or trying to disgorge itself - of bad investments it was tempted to undertake largely because of easy money. 
Giving it still more money will not prevent the inevitable suffering."

Debt Ceiling Agreement

A flow chart explaining the proposed agreement to extend the debt ceiling:
http://www.nytimes.com/interactive/2011/07/22/us/politics/20110722-comparing-deficit-reduction-plans.html

The pact appears rather convoluted ... only a political scientist will love this deal.