Tuesday, December 06, 2005

A Sleeping Giant?

Call me a pessimist, but I really think our economy is in for some bad news in the next few decades. Here's an interesting article that talks about our trade deficits. Ka, your ancestor's country might own the US sometime in the not-s0-distant future. That Akron guy's blog always has a lot of insightful stuff on the economy. Gorman, what did that Freidman book say about the "global economy"?


  1. I guess a major crash is always possible, and man that would suck... but I don't think we'll ever really see 'depression era' type problems. What was the fallout of Asia's recent crash (late 1990s)? They seem to be doing alright now? We've got too many things to consume... "sarcasm" (i.e. xbox 360s and iTunes Music...).

  2. the last near major stock market crash was in 1987 when the Dow dropped something like 23% in 1 day. Just to put it in perspective at the time he DOW average as around 2500 or roughly 1/4 of what it was today. This crash was the largest since 1929. In good part because of quick decisive action by the Federal Reserve bank the market recoveed 104 points the following day and within a very short term something like a year was trading at all time highs. With a central banking system there is a good amount of control over the monetary supply so when catostropic events like Black Monday in 1987 occur the bank can increase or decrease the liquidity in the market to help ease these pains.

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  4. The Friedman book - "The World Is Flat" is great - I highly, highly recommend it to anyone interested in Globalization and Outsourcing (you read it yet, Eddie?). The basic premise is that recent technological advances and lowered trade barriers have made the world flat. That is, workers (and students) in the U.S. are now competing with workers in India and China who can do the same work (oftentimes better) for much less. He talks about where all this came from, what we need to do to keep up, about the countries that are falling behind and why, etc. It's one of those rare books that actually creates a new framework for looking at the world.

    And not to rekindle yesterday's debate - but the debate over what to do in Iraq is largely over. We're withdrawing soon - not in 6 months like Murtha proposed, but there will be significant withdrawals (to under 100,000 troops) by the election in '06 - Regardless of the situation on the ground (October was the 4th bloodiest month on record) - we'll just declare victory and get out. At least, that's where the rhetoric seems to be going now..