All Terrain Thinking

A Compendium of things I think are Important

Economics: It's not just whats' in your wallet

The 2000ss
"...in bringing back the virtues of old-fashioned capitalism, we have brought back some of its vices..."
"key global problem of the final years of the twentieth century: unbalanced wealth and resources, unbalanced demographic trends, and the relationship between them....we are heading into the twenty-first century in a world consisting of the most part of a relatively small number of rich, satiated, demographically stagnant societies and a large number of poverty-stricken, resource-depleted nations whose populations are doubling every twenty five years or less." 

The 1990s was a decade where we ushered in a "new economy"  - or at least that is what the press would have you believe.  It was the decade of fabulous returns on the stock market, suatained economic growth, but there was no inflation.  There was growth without jobs, it was a decade where we became accepting of a growing economy and job losses - structural change.  A terrible decade for Japan turned into a nightmare for a number of its Asian neighbors. The transition in Russia went anything but smoothly, and Europe showed little signs of growth with unemployment rates above the US and job creation much below.  It was a decade where China forced its way onto the politrical landscape.   The budget deficit was not the only deficit that grabbed the headlines in the 1980s.  The rise in the value of the dollar in the first half of the 1980s had a significant impact on the US balance of trade. US exports fell and did not return to 1980 levels until 1986 while imports continued to rise, producing an enormous trade deficit approaching 4 percent of GDP at its peak.  The flip-side of this trade outflow was an inflow of capital to United States which had been a creditor nation in 1980, but by the late 1980s had become the world's largest debtor nation. The flip-side of this trade outflow was an inflow of capital to United States which had been a creditor nation in 1980, but by the late 1980s had become the world's largest debtor nation.

 

Trilemma

 The stage was set for a decade where international issues would rise in importance around the world.  The 1990s was a decade of massive trade deficits and capital flows as barriers to both continued to fall.  It was also an era of new international institutions - NAFTA, the World Trade Organization, and the Euro as well as the decade of the Asian financial crises that prompted a reassessment of some of the thinking behind the globalization process.  In this section we will examine the pattern of trade and capital flows in the decade with special emphasis on the emergence of the Euro and the Asian crisis.

It will be a decade of budget surpluses, at least at the federal level.  May mask a longer term problem - ability to raise funds. 

its the market, stupid.  see this in the recent PJ...

globalization - questions about our ability to dodge the bullet - consensus that we had learned - have we.  Japan and Asia...  

 

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