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December 31, 2007
Quote of the Day for Monday, December 31, 2007
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December 30, 2007
Quote of the Day for Sunday, December 30, 2007
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December 29, 2007
Quote of the Day for Saturday, December 29, 2007
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December 28, 2007
Quote of the Day for Friday, December 28, 2007
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December 27, 2007
Quote of the Day for Thursday, December 27, 2007
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December 26, 2007
Quote of the Day for Wednesday, December 26, 2007
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December 25, 2007
Quote of the Day for Tuesday, December 25, 2007
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December 24, 2007
Quote of the Day for Monday, December 24, 2007
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December 23, 2007
Quote of the Day for Sunday, December 23, 2007
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December 22, 2007
Quote of the Day for Saturday, December 22, 2007
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December 21, 2007
Quote of the Day for Friday, December 21, 2007
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December 20, 2007
Quote of the Day for Thursday, December 20, 2007
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December 19, 2007
Quote of the Day for Wednesday, December 19, 2007
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December 18, 2007
Quote of the Day for Tuesday, December 18, 2007
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December 17, 2007
Turning Our Back on Globalization Will Extract a Heavy Price
So argues New York Mayor Michael Bloomberg, in a Financial Times editorial:
Posted by John at 4:44 AM | Comments (0) | TrackBackThe US economy has turned downward. People are feeling insecure. There are grave concerns about jobs moving overseas and about losing ground to Asian countries. Heavy pressures are mounting on the presidential candidates in both parties to pander to protectionist and even isolationist sentiments. The year, however, is 1992. Fortunately, the two parties’ candidates – Bill Clinton and George H.W. Bush – refuse to cave in to the pressure. They resist the special interests and stand strong for the long-term health of the American economy – and the country begins one of the greatest economic expansions of our history.
Today, we would do well to remember this lesson. It is easy to say that times have changed and take a more protectionist viewpoint. In fact, times have changed. Dramatic advances in technology and increased global trade are creating enormous economic opportunities, but also challenges. If America is to remain the world’s economic superpower, it must capitalise on the opportunities and confront the challenges. Countries that run away from globalisation in the 21st century – as with those that ran away from capitalism in the 20th century – will pay a heavy price for decades to come. . . .
Chinese and Indian Scientists Welcomed Home with Open Arms
The San Diego Union-Tribune offers an extensive look at the loss of top Chinese and Indian scientists, due to visa problems and more attractive research funding offers from their homelands:
. . . One-fourth of all patents filed in the United States are filed by foreigners, [Vivek] Wadhwa said.
"Those are the people we are sending back home, where they will compete with us," he said.
Returnees are coveted employees because they bring with them the experience of working in U.S. industry.
Yu Liang Huang has the experience on both sides of the Pacific that Chinese companies wanted and U.S. companies are just now growing to appreciate. After pursuing postdoctoral work at Ohio State University, he worked for several years as a consultant to British and U.S. biotechnology companies trying to do business in China and, later, at the now-defunct San Diego bioprocessing company Egen.
Posted by John at 4:22 AM | Comments (0) | TrackBackBut when Huang decided to start his own bioprocessing company, Generon, he did it in his native China.
The company licenses early-stage compounds out of U.S. companies or research institutes or forms strategic partnerships that allow the clinical development of the drug in China. The goal is to complete early clinical testing and then bring the drug back to the lucrative U.S. market.
Labor costs in China are cheaper than in the United States, and the local and central governments of China offer monetary support, help making necessary business connections and assistance in securing licenses and other needed approvals, Huang said.
"It is hard to get to this level in the United States," the 45-year-old CEO said. "So right now we have to enjoy that advantage provided by China, and maybe later we can return to the U.S."
Quote of the Day for Monday, December 17, 2007
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December 16, 2007
Quote of the Day for Sunday, December 16, 2007
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December 15, 2007
Global Funds Flows
Posted by John at 12:04 PM | Comments (0) | TrackBackTotal global remittances from workers to their families will reach $318 billion in 2007, up from $170 billion in 2002. Most of the money goes to developing countries, which will receive $240 billion this year—more than double the value of foreign aid. The three countries getting the most are India, China and Mexico, which together account for nearly a third of remittances to the developing world. However, Mexico has been affected by the economic slowdown in the United States and its previous rapid growth of inflows slowed to a trickle this year. The largest recipient region is Latin America and the Caribbean, but since 2002 transfers to Europe and Central Asia have increased the fastest.
Quote of the Day for Saturday, December 15, 2007
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December 14, 2007
Quote of the Day for Friday, December 14, 2007
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December 13, 2007
Quote of the Day for Thursday, December 13, 2007
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December 12, 2007
Quote of the Day for Wednesday, December 12, 2007
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December 11, 2007
Energy Thristy China
The power generation capacity China added this year equals the United Kingdom's entire electricity grid. [Source: Financial Times]
Posted by John at 5:40 AM | Comments (0) | TrackBackBritain's Answer for Energy Needs is Blowing in the Wind
Britain's energy future is wind; by 2020 Britain wants to generate up to half its electricity needs from wind turbines which would be installed in the North Sea, the Irish Sea, and along the Scottish coast.
The plan received skeptical reactions from analysts and environmentalists, who see the initiative as having a insufficiently return on investment to be feasible. Who knows, though? Over time, with advances in wind power technology, this seemingly aggressive goal may not be such a stretch.
One thing for sure, GE is ready to help.
Posted by John at 4:57 AM | Comments (0) | TrackBackQuote of the Day for Tuesday, December 11, 2007
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December 10, 2007
Vietnam Rising as Attractive Manufacturing Locale
Bloomberg's Andy Mukherjee sees Vietnam gaining on China as a low-cost manufacturing locale:
. . . James Koh, a Singapore businessman, makes dining tables and chairs in Vietnam for customers around the world, including Williams-Sonoma Inc.'s Pottery Barn stores in the U.S.
Koda Ltd., of which Koh is the managing director, also has factories in Malaysia and China. Yet, it's Vietnam's lower costs that are prompting the company to expand capacity here by 25 percent.
"The labor cost in Vietnam is half that of China, while worker productivity is about the same," says Koh. . . .
Read Mukherjee's complete article here.
Posted by John at 3:36 AM | Comments (0) | TrackBackQuote of the Day for Monday, December 10, 2007
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December 9, 2007
Mobile Culture Fact of the Day
Posted by John at 1:04 PM | Comments (0) | TrackBackFor the first time, Japan's fiction bestseller list is dominated by books published, read and, in several cases, written on mobile telephones, mostly by young women in their 20s.. . .
. . . the 2007 bestseller list, published by Japan's biggest book distributor, Tohan, revealed that five of the year's most successful novels, including the top three, were first written for downloading on mobile phones before being republished in book form. [Source: The Australian]
Encouraging the Medellin Makeover
Now that Congress has confirmed a free trade agreement with Panama, it's time to get a similar agreement in place with Colombia. The country has undergone a startling makeover over the last decade or so, and Amity Shlaes sees the change particularly embodied in Medellin:
Medellin came into prominence in the 1980s, when Escobar made it the continent's cocaine capital. In his time and after, gang members ruled. Six Medellin policemen a day turned up dead. The overall death rate was 350 per 100,000, or 10 times that of the most dangerous U.S. cities, such as Baltimore. Kidnapping and gang wars devastated all other activity, such as the textile industry, or the construction of roads and sewers.
Locals who lived in the hillside shacks of the Santo Domingo section might want to walk to a job in the valley. But to do that they had to spend two hours picking their way down a rubble-strewn incline.
President Bill Clinton and lawmakers from both parties began to alter this picture when they passed a law to fund Colombia's demilitarization. Colombians did their part by electing Uribe president in 2002. Uribe demobilized tens of thousands of gangsters, persuading them to hand in their guns, confess to crimes and gave them stipends to begin civilian lives.
Medellin contributed by choosing a reforming mayor, a mathematician with a doctorate from the University of Wisconsin named Sergio Fajardo. Fajardo worked hour by hour with police to recapture the city. He built libraries to show that gangs weren't the only ones who could help communities. Fajardo also found an ingenious way to transport the stranded hillside citizens -- by ski lift. Today gondolas carrying eight passengers each sway up and down the hill on a wire -- a commuter hypotenuse that changes the urban profile.
Fajardo says funding the concrete-and-wire Metrocable wasn't so hard: ``It's remarkable how much money there is to spend when you don't keep it for yourself and your friends.''
The result of it all is that murders in Medellin dropped. At 29 per 100,000, the city's homicide rate is lower than Baltimore's. New peace allowed legitimate businesses, such as fresh flowers and textiles, to expand in Medellin. . . .
We need to affirm this change by getting a trade agreement in place with Colombia. As Shlaes rightly observes, this makeover is a work in progress and a permanent state of affairs.
Posted by John at 12:36 PM | Comments (0) | TrackBackIncreasingly Flood-Prone China
China's development has put an increasing share of its people and economy in flood-prone regions, accounting to the country's Minister of Water Resources:
Posted by John at 12:31 PM | Comments (0) | TrackBack--By 2020, 41% of China's population will be living in flood-prone areas.
--By the same time, cities in downstream areas potentially subject to rising waters will have an aggregate population of 600 million people, and two-thirds of the country's GDP will originate in these regions.
Quote of the Day for Sunday, December 9, 2007
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December 8, 2007
Air Leaking from the Chinese IPO Bubble?
The Economist ponders whether such is the case:
Posted by John at 12:29 PM | Comments (0) | TrackBackOf the 15 largest offerings to have debuted on the mainland exchanges this year, the share prices of eight are below their first-day close. The most vivid example of the market's gloom was once the most vivid example of its elation. PetroChina, an energy producer, became the most valuable company in the world when its shares more than doubled on its November 5th debut in Shanghai. Since then, its shares have dropped in value by a third and PetroChina has become shorthand for a sucker's trade among angry Chinese punters. More recently, Sinotruk and Sinotrans Shipping also fell below their opening prices on the day of listing, shocking retail investors who had fought for shares in the certain knowledge that every offering could only go up.
Quote of the Day for Saturday, December 8, 2007
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December 7, 2007
Ethanol Subsidies Fuel Food Prices
The Economist offers an extensive analysis of how U.S. subsidies for ethanol, along with rising Asian standards of living, are pushing your food prices upward:
. . . the demands of America's ethanol programme alone account for over half the world's unmet need for cereals. Without that programme, food prices would not be rising anything like as quickly as they have been. According to the World Bank, the grain needed to fill up an SUV would feed a person for a year.
America's ethanol programme is a product of government subsidies. There are more than 200 different kinds, as well as a 54 cents-a-gallon tariff on imported ethanol. That keeps out greener Brazilian ethanol, which is made from sugar rather than maize. Federal subsidies alone cost $7 billion a year (equal to around $1.90 a gallon).
The article goes on to note that net farm income in the United States will be about $87 billion this year, 50% higher than the average of the past ten years.
Posted by John at 5:19 PM | Comments (0) | TrackBackAn Internet Business "Tumbles" In
National Public Radio has the story of Linda Katz, a southwest Kansas resident who, in an effort to learn web page design, created a fictitious Internet company website, "Prairie Tumbleweed Farms". The site started generated real life orders, however, and Ms. Katz started a real life business with the tagline, "it they don't tumble, we don't sell them." She sells small tumbleweeds for $15 and large ones cost $25. She's received orders for Hollywood movie sets, and NASA purchased some in order to test the Mars land rover. The business is now 13 years old and generates about $40,000 a year.
Posted by John at 4:54 PM | Comments (0) | TrackBackQuote of the Day for Friday, December 7, 2007
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December 6, 2007
U.S.-China Interdependence Fact of the Day
Buried in the results of the 2007 Duke University/CFO Magazine Global Business Outlook survey is the following little nugget: 61% Chinese public and private firms surveyed indicate a U.S. recession would hurt their business, while 9% say it would hurt a great deal.
Posted by John at 5:31 AM | Comments (0) | TrackBackQuote of the Day for Thursday, December 6, 2007
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December 5, 2007
Learning by Doing at Chery
The Wall Street Journal offers a first hand look at Chery, one of China's rising automobile manufacturing giants:
"In the beginning, no one had confidence in us," says Yin Tongyao, Chery's chairman and general manager, in a rare interview. Now, he says, "we are looking globally for markets." . . .
. . . rapid growth is already taking its toll, as executives strain to manage the company's expansion amid a shortage of experienced workers. "We are still fighting for our survival," says Mr. Yin. "We didn't get to learn from books. We have to learn everything by doing it."
Read the complete story here.
Posted by John at 3:00 PM | Comments (0) | TrackBackGlobal Manufacturers Remain Committed to China
Despite recent incidents regarding toothpaste, dog food, and toy product quality, global manufacturers remain committed to China. In an survey conducted by business research firm the smart cube, almost 80% of global manufacturers surveyed, all of which currently source product in China, remain confident in the quality of their supply chain. Further, these manufacturers see recent product quality incidents as an aberration, and not indicative of some systemic problem with Chinese manufacturing generally. The press release can be found here (pdf), and further commentary on the survey can be found here:
. . . The fact that an overwhelming majority of manufacturers did not feel compelled to review their supply chains is reflective of remarkable confidence, especially in light of the media attention the issue has received. To be sure, though, this is not to imply any sort of complacency on the part of the these manufacturers. Indeed, in our one-on-one discussions with the surveyed companies, respondents indicated that they would “be more cautious” about their supply chain activities, which suggests that while they feel they are structurally sound, they are mindfully vigilant. . . .
. . . survey respondents were very explicit that the onus was on them to ensure effective supply chain management and quality control. They feel that the U.S. government is doing everything reasonable within its power to improve the quality of outsourced products. The Chinese government, in their view, could do more, and by some possibly extreme measures, is at the moment trying. However, at the end of the day, it is the individual company’s responsibility to ensure safety and quality of the end product. (To illustrate the limitations of the regulatory approach, although the Consumer Product Safety Commission (CPSC) and General Administration of Quality Supervision (GAQS) of the U.S. and China, respectively, recently reached an agreement to boost the safeguards on Chinese-made toys, this is a mere sliver of the manufacturing universe.) [Emphasis mine.]
This last point is particularly important. Manufacturers themselves understand that it is their responsibility and they are legally liable for their product quality. It's why Mattel apologized and took responsibility for the recent problems with their supply chain. Regulatory authorities on both sides are likely to make a big show of what they're doing to protect the consumer, and actually maybe even accomplish a few things. Ultimately manufacturers themselves are responsible for quality control of their supply chain, however, whether it includes China or not.
It's also why all the campaign rhetoric regarding Chinese product quality, which was in full flower in last night's NPR/Iowa Public Radio Democratic presidential debate, is simply hot air. Christopher Dodd prattling about only buying toys from Iowa? Good grief. Let's hope, for his own sake, he doesn't make any promises, when he comes here to Georgia, about only buying chili made in Georgia. He might get a dose of reality on product safety.
Posted by John at 10:25 AM | Comments (0) | TrackBackThe Christmas Which Keeps on Giving for Peru and the U.S.
Congress has overwhelming given its blessing to a free trade pact with Peru, which should gives further credence to optimistic forecasts of the country's future economic direction. Investor's Business Daily celebrates this milestone:
. . . Right off, 85% of U.S. goods will enter Peru duty-free; the rest of the tariffs go in 10 years. Peruvians will now snap up U.S. products at more affordable prices, raising their standard of living.
They have been waiting for this a long time. Peru has put in so many "internal free-trade" reforms to prepare for this pact that its economy is already one of the world's fastest-growing. Real growth clocked in at 8% in 2006, pushing its GDP to $77 billion. Purchasing power was up 10%, meaning Peru's buyers are ready to spend.
The pact also provides a new legal framework for settling business disputes, allows companies to hire the talent they want, and ensures that U.S. and Peruvian companies get treated on the same legal basis. Companies that benefit most are small ones that create jobs, not those that can hire fancy lawyers to guard their rights.
Hailing the treaty, the U.S. Small Business Administration says 38% of U.S. trade with Peru is already done by 5,000 such businesses (vs. 29% for the world as a whole).
For Peru, foreign investment will pour in. If the pact is as successful as the one signed with Mexico in 1994, trade between the two nations will quadruple from $9 billion within a decade.
In short, it's Christmas all around, with the free trade zone of the Americas stretching ever farther across the hemisphere's Pacific coast. It is a trade alliance that will bring confidence and prosperity as surely as it will provide an alternative to populist tyranny. . . .
This agreement is not just an early Christmas for 2007, but a gift which will keep on giving to both ecoonomies for the foreseeable future.
Posted by John at 9:07 AM | Comments (0) | TrackBackQuote of the Day for Wednesday, December 5, 2007
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December 4, 2007
Those Harmed by Sovereign Wealth Funds
While concerns are floating around regarding the effect sovereign wealth investments might have here in the United States, Anders Åslund argues that those most harmed by such investments are actually citizens ruled by leaders making these investments. In a contribution to Foreign Policy, Åslund's explains why; read his complete essay here:
Posted by John at 1:59 PM | Comments (0) | TrackBackCertain international reserves are always needed, and exporters of commodities with highly fluctuating prices require larger reserves as a safety net. However, sovereign wealth funds are something different. They reflect a paternalistic—and economically illiterate—notion that the ruler knows best while citizens are so irresponsible that they cannot be entrusted with their own savings. It would be more economical and democratic to cut taxes and let citizens save and invest themselves.
Quote of the Day for Tuesday, December 4, 2007
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December 3, 2007
Atlanta = Argentina
To illustrate the immense amount of economic activity which occurs in America's largest cities, Mark Perry at Carpe Diem compares GDP data for America's largest metropolitan areas with comparable sized countries around the world:
--The top ten largest U.S. cities, if they were one country, would have a GDP comparable to Japan, the second largest economy in the world.
--Any of the top ten U.S. cities individually would rank among the top 30 economies in the world.
--New York's economy is comparable in size to Brazil; Boston's economy is about the size of Ireland's; Atlanta, my home, is comparable in economic size to Argentina. Iran, a country many in this country seem awfully worried about, is no larger than San Francisco.
Read more in Perry's complete post here. It will help you appreciate the marvelously incomparable economic locomotive we enjoy in the United States.
Posted by John at 9:13 PM | Comments (0) | TrackBackQuote of the Day for Monday, December 3, 2007
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December 2, 2007
Hispanics Remain a Coveted Demographic for Marketers
In spite of the U.S. Hispanic market slowdown, a survey of top marketers indicates that Hispanics rank just behind baby boomers as the most sought after demographic. Marketing y Medios covers the story here.
Posted by John at 10:16 AM | Comments (0) | TrackBackFind and Acknowledge the "Steves" in Your Life
As regular readers of Tidbits know, I'm a fan of Thomas P.M. Barnett, whose thoughts on global affairs I regularly point to. His latest column, is much more personal and a valuable reminder to all of us:
. . . Steve led a small life. He created few waves, yet somehow left an enormous wake.
Here's my request: You know who these people are.
Make sure they know who you are.
Find out who Steve is, and the impact Steve had on Barnett and his family, by reading Barnett's essay in full.
We've all got plenty of "Steves" in our lives, those who create a ripple effect in our lives that lasts for years. These people breathe not just in our own souls, but their impact on us is great enough that they influence others in our circle through the impact they've had on us.
Indeed, let's acknowledge and thank our "Steves".
Posted by John at 9:49 AM | Comments (0) | TrackBackQuote of the Day for Sunday, December 2, 2007
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December 1, 2007
Underestimating Our Dynamic Economy: An American Tradition
Frederic D. Schwarz, writing at the American Heritage blog, comments on Daniel Walker Howe’s new book, What Hath God Wrought: The Transformation of America, 1815-1848, and highlights a delicious irony of timing in American history.
Henry Leavitt Ellsworth, the U.S. commissioner of patents from 1836 to 1845, issued a particularly in-depth annual report of the Commission's activities in 1843:
Posted by John at 10:12 AM | Comments (0) | TrackBackThis report was greatly expanded from earlier ones, with a description of every patent issued during the year and sections written by examiners who specialized in particular fields. Evidently moved by the richness of America’s inventive spirit, Ellsworth surveyed the great reductions in cost of common items over the past 30 years: Shirt cloth down from 62 cents to 11 cents a yard; hooks and eyes reduced from $1.50 a gross to 15 cents; horseshoes, formerly handmade by blacksmiths, now manufactured and sold at five cents a pound.
Then Ellsworth made a statement that has been misquoted, misattributed, and misinterpreted ever since: "The advancement of the arts, from year to year, taxes our credulity, and seems to presage the arrival of that period when human improvement must end." If this sounds vaguely familiar, you’ve probably heard the garbled version in which a patent commissioner supposedly asked Congress to abolish his office on the grounds that "everything that can be invented has been invented." . . .
. . . the year in which Ellsworth marveled at the wonders of progress and invoked “the arrival of that period when human improvement must end” was 1843. The following year [Samuel] Morse demonstrated his telegraph, and as Howe explains, in less than a decade, you could barely recognize the United States as the same country.
To be sure, Morse’s telegraph was hardly unknown to Ellsworth in 1843. Morse had received several patents on his invention and gotten government grants to develop it . . . Yet its success was far from assured; other inventors had been trying to send messages with electricity since the 1820s. Ellsworth’s rhetorical flourish, vague as it was, did convey a sense that technology might soon be expected to reach its limits. Instead, within a few months, it took a huge leap forward, which in turn led to many more huge leaps. That’s how technology works, and however many unforeseen directions it may take in years to come, it is sure to continue working the same way—and surprising people in the process.
Bureaucracy Fuels the Immigration Problem
Steve Conover at the Skeptical Optimist delves into one of the most overlooked aspects of the immigration debate, particularly by many nativists who otherwise claim to be lovers of small government:
Is it possible that our immigration law, and our ability to process would-be immigrants under that law, is way too ineffective and time-consuming, and therefore causes a portion of our "illegal immigration" problem? Is it possible that, under current law and staffing, we cannot process desirable immigrants efficiently enough (including teachers, scientists, engineers, managers, and entrepreneurs)? The US Citizenship and Immigration Service is all but admitting to that at their website. Is it possible that some "illegal immigrants" achieved their illegal status by deciding not to wait for the red light to change?
Most lovers of small, more efficient government argue, and rightly so, I think, that tax simplification will help improve compliance. They argue that we need to "get the government off the back of small business", so these enterprises can be more efficient, presumably more profitable, and therefore prosper and hire more workers.
Why is it, at the same time, they don't understand that a cumbersome bureaucratic process for processing immigrants to this country fosters the very problem they're worried about?
I'm asking a rhetorical question, of course; I know the answer: creating scapegoats is easier than coming up with solutions to complex problems.
Posted by John at 9:15 AM | Comments (0) | TrackBackCreating Scapegoats to Appeal to Mobs of Voters
In a few deft lines, Thomas P.M. Barnett explains the blowhard rhetoric you're seeing in a most presidential campaigning in both parties these days:
Posted by John at 9:04 AM | Comments (0) | TrackBackScapegoating is the lowest form of analysis, appealing to our basest emotions.
But mobs love it, and so it remains an attractive product.
And no, complexity is not simply an outcome of technology, although technology often reveals it and can help tame it.
. . .Complex answers are harder to sell, because solutions nowadays often come in clusters.
Still, whenever the going gets tough, count on the scapegoating. . . .
Quote of the Day for Saturday, December 1, 2007
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