by Eric Martin
While I'm no stranger to multi-tasking (day job, new daddy, Obsidian Wings contributor, senior editor of what is likely the best foreign policy website EVAR!!, etc.), I'd say the buck…or something…would stop here (would that I have such similar, um, interests):
…37-year-old [Megan] Barnes catapulted to instant fame for an alleged multi-tasking mash-up that earned the bottle-blonde's mug shot a spot on hundreds of Web sites.
According to a startled Florida Highway Patrol trooper, Barnes was shaving her bikini area while driving south on the famed Overseas Highway when she crashed into the rear of an SUV March 2.
In the police report obtained by ABC News, the trim job was apparently essential because the arresting officer, trooper Gary Dunick, said the Indiana native told him she was heading to Key West visit her boyfriend. […]
It gets weirder. In order to pay full attention to her sensitive regions, police say Barnes enlisted her ex-husband, Charles Judy, who was riding shotgun, to hold the wheel.
Yes, her ex-husband.
Their tag-team driving went awry when an SUV driving in front of them slowed to turn. Barnes' 1995 Thunderbird smashed into it. Two of the SUV's passengers suffered minor injuries, police say. Barnes shouldn't have been driving that Thunderbird, since she had been convicted the previous day for driving under the influence and driving with a suspended license.
Look, there are worse things than pubic hair. Really.
And with that, allow me to segue to an observation that Jim Henley has really been on fire lately.
Were it not for injuries in the SUV, I’d be rolling on the floor laughing. Some people just don’t get reality.
Yeah. The ex-husband part was a real bizarre twist to an already ridiculous scenario
Props for the post title…probably my favorite (solo) Mozzer song evah.
[checks watch] Hmmm…March 12? Nearly 3 weeks too early.
UK: I think Bona Drag was his best (and probably last good) solo record. There were some highlights in terms of songs after that, but Viva Hate and Bona Drag were the only respectable records holistically speaking.
And now I’m going to have to listen to the song today on the subway ride home.
Daylight Savings Time is now “spring forward one month”.
i can’t wait to repeat October!
Double Halloween! woohoo!
UK: I think Bona Drag was his best (and probably last good) solo record.
Well, it’s a singles compilation, so not really comparable to a full-length studio album. But I agree that it stands up better than any of his actual albums. He’s basically a singles artist — not that there’s a damn thing wrong with that — but it’s in sharp contrast to the Smiths, peace be upon them.
“Look, there are worse things than pubic hair.”
Yeah, she could have had crabs!
Well, it’s a singles compilation, so not really comparable to a full-length studio album.
Heh. Quite true, and yet, like Louder than Bombs, I tend to think of Bona as a distinct entity. Obviously, so much so that I mispoke here.
Very true, that. Louder than Bombs “works” as an album because, now that I think of it, the Smiths were really as much a “singles” act as solo Morrissey — a lot of their best stuff was never intended for release on an album.
So scratch my earlier comment…apart from The Queen Is Dead (which is brilliant from start to finish), the true glory of the Smiths is really most evident on Hatful of Hollow and Louder than Bombs, both compilations.
And I loved that about the Smiths…like the Cocteau Twins in their day, they doggedly stuck with the non-LP single well after it was considered a “dead” format. You have to wonder what they’d be doing now in the digital age, now that the single has been revived.
Strangeways? Great album…
Hatful, indeed.
Strangeways? Great album…
OK, I hereby scratch the scratching of the comment before last. There’s really no need to pigeonhole them. They were a floor wax and a dessert topping, and I never got to see them live, dammit.
They were a floor wax and a dessert topping, and I never got to see them live, dammit.
A great source of sadness in my life as well. Saw Big Mo a bunch, but never the full ensemble.
Saw Moz once around 97, it wasn’t a particularly stellar show unfortunately. Huge Smiths fan tho.
Since the actual open thread has devolved into a 2nd Amendment argument, and I wish to give it the space to develop into the fascinating and valuable exchange of views I know it will, I thought I’d treat this one as an open thread and offer a couple of backgrounder links to today’s Krugman column:
Krugman calls for a 25% tariff on China
Naked Capitalism on US-China tensions
Michael Pettis on what the PBOC cannot do with its reserves
We had a little discussion on the subject of China’s power versus the US a while back, in which I was defending the position that the US is by far the stronger in negotiations because most of the purported retaliatory actions that can be taken would hurt China a lot more than the US. (Or, in the case of the currency manipulation, the “retaliations” would reverse the actual effect they were aimed at defending because they would in themselves revalue the RMB against the dollar.)
I think this is going to be the most important international problem of the early 21st century: not so much the currency problem per se, but the dynamic of intransigence to negotiating a solution and (likely) extreme affront when unilateral measures are taken by trading partners, even though China itself does not hesitate to use any and all levers at its disposal for gaining advantage. There are unpleasant historical parallels…
Jacob: I would modestly propose that unpleasant history offers the solution to a number of problems.
A single solution exists to the problems of:
The solution is clear: the U.S. should smuggle opium into China!
Increased opium use will decrease Chinese productivity, imports will reverse the trade imbalance, and Afghanistan will once again have a market for its one and only natural resource.
I can’t see how this plan could possibly go wrong.
Not to put too fine a point on it, but is it possible that Krugman is on crack? “Hey I have a great idea for the economy! Let’s start a trade war with China!”
Seriously? That has to be a hacker on the website trying to discredit him or something.
elm, that is sheer genius. If only someone had thought of it earlier!
It does illustrate the degree to which mercantilism is dangerous, though.
As for trade wars, I don’t think that’s the idea. “Free trade” is a slogan. What is actually implemented is a complex web of negotiated agreements regarding import tariffs, market access, dumping, subsidies, and domestic preference. In order to defend your position in negotiations – sometimes even in order to defend a position that you have good reason to believe will benefit both partners – you need plausible threats that will disproportionately harm one party. What the free trade orthodoxy does is profoundly harm the ability to make such threats and therefore harm the US position in trade negotiations, by taking the stance that trade under any conditions whatsoever is so superior that the US will accept any conditions.
This is a bit like negotiating for a salary by telling your potential employer that you would love to work for them under any circumstances, conditions, or pay whatsoever because you believe philosophically that working is better than not-working. It might even be true to some extent, but it’s not a very good idea – not for you in the short-term, and not for them in the long-term when another company poaches you. A credible threat to take your labor somewhere else is required. The US has lacked credible threats lately because a religious belief in free trade has trumped practical concerns about who benefits.
Hilarious elm. Makes me feel like a bit of a geek for guffawing at histori-humor, but there it is.
Incidentally, keeping up a recent if improbable streak, I more or less agree with Seb.
I think it all began when I revealed that “Sebastian” finished a close second in my son’s naming sweepstakes. It was only KO’d after my wife’s parents (native Koreans with limited English capabilities) complained at the difficulty in pronouncing “Sebastian.”
Eric is much easier for them. Although it comes out “Eh-reek” with a slightly swallowed “r”.
That’s odd. I’d think that “Sebastian” would come out no worse that “Se-ba-shun”, and it has no sounds as difficult for them as the “r” is.
Yeah Mike, I didn’t make the rules 😉
I shouldn’t quibble. We, with reckless disregard, named ours “Camille” and “Andrew” 🙂
Having had extensive experience with Koreans, and angling for the name of boy #2…
Tell them it is perfectly ok to pronounce the end like “chon”. And the start can have a slight ‘t’ sound if it is easier.
Tsebaschon.
I dunno why it works but it does.
Two articls (on left and one right) suggesting that Krugman went off his rocker on this one.
The Money Ilusion
Ryan Avent
Seb, I find your strategy appealing.
Incidentally Mike, my grandmother’s name was Camille (Italian side).
I agree more with Jacob’s position on the issue of currency value/balance of trade with China.
Assuming that Krugman (and others) have accurately reported the PBoC’s policy and method of intervention (viz. a willingness to exchange essentially-unlimited quantities of currency at their preferred exchange rates) then the traditional free trade arguments (of M. Friedman, et. al.) fall apart.
Assuming that’s true, imposing a tariff on Chinese imports as a means to pressure the PBoC to scale back their currency manipulation is a reasonable suggestion (when less-severe measures, such as diplomatic requests, have failed.
I’m not skilled in analyzing the effects of how the world economies would react to such a tariff (or to the threat of one), so I’ll leave that to the economists.
I did find one part of Avent’s analysis highly misleading, viz:
Actual figures, in millions of USD (source):
2003 U.S. exports to China: $28,367.9
2003 China exports to U.S.: $152,436.1
2009 U.S. exports to China: $69,576.0
2009 China exports to U.S.: $296,402.1
Disregarding the off-by-100-percent mistake (growth rates were 145% and 95%, respectively), the growth rates gloss over a very large difference in magnitude. In 2003, China imported $18.60 worth of goods from the U.S. for every $100 imported by the U.S. In 2009, that figure was $23.47. (In 2008, it was 20.64 and in 2007 it was $19.58 — 2009 looks like an outlier, but it’s early to judge). Avent’s conclusion — that China’s currency manipulation hasn’t prevented a shift in balance of trade — also doesn’t follow, as he offers no evidence that the manipulation hasn’t prevented an even larger shift.
“as he offers no evidence that the manipulation hasn’t prevented an even larger shift.”
How in the world would he show that? Access to the alternate universe?
The main reason the terms of trade changes in favor of the US in 2009 was that people stopped buying low-end consumer goods from China but China didn’t stop buying high-end industrial goods & software from the US. Which is to be expected, and welcome, but doesn’t change the underlying dynamic and will be reversed when spending picks up.
I think this is a fairly big deal but not earth-shatteringly important, but then I also think that a tariff would not have the earth-shattering effects claimed. I mean I regularly read (admittedly in comments) suggestions that a trade tariff might prompt China to invade Taiwan, which is completely nuts. And any symmetrical “trade war” would tend to hurt China 4-5x the amount it hurts the US, and that’s in dollar terms and not by portion of GDP; as a percentage of GDP affected, trade restrictions hurt China 10-100x as hard as the US.
I don’t think China is evil, they’re just doing what they can get away with to promote capital investment in their country. They’ll continue to do it as long as the benefits outweigh the costs. It’s basically a good strategy – for them. But there’s no reason to continue to let them get away with it when it hurts the US and other countries. (And the US is not alone in being annoyed with the currency policy, Europe and much of Asia are now pretty annoyed by it too.)
The point is that this isn’t jingoistic nationalism. It’s about efficient economic allocation and avoiding disruptive economic shifts that occur for artificial reasons. It is economically inefficient for established midrange industries in the US to move factories to China to take advantage of an artificially cheap workforce. (I’m not talking about low-end assembly; the main effect of the currency manipulation on that is to move it from e.g. Mexico to China, which is a problem for Mexico but not really for the US.) It is natural for other countries to be irritated by policies that disrupt their established industries, and for them to do something about it. All of that is extremely boring normal trade stuff; what is abnormal is that in recent years the US said “Eh, whatever” to what was going on with China, to the detriment of economic efficiency and wellbeing of people outside of China.
There’s no natural right of access to another nation’s markets. Access to markets has always been a negotiated privilege. Treating it as a right is a mistake for both parties in the trade.
I don’t think China is evil, they’re just doing what they can get away with to promote capital investment in their country.
Jacob, this is a bit confusing. China sends us tons of consumer geegaws in exchange for dollars. They turn around and use the dollars to buy American assets like T-bills, corporate bonds, and so forth. The (American) sellers of that paper use the dollars to pay for roads and bridges and factories in the US.
By running its trade surplus with the US, China acquires ownership of assets in the US. That’s practically the exact opposite of “promot[ing] capital investment in their country”, isn’t it?
I mean, you could say that ‘capital outflows’ from the US to China are what pays for the net surplus of goods and services flowing from China to the US. As I understand the terms of art in macroeconomics, that would be a true statement — an accounting identity in fact. But translated into real (as opposed to financial) terms, ‘capital outflows’ to China mean more Chinese ownership of American assets, not more roads and bridges and factories in China financed by Americans. Am I wrong?
–TP
” And any symmetrical “trade war” would tend to hurt China 4-5x the amount it hurts the US”
Not to sound all crazy, but ummm, exactly how much ‘hurt’ will be ok in the current economy? In your estimation do we have lots to spare?
And for the record we’re talking about country that intentionally starved millions of its own citizens for political ‘progress’, so what China will do might not be a strictly economic calculation.
The particular capital investment they’re after is manufacturing with technology transfer, and the currency policy makes that very appealing. Dollars buy a lot of land, equipment, labor, and components right now.
Sebastian, the hurt from subsidized exports from China is already felt here. How much of that hurt is okay in the current economy? I was counting the cost of the policy and not its benefits; for the US a trade tariff would have the typical protectionist benefits of increasing domestic employment and industrial investment. That’s what generally makes tariff threats plausible and it’s why the US ought to be in a strong negotiating position.
China did not “intentionally” starve millions of its own people. It did so unintentionally albeit with callous indifference. But that was also a very different time with very different leadership. The economic & political elites in China today are very invested in stability and economic growth, so no, they’re not likely to invade Taiwan and trigger a war with the United States any more than the United States is going to invade China now even though it thought about doing it in 1950.
But I’m not so much personally attached to one particular approach as I am interested in the situation and in the fact that a prominent economist with a history of promoting free trade thinks it’s worth putting up trade barriers over. As far as personal beliefs go, I don’t know about a tariff, but I do believe it’s a big mistake for the US to fear China in the way that has become popular on right and left. China is a very delicate country with a much smaller economy than the US and much bigger problems. Which means we should help them all we can, but it doesn’t mean we need to roll over in fear when they do things that hurt the rest of the world.
The alternative (or sometimes complement) to fear has been to lionize their economic policies – which have been very effective, but what is effective in a country of $3k GDP/cap is very different from what’s effective in a country of $45k/cap. And from what will be effective in a country of $10k/cap – which is why I put very little stock in straight-line projections that have China becoming a larger economy than the US any time soon.
On the tariff issue specifically, if there is no revaluation the situation will resolve itself some other way. China is already having major inflation problems, debt problems & hot money problems, all of which are made much worse by their currency policy despite its other benefits to them. At some point something will snap. That may or may not be worse than a revaluation, I think likely much worse; on the other hand, if the US doesn’t take action, it can’t be blamed for the pain, and in fact can say “Look, we warned you” with a certain credibility at that point. So I’m sort of agnostic about whether this particular action is a good idea.
Looks like it might be about to happen whether or not any of us think it’s a good idea though.
“How in the world would he show that? Access to the alternate universe?”
He could do that, if he so pleased.
Or he could show that the change in net trade balance with China was different from that of other east Asian exporters (but it really wasn’t).
The 2003 to 2009 balance of trade numbers (exports/imports) for South Korea, Taiwan, and Japan all show a similar pattern to the figures for China that I showed above (the absolute growth rates for both imports and exports were lower).
In 2003, the U.S. sold S. Korea $64.65 worth of goods for every $100 they sold the U.S. In 2009, that figure was 72.99.
But even *that* dances around his failure to acknowledge that the purpose of China’s currency manipulation is, in fact, to tilt the balance of trade.
Still, his conclusion doesn’t follow from the facts he presented or the data I’ve looked at.
“Sebastian, the hurt from subsidized exports from China is already felt here. How much of that hurt is okay in the current economy?”
This is often *claimed* and almost never supported. The usual industries for which it is *claimed* are things like steel manufacture or other heavy equipment where blue collar workers could earn excellent wages in the 1970s. But in reality the *loss of jobs* is from mechanization not scary Chinese labor. This can be seen by the fact that US output (actually created materials and things) is up over the time of the alleged Chinese interference.
“I was counting the cost of the policy and not its benefits; for the US a trade tariff would have the typical protectionist benefits of increasing domestic employment and industrial investment.”
Again, this is often claimed, but rarely supported in net terms. Tariffs in practice almost always protect whatever existing large corporation lobbies the hardest for them. That most certainly is NOT the same thing as saying that that tariffs ‘typically’ have the ‘benefit’ of increasing domestic employment GENERALLY or industrial investment GENERALLY.
It is easy to design a tariff that will protect General Motors. That isn’t at all the same as saying that it is good for the US economy in general.
“The economic & political elites in China today are very invested in stability and economic growth, so no, they’re not likely to invade Taiwan and trigger a war with the United States any more than the United States is going to invade China now even though it thought about doing it in 1950.”
This is all very hopeful. But it is a much better known fact that politicians act politically than that they are great at economic calculation and/or would change their minds on the political calculations if the economic calculations were different. But did you notice the invasion of Iraq, for example? Do you notice hanging on to Tibet, for example? Do you remember China destroying a US plane under Bush II?
Political leaders are political. And if you throw things around like 25% tariffs on China and imagine that there will be no response because it *might* hurt China more economically, I’m afraid I have to point out that you are being a bit crazy to ignore the political ramifications of Chinese leaders feeling like they are being publicly pushed around.
They are still so politically sensitive that even mentioning the idea that Taiwan isn’t currently under their control can cause a huge incident. The idea that their reaction to a 25% tariff aimed at shutting down hundreds of their factories would be “Ho hum, retaliating would hurt us a bit more so we can’t” is frankly insane. I think a much stronger case could be made that their reaction would be “we need to illustrate that we can’t be controlled on a macro level by the US, so we will take harsh belt tightening measures for the next 5 years to teach them a lesson.”
And then if you know anything about Chinese history and propaganda, it will be justified to the Chinese people with allusions to predatory Western corporations and heavy handed allusions to the Opium Wars, or to the Japanese. It would be nice if Krugman would at least think about the possibility.
“Looks like it might be about to happen whether or not any of us think it’s a good idea though.”
Right. Because it is a political decision, relatively divorced from its economic consequences. Which is likely how it will be responded to in China.
“China is a very delicate country with a much smaller economy than the US and much bigger problems. Which means we should help them all we can, but it doesn’t mean we need to roll over in fear when they do things that hurt the rest of the world.”
Huh? I presume you know why the US is able to keep interests rates on treasury bills low. [It really helps to have an enormous buyer willing to invest even at low rates]. Want to take a guess on what runaway inflation caused by the US being forced to triple or quadruple its rates in order to roll over debt would do “to the rest of the world”?
Elm, I don’t understand your analysis. You suggest that China has the same balance of trade trends as South Korea, Taiwan and Japan. But only China has the currency peg, right? Therefore your analysis suggests that the currency peg IS NOT a major factor in the trend?
Right?
Hmmm, I threw around the word ‘you’ when I should have said ‘Krugman’. Please be understanding. 😉
“Elm, I don’t understand your analysis. You suggest that China has the same balance of trade trends as South Korea, Taiwan and Japan. But only China has the currency peg, right? Therefore your analysis suggests that the currency peg IS NOT a major factor in the trend?”
I think you’re more or less correct, that is my analysis.
China’s currency peg affects the absolute ratio of trade. It does not prevent that ratio from changing due to other forces (not unless the PBoC changes its rates to adjust, at least). If other forces are at work, then I would expect to see similar effects in trade ratios with other east Asian exporters, and they appear to exist.
And that contradicts Avent, who claims “America’s trade deficit with China has been steadily shrinking” and implies that some change in balance of trade with China is underway.
The U.S. trade deficit with China has grown, year over year (in absolute terms), in all but 2 years (2001 and 2009) since 1985. So much for “steadily shrinking”.
The ratio of trade imbalance has improved slightly from 2003 to 2008 and more in 2009, but 2009 looks like an outlier.
Automation is the larger part of the decline in manufacturing jobs, yes. And not in itself a huge problem within the US provided that inequality is kept in hand and investments in education and R&D are made – basically in order to absorb the excess workforce from manufacturing you need to give them something to do, and you can educate some of them, but you need to absorb many of them into areas of employment where wages are naturally lower; if you don’t do something redistributive, you wind up with big problems from diminished demand – which is roughly the story of the developed countries over the last 40 years…
But export subsidization does not help. It’s a pretty big drag and especially so when trying to get out of a recession.
On tariffs protecting particular industries, an across-the-board tariff is much less prone to capture by interest groups except the general “importers versus manufacturers” divide. And even for importers, a uniform rise in the cost of imports that affects all their competitors isn’t so bad.
it will be justified to the Chinese people with allusions to predatory Western corporations and heavy handed allusions to the Opium Wars, or to the Japanese
It already is being demagogued in exactly that way, which is why the massive FDI in China was such a dangerous path in the first place, and why an artificial increase in the amount of FDI is something to resist. This situation is getting worse, not better.
Because it is a political decision, relatively divorced from its economic consequences. Which is likely how it will be responded to in China.
No, it is a political decision here not at all divorced from its economic consequences, it is being made precisely based on its presumed economic consequences. You might disagree with what those consequences will be, but they are foremost in the minds of people making the decisions, just as they will be foremost in the minds of Chinese politicians who have to make a decision.
(The words “insane” & “crazy” don’t really help much here. We disagree strongly about what kinds of actions are likely on the part of various parties. As far as I’m concerned it’s insane (the paranoid sort) to think that China can or will hurt the US in serious ways, but I try not to use that term, although I’m sure I have from time to time…)
I presume you know why the US is able to keep interests rates on treasury bills low. [It really helps to have an enormous buyer willing to invest even at low rates]. Want to take a guess on what runaway inflation caused by the US being forced to triple or quadruple its rates in order to roll over debt would do “to the rest of the world”?
The US sold $2.1 trillion in Treasuries in 2009, of which China (even counting Hong Kong) bought about $100 billion or 5% of the total. China, in 2009, in fact cut its purchases of Treasuries hugely – the thing everyone was worried about – and nobody noticed. So how would a further reduction in purchases cause a tripling or quadrupling of rates and runaway inflation?
And China’s other “weapon”, its large dollar reserve, cannot be wielded without causing the dollar to devalue and its own currency to appreciate. It can’t even be spent without driving up the RMB. It’s totally useless to them without revaluation.
There’s a good post & subsequent discussion on this at Naked Capitalism today.
As for confusion with the Schnauzer, there are worse people to be confused with…
And a good panel discussion on this here, where Krugman explains more of what he’s thinking.