Evening Links

Consumer credit making a comeback?

Unemployment and the Battle of the Sexes (h/t wonkbook)

Edward Glaeser on the the climate bill and the case for a carbon tax.

Election season: In China?:

For the voters, electing the Party secretary is like "selecting products they favor in the supermarket", said Chen Jian, a township government official, who was sent by Yongning to take part in the election of Houchong. "We candidates stand on the stage for them to compare and choose."

So thaaaat's how it works.

Did He Just Drop the P-Bomb?

I couldn't help it. This is gold. But also somewhat inappropriate, so be warned.

The reaction of the other two newscaster is classic, as is the perpetrator's complete unawareness of what he just said.




Am I wrong?

Federal Debt is Gross

Very interesting chart that Barry Ritholtz posts on the Big Picture:



a few things to note:

1. TR once again outdoes his peers, as he does in almost all metrics of awesomeness.
2. The gross federal debt is high, and needs to be addressed, but it's not unprecedented.
3. Reagan...

Thailand is Fairing Better than you Think

The truly wild thing about the uproar in Thailand is not the fact that protesters brought the city to a standstill in an attempt to force the government to resign (that's happened before), or that its capitol city and surrounding areas are under curfew after yesterday's rioting, or that several buildings were set on fire by the opposition in response to military force.

The really unbelievable thing is that through all of that the Thai economy is actually fairing pretty well. Seriously, one of those burning buildings in the papers this morning was the Stock Exchange of Thailand, which happens to still be up on the year and actually outperforming other emerging countries. How can that be? According to a report by Standard Chartered Bank, it's because the markets have already priced in the the disruption.

Talk about political risk analysis. Markets have already priced in the fact that thousands of protesters would besiege Bangkok for weeks, all but shutting down the city and crippling the tourism industry. I don't know if this speaks more to the overall soundness of the Thai economy or to the fact that political unrest is so common in Thailand that the markets have basically stopped noticing. In reality it is probably a bit of both.

To be fair, the Thai government has announced that it is reducing its economic growth forecast for the year because of the disruption (after having recently revised it upward!), but it seems as though the political volatility would have bled through in the form of greater market volatility. It's also true that Thailand has set itself on firm economic footing over the past ten years by building up a large stockpile of foreign exchange reserves and a strong current account surplus, among other economic cushions. All these things combined have analysts actually predicting a rise in the Thai stock market and an appreciation of the Thai baht against the U.S. dollar.

Surely no one would be making such sanguine predictions if this were happening in other emerging markets. If this was Beijing instead of Bangkok, global markets would be having even greater fits than they are now. Of course there is a size difference in the economies in terms of global presence. But it's still astonishing. Essentially what has happened is that Thailand has turned a sustained level of political instability into business as usual, and paradoxically reassured investors that there is no need to panic.

Speaking of Local Elections...

One of the greatest political ads of this election season is for a position most of us have never heard of. It was released on Sunday and became an instant hit:



And the inevitable parody:

We're Better Than That, Too!!!! w/ Dale Peterson - watch more funny videos

Not sure which one I like more, to be honest. Of course the original came with plenty of commentary.

The UK is out of Money

I thought this headline was a joke or at least hyperbole. Nope. It's true, and telling.

What are Zee Germans Sinking?

If the cliche "all politics is local" holds true, then its inverse has increasingly become "all policy is global." Angela Merkel, Germany's Chancellor, single-handedly sent European stock markets tumbling today with the announcement of a ban on naked short-selling and credit-default swaps, instruments which essentially let investors bet on or insure against further weaknesses in the Euro Area economy.

The reason she made this decision (along with her previous dithering in committing to a Greek bailout) is because she is facing domestic political pressure -- average Germans don't want their tax dollars going to bailout the Greek government. And they let her know about it by handing her party a loss in regional elections on May 9, causing her to resort to what looks like domestic political desperation.

Most of us probably don't care about regional German elections. Most of us don't even care about our own local or regional elections. But whether or not anyone takes note of these votes, local decisions increasingly have repercussions for on the global economy.

For starters, the German decision adds to overall uncertainty in global financial markets -- the Dow is off 0.75% so far today. That's right -- local German elections just gave a hit to your retirement fund. In contrast, the current Euro calamity could be a net positive for recovery in the U.S. because it is helping to lower energy prices.

The scary thing here is that as governments have become more economically active because of the financial crisis, the political risks to the global economy have proliferated in number, and likely grown in size, and these risks will likely shape the post-crisis economic landscape -- both in America and internationally. Next up on the reading list, Ian Bremmer's End of the Free Market.

When Firefighters Become Architects

Image by Getty Images via Daylife

 Great piece in the FT today about Obama's economic team and its potential path forward in envisioning a "new American economy." It also highlights some interesting points on how the president interacts with his economic counselors and his general stance toward economic policymaking.

I enjoy insights into the more human side of policy, especially when it comes to often humorless economists, and Rothkopf's description of Larry summers as "Obama’s economic [Henry] Kissinger" is probably right on. However, the article does seem to overestimate Summers' role as the sole "alpha brain" on the team.

“My question is not whether Larry Summers is a brilliant brain but whether there is anyone who has the ability to challenge his point of view,” says Mr Galston. “I know in my case that when I hear a fluent, and seemingly unimpeachable argument, what I want to hear next is an equally fluent rebuttal. Does President Obama have that? Brilliant brains also get it wrong.”

Contrast that take to last month's Atlantic profile on Geithner, and it is unclear who is the true alpha dog.

The Santa Con

I was in New York City this weekend, and it changed my world.  However, my epiphany was not because of the City itself, it was because of Santa Clause.  On Saturday night I went out to get some food and a drink, and as I was walking around I noticed a group of people all dressed in Santa outfits.  I didn't think much of it at first, but I found out later that they were part of something incredible, something spectacular, something called Santacon.   

This yearly "convention" happens in cities all over the world, from Boston to Belfast to Beijing. Essentially, a large group of otherwise unaffiliated people get dressed up as St. Nick, and stumble around whatever city they happen to be in, to spread good cheer and drink good beer.  Santa's are encouraged to bring gifts for children they see as they migrate from bar to bar and, in New York this year, participants were asked to bring a canned food item to donate.  

The Rules and Guidelines of the convention are all hilarious, and as I read them, I felt pretty certain that each year one or all of them gets broken.  My favorites: "Don't be 'that' Santa" and "Santa does not get arrested."  

Those of you who are more culturally savvy than I am might have known about Santacon for years, but if not,  Santacons are still happening over the next week, so check to see if and when the joy is being spread in your city.  According to the site, I missed the DC Santacon by a week, but it's already on my calendar for next year.

So it turns out that Santa really does exist, and even he enjoys a pint every now and then.        

Karaoke Rage

A lot of things that are normal occurrences in Asia would be simply unbelievable anywhere else.  Karaoke Rage is one of them.  According to this article, "There have been several reported cases of singers being assaulted, shot or stabbed mid-performance, usually over how songs are sung."  What?  Although, you do have to give some respect for people who take the art of ridiculous singing seriously.  I mean, is there one of us out there that has not fumed over our favorite Pat Benatar song being butchered by some amateur?  I know I have.  But then again,  I have never thought about stabbing the jerk because of it.  Outrageous.    

What to do with GM?

I don't own a car, but lately I find myself very concerned over the fate of the American auto industry.  Over the past week, I have been trying to decide which side of this debate I should support, but I still can't make up my mind.  It seems that there are compelling reasons for both cases: to let the auto makers file for bankruptcy and begin their own restructuring or to shore them up temporarily with a government bailout.  Obviously, people far smarter and better-informed than me have been weighing in on this discussion in recent days.  In some of the national newspapers, Michael Levine and Mitt Romney have made the case to leave the market alone and let nature take its course. Meanwhile, Jeffrey Sachs and Robert Samuelson have argued for an immediate bailout tied to stringent conditions of reform for the industry.  

Right now, I think I am leaning toward the latter solution.  It seems better to be proactive and forego arguments of principle and ideology in a time of crises, but I can also see the potential benefits of waiting until these firms are in Chapter 11 to guarantee loans.  Any thoughts?

The China Syndrome

Were you one of the 15% of the world (~1 billion) who watched the opening ceremonies of the 2008 Olympics? If not, then I feel for you, for nothing I say can do it justice. Roughly 15,000 performers, a quarter of a mile long LCD screen, and thousands of fireworks were all orchestrated into a four hour long spectacle of China's history, it's future, and it's potential by famed Chinese director Zhang Yimou. Held in the newly constructed and acclaimed "Bird's Nest", the ceremony was seemingly less an Olympic opening as it was a country's welcoming into the global arena. As Napoleon once said, "Let China sleep. For when China wakes, it will shake the world." 8.08.08 will perhaps go down as the day when the world took notice that it had indeed begun to shake. So if you missed the opening ceremony (and odds are you did) then you should definitely check out this highlight video.

America currently leads the total medal count (China leads the gold medal count), but if Michael Phelps has anything to say about it we will soon possess the most Gold medals as well. Case in point, Sunday night Phelps and the American 4x100 freestyle relay team held an exercise in something that America always loves to do... dominate the French.


Andrew Polk (unofficial US ambassador to China and Karaoke artist extraordinaire) was recently tapped to provide commentary on his experiences at the 2008 Olympics to the illustrious Amarillo.com. For continual updates be sure to check back to the Schop, but as for now, here is his commentary on how the opening ceremonies played out on the streets of Beijing. Enjoy.