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Top 3 Myths of Capitalism
12/02/2011
09/09/2011
Estonian Exceptionalism
PLUNGING unemployment, rocketing growth, soaring exports and a budget surplus: that is the story of Estonia as it bounces back from a precipitous economic collapse. This burst of good news shows not only the virtues of flexibility and austerity (a sensitive subject, as other euro countries taste the same medicine); it also gives heart to Latvia and Lithuania. Estonia’s GDP growth rate in the first quarter of the year was 8.5%, the highest in the European Union. It boasts the biggest drop in unemployment, from 18.8% to 13.8%. It has the lowest debt in the EU, of just 6.6% of GDP; measured by the price of credit-default swaps, it is among the ten best sovereign risks in Europe. Fitch, a rating agency, has just raised Estonia’s standing to A+. Strong export growth (up by 53% year-on-year in May) and industrial production (up 26%) reflect in part soaring production of mobile-phone kit at the country’s largest exporter, Ericsson. But the recovery is broader-based. Eva-Maria Ounapuu of Joik, which makes “simple, Nordic, minimalist” cosmetics, says the recession made consumers turn to local products. Now that this market is “all but saturated”, she is starting to export. Policymakers in all three Baltic countries feel vindicated: during the crisis many outsiders told them to unpeg their currencies from the euro. Instead they pressed ahead with “internal devaluation”, meaning whopping fiscal adjustments (9% of GDP in Estonia’s case) and big cuts in nominal wages. Yet long-term competitiveness is still a concern. Although inflation is slowing, the central bank in Tallinn worries about overheating. The previous boom brought double-digit growth and reckless lending, followed by a construction bust and a 14% fall in GDP. Estonians hope that the banks (almost all foreign-owned) have learned from the past. Still, next-door Latvia (which had an international bail-out in 2009) and Lithuania are eager to follow the Estonian example. They also have booming exports (up by 38% and 42%, respectively, in the year to May). Lithuania is also enjoying a storming recovery in the shops. The pair hope to follow Estonia into the euro, reducing their currency risk and boosting their image with investors. But the go-ahead Estonians are already scenting the next challenge. Should the single currency crumble, they are determined to be on the inside track for any new German-centred “super-euro”. Goodbye “eastern Europe”; welcome to the “new north”.
A bigger question is whether other countries can match this. Estonia boasts unusually thrifty politicians and an open public culture. It scores well in business-friendliness and clean-government rankings. Taxes are flat and low (the government has just moved to cut income tax from 21% to 20% in 2015).
07/01/2011
From The Economist:
SOME people recite history from above, recording the grand deeds of great men. Others tell history from below, arguing that one person’s life is just as much a part of mankind’s story as another’s. If people do make history, as this democratic view suggests, then two people make twice as much history as one. Since there are almost 7 billion people alive today, it follows that they are making seven times as much history as the 1 billion alive in 1811. The chart below shows a population-weighted history of the past two millennia. By this reckoning, over 28% of all the history made since the birth of Christ was made in the 20th century. Measured in years lived, the present century, which is only ten years old, is already “longer” than the whole of the 17th century. This century has made an even bigger contribution to economic history. Over 23% of all the goods and services made since 1AD were produced from 2001 to 2010, according to an updated version of Angus Maddison’s figures.
07/08/2010
John Stossel on Capitalism. Brilliant.
06/03/2010
This latest video is a brief discussion on the Sovereign Debt Crisis and what this Doom and Gloom hype means to investors portfolios.
02/24/2010
Want to know where all the TARP money is? Check out this pic. Click the image for a larger view. Great job from Visual Economics on this graphic.
01/26/2010
“ An economist is an expert who will know tomorrow why the things he predicted yesterday didn’t happen today. „
Unknown
01/25/2010
How is it possible that someone like Jim Cramer can get things so wrong and still have people listen to their advice? Quote from Navigating the Fog of Investing movie from an old proverb: He who predicts the future lies, even if he is telling the truth.
12/14/2009
This is one of the funniest skits SNL has done this year. I’m glad someone is trying to pay attention to the reckless spending spree our government is on. Feel free to discuss.
12/10/2009
Check this out. This is a graph that shows how little experience the President and his cabinet members have at running a business compared to past President’s and their cabinets.
So, let me understand this. The President wants to hold a jobs summit to really think about how to add jobs in America. He plans to tell entrepreneurs how to add jobs, but he and his cabinet have little to no business experience whatsoever. What?
Better bring your “A” game Mr. President.
