Tuesday, December 27, 2016

Trade Deficit


Bernstein (The Atlantic):

"...it’s not inherently a problem for a country to have a trade deficit. For example, a fast-growing economy pulls in more imports as it expands, which pushes a country’s international trade account toward deficit. In that context a trade deficit is good for the economy, allowing the country to consume and invest more than if it maintained balanced trade. This was the story in 2000 when, after four years of strong growth, the American economy had an unemployment rate of 4 percent and a trade deficit that amounted to 3.7 percent of GDP.

[...] 

What effect does all this have on American workers? Trade deficits, even in times of strong growth, have negative, concentrated impacts on the quantity and quality of jobs in parts of the country where manufacturing employment diminishes. [...] There is, for example, a lot of research confirming that de-industrialization in the Rust Belt is partly a result of the fact that America meets its domestic demand for manufactured goods by importing more than it exports. [...] And trade imbalances have repercussions far beyond the labor market. They can produce significant macroeconomic distortions, and those who view deficits as benign frequently overlook this. Most importantly, as Ben Bernanke noted over a decade ago, a trade deficit can have a role in producing financial-market bubbles and the devastation that’s caused when those bubbles burst. The problem arises when other countries suppress spending and investment, thereby boosting their savings rates and their trade surpluses. By the rules of basic accounting, those surpluses have to flow somewhere, and many flow into America. This further strengthens the demand for and value of the dollar, making American exports less competitive—and thus exacerbating the trade deficit. In the 2000s, these trade patterns helped provide cheap capital that, in tandem with inattentive regulators, inflated the housing bubble. Almost a decade later, the country is still recovering.

[...]

The goal of trade policy should thus be to push back on U.S. trade deficits without distorting current trade flows. Large tariffs like the ones Trump has proposed won’t work, nor will preventing offshoring one company at a time, as he did with some of the jobs that the air-conditioning company Carrier was going to shift to Mexico. There are better ways to improve the U.S.’s trade balance—most importantly, the government could take steps to prevent America’s trading partners from manipulating their currencies to make their exports to the U.S. cheaper and the U.S.’s exports to them more expensive. "

Thursday, June 23, 2016

Monday, June 13, 2016

Mass Shooting

Liberals: we need gun control
Conservatives: it's because of terrorism and immigration
Trump: Thank you, I'm awesome

(credits to everybody on my Twitter feed).

Wednesday, March 30, 2016

Foreign Policy

I spent an hour going through Trump's NYT interview on foreign policy.

My takeaways:
1. America is like the poorest country in the world but it should totally built up the military so the rest of the world can rent America's protection. Presumably at $12/hour.
2. Iran is a disaster but they are rich and they should totally buy Boeings.
3. China and Mexico are also super rich.  Xi Jinping totally disrespects Obama, but Trump likes Chinese people because they buy Trump's apartments or something.
4. His uncle from MIT said America stinks at nuclear and cyber warfare.

Saturday, March 12, 2016

Democracy!

People in Iran cast their votes in record numbers last month because they believe the leaders they choose will shape the country's future.

People in America vote for Trump because "he tells it like it is" and "he was great with the Apprentice".


Thursday, January 21, 2016

"Shi'as are not Muslims"

I've heard people mention this many times, even among relative moderates here in Indonesia.  Sometimes it's not about Shi'a, sometimes it's Salafis, Sufis, Wahabis, or others I may never even heard of.  Well my degree is in IT but I've been to a Shi'a prayer once so I'm an authority on this topic (/end sarcasm).  There are differences in practices and traditions between Shi'a and mainstream Sunni, even the shahada (declaration of faith), the first pillar of Islam, is slightly different between the two.

Regardless of the ideological differences, we need to really think about how sectarianism has been the strongest driving force behind the chaos in the Arab world.  When somebody proclaims religious legitimacy, 'my Islam is more Islamic than yours', it creates animosity, and inevitably fuels conflicts.  Islam teaches its adherents to study everything on Earth and in the heavens, and it's up to individual decisions to choose what he/she believes in, but I've never seen scripture giving you, any student of Islam, the right to declare other Muslims as heathens or apostates.

If you're feeling nostalgic, remember how Islam reached its golden age by embracing rich cultural heterogeneity and pursuit of scientific endeavors.  Ibn Sina, the father of modern medicine, al-Khawarizmi, who wrote the foundations of algebra -- they may not be household names but they really should be.  At least they should be household names for Muslim families from Nigeria to Indonesia

What the (Muslim) world needs is more unity in diversity, nation building, and economic, social and scientific pursuits -- and less bickering over tribalism and minor differences in the way we look, speak, and pray.

Tuesday, January 12, 2016

On Sectarianism



If you ever wonder about how the heck the Muslim world gets divided by sectarian lines, Israel vs Palestine, Shia vs Sunni, Kurdish vs everyone else, check out a recent op-ed by former Alaska governor Sarah Palin on President Obama's foreign policy.

"...The whole world weeps waiting for American leadership in these troubled times as Islamic savages commit genocide against the Christians of the Middle East and terrorize innocent people in cities across the globe..."

There are obvious errors and misperceptions: ISIS has primarily killed Shi'as, Yazidis, Kurds, Sunnis that don't pledge allegiance to ISIS, their own people, and so on; they're not committing genocide against Christians because, well, Christians had mostly fled and there's not that many of them left in the battleground.   However the implication of her (somewhat bizarre) rant is clear.  She has tranformed a civil war pitting local tribes and factions within Iraq and Syria, into a total war between Muslim and Christian civilizations.  The entire world is forced to choose sides. That's how sectarianism becomes the defining factor for the world we live in.

We are better than that. Don't fall for this nonsense.