By Nick Rizzo
October 17, 2011

A few of the links available on

Schauble admits that banks will take bigger losses on Greek loans — Guardian

Another German admits the obvious: the EU’s crisis will last into next year — Bloomberg

Citi’s accounting adjustment hides some “truly terrible trading figures” — FT Alphaville

Wells Fargo revenue is down, earnings are up, amidst an i-banking “bust” — Dealbook

CalPERS has lost $78 million on vineyard investments — Sacramento Bee

Enron’s former president is a billionaire — WSJ Deal Journal

America’s biggest growth industry: declinism — Reuters

Apple sold 4 million iPhone 4Ss in three days, the highest sales for a phone everAppleInsider

Obama will make anti-Wall Street anger a “central tenet” of his campaign — The Washington Post

Would you like to see a video of Herman Cain singing John Lennon’s “Imagine” with lyrics about pizza? Of course you would — The Daily Beast


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Re: declinism. I’m old enough to remember the national angst at inflation, gas shocks, and Iranian hostage drama in the late 1970s, when everyone was certain that the Arab world would come to dominate the world. And I remember the late 1980s/early 1990s, when it seemed certain that the Japanese were smarter, better builders, and wealthier than the US, and would certainly dominate world affairs by Monday morning.

China may well become the dominant power in the future (or it may not), but I’m going to suggest giving it a few decades before even attempting to draw that conclusion. Do we really forget those times when we tried to write similar eulogies, only to be proven quite wrong? And they weren’t that long ago, either.

Posted by Curmudgeon | Report as abusive

Curmudgeon, in the metamorphosis of a caterpillar into a butterfly it is impossible to imagine the result when the change begins. Even in its final stages, as it emerges from the cocoon, one might easily not recognize the scrawny, soggy insect. We are merely in the mid-game of an economic shift that began when Al Gore invented the Internet in the 90s. (Or perhaps in the 80s when Steve Jobs created the Macintosh?) Hard to guess where it is taking us.

If you look back a century, the Luddites were revolting against the advent of the automated loom. Factories were torched by skilled hand-weavers who found themselves out of a job. Don’t be shocked if we see similarly rooted riots this time through as well…

That said, it would be shocking (and very bad for the US) if China DIDN’T surpass the US economy within a few years. THEY HAVE A POPULATION THAT IS FOUR TIMES OURS!!! This isn’t the sparsely-populated (if oil-rich) Middle East. This isn’t Japan, a country less than half our size (crowded onto a small chain of islands with limited natural resources). This isn’t the EU, a substantial conglomerate but one pulled a dozen different directions by a dozen different heads.

China should have a GDP that is twice that of the US within one generation. Their per capita GDP should be roughly comparable to the US within two generations.

A billion people entering the 20th (and soon the 21st) century. Why is this thought to be a bad thing?

Posted by TFF | Report as abusive

I love John Lennon, but I really hate “Imagine,” so I think a pizzafied version by Herman Cain would probably be an improvement. However, I’m not going to take a chance on finding out I’m wrong.

Posted by AndrewBW | Report as abusive

@TFF, agreed, but conventional wisdom thought it was inevitable with the Arab oil nations and Japan, too. The fatal flaw that prevents preeminence is often not seen until after the fact, too.

Posted by Curmudgeon | Report as abusive

@TFF, we’re always too ready to write ourselves off as old, uninspired, or hopelessly corrupt. I simply think it’s too early to draw that conclusion.

Posted by Curmudgeon | Report as abusive

“conventional wisdom thought it was inevitable with the Arab oil nations and Japan, too”

Conventional wisdom focuses far too much on “trend” and too little on “fundamentals”. There was never any reason for the Japanese economy to overtake ours, not with a population that is less than half the size. (Though their per-capita wealth is similar, I believe? Perhaps even superior?)

The same fundamentals will ensure that China eventually surpasses the US in total GDP. THEY HAVE FOUR TIMES THE POPULATION!!!

That fact is pure demographics. It has nothing to do with any moral flaw in our society. Though I am admittedly feeling rather old and uninspired this morning — does that also mean I am hopelessly corrupt?

I do believe people worry far too much about whether or not they are “preeminent”. Aren’t there more important practical and moral concerns to consider?

Posted by TFF | Report as abusive

Tff, china is set to crash in the 1-2 year period. The us is still the dominant player in virtually every field. If it could survive Carter it will survive Obama. china-continued-boom-or-bursting-bubble. html hinese-city-that-first-provided-cheap-la bour-to-foreign-companies-sparked-a-fina ncial-crisis-2011-10

Posted by Danny_Black | Report as abusive

“Tff, china is set to crash in the 1-2 year period.”

Yeah, strong signs of that.

Still, they have FOUR TIMES THE POPULATION of the US. They cannot help but pass the US in GDP some time in the near future. Our personal productivity would need to be 4x theirs for that not to happen, and that simply isn’t a sustainable margin. Not even for a “dominant player” like the US.

Posted by TFF | Report as abusive