from Environment Forum:
Fold sustainability into economies, G20 urged
Consensus among sustainability experts at a Toronto conference this week was that world leaders in the Group of 20 nations face a fecund opportunity to make gains integrating environmental concerns with all other levels of economic development.
"Finance ministers are the real environment ministers. Environment ministers have weak, minor voices at the table at which economic decisions are made," said chair Maurice Strong, President of the Council of the United Nations University for Peace, former Secretary-General of the United Nations Conference on the Human Environment, and former president of Power Corporation, head of Petro Canada and Ontario Hydro.
"Environmentalists cannot run the economy," Strong said.
Economist Sylvia Ostry, former Chief Statistician at Statistics Canada and a member of the influential Washington-based financial advisory body the Group of Thirty says the best contribution the G20 could make to sustainable development is to strike a new institution with experts from a variety of backgrounds.
"The WTO has a number of ways of dealing with this integration," she said, pointing to the Integrated Framework which is comprised of the WTO and the World Bank and other institutions. "So it's perfectly possible in my view for the G8 and the G20 to ... establish an eminent persons group of experts in this. Let them be invited, it would be easy, to the WTO and begin to do the basic research on this and then begin a policy debate."
She says full integration is vital.
Chicago and the toddlin’ recovery
It may not get as much attention as the monthly employment report or GDP figures, but the U.S. Federal Reserve Bank of Chicago’s gauge of the national economy has a good track record of distinguishing economic expansions from recessions. And it’s suggesting that the U.S. recovery may be wobbling.
Over at the econbrowser blog, economist James Hamilton points us to a recent research paper that examines how accurate the various economic indicators are at telling us when the economy is growing or contracting. The Chicago Fed’s national index was one of the best. And Monday’s report shows it faded in October.
Not only that, but its three-month moving average fell to -0.91 in October from -0.67 in September, declining for the first time in 2009. That drop was especially significant because the Chicago Fed says a move below -0.70 in the three-month moving average following a period of economic expansion indicates an increasing likelihood that a recession has begun.
Of course, the people who are tasked with determining when recessions begin and end haven’t called the latest one over yet. So is this report showing a speed bump on the way to a recovery or something more ominous?
Fed all talk, no action?
BofA Merrill Lynch Global Research economist Ethan Harris thinks all the talk of a Federal Reserve rate hike is just that — talk. Harris, a former Federal Reserve Bank of New York economist, said much of the recent hawkish commentary has come from presidents of the regional Fed banks, and that may not be indicative of the thinking on the Fed’s board.
“The signals don’t come from Reserve Bank Presidents or advisers,” Harris wrote in a note to clients. “They come from either the overall committee — in the form of the official statements — or from the core of the committee — that means (Chairman Ben) Bernanke, (Vice Chairman Donald) Kohn, and to a lesser extend, New York President (William) Dudley.”
The Fed starts its two-day policy-setting meeting on Tuesday, and Harris is certainly not alone in thinking they’ll stay the course, keeping benchmark interest rates near zero. In fact, BofA Merrill thinks it will be the European Central Bank that hikes before the Fed.
“The bottom line is that faced with roughly the same economic backdrop — very low core inflation, moderate headline inflation and a large but slowly closing output gap — we expect the ECB to be more hawkish than the Fed,” they wrote. “We expect a replay of the summer of 2008, when the ECB hiked in response to high headline inflation, but Bernanke held back the Fed for fear of fragile financial conditions. Of course, thankfully, a replay of the fall of 2008 is unlikely.”
To talk the falling dollar is as much as Fed chair Bernanke will do, and hopefully have his comments endorsed favorably by Fed friendly media – though not the markets, who understand the dangerous game Washington is playing.At best, the dollar’s 20% fall against gold the past half year may be called benign neglect, and it’s a historically good bet investors can expect further decline. Not the falling dollar, or the stock market, unemployment nor the price of things, claim Mr. Bernanke’s principle worry. That’s reserved for the banks; the banks, the banks. Tight money worries for investors? Not to worry.Luis de Agustin
Separate checks, please
Jack Ablin, the chief investment officer at Harris Private Bank, has come up with an interesting way of looking at the U.S. healthcare debate – in particular, why does health care cost so much. His idea? Think of it like going out for dinner and splitting the bill with hundreds of thousands of other diners versus paying for your own meal. Would you order the steak and champagne or the chicken and a glass of water? Ablin enlisted the help of the owner of Aqua Grill in Ponte Vedra Beach, Florida, to help him find out.
It involved sifting through three years of guest checks and comparing the average spent per patron when a bill was split evenly versus the average when separate checks were tabulated.
“The results were dramatic, but not surprising,” Ablin wrote in a note to clients. “On average, splitting the bill costs diners about 20 percent more than paying their own check. The difference would be undoubtedly wider with large parties. Given that we spend about $2.5 trillion on health care annually, imagine the cost savings if we migrated to high-deductable policies and health savings accounts. Congress needs to look at shifting health care payments away from third-party payers and to individuals, using a combination of high-deductible health insurance policies and privately-directed health savings accounts.”
So would you sit at the table and enjoy your chicken and water while the mother and kids on the other side of the table starved to death?
The long, long slog back to full U.S. employment
In case you weren’t depressed enough about the state of the U.S. labor market and the 7.2 million jobs lost since the start of the recession, check out this factoid from JPMorgan economist Michael Feroli:
“We would need payroll gains of 200,000 per month every month for three straight years just to get back to late 2007 levels of employment, and even that calculation ignores the labor force growth over the intervening years.”
Take your pick of bad September job news: the average workweek declined; average hourly earnings increased a paltry 0.1 percent; the broadest measure of unemployment and underemployment rose to 17 percent; and the average duration of unemployment hit an all-time high of 26.2 weeks.
Another kind of death panels
U.S. Representative Barney Frank has never been shy about expressing his opinions. His opening remarks at a hearing he chaired with Treasury Secretary Timothy Geithner on Wednesday was no exception. Frank poked fun at a political squabble over healthcare reform as he detailed his position on what to do about non-bank financial firms considered “too big to fail.”
“There will be death panels enacted by this Congress, but they will be for non-bank financial institutions that will not be considered too big to die. I say that because we have this euphemism that we are going to be ‘resolving’ these institutions. It has not been my experience that when someone says they are going to resolve something, they kill it. We are talking about dissolution, not resolution. We are talking about making it unpleasant for the entities. This is not a fate people will want.”
Geosota:
I know a Chinese woman who was the Chinese national champion parachutist. She tells of servants placed in her service by the govt there to allow her to jump every day all day. The enormous differential in paychecks from there to here is the very dynamic which attracts greedy businessmen and their political enablers. In the eyes of these folks, the American worker has little or no value but undermines their profits and success.
Personally, I try very hard to avoid buying anything made in China or that part of Asis in general. I don’t want to see any of my money end up in the pockets of people who use our markets but won’t give anyone a job with a reasonable wage.
In America , if someone wants to buy a home, food, a car, insurances, clothing, furniture, utilities, vitamins, protection from identity theft, pay taxes and all the other things that our own government says we should have,,,we’d need $100000 a year. Yeah,, those $20000 a year guys are real backbreakers.
Congratulations or condolences for Bernanke?
Congratulations, Ben Bernanke. It looks like a second term as Federal Reserve chairman is in your future. But considering the tasks before him, is this a blessing or a curse?
Greg Mankiw, the Harvard University economics professor and former adviser to President George W. Bush, summed it up nicely on his blog:
“I extend my congratulations to the President for a fine decision and my condolences to Ben for having the spend the next four years overworked and underpaid.”
So what do you think? Best job in the world? Or worst?
I am glad Mr Bernanke will serve another term! He is the most experienced person for the job, and he has a good handle on the damn mess that is our economy. Maybe he can get us out of it!
Thanks, John DeFlumeri Jr
in Clearwater, Fla.
Jackson Hole policy elite met by large stuffed bear
Bernanke’s tone may have been slightly more optimistic today — but the first thing policy-makers from around the world see as they enter the conference room for the Fed’s annual Jackson Hole symposium is a large stuffed bear.
Bernanke told the conference on Friday morning that the prospects for return to global growth appear “good” in the near-term — his clearest signal yet that he thinks the global recovery is at hand.
The ECB’s Trichet, on the other hand, expressed uneasiness at what he saw as premature talk of a return to normal from a financial crisis.
Buy now, pay later? It’s later.
Buy now, pay later was the mantra of U.S. consumers during a debt-fueled binge earlier this decade.
Banc of America Securities-Merrill Lynch economists think getting U.S. household debt-to-income back to the long-term trend will require eliminating $1.75 trillion in debt, assuming no change in disposable income. That will probably take years.
And that’s their more conservative forecast, just taking the ratio from its current level of 131 percent down to 115 percent. To get back to the average seen in the 1990s, $4.35 trillion in debt would have to be eliminated.
”Either way you look at it, U.S. households will remain mired in a period of balance sheet repair,” the economists wrote in a note to clients. “And, the continued debt elimination necessary to reach a more sustainable household balance sheet means that the ability of the U.S. consumer to lead the recovery on a sustained basis will be limited. This is why we do not expect the consumer to lead the economy out of the recession. This is also one of the risks to the view that th U.S. economy is on the verge of a V-shaped recovery.”
Now is the time more than ever for anyone with Debt to go Bankrupt! Do you realty think the goverment will ever pay off it’s debt? lol. Dont be a sucker! remember when you no longer have anything to loose there power over you is gone!
Rebalance or else, IMF says
The International Monetary Fund has been warning for years about the risk of global imbalances — namely huge U.S. current account deficits and surpluses in China. Today its chief economist offered a grim view of how the economy might suffer if the rebalancing act fails.
Olivier Blanchard says unless the United States can refocus its economy more toward exports and China more toward imports, the U.S. recovery will probably be anemic because American consumers aren’t going to quickly revert back to their pre-crisis free-spending ways.
And if the recovery is anemic, there will no doubt be intense political pressure for more stimulus, particular in 2010 when most members of Congress face re-election.
“Were that to happen, one can imagine various scenarios: political pressure may be resisted, the fiscal stimulus phased out, and the U.S. recovery would then be very slow. Or fiscal deficits might be maintained for too long, leading to issues of debt sustainability, worries about U.S. government bonds and the dollar, and causing large capital flows from the United States. Dollar depreciation may take place, but in a disorderly fashion, leading to another episode of instability and high uncertainty, which could itself derail the recovery,” Blanchard wrote in an article released by the IMF.
Blanchard builds a case for rebalancing being in everyone’s best interest, including China’s. What’s your take? Will China and the United States get this right?
Ban the Federal Reserve. Put money creation back in the hands of the people (a truly representative government)by creating a government bank for the purpose of money creation. Use government created money to rebuild a sustainable and viable economy working toward full employment. Rebuild the economy. Create the majority of economic activity to be within the country itself and support small, independent businesses. That’s just for starters.
