Frankly, all of that is fine with me. I’m not overly looking forward to a couple more lost decades, but frankly, that’s better than some of the alternatives. Still, I’ve got to say that it’s hard to see how international consumers can become middle class in the way that most Americans are commonly middle class without America in turn benefitting—hugely—from the rebalancing of global wage scales. Which is to say that while China has a lot going for it, its best asset is the fact that it has a lot of people that it can get to do work on the cheap, but that can only continue for as long as those people continue to work cheaply. At the point when overseas labor is no longer cheaper than American labor, you will naturally see American companies move their operations back home. To the benefit of the American economy. Because why go to the trouble of out-sourcing unless it’s saving you big-time?
Of course, you string this logic out to its logical conclusion, and you can come to some pretty astonishing conclusions. Like the rise of Mexico and the Philippines—both conditions predicted in The Economist earlier this month based on international wage rebalancing. Which is fine, I suppose, unless you’re a former Chinese peasant farmer turned factory worker whose job gets moved to Manila. Then the only real solution is the serious development of a domestic consumer economy in the PRC and/or massive domestic infrastructure investment…
I guess my bottom line here is that the death of the American economy has been written a few times before. I’m gonna wait, however, before I assume it’s a done deal. Because, bottom line, the sword of globalization cuts two ways (at least) , and so the same things that are hurting the American economy now can and will turn and bite others as they too begin to grow in the same way that America has grown. The solution is increased wages for consumers and the increased development of a cycle of domestic production and consumption, but that kind of thing is only possible when you actually pay your people something. So far what we’ve seen is the willingness to move operations to a cheaper area of production long before we even consider paying people a living wage.
See, the thing is the Republican leadership in Congress keeps floating these talking points about how the President and Democrats willing to send the country over the fiscal cliff if they have to, and I believe them. But I’m also starting to think that they’ve realized that if they actually let that happen, the GOP will have failed its constituents badly, and there are a Hell of a lot of members of Congress who, bottom line, don’t have the stones to really follow through on a suicide pact like that.
Not that I’m encouraging them to, mind you.
Still, this is why we’ve heard talk of defections from the Right over the issue of the Cliff, and it’s also why I’m starting to think we’re going to get some kind of last minute, non-disastrous compromise. Because when it comes to this kind of stuff, I think I trust the Wall Street Journal the most, based more on their connections to the finance industry than anything else, and they’re saying that a compromise is possible. Moreover, we haven’t seen a big selloff in the securities markets yet, and if the country really is going to go over the Fiscal Cliff, a major selloff is a certainty.
And by that, I mean a major selloff.
If you’re like me, you were probably more than a little confused when Apple decided to drop Google Maps earlier this year with the rollout of it latest iOS operating system for the iPhone. Lots and lots of folks were annoyed—highly annoyed—because the Google Maps app that was previously on the iPhone worked well, whereas the new Apple Maps app sucked. Folks complained, but I personally figured, well, I guess what I need to do is download Google Maps off the App Store, and then I’ll be good to go with the previous software. Only the previous software wasn’t available in the App Store, and well, I confess that that’s when I started complaining, too.
This week, Google finally unveiled a new version of its Maps app for the iPhone, and as you might expect, it’s already the most downloaded app in the Apple marketplace. Now the only thing that’s weird about any of this is that it took so long for it to happen.
The analysis of the situation that I liked came from Slate.com. The problem, apparently, as far as Apple was concerned, was that the Google Maps app for Android was markedly superior to the one that Google issued for the iPhone—a ploy that seemed targeted at getting customers to choose Android devices over ones made by Apple. Since Apple’s primary selling point is the size and variety of its App Store, the superiority of the Android app was a serious problem. It’s hard to argue that you have the best apps when the one that most people like the best—the Maps app—is markedly inferior to the other guy’s product. So by issuing a new operating system and cutting Google’s inferior product off at the knees, Apple was encouraging someone—anyone—to develop a better maps app, one that might actually be the equal of the Maps app that Google issued to the Android.
Now, at last, that seems to have happened. Mission Accomplished.
These guys wanted to kill Justin Bieber and cut off his balls. That’s a little gay, right? I mean, it seems like a very aggressive, alpha-male kind of a move—exactly the thing you might expect from a guy in prison for rape and murder—except that it’s obvious that he had a thing for Bieber. Right? But wouldn’t having a crush on Justin Bieber make you a target in prison?
I guess I just don’t understand the vibe very well.
In any event, the whole thing is as scary as Hell. Maybe even more so because it’s so nonsensical.
Lastly, China and Japan are at a military standoff now over the Senkaku (Diaoyu) Islands. Chinese ships and surveillance planes have been operating in the area for awhile now, and yesterday a Chinese plane overflew the islands, violating airspace claimed by Japan. The Japanese launched eight (!) F-15's in response, and now the two sides are at loggerheads. What’s worse is that the situation is exacerbated by a couple of factors. First, Japan holds elections in two days, and this incident can only help the more militant Japanese party, the Liberal Democrats, whose leader was already expected to win—and advocate a stauncher stance on this issue in particular and a stronger military overall. On the other side are the Chinese, who yesterday celebrated the 75th anniversary of the Nanjing Massacre, one of the more infamous events from the Japanese invasion of China during World War II.
You wouldn't think that anything would come of something like this, but it’s a dangerous spot, and personally, I think that anything that involves this much national prestige and face, especially among rival neighbors competing for influence in a limited area, is extremely dangerous. China is a country that views itself as only now rising from the humiliation of the last hundred years or so--a humiliation that was inflicted by European powers, yes, but also by Japan. Especially by Japan.
That in itself is worth some concern.
|An F-15. This one is American.|
Added to it, though, is the very idea of Japanese nationalism, which, okay, has been dormant for sixty years but which cannot possibly stay dormant forever. Japanese nationalism--the concept of Yamato Spirit, which in itself can be an excuse to attack--must look pretty appealing to a certain kind of Japanese patriot. I mean, here is a country that is an economic colossus but in which young men sleep with pillows draw with naked cartoon characters. Where the birth rate is falling, where the economy has been stagnant for over a decade. Under those circumstances, I can't help but believe that a certain kind of patriot must look at this thing with China as exactly what the doctor ordered.
And that is scary. Or at least worthy of concern.
And that’s all I've got. Have a good weekend.