Nobel Prizes and neoliberalism

Turns out that Barack Obama is not the most recent Nobel Peace Prize winner who drinks deeply from the cup of neoliberalism. Liberian President Ellen Johnson Sirleaf wants to sell much of her nation's land to foreign investors, much more than what she's already been selling.

And, much of what she has already sold, or sold rights to, has been to groups like loggers not known for their progressive thinking in general.

So, how peaceful will Liberia be in a decade, when more and more poor farmers, booted off their land and hungry, become unrestful?

And, if she's already been doing this for five years, contra the column's pleas, she's not going to change now.

The lost decade? Since Enron, we've already been in it

We don't need worries about Japan-type deflation. This excellent AP story, for the 10th anniversary of Enron's collapse, titled "The Decade of Lost Faith," says we're already there, if you read to the bottom:

Stocks have barely moved in the decade of lost faith. On the Friday before the Enron bankruptcy, the S&P 500 closed at 1,139. Last Friday it closed 19 points above that. The incomes of many middle-class Americans haven't kept up with inflation. Home prices are still falling.

Yep, that about sums it up. But the rich who were a bit more sneaky, or had better connections than Kenny Boy Lay (though he had connections enough) Bernie Ebbers and Dennis Koslowski, made out like bandits.

Abetted by St. Alan of Greenspan's bubble-inflating, Wall Street was behind the housing shenanigans (and many others):

Wall Street was gripped by what chronicler Roger Lowenstein called a "mad, Strangelovian" logic. Not content to bundle thousands of subprime mortgages into mortgage securities, banks bundled the bundles into something called collateralized debt obligations, or CDOs. Next, they created bundles of bundles of bundles, called CDO-squared.

But, we're at the end now. Not just domestically, but from globalization. As Al Jazeera notes (although it somewhat overlook sub-Saharan Africa) globally, the world is becoming more and more urbanized. And, if there's money to be made by manipulation, developing world sovereign wealth funds will likely want to call the shots themselves.

We had a chance to make the WTO and globalization work for real people in both China and the U.S. Instead, so far, it looks like it's working for neither.

At least for right now, we appear to be about halfway through a lost generation, apologies to Hemingway, Fitzgerald and others aside.

"The big picture here is this is an unwinding of a 20-year debt bubble," said Peter Dixon, global financial economist at Commerzbank. "It's going to be painful, and it's going to be nasty. What policymakers are aiming for is a smoothing of the path."

The bigger picture is that neoliberal economics, and world leaders worshiping at its altar, will struggle to control whose past is smoothest (if they care at all).

US govt overstates productivity

Why? The government doesn’t even have a handle on how much imports, whether manufacturing or services, actually contribute to the economy.

Brilliant!

So, the economy could suck even worse, and perhaps has been for some time, while the current neolib occupant of the White House is no more likely to address this at a structural level, IMO, than his predecessor.

Recession going global next year

That's per the World Bank, which says 2009 will have the first global recession since 1982.

Under 40? Getcha popcorn. This is all new to you.

Some Indian speed bumps on road to globalization

CEO murdered; Tata strike puts Nano on hold or nobody

As standards of living rise more in developing nations, their workers want more of the pie.

In India, that includes murdering a CEO who had apparently read one too many pages from Phil Gramm’s economics textbooks:

Lalit Kishore Choudhary, 47, the head of the Indian operations of Graziano Transmissioni, an Italian-headquartered manufacturer of car parts, died of severe head wounds on Monday afternoon after being attacked by scores of laid-off employees, police said.

Employees had long been demanding better pay and permanent contracts.

Meanwhile, at Tata Motors, the new owner of the Jaguar and Land Rover brands, the company had to stop work on its planned new Nano car, tentatively priced at below $3,000. Tata said it could not guarantee worker safety at its plant in West Bengal due to protests.

Not to condone any such violence, let alone murder, but there are a couple of things to note:
• That’s what Western companies get by being oriented to the lodestone of globalization. Once you outsource operations, let alone sell brand names, it’s tough going back. And, no, countries like Vietnam aren’t realistic alternatives. They don’t have the infrastructure to compete with India or China, and in today’s world of high prices for oil, concrete and steel, it’s simply not realistic to believe they can ramp up that quickly.
• Re India in particular, it is the world’s largest democracy. And, it has a British-derived history of trade unionism that communist countries don’t. You’re going to get protests that China won’t allow.

Is the Allen Group reading this in Lancaster?

I said this already 2-3 years ago, and despite a scoffing idiot or two in the Dallas suburb, soaring oil prices, likely driven by Peak Oil, are crimping the globalization of trade. That, in turn, has to affect the viability, nay, even the necessity of mega-distribution/warehousing centers, like one proposed for a 10-square-mile chunk of land in Lancaster, Dallas, Wilmer and Hutchins.

“If we think about the Wal-Mart model, it is incredibly fuel-intensive at every stage, and at every one of those stages we are now seeing an inflation of the costs for boats, trucks, cars,” said Naomi Klein, the author of “The Shock Doctrine: The Rise of Disaster Capitalism.”

“That is necessarily leading to a rethinking of this emissions-intensive model, whether the increased interest in growing foods locally, producing locally or shopping locally, and I think that’s great.”

This is already starting to play out. Some American countries that had factories in Mexico, but moved to China after the WTO agreements, are bringing work back to Mexico. It’s still not in the U.S., but it’s easier to ship point-to-point when you’re already on the same landmass, rather than constricted to just a few ports.

That, then, lessens the need for such warehouses as the Allen Group.

And, because this is shipping by land, there’s no business for an “inland port” designation, to boot.

Why the move back to Mexico, in numbers? The Times story notes that the cost of shipping a 40-foot container from Shanghai to the United States has risen to $8,000, compared with $3,000 early in the decade. In response, container ships have cut their top speed by nearly 20 percent to save on fuel costs. That, of course, adds significantly to shipping times, which may be of importance in some industries.

Canadian investment bank CIBC World Markets says it’s like a 9 percent surcharge or tariff.

Plus, if a “Kyoto II” greenhouse gas treaty includes India and China (and, in essence, stops U.S. companies from exporting pollution), manufacturing costs there will rise even more.

Winners/losers? American wood is staying home for furniture production. U.S. steel production is up.

Winners and losers could include globalization of food. No more cheap Chilean grapes and cherries in winter here, for example.

And, the U.S. might be an overall loser. Too many industries have shuttered too long here; starting them back up in Mexico, even, after more than a decade in many cases, would be difficult.

Man bites dog: Mattel apologizes to China over recalls

Well, the degradation of both U.S. business and U.S. labor over the almighty cheap foreign worker is now complete. Mattel said it was taking the blame for design flaws and for recalling more toys than necessary.

Yes, one of its recalls was based on design flaws, the one over tiny, swallowable magnets potentially becoming detached from some toys. But, last time I checked, lead paint wasn’t a design flaw. As to that:

In a statement issued by the company, Mattel said its lead-related recalls were "overly inclusive, including toys that may not have had lead in paint in excess of the U.S. standards.

So, Mattel would rather NOT be safe than sorry, instead of kowtowing (how appropriate to use the word concerning the country of its origin) to Chinese government trade and industry officials.

Update, Sept. 26: Now we're getting 200,000 Thomas and Friends toys recalled for lead paint, too; so, definitely contrary to the one comment in posts, I'll repeat that Mattel was kowtowing.

Brazil: World No. 1 beef exporter

In a 2004 post, I noted that Brazil was already reportedly the world’s biggest exporter of chickens, orange juice, sugar, coffee and tobacco.

Add beef to the list, according to the January 2007 National Geographic. With soybeans soon to follow.

Somebody didn’t inform our state’s ranchers about losing top beef honors, I’m sure.

Two months ago, in a related post, I noted that the U.S. had become a net food importer. That’s right, the “breadbasket” is not an overflowing cornucopia.

In comments for that post, Jeff Melcher said he thought it was all “luxury foods” that we were importing. I personally don’t consider out-of-season fruit that much of a luxury. Is the imported beef in your hamburger or on your grill a luxury? The sugar on your cereal? The orange juice at your breakfast table? The chicken breast that’s the “healthy” alternative to the steak?

But, as the NG story points out, it’s coming at a huge price: the increasing deforestation of the Amazon. This has implications for global warming, world weather patterns, species diversity and more.