Gerald Celente Predicts Revolution, Food Riots, Tax Rebellions By 2012

Saturday, November 22nd, 2008

I wasn’t familiar with Gerald Celente, CEO of Trends Research Institute, but he apparently predicted the 1987 stock market crash, the fall of the Soviet Union, the 1997 Asian Currency Crisis, and the subprime mortgage collapse — and now he predicts revolution, food riots, and tax rebellions in the US by 2012:

I’m not sure what predictions he’s made in the past that did not come to pass; let’s hope this ends up being one of them.

What should the government do?

Saturday, November 22nd, 2008

What should the government do? Wrong question. Mencius Moldbug explains:

Most people, when they take a whack at designing a government, tend to ask themselves: what should the government do? Of course this is the wrong question. The right question is: what will the government do?

For example, most democratic citizens are firm believers in the concept of limited government. In the all-curing magic black bag of democracy, limited government is the first-line ointment. Apparently a government can prevent itself and its successors indefinite from doing bad things, just by writing a note to itself that says “don’t do bad things.”

The key is that word should:

When you say your government “should do X,” or “should not do Y,” you are speaking in the hieratic language of democracy. You are postulating some ethereal and benign higher sovereign, which can enforce promises made by the mere government to whose whims you would otherwise be subject. In reality, while your government can certainly promise to do X or not to do Y, there is no power that can hold it to this promise. Or if there is, it is that power which is your real government. Your whining should be addressed to it.

Moldbug hopes to side-step this problem by turning governments into profit-maximizing landlords, a system he calls neocameralism:

The neocameralist structure of Patchwork realms, which are sovereign joint-stock companies, creates a different kind of should. This is the profitable should. We can say that a realm should do X rather than Y, because X is more profitable than Y. Since sovereign means sovereign, nothing can compel the realm to do X and not Y. But, with an anonymous capital structure, we can expect administrators to be generally responsible and not make obvious stupid mistakes.

Another way to say this is that a realm is financially responsible. The general observation here is that, to paraphrase Tolstoy, financially responsible organizations are all alike. By definition, they do not waste money. By definition, their irresponsible counterparts do, and by definition there are an infinite number of ways to waste money. Think of a rope: a financially responsible organization is a tight rope. It only has one shape. But if there is slack in the rope, it can flap around in all kinds of crazy ways.

It is immediately clear that the neocameralist should, the tight rope, is far inferior to the ethereal should, the magic leash of God. (Typically these days arriving in the form of vox populi, vox Dei. Or, as a cynic might put it: vox populi, vox praeceptori.)

Given the choice between financial responsibility and moral responsibility, I will take the latter every time. If it was possible to write a set of rules on paper and require one’s children and one’s children’s children to comply with this bible, all sorts of eternal principles for good government and healthy living could be set out.

But we cannot construct a political structure that will enforce moral responsibility. We can construct a political structure that will enforce financial responsibility. Thus neocameralism. We might say that financial responsibility is the raw material of moral responsibility. The two are not by any means identical, but they are surprisingly similar, and the gap seems bridgeable.

This creates a bit of a paradox for libertarians:

Libertarians in particular may have a great deal of trouble understanding how an authoritarian, omnipotent and omniscient sovereign can be expected to create a free society. The fundamental diagnosis of libertarianism — that today’s democratic governments are much larger and much more intrusive than they should be — is obviously correct. The remedy proposed, however, does not have anything like a track record of success.

In fact, I believe the libertarian opposition to sovereignty, dating back to Locke, is a major cause of modern big government. Our present establishments, not to mention our tax rates, dwarf any divine-right monarchy in history. The attempt to limit the state, if it has any result, tends to result in an additional layer of complexity which weakens it and makes it more inefficient. This inefficiency gives it both the need and the excuse to expand.

So we may ask: why does the post office suck? Not because it is sovereign, but because it is not financially responsible. Its freedom to be wasteful and inefficient is what gives it that familiar Aeroflot feel. (The bankrupt airlines, such as United, feel more like Aeroflot every year.) When we postulate a sovereign authority which is financially responsible, like a Patchwork realm, we have no reason to expect it to display these pathologies of government. In particular, we cannot expect it to waste resources in order to pointlessly annoy its residents, a form of inefficiency in which democratic regimes seem to positively revel.

The sight of a financially responsible sovereign, even the thought-experiment of one, is a good lesson for libertarians, because it reminds us what a healthy government actually is. Today’s democratic megastates are to healthy sovereigns as liver cancer is to liver. If you find liver cells invading every other organ and crushing them all into goo, it is only natural to think that the cure might be a drug that was lethal to liver cells. But you actually need a liver. You need to kill the cancer, not the liver.

Controversial J.C. Leyendecker

Saturday, November 22nd, 2008

Donald Pittenger reviews a new book on the controversial J.C. Leyendecker(1874-1951), creator of the Arrow Collar/Arrow Shirt man and “more Saturday Evening Post covers than Norman Rockwell”:

Both the book and Leyendecker are controversial. Leyendecker was almost surely (evidence is circumstantial, but strong) a closet homosexual who lived with Charles Beach, the main model for the Arrow advertisements (that’s him in the book cover illustration, above). In this autobiographical book, his fellow New Rochelle resident Norman Rockwell devotes Chapter 9 to Leyendecker’s odd living arrangement that included his brother, illustrator F.X. Leyendecker who died of dissipation in 1924, and never-married sister Mary who left the mansion shortly after F.X.’s death. Eventually Beach gained control of most household affairs, turning an already shy Joe Leyendecker into a recluse.

Somalia’s Pirates Flourish in a Lawless Nation

Friday, November 21st, 2008

A few weeks ago the New York Times published an article on how Somalia’s Pirates Flourish in a Lawless Nation:

But one particular line of work — piracy — seems to be benefiting quite openly from all this lawlessness and desperation. This year, Somali officials say, pirate profits are on track to reach a record $50 million, all of it tax free.

“These guys are making a killing,” said Mohamud Muse Hirsi, the top Somali official in Boosaaso, who himself is widely suspected of working with the pirates, though he vigorously denies it.

More than 75 vessels have been attacked this year, far more than any other year in recent memory. About a dozen have been set upon in the past month alone, including a Ukrainian freighter packed with tanks, antiaircraft guns and other heavy weaponry, which was brazenly seized in September.

The pirates use fast-moving skiffs to pull alongside their prey and scamper on board with ladders or sometimes even rusty grappling hooks. Once on deck, they hold the crew at gunpoint until a ransom is paid, usually $1 million to $2 million. Negotiations for the Ukrainian freighter are still going on, and it is likely that because of all the publicity, the price for the ship could top $5 million.

In Somalia, it seems, crime does pay. Actually, it is one of the few industries that does.

“All you need is three guys and a little boat, and the next day you’re millionaires,” said Abdullahi Omar Qawden, a former captain in Somalia’s long-defunct navy.

People in Garoowe, a town south of Boosaaso, describe a certain high-rolling pirate swagger. Flush with cash, the pirates drive the biggest cars, run many of the town’s businesses — like hotels — and throw the best parties, residents say. Fatuma Abdul Kadir said she went to a pirate wedding in July that lasted two days, with nonstop dancing and goat meat, and a band flown in from neighboring Djibouti.

“It was wonderful,” said Ms. Fatuma, 21. “I’m now dating a pirate.”

This is too much for many Somali men to resist, and criminals from all across this bullet-pocked land are now flocking to Boosaaso and other notorious pirate dens along the craggy Somali shore. They have turned these waters into the most dangerous shipping lanes in the world.

I find this point of view peculiar:

Even if the naval ships manage to catch pirates in the act, it is not clear what they can do. In September, a Danish warship captured 10 men suspected of being pirates cruising around the Gulf of Aden with rocket-propelled grenades and a long ladder. But after holding the suspects for nearly a week, the Danes concluded that they did not have jurisdiction to prosecute, so they dumped the pirates on a beach, minus their guns.

Sea captains have grown soft. In the past, any ship from any nation would execute pirates.

It’s pretty clear that Somali “authorities” are in on the game:

“Believe me, a lot of our money has gone straight into the government’s pockets,” said Farah Ismail Eid, a pirate who was captured in nearby Berbera and sentenced to 15 years in jail. His pirate team, he said, typically divided up the loot this way: 20 percent for their bosses, 20 percent for future missions (to cover essentials like guns, fuel and cigarettes), 30 percent for the gunmen on the ship and 30 percent for government officials.

Not long after the New York Times piece ran, pirates seized a Saudi supertanker bearing more than $100 million worth of crude a few hundred miles off the Kenyan coast:

U.S. Navy officials said the hijacking was unprecedented for its distance from shore and the size of its target — a ship about the length of a U.S. aircraft carrier. The attack appears also to be the first significant disruption of crude shipments in the region by pirates.
Pirates off the Somalia coast have attacked 26 vessels and taken hostage 537 crew members in the three months ended Sept. 30, according to the International Maritime Bureau, a maritime-crimes watchdog. They have raked in an estimated $18 million to $30 million in ransom so far this year, according to a report last month by Chatham House, a London-based think tank — a figure that may be driving the upsurge in attacks.

Yeah, I suspect the $30 million in ransoms may be driving the upsurge in attacks.

The Indian Navy has responded, and its INS Tabar sank a pirate “mother ship” after it failed to stop for investigation and opened fire instead:

The Indian navy said the Tabar spotted the pirate vessel while patrolling 285 nautical miles (528km) south-west of Salalah in Oman on Tuesday evening.

The navy said the pirates on board were armed with guns and rocket propelled grenade launchers.

When it demanded the vessel stop for investigation, the pirate ship responded by threatening to “blow up the naval warship if it closed on her”, the statement said.

Pirates then fired on the Tabar, and the Indians say they retaliated and that there was an explosion on the pirate vessel, which sank.

“Fire broke out on the vessel and explosions were heard, possibly due to exploding ammunition that was stored in the vessel,” the Indian navy said.

Some of the pirates tried to escape on two speedboats. The Indian sailors gave chase but one boat was later found abandoned, while a second boat escaped.

INS Tabar has been patrolling the Gulf of Aden since 23 October, and has escorted 35 ships safely through the “pirate-infested waters”, the statement said.

Last week, helicopter-borne Indian marine commandos stopped pirates from boarding and hijacking an Indian merchant vessel.

Regenerating a Mammoth for $10 Million

Friday, November 21st, 2008

There’s talk of Regenerating a Mammoth for $10 Million, which really isn’t all that expensive:

A scientific team headed by Stephan C. Schuster and Webb Miller at Pennsylvania State University reports in Thursday’s issue of Nature that it has recovered a large fraction of the mammoth genome from clumps of mammoth hair. Mammoths, ice-age relatives of the elephant, were hunted by the modern humans who first learned to inhabit Siberia some 22,000 years ago. The mammoths fell extinct in both their Siberian and North American homelands toward the end of the last ice age, some 10,000 years ago.

Dr. Schuster and Dr. Miller said there was no technical obstacle to decoding the full mammoth genome, which they believe could be achieved for a further $2 million. They have already been able to calculate that the mammoth’s genes differ at some 400,000 sites on its genome from that of the African elephant.

There is no present way to synthesize a genome-size chunk of mammoth DNA, let alone to develop it into a whole animal. But Dr. Schuster said a shortcut would be to modify the genome of an elephant’s cell at the 400,000 or more sites necessary to make it resemble a mammoth’s genome. The cell could be converted into an embryo and brought to term by an elephant, a project he estimated would cost some $10 million. “This is something that could work, though it will be tedious and expensive,” he said.

There have been several Russian attempts to cultivate eggs from frozen mammoths that look so perfectly preserved in ice. But the perfection is deceiving since the DNA is always degraded and no viable cells remain. Even a genome-based approach would have been judged entirely impossible a few years ago and is far from reality even now.

Still, several technical barriers have fallen in surprising ways. One barrier was that ancient DNA is always shredded into tiny pieces, seemingly impossible to analyze. But a new generation of DNA decoding machines use tiny pieces as their starting point. Dr. Schuster’s laboratory has two, known as 454 machines, each of which costs $500,000.

Another problem has been that ancient DNA in bone, the usual source, is heavily contaminated with bacterial DNA. Dr. Schuster has found that hair is a much purer source of the host’s DNA, with the keratin serving to seal it in and largely exclude bacteria.

A third issue is that the DNA of living cells can be modified only very laboriously and usually at one site at a time. Dr. Schuster said he had been in discussion with George Church, a well-known genome technologist at Harvard Medical School, about a new method Dr. Church has invented for modifying some 50,000 genomic sites at a time.

Steve Rose on how Dubai’s bubble burst

Friday, November 21st, 2008

Steve Rose on how Dubai’s bubble burst:

It has finally happened: the Dubai bubble has burst. Architecture-spotters like myself have looked on in amazement, or rather incredulity, at the way the tiny emirate has continued to unveil ever grander construction projects — taller skyscrapers, huger hotels, vaster artificial islands — in apparent defiance of the global credit crunch.

Now, that crunch has hit home. This week’s Architect’s Journal reports that “architects and developers in Dubai are freezing recruitment and making redundancies as the emirate’s real-estate market begins to crumble.” Large developers in Dubai are laying off staff, including Emaar the company behind the Burj Dubai, the world’s tallest structure, the magazine reports. Other headline-grabbing projects like the Palm Deira, the next artificial island planned off the coast, are on hold indefinitely, and foreign architects and construction specialists out there, such as RMJM and Ramboll Whitbyird, are making staff cuts or freezing recruitment as a result, says the AJ.

According to one British architect I spoke to, who was in Dubai just 10 days ago, the situation is even worse than that. “Projects are being pulled left right and centre,” he said. “Unless they’ve been funded by a sovereign wealth fund, they’re being pulled. A lot of things have to be redesigned more cheaply, to sell at lower prices. Where people have made first down payments on projects, they’re not making the second one. And a lot of what has been completed will be standing empty.”

Not that anyone in Dubai will officially admit any of the above.

Dubai’s “build it and they will come” philosophy had worked spectacularly:

Remember when David Beckham was buying a house on the Palm? How many people have seen him there since? Still, the publicity worked: properties on the Palm changed hands for huge sums before they were even built, peaking at a preposterous £5m. Today those houses are apparently closer to £1.8m, down from £2.7m just two months ago.

Reality however, has finally come to town: the Dubai Financial Market — the general stock index — has fallen from a high of 6,315 earlier this year to just 2,012 yesterday. Emaar’s share price has plummeted 79% in less than a year; according to some estimates, property prices have fallen by as much as 49% in parts of the Dubai market. The overall figure is much lower, in the region of 4%, but this is a place that’s become accustomed to its figures only going in one direction and a lot of people are being caught out by the turnaround.

So now, it’s more a case of “don’t build it, because nobody can afford to come.”

Scientists Say Copernicus’ Remains, Grave Found

Friday, November 21st, 2008

Scientists Say Copernicus' Remains, Grave Found:

Polish archaeologist Jerzy Gassowski told a news conference that forensic facial reconstruction of the skull, missing the lower jaw, his team found in 2005 buried in a Roman Catholic Cathedral in Frombork, Poland, bears striking resemblance to existing portraits of Copernicus.

The reconstruction shows a broken nose and other features that resemble a self-portrait of Copernicus, and the skull bears a cut mark above the left eye that corresponds with a scar shown in the painting.

Moreover, the skull belonged to a man aged around 70 — Copernicus’s age when he died in 1543.

”In our opinion, our work led us to the discovery of Copernicus’s remains but a grain of doubt remained,” Gassowski said.

So, in the next stage, Swedish genetics expert Marie Allen analyzed DNA from a vertebrae, a tooth and femur bone and matched and compared it to that taken from two hairs retrieved from a book that the 16th-century Polish astronomer owned, which is kept at a library of Sweden’s Uppsala University where Allen works.

”We collected four hairs and two of them are from the same individual as the bones,” Allen said.

Copernicus was known to have been buried in the 14th-century Frombork Cathedral where he served as a canon, but his grave was not marked. The bones found by Gassowski were located under floor tiles near one of the side altars.

Japan’s Latest Fashion Has Women Playing Princess

Friday, November 21st, 2008

Japan's Latest Fashion Has Women Playing Princess:

Ms. Yamamoto is a hime gyaru, or princess girl, a growing new tribe of Japanese women who aim to look like sugarcoated, 21st-century versions of old-style European royalty. They idolize Marie Antoinette and Paris Hilton, for her baby-doll looks and princess lifestyle. They speak in soft, chirpy voices and flock to specialized boutiques with names like Jesus Diamante, which looks like a bedroom in a European chateau. There, some hime girls spend more than $1,000 for an outfit including a satin dress, parasol and rhinestone-studded handbag.

It all started simply enough:

Jesus Diamante started the princess boom. Toyotaka Miyamae, 52, who had run an import shop specializing in evening gowns, set up the company in Osaka seven years ago to design feminine dresses tailored to Japanese women, whom he found to be shorter and to have smaller chests than Western women. Inspired by his favorite actress, Brigitte Bardot, he created dresses in quality fabrics that mimicked the feminine and elegant style of her youth.

“What I wanted to do wasn’t that unique,” says Mr. Miyamae, who named the company after a Japanese musical. “I just made them to fit Japanese bodies.”

Mr. Miyamae’s knee-length dresses are studded with fake pearls and flowers and have names like Antoine (short for Marie Antoinette). They became popular among women who were looking for a cleaned-up look after the popularity of ripped jeans and layered casual clothing in the late 1990s. The chain’s sales have grown 20% a year, to $13.4 million in the year ended March 2008, even though it has just four stores, including one in Tokyo’s trendy Harajuku neighborhood. It has spurred a slew of rivals with names like Liz Lisa and La Pafait.

California to set up a $1B electric car network

Friday, November 21st, 2008

Shai Agassi knows how to get government money — even when the government isn’t sure how to get government money. California to set up a $1B electric car network:

Better Place (formerly Project Better Place) has scored a coup in the California Bay Area. The electric vehicle startup has struck a deal with the region, including the cities of San Francisco, San Jose and Oakland, to set up a $1 billion charging network for electric cars, with car availability beginning in 2012.

Unlike its charging network in Israel, it looks like the Better Place network in the Bay Area is a plan to support electric car development throughout the state. The deal in Israel involved a tie-up with Nissan-Renault to make the small cars that work with the stations, which swap out depleted batteries for new ones.

California has a rather larger area and population, and a diverse set of companies that want to commercialize electric cars. That’s likely why it was clearly stated that the thousands of Better Place stations to be installed in northern California will be agnostic to the type of electric car, allowing charging of cars with either fixed or replaceable batteries.

What Toyota knows that GM doesn’t

Friday, November 21st, 2008

I’m not sure it’s what Toyota knows that GM doesn’t so much as what Toyota does:

Do you know how many hourly jobs GM has laid off from 2006 to July 2008? Take a guess. How about 34,000? And now, they’re talking about another 5,500 layoffs.
How many hourly jobs has Toyota’s American production system laid off in the same time frame? Zero. That’s right. ZERO. How? Isn’t Toyota experiencing the same slow down in auto sales as GM is? Yes, it is. And yes, Toyota has halted production at its Texas and Indiana plants for the past 3 months. But the 4,500 people who work at those plants have not been laid off.
“This was the first chance we’ve really had to live out our values,” says Latondra Newton, general manager of Toyota’s Team Member Development Center in Erlanger, Ky. “We’re not just keeping people on the payroll because we’re nice. At the end of all this, our hope is that we’ll end up with a more skilled North American workforce.”

Interesting. But what does that last line mean? “At the end of all this, our hope is that we’ll end up with a more skilled North American workforce.” It means that while these employees were not manufacturing automobiles, they were in training. They were doing safety drills, participating in productivity improvement exercises, attending presentations on material handling and workplace hazards, taking diversity and ethics classes, attending maintenance education and taking a stream of online tests to measure and record their skill improvements. Toyota is shifted the Texas and Indiana workers temporarily to Toyota plants whose assembly lines were moving at full speed, such as the Camry assembly plant in Georgetown, Ky. In addition to all of this, the workers also spent some time painting the plants and even helped build Habitat for Humanity homes. And they were getting paid.
When, not if, the plants return to full production, Toyota will have well trained employees on the front line, ready and able to meet the demand for their vehicles. And not only will they be well trained, they’ll be happy and motivated to work. Because Toyota is willing to go to the mat for their people, their people will be willing to do the same for Toyota.

That’s the element of the Toyota Production System (TPS) that no one wants to emulate — Add value to the organization by developing your people and partners.

The Calculus of Caffeine Consumption

Thursday, November 20th, 2008

The calculus of caffeine consumption rests on a few basic ideas:

Caffeine has a number of effects on the body, but the one that is relevant here is that it blocks adenosine receptors in the brain (by tricking your brain into thinking it is adenosine.) A decrease in the activity of adenosine (which is a sleep chemical) increases neuron firing rate and increases focus and concentration.

Caffeine tolerance builds up rather quickly (2-3 weeks) and further, is near-total. That means that if you drink coffee regularly, pretty soon you start producing more adenosine in respose; thus you need your caffeine dose just to get up to your normal level of brain activity, and you’re dopey if you don’t take it. Another way to think about it is that the time-average of adenosine level (and hence, attention level) tends to stay more-or-less constant, both short term and long term.

Let us examine the way that most people take caffeine — when they feel sleepy (I will call this antagonistic consumption.) This changes the attention level from the green line to the blue line (i.e, it smooths out the fluctuations.) This works great for many people (say, someone that has a data entry job), because maximum productivity is limited by external constraints. Other jobs where antagonistic consumption is essential include assembly line worker and truck driver, where mistakes can be disastrous but there is little to be gained from peak concentration.

But other jobs, often characterized by a low level of repetition, have a markedly different attention-productivity curve. Academic research, for instance, involves generating ideas that no one has come up with before. Clearly, an idea that advances the state of the art is unlikely to occur except when attention level peaks. If you spend your entire day doing nothing, but all that doing nothing somehow enables you to reach a point where you understand your research problem well enough that you get insights that no one ever did before, then that’s good research. Writers are another example: it is common to sit around for days or weeks waiting for inspiration to hit (“writer’s block”).

What is common to these tasks is that progress happens in spurts, due to the fact that they involve frequent cognitive bottlenecks. A cognitive bottleneck can only be overcome when attention level exceeds a task dependent, typically very high threshold. Clearly, then, antagonistic caffeine consumption results in worse-than-normal productivity, because it flattens the attention level curve and decreases the fraction of time spent at peak attention level. Instead, reinforcing consumption helps maximize productivity (the red line). According to this strategy, the best time to drink coffee is when you are already very alert.

The Confusion of Monarchy with Tyranny

Thursday, November 20th, 2008

One of the most common errors in understanding the premodern era, Mencius Moldbug notes, is the confusion of monarchy with tyranny:

Nothing like Stalinism, for example, is recorded in the history of the European aristocratic era. Why? Because Stalin had to murder to stay in power. Anyone, certainly any of the Old Bolsheviks, could have taken his place. The killing machine took on a life of its own. The tyrant, the mafia boss, stands at the apex of a pyramid of power, each block in which is a person who hopes to someday kill the boss and take his job. In a tyranny, murder and madness become part of the fabric of the State. In a monarchy, however, the succession is clear, and if by some accident of law and fate there are multiple candidates, they are at least each others’ relatives. This rules out neither murder nor madness, but they are the exception and not the rule.

Developer strikes it rich with iPhone game

Wednesday, November 19th, 2008

Developer strikes it rich with iPhone game:

Priced at $5, “Trism” earned Demeter $250,000 in profits the first two months.

“It’s done phenomenal business,” said Demeter, 29, who lives in the California’s San Francisco Bay area. “I’m very honored that so many people would enjoy my game. I get e-mails from 50-year-old ladies who say, “I don’t play games, but I love Trism.’ That’s the coolest thing.”
Demeter took his crack after attending an iPhone conference in the summer of 2007. He spent months afterward brainstorming, by himself and with friends, about how to create an original game for the device. Once he got the idea for “Trism” in February he spent another four months coding the game on nights and weekends.

The result is a puzzle game, like “Bejeweled,” in which players manipulate a colorful grid of triangles. Players score points by lining up three or more like-colored triangles in a row, with an iPhone twist: The triangles rearrange themselves depending on which way the player rotates the phone.

“I did the game myself, basically. I had a buddy of mine who actually came up with the name ‘Trism.’ I paid him a couple of grand. But other than that it [was] just me,” Demeter told CNN. “It’s a very simple-to-learn, hard-to-master puzzle game. It wasn’t as hard [to develop] as a 3-D, gun-and-battle kind of game. But for the one-man team that I was, it was definitely a challenge.”

After scoring a hit, what did Demeter decide to do?

Demeter quit his bank job two months ago and has launched a company, Demiforce, to develop more electronic games. Now he has a salaried staff, five games in development and two coming out by Christmas, including a spinoff to “Trism” called “Trismology.”

We’ll see if his luck continues.

Chinese May Buy GM and Chrysler

Wednesday, November 19th, 2008

Chinese May Buy GM and Chrysler — which, I suppose, terrifies many Americans:

A take-over of a large overseas auto maker would fit perfectly into China’s plans. As reported before, China has realized that its export chances are slim without unfettered access to foreign technology. The brand cachet of Chinese cars abroad is, shall we say, challenged. The Chinese could easily export Made-in-China VWs, Toyotas, Buicks. If their joint venture partner would let them. The solution: Buy the joint venture partner. Especially, when he’s in deep trouble.

At current market valuations (GM is worth less than Mattel) the Chinese government can afford to buy GM with petty cash. Even a hundred billion $ would barely dent China’s more than $2t in currency reserves. For nobody in the world would buying GM and (while they are at it) Chrysler make more sense than for the Chinese. Overlap? What overlap? They would gain instant access to the world’s markets with accepted brands, and proven technology.

What a Depression Looks Like

Wednesday, November 19th, 2008

Most of us think we know what a depression looks like:

Open a history book and the images will be familiar: mobs at banks and lines at soup kitchens, stockbrokers in suits selling apples on the street, families piled with all their belongings into jalopies. Families scrimp on coffee and flour and sugar, rinsing off tinfoil to reuse it and re-mending their pants and dresses. A desperate government mobilizes legions of the unemployed to build bridges and airports, to blaze trails in national forests, to put on traveling plays and paint social-realist murals.

Today, Drake Bennett notes, whatever a depression would look like, that’s not it:

Unlike the 1930s, when food and clothing were far more expensive, today we spend much of our money on healthcare, child care, and education, and we’d see uncomfortable changes in those parts of our lives. The lines wouldn’t be outside soup kitchens but at emergency rooms, and rather than itinerant farmers we could see waves of laid-off office workers leaving homes to foreclosure and heading for areas of the country where there’s more work – or just a relative with a free room over the garage. Already hollowed-out manufacturing cities could be all but deserted, and suburban neighborhoods left checkerboarded, with abandoned houses next to overcrowded ones.

And above all, a depression circa 2009 might be a less visible and more isolating experience. With the diminishing price of televisions and the proliferation of channels, it’s getting easier and easier to kill time alone, and free time is one thing a 21st-century depression would create in abundance. Instead of dusty farm families, the icon of a modern-day depression might be something as subtle as the flickering glow of millions of televisions glimpsed through living room windows, as the nation’s unemployed sit at home filling their days with the cheapest form of distraction available.