For medium distances, high-speed rail is faster than flying. It’s hassle-free and comfortable. And it benefits the economy. But not the way California is doing it. The hullabaloo about funding the skyrocketing costs of linking LA and the Bay Area ignores a huge economic problem: once again, taxpayers are asked to create jobs overseas. Contenders: Germany, Japan, France, and China.
Among the “good” economic news today was private residential construction, up 2%, confirming trends in building permits and housing starts. Construction creates lots of jobs and contributes significantly to GDP. Everyone, from the President down to local politicians, wants it to grow. It gets them reelected. But for homeowners, banks, and tax payers, these trends are costly.
Vibrating with irrational post-flight euphoria, I place my feet on size 24 yellow footprints painted on the floor at immigration and wait. Travel lore has it that Tokyo Narita is a congested and problematic airport. But at 8:25 a.m. I see no congestion and no problems—until an immigration officer waves me over. He studies my ticket, doesn’t like it.
In late 2001, German banks sold Euro Starter Kits—sealed pouches with €10.23 in coins. One of many steps in the arduous process of weaning Germans from their D-Mark. I bought one and still have it. It’s in the back of a drawer, next to a D-Mark coin. And that coin is part of a vast phenomenon: 13.3 billion in missing Deutschmarks. But now people see a reason to hang on to them.
“We’re experiencing the beginning of the repercussions of the financial crisis,” said Michel-Edouard Leclerc, CEO of the second largest retailer in France. He has never seen so much “rational behavior among consumers” and so much “fear of getting screwed.” Until now, the crisis has touched mostly the financial world, but in 2012, it will hit the real economy. “It’s always the people who end up paying,” he said.
Practically every car or truck sold in the US today contains Chinese-made components, though Chinese-designed vehicles haven’t made it yet. Chinese automakers scramble to move from nice-looking but shoddy copy-and-paste models to reliable products that would be competitive in the US. It’s a government priority. And they’re getting there through the back door.
The cabinet approved a doozie of a budget with a horrid deficit. Yet it relies on accounting shenanigans. In reality, the government will borrow a disastrous 56.2% of every yen it spends. The vaunted trade surplus has become a trade deficit, the working population is declining, the savings rate plummets…. But the government has a solution: a miracle.
Bali, 1996: The taxi driver honks his way from the airport through Denpasar’s polluted, dusty chaos and drops me off at a walled compound in Kuta by the beach. From the gate, I see a tropical garden, a pavilion with a pointy ceramic-tile roof, a swimming pool, and two-story guest buildings. A girl in red flowery sarong and sheer blouse….
Dexia, the Franco-Belgian mega-bank that was bailed out in 2008 and re-collapsed in October, dwarfs Belgium’s economy. To keep it afloat, Belgium spent and guaranteed phenomenal amounts at a huge risk to the country. Yet there have been no legal consequences for those responsible. Until now….
Congress is the ideal American institution: it spends far more than it takes in and borrows the difference. We love that. To heck with the future. It means free money, services, wars, and other goodies. At least some of us get to profit from it. And then we blow it or invest it, and we lose it or make money on it. It all adds up to that glorious GDP. It’s the American dream. And yet….