A Review of Globalization

Since Russ is tweaking the RSS feed to clarify who's written which posts, I was amused to see the headline "A Review of Globalization (by Don Boudreaux)" for this posst, since it might lead some to think that Don has reviewed his own book! If nothing else, that would explain why the review is so positive!

More seriously, Tamny's review is positive because the evidence for the benefits of trade is sound.

Just for fun, here's a fun tool we threw together not long ago that emphasizes at least one of the same points: Why Cavemen Love Free Trade! Not quite the up-to-date data in the book, but nice that the math guarantees that the benefits of trade work out as they do.

And the retiree trend of retiring abroad will pick up steam too. Talk about globalization. Expect U.S. laws that will stop these people. After all, they will be taking their social security dollars with them.

The article tells the tale of the Dodges described as committed Libertarians.

Again the Dodge experience is illustrative. The adventuresome couple was open to moving anywhere in the world, even Albania. The committed Libertarians thought that a country just emerging from decades of international isolation and enjoying miles of undeveloped coastlines would offer great investment opportunities for entrepreneurs.

The countryside was spectacular and the people were among "the nicest we'd ever met," but the Balkan nation was bristling with international nongovernmental organizations advising the new government to establish yet more regulations, said Larry Dodge.

Panama's more hands-off approach was much more attractive to the couple, he said.




http://finance.yahoo.com/retirement/article/104...>

My link got clipped:

Story

Mcwop: I can't believe we'd ever pass laws prohibiting people from physically leaving the country. However, smart money wires everything to numbered account(s) in Switzerland and high-tails it out of here...

And a recent update from outgoing National Bureau of Economic Research President, Marty Feldstein.

"The unprecedented national fall in house prices is reducing household wealth and therefore consumer spending. House prices are down 10% from the 2006 high and are likely to fall at least another 10%. Each 10% decline cuts household wealth by about $2 trillion, and this eventually reduces annual consumer spending by about $100 billion."

This is new data that makes the point. That peak, claimed record of family wealth, is based on over-valued assets and borrowed money. The recent ad coming data will make updating that graoh very significant.

No I'm still convinced this is an economy that is largely debt driven with much of the wealth that is created being accumulated by small number of people. Now the debtors have nothing left to borrow against. And the Fed has done all it can do for the lenders.

And here's the shame of it all;

"Edward Gramlich, a Federal Reserve governor who died in September, warned nearly seven years ago that a fast-growing new breed of lenders was luring many people into risky mortgages they could not afford. However, when Mr Gramlich privately urged Fed examiners to investigate mortgage lenders affiliated with national banks, he was rebuffed by Alan Greenspan, the then Fed chairman."

Who are these men who set policies that so effect the economy and the flow of wealth. These supposed know-it-all who seem to be less trust worthy then any politician. I'm starting to believe the Fed chairman IS the most powerful man in the world.

While Gramlich was warning seven years ago, it seems that the problems are with loans made in 2006-2007. These seemed to also have a lot of fraud involved with them.

Muirgeo, how would you justify not giving all those people loans from 2001-2006, and the 90%+ good loans of the last two years? That's a lot of people without houses to save the fraudsters. Not very progressive of you.

http://www.nypost.com/seven/02052008/postopinion/opedcolumnists/the_real_scandal_243911.htm?page=0

Miurgeo, I think you are 1/2 right: the financial sector compensation system created a moral hazard where bankers acted in their best interest to maximize volumes of loans rather than the quality of loans. At the same time, government regulation, as usual, created the environment that spawned this industry. The fact that rating agencies were granted a government-sanctioned monopoly to be the be-all-end-all stamp on all financial transactions contributed to this moral hazard as did the implicit guarantee of many debtors by the government. With the good came the bad. But governmet will solve all of our problems provided they CAN JUST GET IT RIGHT...but they rarely do.

Miurgeo:

I just want to know one thing. Obama or McCain? Your answer will speak volumes.

I meant to post this ealier.

Just for fun, here's a fun tool we threw together not long ago that emphasizes at least one of the same points: Why Cavemen Love Free Trade! Not quite the up-to-date data in the book, but nice that the math guarantees that the benefits of trade work out as they do.

Posted by: Ironman | Feb 21, 2008 12:18:41 PM

Thanks Ironman, I liked it very much, "Why cavemen love free trade"!

Do I have your permission to spread it amongst my circle?

vidyohs, Absolutely!

If you vote for freedom, then McCain is the only choice among bad choices. A vote for Obama is like cutting off your nose to spite your face, it's a vote for an uber-socialist. So if you're voting Obama because you want the troops out of Iraq, just know what trade you're getting for that. You're getting uber-socialism back home.

Like we'll otherwise be able to tell the difference?

Sam:

At least with McCain there's a shot at not instituting all-out socialism. Under Obama, it's 100% guaranteed. If McCain can just steer the ship to safe shores for 4 years, then a real conservative like Mitt Romney can take over.

And Bush/Cheney were for smaller government.

I don't think anything is guaranteed at all.


If Obama goes too far, the independent vote might swing back to the GOP in two years.


With McCain, I suspect he might give the Dems what they want in exchange for what he wants.

Who knows? I sure don't.

Sam:

Did Bush/Cheney ever campaign on smaller government? I recall it was endless "compassionate conservatism" rhetoric. Now if you can point to me multiple campaign speeches in 2000 where Bush was advocating smaller government, I'll eat my words.