Between US and European re-regulation of the banking sector and the rise of China's capitalist autocracy, we have clearly entered an era in which the state will exert ever more power.
If there was any remaining doubt that the era of financial capitalism is over and the age of Big Government has begun, French President Nicolas Sarkozy dispelled it with his keynote speech today at the World Economic Forum in Davos.
Last week, we got more proof of Wall Street's utter disconnect from the rest of the world when Goldman Sachs's chief executive Lloyd Blankfein was quoted as saying he's doing "God's work." Apparently, he's also a "blue-collar guy" and "everybody should be happy" that he and his peers are on track to take home billions in bonuses this year.
Investors last week were buzzing about a report released by the Chinese central bank ahead of President Obama's visit to the country, which indicated that Beijing might once again be thinking of letting the yuan rise to reflect China's growing heft in the global economy.
According to its CEO Lloyd Blankfein, Goldman Sachs is doing "God's work." This quote, care of the LondonTimes(though delivered in irony, according to Goldman Sachs) was met with bewilderment at a Chinese business conference in Lisbon last week, where foreign CEOs and government officials were dumbstruck by the hubris.
The conventional wisdom is that China is steaming through the global financial crisis by building on the momentum generated by its 30-year boom. Indeed, ever since it sailed through the last big global crisis—the Asian contagion 10 years ago—Beijing has been feted for uniquely steady helmsmanship in financial storms.
One reason growth forecasts for rich nations are so grim is the common assumption that birth rates are falling. Fewer people will produce less income, and shrinking economies.
Here's a rare bright spot as a result of the global financial crisis. The World Bank's Doing Business Report, which tracks how easy or hard it is to start new businesses in various countries around the world, is just out today, and more countries than ever are slashing red tape around starting businesses.
During a recent trip to Japan, New York University economist Edward Lincoln was surprised to find executives at Toyota wringing their hands─not about sales, which were down 27 percent since the beginning of the year thanks to the global recession, but about their new position as the No. 1 automaker in the world.
I want to respond to a reader who commented on yesterday's post about the possibility that the U.S. dollar might be replaced by a new type of currency known as an "SDR": Reader: "[You suggest in your post that] 'Americans won't be able to live quite as large as they have in the past.' This is a vague statement.