Joe Klamar/AFP/Getty Images
A cargo ship at Long Beach harbor. The Port of Long beach is the leading trade gateway between the US and Asia — but its business may be affected by a slowdown in Chinese exports.
Exports from China may be contributing to a major-league trade imbalance between the U.S. and the Middle Kingdom, but they are certainly welcome at the ports of Los Angeles and Long Beach, where goods stream into the Southland day and night.
Some of that seaborne traffic, which supports a major warehousing industry in the Inland Empire, as KPCC's Steven Cuevas has reported, not to mention a regional trucking business, could be slackening in the future. This is from the New York Times:
Data released Friday showed that the growth in overseas shipments from China had ground to a near halt in July, with exports up just 1 percent from the same month a year earlier, far below expectations and well beneath the 11.3 percent in June.
The slowing of China's economy has been on the minds of economists for a while now. But it may soon be on the minds of Southland residents and workers who depend of trade — deficit or no deficit — for their livelihoods.
Chinese students look at a newspaper outside an employment fair in Hefei, in east China's Anhui province. China's economy has been booming. But are it's citizens really happy?
I've written about Richard Easterlin here before. He's a noted economist and professor at the University of Southern California who's often credited with pioneering "happiness" as a worthy subject for economists to study. He even has an economic concept named after him, the so-called "Easterlin Paradox," which is reasonably well summarized at Wikipedia: "[W]ithin a given country people with higher incomes are more likely to report being happy. However, in international comparisons, the average reported level of happiness does not vary much with national income per person, at least for countries with income sufficient to meet basic needs."
So rich people in a society say that they're happier than poor people, but when you compare countries, richer countries aren't any happier than poorer countries. [This isn't exactly right: you have to take time into account, because rising income does make people happier, but over time it reaches a point where it doesn't. See the Update below.]
Andrew H. Walker/Getty Images
Niall Ferguson won an Emmy in 2009. He also has some pretty funny lines about capitalism.
Niall Ferguson is an extremely well-known and at times extremely controversial historian of finance, money, and imperialism. Born in Scotland, he now operates from a perch at Harvard. He's not afraid to tangle. And he's not afraid to be funny, something you have to concede no matter what you think of his conservative (some would say reactionary) politics.
I'd never seen him in action until yesterday, when at the Milken Institute Global Conference taking place this week in L.A. I caught him participating in a panel with the modest title of "The Future of Capitalism."
Prof. Ferguson outlined three varieties of existing capitalism: the old-school version we all know so well; a very new state-sponsored variation (see: China); and "cheese-eating" capitalism.
Ferguson enjoyed pronouncing those last few words. The cheese-eaters come from where you think they would: Europe. Social democrat-flavored Europe. Your socialist candidate for president of France, François Hollande, is a pretty solid example of Ferguson's cheese-eater. Hollande probably enjoys his cheese, so it's hardly a leap.
So much debt. So little time left.
Philip Coggan is a very fine financial journalist with a real gift for providing clarity on a dense subjects and reducing the complex sweep of history to easier-to-understand structures. In the "Buttonwood" column he writes for The Economist, he routinely accomplishes this feat. In "Paper Promises: Debt, Money, and the New World Order," he ramps up that habit, taking a long look at the legacy of relationships between debtors and creditors while also offering a warning about the next major global financial crisis. (Hint: It involves China and the U.S.)
He starts off with a bang:
The massive debts accumulated over the last forty years can't be paid in full, and they won't be paid. The debt crises Of Greece, Ireland and Portugal are just the start. The economic outlook for some countries, particularly in Europe, is weak thanks to deteriorating demographics: the number of retirees is growing relative the number of number of workers. As a result, these countries' incomes wil not grow fast enough to service their debts. Either there will be foramal defaults...or there will be effective defaults....Economics and politics for the next decade and beyond will be dominated by this issue, as social classes and countries debate where the brunt of the pain will fall.
Rob Schmitz, the Man in Shanghai for Marketplace, became the second reporter ever to be allowed inside the massive Foxconn factory where workers from across China come to build Apple iPads for $2 and hour. (Marketplace is part of the same American Public Media family as KPCC, by the way.)
Building the world's most popular tablet is "tedious and boring," says Schmitz. And from the video footage, it looks it. Foxconn is running an old-fashioned assembly line, barely automated at all, where human hands do the repetitive work that's creating a new middle class (of sorts — $14 a day only gets you so far) in China.
Worth noting that this is ground zero for Apple's substantial 30-percent profit margins. First, Apple has outsourced the assembly work to the cheapest possible place where it can still be right in the middle in the Asian consumer electronics supply chain. Second, Apple has compelled Foxconn's parent company to accept much lower relative margins, in return for the work.