The U.S. and China Both Need Economic Rehab

'Chimerica' has become addicted to ultra-loose financial conditions.
From WSJ by Ferguson and Schularick.

Business Consolidation

Here.

Feldstein on Obamacare

Obamacare's fatal flaw.

Economic Activity During the Government Shutdown

CEA has this interesting report.

China's Coming Economic Slowdown

From WSJ.

Under Hitler, the Flying Hamburger train covered the distance between Berlin and Hamburg in 138 minutes; in postwar democratic Germany, it took the railroad 66 years to match that record. The reasons are simple. The Nazis didn't have to worry about local resistance and environmental-impact statements. A German-designed maglev train now whizzes back and forth between Shanghai and the city's Pudong International Airport; at home, it was derailed by a cantankerous democracy rallying against the noise and the subsidies.

...

History does not bode well for authoritarian modernization, whether in the form of "controlled," "guided" or plain state capitalism. Either the system freezes up and then turns upon itself, devouring the seeds of spectacular growth and finally producing stagnation. (This is the Japanese "model" that began to falter 20 years before the de facto monopoly of the LDP was broken.) Or the country follows the Western route, whereby growth first spawned wealth, then a middle class, then democratization cum welfare state and slowing growth. This is the road traveled by Taiwan and South Korea—the oriental version of Westernization.

The irony is that both despotism and democracy, though for very different reasons, are incompatible with dazzling growth over the long haul. So far, China has been able to steer past either shoal. It has had rising riches without slowdown or revolt—a political miracle without precedent. The strategy is to unleash markets and to fetter politics: "make money, not trouble."

Can China continue on this path? History's verdict is not encouraging.

Starbucks Charges Higher Prices in China

From WSJ.

China Seeks Clearer View of Government Debt Mountain

From WSJ.

The Nobels for Asset Pricing

From WSJ.

Nobels and National Greatness

From WSJ.

Mankiw Explains Why He Is A Republican

From NYT.

"...the tendency of people to interpret evidence in a way that is consistent with their previous beliefs. No one can escape his or her own history."

The Road to a New Medical Order

From John Mauldin.

The Budget Reform Pivot

From WSJ.

You Have a Great Idea. Now What Do You Do?

From WSJ.

How to Tell if You Would Be a Bad Entrepreneur

From WSJ.

• Why Entrepreneurs Can't Shut Up
• If You Can't Collaborate, Forget Entrepreneurship
• Entrepreneurs Can't Sit Still
• Entrepreneurship Isn't a Profession. It's an Obsession.
• Hate Changing Plans? Don't Be an Entrepreneur.
• What It's Really Like to Be Your Own Boss
• An Entrepreneur Who Hates Risk Isn't an Entrepreneur
• The Kiss of Death for Entrepreneurs: Passivity

Wall Street Is Losing the Best and Brightest

From WSJ.

Not long ago, Wall Street attracted many of the smartest people in America—brilliant economists and mathematicians, but also the nation's most promising college graduates. Not anymore. Five years after the financial crisis, evidence suggests that students have lost their enthusiasm for beginning careers in finance.

I think this is a natural development toward a right direction.

The Economic Recovery: A Novel Perspective from Ed Leamer

The Best Advice Fama Got

Here.

With formal statistics, you say something -- a hypothesis -- and then you test it. Harry always said that your criterion should be not whether or not you can reject or accept the hypothesis, but what you can learn from the data. The best thing you can do is use the data to enhance your description of the world. That has been the guiding light of my research. You should use market data to understand markets better, not to say this or that hypothesis is literally true or false. No model is ever strictly true. The real criterion should be: Do I know more about markets when I'm finished than I did when I started? Harry's lesson is one that I've passed on to my students over the 49 years that I've been a teacher.

Creativity and Discipline

Why tough teachers get good results? from WSJ.

I like this:

"Meanwhile, American students struggle with complex math problems because, as research makes abundantly clear, they lack fluency in basic addition and subtraction—and few of them were made to memorize their times tables."

"The bottom line, Prof. Weisberg told me, is that creativity goes back in many ways to the basics. "You have to immerse yourself in a discipline before you create in that discipline. It is built on a foundation of learning the discipline, which is what your music teacher was requiring of you."

Open-Government Laws Fuel Hedge-Fund Profit

Information can make money, even the public information. From WSJ.

Ukraine's Trouble Hit Bonds

From WSJ.

America's Toilet Turnaround

From WSJ.

Energy issues from WSJ

Six myths about renewable energy.

Oil firms seek to unlock big California field.

Chinese demand for coal is cooling.

The Long and Sorry Tale of Pension Promises

How did states and cities get into this mess? It's a simple case of human frailty; where to go from here.
From WSJ.

A Nation Built for Immigrants

From WSJ.
Will the recent surge of newcomers tear the U.S. apart? Not if history is any guide: From the beginning, America was made to unite citizens, even those with deep differences.

U.S. Textile Plants Return, With Floors Largely Empty of People

From NYT.

How the Tesla Model S is Made?

A pretty cool factory. Video here.

The Fed Makes a Mistake

My colleague, David, made a comment on the recent decision of the Fed.

Heckman on Early Childhood Education

Lifelines for poor children form NYT.

Bunnies talk about QE

With surprising no tapering today, I remembered this funny video about QE first released in 2010.
Here.

Top 200 Economics Blogs

Here.

-	1. The Conscience of a Liberal		100.0	100.0	1.2
New Entry ★	2. Economix		61.7	64.9	1.1
New Entry ★	3. FT Alphaville		60.8	52.0	1.4
New Entry ★	4. Vox		57.4	56.5	1.2
2 ↓	5. Marginal Revolution		53.1	63.4	1.0
2 ↓	6. Brad Delong		50.8	61.3	1.0
5 ↓	7. Economist’s View		50.6	62.8	1.0
9 ↑	8. Zero Hedge		49.0	57.7	1.0
2 ↓	9. Naked Capitalism		40.4	48.0	1.0
4 ↓	10. Econbrowser		36.2	42.0	1.0
-	11. The Big Picture		35.9	42.6	1.0
2 ↓	12. EconLog		35.9	45.3	0.9
4 ↓	13. The Money Illusion		30.2	48.0	0.7
9 ↓	14. Greg Mankiw’s Blog		30.1	36.6	1.0
5 ↑	15. Economic Policy Institute		28.7	35.7	0.9
3 ↓	16. Calculated Risk		28.6	25.5	1.3
23 ↑	17. Next New Deal		26.2	24.0	1.3
New Entry ★	18. On the Economy		25.1	33.3	0.9
4 ↓	19. Crooked Timber		24.5	26.4	1.1
6 ↓	20. Freakonomics		23.4	32.4	0.8

China companies feel the investment hangover

An alarming development.

The Global QE Exit Crisis

Here.