The article Britain Details Radical Cuts in Spending, Citing Debt in The New York Times may give a hint at what is going to be happening in countries around the world. It may even come to a country near you after the November elections.

Britain’s Chancellor of the Exchequer unveiled the country’s steepest public spending cuts in decades on Wednesday, sharply reducing welfare benefits and eliminating almost half a million public sector jobs over the next four years as the country seeks to free itself of crushing debt from the global financial crisis.
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The cuts, far more detailed and sweeping than those in many other Western nations, were depicted by the opposition as a reckless gamble that could tip the country back into recession. Ed Miliband, the leader of the Labour opposition, called the five-year austerity plan the “biggest gamble in decades.”

As more and more countries adopt policies like this, then we will finally see who is right and who is wrong about Keynesian economics.  No longer will we have to argue about this subject.

The last time this was tried on a massive scale was in 1937.  The results of that test were only overcome after a World War.  Can civilization survive again after a cure like that?

How are you preparing for the impending test?

The New York Times has the article  Income Inequality: Too Big to Ignore by Robert H. Frank, an economics professor at the Johnson Graduate School of Management at Cornell University. Read the article to see how he justifies the following conclusion:

In short, the economist’s cost-benefit approach — itself long an important arrow in the moral philosopher’s quiver — has much to say about the effects of rising inequality. We need not reach agreement on all philosophical principles of fairness to recognize that it has imposed considerable harm across the income scale without generating significant offsetting benefits.

I was just thinking about Bill Gates reported $40 billion fortune. If he just sat back and got a 5% return on this fortune, he would earn $2 billion every year.  Can you imagine the problem of figuring out how to spend $2 billion on your small family?  It’s a good thing he doesn’t get it in cash.  He’d need help just cleaning it up to make room for him to fit in his house.

The Reuters article has it correctly with the necessary qualifier, Swiss Complete World’s Longest Rail Tunnel.

They fail to mention the 4 other tunnels that are quite a bit longer than the Swiss tunnel.

If you believe Wikipedia, see their article, List of longest tunnels in the world. The longest one is 85 miles compared to the puny Swiss tunnel of only 35.5 miles.

Of course, if you go by volume, perhaps the Swiss tunnel does have some bragging rights.  I don’t know the numbers for this measure.

The Reuters article, U.S. Backs Off In Currency Dispute With China, gives the details.

The decision to delay the Treasury report appears to have been taken at the last minute. Industry sources had been primed to expect it by 1 p.m. EDT (1700 GMT) on Friday.

It was apparently right down to the wire, but finally someone came to their senses.  My supposition is that someone finally backed off from this politically popular measure that would have spelled disaster for the world economy.

To hear Klaus Schwab tell it in my previous post Interview of Klaus Schwab, Chairman, World Economic Forum, China is trying to boost internal consumption so that they won’t be so dependent on exports.  This will make it less disruptive to their own economy to let the value of their currency rise.  They have already let it rise at the rate of 1% per month over the last three months.

So it seems that China is carrying out the policy that we wish, and they are preparing to position themselves to carry it out even faster.  Would it be smart for the United States to pick a fight with its largest creditor because we want them to do something on our timetable instead of their own?  Would they be smart to disrupt their country by raising the value of their currency too fast just to please their largest borrower?

Whatever trouble we are in, we brought it on ourselves.

Perhaps 5,000 years of experience does allow the Chinese to act as the mature player in this comedy of errors.  With only a couple hundred years of history, we naturally take the part of the immature buffoon.

Charlie Rose had a fascinating Interview of Klaus Schwab, Chairman, World Economic Forum.  The World Economic Forum is the organization that puts on the annual meeting of world leaders at Davos, Switzerland.

Among all the other interesting topics discussed, Charlie Rose got Klaus Schwab to discuss his understanding of leadership.  He defined leadership qualities as brains, heart, soul, and good nerves.

In discussing why there are fewer and fewer great leaders he said that the main deficiency was in the soul.  He went on to explain that it was understandable in the current environment because “instead of following your compass you have to find out what is the public opinion – more soul, vision, values part is sacrificed to the short term interest of gaining …”.  I couldn’t quite catch the last word.

At this point, I thought that after such a great interview and the showing of such great insight, that Klaus Schwab had somehow missed an important point.

The last sentence of the interview made me say “Hallelujah, he really does get it.”

The New Republic article Ten Things Political Scientists Know That You Don’t by Jonathan Bernstein promotes the article of the same name by Hans Noel of Georgetown University.

This is great article for political junkies who read this blog on a regular basis. If you are a political scientist, you probably know about all this already. After thinking about it for a while, I thought So that’s what political science is all about.

The article itself is published in The Forum: A Journal of Applied Research in Contemporary Politics, Vol. 8 (2010) / Issue 3. From here, you can download the 21 page article.

The New Republic paraphrases item 3 as Elections don’t necessarily do what we want them to do.. I found the explanation of the item to be the clearest and most succinct description of the problem of finding a voting method that does do what we want it to do.

You may or may not agree with some of the ten items, but you may also learn something in thinking about why you do or don’t agree.  For instance,  the scatter diagram of figure 1 in the article could just as easily be used to make the opposite point of much of the text for this item.

A quick and simple animated explanation of how Wall Street Reform will work a…

There is more on What Wall Street Reform Means for You on the White House Blog.

While the video may be telling the truth, you still don’t have to fall for the implied message hook, line, and sinker.

She is right that no job is preordained to be held by an American. If a company can get the job done just as well (or even better) by a foreign worker for less money, then it is the responsibility to the stock holders to make that move. American workers have to figure out what they are going to do to compete. Putting up trade barriers is not the answer.

The excessive pay for chief executives in America is also not preordained. These American CEOs who think outsourcing only happens to the workers will get quite a shock in a few years. What makes Carly Fiorina think that there isn’t a CEO candidate in India that can do her job better and cheaper?

The following comment has nothing to do with whether or not the former American workers of HP have cause to complain. If you are a CEO watching this video and you see the clips of disgruntled American workers and then you see the clips of satisfied workers in India, where would you prefer to hire your workers?

I found a link to the article White America Has Lost Its Mind on the facebook page of friend João Geada.

If you are at all sensitive about matters of race, then don’t bother to click on the above link.  If you can take a joke, and don’t mind a little X-rated language, then feel free to read the article.

But the more you shook your head at it, the more it seemed to have taken root deep in the lizard part of the white nervous system. Obama is not an American. He says he’s Christian, but he has a Muslim-sounding name. He’s not black, he’s not white. . . . Is . . . is he even human?

I take no responsibility for any head explosions caused by reading this article.