[donshan]

I have just received the book "The United States and the World Economy-Foreign Economic Policy for the Next Decade", edited by C. Fred Bergsten, January 2005 (454 pages). This book is mainstream economics at the global level at the Institute for International Economics. The book is endorsed on the back by such Economists such as Lawrence Summers (President of Harvard and previous Secretary of Treasury) and Paul Volcker( Chairman of the Fed prior to Greenspan).

I want to call attention to it because its chapter list almost reads like many of the topic lists of this forum. Others may be interested, as I am, in what mainstream economists are thinking about issues such as:
Chapters:
1. A new Foreign Economic Policy for the United States
2. The Payoff to America from Global Integration
3. Uneven Gains and Unbalanced Burdens?
4. China: The Great New Economic Challenge
5. The United States and the Large Emerging-Market Economies
6. Sustaining Global Growth while Reducing External Imbalances
7. Energy: A Gathering Storm?
8. Confronting Current Challenges to US Trade Policy
9. Offshore Outsourcing and Globalization of US Services
10. Easing the Adjustment Burden on US workers
11. Challenges of US Immigration Policy
12. The International Finance Architecture
13. Fostering Development

I have only read the chapter on Energy, but I thought it alone would be of interest. I will post some comments on the other chapters later.

There is one chapter by Phillip K Verleger Jr. titled Energy: A gathering Storm?. This was written in late 2004 and published January, 2005. The energy chapter reviews a growing crisis and is sort of an open letter to the new Bush Administration on what must be done in the Energy area. It does not even admit the existence of an oil supply constraint due to Peak Oil, but instead blames under investment in oil development and refineries for sour and heavy crude oils, and a number of geopolitical issues. He calls for strong energy conservation measures, alternative fuels, a gasoline tax of $1.00 a gallon, (with changes in tax structure in other areas to make it revenue neutral), a doubling of the SPR to use as a buffer on price spikes, the necessity of OPEC raising production, increased oil inventories and others including a number tax incentive issues.

One interesting analysis is an econometric analysis that showed that the ENTIRE world goes into recession at oil prices above $55/bbl. He calls for strong action.

Now none of his proposals have been implemented, and oil has gone well above $55. His conclusions in 2004 were:


$this->bbcode_second_pass_quote('', 'T')ime is short and Action is Required
Crude oil prices rose to record levels in 2004., In the next three years, they will climb even higher if action is not taken., Economic recession or worse will surely follow. It is not an exaggeration to say an economic storm of immense proportions lies just over the horizon.

In May 2001, President Bush called on Congress to pass a new energy policy. His request for action was correct; however the policies he put forward, even if adopted immediately, would do little to avoid the coming tumult. Today, the United States, the European Union, Japan, Russia, China, and OPEC members, particularly Saudi Arabia must act at once to address this problem. Each country can take many steps by itself. However, the crisis can be avoided only if they all work together.

[Carlhole]

What does it say in Chapter 6? And in Chap 8? Is that about outsourcing and the differences in labor costs between the US and the developing world?

[donshan]

$this->bbcode_second_pass_quote('Carlhole', 'W')hat does it say in Chapter 6? And in Chap 8? Is that about outsourcing and the differences in labor costs between the US and the developing world?

[Carlhole]

I might have to buy that book. Those kinds of things have been on my mind alot lately. It just seems as though the American economy is being hollowed out through loss of manufacturing and high-wage IT jobs and everything.

This game we are playing with the rest of the world where we produce debt and they produce everything else has got to come to an end. And it seems like wages overseas and wages at home have got to become more equalized before the American economy can become more competitive. I have more or less understood our invasion of Iraq as a necessity to keeping the petrodollar system alive and our increasingly precarious economy afloat.

Both Republicans and Democrats seem unprincipled as hell, ruled by corporate power (which is unelected power) and corporations have been making a mad dash to Asia as if they are abandoning ship. So, I've been reading a little about the highly principled Libertarian philosophy also and, of course, they are adamantly free trade as well as pro free-immigration, anti-war and anti-state. So some of their policies are being implemented like crazy and some (the war and monetary policy) are being violated like crazy.

What does all this mean for the the average American? Will the dollar crash? It's hard to know what the hell's going on.

[donshan]

$this->bbcode_second_pass_quote('Carlhole', 'B')oth Republicans and Democrats seem unprincipled as hell, ruled by corporate power (which is unelected power) and corporations have been making a mad dash to Asia as if they are abandoning ship. So, I've been reading a little about the highly principled Libertarian philosophy also and, of course, they are adamantly free trade as well as pro free-immigration, anti-war and anti-state. So some of their policies are being implemented like crazy and some (the war and monetary policy) are being violated like crazy.

What does all this mean for the the average American? Will the dollar crash? It's hard to know what the hell's going on.