Dirigisme

Creeping socialism has broken into full gallop.

The center of gravity of the world economic system has moved from New York to Washington. ... The US Treasury has become the only "customer" that matters. The Treasury is now the customer—and investor -- with the $750+ billion checkbook. The Treasury is now the "investment banker" of last resort, arranging and financing mergers. Banks are competing against insurance companies for their slice of the bailout pie. Chrysler and GM (and the Michigan Congressional delegation) are looking to Washington, not Goldman or Merrill, to facilitate a merger. This is a seismic shift.

Strategy Under Uncertainty

Find out why war is the best metaphor for business. Courtesy of the Marines:

Because we can never eliminate uncertainty, we must learn to fight effectively despite it. We can do this by developing simple, flexible plans; planning for likely contingencies; developing standing operating procedures; and fostering initiative among subordinates.

Predicting China "surprises"

Oxymoronic speculation from the McKinsey Quarterly:

• China announces that by 2020, half of the cars in the country will be electric. It invests tens of billions of dollars in R&D toward achieving that goal.
• The Chinese government buys a 50-year lease on an entire geographic region of Mexico, enabling Chinese companies to build factories there to supply the North American market more easily.
• A major office block collapses in Chaoyang, Beijing’s central business district.
• A leading Chinese company tries to buy an iconic US technology firm (or two).
• A restructuring of China’s telecommunications industry turns into a complete consolidation.
• The English Premier League football association buys its Chinese counterpart, the Chinese Super League.
• Warming cross-strait relationships lead to a merger between the mainland’s Industrial and Commercial Bank of China and Taiwan’s Chinatrust Commercial Bank.

Who Watches this Junk?

The other day I had one of the cable business channels on in the background. I sometimes find the parade of prognosticators to be amusing although it's a little scary that some viewers might believe this stuff. One commentator noted that stocks "always" have a big rally the last week of October.

Don't viewers see the problem with this type of claim? If stocks "always" rally the last week of October, it would make sense for everyone to buy the week before to capture the value increase of the rally. Then, the rally would occur the week before when the buying started. And, of course, knowing this, everyone would buy the week before that. And, so on and so on.

Other people's money

Danny DeVito on socially responsible investing:

Labor mobility attenuates shocks

Wall St refugees leave NYC in mass migration:

Bankers and brokers looking to escape the financial meltdown are scrambling to relocate their families, possessions and rarified talent far from Wall Street to places such as Florida, Chicago, Milwaukee, Virginia and Asia.

Just think how difficult it is for countries without a mobile labor force to respond to these changes. Policies designed to ease the pain from these shocks has the perverse effect of decreasing our ability to respond to them.

A Humorous Explanation of the Financial Mess

(HT: Erik Doving via O&M)

New Deal II?

Harbinger of things to come:

The nation’s battered economy needs an old-fashioned “Rooseveltian lift” of regulatory reforms and government spending on the infrastructure, clean energy and other sectors, U.S. Sen. John Kerry said yesterday.

Speaking truth to the formerly powerful

But now that Congressman Cooper is in power, we should be asking why Congress isn't doing more.

Outsourcing entitlement policy to the AARP...

They say that Democracy is the worst form of government except for all the others that have been tried, but I am beginning to wonder. Why can't we get the candidates to talk about the only problem that matters, the future? Robert Samuelson calls young voters "chumps," for trying to change the channel instead of facing up to the problem and demanding change--to our unfunded entitlements.

You're not hearing much of this in the campaign. One reason, frankly, is that you don't seem to care. Obama's your favorite candidate (by 64 percent to 33 percent among 18- to 29-year-olds, according to the latest Post-ABC News poll). But he's outsourced his position on these issues to AARP, the 40 million-member group for Americans 50 and over.