The French have voted with their hearts and picked Francois Hollande as President. And who can blame them for wanting to be more like Italy and less like Germany? More Roman Holiday and less The Spy Who Came In from the Cold?
We should be grateful to the French. We need exemplars—countries whose policies we embrace and countries whose polices we avoid. France seems determined to set a bad example, if they expect Hollande to follow through on his promises. This is a nation that hasn’t run a budget surplus in 35 years, where labor costs have been rising in the face of blistering global competition, and where the public sector controls more than half of the economy. Hollande promises to hire more public sectors workers, raise the marginal tax rate to 75%, and reverse Nicholas Sarkozy’s feeble encroachment on the entitlement mindset of the French worker. Read more »
For most of 2009, Rochester ranked in the Top 20 in the Brookings Institution’s regular reports on the impact of the recession. Indeed, for 2009, Rochester had the 15th best job report among the nation’s 100 largest metros. New York’s job creation record was the best of the 15 largest states.
By the end of last year, Rochester had slid to #41 and New York State to #11. What happened? Well, not much. In Rochester, at least. Our job performance over the last decade has been quite consistent from year to year: We lost jobs, but never more than 2% in a year. The Great Recession was triggered when the real estate bubble burst, the construction and real estate sectors suddenly cooled and millions found their jobs gone or at risk. Having missed the boom, Rochester also missed the bust and continued the trend of the early part of the century—slow shrinkage as the economy struggled to absorb cuts at Kodak and other large employers. Read more »
Remember “mutual assured destruction?” MAD was the dominant principle of the Cold War: The Soviet Union would not attack us as long as we retained the ability to retaliate. They might surprise us and obliterate New York, Chicago, Los Angeles, and Washington, but our nuclear subs and hardened silo-based missiles would respond in kind, turning Moscow, Leningrad, Kiev and Vladivostok into historical footnotes (if mankind survived to write any more history).
A kind of financial “MAD” became our consolation in the 1990s as China continued to accumulate foreign exchange, the vast majority of which was in dollars (or financial assets like bonds that were priced in dollars). At present, China’s holdings of dollar assets top $1.5 trillion, says the Peterson Institute for International Economics.
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