The United States of the World

A cool map from Strange Maps:


Click on map for bigger picture

"Although the economies of countries like China and India are growing at an incredible rate, the US remains the nation with the highest GDP in the world – and by far: US GDP is projected to be $13,22 trillion (or $13.220 billion) in 2007, according to this source. That’s almost as much as the economies of the next four (Japan, Germany, China, UK) combined.

The creator of this map has had the interesting idea to break down that gigantic US GDP into the GDPs of individual states, and compare those to other countries’ GDP. What follows, is this slightly misleading map – misleading, because the economies both of the US states and of the countries they are compared with are not weighted for their respective populations.

Pakistan, for example, has a GDP that’s slightly higher than Israel’s – but Pakistan has a population of about 170 million, while Israel is only 7 million people strong. The US states those economies are compared with (Arkansas and Oregon, respectively) are much closer to each other in population: 2,7 million and 3,4 million.

And yet, wile a per capita GDP might give a good indication of the average wealth of citizens, a ranking of the economies on this map does serve two interesting purposes: it shows the size of US states’ economies relative to each other (California is the biggest, Wyoming the smallest), and it links those sizes with foreign economies (which are therefore also ranked: Mexico’s and Russia’s economies are about equal size, Ireland’s is twice as big as New Zealand’s)."

Trade fallacies

This one comes from Dani Rodrik’s blog (via Smart):

“Trade and procedural fairness

Economists fail to appreciate sufficiently that globalization often runs into a procedural fairness roadblock.

Imagine some change in the economy leaves Tom $3 richer and Jerry $2 poorer, and I ask you whether you approve of this change. Few economists, regardless of their political and philosophical orientation, would be able to give a straight answer without asking for more information. Is Tom richer or poorer than Jerry to begin with, and by how much? What are their respective needs and capabilities? And what exactly is the nature of the shock that created this redistribution of income? It would be one thing if Tom got richer (and made Jerry poorer) through actions that we would consider unethical or immoral; it would be another if this was the result of Tom’s hard work and Jerry’s laziness. In other words, most of us would care about the manner in which the distributional change occurred--i.e., about procedural fairness. The fact that the shock created a net gain of $1 is not enough to conclude that it is a change for the better.
…
The thought experiment clarifies, I think, why the archetypal man on the street reacts differently to trade-induced changes in distribution than to technology-induced changes (i.e., to technological progress). Both increase the size of the economic pie, while often causing large income transfers. But a redistribution that takes place because home firms are undercut by competitors who employ deplorable labor practices, use production methods that are harmful to the environment, or enjoy government support is procedurally different than one that takes place because an innovator has come up with a better product through hard work or ingenuity. Trade and technological progress can have very different implications for procedural fairness. This is a point that most people instinctively grasp, but economists often miss. (Notice that even in the case of technology, we have significant restrictions on what is allowable—c.f. human-subject review requirements—and wide-ranging debates about the acceptability of things like stem-cell research.)”

The problem here is the concept that we can define the fairness of trade. Child labor does sound horrible, but the bigger question is: What were those children doing before they went to work in a dirty factory? How do you want to force that country to send all these children to clean and safe schools?

I’ve read once (I believe it was at Johan Norberg's) that Sweden had a serious problem with child labor. The solution was not new laws but pure and simple economic development. Once society is richer and education is more valuable to parents than sending kids to work for $1 a week in sweatshops they will stop doing so. I even believe that government can accelerate this process but only up to a point.

In any case, globalization and technological advances are important because they make the pie bigger. That in turn makes better choices and social organization possible. To think that this is the other way around is dangerous. This is not only the case of “You can't have your cake and eat it too” but the simple truth that you cannot expect to have a cake without the appropriate ingredients in place.

What People Earn - 2006

After you filter out the BS, this article has some interesting information:

Economy:

“By most economic measures, 2006 was a great year. Despite rising interest rates, high oil prices and the sharpest housing downturn in 15 years, inflation was low, productivity rose steadily, corporate profits reached a 40-year high, the stock market soared and the unemployment rate dropped to 4.6 percent -- the lowest level in more than five years.”

It’s good to remember that people were predicting that 2006 was going to be horrible…

Paycheck:

“Last year's 1.1 percent average raise was their first real pay increase in a long time. Workers' productivity grew an impressive 18 percent between 2000 and 2006 -- but most people's inflation-adjusted weekly wages rose only 1 percent during that time. This was the first economic expansion since World War II without a sustained pay increase for rank-and-file workers.”

That of course doesn’t take into account benefits. Tax breaks for employer-provided health insurance will definitely cause distortions. But I also think that global competition is a factor in the huge jump in productivity, as well as the improvement of internet related technologies.

The Hottest Jobs (No College Degree Required)

“Translators
The need is expected to grow 26 percent by 2014: $43,000-$100,000

Insurance adjusters
These jobs aren't easily outsourced or replaced by technology: $34,000-$75,000”

The Hottest Jobs (For College Grads)

“Logistics manager
Plan, implement and control flow of goods or services: $35,000-$118,000

Physical therapist
Aging baby boomers will drive the increasing need: $34,600-$74,000”

Interesting how the salary difference is not that large in some cases. The key word seems to be specialization, no matter if it requires a degree or not.

Where is Europe?

Where does Wal-Mart get its products? (Via MR)

Human Development Trends

So are we poorer or richer? Is income better distributed or not?



How about the health of the world?


Who is staying behind?




Sometimes pictures do speak for themselves. Courtesy of Gapminder.

Why?

Xbox 360 chega em 1º de dezembro ao Brasil, por R$ 2.999,00

Custo nos EUA:
Console: $399
Kameo: Elements of Power: $49.99
Perfect Dark: $49.99
Project Gotham Racing 3: $49.99
Remote Control: $29.99

Total: US$ 578.96 = RS$ 1273.71

Antes de eu colocar a culpa em lugares indevidos, pergunto aos que sabem mais: De onde vem esses RS$1,726.278? Impostos? Outros custos de importação?(quais?) Margem de lucro? (Porquê a MS cobraria mais num país que tem poder econômico menor?)

O Brasil neoliberal continua cada vez mais neoliberal!

Ano passado eramos posição 119 de um total de 155 no ranking do Doing Business.

Que diferença um ano faz! Agora somos 121 de um total de 175! (Ajustando a colocação de 2005 para o novo total de países subimos 1 posição!)

Destaques para Registering Property (124), Closing a Business (135), Dealing with Licenses (139) and Paying Taxes (151).

Just one more proof of how capitalism is destroying this neoliberal paradise.

The Grocery Game or another reason why I love the internet

I am not sure why but the first time my wife told me about “The Grocery Game” I thought it was phony.

But let me tell you this: it works like a charm. We have saved hundreds, possibly thousands of dollars with this thing.

The concept is really simple. They search for coupons and sales among all grocery stores and let you know which one is cheaper. That’s it! The reason it works so well is because usually these coupons are buried inside a newspaper or a magazine. The information is so dispersed that no one is able to find out what stores have the best deals for what products.

Of course there’s still some work left. You have to organize your trips to each supermarket based on whatever you need and where the best prices for such products are. You usually need to buy brands you are not very familiar with.

This kind of saving is one of the aspects that I doubt is taken into consideration when people analyze the benefits of the internet. Can you imagine the economic implications of saving, let’s say, one thousand dollars a year in groceries per family? This is huge.

Wal-Mart

People love to hate Wal-Mart. When I say people I actually mean the press. Consequently I really mean the left.

Yes, lefties despise Wal-Mart. I’d say that besides Bush, Wal-Mart is the real devil for them (maybe Chavez will mention that in his next speech).

Now, I am not an economist. I am not sure about all the micro and macro economic implications they cause. To be honest with you, I don’t think anyone really knows this for sure.

What I do know is that most of the accusations against it (and you can see a typical list here) are total b.s.

For instance, they say the salary is too low. But compared to what? If you ever went to a Wal-Mart you will notice that they employ a lot of, let’s say, “less desirable” employees: the very young and the very old; physically and mentally handicapped; and poorly educated people. How much would they get in any other job?

Workers understand this. Fat politicians have a very hard time accepting it.

Every other accusation follows the same reasoning. Wal-Mart is not illegal… Is just that they could do so much more! They could be nicer. They could plant trees. Why do they have to charge 4 bucks for medicine? I bet they could cut their profits and just give it for free!

And the most absurd part of this whole ‘movement’ against Wal-Mart is this idea that they forced their way into success (MR noticed that as well). Nobody likes such big stores and all that made in China crap. We miss so much the “homey store and friendly neighborhood shopping experience”! We are all just a bunch of suckers being tricked into buying from the big devil.

Why this dishonest scheme hasn’t worked in Germany you ask? Ah, the Germans must be smarter. Or maybe more homey.

Just for the record: I don’t shop at Wal-Mart. I like Target much better. Why? Because their service is better, the stores are nicer, and products have better quality.

Most of all, I don’t shop at Wal-Mart because I don’t need to.

Sweeten

After 12 years of continuous power and having governed Sweden for 65 of the last 74 years, the Social Democrats finally got voted out of office yesterday.

It was another close election (48.1 percent of the vote compared with 46.2) just like in Italy and Germany. It also keeps the current trend of ideological change through out Europe: right replaced by left (Spain, Italy) and left replaced by right (Germany, Sweden).

However, the change in Sweden is by far the most important. The “center-right coalition” victory is short of a miracle. It’s the proof that even the richest socialist system is not viable in its current form. More important yet, it’s proof that even when benefits are outrageously generous (unemployment pays 80 percent of previous income) people can be reasonable and be willing to change.

Johan Norberg could not be happier.

Uma agenda para crescer 9% ao ano

Muito interessante essa reportagem da Exame sobre esse estudo da McKinsey "Uma agenda para crescer 9% ao ano".

Não esperava diferenças de produtividade tão grandes. Mas no fim das contas, faz sentido. Principalmente quando se analisa os incentivos que existem num lugar e no outro. O sistema brasileiro é uma versão mal implementada do welfare europeu, aonde as 'recompensas' não existem mas a falta de incentivo para produção é brutal.

A informalidade é um reflexo desse sistema. Ela funciona como um 'workaround' da falta de dinâmica do mercado de trabalho, mas tem um custo indireto enorme: recompensa trabalhadores que ganham dinheiro suficiente para subexistência mas não o suficiente para chamar atenção das autoridades.

Mas apesar de ser um problema tão sério, ela é também o mais facil de se corrigir. Uma reforma completa das leis trabalhistas seria mais do que suficiente. Aqui nos EUA as empresas podem contratar e despedir quando bem entendem, com algumas exceções. E o sistema funciona.

Vale lembrar também que mesmo dentro de governos existem níveis diferentes de performance. Por coincidência, essa semana o MR publicou dois otimos posts sobre isso (Tyler e Alex). Desconfio que uma reforma trabalhista faria empregos públicos mais atraentes (pois seriam os únicos 'seguros') o que poderia contribuir para o aumento da qualidade de mão de obra no governo e consequentemente melhorar a eficiência do mesmo.

Um ponto não citado na reportagem (talvez seja parte do estudo) são os impostos absurdos sobre importados. Eu não sei dizer quais são as porcentagens oficiais, mas baseado em dados empíricos dá para ver que o nível é altíssimo.

Porquê um tênis fabricado no Vietnã custa 100 dólares nos EUA e 600 reais no Brasil?

Porquê um mesmo livro que custa 32 dólares nos EUA custa 150 reais no Brasil?

Qual é a lógica por trás disso? Quem é que se beneficia com esses impostos?

Isso precisa acabar.

How globalized are you?

Nacionalidade dos produtos que eu uso:

Relógio - Japan
Laptop - China
Sapato - China
Óculos - China
Carro - Germany
Calca - Sri Lanka
Cueca - República Dominicana
Jaqueta - Vietnam
Camisa - Honduras
Livro - USA
TV - Japan
Mesa de jantar - China (Taiwan)
Toalha de banho - China (Taiwan)
Câmara fotográfica - Malaysia

Simply the best

Fiz a besteira de deixar de ler o Marginal Revolution por uns dias. Olha só o que eu perdi:

- What is left for libertarians?
- The secret history of the minimum wage
- Ben Bernanke, economist. Parte preferida: "5. The global savings glut. Trade and budget deficits are enormous, so why aren't we collapsing? Why do real interest rates remain so low? Bernanke cited the possibility of a global savings glut; here is one explanation of the idea, here is another. The bottom line is this: some Asian countries have high levels of savings, but poor financial institutions. They invest their savings in the United States, and often we invest in back in Asia. In essence they are "outsourcing" their savings to foreign financial institutions. This recycling of Asian savings may help explain what is going on in the global economy. It also suggests that the current U.S. position is at least temporarily sustainable."

E muito mais. Sério, esse blog é simplesmente o melhor.

Complexo

"Q: How does Bush administration regard China now? A partner or a competitor?

A: I can not do speak for the Bush Administration. So you understand that this is my personal opinion. But there are a number of contentious, difficult issues in the US-China relationship today. I don't think there is one word to define the relationship other than the word "complex."

I think the relationship is very complex. I wouldn't say it's an enemy, a competitor, a friend, or an ally. But it's very complex relationship. We are trying to cooperate with one another on the issues such as North Korea. Other people have questioned about that. But then we had trade frictions with them. There are concerns about military buildup. There are also concerns about energy security. Some people are interested in China's economic policy. And human rights and proliferation are the areas where there is some friction in the relationship.

So I wouldn't say it's a competitor or I wouldn't say it's a friend or I wouldn't say it's an enemy. But I would say it's very complex relationship that we have with China right now."

Peter Brookes, Senior Fellow da Heritage Foundation (antigo assistente do secretário de defesa para Ásia e Pacífico) em entrevista para um jornal japonês.

Commanding Heights

Acabei de assistir a série Commanding Heights : The Battle for the World Economy da PBS, baseada no livro de mesmo nome.

Longe de ser uma análise detalhada, essa série é uma high level overview das mudanças econômicas e políticas do século XX e começo do XXI.

O tom é pro-mercado/globalização, mas sem exageros. Os vários problemas e desafios do sistema, como volatilidade de capitais, mistura de interesses públicos e privados, e terrorismo, são tratados com destaque.

As imagens ajudam muito na compreensão do assunto. Fica muito mais fácil entender o tamanho da crise da Inglaterra socialista quando se vê aqueles montes enormes de lixo e os confrontos com a polícia. Poucas imagens mostram melhor o que é a forca do tal mercado (e o desastre que foi o comunismo) do que aquelas pessoas vendendo bugigangas depois da descriminalização da iniciativa privada nos países comunistas.

O melhor de tudo é que a série está disponível no site da PBS totalmente de graça. O mesmo material dos DVDs, mais de 6 horas de vídeo, abertos para quem quiser.

Um material e tanto.