Friday, November 24, 2006

The Anxiety Kingdom

There is a story in today's Post that, in microcosm, describes China's growing economic problem: Unemployable college graduates. Not because they lack the skills to get decent jobs (the jobs their parents assume college will open the doors for them to get), but because China's economic and regulatory environment make it too hard for the business to start to provide an opportunity to the young people with energy and creativity.

Like so many things, there's a catch. China can't afford to simply free up the restraints on their economic and business sytems. Why? Because it will tear apart the economy from too much economic growth. It's currently caught between a rock and a hard place, both of it's own making: it needs as many college graduates as possible to provide upward mobility for a population enormously in need of hope; but at the same time it has to slow (to a modest 8 or 9%)the economic growth so that the economy doesn't destabilize the whole country.

I'm a bit worried that we're going to have more of this kind of news before we hear less.

Thursday, November 02, 2006

Global warming and economics

Global Warming To Cost Up To 20% of Global GDP

In college and in grad school, I had ongoing debates with my roommates and friends about the need to quantify, in dollar terms, the costs of global warming, if we wanted the businesses and governments around the world to start taking it seriously. If there isn't a dollar value attached to it, it doesn't affect their bottom line, and they don't have to worry about it.

Sir Nicholas Stern has just done this, in a 700 page report he prepared under a commission from the Chancellor of the Exchequer, Gordon Brown, in the UK. In his report he presents the costs of global warming at between 5-20% of annual global GDP over the next century plus. If this were an average loss to everyone on the planet, it would mean the average american would earn 8,000 less a year, just because of global warming.

It's a long report, the executive summary is even 27 pages. The middle of the summary is pretty interesting. I'd suggest starting to read at page 10 or so.