New Economies Policies Needed for USA

In the 90's & the 2,000's I have been single out to both presidents' that United State would need to built the economy power based on the Knowledge Base economy or rather the e-Economy.

I am a strong believer of Landbased prosperity is gone in the developed country & later the developing countries as well. The recent melt down on economy which have caused the economic Tsunami of our life time is just the prove on these.

In the next few issues, I would give you more on my thought on the way United State of America need to stay as the leader & continue exercising the power & influence of the economy & politics in this world.

Please read the following for now:-

What Obama Needs To Do
By jeffrey.sachs
Created 11/05/2008 - 10:18am


The election victory of Barack Obama offers a breathtaking hope for economic recovery, indeed a hope of historic proportion for America and the world. Change we can—if we escape from narrow thinking and tinkering around the edges of public policy. More gimmicks such as one-off rebate checks or zero interest rates at the Fed, as some now propose, will not suffice. The government needs a clear medium-term strategy, to reinvigorate private investment spending, and it will need increased budget revenues in the years ahead for urgent public investments and long-term restructuring. Short-term recovery will be promoted by clarity on the long-term direction of economic change.

In short, the U.S. economic crisis requires a new kind of macroeconomics, and it is the most urgent task before President-elect Barack Obama. The Humpty Dumpty of the housing and consumer bubbles cannot be put back together, no matter how many Wall Street bailouts, liquidity injections, or tax rebates are put in place. The end of the consumption boom marks the collapse of an era that began with Ronald Reagan. Some pundits and politicians would like to return to the policies of the Clinton years, but those policies were compromises with Reaganism that will no longer suffice. Twenty-first-century problems cannot be solved by trying to resurrect the policies of the 20th century.

The U.S. economy is spiraling downward into recession and gargantuan budget deficits. The Fed pumped up the economy for years and encouraged the reckless overlending and overborrowing for housing and consumer credit, all in the name of keeping the economy growing. (Remember, after all, how George Bush encouraged us to shop as the patriotic response to 9/11). A country that sustains zero or negative household saving rates for years and borrows heavily from abroad is bound to pay a heavy price and that time has come for the United States. But even worse, while the housing and consumption bubbles were ballooning and the Iraq war was bleeding lives and money, a range of other crucial challenges—environment, energy, infrastructure, inequality, global poverty—were all neglected. Now, the macroeconomic and structural crises are coming to a head simultaneously.

Here is a quick tour of our macroeconomic miseries, with roots that go back 40 years. The 1970s marked the end of two eras, the gold-backed monetary system (which ended between 1971 and 1973) and the era of cheap oil, which ended in 1973. The dual crisis, poorly understood at its inception, ushered in several painful years of stagflation, in which scarce energy was coupled with monetary policy mismanagement, to produce both high inflation and economic contraction. Jimmy Carter was dead right about the long-term energy challenge, but he was mocked for his efforts, which were abandoned after he left office.

Ronald Reagan misdiagnosed the stagflation, and put the United States on a disastrous long-term course. Reagan and his colleagues argued erroneously that the problems lay in government regulation, excessive taxation, and welfare handouts rather than on the need for a redesign of monetary policy (which Paul Volcker painfully accomplished) and a sound long-term energy policy. They proceeded to dismantle much of the social safety net, building an underclass in America that is shocking by the standards of any other advanced economy in the world, for example, leaving America ranked 24th in the world in life expectancy and 25th in infant mortality. The great myth in America is that capitalism demands such brutal neglect of the poor, a point that is disproved daily by the high incomes, low poverty, and social cohesion of other advanced economies. The Reagan tax cuts led to a generation in which we've been unable to invest in basic infrastructure. And the Reagan era began the massive financial deregulation that brought us to today's calamities.

The Clinton era reversed some of the excesses of the Reagan era but was basically a compromise with it. During the 1990s, tax revenues as a share of GNP were kept low, and Washington continued to dismember the social safety net (by "ending welfare as we know it" and abandoning any major efforts in housing, child care, or public education) and to accelerate financial market deregulation. Foreign assistance in the 1990s fell to rock bottom, a miserly 0.1 percent of GNP, allowing the AIDS pandemic and African hunger crisis to build. Then as now, Americans failed to understand that unattended hunger, disease, and deprivation are the breeding grounds of extremism and conflict that threaten our national security and lead to vastly larger costs.

Big money further infected the political system as well. Both Democrats and Republicans made peace with vast wealth by linking up with the high-flying innovators on Wall Street, the ones who have now crashed to earth. Yet the supplication to the bond market was taken to mean the end of ambitions to solve great challenges of energy, climate, poverty, or infrastructure. Universal health care remained essentially the only area of remaining progressive commitment, and that, of course, went unfulfilled.

Marx famously said that history comes first as tragedy and then as farce. Yet under Bush we've had both tragedy and farce. The Bush administration made shopping and tax cuts the official macroeconomic policy of the United States. Households were to borrow against their housing wealth to keep the consumption machine going. Financial deregulation, building on the precedents of the 1980s and 1990s (and the savings-and-loan and dot-com bubbles they helped to stoke), would keep the housing market in fine fettle.

We have, as a result of all of these changes, a U.S. economy that has been brought to its knees despite the incredible underlying strength of American innovation, the ultimate engine of prosperity. Here's the list of particulars. Consumer spending is in free fall, toppling housing, autos, and other consumer industries. Unemployment will rise by several percentage points. The budget deficit is ballooning, at around $460 billion this past year, and set to expand by several hundred billion dollars in fiscal year 2009. Some are forecasting a cool trillion dollars in the fiscal 2009 deficit.

America's dependence on foreign borrowing has also reached staggering and unsustainable proportions of more than $700 billion per year. Foreign central banks, mainly in Asia, have accumulated trillions of dollars of claims on the United States. And, of course, the banks remain deeply decapitalized and unable or unwilling to lend. Unconscionable Wall Street bonuses, exceeding $30 billion per year in 2006 and 2007 played their role, both by creating a climate of reckless short-termism and, more directly, by depleting the companies' net worths.

The energy sector is in a shambles. There is no national strategy to address the three-sided challenge of energy security, energy availability, and climate change. We've been reduced to a nearly insane call to drill, baby, drill. Hapless and woefully misinformed Americans are led to believe that there is a quick and lasting remedy in an environmentally dubious "solution" that would take years to produce the first drop of oil and that might produce a total of 25 billion barrels of oil, less than one year's global consumption.

Serious longer-term alternatives—such as carbon capture and sequestration, properly regulated nuclear power, and large-scale wind and solar power—are caught up in incredible confusion and lack of political leadership. Dishonesty and shortsightedness abound. Under Bush, the federal government has been spending less per year on energy research and development than in two days on the Pentagon. And industry is rightly paralyzed in building new power plants, not seeing any clear direction on national policies.

Indeed, just about the only thing the Bush administration found money for was military invasions and occupations, surely the one investment that is yielding us a nearly solid negative-100 percent return. The money has gone right down the drain, into Blackwater and Halliburton bank accounts, or the destruction of villages in the mountains of Afghanistan, where cruise missiles and bombs continue to blow up whole families, often dozens of members at a time.

The Obama economic strategy unveiled during the campaign has the right pieces, but he will need to be bold to make real change. He is right that we should spend vastly more on the research, development, demonstration, and deployment of clean, sustainable energy. His R&D proposal of $15 billion a year is a great advance over today, but it's quite likely that even twice that amount will be needed. We should remember that even $30 billion is merely 0.2 percent of our annual GNP, and we should put all fiscal choices in the context of a $14 trillion economy, a $700 billion military budget, and about $1 trillion, if not more, in bank bailouts and guarantees.

Obama is absolutely correct that America will be much safer if we invest more in foreign development than in foreign wars. He has proposed to boost development aid to $50 billion by 2012, an important move in the right direction but one that would still leave the assistance budget at a mere 0.3 percent of GNP, still far too low to address the multiple crises of water, hunger, disease, population, and climate in Africa, the Middle East, and Central Asia that fuel much of the global unrest today—and far below the internationally agreed—upon target of 0.7 percent (of which the United States has been a signatory since 2002).

America will sooner or later have to overcome its extreme allergy to taxation at a time when the government is hemorrhaging in deficits and when urgent public needs go unfulfilled. Obama's economic advisers have emphasized that their proposed tax package would leave federal fiscal revenues at around 18 percent of GNP, noting that this would be around the average of the Reagan years. Reaganism would live on, as it did through the Clinton years, by keeping the United States on a small-government path guaranteed to leave unsolved the problems of energy, infrastructure, poverty at home and abroad, and an aging population. Some off-budget revenues such as new income from auctioning carbon permits could raise some more funds, but the basic point should be clear: Our problems will need a robust fiscal program, with a gradual rise in tax revenues as a share of GNP during the next decade, or they won't be solved at all. We should avoid raising taxes on the middle class during a steep downturn, but we should also not lock in chronically deficient tax revenues for years to come.

Our macroeconomic problems require major public investments in new technologies, infrastructure, public education, and poverty reduction. At some point soon, Americans will have to start paying for these investments themselves, rather than borrowing heavily from abroad. We are experiencing the structural shift from an economy relying on easy money and seemingly endless international borrowing to an economy that is gradually realizing that ultimately we will have to pay our way, especially if the United States wants to be a leading power. There are pressing domestic and global investment needs, and the money has to come from somewhere. The only place it can come from is an increased tax base, which requires abandoning the Reagan-Bush mythology.

In sum, the recipes since 1981 of small government and small-bore solutions are passé and dangerous for our very survival in the United States and on this planet. While Reagan was crudely ideological, Clinton mildly reformist, and Bush simply crude in the application of these small-government doctrines, none of the recent approaches will do. It's time to stop talking about who can give away more to the public in rebates and start talking about investing in our future in a way that can save the poor, sustain the rest, and build a decent world for our children. Those are the real family values.

http://tbm.thebigmoney.com/articles/judgments/2008/11/05/what-obama-needs-do?page=full

Dongshan Island - China Riots

The following is what I found on Time Blog

Back in June, the people of the coastal city of Xiamen came out onto the streets for two successive days to protest plans to allow a billion-dollar chemical plant to be built within city limits. It was an unprecedented but entirely peaceful demonstration and, after considerable twists and turns, eventually resulted in the municipal government deciding to relocate the project to an island about 100 kilometers to the south of Xiamen. At the time, we noted that the authorities would have a hard time controlling the impulse to demonstrate in other cities. Sure enough, there were protests in Shanghai (over a planned train project) and elsewhere. They were entirely peaceful and relatively small, involving only a few hundred people. Now however, it looks as though that same chemical plant that caused the trouble in Xiamen is sparking large protest again, this time violent, with one or more protesters possibly dying. Reports remain sketchy—material on the internet in China is rapidly blocked or deleted—but it's now clear that many thousands, perhaps tens of thousands of residents living near the proposed site of the relocated plant have been showing their displeasure at the plan.

One post entitled, "New development on PX Project: Protest at Dongshan Island" on a Sohu.com (a popular portal) bulletin board mysteriously survived three days of censorship. Although the authorities never officially announced the plan to relocate the chemical plant to Gulei Peninsula in Zhangzhou City, the local opposition to the project was very strong. On Dongshan Island, which is next to the proposed project site, that opposition burst into the open on Feb.29.

"On Feb. 29th, the peaceful island witnessed a historic breakout by the residents. Thousands of people blocked the main roads in town and stopped all vehicles leaving for the government district of Dongshan County", the post recounts. And this was only the prelude. On March 1, "thousands of motorcycles, vans, buses, and even more people took to the streets", and an "even bigger demonstration has been planned for the next day". According to the posts, several police cars were destroyed by "furious protestors", and severe injuries occurred on both sides. A death toll of 1 or 3 is cited in the follow-up posts.

With a population of only 220,000, Dongshan Island mostly depends on tourism and the fishing industry for its local GDP. "We are diligent, honest and law abiding people. We put up with constant military exercises, we make a living by hard, honest labor, and what more do we have to give?" says an angry poster, "We can't afford to live in Xiamen with the salary we make, and now we are driven away from Dongshan as well! If we put up with the pollution from PX and endure the consequences, how can we explain to future generations?"

The local Dongshan authorities responded to the protest on the morning of the 2nd with an "Open letter to Dongshan citizens", broadcast only on local TV. Internet posts on the riot are quickly deleted as soon as they appear, but bits and pieces of surviving information indicate that the government's open letter--which warned against further protests--failed to mollify the demonstrators.

I shall give more information tomorrow!!

Yahoo! Up on 'Semel Is Out' Rumors

Yahoo! Terry Semel Is Out??

Yahoo! (YHOO-NASDAQ) is trading up about 2% in early trading on market rumors that Terry Semel is either out or on his way out. Is this true? Well, he didn't give this impression just last week and the company would have probably kept him from speaking too much if it was going to force Semel out. We have been pretty vocal about Terry Semel needing to leave. There was actually a point where he was the right guy at the right time, but that was a temporary issue and his value to the company was in the past. Semel came in at a time when the company needed someone with tenure and real world experience.

Can the above be true??

My opinion is that whatever the action of Yahoo! Board of directors took, the current Board member lack the solid credential to take the top job.

It is better for yahoo to find a season boomer Senior executives to run the Business.

In my opinion, there are too many in fighting in Yahoo. As many are eying the $1XXmillions a year job.

Updates On Censorship Issue On flickr

China begins purge on Internet porn!! "Strip shows, images, stories, audio, video. ‘This pervion corrupts China's young minds" says Chinese government

CharlieBrown8989 says: name reply / icon reply www.itwire.com.au/content/view/8877/53/ Chinese Internet population hits 137m PDF Print E-mail By Alex Zaharov-Reutt Wednesday, 24 January 2007 That leaves over 1.1b Chinese offline, but figures have grown an impressive 23.4% in the last year, now reaching 10.5% of the Chinese population. Related stories * Salesforce.com adds content management to SaaS lineup * Yahoo's Alpha in beta * Firefox goes social with The Coop * MySpace debut for Eisner's Prom Queen * Old media "YouTube killers" just don't get it The China Internet Network Information Center (CNNIC) has published its 19th report (although unavailable at the English version of the website at the time of writing), announcing a big jump in Chinese Internet users, according to Reuters and Cnet. Actually the un official number could be even more. I am told by end of Dec 2006, China already over took US as Number 1 internet population in the world. When I visit the mountain logs area un rural China. I am surprising to find that there are computer center & internet cafe. In 2005, when I visit the same area, there isn't any computer there!! From my research & up bring in, Chinese culture is not to eat other people bowl of rice. The Legend Teaching is: " Just clean up your own front yard snow, Never border about other Ice on their neighbour roof!!" masterdebater16 remark is exactly the requirement on China for Many thousand years. You see Marco Polo is the great embassador of the west on the trade, he is the advisor to Gengiskhan, he trades the culture & technology at both end. But he never put rules on China!! Looking back into the end of the last China imperialism era, those 8 Nations attempt to colonized China , Japanese Invasion, Soviet Union Communist International attempts to control over China all failed!! Looking at 1977 the War "To Teach North Vietnam" a lesson!! That exactly exhibited China did use the Sun Zi Art of War strategy. As well as behave as a big brother of North Vietnam then. In the Chinese culture, they know what is the family affair & what is external. I believe the leaders there know how to treat friends & allies nice. So that they have the life boat when they call the term ended!! They do know that as a big country if they don't behave like what they suppose to conduct then with the internet technology & the international pressure they would cannot be a bully. It is the Chinese family teaching for the 6,XXX years of civilization that one should be behave more on the "Yin" & take losses then be a aggressor. That is Chinese people call Virtue. Although there might be some hawks may attempt to flex the power. But as the Dao of Nature. Nothing is Permanant!! Birth & Death is just in a Cycle!! - Gotama The above is my additional comments on my understanding of Chinese Culture.... Additional reading: http://www.flickr.com/photos/journalism/457862733/?#comment72157600074369149