What Am I Reading?

Umair Haque on some certain ways America is excelling at...mediocrity. Noah Smith has a sort of rebuttal on this but it's partially fair. The truth is that while there are several things still good and great, it's becoming increasingly difficult to deny the erosion of the bedrock that made America a global hegemon - infrastructure.

In the broader sense of the word, schools/education, institutions, transportation etc which cost money to build, maintain, revamp, upgrade. It's true, the pace of convergence (and divergence now for some!) vis-a-vis other developed nations is startling. Sooner or later, this is going to start telling a lot more.

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Feldstein has an interesting piece on India Shining: Part (I've lost count - insert number here). I could save you the read and encapsulate bits into a paragraph:

"The Indian economy is coming back. After several years of disappointing performance, the authorities are shifting to policies aimed at boosting the annual growth rate closer to the roughly 9% level that India achieved from 2004 to 2008...All of this is an enormous undertaking – one that 

confronts innumerable potential impediments, both economic and political. But I am betting that India is rising again: millions more will be lifted out of poverty in the coming years, while the increasingly prosperous Indian middle class will expand further." 

Nope, that's not really fair is it? Time to quit being a skeptic and put in the other bits:

"Although India has outstanding universities and technological institutes, the primary-education system is disastrously poor...India’s infrastructure is inadequate for a modern economy. With too little electricity, blackouts are common. Ports are inefficient, roads are congested, and traffic is astonishingly chaotic...Likewise, India’s recent decision to allow large foreign retailers like Wal-Mart to enter the market reflects an encouraging change of attitude that is important beyond the specifics of the particular firms that will now come to India. And legislation will soon create the opportunity for expanded foreign ownership in the financial sector...On the fiscal front, the shift from a complex system of state-level indirect taxes to a national goods and services tax (a type of value-added tax) will improve efficiency and raise revenue. Lowering the subsidy for diesel fuel was politically difficult, but will reduce both the fiscal deficit and excessive use of diesel products...Government investment in infrastructure, both alone and in partnership with private firms, will also directly benefit growth and attract larger inflows of foreign investment."

Easy enough to be optimistic when you're not living the pessimism or in other words, easy enough to see the glass half-full when you're not the one drinking the water.

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And Stephen Roach comes down pretty hard on Abe's latest and greatest from the Land of the Rising Sun. In general, he comes down hard on easing measures taken globally and compares Japan's zombie corporations of the lost decade to America's zombie consumers, both products of ineffecient central banking I presume. 

What Roach does make clear though, is this: we're mired in a classic liquidity trap and the last thing Japan needs is to follow suit and backtrack on serious structural reform. Roach worries about the excess liquidity that is due to be 'sloshing around' in global asset markets without having boosted balance-sheet repair or led to structural change. 

In that sense, he's not wrong.