Tuesday, July 10, 2007

"Blissfully Uneducated"

The always superb Victor Davis Hanson in a piece in America.com, "Blissfully Uneducated," explores the state of higher education in this country and he does not like what he sees:

Americans increasingly cannot seem to answer questions like these adequately because they are blissfully uneducated. They have not acquired a broad knowledge of language, literature, philosophy, and history.

...[T]he aim of traditional education was to prepare a student in two very different ways. First, classes offered information drawn from the ages—the significance of Gettysburg, the characters in a Shakespeare play, or the nature of the subjunctive mood. Integral to this acquisition were key dates, facts, names, and terms by which students, in a focused manner in conversation and
speech, could refer to the broad knowledge that they had gathered.

Second, traditional education taught a method of inductive inquiry. Vocabulary, grammar, syntax, logic, and rhetoric were tools to be used by a student, drawing on an accumulated storehouse of information, to present well-reasoned opinions—the ideology of which was largely irrelevant to
professors and the university.

Sometime in the 1960s—perhaps due to frustration over the Vietnam War, perhaps as a manifestation of the cultural transformations of the age—the university jettisoned the classical approach and adopted the therapeutic.

In the end, education is the ability to make sense of the chaotic present through the prism of the absolute and eternal truths of the ages. But if there are no prisms—no absolutes, no eternals, no truths, no ages past—then the present will appear only as nonsense.

As always read all of Hanson's writing.

Sunday, July 08, 2007

NYT: Dems on China "Wrongheaded"

Even the New York Times sees trade wars with China as a "wrongheaded prescription," and "misguided." From an editorial, "Politics and the Yuan", here's the NYT:

Just in time for the presidential campaign, Barack Obama has joined Hillary Clinton on the misguided bandwagon of those seeking to penalize China for manipulating its currency. Last week, the two senators and Democratic candidates signed up as co-sponsors to a punish-China bill that would mandate retaliation against countries that keep their currencies cheap to boost their exports....

Still, the prescription is wrongheaded. There is no guarantee that a rise in the value of the yuan would, on its own, boost American workers’ wages or the economy in any significant way. Many of the things China exports to the United States have not been made in America for a long time. Forcing China to revalue the yuan would likely also lead to higher prices for goods in the United States and to a rise in interest rates if China decides to stop buying American Treasury bonds.

And it will complicate the management of a long list of nonfinancial issues the two nations urgently need to address....

Starting a trade war is not likely to change Beijing’s mind. And it will make it harder to persuade and pressure China to become a more responsible exporter and a more responsible international player.

So make a note, I agree with the New York Times on this issue.

Protectionism US Recession Trigger?

Let me help put 2 + 2 together for us all here. Why am I harping on protectionism and China in particular? To answer the question some context is required.

First let's look at some positive economic numbers along with what Wall Street fears in terms of a significant downturn scanario. From the Capital Commerce blog by James Pethotoukis, "Economy Booming, So What Might Start the Next Recession?" where we find:

More good news came from the June income numbers: Real wages for workers—not managers—increased by 3.9 percent, year over year. Deflate by the core May inflation rate of 2.3 percent—the latest numbers available—and you get real wage growth of 1.6 percent. Not too shabby. Right now, Wall Street recession expectations are pretty low. "The threat of recession has abated, as job and income gains provide the wherewithal to support consumer spending," is the analysis of former Federal Reserve governor Lyle Gramley. In fact, the Big Money Crowd is more worried about China than U.S. housing as a source of future trouble. Case in point: this missive "What Would the Next Recession Look Like" that Goldman Sachs just sent me:

"So, what constitutes a recession in modern times, and when do they occur?...We suspect it would almost certainly involve a major economic slowdown in China. On almost any criteria (and topic), it is impossible to underestimate China's positive impact on the buoyancy of world growth this decade. That said, ourproprietary indicators show no sign of an imminent slowdown. In addition, our various proprietary indices suggest that the underlying global macro environment remains favorable...Moreover, if we and the consensus are correct, then the period 2003-2008 will have been one of the most powerful periods of economic growth globally since accurate data has been collectable for much of the world."

So if a slowdown in China is our biggest economic pitfall, then why on God's green earth would anyone want to start a trade war with China that would nehatively impact our relationship with China, the Chinese economy, and hence our economy? Ask the Democratic leadership in Congress, some pandering fear-mongering Republicans, and the Lou Dobbs of the world for an answer.