Tuesday, April 04, 2017

Stiglitz, Krugman..

The always readable Stiglitz and Krugman have items of interest up:

1. JS has an article in the Guardian entitled Putin's illiberal stagnation in Russia offers a valuable lesson

I liked the sarcasm (well, I think it is intended as such) in the last line:
They sell their system of “illiberal democracy” on the basis of pragmatism, not some universal theory of history. These leaders claim they are simply more effective at getting things done.

That is certainly true when it comes to stirring nationalist sentiment and stifling dissent. They have been less effective, however, in nurturing long-term economic growth. Once one of the world’s two superpowers, Russia’s GDP is now about 40% of Germany’s and just over 50% of France’s. Life expectancy at birth ranks 153rd in the world, just behind Honduras and Kazakhstan.

In terms of per capita income, Russia ranks 73rd (in terms of purchasing power parity) – well below the Soviet Union’s former satellites in central and eastern Europe. The country has deindustrialised: the vast majority of its exports now come from natural resources. It has not evolved into a “normal” market economy, but rather into a peculiar form of crony-state capitalism.

Yes, Russia still punches above its weight in some areas, such as nuclear weapons.
Can't say I know about the corruption scandal he refers to here:
Fifteen years ago, when I wrote Globalization and its Discontents, I argued that this “shock therapy” approach to economic reform was a dismal failure. But defenders of that doctrine cautioned patience: one could make such judgments only with a longer-run perspective.

Today, more than 25 years since the onset of transition, those earlier results have been confirmed, and those who argued that private property rights, once created, would give rise to broader demands for the rule of law have been proven wrong. Russia and many of the other transition countries are lagging further behind the advanced economies than ever. GDP in some transition countries is below its level at the beginning of the transition.

Many in Russia believe the US Treasury pushed Washington consensus policies to weaken their country. The deep corruption of the Harvard University team chosen to “help” Russia in its transition, described in a detailed account published in 2006 by Institutional Investor, reinforced these beliefs.
The only thing I would comment on about this, though, is that it is curious that there seems to be one huge exception to crony capitalism not working - South Korea.   Mind you, it seems a very peculiar, somewhat turbulent country in a couple of respects (political and religious), and maybe its success won't continue indefinitely.  Or maybe it just shows that if you capture a huge market share in TVs and phones you'll always do well...

2.  Paul Krugman writes about Trump wimping out on his trade rhetoric, and recounts one incident I might have missed on TV:
So on Friday the White House scheduled a ceremony in which Mr. Trump would sign two new executive orders on trade. The goal, presumably, was to counteract the growing impression that his bombast on trade was sound and fury signifying nothing.

Unfortunately, the executive orders in question were, to use the technical term, nothingburgers. One called for a report on the causes of the trade deficit; wait, they’re just starting to study the issue? The other addressed some minor issues of tariff collection, and its content apparently duplicated an act President Obama already signed last year.

Not surprisingly, reporters at the event questioned the president, not about trade, but about Michael Flynn and the Russia connection. Mr. Trump then walked out of the room — without signing the orders. (Vice President Mike Pence gathered them up, and the White House claims that they were signed later.)

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