Astute observers of foreign financial markets have witnessed the transformation of the Asia-Pacific economy, with many Asian nations moving from backward, third-world economies to first world status. Japan stands as the world’s second largest economy. China leaped from a GDP of $147 billion in 1978 to $2.26 trillion in 2005. South Korea emerged as a leading exporting nation. Singapore, formerly a primitive town, plays a pivotal role as an international financial center in the global economy. Vietnam is following the lead of its fellow Communist nation, China, by instituting economic reforms. Malaysia and Thailand enjoy a thriving tourism industry, as well as having significant manufacturing operations. A number of leading economists even have stated that the economic future of the 21st century lies with Asia not America; but the jury is still out on that prediction.
Recent incidents however, suggest that an economic crisis in Asia may be looming, with events in Japan setting the stage. On January 24, 2006 Takefumie Horie, president of Livedoor (an internet company), was arrested on charges of violating the securities exchange laws. He was accused of trying to influence the company’s stock price by spreading false information, issuing new shares, buying businesses already under his company’s control and then selling them at higher prices to create false profits. Mr Horie’s arrest sent shockwaves throughout Japanese business community. The day after his arrest the stock market in Japan, which had been on a bull market rampage, plunged 336.04 points (2.14%).
The Japanese media has been reporting on other acts of business corruption, leading investors to question the integrity of the entire corporate system in Japan. A successful architect conspired to build apartments that didn’t meet earthquake codes. Construction companies have been indicted for bid-rigging on highway contracts. Defense department officials were caught defrauding the U.S. army over base relocations. 70% of Japanese firms recently polled believe that their government must enforce stricter regulations over business activities going forward.
On the other hand, South Korea’s economy has been hampered by excessive regulations. At a New Year’s press conference, President Roh Moo-hyun of South Korea, announced plans to raise taxes, expand the bureaucracy and increase government regulations. He stated that closing the income gap deserves more attention than strengthening the economy. His policies have scared away many foreign investors.
While South Korea’s economy is driven by its exports, its currency (the Korean Won) appreciated significantly against the US dollar last year, making its products more expensive while American imports are cheaper. South Korea’s trade surplus in January 2006 increased by an annualized rate of 4.3%, its slowest monthly growth in five years.
China will suffer the most of any Asian nation if its foreign trade deteriorates. Hazards remain on the horizon. Last year China’s trade surplus with the U.S. was $114.7 billion. Understandably, American manufacturers are raising their voices against these imbalances. If the U.S. Congress were to impose trade sanctions, China would be in a difficult position.
Also, the continuation of higher and higher oil prices could spell doom for the Asia-Pacific region since the Asian nations must import most of their energy supply. The Asia-Pacific region has become an expensive place to live due to exorbitant real estate prices, but it is questionable whether these values can be sustained. Asians have invested much of their savings in the real estate market, naively assuming that prices will keep rising. (This sounds like certain housing markets in the U.S.) It’s problems like these that could pop the Asian economic bubble.
Statements of possible gloom and doom sound out of synch in the Asian-Pacific region where nations like China and South Korea have shown such explosive growth in recent decades. But, Asia is not immune to a possible downturn in the world economy. Lest one forget on October 27, 1929, most Americans assumed that their investments would continue to soar to new heights. The stock market crashed the next day. Some observers warned them about a possible downturn, but most Americans didn’t listen to those critics of the U.S. economy then. Are similar warning signs telling Asians that their economic bubble may soon be popped? If so, not many people seem to be taking heed.
In his weekly column for prudentbear.com, Doug Noland reveals how heavily dependant the U.S. is on China buying our U.S. Treasuries to keep our interest rates low. He quotes Xinhua Finance News (XFN) on the matter: "China has bought nearly 40% of new U.S. Treasury issuance in recent years...Without fund inflows from China, it would be impossible for the U.S. to keep its interest rates at such a low level with its surging budget deficit."
Shouldn't this heavy reliance on China to buy our U.S currency cause our Washington politicians to re-think their rather indifferent attitude towards our huge budget and trade deficits? One of these days, The Chinese may decide to stop buying our Treasuries. What happens then?
1932, 1933, & 2005 – what do all these years have in common? According to government statistics, they are the only 3 years since the 1920s that Americans in aggregate decided not to save any money. The calculated U.S. savings rate is not an all-encompassing calculation of savings, but its does do a good job of capturing the directional movement of savings in this country. There is no mistaking from the figures that the U.S. has turned from a nation of savers in recent decades into a nation of debtors.
Coping with a massive 25% unemployment rate in 1933, many Americans would almost certainly have needed to burn through savings just to survive. However, in 2005, there are no dire macroeconomic forces that explain the U.S.’ lack of saving. Today, conspicuous consumption and a desire to maintain a certain lifestyle (aided and abetted by an overly accommodative Fed) have led U.S. citizens to empty out their pocketbooks fooled by the wealth effect of paper gains on their homes and other financial assets. Americans simply want to have their cake and eat it too. With the unemployment rate (though understated by the government’s shrinking employable base) at only 4.7%, it is hard to find a sound reason why we as a country don’t save money. Like a child that spends all of his allowance money because he sees no advantage to saving, U.S. consumers have found that owning a Lexus or two, new clothes, and an ever larger home are far more preferable activities than clipping a couple percentage points of interest in a passbook savings account. However, most kids cannot rely on their parents’ generosity forever and the U.S. consumer cannot rely on additional debt and home equity gains forever. Whether it is turning 18, finishing college, or rising interest rates, unsustainable situations have a way of ending very abruptly and often at very inconvenient times. We are curious to see if 2006 becomes one of those inconvenient times.
An incumbent seeking reelection may have raised the budget of the County Clerk by as much as 2.69 percent after claiming to have saved taxpayers $4.5 million dollars, according to her opponent in the Republican primary.
Calhoun’s opponent, Carolyn Garon, told the Dallasblog that the Dallas Morning News’ endorsement of incumbent Cynthia Calhoun is based on flawed information regarding Calhoun’s accomplishments at the County Clerk’s office. Garon is a former employee of twelve years with the County Clerk’s office who retired so that she could run against her former boss in the Republican primary.
According to pages from the Monthly Analysis of Budgeted Operations from the Dallas County Auditor’s Office, the total expenditures for the County Clerk for the fiscal year of 2006 have so far been $9,374,453. This marked an increase of $278,453 from fiscal year of 2005 and a cumulative increase of $245,453.
Garon is claiming that Calhoun could not have saved expenditures from the County Clerk’s office since the County Auditor shows that expenditures at the County Clerk have gone up since Calhoun took office in 2003.
“It is amazing that she is claiming $4.5 million in savings. That is 50 percent of the entire budget,” said Garon. She was referring to the rough yearly average of expenditures over the past several years.
According to the County Auditor report, average yearly expenditures have been slightly over 9 million. With the exception of fiscal year 2005, every year shows an increase in expenditures.
In an interview with the Dallasblog, Calhoun confirmed that expenditures at the County Clerk did rise, however, she rejected Garon’s claim that she did not create 4.5 million in savings.
“The 4.5 million is absolute. That money came from the difference in a contractual figure. I paid for that contract with a separate fund,” said Calhoun. Calhoun was referring to the difference in savings between the current contract with Affiliated Computer Systems (AIS) and the previous contract with Bering Point. Calhoun said that the contract with AIS was paid for with money from the Out-of-Records-Management-Fund and that the $4.5 million was saved by switching to AIS.
According to Calhoun, the Out-of-Records-Management-Fund was created by the Texas legislature to help Texas counties maintain their property records. The source of the fund is the revenue received from per-document fees charged by the counties. Money earned by the fees is sent to the State’s Out-of-Records-Management-Fund before it is eventually allocated back to the counties
When asked about the actual budget increases, Calhoun said that the budget rose since 2003 because the volume of documents coming into the County Clerk’s office increased in number. “Our budget increases as our volume of documents increases,” said Calhoun. “As the volume of documents increases, it takes more money to get those documents out.”
Calhoun also said that the County Clerk’s budget only reflects expenditures, and that it does not reflect what Calhoun called “profits”. According to Calhoun, the County Clerk’s profits were derived from the fees that went into the Out-of-Records-Management-Fund.
“She never saved taxpayers a penny. In fact, she went up nearly $250,000,” said Garon. The disagreement between the primary opponents over savings seems to be rooted in a difference in interpretation over what constitutes savings.
I knew it was going to come to this...Yep, just a matter of time before the "Pakistani Clerics" put a hit out on the culprit cartoonists responsible for defaming the diety. Not just any hit though...One million dollars for the head of the evil-doer. Knowing the group that I came to know and love over a thirty-some-odd-year period, this would almost be seen as a challenge. "You mean they only want a million for your bones?...Last week they offered two for mine...and, hey, can you win an award for this?...Any cash involved?
Reminds me of a rather famous Parker & Hart "Wizard of Id" cartoon with an editor standing in front of his cartoonist ready to meet the gallows as the King looks on... The King saying ..."No, put them in the right order...This editor always stands BEHIND his cartoonist".
Wow. Seems like we have fact chasing fiction down at warp speed. This cannot be the first time in the annals of history that Muslims have been infuriated over a cartoon. It also seems that we as journalists have a lot of work to do figuring this one out. Is it just a glitch, a bump in the long road of journalistic freedom, or are we on the verge of having to redefine our critial methods as allowed us by our freedom of speech?
Whatever the answer, there are about a dozen Danish cartoonists whose lives and careers just took on a whole new meaning.
The U.S. Supreme Court on Friday granted the Bush administration's request to join Texas in defending the congressional redistricting map that former House Majority Leader Tom DeLay of Texas helped to engineer. The Associated Press reported that the administration will share time with Texas lawyers on March 1 when the court will hear appeals regarding the Texas redistricting case. According to another AP report, the 3rd Court of Appeals in Austin will hear arguments from attorneys on March 22 over whether a conspiracy charge against DeLay should stand.
The Board of the Stonewall Democrats of Dallas has rescinded its March 7, 2006, Democratic primary endorsement of state House District 108 candidate Tom Malin.
The action of the board came after The Dallas Morning News reported Friday that Malin had previously worked as a male prostitute in the New York and Los Angeles areas. The board’s decision is subject to a vote of the organization’s members at its meeting next week.
Michael Moon, president of the Dallas Stonewalls, told The Dallas Voice that prior to the group’s endorsement, Malin was confronted with rumors about his past, but denied them. "I hate to say this, but I think if he really cares about the Democratic Party, he will withdraw from the race," Moon told the Voice.
The Morning News and the Dallas Tejano Democrats are also said to be reconsidering their endorsements of Malin.
The Dallas Stonewall Democrats is the largest, most active local gay and lesbian party-affiliated organization in the state and has substantial influence in Dallas County politics with its voter education and turnout efforts. Dallas resident Shannon Bailey serves as the president of the state organization, the Stonewall Democrats of Texas, and is a member of the State Democratic Executive Committee.
Speaker Tom Craddick and Lt. Gov. David Dewhurst have authorized Albert Hawkins, Executive Commissioner of Health and Human Services, to increase spending on trauma care, mental health services, and reimbursement rates in nursing homes. They sent a letter to Hawkins outlining this authority in detail. Click here to download a copy of the letter in PDF format.
Gov. Rick Perry praised the authorization. I appreciate the steps taken today by the lieutenant governor and the speaker to address some of the most critical health care needs in our state. Increased funding for nursing homes, personal needs, trauma care and state mental health hospital capacity will ensure that some of our most needy citizens receive essential care and services. I look forward to working with the legislative leadership to address other outstanding budget issues."
Kinky FriedmanWayne Slater reports in today’s Dallas Morning News that Kinky Friedman "has voted just once in the last 12 years, even skipping last year’s constitutional amendment election on a gay-marriage ban – after he was a declared candidate for governor." It makes one wonder as to whether Friedman is truly a serious candidate for governor or just engaged in a publicity stunt to promote his flagging musical career.