Monday, August 24, 2009

Ledes That Make You Stop Reading

. Monday, August 24, 2009

From the NY Times:

In past global slowdowns, the United States invariably led the way out, followed by Europe and the rest of the world. But for the first time, the catalyst is coming from China and the rest of Asia, where resurgent economies are helping the still-shaky West recover from the deepest recession since World War II.

Ummm... no. Export-biased economies cannot lead the world out of recessions, because they need markets for their exports. As Kindleberger observed, the economies that lead the world out of recessions are the ones that provide markets for distressed goods.

After that opening I couldn't bring myself to read the rest of the article, so I have no idea if it gets any better. But I doubt it.

UPDATE: Curiosity got the better of me, and I went back and read more. Eventually, the author gets around to interviewing someone who knows what he's talking about, and Kenneth Rogoff says this:

“The big question is what happens next,” said Kenneth S. Rogoff, a professor of economics at Harvard. “If the consumer in the United States and Europe doesn’t come back, I’m not sure Asia has a Plan B.”

Right. Recovery is demand-driven, not supply-driven. Asia can't sustain its own recovery without external demand, much less pull up the rest of the globe. The rest of the article is babble.


Ledes That Make You Stop Reading




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