Rounding up econ blues

Baking sweet potatoes the traditional way.

President Ma's New Years Address laid it out (President's site). The Bloomberg Businessweek report I felt overfocused on the China stuff. The real meet was the call for joining trade blocs. The President called for trade liberalization, as always, pimped his programs, and pillaged the DPP's longtime push for a drive south into ASEAN, but still said moving toward China can save the economy. We're long past that point... As The Guardian observed in an article this week that got forwarded by everyone I know, China is experiencing the same mess Taiwan is, declining manufacturing with rising housing prices.

A housing bubble is the way the financial industry skims off the wealth from the middle class and transfers it to the small circle of the already wealthy. In Taiwan this reservoir of wealth saved by the middle classes during the Miracle Economy is still vast, it is cushioning the young as they move into an economy where wages haven't moved since 1999 and where good jobs are scarce and long, brutal, unpaid hours are the norm. I got in a taxi this morning and saw that the fee had hiked $15 NT. The driver said that was the first hike they'd had in 14 years..... in China the Bubble is driven by many of the same factors driving the Bubble in Taiwan -- (1) the economy will take a massive hit if the government moves to prick the Bubble ( I predict that the Bubble will persist for several more years and that if the DPP is elected it will do nothing about the Bubble); (2) the housing industry/construction is an important conduit/recipient of government funds and helps form links that support local and central government parties and politicians; (3) Chinese want a "root", a house of their own; (4) in Taiwan the tax situation has turned real estate into a tax shelter (is it the same for China?)...

Meanwhile Taiwan is taking a beating from two directions (FocusTaiwan). The falling yen has made Japanese exports more competitive with Taiwanese exports...

In 2013, the yen fell about 21.5 percent against the U.S. dollar, while the Taiwan dollar only depreciated 2.7 percent against the greenback.

 while South Korean has aggressively moved to ink trade agreements with markets that Taiwan exports to. This represents a shift in S Korea's strategy, according to the article. Originally S Korea attempted to drive the won down and compete on price, but now the Korean government has shifted to pushing for lower tariff barriers.

Gonna be a tough 2014. Be well, my readers.
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