Monday, December 22, 2008

Thomas Sowell on Postponing Reality for the Car Industry

Thomas Sowell has an excellent article about the future of the car industry. He starts by drawing a paralel to the demise of the horse industry a hundred years ago, when the automobile became the main mean of transportation. Yes, plenty of jobs were lost, people supplying oats, saddles, horse shoes and buggies, but it was not the end of the world. It's what Schumpeter called "creative destruction", replacing non-efficient business with newer, modernized ones.

Of course, the end of thousands of years of horse business is not what's happening now, because there's no replacement for cars on the horizon. People are going to need cars in increased numbers, and if they don't buy them from GM or Chrysler, they'll buy from Toyota or Honda. That's why Toyota is building factories like crazy, because eventually someone will have to step in and supply the missing cars. As for the millions of jobs that are going to fall like dominoes: Dealerships will sell Hondas as well as they sold Chevys. And Toyotas still run on the exact same number of tires as a Buick. So again, it won't be the end of the world.

Saturday, December 6, 2008

An Interesting Recession

There are a few things about the current recession that certainly haven't occured during the past ones.
Thanksgiving sales are up 3%, Thanksgiving weekend sales are up 19%, Cyber Monday is up, 15% housing affordability is at all time highs.
During the recession, the GDP grew at a healthy 2.8% in Q2!
And since NBER has a tendency to announce recession around the time they end, there's a big chance that the "official" recession will end within a couple of month.

Friday, December 5, 2008

Could fears of Obama-supported unions cause unemployment?

I was just wondering whether the threat of Obama empowering unions to force businesses to unionize could be a reason for the recent job losses and increase in unemployment numbers. If you werea business where there's a possibility of unionizing, wouldn't now be the time to fire those employees before it's too late?

Monday, December 1, 2008

Quote of the day: On war and peace

"In Italy, for 30 years under the Borgias, they had warfare, terror, murder, bloodshed - they produced Michelangelo, Leonardo da Vinci and the Renaissance. In Switzerland, they had brotherly love, 500 years of democracy and peace, and what did that produce? The cuckoo clock."
- Orson Welles as Harry Lime in Graham Greene's The Third Man

This is in relationship to the current left's obsession with peace, every anti-American on Earth wants peace, every liberal radical group has "peace" in its name, even the church of global warming is rewarded with a peace prize. Like Samuel Huntington said in The Clash of Civilisations, it's weird how, while Americans usually love competition between companies as the only way to progress, they seem so repulsed by the idea of competition between countries.