from the world's big
Is China subsidizing America's poorest consumers by undervaluing it's currency?
By keeping the renminbi's value low relative to the dollar isn't China just subsidizing American consumers especially poor people buying low-cost manufactured items such as those sold in Wal-Mart?
Everyone knows we are getting a wide variety and large volume of products from China. What are the Chinese getting in return? The answer is paper IOUs in the form of U.S. dollars. And what do the Chinese do with these dollars? Do they use them to buy tanks and attack helicopters? No, the answer is that they reinvest those dollars back into the U.S. economy and elsewhere through their sovereign wealth funds. They put the money into U.S. businesses which can then expand to generate more jobs for Americans.
Why then are the Chinese subsidizing American consumers and helping the U.S. by investing in U.S. businesses? Because of structural problems in making the transition from inefficient government businesses to private free-enterprise businesses, the unemployment rate in China is already more than nine percent. Because of the trauma and turmoil of their past Cultural Revolution, the Chinese people and government are afraid of social and political unrest. Since their labor market fluidity is not yet adequate to overcome their structural problems, they cannot maximize employment through fiscal and monetary instruments alone. Consequently, they are willing to subsidize American consumers in order to maintain maximum employment in their country. In addition, the structural problems they face have generated inflationary pressure, which is already too strong. They send the dollars back to the U.S. to avoid adding to this inflationary pressure.
We should not criticize the Chinese government for intervening in renminbi-dollar exchange markets to buy up U.S. dollars. They have bolstered the U.S. dollar at the expense of their own currency. However, this has become increasingly difficult. Continual internal budget deficits in the U.S. have contributed to the U.S. dollar falling in value in world currency markets. As their incomes rise, China’s own consumers gain greater market power. They are beginning to provide sufficient internal demand to help sustain employment and higher real wages in China. This virtuous circle should continue to strengthen China’s economy internally and reduce the need for China to artificially undervalue their renminbi.
China’s development has contrasted sharply with India’s. India’s democracy has moved more cautiously than China in pushing through improvements in roads, railroads, bridges, tunnels, ports and airports. China has outlined even bolder infrastructure enhancements for the future including nineteen new regional airports. This is particularly important for China since its trade is based more on physical commodities. India has the advantage of having chosen English as their main commercial language rather than one of their thirteen primary regional or tribal languages. Since many educated Indians speak English, they have had an advantage in the off-shoring of services such as telephone answering services from the U.S.
From their own history as well as world history, the Chinese communist party has learned the danger of a one-man-rule personality cult. After the horrors of their Cultural Revolution they changed their system to provide for the regular replacement of their leadership. As incomes, education and communications grow in China, we can hope for a peaceful, more democratic China in years ahead. China has suffered some growing pains in establishing health and safety standards for its products. The Chinese leadership is clearly very concerned about these problems and determined to enforce higher standards for both internal consumption and exports.
Andy Samberg and Cristin Milioti get stuck in an infinite wedding time loop.
- Two wedding guests discover they're trapped in an infinite time loop, waking up in Palm Springs over and over and over.
- As the reality of their situation sets in, Nyles and Sarah decide to enjoy the repetitive awakenings.
- The film is perfectly timed for a world sheltering at home during a pandemic.
Richard Feynman once asked a silly question. Two MIT students just answered it.
Here's a fun experiment to try. Go to your pantry and see if you have a box of spaghetti. If you do, take out a noodle. Grab both ends of it and bend it until it breaks in half. How many pieces did it break into? If you got two large pieces and at least one small piece you're not alone.
But science loves a good challenge<p>The mystery remained unsolved until 2005, when French scientists <a href="http://www.lmm.jussieu.fr/~audoly/" target="_blank">Basile Audoly</a> and <a href="http://www.lmm.jussieu.fr/~neukirch/" target="_blank">Sebastien Neukirch </a>won an <a href="https://www.improbable.com/ig/" target="_blank">Ig Nobel Prize</a>, an award given to scientists for real work which is of a less serious nature than the discoveries that win Nobel prizes, for finally determining why this happens. <a href="http://www.lmm.jussieu.fr/spaghetti/audoly_neukirch_fragmentation.pdf" target="_blank">Their paper describing the effect is wonderfully funny to read</a>, as it takes such a banal issue so seriously. </p><p>They demonstrated that when a rod is bent past a certain point, such as when spaghetti is snapped in half by bending it at the ends, a "snapback effect" is created. This causes energy to reverberate from the initial break to other parts of the rod, often leading to a second break elsewhere.</p><p>While this settled the issue of <em>why </em>spaghetti noodles break into three or more pieces, it didn't establish if they always had to break this way. The question of if the snapback could be regulated remained unsettled.</p>
Physicists, being themselves, immediately wanted to try and break pasta into two pieces using this info<p><a href="https://roheiss.wordpress.com/fun/" target="_blank">Ronald Heisser</a> and <a href="https://math.mit.edu/directory/profile.php?pid=1787" target="_blank">Vishal Patil</a>, two graduate students currently at Cornell and MIT respectively, read about Feynman's night of noodle snapping in class and were inspired to try and find what could be done to make sure the pasta always broke in two.</p><p><a href="http://news.mit.edu/2018/mit-mathematicians-solve-age-old-spaghetti-mystery-0813" target="_blank">By placing the noodles in a special machine</a> built for the task and recording the bending with a high-powered camera, the young scientists were able to observe in extreme detail exactly what each change in their snapping method did to the pasta. After breaking more than 500 noodles, they found the solution.</p>
The apparatus the MIT researchers built specifically for the task of snapping hundreds of spaghetti sticks.
(Courtesy of the researchers)
What possible application could this have?<p>The snapback effect is not limited to uncooked pasta noodles and can be applied to rods of all sorts. The discovery of how to cleanly break them in two could be applied to future engineering projects.</p><p>Likewise, knowing how things fragment and fail is always handy to know when you're trying to build things. Carbon Nanotubes, <a href="https://bigthink.com/ideafeed/carbon-nanotube-space-elevator" target="_self">super strong cylinders often hailed as the building material of the future</a>, are also rods which can be better understood thanks to this odd experiment.</p><p>Sometimes big discoveries can be inspired by silly questions. If it hadn't been for Richard Feynman bending noodles seventy years ago, we wouldn't know what we know now about how energy is dispersed through rods and how to control their fracturing. While not all silly questions will lead to such a significant discovery, they can all help us learn.</p>
What happens if we consider welfare programs as investments?
- A recently published study suggests that some welfare programs more than pay for themselves.
- It is one of the first major reviews of welfare programs to measure so many by a single metric.
- The findings will likely inform future welfare reform and encourage debate on how to grade success.
Welfare as an investment<p>The <a href="https://scholar.harvard.edu/files/hendren/files/welfare_vnber.pdf" target="_blank">study</a>, carried out by Nathaniel Hendren and Ben Sprung-Keyser of Harvard University, reviews 133 welfare programs through a single lens. The authors measured these programs' "Marginal Value of Public Funds" (MVPF), which is defined as the ratio of the recipients' willingness to pay for a program over its cost.</p><p>A program with an MVPF of one provides precisely as much in net benefits as it costs to deliver those benefits. For an illustration, imagine a program that hands someone a dollar. If getting that dollar doesn't alter their behavior, then the MVPF of that program is one. If it discourages them from working, then the program's cost goes up, as the program causes government tax revenues to fall in addition to costing money upfront. The MVPF goes below one in this case. <br> <br> Lastly, it is possible that getting the dollar causes the recipient to further their education and get a job that pays more taxes in the future, lowering the cost of the program in the long run and raising the MVPF. The value ratio can even hit infinity when a program fully "pays for itself."</p><p> While these are only a few examples, many others exist, and they do work to show you that a high MVPF means that a program "pays for itself," a value of one indicates a program "breaks even," and a value below one shows a program costs more money than the direct cost of the benefits would suggest.</p> After determining the programs' costs using existing literature and the willingness to pay through statistical analysis, 133 programs focusing on social insurance, education and job training, tax and cash transfers, and in-kind transfers were analyzed. The results show that some programs turn a "profit" for the government, mainly when they are focused on children:
This figure shows the MVPF for a variety of polices alongside the typical age of the beneficiaries. Clearly, programs targeted at children have a higher payoff.
Nathaniel Hendren and Ben Sprung-Keyser<p>Programs like child health services and K-12 education spending have infinite MVPF values. The authors argue this is because the programs allow children to live healthier, more productive lives and earn more money, which enables them to pay more taxes later. Programs like the preschool initiatives examined don't manage to do this as well and have a lower "profit" rate despite having decent MVPF ratios.</p><p>On the other hand, things like tuition deductions for older adults don't make back the money they cost. This is likely for several reasons, not the least of which is that there is less time for the benefactor to pay the government back in taxes. Disability insurance was likewise "unprofitable," as those collecting it have a reduced need to work and pay less back in taxes. </p>
What are the implications of all this?<div class="rm-shortcode" data-media_id="ceXv4XLv" data-player_id="FvQKszTI" data-rm-shortcode-id="3b407f5aa043eeb84f2b7ff82f97dc35"> <div id="botr_ceXv4XLv_FvQKszTI_div" class="jwplayer-media" data-jwplayer-video-src="https://content.jwplatform.com/players/ceXv4XLv-FvQKszTI.js"> <img src="https://cdn.jwplayer.com/thumbs/ceXv4XLv-1920.jpg" class="jwplayer-media-preview" /> </div> <script src="https://content.jwplatform.com/players/ceXv4XLv-FvQKszTI.js"></script> </div> <p>Firstly, it shows that direct investments in children in a variety of areas generate very high MVPFs. Likewise, the above chart shows that a large number of the programs considered pay for themselves, particularly ones that "invest in human capital" by promoting education, health, or similar things. While programs that focus on adults tend to have lower MVPF values, this isn't a hard and fast rule.</p><p>It also shows us that very many programs don't "pay for themselves" or even go below an MVPF of one. However, this study and its authors do not suggest that we abolish programs like disability payments just because they don't turn a profit.</p><p>Different motivations exist behind various programs, and just because something doesn't pay for itself isn't a definitive reason to abolish it. The returns on investment for a welfare program are diverse and often challenging to reckon in terms of money gained or lost. The point of this study was merely to provide a comprehensive review of a wide range of programs from a single perspective, one of dollars and cents. </p><p>The authors suggest that this study can be used as a starting point for further analysis of other programs not necessarily related to welfare. </p><p>It can be difficult to measure the success or failure of a government program with how many metrics you have to choose from and how many different stakeholders there are fighting for their metric to be used. This study provides us a comprehensive look through one possible lens at how some of our largest welfare programs are doing. </p><p>As America debates whether we should expand or contract our welfare state, the findings of this study offer an essential insight into how much we spend and how much we gain from these programs. </p>
Finding a balance between job satisfaction, money, and lifestyle is not easy.
- When most of your life is spent doing one thing, it matters if that thing is unfulfilling or if it makes you unhappy. According to research, most people are not thrilled with their jobs. However, there are ways to find purpose in your work and to reduce the negative impact that the daily grind has on your mental health.
- "The evidence is that about 70 percent of people are not engaged in what they do all day long, and about 18 percent of people are repulsed," London Business School professor Dan Cable says, calling the current state of work unhappiness an epidemic. In this video, he and other big thinkers consider what it means to find meaning in your work, discuss the parts of the brain that fuel creativity, and share strategies for reassessing your relationship to your job.
- Author James Citrin offers a career triangle model that sees work as a balance of three forces: job satisfaction, money, and lifestyle. While it is possible to have all three, Citrin says that they are not always possible at the same time, especially not early on in your career.