unsettling economics

BusinessWeek published an intriguing article about Japanese automakers boosting domestic investment to expand production in Japan, even though the Japanese market is declining. The Japanese plants will have a competitive edge because they are more flexible and have fewer defects. German companies are also ramping up Japanese production, presumably for similar reasons.

What US companies are following a similar strategy rather than adopting a race-to-be-bottom approach?

Rowley, Ian. 2008. “Facing an Auto Slump, Japan Lifts Capacity: Carmakers Are Expanding at Home, Where Nimble, High-Tech Plants Offer More Flexibility.” Business Week (29 May): p. 64.

http://www.businessweek.com/print/magazine/content/08_23/b4087064205041.htm

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Yesterday, I had a very nice radio interview with Alan Ruff on WORT, a community radio station in Madison, Wisconsin.

http://www.archive.org/details/Interview-WORT-8June2008

I remember how John Poindexter wanted to use prediction markets to learn about terrorism. Maybe he was on to something. Some of the run-up in oil prices seems to relate to the dangers of a conflict in Iraq. Would believers in rational expectation accept that Bush may be readying an October Surprise?

I was just invited to deliver a paper in Mexico in a few days. I have to send it off even earlier, but what I have is a very rushed effort, thrown together in two mornings. Any quick pointers would be appreciated. Thanks in advance.

global

“Property rights attract private capital and, with government space programs stagnating, a lunar land rush may be just what we need to get things going again. I’ll take a nice parcel near one of the lunar poles, please, with a peak high enough to get year-round sunlight and some crater bottoms deep enough to hold ice.”

Reynolds, Glenn Harlan. 2008. “Who Owns the Moon? The Case for Lunar Property Rights.” Popular Mechanics (June).

http://www.popularmechanics.com/science/air_space/4264325.html?series=35

I am happy to announce that my new local assemblyman — the winner of the Republican primary is certain to win in November — made as his overriding issue the importance of protecting our borders. I assume that he will be overseeing the erection of a major wall surrounding his district, which encompasses parts of several counties. At last I am free from the threat of an invasion by a fleet of taco trucks.

“Tom McGee’s business is surging faster than the price of gasoline. That’s because PMP Corp. is one of the few places in the U.S. that gas stations can turn to when they need old-style gas pumps adapted to register prices over $4 a gallon. The mechanical dials on many vintage pumps can’t register prices over $3.99 a gallon or ring up single sales north of $99.99.”

“Many small-town stations, especially in remote, rural areas, can’t afford to buy new pumps, which can cost as much as $10,000 each. PMP’s retrofits are between $600 and $800.“

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Ronald Findlay and Kevin O’Rourke published a fascinating book, entitled Power and Plenty: Trade, War, and the World Economy in the Second Millennium, which comes out in support of the historical policies of mercantilism. To my knowledge, neither author has any hint of leftist sympathies. Have I missed something?

116: Jean-Claude Ellena perfumer for Hermes: “It’s very important to understand that the price of perfumes is not the price of their materials. You pay for the creativity …. That has value as well, a value that I put into the perfume. This Marxist idea that the price of a thing is the price of its materials is false.”

Burr, Chandler. 2008. The Perfect Scent: A Year Inside the Perfume Industry in Paris and New York (New York: Henry Holt).

Speculation cannot affect prices very much.

Fear about future troubles in oil producing countries add to the price of oil.

How can these two ideas be reconciled?