One headline reads:
Detroit Bailout is to Bring on U.S. Oversight
The other reads:
In Hard Times, Russia Moves to Reclaim Private Industries
The Russian automobile sector, however, appears to be booming and it is not mentioned as a candidate for nationalization.
By the way, here is Paul Krugman, apparently saying we need to accept the disappearance of the U.S. auto industry. I am happy to see this point but I am also a little confused and unfortunately the press report is incomplete; he cites economic geography so does he think the Toyota plant in Kentucky will have to shut down?
I thank Andres Sawicki for the pointer.
Krugman says he was misquoted
http://krugman.blogs.nytimes.com/2008/12/08/me-misreported/
“…they can’t keep on putting off the kinds of changes that they, frankly, should have made 20 or 30 years ago.†
But the U.S. government can?
> Does he also think the concentration of the financial industry around NY will disappear in light of the far greater, more expensive collapse there? (I’m guessing the answer is, “No”).
I don’t know what Krugman thinks but the financial sector will probably shrink in NY both in absolute and relative terms. It is very portable. London.
I cannot reconcile the facts that several weeks ago it was “the end of the world as we know it” if Congress did not immediately give (former Goldman CoB) Paulson $700 billion (on top of hundreds of billions to FNM/FRE, AIG, money market mutual funds, etc.) with no plan and virtually no oversight; while this week it is a major exercise in idiotocracy to lend three auto makers say $35 billion to re-tool and keep 3 million largely union, mainly Democrat voters employed.
“The Russian automobile sector, however, appears to be booming†¦†
That’s old news. New news is Russia’s long-term debt rating was lowered to BBB and some spot prices for Urals Crude were below $35 today.
Loved this part in cited document: “Information in the report has been sourced from: Authentic and reliable sources like books, newspapers, [...] government agencies…”
Why do I have ever growing feeling recently that all of economics is based on “authentic and reliable” sources…?
Russian auto sector booming??? HAHAHAHAHAHA
Market share of Russian producers (in value terms) has fallen from 60% to 10% from 2000 to 2008. The market cap of the major producer has fallen 90% in 6 months, and the potential to develop new models without very significant government financial assistance is close to zero.
In his Nobel lecture the only concrete thing Krugman said was that wages and medical care expenses are higher in Detroit than in the Deep South for autoworkeres, which is why the transplants are opening in the Deep South. Duh.
On the basis of the rest of his lecture it would appear that the explanation would somehow involve some decreasing of increasing returns to scale in the auto industry, or of its agglomerative economies, which he claims to be able to explain. However, when it comes to the auto industry in Detroit, no explanation involving any of that, nada. Pretty pathetic on top of his continuing to ignore those who invented the theories for which he was awarded the prize.
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