#5 What’s wrong with America’s economy? (April 30th, 2011)

#5　What’s wrong with America’s economy? (April 30th, 2011 Full edition)

May 7, 2011 (SUN) 10:00~13:00

At YOTSUYA RENOIR

ONO, YAMAGATA, OGAWA, YAMAMOTO

Articles we discussed:

[US] Life in the slow lane

[US] Still full of ideas, but not making jobs

[Business] Areva: Gauging the pressure

[Finance & Economics] Botox and bean counting

[International] Dead man’s talking

   This week we discussed about (1) Two problems of the US (2) French nuclear power plant company, Areva (3) America’s cosmetically enhanced official statistics (4) WTO and Doha round. All of us prepared summaries this week for the first time. A guest, who Yamagata invited, came to join. His name is Yamamoto and he is working for Minister of Defense. We want to make this study group expand gradually.

   Two articles from US that Ogawa picked up are about concern of that country. The areas of concern are 

transport infrastructure and innovation. In the first article “Life in the slow lane”, they show us a puzzling situation of transportation in America. Not only well-known poor railways but also highways and airways are concern. We shared the experiences related with the issue and discussed the best way that has to be done. They suggested several ways to solve the issue so we checked the possibility of each way. Second article ”Still full of ideas, but not making jobs” shows a dilemma that the innovation essentially has. They brought up a passage of Obama’s speech and explain why his speech is flawed and the fact rising innovation spending would not produce many jobs. We discussed how to overcome the dilemma. This topic is interesting because we approached to the essence of innovation.

   Next Areva’s article is an interesting report that shows a situation that a nuclear power plant industry is confronting after Fukushima. Areva’s third generation reactor, EPR is costly but safer than generation 2 reactors. In the short term, this is good for Areva, but in the long run, the situation is challenging because many developed countries halted their construction. We focused on competitiveness of both French and Japanese companies.

   Third article is about America’s official statistics. Why this topic is interesting is that the article insists that official statistics in the US cosmetically enhance America’s economic appearance. They picked up (1) public sector debt, (2) budget deficit, (3) relative performance on productivity growth, (4) the way GDP quarterly are published and (5) method of measurement of GDP growth compared with EU’s case and how the US exaggerated their numbers. They also show a relief fact that history shows America’s measure is a front-runner. Ono explained us about “hedonic pricing” from his experience.

   Last article we discussed was “The Doha Round: Dead Man Talking” from international which Yamagata picked up. This title comes from a film “Dead Man Walking” by Tim Robbins about a prisoner to death (1995). The title implies Doha Round is also like a talk of a dead man. Doha Round began in 2001. They insist 10 years of trade talks don’t have reached to meaningful agreement but have sharpened divisions. What we discussed about the article was (1) a meaning of Doha Round (2) how to reach the next step such as NTB (Non Tariff Barrier) agreement. Yamagata commented that it might be difficult to make full agreement in a world level and that we already reached certain level of agreement in Uruguay Round already. Lastly he mentioned WTO’s future and the possibility of extinction of the organization.

   The place we gathered this week was Yotsuya. Every week Ono came first on time but Ogawa was a little late and Yamagata came lately. I thought this difference comes from busyness of each job. Yamagata works hard till late night every weekday so for him, weekend is the time to sleep. Nevertheless, he comes every weekend. He is so enthusiastic. Yamamoto joined for the first time. He will get used to the study group and will take an active part soon.