#2-2 Time for a double dip? [Aug 6th 2011]

#2-2 Time for a double dip? [Aug 6th 2011]

14th August 2011 10:00-12:00  Shinjuku Ranbure

Ono, Fujisaki, Shimada, Ogawa

Articles we discussed:

[Leaders] Time for double dip?

[United States] The debt-ceiling deal

[Europe] Hot, hot August

[Business] Robots don’t complain

   This week another new member came to join for the first time. Fujisaki reads The Economist from her  college time, long before this study group started. She took a class in which members discussed economic issues on articles of the magazine. She seemed to get used to reading it and made so much contribution to our discussion. We hope that she will join us continually when she backs to Tokyo from Hiroshima.

    We discussed roughly on 3 topics of 4 articles from both macroeconomic and microeconomic points of view. Ono and Fujisaki picked up articles about America’s economic and political sufferings that are cleared after debt ceiling deal. “Time for double dip” from Leader focuses on uncertain economic restoration of US economy. Ono showed us several important discussion topics on this issue: “false dawns” of US economy, a possibility of QE3 during a zero interest policy continuing, a necessity of adjustments of the national balance sheet and so on. The article criticizes a large slug of austerity and poisonous politics of the past few weeks and concludes avoiding recession depends on accurate political leadership.

    Second article “No thanks to anyone” focuses the political dysfunction that is threatening its chances of economic recovery. Fujisaki picked up the article because it presents us America’s structural political defects clearly. She explained to us about “polarization” of American politics. She also mentioned characteristics and historical transition of American politics. Why a third party couldn’t gain power in America and how the size of constituency influences outcomes of elections was interest topics of our discussion.

    Ogawa picked up third article “Hot, hot August” from Europe. In August, something important has happen in our history. Wars have odd tendency to break out in this month. Signs of economic crises we could find in August. The meaning of “Hot, hot…” on the title comes from this awareness of August. The article is about the crisis of EU and euro leaders’ attitudes to fight against it. Our discussion focused on “a momentous decision” that euro zone leaders could face very soon; should they allow countries to default and break the currency or should they try to save the euro by creating unpopular fiscal union with jointly backed Euro bonds. Ogawa said that Euro, the integrated currency of Europe, is their dream so they would never throw it away. Fujisaki mentioned from history that they would not make such a decision and might reach a vague conclusion because they always did in such a way.

    Lastly, we discussed on “Robots don’t complain” which reports FOXCONN’s latest decision of mechanization in their plant. Shimada explained why this decision is worth watching. It is because this company has their assembly plants located in China and their advantage is that they can use cheap labor forces there. We discussed several case of mechanization for a while. Ono presented automation of cars. Cars can be driven automatically by using latest technology but carmakers don’t step in because of the issue of responsibility if an accident happens while automatic drive.

    We gathered a nostalgic café in Shinjuku. It was hot, hot August day and was Fujisaki’s birthday. She left to have lunch with her family earlier so we couldn’t do anything for her. Ono and Shimada and Ogawa went to Lumine to have a lunch and talked mainly about our common friends.