Bubblenomics
Dean Baker:
The collapse of the bubble in 2000-2002 gave the country what was at the time the longest period without job growth since the Great Depression. The economy only recovered from that slump as a result of the growth generated by the housing bubble.
Foreign Investment Ebbs in India
Foreign direct investment in India fell more than 31 percent, to $24 billion, in 2010 even as investors flocked to developing nations as a group.
And in the last two months, foreign investors took $1.4 billion out of the Indian stock market, helping drive the country’s Nifty 50 stock index down 17 percent from the record high it set in early November.
Libya's Legacy by Michael J. Totten
Why Budget Cuts Don't Bring Prosperity by Leonhardt
"It’s really quite striking how well the U.S. is performing relative to the U.K., which is tightening aggressively," says Ian Shepherdson, a Britain-based economist for the research firm High Frequency Economics, "and relative to Germany, which is tightening more modestly." Mr. Shepherdson adds that he generally opposes stimulus programs for a normal recession but that they are crucial after a crisis.
The trick is finding the political will to end the stimulus when the time comes. That is not easy, especially for Democrats, given that stimulus programs tend to include policies they favor. But the wave of recently elected Republicans, in Congress and the states, will no doubt be happy to help summon that political will.
For the sake of the economy, the best compromise in coming weeks would be one that trades short-term spending for medium- and long-term cuts. Beef up the cost-control measures in the health care overhaul and add new ones, like malpractice reform. Cut more wasteful military programs, like the F-35 jet engine. Force more social programs to prove they work -- and cut their funding in future years if they don’t.
By all means, though, don’t follow the path of the Germans and the British just because it feels morally satisfying.
Fighting Near Tripoli
TOBRUK, Libya -- Col. Muammar el-Qaddafi of Libya kept his grip on the capital on Wednesday, but large areas of the east of the country remained out of his control amid indications that the fighting had reached the northwest of the country around Tripoli.
Libyans fleeing across the country’s western border into Tunisia reported fighting over the past two nights in the town of Sabratha, home of an important Roman archeological site 50 miles west of Tripoli. Thousands of Libyan forces loyal to Colonel Qaddafi have deployed there, according to Reuters.
"The revolutionary committees are trying to kill everyone who is against Qaddafi," said a doctor from Sabratha who had just left the country, but who declined to give his name because he wanted to return.
There were also reports of fighting in Misurata, a provincial center 130 miles east of the capital. A witness said that messages being broadcast from the loudspeakers of local mosques were urging people to attack government opponents, following Colonel Qaddafi’s defiant television address Tuesday night calling for ordinary citizens to assist in eliminating opponents, promising that the "cockroaches" would be tracked and killed "house by house."
