Cheung on sub-prime

From 互不相干二三事

• 再转谈另一项。美国次贷带来的金融风暴，尽管求教过朋友，不明白的地方仍多。例如输掉了那么多的钱，究竟到了哪里去？想来不是昔日荷兰的郁金香危机的扩大版本。想到另一个可能，不能肯定。希望读者有以教我。
• 美国的经济学者反对政府救市，我站在哪一边举棋不定！其中一个困难，使我在众议院通过之前出弹弓手。是这样的︰如果政府不救，因为美国工会多，最低工资高，有福利也有失业金，市场暴跌可能引发百分之二十以上的失业率。三十年代的大萧条，出现过近百分之三十的失业率。这数字作研究生时吵过好一阵。有说是真的，有说是夸张了。面对难关，我宁可信其有。我认为佛利民的《美国货币史》对大萧条的解释──货币量应加反减──只对一半。更重要的一半是当时的劳工市场不够自由，工资下调不容易。朱镕基在九十年代推出严厉的宏观调控，经济增长依旧，是历史上非常重要的一课。当时中国劳工市场的合约够自由肯定是重点。我是因为朱老的政策经验而对三十年代的大萧条有了新的体会。
• 如果目前的美国没有上述的劳工市场的诸多约束，选择「不救」应该是明智之举。市场的运作会调整得快，而十年前亚洲金融风暴的经验，是市场下跌得快时回升也快。短痛是胜于长痛的。问题是美国的劳工市场沙石太多，一下子导致无数企业关门，责任政府负担不起。这样看，出资救市是可以理解的选择，不幸地短痛会换来长痛。
• 除非我读到的资料有重要的失实之处，我认为目前金融市场的不幸处境，不是短期可以清理的。格林斯潘支持出资抢救，但最近他在一间大学讲话，说会复苏得快。比我乐观。我衷心希望他对，我错。
  

1) Where the money went - I thought the money was mostly spent, on Iraq, on Walmart, etc. e.g. a 40-something couple in bay area sold their house for 1M and bought another at 250k in Colorado to retire. They pocketed 750k in cash pay the capital gain (which goes to Iraq), save some and "spent" some. Whoever bought that house became the loser.

2) In my view, the government spending 700bn is ok, but it should spend on the source of the problem (and at the right price). i.e. to provide credit directly or to buy real estate, not on the derivatives.

3) Cheung's view on labor market is mainly related to how one deals with deflation. If he is right, then the impact on China is minimal -- because China was on the path of inflation (and general economic growth where salary should be adjusted up otherwise), and China's labor protection is actually a lot weaker than that in US. (yes, i repeat that it is true that China is more capitalistic than US even before the bail-out)

4) The problem in the US (and why Paulson was able to hijack the congress) is due to the short-term behaviors among the US politicians. i.e. they are only concerned about the blames in the short term and would rather follow the majority to vote for the bail-out (which is a less risky decision with regard to their political career) 

-- this has very profound implication on political thoery regarding modern liberal democracy and accountability of politicians. While ensuring democracy with change of terms we have traded off long-term accountability for our politicans, is there any 'patch' to fix for this?

p.s. IMHO the widely talked about failure of free-marketing and liberal democracy is widely exaggerated, and the logics are flawed.