Evergrande points up a long-standing risk (see my April 2021 post)

By Roger Scher

From April 2021: “More Cool Charts”:

China suffers from a debt overhang. As the country has powered ahead as an exporting and innovation juggernaut, it has also experienced excessive credit growth resulting in bad debts.

Credit is “Total Social Financing” (TSF), including bank loans (>60% of total), shadow banking, corporate bonds & equities, govt bonds, etc., a metric the Chinese authorities track. IMF forecasts. Sources: IMF Article IV reports & WEO, Scher GE presentation 2015, Haver

The chart above shows that when credit (the green line)…

Bullets upfront and condensed

By Roger Scher

When I re-read my post this morning, I thought I may lose readers with the intro on the irony of China applying to join a U.S. trade deal. I like that section, but thought that you the readers might lose interest. However, the “US Action Plan on Trade” is important, so find it below, condensed (a little).

The U.S. should:

  • Deploy muscular multilateralism like Obama did, in place of the aggressive bilateralism of Trump. Obama initiated 25 complaints with the WTO’s Dispute Settlement Mechanism (DSM), more than any other country during his administration, 16 of which…

Economist Nouriel Roubini forecasts a global depression — it’s not inevitable…


The quote above is attributed to U.S. President Truman. No one can accuse Nouriel Roubini, once called Dr. Doom for predicting financial crises, of equivocating. One is also reminded of that quip about the economist famous for forecasting 5 of the last 3 recessions…

Now I’m not usually the optimist in the room, but with Dr. Roubini, I just may be…

In a piece released last week, Roubini did a nice job highlighting the risks to the global economy today, but the gloom and doom was overplayed. …

100 in 100: How majoritarian vs. proportional democracies tackle polarization…

By Roger Scher

Plurality/Majority (Majoritarian) vs. Proportional Representation, or Mixed electoral systems. Source: International Institute for Democracy and Electoral Assistance, IDEA, Stockholm, Sweden; 2015. https://www.idea.int/news-media/media/electoral-systems-national-legislation. Note: below there is a map that only includes countries considered “free” by Freedom House, while the map above includes countries that are considered “not free”, like Russia, or “partly free”, like Nigeria, because they have elections. China and Saudi Arabia, by contrast are considered as “having no elections” in the map above.

Beginning in the 20th century, the consensus view has been that majoritarian democracies are more stable and moderate than proportional representation democracies.

Majoritarian democracies can be broadly defined as having elections that require candidates to win a plurality or majority of votes in an election district to capture the seat. Proportional representation is found in democracies where seats in the legislature are acquired according to a party’s proportion of votes nationwide, whether they win in a district or not.

The view that majoritarianism reduces polarization had emerged…

By Roger Scher

Source: images.search.yahoo.com drawn from www.catholiclane.com

Over the last three decades, Center-Right and Center-Left reformers around the world have identified the key elements of country success.

Four principles of economic policy emerge from a study of this reform record.

In an effort to derive lessons for the U.S. today, this article considers programs implemented since the 1990s by governments we could call centrist.

This article will assess the record of governments led by these Center Left leaders:

  • German Social Democrat Gerhard Schröder,
  • U.K. Labour leader Tony Blair,
  • and, U.S. Democrats Bill Clinton and Barack Obama;

And, by these Center Right leaders:

  • Spain’s former…

..the world got busy on trade…

By Roger Scher

World’s largest traders: EU, U.S., China, Japan…

The U.S. is excluded from Asia’s major trade deals

Large trade deals in Asia involving a number of countries — including CPTPP and RCEP — as well as the important EU-Japan free trade accord exclude the U.S. Japan is party to all three of these agreements. A wise move. These deals lower barriers to trade and increase prosperity for the countries involved.

China, whose economy dwarfs Japan’s, leads one of the mega-regional trade groups (RCEP); and — breaking news — as of last week, China officially applied to join the other one (CPTPP). These two groups together would represent about…

The WTO, for starters…

Source: MBN from Wikipedia

Save the WTO. It’s not too late. But one day it could be. This global trade body is not functioning today.

I teach Master’s students about the WTO and the gains from trade. I’m doing so this Fall, so I thought I would write you good people a note on the subject. It’s important. What follows is a backgrounder on the institution. Be patient. Not everyone knows the deets about this linchpin institution. In a second post to come later, I will bullet out what I believe is wrong with the WTO and how to fix it.


As you can…

Part 2: text of the article…

Read Bernie’s article (below), then read my critique here.

From Foreign Affairs, June 2021:

Washington’s Dangerous New Consensus on China

Don’t Start Another Cold War

By Bernie Sanders

June 17, 2021

The unprecedented global challenges that the United States faces today — climate change, pandemics, nuclear proliferation, massive economic inequality, terrorism, corruption, authoritarianism — are shared global challenges. They cannot be solved by any one country acting alone. They require increased international cooperation — including with China, the most populous country on earth.

It is distressing and dangerous, therefore, that a fast-growing consensus is…

…on China…

By Roger Scher

Source: Youtube here.

I have disagreed with Bernie Sanders frequently in this blog and have taken particular exception to his being appointed Chair of the Senate Budget Committee, given his free-spending ways. That said, he penned a Foreign Affairs article on China in June, the thrust of which I agree with: that the rush to demonize China must be resisted.

Demonization of an adversary is a genie that is hard to put back in the bottle. It seeps into the lifeblood of the nation, making it difficult to reverse and often leading to a march to war. Whether demonization occurred…

The Way Forward: Pelosi and Gottheimer

By Roger Scher

From VOA, Dec. 19, 2019.

Here is a quote from Rep. Alexandria Ocasio-Cortez from The Hill, Aug. 23, 2021. It is regarding the stand taken by nine centrist Democrats, led by Rep. Josh Gottheimer, calling for a vote on the $1.2 trillion bipartisan infrastructure bill that was agreed in the Senate, before considering the $3.5 trillion American Jobs / Families bill:

The idea of just kind of throwing a bomb at the 11th hour, it just doesn’t seem responsible to the people of this country who expect a legislature that works for them,” said Rep. Alexandria…

Roger Scher

Roger teaches political economy at NYU, is the former Head of Country Risk at GE, & co-author of Ten Point Plan for the U.S. (https://countrysuccess.net/)

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