The Misguided Financial Transactions Tax: Future of Banking #2

Thorstein Beck has edited an e-book for Vox on "The Future of Banking." It consists of 12 short and highly readable essays by expert economists, based on their academic research. The book is packed full of interesting and relevant analysis. This is the first of three posts on a few of the ideas that jumped out at me. The topics of the three posts are:

1) The dangers of persistently low interest rates
2) The misguidedness of a financial transactions tax
3) The rise of global banks in emerging markets

Proposals for a financial transactions tax are a hardy perennial topic. The European Commission proposed one in late September. Even the Vatican has gotten into the act by publicly supporting such a tax, a proposal I reviewed and critiqued in an October 28 post, "Financial Transactions Tax: The Vatican vs. the IMF." In this book, Thorsten Beck and Harry Huizinga offer an overview of why such proposals are misguided policy in "Taxing banks – here we go again!"

There are two main arguments for a financial transactions tax: 1) by discouraging high-frequency financial transactions, it will encourage financial stability; 2) it could raise a lot of money at a time when government budgets are stressed.

The first argument is probably incorrect. As Beck and Huizinga explain:

"As pointed out by many economists, transaction taxes are too crude an instrument to prevent market-distorting speculation. On the contrary, by reducing trading volume they can distort pricing since individual transactions will cause greater price swings and fluctuations. But above all, not every transaction is a market-distorting speculation. Speculation is not easy to identify. For example, which is the market-distorting bet – one against or for a Greek government bankruptcy? Did the losses of the banks in the US subprime sector occur due to speculation or just bad investment decisions? What is the threshold of trading volume or frequency beyond which it is speculators and not participants with legitimate needs that drive the market price for corn, euros, or Greek government bonds? Most importantly, however, FTTs are not the right instrument to reduce risk taking and fragility in the financial sector, as all transactions are taxed at the same rate, independent of their risk profile."

There is good reason to be concerned that excessive leverage can help lead to asset price bubbles and economic instability. But it is not at all clear that the raw number of financial transactions creates financial instability; indeed, it is possible that discouraging financial transactions could lead to greater instability. In this sense, a financial transactions tax is misguided.

If the goal is to raise more revenue from the financial sector, there are other ways to do it. In the European context, Beck and Huizinga point out that one simple approach would be to apply value-added taxes to financial services. They write: 

"An obvious step towards bringing about appropriate taxation of the financial sector is eliminating the current VAT [value-added tax] exemption of most financial services. The current undertaxation of the financial sector resulting from the VAT exemption is mentioned by the European Commission as a main reason to introduce additional taxation of the financial sector. However, if the problem is the current VAT exemption, isn’t the right solution to eliminate it?"

Another option for taxing the banking sector is to impose a tax on banks that have high levels of leverage. In a way, this is similar to policies where banks with low levels of capital need to pay higher premiums for their government deposit insurance--that is, it's an attempt to make banks face the possible social costs of their risky behavior. Beck and Huizinga refer to this policy as one of "bank levies":

"Bank levies are taxes on a bank’s liabilities that generally exclude deposits that are covered by deposit insurance schemes. Bank levies appropriately follow the ‘polluter-pays’ principle, as they target the banks – and their high leverage – that are heavily implicated in the recent financial crisis. Bank levies have significant potential to raise revenue and they directly discourage bank leverage, thereby reducing the chance of future bank instability. In sophisticated versions of bank levies, they are targeted at risky bank finance such as short-term wholesale finance, and they may be higher for banks with high leverage, or for banks that are systemically important."

In short, proposals for a financial transactions tax are an old nostrum. Whether the goal is enhancing financial stability or raising revenue, or both, better options are available. 

Dangers of Low Interest Rates: The Future of Banking #1

Thorstein Beck has edited an e-book for Vox on "The Future of Banking." It consists of 12 short and highly readable essays by expert economists, based on their academic research. The book is packed full of interesting and relevant analysis. This is the first of three posts on a few of the ideas that jumped out at me. The topics of the three posts are:

1) The dangers of persistently low interest rates
2) The misguidedness of a financial transactions tax
3) The rise of global banks in emerging markets 


The Federal Reserve and central banks all around the world dropped interest rates to rock-bottom levels. This step made good sense in the depths of the financial crisis from 2007 into 2009. But now it's late 2011, and the policy of super-low interest rates continues on with no end in sight. Such a policy isn't risk free.


One issue is raised by Steven Ongena and José-Luis Peydró in their essay: "Loose monetary policy and excessive credit and liquidity risk-taking by banks." 

"Recent theoretical work has modelled how changes in short-term interest rates may affect credit and liquidity risk-taking by financial intermediaries. Banks may take more risk in their lending when monetary policy is expansive and, especially when afflicted by agency problems, banks’ risk-taking can turn excessive. ...

 Our results in Jiménez et al (2011) suggest that, fully accounting for the credit-demand, firm, and bank balance-sheet channels, monetary policy affects the composition of credit supply. A lower monetary-policy rate spurs bank risk-taking. Suggestive of excessive risk-taking are their findings that risk-taking occurs especially at banks with less capital at stake, ie, those afflicted by agency problems, and that credit risk-taking is combined with vigorous liquidity risk-taking (increase in long-term lending to high credit risk borrowers) even when controlling for a long-term interest rate."

A similar point is made by the IMF in its Global Financial Stability report last June. 

Low interest rates in advanced economies are promoting pockets of re-leveraging by lowering the “all-in” cost of debt capital for corporate borrowers. This is encouraging investors to use financial leverage to generate sufficiently attractive returns on equity. Although credit spreads are still higher than before the crisis, ultra-low short-term interest rates mean that the cost of debt is now lower, both for floating-rate and fixed-rate debt. This lower cost of borrowing renders debt servicing ratios more favorable, even at higher debt loads, thereby enabling companies to operate with more financial leverage ...

As leveraged loan prices recover (after the deep discounts of 2008–2009) and yields fall, investors are increasingly turning to financial engineering to achieve double-digit returns. Both new and refinanced private equity transactions suggest that related corporate balance sheets are quickly approaching pre-crisis leverage multiples. Though the aggregate amount of financial leverage provided remains far less than before the crisis, high-yield corporate bond and leveraged loan investors have recently been borrowing at higher earnings multiples, not much below 2007 levels.

Notwithstanding recent market jitters, the “search for yield” is also spurring flows into emerging markets, notably corporate debt markets. These inflows, although volatile, are often magnifying already ample domestic liquidity. These conditions, if they continue, risk stretching valuations and raising worries that some countries could be re-leveraging too quickly. Flows into mutual funds for emerging market debt have been strong (behind only high-yield and commodities funds as a percent of total outstanding amounts). Even record amounts of EM corporate bond issuance cannot keep up with demand, and investor due diligence is waning.

Much of the discussion about the ultra-low interest rates seems to be based on an assumption that the only danger is a re-emergence of inflation, and as long as inflation is comfortably around the corner, then the low interest rate policy can persist indefinitely. But if the low-interest rate policy is promoting excessive leverage, tricky financial engineering, and a waning of due diligence in other assets, this set of risks also needs to be taken into account.

I would also add that when central banks use a combination of low interest rates and the "quantitative easing" policies where they purchase large quantities of government and private-sector debt, the central bank is setting up a situation where if or when interest rates rise, the central bank will face enormous losses on the low-interest rate financial assets they are now holding. 

U.S. Postal Service on the Rack

The U.S. Postal Service announced yesterday that it will ask the Postal Regulatory Commission for permission to alter its service standards, so that instead of seeking to deliver first-class mail in one day, it would do so in 2-3 days. The USPS press statement is here.  The slower service standard would then allow less work over weekends, as well as be part of consolidating the network of mail processing facilities. In a post on September 1, 2011, post, "The U.S. Postal Service Hits Crunch Time," I reviewed these steps and a number of the possible cost-cutting options for the USPS. That post started with the figure that to me encapsulates the basic problem faced by the USPS, taken from a white paper from the Office of the Inspector General: the collapse of mail volume since about 2006.

 Nothing can be off the table for the USPS. Loosening the service standard to 2-3 days and consolidating mail processing facilities might save about $3 billion, which is a start. It would also be a change that isn't visible to most customers. But it doesn't come close to closing the fiscal gap. Going to five-day-per-week delivery of mail would save another $3 billion or so. Finding a way to reduce the USPS costs for health and pension benefits of retirees is another part of the puzzle. 

The postal service will also need to raise its prices, and to branch out into other lines of business. Consider some international comparisons from an October 6 white paper, "Postal Service Revenue: Structure, Facts, and Future Possibilities."

The price of a first-class stamp in the U.S. is vastly lower than postage within other countries. This bar graph is in euros. But the price of a first-class stamp in the cheapest country on the table--the island of Malta--would be about 50 cents U.S., which is more than a 44-cent standard stamp. The 44-cent U.S. stamp is about one-third of the average price charged for postage in Europe. 

 

In addition, the postal services of most other countries are not only deregulated, and facing competition, but a large proportion of their revenue comes from their non-mail businesses. Here's a comparison across some main postal service companies around the world: for example, the USPS gets 13% of its revenue from non-mail services, while Canada's postal service gets 58% of its revenue from nonmail services and Deutsche Post gets 87% of its revenue from nonmail services.

The white paper writes: "It is important to note the dramatic difference in the proportion of revenue collected from non-mail products between the U.S. Postal Service and major foreign posts. The gap is large and has been growing. The collective non-mail revenue at foreign posts grew from 49 percent in 2003 to 63 percent in 2008. In fact, non-mail revenue accounted for revenue growth of more than 100 percent at foreign posts between 2003 and 2008. Notably, logistics, retail, and banking services provided substantial non-mail revenue diversification opportunities."

The web is in the process of killing the U.S. Postal Service as we have known it. The only question now is how to shape what will emerge in its place.

The Case for Active Labor Market Policies

Government policies toward unemployment fall into two categories: passive and active. Passive policies are those like unemployment benefits or early retirement. They tide over the affected workers until the next job, or until retirement, but accomplish little else. Active policies are those like government support for job training, job search, incentives for private firms to hire, or even direct job creation. The U.S. spends less of either kinds of labor market policy than most developed economies. Here, I'll draw on a recent essay by Jun Nie and Ethan Struby from the Kansas City Fed: "Would Active Labor Market Policies Help Combat High U.S. Unemployment?"

Let's set the stage with some basic facts about much developed economies typically spend on active and passive labor market policies. Here's a bar graph from Nie and Struby showing the average levels over the 1998-2008 period for both categories of labor market spending for 21 countries.

The United States spends less on labor market policies overall than most developed economies, and of what it spends, a smaller proportion goes to active labor market policies. Nie and Struby describe the patterns this way: "The level of spending on labor market policies differs widely across OECD countries. Between 1998 and 2008 in 21 OECD countries, total expenditures on passive and active labor market policies as a fraction of GDP ranged from about 4 percent in Denmark to 0.25 percent in the United Kingdom (Chart 3). The United States is near the bottom of this list, spending slightly less than 0.5 percent of GDP on labor market policies during this time. In addition, the fraction of spending on active versus passive policies differs across countries. Outside the United States, the average country in Chart 3 devoted 59 percent of labor market policy expenditures to PLMP [passive labor market policies] and 41 percent to ALMP [active labor market policies]. In the United States, however, 70 percent of expenditures went to PLMP and 30 percent went to ALMP."

Nie and Struby offer an alternative metric: Instead of looking at spending as a share of GDP, look at expenditures per unemployed worker. Moreover, measure those expenditures as a percentage of per capita GDP. By this measure, U.S. spending on passive labor market policies is half as large as the average for other developed economies, while U.S. spending on active labor market parties is a bit more than a quarter of the average for other developed economies. They write:

"Another common method to measure spending on labor market policies is to consider expenditures per unemployed worker as a percentage of GDP per capita. This measure adjusts for differences across countries in unemployment rates and the size of the economy. Between 1998 and 2008, average expenditures on PLMP in the United States on each unemployed worker were about 12 percent of GDP per capita, while the average level for the 20 other OECD countries in Chart 3 was about 25 percent of GDP per capita. The U.S. expenditures on ALMP were even less: Over the same period, expenditures on ALMP per unemployed worker in the United States were about 5 percent of GDP per capita, while the average spending per unemployed worker for the 20 other OECD countries was approximately 19 percent of GDP per capita."

How well do active labor market policies work? Nie and Struby offer a reasonable first take on this question, but it should be noted that here we are departing the world of basic facts about categories of spending levels, and entering the world of estimation. Details of the their calculations are in the article. Here, I'll just say that they look at the spending by these 21 countries with active and passive labor policies over the 1998-2008 period, and they break down these policies into various subcategories. They look at how unemployment rates fluctuate in those countries. They also adjust for a bunch of other variables: the labor force participation rate, union density, laws about employment protection, tax rates, whether the economy is in recession, level and duration of unemployment benefits, and "fixed effects" that are supposed to account for country-specific factors like cultural, geographical. and political differences.

Again, this is all a reasonable starting point, but as the authors are careful to note, the the "results should be read cautiously." This calculation has lots of correlations, but causation is less clear. Extrapolating from average experience in some countries at one time to a particular country at another time is always somewhat questionable.

With warning flags duly posted, the results of their calculations are intriguing. They find that among the active labor market policies, expansions in job training opportunities and assistance with job search are the least expensive ways to encourage more employment, and that these methods pass a rudimentary cost-benefit test. They also find that employment incentives and direct government support for employment are much costlier and under at least some sets of plausible assumptions, don't pass a cost-benefit test.

To me, this all adds up to a tentative but plausible case for more government spending on job training programs and on support for job search. The U.S. traditionally hasn't done much for its unemployed--neither passive nor active support--as compared with other countries. But with U.S. unemployment high, in an economy where lifelong learning and movement between economic opportunities is ever more important, these seem like potentially useful steps.A focused program of widespread state-level and local-level experimentation with these policies, together with studying the experience of other countries, could lead to policies that are useful for U.S. labor markets both in the next few years and in the long-run.

Finally, although the authors don't make this point, the two active labor market policies that they find useful--assistance for job training and for job search--both focus directly on the unemployed. The two programs they don't find useful--employment incentives and government support for employment--both focus on the potential employers, and seem much more susceptible to gaming the system, and to politicized and pork-barrel spending.

U.S. Is Already a Net Exporter of Oil

Added 12/16
A reader emails this only slightly snarky and completely accurate note pointing out that this post is mistitled:

"Read you article in the Conversable Economist, December 2, 2011 titled "US is Already a Net Importerr of Oil". Great if it were true, but you have the facts all wrong. Before you write any more articles on the subject of oil, please learn the difference between oil and petroleum products."

Original post follows.
 ___________________________
 
"U.S. exports of gasoline, diesel and other oil-based fuels are soaring, putting the nation on track to be a net exporter of petroleum products in 2011 for the first time in 62 years." This according to Liam Pleven and Russell Gold in a November 30 Wall Street Journal story: "U.S. Nears Milestone: Net Fuel Exporter."A graph of U.S. oil imports and exports in the last 10 years tells the story. 

To be sure, part of the reason for this change is that demand for energy in the U.S. is down in the sluggish aftermath of the Great Recession, while demand for energy in other parts of the world is rising. For example, the U.S. is now a net exporter of oil to Brazil, Mexico, Argentina. While exports and imports will bounce around in the short-run, over the longer run it appears that the U.S. is on track to become an energy exporter of oil, coal, and even natural gas (as technology improves for shipping liquified natural gas.


At no time in my life has the U.S. been a net exporter of petroleum products, and my mind is still trying to accept that this shift is real. I'd posted back on October 7 about America as Conventional Energy Powerhouse?!? Amy Myers Jaffe, an energy expert who runs the Baker Institute Energy Forum at Rice University, wrote: "By the 2020s, the capital of energy will likely have shifted back to the Western Hemisphere, where it was prior to the ascendancy of Middle Eastern megasuppliers such as Saudi Arabia and Kuwait in the 1960s." 

But it seems to me that the sensible policy response to America's new role as an energy exporter is what I've called The Drill-Baby Carbon Tax: A Grand Compromise on Energy Policy (October 24, 2011). As I summarized the proposal: "As the name suggests, it has two parts. On one side, there would be a national commitment to move ahead with all deliberate speed in developing the vast U.S. fossil fuel energy resources that are now technologically available. On the other side, the United States would enact a appropriate carbon tax to offset concerns over the risks of climate change. The Drill Baby Carbon Tax basically takes the view that while the United States is working on phasing down fossil fuels and moving to alternative energy resource, let's produce a greater share of the fossil fuels that we consume here at home."

Women in Power: Corporate Boards and Legislatures

I've posted in the last couple of months about Worldwide Gender Equality in Education and Health (October 17, 2011) and about The Diminishing Gender Wage Gap in the U.S.  (November 4, 2011).
But in high profile positions like positions on corporate boards and positions in legislatures, a large gender gap remains around the world.


For corporate boards, this figure from Catalyst tells the basic story. Norway is at the top of the list in part because it imposed a legal quota that women must be 40% of the boards of all state-owned and quoted companies.

In the November 26 issue of the Economist, Barbara Beck has a thoughtful survey article, "Closing the Gap," that explores issues of women and work around the world. She comments on the corporate board issue:

"Norway has become famous for imposing a 40% quota for women on the boards of all state-owned and quoted companies. Over a period of about a decade this raised the proportion of women on boards from 6% to the required figure. Aagoth Storvik and Mari Teigen, two Oslo-based academics who made a detailed study of the experiment last year, found that once the policy was implemented the heated debate over it died down completely and the system now seems to be working smoothly. But the researchers also point out that even now only 5% of the board chairmen (and only 2% of the bosses of companies quoted on the Oslo stock exchange) are women, so this is not a quick fix.
Nevertheless other countries have picked up on the Norwegian example. Spain has set a mandatory 40% target for female directors of large companies by 2015 and France by 2017. Germany is debating whether to impose quotas. In Britain a government-commissioned report earlier this year recommended that companies set themselves voluntary targets, but six months later only a handful seemed to have got around to it and progress is being kept under review. The European Union’s justice commissioner, Viviane Reding, has told European business leaders to promote many more women to boards voluntarily, or they may find their hands forced."

I'm usually an immediate opponent of quotas for positions. Beyond the problems of inflexibility and the inferences of tokenism, they seem to me like a way to substitute a mechanical rule for thoughtful consideration. But it also seems to me that many corporate boards have a poor job of reaching out for thoughtful talent from a variety of perspectives, and forcing them to reach out may be beneficial. (Also, shouldn't many more academic economists receive well-paid positions on corporate boards?) In the Economist, Beck tells of a London Business School Professor named Lynda Gratton who started out opposing gender quotas, but has changed her mind. Part of Gratton's rationale is that even if gender quotas lead some women of less-than-desireable competence to end up on corporate boards, they will probably just take the places of men who also have less-than-desireable competence.

The Inter-Parliamentary Union does an annual report on "Women in Parliament."  The data over the last 15 years show modest and intermittent progress toward gender equality in legislatures. Here's an overall summary, comparing the share of women in legislatures across regions for 1995 and 2010.

The IPU report summarizes events in 2010 this way: "In 2010, there were renewals [elections] for 67 chambers in 48 countries. Half of these renewals brought more women into parliament. In one-fifth of the chambers women’s representation stayed the same as in the previous legislature. More worrying is that in 28.5% of cases fewer women made it to parliament. By the end of 2010 women held 19.1% of all parliamentary seats worldwide, an all-time high that confirms the pattern of slow progress over the past 15 years from a world average of 13.1% in 2000. The number of chambers that have reached the UN target of 30% now stands at 43, a slight drop from 2009. Sixty-two chambers remain below the 10% mark, and 10 chambers have no women at all."

The IPU is also believes that quotas are a useful step toward improving the share of women in legislatures: "Quotas remain the single most effective way of increasing the number of women in politics. Five countries with legislated quotas, Afghanistan, Brazil, Costa Rica, Iraq and Kyrgyzstan, remained stable or saw small declines in their lower houses in 2010. Many countries that have no legislated quotas in the national parliament have voluntary party quotas. In addition, there can be local-level quotas even when there are none in the national parliament. This is the case in Namibia and the Philippines. ... Egypt’s 2010 election result raises questions about the reserved seats quota system. While it led to a 10.9 percentage point increase in the number of women members, not a
single one was elected from outside the quota system. This is a setback as, previously, nine women had been elected to parliament through the normal electoral process."

Again, I'm a visceral opponent of hard quotas. But it does seem to me that legislatures often end up with too narrow a slice of the population--for example, an overload of lawyers and the sort of egomaniacs who run to march at the front of every parade. It's certainly possible that gender quotas could push some undeserving women into office, but money and old family ties and incumbency push some undeserving men into office every year. I don't know of evidence that women who are part of a quota system are any less productive as legislators. And it seems to me reasonable and overdue for political parties to seek a broad diversity in their slate of candidates.  

Asian Century or Middle Income Trap?

Will Asia come to dominate the global economy during the 21st century? The Asian Development Bank published a thoughtful report on the subject in August called "Asia 2050: Realizing the Asian Century." The Executive Summary is available here; the full report is available by searching the web. Despite the triumphalist-sounding title, the report actually has a cautionary focus. 

"The rapid rise of Asia over the past 4-5 decades has been one of the most successful stories of economic development in recent times. Today, as Asia leads the world out of recession, the global economy’s center of gravity is once again shifting toward the region. The transformation underway has the potential to generate per capita income levels in Asia similar to those found in Europe today. By the middle of this century, Asia could account for half of global output, trade, and investment, while also enjoying widespread affluence.

While the realization of this promising outcome—referred to as the “Asian Century”—is plausible, Asia’s rise is by no means pre-ordained. Given Asia’s diversity and complexity, this rapid rise offers both important opportunities and significant challenges. In its march towards prosperity and a region free of poverty, Asia will need to sustain high growth rates, address widening inequities, and mitigate environmental degradation in the race for resources. In addition, Asian economies must avoid the middle income trap in order to realize the Asian Century."

As a starting point, the report offered a useful simplification for thinking about the huge region of Asia. Seven countries in Asia have roughly three-quarters of the region's population, and about 90% of the region's GDP. So in thinking about prospects for the the Asian region, one can reasonably focus on China India, Indonesia, Japan, the Republic of Korea, Thailand and Malaysia.

In the "Asian century" scenario, the region of Asia will regain the position in the world economy that it last held in the 1700s--that is, the region will produce more than half of all global output.



 Much of the report is a lots of discussion of possible issues that could derail this pattern: governance, urbanization, an aging population in some countries, education, regional cooperation, energy, environment, others. Here, I will pick out just a couple of broad theme.

A primary concern for Asia is the "Middle Income Trap." For an illustration, consider per capita growth of Korea compared with that of South Africa and Brazil. Korea has kept per capita income generally rising, even after terrible shocks like the 1997-98 financial crisis in east Asia. In contrast, Brazil, much of Latin America, and South Africa have been stuck at more-or-less the same place for several decades.

The report explains: "But many middle-income countries do not follow this pattern. Instead, they have bursts of growth followed by periods of stagnation or even decline, or are stuck at low growth rates. They are caught in the Middle Income Trap—unable to compete with low-income, low-wage economies in manufactured exports and with advanced economies in high-skill innovations. Put another way, such countries cannot make a timely transition from resource-driven growth, with low-cost labor and capital, to productivity-driven growth."

If the rising economies of Asia go follow the pattern of Latin America over most of the last 3-4 decades, then the world economy in 2050 will not look dramatically different than it does today. Instead of the Asian region producing over half the world's GDP by 2050, in this scenario it would produce just 31% of global GDP by 2050-- not far above current level. In this scenario, by 2050 the U.S. economy would be larger than the economies of China and India combined.

The closing words of the report are: "Asia’s future is fundamentally in its own hands." That statement is a bit evasive: referring to "its own hands" seems to imply a more unitary identity for Asia than is actually true. A great many hands will be involved in shaping the region's future. However, the statement also contains a deeper truth is worth considering. U.S. and Europe will surely influence the outcomes in Asia in modest ways, but Asia is a huge region, with huge population and huge resources. While exporting to the U.S. and western economist has jump-started growth in the region, it surely the capability at this point of generating continued growth from within.  Of course, whether that capability will be realized remains to be seen.

Given that the U.S. isn't going to determine what happens in Asia, how should it regard the possibilities?  If Asia falls into the Middle Income Trap, the U.S. can focus less on that area, both economically and politically. I personally would hope for continued economic growth in the region, because it would improve the standard of living so dramatically for several billion people. In this Asian Century scenario, the U.S. should be striving to find a way to connect its human, managerial, technological, financial, and other resources with all that vibrant economic growth, so that we can benefit from it. If the world economy is going to be pulled ahead by an Asian locomotive, the U.S. had better start figuring out how to reserve some good seats on the train. 

For a previous post on this topic, see Will Emerging Economies Dominate the World Economy? from July 22, 2011. For posts in the last few months on China catching up to and perhaps surpassing the U.S. economy, see Will China Catch Up to the U.S. Economy? from June 27, 2011, and Is China's Economic Dominance in the Long Run a Sure Thing? from September 9, 2011.