Migrant Worker Schools

I did a spot on CNBC Squawk Box this morning to discuss the impact of the recent unrest in China. Much of the news surrounds stories about migrant worker protests. As I wrote yesterday, the drivers for the protests making the news is not ideology–it is practical life issues like pay, jobs, work practices, discrimination, and corrupt local government officials. Wen Jiabao recently said that corrupt officials is China’s greatest crisis. Last year more than 146,000 corrupt officials were arrested in China; 97% of them were at the county, city, or village level. Our discussion this morning turned on the impact on the... [Read more]

New Forbes Op-Ed. China Inflation: The Canary In the Coalmine

My friend John Tamny, who runs the Op-Ed operation at Forbes, emailed last week asking me to fire up my Forbes column again, I couldn’t be more pleased. My first column is below. Hope you enjoy. You can view it on the Forbes.com website by clicking here, or at RealClearMarkets by clicking here. China Inflation: The Canary In the Coalmine The real inflation story is here in the United States. Rising inflation in China has investors running scared, fearing that Chinese central bank tightening will end global growth. They are worrying about the wrong problem. China’s inflation problem is transitory and will not... [Read more]

Op-Ed: The New Economy Can we stay ahead of China? Yes!

I wrote an op-ed for the Christian Science Monitor a few days ago on US/China relations. You can read it by clicking here. It deals with the question of when China’s GDP will exceed US GDP. My point is that the answer depends on us. Can we stay ahead of China? Yes! But it will depend on America’s political will to fix its own problems, rather than blaming them on China. I was approached by a man at the supermarket who penetrated my Southern California disguise of baggy shorts, T-shirt, and deck shoes with no socks and asked if I was me? (Yes); the one who talked about China on CNBC? (Yes); then the question I hear... [Read more]

Common Ground Committee Forum

(June 14, 2011) Last week I had the pleasure of participating in a public forum hosted by the Common Ground Committee in Darien CT. You can watch a  video of the forum at the Common Ground Committee’s website. The thesis of the forum is to explore a controversial topic and look for common ground–areas where both sides can agree–to use as a basis for building a solution. Our topic was China: Threat or Opportunity?The forum was moderated by John Yemma, editor of the Christian Science Monitor, where I ran an op-ed on the subject ahead of the meeting. The combatants were Henry Tang, Alan Tonelson, Peter Ford,... [Read more]

CNBC Kudlow Report tonight on US/China Retail Sales Reports

I did a spot with Larry Kudlow tonight to discuss today’s retail sales reports that seems to have been a major impetus behind today’s huge stock market increase. Great to work with my old friend again. Not many know this, but Larry and I have been working together since 1976 when he was Chief Economist at Paine Webber and I was a professor at Claremont Men’s College (known as Claremont McKenna College today). The US Advance Advance Monthly Sales for Retail and Food Services Report for was down -0.2% for May (+0.3% excluding motor vehicles), and +7.7% over year ago levels (+8.2% excluding motor vehicles.)... [Read more]

CNBC Squawk Box in the Morning

(June 14, 2011) Will do an early morning spot on CNBC Squawk Box tomorrow (Wed. 6/15/11) 8:40AM Eastern time (5:40AM hit for me here in California–argh!). Hope you can dial us in. The topic will be the recent unrest in China that was the subject of the Wall Street Journal front page story today. There have been a series of public protests in recent weeks in Inner Mongolia, Lichuan, and Zengcheng, including bombs set off in Fuzhou and Tianjin a few days ago. Individually, the events are hard to connect: a Mongolian sheep herder accidentally killed by a Chinese truck driver; protests against corrupt local officials and... [Read more]

You don’t Use Interest Rates to Control Cabbage Prices: China February CPI +2.7% will Not Trigger Policy Tightening.

China CPI – February 2010 (The charts below are courtesy of Andy Rothman at CLSA. Andy is by far the most knowledgeable person I know on Chinese inflation issues.) The worry that rising inflation in China will provoke the government to tighten sharply, which would slow growth and push commodity prices lower is unfounded. China’s February CPI was up +2.7% from a year earlier after showing deflation for most of 2009. As the chart below shows, however, it’s all food prices. 2.06% of the 2.7% headline number came from food. Another .44% came from residence expenses, which were pushed up by a one-time increase... [Read more]

Pelosi's Sunday House Health Care Non-Vote Will Not Survive Constitutional Challenge

The vote is scheduled for Sunday, when most people are not watching the news–I wonder why? This weekend, House Speaker Pelosi is going to try to end-run the Constitution to pass the largest piece of legislation ever enacted–multi-trillion dollar healthcare reform–without a vote. My friend and constitutional law and health care scholar Betsy McCaughey  has written two books on the Constitution. Betsy says the Pelosi gambit won’t survive a constitutional challenge in the Supreme Court. You can read Betsy McCaughey’s analysis by clicking here. A number of House Democrats do not want to go... [Read more]

Using ETFs to Play China—New Article on Forbes.com

I recently sat down with Wallace Forbes to discuss investing in China and other emerging markets—the interview is now up on Forbes.com. The text of the article follows below: Using ETFs To Play China Wallace Forbes 03.01.10, 5:00 PM ET John Rutledge, founder and chairman of Rutledge Capital, discusses with Wallace Forbes investments in China and other emerging markets. Rutledge: Needless to say, this is a tricky time for people trying to forecast the economy since there are so many policy changes in the wind. I think what we’ve got to realize is that last year, 2009, was really dominated by an undervalued... [Read more]

Arizona's Transparent Government Finances: now online for all to see

You have to see this. My friend Mark Swenson, Arizona Deputy Treasurer, has shown me their new website. Arizona State Treasurer, Dean Martin, has put Arizona’s financial system online for all to see. Dean’s purpose was to provide Arizona taxpayers with a searchable, user-friendly website that discloses all revenues and expenditures for Arizona State government. The site has daily cash balances the the entire state government (the figure above is from today’s front page) plus detailed information on all outlays and revenue sources as you can see below. It is the most transparent government site of any kind I... [Read more]

China Is Not Going To Sell Their U.S. Securities

Whether China will continue to own/buy our bonds or not is a story that shows up in the media every few months. It makes good copy but most of the people who write about it have little direct knowledge of the situation. Bottom line: China is not going to stop buying U.S. securities but they have become our biggest creditor–too big to ignore what they are thinking. I have spoken with the Chinese leaders personally about this issue in recent months. They are concerned that the U.S. government is spending too much money, that our budget deficits are too big, that our debt is growing too fast, and especially that the Fed... [Read more]

Housing Market Worse Than Government Reports Show. We Need Pro-Growth Policies Now!

New reports from S&P and Moody’s indicate housing crisis has 3 more years to run, that Obama’s HAMP loan modification program has been a flop and will drive down home prices by 8% this year, and that 70% of the modified loans will re-default. This is one more reason why we need pro-growth policies–not phony stimulus spending plans–now. The “shadow inventory” of bank-repossessed properties, as well as distressed mortgages facing foreclosure, will take nearly three years to clear at the current sales rate, according to a report from the credit rating agency Standard & Poor’s (S&P). The... [Read more]