The Balcony Box

Michael Pettis is following the massive credit expansion in China.  Loan volumes are up about 3x year-on-year in the first half.  Apparently watching the U.S. immolate itself with a colossal credit bubble wasn’t enough… they’re going to try it for themselves.

Julius, you may have been right about the few remaining sources of growth in the U.S. economy.  According to this BusinessWeek blog, there’s substantial unmet demand in the cruise industry for “gentleman hosts”:

Gentleman hosts exist for the simple reason that there are more single ladies than men on cruise ships and cruise lines like to provide dance partners and companions for their lady passengers. And while the criteria for gentlemen hosts are very strict, there are numerous vacancies available. Cruise lines offering gentleman host programs include Cunard Line, Delta Queen Steamboat Company, Orient Lines, Silversea Cruises, Radisson Seven Seas Cruises, and World Explorer Cruises.

… gentleman hosts get paid less but have nice fringe benefits.

Thank goodness we transitioned to a service economy!

The House of Representatives took an impressively sensible step toward combatting climate change by passing a cap-and-trade bill.  At least in principle, the provision in the bill to levy a carbon tariff on imports from countries without carbon emission caps.  I haven’t looked at the details of the bill, so I don’t know whether the provision is well crafted or not–and the devil is probably in the details.  That said, the general concept makes perfect sense.  Indeed, it would be patently silly for the U.S. to adopt a measure without such a provision, as that would encourage carbon-intensive industry to move to less restrictive nations, at once damaging the U.S. economy, reducing the effectiveness of the measure, and strengthening the incentives of less restrictive nations to maintain lenient policies rather than following the American lead.

So it’s depressing to see China and India take blatantly self-interested positions on the measure, rather than either (a) creating carbon emission regimes that sufficient to justify exclusion from the carbon tariff, perhaps pursuant to negotiation or (b) proposing to work with the U.S. on the design of the carbon tariffs so that they contribute to efficient reduction of carbon emissions in China and India.  Here are statements from China and India, from the Financial Times:

“It has always been China’s position that the international society should fight climate change together, but the proposal of some developed countries to slap a carbon tariff on some imported products violates the WTO’s basic principles and is trade protectionism in the disguise of environmental protection,” said Yao Jian, spokesman for China’s ministry of commerce.

Earlier this week, Jairam Ramesh, the Indian environment minister, described carbon tariffs as “pernicious” and flatly rejected the idea of negotiating climate change at the WTO.

This is no way to engage with possibly the most pressing environmental issue facing the human race.