Mark James Russell

Books, blog and other blather

Month: April 2013

Can’t Win for Losing — Econ Edition

Paul Krugman’s latest column, “The 1 Percent Solution,” is a very good one, as usual, but it also gets at a deeper issue that has been bothering me for some time — why is it that austerity ideas are so deeply rooted in the elites, despite such a lack of evidence for their effectiveness? Krugman gets into the class aspects of the divide, arguing that the 1% are simply arguing for policies that are good for the 1%. Not terribly surprising, I guess.

But it is an argument that brings up a couple of related points, imho. The first is demographic. While there is a big divide between haves and have-nots, it is a line that changes with age — as people get older, they tend to get richer, and they tend to become net creditors instead of debtors. The 1% beliefs are not just about entitlements and austerity, they also are very creditor-friendly, preferring deflation over inflation, for example. Which in part explains the difference in how age groups support different policies.

The other bigger issue that I’ve heard economists bring up is the Cold War. Basically, the argument is, back in the days of the Cold War, when there was this big, left-wing enemy out there, the monied elites in the West saw it was in their interest not to let inequality grow too much. The peasants had alternatives, so you couldn’t let them get fired up and storm the Bastille. A stable, happy system was good for all.

But today, now that communism is over as a viable danger, the 1% (or 0.1% or so) are free to push for their own interests without fear of blowback. And so they have pushed, quite successfully. Is it a coincidence that the rise of the financial industry and inequality matches with the downfall of communism? Maybe economic systems need common enemies to keep them in balance.

With the continued problems gripping Europe, you can see people growing more desperate for a solution. Most people are pretty centrist politically, but when the center refuses to provide answers, people will look for alternatives. Certainly Spain is exhibit A for a political system that is completely unable to reform itself or provide answers for its citizens. Without things in Europe getting better, I worry who might try filling that void in the future.

K-Pop in Milken Review

My new article about K-pop and Korean economics is out in the latest issue of the Milken Review. It was fun writing something longer and more serious than the usual K-pop feature, letting me flex some different writing and thinking muscles.

So far, it looks like the article is getting some good feedback, too, getting mentions in Forbes, Kpopstarz, and elsewhere. I’ll try to add more links as I run across them.

Snowpiercer Stills

Loving the latest batch of images of Bong Joon-ho’s SNOWPIERCER that have appeared online. Still no word when the film might get a release day, sadly. But it feels good to see Bong’s film shaping up so nicely.

And here’s the man, Song Kang-ho:

Unreal North Korea

So, I was enjoying Andrei Lankov’s latest New York Times column on North Korea — as usual, he is the most astute observer on that regime — when I did a bit of wayward Googling and discovered that Mr. Lankov has a new book out about Pyongyang, the charming Kim family, and all that good stuff.

It took about 30 seconds before I had The Real North Korea on my Kindle. I’m really looking forward to reading it … although I am slammed with enough work and deadlines these days that I fear I will not get it done for a couple of months.

As for Andrei’s latest column I mentioned, here’s the key graph:

If history is any guide, in a few weeks’ time things will calm down. North Korea’s media will tell its people that the might of the People’s Army and the strategic genius of their new young leader made the terrified American imperialists cancel their plans to invade the North. Meanwhile, North Korea’s diplomats will approach their international counterparts and start probing for aid and political concessions.

In other words, it is business as usual on the Korean Peninsula.

 

Mia Kim in Hungary

Just for kicks, here’s a video of Mia Kim — one of the members of the Kim Sisters, a popular Korean group from the 1950s and 60s — singing in Hungary in 2009.

Stuck in the Euro With You

So, apparently the latest round of Euro-crisis wackamole has moved on to Portugal, with worse-then-expected economic news leading to worse-than-expected cuts. Slash, rinse, repeat. As usual, economists like Paul Krugman are saying how foolish the whole austerity cycle is, and as usual no one in authority listens to them (although the Portuguese courts struck down some of the government’s cuts last Friday).

Now, at this point I do not find it very surprising that the political leader in Portugal, as pretty much everywhere in Europe do not have the imagination or the stones to take a stand against the voodoo-economics of cut-cut-cut. But what does surprise me greatly is how little popular support there is for fixing the Europea’s true problem — no, not excessive spending or the welfare state, I’m talking about ending the euro itself.

Living on the Iberian peninsula and traveling around Europe, you see plenty of signs that people are opposed to their governments’ austerity plans. There are oodles of rallies and posters decrying cuts, calling for “socialisme” and “reform”, demanding strikes, etc. But all of that misses the point, doesn’t it? Because when economists say austerity is stupid, they are not advocating continuing spending as if nothing was wrong. The real argument is that the euro itself is fundamentally flawed, and unless Europe turns its currency union into a fuller fiscal union, the euro simply cannot work.

It is a clear and powerful argument. However, I have seen almost no popular pressure to ditch the euro. It isn’t a chant at rallies or a common poster. No political parties of note are rallying behind the idea. And without a commitment to fix the real problem that is plaguing Europe, I don’t see how this problem is going to get fixed … at least not any time soon.

It’s Not (and Never Was) a Korean Wave — It’s a Globalization Wave

One of my bigger arguments in Pop Goes Korea was that the Korean Wave was not really about Korea at all; it was actually about globalization. The amazing success Korea has had in media and entertainment over the past 10-15 years was not because Korea was unique and different as much as it was because Korea has ahead of the curve.

Korea was at the forefront of the Internet revolution, and many of the changes that online has wrought came to Korea first (or at least quicker and more dramatically). Music, for example — online/digital sales in Korea have surpassed physical sales (CDs, etc.) since at least 2004.

But, the thing is, those changes are increasingly affecting the rest of the world now. With music now, $5.6 billion is spent globally on digital music (that’s about 34% of all music revenue), with digital exceeding physical sales in Sweden, Norway, India, and the United States, and much of the rest of the world is catching up.

Which brings me to Turkey and Turkish television. I wrote about Turkish soaps in 2010, but they have just continued to grow in popularity since then, earning $90 million in exports last year, up from just $1 million in 2007. They have found big fans throughout Central Asia, the Balkans, the Arab World and even Latin America. And what’s driving that success? Good production values and stories, as well as the need for more content — cable/satellite TV means more channels, and those channels need something to fill the void. Turkish producers have done their best to fill it.

One of Turkey’s most popular TV shows, Magnificent Century (or “Muhteşem Yüzyıl”).

And it is not just Turkey. In Eastern Europe, the growth of pay-TV (now an $8.3 billion market) has also created more demand, leading producers to emulate Russian, Scandinavian, and other content.

With the success of Turkish soft power, predictably, has come a backlash, with many countries banning Turkish soaps. While cultural protectionism is a common issue all over the world (at least when a country is importing culture … exporters tend to be much more open-minded), I do think a lot of journalists oversell the issue. As one wrote:

Remember, the Turks did not feel they should be a satellite state of Brazil just because they so dearly loved Brazilian soap operas in the 1980s and 1990s. Nor did the Arabs begin to love the Americans/America because they had a habit of watching more Hollywood films (than Turkish soaps).

On the other hand (if I may undercut my own argument), when you look at the IFPI’s international music numbers, local sales are still overwhelmingly important in most markets. But I don’t think that is terribly surprising. Exports are more of an issue in capital-intensive forms of media, like TV or movies. When you go to the big international content markets (film, TV, music, or whatever), you are increasingly seeing an international presence selling content, not just buying. It’s still the early phases of the new media world we are growing into, but I’m still encouraged by what I am seeing.

 

 

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