I’ve been watching the U.S. (and now the world) economy disintegrate with interest for some time. As I wrote to a friend, it’s like watching the house next door burn down: you feel for the owner, and you know it’s going to affect you personally, but at the time all you can do is watch the spectacle. We seem now to really have gone over the cliff; the housing crisis has become a financial crisis and a general panic, and events that would make the news for a week in ordinary times now come several to a day. Currency crashes, bank nationalizations, double-digit percentage declines, trading halts are normal things to us all now. The Times published a long list of stock market results for October so far, and the cumulative weight of all those numbers made me want to cry - or giggle. The U.S. at -26% was among the best off. There was was some thought that Asia and the developing world would be the beneficiary of America’s and the West’s implosion, but it seems clear now that, as before, they will actually be hit the hardest. (China excepted, for the moment.)

I’ve been trying to keep up with all the developments and feel like far from an expert, but I actually think a lot of the discussion is missing the point. So much effort is being made to restart the credit markets, encourage consumers, and support the housing market, but the reason we are in this mess is that too much credit was extended, consumers bought too much, and the housing market went too high. As we now know, gravity still exists and the only way to sustainably move forward is to bring these factors back into balance. We missed the chance to try to do the balancing in a controlled and humane way, and now we are getting nature’s version.

Of course, people and (especially) businesses who want to and can take on credit need to be able to do so, or we will have a depression, no mistake. Restarting the engine is part of controlling the dive - but let’s not spend any effort trying to maintain an altitude at which the plane will not fly.

Sometimes I like to pretend I live in the future. I’ve ridden the Shanghai maglev many times and always liked it, but lately I’ve been on it mostly at night when it doesn’t go as fast (limited to 300km/hr) and it’s dark out anyway. So yesterday afternoon when I took it on my way to the airport it was like a new experience again. When I got to the station I had just missed it, so I went up to the head of the platform to look for the next one. It appeared right on time, swinging around the big curve sleek and fast. It sure looks like the future. You can see as it gets close that there are no wheels; it appears to just slide over its concrete platform, and it makes a very satisfying metallic growl as it slows.

As a thrill ride the maglev suffers from the same problem as the TGV - the ride is so smooth and the acceleration so gradual that it takes a while for you to feel like you’re moving at all. But while the speeding-up process is deliberate, it just doesn’t stop, and eventually things start to flip by pretty fast. And then you start to realize what air pressure means for something going 300 km/hr on the ground, as the roar from the air rushing past picks up and the cabin starts to vibrate - and it keeps getting faster. Looking to the south the cars on the expressway flashed by equally fast whether they were coming towards us or moving away. At 400 km/hr several concrete telephone poles went by each second. It was a beautifully clear sunny autumn day, and I could see the giant container cranes at Wusong port far to the north. After just a few minutes at the top speed of 430 km/hr (there’s a prominent speedometer in the cabin for people to have their picture taken in front of) the deceleration process begins. At some point on the opposite track the train going in the opposite direction passed in one single loud whump. After another big gentle curve that now feels slow, though we were still at 200 km/hr, you glide into the airport. 31 km in seven minutes on public transportation, and to my boyish mind, that’s the future.

As practical transportation the maglev has several faults. Its 15-20 minute headway introduces an unwelcome squishiness into your airport trip planning. But its primary fault, and the reason why it took big price slashes to get ridership to its current level, is the fact that it goes only from the airport to… nowhere in particular, Longyang Road in Pudong. It’s as if you built a maglev from JFK to Long Island City - worse, actually. So wherever you’re going, there is another lengthy trip ahead of you on subway or taxi, and if you are a group of more than one it won’t be cheaper than just taking a cab the whole way. But for me, travelling alone, it’s a little pleasure in the trip.

For me maglevs have always been part of the ideal future. When I was in fourth grade, our art teacher had us draw pictures of an imaginary city. I thought she wanted construction drawings, and I went way over time with an extremely precise plan showing streets, buildings, and a maglev. She had no idea what I was talking about (I had read about the German development program in Discover magazine) but seemed pleased by the result. So every time I ride the maglev now, there is in the back of my mind some wonder that I am actually living in the future that I imagined back then. It’s just a machine (although a train that floats on air at one third the speed of sound is some machine) but it gives a grown up guy faith that that things do chang, there are some new things under the sun.

In this post I went on about how fabulous grapes are in China compared to America. But there are all kinds of produce, and China does not win every time. Grapes are far better here, and so are most tropical fruit, particularly mangos. I don’t think I ever had a mango until I came to Shanghai, at least not one worth remembering, and now I consider my youth and young adulthood a barren wasteland of mangolessness. A ripe mango is like the physical embodiment of happiness - a beautiful calm yellow-orange, deliciously fragrant, uncontrollably juicy.

Chinese apples, on the other hand, are usually disappointing. There’s essentially only one variety, vaguely Fuji-like (does one capitalize a strain of produce, I wonder,) sweet but with a tragic tendency towards mealiness. There is nothing like the bounty of Jonagolds, Galas, Granny Smiths, Macintoshes (my personal favorite,) Haralsons and Cortlands that we get in America - often orchard-fresh, at least where I lived in the north. Melons are a hard-fought draw, and I’ve had religious-ectasy-inducing peaches in both countries - perhaps a little more reliably here. China is innocent of the marvelous Florida grapefruit, but it does have the equally good youzi, a clearly related yet totally different fruit. (HIHO Shanghai and I used to get these in Chinese markets in New York. We had no idea what they were - she is a northerner too, and they didn’t get up to Manchuria during her childhood - so we called them “refreshing fruit.”)

But since it’s August I’m here to talk about corn. As a midwesterner, corn is central not only to my idea of a good diet but my idea of a good life. Unfortunately, Chinese corn is (sorry, love) not worth feeding to pigs. I usually avoid it because it looks like corn and smells like (overcooked) corn, but tastes like the gunk scraped off the bottom of a corn pot that has been used to cook ten batches in a row. It’s dark, very mealy and sort of bitter, so unlike the crisp sweet kernels of sugar corn that we coat with butter and suck up like there aren’t fields and fields of the stuff. I used to think that American corn was actually too sweet and not corny enough, but I’d give a lot to have some now.

One of the great things about New York - or any city where you are actually out on the street with other citizens/gangstas - are the random things you see and hear. Occasionally these are hilarious. I have many examples myself, but because I never had a place to record them, I have sadly forgotten them all. But Overheard in New York offers many examples which are just like the ones I have forgotten, except even better. Here are a few of my favorites:

Atlantic Ave Station
(random guy trips over three-year-old girl’s stroller)
Guy: Oops, I’m sorry, honey.
Three-year-old girl in stroller: Don’t call me honey!

Banana Republic, 86th & 3rd 
Upper-East-Side lady on cell: I know, but I was at a funeral all day…Yeah, it was sad, but I really didn’t know him at all…This saddest thing was seeing his daughters upset. They’re the same ages as–Wow! This shirt is only $19!! You can’t even buy a freaking Frappuccino for $19! I’m getting it in blue.

Crema Restaurante, 17th & 6th
Mother with little girl: Excuse me. My daughter wants to know if you’re a pirate.
Woman wearing bandana: No. I’m just a lesbian.

Brooklyn bound Q train
Small child in stroller: Mommy, why did you wake me up? Don’t wake me up when I’m sleeping!
Mom: Fine. I’ll leave you on the train and you can miss your stop and then the rats will get you.

B45 Bus
Bus driver: Everyone get on the bus, I got a schedule. For those of you sneaking on in the back, can you at least do it fast? I’ve got places to be.

N train, Astoria
Conductor: Never give up on life. Keep hope alive. This is 30th Avenue.

There it is, the whole city laid out in front of you. What a treasure.

One weird thing about being an armchair economist is that everything happens so slowly. I’m professionally kind of used to it, but it’s especially apparent these days as the U.S. economy rolls off a cliff in slow mo like a bad 70s car crash movie. Every time you check in it’s a little worse - oh look, there a door came off. And there goes a wheel.

This article from the Times puts it all very clearly: Real estate? Still falling. Jobs? Evaporating. Credit? Still getting tighter. Prices? Going up! But the scary thing is that everyone agrees that things have to get worse, maybe much worse, before housing prices and household credit are at something like normal levels and we can turn around and start building again. My favorite scare line was the estimate that we have enough new houses for the next two and a half years, without building a single new one. (I suspect that this is a deceptive average, and that there is still some demand in New York and Minnesota, to take two places at random, but enough housing stock in Florida and Las Vegas to last approximately forever. Just a guess.)

The Times has been pointing out for a while that not only are we likely to be in a recession, but that the preceding period of expansion wasn’t actually that great: most people’s real incomes have actually been declining since 1991. An earlier article that I lost the URL to said: “For a variety of reasons that economists only partly understand — including technological change and global trade — many workers have received only modest raises in recent years, despite healthy economic growth.” I ain’t no E-conomist, but I think this isn’t actually that tricky. The reason why American workers aren’t getting raises is that technological change and global trade have made it a lot easier to use foreign workers, so jobs are going or are threatening to go overseas, and the real wages of workers worldwide is going up while wages here are stagnating. Or so I thought, and lo and behold How the World Works has just brought out a Goldman Sachs report that agrees. Because I live in one of the places where real wages used to be very low but have been going way up, I tend to see this as a good thing, though of course if you’re an American worker who has been enjoying earning a lot more than pretty much everyone else for the last century or so, it sucks.
Classical economists are on my side, because the winners (Chinese and Indian workers, and of course the global capitalists who are getting them work) could compensate the losers (American workers) and still come out ahead, leaving everyone with more, er, utils. In reality of course this never happens, the winners go to the bank and losers get poor. And if you try and make the winners share a little they whine about global competitiveness. In this case there is a little turnabout at work too, because when American labor was on top how hard did it it work to make capitalists and the US government compensate the rest of the world? That record unfortunately is clear.
And I must be getting old and conservative, because I sense a lot of entitlement loss in America from ordinary people. I read this from Ohio Senator Sherrod Brown from an older How the World Works (quoted in turn from the Nation):

“…There’s a company called American Standard, they make toilets, plumbing fixtures, you’ll see them in near any public restroom anywhere. They’re in Tiffin, Ohio, town of 20,000. They’ve just announced back around 3 months ago, the closing of the plant. It was bought by some investors, they’re moving offshore, they’re honoring the union contract as far as they have to, which is those who already have their 30 years. If you have less than 30 you’re pretty screwed — they give you something, but you can’t get to the 30 years because they close the plant.”

This is hard for the workers and for the town, but “screwed” is a pretty powerful word to use when people are honoring the contract and the worst you can say about them is that they won’t guarantee you the chance to work there for 30 years. 30 years! To me this has the same ring to it as clauses stating how many hogsheads of ale the lord will get from the village, it’s just not credible in the world I see around me.

Here’s something new: Since June 1, you no longer get plastic bags when shopping in China. (The complete policy is given here, but the short version is that shops may not give out free bags, and plastic under .025 mm thick is banned altogether.) My personal take on the rule after a week or so: AWESOME! Twice recently I was out shopping, bought a couple of things, and didn’t get a bag. In one case I was with the baby and actually asked for one and was turned down. In both cases adjustment was easy and painless; it turned out I didn’t need a bag after all.

To me, this is one case where government fiat makes a lot of sense. You can take the fate of the world on your shoulders and be the only weirdo in town carrying around a canvas bag (and trying to get every salesperson not to give you three plastic ones.) But it’s a pain and there’s always the nagging suspicion that you’re not affecting a damn thing, and eventually you stop. At least, that was my story. Or, the government says, we use 3 billion plastic bags a day which requires 37 million barrels of oil a year, and that seems excessive, so just stop. And that’s it.
Nobody familiar with the giant accumulation of plastic in the Pacific Ocean can doubt that we have to get rid of disposable plastic as soon as possible. My personal hope is that the plastic bag ban will be like the smoking bans I have seen take effect - it seems like the end of the world and there’s all kinds of histrionics, but when it actually takes effect everyone realizes that things are just like they were before, except much better. And the rest of the world will soon follow.

P.S. It’s nice to see China taking the lead in an environmental matter. Lord knows it needs the press - not that I’ve seen any.

It’s been a tough year in China. First there were the freaky winter storms that hit right before spring festival. There was a horrific train crash, and almost a head-on airplane collision. There were deadly riots in… a place that can cause blogs to get censored, and the resulting international furor including attacks on Olympic torch bearers, demonstrations and counter-demonstrations, and lots of ignorant ranting on the internet. Of course, the earthquake has dwarfed everything. It’s been bruising us for two weeks and won’t stop: more than 60,000 dead, dozens of schools crushed with all inside, a quarter million people injured, five million homeless, 16 million buildings destroyed. And the pictures are worse than the numbers, and the stories are worse than the pictures. People are really shaken.
It has actually changed the country, in the same way that 9/11 changed America, although I don’t think anyone knows exactly how yet. But everything is clearly different. This place which was all about getting ahead, making money and doing new things at the greatest speed possible has been badly rocked, not only by the horrible event and the aftermath, but by the exposure of the poverty of the countryside, and the growing realization that buildings for rich people held up and protected them, and buildings for poor people and their children collapsed and killed them. The whole country has been in a bad accident, and I think that mentally at least the gold rush is over.

Until the earthquake, everything printed or shown came through several layers of filters, but for two weeks the earthquake was everything and it was all live. Now people are asking how much money the Red Cross has received and where it’s being spent, and why schools fell down in places where other buildings didn’t, and I think it’s hard to go back.

I’m thinking of a mediocre movie I saw recently, in which a policeman asks a victim who was badly beaten and her fiance killed,  “How do you survive something like that?” Her answer: “You become a different person.” I don’t think China will become a different country, or that those of us living here will become different people. We’re all moving on with our lives, going to work, buying stuff, having parties. But I do think something has changed.

All right, I’ve actually been back in Shanghai for more than a week, but these were my thoughts over being in Dalian, HIHO Shanghai’s home town, for a week over Chinese New Year:

• Blue skies. I would rather have 20 F and sunny skies than 35 F and raining - or just gray and hazy - any time.
• Fireworks! Every year I am astonished at the number and caliber (in both senses) of fireworks set off over new year’s. Think of the typical American fourth of July fireworks show: This is possibly equal to the fireworks set off by the average apartment building in a city of several million people - and yes, I mean the kind that shoot hundreds of feet into the sky and explode; they are perfectly legal to buy and not that expensive. Add to that assorted spinners, flares, roman candles (here called “magic eggs”) and the red strings of hundreds of crackers whose main job is to be as loud as possible, and you just cannot imagine the shock and awe. It’s a perfect Armaggeddon, and we have a good view of it from my in-laws’ hillside apartment. I am planning a video upload; wish me luck.
• We both sometimes feel that Shanghai is a foreign country, and on this trip one big reason for this became apparent - in Dalian, I can understand people on the street! It is amazing what a difference this makes in your perception of a place - when the cabbie answers his cell phone, I understand what he says, and when the two old ladies talk in the elevator, I hear their whole conversation. It’s not that I’m so interested in all this peripheral chitchat, but it makes you feel like you’re a member. In Shanghai, I can talk to pretty much anybody - but I have to start the conversation. Otherwise I might as well be in Seoul (Shanghainese sounds sort of like Korean to me, unlike Cantonese, which is even more unintelligible but couldn’t be anything but Chinese.)

Also, HIHO Shanghai has been making a list of good things about Shanghai, and being in Dalian brought out some of those too:

• People on the street in Shanghai basically don’t think me being a foreigner is that big a deal; in Dalian I am noticed and still get the occasional “helloooor.” This is not a greeting but the equivalent of throwing food at the monkey to see what it will do. In the old days in Changchun I used to stop traffic.
• We tried to buy a couple of things for the baby, and realized quickly that we had not properly appreciated living in a place where you can get anything you want:  local, domestic or imported.

Anyway, it was great to be there, but coming back was okay too.

A post from home, for a change. The thrashing in the stock markets this week was either the beginning of the collapse of the entire worldwide financial system we’ve been waiting for, plus a serious recession (highlights: lending halted by banks over their ratios because of massive subprime mortgage losses, bond insurers defaulting because of poor subprime mortgage risk pricing, stocks in freefall because of the inability of Americans to keep buying stuff, the dollar in freefall because of the Fed’s futile attempts to keep the party going by printing money and lowering interest rates - stop me if this gets boring) or, it was just a cold week in Shanghai. I dare say nobody knows which. I find it hard to be too upset, myself: the jeremiah in me thinks that Americans have been living beyond their means for a long time (literally: we have had a negative savings rate on and off since the 1980s) and finds some satisfaction in seeing the chickens checking in. The selfish part of me notes that except for some retirement and college funds, basically all our money by necessity is in Shanghai real estate, which still seems like a decent bet - plus I get paid in RMB. The rubbernecker in me kind of wants to see a real train wreck. It’s not pretty, because I know a lot of people in the States who were careful and played by the rules are still going to lose their houses and jobs, and I bet a lot of people in China and other developing countries are going to stay poor, because of all this, and the worst part is that it probably didn’t have to be this way.

By the way, you’ve probably been wondering how much China and the rest of Asia are still linked by exports to the American economy.  A lot of people have been speculating “a lot less than before” but the Asian markets gyrating in synch with all the others make that argument a lot less persuasive than it was. But here’s the kicker: the Times and others are wondering if this is actually a good thing for China - the argument is that China’s economy is going flat out right now and faces its biggest threat from inflation and overheating. If demand from the US goes away, the Chinese have a lot better chance to control inflation and more chance to spend their tremendous hoard of wealth in their own country. I have to admit that that would benefit me too, since I live and work here.

More importantly, it snowed almost all day today, big wet fun snowflakes that you could almost hear hitting the ground. Because this is Shanghai, the result of 8 hours worth of decent snowfall was a lot of cold puddles.

There surely is not a good airport to be delayed in, but Sanya has one huge advantage in this regard; after going through security and confirming that your plane will not even arrive for another half hour, you can go outside to a large and pleasant area with wooden patio furniture to wait in the cool evening breeze and listen to the continuous delay announcements.
I refuse to feel sorry for myself tonight. Here’s how I look at it: Despite massive delays all around the country, I managed to get on a flight for home scheduled to leave only an hour after my original departure time. And although that flight has also been delayed, its new time appears credible (unlike so many of the other flights for which no new time has been posted at all), and it’s to Hongqiao airport, which is much closer to my house than the original flight. The cold I am nursing is only a little irritating to my throat and does not make me feel awful. I have my trusty computer and a good book and the abovementioned outdoor seating area, and if there are no actual seats because of the large number of fellow stranded travelers, at least I am not fettered by silly cultural mores prohibiting sitting in your dress slacks on the grass. There is no wireless internet, but that means that I’m not obligated to check my work email – which I know is full of issues because I have been in rural Hainan for three days. Not that I am complaining, because I got to spend a day climbing a mountain and looking at beautiful scenery on work time (site research!)
So actually life is pretty good. With only a little luck – actually a lack of bad luck is all that’s required – in a few hours I will be at home in my own bed, and that’s something to really be happy about.