An important piece on patience and the economy, Paul Krugman on Japan's awful demographics, the public service elite, the debate in the United Kingdom about how to restrain the state and public spending that has lessons for Canada, Greg Ip's new book, and thoughts on productivity.

And Gary Mason's hard thinking on his father's slow death.

http://www.fujiarts.com/cgi-bin/item.pl?item=114955

"One moment of patience may ward off great disaster, one moment of impatience may ruin a whole life."

So opens a powerful essay on the importance of patience the economy that also speaks volumes about investing by Andrew Haldane of the Bank of England delivered at conference in Beijing. This is a must read for people in the investment business and communicates an important life lesson that is as simple as 'look both ways before you cross the road.'  Pdf below -- Patience and Finance. Thanks very much to John of Toronto for sending this in.

In preparation for my talk in Victoria on September 22 http://www.harboursiderotary.org/  we keep tripping over articles on Japan's demographics, Paul Krugman on how Japan's shrinking labour force has doomed the economy. It's bad very bad. (ed's note: the article has two extremely useful data links for macro nerds).

I’m not the first person* by a long shot to make this point, but it’s fairly amazing how much of Japan’s relative slide since the early 90s can be explained not by economics per se but by demography. http://krugman.blogs.nytimes.com/2010/09/08/japanese-demography/?nl=opinion&emc=tyb1 

(ed's note -- *Krugman is right, we wrote about it 18 years ago: Paul A. Summerville, "Japan's Chronic Labor Shortage: Shaping the Next Generation of. Economic Growth," Business & the Contemporary World (Winter 1992) although the conclusion was this would create an inflationary bias to the economy, oh well ...)

The trade off between public and private sector jobs was that the former paid less because there was more job security. With ironclad pensions and rising life expectancy however the present value of public sector pensions has made multi-millionaires out of most public servants. Wait until the rest of us figure it out.

There really are two Americas, but they are not captured by the standard class warfare speeches that dramatise the gulf between the rich and the poor.  http://www.ft.com/cms/s/0/96b696b0-bc55-11df-a42b-00144feab49a.html?ftcamp=rss&ftcamp=crm/email/2010910/nbe/Comment/product

The debate about public spending occurring in the United Kingdom is very important because it will frame a similar debate in other high income high debt countries. It is also important because their is a very broad political spectrum that the debate is being carried out on that makes it more interesting than the similar debate in the United States.

Samuel Brittan's idea on how to put government spending in the boxes they belong.

According to the pollsters Ipsos Mori, George Osborne is the most popular Conservative chancellor since its records began in 1976. The knee-jerk media reaction is to say: “You wait until the public spending cuts bite.” But I want to dig a little deeper.  http://www.ft.com/cms/s/0/c8526642-bc53-11df-a42b-00144feab49a.html?ftcamp=rss&ftcamp=crm/email/2010910/nbe/Comment/product

This speech by Edward Balls referenced by Brittan is very interesting particularly for students of British economy history.

It more or less confirms in my mind the biggest challenge facing Finance Ministers, having to take advice from economists. Winston Churchill's horrifically stupid decision in 1925 when he was Chancellor of the Exchequer to re-peg the pound to gold at 1914 prices put vast swaths of British industry out of business as continental economies were unpegged.

On rethinking the decision in 1929 Churchill reminded his critics that this is exactly what the largest herd of economists had recommended he do. The goes for Roosevelt's decision to rein in public spending in 1937 thus reigniting the depression.

Probably the only time I have felt any empathy for Canadian Finance Minister Jim Flaherty -- and trust me it is very hard -- was when he reminded his critics that no (well at least those at the five big Canadian banks) economists foresaw the 2008 meltdown or even understood the relationship between securitisation and the economy.

I am very grateful to Bloomberg for giving me the opportunity to come here this morning to respond to the bullish speech given from this same platform by George Osborne 10 days ago. http://www.labourlist.org/the-growth-deniers---ed-balls-full-speech

I remember young and thoughtful Canadian Greg Ip interviewing me in 1995 in Toronto with John Soukas -- John as always answered all the questions -- when he was an up and coming market journalist for the National Post. Greg moved to write for the best newspapers in the world and is now the economics editor for the Economist. 

This is an excerpt from his new book.

Japan's recent demotion to world's third-largest economy, behind China, triggered two distinctly different feelings in the United States.    http://online.wsj.com/article/SB10001424052748704358904575478072373684644.html?mod=rss_opinion_main

We have been thinking a lot about productivity in the past months as this surely is a key to an excellent Canadian future. This is an interesting comparative piece from the New York Fed looking at cities. Our good friend and productivity expert Craig Alexander now chief economist of TD Bank and I have been thinking that Canada's consistently poor productivity performance may have something to do with geography and scale. Pdf below -- Knowledge in Cities.

This study identifies clusters of U.S. and Canadian metropolitan areas with similar knowledge traits.  http://www.newyorkfed.org/research/staff_reports/sr470.html

This interesting article on Brazil reminds us that politics has a defining impact on the decisions societies make that in turn can have a generational impact on productivity.

Even with the taming of inflation since 1994 and clearly more responsible macroeconomic policy since 1999—as well as a recent prolonged period of high prices of its main commodities—productivity and economic growth have remained depressed, with Brazil frequently below the Latin American average.   http://www.brookings.edu/opinions/2010/0901_brazil_economy_pereira.aspx

And finally Gary Mason deals directly with the matter of prolonging life. 

It doesn’t benefit the terminally ill or the rest of us to pour money into end-of-life treatment. http://www.theglobeandmail.com/news/opinions/the-end-of-life-a-just-and-reasonable-accommodation/article1700245/?cmpid=rss1

This article referenced by Mason may change how many think about what we call 'living to die'. The writing is why, if you don't already, you subscribe to the New Yorker.

Sara Thomas Monopoli was pregnant with her first child when her doctors learned that she was going to die. http://www.newyorker.com/reporting/2010/08/02/100802fa_fact_gawande