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J.J. Gould

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May 22 2009, 4:30PM

Tiananmen Eve Doubts About Chinese Growth

by J.J. Gould

With the 20th anniversary of the Tiananmen Square Massacre coming up -- or as the Chinese government likes to call it, the "June Fourth Incident" -- yesterday's New York Times features an absorbing account of contemporary Chinese university students' complex relationship with the 1989 uprising. Two things stand out: a pattern of apolitical focus among the students on their future in China's economy, and a general lack of access to government-independent information about it. Many students harbor vague pro-democratic sympathies but aren't interested in "going there" for fear of jeopardizing their still-promising economic prospects; meanwhile 80% continue to rely on China's state-controlled media -- which is as happy to reassure them about their economic prospects as it is to suppress political history.

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May 21 2009, 3:45PM

H1N1 and the Limits of Corporate Social Responsibility

by J.J. Gould

The current issue of The Economist looks at how the idea of "corporate social responsibility" is faring in the downturn. The answer is mixed: Corporate giving is down, but companies and their customers seem to be keeping up their interest in sustainability.

Take candy makers Mars and Cadbury: Both have committed to making their cocoa production environmentally sustainable by 2020. Why? Because they're worried about environmental degradation ruining their cocoa supplies over the coming decade. Wal-Mart meanwhile recently announced to 1,000+ of its Chinese suppliers that it would be holding them to higher environmental standards, higher expenses notwithstanding. The reason: They calculated that if these suppliers cut down on their packaging, Wal-Mart could knock out more than enough transportation-related costs to compensate. At the same time, consumers continue to keep up the CSR pressure: Marks & Spencer research indicates that 40% of us still have a clear preference for ethically sourced products, as long as we don't have to pay too much of a premium.

If, like Wal-Mart, companies can make sustainable sourcing and fair trading cost-neutral while winning with consumers on the CSR front, why not go for it?

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May 21 2009, 12:10PM

The Cost of Managing Commodities Politically

by J.J. Gould

Russell Shor, a senior industry analyst with the Gemological Institute of America, relates a story over at Foreign Policy -- possibly apocryphal, possibly even from a John le Carré novel I've yet to read -- of a Soviet plan back in the early '60s to disrupt DeBeers, still today South Africa's largest diamond firm, by manipulating the world diamond market via the Soviets' own Russian diamond supply. "The plan proceeded apace until someone in the government realized that Soviet diamond mines supplied about a quarter of De Beers's rough diamond sales. Needless to say, if the plan was ever real, it backfired."

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May 20 2009, 4:03PM

Scary Monsters Hit by Shrink Ray

by J.J. Gould

At the WSJ's Real Time Economics blog today, Bob Davis relays a new assessment from the Cambridge, Mass. consulting firm Monitor Group that the recession's drop in asset prices has seriously diminished the size of oil-rich countries' and Asian exporters' once-feared sovereign wealth funds (SWFs). SWFs -- i.e., state-owned investment funds -- were until now thought to hold around $3 trillion in assets and to threaten growing in short order to more than $10 trillion. With investments on those magnitudes, the funds stood to become powerful instruments of economic dominance for the governments that owned them. Or so many worried.

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May 20 2009, 10:07AM

The "Asininities" of Today's Regulators and Business Leaders

by J.J. Gould

The current issue of Stanford Lawyer runs a fantastic interview with Charles Munger, the no-nonsense, super-smart vice chairman of Berkshire Hathaway -- and one of the few to have seen the contemporary financial train wreck coming miles away.

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