Economic news

Two worrying pieces of economic information came out today: a crash in the Chinese stock market and an unexpectedly dire durable goods report in the US. Brad DeLong is worried about the durable goods orders, noting that "If I were the Federal Reserve, I'd be a-cuttin interest rates next meeting...". Now, who knows whether the crash in the Chinese stock market is a momentary phenomenon or the start of a long-term death spiral? And would even a serious long-term crisis have any impact on the US? After all, most of what "we" (by which I mean corporate America) do in China is employ their cheap labor in factories that we own, shipping the products for sale in the US. Does turmoil in China's financial markets affect that at all? I don't know. But if something significant like the 1997 Asian crisis is in our future, economists will be citing today's headlines as the point where it all began.