from Follow the Money

All great things have to end

August 4, 2009

Blog Post

This will be my last blog post, at least for the foreseeable future.

I have accepted a new job, one that will require a certain level of discretion. I am excited by its challenges: ‘Balanced and sustainable” growth is something that I believe in. But suspending this blog is still hard.

I started blogging almost five years ago, back when blogging felt new and the barriers to entry were much lower. I was also lucky: first Nouriel Roubini and RGE and then the CFR were willing to pay me to, at least in part, write a niche blog on global imbalances and global capital flows. The CFR in general – and Richard Haass and Sebastian Mallaby in particular – took a risk (a calculated risk?) that I could maintain a blog with open comments that could live up to the standards of the Council on Foreign Relations.

I started writing a blog almost by default. There wasn’t an obvious source of demand for the kind of work that I wanted to do. My interests were too grounded in current events to fit well with academia, as I neither am a true economist nor a true political scientist. And I was too interested in policy issues to match, consistently, the interests of the market -- especially as I am a bit better at seeing risks than opportunities. No private bank keeps a specialist on the TIC data on their payroll.

Plus writing a blog gave me the freedom to write what I wanted when I wanted – and on occasion to work from where I wanted to work.

Over time, I devoted more time to the blog and less to more academic publications than I should have. Blog posts “decay” faster than academic papers. At the same time, all my short-term incentives worked the other way: this blog’s traffic was never was all that high, but it still attracted more readers in an average week than have bought the book I wrote together with Dr. Roubini – and more readers than downloaded the paper I wrote exploring the strategic consequences of relying on foreign governments for financing.

Moreover, there is no other way that my work would have come to the attention of a Nobel Laureate in economics, Berkeley’s economics department (or at least parts of it), a tenured professor of political science, the World Bank’s Beijing office, parts of Deutsche Bank’s research group and the economic quants over at Econbrowser. Or, among many others, an experienced bond market hand, a London-based currency trader, a Beijing-based emerging markets guru, an informed critic of the financial sector and a former professional Fedwatcher turned amateur Fedwatcher.* And a host of financial journalists around the world. The ability to try to hash out, in real time, crucial questions with true experts is the great advantage of the web.

This blog also had the unexpected virtue of making my work accessible to my parents, and convincing them – scientists both – that I did some real work, at least on occasion.**

A few commentators here have been around for a long-time; you will be missed. The comments section even helped to spawn a few blogs. And I suspect that I may have been among the first to recognize that Felix Salmon would make an even better blogger than journalist.

Fundamentally this blog was about an issue – the United States’ trade deficit, the offsetting trade surpluses in other parts of the world and the capital flows that made this sustained “imbalance” possible. Most of my early blog posts argued, in one way or another, that taking on external debt to finance a housing and consumption boom wasn’t the best of ideas. Even if (or especially if) the deficit was financed by governments rather than private markets.

I always intended to write extensively about the world’s emerging markets. I never anticipated that I would end up writing most frequently about an emerging economy that I hardly knew when I first started writing this blog: China. Back in 2004, I was an expert on sovereign debt, not sovereign wealth. But some stories seize you. And China’s rise as a global creditor was just that story. I never thought China’s government would ever add close to $800 billion to its foreign assets over four quarters -- accumulate close to $2,500 billion in foreign assets. China has stretched all definitions of the possible. There is – understandably – an enormous amount of interest in the consequences of a world where China is the world’s key creditor country; that, more than anything, seemed to drive this blog’s traffic.

I hope I did not stray too far from my initial vision – which was to write a blog that positioned the United States’ economy squarely in the global economy. Yet an international focus didn’t imply cheer-leading for all aspects of the contemporary global financial system. I never quite accepted that a world where the governments of poor countries finance some of the world’s wealthiest consumers really made all that much sense.

Above all, thanks to all who visited regularly, left comments, sent emails, linked here, recommended this blog or called me up to discuss something that they read here – and to those who helped find data, helped prepare graphs*** and filled in when I took a bit of time off. You all combined to make leaving this electronic space hard.

*I never managed to link to John Hempton or Antonia Fatas and Ilian Mihov– to name just two examples -- quite as much as I intended. Hempton’s post on how banks fund current account deficits is a classic. And if I had kept blogging, I suspect I would have ended up linking to the IMF’s new blog rather frequently.

** It also confirmed my mother’s sense that I cannot spell.

*** The Council on Foreign Relations Center for Geoeconomic Studies will continue to track some of the variables that I have been following; bookmark “Geographics.”