Peter Schiff just lost the Republican nod for US Senator in Connecticut. If someone ever embodied the antithesis to the nation’s current approach, it is Schiff.

Here President Clinton discusses the crux of the G20 meetings, whether the US is headed toward a double dip recession, and whether governments should be pursuing austerity measures. He also lets us know that you “can’t get milk out of a turnip.” In so many ways, it’s hard not to miss Clinton. I haven’t heard a President make this much sense about the economy since, well, the late 90s. While I don’t agree with it all, it’s a refreshingly slight disagreement, in comparison. Keep in mind that leaders of the G20 nations agreed this weekend to cut their deficits in half by 2013.

The current financial crisis did not happen because investment companies were dealing in derivative products that no one understood (the simplistic general Democratic explanation), nor was it a result of an abnormal growth in homeownership rates in the United States (the simplistic general Republican explanation). The real reason for our current crisis is that our economic leaders allowed Fannie Mae and Freddie Mac to mismanage mortgage rates and thus mismanage a substantial portion of our “debt economy” for more than twenty-five years.

The Chinese have announced they will allow their currency off the leash. While not a floating policy quite yet, the yuan will edge up over time. Pegged to the dollar since July 2008, the yuan has remained at about 6.83 per dollar. Some economists have described the yuan as 20% undervalued (although when you search to source this, it’s mostly the IMF and politicians that make this claim). This new found flexibility is a step toward what Washington policymakers have been pushing hard for. The conventional wisdom is that an undervalued yuan hurts US exports to China’s growing consumer base. But Donald Trump made an interesting point regarding China, and I quote:

China Watch is brought to you by the belief that the Chinese stand to gain the most out of the global economic recession/depression, and the United States’ subsequent response to the financial crisis and sinking economy.

We haven’t seen inflation on the whole during the financial rescue efforts, despite the Federal Reserve’s easy money policies. If you wanted to cherry pick certain assets, the argument could be made that $140/barrel oil, during a recession, coinciding with a dump of liquidity on the economy, could be related. Global oil transactions are denominated in US dollars. It is hard to imagine any other factor being solely responsible for such a historic, and counterintuitive, rise in petroleum during a recession.

Economic forecasts are a funny thing. If they attempt to project anything beyond the short-run (one year), be very skeptical. But short-run forecasts are not iron-clad either. I have a great time on this site making fun of economists and their predictions. Guessing what the intricate convergence of millions, if not billions, of different economic agents and their decisions will be, is kind of an exercise in futility. So if I were to predict what crude oil will do in 2010, I’d give you some markers to help you make your own decision long before I took a specific barrel price and defended the position.

Why can multi-national big business provide such value (not only lower prices, but improved availability of products, convenience, and, at times, quality)? In large part, it is a phenomenon called economies of scale. The larger a firm’s production volume is, the less input costs allocated to each individual unit. The local food model does not transport its food on semi’s or jetliners. Already, you have less space to store transported food. Put another way, each individual food item bears a greater cost of the fuel. Imagine a 1974 Chevy truck bed compared to a semi stuffed to the rafters. Now imagine organic strawberries in each. Which supply chain model do you think will deliver the lowest carbon emission per strawberry? Not to mention cost per unit. Here is a study debunking the food mile myth, with Kenyan green beans transported to the United Kingdom.

Steven Levitt and Stephen Dubner, authors of Superfreakonomics, discuss cheap solutions to global warming thatdon’t involve Cap and Trade. Ahh, a sensible solution, how blasphemous!

I’m about to tell you why non-ideological economists get so frustrated with global warming zealots (brace yourself): frankly, there are more pressing issues facing the world. I know, in the wake of NBC’s “Green Week” and Prius’ taking over the streets, it’s hard to believe. This isn’t to say that environmental preservation is not on the short list of world concerns. It is. And this isn’t to say that environmentalism is not a worthy cause. Again, it is. Unfortunately, some of the brightest minds in the world, who look at things from a perspective of costs and benefits, do not see the need for public tax dollars to be funneled vigorously into combating climate change. Just ask the Copenhagen Consensus.