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From the Wall Street Journal.

I don't totally agree with it, but it makes an interesting read!


Of Burj and Babel

Building prosperity on foundations of sand.


The Burj Dubai tower officially opened yesterday, six years after construction began on the $4.1 billion, half-mile-high skyscraper. Conceived as a monument to the Arab city-state's economic ambitions, the Burj today looks more like a modern-day Tower of Babel. Dubai has been wracked by a debt crisis, and the building stands mostly empty and unwanted by the international tenants for whom it was supposedly built.

But then, the main argument for these monuments has never been purely economic. In early 20th-century New York, one tycoon after another vied to build the world's tallest building, adding their marks to Manhattan's iconic skyline. Both General Motors and Chrysler in their day saw fit to build testaments to their economic might in the form of tall towers. Later on, the gods of vanity shifted to the Far East, where Malaysia's Petronas Towers and more recently Taiwan's Taipei 101 vied to be the world's tallest. Today a half-dozen Asian skyscrapers put Chicago's Sears Tower (now the Willis Tower) in the shade.

As for Dubai, the Burj is merely the most recent bauble in a quest for excess that includes the world's largest man-made islands, indoor shopping mall and indoor ski resort. It even boasts the world's heaviest gold ring, weighing in at something like 62 kilos. The economic theory behind all this, we suppose, is that being the land of superlatives confers a comparative advantage to a place of otherwise few charms and little human capital—though we do wonder who proposes to wear that ring.

If the past century has taught us anything, it's that there will always be another, bigger building built somewhere, and Dubai cannot hope to keep up indefinitely. By contrast, in cities such as Houston and Hong Kong the skylines are not the cause of their economic prosperity, but merely one visible manifestation of it. That's a prosperity that has been built over the years on the basis of those old reliables: economic freedom, the rule of law, hard work and sound management. Without these, nations and cities alike build on nothing but foundations of sand.


http://online.wsj.com/article/SB1000142 ... st_Popular

The information in the article is correct from the ground up.

In all ages, the tallest towers were built by cities (and individuals) with wealth obtained from economic might, as described in the above article. Not the other way round.
The Dubai Emirati's were running ahead of themselves in total frenzy with the world's first synchronized bull market in all asset classes other than the US dollar (unique event in world history).

Study financial history a bit and you'll agree to the fullest.

RobbyG wrote:The information in the article is correct from the ground up.

In all ages, the tallest towers were built by cities (and individuals) with wealth obtained from economic might, as described in the above article. Not the other way round.
The Dubai Emirati's were running ahead of themselves in total frenzy with the world's first synchronized bull market in all asset classes other than the US dollar (unique event in world history).

Study financial history a bit and you'll agree to the fullest.

I didn’t mean I totally reject the article. I meant I don’t agree with everything in it!

I do, however, agree with its general premise that the Burj was not built for economic reasons. Rather, it was built to satisfy a certain fixation to be world famous…, to be No. 1….., to have the highest, the biggest, and the tallest of everything!

Having the tallest structure on earth certainly goes a long way to satisfy that desire for grandiosity!

On the other hand, suggesting that Dubai will sink in the sand because its economy is fragile, with no sustainable growth, is a bit of a stretch!!!

O wait, you mean this line:

That's a prosperity that has been built over the years on the basis of those old reliables: economic freedom, the rule of law, hard work and sound management. Without these, nations and cities alike build on nothing but foundations of sand.

I guess you understood this wrongly. It says that without the old reliables (economic freedom, rule of law, hard work and sound management), nations and cities alike are not based on a century proven economic foundation, but nothing more than, literally, sand (and promises).

Dubai has no real wealth or a proven economic prosperity for decades in a row. They had a vision and it failed. Well, it was bailed out by Abu Dhabi, actually.

Get it?