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March 2007

links for 2007-03-31

March 30, 2007 at 20:25 | | Comments (0)

Karen Tumulty Delivers!

She writes:

By Popular Demand - Swampland - TIME: After so many commenters last week smacked me for failing to recognize and respect their insatiable demand for coverage of health care policy (you know who you are, Jake Gittes and Brad DeLong), I thought I should provide a link to my story in this week's dead-tree TIME. There will be a quiz.

http://www.time.com/time/magazine/article/0,9171,1604943,00.html

March 30, 2007 at 11:08 in #economics, #politicaleconomy, #politics, Economics: Health | | Comments (25)

Morale Is High!

The sun rises at 7:11 AM this morning--which means that I have enough time to see the sunrise from the top of the ridge and then get back down in time to get the kids to school. It's much better to see the sunrise than not to see the runrise. The past three weeks, since the early start of Daylight Saving Time, have not been good for morale.

America's Silliest DogTM agrees. She commences vertical leaping as soon as the first bead of real sun appears.

March 30, 2007 at 10:13 | | Comments (12)

Human vs. Bureaucracy!

The University writes:

Subject: Ethics briefing for all faculty and staff
Date: Thu, March 22, 2007 6:00 pm
From: XXXX
Subject: Ethics briefing for all faculty and staff

In May 2005, the Regents adopted a Statement of Ethical Values and Standards of Ethical Conduct that describe our values and responsibilities as University employees. As we go about our work, whether we are teaching, engaging in research, or carrying out administrative and management tasks, we must share a common understanding of these ethical values and standards.

Beginning on April 3, all UC Berkeley employees will be required to complete an ethics briefing designed to raise awareness and stimulate thoughtful discussion about ethical conduct. The briefing, which takes about 30 minutes to complete on line, includes interactive scenarios that will give you the opportunity to consider potential ethical challenges that may arise in the course of your work.

Although Vice Chancellors and other Cabinet members will receive completion reports, they will not see any person's individual responses.

You will receive an email message from [email protected] with a link that will take you directly to the online briefing. For employees without access to computers, we will arrange classroom presentations; schedules for these presentations will be announced in mid-April.

Please complete the briefing before Friday, May 18, when the spring semester ends.

You can find more information about ethics and integrity at the following sites:

Senior UC administrators, including members of the Cabinet here at Berkeley, have already completed the ethics briefing. Although UC Berkeley has a strong record of high ethical standards, we believe that thinking about the issues that can arise in our daily work can only increase our commitment to maintaining those standards in the service of our students, each other, and the public...

Which raises a question, which I ask:

So let me get this straight: Is what is really going on that California Hall and UCOP hide the deals they are giving various high administrators and others from the Regents, and in response we all have to spend 30 minutes on online ethics training of dubious value?

Is this what's really going on?

Isn't this somewhat unethical?

Which gets a response:

When the law school dean crawled into bed with a student, all the deans had to take a class in "how to avoid sleeping with students."

Note sure what happened to those who flunked.

March 30, 2007 at 10:09 | | Comments (1)

Journamalism Watch: Time Magazine Edition

The Daily Howler on Time editor Stengel:

Daily Howler: Stengel's remarks last Sunday didn't make much sense, as everyone has noticed--including Ana Marie Cox, who deserves credit for speaking up. (We'd love to start praising her work. By the way, has Stengel SHOUTED AT HER IN A VERY LOUD VOICE because of her transgression?) But Stengel's remarks last Sunday fit a very common pattern. Last Sunday, Stengel was a mainstream journalist looking for ways to promote an RNC line. He couldn't recite the script in its dumbest form. So he came as close as he could. But then, everyone played along last Sunday. Incredibly, all five pundits aped Matthews' line, saying the Dems were just playing politics. No one offered an obvious thought: Democrats should be probing this conduct. It's the way our system works...

And Radar Online:

Fresh Intelligence : Radar Online: In just the last week, new documents emerged contradicting Alberto Gonzales's account... [a] Department of Justice staffer announced her intent to plead the Fifth... Justice officials admitted that it had misled Congress.... Yet the new issue of Time, on stands today, contains precisely zero stories on the scandal. Nothing. As though it's not happening. You could chalk it up to atrocious news judgment, or laziness perhaps, but then there's the bizarre hostility that Time's editors have expressed regarding coverage of the firings. Back in January, Washington bureau chief Jay Carney dismissed them as run-of-the-mill "partisan hackery" and suggested that Josh Marshall, the proprietor of Talking Points Memo, was peddling conspiracy theories in pushing the story. And just last weekend, Time's tight-faced managing editor, Richard Stengel, bemoaned the Democrats' insistence on investigating the firings on The Chris Matthews Show: "I am so uninterested in the Democrats wanting Karl Rove, because it is so bad for them. Because it shows business as usual, tit for tat, vengeance. That's not what voters want to see.... It's small-bore politics."...

Salon's Glenn Greenwald produced recent polls demonstrating that no less than 72 percent of the public is more interested than Stengel in the ongoing congressional investigations into the Justice Department.

You'd think that, given the flak Stengel and Carney have taken, they'd at least own up to their oversight in the new issue...

March 30, 2007 at 09:19 in #journamalism | | Comments (1)

links for 2007-03-30

March 29, 2007 at 20:27 | | Comments (1)

Potential Reasons for Worrying About Outsourcing/Offshoring

Alan Blinder is very worried about outsourcing and offshoring http://delong.typepad.com/sdj/2007/03/alan_blinder_on.html. And I am not quite sure why.

You see, trade balances. What we buy equals what we sell, in value. What we buy and what we sell can be goods, services, or property, but it balances. If we have a comparative advantage in nothing--and export nothing--then we necessarily have a comparative disadvantage in nothing--and import nothing. Trade is thus an opportunity for us to move workers out of occupations where we are least and into occupations where we are most productive.

This doesn't mean we shouldn't worry about trade. But it does mean that the right reasons to worry about trade are relatively specific and relatively small in number.

I see four reasons:

  • First, we can worry about trade because we can worry about what trade does to our income distribution: perhaps we would be happier with our income distribution and assess ourselves as having a higher level of social welfare if we made some of the things we import at home and didn't make some of the things we export--even though each of our imports and exports makes narrow profit-and-loss getting-and-spending sense.
  • Second, we can worry about trade because we worry about what trade does to external benefits from productive activity that boost growth: perhaps we would grow faster and become richer if we made some of the things we import at home and didn't make some of the things we export--because making some things produces increased worker skills and technological knowledge through unpriced, un-accounted for channels.
  • Third, we can worry about trade to the extent that it amplifies the ability of our dysfunctional government to dysfunction: the ability to borrow from abroad to cover deficits may diminish the pressure on feckless politicians and their supporters to deal responsibly with fiscal policy.
  • Fourth, we can agree that increased trade is good for the nation, yet believe that government has to play an active and aggressive role in providing social insurance and a measure of compensation to those ground exceedingly fine by the mills of globalization--and outsourcing/offshoring are likely to cause bigger changes and more disruption than anything we have seen to date.

It is not clear which of these reasons is behind Alan Blinder's current worries on outsourcing and offshoring. My worries about outsourcing are mostly (4). I worry somewhat about (2). But (1) and (3) are, I think, not on the agenda. Global outsourcing seems to me at least as likely to improve as to worsen the distribution of income. And the marginal amount of governmental fecklessness produced by access to global capital markets seems to me to be small.

But I don't know what worries Alan most. I should ask him for clarification...

UPDATE: Alan writes: of course it's number 4!

March 29, 2007 at 16:53 in #economicgrowth, #economics, #politicaleconomy, #politics, Web/Tech | | Comments (56)

Politico Plagued by Rookie Mistakes!

These people--Mike Allen, Jim VandeHei, and Jonathan Martin--are supposed to be trained professional political observers. Yet they write:

Republicans Fear 2008 Meltdown - Politico.com: Even in a neutral political environment, 2008 would be a very tough year for Republicans, especially in the Senate. Simply put, the Republicans are defending more seats than the Democrats -- 21 Republican seats are up this cycle, while only 12 Democrats plan to seek reelection. So the playing field automatically is in the Democrats' favor...

By my count, 8 of those 21 Republican incumbents are from states that went for Bush by more than 20% in 2004; 14 are from states that went for Bush by more than 10% in 2004. By contrast, only 2 of those 12 Democratic incumbents come from states that went for Kerry by more than 20% in 2004; only 3 from states that went to Kerry by more than 10%; while 4 of the Democrats come from states that went for Bush by more than 10%.

In a neutral political environment, those 14 would be hard for the Republicans to lose.

In as neutral political environment, those 3 would be hard for the Democrats to keep.

In a neutral political environment, you might think that the more partisan states would split 18-3 for the Republicans in the Senate, leaving 12 battleground states.

In a neutral political environment, you would think that the battlegound states would split 6-6, making a total of 24-9 for the Republicans--a shift of 3 in the Republicans' favor from the current situation.

In a neutral political environment, you would expect the Senate to swing toward the Republicans in 2008.

Now I am not a trained professional political observer. A trained professional political observer might say that the prediction for a neutral political environment would not be 24-9 but would be 21-12--that Max Baucus and Tim Johnon are skilled politicians who have won in their respective states in the past in spite of the large presidential vote edge for Bush, and that the right thing to expect in a neutral political environment is that they will hold their seats (and also that the Democrats would hold Mary Landrieu's seat in Louisiana). I don't know.

I do know that "neutral political environment... Republicans are defending more seats... playing field automatically is in the Democrats' favor" is a gross insult to the intelligence of the Politico's readers.

UPDATE: Yep. Not only can't they do a simple swing count, but they have gotten under the covers with Matt Drudge. They're toast. Here's Glenn Greenwald:

Glenn Greenwald - Salon:

Dear Mr. Greenwald,

I'm writing as someone who appreciates your writing and viewpoints. Your previous discussions on web traffic in regards to the Victory Caucus I felt were quite good. Regarding your current post in which you send questions to Politico, I feel I might be of some service to you. In my current occupation, I am a web metrics analyst. Through my company I have access to many reporting tools. One of them is Hitwise (you can check them out at www.hitwise.com.) One of your questions [to Mike Allen] I can easily answer:

(3) Do you know what percentage of The Politico's overall traffic is accounted for by Drudge links?

Drudge provides generally about 65% of all of the politico's traffic. The next highest website providing traffic to Politico is Google at about 3%. (See the attached file.)

It's rankings in the Politics grouping in Hitwise is very spiky, varying between number 60 and the number 4 spot in a jagged saw-tooth pattern (indicative of no natural audience). The spikes to high rankings coincide with Drudge traffic (see the daily spreadsheet.) Additionally, while they rank highly on days when Drudge links (and lowly on days when they Drudge does not), their metrics for pageviews are quite low (again, indicating no natural audience.)

If I can be of any assistance in this or further explorations of web metrics, please feel free to contact me.

Would like to help in any way.

[name withheld]

March 29, 2007 at 15:21 in #journamalism, Web/Tech | | Comments (18)

Note to Self: On Konstantin Magin's Social Security Privatization Project

Konstantin Magin strongly believes that the existence of the equity premium implies that large chunks of the Social Security system should be invested in equities in order that the poorer half of America's population can reap some of the extraordinary long run returns that follow equity ownership. (I agree.) He goes further than I do, however, and believes, for political economy reasons, that such investments should be made through the form of regulated, individual, private accounts.

The counterargument is that individual, private accounts are too risky to be a proper vehicle for the Social Security tranche of people's retirement savings. What if people misinvest--churn their accounts or fail to diversify or take on inappropriate systematic risks? Magin grants this point--such accounts would have to be regulated, and invested in a properly-diversified buy-and-hold portfolio. But there is a second bowstring to the counterargument: even if private accounts are invested in a diversified buy-and-hold portfolio, there is still the risk that the stock market will tank over the next generation--and that risk is inappropriate for the Social Security tranche of people's retirement portfolio.

Konstantin Magin's current project is to try to quantify this risk. How big a risk is a 35 year old running by placing the money he or she wishes to use to fund consumption at 75 in a unit beta diversified buy-and-hold stock market portfolio? The way that he quantitatively evaluates this risk is by running the obvious thought experiment: Suppose that the investor wants to insure him or herself against real declines in the value of the portfolio--wants to guarantee a real return of at least zero--by purchasing a put option on the portfolio that expires in 40 years with a strike price of the porfolio's current real value. What would be the value today of such a put option as a fraction of the value of today's initial portfolio investment?

The approach Konstantin Magin has taken has been to use Black-Scholes and the historical distribution of stock returns plus an assumed 1% or 2%$ per year riskless rate to value the cost of such a put: what would an insurance company that was going to then construct a dynamic hedge charge an investor who sought to insure his or her portfolio? There is, however, a second approach that he has started to explore: what would be the most that an investor with a specified coefficient of relative risk aversion would be willing to pay for such a put option?

The answer to Konstantin Magin's first question was that the cost of the put was small: about a nickel or a dime for each dollar invested. I think the answer to his second question is going to be much smaller for reasonable value of the coefficient of relative risk aversion--less than, say, five. I think this because the insurance company making the dynamic hedge is implicitly buying insurance from a market whose representative agent has a very high risk aversion--on the order of twenty or so. And so the willingness to pay for the put of an agent with a reasonable coefficient of relative risk aversion has to be a lot less than the cost someone would charge to write the put and then dynamically hedge it, which is what the value as calculated by Black-Scholes really is.

Here's a spreadsheet to do some preliminary finger exercises on this. The answers are--for historical returns and permanent components of variances--indeed smaller: mills rather than cents:

http://spreadsheets.google.com/pub?key=p_zylRhg4tozhBJyXhfclKw&output=xls
http://spreadsheets.google.com/ccc?key=p_zylRhg4tozhBJyXhfclKw&hl=en_US

This document at:

http://delong.typepad.com/sdj/2007/03/note_to_self_on.html

March 29, 2007 at 11:45 in #economics | | Comments (5)

Ah. Max Frankel Has a History of Flacking for the Bushies...

A commenter at Firedoglake points to past acts of journamalism from Max Frankel:

joejoejoe says: Max Frankel wrote a highly cynical review of Wesley Clark's Winning Modern Wars in Oct. 2003. Read this excerpt and tell me if you think Frankel isn't firmly in the neocon camp with Miller and Gordon:

[Gen. Clark's] deft review of the battlefield tactics that won Baghdad in less than a month is merely the preface to a bitter, global indictment of George W. Bush. The president and his administration are condemned for recklessly squandering a brilliant military performance on the wrong war at the worst possible time, diverting resources and talent from the pursuit of Al Qaeda, neglecting urgent domestic needs and dissipating the post-9/11 sympathy and support of most of the world.

[...]

As portrayed by Clark, the attack on Saddam Hussein -- without evidence to link him to Al Qaeda -- was not only wrong but deeply cynical. It bespoke a cold war mind-set of assigning terrorists a state sponsor, a "face" that could be more easily attacked. "It was almost certain to be successful. It emphasized U.S. military strengths and built on a decade of preparation for a refight of the gulf war."

The benefit of toppling Hussein is only faintly acknowledged: "All else being equal the region and the Iraqi people were all better off with Saddam gone. But the U.S. actions against old adversaries like Saddam have costs and consequences that may still leave us far short of our objectives of winning the war on terror -- or, in themselves, may actually detract from our larger efforts." (Don't be fooled by those conditional "mays"; the general knows how to protect a rhetorical flank.)

Frankel may have been a good editor once but he sounds like somebody who used to walk 5 miles to school uphill both ways in this piece. And he misses the clear point that deep background gossip from US officials regarding spying on the Soviets is not the same as outing an American spy. That's a basic point that Frankel fails to grasp.

March 29, 2007 at 10:32 in #journamalism | | Comments (2)

Why Oh Why Are We Ruled by These Liars?

Ah. The Bush Administration Republican slime machine slimes conservative Republicans:

The Swiftboating of David Iglesias begins: The Swiftboating of David Iglesias begins: New Mexico's former U.S. Attorney David Iglesias has been one of the more hard-to-explain firings in the administration's prosecutor purge. Everything about his record suggests he'd be the last federal prosecutor any sane administration would want to get rid of.

As recently as 2004, he was up for a promotion. In 2005, former Deputy Attorney General James Comey called Iglesias "one of our finest." Once the scandal broke, Justice Department officials tried to craft after-the-fact talking points to explain why Iglesias had to be removed from office -- and they had trouble coming up with anything. Then, over the weekend, Iglesias had a sterling performance on Meet the Press, making his dismissal appear even worse.... [T]he Bush gang wanted him to prosecute more Democrats and Iglesias stuck to the belief that he'd bring cases when the evidence warranted it. But what can the Bush gang and its allies do now? What they always do -- smear those who get in the way....

Here's a new attack ad playing on New Mexico radio stations.... Digby summarized this nicely:

This was put together by a group called New Mexicans For Honest Courts. (You can hear the ad at the web site.) They appear to have been around since 2004 and look to be one of those rightwing groups that have sprung up in states all over the country to protest "activist judges." It'ss hard to know where they got the money for this ad since it looks like they didn't file a PAC report since July of 2006. Maybe some "angel" just came to town.

The message is clear. If you speak out against the family, you'll get whacked. I can't say I'm surprised....

Might this backfire? Iglesias is a conservative Republican, with credibility and the facts on his side...

Impeach Alberto Gonzales. Impeach Richard Cheney. Impeach George W. Bush. Do it now.

March 29, 2007 at 10:26 | | Comments (7)

Dani Rodrik Says the Free Traders Are the Big Threat to Free Trade

His argument is somewhat counterintuitive. But when your mission is to make space for social democracy in a neoliberal world, you do what you can:

FT.com / Home UK / UK - The cheerleaders' threat to global trade: Which is the greatest threat to globalisation: the protesters on the streets every time the International Monetary Fund or the World Trade Organisation meets, or globalisation's cheerleaders, who push for continued market opening while denying that the troubles surrounding globalisation are rooted in the policies they advocate? A good case can be made that the latter camp presents the greater menace. Anti-globalisers are marginalised. But cheerleaders in Washington, London and the elite universities of north America and Europe shape the intellectual climate. If they get their way, they are more likely to put globalisation at risk than the protesters they condemn for ignorance of sound economics.

That is because the greatest obstacle to sustaining a healthy, globalised economy is no longer insufficient openness. Markets are freer from government interference than they have ever been.... [N]o country's growth prospects are significantly constrained by a lack of openness in the international economy. Even if the Doha trade round fails, poor countries will have enough access to rich country markets to achieve what countries such as China, Vietnam and India have been able to do.

Closed markets may have been a fundamental problem during the 1950s and 1960s; it is hard to believe they still are. The greatest risk to globalisation is elsewhere. It lies in the prospect that national governments' room for manoeuvre will shrink to such levels that they will be unable to deliver the policies that their electorates want and need in order to buy into the global economy.

Globalisation's soft underbelly is the imbalance between the national scope of governments and the global nature of markets. A healthy economic system necessitates a delicate compromise between these two. Go too much in one direction and you have protectionism and autarky. Go too much in the other and you have an unstable world economy with little social and political support from those it is supposed to help. If there is one lesson from the collapse of the 19th century version of globalisation, it is that we cannot leave national governments powerless to respond to their citizens. The genius of the Bretton Woods system, which lasted for about three decades after the second world war, was that it achieved such a compromise. Some of the most egregious restrictions on trade flows were removed, while allowing governments freedom to run independent macroeconomic policies and erect their own versions of the welfare state. Developing countries were free to pursue their own growth strategies with limited external restraint. The world economy prospered like never before.

But what about China and India, which have taken off in the pastquarter-century? Are they not proof that poor nations need the current variant of globalisation instead of the Bretton Woods variant?Actually, no. What is striking about China, India and a few other Asian countries that have done well recently is that they have played the globalisation game by the Bretton Woods rulebook. These countries did not significantly liberalise their import regimes until well after their economies had taken off; they continue to restrict short-term capital inflows. They have used industrial policies - many banned by the WTO - to restructure their economies and enable them to better take advantage of world markets.

Rich and poor nations need breathing space for different reasons. Rich countries need it so they can revive the social compacts that underpinned the success of Bretton Woods. They need flexibility to interfere in trade when trade conflicts with deeply held values at home - as, for example, with child labour or health and safety concerns - or severely weakens the bargaining power of workers. Poor nations need room to engage in exchange rate and industrial policies that will diversify and restructure their economies, without which their ability to benefit from globalisation is circumscribed.

It is time, then, to consider a new bargain. When rich and poor nations come together to negotiate the rules of the game they should stop thinking in terms of exchanging market access: "I will open my markets in x if you open yours in y." They should consider instead exchanging policy space: "I will allow you to protect your national social compact if you allow me to engage in development strategies that conflict with WTO and International Monetary Fund rules of good behaviour"...

March 28, 2007 at 20:37 in #economicgrowth, #economics, #politicaleconomy, #politics | | Comments (34)

Alan Blinder on "Offshoring"

David Wessel and Bob Davis write about Alan Blinder, who has very smart things to see about "outsourcing":

Pain From Free Trade Spurs Second Thoughts - WSJ.com: For decades, Alan S. Blinder -- Princeton University economist, former Federal Reserve Board vice chairman and perennial adviser to Democratic presidential candidates -- argued, along with most economists, that free trade enriches the U.S. and its trading partners, despite the harm it does to some workers. "Like 99% of economists since the days of Adam Smith, I am a free trader down to my toes," he wrote back in 2001.

Politicians heeded this advice and, with occasional dissents, steadily dismantled barriers to trade. Yet today Mr. Blinder has changed his message -- helping lead a growing band of economists and policy makers who say the downsides of trade in today's economy are deeper than they once realized. Mr. Blinder... remains an implacable opponent of tariffs and trade barriers. But now he is saying loudly that a new industrial revolution -- communication technology that allows services to be delivered electronically from afar -- will put as many as 40 million American jobs at risk of being shipped out of the country in the next decade or two. That's more than double the total of workers employed in manufacturing today. The job insecurity those workers face today is "only the tip of a very big iceberg," Mr. Blinder says.

The critique comes as public skepticism about allowing an unfettered flow of goods, services, people and money across borders is intensifying.... Some trade critics are bothered by the disappointing performance of Latin America since it slashed tariffs in the 1980s and 1990s while more protectionist China and Southeast Asia sped ahead. Others are struck by the widening gap between economic winners and losers around the globe. The rethinking on trade issues is the most significant since the early 1990s....

Some critics are going public with reservations they've long harbored quietly. Nobel laureate Paul Samuelson, whose textbook taught generations, damns "economists' over-simple complacencies about globalization" and says rich-country workers aren't always winners from trade. He made that point in a 2004 essay that stunned colleagues. Lawrence Summers, a cheerleader for trade expansion as Clinton Treasury secretary, says people who argue globalization is inevitable and retraining is enough to help displaced workers offer "pretty thin gruel" to the anxious global middle class.

Others are finding the debate moving closer to positions they've had for years. Ralph Gomory, International Business Machines Corp.'s former chief scientist who now heads the Alfred P. Sloan Foundation, says that changing technology and the rise of China and India could make the U.S. an also-ran if it loses many of its important industries. Harvard economist Dani Rodrik says global trade negotiations should focus on erecting new barriers against globalization, not lowering them, to help poor nations build domestic industries and give rich nations more time to retrain workers.

Mr. Blinder's job-loss estimates in particular are electrifying Democratic candidates searching for ways to address angst about trade. "Alan, because of his stature, provided a degree of legitimacy to what many of us had come to feel anecdotally -- that the anxiety over outsourcing and offshoring was a far larger phenomenon than traditional economic analysis was showing," says Gene Sperling, an adviser to President Clinton and, now, to Hillary Clinton. Her rival, Barack Obama, spent an hour with Mr. Blinder earlier in this year....

His critique puts Mr. Blinder in a minority among economists, most of whom emphasize the enormous gains from trade. "He's dead wrong," says Columbia University economist Jagdish Bhagwati, who will debate Mr. Blinder at Harvard in May over his assertions about the magnitude of job losses from trade. Mr. Bhagwati says that in highly skilled fields such as medicine, law and accounting, "If we do a real balance sheet, I have no doubt we're creating far more jobs than we're losing."

Mr. Blinder says that misses his point. The original Industrial Revolution, the move from farm to factory, unquestionably boosted living standards, but triggered an enormous change in "how and where people lived, how they educated their children, the organization of businesses, the form and practices of governments." He says today's trickle of jobs overseas, where they are tethered to the U.S. by fiber-optic cables, is the beginning of a change of similar dimensions, and American society needs similarly far-reaching changes to cope. "I'm trying to convince a bunch of economists who are deeply skeptical and hard to convince," he says....

Mr. Blinder says he agreed with Mr. Mankiw's point that the economics of trade are the same however imports are delivered. But he'd begun to wonder if the technology that allowed English-speaking workers in India to do the jobs of American workers at lower wages was "a good thing" for many Americans. At a Princeton dinner, a Wall Street executive told Mr. Blinder how pleased her company was with the securities analysts it had hired in India. From New York Times' columnist Thomas Friedman's 2005 book, "The World is Flat," he found anecdotes about competition to U.S. workers "in walks of life I didn't know about."

Mr. Blinder began to muse about this in public. At a Council on Foreign Relations forum in January 2005 he called "offshoring," or the exporting of U.S. jobs, "the big issue for the next generation of Americans." Eight months later on Capitol Hill, he warned that "tens of millions of additional American workers will start to experience an element of job insecurity that has heretofore been reserved for manufacturing workers."

At the urging of former Clinton Treasury Secretary Robert Rubin, Mr. Blinder wrote an essay, "Offshoring: The Next Industrial Revolution?" published last year in Foreign Affairs. "The old assumption that if you cannot put it in a box, you cannot trade it is hopelessly obsolete," he wrote. "The cheap and easy flow of information around the globe...will require vast and unsettling adjustments in the way Americans and residents of other developed countries work, live and educate their children."... In that paper, he made a "guesstimate" that between 42 million and 56 million jobs were "potentially offshorable." Since then he has been refining those estimates, by painstakingly ranking 817 occupations, as described by the Bureau of Labor Statistics, to identify how likely each is to go overseas. From that, he derives his latest estimate that between 30 million and 40 million jobs are vulnerable.

He says the most important divide is not, as commonly argued, between jobs that require a lot of education and those that don't. It's not simply that skilled jobs stay in the US and lesser-skilled jobs go to India or China. The important distinction is between services that must be done in the U.S. and those that can -- or will someday -- be delivered electronically with little degradation in quality. The more personal work of divorce lawyers isn't likely to go overseas, for instance, while some of the work of tax lawyers could be. Civil engineers, who have to be on site, could be in great demand in the U.S.; computer engineers might not be.

Mr. Blinder's warnings, and his numbers, are now firmly planted in the political debate over trade.... Mr. Blinder says there's an urgent need to retool America's education system so it trains young people for jobs likely to remain in the U.S. Just telling them to go to college to compete in the global economy is insufficient. A college diploma, he warns, "may lose its exalted 'silver bullet' status." It isn't how many years one spends in school that will matter, he says, it's choosing to learn the skills for jobs that cannot easily be delivered electronically from afar....

Mostly he wants to shock politicians, policy makers and other economists into realizing how big a change is coming and what new sectors it will reach. "This is something factory workers have understood for a generation," he says. "It's now coming down on the heads of highly educated, politically vocal people, and they're not going to take it."

March 28, 2007 at 20:36 in #economicgrowth, #economics, #politicaleconomy | | Comments (39)

links for 2007-03-29

March 28, 2007 at 20:22 | | Comments (0)

Tyler Cowen Looks Forward to a Libertarian Utopia, Someday

Tyler Cowen Looks Forward to a Libertarian Utopia, Someday:

Marginal Revolution: When will liberty's day arrive?: Life without socks would be... "undignified," but no one recommends government provision or even sock vouchers. Relative to income, socks are sufficiently cheap. There is some inequality of socks, but it seems that just about everybody -- even the poor -- "has enough." We don't even force people to buy socks for their kids.

Might there come a time when health care and education fall under the same rubric?

Yes, I know that, due to rising labor costs, health care and education might continue to eat up an increasing percentage of national income. But still, can't "rich enough" people make do? Living in Aspen might cost half your income, but if you're a multi-millionaire no one weeps for you.

Of course today's poor aren't rich enough for us to remove government aid. But when will the splendid era of libertarian freedom be possible? Today's poor are much richer than the poor fifty years ago, and the poor of the future are likely to be richer yet. Won't the welfare state, at some point, simply become unnecessary?

Readers, please tell me in the comments when the time will come for dismantling the welfare state. Will you sign your name to a pledge:

"I am a left-winger, but only until 2078"?

More elegant would be:

"I'm a 2096 libertarian."

Social democracy is but a mere transitional strategy.

If this were 1890, what Year of Libertarian Freedom would you have named?

Well, John Maynard Keynes was a 1990 Libertarian, or so he argues in "Economic Possibilities for Our Grandchildren."

March 28, 2007 at 15:27 in #economicgrowth, #economics, #politicaleconomy | | Comments (22)

Emptywheel and Phoenix Woman Have Much Less Patience with Max Frankel than I Do

Emptywheel finds Max Frankel to be at the center of the saddest moment of the Libby trial:

Max Frankel’s Ghost: The saddest moment of the Scooter Libby trial... was when Max Frankel, the last Executive Editor of the NYT to treat the gray lady with the respect she once deserved [talked to]... Robert Bennett, Judy Miller's personal lawyer....

Let me remind you why Bennett was even there. Judy had originally been represented by the NYT's chosen lawyer, Floyd Abrams.... Abrams argued for an absolute reporter's privilege.... Judy realized the First Amendment martyr role no longer served her purposes, so she hired the more pragmatic Robert Bennett to represent her interests, now distinct from those of the NYT....

Frankel, the former Executive Editor of a then-great newspaper said this to Bennett.... "You did a great job for us today."

How could Max Frankel, I wondered, yoke the interests of the NYT and Judy Miller so closely?... The comment made me so sad, that a once-great figure like Frankel would tie his interests so closely to Judy's.... And so it was with great interest and a good deal of trepidation that I read Frankel's story today....

It's a story drawing on Frankel's entire career, salted with anecdotes of powerful men leaking important information to Frankel--JFK, LBJ, Dean Rusk--and drawing on a key brief Frankel wrote about the Pentagon Papers. With the quality of his prose and the mostly nuanced understanding of the complexities of the case, Frankel demonstrates how he earned his reputation, with real reporting.... Yet the argument Frankel offers... is fundamentally dishonest....

Let me start by agreeing with Frankel. The damage to journalism--by this whole sordid affair--has been great.... But I would be very particular about the source of that damage... not just... Fitzgerald's subpoena of journalists... [but] when Robert Novak and Judy Miller and the NYT made themselves willing vehicles of Administration propaganda... the NYT launching a dishonest appeal that–they knew–served to assist someone in the obstruction of justice.

So I guess I'll start there, with a funny detail about Frankel's article. As I said, Frankel seems to have an unusually good understanding about some nuances of this case.... [W]hen Frankel characterizes the crimes Libby committed, he almost never discusses obstruction of justice.... [H]e repeatedly names perjury as the crime at issue, arguing "perjury substitut[ed] for an unreachable, perhaps even nonexistent crime," describing reporters protecting Libby's perjury, and suggesting that Fitzgerald pursued journalists' testimony so he "would at least have a perjury case."... Frankel portrays this crime to be about nothing more than perjury, not a deliberate and successful attempt to [obstruct justice and] prevent Fitzgerald from proving the underlying crime.

Which is why it's so funny--or pathetic, really--how Frankel refers to Judy's involvement. First, let's look at how he describes the Iraq War.

That misfired adventure, and the buyer’s remorse of a press and public that accepted the war’s pretext, lay at the root of Libby’s perjury. For it was Cheney, with Libby’s active help, who had sounded the loudest alarms about Hussein’s “reconstituted” nuclear program, about his stores of chemical and biological weapons and supposed ties to Al Qaeda. When, mere weeks into the war in 2003, no such weapons could be found, it was Cheney and Libby whose reputations and influence were imperiled as much as the president’s.

Remarkable, huh? 3000 American men and women dead, and it's just a little "misfired adventure"? And see what he does with the subjects of this paragraph? There the "press and public" are, with their buyer's remorse, positioned together on one side, with Libby and Cheney, the guilty parties, on the other side. Frankel conveniently lumps the press in with the public, unwilling dupes, but in no way actors that worked with and for Libby and Cheney to sell this war to the American public.

What a fundamental misrepresentation of the press' role in this war! Of how the majority of the population opposed the war, wanted nothing to do with it, until people like Judy Miller and Michael Gordon and Patrick Tyler came along and persuaded the public that this was something they ought to buy. Frankel does, at one point, admit that Judy's pre-war reporting lent "credence to the administration’s wild alarms about Iraqi W.M.D.’s" (he makes no mention of her war reporting). But he separates that from any question of complicity on the part of the press–or the NYT in particular. In fact, in a later discussion, Frankel claims that these poor journalists (and editors) were helpless until someone else came along and offered them a leak to counter those of the Administration.

On the path to war in Iraq, high officials of the Bush administration leaked classified but far from reliable information about W.M.D.’s, then pointed to its publication as “evidence” of its truth. When no W.M.D.’s were found, they used the same flawed secrets to justify their misrepresentations. But reporters could not expose this skullduggery until they obtained contradictory leaks from disheartened intelligence officials....

As if the editors of the NYT don't bear any blame for printing such crap on the front page of the NYT....

Max Frankel wants to describe this as a trial about perjury--a lie about a conversation with Russert--when in fact the trial is about Scooter Libby, with the help of the NYT, hiding the fact that Libby leaked Valerie Wilson's identity to Judy Miller. If Libby did it with the foreknowledge and deliberation Frankel describes, then it was a criminal leak, precisely the thing Patrick Fitzgerald subpoenaed the journalists to find out.

And so the great reporter and last good Executive Editor joins in the NYT's obstruction, its willingness to shill for the Administration, to misrepresent the Administration's crimes. in so doing, he repeats the mistake the NYT made in the first place, when they argued that no one should reveal Libby's name even while they had already revealed it themselves. Frankel uses a cry for press freedom to cover up the NYT's complicity in this case.

You see, Max, it's not that we liberals have lost patience for reporters privilege.... Rather, it comes from a desire to see you exposed. It is time that the NYT stops pretending that it stands on the side of the public, as passive unwilling dupes of this Administration. It is time that the NYT stops laughing off the role of Miller and Gordon and Tyler and Raines and Keller and now Frankel in bringing this country to war on a pack of lies. It is time the NYT stops claiming these were leaks, rather than willful cooperation in the publication of propaganda.

And so, Max Frankel piles propaganda on top of propaganda, arguing the NYT's tired plea they were wronged in this case.

It may sound cynical to conclude that tolerating abusive leaks by government is the price that society has to pay for the benefit of receiving essential leaks about government. But that awkward condition has long served to protect the most vital secrets while dislodging the many the public deserves to know....

No, Mr. Frankel. It's not a matter of tolerating abusive leaks. It's a matter of not tolerating shitty journalism and irresponsible editing. And the day you yoked your fate to Judy Miller's, you endorsed all that shitty journalism and irresponsible editing. Certainly, the day you write a 7800-word article that willfully hides the fact that Scooter Libby intended to launder a deliberate leak of Plame's identity through Judy Miller and the NYT, you lose your right to lecture us about reporters privilege and the public's interests in leaks.

Clean up your own house, first, before you start telling us about what is or is not in our best interest.

And Phoenix Woman asks why Frankel sees Judy Miller as an objective reporter rather than as a neoconservative propaganda operative:

Phoenix Woman: [W]as... journalism... damaged by Judith Miller's being made to testify and to reveal a source.... Is this a legitimate consideration? This depends in part on whether one sees Miller as a disinterested observer, merely reporting a story — or as an actively partisan operative for a particular political faction....

Judith Miller herself has explicitly rejected the traditional role of journalist as someone who examines the facts regardless of whether they hurt one's preconceived notions; as quoted by Michael Massing in The New York Review of Books in its February 26, 2004 issue, she says the following in response to being asked why she didn't include commentary from WMD skeptics in her stories: "My job isn't to assess the government's information and be an independent intelligence analyst myself. My job is to tell readers of The New York Times what the government thought about Iraq's arsenal." In other words, she's not a reporter, she's a stenographer for the Bush team. (Miller would soon furiously claim to have been misquoted, but Massing, in the letters section of the March 25, 2004 NYRB, firmly stood behind his quotation of her: "Judith Miller is simply wrong. During my hours of interviews with her, she requested that I read back all of the quotes that I wanted to use, and I readily agreed. I distinctly remember reading back the quote in question, and I distinctly remember her approving it. I did this not 'reluctantly' but willingly and patiently, precisely so that I could guarantee accuracy and avoid the type of claim she is now making.")

But we don't even need Miller's own words — words she's tried to disavow — to see that she isn't so much a reporter as she is an operative with an agenda.... As for the whole "outing a source is a no-no and is never ever done" gambit, well, guess what? As emptywheel pointed out way back in the summer of 2005, Judith Miller has burned at least one source before (in this case, Amy Smithson), without needing to be hauled off to jail first.... Miller, as a person whose newspaper career spans three decades, should also be aware that in old-school journalism, if a source screws over a reporter with bad information, the reporter is free to out the source. In fact, it is the reporter's duty to out a lying source.... "A source lies to you, and you find out, you burn him. Period." And goodness knows that Judy's sources fed her the most egregious garbage over the years, as the corrections to her articles attest.

Now, Max Frankel must know all of this. He has to, he's a Timesman — one might almost say THE Timesman. But his loyalty to the paper, and to a disgraced ex-Timeswoman who brought shame upon the paper (and, I suspect, a touch of loyalty to the ideology espoused by Miller and her neocon friends), not to mention the utter refusal overall to admit that (just like with Whitewater and Wen Ho Lee) they were hosed by the Republican Noise Machine, is interfering with his vision. Otherwise I can't see how he would have let such a fundamentally dishonest piece as this one escape his keyboard.

The moment that exercised me most in Frankel's piece was, as I have said, this one, where Max Frankel writes that it was New York Times reporter Judy Miller's laziness that kept Scooter Libby's leaks from the National Intelligence Estimate from being a good thing for the country:

I. Lewis Libby Trial - The Washington Back Channel - Max Frankel - New York Times: Libby... brought [Judy Miller] selected excerpts from a top-secret National Intelligence Estimate (N.I.E.).... The editor in me cringed at [Miller's]... not writing anything.... She could have been the first to recognize... [the] bitter feud... [between] Cheney... [and] Tenet.... By following the trail... she could have produced a pretty good yarn...

Most reporters do not just lazily regurgitate such leaks [as Libby gave to Miller]; they use them as wedges to pry out other secrets.... A few more questions... [about] the N.I.E. would have exposed it as... deeply flawed.... [I]ntelligence experts were available to denounce the document as wrong...

But, Mr. Frankel, most reporters to whom people like Scooter Libby leak do lazily regurgitate such leaks. They certainly do not use them to pry out other secrets. If Scooter Libby had thought there was any chance that Judy Miller would have used his leak of the N.I.E. to expose it as deeply flawed, Scooter Libby would have kept his mouth shut.

Only confidence that the reporter will be a complaisant tool of the source's purposes induces the leak in the first place.

Reportorial laziness on the part of Judy Miller has nothing to do with it. Reportorial ethics has everything to do with it. Do reporters view their primary task as helping their sources to misinform the public? Or do reporters view their primary task as informing citizens? How did the New York Times come to employ somebody in whom Scooter Libby could have such confidence? And Scooter Libby did have enormous confidence in Judy Miller, enough confidence to attempt to suborn perjury by telling her that the two of them would stand or fall together:

Out West, where you vacation, the aspens will already be turning. They turn in clusters, because their roots connect them...

Max Frankel's cluelessness--pretense?--that this is not the case is the thing that allows him to steer his way to his desired conclusion:

The system is sloppy and breeds confusion.... there are and always have been both good and bad leaks.... [T]olerating abusive leaks by government is the price that society has to pay for the benefit of receiving essential leaks about government....

A more clued-in commentator than Frankel would have written that journalistic legal privileges depends on the existence of a community of journalists that polices itself--that rewards journalists who inform the public and punishes those who kneel to their political masters.

Defenders of Max Frankel are telling me that his major problem is that he has been too far away from Washington for too long. Frankel, his defenders argue to me, thinks that the press digs for and gets essential leaks and is sometimes snookered by abusive leaks in the process. He doesn't understand that things have changed since he covered Dean Rusk. He genuinely doesn't know that thirty-something New York Times reporters today don't see senators socially every week or so. He genuinely doesn't know it is the reporters who have demonstrated that these days it is the reporters who have demonstrated that they are complaisant tools of administration purposes who receive the lion's share of the leaks. The changes that have come about as a result of the greatly increased size of the press corps (so that there are multiple channels to leak through) would have had a powerful influence on the ecology of leaks even without the honing of the tools of journalist manipulation by Lee Atwater, Paul Begala, Karl Rove, and their ilk.

I don't think I buy it. Max Frankel is smart enough to know that if Washington and the New York Times still conformed to his image of them, that Judy Miller would right now being feted for her Pulitzer Prize-winning series: "How Bush and Cheney's Top Aides Fooled Themselves, the President--and Me--About Saddam Hussein's Nuclear Weapons Program."

Judy Miller has not written that series. Judy Miller will never write that series. And so I find myself, in the end, convinced that Emptywheel and Phoenix Woman are right to have lost patience with Max Frankel.

March 28, 2007 at 15:22 in #journamalism | | Comments (5)

Taking The Fifth Amendment

Obsidian Wings sends us to Dan Froomkin with respect to Monica Goodling, Alberto Gonzales, and George W. Bush:

Obsidian Wings: Taking The Fifth: Dan Froomkin also makes a good point about Goodling's lawyer's letter:

And he cites "numerous examples of witnesses who gave testimony before Congress and then faced criminal investigations and even indictments for perjury, false statements, or obstruction of congressional proceedings, including United States v. Poindexter, United States v. North, United States v. Safavian, and United States v. Weissman. . . .[T]he potential for legal jeopardy for Ms. Goodling from even her most truthful and accurate testimony under these circumstances is very real. One need look no further than the recent circumstances and proceedings involving Scooter Libby."

But here's one thing all those people had in common: They lied.

Impeach them all. Now.

March 28, 2007 at 13:06 | | Comments (1)

Monica Goodling Has Reason to Fear

Dan Froomkin points out why Monica Goodling has reason to fear:

Dan Froomkin - Bush's Monica Problem - washingtonpost.com: Here is the full text of the statement and letters from Goodling's attorney, John M. Dowd. He argues that "the hostile and questionable environment in the present Congressional proceedings is at best ambiguous; more accurately the environment can be described as legally perilous for Ms. Goodling." He even goes so far as to challenge the legitimacy of the hearings, which he suggests are being held for political purposes. And he cites "numerous examples of witnesses who gave testimony before Congress and then faced criminal investigations and even indictments for perjury, false statements, or obstruction of congressional proceedings, including United States v. Poindexter, United States v. North, United States v. Safavian, and United States v. Weissman. . . . [T]he potential for legal jeopardy for Ms. Goodling from even her most truthful and accurate testimony under these circumstances is very real. One need look no further than the recent circumstances and proceedings involving Scooter Libby."

But here's one thing all those people had in common: They lied.

March 28, 2007 at 12:30 | | Comments (6)

Fear and Loathing in the Crude Pits

What will oil prices do? They will fluctuate!


Source: Nymex via Wall Street Journal

Fear and Loathing in Crude Pits: David Gaffen: What is learned about the psyche of a market that jumps 8% on a rumor later proved bogus? At the very least, that emotions are frayed.

Crude briefly touched $68 a barrel in electronic trading last night... as of this morning the contract was still up $1.50 to $64.43. The bounce came as a result of rumors of an attack by Iran on U.S. warships -- but the fact that some of the gains have been sustained this morning suggests geopolitics has reasserted itself as the primary worry fueling trading....

Mr. Schork says the follow-through comes, in part, because oil was rising already in the previous days, breaking out of its recent range to move into the mid-60s a barrel. He says the move reflects an increase in buying from speculative types.... But Derek Frey, head trader at Odom & Frey in Atlantic Beach, Fla., says there's at least $2 or $3 in the price of oil now that reflects unrealistic expectations, namely, that the U.S. and Iran could get into a full-blown conflict...

My brother points out that ExxonMobil is unchanged today: the people trading on the NYMEX (volume: $1 billion a day) have changed their expectations, while the people trading ExxonMobil (volume: $1.5 billion a day) have not.

What is ExxonMobil's loading on crude, anyway? How much of its $440 billion capitalization is oil in the ground?

March 28, 2007 at 12:13 in #economics | | Comments (7)

links for 2007-03-28

March 27, 2007 at 20:23 | | Comments (0)

John Holbo Deploys the Ultimate Weapon: Isaiah Berlin

John Holbo unleashes Isaiah Berlin and so wages intellectual thermonuclear war against Rudi Giuliani:

John Holbo: A point Isaiah Berlin makes very well... it is one thing to give up liberty for some greater good -- possibly even an increase in freedom along some other axis. (Giving up the freedom to murder in order to secure freedom from murder seems like a good deal.) It is quite another thing to call the sacrifice of liberty "liberty":

This paradox has been often exposed. It is one thing to say that I know what is good for X, while he himself does not; and even to ignore his wishes... and a very different one to say that he has eo ipso chosen it, not indeed consciously, not as he seems in everyday life, but in his role as a rational self which his empirical self may not know -- the "real" self which discerns the good, and cannot help choosing it once it is revealed. This monstrous impersonation, which consists in equating what X would choose if he were something he is not, or at least not yet, with what X actually seeks and chooses, is at the heart of all political theories of self-realization. It is one thing to say that I may be coerced for my own good.... It is another to say that if it is my good, then I am not being coerced, for I have willed it, whether I know this or not, and am free (or "truly" free) even while my poor earthly body and foolish mind bitterly reject it, and struggle with the greatest desperation against those who seek, however benevolently, to impose it.

As Matt[hew Yglesias] says: "[Rudi Giuliani is] still, I think, a pretty creepy authoritarian but the idea he's expressing has a reasonably distinguished lineage and isn't just some madness he dreamed up on his couch one afternoon." Yes, it's some madness that Hegel dreamed up on his couch one afternoon...

I thought it was Rousseau?

March 27, 2007 at 20:05 | | Comments (1)

Vignettes from the Federal Reserve Bank of San Francisco

Federal Reserve Bank of San Francisco, March 23-24, 2007: Monetary Policy, Transparency, and Credibility

Janet Yellen: "I don't see any reporters in the room, so let me venture a few words on Federal Reserve transparency..."

John Williams guides the perplexed in the proper interpretation of what the Federal Reserve means when it utters the phrase "business casual"...

Alex Cukierman quotes Alan Greenspan from 1987:

Since I have become a central banker I have learned to mumble with great incoherence. If I seem unduly clear to you, you must have misunderstood what I said...

March 27, 2007 at 12:07 in #economics | | Comments (10)

But for Wales?

The Sixteen-Year-Old had never before seen "A Man for All Seasons"

Web Gallery of Art: Sir Thomas More (1477-1535).

Paul Scofield as More is a little too good to be real, and John Hurt as Richard Rich is a little too bad to be real, but a number of the actors--Leo McKern as Cromwell, Orson Welles as Wolsey, Robert Shaw as Henry VIII, and Nigel Davenport as Norfolk--are absolutely perfect.

March 27, 2007 at 08:54 in History | | Comments (19)

Del.icio.us Recommended Tags for Crooked Timber

Del.icio.us http://del.icio.us recommends that you tag Crooked Timber with:

academia art bush business culture economics education environment feminism Fun geography health history humanities humanity imported information international internet journalism law liberty life literature media moral_philosophy news obituary philosophy policy politics psychology reference religion research rhetoric science society sociology statistics teaching technology weblog weblogs writing

Just saying...

March 27, 2007 at 08:45 in #weblogging | | Comments (1)

What is the Federal Reserve Really Thinking?

Barry Ritholtz provides us with a primer on Fed-watching:

The Big Picture | What is the Fed Really Thinking?: Last week's rally was ignited by a simple change of phrasing in the FOMC statement. Market took that to mean not only that increases are off the table, but -- Hallelujah! -- a rate cut is in the offing. Not so fast. Whenever the Fed says or does something that is subsequently misinterpreted, they have a few back door methods to correct the error. Two in particular were used fairly regularly. Call it the Fed edit/correction methodology.

When John Berry was at the Washington Post, he could be discretely contacted. He's now the Fed columnist at Bloomberg, and while I'm sure he maintains his FOMC contacts, we haven't seen him "break news" like his WaPo days. He primarily does analysis, and he is very insightful as to what the the Fed is thinking. That's quite valuable, but its not the same as "getting the call." These days, that takes place with the WSJ's Greg Ip. And in a page one article, he lays out what the news is from on high:

When the Federal Reserve last week altered its post-meeting policy statement to soften the suggestion that it might raise interest rates, Wall Street was confused.

Was the Fed signaling that a rate increase was less likely because the outlook for the economy had darkened? Or was it simply reflecting the reality that interest rates are on hold for now?

The answer to both questions is, yes.

With no one quoted, and no speech is cited, one has to assume this is straight from the horse's mouth. The WSJ doesn't print factual statements about the Fed on the front page without knowing this is precisely what they are thinking. That's simply not how they roll. So we can assume that Mr. Ip. is repeating what he was told by very senior Fed Sources. Consider the specifics of the following:

The Fed is seeing increased risks to its forecast that the nation's economy will grow moderately this year. Those risks include the surprisingly weak level of business investment and the hard-to-predict outcome of the current troubles at the riskier end of the mortgage market. The Fed changed its statement last week to get the flexibility to cut interest rates in coming months if those risks grow. But it is unlikely to use that flexibility anytime soon, because the risks aren't big enough and inflation remains uncomfortably high.

I'll bet you that the last underlined sentence came verbatim from the Fed. If it was not emailed, than it was spoken slowly and repeated. And the surprisingly weak CapEx chart? Yeah, you can assume that has the Fed nervous. Here's another classic insider line (and the word "Housekeeping" is classic bureaucracy speak):

"Housekeeping" played a part, as well. For several months, some officials saw the Fed's previous policy statement, which had indicated rates could rise but not fall, as increasingly inconsistent with their own expectations of unchanged rates for the foreseeable future.

We are only to the middle of the article, and we get the conclusion:

The new statement reflects a Fed on hold. It contains no explicit reference to the direction of rates, saying only that "future policy adjustments will depend" on growth and inflation, but reiterates enough inflation concern to indicate lower rates aren't on the table.

The rest of the piece is worth a read, but after this point its just a standard article. All of the prior paragraphs can be considered dictation...

March 27, 2007 at 08:37 in #economics | | Comments (8)

An Open Plea to Steve Clemons: Please Stop the Insane Stupidity!!!!

"Cheney and his team are disurbingly impressive in their ability to constantly get away with sabotaging the work and efforts of President Bush and his team," writes Steve Clemons. AAAUUUGGGHHHHH!!!!!! THE STUPIDITY!!!! IT BURNS!!!! IT BURNS!!!!

Steve: the cossacks work for the Czar. Cheney works for Bush. Cheney doesn't "sabotage the work and efforts of President Bush." Cheney does the work that Bush wants done.

There is a hope--a slight hope--that if Cheney were exiled to the island of Attu, that Bush could then be managed by sane advisors. But there is no evidence for this hope. No evidence at all.

Come back to reality, Steve Clemons! Please!!!!

Steve Clemons: The Washington Note: Cheney Lurks as Threat to Bush's Efforts and Middle East Peace Super Summit: Cheney and his team are disurbingly impressive in their ability to constantly get away with sabotaging the work and efforts of President Bush and his team. The New York Sun's Benny Avni reports:

As her aides anticipated an important announcement about Israeli-Arab diplomacy yesterday, sources in Jerusalem and Washington said Secretary of State Rice has encountered enough resistance from all sides to lower her expectations for a breakthrough.

Israeli officials have spoken to a top White House official in recent days, using friendly Washington contacts to go "over Condi's head" to describe several of her new ideas as unrealistic, a Jerusalem source, who declined to be identified, told The New York Sun.

Specifically, according to three officials involved in this week's flurry of diplomatic activity in Washington, Jerusalem, Arab capitals, and the United Nations, Ms. Rice intended to intensify her shuttle diplomacy between Israeli and Palestinian Arab leaders, in an attempt to get them to start negotiating "final status" issues.

There are very few people in the White House that Avni could reputably title as "over Condi's head."

Elliot Abrams would not count -- nor would John Hannah, Cheney's national security advisor. I suppose one could stretch the idea that Stephen Hadley had an edge on Rice, but it is an artificial edge as her relationship with President Bush is closer than Hadley's -- and she held his job while he served as her deputy. So, an honest journalist would not note Hadley as "over Condi's head" without some clear qualification.

David Addington, Cheney's chief of staff, certainly is not over Rice -- but the VP is a different story.

I don't have any idea if the New York Sun really got access to Cheney -- but he and the President himself are the only ones would could be framed as Condi's superiors in this political process -- and I know that Bush is not the person Avni is referring to.

That means -- if the story has legs, which it probably does -- that Cheney is out there working hard to sabotage Condoleezza Rice's efforts in the Middle East, particularly her Middle East Super Summit idea which I think has merit.

President Bush needs to shut Cheney down -- sideline him -- and send an unambiguous message to all of his staff that Condi Rice has the helm and the others should swab the deck.

Bush has few if any chances to do something positive in the foreign policy arena and needs to recognize that the enemies of his administration succeeding are housed over in the VP's wing of the Old Executive Office Building.

President Bush, please send Cheney quail-hunting.

No. Six years ago it was appropriate to ask Bush to exile Cheney to Attu. Today what is appropriate is to impeach Richard Cheney and George W. Bush, and to impeach them now.

March 27, 2007 at 08:31 in #journamalism | | Comments (15)

John C. Calhoun Writes that the Constitution as It Stands Does Not Protect Slavery

That satanic figure who is South Carolinian John C. Calhoun--in his Discourse, published after his death in 1851--argues that constitutional amendments are needed because the pre-Civil War constitution did not protect slavery:

John C. Calhoun: Political Writings: When the government of the United States was established, the two sections were nearly equal in [population and numbers of states], a fact which, doubtless, had much influence, in determining the convention to select them as the basis of its construction. Since then, their equality in reference to both, has been destroyed... the ordinance of 1787... excluding slavery from the North-Western Territory.... The South received no equivalent for this magnificent cession, except a pledge... to deliver up fugitive slaves... [that has] turned out... worthless....

In the mean time the spirit of fanaticism... was roused into action.... It aims, openly and directly, at destroying the existing relations between the races in the southern section; on which depend its peace, prosperity and safety. To effect this, exclusion from the territories is an important step; and, hence, the union between the abolitionists and the advocates of exclusion, to effect objects so intimately connected.

All this has brought about a state of things hostile to the continuance of the Union.... The equilibrium between the two sections has been permanently destroyed.... The nature of the disease is such, that nothing can reach it, short of some organic change — a change which shall so modify the constitution, as to give to the weaker section... a negative on the action of the government.... [E]xperience has prove... that... conflict is between the two great sections.... Had this been then as clearly perceived [in 1787] as it now is... [the framers] would have taken... precaution to guard against the... danger.... It is for us, who see and feel it, to do, what the framers of the constitution would have done, had they possessed the knowledge... which experience has given to us....

How the constitution could best be modified... might be effected through a reorganization of the executive department; so that its powers, instead of being vested, as they now are, in a single officer, should be vested in two — to be so elected, as that the two should be constituted the special organs and representatives of the respective sections, in the executive department of the government; and requiring each to approve all the acts of Congress.... It would thus effect... what was intended by the original provisions... in giving to one of the majorities [that of numbers of people] a decided preponderance in the electoral college — and to the other majority [that of numbers of states] a still more decided influence... in case the college failed to elect a President. It was intended to effect an equilibrium between the larger and smaller States in this department....

Indeed, it may be doubted, whether the framers of the constitution did not commit a great mistake, in constituting a single, instead of a plural executive.... [T]he two most distinguished constitutional governments of antiquity... had a dual executive... Sparta and... Rome....

Such is the disease — and such the character of the only remedy which can reach it. In conclusion, there remains to be considered, the practical question — Shall it be applied? Shall the only power which can apply it be invoked for the purpose?

The responsibility of answering this solemn question, rests on the States composing the stronger section.... [T]he States of the weaker section can do nothing... without the aid and co-operation of the States composing the stronger section.... On the latter, therefore, rests the responsibility of invoking the high [amending] power, which alone can apply the remedy — and, if they fail to do so, of all the consequences which may follow...

March 26, 2007 at 21:33 in #economichistory, #economics, #politics, History | | Comments (0)

links for 2007-03-27

March 26, 2007 at 20:23 | | Comments (0)

Brad Setser on Continued Increased Foreign Central Bank Demand for Dollar Assets

Foreign central banks continue to raise their bets on the future strength of the dollar. Brad Setser reports:

RGE - Still going strong (Bretton Woods 2): I watch the data on global reserve growth rather closely. But I was still surprised to see (via Global Liquidity Blog) the scale of the growth in the Fed's custodial holdings so far in the first quarter. Since December 27, the securities the Fed holds on behalf of foreign central banks have increased by $123.8b.... Annualized, it works out to a stronger increase than in 2004, back when Japan seemed to be buying every Treasury note the US government issued. And the Fed data just covers the securities -- the safe securities -- held by the Fed. Central banks also hold Treasuries and Agencies through private custodians. They have dollars on deposit in the US. They have dollars on deposit outside of the US. They hold "private" mortgage backed securities (especially the PBoC). They hold corporate bonds (though not very many) and so on.

Stephen Jen puts global reserve growth at $75-80b a month, which seems about right to me.... That is roughly a $1 trillion annual pace, nearly all from the emerging world. There shouldn't be much doubt left over who finances the US current account deficit.

Mohammed El-Erian and Michael Spence... argue that the rise in US consumption is a natural consequence of the rapid increase in the value of US assets over the past few years -- along with the emerging world's willingness to finance the resulting US deficit. The uphill flow of capital, in turn, explains most recent asset market conundrums (“excessive compression in risk spreads, the unusual collapse in market volatility, the inverted shape of the U.S. yield curve”).

I basically agree. But I am not sure, though, that the story really starts with an increase in the value of US housing stock, which in turn leads US households to naturally want to consume more.... [M]y telling of the story would put a bit more emphasis on exchange rates – and how the impact of dollar pegs on emerging economies changed when the Fed cut US policy rates and the dollars started to tumble in 2002. Asian currencies -- as Jon Anderson has demonstrated -- still track the dollar closely. So the change in the dollar's trajectory against Europe had a big impact on Asia, not just on the US...

Back when Jeff Sachs, Rudi Dornbusch, and Charlie Kindleberger taught me this stuff, they told me that processes like this couldn't go on for very long because the country whose reserves were being accumulated would be increasingly viewed as likely to be unstable, and no central banker would want to have to explain to his or her political masters just why their foreign exchange reserve portfolio had lost half of its value. Yet this doesn't seem to be something that is worrying the BoJ or the PBoC right now.

It's a remarkable mystery.

March 26, 2007 at 20:10 in #economics, #politicaleconomy | | Comments (13)

Sales of New Homes Fall Sharply

After a couple of days of good macroeconomic news, some bad news. Covered by the able Martin Crutsinger:

Sales of New Homes Fall Sharply: Sales of new homes fell sharply for a second consecutive month in February, a weaker-than-expected performance that dimmed hopes for a rebound in the troubled housing market. The Commerce Department reported Monday that sales of new single-family homes fell by 3.9 percent last month to a seasonally adjusted annual rate of 848,000, the slowest sales pace in nearly seven years....

The February decline followed an even larger 15.8 percent drop in sales in January, which had been the largest one-month plunge in 13 years. The back-to-back declines provided evidence that the housing market is continuing to struggle with lagging demand and a glut of unsold homes. The weakness in sales pushed the median price of a new home down to $250,000 in February, a drop of 0.3 percent from a year ago....

The performance of new home sales was in contrast to a report last week that sales of existing homes rose in February by the largest amount in nearly three years. Analysts had expected new home sales to increase in February as well, based on a view that January's steep plunge had overstated the weakness in housing. The back-to-back declines in the new home market served to support the forecasts of private analysts who believe the slowdown in housing has more months to run its course....

For February, the number of unsold homes rose by 1.5 percent to 546,000. That meant it would take 8.1 months to sell all of those homes at the February sales pace, up from 7.3 months in January...

March 26, 2007 at 20:00 in #economics | | Comments (8)

Michael Berube Is Back!

Michael Berube is back, eviscerating Alexander Cockburn and Edward Herman, those notorious stooges-in-search-of-a-Stalin:

How Do I Sleep?: Alexander Cockburn wants to know, and it's sweet of him to ask. In his most recent essay, "Where are the Laptop Bombardiers Now," he writes....

[W]here are the parlor warriors? Have those Iraqi exiles reconsidered their illusions, that all it would take was a brisk invasion and a new constitution, to put Iraq to rights? Have any of them, from Makiya through Hitchens to Berman and Berube had dark nights, asking themselves just how much responsibility they have for the heaps of dead in Iraq...?

Cockburn's essay is gradually making its way through the Intertubes.... I can say that my position on Iraq four years ago hasn't led me to wonder how much responsibility I have for the war. I opposed the war, and no, I"'m not sorry about that. Four years and six weeks ago, I had just gotten back from the antiwar rally in New York, and I wrote this:

Many of us fear what will happen to Iraqi civilians and American civil liberties; I fear this too, but as the impervious Bush imperium machine grinds on, I fear the aftermath of the war even more than the war itself. A military governorship in Baghdad for at least two years? A Greater Turkey to contain the Kurds in the north? Osama at large and al-Qaeda regrouping in Afghanistan and Pakistan? NATO and the UN in shreds?

What a complete and terrible and deadly mess. Everyone with any damn sense at all knows that if President Gore were sitting in his rightful place in the Oval Office right now, we wouldn't be on this obsessive and profoundly counterproductive path. Yes, President Gore would have taken out the Taliban and its terrorist training camps immediately after 9/11. And rightly so. But from that point on, there's almost no point of contact between what Bush has done and what any sane or competent President would have done....

Now, perhaps you think this is just sloppy Alex Cockburn making a sloppy mistake, tossing me in with people who supported war in Iraq. But this kind of thing has been going on for almost five years now, and there's no mistake about it. In the US, the Z/Counterpunch left didn't care much for people who wanted the antiwar movement to be as broad as possible; they took it as their task to make sure that the political ground for the antiwar movement would be as narrow as possible, and to that end, they made a point of describing people like me and Michael Walzer and Todd Gitlin and Marc Cooper and David Corn (all of whom opposed war but favored UN inspections and/or no-fly zones and/or revised sanctions) as supporters of war in Iraq. I pointed this out in late 2002, in response to Ed Herman's first Z essay on "The Cruise Missile Left"...

March 26, 2007 at 19:57 | | Comments (8)

Stan Collender Is a Somewhat Happy Camper

He is happy that the Congress, now Democrat-led, is efficiently doing its fiscal business for the first time in living memory:

*Give Them Some Credit * I have been more than a little surprised at how fast the House and Senate Budget Committees and the full Senate have been able to pass their versions of the FY08 congressional budget resolution. The real test -- a compromise that will be able to pass the House and Senate -- is still ahead. But in the meantime, the fact that a budget resolution is moving ahead at all, let along so quickly, is noteworthy.

The main criticism about the budget resolutions working their way through the House and Senate has been that they don't do much. But it's been obvious since last year's midterm election that incremental change was all that was likely this year and the best that anyone should expect. The narrow margins in the House and Senate, extreme partisanship, and a Congress and White House controlled by different political parties meant from the start that a budget deal of any kind was extremely unlikely.... [B]ut it should be taken as a positive development and hopeful sign if Congress adopts a budget resolution conference report this year.... [E]ven though the House and Senate were controlled by the same political party last year they were not able to agree on a budget resolution.... [T]his has the possibility of being a turning point....

A focus on appropriations was virtually preordained by the 2006 election. Congress' failure to adopt more than two of the FY07 appropriations became a symbol for its overall lack of accomplishments and an issue for the voters. The House and Senate leadership wants to show it can make the congressional railroad run on time and the FY08 appropriations will be the most visible way to do that...

March 26, 2007 at 19:57 in #economics, #politicaleconomy, #politics | | Comments (1)

What Does It Mean When a Judge Cites Dred Scott?

Law Professor Jack Balkin makes a mistake in logic.

He writes:

Balkinization: This essay by Gregory J. Wallance in the National Law Journal criticizes the D.C. Circuit's opinion in Parker v. District of Columbia for citing Dred Scott v. Sanford. Wallance writes that "there is no aspect of Taney's opinion that deserves respect, let alone a citation by a court regarded in importance as second only to the Supreme Court." This seems hyperbolic to me. The fact that a certain type of argument appears in Dred Scott doesn't make it a bad argument...

But the fact that somebody cites Dred Scott for Argument X is a powerful sign that they couldn't find another court making Argument X to cite instead. And the fact that a certain type of argument appears rarely except in Dred Scott is a powerful sign that it is a bad argument.

Jeez. These law professors. Reminds me of Gene Volokh saying that he was "agnostic" about whether William Bennett had lost millions in Vegas:

The Volokh Conspiracy: Some casinos are estimating the total losses at over $8 million, but Bennett explicitly says otherwise; instead, he's saying that he's come out pretty close to even (whatever exactly that means), and thus (returning to the previous paragraph) that the supposed casino estimates are mistaken or highly incomplete. This has little to do with statistics -- it's a question of fact. Bennett may be lying, but only if you think the casino estimates are sound, something that the article certainly doesn't prove. That's why I'm not sure who's right.

For Volokh, the fact that people who gamble a lot and whom casinos pay to fly to Las Vegas to gamble are almost surely big losers is simply not a consideration his brain processes in assessing William Bennett's credibility. For Balkin, the fact that Silberman couldn't find precedent in a more credible opinion than Dred Scott is not a consideration his brain processes in assessing the quality of Silberman's argument.

This has to be a form of trained incapacity. Neither of these men are dumb. Yet both cannot, apparently, see the noses in front of their faces.

March 26, 2007 at 17:25 | | Comments (12)

Journamalism!!!!

David Stout and Jim Rutenberg go 110% into the tank for the Bushies!

Justice Official Won't Testify on Prosecutor Firings - New York Times: A lawyer for a Justice Department official involved in the controversial firings of eight United States attorneys said today that his client would not testify on Capitol Hill because she is convinced she would not be treated fairly.

The official, Monica Goodling, the Justice Department's liaison to the White House, is invoking her Fifth Amendment right against self-incrimination and so will decline to answer "any and all questions regarding the firings," her lawyer, John M. Dowd, said. But Ms. Goodling's refusal does not signal that she has anything to hide, Mr. Dowd told the Senate Judiciary Committee's chairman, Senator Patrick J. Leahy...

Has there ever been a more false lead in any newspaper?

Monica Goodling is not refusing to testify on the grounds that she believes that the committee will not treat her fairly.

Monica Goodling is refusing to testify on the grounds that testifying may incriminate her.

There is a difference.

Bill Keller doesn't have much of a reputation right now. But the fact that he has not yet fired Rutenberg and Stout is doing him no good at all.

March 26, 2007 at 17:21 in #journamalism | | Comments (14)

The Indictment of David Stockman

Olympian Zeus, Father of Gods and Men, ensures that justice--although it may be long delayed--may not be denied; that mortals who overreach through hybris and mistreat guests, suppliants, and other "weak claimants"--as David Stockman used to say--will in the end cannot escape retribution; that all are bound to the Wheel of Fate and cannot escape their nemesis.

Or so I am tempted to believe this morning.

MaxSpeak's Sandwichman makes the catch. The present:

MaxSpeak, You Listen!: TO THE WOODSHED:

March 26 (Bloomberg) -- David Stockman, President Ronald Reagan's budget director, was indicted for defrauding investors while chairman of Collins & Aikman Corp., an auto-parts maker that went bankrupt five days after he resigned in 2005.

Stockman, who was also the company's chief executive, is accused of issuing fraudulent statements designed to avoid defaulting on credit agreements and to raise capital, according to an indictment unsealed today in New York federal court. He was charged with conspiracy, bank fraud, securities fraud, wire fraud and obstruction of an agency proceeding...

The past:

Stockman agreed that supply-side theory was, in Greider's words, "only new language and argument to conceal a hoary old Republican doctrine: give the tax cuts to the top brackets, the wealthiest individuals and largest enterprises, and let the good effects 'trickle down' through the economy to reach everyone else." Said Stockman: "It's kind of hard to sell 'trickle down,' so the supply-side formula was the only way to get a tax policy that was really 'trickle down'... Kemp-Roth [the supply-side tax bill] was always a Trojan horse to bring down the top rate." Stockman was saying this privately at the same time that the Administration was denying Democratic charges that the Reagan tax cuts favored the rich...

The Sandwichman:

When FICA taxes were raised in 1983, Reagan at first objected and reminded aides that he was opposed to raising taxes--of any kind. David Stockman reassured him. If the rising payroll-tax burden was imposed on young working people, they would eventually revolt and Social Security would self-destruct of its own weight. The Gipper liked that and gave his OK...

March 26, 2007 at 12:05 in #economics, #politicaleconomy, #politics | | Comments (14)

Economist: "It Demanded the Highest Seriousness and Careful Planning. [But] Messrs Bush and Rumsfeld..."

Impeach George W. Bush. Impeach him now. Thoreau of Unqualified Offerings:

Thoreau of Unqualified Offerings: While on the plane I read the latest issue of the Economist. And while this isn’t the first time that they’ve talked about the mistake they made in endorsing the invasion of Iraq, their latest observations are particularly astute (though not quite astute enough). From the end of the article:

The Islamic Republic is the big winner from Mr Bush’s war. But neither Iran nor any regional power apart from al-Qaeda has an interest in the complete collapse of Iraq. The Iranians in particular worry about what the Americans might do in such a circumstance. Ali Akbar Hashemi Rafsanjani, a former president, calls America “a wounded tiger”, all the more dangerous for its sudden weakness. Such has been Mr Bush’s failure that the autocrats of the Middle East say that they are trying to rescue Iraq from America and America from itself. It really is a debacle.

It is not enough to say with the neocons that this was a good idea executed badly. Their own ideas are partly to blame. Too many people in Washington were fixated on proving an ideological point: that America’s values were universal and would be digested effortlessly by people a world away. But plonking an American army in the heart of the Arab world was always a gamble. It demanded the highest seriousness and careful planning. Messrs Bush and Rumsfeld chose instead to send less than half the needed soldiers and gave no proper thought to the aftermath.

What a waste. Most Iraqis rejoiced in the toppling of Saddam. They trooped in their millions to vote. What would Iraq be like now if America had approached its perilous, monumentally controversial undertaking with humility, honesty and courage? Thanks to the almost criminal negligence of Mr Bush’s administration nobody, now, will ever know.

Of course, criminal negligence (I won’t qualify it with “almost”) was not the only factor here. The biggest problem was that the nature of the project was always... that you can’t succeed if you don’t have a clear agenda. And we never had one. Which is not to say that everything would have been just peachy (or even justified) if we had gone in with a plan. But if there had at least been some clear justification to guide planning and limit the objectives to a short list, perhaps the mess would have been significantly smaller.... But it still would have been a mess.

March 26, 2007 at 10:59 | | Comments (16)

DeLong Smackdown Watch!

Matthew Yglesias defends Karen Tumulty:

Matthew Yglesias / proudly eponymous since 2002: I have to say, I think Brad DeLong's being kind of unfair to Karen Tumulty. The people who cover political campaigns for a living haven't done a ton to earn the benefit of the doubt, but the fact remains that the SEIU/CAP health care event was boring. Nothing happened, no news was broken, and we learned basically nothing about the candidates. I would be interested in hearing about Barack Obama's health care plan except he... doesn't have one. I see no particular reason to hear about the fact that he doesn't have one....

Dennis Kucinich's health care proposal actually deserves some serious coverage, but placing in the context of a presidential campaign in which he's not a serious factor just ensures that this won't happen....

All in all it was dull. Less because it was, in The Politico's headline to a pretty good summary, "More Than You Wanted to Know About Health Care" than that it was considerably less than someone genuinely curious about this would want to know, while also being much more than those who don't really care about the issue will want to know...

Comments:

I thought Jim from Portland OR made a good point over at Ezra's in this thread. The Dem candidates' views on health care are far more similar than they are different, and trying to comb through the minutiae of details distinguishing them is both boring and counterproductive. Posted by: br on March 25, 2007 08:00 PM...

I agree that I am not predisposed to give Karen Tumulty the benefit of any doubt. The most prominent image of Karen Tumulty I have in my mind's eye is of her saying:

http://www.msnbc.msn.com/id/4605173/TUMULTY: Well, you remember, though, when Al Gore was running, somebody actually had to coach him on clapping...

If that is your baseline image, it is hard to give a charitable interpretation to:

Re: Nevada Health Care Forum--Tumulty's Take - Swampland - TIME: Okay, after three very intense hours (plus) onstage moderating this health care forum, I really needed a massage and a margarita. Not in that order.... I suspected that my colleagues in the press filing center weren't entirely thrilled at spending a Saturday in Las Vegas this way, and it was confirmed when this e-mail appeared on my Treo as I prepared to go onstage: "In the press file. We have taken a vote. We don't want to write about health care. Please adjust accordingly. xoxo." But that was my mandate, so I swallowed my butterflies, communed with my inner wonk and forged ahead...

March 26, 2007 at 10:39 in #economics, #journamalism, #politicaleconomy, #politics, Economics: Health | | Comments (2)

The European Economy Since 1945

Sheri Berman on Barry Eichengreen's The European Economy since 1945:

The European Economy Since 1945: Eichengreen argues that the key to understanding Europe's initial triumphs and later troubles lies in recognizing that the recipe for growth varies.... In the years after 1945, Europe needed to recover from the war and catch up with the United States. This involved what economists call "extensive growth"... increasing the number of workers doing familiar kinds of jobs. Extensive growth requires adopting existing technology, using labor more efficiently and generating high levels of investment. After the war, Europe developed a variety of institutions well suited to these tasks. Large trade unions, employer organizations and corporatist arrangements.... Unions agreed to hold down labor costs and in return were given either representation on corporate boards (Germany), influence over government planning and policy making (Sweden and France... providing workers with generous benefits to offset their wage restraint and the unemployment generated by industrial restructuring. Schools and training programs.... Banks developed long-term relationships with their corporate clients....

All this worked just as it was supposed to, generating prosperity across the continent. By the early 1970s, however, the potential for extensive growth had been largely exhausted.... At this point, Eichengreen says, "the continent had to find other ways of sustaining its growth. It had to switch from growth based on brute-force capital accumulation and the acquisition of known technologies to growth based on increases in efficiency and internally generated innovation."... The problem, of course, was that Europe was now saddled with institutions ill suited to the creativity and flexibility that intensive growth demands.... [T]he same structures and practices that had led to the continent's golden age have now produced a malaise....

So what should the nations of Europe do now?... Eichengreen suggests that international competition is compelling Europe to abandon its distinctive model and become more flexible. This will not be easy. Eichengreen himself stresses the difficulty of institutional change.... Yet thanks to political will and creative policymaking, as Eichengreen points out, some countries on the continent, particularly the Nordic ones, have managed to adapt successfully. They are keeping themselves internationally competitive even while continuing to provide social benefits in health, education and social insurance far above American standards. Others, like France and Germany, will have to follow their lead. Otherwise, they will probably face the decline the pessimists have long been predicting.

March 25, 2007 at 22:27 in #books, #economicgrowth, #economics, #monetaryeconomics, #politicaleconomy | | Comments (8)

links for 2007-03-26

March 25, 2007 at 20:22 | | Comments (0)

More Journamalism (Time Magazine Edition)

Karen Tumulty of Time really wishes she didn't have to spend time listening to candidates talk about health care:

Re: Nevada Health Care Forum--Tumulty's Take - Swampland - TIME: Okay, after three very intense hours (plus) onstage moderating this health care forum, I really needed a massage and a margarita. Not in that order.... I suspected that my colleagues in the press filing center weren't entirely thrilled at spending a Saturday in Las Vegas this way, and it was confirmed when this e-mail appeared on my Treo as I prepared to go onstage:

In the press file. We have taken a vote. We don't want to write about health care. Please adjust accordingly. xoxo,

But that was my mandate, so I swallowed my butterflies, communed with my inner wonk and forged ahead.

Would it be asking too much to have Time replace Tumulty with somebody who actually likes learning about candidates thoughts and plans on health care? Rather than somebody who sounds like she is having a root canal?

March 25, 2007 at 13:14 in #economics, #journamalism, Economics: Health | | Comments (2)

Should Defense Secretary Gates Have Made Closing Guantánamo a Deal Breaker?

Impeach George W. Bush. Impeach Him Now:

New to Job, Gates Argued for Closing Guantánamo - New York Times: THOM SHANKER and DAVID E. SANGER: In his first weeks as defense secretary, Robert M. Gates repeatedly argued that the detention facility at Guantánamo Bay, Cuba, had become so tainted abroad that legal proceedings at Guantánamo would be viewed as illegitimate, according to senior administration officials. He told President Bush and others that it should be shut down as quickly as possible.

Mr. Gates’s appeal was an effort to turn Mr. Bush’s publicly stated desire to close Guantánamo into a specific plan for action, the officials said. In particular, Mr. Gates urged that trials of terrorism suspects be moved to the United States, both to make them more credible and because Guantánamo’s continued existence hampered the broader war effort, administration officials said. Mr. Gates’s arguments were rejected after Attorney General Alberto R. Gonzales and some other government lawyers expressed strong objections to moving detainees to the United States, a stance that was backed by the office of Vice President Dick Cheney, administration officials said.

As Mr. Gates was making his case, Secretary of State Condoleezza Rice joined him in urging that the detention facility be shut down, administration officials said. But the high-level discussions about closing Guantánamo came to a halt after Mr. Bush rejected the approach....

[O]ne senior administration official who favors the closing of the facility said the battle might be renewed. “Let’s see what happens to Gonzales,” that official said, referring to speculation that Mr. Gonzales will be forced to step down, or at least is significantly weakened, because of the political uproar over the dismissal of United States attorneys. “I suspect this one isn’t over yet.”... One official made it clear that he was willing to discuss the internal deliberations in part because of Mr. Gonzales’s current political weakness. The senior officials discussed the issue on ground rules of anonymity because it entailed confidential conversations....

Mr. Bush has repeatedly said he ultimately wants to shutter the detention operations at Guantánamo. But he has also said it is not possible to do so any time soon.... Mr. Gates’s challenge has sent a ripple through the White House, because it forced officials to confront the question of whether Mr. Bush was actually moving to fulfill his stated desire to close the detention facility. Officials who advocate shutting down Guantánamo, including some at the Pentagon and the State Department, said an underlying motivation of those who want to keep the center open is that closing it would be seen as a public admission of an incorrect policy — something the Bush administration is loath to do...

I think that Gates should have made this a deal-breaker: If Bush won't take his advice, Bush needs a different defense secretary.

March 25, 2007 at 13:14 | | Comments (1)

More Journamalism From David Broder (Why Oh Why Can't We Have a Better Press Corps?)

Today, March 25, 2007, David Broder says that the Bush administration is so discredited that there is no point for Democrats to take testimony demonstrating that when the Bush administration fired "underperforming" U.S. attorneys, their "underperformance" was that they had prosecuted too many corrupt Republican politicians and not investigated enough Democratic ones:

David S. Broder: The survey... conducted in December and January, depicts a dramatic shift... since George Bush took office in 2001.... The... collapse of support for the GOP... Democrats lead 50 percent to 35 percent... disenchantment with Republicans, not a burst of popularity for the Democrats.... In January 2001, when Bush took office, 55 percent of those polled said they were satisfied with the way things were going in the country. Now that number is 30 percent.... Between mid-November 2001 and now, the percentage of those who said they were basically content with the federal government fell from 53 percent to 21 percent....

If all this suggests that political opportunity is beckoning the Democrats, then the candidates at a forum in Las Vegas this weekend can take heart. But a word of caution is in order.... It seems doubtful that Democrats can help themselves a great deal just by tearing down an already discredited Republican administration with more investigations such as the current attack on the Justice Department and White House over the firings of eight U.S. attorneys...

A month ago, on February 16, 2007, David Broder said that the Bush administration was far from being discredited: that it was "impressive," "forceful," showing "renewed energy" and "regaining the initiative":

Bush Regains His Footing: President Bush is poised for a political comeback.... Bush has gone through a period of wrenching adjustment... [and] now shows signs of renewed energy and is regaining the initiative on several fronts. More important, he is demonstrating political smarts that even his critics have to acknowledge....

Bush has been impressive in recent days. He has been far more accessible -- and responsive -- to the media and public, holding any number of one-on-one interviews, both on and off the record, leading up to Wednesday's televised news conference. And he has been more candid in his responses than in the past.... forcefully making his points... repeatedly outlined areas -- aside from Iraq -- where he says [he and the Democrats] could work together on legislation: immigration, energy, education, health care, the budget...

Such a mendacious month-to-month inconsistency requires great skill and effort to accomplish.

As best as I can see, David Broder has no private defenders left inside the Washington Post newsroom. "Let's talk about something else..." is what they say to me now.

March 25, 2007 at 12:19 in #journamalism | | Comments (16)

Journamalism from Max Frankel (Why Oh Why Can't We Have a Better Press Corps?)

Max Frankel writes that it was New York Times reporter Judy Miller's laziness that kept Scooter Libby's leaks from the National Intelligence Estimate from being a good thing for the country:

I. Lewis Libby Trial - The Washington Back Channel - Max Frankel - New York Times: On Tuesday, July 8, in what his normally detailed calendar listed only as a "private meeting," Libby... brought [Judy Miller] selected excerpts from a top-secret National Intelligence Estimate (N.I.E.).... The editor in me cringed at [Miller's] justification for her not writing anything.... She could have been the first to recognize... [the] bitter feud... [between] Cheney... [and] Tenet.... By following the trail of Libby's leak back to C.I.A. informants, she could have produced a pretty good yarn...

Most reporters do not just lazily regurgitate such leaks [as Libby gave to Miller]; they use them as wedges to pry out other secrets.... A few more questions following Libby's leak from the N.I.E. would have exposed it as... deeply flawed... thrown together in three weeks... because Senate Democrats refused to authorize the Iraq war without evidence of W.M.D.[s].... By mid-2003, intelligence experts were available to denounce the document as wrong on every important count, the worst N.I.E. ever produced and one obviously tailored to support a policy decision already made...

But most reporters to whom people like Scooter Libby leak do lazily regurgitate such leaks, and they certainly do not use them to pry out other secrets. If Scooter Libby had thought there was any chance that Judy Miller would have used his leak of the N.I.E. to expose it as deeply flawed, Scooter Libby would have kept his mouth shut. Only confidence that the reporter will be a complaisant tool of the source's purposes induces the leak in the first place.

Reportorial laziness on the part of Judy Miller has nothing to do with it. Reportorial ethics has everything to do with it. Do reporters view their primary task as helping their sources to misinform the public? Or do reporters view their primary task as informing citizens? That's the question that Max Frankel has to pretend to be a naive simpleton in order not to ask. Yet that's the question he should be asking.

How did the New York Times come to employ somebody in whom Scooter Libby could have such confidence? And Scooter Libby did have enormous confidence in Judy Miller, enough confidence to attempt to suborn perjury by telling her that the two of them would stand or fall together:

Out West, where you vacation, the aspens will already be turning. They turn in clusters, because their roots connect them...

It is only Max Frankel's pretense that he is a naive simpleton that allows him to steer his way to his desired conclusion:

The system is sloppy and breeds confusion.... there are and always have been both good and bad leaks, true and illuminating betrayals of secrets as well as false and conniving ones.... Is there a reliable way to distinguish among the many varieties of that genus peculiarly indigenous to Washington, the leaker? The answer, of course, is that there are no neat lines of distinction....

So was Libby’s prosecution worth a four-year judicial and journalistic circus?... The damage to newsgathering, I believe, has been significant.... [R]eporters and less-wealthy media outlets will surrender to the subpoenas and jail threats.... It may sound cynical to conclude that tolerating abusive leaks by government is the price that society has to pay for the benefit of receiving essential leaks about government....

Prosecutors of the realm, let this back-alley market flourish. Attorneys general and others armed with subpoena power, please leave well enough alone. Back off. Butt out.

A more honest commentator than Frankel would have written differently: would have written that the long-run survival of journalistic legal privileges depends on the existence of a community of journalists that policies itself, and that rewards journalists who inform the public and punishes those who kneel to their political masters. Frankel had a chance to engage in this task of self-policing this morning. He failed to do it.

Coward.

March 25, 2007 at 12:15 in #journamalism | | Comments (9)

Jonathan Chait on Global-Warming Deniers

Jonathan Chait says that the right wing cannot be in denial about global warming because they are all bought-and-paid-for tools of the oil industry. Only most of them are bought-and-paid-for tools of the oil industry:

Why the right goes nuclear over global warming - Los Angeles Times: The easy answer is that Republicans are just tools of the energy industry. It's certainly true that many of them are. Leading global warming skeptic Rep. Joe L. Barton (R-Texas), for instance, was the subject of a fascinating story in the Wall Street Journal a couple of years ago. The bottom line is that his relationship to the energy industry is as puppet relates to hand. But the financial relationship doesn't quite explain the entirety of GOP skepticism on global warming. For one thing, the energy industry has dramatically softened its opposition to global warming over the last year, even as Republicans have stiffened theirs.

The truth is more complicated -- and more depressing: A small number of hard-core ideologues (some, but not all, industry shills) have led the thinking for the whole conservative movement.... [W]e nonconservatives tend to defer to mainstream scientific wisdom. Conservatives defer to a tiny handful of renegade scientists.... National Review magazine... has a blog dedicated to casting doubt on global warming... "Planet Gore." The psychology at work here is pretty clear: Your average conservative may not know anything about climate science, but conservatives do know they hate Al Gore....

[I]f the GOP allowed Republican researchers who accept the scientific consensus to sit on a global warming panel, it would kill the party's strategy of making global warming seem to be the pet obsession of Democrats and Hollywood lefties. The phenomenon here is that a tiny number of influential conservative figures set the party line; dissenters are marginalized, and the rank and file go along with it....

You can tell that some conservatives who want to fight global warming understand how the psychology works and are trying to turn it in their favor. Their response is to emphasize nuclear power as an integral element of the solution. Sen. John McCain, who supports action on global warming, did this in a recent National Review interview. The technique seems to be surprisingly effective. When framed as a case for more nuclear plants, conservatives seem to let down their guard...

Jonathan should ask a deeper question: Why have the industry shills and the hard-core ideologues led the thinking for the whole conservative movement? They have led the thinking because the energy industry has funded them.

March 25, 2007 at 11:12 in #economics, #politicaleconomy, #politics | | Comments (33)

Pharyngula: Journamalism at Wired

Pharyngula watches journamalism as practiced at Wired. Memo to Chris Anderson: you really do need to do better than this:

Pharyngula: Someday, Cosmopolitan will ask me to write a piece on beauty tips, too: My opinion of Wired magazine just dropped a couple of notches. They've got Gregg Easterbrook pontificating on a science issue, the origin of life. Easterbrook is a sports writer with absolutely no clue about science--I've commented on his incompetence a few times before (OK, more than a few times). This time he's soberly stating that no one has done any research on abiogenesis since Miller/Urey, or what they've done is a series of failed experiments, and that there are no hints in nature about the chemical origins of life, therefore, maybe a god did it --while completely oblivious to the fact that no one has ever done any research on gods or higher beings, and that there is no evidence for their existence. The man is an idiot. I am still utterly baffled why anyone consults that twit for his opinion on science.

March 25, 2007 at 10:23 in #journamalism | | Comments (10)

links for 2007-03-25

March 24, 2007 at 20:25 | | Comments (0)

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