Saturday, November 01, 2008
Since the last debate, John McCain and Barack Obama have unveiled broad ideas about how to restore the nation’s financial health. But they continue to suggest that this will be largely pain-free. McCain says giving everyone a tax cut will save the day; Obama tells us only the rich will have to pay to help us out of this hole. Neither is true.
We are all going to have to pay, because this meltdown comes in the context of what has been “perhaps the greatest wealth transfer since the Bolshevik Revolution in Russia in 1917,” says Michael Mandelbaum, author of “Democracy’s Good Name.” “It is not a wealth transfer from rich to poor that the Bush administration will be remembered for. It is a wealth transfer from the future to the present.”
Never has one generation spent so much of its children’s wealth in such a short period of time with so little to show for it as in the Bush years. Under George W. Bush, America has foisted onto future generations a huge financial burden to finance our current tax cuts, wars and now bailouts. Just paying off those debts will require significant sacrifices. But when you add the destruction of wealth that has taken place in the last two months in the markets, and the need for more bailouts, you understand why this is not going to be a painless recovery.
The Bush team leaves us with another debt — one to Mother Nature. We have added tons more CO2 into the atmosphere these last eight years, without any mitigation effort.
Well, my intro class students know really well the argument about burdens being shifted to future generations--even they have started referring to how much their futures are screwed :-( They have pretty much adopted as their slogan "we are screwed". I am to be blamed though, as their blog posts make it clear.
Barkley: I plan on it in 2014.
Brown: You are serious.
Barkley: I am, I can't screw up Alabama.
Brown: There is no place to go but up in your view?
Barkley: We are number 48 in everything and Arkansas and Mississippi aren't going anywhere.
Brown: And the top priority for you would be education?
Barkley: All the way education, the public school system in this country is the worst it has ever been and what that does is that hurts crime, it hurts the judicial system. You know if you don't give people education and hope, they become criminals. They get involved in drugs. So we have got to fix the public school system. I think we need to make these neighborhoods safer. And the third thing, you have got to give people economic opportunity. America for far too long has a small group of people who have got all the money and then we got a bunch of poor people who have no money. And because we have killed the public school system they can't get the education to make money and that is just not right.
Watch the interview, if you would rather believe your own eyes :-)
So, let us turn to a real expert, James Galbraith, shall we? Here are two of the questions that were posed to him, along with his reponses:
But there are at least 15,000 professional economists in this country, and you’re saying only two or three of them foresaw the mortgage crisis?
Ten or 12 would be closer than two or three.
What does that say about the field of economics, which claims to be a science?
It’s an enormous blot on the reputation of the profession. There are thousands of economists. Most of them teach. And most of them teach a theoretical framework that has been shown to be fundamentally useless.
Iowa is the largest grower of corn; the Iowa Corn Promotion Board points out that "Iowa has produced the largest corn crop of any state for each of the past 14 years. In an average year, Iowa produces more corn than most whole countries." Funny how there is no mention of government subsidies among the reasons for one of the FAQ: Why is corn Iowa's leading crop?
So, it is a no-brainer that the largest corn producing state, which is also the first in the presidential primary process, will then have politicians lining up one after another to sing the virtues of corn-based ethanol. Even a couple of years ago, Slate, one of my favorite go-to-sites, had a fantastic piece on the godawful ethanol subsidies. Slate is no right-wing nut case site, and in fact its people consistently are pro-Democratic presidential candidates. (This year, almost everybody there, but two, is pro-Obama.) BTW, right-wing nutcases also hate the subsidies, and Cato is one such example.
Well, one of the ethanol producers is bankrupt, despite all the subsidies! The NY Times reports that:
The VeraSun Energy Corporation, which accounts for roughly 7 percent of ethanol production capacity in the United States, announced that it had filed for Chapter 11 bankruptcy protection late Friday.
Want more on how corn and ethanol feature(d) in this 2008 elections? Click here for details.
Friday, October 31, 2008
Thursday, October 30, 2008
Boys born to mothers who drank lightly during pregnancy are better behaved and score more highly in tests at the age of three than the sons of women who abstained, according to a study published today.
Researchers found there was no link between light drinking in pregnancy - defined as one to two units a week, or on occasion - and any behavioural or cognitive problems in children at the age of three.
Surprisingly, the University College London study found that some of the children of light-drinking mothers appeared to be doing better than the babies of those who abstained.
So, in Bernstein's memory, and to follow-up on his comments here, I suppose it is most appropriate to embed a YouTube clip of "America" from West Side Story--for which he was the composer:
I have come here tonight to share with you something I learned on this fantastic three-week journey abroad: first, that I have never loved my country so profoundly and caringly as I do now; second, that because of that love I feel more than ever the compulsion and responsibility to re-examine our automatic enemy-concept; and last, that this is a great time to do it, during these 10 days of prayer and reflection.
There is a charming legend about this penitential period: It is said that on Rosh Hashanah, New Year’s Day, the golden Book of Life up there in the sky is inscribed with the name of every single human being, along with his or her destiny for the year: who will live and who will die, who by fire and who by water, who will prosper and who will not. But there are 10 days within which one can change that inscription for the better—by prayer and the practice of good deeds. Charity and faith can avert the evil decree (you see, it’s all just another version of Corinthians, chapter 13). In other words, it’s now or never, because on the 10th day, Yom Kippur, the big book is closed and sealed for the year. Sorry folks, that’s it.So here we are on the eighth night, and I want to make my own public confession of faith, hope, and charity. You see, a couple of years ago I had a bit of a falling-out with my esteemed and well-loved friend Derek Bok. I won’t bore you with the story, but the rumpus was basically about a book written and published at Harvard and blessed with a sizable preface by President Bok. I read and hated this book and became quite exercised about the preface, which didn’t exactly endorse the book, but the presence of which, up front and center, by so distinguished a thinker, gave the book a certain cachet I didn’t think it deserved. Dare I mention its name? Living with Nuclear Weapons—the title alone was discouraging enough. Well, I got real mad and, in a self-righteous huff, stopped further contributions to the Harvard scholarship fund I had established years before. I was wrong to do so; and even though Derek and I have never debated the matter publicly or privately—never even had that lunch we promised each other—nevertheless I have sinned, I re-examine, I re-evaluate, and I hereby return the withheld funds.
There is no enemy; there is the American principle of free debate; fighting against an invented enemy is wasteful; fighting for ourselves and one another is constructive, is sharing—otherwise known as love.Let me leave you with the thought that we all have until Monday night to meditate, rectify, re-assess, and get that celestial inscription changed. Try it, it’s worth it. And, as we say, shana tovah, a good year, and hatimah tovah, a good inscription. Bless you.
Gross domestic product contracted at a 0.3 percent annual pace, less than forecast, a Commerce Department report showed today in Washington. ...
``The crisis really kicked up in late September,'' Ethan Harris, co-head of U.S. economic research at Barclays Capital Inc. in New York, said in a Bloomberg Television interview. ``We're going to be looking at a very unfriendly GDP number in the fourth quarter, with a drop of 2 to 4 percent.''
Wednesday, October 29, 2008
What does Karl Marx pour on his pasta?How creative these comedians are! Creativity is something that has always intrigued me--being far from creative myself, I suppose it is a natural fascination for me. I have always felt that formal education the way we offer it simply kills any creativity. Only the fortunate ones survive with their creative skills in tact.
The Communist Mani pesto :-)
Here is Sir Ken Robinson on this subject:
India's Viswanathan Anand has retained his FIDE World Chess Championship title by beating Russia's Vladimir Kramnik in the German city of Bonn.More here.
Anand won three games, drew seven times and lost once en route to winning the
competition by 6.5 points to 4.5. ...
Anand, who was born in the southern Indian city of Madras (Chennai), divides his time between India and Spain.
Known as the "Tiger from Madras", his achievements have triggered huge interest in the game in India with chess clubs mushrooming in many parts of the country.
Tuesday, October 28, 2008
Microsoft, Google and Yahoo have signed a global code of conduct promising to offer better protection for online free speech and against official intrusion. ....
[The Global Network Initiative] states that privacy is "a human right and guarantor of human dignity," and the agreement commits the companies to try to resist overly broad demands for restrictions on freedom of speech and the privacy of users.
They will also assess the human rights climate in a country before concluding business deals and make sure their employees and partners follow suit.
More here, and here
The bitterest members of academe are the midcareerists, the snarlers who've gotten tenure but now discover that they don't have lifetime goals or passionate pursuits to buoy them through the next decades. They've gotten what they always thought they wanted — but what will they do for their next trick?
They should develop long-term research projects, or concentrate on deepening their teaching techniques, or create new programs in service learning. They could make their work lives startling, unpredictable, and full of genuine excitement.
But some will insist on boring, bedeviling, or frightening newbies with tales of old feuds and future disgraces. They're obsessed with former colleagues who flamed out, suffered student mutinies, or escaped to warmer climes or better-paying jobs in the Real World. Snarling remains the refuge for those who lack the energy or courage to do something really original or dastardly.
Monday, October 27, 2008
Meanwhile, there are a few continuing to earn gazillions of dollars and the public simply does not worry about it. In fact, they actively contribute their hard-earned dollars to enrich these few.
Don't believe me? Well, that is because you are not thinking about entertainers, like movie stars and basketball players. Don't you think it is atrocious that these people earn multiple of millions? But, hey, that is what the market system is all about. So, I find it strange that we completely ignore some of the multi-million earners in this market system, while we get insanely mad about some other multimillionaires. And it gets worse: these are not even "free market" transactions. MLB, for instance, is a Congress sanctioned monopoly! Players don't get free-agent status until they have served their time. .... ah, the twisted logic in life!
How much are the earnings? Here is an example about Lebron James:
At the age of 18, he was selected with the first overall pick in the 2003 NBA Draft by the Cavaliers and signed a whopping $90m shoe deal with Nike before his NBA debut.
Since then his cachet has soared, with rich people's bible Forbes magazine putting his total earnings at $270m.
Want to know how much dead entertainers earn? Yes, they are no longer alive! Click here.
Megan McArdle has some interesting observations:
Now, it seems like a race between the British Pound and the Euro on which will sink faster. So far, the Pound is winning, as this Bloomberg report shows!
The yen has been strengthening fast against the dollar and other currencies, which is very bad news for Japanese exporters.
It's also wrecking the carry trade. That's when you borrow at low interest rates in one place just to lend at higher rates somewhere else. For a long time, Japan has been a popular place to do this, for two reasons: the longtime recession has kept its interest rates low, and the government's committment to keep the currency cheap in order to subsidize exports has seemed like a shelter against a sharp currency move that would force borrowers to repay the loan in suddenly-more-expensive yen. Now that the yen is rising seemingly uncontrollably, investors are racing to unwind their positions.
The sharp movements in the currency market are somewhat surprising, particularly the euro's decline. Not very long ago, we were asking whether the euro would replace the dollar as the world's reserve currency; not (sic) it's the "sick man of Europe", as confidence in banks and businesses has been badly shaken.
The pound fell against all 16 of its most-traded counterparts, dropping l.3 percent to $1.5420 as of 11:43 a.m. in London, from $1.5897 last week, when it had its biggest intraday decline in at least 37 years. Against the euro, the currency slipped to 80.73 pence, from 79.31. It traded at a record low of 81.96 pence per euro on Oct. 24.The Euro is keeping pace with the Pound:
Against the US dollar, the European currency traded down during early deals on Monday. At 5:10 am ET, the euro- dollar pair declined to 1.2336, compared to Friday's closing value of 1.2605. This set the lowest point for the pair since April 28, 2006. The pair is currently trading at 1.2443, with 1.21seen as the next target level.
Like a diligent student, I try to follow national and local political issues as closely as possible so that I can provide the best possible answers at the civics test — the election.
Choosing a candidate for an office is easy. It is like the true-false questions in a test. But choosing an idea, which is what the statewide measures are, turns out to be a disaster for me, because ideas warrant discussions before a simple up or down vote.
It is through discussions that we further understand the issue and, more importantly, the complications that might be buried deep down. This is why when I test students on concepts, I don’t use true-false or multiple-choice questions. Instead, I force them to explore the fuzzy, gray areas through short essay responses.
Through reasoning and persuasion, and with evidence, students finally arrive at convincing answers, even if they don’t necessarily agree with my conclusions. At least, that is my hope.
Politics is overwhelmingly about the fuzzy, gray areas. For instance, according to the big fat voter’s pamphlet, Measure 61 “creates mandatory minimum prison sentences for certain theft, identity theft, forgery, drug and burglary crimes.” What a juicy piece for discussions! Even on the surface, the measure comes across as one with multiple effects, and with unintended consequences that we will come to know about only years later.
However, instead of having discussions, I am simply being asked to note whether I am for it or against it. Isn’t such a “yes” or “no” the most atrociously inappropriate way for society to decide on most of such ballot measures?
On the other hand, these are the kinds of questions I would love to have on an essay test — or better yet, for classroom discussions. Oh, yes, we do have a forum for classroom discussions in the political context: the Legislature! Not one, but two chambers of the Legislature — the Senate and the House.
Well unfortunately, there was no option to write a 700-word essay as my response to Measure 61. Maybe an opinion piece, if the editor publishes it, but that does not count as a vote anyway.
To complicate matters, the ballot warned me that voting a certain way on Measure 57 could nullify my vote on Measure 61. Shucks! Back to reading the pamphlet all over again. It was certainly one of those rare occasions when I wished I weren’t a teetotaler — a few drinks might have helped ease my frustrations.
Finally, I metaphorically held my nose and voted.
I imagined giving my students an exam with a few questions and warning them there that there would be a penalty if their answers to one question did not match up with their answers to another question. If I did that, I am sure that soon, my peers and the public would seriously question my sanity — which, come to think of it, some do even now!
I simply cannot understand how we have ended up with a political process where we have two measures about the same set of issues, and where a vote on one can negate the vote on the other. Perhaps that is proof enough that neither measure should have been on the ballot in the first place.
I am all in favor of initiative legislation, and want as much citizen participation as possible in our collective decision-making. I am immensely thankful that these citizen-empowering tools are enshrined in the constitutions both in Oregon and California, where I lived before relocating to Eugene.
But if the 2008 ballot is an indicator of how ugly the future tests might be for us civics students, well, I think it is time we overhauled the curriculum. At least to prevent the abuse of initiative legislation, if not for anything else, maybe we ought to revise our state Constitution as a part of Oregon’s sesquicentennial celebrations — before disgruntled voters abandon voting itself.
Published in the Register Guard, October 27, 2008
Sunday, October 26, 2008
Now, OPEC is trying to make sure that there would be some kind of a price floor. While the lowest cost producer, Saudi Arabia, couldn't care, Venezuela and Iran are completely messed up with prices seemingly ready to break through the $60 floor. (I am delighted that Venezuela and Iran are screwed with the falling prices. No wonder Ahmedinejad has sudden health problems now.)
Again, notice how the dollar and oil prices are inter-connected. When it went to $147, the US dollar was at its weakest. Now,as the dollar is gaining ground, and rapidly too, oil prices are falling, and way faster. I don't mean to suggest that the dollar is the only reason why oil prices are tanking--it is an important point to keep in mind.
The Houston Chronicle--home to America's big oil--reports that
Institutional investors and other speculators, who had waded into oil commodities and helped drive up prices to unheard-of heights, have largely fled the scene.
And now oil analysts are left to ponder just how low oil prices can go — perhaps $50 a barrel by the end of next year, suggests Deutsche Bank's Adam Sieminski.
So, now the "experts" will start the bidding war on how low oil prices will fall.
As oil prices fall, OPEC will begin to have a tough time keeping a tight leash on the quotas. Why? Over to James Surowiecki:
OPEC, like any cartel, has perennial problems with cheating. That’s because each individual cartel member wants to produce as much oil as possible, in order to keep raking in the cash, while all the other members cut back, helping to keep prices high. But since it’s in each member’s self-interest to cheat, the cartel as a whole ends up producing more than it says it will. And the real paradox is that the cheating problem gets worse the cheaper the price of oil gets. Since members are making less on each barrel of oil, they have to sell more barrels in order to keep government revenue high. It’s a tough cycle: cheaper oil begets more cheating, which makes prices fall, and so on. This will be a real test of whether the last few good years have made OPEC any more disciplined in the face of bad years.
I mean, the story of the exchange rates of the American dollar is simply fascinating. The short story, I mean--the story just over the last two months. A year ago when we visited Australia, the American dollar was all fluff. We were sorry ass Americans trying to hold on to our wallets, which quickly ran dry. And now, the Australian currency
closed in US trade at US61.78 cents, down US4.5 cents on Friday night and 37 percent from the high of US98.49 cents it reached three months ago. The slump in
the currency has confounded even the most seasoned of market commentators. The dollar has even been strongly outperformed by Iceland's hapless krona and Brazil's real over the weekend.
I love it when I read something like how even the economic experts are confounded. It is just an euphemism that actually means nobody knows a damn thing and we merely bullshit all the time!
Unfortunately, the book review essay that got me thinking about this is bloody awful. I am glad that I never ventured into literary politics, cultural theory, if such crap is what results.
I suppose I am not the only one thinking along those lines. Here is Carla Wise, for instance.
India's prime minister, too, is on-board. But, his view immediately makes it clear how developed and developing countries might find it difficult to get along on this:
Addressing a special session of the summit of the Asia Europe Meeting devoted to sustainable development, Dr. Singh said climate change was threatening the environment and the prospects for development and a holistic approach was needed to deal with the problem. “We cannot do so by perpetuating the poverty of the developing industries, or by preventing their industrialisation.” He said the principle of common but differentiated responsibility had to be the “cardinal principle of negotiations” in the search for pragmatic solutions within the U.N. Framework Convention on Climate Change.While he calls for convergence, the real divergent issues are embedded right in his speech:
The Prime Minister added that the principle of convergence of percapita emissions of developing countries with advanced developed countries was “catching the imagination of the international community.” The world had to recognise that “each citizen of the world has equal entitlement to the global atmospheric space.”
- Need to uplift millions of poor from their abject poverty--possible, rapidly, through non-carbon energy?
- Will pressuring poor countries on limiting carbon usage essentially mean perpetuating poverty?
- When looking at "per capita", is there any scope for convergence? Is Singh way too optimistic here?
- If we look at aggregates, is there scope for convergence?
- Will countries really buy into this idea of "differentiated responsibility"?
The politics of climate change will, however, get horribly nasty before we begin to see any glimmer of real convergence.
“Al Qaeda will have to support McCain in the coming election,” read a commentary on a password-protected Islamist Web site that is closely linked to Al Qaeda and often disseminates the group’s propaganda.Oregon native, and NY Times columnist, Nicholas Kristof brings this to our attention. He adds:
the endorsement of Mr. McCain by a Qaeda-affiliated Web site isn’t a surprise to security specialists. Richard Clarke, the former White House counterterrorism director, and Joseph Nye, the former chairman of the National Intelligence Council, have both suggested that Al Qaeda prefers Mr. McCain and might even try to use terror attacks in the coming days to tip the election to him.
“From their perspective, a continuation of Bush policies is best for recruiting,” said Professor Nye, adding that Mr. McCain is far more likely to continue those policies.