Thursday, June 30, 2005


It's hot dog gorging time again, and just in time for the 4th:

Mr. Kobayashi, 5-foot-7 and 131 pounds, is ferocious because he has defeated rivals many times his weight.

He is an eating machine because he has won Nathan's Famous hot-dog contest four years in a row. Last year, he ate a record 53½ frankfurters, buns and all, in the required 12 minutes, or roughly one every 13 seconds.

Well, to be fair, every season is gluttony season in this country it seems (but who doesn't love a good eating competition?).

That's why I am glad there are people like the Collective Heritage Institute. Please don't confuse them with the individual Heritage Institute.

UPDATE: Just rereading this quote I pulled. Who is this journalist? He/she could really stand a lesson in logic.

Did the fact that Mr. Kobayashi defeated many people cause him to be ferocious, or does his ferocious characteristic cause him to defeat people many times his weight?

Did winning the hot dog eating contest cause him to be an eating machine, or is it the fact that Mr. Kobayashi is an eating machine that caused him to win the contest?

Nonetheless, let's not allow poor writing to stand in the way of our admiration for Mr. Kobayashi's remarkable achievements in the sport of binge eating.


This is how Paul Samuelson--no radical, anarchist, Starbucks-smasher--describes the virulent positions of most economists-cum-pro-globalization cheerleaders. Samuelson's piece in last year's Journal of Economic Perspectives 18(3)--a journal aimed at more "popular" debates (i.e. containing little to no Greek mathematical formulas) is one of the most intellectually honest explorations of the welfare effects predicted by standard international trade theory. (But what do I know about trade theory?)

Samuelson highlights how results from the standard free trade model can show that productivity improvements may actually reduce social welfare with trade.


Is Samuelson totally off the reservation? Well, let's just say he's no Steve McQueen. Samuelson's honesty is rare, and evoked the now standard visceral reaction from the free trade automotons, in this case an intellectual equivocation diametrically equal to Samuelson's honesty from Jagdish Bhagwati, et. al. Samuelson's is not a critique of standard trade theory, though there is much to be critiqued (with this only skimming the surface). Rather, Samuelson's affront is to open for general discussion what intellectual, political, and technocratic elites would prefer to keep swept under the rug.

Inexcusable. Nixon could go to China, but even someone of Samuelson's stature as a pillar of the neoclassical mainstream cannot escape the free-trade pathology (as the History of Economic Thought website describes him, "Perhaps more than anyone else, Paul A. Samuelson has personified mainstream economics in the second half of the twentieth century." After all, one of the two core trade theories does bear his name.). It's a good thing Samuelson is Emeritus, else Xavier Sala-i-Martin might try to get him fired.

A further conclusion from Samuelson, though not following from his theoretical discussion, is that mainstream trade economists have totally missed the boat in regards to the effect of trade on US wage inequality:

"[E]conomists have insufficiently noticed the drastic change in mean US incomes and in inequalities among different US classes [Ed: Gasp, the "C" word!]...Historically, US workers used to have de facto monopoly access to the superlative capitals and know-hows of the United States [Ed: meaning higher productivity]...and that importantly explained the historically high US real wages [for low-employed skills workers]."

But then, after World War II, the US began exporting capital and technology, and other regions endogenously developed their own sources of capital and technology, and then "foreign educable masses could and did genuinely provide the same kind of competitive pressures on US lower middle class wage earnings that mass migration would have threatened to do." His conclusion left unsated (can't stray too far from the farm): trade caused wage inequality.

Tuesday, June 28, 2005


The POTUS: The terrorists...are waging a campaign of murder and destruction. And there is no limit to the innocent lives they are willing to take.

The Lancet (a peer-review British medical journal): [W]e think that about 100 000 excess deaths, or more have happened since the 2003 invasion of Iraq. Violence accounted for most of the excess deaths and air strikes from coalition forces accounted for most violent deaths.

Yes, our mission is just. Thank you Preznit Bush for restoring my faith and reminding me what we're doing in Iraq.


Monday, June 27, 2005

Mr. Chip Meany
Code Enforcement Officer
Town of Weare, New Hampshire
Fax 603-529-4554

Dear Mr. Meany,

I am proposing to build a hotel at 34 Cilley Hill Road in the Town of Weare. I would like to know the process your town has for allowing such a development.

Although this property is owned by an individual, David H. Souter, a recent Supreme Court decision, "Kelo vs. City of New London" clears the way for this land to be taken by the Government of Weare through eminent domain and given to my LLC for the purposes of building a hotel. The justification for such an eminent domain action is that our hotel will better serve the public interest as it will bring in economic development and higher tax revenue to Weare.

As I understand it your town has five people serving on the Board of Selectmen. Therefore, since it will require only three people to vote in favor of the use of eminent domain I am quite confident that this hotel development is a viable project. I am currently seeking investors and hotel plans from an architect. Please let me know the proper steps to follow to proceed in accordance with the law in your town.

Thank you.


Logan Darrow Clements
Freestar Media, LLC

UPDATE: Now you can support the cause of displacing Justice Souter. Pledge online now to stay a night in the proposed Lost Liberty Hotel.

Friday, June 24, 2005


"...the CIA or me, your Preznit?"

I guess, either way, we're f*@#ed.


May 1949:

Man is, at one and the same time, a solitary being and a social being. As a solitary being, he attempts to protect his own existence and that of those who are closest to him, to satisfy his personal desires, and to develop his innate abilities. As a social being, he seeks to gain the recognition and affection of his fellow human beings, to share in their pleasures, to comfort them in their sorrows, and to improve their conditions of life...It is "society" which provides man with food, clothing, a home, the tools of work, language, the forms of thought, and most of the content of thought; his life is made possible through the labor and the accomplishments of the many millions past and present who are all hidden behind the small word “society.” It is evident, therefore, that the dependence of the individual upon society is a fact of nature which cannot be abolished—just as in the case of ants and bees.

...I have now reached the point where I may indicate briefly what to me constitutes the essence of the crisis of our time. It concerns the relationship of the individual to society. The individual has become more conscious than ever of his dependence upon society. But he does not experience this dependence as a positive asset, as an organic tie, as a protective force, but rather as a threat to his natural rights, or even to his economic existence. Moreover, his position in society is such that the egotistical drives of his make-up are constantly being accentuated, while his social drives, which are by nature weaker, progressively deteriorate. All human beings, whatever their position in society, are suffering from this process of deterioration. Unknowingly prisoners of their own egotism, they feel insecure, lonely, and deprived of the naive, simple, and unsophisticated enjoyment of life.

(Read more)

Wednesday, June 22, 2005


All eyes and ears will be tuned to tomorrow's Senate Finance Committee hearing on U.S.-China economic relations.

Get your rattlin' sabers ready!

Here is te docket of witnesses:

1. Maestro G-span
2. Secretary Snow Job
3. Ken Rogoff
4. Soybean Lobby
5. Intel Corporation
6. NAM representative

What to expect them to say:
1. China needs more flexibility, soon, especially cause by buying all our bonds to keep the renminbi undervalued they're keeping me from pushing up long term interest rates.
2. If China doesn't revalue by 10 percent and pretty darn fast or they'll be sorry.
3. China's rigid exchange rate mechanism, though it may have served a purpose in the past, is begging for a financial crisis, and by the way, would it kill them to have a little Central Bank independence.
4. We'd like to sell more soybeans to China, or better yet, establish crush operations (the production of soy bean meal and soy bean oil) there, and if the currency were to appreciate, the Chinese could buy more of our beans. And can you make sure China doesn't block our genetically modified crops or illegaly reproduce seeds in violation of TRIPs?
5. China's booming economy is creating a vast new market for our chips, and some day soon we hope to design and produce chips there, making China a major export platform for vertically integrated information technology production. We'd like an undervalued renminbi so that we can continue to earn overvalued dollars for our exports from China while paying wages (albeit high-skilled wages) in undervalued yuan. So let's not do anything drastic.
6. Stop dicking around, our vitally important manufacturing sector is dangling by a thread while the Business Roundtable fiddles and Bush dances and watches it burn.

UPDATE: I should be more clear. There are two issues at question here. The first is the level of the Dollar-Renminbi exchange rate. The second is China's choice of exchange rate regime.

What is the difference? The exchange rate is the actual price at which one currency exchanges for another (currently $1 exchanges for 8.28 yuan). The exchange rate is an outcome of market forces--the interplay of supply and demand for one currency relative to other currencies and assets. Outcomes in this market are of course affected by the structure of the market and rules, norms, and customs that underpin market exchange. This configuration of legal mechanisms and institutions governing the exchange of currencies is known as the exchange rate regime. The choice of exchange rate regime is inherently a political one, based upon macroeconomic policy goals and conditioned by historical experience (say, if you witnessed every neighboring country experience financial crises and dramatic economic contractions after transitioning from a managed to a floating exchange rate regime).

Witnesses 1 through 3 will be arguing around the question of China's choice of exchange rate regime. Conclusion: China should change regimes. Witnesses 4-6, I expect, will argue around the exchange rate and evidence of China's manipulation of the level. Conclusion: China should change the level, though this may entail a change in regime, the regime is a secondary concern.

More info on the evolution of China's exchange rate regime (and more broadly its capital account regime) can be found here.

Tuesday, June 21, 2005


After a record default on its sovereign debt in 2002, Argentina's economy recovered robustly without international financing.

Many argued that Argentina's unprecedented default on loans from the IMF and World Bank would render it a pariah state uncapable of tapping international financial markets to borrow for development.

Not so. Argentina's default, yesterday, set another precedent. Not only did default not lead to economic ruin, it did not shut Argentina out of international financial markets.

Developing country technocrats take heed.


Over the weekend, DC Police Chief Wiggum had his car stolen from the street near his home.

Chief Wiggum: Don't worry, that car thief can't hold his breath forever!
Cop: And if he can, Chief?
Chief Wiggum: Then God help us all!

Just another day in our fair city.

Monday, June 20, 2005


The IMF reports in its morning press briefing:

China`s income gap widened in the first quarter of the year, with 10% of the nation`s richest people enjoying 45% of the country`s wealth, state press reports said Saturday, AFP reported from Beijing. China`s poorest 10% had only 1.4% of the nation`s wealth, the Xinhua news agency said, citing a recent survey by the National Bureau of Statistics. "There are two gaps that need to be addressed," Li Xiaoxi, head of the economic and resource management institute of Beijing Normal University, was quoted as saying. "The first is the very wide gap between different social groups. The other is the astonishing economic development gap between regions."

Thursday, June 16, 2005


WaPo reports that Republican's are looking to pull back on social security privatization...for now. How to save face? Blame those pesky obstructionist Democrats:

President Bush has responded by dispensing his cautious calls for bipartisanship in favor of far tougher rhetoric that blames the Democrats for the stalemate. "On issue after issue, they stand for nothing except obstruction," Bush said at a GOP fundraiser Tuesday night. "And this is not leadership. It is the philosophy of the stop sign, the agenda of the roadblock."

How fitting that this Bushian rhetoric is delivered at a private gala fundraiser.

The reality, even Republican's are afraid to touch the third rail:

Finance Committee Chairman Charles E. Grassley (R-Iowa) has held 14 meetings with the panel's 11 Republicans to reach a consensus just on achieving solvency, he said, but they have yet to produce a deal. He has not even broached the idea of personal accounts, which he acknowledged to be the harder piece of the puzzle.

We know that Democrats are in practice no good at obstructing. The real problem is that Republicans can't even figure out there own plan to privatize Social Security without people thinking that the Republicans privatized Social Security.

Maybe that's why Americans by a 2-to-1 margin trust Democrats over the president to protect Social Security.

UPDATE: New poll out from NYT this morning:

Do you approve or disapprove of the way George W. Bush is handling Social Security?

Disapprove 62; Approve 25


First there was outsourcing. But that didn't necessarily capture an accurate description of the phenomenon. So we got offshoring. But Lou Dobbs gave offshoring too much of a negative connotatin, so the globamaniacs countered. They invented world sourcing and tried to shift the terms of the debate to something ludicrously dubbed insourcing.

Now the good folk over at McKinsey Global Institute have opted to throw their hat into the name game ring (alongside their misleading analyses on outsourcing/offshoring/whatever you want to call it). Are you ready? Here it is: global resourcing, the process a company goes through to decide which of its activities could be performed anywhere in the world, where to locate them, and who will do them.

As it happens, McKinsey has a new report out on the "overblown" threat of offshore outsourcing. But they don't gives these reports away for free. So if you're like me and don't work for consultancies and the Fortune 500, you have to settle for reading about the report on

There, you will learn:

The McKinsey report is the first to come up with authoritative estimates of how many service jobs could move from rich countries to poor ones.

I guess it depends how you define authoritative. Ashok Bardhan and Cynthia Kroll of Cal Berkeley's Haas School of Business released this fine research report back in October 2003.

Putting aside the promotional hyperbole, what does the McKinsey report say (at least according to the Financial Times)? The threat of offshore outsourcing is overblown because on their forecast trajectory offshored service jobs will only account for 1.2 percent of all service jobs in rich countries. Well that's misleading. Most service jobs can't be offshored. Plumber, retail clerk, janitor, nurse, security guard, landscaper, dentist, you name it--most of the jobs in every economy are service jobs, and most of those are geographically specific. A barber in Mumbai may earn one percent of what my barber in Dupont Circle gets, but I can't very well outsource my haircut.

As I've said before, the employment effects of service job offshoring appear small at present. But the employment level is the tip of iceberg in terms of the effects on the labor market. In the mid- to long-run it's easy to expect that workers dislocated by trade and offshoring will be re-employed elsewhere, but what does this do to distribution and wages?

Now that US manufacturing is moribund, and high-skill service jobs are at risk, where will workers dislocated by trade go? It is fairly easy to expect that, in an economy like the US, that displaced workers will in the mid- to long-run will be re-employed to other productive uses, and the Department of Labor's Occupational Outlook Handbook provides some guidance as to what that might be:

Retail sales, customer service reps (highly outsourcable), food prep and fast food workers, cashiers, janitors, waiters, orderlies, receptionists, security guards, home care providers, landscapers...not exactly high wage, skill-intensive, upwardly mobile occupations.

Perhaps the most important threat of service offshoring is in fact the threat of service offshoring. As I wrote below:

When capital is freely mobile to locate investment/production anywhere of its choosing, communities will bid against each other in terms of wages and tax breaks in order to attract investment and jobs. This can result in eroded wages and social safety nets even if no trade or movement of production/jobs takes place. Even though this decline in living standards may be due to globalization, because no trade or foreign direct investment occurs, economists have a hard time measuring its effects.

It's really difficult to measure threats (what is a threat, how do we know when a threat has been issued, how do we know a threat is credible, etc.), but it is clear that just the mere threat of jobs moving overseas is enough to make workers cower, accept longer working hours, lower wages and benefits, and foresake the strength of unionization. Threats might hellp explain a substantial part of the heretofore unexplained portion of increasing wage inequality as well as the reason we have seen such large productivity growth in recent years combined with such low wage growth. In classical economic theory, workers should be paid according to their productivity (or even more than their productivity to evoke effort and overcome informational problems of adverse selection). The fact that we see a growing wedge between wages and productivity suggests that capital is capturing a larger share of income distributed between capital and labor.

Wednesday, June 15, 2005


From this morning's IMF Press Briefing:

China`s yuan trading band should be widened to 3%-5% around the official
benchmark rate in an initial stage of foreign exchange rate reform,
Finance News, a central bank-backed newspaper, said today, AFP reported
from Beijing. "The trading band can be further widened to 7%-10% when the
time is ripe," the paper said in an editorial. The report said that
conditions were right to start considering changing the yuan exchange rate
mechanism. It urged the government to work on making the yuan into a
convertible currency as the first step to establishing a market-oriented
managed-floating exchange rate system. Banks, companies and individuals
should be allowed to retain all or part of their forex income, the
newspaper said. It added that the best time to launch a currency reform
was when there was no strong "revaluation" expectation nor during large
fund inflows and big appreciation pressure, the newspaper said, without

Still wondering what a renminbi is?

Monday, June 13, 2005


Heritage has interns, many, well payed interns.

The summer interns of the Heritage Foundation have arrived, forming an elite corps inside the capital's premier conservative research group. The 64 interns are each paid a 10-week stipend of $2,500, and about half are housed in a subsidized dorm at the group's headquarters, complete with a fitness room...Heritage has had interns, in ones and twos, ever since its founding in 1973. But it intensified its effort about 15 years ago, hiring a full-time intern coordinator. Another leap forward occurred in 1999, when a supporter, Tom Johnson, offered to donate an adjacent building. Mr. Feulner embarked on a $12 million fund-raising drive to renovate it and carved out space for 30 dorm rooms. For $10,000, donors could have their names in bronze on a dorm room door.

Hell, I'm making more than that as an intern this summer (though no dorm).

These people have some seriously good ideas...about how to win at politics at least, and they're playing to win--not just the vote on the next bill on the Congressional day book, we're talking social revolution.

We got our work cut out for us.

Friday, June 10, 2005


Maxspeak is linking to me...better write something about trade...

Maxspeak's post--which only points out there exist alternative views on the role of trade--is sparking a backlash in the otherwise-liberal blogoshpere (DeLong, Yglesias). It utterly behooves as to why. That Max is not even attacking the free trade orthodoxy and yet it evokes such visceral responses indicates just how deeply the free-trade pathology is rooted.

To reiterate my own viewpoints, I am neither here nor there on trade. In principle I am agnostic about "trade," though in practice I think there is a lot people should be worrying about.

I am with Max when he says, "For some reason, markets that straddle national borders are sacrosanct, while those that do not are fair game for modest regulation, such as the minimum wage, child labor, etc." There should be no question that specialization and division of labor are productivity and welfare enhancing--individuals are better off specializing in producing one thing and then using the product of their work to trade for other things that they need. But it is not clear to me why we expect welfare gains to be different if, for example, an individual in California chooses to trade with someone in Alabama than someone in, say, Korea.

As I have mentioned to Brad before:

Economists who wax eloquent on the thousands-of-years-old tradition of globalisation ("Globalisation means we share jobs as well as goods" August 27) often overlook the fact that powerful nations used cannons and bayonets to set the conditions of global exchange in their favour. The question now is not whether countries should integrate their economies, but under what rules.

In the past, raw force established the rules of trade and investment. Today, they are made behind closed doors at the World Trade Organisation, the International Monetary Fund, the World Bank, and other multilateral institutions far removed from democratic accountability, transparency, and participation by people whose lives are impacted, where asymmetric power ensures the rules are similarly skewed.

It is entirely reasonable to believe both that trade is valuable and that the rules and the process for making rules inadequately serve the goal of widely shared prosperity…

I’ve spilled much ink in the past about the role of power and politics in so-called free trade (here, here, here, and more). If we ignore for a moment how we got into what Marx called, "the realm of Bentham," the standard model of trade on which Brad (and perhaps unwittingly Matthew) are basing there arguments is all welll and good, but it only holds up under extremely restrictive (and often unrealistic) assumptions about how the world works.

* they assume full employment at all times everywhere--both of people and of capital (i.e. full capacity utilization).
* they assume that capital is immobile between countries
* they assume no economies of scale
* they assume every country has access to the same technology
* they assume trade is always balanced (this must be the case when capital is immobile because there can be no international borrowing and lending to finance trade deficits)
* they assume perfectly competitive input (implied by the first assumption) and output markets

What this model tells us is there can be static gains from trading, meaning a one time change in overall welfare from reducing barriers to trade. In other words trading should not change the long-run growth rate, only the level of output: it increases the size of the pie. (Of course it is possible to increase growth rates from importing technology, but this is not allowed in the assumptions of the model outlined above, so I am getting a little ahead of myself). Protectionism then, improves the lot of a sector or sectors at the expense of the whole. While not really part of the model, those who observe that trading entails more competition in the market argue that trading yields dynamic gains as well, inducing producers to up productivity. But here is the evidence is unclear which way causation runs: does trading cause firms to be more productive or is it that more productive firms tend to trade?

What Matthew Yglesias doesn't know is that these are the assumptions underlying the study he points to on the benefits of trade. Part of the reason economists make these assumptions is that it makes the math much easier to do in the models that predict how great trade is for everyone. As Peter Dorman illustrates, what comes out of the magicians hat is determined by what the magician puts in the hat in the first place.

When we start relaxing the assumptions outlined above, as we can clearly see they do not reflect the reality of our world, and start introducing other realities such as highly volatile exchange rates or the fact that most trade occurs within the related subsidiaries of multinational corporations, things get a little stickier. It is no longer clear that free trading always does grow the pie. Accounting for the “polluting politics” that DeLong decries, clearly someone is winning from “free” trade, but when the assumptions are relaxed we again can find that a sector or sectors are benefiting while the whole is losing.

Just about everyone these days will admit that trade produces winners and losers, usually while muttering some postscript about the need to improve our system for compensating the losers and helping them adjust to life as a loser. Lip service does not exonerate the mutterers, but in fact we live in a society where the losers compensate the winners—just pick up any Krugman column on the budget or Social Security to see this point. Ponder this: the Stolper-Samuelson theorem of trade predicts that trade in the US will increase the wages of skilled workers (the relatively abundant factor) and decrease the wages of unskilled workers (the relatively scarce factor). If we take common conventions and define unskilled workers as those without four-year college degrees, this means that some 75 percent of the American workforce stands to have their wages decreased by trade.

Economists don’t really have very good ways to measure the direct effects of trading on peoples’ living standards, and when they try to do it they results suggest that, low and behold, trading doesn’t have all that big an effect. For example, the World Bank forecast of gains from the pending Doha Round of trade liberalization predicts income gains of 1.5% for Sierra Leone. In other words, by 2015 Sierra Leone’s per captia income will be $583 without Doha and $592 with Doha. Woohoo! (Note that this is based on a similar type of model that Yglesias cites and that Dorman debunks).

On the US side, economists estimate that trade accounts for anywhere from roughly 10-50 percent of the total of roughly 30 percent decline in real wages since the mid-1970s. The rest of the decline in wages goes pretty much unexplained, but someone came up with a catchy name for this residual effect: “skill-biased technological change.” (Yes, soon to be embossed on little yellow rubber wrist bands and sold for a dollar a pop at Wal-Mart checkout counters). Despite not really being able to measure the effects of technological change, it soon became mantra that this thing which no one could explain must be due to the technological change that we can’t measure.

But there are other things we can’t measure that may also be related to free trade. I’m talking about threats. When capital is freely mobile to locate investment/production anywhere of its choosing, communities will bid against each other in terms of wages and tax breaks in order to attract investment and jobs. This can result in eroded wages and social safety nets even if no trade or movement of production/jobs takes place. Even though this decline in living standards may be due to globalization, because no trade or foreign direct investment occurs, economists have a hard time measuring its effects. This phenomenon can drive down wages in North-South competition as well as in South-South competition.

Over the past decade or so, countries comprising roughly half the world’s population have decided to rejoin the world community: China, India, the former Soviet Bloc, etc. All things being equal, this is a good thing: good for the people of those countries, good for the world community. But it also introduces vast swathes of really poor people into the pool of global labor supply from which globally mobile capital can draw. That’s one hell of a “Reserve Army” effect—a lot more people to through into the bargaining.

Implicit in the DeLong/Yglesias/et. al. argument for trade is that these people are ignorant to their best interests—GASP! they are not acting as rational utility maximizers! They are too ignorant to know what is good for them, and that’s why it is so critical that unions and other democratic civil society groups need to be shut out of the decision making process in which international trade and investment policies are created.

Not only is this view insultingly arrogant, but I think it is plain wrong. I prefer to give people more credit. They know full well (or at least strongly suspect) what trade means to their living standards and livelihoods and are acting rationally to oppose it (or, in the case of bourgeois liberals like Yglesias, to support it).

I am utterly baffled as to how DeLong, Yglesias, Krugman, and many, many other smart and progressive people can see and work to illuminate the royal screw job embodied in almost every economic policy pursued by the Bush administration, but when it comes to trade they put it in a “lock box” (sorry Al) and defend it at all costs. Is it so difficult to take that last step?

Thursday, June 09, 2005


Or at least Fox News quoted him as saying it:

BUSH: ...You know, I've always tried to lower expectations, and I feel like if people say, well, you know, maybe, you know, I don't think you handle the tough job, and when you do, it impresses people even more.

CAVUTO: Yes. He [John Kerry] was billed as the intellectual, though, and you had better grades in college.

BUSH: Yes. Well, as I said, I like to lower expectations.



That is, if you consider 55 Republicans and 1 Democrat a bipartisan majority. The roll call is in...and the rat finks are:

55 Republican Senators
1 Ben Nelson of Nebraska
1 Jim Jeffords of Vermont who declined to vote despite deciding not to run for re-election and therefore having nothing to lose from opposing Brown.

Apparently, a proclivity towards statements of grand hyperbole does not disqualify someone from the bench in Nelson's book.

Speaking of going nucleur, the Democrats got absolutely hosed on this fillibuster "compromise." The Republicans gave up nothing. The Democrats got nothing but caved on fillibustering these lunatic jidges. They should have just forced a confrontation and let the Republicans blow the damn thing up.

We'd be in the same position now, but the country would have seen what rabid, frothing-at-the-mouth Republican power lust looks like.


After recent revelations that the Bush administration censored the science on global climate change, Bush is finding it harder and harder to simply ignore the issue (especially when Tony Blair wants to press it at the G-8 meeting).

I'm not sure this is especially newsworthy, other than for the emergence of more hard evidence:

After all, wasn't the administration's white wash of global warming in the 2002 US Climate Action Report one of the indignities that led EPA chief Christine Todd Whitman to resign?

So when Tony Blair came over to play on Tuesday, Bush could no longer ignore the issue:

" In terms of climate change, I've always said it's a serious long-term issue that needs to be dealt with. And my administration isn't waiting around to deal with the issue, we're acting. I don't know if you're aware of this, but we lead the world when it comes to dollars spent, millions of dollars spent on research about climate change. We want to know more about it. It's easier to solve a problem when you know a lot about it. And if you look at the statistics, you'll find the United States has taken the lead on this research."

To summarize, the Bush administration doesn't want to do anything about global warming until we know more about global warming, yet the United States is already leading the world in knowing about global warming. So, putting aside for a moment that the Bush administration has buried, stymied, and ignored important research into global warming (for example the National Academy of Sciences report that begins,"Greenhouse gases are accumulating in Earth's atmosphere as a result of human activities, causing surface air temperatures and subsurface ocean temperatures to rise. Temperatures are, in fact, rising."), more research on global warming is needed before we can decide what to do about it.

And yet, in the next breath, Bush seems not only to know the cause of global warming (carbon dioxide waste from burning fossil fuels), but he already has a solution to the problem to pursue:

"I don't see how you can be -- diversify away from hydrocarbons unless you use clean nuke."

Despite the obvious logical inconsistencies (nobody ever claimed Bush a logician), the solution presented is refreshingly Bushian. How will we fight the threat of global warming?

Let's nuke 'em!

Wednesday, June 08, 2005


Josh Marshall has some new info on our old friends over at Koch Industries.

Koch, no surprise, is financing an anti- anti-social security privatization (that is, pro-privatization) rally outside tonights Rock the Vote awards dinner. Why? Rock stars = media coverage.

Monday, June 06, 2005


What I'm reading today: Top 10 Ways to Destroy the Earth

Mission statement

By any means necessary, to render the Earth into a form in which it may no longer be considered a planet. Such forms include, but are most definitely not limited to: two or more planets; any number of smaller asteroids; a quantum singularity; a dust cloud.

To make the list, a method must actually work. That is, according to current scientific understanding, it must be possible for the Earth to actually be destroyed by this method, however improbable or impractical it may be.

...This is not a guide for those whose aim is merely to wipe out humanity. If total human genocide is your ultimate goal, you are reading the wrong document.

That's the mission, here is my favorite choice quote (of which there are many):

"Hurl the Earth into the Sun. Sending Earth on a collision course with the Sun is not as easy as one might think...This is impossible at our current technological level, but will be possible one day, I'm certain."

The confidence of these geonihilists is utterly ingectious:

"[A]fter locating your black hole, you need get it and the Earth together. This is likely to be the most time-consuming part of this plan. There are two methods, moving Earth or moving the black hole, though for best results you'd most likely move both at once...Very difficult, but definitely possible."

I'll say it again: NERDS!!!!

Friday, June 03, 2005


This morning I decided to start a new, regular feature on Globalize This!: Why I Don't Like David Brooks. Yesterday, Brooks opted to rail against the wildly successful European welfare state...those stubborn old world Europeans just won't face the facts of living in a globalized economy. For Brooks, who will henceforth be known as Bobo, social welfare systems are about as passe as Prussian monocles. And Bobo knows what's best:

" is not the absolute standard of living that determines a people's morale, but the momentum. It is happier to live in a poor country that is moving forward - where expectations are high - than it is to live in an affluent country that is looking back."

And Bobo knows because Bobo has lived in so many poor countries--Bobo knows what poor people think, what makes them happy. So by Bobo's logic, workers living in China, which is on the rise, should be happier than workers living in the United Kingdom, which has been on the descent since roughly the 1940s. Hmmmm...

What Bobo doesn't know, apparently, is that he lives in perhaps the largest social welfare state in the world. As it happens, though, the American welfare state is of a different breed known as a "market-reinforcing welfare state." The market-reinforcing welfare state is designed to provide welfare for people like Bobo who are already socioeconomic winners. In order to qualify for benefits in this welfare state, one already has to have substantial income and wealth. This type of welfare state is markedly different from the more egalitarian social welfare benefits provided by European governments, the Canadian government, and many other governments.

Bobo receives government subsidies for health care. Bobo never sees the subsidy, the government does not provide it directly to him or directly to Bobo's caregivers, but instead provides it in the form of tax credits to Bobo's employer for giving Bobo health insurance. Bobo also receives government subsidies for housing and pensions in the form of income tax deductions he takes for interest payments on his mortgage and contributions to tax sheltered retirement savings plans (401Ks, IRAs, and more complex investment instruments that most regular folk haven't heard of). The value of benefits Bobo gets from this type of welfare statism undeniably dwarfs to, say, a single mother who moved from welfare to work and is receiving food stamps, Medicaid, child care subsidies, and is living in public housing. So it's not that Bobo is against welfare statism, he is only against a more equitably distributed welfare state.

Bobo pretends (or ignorantly believes) that Europe's welfare statism is the reason for Europe's economic malaise (or what some call Eurosclerosis), as opposed to, say, the contractionary bias of the European Central Bank's inflation-targeting policy or the fiscal policy straight-jacket embedded in the stability pact that underlied creation of the Euro currency. Thus, Bobo concludes, Europe's welfare statism is to blame for the fact that European incomes are comparable to those of Arkansans.

But wait...Bobo's point is egregiously misleading for at least two (and a half) reasons. First, the half reason, a technical point. I'm not sure how Bobo is comparing the Arkansan and European per capita incomes. My guess is he is using purchasing power parity exchange rates (PPP), which is to say the implied exchange rate based on relative consumer prices in the two countries. Punditocrats like Bobo love to use the PPP rates because it makes them appear to know about technical economic issues about which they know very little or nothing. With the way the Euro-Dollar exchange rate has been going for the past 3 years or so, it's fair to say that this approach understates European incomes relative to American incomes.

But for the moment accepting Bobo's numbers, the first full reason Bobo's point misleads is that Europeans incomes are lower because, on average, they work 250 hours less than Americans every year. If you believe in utility theory where rational households choose to allocate their time between working and leisure in order to maximize their happiness (utility), then Europeans are happier (and better off) taking an additional 6+ weeks of vacation (relative to American vacation time) than they would be if they were to work the same amount as Americans and have commensurately higher incomes. This model of the world, though perhaps oversimplified to a fault, is what underpins almost all economic theory. But Bobo doesn't need to bother with economic theory, because Bobo knows what makes people happy (see above quote).

The second reason is that European incomes can be lower because many of the important things they consume, such as health care and public transit, are paid for by the welfare state and not out of household incomes.

I hope you've enjoyed this installment of "Why I don't like David Brooks." Stay tuned for many more of my Bobo counter-rants.