McCain 08 Gingrich

It’s a long weekend where I’m from, if not (by any means) where I am. Why work? So – openly defying the suggestion that I’ve no right to criticise my hosts, here are two thoughts that have really taken hold in the last several days:

1. Gingrich is the best running mate McCain can have. Possibly the only one.
2. McCain-Gingrich will win.

Gingrich has the same moronic ‘tough’ caricature that McCain has managed to build (how? No idea – but have you read a newspaper or watched CNN lately?). He’ll also remind the brainless of the glory days of the Gingrich revolution – back when things worked because the New (read: crazy, racist, classist, elitist, paranoid, nasty, corrupt and utterly utterly useless¹) Republicans just hadn’t had the time to pour raw sewage into the functioning systems of nearly every aspect of life. And, by now, all the stuff about cheating on and leaving his sick wife won’t matter.

It’s also reminded me that reading Warren Ellis during election time may not work so well.

The weird thing is, a lot of Transmetropolitan’s “Beast” reminds me of Clinton – as does a lot of the “Smiler”. Should I just not worry until I hear kids near alley-ways greeting me with “Business, mister?”? I don’t know.

¹In no particular order: Gingrich himself; Mark Foley; Denny Hastert; Tom DeLay; Bill Frist; David Hager; Michael Brown; Poindexter; Wolfowitz; Bolton; Rove; Ashcroft, John Yoo. Those terrorist memos. I’m too depressed thinking about the whole travesty to even continue the list. For God’s sake, at least Nixon went to China and started the EPA. These psychos started out nasty and corrupt and incompetent.

Remember – who you vote for is mostly important because of who you elect (i.e. who is given a job by the person for whom you vote. You only get to vote for a candidate, but you elect an administration – Americans have yet to learn that very important lesson, I think).

Cafe Hayek, meet the Treasury Department

The US Treasury Department on Thursday said it agreed with Abu Dhabi and Singapore on a set of principles for sovereign wealth funds that specifies politics should not influence their decisions.

The foreign-controlled funds, many based in the Middle East, have aroused U.S. lawmakers’ concern because they have poured billions of dollars into large stakes in Wall Street firms and other businesses and fanned fears the U.S. was losing control of its destiny.

…

The Treasury has been pressing since last autumn for the IMF to develop the ”best practices” guide. The funds have become increasingly active in buying U.S. assets with growing foreign exchange reserves from oil and international trade.

And that would be Don Boudreaux of Cafe Hayek – who would most likely remind us of the practicalities of trade: running up monster deficits, needing and attracting capital, one gets the idea.

Mostly I’m just unsympathetic to such boorishness by a system that desperately needs the food, even while it bites the hand providing it. I sure do like to see tribalism weed its way into both international relations and international finance, though.

This is the feeling we learn to live with in North America

I guess it’s just the day for it.

(put NOFX and Fooly Cooly together – I’m happy).

The New England Journal of Medicine (I’ve really taken to the idea of Wednesday being NEJM Day) has three terrific editorials starting it off, this week – all related to (hand)guns. It’s hard, for example, not to be mightily impressed by the likes of how “Handgun Violence, Public Health, and the Law” kicks off:

Firearms were used to kill 30,143 people in the United States in 2005, the most recent year with complete data from the Centers for Disease Control and Prevention. A total of 17,002 of these were suicides, 12,352 homicides, and 789 accidental firearm deaths. Nearly half of these deaths occurred in people under the age of 35. When we consider that there were also nearly 70,000 nonfatal injuries from firearms, we are left with the staggering fact that 100,000 men, women, and children were killed or wounded by firearms in the span of just one year. This translates into one death from firearms every 17 minutes and one death or nonfatal injury every 5 minutes.

By any standard, this constitutes a serious public health issue that demands a response not only from law enforcement and the courts, but also from the medical community.

A very interesting perspective – that handguns and handgun violence represent not only a public health issue, but such a one that we are obliged to respond from within our profession. Remember the excellent book/site Understanding the USA?

The two editorials proper are “Guns, Fear, the Constitution, and the Public’s Health” and “http://content.nejm.org/cgi/content/full/NEJMp0801601?query=TOC” – the former the more relevant (which is not to suggest the latter is not interesting in its own right, focussing specifically upon the issue at hand: District of Columbia v. Heller, a case challenging handgun-control statutes adopted in 1976 in Washington, D.C., and currently being heard by the Supreme Court):

Gun violence is often an unintended consequence of gun ownership. Americans have purchased millions of guns, predominantly handguns, believing that having a gun at home makes them safer. In fact, handgun purchasers substantially increase their risk of a violent death. This increase begins the moment the gun is acquired — suicide is the leading cause of death among handgun owners in the first year after purchase — and lasts for years.

The risks associated with household exposure to guns apply not only to the people who buy them; epidemiologically, there can be said to be “passive” gun owners who are analogous to passive smokers. Living in a home where there are guns increases the risk of homicide by 40 to 170% and the risk of suicide by 90 to 460%. Young people who commit suicide with a gun usually use a weapon kept at home, and among women in shelters for victims of domestic violence, two thirds of those who come from homes with guns have had those guns used against them.

Handguns, like cars, like fatty food, like a great, great many things, simply kill way too many Americans. If only it were acceptable to use “9/11” as a unit of comparison – handgun-related-fatalities being around 10 of them every year. What’s insane is that the same lunatics (say, the GOP) who defend such a thing go around insisting that abortion is the reason the US economy is in trouble – because all of those potential American Workers were killed in the womb. Go figure.

Huckabee called abortion a holocaust because he says “we have aborted more than a million people” in the last 35 years. I’m willing to bet guns have killed more than that. Worse, they’ve probably killed plenty of women who could have given birth! (my cheap shot).

Personally – and I realise full-well that I’m a foreigner with no claim to any sort of up-bringing within the 2nd Amendment – the idea that the 2nd Amendment protects individual rights to bear arms is a little crazy. For a start there’s a “the” before “people”, clear as day. It’s written down, for Cliff’s sake – it isn’t like it’s Neal Armstrong, or anything.

Back to regarding the title of this post (and the song of the link of the youtube clip at the top):

It’s like seeing a car crash from inside the car
The driver’s got his head craned back he’s telling you a joke
You see the bus on collision course
You point your arm and turn your head and wait for the impact
This is the feeling we learn to live with in North America
The morning headlines always accompanied with sweat and nausea
Every week another puzzle piece gets permanently glued into place

We see the iceberg from 15 miles away
The captain orders the ship to “stay the course”
“Full speed ahead” shouts the accursed
The next thing we heard was, “Rich women and children first”
The ship is listing, the captain’s placing blame on the iceberg
“That berg attacked us, I am declaring war on the Arctic”
Who could ever have predicted the greatest ship could so easily sink (duh)

Lifeboats are useless without rescue
The only ships show up for salvage
When setting sail on the St. Louis
We all knew what consequences could be
With the crew we had at the controls

On the doing of body counts

The quote for the day –

Lieutenant General Tommy Franks, who led the invasions of Iraq and Afghanistan during his time as head of US Central Command, once announced, “We don’t do body counts.”

He, of course, had nothing on a certain former first lady:

But back to the story.

… five years after Bush and Tony Blair launched the invasion of Iraq against the wishes of a majority of UN members, no one knows how many Iraqis have died. We do know that more than two million have fled abroad. Another 1.5 million have sought safety elsewhere in Iraq. We know that the combined horror of car bombs, suicide attacks, sectarian killing and disproportionate US counter-insurgency tactics and air strikes have produced the worst humanitarian catastrophe in today’s world. But the exact death toll remains a mystery.

There is no shortage of estimates, but they vary enormously. The Iraqi ministry of health initially tried to keep a count based on morgue records but then stopped releasing figures under pressure from the US-supported government in the Green Zone. The director of the Baghdad morgue, already under stress because of the mounting horror of his work, was threatened with death on the grounds that by publishing statistics he was causing embarrassment. The families of the bereaved wanted him to tell the truth, but like other professionals he came to the view that he had to flee Iraq.

An independent UK-based research group, calling itself the Iraq Body Count (IBC), collates all fatality reports in the media where there are two or more sources as well as figures from hospitals and other official sources. At least four household surveys have been done asking Iraqis to list the family members they have lost. The results have then been extrapolated to Iraq’s total population to give a nationwide estimate.

The results range from just under 100,000 dead to well over a million. Inevitably, the issue has become a political football, with the Bush administration, the British government and other supporters of the US-led occupation seizing on the lowest estimates and opponents on the highest.

It is a long and fantastic article about the trouble involved in trying to get estimates of dead civilians when the corporation making them won’t co-operate. For those of you who’ve not been to the site of the Iraq Body Count, you really should:

247 dead: Last week’s death toll (as counted by Iraq Body Count)

Monday March 10 – 34 dead
Including Dr Khalid Nasir, the only neurosurgeon in Basra; sheikh Thair Ibrahim and his five-year-old niece, killed by a female suicide bomber; 10 people killed by a suicide bomber; and a mother and son killed by gunmen.

Tuesday March 11 – 90 dead
Including a couple kidnapped the week before; 16 members of a family returning from a funeral, killed by a roadside bomb; three killed in a US air strike; and 20 people whose bodies were found in a mass grave.

Wednesday March 12 – 24 dead
Including a 10-year-old girl killed by US forces; five shot and beheaded at a checkpoint; and three truck drivers killed in a roadside bomb.

Thursday March 13 – 39 dead
Including a journalist killed by gunmen; 18 people killed by a car bomb in Baghdad; a 15-year-old girl shot dead by police; and Archbishop Paulos Faraj Rahho.

Friday March 14 – 15 dead
Including ex-footballer Munther Khalaf, killed outside his home by a group of armed men; a street sweeper killed by a roadside bomb; an Iraqi interpreter, killed by a suicide bomber; and the son of the chief of al-Kharaj tribes, killed during a raid by joint forces.

Saturday March 15 – 19 dead
Including Hussein Awda, killed by gunmen; three brothers; and an Iraqi contractor, Athir Ibrahim.

Sunday March 16 – 26 dead
Including two policemen killed in an armed assault and 16 others whose bodies were found, including that of an 11-year-old boy.

icasualties.org is another site worth visiting. Amongst other things, it might just remind you of how many non-civilians have died, also (since surveys here in the US show fewer people than ever know these numbers – rather relevant ones, one would think – 3988 confirmed by the DOD, by the by):

Green tech: USD20tr of fictitious wealth

According to Eric Janszen:

Eric Janszen is an angel investor and founder of the contrarian market website iTulip.com, which The New York Times credited with “accurately predicting that the [internet] bubble would pop.” Now Janszen believes the American economy needs a fundamental restructuring away from its foundations in finance, insurance and real estate. His prescription: a new bubble based on green technologies.

In a widely discussed Harper’s article in February, “The Next Bubble: Priming the Markets for Tomorrow’s Crash,” Janszen argued that clean tech is the only sector that could create enough “fictitious value” to replace the losses from the housing bubble, if only temporarily.

Much more interesting than the (so far, for me) dull world of current financial meltdown (meltdowns? Melts-down? I don’t know). Janszen made an interesting argument in his Harper’s essay:

Nowadays we barely pause between such bouts of insanity. The dot-com crash of the early 2000s should have been followed by decades of soul-searching; instead, even before the old bubble had fully deflated, a new mania began to take hold on the foundation of our long-standing American faith that the wide expansion of home ownership can produce social harmony and national economic well-being. Spurred by the actions of the Federal Reserve, financed by exotic credit derivatives and debt securitiztion, an already massive real estate sales-and-marketing program expanded to include the desperate issuance of mortgages to the poor and feckless, compounding their troubles and ours.

That the Internet and housing hyperinflations transpired within a period of ten years, each creating trillions of dollars in fake wealth, is, I believe, only the beginning. There will and must be many more such booms, for without them the economy of the United States can no longer function. The bubble cycle has replaced the business cycle.

“The bubble cycle has replaced the business cycle.” I shall have to remember that one, come macro (a few lectures hence). Back in his Wired interview, he had something even more creative:

Wired: What do you see as the nascent financing and credit vehicles that could come up with the trillions of dollars needed to finance clean tech without creating a bubble?

Janszen: One way to do it is to put a floating tariff on the price of oil and gradually raise the price up to $200 or $300 a barrel. As long as you do it gradually, the economy can respond to it. That’s the beauty of our system. It has responded very calmly to an increase from $20 to $100. The economy hasn’t collapsed. It’s definitely slowing, but it’s not wrecking it. You could create a process that gradually forced a lot of relatively painless transition without wrecking the economy.

That’d certainly make things a lot more interesting…

Numbers, numbers: the Fed has committed half its money so far

An answer, an answer! To my question about just how much “money” has been handed out at the altar of M3. From Krugman’s blog:

If Steve Waldman has his math right — that is, if we’re interpreting the Fed’s statements correctly — Bernanke and co. have now committed $400 billion to TAF, repos, TSLF. That’s almost half the Fed’s balance sheet effectively placed in non-standard assets. Wow.

That’s Steve Waldman of Interfluidity, whose extensive posts on the matter are most satisfying.

Krugman also mentions the latest foray (the quite daft Term Securities Lending Facility):

So basically the Fed is going to be swapping Treasuries for dubious securities, in an attempt to give the market a REALLY BIG slap in the face.

Similarly panned at the blog the Big Picture, who also advises going “crazy short” if the market’s spiv rally starts to fade (I would say “when”, but I’m a pessimist. “Spiv”, by the way, is an Australian term – actually it’s from all over, but used still in Australia to describe something that looks good on the surface, but whose sheen will soon fade as it falls to bits around you).

“Spiv” economy is, for me, a pretty decent catch-all for this government, its economy and all of its economic credentials (their orchestra isn’t too too bad). Good on the surface, talked-up like all good games but, faced with the famous question of Donald Sutherland:

Pinkley: [impersonating a general] Very pretty, General. Very pretty. But, can they fight?

No – it/they cannot fight. Oh, for a body of government that hadn’t eaten Fukuyama for bloody breakfast every morning for a decade!

The water thing

Speaking of not getting along so well when water is an issue:

Lawyers for Georgia, Florida and Alabama are gearing up again for battle, now that tri-state water negotiations have collapsed and the federal government says it will decide how to dole out water rights.

…

At the same time, the Army Corps of Engineers and the U.S. Fish and Wildlife Service will soon issue a short-term water operations plan — a move that could set off a fresh wave of legal maneuvering.

So the Federal Government is moving in. Ah: reminds me of home.

The dispute, by the by, is over things like this:

“Everyone wants to eat like an American on this globe”

Don’t ever forget that this is exactly the problem – and why not? Remember the famous words of Oscar Brown Jr: “You so rich and free and fat; Son-of-a-bitch that’s where it’s at!”

Whether an American, Brit, Netherlander – it doesn’t matter. Plenty of people on this Earth are rich and fat and clean. We bang wives made out of girls from Ipanema, buy, wear, drive and eat whatever we like and send our kids off to University to learn how to do even better than us. Good God, man, who wouldn’t want a part of that?

From the New York Times:

Everywhere, the cost of food is rising sharply. Whether the world is in for a long period of continued increases has become one of the most urgent issues in economics.

Many factors are contributing to the rise, but the biggest is runaway demand. In recent years, the world’s developing countries have been growing about 7 percent a year, an unusually rapid rate by historical standards.

The high growth rate means hundreds of millions of people are, for the first time, getting access to the basics of life, including a better diet. That jump in demand is helping to drive up the prices of agricultural commodities.

Farmers the world over are producing flat-out. American agricultural exports are expected to increase 23 percent this year to $101 billion, a record. The world’s grain stockpiles have fallen to the lowest levels in decades.

The article mentions, interestingly, how fortunate farmers are (one, in particular – what’s a newspaper story without an anecdotal anchor, after all?). I’m not so convinced. Costs are increasing for them, also. Fuel and food are big parts of their factor costs and, while they can certainly extract greater rent from Consumer (non-lexicographically-inclined readers, this means jack up the price to make more profit), even the mere perception of this is going to put signficant strain on America’s thoroughly embarassing farm welfare. Meanwhile those costs are appreciating rapidly, just as they are for the rest of us (the NYT does mention this). The only difference is that farmers are producing one of the inflating-price goods: how’s your control over the labour market going, these days? Yeah, didn’t think so.

This – the death of farm welfare – is a good thing, certainly – provided it comes off. More likely is that, with even greater control as a lobbied-for group, farmers will also extract rents from Governments trying to get them to grow basic foodstuffs for the common good (not, for example, mustard seeds – and yes, David, I know ‘the market’ should sort all of that out).

In all this, though, what the writer really nailed was one of the two causes: global demand (the other is crop yields – maybe climate change (I think so), maybe not):

As the newly urbanized and newly affluent seek more protein and more calories, a phenomenon called “diet globalization” is playing out around the world. Demand is growing for pork in Russia, beef in Indonesia and dairy products in Mexico. Rice is giving way to noodles, home-cooked food to fast food.

Though wracked with upheaval for years and with many millions still rooted in poverty, Nigeria has a growing middle class. Median income per person doubled in the first half of this decade, to $560 in 2005. Much of this increase is being spent on food.

Nigeria grows little wheat, but its people have developed a taste for bread, in part because of marketing by American exporters. Between 1995 and 2005, per capita wheat consumption in Nigeria more than tripled, to 44 pounds a year. Bread has been displacing traditional foods like eba, dumplings made from cassava root.

…

Mr. Ojuku, the man who buys fewer loaves, and one of his fellow tailors in Lagos, Mukala Sule, 39, are trying to adjust to the new era.

“I must eat bread and tea in the morning. Otherwise, I can’t be happy,” Mr. Sule said as he sat on a bench at a roadside cafe a few weeks ago. For a breakfast that includes a small loaf, he pays about $1 a day, twice what the traditional eba would have cost him.

To save a few pennies, he decided to skip butter. The bread was the important thing.

“Even if the price goes up,” Mr. Sule said, “if I have the money, I’ll still buy it.”

Eco 1 students, for the extra credit: is Mr. Ojuku behaving rationally?

Free trade: I heard ’em say it was all about the Benjamins

I have a wobbly relationship with Cafe Hayek. Specifically, I’m a screaming leftie tit, and they’re a mite too free trade for my tastes. I’m Austrian only to the extent that governments should be no bigger than they must be to get things done – but we part company on the matter of exactly how much a government should be doing.

That out of the way. They have been discussing the protectionist rhetoric of Presidential candidate-candidates (that seems right) so far. We talked about this in class, back when we looked at comparative advantage and international trade. Having run through the basics of tariffs, quotas, etc., and how protectionism is about restoring Producer Surplus, we consider how much Consumer Surplus is lost in the process. The question is, what price a job saved? Our textbook has a few figures:

Is it worth the loss in Consumer Surplus of this scale? Bear in mind that the cost is spread across the many consumers, but one is hard-pressed to defend USD50-odd million per job in the rice industry.

In class we discussed “dog whistle” politics – the use of coded language that is meaningless to most of us, but appeals directly to a specific sub-set of the electorate. Going to Michigan and talking about bringing back jobs is an example. “We” hear that, laughingly, while poor bastards in Detroit hear it and, not caring at all the cost to the economy as a whole, like what they hear. And so ad infinitum.

Edwards and Kerry caught my attention in 2004, in this regard, as do Obama and Clinton, now – basically all NAFTA-hassling is dog-whistle protectionism: the only way to come good on the rhetoric is to restrict trade; not for the benefit of all (or for the benefit of under-represented workers in our partner-countries in trade), but for the benefit of a few. Remember the quirk of globalisation/outsourcing/etc.: the benefits are spread very broadly, but the costs are felt very acutely. We respond only to the costs at our peril.

Ultimately I do not like Boudreaux’s “letters” – meaning his responses to the issue. I do think they’re worth reading, though: it’s a dialogue not seen elsewhere. Add Cafe Hayek to your bookmarks for the duration of the election campaign.

Reagan Republicism

Still back with Doonesbury Flashbacks, I noticed this gem – from August 19th, 1981 (click for larger version):

One of many rips into former Interior Secretary James Watt (see The Reagan Years, if you’re interested).

Still – prescient, eh? A demonstration that, indeed, Bush the Younger was the Reagan Republican of our times (he will have presided over two recessions, though).