CapaLEARNo

PV Capacity Additions by Country

2010-08-09T13:41:00.000-07:00

Lou Dobbs Called Out (and Capalearno Blog Catching Some Wreck)

2008-06-24T09:52:00.001-07:00

Courtesy of Migra Matters, a great video clip of Keith Olbermann blasting Lou Dobbs' hypocrisy in bashing illegal immigrants while spending millions for his daughters to compete in a sport - equestrian show-jumping - that employs thousands of illegal workers. As Vicky Moon writes in her book, A Sunday Horse: Inside the Grand Prix Show Jumping Circuit, the sport of show-jumping literally could not exist without the scores of Latino illegals who tend to the horses' less glamorous needs (including, according to Moon, shoveling forty tons of horse droppings a day).

Nor is Dobbs somehow ignorant of the existence of these illegal grooms. Not only would that require colossal blindness, but a friend of mine who rode on the Palm Beach circuit reports occasionally seeing Dobbs playing poker with his daughter's grooms.... perhaps trying to win back some of what he pays them? Think he bothered to ask to see their green cards?

Migra Matters also offered a particularly astute comment on the Olbermann clip:

Of course some in the blogosphere have known this for quite some time...go check em out and show a little comment love for once again doing the work the MSM (except Keith) refuse to do.

Bustard Blog

Capalearno

Damn right! Circulate this clip and hopefully it can move others to publicly denounce Dobbs' hypocrisy.

Carbon or Carbon Dioixde?: Where to Find Sound Climate Policy

2008-05-28T08:27:00.000-07:00

Gristmill explains an importance difference: the precise conversion between carbon and carbon dioxide:

The atomic weight of carbon is 12 atomic mass units, while the weight of carbon dioxide is 44, because it includes two oxygen atoms that each weigh 16. So, to switch from one to the other, use the formula: One ton of carbon equals 44/12 = 11/3 = 3.67 tons of carbon dioxide. Thus 11 tons of carbon dioxide equals 3 tons of carbon, and a price of $30 per ton of carbon dioxide equals a price of $110 per ton of carbon.

Thus, when CTC recommends for 2009 a tax of $37/ton of Carbon - rising gradually to become $370/ton of Carbon by 2019 - this works out to a 2009 tax of $10/ton of CO2 and a 2019 tax of $100/ton of CO2.

The above two sites are careful enough to explain this distinction, which is why there are terrific
sources of information on climate policy. As to official sources, Peter Orszag's CBO Director's Blog is a gem on all matters of public finance, but is particularly strong on climate change. Orszag understands the challenge of climate change and under his leadership CBO has already issued a hugely useful policy study (key finding: for a given amount of economic cost, a carbon tax will achieve roughly five times the carbon emission reductions as a cap-and-trade system.... for the wonks: though the comparison varies depending on how cap-and-trade is structured - whether there is a price "safety valve" for emissions permits, whether permits are bankable - emissions reductions from even the most efficiently designed cap-and-trade system are far more expensive than what is achieved under a carbon tax.

Orszag's leadeship at CBO is estimable, and I take pride that one of his former students - international taxation expert Kim Clausing - taught me at Reed college! We even worked together on a summer research project. Ah, the glory in lineage.

Carbon Tax Center

2008-05-28T08:22:00.000-07:00

I just wanted to explain a bit more about the Carbon Tax Center.

CTC's goal is to build public support for a revenue-neutral tax on carbon emissions, meaning a tax on carbon emissions coupled with a reduction in the federal payroll tax or state sales taxes. CTC's preferred tax begins at $37/ton of carbon, and is scaled up over ten years to $370/ton of carbon. Structuring a carbon tax so that it is revenue-neutral offers several advantages:

a) coupled with reductions in the payroll tax, a carbon tax will not make the U.S. tax code more regressive

b) revenue-neutrality will be critical to attracting the political support necessary to get the per unit tax rate high enough where it can make a sufficient dent in emissions

c) existing U.S. subsidies to alternative energy have wrought only harm - namely a boom in corn ethanol that raises food prices, brings no net reduction in carbon emissions, and distorts incentives for producers of genuinely clean energy - thus it makes more sense to return extra revenue to the taxpayers rather than to let lawmakers pursue more wrongheaded subsidies

Read more about these points on the CTC website; maybe even think of someone to fund our conference!

Bloomberg on Congestion Pricing

2008-03-19T08:30:00.000-07:00

This morning’s Crain's Breakfast gave Mayor Bloomberg a chance to make a final push for his congestion pricing plan before the March 31 deadline, when the NYS Legislature must either approve the plan or lose $354 million in federal transportation funding.

Bloomberg’s speech was effective: after laying out the costs of traffic in Manhattan’s central business district – an estimated $13 billion in lost time and fuel, reduced business productivity, increased emissions of carbon monoxide (asthma) and carbon dioxide (global warming) – the Mayor addressed four criticisms of his plan. He argued that: a) congestion pricing fees will raise significant revenue specifically for mass transit improvements (estimated that the revenue stream would bond out to $4.2 billion, and that without this stream MTA capital investments will require again raising fares) b) congestion pricing won’t create parking lots on the boundaries of the central business district (no parking spaces in these neighborhoods anyway) c) congestion pricing scheme is not regressive (the small minority of New Yorkers who drive to work are on average well above median income d) exemption of congestion fees for New Jersey drivers is reasonable since they already pay $8 tolls to the Port Authority to get to Manhattan, and half of that money goes toward New York transportation needs. Bloomberg concluded by noting that he was meeting with Patterson and other officials in Albany this afternoon to urge action on his plan.

Bloomberg was followed by Transportation Secretary Mary Peters, who urged approval of congestion fees, noted their success in other cities, and made a somewhat confused observation about the number of hours NYC residents spend in traffic each year (either than the average resident spends 49 hours a year in traffic (which seems low), or that congestion fees would reduce time per resident spent in traffic by 49 hours).

In the Q&A with journalist Bloomberg gave feisty responses, describing an objection by Congressman Weiner to congestion fees as “the stupidest thing I’ve ever heard” (Weiner argues that congestion pricing will have no benefits, because whatever money NYC raises through fees will be offset by declines in federal transportation grants at the demand of anti-New York Republicans. Bloomberg responded that – it is Weiner’s job to help secure such funds, Democrats control Congress, and by Weiner’s logic New York City should eliminate all taxes and wait for federal money to fill the void).

In response to a question, Bloomberg acknowledged that a logistically easier way to reduce Manhattan congestion and raise revenue for mass transit would be to simply place tolls on East River bridges. He explained his reluctance to pursue this strategy by noting that “toll politics are extremely difficult”, but suggested that in the city’s gloomier economic climate citizens might become more open to formerly taboo revenue-raising measures.

All in all a good breakfast – let's hope its message was heard in Albany. Not only is Bloomberg's congestion plan strong on the merits, it represents a crucial test of New York elected officials' willingness to embrace market-based solutions to public problems. When people drive into Manhattan's central business district at peak hours they are using a scarce public resource, not to mention causing harm to others in the forms of delayed travel and polluted air; why souldn't drivers be forced to pay for this privilege?

LA Debate

2008-01-31T19:02:00.000-08:00

Despite the absence of important issues (climate, energy), one hell of a debate. Either one of these candidates will make a formidable general election candidate and terrific President....

.....and we celebrate this with the blather of my fellow Dalton alum Anderson Cooper

LA Democratic Primary Debate

2008-01-31T18:55:00.000-08:00

Final Hillary-Obama Showdown..... and nothing about energy policy? Nothing about climate change? Yet we have time for "sex and violence in Hollywood", with panning shots of Steven Spielberg? We've got ice sheets melting people!

The first step in improving political discourse...... replacing Wolf Blitzer.

History at Carnegie Hall

2007-11-29T15:09:00.001-08:00

One of the thrills of living in New York City is the daily opportunity to brush up against history. For example, tonight I will be hearing the soulful a cappella ensemble Sweet Honey in the Rock at Carnegie Hall. The power of these vocalists makes for a memorable experience whatever the venue.

Today, however, WBGO dedicated an hour to celebrating the Voice of America's 1957 recording of the Thelonious Monk Quartet with John Coltrane. The VOA recording captures Monk and Trane playing together at Carnegie Hall, exactly fifty years ago today.

For non-jazz fans, the VOA reels are famous because they represent the only record of a historic collaboration, and because they sat unnoticed in the vaults of the Library of Congress until 2005. NPR tells the story of archivist Larry Applebaum's discovery (and allows you to listen to certain tracks); the New Yorker's Steve Futterman argues that the VOA date may represent both Monk and Trane at his peak. That two frighteningly original artists could team up and each bring out the best in the other - an inspired thought.

Tonight as I glance around the majestic hall, I'll try to imagine how it would have felt to hear "Monk's Mood" floating from the stage. I'll savor the singing a little more knowing that today marks the anniversary of a tour de force by earlier black musicians. And I'll marvel at the incompetence of the VOA in allowing such a brilliant record to collect dust in a library rather than performing its rightful duty of glorifying American culture throughout the globe. It's episodes like this that make you understand why the Cold War took 56 years to win. But that still can't spoil tonight's performance.

Progressive, nee Liberal

2007-11-28T14:50:00.000-08:00

Greg Mankiw features a cartoon mocking liberals who have rebranded themselves 'progressives.' Though funny, the criticism is unfair. All should welcome the switch in terminology simply to undo the semantic perversion of making liberalism synonymous with "big government"," thus distorting the word 'liberal' from its original 18th-century meaning.

Hillary Clinton explains her preference for 'progressive' in a response to a question during the CNN/YouTube debate:

QUESTION:
Mrs. Clinton, how would you define the word "liberal?"
And would you use this word to describe yourself?
Thank you.
(LAUGHTER)
CLINTON: You know, it is a word that originally meant that you were for freedom, that you were for the freedom to achieve, that you were willing to stand against big power and on behalf of the individual.
Unfortunately, in the last 30, 40 years, it has been turned up on its head and it's been made to seem as though it is a word that describes big government, totally contrary to what its meaning was in the 19th and early 20th century.
I prefer the word "progressive," which has a real American meaning, going back to the progressive era at the beginning of the 20th century.
I consider myself a modern progressive, someone who believes strongly in individual rights and freedoms, who believes that we are better as a society when we're working together and when we find ways to help those who may not have all the advantages in life get the tools they need to lead a more productive life for themselves and their family.
So I consider myself a proud modern American progressive, and I think that's the kind of philosophy and practice that we need to bring back to American politics.

Clinton's explanation is entirely correct. From its historical meaning, someone such as Greg Mankiw (who in policy debates consistently supports more "freedom of choice" irrespective of inequality in outcomes) is more 'liberal' than Hillary Clinton.

So let those left-of-center speak with historical precision by identifying as progressives. Now, we just need to correct the folly (more pronounced in the U.S. than in Europe) of describing free trade, open capital flows, deregulation, etc. as "neoconservative" policies when - by removing barriers to individual enterprise - they are in fact "neoliberal."

If the precise use of language in politics seems irrelevant to you... William Safire's Political Dictionary offers 930 pages (!) of reasons to think otherwise.

America and the Age of Genocide

2007-11-26T18:31:00.000-08:00

Samantha Power's 'A Problem From Hell': America and the Age of Genocide is a remarkable book. She goes through Armenians in Turkey, Cambodia and the Khmer Rouge, Saddam and the Kurds, Rwanda (which in 1994, given a country of just 8 million people, experienced "the numerical equivalent of more than two World Trade Center attacks every single day for 100 days), and Bosnia - each time illustrating the harms of U.S. inaction, as well as profiling the few brave dissenters and many silent onlookers. Regrettably, we already need a second edition of the book to chronicle the twenty-first century's first genocide, Darfur. The worthy and effective protests of SaveDarfur and others notwithstanding, America's reaction to this latest massacre has largely followed the script Power writes for all of her twentieth-century cases (Frontline recently broadcast an excellent history of the Darfur genocide entitled "On Our Watch", in which Power appears).

Though too lazy to provide a proper review of this rich work, let me share two passages which encapsulate Power's depressing thesis. First, from the preface, in which Power describes her fascination with genocide emerging from her experiences reporting from Bosnia for the Washington Post (xxi):

Before I began exploring America's relationship with genocide, I used to refer to U.S. policy toward Bosnia as a "failure." I have changed my mind. It is daunting to acknowledge, but this country's consistent policy of nonintervention in the face of genocide offers sad tesitmony not to a broken American political system but to one that is ruthlessly effective. The system, as it now stands, is working. No U.S. president has ever made genocide prevention a priority, and no U.S. president has ever suffered politically for his indifference to its occurence. It is thus no coincidence that genocide rages on.

After surveying U.S. apathy toward five genocides (each case featuring some gallant proponents of intervention), Power diagnoses the following framework (508):

In each case, the U.S. policymakers in the executive branch (usually with the passive backing of most members of Congress) had two objectives. First, they wanted to avoid engagements in conflicts that posed little threat to American interests, narrowly defined. And second, they hoped to contain the political costs and avoid the moral stigma associated with allowing genocide. By and large, they achieved both aims. In order to contain the political fallout, U.S. officials overemphasized the ambiguity of the facts. They played up the likely futility, perversity, jeopardy of any proposed intervention. They steadfastly avoided use of the word "genocide," which they believed carried with it a legal and moral (and thus political) imperative to act. And they took solace in the normal operations of the foreign policy bureaucracy, which permitted an illusion of continual deliberation, complex activity, intense concern. One of the most important conclusions I have reached, therefore, is that the U.S. record is not one of failure. It is one of success. Troubling though it is to acknowledge, U.S. officials worked the system and the system worked.

There you have it. The sins of comission - introducing desicive measures that could go wrong -are less politically risky than those of omission - simply tolerating another genocide. Inaction in the face of slaughter is the result of American political leaders achieving, rather than missing, their aims.

This is a compelling argument. Since elected leaders take their cues from individual citizens, we too bear blame for giving leaders more incentive to dither and obfuscate than to commit to humanitarian action. The Frontline Darfur documentary shows that outspoken individual citizens can indeed pressure their governments into taking some punitive actions agaisnt genocidal regimes. We citizens just need to get better at not waiting until hundreds of thousands have already died before demanding that our government do something. In other words, Presidents and Senators will only risk political capital saving the lives of non-Americans when the political consequences of inaction outweigh those of (inevitably risky and uncertain) prevention.

Another worthy point Power makes is that policy responses to genocide need not be a binary choice between acquiesence and "unilaterally sending in the marines." As U.S. policy in Darfur belatedly illustrates, there are a bevy of measures short of military intervention which can help deter perpetrators and protect innocents. Simply using the bully pulpit to decry the crimes and threaten the criminals can be efficacious. After stressing that the U.S. must share the burden of preventing genocide with our allies and relevant international institutions, Power enumerates a list of responses she believes the U.S. should direct toward every instance of genocide (514, paraphrased here):

publicly identifying and threatening the perpetrators with prosecution, demanding the expulsion of represenatives of genocidal rimes from international institutions such as the United Nations, closing the perpetrators' embassies in the U.S., calling on allies of the regime to use their influence. When warranted, the U.S can establish economic sanctions, freeze foreign assets, deprive foreign killers of the means of destructions. With allies, settin up safe areas for refugees, protected with peacekeepers, airpower, or both. Given the affront genocide represents to America's most cherished values and to its interests, the United States must also be prepared to risk the lives of its soldiers in the service of stopping this monstrous crime.

The last proposal in this list - endangering American soldiers to protect non-American lives -is bound to generate the most controversy. Yet all the items which precede it will in most cases generate widespread support. Rather than charting a policy of genocide prevention by trying to decide first on the most politically contentious issue - as is almost always done - we should pressure leaders to exhaust the full spate of non-groundforce measures, and only when necessary begin to deliberate armed intervention. In other words, we should not allow U.S. leaders to justify inaction in the face of genocide by claiming that the U.S. public "won't accept another Somalia." Powers astutely notes that "If everyone in government is motivated to avoid 'another Somolia' or 'another Vietnam,' few think twice about playing a role in allowing 'another Rwanda'" (510).

The same distortions from hyper-vigilance against "quagmires" afflict the American public at large. Regrettably, as Ron Brownstein and Matt Yglesias have argued, our media rewards journalists for stoking controversy rather than consensus. Thus, discussion of U.S. response to genocide takes its cues from cable news headlines - "SHOULD THE U.S. COMMIT GROUND TROOPS TO DARFUR?" - while largely ignoring less costly policy measures which nonetheless can be useful in saving lives. Until mainstream discussion of genocide prevention corrects this obsession with controversial measures - irrespective of their necessity at the time - public debate will fail to generate effective pressure on public officials. We don't start discussions of health care costs by asking whether we should have a mandatory age of death - why do we start anti-genocide discussions by immediately debating the use of ground troops? This is why a group like SaveDarfur has been so useful for keeping the anti-genocide ball rolling; its campaigns frame the debate in terms of concrete measures - economic sanctions against Sudan, divestiture, enforcement of a no-fly zone, deployment of U.N. peacekeepers - that can reduce killing without having to involve U.S. forces. One hopes the coalitions that comprise SaveDarfur will be a models for future activists.

Power is now a foreign policy adviser to the Obama campaign. Reading her book, as well as watching her on Charlie Rose, gives me only one thought - this woman must be part of the next Presidential administration. Perhaps as Ambassador to the United Nations with a potential promotion to Secretary of State, a la Madelaine Albright?

To grasp why Power would be a valuable addition, consider that too often U.S. policymakers have justified inaction to genocide with appeal to strategic considerations (what Power terms the "fear of jeopordizing" case against intervention). These have ranged from the disgusting - continuing to recognize Pol Pot's genocidal Khmer Rouge because Zbig Brezinksi and others wanted a counterweight to North Vietnam and China - to the merely misguided - such as in 2004-2005, when some State Department (and U.N.) officials warned that pressuring the Sudanese too hard on Darfur would scuttle Khartoum's acceptance of the recently negotiated settlement to Sudan's longstanding North-South civil war (a conflict unrelated to Darfur) - warnings that failed to appreciate how Khartoum was deliberately dragging its heels in regard to the peace agreement in order to buy time to finish the massacre in Darfur.

Power is intimately familair with these strategic justifications, and why they always fail to hold water. If America is ever to begin honoring its pledge of "Never Again,"giving her the President's ear wouldn't be a bad start.

Gisele's Monies

2007-11-19T17:18:00.000-08:00

BBC reports that Brazilian model Gisele Bundchen has asked Proctor and Gamble to pay her in Euros (Gisele's spokeswoman denies the arrangement). Frantic as ever, on Nov. 7 CNBC’s Jim Cramer blamed news of Gisele’s request for fueling a market sell-off.

Lost in the jokes about supermodels becoming arbiters of international finance is this reality – Gisele’s request makes no sense. The reason is that eleven trillion dollar a day entity known as the foreign exchange market. On the forex one can instantly translate dollars into euros for miniscule transaction fees. Thus, if Gisele is genuinely worried that further declines in the dollar will erode her purchasing power, she could just take her lump-sum payment and immediately convert it into euros.

Alan Greenspan made this point a few months ago in his 60 Minutes interview with Leslie Stahl. In one of many futile attempts to divine Greenspan’s views about the market, Stahl mentioned Greenspan’s multi-million dollar book advance and asked, if he had the choice, what currency Greenspan would prefer to be paid in. Greenspan made the above point that the possibility of currency conversion made the currency of payment inconsequential; the choice with real economic consequences, he noted, is in what currency-denomination one holds one’s long-term assets (e.g. U.S. stocks versus European stocks). Unsurprisingly, Greenspan recommended diversifying one’s assets among several currencies to hedge against depreciation risk.

By the way, I’m assuming that Gisele gets a lump-sum payment akin to a book advance. If her P&G contract is pro-rated over several years, then her request to be paid in euros at least has some logical grounding. As a practical matter, however, Gisele still risks shifting into euros at the wrong time. Over the past year the dollar has already lost more than 70 percent of its value against the euro (today it takes $1.46 to buy a euro; a year ago it took 84 cents). Over, say, the next year, can the dollar really fall much farther? Goldman’s Jim O’Neill doesn’t think so, and he is not a prognosticator to be taken lightly. Rather than dabbling in currency speculation, the safest way for Gisele to protect her income is simply to have P&G index her salary to America’s C.P.I. or some other measure of price inflation.

On more substantive currency matters, yesterday's NYT informs us that the dollar hasn’t fallen nearly as much against the Yen (or other Asian currencies) as it has against the Euro. I, for one, hadn’t realized this – and it’s a useful reminder that currency pairs do not all move in tandem.

Also, Paul Krugman has a fine blog post explaining why he is skeptical of prophecies that the dollar’s decline will seriously reignite U.S. inflation (he cites a combination of relatively low pass through from exchange rates to U.S. import prices, plus imports only totaling about 15 percent of U.S. GDP). Always refreshing to see Krugman make the case for stability rather than crisis.

Stahl Disappoints in Greenspan Interview

2007-11-19T17:11:00.000-08:00

This is a bit dated, but for a frustrating spectacle of puff piece journalism, watch Leslie Stahl’s interview with Alan Greenspan (or read the transcript). Over the twenty or so minutes, Stahl devotes more time to Greenspan’s love of the bathtub than she does to his 2001 Congressional testimony that basically endorsed the 2001 Bush tax cuts as fiscally sound (on the specious grounds that Congress had to do something to prevent the government budget surplus from getting too large). She spends more time joking with Andrea Mitchell (Greenspan’s wife) about Greenspan’s adorable nerdiness – mostly in regarding his appetite for sundry obscure economic data (e.g. the price of Canadian versus U.S. timber) – than she does exploring Greenspan’s dubious and narrowly economic rationale for supporting the Iraq war. In his memoir, Greenspan recounts telling President Bush that he had to invade Iraq to prevent Saddam from taking over the Straits of Hormaz and disrupting world oil shipments.

On the Iraq point, Stahl could have challenged Greenspan’s rationale in several obvious ways:
a) What was the evidence that Saddam was actually planning to do commandeer the Straits of Hormaz
b) Even if there was such evidence, were there not means short of war to deter Saddam from acting?
c) Why do the potential harms from Greenspan’s nightmare scenario justify the sacrifice of thousands of American and Iraqi lives?
d) Hasn’t the invasion done its own damage to world oil supplies?

Greenspan’s twisted history aside, my aim here is primarily to show that Leslie Stahl is a lightweight. Whether speaking with liberal or conservative figures, she consistently drifts toward the trivial. It’s disheartening to have to rely on such an unserious journalist to interview our most important public figures But such figures manage to survive (thrive!) in American journalism. One factual mistake - a la Dan Rather - you're out. Steady production of boring, largely uninformative fluff - you're golden.

Atrocities of Saudi Justice.... and Weak U.S. Response

2007-11-16T12:02:00.000-08:00

This article exposes the inhumanity of Saudi Arabia's Wahabbi-based legal system. Not only do the courts sentence a rape victim to lashings - evidently the young woman's crime was being alone in a car with a man unrelated to her - but on appeal the court doubles its punishment! How dare this woman have the temerity to protest her punishment for being raped.

With Wolf Blitzer's questions in last night's Democratic debate about balancing national security with human rights, nowhere is America's selling out of human rights more egregious than in Saudi Arabia. Damn our dependence on Saudi oil! Hillary Clinton famously argued in her 1995 U.N. Beijing address that protecting women's rights is inseparable from protecting human rights; John Edwards now frequently makes the same argument. What will really impress me is when one of these candidates uses the debate platform to blast our shameful alliance with Saudi Arabia, and commits herself to policies that will enable us to sever this alliance with minimal economic harm. Tom Friedman's $1-a-gallon 'patriot tax' on gasoline would be a decent place to start.

If a gas tax is politically impossible, at least use the bully pulpit to call international attention to the horrors of Saudi justice. Perhaps persuade the Europeans to join us in telling the Saudis that neither Boeing nor Airbus will sell aircrafts to Saudi Arabia until it liberalizes its penal code - at the very least ending lashings for rape victims. This probably seems wishful thinking to self-proclaimed 'realists'. but I think it's worth a shot. As DKos argues today, promoting human rights abroad bolsters rather than undermines America's long-term national security.

Vig?

2007-11-14T17:50:00.000-08:00

Whether used by Tony Soprano or your friend with a gambling habit, the term "vig" is everywhere.

Wikipedia offers a good definition. Beyond merely it's Yiddish origin, however, the term is an interesting study in tax incidence. Who "pays" the vig depends on assumptions about the gamblers: whether each gambler has a target amount he is willing to win, a specified amount he is willing to risk, or a tendency to bet more when he believes himself to have an edge.

Wikipedia's vig discussion makes these points very clearly.

NYT Environmental Blogs

2007-11-14T17:43:00.000-08:00

Continuing my practice of simply stealing material from the Times, check of NYT reporter Andrew Revkin's new blog on climate change. Take note, Jason Islas, this will be a good source of information on the environment (though its use of phrases such as "clean air" may require some explaining to you Angelinos).

This NYT blog covers the environment from a business perspective. Also good.

Leonhardt on Why Market Losses Shouldn't Rile the Young

2007-11-14T17:31:00.000-08:00

David Leonhard pens what some other blogger termed a "delightfully contrarian column." Damn right. Leonhardt notes that applauding every rapid rise in the stock market - and bemoaning every decline - is somewhat senseless for people at the beginning of their investment life-cycle (e.g. the young).

Assuming that asset prices cannot climb ever upward at a fast pace, the optimal path is for asset prices to appreciate in an orderly, predictable fashion. From the perspective of a young person in the first ten years of contributing to her 4o1(k), better to have the market increase each year rather than have a massive run-up in the early years (when she won't have as much invested), and then be stagnant for nine years. Though we all want stock markets to rise, for a young person it's better for the bulk of that rise to be concentrated in later years when we have more invested.

Thus, fear not when Jim Lehrer reports the S&P to have a flat day. Just more time to pile in your investment monies before the market swings up again!

Candidates on Chalie Rose

2007-11-08T16:01:00.001-08:00

Charlie Rose's The Candidates series is giving Presidential hopefuls a full hour to discuss their plans for America. The News Hour completed a similar series about a month ago, but the interviews were only about fifteen minutes. Ray Suarez also cannot match Charlie Rose as an interviewer.

Bill Richardson last night, Mike Huckabee last week. Finally some significant air time for the dark horses! It will be interesting to see whether these interviews attract many viewers.

Eating Well in the Rose City

2007-11-08T15:18:00.001-08:00

Continuing my theme of contrasting Portland, Ore. with New York City, let me point out two NYT dining columns on the Portland restaurant scene. The first proclaims a "golden age" of dining in Portland and points to the city's relatively low rents and proximity to fresh ingredients as creating an environment hospitable to experimental young chefs (note also the accompanying slide-show of Portland eateries).

The article's emphasis on cheap access to local ingredients suggests Portland's thriving restaurant scene to be a positive byproduct of the city's Urban Growth Boundary, which preserves agricultural land on the urban hinterland. While some criticize UGB building restrictions for pushing up housing prices, evidently Portland rents remain cheap enough to attract cooking talent! And chefs describe these low rents as enabling them to take risks that would be impossible in a city such as New York, where the need to attract investors arguably produces a bias toward cuisine whose appeal is already well-established.

The second article profiles Michael Hemmeroy's new "One Pot" venture in Seattle. Hemmeroy is an intriguing figure - a master of hype and evidently also of reinventing himself. I only regret coming to Portland too late to sample his homemade gins.

Whiny Frannk Bruni and the 2000 Election

2007-11-08T14:40:00.000-08:00

One never knows where one will come across jarring historical artifacts. Lately the Times Dining Out section has been especially fertile ground. Frank Bruni's column yesterday on "restaurantspeak" reminded me that George W. Bush in 2000 was perhaps the luckiest candidate in American political history.

First a bit of background. Now the Times' Restaurant critic, Bruni was the NYT reporter assigned to cover the Bush campaign in 2000. Bruni's coverage of Bush was famously soft, as is evidenced by his memoir of the campaign Ambling into History: The Unlikely Odyssey of George W. Bush. Publishers Weekly describes Bruni's book as focusing

on the seemingly trivial aspects of Bush's personality, small moments that he believes "reveal every bit as much about Bush as large ones": Bush sticking his fingers in Bruni's ears to indicate something is off the record. Or Bush holding his pinkie to the corner of his mouth … la Dr. Evil in the Austin Powers movies.

This type of anecdote-obsessed coverage was typical of Bruni's reporting throughout the campaign. From the start he seemed smitten with Bush's back-slapping, hail-fellow-well-met persona.

All of which brings me to Bruni's restaurant column yesterday, which he basically devoted to complaining about servers using the word "enjoy" too liberally - as in "are you done enjoying your entree" or "would you like to enjoy some coffee with dinner." Bruni bristles at waiters presuming him to be "enjoying" his dish without even asking. Fair enough. But is this really so annoying as to merit an entire column?

I think this column is noteworthy for exposing Bruni's pettiness, a fixation on style over substance that characterized all of his 2000 campaign dispatches. Bruni seems to simply that a few phrases from the waiter can mar an entire meal, irrespective of how tasty the actual meal is. Similarly, one can imagine him taking a shine to George W. because he was a funny guy - irrespective of his lack of experience or policy knowledge.

Just read the Bruni column and ask yourself: was this really the reporter whom the newspaper of record designated to cover a Presidential candidate? Karen Hughes probably spun Bruni simply by forbidding the campaign flight attendants from telling him to "enjoy" his diet cokes!
Seriously though, Bruni's restaurant criticism's sensitivity to irrelevant details (I thought a restaurant critic was supposed to write about food) does give some insight into his weakness as a political reporter.

Bruni's caprice struck me becuase I read the "restaurantspeak" column just after completing a post about media coverage of Gore in 2000. Bush was incredibly fortunate to draw Bruni as his NYT campaign tail rather than the very critical Kit Seelye. And this accident of history mattered. Did it determine the outcome of the election? Certainly not. But in a contest as close as the 2000 Presidential election, NYT coverage almost certainly influenced some voters' in Florida (and other swing states) toward Bush. Hopefully future journalistic historians will mine Bruni's restaurant columns for insights into his misguided reporting in 2000.

Economic Advisers to the '08 Candidates

2007-11-08T12:16:00.000-08:00

NYT's Louis Uchitelle details to whom the candidates are turning for economic advice. Most of the names will be familiar: Rubin, Sperling, Lindsay. To the econ majors among you eager to know whom your textbook authors are supporting, we find out that Harvard's Greg Mankiw advises Mitt Romney, while David and Christina Romer of UC Berkeley speak exclusively to Barack Obama (take note Reedies who have survived Macro Theory. Your beloved Romer Lounge resides firmly in the Obama camp).

Uchitelle's most notable (if unsurprising) finding is that most liberal professional economists are skeptical of the increasingly populist Edwards campaign. Despite admiration for certain of Edwards' stances (such as his vocal support for closing the hedge-fund/private equity tax loophole), the absence of credentialed academics among Edwards' circle troubles me. He evidently consults on economic matters chiefly with Leo J. Hindery, a cable-television entrpreneur turned private equity guy. More disturbing, Edwards also listens to Clyde V. Prestowitz of the Economic Strategy Institute, whose views on international trade Paul Krugman sharply criticized over a decade ago.

The Congressional battle over the Peru free trade agreement once again exposed the deep rifts over economic policy within the Democratic party. To mediate these disputes, we need a President who gets advice from the best the economics profession has to offer. At least in his circle of advisers for the primaries, Edwards is failing that test.

Though I'm too lazy the summarize the entire argument, Edwards' choice of Hindery and Prestowitz gives new salience to Paul Krugman's famous distinction between professional economists and what he terms "policy entrepreneurs" (e.g. Arthur Laffer, John Kenneth Galbraith, Robert Reich, Lester Thurow). Usually without academic training, policy entrepreneurs address contemporary economic problems for a general audience, but without the theoretical or empirical rigor of professional economists. They thus end up peddling simplistic solutions (tax cuts always good; government should intervene more to protect "high-value added" industries) to complex problems. For Krugman's classic formulation of the issue, see pages 10-15 of Peddling Prosperity.

For anyone wondering what economists actually say to political candidates seeking their counsel, see Alan Blinder's interview with Charlie Rose (Uchitelle lists Blinder as yet unaffiliated, though in the interview he mentions talking to Obama).

The Journal Gets Florid

2007-11-08T12:01:00.000-08:00

The lede of a front-page WSJ article today entitled "Markets Tumble As Dollar's Fall Adds to Anxiety":

The creidt crisis sparked by mortgage problems reared its head anew, as stocks tumbled on fears about shaky financial institutions. This time, the dolla'rs fall to record lows and oil's flirtation with $100 a barrel added to the worrisome brew.

Rearing heads, flirtation, and a worrisome brew? However else Murdoch reshapes the Journal, I hope he won't banish this glorious Victorian language!

I post no link because the online WSJ requires subscription.

Exercise and Brain Fitness

2007-11-08T11:54:00.000-08:00

As someone who needs an hour of swimming or walking each morning before I can even think about accomplishing anything, I found this op-ed very reassuring. Good to know that what others dismiss as procrastination is actually shielding me from dementia later in life. If only I could flash the size of my prefontal cortex with the same ease people flash their biceps...

Gore and the Media

2007-11-07T15:40:00.000-08:00

Jokingly linked to in my last post, Evgenia Peretz's Vanity Fair article actually deserves a serious read. It's a well-researched indictment of the anti-Gore bias that pervaded mainstream reporting throughout the 2000 election. The author singles out Kit Seelye of the Times for sloppy reporting that helped unfairly brand "GORE IS A LIAR" onto public consciousness. Seelye, as well as Maureen Dowd, is also faulted for uncritically promoting "honest frat boy versus arrogant untrustworthy geek" as the election's dominant narrative frame.

As a writer of opinion pieces, Dowd's disdain for Gore and seeming soft-spot for Bush are questionable as a matter of judgment but not evidence of journalistic incompetence (perhaps of bad taste though, given her gall in writing puff pieces about George W. during the campaign and then a few years later publishing Bushworld, whose premise is that she knew what the Bushes were about all along). The examples from Seelye's reporting are more troubling; that Seelye still covers politics for the Times (see her story on the Obama SNL skit) makes past errors in her reporting very relevant. Without intending to join the (mostly conservative) bloggers who exist solely to second-guess NYT writers (e.g. Krugman Truth Squad), I will be reading Seelye's stories extra-closely throughout this election (especially if Hillary gets the nomination and the right-wing echo chamber really begins to pound). One hopes they will not resemble her real-time web commentary on the second Presidential debate in 2004, when she largely ignored substantive clash to applaud various "Bushisms" ("he looked at me like my buzzer was up") and offer the following concluding observation: "Bush is charged-up and feisty; Kerry seems wordy."

The frustrating question of why American media in 2000 transformed a serious, far-sighted Vice-President (and future Nobel Peace Prize winner) into a gutless and mendacious hack remains far from answered. At least Evgenia Peretz has begun to compile the evidence.

Just to be clear, I don't revive the issue of Gore's 2000 media coverage in the hopes of him receiving better treatment in 2008. Steve Kornacki of the New York Observer convinces me that Barack Obama pre-emptively sapped the thunder from a Draft Gore campaign. In allying themselves with Obama, activist progressives largely disappeared as Gore's natural base. Unlikely to serve again in government, one hopes that private citizen Gore will continue his outstanding efforts even under a Democratic administration.

On a final and totally irrelevant note, check out the above link to Seelye's NYT profile: doesn't she resemble Annette Bening as Sydney Ellen Wade in The American President? Not a bad look. I wonder how Seelye would cover a real life President Andrew Shepherd. The fictional Shepherd shared Gore's commitment to mandatory cuts in U.S. greenhouse gas emissions; unlike Gore, he was willing to stake the White House on climate change legislation. Since the movie's release in 1995, President Shepherd's proposed legislation has seemed pure utopia; today's Times suggests such legislation to be inching closer to reality. I barely need mention Gore's role in making this happen.

Obama SNL Skit

2007-11-07T14:34:00.000-08:00

This skit is fairly funny, if only because Horatio Sanz makes a dead ringer for Bill Richardson.

Dalton grads among you ought to pay special attention to who plays Dennis Kucinich - it's our classmate and now SNL writer Simon Rich (appears at about 3:45 of the clip; thanks to Ed and Cav for calling this to my attention).

Probably unbeknownst to SNL producers, Simon and Kucinich share more than baby-faced looks. About two years ago Simon introduced a young lady to me as his girlfriend who was both strikingly attractive and nearly a head taller than he was (no idea whether they are still together). In this she resembled YouTube star and long-shot potential First Lady Elizabeth Kucinich. Video of Ms. Kucinich is available here.

That coincidence aside, the SNL skit does warm me slightly to the idea of a President Kucinich: four years of Simon playing Kucinich would produce far more laughs than four years of Amy Poehler playing Hillary Clinton (even beyond the laughs that a President Kucinich would himself generate). If journalists in 2000 justified casting one's vote on the basis of "who you would want to have a beer with," why can't I throw my support behind the candidate I most want to see mocked on late-night TV?

Impact of Congressional Carbon Fees

2007-11-07T06:55:00.000-08:00

NYT provides a useful overview of how carbon fees would make alternative energy sources more competitive with fossil fuels (see multimedia figure for fuel cost changes under different carbon fee scenarios). The article includes an interesting discussion of how a comprehensive carbon tax/cap-and-trade system would take account not just for a fuel's electricity emissions (carbon dioxide per kilowatt hour when the fuel is used), but also it's "closet carbon": the carbon dioxide embedded in production of the fuel itself.

Consider a producer who makes ethanol from pine tree waste versus a producer who burns coal or natural gas to distill corn ethanol. Either production process releases carbon dioxide. In the case of pine trees, however, this is matter left behind after the clear-cutting of a pine plantation for paper or lumber. If not burned to make ethanol such waste would decay and produce methane, also a greenhouse gas. Conversely, if not applied to distill corn ethanol, coal and natural gas stay in the ground and produce no greenhouse gases. Should pine waste ethanol makers get credits for creating new energy from material that would have produced greenhouse gases anyway? In other words, should they be able to deduct potential decay-induced methane releases from their fuel's "closet carbon" content?

Probably, though granting such credits requires careful accounting and oversight. Hopefully such complexities will not deter lawmakers from slapping some price on carbon now and letting EPA hammer out the details.

Anyone Need a Wax?

2007-11-06T13:04:00.000-08:00

Next week our housekeeper Moy will welcome her daughter to New York City. A successful hair wax specialist in her native Kuala Lumpur, the daughter evidently hopes to find similar work in NYC. To anyone who knows of a salon in the Metropolitan area looking to augment its hair waxing staff, please post a comment. The young woman's name alone suggests her resume is worth a look - it's Lum Soo Fun.

Interestingly, Moy tells me that Fun's business in KL attracts a healthy number of male clients. Are Malaysian men more particular about their body hair than men in the States? I'm eager to find out.

Samantha Power as an Example of Team Obama

2007-11-05T17:31:00.001-08:00

I have not yet finished reading James Traub's NYT Magazine article on Obama's foreign policy team. The article's focus on Obama's choice of advisers, however, I am somewhat reluctant to endorse. It's terrific that a group of younger foreign policy wonks all think Obama is really smart and capable, with a background uniquely befitting of an American President in an globalized world. That some of these advisers (e.g. Tony Lake) shared the Senator's prescience in outspokenly opposing the Iraq War is an added plus. It is good to know that Obama is not alone in his campaign plane in having exercised sound judgment on the defining foreign policy issue of the decade.

That said, once a foreign policy wonk affiliates herself with a particular campaign, she gains a vested interest in the candidate's electoral success - an Obama victory will likely mean high-profile appointments for everyone of his supporters quoted in the article. Without suggesting any insincerity, I always wonder whether this interest biases a wonk's public appraisal of the candidate's abilities. Nearly impossible to determine.

With that reservation in mind, anyone who liked Traub's article (e.g. Matt Yglesias) ought to watch Charlie Rose's interview with Samantha Power of the Kennedy School. She's listed among Obama's top advisers, and if her acumen is at all representative, than this group surely deserves a shot at shaping America's foreign relations. Power makes Madelaine Albright look positively daft.

Disruptions Ahead

2007-11-05T15:08:00.000-08:00

Dear readers (hoping that my use of the plural there is justified),

My posting schedule may be somewhat irregular over the next few weeks as my job hunt picks up steam. More time on interviews and cover letters means less time for blogging. If I seem to morph into the stereotypical blogger who merely posts links with a sentence or two of comment ("interesting, but not altogether itself...") - worry not. With any luck I'll be back to my usual long-winded self in no time. As long as injustices such as the cancellation of the PT Cruiser abound, I will continue to share my righteous protest.

Another '07 Reedie Joins the Blogosphere

2007-11-03T18:12:00.000-07:00

My good friend Byron Davies inaugurates his blog with commentary on the New Yorker profile of Steve Coogan. The first in what is sure to be a string of brilliant posts.

War-Gaming an Energy Crisis

2007-11-02T19:15:00.001-07:00

Led by Bob Rubin, a bipartisan group of former government officials gathered yesterday to playact a Presidential response to a nightmare energy scenario circa 2009: disruptions in the Caspian, confrontation with Iran and Venezuela, oil at $150/barrel, rationing, military urging reinstatement of the draft. NYT reports.

Though basically a publicity stunt, the event underscored how America's mammoth appetite for foreign oil (and Bush's unwillingness to curb this appetite) could spell disaster for whoever occupies the White House in 2008. This article is perhaps most instructive when considered alongside another excerpt from today's NYT business section. Apparently a federal judge has ruled that the Interior Department lacks authority to force energy companies to pay royalties on oil and gas they drill in publicly owned waters in the Gulf of Mexico. More accurately, that Interior lacks authority to withdraw previously granted exemption from royalty payments (usually 12 to 16 percent of sales) even though Congress intended for such royalty relief to cease if the market price of oil climbs above $34/barrel (today oil futures closed at $96/barrel).

Though I have not studied the nuances of the law in question, with a group of former policymakers calling for reform of America's dysfunctional energy policies, Interior being unable to end what is a now a useless and wasteful policy (GAO estimates continued royalty relief could cost the government $60 billion over twenty years) is not an auspicious sign.

Spare me the argument that royalty relief is actually in the spirit of the Rubin group's advocacy because it promotes domestic oil production. With oil prices on this trajectory firms will be pumping oil wherever they can find it even without government subsidies (to wit, see this NYT article on the revival of once defunct Texas oil fields). We would enhance energy security far more using the $60 at issue to fund increased energy efficiency (e.g. supporting tax credits for purchase of energy efficient equipment and appliances).

Shortcomings of the IPCC

2007-11-02T18:28:00.000-07:00

To milk one final post from today's Science Friday, the program ended by considering the limitations of the Intergovernmental Panel on Climate Change (IPCC, which shared this year's Nobel Peace Prize with Al Gore). IPCC reports have been invaluable in informing public debate about climate change; the nature of the IPCC, however, ensures that its estimates always err on the side of being too conservative, and that its reports rarely include the most up-to-date climate research.

The reason for these deficiencies is that the IPCC, being a U.N. sponsored organization (open to representatives from all member nations of the UN Environment Program), operates through consensus. Every word and figure in the report must be vetted and approved by representatives from dozens of countries. The need to garner consensus pushes the IPCC to be conservative in its forecasts of future warming, perhaps more so than is justified by the evidence; evaluating the latter point is difficult, since by the time the painstaking process of completing an IPCC report is complete, the state of climate research has almost surpassed what is contained in the report.

I am not suggesting that the IPCC can depart from its consensus-driven M.O.; consensus is what has enabled the IPCC's reports to become so authoritative, respected, and uncontroversial. I am suggesting, however, that Bill McKibben is right to warn that basing climate policy solely on IPCC reports may leave us with policies insufficiently robust to forestall future warming (and vulnerable to low-probability but high-impact climate disruptions). Heeding only the IPCC also ensures that our policy proposals will to some extent be based on outdated science. While the Nobel Committee was right to celebrate the work of the IPCC, we should also acknowledge the IPCC's limitations as a forecaster of climate fluctuations and purveyor of climate science.

Climate Change Means Coal

2007-11-02T18:19:00.000-07:00

Beyond the price signals discussed in my last post, today's Science Friday discussion generally centered on coal's centrality to the climate change issue. Its appeal as an energy source I have already stated: it is cheap and plentiful. America already derives half of its electricity from coal; with its infamously large coal reserves, China is apparently building a new coal-fired power plant every ten days.

All the guests endorsed far more investment in equipping coal plants with carbon-sequestration technology. Carbon capture-and-storage basically involves trapping CO2 at the point of emission, then drilling it into subterranean storage spaces (such as spent oil wells). Though workable in laboratory demonstrations, there is not yet a single commercial coal plant in existence today that deploys sequestration technology.

Christopher Field of Stanford emphasized the enormous logistical challenges involved in implementing sequestration technology on an industrial scale: to sequester even 10 percent of the world's coal-based carbon emissions would apparently require an infrastructure as expensive as that of the entire global oil and gas industry. Hearing this reminded me of Tom Friedman's insistence that the world hasn't yet comprehended what it will mean to enact climate prevention strategies on a commercial scale.

Steve Rayner of Oxford advocated diffusion of carbon capture technology as a perfect way to bring China and India into the climate change fold. He noted that in China coal emissions impose enormous public health costs - such as acid rain and respiratory illness - and that the prospect of stopping this harm gives China a reason to want to sequester coal emissions even independent of climate change considerations. Maybe. In my understanding Sulfur Dioxide, rather than Carbon Dioxide, is the element in coal most damaging to human health. I also believe it is possible to sequester sulfur emissions without sequester carbon emissions - the U.S. has long had a cap-and-trade system for SO2 emissions but not one for CO2 emissions (which is coal plants in the U.S. pollute far less than their Chinese counterparts). Maybe capturing CO2 emissions entails capturing SO2 as well - I don't know. I'd like to find out.

Steve Rayner also argued that while we work to prevent climate change by reducing carbon emissions, we must also get realistic about adapting to its consequences. Given our current failure to reduce global CO2 (or even slow the rate of emissions growth), it is highly probable that some alterations to the global climate will occur. These range from the spectacular - such as melting ice sheets, rising sea levels, and the inundation of coastal cities - to the less spectacular but no less insidious - such as accelerated depletion of freshwater in the American West and the spread of malaria to areas previously safe from the disease. Though it is difficult to judge the probability of these events, billions of (often very poor) people are at risk. The World Bank has recently become more active in helping countries prepare for climate disruptions, and their efforts are welcome.

Oil Prices and Clean Energy

2007-11-02T15:57:00.000-07:00

Today NYMEX Crude Oil Futures closed at $96/barrel, meaning that the world price of oil has risen almost seven-fold since it hit a nadir of $14/barrel in 1998. It is tempting to conclude that by raising the threshold per-kilowatt hour price that alternatives to oil must meet in order to be competitive, the surge oil prices will increase production of low-carbon energy sources (wind, biomass, etc.). Thus, one might argue that in the long-run rising oil prices promote de-carbonization of the world's energy supply and reduction of greenhouse gas emissions.

Be wary of this conclusion. Energy producers indeed respond to oil's price signals, but as a discussant on today's NPR Science Friday points out, in the near-term higher oil prices will serve mainly to stimulate production of coal, earth's most carbon-intensive energy source. For most activities dependent on oil, coal is the cheapest and most plentiful alternative - on a kilowatt hour basis much cheaper than wind, solar, or any of the bio-fuels examined in National Geographic's excellent survey of the subject. As these graphs show, recent gains in the price of coal have lagged far behind those in the price of oil.

Higher oil-prices make low-carbon energy sources more attractive relative to oil, but do nothing to improve their economic viability viz. coal (except insofar as oil is a minor input into coal production). Coal's low price makes it the substitute energy source of choice for almost all users of oil and natural gas; its abundance throughout the world (particularly in China) means that its favored status is unlikely to dissipate anytime soon. To achieve market share, the per unit price of any low-carbon energy source must be able to compete with coal (as Stephen Chu of Berkeley often points out). Incentivizing production of low-carbon energy thus requires raising the price of all carbon-intensive energy sources (oil, coal, natural gas, etc.) - a rise in the price of oil alone will not do it.

The Royal Commission on Environmental Pollution calculates that a carbon tax of $40/metric ton would make low-carbon sources competitive with coal on an industrial scale. Gilbert Metcalf of Tufts recommends $15/metric ton. Whatever your preferred amount, the influence of coal-producing states in the U.S. Senate (Byrd and Rockefeller of West Virginia; Specter of Pennsylvania) makes any American carbon tax unlikely in the near future. Note that the Lieberman-Warner climate bill forgoes a carbon tax completely in favor of the far inferior cap-and-trade approach.

Travesty in Detroit - PT Will Cruise No More

2007-11-01T20:25:00.000-07:00

When a hallowed U.S. company sells out to private equity, some worry that buyout shops' relentless focus on the bottom-line will destroy a company's core culture and thus undermine its livelihood in the long-run. Cerberus Capital, the new owner of Chrysler, has to me confirmed these fears with its wrongheaded decision to nix the PT Cruiser. Evidently September sales of the PT declined 42 percent from a year ago, and Cerberus sees this as grounds for discontinuing the model.

Such short-sightedness! The PT may have momentarily fallen out favor as the public swoons over new models (such as Chrysler's own Dodge Caliber), but ultimately you cannot fool all of the people all of the time. The PT's brilliance of design and style is bound to once again captivate public consciousness. I think of the PT as Miles Davis; shifts in public taste dimmed Miles' popularity from time to time, but he always rebounded because the intrinsic beauty of his playing could adapt to any era. Similarly, had the PT been allowed to survive (undergoing the normal periodic upgrades of any vehicle line), newer models would have found their way back into the sunshine of popular demand.

The PT aesthetic will once again surge whether or not Chrysler is manufacturing new ones. It is irrepressible. Unfortunately for Cerberus, this resurgence will benefit only used-car dealers, Ebay sellers, and other owners of existing PTs. In an attempt to boost short-term profitability, Cerberus has ironically shut itself off from huge future income streams. What do you expect from a group who named their firm after Milton's "three-headed mutt with a serpent’s tail and a mane of snakes, assigned to prevent ghosts of the dead from leaving Hell."

Brief internet browsing has assured me of the existence of others who appreciate the PT's unique elegance. Some wise soul has launched a petition to dissuade Cerberus from its PT-killing folly and I urge readers to sign. I firmly believe that Cerberus' decision is borne of ignorance, ignorance of the legions of people such as myself who admire PT Cruisers without even driving them. Let's face it - a PT Cruiser on your block generates positive externalities. When James Traub describes Portland, Oregon as a "quality of life capital", my mind jumps to the rainbow of PTs crossing the Hawthorne Bridge. That's quality living!

If Cerberus could only devise some scheme to capture this surplus - say by soliciting donations from people who derive aesthetic value from a large quantity of PTs - maybe this income could compensate for the PT's (temporarily) flagging sales. The hard-headed among you may dismiss such a scheme as quixotic; has not the Radiohead free download experiment proven that many people will pay for goods of value without being coerced? I say the experiment is worth trying, and I hope some far-sighted employee at Chrysler will convince management of this.

Assuming Cerberus cannot be enlightened of their error, I say - Farewell, PT! Your genius was too much for this world to handle.

PT Fever

2007-11-01T20:23:00.001-07:00

If anyone reading this has a PT Cruiser for sale, post a comment and you will find an eager buyer. These babies are sure to appreciate - particularly the wood-paneled ones.

Poor in NYC

2007-11-01T20:05:00.000-07:00

In case you had to see the graphic mentioned in my comment on Traub's essay, here it is. Given that New York City residents pay some of the highest taxes in the country, it's interesting that only 3 percent list "taxes" as a reason for feeling poor.

Perhaps if they knew of the tax-avoidance schemes being employed by the city's super rich and its army of trusts and estates attorneys, the very act of paying taxes, independent of the marginal rate, might begin to feel more impoverishing. As David Cay Johnston says: "Taxes, They're not for Everyone."

Traub on NYC's Head-Scratching Magnetism

2007-11-01T18:28:00.000-07:00

Two posts up I place a link to this James Traub article amid my pro-PT Cruiser screed; the article is worth reading even if you do not share my enthusiasm for the PT.

Traub's (unanswered) question is why so many people are willing to sacrifice amenities (living space, a backyard) and endure daily frustrations (jammed subways, super-rich neighbors) in order to live in New York City. It's no moot question given that, according to a NYT poll he cites, almost half of New Yorkers believe the city is not "worth what it costs."

Though the poll data accompanying the article is somewhat uninformative (7 percent of residents list "Having no money" as their reason for feeling poor in New York City), Traub's discussion resonated with me because he contrasts NYC with Portland, Oregon, which he calls a "normally priced 'quality of life' capital." This comparison resonated with me because I just returned to NYC after three marvelous years in Portland. Though as a student living in school housing I had the usual isolation from city life, I can verify Traub's comment that Portland's lack of super-rich elite does not keep it from having "a progressive arts scene, excellent ethnic restaurants, a lively downtown, good schools." The ability of Portlanders to live comfortably on normal salaries and the general absence of a mega-successful sub-class to be envious off also seem to boost happiness in the Rose City.

Traub is correct to point out the public benefits of private riches (more tax dollars to fund public services, extraordinary funding for cultural institutions), but I think these salutary consequences go so far in explaining why New Yorkers who stay put choose to do so. I imagine few people forgo a move to Portland simply because some roads in Southeast are unpaved or because the Oregon Symphony doesn't open its season with Yo-Yo Ma. If pressed for a single reason, I would say that smart, ambitious people come to New York to be around other smart, ambitious people. This is what attracts them here and - even as the cost-of-living headaches mount - this is what keeps them here.

The desire to live amid (or think you live amid) and forge connections with talented people drives people to live in New York just as it drives people to pursue Ivy League admission even when lesser-known schools provide equally strong academics and higher rates of student satisfaction. Even in a recreational sense, check out the list of speakers coming to the 92nd Street Y (I saw Clarence Thomas last month and am seeing Tommy Lasorda and Bob Costas this month). No institution in Portland can consistently book such heavyweights.

Traub declines to emphasize these network externalities; this strikes me as odd given that for a journalist I imagine the professional benefits of being in New York to be enormous. As much as I respect the Willamette Weekly, the range of opportunities available to an aspiring journalist in New York City must overwhelm those available in Portland. The global headquarters of Dow Jones, New York Times, Bloomberg, et al. - these are unique assets. Following James Suroweicki's lead, media industries probably have a high "location quotient" (value added from place-based specialization) - and they happen to have clustered in New York.

The city's economic clusters given journalists, artists, and musicians a major reason to live in New York - to make the connections that will allow their work to advance. Bright as Traub is, he is somewhat ill-suited to address the paradox of New York. I would prefer to hear from people in professions where "who you know" is relatively unimportant - perhaps teachers or engineers - explain why they choose to live in New York. Such testimonials would provide a non-career specific context in which to evaluate my hypothesis that people choose New York in part to live among "quality people." Put crudely, do people perceive a trade-off between "quality of life" and "quality of friends?"

I just hope to visit Portland often enough to be able to inform my fellow New Yorkers that their perceptions are bogus. Not too often, however; Yo-Yo Ma returns to the Philharmonic next month and I can't miss it!

Obama-Keyes - the New Lincoln-Douglas?

2007-11-01T16:23:00.001-07:00

Alan Keyes' entry into the 2008 Presidential race raises the prospect of an noteworthy historical parallel (and also a religious revelation, since if one believes Keyes that he entered the race at the urging of Jesus Christ, then either Jesus is not aware of Keyes' dismal performance in the 2004 primaries - in which case he lacks omniscience - or Jesus simply endorses hopeless candidates - in which case he's probably a Democrat).

With Keyes joining Obama in the race, we have the possibility (however remote) of a general election with two candidates who had previously squared off in competition for an Illinois Senate seat. Thus 2004 and 2008 would resemble 1858 and 1860, when Abraham Lincoln narrowly lost a Senate race to Stephen Douglas only to beat him and several other candidates in the Presidential election two years later.

Unless Keyes wins the nomination of some third-party (e.g. Constitution or Conservative), the odds of a Keyes-Obama showdown are about the same as those of the Jets making the playoffs. Nonetheless, pondering a parallel to Lincoln-Douglas illustrates America's immense progress in human rights over the past 150 years. Whereas Douglas savaged Lincoln for suggesting that the preamble of the Declaration of Independence applied to blacks, we now have a black man seeking the Presidential nomination in both of our two major political parties (even if only one of them is a contender).

At the same time, the presence of Alan Keyes at Republican Presidential debates is a stark reminder that tolerance and respect for others in this country is far from universal. Though he's no Stephen Douglas, this is a man who not only champions opposition to gay marriage, but who defines homosexuality itself as "selfish hedonism." His eagerness to portray his every political move as carrying out the will of Jesus Christ - in 2004 he famously said that Jesus would not vote for Obama - is also disturbing. While Keyes wields far less influence within the Republican party than Douglas did within the Democratic party, Republicans still respect him enough to let him compete for a Senate seat in the fifth-largest state in the nation. At the September 17 2007 Values Voters Debate, he placed third in a straw poll of those in attendance. So clearly Keyes' outspoken views on topics such as homosexuality do have some support within the Republican party. That this critical institution of American politics can harbor such an intolerant figure (as the Democratic party harbored Douglas in the 1850s) suggests that "life, liberty, and the pursuit of happiness" as an inalienable right of all citizens remains an idea with which our nation struggles.

More on Obama

2007-11-01T16:08:00.001-07:00

On the subject of Obama, Gail Collins today astutely diagnoses the chief problem confronting his campaign. Even if people welcome your vision of a Presidency soaring above partisanship, "it’s tough to play the wise elder statesman when you’re just three years out of the Illinois State Senate." This criticism accords NYT television critic Alessandra Stanley's observation that Obama in the debates often comes across as if moderating for PBS rather than participating as a candidate.

In the recent MSNBC debate Obama spoke somewhat more forcefully, but he still seems to be committing the mistake of adopting a front-runner's above the fray attitude despite trailing in the polls. This weakness probably reflects Obama's light experience in genuinely competitive campaigns (in 2004 he trounced Alan Keyes' with 70 percent of the vote). Perhaps campaign strategist David Axelrod had hoped that a Hillary-Edwards slugfest would allow Obama to rise without attacking Hillary directly, but beyond the mid-summer clash of who would be a better advocate for women, Edwards generally hasn't succeeded in provoking Hillary into conflict. I still await more examples of Obama's promised newly aggressive campaign strategy, and am especially eager to see if he can distinguish his foreign policy views from those of Sentaro Clinton (a cause Matt Yglesias has been pushing for some months).

Gmail Ads

2007-11-01T14:41:00.000-07:00

If I were a political candidate (or anyone with a serious message), I would be wary of advertising through Gmail. The prospect of being able to target select people through keyword matches is surely appealing; unfortunately, any given email seems to call up a wide variety of solicitations.

Thus, today I noticed an "Obama for President" ad sandwiched between advertisements for "Bachelorette Spa Party" and "Retro Wedding Invitations." Evidently Gmail has some peculiar ideas about the kind of people who receive Evite invitations to 23rd birthday parties.

Bye-Bye Karen Hughes

2007-10-31T16:09:00.000-07:00

Karen Hughes resigns her post at State as Undersecretary for Public Diplomacy and Public Affairs. If you believe Fred Kaplan, America's image in the world can only improve as a result of her departure.

Seriously, though, I hope the valedictories on her tenure will give some idea of what she actually has been doing for the last two-and-a-half years. The State Dept. website provides few answers.

More on Leonhardt

2007-10-31T13:20:00.000-07:00

Beyond the two points in my last post, two of Leonhardt's tax facts deserve brief comment.

First, Leonhardt notes that despite the corporate income tax rate remaining unchanged at 35 percent since 1993, corporations have continually found ways to lower the portion of their profits going to federal income taxes (down to 22 cents of every dollar by 1998). Johnston (Perfectly Legal 14) notes that for almost three decades corporate profits have been growing faster than corporate income taxes.

A major cause of this tax avoidance is American-owned multinational corporations shifting profits to lower tax jurisdictions (e.g. Ireland or Bermuda). America's complicated approach to taxing income from multinationals enables such profit-shifting schemes. For a better approach to multinationals' profits, see discussion paper from my Reed Professor Kim Clausing (with Reuven Avi-Yonah). Clausing and Avi-Yonah contend that their reforms would increase corporate income tax revenue enough to make reductions in the corporate income tax rate revenue-neutral. Someone ought to mention these ideas to Charlie Rangel.

Second, consider this summary of Leonhardt's first two facts:

As a group, the rich pay a greater share of taxes than in the past.
The top 1 percent of taxpayers — those with adjustable gross income of at least $267,000 in 2004 — paid more than 25 percent of all federal taxes that year, according to the Congressional Budget Office. That was up from 15 percent in 1979.
The affluent are paying more of the taxes because they’re making so much more money.
A family in that top 1 percent of earners paid a total federal tax rate — including everything from payroll taxes to income taxes to capital gains taxes — of 30 percent in 2004. That was down from 41 percent a decade before. Since the 1950s, tax rates on high-income families have generally been falling.
The top earners pay a bigger share of the government tab than in the past because their incomes have risen so sharply — even more sharply than their tax bills.
The affluent, in short, are paying less in taxes on every dollar they earn but earning many more dollars.

While noting that the incomes of the richest 1 percent have grown more quickly than their tax bills, Leonhardt neglects to numerically compare the richest 1 percent's slice of the tax pie with its slice of the income pie. In 2004, when the richest 1 percent payed 25 percent of all federal taxes, they earned 19 percent of national income. In 2005 the richest 1 percent's take of national income rose to 21.2 percent, the highest share recorded since the IRS began tallying the figure in 1986. Thus, not only is a rising share of national income the cause of the richest 1 percent's rising share of the national tax bill, the two percentages are fairly close.

Leonhardt on Taxes

2007-10-31T10:40:00.000-07:00

David Leonhardt sensibly highlights five facts crucial to the tax debate. While acknowledging that facts alone cannot dictate what constitutes "fair" tax policy, Leonhardt at least sets the table for fair argument. Valuable as Leonhardt's list is, however, any discussion of the American tax system must also include these two points.

The Entire U.S. Tax Code - Federal, State, Local - Resembles a Flat Tax System

Warren Buffett caused a splash recently by arguing that his federal taxes equaled a smaller percentage of his taxable income than did his receptionist's of her income (17.7 percent versus 30 percent). Greg Mankiw criticized Buffett's calculation as inaccurate, and Mankiw's corrections indeed show the federal tax system to be progressive.

The spirit of Buffett's objection, however, is valid even if his focus on federal taxes alone is misplaced. Since America has enacted a federalist system - allowing taxation powers to devolve to states and localities - the President and Congress have an obligation to consider how federal tax laws interact with state and local ones. It makes no sense to consider a federal tax burdens in a vacuum. And since states and localities rely heavily on sales taxes whose burden falls as income rises, the overall American tax system is far less progressive than the federal system alone. David Cay Johnston states the case (Perfectly Legal 96):

The federal Bureau of Labor Statistics, in its annual consumer expenditure survey, looked at the burden of local and state taxes as well as federal levies... For 2001 the government found that all taxes at all levels of government consumed 19 percent of the incomes of the best-off fifth of Americans, those individuals and families whose average income was $116,666 that year. Down at the bottom of the poorest fifth, whose average income was $7,946, paid 18 percent.

What this means is that the entire tax system at all levels amounts to a crushing flat tax, one that is crushing the poor and one that does not extract the harsh levies so often cited by politicians who owe their allegiance to the political donor class. This leveling of tax burdens between those most able to pay and those least able to pay reflects the regressive nature of sales taxes on merchandise, excise taxes on various consumer goods, and the high rate of property taxes in poor communities. The burdens of these taxes diminish as incomes rise.

Though Johnson's figures are slightly dated, I doubt the situation has changed much since 2001, especially given the dire fiscal condition of many states in the intervening years. Leonhardt's discussion ignores state and local taxes, and this is standard in debates over federal tax policy. I believe this is unwise. If the federal government permits states and localities to adopt regressive taxes, one might argue that the federal tax code should be all the more progressive to compensate.

The Very Rich Have Gotten Fabulously Richer (to quote chapter three title of David Cay Johnston's Perfectly Legal)

Leonhardt discusses the extraordinary income gains of the richest 1 percent of Americans over the past thirty years, and rightly diagnoses this as the main reason the richest 1 percent is paying a larger portion of federal taxes (in 2004 paid 25 percent of federal taxes and earned 19 percent of national income). To treat the richest 1 percent as homogeneous, however, is to ignore the astounding income gains among the top rung of this class, those 13,400 households in the top 1/100th of one percent who in 2000 had an average income of $24 million (560 times the average U.S. household income of $42,700). I would contend that we cannot discuss tax fairness until everyone truly appreciates the extent of wealth concentration in America.

Between 1970 and 2000 this elite group's share of national income grew from 1 percent to 5 percent. This enormous income growth for the top 1/100th of one percent (henceforth "the Fortunate Few") vastly exceeded even the income gains of other households in the richest one percent; the incomes of the Fortunate Few grew almost 1,000 times faster than those in the bottom half of the richest one percent (meaning that in 2000 the bottom half had an average income of f $777,450 while the Fortunate Few had an average income of $24 million).

When compared to the income gains of the bottom 99 percent, the strides of the Fortunate Few become truly spectacular. Johnston reports that from 1970-2000 "For each dollar of additional income going to each of those in the bottom 99 percent of Americans the richest each averaged an astonishing $7,500" (Perfectly Legal 41). This disparity in income growth has produced a sea-change in the distribution of wealth. Whereas in 1970 the poorest third of Americans had more than ten times the income of the Fortunate Few, by 2000 the Fortunate Few (a mere 13,400 households) had slightly more income than the 96 million poorest Americans (e.g. roughly the poorest third). Johnston puts it well (Perfectly Legal 41):

Here is the most important news in these pages - just 28,000 men, women, and children had as much income in 2000 as the poorest 96 million Americans. Each group had about 5 percent of all reported income that year. To visualize the enormity of this chasm imagine these two groups in geographic terms. The super rich would occupy just one third of the seats at Yankee stadium, while those at the bottom are the equivalent of every Americans who lives west of Iowa - plus everyone in Iowa.

Given this almost comic disparity, discussions of U.S. tax equity ought to focus on the position of the Fortunate Few in particular as opposed to the top one percent in general. In 2000 the Fortunate Few earned 5 percent of national income; what share of federal taxes did they pay? This information is difficult to come by because the IRS data does not disaggregate among the top 1 percent, even though there is an obvious difference between a family earning $700,000 and a family earning $24 million.

Without even discussing raising statutory rates on the Fortunate Few above those currently imposed on the top 1 percent (something I would support), Johnston's Perfectly Legal explains the many tax and accounting schemes employed by this elite to artificially reduce their taxable income. Taxing the super-rich is indeed difficult, because they can hire an army of lawyers and accountants to outsmart the IRS (assuming they have not already persuaded Congress to pass ill-conceived laws, such as the preferential treatment of income accruing to hedge funds and private equity firms). Nonetheless, before getting swept up in debates over what share of a person's income the government can legitimately take, we should be studying ways to ensure that the Fortunate Few among us pay the taxes they owe.

(For a history of U.S. income inequality and taxes see Pikkety and Saez)

Clifford Brown Birthday Broadcast

2007-10-30T16:29:00.000-07:00

WKCR FM plays all Clifford Brown to celebrate what would be the great trumpeter's 77th birthday. Bebop fans can tune to 89.9 (if in NYC) or listen live via stream on the WCKR website.

When Brownie speaks, wise men listen!

Eardrum

2007-10-30T16:10:00.000-07:00

For anyone who thinks hip-hop is in a sorry state, buck up your spirits with Talib's latest album, Eardrum. This album is ridiculous; I would say over three-fourths of the songs are great. Though I was skeptical of the album's many collaborations (from Norah Jones to KRS-One), Talib makes them all work, especially "Country Cousins" with UGK. The man is a master.

A Prescient Blogger Explaining his Method

2007-10-30T14:30:00.000-07:00

My high-school classmate and superstar blogger Matthew Yglesias alerts us to Daniel Davies' famous success in using his MBA-education to critique the claims of Iraq War advocates. Davies' post really is a fine piece of blogging.

Global Health

2007-10-30T13:24:00.000-07:00

The latest installment of the Charlie Rose Science Series focuses on global health. The program featured a distinguished panel, including Jeffrey Sachs, Ann Venamen of UNICEF, and Tonya Villafana of the Malaria Vaccine Institute.

Though the panelists said many smart things, I'll summarize what struck me as the main lessons: global health is improving, but we can still save millions of lives at between 50 cents and five dollars apiece. Because I've egregiously buried the lede, impatient readers should skip to my third paragraph ("Life-Saving Measures are Available for a Pittance").

Global Health is Improving: The discussion began optimistically, emphasizing that in 2006 the death toll of children under five from infectious diseases dropped below 10 million for the first since the statistic has been collected. The 2006 toll represents a 23 percent drop in mortality of children under five since 1990 (when about 13 million children died), and a 60 percent drop since 1960. Mind you, the decline in under five mortality over this period has occurred despite an overall increase in the number of such children due to population growth. Since 1997 we have also seen tremendous reductions in mortality due to measles (a 75 percent reduction in Sub-Saharan Africa alone), increases in access to clean drinking water (hence reduced susceptibility to diarrheal diseases), and increases in breast feeding (which vastly improves health of babies).

Yet Sickest Parts of the World are also the Poorest: Peter Hotez noted that of the 2.5 billion people who live on less than two dollars are day, one in three of them suffer from hookworms or some other form of microbial disease. Not only do hookworms cause debilitating and stigmatizing inflammations - such as of the genitals - they also increase susceptibility to malaria, exacerbate existing malarial symptoms, and increase parent-to-child transmission of HIV/AIDS. Much econometric evidence establishes that contracting hookworms, malaria, or HIV significantly reduces an individual's wage earning capacity. Ann Venamen observed that Sub-Saharan Africa, as the poorest region in the planet, had also enjoyed the slimmest increases in life expectancy, chiefly because of the spread of HIV/AIDS, which over the last twenty years has reduced average life expectancy in the region from the 60s to the mid-30s. Needless to say, the link between poor health and productivity losses means that most public health measures are also economic development measures. The links among diseases - such as hookworms promoting susceptibility to malaria - also means that immunizing people against one disease will usually protect them against other diseases as well.

Life-Saving Measures are Available for a Pittance: Here is the most important fact from the program - how astoundingly cheap it is to help sick people. Immunization against hookworms costs 50 cents per person per year. For about $416 million annually, we theoretically could immunize all of those aforementioned hookworm sufferers who live on less than two dollars a day. With roughly one billion people in countries of the developed world, this would amount to less than 50 cents per rich country citizen per year. Or, consider that the U.S. agricultural budget in 2006 was $21.1 billion. For about one-fortieth of what we Americans spend subsidizing our (usually already rich) farmers each year, we could help protect 800 million people against worms.
To be fair, worms by themselves do not kill (they merely disfigure and aggravate susceptibility to other fatal diseases). But when it comes to actual life-saving interventions, the economics are no less stunning. Jeffrey Sachs became animated describing the massive benefits and low cost of antimalarial bednets (bednets sprayed with insecticide). Recent randomized clinical trials from Kenya found that use of such bednets reduces mortality from malaria by 44 percent. A bednet lasting five years costs about five dollars. Yet despite the enormous gain, many poor people simply cannot afford these technologies. Sachs' argued that in the average poor country charging even one dollar for bednets reduces their use by 50 percent. Sachs then offered the following calculation (which I paraphrase):

300 million sleeping sites in Africa. A five year bednet costs five dollars. Provide bednets to everyone in Africa for five years for $1.5 billion. This would be about $1.50 from every citizen of a rich country. To put $1.5 billion in perspective, is equal to one day's worth of what Americans spend on the Pentagon. One day's Pentagon is equal to five years of malaria protection for everyone in Africa.

Though thinking of the Pentagon budget temporally is somewhat odd (with money tied up in troop operations and weapons development, shutting down the Pentagon for one day is not as easy as turning off your air conditioner), Sachs is roughly correct on the numbers: the FY 2007 DOD baseline budget is $493.3 billion; throw in a $50 billion supplemental for Iraq and Afghanistan, and you are at $543.3 billion, just about 365x 1.5 billion.

Environment Matters for Health: Beyond the obvious - e.g. polluted drinking water spread microbial diseases - Sachs mentioned two interesting examples of environment affecting health. On the local side, he emphasized that the poor live in an extremely hazardous environment: evidently almost a million poor people each year die from respiratory infections due to inhaling smoke from wood fires. On the global side, climate change can precipitate the spread of diseases into heretofore unknown regions. For example, by raising average temperatures, climate change could expand the zone in which malaria can thrive further away from the equator and toward the poles. Sachs' recent book contains maps illustrating this phenomenon.

On an economic note, the program also contained a brief discussion of different methods for persuading drug companies to research vaccines to cure diseases that affect only or predominantly poor people (and thus for which a large private market does not exist). On one hand is the Gates Foundation approach - committing large grants up-front to finance research. Another method is the Advanced Market Commitment (AMC), whereby a government (or foundation) does not give up-front money, but rather promises that if a drug company creates an efficacious vaccine, it will guarantee a specific per-unit price for the first however many units produced. The idea of ADM is to provide market-like incentives where no market yet exists. This article conveys criticisms of the feasibility of the ADM approach.

The overall lesson - despite improvements, there is still a huge amount of easily and cheaply preventable death. Hopefully in ten years de-worming vaccines and bednets will universal enough to no longer warrant mention.

Red Barber - Oh Doctor, Resurrect This Man!

2007-10-29T18:01:00.000-07:00

For anyone who laments the demise of sports broadcasting into colorless truisms, you ought to check out Red Barber's list of catchphrases. I first encountered Red last month at the Museum of the City of New York's outstanding exhibit "The Glory Days: New York Baseball 1947-1957." Barber broadcast Brooklyn Dodger games on radio, and later Yankee games on television. His call of Bobby Thompson's 1951 Shot Heard Round the World is gorgeously restrained (for 54 seconds, he simply lets the roar of the Polo Grounds speak for itself. Can you imagine a modern broadcaster keeping silent for 54 seconds in that situation? In any situation?)

Anyhow, as the link above shows, apparently Barber cultivated a "Southern Gentleman" image through the use of signature catchphrases. Man, I would give anything to tune into WFAN and hear Howie Rose say"the Mets are walkin' in the tall cotton now" - evidently a phrase Red used to describe success. Even occasional use of the exclamation "Oh, Doctor!" would do.

Red Barber was also a mentor to the young Vin Scully, which I know will be of intense interest to at least one potential reader.

Giuliani - Again Showing Exquisite Professional Judgment

2007-10-29T17:51:00.000-07:00

Displaying characteristic good judgment of the kind that marked his support for Bernie Kerik as Homeland Security chief, Rudy Giuliani is now apparently taking his foreign policy cues from Norman Podhoretz. Podhoretz's views - particularly in regard to Iran - strike me as simply deranged, but read this interview and addendum in the New York Observer and make up your own mind.

For those who upon reading such an interview simply itch for a counter-punch, read Krugman's op-ed today.

Hillary the Healer?

2007-10-29T17:15:00.000-07:00

I attended the Hillary Clinton rally at Abyssinian Baptist Church in Harlem this past Saturday. All the New York Democratic bigwigs were there, but fortunately I missed all of their speeches and arrived just in time to catch the President's introduction of Hillary. His introduction was vintage Bill Clinton, particularly the parts where he rhapsodized about how promoting alternative energy sources would not just reduce carbon emissions and dependence on Arab autocracies, but also create jobs immune to outsourcing, since "somebody's gotta go put up those wind mills and solar panels, and that kinda work can't be done from China or India." Hardly a slam-dunk in itself, but an interesting observation.

The most noteworthy part of Bill's stump speech, however, is that he touts Hillary as the candidate most likely to enact needed reforms because she will be best able to achieve compromise with Republicans. The need for compromise is uncontroversial; unless the Democrats find 60 seats in the Senate (a remote possibility), they will need Republican support to pass anything beyond a budget. The striking part is that Hillary is now the candidate who will best be able to reach across party lines. For anyone familiar with the depths of conservative hatred for Hillary (or for anyone who has watched five minutes or more of Fox News), the idea of Hillary as the most bipartisan of Democratic candidates requires some reflection to accept.

Not that Bill is necessarily wrong. Hillary by all accounts has won grudging respect from conservatives in the senate, probably because of her hawkish foreign policy stances (Iraq, the Iranian Revolutionary Guard terrorist Resolution) and support for select "moral values" resolutions (namely federal intervention in the Terri Schiavo case). She has also largely dropped the self-righteous rhetoric that distinguished her early public profile, most notably in the 1993 health care fight. But being a Senator is different from being President; facing a President Hillary Clinton, it seems to me the Republican strategy would be to attack mercilessly and not concede an inch.

Perhaps Hillary could engender fervid opposition and still find a way to work with Congressional Republicans. As Trent Lott recounts in his memoir, after the 1995 government shutdown Bill Clinton and the Republican Congress produced a shocking number of legislative compromises considering how viciously Limbaugh and co. were attacking Clinton in public (I don't share Lott's enthusiasm for all of the laws passed). Maybe Hillary could repeat this feat. But I'm not yet quite ready to rule out the possibility that someone without Hillary's baggage would have an easy time crossing party lines. To me Hillary is undoubtedly qualified, but her decision to tout her bipartisan credentials in particular still strikes me as a bit peculiar and premature.

As for Hillary's speech, it was solid but unremarkable. Iraq, education, housing, healthcare - the expected fare. Following Bill Clinton is not an easy task, but she sounds convincing enough and I would certainly vote for her over any Republican.

For you non-New Yorkers, the location of the rally held special importance because of Abyssinian's hallowed place in Harlem history. Consider Big L's lines from the 95 Stretch Armstrong Freestyle:

And every time a mack eleven bucks/ I'm killing at least seven ducks/I never was a follower of Reverend Butts.

Here Big L is referring to Calvin O. Butts, Reverend of Abyssinian Baptist. Big L's home block of "139 and Lenox" is about two streets away from the church. Just to put the event in context.

Stay Positive - The Externalities of Smoking

2007-10-29T16:32:00.000-07:00

With Democrats' S-Chip legislation proposing to fund increased child health insurance subsidies with higher tobacco taxes, now is an opportune time to discuss the externalities from smoking.

Traditionally we think of smoking as imposing costs on third-parties not fully borne by the smoker - health care costs of nonsmokers associated with secondhand smoke, medical costs paid by the government to care for ill smokers, and fires caused by cigarettes. These third party costs are the negative externalities; to the extent that they reduce tobacco consumption, we generally applaud policies that raise the price of tobacco (e.g. taxes) for forcing smokers to take these third-party costs into account.

Yet here come Stock and Watson relaying a fascinating observation about positive externalities from smoking (p. 446):

The biggest economic benefit of smoking is that smokers tend to pay much more in Social Security (public pension) taxes than they ever get back. There are also large savings in nursing home expenditures on the very old - smokers tend not to live that long... All the studies agree that, by tending to die in late middle age, smokers pay far more in taxes than they ever back in their brief retirement.

Here that, Platzer? With every puff you're subsidizing my twilight year leisure!

Seriously though, Stock and Watson note that the beneficial impact of smokers' early death on public finances could significantly reduce cigarette's per pack external cost (hence appropriate level of tax). Maybe. Without getting into this technically and morally thorny issue too deeply, I simply interpret this research as a reminder that to the extent our public programs succeed in reducing smoking - and the propriety of such programs is to me beyond question - they may increase public health expenditures later on. Rather than treating cigarette taxes as solely win-win (either people smoke less, or they smoke the same amount and government raises needed revenue), we should recognize that such taxes could be both a boon to public finances in the short-term and a drain in the long-term. Ideal would be a way to protect a portion of cigarette tax revenue to cover future increases in health expenditures; given our government's difficulties respecting such "lock-boxes", however, maybe we had better not go there.

Argentine First Lady Becomes President. - a Peek into America's Future?

2007-10-29T13:45:00.000-07:00

Supporters of Hillary Clinton may take heart from the recent Presidential election in Argentina, where voters have elected current senator and first lady Cristina Fernandez de Kirchner to succeed her husband Nestor as President. Will American voters in 2008 follow the lead of their Argentine brethren in selecting a first-lady to be President?

In both Argentina and America, any democrat (small d) ought to greet the election of a President's wife with mixed emotions. A woman President represents the ascendancy of a historically disenfranchised minority into the nation's highest office, and this shows welcome success in dismantling unjust barriers to political participation. In one of her most effective anecdotes, Hillary Clinton describes meeting 95 year old women who proudly recount that "they were born before women could vote, and now they'll live to see a woman President."

On the other hand, that free and competitive elections simply produce a transfer of power from one spouse to another (either immediately or with a lag) suggests dynastic dominance of a nation's political system. To the extent that dynastic succession centralizes political power along blood lines, the cause of popular sovereignty is erosion. Americans' attitudes toward the political dynasties which dot our nation's history - slightly embarrassed acknowledgment rather than celebration of the Adamses, the Roosevelts, the Kennedys, the Bushes, and now perhaps the Clintons - reflects unease over this erosion. I have been somewhat surprised at Barack Obama's reluctance to attack Senator Clinton by framing dynasties as damaging to democracy. If I were him, I would simply repeat George Will's observation that "change in America is not represented by Bush, Clinton, Bush, Clinton."

Lest I be accused of sexism in writing on the Argentine-American parallel, let me note that the men in question also share an interesting similarity. Both Bill Clinton and Nestor Kirchner entered office confronting by major challenges of national indebtedness. In Clinton's case, the tax cuts and spending increases of the Reagan years had created large federal budget deficits and a skyrocketing national debt. Clinton's first major policy initiative was a combination of tax hikes and spending cuts known as the 1993 Budget Reconciliation Act (predictably pilloried by Republicans as "the largest tax increase in history); implementation of this legislation contributed mightily to restoring fiscal soundness in America (alas, at least temporarily).

Ten years later, President Kirchner entered office to a fiscal situation far more dire than the one Clinton had faced in 1993. Argentina was burdened with $178 billion in public debt and largely unable to access international capital markets. In an act of considerable courage, Kirchner refused to adopt policies of budget austerity prescribed by the IMF and insisted that the IMF as well as private creditors must agree to a restructuring and rescheduling of debt payments if they hoped to be repaid any of the $93 billion in loans that Argentina had defaulted on in 2001. Though at the time many commentators warned that Kirchner's defiance would consign Argentina to economic ruin, his government in fact succeeded in persuading private creditors to accept repayment on terms far more lenient to Argentina. In 2005 Kirchner canceled completely Argentine repayments to the IMF. Kirchner's willingness to negotiate firmly with the IMF saved his country billions in loan payments, and was just on account of the IMF's bad policy advice in insisting that Argentina continue peso-dollar convertibility (a fixed exchange rate) even at the cost of crippling Argentina's export industries, mandating cuts in sorely needed social programs, and precluding a currency devaluation that could have averted a default and the ensuing disruptions. Since the IMF was partly to blame for Argentina's troubles, Kirchner was right to force the IMF to sacrifice some repayment in the interest of Argentine welfare.

Though the situations differed in severity and complexity, both Clinton and Kirchner responded to their nation's political distress with far-sightedness and courage. Clinton raised on the wealthy while also cutting spending, in the process gaining enemies on both the left and right. Kirchner defied the orthodoxy of international finance and showed that a nation could endure the largest national default in financial history and, with the right policies in place, still enjoy strong economic recovery. The electability of both men's wives is due in no small part to the salutary consequences of their husband's fiscal prudence.

Lesson? Anyone President seeking for his wife to someday succeed him should strive to make his nation less indebted, rather than more. This, among other reasons, is why I don't expect to see a "Draft Laura Bush" campaign anytime soon.

Blogging on the Brain is Hard

2007-10-28T16:15:00.000-07:00

Aiming to distinguish myself from the horde of left-of-center bloggers, I had hoped to blog about subjects other than politics. Since I have fairly varied interests, I thought achieving a breadth of high-brow content would be fairly easy.

It isn't. To illustrate this, consider my attempts to post about neuroscience, a subject whose literature I'm becoming conversant in. The difficulty with making intelligent observations about neuroscience is that... the brain is really complicated, and our understanding of its workings constantly evolves through new research. Whereas a single monograph in the New York Review of Books can provide a succinct and thorough overview of, say, health-care economics, even the most articulate neuroscientists such as Michael Gazzaniga require full-length books to convey their ideas appropriately.

If I cannot add anything to even lay debates about neuroscience, I least I can relay useful summaries of the specialized knowledge one must have to even comprehend what the debates are about. Here is Gazzaniga's conclusion to quick-and-dirty overview of neuro 101 (The Social Brain p. 25).

These few glimpses into basic brain mechanisms are sufficient to tell us what we need to know about the basic nature of the issue. Four principles emerge: (a) the brain develops under tight genetic control; (b) its basic architecture can be modfied only very early in life and then only in a negative way; (c) it is organized in such a way that relatively independent processing modules exist everywhere throughout the brain system; and (d) it has methods of self-modulating influences from the environment through an intricate, self-governed brain chemical system.

Translation:

(a) genes largely determine brain development;
(b) environment cannot measurably improve the brain, but can harm it, such as a head injury decreasing verbal IQ (and the brain is most susceptible to such injury in the first year of life);
(c) when there is sensory input to the brain, it is not processed once-at-a-time in different areas, but rather processed simultaneously in many areas (the brain as a parallel processor as opposed to a factory line);
(d) the body's chemical system mediates environmental influence to modulate pain and pleasure. For example, the (p.14) "self-produced opiates called endorphins which are crucial to a body's well-being. These chemicals are activated under conditions of bodily stress and serve to curb some of the pain we would otherwise feel in their absence. There is no doubt that we would feel more pain without them."

Feeling smarter yet?

Reed Grads Lead Pack in Collegiate Happiness

2007-10-28T15:35:00.000-07:00

NYT poll finds 76 percent of Reedies to rate their college experiences as excellent, whereas nationally only 54 percent of graduates rated their schools such a high rating (65 percent of both Penn and Michigan grads described their college years as excellent). Evidently the recipe for a happy undergraduate education is "Communism, Atheism, Free Love."

The aforementioned poll has many rich findings, which I hope to f ind time to digest. Though a survey of graduates is not necessarily the best way to judge the "quality" of a school (much less its appropriateness for any particular student), the NYT poll's detailed analysis outperforms the crude aggregate indices of U.S. News and the impressionistic summaries of guidebooks in suggesting how Penn, Reed, and Michigan fair in promoting students' intellectual and personal development.

Jacques Steinberg's discussion of the poll results ends with this thoughtful conclusion, which he gives after quoting a Reed alum who found his college years most valuable:

One conclusion to be drawn from Andrew’s obvious satisfaction with his education, when laid alongside the responses of so many of his peers, is that the convoluted process of matching students to colleges ultimately does what it is supposed to do. But in the end, I also find myself reflecting on the ongoing regrets expressed by so many of the alumni we contacted — not with their overall college experiences but with the day-to-day choices they made, whether it was the belly-dancing class that one Reed graduate said she missed out on because she was studying too hard or the Greek tragedy that lay untouched on another Reed student’s dorm-room bookshelf and now, in all likelihood, will never be opened.
Perhaps we should be spending a little less time coaching and cajoling high-school students about how to get into college, or even how to identify that mythical “right” college, and instead help them prepare a little better for how to strike a balance, or explore what they hope to accomplish, once they get there.

Having throughout college skipped debate tournaments in order to do yet more studying - and
now occasionally lamenting those choices (particularly since, given my current state of unemployment, I was obviously studying the wrong things) - Steinberg's plea struck me as on the money.

Trash-Talk 101

2007-10-28T14:06:00.000-07:00

Strolling through Morningside Park on a perfect fall Sunday in New York City (sunny and windy), I overheard a cackle of laughs from a group of guys about to play touch football. Apparently, the group was ribbing one of its members for a new haircut that made him "look like a cop." The butt of the joke did not take this ribbing kindly. When the belly-laughs subsided, he addressed the group thusly: "Choke on your spit, die in your sleep, and to anybody else who got something to say - I hope your girl gets herpes." Ouch.

The solution for avoiding such nasty exchanges over hairstyle is obvious: male friends all ought to have the same haircut. The salutary effects of such uniformity are on display here.

S-CHIP Expansion and AMT Elimination

2007-10-26T16:59:00.001-07:00

That House Democrats failed yesterday to attract enough Republican support to override the President's veto of S-Chip expansion - despite altering the legislation to satisfy the President's stated concern for putting the poorest children first and capping S-Chip eligibility at 300 percent of the federal poverty level - only underscores the obvious - electing a Democrat in 2008 will be absolutely critical to achieving comprehensive health care reform. A Democrat in the White House alone won't do it, but without it one you can pretty much kiss the chance good-bye.

Beyond being impressed at the President's ability to kill S-Chip expansion, the combination of yesterday's House vote with the beginning of Republican attacks on Charlie Rangel's proposed tax reforms - including elimination of the Alternative Minimum Tax - made for an interesting juxtaposition. I find it hard to take seriously Republicans' concern for stopping the middle-class from cheating the poor on the spending side. when they have done so little to keep the rich from cheating the middle-class on the tax side. Let me explain.

On the one hand, you have Republicans accusing Democrats of distorting S-Chip - a program intended to help poor children obtain health insurance - into a vehicle of middle-class largess. This was the source of complaints about New Jersey extending eligibility to beyond 300 percent of the poverty level (to $72,000 for a family of four, hardly a princely sum in Garden State), about the alleged impropriety of allowing adults to enroll in the program (even though this is often the best way to get children covered, and the reform bill forced states to drop S-Chip coverage of childless adults), and most pointedly in the battles over Graeme Frost. Basically, Republicans object that middle-class Americans are piggybacking onto a program intended for the poor.

Interestingly, even the most vehemently anti-tax Republicans have voiced little objection to the expanding reach of the Alternative Minimum Tax, which presents a case of a tax targeted at the rich increasingly ensnaring the middle-class. In 1969 Congress adopted the AMT as a backstop that would prevent rich citizens from taking so many deductions and exemptions ("tax preferences) that they effectively had no taxable income. The initial AMT law specified certain tax breaks used mainly by the rich (e.g. the capital gains payments and the oil depletion allowance), and stipulated that use of these tax breaks on income beyond $30,000 (about $150,000 in 2003) would trigger a tax of 10 percent on each dollar deducted. Unsuccessful in even its original intent, over the years both Republicans and Democrats have unwisely expanded the list of "tax preferences" to include deductions used by taxpayers of all incomes - including the standard deduction, child deduction, and medical expenses deductions.

The upshot is that, in the words of the Urban Institute's Len Burman, "what was a class tax is a becoming a mass tax." Or as David Cay Johnston says, the AMT is the "stealth tax." By 2010 about 85 percent of all taxpayers with two or more children will be forced off off the regular income tax and onto the AMT. In other words, the share of taxes paid by middle-class people - especially those with children - will explode due to misapplication of a law initially targeted at the wealthy. In the six years they controlled both houses of Congress and the White House, Republicans slashed tax rates on many things - income (especially for the wealthy), capital gains, dividends. Yet no effort to reform the AMT. Here comes Rangel proposing to eliminate the AMT, and the immediate conservative response is a predictable "biggest tax increase in history." If Republicans are so concerned with keeping class-based policies toward their original intent (as they claim to be with S-Chip), why so little advocacy of AMT reform? It looks frighteningly as is Republicans only care about cutting taxes that harm and the rich and very rich, while employing any arguments necessary to torpedo programs that aid the poor.

The AMT is a complicated issue, and I fear I have done a poor job in explaining it. I urge anyone seeking in-depth explanation to consult chapter seven of David Cay Johnston's Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich - and Cheat Everybody Else. What I am getting at here is the basic injustice of crying foul when the middle-class allegedly exploit a program for the poor, but remaining silent when taxes aimed at the rich end up punishing the middle-class. National attention should focus on this incongruity.

Lastly, Johnston's book makes clear that the AMT really is one issue where middle-class Americans are getting a raw deal. The economic welfare of middle-income families over the next decade will suffer far more as a result of AMT creep than it will as a result of illegal immigration. Anyone mind telling that to Lou Dobbs? Actually, given Dobbs' failure to understand even basic economics, best not confuse him with this.

Hillary in Harlem World

2007-10-26T16:20:00.000-07:00

Got an automated call this afternoon inviting me to this event. Anyone wanna go? Always a chance Charlie Rangel will say something funny...

The Old Shall Inherit the Earth - Even if They Won't Remember Doing It

2007-10-26T15:54:00.000-07:00

Michael Gazzaniga's The Ethical Brain contains a fascinating discussion of aging and the causes of memory loss. He motivates the social import of this issue with the following statistic (p. 23):

According to a recent report on the demographics of aging, in the year 1900 3 million people were over the age of 65, 4.1 percent of the population. By midcentury, 12.3 million people, or 8 percent of the population, were over 65. Now 34 million people in the United States are older than 65; soon that number will climb to 15 percent of the population, The number will double by 2030. [emphasis added]

Because of potential brain enhancements that Gazzaniga discusses, 65 year olds in 2030 will likely have mental faculties superior to those of contemporary 65 year olds. Nonetheless, we ought to contemplate what it will be like to live in a society where 30 percent of the population is 65 or older. I, for one, am ready. Swimming and lunching at the 92nd Street Y allows me to effectively visit the future each morning (albeit in slightly exaggerated fashion, since about 90 percent of these people are over 65). Let me say this: it can be eye-opening. First, I've learned that vanity never dies. These silverbacks seem to lift weights for hours on end! It would be nice if more of them did so in full clothing - as opposed to jockey shorts and headphones, the preferred workout gear of this set - but I guess it's reassuring to know that basic human traits never diminish.

I've also noticed that older people do not seem any more sensitive to the passing of time. For example, today I witnessed a perfectly sentient older gentleman spend about half an hour trying to convince some toddler -presumably his grand son - that scraping peanut butter off of a bagel with a knife was less efficient than simply biting the bagel. The man's effort was futile, but not for want of trying. This also reassures me - never too old to waste time.

Surely the Y will teach me much more about our seniors, and I will not hesitate to pass this knowledge along.

Hysteresis - Do I Have it? (hist-a-REES-is)

2007-10-26T14:25:00.000-07:00

If college education is a means to gain knowledge into one's self , then economics probably lags well behind psychology, biology, or even philosophy in delivering the goods. Beyond a few nuggets from behavioral economics (e.g. myopic loss aversion), this has more or less been my experience.

Fortunately for me, I have now entered a state about which my discipline has loads to say: unemployment. Relating theoretical models of unemployment to my own experience has not been difficult. For example, I have occasionally cited insights of search-and-matching models to justify my period of joblessness - reminding friends that in a world where workers and jobs are heterogeneous, the optimal length of search time (unemployment) may be positive. One of these smart-ass friends retorted that my reservation wage was simply too high. To which I say, at least I don't still live with parents! (oh wait...)

Anyhow, thumbing through Romer's Advanced Macroecnomics raised a frightening new possibility - as I succumbing to hysteresis? Romer defines the condition as follows (p. 473):

Situations where one-time disturbances permanently affect the path of the economy are said to exhibit hysteresis. In the context of unemployment, two sources of hysteresis... have received considerable attention. One is deterioration of skills: workers who are unemployed do not acquire additional on-the-job training, and their existing human capital may decay or become obsolete... The second additional source of hysteresis is through labor-force attachment. Workers who are unemployed for extended periods may adjust their standard of living to the lower level provided by income-maintenance programs; in addition, a long period of high unemployment may reduce the social stigma of joblessness. Because of these effects, labor supply may be permanently lower when demand returns to normal.

This idea became influential in the early 1980s and has subsequently been used to explain the persistence of high unemployment amid business cycle recoveries, particularly in those countries thought be stricken by Eurosclerosis. With Nicolas Sarkozy now exhorting France to "roll up its sleeves" and "get up early," now is not the time to contract a malady closely associated with lazy Frenchmen. So I wonder - am I exhibiting any symptoms of hysteresis?

deterioration of skills, lack of on-the-job-training, decay of human capital: Given the monotony of many entry level positions, I can flatter myself into believing that my stock of human capital is holding up at least comparably to how it would be if I had a job. But lack of on-the-job-training is clearly a concern. When everyone else is mastering tricks in Excel, VBA and Matlab... I'm trying to convince a Time Warner guy that crawling beneath my floor really won't be that uncomfortable. I've also made no progress in developing the skill that strikes me as most important for entry-level work: how to appear busy without actually working.
Adjusting my standard of living to a lower level provided by income-maintenance programs: Ha! Most adjustments to my standard of living have been upward, baby. Who in the working world can spend twenty minutes at Yura deciding what to eat for lunch? I have begun taking the bus far more, but given the price of cabs in new york, this is probably a habit to be welcomed rather than a lapse to be denigrated.

Reducing the social stigma of extended joblessness: Here's where the real fear lies. I would not yet consider my time of leisure to be "extended," but the embarrassment from being a bum does diminish over time. You never relish the question of "what do you do?" circulating around the table, but after a few times you realize that "nothing" isn't an answer that warrants immediate ostracizing. Some people become noticeably less interested, others don't, but usually the conversation drifts to greener pastures.

So is hysteresis afflicting yours truly? Probably no reason to worry just yet. I'll check back in a month to see how my symptoms are progressing. In the meantime I'm not too worried: my youthful petulance made me too restless to indulge life's other great pleasures (drinking, drug use, talking back to one's parents)... toward the joy of working I'm showing admirable restraint!

A Small World at 1255

2007-10-25T15:44:00.000-07:00

New York City's international diversity never ceases to impress me - even when sitting in my own kitchen! Over lunch our Malaysian housekeeper, Moy, (who, in addition to Malay and English, speaks Mandarin, Cantonese, Vietnamese, Thai, and some Japanese - leaving me to often ponder whether she couldn't find more lucrative work elsewhere) began inquiring about the nationalities of the various gentleman working in our apartment this afternoon. Turns out we had two painters from Chile (Gabe and Italo) and one computer guy from Argentina (Lucio), both assisted by our Ukrainian superintendent (Peter) and rung up our Latvian doorman (Yuri). Anyway you cut it, that's a pretty broad swath of the global landscape represented in one tiny apartment. And I'm not even counting my other doorman - a Spanish-speaking second-generation American named Ismael - who's background I never have quited pinned down.

Predictably, the only worker to disappoint this afternoon was the one native born American: a Time Warner Cable rep (Jimmy) who balked at having to crawl under the floor in my brother's room in order to reach the cable wires. Can't blame him. As my ingenious father designed it, you literally have to lift a trap door in the floor, drop down into a little crawl space, and slither commando style toward a gaggle of wires. My superintendent's instructions for even accessing this crawl space seemed clipped from a Ukrainian Legends of the Hidden Temple:

Reid, stand in your brather's room facing the air conditioner. Move the stone elephant sculpture toward the desk. Now stand with one foot on the exercise machine and one on the window sill. See the little hole in the right corner between the air conditioner and the bed? Stick your finger down there and pull up the piece of the floor.

Upon finally lifting the trap door, I found no silver monkey waiting assembly - only lots of dust and, oddly, a miniature wicker chair from our old country house that for some reason my dad saw fit to store underground. Jimmy the cable guy promptly declined to crawl into the whole, informing me that "We don't get paid enough to crawl." Anyhow, at least my floor-lifting skills impressed Peter - he only half-jokingly offered to hire me as his assistant (news of unemployment travels fast in this building). Regrettably, I'll have to decline Peter's offer. With my dad planning a major renovation of the living room, our little fiefdom of international laborers will grow by the day. If I actually had a job, who would there be to celebrate this tapestry?

Debates Update

2007-10-25T10:55:00.000-07:00

Michael Barone proposes letting Republicans and Democrats mix it up in the primaries with two-party debates. Since Republican debaters spend half their time attacking Hillary Clinton anyway, this is surely a good idea (at least once the early primaries weed out a few candidates). The combination of our new super-long election cycle plus legitimate political differences in this country makes for a weird dynamic - much policy debate, but confined within certain taken-for-granted boundaries (in the Dem debates every participant wants to leave Iraq, and the question is merely over the time and method; in the Republican debates everyone wants to get tough with Iran, and the question is only who will be most tough).

Since the next President will almost certainly not have a filibuster-proof majority in the Senate, and since the liberal/conservative and centrist wings of both parties often clash in any case, moving forward on the most important issues - Iraq, health care, detainees - will inevitably involve compromise. To find those compromises, we should start comparing the views of each side now, rather than waiting until basically two-thirds through the election cycle.

Put differently, I would much rather hear a debate between Republicans and Democrats over how much government should intervene in the health care market (and how we should pay for that intervention) than a debate between two Democrats over the role of mandates in securing universal coverage. I would rather hear John Edwards attack Republicans for preferring tax breaks for millionaires over coverage for 48 million uninsured than hear him attack Barack Obama for a plan that only achieves near-universal coverage. When Mitt Romney ludicrously proposes to "double Guantanamo", having Democrats present to respond will enliven the debate, whereas now John McCain simply seethes in silence.

There are some issues - e.g. abortion - in which even bipartisan debate will probably not change anyone's mind. But anyone with faith with progressive ideas should welcome clash with conservatives as early and often as possible. The case for raising taxes on the rich to fund universal health care, for engaging in diplomacy with hostile countries, and for respecting basic human rights of detainees is already persuasive to Democratic primary voters. Forcing these ideas to engage the conservative counter-punch early on can strengthen their appeal to independents and moderate Republicans as well.

Presidential Debates.... Not a Waste of Time After All

2007-10-25T09:22:00.000-07:00

Everyone from George Will to Jon Stewart has taken to mocking the supposed excess of Presidential debates. The debates thus far have been far from perfect: the large number of candidates forces discussion of complex issues down to thirty-second sound bites, compromising intelligent discourse even more than in election cycles past. Organizing debates with fewer candidates might mitigate this problem, but this raises the inevitable difficulty of deciding fairly who will participate in each debate - and the specter of lesser-known candidates crying foul anytime a debate occurs without them (recall Kucinich's indignant response to the Clinton-Edwards private exchange over smaller debates).

Flawed as they are, the primary debates thus far been undeniably successful in helping citizens to get a better understanding of candidates. For those of us who do not live in Iowa or New Hampshire, and are not rich enough to attend fund-raising dinners, they represent one of the precious few changes to see candidates in action. This is especially true for dark-horse candidates - e.g. Mike Huckabee or Bill Richardson -and the free media exposure that comes through the debates can at least conceivably mitigate the phenomenon of requiring that people already be famous before they can be Presidential contenders.

More than mere familiarity, however, the practice of having competing candidates answer the same questions has drawn attention to substantive differences among the front-runners in each party. It was in response to a question during the August YouTube debate that Obama vowed to talk with leaders - of Syria, Iran, Venezuela, et al. - that the U.S. currently shuns; citing Cold War history, Obama criticized the notion that "the U.S. can punish or change hostile states simply by ignoring them." In response to the same question Hillary pounced on Obama as naive, refusing to commit to talk with leaders who would exploit her for propaganda purposes (specifically Ahmadinejad).

Whatever your position on the merits, the exchange revealed one of the first substantive foreign policy differences between Clinton and Obama (Hillary's vote to brand Iran's Revolutionary Guard as a terrorist organization has subsequently revealed another). The debates have also drawn attention to lesser policy differences, such as the disagreement between Edwards and Obama over whether a health care plan can achieve universal coverage without mandating that everyone purchase insurance.

Beyond highlighting policy differences, one learns a lot about a candidate's character by him to think on his feet. Thus, perhaps the most revealing moment of the debates thus far was Mitt Romney's answer to a question about whether the Constitution would oblige the President to seek Congressional authorization for a strategic attack on Iran's nuclear facilities (think Osirak).
Romney replied:

You sit down with your attorneys and tell you want you have to do, but obviously the president of the United States has to do what's in the best interest of the United States to protect us against a potential threat. The president did that as he was planning on moving into Iraq and received the authorization of Congress.

When pressed by Chris Matthews for a clarification, Romney once again insisted that he would "sit down with his attorneys." For a Presidential candidate to punt on a question of such import reveals a frightening lack of seriousness. Coupled with Romney's proposal to "double Guantanamo" (also given during a debate), the Iran answer further illustrated to me the danger of putting Romney in charge of U.S. armed forces.

In the interest of more policy clash and more glimpses into candidate thoughtfulness, I say - more debates! If more candidates can candidates can ape the humor of McCain's Woodstock quip, these things might really become worth watching.

Ken Burns The War

2007-10-24T19:33:00.000-07:00

The War is an incredible documentary. Hearing from soldiers and citizens firsthand makes the sacrifice and carnage of WWII real in a way that even the best History Channel documentary cannot even attempt. The soundtrack is also great. Check it out on PBS or order here.

Geoengineering as a Solution to Climate Change

2007-10-24T19:21:00.000-07:00

Scientist Ken Caldeira makes the case for "geo-engineering" - shooting trillions of small particles of sulfate into the stratosphere as a way to reflect sunlight and cool the earth's temperature - as a last-ditch way to mitigate climate change without reducing carbon dixoide emissions. Such proposals are controversial - because the engineering problems are formidable, because sulfate is a harmful substance, and because of the fear that people will seize on geo-engineering as an excuse to ignore CO2 reduction. Nonetheless, I think Caldeira frames research into geo-engineering correctly - as an insurance policy that we ought to have in case we cannot resolve the economic and political challenges of controlling emissions.

The idea of geo-engineering first came to my attention through this WSJ article; it stuck in my mind because game theorist and Nobel laureate Thomas Schelling is a geo-engineering advocate (and presumably he knows a thing or two about collective action problems of the kind that bedevil climate agreements). Schelling briefly discusses the idea in his survey of climate policies here (see Kenneth Arrow's review of economics of climate change in same volume).

Lou Dobbs - Horse-Loving Hypocrite?

2007-10-24T14:55:00.000-07:00

Lou Dobbs is a strong opponent of illegal immigration. In his campaign to cease the flow of illegals in this country, one of Dobbs' main tactacts has been to support laws punishing businesses that hire illegals (with severe fines and often imprisonment). As he tells it, hiring illegals should be made a felony.

Yet is Lou Dobbs himself funneling money to businesses that hire illegals? Anyone familiar with Dobbs' ties to the equestrian business would have to admit the possibility as at least possible. Let me explain. Dobbs has two daughters who are both accomplished horseback riders, competing at the highest levels in equestrian and show jumping competitions (in 2006, my sister was selected along with both of the Dobbs girls to join the U.S. Young Riders team, a collection of the top U.S. riders under 18). The Dobbs famiy owns multiple horses at their estate in New Jersey.

Anyone vaguely familiar with the horse world can tell you that it is rife with illegal immigrants. Of the hundreds of predominantly Mexican and Latin American workers who serve as grooms in high-priced barns, relatively few have Green cards. As a child tagging along at horse shows in Lake Placid, NY and Wellington, FL, I have found memories of visits by INS officials sending grooms scattering and shutting down competition for entire days. Excluding certain types of agricultural work, I would bet that the equestrian business has a higher percentage of illegals than just about any industry in America.

Lou Dobbs obviously pays for his daughters barn fees. Might the barns at which the Dobbs daughters ride employ illegal immigrants as grooms? Though I have no way of answering this question, some enterprising investigator would do well to check it out. I'm tempted to fly down to Palm Beach this winter and poke around the Dobbs daughters barn myself. Maybe befriend an INS agent tired of being ridiculed by Lou Dobbs as incompetent and enlist him in the cause.

My interest in this story is not simply a matter of playing Gotchca!, and certainly not in embarassing the children of a public figure. Lou Dobbs' payments to the equestrian business fascinates me because horse barns are such perfect examples of how illegal immigrants contribute to this country. Being a groom is a very physically demanding job at low wages; if we were to deport all illegal immigrants tomorrow, I doubt that many native Americans would be lining up to muck stalls or braid horse manes for minimum wage. At the very least, deporting all illegal immigrants would create considerable excess demand for grooms in this country.

So barn owners who employ illegal immigrants strike me as doing basically nothing wrong - they are providing jobs to very poor people, jobs that most native Americans would not want. Yet Lou Dobbs is intent on vilifying all business owners who employ illegals as anti-American criminals. If one could show that Dobbs himself is supporting the employment of illegals.... maybe this revelation could add some nuance to the immigration debate! Any immigration officials reading this?

Lou Dobbs - Angry and Confused

2007-10-24T14:14:00.000-07:00

During breathers from his immigration tirades, Lou Dobbs continues his campaign to alarm and misinform the American public on economic matters. Moneyline of Monday October 22 included a segment on the U.S. trade deficit with China ominously titled “Red Tide Rising.” The segment touched on the expected points: the size of the U.S.-China current-account imbalance, China’s allocation of $200 billion to a sovereign wealth fund, and this fund’s investment in U.S. private equity firms Blackstone and Bain Capital (all voiced over alternating shots of Chinese factories and U.S. stock exchanges. This segment was remarkable for Dobbs’ total lack of argument as to why the U.S. current-account deficit with China was hurting the U.S. economy overall. As usual, Dobbs substituted hyperbole and intonation for evidence and explanation, taking for granted that a current-account deficit with China is a bad thing.

To assume this, however, is economic nonsense. Running a trade surplus is by no means necessarily indicative of overall economic health (ask Japan, whose large annual current-account surpluses throughout the 1990s arose despite anemic GDP growth). Similarly, running a trade deficit by no means consigns an economy to stagnation; the U.S. in the 90’s enjoyed fabulous macroeconomic conditions amid rising external imbalances. Though America’s massive demand for Chinese imports undoubtedly hurts certain domestic producers, sating this demand benefits American consumers. Simply denouncing the size of a trade deficit provides no framework for weighing this impact and thus conveys nothing.

Even more remarkable than Dobbs’ dubious mercantilist rhetoric is his willingness to denounce U.S. trade deficits and in the same monologue express outrage over recent declines in the value of the dollar, citing both as evidence of “the absence of American economic leadership.” An excerpt from the segment:

DOBBS: And the total surplus for China and its trade position works out it be just about -- oddly enough -- the same as the U.S. trade deficit with Communist China.

ROMANS: It's funny how that works out.

DOBBS: Isn't it interesting, too, that this government, this administration hasn't got a clue, has not been able to speak forward in any forward manner about what they're going to do in terms of a dollar that is falling like a rock against the euro -- and now the yen, as well -- and most -- and the largest basket of world currencies.

Don't you find the lack of leadership -- dare I say it, bush administration people -- listen up White House, you've got a job to do. It isn't just some sort of absurd free market, faith-based nonsense in which you keep your mouths shut and don't pursue the national interests. Yet here we are.

This is totally contradictory! As any intro econ student knows, a falling dollar will reduce U.S. demand for foreign imports and boost demand for U.S. exports (as has happened to some extent over the last two quarters). Other things equal, a falling dollar will shrink the size of the U.S. trade deficit; to be, as Dobbs is, both for a strong dollar and against U.S. trade deficits defies the simple logic of international trade.

Some might claim that fluctuations in the value of the dollar are irrelevant to trade with China because China pegs the yuan to the dollar (or at least restricts its float to within a narrow band). China’s intervention in the foreign exchange market, however, only serves to strengthen the dollar (at least vis-à-vis the yuan), contributing to Dobbs’ goal of a stronger U.S. currency. Unless Dobbs can articulate some reason why a current-account deficit with China is particularly dangerous, the yuan-dollar peg leaves intact the basic inconsistency between praising both trade surpluses and a strong currency as signs of economic health.

On a more technical note, I would argue that one can assess the U.S.-China trade imbalance only by first understanding its root causes. Within the basic framework of (exports-imports)=(savings-investment), several forces can drive the size of a country’s external imbalances. In a recent working paper, Andrea Ferraro of the New York Federal Reserve Bank examines three potential drivers of trade dynamics between the U.S. and its G-7 trading partners (note that this does not include China). 1) Productivity Differences: If country A has higher productivity growth than country B, then country A assets will offer higher returns. In a world of perfect capital mobility, country B will seek to create a current-account surplus with country A and then use the foreign-exchange proceeds to invest in country A’s relatively higher-yielding assets. 2) Demographic Shifts: In a world where people of different ages have different propensities toward saving, the age structure of an economy’s population will determine its quantity of savings relative to investment, hence exports relative to imports. 3) Fiscal Changes: Since public saving or dissaving (e.g. a central government budget deficit or surplus) is on component of overall saving, fiscal changes can also affect an economy’s demand for imports relative to exports.

After constructing a stylized two-country model and fitting it to several years of data, Ferraro determines productivity differences to be the overwhelming driver of America’s external imbalances (demographic shifts played a lesser role and fiscal changes a very minor one). In other words, within the universe of G-8 trade, U.S. current-account deficits are a symptom of economic robustness – high productivity growth relative to other G-7 countries – rather than economic decay. One hopes that Ferraro or another researcher will extend this framework to U.S.-China trade to determine whether a similar pattern holds. Even without this, the Ferraro paper suggests one disastrous method to reduce America’s trade deficits: slow U.S. productivity growth. Hell, slower productivity growth wouldn’t only reduce our trade deficits, it would also probably create fewer job opportunities for illegal immigrants. Sounds like a policy Lou Dobbs nationalists could love!

Understanding Free Trade

2007-10-24T14:11:00.000-07:00

Often embattled in both lay and elite opinion, free trade is in danger of losing majority support in this country. WSJ and Pew research polls show support for free trade slipping among both Republicans and Democrats. As Sherrod Brown and the rest of the 2006 "Lou Dobbs Democrats" assume their places in Congress, one should not imagine opponents of free trade as merely the likes of Nader, Perot, and Buchanan - harsh words for free trade are becoming mainstream. As an active member of the Democratic Leadership Council, Harold Ford Jr. criticizes China's "unfair trading practices." Recall that DLC was a mainstay of pro free trade thought during the Clinton years, especially during the early battle over NAFTA. At the "YearlyKos" blogger convention in Chicago this August, Hillary Clinton responded to a question about NAFTA with a thumbs down. John Edwards says if elected he does not even want Congress to renew Presidential Trade Promotional Authority (so-called "fast track" authority that enables the President to submit trade deals to Congress for an up or down vote, no amendments). Given that in 1998 - when the national economic mood was far brighter - President Clinton could not persuade House Democrats to support TPA renewal, it seems highly unlikely any Democrat elected in 2008 would be able to keep TPA anyway. In the next few years U.S. bilateral trade negotiations will probably grind to a halt.

All this brings to mind a fascinating (if dated) piece by Paul Krugman about why the idea of comparative advantage is so difficult for people to comprehend. This piece focuses mostly on elite opinion - the attitudes of financially anxious middle-class families or laid-off manufacturing workers are not foremost in Krugman's analysis. Yet the views of taste-makers inevitably filter down to ordinary Americans looking to find culprits behind their economic woes. Anyone with an interest in defending this beleaguered idea will do well to read Krugman's essay.

Toobin Predicts Obama as Hillary's Supreme Court Nominee

2007-10-24T14:00:00.001-07:00

In conversation with Charlie Rose, Jeffrey Toobin predicts that if elected Hillary will nominate Barack Obama to replace Justice Stevens. His rationale for Obama was as follows: former editor of Harvard Law Review, U Chicago con law professor, African-American, would be the first Senator to serve on the Court in a long time – not impossible to imagine. Let’s not get ahead of ourselves, however, since in my view Obama still has a decent shot to win the nomination – despite the media as of late anointing Hillary as unbeatable. Even if Hillary does win, might Obama not be a plausible VP candidate?

More substantively, Toobin points out as the Court’s new swing justice, Anthony Kennedy is more powerful than Sandra Day O’Connor ever was. In the last term’s twenty-four opinions Kennedy was in the majority in every one. Kennedy’s decisive influence is at times welcome – as in Hamden and prior Guantanamo cases, where Kennedy has rejected administration claims of executive privilege – and at other times unwelcome – as in Kennedy’s absurdly paternalistic opinion upholding the partial-birth abortion ban in Gonzales v. Carhart. If you want to understand the future of the Court, watch Kennedy…

In discussing Clarence Thomas, Toobin reaffirmed the emerging consensus that Thomas is by far the most conservative member of the Court (much more so than Scalia). Though Toobin did not engage whether Thomas in fact believes stare decisis to be a bankrupt doctrine, he did argue that Thomas regards “large parts of the New Deal as unconstitutional,” inasmuch as they expanded executive power beyond the limits prescribed in the Constitution. One hopes Justice Thomas will eventually be more outspoken about his judicial philosophy. Regrettably, both in his new autobiography and in appearances to promote the book Thomas focuses exclusively on episodes from his life story, giving short shrift to legal matters.

As a final noteworthy fact, Toobin noted that this Court is unique in that each of the justices had served as judges prior to being appointed to the Supreme Court. Evidently this uniformity is rare in history; for example, despite a number of highly respected legal thinkers (Frankfurter, Brennan, Douglas, Black), the Warren Court that ruled on Brown v. Board of Education included not a single justice who had been a judge prior to acceding to the Court. Is there some value to having Supreme Court justices with non-judicial backgrounds? This would be an interesting question for students of American legal history to pursue.

Valerie Plame.... is smokin!

2007-10-21T16:49:00.000-07:00

The 60 Minutes piece on Valerie Plame only further exposes the outrage over her illegal outing by Dick Armitage and Robert Novak. Covert or not, this woman is strikingly beautiful! Think about how many terrorist spies she could have recruited with those looks. A huge loss!

Tiki and the Bus

2007-10-21T16:38:00.000-07:00

A funny juxtaposition on NBC NFL Tonight, with Tiki Barber sitting across the table from Jerome Bettis. Whereas Tiki left at the top of his game in order to avoid the weekly punishment and preserve his body, for sixteen years the Bus endured sixteen years of pounding and unbelievable weekly rehab routines that enabled to endure fresh whoopings every sunday. Yet despite these differences.... they both end up as studio commentators on NBC. Makes you wonder what it is all for (I bet Tiki has a much easier time getting out of his chair at the end of the show).

On another note, the duo of Bob Costas and Keith Olberman (with sprinklings of Peter King) is now the class of sunday night football shows. Finally NBC gives the criminally underused Costas a chance to do some sports. Goodbye Curt Menefee!

Protectionist Gephardt Becomes Mouthpiece for Turkey

2007-10-21T13:28:00.000-07:00

A double irony involving Dick Gephardt here. First, that the most stridently protectionist politician in the second half of the twentieth century is now in the employ of a foreign government. The man who - most notably in his failed bid for the 1988 Democratic Presidential nomination - assailed proponents of free trade as putting the interests of other countries before those of Americans is now in fact paid ($1.2 million this year) to represent the interests of a foreign country.
Second, that Gephardt - who increasingly framed his opposition to trade deals as a matter of protecting human rights for workers abroad - is working to quash a long overdue denunciation by the U.S. Congress of Turkey's 1915 massacre of Armenians. Evidently Gephardt supports free trade (at least in lobbying services) and ignores human rights when it is convenient to do so. Just another example of why I am relieved this man no longer leads the Democrats in the House.