Friday, May 29, 2009

The future of manufacturing, and American workers

Robert Reich has a fantastic piece on why we ought not to be insanely worried about the loss of manufacturing. Read the entire argument here. An excerpt:

Want to blame something? Blame new knowledge. Knowledge created the electronic gadgets and software that can now do almost any routine task. This goes well beyond the factory floor. America also used to have lots of elevator operators, telephone operators, bank tellers and service-station attendants. Remember? Most have been replaced by technology. Supermarket check-out clerks are being replaced by automatic scanners. The Internet has taken over the routine tasks of travel agents, real estate brokers, stock brokers and even accountants. With digitization and high-speed data networks a lot of back office work can now be done more cheaply abroad.

Any job that's even slightly routine is disappearing from the U.S. But this doesn't mean we are left with fewer jobs. It means only that we have fewer routine jobs, including traditional manufacturing. When the U.S. economy gets back on track, many routine jobs won't be returning--but new jobs will take their place. A quarter of all Americans now work in jobs that weren't listed in the Census Bureau's occupation codes in 1967. Technophobes, neo-Luddites and anti-globalists be warned: You're on the wrong side of history. You see only the loss of old jobs. You're overlooking all the new ones.

The reason they're so easy to overlook is that so much of the new value added is invisible. A growing percent of every consumer dollar goes to people who analyze, manipulate, innovate and create. These people are responsible for research and development, design and engineering. Or for high-level sales, marketing and advertising. They're composers, writers and producers. They're lawyers, journalists, doctors and management consultants. I call this "symbolic analytic" work because most of it has to do with analyzing, manipulating and communicating through numbers, shapes, words, ideas.

Spelling Bee, and Indian-Americans

So, yet another Indian-American wins the Spelling Bee. This time, it was Kavya Shivashankar. "seven Indian American kids coming from a community that is less than one percent of the total US population breezed into the finals making about two thirds of the 11 top spellers", reports Sify.


It all started back in 1985 when an Indian-American kid, Balu Natarajan, won the event. That kid is now Dr. Natarajan, a internal medicine and sports MD guy, who notes on his website that:
Winning the “Bee” was definitely an important experience in his life and opened many doors for him. He is quick to note that the victory is not his alone and that his parents, family, community and school share equally in this accomplishment. He also adds that the 1985 Spelling Championship is just one event in his life and that he is more proud of being a good doctor and the work he does with his patients than his title as 1985 Champion.

Thursday, May 28, 2009

Faith

Healthy states, not weak states, getting stimulus?

Here in Oregon the economic picture is gloooooomy. Reading this in USA Today makes it gloomier, with respect to stimulus getting the state out of the recession.
States hit hardest by the recession received only a few of the government's first stimulus contracts, even though the glut of new federal spending was meant to target places where the economic pain has been particularly severe.

Nationwide, federal agencies have awarded nearly $4 billion in contracts to help jump-start the economy since President Obama signed the massive stimulus package in February. But, with few exceptions, that money has not reached states where the unemployment rate is highest, according to a USA TODAY review of contracts disclosed through the Federal Procurement Data System.

In Michigan, for example — where years of economic tumult and a collapsing domestic auto industry have produced the nation's worst unemployment rate — federal agencies have spent about $2 million on stimulus contracts, or 21 cents per person. In Oregon, where unemployment is almost as high, they have spent $2.12 per capita, far less than the nationwide average of nearly $13.

That money "is needed nowhere more than it is needed in Michigan," says Leslee Fritz, a spokeswoman for the Michigan Economic Recovery Office, which is coordinating stimulus efforts in that state. She said officials are generally satisfied with the pace of federal aid, but added, "We certainly feel very intensely the need to move quickly."

The $787 billion recovery package was intended to help turn around the economy using federal money to create jobs, especially in places where the recession has taken the most severe toll. Most of that money goes directly to states to pay for work such as highway repairs, but federal agencies also will spend billions of dollars to do everything from fixing runways and improving national forests to cleaning up nuclear waste.

The report has an interactive map that is quite good. According to that map, Oregon's jobless rate is 12%, and the per capita stimulus funding so far is $2.12. In neighboring Washington, with a much lesser unemployment rate of 9.1%, per capita stimulus funding thus far is a whopping $216.02!

America: emigration, not immigration?

Over to Michael Arceneaux:
Many African immigrants are returning back to their respective home countries.

While we are accustomed to viewing dreary depictions of Africa, those there are becoming quite comfortable with their living situations.

Recent studies by the Pew Research Center show people’s level of satisfaction with their quality of life has risen all across the continent of Africa.

By contrast, attitudes for Americans have remained stagnant if not decreased.

Between that and a sense of optimism about the future of individual African countries’ economies, and it’s clear why some Nigerians, Ghanaians, Kenyans, and others have decided they’d rather deal with an unstable internet connection than an unstable nation.

Joining them are Chinese and Indian natives who no longer feel they have to leave their respective home countries to get ahead.

Even many Mexican immigrants have started to flee the country due to our sour economy.

America has long been known as the country where anything as possible.

The entire world has looked to us as a beacon of hope of what could be. One of American’s greatest strengths is that it’s become a melting pot of the world.

What does it say about the future of this country if those who came here with a sense of optimism are now leaving with a newfound distrust in the American promise?

Sotomayor. Hispanic. Identity politics.

Matt Yglesias has a wonderful post; here is an excerpt:
The idea that any time a person with a Spanish last name is tapped for a job, his or her entire lifetime of accomplishments is going to be wiped out in a riptide of bitching and moaning about “identity politics” is not a fun concept for me to contemplated. Qualifications like time at Princeton, Yale Law, and on the Circuit Court that work well for guys with Italian names suddenly don’t work if you have a Spanish name. Heaven forbid someone were to decide that there ought to be at least one Hispanic columnist at a major American newspaper.

Somehow, when George W. Bush affects a Texas accent, that’s not identity politics. When John Edwards gets a VP nomination, that’s not identity politics. But Sonia Sotomayor! Oh my heavens!

At any rate, Ann Friedman wrote a great piece on the hypocrisy of this back during the Democratic primary. And I think this item from Neil Sinhababu on constructing political identities is insightful.
And, how about the following from Reason's Steve Chapman?
Few objections were heard from Republicans in 1991, when President George H.W. Bush decided that the ideal person to fill the vacancy left by Thurgood Marshall, the court's first black justice, was Clarence Thomas, who just happened to be black as well.

Bush did his best to have it both ways. He insisted that race was irrelevant and that Thomas was simply the "best qualified" candidate in the country. But he also said, "(I)f credit accrues to him for coming up through a tough life as a minority in this country, so much the better."

Back then, conservatives played the identity game gingerly, as if they were slightly embarrassed. But they have since learned to make the most of it. The most recent and regrettable example is Sarah Palin, lustily cheered by Republican audiences last year not because she had the credentials and ability to step into the presidency, but because she was the Right Kind of Person.

First, she was a woman, picked to attract disappointed Hillary Clinton supporters, as Palin shamelessly highlighted: "Hillary left 18 million cracks in the highest, hardest glass ceiling in America. But it turns out the women of America aren't finished yet, and we can shatter that glass ceiling once and for all."

Second, she was not one of those effete urban elitists but a real American—small-town girl, beauty queen, hockey mom, "Bible-believing Christian" (as she put it), mother of five, and moose hunter.

Rep. Robin Hayes (R-N.C.), said she was controversial because "liberals hate real Americans that work and accomplish and achieve and believe in God." Palin herself celebrated her brethren from small towns, which she called "all of you hard-working, very patriotic, very pro-America areas of this great nation."

Of course it's useful to include the perspective of small-town residents in formulating policy, just as it's a good idea to consider the impact of laws on Latinos. But to imagine that either group—or any group—has a unique claim to wisdom or goodness is only to prove that no group is immune to foolishness.

Obama. Cliff Huxtable. Hilarious :-)

The Cosby Show ran for eight years--two presidential terms :-)

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What does the world look like?

Could it be true that that only a few, other than real estate agents and geographers, understand the importance of location, location, and location?

I asked the students in one of my classes whether they considered Iraq and Iran as important enough for Americans to know more about. There was no hesitation—students unanimously, and loudly, voiced their affirmatives. The party-pooper that I am, I interrupted their enthusiastic comments by handing out blank outline maps of the Middle East and directed them to identify as many countries as they possibly could. Given how much Iraq has been dominating our lives, I was sure that a majority of the class would at least identify that country. Of course, the blank map included Iran and Afghanistan as well, which are equally newsworthy.

Well, it turns out that the familiarity that the class had about Iraq, Iran, and Saddam Hussein did not lead to a spatial understanding of that part of the world. Class discussions suggested that the actual location of Iraq or Iran did not matter to them. Iraq may as well be on Mars then?

After pointing out the countries, at the end of the exercise, I directed them to look at Sudan and Ethiopia. As they kept staring at the countries on the map, perhaps for the first time in their lives, it became apparent to them that it is a relatively narrow body of water, the Red Sea, which separates these countries from a larger contiguous land area that we refer to as the Middle East. For all purposes, Sudan and Ethiopia are, hence, only a metaphorical stone’s throw away from Saudi Arabia, and yet Ethiopia is imagined as a poor country in a remote part of Africa.

Of course, geography is not about memorizing maps, or random and trivial facts about places. It is about understanding relationships—such as economic or political relationships—between and amongst geographic areas. Such a framework, though, begins with knowing the actual location of a place, and its relationship with its surroundings. After all, if we didn’t know where exactly Ethiopia is, would we really be able to understand why that country seems to have so many problems, and how those spill over to neighboring Eritrea, for instance?

The fantastic and fortunate contrast to the disinterest in understanding locations is this: we live in a world in which information is freely and easily accessible. News media often include maps of countries in their reports. A simple Google search brings up detailed maps of practically any area of the world. This ease of obtaining information is all the more the reason educators like me want our students, and the general populace, to understand and appreciate the world.

Information was not so readily available sixty years ago. Which is why I find it simply remarkable how President Franklin Roosevelt emphasized the spatial understanding of the world, when the country was in the midst of one of the bloodiest wars. The author and public intellectual, Susan Jacoby, noted an interesting aspect of Roosevelt’s “fireside chats”—he urged Americans to buy maps of the world and then follow along with him details of the World War II battles that he “chatted” about in his radio addresses—with specific references to the geographic areas.

Roosevelt may have had in mind what a student in my class articulated in her assignment after the class exercise. She wrote: “One thing that stood out to me this week was …. I find that I get so caught up in these abstract, revolutionary concepts of how the world should be better without ever even taking into account what the world actually looks like.”

By urging Americans to look at the maps of the theatres of war, Roosevelt was making sure that his fellow citizens knew what the world looked like, even as America was playing a crucial role in reshaping it. I guess Roosevelt was a geography teacher-in-chief, while he was successfully carrying out his responsibilities as the commander-in-chief.

In the contemporary world, too, America is actively engaged in the international arena. To play a constructive role, we citizens need to be informed enough in order to be able to convey to elected leaders the changes we would like to make. A spatial understanding of the world is, therefore, essential to carry out civic responsibilities. Add a world atlas to your summer reading list.

Tuesday, May 26, 2009

Ten years more in Iraq? CA upholds gay marriage ban?

A couple of years ago, the comedian Chris Rock had a great joke that the world was all upside down because the best golfer was a white, the best rapper was a black, and the best basketball player was Chinese.
We can add to that: Iowa okays gay marriage, and California upholds the gay marriage ban. It was not even a close vote: 6-1!!!
Welcome to the bizarro world!

And, if all that was not enough, the army chief says US is ready to be in Iraq for ten years.

WTF!

Monday, May 25, 2009

On Memorial Day

James Fallows:
Consider the Map the Fallen project, here. It is an overlay on Google Earth that provides details on the lives and deaths of 5600+ U.S. and coalition men and women who have died in Iraq and Afghanistan. Sample:

FallenMap.jpg
Details for installing the overlay at the site above. (Mac users: it definitely does require the latest release of Google Earth, here.) As the project's originator says:
I have created a map for Google Earth that will connect you with each of their stories--you can see photos, learn about how they died, visit memorial websites with comments from friends and families, and explore the places they called home and where they died.
Respect to him, and to those he is honoring. (And, yes, I do realize that there could be a much more densely-populated map of civilian casualties in Iraq and Afghanistan. That takes nothing away from the power of this project or the sacrifice it commemorates.)

Thursday, May 21, 2009

Ducks and ducklings. An "awwwww" moment :-)

Obama v. Cheney on Torture

Why are affluent people healthier?

Marion Nestle, in her blog entry, writes about this question, which has often intrigued me. A student, who is quite big framed, was once talking about his younger days when they did not have money and his mother was relying on government assistance to take care of the family that included four children. So, this student remarked that eating up all that unhealthy food that was cheap was the reason for his large size. When Taco Bell has 79-cent items, and when an apple is more expensive than that, even a third-grader can figure out that people without money will choose that cheaper and unhealthy food.

Speaking of Taco Bell, I liked this observation in Sarah Hepola's piece on cheap and fast foods during this Great Rececssion:
There is something unsettling about the audaciously punctuated "Why Pay More!" Taco Bell value menu. I don't mean health concerns -- though those are aplenty -- but the confounding question of how a restaurant could possibly profit selling nachos at 79 cents. The nachos come covered in refried beans and goopy fluorescent orange cheese drizzled with red sauce, a wan imitation of Tex-Mex that made me weep for my years spent in Austin, Texas, but still … 79 cents! Even for recession prices, that feels low. The 89 cent Cheesy Double Beef Burrito, meanwhile, was so hefty I could practically bench-press it. It was crammed with the chain's signature chili-cheese artery-clogging mix.
Anyway, Nestle writes:
Adam Drewnowski and his colleagues at the University of Washington have been doing a series of papers on the cost of food per calorie. The latest is a research brief answering the question, "Can low-income Americans afford a healthy diet?" Not really, they say. Federal food assistance assumes that low-income people spend 30 percent of their income on food, but that assumption was based on figures from an era when housing, transportation, and health care costs were much less.

As Drewnowski has shown repeatedly, healthier foods cost more, and sometimes a lot more, when you look at them on a per-calorie basis.

Wednesday, May 20, 2009

The Great Recession and unfounded optimism

Japan's economic output is shrinking so fast that .... well, I have no metaphors for this.

The Japanese gross domestic product shrank 15.2 percent on an annualized basis. It marked a fourth straight quarter of contraction and the biggest decline since Japan began keeping records in 1955.

It was also a deeper fall than during the last quarter of 2008, when the economy shrank a revised 14.4 percent on an annualized basis.
Of course, Japan's problems are not the same as our problems. Japan relies quite a bit on exports, and the global contraction does not help.

But, to me, this is yet another reason not to get all too optimistic with talks of green shoots.

I would, however, place my bets on economic growth in India--it is a continent of its own, and it relies very little on foreign trade--both imports and exports. Elections have delivered greater stability to the current policies. No wonder the stock market is shooting up and up there.

Tuesday, May 19, 2009

Memo to Obama: go to India. Soon.

As an Indian who has made his home in the U.S., I say to Barack Obama: Don't neglect India. Go to India, and go there soon. Or if you can't leave town, invite Manmohan Singh to stop by. This is an investment of your time that will pay very rich--and very reliable--dividends.
Yes, I am Indian who has made his home in the US. But, those are not my words--they are from Tunku Varadarajan's column in Forbes. I have nothing to disagree with what Varadarajan has to say there.

I miss his columns at WSJ. They had an off-beat quality to them, which, for some reason, is missing in the Forbes edition. I wonder if this resulted from a systematic thinking through in terms of the audience?

What if Obama captures Osama?

The GOP is in shreds. What might be the ultimate proverbial nail in the coffin here? The capture of Osama bin Laden--dead or alive.
  • It is not unrealistic. It looks like Pakistan's government and military are really following up on the understanding that their country is at risk, and are now expanding their all-out-assault even beyond Swat Valley, into the tribal areas where bin Laden might be living. Of course, I want to see the action happen in order to believe that Zardari and his people are serious about it--there is always the possibility that they are putting on a show in order to shake loose a few more billion from the US government.
  • "Defence" has always been the GOP's mantra as their qualification, and the Democrats' liability. So, it will be quite a counter to that if the "liberal" Obama ends up capturing bin Laden, something that Bush/Cheney/GOP could not. The GOP then loses its ultimate, maybe its one and only, political asset. And when that is gone, well, the GOP is gone, for all purposes. It will be quite an effort for Republicans to reshape their party.
  • Which means that gerrymandered seats will be the only way Republicans will be able to make their voices heard in the House of Reps. Senate elections being state-wide elections, well, Republicans will be screwed. Senate seats and governorships will come down to individual personalities and charisma. Presidency? They may as well forget until 2016, at the earliest, and 2020 is more realistic.
  • I am sure Obama and his people are acutely aware of this. After all, if I can think along this logic!!! I wonder if this, too, is the reason why there is so much of a focus on Afghanistan and Pakistan now. I would not be suprised at all, if such political considerations have influenced their decision as much as genuine national security reasons have. In fact, I say there is nothing wrong in that: after all, bin Laden is the #1 most wanted criminal.

Pakistan. Taliban. Al Qaeda. Nukes. Be afraid!

As much as I am relieved that finally Pakistan is being brought to the front and center of our attention, I can't but think: "where were all these people when even semi-literate people like me were yelling at our loudest that we need to worry about Pakistan?"
I suppose America was so blindered by its ideological framework that not only did we not recognize that Pakistan is even worse than the Israel/Palestine situation, we even continued to pour money into Pakistan.

Anyway, Professor Steven David writes in Foreign Policy that:

What then can the United States do to reduce the threat from Pakistan? Washington must first do more to mitigate the tensions between India and Pakistan, thus encouraging the Pakistanis to redirect their military away from the Indian threat and toward the more pressing dangers posed by the Taliban. The United States must be more creative in ways that might help the Pakistanis ensure the security of their arsenal, including assisting them with better command-and-control procedures and safer deployment options for their nuclear forces (thus avoiding a hair-trigger posture). For the long term, the United States can work to build up the Pakistani state, improve Pakistan's education system, enhance its economy (through the elimination of tariffs on Pakistani textiles), and subtly convince the Pakistanis that the moderate Islam for which the country is known is the best path.

Although all of these steps are necessary, none will end the threat of a Pakistani nuclear weapon falling into the wrong hands. So what the United States must do is confront the awful possibility that the Taliban or al Qaeda might one day get its hands on a Pakistani nuclear weapon. To prepare for that contingency, Washington must do more to learn where the Pakistani nuclear arms are located (to destroy or seize them), do a better job at preventing the smuggling of nuclear weapons, and, most horribly, prepare for the nightmare of losing an American city to a Pakistani bomb. That means issues such as continuity of government and public health plans must be made now, for "the day after." It also means that Washington must do better at determining the source of a nuclear explosion and think seriously about how to react if one occurs. Lashing out at Pakistan, especially if the regime was not behind the attack, makes little sense. Learning from the Pakistanis just how many weapons went missing, how it happened, and whether it could happen again might not be as emotionally satisfying as a counterstrike, but makes more sense.

Even during the worst days of the Cold War, Americans and Soviets recognized that a nuclear strike would be folly. The same is not true for the groups that are poised to seize Pakistani nuclear weapons. With luck, we may all survive this crisis. But that does not change the realization that an American city faces a far greater threat of nuclear destruction from a wayward Pakistani nuclear weapon than it ever did from a deliberate Soviet attack.

Be afraid. Be very afraid.

Economy has bottomed out

The Onion reports that:

White House budget chief Peter Orszag said that with April consumer prices stable and production declining at a slower rate, the worst of the recession is over. What do you think?

Old Man

Kevin Burke,
Air Quality Tester
"Seriously? But I just learned how to save money."

Young Woman

Barbara Roberts,
Darkroom Worker
"I don't understand economics very well, so could you put the question to me again in analogy form? To help you, my favorite analogies involve old dogs, apples, and fishes on bicycles."

Asian Man

Ian Katz,
Kennel Attendant
"What great news for people whose lives exactly mirror economic data reported by the government."

Jesse Ventura on waterboarding and torture

Neither the Republicans nor the Democrats will forcefully acknowledge what Ventura says. Thanks, Mr. Ventura.



via: The Daily Dish

Sunday, May 17, 2009

Ray Charles' Night and Day

Torture, and government transparency

I really, really, hope that not only will there be a "truth" commission to clear up everything related to torture, but that it will also help clean up DC, at least for a couple of years, just like when the Watergate inquiry lead to a little bit of housecleaning before the vultures returned.
In today's NY Times, Frank Rich writes that we need to do this, and now:
the new administration doesn’t want to revisit this history any more than it wants to dwell on torture. Once the inspector general’s report on the military analysts was rescinded, the Obama Pentagon declared the matter closed. The White House seems to be taking its cues from the Reagan-Bush 41 speechwriter Peggy Noonan. “Sometimes I think just keep walking,” she said on ABC’s “This Week” as the torture memos surfaced. “Some of life has to be mysterious.” Imagine if she’d been at Nuremberg!

The administration can’t “just keep walking” because it is losing control of the story. The Beltway punditocracy keeps repeating the cliché that only the A.C.L.U. and the president’s “left-wing base” want accountability, but that’s not the case. Americans know that the Iraq war is not over. A key revelation in last month’s Senate Armed Services Committee report on detainees — that torture was used to try to coerce prisoners into “confirming” a bogus Al Qaeda-Saddam Hussein link to sell that war — is finally attracting attention. The more we learn piecemeal of this history, the more bipartisan and voluble the call for full transparency has become.

And I do mean bipartisan. Both Dick Cheney, hoping to prove that torture “worked,” and Nancy Pelosi, fending off accusations of hypocrisy on torture, have now asked for classified C.I.A. documents to be made public. When a duo this unlikely, however inadvertently, is on the same side of an issue, the wave is rising too fast for any White House to control. Court cases, including appeals by the “bad apples” made scapegoats for Abu Ghraib, will yank more secrets into the daylight and enlist more anxious past and present officials into the Cheney-Pelosi demands for disclosure.

It will soon be every man for himself. “Did President Bush know everything you knew?” Bob Schieffer asked Cheney on “Face the Nation” last Sunday. The former vice president’s uncharacteristically stumbling and qualified answer — “I certainly, yeah, have every reason to believe he knew...” — suggests that the Bush White House’s once-united front is starting to crack under pressure.

I’m not a fan of Washington’s blue-ribbon commissions, where political compromises can trump the truth. But the 9/11 investigation did illuminate how, a month after Bush received an intelligence brief titled “Bin Laden Determined to Strike in U.S.,” 3,000 Americans were slaughtered on his and Cheney’s watch. If the Obama administration really wants to move on from the dark Bush era, it will need a new commission, backed up by serious law enforcement, to shed light on where every body is buried.

Saturday, May 16, 2009

Religion matters not

a group of Muslims in eastern Uttar Pradesh told a colleague: “Sixteen major banks have failed in the United States; not a single Indian bank has folded up; all because we have had Manmohan Singh as Prime Minister.”
Profound implications in that quote in this report from The Hindu. India's prime minister is a Sikh--a small minority in India. A much larger minority, the Muslims, is happy with this Sikh as a prime minister, in a country dominated by Hindus.

Which is why I keep reminding my students and anybody who asks me that religious differences do not trigger violence in India. It does not mean that there are no prejudices--that is in plenty. But, quite a peaceful country though, given such immense differences.

Am glad that the BJP did not win. Yes, the Congress has a long history of playing communal politics. But, BJP is in a dangerous league of its own.
However, I don't think the prospect of Indira Gandhi's grandson being projected as Dr. Singh's successor is a healthy sign. Returning to an adoration of the Nehru-Gandhi dynasty is not something to be proud about. On the other hand, Rahul Gandhi seems to be one hell of a hard working guy--at least, it will not be handed to him on a golden platter as it was the case with Indira and later with Rajiv Gandhi.

Schwarzenegger. California. Budget. Crisis.

Is California's messy political economy the future of this country, too?

Friday, May 15, 2009

Torture. DADT. Gay. Obama. Wimp.

So, in an earlier post I wondered how the Daily Show would respond to Obama flip-flopping on the torture photos. Well, Jon Stewart did great. An awesome job. But, highly depressing to realize that this is politics here in the good ol' USA.

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More on torture. Transparency?

I thought it was ridiculous to suggest that the photos will stir up anti-American and anti-troop sentiments. Because, there is going on already for that, and as much as the torture photos might, it is also equally possible that a few others might be impressed with the way America handles incorrect, unethical, and illegal actions.
Greenwald articulates it much better than I can:

We're currently occupying two Muslim countries. We're killing civilians regularly (as usual) -- with airplanes and unmanned sky robots. We're imprisoning tens of thousands of Muslims with no trial, for years. Our government continues to insist that it has the power to abduct people -- virtually all Muslim -- ship them to Bagram, put them in cages, and keep them there indefinitely with no charges of any kind. We're denying our torture victims any ability to obtain justice for what was done to them by insisting that the way we tortured them is a "state secret" and that we need to "look to the future." We provide Israel with the arms and money used to do things like devastate Gaza. Independent of whether any or all of these policies are justifiable, the extent to which those actions "inflame anti-American sentiment" is impossible to overstate.

And now, the very same people who are doing all of that are claiming that they must suppress evidence of our government's abuse of detainees because to allow the evidence to be seen would "inflame anti-American sentiment." It's not hard to believe that releasing the photos would do so to some extent -- people generally consider it a bad thing to torture and brutally abuse helpless detainees -- but compared to everything else we're doing, the notion that releasing or concealing these photos would make an appreciable difference in terms of how we're perceived in the Muslim world is laughable on its face.

Thursday, May 14, 2009

One "hot" man in Washington, DC

Writes Judith Warner:
"viewing Obama as a full, even familiar-seeming human being doesn’t degrade him."

Yes.

It is the same logic that made me appreciate Bill "Slick Willie" Clinton playing the sax on the Arsenio Hall show. I mean, they are like you and me--just mortals. We threw out the monarchy because we don't believe that our rulers are divine ....

Personal Credit Crisis: Our inner Gordon Gekkos

A few months ago, I authored an op-ed in Planetizen, titled The United States of Gordon Gekkos. I wrote there:
While banks and real estate agents are being accused (correctly, of course) of being the proverbial greedy and conniving foxes, consumers are being portrayed as innocent lambs. It is, after all, the role of business to tempt us with products that might not always be healthy. This is why a fundamental theme in our economic system is caveat emptor—let the buyer beware. I cannot help wonder why consumers became so greedy to increase their real estate consumption—the greed that led to the traps in the form of teaser mortgage rates without any money down.
It is not at all the case that I am finding the consumer alone to be at fault. Nope. But, we, too are to be blamed.

Edmund Andrews, an economics reporter, writes about his own personal credit crisis in the NY Times magazine, and in it he describes how, despite years of covering all kinds of economic crises, he too joined the insanity that home-buying/borrowing was. It is a depressing tale. It could have happened to any one of us. I don't know which part of his narrative to excerpt, because I think his story can easily become distorted with an excerpt out of the context. So, here is the link; read it.

Unemployment, geography, and maps

A follow-up to this post on why geography matters, particularly when it comes to issues like unemployment.

Chris Wilson at Slate has an awesome county-by-county mapping of unemployment, and over time since 2007. You will see how the slowly blue (jobs gained) changes to red (jobs lost). It is almost like the spread of infection, from Michigan. No, I am not saying that Michigan triggered job losses. Not at all. But, if one did not know what the data were, then that reader might think something started in Michigan and spread everywhere ..... Wilson writes:
A map of employment gains or losses by county tells the story of how those job losses first struck in the most vulnerable regions and then spread rapidly to the rest of the country. As early as August 2007, for example—several months before the recession officially began—jobs were already on the decline in southwest Florida; Orange County, Calif.; much of New Jersey; and Detroit, while other areas of the country remained on the uptick.

Sichuan earthquake. Music.

I heard that piece on NPR, and later found that James Fallows had blogged about that. Here it is:


Wednesday, May 13, 2009

Life aint Lysistrata?

Wikipedia's summary of Lysistrata:
Lysistrata convinces the women of Greece to withhold sexual privileges from their husbands as a means of forcing the men to negotiate a peace, a strategy however that inflames the battle between the sexes. The play is notable for its exposé of sexual relations in a male-dominated society and for its use of both double entendre and explicit obscenities.
Apparently one Kenyan is mighty upset with the women who took the Lysistrata route and withheld sexual relations; Jimi Izrael writes:

A Kenyan man decided to sue the organizers of the sex strike there, saying the deprivation has caused him undue stress. According to the ladies and CNN reports, the strike worked, kinda, as leaders did actually meet. I was a big critic of the sex strike -- and I remain one --- but you can't argue with results, right?

This guy, though, who's suing? That's a fail.

The strike is over, but homeboy is suing for damages. Really? Like what -- chafin'? Feenin'? What? If men called a lawyer every time a woman used sex to manipulate them, the courts would be clogged up for centuries. I think that Kenyan brother needs to get to know himself a little better --- if you catch my meaning --- and call it a wrap.

Arizona State U.: Commencement and Obama

Simply hilarious:

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Torture. Photos. Obama. Tweedldum-tweedledee :-(

So, President Obama's first major flip-flop: he says no to releasing the torture photos. To the few people who ever cared to know what I thought, well, I suppose I can tell them "I told you so!"

I am just tired of the tweedledum-tweedledees that come and go in politics. There are two sayings in India, using the context of Ramayana as a way to describe life and government. One is that it does not matter if Rama rules or Ravana rules. The other is that whoever rules Lanka will behave like a Ravana. (Click here for info on Ramayana, Rama, Ravana, Lanka)
Turns out that it does not matter whether it is a Bush or Cheney or Obama, the rationale for not discussing torture and the photos is not different.
Here is an excerpt from what Obama said:

It's therefore my belief that the publication of these photos would not add any additional benefit to our understanding of what was carried out in the past by a small number of individuals. In fact, the most direct consequence of releasing them, I believe, would be to further inflame anti-American opinion and to put our troops in greater danger.

Moreover, I fear the publication of these photos may only have a chilling effect on future investigations of detainee abuse. And obviously the thing that is most important in my mind is making sure that we are abiding by the Army Manual and that we are swiftly investigating any instances in which individuals have not acted appropriately, and that they are appropriately sanctioned. That's my aim and I do not believe that the release of these photos at this time would further that goal.

Now, let me be clear: I am concerned about how the release of these photos would be -- would impact on the safety of our troops. I have made it very clear to all who are within the chain of command, however, of the United States Armed Forces that the abuse of detainees in our custody is prohibited and will not be tolerated.
"further inflame anti-American sentiments"; "put our troops in greater danger"; "chilling effect"; "impact on the safety of our troops"; "abuse ... will not be tolerated"
notice these phrases? aren't these the kinds of phrases that Bush/Cheney always used? That they couldn't/wouldn't discuss anything with us hoi polloi because of these very reasons? I completely support the notion that we ought not to put our troops in greater danger; which is why we should not even escalate our war efforts in Afghanistan and Pakistan. And, yes, when a student looks worried because her boyfriend might get deployed to these wars, I see a personal connection to unnecessary conflict.

All this means that the big time campaign that Cheney was engaged in was a huge success for him. Look at his victories: photos will not be released; he has nothing but praise for the new general for Afghanistan; Pelosi and the Democrats are now rapidly trying to cover their behinds with spins on what they (didn't) know and when they (didn't) know ....
So, it is not a surprise at all that the neoconservative authors of the disasters of the last eight years are absolutely in support of Obama's decision.

I have a simple yardstick for the President: run your decisions by the likes of Kristol. If they like it, make sure to do the opposite! That simple, Mr. President.

Let us see what Jon Stewart has to say about this in the next couple of days. The following is what he had about Dick Cheney's all out media assault:

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Elections in India, and the summer of 2009

Elections a world away will resonate here

Posted to Web: Tuesday, May 12, 2009 06:11PM
Appeared in print: Wednesday, May 13, 2009, page A9

What is the difference between elections in India and elections here in America? In India, elections are conducted over one month, and the results are announced in a day. In America, elections are held on a single day but the result may not be known for months! Just ask Al Franken.

India’s elections were geographically staggered in five phases from April 16 to May 13, and the final results will be known on May 16. Out of the eligible 714 million voters, there is a good chance that about 60 percent — more than 400 million Indians — will have cast their votes by the final election day.

Most projections do not forecast a single party dominating, which will further the practice of coalition government. The current government of Prime Minister Manmohan Singh, of the Congress Party, is in power thanks to the coalition referred to as the United Progressive Alliance (UPA). If it loses at the polls, the margin will be slim enough that the National Democratic Alliance (NDA) might not be able to radically alter domestic or foreign policies.

These results would be very different from my experience as a kid, when the Congress Party almost always had a significant parliamentary majority. The opposition was so fragmented that the joke was that even a donkey could get elected on the Congress Party ticket. The era of coalition governments is a healthy sign, indeed. While there is no immediate causal relationship, the correlation is interesting: The more India’s economy opened up, the faster its economic growth rates have been, and single-party domination seems to have ended.

Even though I grew up in India, I have never voted in elections there; I had already moved to America by the time I was eligible to vote. As a kid I always looked forward to voting, given my interest in political issues from a very young age, and given how colorful and noisy election campaigning is in India.

I suppose my first vote in America made up for all that — it was the dramatic and history-making elections of 2000! In fact, politics in the United States have been pretty darned exciting since then, including Indian-style corruption with even a U.S. Senate seat for sale, and opportunistic party-switching for no reason other than to get re-elected. And I thought I would never get to see this here in America!

While no serious policy changes might result from India’s elections alone, taken together with the results of elections to follow in two neighboring countries, we might experience significant impacts on global geopolitical discussions and decision-making.

On June 12, Iran’s current president, Mahmoud Ahmedinejad, will be tested at the polls. Odds seem to favor his re-election, all the more so given that he seems to have gained the support of Supreme Leader Ayatollah Ali Khamenei. A second term for Ahmedinejad will strengthen the country’s hard-line stance, particularly against the U.S. and Israel, and perhaps push the country closer to its first nuclear bomb.

Afghanistan will hold its presidential elections in August. The current president, Hamid Karzai, has been heading the country since the Taliban-led government was driven out of power by the U.S. and NATO military forces. Karzai has been increasingly criticized for not being effective in the fight against the Taliban, who have been rapidly gaining ground both in Afghanistan and in neighboring Pakistan.

Meanwhile, Pakistan is dealing with a possibility that democracy might get suspended there by a military coup, thanks to the democratically elected government getting more and more unstable. Unfortunately, neither a weak government nor a military coup is new to Pakistan.

Thus, whether it is the UPA or the NDA that gets elected to power in India, there will not be as many repercussions as from the political developments over the next couple of months in Afghanistan, Iran and, of course, Pakistan. How events unfold in South and West Asia this summer will have immense implications even for those of us halfway around the world.

I wonder if Al Franken will have been sworn in as senator by the time summer ends!

Tuesday, May 12, 2009

Quote of the day

There is a complexity to human affairs before which science and analysis simply stands mute.
Pretty good, I think. It is the concluding line in David Brooks' column.

But, otherwise, I am not sure about such a column where it is not his original thoughts and critique, but it is a review of another work that he quotes. Well, "quotes" is an understatement because the entire column is based on that work in the Atlantic. It is like a book review: an article review!

So, the Middle East is going nuclear?

First, in order to counter Israel's nuclear bomb, the anti-Israel Arab world was keen on developing an "Islamic bomb". As India too got quite "explosive", Bhutto (Benazir's father) famously commented:"There's a Hindu bomb, a Jewish bomb and a Christian bomb," Bhutto once wrote. "There must be an Islamic bomb."

As Iraq got into that, Israel launched a brilliant attack that destroyed Iraq's key facilities. Much later, Pakistan detonated its nuclear devices to tell the world that it has arrived. A few months ago, something happened in Syria that nobody still talks about. But, speculation is that Israel wiped out some kind of a nuclear ambition that Syria had.

Yesterday (I think it was) as I was driving, I head on NPR that France was selling Saudi Arabia civilian nuclear power generating technology. Because, the Saudis want to prepare themselves for a world without petroleum--when they are sitting on the world's largest reserves that they can tap into for practically no cost at all.
I was not happy with all this talk about selling nuclear tech to the crazy guys in the Middle East. Because these are not democratic countries. We have no idea who the next ruler will be, and what kind of crazy things he will want to pursue.
And then I read this:
We are witnessing the beginning of a Middle East nuclear arms race. Iran's rivals do not want Tehran to gain the military, political, and diplomatic advantage that nuclear weapons convey. They are beginning the decades-long process of developing technologies to match Iran's capabilities. All of this is legal, by the way, under the Nuclear Non-Proliferation Treaty. In fact, nuclear weapon states are obliged to sell non-weapon states nuclear technology for peaceful purposes. It is one of the two grand bargains in the treaty. And it could spell our doom.

Not all Middle East powers may see civilian nuclear programs as a hedge against Iran. But recent history is instructive. The burgeoning interest in nuclear energy perfectly coincided with a set of events in the summer of 2006. At that time Western efforts to rein in Iran's enrichment program began to fail. The United States was becoming further mired in the wars in Iraq and Afghanistan and appeared unable to stop an Iran now freed of its main regional rivals. Iran's leaders expanded their military influence through aid to Hezbollah in the Israeli-Lebanese war. Referring to the changing atmosphere in 2006, Jordan's King Abdullah II observed, "The rules have changed on the nuclear subject throughout the whole region." My translation: "After this summer, everybody's going for nuclear programs." Given the context, the connection to Iran's growing strength and spinning centrifuges is clear.

Now, instead of persuading Jordan and others to refrain from setting off a proliferation cascade in the Middle East, the United States is joining the Chinese, French, and Russian salesmen eagerly peddling the tools to do it.

At its core, this is a deeply flawed method for preventing proliferation. It continues the Bush approach of dealing with problems state by state, dividing them into good guys and bad guys, rewarding friends with nuclear treats and trying to deny them to enemies.

It does not work.
Great! after we are done with the wars in Afghanistan and Iraq, next decade will be all about uncontrolled chain reactions in the Middle East. Thanks. Now I can sleep well! Dr. Strangelove, any pills for me? :-)

Monday, May 11, 2009

Port is the new pinot noir? Well, .....

I am a teetotaler, by choice. Yet, I suppose it is the information junkie in me that wants to read up on wines, so that I, too, can bullshit when the oenophiles engage in esoteric talk. Thus, I could not pass up the chance to read that "Last month, Portugal’s port wine producers unanimously declared 2007 to be a vintage port." Yes, I can now sit back and BS about what a wonderful year that 2007 was! Ok, I am being sarcastic.

So, what made 2007 such a special year for port? "it had been an unseasonably cool July and August, followed by intense heat in early September."

I think it was a year or so ago, a colleague and her husband returned from Portugal, and she raved about the port there. could she possibly have had port from the previous vintage year, 2003? Maybe I should pass along this article to her. At the same time, I think maybe she is exactly the kind of new customer that the port industry is targeting?

In a February article in Decanter magazine on declining port sales, Francisco de Sousa Ferreira, director of Portuguese wine giant Sogrape, admitted: “We need to reinvent ourselves.”

In theory, this likely means an attempt to convince Americans that port is not just for after-dinner anymore. ... I’ve certainly seen dozens of newspaper and magazine articles explaining “You really don’t need to be an elderly Brit to enjoy port” and that port should be hipper.

Yes, that image of a stiff Brit, or a stiff Brit-wannabe like Frasier, pouring port and talking highfalutin stuff is something that I have always associated with port. And, the reality is that my colleague is not anywhere like that image. If there are, indeed a lot more like my colleague, well, port has quite a few customers that neither the customer nor the industry is aware of!

Geithner explains the bank stress test results

So, it was really a surprise that by and large banks passed the test?
Robert Reich was concerned about the tests even before the results came out:
[Banks] needing extra capital will get it from the Treasury. But where will the money come from, now that the TARP fund is almost exhausted and Congress is dead set against providing more bank bailout money? The Treasury will simply swap debt for equity – turning what the banks owe the government into shares of stock in the banks. Presto. Ailing banks will get more capital, and Tim Geithner won’t have to go back to Congress to ask for it.

But by this sleight-of-hand, the public takes on more risk. Much of the money we originally gave Wall Street took the form of senior debt. We were preferred creditors, meaning that in the event of bankruptcy (or some form of it) we’d get repaid first. But as shareholders, we’d get nothing. As we’ve seen time and again during this economic crisis, shareholders lose big.
But, on with the test results, you say? Sure. Here is the treasury sec. explaining the test results:



thanks to GM for the tip

Sunday, May 10, 2009

America becomes a colony of China and Dubai?

I have blogged enough about our debt for anyone to think that I am maybe even paranoid about the effects. And, just when I forget about it something happens for me to start worrying again. This time, it is a short opinion piece by the US Berkeley economist Brad DeLong, who writes that we might be in for trouble:

Call it reverse finance colonialism? Call it something. Foreign governments will be seeking high-return assets for their enormous portfolios without selling dollar-denominated wealth. Consequently, they will have to focus on U.S. corporate securities. With such large-scale investment comes ownership and with ownership comes control. No government will want to play the role of passive investor, with the attendant risk that its partners will tunnel the wealth out from under its grasp, leaving an empty corporate shell.

So what is likely to come to pass is not the socialism feared by the Right—at least not ownership of the means of production by the U.S. government. Instead, it will be ownership of U.S. companies by foreign governments—and on a scale we’ve never before seen.

Can anything stop this progression? Yes. A collapse of world economic growth—which would create a very dangerous and angry world. Or a sudden return to thrift on the part of American consumers—so that we can finance the industrialization of the rest of the world rather than having them finance our consumption. But neither is likely.

That will leave Americans confronting a new and unprecedented phase of globalization. Government agencies in Beijing, Dubai, and Brazilia will have a large financial interest in everything from the health-care policies of American factories to the compensation packages of corporate executives and the apportionment of seats on corporate boards. And their interest will matter: They will, after all, be the people who have the money—just as Americans were the people who had the money in the years after World War II

Thanks, Professor DeLong!

Saturday, May 09, 2009

A thumbs-up for Oregon

I discerned a characteristic of Portland that would enchant me over the course of a week, as I explored restaurants and bars, artisanal cafes and mushrooming food carts, funky neighborhoods and weird little museums. Amid economic catastrophe — Oregon has the country’s second-highest unemployment rate — there was a general indifference to wealth. In its place was a dedication to the things that really matter: hearty food and drink, cultural pursuits both high and low, days in the outdoors and evenings out with friends.
Amen to that! That was an excerpt from this travel piece in the NY Times.

Oregon is wonderful, even to me who does'nt drink, nor eat fish :-)

Friday, May 08, 2009

Regulation helped India weather global financial crisis

The former governor of India's central bank--the Reserve Bank of India--comments in an interview:
Do you think that there is a case for revisiting globalisation today?

There are two aspects that have emerged recently. One is the future of globalisation and the other is the future of marketisation. These are interdependent but I would treat both of them as distinct aspects. Globalisation insofar as it related to trade in goods and services has had beneficial effects. But the distinction between globalisation in general and globalisation of the financial sector has come to the fore now. The key question now is how to manage the globalisation of finance so as to enhance the benefits while minimising its risks. Here we have a basic conflict between national regulation and global regulation. The problem with finance is it is footloose. There cannot be any rules of origin, it therefore becomes very difficult to have what you call circuit breakers.

The market orientation has helped significantly but two types of doubts have come. First, it has increased inequalities. Secondly, financialisation of markets — when markets became an end in themselves. That should not have been allowed. But I doubt whether there will be a fundamental review of the markets. Even in India, the marketisation of finance is the problem.

I agree with him that markets became an end in themselves. There are limits to what the markets can do for us.

Israel v. USA: Not a surprise to me.

In an earlier post, I commented that the election of Netanyahu as prime minister was not an outcome that I wanted in Israel's elections. He is simply the wrong guy at the wrong time. In fact, he joins a list of wrong guys at the wrong time, including Zardari in Pakistan, Karzai in Afghanistan, and Ahmedinajad in Iran. And, these are all the wrong guys who are going to shape the life for all the nearly 7 billion of us on the planet. Our life depends on these screwballs!

So, it is far from an expected news to me to read in Newsweek that
"Relations between Israel and the U.S. are unbreakable," Emanuel said. But he added: "This is the moment of truth for Israel and the Palestinians."

It just as likely a moment of truth for Israel and the United States. For the last eight years Washington acted mainly as an unswerving supporter of Israel's actions—some critics would say cheerleader—despite a few serious differences, such as the timing of the 2006 Palestinian elections. But the potential now exists for the most serious rupture of relations at least since 1989, when Secretary of State James Baker stunned AIPAC by calling on Israel to abandon its "unrealistic vision of a Greater Israel" that included Gaza and the West Bank ....

Both Obama and Netanyahu have big political reasons to make their first summit come out looking like a lovefest. But the first flashpoint is not far off: the end of the year on Iran. And after that things could get very heated over the Palestinian issue.

Thursday, May 07, 2009

Baseball. Steroids. Manny. Dodgers.

Highly stimulated :-)

Saving "domestic" auto companies ...

I don't get this: we are spending billions of taxpayer dollars to save the "domestic" Chrysler, which for a few years was owned by Germany's Daimler, so that eventually it will be run by Italy's Fiat?
One would think that the Onion made this up! Oh well ....
ps: I am a proud co-owner of a Jeep Cherokee, the model that was orphaned by Chrysler in 1999.

Wednesday, May 06, 2009

‘Kicker’ falsely assumes economy is predictable

The Great Recession is the label that some commentators use to refer to the current global economic slump, and it seems appropriate. Even as we struggle against the downturn, I am relieved that the legislative process has been set in motion to address the “kicker law.”

The kicker law mandates refunds to taxpayers if the tax receipts exceed forecasted biennial revenue by more than 2 percent. One lesson of the Great Recession, which has immense implications for the kicker, is a simple one: Predicting the economic future is nearly impossible, and even more difficult is the task of estimating revenues within a 2 percent margin.

Very few experts foresaw the nasty recession when we were still riding high two years ago. Even the chairman of the Federal Reserve, Ben Bernanke, did not see this coming. In fact, during the early years of the bull market, Bernanke publicly worried that the problem in the world was from a savings glut. He was also among many leading economists who were confident that we had tamed the boom-bust cycles, and that we were in for smooth cruising. If only that were the case!

A clear minority of experts predicted a recession, and even fewer, such as Nouriel Roubini, worried that it would be a nasty global economic pandemic.

Plainly, economic forecasting is not as easy, nor scientific, as we might imagine it to be. Yet, the kicker is predicated upon such economic forecasts. Take, for instance, the state economist’s revenue forecast from March 2008. The report notes that, “The forecast projects a slowing Oregon economy in 2008 with mild growth returning in 2009.” It has been anything but.

However, it does not mean that the state economist was way off. The same report states, correctly, that “Uncertainty surrounds the financial system. … Broadly, we place ‘uncertainty’ under ‘risks,’ and note that the Oregon economy is at a precarious juncture of the business cycle.” A year later, that “uncertainty” has revealed itself in a number of unpleasant ways, including the 12.1 percent unemployment, which could worsen.

The bottom line is that the kicker law is built on “forecasting” that cannot ever be precise and is, therefore, set up to fail. No wonder, then, that rebates have been frequent, rather than rare exceptions.

Looking at it another way, this kicker law, which was approved in 1980, was an Oregon innovation similar to other notables such as the bottle bill or the gas tax. However, unlike the bottle bill, the kicker law was not adopted by any other state in the union. Could it be for a simple reason that the kicker was not considered an idea brilliant enough to be copied?

I fully recognize and support the reason behind the kicker law — as a check against uncontrolled expansion of government, which could otherwise suck away money from private economic activities. However, there is no guarantee that such controls on revenue alone will constrain government expenditures.

All we need for an example is immediately to the south of us. Californians passed the famous Proposition 13 back in 1978, before our own kicker law, to limit property taxes and future tax increases. Three decades later, the libertarian Reason magazine recently noted that even Gov. Arnold Schwarzenegger, who swept into office promising to limit government, has ended up expanding it at rates slightly more than what his predecessor did: “Under Schwarzenegger, spending has increased 6.8 percent annually, compared to a population/inflation rate of just under 5 percent.”

It is therefore up to us voters to be on the alert for necessary and unnecessary government expenditures, and to use existing processes to express our preferences. A constitutional revenue choke-off, which is what the kicker amounts to, cannot by itself limit government, and can only worsen budget crises whenever we enter into a recession.

Furthermore, let us not forget that there will be a recession after we recover from this one — that is the nature of the economic system. This means we ought to prepare ourselves for the economic ups and downs that are not easy to forecast, which is why I fully support the proposals to strengthen the rainy day fund by diverting a portion of the monies that would otherwise become kicker refunds.

The old saying is “once bitten, twice shy” — and Oregonians have been bitten more than once by economic downturns. Let us work on avoiding nasty bites in the future.

Posted to Web: Wednesday, May 6, 2009 05:29PM
Appeared in print: Thursday, May 7, 2009, page A9

Geography matters. In unemployment, and otherwise.

A colleague emailed me a link to this piece by Harvard's Ed Glaesar .... and the following resulted ...

To begin with, issues such as rocketing home price was not country-wide at all. I don't think speculators were "flipping" homes in North Dakota as they were even in Bakersfield. Which also means that foreclosures are not a country-wide problem at all. To a large extent, the physical aspect of the housing crisis is highly geographic in nature. That is the physical, real, stock.
Similarly, the real, tangible, manufacturing was also geographically concentrated. If I remember correctly, the relative importance of manufacturing in Oregon--in terms of percentage of jobs--was higher in our state than in the Northeast.

Money on the other hand was flowing in from everywhere, including the unfortunate and greedy investors from Iceland.

Economists almost always aggregate all these issues, and space does not matter to them. Thus, if at all, Glaesar is a tad late to the game. Richard Florida provided an interesting analysis in the March issue of the Atlantic, with a provocative title: How the crash will reshape America. in that piece, Florida noted that:
Financial positions account for only about 8 percent of the New York area’s jobs, not too far off the national average of 5.5 percent. By contrast, they make up 28 percent of all jobs in Bloomington-Normal, Illinois; 18 percent in Des Moines; 13 percent in Hartford; 10 percent in both Sioux Falls, South Dakota, and Charlotte, North Carolina.

Anyway, I agree with Glaesar's thoughts there. California is in a mess, and will get worse before it can remotely get better. This crisis, I think, is worse than the impacts of the aerospace/defense contraction of the 1990s. Because, that one helped the skilled folks apply their talents to other fields, including IT. Now, there is nothing to be gained from empty and sprawling McMansions.
The politics and the government there is not helping either. If it were not for immigrants, California would have tanked a long time ago--almost half the new tech firms were founded or co-founded by immigrants!
CA, AZ, NV are in the same housing crisis .... Again, from Florida's essay:
To an uncommon degree, the economic boom in these cities was propelled by housing appreciation: as prices rose, more people moved in, seeking inexpensive lifestyles and the opportunity to get in on the real-estate market where it was rising, but still affordable. Local homeowners pumped more and more capital out of their houses as well, taking out home-equity loans and injecting money into the local economy in the form of home improvements and demand for retail goods and low-level services. Cities grew, tax coffers filled, spending continued, more people arrived. Yet the boom itself neither followed nor resulted in the development of sustainable, scalable, highly productive industries or services. It was fueled and funded by housing, and housing was its primary product. Whole cities and metro regions became giant Ponzi schemes.

I simply resonate with his description that the entire economy essentially became one massive ponzi scheme. Sickeningly true. This is a HUGE difference between the post-IT boom and now--then, we were at least left with miles and miles of fiber optics, for instance, which then helped as the economy recovered. I don;t see anything productive out of the mansions that are now sitting empty, and turning into slums.

Oregon is in deep shit as well--perhaps not as bad as California is. Earlier today I was speculating at a semi-serious conversation that our unemployment might top out at 14 or 14.5 percent before things begin to improve. This is going to be brutal. I don't see an emerging economic activity that can suddenly provide an upward momentum .... Kulongoski seems to be betting on electric cars. I am not sure if that is a winning bet. It is still a car with a lipstick, to paraphrase the election-season nastiness about lipstick on a pig -)

Unfortunately, to a large extent, Americans are not as geographically mobile as we think we are. I.e., not many unemployed Oregonians are going to move to New Hampshire where the probability of employment is higher. One of the main reasons as it turns out--housing. Owning a home drastically makes us immobile! It is easier for a renter to pack up and move. So, while economists assume that the probability of jobs might be a huge incentive for migration, apparently we have firmly established disincentives that discourage the move. To quote from that same essay by Florida,
“If you no longer can sell your property, how can you move elsewhere?” said Robin Boyle, an urban-planning professor at Wayne State University, in a December Associated Press article. But then he answered his own question: “Some people just switch out the lights and leave—property values have gone so low, walking away is no longer such a difficult option.”

The next forecast by the state economist will be on May 15th. We will all be yelling "mayday, mayday, mayday" then :-(

If only sex hadn't distracted him!

I was sure that he would be the first Jewish president of the US. In fact, if everything had been going well, I think he would have made a fine deputy to Obama--a much better choice than Joe "foot in the mouth" Biden. Unfortunately, he turned out to be a mortal, after all.

No, I am not referring to John "I had an affair while my wife was battling cancer" Edwards.

It is Eliot Spitzer I am referring to. He, too, will be rehabilitated in the public sphere, but in a much lesser capacity. His tough-guy approach, with white collar criminals, and his sharp thinking comes across clearly in his latest column in Slate, where he looks at the role of the NY Fed. Spitzer writes:

The composition of the New York Fed's board, which supervises the organization and current Chairman Friedman, is equally troubling. The board consists of nine individuals, three chosen by the N.Y. Fed member banks as their own representatives, three chosen by the member banks to represent the public, and three chosen by the national Fed Board of Governors to represent the public. In theory this sounds great: Six board members are "public" representatives.

So whom have the banks chosen to be the public representatives on the board during the past decade, as the crisis developed and unfolded? Dick Fuld, the former chairman of Lehman; Jeff Immelt, the chairman of GE; Gene McGrath, the chairman of Con Edison; Ronay Menschel, the chairwoman of Phipps Houses and also, not insignificantly, the wife of Richard Menschel, a former senior partner at Goldman. Whom did the Board of Governors choose as its public representatives? Steve Friedman, the former chairman of Goldman; Pete Peterson; Jerry Speyer, CEO of real estate giant Tishman Speyer; and Jerry Levin, the former chairman of Time Warner. These were the people who were supposedly representing our interests!

It is almost like it was Ralph Nader who authored this piece. The downfall triggered by yielding to the flesh--Spitzer was not the first, nor will be the last!
Spitzer then adds:

So is it any wonder that the N.Y. Fed has been complicit in the single greatest bailout of poorly managed banks in history? Any wonder that it has given—with virtually no strings attached—practically the entire contents of the Treasury to the very banks whose inability to manage risk has brought our economy to its knees? Any wonder that not a single CEO or senior executive of a major bank has been removed as a condition of hundreds of billions of direct cash and guarantees? Any wonder that, despite its fundamental responsibility to preserve the integrity of the banking system, it sat quietly on the sidelines as the leverage beneath the banks exploded and the capital underlying their investments shrank?

I do not mean to suggest that any of these board members intentionally discharged their duties with the specific goal of benefitting themselves. Rather, what we have seen is disastrous groupthink, a way of looking at the world from the perspective of Wall Street and Wall Street alone.

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