Month: May 2010
Middle East peace proposals
This one is new to me:
An even more radical idea has been put forward by Swedish diplomat Mathias Mossberg and UC-Irvine professor Mark LeVine. They do not believe giving settlers Palestinian passports would solve anything. The two propose creating overlapping states between the Jordan River and Mediterranean Sea, delinking the concept of state sovereignty from a specific territory. There would be an Israel and a Palestine, but rather than divide the land, the two states would be superimposed on top of one another. The plan would permit individuals to live where they wish and choose their political allegiance. This, they argue, would resolve the seemingly intractable questions of how to divide the holy city of Jerusalem and whether to allow Palestinian refugees “the right of return” to their old communities.
This doesn't seem practicable to me (no good mechanism for dispute resolution), but maybe in some other geopolitical setting it could be made to work,
Assorted links
4. Ross Douthat on where we have ended up.
5. Russ Roberts podcast on the financial crisis.
6. How does the Euro mess affect China? A good but scary article.
Oil Spills, Tort Law and Libertarianism
Here is Paul Krugman's Nth reason why libertarianism doesn't work:
Thinking about BP and the Gulf: in this old interview,
Milton Friedman says that there’s no need for product safety
regulation, because corporations know that if they do harm they’ll be
sued.Interviewer: So tort law takes care of a lot of this ..
Friedman: Absolutely, absolutely.
Meanwhile, in the real world:
In the wake of last month’s catastrophic Gulf Coast oil
spill, Sen. Lisa Murkowski blocked a bill that would have raised the
maximum liability for oil companies after a spill from a paltry $75
million to $10 billion. The Republican lawmaker said the bill,
introduced by Sen. Robert Menendez (D-NJ), would have unfairly hurt
smaller oil companies by raising the costs of oil production. The
legislation is “not where we need to be right now” she said.And don’t say that we just need better politicians. If
libertarianism requires incorruptible politicians to work, it’s not
serious.
In other words, libertarianism can't work because government sucks. I am tempted to comment further on this creative line of reasoning but that is unnecessary since Paul has misunderstood the facts of the matter.
The Oil Pollution Act of 1990 (OPA), which is the law that caps liability for economic damages at $75 million, does not override state law or common law remedies in tort (click on the link and search for common law or see here). Thus, Milton Friedman's preferred remedy for corporate negligence, tort law, continues to operate and there is no doubt that BPs potential liability under common law alone would be in the billions of dollars.
Thus, Paul now has only (N-1) reasons why libertarianism doesn't work.
Moreover, Paul has actually been too unkind to government, a defect it falls upon me (!) to correct. The point of the OPA was not to limit tort law but to supplement it.
Tort law, as traditionally understood, could only be used to recover damages to people and property rather than force firms to pay cleanup costs per se. Thus, in the OPA as I read it–and take the details with a grain of salt since I'm not a lawyer–there is no limit on cleanup costs. Moreover, the OPA makes the offender strictly liable for cleanup costs which means that if these costs are proven the offender must pay them regardless (there are a few defenses, such as an act of war, but they are unlikely to apply). The offender is also strictly liable for up to $75 million in economic damages above and beyond cleanup costs. Thus the $75 million is simply a cap on the strictly liable damages, the damages that if proven BP has to pay regardless. But there is no limit, even under the OPA, on economic damages in the event that BP failed to follow regulations or is otherwise shown to be negligent (same as under common law).
Sentences to ponder
Turkey can afford to keep tax rates unchanged “for the foreseeable future” while other European governments struggle to repair the damage done by the financial crisis, Ali Babacan, economy minister, said on Wednesday.
His comments reflect Turkey’s pride in weathering last year’s turmoil without bailing out any banks or seeking help from the International Monetary Fund. In contrast with much of the European Union it aspires to join, Turkey won recent upgrades to ratings of its sovereign debt after setting medium term fiscal targets it is likely to beat in 2010.
They're also not planning on raising the VAT and the debt-gdp ratio is about 45 percent, an enviable level for many EU nations. For a while now I've thought that Turkey should refuse membership in the EU, on the off chance that it ever were offered to them. Here is the full article.
Buried scary ledes
The [ECB] bank reversed itself on buying bonds amid signs that the debt crisis was spreading to the banking system.
“The situation was already starting to get worse on Thursday afternoon and throughout Friday of the week before last,” Mr. Trichet said. “A number of markets were no longer functioning correctly. It looked somewhat like the situation in mid-September 2008 after the Lehman Brothers’ bankruptcy.”
I suppose…I am glad they have not screamed that from the rooftops. The full story is here.
Update: The scary lede has been removed altogether from any NYT story.
What makes an economist?
When you read about a shortage of women's restrooms, your first thought is whether there is some way of charging for usage.
As it stands, Congress is preparing a bill to regulate the ratio of men's to women's rooms in federal facilities. I would think the theatre and symphony orchestra is where reform is needed, not at the Treasury Department. Men might benefit too ("husband leaving" and "wife leaving" are often complements) and I wonder why Tiebout competition has not enforced better outcomes.
Assorted links
1. Will computers ever fully solve chess?, from Ken Regan.
2. Do inequality and slavery matter for later Brazilian outcomes?
3. Increasingly, I think meals like this are B.S. Two years ago I ate at Noma, now labeled "the best restaurant in the world" and I barely enjoyed it.
4. Is Bill Simmons my favorite writer these days? How many journalists or for that matter social scientists are as consistently smart and insightful? Why can't they be?
5. Should we judge Supreme Court Justices (and nominees) by their taste in art?
*Liberated Cooking*
I've been browsing this 1987 book, edited by Marty Zupan and Lou Villadsen, of recipes from libertarians and classical liberals. Nobel Laureate James M. Buchanan offers up his take on Middle Tennessee Fried Corn, claiming "Properly done, this is the best dish in the world!"
Select several ears of fresh field corn (not sweet corn), preferably Hickory King white corn. Husk ears, then cut tips of kernels into bowl. Then scrape remaining milk of kernels into bowl.
Add water and salt to mixture. Add 2 tbsp. lard (or other fat) to mixture.
Put in skillet and cook over moderate heat (simmer) for one hour. Add water as needed. Stir to prevent sticking.
You'll also find recipes from Robert Heinlein, Murray Rothbard (he claims his favorite dessert of Cherry Clafouti violates the otherwise praxeological law of diminishing marginal utility), two from David Friedman (medieval and Icelandic), Buchanan's pizza recipe, Ron Paul, David Henderson, Henry Hazlitt, and last but not least Milton Friedman's account of the stuffed cabbage which Rose cooked for him, inspired by her mother Sarah Director. Buchanan's is the only one which sounded tasty to me, possibly the Friedman recipe also.
What I’ve been reading
1. Ukraine & Russia: A Fraternal Rivalry, by Anatol Lieven. I didn't think I needed to read a dated book on Russian-Ukrainian relations, but in fact I did. This has excellent detail and conceptual analysis on every page. Recommended.
2. Neurodiversity: Discovering the Extraordinary Gifts of Autism, ADHD, Dyslexia, and Other Brain Differences, by Thomas Armstrong. I don't agree with all the details in this book, but so far it is the major popular statement of the position outlined by its title.
3. William Vollmann, Kissing the Mask: Beauty, Understatement and Femininity in Japanese Noh Theater, with Some Thoughts on Muses (Especially Helga Testorf), Transgender Women, Kabuki Goddesses, Porn Queens, Poets, Hou. What can one say about Vollmann at this point? The title is descriptive, for sure, and the author loves his topic. He's massively flawed to read but still more alive than most writers. Here are earlier MR posts on Vollmann, who issues large and deeply informed tomes at the rate I produce blog posts.
4. Kai Bird, Crossing Mandelbaum Gate: Coming of Age Between the Arabs and Israelis, 1956-1978. This is a fascinating portrait of the mid-century Arab world, a story of a itinerant childhood, plus it's an account of festering Mideast conflicts, a political Bildungsroman, and, every now and then, a story of what it's like to be an Israel skeptic and also be married to a woman whose parents are Holocaust survivors. Intelligent on every page.
5. Frank Trentmann, Free Trade Nation. The rise and decline of free trade ideology in Britain, told in scholarly yet exciting fashion. I am just starting this one.
The new food pessimism
This LRB article by Jeremy Harding articulates an increasing fear that food markets will not operate smoothly over the next decade or two. He gives some major reasons (only partially reproduced here) to be pessimistic:
The first is the nature and extent of population growth: we are six billion now and by 2030 we’ll be eight billion…
The second is ‘the nutrition transition’: generations that once lived on grains, pulses and legumes have been replaced by more prosperous people with a taste for meat and dairy. Crops like maize which once fed many of us directly now feed fewer of us indirectly, via a costly diversion from which they emerge in the value-added form of meat. Global production of food – all food – will have to increase by 50 per cent over the next 20 years to cater for two billion extra people and cope with the rising demand for meat.
The third factor is energy: the industrial production of food is sure to become more expensive as fuel costs rise. It takes 160 litres of oil to produce a tonne of maize in the US; natural gas accounts for at least three-quarters of the cost of making nitrogen fertiliser; freight, too, depends on fuel.
Land is the fourth. The amount of the world’s land given over to agriculture continues to grow (in the UK, roughly 70 per cent of land is agricultural), but in per capita terms it’s shrinking. As with oil, it’s possible to envisage ‘peak food’ (the point of maximum production, followed by decline), ‘peak phosphorus’, i.e. the high point in the use of phosphate fertiliser (one estimate puts it at 2035), and, as the FAO suggests in its diplomatic way, ‘peak land’: the point at which the total area of the world’s most productive land begins to diminish (soil exhaustion, climate change) and marginal land comes up for reassessment.
[Fifth] Alternative fuels are reducing the amount of land available for growing food.
The Julian Simon-savvy crowd that reads MR might not be so impressed, but I wouldn't write off these worries so quickly. On the list, #1 and #2 do not impress me per se, but they do require that market mechanisms of adjustment be allowed to operate. Note that agriculture and land markets are highly regulated around the world and that you don't have to read this as a story of market failure. As for #3, most energy is mispriced today. Keeping it cheap means growing pressure on that externality, while taxing it means a solid whack to a lot of food markets. #5 stems from bad government policies. Another problem, mentioned later by Harding, is that very often water for agriculture is subsidized and unsustainably so. Keeping water cheap means growing pressure on that externality, while removing the subsidies (which I favor) means a solid whack to a lot of food markets, at least in the short run. The world as a whole is consuming its capital of aquifers and the like and engaging in short-term thinking by refusing to let the price of water rise as it ought to. Internalizing all the relevant externalities, and increasing sustainable long-run production, would in fact mean big "tax" hikes on growing food today.
There is also a critical scale at which fertilizer run-off and erosion externalities start to matter at a level beyond which we are accustomed to seeing.
I believe these factors mean a stronger case for agricultural free trade, rather than "localism," yet at the same time removing the subsidies for sprawl. Yet so far the people worried most about these issues are often the ones with the least economically informed answers. It would be a mistake to, say, mock Paul Ehrlich's earlier doom-saying predictions and ignore these problems altogether.
Slavoj Žižek on Sarah Palin
I don't usually blog this topic, but I was struck by this passage, from Žižek's new Living in the End Times. Maybe it's what you would get if Andrew Sullivan were a Lacanian and a Hegelian:
Earlier generations of women politicians (Golda Meir, Indira Gandhi, Margaret Thatcher, up to a point even Hillary Clinton) were what is usually referred to as "phallic" women: they acted as "iron ladies" who imitated and tried to outdo male authority, to be "more men than men themselves." …Jacques-Alain Miller pointed out how Sarah Palin, on the contrary, proudly displays her femininity and motherhood. She has a "castrating" effect on her male opponents not by way of being more manly than them, but by using the ultimate feminine weapon, the sarcastic put-down of male authority — she knows that male "phallic" authority is a posture, a semblance to be exploited and mocked. Recall how she mocked Obama as a "community organizer," exploiting the fact that there was something sterile in Obama's physical appearance, with his diluted black skin, slender features, and big ears. Here we have "post-feminist" femininity without a complex, uniting the features of mother, prim teacher (glasses, hair in a bun), public person, and, implicitly, sex object, proudly displaying the "first dude" as a phallic toy. The message is that she "has it all" — and that, to add insult to injury, it was a Republican woman who had realized this Left-liberal dream…No wonder that the Palin effect is one of false liberation: drill, baby, drill!
Then comes the zinger:
What this means — in Hegelese — the class struggle encounters itself in its oppositional determination (gegensätzliche Bestimmung), in its distorted/displaced form, as one among many social struggles. And, in exactly the same way, "anti-elitist" populism in architecture is the mode of appearance of its opposite, of class differences.
I thought this contrast was better than any review of the book I could write. The author, by the way, makes a contrarian argument that the Khmer Rouge didn't go "far enough" (too weak a constructive plan), is joking some of the time, believes that capitalism is doomed, and apparently is still a communist though he refuses to tell us why he has a better alternative than communism as we have known it. His book is entertaining, but he ought to just become a social democrat and do mass transit studies for the Aarhus municipal government.
Assorted links
Claims I wish I understood
There is undoubtedly an elusive quality to the gauge/string duality. As well established as it is on technical grounds, it is just strange to have a fifth dimension that isn't really a dimension like the ones we know and love. It's there not so much as a physical direction, but as a concept that describes aspects of the physics of four dimensions. Ultimately, I'm not convinced that the six extra dimensions of string theory as a theory of everything will be more tangible than the fifth dimension of the gauge/string quality.
That is from Steven S. Gubser's The Little Book of String Theory. There is much in this book I did not understand, but I've seen plenty of popular physics books over the last few years. This is the first one in a long time that I both wanted to read and finished; it's full of fresh material, fresh at least to me.
Here is a podcast on gauge theory and economics, which I have yet to listen to.
Assorted links
1. Texaco tent city.
2. How much do the Greeks work?
3. Globalization has been good for world music.
4. Update from rating agency reform. And with a great sentence: "When I think about financial ethics, I sometimes falls back on “what if my dentist acted this way?” quick-test threshold for the financial sector."
5. Melvin Konner on childhood.
California fact of the day
Chug sends a good link to me, on default estimates, here is the bottom line:
The six with rankings more worrisome than California are Venezuela (the worst), followed by Argentina, Pakistan, Greece, Ukraine and the Emirate of Dubai. California ranks ahead of the Republic of Latvia, the Region of Sicily and Iraq.
As sovereign debt crises unfold, you will see increasingly innovative attempts to avoid uttering the simple words: "The government spent too much money here."
See also here for a list of "sovereign tighteners" and "sovereign wideners."