Category: Current Affairs
President’s Day fact of the day
During the president’s two terms in office, the Washingtons relocated first to New York and then to Philadelphia. Although slavery had steadily declined in the North, the Washingtons decided that they could not live without it. Once settled in Philadelphia, Washington encountered his first roadblock to slave ownership in the region — Pennsylvania’s Gradual Abolition Act of 1780.
The act began dismantling slavery, eventually releasing people from bondage after their 28th birthdays. Under the law, any slave who entered Pennsylvania with an owner and lived in the state for longer than six months would be set free automatically. This presented a problem for the new president.
Washington developed a canny strategy that would protect his property and allow him to avoid public scrutiny. Every six months, the president’s slaves would travel back to Mount Vernon or would journey with Mrs. Washington outside the boundaries of the state. In essence, the Washingtons reset the clock. The president was secretive when writing to his personal secretary Tobias Lear in 1791: “I request that these Sentiments and this advise may be known to none but yourself & Mrs. Washington.”
There is more here, depressing throughout, and for the pointer I thank Michael Clemens.
From the comments, on the Greek primary surplus
Tom Warner writes:
…the budget balance fell off a cliff in December. State budget revenues were only 2.4% below adjustment program target in Jan-Nov, but were 14% below target in December and 20% below target in January. That’s a huge shortfall – if a 20% revenue shortfall were to persist for the whole of 2015, that would be more than €11b euros of missing revenues and more than 6% of GDP.
So the issue now isn’t whether Greece can hit some pie-in-the-sky target, it’s whether it can get back to where it was in Jan-Nov of last year. Syriza’s going to have to get the state finances in order very quickly or they’re going to go boom.
Here is Tom Warner’s blog.
How much should you spend on Valentine’s Day flowers?
Showing that you care:
“It’s always about upping the ante,” says Meredith Waga Perez of Belle Fleur in the Flatiron District, who says clients drop as much as $5,000 for the big day.
Last year, Aleks Degtyarev spent $6,000 at Flower District-based rose-delivery service, Ode à la Rose, to propose to his girlfriend of three-plus years, Lulu.
“I wanted 1,114 roses,” says Degtyarev, a 33-year-old from Bay Ridge. “A rose for every day we knew each other.”
A friend helped him strew the thousand-plus loose stems across a Montauk bluff.
There are a variety of other anecdotes at the link. You don’t have to be a proponent of romantic countersignaling, or a member of Kakuhidou, to think this is overall counterproductive.
For the pointer I thank D.
The Valentine’s culture that is Japan against the romantic-industrial complex
On February 14th, Kakumei-teki himote doumei (革命的非モテ同盟) — literally, “Revolutionary Alliance of Men That Woman Are Not Attracted To”– will gather in Shibuya, an area of Tokyo popular with young couples, to protest Valentine’s Day and its roots in what they call “romantic capitalist oppression.”
The group, known as Kakuhidou for short, was started in 2006, when its founder, Katsuhiro Furusawa, returned home one day after being dumped by his girlfriend and began reading the Communist Manifesto. He quickly came to the realization that being unpopular with girls is a class issue.
Since then, the group has held several demonstrations each year, all coinciding with holidays that are associated with romantic love in Japanese culture, such as Valentine’s Day, Christmas, and White Day .
Kakuhidou’s slogans combine Japanese internet culture with classical Marxism, and its origins in cyberspace can be charted through its choice of language. For example, one frequent target of the group’s admonitions are the so-called “riyajuu” (リア充）, a neologism frequently used in online communities such as 2chan to refer to those who experience fulfillment in their offline lives (riyajuu is a portmanteau that combines “real” with “jyuujitsu”, the Japanese word for fulfillment).
The release posted on Kakuhidou’s website for this year’s anti-Valentines parade says “the blood-soaked conspiracy of Valentine’s Day, driven by the oppressive chocolate capitalists, has arrived once again. In order to create a brighter future, we call for solidarity among our unloved comrades, so that we may demonstrate in resolute opposition to Valentine’s Day and the romantic industrial complex.”
At previous events, leaders of the group have yelled slogans such as “I hope all riyajuus explode! But we’re still a little jealous!” while wearing shirts that say, roughly, “sex is useless.”
There is more here. By the way, the group’s official vehicle is a Mercedes-Benz.
For the pointer I thank Andrea Castillo.
The Greeks are now negotiating seriously
So says my Twitter feed.
For the last few weeks there have been three models in the running:
1. The Greek government is calling the Germans Nazis because they figure Grexit is coming no matter what and they want to get the populace riled up as a distraction from the disasters, or
2. The Greek government will cave so cravenly on the substance that they want to have it on the record books that they supplied some expressive goods for a few weeks’ time, namely insulting the Germans and claiming that the Troika is dead and buried, or
3. The Greek government is simply full of out-of-control, ideological maniacs.
Right now it is looking like #2 — however unlikely it may sound as a model of retrospective voting and intertemporal substitution — is closest to reality. What the relevant legislatures will go along with, however, still remains to be seen. Arguably the insults and posturing have narrowed the possible bargaining space by hurting feelings all around.
Markets in everything
Better-known and more mainstream European politicians are also cozying up to Putin: French ex-president Nicolas Sarkozy, who was recently re-elected head of the powerful UMP, came out this week in support of the EU formally ceding Crimea to Russia, and had some kind words for the Kremlin. Another UMP figure, the mayor of Nice, has come out in even stronger support of Putin.
There is more here, background information here. As we already are seeing, the European response to the Russian invasion of Ukraine will not be overwhelmingly strong.
Is Norway an economically overrated country?
The petroleum sector is about 21% of gdp and half of exports. It’s not just that prices are down, rather quantities produced have been declining throughout the oughties. (That is the less well known angle here.) Currently Norwegian oil production is at about half of its 2000 level, and the sector is now bracing for 40,000 job cuts.
Here is from a recent internal economists’ critique of the country:
The group has documented how Norwegian politicians all too often have approved major investment projects that benefit far too few people, are poorly managed and plagued by huge budget overruns. Costs in general are way out of line in Norway, according to the group, while schools are mediocre, university students take too much time to earn degrees and mainland businesses outside the oil sector lack enough prestige to help Norway diversify its oil-based economy. The group mostly blamed the decline in productivity, though, on systemic inefficiencies and too much emphasis on local interests at the expense of the nation.
Is this entirely reassuring?:
Prime Minister Erna Solberg recently spoke of the need to invest in areas where people actually live…
After you adjust for wage differences, it costs 60% more to build a road in Norway than in Sweden.
“Approximately 600,000 Norwegians … who should be part of the labor force are outside the labor force, because of welfare, pension issues,” says Siv Jensen, the finance minister.
The country has largely deindustrialized, oil of course aside. And there is a fair amount of debt-financed consumption.
The country has falling and below average PISA scores by OECD standards.
Not everyone admires Norway’s immigration policy, and there is periodic talk of banning begging in the country. It seems there are only about 1000 beggars — mostly Roma — in a country of about five million, so you can take that as a sign they are not very good at processing discord. Far-right populist views do not seem to be going away.
For sure, Norway will be fine. Did I mention per capita income is over $100,000 a year and they have no current problems which show up in actual life? Hey, the “over” in “overrated” has to come from somewhere! The country also has the world’s largest sovereign wealth fund and owns about one percent of global stocks. Still, the idea of a rentier economy makes me nervous. When most people don’t “have to” do that well, often cultural erosion sets in.
They’ve made a new film : “Here’s a beautiful video of Iceland and Norway, time-lapsed and tilt-shifted to show the hustle, the bustle, and the beautiful splendor of Scandinavia from a more toy-like perspective. Called The Little Nordics, it was filmed by Dutch design team Damp Design. Happy Friday!”
Sorry Magnus, Karl — I know you guys are still underrated. It’s not for nothing that I used to call it “the Norwegian century.”
Addendum: Here is my earlier post on whether Sweden is an economically overrated country. At least it is cheaper to build a road there.
Sentences about Russia
“Its Moscow can feel like an oligarchy in the morning and a democracy in the afternoon, a monarchy for dinner and a totalitarian state by bedtime,” he writes.
The longer FT article on Russia is here, the quotation is from Peter Pomerantsev.
There is something negative in the state of Denmark
Denmark’s central bank governor pledged to face down speculators testing its currency peg to the euro, saying he would do “whatever it takes” to defend it.
Lars Rohde told the Financial Times that Nationalbank could “go on forever” defending the peg, after lowering interest rates four times in three weeks to a global record low of minus 0.75 per cent. It has also swelled its balance sheet to a record size by printing krone in an attempt to weaken the Danish currency.
“The main message is that we are ready to do whatever it takes to defend the peg. We have unlimited access to Danish krone and we have no restrictions on our balance sheet,” he said, in his first public comments since the recent quadruple rate cuts.
The FT article is here, here is Bloomberg coverage. I would bet against them, in any case this will be a neat test case for our judgments of Switzerland. The Danish government also has stopped selling bonds to help maintain the peg; Lord Polonius comments on that policy. The Danes have announced a true precommitment, in a way the Swiss never did, now let’s see what happens. Defense of the peg is in fact their only official monetary policy target, and the central bank head claims it is supported by all segments of Danish society.
Denmark, of course, has not yet joined the euro, or wanted to. Meanwhile, Crown Princess Mary of Denmark just turned forty-three.
Mood affiliation tweets to ponder
The Greek People Have Punctured the Smugness of the “Moneymen” – hope is replacing despair
That is from a Dr. Adnan Al-Daini. He links to this piece of his on the same theme. It is noted that the Dr. used to teach at a British university. Behind the first link, there are several comments on the tweet.
Yet, in reality, the ECB and the EU seem to be holding all of the cards. I do not expect that to change. Here is “Emergency Liquidity Assistance for Greek Banks: An Explainer.”
Current research about vaccines and vaccination
From Harvard’s Kennedy Center:
…see the related article “Addressing Vaccine Hesitancy,” by report co-chairs Barry R. Bloom of the Harvard School of Public Health, Edgar Marcuse of the University of Washington and Seth Mnookin of MIT.
The beginning of this misinformation problem, researchers say, dates back to 1998, when a now-discredited scientific paper was published in Britain linking vaccines to autism, a link that was proven entirely false and even labeled “fraudulent.” A number of activists and some celebrities have adopted prominent anti-vaccine positions, and media and entertainment outlets have provided a platform for some of their views.
Despite the importance of this issue, little research has been done on how newer forms of technology and communication, including social media or video-sharing sites, influence health decision-making. And there are basic questions about the effectiveness of traditional public health campaigns. One of the most important studies to date is a 2014 paper in the journal Pediatrics, “Effective Messages in Vaccine Promotion: A Randomized Trial.” The researchers — Brendan Nyhan of Dartmouth College, Jason Reifler of the University of Exeter, Sean Richey of Georgia State University and Gary L. Freed of the University of Michigan — analyzed the results of a Web-based national survey of nearly 1,800 parents. After asking respondents about their own family health situations and beliefs, researchers then tested common public health communications strategies to promote vaccination: “(1) correcting misinformation, (2) presenting information on disease risks, (3) using dramatic narratives, or (4) displaying visuals to make those risks more salient or accessible.”
The study’s findings include:
- The data indicate that “pro-vaccine messages do not always work as intended and that the effectiveness of those messages may vary depending on parental attitudes toward vaccines.” In fact, there was “little evidence that messages emphasizing the risks of vaccine-preventable diseases were effective in promoting vaccination intent.”
- Further, the data show that a “dramatic narrative about measles and images of sick children” actually ended up increasing misperceptions about MMR.
- The study’s conclusion was unequivocal regarding traditional messaging: “None of the pro-vaccine messages created by public health authorities increased intent to vaccinate with MMR among a nationally representative sample of parents who have children age 17 years or younger at home. Corrective information reduced misperceptions about the vaccine/autism link but nonetheless decreased intent to vaccinate among parents who had the least favorable attitudes toward vaccines.”
By the way, Werner Troesken at the University of Pittsburgh will be publishing a new book on how American freedoms have allowed infectious diseases to spread, or so sounds the description. It is from University of Chicago press, due out in May.
Gdp-linked loans and loan restructuring for Greece
Here is a new paper by Fratzscher, Steffen, and Rieth (pdf), advocating gdp-linked loans for Greece.
Here are older proposals for gdp-indexed bonds (pdf). Scott Sumner comments on the new Greek proposal. Here is an IMF paper on the topic (pdf). Greece already issues some gdp-linked warrants. Here is Argentina fudging its gdp stats to save on its gdp-indexed bonds. Here is more on related disputes.
p.s. they are not going to do it.
Russo-German sentences to ponder
Ms Merkel is familiar with Mr Putin’s psychological operations. In 2007, he played on her well-known fear of dogs by allowing his black Labrador, Koni, into a meeting with her in his summer residence in Sochi. Photos show her tight-lipped as the Labrador buried its head in her lap.
Berlin officials say the chancellor does not allow Mr Putin to get to her through such displays or, for example, by turning up hours late for a meeting, as he did the night before the summit in Milan. Instead, she turns it to her advantage, treating the Kremlin chief’s bad manners as a sign of weakness.
From the FT, there is more here, interesting throughout. File under still an important relationship.
The battle at the margin is about wealth taxes and families
President Barack Obama will propose raising $238bn by levying a one-off tax on the cash piles held by US companies overseas to repair the US’s crumbling roads and bridges.
The measure, a key plank of the president’s budget to be outlined on Monday, would impose a 14 per cent “transition” tax on the estimated $2tn in earnings US companies have amassed overseas, the White House said on Sunday.
The FT story is here, Vox is here. Part of the plan also involves replacing the 35 percent rate — which many large corporations avoid — with a 19 percent flat rate which would apply to foreign earnings as well.
And what might these taxes eventually go to pay for? Matt Yglesias reports:
…there’s an emerging Democratic consensus over what’s next — children and family policy. There are a few different threads to this, including early childhood education, special tax benefits for working moms, child care subsidies, and paid sick leave and maternity leave.
Greece needs Thatcheropoulous
On Thursday, Russia announced that it would consider extending financial aid to Greece if the latter asked.
There is more here, of interest throughout, though not fundamentally surprising. Greece is seeking to auction its EU veto between the EU and Russia. And over the weekend Chris Calomiris told us that Tsipras is a longstanding admirer of Fidel Castro, and furthermore he named his youngest son “Ernesto” after [Ernesto] Che Guevara. He also has voiced his opposition to Nato in the past.
As I’ve said, these are the Not Very Serious People, enough to make you want to have the Very Serious People back. As Garett Jones has noted, Greece needs its Thatcheropoulous — strong, credible, pro-debt renegotiation, pro-capitalism, anti-corruption, pro-tax fairness, and pro-foreign investment. People, that is not what we are getting.
The best chance scenario is that this is all an elaborate bluff for a pivot toward sensible reform. The bluff I can see, the sensible reform sorry no. Is a Thatcheropoulous possible when one can read headlines such as “Death threats forced me to quit my job, says Greece’s top tax man“? How many of the cultural preconditions of successful reform are present in Greece right now?
Here is the FT on the evolving game of chicken:
Eurozone officials are increasingly worried that Greece’s €172bn bailout will expire at the end of the month and potentially plunge it into chaos, after a series of meetings with the new Greek government convinced them Athens is unaware of how perilous its financial situation has become.
Fortunately, 70% of the Greek public believes that Tsipras will succeed as Prime Minister.