Category: Current Affairs
Unusual sentences
In one school that was closed, Homeland Security Academy, a middle school with a security-industry theme, students regularly set fires in the bathrooms.
The full story is here, and I thank Samuel Henly for the pointer. Or how about this one:
Deborah A. Cunningham , the manager of $261 billion at Federated Investors Inc. , was squeezed into the bathroom of her family’s recreational vehicle, trying to help save the $3.6 trillion money market industry.
Haiti: the next step?
Cité Maxo is one of 1,300 known spontaneous camps where 1.5 million people await, in the UN's term, "shelter solutions". What were intended to be temporary settlements are in many cases morphing into semi-permanent slums.
In other cases they are on the verge of being forcefully uprooted. About 65% of the camps are on private land. Since March landlords have started demanding their property back.
"A truck with masked men came last week and told us to leave," said Touren Jackson, 23, a resident of Cap y Verte, a camp of 8,000 people in Cité Soleil. "They said next time they come they'll act up," he added, imitating a gun with his hand.
There is more here.
Mexican drug cartel marketing strategies
Rodriquez said the local mafia – La Familia de Michoacan – blocked all street sales in the city a few years ago. The cartel said it was protecting the people from a scourge. Mexican law enforcement agents confirm that La Familia ordered a halt in local use, though they say it was a cynical ploy, a bit of propaganda.
"Now if you use it, they'll kill you," Rodriguez said. "Now it is just for the foreigners."
The longer article is here.
On a scale of one to ten, how much of an outrage is this?
Every now and then, it is worth posing that question. I don't mean to prejudge the answer:
The state, needing some of Lerner's land in Tysons to build a Metro station and tracks there, took it by eminent domain and paid the developer about $24 million for the property two years ago. Construction is underway on the new station, slated for the corner of Chain Bridge Road and Tysons Boulevard.
But that price – set just a few months before real estate values went into a freefall – almost immediately appeared to the cash-strapped state to be too high. The discrepancy led the transportation department and the hard-bargaining developer into a court battle over what the property was worth at the time it was taken, in November 2008.
Earlier this month, a Fairfax County jury agreed with the state that it had overpaid for the property, saying that one Lerner parcel was worth only $19.3 million, less than the $22.8 million Lerner was originally paid. It ruled that a much smaller parcel was worth just $313,000, not the $1.5 million that was originally paid.
Fairfax County Circuit Court Judge David S. Schell confirmed the decision Nov. 19, ordering that the Lerners pay the state $5.1 million for the excess and interest.
The full story is here.
A simple theory of WikiLeaks
Recall Timur Kuran's theory of preference falsification: many people follow the herd rather than revealing their true views, and this is most common in autocracies. In those cases, public opinion may suddenly flip. WikiLeaks, by making some truths common knowledge, has its biggest effects on autocracies, even if the leaks are from the United States.
Two possible results of the recent revelations could be that the Sunni Arab autocracies will have to cozy up more to Iran (their citizenries don't hate Iran so much, and so they might filp against their own leaders) or that China abandons North Korea altogether. In the former the government has to match the public opinion and in the latter case perhaps the public opinion can flip against North Korea and confirm a trend already underway in the government.
What about democracies? The most likely result (though not from this recent batch) is to encourage war-mongering attitudes against potential enemies, due to perceived slights. Such feelings are usually produced collectively, and subject to sharp triggers, following the revelation of knowledge or pseudo-knowledge. Remember the Zimmermann telegram?
Here are comments from Douthat and Wilkinson.
The culture that is Washington
As the Washington region begins an important effort to fix Metro's outdated, unwieldy governing apparatus, here's a way to appreciate the scale of the challenge: The task requires eight separate governmental bodies representing 12 distinct political jurisdictions to agree to rearrange how they oversee a ninth body, the transit system itself.
…If that's not daunting enough, consider that the biggest changes would require four entities – Maryland, Virginia, the District and Congress – to agree unanimously on identical wording to change the 44-year-old regional compact that created Metro.
The story is here.
Observations about Rio
I'm no expert on Rio, but I have visited the city twice, have taken a favela tour, been in a police vs. drug gang shoot out (not as a shooter), and read quite a few books about the place, so here are my observations on the latest events:
1. The authorities will not win until they have a superior ability to supply local public goods in the favelas. That is a ways away. (The broader lesson is you should not take in more immigrants than you can supply local public goods for, and that is why fully open borders is not a good idea in every setting.)
2. On a day-to-day basis, the police are outmatched in terms of weaponry and also will to win. The military cannot remain deployed forever and a tank cannot rule a neighborhood. I am skeptical about current victory claims, which from my comfortable perch in Fairfax I suspect are temporary at best.
3. Sometimes the Rio police push out the drug gangs, but the alternative is paramilitary groups which then run the drug trade. (Those groups, by the way, employ a lot of former policemen.) A police victory is not always the solution. Here are the different types of police in Brazil.
4. The Brazilian state has extended its governance, throughout the country, much less than you might think. The current battles are, among other things, an exercise in nation-state building, which historically has not come easily to most regions. Furthermore relying on the military for a (partial) victory is in the longer run a double-edged sword, especially in a nation with a history of military coups and military rule.
5. For a different and now shocking look at Rio (the hills are mostly empty), watch the stunning 1959 film Black Orpheus. Very good trailer here.
6. One of my favorite non-fiction books is Nancy Scheper-Hughes, Death Without Weeping: The Violence of Everyday Life in Brazil, highly recommended.
7. The Brazilians are now building high-speed rail between Rio and Sao Paulo.
China subsidy of the day
China’s property bubble has a new casualty: the corpses of Shanghai. In spite of stacking bodies seven or eight deep in graves, the squeeze on space in the city of 20m people has prompted the government to support burials at sea, part of a “green funeral” movement that is challenging deep traditions of filial piety.
Sea burials are rising 10 per cent a year after an increase in municipal subsidies to Rmb400 ($60) per funeral, according to an official with Feisi Sea Burial Company in Shanghai’s “funeral street”, Xibaoxing Road.
Here is more.
der andere Schuh
NYTimes: Despite Germany’s economic growth, its banks are among Europe’s weakest. Moody’s, the ratings agency, ranks the average health of German banks below those of most other Western European countries as well as nations like Brazil, Jordan and Mexico.
In its annual financial stability report, the Bundesbank warned that German banks had increased their dependence on short-term financing, a profitable but risky practice…
The war of politics and finance
There is talk of upping the euro bailout fund:
European Central Bank council member Axel Weber said governments can increase the size of the European Union-led bailout fund if necessary to restore confidence in the euro.
“Seven hundred and fifty billion should be enough to assure the markets,” Weber said at the German embassy in Paris late yesterday. “If not, it will have to be increased.”
The Spanish approach the same issues with another tone:
Spain has warned financial traders betting against its debt that they will lose money, in a defiant challenge to the markets which are driving Madrid’s cost of borrowing sharply higher.
José Luis RodrÃguez Zapatero, Spanish prime minister, on Friday ruled out any rescue package for the country even as the premiums demanded by investors to hold Spanish sovereign debt over that of Germany’s rose to euro-era highs.
You can find more detail at ElPais.com; most significantly it is a much bigger headline in the FT than in the Spanish paper.
In a nutshell, we’re watching the most pitched, highest-stakes, most determined battle between politics and finance which has been staged. I am expecting finance to win. It’s not just about PIGS and the future of the eurozone, it’s settling a very general question about the relative power of politics and finance. Either way, it is an event of momentous importance.
Large-scale battles erupt in Rio
If American TV is too boring, you can watch here on Globo; some moments are quite dramatic.
For the pointer I thank Eduardo Pegurier.
Concerns about Spain
More federalistic than you might think, indeed more like the EU than you might think:
Another concern is that the central government’s cost-cutting zeal might not be matched by regional and local authorities, which accounted for 57 percent of public spending last year.
The full story is here.
Headlines to ponder
German business confidence soars
Those are two of the countries which have done the most to commit to subsequent decreases in government spending. It would be wrong, wrong, wrong to causally attribute their growth to those spending decreases. Still, fairly firm expectations of spending decreases don't exactly seem to be driving them under, and we do know that AD stimulation is all about credible expectations, not just the current flow of spending…
Podcast with Tyler Cowen and Jerry Brito
Some time ago I asked MR readers to request podcast questions. The 30-minute podcast consists of Jerry Brito picking out some questions from that list and interviewing me. You can find it here. Jerry sums it up:
Cowen discusses why people will be appalled that we ever questioned intrusive searches by TSA, what should have been done to minimize unemployment and other harm from the financial crisis, how the “famous American formula” for good government is broken, what might force us to sit around opening cans of dog food with our teeth, and which global sites should be connected by Stargate portals to create the most value. He also asks, “Why read books?”, speculates about the value of his blog, addresses price discrimination of chicken McNuggets, talks about a modern day Athens in Asia with good food, suggests that internet comments are a relatively harmless form of stupidity, and opines about the best thing that government does.
The Friendly Skies
Cars are far more dangerous. From Nate Silver.