Category: Current Affairs

The purpose of our blogging is to circulate ideas that are new, or at least new to us and perhaps to you.  But every now and then there is something to be said for sheer repetition of the important.  If nothing else, this incursion into the known might make those points more memorable, more salient, or more likely to influence your behavior.  So here goes:

1. Torture is morally wrong, and the U.S. government should not be torturing people or easing the use of torture.  And yes I will make an exception for the ticking nuclear time bomb.

2. We have dropped the ball on securing Russian nuclear weapons.  There was simply no good reason for this mistake.

3. Avian flu could be a very very serious pandemic; here is the latest.  We are not prepared.  How about more investment in faster vaccine production technologies, not to mention an improved legal and regulatory climate?

4. Choose the better, not the worse.  Have you failed to apply for your 401K employer-matched savings contribution?  Do you simply refuse to see the doctor for a needed check-up?  Do you fail to perform small considerate but ultimately costless household chores for the benefit of others around you?  Do you fail to realize that all food tastes better when cooked with sea salt?  Repent and reform.

We now return you to the regularly scheduled blogging…

Taiwanese factories in Dongguan [a city between Hong Kong and Guangzhou and a major centre of manufacturing] are facing a problem. According to a news report in the United Daily in Taiwan, over a thousand workers at a factory, which produces goods for big brand names such as Nike, demonstrated for two days and damaged equipment and factory cars. 500 armed police arrived and quashed the riot. Several leaders were arrested.

The main cause for the riot was the limitation [sic] on working hours at the factory. The shorter hours have been requested by US companies so as to avoid criticism from various groups on long working hours. However, the mainly migrant workforce want to work longer hours so they can earn more [emphasis added]. Consensus had been reached by the US companies, the Taiwanese-invested factory and local government that the maximum working hours per week should be set at 60 hours [which is still a breach of Chinese Labour Law, but less than other manufacturing plants]. However, this reduction in hours was unsatisfactory for the workers and the resulting riot was serious [emphasis added].

Here is the link, and thanks to Jeffrey Tucker at The Mises Blog for the pointer.  And here is my previous post on social unrest in China.

Here is Harvard’s Harvey Mansfield on economists (in relation to the Summers affair).

Summers is an economist, and there is almost no such thing as a suave
economist. The great Joseph Schumpeter, a Harvard economist of long ago, claimed
to be the world’s greatest lover as well as the world’s greatest economist (it
is said), but he was a singular marvel. The reason why economists are blunt is
that words of honey seem to them mere diversion from reason and self-interest,
which are the only sure guides in life.

Only one in three Americans approve of
President Bush’s handling of Social Security, his lowest rating on the
issue since he took office.  A USA TODAY/CNN/Gallup Poll conducted
Friday-Sunday found that 35% approved of Bush’s Social Security record,
56% disapproved and 9% had no opinion. That was down from three weeks
ago, when 43% approved. In March 2001, just after he took office, 49%
approved. (Related: Poll results)

Here is the story.  Yes poll results are tricky but this suggests we will not get a large reform plan.  I expect a face-saving measure with a tax increase on the FICA maximum, and a nominal nod to "private" accounts in the form of forced saving.  As they say, be careful what you wish for…

In his Washington Post column Eugene Robinson viciously attacks Larry Summers for his recent comments.

First, is there a pattern here? When Summers arrived at Harvard, one
of his first acts was to dress down one of the university’s best-known
black scholars, Cornel West, for spending too much time on outside
projects and not enough on research. Offended, West decamped to
Princeton University. But Harvard is lousy with peripatetic rock-star
professors. One of Summers’s most vocal defenders is Harvard law school
professor Alan Dershowitz, who found time amid his busy academic
schedule to serve on the O.J. Simpson defense team, for heaven’s sake.
Why start with West? Was he doing anything his white colleagues don’t
do?

Oh, this one is just too easy.  Why yes, Cornel West’s colleagues were not cutting rap albums with Derek "DOA" Allen and Killa Mike.  (“In all modesty, this project constitutes a watershed moment in musical history”).  Nor were they appearing in the movies as wise Councilor West of the last free human city of Zion, or leading a leading a political committee for Al Sharpton’s presidential campaign.  (Sharpton helpfully threatened to sue over the Summers-West donnybrook.)

I’m open to the argument that West is practicing an unorthodox but compelling form of pedagogy.  At the very least he isn’t resting on his laurels but however you slice it the comparison with Dershowitz is bizarre.  Dershowtiz teaches criminal law.  For him to be involved in the "trial of the century" is directly relevant to his work and redounds to Harvard’s advantage.  Who wouldn’t want to study defense law from a master?

Robinson may be offended by Summers’ remarks but his insinuations are unfair and irresponsible.

In the past months we have learned that the prescription drug
benefit passed last year is not going to cost $400 billion over 10
years. The projections now, over a slightly different period, are that
it’s going to cost over $700 billion. And these cost estimates are
coming before the program is even operating. They are only going to go
up.

That means we’re going to be spending the next few months
bleeding over budget restraints that might produce savings in the
millions, while the new prescription drug benefit will produce spending
in the billions.

In Congress, some are taking a look at these new cost projections
and figuring that maybe it’s time to readjust the program. In the House
there are Republicans like Mike Pence and Jeff Flake (whose predictions
of this program’s actual cost have been entirely vindicated by events).
In the Senate there are people like Judd Gregg and Lindsey Graham.
These fiscal conservatives want to make the program sustainable.

Perhaps the benefits should be limited to those earning up to 200
percent of the level at the poverty line. Perhaps the costs should be
capped at $400 billion through other benefit adjustments. These ideas
are akin to what the candidate George Bush proposed in 2000.

But the White House is threatening to veto anything they do! President
Bush, who hasn’t vetoed a single thing during his presidency, now
threatens to veto something – and it’s something that might actually
restrain the growth of government. He threatens to use his first veto
against an idea he himself originally proposed!

Here is David Brooks’s entire opinion piece.

"Deutsche Wertarbeit" is becoming a thing of the past:

This anecdotal evidence, albeit from the heaviest users and sharpest
critics of cars, highlights the trouble in which Mercedes finds itself.
Its reputation for quality lies in tatters as it has been forced to
admit that its cars, which once set the industry standard for
reliability, are prone to breaking down.

Last week the Mercedes
Car Group, which includes the lossmaking Smart small-car brand,
reported its worst quarterly profit for 13 years and admitted that this
year might be more challenging still. It even suffered the ignominy of
seeing its profits overtaken by Chrysler, the previously struggling US
mass-market carmaker that merged with Daimler-Benz in 1998.

For
Germany’s taxi drivers, this comes as no surprise. "Opels [made by
General Motors of the US] are half the price of Mercedes and the
quality is now the same," says Anis Ahmad, a Frankfurt taxi driver with
an Opel Zafira.

…Mercedes has slipped in the past decade from first to 28th place in the respected JD Power reliability survey [emphasis added].

Here is the full story.

The French have their own means of addressing stagnation:

The French government yesterday signalled a new approach
to tackling the country’s unemployment crisis by stimulating the
creation of low-paid jobs in the domestic services market.

Jean-Louis
Borloo, the labour and social affairs minister, said the government
would spend €1.43bn ($1.9bn, £970m) over the next three years to boost
employment by up to 500,000 jobs in domestic services such as cleaning,
childcare, gardening and help for the elderly…

As part of the jobs creation package, Mr Borloo announced the formation
of a state agency to oversee the domestic services market. This agency
will help to bring black market workers into the formal economy by
offering them welfare benefits.

In relative terms, yes this is progress.  But the simplest way to keep wages high is, in fact, to allow wages to fall.  Counterintuitive, yes, but that is how we economists earn our keep.

Germany’s public employees, long perceived as lazy bureaucrats
insulated from real-world pressures, are now facing the same demands
for lower costs and more flexibility from governments that their
counterparts in the private sector have been confronted with from
German companies.

In negotiations taking place in Potsdam, just outside Berlin, federal
and local governments are demanding not only a wage freeze but also the
ability to extend working hours and curb overtime benefits, in what
would be the biggest overhaul of state work rules in more than 40 years.

And what is the response from the labor unions?

"We are flexible, but we need to see a salary increase."

Here is a previous installment in the Germany series.

Reason magazine asks well-known libertarian bloggers and others (including Vernon Smith, Nadine Strossen, Virginia Postrel, Jacob Levy, Daniel Drezner, Glenn Reynolds, and yours truly) to state their biggest hopes and fear for the next four years.  Thanks to Daniel Drezner for the pointer. 

And if you like Reason, check out the new volume Choice: The Best of Reason, edited by Nick Gillespie.

An Oklahoma senator hopes to revive cockfighting in the state by putting tiny boxing gloves on the roosters instead of razors.

The Oklahoma legislature outlawed the blood sport in 2002 because of
its cruelty to the roosters, which are slashed and pecked to death
while human spectators bet on the outcome.

But State Sen. Frank
Shurden, a Democrat from Henryetta and a long-time defender of
cockfighting, said the ban had wiped out a $100-million business.

To
try to revive it, he has proposed that roosters wear little boxing
gloves attached to their spurs, as well as lightweight, chicken-sized
vests configured with electronic sensors to record hits and help keep
score.

Here is the full story.

For years, France has fought what is sees as an American cultural invasion, powered by Hollywood movies, U.S. pop music and giant brands like Coca-Cola.  Now, it is going to great lengths to save an American cultural icon in its backyard: Disneyland

The French government has just finished helping Walt Disney Co. bail out Euro Disney SCA, the operator of two Disney theme parks outside Paris.  A state-owned bank is contributing around $500 million in investments and local concessions to save Euro Disney from bankruptcy.  This comes after 17 years during which French leaders have spent hundreds of millions of dollars and countless hours to ensure that the land of Money could keep Mickey Mouse.  Still saddled with debt, Euro Disney is gambling that expensive new attractions and an improved tourism climate will deliver a turnaround.

That is from the front page of The Wall Street Journal, 26 January.  And here is a previous installment of The Cultural Exception.

China’s international patent applications, though growing, are still less than 1 per cent of the total filed in the US and Europe.

Read more here.

"Nation Split on Bush as Uniter or Divider."

Here is the story.