Category: Current Affairs

In 1990 bicycles carried 70 percent of travelers in Shanghai. Now it is no more than 15 to 17 percent. Last month the city government of Shanghai banned bicycles on all major roads. Automobile sales in China are growing at a rate of 50 percent yearly. Bus service is considered to be of good quality and a subway network is being built. Upon completion it will have more miles of track than the subways of New York City. China has 7 of the world’s 10 most polluted cities. Here is the full story.

Calpundit provides a useful tabular analysis of how California’s new governor will address the state’s fiscal crisis. Here is the entire budget document. Here is another blog analysis.

Where are the cuts coming from?

Overall, the cuts appear to be approximately as follows: $900 million from MediCal, $800 million from CalWorks welfare-to-work programs, $.6 billion in other health and human services programs, $400 million from higher education, $2 billion from primary education, $400 million from prisons, $1 billion from transportation projects, and $.2 billion in miscellaneous.

On top of that we have fee increases of $1.3 billion, much of that coming from casinos, and $4 billion of borrowing. If we can take all the numbers at face value (hardly ever the case with political budgets), a $14 billion budget shortfall will be covered.

The bottom line: Once you push through the smoke and mirrors, spending cuts amount to only a few billion. Still, this is the best political test we are likely to see of whether real spending cuts can be sold to the general electorate. If it sounds like Arnie is cutting too much budget meat for your taste, keep in mind that California state spending rose 44 percent since 1997-8. State bonds are near junk status and possess the lowest credit rating among the states.

Lynne Kiesling offers a thorough discussion of how the act does little to protect endangered animals. I had started my own post on this topic, but stopped writing once I came across Lynne’s, which is replete with excellent links. Juan Non-Volokh offers an equally biting critique of the Act.

Many Haitian politicians, including Aristide, are demanding $21 billion in reparations from the French government. They seek the return of the 1825 “blood money” they paid to Paris for their 1804 independence, with compound interest of course.

Today the Haitian government pulls in a mere $237 million a year. I have seen per capita income estimates ranging from $250 to $400 a year, depending on which numbers you trust. So $21 billion would make a big splash in at least a few bank accounts. One of the European papers I picked up on honeymoon cited a Haitian politician as claiming, without irony or apology. that “claims to restitution” were now his country’s chief national asset. That same politician objected to the rest of the world viewing Haiti as “barbarians.”

And the not so surprising response?

The French government has balked at the demand, citing “bad governance” and the 200 million Euros (about $250 million) of aid already dedicated to Haiti since 2000.

Samuel Bowles, in his recent book, suggests that Haiti may have been the richest place in the world at the end of the eighteenth century. While this estimate may be exaggerated, there is little doubt that the place once was prosperous. Even after the French tribute and blockade, Haiti was considered to be richer than its island neighbor the Dominican Republic. But today the DR has a per capita income over $2,000, many times that of Haiti. More generally, calls for long-term restitution face a problem of benchmarking damages. If the oppression in question had not happened, what is the relevant comparison? A Haiti where the French confer all relevant benefits and then act like gentlemen? Or a Haiti where the French never show up at all? And if the Haitian economy has been shrinking, should we not compound the 1825 loss at a negative rate of interest rather than a positive rate? It is difficult to believe that those funds would have been saved and invested at positive rates of return, reaching into the present day.

Middle Eastern stock markets have turned out to be some of the year’s best performers. The Saudi exchange is up by 74 percent and Kuwaiti shares have doubled in value, according to the 3-9 January issue of The Economist. Here is another on-line summary, as of late November. It is not just high oil prices, the All-Arab Index, which covers 79 stocks in 12 Arab countries, is up 50% in dollar terms for 2003. Furthermore the Egyptian market is up 60% for the year, you can follow the Egyptian market here. The U.S. officially accredited the Egyptian stock just this year. By the way, you can follow the Palestine Stock Exchange, and the associated Al-Quds index with 28 listed companies, through this page. I would not in general recommend this investment, but for the year it is up an improbable 12.15%. Not surprisingly, the capture of Saddam was good for most Middle Eastern markets.

I have been in many ways skeptical of the postwar Iraq policies of the Bush administration. But in light of this information it is more difficult to argue that we are destabilizing the entire Middle East, at least relative to previous expectations of investors.

Spain´s National Coin and Stamp Factory has just finished destroying 6.6 billion peseta coins, which of course have been replaced by the euro. Eleven large warehouses were required, each with police protection and convoys. The coins still have legal value, so it also was necessary to weigh the metallic piles before and after destruction, to make sure that no (or not much!) theft had occurred. It is estimated that over two billion euros worth of the old currency remains in the form of dormant coins. Pesetas can be exchanged for euros indefinitely.

Spain is the first country to complete the destruction of its own currency. Yet the Bank of Spain estimates that forty percent of all Spaniards still calculate in terms of the old monetary unit, especially for large transactions.

The destroyed coins will be turned into car parts, cutlery, medals, and new coins.

From El Pais, no link available.

Matt Yglesias speaks good common sense about why this concept is such a non-starter:

John Kerry’s call to make America independent from foreign oil provides me with yet another opportunity for one of my bitch-and-moan sessions about this bogus concept. Folks on both the left and the right like to pitch their energy plans as making American more independent from foreign oil, but the whole idea is, as I say, bogus. The problem is not that we’re dependent on foreign oil, the problem is that we’re dependent on oil. The current economy of the entire first world and, especially, the United States is predicated on the use of enormous quantities of oil in order to, among other things, power all our cars and trucks. The importance of “foreign” (read: Middle Eastern) oil in all of this isn’t that we can’t get oil from anywhere else, it’s that Middle Eastern oil is the cheapest oil around.

Hence, production decisions taken in the Middle East essentially determine the price of oil on the global market. This is the case for all countries, even countries that don’t import much (or any) Middle Eastern oil, because it’s a fungible commodity. The US could totally cease imports from the Gulf region and we would still be just as dependent as we are.

The only way to make us more independent of the insidious foreign oil would be to either radical alter the geology of the earth, thus somehow making oil from somewhere else cheaper to extract, or else, more realistically, to reduce our economy’s dependence on oil. One could envision, say, a massive campaign to power our cars with hydrogen fuel and to build large numbers of nuclear power plants to create the hydrogen fuel (if you don’t build the nuclear plants, though, you’ll just wind up using oil to make the fuel that replaced the oil in your cars — this would be good for the environment, but do nothing to the economics of oil), but if we did this we’d have to put all the waste somewhere and would probably become dependent on foreign sources of uranium or something.

I agree, although I would not so rapidly dismiss the idea of making oil from somewhere else cheaper to extract.