Category: Current Affairs
The second attempted coup d’etat was partially successful
Here is some video. And a related note, don’t forget the ERA either. WSJ article here.
Thinking about Greenland critically (from the comments)
Should the U.S. recognize Somaliland?
I do not myself have a position on this issue, but I found this analysis by Ken Opalo interesting:
The main argument below is that while the people of Somaliland deserve and have a strong case for international recognition, such a development at this time would very likely take away the very incentives that have set them apart from the rest of Somalia over the last 33 years.
To be blunt, achieving full sovereignty with de jure international recognition at this time would do little beyond incentivizing elite-level pursuit of sovereign rents at the expense of continued political and economic development. What has made Somaliland work is that its elites principally derive their legitimacy from their people, and not the international system. Stated differently, full sovereignty runs the risk of separating both the Somaliland state and ruling elites from the productive forces of society; which in turn would free politicians (and policymakers) from having to think of their people as the ultimate drivers of their overall economic wellbeing. Just like in the rest of the Continent, the resulting separation of “suspended elites” from the socio-economic foundations of Somaliland society and inevitable policy extraversion would be catastrophic for Somalilanders.
The last thing the Horn needs is another Djibouti — a country whose low-ambition ruling elites are content with hawking their geostrategic location at throwaway prices while doing precious little to advance their citizens’ material well-being (Djibouti’s poverty rate is a staggering 70%).
There is much more at the link.
Some game theory of Greenland
It is commonly assumed that the U.S. “acquiring” Greenland, whatever that might mean, will result in greater U.S. control of the territory. Along some dimensions that is likely. But it is worth pondering the equilibrium here more seriously.
I observe, in many locations around the world, that indigenous groups end up with far more bargaining power than their initial material resources might suggest. For instance, in the United States Native Americans often (not always) can exercise true sovereignty. The AARP cannot (yet?) say the same. In Mexico, indigenous groups have blocked many an infrastructure project.
One reason for these powers is that, feeling outmatched, the indigenous groups cultivate a temperament of “orneriness” and “being difficult.” Some of that may be a deliberate strategic stance, some of it may be heritage from having been treated badly in the past and still lacking trust, and some of it may, over time, be acquired culture as the strategic stance gets baked into norms and behavior patterns.
Often, in these equilibria, the more nominal power you have over the indigenous group, the more orneriness they will have to cultivate. If you only want a few major concessions, sometimes you can get those better as an outsider. A simple analogy is that sometimes a teenager will do more to obey a grandparent than a parent. Fewer issues of control are at stake, and so more concessions are possible, without fear of losing broader autonomy.
So a greater American stake in Greenland, however that comes about, may in some regards end up being counterproductive. And these factors will become more relevant as more resource and revenue control issues come to the table. For some issues it may be more useful having Denmark available as “the baddie.”
It is worth thinking through these questions in greater detail.
The Greenland debates
I would say we have not yet figured out what is the best U.S. policy toward Greenland, nor have we figured out best stances for either Greenland or Denmark. I am struck however by the low quality of the debate, and I mean on the anti-U.S. side most of all. This is just one clip, but I am hearing very much the same in a number of other interchanges, most of all from Europeans. There is a lot of EU pearl-clutching, and throwing around of adjectives like “colonialist” or “imperialist.” Or trying to buy Greenland is somehow analogized to Putin not trying to buy Ukraine. Or the word “offensive” is deployed as if that were an argument, or the person tries to switch the discussion into an attack on Trump and his rhetoric.
C’mon, people!
De facto, you are all creating the impression that Greenland really would be better off under some other arrangement. Why not put forward a constructive plan for improving Greenland? It would be better yet to cite a current plan under consideration (is there one?). “We at the EU, by following this plan, will give Greenland a better economic and security future than can the United States.” If the plan is decent, Greenland will wish to break off the talks with America it desires. (To be clear, I do not think they desire incorporation. This FT piece strikes me as the best so far on the debates.)
Or if you must stick to the negative, put forward some concrete arguments for how greater U.S. involvement in Greenland would be bad for global security, bad for economic growth, bad for the U.S., or…something. “Your EU allies won’t like it,” or “Trump’s behavior is unacceptable” isn’t enough and furthermore the first of those is question-begging.
It is time to rise to the occasion.
p.s. I still am glad we bought the Danish West Indies in 1917. Nor do I hear many Danes, or island natives, complain about this.
My podcast with Reason
With Liz Wolfe and Zach Weissmueller:
The link here contains the YouTube video, text description, and links to audio versions at reason.com: https://reason.com/podcast/2025/01/10/tyler-cowen-why-do-we-refuse-to-learn-from-history/
Youtube page for embedding is here: https://www.youtube.com/watch?v=p-Kpyg2mFU8
Lots of about libertarianism and state capacity libertarianism, and The Great Forgetting, food at the end…interesting throughout!
Lunar spectrum markets in everything?
Private companies are staking claims to radio spectrum on the Moon with the aim of exploiting an emerging lunar economy, Financial Times research has found. More than 50 applications have been filed with the International Telecommunication Union since 2010 to use spectrum, the invisible highway of electromagnetic waves that enable all wireless technology, on or from the Moon.
Last year the number of commercial filings to the global co-ordinating body for lunar spectrum outstripped those from space agencies and governments for the first time, according to FT research. The filings cover satellite systems as well as missions to land on the lunar surface.
“We will look back and see this as an important inflection point,” said Katherine Gizinski, chief executive of spectrum consultancy River Advisers, which has filed for lunar spectrum for three satellite systems on behalf of other companies since 2021.
Here is more from Oliver Hawkins and Peggy Hollinger at the FT.
Noah Smith on L.A: fire lessons
The best piece I have seen so far, here is one bit:
Basically, the lessons I take away from the horrific L.A. fires are:
- The insurance industry as we know it is in big trouble.
- Climate change is making wildfires worse, but there’s not much we can do about that right now.
- Forest management needs to get a lot more proactive, but is being blocked by regulation.
- Wildfire preparedness is just a lot more important than it used to be.
And this:
Patrick Brown of the Breakthrough Institute estimates that in order to achieve the maximum economic benefit from wildfire suppression, California should be doing almost 4 times as much controlled burning as it currently aims to do, and almost 8 times as much as it’s currently doing. The gains over the last few years are welcome, but also woefully insufficient to the task.
Here is the entire essay. And this guy has a background in fires and forest management, a good piece.
Congestion Tolls versus Congestion Pricing
New York’s new congestion fee appears to be reducing commuting times on key routes (see Tyler and this thread from Michael Ostrovsky). The toll only has two rates, however, on-peak (5 AM to 9 PM on weekdays and 9 AM to 9 PM on weekends) $9 and off-peak ($2.50). I like the way Vitalik Buterin explained a key weakness:
I wish the tolls were dynamic. Price uncertainty is better than time uncertainty (paying $10 more today is fine if you pay $10 less tomorrow, but you can’t compensate being 30 min late for a flight or meeting by being 30 min early to the next one).
Exactly right. Tyler and I make the same point about price controls (ceilings) in Modern Principles. A price ceiling substitutes a time price for a money price. But this isn’t a neutral tradeoff—money prices benefit sellers, while time prices are pure waste (see this video for a fun illustration).
Here in Northern Virginia the toll on I-66 to Washington is dynamic and on-average varies by more than a factor of 6 during peak hours. Everyone complains about congestion pricing when it is first introduced but people get used to it quickly. Albeit in VA we still have the option of paying no-toll which perhaps eases the transition.
The sick leave culture that is German
Germans are the “world champions in sick leave”, according to the head of the country’s biggest insurer, who was criticised for demanding that workers without a doctor’s note are unpaid for their first day off.
With the economy slowing and the welfare system under pressure, Germany can ill afford its average per worker of 20 sick days a year, said Oliver Bäte, the chief executive of Allianz SE. The EU average is eight.
The figure of 20 days, based on research by the health insurer DAK, puts a further dent in Germany’s ailing work ethic reputation. Last April, Christian Lindner, then finance minister, admitted that the French, Italians and other nationalities worked “a lot more than we do”, after OECD data showed Germans put in significantly fewer working hours per year than their EU and British neighbours…
“In countries like Switzerland and Denmark people work a month longer per year on average — with comparable pay,” he pointed out.
Here is more from the Times of London. If you can get through the gate, you will see it is Mexico that is the work ethic country.
Martha
Martha (Netflix): A compelling bio on Martha Stewart. Her divorce from Andrew Stewart happened more than 30 years ago so the intensity of her anger and 
bitterness comes as a surprise. With barely concealed rage, she recounts his affairs and how poorly he treated her. “But didn’t you have an affair before he did?” asks the interviewer. “Oh, that was nothing,” she replies waving it off, “nothing.”
Stewart’s willpower and perfectionism are extraordinary. She becomes the U.S.’s first self-made female billionaire after taking her company public in 1999. Then comes the insider trading case. The amount in question was trivial—she avoided a $45,673 loss by selling her ImClone stock early. Stewart was not an ImClone insider and not guilty of insider trading. However, in a convoluted legal twist, she was charged with attempting to manipulate her own company’s stock price by publicly denying wrongdoing in the ImClone matter. Ultimately, she was convicted of lying to the SEC. It’s worth a slap on the wrist but the lead prosecutor is none other than the sanctiminous James Comey (!) and she gets 5 months in prison.
Despite losing hundreds of millions of dollars and control of her own company, Martha doesn’t give up and in 2015, now in her mid 70s, she creates a new image and a new career starting with, of all things, a shockingly hard-assed roast of Justin Bieber. The Bieber roast leads to a succesful colloboration with Snoop Dogg. Legendary.
Stewart is as compelling a figure as Steve Jobs or Elon Musk. Not entirely likable, perhaps, but undeniably admirable.
Claims about fires?
In 2007 the Sierra Club successfully sued the Forest Service to prevent them from creating a Categorical Exclusion (CE) to NEPA for controlled burns (the technical term is “fuel reduction”). The CE would have allowed the forest service to conduct burns without having to perform a full EIS (the median time for which is 3.5 years). See: caselaw.findlaw.com/court/us-9th-c John Muir project helped to claw back the full scope of Categorial Exclusions from the 2018 Omnibus Bill as well (though some easement did make it through). In 2021 the outgoing Trump BLM was served with the following notice of intent to sue by the Center for Biological Diversity for their fuel reduction plan in the Great Basin: biologicaldiversity.org/programs/publi BLM backed away from the plan after the transition. These are specific cases, but the cumulative outcome is that CA state agencies don’t even try it because they know they’ll be sued.
Some of the latter part is exaggerated, here is o1 pro commentary.
In California it is apparently illegal to price fire insurance according to risk? o1 pro seems a bit off on this question, but I think you can read between the lines.
Which are the best analyses you are seeing?
One early report on congestion pricing in NYC
That is my latest Bloomberg column, here is one bit:
The core version of the plan stipulates a $9 toll for drivers entering Manhattan below and including 60th Street. Implementation is by E-Z Pass, and the tolls can vary in complex ways. But if you don’t cross the line, you don’t pay. So residents below 60th Street are exempt, provided they stay within the zone.
And:
The data do indicate some effective immediate adjustments. Most notably, morning commutes through the major bridges and tunnels into Manhattan have eased. Presumably the tolls have discouraged some drivers whose trips were less important to them, leading to quicker travel times for those drivers willing to pay. Economists typically consider such changes to be an improvement.
Such changes, however, aren’t of much help to native New Yorkers, in particular those living inside the zone. The earliest measurements indicate that traffic within the zone has not eased notably. So far, I would say the biggest beneficiaries of the policy are the wealthier residents of New Jersey and the New York state government, which is now set to take in more revenue.
Whatever you think of those consequences — YMMV, as they say — at least there is now actual data to sift through. You can track it here, and again it is important to stress that these preliminary assessments may change with time.
Many Manhattanites supported the charges on the grounds that they wanted a quieter, cleaner, less congested center city that was more friendly to bicycles and pedestrians. Think of Copenhagen or Amsterdam, if you have ever been. What they may end up getting is a central city more friendly to their cars — and less friendly to outsiders. It remains to be seen if central Manhattan has a path to becoming truly pleasant in the Nordic sense.
I will continue to follow this issue, as new results will be coming in. Of course stiff tolls on those living inside the zone were the correct thing to do. But that is not how politics works.
Should America privatize the postal service?
That is the topic of my latest Bloomberg column, here is one bit:
But Poles did not privatize everything. They generally left water companies and electricity providers in the public sector, for example. This is the second category of privatizations: those that are uncertain in their impact.
Water and electricity are two essential services where there is no easy way to get privatization exactly right. It is simply impractical to have many firms selling the product to a single group of households — not in the same way that, say, many cow farmers can produce and sell cheese. It costs too much to lay the basic piping or wires.
One option is to have a private entity with monopoly privileges but regulated prices. Another is to have a set of “common carrier” wires and allow multiple producers to use the network on regulated terms of access. A third is just to have the government own and run the company.
Involving the private sector may give better incentives for cost reduction as well as innovation, since profit maximization is a strong impetus for those kinds of improvements. The efficiency of the private company, however, is also a source of problems. A private company may be efficient at lobbying the government for cronyist privileges. That may lead to higher prices, overly generous reimbursement for cost increases, tougher barriers to entry, or entrenched technologies that favor the incumbent.
In other words: If embedded in an imperfect system, corporate efficiency is not always a pure virtue.
In the US, privately owned and publicly owned water utilities show, on average, roughly equal performance. Perhaps that is a disappointing result, but it is consistent with the “public choice” theories favored by many free-market economists.
A third kind of privatization is when business adds a layer of activity to a preexisting government function. For instance, some states have “privatized” their Medicaid services by outsourcing Medicaid provision to private health insurers. The Medicaid program has not gone away or been turned over to the private sector — rather, companies have a role in administering the system.
This kind of “layered” privatization, like the second kind of privatization, can work out either for the better or for the worse. One recent study shows this privatization increased the costs of Medicaid significantly without providing offsetting benefits. The private companies have done a good job — for themselves — of extracting more revenue from the system. Yet Medicare Cost Advantage, which creates a private layer of service on top of Medicare, run by insurance companies, does offer significant benefits to those who opt for it.
The lesson here is that talk of “privatization” per se is meaningless without elucidating which kind of privatization is under consideration.
Worth a ponder. Overall I think postal service privatization cannot be too closely tied to crony capitalism if it is going to work.
China fact of the day
China is loosening its visa policy and allowing some travelers to stay in the country for up to 10 days without obtaining the document.
The United States is among the dozens of countries eligible for the more lenient measure, part of a movement to ease restrictions and welcome back foreigners. The National Immigration Administration announced the change earlier this week.
To qualify for a 240-hour visa-free stay, travelers must transit through any of 60 airports, train stations or seaports in 24 provinces or regions, including such major destinations as Beijing, Shanghai and Sichuan…
One stipulation is the same, however. The China stop is technically for a layover, so you will need a reservation for a third country. For example, you can’t fly from New York to Beijing round-trip, but you could fly from New York to Bangkok to Beijing before returning home. Or from New York to Beijing to Bangkok.
“You will need to show your flight itinerary to show which third country you’re going to and that you’re going to leave within 10 days,” Peat said. “But that’s all you have to do.”
Here is the full story.
That is from Sure. From yesterday’s WSJ:
And from the WaPo:
The odds are still against any deal, but this is not impossible either.