Category: Current Affairs

Mobile money in Somaliland

Since its launch in 2009, Zaad, which means “to grow” in Somali, has swelled to 850,000 users—roughly one-quarter of the nation’s population. Locals use the platform on battered old cellphones and, less frequently, on smartphones and a designated app.

Without mobile money, cash has a hard time flowing through the country. No commercial banks really operate here, and hauling physical cash over rough roads is time-consuming. Companies use Zaad for their monthly payrolls, instead of handing wads of cash to their employees.

Today, each user on average makes 35 Zaad transactions a month, and Somalilanders say they try to use Zaad for most transactions. A rudimentary texting system makes it easy even for the many Somalilanders who are illiterate.

It seems to be a kind of free banking:

Apart from phone-to-phone transactions, users can top up their mobile wallets by handing cash—shillings [the Somaliland currency] or dollars—over to an official agent, who is often a single person in a shack on the side of the road.

“This service has been a driving force for the smooth operation of our economy,” said Abdikarim Dil, Telesom’s chief executive.

Since mobile-money services aren’t regulated by the central bank, they aren’t subject to the restrictions that traditional banks face, including requirements meant to block terror financing.

Here is the story (WSJ) by the consistently interesting Matina Stevis-Gridneff (there are few journalists better to read these days), via the excellent Samir Varma.

Informational autocrats

That is a new and important paper by Sergei M. Guriev and Daniel Treisman, here is the abstract:

In recent decades, dictatorships based on mass repression have largely given way to a new model based on the manipulation of information. Instead of terrorizing citizens into submission, “informational autocrats” artificially boost their popularity by convincing the public they are competent. To do so, they use propaganda and silence informed members of the elite by co-optation or censorship. Using several sources–including a newly created dataset of authoritarian control techniques–we document a range of trends in recent autocracies that fit the theory: a decline in violence, efforts to conceal state repression, rejection of official ideologies, imitation of democracy, a perceptions gap between masses and elite, and the adoption by leaders of a rhetoric of performance rather than one aimed at inspiring fear.

Again, here is my related Bloomberg column from June 18.

And this story is a metaphor for what, what would Baudrillard say?

The US Postal Service has been ordered to pay $3.5m (£2.6m) for copyright infringement after mistakenly using the wrong Statue of Liberty on a stamp.

The Postal Service used the image of sculptor Robert Davidson’s Las Vegas replica on a 2010 stamp design instead of the New York original.

Mr Davidson called his replica “sexier”, and a judge ruled that the statues were indeed “unmistakably” different.

The Postal Service has not commented on the verdict.

In his original 2013 complaint, Mr Davidson said his work gave the American icon a more “fresh-faced, sultry and even sexier” look, US media reported.

Federal Judge Eric Bruggink ruled on 29 June that Mr Davidson was entitled to a share of the US Postal Service’s (USPS) earnings from the stamp.

USPS sold 4.9bn stamps with the Vegas Lady Liberty image, amounting to profits of $70m before it was retired in 2014, according to court documents.

Here is the link, via Michael Rosenwald, who now has a new history podcast series.

How well is Germany dealing with the migration crisis?

Anna Sauerbrey offers an optimistic perspective on the actual outcomes (NYT):

For all its shortcomings, Europe has actually managed the crisis quite well, in practice. Its external borders are stronger, and better policed and managed. Cooperation with Libya’s border-patrol militias, however ethically suspect, has brought down the numbers crossing from that country to Italy. So has the agreement with Turkey to host migrants in return for financial aid. In 2015, more than 450,000 pleas for asylum were filed; in 2016, about 745,000. So far this year, there have been only 68,000.

According to figures by the German Federal Agency for Migration and Refugees, only about a quarter of those applying for asylum in Germany in 2018 are already registered in another European country. This means that the C.S.U. risked blowing up the government to push through a regulation that applies to about 100 individuals a day, scattered over all of Germany’s points of entry.

But she is pessimistic about the politics:

Whatever respite Germany may have gained this week is offset, and then some, by the arrival of a new and frightening political dynamic. Mr. Seehofer succeeded by going nuclear; chances are, he won’t be the last. The politics of fear and menace may be here to stay, undermining the foundations of democracy. In sound democracies, policies are the results of compromise between parties representing a majority of the voters. Through the politics of artificial crisis, minorities take the system hostage. They create policies redeeming fictional problems for fictional majorities.

Recommended, this is one of the better takes on the problem I have seen.

Pay more attention to Congress

That is the topic of my latest Bloomberg column.  Here is one excerpt:

Americans’ growing preoccupation with the culture wars has meant a greater focus on the two branches of government where these often symbolic battles are most fought and noticed: the presidency and the Supreme Court. A byproduct is the relative neglect of the third branch, Congress.

This has led to poor governance. Not long ago, the Republicans passed a tax reform bill, in part because they thought voters would like it. Six months later, the bill is losing popularity. The benefits of the bill are not generally transparent, the economy is doing fine anyway, and even diehard Republicans don’t seem so excited.

If you think that exercising the “power of the purse” is one of the most fundamental roles of Congress, this reflects relative voter indifference toward the legislative branch. The incentives are weak for either party to try again to improve the U.S. tax system, and so it will remain distortive and overly complex.

…I would prefer to see the electorate give up some of its current fascination with the Supreme Court and the presidency and take a stronger interest in Congress. For one thing, a change of focus might encourage Congress to check the powers of the president when it comes to trade, foreign policy and immigration.

There is much more at the link.  And Peter Suderman covers related themes (NYT).

The culture that will be Danish Plato’s Republic show them Babette’s Feast?

When Rokhaia Naassan gives birth in the coming days, she and her baby boy will enter a new category in the eyes of Danish law. Because she lives in a low-income immigrant neighborhood described by the government as a “ghetto,” Rokhaia will be what the Danish newspapers call a “ghetto parent” and he will be a “ghetto child.”

Starting at the age of 1, “ghetto children” must be separated from their families for at least 25 hours a week, not including nap time, for mandatory instruction in “Danish values,” including the traditions of Christmas and Easter, and Danish language. Noncompliance could result in a stoppage of welfare payments. Other Danish citizens are free to choose whether to enroll children in preschool up to the age of six.

Denmark’s government is introducing a new set of laws to regulate life in 25 low-income and heavily Muslim enclaves, saying that if families there do not willingly merge into the country’s mainstream, they should be compelled.

That is from Ellen Barry and Martin Selsoe Sorensen at the NYT, interesting throughout.  It seems pretty clear that “culture wars” — in various forms — are the big political issue for some time to come.

Is it now common knowledge that the value of international political friends is dwindling?

What makes Mr Salvini’s threat to the EU’s established order so potent is his fearlessness. He is the first modern Italian politician without an emotional need to be among friends in Davos or Brussels. And while the more experienced EU leaders managed to ensnare the relatively inexperienced Mr Conte, the political reality is that Mr Salvini can pull the plug on the coalition at any time. He will probably wait until after next year’s European elections.

That is from Wolfgang Münchauat the FT.

Civility in politics queries

Gregory I. emails me:

  • Can being “uncivil” be useful for advancing aims we should agree with as moral in contemporary America? Elsewhere or “else-when” perhaps?
  • If yes, then where and how to be “uncivil” effectively?
  • Is engaging in aggressive or what can be read as aggressive social media posting sometimes good, contrary to what we’re usually counseled? (“Aggressive” here not including threats, but stating views in forthright ways with facts, arguments and yes even possibly profanity).
  • Could more exposure to “uncivil” behavior be or be made beneficial overall, primarily by making us all realize we should be more suspicious of our feelings of offense? 
  • Have “political correctness” and what Cass Sunstein called “patriotic correctness” (thank you for this article recommendation on MR) really moved what should be in civil discourse into conversations that can now almost always be counted on being characterized as “uncivil” and thus require us to be rude to address them?

I’ll take them by number.

#1: In the past, not being civil has at times led to the eventual de-platforming of disliked adversaries.  For instance, the tactics of 1960s radicals did indeed draw the attention of the American public to various norms, which eventually the American public decided to find mostly unacceptable.  It is much harder today to be a mainstream representative of racism, outright chauvinism, the Vietnam War, napalm, and so on, with some obvious exceptions.  Not all of the opponents of slavery were civil either, at least not always.

But today?  We’ve already seen big swings toward Trumpism and other forms of backlash, and many of those forces are courting incivility as a noxious brew, fit for their recipes of divisiveness.  And the Left is picking more issues that, whatever you think of them, don’t have as much upside with the American public, such as say bathrooms in North Carolina or the abolition of all profit.  The Left is a lot “less cool” than it likes to think, which militates in favor of civility, if for no other than tactical reasons.  Plus civility is a virtue in its own right, at least at the relevant margin.

#2: If you are looking to be uncivil, look for an issue where history is clearly on your side (predictively as well as normatively), and to that issue devote uncivil people who aren’t much good for anything else, as these days reputations are more permanent than before.  Pick issues that just aren’t getting good attention at all, or in other words shy away from the hot button items in your Twitter feed.  Your choice should seem counterintuitive to a fair number of the people you know, including those on your side.

#3: Social media are almost the worst possible venue for being uncivil.  It’s like pissing into the ocean, and furthermore you often encourage a stronger reaction from the other side.  “Mobilizing a posse” on social media may or may not be effective, but I view that as distinct from being uncivil per se.  Being pointed and specific is often the best way to drum up the posse, and in turn some of the posse members, for better or worse, will end up being uncivil.  If you are reading MR in the first place, very likely there is a better role for you in all of this than being a marginal, uncivil posse member.  Calling for uncivility is in a fundamental way expressing your own low expectations for those you are advising.

But the worst?  Driving a public figure out of a restaurant may seem like fun, but in fact they don’t know at which point you are planning on stopping.  You’re coming pretty close to threatening them with violent aggression, and there are very very few situations where such actions will end up improving the world as a whole.  There is no better venue for politeness than commerce.

#4: When people are uncivil, and organized into groups too, they are stupider.  You too.  That is perhaps the biggest reason to avoid uncivility, no matter how much you think your chosen exception will lead to beneficial outcomes.  Can you not find beneficial paths of influence which do not involve making people stupider?  If not, what does that say about you?

#5: Both the left and the right are major offenders when it comes to both incivility and political correctness in the bad sense.  I don’t quite follow every part of this question, but in closing I’ll suggest some simple rules of thumb for proper civility:

a. Don’t say anything on-line that you wouldn’t say to a person face-to-face.  (And I really do hope this constrains you.)

b. Don’t ever think that an analogy with Nazis justifies your behavior, even if it is your behavior toward…Nazis.

c. Don’t lose your cool.  Always trying to sound more intelligent than those you are arguing against is not a terrible starting point.

d. Don’t deploy what I call “loose adjectives,” the most common one being “stupid,” another being “dangerous.”  You probably write with too many adjectives anyway.

e. Criticize the idea, not the person.  Don’t presume you have such a wonderful sense of the motives of those you disagree with.

f. Learn how to learn from those who offend you.

g. Reexamine your writings and try to roughly measure the ratio of positive sentiments to negative sentiments.  If that number is not ten to one or higher, reassess what you are doing.

The important thinkers of the future will be religious thinkers, installment #1637

Alexandria Ocasio-Cortez on her Catholic faith and the urgency of a criminal justice reform

From her:

By nature, a society that forgives and rehabilitates its people is a society that forgives and transforms itself. That takes a radical kind of love, a secret of which is given in the Lord’s Prayer: Forgive us our trespasses, as we forgive those who trespass against us.

And let us not forget the guiding principle of “the least among us” found in Matthew: that we are compelled to care for the hungry, thirsty, homeless, naked, sick and, yes—the imprisoned.

For the pointer I thank Nick C.

The resurgence of China pessimism

Agree or not, it has returned.  Here is David G. Landry from Foreign Policy:

A recent Foreign Policy piece points out that individuals and firms have made up an increasingly large share of China’s total foreign asset purchases in recent years, from 12 percent in 2011 to nearly 40 percent in 2017, as the People’s Bank of China’s share of total foreign direct investment shrank. It turns out that these new investors are poor asset judges. As their share of China’s portfolio grew, its aggregate returns dwindled. In 2016, the total return on Chinese foreign investment was 0.4 percent, which is dramatically lower than the 4 percent earned by foreign reserves.

And Gabriel Wildau at the FT:

…fixed-asset investment — a core driver of Chinese growth that includes spending on new buildings, machinery and infrastructure — grew at its slowest annual pace since at least 1995 through the first five months of this year. Retail sales, an indicator of consumer demand, also increased at their slowest pace since 2003. China’s currency, meanwhile, hit a six-month low against the dollar this week, while the Shanghai Composite index, the country’s key stock market index, dropped 10 per cent in June. Last weekend, the People’s Bank of China cut the reserve requirement ratio, the amount of cash that banks must hold in reserve at the central bank, freeing up Rmb700bn ($106bn) for new lending and investment. The PBoC insists that monetary policy remains “prudent” but the cut to the RRR is the latest in a series of “ subtle easing” moves in recent months, including other forms of cash injection into the financial system.

…much of the recent slowdown is perceived to be the result of Beijing’s policies. A sharp fall in infrastructure spending by local governments led the drop in fixed-asset investment, as the central government reined in runaway borrowing by local governments.

One way or another, you will be hearing more about this.

Tyrone on polarization, polarization is good polarization is gone

For a few years now, a number of you have been asking me where Tyrone, my evil twin brother, has gone.  The truth is a sad one: I have had to put him away, because in these especially fractious times his particular brand of malfeasance is less funny than before.  His wisecracks cut too close to the bone, and so many matters on MR have become more somber — no more dating advice either!

Nonetheless, is there a stable equilibrium to be had?  If Tyrone receives little or no surplus, he becomes all the more…unruly.  And so, risking punishment, he snuck out this message to Alex T., and I agreed to print it, for fear that further transmissions would occur (I do respect the Laffer Curve, and at an optimal punishment level I still can get away with some editing of his words).  Here is the ridiculous nonsense that Tyrone reports this time around, and you can see he is gaming the message to encourage his own liberation:

Tyrone:

Tyler and his media friends keep on reporting that political polarization has gone up.  But that’s wrong: it has radically fallen.  Just look at economic issues.  As of 2011, many Republicans were for some ostensible Tea Party version of economic liberty, or at least they pretended to be.  Now both parties are very bad on economic issues.  For instance, you’ll find protectionist ideas all over the political spectrum.

The wonderful thing about polarization was this: it forced people who didn’t really believe in economic liberty to act as if they did.  The resulting gridlock was better than letting people’s real instincts come out.

Trump of course used to be a Democrat, and our president himself draws bad ideas from both sides of the aisle.  Which party again was campaigning against NAFTA?  What is they say?: Look into trade as an issue. and you see a man’s soul.

What about abortion, that (supposedly) most polarizing of issues?  As Matt Yglesias noted:

About a third of Republicans are pro-choice and about a third of Democrats are pro-life.

Yes that is a real difference, but it hardly sounds like two worldviews, standing irrevocably cleaved and apart.  And a lot of those positions are in actuality fairly nuanced in their details.

According to Larry M. Bartels, about a quarter of the Democrats on cultural issues stand closer to the Republican party than to the average position of their own party.  And talking through the poll data on Christian black women — often Democrats but on average not exactly “progressives” — would require a lengthy missive of its own.

Nor do I see either party speaking up for free speech on campus, except in the most opportunistic terms.  Republicans are pushing bills to crack down on left-wing protests against conservative talks, while the left is trying to limit those same conservative talks.  Distinction without a difference, your Tyrone says, and he should know.  I yearn for the “good ol’ days” when the New Left was for free speech and the conservatives were largely more skeptical.  At least someone was for it, and in an oppositional kind of way.

Contrary to standard reports, the urban-rural divide has not really been growing.

Is the view that Asian-Americans have the wrong personality a Steve Bannon idea, or is it a Harvard idea?

Trump wants to change various governmental rules and norms to cement his own power, such as dumping the filibuster and perhaps reinterpreting the emoluments clause and expanding executive authority of trade and immigration.  Democrats talk of dumping the electoral college or, right now, bringing back FDR’s “court-packing” plan.

It is widely granted that traditional political parties are blowing up (NYT).  Plenty of people wanted Trump and Sanders to run together as a ticket.  And in just about every European country, immigration and terrorism poll as the major issues, neither of those being the traditional territory for previous polarization.

The thing is, when people really believe in something, they end up polarized.  Of course they don’t agree on everything, and so polarization ensues along the dimensions of difference.  Less polarization is a symptom of believing in less more generally, and don’t confuse the resulting obnoxious fractiousness with greater polarization.  Instead, it is a sign that ideas are no longer ruling the day.  And indeed, religious participation is down in America and the secularization thesis is finally beginning to bite.  Polarization, however unpleasant it may have felt at the time, meant order.

Tyler again:

What can I say people? Tyrone now opposed to obnoxious fractiousness?  In spite of his periodically reasonable tone this time around, don’t believe it for a moment — he hasn’t changed.  Nor is polarization down.  Polarization between Tyler and Tyrone clearly has gone up as of late, thus his enforced silence.  Tyler believes in free speech, and he knows that freedom from harm for others requires the silence of Tyrone.  And so is freedom realized, and to thunderous applause.

Who knows when you will hear from Tyrone again?  Maybe I’ll let him do a restaurant review instead.

Alexandria Ocasio-Cortez

Ocasio-Cortez is a member of the Democratic Socialists of America, a leftist organization that has helped buoy the campaigns of dozens of outsider candidates running on very progressive platforms in places where Democrats like Crowley are used to winning—handily. Some of Ocasio-Cortez’s positions include fighting for Medicare for All and a federal jobs guarantee, abolishing ICE, and insisting on much more severe policing of luxury real estate development (part of the reason she has refused corporate donations).

Tuition-free college for all seems to be another part of her stance.  Here is the full Vogue profile from a few days ago. She was working as a waitress while running and still paying off her student loans (NYT); her BU degree was in economics.

As Jeremy McClellan indicated: “Tonight kinda makes me wonder if the 2020 Democratic presidential nominee is someone who isn’t really on the radar yet.”  And what should you infer from this picture?

Immigration policy is hard

That is the title and topic of my latest Bloomberg column, here is the central analytical point, one that people are not so keen on discussing right now:

If we apply a simple economic model to the migration calculus, for the potential migrant, the expected return of trying to cross the border must exceed the overall return of staying at home. So if we improve conditions for those arriving from, say, Guatemala, more will try to come. That will result in higher prices to the border-crossing coyotes, more coercion and predation on the Mexican route along the way, bad treatment or lower wages in the U.S., or other compensating negative factors.

Basically, more and more people will leave Guatemala until the costs of leaving and staying are roughly equal.

This explains why even desirable changes to immigration policy may not have their intended effect. Improving how migrants are treated by the U.S. legal system, for example, may help those who reach the U.S., but it won’t be of much help to migrants as a group. We should still improve the immigration process, because parent-child separation is immoral, dehumanizing and, not incidentally, terrible publicity. Still, the costs of trying to migrate, and possibly failing, will negate a lot of the gains of those who make it.

I set out my proposed immigration compromise, and I argue also that current asylum law needs to be rethought, a topic to which I may return soon.

The slippery slope

Members of White House press secretary Sarah Sanders’ family were followed by the owner of the restaurant they were kicked out of over the weekend after they settled an alternative place to dine.

During an interview Monday on Fox News host Laura Ingraham’s radio show, former Arkansas Gov. Mike Huckabee, the father of the press secretary, said Stephanie Wilkinson, owner of the Red Hen restaurant in Lexington, Va., tailed Sanders’ in-laws across the street and along with a number of other people protested their presence at the restaurant to which they had migrated.

Sanders and her husband were said to not be present at the second restaurant.

Here is more.  I still believe in freedom of association in matters such as this, but I also think you should, as a personal decision, serve Republicans at the lunch counter.  This is what starts to happen when you don’t..  Civility remains underrated, and is this a good time to apply just a little behavioral economics to how the interactions might escalate.

Via Megan.