Hindsight on 2003

December 27, 2009
New York Times
2003: After the Flood
By Leon Wieseltier

Public life in America has never been gracious or rational, but sometime around 2003 we entered a new era of volatility and virulence. The causes were many. Foremost among them, of course, was the war in Iraq, an adventure that was justified mendaciously and executed incompetently, but may finally introduce an open and self-governing society into the Arab world and confer the blessing of political liberty upon the Shiites, the Sunnis and — who cannot rejoice over this? — the Kurds.

After “shock and awe,” I will never again be shocked and awed; but one’s feelings about the origins of the war have no bearing upon one’s analysis of its outcome. And after the extreme action came the extreme reaction. George W. Bush espoused the spread of freedom as an objective of American foreign policy, so many of his critics hardened their hearts toward the tyrannized peoples of the world and decided that democratization was another form of imperialism and that the fault for our mistakes lay in our moral vocabulary. “Realism” became the slogan of otherwise sensitive souls. Back and forth the debate went, more and more reflexively, more and more soaked in contempt, in a process of Manicheanization (forgive the ugly word, but it describes an ugly thing) that is not yet done.

A few months after the invasion President Bush signed into law a vast tax cut, thereby codifying a conception of political democracy that made room for economic (and for its influence, political) oligarchy. The implications of the tax cut (along with its predecessor two years earlier) were not merely economic..........

Heathcare Cost-Quality Comparisons

(...but oddly enough, the debate continues (if you can call it that....)

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Faith in What?

December 12, 2009

New York Times

Paranormal Flexibility

By Charles Blow

The Pew Forum on Religion and Public Life released a report on Wednesday that is bound to stir conversation about the increasingly complicated cacophony of spirituality in America — a mash-up of traditional faiths, fantasy and mythology.

Entitled “Many Americans Mix Multiple Faiths,” the report points out that many Americans are now choosing to “blend Christianity with Eastern or New Age beliefs” and that “sizable minorities of all major U.S. religious groups” said that they have had supernatural experiences, like encountering ghosts.

For the first time in 47 years of polling, the number of Americans who said that they have had a religious or mystical experience, which the question defined as a “moment of sudden religious insight or awakening,” was greater than those who said that they had not.

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Interesting compilation of 2009 news topics arranged by size = frequency of new item

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A Dangerous Dysfunction

Citing a dangerous trend, Nobel Prizer-winner Paul Krugman asks the question, "How DO we deal with major crisis at a time of unprecedented congressional dysfunction?

December 21, 2009
New York Times
A Dangerous Dysfunction
By Paul Krugman

Unless some legislator pulls off a last-minute double-cross, health care reform will pass the Senate this week. Count me among those who consider this an awesome achievement. It’s a seriously flawed bill, we’ll spend years if not decades fixing it, but it’s nonetheless a huge step forward.

It was, however, a close-run thing. And the fact that it was such a close thing shows that the Senate — and, therefore, the U.S. government as a whole — has become ominously dysfunctional.

After all, Democrats won big last year, running on a platform that put health reform front and center. In any other advanced democracy this would have given them the mandate and the ability to make major changes. But the need for 60 votes to cut off Senate debate and end a filibuster — a requirement that appears nowhere in the Constitution, but is simply a self-imposed rule — turned what should have been a straightforward piece of legislating into a nail-biter. And it gave a handful of wavering senators extraordinary power to shape the bill.

Now consider what lies ahead. We need fundamental financial reform. We need to deal with climate change. We need to deal with our long-run budget deficit. What are the chances that we can do all that — or, I’m tempted to say, any of it — if doing anything requires 60 votes in a deeply polarized Senate?

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Bah, Humbug! and an Orgy of Destruction

An interesting take about the real value of giving and why it may not be good to give OR to receive.

NY Times
About That Sweater You Got for Christmas

In The Boston Globe, Joel Waldfogel presents the economic argument for never gifting again.

Is holiday spending even good for the economy? The surprising answer is somewhere between maybe and not really. The problem is that gift giving is a very sloppy method for matching stuff with people. As an economist, I look at the estimated $65 billion in holiday spending coming this year, and I see an orgy of value destruction.

To understand this, consider that every transaction in the economy has two parties, a seller and a buyer. Sellers benefit from a transaction by getting a price that covers their costs and delivers some surplus in the form of profit. Similarly, the sellers’ employees and suppliers get some surplus that brings them to work chipper. In normal — nongift — transactions, buyers also get some surplus. They see an item for, say, $50 and only buy it if it’s worth at least $50 to them. This surplus is a big deal: When your child is crying with an ear infection, you’d gladly pay hundreds or perhaps even thousands of dollars for a cure. Antibiotics, available for a few dollars, provide enormous surplus for buyers.

Compare this to what happens when you give a gift: When you spend $50 on me, you’re operating at significant disadvantage. You don’t know what I like. I might not have been willing to pay anything for the item you purchase for me with $50. While $50 in spending normally produces at least $50 worth of satisfaction, there’s no guarantee that $50 in gift spending will produce nearly as much satisfaction for the recipient. And if you buy me something worth nothing to me, you have destroyed at least $50 worth of value. You may as well have lit that sweater on fire.

[ Read NY Times article ]

[ Read original article by Waldfogel ]

Misery Does Not Love Company

Here is a clever index that combines unemployment with deficit as a percent of GDP.

New York Times
December 19, 2009
OFF THE CHARTS
These Days, Countries in Misery Have Lots of Company
By FLOYD NORRIS

SOMETIMES economies can be too good.

That is one lesson from the history of a new “misery index,” created by Pierre Cailleteau, an economist and sovereign risk analyst at Moody’s.

The index adds together a country’s budget deficit, as a percentage of gross domestic product, and its unemployment rate. It captures the current conundrum for many countries: their economies need stimulus, but their budgets may not be able to afford it.

The unfortunate leader in that misery index among the countries cited by Moody’s is Spain, with an index of 30, thanks to an unemployment rate of 20 percent and a deficit of 10 percent of G.D.P. The figures are Moody’s estimates for 2010.

While Spain is extreme, the indexes are high for many countries, with the United States and Britain both expected to score over 20 next year.

In 2005, as can be seen in the accompanying graphic featuring 13 European countries and the United States and Iceland, the two countries with the highest misery indexes were Hungary and Greece, at 15.1, or just more than half Spain’s current figure. In 2010, only three countries are expected to be lower than 15.1 — the Czech Republic, Germany and Italy.

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Who Is Preparing For the Future?

This article is interesting by showing that the U.S. risks under-performance in generating college graduates, not for lack of desire or effort on the part of students, but because of a lack of opportunity we provide.  While our European peers invest in their future economies by paying full student college costs, the U.S. does not.  While our European peers, in many cases, prohibit students from holding jobs while in school, our approach generally requires it.  Which approach do you suppose is more likely to produce more graduates?
- FH

College Dropouts Cite Low Money and High Stress
By Tamar Lewin
December 9, 2009
NYTimes

Most dropouts leave college because they have trouble going to school while working to support themselves, according to a report released Wednesday by Public Agenda, a nonpartisan research group.
The report, “With Their Whole Lives Ahead of Them,” was based on a recent survey of more than 600 individuals aged 22 to 30, comparing those who started a college education but did not complete it with those who received a degree or certificate from a two- or four-year institution.

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2009 Corruption Perceptions Index

The Corruption Perceptions Index (CPI) compiled annually by Transparency International, measures the perceived level of public-sector corruption in 180 countries and territories around the world. The CPI is a "survey of surveys", based on 13 different expert and business surveys.

 2009 CPI RANKINGS

          1     New Zealand

          2     Denmark

          3     Singapore

          4     Sweden

          5     Switzerland

          6     Finland

          7     Netherlands

          8     Australia

          9     Canada

          10    Iceland

          11    Norway

          12    Hong Kong

          13    Luxembourg

          14    Germany

          15    Ireland

          16    Austria

          17    Japan

          18    United Kingdom

          19    United States

          20    Barbados

[ See the Complete 2009 List ]

 PAST U.S. RANKINGS
          2009 - 19  (between United Kingdom and Barbados)
          2008 - 18  (between Japan and St. Lucia)
          2007 - 20  (between France and Belgium)
          2006 - 20  (between Chile and Spain)
          2005 - 17  (between Germany and France)
          2004 - 17  (between Ireland and Chile)
          2003 - 17  (between Ireland and Chile)
          2002 - 16  (between Austria and Chile)
          2001 - 16  (between Israel and Chile)
          2000 - 14  (between Australia and Austria)

An Innovation Agenda

New York Times

December 8, 2009
By David Brooks

The economy seems to be stabilizing, and this has prompted a shift in the public mood. Raw fear has given way to anxiety that the recovery will be feeble and drab. Companies are hoarding cash. Banks aren’t lending to small businesses. Private research spending is drifting downward.

People are asking anxious questions about America’s future. Will it take years before the animal spirits revive? Can the economy rebalance so that it relies less on consumption and debt and more on innovation and export? Have we entered a period of relative decline?

The first thing to say is, let’s not get carried away with the malaise. The U.S. remains the world’s most competitive economy, the leader in information technology, biotechnology and nearly every cutting-edge sector.

The American model remains an impressive growth engine, even allowing for the debt-fueled bubble. The U.S. economy grew by 63 percent between 1991 and 2009, compared with 35 percent for France, 22 percent for Germany and 16 percent for Japan over the same period. In 1975, the U.S. accounted for 26.3 percent of world G.D.P. Today, after the rise of the Asian tigers, the U.S. actually accounts for a slightly higher share of world output: 26.7 percent.

(Nobel Prize Winners per Capita)

The U.S. has its problems, but Americans would be crazy to trade their problems with those of any other large nation.

Moreover, there’s a straightforward way to revive innovation. In an unfairly neglected white paper on the subject, President Obama’s National Economic Council argued that the U.S. should not be in the industrial policy business. Governments that try to pick winners “too often end up wasting resources and stifling rather than promoting innovation.” But there are several things the government can do to improve the economic ecology. If you begin with that framework, you can quickly come up with a bipartisan innovation agenda.

First,......

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Advice From Grandma

New York Times
November 22, 2009

By Tom Friedman

President Obama’s visit to China this week inevitably invites comparisons between the world’s two leading powers. You know what they say: Britain owned the 19th century, America owned the 20th century, and, it’s all but certain that China will own the 21st century. Maybe, but I’m not ready to cede the 21st century to China just yet.

Why not? It has to do with the fact that we are moving into a hyperintegrated world in which all aspects of production — raw materials, design, manufacturing, distribution, fulfillment, financing and branding — have become commodities that can be accessed from anywhere by anyone. But there are still two really important things that can’t be commoditized. Fortunately, America still has one of them: imagination.

What your citizens imagine now matters more than ever because they can act on their own imaginations farther, faster, deeper and cheaper than ever before — as individuals. In such a world, societies that can nurture people with the ability to imagine and spin off new ideas will thrive. The Apple iPod may be made in China, but it was dreamed up in America, and that’s where most of the profits go. America — with its open, free, no-limits, immigrant-friendly society — is still the world’s greatest dream machine.

Who would cede a century in which imagination will have such a high value to an authoritarian society that controls its Internet and jails political prisoners? Remember what Grandma used to say: Never cede a century to a country that censors Google.

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Afghanistan Strategy: Obama's Options

New Yorker

BAD CHOICES

by Hendrik Hertzberg

DECEMBER 14, 2009

There are no good options for the United States in Afghanistan. That has been the conventional wisdom for some years now, and this time the conventional wisdom—the reigning cliché—happens to be true. President Obama did not pretend otherwise in his address at West Point last week. His grimly businesslike speech was a gritty, almost masochistic exercise in the taking of responsibility. What he had to say did not please everyone; indeed, it pleased no one. Given the situation bequeathed to him and to the nation, pleasure was not an option. His speech was a sombre appeal to reason, not a rousing call to arms. If his argument was less than fully persuasive, that was in the nature of the choices before him. There is no such thing as an airtight argument for a bad choice—not if the argument is made with a modicum of honesty.

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