Tuesday, October 28, 2008

No Ordinary Woman - Op-Ed - NYTimes.com

In 1977, Bella Abzug, the former congresswoman and outspoken feminist, said, “Our struggle today is not to have a female Einstein get appointed as an assistant professor. It is for a woman schlemiel to get as quickly promoted as a male schlemiel.”

In other words: women will truly have arrived when the most mediocre among us will be able to do just as well as the most mediocre of men.

By this standard, the watershed event for women this year was not Hillary Clinton’s near ascendancy to the top of the Democratic ticket, but Sarah Palin’s nomination as the Republicans’ No. 2.

For Clinton was a lifelong overachiever, a star in a generational vanguard who clearly took to heart the maxim that women “must do twice as well as men to be thought half as good,” and in so doing divorced herself from the world of the merely average. In that, she was not unlike Barack Obama — taxed by his race to be twice as reassuring, twice as un-angry, twice as presidential as any white candidate.

Mediocrity, after all, is the privilege of those who have arrived.
Read NYT Op-Extra Column by Judith Warner

In Defense of White Americans - NYTimes.com

But the other, less noticed lesson of the year has to do with the white people the McCain campaign has been pandering to. As we saw first in the Democratic primary results and see now in the widespread revulsion at the McCain-Palin tactics, white Americans are not remotely the bigots the G.O.P. would have us believe. Just because a campaign trades in racism doesn’t mean that the country is racist. It’s past time to come to the unfairly maligned white America’s defense. Such human nuances are lost on conservative warriors of the Allen-McCain-Palin ilk. They see all Americans as only white or black, as either us or them. The dirty little secret of such divisive politicians has always been that their rage toward the Others is exceeded only by their cynical conviction that Real Americans are a benighted bunch of easily manipulated bigots. This seems to be the election year when voters in most of our myriad Americas are figuring that out.
Read Frank Rich Op-Ed Column @ NYTimes.com

The Behavioral Revolution: the all important question of perception, rather than self-interest

Roughly speaking, there are four steps to every decision. First, you perceive a situation. Then you think of possible courses of action. Then you calculate which course is in your best interest. Then you take the action. Over the past few centuries, public policy analysts have assumed that step three is the most important. Economic models and entire social science disciplines are premised on the assumption that people are mostly engaged in rationally calculating and maximizing their self-interest.

But during this financial crisis, that way of thinking has failed spectacularly. As Alan Greenspan noted in his Congressional testimony last week, he was “shocked” that markets did not work as anticipated. “I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms.”

So perhaps this will be the moment when we alter our view of decision-making. Perhaps this will be the moment when we shift our focus from step three, rational calculation, to step one, perception.
Read the full article [Op-Ed Column by David Brooks, making references to "Black Swan", "Fooled by Randomness" by Taleb] @ NYTimes.com

Saturday, October 25, 2008

Princeton University Economic Department Panel Discussion on the Wall Street Crisis

Princeton economists review recent events on Wall Street and assess the implications for the economy and public policy.
Watch the Discussion at YouTube

Dani Rodrik: The Next Stage of the Crisis

Now that advanced countries have bailed out and guaranteed vast portions of their financial systems, there is a much greater demarcation between "safe" and "risky" assets, with emerging markets in the second category. The flight to safety is already taking a huge toll on them. And the worst is likely to come when domestic residents join en masse in the capital flight.

All of this means that governments in these economies will be under pressure to mimic the public guarantees and bailouts that we have seen in the U.S. and the EU. But there is a big difference. Emerging markets for the most part have weak and fragile fiscal systems, and the magnitude of the potential run is huge relative even to the large mountains of reserves that many of them have built up. Socialization of private liabilities may enhance confidence in the rich countries; it will likely magnify the run in emerging markets. So we are talking about economic collapses that could be significantly bigger than what the rich countries will experience. And this time developing countries can legitimately say: it wasn't our fault!
Read the post @ Dani Rodrik's weblog

International Political Economy Zone: Europe, Asia Ask China to Help Save the World

International Political Economy Zone: Europe, Asia Ask China to Help Save the World

International Political Economy Zone: The Kinder, Gentler IMF? Easing Conditionalities

International Political Economy Zone: The Kinder, Gentler IMF? Easing Conditionalities

International Political Economy Zone: Conservative Thinktanks Selling the Unsaleable

International Political Economy Zone: Conservative Thinktanks Selling the Unsaleable

Social Security Debate in the U.S. 2005 - The attempt to privatise it

October 23, 2008, 4:10 pm
Social Security: we have always been at war with Eastasia
Maybe the fact that John McCain is peddling a completely false version of the great 2005 debate over Social Security doesn’t mean much if you weren’t involved in that debate. But I was, and it’s just bizarre.
One point Josh Marshall doesn’t emphasize is the relentless dishonesty with which the Bush administration made its case. It claimed, falsely, that the system faced an imminent crisis; that privatization offered something for nothing; that Social Security is bad for African-Americans; that each year privatization is delayed costs $600 billion; and on and on.
But even in the middle of all that, it never occurred to me that a future presidential candidate would invent out of thin air a completely false story about how the privatization push failed.
http://krugman.blogs.nytimes.com/2008/10/23/social-security-we-have-always-been-at-war-with-eastasia/
Read blog entry at http://krugman.blogs.nytimes.com/

New York Times Endorsements Through the Ages - Interactive Graphic - NYTimes.com

New York Times Endorsements Through the Ages - Interactive Graphic - NYTimes.com

Tuesday, October 21, 2008

Wherefore "Shrillblog"?

I guess it started, I think, with that extremely strange and not-very-analytical Svengali of the Bush Social Security reform plan, Peter Ferrara, who wrote back in 2001 about "the fierce, shrill, and unreasoned denunciations of allowing workers the freedom to choose a personal-account option for Social Security may impress the gullible... and denounced ..the highly irascible Paul Krugman...

That was, I think, the start of a very peculiar meme: a piling-on of critics of Bush--especially of Paul Krugman--whose sole criticism was that he was "shrill." The critique was neither that he was a bad economist, nor that his accusations that the Bush administration was lying about a whole bunch of stuff were incorrect (indeed, one of Paul's most vicious critics, Andrew Sullivan, gloried in the fact that Bush was lying about his tax cut. See http://delong.typepad.com/sdj/2005/05/yes_andrew_sull.html). So if you wanted to attack Krugman, but could not attack him because his analytics were right, and could not attack him because his accusations of Bush administration dishonesty were correct, what can you do? Well, a bunch of right-wingers led, IIRC, by Mickey Kaus and Andrew Sullivan found a way.

In this context, given that criticisms of George W. Bush and the malevolence, mendacity, incompetence and disconnection from reality of him and his administration are--no matter how sound their analytics or how true their factual claims--going to be dismissed by many as impolite and "shrill," why not have some fun with and embrace the term?

And so the idea was off and running...

Faisal grabbed the website http://shrillblog.blogspot.com/, after emailing "must. resist. temptation. to set up. shrill.org group weblog" and being answered "Why is this temptation to be resisted? :-)." Andrew introduced the conceptual link to H.P. Lovecraft. (Wikipedia has the appropriate background reading: http://en.wikipedia.org/wiki/Cthulhu http://en.wikipedia.org/wiki/Lovecraft http://en.wikipedia.org/wiki/Necronomicon.)

And the ranks of the shrill are now... impressive indeed. Even the truly cowardly are now shrill. Only the bought-and-paid-for have not joined the ranks of the highly critical who have been driven into shrill unholy madness by the mendacity, malevolence, incompetence, and disconnection from reality of George W. Bush and his administration.
Read the Full Article @ Economist Brad DeLong's Fair, Balanced, and Reality-Based Semi-Daily Journal

Friday, October 17, 2008

The truth behind the Asian fairy tale

Any lingering fantasy that Asia could insulate itself from the storm raging through the rest of the world was swept aside last week. Here is a quick rundown of what the peaceful, “unaffected” half of the planet looked like in the days before the biggest banking bail-out since – well, since Japan bailed out its banking system not that long ago.

Yet, the Asian fairy tale is not without a glimmer of truth. If the tide of the financial crisis has indeed turned, when the waters recede they will reveal a global landscape in which Asia, though damaged, will look more solid than the west.

There is also an irony to recent events. Asian governments, which by and large have been suspicious of some of the perceived excesses of deregulated capitalism, now preside over economies that – by some measures at least – are more free market than those in the west. It was noticeable, for example, that nominally communist China lifted a ban on short-selling just as light-touch regulators in London and New York were imposing temporary curbs.
FT.com / Comment - The truth behind the Asian fairy tale

Wednesday, October 15, 2008

Paul Krugman: How I Work - a research methodology

What had I found? The point of my trade models was not particularly startling once one thought about it: economies of scale could be an independent cause of international trade, even in the absence of comparative advantage. This was a new insight to me, but had (as I soon discovered) been pointed out many times before by critics of conventional trade theory. The models I worked out left some loose ends hanging; in particular, they typically had many equilibria. Even so, to make the models tractable I had to make obviously unrealistic assumptions. And once I had made those assumptions, the models were trivially simple; writing them up left me no opportunity to display any high-powered technique. So one might have concluded that I was doing nothing very interesting (and that was what some of my colleagues were to tell me over the next few years). Yet what I saw -- and for some reason saw almost immediately -- was that all of these features were virtues, not vices, that they added up to a program that could lead to years of productive research.

Fortunately, there is a strategy that does double duty: it both helps you keep control of your own insights, and makes those insights accessible to others. The strategy is: always try to express your ideas in the simplest possible model. The act of stripping down to this minimalist model will force you to get to the essence of what you are trying to say (and will also make obvious to you those situations in which you actually have nothing to say). And this minimalist model will then be easy to explain to other economists as well.
Read the full essay

Talking About a Revolution: "Increasing Returns" Paul Krugman - Slate Magazine

It's hard to convey, if you weren't there, just how liberating this was. Once they decided it was OK to tell illustrative stories rather than produce theorems, economists could write about exciting topics that had been off limits: predatory pricing, strategic investment to get the jump on competition, technological races, struggles to define industry standards. By 1988, when Jean Tirole published his landmark textbook The Theory of Industrial Organization, just about every idea about the "new economy" that trendy writers proclaim as a radical departure from conventional economic thought was, well, already in the textbook.

Among other things, someone was bound to notice that the interaction between increasing returns and product differentiation could help explain some puzzles about international trade--like why most trade is between seemingly similar countries. In the late '70s three people independently wrote up that insight: the Norwegian economist Victor Norman, Lancaster himself, and yours truly; and the "new trade theory" was born. A few years later economists such as Paul Romer and Philippe Aghion applied related ideas to technological change and economic growth, giving birth to the "new growth theory"; and the ripples spread ever outward.
Read the full article @ Slate Magazine

Tuesday, October 14, 2008

Remember the little ones at the bottom

It is not just banks who lost contact with their customers. So did water companies, airlines and internet service providers. Speak to people about their dealings with companies and they often talk as if they are at war with them – or they would be if they could speak to them.

Much of it is about pay. The growing gap between senior management and staff salaries, the sense that the top people were in it for themselves, led many employees to ask why they should bother. The closure of their pension schemes persuaded them that they shouldn’t.

How did companies get this way? Underlying it all, in banking and everywhere else, was an obsession with “making the numbers”. The pressure for double-digit earnings increases led to the frantic cost-cutting, the stripping away of employee benefits and the disappearance of front-line staff who knew the customers and cared enough to look after them.

It was because chief executives made the numbers that boards and shareholders were happy for them to earn unheard of sums. And it was desperation to keep on making the numbers that led financial institutions to securitise bad loans as frenetically as the bank next door.
Read the full article @ FT.com

Krugman Wins Economics Nobel

“To be absolutely, totally honest, I thought this day might come some day, but I was absolutely convinced it wasn’t going to be this day,” Mr. Krugman said in an interview on Monday. “I know people who live their lives waiting for this call, and it’s not good for the soul. So I put it out of my mind and stopped thinking about it.”

Mr. Krugman won the prize for his research, beginning in 1979, that explained patterns of trade among countries, as well as what goods are produced where and why.

Traditional trade theory assumes that countries are different and will exchange only the kinds of goods that they are comparatively better at producing — wine from France, for example, and rice from China.

This model, however, dating from David Ricardo’s writings of the early 19th century, was not reflected in the flow of goods and services that Mr. Krugman saw in the world around him. He set out to explain why worldwide trade was dominated by a few countries that were similar to one another, and why a country might import the same kinds of goods it exported.

In his model, many companies sell similar goods with slight variations. These companies become more efficient at producing their goods as they sell more, and so they grow. Consumers like variety, and pick and choose goods from among these producers in different countries, enabling countries to continue exchanging similar products. So some Americans buy Volkswagens and some Germans buy Fords.

He developed this work further to explain the effect of transportation costs on why people live where they live. His model explained under what conditions trade would lead people or companies to move to a particular region or to move away.
Read the full article @ NYTimes.com

Paul Krugman: Incidents from my career. An autobiographical essay

Robert Solow used to tell his students that there were two kinds of theorists: those who like to generalize, and those who like to look for illuminating special cases. I fall very strongly into the latter camp. Indeed, I have elevated the creation of special cases into a sort of personal art form. In constant-returns models, it is often possible once you have made the big untrue assumptions up front to derive results of considerable generality. For example, the Heckscher-Ohlin-Samuelson model does not depend on any assumptions about the degree of substitutability between capital and labor. You may want to look at, say, a Leontief or a Cobb-Douglas technology as an interesting example, but you don't have to. In increasing-returns models, by contrast, there are very few general results. Even with two goods, two countries, and one factor of production one easily bogs down in a complex taxonomy. So what do you do?

My answer has been to rely heavily on those suggestive special cases. The process works like this: start with an informal verbal story, often one drawn from casual empiricism or from non-mainstream economic literature. Then try to build the simplest possible model that will illustrate that story. In the course of the model-building the story tends to change along with your intuition, but at the end of the process you have a simple model that is a very special case, but that makes a lot of intuitive sense and effectively gives you a language to discuss things that previously were off limits.
Read the full essay

Saturday, October 11, 2008

After 73 years: the last gasp of the broker-dealer

This Sunday was different, however, because it marked not simply the end of Lehman and surrender of Merrill, but the last gasp of the independent investment bank itself. Morgan Stanley opened on Wall Street on Monday September 16 1935 and, 73 years later, almost to the day, the institution of the broker-dealer died.
Read the article @ FT.com

Crisis marks out a new geopolitical order

Owning up to the geopolitical implications will be as painful for the rich nations as paying the domestic price for the profligacy. The erosion of the west’s moral authority that began with the Iraq war has been greatly accelerated. The west’s debtors cannot any longer expect their creditors to listen to their lectures. Here lies the broader lesson. The shift eastwards in global economic power has become a commonplace of political discourse. Almost everyone in the west now speaks with awe of the pace of China’s rise, of India’s emergence as a geopolitical player, of the growing roles in international relations of Brazil and South Africa.

Yet the rich nations have yet to face up properly to the implications. They can imagine sharing power, but they assume the bargain will be struck on their terms: that the emerging nations will be absorbed – at a pace, mind you, of the west’s choosing – into familiar international forums and institutions.

When American and European diplomats talk about the rising powers becoming responsible stakeholders in the global system, what they really mean is that China, India and the rest must not be allowed to challenge existing standards and norms.
Read the article @ FT.com

The excesses of pragmatism

Dogmatism is pragmatism that has stood the test of time. Institutions tend to be forged in moments of crisis. Ideas that fail are discarded; ideas that succeed are retained, elaborated and then over-elaborated until they collapse. The problems of 30 years from now will turn out to have been hidden somewhere in the parts of today’s bail-out packages that wind up being most effective. If we are lucky, the most effective parts will be the most morally admirable parts.
Read the article @ FT.com

Republican Party in the U.S.: The Mask Slips

But there are two things I find remarkable about the G.O.P., and especially its more conservative wing, which is now about all there is.

The first is how wrong conservative Republicans have been on so many profoundly important matters for so many years. The second is how the G.O.P. has nevertheless been able to persuade so many voters of modest means that its wrongheaded, favor-the-rich, country-be-damned approach was not only good for working Americans, but was the patriotic way to go.
Read the article @ NYTimes.com

Friday, October 03, 2008

[김혜리가 만난 사람] 배우 고현정 : 기사 : 씨네21

이지러졌다 피는 달

좀처럼 화장기를 들이지 않는 고현정의 얼굴은 천천히 그러나 끝없이 리듬을 타고 이지러졌다 피는 달과 닮았다. 그녀가 한번 지은 표정은 물이 빠지듯 서서히 사라지고 대화할 때면 거울이 되어 마주앉은 이의 표정을 그대로 비춰낸다. 그러나 그 활짝 열린 얼굴과 마주앉아 인터뷰하는 기자는 때때로 장갑을 낀 채 악수하는 촉감을 느낀다. 그녀의 떠들썩한 결혼과 이혼, 그리고 무엇보다 그 사이에 드리워진 침침한 공백은, 거대한 반점과 같아서 거론하기도, 못 본 체하기도 쉽지 않기 때문이다. “미스코리아 나왔다가 방송하고 그러다 재벌가에 시집갔다가, 이혼하고 나와서 다시 연기를 하고. 제 전적이 너무 지루한 코스잖아요. 나쁘게 보려면 얼마든지 그럴 수 있죠.” 단숨에 요약해버리는 쪽은 고현정이다. <여우야 뭐하니>의 대사가 스친다. “창피하면 씩씩해져야죠. 가만있으면 더 창피하잖아요.” 작품 수도 적고 아직 내가 배우인지 잘 모르겠다면서도 고현정은 연기의 각론을 건드리면 오래 쟁여둔 티가 역력한 생각을 풀어놓는다. 스물다섯살에서 서른네살까지 손과 발이 연기하기를 멈춘 10년 동안 그녀의 눈과 머리는 참으로 게걸스러웠던 모양이다. 그래서 지금 우리 앞에 있는 것은 아직도 갈증을 다 풀지 못한, 우듬지까지 물이 오른 배우다.
[김혜리가 만난 사람] 배우 고현정 : 기사 : 씨네21

Wednesday, October 01, 2008

Union Leaders Confronted by Resistance to Obama - NYTimes.com

The A.F.L.-C.I.O. says its nationwide campaign effort will involve knocking on 10 million doors, making 70 million phone calls, distributing 20 million leaflets and 25 million pieces of mail, and sending out more than four million e-mail messages. The nation’s unions talk of spending more than $300 million in the campaign, including $85 million by the Service Employees International Union.

To increase Mr. Obama’s chances of winning, labor’s field marshals have sought to make sure that canvassers, when distributing fliers and visiting union members, focus on economic issues, like Mr. Obama’s calls for cutting taxes on the middle class and repealing tax breaks for companies that invest overseas. The canvassers also emphasize protecting Social Security, problems with trade agreements and the need for change.

“We’ve lost something like 600,000 jobs so far this year,” said Anthony Rainey, president of U.A.W. Local 469, which represents workers at Master Lock in Milwaukee.

Mr. Rainey said his wife had warned him that Mr. Obama would lose if voters were not able to distinguish his economic policies from Mr. McCain’s. “There hasn’t been anything on the issues and it’s going to be crunch time,” Mr. Rainey said, “and people have to understand where these presidential candidates stand on economic issues.”

But many union members have a history of basing their votes on noneconomic issues, giving Mr. McCain and his running mate, Gov. Sarah Palin of Alaska, a shot at winning their support. Mr. Pyne, who knocks on doors wearing a Steelworkers for Obama T-shirt, witnessed that firsthand while visiting Scott Siegel, a union plumber, and his wife, Amy.

“We basically vote pro-life,” said Ms. Siegel, a mother of five. “As a ‘little person,’ I don’t feel that any of these candidates have our best interests in mind. So if there’s a specific thing that sways our vote, it would be abortion.”
Read the article @ NYTimes.com

Britain on a plate: Jamie Oliver's TV series Jamie's Ministry of Food

There was a moment in the first episode of the new Jamie Oliver TV series last night when the Essex-lad-made-millionaire had an outburst worthy of a revolutionary. Emerging from a mealtime visit to Natasha, a single mother on benefits in Rotherham, he raged in his own inimitable language of protest: "Fucking hell ... it's fucking Great Britain. It's 2008. I've been to Soweto and I've seen Aids orphans eating better than that."
The article is from The Guardian

Jamie Oliver: I'm massively excited about my new project, Ministry of Food and a new food movement, called Pass It On, that I'm hoping will be a huge part of it. My new book, Jamie's Ministry of Food and the TV show (also called Ministry of Food) will both be coming out in the next couple of weeks. They're both basically about inspiring people to get back into their kitchens and make simple, delicious food from scratch again.
More at Jamie Oliver's website
Special campaign website: Jamie's Ministry of Food

US elections; Hockey moms are key players in hunt for women's vote | World news | The Guardian

Others at the rink in Livonia, a Detroit commuter town, agree that Palin seems more approachable than an earlier generation of female politician including Clinton or even Nancy Pelosi, the first woman speaker of the house and, like Palin, a mother of five.

Clinton, with her suits and her pride in her profession as a lawyer and senator, was off-putting to those women who still place importance in traditional roles. "[Palin] just seems like someone you can relate to. Hillary Clinton doesn't seem like you could sit down and have a cup of coffee with her," says Vicky Rokas, a solid Republican voter who counts herself a Palin fan.

For Rokas, who has spent years shuttling three hockey-playing children to practice and out-of-state tournaments, Palin's hockey mom experience is just as valid as her professional credentials.

But the positive image is far from universal. Many women admit a visceral dislike of McCain's running mate.

"She scares the hell out of me. Every time I see her I go home and open my wallet, and write another cheque for Obama," says Pilar Herrera-Fierro, looking up from her copy of the New York Times to watch her daughter's practice.

The immediate burst of enthusiasm about Palin's candidacy has faded. The comedian Tina Fey has turned Palin's gaffes on foreign policy - such as the line about seeing Russia from Alaska - into a spoof on the TV show Saturday Night Live.

Women voters have also become more conscious of Palin's retrograde views on global warming and others issues.
Read the article @ The Guardian

FT / Martin Wolf: Congress decides it is worth risking depression

Against this dire background, what is one to make of the failure of Congress to ratify the plan? It is both understandable and a gross error.

It is understandable because the use of taxpayer money to buy so-called “toxic” mortgage-backed securities from the greedy fools who created the crisis is hard to tolerate. It is also understandable – even creditable – that those Republicans hostile to “socialism” do not want to bail out the undeserving rich, at least before an election. It is understandable, too, because, for reasons I put forward last week, the plan is not convincing. It is designed to deal with a problem of illiquidity in what seems certain to be a growing crisis of insolvency, particularly as house prices fall and the economy continues to weaken.

Yet the rejection is grossly mistaken because the resulting ruin will hurt the weak and destroy the legitimacy of the market economy. The plan is indeed flawed. But failure to ratify it is unlikely to convince anybody that something better will be forthcoming. It will convince them, instead, that the US is choosing to be impotent. At a time of such fragility, when the insurance offered by government is most indispensable, this is the worst possible message. It is a pity Mr Paulson did not choose another plan. It is a pity, too, that a former titan of high finance was charged with bailing out Wall Street. Yet it was still a mistake to reject the plan. It was necessary, instead, to build upon it.
Read the article @ FT.com

FT/Columnists Martin Wolf: Paulson’s plan was not a true solution to the crisis

Now turn to the criteria to be used in judging the intervention. First, it would deal with the systemic threat. Second, it would minimise damage to incentives. Third, it would come at minimum cost and risk to the taxpayer. Not least, it would be consistent with ideas of social justice.

The fundamental problem with the Paulson scheme, as proposed, is then that it is neither a necessary nor an efficient solution. It is not necessary, because the Federal Reserve is able to manage illiquidity through its many lender-of-last resort operations. It is not efficient, because it can only deal with insolvency by buying bad assets at far above their true value, thereby guaranteeing big losses for taxpayers and providing an open-ended bail-out to the most irresponsible investors.
Read the article @ FT.com