Archive for March, 2009

Random Links XVII

Posted in Links on 20090330 by Avenging Sword

Central American Gang Insurgency:

http://www.foreignaffairs.org/20050501faessay84310/ana-arana/how-the-street-gangs-took-central-america.html

Recall that Latin American stability is not necessarily in our interest.  Rather, our goal WRT Latin America is that it remain unwilling or unable to threaten us.  A Latin America preoccupied with domestic troubles accords with this goal.

Proud Legions:

http://space4commerce.blogspot.com/2006/05/proud-legions-by-tr-fehrenbach.html

Professional warriors vs. citizen-soldiers, explained.

Interfluidity Insights:

I don’t always agree with this guy, but he is quite insightful.

Financial Effects of Petroleum Doomsday:  http://www.interfluidity.com/posts/1142546518.shtml

Buffett’s Import Certificates:  http://www.interfluidity.com/posts/1146514161.shtml

Free Trade & Cash-on-Delivery:  http://www.interfluidity.com/posts/1158666194.shtml

Monetary Mercantilism:  http://www.interfluidity.com/posts/1159223072.shtml

Deficit Spending vs. Monetary Mercantilism:  http://www.interfluidity.com/posts/1167835155.shtml

Immigration vs. Outsourcing:  http://www.interfluidity.com/posts/1180945939.shtml

Financial innovation done right:  http://www.interfluidity.com/posts/1224388192.shtml

Strategic Dangers of Free Trade:

http://www.interfluidity.com/posts/1142184617.shtml

http://interfluidity.powerblogs.com/posts/1142184617.shtml#12

Reviving Respectability:

http://www.telegraph.co.uk/opinion/main.jhtml?view=DETAILS&grid=A1YourView&xml=/opinion/2008/10/18/do1803.xml

Buckypaper:

http://www.physorg.com/news143462841.html

Maritime Piracy:

http://www.jerrypournelle.com/mail/2008/Q4/mail541.html#pirates2

Civic Responsibility:

http://whatever.scalzi.com/2008/10/14/one-president-at-a-time/

Free Trade & Welfare:

http://www.tnr.com/story_print.html?id=3b1abc81-8d49-4641-b3c1-77f378b7a443

So, free trade exacerbates inequality.  The leftist answer is to couple FT with Welfare.  So, not only do we export our industrial base, but we lard out B&C (and thereby destroy the American work ethic).

Parachutes & Statistics:

http://www.bmj.com/cgi/content/full/327/7429/1459?ijkey=425457f110f8db584617b87a1eace92eaa39ff02

It’s shocking to consider how parachutes have remained on the market for generations, even absent controlled tests of their efficacy.

Lincoln & the Lieber Code:

http://www.slate.com/id/2210918/

http://volokh.com/posts/chain_1234760098.shtml

Inter Arma Silent Leges.

Random Links XVI

Posted in Econ on 20090329 by Avenging Sword

Bernanke on the “external finance premium”:

http://www.federalreserve.gov/newsevents/speech/Bernanke20070615a.htm

Reading closely, one can see echoes of current events in this speech.

FDIC Asset Disposal:

http://www.nytimes.com/2009/02/14/business/economy/14assets.html

One current growth area.

Japan Stimulus Waste:

http://www.nytimes.com/2009/02/06/world/asia/06japan.html

Something to consider when trying fiscal stimulus here.

WWII & Private-Sector Deleveraging:

http://krugman.blogs.nytimes.com/2009/02/15/debt-in-wartime/

How economic growth & inflation shrank US private debt from ~230% to ~65% of GDP between 1933 & 1945.  Of course, today’s private debt/GDP ratio is even higher….

Thoma on Deficit Spending:

http://economistsview.typepad.com/economistsview/2009/02/bogus-arguments-about-the-burden-of-the-debt.html

Why it’s not always a dumb idea.

Kanjorski Meme Debate:

Re. allegations by Rep. Kanjorski (D-PA) of a 9/18/2008 run on money-market mutual funds:

Initial meme sightinghttp://zerohedge.blogspot.com/2009/02/how-world-almost-came-to-end-at-2pm-on.html

Salmon responds/debunks the Kanjorski meme:

http://www.portfolio.com/views/blogs/market-movers/2009/02/11/kanjorski-and-the-money-market-funds-the-facts

http://www.portfolio.com/views/blogs/market-movers/2009/02/10/the-kanjorski-meme

Return of the Kanjorski meme:

http://alephblog.com/2009/02/15/the-story-not-told/

http://v2.ftalphaville.ft.com/blog/2009/02/16/52487/the-kanjorski-meme-and-the-end-of-the-world-redux/

http://v2.ftalphaville.ft.com/blog/2009/02/16/52487/the-kanjorski-meme-and-the-end-of-the-world-redux#comment-233134

Salmon responds again:

http://www.portfolio.com/views/blogs/market-movers/2009/02/16/the-kanjorski-meme-mark-ii

Random Links XV

Posted in Links on 20090327 by Avenging Sword

Russian RTG Sub:

http://aquilinefocus.blogspot.com/2007/12/w3ts2.html

http://www.defensetech.org/archives/003918.html

http://informationdissemination.blogspot.com/2007/12/russias-not-so-super-secret-special.html?

European Baby Boom:

http://www.voxeu.org/index.php?q=node/1620

Optimists noting the parallel between current European fertility & the 1930s will find the conclusion discouraging:  “In sum, the post-war baby boom was rooted in widespread gender inequality in the labour market combined with the after effects of World War II. In the very different circumstances and societies of today, a repeat of the baby boom on these terms is neither viable nor desirable.”

Nth-Country Experiment:

http://www.guardian.co.uk/world/2003/jun/24/usa.science/print

See also:  Dan Stober, “No experience necessary”, Bulletin of the Atomic Scientists, March 2003, vol. 5, issue 2, pp. 56-64.

Global Warming & Sea Level Rise:

http://www.greencarcongress.com/2008/09/new-analysis-co.html

“…increases in excess of 2 meters are physically untenable. We find that a total sea-level rise of about 2 meters by 2100 could occur under physically possible glaciological conditions but only if all variables are quickly accelerated to extremely high limits. More plausible but still accelerated conditions lead to total sea-level rise by 2100 of about 0.8 meter.”

Chinese Labor Surplus:

http://www.economist.com/finance/displaystory.cfm?story_id=12052315

IIRC, economic growth is a function not only of change in population size, but also change in productivity. If the increase in the latter outweighs the decrease in the former, you can still have economic growth even with shrinking population.

In China, for instance, one can divide the labor force (roughly) into high & low productivity segments. The former works in technology, export-oriented manufacturing, etc. The latter is mainly rural subsistence farming. China’s economic growth strategy has been to shift millions of people annually from low-productivity to high productivity jobs (*).

Now, say China’s population started decreasing tomorrow by 2 million/yr, evenly divided between the high & low productivity segments. If they were able to move people into high-productivity jobs faster than the high-productivity sector workforce shrank, said workforce would continue to grow, and with it China’s economy.

Of course, there are limits to that; once everyone is in a high-productivity job, continued increases in productivity (e.g., via application of technology) would be needed in order to offset continued population shrinkage.

(*) delong.typepad.com/sdj/2005/03/peering_into_th.html

Geoengineering:

http://physicsworld.com/cws/article/news/35693

Islamic Bond Crash:

http://www.bloomberg.com/apps/news?pid=20601109&sid=a_Zh0q70aPxY&refer=exclusive

Politics & Civility:

http://economistsview.typepad.com/economistsview/2008/09/small-towns-and.html

http://www.ft.com/cms/s/0/f1984d88-7cd5-11dd-8d59-000077b07658.html?nclick_check=1

http://economistsview.typepad.com/economistsview/2008/09/do-democrats-ne.html

http://blogs.ft.com/crookblog/2008/09/more-on-democrats-and-respect/

http://meganmcardle.theatlantic.com/archives/2008/09/coastal_privilege.php

http://economistsview.typepad.com/economistsview/2008/09/respect-and-two.html

Applies to Republicans too, BTW.

Psychology, Politics, & Ideology:

http://www.edge.org/3rd_culture/haidt08/haidt08_index.html

http://www.edge.org/discourse/vote_morality.html#shermer

Those who believe people vote Republican ‘cuz they’re duped into doing so would be well advised to read these.

Central American Gang Insurgency:

http://www.foreignaffairs.org/20050501faessay84310/ana-arana/how-the-street-gangs-took-central-america.html

Recall that Latin American stability is not necessarily in our interest.  Rather, our goal WRT Latin America is that it remain unwilling or unable to threaten us.  A Latin America preoccupied with domestic troubles accords with this goal.

Random Links XIV

Posted in Econ on 20090325 by Avenging Sword

CDO Loss Watch:

http://www.ft.com/cms/s/0/2970532c-0421-11de-845b-000077b07658.html

Tax Rebate Stimulushttp://economicsofcontempt.blogspot.com/2009/01/tax-rebates-as-stimulus.html

Interesting.  The ’01 & ’08 tax rebates, widely panned by commentators, apparently weren’t quite as un-stimulating as suspected.

Hamilton on Potential Outputhttp://www.econbrowser.com/archives/2009/02/the_paradox_of.html

He’s mainly discussing stimulus & the paradox of thrift, but also had this fascinating (to me) line:

where I may disagree with some of my colleagues is in their presumption that wage or price rigidities are the core frictions that are responsible for producing the present situation. I have in my research instead stressed technological frictions. For example, when spending on cars abruptly falls, there is a physical, technological challenge with getting the specialized labor and capital formerly employed in manufacturing cars into some alternative activity. In my mind, it is a mistake to pretend that any federal program is capable of immediately re-employing those resources into an alternative, equally productive enterprise. More fundamentally, I have suggested that our present situation is as if someone had quite successfully sabotaged the basic functionality of our financial system. Until we once again have a financial sector that can successfully allocate credit to worthy projects, we’re not possibly going to be able to produce as much in the way or real goods and services, no matter what the level of aggregate demand or stimulus package might be. In terms of the textbook Keynesian models that people play with, I’m suggesting that “potential” GDP growth for 2009:Q1– that growth rate which, if we try to exceed it by stimulating aggregate demand, we primarily just get more inflation– is in fact a negative number. I do not accept the proposition that there is a level of government spending– however large a number you choose to suggest– that will prevent the unemployment rate from rising above 8%

I found this an interesting contrast with the notion (see, e.g., here) that potential growth remains unaffected by the credit crunch, and that sufficiently large fiscal stimulus is all that’s needed to restore growth.  If potential GDP growth is in fact negative, then a large stimulus may be unnecessary, since the “output gap” to be closed thereby is much smaller (and may even be nonexistent).  Another implication of the above is that fixing the financial system should take priority over stimulus, since so long as the former remains undone, the latter will prove a temporary palliative at best.

Related to the above, here’s a post on the notion of “technological regress”:  http://www.econbrowser.com/archives/2009/02/the_current_dow.html

Shovel Ready (Un)Defined:

http://www.popularmechanics.com/technology/industry/4302578.html?nav=hpPrint&do=print

Stimulus & Governmental Size:

http://economistsview.typepad.com/economistsview/2009/02/multipliers-and-the-role-of-government.html

How differing notions re. the size of government may affect the stimulus debate.

Credit Crunch:

http://www.bloomberg.com/apps/news?pid=20601109&sid=a0Fv8IJcNKP8&refer=home

Irving Fisher & Debt Deflation:

http://www.voxeu.org/index.php?q=node%2F3046

http://www.economist.com/finance/displayStory.cfm?story_id=13104022

Balance Sheet Recession:

http://www.csis.org/media/csis/events/081029_japan_koo.pdf (239 KB pdf)

http://www.nakedcapitalism.com/2009/02/we-are-threatened-by-veritable-disaster.html

http://www.clusterstock.com/2008/10/why-this-recession-will-be-a-doozy

http://www.voxeu.org/index.php?q=node%2F3046

http://www.economist.com/finance/displayStory.cfm?story_id=13104022

http://www.ft.com/cms/s/0/774c0920-fd1d-11dd-a103-000077b07658.html

http://alephblog.com/2009/03/06/the-bane-of-broken-balance-sheets/

Great Depression Overview:

http://eh.net/encyclopedia/article/parker.depression

Random Links XIII

Posted in Links on 20090324 by Avenging Sword

Synthetic Telepathyhttp://www.physorg.com/news137863959.html

Female Preeninghttp://www.telegraph.co.uk/news/newstopics/howaboutthat/2578041/Women-spend-3276-hours-getting-ready.html

“Women spend 3,276 hours getting ready.”

Corporations & Profit Maximization:

http://creativecapitalism.typepad.com/creative_capitalism/2008/08/profit-maximiza.html

Gay Gene:

http://www.newscientist.com/channel/being-human/dn14543-bisexuality-passed-on-by-hyperheterosexuals-.html

SSK Hunting:

http://www.strategypage.com/htmw/htsub/articles/20080202.aspx

Encouraging to read, IVO foreign SSK purchases over the years.

The Sub That Couldn’t Shoot Straight:

http://www.strategypage.com/htmw/htsub/articles/20080114.aspx

Russian quality control.

Brazilian Anarchy:

http://www.vanityfair.com/politics/features/2007/04/langewiesche200704

World Water Supply:

http://environment.newscientist.com/channel/earth/mg19926700.100-looming-water-crisis-simply-a-management-problem.html

Given that the US has a comparative advantage in food production (in terms of land, energy, & technology), it may be worthwhile to let other countries become dependent on our food exports.  Gives us leverage in crises (e.g., war, famine), and bulks up our trade balance otherwise.

Economic Impact of Avian Flu:

http://www.secureworldexpo.com/articles/?p=13

Pandemic & Civilizational Downfall:

http://www.newscientist.com/channel/being-human/mg19826501.400-will-a-pandemic-bring-down-civilisation.html

http://www.newscientist.com/channel/being-human/mg19826501.500-why-the-demise-of-civilisation-may-be-inevitable.html

Oath of Fealty in Dubai:

http://worldarchitecturenews.com/index.php?fuseaction=wanappln.projectview&upload_id=10224

http://www.inhabitat.com/2008/08/25/ziggurat-dubai-carbon-neutral-pyramid-will-house-1-million/

Population Decline & Wages:

http://www.bloomberg.com/apps/news?pid=20601109&sid=a4JYSXJgkh0Y&refer=home

Shrinking workforce + constant demand for labor = higher wages.  We may want to keep this in mind when writing immigration policy….

Infrastructure Privatization:

http://www.nytimes.com/2008/08/27/business/27fund.html

http://www.nytimes.com/2004/05/20/business/20scene.html

IQ & Neuroscience:

http://www.sciam.com/article.cfm?id=high-aptitude-minds&print=true

Importance of American Naval Power:

http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/2007/04/12/the-limitations-and-necessity-of-naval-power.aspx

http://www.stratfor.com/geopolitical_diary_wednesday_march_3_2004

http://www.stratfor.com/analysis/u_s_naval_dominance_and_importance_oceans

http://www.stratfor.com/analysis/u_s_naval_dominance_and_ssn

http://www.stratfor.com/bams_role_furthering_u_s_naval_dominance

Americans often forget that oceans work both ways.

Fighter Jet Obsolescence?:

http://www.stratfor.com/analysis/fighter_jet_still_top_gun

Pournelle Airpower Debate:

http://www.jerrypournelle.com/mail/2009/Q1/mail558.html#air1

http://www.jerrypournelle.com/mail/2009/Q1/mail558.html#air2

http://www.jerrypournelle.com/mail/2009/Q1/mail559.html#airpower

http://www.jerrypournelle.com/mail/2009/Q1/mail559.html#airpower2

http://www.jerrypournelle.com/mail/2009/Q1/mail560.html#f35

http://www.jerrypournelle.com/mail/2009/Q1/mail561.html#endfpri

http://www.jerrypournelle.com/mail/2009/Q1/mail561.html#Friday

Geopolitics of US Enemies:

Russia:  http://www.stratfor.com/weekly/russia_problem

Iran:  http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/2008/07/24/the-geopolitics-of-iran.aspx

Random Links XII

Posted in Econ on 20090323 by Avenging Sword

How Washington Mutual imploded:

http://www.nytimes.com/2008/12/28/business/28wamu.html

How AIG imploded:

http://www.washingtonpost.com/wp-dyn/content/article/2008/12/28/AR2008122801916_pf.html

http://www.washingtonpost.com/wp-dyn/content/article/2008/12/29/AR2008122902670_pf.html

http://www.washingtonpost.com/wp-dyn/content/article/2008/12/30/AR2008123003431_pf.html

Commentary:  http://curiouscapitalist.blogs.time.com/2008/12/30/did-those-people-at-aig-not-understand-anything-about-financial-risk/

For Ubernerds:  http://www.acredittrader.com/?p=65

Bear Stearns Downfall:

http://www.vanityfair.com/politics/features/2008/08/bear_stearns200808?printable=true&currentPage=all

Frannie Downfallhttp://www.calculatedriskblog.com/2008/07/krugman-on-gses.html

Russian economic problems:

http://www.nytimes.com/2008/12/30/business/worldbusiness/30gazprom.html

http://www.rgemonitor.com/economonitor-monitor/254558/can_russia_avoid_a_hard_landing

http://fistfulofeuros.net/afoe/economics-and-demography/the-ruble-fall-continues-as-unemployment-soars/

http://www.washingtonpost.com/wp-dyn/content/article/2008/10/03/AR2008100301976_pf.html

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/3469090/Russias-banal-reality-lies-in-between-energy-superpower-and-bankrupt-state.html

Risk Mismanagement:

http://www.nytimes.com/2009/01/04/magazine/04risk-t.html

Commentary:

http://www.nakedcapitalism.com/2009/01/woefully-misleading-piece-on-value-at.html

http://baselinescenario.com/2009/01/04/risk-management-var/

More risk mismanagement:

http://nickgogerty.typepad.com/designing_better_futures/2009/01/post-model-manifesto.html

Interestingly, ISTR Tom Clancy mentioning this danger – of everyone using the same models – in “Debt of Honor”, 15 yrs ago.

Fiscal Stimulus Critique:

http://blogs.ft.com/maverecon/2009/01/can-the-us-economy-afford-a-keynesian-stimulus/

Basically, he thinks the US can’t afford fiscal stimulus ‘cuz the resultant massive deficits will spook our foreign creditors.

Rollover Crisis Watch:

http://www.iht.com/articles/2009/01/07/business/yuan.php

Commentary:

http://www.nakedcapitalism.com/2009/01/ny-times-china-cooling-on-us-debt.html

Skeptical commentary:

http://blogs.cfr.org/setser/2009/01/08/china-actually-hasnt-lost-its-appetite-for-us-treasuries/

Winning Afghanistan:

http://fistfulofeuros.net/afoe/europe-and-the-world/a-european-option-in-afghanistan/

Most interesting was the notion, backed by a US Army report (4 MB pdf), that Mujaheddin victory in Afghanistan wasn’t inevitable ’till the USSR fell – i.e., that it was the loss of Soviet backing, and not the Red Army’s withdrawal, that doomed Russia’s Afghan client state.

Oil Prices & Recession:

http://www.econbrowser.com/archives/2008/12/the_oil_shock_a.html

http://www.econbrowser.com/archives/2009/01/the_oil_shock_a_1.html

Jubilee Watch:

http://www.ft.com/cms/s/0/d7ff9856-e191-11dd-afa0-0000779fd2ac.html

http://www.ft.com/cms/s/0/4f5c5ba2-dc22-11dd-b07e-000077b07658.html

http://clusterstock.alleyinsider.com/2009/1/the-real-problem-our-debt-mountain

http://www.rgemonitor.com/roubini-monitor/253653/we_need_a_new_holc_-_more_than_a_new_rtc_or_rfc-_to_provide_massive_debt_relief_to_the_household_sector_we_need_to_create_the_home_home_owners_mortgage_enterprise

http://www.vanityfair.com/online/politics/2009/01/niall-ferguson-america-needs-to-cancel-its-debt.html

Those familiar with the Old Testament will recall the concept of jubilee (i.e., mass debt cancellation).  I’ve been wondering for a while now if (when?) the pressures for similarly radical measures will appear (and build) as this crisis continues.  The aforementioned present economic articles for a modern jubilee (briefly, that the drag on consumption imposed by household deleveraging will hinder economic growth for an unacceptably long period of time).  But there are other arguments (e.g., hatred of Wall Street) as well.

Jubilee Variant:  Trickle-Up Bailout:

http://interfluidity.powerblogs.com/posts/1236786808.shtml

Random Links XI

Posted in Links on 20090321 by Avenging Sword

Unemployment training:

College edition:  http://accounting.smartpros.com/x64268.xml

High school edition:  http://www.ednews.org/articles/10474/1/Unemployment-Training-The-Ideology-of-Non-Work-Learned-in-Urban-Schools/Page1.html

“Smart Guns” vs. EMP:

http://volokh.com/posts/chain_1233708063.shtml

George Friedman on “The Next Hundred Years”:

http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/2009/01/22/the-next-100-years.aspx

Partisanship & Blindness:

http://blog.beliefnet.com/crunchycon/2009/02/maciel-partisanship-and-blindn.html

I learned this lesson – the non-correlation of ideology with decency & character – back in college, when I learned how to be friends with those whom I strongly disagreed with.

Mixed-Use Malls:

http://www.housingwire.com/2008/12/29/malls-the-future-of-housing/

Private Student Loan Problems:

http://www.latimes.com/business/la-fi-collegedebt27-2008dec27,0,4636992.column

My solution:

1.  Better disclosure requirements.  E.g., a Truth-in-Lending box as with credit cards.  Include max. possible interest rate, a plot of the index rate over the last few decades (giving a student some idea of just how high rates could go); whether the loan is fixed or adjustable rate; etc.

2.  A class to all potential student borrowers re. fixed vs. adjustable rate, compound interest, amortization, how to calculate monthly payments, how payments break down into principal & interest, etc.  Also on the differences between federal & private student loans.

If these students are smart enough to get into college, they’re smart enough to understand amortization calculations.

Drought & Civil Conflict:

http://www.voxeu.org/index.php?q=node/2742

No civilization is more than three meals away from collapse.

ID’ing genes responsible for the Spanish flu’s lethality:

http://www.eurekalert.org/pub_releases/2008-12/uow-sig122608.php

Scientific evidence of Everlasting Love:

http://www.newsday.com/news/local/ny-liston0612330644jan06,0,990050,print.story

Two things I found notable:

1) The cynicism of the researchers (cynicism, I might add, that I’d probably share in the absence of countervailing evidence); and 2) the fact that the researchers’ cynicism was proven wrong (at least for this particular sample).

State & local tax progressivity:

http://lanekenworthy.net/2009/01/08/how-progressive-are-our-taxes-follow-up/

(Something to remember next time Republicans/conservatives/libertarians point out how progressive the federal tax system is.)

Humor:

http://www.all-creatures.org/humor/dogcatdiary.html (And yet I prefer cats – go figure.)

Why we need more toll roads:

http://freakonomics.blogs.nytimes.com/2009/01/06/why-youll-love-paying-for-roads-that-used-to-be-free-a-guest-post/

http://freakonomics.blogs.nytimes.com/2009/01/08/why-youll-love-paying-for-roads-that-used-to-be-free-part-two/

FHLB Downfallhttp://www.calculatedriskblog.com/2009/01/federal-home-loan-bank-of-seattle.html

Legitimizing Mythshttp://www.jerrypournelle.com/alt.mail/altmail5.html#myth

Gun Buybacks as Gun Owner Subsidy:

http://armsandthelaw.com/archives/2009/02/gun_buyback_in.php

“Gun buybacks are a great subsidy to gun owners. Everyone has a junker or two that’s beyond repair and unsalable. You can still get $50-100 for it! […] A gun dealer sold all his junkers to his employees, and they went around turning them in, and netting a nice profit as their bonus.”  Heh.

Innocence + Wrongful Conviction = Harsher Sentence:

http://www.concurringopinions.com/archives/2009/02/why_the_innocen.html