Saturday, February 28, 2004

My 2004 Oscar predictions!!

Continuing my long-running tradition that started last year, it's time to post my Oscar predictions for 2004. First, however, let me confess that I'm just not into the Oscars this year as much as last year, for two reasons.

First, inexplicably, Salma Hayek was not nominated for her breathtaking performances in either Spy-Kids: 3D, or Once Upon a Time In Mexico. There is no justifiable explanation for this oversight. [Did you even see either of those films?--ed. Look, this is just a point of principle.] As a gesture of support, I feel obligated to post this picture of Ms. Hayek in protest:


Fight the power!!

Second, the truncated Oscar campaign season has taken a toll. When the Oscars were in late March, it permitted a less frenetic awards season. This year, BAM!! The Golden Globes, BAM!, the SAG awards, BAM!!, critics awards, BAM!!, the Oscars.

The logic behind this was to reduce the campaigning that goes on during awards season. Why, exactly, is this a bad thing? I say Hollywood needs more campaigning. It helps to build up excitement -- you know, like the off-season between the Red Sox and the Yankees.

So, without further ado, my predictions:

Best Picture:
Will win: Lord of The Rings: The Return of the King
Should win: Finding Nemo

I agree with what David Edelstein and Lynda Obst say in Slate – LOTR has that mix of commercial epic and artistic achievement that’s tough for the Academy to ignore. The most serious competition, Lost in Translation, is the exact opposite, a purposefully small film. The Academy surprised me last year with some genuinely unconventional choices, but I’m playing it safe here.

Risking the wrath of LOTR devotees everywhere, let me say that while I liked the last one a great deal, the third film was the only one that seemed to drag. I thought it was going to end at least five times during the last half hour. Nemo, on the other hand, is equally beautiful to watch, but a more tightly constructed film.

Best Actor:
Will win: Sean Penn, Mystic River
Should win: Sean Penn, Mystic River

It’s supposed to be between Penn and Bill Murray. The Academy still has a bias against comedians unless they go completely dramatic, and Murray was too funny in the role for voters to believe it to be that big of a stretch. Penn has been nominated several times before, and he’s due. Plus, Penn’s understated performance in 21 Grams will unconsciously bias Academy voters in favor of Penn.

I liked Murray’s performance in Lost in Translation, but not as much as I liked Penn’s in Mystic River, which ran the gamut in terms of emotion.

Best Actress:
Will win: Charlize Theron, Monster
Should win: Naomi Watts, 21 Grams.

Theron has dominated the pre-Oscar awards, plus she suffered for her craft by putting on weight, shaving her eyebrows and wearing tons of unflattering makeup.

To be fair, I haven’t seen Monster, so the award might well be deserved. However, Watts’ performance as the grieving mother/junkie in 21 Grams blew me away. In a role that could have caused some actresses to overemote, Watts hit just the right note of dulled pain that the bereaved usually feel.

Best Supporting Actor:
Will win: Tim Robbins, Mystic River
Should win: Peter Sarsgaard, Shattered Glass

I’ve noticed that Robbins’ performance tends to split critics between those who like to see GREAT ACTING! and those who believe that truly great acting should be so subtle that the viewer becomes absorbed into the story to the point where s/he doesn’t think, “Wow, Tim Robbins is great!” Academy voters tend to fall under the GREAT ACTING! school.

I thought Robbins was great in both senses -- as the movie went on, I thought less about Tim Robbins and more about his character, Davy. That said, there was one other performance this year that was better. Sarsgaard played Chuck Lane, the personally awkward editor who slowly ferrets out the deception of New Republic writer Stephen Glass. What’s great about the performance is that you can see Lane’s slow change from defending his reporter to suspecting the worst to believing the worst.

Best Supporting Actress:
Will win: Shohreh Aghdashloo, House of Sand and Fog
Should win: Ellen DeGeneres, Finding Nemo

Renee Zellweger will be this decade’s Joan Allen – always giving Oscar-caliber performances but never winning the Oscar. Plus, her not winning is the best way for the Academy to stick it to Harvey Weinstein.

Dorie was written for DeGeneres, but the character allowed her to display a range that wasn’t present in her previous work.

Best Director:
Will win: Peter Jackson, Lord of The Rings: The Return of the King
Should win: Billy Ray, Shattered Glass

Jackson will win for the same reason that LOTR will win Best Picture.

On the basis of the whole trilogy, I’m inclined to want Jackson to win it as well. But Ray should be acknowledged for doing the near-impossible – telling a true story about a non-visual subject – magazine writing – and making it interesting while not distorting the facts.

UPDATE: Here's an amusing Oscar drinking game; link courtesy of Wonkette.

POST-OSCAR UPDATE: Well, that was boring (except for the song by Will Ferrell and Jack Black). Laura at Apt. 11D has a pithy assessment of the show.

posted by Dan at 10:51 PM | Comments (15) | Trackbacks (4)

The déjà vu Democratic primary?

Tom Maguire draws an interesting parallel between the 2000 Democratic primary and the 2004 Democratic primary:

The Dems had a choice between a media favorite and an annoying phony back in 2000. They went with Big AL, and how did that work out? Now, in a bizarre replay they have a choice between a charismatic chap the media could learn to love, and an annoying phony. Fool me once, shame on you; fool me twice, I'm a registered Dem.

Of course, most of the candidates the media love -- John Anderson, Bruce Babbitt, Pete DuPont, John McCain -- get relegated to the dustbin of political history.

posted by Dan at 05:01 PM | Comments (19) | Trackbacks (0)

Why the political rhetoric about trade matters

There's a lot of rationalizations that are made during campaign seasons by the supporters of particular candidates. If someone gives a speech or takes a position that contradicts a supporter's beliefs, it's often rationalized that it's just a campaign tactic, and that once elected, the politician would never actually follow through.

This is often true -- look at Bill Clinton the candidate and Bill Clinton the president on matters related to trade, or Ronald Reagan tghe candidate versus Ronald Reagan the president on matters related to the Moral Majority.

However, this overlooks an important point, which is that the campaign rhetoric itself can badly degrade the political discourse on the topic in question. Politicians could be faced with "blowback" -- being compelled to carry out policies they disagree with because they've made rhetorical commitments that are costly to reverse. Another possibility is that the rhetoric reframes the debate entirely, making it impossible to mount a defense of an issue without seeming to be out of bounds.

Which is why Brad DeLong is dead-on when he writes:

I can and do blame Democratic politicians for not resisting temptation: every day that Americans are told that trade destroys jobs--rather than that it shifts jobs from one industry to another, hopefully from lower-paying to higher-paying--is a day that makes it harder to pursue good policies to enrich America.

posted by Dan at 03:37 PM | Comments (30) | Trackbacks (0)

Friday, February 27, 2004

Tyler Cowen is on a roll

Astute readers of may have detected a slight drop-off in posting productivity. This is due to a plethora of reasons, some of which will become clear in due course.

However, Tyler Cowen at Marginal Revolution has been producing a steady stream of fascinating posts. There's one on the surprisingly high rate of return for Senator's stock portfolios, one on the economics of corporate downsizing [What's that?--ed. That's what everyone was freaking out about ten years ago during the jobless recovery. Go back and replace the word "downsizing" with "outsourcing" and "India" with "Japan" and the debate would look awfully familiar], and a review of recent outsourcing articles.

However, this post from earlier in the week made my jaw drop. It links to a USA Today story on changes in public opinion on globalization. The highlights:

High-income Americans have lost much of their enthusiasm for free trade as they perceive their own jobs threatened by white-collar workers in China, India and other countries, according to data from a survey of views on trade.

The survey by the University of Maryland's Program on International Policy Attitudes (PIPA) is one of the most comprehensive U.S. polls on trade issues. It found that support for free trade fell in most income groups from 1999 to 2004 but dropped most rapidly among high-income respondents -- the group that has registered the strongest support for free trade. ''Free trade'' means the removal of barriers such as tariffs that restrict international trade.

The poll shows that among Americans making more than $100,000 a year, support for actively promoting more free trade collapsed from 57% to less than half that, 28%. There were smaller drops, averaging less than 7 percentage points, in income brackets below $70,000, where support for free trade was already weaker.

The same poll found that the share of Americans making more than $100,000 who want the push toward free trade slowed or stopped altogether nearly doubled from 17% to 33%. (emphasis added)

Just three years ago, Kenneth Scheve and Matthew Slaughter argued in Globalization and the Perceptions of American Workers that public support for globalization was strongly and positively correlated with education and income. That finding still holds, but the increasing hostility to an open economy has flattened out the relationship considerably.

[Why did this story make your jaw drop? Surely you're not surprised that protectionist sentiments increase during an economic downturn?--ed. What's surprising is not the trend but the magnitude of the effect at the upper end of the income distribution. This could be one clue as to why John Edwards did so well with affluent voters in Wisconsin even though his protectionist rhetoric seemed tailored towards lower-income voters.]

posted by Dan at 10:50 AM | Comments (48) | Trackbacks (4)

Thursday, February 26, 2004

The day Andrew Sullivan wishes he was me

Ah, the perks of being at the University of Chicago: I'm dashing off to be a judge for this contest.

UPDATE: Here's the Chicago Maroon report on the event.

posted by Dan at 07:35 PM | Comments (15) | Trackbacks (0)

Wednesday, February 25, 2004

It's Greenspan week!!

Federal Reserve Chairman Alan Greenspan is a newsmaker -- whenever he opens his mouth, it makes the news (even if no one quite understands what he's saying). That said -- and I'll be willing to concede that this may be my imagination -- he seems to be opening his mouth quite a bit this week:

  • Five days ago, he gave a speech blasting the rising sentiment for protectionism and calling for greater investments in education:

    To be sure, many of our fellow citizens have experienced real hardships in our economic environment, which is becoming ever more internationally competitive. But the protectionist cures being advanced to address these hardships will make matters worse rather than better.

    The loss of jobs over the past three years is attributable largely to rapid declines in the demand for industrial goods and to outsized gains in productivity that have caused effective supply to outstrip demand. Protectionism will do little to create jobs; and if foreigners retaliate, we will surely lose jobs. We need instead to discover the means to enhance the skills of our workforce and to further open markets here and abroad to allow our workers to compete effectively in the global marketplace.

  • Yesterday, he testified about the need to privatize Freddie Mac and Fannie Mae to eliminate the perception of a government bailout of either.

  • Today, he tackled Social Security:

    Federal Reserve Chairman Alan Greenspan urged Congress on Wednesday to deal with the country's escalating budget deficit by cutting benefits for future Social Security retirees. Without action, he warned, long-term interest rates would rise, seriously harming the economy....

    Greenspan, who turns 78 next week, said that the benefits now received by current retirees should not be touched but he suggested trimming benefits for future retirees and doing it soon enough so that they could begin making adjustments to their own finances to better prepare for retirement.

    Greenspan did not rule out using tax increases to deal with the looming crisis in Social Security, but he said that tax hikes should only be considered after every effort had been made to trim benefits.

    ``I am just basically saying that we are overcommitted at this stage,'' Greenspan said in response to committee questions. ``It is important that we tell people who are about to retire what it is they will have.'' He warned that the government should not ``promise more than we are able to deliver.''

    While the country is currently enjoying the lowest interest rates in more than four-decades, Greenspan warned that this situation will not last forever. He said financial markets will begin pushing long-term interest rates higher if investors do not see progress being made in dealing with the projected huge deficits that will occur once the baby boomers begin retiring.

    The more Greenspan clears his throat like this, the more the current occupant of 1600 Pennsylvania Avenue is going to get nervous.

  • UPDATE: Hey, it wasn't just my imagination, according to the Chicago Tribune:

    When Alan Greenspan speaks, others listen. They usually just don't understand.

    The Federal Reserve chairman is famous for his opaque remarks and abstruse topics. His interpreters even have coined a term for it: Greenspeak.

    But a more plain-spoken Greenspan has been on display this week.

    posted by Dan at 03:16 PM | Comments (97) | Trackbacks (0)

    Tuesday, February 24, 2004

    Bush to gays: go f@$# yourselves -- and do it out of wedlock

    So Bush endorses a constitutional amendment banning gay marriage:

    Bush said he was acting in accord with the "overwhelming consensus" of Americans. The "voice of the people" must be heard, he said, in the face of "activist judges" and local officials who are allowing gay marriages. He specifically mentioned recent court rulings in Massachusetts and the issuance of same-sex marriage licenses in San Francisco.

    "If we are to prevent the meaning of marriage from being changed forever, our nation must enact a constitutional amendment to protect marriage in America," the president said in a televised appearance in the White House Roosevelt Room.

    I still don't think it will happen -- and just to be clear, I sure as hell don't think it should happen. [But the "voice of the people"?--ed. Yeah, I'm pretty sure the voice of the people would have supported a flag-burning amendment back in 1988, but that would have been an equally dumb-ass amendment. The Republic is still standing despite that non-action, by the way.]

    A question -- is this a proposal that Bush genuinely believes in and is exploiting for political gain, or is this a proposal that Bush knows won't become law and is exploiting for political gain?

    Discuss below.

    UPDATE: Good discussion!!

    ANOTHER UPDATE: It goes without saying that Andrew Sullivan will be the place to go on this topic. This post makes an excellent point about the fact that the "full faith and credit" clause in the Constitution does not apply to marriage.

    posted by Dan at 03:27 PM | Comments (264) | Trackbacks (7)

    The controversial Sam Huntington

    I was a post-doctoral fellow at Samuel Huntington's Olin Center for Strategic Studies at Harvard in 1996/97, when The Clash of Civilizations and the Remaking of World Order first came out. Needless to say, it was a controversial book, and there was a lot of accusations made against Sam that were pretty much unfounded.

    At the end of the year, Huntington presented his first draft of a paper arguing that Hispanic immigration into the United States is different from and more troubling than previous waves of immigration (which was an extension of his concluding chapter in Clash). At the end of the talk, all of the fellows looked at each other and agreed that once this was published, the brouhaha over Clash was going to look like a tea party.

    Well, it's now published (or rather, part of it is published. All of it will be published in a book due out in May 2004 entitled, Who Are We: The Challenges to America's National Identity). Huntington's article, "The Hispanic Challenge" takes up a large part of the March-April issue of Foreign Policy. I could pick a paragraph at random and it will inflame a lot of people, but I'm betting these two will be quoted ad nauseum within the next month:

    In this new era, the single most immediate and most serious challenge to America's traditional identity comes from the immense and continuing immigration from Latin America, especially from Mexico, and the fertility rates of these immigrants compared to black and white American natives. Americans like to boast of their past success in assimilating millions of immigrants into their society, culture, and politics. But Americans have tended to generalize about immigrants without distinguishing among them and have focused on the economic costs and benefits of immigration, ignoring its social and cultural consequences. As a result, they have overlooked the unique characteristics and problems posed by contemporary Hispanic immigration. The extent and nature of this immigration differ fundamentally from those of previous immigration, and the assimilation successes of the past are unlikely to be duplicated with the contemporary flood of immigrants from Latin America. This reality poses a fundamental question: Will the United States remain a country with a single national language and a core Anglo-Protestant culture? By ignoring this question, Americans acquiesce to their eventual transformation into two peoples with two cultures (Anglo and Hispanic) and two languages (English and Spanish).

    The impact of Mexican immigration on the United States becomes evident when one imagines what would happen if Mexican immigration abruptly stopped. The annual flow of legal immigrants would drop by about 175,000, closer to the level recommended by the 1990s Commission on Immigration Reform chaired by former U.S. Congresswoman Barbara Jordan. Illegal entries would diminish dramatically. The wages of low-income U.S. citizens would improve. Debates over the use of Spanish and whether English should be made the official language of state and national governments would subside. Bilingual education and the controversies it spawns would virtually disappear, as would controversies over welfare and other benefits for immigrants. The debate over whether immigrants pose an economic burden on state and federal governments would be decisively resolved in the negative. The average education and skills of the immigrants continuing to arrive would reach their highest levels in U.S. history. The inflow of immigrants would again become highly diverse, creating increased incentives for all immigrants to learn English and absorb U.S. culture. And most important of all, the possibility of a de facto split between a predominantly Spanish-speaking United States and an English-speaking United States would disappear, and with it, a major potential threat to the country's cultural and political integrity.

    So far, James Joyner, David Adesnik, and David Brooks have commentary.

    I disagreed with Huntington about his Clash thesis, and I think he's wrong now. I'll be posting much more about this later. For now, let's just say that Huntington's thesis has some serious empirical problems and a few theoretical ones left over from the Clash book.

    However, I want to close with two final interrelated thoughts. First, it would be dangerous to dismiss Huntington as some paleocon or crank -- he's neither. Read this Robert Kaplan biography of Huntington from the December 2001 Atlantic Monthly (one of the few things Kaplan has ever written that I agree with) to get a sense of Huntington's career.

    Second, most of the commentariat want Huntington to be wrong. That doesn't mean that he actually is wrong. Beware those who simply brand the argument as offensive and dismiss it out of hand -- Huntington is way too smart to be rejected without a sober evaluation of his thesis and evidence.

    UPDATE: David Glenn has a Chronical of Higher Education story about Huntington's article.

    posted by Dan at 11:11 AM | Comments (72) | Trackbacks (5)

    Monday, February 23, 2004


    I've been woefully remiss in failing to mention the current crisis in Haiti. The U.S. has dispatched 50 Marines-- a FAST (Fleet Antiterrorism Security Team unit -- to protect the embassy.

    For more, go check out HaitiPundit (link via Tyler Cowen, who's also worth reading on the topic).

    posted by Dan at 03:13 PM | Comments (17) | Trackbacks (2)

    A very important post about... swimsuits

    Slate's Josh Levin posts an amusing statistical summary of Sports Illustrated's 40th anniversary swimsuit issue:

    36 shots of women in swimsuits; 15 of women wearing only part of their suits and positioned strategically next to inner tubes, barns, etc.; eight women baring all or part of their nipples via moisture, chainmail, etc.; six women wearing nothing but body paint; one woman being smelled by sheep; another woman being fondled by a baby alligator; another woman whose bikini top is being removed by a dead-looking but ostensibly playful raven; one Jimmy Buffett CD; 11 interviews with members of the "swimsuit hall of fame," including the revelation that Stacey Williams has helped invent rüking, a sport that combines running and hiking; and one cover model, Veronica Varekova, who says the person she'd most like to meet is Charlie Rose. (emphasis added)

    In honor of Ms. Varekova's preference towards those of the geeky persuasion, it seems only fitting to reciprocate in kind by displaying's strong preference for supermodels who like geeks:


    [Why not a picture of Rose as well?--ed. He clearly needs no additional advertising whatsoever. Besides Varekova was on his show this past Friday.]

    UPDATE: D'oh!! Mickey Kaus beat me by a full day on this. Advantage: Kaus!!

    posted by Dan at 02:35 PM | Comments (18) | Trackbacks (0)

    Life as a Westerner in Jakarta

    Jay Drezner reports on what it's like to work in Jakarta:

    [B]eing in Jakarta doesn't make you feel very safe. The security around the city is overwhelming. Every car is searched before it approaches any major hotel or office building (including mirrors on wheels which search under the cars) and to walk into any building you usually have to go through a metal detector and have your bag searched. Now this creates a bit of tension, but what makes it even worse is that almost every local or expat living here who I speak to admits that pretty much all of this activity is for show to make foreigners feel like they are safer. None of these measures would really stop something like the JW Marriott bombing which took place last October. Any security that tried to go to that level would drive itself out of business due to being too customer unfriendly (and its pretty close to that as it is already).

    posted by Dan at 12:45 AM | Comments (5) | Trackbacks (0)

    Where are the new jobs?

    Virginia Postrel's story in today's New York Times Sunday Magazine takes a close look at where new jobs are being created -- and whether they show up in the payroll survey:

    In a quickly evolving economy, in which increased productivity constantly makes some jobs redundant, we notice the job losses. It is much harder to spot where new jobs are emerging. Our mental categories tend to be behind the times. When we think of jobs, we see factories, secretarial pools, police officers, lawyers. We forget all about jobs we see every day.

    The official job counters at the Bureau of Labor Statistics don't do much to overcome our blind spots. The bureau is good at counting people who work for large organizations in well-defined, long-established occupations. It is much less adept at counting employees in small businesses, simply because there are too many small enterprises to representatively sample them. The bureau's occupational survey, which might suggest which jobs are growing, doesn't count self-employed people or partners in unincorporated businesses at all. And many of today's growing industries, the ones adding jobs even amid the recession, are comprised largely of small companies and self-employed individuals. That is particularly true for aesthetic crafts, from graphic designers and cosmetic dentists to gardeners. These specialists' skills are in ever greater demand, yet they tend to work for themselves or in partnerships....

    In every booming job category I looked at [stone crafters, massage therapists, manicurists] official surveys were missing thousands of jobs. As the economy evolves, however, this bias against small enterprises and self-employment becomes more and more significant. By missing so many new sources of productivity, the undercounts distort our already distorted view of economic value -- the view that treats traditional manufacturing and management jobs as more legitimate, even more real, than craft professions or personal-service businesses. But the truth is, value can come as much from intangible pleasures as it can from tangible goods.

    I'd say more about this story, but Bob McGrew beat me to my own narrative.

    One semi-provocative thought, however. Most of the job categories mentioned in Postrel's essay have something of a 'feminine' cast to them. The job sector with the biggest job losses -- manufacturing -- has a decidedly masculine cast. It's undoubtedly difficult for workers to transition from manufacturing to services. Could gender barriers make the current economic transformation even more difficult for displaced workers?

    UPDATE: Brad DeLong thinks these undercounts are insignificant:

    [T]here is no reason to think that the totals of nationwide employment--which are derived from these second and third of these data sources--are substantial undercounts because of any significant "bias against small enterprises and self-employment."

    See also here.

    ANOTHER UPDATE: Postrel responds.

    That article is not designed to enter the ongoing, and quite partisan, debate about what the household versus payroll surveys tell us about current levels of employment.

    My interest was in the question, Where will new jobs come from? A lot of non-economists are genuinely afraid that in the future there will be no jobs, or that there will be no jobs for people without large amounts of education--people like Denise Revely. From other research, I know of a number of aesthetic professions where jobs are growing rapidly. I found that in every such category the BLS counts were way under or, at best, obscured in categories dominated by losses in traditional manufacturing (e.g., paper mill workers vs. stone fabricators).

    There's another follow-up post here that's worth reading in full.

    posted by Dan at 12:32 AM | Comments (35) | Trackbacks (3)

    Sunday, February 22, 2004

    The war on terror and civil liberties

    Ethan Bronner has an essay in today's New York Times Book Review on the numerous tomes alleging that the War on Terror combined with John Ashcroft ''are responsible for some of the most egregious civil liberties violations in the history of our nation'' according to one of these books. Bronner does a nice job of putting these issues into the proper perspective:

    If you believe these changes are eroding the liberties that make this nation great, these books are for you. They will give texture and sharpness to your rage. You can pick from among them based on your level of concern. If you are incensed, go for the Brown essay collection, ''Lost Liberties.'' In it, Aryeh Neier says, ''We are at risk of entering another of those dark periods of American history when the country abandons its proud tradition of respect for civil liberties.'' And Nancy Chang of the Center for Constitutional Rights says that executive measures taken in the wake of the Patriot Act ''are responsible for some of the most egregious civil liberties violations in the history of our nation.'' Given the suspension of the writ of habeas corpus during the Civil War, the Palmer raids in World War I and the internment of Japanese-Americans in World War II, both of these statements seem to me hard to defend....

    We are at an odd moment in our political debate. Liberals, who favor big government, oppose the one we have now because of who controls it. Conservatives, who shun big government, have discovered the pleasures of having one at their disposal. And in this election year, every debate feeds into a partisan struggle for victory. The truth is that even most liberals would not be so upset about tightening border controls and easing F.B.I. restrictions if this administration showed some understanding of how to confront militant Islam with something other than force. It acts unilaterally and calls it leadership. That only makes one suspicious of everything it does. But liberals must realize that some things are correct and legitimate even if George Bush believes them.

    Read the whole thing.

    posted by Dan at 12:18 PM | Comments (46) | Trackbacks (2)

    Yet another reason to procrastinate

    That whole universe-collapsing-upon-itself fear I have on occasion appears to be unfounded.

    posted by Dan at 12:10 PM | Comments (6) | Trackbacks (0)

    Saturday, February 21, 2004

    Drezner to ABC: get better promo writers!

    Here's ABC's This Week preview for tomorrow's show:

    Democratic presidential front-runners Sens. John Kerry, D-Mass., and John Edwards, D-N.C., will go head to head on ABCNEWS' This Week with George Stephanopoulos in separate interviews airing this Sunday. (boldface added)

    Anyone else see the oxymoron in this plug?

    posted by Dan at 03:53 PM | Comments (14) | Trackbacks (1)

    Will Nader raid the Deaniacs?

    Fox News reports that Ralph Nader "will enter the 2004 race for the White House as an independent candidate." He'll announce on Meet The Press this Sunday.

    This is somewhat different from Nader's 2000 race, when he was the Green Party candidate. Running as an independent will likely make it harder for Nader to get registered on all 50 state ballots plus the District of Columbia, since he won't be able to rely on the Green Party infrastructure (don't laugh, it exists) to help him out.

    That said, one wonders if Nader would attract disgruntled Deaniacs -- regardless of what Dean says.

    Josh Marshall provides the Democratic spin on this development. However, Wonkette's headline says the same thing, but has the triple advantage of being shorter, saucier and funnier.

    UPDATE: For those on the right chuckling about this, scroll down the Politics1 blog, which suggests that former Alabama Chief Justice Roy Moore might run for President on the Constitution Party ticket.

    ANOTHER UPDATE: OK, go ahead and chuckle -- Josh Chafetz says that Moore ain't running.

    posted by Dan at 03:27 PM | Comments (25) | Trackbacks (0)

    Friday, February 20, 2004

    The Economist vs. the New York Fed on jobs

    The cover of the Economist this week is on the outsourcing issue. Here's a link to their editorial. The key graf:

    For the past 250 years, politicians and hard-headed men of business have diligently ignored what economics has to say about the gains from trade—much as they may pretend, or in some cases even believe, that they are paying close attention. Except for those on the hard left, politicians of every ideological stripe these days swear their allegiance to the basic principle of free trade. Businessmen say the same. So when either group issues its calls for barriers against foreign competition, it is never because free trade is wrong in principle, it is because foreigners are cheating somehow, rendering the principles void. Or else it is because something about the way the world works has changed, so that the basic principles, ever valid in themselves, need to be adjusted. And those adjustments, of course, then oblige these staunch defenders of free-trade-in-principle to call for all manner of restrictions on trade.

    In this way, protectionism is periodically refreshed and reinvented.

    Here's the cover story. It's worth a read, but there is one off-kilter point. At one juncture, the story says:

    Although America's economy has, overall, lost jobs since the start of the decade, the vast majority of these job losses are cyclical in nature, not structural. Now that the economy is recovering after the recession of 2001, so will the job picture, perhaps dramatically, over the next year. (emphasis added)

    What's weird is that the story provides a link to an August 2003 Federal Reserve Bank of New York Paper on why this economic recovery is different from other economic recoveries. Their conclusion:

    We explore why the recovery from the most recent recession has brought no growth in jobs. We advance the hypothesis that structural changes—permanent shifts in the distribution of workers throughout the economy—have contributed significantly to the sluggishness in the job market.

    We find evidence of structural change in two features of the 2001 recession: the predominance of permanent job losses over temporary layoffs and the relocation of jobs from one industry to another. The data suggest that most of the jobs added during the recovery have been new positions in different firms and industries, not rehires. In our view, this shift to new jobs largely explains why the payroll numbers have been so slow to rise: Creating jobs takes longer than recalling workers to their old positions and is riskier in the current uncertain environment.

    How different is this recovery? Take a look at this chart:

    Share of Total Employment in Industries Undergoing Cyclical Changes and in Industries Undergoing Structural Changes


    As the NY Fed paper notes:

    The parallels between the two most recent recoveries raise hopes that the current recovery will ultimately follow the same course as its predecessor. After about eighteen months, the 1991-92 recovery ushered in very strong employment growth and the longest economic expansion of the postwar period.

    posted by Dan at 06:33 PM | Comments (23) | Trackbacks (3)

    What explains the drop-off in the work force?

    The puzzle about the current employment situation is that the unemployment rate has declined even though job creation has been sluggish. The reason this has taken place is that the number of people who consider themselves in the work force has declined. No one knows why this is the case.

    Tyler Cowen summarizes a Wall Street Journal story from Tuesday offering possible explanations. Go check them out.

    posted by Dan at 11:10 AM | Comments (49) | Trackbacks (1)

    Whither Europe's influence?

    Martin Woollacott says in today's Guardian that European Union's influence is waning in the rest of the world:

    The European Union will eventually get its internal affairs in order to some degree. But it will be doing so at a time when long-term trends are taking away some of the influence it once enjoyed, and some of the opportunities it might have expected as a consequence of European successes in the future.

    These trends are not, in the first instance anyway, those to do with population, pensions, migration, and out-sourcing that have led to suggestions that Europe will be increasingly outpaced by America, India and China. More important is the simple fact of lost leverage in the three regions of most importance to Europe - the US, Russia and the Middle East.

    When he gets to the Middle East, here's his rationale:

    But it is in the Middle East that Europe's star is faintest. The reason is that, although Europeans have enjoyed no real independence of action in the region for decades, there have always been Arab hopes that there would come a moment when Europe would act as a real counterbalance to the United States and Israel.

    However, in spite of European opposition to the war in Iraq and in spite of European efforts, notably those of Tony Blair, to persuade the United States to deal with the conflict between Israelis and Palestinians more evenhandedly, Arabs are shifting in their view of Europe. Many see us not only as ineffectual but as essentially American collaborators, with the presence of European troops in Iraq, and more perhaps to come, counted as proof.

    Wollacott has half a point, in that those realpolitik-minded Arabs desperately want more multipolarity in the system. However, in the future, Europe's standoffishness on Iraq might cause their influence to wane among future leaders. Tom Friedman's column from yesterday makes this point. One highlight:

    One major criticism of the Iraq war is that by invading Iraq, the U.S. actually created more enemies in the Arab-Muslim world. I don't happen to believe that, but maybe it's true. What the critics miss, though, is that the U.S. ouster of Saddam Hussein has also triggered the first real "conversation" about political reform in the Arab world in a long, long time. It's still mostly in private, but more is now erupting in public. For this conversation to be translated into broad political change requires a decent political outcome in Iraq. But even without that, something is stirring....

    Abd al-Hamid al-Ansari, the former dean of Qatar University's law school, just published an essay, in London's widely read Arabic-language daily Al Sharq Al Awsat, which asks whether the world is better off because of the U.S. ouster of Saddam. Those who say it is worse off, he argues, see only half the picture.

    "Let us imagine the world if America had listened to the French and German logic saying: Give the murderers of the Serbs and the Arabs a chance for a diplomatic solution. Would Bosnia, Kuwait and Iraq be liberated? Let us describe the situation of the Arabs, and especially of Iraq, had America listened to the European counsel that said: democracy is not suited to the Arabs, their culture is contrary to it. . . . See now how many countries are turning toward democracy. Even Afghanistan has a constitution. In Iraq [they are drafting] a new constitution and handing over the regime, and Libya has changed." (Translation by Memri.)

    posted by Dan at 10:42 AM | Comments (16) | Trackbacks (1)

    Thursday, February 19, 2004

    A party flip-flop on trade?

    Matthew Yglesias responds to my Wisconsin post with an intriguing hypothesis:

    NAFTA has become unpopular among Republicans, while Democrats like it fine. It gets -5 from white evangelicals, -6 from rural whites, -4 in exurban counties, -5 among white male seniors, and a whopping -17 among white non-college married men. And that's NAFTA among Republican loyalists. The only GOP-voting groups who like NAFTA are residents of the Deep South (+1) and college-educated white married men (+10).

    When you look at Democratic voting blocks, union families, unsurprisingly, don't like NAFTA (-12) but all the others do. African Americans +3, Latinos +7, seculars +4, women with postgraduate degrees +13, and residents of "cosmopolitan states" +2.

    Given that configuration and the increasing importance of service and public sector unions (who have no reason to fear trade) in the AFL-CIO, I wouldn't be surprised at all if over the next few years the parties wound up completing the flip on trade issues that began with Clinton's support of NAFTA and continued with Bush's steel tarrifs and farm giveaways. The current political dynamic seems to indicate a return to protectionism on the part of the Democrats, but that's masking an underlying trend in which the Democratic electorate is increasingly pro-trade and the GOP electorate increasingly anti-trade. When you consider that all the big fights in manufactured goods have really all already happened and that the future issues are going to be agriculture and textiles, which are mostly done in Republican states, you see the trend even clearer.

    I have no idea where Yglesias is getting his numbers, but let's assume they're accurate. [UPDATE: Matt reveals his source] I'm still not sure he's right. I'll leave the debate to commenters [You're slagging off on your own analysis--ed. Sorry, I'm crashing on a few projects and leaving soon to give a talk at Notre Dame.]

    posted by Dan at 10:33 AM | Comments (54) | Trackbacks (6)

    Wednesday, February 18, 2004

    Open Wisconsin thread

    Given the Wisconsin primary results, two questions:

    1) Does John Edwards have a chance to win?

    2) Even if Edwards doesn't have a chance, will he force Kerry to adopt a more protectionist stance on trade? Say what you will about Kerry's rhetoric this campaign season -- his voting record indicates a strong predeliction in favor of an open economy. One of Edwards' few wedge issues is NAFTA. Will this force Kerry to adopt positions that he knows to be wrong?

    posted by Dan at 10:17 AM | Comments (49) | Trackbacks (3)

    Tuesday, February 17, 2004

    Demographics and international relations

    Most commentators do not mention the role of demography in international relations, in large part because the study of population can seem dry (I won't lie to you -- until a few years ago, if I saw a talk with the the word "demography" in the title, I was already bored) and because the effect of current demographic trends usually don't play themselves out for generations.

    That said, Tyler Cowen links to a Nicholas Eberstadt essay in Policy Review that's worth a gander. First, Eberstadt actually justifies the failure to pay attention to demography:

    By comparison with other contemporary forms of change — social, economic, political, technological — demographic changes are very slow and very regular.... And demographic change is only sharp and discontinuous in times of utter upheaval and catastrophe (circumstances, to be sure, not unfamiliar to modern Russia, China, Cambodia, and Korea — and a number of other Asian or Eurasian populations). From the standpoint of strategic demography, momentous developments can and do occur from one generation to the next, but rather less of note can be expected to take place over the course of three to five years.

    That said, Eberstadt instroduces some startling facts -- and the same one that caught Tyler's attention caught mine:

    Between 2000 and 2025 China’s median age is set to rise very substantially: from about 30 to around 39. According to unpd projections for 2025, in fact, China’s median age will be higher than America’s. The impending tempo of population aging in China is very nearly as rapid as anything history has yet seen. It will be far faster than what was recorded in the more developed regions over the past three decades and is exceeded only by Japan. There is a crucial difference, however, between Japan’s recent past and China’s prospective future. To put the matter bluntly, Japan became rich before it became old; China will do things the other way around. When Japan had the same proportion of population 65 and older as does China today (2000), its level of per capita output was three times higher than China’s is now. In 2025, 13.4 percent of China’s population is projected to be 65-plus; when Japan crossed the 13.4 percent threshold, its per capita gdp was approaching $20,000 a year (constant 1990 ppp dollars). One need not be a “Sino-pessimist” to suggest that China will be nowhere near that same economic marker 22 years from now....

    Thus, China’s rapidly graying population appears to face a triple bind. Without a broad-coverage national pension system, and with only limited filial resources to fall back on, paid work will of necessity loom large as an option for economic security for many older Chinese. But employment in China, today and tomorrow, will be more physically punishing than in oecd countries, and China’s older cohorts are simply less likely to be up to the task. The aggregation of hundreds of millions of individual experiences with this triple bind over the coming generation will be a set of economic, social, and political constraints on Chinese development — and power augmentation — that have not as yet been fully appreciated in Beijing, much less overseas.

    However, the startling fact in Eberstadt's article in the increasing gender imbalance in Chinese and Indian birth rates -- a function of "1) strong and enduring cultural preference for sons; 2) low or sub-replacement fertility; and 3) the advent of widespread technology for prenatal sex determination and gender-based abortion."

    Eberstadt's conclusion is sobering:

    It would be cheering to think that the gender imbalances emerging in Asia’s major population centers were a vestige of backward ideas and will consequently pass away with increasing modernization. The facts to date, unfortunately, do not support such an interpretation. In both India and China over the past two decades, the nationwide sex ratio at birth has increased along with per capita income, female literacy rates, and urbanization. In China today, the more literate provinces tend in fact to have somewhat higher, not lower, sex ratios at birth; and in India it is urban, not rural, areas in which the disproportion between boys and girls is greatest. For the time being, we must live with the disturbing possibility that continuing “development” and “globalization” will heighten rather than reduce nascent gender imbalances in these two enormous countries — and the knowledge that these particular expressions of “Asian values” will have unpredictable but perhaps not inconsequential repercussions on society and politics in these ostensibly rising powers for decades to come.

    Read the whole thing.

    posted by Dan at 03:14 PM | Comments (64) | Trackbacks (5)

    The lure of the dollar

    On Friday, the Associated Press reported that the U.S. trade deficit hit an all-time high, both in terms of dollar value ($489.4 billion) and as a percentage of GDP.

    To finance this deficit, the U.S. needs to run a capital account surplus roughly equal in amount. The trouble is, the dollar countinues to depreciate against other currencies, and Daniel Gross argues in Slate that there's little the U.S. government can do to halt the slide, despite the wishes of the G-7.

    Combined, this appears to have stoked two mutually inconsistent concerns -- 1) Foreigners are purchasing too many American debts and assets; and 2) If the dollar continues to slide, foreigners won't want to buy our assets any more.

    On the latter front, the fears seem to be overhyped, as the Financial Times reports:

    Foreign investors provided a vote of confidence in US asset markets last year by increasing the amount of money they invested in the US even as the dollar fell, according to capital flow data by the US Treasury.

    A monthly report released on Tuesday showed net inflows into US markets totalled $75.7bn in December last year, down from $87.5bn the month before, but still far more than the $27.7bn seen in October or the $4.2bn inflow registered in September....

    Net flows into US equities rose to a strong $13.3bn in December from $8.8bn the month before compared with an average inflow of $3.1bn over the year. In the bond market, net inflows into the Treasury market slipped to $29.8bn from $33.4bn but remained well above the $22.8bn monthly average....

    Michael Woolfolk, currencies strategist at Bank of New York, said the December numbers were "overwhelmingly" positive for the dollar.

    "It shows that the decline in US interest rates to four decade lows has not undermined foreign appetite for US securities to the degree thought earlier" he said.

    As to the first concern -- foreigners purchasing too many dollar-denominated securities -- I'll leave that to the commenters. I'd say the best analogy to that situation is the conditions that would prompt a run on a bank.

    posted by Dan at 11:08 AM | Comments (25) | Trackbacks (0)

    Monday, February 16, 2004

    Nothing to see here

    The Associated Press reports a flat denial by the woman suspected of having an affair with John Kerry:

    A woman who has been the subject of rumors linking her to Sen. John Kerry denied Monday that she ever had an affair with the Democratic presidential candidate.

    Breaking her silence four days after the allegations surfaced on the Internet, Alexandra Polier issued a statement to The Associated Press, saying, "I have never had a relationship with Senator Kerry, and the rumors in the press are completely false."

    Kerry already has denied reports that he had an extramarital affair. On Monday, his campaign said he would have no further comment....

    Polier also took issue with reports that referred to her as a former Kerry intern.

    "I never interned or worked for John Kerry," she told AP over the phone.

    In a separate statement, Polier's parents, Terry and Donna Polier of Malvern, Pa., dismissed the "completely false and unsubstantiated" allegations about their daughter.

    "We love and support her 100 percent and these unfounded rumors are hurtful to our entire family," the statement said. "We appreciate the way Senator Kerry has handled the situation, and intend on voting for him for president of the United States."

    The statement did not address purported quotes by Polier's parents in the British tabloid The Sun that were harshly critical of Kerry....

    Asked Friday about the reports, Kerry told reporters: "I just deny it categorically. It's rumor. It's untrue. And that's the last time I intend" to respond to questions about it.

    posted by Dan at 05:32 PM | Comments (49) | Trackbacks (1)

    Europe and outsourcing

    How is Europe dealing with outsourcing? This article provides an interesting clue:

    IBM Corp. cornered an outsourcing contract with Dutch life assurance and pensions business Delta Lloyd Group on Monday. The seven-year deal is worth - 200 million (US$255 million), according to IBM....

    European companies are increasingly turning IT operations over to large U.S. corporations such as IBM and its competitors Hewlett-Packard Co. (HP) and Electronic Data Systems Corp.

    "It is an interesting time in the outsourcing industry, where you have massive companies, like IBM, that dwarf their customers," said Kirk Smith, of U.K. IT services provider LogicaCMG PLC. European companies are feeling the pull of U.S. and U.K. business models that require businesses to control the level of costs, playing into the strengths of outsourcing deals, according to Smith.

    "Companies in Europe realize they have to exist in a global economy, and in doing so are turning to outsourcing," he said. "The large companies like IBM and HP are appealing because they are well-known brands with a global reach." Across Europe, businesses are outsourcing departments from IT to human resources as well as finance and accounting. "It's now really getting to the heart of business," Smith said.

    Last month, Nokia Corp., the world's largest mobile phone maker, announced it had granted IBM a five-year global IT outsourcing deal valued at - 200 million. IBM will handle Nokia's IT Helpdesk operations as well as manage and develop the Espoo, Finland, company's desktop IT environment.

    [Sure, that's what European firms are doing. But the European Union is cheesed off, right?--ed. Not according to this report:

    A European Union delegation said Monday outsourcing was beneficial for the world economy and added it understood India's concerns about objections in western nations to shifting jobs overseas.

    "It's something that is good for you (India) and good for our service industries," EU's External Relations Commissioner Christopher Patten told reporters in New Delhi.

    "We have no problems with outsourcing. We are very understanding of India's concerns on the issue."...

    Patten said the EU believed western outsourcing of jobs to countries like India, Mexico and China, where labour costs are lower and goods can be produced more cheaply, was an "an aspect of a more liberal world economy."

    UPDATE: This trend of European outsourcing to the United States is consistent with this editorial by Michael Walden from two weeks ago. The highlights:

    While outsourcing has captured current attention, it is not a new phenomenon. If the term is defined as jobs operated by U.S. companies in foreign countries, the current total is 10 million positions, or 7 percent of domestic U.S. employment. Further, there's been an upward trend in the number of outsourced jobs since the mid-1990s, when trade barriers were significantly reduced following the signing of the NAFTA and GATT agreements.

    What is less well publicized and understood is that "insourcing" also occurs in our economy. Insourcing happens when foreign companies establish jobs in the United States.

    The latest statistics show insourcing accounts for over 6.5 million jobs nationwide. Although this is less than the number of outsourced jobs, the gap has actually narrowed in the past quarter century. That is, there's been a recent trend of foreign companies adding jobs in the U.S. faster than U.S companies have increased jobs in foreign countries....

    The scorecard on job outsourcing versus job insourcing has actually moved in the favor of the U.S. in recent decades, and policy-makers must consider both when evaluating the worldwide movement of jobs.

    posted by Dan at 02:35 PM | Comments (8) | Trackbacks (2)

    A beacon of multilateralism

    The Financial Times reports that the largest single economic entity in the world is shirking its international obligations and alienating the rest of the world -- again:

    A bid by World Trade Organisation members to breathe new life into stalled global trade talks has got off to a shaky start after a series of meetings this week in Geneva between the main protagonists failed to produce any new initiatives.

    In particular, European Union negotiators gave no sign of greater flexibility on phasing out farm export subsidies by a fixed date, which most WTO members see as essential to a successful conclusion of the Doha round.

    "We heard the same old story," one trade diplomat said on Friday after two days of talks between the EU and the Group of 20 developing countries led by Brazil. "There wasn't anything new."....

    The EU, the main user of export subsidies, has said it is prepared to consider a phase-out for commodities of interest to poorer nations, but not for all products. EU officials this week repeated their request for a list of products for consideration, but G20 nations maintain that a list is unnecessary because all the EU's subsidised exports compete with those of developing countries.

    UPDATE: I see from the comments that I'm being chided for not joining the BBC in blaming the United States for this state of affairs.

    Let me first stipulate that U.S. ag subsidies are an odious blight on our trade policy and should be eliminated as soon as possible.

    Let me then stipulate that, as I've said before, "if the U.S. commits a venal sin with its agricultural subsidies, then the European Union, Japan, South Korea, and Scandinavia are committing mortal sins with theirs." Click here for further discussion on this topic.

    And, just to make sure everyone has the same facts on this, let's reprint this Economist graph on ag subsidies:


    posted by Dan at 10:27 AM | Comments (44) | Trackbacks (2)

    Sunday, February 15, 2004

    The New York Times tackles outsourcing

    Today's Times has a round-up story on outsourcing in the aftermath of Gregory Mankiw's comments. Jagdish Bhagwati, an esteemed trade economist at Columbia, is quoted.

    He also has an op-ed in today's Times as well. The good parts:

    John Kerry, the presumptive Democratic presidential nominee, described executives who import services — such as using lower-paid workers in foreign countries to handle customer-service calls and Internet queries from American consumers — as "Benedict Arnold C.E.O.'s."

    In objecting to moving service jobs overseas, Senator Kerry is wrong on two counts. First, his economics is faulty: the practice only adds to the overall economic pie and improves the competitiveness of American companies. In a world economy, firms that forgo cheaper supplies of services are doomed to lose markets, and hence production. And companies that die out, of course, do not employ people.

    Second, Mr. Kerry is making a political error. By playing to the understandable but incorrect fears of American workers that outsourcing is "taking away" jobs from Americans, he is painting the Democratic Party into the wrong corner on trade issues.

    The most interesting part is Bhagwati's point that while many blame trade for job losses, it has far more to do with technological change:

    Unfortunately, the issue is further confused by claims that American jobs are being "transferred" abroad. This is usually not the case. When I came to my university 25 years ago, I got a secretary. Today, the new hires get a computer instead. In India, where a secretary costs a small fraction of what one would in New York City but a computer costs more, any Indian professor who asked for a new laptop would probably get a secretary instead. It is simply a matter of economic reality in both places. The hiring of the secretary in India should not be seen as "transferring" a job out of New York.

    The fact is, when jobs disappear in America it is usually because technical change has destroyed them, not because they have gone anywhere. In the end, Americans' increasing dependence on an ever-widening array of technology will create a flood of high-paying jobs requiring hands-on technicians, not disembodied voices from the other side of the world.

    For more on the technological driver behind the current creative destruction, Glenn Reynold's TCS column from last November is still salient.

    The final outsourcing link of the day is the February 12th transcript from Lou Dobbs Tonight, during which Mr. Dobbs tangled with James K. Glassman on the subject. It was, to say the least, a yeasty conversation. [UPDATE: Dobbs' exchange with Bruce Bartlett is less yeasty but equally informative.]

    posted by Dan at 03:47 PM | Comments (130) | Trackbacks (4)

    Friday, February 13, 2004

    The long knives of the Democrats

    I've discussed previously the role of foreign policy wonks as a leading indicator for presidential campaigns -- click here, here, and here for more.

    What I haven't discussed is what happens to those on the losing side of presidential campaigns. Franklin Foer's New Republic cover story on the rise and fall of the inside the Beltway Deaniacs covers this, and as someone acquainted with a lot of the principals, it makes for scary reading. Here's the relevant excerpt:

    Last week, I called Ivo Daalder, an alumnus of Bill Clinton's national security team, at his Brookings Institution office. And, while etiquette might dictate that Daalder lavish praise on the vanquished candidate, he spent our phone conversation critiquing Dean's foreign policy. In Daalder's view, the Vermont governor's positions on Iraq range from the facile--"bringing into [Iraq] one hundred thousand Muslim troops that don't exist"--to the self-destructive--"I didn't like that he criticized the [Democrats] senators who voted for the eighty-seven billion dollars. We can't get things right in Iraq without the funding."

    What makes this rebuke of Dean's foreign policy particularly odd is that Daalder was himself a primary architect of that policy. It was Daalder who helped draft the speech Dean delivered at the Pacific Council for International Policy last December, outlining his approach to national security. In foreign policy interviews Dean gave to The Washington Post and The New York Times a day before that speech, Daalder sat by the governor's side. Similarly, it was Daalder who presided over a question-and-answer session at the National Press Club, when the Dean campaign unveiled its foreign policy team. According to one of his Brookings colleagues, who watched a procession of high-powered Democrats traipse to Daalder's office to pay respect to Dean, "Ivo was The Guy."

    In the wake of Dean's unraveling, however, Daalder is promoting a revisionist history of the campaign, where his status is downgraded to something significantly less than The Guy. "My position is that I'm happy to advise anyone." He pauses before adding, "I don't have a central role, and I never did."

    Why is Daalder backpedaling so furiously? Because he understands that he could suffer payback for his Deaniac days.....

    By the time Dean began assembling his national security team, though, most of the Democratic foreign policy establishment--which is now heavily clustered at the Brookings Institution--was already quietly committed to the Kerry, Wesley Clark, and John Edwards campaigns (in the case of some wonks, all three at once). Without the party's A-list names, the Dean campaign began searching for advisers in less glamorous quarters. For their foreign policy rollout, they signed up former Secretary of State Warren Christopher and former national security adviser Tony Lake--veterans of Clinton's first term. But, in Democratic circles, Clinton's first term is widely considered a low point in the party's foreign policy, and, in any case, Christopher and Lake weren't substantive advisers. So, last fall, Dean recruited two mid-level Clintonites from Brookings for his day-to-day needs, former Director of European Affairs at the National Security Council Ivo Daalder and former Assistant Secretary of State for African Affairs Susan Rice.

    For many in the Democratic foreign policy establishment, Dean was seen as dangerous. They worried that his strident opposition to the Iraq war would revive old clichés about the party's pacifism and that his claim that Saddam Hussein's capture did nothing to enhance U.S. security would prove fodder for countless GOP ads. No one was more concerned on this score than Daalder's Brookings colleague and occasional co-author, Michael O'Hanlon, who penned scathing op-eds in The Wall Street Journal and The Washington Times attacking Dean. O'Hanlon, who advises several of the candidates--including Kerry--told me, "More Democrats should have recognized [Dean's] danger and spoken out against him." Within Brookings, O'Hanlon's pieces were seen as a direct assault on Daalder and Rice and a break with the institution's genteel mores. One Brookings fellow describes them as "just bizarre. Forgive me, but that was personal, not professional." Others at the think tank reported witnessing loud, uncomfortable hallway arguments between Daalder and O'Hanlon over Dean.

    At the time, Dean was still riding high, and--O'Hanlon's attacks notwithstanding--so were Daalder and Rice. But now that Dean is done, Rice and especially Daalder may find their career prospects also dimmed. When I spoke with the foreign policy gurus who would likely stock a Democratic administration, they seemed to regard the Dean campaign as a debilitating black mark on one's resumé. It doesn't help Daalder that he took an aggressive posture during Dean's glory days. Instead of privately conceding his candidate's foreign policy shortcomings, Daalder defended him to the hilt. "After Dean delivered the line about Saddam's capture, Ivo was quite animated in defending that sentence," says one Brookings fellow. And, as a former Clinton administration official told me, "If you're a policy adviser, you exist to stop lines like that from being delivered. And, if it gets delivered over your objections, you have an obligation to fall on your sword. This whole campaign causes me to question [Daalder's and Rice's] judgment."

    As Kerry's consolidation of power continues, rancorous debates over the Dean campaign will probably disappear from the hallways of Brookings. But that doesn't mean that those disputes will be forgotten. One fellow at the Brookings Institution accuses Dean's foreign policy advisers of "contributing to a [campaign] that could have helped their careers but hurt the party." It doesn't look like Brookings will be regaining its gentility any time soon.

    Read the entire piece to see how AFL-CIO and the Democratic Leadership Council are handling the Deaniacs in their midst.

    [Wouldn't this happen with Republicans as well?--ed. You'd think so, except that many (though not all) of the neoconservatives believed to be currently running U.S. foreign policy supported John McCain over George W. Bush in 2000.]

    posted by Dan at 05:05 PM | Comments (24) | Trackbacks (2)

    Help wanted

    In theory, trade is a Pareto-improving for an economy as a whole -- that is to say, through free trade, some people can be made better off without others being made worse off. Now, that doesn't necessarily work in practice, unless the losers from trade are compensated by the winners.

    In theory, Trade Adjustment Assistance -- a program introduced in 1974 -- provides exactly this form of compensation. According to this Labor Department fact sheet, such benefits include:

    Training for employment in another job or career. Workers may receive up to 104 weeks of approved training in occupational skills, basic or remedial education, or training in literacy or English as a second language.

    Income Support known as trade readjustment allowances (TRA) are weekly cash payment available for 52 weeks after a worker's unemployment compensation (UC) benefit is exhausted and during the period in which a worker is participating in an approved full-time training program. Income Support is a combination of UC and TRA benefits for a maximum of 78 weeks (26 weeks for UC and 52 weeks for TRA).

    Job Search Allowance may be payable to cover expenses incurred in seeking employment outside your normal commuting area.

    Relocation Allowances provide reimbursement for approved expenses if you are successful in obtaining employment outside your normal commuting area for you to relocate to your new area of employment.

    In other words, TAA is designed to facilitate workers let go due to trade pressures to find jobs in more competitive sectors.

    Sounds great -- but it's not clear that, as currently written, outsourced workers would fit the criteria for inclusion. The criteria are:

    (1) that workers have been totally or partially laid off, and

    (2) that sales or productions have declined, and

    (3) that increased imports have contributed importantly to worker layoffs.

    Since a lot of offshore outsourcing takes place within a single firm, and it increases productivity, I doubt (2) would be met -- sales/output would increase and not decrease.

    Here's my question to informed readers:

    1) Am I reading this correctly?

    2) If so, to what extent should the TAA criteria be expanded?

    posted by Dan at 04:04 PM | Comments (20) | Trackbacks (0)

    What's going on in Fallujah?

    It would seem that hostility to the United States has not waned in Fallujah. The attack on General John Abizaid , the top U.S. military commander in Iraq, would seem to confirm this. This reporter's first-hand account of the attack contains this priceless passage:

    Abizaid was walking about, seemingly unfazed, talking to some of the Iraqi Civil Defense Corps members he had come to visit. I grabbed my camera and began shooting pictures of him talking to an Iraqi commander. I noticed Abizaid, an expert in Arab affairs, was speaking in Arabic. He told me later the commander said, with regard to the attack: "This is Fallujah. What do you expect?"

    This would seem to be Juan Cole's assessment as well. Certainly the increase in attacks in recent weeks is fueling fears of Balkanization.

    However, the Chicago Tribune has another story on Fallujah today suggesting that the situation might not be as bleak as first thought:

    The reputation of Fallujah is simple and fearsome: It's known as the toughest town in Iraq, the epicenter of the insurgency, the place where more than 35 American soldiers have lost their lives.

    An attack Thursday--when a top U.S. general's visit was disrupted by rocket-propelled grenades--added more evidence to the indictment.

    But something else is happening in Fallujah as residents look for a less violent way to get the Americans out. This city on the banks of the Euphrates River and at the edge of the desert is taking small but critical steps toward choosing its own government....

    there are signs of progress in a city where Hussein recruited the shock troops of his military and industrial complex. Water has been restored to 80 percent of the city and there is more electricity now than immediately after major combat, although blackouts still occur.

    And there is growing acceptance here that Fallujah has to join the rest of Iraq--at least politically--to secure a fair share of reconstruction cash.

    "I am not cooperating with Americans; I am dealing with them," said Mohammed Hassan al-Balwa, president of Fallujah's provisional city council. "We need to help ourselves."

    Read the whole article.

    UPDATE: The New York Times has more.

    posted by Dan at 10:15 AM | Comments (13) | Trackbacks (0)

    To post or not to post

    Mark Kleiman believes that it was in "extreme bad taste" for me to post on the Kerry business:

    So far only Drezner and some of the British papers, among the non-sleazaloid media, have picked this up. No self-respecting media outlet should be prepared to take this sort of unsourced second-hand sludge and run with it. We don't even know the name of the woman he's supposed to have been dating, making the story completely impossible to check.

    Some readers agree.

    First off -- Mark's facts are wrong. By the time I got around to posting on it, I'd seen blogposts from DailyKos, Atrios, Instapundit, and Andrew Sullivan, about the story. According to Jonah Goldberg, this allegation was first posted by a Wesley Clark blogger last week.

    Mark is also incorrect is saying that the Drudge Report and the National Enquirer story about Kerry are talking about the same thing. See John Hawkins on this.

    Second, I linked and quoted the DailyKos post at greater length, in large part because Kos' points on this were way more specific than Drudge's. He also confirmed that Wes Clark made statement about the Kerry situation to reporters. As I said before, what interests me is how the story got to Drudge. If it's from Clark, it would appear to fit in with this characterization of generals who fail at politics.

    I'll close with Andrew Sullivan's point on this, because it's true:

    [T]he internet has ended any semblance of a barrier between respectable news and gossip. Once Drudge has posted, the story is public. This is an awful development, but it is real. I should also say: I know of no hard evidence that this rumor is even faintly true. But true or not, if the Republicans planted it, they should be excoriated. If a rival Democratic candidate did, ditto.

    UPDATE: Tim Noah has the full list of rationales -- mine are #3 and #8.

    posted by Dan at 09:04 AM | Comments (18) | Trackbacks (0)

    Thursday, February 12, 2004

    To care or not to care

    Megan McArdle has adopted an official position on the Kerry Kerfuffle:

    I don't care. I don't care so much that I wish I could hit myself in the head wtih a hammer right now until all memory of this story falls out and makes room for something useful....

    It's mildly interesting from a sociological standpoint --are these guys all having affairs with their interns?-- but in the final analysis, who the hell cares? Not me. I'm going to go have a stiff drink and try to forget I ever heard about this. Not that I imagine my drinking companions will let me. Sigh.

    I mostly agree with Megan's first sentence, in that this sort of information would be unlikely to affect my vote. However, I will confess to being interested in a) how this story became a story, and; b) whether Kerry will be able to ride it out. My gut-level responses are a) Lehane and b) yes.

    On Megan's socioligical question regarding fascination with interns, David Plotz penned a Slate essay during the Chandra Levy disappearance that's worth excerpting cause it's true:

    Washington's interns are valuable more for psychological reasons than economic ones. Though Hill rats would never admit it, interns decynicize D.C.; Washington thrills them (at least for the six weeks till their disillusionment). They may be calculating and ambitious, but they remind their beaten-down editor, their dispirited chief of staff, their venal executive director of why what they do is important and interesting and exciting. Their idealism is fuel for the city.

    This vitality is also why it's so easy to understand the not-infrequent affairs between female interns and powerful men. (Though there are no good numbers on this, anecdotal evidence suggests that females are a growing majority of D.C. interns.) The intern is attracted to the man for obvious reasons: The interns are young, they're hormonal, and they're political junkies. To them, a second-rate congressman looks like Mick Jagger.

    And why are the men infatuated? It's not just because the interns are young and sexy. It's because the interns still honestly believe in Washington, believe that a congressman is just as important as he thinks he is. In a jaded city, that faith is the rarest and most enticing quality of all.

    UPDATE: Sorry about the technical errors in the first version of this post.

    posted by Dan at 06:20 PM | Comments (35) | Trackbacks (3)

    Hidden tech in rural Massachusetts

    I've blogged before about how rural areas can sustain economic growth in the wake of factory shutdowns. Now, Virginia Postrel links to a fascinating Red Herring article about "hidden tech" -- self-employed techies migrating away from urban areas to places like the Pioneer Valley and the Berkshires in Western Massachusetts:

    With the rapid adoption of inexpensive broadband technology, and the cost of urban living still high despite the downturn, tech communities are popping up in unlikely places. Migratory entrepreneurs have set up shop in places as diverse as Grand Forks, North Dakota, Wenatchee, Washington, Bozeman, Montana, and Amherst, Massachusetts – scrapping the rat race and cutting back on their business costs, to boot. Many of these businesses are home-based and unincorporated, literally hidden from view and flying under the radar of government statisticians. Still, these "hidden tech" communites are getting VC [venture capital] attention....

    Going solo certainly has its upside, according to the study: hidden tech entrepreneurs often pull six figures, and claim clients as powerful, and diverse, as the Vatican, the Thomas Register, and Boeing....

    Why does the hidden tech trend matter?

    In a "jobless recovery," with the government reporting growth in self-employment nationwide, economic development experts believe that the hidden tech population may be a badly needed shot in the arm for the American economy. In some cases, with manufacturing increasingly moving offshore, these entrepreneurs may be the only growing economies in some regions, especially in rural areas....

    These new communities are also fresh, fertile ground for venture capitalists, as Village Ventures of Williamstown, Massachusetts has discovered. Analysts there have identified 101 emerging tech communities nationwide – from Lexington, Kentucky to Charleston, West Virginia – and have located new funds in areas such as Tucson, Arizona, and Lexington and Worcester, Massachusetts.

    For another story about this phenomenon, click here. Other reports can be found at the Hidden Tec website.

    Postrel points out, "[T]his is yet another suggestion--admittedly anecdotal--that the economy may be shifting toward work that doesn't get counted in the jobs data."

    Is this true? Elise Gould makes a powerful argument that the payroll survey is more reliable than the household survey on job creation (link via Brad DeLong). But on the self-employment question, she says:

    A... critique of the payroll survey is that it leaves out self-employment. However, because the household survey employment reports do not distinguish between the self-employed who are gainfully employed and those who are searching for work—and because the numbers of self-employed nonearners would be expected to increase during tough economic times—the omission of self-employment numbers from the payroll survey may more accurately reflect overall employment trends.

    Here's my question: what happens when economic times are improving, but payroll data about job creation remains sluggish? This could be an explanation.

    A question to readers -- is hidden tech an important trend that captures job creation, or is it more of a "boutique" phenomenon?

    posted by Dan at 04:14 PM | Comments (24) | Trackbacks (0)

    Will the Kerry bubble pop?

    As Josh Chafetz pointed out, an awful lot of centrist media pundity (Jonathan Chait, Will Saletan, Mickey Kaus, Noam Scheiber) predicted earlier this week that the Democratic primary this year resembles a speculative bubble -- a candidate retains their value only if everyone shares the same common conjecture that the candidate is "electable." According to this logic, Kerry is just as vulnerable to crashing and burning as Dean.

    Which leads to Matt Drudge reporting today that a scandal is brewing over Kerry's relationship with a woman other than Theresa Heinz:

    A frantic behind-the-scenes drama is unfolding around Sen. John Kerry and his quest to lockup the Democratic nomination for president, the DRUDGE REPORT can reveal.

    Intrigue surrounds a woman who recently fled the country, reportedly at the prodding of Kerry....

    A serious investigation of the woman and the nature of her relationship with Sen. John Kerry has been underway at Time magazine, ABC News, the Washington Post, The Hill and the Associated Press, where the woman in question once worked....

    In an off-the-record conversation with a dozen reporters earlier this week, General Wesley Clark plainly stated: 'Kerry will implode over an intern issue.'"

    Now, to be blunt, the Drudge story is pretty incoherent except in saying that there's a brewing scandal involving a women and Wesley Clark said "intern." Editor & Publisher says:

    Reached by E&P for comment, AP spokesman Jack Stokes said, "We simply don't comment on stories we are pursuing or not pursuing."

    Leonard Downie Jr., executive editor of The Washington Post, acknowledged that his staff had begun to dig deeper into the life and career of Kerry, but said he had not heard anything about an alleged infidelity. "What we're finding, I don't know," he said. "This is the first we are looking into him this way."

    The Scotsman has a straight news summary

    Here's the DailyKos report:

    [T]his isn't Drudge's story. It's been around for several weeks. Clark was talking about it to reporters (I confirmed it independently from the Drudge piece). It was common knowledge, but the press sat on it for whatever reason (looking for confirmation? Hoping to avoid being labeled as gossip mongers?).

    That said, it's a bullshit story. Kerry had an active and public romantic life in between his first wife and Theresa. I remember reading about his "wild" days in the Senate somewhere. But he was single (or at worst legally separated), and darn it, being single and having sex is a good thing. And the dalliances weren't even with his interns. (emphases in original)

    I have absolutely no idea how this story will play itself out.

    I do wonder if Mark Kleiman's admiration for Wes Clark's candidacy might have been misplaced. [Kos' suspicions focus on Chris Lehane, not Clark. And Drudge has an e-mail saying Lehane was shopping this around--ed. Regardless of how the story plays out, one thing is absolutely clear -- Clark was a willing mouthpiece.]

    UPDATE: OK, now this gets really bizarre. From the Associated Press:

    Wesley Clark will endorse presidential contender John Kerry, a high-profile boost for the front-runner as he looks to wrap up the party's nomination, according to Democratic officials.

    With next week's Wisconsin primary looming, Clark plans to join Kerry at a campaign stop in Madison, Wis., Friday to make a formal endorsement, said officials, speaking on condition of anonymity.

    Clark spokesman Matt Bennett would not confirm the endorsement, and would only say, "General Clark is looking forward to going to Wisconsin to be with Senator Kerry."

    ANOTHER UPDATE: Glenn Reynolds acts as the focal point with lots of links, all of them suggesting Chris Lehane as the instigator.

    Wonkette asks, "Is Kaus too busy celebrating to post on this?" She's right -- a story that could potentially drag down Lehane and Kerry? It's Mickey's Zarqawi memo! [UPDATE: he's now posted]

    posted by Dan at 02:55 PM | Comments (36) | Trackbacks (3)

    Follow-up on the global Southern Strategy

    A few months ago I wrote a TNR Online essay about large developing countries trying to form a coalition to counter the United States and the European Union. The Economist has more on Brazilian president Luiz Inácio Lula da Silva's role in this. Key grafs:

    Lula looks like an ardent promoter of an old idea, fashionable in the Non-Aligned Movement in the 1970s: that poor countries can stand up to rich ones and achieve development by co-operating with each other. In 20 foreign trips since taking office in January 2003, Lula has tried to rally developing countries like the union organiser he used to be. He has formed a co-operation pact with India and South Africa, two other emerging democracies. In Geneva last week he joined UN chief Kofi Annan and the presidents of Chile and France in calling for a noble-sounding fund to fight world hunger, whose details are vague....

    South-south trade is unlikely to pay off so handsomely soon. China will be a fierce competitor for Brazil's manufacturers, as well as a promising market for its commodities. India is one of the world's most protected economies. Even Argentina, Brazil's closest diplomatic friend, is trying to reduce imports of Brazilian textiles without flouting the rules of Mercosur. Lula's wariness in dealing with the United States is understandable, especially in the absence of progress in the global trade talks. But that need not make it wise.

    I doubt the Economist intended to paint France as a developing country.

    posted by Dan at 10:45 AM | Comments (2) | Trackbacks (0)

    Follow-up on Carmen Electra


    Last month I blogged about how Carmen Electra had won back her Internet domain name from Celebrity1000. Barring an appeal, this meant that the domain name had to be transferred to Miss Electra within ten days.

    In an effort to sustain the high standards of investigative journalism of, I clicked on again yesterday, and the domain name has indeed been transferred. Carmen writes:

    Welcome to my new official website. I'm so excited to have a place to communicate with everyone. Finally...the real facts, latest projects, and all the juicy parts of my life.

    Apparently, there are a few pictures of her as well.

    I certainly hope all of this blog's readers have taken this anecdote about the role of the United Nations and World Intellectual Property Rights Organization to heart.

    posted by Dan at 10:40 AM | Comments (6) | Trackbacks (3)

    Wednesday, February 11, 2004

    The marketplace of ideas in Iraq

    The Chicago Tribune's Stephen Franklin reports on how life has changed for Baghdad's booksellers:

    Up and down al-Mutanabbi Street, business was booming like never before. Buyers were bunched up in groups, studying piles of new and used books sprawled on the sidewalk or on carts. People wandered in and out of stores, carrying off several books at a time.

    A thick crowd of shoppers ruminated over Iyad Nowfal's collection of used English and French historical and political texts, an eclectic assortment that included a worn paperback copy of Golda Meir's autobiography.

    But the brisk trade failed to lift the spirits of the middle-age bookseller, a veteran of the street in a slightly decrepit Ottoman-era section of Baghdad that is famous for its printing presses, calligraphers, a coffeehouse frequented by intellectuals and an open-air book market every Friday.

    "Freedom is good and not good," Nowfal grumbled, hunching his shoulders against a cold wind. "The good thing is that now you can express yourself. You can read whatever you want. But the bad thing is competition. There are a lot more bookstores, a lot more people selling books, and prices have gone down."

    A few other veteran booksellers shared his dismay, recalling the days during Saddam Hussein's regime when they got high prices for forbidden books about politics or Shiite Islamic topics.

    "Now you have bad people," complained Hussan al Fadhli, a seller of maps, among them a large, colorful 1990 chart that showed Kuwait as an Iraqi province. Bad people, he explained with a scowl, are merchants who do not respect each other and offer price cuts to customers....

    One day Sadek Khadir was arrested because he had let a popular Arab world newsmagazine slip into the offerings he usually spreads out on the sidewalk. But Khadir, a government engineer who moonlights at the Friday book market, was lucky. He spent only a day in the police station, while others were imprisoned for years for selling banned publications. Now his sales of newspapers and magazines have doubled, and he sells whatever he can get his hands on.

    Iyad Hamid similarly keeps running out of books for customers. He specializes in works written by Shiite scholars, books that he previously would have sold only to people he knew or who came with good recommendations. He was strict about such precautions because he didn't want to join his colleagues in prison.

    With the regime's fall, his prices have come down because it is easier to buy such books. But that doesn't bother him because he sells so much more. His hottest items are anything written by or about Mohammad Baqir al-Sadr, a revered Shiite cleric assassinated by the government in 1980. It is rare, he said, for one of those books to sit for more than a day.

    Lest you believe that theological texts are the only things selling, let's move on to this anecdote:

    Amir Nayef Toma, a translator, English teacher and self-professed guiding spirit for al-Mutanabbi Street's intellectuals, was studying an assortment of popular U.S. paperbacks. He was glad to see that they were cleaner than a few months ago.

    The books came from American troops, who got them full of flies and dust during their time at war in the desert, he explained. Toma and other customers persuaded the booksellers to clean them up.

    A lifetime devotee of popular American novels, Toma's guru is Sidney Sheldon, and he has an ambitious dream for the new Iraq. He wants to open a Sidney Sheldon Institute for Modern English, where he will teach English to Iraqis and reveal to them the literary magic of the blockbuster American novelist.

    UPDATE: Juan Cole has useful thoughts about how the U.S. government could assist the spread of American ideas in the Middle East. One wonders if it will be a component of this initiative.

    posted by Dan at 10:15 AM | Comments (19) | Trackbacks (4)

    Mankiw speaks the truth on trade, and everyone goes postal

    N. Gregory Mankiw, chairman of the White House Council of Economic Advisers, testified before Congress yesterday to present the Economic Report of the President. Here's what he said about outsourcing:

    New types of trade deliver new benefits to consumers and firms in open economies. Growing international demand for goods such as movies, pharmaceuticals, and recordings offers new opportunities for U.S. exporters. A burgeoning trade in services provides an important outlet for U.S. expertise in sectors such as banking, engineering, and higher education. The ability to buy less expensive goods and services from new producers has made household budgets go further, while the ability of firms to distribute their production around the world has cut costs and thus prices to consumers. The benefits from new forms of trade, such as in services, are no different from the benefits from traditional trade in goods. Outsourcing of professional services is a prominent example of a new type of trade. The gains from trade that take place over the Internet or telephone lines are no different than the gains from trade in physical goods transported by ship or plane. When a good or service is produced at lower cost in another country, it makes sense to import it rather than to produce it domestically. This allows the United States to devote its resources to more productive purposes.

    Although openness to trade provides substantial benefits to nations as a whole, foreign competition can require adjustment on the part of some individuals, businesses, and industries. To help workers adversely affected by trade develop the skills needed for new jobs, the Administration has worked hard to build upon and develop programs to assist workers and communities that are negatively affected by trade.

    Later on, he told reporters, "Outsourcing is just a new way of doing international trade. More things are tradable than were tradable in the past and that's a good thing."

    As I've argued ad nauseum, Mankiw's correct on the economics. Alas, on the politics, it looks like he's stepped on a land mine. Here's the Washington Post lead:

    Democrats from Capitol Hill to the presidential campaign trail lit into President Bush's chief economist yesterday for his laudatory statements on the movement of U.S. jobs abroad, seizing on the comments to paint Bush as out of touch with struggling workers.

    "They've delivered a double blow to America's workers, 3 million jobs destroyed on their watch, and now they want to export more of our jobs overseas," said John F. Kerry, the Massachusetts senator and front-runner for the Democratic presidential nomination. "What in the world are they thinking?"

    Kerry's statement is a shame -- until now, he had been the most adult Democratic candidate when it came to foreign economic policy save Lieberman [Given the rest of the field, he could say this and still be the most adult candidate on this issue!--ed. Plus, he needed to get out in front on the issue.]. What's more worrisome is that Republicans are making similar noises:

    Rep. Donald Manzullo (R-Ill.) called for the resignation of N. Gregory Mankiw, the chairman of the White House Council of Economic Advisers and a prominent Harvard University economist. Manzullo said industrial state Republicans are furious.

    "I know the president cannot believe what this man has said," Manzullo said. "He ought to walk away, and return to his ivy-covered office at Harvard."

    More from the New York Times:

    Democrats in Congress and on the campaign trail, citing remarks by a top White House economic adviser, accused President Bush on Tuesday of encouraging companies to export jobs overseas....

    Asked about the role of farming out production and services to low-wage countries like China and Mexico, Mr. Mankiw acknowledged that the practice was on the rise but said it would ultimately benefit the United States.

    "I think outsourcing is a growing phenomenon, but it's something that we should realize is probably a plus for the economy in the long run," Mr. Mankiw told reporters on Monday.

    "We're very used to goods being produced abroad and being shipped here on ships or planes," Mr. Mankiw continued. "What we are not used to is services being produced abroad and being sent here over the Internet or telephone wires. But does it matter from an economic standpoint whether values of items produced abroad come on planes and ships or over fiber-optic cables? Well, no, the economics is basically the same."

    Many if not most economists contend that the expansion of free trade, in goods as well as services, ultimately benefits all countries that participate....

    "If this is the administration's position, I think they owe an apology to every worker in America," said Senator Tom Daschle of South Dakota, the Senate Democratic leader. "There is absolutely no justification for arguing that we could support jobs going overseas, especially under these circumstances."

    Actually, the Senator owes an apology to every consumer in America, but I'm not going to hold my breath in wait.

    An interesting question is whether economists who are also Democrats -- and generally support free trade -- will defend Mankiw on this point.

    UPDATE: Drezner gets results from Brad DeLong!! The Wall Street Journal gets results from other Democratic-leaning economists -- Janet Yellen and Laura D'Andrea Tyson.

    FINAL UPDATE: Virginia Postrel chips in with this point:

    More important than the election-year political bias is the subtle but extremely important difference between supporting "shift of jobs overseas" and supporting trade and specialization--the processes on which economic growth depends. Expanding the international division of labor doesn't shift "jobs" overseas. It shifts "some jobs" overseas, while creating new ones at home. The transition can be extremely painful for the workers affected, but the process itself is valuable. That's why government policies should address the specific problems of specific people, not attack the process as a whole.


    posted by Dan at 12:33 AM | Comments (50) | Trackbacks (5)

    Tuesday, February 10, 2004

    And that's the ballgame

    Exit polls from the Tenessee and Virginia primaries, courtesy of Jack Shafer:

    Kerry: 44%
    Edwards: 26%
    Clark: 18%
    Dean: 6%

    Kerry: 54%
    Edwards: 25%
    Clark: 9%
    Dean: 7%

    I'll let the post title speak for itself.

    Gonna be a long year for Mickey Kaus!! [You're still going to have to live down this post--ed. Oh, I beg to differ -- this post looks far worse in retrospect].

    posted by Dan at 05:14 PM | Comments (8) | Trackbacks (1)

    Monday, February 9, 2004

    The Australia free trade pact

    The United States and Australia have signed a free trade deal that virtually eliminates all tariffs on manufactured products between the two countries. And the bitching has just started --some justified, some not.

    One of the more absurd objections comes from the Australian entertainment sector:

    Despite the Federal Government's assurances that it has retained the right to protect the Australian film and television industry from the onslaught of US product under the new trade deal, local screen producers and directors are not convinced.

    "We are very disappointed," said the national director of the Media Entertainment and Arts Alliance, Simon Whipp.

    "On the information we have so far, Australian audiences of the future will not enjoy anywhere near the same access to Australian programs as today's Australian public does," he said, referring to pay TV, digital TV and new media.

    This would ordinarily be the point where one would snarkily observe the number of Hollywood stars that are Australian, but Tim Blair makes better and more serious points (link via Glenn Reynolds).

    A more substantive objection is made by the Cato Institute's Aaron Lukas who points out that big sugar strikes again:

    In August 1940, after the Battle of Britain, Prime Minister Winston Churchill famously remarked that, "Never in the field of human conflict was so much owed by so many to so few." In the considerably lower stakes field of trade policy, a variation of that phrase aptly captures the perverse standing of the U.S. sugar industry: "Never have so few taken so much from so many."....

    In contrast to some proposed trade agreements, an FTA between the United States and Australia should be an easy sell in Congress. Both parties to the agreement are wealthy countries with high wages. Both have stringent laws intended to protect labor and the environment. The argument that free trade spurs a "race to the bottom" was always flawed, but it lacks even the patina of plausibility in this case.

    Yet sugar's absence from this FTA is disappointing on three counts. First, sugar stands out as a symbol of a perceived American hypocrisy on trade. The unwillingness of the administration to even attempt to dismantle self-defeating protectionism in a relatively insignificant sector of the economy calls into question its larger commitment to open markets. Second, in order to get a pass on sugar, U.S. negotiators were forced to overlook Australian protectionism on wheat, broadcasting and audio-visual services, and other areas. Third, the exclusion of sugar from free-trade disciplines sets a terrible precedent that emboldens other import-competing producers to demand similar favors. The U.S. dairy market, for example, will also be spared from full competition under this FTA.

    A sour aftertaste on what would otherwise be a sweet deal.

    UPDATE: My brother blogs from Australia:

    It's pretty embarassing when my brother, who lives in Chicago, writes about a Free Trade Agreement between the United States and Australia before I do.


    To be fair, he provides a link to the Australian government's official web page on the agreement.

    posted by Dan at 06:40 PM | Comments (17) | Trackbacks (0)

    John Lewis Gaddis on Bush

    Back in 2002 I highlighted a John Lewis Gaddis essay in Foreign Policy that stoutly defended the National Security Strategy. The Boston Globe reports that post-Iraq, Gaddis hasn't changed his mind:

    Every President makes foreign policy. Only a select few, over the sweep of history, design what scholars term grand strategy.

    Grand strategy is the blueprint from which policy follows. It envisions a country's mission, defines its interests, and sets its priorities. Part of grand strategy's grandeur lies in its durability: A single grand strategy can shape decades, even centuries, of policy.

    Who, then, have been the great grand strategists among American statesmen? According to a slim forthcoming volume by John Lewis Gaddis, the Yale historian whom many describe as the dean of Cold War studies and one of the nation's most eminent diplomatic historians, they are John Quincy Adams, Franklin Delano Roosevelt, and George W. Bush....

    The Bush doctrine is more serious and sophisticated than its critics acknowledge -- but it is also less novel, Gaddis maintains. Three of its core principles -- preemptive war, unilateralism, and American hegemony -- actually hark back to the early 19th century, to the time of John Quincy Adams....

    Gaddis begins ''Surprise, Security, and the American Experience'' (Harvard, March) with the observation that thanks to its geographical isolation, the United States has experienced only three surprise attacks on its soil: the British burning of Washington in 1814, Pearl Harbor in 1941, and the terrorist attacks in 2001. Each time, American leaders responded by rethinking grand strategy.

    After the British attack on Washington, Gaddis recounts, John Quincy Adams, then secretary of state to James Monroe, perceived that weakly governed states along US borders invited dangers, whether from marauding bands of Native Americans, pirates, and escaped slaves in Florida (before General Andrew Jackson invaded it in 1817), or from European powers who might seize vulnerable territories such as California as staging grounds from which to threaten the United States. And so America achieved its security through territorial expansion -- by filling a perceived power vacuum before hostile powers could do so. Gaddis describes the invasions of such territories as ''preemptive.''

    Read the whole thing. Later on in the piece, Walter Russell Mead makes a point that's worth repeating:

    What is perhaps most important about the Bush doctrine is also very specific to its era, says Walter Russell Mead, a senior fellow at the Council on Foreign Relations and author of the forthcoming ''Power, Terror, Peace, and War: America's Grand Strategy in a World at Risk'' (Knopf, April): It shifts the geographical center of American strategy.

    ''The Cold War was fundamentally about Europe,'' says Mead. ''Whatever happened anywhere in the world, the basic question was how it would affect the standoff with the Soviets in Europe. Now the Bush people are saying that whatever happens anywhere in the world, the question is, how will it affect the Middle East and the war on terror?''

    posted by Dan at 06:15 PM | Comments (23) | Trackbacks (0)

    Does Al Gore read this blog?

    The right half of the blogosphere is getting exercised about Al Gore's speech to a rally of Tennessee Democrats yesterday. The reason is the New York Times lead:

    In a withering critique of the Bush administration, former Vice President Al Gore on Sunday accused the president of betraying the country by using the Sept. 11 attacks as a justification for the invasion of Iraq.

    "He betrayed this country!" Mr. Gore shouted into the microphone at a rally of Tennessee Democrats here in a stuffy hotel ballroom. "He played on our fears. He took America on an ill-conceived foreign adventure dangerous to our troops, an adventure preordained and planned before 9/11 ever took place." (emphasis added)

    I've explained why this "preordained and planned" meme is a pile of horses--t here and here.

    Here's the thing that scares me -- there are parts of this speech where Gore is not only correct, but he's channeling this blog!!

    Don't believe me? Here's what I wrote ten days ago:

    More and more, Bush reminds me of Nixon.... On domestic policy, Bush seems like he'll say or do anything, so long as it advances his short-term political advantage. If Karl Rove thought imposing wage and price controls would win Pennsylvania and Michigan for Bush, you'd see an Executive Order within 24 hours.

    Chris Sullentrop posted large chunks of the speech in this Slate story. Here's the relevant portion:

    I say that President George W. Bush reminds me more of former President Richard Nixon than any of his other predecessors. Nixon was no more committed to principle than the man in the moon. He, as a conservative Republican, imposed wage and price controls. Hard to believe in this day and time. But he did. And he cared as little about what it meant to be really conservative as George W. Bush has cared in imposing $550 billion budget deficits and trillions in additions to the national debt. That has nothing to do with conservatism and everything to do with his effort to get re-elected!

    [You aren't the only blogger to make this point. Maybe he's reading the Decembrist instead--ed. Mark Schmitt spoke favorably about Nixon's policies -- I didn't, and neither is Gore.]

    Al, if you're reading this, seriously, good point on Nixon, but I think you're overreaching on this pre-meditation thing. Check out those Paul O'Neill posts. Because Sullentrop's concluding graf is spot-on:

    [T]he question for the party's nominee has to be, do you want this man to speak at the convention in Boston? Even if you like the sentiment behind this speech, if Gore delivers an address like this one in July, the historical analogy won't be to the Democrats of 1976 or to the Republicans of 1994. Instead, the comparison will be to the disastrous Republican convention of 1992.

    [You seem freaked out about this--ed. Remember that Seinfeld episode when Elaine says, "I've become George!!"? I don't ever want to say, "I've become Gore!"]

    UPDATE: Darn my language!! Guaranteed, any time I cuss in my post it prompts a rash of swearing in the comments. I gotta learn to speak in hyphens more quickly.

    posted by Dan at 05:33 PM | Comments (36) | Trackbacks (2)

    Al Qaeda is losing in Iraq

    The New York Times reports on a 17 page memo seized in Badhdad in mid-January that was allegedly written by Abu Musab al-Zarqawi, a Jordanian Al Qaeda operative who the Bush administration argued was the main conduit between the terrorist network and Iraq.

    Glenn Reynolds links to the story and is concerned about media coverage. I'm more interested in the substantive implications.

    This story makes me feel better about the security situation in Iraq than anything since Hussein's capture. Why? Because it's clear that the Al Qaeda-backed portion of the insurgency is running into serious difficulties:

    [The memo] calls the Americans "the biggest cowards that God has created," but at the same time sees little chance that they will be forced from Iraq.

    "So the solution, and only God knows, is that we need to bring the Shia into the battle," the writer of the document said. "It is the only way to prolong the duration of the fight between the infidels and us. If we succeed in dragging them into a sectarian war, this will awaken the sleepy Sunnis who are fearful of destruction and death at the hands" of Shiites....

    The Iraqis themselves, the writer says, have not been receptive to taking holy warriors into their homes.

    "Many Iraqis would honor you as a guest and give you refuge, for you are a Muslim brother," according to the document. "However, they will not allow you to make their home a base for operations or a safe house."

    The writer contends that the American efforts to set up Iraqi security services have succeeded in depriving the insurgents of allies, particularly in a country where kinship networks are extensive.

    "The problem is you end up having an army and police connected by lineage, blood and appearance," the document says. "When the Americans withdraw, and they have already started doing that, they get replaced by these agents who are intimately linked to the people of this region."

    With some exasperation, the author writes: "We can pack up and leave and look for another land, just like what has happened in so many lands of jihad. Our enemy is growing stronger day after day, and its intelligence information increases.

    "By God, this is suffocation!" the writer says.

    But there is still time to mount a war against the Shiites, thereby to set off a wider war, he writes, if attacks are well under way before the turnover of sovereignty in June. After that, the writer suggests, any attacks on Shiites will be viewed as Iraqi-on-Iraqi violence that will find little support among the people.

    "We have to get to the zero hour in order to openly begin controlling the land by night, and after that by day, God willing," the writer says. "The zero hour needs to be at least four months before the new government gets in place."

    That is the timetable, the author concludes, because, after that, "How can we kill their cousins and sons?"

    "The Americans will continue to control from their bases, but the sons of this land will be the authority," the letter states. "This is the democracy. We will have no pretexts." (emphasis added)

    Assuming that the memo is real (and the Times does a good job discussing its provenance; I particularly love the circumlocution used to indicate that this didn't come from the INC: it "did not pass through Iraqi groups that American intelligence officials have said in the past may have provided unreliable information." See the Washington Post story for more) then U.S. efforts at statebuilding have been more successful than media coverage would have suggested to date.

    Iraq might not have proven to be as hospitable to American troops as was previously thought -- but it's not fertile soil for Al Qaeda either.

    [But would the Shia strategy work?--ed. Unlikely -- even Juan Cole points out that "So far most Shiites have declined to take the bait." Now that the strategy has been made public, it will be that much more difficult to implement.]

    UPDATE: Josh Chafetz has further thoughts. Greg Djerejian thinks I'm being over-optimistic. Spencer Ackerman doubts the memo's provenance and logic.

    FINAL UPDATE: Here's a link to the full text.

    posted by Dan at 04:02 PM | Comments (29) | Trackbacks (1)

    Still undecided

    Other Republicans join the ranks of the undecided. Here's Venomous Kate:

    [A]lthough I am a registered Republican, although I contribute regularly to the Republican National Committee and proudly display my personally-signed portrait of George and Laura Bush in my den, although I have voted Republican in every election since turning 18, I don't cast my vote based on a candidate's vision for America. I vote based on my vision for America, and I cast my vote for the candidate who seems not just more likely to move in the direction that I think is best for our country but also more capable of keeping our country from going in directions we should never go.

    The fact is, I voted for George W. Bush to be my President. I knew when I voted for him that, like all his predecessors, he would delegate responsibility to others. That's part and parcel of being a good executive, whether that be in business or in politics. But I did not vote for four years - nor will I vote for four more years - of Donald Rumsfeld's worldviews in which so many "possible threats" are overstated while so many realities are misstated. So if George Bush wants my vote he needs only do one thing: take charge of the White House by clearing out the cobwebs that are clouding that vision of his.

    Until then, I'm going to sit here on this fence and watch the various candidates grapple with their pasts as they each try to wrest hold of our country's future. May the best man win.

    I'm omitting a ton of links in the post. Go check out the entire post at Electric Venom, which includes a hard look at the Democratic alternatives.

    posted by Dan at 10:34 AM | Comments (66) | Trackbacks (2)

    To believe or not to believe

    That is the question after reading this Ha'aretz report:

    Al-Qaida have possessed tactical nuclear weapons for about six years, the London-based Al-Hayat newspaper reported Sunday.

    The Arabic daily reported that sources close to Al-Qaida said Osama bin Laden's group bought the nuclear weapons from Ukrainian scientists who were visiting Kandahar, Afghanistan, in 1998.

    The report has not been confirmed.

    However, the sources said Al-Qaida doesn't intend to use the weapons against American forces in Muslim countries, "due to the serious damage" it could cause. But that decision is subject to change, the sources said, if Al-Qaida "is dealt a serious blow that won't leave it any room to maneuver."

    The possibility of detonating the nuclear devices on American soil was also raised in the report, although no details were given.

    My first thought is that I find it hard to believe. If Al Qaeda had these weapons for six years, there would have been at least an attempt to detonate one inside the United States.

    Here's another thought -- maybe, "as the operational power of Al Qaeda appears diminished" according to the New York Times, this is a propaganda effort to rally support among regional terrorist groups?

    Greg Djerejian has similar thoughts, but with more vivid phrasing.

    posted by Dan at 12:55 AM | Comments (11) | Trackbacks (4)

    Sunday, February 8, 2004

    Now it's a depression

    A few years ago, the Economist reworded an old aphorism:

    When your neighbour loses his job it’s a slowdown; when you lose yours, it’s a recession; when an economic journalist loses his, that’s a depression.

    If this New York Times report is accurate, expect to hear a lot of depression talk from Reuters:

    Outsourcing has become all the rage in recent years, and India has become a favorite destination for Western companies that want to send jobs to cheaper markets. Companies as different as Delta Air Lines and Dell Computer have hired workers or subcontractors to perform customer service, data entry or other computer-related jobs once done in the United States.

    Now, Reuters is going a step further. It told its editorial employees in an electronic posting late last week that it planned to hire six journalists in Bangalore, India, to do basic financial reporting on 3,000 small to medium-size American companies.

    "It's a place where you can get people who understand English, understand financial statements, understand journalism and who are educated to a very high standard and eager to do this kind of work,'' David Schlesinger, global managing editor of Reuters, said in a telephone interview. They are also relatively inexpensive, he added....

    In the message to employees about the journalism project, which will deal with companies Reuters does not cover regularly now, Mr. Schlesinger did not rule out expanding the project.

    "I'll keep you informed as how this develops,'' he wrote. "This could be a very exciting way to get more news on our wires in a more efficient way.'' (emphasis added)

    Given the underlined passage, it probably won't generate many complaints, since the idea is to get greater coverage for less money.

    posted by Dan at 10:15 PM | Comments (17) | Trackbacks (4)

    Bush meets the press

    I caught most of Bush's Meet the Press appearance, and was neither overwhelmed nor underwhelmed. Let's face it -- this is not his best format, and there were definitely a few moments when I winced. That said, it was a pretty competent performance. Glenn Reynolds has a reaction roundup, but I find it telling that both Josh Marshall and Brad DeLong grudgingly concede that Bush did OK. [UPDATE/CORRECTION: Brad doesn't think Bush did well as much as Russert did poorly; Josh, after seeing the whole thing, thinks "he and his advisors made a mistake scheduling this interview."

    Two things struck me overall. First, the word that kept ringing in my ears was "context." Bush used it six times during the hour. I don't think that's an accident -- he's trying to frame his decision-making to the voters. His response to the "no WMD" question is twofold -- 1) We're better off without Saddam anyway; 2) In context, the intelligence looked solid and sensible. Whether this works remains to be seen.

    Second, I found his response to Russert's last question, "Biggest issues in the upcoming campaign?" to be revealing:

    Who can properly use American power in a way to make the world a better place, and who understands that the true strength of this country is the hearts and souls of the American citizens, who understands times are changing and how best to have policy reflect those times.

    First response was foreign policy. Despite the WMD imbroglio, that's still Bush's comparative strength compared to a Democratic challenger.

    Which leads to an intriguing paradox. The more successful Bush's foreign policy is, the more secure Americans will feel, and the more the economy will become issue #1 -- which could put Bush at a disadvantage. The less successful Bush's foreign policy is, the less secure Americans will feel, and the more national security becomes issue #1 -- which could put Bush at an advantage.

    Obviously, if the security situation collapses, Bush will lose. But the overall relationship between Bush's foreign policy and Bush's political standing is decidedly nonlinear.

    UPDATE: David Adesnik has the best summary analysis I've seen.

    posted by Dan at 09:41 PM | Comments (21) | Trackbacks (0)

    Saturday, February 7, 2004

    For Chicago readers only

    The Chicago chapter of the Nathan Hale Foreign Policy Society -- devoted to discussing foreign policy topics in, "as bipartisan, idealistic, and nuanced fashion as possible," will be meeting a 7:00 PM Sunday evening at Cosi. The address is 116 S. Michigan Avenue. That's roughly across the street from the lovely Art Institute of Chicago. Make a day of it!!

    This first meeting of the Chicago chapter will be led by Will Baude. The topic is Homeland Security:

    1. What do we assess is knowable vis-a-vis the threat?
    2. What does the homeland security community need to look like to 'deter, defend and defeat'?
    3. Where do we go from here?

    Click here for suggested readings.

    posted by Dan at 11:33 PM | Comments (3) | Trackbacks (0)

    Blogging for dollars

    John Hawkins provides a run-down on possible ways that bloggers can make a buck off their blogs. There's an excellent discussion of all the possible revenue streams, but his first point is the most salient: "if your primary motivation is to make money, don't bother with blogging."

    James Joyner adds: "The short answer is to either 1) become Andrew Sullivan or 2) forget about it."

    [Hey, you became Andrew Sullivan for a spell. You should be set!--ed. I've been less aggressive on this front than I could be -- mostly because the opportunity costs of caring outweigh the paltry amounts I suspect such efforts would generate. The Amazon click-throughs do generate enough money to pay for the site, however.]

    posted by Dan at 10:55 AM | Comments (5) | Trackbacks (3)

    Friday, February 6, 2004

    Gorbachev, Bush, Kohl... Hasselhoff?

    The BBC reports about a man who feels slighted by history:

    Baywatch star David Hasselhoff is griping that his role in reuniting East and West Germany has been overlooked....

    Barely a month after the fall of the Berlin Wall in November 1989, the city that had been divided by politics for more than 40 years was united in song.

    And leading the chorus of several hundred thousand voices was a man hitherto known to the rest of the world for driving a talking car....

    Speaking to Germany's TV Spielfilm magazine, the 51-year-old carped about how his pivotal role in harmonising relations between the two sides of the divide had been overlooked.

    "I find it a bit sad that there is no photo of me hanging on the walls in the Berlin Museum at Checkpoint Charlie," he told the magazine.

    Read the whole story to get Hasselhoff's side of the story.

    Indeed, let us all hope that sometime soon, all of the former stars of Baywatch receive their proper due in museums.

    Yasmine Bleeth, Nicole Eggert, and Brande Roderick -- your days will come!!!

    [Thanks to alert reader S.P. for the tip.]

    posted by Dan at 09:43 PM | Comments (14) | Trackbacks (8)

    The EU turns further inward

    There are inherent tensions in the phrase "liberal democracy." The liberal part implies the protection of individual rights. The democracy part implies that those areas of policy requiring collective decision making will reflect majoritarian preferences. The tension is over what spheres of social, political, and economuc life should be protected against democratic rule -- or, to turn it around, what constraints should be placed on individual freedoms for the good of the whole.

    I bring this up because the European Union's trade commissioner is considering a wholesale rejection of the liberal part of this equation. According to the Financial Times:

    Governments would be allowed to ban imports from countries that did not share their national values and standards under proposals for radical changes to global trade rules being studied by Pascal Lamy, Europe's trade commissioner....

    The paper says legalising curbs on imports that do not meet individual societies' "collective preferences" would promote global economic integration by reducing international tensions....

    [T]he paper says the WTO rules give too much weight to science and too little to local social and political sensitivities.

    The paper does not detail what kinds of imports the European Union might want to restrict. However, it says divergent national regulations and public attitudes worldwide threaten to create growing trade frictions over environmental policy and in sectors such as agriculture, services, software and pharmaceuticals.

    The paper insists it is not seeking a pretext to erect new import barriers. However, it acknowledges that economic liberals and developing countries - long hostile to efforts to link trade and social standards - might attack the idea as protectionist and Eurocentric. (emphasis added)

    The highlighted section reflects just how Eurocentric this report would be. If the EU chose to implement this policy, it probably would promote greater European integration (via trade diversion). It would also probably reduce European tensions over trade.

    However, it would also succeed in reducing global economic integration -- as well as pissing off just every other country in the world. How the papers' authors believe that this step would actually boost integration and reduce tensions outside of Europe is beyond me.

    Unless they think that Europe is the world.

    UPDATE: Rich Kleinman offers a thoughtful rejoinder:

    [Y]ou don't pay enough attention to the fact that the reasons the tariffs could be imposed are actually barriers to democracy. The extreme example that I am thinking of here is slavery. If another nation was selling goods to Europe that were produced by slaves how would limiting that trade be a problem.

    Rich makes a valid point, and in the abstract I agree that on trade matters, circumstances exist in which broad-based democratic values should trump individual liberties.

    However, three things frost me about this story:

    1) When one considers recent EU trade history -- it's hard not to believe that this policy would not do much more harm than good -- both to the European and global economy;
    2) The stated policy would have collective decision-making always trumping individual choice;
    3) The paper's reported argument that the EU decision to jack up tariffs willy-nilly will somehow promote integration and reduce conflict is so completely wrong-headed that I'm amazed that it's being advanced.

    posted by Dan at 11:04 AM | Comments (56) | Trackbacks (0)

    Thursday, February 5, 2004

    Breaking Plame news

    UPI's Richard Sale has breaking news on the Plame investigation:

    Federal law-enforcement officials said that they have developed hard evidence of possible criminal misconduct by two employees of Vice President Dick Cheney's office related to the unlawful exposure of a CIA officer's identity last year. The investigation, which is continuing, could lead to indictments, a Justice Department official said.

    According to these sources, [Deputy Assistant to the Vice President
    for National Security Affairs] John Hannah and Cheney's chief of staff, Lewis "Scooter" Libby, were the two Cheney employees. "We believe that Hannah was the major player in this," one federal law-enforcement officer said. Calls to the vice president's office were not returned, nor did Hannah and Libby return calls.

    The strategy of the FBI is to make clear to Hannah "that he faces a real possibility of doing jail time" as a way to pressure him to name superiors, one federal law-enforcement official said.

    A little further down in the story is this quote about the White House's reaction to the triggering event, Joseph Wilson's op-ed bebunking the Niger yellowcake claim:

    According to one administration official, "The White House was really pissed, and began to contact six journalists in order to plant stories to discredit Wilson," according to the New York Times and other accounts.

    Hat tip to Josh Marshall, who promises more soon.

    UPDATE: Robert Tagorda has blogosphere reaction, as well as a link to a Newsweek story Hannah's prior involvement in Iraq intelligence.

    If this pans out,* I tend to agree with Mark Kleiman:

    [I]f this stays in the VPs office, I'd call that very good news for Mr. Bush. The staff guys can be fired. If necessary, Cheney can be dumped from the ticket (which might not be a bad move anyway).

    Chris Lawrence has further thoughts on Cheney.

    *One thing does trouble me: why haven't the other wire services -- AP, Reuters -- picked this story up? [UPDATE: Josh Marshall comments on this as well, suggesting the following:

    Yesterday I talked with an emissary from neoconland who pushed back heavily on the story, at least as regards John Hannah. No mention of Libby. But Hannah, this person insisted, is simply not a target of the investigation.

    Let me add another point. There are lots of people I know (of many political persuasions) who aren't surprised Libby would be involved in this and won't be shedding a tear if he gets brought down by it. But they feel the opposite on both counts about Hannah.

    None of this means Hannah is or isn't in the clear. I'm just trying to give you a feel for the reaction to the mention of his name as a potential target of this investigation.]

    ANOTHER UPDATE: This Asian Times piece has the rundown on Cheney's travails as of late. This graf stands out:

    According to recent polls, Cheney's approval ratings, hovering around 20 percent, are already far below Bush's, which have themselves sunk below 50 percent for the first time in his presidency. Even Halliburton, whose public image has become so tarnished that it has launched a controversial television ad campaign to boost its image, last week listed Cheney's association to the company as a "risk factor" for its shareholders.

    The approval rating argument seems bogus -- but the Halliburton story is true.

    posted by Dan at 05:24 PM | Comments (40) | Trackbacks (3)

    More on job growth

    As I said in my last outsourcing post, anecdotes about large corporations laying off workers can crowd out information about smaller firms (traditionally defined as less than 500 employees) that are hiring more workers. Since two-thirds of all new jobs are created by small firms, the latter can more than compensate for the former.

    MSNBC's Martin Wolk makes this points in a must-read story on the role that small businesses play in the economy (link via Virginia Postrel). Here's the part I found interesting:

    A study of net job growth in 1996 suggested why small can be beautiful. Firms that were at least two years old that year cut employment by 7 to 36 percent overall, with the biggest job losses coming at the oldest firms. Meanwhile, job growth of nearly 150 percent was seen both at small firms that were less than two years old and at new branch offices and stores opened by larger firms.

    “For employment growth, it looks as if the more important factor is age and not size,” said the study by economists John Haltiwanger and C.J. Krizan. “One clear pattern that emerges is that net job creation rates decline with plant age.”

    That was 1996 -- what about the present? Let's go to the National Federation of Independent Businesses and see what they're saying about the economy and job creation. The economy first:

    [T]he nation's small-business owners' outlook bubbled up 1.6 points to 106.9 in December, less than a point shy of the National Federation of Independent Business's (NFIB) Index of Small-Business Optimism's 1983 record and the fourth highest in the survey's history.

    As for employment:

    Operating small firms added a seasonally adjusted average of 0.19 employees per firm, nearly double the November figure. As a result, the entire fourth quarter was in the black for job creation. Over the past three months, 17 percent of all owners reported increasing employment a seasonally adjusted average of 3.9 employees, and 13 percent reported reducing employment by a seasonally adjusted average of 2.5 employees.

    Until now, rising productivity and some uncertainty delayed the step-up in hiring that rising sales demand. This productivity cushion has been exhausted and job creation must now fill the gap to ensure that production keeps up with demand.

    The percent of firms with at least one “hard to fill”job opening rose two points to a seasonally adjusted 20 percent of all firms. This reading is well below the 35 percent reading reached in 2000, but above recession readings of 10 percent reached in 1991. Eighteen (18) percent reported at least one opening for a skilled employee and 3 percent reported at least one opening for an unskilled employee.

    Overall, it appears that there was substantial job creation in the fourth quarter and that job creation is poised to pick up speed early in 2004. The unemployment rate should fall a few tenths of a point by mid-year.

    Obviously, this optimism must be seriously tempered by the shedding of jobs among large firms. Still, one hopes that this is a harbinger of healthy job growth across the board.

    UPDATE: Hey, Technorati is hiring!!

    ANOTHER UPDATE: The employment numbers for January are out:

    Employment rose in January, and the unemployment rate, at 5.6 percent, was little changed, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Nonfarm payroll employment increased by 112,000, with job gains in construction and several service-providing industries. Manufacturing employment continued to trend down, but the rate of job loss has moderated in recent months.

    Not great, but a definite improvement over the 1,000 jobs created in December. Here's the AP report.

    FINAL UPDATE: The Chicago Tribune has a story on the rise of self-employment. Most of it is quite informative, but see if you can spot the error that will drive Brad DeLong round the bend and post another "Why oh why can't we have a better press corps" post!!

    posted by Dan at 03:53 PM | Comments (10) | Trackbacks (0)

    The debate over the European Union, continued

    Over the past six months Henry Farrell and I have had a friendly debate over how to define the European Union. It it a supranational organization transforming itself into a state -- as Henry argues? Or is it a garden-variety international organization that is managed by its most powerful member states -- as I have argued?

    Henry's last post on this matter argued that what really mattered was the Euroopean Court of Justice:

    [T]he real evidence that the EU is not the mere plaything of its more powerful member states can be found in the rulings of the European Court of Justice (ECJ). The ECJ has succeeded in effectively ensuring the primacy of EU law over the law of the member states, which is not something that you would expect if the European Union were a simple international organization. Even big member states such as France and Germany, have complied with ECJ rulings that went against their interests.

    Henry makes a valid point -- but if the ECJ acts strategically, it will be reluctant to issue rulings that powerful states would flout, weakening the ECJ's repitation.

    Which brings me to this Financial Times story suggests that beyond the ECJ, compliance is tough to come by:

    Brussels delivered a double blow to the French government on Wednesday, combining a legal challenge against a French law on awarding government contracts with an order to repay more than €90m in farm subsidies.

    France will now have to defend its public procurement code in front of the European Court of Justice, Europe's highest court, amid allegations that tendering procedures fall below European Union standards.

    In a separate development, Paris will also be forced to re-examine the way it distributes the billions in farm aid it receives every year, after the Commission found that payments to cattle farmers had not been properly supervised. As a result, France will have to repay €91.12m ($114m, £62m), almost two thirds of the total farm subsidies recovered by the Commission in the most recent period.

    The two decisions are likely to reinforce France's position as one of the worst performers on implementing EU legislation - a standing that has led to clashes between Paris and Brussels.

    France's poor record on this front is matched only by Germany, Belgium and Luxembourg, all of which are founding members of the EU and frontline supporters of a two-speed Europe led by Paris and Berlin.

    Their poor record in following EU law has led some to question whether these countries can provide the leadership required. Earlier this week, Frits Bolkestein, the internal market commissioner, launched a thinly-veiled attack on this drive for a two-speed Europe. In a speech in London he said: "It is about time certain member states put their money where their mouths are. The self-appointed vanguard should begin at home by implementing existing community law."

    Paris and Berlin, traditionally the Union's leaders, were also berated last month for their poor record in implementing EU law, as well as for running big budget deficits and for their failure to push through reforms.

    posted by Dan at 02:03 PM | Comments (6) | Trackbacks (1)

    Wednesday, February 4, 2004

    The war of anecdotes

    One of the problems in the outsourcing debate is that those who defend the practice lose the war of anecdotes. [What about economic models and statistical evidence?--ed. Then the arguments in favor of outsourcing win hands down. You'd think those pieces of information would be more important for public policy debates, but that's not the way it works. Between econometric models showing that trade is good for the economy and tangible anecdotes of job losses due to import competition, most citizens go with the anecdotes.]

    It is easy to point to large multinational corporations laying off American workers because of offshore outsourcing -- cue IBM. However, the jobs that are either saved or created from outsourcing seem less impressive. In the case of jobs created, it's because a healthy share of new hiring takes place among smaller firms, the anecdotes of job creation seem much less convincing -- even though there may be more examples of the latter than the former.

    In the case of jobs saved, the difficulty is that such statements require counterfactual reasoning -- "If outsourcing had not occurred, then a greater number of jobs would have been lost." Counterfactuals are extremely difficult to demonstrate beyond a reasonable doubt.

    So, in the debates over trade and unemplyment, protectionists have juicy media stories, while those who favor an open economy are often left sputtering.

    Bruce Bartlett tries to address "anecdote gap" on offshoring with this anecdote:

    A Jan. 30 report in the Wall Street Journal illustrates how this works, using the case of a computer mouse manufacturer called Logitech. It sells a wireless mouse called Wanda for about $40 that is assembled in China. Of the $40, China gets only $3. The rest goes to suppliers, many based in America, which make components for the mouse, and to domestic retailers. The biggest component of Logitech's cost is its marketing department based in Fremont, California, where the staff of 450 Americans makes far more than the 4,000 Chinese who actually manufacture the product.

    Those 450 Americans, making good wages in California, might not have jobs at all if Logitech wasn't able to stay competitive by outsourcing some of its costs. Studies have also shown that workers displaced by outsourcing are often retrained for better jobs within the companies doing the outsourcing. Cisco, for example, is a leader in outsourcing, but has not reduced the number of its domestic employees because they have been redeployed into other areas, doing higher value-added work. These jobs often pay better than those that were outsourced.

    I know that this is no solace to those who have lost jobs due to outsourcing. But the nation as a whole will be worse off if outsourcing is restricted.

    UPDATE: More on this over at the Marginal Revolution. And Steve Verdon had a great post from last month that's worth reading.

    FINAL UPDATE: I've posted more on job growth here.

    posted by Dan at 05:54 PM | Comments (47) | Trackbacks (3)

    I love the eighties... strikes back!

    Looking for more information on whether Bush is Reagan redux on foreign policy?

    On foreign economic policy, Virginia Postrel ably makes the case that the current outsourcing phenomenon is a replay of the fears of "Japan, Inc." from the eighties. The Morgan Stanley quote is courtesy of this joint effort by Stephen Roach and Richard Berner (link via Brad DeLong). Stephen Roach takes the opposite position on outsourcing.

    Reagan's forced reversal on taxes is covered in this Bruce Bartlett essay from last October. For a blow-by-blow description of Reagan's fiscal policy, the obvious source is David Stockman's The Triumph of Politics.

    The Mary Matalin quote is courtesy of Chris Sullentrop's Slate article on Bush's campaign reelection strategy.

    On Reagan's policies towards the Soviet Union, an accessible primer is Strobe Talbott's The Master of the Game, which is simultaneously a biography of Paul Nitze and a discussion of Reagan's attitudes towards arms control. It's also worth a re-read to see how Richard Perle reacts to Reagan responding to Gorbachev. And to understand the strains that existed within NATO in the early eighties due to Reagan's perceived belligerency, I'll shamelessly recommend Chapter Three, pages 80-88 of The Sanctions Paradox, authored by yours truly. [Wouldn't George Shultz's Turmoil and Triumph work as well?--ed. Er, yes, but that book is much too long for your busy TNR Online reader.]

    On whether it is possible to create a democracy in Iraq: I argued pre-invasion that there were reasons to be optimistic with regard to democratization. For a counterargument, see today's Los Angeles Times op-ed by George Downs and Bruce Bueno de Mesquita* (link via Kevin Drum). This post from a few weeks ago contains links to arguments by George Will, Ken Pollack, and Francis Fukuyama on the subject. Today's Chicago Tribune provides a story on the perils and promises of human rights in Iraq. To my knowledge, Michael Desch was first compared Iraq to Lebanon.

    I say Bush is hoping to emulate Reagan; Jonathan Rauch says that Bush is actually emulating Reagan's childhood idol, FDR in a July 2003 essay from The National Journal.

    posted by Dan at 10:18 AM | Comments (9) | Trackbacks (1)

    I love the eighties!!

    My latest TNR Online essay is up. It's a meditation on whether we're experiencing 1984 all over again. [You mean in that Orwellian doublespeak kind of way?--ed.] No, I mean in terms of the costs and benefits out our foreign policy.

    posted by Dan at 10:14 AM | Comments (3) | Trackbacks (0)

    Primary analysis continued

    I was going to post some thoughts, but Will Saletan pretty much wrote what I was thinking (link via RealClearPolitics:

    First Clark squashed Edwards' official campaign kickoff in September, leaking word that very day that he would get into the race. Then, a week ago, Clark beat out Edwards for third in New Hampshire by a fraction of a percentage point. That cost Edwards the ability to claim plausibly that he had continued his momentum from Iowa. Tuesday night, it happened again: Clark eked out a margin over Edwards in Oklahoma so narrow that the state election board will have to review the ballots before declaring an official winner....

    I think Edwards would be the strongest Democrat in the general election. Nobody expected him to do this well in Oklahoma. But when the history of the 2004 race is written, my guess is that we'll look back at Oklahoma as Edwards' Stalingrad. He had to kill off Clark. The media were itching to write off Clark, and a no-win night would have given them license to do so. Now they can't. Clark will go on to Tennessee and Virginia, where he'll do what he did in Oklahoma: split the non-Yankee vote and keep Kerry in the lead. Maybe Edwards will win Tennessee and Virginia, and Clark will fade. But by then it may too late to stop Kerry....

    Kerry's biggest achievement is that he's now the only candidate who's running strong everywhere. I winced when he claim to have finished "enormously close" to Edwards in South Carolina; I don't recall Kerry aides treating Dean's finish in New Hampshire, which was nearer to the top than Kerry's finish was in South Carolina, as enormously close. But Kerry legitimately pointed out that he's the only candidate who campaigned in all seven of the Feb. 3 states, and he won five of them. Who else can make such a claim?

    John Kerry is doing well, and the candidate deserves some credit. However, he's also benefiting from some unbelievable luck. Richard Gephardt, in his last moment on the national stage, drags Howard Dean down with him. Now it looks like Clark will do the same thing to Edwards.

    posted by Dan at 10:10 AM | Comments (16) | Trackbacks (0)

    Tuesday, February 3, 2004

    Primary analysis

    I'll be on Extension 720 with Milt Rosenberg show tonight from 10:00 PM to 12:00 PM Eastern time to discuss the primaries. Tom Bevan from RealClearPolitics will also be on the show.

    You can listen in online by clicking here.

    UPDATE: That was fun!! From now on I'm going to demand Internet access when I'm doing a radio show -- it makes me sound much more erudite! Tom Bevan of RealClearPolitics managed to pull that off without any help from the Web whatsoever.

    posted by Dan at 06:15 PM | Comments (5) | Trackbacks (0)

    Take these for what they're worth...

    Both The Corner and Taegan Goddard's Political Wire have exit polls from five of the states voting today:

    AZ: Kerry 46, Clark 24, Dean 13.
    MO: Kerry 52, Edwards 23, Dean 10
    SC: Edwards 44, Kerry 30, Sharpton 10
    OK: Edwards 31, Kerry 29, Clark 28
    DE: Kerry 47, Dean 14, Lieberman 11, Edwards 11

    As Kos points out about exit polls: "the NH ones were totally off." However, the key is the Oklahoma number. If Edwards actually wins it, he knocks Clark out of the campaign and forces Kerry to -- at a minimum -- share the front page.

    UPDATE: Campaign Desk is just a wee bit annoyed by the leaking of the numbers. While there is some evidence that early poll reporting has a marginal effect on turnout in general elections, I'm not sure if that still holds for these primaries:

    1) Exit polls do not have the best track record as of late, so informed voters discount the information. Uninformed voters are unlikely to actively search for the information.

    2) Primaries allocate delegates on a proportional basis provided the candidate reaches a minimum threshhold. So, even if a poll shows a candidate losing, the vote can still matter if it gets your preferred choice to place or show.

    3) What's startling about these exit polls in particular is that Oklahoma looks like a nail-biter. Might that not boost turnout in that state?

    posted by Dan at 03:35 PM | Comments (7) | Trackbacks (1)

    The graduate school crisis

    The Chicago Tribune runs a story today on the high dropout rate of graduate students pursuing Ph.D.s:

    Nationwide, about half of doctoral students drop out, many after devoting years to their studies and spending tens of thousands of dollars in student loans and fellowships. The attrition rate for doctoral students compares with 42 percent for undergraduates and 10 percent for law and medical students.

    [Ellen] Stolzenberg, who is writing her dissertation on the role that faculty advisers might play in the high dropout rate, is among a growing body of researchers, administrators and students focusing attention on the issue.

    For years the problem, though recognized, received little research attention or action. In the sink-or-swim climate of many universities, most of the dropouts were written off as lacking the commitment or capability necessary for the rigors of independent research.

    Now universities across the country are conducting studies to determine why so many doctoral students quit and are introducing programs to stem the tide, including better orientation sessions, requirements for faculty advisers to stay in closer contact with students and the linking of department funding to student retention.

    The efforts are being driven largely by tight budgets. Some university administrators fear the dismal retention rates will make doctoral programs more susceptible to cuts, threatening the quality of education and the schools' prestige.

    Concerns are being raised over the use of financial aid money and other resources for students who ultimately drop out, and over losing talented doctoral candidates who are playing a larger role in conducting research and teaching undergraduate students.

    "What research has shown is that the students dropping out are not less academically qualified or experiencing a cut in their funding. Many do not feel a sense of belonging," said Stolzenberg, 28, adding that she maintains daily contact with her faculty adviser.

    There are other academic bloggers who have and will comment on this, but I'm afraid that I'm (mostly) old school on this one. Hand-holding sounds great -- except that part of the job of being an academic is being enough of a self-desciplined self-starter that one can focus on research instead of distractions like... er.... blogs.

    Plus, if the retention rate improves, it's not like there's a booming academic job market out there eager to hire -- as Bart Simpson recently pointed out.

    So, if there's to be reforms to ensure a higher yield of graduate school entrants earning their Ph.D.s, there would also have to be a radical change in the culture of most academic departments. Faculty would have to tell their Ph.D.s that it's OK to get a job in the private sector. That won't happen soon -- for tenured faculty, a key measure of prestige is how well they place their students. The more students that get jobs at top-tier institutions, the better it looks.

    However, for those political scientists contemplating what to do if academia is not for you, go read Ian Bremmer's Slate diary of a political scientist who's outside of academia. [Full disclosure: Ian was two years ahead of me in the Stanford poli sci program).

    posted by Dan at 10:42 AM | Comments (34) | Trackbacks (5)

    Monday, February 2, 2004

    My Super Bowl post

    Josh Chafetz has castigated me for having "dropped the ball on his usual scantily clad celebrities beat " My sin -- not mentioning Janet Jackson's "technical difficulties" during the Super Bowl.

    While this blog has rarely shied away from discussing the important political ramifications of scantily clad celebrities, in this case I felt it inappropriate.

    Why? Because what mattered far more was that this year's Super Bowl was a GREAT FRIGGIN' GAME, that's why!!! Punch!! Counterpunch!! Great defense!! Explosive offense!! Clutch plays!! Five changes in the score in the last quarter!! Jake Delhomme getting his butt kicked in the first half and throwing three touchdown passes in the final quarter!! Adam Vinatieri missing two kicks in the first half and then drilling the game-winner!! [Allen Barra says the game sucked!--ed. Then Allen Barra is a very hard man to please. I take his point about the high number of penalties (though most of them were on special teams) but I'm intrigued that Barra thinks that the well-executed defense of the first and third quarters were boring but that the high-octane offense of the second and fourth quarters was an example of incompetent defenses as opoosed to the offenses making adjustments.]

    I'm sure some astute sports commentator could observe why three of the best Super Bowls ever played took place in the last five years. Me, I'm just grateful as a sports fan.

    One additional fact courtesy of Peter King that's worth mentioning:

    The NFL has something called a performance pay scale, in which low-paid players who log significant minutes are compensated an additional amount out of a league pool at the end of the season. This is very good news to [New England Patriots center Dan] Koppen, a rookie and fifth-round draft pick who started the final 15 games of the season at center for the Patriots.... Koppen will get the largest percentage increase from the performance-pay pool, a 40 percent bump from his 2003 base salary of $225,000. According to an NFL Management Council source Koppen will receive a bonus of approximately $90,000 from the pool, which will likely be the most money allocated any player in the league when the system is finalized after the season.

    Not bad for the kid -- a hefty bonus, plus the winner's share from the divisional playoff game, AFC title game and Super Bowl, collectively, of $122,500. Koppen almost doubled his salary with money he never expected to make -- $212,500 in performance and postseason bonuses not in his original contract.

    For the fallout over Jackson's... er... fallout, see this Washington Post story. However, Scrappleface has the better spin.

    Oh, and Beyoncé Knowles has a lovely singing voice.... as well as many other fine qualities:


    posted by Dan at 05:03 PM | Comments (18) | Trackbacks (2)

    How high up will this go?

    The New York Times reports that the godfather of Pakistan's nuclear weapons program has spilled the beans:

    The founder of Pakistan's nuclear weapons program, Abdul Qadeer Khan, has signed a detailed confession admitting that during the last 15 years he provided Iran, North Korea and Libya with the designs and technology to produce the fuel for nuclear weapons, according to a senior Pakistani official and three Pakistani journalists who attended a special government briefing here on Sunday night.

    In a two-and-a-half-hour presentation to 20 Pakistani journalists, a senior government official gave an exhaustive and startling account of how Dr. Khan, a national hero, spread secret technology to three countries that have been striving to produce their own nuclear arsenals. Two of them, Iran and North Korea, were among those designated by President Bush as part of an "axis of evil."....

    The Bush administration offered no public comment on the Pakistani announcement on Sunday. But in recent weeks, administration officials have said that they forced the government of President Pervez Musharraf to confront the evidence, after Iran and Libya made disclosures that showed their reliance on Pakistani-supplied technology.

    "This is the break we have been waiting for," a senior American official said. But the account provided by Pakistani officials carefully avoided pinning any blame on General Musharraf, the army or the Pakistani intelligence service, despite the fact that some of the material — especially what was sent to North Korea — appeared to have been transported on government cargo planes.

    Pakistani and American officials have said senior Pakistani Army officials would have known if nuclear hardware had been shipped out of a tightly guarded nuclear facility.

    Quick hits:

  • Give the Bush administration some credit for pushing Musharraf into taking action;

  • One wonders whether the information culled from Khan's confession will be useful in severing what appears to be a well-developed black market in nuclear technology.

  • One really wonders whether any Pakistani officials will be implicated. The story suggests that this should happen but won't.
  • UPDATE: Several commenters are assuming that I'm accepting the Pakistani investigation at face value, when in fact the Musharraf government knew about this all along. Actually, what I think is worthy of mention is that the government has finally admitted that there's a problem. Until two months ago they weren't even willing to do this.

    posted by Dan at 01:50 PM | Comments (8) | Trackbacks (0)

    Open Kerry thread

    Andrew Sullivan and Mickey Kaus are teeing off on John Kerry. Neither of them have a comments feature, so discuss the validity of their critiques here.

    Given Kerry's populist message, this Washington Post story seems particularly troublesome:

    Sen. John F. Kerry (D-Mass.), who has made a fight against corporate special interests a centerpiece of his front-running campaign for the Democratic presidential nomination, has raised more money from paid lobbyists than any other senator over the past 15 years, federal records show.

    Kerry, a 19-year veteran of the Senate who fought and won four expensive political campaigns, has received nearly $640,000 from lobbyists, many representing telecommunications and financial companies with business before his committee, according to Federal Election Commission data compiled by the nonpartisan Center for Responsive Politics.

    For his presidential race, Kerry has raised more than $225,000 from lobbyists, better than twice as much as his nearest Democratic rival.

    UPDATE: Kevin Drum is mystified by Kerry's ability to escape mainstream media criticism: "It's unprecedented for a clear frontrunner to be treated so gingerly by practically everyone. Does Kerry have secret files on all these guys, or what?" Calpundit has dueling Time covers to underscore his point.

    Speaking of Time, Joe Klein disagrees, believing that that the intense primary competition to date has sharpened the Democratic message:

    This primary campaign is the best thing that has happened to the Democratic Party since Bill Clinton. It is reborn and feisty, thanks in large part to the partisan jolt provided by Dean. The leading Democrats are now making strong, sharp arguments against the President's most fateful decisions: the blind rush into an elective war, the economic and legislative tilt toward the wealthy. If recent performances are any guide, the President hasn't developed an adequate response yet. He will have to break free from his cocoon and reacquaint himself with the public, if he hopes to find one.

    posted by Dan at 12:45 PM | Comments (41) | Trackbacks (1)

    Differentiating between outsourcing and offshoring

    Chuck Simmins makes an important distinction (link via Glenn Reynolds):

    Most outsourced jobs don't go to India. They stay right here in the good, old U.S.A. That clerk from Accountemps or secretary from Kelly. That RN at your hospital. The cleaning crew in your office. Outsourced jobs.

    That's why I worry as the rants go on and on about the evils of outsourcing. For the few jobs that go overseas, the correction potentially stands to bite a whole bunch of good people here in the United States.

    Most outsourcing is done in the United States and Americans work for outsourcing firms.

    He also criticizes those on the right who complain about "offshoring" which is outsourcing done overseas:

    The discussion is about outsourcing jobs overseas. I see many conservatives and libertarians abandoning their principles here to oppose the transfer of any jobs overseas.

    "Good" jobs are being sent overseas. "Good" is code for high paying jobs. And the hidden yet primary argument is that Americans deserve to have high paying jobs, no matter what the circumstances.

    I understand unions pushing this point, but I don't understand the many conservatives and libertarians who are. Job entitlement is not a conservative nor a libertarian position. And that is what the argument about outsourcing overseas boils down to; "we" are entitled to those jobs.

    Simmins is conflating libertarians and conservatives on this issue. The former are free market advocates and the latter are economic nationalists. Economic nationalists value social stability and relative gains more than maximizing either static or dynamic economic efficiency. With this set of preferences, it's not surprising to see this group of pundits ract bash offshoring.

    posted by Dan at 10:58 AM | Comments (16) | Trackbacks (0)

    Sunday, February 1, 2004

    A record month

    January was a good month for According to Sitemeter, the blog attracted more than 200,000 unique visits last month.

    Thanks to one and all for clicking!

    posted by Dan at 11:34 PM | Comments (4) | Trackbacks (0)