Friday, February 25, 2005
The Saudis move, but move slowly
Indeed, as Glenn Reynolds has recently pointed out, the Saudis remain a potent source of terrorist support.
Neverheless, the Saudi regime does seem to be moving forward -- however slowly -- in altering their behavior in constructive ways. Again, it's maddeningly slow, but progress nevertheless.
This week saw further evidence of this. This past week the British and Saudis held a two-day conference entitled "Two Kingdoms: The Challenges Ahead," and some constructive things were said. Khaled Almaeena reports an example of this in Arab News :
Similarly, the Saudi government is making tentative noises about giving women the right to vote in future election. Beth Gardiner explains this in an Associated Press report:
One wonders if the strong performance of the conservatives in the first round of regional elections convinced the regime that giving women the political franchise might be in their own self-interest.
This post is not meant to be a jumping up and down saying, "Look, Saudi reforms!! Yippee!!" Clearly, this is going to take a while.
But it would be nice if one could say that the Saudis were only 85 years behind the times -- instead of 250.
Developing.... very, very, slowly.
Thursday, February 24, 2005
Call me "Dr. Dre" from now on
Sampling, cutting, pasting, and then writing a few short words of commentary? That b**ch Levin don't know what the f*** he's talking about. [Fo'shizzle!--ed.]
[Did Levin get the "circle jerk" meme from Bill Keller--ed. Beats me. Speaking of Keller, however, Jeff Jarvis has posted his ongoing correspondence with the New York Times Executive Editor. Oh, and Slate has added a new feature, Today's Blogs -- which appears to be a useful compliment to their equally useful Today's Papers feature.]
How stable is Bretton Woods 2?
The Bretton Woods regime for managing the international monetary system was inherently unstable because of the Triffin dilemma. Nevertheless, the true Bretton Woods system did last for 14 years (1958-1971). It lasted for eleven years after Triffin explained the system couldn't last forever.
Economists are labelling the current monetary arrangements as Bretton Woods 2. Under this system, the U.S. is running massive current account deficits to be the source of export-led growth for other countries. To fund this deficit, central banks, particularly those on the Pacific Rim, are buying up dollars and dollar-denominated assets.
The dollar’s fall in value relative to the euro is costly for the central banks holding large amounts of dollar-denominated assets. In purchasing so many dollars, these banks have a powerful incentive to ensure that their investment retains its value -- but they an equally powerful incentive to sell off their dollars if it appears that they will rapidly depreciate. This cost creates a dilemma for these central banks. Collectively, these central banks have an incentive to hold on to their dollars, so as to maintain its value on world currency markets. Individually, each central bank has an incentive to sell dollars and diversify its holdings into other hard currencies. This fear of defection leads to a classic prisoner’s dilemma—and the risk that these central banks will simultaneously try to diversify their currency portfolios poses the greatest threat toward a run on the dollar.
So, the stability of this arrangement depends heavily on how much cooperation there is among the official purchasers of the dollar, and the extent to which these institutions are willing to absorb the costs of holding a depreciating asset compared to the benefit of subsidizing export-led growth as a means of absorbing underutilized labor.
Earlier this week it looked like South Korea was about to trigger the fall in dominoes. As Brad recounts:
However, it turns out that the predictions of Korean behavior were greatly exaggerated, as Hae Won Choi, Seah Park, and Mary Kissel explain in the Wall Street Journal:
[So Roubini and Setser weren't right today -- what about next week, next month, or next year?--ed.] Ah, this leads to door #2: David H. Levey and Stuart S. Brown's "The Overstretch Myth" in the March/April 2005 issue of Foreign Affairs. The key section:
An abstract of one of the Dooley, Folkerts-Landau, and Garber papers concurs with this evaluation of the "peripheral" economies:
[So who's right? WHO'S RIGHT-???!!!ed.] I'm not so stupid as to claim the ability to render a judgment on this question. What I can say is that among the economists I talk to, more of them to open door #2. However, the market hiccup that took place earlier this week highlights the fragility of this equilibrium. In the end, this is more a question of political economy than straight economics, and the likelihood of successful cooperation among this group of economies makes me wonder about the robustness of Bretton Woods 2. So even though I understand the logic of their arguments, I remain a little less sanguine than my economic advisors.
Wednesday, February 23, 2005
Interesting facts of the day
The Economist has a survey on New York City that is chock full of fascinating information. Some of the items that piqued my interest:
Click here to hear an audio interview with the survey's author, Anthony Gottlieb.
Technical difficulties solved
For the past week there had been some difficulties with the trackback feature on the blog.
Everything should be working properly now.
Apologies to one and all for the inconvenience.
Help out the Millennium Challenge Corporation!
I received the following e-mail from the Millennium Challenge Corporation, a government entity designed to administer the Millennium Challenge Accounts proposed by President Bush during his first term. Here's the key parts of the e-mail:
I'm happy to hear useful suggestions on this front. The indicators that I've seen on this issue are mostly the macro-historical stuff coming from the world polity paradigm in sociology. I suspect that even the progenitors of these measures would acknowledge that they wouldn't be of much use for the MCC.
How offshore outsourcing has devastated the high tech sector
A year ago I was in the middle of writing "The Outsourcing Bogeyman" for Foreign Affairs. When it came out, I received a fair amount of static from tech workers explaining that I didn't understand the situation they faced. Since offshore outsourcing is an ever-increasing phenomenon, perhaps we should examine how offshoring devastated the tech sector over the course of the past year.
Hmmm.... well, just just means fewer tech people are losing their jobs. Surely it doesn't mean that these firms are hiring again, right? Let's check out this Kathie O'Donnell story for CBS MarketWatch:
Well, I'm sure this doesn't translate into increased demand for white collar workers across the board or anything.
Besides, as the smarter critics point out, what matters less than the number of jobs lost or gained is the downward effect that offshoring has on wages. Surely, offshore outsourcing would have put a damper on wages in the high-tech sector, right? Let's check out this Frauenheim story for CNET:
To be fair, there is contradictory information on the wage issue. This Dice survey suggests that wages fell overall in the computer sector in 2004. But even this report observes that:
This would be consistent with the homeshoring phenomenon of tech sectors doing well in lower-wage areas outside of Silicon Valley. The fact that the Dice survey does not appear to cover new tech hotspots like Oklahoma leads me to trust the Labor Department figures more.
[So things are better in 2004 than in 2003 -- but the labor market in IT has sucked for a couple of years. Why are you so giddy about one year of positive data?--ed. The downturn in the IT labor market was real, but there were a lot of reasons for that -- the end of Y2K, the dot-com crash, the recession, and, yes, offshore outsourcing. However, offshoring critics has insisted that the problem is only getting worse and will lead to devastating employment and wage effects on the IT sector. Clearly, offshoring is not going away in the IT sector -- but the 2004 data suggests that the götterdammerung assumption was, at the very least, a gross exaggeration.]
North Korea zigs, North Korea zags
It appears that North Korea has changed its mind about walking away from six-party talks on its nuclear ambitions. Anna Fifield and Richard McGregor provide the following report in the Financial Times:
If this change of tack pans out -- the North Korean statement has an awful lot of wiggle room -- then North Korea has put China into an increasingly awkward position. This episode would demonstrate that China is the one country that can get the North Koreans to cooperate. Which means, down the road, that China will be pressured by the other members of the six-party talks to compel North Korea to halt its weapons program.
Tuesday, February 22, 2005
A different take on the female public intellectual "problem"
I've got a lot on my plate right now, which is why I've been studiously avoiding the whole Larry Summers kerfuffle -- I haven't had the time to read his remarks in full and don't want to wade in those waters until/if I do.
However, I do want to wade into an eddy of the Michael Kinsley/Susan Estrich blood feud over a Los Angeles Times op-ed by Charlotte Allen. To be specific, I don't want to bother with Estrich or Kinsley -- click here, here, here, and here for more on them -- but rather examine Allen's original hypothesis a bit more carefully -- because, to put it kindly, it's a crock of s***.
Here's the nub of Allen's argument:
Let's conduct a little experiment: as a faculty member at the University of Chicago, and looking only at my colleagues within my university, can I gin up a list of notable public intellectuals who write on topics beyond feminism? Why, yes, yes I can!!:
Hey, I did that without breaking a sweat!!
If Allen -- who co-edits (???) Inkwell, the blog of the Independent Women's Forum -- wants to claim that female public intellectuals are hostage to doctrinnaire feminism, I'll concede that she doesn't have to search that far to find examples to support her hypothesis. However, she appears not to have searched at all for any cases that contradict her hypothesis. And that doesn't make her a very good public intellectual at all.
[You only searched within the confines of your ivory tower. Maybe your university is atypical--ed. I'd agree, but beyond the U of C, it's still not that difficult to think of counterexamples to Charlotte Allen's hypothesis -- Deborah Dickerson, Gertrude Himmelfarb, Jessica Tuchman Matthews, Peggy Noonan, Virginia Postrel, Diane Ravitch, Claudia Rossett, Anne-Marie Slaughter, Theda Skocpol, etc. (UPDATE: Other excellent suggestions from the comments thread -- Anne Applebaum, Amy Guttman, Samantha Power, Elaine Scarry, etc.)]
UPDATE: Aspiring public intellectual Phoebe Maltz offers her take:
Monday, February 21, 2005
Bill Keller on the blogosphere
New York Times Executive Editor Bill Keller has been quite chatty about the blogosphere as of late. According to this report by Amanda Erickson in the Columbia Spectator:
Wow, sounds like this Keller guy is a bit of an anti-blog jerk. Wait, it gets worse -- in an open letter to Jeff Jarvis he says that, "bloggers... are paranoid, propagandistic, unreliable, hate-filled, self-indulgent, self-important and humorless." (link via Glenn Reynolds.)
Now, before anyone gets too upset, bear in mind that the quote I just generated from Keller's letter is not really consistent with the overall tone of his snarky but friendly exchange with Jarvis. Read the whole letter. Let's put that quote in context now:
Sounds correct to me -- I might add that if you take "cable television" or "talk radio" as a media category, the comment still holds.
What's interesting about these different Keller episodes is that the Columbia Spectator reporter probably took just the juiciest bit from Keller's comments regardless of whether they were consistent with the overall tenor of his remarks -- whereas Jarvis ("mediaman by day, blogboy by night") reprinted all of Keller's comments, allowing one to judge Keller's argument in toto.
Oddly enough, this is undoubtedly one trait that good bloggers share with the New York Times. The Times, as the "paper of record," was very good about printing the full text of important documents and speeches before there was a world wide web. The best bloggers, through hyperlinks, can engage in a similar practice when parsing out someone's comments.
Just a thought.
Sunday, February 20, 2005
Interesting developments in Iraq
Read the whole thing. Ware's story jibes with Patrick Quinn's AP account of the Sunni response to both the election and the latest string of suicide attacks:
Even in a best-case scenario, successful negotiations with the Baathist insurgents would not end the violence in Iraq that Zarqawi and others would generate. And, if memory serves, the Sunnis made similar noises about participating in the political process after Hussein's capture.
Still, these are very encouraging signs.
UPDATE: Be sure to check out Phil Carter's post on the spontaneous creation of anti-insurgency militias in Iraq.
Dumb, dumb A-Rod
[NOTE: If you don't care about baseball, just skip this post entirely.]
Alex Rodriguez reported to spring training for the Yankees today. Over the past week multiple members of the Red Sox have bashed A-Rod to varying degrees over comments he made in the offseason and his on-the-field altercations with the Red Sox during the regular season -- and most infamously, in Game 6 of the ALCS (go to this link and then click on the "Plays of the Game" for the 10/19 game vs. the Yankees).
To which I can only say, "Huh?"
Recall the situation -- the Red Sox were leading 4-2 with one out in the bottom of the 8th inning and Derek Jeter on first base. A-Rod hits a weak squibbler to Arroyo, and tried to slap it away. For his troubles, A-Rod was called out and Jeter was sent back to first base. If A-Rod doesn't slap at Arroyo's glove, he's advanced Jeter into scoring position with Gary Sheffield at the plate. It sounds minor, but having Jeter at second rather than first makes it much easier for Sheffield to drive in a run.
What A-Rod did wasn't silly -- it was downright stupid.
UPDATE: Speaking of A-Rod, Karen Guregian has a piece in today's Boston Herald excoriating the Red Sox players for bashing A-Rod so much. This is a bit rich -- as Murray Chass points out in today's New York Times, it's the media trying to keep this story alive:
Hat tip: David Pinto.