Friday, April 15, 2005

The Bush administration gets says it's getting serious about the dollar

Looks like the Bush administration is shifting from passive-aggressive to aggressive in trying to get the Chinese to revalue their currency. Andrew Balls and Edward Alden have the story in the Financial Times:

The US administration is calling for China to move immediately to introduce a flexible currency, a marked shift in tactics after several years of patient diplomacy aimed at nudging China towards allowing the renminbi to float.

A senior US administration official told the Financial Times on Friday: “Action is needed now. This is a co-ordinated effort to get the message across.”

The decision to demand prompt action by Beijing comes in the face of growing pressure from Congress over the burgeoning US trade deficit with China. Officials acknowledge they were shocked by a 67-33 Senate vote earlier this month to allow consideration of a bill championed by Democratic senator Charles Schumer that would impose a 27.5 per cent tariff on all Chinese imports if China does not revalue in the next six months.

“I think they took the Schumer vote very, very seriously,” said Frank Vargo, international vice-president of the National Association of Manufacturers, which has been urging a harder US line on China's currency.

There is also concern in the administration that Beijing might have interpreted the Treasury department's toned-down rhetoric of recent months as a sign that the US is prepared to be infinitely patient on the issue.

The message is being delivered to China at all levels in advance of this weekend's Group of Seven meeting in Washington. China, which has been a guest at the past two G7 meetings, is not sending its finance minister and central bank governor to this weekend's gathering. (emphases in original)

That last bit suggests to me that this pressure won't have an appreciable effect anytime soon. This will irritate the Bush administration but really irritate the European members of the G-7, who blame the United States and the Pacific Rim for the magnitude of current global imbalances.


UPDATE: See follow-on posts here and here.

posted by Dan at 08:02 PM | Comments (16) | Trackbacks (5)

Will realpolitik sell the EU constitution to the French?

In six weeks, the French will vote on a referendum to ratify the EU constitution. Current polling in France runs about 55% against, and twelve straight polls have had the "no" camp in the lead.

In an attempt to combat this trend, last night French President Jacques Chirac held a nationally televised town hall-style meeting with 83 "young people."

Two things were interesting about the event and its aftermath. The first was Chirac's principal arguments for ratification -- political and economic balancing against the United States. According to the Wadhington Post's Erika Lorentzsen:

"What would be the role of France tomorrow if we block this process?" [Chirac] asked during a question-and-answer session with young people and journalists, broadcast from the Elysee Palace. "We will not be strong, and Europe would not be strong enough against the big powers."

Proponents of the constitution contend that it is crucial to making the European Union, an often internally divided alliance, more influential in world affairs. Among many Europeans, this means standing up to the United States....

In his remarks, Chirac sought to convince voters that irrational worries were standing in the way of the constitution, which he said would protect Europe from an "ultra-liberal" and "Anglo-Saxon" economic model, code words for American-style free-market capitalism.

"I'm always surprised to see this expression of fear," he said. "Europe needs to feel proud of itself and France in its principal role in defending our interests. This fear of young people I don't understand. I have confidence in France and our future."

In the Financial Times, John Thornhill and Peggy Hollinger provide an even more explicit quote:

Mr Chirac said the treaty, which established a new set of rules for the expanded European Union of 25 countries, was essential to preserve French values. “What is the interest of the Anglo-Saxon countries and particularly the US? It is naturally to stop Europe's construction, which risks creating a much stronger Europe tomorrow,” he said.

The second interesting thing was that Chirac's line of argumentation floundered. Both the BBC and CNN International have recaps of the French media response, and they were not good. From the latter's round-up:

"In front of an audience in which those favoring the 'No' seemed to be in the majority, the head of state often struggled to make heard his pro-European plea during a muddled broadcast," the conservative Le Figaro wrote on its front page.

"Chirac: difficulty reassuring," LCI television said, while the left-leaning Liberation newspapers said Chirac appeared "strained, almost clenched-up" in the meeting.

Laurent Fabius, a former Socialist prime minister and leading "no" campaigner accused Chirac of trying to scare voters into backing the charter.

"I found Mr. Chirac, like the constitution, long and not very convincing," he told RTL radio.

"I was very struck to see Mr. Chirac saying on the one hand, 'don't be afraid', but his main argument was to try to create fear."

The Economist, among others points out that much of the "no" support might have less to do with the EU constitution and more to do with Chirac's growing unpopularity. However. going back to the FT, it's possible that the two may actually be linked:

[S]ome of the audience said the constitution was too complex and doubted it would make any difference to their lives. They quizzed Mr Chirac aggressively over France's high unemployment, the threat to the country's public services and the possible influx of cheap labour from eastern Europe.

Asked by one voter why the unemployment rate was so much lower in the UK than in France, Mr Chirac replied that Britain had social rules that would not be “acceptable to us”.

....Mr Chirac's greatest political rival, Nicolas Sarkozy, the populist president of the ruling UMP party, on Thursday contradicted the president's upbeat views by saying that the “French social model” was failing the people.

In a speech in southern France, Mr Sarkozy said that with a 10 per cent unemployment rate France should stop saying its system worked better than that of others. “In 20 years both the left and the right have doubled the credits to combat unemployment but we have not produced one fewer unemployed person,” he said.

Even the Economist acknowledges that, "in contrast to the Maastricht vote, which led to the euro, it is hard to say what is at stake in the EU constitution."

It will be very interesting to see how this plays out over the next six weeks. My hunch is that support for the "yes" side will increase as the vote nears -- and even if the referendum fails, the French can simply schedule another referendum. On the other hand, if the quixotic combination of realpolitik and social democracy doesn't generate majority support in France, then I'm not sure where it will work.


posted by Dan at 12:12 PM | Comments (19) | Trackbacks (6)

Does anyone in the academy read Saul Bellow?

The common perception of academia is that being a professor is a cushy life. This isn't the post to debate that point, but it's always stuck me that this observation elides a really important fact: getting a tenure-track job at a good university has become increasingly difficult over the years. A ratio of three hundred applicants to one faculty position is not unusual. So even if these are good jobs, there ain't a ton of them to go around.

This fact carries an even greater bite in the humanities. As tough as it may be to get hired in political science, it's a cakewalk compared to getting a position in, say, English departments. I know far too many acquaintances who are whip-smart but drop out of academia because they picked the wrong department to get a Ph.D., and so their hiring market sucks eggs.

The point is, those people who do manage to get the good jobs have to be pretty talented in their area of specialty. Which is a fact I keep reminding myself of this fact whenever I read about an academic saying something stupid about their subject in the mainstream media.

Take for example, this Patrick T. Reardon story in the Chicago Tribune about why "relatively few college and high school courses study Bellow." Here's how Erin G. Carlston, an assistant professor of English at the University of North Carolina at Chapel Hill, answered the question:

"The truth is I dislike Bellow so don't teach him myself. I'd guess from informal conversations with friends that my dislike for Bellow is fairly widely shared among women scholars, at least. But it's also highly idiosyncratic and all about gender and ethnicity, for me.

"I'd say in a general way that most post-World War II literature by American white men strikes me as incredibly whiny. It's trivial and narrowly focused, and they go on and on about how it's the end of Western Civilization because they can't get women to pick up their socks anymore.

"Bellow, being Jewish, is less offensive to me on these grounds than [John] Updike and his ilk, for whom I have no patience at all -- I mean, American Jewish men have actual cause to be insecure . . . and their relationship to power is much more complicated than it is for WASPs.

"But he still fits, in my mind, with a kind of writing I think of as self-absorbed and trivial. There's no real tragedy, no joy, no relish in humanity. It's all kind of flat."

The really appalling thing about this quote is that, according to Calston's UNC web page, "Prof. Carlston's research interests are in comparative modernisms and especially the intersections between sexuality studies and Jewish studies." She's also working on a book chapter that "looks at the way race, religious confession, and sexuality have been defined in relation to the modern, Western nation-state and notions of citizenship." So it's not like Bellow is completely irrelevant to her area of expertise.

This would be the equivalent of me telling a reporter after George Kennan's death:

The truth is I dislike Kennan so don't teach him myself. I'd guess from informal conversations with friends that my dislike for Kennan is fairly widely shared among Jewish and minority scholars, at least. But it's also highly idiosyncratic and all about ethnicity, for me.

I'd say in a general way that most post-World War II grand strategy by American white men strikes me as incredibly whiny. It's trivial and narrowly focused, and they go on and on about how it's the end of Western Civilization because democratic publics in these countries are exercising more influence over foreign policy.

Carlston's current research project is a "book-in-progress, Double Agents, considers literary responses to several major espionage scandals of the late nineteenth and twentieth centuries." This sounds pretty interesting, actually, and I hope it proves to be a path-breaking work on the subject. Because it's banal statements like the one above that cause me to doubt the way my profession works in practice.

posted by Dan at 10:05 AM | Comments (20) | Trackbacks (0)

The cyberbalkanization of trivia?

Bryan Curtis has an interesting essay at Slate about the alleged decline and fall of Trivial Pursuit at the hands of the Internet. The closing two pragraphs:

How could Trivial Pursuit survive in the age of Google? The Internet has rewritten the rules of the game. The old measure of the trivia master was how many facts he could cram into his head. The new measure is how nimbly he can manipulate a search engine to call up the answer. The ABC show Who Wants To Be a Millionaire included a lifeline called "phone-a-friend," in which a desperate contestant was supposed to call upon the knowledge of a smart companion. Seconds after the contestant dialed for help, you could hear the guy on the other end pecking away at a keyboard—Googling—and I thought, This is it. Trivia is dead.

That's overstating it a little. Trivia lives; it's generalist trivia, the kind of fluency that Trivial Pursuit prized, that's ailing. Just as the Internet splintered trivia into thousands of niches, Trivial Pursuit has contented itself with turning out games like "90s Time Capsule" and "Book Lover's," and, more frighteningly, those devoted solely to the vagaries of Lord of the Rings and Star Wars. Gone is the proud generalist of the original Trivial Pursuit, who knew the most common Russian surname (Ivanov) and the international radio code word for the letter O (Oscar). In his place is the specialist, who knows every inch of Return of the Jedi. There are many of us who have a nagging fear we belong to the latter group. "What jungle planet do Wookiees hail from?" a Star Wars card asks. Let's say, hypothetically and only for the sake of argument, that I know the answer. Who is supposed to be impressed by that?

This argument is akin to Cass Sunstein's "cyberbalkanization" hypothesis from The only problem is that Curtis contradicts his closing earlier in the piece by observing: "23 years after its American debut, the original [Genus] edition still accounts for a huge percentage of Trivial Pursuit's 80 million units sold." If memory serves, a Genus II edition was also pitched to the generalist. In fact, since most trivia games are played in person, the Internet's effect on this social institution is likely to be marginal.

posted by Dan at 12:00 AM | Comments (7) | Trackbacks (0)

Thursday, April 14, 2005

Bravo to the public relations staff

The hardworking PR team here at has had a good week:

1) Last Friday, Slate's Jack Shafer managed to compliment me while simultaneously comparing me and other bloggers to low-wage Chinese labor:

When it comes to opinion pieces, bloggers have an edge over the pros. I'm not saying that bloggers are necessarily better writers than full-time members of the commentariat, but Daily Kos, Joshua Marshall, Daniel Drezner, Daily Howler, Volokh Conspiracy, Brad DeLong, et al., produce more immediate and succinct copy than their mainstream colleagues. To stretch a manufacturing analogy, unsalaried bloggers represent low-cost Chinese laborers, professional journalists the well-paid-with-benefits American workers. Given the right tools and infrastructure, low-cost Chinese labor can produce work that is every bit the equal of the high-price kind. What the Web has done is remove the barriers to entry from opinion journalism, much to the benefit of readers. If told that I had to forgo the editorial and op-ed pages of the New York Times, the Wall Street Journal, the Washington Post, and the Los Angeles Times or lose my blog bookmarks, I'd say hands off my browser!

2) Today I discovered that the John Bolton post got mentioned on the "Inside The Blogs" feature at CNN's Inside Politics with Judy Woodruff -- click here to see the video, and here to read the transcript (in which they misspell my last name).

I'm grateful to CNN's "blog correspondents" Jacki Schechner and Cal Chamberlain [Now there's somehing to go on the old resume!--ed.] Seeing the clip, my one thought is that there has got to be a better way for CNN to show the blogs than just jamming a camera at the computer screen.

3) Finally, the Village Voice's education supplement discusses blogs and academia, or, as they put it, "Blogodemia." In her brief guide to scholar bloggers, Geeta Dayal says about yours truly:

Politics blogosphere-wise, he's one of the heaviest hitters.

She also has nice things to say about my colleague at the U of C, physicist Sean Carroll and his blog Preposterous Universe.

Dayal's main story about how the blogosphere is invading academia is worth checking out as well. This sounds awfully familiar:

[Larry] Lessig found that blogging opened up his sphere of interaction considerably. "I've published a bunch of articles in law reviews, and I think I've gotten maybe a total of 10 letters about them in the history of my career as an academic," he says. "I publish stuff on the blog, I get literally hundreds of e-mails about things all the time."

Being compared to cheap labor, getting my name misspelled at, and a citation in the Village Voice -- yes, it's been a banner week for the PR staff!!

posted by Dan at 11:48 PM | Comments (4) | Trackbacks (0)

John Bolton is right about the United Nations

John Bolton's confirmation as U.S. ambassador to the United Nations has been in the news as of late (the committee vote for him has been delayed until next week). There's not a lot of love for Bolton among Democrats, Republicans of the Richard Lugar ilk, or, apparently, State Department staffers.

Richard Cohen's column in the Washington Post entitled "Disaster, Not Diplomacy" ably summarizes the conventional take on Bolton. And while I don't want to defend Bolton's record or comportment (see William Kristol for one defense) there is one line of criticism that really bugs the hell out of me. From Cohen's column:

The rap against Bolton's nomination as U.N. ambassador is that he has maximum contempt for that organization. He once went so far as to flatly declare that "there is no United Nations," just an international community that occasionally "can be led by the only real power left in the world -- and that's the United States." (emphasis added)

OK, let's get that quote in context. This is from a Democracy Now! web page, which informs us that the original quote came from a Bolton presentation "more than 10 years ago where he was speaking at an event called the "Global Structures Convocation," held on February 3, 1994 in New York":

The point that I want to leave with you in this very brief presentation is where I started, is that there is no United Nations. There is an international community that occasionally can be led by the only real power left in the world, and that's the United States, when it suits our interest, and when we can get others to go along. And I think it would be a real mistake to count on the United Nations as if it is some disembodied entity out there that can function on its own.

I don't know if Bolton is a serial bully, I don't know if he'd be a great ambassador to the UN, and I share Jonah Goldberg's concern about the moustache, but I will say one thing -- Bolton's assessment of the United Nations was and is 100% correct. He's not saying the organization doesn't exist -- he's saying that thinking of the UN as a single coherent actor is both factually incorrect and counterproductive to U.S. foreign policy. The United Nations acts in a forceful manner if and only if the United States and other great powers agree that such action is necessary. [What about specialized bureaucracies like the UN Development Program or the World Health Organization?--ed. The more "technical" agencies do have more autonomy, but even in these areas the great power delegations wield effective vetoes and can guide UN actions in these issue areas.] It's telling that a few months after Bolton made this statement, the U.N. decided not to get involved in the Rwandan genocide -- primarily because the U.S. government wanted no part of getting involved.

I might add that most international relations scholars would acknowledge this fact to be true for most international governmental organizations (IGOs) in existence. These organizations -- including the UN -- provide useful fora for negotiation, bargaining, diplomatic coordination, and occasionally collective action. At best, IGO secretariats can, once in a blue moon, try to get an issue or policy option onto the global agenda. But to go from that possibility to thinking of them as truly independent actors is to make a very heroic assumption about the functioning of world politics.

[How strong is this consensus among IR scholars?--ed. It's not unanimous, but let's put it this way. Susan Strange's last book, The Retreat of the State (CUP, 1996), was pretty much devoted to showing the myriad ways in which states were losing their control over world politics to multinational corporations, criminal mafias, etc. When she got to IGOs, however, Strange threw up her hands and conceded that for international institutions, states still rule the roost.]

Perhaps Bolton takes more glee in this assessment of the UN than his critics do -- and that's a normative debate that will not go away. But to chide Bolton for the quoted passage above is absurd. He was making an empirical assessment of the United Nations -- and his assessment was correct.

UPDATE: Note to self -- check out David Brooks before posting on a more regular basis.

posted by Dan at 11:50 AM | Comments (19) | Trackbacks (3)

Wednesday, April 13, 2005

Be afraid but not too afraid about the dollar

Longtime readers of this blog will recognize my occasional concern with the size of the trade deficit and the future of the dollar. On this question, economists split into two clear camps -- camp one thinks the current equilibrium -- in which the U.S. runs enormous current account deficits and Pacific Rim central banks provide the financing for said deficits -- is incredibly fragile and that the dollar's value will fall hard, fast, and soon. The other camp thinks that because most actors in the system have a vested interest in seeing the status quo persist, the current equilibrium is more stable than many think, and that over time, the dollar's slow decline will help sort the system out.

Today the International Monetary fund follows up on the World Bank's warnings from last week and says that the current situation is not good. Andrew Balls provides a recap in the Financial Times:

The International Monetary Fund on Wednesday expressed frustration that rich and developing countries alike have failed to take the steps needed to reduce growing global imbalances.

The fund has long been calling for efforts to increase national savings in the US, including cutting the fiscal deficit, structural reforms to remove obstacles to growth in Europe and Japan, and greater exchange rate flexibility in Asia to boost domestic demand....

The fund forecasts that the US current account deficit will grow slightly to 5.8 per cent of gross domestic product this year, with little improvement thereafter. Germany and Japan are both forecast to have surpluses close to 3½ per cent of GDP.

“The US external deficit has so far been financed relatively easily, aided by continued financial globalisation,” the report said. “However, the demand for US assets is not unlimited... a continuing sharp rise in US net external liabilities will carry increasing risks.”

As well as the possibility of a disorderly decline in the dollar, the fund identifed the possibility that inflation pressures lead to a spike in US interest rates, and the high and volatile oil price as key risks to the global outlook.

The Bush administration's pledge to halve the US fiscal deficit is not credible, owing to a number of items left out of the budget arithmetic, and “insufficiently ambitious” in any case, the report said....

China increased its foreign reserves by $200bn last year, as it intervened to keep its currency pegged to the depreciating US dollar. Other developing countries have built up big foreign reserves - partly to insure against financial market risks, and partly to maintain trade competitiveness.

“A number of emerging markets, especially in Emerging Asia, have built up reserves to protect against everything short of the Apocalypse,” Mr Rajan [IMF chief economist] said, "The reserve build up is now undermining monetary control as well as the soundness of their financial systems.”

For more on the IMF's reaction, see the transcipt of their press conference, as well as a link to their World Economic Outlook: Globalization and External Imbalances. This quote by Rajan stands out from the press conference:

The U.S., if it does not cut its fiscal deficit—the fiscal deficit is just one part. The other part is savings; private household savings have to also contribute. The fiscal deficit itself may not be enough. If U.S. savings do not increase adequately, you basically have to borrow from abroad. At some point, investors outside will have a tremendous amount of U.S. assets in their portfolio and will start worrying about their value and about whether they are adequately diversified.

Essentially, to convince them to hold U.S. assets, one of two things has to happen: either U.S. interest rates have to go up way above the alternative opportunities these people have, or the U.S. exchange rate has to depreciate far enough that they feel that an appreciating exchange rate provides returns which give them incentives to hold U.S. assets. Neither of these is a particularly palatable outcome.

On the "don't panic" side, James Surowiecki has an essay in The New Yorker concluding that although a hard landing would be bad, it probably won't happen:

Markets are hardly known for their tenderness. Usually, you can assume that everyone in a market is trying to make as much money as possible, with as little risk, but the currency market isn’t like most others. In the market for the dollar, many of the players have other things on their mind. China needs to go on selling Americans hundreds of billions in exports in order to keep its economy humming. A weaker dollar makes that harder. Asian central banks also already own trillions of dollars in American assets. As the dollar falls, so does the value of those assets. There are plenty of other traders in the currency markets—who have the luxury of being single-minded regarding profit—but the Asian banks are powerful enough to be, in effect, the lenders of last resort. As long as it’s in their self-interest to keep America afloat, the dollar will not crash....

There’s a good chance, then, that the landing will be soft—we lose the truffles but keep our homes—as long as everyone involved in keeping the dollar aloft continues to play the same game. No one, in Asia or anywhere else, wants to be the last guy out. What the Chinese and the Japanese do depends in large part on what they think everyone else is going to do. If the Chinese get the idea that Japan’s commitment to the dollar is wavering, or if they decide that the United States has no interest in altering its deadbeat ways, then they may try to make a run for it. Then again, that threat could act as a prod to keep the Americans in line. The currency market is a great example of what George Soros calls “reflexivity”: people’s predictions about what will happen to the dollar end up having a major impact on what actually does happen to the dollar. Our lenders are trying to strike a delicate balance: they’d like the dollar’s predicament to seem dire enough to make us change, but not so dire as to spark panic. So be afraid. Just don’t be very afraid.

posted by Dan at 05:25 PM | Comments (6) | Trackbacks (0)

Competition has been good for Boeing

The US-EU trade war over government subsidies to Boeing and Airbus -- well, mostly Airbus -- blows hot and cold, it's worth stepping back and seeing how the rise of Airbus has affected Boeing. Fortunately, the Chicago Tribune has been doing periodic stories on this very question in its "Battle for the Skies" feature. The latest installment by Michael Oneal makes two interesting points. One is the extent to which this competition is driven by the extent to which both companies cater and listen to their customers' needs:

After getting feedback from miffed customers last year that [Airbus SAS sales chief John] Leahy's sales team was much more responsive to their needs, Boeing has gone to school on its European rival. It has sped up decision-making, while dispatching senior executives and board members into the field to drum up sales. It has made winning back market share a priority and is enabling its salesmen to take more risks in pricing....

The problem for Boeing has been that Leahy and his team are everywhere. The Airbus chief has created a sales organization that performs more like the extension of a scrappy Silicon Valley start-up than the front end of an enterprise founded by four plodding European governments. It acts like a spy network, building relationships with airline executives and passing crucial information back to headquarters.

It's not so much that friendships sealed through expensive dinners and golf outings swing billion-dollar decisions.

The issue has more to do with customer insight. In the big-ticket business of selling airplanes, the countless hours spent schmoozing with people at all levels of an airline allow a sales organization to ferret out what's really important to the key decision-makers.

Leahy spends more than 200 days a year away from Toulouse, France, where he lives with his wife and the youngest of their three children. Over a 10-day period in March, he flew back and forth to the U.S. twice to tend to three different sales campaigns--Korean Air, Northwest and International Lease Finance Corp., a giant leasing company that is considering the [Boeing] 787 and the [Airbus] A350....

Customers say Leahy's sales style falls somewhere between a well-prepared debating champion and a snarling pit bull. Though he speaks with a slight New York accent, he has cultivated a certain European elan, favoring well-tailored suits and shirts with French cuffs.

His first triumph in the U.S. market was selling 100 narrow-body A320s to Northwest Airlines. Steven Rothmeier, the airline's chairman at the time, remembers being enthralled by Leahy's presentations, which seemed to anticipate all of his questions and supply well-thought-out answers.

"He would quickly figure out what the real issues were for us and address them," Rothmeier said. "With Boeing, you always got the feeling that all they had to do was show up."

....Leahy's game plan had several key dimensions. First of all, he tore down the walls in the marketing department and created specialty teams to chase specific customers. He had those teams analyze lost deals to figure out where a campaign had gone wrong and how to improve the effort in the future.

He also kept the lines of decision-making short and gave his salespeople lots of room to cut deals.

Nick Tomasetti, an aerospace industry veteran who replaced Leahy as head of the North American organization, remembers a time when Leahy authorized a design change in a freighter model Airbus was trying to sell to United Parcel Service Inc. The change meant the airplane could hold more cargo but also would force the Airbus production department to find a way to absorb the cost.

Leahy gave the green light.

"He would say, `OK guys, go ahead,'" Tomasetti said. "Then he'd go fight the internal battle."

The second interesting fact is that Airbus' success has prompted Boeing to do more than have Washington threaten a trade war. They've respnded to the competition by improving their productivity and their customer relations:

When it swept past Boeing to become the world's largest jetmaker two years ago, Airbus roused the long-slumbering giant. And now the chase is on.

On Monday... Korean Air announced it had ordered 10 Boeing 787s, while taking options on 10 more, partly because Boeing agreed to buy parts for the plane from the Koreans, souces say.

Northwest Airlines is also within days of buying 787s to update its aging fleet. Boeing and Northwest won't comment, but sources say a key part of the deal may be upfront financing from Boeing.

The two orders give Boeing's new program a major leg up in a battle that it had been losing badly for the past several years....

Boeing is fighting back hard with lower costs, an impressive new airplane and an all-out strategy focused on preventing Airbus from launching its own new product to compete.

If Boeing can win enough orders from airlines like Korean and Northwest, it might be able to kill the A350, which has yet to win launch authority from the Airbus board.

"They seem to be doing everything they can to stop the A350 from being an industrial launch,' said Leahy. "My job is to make sure that doesn't happen."

Airbus, he promised, will have 100 orders for the A350 in hand by the end of the year.

Ironically, Boeing may have Leahy to thank for many of the changes that allowed it back into the game. Watching Airbus soar from 18 percent of the market to 57 percent over the past decade has shaken Boeing from its bureaucratic torpor.

After getting feedback from miffed customers last year that Leahy's sales team was much more responsive to their needs, Boeing has gone to school on its European rival. It has sped up decision-making, while dispatching senior executives and board members into the field to drum up sales. It has made winning back market share a priority and is enabling its salesmen to take more risks in pricing.

In addition, it has revamped its production lines to make them more competitive with Airbus', and it finally has rolled out a compelling new product in the 787, the first commercial airplane with a fuselage and wings built almost entirely from carbon-fiber composites....

When Airbus launched its A330 in the late 1990s, the new plane rendered Boeing's 767 obsolete. The A330 took more than three-quarters of the midsize wide-body market and proved a major win for the Europeans. But last year, when Boeing rolled out plans for its highly efficient 787, Airbus pooh-poohed the new plane.

"When you've got 80 percent of a given market, " Leahy said, "you aren't spending a lot of time thinking about how to improve that position."

By fall, as Boeing began to generate real interest in its new plane, Airbus had to scramble to retrofit its A330 with new composite wings and high-thrust engines to create the A350. Now it has fallen behind in a key market, and Leahy is scrambling to get his board to spend $5.3 billion to build it, even as the company runs over budget on the $12 billion effort to get its giant A380 in the air this year.

posted by Dan at 10:09 AM | Comments (8) | Trackbacks (2)

Tuesday, April 12, 2005

Joel Engel goes Vizzini on the L-word

About once a quarter I'll experience a conversation in which I feel like Inigo Montoya's character in The Princess Bride when he hears Vizzini repeatedly say the word "inconceivable!" after witnessing yet another heroic feat by the masked and dangerous Dread Pirate Roberts. After hearing Vizzini say that word several times, Montoya finally turns to him and says, "I don't think that word means what you think it means."

I'm having an Inigo Montoya moment after reading Joel Engel go all Vizzini on the word "liberal" in The Weekly Standard. Here's a snippet:

Alas, somewhere over the last two decades or so, liberalism lost its root as the word liberal was perverted to the point of Orwellian inversion--and therefore rendered meaningless.

For example, rooting against the United States and for "insurgents" who delight in slaughtering innocents is many things (stupid, for one, also sad, evil, and short-sighted), but it is assuredly not liberal.

Decrying the American "religious right" for advocating a "culture of life" while simultaneously praising the neck-slicing Islamofascists is many things (start with pathetic), but it is not liberal.

Calling 3,000 workers who died when the buildings fell "little Eichmanns" is many things (vile, as well as repulsive and morally repugnant), but it is not liberal.

Protesting the painless execution of a sadistic murderer while cheering the removal of a feeding tube from a brain-damaged woman whose parents very much want her alive even if her estranged husband doesn't, is many things (incomprehensible, indefensible, and unforgivably cruel), but it is not liberal.

Marching against war every time the United States is involved--in fact only when the United States is involved--regardless of the war's purpose, is many things (reactionary for sure), but it is not liberal.

Engel's implication -- that all liberals are little Ward Chruchills -- is partisanship gone absurd. Conservative Ramesh Ponnuru makes this point in NRO's The Corner in discussing Engel's litany of non-liberal actions:

All of that is true--but most contemporary liberals would presumably agree with those sentiments. It may be that liberals should be criticized for not doing enough to distance themselves from people who hold these sentiments; but it is neither true nor fair, I think, to suggest that most liberals hold those sentiments themselves. And it advances no worthwhile cause to depict our society as more divided than it actually is.

In other words -- I don't think the modern incarnation of the word "liberal" means what Joel Engel thinks it means.

UPDATE: Mickey Kaus points out that the Associated Press can overgeneralize with the best of them -- this time with regard to defining "conservative":

Is "conservative activists" really the best phrase to describe the fundamentalist Christians who are sponsoring this anti-homosexuality event? Isn't that a little like identifying sponsors of a gun-control or militantly-pro-choice rally--or a gay rights event, for that matter--as "liberal activists"? (emphases in original).

posted by Dan at 02:59 PM | Comments (90) | Trackbacks (9)

Globalization and human welfare

Martin Wolf has a concise summary of globalization's variable effects on the human condition for the past few decades in his Whitman Lecture to the Institute for International Economics last week:

If we turn to human welfare, what is our assessment?

• Globalization has brought large economic gains to many parts of the world, above all to Asia, which has successfully exploited the ladder of development created by labor-intensive manufactures.

• Globalization has brought about huge reductions in the number of people in extreme poverty. According to the latest World Bank data, the proportion of the east Asian population living on less than a dollar a day at purchasing power parity fell from 56 percent in 1981 to 16 percent in 2001. This is the biggest and fastest reduction in extreme poverty in world history.

• The relatively rapid growth of Asian developing countries has almost certainly reduced global inequality among households for the first time since the 1820s.

• Globalization has brought big gains to the developed countries as well. Recent work by the Institute for International Economics suggests that the gains to the United States alone amount to $1,000 billion—almost 10 percent of GDP. For the United Kingdom, the gains must be far greater.

• Globalization has not worked well for Africa or much of Latin America. For this there are three reasons: the resource curse, persistent protectionism in agriculture, and the weak supply conditions in these countries. In addition, for these countries, the entry of China into the world economy is a massive shock, both positive and, in some cases, negative.

About the only thing I would add is that with regard to economic development, one could say, "________ has not worked well for Africa and much of Latin America" and you'd likely be correct no matter what filled in the blank. And I don't mean that scornfully, but rather tragically.

posted by Dan at 01:04 AM | Comments (27) | Trackbacks (1)

Monday, April 11, 2005

The crazy life of a city-state

Normally when a country's GDP shrinks by more than five percent in three months, on an annualized basis for the past three months (thanks, Jacob), alarm bells go off about the long term. In the case of Singapore, however, this appears to be the result of the normal vicissitudes of on particular industry combined with the fact that Singapore, a city-state, has a small domestic economy. John Burton provides some background in the Financial Times:

Singapore’s economy suffered its first quarter-on-quarter decline in nearly two years in the first three months of 2005, undermined by a sharp fall in pharmaceutical production, according to a preliminary government estimate on Monday.

Gross domestic product in the first quarter shrank by 5.8 per cent on an annualised basis from the fourth quarter of 2004, while on a year-on-year basis, GDP expanded by a sluggish 2.4 per cent.

The weak economic data underscored how Singapore’s increased dependence on the volatile pharmaceutical industry was creating great swings in the city-state’s quarterly growth rates....

Drug production can fluctuate widely from month to month, in contrast to electronics, Singapore’s other mainstay industry, whose production cycles can be measured in months and even years.

The production of pharmaceuticals is affected by long chemical processing times and frequent shutdowns of facilities for cleaning. The value of output is also affected as drug plants switch from one product to another, with each priced differently.

Drug production shrank 11.6 per cent in January from a year earlier and then fell by more than 60 per cent in February, which had prompted many economists to cut their forecasts for the first quarter.

In contrast, growth for other manufacturing industries, such as electronics, in the first quarter was “still healthy”, although slowing, the ministry said....

The weak economic data could force the central bank to stimulate growth by abandoning its policy of a “modest and gradual appreciation” of the Singapore dollar in favour of a neutral stance when it meets today for a twice-yearly review.

Singapore relies on its foreign exchange rate rather than interest rates to guide monetary policy because of the small and open nature of its economy.

The last two paragraph suggest one reason why Bretton Woods 2 might persist for longer than some predict. If Singapore decides to halt the appreciation of its currency, it's going to buy more dollars.

posted by Dan at 12:31 PM | Comments (4) | Trackbacks (2)

J. Lo, Conan the Barbarian, and Afghan Idol

You have to think that things are going pretty well in Afghanistan when a major subject of public debate is.... what's on television. Kim Barker explains in the Chicago Tribune:

The two men spend several minutes debating which came first, the chicken or the egg. They argue over whether people dream in color.

This hardly seems like the most controversial TV show in Afghanistan. But in between the polite chitchat, these men--the Afghan version of MTV veejays--play music videos, which sometimes feature heaving bosoms, dancing women and sexually suggestive lyrics.

Such videos have turned the show "Hop" into one of the most popular programs on the Afghan capital's most popular new television station, Tolo TV. They also have drawn the ire of the country's clerics and the scrutiny of the government.

"Watching a woman with half-naked breasts and a man and a woman sucking each other's lips on TV, like on Tolo, is not atocceptable," said Abdul Malik Kamawi, spokesman for the country's Supreme Court.

The debate over programming on the five private TV stations in Kabul highlights a major difficulty facing the new Afghanistan: trying to balance democratic freedoms and a largely conservative Islamic society. The constitution protects freedom of expression and prohibits anything that is against Islam. That inevitably leads to conflict, because what is against Islam often depends on who is watching.

Several new stations are pushing the limits in the land where the Taliban once banned TV sets and forced women to be hidden. They are playing Indian movies, which mostly focus on love and sexy couples dancing and singing. Some have shown movies from the United States, such as "Conan the Barbarian," with sex scenes....

On Tolo, people Rollerblade and fly kites at a New Year's celebration. Men and women talk to each other, even laugh together. Jennifer Lopez videos are shown frequently, and commercials tout the benefits of chicken bullion and dandruff shampoo. In many ways the station shows a vision of Kabul not as it necessarily is, but as many young people would like it to be.

A short makeover feature takes ordinary Afghans off the street and turns them into fashionable young people who would blend into any Western city. Think of it as "Hip Eye for the Traditional Afghan Guy." On one recent show, a young Afghan man with a beard, an uneven haircut and the typical Afghan knee-length shirt and matching pants got a shave, a haircut and a shower and was dressed in jeans and a modern shirt....

Most people on the street say Tolo TV is their favorite Afghan station. They like the news and the investigative reporting--new to Afghanistan. They like "Moments," a prank program similar to "Candid Camera." But most people, young and old, say their favorite show on Tolo is "Hop," which features videos from India, Iran, Turkey, the U.S. and Afghanistan.

"It's a good program," said Walid Shahbaz, 22, who was out shopping. "Mullahs are usually talking about things that are against Islam. But I don't think `Hop' is against Islam."

The TV station is planning to air a new program, one that station workers are certain will be a hit. It shows just how much the clerics are up against, and how much Afghanistan has changed since the fall of the Taliban in late 2001.

That show, modeled on a popular U.S. program, will feature men and women singing their way to fame. "Afghan Idol" will start shooting in a few weeks. (emphasis added)

I can just picture Virginia Postrel smiling at the bolded section.

UPDATE: Barker has a follow-up piece in Tuesday's Tribune on the opening of the first plastic surgery clinic in Kabul:

Most patients want their scars removed, all evidence of burns, skin diseases and even gunshot wounds erased. But others, hiding beneath their burqas, want nose jobs.

Cosmetic surgery has arrived in Kabul, in the form of the tiny Hamkar Surgical Clinic, across the street from the bombed-out Cinema Theatre building, in need of its own face-lift. In this clinic, tucked away at the top of a dark stairway, people can pay for tummy tucks, although no one has been brave enough yet to try. Women will be able to buy larger breasts, although only one woman has expressed interest so far.

"It's peaceful now in Afghanistan," nurse Mohammad Fazel said. "People can get rid of their wrinkles. They can get rid of their bad figures."

LAST UPDATE: Oxblog's Afghan correspondent provides an update on the situation on the ground outside of Kabul. Quick summary: "[E]nthusiasm, continued commitment, and some degree of optimism -- these are I think proper attitudes when considering the situation in Afghanistan."

posted by Dan at 12:22 PM | Comments (3) | Trackbacks (0)

Sunday, April 10, 2005

Real men don't worry about man dates

At a group dinner last night, a male friend who shall remain anonymous said that the first thing he read in the Sunday New York Times was the Style Section. In the Drezner household, that section generally falls under Erika's purview -- much like our division of labor with regard to the Book Review. However, I will often look at an article that my lovely wife recommends. The point is, this declaration from a close heterosexual friend neither surprised nor particularly preturbed me.

Today, however, the front-pager for the Style Section was a Jennifer 8. Lee story about the "man date". Some highlights:

The delicate posturing began with the phone call.

The proposal was that two buddies back in New York City for a holiday break in December meet to visit the Museum of Modern Art after its major renovation.

"He explicitly said, 'I know this is kind of weird, but we should probably go,' " said Matthew Speiser, 25, recalling his conversation with John Putman, 28, a former classmate from Williams College.

The weirdness was apparent once they reached the museum, where they semi-avoided each other as they made their way through the galleries and eschewed any public displays of connoisseurship. "We definitely went out of our way to look at things separately," recalled Mr. Speiser, who has had art-history classes in his time.

"We shuffled. We probably both pretended to know less about the art than we did."

Eager to cut the tension following what they perceived to be a slightly unmanly excursion - two guys looking at art together - they headed directly to a bar....

Simply defined a man date is two heterosexual men socializing without the crutch of business or sports. It is two guys meeting for the kind of outing a straight man might reasonably arrange with a woman. Dining together across a table without the aid of a television is a man date; eating at a bar is not. Taking a walk in the park together is a man date; going for a jog is not. Attending the movie "Friday Night Lights" is a man date, but going to see the Jets play is definitely not.

"Sideways," the Oscar-winning film about two buddies touring the central California wine country on the eve of the wedding of one of them, is one long and boozy man date.

Although "man date" is a coinage invented for this article, appearing nowhere in the literature of male bonding (or of homosexual panic), the 30 to 40 straight men interviewed, from their 20's to their 50's, living in cities across the country, instantly recognized the peculiar ritual even if they had not consciously examined its dos and don'ts. Depending on the activity and on the two men involved, an undercurrent of homoeroticism that may be present determines what feels comfortable or not on a man date, as Mr. Speiser and Mr. Putman discovered in their squeamishness at the Modern.

As someone who has gone on the occasional man date, I suspect Ms. Lee might be exaggerating the awkwardness of this particular social institution. Heterosexual men who are unafraid of saying that they read the Sunday Styles section first -- and the men who befriend them -- don't really care what other people think about two men sharing a meal, a movie, or an art gallery.

Next week in the Style Section, I want to read about trendy reporters who use numbers for middle initials.

UPDATE: to be fair, Mr. Lee changed her name before she became a reporter and did so for reasons having little to do with trendiness. Plus I've been assured by many that she is a very nice person.

This doesn't change the fact that the article is a crock of s&#t, however.

posted by Dan at 11:32 AM | Comments (18) | Trackbacks (2)