Saturday, April 23, 2005

Regarding The End of Poverty

Loyal readers of may recall that I blogged about Jeffrey Sachs and his book The End of Poverty last month. Well, I should confess that one reason for my interest in the book was because I was reviewing it for the New York Times Book Review.

The review is now available online. Go check it out.

[No excerpt?--ed. Not with this review. Besides, I'm busy prepping for the inevitable reply from Professor Sachs. What makes you think there will be a reply?--ed. Well, let's see:

1) Whenever I review a book by a Columbia economics professor, there seems to be a subsequent exchange of words;

2) Sachs hasn't taken too kindly to other reviews of this book.]

posted by Dan at 04:05 PM | Comments (11) | Trackbacks (1)

Thursday, April 21, 2005

Alex Tabarrok on political bias in the academy

Last night the Georgetown IR group took me out to a fabulous dinner, and naturally the conversation turned to whether there was a bias in academia against political conservatives.

I was all prepared to expound on this in a post, but fortunately for me, Tyler Alex has a Marginal Revolution post in response to this article by Rothman, Lichter, and Nevitte suggesting statistical evidence of discrimination. Tyler's Alex's basic point: conservatives who cry bias here also need to acknowledge bias because of race or gender in the academy, since the types of cited evidence are awfully similar.

Bravo to Tyler Alex for intellectual consistency. Go check his post out. [So you agree completely?--ed. Not completely, no -- I think there probably is some bias (against women, some ethnic minorities, and conservatives), but the effect is less significant than is commonly thought. But the proposed solutions to these bias are far, far worse than the original problem.]

posted by Dan at 08:39 AM | Comments (18) | Trackbacks (4)

Wednesday, April 20, 2005

So about this new Pope....

From an institutional perspective [And an institutional perspective only!!--ed.], there is more than a passing resemblance between the Catholic Church and the now-extinct Soviet Communist Party. So, after reading this Associated Press report by Nicole Winfield, I'm still trying to figure out whether Pope Benedict XVI will be Yuri Andropov or Konstantin Chernenko:

Pope Benedict XVI himself predicted a "short reign" in comments to cardinals just after his election, and his brother said Wednesday he was worried about the stress the job would put on the 78-year-old pontiff.

While there are no indications that Benedict currently suffers from any serious or chronic medical problems, there have been ailments in the past including a 1991 hemorrhagic stroke that raise questions about how long his pontificate will last....

Benedict himself referred to his tenure in comments to cardinals just after his election, when he explained his choice of the name Benedict XVI, the pope who served from 1914-22 and had worked to prevent World War I during his brief papacy....

German prelates have expressed concern about Ratzinger's health. One young priest from Cologne, who asked not to be identified, told AP in Rome that Benedict has trouble sleeping and has a "delicate constitution." The new pope's brother had expressed a similar concern in a television interview.

Benedict's brother, Georg Ratzinger, told The Associated Press on Wednesday from Regensburg, Germany, that he was concerned about his brother's health and the stress the office will put on him.

"I'm not very happy," Georg Ratzinger said. "He's OK, and his health is good. I just wish for him, that his health holds out and that his office isn't a worry and a nuisance to him."

Ratzinger, the oldest pope elected since Clement XII in 1730, clearly was chosen as a "transitional" pope, who would fulfill the unfinished business of John Paul's quarter-century papacy yet not be another long-term pope.

Yet in electing someone who had repeatedly asked John Paul to let him retire and been refused there was also the possibility that the world would watch another pope slowly succumb to age and ailments on a very public stage. Benedict was the oldest pontiff elected in 275 years.

So either the Pope is healthy enough to reinvigorate and cement the Catholic Church for a short time, or he's going o get sicker and sicker very quickly.

Andrew Sullivan raises an interesing point about how John Paull II changed the rules to make it easier for Ratzinger to be chosen -- which raises an interesting question: will Benedict XVI similarly change the rules or stack the Politburo College of Cardinals to ensure a successor who shares his doctrinal preferences?

As a non-Catholic, I have no dog in this fight -- but I'm curious about what will happen.

posted by Dan at 05:54 PM | Comments (15) | Trackbacks (0)

Should John Bolton be the next UN ambassador?

With more Republicans wavering yesterday over John Bolton's nomination, I think it's worth asking the question: should he be the next UN ambassador?

[Wait, weren't you defending him last week?--ed. No, I was defending the substantive point he made -- there's a difference. So is he a good choice?--ed. I actually have many thoughts on this, but insufficient time to post. Check back later in the day.]

Comment away!!

UPDATE: The commenters have actually done a decent job of framing most but not all of these issues. First, does Bolton have the right temperment? There's echoes in the testimony of the Bob Blackwill case from late last year. However, there is a difference between being an effective SOB who's a hothead and being an SOB who's a hothead and seems comfortable with punishing subordinates who disagree with him on facts (as opposed to policy disputes -- if that's the arena of conflict between Bolton and subordinates, then Bolton has a right to punish subordinates who sabotage his decisions).

This is a big problem. It's countered by two arguments in favor of Bolton. First, the President deserves broad leeway in selecting his/her subordinates, even if they're not the greatest choices in the world.

Second, and not discussed as of yet in the comments, is related to a point Matthew Yglesias identified earlier in the week:

It isn't really the case that "the Bush administration" wants to put the guy in and the Democrats are trying to stop them. Rather, the Bush administration was divided on second term national security personnel decisions, the pro-Bolton faction basically lost out (they wanted him to be Deputy Secretary), and he got UN Ambassador as a kind of booby prize. What's at stake here will be the ability of Rice, Zoellick, and Hadley to effectively wage bureacratic war against Dick Cheney and his allies. You can get a sense of this from the behavior of Richard Lugar, whose clearly the sort of Republican who wants Rice to win. He's "supporting" the Bolton nomination out of loyalty to the White House, but he's also made a lot of procedural decisions as Foreign Relations Chair that make it harder for Bolton to be confirmed. Clearly, I think, he'd like him to be beaten (as would Rice, etc.) but he wants someone else to do the beating.

I think Yglesias is probably correct but it raises a point beyond his. Even if the UN Ambassador job is a booby prize, it's a pretty nice booby prize that probably mollifies one camp within the Republican Party. If Bolton doesn't get the job, will this lead some Republicans to act in an obstructionist fashion when Bush puts forward foreign policy appointments more symptico with, say, Condi Rice?

As a moderate Republican, this is the question with which I'm wrestling.... is it worth swallowing hard and letting Bolton get the UN job in order to preserve the ascendance of the moderates in the Bush foreign policy apparatus?

I'm not sufficiently plugged into the Beltway to answer that question in a satisfactory manner.

posted by Dan at 11:49 AM | Comments (47) | Trackbacks (3)

Gone talkin'.... so go read Brad Setser

I'm on the road in DC giving a talk at Georgetown, so blogging may be limited for the next few days.

However, be sure to read this Brad Setser post that follows up on my previous post regarding tactical issue linkage with China on the exchange rate question. Brad offers some additional possibilities, some of which I had thought of and some of which I hadn't and find very intriguing.

posted by Dan at 11:40 AM | Comments (3) | Trackbacks (0)

Tuesday, April 19, 2005

The paranoid style in the New York Times Magazine

The Volokh Conspiracy en masse -- and Orin Kerr in particular -- is going to town on Jeffrey Rosen's New York Times Magazine cover story on the libertarian cabal that allegedly threatens the judiciary (you gotta love the sinister photographs that accompany the piece).

This Kerr post in particular triggered a strong sense of déjà vu:

In my view, the problem with Rosen's essay is that it tries to portray the decades-old writings of a small number of scholars and activists as an existing and influential "movement." I don't think the evidence adds up. The handful of scholars and activists that are supposed to make up this alleged movement are pretty far removed from the set of players in the Bush Administration that are actually setting policy and selecting judges these days. Maybe the Reagan Justice Department was enthralled with the writings of Richard Epstein; the Bush 43 Justice Department isn't.

As one (of many) who has been on the receiving end of a Richard Epstein rant about the ills of the Bush administration, let me just reaffirm the fact that Epstein is hardly a trusted confidant of this president.

The reason for the déjà vu was that there is a strong parallel between this meme and the hysteria that gripped many in 2003 about the Straussian cabal that was allegedly running U.S. foreign policy during the first term of the Bush administration. As I wrote in TNR online back then:

The notion that such a conspiracy exists rests on the belief that the administration's foreign policy principals--Donald Rumsfeld, Condoleezza Rice, Colin Powell, Dick Cheney, and Bush himself--have somehow been duped by the neoconservatives into acting in a manner contrary to their beliefs. But while critics have never lacked for accusations against these officials, being weak-willed is not among them. In the end, it's far more likely that Bush is exploiting the neoconservatives' ideological arsenal to advance his preferred set of policies than vice versa.

If there is any link between the Bush administration and libertarian judicial theory, I suspect it's of akin to the bolded sentence of the paragraph. And it's worth thinking about how the neocons are doing now (see Bolton, John). This administration on the whole uses ideas more often (though not always) as hooks for policies they prefer for material or political reasons rather than as a guiding star for the future. In other words, they're like every other administration that ever occupied the White House.

So why the return to conspiracy theories? I'll quote again from the master, Richard Hostadter:

Perhaps the central situation conducive to the diffusion of the paranoid tendency is a confrontation of opposed interests which are (or are felt to be) totally irreconcilable, and thus by nature not susceptible to the normal political processes of bargain and compromise. The situation becomes worse when the representatives of a particular social interest--perhaps because of the very unrealistic and unrealizable nature of its demands--are shut out of the political process. Having no access to political bargaining or the making of decisions, they find their original conception that the world of power is sinister and malicious fully confirmed. They see only the consequences of power--and this through distorting lenses--and have no chance to observe its actual machinery (emphasis added).

posted by Dan at 12:36 AM | Comments (21) | Trackbacks (1)

Monday, April 18, 2005

Why my head hurts right now

Alex Mindlin recounts an apparently real dispute about what constitutes fiction between the writers Michael Chabon and Paul Maliszewski in the New York Times. The highlights:

It was the kind of headline that sells. "Michael Chabon's Holocaust Hoax," read the cover of the April-May issue of Bookforum. Inside, the article, by Paul Maliszewski, suggested that Mr. Chabon, the Pulitzer Prize-winning novelist, had exceeded the bounds of poetic license in a lecture that he has given perhaps half a dozen times since 2003.

In the lecture, titled "Golems I Have Known, or, Why My Eldest Son's Name Is Napoleon," Mr. Chabon recounts a version of his childhood, laced with some tall tales (saying, for instance, that he has encountered several golems, the clay monsters of Jewish lore), and tells the story of a counterfeit Holocaust survivor he'd once met who turns out to be an ex-Nazi in hiding.

Mr. Maliszewski pointed out that the Nazi character was entirely fictional, and contended that Mr. Chabon had misled his listeners into believing it was real. He suggested that Mr. Chabon had "fashioned a Jewish identity for himself that incorporates - through an utter fiction - the Holocaust."

The lecture's organizers have said the lecture was clearly advertised as a series of yarns. In a letter that will be printed in the next issue of Bookforum, Matthew Brogan, program director for the Jewish literary nonprofit organization Nextbook, which sponsored some of the performances, wrote that Mr. Chabon had "signaled to the audience at every turn that the narrator is not to be completely trusted." Mr. Maliszewski, he added, had "deliberately misread these signs in the hope of stirring up a scandal."

In the Bookforum article, Mr. Maliszewski admits that, as a reporter at a Syracuse business newspaper, he besieged his own paper with parodic letters to the editor. Later, he became the Web editor of McSweeney's Quarterly, a job that his editor said ended when Mr. Maliszewski sent McSweeney's subscribers an anonymous e-mail newsletter full of invented gossip about other writers.

So if I understand this correctly: A writer that has frequently fudged facts for fun has fingered a fellow fabulist for fictionalizing facts for fortune, even though that fabulist foretold his fictions before his oration. [Now my head hurts--ed. If I'm going down, I'm taking people with me!]

Seriously, it seems like Maliszewski is off his rocker.

posted by Dan at 03:55 PM | Comments (6) | Trackbacks (0)

Charles Krauthammer misses the best part

On Friday Krauthammer penned a column about how the Washington Nationals have rekindled his passion for baseball. What happened to it before? Naturally, he was a Red Sox fan:

Then came the 1986 World Series and the Great Buckner Collapse. At that point, I figured I'd suffered enough. I got a divorce. Amicable, but still a divorce. With a prodigious act of will, I resolved to follow the Sox -- but at an enforced distance. I refused to live or die with them. Which is how I got through Grady's Blunder -- leaving Pedro in too long -- in Game 7 of the 2003 Red Sox-Yankees playoff.

It was a hard fall for Sox fans, but I came through it beautifully -- feeling delighted, indeed somewhat superior, at my partial emancipation from the irrationality of fandom (far more troubling than the pain). Thus a free man, almost purged of all allegiance, I watched with near-indifference as the Montreal Expos moved to Washington. Little did I know.

I know this is a lighter column for Krauthammer, but it's almost criminally negligent for him to go from discussing his passion for the Sox to his interest in the Nats without mentioning how he felt being on the outside looking in at the Red Sox successful 2004 season.

posted by Dan at 10:43 AM | Comments (1) | Trackbacks (0)

Sunday, April 17, 2005

The difference between economists and political scientists

I response to my post on the Bush administration and the dollar on Friday (see the follow-on post here), Matthew Yglesias makes the following observation:

It's hard to detect much seriousness there. Rather than addressing, say, the massive budget deficits that are leading to the unusual currency situation, or trying to do something that would reduce American oil consumption, they're getting serious by asking the government of China to float their currency. They've got no leverage they can use to make China do this. They're just asking.

Brad DeLong follows up, observing:

This is more evidence that Matthew Yglesias's transformation into an economist is advancing rapidly. To a political scientist, you "get serious" about an issue like the currency by sending an ambassador to have an unpleasant conversation with a foreign government. Call this "get serious(ps)." To an economist, you "get serious" about an issue like the currency by changing your government's policies in such a way as to change the balance of returns and risks facing those buying and selling in foreign exchange markets. Call this "get serious(e)." Matthew is complaining that Dan is talking like a political scientist.

Sigh..... let's clear up a few misconceptions.

Brad's assertion is that political scientists think that "getting serious" about something is dispatching an ambassador -- as opposed to the economists who want to fix the problem. Actually, to a political scientist -- more specifically, one who studies international relations -- you "get serious" about an issue like the currency when you engage in tactical issue linkage to change other government's policies in such a way as to change the balance of returns and risks facing those buying and selling in foreign exchange markets. If one can arrange for other countries to bear a greater portion of the costs of adjustment from the current set of macroeconomic imbalances, then political scientists will predict that governments will prefer this policy option ten times out of ten -- even if the long-term economic picture would be improved by listening to economists. [Yes, but doesn't this still leave the U.S. with some long-term macroeconomic problems?--ed. I believe it was an economist who pointed out what happens in the long run.]

This leads to Matthew's appropriate question about leverage -- what does the U.S. have to offer? What is the tactical issue linkage that could be put in play here?

Looking at the state of play, here's whats on the bargaining table:

1) Threaten protectionism: In the orginial FT article and this Bloomberg report, U.S. officials made it clear that one reason they want the Chinese to alter their exchange rate policy is because if they don't, domestic U.S. pressure might generate dangerous policy outputs like a 27.5 per cent tariff on all Chinese imports if China does not revalue.

For the Bush team, this is a classic gambit of turning domestic weakness into international bargaining strength: "Do what I say or this madman I can't control will blow us all up!" However, it's also a very high-risk move because the Chinese might not believe the Bushies, or -- far worse -- the Bush team might actually not be able to thwart trade morons like Senator Schumer.

2) Offer some carrots: The administration could also offer some incentives to make the Chinese change their policy. One obvious one is inviting China to be a full partner in the G7 process. THe G-7 is a pretty exclusive club, and for the Chinese government this would be a nice dollop of prestige. Such a move would be viewed positively as a signal of China's emerging status as both a great power and as a locomotive for the global economy. Giving China a greater sense of “ownership” of the G7 process could also nudge that country toward a more cooperative attitude.

A more interesting and tangible linkage would be to link China’s status as a “non-market economy” in U.S. antidumping laws to greater flexibility on exchange rates. According to Daniel Ikenson from the Cato Institue, from 2001 to 2004, China has been the target of 32 antidumping investigations by the Commerce Department’s Import Administration, nearly three times as many as the next most targeted country. Under Article VI of GATT, non-market countries can be treated differently to determine whether firms from those countries are selling goods to the United States at below market value. As a result, Chinese sectors found to be dumping have faced an average tariff increase of 112.85 percent—three and a half times the average penalty for producers in market economies. A partial switch in China’s situation—market economy status for appropriate sectors, for example—could be proffered in exchange for a revaluation.

3) Make the IMF play bad cop. This is Morris Goldstein's preferred approach. The IMF’s Articles of Agreement (Article IV, Section 1, paragraph iii) specifically warn member countries against, “manipulating exchange rates or the international monetary system in order to prevent effective balance of payments adjustment or to gain an unfair competitive advantage over other members.” Goldstein and others argue that China (and other countries) have violated both the letter and the spirit of that agreement, in that they are preventing market forces from readjusting the dollar’s trade-weighted value. China is intervening in currency markets to keep their currencies at fixed exchange rates that are no longer in alignment with real exchange rates. The persistent and one-sided nature of these interventions render this activity distinct from the standard currency market interventions that are associated with a fixed exchange rate regime. The IMF managing director should call for ad hoc consultations with both countries on this issue. Such a maneuver is extremely rare but not unprecedented.

However, the problem with this approach is the lack of leverage. China probably doesn't want to needlessly piss off the IMF. But they don't need the Fund either, and the IMF has had little success at getting countries who don't need their money to do what they say.

Finally, the reason I said the Bush administration was "getting serious" about the trade deficit after reading the FT article was twofold: a) the administration shifted from talking about the Chinese revaluing their currency to China setting up a floating rate system. That was a shift in their position; and b) Treasury officials spoke about this to the FT in the first place -- to date Treasury officials had been sticking very close to official statements on this issue. My unspoken and unstated assumption in the previous post was that these statements to the FT as a signal that the U.S. had their ducks lined up with the other G-7 countries, and was going to start deploying tactical issue linkage. However, I'm afraid that in the wake of what actually happened, Joseph Britt is correct to point out that, "'getting serious' is not normally so easy to confuse with 'flailing ineffectually.'" So I've gone back and amended the title of the original post

posted by Dan at 11:18 PM | Comments (27) | Trackbacks (1)

So did the Bush administration get serious about the dollar?

Well, the meeting of the G-7 finance ministers happened. Did the U.S. and the G-7 ratchet up the pressure on China, as was previously suggested?

This appears to depend on who you ask. In the Washington Post, Paul Blustein says "no":

In its communique, the G-7 pledged "vigorous action" to deal with "global imbalances" -- a reference to the massive U.S. trade deficit and corresponding trade surpluses of other nations, especially the export-driven economies of Asia. But the statement mostly reiterated past calls for countries to take measures that should help shrink the trade gap, including a reduction of the U.S. budget deficit and "structural reforms" in Europe and Japan to help speed growth.

The G-7 conspicuously refrained from commenting directly on one politically charged issue related to the trade deficit -- China's decade-old practice of keeping its currency, the yuan, pegged to the U.S. dollar at a rate of about 8.3 yuan per dollar. That policy has been widely attacked in recent months, especially by members of Congress and U.S. manufacturers, as an artificially low rate that gives Chinese goods an unfair edge in world markets.

Bush administration officials had raised expectations that the G-7 would turn up the heat on China, because they had ratcheted up pressure themselves in recent days by urging that the yuan be allowed to rise now. Previously, they had refrained from putting the Chinese on the spot about timing.

But the G-7 communique included only the language that has been contained in every such statement for the past year. "More flexibility in exchange rates is desirable for major countries or economic areas that lack such flexibility," the statement said.

Andrew Balls and Scheherazade Daneshkhu say "yes" in the Financial Times:

The Group of Seven leading industrialised countries this weekend put China on notice that it must shift to a more flexible currency regime, with finance ministers demanding it take action immediately.

The G7's communique repeated its call for "more flexibility in exchange rates" where it was lacking, to help promote more balanced global growth, and added a demand that "vigorous action is needed to address global imbalances".

Officials said there was no discussion of singling out China because in the statement the language was already clearly aimed at Beijing - and because of the difficulty of getting Japan to agree a formal declaration.

But ministers from all the countries apart from Japan backed a US demand that China should act immediately. (emphasis added)

In this case, both the FT and WaPo are correct. It's clear that the latest G-7 statement doesn't differ much from previous ones, and I have no doubt Japan acted as the brake on any change in the language. However, U.S. Treasury Secretary John Snow also delivered a statement after the communique that was reasonably clear in its intent:

I want to comment specifically on China in this context. China's strong economic growth has made a tremendous contribution to the global economy. China has taken numerous steps over the last few years, including preparing for greater flexibility in their exchange rate, introducing foreign exchange market financial products and strengthening banks and bank supervision. With this groundwork in place, China is ready now to adopt a more flexible exchange rate.

Of course, the U.S. can insist that China is ready all it wants -- whether Beijing will hop to is another question. Until and unless Japan changes its tune, it would appear that China doesn't face a huge incentive to change the status quo.

On the other hand, this Bloomberg report by Tim Kelly suggests that Japan recognizes the political lay of the land:

The U.S. government is under pressure at home to get China to fulfill a pledge to loosen its currency's decade-long peg to the dollar, a Japanese Ministry of Finance official said.

The U.S. administration is under more pressure than governments in Europe or Japan over the yuan, according to the official, who spoke on condition he wouldn't be identified. The official was speaking at a briefing in Washington after a meeting of finance ministers from the Group of Seven.


posted by Dan at 09:28 PM | Comments (8) | Trackbacks (1)