Saturday, July 2, 2005

Daniel W. Drezner -- the magazine?

Hey, if ESPN can do it, why not the hardworking staff at danieldrezner.com?

If you're wondering what the heck I'm talking about, click over to James "Outside the Beltway" Joyner for some background about the FEC's slow-motion investigation of how to regulate the blogosphere. Anticipating the inevitable FEC screw-up, some bloggers, like Bill Hobbs, have decided to simultaneously a) retiring from blogging, and b) declare themselves to be "online daily interactive magazine(s) of news and commentary."

Over at Captain's Quarters, Ed Morrissey is valiantly resisting this trend, stating:

I will not allow the FEC to chase me from my rights as an independent voice in politics to write what I please and to post what I want based on a silly bit of nomenclature. I understand what... members of the, er, "online magazine community" mean to say with these statements, but I won't surrender to the bureaucrats an inch when it comes to my right to speak my mind. I don't plan on playing silly name games with those who plan on regulating speech for our own good. All that does is play into their strategy of twisting words and meanings until nothing means what it says any more.

I won't do it. I won't play along. I won't even do it as a protest, as these bloggers obviously mean it to be.

Ed makes an excellent point. However, Duncan "Atrios" Black makes a persuasive argument about joining the online magazine community:

Since I ceased being a blogger an hour or so ago and became the publisher/editor/chief political correspondent/cat photographer/scifi critic/media critic/missing persons expert/blogger ethics expert/janitor for an exciting new online magazine, my life has truly been transformed. I discovered, in my coupon clipping box, a deed for a 6000 sq. ft. Nantucket cabin. I've been to 17 parties hosted by the charming and delightful Sally Quinn. I've played Bridge with Nedra Pickler, and twister with Candy Crowley and Jeff Greenfield. I've convened 38 panels on blogger ethics, something I never managed to do when I was actually a blogger. My debut appearance on Meet the Press will happen this Sunday.

Make it twister with Salma Hayek, and this would be the easiest call in blog history.

Decisions, decisions.... I will humbly leave it to my readers to decide for me.

And, no, there would be no swimsuit issue.

posted by Dan at 05:33 PM | Comments (1) | Trackbacks (0)



Friday, July 1, 2005

The Supreme Court's long, hot summer

Gonna be a long summer.

Orin Kerr has some interesting (but mildly contradictory) musings on O'Connor's resignation. Of particular interest:

Supreme Court advocacy in the last decade has focused a great deal on trying to understand the mind of SOC, as she was the swing vote in many big cases. That learning has just become obsolete....

O'Connor's retirement may shift the Court a lot less than people think. In the big ideological cases of the last Term, Justice Kennedy was the swing vote as often as (or maybe even more often than) Justice O'Connor. Let's assume for now that O'Connor is replaced by a consistently more conservative Justice; even if that's true, the left-of-center Justices presumably still have 4 very reliable votes and a good shot at picking up a 5th vote with Kennedy. Plus, new Justices are hard to predict, and it's often hard to tell whether a new Justice will vote consistently one way or another.

Brian Fletcher at SCOTUSblog has a roundup of initial reactions. They've also set up a Supreme Court Nominations blog that will undoubtedly be worth checking out.

posted by Dan at 12:13 PM | Comments (7) | Trackbacks (3)




Open Ahmadinejad thread

Comment here on the prospect that Iran's president-elect might have been one of the students involved in the 1979 embassy takeover.

More generally, It's still unclear to me what the precise relationship is between Ahmadinejad and the clerics that actually run Iran. Yesterday's New York Times op-ed by Abbas Milani said the clerics "masterminded Mr. Ahmadinejad's victory." However the NYT editorial of the same day argues that Ahmadinejad, "offered a populist economic platform that implicitly challenged the cronyism and corruption of more than a quarter-century of clerical rule."

I don't know enough about Iran's internal politics to comment -- but I'm sure that will not deter you from commenting.

[Isn't this just a case of life being complex? Maybe Ahmadinejad agrees with the clerics on some issues but not others?--ed. Undoubtedly true -- but the question that's still unanswered is whether he's willing to address certain sacred cows within the clerical establishment even as he's agreeing with them on other issues.]

posted by Dan at 10:20 AM | Comments (34) | Trackbacks (2)




How to reverse New England's demographic decline

Stan Grossfeld reports in the Boston Globe about the deeper social impact of the Boston Red Sox winning a world championship last year:

When Jason Varitek leaped into Keith Foulke's arms Oct. 27, 2004, they weren't the only ones embracing on that glorious night across Red Sox Nation.

Back in Boston, Dr. Robyn Riseberg and her husband, Doug, had a couple of beers, decided the stars were aligned, and celebrated the World Series championship in their own way. ''I will not refute that," said Riseberg, blushing slightly.

Now, there's living proof.

Emma Smith Riseberg, 5 pounds 5 ounces, was born June 18 at Beth Israel Deaconess Medical Center, six weeks early and with a head of hair that would make Johnny Damon envious. She is the first known baby conceived after the Red Sox won the world championship. Baby Emma already has a full Red Sox wardrobe and tickets in Section 16 from her season ticket-holding grandparents. Dr. Riseberg, a lifelong Sox fan, was on bed rest for eight weeks. ''We have Red Sox in our blood," she said. ''She gave me a run for my money, just like the Sox."

There are already signs of a ''Red Sox phenomenon," according to Isis Maternity, the largest provider of childbirth education and parent services in New England. The due dates start roughly in mid-July, nine months after the Evil Empire was destroyed in four straight games, and continue through August.

''Last week we sold more memberships than we had any other week," said Jo Myers McChesney, cofounder of Isis Maternity. ''There could definitely be a little bit of a Red Sox phenomenon going on. People being fired up after the playoffs and the World Series. We have strong class enrollment for couples delivering in late July and August, and they may very well end up being higher than other months."

Red Sox newborn baby clothes are flying off the shelves faster than Dave Roberts dashing for second base.

''We have definitely sold record numbers of Red Sox paraphernalia," said McChesney. ''Onesies for babies, teeny tiny T-shirts for newborns with Red Sox logos. We have definitely seen and expect to see an increase in kids named Manny."

Click here for the Globe's accompanying photo essay.

posted by Dan at 09:29 AM | Comments (5) | Trackbacks (0)



Thursday, June 30, 2005

Some cautionary notes on aid

Longtime readers of danieldrezner.com -- all seven of you -- are aware of my studied ambivalence about the idea that boosting foreign aid and debt relief to Africa will improve economic conditions in that area.

With the Live8 concert approaching, and the One campaign being hyped by celebrities (including a certain former poli sci student from south of the border), it seems worth pointing out that there's a big difference between wanting to help alleviate poverty and pandemics in Africa and actually doing it.

It's with that frame of mind that I came across this Financial Times story by Andrew Balls:

The International Monetary Fund has warned that governments, donors, campaigners and pop stars need to be far more modest in their claims that increased aid will solve Africa's problems.

Days before the Live-8 concerts around the world, and next week's Group of Eight countries summit in Scotland, the IMF has released two extensive research papers that suggest aid flows to poor countries have not led to higher growth rates, the main driver of poverty reduction.

“We need to be careful given the chequered history of aid, that we do not place more hopes on aid as an instrument of development than it is capable of delivering,” the fund said.

The research, which took into account duration, type of donor and governance record of recipient, found aid did not boost growth.

This conflicts with the findings of an influential World Bank study five years ago that found aid boosted growth in countries with good policy environments.

“The basic message is that it is good that people are talking about increasing aid flows but that we have to find ways to make them more effective. “It is not the case that all that matters is good governance,” said Raghuram Rajan, the fund’s chief economist and co-author of the reports. “We know far less about what makes aid work than the public or governments would like. By acting like we know all the answers raises false expectations.”

Read the whole thing.

Oh, and for conservatives who stress the productive role that remittances can play in fostering economic growth, be sure to click onto this IMF staff paper by Ralph Chami, Connel Fullenkamp, and Samir Jahjah. The abstract:

There is a general presumption in the literature and among policymakers that immigrant remittances play the same role in economic development as foreign direct investment and other capital flows, but this is an open question. We develop a model of remittances based on the economics of the family that implies that remittances are not profit-driven, but are compensatory transfers, and should have a negative correlation with GDP growth. This is in contrast to the positive correlation of profit-driven capital flows with GDP growth. We test this implication of our model using a new panel data set on remittances and find a robust negative correlation between remittances and GDP growth. This indicates that remittances may not be intended to serve as a source of capital for economic development.

[So you're saying the situation is hopeless--ed.] Nope. The FT story goes on to observe:

Separately, the World Bank highlighted improving recent economic performance in Africa. The bank's African Development Indicators showed that since 1995 growth in sub-Saharan Africa has averaged 3.3 per cent per year, compared with 1.7 per cent in the previous decade.

John Page, World Bank chief Africa economist, said: “There is a happy coincidence of the high level of political attention on Africa and more evidence in the data to support hopes of a turning point in Africa now than there has been in the past 20 years.”

Mr Page pointed to greater differentiation in the data. While a number of African countries continue to struggle, 15 countries have grown on average by more than 5 per cent a year over the past decade, including Botswana, Burkina Faso, Ghana, Uganda and Tanzania.

The spread of democracy, the willingness of African governments to take responsibility for promoting growth and development, and reduced impediments to private-sector led growth, and some evidence of better natural resource management has supported growth, the bank said.

“It’s a much more varied picture, it’s not all doom and gloom any longer. Where there has been robust growth there has been poverty reduction and improvements in social indicators,” Mr Page said. “The turnaround story is the most important thing that emerges from the data.”

Click here for the World Bank's press release on its latest Africa report.

posted by Dan at 11:02 AM | Comments (21) | Trackbacks (4)




Vladimir likes the bling-bling

Some stories are so odd that all you can do is post them without comment:

Russian President Vladimir Putin walked off with New England Patriots owner Robert Kraft's diamond-encrusted 2005 Super Bowl ring at a recent meeting with U.S. business executives.

But not to worry: Kraft says the ring was a gift to Putin, presented out of ''respect and admiration.''....

''I showed the president my most recent Super Bowl ring,'' Kraft said in a statement. The Russian president ''was clearly taken with its uniqueness.''

''At that point, I decided to give him the ring as a symbol of the respect and admiration that I have for the Russian people and the leadership of President Putin.''

Putin met with the businessmen Saturday near St. Petersburg, Russia. Near the end of the meeting, Kraft took off the ring, and handed it to Putin. Putin tried it on, put it in his pocket and left, according to Russian news reports.

It's an amazing coincidence.... it's my understanding is this is exactly how it worked with Gazprom as well.

posted by Dan at 10:17 AM | Comments (2) | Trackbacks (0)



Tuesday, June 28, 2005

Open Bush speech thread

I wasn't able to watch Bush's speech tonight, but that doesn't mean you can't comment on it here. Fire away!

[What if they missed it?--ed. Then go check out David Adesnik's liveblogging.]

posted by Dan at 11:07 PM | Comments (52) | Trackbacks (0)




Signs that the end is not upon us

As the New York Times frets about China's rise to economic pre-eminence, Americans are understandably concerned about the size of the trade deficit and the possibility of a housing bubble. I've been moderately concerned about both -- but two small stories muddy up my worries a bit.

The first is the fact that the U.S. is relying less on official purchases to finance its current account deficit:

The US became less dependent on inflows for foreign central banks to support the dollar in the first three months of the year, according to figures released on Friday.

The current account deficit hit a record $195.1bn in the first three months of the year - equivalent to 6.4 per cent of GDP. Some economists now expect the deficit for the year to reach $800bn - requiring huge inflows of foreign funds into the US in order to prevent a fall in the dollar.

Recently the US has relied heavily on purchases of US assets by Asian central banks in order to fund its deficit - in particular from China, where the authorities buy dollars in order to prevent a rise the renminbi from hurting exports.

Over the latest quarter, however, private investors took more of the strain. Net official flows were just $24.7bn in the quarter - down from $94.4bn in the final three months of last year.

Meanwhile, net private inflows rose from $73bn in the forth quarter to $131bn in the first quarter of 2005.

"Every trading day the US needs to attract about $3bn of net foreign inflows - which makes a huge demand on the world's savers," says Nigel Gault, director of US research at Global Insight, a consultancy. "But so far there are few signs that investors world wide are tiring of US assets. There may be worries about the US economy but most other places look a lot worse." (emphasis added)

This is always the thing to remember about the U.S. economy -- as parlous as conditions may look right now, one must always compare the United States to other possible locations for investors. Compared to the regulatory, demographic, and political uncertainties present in Europe, Japan, and yes, even China, the U.S. looks pretty good.

As for the housing bubble, Daniel Gross points out in Slate that housing has been the primary job engine since the start of the 2001 recession -- but that could be changing:

The apparent reliance on housing to spur job growth could mean we're cruising for a fall if the red-hot sector shows signs of cooling. But it's also possible that housing was the bridge that helped us get over the post-bust job chasm. Between June 2004, when the Federal Reserve began raising rates, and April 2005, [Northern Trust economist Asha] Bangalore notes, "housing and related industries have accounted for 13.0% of private sector payrolls." [this is in contrast to the time period from November 2001 to the present, when 43.0% of payroll jobs were created in the housing sector--DD.] In other words, as talk of a housing bubble increased, other nonhousing-related sectors were retaking the lead in job creation. To paraphrase Thomas Jefferson, it could be that a little bubble now and then may be exactly what this economy needed.

None of this is to say that the U.S. does not suffer from some serious economic imbalances that will require a combination of policies to solve. However, the situation may not be as hopeless as many prognosticators are saying.

At least, this is what U.S. consumers and job-seekers seem to believe.

Developing....

posted by Dan at 03:38 PM | Comments (15) | Trackbacks (0)



Monday, June 27, 2005

Interpreting Iran's election

The Economist asks the questions on many people's minds following Iran's presidential elections:

WAS it a backlash by Iran’s devoutly Muslim poor against a corrupt elite? Or was it a massive fraud perpetrated on the people by the hardline clerics? Perhaps it was a bit of both. Whatever the case, the margin of victory for Mahmoud Ahmadinejad in the second round of Iran’s presidential election, on Friday June 24th, was striking. Mr Ahmadinejad, the mayor of the capital, Tehran, and a hardline religious conservative, garnered around 62% of the vote, despite having gone almost unnoticed in the field of seven candidates who had contested the first round of voting, a week earlier.

However, Gordon Robison has an op-ed in the Beirut Daily Star suggesting that the western media fell down on the job in covering the Iranian elections:

So Ali Akbar Hashemi Rafsanjani is not Iran's new president. That result must come as a particular surprise to anyone who tried to follow the campaign by light of the Western media.

As recently as last Thursday - the day before the run-off vote between Rafsanjani and his rival, Tehran mayor Mahmood Ahmadinejad - reputable polls gave the latter a clear lead. Yet headlines in the International Herald Tribune continued to describe Rafsanjani as the "front-runner." In the run-up to the first round of voting on June 17, his campaign was the focus of most election coverage in the Western media. CNN's interview with Rafsanjani during the campaign treated him as a president-in-waiting.

So what happened, exactly?....

The answer may be much simpler, if no less embarrassing: Granted how little most of us outsiders know about the politics of the Islamic Republic, it was probably just easiest to focus on Rafsanjani because he, alone among the candidates, was a familiar figure to Western journalists....

Prior to the election [reformer Mustafa] Moin was often seen in the West as Rafsanjani's main competition. The assumption in that narrative was that Rafsanjani represented the conservative old guard. Moin, a former cabinet minister who was initially barred from standing by Iran's Council of Guardians (the body that approves potential candidates for Parliament and the presidency), was seen as the obvious successor to Khatami. That might have been true, but it ignored the fact that there is more than one type of "reform." Reform can mean loosening restrictions on how people dress and behave in public and private. But it can also mean tackling corruption and cronyism - which was the vein of popular anger into which Ahmadinejad tapped.

Well, to be fair, some of the western media had already figured some of this out:

In truth, so much of this [analysis about Iran's election] is rubbish and disinformation. The country's supreme leader, the Ayatollah Khamenei, remains firmly in charge of the country -- exactly as he would have been had Mr. Rafsanjani won the other day. The pop analysis aside, the election will have no effect on Iran's weapons of mass destruction or its role in supporting terrorism.


posted by Dan at 11:41 PM | Comments (19) | Trackbacks (1)




Irwin Stezler's short-term memory

When Americans get skittish about China's growing economic power, free market advocates -- myself included -- tend to remind everyone about the excessive skittishness Americans had about Japan in the late eighties.

In the Weekly Standard, Irwin Stezler offers some reasons for why China now is different from Japan back then:

Once again, politicians and policy wonks are up in arms about a foreign takeover of an American company, in this case the attempted acquisition of Unocal by China's National Offshore Oil Corporation (CNOOC). To those who remember the hysteria that greeted Japan's purchase of Rockefeller Center, the jewel in the crown of New York real estate, in the late 1980s, "It's déja vu all over again," to borrow from the Yankee sage, Yogi Berra.

That might just be dangerously wrong. The current Chinese takeover movement is different from the earlier buying spree by Japanese companies. Japan was not a rival for influence in Asia, or in the world; China is. Japan was not a major competitor for scarce resources such as oil; China is. Japanese companies were privately owned; China's acquirers are state-run entities. Japan is a democratic country, and by and large an American ally; China most definitely is not. Japan did not engage in the wholesale theft of intellectual property, China does. Japan did not buy strategic assets: ownership of New York real estate has no implication for national security; ownership of oil resources does.

Now, I'm not necessarily disagreeing with Stezler's big point about the differences between China now and Japan then, but I remember enough of the late eighties hysteria to point out the various ways in which Japanophobes would have rebutted Stezler's alleged differences between Japan and China:

1) Japan was not a rival for influence in Asia. Japan's FDI flows to the rest of East Asia in the late eighties were pretty massive. Their official development assistance was also generous but tied to purchases of Japanese products. American's feared their growing political influence then;

2) Japanese companies were privately owned. Who exactly were the owners? The keiretsu system of interlocking cross-corporate ownership made it next to impossible to identify the real owners of Japanese capital. This was one reason why the Japan Inc. metaphor was used so widely fifteen years ago. Another reason was the belief that Japan's Ministry of International Trade and Industry (MITI) was engaging in extaordinary forms of industrial policy administratively guiding Japanese firms towards the government's desired ends.

3) Japan is a democratic country, and by and large an American ally. In 1990, Japan had been ruled by the Liberal Democratic Party for all but one year of the post-war era. As for being an American ally, in The Japan That Can Say No: Why Japan Will Be First Among Equals, Shintaro Ishihara had great fun toying with the idea of Japan selling its semiconductors to the Soviet Union rather than the United States;

4) Japan did not buy strategic assets. Two words -- Fairchild Semiconductors. Fujitsu placed a bid on the semiconductor firm in late 1986; if memory serves, the Department of Defense investigated the security implications of that bid, to the point where Fujitsu backed off. Fairchild was later purchased by a French firm.

One final tidbit -- in 1990, Robert Reich conducted a poll of both elites and ordinary citizens and asked them to choose between a world where the U.S. economy grew by 25% and Japan grew by 75% over the next decade, or one where the U.S. grew by 10% and Japan by 10.3%. With the exception of economists, majorities in both groups preferred the second choice to the first one.

My point in this little exercise is not to exonerate China's less desirable qualities -- it's to point out that when another country is perceived as an economic threat to American hegemony, it is easy to find ways of painting that country in a sinister light.

UPDATE: The Economist has two articles worth reading on China's new interest in foreign direct investment. Neither the article about CNOOC in particular or the article about Chinese outward FDI is terribly sanguine about what's going on.

ANOTHER UPDATE: The similaities/differences between Japan and China were also the topic of Paul Krugman's column today. Krugman also touches on a theme mentioned by the other articles linked here:

The Japanese, back in the day, tended to go for prestige investments - Rockefeller Center, movie studios - that transferred lots of money to the American sellers, but never generated much return for the buyers. The result was, in effect, a subsidy to the United States.

The Chinese seem shrewder than that. Although Maytag is a piece of American business history, it isn't a prestige buy for Haier, the Chinese appliance manufacturer. Instead, it's a reasonable way to acquire a brand name and a distribution network to serve Haier's growing manufacturing capability.

Maybe my memory is off, but the Japanese also set up a fair amount of greenfield FDI in the auto sector as well.

Also, what difference wlould it make how the Chinese use their investments? None, unless you care about relative gains a fair amount -- which is what Krugman seems to be doing, according to both Tyler Cowen and Don Boudreaux.

Both also link to Sebastian Mallaby's sensible observation in the Washington Post:

[T]he protectionists say that if the Unocal bid is allowed to go forward, the Chinese will use the power of corporate ownership to manipulate oil prices; worse, China could even blackmail America by withholding energy supply. This echoes old fears of Japanese semiconductor makers, which were said to be plotting sinister dominance of the memory-chip business in the 1980s. As the protectionists explained it, the Japanese plan was to destroy U.S. rivals by undercutting their prices, then later to ramp up their own prices and hold U.S. industry (including the defense industry) for ransom.

But the protectionist fears are based on a misunderstanding of markets, which are harder to corner or manipulate than people seem to understand. Japan's assault on the memory-chip market never did produce the feared lock on this product. Instead, U.S. chipmakers prospered by moving upscale from plain memory chips to fancy microprocessors, and the supposedly oligopolistic Japanese memory-chip firms were soon challenged by South Korean rivals....

[I]t's hard to paint a plausible scenario in which Chinese control of Unocal would hurt us -- despite loud exclamations to the contrary from Congress. For one thing, Unocal's oil output accounts for a tiny fraction of U.S. consumption. The firm's chief asset is undeveloped natural gas in Indonesia that's going to take at least five years to develop -- by which time the current tightness in the energy market will probably have dissipated because of the development of new oil fields.

But there's a more fundamental objection to the protectionist anxiety. The protectionists worry that China will ship all of Unocal's output home to its own industries, thus hogging scarce oil supplies and taking them "offline." Even if this were possible, it wouldn't matter: Unocal's oil and gas would be meeting Chinese demand that would otherwise have to be met by Chinese purchases on world markets. In other words, China would be reducing both the supply and the demand for energy in the open market. Prices paid by American consumers wouldn't budge.

LAST UPDATE: Alex Tabarrok goes completely medieval on Krugman.

posted by Dan at 04:08 PM | Comments (25) | Trackbacks (2)



Sunday, June 26, 2005

So how's the transatlantic relationship doing?

One of the bizarre sociological facts of attending multi-day conferences about current events is that – even as one is discussing policy topics of the day in earnest – a news vacuum is created, shielding participants to facts both new and salient to the topic of debate.

So, even as your humble blogger tirelessly debated the state of transatlantic relationship in conference rooms, poolside bars, sumptuous restaurants, and then back at more bars, the following events didn’t come up that much in conversation:

  • The US/EU co-hosting of the Iraq donor conference;

  • The sharp divergence of FDI flows between France, Germany, and Great Britain (click here for the salient OECD report)

  • Tony Blair’s peroration to the European Parliament; (link)

  • France’s additional difficulties coping with offshore outsourcing, as well as Germany's – a sharp contrast with how U.S. entrepreneurs are exploiting such opportunities (not to mention IBM).

  • The uneven persistence of America’s unpopularity in the court of global public opinion (persistent in Europe, less persistent elsewhere).
  • [So, the conference was a bust, eh?—ed.] First, no conference held at this location can be a bust. Second, I left this conference feeling much better about transatlantic relations than I have in quite some time.

    I attended this same conference three years ago. It was a rancorous affair, with both Americans and European blasting away at each other's flaws. At best, that meeting ended with both contingents agreeing to disagree on key issues of the day.

    This time around, there was a much greater sense of humility on both sides – the Americans on Iraq and the Europeans on, well, the future of the EU. From this humility, a fair amount of pragmatism appeared. Americans on both sides of the aisle emphasized the need for the United States to accentuate its soft power resources in the rest of the world. Regardless of their attitudes towards Iraq, the Europeans who attended were far more accepting of a value-oriented foreign policy than in the past -- i.e., democracy promotion. It was also the Europeans, and not Americans, who were questioning what the next step would be if engagement talks with Iran fell apart.

    Does the growing public resentment of the United States mean that this new spirit of pragmatism at the elite level will die out quickly? I'm not sure. I doubt Bush's meeting with German President Gerhard Schroeder will be warm and fuzzy, but the leaders who are on the rise in Europe -- the UK's Tony Blair, Germany's Angela Merkel -- are the ones who favor closer relations with the United States. Despite Pew's findings, it remains the case that anti-Americanism is an empty platform for governance.

    Developing....

    posted by Dan at 09:03 PM | Comments (11) | Trackbacks (0)