Friday, July 29, 2005
Quote of the day
Overheard at a Cato Institute talk I attended:
ANOTHER UPDATE: Virginia Postrel echoes this theme:
Thursday, July 28, 2005
Hey, Karen Hughes!!!! Over here!!!!
I see you are slowly wending your way through the confirmation process for the post of Undersecretary of State for Public Diplomacy and Public Affairs. Congrats on that unanimous vote.
Read the whole thing. And then roll up your sleeves.
And then -- only if you have the time, mind you -- go read Anne Applebaum too. .
So CAFTA passes...
The Bush administration is getting really, really good at using William Riker's "minimum winning coalition" theory of passing trade bills. Here's the Washington Post story by Paul Blustein and Mike Allen:
As that bolded portion suggests, whether using Riker's theory is good for public policy is another question entirely.
As I said before, I supprted CAFTA's passage, and I'm glad to see President Bush used some of those reasons to get it through. But I confess I can't muster a great deal of enthusiasm about this passage, except in so far as it preserves the possibility of achieving the Doha round.
Oh, and since the Bush administration won't do it, let me take the opportunity to thank the fifteen Democrats who voted for the bill -- without whom, I suspect, CAFTA would have gone down. You're a shrinking breed.
One interesting question for the future will be how the defections from the AFL-CIO will affect the lobbying power of unions on trade-related issues. I suspect that their trade policy shop is going to get seriously dented by this change. [But Nathan Newman says that competition among unions for organizing will be good for the labor movement!--ed. Check out Robert Fitch's take in Slate and see if Newman's optimism is still well-placed.]
UPDATE: Well, it looks like the Bushies aren't the only ones playing hardball:
The Economist is cute but wrong
Tim Harford is guest-blogging over at Marginal Revolution, and he links to a partially tongue-in-cheek Economist story (subscription required) that opens with the following:
Harford goes on to observe, "frequent flyer miles are now the world's dominant currency, with outstanding balances at $700bn."
I'm embarrassed to say I haven't gotten around to having an online subscription, but I think the Economist's claim of frequent-flyer miles collectively functioning as a single currency is wrong. Why? Because collective frequent flyer miles are denominated with different units of account (some airlines use segments rather than miles). They also don't work terribly well as mediums of exchange -- e.g., exchanging United miles with American miles. UPDATE: Well, exchange is possible but incredibly costly, according to this MSN Money report:
The problem is that this makes the HHonors points the currency, not the frequent flyer miles themselves.
Individually, I can think of each frequent-flyer program as creating money, but together they don't form a single currency, but rather another six or seven.
It's been a while since I thought of how to define a currency, so I'd appreciate a correction if I'm wrong on this. I never feel completely comfortable contradicting the Economist.
UPDATE: Several commenters have suggested that I didn't detect the irony in the Economist piece -- au contraire, I was aware of the lighthearted one. If the logic underlying the humor doesn't hold up, however, then I'm not sure how funny it is.
Wednesday, July 27, 2005
How offshore outsourcing has devastated the high tech sector -- part deux
Six months ago I posted on how the IT sector seemed to be thriving as of late despite the rise of offshore outsourcing.
Here's a link to the Foote Partners press release that's discussed above.
It's also worth noting that beyond offshore outsourcing, there was an excellent reason for the drop in wages that did take place among IT services between 2000-2003: reduced demand. According to the WTO's report on offshore outsourcing, the annual percentage change in the U.S. IT market in the early part of this decade was as follows:
So it's a funny thing -- as demand has picked up in the US, the number of IT jobs and the level of IT wages has increased.
Oh, and for those IT readers of danieldrezner.com who complain about no jobs, I'll close with some anecdotal want-ads from the ComputerWorld story:
Tuesday, July 26, 2005
Is grade inflation real or imagined?
Over at Crooked Timber, Harry Brighouse asks whether grades are improving because of inflation -- or because of other reasons:
A lot of Harry's alternative explanatuons would suggest -- perish the thought -- there have been productivity gains in education.
Much as I'd like this to be true, I'm probably more skeptical than Brighouse of this possibility -- click here for one reason why the distribution of grades suggests other factors at work besides improving student and instructor quality.
Pervez Musharraf announces victory!
A lot of Iraq critics have argued that the best thing to do in the country now is "declare victory and go home."
Pakistani President Pervez Musharraf seems to be pursuing a variant of this strategy with regard to his Northwest Frontier. This is according to the Financial Times' Farhan Bokhari et al:
Monday, July 25, 2005
How the Chinese
Now we know that the Chinese devalued the yuan -- and we know pretty much why. But what were nuts and bolts of the decision-making process? How did it hapen?
The staff at the Wall Street Journal has a great essay on the two-year process by which the Chinese decided to revalue their yuan. The opening is killer:
UPDATE: Sorry, typo in the heading -- it should have been "revalue" and not "devalue" thanks to commenters for pointing out the error.
So I guess bilats are OK then
The Bush administration has insisted for years that the only way it will talk with the North Koreans is at multilateral talks involving Japan, South Korea, Russia, China, etc. The North Koreans, in contrast, always wanted bilateral talks with U.S. officials.
On the eve of the six-party talks starting again, it looks like the DPRK got its wish, according to the IHT'sChristopher Buckley:
Read the whole thing -- there's some interesting material on how the Chinese view Sino-DPRK relations.