Friday, October 28, 2005

Open Plamegate indictments thread

So it looks like Libby gets indicted today, and Rove is not out of the woods.

Special Prosecutor will hold a press conference at 2 PM today on the matter -- according to Fitzgerald's official web site.

Be sure to check out Tom Maguire's blog, as he has pretty much owned this story since day one. But then come back and comment away here.

UPDATE: The AP reports that Libby has been inicted on obstruction of justice, perjury, and making a false statement to investigators. Kathryn Jean Lopez says there are two counts of both perjury and making a false statement.

I suspect this quote from William Kristol's Weekly Standard essay hinting that no indictments would be the way to go is going to be resurfacing in the blogosphere for the rest of the day:

[I]f anyone lied under oath the way Bill Clinton did--knowingly and purposefully in order to thwart a legitimate legal process, or if anyone engaged in an obstruction of justice, the way Bill Clinton did, then indictments would be proper.

Here are links to the actual indictment as well as the transcript of Fitzgerald's press conference, as well as the Washington Post's explanation of the charges.

LAST UPDATE: For my money -- and assuming that Fitzgerald has completed his indictments -- Jason Zengerle has the last, best word at TNR's Plank:

the whole notion that the Fitzgerald investigation was going to reveal how the Bush administration led us into Iraq now seems to have been completely wrong. Democrats wanted their own Ken Starr--a prosecutor who let his investigation metastasize and whose operation leaked like a sieve. Instead, they got Elliot Ness. As Fitzgerald himself put it at his press conference:

This indictment is not about the war. This indictment's not about the propriety of the war. And people who believe fervently in the war effort, people who oppose it, people who have mixed feelings about it should not look to this indictment for any resolution of how they feel or any vindication of how they feel.

This is simply an indictment that says, in a national security investigation about the compromise of a CIA officer's identity that may have taken place in the context of a very heated debate over the war, whether some person -- a person, Mr. Libby -- lied or not.

The indictment will not seek to prove that the war was justified or unjustified. This is stripped of that debate, and this is focused on a narrow transaction.

And I think anyone's who's concerned about the war and has feelings for or against shouldn't look to this criminal process for any answers or resolution of that.

That sounds like good advice.


posted by Dan at 11:06 AM | Comments (45) | Trackbacks (0)

Miers postmortem thread

So the punching bag that was Harriet Miers' nomination is no more.

I was all geared up to post something debunking Kevin Drum and Harry Reid's assertion that this was Bush caving in to the radical right, but my laziness pays off, as all I have to do is link to Virginia Postrel, Matt Bodie, Dan Markel, and the Hotline (link via Daily Kos).

Readers are ordered to draw their own conclusions and post them here.

posted by Dan at 10:58 AM | Comments (11) | Trackbacks (0)

Putting a good foot forward in Pakistan

David Rohde had a story in the New York Times earlier this week that nicely demonstrates how U.S. disaster relief can affect local attitudes about Americans -- even in Al Qaeda country:

Asmat Ali Janbaz's explanation for the American military helicopters flying over this isolated mountain valley last Thursday afternoon was familiar.

Mr. Janbaz, who lives in the area and who describes himself as an Islamic hard-liner, contended that the Americans were not ferrying injured earthquake victims to safety; instead, they were secretly establishing an American military base in northern Pakistan to encircle China.

"This is the mission!" he declared triumphantly. "Not to help the people of Pakistan."

Yet after Mr. Janbaz departed, something extraordinary happened. Here in a mountainous corner of northern Pakistan long thought to be a center for militant training camps and religious conservatism, three men dismissed his theory and heartily praised the United States for aiding victims of the Oct. 8 earthquake, which killed more than 53,000 Pakistanis.

"People don't believe such things; people only believe in what they are seeing," said Manzur Hussain, a 36-year-old hospital worker whose brother, sister and two sons died in the earthquake. "People who give them aid, they respect them."

While it is too early to reach firm conclusions, anecdotal interviews with earthquake survivors in this picturesque mountain district, known as Mansehra, suggest that American assistance may be improving Pakistanis' perceptions of the United States - an image that has been overwhelmingly negative here since the invasions of Afghanistan and Iraq.

Read the whole thing -- Al Qaeda is also mobilizing humanitarian relief, but it's tougher to gauge those efforts.

Link via America Abroad's Jim Lindsay, who observes:

This is only one story from one reporter. But something similar happened in Indonesia after the United States rushed to help victims of last December’s tsunami. People saw Americans willing to help them with their problems. Their attitudes toward the United States softened as a result.

All this is worth keeping in mind as policy makers and pundits tout the benefits of public diplomacy and “listening tours.” Good words are fine. Good deeds are even better.

posted by Dan at 10:05 AM | Comments (6) | Trackbacks (0)

Thursday, October 27, 2005

Anoint no economic superpower before its time

A common lament among those who like to prognosticate about America's future is that China and India are churning out more and better engineering students than the U.S., which presages their rise to superpowerdom.

For example, Geoffrey Colvin wrote the following in Fortune earlier this year:

China will produce about 3.3 million college graduates this year, India 3.1 million (all of them English-speaking), the U.S. just 1.3 million. In engineering, China’s graduates will number over 600,000, India’s 350,000, America’s only about 70,000.

Sounds ominous -- those figures were cited in a National Academy of Sciences study warning that, "In a world where advanced knowledge is widespread and low-cost labor is readily available, U.S. advantages in the marketplace and in science and technology have begun to erode." (link via Glenn Reynolds)

The thing is, those numbers don't hold up. Back in August, Carl Bialik of the Wall Street Journal's "Numbers Guy" column deconstructed Colvin's claim in Fortune and found some problems:

[T]his is one of those cases where big numbers take on a life of their own through repetition. The lofty estimates have been repeated for years, often without evidence to back them up, and it turns out they vary considerably from figures reported by official sources.

Bialik follows up in a WSJ column today (link again via Glenn Reynolds):

Ron Hira, professor of public policy at the Rochester Institute of Technology and a reviewer of a draft version of the report that didn't contain the figures, brought them to my attention when he spotted them in the press release. "The fact that the Academies has perpetuated the stats is very significant because [they are] viewed as a purveyor of truth," Dr. Hira wrote me in an email. He added, "[The stats] will be perpetuated by every science and technology lobbyist in D.C. from now until who knows when."

The statistics' repetition prompted me to dig deeper into the original source of Fortune's numbers. For my initial column, the author of the Fortune piece, Geoff Colvin, told me he was traveling and couldn't review his notes to find his sources in time for my deadline. Last week, he told me the numbers came from the Chinese government's China Statistical Yearbook 2004, which reported more than 644,000 graduates in engineering from the country's institutions of higher education in 2003.

"This includes graduates of the regular college program as well as graduates of a three-year program focused on engineering, which would appear to be somewhat more advanced than a U.S. engineering technician program while not quite the full bachelor's degree," Mr. Colvin wrote in an email. "Comparability is of course a large issue not just here but in general when comparing degrees across countries." (The India numbers, as I wrote earlier, are also questionable; Mr. Colvin said Monday that he is still looking for his source for those figures and will get back to me.)

But others told me that the 600,000 figure for China in 2003 included engineering graduates who had received less training than their U.S. counterparts. Richard Freeman, a professor of economics at Harvard University who has studied the issue, told me in an email that the Chinese numbers include graduates of two-to-three-year programs who would be comparable to engineering technicians in the U.S. (recipients of an associate's degree). "The number getting full course degrees is around 350,000, which is what we would compare to U.S. graduates in a year," Dr. Freeman said.

Kudos to Hira and Freeman for their intellectual honesty -- both of them are generally concerned about the effects in the U.S. of widening the global supply of educated labor.

[OK, so the number isn't as big as previously thought. It's still pretty big, right?--ed. This gets to the question of quality. Diana Farrell and Andrew J. Grant write in the latest McKinsey Quarterly that the quality problem could lead to a talent shortage in China:

[F]ew of China's vast number of university graduates are capable of working successfully in the services export sector, and the fast-growing domestic economy absorbs most of those who could. Indeed, far from presaging a thriving offshore services sector, our research points to a looming shortage of homegrown talent, with serious implications for the multinationals now in China and for the growing number of Chinese companies with global ambitions....

China's pool of potential talent is enormous. In 2003 China had roughly 8.5 million young professional graduates with up to seven years' work experience and an additional 97 million people that would qualify for support-staff positions.

Despite this apparently vast supply, multinational companies are finding that few graduates have the necessary skills for service occupations. According to interviews with 83 human-resources professionals involved with hiring local graduates in low-wage countries, fewer than 10 percent of Chinese job candidates, on average, would be suitable for work in a foreign company in the nine occupations we studied: engineers, finance workers, accountants, quantitative analysts, generalists, life science researchers, doctors, nurses, and support staff.

Consider engineers. China has 1.6 million young ones, more than any other country we examined. Indeed, 33 percent of the university students in China study engineering, compared with 20 percent in Germany and just 4 percent in India. But the main drawback of Chinese applicants for engineering jobs, our interviewees said, is the educational system's bias toward theory. Compared with engineering graduates in Europe and North America, who work in teams to achieve practical solutions, Chinese students get little practical experience in projects or teamwork. The result of these differences is that China's pool of young engineers considered suitable for work in multinationals is just 160,000—no larger than the United Kingdom's. Hence the paradox of shortages amid plenty.]

UPDATE: Howard French has a nicely balanced account in the New York Times of China's effort to upgrade its top universities in order to attract top-drawer talent. The highlights:

China is focusing on science and technology, areas that reflect the country's development needs but also reflect the preferences of an authoritarian system that restricts speech. The liberal arts often involve critical thinking about politics, economics and history, and China's government, which strictly limits public debate, has placed relatively little emphasis on achieving international status in those subjects.

In fact, Chinese say - most often euphemistically and indirectly - that those very restrictions on academic debate could hamper efforts to create world-class universities.

"Right now, I don't think any university in China has an atmosphere comparable to the older Western universities - Harvard or Oxford - in terms of freedom of expression," said Lin Jianhua, Beijing University's executive vice president. "We are trying to give the students a better environment, but in order to do these things we need time. Not 10 years, but maybe one or two generations."

French also provides his own engineering numbers: "In engineering alone, China is producing 442,000 new undergraduates a year, along with 48,000 graduates with masters' degrees and 8,000 Ph.D's."

LAST UPDATE: More on the overhyping of India and China from Pranab Bardhan and Brad DeLong.

posted by Dan at 06:22 PM | Comments (15) | Trackbacks (0)

How crazy is Mahmoud Ahmadi-Nejad?

Iran's President Mahmoud Ahmadi-Nejad had some lovely words for Israel yesterday, according to the FT's Gareth Smyth:

Mahmoud Ahmadi-Nejad, Iran’s fundamentalist president, on Wednesday declared that Israel should be “wiped off the map” and warned Arab countries against developing economic ties with Israel in response to its withdrawal from Gaza.

His remarks, delivered at a conference in Tehran entitled “A World without Zionism”, led to diplomatic protests by the UK, France and Spain, while Shimon Peres, Israel’s deputy prime minister, said Iran should be expelled from the United Nations.

In Washington, spokesmen for the Bush administration said the statement underscored US concern over Iran’s nuclear weapons programme.

The most depressing sentence in the story? "US analysts noted that the president’s remarks were not a departure from hardline Iranian rhetoric and did not represent new policy." Well that's a relief.

Whenever political leaders start talking crazy talk, some political scientist like me usually comes out of the woodwork to explain the underlying rationality of such a move. After reading this Financial Times piece by Smyth and Najmeh Bozorgmehr, however, I'm beginning to wonder about Ahmadi-Nejad's competence:

Complaints about rising chicken prices during the holy month of Ramadan mark the first widespread disquiet about president Mahmoud Ahmadi-Nejad, just two months after he became Iran's president.

Ayatollah Ali Khamenei, Iran's supreme leader, last week acknowledged public concerns in Friday prayers, saying it was "unfair to drag the government to the table of expectations after only two or three months". Private business was wary of Mr Ahmadi-Nejad's rhetoric even as he won June's landslide election victory, but is now approaching a crisis of confidence. "Name me one sector that is working," says a government official.

The Tehran Stock Exchange (TSE) has dropped 20 per cent since the election, with the Tehran price index (Tepix) closing on Monday at 10,014, perilously close to the psychological 10,000 mark level. Yesterday the exchange was closed for a public holiday.

A sense of malaise in the economy has resulted both from Mr Ahmadi-Nejad's statist rhetoric and from tension with Europe and the US over Iran's atomic programme. Hossein Abdeh-Tabrizi, secretary-general of the TSE, has linked falling share prices to the nuclear issue. Business circles welcomed the new government's economic team and applauded parliament's plan to reduce subsidies on the sale of imported petrol, but Mr Ahmadi-Nejad has himself spread confusion over the government's direction. The president reacted to falling share prices by calling on public bodies, which own about 80 per cent of shares, to control the decline. At the same time, the commerce ministry banned cement exports to help meet domestic demand, hitting the cement companies which comprise about 30 per cent of the bourse. "The government seems to jettison long-term policies [favouring the market] for short-term reasons and so it's not clear where it's heading," says an economy analyst.

Iran's private businesses are also worried about possible UN Security Council sanctions over Iran's nuclear programme. Questioned last Thursday by reporters, Mr Ahmadi-Nejad refused to deny that Tehran is blocking letters of credit for companies from South Korea, the UK, Argentina and the Czech Republic, countries that last month voted for a resolution at the International Atomic Energy Agency finding Tehran in "non-compliance" with the nuclear non-proliferation treaty. "Economic relations have to be balanced with political relations," says Mr Ahmadi-Nejad.

South Korean direct and indirect exports to Iran and its investment - mainly in the oil and auto sectors - were about $3bn in 2004. "When you compare this with Korea's $55bn trade surplus with the US, it's hard to see what Iran thinks it can achieve from such pressure on Korea," says the analyst.

I can't see the rationale either. Maybe these kind of sanctions weaken Ahmadi-Nejad's domestic political opponents, but in a country like Iran there are better ways of weakening one's political opponents. Even in a world of $60 oil and the U.S. bogged down in Iraq, this kind of political behavior is not heakthy.

So is Mr. Ahmadi-Nejad crazy like a fox -- or just crazy? Discuss.

posted by Dan at 12:59 AM | Comments (54) | Trackbacks (0)

Congrats to the pale hose

Back in August, Mike DeBonis wrote the following in Slate:

Chicago's Sox still have the best record in the American League by far. They're a lock for the playoffs, and they have a real shot at making the World Series for the first time since 1959. But if they do win it all, there won't be hundreds of books and special-edition DVDs that exhaustively document the final moments of anguish and misery on Chicago's South Side. When the sports world's most mundane epic losing streak ends, it will go quietly.

Now we'll get to test his hypothesis.

Congratulations to the 2005 World Champion Chicago White Sox. Like the Red Sox last year, the South Siders swept the NL representative. Unlike last year, however, all four of these games were exciting nailbiters until the end. As David Pinto points out in Baseball Musings:

The Sox did it their way. Four close games, two decided by one run. The White Sox outscored the Astros by just six runs over the four games. Houston had plenty of chances, but the White Sox pitchers always found a way to get out of the jam.

The Red Sox in 2004, the White Sox in 2005 -- man, if the Cubs win it next year, the world really will end.

Of course, I've lived in Chicago long enough to know that until that happens, White Sox fans will be very, very happy to stick it to the Cubs fans.

UPDATE: You just knew Leo Strauss was involved.

posted by Dan at 12:29 AM | Comments (4) | Trackbacks (0)

Wednesday, October 26, 2005

A very important post about.... Barbara Boxer's blue mind

Via Matt Welch, I found Anne-Marie O'Connor's story in the Los Angeles Times about Senator Barbara Boxer's new novel, A Time to Run (co-authored with Mary-Rose Hayes).

There's some fascinating information in O'Connor's piece about the motivations behind the troika of protagonists:

In "A Time to Run," the main characters from the reigning "blue states" — Josh from California and Ellen from equally reassuring New York — are liberal, altruistic, sane. Their affluent families are caring and sharing.

Their red state-born buddy, Greg, is the son of an emotionally abusive Ohio hardware seller former Marine who lost his favorite son in Vietnam. The red states that Greg heads to after graduation are interchangeably dull Siberias where Greg hangs out with the menfolk, bonding over beer, football and hunting.

Josh and Ellen become Left Coast do-gooders. Greg becomes a sociopathic neoconservative journalist, the go-to guy for character assassinations conjured by a right-wing California senator. Boxer said that although she didn't intend for the characters to represent the American political equation, "I hope people will understand the issues I raise about why people are blue or red or purple."

Her literary intrigues are not all political: There's also some bodice-ripping, with a love triangle between Greg, Ellen and Josh, and physical congress, tastefully suggested by euphemisms in which bodies "mesh." There's a whiff of scandal, too, when a youthful indiscretion comes back to haunt Josh....

Boxer said the novel explores "why people become liberals and conservatives. We explore the battle between liberals and conservatives at so many levels."

And it's not pretty. If you're looking for an inspirational story about someone who rose above a difficult background to champion the downtrodden, forget it.

In "A Time to Run," underprivileged Greg emerges as an opportunistic user — an object lesson that does not seem particularly populist.

("We wanted to give Greg a very solid blue-collar background, and Ohio just seemed to be a good place for somebody like Greg to be from," said co-writer Hayes, who is the London-born author of such books as "The Winter Women." "I do believe that that is a fact, that generally speaking, large coastal cities have a more liberal bent.")

"It's so clear the relationship with (Greg's) dad and what happened to his brother in Vietnam, made a big impact on his life," Boxer said. "The fact that [Josh and Ellen] had loving families made a very big difference."

Greg, Boxer said, "didn't have that inner applause you get from your family. "It's terrible when someone with all his talent uses it to hurt people."

Insert your own joke about the Kennedys here.

Now if you'll excuse me, I have to go consult a therapist to determine which parent emotionally abused me so much as to drive to the right of the political spectrum.

[Wow, emotional abuse and early gender confusion. You're a psychological mess. No wonder you didn't get tenure!--ed. Hmmm... maybe I should take a closer look at the Americans With Disabilities Act!!]

posted by Dan at 04:03 PM | Comments (13) | Trackbacks (0)

Harriet Miers evokes the wrong emotions

I'm actually beginning to feel pity for Supreme Court nominee Harriet Miers --- and this is not a good thing. I'm feeling the same way about Miers that I feel when I go to a job talk and recognize within five minutes that there is no chance in hell that this person is going to be hired.

It now seems well nigh impossible to find anyone of substance willing to say anything really positive about her nomination. Finding negative things, on the other hand, is pretty damn easy.

Orin Kerr looks at some Miers speeches, about the role of the courts in addressing abortion or religion. Reading the highlighted passages, I concur with Kerr: "The writing is awkward enough that I'm not entirely sure what she is saying."

This pales in comparison to Virginia Postrel's take:

For whatever reason, the president has picked a woman who not only has no constitutional or judicial experience but even in her business practice has demonstrated no interest in the law as anything other than a source of billable hours. At 60 years old, she appears never to have had a substantive conversation about law or policy with any friend. She comes from a closed and cronyish legal and business culture and appears to have gotten ahead through a combination of networking, nose-to-the-grindstone diligence, and willingness to do her law firm's management, rather than legal, work.

Her selection is an insult to women, to evangelical Christians, and to corporate lawyers. Is this really the best these groups have to offer to U.S. Supreme Court?

However, the end to this New York Times story by David Kirkpatrick is what really got me to feeling sorry for Miers:

Asked if the debate had become "one-sided," with too few defending Ms. Miers, Senator Sessions, the Alabama Republican, struggled for words, then pushed a button for a nearby elevator in the Capitol building and told an aide, "Get me out of here."

As Ann Althouse points out, "Once people have decided you're dumb, pretty much everything you say sounds dumb." That is now the problem for Miers -- and, by extension, the Bush administration.

posted by Dan at 11:56 AM | Comments (6) | Trackbacks (0)

How long can the fundamentalists be wrong?

When it comes to predicting exchange rates, there are chartists and fundamentalists. The former focus on short-term price trends and try to win the "predict everyone else's expectations" game. The latter look at underlying economic fundamentals to figure out where the exchange rate will inevitably head.

When it comes to the dollar's performance in 2005, chartists are beating fundamentalists. The Economist's Buttonwood column tries to explain why:

The currency has gained more than 10% this year, hitting a two-year high against the yen last week and a three-month peak against the euro. This is despite an American current-account deficit even wider than last year’s and apparently reduced enthusiasm among Asian central banks for dollar-denominated assets. Buttonwood was among those early in the year who expected the dollar to go every which way but up. How wrong can a columnista be? Why didn’t the currency behave as she told it to? Don’t deficits matter?

The answer seems to be that they do, but only when relative returns are not compelling and other news looks likely to be gloomy too....

Those who feared that Asian central banks would get tired of buying depreciating dollars, causing the currency to collapse and long bond yields to shoot up, have also had to think again. Though official statistics capture only a fraction of what the banks do with their fast-growing foreign-exchange reserves ($2 trillion higher since 2000), central banks are certainly a shadow of their former selves at Treasury auctions these days. The dollar has strengthened nonetheless, and ten-year bond yields are only a little higher than a year ago. Now that dollar bonds look a plausible investment, the central banks that used to buy them to foster their own export-led development have been able to retire, while private investors have stepped up to the plate.

So too, intriguingly, have the oil-exporting countries, whose current-account surpluses—far larger than China’s—cast a long shadow over financial markets these days. The impact of petrodollars on the ordinary sort is hard to pin down. Economists at Credit Suisse First Boston, for example, have calculated that for every increase of $10 a barrel in oil prices, the daily demand for dollars just to carry out transactions increases by $300m (though other transactions may be crowded out because energy-consumers don’t have money for both).

More important is where the petrodollars end up invested. Though credible figures are elusive, a fair whack has certainly found a home in dollar-denominated assets, some in corporate bonds and some in short-term paper. In the longer term, much of it will flow to Europe and Asia—to Germany, for example, which exports the kind of capital equipment the Gulf states need to develop their infrastructure. For the moment, however, the sharp rise in oil prices this year may well have helped the dollar.

The question is how long the chartists will stay bullish on the dollar. Speaking for the fundamentalists, New York Fed President Timothy Geithner is not optimistic (link via Brad Setser):

The fact that we are using a substantial part of the savings we are borrowing from the rest of the world to finance an unsustainable level of public borrowing leaves us more vulnerable than if those savings were being used for productive private investment. Large structural fiscal deficits limit the size of the sustainable external imbalance for any country, even the United States, and they necessarily increase concern about the terms on which we are likely to finance the present imbalance.

It should concern us because of how the imbalance has been financed. A substantial portion of the capital inflows that finance our current account deficit has come from foreign central banks—which have been accumulating dollar reserves to preserve exchange rate arrangements that are unlikely to be sustainable and are already in the process of change. The impact of a reduction in the scale of official accumulation of dollar assets could be fully offset by increases in purchases by private investors. But even in the context of a continued high degree of confidence in the relative return on claims on the United States, it is hard to know with confidence how the preferences of private savers might respond to the process of gradual evolution in their nation’s exchange rate regimes now underway.

And most importantly, perhaps, these imbalances matter because at some point they will have to reverse. Market forces will at some point induce an adjustment. And that inevitable process of adjustment will bring with it the risk of large movements in relative prices, greater volatility in asset prices and slower growth in the United States and in the rest of the world.

Geithner also touches on one of the big questions that I can't answer -- why the United States has such a comparative advantage in consuming goods and services:

The adjustment process is also complicated by the fact that the rest of the world does not appear likely, even over the medium term, to be in a position to provide a sufficiently strong offsetting source of demand growth to compensate for the necessary slowing in U.S. domestic demand. Policy actions to promote structural reform in the labor, product and financial markets could potentially change this, but the policy changes required are politically difficult, and their effects on net savings over time might be offset by demographic and other forces working the other direction.

it's not even clear that policy reforms of the sort Geithner is talking about will be sufficient in the Pacific Rim -- past crises have made that region loath to consume. Click here for more on the puzzle of Asia's lack of domestic consumption.

posted by Dan at 11:37 AM | Comments (6) | Trackbacks (0)

Tuesday, October 25, 2005

Do brain drains retard economic development?

Celia Dugger has an annoying New York Times story entitled, "Study Finds Flight of Educated Workers Affects Poor Nations." Here's how it opens:

Poor countries across Africa, Central America and the Caribbean are losing sometimes staggering portions of their college-educated workers to wealthy democracies, according to a World Bank study released yesterday.

The study's findings document a troubling pattern of "brain drain," the flight of skilled middle-class workers who could help lift their countries out of poverty, some analysts say. And while the exact effects are still little understood, there is a growing sense among economists that such migration plays a crucial role in a country's development.

The findings are based on an extensive survey of census and other data from the 30 countries in the Organization for Economic Cooperation and Development, which includes most of the world's richest nations.

The study found that from a quarter to almost half of the college educated citizens of poor countries like Ghana, Mozambique, Kenya, Uganda and El Salvador lived abroad in an O.E.C.D. country - a fraction that rises to more than 80 percent for Haiti and Jamaica.

In contrast, less than 5 percent of the skilled citizens of the powerhouses of the developing world, like India, China, Indonesia and Brazil, live abroad in an O.E.C.D. country.

These patterns suggest that an extensive flight of educated people is damaging many small to medium-size poor countries, while the largest developing countries are better able to weather relatively smaller losses of talent, and even benefit from them when their skilled workers return or invest in their native lands, said Frédéric Docquier, a lead researcher for the bank and an economist at the University of Leuven in Belgium.

A few thoughts:

1) Er... has Indonesia been a "powerhouse of the developing world" since 1998?

2) How much of the cause behind brain drains is simple geography? India, China, Brazil, and Indonesia are all quite distant from an OECD country -- especially for inland populations. Haiti and Jamaica are quite close. That's not the only factor (see Mozambique) but it might have been worth a mention.

3) The lead paragraphs make it sound like the brain drain is causing these countries to stay in poverty. This precludes the possibility that there are extant causes -- government corruption, weak property rights, segmented capital markets, inadequate investments in primary education -- that encouage brain drains and keep countries poor at the same time. Brain drains might be an intervening variable, but I'm unconvinced it's an underlying cause.

Here's a link to the actual World Bank report. Go check it out.

posted by Dan at 11:12 AM | Comments (27) | Trackbacks (0)

Monday, October 24, 2005

Open Bernanke thread

President Bush has nominated Ben Bernanke to replace Alan Greenspan as Federal Reserve Chairman. Comment away!!

Tyler Cowen is all over the nomination. See this post grading Bernanke's capabilities to do the job -- and this one on Bernanke's contributions to the economics discipline.

On current policy debates, Bernanke is best known for his "global savings glut" hypothesis -- about which I blogged here.

For me, the key will be whether -- like Greenspan -- Bernanke will be willing to question his assumptions about the way the economy works in the face of data that contradicts his a priori assumptions. If Tyler's assessment is correct, I'm pretty optimistic.

It's nice to see Bush reverting to the John Roberts mold of picking universally well-regarded nominees -- as opposed to other, less savory molds. Andrew Samwick thinks "Bernanke is an excellent choice." Brad DeLong thinks it's "a very good choice." Max Sawicky thinks it's "the preferable outcome."

On the other hand, Stephen Roach says that Bernanke was his "second favorite choice." One could interpret that as damning with faint praise, but given Roach's general economic outlook, I'd interpret it as grudging acceptance.

UPDATE: Foreign Policy has a boatload of Bernanke-relevant articles up on their main website. In late 2003, Bernanke wrote the following:

Low and stable inflation in many countries is an important accomplishment that will continue to bring significant benefits. But de facto price stability has had another effect, which is now forcing central bankers, as well as the public, to fundamentally rethink inflation.

After a long period in which the desired direction for inflation was always downward, the industrialized world's central banks must today try to avoid major changes in the inflation rate in either direction. In central bank speak, we now face “symmetric” inflation risks....

In short, inflation can be too high, but it can also be too low. So what level of inflation is just right—what, if you will, is the “Goldilocks” level? The best-case scenario is when inflation is neither so high as to impede economic efficiency and growth nor so low that the nominal short-term interest rate routinely flirts with zero. What that ideal inflation rate is depends on the individual economy and on the views and preferences of policymakers.

Although the “just right” inflation rate for the U.S. economy remains an open question, much recent research suggests that it is around 2 percent.

One interesting question at confirmation hearings will be where Bernanke thinks inflation is right now. Given current conditions, deflation is not the source of concern it was a few years ago. At the same time -- as Daniel Gross pointed out yesterday in the New York Times -- it's not completely clear whether inflation should be a source of concern either.

posted by Dan at 02:12 PM | Comments (8) | Trackbacks (0)

Open Syria thread

I've been remiss in not posting about the UN report blasting Syrian officials for their role in the assassination of Lebanese Prime Minister Rafik Hariri. In the New York Times, John Kifner provided a nice one-paragraph summary:

In chilling detail, often reading like a paperback thriller, the United Nations report traces months of plotting by top Syrian intelligence officials - including President Bashar al-Assad's powerful brother-in-law - and their Lebanese proxies that included constant surveillance of Mr. Hariri's movements and the forced recruitment of a fake assassin to make a "suicide tape" to hide the real hands behind the bombing that killed Mr. Hariri in February.

So, the question is, what now?

Some surprising people are talking tough. In the Financial Times, Former Kerry advisor Martin Indyk urges the Bush administration to resist a Libya-style deal with Syrian leader Bashir Assad:

Mr Assad has already sought a middle way out of this dilemma, sending emissaries to Washington to offer a Libyan-style “package deal”, involving the surrender of lesser officials and an end to Syria’s rogue activities. But his offer comes far too late.

President George W. Bush has already taken the measure of the man and found him unreliable. Mr Assad’s commitment to stop Syrian support for the Iraqi insurgency was honoured in the breach. His withdrawal of Syrian troops from Lebanon was followed by a bombing campaign that has forced many of the Lebanese political class to flee. Even people in Washington (like me), who once advocated a “carrots and sticks” approach to the Syrian ingénue, have given up on him.

The Arab press reaction has also been interesting:

A political cartoon in Jordan's independent al-Ghad expressed the choices for Syrian President Bashar Assad after the Mehlis report.

It showed a sweating and confused-looking Assad sitting at a table as he holds two cards in his hand, clearly trying to choose one of them. One of the cards is the ace of spades with a picture of a bearded and scruffy Saddam Hussein. The other card is a two of diamonds with a picture of Libyan leader Moammar Gadhafi dressed as a joker.


posted by Dan at 12:46 PM | Comments (40) | Trackbacks (0)

Sunday, October 23, 2005

The EU needs to turn the key

Alan Beattie and Victor Mallet report in the Financial Times that the EU's previous trade commissioner -- and current Director-General of the World Trade Organization -- is trying to pressure the current trade commissoner to get the EU's act together on the Doha round:

The European Union is under pressure to improve its offer on farm tariff cuts within 10 days, or risk the cancellation of December's Hong Kong trade summit, according to trade officials.

Officials in Europe say that Pascal Lamy, WTO director-general, has warned them there is no point going ahead with the meeting in December without a more ambitious proposal.

The other leading partners in the negotiations - the US and the Group of 20 developing countries - have also identified the EU's position as the main sticking point. "A clear and rising degree of concern has been expressed to us," said one European Commission official.

The official confirmed that Mr Lamy had suggested that the next week to 10 days was the make-or-break point for the Doha round of talks. The WTO declined to comment.

Cancelling a ministerial meeting, which take place every other year, would require the consent of all 148 members of the WTO and would be an admission that the round had come to a halt.

The EU, which initially offered what the US says is a 24.5 per cent cut in farm tariffs, is working on a second and final offer which it hopes to present later this week, proposing cuts likely to average around 40 per cent.

But such a plan would fall short of what the US says is the minimum acceptable offer - to match the G20's plan for an average 54 per cent cut....

Mr Mandelson wants an offer to at least match the cuts agreed in the previous "Uruguay round" of trade talks, which reduced farm tariffs by an average of 36 per cent. "If there is another bid, it will be a final and non-negotiable one, and will be dependent on progress in the goods and services parts of the talks," the Commission official said. John Tsang, the Hong Kong commerce secretary due to host December's ministerial, told the Financial Times that the process was "at crisis point".

"This agriculture deadlock could really derail the whole project," Mr Tsang said, adding that the EU call for liberalisation in goods and services at the same time was pointless. "We all know agriculture is the key, the EU holds the key, and now is the time to turn the key."

The situation is clearly causing Peter Mandelson to get hot under the collar.

Why exactly is the EU acting so obdurate on this issue? Well, it's mostly the French, and according to Thomas Fuller of the International Herald Tribune, it's the power of terroir (link via Virginia Postrel)

posted by Dan at 09:49 PM | Comments (2) | Trackbacks (0)