Saturday, December 3, 2005
Kadima is doomed. Doomed, doomed, doomed, doomed, doomed.
I've been remiss in not blogging about Israel, because I do so love the roiling comments section such posts generate. However, I have only one thing to say about Shimon Peres' decision to leave the Labor party and join Ariel Sharon's brand-spanking new Kadima Party -- it can only mean Kadima is doomed to implode.
Why do I say this? Because the one constant in Israeli politics is that Shimon Peres might be the single-worst politician in the brief history of the Israeli state. By this I don't mean Peres is a bad policymaker or leader -- I mean the man couldn't win an election to save his life. This is a guy who couldn't beat Mr. anti-charisma, Yitzhak Shamir. He couldn't beat Bibi Netanyahu after Yitzhak Rabin was assassinated by a Jewish zealot.
If Peres keeps his mouth shut and goes into a bunker until the election is over, maybe Kadima has a chance. But unless the focus is completely on Ariel Sharon, Kadima will have a very short half-life.
UPDATE: Omri Ceren has an Israeli politics blogg, Mere Rhetoric, that is worth checking out. He's more optimstic about Peres than I am.
Friday, December 2, 2005
Let's talk about trade
I have an article in the latest issue of The American Interest on American attitudes about international trade. It's called "Trade Talk."
As the opening suggests, I'm not optimistic:
American perceptions about international trade have changed dramatically in the past two decades. Presidents can no longer craft positions on international trade issuesforeign economic policy in a vacuum. Trade now intersects with other highly politicized issues, ranging from the war on terror to environmental protection to bilateral relations with China. Old issues such as the trade deficit and new issues such as offshore outsourcing have made a liberal trade policy one of the most difficult political sells inside the Beltway.Alas, the rest of it is behind a subscription firewall. But go subscribe -- or buy this issue from anewsstand -- and then check it out.
The gold bug variations
Despite its romantic allure, gold has historically been a pretty lousy investment. Since the invention of interest-bearing assets portfolio diversification, there is very little financial incentive to hold large amounts of gold. The one exception to this rule, however, is when it seems like high inflation is imminent at the same time that everything else in the global political economy going to hell in a handbasket. The last great gold rush -- when it hit $850 in 1980 -- came at a time of double-digit inflation in the U.S., a stagnant global economy, and geopolitical instability.
Gold appears to have risen in value in recent months and years -- is this a sign of the current global political economy crashing and burning? The Economist's opinion page says I should relax:
Nothing swells the breast so much as the thought that you have been proved right at last. After riding high at the start of the 1980s, gold bugs had a miserable couple of decades. The price declined relentlessly, mocking their credo that the security of the financial system ultimately depends upon the yellow metal. Lately, though, the faithful have enjoyed their reward. In the past five years the price of gold has doubled. This week in Asian trading it briefly surpassed $500 a troy ounce—a level last breached in 1987. You can almost feel the bugs' excitement as the message sinks in: gold is back.So do I feel better? Yes and no. While the Economist is correct about gold in particular, I'm more concerned about the fact that "investors have put money into a wide range of metals." This could be because China's growing demand for raw materials has driven up the price of all commodities. But it could also be because risk-averse investors have figured out that they can buy something besides gold as a hedge against high inflation and political instability.
I strongly suspect that Chinese economic growth is the primary driver, because U.S. inflation right now is much lower than it was in 1980. On the other hand, a lot more foreigners hold dollars than they did in 1980, and the difficulty of predicting when the dollar will start to fall has me wondering if something else is going on.
Thursday, December 1, 2005
Your must-read blog post of the day
Scott Eric Kaufman, "My Morning: A Play in One Uncomfortable Act."
My only suggestion would have been to have inserted the word "unconsummated" somewhere in the title.
Wal-Mart is good for the poor
That's the basic conclusion of Jason Furman's essay "Wal-Mart: A Progressive Success Story" posted at the Center for American Progress website:
Productivity is the principal driver of economic progress. It is the only force that can make everyone better off: workers, consumers, and owners of capital. Wal-Mart has indisputably made a tremendous contribution to productivity. From its sophisticated inventory systems to its pricing innovations, Wal-Mart has blazed a path that numerous other retailers are now following, many of them vigorously competing with Wal-Mart. Today, Wal-Mart is the largest private employer in the country, the largest grocery store in the country, and the third largest pharmacy. Eight in ten Americans shop at Wal-Mart.Read the whole thing. One quick cavil -- while Clinton deserves credit for the EITC's passage, I've always thought of the idea behind it as a conservative one.
Furman's analysis is of a piece with Global Insight's study of Wal-Mart's effect on the U.S. economy that was released last month:
Global Insight reviewed a wide range of previous studies that indicated that the efficiencies that Wal-Mart has fostered in the retail sector have led to lower prices for the U.S. consumer. These results were supported by statistical analysis which found that the expansion of Wal-Mart over the 1985 to 2004 period can be associated with a cumulative decline of 9.1% in food-at-home prices, a 4.2% decline in commodities (goods) prices, and a 3.1% decline in overall consumer prices as measured by the Consumer Price Index-All Items, which includes both goods and services.To be fair, Global Insight also invited outside papers, some of which are more critical of the Wal-Mart effect.
Needless to say, having John Kerry's principal economic advisor issue such a pronouncement has roiled other progressives. Matthew Yglesias has posted what looks like the most honest reply -- which is that the danger of Wal-Mart to progressives is not a question of economics but but politics. If Wal-Mart helps to weaken the power of unions, then it degrades one of the chief organzational pillars of the left.
Wednesday, November 30, 2005
Foxes, hedgehogs, and the study of international relations
When we last left off, we were discussing Louis Menand's New Yorker review of Philip Tetlock's Expert Political Judgment: How Good Is It? How Can We Know?.
In his review, Menand highlights an interesting observation by Tetlock on who did better at predicting world political events.
It was no news to Tetlock... that experts got beaten by formulas. But he does believe that he discovered something about why some people make better forecasters than other people. It has to do not with what the experts believe but with the way they think. Tetlock uses Isaiah Berlin’s metaphor from Archilochus, from his essay on Tolstoy, “The Hedgehog and the Fox,” to illustrate the difference. He says:I'll need to read the book to see the methodology by which Tetlock distinguished hedgehogs from foxes, but let's assume that his finding is correct. What does this imply for the study of international relations?Low scorers look like hedgehogs: thinkers who “know one big thing,” aggressively extend the explanatory reach of that one big thing into new domains, display bristly impatience with those who “do not get it,” and express considerable confidence that they are already pretty proficient forecasters, at least in the long term. High scorers look like foxes: thinkers who know many small things (tricks of their trade), are skeptical of grand schemes, see explanation and prediction not as deductive exercises but rather as exercises in flexible “ad hocery” that require stitching together diverse sources of information, and are rather diffident about their own forecasting prowess.A hedgehog is a person who sees international affairs to be ultimately determined by a single bottom-line force: balance-of-power considerations, or the clash of civilizations, or globalization and the spread of free markets. A hedgehog is the kind of person who holds a great-man theory of history, according to which the Cold War does not end if there is no Ronald Reagan. Or he or she might adhere to the “actor-dispensability thesis,” according to which Soviet Communism was doomed no matter what. Whatever it is, the big idea, and that idea alone, dictates the probable outcome of events. For the hedgehog, therefore, predictions that fail are only “off on timing,” or are “almost right,” derailed by an unforeseeable accident. There are always little swerves in the short run, but the long run irons them out.
Potentially a lot -- from my vantage point, the incentives in the IR discipline are heavily skewed towards the hedgehogs. Methodologically, the growing sophistication of formal, statistical, and even qualitative techniques make it increasingly difficult for any one scholar to keep up their abilities in more than one area. Professionally, our field rewards the hedgehogs, the ones who come up with "the big idea" that can explain it all. As a result, my field has a lot of hedgehogs, which means that we may not be of much use when it comes to policy relevance.
Is this a bad thing? I'm sure that many commenters will instinctively say, "yeah!" but it's not so clear cut. First, if the point of the academy is to nourish unpopular but important ideas, then it's a good thing we have a lot of hedgehogs, because every once in a while they will produce the kind of insight that helps to understand Really Big Truths.
Second, asking IR scholars for accurate predictions about the future might be like asking meterologists for an accurate weather forecast three months ahead. That's impossible -- there are just too many variables. It might be that what political scientists do best is not predicting future events but rather explaining the past and present in a way that provides limited but useful insights into the very near future.
Third, there are think tanks for the kind of expert predictions discussed in Tetlock's book. It's true that think tanks have their own perversities, but perhaps the best thing to do is fix them rather than the academy.
Despite those counterarguments, I think a few more IR foxes might be a good idea. [Good idea! Did you know Salma Hayek will be co-hosting the Nobel Peace Prize Concert on December 10th?--ed. That's not who I meant by foxes. Oh.... did you mean Angelina Jolie's work as a United Nations ambassador?--ed. No, and you're not helping right now.]
I'll leave this question to the commenters.
Tuesday, November 29, 2005
Who needs experts?
Louis Menand has a glowing review in the New Yorker of Philip Tetlock's latest opus, Expert Political Judgment: How Good Is It? How Can We Know?. Some highlights:
It is the somewhat gratifying lesson of Philip Tetlock’s new book... that people who make prediction their business—people who appear as experts on television, get quoted in newspaper articles, advise governments and businesses, and participate in punditry roundtables—are no better than the rest of us. When they’re wrong, they’re rarely held accountable, and they rarely admit it, either. They insist that they were just off on timing, or blindsided by an improbable event, or almost right, or wrong for the right reasons. They have the same repertoire of self-justifications that everyone has, and are no more inclined than anyone else to revise their beliefs about the way the world works, or ought to work, just because they made a mistake. No one is paying you for your gratuitous opinions about other people, but the experts are being paid, and Tetlock claims that the better known and more frequently quoted they are, the less reliable their guesses about the future are likely to be. The accuracy of an expert’s predictions actually has an inverse relationship to his or her self-confidence, renown, and, beyond a certain point, depth of knowledge. People who follow current events by reading the papers and newsmagazines regularly can guess what is likely to happen about as accurately as the specialists whom the papers quote. Our system of expertise is completely inside out: it rewards bad judgments over good ones....There are intriguing implications for understanding world politics that deserves a post of their own, but suffice it to say that Tetlock's findings will probably warm the cockles of every political blogger out there.
Your Schumpeter quote of the day
Early in life I had three ambitions. I wanted to be the greatest economist in the world, the greatest horseman in Austria, and the best lover in Vienna. Well, I never became the greatest horseman in Austria.Courtesy of Irwin Stezler.
GM: it's about more than legacy costs
Sean Gregory asks a useful question in Time: if the problems at GM are symptomatic of American manufacturing writ large, then why are foreign auto firms doing so well in the United States?
According to the Center for Automotive Research (CAR), the number of manufacturing jobs created by foreign-based automakers in the U.S. has risen 72% since 1993, to about 60,000. (The Big Three currently account for around 240,000 manufacturing jobs in the U.S., down from 340,000 in 1993.) The Asian companies have grown the fastest. Toyota, which plans to overtake GM soon as the world's largest automaker, has 11 U.S. plants and expects to open a truck factory in San Antonio, Texas, in 2006. European brands, including BMW and Mercedes-Benz, are also growing. CAR estimates that foreign automakers operating in the U.S. add 1.8 million jobs to the American economy, including white-collar, dealership and supplier positions--from partsmakers to the bartenders at post-whistle watering holes.Click here for a CAR report on the contribution of foreign automakers to the U.S. economy.
The withdrawal question
I was on NPR's News & Notes with Ed Gordon this morning to discuss the ifs and the whens of a U.S. withdrawal from Iraq (click on the link to listen). The other talking head was Laurence Korb from the Center for American Progress. Larry has forgotten a lot more about the U.S. military than I've ever learned, so I'm not sure how much value I added to the conversation.
Larry and I agreed that the question is not whether there will be a withdrawal of troops, but when and how. My take was similar to Fred Kaplan's:
The signs are clear, in any case, that a substantial withdrawal—or redeployment—is at hand. Top U.S. military officers have been privately warning for some time that current troop levels in Iraq cannot be sustained for another year or two without straining the Army to the breaking point. Rep. John Murtha's agenda-altering Nov. 17 call for an immediate redeployment was not only a genuine cri de coeur but also, quite explicitly, a public assertion of the military's institutional interests—and an acknowledgment of Congress' electoral interests.Here's Throughout the conversation Larry was pushing this September proposal he co-authored with Brian Katulis on a "strategic redeployment" of U.S. forces from Iraq.
My take is a little different -- why not wait for the newly-elected Iraqi government to ask for our phased departure? If U.S. forces are as unpopular in Iraq as Korb and others claim, any elected government would exploit that resentment to boost their popularity and legitimacy. Asking for a withdrawal, and having the Americans respond to that request rather than setting up their own schedule without any consultation whatsoever, would also boost the government's legitimacy.
So, my question to Korb and others is -- why not wait a month for the Iraqis to ask us to do what everyone across the American political spectrum wants us to do anyway?
Monday, November 28, 2005
Mahmoud Ahmadi-Nejad is off his medication again
Since he took office earlier this year, the militance of Iranian president Mahmoud Ahmadi-Nejad has alienated many of his natural supporters in Iran.
If you think his prior statements have made some question his sanity, however, wait until people read this Financial Times story by Gareth Smyth and Najmeh Bozorgmehr:
A leading website in Iran has published a transcript and video recording of President Mahmoud Ahmadi-Nejad claiming to have felt “a light” while addressing world leaders at the United Nations in New York in September. Baztab.com – a website linked to Mohsen Rezaei, former commander of the Revolutionary Guards – said the recording was made in a meeting between the president and Ayatollah Abdollah Javadi-Amoli, one of Iran’s leading Shia Muslim clerics.The staff here at danieldrezner.com confirms that its eyes and ears will definitely be staying open whenever Mahmoud Ahmadi-Nejad decides to say something.
The FT Morphs into the Onion
An actual headline in the Financial Times:
Readers are hereby encouraged to suggest the subhead that would do the best job at providing a concrete example buttressing that headline. My suggestion: "Proposes International No-Limit Texas Hold 'Em tournament to Allocate Agricultural Subsidies."
[Does the FT provide any evidence of flair?--ed. According to John Authers:
Unlike many other Mexican technocrats, Mr Gurría also has great personal skills and should be a flamboyant leader for the OECD. He also has links with the European media as a former director of Recoletos in Spain.[Zzzzzzz--ed. Yeah, I know. Flair might have been the wrong word choice here.]
Bush needs economists
Daniel Altman had a piece in yesterday's New York Times on the dearth of economists willing to work for the Bush administration:
The chairmanship of the Council of Economic Advisers will soon be vacant, and two spots on the Federal Reserve Board that were recently filled by academic economists already are. There is no assistant secretary of the Treasury for tax policy, and the director's chair at the Congressional Budget Office, currently occupied by Douglas J. Holtz-Eakin, will soon be empty, too.Niskanen goes on to take quite a few shots at the administration. However, the most interesting observation came in these paragraphs:
"It has been true, typically speaking, that Republican administrations have found it harder to find senior, more prominent academic economists for the C.E.A. members and chairman than have Democratic administrations," said Michael L. Mussa, a senior fellow at the Institute for International Economics, a nonpartisan research group in Washington, who was a member of the council during President Reagan's second term.I'd be curious to hear from economists whether this last assertion is factually correct.
What would be even more interesting is whether the political affiliation precedes the academic specialization or vice versa. One would expect macroeconomists, for example, to be more skeptical of markets -- in their bailiwick, unemployment is a persistent phenomenon, suggesting that markets do not always clear. Microeconomists, on the other hand, are more intimately familiar with the perverse effects of government intervention in markets.
So, does the political ideology redetermine the subfield, or does the subfield alter one's ideology?
Sunday, November 27, 2005
With the exception of a lovely Atlantic profile of Sam Huntngton, I've never really cared for most of Robert D. Kaplan's writings. I fear that part of this is born out of petty jealousy. Kaplan has my dream job, a bewitching mélange of travel writer and analyst of world politics. It's as if P.J. O'Rourke had given up writing to entertain and instead tried writing for policy elites -- and then those policy elites actually took him seriously. Part of it is more substantial, however. According to numerous accounts, Kaplan's Balkan Ghosts and its "ancient hatreds" thesis convinced Bill Clinton not to intervene in Bosnia during the earlier years of his presidency.
Well, now I'm jealous of David Lipsky. In today's New York Times Book Review, Lipsky does a number on Robert D. Kaplan's latest book, Imperial Grunts -- and, by extension, Kaplan's entire body of work. The good parts:
[T]he book goes to pieces immediately. The first problem is headgear. Kaplan's got both his hats on at the same time, and the travel writer (who likes flavors and vistas) keeps barging in. "Who here was Al Qaeda? I asked myself, licking my fingers after devouring a greasy chicken in a sidewalk restaurant filled with armed youngsters." The next one is my favorite: "We were suddenly going out on a nighttime hit of a compound just outside Gardez. There would be no time for the steak and shrimp dinner that had been prepared." And it's a shame such well-traveled eyes are welded between numb ears: Details are "grisly," murders are "gruesome"; you hear "faint" echoes but "shrill" cries; "chiseled" bodies cross "manicured" landscapes; troops become "hardened," resemblances grow "uncanny." Kaplan is trying for fine writing - literary special effects - but he doesn't resist the old grooves, and if a writer can't avoid stock expression, it suggests imprisonment at the conceptional level. Kaplan keeps getting into scrapes at the keyboard. "I wanted a visual sense of the socioeconomic stew in which Al Qaeda flourished." You smile in admiration, as at something rare, like a triple play; it's a double mixed metaphor....That last admission is pretty mind-boggling -- because more than six months after "The Coming Anarchy" came out, Kaplan had converted its central thesis into a book-length treatment, The Ends of the Earth -- which I reviewed and panned here.
[OK, smart guy, what about your own predictions?--ed. Maybe, just maybe, I've made a mistake or two. On the other hand, I was right about J. Lo!]