Saturday, April 29, 2006

Notes from Brussels

John McCain gave the opening speech of the Brussels Forum yesterday. It was notable in two ways -- an off-hand comment that he thhought the global war on terror would last "for the rest of this century", and some pointed comments about the decline and fall of Russian democracy.

The general tenor of the conference so far has been to focus less on transatlantic frictions and more on the geopolitical and geoeconomic difficulties that Russia and China are posing to the West as a whole.

More later, but a question to readers -- will the realpolitik of a rising China and a renegade Russia (though click here for an intriguing development) be the ultimate driver for a closer transatlantic partnership? And should that be the main driver?

posted by Dan at 06:37 AM | Comments (22) | Trackbacks (0)

Thursday, April 27, 2006

Another week, another overseas conference, another open thread

Blogging will be light for the next couple of days, as I'll be wending my way to the GMFUS Brussels Forum on Transatlantic Challenges in a Global Era. It's a pretty interesting agenda/lineup of participants.

So, while I'm gone, a question to readers: which issues would like to see discussed more frequently -- or at all -- here at

posted by Dan at 01:46 PM | Comments (21) | Trackbacks (0)

Wednesday, April 26, 2006

The Tony Snow test

I will ask my readers to correct me, but I believe that Tony Snow will have had the highest pre-appointment profile of any press secretary to date. Certainly, Snow's relations with his former fellow members of the press will be better than anyone else currently working in the West Wing. Via Andrew Sullivan, I see that George Stephanopolous (??!!) is blogging about Snow:

The fact that Tony has criticized the President in print helps Bush much more than it hurts him. Proves he's reached beyond the Austin circle for some independent advice. Snow doesn't just tolerate his former colleagues in the press corps; he likes them. He's smart but not overbearing and speaks with style and a smile. All that should help Bush in the briefing room. Perhaps even better for Bush, Snow is a movement conservative with a real following in the country. The GOP and the President need to pump up enthusiasm at the grassroots before November. Having Snow at the podium and on the airwaves every day should help at the margins.
The social scientist in me would phrase it differently -- this is an ideal test of whether the messenger can triumph over the message. I've seen Tony Snow peform, as it were, on the air and off -- he's sharp and well-spoken. Bush's current poll numbers are pretty friggin' low. What does it mean if Snow, the second most visible face of the White House, can't provide at least a mild bump for Bush in the polls? It means that the press secretary really is the political equivalent of an offensive lineman -- the only time (s)he'll be noticed is when (s)he screws up.

Readers -- will Snow provide any bump for Bush at the polls?

posted by Dan at 09:33 PM | Comments (20) | Trackbacks (0)

What is so special about gas prices?

Brad DeLong provides the most concise and correct analysis of the political economy of gas prices I've ever seen:

Democrats are (because of the environmentalist wing of the party) generally in favor of higher gasoline taxes and higher gasoline prices--except when gasoline prices are high). Republicans are in favor of letting oil markets "work"--except when gasoline prices are high.
The interesting question is why this is true. As Nick Shultz points out in Forbes, energy is an increasingly less important component to the American consumer (link via Glenn Reynolds):
According to the Bureau of Economic Affairs (see chart here), American consumer spending on energy as a fraction of total personal consumption has declined considerably since 1980. Whereas 25 years ago, one in every ten consumer dollars was spent on energy, today it's one in every 16. In other words, what it takes to heat and cool our homes and drive to and from our jobs and vacation destinations is relatively less costly than it was then.

This goes a long way toward explaining why even when gas prices rise this summer--higher than they were throughout the 1990s--people will still be driving more; it's much more of a value than it was a generation ago.

What's more, so-called energy intensity is declining rapidly. That means we produce more with less energy. According to, "The U.S. economy has undergone major structural changes over the last two decades, becoming more energy efficient, thus reducing its overall dependence on energy. … The energy intensity of the U.S. economy has declined by roughly 40% since the first oil crisis (as of 2001)."

Furthermore, as Virginia Postrel pointed out ten years ago, when the price of other commodities spike up, no one talks about it being a crisis:
The government interventions that distorted energy markets in the 1970s, and put drivers through hell, have disappeared.

This crisis isn't a crisis. It's just a price increase, the sort of signal consumers adjust to every day. No hysteria is called for.

So, here's my question to readers... why is a spike in gas prices considered such a political crisis?

[You're the political scientist... why don't you have an explanation?--ed.] I have one, but it's a bit loopy: gasoline is a unique commodity in three ways. First, it's tied into the politics of the Middle East, which allows media coverage to always give it that extra political twist... though during the Cold War, the only sources for platinum were the Soviet Union and South Africa, but no one fretted about the political implications.

Second, oil is one of the few commodities that's subjected to a supplier cartel... though I don't hear anyone besides myself complain about, say, the diamond cartel.

Third (and by far the loopiest), gasoline is the one commodity in which Americans of both genders possess close to full information. It's therefore the one commodity that might mobilize the mass public into seeking a political solution.

I place very little confidence in my explanation, however: readers are welcomed to chime in.

UPDATE: Megan McArdle weighs in with her thoughts, which match the commentators' point about the short-term price inelasticity of demand. While true, it avoids the point Schultz makes, which is that as a percentage of income, the current price spike is less traumatic than what happened thirty years ago.

So why the immediate political response? The best answer might be that whatever is being proposed now is still less intervenionist than what happened in the seventies (even/odd days, anyone).

posted by Dan at 11:59 AM | Comments (43) | Trackbacks (0)

Tuesday, April 25, 2006

My questions about the latest plagiarism scandal

I'm late to the party on the Kaavya Viswanathan scandal now unfolding at Harvard. Long story short -- a Harvard student who published a teen chick lit book -- How Opal Mehta Got Kissed, Got Wild, and Got a Life -- has been discovered to have cribbed from another chick lit writer, Megan McCafferty. Click here for examples of the plagiarism.

Viswanathan has now copped to the "unconscious" plagiarism. However, if this Newark Star-Ledger story by Vicki Hyman is accurate, Viswanathan must have been really unconscious when writing her book:

In a statement issued by her publicist yesterday, Viswanathan said she read and loved McCafferty's novels "Sloppy Firsts" and "Second Helpings," but said she was "very surprised and upset" to learn about the similarities between the two works and her debut.

"I am a huge fan of her work and can honestly say that any phrasing similarities between her works and mine were completely unintentional and unconscious," said Viswanathan, who signed a two-book deal with Little, Brown and Co., reportedly worth $500,000, following her high school graduation from Bergen County Academies in Hackensack.

She plans to revise the novel with publisher Little, Brown and Co. to eliminate the similarities, and apologized to McCafferty and to readers who felt misled.

Viswanathan could not be reached directly yesterday. But when asked in an interview with The Star-Ledger last week about what books may have helped inspire "Opal Mehta," Viswanathan said, "Nothing I read gave me the inspiration."

And, naturally, there's been some bizarre quasi-blogging behavior on this point as well.

While all of this makes for dishy reading, the fact that both my lovely wife and I focused on was the fact that Viswanathan got a two-book, $500,000 contract while she was in high school."

Here's my question about this scandal: why, exactly, would Little, Brown throw that much money at a young, unpublished author? Why would any publisher do that? I know the teen and chick lit markets are booming, but dear me, that seems like a lot of money to throw around.

posted by Dan at 11:35 PM | Comments (27) | Trackbacks (0)

The Labor Department (sort of) concedes the obvious on offshoring

I've debated a lot of people on the whole offshore outsourcing issue, and regardless of the position one takes, there has been unanimity on one subject: if the Labor Department provides Trade Adjustment Assistance to manufacturing workers displaced by trade, the program should be extended to include service-sector workers affected by offshore outsourcing.

According to this Paul McDougall story in Information Week, it appears that the Department of Labor has finally recognized this fact as well:

The federal government appears to have reversed a long standing policy that prevented thousands of "outsourced" computer programmers from collecting the same employment benefits routinely extended to factory workers who've seen their jobs disappear amid a flood of cheap, manufactured imports.

In a turnabout from earlier decisions, the Department of Labor—in a note published this month in the Federal Register—said that four employees of IT services vendor Computer Sciences Corp. that were laid off in 2003 from a facility in East Hartford, Conn., are eligible to apply for benefits under the Trade Adjustment Act. The act provides a number of relief measures for workers who've lost their jobs to cut-rate foreign competition, including extended unemployment payments, federally funded retraining, and relocation allowances.

The department has long held that programmers who've lost jobs to cheaper, foreign workers aren't eligible for the TAA program because their employers, or employer's customers, are not importing a physical good in the same way as, say, steel manufacturers. A number of federal and state lawmakers have introduced bills that would automatically grant eligibility under the act to IT workers and other white collar professionals, but none has become law.

The labor department initially said that although CSC moved production of its Vantage-One insurance software from East Hartford to CSC India, the software was not an imported "article" as defined by the act. In a lawsuit, the workers asked the U.S. Court of International Trade to overturn the department's ruling. In January, trade court judge Nicholas Tsoucalas ordered the department to revisit the case, noting that, "Labor's interpretation of the law, that software code must be embodied on a physical medium to be an article under the Trade Act, is arbitrary and capricious."

In a Federal Register note published April 11, the Labor Department conceded the point and ruled that the four CSC workers would be eligible to apply for TAA assistance. In ruling, the department said it would henceforth look upon software, whether shipped into the U.S. on a disc or transmitted into the country via telecommunications networks, as a physical product.

"Software and similar intangible goods that would have been considered articles for the purposes of the Trade Act if embodied in a physical medium will now be considered articles regardless of their method of transfer," the department wrote.

Here's a link to the notice in the Federal Register. The notice suggests the effect of the ruling is still limited:
The Department stresses that it will continue to implement the
longstanding precedent that firms must produce an article to be certified under the Act. This determination is not altered by the fact the provision of a service may result in the incidental creation of an article. For example, accountants provide services for the purposes of the Act even though, in the course of providing those services, they may generate audit reports or similar financial documents that might be articles on the Harmonized Tariff Schedule of the United States. Because the new policy may have ramifications beyond this case of which the Department is not fully cognizant, the new policy will be further developed in rulemaking.

posted by Dan at 09:15 AM | Comments (8) | Trackbacks (0)

Monday, April 24, 2006

Osama's latest tape

Initial reports suggest that Osama bin Laden's latest tape doesn't seem to have had much of an impact. In the tape, Bin Laden talked about how the West was destroying Palestine and Sudan. According to this Washington Post by Craig Whitlock, terrorism experts seemed unconvinced:

Counterterrorism analysts said bin Laden was trying to portray himself as a champion of oppressed Muslims around the world, even though al-Qaeda has avoided involvement in many of the conflicts that he has decried. For example, bin Laden has largely ignored events in Sudan since he and his network were expelled from the country a decade ago. Similarly, al-Qaeda has no record of activity in the Palestinian territories.

"Bin Laden is a master craftsman at recognizing issues and knowing how to exploit these issues for his own purposes," said M.J. Gohel, a London-based analyst and chief executive of the Asia-Pacific Foundation, a security policy group. "He's trying to enlarge the global conflict and is trying to incite and anger the Muslim world against the West."

Bruce Hoffman, a terrorism specialist and director of the Washington office of the Rand Corp., a California-based research group, said al-Qaeda is confronting the same challenge that all terrorism networks face: how to remain relevant as a radical movement over time.

"It's entirely cynical," he said of bin Laden's rallying cry on behalf of Darfur and Hamas. "He's got to say something about someplace. They've got to keep talking or else they're going to be irrelevant, especially when they're not directly involved in the fighting."

"These are contentious contemporary issues that he can glom onto and milk for his own ends," Hoffman added. "It's more rhetorical than factual. Bin Laden is no friend of the Sudanese. They told him to leave in 1996 and took his money. And Hamas has basically told al-Qaeda to mind its own business."

Counterterrorism officials and analysts said al-Qaeda's leaders have also become more outspoken in recent months because they fear losing their influence in the fragmented world of Islamic fundamentalism. Bin Laden and his deputy, Ayman al-Zawahiri, an Egyptian physician, have been effectively sidelined since the Sept. 11 attacks while other radical groups and figures, such as Hamas and Jordanian fighter Abu Musab al-Zarqawi in Iraq, have stolen the limelight, the analysts said.

Indeed, the BBC reports that bin Laden's message "has been disowned by the Sudanese government and Hamas." Marc Lynch notes that, "[This is] a fairly typical example of the refusal of many entrenched Islamist movements to accept al-Qaeda's claims to lead the Islamist umma."

So this would seem to fit with Al Qaeda's slow descent into Tampa Bay Devil Rays metaphor territory (though, to be fair, at least the D-Rays are now under new management). The real test, however, will be to see whether anyone heeds bin Laden's call for attacks on Western citizens.

Question to readers: if there is no spectacular terrorist attack in the next year -- on a par, say, with either the London or Madrid bombings -- is it safe to say that the threat from Al Qaeda should be seriously downgraded?

UPDATE: Alas, the Egyptian bombing is tragic, but does not exactly fit the parameters of what I was asking.

posted by Dan at 12:54 PM | Comments (17) | Trackbacks (0)

Sunday, April 23, 2006

An interesting weekend for global economic governance

The Financial Times has a few stories on the ups and downs of global economic negotiations. Negotiations about trade barriers appear to be going in one direction, while negotiations about global imbalances seem to be going forward.

Frances Williams reports on the backtacking on Doha:

Pascal Lamy, director-general of the World Trade Organisation, will on Monday ask WTO members to work for a crucial deal on farm and industrial goods by early summer, after key trading powers acknowledged their self-imposed April 30 deadline was out of reach.

The meeting on Friday, attended by about 25 rich and poor WTO members agreed to call off plans for ministerial talks this week.

The US and European Union blamed each other for the setback. Peter Mandelson, EU trade commissioner, accused the US of lacking realism on agriculture, while the US trade representative’s office said it wished the EU would put the same energy into the negotiations as it did in finger-pointing.

In Geneva, diplomats said failure to agree detailed guidelines for cutting farm subsidies and agricultural and industrial tariffs was disappointing but not “the end of the world”.

On the other hand, the spring meeting of the IMF and World Bank seems to have produced a small breakthrough, according to Chris Giles and Krishna Guha:
Leading countries secured a breakthrough in the governance of the global economy at the weekend, transforming the role of the International Monetary Fund and putting it at the centre of a more co-operative effort to resolve trade imbalances.

The IMF was given a mandate to start immediate negotiations between the countries with the largest trade imbalances. Its goal will be to secure agreements to reform economic and exchange rate policies to close trade gaps and prevent a global financial crisis. If successful, it could lead to big changes in economic policies, including an appreciation of China’s renminbi.

Causes of global imbalances will come under the spotlight in the first IMF “multilateral consultation”, including low levels of US savings, the inflexibility of the Chinese exchange rate and surpluses in Japan, Germany and among oil producers. Participating nations will use the IMF as a forum to seek solutions to these problems.

Rodrigo Rato, IMF managing director, said the IMF’s analysis would be published, putting additional pressure on countries to agree, since it would not have any tools to force policy changes.

All IMF members, including China, supported the new procedures. IMF members also agreed that some emerging countries should be given greater ownership and voting rights.

Mr Rato said the changes to the fund’s purpose in addressing global imbalances was “a very important step in the role of the fund in tackling global imbalances but also in producing an encouraging, co-operative response to global issues”.

The US, in particular, is pleased at the growing recognition that its record trade deficit is the product of global forces, not just its own government deficit, and has to be resolved in a way that sustains global growth.

A senior US official said: “I think that surplus countries are beginning to understand that there will be no adjustment unless they are a part of it.”

Even senior G7 officials sceptical about the chances of progress were delighted.

Click on this companion story by Giles and Guha, which seems devoted to explaining why the deal is so great.

I need to look into the nature of the agreement a bit longer, but to indicate the daunting nature of what's involved here, consider this paragraph from the IMF communiqué:

Following the discussion at the Global Imbalances Conference held at the IMF on April 21, the Committee confirms that the agreed policy strategy to address imbalances remains valid. Key elements include raising national saving in the United States—with measures to reduce the budget deficit and spur private saving; implementing structural reforms to sustain growth potential and boost domestic demand in the euro area and several other countries; further structural reforms, including fiscal consolidation, in Japan; allowing greater exchange rate flexibility in a number of surplus countries in emerging Asia; and promoting efficient absorption of higher oil revenues in oil-exporting countries with strong macroeconomic policies. Given economic interlinkages, all countries and regions will have a role to play by increasing the flexibility of their economies and adapting to changing global demand patterns.
Accomplishing this kind of integrated policy outcome will require a minor miracle considerable international policy skills.

posted by Dan at 09:08 PM | Comments (1) | Trackbacks (0)