Saturday, December 23, 2006

What the f%$@ was Sandy Berger thinking, redux

I was dumbfounded by Sandy Berger's theft of classified documents when it was originally reported, but was "willing to believe that Berger did not have nefarious motives."

The latest round of reporting makes that second part impossible. From the Associated Press:

President Clinton's national security adviser removed classified documents from the National Archives, hid them under a construction trailer and later tried to find the trash collector to retrieve them, the agency's internal watchdog said Wednesday.

The report was issued more than a year after Sandy Berger pleaded guilty and received a criminal sentence for removing the documents.

Berger took the documents in the fall of 2003 while working to prepare himself and Clinton administration witnesses for testimony to the Sept. 11 commission. Berger was authorized as the Clinton administration's representative to make sure the commission got the correct classified materials....

Inspector General Paul Brachfeld reported that National Archives employees spotted Berger bending down and fiddling with something white around his ankles.

The employees did not feel at the time there was enough information to confront someone of Berger's stature, the report said.

Later, when Berger was confronted by Archives officials about the missing documents, he lied by saying he did not take them, the report said.

Brachfeld's report included an investigator's notes, taken during an interview with Berger. The notes dramatically described Berger's removal of documents during an Oct. 2, 2003, visit to the Archives.

Berger took a break to go outside without an escort while it was dark. He had taken four documents in his pockets.

"He headed toward a construction area. ... Mr. Berger looked up and down the street, up into the windows of the Archives and the DOJ (Department of Justice), and did not see anyone," the interview notes said.

He then slid the documents under a construction trailer, according to the inspector general. Berger acknowledged that he later retrieved the documents from the construction area and returned with them to his office.

"He was aware of the risk he was taking," the inspector general's notes said. Berger then returned to the Archives building without fearing the documents would slip out of his pockets or that staff would notice that his pockets were bulging.

The notes said Berger had not been aware that Archives staff had been tracking the documents he was provided because of earlier suspicions from previous visits that he was removing materials. Also, the employees had made copies of some documents.

In October 2003, the report said, an Archives official called Berger to discuss missing documents from his visit two days earlier. The investigator's notes said, "Mr. Berger panicked because he realized he was caught."

The notes said that Berger had "destroyed, cut into small pieces, three of the four documents. These were put in the trash."

For more details click here and here. This is the kind of case where the accused either pleads incompetence or malevolence. In this case, he might have to go with both.

Question to readers: will this new news cycle in any way affect Berger's current venture, Stonebridge International?

UPDATE: Pajamas Media has posted the Inspector General's report online.

posted by Dan at 09:18 AM | Comments (7) | Trackbacks (0)

Friday, December 22, 2006

Five things you don't know about me

Eszter Hargittai has tagged me with the "Five-Things-You-Didn't-Know-About-me" meme. So, here goes, in chronological order:

1) From the ages of eight to sixteen, I wore glasses before switching to contact lenses. Not a big deal, except that my glasses were housed in the most hideous-looking square peuter frames you could possibly imagine.

To this day my parents insist that those frames were "cute." After showing picture of myself from that era to many, many people, I have yet to find anyone who agrees with them.

2) In the seventh grade, I placed third in the Connecticut State Science Fair.

3) In the early eighties, my brother and I used to drive our mother crazy by our near-religious devotion to The A-Team. A few minutes before it would come on, we would loudly hum the theme song and then listen to Mom complain about the decline and fall of Western civilization.

4) As a grad student at Stanford, I had a thoroughly pleasant lunch with Jennifer Connelly. [Um, that's it?--ed. Alas, there's nothing else to report.]

5) A few years later, I was on a date with a woman who was not Jennifer Connelly. I found myself in the rare circumstance of being less interested in her than she was in me. Fortunately, the conversation turned to politics. At this point, I went out of my way to mention my membership in the Republican Party.

The date ended early.

OK, I tag Jacob Levy, Laura McKenna, Dan Nexon, Kevin Drum, and Megan McArdle.

posted by Dan at 08:01 PM | Comments (9) | Trackbacks (2)

You mess with the wheat, you'll get the chaff

The Washington Post wraps a series on federal farm subsidies with a story by Dan Morgan, Sarah Cohen and Gilbert M. Gaul on what happens when you mess with the trough. This part of the story goes back to 2001, and does something I would not have thought possible -- it makes me sympathize with Karl Rove:

One of the most remarkable examples of the farm lobby's power came in 2001 and 2002, when the existing farm bill was written, expanding payments again over the opposition of the White House and key lawmakers. Reformers see it as a cautionary tale.

The architect of the legislation was Rep. Larry Combest, an aggie through and through, a West Texas Republican who came from three generations of cotton farmers and who took control of the House Agriculture Committee in 1999.

Others on Combest's committee included a cattle rancher and tobacco farmer from Tennessee, a Missouri corn and hog farmer, and a government-subsidized rice farmer from Arkansas. The ranking Democrat, Charles W. Stenholm of Texas, had an ownership interest in cotton farms that got more than $300,000 in subsidies between 2001 and 2005, USDA records show.

With help from a generous mandate from the House Budget Committee -- chaired by Jim Nussle (R-Iowa) -- Combest produced a new farm bill in 2001 authorizing an eye-popping $50 billion, 10-year increase in price supports and income supports for farmers. He boasted that the measure was "a major step away from Freedom to Farm."

For one thing, the bill restored a key pillar of the pre-1996 program: cash payments that compensate for low crop prices. Thousands of farms were eligible even if they never grew crops. Budget officials estimated that change alone would cost $37 billion over a decade.

The Bush White House disliked Combest's bill. Chief political adviser Karl Rove saw it as the antithesis of fiscal responsibility. "We're Republicans," aides remember Rove grumbling. The White House budget office issued a stinging critique, saying the bill was too costly and failed to help farmers most in need.

Combest also faced strong opposition from a disgruntled group of Eastern and Midwestern lawmakers, and from senators who wanted tighter limits on what a farm could collect each year.

But Combest had a strong hand. "He hijacked the process," said a former USDA official who spoke on the condition of anonymity because he still deals with Congress.

At a meeting in Rove's office soon after the Sept. 11, 2001, attacks, Combest delivered a warning, according to several people with knowledge of the session. Unless the administration backed off, Combest warned, he and his farm-bloc allies would sink a top priority of President Bush's: legislation giving the president a free hand to negotiate a global trade treaty strongly favored by big corporations. "You have to ease up," one participant remembers Combest saying.

Over the next several months, the administration laid off its public criticism of Combest's farm bill. Combest withdrew his opposition to trade-promotion authority, and it squeaked through the House by a single vote. He declined to comment for this article.

posted by Dan at 07:44 PM | Comments (2) | Trackbacks (1)

Thursday, December 21, 2006

My governor-elect needs some economics tutors... badly.

Greg Mankiw explains.

posted by Dan at 06:27 PM | Comments (7) | Trackbacks (0)

A bad week for Ahmadinejad

I was on Hugh Hewitt's radio show on Tuesday evening to talk, ostensibly, about my Washington Post essay on grand strategy. We wound up talking about Iran mostly. You can read the transcript here. Hewitt is of the belief that the U.S. cannot afford even a small risk of someone like Ahmadinejad possessing nuclear weapons. I am of the belief that Ahmadinejad is not that as powerful inside Iran as Hewitt believes.

It's been a good week for my argument. First, there are election returns:

Opponents of Iran's ultra-conservative president won nationwide elections for local councils, final results confirmed Thursday, an embarrassing outcome for the hardline leader that could force him to change his anti-Western tone and focus more on problems at home.

Moderate conservatives critical of President Mahmoud Ahmadinejad won a majority of seats in last week's elections, followed by reformists who were suppressed by hard-liners two years ago.

The vote was widely seen as a sign of public discontent with Ahmadinejad's stances, which have fueled fights with the West and led Iran closer to U.N. sanctions....

The election does not directly effect Ahmadinejad's administration and is not expected to bring immediate policy changes. The local councils handle community matters in cities and towns across the country.

But it represented the first time the public has weighed in on Ahmadinejad's stormy presidency since he took office in June 2005. The results are expected to pressure him to change his populist anti-Western tone and focus more on Iran's high unemployment and economic problems at home.

Leading reformist Saeed Shariati said the results of the election was a "big no" to Ahmadinejad and his allies.

"People's vote means they don't support Ahmadinejad's policies and want change," Shariati, a leader of the Islamic Iran Participation Front, Iran's largest reformist party told The Associated Press on Thursday.

Similar anti-Ahmadinejad sentiment was visible in the final results of a parallel election held to select members of the Assembly of Experts, a conservative body of 86 senior clerics that monitors Iran's supreme leader and chooses his successor.

A big boost for moderates within the ruling Islamic establishment was visible in the large number of votes for former President Hashemi Rafsanjani, who lost to Ahmadinejad in the 2005 presidential election runoff.

Rafsanjani, who supports dialogue with the United States, received the most votes of any Tehran candidate to win re-election to the assembly. Also re-elected was Hasan Rowhani, Iran's former top nuclear negotiator whom Ahmadinejad repeatedly accused of making too many concessions to the Europeans.

Then you've got your student protestors -- Nazila Fathi explains in the New York Times:
The student movement, which planned the 1979 seizure of the American Embassy from the same university, Amir Kabir, is reawakening from its recent slumber and may even be spearheading a widespread resistance against Mr. Ahmadinejad. This time the catalysts were academic and personal freedom.

“It is not that simple to break up a president’s speech,” said Alireza Siassirad, a former student political organizer, explaining that an event of that magnitude takes meticulous planning. “I think what happened at Amir Kabir is a very important and a dangerous sign. Students are definitely becoming active again.”

The protest, punctuated by shouts of “Death to the dictator,” was the first widely publicized outcry against Mr. Ahmadinejad, one that was reflected Friday in local elections, where voters turned out in droves to vote for his opponents.

The students’ complaints largely mirrored public frustrations over the president’s crackdown on civil liberties, his blundering economic policies and his harsh oratory against the West, which they fear will isolate the country.

But the students had an additional and potent source of outrage: the president’s campaign to purge the universities of all vestiges of the reform movement of his predecessor, Mohammad Khatami....

[Babak] Zamanian, the head of public relations of the Islamic Association at Amir Kabir, said that while the situation had not been ideal in the Khatami years, Mr. Ahmadinejad’s antireformist campaign had led students to value their previous freedoms.

They were permitted to hold meetings and invite opposition figures to speak, he said, and could freely publish their journals. Now, he said, their papers are forbidden to print anything but reports from official news agencies.

The students also complain about the president’s failure to deliver economic growth and jobs. At last week’s protest, which coincided with a now infamous Holocaust conference held by the Foreign Ministry, students chanted, “Forget the Holocaust — do something for us.”

Well, it's going to be tougher for Ahmadinejad to boost economic growth is more foreign direct investment doesn't come through. The Financial Times' Najmeh Bozorgmehr and Roula Khalaf report that this is now a problem:
Iran’s oil minister on Wednesday admitted that Tehran was having trouble financing oil projects, in a rare acknowledgment of the economic cost of its nuclear dispute.

“Currently, overseas banks and financiers have decreased their co-operation,” Kazem Vaziri-Hamaneh told the oil ministry news agency, Shana.

The statement underlined the impact of de facto financial sanctions on the Organisation of the Petroleum Exporting Countries’ second biggest oil producer. As the controversy over Iran’s nuclear programme has escalated, the US has applied pressure on European banks and financial institutions to curb dealings with Tehran.

The fact that the UN Security Council could soon impose the first – even if mild – sanctions against Iran has compounded the political uncertainty and risks of doing business with Tehran. Iranian officials insist there is international interest in investing in Iran’s oil industry and European executives play down any impact on companies seeking deals in Iran....

“There’s a growing awareness that de facto sanctions are beginning to hurt and everyone understands the future of the economy depends on the development of oil and gas,” said a western diplomat. “Banks are not lending, partly because of US pressure, but the banks are also drawing their own conclusions.”

The Security Council should be approving sanctions today.

None of this means that Ahmadinejad will disappear tomorrow. It does mean, however, that the president of Iran will be worrying about more than being "insulted" by student protests.

posted by Dan at 08:49 AM | Comments (6) | Trackbacks (0)

The dictator for life is dead

If there were a contest for wackiest dictator in the world, many Vegas oddsmakers would have made Kim Jong Il the putative frontrunner. In truth, however, until today the hands-down winner would have been Turkmenistan president Saparmurat Niyazov:

He renamed the town of Krasnovodsk, on the Caspian Sea, Türkmenbaşy after himself, in addition to renaming several schools, airports and even a meteorite after himself and his immediate family. He even named the months, and days of the week after himself and his family. Niyazov's face appears on Manat banknotes and large portraits of the president hang all over the country, especially on major public buildings and avenues. Statues of himself and his mother are scattered all over Turkmenistan, including one in the middle of the Karakum Desert as well as a gold-plated statue atop Ashgabat's largest building, the Neutrality Arch, that rotates so it will always face into the sun and shine light onto the capital city. Niyazov commissioned a massive palace in Aşgabat commemorating his rule. He was given the hero of Turkmenistan award five times. "I'm personally against seeing my pictures and statues in the streets - but it's what the people want," Niyazov said.
The Independent has more on the Niyazov looniness:
He renamed the month of January after himself and April after his mother and banned ballet, gold teeth and recorded music. A planet of the Taurus constellation, a crater on the Moon and a mountain peak were other things named after him....

Like the khans who once ruled this long-nomadic land, Niyazov ran Turkmenistan from an office draped with carpets that made it look like a nomad's tent. When foreign leaders met him he often presented them with a horse.

In 1999, the Turkmen parliament elected him president for life. Which apparently lasted only seven years. The Financial Times has his obit:
Saparmurat Niyazov, the president of Turkmenistan, has died leaving the gas rich Central Asian republic he had ruled for over twenty years impoverished, internationally isolated and with no obvious successor.

Niyazov, known as Turkmenbashi, or Ruler of the Turkmens, died of cardiac arrest in the early hours of Thursday morning, according to a statement broadcast by Turkmenistan state television.

“The people of Turkmenistan will continue to pursue the political course of Saparmurat Turkmenbashi at this difficult moment”, the statement said.

Niyazov, who was appointed president for life by Turkmenistan’s Majlis, or parliament, in 1999, was 66 years old. He admitted earlier this year that he suffered from heart disease, but no successor was named.

Niyazov was a hardline dictator who established a bizarre personality cult in Turkmenistan, a largely desert republic bordering Afghanistan, Iran and Uzbekistan. The opposition has been brutally crushed and there is no independent media.

Western diplomats have expressed concern that frequent government purges ordered by Niyazov have denuded Turkmenistan’s administration of officials capable of ruling the republic or its industries.

Western diplomats are right to be concerned -- it's going to be an interesting few weeks ahead in Ashgabat.

Whether this translates into a few interesting weeks for global energy markets remains to be seen.

posted by Dan at 08:06 AM | Comments (1) | Trackbacks (0)

Tuesday, December 19, 2006

How good is the data on Giuliani?

I received an e-mail today about the join Rudy website. This triggered a question that's been in the back of my head since I read Ryan Sager's The Elephant In The Room. Sager mentioned in the book that in a 2005 CPAC straw poll, Rudy Giuliani was the co-leader. Given CPAC is probably to the right of Guliani on every social issue known to man, this was a bit of a surprise. And somewhere in my brain I've been registering this kind of support for Giuliani in various straw polls.

So along comes this Washington Post story by Michael Powell and Chris Cillizza, saying, essentially, that Giuliani has no shot in hell of getting the GOP nomination:

His national poll numbers are a dream, he's a major box office draw on the Republican Party circuit, and he goes by the shorthand title "America's Mayor." All of which has former New York mayor Rudolph W. Giuliani convinced he just might become America's president in 2008.

He is showing the early signs of a serious candidacy: Giuliani's presidential exploratory committee throws its first major fundraiser in a hotel near Times Square on Tuesday evening, and he recently hired the political director of the Republican National Committee during 2006. A Washington Post-ABC News poll released last week found that Republicans give Giuliani an early lead over Sen. John McCain of Arizona, who is far ahead of the former mayor in organizing a national campaign.

Despite that lead, conservative party strategists and activists in key primary states are skeptical and warn that the socially liberal Republican faces a difficult campaign. They question whether a Republican who has had one marriage end in annulment and another in divorce, and favors abortion rights, gun control and immigrant rights, has much retail appeal in the evangelical and deeply conservative reaches of the GOP.

"If the Republican Party wants to send the social conservatives home for good, all they have to do is nominate Rudy Giuliani," said Rick Scarborough, a Southern Baptist minister and president of Vision America. "It's an insult to the pro-Christian agenda. . . . He's going to spend a lot of money finding he can't get out of the Republican primaries."

Scarborough's statement is not surprising. However, Hugh Hewitt thinks Scarborough is wrong:
There is an advantage in doing scores of events for radio audiences and Republican activists over the past two years: At each of them I get to conduct my straw poll. In early 2005, I offered audiences the right to vote for one of five possible nominees --Senators Allen, Frist or McCain, Mayor Giuliani, or Governor Romney.

Two years ago, Senator Allen usually won, but Mayor Giuliani was occasionally on top of the poll --the older the audience, the better he did-- though usually he came in second.

By the dismal end of the 2006 campaign season --and I have only done one large event since the election-- Rudy always wins and Romney is always second, and it is usually close. Before he dropped out Senator Frist had close to zero support, and Senator McCain usually gets about 2%.

From the rest of Hewitt's post it seems like he's a Romney booster, so the fact that he said this about Giuliani is telling.

Or is it? Is the WaPo right and online commentators like Hewitt and Sager are wrong? The National Journal's Blogometer thinks it's the latter. But Glenn Reynolds notes:

I caught a bit of Hannity's show on XM today, and there seemed to be a lot of enthusiasm for Rudy Giuliani from conservative callers there. That's happened before. Maybe the larger GOP base isn't as socially conservative, at least in the context of the 2008 Presidential election, as people think.
Now is normally the time when I offer my sage bits of wisdom on the matter.... and I've got nothing. I don't know how much to trust the data. It's all anecdotal, except for straw polls, which at this stage of the campaign are only a slight bump above anecdotal.

Do any readers believe that Giuliani's popularity with the GOP base is anything other than an ephemeral phenomenon? Will they continue to support a man who endorsed Mario Cuomo for governor in 1994? If so, why?

UPDATE: Yes, I misspelled Giuliani's name in my original post. So sue me.

posted by Dan at 10:04 PM | Comments (21) | Trackbacks (9)

So how are the capital controls going?

Note to self: if I ever instigate a coup in a Pacific Rim country, do not attempt to impose capital controls three months later:

Thailand was forced into an astonishing retreat from its controversial move to impose controls on equity investment by foreign investors after Bangkok shares suffered their steepest one-day plunge since 1990.

Just a day after introducing the controls, a rattled Thai government announced on Tuesday that it would exempt equities from the measures, although it would still maintain curbs for bonds and other debt instruments.

The sudden reverse followed crisis talks between the central bank, government and stock market officials after Thai shares tumbled by as much as 19 per cent at one point as shocked investors rushed to dump stocks. The sell-off forced the Bangkok Stock Exchange to impose its first suspension of trading before shares eventually closed down 15 per cent.

Other equity markets in the region fell in sympathy, providing investors with a catalyst to take profits after recent sharp gains. Mumbai fell by 2.5 per cent, Jakarta by 2.8 per cent and Singapore by 2.2 per cent.

However, foreign investors played down the prospect of contagion to other countries, saying the sell-off was driven by dismay over a move that was unlikely to be repeated elsewhere.

“The Thai authorities seem intent on committing financial hara-kiri,” said Christopher Wood, chief strategist at CLSA.

Mark Williams, manager of the F&C Pacific Growth Fund, said Tuesday’s share-price falls were overdone and that he expected a strong bounce on Wednesday.

But he said Thailand’s “macro mismanagement” would leave lasting damage on the country’s credibility with international investors.

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

The China mystery

The great Henry Paulson-led expedition to China ended a few days ago, and beyond the purchase of a few nuclear reactors, it's not clear that any policy movement took place. Indeed, the most notable event of the trip was what Fed Chairman Ben Bernanke planned to say but did not actually say:

Federal Reserve Chairman Ben S. Bernanke urged China to let its currency gain at a faster pace to end a "distortion'' that benefits exporters.

Bernanke in a speech at the Chinese Academy of Social Sciences edged away from his prepared remarks, which called an "undervalued'' yuan an "effective subsidy'' for exports. Using the subsidy label would have implications for China's compliance with World Trade Organization rules and could feed Congressional pressure to impose trade sanctions, analysts said.

Brad Setser decides to tread where Bernanke does not:
Bernanke doesn’t connect the surge in China’s exports to the real depreciation of the dollar, and the real depreciation of the RMB, but I will. The RMB's link to the dollar is a bigger political issue in the US than in Europe, but China’s exports to Europe have actually grown faster than its exports to the US over the past few years....

The RMB’s de facto link to the dollar has become a major distortion in the world economy. But I do worry that the issue has now been framed in a way that makes any appreciation of the RMB – a move that many think is in China’s own interest – appear to be a concession to the US.

I also worry though that China’s emphasis on its own sovereign rights -- including its own sovereign right to peg to the dollar and subsidize the US Treasury -- misses a key point. China is no longer a small part of the world economy. China, inc single-handedly may finance about 1/3 of the US current account deficit in 2007. Its domestic policy choices increasingly impact the world. China's policy choices are a growing concern of the rest of the world.

However, it's what Setser says in this post that caught my attention:
Right now, China is worried about too much growth and an overheated economy, not too little growth. A stronger RMB could substitute for administrative controls on investment. Rather than leading to slower growth, a stronger RMB might help to rebalance the basis of Chinese growth.

In the past few months, China has used a host of measures -- limits on bank lending, delays approving big projects and the like -- to slow investment. With strong exports and a rapidly rising trade surplus contributing strongly to China's current growth (see Nick Lardy), China in sense has been forced to take steps to curb domestic demand growth to keep China's economy from overheating....

If exports weren't growing so fast -- the World Bank expects net exports will contribute 3 percentage points to q3 growth in China -- China's macroeconomic policy high command would have more scope to let the components of domestic demand rise more rapidly. There would be less of a (macroeconomic) case for restraining investment. China could let the banks lend out some of the spare cash, rather than forcing them to lend those funds to the central bank. And the government could take a host of policy steps to stimulate consumption without worrying about overheating.

My take is similar to Brad's -- China's economy would be better diversified if more of its growth came from domestic consumption, China's environment would be better off if growth slowed down by a percentage point or two, and the exchange rate is one of the few non-administrative policy options available.

So, the question is, why isn't China pursuing this course of action? A few possibilities:

1) Interest group politics exist in China, and the export lobby is very powerful. That's the implicit argument in this Steven Weisman piece for the NYT:
American officials and specialists on China have said that Wu Yi, a vice prime minister and the country’s highest-ranking female official, might not have the inclination, or the influence, to challenge the party apparatus that is tied to the sprawling state-owned export industries....

“I’m not expecting any miracles,” said Yu Yongding, director of the Institute of World Economics and Politics at the Chinese Academy of Social Sciences in Beijing.

“This visit by Mr. Paulson will have some influence on Chinese political leaders, but China always prefers gradualism,” he said....

“I have been arguing for a change in economic policy for years, but my voice is quite lonely,” Mr. Yu said. He added that however understanding Ms. Wu might be, she and the Communist Party are largely beholden to China’s export sector, which accounts for more than a third of the country’s economy (emphasis added).

2) The Chinese leadership is worried about domestic political stability: Howard French's story about Shenzen in today's New York Times
Shenzhen owed its success to a simple formula of cheap land, eager, compliant labor and lax environmental rules that attracted legions of foreign investors who built export-based manufacturing industries. With 7 million migrant workers in an overall population of about 12 million — compared with Shanghai’s 2 to 3 million migrants out of a population of 18 million — Shenzhen became the literal and symbolic heart of the Chinese economic miracle.

Now, to other cities in China, Shenzhen has begun to look less like a model than an ominous warning of the limitations of a growth-above-all approach.

While grueling labor conditions exist in many parts of China, Shenzhen’s gigantic plants, employing as many as 200,000 workers each, have established a particular reputation for harshness among workers and labor advocates. Monthly turnover rates of 10 percent or more are not uncommon, labor groups say.

The tough working conditions, in turn, have helped spawn one of the most important labor developments in China in recent years: large-scale wildcat strikes and smaller job actions for better hours and wages....

Increasingly short of workers, factories recently have increased assembly-line wages by as much as 20 percent. But even so, critics say, Shenzhen’s boom has spread little wealth.

While the city is dependent on migrant labor to keep its factories running, onerous residency rules discourage migrants from settling here permanently and make it difficult for them to obtain public services from education to health care.

“The government has evaded its responsibilities toward migrant workers,” Jin Cheng, a member of an influential local civic forum, Interhoo, said bluntly.

The resulting rootlessness has fed a wave of crime of a sort hardly ever seen elsewhere in China. Gunfights, kidnappings and gang warfare are rife, and crime rates are skyrocketing.

Although the city does not publish crime data, the Southern Metropolitan News, one of the most reputable Chinese newspapers, reported that there were 18,000 robberies in 2004 in Baoan, one of six districts in Shenzhen. By comparison, in Shanghai, a city of around 18 million, there were only 2,182 reported robberies for all of 2004, according to figures compiled by the city....

“Shenzhen may seem prosperous,” a worker said, sitting in his bunk in a steamy dormitory, “but it’s a desperate place.”

While the story makes it clear that China's government and regions have rejected Shenzen model going forward, the problem is that it's still the policy in Shenzen and other coastal megalopolises. Shifting away from this paradigm will not be easy, and China's administrative controls are of limited use. If crime and labor unrest are a problem with 10% growth, what happens if growth slows down?

It would be a grand irony if Marx's prediction of a proletariat uprising were to take place in China.

3) China views the world through a relative gains lens. This is what realists have been claiming for some time. The problem with this argument is that China's growth is too export-dependent -- a realist would be much more comfortable with domestic-led growth. Still, it's a possibility to consider.

Readers are encouraged to offer their answers to the China puzzle.

posted by Dan at 09:08 AM | Comments (6) | Trackbacks (0)

Your holiday quote of the day

From Jane Galt:

It's the holiday season in New York, which means the festive sight of twenty-somethings decorating the early morning streets with the former contents of their stomachs.
I strongly suspect that many New Yorkers will vent about this during the celebration of this holiday.

posted by Dan at 09:02 AM | Comments (1) | Trackbacks (0)

Monday, December 18, 2006

Virtual Posner

Richard Posner's avatar recently gave a lecture in Second Life. New World Notes provides a transcript. Among my favorite parts:

Suddenly, a large wooden cube materializes in the middle of the auditorium, blocking Judge Posner from the audience-- an apparent griefer attack on the event, or the Judge himself.

[Posner]: That's an example of the kind of threat that worries me-- a huge box marching through an amphitheatre.

The audience laughs while chaos ensues, during which Hamlet Au briefly crashes out of the world, and the Judge notices an audience member:

JRP: Is that a raccoon?

Kear Nevzerov: I'm a "furry". Not sure how I got this way.

[Posner]: I think it's Al Qaeda.

KN: I'm really an IP lawyer from DC. Honest.

[Posner]: I like your tail.

Hat tip: Will Baude.

posted by Dan at 01:54 PM | Comments (0) | Trackbacks (0)

Mahmoud Ahmadinejad, social constructivist

As the dust settles on Mahmoud Ahmadinejad's Holocaust conference from last week, it's becoming clear that Ahmadinejad sees the world through the lens of social constructivism.* As this Time inteview suggests, for Ahmadinejad there is a direct link between a conference on the Holocaust and Iran's current foreign policy:

Q: You've just held a conference questioning the Holocaust. Why not hold a peace conference instead? You could invite the Israelis and Palestinians to talk about peace, instead of what happened 60 years ago.

A: As a matter of fact this conference was in line of peace. Because for the past 60 years, the Palestinian people have been suppressed using the Holocaust as the pretext. If the issue of the Holocaust became clear, the issue would be solved.

When the issue becomes clear, and understood that the Holocaust does not have any relationship with the Palestinian people, then we will have two proposals for the Western and European countries. The first solution is that in the same way that you mounted this regime in the past, you can remove it yourself. You know well that the Holocaust has nothing to do with the Palestinian people. That was just a pretext to create this regime. And it was not a good excuse. Just cease to support it. Don't use your people's money to assist this violent regime. This is the best solution. If they do not accept the first solution, then they should allow the nation of Palestine to make their decision about its own fate. Anyone who is a Palestinian citizen, whether they are Christian, Jewish or Muslim, should decide together in a very free referendum. There is no need for war. There is no need for threats or an the atomic bomb either.

Q: Israel isn't going to accept any of this.

A: If the American and British government do not support and help them, and they stop using their power and influence they will accept.

This comes through in BBC reporter Frances Harrison's personal reflections on the conference as well (worth reading in their entirety to comprehend Harrison's revulsion at the whole exercise):
[One presenter] summed up his argument succinctly. He claimed there were no gas chambers at all - millions of Jews did not die - therefore there was no holocaust.

And if there was no Holocaust then there was no justification for the creation of the state of Israel. Therefore Israel was an impostor.

It had all the simplicity of a mathematical proof - refuting the worst genocide in living memory and absolving one of the most evil and wicked regimes in history of its crimes against humanity.

So this was the aim of the conference for Iran - to undermine the very argument for the existence of Israel.

The Ahmadinejad administration is not the only one to buy into a social constructivist foreign policy. And, like these other administrations, Ahmadinejad will run into two major constraints to his approach:
1) There are limits to social construction when brute facts are involved. Ahmadinejad's assumption, for example, that the Israeli government has no material power of its own borders on delusional.

2) Even institutions and ideas that are socially constructed are not easy to change. Ahmadinejad's quixotic quest to question the Holocaust succeeded in bringing "a small clique of apologists for the Third Reich with only fringe appeal," in Harrison's words, to Tehran. It will have no effect on the epistemic community of historians who have pretty much concluded that the Holocaust is a material fact.

If only Ahmadinejad had done some more reading in international relations. Ah, well, my hunch is that Ahmadinejad will start feeling the effects of his policies right about now.

* Readers should not come to the conclusion from this assertion that just because I'm saying Ahmadinejad is attempting a constructivist gambit, all academic approaches to social constructivism are evil, wrong, etc. I'm sure some will, however.

posted by Dan at 08:48 AM | Comments (15) | Trackbacks (0)

Sunday, December 17, 2006

In your face, everyone else!!!!

Time tells me what my ego wants to hear:

[F]or seizing the reins of the global media, for founding and framing the new digital democracy, for working for nothing and beating the pros at their own game, TIME's Person of the Year for 2006 is you.
Hah!! I knew it!!! I knew I was Person-of-the-Year material!! Take that, Mahmoud Ahmadinejad -- you couldn't do better than second!! Go suck an egg, George W. Bush!! Daniel Craig, I don't care any more that my wife really, really liked that bathing suit scene in Casino Royale. I'm the king of the world!!!!

[Um... you know they meant "you" in the global sense--ed.] Oh.... never mind.

UPDATE: Ann Althouse believes this gambit is "unbelievably dorky." I wouldn't go that far. It's certainly amusing -- I couldn't stop laughing when I first read it. Beyond the instinct to giggle and the God-awful bubble-headed prose, however, there is the core of an idea worth expanding into a popular book -- the idea of production by consumption.

For a wide variety of products, traditional consumers now add value by mixing, matching, riffing, sampling, commenting, critiquing, customizing, and mutating goods and services. In the process, value-added is created. It's an interesting phenomenon, and someone like Virginia Postrel or Robert Wright or James Surowiecki or Steven Johnson should take the idea and run with it -- they'd have to do better than Time.

UPDATE: William Beutler predicted Time would do this back in October.

posted by Dan at 12:11 PM | Comments (4) | Trackbacks (2)