Archive

  • NAFTA. I've...

    NAFTA. I've always found the NAFTA debate a vastly complicated and hard to navigate discussion, full of competing -- and occasionally contradictory -- evidence that's violently spun by partisans of both ends. So I'm interested to see Berkeley economist Brad DeLong , a neoliberal and once-staunch NAFTA supporter, doing some soul-searching on why the agreement didn't unlock the magical market forces folks expected and catapult the country out of poverty. "Having witnessed Mexico�s slow growth over the past 15 years," he writes, "we can no longer repeat the old mantra that the neo-liberal road of NAFTA and associated reforms is clearly and obviously the right one." -- Ezra Klein
  • BRAZILIAN ELECTIONS.

    BRAZILIAN ELECTIONS. The elections in Brazil -- where Lula is headed for a run-off on October 29, have received some attention in the U.S. news media, but of course that coverage fails to make much of the context clear. Fortunately, we have a resource in an American academic blogger who goes by the handle Mr. Trend . Currently doing field work in Brazil, he's written on the racial context of the Brazilian electoral process, on the scandal affliciting Lula , on the debates and first round results , and finally on mainstream media coverage and what's at stake in the election . It's good stuff. I wish that he would write a bit about the foreign policy differences between the candidates, if any are evident. Brazil is a rather important player in South America, and has been pursuing a somewhat more assertive defense stance in the last decade. In particular, Brazil continues to make noises about building a nuclear powered submarine. Nevertheless, we can't have everything we want, and Trend...
  • U.S. AND EUROPEAN...

    U.S. AND EUROPEAN INEQUALITY. I think Greg Mankiw partially obscures the import of this graph comparing what high income and low income households make across developed countries. "The bottom line:" he writes . "The poor in the United States have about the same real income as the poor in western Europe. The rich in the United States, however, are much richer." Well, on pure income, that's true. But the poor in these countries have expansive, state-supplied health care, far better public transport options, lusher pensions, paid time off, longer vacations, and all the other luxuries and securities associated with the European welfare state, and not available to Americans till they climb significantly farther up the income ladder. In essence, that's the European trade off: A very high floor, with a significantly lower ceiling. America has quite the opposite: An astonishingly low floor, with a very high ceiling. We have an economy that's terrifically effective at maximizing gains for the...
  • IRAQI AIR FORCE.

    IRAQI AIR FORCE. Speaking of the air force, it's important to remember that air power, while hardly a panacea, certainly plays an important role in modern military operations. Although air power is less important to counter-insurgency conflicts than high-intensity wars, having control of the air and being able to deliver ordinance to targets never hurts. If the Iraqi government is to fight Iraqi insurgents, it will need an air force. Unfortunately, things aren't going so well on that front: The squadron's 15 Iraqi pilots and 39 other personnel operate four light aircraft donated by coalition countries -- two bulbous Seekers powered by a single pusher propeller and painted bright yellow, as well as two single-prop CH-2000s sporting a more conventional engine-in-front layout and gray paint. Both types carry infrared and daylight cameras for monitoring power and oil infrastructure and for spotting targets for other branches of the Iraqi military. The choke points seem to be a lack of...
  • SEDUCTIONS AND PERILS OF AIR POWER.

    SEDUCTIONS AND PERILS OF AIR POWER. Evidence cannot discredit revolutionary doctrine, as the revolutionaries simply interpret new evidence in whatever way they see fit. Air power enthusiasts have taken rather a hit lately, first with the failure of air power to tame Hezbollah in Lebanon (to the extent that the IDF did damage to Hezbollah, it was almost entirely with ground force), and second with the recent Lancet report suggesting that the use of air power, in spite of increased precision, had led to tremendous Iraqi civilian casualties.
  • The Unsustainable Cost of Maintaining the Roads in Front of the Washington Post

    Projections show that the combined cost of Medicare, Medcaid, and maintaining the roads and sidewalks in front of the Washington Post will increase by more than 8 percentage points of GDP by 2050. Clearly we cannot afford to maintain the roads and sidewalks. When will politicians have the courage to cut the budget for maintaining the roads and sidewalks in front of the Washington Post? Yes, David Broder did the old Medicare and Social Security trick again. (Projections show that Medicare's costs will explode over the next 40 years, the projected increase in Social Security spending is about the same as over the last forty years.) By the way, one of the "prominent non-aligned" economists who provided the background wisdom for Mr. Broder's article was David Lereah, the chief economist for the National Association of Realtors and the author of the 2005 bestseller, Are You Missing the Real Estate Boom? --Dean Baker
  • Will Technology Wipe Out Hollywood?

    Hal Varian (my former micro professor) has an interesting piece in the NYT about the impact on the entertainment industry of the declining cost of producing and distributing video material. The basic story is that free material (e.g. YouTube) drives out costly material (e.g conventional movies). The greater the availability of free material, the less time and money will be spent on costly material. As someone who wrote a free book ( The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer ), I strongly agree with my former prof on this one. --Dean Baker
  • The Costs of Protectionism: Another Prescription Drug Scandal

    The NYT reports on yet another incident in which the pharmaceutical industry has misrepresented research findings in an effort to promote one of its drugs. This is exactly the sort of corruption that economic theory predicts from a situation in which government patent monopolies give drug companies large monopoly rents. Unfortunately, almost no economists pursue this aspect of economic theory. While there is a vast body of research documenting the economic costs associated with 10 percent tariffs on shirts, economists don't believe it is worth their time to examine alternatives to patent protection for drugs that can raise the price above marginal cost by more than 1000 percent. Of course patent monopolies on prescription drugs cost both lives and money. Maybe one day economics will mature to the point where its practioners feel qualified to examine bigger issues than small tariffs. --Dean Baker
  • THE FRAUD CAUCUS FUND.

    THE FRAUD CAUCUS FUND. I have to agree with Ari Berman of The Nation that the logical underpinnings of Republicans Who Care are shaky at best. A bunch of decrepit moderate millionaire Republicans are jumping into the breach between their far-right party leadership and moderate districts to save members of the Fraud Caucus like Chris Shays and Deborah Pryce . They are reportedly supporting "Republicans who favor balanced federal budgets and believe government should take a hands-off approach on such issues as abortion." The silliness of this exercise should be self-evident by now: if you want to support a politician who believes in a balanced budget and a woman's right to choose you don't need to look for the proverbial Republican in a haystack, you can just support a Democrat. Indeed, if you really care about a balanced budget and a woman's right to choose, re-electing a Republican who happens to profess those positions is actually counter-productive to those ends, particularly in the...
  • FROM THE DECEMBER PRINT ISSUE: A LIBERAL MANIFESTO.

    FROM THE DECEMBER PRINT ISSUE: A LIBERAL MANIFESTO. Recently, Tony Judt wrote a piece for the London Review of Books entitled "Bush's Useful Idiots," which charged American liberals -- not "some" or "too many" American liberals, simply "American liberals" -- with "acquiesc[ing] in President Bush 's catastrophic foreign policy." The essay caused a big stir -- and made Todd Gitlin and Bruce Ackerman a bit mad. It inspired them to write this manifesto, a statement of liberal principles for the waning Bush era: " We Answer to the Name of Liberals ." Clearly this is a moment for liberals to define ourselves. The important truth is that most liberals, including the undersigned, have stayed our course throughout these grim five years. We have consistently and publicly repudiated the ruinous policies of the Bush administration, and our diagnosis, alas, has been vindicated by events. The Bush debacle is a direct consequence of its repudiation of liberal principles. And if the country is to...

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