Archive

  • Inviting China to the I.M.F.: Too Late

    Like the exclusive WASP-only country club that opens the door to blacks and Jews after it can no longer raise the money to fix the roof, the I.M.F. is inviting China to play a larger role. The problem is that it is far too late to invite China to be a junior partner in this U.S. dominated institution, a fact that would be more apparent if reporters recognized the true size of China�s economy. The I.M.F. has been used by the United States to enforce a creditors� cartel against countries that did not follow an economic path that fit the interests of major U.S. corporations. The basic story is that the I.M.F. would lay out an economic program and if countries didn�t follow it, they would be denied credit by not only the I.M.F., but also the much larger World Bank, as well as other international development agencies. In general the private sector would follow suit. The power of the I.M.F. was best illustrated in the East Asian financial crisis, when it imposed harsh conditions, requiring...
  • Not Your Father's Recession

    Virtually all economists missed the 2001 recession, in most cases not even predicting it until it was almost over. The main reason was that the recession did not follow the usual pattern. It was the result of the stock market crash decimating tech investment. All prior post-war recessions had been brought on by higher interest rates leading to a falloff in housing construction and new car buying. There is a similar situation today. If the economy slides into a recession (my bet), it is because of a crash of the housing bubble. This is one that will also not follow the usual pattern. For this reason, standard forecasting methods are likely to provide bad predictions. Fortunately, we have not had many instances of national housing crashes, so we don't have much experience on which to predict the course of a recession based on one. (Yes, housing markets are local, but we will have the simulataneous collapse of enough local markets to have a national impact, just as the rise in housing...
  • LIKE APPLES TO...

    LIKE APPLES TO MANATEES. Earlier today, I met Cato's Michael Cannon . We had a perfectly nice chat. Indeed, he was so pleasant that, for a little while, I forgot how crazy I think his ideology is. But I'm helpfully reminded by this post in which he compares the welfare system to health care costs. He argues that Congress stopped "just throwing more money at [the welfare system and] poverty fell and remained lower in 2005 than at any point in the 17 years leading up to welfare reform...Congress kept throwing more money at health care by expanding government programs (e.g., SCHIP). The result? Unlike the poverty rate, The Official Uninsured Estimate continues its steady climb." Where to begin? Michael is implying that the Congress's stubborn insistence on funding such programs as SCHIP (the State Children's Health Insurance Program) is accelerating the growth of the uninsured. After all, Congress began kicking folks off of welfare and the poverty rate dropped, why not do the same with...
  • JUST POSTED ON TAP ONLINE: FEAR OF A NINTH PLANET.

    JUST POSTED ON TAP ONLINE: FEAR OF A NINTH PLANET. Matt calls out astronomers for this Pluto crap: Astronomy, clearly, had been progressing just fine in previous decades without a rigorous definition of �planet.� Telescopes, NASA-launched probes, and other instruments were bringing us more and more information about which objects exist in the solar system and about the nature of those objects. The term �planet� meanwhile, had long since ceased to play a substantive role in the science of astronomy. Before Copernicus, celestial bodies were divided between the planets (the moon, Mercury, the sun, Jupiter, etc.), which moved, and the stars, which didn�t. Contemporary astronomy, however, distinguishes among objects according to what they�re made of , so that the sun is a star and so forth. The very notion of a planet is, at this point, a piece of folk culture, not an important element of science. And according to cultural tradition, there are nine planets and Pluto is one of them. There...
  • THE RAIN IN AMERICA FALLS RARELY ON THE PLAIN.

    THE RAIN IN AMERICA FALLS RARELY ON THE PLAIN. An amusing conclusion to today's "Today's Papers" : Finally, the NYT reefers a big piece on arid conditions in the Great Plains, which have left "farmers and ranchers with conditions that they compare to those of the Dust Bowl of the 1930's." It's the worst drought since � well, maybe 2003, "an extremely dry summer that � brought back memories of the 1930's Dust Bowl" (NYT, Sept. 5, 2003). Or maybe 2002, when "farmers shrug[ed] and wonder[ed] if a new Dust Bowl [would] soon be upon them" (NYT, May 3, 2002). Or 1998: "a dry spell that officials say shows signs of developing into the costliest and most devastating the region has seen since the Dust Bowl years" (NYT, Aug. 12, 1998). Or 1996: "Coming after two years of low rainfall and a number of other weather problems, the ferocity of this year's drought has slowly begun to evoke memories for some here of the Depression-era Dust Bowl" (NYT, May 20, 1996). Or 1988: "Since the spring's dry...
  • JUST POSTED ON TAP ONLINE: AGAINST DEMOCRACY.

    JUST POSTED ON TAP ONLINE: AGAINST DEMOCRACY. Last week, Shadi Hamid argued ( here and here ) that, to close the "vision gap" on foreign policy, progressives need to resist the realist temptation and reclaim democracy promotion from the neoconservatives. Today, Spencer Ackerman responds with a call to "uncouple human rights from democracy" and make promotion of the former the lodestar of liberal foreign policy: I don't want to be too hard on Hamid. He wrote his essay in the service of a vital progressive (and American) pursuit: to chart a foreign-policy course that eschews the hegemonic and militaristic disasters of neoconservatism and the cynical and occasionally amoral impulses of realism. Unfortunately, his fetishization of democracy fails both America and liberalism. There is a better alternative for both liberal interests and the national interest: the promotion not of democracy, but of human rights. What liberal democracy-promoters want to see in foreign closed societies is more...
  • HE FORGOT ABOUT AZERBAIJAN!

    HE FORGOT ABOUT AZERBAIJAN! Mahmoud Ahmadinejad proposes a televised debate between himself and George W. Bush only to see the Bush administration spurn the idea in a humorless manner with a statement from spokeswoman Dana Perino : "I'd refer you back to what the president, Secretary Rice, and others have said about the Iranian regime knowing what it has to do to engage constructively with international community,� Perino said. "We�ve said we are willing to talk to Iran in the context of positive response to the P5+1 package." What we're seeing here once again is Bush's mastery of the expectations game. By making it seem that he's afraid to debate Ahmadenijad, he's laying the groundwork for being able to declare victory after turning in a mediocre performance. I just hope that someone in the communications office remembers that "P5+1" isn't the kind of thing you want to say in a live debate -- too eggheady. --Matthew Yglesias
  • A RISING TIDE...

    A RISING TIDE DROWNS, ALSO. Now this is comforting: Since 2000, Americans have been getting poorer, and national rates of severe poverty have climbed sharply, according to a study published in the October issue of the American Journal of Preventive Medicine. The researchers reported that the growth in the poverty rate is due largely to a rise in severe poverty and that �moderate� poverty has grown little. [...] The percentage of Americans living in severe poverty�earning less than half of the poverty threshold�grew by 20% between 2000 and 2004, and the proportion in higher income tiers fell. The researchers reported that the number of Americans living in severe poverty increased by 3.6 million between 2000 and 2004. And let's make this very clear: 2000-2004 was an expansionary period. The economy was getting better and growth was roaring forward. And yet, during that time, millions of Americans fell into ever-more severe impoverishment. This has never happened before. A few years ago...
  • BUSH: DRILL OUR WAY TO A STRONGER LEVEE SYSTEM.

    BUSH: DRILL OUR WAY TO A STRONGER LEVEE SYSTEM. President Bush is not even done with his speech supposedly given in honor of the dead and those displaced by the hurricane that hit land one year ago today, and already he has begun trying to spin the needs of Louisianans in a comically cynical way. To rebuild levees costs money, you see. And that's why Bush just urged Congress to open the Gulf Coast for drilling, to help raise the necessary money. Seeing him pull this maneuver should give every environmentalist reason for concern. Remember, Bush used the argument that September 11 proves the need for energy independence to argue for drilling in ANWR. That said, I'm not too worried that Bush will actually be able to capitalize on this. Whereas Bush's speeches about September 11 have always demonstrated his political charisma at its most adept, this speech, like his handling of Hurricane Katrina all along, has been weak by comparison. Speaking right now on CNN, he is visibly nervous,...
  • GREETINGS FROM KATRINALAND....

    GREETINGS FROM KATRINALAND. Here, in New Orleans, on the one-year anniversary of Hurricane Katrina, there is nothing but Katrina to talk about today. There's plenty to talk about, and much of it distressing. There is still no electricity in the lower Ninth Ward, the site that generated the most horrific television images of the storm -- dead bodies riding the currents, people trapped on rooftops. With no public services, FEMA will not provide trailers to the people who once lived here. Without trailers, they can't rebuild. I've heard people speak with scorn of the city's call for residents to return home; return to what, they ask. According to Virginia Rep. Jim Moran (D), the Small Business Administration's emergency loan program is showing the lowest acceptance rate of any previous emergency to whose victims it offered loans. The rate of acceptance for Katrina-related loans, Moran told a local talk-show host here, is 38 percent. In the Clinton administration, he said, the rate was...

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