Via the Telegraph:

From the moment that President Barack Obama – who has won the Nobel peace prize – entered the Oval Office, he made clear that resolving the conflict in the Middle East would be a key priority of his foreign policy.

His very first phone call was to Mahmoud Abbas, the Palestinian leader, and his speech in Cairo sought to cast America as an even-handed peacemaker in the Holy Land. Soon afterwards, Mr Obama also pledged to negotiate a new treaty on nuclear disarmament with Russia.

So far, however, Mr Obama has no concrete achievement to his credit. The Israelis and Palestinians are no closer to a settlement today than when he took office nine months ago. On the contrary, recent violence in Jerusalem raises the possibility of a new Palestinian uprising: an event that would force the "peace process" into reverse.

Although America and Russia have begun talks on a new disarmament agreement, no treaty has been concluded.

The only possible explanation for the judges’ decision to reward Mr Obama is that they are betting on his future achievements. They think he might secure an epoch-making settlement between the Israelis and the Palestinians as well as a sweeping disarmament treaty with Russia. Having previously given the Nobel Peace Prize to leaders who have made real agreements to resolve real conflicts, the judges now appear to be rewarding effort and possible future accomplishment.

This is quite unexpected.

Other sources

‘Extraordinary’ Obama wins Nobel Peace Prize – AFP

Praise and skepticism greet Obama Nobel award – Reuters

Obama’s Kenyan family ‘honoured’ by Nobel Prize – AFP

Common misconceptions about the Nobel Peace Prize – AP

Comment: absurd decision on Obama makes a mockery of the Nobel peace prize – Times Online

Barack Obama Wins Nobel Peace Prize – NY Times

Related posts:

• Barack does have problems connecting
• The Obama Doctrine
• What would an Obama foreign policy look like?
• Barack Obama: candidate profile
• Obama wins debate

After the arrest of suspects based in Colorado and New York in an alleged ‘varsity level’ terrorist plot, the spectre of terrorism in the United States has re-emerged as an issue, one that also has economic overtones because of the fragility of recovery. President Obama is following his predecessor George W. Bush in restricting civil liberties in order to meet this threat. As a result, Obama is looking to extend three specific provisions of the USA Patriot Act that are due to expire.

1. Roving wiretaps (part of Title II, section 206). The first of the three provisions is the one on roving wiretaps which allows the government to target an individual under the same wiretap authorization when the individual switches telephone numbers. This order has been used 140 times from 2004 to 2009.
2. Property seizure (part of Title II, section 215). The second provision allows the government to seize “any tangible things” relevant to an ongoing terrorist investigation. This provision is controversial because it grants access to business records, library records, and medical records, which are constitutionally-protected.This order has been used 250 times between 2004 and 2009.
3. Lone wolf provision (part of Title II, Section 207). This allows the government to gain a wiretap on any individual believed to be a terrorist threat irrespective of whether they are connected to known foreign terrorist groups or foreign governments. This provision has never been used to date.

While I understand the rationale for these provisions – protecting Americans from potential terrorists, I question them. They are an abridgement of constitutionally-protected civil liberties and they are in direct contradiction to Obama’s pledges to roll back the Patriot Act.  More importantly for Obama politically, they tie him more directly to the policies of his predecessor as the bank bailouts did, reducing his ability to be perceived as a change agent. Neo-conservatives support the provisions while small-government Libertarians like Ron Paul oppose the Patriot Act. Many democrats also voice concerns.

Below is a video explaining a number of these issues and a few links highlighting why this issue is important in terms of politics and civil liberties.

Battle Looms Over the Patriot Act – NY Times
USA PATRIOT Act – Wikipedia
Did Obama Break His Campaign Promise to Scrap the Patriot Act? – Huffington Post
The Unpatriot Act, 25 Jul 2003 – Ron Paul
Obama Strays from Dems on Wiretapping – The D.C. Writeup
Editorial: Reining in the Patriot Act – Philadelphia Enquirer

Related posts:

• Obama confounds civil libertarians
• Barack Obama: Great story about his mother
• Geraldine Ferraro: what is she really saying?
• Democratic Race: Supreme Court implications
• The Obama as terrorist theme gains traction among some

Yesterday I wrote a healthcare polemic which was mostly designed to discuss the politics of healthcare for the President. The essence of my argument was that Barack Obama has not shown enough willingness to fight for specific policies he espoused on the campaign trail. In a poor economic environment, this weakens him politically, as is being made clear on the issue of health insurance reform.  I hope my language was sufficiently over-the-top to get my point across.

Today, I want to talk more about the substance of the debate. I have to say upfront that when it comes to the actual policies of healthcare, I am probably more conservative than Democrats are but I do believe serious reform is necessary today.

Let me offer some upfront tactical points. Then I will couch the debate in terms of the social-psychological backdrop and how the Obama strategy fails to address it before offering a strategy of my own. At the end, I have a number of links to good posts on the issue from both conservatives and liberals.

The wrong tactics

If you recall, Hillary Clinton outlined her early 1990s health care initiative in excruciating wonkish detail only to have her political enemies use this detail to pick her plan apart. Hillarycare was torpedoed because opponents of her initiative had a lot of ammunition with which to work. Team Obama seems to be fighting this same battle. They are employing a strategy in which cost reduction was the initial selling point of his reform platform. Moreover, Obama and his administration offer little in upfront detail about actual healthcare goals in order to prevent a recurrence of 1994.

But, this is not 1994.  And reducing system-wide costs that trickle down to individuals is not  a selling point that engenders any visceral or emotional response from  voters. Furthermore, I have been dismayed, as have many in America, that Congress and the President seem to have concocted plans for reform before taking the debate over healthcare to the public to inform themselves as to what we want. The draft legislation came first and then the town hall debates.  In fact, these debates never would have occurred had the President had his way with a vote before Congress’ summer recess. This seems very high-handed. Why didn’t we have town hall meetings followed by drafted legislation?

The social psychology of economic depression

We are in a deep economic contraction and people are afraid. What Americans want is economic security, not cost reduction.  Obama must offer a healthcare plan that provides increased economic security to the majority of Americans if he wants greater public support.

Most people in America are satisfied with their health insurance and their health care.  As they see it, no change is necessary there. Telling people the healthcare system in France, Britain or Canada is just as good as ours and we should switch to their model is a losing proposition.

On the other hand, Americans do feel a general sense of economic insecurity. The unemployment rate and foreclosure rates have risen astronomically. Meanwhile, houses, the main asset for most Americans, have declined in value tremendously, as have stocks. Americans are poorer both in terms of income coming in the door and wealth on their balance sheet. No wonder, the word depression is used to describe a major economic downturn.

And there is an increasing sense of anxiety about paying large out-of-pocket expenses despite having insurance. Here, I am talking about money for specific visits and procedures that one has to reach into one’s pocket and pay out here and now. That’s the kind of ‘cost’ that gets people’s attention – abstract system-wide costs, not so much.

Getting people onboard for reform

Given this array of forces bearing down on average Americans, healthcare reform must have increasing economic security for the insured as as the principal rallying call. We need to allay people’s sense of fear and anxiety by demonstrating that change will make them more secure economically. This is what insurance is all about: reducing economic risk. And right now, given other money problems, most people feel the risk reduction they are receiving is not adequate.

So, reduction of out-of-pocket expenses for those already insured must be the principal selling point of any reform. Mind you, I believe universal coverage is the most pressing need.  But, quite frankly, telling people we need to give something to other people in a time of economic distress is not the sort of thing that makes one want to jump up and shout.

Beyond just reducing the risk associated with out-of-pocket expenses, there are other issues of insecurity – the risk of losing coverage or paying more money when losing or changing a job, the risk of dropped coverage due to pre-existing health conditions, and the risk of exceeding yearly or lifetime caps.  If the healthcare plan that the President and Congress present to the American people can credibly claim to reduce these risks to those already insured, we would be more likely to accept reform on other issues which I am about to address.

To recap, most Americans like their health care, but feel there are significant gaps in their health insurance.  Obama has made a savvy move in switching the debate of late from care to insurance. In reforming American health insurance, four issues will gain widespread support:

1. Capping per visit and yearly co-payments fees.
2. Allowing every worker to remain with the same health insurance provider and paying largely the same premium had they remained with the same employer regardless of employment situation.
3. Preventing health insurance companies from dropping coverage for pre-existing conditions.
4. Providing all employees with a health insurance policy option without annual or lifetime caps and making the caps explicit for other options.

Two other reform issues to be addressed

With the issues established that will get most Americans onboard, reform can turn to other agenda items.  The first issue is clearly the lack of insurance for tens of millions.  This is an issue which is easy to demagogue due to stereotypes about just who has no insurance in the United States (illegals, Blacks, Latinos, the extraordinarily sick, or the young and healthy).  But the true purpose of health care reform has to be insuring all those working in America and their families against large and unexpected healthcare expenses and to promote universal basic preventive care.  If we pass a health care bill without substantially all Americans being covered against catastrophic healthcare loss, you can deem the legislation a failure.

However, there is one other issue of importance as well. James Pethokoukis had a good blog post yesterday “A healthcare plan to save Obama’s presidency” which encapsulated this idea. First he agrees that universal coverage is necessary.  But, he also adds an important bit regarding our employer-based system.

Make health insurance mandatory and subsidize those who can’t afford it. (That’s the blue part.) But at the same time dismantle employer-based health plans, which prevent consumers from understanding the true costs of their healthcare decisions. In any case, employer plans are just an accident of history. (That’s the red part.)

The simplest way of dismantling them, according to an analysis by McKinsey, would be to make the money spent on health insurance by employers available as cash, tax free, to employees. “Insurers would then compete for customers with policies that offer better value for the money,” according to McKinsey. “The combination of invigorated supply and demand is the only healthcare reform plan that will avert the economic disaster that otherwise awaits us.”

A Purple Plan for the centrist – or purple — president many Americans thought they were voting for. It would bolster the president’s popularity, lift American spirits and help restore the economy.

If I run a business in the United States in competition globally, why should I be forced to provide healthcare to my employees unlike businesses in no other country.  This clearly puts American businesses at a disadvantage and is a legacy of a system that needs to end.

What’s more is dismantling the employer-based health insurance system would have a huge stimulative effect on the economy and financial assets.  Every listed company in the United States would instantly be worth more and have more money available to provide for investment.  But, of course, the devil is in the details because this measure would effective be a tax cut for business.  Where is the revenue to support this cut?  If the President and Congress could find a legitimate way to recoup this revenue that makes the health care initiative relatively deficit neutral, there would be bipartisan support for such a provision.

Recap

The healthcare debate has been a fiasco.  It was begun without any input from the American people. Obama and many in Congress even attempted to pass legislation before the summer recess when serious debate could happen.  We saw this tactic under Bush when Hank Paulson tried to fast track the TARP legislation.

As a result, the debates have often not been very substantive and have degenerated into an emotional demagoguing of this key issue. Better messaging would be nice as well.  What’s in it for me?  And what are your goals in passing this legislation?  These are two questions neither Obama or many in Congress can answer.

Below are twenty articles I found informative. They run the gamut from very conservative to very liberal (Patrick Buchanan to Robert Reich, if that gives you a better flavour). I am adding them here for your attention as well.  Comments are appreciated.

1. Why We Need Health Care Reform – Barack Obama, NYTimes.com
2. Obama Goes Postal, Lands in Dead-Letter Office: Caroline Baum – Bloomberg.com
3. Economist’s View: Swiftboating Health Care Reform
4. Robert Reich’s Blog: How Tough is Our President?
5. Populist Right Rising – Patrick Buchanan
6. The inevitable socialisation of health care financing – Willem Buiter
7. Economist’s View: “Public Option versus Co-ops: The Market Test”
8. Clive Crook – Obama took wrong turn on health
9. The Swiss Menace – Paul Krugman
10. Ara Darzi and Tom Kibasi – In Defense of Britain’s Health System – washingtonpost.com
11. Fareed Zakaria – When Only a Crisis Brings Reforms – washingtonpost.com
12. Obama’s teflon melting as outrage over healthcare heats up – Marshall Auerback
13. Economist’s View: “A Public Option Isn’t a Curse or a Cure”
14. On why I can’t get in to see my doctor – James Fallows
15. You Do Not Have Health Insurance – James Kwak
16. A Canadian doctor diagnoses U.S. healthcare – Los Angeles Times
17. Unconscionable Math – Taunter Media
18. Hospital Savings – Salaries for Doctors, Not Fees – Series – NYTimes.com
19. Charles Krauthammer – Why Obamacare Is Sinking – washingtonpost.com
20. My whopping $32 emergency room visit in the land of socialized medicine

Related posts:

• The purpose of health care reform
• Obama and health care: Wasting political capital
• Christina Romer: The Economic Case for Health Care Reform
• Delivering a brilliant healthcare speech
• A brief note on the fake reform agenda

This was a front-page story at the Wall Street Journal today.  It should bring home the problem with lack of benefits in America. Also see Mark Thoma’s post yesterday on health care called "The Hottest Places in Hell are Reserved for Those Who, in Times of Moral Crisis, Maintain a Neutrality".

A link to the WSJ print story is at the bottom.

Source

Slump Spreads to Health Care as Michigan Loses Auto Jobs – WSJ

Related posts:

• The purpose of health care reform
• Christina Romer: The Economic Case for Health Care Reform
• Obama and health care: Wasting political capital
• Healthcare in America and eating our young
• WaPo cancels paid White House-Congress-lobbyist hook up

When news first broke regarding the ethnic tensions and violence in Xinjiang, China, I was not familiar with the situation there.  I have gotten up to speed and wanted to post a few videos and links for you on the situation there.

Wikipedia (population nearly 20 million):

Xinjiang … is an autonomous region (Xinjiang Uyghur Autonomous Region) of the People’s Republic of China. It is a large, sparsely populated area, spanning over 1.6 million km² (comparable in size to Iran), which takes up about one sixth of the country’s territory. Xinjiang borders the Tibet Autonomous Region and India’s Leh District to the south and Qinghai and Gansu provinces to the southeast, Mongolia to the east, Russia to the north, and Kazakhstan, Kyrgyzstan, Tajikistan, Afghanistan, Pakistan and India to the west. It administers most of Aksai Chin, a territory formally part of Kashmir’s Ladakh region over which India has claimed sovereignty since 1962.

The Wikipedia entry goes on to say that the Uyghur people in the region are not Han Chinese but part of a group of Turkic peoples in central Asia (picture of a Uyghur girl here).  There is also a region breakdown by ethnic group. Wikipedia says that AIDS/HIV is a problem in the region: “With a population of about 20 million and an officially estimated 60,000 infections, Xinjiang has one-tenth of China’s AIDS cases and the highest HIV infection rate in the country.”

The region is important because of oil.  Like neighbouring countries like Kazakhstan, there is a lot of oil in the province and the Chinese oil companies want continued unimpeded access to it.

Paul Kedrosky mentioned this on 6 July:

There is an important energy (read: oil & gas) connection to the current riots in China’s Xinjiang province. While the region had been independence-minded, that is no longer conceivable to the Chinese leadership, with sad and unsurprising current results:

“The Chinese didn’t want to let Xinjiang be independent before, but after they built all the oilfields, it became absolutely impossible,” said one Muslim resident in Korla, who asked not to be named for fear of retribution by government security agents.

More:

Backgrounder on the Uyghur people (Wikipedia)
140 killed in Western China after riots and security crackdown (Times)
Xingjian oil boom fuel Uyghur unrest (FT)

Other links:

• Uighur resentment boils over – Japan Times
• Uighur faces – James Fallows
• Hu quits G8 trip to tackle Xinjiang crisis – FT Alphaville

Below are a few videos reporting on the violence in the province.  Last reports I heard said over 150 are dead.

Given the fact that it is just over twenty years since Tiananmen Square, I thought James Miles’ BBC documentary films and audio podcasts on that period would be relevant.  The links are below.

• The Lost Voices of Tiananmen – Part one
• The Lost Voices of Tiananmen – Part two

Related posts:

• China wants all of Repsol’s Latin American oil assets
• China cutting overcapacity
• China: Growth on track but at what cost?
• Conspicuous consumption in China
• Chinese migrants losing jobs three times faster than reported

Happy 4th of July everyone.

Related posts:

• The SNL version of the Palin-Biden debate

In America tomorrow is July 4th, which is a big celebration.  For a lot of people it means fireworks.  But, fireworks are actually pretty dangerous.  So before you go out and buy those illegal M-80s, you need to watch this video.  Do not try this at home (you know I’m talking to you David).

Otherwise, have fun!

Related posts:

• A conversation about Prop. 8 with David Boies on Charlie Rose
• A conversation about the growing fiscal deficit on Charlie Rose

As Americans ponder the health care reform initiatives now coming from Congress and the Obama Administration, I want to say a few words about what the subject means to me.

America is often touted as the richest country in the world.  It is certainly a rich nation with an advanced economy.  As such, certain basic services and protections should be taken for granted. What is the point of being a rich nation if basic needs are not met?

From the beginning, national defense was a clear service and protection offered to all residents. Eventually, these protections and services expanded to include education and the right to vote for all adult citizens. After the calamity that was the Great Depression, we also realized that a less porous social safety net was necessary. Unemployment insurance came into being.

Now, in the 21st century, more than 230 years after our first Independence Day, isn’t it time that access to insured basic preventive and emergency health care get added to this list?

I am not saying that all American residents must have comprehensive coverage.  What I am saying is this: it is utterly deplorable that the richest nation in the world could allow millions of its own citizens and residents not to have insurance against basic health care needs. You must question the value system of a nation which allows many of its residents to be bankrupted in order to get healthy.

Let’s be honest, when costly services like education and health care are provided for through a common pot and everyone pays the same amount, some people are going to get a better deal than others.  But, so what?  That is the reality.

So, when you are thinking about health care reform and how to get it,  you should be asking yourself why we need reform at all.  To me, it has little to do with cost, little to do with who administers it, and little to do with who profits from it. Those are technical issues – vitally important to cracking this nut but not the core issue of health care insurance.

The core of this debate has to do with basic values: Which rights and protections do Americans believe should be available to all residents of an advanced economy in the 21st century?  In my view, health care insurance is one of them.

Related posts:

• Christina Romer: The Economic Case for Health Care Reform
• Yes, we’re bitter!
• Obama and health care: Wasting political capital
• Personal story on devastating loss of health care benefits
• What real comprehensive healthcare reform looks like

I happened upon an article about shops being closed in France that highlighted a larger issue about cultural attitudes in the U.S. and Europe regarding work, leisure and material wealth.  I would like to share some thoughts with you on these issues because I think they are significant in regards to savings, debt and other issues at the heart of the recent economic bubble and meltdown.

Shops closed? How 19th century.

First, the blurb on French shops posted by Jay Newton-Small on Time Magazine’s political blog Swampland.

Michelle Obama has unwittingly caused a national French debate over working on Sundays. It seems the First Lady wanted to take Sasha and Malia shopping while there: the problem was virtually every store in Paris is closed on Sundays. There is a ban in France, a Catholic country, on working the day God rested. Embarrassed, Prime Minister Nicolas Sarkozy personally called a few stores and asked them to open especially for the Obama ladies. Sarkozy has since introduced a law, expected to be voted on in the National Assembly on July 6, to allow shops in touristy areas to remain open on Sundays. In an article entitled, "If You Have to Work Sundays, It’s Michelle Obama’s Fault," Sarkozy, roughly translated, argues: "Is it normal that when Mrs. Obama wants to visit French stores with her daughters on a Sunday, I have to make a call to have them opened? Everyone in President Obama’s entourage was present, great. Who then had to explain to them why we are the only country where, even in Paris, everything is closed on Sunday?" A spokesman for the Communist Party responded saying Sarkozy "crossed the line" by invoking Michelle Obama. Vivre le shopping!

In America, shops are open every day, often well into the night when most people are at home with their families.  This is especially true in America’s big cities, especially in the northeast and west.  Clearly, Michelle Obama has been living that lifestyle and was unconscious of how different it can be in Europe or even in other parts of the U.S.  It is admirable that the First Lady spends so much time with her children. However, in this case, every hour extra she gets to go shopping with her daughter is one hour less that the people working in those shops have with their own children.

So, why the cultural divide here?  Religion is certainly part of it in the Midwestern and Southern America and in France – hence the allusion to France’s being a Catholic country.  But, Germans also frown upon opening shops on Sunday as well and they are not all Catholics, though many are.  I would say much of the difference has to do with culture.

Europe equals leisure while America equals wealth

A few years ago, three economists (including a brilliant former classmate of mine, Bruce Sacerdote) produced a paper called “Work and Leisure in the U.S. and Europe: Why so Different?” Below is the abstract. (emphasis added)

Americans average 25.1 working hours per person in working age per week, but the Germans average 18.6 hours. The average American works 46.2 weeks per year, while the French average 40 weeks per year. Why do western Europeans work so much less than Americans? Recent work argues that these differences result from higher European tax rates, but the vast empirical labor supply literature suggests that tax rates can explain only a small amount of the differences in hours between the U.S. and Europe. Another popular view is that these differences are explained by long-standing European "culture", but Europeans worked more than Americans as late as the 1960s. In this paper, we argue that European labor market regulations, advocated by unions in declining European industries who argued "work less, work all" explain the bulk of the difference between the U.S. and Europe. These policies do not seem to have increased employment, but they may have had a more society-wide influence on leisure patterns because of a social multiplier where the returns to leisure increase as more people are taking longer vacations.

Translation: Europeans worked more than Americans just four decades ago, but now work less. Thus, they are taking more of the benefits of increased wealth since that time in the form of leisure over material gain than do Americans.  In a nutshell, Americans are more materialistic than Europeans.

Now, you can argue why Americans work more.  The economists make the case for unions as the driving force behind this dichotomy.  That’s an argument for another day.  My focus here is on the fact that cultural differences have developed such that Americans prefer to work many more hours in order to accumulate wealth than do Europeans.

For example, productivity levels in the United States and Western Europe are not that far apart.  The 2008 OECD Factbook as the following quote:

In 2006, GDP per capita in OECD countries ranged from over USD 39 000 in Ireland, Luxembourg, Norway and the United States to less than USD 17 000 in Mexico, Poland and Turkey. On average, income levels were about 70% of that of the United States, Norway is a notable exception with its GDP per capita 14% above that of the United States.

Relative to the United States, most OECD countries had higher levels of GDP per hour worked than GDP per capita because their levels of labour utilisation were substantially lower than in the United States. This owes to disparities in working hours but also, in several countries, to high unemployment and low participation of the working-age population in the labour market.

Europe is just as productive as the U.S. But, clearly Europeans are choosing to work less than Americans.  Think store closings on Sunday in Paris.

The asset-based economic model

The result of America’s drive to work more has been an asset-based economy driven by debt. In America, and similarly in other Anglo-Saxon countries like the U.K., debt and savings are viewed in many parts quite differently than they are in places like Germany.  In the Anglo-Saxon model, people talk about things like efficient markets and wealth accumulation with almost religious fervour. Work is certainly prized as means of accumulating wealth. But, so too are debt and asset accumulation.

That leads to a greater reliance on markets and debt.  Look at any measures of aggregate national debt to GDP and you will see the U.S. and the U.K. at enormous levels over 300%.  The same is true in terms of market capitalisation levels.  The U.S. and the U.K. are much higher in terms of publicly listed companies as a percentage of GDP than, say, Germany.

German politicians disparage this as the Anglo-Saxon economic model – and since it is an election year in Germany, we are bound to hear more of this than usual. I call this the asset-based economic model.  The goal is to accumulate as much wealth as one possibly can by buying as many assets as one can, through income (hard work) and debt (mortgaging future income).

I find all of this a bit like a rat in his cage chasing a hunk of cheese.  After all, there are only so many hours in the week to divide between family, leisure, work and sleep.  And, there is only so much you can borrow against future income. At some point, lenders figure out they have lent more than you can possibly earn and pay back.

And that’s the message here and now, isn’t it? We have seen a massive credit bubble which has taken debt levels to unimaginable proportions – all in the quest for more material wealth.  My guess is that the pendulum, having swung too far in the one direction, is headed back the other way.  While risky debt-financed binges seemed the road to riches in the asset based economy, the conservative new normal will be savings.

My hope is that this new normal not only ushers in a world where high debt and low savings are frowned upon.  I also hope we see a re-allocation of time and energy away from work and wealth accumulation and toward other more important things like family and leisure.

Related posts:

• Barack Obama ushers in a new era in America
• The U.S. is exporting unemployment with ‘Buy America’
• Remittances to Eastern Europe to slow dramatically
• Twenty wealthiest towns in America
• Europe is in for a rude awakening

Love him or hate him, Michael Jackson was an extraordinary performer. His death is as shocking as Elvis’ 32 years ago. Rest in peace. Here are some videos I got via Mashable. Tragically, Farrah Fawcett has also died.   Rest in peace.

Thriller

Billie Jean

Bad

Smooth Criminal

And my Favourite: Don’t Stop Till You Get Enough

Related posts:

• Holiday season cinema: The Dark Knight released on DVD

This case is going to the Supreme Court of the United States.  It will be a landmark ruling when the issue is decided. Take a look at what David Boies has to say about the issue.

Related posts:

• A conversation about the growing fiscal deficit on Charlie Rose
• What are the legal rights of lenders and homeowners in foreclosure?
• A conversation with Richard Posner on Charlie Rose
• Why pro-choice Dems have nothing to like about John McCain
• Muncipalities can tear up contracts

I do think that we have seen a robust response to Swine Flu, sometimes bordering on panic.  Much of this seems like overkill.  However, first analyses of the H1N1 virus suggest this response is entirely warranted:

H1N1 swine flu is spreading fast enough to justify calling it a pandemic, say epidemiologists who’ve analysed the pattern of spread so far.

“The message is that the epidemic is spreading very much as expected based on past flu epidemics,” says Christophe Fraser of Imperial College London, and co-leader of the analysis team.

The results suggest that the H1N1 virus is showing “sustained human-to-human transmission”, thereby justifying the WHO’s pandemic phase 5 rating, one short of the most severe.

Read more at New Scientist.

Having read John Barry’s “The Great Influenza,” about the Spanish Flu epidemic of 1918-1920, I think it bears remembering that the first probable incidents of flu were recorded in February 1918. It wasn’t until October that the virus’ true epidemic proportions were registered.  One-third of the deaths were registered in mid-September to December.

Even if all seems well with the Swine Flu, I sleep better at night knowing continued vigilance is still the order of the day.

Source
First analysis of swine flu spread supports pandemic plan – New Scientist

Related posts:

• WHO: Swine Flu Pandemic is imminent
• Swine Flu has Mexican peso bears feeding at the trough
• First Swine Flu death in Texas (video)
• Model predicts limited spread of Swine Flu
• Swine Flu video primer from the Wall Street Journal

This is a pretty cool video from New Scientist.  This team of modelers has come up with a way to model human mobility using data from dollar bill tracking site Where’s George? The result is a model that tracks smaller human movements, unlike airline traffic data.  These modelers have determined worst case scenarios for the spread of Swine Flu. The result of their analysis is pretty comforting. Take a look

Related posts:

• Does the Swine Flu really have the makings of an epidemic? Yes.
• Swine Flu video primer from the Wall Street Journal
• WHO: Swine Flu Pandemic is imminent
• Swine Flu has Mexican peso bears feeding at the trough
• First Swine Flu death in Texas (video)

This comes from Bloomberg. Unfortunately it is pretty scary stuff:

The World Health Organization said the first pandemic since 1968 is imminent after an outbreak of swine flu spread to eight nations and 11 U.S. states.

The WHO’s Director-General Margaret Chan raised the agency’s six-phase pandemic alert to 5 from 4, the second jump in three days, at a news conference in Geneva today. Level 5 means a pandemic, or a global outbreak of a new virus, is near.

“The biggest question right now is this: how severe will the pandemic be,” Chan said. World nations “should treat this as an opportunity to ramp up preparedness.”

WHO and other health authorities have begun developing a vaccine against the disease, linked to 159 deaths in Mexico and 1 in the U.S. More than 100 swine-flu cases have been confirmed in North America, Europe and the Pacific, and the virus will probably spread, Keiji Fukuda, WHO’s assistant director-general for health security and environment, said today in a conference call with reporters.

“We have been preparing all along as if this is going to stage 6,” Janet Napolitano, U.S. Homeland Security secretary, said at a news conference in Washington earlier today. “Our preparations are for a situation in which this does become a full-fledged pandemic.”

Related posts:

• Does the Swine Flu really have the makings of an epidemic? Yes.
• Swine Flu has Mexican peso bears feeding at the trough
• First Swine Flu death in Texas (video)
• Swine Flu Tempature Rises, Dollar and Yen Remain Firm
• Swine Flu video primer from the Wall Street Journal

You probably saw this one already, but a pair of suspected narcotics traffickers threw gads of money from their car window while being pursued by the Drug Enforcement Agency (DEA) in a car chase in San Diego. Basically, it was free money for any other drivers willing to risk death picking up the money on the highway. Many people, including pedestrians did just that.

Kind of fitting given the move to printing money, wouldn’t you say? Chairman Bernanke should take note — it’s all in the wrist, as the video shows.

Two narcotics suspects have been arrested after leading police on a wild chase, tossing out more than $17,000 in cash out of their truck’s windows as motorists stopped freeway traffic to grab the bills.

The pursuit began Thursday afternoon when police and federal drug agents followed two men who drove off in a pickup truck, Drug Enforcement Administration spokeswoman Eileen Zeidler said.

The driver took officers on a circuitous route over several streets and freeways, eventually getting onto Interstate 5 at the height of rush hour. On the busy freeway, the suspects flung mostly $20 and $100 bills out of the truck’s windows before surrendering to authorities.

As the cash blew across lanes, motorists slammed their brakes in the middle of the road and scrambled to pick up the bills, police Sgt. Kevin Rausis said.

Source
Cash thrown from truck during chase – WoodTV.com (Grand Rapids, MI)

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Economics and finance are slowly coming to grips with the fact that human beings are simply not rational.  The boom-bust cycle that we are now living gives us a front row seat to that irrationality.

Below is a video by Dan Ariely, a behavioral economist at Duke University, that is not just about market irrationality specifically, but human irrationality more broadly.  Ariely gives a wonderful demonstration of how the human mind works–  and it is not at all the way Economics textbooks would have you believe.

Enjoy.

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Here’s an interesting statistic from the OCRegister in California. What are the twenty wealthiest cities in the United States? Pleasanton, CA tops the list with a median household income of $113,345. See the chart below for the other 19. I counted nine in California, five in Texas and two in the DC area.

Another interesting statistic was that Americans overall got richer in 2007, with the median income pushing up to $50,740. That was the first time that income topped $50,000.

Sources
Nation, state got bigger raises in ‘07 than O.C., OC Register
Three O.C. cities rank near top in U.S. income, OC Register

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In reading about profit increases of some U.S. multinationals due to robust overseas business and the weak dollar, while the U.S. economy faces a protracted downturn, it has occurred to me that the divergence between U.S. worker and business interests has reached a critical juncture. Before globalization, most U.S. companies earned their business in America due to products largely produced in the United States. As the U.S. economy prospered or suffered, both U.S. companies and workers suffered along with it. This connection is over.

And it remains to be seen whether a set of policy responses exists which can re-align business and consumer. Therefore, Americans are faced with some tough choices to maintain a living standard: try and soak the rich and re-distribute income, redouble efforts to increase the quality of U.S. education and U.S. worker quality, or emigrate to lower cost locales.

Today, most large U.S. companies have a significant portion of their product markets overseas. This is true with Technology companies like Dell and Microsoft, for basic materials enterprises like DuPont and for consumer products companies like Mattel. What this means for individual companies is two-fold:

1. Products are no longer manufactured in the United States, meaning U.S. companies have less vested interest in the education, social safety net, living standard, and wage structure of most U.S. workers.
2. A large percentage of revenue comes from outside the United States. Therefore, companies have less of a vested interest in the economic fortunes of the U.S. economy as a whole.

To be sure, these same factors are true for large multinationals in other developed countries outside of the United States. However, in Europe, many products that would be manufactured in China and other Asian countries are manufactured in former communist countries that are now part of the larger EU. By granting admission to former Eastern Bloc countries, the EU is attempting to align interest across the gamut of European nations.

However, the U.S. does not have such an arrangement with its export markets outside of the U.S. and its manufacturing bases in Asia. Ultimately what this means for U.S. workers is that U.S. companies have less interest in the U.S. economy and U.S. workers; the interests of U.S. companies and the country governing them have diverged. The U.S. economy can sink. Yet, corporate profits for many enterprises could continue to rise.

Moreover, the weak dollar, a sign of deteriorating standards of livings for U.S. consumers, can be a boon for U.S. companies which earn greater amounts in foreign countries due to dollar weakness. Companies like IBM, which derive a majority of their earnings from abroad, do not necessarily wish to see the dollar strengthen.

All of this is worrying for future U.S. economic fortunes because it sets up a divergence of interests between capital and labor. This has been all fine and good as asset prices were increases. But with assets prices falling, the average American finds herself loaded up with debt and in fear of losing her job, creating perfect conditions for a class struggle between capital and labor.

One potential course of action comes from politics. And we can see this issue playing out in the Presidential debate between John McCain and Barack Obama regarding tax issues. Obama seeks to redress the divergence of interests between capital and labor by redistributing income through tax policy. McCain would like to continue with the suply side trickle down tax policy that has set up this divergence. Nevertheless, while politicians may try to exploit this situation through tax policy, longer term, it is very much up in the air as to what specific measures can be taken to re-align business and consumer interests.

After all, Chinese workers cost much less to manufacture goods. Indian workers are often better educated and cheaper than U.S. service sector employees. And Asia and many emerging markets are growing at rates far in excess of the US. Why should businesses not expand abroad to cut costs and capture markets in these areas? What allegiance do U.S. companies have to American workers when they face global market competition from a host of foreign multinationals?

These are troubling questions which reveal the Achilles heel of globalization as the divergence of consumer and business interests domestically. From a U.S. worker standpoint, the long-term solution may lie in education, personal savings, and emigration. In an increasingly globalized world, U.S. workers cannot rely on U.S. companies’ loyalty to remain employed. They are in competition with well-educated and hard-working cheap labor abroad.

In order to maintain a stable living standard, Americans will have to move ino value-added jobs with less potential for foreign competition. The thought here is that as American workers face increasing competition from lower cost workers abroad in a game of global wage arbitrage, American workers are best served by moving up the value chain to highewr wage, higher skilled jobs. But, this will certainly not be enough. Not every American can be a highly educated post-graduate trained worker. And this means a reduction in living standard for some.

That said, reducing consumption and debt and increasing savings will leave Americans less exposed to falling standards of wealth. And this increased savings will lead to increased investment and benefit the American economy over the longer term. Nevertheless, a nagging feeling that some will get left out in the cold still exists. Yes, America can change tax policy toward the middle class. Yes, American workers can try to increase their intellectual capital and make themselves more desireable in global labor competition. And yes America as a ociety should save more, especially in light of the most ecent credit crisis.

But, even with all that, America faces a tough future. This is not 1948 with Europe and Japan in tatters, Russia and the Eastern Bloc in the grips of communism and China about to move in that direction. And U.S. companies had to manufature at home as the world was much less inter-connected. As a result, America reigned supreme. Today, 60 years later, competition is much more fierce. In 2008, the American worker is simply not as sought after.

That leaves American workers with one final choice: emigrate and look for greener pastures elsewhere.

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I happened upon an article at “The Moderate Voice” about “Conspicuous Consumption” originally posted on UPenn’s Wharton Business School’s website. It’s a great piece of research which explains nicely in part why Blacks and Hispanics tend to have less savings and spend less on education.

Blacks and whites appear to have different spending habits only because blacks tend to be concentrated in poor communities more than whites, Roussanov says. Nationally, the poor white is likely to be surrounded by many whites who are not as poor, so he or she cannot afford to use conspicuous consumption to compete for status. But a black person of the same income is more likely to be surrounded by others of similar income, making this competition feasible.
-Knowledge@Wharton

In the end, it’s all about signaling social status. The signals you send are different depending upon the intended audience. And this explains much of the difference in spending patterns in Black and Hispanic communities versus other communities. Great stuff.

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I caught an interesting letter to the editor at the New York Times. We really need to think about which alternative energy sources we use and this letter highlights the fact.

Re “Bring On the Right Biofuels,” by Roger Cohen (column, The New York Times on the Web, April 24):

Biofuels contribute to deforestation and global warming regardless of which plant matter is used to make the fuel.

Even if ethanol is made from sugar cane and that sugar cane is grown miles away from the Amazon rain forest, the resulting shifts in where other crops are grown will lead to deforestation.

Furthermore, when previously uncultivated land, including tropical forests, is brought into cultivation, large amounts of carbon are released from the soil, worsening the carbon dioxide balance.

Municipal solid waste is about the only biofuel source that does not exhibit this problem. Other than municipal waste, biofuels are an environmental disaster.

John K. Horowitz
College Park, Md., April 24, 2008

The writer is an associate professor of agricultural and resource economics at the University of Maryland.

-The New York Times

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The Mainstream Media — MSM as they are known on the Internet. One of the main reasons I began blogging in the first place was to vent my frustration that the American MSM did not report on issues I cared about or felt newsworthy. During the Iraq war, I had to turn to the British or German press to get an accurate picture of what was happening. During the 2008 Election campaign, I have turned to the Internet and developed trusted sources their to supplement or even replace the MSM as a source of information. I have stopped watching the nightly news because it is canned and spoon-fed news designed to promote whatever agenda the MSM pundits have. I am sick of it.

So, I was happy to learn that Elizabeth Edwards, the intelligent and successful wife of former Sen. John Edwards, feels much the same way. She contributed to the New York Times with an op-ed piece entitled ‘Bowling 1, Health Care 0′ this morning on the nonsensical reporting and coverage of the 2008 election campaign. The Internet has set us free of the biases and agenda of the MSM. They cannot control us any more. We have other sources of information.

Thank God.

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The city and police force that Giuliani built has done it again. They’ve acquitted the shooters of another unarmed black man. Looking to outdo the travesty from 1999 against Amadou Diallo when 41 shots were fired, the police fired 50 shots at the unarmed man, Sean Bell and his companions, who were at Bell’s bachelor party in 2006. Bell died.

The police officers who did this (all of whom I imagine live outside of the city) were just declared innocent by a jury, (oops, sorry) judge.

This reminds me of the Patrick Dorismond incident from 2000 as well. The black community of New York hates Giuliani because of these memories. The so-called hero of 9/11 was not a popular man and retired from office knowing he couldn’t win another election. For anyone who wants to see the Republicans out of office, it makes you sorry Giuliani didn’t get the nomination.

See story on acqutital

Story connecting dead man’s death to other NYPD shootings.

Those black people sure have some huge advantages just from being black. Affirmative action, NY-style.

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I just caught an interesting analysis by Matthew Yglesias over at the Atlantic Monthly. His analysis suggests that we are hugely misreading the class issue in voting patterns by confusing class and race. His point is simple: if you take ALL voters who made less than $50,000, John Kerry won that group by 11% over Bush in 2004’s Presidential Election.

It’s when you take the black vote OUT that Bush starts to look good in that income group. People are forgetting that blacks who make under $50,000 have many of the same issues as everyone else with incomes under $50,000. In short, Bush did not win the working-class vote. And, the white working-class vote doesn’t really exist. They have most of the same concerns as other voters in the same income group

I guarantee you the same dynamic holds in 2008. The Democrats need to re-frame this fact accordingly in the general election. We need to stop treating this groups as separate and identify the divisions that are building in our society based on income and wealth.

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I think Bill Cosby is on to something. In this month’s issue of the Atlantic, you will find a terrific article chronicling Bill Cosby’s transformation from America’s dad to the 21st century Booker T. Washington. The most interesting thing about Cosby is that his legacy comes from Malcolm X more than Martin Luther King. While many see Malcolm X as a radical racist, he was a black conservative who preached self-reliance in much the way Bill Cosby is doing today.

Bill Cosby has not lost his mind. He is saying something people, whether they agree or not, need to hear.

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I came across a very interesting article from the Atlanta Journal-Constitution, which highlights how race has really evolved as an issue in the last 20-odd years. The article is about Michelle Obama’s first college roommate. She roomed with a white girl from New Orleans, whose racist mother wanted to have her room assignment changed because Michelle was black.

Since then, the two women have moved forward much as America has and they regret the incident. It’s a very good personal testimony to the ways racial relations in America are changing.

Well done.

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