The Power and the Money

Ain’t gonna study war no more?

  John Mueller repeats in this month’s Political Science Quarterly an argument that he’s made before:  war is becoming rare.  Developed countries no longer fight.  Underdeveloped countries rarely fight.  Imperial wars have disappeared with empires.  And civil wars are becoming rarer. 

Even if you want to quibble with Mueller’s typology (maybe Gulf War 2 and Chechnya are imperial wars, the Rwanda-Congo interventions could be called interstate wars instead of civil ones, perhaps you want to call the Caucasian countries developed), the data are pretty incontrovertible. 

The world has become steadily more peaceful since 1989, probably since the mid-1960s.  Mueller has some ideas about the causes of this decline in bellicosity.  I hope Mueller is right.  For while honesty compels me to admit that I would like to add a third (and fourth and fifth) picture to the sequence shown above, I must also admit that I do not want any of those additions to see anything even resembling combat. 

Therefore I ask you:  in the case of war, does the performance of the past two decades predict future results?

Sotomayor, soccer, and all that

  I’m all for ethnic solidarity and all that, but Senator Jeff Sessions is taking it to a whole ‘nother level at the Sotomayor hearings.

Anyway, interesting as the linked story is, I just wanted to post a picture of me in this shirt, which I wore to the World Baseball Classic games in Mexico City.  (The picture above is at my favorite bistro in the D.F.)  I will not be wearing it to the U.S.-Mexico World Cup qualifier in Azteca Stadium on August 12th.  In fact, while I will be rooting for the U.S. team, I also want to live, and so will dress in green and red. 

Patrick, Mike, Carlos, what think you?  Am I wimping out?

National health care, updated

  Megan McArdle, whom I respect, linked to a piece by Glenn Reynolds that basically says that his wife and father would be dead while his daughter and mother would have a much-impaired quality of life under socialized medicine.

But I have a question.  Two, actually.

(1)  The treatments for Reynolds' mother (hip replacement) and father (radioactive prostate cancer implants) were developed for a patient pool that is mostly subject to Medicare.  Which is socialized medicine by most definitions.  Why doesn't that fact show that the argument is fallacious?

(2)  If other countries generally force healthy young women to die or live impaired lives, why doesn't that show up in any of the comparative quality-of-life studies?

A third, fourth, and fifth might be:  Does Ms. McArdle really believe this argument?  If so, why?  And what does it have to do with any of the actual health care reforms that are on the table?

Meanwhile, Matt Yglesias points out why I have trouble staying friends with doctrinnaire libertarians.  This one's for you, Guy.

UPDATE:  Matt Miller has an interesting column in today's Financial Times.  He points out that save for the public option, the current reform plan essentially extends coverage using a basic template designed by Mitt Romney in Massachusetts.  In addition, one of the financing plans on the table (not my preferred one, I must admit, nor the President's) was basically proposed by John McCain.  Finally, the eye-popping cost is propaganda, caused by people's emotional reaction to the t-word; the right way to think about the cost is that it is 0.5% of GDP or 3% of total healthcare spending.  In short, the way to a compromise that should attract lots of Republican votes is obvious.

But I will add that since we aren't going to get any Republican votes, I will be very annoyed at my party and President should we get a bill that does not include a public option and that is not financed by a surtax on high earners like, uh ... really? ... my wife and me.

Demography matters, and a music video

  There is an interesting (if rarely updated) blog called “Demography Matters.” It's hit a few interesting topics lately.  Randy McDonald is the driving force behind it.  For those of you who don't know him, he wrote the defining takedown of the whole “Eurabia” nonsense, aka the idea that immigration and differential birthrates will eventually give Europe a Muslim majority.  But the blog is a lot more than that.

Here is a discussion of Greenland.  Short version:  considering the country's dependence on Danish expats for skilled labor, even a non-independence independence of the sort negotiated by other microstates could lead to disaster.  The population is shrinking despite high birthrates.  Maybe they'll get lucky and find oil.  More likely they will remain a dependency of Denmark forever, most likely de jure but definitely de facto.

The blog also recently discussed Iran.  Short version:  looks like Europe!  Crashing birthrates could fuel an economic boom if only the place could get the policies right.  In comments there is an interesting discussion of the fact that American birthrates have stayed above replacement ... and that much of that difference is because urban birthrates in the U.S. aren't appreciably different from their suburban or rural equivalents.  The really weird fact?  Canadian birthrates are crazy lower than U.S. ones, even in such similar places as Washington and British Columbia. 

Finally, it presents a scary version of Cuba's future, in which the country enters a demographic death spiral.  All it lacks is a projection of the worst case scenario: what would Cuba's population and age pyramid look like in 2050 if it goes the way of Ukraine and stays there?

Below the fold is a music video.  It is for Randy, for reasons he understands.  Essentially, while not my cup of tea, it shows what can be accomplished in his preferred genre in both aural and visual terms when attempted by two rather accomplished artists.  Enjoy.

Speculation in world oil markets?

  I report; you decide.

Now, these figures don't include stocks of refined oil products.  Perhaps speculation is easier in final products linked to the price of crude, rather than crude?

These figures don't include Chinese stocks, which are available but are also a bear to download and input.  They do include stocks held overseas, or on tankers.

Of course, Chinese stocks aren't the only missing figure.  Oil producers can speculate by leaving oil stocks in the ground:  e.g., cutting production.  That said, I'm not sure that's interesting; we already know that production declines will drive prices up.  

So can we see evidence for or against speculation in these graphs alone, or do we need more data?  I'm sure I was sending a signal to the Saudi photographer who took this picture; I'm just not sure what.

Great debate attempt #5

  Childless households making $200,000 a year in expensive Northeastern cities are undertaxed, and the acquaintance mentioned here gets no sympathy from me.  He is getting all bent out of shape about a tax rise of a couple hundred dollars:  4 percent of his income above $200,000.  Maybe.  And I lived in New York, I have friends living in New York, and no, it isn't that much more incomprehensibly expensive than Boston. 

My wife and I are in that category.  We are undertaxed. 

Sometimes the attitudes of my fellow citizens can be very depressing.

Great debate attempt #4: Some behavior really is random

  A few years ago, me and a friend scribbled down something we called “A pure theory of relationships,” based on a simple game-theory-based hostage model that we developed for this book. It was a joke, not meant for prime time or to be taken seriously.

And now I find that people are in fact using their time to seriously develop such models.  Me, I agree with James Kwak.  People are complicated, often driven by desires they don't understand, and small events can lead to behavior that is effectively random.  There are human situations in which people with the exact same set of outwardly observable characteristics will behave completely differently, and human situations in which a small unobservable change will cause the exact same person to behave entirely out of character.  Then add in the fact that some behavior (like, say, smoking) is addictive for some people but not for others, and exposure to the addictive trigger by the susceptible is a stochastic process. Trying to come up with a reduced-form model to predict such behavior strikes me as nuts.  Sure, you can come up with some sort of probalistic model for large populations, which is useful ... but not what the new modellers are trying to accomplish.

But what do I know? 

Finns marry other Finns? Uh, I guess so.

  Hmm.  I am somewhat ashamed to live in a country where the below is not a firing offense at a major television news network.  No matter how dumb the show may be.  I mean, in a decent country shouldn’t displays like the one below cost you so many viewers that the network simply has to let you go?  For the bottom line, of course.  (Hat tip:  Salon.) 

Apparently not in America.  That said, my wife doesn’t think Brian Kilmeade is being serious.  “He looks like he’s African, Italian, Moroccan, totally mixed up,” she says.  “Clearly a joke.”

Uh, I hope so. 

Empire versus hegemony

  Here's a working definition of the difference between empire and hegemony, abstracting from the veil of Westphalian sovereignty.  An imperial power tells its satraps, “Run your societies the way we want you to, or we will run it for you.”  An hegemonic power tells its subordinates, “Run your societies the way we want you to, or we will f--k you up.”

Working hypothesis:  for reasons of domestic politics, the destruction of the sovereign bond market in the Great Depression turned America’s foreign regime in the Circum-Caribbean from an empire into a hegemony. 

Explanation forthcoming.  The book is in progress.  In the meantime, I recommend the collected works of Suresh Naidu, a great Canadian.

How can financial speculation affect oil prices?

  The Obama Administration just announced that they may limit the ability of financial companies to engage in speculative trading in oil futures.  The reason is the recent run-up in oil prices.  I don’thave a problem with the idea.  After all, I am a conservative of a sort, in the sense that I like to limit the animal spirits of those crazy market types on principle. 

But still, I don’t understand the point.  The reason why I don’t understand the point is that I don't understand how futures trading can drive up the spot price.  That doesn't mean that it can’t; that just means I don’t understand how it might in the absence of a rise in actual oil inventories. 

What’s a futures contract?  Simply put, it’s an agreement to sell a given quantity of oil at a given price at a given date in the future.  So let’s say you and I strike up a contract that says that I will sell a barrel of oil to you at $100 in a year.  How do I make good on that contract?  One way is to run out into the market, buy a barrel of oil, and sit on it.  That will drive up the price of oil, got it, very clear.  When a year rolls around, I sell you that barrel for $100. 

A second way is to wait around until the contract is due, buy oil at whatever the market price happens to be, and then sell it to you for $100.  I do not understand how doing so could possibly drive up the price of oil.  I can vaguely sort of see how it might increase volatility:  trading on the futures market presumably reveals information (if only information about the neuroses of futures traders) and that information will be used by traders on the spot market.  When they use that new information, prices will move.  More information revelation, more price volatility. 

But seriously, people aren't worried about short-term volatility.  They'’e worried about big run ups and sudden falls.  I don't see how you can blame the speculators for those, absent big swings in inventories. 

In fact, inventory changes in the oil market tend to run against price swings.  During the recent price plunge, unsold oil piled up in stockpiles and supertankers all over the planet.  Those stockpilers were going long on oil, but in the context of falling prices.  Now that the price has risen, those stockpiles are shrinking ... and some analysts (not entirely coherently) blame the price rise on the inventory fall.

Am I missing something, or is this whole speculation story nonsensical?

An admonition to Micheletti supporters and an admonition to his opponents

  In a previous post, I mentioned Mexico in 1936 and Argentina in 1945 as possible parallels for what the Honduran military was thinking when it exiled President Zelaya instead of simply arresting him.  Steven Taylor mentions a third parallel, a cautionary tale:  Colombia in 1953. 

He raises a good point:  breaking the law in order to save it is always risky and often stupid.  But the specific parallel doesn't apply.  General Gustavo Rojas Pinilla took power in 1953 and established a dictatorship that lasted four years; Roberto Micheletti ascended to the interim presidency with a vote of Congress and seems to be waiting until the November election to hand over power to either Elvin Santos or Porfirio Lobo. 

In other words, the typical historical parallels really don't apply in this situation.  An inability to recognize that is the main reason why the OAS is botching the diplomacy.  (As opposed to the U.S., which is playing it very well ...  but very much in the national interests of the United States and nothing else.)  They keep seeing Pinochet when what they've really got is an unelected Liberal government marking time until they can hand over to an elected government ... preferably also Liberal.  If the OAS diplomats can recognize that, then they can get inside the other guy's head (and his decision loop) and start brokering compromises that will allow everyone to win.

But I have my doubts that insisting on constitutional purity and making absolute demands will accomplish anything.  Demanding that some soldiers be punished, or agreeing that Zelaya should be tried while remaining titular president, those could get somewhere.  But so far that isn't the tack the OAS is taking. 

See also my comment and Steven's response here.  The short version below the fold.

Helicopters are cool!

  Okay, so you're an accidental small businessman, who started an air-conditioning company in South Florida that did much better than you ever expected.  You save your money and set up a good life for your wife and daughter.  Then what do you do?

It's obvious.  You buy a helicopter.  Of course, that's predicated on knowing how to fly one, but that's why God created the U.S. Army.  Or barring that, flight school.

They are a lot of fun.

Here's my cousin helping my wife into her seat.

If you have $120,000 to spare, your house is paid off, and your kids' college education is provided for, I can't think of a better purchase than a used four-seat helicopter. Recommended. My wife approves.

Bad politics at the OAS, updated

  It strikes me that the diplomats trying to reinstall President Zelaya, particularly Secretary General José Miguel Insulza of the Organization of American States, are employing a lousy strategy.  The problem is that Honduras is a still a democracy.  The new government is conducting everything with an eye to the November elections, and unless the diplomats recognize that, they won't succeed.

You can't understand the coup in the context of a military takeover, because the military has not taken over and does not appear to be calling the shots.

The interim government needs to be persuaded that any compromise or backdown on their part will be a vote-winner.  There are a number of ways that could be accomplished.  The government could agree that Zelaya's expulsion was unconstitutional, give one of the military leaders a slap-on-the-wrist, and invite Zelaya back to reassume the presidency while facing trial.  (The same way, say, President Clinton faced trial.)  They could have Zelaya reassume the presidency after issuing a public apology for violating the Supreme Court order.  They could sit down and hammer out a third compromise.

The problem right now is that the OAS seems to have only sticks.  Getting hit with sticks, however, might just increase Liberal support at the polls in November; nationalist sentiment tends to work that way.  Delegitimization is a good prod, but Micheletti can't only be offered a choice between admitting his party is undemocratic and running out the clock, because he'll choose the latter.

Instead, we have Insulza in Tegucigalpa refusing to negotiate with anyone.  The military has admitted that it screwed up in banishing the President, and the OAS can't figure out a way to broker a compromise.  Instead, we've got a tragedy:  the death of an innocent. 

The great recession

  This weekend, my wife and I made our way up to Fort Lauderdale Executive Airport to grab a helicopter ride above ground zero for the real estate collapse.  It isn't just in marginal neighborhoods, as some observers have suggested.  Spot the foreclosure in this photograph.

In fact, if you look closely, you can spot a second distressed property in the picture. 

Nor is it only individual single-family houses.  South Florida is dotted with what Mexicans used to call “obras negras”:  stopped construction projects left to rot.  And in the South Florida humidity, they will rot:  unsealed foundations will flood and unprotected fixtures will erode.  They are calling them “ghost towers” down here. 

It was a Sunday, but note the lack of construction machinery around the site.

In fact, readers of this blog have already had contact with what became a pair of ghost towers.  Last year, we spotted my brother working on a high-rise located on the border of the Everglades, far out on the urban edge, near nothing but a ginormous shopping mall.  Now it is an infamously distressed complex in which, as far as the local papers can figure, no one lives.

Of course, the recession is also visible at ground level:

Anatomy of a coup

  The op-ed for Forbes is up. 

 I co-authored it with Steve Haber of Stanford University.  When I say we co-authored, I really mean co-authored:  Steve and I write by continuously tossing ideas past each other, dissecting them to death (and usually rejecting them) scribbling and re-scribbling versions, reading out loud to each other, and then finally finishing.  It's a lot of fun.  

The more expanded analysis is below the fold.  It takes into account some (surprisingly heated!) discussions with colleagues, Steven Taylor's blogging, and several of the comments on this blog.  I don't think I'll be dropping this issue anytime soon, so more comments and questions are highly welcome.

The new math

  I have a friend who is a professor of economics at Oxford. One of his students appears to have discovered an astounding new property of natural logs on an exam. It revolutionizes our understanding of, well, everything. 

I want one!

  Yes, it is an environmental atrocity.  Sure, the purported safety of all the extra power exists only in my imagination.  Indeed, while quite comfortable, the cupholders are in a weird place and the dashboard looks kind of cheap.  And it's noisy as hell.

But it is fun to drive, and that growl makes up for any and all inadequacies you might have.  Would it really be a problem to get a child-safety-seat in and out of the back?  The front seats fold way forward.  Hell, people, I'm under forty, recently married, and we don't drive enough for it to cause an appreciable increase in our gasoline consumption over, say, the Fusion hybrid or a Prius.  And it isn't a convertible.  Plus, my wife loved driving it around Maine last weekend.  So it wouldn't be that pathetic.  Would it?

I really am wondering about those child safety seats in a two-seater.  Hmm.

The importance of form

  The heat is turning up on Honduras’s new government.  Ambassadors are leaving, the borders are closed, World Bank money is gone, as are the U.S. military’s training programs.  Meanwhile, the hemisphere is united against the new government.

There would seem to be three lessons here.  (Note my weasel phrasing!  It isn’t accidental, as all three regular readers know by now.)  First, form matters.  Steven Taylor alluded to this point, and I think he’s correct.  Now, I don’t think that he’s correct about the underlying legality.  The Honduran constitution makes no provision for calling a second constitutional convention.  The Supreme Court, therefore, was completely within reason to tell Zelaya to knock it off with the referendum. 

Nor (given the facts so far) am I sure that Taylor is right as a matter of domestic political strategy.  If it was simply a matter of domestic calculus, a Supreme Court order followed by a quick bundling of the president out of the country might have been the best way to avoid worse conflict.

But Professor Taylor is completely right that hustling the President out of bed at 3am looks terrible. In retrospect, it was certain to produce a bad international reaction, even though I wouldn’t’ve predicted how bad beforehand.  (Hey, I was wrong.  Yes Bernard, I’ll get to Ecuador one of these days.) 

What the Honduran military and Supreme Court and I missed was the reverse Chávez effect.  Once Hugo (inevitably) started tub-thumping and threatening war, the best way for the United States to undercut him was to walk back its initial position and bandwagon on the international opprobrium.  And man, has the United States been successful.  Nobody seems to note that Washington was behind the international curve. 

In short, Honduras has gotten itself into a pickle.  The Supreme Court and military should have thought more about the politics.  The confused messages about resignations and drug-dealing and all the rest did not help; it was propaganda aimed at five-year olds, people who watch Glen Beck, not serious observers.  Now, it would have been damned risky for the Court to issue an order removing and arresting the President, but it would have been much better to have done that (preferably with a concurring Congressional vote ) and hope that Zelaya would be a little slow in mobilizing support, giving you time to bundle him off to Costa Rica after having crossed all the constitutional T’s ... or at least having seemed to. 

Form matters, even when the substance is uncertain and impossible to determine.  Perhaps especially so.  And that goes double in a hemisphere where electoral democracy enjoys the contradictory status of being simultaneously hegemonic and fragile. 

Twins?

  My wife says that Rachel Maddow and Alison Stewart look like sisters.  Now that she's mentioned it, I think she's right. 

A public service announcement that has nothing to do with Honduras

  This was one of the most useful signs I've ever spotted while driving along a rural highway.

“Watch what you put on the Internet.  Think before posting.”   

A lack of leverage

  The U.S. really doesn't give a whole lot of aid to Honduras.  Look at the figures, including military aid, from the USAID Greenbook:

That isn't a whole lot of leverage.  Of course, small amounts of aid may make it more likely that they'll be yanked, since such yanking won't wreck the national economy.  But that is the problem with using aid as an instrument of empire.  Contingent bribes — e.g., do good and we will give you more money — are fairly easy to administer.  Contingent threats — do what we want or the cookie jar will be taken away — are a lot harder.  You need to be giving enough money for the recipient to care, but not so much that withdrawing it would cause drastic adjustments that would reverberate back upon the donor. 

To put the above figures in perspective, remittances from the U.S. averaged 16% of GDP over the same period, peaking at 21% in 2006. 

In short, the U.S. didn't have a whole lot of leverage to keep the military-Court combo from ousting President Zelaya, even if the Obama Administration had wanted to.

(Say, should I add a “Honduras” tag to the blog?) 

A dog not barking in Honduras

  The fact that none of my posts about the Honduran coup carry the “Empire” tag is remarkable, considering the history of U.S. involvement in Latin American politics.  Even more remarkable is the idea that should events evolve in such a way as to warrant such a tag (which I consider unlikely), it will probably be either due to either direct meddling by the Alba countries or pressure from Unasur/Río Group/Brazil, not the interference of the United States.  That is quite a shift. 

Of course, the U.S. is still quite hip-joined to Honduras.  There is Soto Cano Air Base.  There is CAFTA.  There is the Millenium Challenge Account.  There are remittances.  Honduras isn’t dollarized, but it is a great case for dollarization, what with remittances above 14% of GDP, a fixed exchange rate and about 24% of all loans denominated in U.S. currency.  And we train its military. 

But Washington isn't leading events.  Sure, maybe it could, but it’s resisting temptation.  (Thank God!)  And that is a very big change. 

More on the Honduran constitution

  Hmm.  My opinion of the coup is moving back towards legal. 

In November 2003, the Honduran government (still under President Maduro) amended the constitution.  (You can find a history of all Honduran constitutional reforms here.)  The reason, ironically, was that they wanted to repeal the traditional absolute immunity held by high government officials in both the executive and legislative branch.  Thus, they repealed Article 205, clause 15, which had read: 

[Congress has the power] To declare if there is cause against the President, presidential delegates, Congressional deputies, Supreme Court justices, members of the National Electoral Tribunal, Chief of the Armed Forces ... and Subdirector of Administrative Probity.

They also altered Article 313, clause 2, as follows:

Original:  [The Supreme Court of Justice has the power] To begin initial proceedings against high state officials, when the National Congress has declared cause.

New:  [The Supreme Court of Justice has the power] To begin initial proceedings against high state officials and deputies.

The implication, I think, is that the Supreme Court has the power to remove officials from office when it determines that they have broken the law.  President Zelaya pretty clearly broke the law when he refused to obey an order from the Supreme Court to call off the referendum, and as I pointed out earlier, the Honduran constitution clearly (if stupidly) bans any consultatory referenda touching on presidential term limits. 

So my new version is:  Zelaya broke the law, the Supreme Court called him on it, and the military took the initiative in enforcing the Court's order.  (Maybe too much initiative.)  That interpretation will depend on how closely the armed forces and the Supreme Court cooperated in the ouster.  (The more it looks like the Court got the ball rolling, the more legal the coup will seem.)  Given the legal fog, the Obama Administration seems to be taking a pitch-perfect tone here.  Some other governments, like Brazil and Colombia, may have walked themselves into positions that they are going to regret. 

Be sure, though, to take my positions with a grain of salt.  I change them as the facts change, and as radically as necessary.  For a subtler discussion of the implications of the coup, go here.                            _{(Photo courtesy of Steven Taylor.)}

UPDATE:  The whole mess is filled with judgment calls.  Zelaya wanted to call a constitutional convention, which he publicly admitted would be intended to change the constitution to allow for re-election.  The referendum question that the Supremes kiboshed, however, only called for a convention, with no other stipulations.  So ... were the Supremes justified?

It all comes back to the problem that a constitution which declares procedural matters to be forever inalterable is a badly-written constitution.

An Andrew Jackson moment

  “The decision of the Supreme Court has fell still born, and they find that they cannot coerce Georgia to yield to its mandate.”
                                                                        —President Andrew Jackson

The common misquote of the above is much sexier:  “John Marshall has made his decision; now let him enforce it!”  Which is not a bad summary of Manuel Zelaya’s throwdown when his country’s Supreme Court told him that he could not go ahead with his planned referendum on repealing term limits.  Zelaya’s “No one will stop Sunday’s vote!” is on a par with Jackson’s aphorism.

In fact, it is worth considering what was in Zelaya’s televised speech on Sunday, after the Honduran Supremes slapped him down.  “The Court of Justice, which makes justice only for the powerful, the bankers and the rich of this country, has declared illegal the people’s participation in a legitimate and constitutional poll ... What a shame for all Hondurans, this Court of Justice!  We’re in the presence of a technical coup d’état.  It’s a swipe at Honduran democracy.  I want to appeal to the commanders of the Armed Forces, the officers and the soldiers.  They are part of the people, they should not play this game of the media elite and economic oligarchy, of a deviant bourgeoisie.”

Why is this significant?  Because Honduras could have avoided this crisis with a better constitution.  The Honduran constitution had two major flaws.  First, it took re-election off the table forever.  I mean that quite literally.  Read: 

Article 5:  Voting in advisory plebiscites is mandatory.  Projects intended to reform Article 374 of this constitution will not be objects of referenda or plebiscites.

Article 373:  The National Congress can alter this Constitution in ordinary session with two-thirds of the votes of all members. 

Article 374:  In no case can be reformed the previous article, this article, the constitutional articles that refer to the form of government, the national territory, the presidential term, the prohibition that no citizen can again be president who has carried out the role under whatever title, and the one referring to those who cannot become president of the republic for the subsequent period.

It is a bad bad idea to declare any procedural part of a constitution to be forever inviolable.  The U.S. constitution does this in respect to the apportionment of the Senate, and that is a bad idea that may yet come back to haunt us. 

The Honduran constitution then added insult to injury with its second flaw:  a complete lack of procedures by which the courts, legislature, or popular opinion could remove a sitting president for breaking the law.  The closest is Articles 321-327, which lay out the responsibility of public servants and organisms that break the law and cause civil damages to individuals, or Article 233, which lays a pretty draconian anticorruption law.  But neither really apply in this situation. 

In short:  Zelaya broke a stupid constitutional clause.  Twice, in fact, first by firing an officer who refused to administer an unconstitutional referendum and second by proceeding with the referendum anyway.  Congress could not do anything.  At that point the increasingly-angry military, acting in concert with the Supreme Court, decided to extraconstitutionally remove the president from office. 

I do not like it.  But I am also not sure that this is an abrogation of democracy either.  Judging by their statements, the Obama Administration is equally torn:  they would like Zelaya back, but they aren’t going to wade into another country’s Andrew Jackson moment. 

What do you think?

P.S.  I am not a fan of Andrew Jackson.

Coup in Honduras, updated

  It seems as though the Honduran military just deposed President Manuel Zelaya.   That said, this is not a stereotypical South American coup:  Congress appears to have ratified the Army's action, and a civilian is taking control. 

In an unsurprisingly pointless move, Hugo Chávez put his military on alert.  (Or at least he says that he did; it would not surprise me to find that no official orders have been given.)  He went on to declare, “The people of Alba are in combat, because this does not end today.”  The leaders of the Alternative Bolivariana have condemned the “coup” and its leaders will hold a summit in Nicaragua today. 

But Alba's declaration is less political than it sounds.  Unasur, the OAS, and the United States have all condemned the ouster, although the U.S. is not calling for Zelaya to be reinstated.   

I don't know why the military moved before Congress did, or why the new leaders are going through this charade of pretending that Zelaya resigned before he actually resigned.  But I do know that Zelaya ignored a Supreme Court ruling on June 25th that ordered him to reinstate the general that he had fired because the general refused to use to the Army to organize an unofficial referendum on abolishing term limits.  (I met Zelaya's predecessor about a year ago;  he didn't have a lot of good to say about his successor.)   I'll add here that Article 374 of the Honduran constitution, stupidly, declares that the ban on re-election can not be reformed in any way, no how, forever and ever.  A dumb provision, however, is still a provision. 

For what it's worth, my guess is that the coup will stand.  There is enough of a fig leaf of legality about it to allow OAS governments to walk back their condemnation.  Now, escalating street protests could force the U.S. to pressure the Honduran congress into reversing its vote.  But if I had to bet right now, based on what I've heard from Tegucigalpa, Zelaya will remain out of power.

UPDATE:  The legality of the situation is shakier than the above implies.  Hell, it seems to be blatantly illegal, a good old-fashioned coup.  Why have I changed my mind?  Well, as far as I can figure, the Honduran constitution has no provision for the congressional removal of the president.  The closest provisions are as follows:

Article 205, Section 12:  [Congress has the power to] accept the constitutional oath of office of the elected President and Vice-president of the republic, and other appointees they select; grant them permissions and accept or reject thier resignations and fill vacancies in the case of the complete absence of one of them;

Article 205, Section 20:  [Congress has the power to] approve or disapprove the admistrative conduct of the executive branch;

Article 242:  In the case of a temporary absence of the the President of the Republic, the Vice-president will carry out the functions of the President.  Should the Presidency be permanently vacant, the Vice-president will exercise the powers of the executive branch for the remainder of the constitutional term.  Should the Vice-presidency also be vacant, the powers of the executive branch will be exercised by the president of the National Congress.

Thus, the need to declare that President Zelaya had “resigned” before giving the executive powers over to Roberto Micheletti.  (The office of Vice-president is currently vacant, so having the power pass to Micheletti is kosher ... it's the whole removing of Zelaya what appears to be illegal.)  Note that while Micheletti says that everything is constitutional, this article from the Honduran press cites no clauses or precedents. 

The whole thing looks much shakier upon skimming the text of the constitution in the light of day, or least what passes for it in this, the fourth straight week of rain in New England.  I'll go ahead and call it a “coup.”  It's chances of standing are less than I originally believed.

Why costs rise

  Why do so many big projects regularly come in above budget?  Corruption?  Stupidity?  Or something else?  Well, I vote for “something else.”  Let's consider the French nuclear reactor project at Flamanville, which I had the honor to visit.

EDF initially costed the reactor in 2005 at €3.3 billion.  It is now estimated to cost €4.0 billion.  What happened?  Well, according to EDF, costs rose by €250 million due to inflation.  Special escalator clauses tied to the price of particular commodities (like steel) caused another €150 million.  Finally, an additional €300 million came from “évolutions techniques et réglementaires,” a fancy way of saying, “We learned on the job that some things are a little more complicated than we thought, but mostly the regulator kept changing the goal posts.” 

Considering that the head of L’Autorité de sûreté nucléaire, André-Claude Lacoste, actually said, “We wanted to show an example,” in regards to the construction of the first new reactor in 20 years, I find that last quite believable. 

More Doug in Senegal, and why you shouldn’t worry about the deficit

  It seems as though I start a lot of posts with the words “it seems.”  I will try to rectify this in the future. 

Ditto, “so,” a verbal tic I blame on my unbridled admiration for Doug Muir, who has, by the way, written a little more about Senegal.  He tells us about the Mourides, a powerful Muslim sect of which I am embarrassed to say I knew nothing.  He bemoans the crappy state of Dakar’s airport, and receives in turn a useful warning from Bernard.  Finally, he wraps his trip with a discussion of W, railroads, France, birds, the CFA franc (e.g., France yet again, although he doesn’t say so), the weather, the expats, and the clothes.  I am pretending not to be annoyed at not getting a shout-out on the France tip, which means that pique is not the reason why I am not explaining the story of the Senegalese railroads under French colonial rule. 

Which brings us to the U.S. federal deficit.  You hear a lot of worring about how interest rates are going to rise from all this wild borrowing.  Where will the money come from?  We are doomed, doomed!!  No links, because I actually like and respect many of the people doing the worrying.  But they need not.

I just had a colleague in my office with the latest BEA numbers, worrying about just that.   Where will the money come from?  So I pulled out a spreadsheet and showed him.  In the first quarter of 2009, annualized personal savings came to $620 billion, or 5.7% of personal income.  Total savings (again, annualized) came to $1,273 billion, or 9.1% of GDP. 

Personal savings is only going up.  If we assume that nominal GDP growth is flat in 2010 (meaning, most likely, that real GDP keeps falling), a rise in the personal savings rate to 10% will produce $468 billion of additional savings.  Retained earning are also likely to rise, say from 4.6% to 5.0% of GDP.  That’s another $47 billion.  Total of $515 billion in new savings ... just as the federal deficit is projected to fall by $393 billion.  Plenty of wiggle room should private investment rise (one can hope) or the current account deficit fall (which seems likely).  A rise in real interest rates does not seem like something we need to worry about.

Rather, what we need to worry about is a continuing shortfall in demand.  What if Americans don’t substitute domestic consumption for imports?  Final demand will fall.  What if domestic investment doesn’t quickly rebound?  (It was $2 trillion in 2008, a full 25% higher than in the beginning of 2009.)  Final demand will fall.  In that situation, we might be wishing for another round of stimulus, rather than worrying about the deficit. 

UPDATE:  The May numbers just came out from the BEA.  Looks like the personal savings rate hit 6.9% that month.  We are on track to exceed 10 percent in 2009, and in my opinion the country will permanently return to 1970s savings levels.  That said, past performance does not always predict future results.  Any counterarguments?

A real anti-imperial triumph

  It seems as though the Argentine ambassador in France will no longer need to pay embassy expenses out of his own pocket.  A French judge lifted the freeze imposed on April 3rd.  More importantly, a German judge released the funds that German companies owed Argentine tax authorities.  Interestingly, Judge Wölber did not base his decision on sovereign immunity.  Rather, he ruled that since the tax payments were owed by the companies’ Argentine operations, German courts had no authority.  It remains to be seen if this precedent will be followed by other European courts, but the Argentine government is optimistic.

Interestingly, U.S. courts have taken the same position.  In 1999, the New York-based Leucadia National Corporation sued Nicaragua over $26 million in defaulted debt that it had purchased for $1.14 million.  A New York court granted the company $87 million.  (No, I don’t know why.)  It tried to collect by attaching Nicaragua’s share of the ticket and landing fees paid by U.S.-based airlines that flew to that country.  U.S. courts, however, refused to uphold the judgment.  But don’t cry for Leucadia.  Eventually the World Bank paid off the debt at 4.5¢ on the dollar, including accrued interest.  By my calculations, Leucadia received about $7.8 million, for a nice return of 584%. 

I am increasingly unsympathetic to Argentina.  But I am also relatively unsympathetic to the vulture funds that try to use the judicial system to impose sanctions on defaulting governments.  I may change that position if we start seeing more ploys like President Correa’s brilliant gamble, but that’s still a hypothetical fear, not a real one. 

P.S.  It seems like I was wrong about Ecuador.  I’ll discuss why, but only if there’s interest.  No reason to admit error if nobody cares ...

Greater Trinidad?

  This is a strange story.  Sometime in 2007, the prime minister of Grenada tried to “associate” his country with the Republic of Trinidad and Tobago, in order to get access to “Trinidad and Tobago's education system, health system, transportation system, et cetera.”

Prime Minister Patrick Manning loved the idea; he's been trying to annex his neig ... unite the Caribbean for some time now.  His cabinet, however, was less than thrilled.  “The only thing that the letter didn't speak of having access to was the Trinidad and Tobago treasury. But, of course that was an unspoken word. But clearly we would have been in effect minding Grenada,” said one former minister.  Another more colorfully said that the Grenadian PM was trying to get Trinidad “to pay his bills” and was “mamaguying” — mocking — Trinidad and Tobago.

As you might expect from reactions like those, it didn't happen.  But now there is another union proposal on the table.  The intention is to unite the OECS and Trinidad in something slightly more than the European Union but less than straightforward annexation.

I'll be honest and say that I suspect nothing will come of it.  Which is, I think, too bad. 

Doug in Senegal part 5

  Doug is now in Goree, a small island off the Senegalese coast.  I don't have much to add at the moment, unfortunately.  (Or not.)

Growth is good

  I temporarily moved to Santiago in late 1991.  For the first few months, I had a room in a house owned by an elderly couple way out in upscale suburb called Las Condes, beyond the end of the metro.  (There were only two metro lines.)  Back then, it was a neighborhood of single and double-family homes.  Apoquindo Avenue was essentially a suburban strip, densely built-up by American standards, with the occasional high-rise and pedestrian-friendly sidewalks, but a suburban strip nonetheless.

I wouldn't've recognized the neighborhood (since I couldn't remember the name of the damned cross-street to save my life) if it hadn't been for the minor miracle that the Pizza Hut on the corner of Apoquindo and Capitanía was still there.  But I remembered the house was on Nevería, a block from the street that hit Apoquindo at the Pizza Hut, and with the cross-street I could locate it.  So I went looking.  And what did I find?  Big apartment buildings! 

Could that kind of change happen in America?  I have my doubts.  In my last post, I briefly discussed the high cost of American zoning laws.  Such laws prevent wholescale changes in land use, causing cities to sprawl more than they would have otherwise.  In other words, they lock in the existing pattern of land use, preventing the kind of wholescale change that in past decades gave us such delights as the boulevards of Queens and Wilshire, where high-rise corridors sprouted along formerly suburban strips.  Today, I don't know if that happens at all, with the exception of a few downtown districts.  When densification pressure starts in an American neighborhood characterized by single-family homes, zoning changes usually squash it, the way New York City has moved to protect the pristine environment of Queens from an onslaught of apartments.  Let alone, say, the Bay Area.  Imagine Palo Alto filled with high-rises and three times the population.

And no, Houston is not an exception.

Sometimes, libertarians have a point

  The New York Times today published a story on how foreclosures in New England are disproportionately hitting old triple-deckers.  “Triple-deckers” are squat three-story buildings common to the region (pictured below).  Most of them are condominiums these days, but many are owned by the resident of one of the units, who rents out the other two, or by absentee landlords. 

Unfortunately, the author didn't limit herself to simply stating that the foreclosures have disproportionately hit triple-deckers.  Instead, she decided to write a fact-free piece that implies, without any hard evidence, that the housing collapse is threatening to destroy the triple-decker, and with it, tear apart the urban fabric of New England.  What percentage of triple-deckers have are foreclosed?  We don't know.  What percentage of foreclosed triple-deckers are vacant?  We don't know.  We do hear stories about abandoned lots in New Bedford ... but New Bedford has been declining for decades.  Has the recent housing bubble really worsened things?  We have no idea.  It is a remarkably badly-written article. 

But there is one thing mentioned which, if true, is completely insane: 

Modern zoning laws, Ms. Friedman said, would never allow three units on such small lots.  “If we have four three-deckers on 12,000 square feet and could only get two on that amount of land now,” Ms. Friedman said, “we are losing six units. So it’s very important to us to sustain them.”

Can that be serious?  Boston zoning laws require less density than currently exists?  That is flat-out crazy.  I am not opposed to all zoning laws, of course.  I would hate to have somebody block out my ability to see the sun, for example.  But that is just egregious.  Of course, it’s only a problem if there is in fact demand for housing in the parts of Boston where buildings are being abandoned ... so I doubt the premise.  Ms. Friedman is probably worried about the housing for other reasons. 

That said, the general point holds.  Zoning is very costly in this country.  I do not approve. 

Natural gas, energy security, and silly reporting

  Earlier this week, I learned about this report from a Chilean energy executive, which was officially released yesterday.  It seems as though the USA has much much more natural gas than anyone thought.  The increase is due to shale gas. 

Shale gas is found very deep, and it is rather expensive to extract.  Deep wells need to be drilled, the rock fractured, and horizontal wells dug to extract the gas.  A 2007 study found that even the cheapest shale gas deposits aren't viable at a price below $5.40 per million BTU (MMBTU).*

Which makes the market's reaction a little odd.  More accurately, it makes the reporting about the market reaction seem very silly.  Gas prices have been below the level that would make shale gas viable since the beginning of 2009.  So why attribute a tiny little drop to the report's release, especially since (a) the findings have been known to market insiders for some time, and (b) the price is currently below the level that would make shale gas viable. 

That said, the news is important.  U.S. reserves have risen from 79 years of consumption, up from 57.  More importantly, it means that annual production can (in theory) be upped.  That means that none of the LNG terminals approved by various U.S. agencies will be built anytime soon.  American natural gas prices will rise, but not as much as they might, and the U.S. will be one step closer to strong energy security.

Unless it won't be.  Because, well, why did prices spike in the first place?  Gas and oil must be better substitutes at the margin than people think, and that means that gas prices will be subject to pressure from oil shocks for some time to come. 

* Michael Godec, Tyler Van Leeuwen, and Vello A. Kuuskraa, “Rising drilling, stimulation costs pressure economics,” Oil & Gas Journal, 15 Oct. 2007: pp.45-51.  

Energy security

  So I’m in Santiago to talk about energy security.  “What does that even mean, anyway?” asked my father.  It seemed wise, then, to define “energy security.”  We use the phrase all the time, but what are we in fact talking about?

Energy security, I think, comes in three flavors.

Weak energy security:  insuring liquidity in the energy market, e.g., insuring that your country’s consumers can buy as much energy as they need at whatever the prevailing price happens to be.

Strong energy security:  insuring not only liquidity in the energy market at whatever price, but insuring liquidity along with some level of price stability. 

Extreme energy security:  insuring that should the maintenance of liquidity in the energy market create rents (during times of high prices, whether deliberately promoted or not) firms from your country will enjoy those rents.  Alternatively, it means trying to create circumstances at which energy is priced at marginal cost, and there are no rents for anyone ... or, should that be impossible, disadvantaging foreign companies or knocking off foreign governments that your government doesn’t trust with such rents. 

Thoughts?

Doug in Senegal parts 3 and 4

  My friend Doug Muir is in Senegal.  He is visiting a city that I am deeply ashamed to admit that I had never heard of.  His reports from Kaolack are here and here.

Read the posts.  They pose an interesting question, about infrastructure, trade, and prosperity.  How much would an improvement to Kaolack's port reduce transport costs?  How much would a reduction in transport costs increase peanut production?  (In other terms, are there increasing returns in peanut production?)  These are unanswered questions; it isn't a sure thing that fixing Kaolack will promote growth.  After all, a declining peanut economy could provoked the city's decline, rather than the other way around. 

Which isn't to say that Doug is wrong; he probably isn't.  Just that any and all development quick-fixes deserve careful stress-testing before they are implemented. 

Hopefully we'll hear more from him soon.

Domingo flojo, and Doug in Senegal parts 1 and 2

  ¡Domingo flojo!  Despierta tarde en el mediodía, llama al tren, pa’ver q pasaría ... Narnia?  No no no no no. 

So I line up a trip to the deep-pit copper mine.  Chido!  At which it point it starts to hail around here, and the company cancels.  (Liability issues.  Chile is not Mexico, it seems.)  So I figure, hey, Chile has restarted passenger train service, why not chill in Chillán?  Metro to the train station, thin attractive woman a little older than me and wearing this cute little neo-hippy snoopy hat sells me a ticket with just the right amount small talk to remind me why I like this country so much.  Only ... she realizes that the return trips are all sold out.  I debate taking the bus back, decide no, and now regret it.  WTF am I going to do in Santiago on a rainy lazy Sunday?  Work in my hotel room?  Too depressing! 

I'll figure something out.  Meanwhile, Doug Muir is in Senegal, with details here and here.  I, of course, am fascinated by the French influence.  As always, don't expect pictures from Mr. Muir, but do expect lots of information, historical detail, and very good analysis about what it all means. 

You can also go here and here on this blog, where we discuss another part of the French not-empire in West Africa, or here, where you find out how Burundi got a handle on infectious disease.

I'll be back with more about regional inequality, copper, and the effect of the Panama Canal on Chile, but right now I'm going to go brave the rain and wander aimlessly around Santiago for a while.  I will, however, take requests for any Chile-related topics you might want to know more about.  (Randy has one pending on regional inequality.)  Hasta pronto, mis cuates desconocidos. 

Brooks on assimilation

  Gah.  I wrote the below two days ago, but stuck it in “drafts” instead of publishing it:

David Brooks published a column today about Sonia Sotomayor.  The first paragraph is interesting.  “Sonia Sotomayor had bad timing. If she’d entered college in the late-1950s or early-1960s, she would have been surrounded by an ethos that encouraged smart young ethnic kids to assimilate. If she’d entered Princeton and Yale in the 1980s, her ethnicity and gender would have been mildly interesting traits among the many she might possibly possess.”

The last sentence is clearly true.  In a striking coincidence, my wife has several dear friends from Yale who like Sotomayor spent their teenage years in Co-op City after humbler origins.  Identity politics wasn't and isn't particularly salient.  And the first sentence has a point.  The 1970s were ground zero for identity politics in the United States.  I view 1970s-style identity politics as a phase both good and inevitable, but it made for an atmosphere that seemed odd at the time (to white guys) and looks a little strange in retrospect (to everyone).  I cannot more strongly recommend Nixonland to get some of the flavor of the time. 

But the middle sentence is wrong.  First, it assumes that Sotomayor were male.  Second, a hypothetical male Sotomayor would not have gotten into those schools at that time.  Third, and perhaps most importantly, “smart young ethnic kids” did not assimilate at those schools.  Of course, you needed to fit in to get in at all, but that's pretty much still true.  And some did let go their heritage, of course, and I don't think there was anything wrong with that.  But more were not allowed to completely assimilate, regardless of their desires, because of how they looked or how their names sounded or how reluctant they were to completely abandon family customs and communal links.  And yet more still chose not to abandon their heritage.  The 1950s were more like today and less like the fantasyland of the great American assimilation machine than Brooks implies, as anybody with smart old “ethnic” relatives can attest, particularly if they are Jewish or Japanese-American. 

And I thought blogging might be a mistake?

  OK, everyone in America who hits the interwebs has probably heard about Senator Grassley's totally awesome imitation of Cher Horowitz by now.  But on the off chance that there is somebody out there reading this blog who hasn't, be you from elsewhere in the English-speaking world or beyond, click this link right now.  All indications are that this is not a hoax.

That is a U.S. Senator talking.  Yup.  Dude, is there a word for when something intended to be ironic turns out to be accurate?  Twitter, indeed.  I previously had no desire to try using it, let alone read the results:  now I have an active aversion.  Reverse marketing indeed, ironic in its lack of irony.

Somehow I seem to have found deep meaning in such gems as  “My carbon footprint is abt 25per cent of Al Gore. I'm greener than Al Gore. Is that enuf?” and “Comfort America worried abt hyperinflation Reafirm ACCORD of1951” or even “Pres Obama while u sightseeing in Paris u said 'time to delivr on healthcare' When you are a "hammer" u think evrything is NAIL I'm no NAIL.” 

Or ... well, click the link.

Non-conscription conscription in Chile

  In 1991, when I was last in Chile, the military was a thing apart.  Its rule over the country had only ended three years before.  The Constitution of 1980 reserved it a special role.  There was an organization called the National Security Council that consisted of the president, the heads of the Senate and Supreme Court, and the commanders of the four branches of the military.  The NSC could determine its own decision-making functions.  It selected four out of 36 senators, not including the seat reserved for Augusto Pinochet.  It picked two out of seven members of the Supreme Court.  The president couldn't remove military commanders without its approval.  If it saw “the menace of war,” it could order the central bank to extend credits to any person or group that it saw fit.  In addition, albeit not part of the constitution, a 1954 law granted the military 10 percent of Codelco’s copper revenues.  It was all very undemocratic, save for one thing:  the armed forces relied on conscription, and had since 1900.  The annual take, however, was never more than 20 percent.  In effect, it was fairly random and easily avoided, which undercut any chance that the military might become a citizen army.  

Most of that has now changed.  The NSC is now just an advisory board, and the non-elected senators are a thing of the past.  The military continues to get its share of Codelco revenues, but tensions with the neighbors are very low, and civilians set policy.  And ... perhaps inevitably ... conscription has ... well ... not quite ended ... it’s weird, and it raises a lot of interesting questions for the United States and elsewhere.

Details below the fold.

A different perspective

  I haven't been to Mérida, Venezuela, in decades.  (I haven't been to the one in Yucatán for about as long, either.)  I used to have an aunt who lived nearby.  She's long gone, and last I heard both her grown children (and their families) lived in Houston and Miami.  

Anyway, Gringa Diary is by an Australian socialist fervently working to further the triumph of the Bolivarian Revolution and turn back to the forces of imperialism.  I believe her name is Tamara Pearson.  It's a fascinating look into the Revolution, up-close-and-personal. 

Of course, her perspectives on the value of Mr. Chávez or the long-term impact of his policies on the poor of Venezuela are quite different from my own.  But she's so earnest about it.  Which is sort of touching, in a way.  More importantly, the true-believer tone infuses the blog with this sense of reading something for a parallel universe.  You read her stories, and more often than not find yourself scratching your head at her emotional reaction or logical analysis, so different from your own. 

But you can't get angry; she's so enthusiastic about it all.  Recommended. 

The financial meltdown goes nuclear

  I just learned that in 1992 the U.S. Congress decided to help the nuclear industry by making it easier for plant operators to save for the future cost of decommissioning their plants.  How did they do that?  First, they lowered the tax rate on such savings from 34% to 20%.  Second, they removed the requirement to invest decommissioning funds in low-yield government bonds. 

The first didn't go far enough.  Why tax the funds at all?  They're a provision for a future expense. 

The second ... uh oh.  I really hope somebody walked that back between 1992 and today.  I really doubt anybody did.

Empathy in action

  Alright, I read the 2001 speech that Judge Sotomayor gave at Berkeley.  I'm not seeing the controversy, but maybe I'm just not showing enough empathy for Newt Gingrich.  More interestingly, when I read it out loud to my wife the line causing such outrage among some Republicans caused her to chuckle.  In other words, if Judge Sotomayor gave the speech the same way that I read the speech out loud, the line comes across like she's making a sardonic reference to her own putative “wisdom.”

Is there a video?

Anyway, it is very strange to watch so many prominent Republicans trying to do to their national party what Pete Wilson managed to pull off for the California GOP.  Only the national GOP doesn't have a convenient constitutional dodge to get an Arnold Schwarzenegger into office ... and even old Arnie proved that he'd drunk a little too much of that newfangled party Kool-Aid, what with the crazy slash in the car tax.  Combine the over-the-top reaction to the Sotomayor nomination with the GOP's behavior in California, and you don't have a recipe for a comeback. 

(It would be interesting to watch them try this strategy, but the party would have to go completely Lou Dobbs to pull it off.  Somehow, I don't see that happening.)

Philippine economy watch

  The latest figures indicate that the Philippine economy has started to shrink.  Truth be told, I'm surprised that it took so long.  The Philippines may be relatively less dependent on exports, but 38% of your economy is still 38% of your economy.  Meanwhile, the country is highly dependent on remittances sent home.  Latin American countries have seen such inflows plummet.  In the P.I., though, they've held up. 

Luckily for the Philippines, there isn't too much evidence that the place suffers from the strictures of emerging-market Keynesianism.  The yields on Philippine bonds rose at the bad economic news, presumably on anticipation of more government debt issues to combat the downturn, but only by 5 basis points.  That really is not a lot.  So, not much sign of crowding-out so far.

The peso fell, but that's probably a good thing.  It's good because it gives exports a filip and increases the domestic value of remittances.  It's bad because as of 2007 the Philippines owed to foreigners $23 billion in debt securities and $40 billion in other debts. 

We will see how it shakes out. 

Governor-general eats raw heart of freshly-killed seal, “tastes like sushi”

  Well.  I just got this news: 

That is totally cool.  Sarah Palin may stand in front of turkeys getting stuffed in grinders and sit on dead bear rugs and shoot wolves from helicopters, but raw seal heart takes it to a whole ’nother level.  If you want the gory details, go watch here.  (Like, seriously gory.  The heart gets eaten right out of the carcass of the dead seal.) 

But I must correct my internet acquaintance, James Nicoll.  James, Governor-General Michaëlle Jean is not your head of state!  You oughta be ashamed of yourself, James.  Unforgiveable.

In fact, it seems as though Canada’s actual head-of-state may not approve of her representative eating the raw heart of a dead seal:

I love Canada.  First the Queen’s representative banishes parliament, then she eats a raw heart right out of a dead seal.  What next?

I call upon our readers to save the GOP!

  Yesterday I got into a long conversation at the gym with a Republican about the state of the GOP.  (Yes, there are Republicans in Allston!)  He is concerned.  He worries that the party has unconsciously decided to roll double-or-nothing on 2012, rather than write that election off, become a serious option for growing voting groups, and get back into power in 2016.

(We then started talking about Medicare cost control and free trade.  He was a serious Republican.  By which I mean a Republican who takes things seriously, not somebody who is seriously Republican.)

Still ... it seems to be an uphill battle.  From the same blog as the previous post:  “By contrast, if conservatives continue to be unable to restrain themselves from loud whining about how society unfairly tilts the odds in favor of Puerto Rican girls growing up in housing projects in the Bronx, they’ll presumably continue their current trajectory of alienating Hispanic voters.”

Well, yes.  If Republicans need to practice identity politics in order to maintain party unity, as David Allen in comments suggests that they do, then they need to figure out a way to play that card that doesn't alienate other voting groups. 

I know Republicans (and those who would like to be Republicans) do read this blog.  What do you suggest? 

SCOTUS-related linkage

  I have to link to this. The punchline made me laugh out loud.

Another post on the same blog has a great line about the sad state of modern conservatism.  In this case, the opening line produced an involuntary guffaw: 

“If you’re a white guy looking to vent about how Puerto Rican women growing up poor in the Bronx get unfair advantages in life, the conservative movement has a lot to offer you. But otherwise there’s nothing there policywise. That’s not, however, because there are no organizations out there capable of developing or marketing policy. It’s because the movement has become unremittingly hostile to constructive policymaking. Everybody’s too busy cowering in fear from Rush Limbaugh to come up with anything.”

Tom Ridge, a nation turns its not-particularly-lonely eyes to you.

High speed rail in Brazil

  I spent last week frantically writing about imperialism.  I need to spend this week frantically writing about nuclear power.  Instead I'm here writing about ... well ... high speed rail.

As our regular readers know, high-speed rail is dead in Argentina.  But it seems as though Brazil plans to have a line running between Rio de Janeiro and São Paulo by the time the 2014 World Cup rolls around.   Now, it isn't immediately a bad idea.  It will take about 80 minutes to cover the 258 miles between the two cities on the express train, which is competitive with the 55 minute flight, especially given the São Paulo airport mess.  Congonhas is overcrowded (when I lived in Brazil, I lived right next to the airport, with planes roaring right overhead) and Guarulhos may as well be on Mars.  In addition, unlike Rosario, Rio de Janeiro is a major metropolis and the traffic between the two places is massive, about 7 million transits per year, with an additional 11 million going between São Paulo and Campinas. 

So even given all the other infrastructure needs that Brazil has, this project can't be dismissed out of hand.

The catch?  The cost keeps skyrocketing.  The initial estimate was $11 billion; a new more-detailed report just upped that to $15 billion, with a worst-case estimate heading over $20 billion.  The financing will be via a public-private partnership, but they typically involve very large explicit or implicit government outlays. 

What do you think about the idea?  Should a country like Brazil build an HST?

War and remembrance, American version

  The story of the Finnish Guard has been fascinating.  And it has one excellent modern parallel.  In the South End of Boston, in a formerly Puerto Rican area (now filled with native-born Americans pushing baby carriages) you can find the following monument:

Monument to the memory of the 65th Infantry of Puerto Rico

This monument is dedicated to the heroic Puerto Rican soldiers who made up the glorious 65th Infantry Regiment, whose actions on the battlefield surpassed the standards of bravery and determination. 

They said to us, “We will have peace even though we have to fight for it,” and so we fought in the mountains of Heartbreak Ridge and marched from Inchon.  We froze in the winter and broiled in the summer.  There were moments when we were completely outnumbered but we kept fighting and many of us gave our lives for liberty, justice, and peace.

The 65th Infantry Regiment played a key role in the most heroic episodes ever seen, showing the courage, valiance, and heart of the Puerto Rican soldier in the person of Ángel Luis García Ledesma, the most decorated Puerto Rican soldier in history.  This brave fighter sacrificed his life to cover an enemy grenade with his body, absorbing all its explosive power, thereby saving his compatriots.  For this heroic deed, he was decorated with the Congressional Medal of Honor, the Purple Heart, and monuments have been erected in memory of this transcendental moment of contemporary history.  Today we honor with pride the 65th Infantry Regiment, an example of valor and determination in defense of liberty.

What words aren’t in the monument? 

Bronx, accents, Supreme Court

  And it goes to the woman who saved baseball™!  Excellent.  But I want to discuss accents.  Sonia Sotomayor is from the Bronx, you see, and will bring a third New York accent to the bench, after Antonin Scalia from Queens and Ruth Bader Ginsburg from Brooklyn.

Sotomayor has an accent of the older type, with modern elements, which many people (of all ages) in the New York region still speak.  The fellow who gives the New York speech lessons certainly does, as do I with my relatives.  But it is not a fully modern accent of the sort spoken by my younger in-laws.  See here at minute 1:52 (it is worth it) or here or here. 

What about the other two New York members of the Court?

Big dumb error, but an interesting bit of history anyway

  That flag that perplexed me?  Well, it's the Entre Ríos provincial flag.  In Uruguay they call it the Artigas flag and you can see it outside museums and the like, although the shade of blue is rather darker.  In Argentina, it seems to mean nothing other than the flag of the province. 

I really should have known that it was the provincial flag.  My excuse is that I've never actually been to Entre Ríos.  Route 9 skirts it, but never actually enters the province.

So much for there being some sort of living historical symbolic connection across the Uruguay River.  Nope.  Now, in historic terms it makes sense that Entre Ríos would pick a flag based on the old Liga Federal, but I'd bet not one in fifty people (on the Argentine side) could explain its origin.  (Leticia?) 

And we get a hit from Uruguay just as I make the mistake!  Ah, ni modo.

Anyway, I need to rent a car and spend a week or two driving aimlessly around Argentina.  That would be a dream vacation.  I just need an excuse to do it.  My wife just nixed heading there in June.  Too cold.