The Power and the Money

Of Conservatives, Republicans, and Liberal Democrats, all caps please

  I have a great many friends who wish for the day that the Republican Party manages to make the transition that the Conservative Party (of Britain or of Canada, take your pick, but more the former) has managed to make.  After all, right now the Democratic Party is a responsible and centrist beast, but just you wait until we've gotten universal health care and placed Medicare on a sustainable basis!  Sure, taxes will be higher, and yes, the country will be fairer, but would that really be enough?  At that point people like me are going to need a smackdown from ... Republicans as they used to be.

In two party systems, as Mark Schmitt wrote, parties rarely die.  But they do, it has happened.  And so, here's my question, to which I would really like an answer.

Why didn't the Liberal Democrats succeed in killing off the Tories?  You would have thought they could do it, between the death of what Americans would call "culture war" issues in Britain, Labour's seizure of traditional Tory views on civil liberties and foreign affairs, and the continuing battles over who will better manage the great U.K. welfare state.  Yet they didn't, and so a kinder gentler Conservative Party looks to obtain the next electoral mandate.  Substantively, it's all good (although I understand that vets of tribal British politics might not feel that way), but I'd really like to know:  why couldn't the Lib Dems seize the moment?

What's in a name?

Once we figure out the easiest way to port over my existing posts, I'll be leaving HDTD for another space on the internet, turning this place back over to its rightful owners.  I'm sure my new spot will soon become the hot go-to spot for Caribbean politics, early-nineties hip-hop, and random photographs.  Plus, pirates! 

Of course, it needs a name.  "Pure Product of America" is taken by an excellent blog that y'all should go over and start reading regularly.  (Go!  Now!)  Which leaves me at a loss, because while I'm sure that my posts have a pattern, I'm too close to see it, let alone come up with a pithily descriptive phrase.  "Orgulloso de ser argentino" would work, except I'm not.  (Argentino.)  "Shwingalokate" is one of the best tracks ever, but seems a bit too random.   I'd love to do "Radio Free Brooklyn," only I'm, like, not in Brooklyn any more, and "Radio Free Boston" just sounds wrong.   Which leaves me with "Notes from the Gabacho," or perhaps "Notes from teh Gabacho."  The problems with that one are obvious.

"The Power and the Money"?  Too serious.  "A Wee Bit Down the Charles"?  Derivative.  "Econ Dub Style"?  "Mexican Pie"?  "Yeah, We Did Start the F@#&in' Fire"?  "Rico Suave"? 

Quality Control ... Debout là d'dans ! ... Con Todo Respeto ... Lo Que Sea?

Anyway, suggestions are very appreciated.

The Earth Award goes to ... AMLO!

Pemex, Mexico's national oil company, is in trouble. Production is declining.  More than three-quarters of all petroleum comes from fields on their last legs.  Cantarell, the largest, is almost tapped out.  On current projections, the country will become a net oil importer by 2016.  (Joining Indonesia, whose government just recognized reality and quit OPEC.) 

President Calderón has proposed a sensible (if insufficient) reform that would alter Pemex's relation with the government from that of a state agency to that of a state-owned company, with the ability to control its own investment budget and hire foreign companies to provide exploration and production-related services.  It's sensible, small-c conservative, preserves national control of the oil, and rather badly needed if Mexico is to remain an oil exporter.

So, of course, the center-left PRD, under the influence of your hero and mine, Andrés Manuel López Obrador (AMLO), is fighting it tooth and nail.  They forced the PAN to agree to 71 days of Congressional debate on the bill ... which will then almost certainly face a Supreme Court challenge. 

And I say ... good for AMLO!  Falling Mexican production means higher oil prices, and higher oil prices mean more conservation.  It's better for the environment, it's better for alternative energy companies, it's better for small cars, it's better for America.  Heck, it's probably even better for Mexico --- the place has done a great job of avoiding the Dutch Disease, but the federal government is gonna hafta wean itself from oil revenues someday, so why not today?

Go mismanagement of state-owned oil companies!  Up with nationalization!  Viva MEND!  At some point those big Brazilian fields will come on line, and Iraq will get its oil act together, and who knows how much oil is in the rest of West Africa?  So if you believe that $200 a barrel oil is a good thing for the world, then let's cheer on Hugo and AMLO and all the rest! 

It's a dirty job, saving the Earth, but somebody has to do it.

Me voy a trabajar

Governor Paterson has put me in a nostalgic mood.  As has the fact that I have been rather surprisingly productive over the past few weeks.  And so, I present to you my favorite song ever.

I still know every word by heart.  I even got to yell it in basic training.  It is teh awesome. 

What were you listening to in 1989?

Serious, I'll show you serious

The last time I posted something from Comedy Central, the only dude to comment didn't see the humor.

So ... here's to Russia, a very serious country to be taken seriously, at least as seriously as we take the great great United States.  Serious!  Be serious!!  There will be no joking!!!  Ski.

via videosift.com

Profile in Courage

All right, I was a little disappointed in New York's new governor when he let the City's congestion-pricing plan die in Albany.  But he did manage to get through a pretty good budget that guaranteed free SUNY tuition for military veterans.  And now, now he's more than made up for the pricing plan failure.

"Slick Rick Pardoned By New York Governor Thanks To 'Exemplary' Record."

For somebody who grew up where and when I did, this is huge.  You just can't get more iconic than "Children's Story."  Strangely, I'm always surprised to realize that it wasn't released until 1988 --- I would've sworn (apparently falsely) that I'd first heard it earlier than that. 

Anyway, there is a little more justice in the world today.  Thank you, Governor Paterson.

Victory Day

Jussi asks if the U.S. media paid any attention to Russia's military parade in Red Square.

Be afraid.  Or not. 

Counterproliferation

  It's obviously one of the biggest issues facing the next president.  In fact, it's one of the biggest issues facing any national leader, whether their government is deciding whether to proliferate or trying to think of a way to stop it.  At least it should be.

What is to be done?  And who can do it?

Interlude: You might like him, but so what?

I like John McCain.  He seems like a genuinely nice fellow.  And unlike other past decisions of mine, I will say that while I would not have supported McCain in 2000 knowing what I know now, my decision stands given what was knowable at the time.  I do in fact think that his heart is in the right place, and unlike many of my fellow American lefties, I believe that his calls for national service and national greatness are respectable.  Mass economic sacrifice for social insurance and the environment, mass government service for emergency response and the occasional crazy man's strike at Pearl Harbor, all good things.  Matt Yglesias thinks that his call for service for its own sake is crazy; I think that the country would be well-served by sticking most of our youth in uniform for a couple of years, preferably to pick up trash and receive EMS training, but possibly to serve in You Know What.

But ... even though my respected colleague Niall Ferguson has attested to the man's character, the more I find out about Senator McCain, the more I think he's simply flat-out stupid.

And so, as a public service, here is a slightly overlong video of their man's greatest hits.  Enjoy.

UPDATE:  "Stupid," I'm now convinced is far too harsh, and certainly incorrect.  My difficulty with McCain is how readily he  abandoned so many of his 2000 positions in 2004, without any new facts coming to light that might have caused such a re-evaluation.  It was pure, crass political expediency.  Now the man feels free to dissemble all the time --- about the political complexities in Iraq, the history of American diplomacy, and even Obama's factual statements.  He's also taken nonsensical positions on taxes and health care while fearmongering about Iran. 

I can only find three positive things to say.  First, his climate change plan, while a giveaway to emitting companies, is a giveaway that reduces corporate opposition and might be smart politics.  Second, he supports free trade, and while my own doubts are growing, that's still probably the best position on average.  Of course, that means diddly with a Democratic congress, which is the third positive thing:  with no coattails to speak of, Congress would constrain him from doing crazy things at home (like his tax plan) ... emphasis on at home.   

But here's an opposing view from the fellow with the office next to mine.  If you're pressed for time, skip ahead to minute 4:00.  If you want to hear, well, things that are quite hard to understand, skip to minute 23:15.  It's quite ... judge for yourself. 

Observatorio Argentino 3: Best Facebook Group Evaaar

From HDTD’s agent in the Argentine comes the following Facebook group:  “Creo q el TREN BALA es un curro más grande que el MONORRIEL de Springfield!”

Translation:  “I believe that the Tren Bala is a bigger rip-off than the Springfield monorail!” 

Yes, that Springfield.  The Simpsons are, I think, a bigger cultural phenomenon in Argentina and Mexico than they are at home.  I have no idea what that means, but it has gotta mean something.  Right?

It really is an odd project for a country in as much trouble as Argentina.  Private groups estimate that CPI inflation has just hit 23%.  Farmers are on strike over export taxes again.  And strangest of all (since the currency is officially floating) Argentines are running out and trading in their pesos for dollars.  The situation got so bad last week that the banks had a mini-crisis when a volcanic explosion delayed flights carrying planeloads of Benjamins from Chile. 

It looks like average Argentines are looking at the inflation rate and figuring that the 3.2-to-one exchange rate can't last, even with the dollar's meltdown against the euro.  The central bank --- which hasn't really been independent since 2002 --- has burned through a billion dollars propping up the peso this month.  Now, that shouldn't be a big deal for a country with US$50 billion in reserves and skyrocketing export prices ... but a country with $50 billion in reserves and skyrocketing export prices should be facing the question of what to do about upward pressure on the currency, not figuring out how and when to devalue.  Which isn’t to say that a fall in the peso isn’t what Argentina needs, given spiralling inflation ... it is to say that it’s pretty sad for the country to be in this situation so soon after Kirchner’s debt repudiation gave it so much breathing space.

An Argentine editorial cartoon with a slightly different take below the fold.

Once was Kings

This is increasingly hard to imagine, but Brooklyn wasn't always cool.  Once upon a time, the other name for Kings County brought up visions of overweight white men in tank tops, women with very big hair and very tight clothes, and people who actually said "neighbuhud" and "fuggedaboutit." Or, conversely, visions of howling wildernesses of burnt out buildings and blighted lives, someplace going the way of the Bronx.  In fact, you'd hear people say, "TheBronxandBrooklyn," as one combined place.  Hell, other than in bad World War 2 movies or good Mafia ones, you could probably have lumped Brooklyn in with Cleveland in the popular American imagination.  It was a great place to be from.  It wasn't really where anyone would want to go to, unless from happened to be someplace like Fujian or Tajikistan. 

But that's not Brooklyn anymore.  Nope, now Brooklyn is cool. And all those cool people in Brooklyn want you to know about how cool and special and hip Brooklyn is.

Which is why I have grown to appreciate Queens.  Queens is not cool.  The producers of Entourage picked Queens for their guys' home town because Queens is not cool.  And while rents have risen, thus far, thank God, Queens shows no sign of becoming cool.

So when two cars crash into eachother on Hillside Avenue, and the driver at fault gets out gesticulating wildly at the much calmer person he hit, and skateboarding local kids start cracking wise about the show, it's just another car accident and not a deep metaphor for the inassailable uniqueness of place or whatever.

Which is ironic, because nowadays Queens is hella more exotic than most of Brooklyn.  Just not in a cool, hip, attitudinal way. 

And it's still a good place to be from.

(Hat tip:  Marcia.)

¿Vale el tren bala?

Here is what an Argentine had to say about the reasons why Argentina's government seems to have decided to build an HST. 

(1) Job creation: the bulk is temporary so the benefits are reaped by the current administration.

(2) Federalism: not everything is about Buenos Aires, hey, we are connecting three cities whose provinces account for 62% of the total Argentine population.

(3) First-world feeling: let's celebrate 100 years since we were one of the richest countries in the world.

(4) Legacy: a very tangible historical marker.

Yet, I cannot really find sound reasons to pursue a project of this magnitude. I cannot envision any substantial shift to this means of transportation. If the fare setting is competitive (i.e. no manipulation from the government), the train line will set the price taking into account the direct competitor: air transportation. Take into consideration that to fly to Rosario or Cordoba takes only 100 minutes from Buenos Aires. Given that the “right” reasons do not seem to be the ones driving this project, I tend to look for more political-personal based explanations.

I vote for number (3).  Thoughts?

Observatorio Argentino 2: We don't need no stinking plan

Randy McDonald asked about traffic projections on the Rosario-Buenos Aires HST.  I told him that I couldn't find any, but absence of evidence is not evidence of absence.

Evidence of absence comes from the efforts of three Argentine members of Congress.  Adrián Pérez (CC-Buenos Aires), Juan Carlos Morán (CC-Buenos Aires), and Griselda Baldatta (CC-Córdoba) asked the Department of Public Investment to see the feasibility studies. 

The reply?  Direct from Undersecretary Manuel Weich:  “The Department has not received feasibility studies for the Buenos Aires-Rosario-Córdoba High Speed Train project.”

As Randy said, “That's a bit stunning.” 

The deputies have introduced a bill that would halt an initial €38m appropriation winding its way through Congress.  They've also asked the Anticorruption Office and the National Administrative Investigations prosecutor to look into the financing and construction deals.  We'll see what happens.  An earlier effort by two UCR senators to have the Supreme Court stop the project went nowhere, and Fernández’s faction of the Justice Party enjoys 42 out of 72 senators and 118 out of 257 deputies.  So the chances aren't bad that we will see an HST connecting the cities by 2012.

Good for train buffs.  Not so good for Argentina, but I suppose that there are worse ways to spend several million fistfuls of euros. 

The Barber of Buenos Aires

On March 1st, 2005, President Nestor Kirchner effectively repudiated Argentina's obligations to those bondholders who refused its final offer to restructure its debts. 

Four years earlier, during the chaotic month of December 2001, Argentina defaulted on its dollar-debts. Over that evil month, the economy was reduced to barter, mobs sacked bank buildings, and the country went through five presidents in eleven days ... starting with the unlucky fellow in the blue shirt, Fernando de la Rúa. 

After President Néstor Kirchner took office in 2003, Argentina began negotiating over the debt in Dubai.  The Argentine side did everything possible to flummox its creditors, up to and including bringing very scantily clad female “assistants” to meetings with high-ranking American women.  The Argentine chief negotiator also played doornail dumb, honestly confusing the Americans and Italians across the table (unsurprisingly, the half-naked assistant ploy discomfitted the Americans rather more than the Italians) about whether he was uncannily brilliant or honestly didn't understand what a bond was.  (I've met the man, and I don't know either.) 

The Argentines put a truly fascinating offer on the table:  the creditors would forgive past-due interest would be forgiven, and the old bonds would be swapped for new ones worth 35 cents on the dollar.  In return, however, the new bonds would include a GDP “kicker.” The kicker — pronounced “keek-care” by everyone involved — promised the creditors additional payments equal to one-twentieth of the dollar value of all GDP growth above a initial threshold of 4.2% per year, which would eventually fall to one-twentieth of all growth over 3%. 

The creditors rejected the offer, preferring a “haircut” of 40% on the face value of the debt, no interest-forgiveness, and no kicker.  In response, Kirchner told them, and the IMF, and the U.S. Treasury, and eventually even President Fox of Mexico (don't ask), that the bondholders could take his haircut or drop dead.  On March 1st, 2005, the president finally told the holdouts to drop dead, and repudiated their bonds.

Below my friend Aldo contemplates the question: was that the right thing to do?

A year ago, I would have unhesitatingingly answered, “Yes.”  Now, I still think it was the right thing to do ... but I'm worried about what the Fernández Administration intends to do with its hard-won fiscal freedom.  More below the fold.

El tren bala: Financing

The reason that I haven't been able to find out many details of the financing for Argentina's new high speed train is that there don't seem to be many details to be found.  But here's what there is.

Natixis will collect a 4 percent fee on the issue of 30-year euro-denominated debt.  €430m will be issued this year, with an additional €2,070m issued between 2009 and 2011.  The bonds will pay a coupon equal to LIBOR plus a spread to be determined later plus a "liquidity charge" that Natixis will collect on any bonds that it decides to keep on its books as the underwriter.  Natixis plans to underwrite the bonds at 88 percent of par.

So ... the one-year LIBOR right now is about 3%, which would mean that without the spread and the liquidity charge, Argentina would pay a rather low effective rate of 3.6% on the issue.  In other words, we still don't have a clue how much this will cost Argentine taxpayers. Some unofficial sources in the Argentine government suggested to me that the effective interest rate will be 10.21%. 

Of course, 30 years is a long time for an Argentine bond issue ... Argentina's record in paying back debts over that long a period is pretty poor.  But Natixis may have other recourses. 

Observatorio Argentino: Tren a ninguna parte

This is insane.

Now, I like high speed trains.  I started to ride the (not so) high speed Acela to New York after I wrecked my car in 2006.  I started riding it to Philly after the American air transport system suffered a nervous breakdown last summer.  In France, I loved the TGV ride from Lyon to Paris, and when Amma and I go to London in June we intend to ride the Eurostar to somewhere just for the sheer coolness of it.  And while I opposed Florida's ill-fated and soon-reversed decision to build an HST, I think that a route between San Francisco and San Diego is an excellent idea. 

But an Argentine train from B.A. to Rosario (and eventually Córdoba) is crazy.  12 percent of city-dwellers lack access to improved sanitation.  The ports are a mess.  The Buenos Aires commuter rail and subway system, while improving, are in drastic need of both renovation and expansion.  Streets need to be paved, water systems hooked up, schools built.  There was nothing on which $3.7 billion could be spent for a higher social return?

I suppose that the only good thing that can be said about the project is that it proves that investors really do have short memories.  I haven't been able to track down the terms of the financing deal, but any deal is impressive in a country that essentially repudiated 65 percent of its foreign debt in 2005.

I strongly supported that repudiation, by the way.  But developments since then have been disappointing. 

The debater Frum hell

At some point I will need to post about the work of Leah Boustan.  She's an economic historian at UCLA, and she's one of the first people to seriously address American exceptionalism:  Why do our cities have such vast zones of deprivation?  As bad as some parts of Europe do get --- in 1990, I made a rather unwise decision to stroll through the Gorbals, and in 2004 I made an equally-unwise decision to roam around the slums of Lyon --- there is nothing to match the blight that afflicts so much of America.  Leah's work gets at those questions.

This post isn't about her research, though.  This post is about Rick Pearlstein's easy dismantling of David Frum in a bloggingheads "debate" about Richard Nixon.  Frum, for those of you who don't know, is the man who coined the phrase "Axis of Evil" as a Bush speechwriter.  He is not a stupid man, but he has the supremely annoying habit of refusing to acknowledge when the facts do not support his position.  He doesn't do it all the time and he doesn't do it with everything, but he has these idee fixes about the 1960s and 1970s that are simply contrary to fact and hard for him to abandon. 

What does this have to do with Leah Boustan?  Well, in his exchange with Rick Pearlstein, Frum voices the extraordinary opinion that Lyndon Johnson should have called in regular Army to combat the urban riots of the 1960s.  When confronted with the extent of the law-enforcement response to those uprisings he backs away from the opinion, but the exchange is striking. 

Click the link.  It's worth it.

“The much reported decline of gardening”

It seems that somebody shares my former opinion of gardening in American life. In today's Slate magazine:

As historian Kenneth Jackson notes in his book Crabgrass Frontier, the shift to largely indoor living, accompanied by the much-reported decline of gardening and encouraged by everything from air conditioning (often now needed because houses seem to lack shade cover from trees) to front porches being replaced by garages, has left yards — when they even exist — curiously empty. “There are few places as desolate and lonely as a suburban street on a hot afternoon,” he writes.

I haven't anything to add, overlooking a very urban street on a cold and rainy morning.

Sensitivities and censorship

Every country has their sensibilities, their things that they can criticize and satirize, but that others had best stay away from. 

www.lnteve.com

Result?  Cries for censorship! Can't let the good name of ... ah ... Juan Perón be besmirched.  After all, he didn't disappear people.  That was his second wife. 

Quoth an Argentine:  “As much as I would like to make (yet another) comment about American ignorance of world history, I am not sure this event qualifies. Reducing Argentina to Perón and the disappeared doesn't sound that far away from a summarized version of contemporary Argentine history.”

The Fernández Administration has recently reintroduced a program called the “Media Discrimination Watch.”  It isn't censorship, exactly.  Rather, it's an official program through which the dean of social sciences at the University of Buenos Aires can highlight media bias. 

The country’s journalism association responded with, “It seems that the Argentine government has decided that the press is an enemy to be defeated.”

I don’t know what to make of this.  My instinct is that it is a tempest in a teapot, and won’t have any long-term effect.  But I don’t know.  Argentine economic policy is a growing mess, and opposition is getting ugly.  It all seems solvable ... but that might have been said at many points in Argentine history.