The Power and the Money

Guest post #6: War and Remembrance

  These images show the medal that the Russian army minted to commemorate the 1831 conquest of Warsaw. You can occasionally still find these in Finnish antique shops; this one was provided courtesy of Jani Tiainen’s Finnmedals in Helsinki. 

Before we leave behind the Finnish soldiers who fought on behalf of Russia in Poland back in 1831, there are a few questions left to be answered.  What were the consequences of the war for Finland? What were its effects on Poland?  In the short term, the Polish campaign of 1831 undoubtedly strengthened the Grand-Duchy of Finland. In the context of the politically incendiary situation in 1830-1831, the Finnish Guard’s participation in the Polish campaign played an important role in securing Imperial favor for the Grand-Duchy’s autonomous status. At a  time of crisis, Finland demonstrated to the Russian Empire that (unlike Poland) she could be trusted.

For the Finnish officers who had distinguished themselves on the front, the campaign marked the beginning of some splendid careers. Adolf Aminoff, the young lieutenant from the painting in the fourth part of the story, rose to the rank of General of Infantry and ended his career as an adjutant of Alexander III. Henrik Lyra, whom the Poles captured at Długosiodło, became a General Major. The young Casimir von Kothen became the adjutant for Governor-General Aleksandr Sergeyevich Menshikov, and later the governor of the province of Viipuri. And finally, Colonel Ramsay, the commander of the Guard, became General of Infantry and a member of the Russian Imperial War Council.  In short, over the decades preceding the Crimean War, the government of the Grand-Duchy of Finland was in the hands of officers who had earned their ranks on the battlefields of Poland.

For the common people of the Grand-Duchy, the Guard’s campaign of the became the first concrete example of a developing Finnish patriotism that put love for the Finnish fatherland and loyalty towards the Russian Emperor into one and the same breath with no sense of contradiction. A belief in the virtues of the Finnish soldier instilled a special sense of devotion and enthusiasm, celebrated in popular broadside ballads that proclaimed the willingness of the younger generations to follow the example of their predecessors and take up arms under the banner of the Finnish Guard in defense of Finland and the Empire:

Canadian policy on captured pirates: let ‘em go. ¿¿De veras??

  As our few readers know, we've been covering piracy for some time on this blog.  Our first post on the topic, in fact, took on the myth that European navies refused to enforce the law against pirates.  Only now Robert Farley tells us that the Canadian and Dutch navies went ahead, captured pirates, and released them.  Er?

Well, NATO is not the problem.  It is true that NATO, which is not a sovereign state, does not have arrest powers.  But the national navies operating under NATO command do have such powers.  Now, I'd be happy with giving an international organization arrest powers, but I can see why some politicians might be reluctant to take that step.  That said, the truth is that not only do national militaries have the power to arrest pirates on the high seas, since December they've had the ability to do the same thing anywhere in Somali territory, sea or land.

So if this and this story are correct, something isn't working.  In the Dutch case, it seems to have been a low-level screw-up.  Ships under European command have standing orders to turn captured pirates over to Kenya for prosecution and punishment; ships under NATO do not.  There was a deputy from the justice ministry on board the Dutch ship (for precisely this reason), but whoever it was decided to let the pirates go.  Parliament appears to be annoyed.  At some point, I suppose, we'll find out who made the decision and why.  We might even find that circumstances made it a wise choice.  But it isn't Dutch policy, and it seems to be causing the government some headaches at home.

Canada seems to have a deeper problem.  The Globe and Mail has deeply misinformed its readers by reporting, contrary to fact, that “Canadian sailors, like their NATO allies, lack the authority to make arrests in international waters.”  Of course, the Globe and Mail is parroting what seems to be Ottawa's official line.  After all, the Prime Minister said in Port-of-Spain that the Winnipeg did the right thing by releasing the pirates.  “Those were the appropriate measures under the circumstances.”  Elsewhere, a Canadian admiral alluded to mysterious legal difficulties.  “There's the rule of law that needs to be applied, so we're not currently regularly detaining them, no. There are all kinds of challenges with that.” 

Now, I can understand why a country would fear becoming a dumping ground for pirates ... but it isn't as though hundreds or thousands of them are being captured every year.  Nor is organizing a piracy trial under normal criminal rules all that difficult.  (And they have, by definition, been caught red-handed.) 

So, Canadian readers, I ask you, what the hell?

From Russia, without love? Or a Greek tragedy?

  There is no official definition of “depression.”  Tim Kehoe says a 20% deviation from trend growth over a decade.  Richard Sylla says double-digit unemployment for a period of months.  Brad Delong says unemployment staying in double-digits for three years, or peaking above 12%.  Michael Bordo says a two-year continuous output decline of at least 10%.  By any of those definitions, Finland suffered a depression in 1991-93, or even 1991-96. 

So what caused it?  Well, there was a discussion about that somewhere, but I can't find it.  Anyway, you can sum up the evolution of the conventional wisdom as follows:  “We thought it was the collapse of the Soviet Union, but then we figured out that it was actually caused by a banking crisis.”  Blaming it on the Soviet collapse exculpates Finns:  it all came from Russia.  Blaming it on the banks turns the episode into a Greek tragedy, which Finns unknowingly brought upon themselves. 

Evidence for the banking-crisis hypothesis can be found here and here.  (Another hypothesis holds that Finnish workers decided to take an extended vacation because managers forgot how to run their firms and the government raised taxes.  No, seriously.  I don't have a whole lot to say about that.) 

Now, however, a Ukrainian, a Mexican, and an American have entered the fray to argue that, no, it was indeed the sudden collapse of trade with the Soviet Union what caused the Finnish depression of 1991-96.  Their paper is here.  The argument is pretty simple.  (1) Yeah, there were some signs of financial weakness before 1991, but let's not get crazy.  (2)  Trade shock.  Huuuuuge.  Plus, when you look at the industries that went under first and fastest, it was the ones that relied on the Soviet trade.  (3)  The banking system didn't fall apart until after the trade shock.  Absolutely, it was a weak system, but few systems could have handled a shock that big.

Basically, they argue that you don't have to assume a lot of friction in the real economy to get a slow recovery from a trade shock of the magnitude that hit Finland in 1991. 

But there is that nagging question:  why did Sweden go into a (much less serious) recession around the same time?  Could the Soviet trade shock have precipitated the Swedish crisis somehow?  Or is all just a coincidence, kind of like a man getting hit head-on by a truck and then having a bicycle ride over his hand? 

It's an interesting paper, even if it turns out to be wrong.  Thoughts?

Guest post #5: The Home Front on the edge of Empire

  In Finland, as we saw yesterday, the participation of local soldiers in the campaign against Poland ignited patriotic sentiments, at least among those who had served in combat:  “May our banner call the sons of Finland to perform the highest civic virtues still in the future, to fulfill their obligations and loyalty towards their sovereign.” 

Elsewhere in Europe, the bloody suppression of the November Insurrection aroused, well, different feelings. The Polish independence struggle became an immediate cause célèbre for European liberals. Casimir Delavigne, for example, celebrated the old Napoleonic brotherhood in arms between France and Poland in his exhilarating song La Varsovienne.  In the German-speaking countries, August von Platen’s 1831 sonet collection Polenlieder topped what later generations would call the charts.  

West European sympathy towards Poland, however, hardened Russian attitudes; even the Russian intelligentsia abandoned its criticism of the Tsarist régime and supported Imperial policy in Poland. The anti-European backlash culminated in Aleksandr Pushkin’s legendary (if somewhat unsubtlely-titled) poem, “To the Slanderers of Russia.”  Pushkin’s diatribe, in particular, should be familiar to a modern reader. 

(Uh, Jussi, you give us too much credit.  I’ve never heard of any of the works of music or literature that you’ve cited in here.  Then again, I hope nobody criticizes people in 2145 for their ignorance of, say, “Eve of Destruction” or “Bad Moon Rising.” Right?  Or am I excusing my ignornance?  —ed.) 

Russian officials still reference “To the Slanderers of Russia” in times of conflict.  During the 1999 Kosovo War, for example, the Russian foreign minister, Igor Ivanov, cited the poem in order to give a stern warning to the NATO countries.  Eight years later, in 2007, the Russians once again used the poem for propaganda purposes during the Bronze Warrior crisis between Estonia and Russia. 

Guest post #4: Heroes of the Empire

  The work of art that you see below is a painting by Robert Wilhelm Ekman, a pioneer of early national romantic art in Finland. Ekman is perhaps best remembered for his early attempts at the illustration of Kalevala, but this work, finished in 1848, invokes the memory of the Finnish soldiers who had fought and died in Poland seventeen years before. You won’t find this work on display in any museum; it is part of a private collection, and the owner prefers to keep it that way.

The painting depicts the young lieutenant Adolf Aminoff wounded on the ramparts of Tykocin on May 21st 1831. As you can see, the painting captures two ideals.  First, an officer who leads his men from the front, even at the risk of his own personal safety.  Second, his soldiers, equally ready to risk their lives by rushing to the aid of their wounded comrade. During the following decades, national romanticism claimed these universal ideals as quintessentially Finnish military virtues.  Emphasizing the importance of solidarity and camaraderie is always a natural choice.  After all, it doesn’t really matter what you’re theoretically fighting for, because putting your life on the line for your comrade is always a virtue.  

Greece in recession

  The Greek economy is slowing, but it is not in recession.  Yet Athens looks like a city in the midst of a severe recession. 

Not in this picture, of course.  This picture is lovely.  Albeit not really because of Athens.

But on the drive in from the airport, you pass myriad empty storefronts, abandoned buildings, and what appear to be stopped construction sites.  

Downtown, you see much of the same.  Even brand-new construction looks empty.  When the storefronts are filled, you can spot tell-tale signs of empty offices.  And then there's the petty vandalism that haunts downtown:  graffiti on private structures, cracked windows, run-down buildings.  All the telltale signs of property owners who have decided for whatever reason that proper maintenance does not pay a sufficiently high return.  

If it had just been the central city, we would have concluded that Athens suffers from a European version of the American disease.  Or that it was just the after-effect of the December riots.  The thing is, the signs of economic distress are worse in the suburbs.  It honestly looks like someplace that suffered from a real estate bubble that has now collapsed. 

Of course, the central city doesn't look so good either.  It looks like someplace where rioters might indeed attack businesses with petrol bombs. 

That said, downtown Athens is not out-of-control the way much of New York City was in the 1970s and 1980s.  For example, when we got off the bus, the first thing that greeted us was a police raid against African street merchants selling counterfeit luggage.  Yet the prevalence of graffiti also suggests that the police (and the public) is fairly lax about enforcing standards; it's not something you see in Boston or London or Paris, not to the same extent, and not on private property.  (Although, once again, much of New York's outer boroughs looked like this back in the 1980s.) 

In other words, while the Greek economy might not yet officially be in recession, our careful powers of observation lead us to predict that the numbers are going to get much worse very quickly, as the statisticians catch up with reality.

So what's happening?  And what is to be done?

¡Viva ... uh ... Texaco?

  A while ago, insecure Americans got themselves all worked into a stupid dither about a Mexican vodka ad.  Now, in a sign of great maturity, Mexicans are refusing to get worked up about a European hamburger ad for something called the “Texican” that Burger King has run in the United Kingdom and the madre patria. 

Burger King is going to pull the ad anyway, just like Absolut pulled its.  You be the judge.

Hat tip:  Ganchoblog.

Observatorio Argentino 10: French lawyers declare war!

  It seems as though some French lawyers have decided to do a Rogers on the Argentine Republic. 

A few years ago, in 2005, Argentina repudiated a big chunk of its foreign debts.  Since then, the jilted bondholders have been trying to get it back.  On April 7th, the famous NML-Elliott announced that their lawyers managed to get a French bailiff to put a stay on all Argentine accounts in the country.   “The frozen assets in France are not diplomatic, and therefore are not protected by sovereign immunity,” said an Elliott spokesperson. 

Well, Buenos Aires wasn't going to take this lying down.  Elliott had already tied up funds held in France by the Banco Hipotécario and Banco Central.  The Argentine embassador to France, Luis Ureta, complained to the French foreign ministry.  The French diplomats were not happy to hear the news.  “On Monday night, a bucket of cold water landed on the heads of the diplomats at the Latin American Desk of the French foreign ministry,” was how La Nación described it.  The Argentines asked France to unfreeze the accounts “by any means necessary.”  (Argentines are not Filipinos:  I don't think the phrasing was deliberate.)

The French response?  Well ... it was rather American, actually.  A spokesman expressed support for the Argentine position, and then told the Argentine government that if they didn't like it, it was up to them to appeal.  In the interim, the Argentine embassador is paying for burnt-out light bulbs and the like out of his own pocket.  I suppose the embassy employees are getting paid back in Argentina and withdrawing their salaries out of ATMs, or some such.  The account itself is only a million euros or so, but man is it a pain to have to run a big office without any access to, you know, modern finance. (Although many Argentines have some recent experience of doing exactly that.)

Anyway, it's a bit of mess.  Argentina has already lost access to several hundred million dollars worth of bank accounts and all of the nationalized pension funds held abroad.  About the only bright light in the legal firmament is that a New York judge just declared that the recently-nationalized Aerolineas Argentinas is “not an alter ego or agent of the Republic, and the recognition of Aerolíneas’s independent status won't serve as a fraud or injustice against the Republic’s creditors.”  So that's one bright spot.  

In other news, I've added an “empire” tag to this blog.  I'm still not sure what I mean by it, but once I figure that out, I'll try to reclassify past posts appropriately.  Suggestions?

Oh, and go listen to Will.  I need help with this stuff!

Guest post #3: Battle for the Empire

  The soldiers of the Finnish Guard joined the other units of the Russian Imperial Life-Guard in Białystok on April 11th, 1831. By this time, the Polish-Russian war had been raging for two months, and the insurrection was spreading, with violence and mayhem escalating on daily basis. On the same day as the Finnish soldiers listened Colonel Ramsay’s lecture on the Russian War Articles and the letters of protection issued to the Polish civilian population, one Russian cossack regiment massacred civilians in the small Lithuanian village of Oszmiana. The event was subsequently commemorated in Adam Mickiewicz’s epic poems.  

The Polish-Russian war was fought on two fronts.  In the south, on the eastern side of the Vistula, the main 100,000-man Russian army (under a Baltic German field-marshal, Hans Karl Friedrich Anton von Diebitsch) advanced directly towards Warsaw.  Meanwhile, in the north, Grand-Duke Mikhail Pavlovich’s units of the Russian Imperial Life-Guard (the Finnish Battalion included) approached the Polish capital from the northeast, through the dismal woodlands between the Narew and Bug rivers in Mazovia. You can get a rough view of the surroundings from the map.   (Click on it for a larger image in a new window.)

Diebitsch’s army crossed the frontier on February 5th, fully prepared to crush the Polish rebellion. Resistance, however, proved to be a good deal tougher than anticipated; as mentioned before, the Congress Kingdom had a large, professional standing army, which now proved its mettle. On February 25th, the Poles halted the Russian advance in the bloody battle of Grochów.  The Poles then began a counteroffensive. Lieutenant-General Ignacy Prądzyński, the Polish chief of staff, defeated the Russians at Dębe Wielkie on March 31st, and again at Iganie on April 10th. 

But wars, like baseball games, aren’t over until they’re over. 

Guest post #2: The Guardsmen of the Empire

   We continue the story from December 14th, 1830, when the Finnish Guard received its mobilization orders and started to prepare for a long and arduous journey to the Polish battlefields, on behalf of the Emperor and the Fatherland. [The “Fatherland” would be Finland, not the Russian Empire, right? In our hemisphere, we’re not used to those distinctions, except maybe the Canadians.  And the West Indians. And the Puerto Ricans.  And the Colombians.  And … oh, never mind.   —ed.]  However, before we describe the Finnish participation in the suppression of the Polish independence struggle in any further detail, it’s perhaps best to describe those men who ended up serving as tools of the Imperial Russian war machine in the said campaign. What kind of a unit was the Finnish Guard, and what do we know of its officers and soldiers?   

Guest post #1: Empires and nationalities

  Hello, everyone. For those who don’t know me, and for those who are wondering why I’m posting here, it’s perhaps best to start with some details.  [No pix of you with a dangling cigarette and sunglasses? —ed.]

Who am I? My full name is Jussi Olavi Jalonen. I’m a single man on my thirties, and after a long residence in the city of Tampere, I now live on the Western Seaboard of Finland. Why am I posting here? Well, because Noel suggested it. I’ve done all sorts of things for living, but these days I’m basically a free-lance researcher and writer. Guest posts on a high-quality weblog are just as good a way to kill time as anything else.  [We’re high quality! —ed.] 

I write about history. As said, I’m single, but Clio is a very demanding mistress. [My wife is very understanding of that, and it's one of the many reasons I love her. —ed.]  As for my field of study, you could probably say that I’m more interested in Power than Money.  [One often begats the other. —ed.]  I specialize in military history, in a very broad sense. Two months ago, an article that I wrote on the interned Polish soldiers in Finland in 1940-41 appeared in a publication of the Finnish National Archives, and just recently, Studia Historica Septentrionalia published another article that I wrote on the theme of comradeship-in-arms. In particular, however, I’m interested in soldiers who have, for one reason or another, ended up serving in the military establishments of foreign powers — usually, in the service of their Imperial master, occasionally in the service of its enemy, or sometimes even in conflicts where there appears to be no vested national or ideological interest whatsoever. I’ve written articles on the Finnish volunteers in the Boer War, Finnish volunteers in the Waffen-SS, and also a biography of jäger colonel Eino Polón, Knight of the Mannerheim Cross. For those who don’t know, the term “jäger” refers to the Finnish independence activists and volunteers who served in the Imperial German Army against Tsarist Russia in 1915-17.

One particular thing that I find fascinating is the historical contrast between Finland and Poland in their relations towards Russia; as the most recent example, you may remember that during the South Ossetian war last August, Poland sided openly with Georgia, while Finland, as the head of the OSCE, attempted to mediate the conflict and maintain communications with Russia. These contrasts between Finland and Poland have very deep roots. Consider the Finnish Guard’s participation in the 1831 Polish campaign. (Last year, I wrote an article on this topic for the Polish weekly Tygodnik Powszechny.) 

But what was this so-called “Finnish Guard?”  What exactly happened in Poland in 1831?  And how did it create such long-standing differences between the two border countries?

A modest proposal

  I have really got to start cross-posting on AFOE.  They've given me permission; I just don't feel like my Europe stuff lives up to their standards.

Anyway, the Economist had an interesting column about Iceland and the European Union.  The conventional wisdom is that Iceland would like the euro.  But there are political difficulties.

So why not associate with the United States?  I don't mean become a state, that would be stupid.  Icelanders aren't Americans, and truth be told, they don't seem real likely to become Americans.  They don't listen to reggaetón or country, they don't build malls, they don't put neon-tubing on the underbodies of their cars or shoot guns for fun.  (Cue Jussi telling me that I'm a nationalist.  I am coming around to his point of view.  That is not a good thing.)  But what about becoming a Commonwealth, like Puerto Rico or the Northern Marianas?  They'd have to give up membership in the European Economic Area, but what has that ever gotten them?  They wouldn't have to give up membership in all those Nordic agreements, although they would have to allow Americans to become Icelandic citizens after one-year residency, same as Puerto Rico does. 

So what would this magnanimous move cost the American taxpayer?  Nothing!  Icelanders over age-65 wouldn't qualify for social security under current law; they haven't paid anything in.  But let's say the U.S. waived that, and paid Icelandic pensioners the minimum benefit, just to be nice.  What would be the cost?

A back-of-the-envelope calculation:

Data I'd like to have

  Where can I find time series on:

1. Gazprom's revenue, by market;
2. Russia's transit fee revenue, by originating market;
3. The average wholesale price per standardized unit for Russian gas and other gas, by market.

Get me that data, and I might be able to make some sense out of Russian policy.  I will say that current events make me think that Russia doesn't want to snarfle off bits of Ukraine.  You can extract a lot more surplus out of a neighboring vassal than you can out of your own citizens.

The resource curse doesn't exist, and please stop talking about it

  My friend Will hopes that oil prices stay low, in order to insure that the Russian Federation remains behaved.

My response:  Please get the stupid, and I mean truly monumentally stupid, idea of the resource curse out of your heads?  It's a well-accepted idea, but it's just plain wrong.  No matter what Tom Friedman writes about it.

Stephen Haber and Victor Menaldo have a paper coming out that shows that there is no, squat, zero, ningún relationship between democracy and oil resources.  Haber and ... uh ... me ... will eventually have a paper showing the same thing for civil war. 

But hell, maybe Russia is different.  So my question for you all is simple.  Why would an authoritarian government, no, why would a dictatorship give up power because its export revenues went down?  That makes no bloody sense.  It could default on foreign debtors.  It could blame foreigners for any crisis.  It could shoot dissidents, you know, the way Panama did under Noriega. 

Is there any reason to believe that a fat Russia would be more democratic and less expansionist than a lean Russia?  No.  F@&k no.  There isn't any reason to believe the opposite either, of course ... but by God do I wish that people would stop fooling themselves.  Resource money has fueled democratic transitions and dictatorial takeovers, foreign expansion and foreign engagement.  Those who know Russia better will be able to predict that country's idiosyncratic political reaction to declining export revenues ... but why any of the information in this story, about governments trying to crack down on the bearers of bad news, would make an observer hope for sustained bad news is beyond me. 

Ah, here comes my first AFOE cross-post.  But your reactions first.  At least until I can find the damned keys to that blog.

L’énergie atomique

  The Economist has an interesting article on French nuclear energy.  You read about it here first.  Be sure to check out the comments if you click the link. 

I have a terrible feeling that the emerging potential depression has changed the economics of nuclear power, such as they were.  First, the cost of traditional energy sources has plunged along with the overall demand for energy.  (I don't think today's low prices will outlast the downturn, but the fact remains.)  Second, the credit markets are pretty messed up at the moment.  How would you finance a project based on the idea that energy prices will rise in the long term?  In the long term, everyone is bankrupt.  Third, nuclear power plants as they are currently designed seem to be pretty bad as a Keynesian fiscal demand boost.  The lead times are far too long; it'd be years before a project leads to a dime of actual purchases.  That means that governments will be ill-advised to include subsidies to nuclear power in the capital projects that they are going to undertake over the next few years. 

Still the energy of the future.  Perhaps the article's relative optimism will prove justified.  I hope so, but it isn't how I'd bet. 

What? Already???

  This is not a political post.

As some of you know, I like zombie movies.  One of my favorite genres.  Don't ask me to explain it.  Dawn of the Dead got into my head when I was a kid, scared me to death, and I suppose I never got it out. 

I also have no problem with remakes.  Some, like Cape Fear, beat cold the original. 

But a remake of a movie that only came out last year?  What??  And a Spanish movie at that.  It doesn't even qualify as a foreign-language film.

So go rent Rec.  Don't see Quarantine. 

That's filmmaking.

Imperialism can really pay

So there's Panama.  Well, what about Suez?

The Suez Canal started under very different political conditions, inasmuch as the Egyptian government was on-board with the project.  So on board, in fact, that it not only put in 45 percent of the initial capital (£1.5 million), it promised the Compagnie de Suez the free use of forced labor to build the thing. 

That wasn't nada.  In 2007 pound sterling, the Egyptians put in £149 million.  But as I've mentioned elsewhere, the world was poorer then:  relative to the growth of the British economy since then, that would be equivalent of plonking in £4.3 billion today.  That would be a lot of scratch for the current Egyptian government; it was an amazing amount of scratch for 1854's. 

So far, so non-imperialistic.  Awful for the poor people who had to live under Cairo's despotism, but that'd be like blaming Russia for the shortcomings of the Kazakh government.  (Wait ... no, I'll leave that to those who know more.)

The story gets better, though.  It's an amazing bit of imperial skullduggery ... and perhaps the coolest thing about it is that it could easily happen today.  I mean, it's not like world powers scarf off strategic parts of nearby states for strategic gain these days.

So, with the caveat that what I'm about to tell you is pieced together from primary sources and could well be wrong, the story is below.

Nicaragua dreaming

Somehow I just don't think that this is going to happen.  I mean, it's nice that Managua recognized South Ossetia and Abkhazia, but Russia just doesn't have the money right now.  No, if you're going to reward your faraway friend (although I'm at a loss as to why Moscow would want to) this seems like the way to do it.

And much as Nicaragua is a full-up member of the Alternativa Bolivariana, Venezuela doesn't have the money to toss away on such a megaproject right now.  Astoundingly enough, Caracas is going to have to cut back spending if oil goes below $90, a level of fiscal irresponsibility to rival Washington. 

Still, for a guy who proposes transcontinental railways and really likes to build stuff, I'm surprised that a Nicaraguan canal hasn't caught his eye. 

Who cares about Georgia? Not the markets.

There has been a lot of talk recently about how the markets are punishing the Russian Federation for its actions in Georgia.  Dan Drezner, for example, writes:  “An estimated $21 billion left Russia last month, and the RTS Index has declined by more than seven percent this month ... this is a pretty high price to Russia to pay for creating two unrecognized buffer states.” 

It isn't just political scientists.  Investors also believe that the markets punish aggressors on their own.

I am not so sure.  No, let me be stronger.  I am almost positive that Dan Drezner is wrong about the economic damage that Russia is taking from its actions, even if I agree with his assessment of Russia’s weak political position. 

Markets do not punish successful aggressors.  Other countries can impose sanctions that punish aggressors, and that will hurt the markets.  That logic, however, runs exactly the other way from the sanguine belief that our brave new world of globalized markets contains automatic mechanisms that contain interstate war.

This chart shows the evolution of four different Russian equity indices.  The RTS-1 that Dan referred to in his post is in dark red.  The date that the Georgians started the war (August 8th) is represented by the bright red vertical bar.

Russian indices were in decline well before the war started.  If anything has happened since, it is that the decline has slowed.  This is not consistent with the hypothesis that the markets are punishing Russia for the war.

Below the fold is a closer look at the same data.  The closer look makes it even clearer that the markets are not punishing Russia for invading and carving off chunks of Georgia.

WTF moment

Slate is running a travelog about an American's trip through Germany's “eco-empire.”  I have to say that TPTM got there first.

Anyway, as I was reading it, I came across two moments that startled me.  The first was when our protagonist's Dutch-Bolivian travelling companion praised Mein Kampf.  This doesn't surprise me at all from the Bolivian side.  Mexicans aren't Bolivians, but I've heard middle class Mexicans say “At least he organized the youth,” in praise of Hitler, and I've seen young female middle class Mexicans reading and speaking well of Mein Kampf in upscale bars.  But ... the woman in the Slate piece was half-Dutch, and the author gave the impression that she had been raised in the Netherlands.  So either I'm in denial about Dutch culture, or the author should have specified that his female friend was much more Bolivian than Dutch.

But that wasn't the WTF moment.  The WTF moment came here:

It was time to leave Bremen. Mymza had to get back to Amsterdam, and I was going to head deeper into Germany in a hybrid. We arrived at the Eurocar rental agency, and the attendant said, “Guten Morgen. Le puedo ayudar with something, s'il vous plaît?”

I knew this E.U. custom: Jam all your languages into a sentence and let the other person answer according to their preference.

I have never come across this.  Now, admittedly, most of my E.U. experience has been in the Romance zone, which may be different.  But is this really an E.U. custom?  Information wanted, please. 

Doug across Africa, but first Brussels

This post goes out to my friend Doug Muir, over at HDTD.  Doug is going to Burundi.  Burundi, unlike neighboring Rwanda, is still at risk of relapsing into violence, although I wouldn't want to exaggerate it.  Doug writes, “I don't know if Burundi is the sort of place that stimulates blogging,” which I don't understand, and “nor whether the work will allow much time for it,” which I most certainly do.  Anyway, here's a vote for some reportage on what the situation looks like on the ground. 

Before that, he is going to Brussels.  Brussels is interesting.  The two main train stations are strangely chaotic, a throwback to the 1980s in New York.  The smaller one smells of vomit and has a population of rather hostile-looking teenage runaways.  But the architecture is pleasant. 

The larger one, Midi, closely resembles Penn Station in New York, save that it's rare to have to break up a screaming match between a dude in a leather jacket and a tall slender woman in Penn Station these days.  The strange thing, to an American, was the lack of reaction.  I ran towards the guy yelling, "Llame seguridad!" but an Algerian and a British dude (both of whom seemed to work in the bar) got there first and grabbed him, telling him ... something.  Meanwhile, all these other people stood around and watched.  Ignore it completely, that I understand, jump in, that I understand, but gawk?  A little odd.

I don't suppose that this will be obvious to people who don't know me, but I like the above kind of thing.  At least now that my city of birth no longer has it.  Brussels is a real city, and I very much like the place.  Quite a bit. 

Outside Midi is an immigrant neighborhood well worth visiting.  More below the fold.

The Finnish threat

Ah, with Finnish allusions enveloping the blogosphere, it is good to get some perspective.

First, a sociological view:

Then, a historical film from 1952 about the geopolitical challenge.

Back to the Revolución Bolivariana, next post.

The Myth of French Nuclear Technology

  A lot of myths accrue to France and the French.  For example, that the French military isn't very very very good at defeating its enemies.  Or that the French don't get fat.  Or have bad taste in comedy, or can't make decent action movies (most untrue!), or are peculiarly racist towards immigrants.  (Although ... another post.) 

Me, I love France in that peculiar way that (I like to believe) only Americans can.  So much of the place reminds me of home!

But still, I gots to punch the myths.  The latest one I've run into is that France has discovered a way to make nuclear technology pay that doesn't involve huge dollops of taxpayer money.  As with so many things, the proof comes from Finland, a country I really have to visit soon.

Volando el avión el la madre patria

We managed to travel from Barcelona to Sevilla and back without showing any identification at all.  Travelling from Brussels to Berlin wasn't quite so easy, but the security check could best be called perfunctory.  Even returning to the U.S. of A. from Heathrow wasn't that bad ... it's amazing what a difference not needing to take out your laptop or remove your shoes will make.

I'm far from the first person to complain about airport security theater.  I'm certainly not the first person to point out that most of the measures don't seem to make flying any safer.  Hell, I'm not even the first person to point out that the TSA blog manages to consistently undercut it's own objection to the idea that most of the measures are just for show.  (Love the badges and blue uniforms!  Of course, that doesn't mean that the TSA people have police powers, but it sure makes it look like they do.  But it ain't theater, no.) 

I will, however, put in a brief for the defense.  Given that so many people have an irrational fear of flying, there may in fact be an economic return to security theater.  After all, if it makes people feel safer, they may be more likely to fly.  In theory, the return should even be calculable.

Has anyone tried to calculate it?

Piratas atacan la madre patria

Newsflash:   pirates just captured a Spanish fishing boat off the coast of Somalia.  A Spanish frigate has been dispatched from the Red Sea and Madrid has requested assistance from NATO countries with a naval presence in the area. 

Considering as I just posted about pirates, I figured that it'd be remiss not to mention that the French raid doesn't seem to had an immediate deterrent effect.  Not that there's anything surprising about that.

Pirates!

In a scene of most superior uber-cool, the French military arrested the Somali pirates who’d captured a cruise vessel returning from the Seychelles on April 4th. 

So, of course, the New York Times would take the opportunity to publish an op-ed blaming namby-pamby British cupcakes for failing to enforce international law by arresting Somali pirates.  Why did the author claim that the Brits were wussing out? Because they were all worried that these scurrilous lawbreakers might claim asylum if they were brought back to the U.K.  Worse yet, the Somali government might violate their human rights if they were turned over to Mogadishu.   

“The British attitude has come a long way since the days when pirates were chained to pilings at Wapping and left there until the tidal water of the Thames ebbed and flowed over the bodies three times. So much for Britannia ruling the waves.”

Sounds good, right?  Fits a whole narrative of European decline, although, well, the part about French military prowess doesn’t quite fit.   

Too bad it’s all complete crapola.  Details below the fold.

Estar de acuerdo con el sentimiento en la madre patria

The post after my next post will be about the Dominican Republic.  The next post will be controversial.  In preparation, therefore, I am going to resurrect something from the madre patria about which I am sure that we can all agree.

And we're all a part of the:

Although I'm not so sure about this:

UPDATE:  Here's a close-up of the above building, with the sign in question more visible.

Sabiduría del occidente para los griegos

Doug recently wrote in A Fistful of Euros, “The Macedonia name issue is so stupid that it’s almost physically painful to write about it.”  I have to agree.  I made the mistake of scrolling down the comments thread.  Jee-sus.

Viewed from the extranjero vecino, the whole thing is incomprehensible.  Let me recap.  A smaller weaker country on the northern border of another has the same name as a province of the latter.  The larger stronger country fears that as long as its neighbor claims that name, it might also claim the province.  How the whole smaller-weaker versus stronger-larger thing would be overcome is left unexplained.

Somebody from the Spanish-speaking part of this hemisphere needs to take a Greek minister aside at a U.N. meeting and say something like:  “Listen, buddy, I understand your problem with northern neighbors and names.  We have a larger stronger northern neighbor that claims our entire continent in its name.  And, you know, periodically invades.  Like, recently, not umpty-scrump centuries ago.  But you don’t see us making a public fuss about it, so will you get over yourself already?”

Conversely, they could just go with Alta and Baja Macedonia.  Don’t even translate “Alta” and “Baja,” just transliterate ‘em.  I’m sure they sound fine in Greek, exotic like.  Be good for tourism. 

Doug, can it really be about the name?

Cuidando a los niños en la madre patria

I am a firm believer in the power of personal experience.  Of course, it’s dangerous on its own:  you never want to reason by anecdote.  On the other hand, some abstract hypotheses are just hard to accept in the face of personal experience.  When the data are ambiguous, I turn to my lying eyes.

There has been an increasing amount of discussion given to low European fertility in recent years.  One problem with the whole discussion, among many, is that there is low fertility and then there is low fertility.  Almost all of Europe is “low fertility” by historical standards, but some countries like France and Norway are certainly going to replace themselves, and others like Ireland and Denmark and the U.K. are quite likely to follow suit.

But there are the superduperultralow fertility countries, like España, where people seem to have given up on child-bearing as a bad deal.  As many people besides me have pointed out, TFR is a really bad measure of fertility, but for what it’s worth Spain clocked in at 1.4 in 2006.  Unlike some other countries, however, in Spain the pictures match the impression given by the TFR.

Some very rough thoughts below the fold. 

No saben lo que hacen en la madre patria

Okay, this had to rank up there among the things that we never expected to see in Sevilla.

It isn’t as bad the two clueless dudes wearing swastika T-shirts whom I ... what’s the word? ... accosted back in Mexico City around 2004.  (There was short-lived fad for the symbol among young chilango working-class wannabe rebels; no political significance whatsoever, except maybe to show up the abysmal state of world history education in Mexico’s public schools.  Thank you Mike and Tom and Pat, for protecting me from myself.)

But still, a Confederate flag?  Even if it was a souvenir shop, my negative reaction is visceral. 

ObMusic:  Jason Ringenberg, “Rebel Flag in Germany.”  Download it now.

Dando las propinas en la madre patria

Do Spaniards tip too much?

Of all the things that I never would have expected to be a public controversy, tipping too much had to rank up there with charity and motherhood.  But there it was, a major topic of discussion in a local Café de Indias.  (Spanish cafés, save Starbucks, serve lots of alcohol in their coffee drinks.  I happen to think that this is a Good Thing, but the Starbucks explosion bodes ill.)

Why?  Well, the Economy Minister, Pedro Solbes, told his countrymen that the reason they think inflation is higher than it is might be because they’re all too stupid to realize that a one euro tip is too high on, say, a €2.00 drink.

I took an utterly unscientific poll of Sevillana waitresses on the topic.  The reaction?  One snort, two guffaws, an eye-roll, and two exclamations of the word “puta.”  (The latter two were born in Honduras.) 

The idiocy wound down when reporters found out that the minister and his friends regularly dropped only four euros on a €60 lunch.  The fact that food prices have skyrocketed also helped.  Food prices jumped 0.5% in November (6.3% at an annualized rate), after a similar increase in October, and the Economy Ministry managed to stick its foot in its mouth again by recommending that people eat more rabbit to save money.

Anyway, this all begs the question:  how much should you tip in the madre patria?  I’ll be damned if I know.  Everybody gives you a different answer, ranging from “nothing” to “just like in the United States.”  Help!  Leticia?

Manejando el auto en la madre patria

Haven't driven a car in Europe since 1986, and that probably wasn't legal.  Closest I came this trip was taking a taxi from the Barcelona airport (which is less than necessary, since the train is quite good), and while the taxista made great conversation — “Both parties are the same.  But that's fine!  The country is going well, so why change anything?” — his driving was quite boringly professional. 

Same thing for Sevilla.  The most interesting thing that cabbie from the airport did was explain that the green-and-white flags we saw waving from all the buildings on the outskirts of town were either the Andalucian provincial flag (the striped one) or the flag of the Betis soccer team (the one that vaguely looked like Saudi Arabia's). 

I can, though, say something about being a pedestrian in the madre patria, which is:  good, but frustrating.  Good, because this is one of those countries where drivers don't seem to want to kill you.  (Well, unless you're a jaywalker in Barcelona.)  Frustrating, because Sevilla (Barcelona, not so much) is one of those places where pedestrians will stand and stand and stand and wait for the light to change, regardless of oncoming traffic.  Now, I'm from New York, so on my own I made like Eminem and just didn't give a ****, but when I was with Amma we hewed to local customs ... it wasn't easy.

And I can say something about scooters.  Don't.  Ride them.  Vehicular craziness in Sevilla seems to be reserved for motor scooters.  And Barcelona leaves me at a loss for words, but thankfully still with my life. 

On the whole, I found car-people interactions to be far superior to Boston, where the f****** drivers honk at pedestrians.  That says more about Boston than Barcelona, though, because cars don't routinely honk at pedestrians anywhere else in the United States. 

What's the matter with Boston?

Tomando el tranvía en la madre patria

There are two types of rail transit systems in the United States.  The first are actual genuine rail transit systems, you know, that get people around and without which their cities would collapse.  Or at least not work very well.  New York’s subway, Chicago’s El, Boston’s T, Philadelphia’s SEPTA, San Francisco’s much-hated Muni, even (after many years in the second category) Washington’s Metro.

And then there’s art.  Take Miami-Dade’s Metrorail.  In fact, the county went so far as to deck the tracks out in neon tubing, just in case you missed that the point was public art, not public transportation.  And there are others.  How many people would notice if San José’s light rail shut down?

Barcelona’s Metro (above) falls into the first category.  It’s incredibly efficient:  never did we have to wait more than two minutes for a train.  It’s got these signs that tell you when the next train will arrive, and it does.  The old trains are comfortable, and the new trains have arrived out of the future, with open articulated connections between the cars and bright video screens.  There’s even this bitchen feature that you first think is stupid until you realize that it really speeds things up:  to get the doors to open, you got to push a button.

One of the things that Amma and I like to do when we’re in a strange city is grab a public conveyance and take it to the end of the line.  You can learn a lot that way.  And Sevilla has a futuristic streetcar that runs along the pedestrianized downtown.  So ...

Leyendo los archivos en la madre patria

I’ll try to keep up the slack while Doug’s in Germany this holiday season.  This one goes out to Carlos’s paternal grandparents. 

The Republic of the Philippines is unique in Asia in how well it’s assimilated it’s Chinese population.   Chinese-Filipinos have served their country in every position from private to President of the Republic, and nobody seriously questions their Filipino-ness.  As a result, for all their communal solidarity Chinese-Filipinos consider themselves Filipino first, Chinese-Filipino a rather distant second, and Chinese-Chinese not at all.  (I have a sneaking suspiscion that future Chinese governments will find themselves unpleasantly surprised by that fact.)  This didn’t happen in Burma or Thailand or Vietnam or Malaysia or Indonesia. 

So why did it happen in the Philippines, and what does any of this have to do with the madre patria? 

Amma and I were in Sevilla because I was looking for tax and budget data on the Spanish Philippines.  The first place to look for that is the Archivo de Indias.  You can see the main building behind the beautiful woman in the above photo.  The reading room is across the street behind the main building:  look for the sand-colored edifice to the right of this group of Sevillano pedestrians.

In 1864, Madrid decided to modernize the Philippines’ tax system.  Since specific taxes laid on Chinese generated about 7 percent of the islands’ revenue, the Crown commissioned some fascinating reports before deciding on the specifics of the reform.  Extracts below the fold:

Comiendo los alimentos en la madre patria

Somebody ... probably my mother ... once described Spanish food as “letting the ingredients speak for themselves.”

“Hearty peasant food,” Amma says.  “Solid presentations of uncommon meats.  Satisfying to the stomach, but not so much to the tongue.” 

I wouldn’t call it bland, exactly.  But comida andaluza does, I think, explain the Philippines.  The Philippines got the full force of a cuisine that liked to “let the ingredients speak for themselves,” only without the ingredients.  Philippine food is, perhaps, Andalucian food before the conquest of Mexico brought the ingredients to the peninsula.   

Or not.  It’s a hypothesis, anyway. 

Anyway, Spanish cuisine is just plain food — alimentos — more than a “cuisine.”  Maybe I’m just too used to it, having grown up on a faintly Americanized version of the stuff.  Meat-heavy fried food with very light seasoning. 

Overcooked venison is actually pretty good once you get used to it, and I’ve already mentioned croquetas.   

Plus, tapas are fun, although much better in America (or Catalunya, for that matter) where the substance comes from Mexico and Southeast Asia but the style is español.

Imitando a la iglesia en la madre patria

How is Starbucks like the Catholic Church?

In América, and especially in Mexico, the Catholic Church sited its cathedrals on the former sites of indigenous temples.  That way, the local populations faced a minimal change in their daily habits, making (in the view of the prelates, at least) their conversion easier.

In España, and especially in Andalucía, Starbucks locates its branches right next to the former (or soon-to-be former) sites of the Café de Indias chain.  It’s new enough that you can actually spot some of the dead old branches, and you never see a Café de Indias without a corresponding Starbucks.  It’s not just downtown:  we saw the same phenomenon in a most unfashionable section of Avenida de la República de Argentina on the other side of the Guadalquivir.  It was too dark to get a photo of that Starbucks, unfortunately, but here you can see a dead Café de Indias on the far right of the picture. 

One sure-fire way to make a Sevillano crack-up with uncontrollable laughter is to paraphrase this story.  Just be sure to mention the giant robots.

Mirando la tele en la madre patria

I came to Barcelona in order to present “Gunboats and Vultures” at a conference on sovereign debt. 

I was having some trouble figuring out what I could say about Spain or Catalonia or Barcelona, until I turned on the television in our hotel room. 

I used to think that Florida had the most lurid news programs in the world.  Not after seeing Gente on TVE-1, I don’t. 

The first story involved a woman killed by her husband in a long-term abusive relationship.  Marital abuse is a hot issue in Spain (even if it is unclear whether the problem is any worse than anywhere else in Europe), and the story certainly sounds newsworthy.  The second story was about a man who tortured his wife to death over a three-day period.  A little surprising, but it was the same topic, and perhaps TVE was making a political point. 

The third story covered a man who’d burned his wife alive, provoking his children to renounce their last name, followed by a bit about a father who killed his daughter’s boyfriend, a little girl crushed by rubble falling off a construction site, a fatal automobile accident, another fatal automobile accident, a decision not to prosecute a participant in yet a third accident under the country’s Good Samitaran law, and a fellow who shot his dog. 

Finally, after a bit about a calendar for homeless puppies, we got to hear about a woman who takes care of her completely incapacitated father and (perhaps in compensation) a final piece about “in-shape grannies.” 

Dulce María.  I’m going to shoot myself.  I mean, Primer Impacto back home isn’t the best news program on the planet, but this makes it look like Sixty Minutes.