Ben Muse

Economics and Alaska

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Western water

Geitner Simmons is starting a series of posts on western water issues at his blog "Regions of Mind". The first in the series, titled "Can the West’s ‘hydraulic society’ be saved?" was posted on Monday, Jan 27, here: "Can the West’s ‘hydraulic society’ be saved?" Simmons is an editorial writer for the Omaha World-Herald. His blog carries many posts on history, especially U.S. history. This particular post links to newspaper articles describing the severity of the current drought and recent inter-state conflicts over water rights. He starts off with some great quotes:
    "Consider three quotes:

    This American West can best be described as a modern hydraulic society, which is to say, a social order based on the intensive, large-scale manipulation of water and its products in an arid setting.

    -- Donald Worster, historian, 1985

    We would be wise to remember every moment that roses also blossomed in Mesopotamia and Syria and Tunis and Ur of Chaldees -- and they are desert wastes now.

    -- Bernard De Voto, historian, 1948

    During last summer's scorching drought, some metro Denver neighborhoods, including Highlands Ranch, continued to enforce covenants that require heavy watering of lawns to keep them green.

    -- Denver Post, Jan. 24, 2003"

Glenn Hubbard

Slate carried an article Wednesday by Chris Suellentrop on Glenn Hubbard, the Chairman of the President's Council of Economic Advisors: "Glenn Hubbard. First-rate economist. Tax-cut champion. Presidential yes man". The theme is that the Council is meant to be a source of disinterested and neutral economic advice for the President - that it doesn't have a role of policy coordination and advocacy (the coordination role is more properly placed elsewhere - in the National Economic Council for example). A Council that advocates loses its reputation for disinterested analysis, and at worst begins to shade the facts to make its case. However, Hubbard - widely considered the "primary mover" behind the President's tax cut proposals, has taken on an advocacy role, and the bad results hypothesized above have taken place:
    "Hubbard's fierce advocacy of specific tax reforms—both within and without the administration—has made him increasingly willing to adopt the administration's politically expedient, rather than economically sound, justifications for its proposals. It's not fair to expect Hubbard to check his beliefs at the White House door, nor is it objectionable that Hubbard is a conservative economist—after all, he's been one for years. The problem is that his eagerness to enact his preferred legislation has made him willing to adopt the bad logic of the administration's talking points and spin. In Hubbard's book, the best policy is tax reform, not honesty...

    "For the past few months, Hubbard has dissembled on a new topic, this time the deficit's relationship to interest rates. Lately he has been insisting that there is "no link" between the two. "That's 'Rubinomics,' and we think it is completely wrong," Hubbard said in December. But Clinton economist Brad DeLong dug into Hubbard's textbook Money, the Financial System, and the Economy to find this quote, among others: "By the late 1990s, an emerging federal budget surplus put downward pressure on interest rates." Hubbard's textbook even has a handy-dandy formula explaining the relationship, which DeLong posted on his Web site."

New electronic rulemaking initiative

Cindy Skrzycki of the Washington Post reports on a new Federal initiative to place regulatory information on the Internet, and to allow for electornic comments:
    "...With the introduction today of, the Bush administration is taking the first step to expand this budding interest in electronic rulemaking to the entire government and populace. The goal is to enable anyone with a computer and Internet access to find every federal regulation that is open for comment, read it and submit their views..."
Go to "U.S. Opens Online Portal to Rulemaking. Web Site Invites Wider Participation in the Regulatory Process " for the full article. The web address given is "" but I wasn't able to connect to it early this morning.

Free market environmentalists criticize Bush

President Bush just can't seem to satisfy anyone - mainstream environmentalists are definitely not happy with his policies, as evidenced by the daily newspapers, and the two reports I noted in this post on January 19: "Two new reviews of Bush Administration environmental record". Now he's getting it from the free market environmental think tank "PERC" as reported by the Environmental News Service (ENS): "Bush Supporters Unhappy With Environmental Policy".
    "A free market environmental think tank with close ties to the Bush administration is disappointed with the President's environmental policy, but not for reasons often cited by other environmental groups. The Political Economy Research Center (PERC) gives the Bush administration low marks because it has not aggressively moved forward with environmental policies that are based on free market principles.

    "Environmental policies can work better and be more cost effective, according PERC, when they rely on market based incentives, private initiatives and voluntary action. But the Bush administration has failed to apply these free market principles to its environmental policy, a new report from PERC finds, and has thereby ignored the rights of property owners and the benefits of decentralizing many environmental protections and regulations..."
Click the ENS link to see the complete story. The PERC report may be found here: "Free Market Think Tank Gives Bush a C- on Environmental Policy"

How big are the world's economies?

The "Volokh Conspiracy" had a series of posts on the relative sizes of the world's economies today. The first post directed the reader to the "Impearls" blog for the following post: "Largest economies of the world — Updated to 2001". What's startling about this table is that although the U.S. is the world's biggest economy, China - not Japan - is the second biggest, Japan is third, and then India!! The table provides comparisons in terms of U.S. dollars, with conversion to dollars done so as to maintain purchasing power parity (PPP) - which was explained later in the day in this Volokh Conspiracy post: "Measuring GDP". If you want a more detailed - but still understandable - explanation of PPP look at this article in the Bureau of Labor Statistics magazine, Monthly Labor Review: "International Price Comparisons Based on Purchasing Power Parity". Finally, even later, the Conspiracy posted a link to a comprehensive World Bank survey of the relative sizes of the world's economies here: "Size of the Economy" Both

The ways of (some) powerful men

Yesterday, January 19, 1660, Samuel Pepys was summoned to the bedside of George Downing, one of the Four Tellers of the Receipt of the Exchequer, and offered a job "Thursday 19 January 1659/60":
    "This morning I was sent for to Mr. Downing, and at his bed side he told me, that he had a kindness for me, and that he thought that he had done me one; and that was, that he had got me to be one of the Clerks of the Council; at which I was a little stumbled, and could not tell what to do, whether to thank him or no; but by and by I did..." "Thursday 19 January 1659/60 "
Downing was not a very attractive character, as this quote, supplied by "language hat," makes clear:
    "Pepys’ second employer was not an amiable man. A rough, pushing, young careerist, George Downing had been bred in Massachusetts and had taken to the régime of pious aggression now established in the mother-country like a duck to water. After a short period as a preacher in Colonel Okey’s regiment, he had become Scoutmaster General in the Commonwealth army — a post for which his peering habits and quick, decisive, categorical mind admirably fitted him. He had since then been a member of Parliament and English Resident at the Hague. He was a great hand, as befitted one who moved in a world of secrets and intrigue, at ciphers or ‘characters’ as they were called in that age, and Pepys under his direction became a master of the same curious art. He held his post at the Exchequer as a minor employment, more for its emoluments than its importance, and performed it chiefly by deputy.

    Pepys was decidedly frightened of his new [in 1658] employer, whom he regarded as a stingy and perfidious rogue but whom he served with trembling and expedition. He was entirely at his beck and call when he was in England (fortunately, Downing spent much of his time in Holland), running messages for him, rising in the midst of his dinner to answer his summonses and even distributing his invitations when he gave a party. When he was remiss, he was soundly chidden by his master, who, as a good Commonwealth man, was not nice about minor courtesies…"
    "A description of Downing
    from Arthur Bryant’s Pepys bio"
David Quidnunc wonders about why Downing wanted to meet with Pepys while he, Downing, was lolling around in bed:
    "This is our second bedside appointment (recall Crew’s on Monday, the 16th). Does anyone else get the impression that these kinds of meetings are partly an indulgence of powerful people and (perhaps) also a display of their power?

    It’s reminiscent of the Sun King’s ceremonial rising as attendants (and the court) waited on him in Versailles.

    This also reminds me of the scene in Tom Wolfe’s “Bonfire of the Vanities” (both book and movie) in which the head man conducts a business meeting using his cell phone (while he’s watching a soccer match somewhere in England) and his underlings are trying to communicate through speaker phone back in the New York headquarters.

    Does it strike anyone else as interesting that the superior gets to loll around in bed, unshaven, messy, reclining, as the toady (shaven, I assume, and dressed, out in the cold weather and probably pretty early in the morning) waits on him?"
    "Bedside manners"
This reminds me of anecdotes in the most book in Robert Caro's biography of Lyndon Johnson, Master of the Senate:
    "There was, in fact, a purpose to at least some of his crudeness. Years before, while he was still only an assistant to a congressman, Lyndon Johnson himself had had two assistants, two teenage young men who had been his students when he was a high school teacher back in Texas. One, Gene Latimer, gave Johnson the unquestioning deference Johnson wanted; he would work for him for thirty-five years as "his slave - his totally willing slave." The other, Luther E. Jones, would not; ambitious and independent, he was afraid that "you lose your individuality if you allow someone to be too demanding for too long," and if he disagreed with Johnson abut something, he would voice his disagreement. Jones, a neat young man who was invariably well scrubbed, with his hair carefully slicked down, was reserved, almost prim, in physical matters; "Any kind of coarseness or crudeness just disgusted him," a friend says. Johnson began summoning Jones to take dictation from him while he was sitting on the toilet. "At first," Latimer says, "L.E. attempted to stand away from the door, but Johnson insisted he stand right over him. L.E. would stand with his head averted and take dictation. As both Latimer and Jones understood, the tactic was a "method of control" - employed to humiliate Jones, and make him acknowledge who was boss. Years later, Richard Goodwin, a speechwriter who had just begun working for Johnson, was summoned to the President's bathroom in the White House. Watching Johnson, "apparently in the midst of defecation," staring tat him "intently, looking for any sign of embarrassment," and "lowering his tone, forcing me to approach more closely," while "calculating my reaction," Goodwin realized that he was being given a kind of "test." Goodwin passed - and so had many of the staff members to whom Johnson had given the same test during his years in the House of Representatives." (Caro - Master of the Senate, page 122)
Samuel Pepys' weblog "The Diary of Samuel Pepys" is off to a great start. The blog/diary itself is well executed - it is getting a big boost from readers who add endless helpful comments, like the ones above from "language hat" and David Quidnunc.

The generation gap

We got a DSL connection to the Internet at my house on Friday - so this post at the Winds of Change blog attracted my attention. This is a short essay by Trent Telenko on the way new communication technologies are widening the generation gap: "Broadband Pop Sociology".
    "...This is something we have already seen between the computer-phials and computer-phobic. The example I used with Tom was what happened when the Army Colonel commanding the Army 21 brigade in 1997 National Training Center maneuvers lost control. The sensors and displays gave the commander accurate position information on all friendly and enemy units. He ignored the displays in favor of the radio channels he was used to. He couldn’t accept that the new communications channels used by his subordinates made his oral communication channel almost useless as a source of information on his own command.

    "His 20s-something tank crews were using their appliqué data terminals to navigate across miles of desert for refueling and reprovisioning WITHOUT GETTING LOST OR COMMUNICATING VERBALLY. The radio chatter that the Army Col. listened to, in order to determine what was going on, was missing. This was a perfect example of how those over 30 couldn't understand what those under 30 were up to..."

Two new reviews of Bush Administration environmental record

The Environmental News Service reports on two new reviews of the Bush Administration environmental record, from an environmentalist viewpoint - by the Natural Resource Defense Council and the OMB Watch: "Bush Record on Environment Called Dismal ":
    "WASHINGTON, DC, January 17, 2003 (ENS) - The Bush administration undermined America's landmark environmental laws on almost a daily basis in 2001, two new reports suggest. The reports document more than 100 anti-environmental actions by the administration last year, and point to ongoing efforts to undermine existing protections and delay proposed new rules that could help the environment.

    "For the second year in a row, federal agencies announced dozens of regulatory changes that will weaken safeguards for the nation's air, water, wetlands, forests, wildlands, wildlife and public health, finds a new report from the Natural Resources Defense Council (NRDC). The report highlights the fact that the administration intensified its assault on environmental protections after the November mid-term congressional elections, and reveals how the White House Office of Management and Budget (OMB) played a central role in coordinating the onslaught...

    "Rewriting the Rules" is available on NRDC's Web site at:

    "The OMB Watch report, "Administration Advances Few Health, Safety and Environmental Protections," is available at: "

Rebuilding Afghanistan and Iraq

Slate carried diary entries from Rahul Chandran, a United Nations development worker in Afghanistan this week. You can link to the four short entries here: "diary A weeklong electronic journal.". Chandran's job is to help an Afghan ministry get back on its feet and provide services to its clients.
    Tuesday: "...I sat in on a meeting to try and figure out mechanisms for supporting this ministry. There's a tension between capacity development and output delivery—helping the ministry build itself up and develop the skills it needs versus needing to satisfy the protesting proletariat with real services. Getting the balance right is the most rewarding part of the job—you help people in a tangible way while building something sustainable. Getting it wrong is perfectly frustrating..."

    Wednesday: "It was another big meeting day—again with concern about the ministry and the riots. There is a lot of pressure building for us to deliver quick-impact projects, which will help with short-term stability and address (real and substantial) needs. At the same time, the ministry sees a need for more substantial, long-term programs that will help transform disability from a charity-based to a rights-based approach.

    "As we sit and brainstorm, I can feel myself being drawn to short-term plans, both because I think the situation is serious, and the ministry needs to establish credibility, but also because I know that I am only here for six more months. I tell myself that I want to do something substantial because I want to ensure that I am useful to the Afghan people, but there's a strong element of wanting to leave something tangible behind other than a mountain of paper..."
(Good work for a UAS MPA). The diary entries bring you face to face with the people who are doing the daily "in the trenches" work of rebuilding. They convey a greater sense of background tension and uncertainty than some of the columns I've seen on Afghan reconstruction (I linked to a couple here: "Progress in Afghanistan" and "More progress in Afghanistan").

In the City Journal Stanley Kurtz writes about the relevance of the model of US reconstruction of post-WWII Japan for the reconstruction of Iraq, and finds it wanting. He thinks British India may be a more appropriate model. I learned about this essay through "ParaPundit", and I'm going to refer you to that blog for the link to the Kurtz essay (because of the useful summary and short commentary there): "Stanley Kurtz: After the War "

P.S. January 20, 2003 "The Man Without Qualities takes Stanley Kurtz's point, but wonders if the "Turkish" model might be appropriate: "Japan Or Turkey In Iraq?".
    "Iraq was for centuries part of the Ottoman Empire. Many of the factors Mr. Kurtz cites as hostile to democracy in Iraq applied with even more virulence in the Ottoman Empire. But democratic Turkey was born, anyway. And democratic Turkey was born from within - without the need for any imposition of democracy by foreign occupation, although even Istanbul was briefly occupied by Greek and Western forces after the First World War and Ottoman failure in that campaign and in many prior foreign wars did a lot to discredit the government."

North slope oil

Today the Bush Administration proposed opening about nine million miles of the National Petroleum Reserve to oil exploration. This isn't the Alaska National Wildlife Refuge, but a tract of land far to the west. Here's the story from the New York Times: "U.S. May Open Oil Reserve in Alaska to Development"
    "WASHINGTON, Jan. 17 — The Bush administration today proposed opening up part of the nation's largest remaining block of unprotected public land to oil and gas development.

    "The proposal affects nearly nine million acres of the Alaska North Slope in the government's National Petroleum Reserve.

    "Home to distinctive wildlife and tundra, the land is near the Arctic National Wildlife Refuge, which the administration still hopes to win the necessary Congressional approval to open up to oil drilling.

    "Today's draft proposal was released by the Bureau of Land Management, which offered four alternatives — including doing nothing — for the area, which was set aside in the 1920's for possible energy development..."

Who's in charge here?

There are a lot of people in an administration willing, and eager, to tell a President what to do. The Domestic Policy Council is the White House office that's supposed to coordinate policy advice from the different departments. A weak Domestic Policy Council can lead to drift, to poorly thought out policy proposals, and a policy vacuum that other strong characters will rush to fill. Timothy Noah at Slate went looking for the head of the Bush Administration Domestic Policy Council, and had trouble finding one: "Who Is Director of the Domestic Policy Council? A Chatterbox investigation". His column leaves the impression that Council leadership is weak. That's consistent with John DiIulio's comments reported in Esquire this past fall: "Policy analysis in the Bush White House". Karl Rove, Bush's chief political strategist, is a strong character. The Washington Times points to his plans for social security this year: "New year reveals new Rove, the risk-taker".
    "When it comes to setting priorities for President Bush's new-year domestic agenda, White House political adviser Karl Rove argues for a politically risky path: revive Mr. Bush's plan for riding some Social Security funds on the volatile stock market."

The blogging news

Jane Galt posted a short piece with some advice and directions for persons who want to start a blog: "January 17, 2003".

Brad Delong - another blogger - talks about "linkrot." Blogs link back and forth, and to interesting material elsewhere on the Internet. Gradually these links get broken as other parties close or move their web pages - linkrot: "Consequences of Linkrot ".

There are lots of different blog formats - blogs with multiple posters are especially effective. Here are two good ones. The "The Volokh Conspiracy" deals primarily with U.S. law. I've just found the "Winds of Change", whose authors post on political and military affairs, cultural matters, and religious wisdom, apparently without regard for sect (for example, click here: "Sufi Wisdom of the Week: Let Love Rule" for Muslim Sufi wisdom).

Revised 1-19-03

The fight against light pollution in Ketchum, Idaho

Today's New York Times has a story on efforts to rein in light pollution in Ketchum, Idaho: "Lights Cloud the Night Sky" (free registration may be required).
    "DR. STEPHEN PAULEY, a powerfully built man with ruddy cheeks, drove his Chevy Tahoe down Main Street here, past Atkinson's Market, Ozzie's Shoes and Country Cousins, one evening this month. He stopped in the parking lot of Cox Cable and gestured toward a high-intensity floodlight that radiated a sickly-looking yellow cloud into the night sky.

    " "That is a glare bomb," Dr. Pauley said. "It is an insult to the eye, and an insult to the sky."

    "Dr. Pauley, 62, earned the nickname Dr. Dark for his crusade against light pollution, which led to restrictions that were passed here in 2000.

    "His eyes narrowed. "I'm going to have to call that one in," he said.

    "An environmental activist, amateur astronomer and a retired ear, nose and throat specialist, Dr. Pauley hunts down light polluters who treat the night sky, he said, like a junkyard, stabbing it with mercury-vapor and high-pressure sodium floodlights. Dr. Pauley is part of the Dark Sky movement, whose members urge urban areas to regulate their outdoor lighting..."

How the U.S. makes war

Donald Sensing blogs an essay on the role of improvisation in U.S. warmaking style: "Flexibility is the key to success in today's modern, volunteer, all-action Army! An essay on why improvisation is central to how the US military fights".


Daniel Drezner is a political scientist at the University of Chicago. In this link ("WHAT'S GOING ON IN AFGHANISTAN?") he reports on a recent Chicago seminar on post-war development work in Afghanistan conducted by expert Barnett Rubin. Things are going reasonably well. The Afghans do have a national feeling - they aren't entirely factionalized. Is the Taliban coming back?
    "Neither the Taliban nor Al Qaeda are coming back. Critics of the war often posit that reconstruction will eventually falter, paving the way for the Taliban to re-emerge. However, this is unlikely for three reasons. First, Al Qaeda now has little interest in Afghanistan. They liked it as a base -- beyond that, it holds no value for them. Second, the remaining remnants of the Taliban are weak in number and lack natural allies even among the Pashtuns. Third, those Taliban remnants have no illusions about being able to displace U.S. forces."

How to succeed in government - if you're a political scientist (or economist)

Political scientist Daniel Drezner addressed this question on December 2, here: "POLITICAL SCIENCE AND POLITICS". The key paragraph:
    "I suspect the real difference between those political scientists that succeed in government and those that fail is that the successes know the limits of their trade. The most useful models of politics -- like the most useful models of any set of complex behaviors -- are abstracted from reality. The most capable political scientists know the proper limits of those models. They recognize that other sets of skills matter, skills that go way beyond social science.
The principles apply to economists as well, as he P.S. states:
    "Joeseph Stiglitz and Laurence Summers were both distinguished economists who took reasonably high offices in the Clinton Administration. In 1992, If you were to predict which of them would do better, it would have been Stiglitz, since he was the more affable of the two of them, and Summers already had some bad blood with Al Gore. But Stiglitz crashed and burned, leading some considerable bitterness, as this Atlantic Monthly piece makes clear. Summers, in contrast, managed to thrive because he learned from his early mistakes, as David Plotz pointed out." (go to his post for the links to the Atlantic Monthly and David Plotz)
Why do some businessmen succeed and some fail? Drezner addressed that question a few days later (Dec 5) when he was analyzing the errors made by former Treasury Secretary Paul O'Neill: "THE POSTMORTEM ON PAUL O'NEILL":
    "This led to three substantive mistakes. First, he believed that all aspects of government can be run like a business. Now, some aspects of government can, but by design, democratic governments operate differently from firms. His exasperation about this was palpable from day one. Second, O'Neill never really understood the international dimensions of his job. The purposes of the G-7, one of the most successful forms of international policy coordination that exists, eluded him. The statements he made about the Brazilian and Argentinian economies were factually wrong and politically inane. Third, O'Neill doesn't know squat about politics. He considered this a virtue, as someone who could speak truth to power. But politics does matter. Without an understanding of the way the process works in Washington, nothing substantive can ever get accomplished. In the end, because of his multiple gaffes, O'Neill had successfully alienated Congress, Wall Street, the G-7, the financial press, and the bureaucrats in his own department."
So, recognize the limitations of your model and vision (this also applies to O'Neill - see point 1). But the absence of a model or vision that conforms to the world (viewing yourself as a practical man or woman of the world who doesn't need "esoteric" knowledge) isn't good either (see O'Neill point 2). Continuously evaluate and address your mistakes. Recognize the political nature of your job.

Tradable water pollution credits

The Washington Post reports that the Bush Administration is proposing a tradable water pollution credit policy - allowing credits similar to those used in the successful sulfur dioxide trading program introduced with the 1990 Clean Air Act Amendments: "EPA to Allow Polluters to Buy Clean Water Credits.
Environmental Groups Say Policy Weakens Law "
    "The new policy uses economic incentives to enforce water quality regulations. It would allow industrial, agricultural and wastewater treatment plants and operations to meet their regulatory obligations by purchasing offsetting credits from facilities in the same watershed that have exceeded their mandated water quality standards or from non-regulated farms that have helped clean up water."
This sounds like a good idea - pollution reductions should come about because the people who find it the least expensive to reduce their wastes do so, and firms and people who find it more expensive compensate them for it. That said, the outcome will depend on the details and there are none of these in the article. If this is successfully implemented, it would parallel the biggest environmental achievement of the first Bush Administration - the Clean Air Act Amendments and the aforementioned sulfur dioxide trading scheme.

P.S.The EPA press release on this is here: "EPA Releases Innovative Approach to Cleaner Water". The EPA web page on this proposal is here: "Trading"

P.P.S.The World Resources Institute likes this idea:"NEWS RELEASE: WRI Welcomes New US Water Quality Trading Policy" This may be because WRI managing director, Paul Faeth, was the author of a report that apparently served as a basis for much of the administration's proposal. You can find that report here: "Fertile Ground". The Natural Resources Defense Council is not as optimistic: "New Administration Water Pollution Trading Policy is Illegal, Says NRDC. EPA Scheme Will Worsen Water Pollution, Threaten Public Health "

Fuel cells

It uses hydrogen as its energy source ("Hydrogen can be derived from fossil fuels...from electrolyzed water, from methanol, even, if a new technique pans out, from corn starch and sugar beets. The most energy-hungry of those processes is still cleaner and more efficient than extracting, refining, and burning gasoline."), it is twice as efficient as a conventional internal combustion engine, and "nothing comes out of the tailpipe but a trickle of water."

Fuel cell technology - and it is in production (albeit still extremely expensive). "Last month, Honda and Toyota Motor announced the commercial availability of passenger cars powered by fuel cells." Jonathan Rauch - source of the quotes - has a brief introduction this month at "reasononline": "Cellular Connection. With a hum instead of a roar, the fuel cell is here." A nice short intro - the potential is clear and it's just over the horizon - no background on how it works.

I learned about this from Lynne Kiesling's blog "The Knowledge Problem".

How did the administration choose the path that's leading to war in Iraq?

The Sunday Washington Post has an article by Glenn Kessler reconstructing the story: "U.S. Decision on Iraq Has a Murky Past. Opponents of War Wonder When, How Policy Was Set ".

Politics of the Bush tax plan

The core of the tax plan is the elimination of the tax on dividends - but only a quarter of the population pays this tax - what's the political payoff? Ryan Lizza addresses this question in a New Republic article posted on Thursday: "Wealthy Choice". Free registration required for this site.

It's all about the elves

How many similarities can you find between Wagner's The Ring of the Nibelungs and Tolkien's The Lord of the Rings? "Spengler," writing in the Asian Times says you can find a lot, lists many, but considers most of the similarities to be details, compared with this:
    "The details are far less important than the common starting point: the crisis of the immortals. Wagner's immortal gods must fall as a result of the corrupt bargain they have made with the giants who built Valhalla. Tolkien's immortal Elves must leave Middle-earth because of the fatal assistance they took from Sauron. The Elves' power to create a paradise on Middle-earth depends upon the power of the three Elven Rings which they forged with Sauron's help. Thus the virtue of the Elven Rings is inseparably bound up with the one Ring of Sauron. When it is destroyed, the power of the Elves must fade. More than anything else, The Lord of the Rings is the tragedy of the Elves and the story of their renunciation."
Lots of things to think about in this - has Tolkien made it impossible for modern audiences to "hear" Wagner? The essay ends with this flattering portrayal of the U.S.
    "Those who hold America in contempt for its lack of refinement (this writer always has held the term "American culture" to be an oxymoron) should think carefully about this conclusion. From their founding on Christmas Day 800 AD, when Charlemagne accepted the crown of the revived Roman Empire, the institutions of the West have been formed in response to external threat. The Holy Roman Empire of the High Middle Ages, Tolkien's conscious model for the Kingdom of Gondor, arose in response to the incursions of Arabs in the south, Vikings in the north, and Magyars in the West. Boorish and gruff as the new American Empire might seem, it is an anti-empire populated by reluctant heroes who want nothing more than to till their fields and mind their homes, much like Tolkien's Hobbits. Under pressure, though, it will respond with a fierceness and cohesion that will surprise its adversaries.

    "Orcs of the world: Take note and beware."
You can find the article here:"The 'Ring' and the remnants of the West".

More progress in Afghanistan

The Economist reports on the reconstruction of Afghanistan here: "The rebirth of a nation". There has been progress, things are getting better, but The Economist survey is less optimistic and more nuanced than the analysis I linked to here on January 3: "Progress in Afghanistan" The Germans have been giving us static over the potential war in Iraq, but they are our partners in rebuilding Afghanistan, and they've paid a price:
    "IN LATE afternoon on December 21st, a German Sikorsky CH-53 helicopter swept in low over the edge of Kabul airport. As it passed the roof of a British army base where your correspondent stood with a group of Scottish soldiers, it appeared to flip before dropping like a stone to a dusty alley and exploding. International peacekeepers, Czechs, Turks, Danes and others, jostled at the crash site to pull out bodies. A dilapidated engine of the Kabul fire brigade appeared later, when the flames were already doused. Seven German soldiers were killed in what investigators think was an accident, not sabotage. Their remains were flown home on Christmas Day."

Using a fee to control externalities

Brad DeLong posts a link to a story in The Guardian on London's efforts to deal with the congestion externalities created by cars entering the city by imposing a "...£5 congestion charge for everyone (almost) who drives into central London...". Link here to DeLong's post: "Three Cheers for London Mayor Ken Livingstone ".

The Skeptical Environmentalist

The New York Times reported yesterday that a Danish scientific committee had Bjorn Lomborg had "displayed "scientific dishonesty" " in last year's The Skeptical Environmentalist. Recall that Lomborg had been very critical of many environmentalist claims in that book. The Times story is here: "Environment and Science: Danes Rebuke a 'Skeptic'":
    "A branch of the Danish Research Agency has concluded that Prof. Bjorn Lomborg, an author whose upbeat analysis of environmental trends has been embraced by conservatives, displayed "scientific dishonesty" in his popular book, "The Skeptical Environmentalist."

    "Professor Lomborg, who has a doctorate in political science and teaches statistics at the University of Aarhus, has portrayed the book as an unbiased scientific refutation of dire pronouncements by environmental groups. But it has been attacked as deeply flawed by many environmental scientists since its publication in English in 2001 by Cambridge University Press."
Iain Murray has read the Danish report and is critical of it in a post today, here: "Something rotten in the state of Denmark". Murrary's post provides a link to an English translation of the Danish report.

Postscript 1-10-03 Nick Schultz at Tech Central Stationweighs in: "A Smear Continues ". I also missed this additional post by Iain Murray yesterday: "Guilty! What's the charge?"

Postscript 1-11-03 Chris Bertram at Junius posts with additional links to the Lomborg story (including Lomborg's press release in response) here: "The original sources". The Wasington Post story is here: "Danish Professor Denounced for 'Scientific Dishonesty'" The Economist editorializes on the Lomborg affair here: "Thought control".

Postscript 1-13-03 Charles Paul Fruend has a column on the Danish committee's action here, on "reasononline," : "Burn, Baby Bjorn, Burn! The Report From the Committees on Saying McCarthyism in Danish"

Postscript 1-15-03 The World Resources Institute maintains a web page on the Lomborg book - while most of the links above are associated with people who are outraged by the Danish committee's report - the World Resources don't like the Lomborg book and presumably approve. In the interests of linking to both sides of the debate - here is the link to the World Resources Institute's Lomborg resource page: "MEDIA KIT: Debunking pseudo-scholarship: Things a journalist should know about The Skeptical Environmentalist " (where you can also find an English translation of the committee report).

How can we help poor people in third world countries?

By improving the property rights institutions in those countries? Alan Krueger reports on research in this area in his New York Times column today: "Study Looks at Squatters and Land Titles in Peru":
    "An estimated 400 million to 600 million people worldwide are squatters, living on land they have no legal right to occupy, usually on the outskirts of cities. Urban squatting poses a growing economic problem in less-developed countries.

    "Hernando de Soto, a Peruvian economist, has long advocated reforming property rights for squatters as the path to economic development for poor countries. Now hard evidence suggests there may be something to Mr. de Soto's argument, although for reasons he did not anticipate."
I learned about this from this blog posting by Jacob Levy (who adds commentary and links to additional sources): "Thursday, January 09, 2003".

13th Century pollution

I'm enjoying the new Pepys blog (see the blog links on the left side of the screen). Since it started last week readers have been posting commentary in the comments section. A comment from Pepys in yesterday's entry about "not having one coal of fire in the house" brought a comment from "Wooden rivet" on the origins of London's pollution problems. Among other things:
    "...complaints about the smoky air as an annoyance date back to at least 1272, when King Edward I, on the urging of important noblemen and clerics, banned the burning of sea-coal. Anyone caught burning or selling the stuff was to be tortured or executed. [I'd like to have seen the NEPA, E.O. 12866, Reg Flex analysis for that rulemaking - Ben] The first offender caught was summarily put to death. This deterred nobody. Of necessity, citizens continued to burn sea-coal in violation of the law, which required the burning of wood few could afford."
Go here: "8 January 1659/60 (Sunday) " and scroll down to read the rest.

Does globalization lead to a reduction in environmental standards?

No, says Daniel Drezner in the article "Bottom Feeders" in Foreign Policy:
    "The current debates over economic globalization have produced a seemingly simple and intuitive conclusion: Unfettered globalization triggers an unavoidable "race to the bottom" in labor and environmental standards around the world. The reduction of restrictions on trade and cross-border investment frees corporations to scour the globe for the country or region where they can earn the highest return. National policies such as strict labor laws or rigorous environmental protections lower profits by raising the costs of production. Multinational corporations will therefore engage in regulatory arbitrage, moving to countries with lax standards. Fearing a loss of their tax base, nation-states have little choice but to loosen their regulations to encourage foreign investment and avoid capital flight. The inevitable result: a Darwinian struggle for capital where all other values-including workers' rights and the environment-are sacrificed upon the altar of global commerce...

    "...Similarly, openness to trade and investment does not lead to a race to the bottom in environmental conditions or regulations. Countries most open to outside investment-OECD nations-also have the most stringent environmental regulations. Even developing countries such as Malaysia, the Philippines, Thailand, Argentina, and Brazil have liberalized their foreign investment laws while simultaneously tightening environmental regulations. In Latin America, there is clear evidence that more protectionist countries, such as pre-NAFTA Mexico and Brazil under military rule, have been the biggest polluters. This finding is hardly surprising; the most protectionist economies in this century-the Warsaw Pact bloc-displayed the least concern for the environment. Privatization programs in these countries, which help attract foreign direct investment, have contributed to improved environmental performance as multinational corporations have transferred cleaner technologies from the developed world. In Brazil, for instance, the privatization of the petrochemicals sector in the early 1990s led to a greater acceptance of environmentally safe practices..."

Two new Skrzycki regulation columns

Two new columns by Washington Post regulation columnist Cindy Skrzycki:

On December 31 she wrote about a recent AEI-Brookings Joint Center for Regulatory Studies panel discussion on the topic "How Can the Government Improve Regulation?". Participants included C. Boyden Gray, Counsel to President Bush, Sally Katzen, head of the Office of Management and Budget (OMB) under President Clinton, Cass Sunstein, law professor from the University of Chicago, and Paul Noe, from the Bush Administration OMB.
    "Over the years, there has been debate over how to best regulate the regulators: Should it be the OMB, Congress or the courts that play the primary role in keeping tabs on the agencies?

    "Paul Noe, Graham's counselor, said at the forum that his office is best suited to the role because it offers perspective about what regulatory policies are "best for society" and offers consumers a kind of insurance that rules will be of high quality. He said that good review focuses on efficiency (get rules reviewed in a timely way), sound science (make sure there is credible scientific evidence underpinning a rule, and transparency (let the public see how the rule came together and was reviewed)...

    " "We need effective centralized regulatory review as a form of consumer protection because it's about maximizing social welfare," said Noe, explaining how the Bush administration OMB sees its role in approving -- or rejecting -- new rules."
See "Drawing Up Better Strategies For Making Rules". On January 7 she wrote about the implications for rulemaking of Republican control of the House and Senate:
    "There are no pesky Democratic committee chairmen in the new Congress to hold prying oversight hearings when the Bush administration decides to roll back Clinton-era rules. There is no Democrat in the White House with an activist regulatory agenda to irritate business and pro-industry lawmakers.

    "Federal agencies are no longer engaged in pumping out new rules, which in past years were often fended off in Congress at the urging of the business lobby.

    "In short, Congress, which has been an important power center for lobbyists and special interests of all types when two parties shared power, is no longer where the action is. Instead, the real regulatory power moves to the Office of Management and Budget, which has been reinterpreting many Clinton rules and eliminating others. With that power consolidated within the Bush administration, many of the checks and balances that come with divided political power have been muted."
See "Rulemaking Shifts Away From the Hill"

How does yesterday's tax package advance President Bush's reelection prospects?

Brad Delong posts on the political implications of yesterday's Administration tax proposals (the post is a long extract from a briefing by something called "G7" - a consulting firm I think): "The Useful G7 Daily Briefing ". Among other points - why wasn't there more in the proposals to help the states with their enormous budget deficits?
    "...Bush opted not to give money to cash-strapped states, the worst off of which are headed by Democrats. This, naturally makes sense from a political perspective. Why bail out states struggling under Democratic governors (i. e. California, Virginia)? But states are struggling with deficits projected to reach a collective $75 to 85 billion -- up from $50 billion this year. So tax increases and spending cuts are certainly coming at a state level and there's no offset from the Feds."

Why should we subsidize municipal capital expenditures through the tax system?

The Man Without Qualities posts on the linkages between President Bush's proposal to stop taxing dividend income and state/local finance. Among other things, he says:
    "The municipal bond tax exclusion itself is highly questionable. There is no good reason why the kinds of projects favored by municipalities should be subsidized in the capital markets. The subsidy encourages inefficient, excessive investment in certain kinds of capital-intensive projects. Further, the exclusion is a disguised obstacle to privatization of many public services because a municipality can more easily fund certain facilities than can private (taxable) enterprise. For example, many municipal sports stadiums are owned by municipalities and financed by tax-free municipal bonds - all to the service of privately owned sports leagues. There is no good reason for this."
Click here for the rest: "Unintended Consequences". Is there a market failure, or distributive rationale for intervening with this subsidy?

What should we do about North Korea?

Daniel Drezer has one of the best overviews of the North Korea I've seen, here" "CRACKING THE NORTH KOREAN NUT" He thinks we need to look back to the diplomacy practiced by the first Bush Administration, in 1991:
    "The first Bush administration deserves high marks for how it handled the DPRK problem. It repeatedly offered negative security guarantees – such as pulling out all tactical nuclear weapons from the peninsula – but made sure that North Korea’s allies pressured Pyongyang to reciprocate. Coercive pressure has worked on North Korea before, but only when its allies applied the pressure..."

Is the war with Iraq imminent?

Last August Donald Sensing predicted that if there were a war with Iraq, it would take place in February 2003: "Fighting a winter campaign in Iraq" At the end of a very thoughtful analysis he pointed out:
    "1. The military will not be ready for a large-scale operation until near the end of this year.

    "2. If they are ready then, it will make sense to wait to attack until closer to the end of the Iraqi winter, say February-March, so that the onset of long-term good weather will find our forces in place in country for serious action to close the issue."
In this more recent posting ("February could be more violent in Iraq") he links to a Washington Times story saying "The United States is deploying troops fast enough to allow President Bush to order an invasion of Iraq next month, U.S. officials and military analysts say." Sensing's blog "One Hand Clapping" is an excellent ongoing source for analysis of the military dimensions of the crisis.

Meanwhile, Lynne Kiesling points to an story on Russian-Saudi agreements to increase oil production to keep prices down - including down during a U.S.-Iraq war: "I HATE TO SAY "I TOLD YOU SO," BUT " Here's a direct link to the story: "Saudis and Russia pledge to prevent surge in oil price"
    "After a meeting in Riyadh yesterday, Saudi Arabia and Russia promised to keep their oil supplies running at a high enough level to prevent a potentially damaging jump in oil prices. This followed a pledge by Opec to increase production by up to a million barrels a day until the price has fallen from its present $30 (£18.75) a barrel to less than $28...

    "Opec has vowed repeatedly to fill any supply gap created by a possible US attack on Iraq."

Glenn Hubbard and the problem with deficits

Brad DeLong has a great post discussing the problems caused by long run deficits and the politics of influence on the President's Council of Economic Advisors - the nexus is glenn Hubbard, current Chair of the Council. Here: "It's Time for Glenn Hubbard to Quit as CEA Chair "

Is globalization contributing to increasing income inequality?

Laura Secor surveys the state of the debate in the Boston Globe: "Mind the gap
The debate over global inequality heats up"
. This is a readable article that highlights the importance of carefully defining what it is that you are talking about.
    "...The nub of the statistical dispute, which has become surprisingly fierce, has less to do with numbers than definitions. There are at least three plausible ways to define global inequality. The first way compares average income or Gross National Product per capita across countries. By that measure, economists agree that the gap between rich and poor countries has been steadily widening since the late 1970s. Rich countries like the United States have grown richer, while poor ones like Malawi have mostly stagnated or become poorer.

    "But some economists contend that this observation isn't particularly meaningful. It takes countries as its unit of analysis, rather than people-and as a result, the 1.28 billion citizens of China count for no more than do the 448,569 citizens of Luxembourg. When economists weight each country's average income by population, they find that global inequality is in fact decreasing.

    "Why? Because China and India, which between them house about 38 percent of the world's population, have experienced dramatic economic growth. "Whether global inequality will rise or fall depends by and large on what happens to average incomes in the big poor countries like China and India," says Dani Rodrik, an economist at the John F. Kennedy School of Government..."
I learned about this at the website of Daniel W. Drexner.

David Broder will miss former Treasury Secretary O'Neill because he was frank and honest

David Broder used this Dec 12 Washington Post column to say he's going to miss O'Neill: "Why O'Neill Will Be Missed " :
    "...The Treasury is not my normal beat, but every time I had a chance to hear or interview O'Neill, I came away impressed that here was a man with a down-to-earth grasp of realities, who scorned dogma of any variety -- left or right -- and who was ready to wrestle with the ambiguities and uncertainties of policymaking and to change course when his original notion failed to get results."
Broder will also miss him because he had a good background in health care policy:
    "The second reason to regret O'Neill's forced departure is that he knows as much about what needs fixing in the American health care system as anyone around. It would have been very useful to have him engaged in the health care debate that Congress and the Bush administration now seem ready to begin."

Suppose someone besides Tolkien had written the Lord of the Rings?

What would the Lord of the Rings be like if it had been written by Ernest Hemingway? Mark Twain? Danielle Steele? Ayn Rand? Check this out: "The Straight Dope".

I learned about this from Mark Shea's blog: "Catholic and Enjoying It!".

Progress in Afghanistan

The success of a war in Iraq may be determined by what happens in the years after. Afghanistan provides a model (although Iraq and Afghanistan are clearly different countries with different cultures, aspirations, and problems) of post-war reconstruction efforts in an Islamic country. So, we should be watching Afghanistan carefully. Robert Oakley, a former U.S. ambassador to the Pakistan, has a column in today's Washington Post - he thinks things are going pretty well: "The New Afghanistan: Year 2".
    "The United States had a wise initial strategy for avoiding the sort of fatal mistakes the Soviets made in Afghanistan in the 1980s. By establishing a broad political coalition, including Muslim countries, and using small Special Forces teams to fight alongside Afghans against al Qaeda and hard-core Taliban, the United States avoided being seen as occupying Afghanistan or going to war against Islam. This was reinforced by large-scale relief for the destitute population and the political empowerment of Afghans by the Bonn Conference and the country's loya jirga, or national assembly. The United States, Saudi Arabia, Japan and the European Union set up the Afghan Reconstruction Steering Group, which includes the World Bank and the Asian Development Bank and is becoming increasingly effective. The United States, France and Britain have begun a multi-year program to train a new Afghan national army. Germany has done the same for the police, with U.S. help. The threat from al Qaeda and the Taliban has been reduced to manageable levels in much of the country, and the International Security Assistance Force has helped establish the security that is vital for Kabul. The U.N. Assistance Mission for Afghanistan and Special Representative Lakhdar Brahimi have won the confidence of all parties with low-key advice and coordination for donors and the new government.

    "Starting from zero a year ago, the administration of President Hamid Karzai has achieved many attributes of a responsible government. It has a long-term national development framework and budget, worked out with the World Bank, the United Nations, the United States and other donors, and is carefully applying it to ensure that donor proposals meet Afghan realities. A central bank, fiscal discipline and a new national currency have been established. Construction of the large-scale Ring Road program has begun; large-scale community development projects will soon follow smaller efforts. An Afghan Defense Commission (including senior "warlords") has reached agreement on the size, makeup and training of the new army and the demobilization of local militias. This will take time but will ultimately be the Afghans' own solution to their endemic security problems. Prudence has proven to be better than prematurely deploying unready international peacekeepers (with inadequate resources) to remote areas. The violence that would have followed such deployments, involving al Qaeda, the Taliban and warlords, would have seriously disrupted both the war against terrorism and the process of gradually stabilizing the country."
I learned about this column from the OxBlog

How do political considerations affect tax policy?

Virginia Postrel looks at this in her "Economic Scene" column in the business section of today's New York Times: "Tax Policy as a Tool and a Weapon".
    "...Tax policy is not just an economic tool. It's a partisan weapon. And its power, whether to improve economic performance or slay political opponents, depends on the details...

    "Political considerations are already distorting two good economic ideas. The permanent campaign is transforming potentially significant tax reforms into flashy favors that enhance press releases more than economic growth..."
How are political considerations affecting proposals to alleviate the double taxation of dividend income and reduce the payroll tax? Why does it matter?

I learned about this from Postrel's blog: "" (Postrel's blog started in late-December 2000, so is just two years old. Mine started at the beginning of July 2002 and so is six months).