Category: Politics

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Advice For The PE–This Is Your Brain on Prosperity: Andrew Lo on Fear, Greed, and Crisis Management – Freakonomics Blog – NYTimes.com

Excellent Advice for the PE Obama.

In the long run, more transparency into the “shadow banking” system; more education for investors, policymakers, and business leaders; and more behaviorally oriented regulation will allow us to weather any type of financial crisis. Regulation enables us to restrain our behavior during periods when we know we will misbehave; it is most useful during periods of collective fear or greed and should be designed accordingly. Corporate governance should also be revisited from this perspective; if we truly value naysayers during periods of corporate excess, then we should institute management changes to protect and reward their independence.

If “crisis is a terrible thing to waste,” as some have argued, then we have a short window of opportunity — before economic recovery begins to weaken our resolve — to reform our regulatory infrastructure for the better. The fact that time heals all wounds may be good for our mental health, but it may not help maintain our economic wealth.

This Is Your Brain on Prosperity: Andrew Lo on Fear, Greed, and Crisis Management – Freakonomics Blog – NYTimes.com.

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CSIS Reports – The War in Gaza – Center for Strategic and International Studies

Thanks To ForeignPolicy blog for the pointer here

This raises a question that every Israeli and its supporters now needs to ask. What is the strategic purpose behind the present fighting? After two weeks of combat Olmert, Livni, and Barak have still not said a word that indicates that Israel will gain strategic or grand strategic benefits, or tactical benefits much larger than the gains it made from selectively striking key Hamas facilities early in the war. In fact, their silence raises haunting questions about whether they will repeat the same massive failures made by Israel’s top political leadership during the Israeli-Hezbollah War in 2006. Has Israel somehow blundered into a steadily escalating war without a clear strategic goal or at least one it can credibly achieve? Will Israel end in empowering an enemy in political terms that it defeated in tactical terms? Will Israel’s actions seriously damage the US position in the region, any hope of peace, as well as moderate Arab regimes and voices in the process?
To blunt, the answer so far seems to be yes. To paraphrase a comment about the British government’s management of the British Army in World War I, lions seem to be led by donkeys. If Israel has a credible ceasefire plan that could really secure Gaza, it is not apparent. If Israel has a plan that could credibly destroy and replace Hamas, it is not apparent. If Israel has any plan to help the Gazans and move them back towards peace, it is not apparent. If Israel has any plan to use US or other friendly influence productively, it not apparent.
As we have seen all too clearly from US mistakes, any leader can take a tough stand and claim that tactical gains are a meaningful victory. If this is all that Olmert, Livni, and Barak have for an answer, then they have disgraced themselves and damaged their country and their friends. If there is more, it is time to make such goals public and demonstrate how they can be achieved. The question is not whether the IDF learned the tactical lessons of the fighting in 2006. It is whether Israel’s top political leadership has even minimal competence to lead them.
CSIS Reports – The War in Gaza – Center for Strategic and International Studies .

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This Must Stop-AP study finds $1.6B went to bailed-out bank execs – Yahoo! News

The total amount given to nearly 600 executives would cover bailout costs for many of the 116 banks that have so far accepted tax dollars to boost their bottom lines.
Rep. Barney Frank, chairman of the House Financial Services committee and a long-standing critic of executive largesse, said the bonuses tallied by the AP review amount to a bribe “to get them to do the jobs for which they are well paid in the first place.
“Most of us sign on to do jobs and we do them best we can,” said Frank, a Massachusetts Democrat. “We’re told that some of the most highly paid people in executive positions are different. They need extra money to be motivated!”
The AP compiled total compensation based on annual reports that the banks file with the Securities and Exchange Commission. The 116 banks have so far received $188 billion in taxpayer help. Among the findings:
_The average paid to each of the banks’ top executives was $2.6 million in salary, bonuses and benefits.
_Lloyd Blankfein, president and chief executive officer of Goldman Sachs, took home nearly $54 million in compensation last year. The company’s top five executives received a total of $242 million.
AP study finds $1.6B went to bailed-out bank execs – Yahoo! News.

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Grasping Reality with Both Hands: The Semi-Daily Journal Economist Brad DeLong

Doesn’t anybody edit what press release they put out. I had to go to the original link to ascertain that the official press release had “currrent” as a mispelling. I remember this line on “the hours”.

Do you think it's possible that bad writing actually attracts a higher incidence of error?

John McCain and Sarah Palin: Dishonest and Dishonorable
They even lie about how many tame economists they have:
JohnMcCain.com – McCain-Palin 2008: 100 ECONOMISTS WARN THAT WITH CURRRENT WEAK FINANCIAL CONDITIONS BARACK OBAMA’S PROPOSALS RUN A HIGH RISK OF THROWING THE US ECONOMY INTO A DEEP RECESSION…
1. They only have 90 names on the list. Not 100. 90. They can’t count.
2. They only have 90 names on the list: that means that they could not find any more–and I assure you that they tried.
3. Shame on them for saying “Barack Obama’s proposals run a high risk of throwing the U.S. economy into a deep recession.” The economic considerations that can be advanced against Obama policies do not include “throwing the U.S. economy into a deep recession.” I cannot imagine what mechanism can possibly be contemplated by which Obama’s plans would reduce aggregate demand by enough to accomplish that result.
Yes, I am talking to you, Michael Bordo, Michael Boskin, Charles Calomiris, Kristin Forbes, Douglas Holtz-Eakin, Glenn Hubbard, Anne Krueger, Allan Meltzer, Kevin Murphy, William Poole, Kenneth Rogoff, Harvey Rosen, Anna Schwartz, George Shultz, John Taylor, and Murray Weidenbaum. You know better. And I know you know better.
No, I’m not talking to you, Kevin Hassett. I know that you don’t know better.
Grasping Reality with Both Hands: The Semi-Daily Journal Economist Brad DeLong.

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Be afraid. Be very afraid. – The Bing Blog

Hope the rational parts of the Republican party can at least overcome these idealogues.

I just read a comment from a House Republican who helped to defeat the bailout. It said that passing the bailout would represent “a coffin on top of Ronald Reagan’s coffin.” In one statement, this guy made it clear what his camp’s priorities represent – ideology over the welfare of the public.
Be afraid. Be very afraid. – The Bing Blog.

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Study Ties Wage Disparities To Outlook on Gender Roles – washingtonpost.com

Hmm,  This is a nice study and it shows that the feminist movement for eqaul pay for equal work must include not only the disadvantaged women but also the men who have support equal pay.

thanks to matt yglesias here:
Study Ties Wage Disparities To Outlook on Gender Roles
By Shankar Vedantam
Washington Post Staff Writer
Monday, September 22, 2008; Page A02
Men with egalitarian attitudes about the role of women in society earn significantly less on average than men who hold more traditional views about women’s place in the world, according to a study being reported today.
It is the first time social scientists have produced evidence that large numbers of men might be victims of gender-related income disparities. The study raises the provocative possibility that a substantial part of the widely discussed gap in income between men and women who do the same work is really a gap between men with a traditional outlook and everyone else.
The differences found in the study were substantial. Men with traditional attitudes about gender roles earned $11,930 more a year than men with egalitarian views and $14,404 more than women with traditional attitudes. The comparisons were based on men and women working in the same kinds of jobs with the same levels of education and putting in the same number of hours per week.
Although men with a traditional outlook earned the most, women with a traditional outlook earned the least. The wage gap between working men and women with a traditional attitude was more than 10 times as large as the gap between men and women with egalitarian views.
If you divide workers into four groups — men with traditional attitudes, men with egalitarian attitudes, women with traditional attitudes and women with egalitarian attitudes — men with traditional attitudes earn far more for the same work than those in any of the other groups. There are small disparities among the three disadvantaged groups, but the bulk of the income inequality is between the first group and the rest.
“When we think of the gender wage gap, most of our focus goes to the women side of things,” said Beth A. Livingston, co-author of the study. “This article says a lot of the difference may be in men’s salaries.”
Study Ties Wage Disparities To Outlook on Gender Roles – washingtonpost.com.

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rePost: Democracy and accountability: The perverse effects of term limits | vox – Research-based policy analysis and commentary from leading economists

Some thoughts:
+ This is good and bad dependig as usual on the person in power.
+ Good people would mean better or at least mroe vigorous implementation of needed but unpopular or important but hard to enforce regulations or laws.
+ Not so good people throw caution to the wind and exercise extreme corruption etc. Reminds me of how Governor Generals of the Philippines were described (see Noli Me Tangere) during thier last months in their commission.
+ This is important because this means we need a way of contra-balancing the effects. Maximizing the effects of good people and minimizing the effects of not so good people.
+ Makes me think that countries with no strong term limits but great independent institutions (independent non partisan military, proper separation/balance of power among institutions) are would be better governed but have leaders locked eternally into a public relations campaign. (If I am not mistaken Tony Blair’s and England is an example of this, Japan too I think)
+ This makes me think that among real democracies the Philippines systems is ill-designed. You have a fix term limit where you have no re-elections, and weak institutions. You get a recipe where most people who become president are corrupt, and they throw caution to the wind because they do not have to revalidate their power from the people because they are not re-elected.
thanks to Mark Thoma here:
from here:
Conclusions
Our analysis of the impact of term limits on inter-state conflicts confirms that domestic political institutions can have a crucial impact on economic and political outcomes. In democracies without term limits, periodic elections provide the means to hold opportunistic political leaders accountable for their foreign policy decisions. In autocracies and democracies with term limits, in which there is no need for “contract renewal”, politicians can adopt unpopular policies with no repercussion on whether or not they are able to stay in power. Some caution is clearly warranted in interpreting these results. Though our analysis shows that political systems in which the leaders are subject to re-election are good for peace, this should not be taken to imply that democratisation of dictatorships will necessarily lead to peace. The take-home message, as pointed out by Daron Acemoglu, Davide Ticchi and Andrea Vindigni recently on Vox, is that policymakers should carefully consider the complexity of the political environment when trying to shape or guide the transition to democracy.
Democracy and accountability: The perverse effects of term limits | vox – Research-based policy analysis and commentary from leading economists.

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Repost : Making Light: McCain's Health Care Plan

This hit home, health care is not simply getting medication and getting hospital care. Health care must be reframed to Care for Well Being, and people who do not get the whole package, quarterly physicals, psychological, nutritional, and of course the traditional care for sickness that people must demand from government to be a right that. We must not let people who do not have anything to die from us doing nothing.
from Making Light Blog here:

Here’s a fact: People who don’t have health insurance don’t get health care. Sure, if they’re unconscious or spurting blood they can come to the Emergency Room, but that’s a cruddy way of getting basic health screening that keeps things from getting to catastrophic conditions.
I’ve seen this myself. I’ve seen a man in his mid-forties die, choked on his own vomit, unconscious from undiagnosed diabetes. Why undiagnosed? He didn’t have health insurance to cover physicals. He was working three jobs—but they were all part-time jobs with no benefits.
Making Light: McCain’s Health Care Plan.