Sep 29th, 2008 by ravi
Palin on the crisis

Palin on the crisis

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Sep 23rd, 2008 by ravi
Julio Huato has a different bailout plan

And he is level-headed about it, not one of those bleeding heart liberals, this fellow ;-):

[…]

Still, should the Treasury give away money to poor people who dared dream own a house? I am not going to make the “populist” argument that doing so is better than giving $700 billion to the shareholders and creditors of banks and financial firms over at least 2 years (I’m sure that the $700 billion would not be the end of the Paulson plan, just like Wolfowitz’s $60 billion budget estimate wasn’t the total cost of the Iraq war). Giving money to people in need, of course, creates horrible moral hazard, which would in turn erode the basis of our civilization. When in distress caused by a disaster not of their creation, people would grow accustomed to receiving the solidarity and support of the rest of society and, thus, would start to behave in self-destructive ways. As we know, only the rich have the moral fortitude to properly use government subsidies: the bigger the subsidies, the more morally they behave. So, no. There would be a quid pro quo, an upside to taxpayers.

[…]

[ Link ]

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Sep 19th, 2008 by ravi
The markets work!

So, the USG is pumping $300 billion and more into the financial system to prevent a wholesale panic and meltdown:

Fed and Treasury Offer to Work With Congress on Bailout Plan – NYTimes.com

“What we are working on now is an approach to deal with systemic risks and stresses in our capital markets,” said Henry M. Paulson Jr., the Treasury secretary. “And we talked about a comprehensive approach that would require legislation to deal with the illiquid assets on financial institutions’ balance sheets,” he added.

[…]

The bailout discussions came on a day when the Federal Reserve poured almost $300 billion into global credit markets and barely put a dent in the level of alarm.

Hoping to shore up confidence with a show of financial shock and awe, the Federal Reserve stunned investors before dawn on Thursday by announcing a plan to provide $180 billion to financial markets through lending programs operated by the European Central Bank and the central banks of Canada, Japan, Britain and Switzerland.

But after an initial sense of relief swept markets in Asia and Europe, the fear quickly returned. Tensions remained so high that the Federal Reserve had to inject an extra $100 billion, in two waves of $50 billion each, just to keep the benchmark federal funds rate at the Fed’s target of 2 percent.

But apparently this wasn’t enough for the gamblers in suits:

None of those actions, however, brought much catharsis or relief, with banks around the world remaining too frightened to lend to each other, much less to their customers. This forced Mr. Paulson and Ben S. Bernanke, the Fed chairman, to think the unthinkable: committing taxpayer money to buy hundreds of billions of dollars in distressed assets from struggling institutions.

Rumors about the Bush administration’s new stance swept through the stock markets Thursday afternoon. By the end of trading, the Dow Jones industrial average shot up 617 points from its low point in midafternoon, the biggest surge in six years, and ended the day with a gain of 410 points or 3.9 percent.

So, how do we characterise this utter failure of private financial entities, requiring the public to step in save the world from their stupidity? Here’s how:

“The markets voted, and they liked the proposal,” said Laurence H. Meyer, vice chairman of Macroeconomic Advisers.

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Sep 17th, 2008 by ravi
New frontiers in worker porn

An amazing economics experiment and how it got field workers to pick a lot more fruit. – By Tim Harford – Slate Magazine

The owner had been paying a piece rate—a rate per kilogram of fruit—but also needed to ensure that whether pickers spent the day on a bountiful field or a sparse one, their wages didn’t fall below the legal hourly minimum. Farmer Smith tried to adjust the piece rate each day so that it was always adequate but never generous: The more the work force picked, the lower the piece rate. But his workers were outwitting him by keeping an eye on each other, making sure nobody picked too quickly, and thus collectively slowing down and cranking up the piece rate.

Bandiera and her colleagues proposed a different way of adjusting the piece rate: Managers would test-pick the field to see how difficult it was and set the rate accordingly, thus preventing the workers from engaging in a collective go-slow. (If the managers made a mistake in their estimate, and the pickers didn’t earn minimum wage, Farmer Smith would make up the shortfall with an extra payment. This rarely happened.) The economists measured the result. By the time the experiment was over, Farmer Smith’s initial skepticism had long evaporated: The new pay scheme increased productivity (kilograms of fruit per worker per hour) by about 50 percent.

The next summer, the researchers turned their attention to incentives for low-level managers, who would also be temporary immigrant workers but who would be responsible for on-the-spot decisions such as which workers were assigned to which row. The researchers found that managers tended to do their friends favors by assigning them the easiest rows. This made life comfortable for insiders but was unproductive since the most efficient assignment for fruit picking is for the best workers to get the best rows. The researchers responded by linking managers’ pay to the daily harvest. The result was that managers started favoring the best workers rather than their own friends, and productivity rose by another 20 percent.

Small wonder that the economists were invited back for another summer. They proposed a “tournament” scheme in which workers were allowed to sort themselves into teams. Initially, friends tended to group themselves together, but as the economists began to publish league tables and then hand out prizes to the most productive teams, that changed. Again, workers prioritized money over social ties, abandoning groups of friends to ally themselves with the most productive co-workers who would accept them. In practice, that meant that the fastest workers clustered together, and again, productivity soared—by yet another 20 percent.

The series of experiments provided a fascinating confirmation that financial incentives can trump social networks, with some precision and much detail about the mechanisms involved.

[…]

[ Link ]

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Sep 17th, 2008 by ravi
UN due influence

Without any hint of irony or humour, The Guardian worries that Western influence within the United Nations is waning — worrisome because it wrecks “efforts to entrench human rights, liberties and multilateralism”.

Drop in influence at UN wrecks western attempts to push human rights agenda

The west’s efforts to use the United Nations to promote its values and shape the global agenda are failing, according to a detailed study published yesterday.

A sea change in the balance of power in favour of China, India, Russia and other emerging states is wrecking European and US efforts to entrench human rights, liberties and multilateralism.

This perhaps belongs in the same category of new-found Republican concerns regarding sexism and the Bush administration’s alarm at Russian unilateralism (vis-à-vis Georgia). Dare we remind them that the United Nations came about as a response to the two disastrous wars that these nations inflicted upon the rest of the unenlightened world? Or would that explicit notice have as little effect as the implicit caution offered by a history of colonialism, political mischief and unilateral intrusion (Iran, Iraq, Latin America, Afghanistan, Africa, India, Pakistan,…)?

A recent article in the New York Times presents an altogether different picture than the one The Guardian offers, when it comes to US interest or respect for other values and thought. The article ends with a quote from Northwestern law professor Steven Calabresi:

In “ ‘A Shining City on a Hill’: American Exceptionalism and the Supreme Court’s Practice of Relying on Foreign Law,” a 2006 article in the Boston University Law Review, Professor Calabresi concluded that the Supreme Court should be wary of citing foreign law in most constitutional cases precisely because the United States is exceptional.

“Like it or not,” he wrote, “Americans really are a special people with a special ideology that sets us apart from all the other peoples.”

Discussing the use of international opinion in judicial analysis, the NYT articles draws a telling contrast:

Judges around the world have long looked to the decisions of the United States Supreme Court for guidance, citing and often following them in hundreds of their own rulings since the Second World War.

[…] American constitutional law has been cited and discussed in countless decisions of courts in Australia, Canada, Germany, India, Israel, Japan, New Zealand, South Africa and elsewhere.

But many judges and legal scholars in this country say that consideration of foreign legal precedents in American judicial decisions is illegitimate, and that there can be no transnational dialogue about the meaning of the United States Constitution.

[…]

The Constitution should be interpreted according to its original meaning, said John O. McGinnis, a law professor at Northwestern, and recent rulings, whether foreign or domestic, cannot aid in that enterprise. Moreover, Professor McGinnis said, decisions applying foreign law to foreign circumstances are not instructive here.

“It may be good in their nation,” he said. “There is no reason to believe necessarily that it’s good in our nation.”

[…]

In any event, said Eric Posner, a law professor at the University of Chicago, many Americans are deeply suspicious of foreign law.

“We are used to encouraging other countries to adopt American constitutional norms,” he wrote in an essay last month, “but we have never accepted the idea that we should adopt theirs.”

“It’s American exceptionalism,” Professor Posner added in an interview. “The view going back 200 years is that we’ve figured it out and people should follow our lead.”

[emphasis mine]

In contrast, the New York Times describes the attitude elsewhere (including in India, a country that The Guardian laments is gaining influence in the UN, and whose UN soldiers are prominently pictured at the top of The Guardian’s piece):

The openness of some legal systems to foreign law is reflected in their constitutions. The South African Constitution, for instance, says that courts interpreting its bill of rights “must consider international law” and “may consider foreign law.” The constitutions of India and Spain have similar provisions.

and explains why a shift away from US standards and opinion is occurring:

Frederick Schauer, a law professor at the University of Virginia, wrote in a 2000 essay that the Canadian Supreme Court had been particularly influential because “Canada, unlike the United States, is seen as reflecting an emerging international consensus rather than existing as an outlier.”

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Sep 15th, 2008 by ravi
India doesn’t ♥ Obama

Hmm! I wonder why…

BBC NEWS | Obama win preferred in world poll

The margin of those in favour of Mr Obama winning November’s US election ranged from 9% in India to 82% in Kenya, which is the birthplace of the Illinois senator’s father.

[ Link ]

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Sep 5th, 2008 by ravi
Rangel keeps the party going

House Chairman Failed to Report $75,000 in Income – NYTimes.com

Representative Charles B. Rangel has earned more than $75,000 in rental income from a villa he has owned in the Dominican Republic since 1988, but never reported it on his federal or state tax returns, according to a lawyer for the congressman and documents from the resort.

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Sep 3rd, 2008 by ravi
Rights vs Right

A while I ago I linked to Stanley Fish’s excellent criticism (Our Faith In Letting It All Hang Out) of those propagating the Mohammed cartoons under free speech justifications. Julian Baggini visits the issue in The Guardian via the Christ penis sculpture:

Julian Baggini: Christ reveals limits of free speech | guardian.co.uk

[…]

Doughty defenders of free speech will have no truck with such quibbling. They insist on a right to offend, wheeling out John Stuart Mill’s venerable “harm principle” to clinch the case: “The only purpose for which power can be rightfully exercised over any member of a civilised community, against his will, is to prevent harm to others.” And, no, “mere offence” does not constitute harm.

There are two problems with this simple view. Saying that we have a right to offend skips over the question of whether we are right to offend. I have a right to tell random strangers that I think they’re ugly, or that they have terrible taste in clothes, but it would be wrong of me to exercise that right, and not just because of the pots and kettles principle.

But isn’t mockery good, and any belief system incapable of putting up with it deficient in some way? That’s true, but you can’t just ignore the background against which lampooning takes place. Christians, for example, are not oppressed, despite what some wannabe martyrs would have us believe. British Muslims, in contrast, are a somewhat beleaguered minority. We should think twice before mocking them because, while comedy speaking truth to power is funny, the powerful laughing at the weak is not. The difference is only subtle to those too dunderheaded to spot the obvious. Witness Alan Partridge asking a Jewish comedian who uses Jewish humour to “tell us a joke about Jews”.

That does not mean that we should never do anything that causes Muslims offence, or that shows Islam in a bad light, of course; only that we should not do so lightly. The choice is not between an all-out offence offensive and craven silence.

The other reason absolutist claims for speech acts are misguided is that we don’t just utter words, we do things with them, as the Oxford philosopher JL Austin put it. When words belittle or mock, they can reinforce prejudice and hierarchies that have very real effects on people’s lives. Mockery of those already on the margins can shore up the very barriers that limit their life chances.

Free speech is indeed precious, but that doesn’t mean that we have to defend without qualification every moron who abuses it.

[…]

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Sep 3rd, 2008 by ravi
The worm’s turn

House politics strikes ones of its savviest players:

House Tables Resolution to Censure Rangel – New York Times

The House of Representatives decided on Thursday afternoon to table, by a vote of 254 to 138, a Republican resolution to censure Representative Charles B. Rangel, the powerful New York Democrat who is chairman of the Ways and Means Committee. The resolution said Mr. Rangel “dishonored himself and brought discredit to the House,” citing a report in The New York Times on July 11 that Mr. Rangel occupied four rent-stabilized apartments in a Harlem building, including one that he used as a campaign office.

Rangel, to refresh your memory, is the same toad who thundered against Hugo Chavez (whose generosity fuels his constituents, unlike the lack of compassion of the leader he defends) in favour of the Imperial Presidency:

“You don’t come into my country, you don’t come into my congressional district and criticize my president,” Mr. Rangel, a Democrat, told stunned reporters on Capitol Hill.

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Sep 2nd, 2008 by ravi
The Broken Windows theory of Civilisation!

Pinker while pimping his book in Seed Magazine throws in this insight:

Seed: Steven Pinker on Swearing and Violence

Contrary to the popular belief that we are living in horrifically violent times, rates of homicide in the West have plummeted ten- to a hundredfold over the centuries. The sociologist Norbert Elias noted that this pacification process, correlated with other changes in everyday manners. Starting in the Late Middle Ages, people stopped blowing their noses onto the dining room table, urinating onto curtains, defecating in public, and giving their eight-year-olds advice about prostitution. Taboos on speaking about excretion and sexuality were part of this development. Ellis lumps these trends into a “civilizing process,” in which the formation of states and complex social networks forced people to exercise their superego (today we would say their prefrontal cortex) to inhibit their first impulses.

[ Link ]

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