Subject: WORLD News From: The Dude To: All Date Posted: Mon, Jun 14, 2004 at 19:44:28 (EDT) Email Address: nma@hotmail.com Message: Diplomats and military (and economists) unite in criticising Bush By Joshua Chaffin in WDC More than two dozen members of the military and diplomatic elites from both US political parties are uniting to launch an assault on the Bush administration's conduct of foreign policy, claiming in a letter to be published this week that it has isolated the nation. The 26-member group, known as Diplomats and Military Commanders for Change, includes several people appointed to important positions by Republican presidents Ronald Reagan and George H.W. Bush.Among them are former US ambassadors to Saudi Arabia and the Soviet Union and a former chairman of the joint chiefs of staff, as well as retired Marine General Joseph P. Hoar, who commanded US Forces in the Middle East under former President Bush. Their letter, to be published on Wednesday, represents an unusually broad attack on a president in an election year from the ranks of the career diplomats (Joe?) inside the Washington beltway. It is likely to deepen doubts reflected in recent polls that the nation, under the leadership of president George W. Bush, is on the wrong course. The WH has until now been forced to deal with such professional dissent mostly from individuals such as Paul O'Neill, the former Treasury secretary and Richard Clarke, a former senior counter-terrorism official (and Paul Krugman, a likely future Nobel laureate), both of whom wrote books critical of the administration after leaving their jobs. The broad-based campaign is reminiscent of on launched in April by a group of 52 former British diplomats against Tony Blair, prime minister, over his Iraq policies.Inspired by his attack, former US diplomats in April signed a letter to Mr Bush protesting against his pro-Israeli stance. The US group, which includes both Democrats and Republicans, will claim that Mr Bush's unilateral foreign policies - particularly in the Middle East - have alienated long time allies (remembering Lawrence of Arabia...) while increasing hatred for the US around the world. The group will not formally endorse John Kerry, the presumptive Dem. presidential nominee, though several members have done so on their own. The protest comes after a poll released last week by the LA Times revealed that 56 per cent of Americans believe the country is on the wrong track - the highest number since Mr Bush took office.Nonetheless Mr Bush may be able to blunt the criticism somewhat, as he has recently achieved his greatest successs in reaching out to the international community following the divise decision to go to war in Iraq. He last week won unanimous approval from the UN Security Council (Uff! That's one small step for a man , sigh, one giant leap for mankind, alas, Rwanda etc. etc. etc.?) for a resolution that recognises a new interim Iraqi government chosen with (terribly?) considerable input from the US. Mr Bush also secured a series of photographs (www .coutausse.com/french/somalia/somalia.html) with foreign leaders during a visit to Europe to commemorate the 60th anniversary of the D-Day invasion, and at last's week G8 summit in Georgia that aides hope will convince voters of the president's abilities as a statesman (or politician?)

Subject: Re: WORLD News From: The Dude To: The Dude Date Posted: Mon, Jun 14, 2004 at 19:47:53 (EDT) Email Address: nma@hotmail.com Message: ...or a resolution that recognises a new interim Iraqi government chosen with (terribly!) considerable input from the US. Sorry!

Subject: Unions From: Jack To: All Date Posted: Mon, Jun 14, 2004 at 19:26:18 (EDT) Email Address: jjlwmd@yahoo.com Message: I'm curious about something: what do economists think of unions? Of course those on the right allege that unions distort market forces and lead, well, to all kinds of bad things like overpricing and (ironically) unemployment. But what do those who don't look upon unions so unfavorably have to say? By the way, if the case can be made that unions are more beneficial to society than not, how is globalization affecting the union movement overall? Are those industries specializing in exporting unionized? How much? What about the non-tradable goods and service industries, how are the unions doing there? I mean, out of the overall 12% or so of the American work force that is unionized. Thanks, Jack

Subject: Re: Unions From: Bobby To: Jack Date Posted: Tues, Jun 15, 2004 at 00:46:43 (EDT) Email Address: robert@pkarchive.org Message: If I remember labor economics correctly, there are two models of their effect on employment. There is one model called the 'monopoly union' model where the union has a monopoly on the sale of labor, the unions choose the wage, and then firms choose the level of employment on their labor demand curves that is consistent with that wage. Since firm labor demand slopes downward, if the union chooses a wage greater than the competitive wage, this decreases employment and loss of social surplus. This is the usually case that people implicitly are talking about when they say that unions cause unemployment. [The monopoly union's choice can be modelled this way: firm labor demand is the budget constraint and unions have a utility function increasing in employment and wages. Unions simply maximize that utility s.t. that budget constraint holds, and that is the (employment, wage) bundle that occurs under unions]. However, for industries with very steep labor demand curves, this unemployment/efficiency loss problem is smaller. The second model is called the 'efficient contract' model, where firms and unions negotiate over wages and employment. As usual unions want greater wages and employment which yield greater utility while firms want less wages greater employment which yield greater profits. There is a set of (employment, wage) bundles called the contact curve [in a model the contract curve is a set of (wage, employment) bundles called the contact curve at which the the firm's isoprofit and union's isoutility curves are tangent to each other], at negotiations determine which point on the contract curve they choose. The shape of the contract curve is determined by the specification of the firm's profit function and union's utility function. In the lucky case where the contract curve is vertical they always choose the bundle that keeps employment at its free market level it is efficient since all resources are allocated as they would be in perfect competition and no resources are being drawn from or to other markets. If this bundle has a greater wage level than under the free market, the unions have just made a lump-sum transfer of income from employer to workers. If the contract curve is upward sloping negotiation can only increase wages and employment. However, this causes inefficiency in a competitive general equilibrium economy, since scarce resources (labor) are being drawn from other markets and it would yeild greater aggregate social welfare if they were employment in those other markets instead. If the contract curve is downward sloping negotiation can increase wages but only at the price of decreased employment. This causes inefficiency in a competitive general equilibrium economy since scarce resources (labor) are being sent to other markets and it would yield greater aggregate social welfare if they were employed in this market instead. Which model is better? Likely the second one,and a sketch of the reasoning is that empirical evidence shows that unionized firms generally do not have (employment, wage) bundles that are on their labor demand curves. It is controversial whether the contract curve is vertical. On the no verticality side, some studies show that employment in unionized firms is sensitive to the union wage. The strongest evidence in favor of verticality is that if there is a $1 unexpected increase of the share of rents going to union workers the value of the wealth of the shareholders of the unionized firm decreases by exactly $1. See Ch 11 of Labor Economics by Borjas on this topic

Subject: Re: Unions From: El Gringo To: Jack Date Posted: Mon, Jun 14, 2004 at 20:00:51 (EDT) Email Address: nma@hot mail.com Message: Excellent question

Subject: Re: Unions From: Paul G. Brown To: El Gringo Date Posted: Mon, Jun 14, 2004 at 20:22:17 (EDT) Email Address: Not Provided Message: Excellent answer. ;-)

Subject: Re: Unions From: El Gringo To: Paul G. Brown Date Posted: Mon, Jun 14, 2004 at 20:32:44 (EDT) Email Address: nma@hotmail.com Message: Hehe, I know ;-)

Subject: Argentina From: RL To: All Date Posted: Mon, Jun 14, 2004 at 11:51:50 (EDT) Email Address: rafaelloring@yahoo.es Message: Bobby you might put this in the other's on Krugman section. http://www.forbes.com/columnists/business/global/2004/0607/050.html

Subject: Re: Argentina From: Mik To: RL Date Posted: Mon, Jun 14, 2004 at 18:06:57 (EDT) Email Address: Not Provided Message: RL, It has been quite sometime since I last read a Krugman book. But from what I last remember, Krugman warned against the Argentina case - not because they had a fixed currency, nor because they needed a floating currency, but rather because they weren't able to make up their minds quick enough. Exactly the picture that is portrayed in the article. Now if the article could make exact reference to what Krugman said (where, what and when) then we'd have more clarity on the issue. The one distinct remark I remember Krugman saying went something along the lines of, 'Whether you choose to fix your currency or whether you choose to float it, make your mind up fast and act on it fast.' As a classic example, I believe Krugman advised the leader of Malaysia to fix their currency quickly (against the IMF's advice). The leader of Malaysia did exactly what Krugman suggested and as such Malaysia avoided an even bigger economic bust. I believe this year the IMF officially appologised to Malaysia for the IMF's stance on what happened during the Asian crisis and stating that Malaysia was right to fix their currency at that time period (vindicating Krugman). In essence my point is that I don't remember Krugman being a serious protestor for floating currencies the way the story (you attached) would suggest. If anything, I believe Krugman took a more pragmatic view that could either allow for fixed or floating currency.

Subject: Power Line blog From: Bill Provost To: All Date Posted: Sat, Jun 12, 2004 at 21:36:09 (EDT) Email Address: bjprovost2000@yahoo.com Message: Does anyone have a response to this? http://www.powerlineblog.com/archives/006893.php

Subject: Re: Power Line blog From: Paul G. Brown To: Bill Provost Date Posted: Sun, Jun 13, 2004 at 01:55:46 (EDT) Email Address: Not Provided Message: Well, in the first place, Thank-God! Evidence! It's a small sign of progress. Where to begin? a) First, the two columns The Great Taxer and An Economic Legend (BTW Bobby, the title on that second column is incorrect) point out a number of problems with the Reagan myth that 'Powerline' (and Mr. Luskin) choose to conveniently ignore (or do they tacitly accept them as verities?). Was the 80's economic boom the longest? (No - Clinton's 1990's was) Was Reagan responsible for the biggest single tax hike in history? (Yes) Could the 80's recovery have been predicted by a Keynesian model? (Yes - deficits do that). Instead, Krugman's critics have focussed, with some profit, on the minute, leaving the larger untruths unchallenged. b) Yes, Luskin has caught Krugman in an error. The figure for effective federal tax rates on the middle quintile of household with children at the start of the Reagan Administration was not 8.2%. It was 8.7%. In other words, payroll taxes increased faster under Reagan than Krugman admitted. Overall, the song remains the same. The point of the column was to puncture a couple of myths about Reagan's economic legacy in an effort to examine what it was that the man achieved. Hence. . . c) Was Reagan a tax cutter? Well, according to the very same table the critics provide, if you were in the bottom 60% of income earners, he wasn't Let's look at the overall numbers. Your tax burden increased under Reagan if you were in the bottom 40% of income earners. They barely changed (down by about 1%) if you're in the next 40%. (I'm rouding up here guys). But for the top 20%, taxes fell by 1.9% (I'm not rounding up here). Is this an impressive, tax-slashin' record? Well, not if you're in the bottom 80%. And, a little context, maestro, if you please. d) Let's look at the Clinton years, 1992 to 2000, in the same table. For the bottom 60% of income earners, overall federal tax burden fell. (Yes - Clinton cut taxes) For the fourth quintile, overall taxes were about the same. For the top 20% it went up by about the same amount it fell under Reagan's term. So: Was Reagan a great tax cutter? Well, no more than Clinton was. Would Mr Luskin agree to the proposition that 'President Reagan was as great a tax cutter as President Clinton'? And at least the Clenis didn't run up a huge Federal Deficit (hat tip to the Heritage Foundation) in the process. e) On Popularity. Faced with the evidence that, during his administration, Reagan was not so popular as he would like to believe, and the fact that Mr Reagan was not the most popular president of the modern era when he left office, Mr Luskin finds a single poll result from 2003 showing that Reagan can get about 1/8 people to say he was best ever. Whenever I am confronted by this kind of statistic, I point out that 48% of Americans believe they've witnesses a miracle. On the other side of the ledger, there is the accumulated evidence that, during his regime, Mr Reagan was only about as popular as Mr Clinton, even though the Clenis was being impeached and steadily slimed. Further, Pres. Reagan never enjoyed the peak popularity of Bush 41 or Bush 43. f) Reagan and unemployment. Look, let's suppose we don't care a fig for the man, either way. Let's look, instead, at policies, and outcomes. And it's striking. Reagan's big tax *cut* was 1981. Look at that graph on the Powerline post. Unemployment went *up* for another two years *after* Reagan's big tax cut! Then, in 1982, there was an in income tax increase. Then in 1983, an increase in payroll tax. Only then did unemployment start to decline. President Reagan was many things, but he wasn't Mandrake the Magician. It was the policies, whatever they were, that had this effect. The same truth is striking in the Bush 41/Clinton early 1990s. Tax increase, and viola! economic recovery. This does NOT mean that increasing taxes makes us all wealthier. And even if it did, there are serious personal liberty issues about the way the state takes and spends the result of our individual effort. But within the (fairly narrow) framework of late capitalism and fiscal policy, you have to admit that Clinton's track economic record is slightly more impressive than Pres. Reagan's on conservative hot button issues: overall tax stability, reduce G as % of GDP, sustained economic growth and a booming stock market. (That last is a tip-o-the-hat to Mr Luskin, who obviously cares very much about the well-being of the investor class). In response to Mr Krugman, Mr Luskin uses laguage like 'hoodlum', 'dangerous', 'morally bankrupt', 'pretensions [of scholarship]', and 'standard repertoire of distortions, lies and sloppy economic errors.' I don't know Mr Luskin. We've never met. But he comes across more and more like the savage, alchoholic and formerly brilliant uncle left to linger, muttering, in the corner at family re-unions. He doth protest too much, and in the interests of an agenda that is being day by day revealed as having a no foundation, a cheap formation, and shoddy fixtures.

Subject: Re: Power Line blog From: Pete Weis To: Paul G. Brown Date Posted: Sun, Jun 13, 2004 at 11:31:33 (EDT) Email Address: Not Provided Message: Paul. Very good reply. You support your arguments, perhaps, better than anyone who posts on this site. When I read your posts, it's as if I'm receiving visions from the past, present and future by the Ghosts of Christmas Pasts, Present and Future - as I click on your links. Perhaps I live in somewhat of a cave, but I had never heard of this Luskin character until I visited this site. I peruse a lot of sites dealing with the markets and economy, but don't remember ever seeing references to him, let alone links to his site. This indicates to me that his audience is rather small and whatever economic/political authority he has is of little consequence. On the other hand, I constantly, come across references and links to Krugman even on very conservative investment sites. I wonder if this Luskin vs Krugman thing is really non-existant or would it be more comparable to Pee-Wee Herman vs Joe Fraser? Maybe I'm wrong - what mainline (conservative or otherwise) publications does Luskin contribute to which would give him a large audience?

Subject: Re: Power Line blog From: Pete Weis To: Pete Weis Date Posted: Sun, Jun 13, 2004 at 13:23:33 (EDT) Email Address: Not Provided Message: After visiting Luskin's blog site, I see he writes extensively for the 'National Review'. He lists many sites which link his site but all of them seem to be other conservative blog sites like his own. I often read stuff by conservative economists. John Makin of the American Enterprise Institute is someone whose commentary I sometimes read. AEI is associated with the Brookings Institute. These sites list the credentials of the people who contribute to their commentary. I couldn't find credentials for Donald Luskin listed on the 'National Review' site (nor could I find it for any of their contributers). I'm familiar with Larry-the-market-is-always-going-up-you-know-me-I'm-always-positive-Kudlow and some of the others. What credentials does Luskin have with regard to economic/market issues?

Subject: Re: Power Line blog From: Bill Provost To: Paul G. Brown Date Posted: Sun, Jun 13, 2004 at 09:02:35 (EDT) Email Address: bjprovost2000@yahoo.com Message: Thanks for the reply. You make good points on item a). However, item b) is unpersuasive. Reagan can't be held responsible for the 8.7% middle quintile payroll tax rates of 1980. He didn't even take office until the following year. After hitting a peak of 9.2% in 1981 (again, BEFORE Reagan's tax cuts took effect), those rates drop off to 6.6% by the end of his term. Clearly, Reagan did not raise payroll tax rates on the middle quintile as Krugman claims. Why did Krugman only look at tax rates for families with children? If you look at the effective rates for all households in the middle quintile, they went down under Reagan. Income taxes went down from 8.3% to 5.9% (a significant drop) while payroll taxes rose from 9.1% to 9.7% (1981-1988). That's still a significant net drop in overall tax liability. Otherwise, good points on popularity and unemployment.

Subject: Re: Power Line blog From: Paul G. Brown To: Bill Provost Date Posted: Sun, Jun 13, 2004 at 15:34:00 (EDT) Email Address: Not Provided Message: Hey Bill! First, I am puzzled why we are all so focussed on that middle quintile. It represents only 20% of the nation's households. If we're dividing the households into an upper, middle and lower band of income distibution, and we're going to allow that the 'middle class' make up the majority, then we really ought to be looking at the second through fourth quintile. Second, I don't know why Krugman focussed on 'Households with children'. My opinion (for what it's worth) is that doing so was a mistake. His case--and mine now that I have choosen to take it up--can be made on the more general numbers. The case goes like this: the point is not that 'Taxes rates did not fall under Reagan'. Looking again at that series from the CBO, the overall tax burden fell across all income groups. But the point is that Reagan has the reputation of being a great tax cutter, and his status as a conservative icon rests at least in part on this perception. Justifying it requires showing that he cut taxes to a greater degree than other presidents, and his status as a conservative icon requires showing that the effect of this tax cut was to reduce the size of government as a proportion of the nation's GDP. But the data tells another story. Looking at the Clinton presidency (1993 through 2001) we see that under Clinton, tax rates also fell, and at rates that were comparable to Reagans. For giggles, I've reproduced a table below. This is arrived at by subtracting the Effective Federal Tax Rates for All Households figures in the first year of the relevant administration (1981 for Reagan, 1993 for Clinton) from the last year (1989 for Reagan, 2001 for Clinton). Reagan Clinton First(Low) -0.4% -2.6% Second -0.8% -1.9% Third -1.3% -2.1% Fourth -1.6% -0.9% Fifth(Top) -1.7% 0.0% And look, even these numbers are kind of deceptive. Clinton taxed the top quantile at a peak rate of 28%, which was more than 1% higher than anything under Reagan or Bush I. But is Reagan's reputation as a great tax cutter deserved? Well, only if you allow Clinton the same. And this brings us back to Luskin. Rather than engage in the argument, he engages in what my military friends call 'chicken-shit': find a picayune and peripheral problem, magnify it, and blend in a little abuse for good measure. Now, if you want to see a real tax cutter in action, look at Bush 43. I don't have the detailed data to hand, but George W. Bush has moved decisively to cut income tax and corporate tax rates across the entire spectrum. But what data I do have to hand tells a sad story if you're someone who believes that cutting taxes is a means, not an end. The goal is to reduce the size of government as a proportion of national economic activity. This is what Grover Norquist and his friends ultimately want. And ironically, it's what they got under Clinton. For those of you who follow what the left in this country writes about policy, Clinton's policy mix wasn't very popular in this regard. Their dissatisfaction led to the Nader/Green insurgency in 2000, and the installation of Bush 43. Anyway, the narrow point is that Luskin et al. simply aren't debating in good faith. Was Reagan a great tax cutter? No. He was about as effective as Clinton in this regard, and much less effective than Bush 43. Was he the epitomy of conservative economic policy? No. Government grew under Reagan. By contrast, the size of government contracted under Clinton. Krugman's point is that hagiography is fun, but only in small doses. Hope this helps

Subject: Energy Policy (long) From: Pete Weis To: All Date Posted: Sat, Jun 12, 2004 at 16:25:05 (EDT) Email Address: Not Provided Message: Paul Krugman wrote a brief editorial on May 7 entitled 'The Oil Crunch'. We've been having a lot of discussion on this board recently about whether offshoring is a real problem. Myself along with others (Mik, David E) have been saying it's a real problem due to what we believe will be its rapid advancement and that it will exacerbate other very real problems such as record debt and the ability to service it. But Paul Krugman makes a point in the editorial mentioned above which I believe is so true: 'In a way it's ironic. Lately we've been hearing a lot about competition from Chinese manufacturing and Indian call centers. But a different kind of competition - the scramble for oil and other resources - poses a much bigger threat to our prosperity.' Recent revelations regarding Royal Dutch Shell restating, significantly downward, its previously reported proven oil reserves may prove to be more of an oil industry wide problem. I recently read a story suggesting Chevron Texaco may be doing something similar. The story made the point that during the last six years Chevron Texaco has been steadily reporting ever higher proven reserves all the while its actual production has been dropping. The story suggested that reporting increasing 'proven' oil reserves keeps Wall Street analysts and investors satisfied. We are all aware of what this kind of activity has led to in the recent past - nasty surprises. There have been recent stories in the New York Times with regard to production problems with the largest oil fields in the Middle East - especially Saudi Arabia. The BBC in a June 7 article entitled 'Is the world's oil running out fast?' begins with: 'If you think oil prices are high at $40 a barrel then wait till they are four times that much.' 'This is the message from the Association for the Study of Peak Oil (ASPO).' 'The group of oil executives, geologists, investment bankers, academics and others warning the world of high oil prices, and the ensuing fallout, for some years now.' 'They are united by one idea, that global oil production is about to peak, which in turn will signal the permanent end of cheap oil.' 'Matthew Simmons, an energy investment banker and adviser to the controversial Bush-Cheney energy plan' stated to the BBC that 'oil is far too cheap at the moment'.. 'The figure I'd use is around $182 a barrel. We need to price oil realistically to control its demand.' The BBC article went on to say that oil industry experts and insiders told them there was no chance Saudi Arabia would be able to significantly increase output to meet increasing world demand. Asking delegates of ASPO 'whether a steep increase (by Saudi Arabia) was feasible the answers were unambiguous: 'absolutely out of the question,' completely impossible,' and '3 million barrels - never, not even 300,000.' Today Saudi Arabia produces approximately 30% of the world's oil supply (this is off the top of my head - someone correct me if this is wrong). In the late 50's and early 60's the US represented nearly 60% of the world's oil supply - then we were the sultans of oil. We also produced over half of the world's many other important commodities such as steel. So if we think America's prosperity was mostly due to 'good old American ingenuity', we should realize that there is plenty of ingenuity in Japan, China, India, Europe, etc. But having and producing much or most of the world's commodities brings wealth that is much harder to come by than with just ingenuity. However through ingenius energy policies and technological development the Japanese have been remarkable in this regard. The 70's oil problems were temporarily solved by new oil sources - the Alaskan pipeline, North Sea oil, and dramatic increases in Middle Eastern production. But this time around there will be no new major sources to come on line to meet increasing demand. Energy investment banker, Matthew Simmons (interviewed by the BBC) pretty much summed up the Bush-Cheney energy policy - 'oil is far too cheap'...'the figure I'd use is around $182 a barrel'. Well, what would oil at $182 or for that matter a sustained level above, say, $60 a barrel, do to the US and world economies? What effect would it have on interest rates and consumption? Isn't our present precarious economy based on cheap oil, low interest rates, and the seemingly, unending, ever-increasing consuming of the US consumer? What immediate effect would this have on US auto companies and all the industries supported by the US auto industry? What are Bush, Cheney and Simmons thinking? About the time the Bush administration was undergoing its secretive energy policy formulation - Cheney came out with a real 'jem' - 'the government has no role to play when it comes to energy conservation.' Cheney's energy policy clearly entails charging US corporations and the US public up the whazoo for energy with little else to go with it. This is truely 'future shock'. Some years ago, during my first trip to Japan, I was checking into my hotel. The hotel clerk handed me the key to my room and I was a little annoyed by the long plastic 'stick' that was attached to the key. When I reached the room, opened the door and flicked the switch - no lights. I pinned the door open with my suitcase and began switching lamps in the room to no avail. Finally another hotel guest walked by and told me I needed to push the plastic stick on my key into the slot next to the switch by the door. I did so and the room lit up - you couldn't leave the room without turning off the lights if you wanted to take your key with you. This is one of many simple ideas the Japanese use to cut energy use. We need a very strong energy policy and we need it in a hurry. We need the federal government to lead the way with energy conservation. We need to learn from the Japanese - they are way ahead of us. With minimal effort, we can cut our energy usage considerably. There is no reason to allow the usage of energy inefficient devices such as incandescent lighting. There is no reason why homes, hotel rooms, office buildings can't have electrical designs which force the lights out if you take the key with you. Alarm systems can remain on. I realize that home owners can easily defeat such systems but atleast it's a reminder that they need to conserve and it's saving them money. Computer chips placed in keys (such as we have in modern auto's as antitheft devices) can thwart homeowner's attempts to get around such systems. So many of us leave our hotwater systems set needlessly high - these systems can be designed in ways to eliminate this problem, but our government needs to direct companies who design these systems to place restrictions on how high they can be set. The government needs to get auto companies on the fast track to more fuel efficient autos before our auto companies end up in bankruptcy as they did in the late 70's - it may be too late already, but lets get them headed in the right direction, now, to minimize the damage. I know this will sound like too much intrusion by the government into our lives to some of us. But strong government action, immediately, is needed or we will begin to see much higher unemployment in our near future. Many 'experts' are telling us that alternate energy sources are stiil a long way into our future. This is absolute, total crap. Right now the US and practically every other nation on the planet can meet all of its electrical needs (and then some) utilizing wind power alone. The technology is now. Wind power is going on line across America right now and is the fastest growing energy source right now. In the 80's it cost around 28 cents per KW hour to generate electricity utilizing wind. Today through improved technology it costs about 4 cents per KW hour. One major problem with uneven sources of energy like wind and solar power was energy storage to handle peak demand. That is now being solved by new technologies already going online, such as large vanadium redox battery systems which are replacing power substations in places like Moab Utah. Our power grid can be decentralized and broken into much smaller segments making regions more self sufficient and much less vulnerable to sabotage or simple equipment failure. The cost of developing wind generating systems is much less than building power plants with attendant substations. Wind, solar, and tidal power will gradually become our new dominate forms of energy - it's inevitable. But the goverment needs to take a very active role in speeding the whole process up to avert the impending economic disaster of oil at '$182 per barrel'. The real problem, as I see it, is not the technology and its implementation - it's ready for primetime. It's, rather, the difficult transition for existing energy companies as many will be left behind - there is hundreds of billions at stake here. Somehow, we would need to find ways to soften the blow. The powers that be within the oil and energy industries would fight this tooth and nail. But if we sit back and do nothing we'll end up in much bigger trouble.

Subject: Re: Energy Policy (long) From: Mik To: Pete Weis Date Posted: Mon, Jun 14, 2004 at 18:12:15 (EDT) Email Address: Not Provided Message: Thanks for the article Pete. You know I have often got stuck on our local main highway. 18 lanes of traffic moving at a snail's pace if not parked with engines running. It's mind blowing how much energy is wasted, how much oil is burnt up for very little use. We are long over due on a change.

Subject: Re: Energy Policy (long) From: Paul G. Brown To: Pete Weis Date Posted: Sun, Jun 13, 2004 at 01:56:37 (EDT) Email Address: Not Provided Message: Long, and worth reading.

Subject: Industrial policy on the aircraft market From: Paul0 To: All Date Posted: Sat, Jun 12, 2004 at 07:56:08 (EDT) Email Address: pd0lega@wp.pl Message: Can anyone knows how to get the article: 'Industrial Policy and International competition in wide bodied jet aircraft' by E.Baldwin and P.Krugman from 1988 ???? Please Help

Subject: you site From: dan hill To: All Date Posted: Sat, Jun 12, 2004 at 01:21:18 (EDT) Email Address: dannyhill@triad.rr.com Message: it sucks

Subject: cooking the books From: byron To: All Date Posted: Fri, Jun 11, 2004 at 23:57:21 (EDT) Email Address: bluefin76020@yahoo.com Message: Once again the Bush Admin has lied and decieved the American People for political gain. Just recently it was decovered that Bush was proclaiming that terrorism and deaths were down under his watch. The actual figures were not down but up. This Admin keeps on lying and decieving and gets away with it.What's it going to take for the American People to wake up. Byron

Subject: quasi fiscal policy From: Zi To: All Date Posted: Fri, Jun 11, 2004 at 01:28:22 (EDT) Email Address: ae_mbe@hotmail.com Message: I'm so confuse about quasi fiscal activities what that mean ? an example for quasi fiscal? and how effect to fiscal sustainability. pls. explain. thank you so much.

Subject: Harvard's Biggest Campus Agitator From: The Dude To: All Date Posted: Thurs, Jun 10, 2004 at 20:24:16 (EDT) Email Address: nma@hotmail.com Message: ... 'WSJ:You've written to Secretary of State Colin Powell and Homeland Security Secretary Tom Ridge complaining that delays in processing visas have driven down the number of applications from foreign students.Is the Bush administration hurting higher education by over-emphasizing security? Mr. Summers:If we reduced the Mickey Mouse multiple visa applications in and out for students who can quite obviously be seen as non-threats, we would do better in higher education, promote our security by promoting better attitudes towards America, and have more resources left over to monitor the risky entrants into our country. I look at a system that takes Chinese graduate students who've gone back and forth two or three times already and keeps them in China for five months when they go back for their father's funeral and causes them to fall off their scientific research projects.I just can't see what security purpose that serves.I know it slows progress in U.S. science.... WSJ:You recently announced that parents with family incomes of less than $40,000 will no longer be expected to contribute to the cost of their children attending Harvard, and that the college admissions office will intensify recruiting of low-income students.Are you moving Harvard toward what is sometimes referred to as socioeconomic affirmative action in addition to affirmative action based on race? Mr. Summers:We don't use the affirmative action in talking about admissions.We look at each individual in the whole 'context' of their accomplishments and their background...Certainly as we do that, it is very important that we look at any socioeconomic advantages or disadvantages.Some students are able to afford SAT prep courses and benefit from them;some students are not.Some students' schooling affords them opportunities to demonstrate wonderful excellence in science, music or other fields;other students's schooling does not. ... At a time when the distribution of income and wealth is becoming more and more unequal, it appears that the transmission of inequality may actually be increasing...and higher education has a great deal to do with it.'

Subject: Re: Harvard's Biggest Campus Agitator From: Pete Weis To: The Dude Date Posted: Fri, Jun 11, 2004 at 01:43:30 (EDT) Email Address: Not Provided Message: The Dude. Perhaps we're getting a bit of a return (if however tiny) of the 60's challenge to authority. For some time, I've rationalized to myself that even though The US no longer has its great store of national resources and our productivity levels can no longer make up for our high cost of labor, we still had one very great advantage - we were one of the few attractive countries to which the world's brightest would immigrate and lend their talents to keep our technological level near the top. Sadly, even this advantage seems to be slipping away. Cudos to Harvard for providing a free education to students from families who make less than $40,000. However, they'll need to provide substantial financial aid to students whose families make less than 100,000 (perhaps 150,000) if they want to retain the academic quality of their student body. It's amazing to see the competition to get into state universities (especially the better ones) simply because of the very drastic differences in tuition costs between public and private universities. This can only get worse as lower to upper middle class budgets get squeezed by higher living costs. They simply can't, or don't wish to afford the $35000-$45000 annual costs (even with decent scholarships). Graduate school is, of course, even worse. It's becoming more difficult for even the best private universities to compete for the best talent when tuition at a state university runs $20000-$25000 less per year.

Subject: supply side tax cuts From: Alex To: All Date Posted: Thurs, Jun 10, 2004 at 14:45:54 (EDT) Email Address: sztuden@yahoo.com Message: Lindsey and Barro have made the argument that while no respected economist believes that the Kennedy and Reagan tax cuts were self-financing, the tax cuts for upper income individuals were completely self-financing (due to their original higher marginal rates). Are you aware of any literature refuting this claim? Lindsey (in the Growth Experiment) has argued that to the extent that (the Reagan and Kennedy) tax cuts have increased the deficit, the culprit has been cuts for the lower and middle income individuals, where marginal rates are already much lower, thus minimizing the behavioural effects of a tax cut. (that's not to say that such cuts are a bad idea of course...) How does this square with the oft-repeated assertion that during Reagan's era, labor, or work effort, was not affected by tax cuts? How can we explain both the supposed surge in income inequality during the 80's AND the claim that tax cuts for the wealthy were not self-financing and added to the deficit? If the former is true, the dramatic increase in income for such people would no doubt have also led to a dramatic increase in tax payments as well and should not have lead to higher deficits... Alex

Subject: Re: supply side tax cuts From: Amanda To: Alex Date Posted: Thurs, Jun 10, 2004 at 15:36:32 (EDT) Email Address: Not Provided Message: Wait! I don't understand your last statement. How does tax cuts have anything to do with increased income? Tax cuts mean that less of your money is taken away by the government, but it doesn't follow that tax cuts increase income even for the higher tax brackets. And, I am absolutely no economist, but the problem with supply side economics seems to be the myth that if you give money to the rich, they spend it, invest it, etc etc and it trickles down to the poorer people. And the economy booms so much that deficits aren't a problem. But what happens when the economy doesn't experience a big enough boom to grow itself out of the deficit? The problem is that tax cuts for the rich DECREASES revenue that the federal government receives. Less money requires you spend less. But what if you don't spend less? Then you have deficit. Bush 41 was right. Reagan's economics was nothing more than voodoo economics.

Subject: Re: supply side tax cuts From: Alex To: Amanda Date Posted: Thurs, Jun 10, 2004 at 15:48:39 (EDT) Email Address: sztuden@yahoo.com Message: income dramatically increased for the rich over and above the size of their tax cuts. according to lindsey, it increased so much that rich people actually paid more in taxes (or the same) than they would have if taxes had not been cut. please cite me a condradictory study or show me contradictory numbers focusing on the effect for the deficit of tax cuts for upper income people, not overall. thank you.

Subject: Re: supply side tax cuts From: Paul G. Brown To: Alex Date Posted: Thurs, Jun 10, 2004 at 18:21:36 (EDT) Email Address: Not Provided Message: I've not read Mr Lindsey's note (does anyone have an on-line citation), but I fear he may be post hoc, ergo proctor hocing. The aggregate income of 'the rich' (say, top 1%) may well have increased after the 1981 tax cut, and it might well have increased by enough that the total tax take from the top 1% increased. But that doesn't mean that the increase in income was caused by the tax cut. We have a counter example: in the late 1980's and early 1990's we saw an increase in tax rates on the top end. If I read this report right (See page 5, Figure 3C), income at the top end continued to increase at a faster clip than it increased in other income brackets (although the difference was not nearly so profound as it was from 1980-1992, see Figure 3B). So: at a glance, the evidence that the 1981 tax cut on high income brackets led to the increasing income at the high end is at least balanced by the evidence that an increase in taxes at the high end in 1992 was followed by another period of rising income inequality. There are quantitative differences, but I don't see a lot of evidence of a significant qualitative difference. Can anyone supply some more evidence?

Subject: Re: supply side tax cuts From: Alex To: Paul G. Brown Date Posted: Thurs, Jun 10, 2004 at 19:03:04 (EDT) Email Address: sztuden@yahoo.com Message: I think the article cited lends support to Lindsey's position. The article makes clear that the trend of rising income inequality began in 1981 (page 7) after 15 more or less stable years. (1981, not coincidentally, marks the year of the tax cut act.) Moreover, the trend of rising income inequality which took off in 1981 stabilized around 1993 (page 8 towards the end).

Subject: Re: supply side tax cuts From: Paul G. Brown To: Alex Date Posted: Thurs, Jun 10, 2004 at 20:57:33 (EDT) Email Address: Not Provided Message: Granted that the growth of income inequality has slowed slighly since 1993. Nevertheless, after a tax increase on the wealthiest, they still got wealthier. Also, you'll note that the Figures 3 A & B show rates of growth over 12 year periods, while 3 C shows growth over a 4 year period. And while Figure 7 is interesting, it is the only statistic in the whole damn paper that covers the period 1993-1998. All of the others are '67 through '98. Why the difference? And they make a point of not drawing any conclusions about impact of taxation on income inequality: an entire section on pp. 9-10 with the title 'How Do Taxes Affect Income Inequality?' essentially says nothing about the question. But again, the rebuttal I'm making is fairly narrow. I'm not denying the increase in income inequality. I'm only saying that the facts Lindsey lays out don't unambiguously support his conclusion. I mean, Reagan increased taxes on the wealthy again in '82, and the biggest growth in top bracket incomes occured after that change. In the 1980's, the rich began getting richer faster than they had before. The trend continues. But there are alternative hypothesis to Lindsey's: productivity improvements, loss of manufacturing jobs, changes in social policy. The paper more or less makes that case on page 10.

Subject: Look for a rebuttal here From: David E... To: Alex Date Posted: Thurs, Jun 10, 2004 at 19:43:43 (EDT) Email Address: Not Provided Message: Brad De Long has 125 references to Larry Lindsey. This site only has 4. Maybe you will find it there. link http://www.google.com/search?sourceid=navclient&ie=UTF-8&oe=UTF-8&q=site:www.j-bradford-delong.net site:www.j-bradford-delong.net 'larry lindsey' Larry Lindsey does not have my respect. Presidential candidate Bush's plan to save Social Security with savings accounts had a hidden kicker. The savings accounts earnings were going to be skimmed to save social security. That is a bad faith proposal, made only to win election votes.

Subject: Re: Look for a rebuttal here From: Pete Weis To: David E... Date Posted: Fri, Jun 11, 2004 at 00:37:58 (EDT) Email Address: Not Provided Message: Other factors leading to the income gap involved the troubles of the steel, auto, and textile industries going into the 80's. Workers were forced into concessions and took the brunt of corporate operating cuts. Reagan effectively broke the bargaining power of the unions. However, the 80's were a decade of rising stock markets and just as they did in the nineties, executives of the 80's gave themselves lucrative stock options and ever higher salaries. In contrast worker wages and benefits rose very little. Remember also the very high rise in social security tax that fell heavily on those with earned income and not on investment income.

Subject: Re: Look for a rebuttal here From: El Gringo To: Pete Weis Date Posted: Fri, Jun 11, 2004 at 21:07:36 (EDT) Email Address: nma@hotmail.com Message: 'Inequity and Conflict Inequities hamper economic development and lead to other problems as well, such as social instability. In recent years, social instability and armed conflict have been associated with rising income inequality and growing resource scarcity. In Indonesia, mobs have burned factories and cars to protest grievances ranging from land disputes to pollution from shrimp ponds. In the Philippines, Muslim rebels are most active in western Mindanao, where the wealth gap between that region and the capital Manila is as great as that between the Republic of Korea and Bangladesh [20]. There is a close correlation between the stronghold areas of the guerrilla movement in Peru and the areas suffering greatest poverty. Further, the Zapatista rebellion in the southern Mexican state of Chiapas is largely attributable to grossly inequitable patterns of land tenure and the inability of peasant farmers to subsist on their small, degraded land holdings [21]. Many governments are responding to the economic and security threats posed by growing income inequities. In the early 1990s, for example, the Chinese government targeted 80 million people living in poverty, mostly in villages in the western areas of the country. It gave priority to ensuring adequate supplies of food and clothing. By 1996, 22 million people had been lifted above the national poverty line [22]. In the longer term, reducing income inequality and ensuring adequate human development for all is likely to depend on greater commitment to the implementation of policies for broader-based economic growth and poverty reduction through increased investment in public education and health. (See Urban Growth.) ' http://www.wri.org/wr-98-99/econgrow.htm

Subject: Why some people should not vote From: EZ To: All Date Posted: Thurs, Jun 10, 2004 at 12:00:57 (EDT) Email Address: ejz23@yahoo.com Message: I just wanted to share something I read in the Washington post Today titled, 'Economy Provides No Boost for Bush' 'For Bush, that sensitivity to foreign affairs is not all bad. Maria Sandoval, an elderly Democrat in Colorado Springs, has had a rough time of it in the past few years, living solely on Social Security and relying on the county clinic for her health care. On the economy, Bush 'hasn't done very good,' she allowed. He could have offered more help, she said, and his prescription drug law does not promise her much, either. But Bush has her vote, she said firmly. 'I guess he hasn't put too much into [the economy], but he's busy with a lot of other things. He's on top of everything. That's what I like about him.' During the Clinton years, Jeremy Tuck said he had been selling mobile homes in Tuscaloosa, Ala., and, at $45,000 a year, making good money. Last year, he was assembling mobile homes, earning $15,000 and living hand-to-mouth. But Bush has his vote this November. Had Gore been elected in 2000, Tuck said, 'we would've been taken over by Saddam Hussein or [Osama] bin Laden.' 'You make more money in plain terms when Democrats are in office,' Tuck said with a shrug, 'but Republicans are stronger on the military, and that's why I'm voting for President Bush.'

Subject: Re: Why some people should not vote From: Bobby To: EZ Date Posted: Sat, Jun 12, 2004 at 05:40:32 (EDT) Email Address: robert@pkarchive.org Message: 'Had Gore been elected in 2000, Tuck said, 'we would've been taken over by Saddam Hussein or [Osama] bin Laden.'' What scares me is that anyone could believe such b.s. There do exist scenarios in the war on terror that are completely irrelevant to formulating proper strategy at present, and the above is one of them (and Saddam really wasn't a major threat or part of the war on terror). It really shows that many people are not willing to take the threat seriously. As much as bin Laden et al. would like to do so, the threat is not that they will take over the world as Hitler would have without a military response in World War II, but that they will continue to launch attacks on innocent people, especially in the U.S. For the time being, the worst case scenario for the U.S. is not that the U.S. government will be overthrown and replaced by an Islamist regime (no other government, much less terrorist group, has the technology to overthrow the U.S. government), but that New York and possibly other cities as well will be destroyed or rendered uninhabitable by a nuclear or biological terror attack. In the very long run, the war on terrorism may not even look like a war or be directed only at Islamist terrorism specifically. In general, we must create a proper government effort to stay one step ahead of the kind of technological change that makes it cheaper and feasible for discontented small groups or even individuals to acquire without detection the means to kill unspeakable numbers of people. Instead of repeating myself, I'll just repost this post on what we actually should be doing in the war against terrorism. I think it's contents apply to combatting both the long run and very long run threats: The war on terror is not a war like WWII or Vietnam. If it is a war, it is one in the sense that the Cold War was a war (this analogy is helpful since the claim that dissent 'helps the enemy' has far less credibility in a Cold War-like war, as opposed to a WWII-like war). In the long run, in order to beat Islamist terrorism, we have to win over the hearts and minds of people in the Muslim world, and we're going in the exact opposite direction now. 'Taking the fight to the enemy,' which is more of a slogan than a thought out strategy can't be our only line of defense as it is with Bush. It definitely should not be carried out in the fashion Bush has done, which creates terrorists and support for them faster than we can kill them. We need in general at least three lines of defense, almost all of which are being ignored. Foremost we need a program at home to detect and prevent attacks on large populations within our country, especially in urban centers like NYC. This should be our last line of defense. In general, this would involve taking our scarce resources out of Iraq for now and put them into port security, repurchase of nuclear fuels overseas (including not only former Soviet republics but also India and Pakistan and maybe Iran), new technologies to detect chemical and nuclear weapons, and metal detectors in crowded areas, chemical detectors, and other securty measures to defend us at home, especially in our cities, and especially New York. Then our second to last line of defense should be port and border security (for WMD and terrorist-detecting purposes, not anti-immigration ones). Our first line of defense should involve espionage, cooperation, cooption, and infiltration of foreign intelligence, and covert operations in foreign countries to detect terrorist, plots, and WMDs that can be used against us. This requires cooperation with Muslim countries, which includes the public support from their general populations for our actions. This is made far more difficult if the populations of these countries hate us because of unnecessary things that offend them like our Iraq venture. This first line of defense is really the only sense in which we should be 'taking the fight to the enemy,' whereas occupation, like in Iraq, is an extreme measure for extraordinary circumstances. Iraq really does not apply to this though Afghanistan was necessary. Ironically, this first line of defense will likely take the longest to create, and it is made longer by our current occupation of Iraq. Port security and protection of concentrated populations is difficult, but at least something acceptable can be put in more quickly if we spend more money. Improvements in such a system can begin sooner if we make this system more quickly. Sadly Bush is wasting our resources on Iraq and highly regressive tax cuts. By pissing off the Middle East right now he is making an attack here at home more likely, and they have far more adherents willing to participate in it due to our actions in Iraq. But compared to what we need, we have very little in place to defend us due to Bush's neglect.

Subject: Defending Mr. Tuck . . . From: Paul G. Brown To: EZ Date Posted: Thurs, Jun 10, 2004 at 15:44:52 (EDT) Email Address: Not Provided Message: > 'You make more money in plain terms when Democrats are in > office,' Tuck said with a shrug, 'but Republicans are stronger > on the military, and that's why I'm voting for President Bush.' Whether or not the Repubs or the Dems are 'stronger on the military', and whether or not 'you make more money ... when Democrats are in office', Mr Tuck has here expressed a sentiment I respect. There's a biblical injunction: 'What does it profit a man if he gains the whole world, but loses his soul?' (Mark 18:36, also in Mathew & Luke). There's a lot to be said for non-material measures of human progress; morality, the character of the body politic, culture. What Mr Tuck is saying is that cares about something more than money. I actually like that in a person. All of our economics only gets us so far. It used to be that progressives had the morality argument on their side. Suffrage, Civil Rights, and so on. But now morality has been turned into a contest between negative visions of human potential, rather than positive ones.

Subject: Re: Defending Goethe... From: El Gringo To: Paul G. Brown Date Posted: Thurs, Jun 10, 2004 at 17:16:46 (EDT) Email Address: nma@hotmail.com Message: The basic plot of 'selling one's soul to the devil' for power over the physical world took on increasing importance and became a metaphor for the victory of technology and industrialism and its human cost....

Subject: Re: Defending Mr. Tuck . . . From: EZ To: Paul G. Brown Date Posted: Thurs, Jun 10, 2004 at 16:36:13 (EDT) Email Address: ejz23@yahoo.com Message: Paul G. Brown your quote was very interesting, yet very irelavent, Mr. Tuck said 'we would be over run by Saddam and Osama' First, Saddam was never a threat, even Bush now admits that. And if Tuck was so scared of Osama, why is he not scared that we have not found him and have no intention of finding him as we have moved most of our resources out of afgahnistan to concentrate on Iraq.

Subject: Re: Defending Mr. Tuck . . . From: Paul G. Brown To: EZ Date Posted: Thurs, Jun 10, 2004 at 17:00:33 (EDT) Email Address: Not Provided Message: Oh I have not a whole lot of sympathy with Mr Tuck on that point. I'm as ticked at Bush 43 as anyone. But I was intrigued by the last quote. Mr Tuck acknowledges that he's voting against his narrowly defined self-interest. That's a purple cow; always curious to see one.

Subject: Re: Why some people should not vote From: Amanda To: EZ Date Posted: Thurs, Jun 10, 2004 at 13:50:07 (EDT) Email Address: Not Provided Message: Republicans strong on national security is just a myth. Just like the myth that they are better with the economy and managing our federal deficit, and wars and military, etc. etc. etc. According to recent numbers soon to be re-released by the State Department (the first time, they miscounted, idiots, and called a press conference to announce that they were making the world safer against terrorism) incidents of terror are up in the world, speculation could be that this year saw the highest numbers of terror incidents ever! So according to Daily Kos, he asks: When they refigure the numbers will they again call a press conference to announce that the Bush Administration has made the world more unsafe? Incompetant, lying idiots, all of them.

Subject: Re: Why some people should not vote From: RL To: Amanda Date Posted: Fri, Jun 11, 2004 at 05:37:48 (EDT) Email Address: rafaelloring@yahoo.es Message: I find the article tendencious. As many of you I despise Bush but to picture some Bush voters saying nonsense is unfair. It would be very easy to pick up some kerry's voters saying stupidites and then say 'why some people should not vote', a plain fascist statement. If you judge voters reasons don't surprise your self if your government thinks it's own people is wrong and acts contrary to its wishes.

Subject: What happens on the NYT columns? From: Min To: All Date Posted: Thurs, Jun 10, 2004 at 11:15:25 (EDT) Email Address: cyoyomil@hotmail.com Message: I could not find those before Oct.01. They were there just a few weeks ago, and I decided to read it later when I have time--I just discovered this site a month ago. Could anyone tell me what happens to them, and better, where to find them (other than purchasing it from NYTimes?) Thanks.

Subject: Re: What happens on the NYT columns? From: Bobby To: Min Date Posted: Sat, Jun 12, 2004 at 03:55:52 (EDT) Email Address: robert@pkarchive.org Message: My God! It appears my computer or the piece-of-shit file transfer device erased the bottom half of my columns index. I repaired it, and all The NYT columns are there. I'm truly sorry, and I'll check every time now to make sure that the bottom of my index pages aren't cut off when I upload them.

Subject: Great Site Bobby! Thanks 4 your Hard work. n/m From: David E... To: Bobby Date Posted: Sat, Jun 12, 2004 at 12:06:33 (EDT) Email Address: Not Provided Message: n/m

Subject: Re: What happens on the NYT columns? From: Min To: Bobby Date Posted: Sat, Jun 12, 2004 at 10:50:43 (EDT) Email Address: cyoyomil@hotmail.com Message: Thank you so much for your reply, and for collecting all those fabulous archive articles.

Subject: Re: What happens on the NYT columns? From: El Gringo To: Min Date Posted: Sat, Jun 12, 2004 at 19:59:34 (EDT) Email Address: nma@hotmail.com Message: Bobby, we all love you, thanks!

Subject: Toyota Prius and the Trade Deficit From: Neo-Solow To: All Date Posted: Wed, Jun 09, 2004 at 23:17:22 (EDT) Email Address: nma@hotmail.com Message: Greater reliance on Middle East ' is inevitable' by Sheila McNulty in Houston Lee Raymond, head of ExxonMobil, the world's biggest publicly listed oil and gas company, expects the US and the rest of the world to become increasingly dependent on energy from the Middle East. 'This is not a matter of ideology or politics.It is simply inevitable.'Mr Raymond told the Woodrow Wilson International Center for Scholars in Washington DC.We periodically hear calls for US energy independence, as if this were a real opinion' he said.'The fact is that the US is a part of the world energy market, and we must participate and we must compete in that market.' He said the US did not have the resource base to be energy dependent.Neither did it have guaranteed supply rights to the energy it needed from abroad. So the US needed to think carefully about the nature of its relationships with countries in the ME, as well as other regions that would be increasingly important as suppliers including those in sub-Saharan Africa (Nigeria?), Russia, Central Asia and Venezuela (Chavèz?) Even as these other regions added to the world's resource pool, he said there were industry estimates that about half of proved worldwide oil and gas reserves were in the ME, with Saudi Arabia 'alone' (Iraq ?) having about one-fifth of the world's reeserves. 'We need to accept the reality of this, rather than undertake expensive and risky (remembering Rodin...) steps trying to avoid it', Mr Raymond said.Especially since, he noted, worldwide energy needs were going to go up rather than go down.ExxonMobil(e) estimates global energy use will increase about 40% by 2020 (In the year...), as demand rises from about 215m oil equivalent barrels per day to almost 300 oil equivalent b/d.That translated to nearly 13bn per day, he said, underlining the fact that the world's energy system was arguably the world's largest industry. Though he saw a place for alternative fuels, Mr Raymond believed fossil fuels, including coal, oil and natural gas, would provide about 80% of the energy used in 2020 and increase by 65m oil equivalent b/d.That was close to eight times Saudi Arabia's current crude oil production. Meanwhile, non-fossil fuel use would only increase by about 8m oil equivalent b/d.That was because current technology made oil and gas both the least expensive and the most versatile.'

Subject: Re: Toyota Prius and the Trade Deficit From: Pete Weis To: Neo-Solow Date Posted: Thurs, Jun 10, 2004 at 00:26:43 (EDT) Email Address: Not Provided Message: Greater reliance on the Middle East is one thing. Whether or not the Middle East can deliver is quite another. It's likely the Middle East can't come close to delivering - especially the numbers Raymond is quoting. Raymond is worried about the way things are headed in the Middle East and he should be. The BBC recently quoted oil industry experts/insiders saying if oil were presently 'fairly' priced it would be set at $180-$190 per barrel - not sure how they came up with that number. Alternate energy sources will soon become an extreme necessity as oil prices really start to rise in the coming decade - prices have not really started to rise much yet and we will think of $40 a barrel as a fond memory in not too many years. Mr. Raymond's company will surely benefit from those increases. But he better start changing his 'opinions' about alternate energy sources or his company will end up like Kodak and Zerox.

Subject: knowledge economy From: lutao ning To: All Date Posted: Wed, Jun 09, 2004 at 09:01:04 (EDT) Email Address: ln227@cam.ac.uk Message: Has Paul Krugam spoken about Knowledge economy? thanks

Subject: Re: knowledge economy From: El Gringo To: lutao ning Date Posted: Wed, Jun 09, 2004 at 15:43:40 (EDT) Email Address: nma@hotmail.com Message: What is the current 'definition' of the Knowledge economy ?

Subject: another question From: Jack To: All Date Posted: Tues, Jun 08, 2004 at 22:16:05 (EDT) Email Address: jjlwmd@yahoo.com Message: The responses posted to my last question were quite good, even if one or two of them went over my head. This leads me to ask another question that I've always wondered about: How much does high risk investment contribute to economic growth? The reason I ask is this: federally insured banks are regulated (well, usually) in such a way that they are not permitted make high risk investments due to the moral hazard such an allowance would (and in some cases of such deregulation has) lead to. So I assume high risk investment is left to private investors. But how important is high risk investment to the economy? Is it more detrimental than beneficial to growth? If that is true, than why allow it at all? I'm asking this question from an economic/utilitarian point of view, with no intended regard to rights and liberties (that's another by no means irrelevant question). Thanks again

Subject: Re: another question From: Mik To: Jack Date Posted: Wed, Jun 09, 2004 at 17:06:31 (EDT) Email Address: Not Provided Message: Interesting question. I don't think there is detriment to any economy to have an element of high risk investments. Normally the portfolio of investments comprises of both high and low risk investments. High risk tend to offer high rewards and vice versa for low risk. So there should be some high risk investments. I now have a problem with the defintion of risk though. In my opinion there is a huge problem with understnaidng risks. What one financial institution may see as an 'okay' investment another institution may see it as 'high risk'. So this topic is in my opinion some what subjective.

Subject: Risky business From: Paul G. Brown To: Mik Date Posted: Wed, Jun 09, 2004 at 22:44:28 (EDT) Email Address: Not Provided Message: Sorry about the Subject. Couldn't resist. Wipedia, as usual, has some interesting things to say about Risk.. Google also hacks up a lot of useful hairballs: search under 'Risk Analysis Mathematics' or somesuch. Several good schools have lots of course-work on-line. And if you're the reading kind, Peter Bernstein's Against the Gods: The Remarkable Story of Risk is really good. It explains the mathematics of risk in a historical context. And if the Bernstein book whets your appetite, you might consider this dense tome by Ralph Vince. Like it says in the title, you're gonna get a little math with that. In a nutshell, the study of risk and economic return doesn't fit into a nutshell. It's a *huge* topic, but the overall goal is to get as much subjectivity out of risk assessment as you can. On the OP's questions: It's strikes me that it's very hard, in principle, to extrapolate from the micro-economics realm where risk is typically considered, into the macro-economic realm of your questions. Risk decisions in a free market economy are made every by a very large number of individual decision makers. Some pay off. Many don't. But overall, few opportunities go unexplored. Less risky ones get taken early, with riskier ones attracting fewer takers. And that's the genius of capitalism.

Subject: Re: Risky business From: Mik To: Paul G. Brown Date Posted: Mon, Jun 14, 2004 at 18:35:27 (EDT) Email Address: Not Provided Message: Paul, I only picked up to this now. I did quite a bit of reading on risk analysis for toll road projects in developing countries. Just about every second boffin tries to put numbers to some very subjective factors. Risk of slope failure (engineering), risk of business failure (financial) and risk of currency failure (economic) to name a few. And when all else fails they introduce a 'MAGA' clause (Material Adverse Government Affect). I once went through the list of risks and (indicator figures) prepared by an investment banker. The list was just never ending and it was in my opinion ridiculous. Under those risk catogories the project would never have gotten off the ground in the first place. Luckily another investment banker came around with a whole different take on the concept of risk - and what do you know, the project took off. Who was right between the two? We'll actually only know in about 30 years (once the concession comes to an end). But one thing is for sure, I could apply the same risk analysis prepared by the first Investment Banker to many projects such as the Golden Gate Bridge (which I did to make a point) and we'd find that the Golden Gate should never have been built. Looking back, the Golden Gate Bridge turned out to be a sound investment. You make the statement about how few opportunities go unexplored. I couldn't disagree with you more. There are literally thousands of business opportunities in developing countries that are still waiting to be explored. The major problem is that risk models as we know them are still centred around more controllable factors found in developed countries. So now I do agree with your other statement, this is a 'huge topic' but still far more subjective than what most can imagine. But alas your last statement is true - Less riskier projects get taken first (and if I can add) wealth in the developing world will not be truly unlocked because it doesn't fit in with 'some risk model'. And that's the genius of capitalism.

Subject: Re: another question From: El Gringo To: Mik Date Posted: Wed, Jun 09, 2004 at 21:44:29 (EDT) Email Address: nme@hotmail.com Message: 'Risk is the potential future harm that may arise from some present action.It is often combined or confused with the probabillity of an event which is seen as undesirable.Usually the probability and some assessment of expected harms must be combined into a believable scenario combining risk, regret and reward probabilities into expected value.There are many informal methods which are used to assess (or to 'measure' although it is not usually possible to directly measure) risk, and (for some applications) formal methods such as value at risk.' http://www.rodinmuseum.org

Subject: globalization From: jack To: All Date Posted: Mon, Jun 07, 2004 at 20:11:52 (EDT) Email Address: jjlwmd@yahoo.com Message: This doesn't pertain specifically to Paul Krugman, though he has written quite extensively on the subject of globalization. Following mainstream economic theory, free trade ought to lead via the mechanism of comparative advantage to increased productivity for all countries trading with one another, and hence increased living standards for all. But I have a question, one which probably stems from the fact that I have never taken an econ class, and it regards the international competition for labor. Wouldn't decreasing national barriers lead to more and more labor competition and hence falling wages for those workers in the wealthier, developed nations? The wages of poorer workers would of course increase, but how far? Would the wage rate stabalize at a point where most workers are relatively either worse off or not that muchy better off relative to their national and international standards? I know this sounds wrong, but I just want to have a pretty good answer for anyone who brings this point up to me in conversation or class. Thanks, Jack

Subject: Re: globalization From: IZ To: jack Date Posted: Tues, Jun 08, 2004 at 20:37:00 (EDT) Email Address: iz@iz.com Message: Well, this does apply to Paul Krugman because he had to deal with issue when William Grieder's One Work book came out. Greider similarly describes a global race to the bottom for wages. But wages do not work like that. Assume people in the US start buying textiles from Asia. Yes, wages in the textile industry will decline. But income among textile consumers will increase by a greater amount. The increased income will stimulate the economy...and the gains will be greater than the loss in wages in the traded sector. there is no single wage rate. Wages in industries where US workers are no more productive than Asian workers and the good is freely traded will tend to converge at some middle point. BUT...in most industries, US workers are far more productive than their counterparts and most goods are not freely tradeable. One way to think of the impact of globalization is that the impact is the same as innovation and automation. Automation puts people out of work...but improves the economy and [hopefully] the overall standard of living. A problem with manufacturing jobs is that not only are the goods being traded, but, perhaps much more important, is that the forces of innovaton and automation are exerting constant pressure on productivity in manufacturing -- essentially using fewer and fewer people to generate the same amount of output. The social problem is that our economy is very unforgiving with the minority who exist in the tradeable good. It is difficult to retrain.

Subject: Re: globalization From: IZ To: jack Date Posted: Tues, Jun 08, 2004 at 20:36:42 (EDT) Email Address: iz@iz.com Message: Well, this does apply to Paul Krugman because he had to deal with issue when William Grieder's One Work book came out. Greider similarly describes a global race to the bottom for wages. But wages do not work like that. Assume people in the US start buying textiles from Asia. Yes, wages in the textile industry will decline. But income among textile consumers will increase by a greater amount. The increased income will stimulate the economy...and the gains will be greater than the loss in wages in the traded sector. there is no single wage rate. Wages in industries where US workers are no more productive than Asian workers and the good is freely traded will tend to converge at some middle point. BUT...in most industries, US workers are far more productive than their counterparts and most goods are not freely tradeable. One way to think of the impact of globalization is that the impact is the same as innovation and automation. Automation puts people out of work...but improves the economy and [hopefully] the overall standard of living. A problem with manufacturing jobs is that not only are the goods being traded, but, perhaps much more important, is that the forces of innovaton and automation are exerting constant pressure on productivity in manufacturing -- essentially using fewer and fewer people to generate the same amount of output. The social problem is that our economy is very unforgiving with the minority who exist in the tradeable good. It is difficult to retrain.

Subject: Re: globalization From: IZ To: jack Date Posted: Tues, Jun 08, 2004 at 20:36:12 (EDT) Email Address: iz@iz.com Message: Well, this does apply to Paul Krugman because he had to deal with issue when William Grieder's One Work book came out. Greider similarly describes a global race to the bottom for wages. But wages do not work like that. Assume people in the US start buying textiles from Asia. Yes, wages in the textile industry will decline. But income among textile consumers will increase by a greater amount. The increased income will stimulate the economy...and the gains will be greater than the loss in wages in the traded sector. there is no single wage rate. Wages in industries where US workers are no more productive than Asian workers and the good is freely traded will tend to converge at some middle point. BUT...in most industries, US workers are far more productive than their counterparts and most goods are not freely tradeable. One way to think of the impact of globalization is that the impact is the same as innovation and automation. Automation puts people out of work...but improves the economy and [hopefully] the overall standard of living. A problem with manufacturing jobs is that not only are the goods being traded, but, perhaps much more important, is that the forces of innovaton and automation are exerting constant pressure on productivity in manufacturing -- essentially using fewer and fewer people to generate the same amount of output. The social problem is that our economy is very unforgiving with the minority who exist in the tradeable good. It is difficult to retrain.

Subject: Re: globalization From: IZ To: jack Date Posted: Tues, Jun 08, 2004 at 20:35:19 (EDT) Email Address: iz@iz.com Message: Well, this does apply to Paul Krugman because he had to deal with issue when William Grieder's One Work book came out. Greider similarly describes a global race to the bottom for wages. But wages do not work like that. Assume people in the US start buying textiles from Asia. Yes, wages in the textile industry will decline. But income among textile consumers will increase by a greater amount. The increased income will stimulate the economy...and the gains will be greater than the loss in wages in the traded sector. there is no single wage rate. Wages in industries where US workers are no more productive than Asian workers and the good is freely traded will tend to converge at some middle point. BUT...in most industries, US workers are far more productive than their counterparts and most goods are not freely tradeable. One way to think of the impact of globalization is that the impact is the same as innovation and automation. Automation puts people out of work...but improves the economy and [hopefully] the overall standard of living. A problem with manufacturing jobs is that not only are the goods being traded, but, perhaps much more important, is that the forces of innovaton and automation are exerting constant pressure on productivity in manufacturing -- essentially using fewer and fewer people to generate the same amount of output. The social problem is that our economy is very unforgiving with the minority who exist in the tradeable good. It is difficult to retrain.

Subject: Re: globalization From: IZ To: jack Date Posted: Tues, Jun 08, 2004 at 20:34:38 (EDT) Email Address: iz@iz.com Message: Well, this does apply to Paul Krugman because he had to deal with issue when William Grieder's One Work book came out. Greider similarly describes a global race to the bottom for wages. But wages do not work like that. Assume people in the US start buying textiles from Asia. Yes, wages in the textile industry will decline. But income among textile consumers will increase by a greater amount. The increased income will stimulate the economy...and the gains will be greater than the loss in wages in the traded sector. there is no single wage rate. Wages in industries where US workers are no more productive than Asian workers and the good is freely traded will tend to converge at some middle point. BUT...in most industries, US workers are far more productive than their counterparts and most goods are not freely tradeable. One way to think of the impact of globalization is that the impact is the same as innovation and automation. Automation puts people out of work...but improves the economy and [hopefully] the overall standard of living. A problem with manufacturing jobs is that not only are the goods being traded, but, perhaps much more important, is that the forces of innovaton and automation are exerting constant pressure on productivity in manufacturing -- essentially using fewer and fewer people to generate the same amount of output. The social problem is that our economy is very unforgiving with the minority who exist in the tradeable good. It is difficult to retrain.

Subject: Re: globalization From: Mik To: jack Date Posted: Tues, Jun 08, 2004 at 15:53:03 (EDT) Email Address: Not Provided Message: Jack, you asked a very good question. Bob has given the classic text book reply. I want to point out a few factors that the text book conveniently does not emphasize. The whole concept of importing goods (by having them made by cheaper labour) makes the goods cheaper and improves the salaries of the poor. That is a true statement. The concept of ongoing improvement in the salaries is the difficult concept simply because Economics studies apply the principle of cetris parabus - all things remaining equal. So in other words if there were, say, only two economies in the entire world, the statement would hold true. However as we have far more than two economies, the statement only holds true in the long run. This is the difficult concept now - and where I have become a pessimist. I believe what Keynes once said, 'In the long run we are all dead.' So in essence - I think you answered your own question pretty well using your logic and looking at the matter from a short to middle run period. Another issue that Bob raised is the concept of skilled labour verse unskilled labour. Now this to me is a very vague concept. I used to get involved in the measurement of productivity between skilled, semi-skilled and unskilled labour. The clear issue to me is that the concept of skilled/semi-skilled/unskilled changes over time. In the past, our grand parents were the skilled labour that knew how to make great motor cars and hence the reason why motor cars were made in the great western countries. Today BMWs are fully made in Africa. Today skilled labour tends to refer to 'white-collar' labour. And we in the west hold the skilled labour jobs, because we know how to work a computer better than people in developing countries (I think you can see where I am going with this). Well today everyone, but everyone's job is under threat of being moved to a developing country. Many developing countries can do anything and everything that we can do in the west. It's only a matter of time before someone figures out how to move the job to a developing country. In the 'long run', some sort of harmony will be reached - in the mean time we will live in a state of constant change.

Subject: Re: globalization From: RL To: Mik Date Posted: Thurs, Jun 10, 2004 at 04:47:51 (EDT) Email Address: rafaelloring@yahoo.es Message: 'we will live in a state of constant change' What a nice sentence, but isn't it the nature of economics? I hear again that now everybody's job is under threat. But it has always been that way, the difference might be that your job is now under threat of being taken by a foreigner ( by the way i may be a foreigner to you, spaniard) but do you really care where the job goes? No, what you really care is to have one. To the country what it matters is overall creation of jobs and the weel being of its population. This is without disscussion better with the more efficient open economy. As other countries get more jobs and their economies grow they also create demand for more and new goods and services. The result is yes far greater competions in all classes of jobs but a more efficient global economy (it could only be a race to the bottom if the global economy doesn't improve). As always, some will lose but overall productivity will increase. Why what it was goods for industrial jobs it is'nt for other kind of jobs?

Subject: Re: globalization From: Mik To: RL Date Posted: Thurs, Jun 10, 2004 at 15:14:10 (EDT) Email Address: Not Provided Message: Yep you have a very good point, you are typically referring to opening up trade barriers. Paul Krugman once made a quote, 'Just because your neighbouring countries' ports have been blocked, does it mean you should lose out on the porducts and block your ports?' Again, the concept you have put forward about a more efficient global economy. This is where I have a problem with my economics education. Are we really pushing towards a more efficient economy? I have just read some posts about how houses have not changed since the 1940's, Boeing 747 first flew in 1969 and the Concorde has been stopped. I think there is a serious gap between accepted economic principles and the realities of life. In reality - big companies don't like free markets and most of all they don't like competition. They want to live in a protected market, where they can continue to sell their same product for more and more money. They will do everything to undermine all attempts to secure open and free markets. When I say this, consider Microsoft, GM, Walmart, the US sugar industy, the US lumber industry, etc, etc. The biggest factor to consider is that of the world's 100 biggest economic powerhouses, 49 are companies. So on the one hand, we find companies wanting open markets for cheaper labour and reduced costs, but on the other hand they want to ensure that competition will be restricted. Quite a problem? Ahhh the beauty of economics.... the trade-offs and assessing what is good for the country. Modern economics states that over time, countries will begin to focus on markets they are good at. I think that is the biggest load of bull. Countries and Companies will focus on what makes the most profit (why is South Korea good at making cell phones and not say Holland?) And countries/companies will pull stunts to seriously damage competing foreign industries. Once the damage is done, they can return to monopolistic practices - Microsoft.

Subject: Re: globalization From: RL To: Mik Date Posted: Fri, Jun 11, 2004 at 04:11:00 (EDT) Email Address: rafaelloring@yahoo.es Message: 'I have just read some posts about how houses have not changed since the 1940's, Boeing 747 first flew in 1969 and the Concorde has been stopped.' Just check the cost in real terms of building a house(not including the cost of the land) or building an airplaine and you will see how much cheaper has become since 1940 or 1969. In the case of houses due to the problem with land (fixed resource) we don't see that they got cheaper but look at airplane tickets (even in an oligopolistic market as it is) do you think many people could afford in America to fly to Europe in 1969? what about now?. (I see from your last paragraph that you haven't catch the idea of comparative advantage, bobby has explain it quite well. Holland is probably better at cell phones than south korea not taking into account wages, but is better for holland to import cell phones from south korea and dedicate resources to produce stuff that even with the difference in wages is cheaper because is much more efficient in them. That way global resources are allocated in a more efficient way.) I share your concerns with monopolistic industries. Yes, companies push for free markets when it pays in profits and at they don't when it doesn't (as it is the case with foreign competition in their own countries). What economist should do is to push always for free markets and with more enphasis when the poor benefit from it (as it is the case with foreign competition from developing countries) and also point to the fact that some people are loosing for the benefit of most when markets are freed and so they should be helped.

Subject: Re: globalization From: Pete Weis To: Mik Date Posted: Fri, Jun 11, 2004 at 00:03:58 (EDT) Email Address: Not Provided Message: Mik. Have to agree with your idea that politics and the influence of global corporations tend to inhibit the development of an 'efficient global economy'. Witness, along with your examples, the power of large oil corporations and OPEC to influence US and world energy policies. Ultimately, existing political, economic, military, and corporate powers are replaced by new ones. And they always act to protect their own interests and thwart the actuality fundamental economic theory. Still we need evolving economic theory to put things back together when they finally fall apart. When economic dislocations occur as they did in the 1930's, economists, good economists, become our most important assets. When boom times are in place, IMO, economists seem to be mostly without real direction. A few who are bold enough to stand apart from the crowd and have the talent to perceive good times don't go on forever are rare diamonds. If they have the courage to stand apart, inevitably they are subject to abuse. So I salute Krugman, Roach, Schiller and others who challenge the status quo.

Subject: Re: globalization From: Pete Weis To: Mik Date Posted: Tues, Jun 08, 2004 at 18:25:33 (EDT) Email Address: Not Provided Message: Well stated Mik. Today we have software developers, engineers and accountants in India who are as skilled as their counterparts in the West but receive a fraction of Western wages for equivalent work. In the past it's been a relatively slow erosion of factory jobs. It was slow because moving factories overseas was an expensive ordeal and for third world countries to develop their own manufacturing capabilities, there was a need to climb a steep learning curve as well as garner some help from more developed countries. This slower loss of manufacturing jobs gave the nations, like the US, atleast some time to adapt. Still, US workers in the steel and textile industries suffered. I believe the computer age has changed the process of labor migration dramatically. The barriers that slowed the pace of manufacturing jobs migrating to cheaper labor markets are simply not there for white collar jobs. This will be a much, much faster shift in jobs between labor markets - something the world has not seen in past history.

Subject: Re: globalization From: Bobby To: jack Date Posted: Mon, Jun 07, 2004 at 23:06:03 (EDT) Email Address: robert@pkarchive.org Message: Comparative advantage says only that when trade is opened up, those goods with higher relative prices under free trade than autarky will be exported and those with lower relative prices will be imported. Moreover, under the assumption of perfect competition and a convex production possibilities frontier (which is a good approximations for most goods and most countries), the economy as a whole of a country that lets down its trade barriers can consume more of both the goods that it exports and those that it imports. One can show that the country as a whole is better off and the gains to winners are bigger than the losses to the 'losers' of free trade. However, nothing has been said about distribution of those gains. As for the distribution of income, laborers and owners of other factors of production, that are 'stuck' in import-competing industries and can't easily move to other sectors will see their income decrease as the prices of the import-competing goods they produce decrease, while those 'stuck' in export industries see their income increase. Since all factors are more or less mobile to different industries in the long run, these 'industry specific factors' can eventually migrate to industries where they will get higher income. Therefore this is usually a problem for only a few years, and it is seen as less serious than what I will say next. If a factor of production, like low-skilled labor, is employed intensively in an import-competing industry, that is the ratio of that factor to other factors employed tends to be higher in import-competing industries than in export industries, then the decrease of the import good's relative price due to opening of trade will unambiguously decrease the real wage of that factor in all industries. On the other hand, if the factor, like high-skilled labor, is employed intensively, that is a high ratio of that factor to others, in export industries, opening of trade increases the raltive price of the good it produces and unambiguously increases their real wage of that factor in all sectors. The examples of unskilled labor being hurt and high-skilled labor being helped is likely the case for the U.S. This effect on income distribution is considered more serious since it effects the real price (or wage) of the factor in all sectors so long run factor mobility does not mitigate it. However, for the U.S., the general consensus of economists from empirical evidence is that these effects are rather small. The major culprit for the growing wage gap between skilled and unskilld labor is thought to be due to the nature of the changes of production technologies. Moreover, the wage gap between the top 1% and the rest of the population is also not thought to be from trade. As for factor price equalization, the answer is that wages of foreign and American workers may converge somewhat but not nearly alll the way. The reason why is that U.S. workers are more productive than foreign laborers, because of things like better education, better infrastructure in the U.S., better quality physical capital, etc. Therefore one hour of U.S. labor maybe makes the same amount of output as ten hours of Indonesian labor. You can alter the units by saying that one hour of U.S. labor is worth 10 hours of 'effective labor,' and the U.S. wage for an hour of effective labor is therefore one tenth of the U.S.'s hourly wage. Likewise one hour of Indonesian labor is worth 1 hour of effective labor and the effective labor wage is actual the Indonesian hourly wage. Due to trade, the effective labor wage in the U.S. and Indonesia will become about the same, but the hour wage in the U.S. will still be 10X more than in Indonesia because the U.S. worker is 10X as productive.

Subject: Re: globalization From: Pete Weis To: jack Date Posted: Mon, Jun 07, 2004 at 22:26:30 (EDT) Email Address: Not Provided Message: Perhaps others, here, would care to answer your question more specificly. However, for a fairly lengthy back and forth posting on this subject click on 'View All' above and scroll down to the post entitled 'Outsourced and out of work?' You will get differing views expressed, especially in regard to the severity of the consequences of the 'competition for labor' you speak of. Like most who post on this board, I'm not an economist but have an interest in the subject. I don't think it takes a PhD in economics to realize a global supply of cheap labor will put downward pressure on wages in nations that have the highest wages. The biggest problem with this, IMO, is the related downward pressure lower wages and slower job growth puts on consumption and inflated assets (such as housing) in a nation such as the US which suffers from high levels of personal and governmental debt.

Subject: Re: globalization From: Ivan Z. To: Pete Weis Date Posted: Tues, Jun 08, 2004 at 20:24:13 (EDT) Email Address: iz@iz.iz Message: I would answer you by noting that trade continues to increase but I don't think anyone would argue that average wages in this country are declining. Moreover, with the increase in trade in the late 90's, this country had a labor shortage. So your assertion doesn't quite work out. No one would argue that the expansion of the textile industry abroad didn't put downward pressure on textile workers in the US. So in a sense -- in the narrow market for labor in the tradeable good -- the assertion is true. Trade does suppress wages...but we are talking about wages in the traded good. But in an overall sense, the benefits to trade from the availability of less expensive goods will be greater than the loss in wages. There is no evidence that trade lowers wages and slows job growth and decreases consumption and causes housing bubbles. This error is the same one made by Bill Greider in his One World book. Yet another way to think of this situation is to realize that innovation has the same impact. If you invented a machine that you could stick $20 worth of lumber in and have it spit out $30 worth of clothing...you would be a hero of capitalism....but if people found out that your machine just secretly put the lumber on a boat that went to China and traded the lumber for clothing, you might be seen as a fiend. On the issue of convergence of wages, this is discussed I believe in Krugman's undergraduate trade textbook, you need two things. One, you need foreign workers to be just as productive as US workers. The other thing you need is that the good be freely traded. That is, you can imagine a barbershop in Vietnam able to do just as many haircuts in a day as a barbershop in New York.

Subject: Re: globalization From: Pete Weis To: Ivan Z. Date Posted: Wed, Jun 09, 2004 at 01:19:27 (EDT) Email Address: Not Provided Message: The 90's were certainly quite different from the past three years. We had exploding hightech expansion - North America and Europe had software development almost to themselves - many consumers were buying their very first computer (especially the early nineties) - the internet was going from near zero to hyperspace - new software and hardware companies were starting up at an incredible rate. There weren't enough qualified people to fill the labor demand. Silicon valley became world famous as the great mecca for high paid, high tech workers. Microsoft sprinkled thousands of millionares in the suburbs east of Seattle. The stock markets boomed. I don't think there has been another time in US history when so many people became wealthier because of increasing wages and soaring stock portfolios in such a short period (maybe you can think of one). Unfortunately, the good times didn't last. The last three years have seen an overall loss in jobs. The Silicon Valley-San Jose-San Francisco is now becoming well known for the loss of several hundred thousand of jobs in a very short time. I would argue that, recently, wage increases are not keeping up with inflation. But I would also argue that the more important measure when it comes to wages is not average wages but total wages since total wages effect total consumption. There is also another very important factor - the considerable fall in the dollar which has occurred over the last 2 to 3 years. Because of the declining dollar, the wage increase numbers quoted by the government are largely an illusion. OPEC has publicly stated that part of the reason for their price hikes has been the fall in the dollar. Buffet has stated, for the first time in his investing life, he is betting against the dollar. When you say 'I don't think anyone would argue that average wages in this country are declining', IMO you are not looking at the whole picture (declining dollar, total number of jobs, etc). I'm sure there are plenty of people smarter than myself who would say real wages are declining presently. I also don't agree with the idea that less expensive goods (due to competing trade) will be greater than the eventual loss in wages. A lot of economic theory seems to fall apart when it buts heads with the real world. Look at what is actually going on. Sure we are paying less for clothing, computer equipment and electronic products, but we are paying much more for the necessities in life - food, insurance, energy, shelter, etc. Down the road, most of us will need to be more selective about what we spend our wages on - guess what gets illiminated from our monthly budgets. Perhaps there is just alot more to this economic model than cheaper products offsetting lower wages. Maybe the economic model which accurately describes what is happening now has not yet been formulated. Finally, I would just like to say that the 90's are now a distant memory and this offshoring problem is really just getting underway.

Subject: Re: globalization From: Mik To: Pete Weis Date Posted: Wed, Jun 09, 2004 at 17:01:20 (EDT) Email Address: Not Provided Message: Pete, good response there. I was about to have a go at Ivan on the productivity issue but see you responded well. I particularly like your response on speed in relation to the moving factories vs the moving of white collar jobs. I just want to add a little clarity to the issue of productivity. Some time back I watched a press release about how the US has the highest 'productivity' in the world. The evaluation was based purely on the amount of hours worked. That does not show 'productivity' - all it showed was that Americans work longer hours than anyone else on earth. Now to give an example of a typical flaw in the measurement of productivity: In South Africa, an African bricklayer lays on average 800 bricks per day while his European counter part pays 1,200 bricks per day. That's a full 50% more and adds fuel to this argument. However, the African earns $4 per hour where the European earns $12 per hour. Now who is more productive? So if you employ two Africans at $8, they will lay 1600 bricks a day - far cheaper and far more output which allows South Africa to build some really mega projects even though they have a relatively small economy. BMW and Mercedes Benz have caught onto this and manufactor full cars in South Africa.

Subject: Re: globalization From: El Gringo To: Mik Date Posted: Wed, Jun 09, 2004 at 20:48:17 (EDT) Email Address: nma@hotmail.com Message: ...'The technological story of the productivity slowdowns holds that this vital engine of growth ran out of steam, not because there was anything wrong with the basic structure of our economy, but simply the technologies were the basis of the postwar boom had pretty much reached their limits....The point is that by the late 1960s these technologies had, in many cases, started to approach their limits.Indeed, to a considerable extent things that we still think of as 'modern' were introduced more than twenty years ago.It is somewhat startling, for example, to realize that the Boeing 747, 'still' the flagship of airlines, was introduced in 1969; today's version are improved, but not radically different.Bill McKibben, who subjected himself to a massive dose of television reruns for his book 'The age of Missing Information (Akerlof or Stiglitz...)', has pointed out a revealing fact;the houses shown in situation comedies from the early 1960's do not look particularly old-fashioned.Russell Baker has made the point even more strongly:'Why does 1940 still seem like yesterday, when back in 1940, 1890 seemed like the Dark Ages?'

Subject: Re: globalization From: Pete Weis To: El Gringo Date Posted: Wed, Jun 09, 2004 at 22:49:24 (EDT) Email Address: Not Provided Message: 'Why does 1940 still seem like yesterday, when back in 1940, 1890 seem like the Dark Ages?' El Gringo. This question which is really an observation and your point about 'productivity slowdowns' is central to a major economic theory which took hold in the 1930's. It was a Yale economist who first developed it. Unfortunately, I don't remember his name. His ideas and those who espoused them fell out of favor when money supply economic theory began its ascendancy in the 60's. His basic theory goes like this: Productivity gains happen in sudden spurts with lengthy plateau periods of little relative gain. These great spurts in productivity are born out of great technological advancements. The sudden gains in productivity have two major effects - (1) increased profits (lower cost per unit production) and (2) greater quantities produced do meet the greater demand (lower price per unit production). A great economic boom ensues. But inevitably, human competitive behavior (some would call it greed) increasingly takes hold. Those who control the profits and the means of production find it difficult to share much of the new wealth being created. At first there is a shortage of labor, so, initially, wages rise sharply but quickly wages begin to level off. This creates real problems since it is the wage earners who make up the bulk of the consumers. Without increasing wages consumption begins to slow. Politicians and central bankers who are in charge of fiscal and monetary policies are prodded by those with wealth (and the power which comes with it) to reduce lending rates and loosen lending requirements to consumers. Borrowing takes off and the boom continues..... for awhile. Corporations continue to borrow heavily as they expand to meet demand. Stock markets boom - nearly everyone starts to believe they will become wealthier than they had ever dreamed before the boom. But inevitably the debt reaches a critical level and becomes difficult to service. Aggregate wealth becomes highly concentrated in the hands of a relative few, who can not possibly consume as much as the masses who now have accumulated a ton of debt. Those who are the captains of the corporations see the end coming and jump ship before the passengers. Years of economic hardship follow. This is a cycle that repeats itself but is not generally recognized by the bulk of economists, politicians and general public as it is happening. However, Milton Friedman says 'hogwash' to this idea. He says the Great Depression of the 1930's need not have happen if only the government had taken the right steps. He says it's mostly about controlling the money supply. A fiat money system with the right hand on the faucet will cure our economic problems. Ben Bernanke, a Milton Friedman admirer and follower, told us not to worry - 'we have this printing press....'. Well, the time is nigh. Which economic theories stand and which ones fall. I think we find out in the coming months and years.

Subject: Re: globalization From: Mik To: Pete Weis Date Posted: Thurs, Jun 10, 2004 at 13:26:45 (EDT) Email Address: Not Provided Message: Pete, What was Paul Krugman's take on this topic you have raised? I remember Paul speaking about the idea of simply printing more money as a solution to Japan's economic woes. It kind of falls into the same category of what you are discussing. But I still don't see how it solves the productivity issue. Keynes lived through a a period of hyper inflation and as such would tend to stay away from using the printing press as a solution, but rather look at government fiscal intervention as a steering mechanism. However, I have often wondered about how the government's steering mechanism could modernise the average home and bring it out of the 1940's. Paul Krugman made a good point in his one book (the accidental theorist) where he took a good long look at his own kitchen and came to the conclusion that besides the microwave oven, there was nothing new in his kitchen (even a lot of the groceries were out dated).

Subject: Re: globalization From: Pete Weis To: Mik Date Posted: Thurs, Jun 10, 2004 at 22:59:52 (EDT) Email Address: Not Provided Message: Mik. I think when Paul Krugman was surveying his kitchen to find new technology, he was in the wrong room - what do you think? If he had left the kitchen for his home office he would have seen total change. Someone sitting in his/her home office in 1940 would see a Remmington typewriter, some wooden file cabinets and possibly a primitive, manual adding machine. Paul Krugman would likely be looking at a desktop computer, printer which also does photo's, digital camera, digital scanner, fax machine, a portable laptop, shredder, digital answering machine, and a small rack of laser disks to replace the file cabinets - and that's my small study. If someone from 1940 were to wander into such a room and log onto the internet, they would soon discover they had something akin to the Library of Congress packed into this study. The amazing realization is that all these marvelous technological wonders have only become reality in approximately the last 20 years. Nearly all the kitchen marvels of 1940 were developed in the first 20 to 30 years of the 20th century. It's interesting to note that each of these two great technological booms effected only one small area of a typical home. If you compared a home of 1940 with that of one in 1840, other than the style of furniture, only the kitchen would be obviously different. Oh..., there is one more very, very important difference - if Paul Krugman left his wallet laying around in his home office and someone from 1940 found it and started rummaging through it, they might come across these strange looking plastic cards that had bank names and funny names like VISA and American Express on them. Little would he know how these little items had changed the world and the nature of accumulating debt. As far as Paul Krugman's view on monetary policy vs government fiscal policy to thwart shifting of wealth during these technological booms to productivity booms to debt booms to bust - I'd like to hear more of what he thinks about this lately. In a Dec. 1999 paper entitled 'Thinking About The Liquidity Trap' he wrote the following paragraph: 'It is therefore ironic as well as unnerving that precisely at this moment, when we have all become sort-of monetarists, the long-scorned Keynesian challenge to monetary policy - the claim that it is ineffective at recession-fighting, because you can't push on a string - has reemerged as a real issue. So far only Japan has actually found itself in liquidity-trap conditions, but if it has happened once it can happen again, and if it can happen here it presumably can happen elsewhere. So if even Japan does eventually emerge from its slump, the question of how it became trapped and what to do about it remains a pressing one.' Now, Japan has emerged somewhat from its economic difficulties. But you have to wonder if it's not because of policies by Japan but rather policies by the US to prop up Japan's most important costomer, the American consumer. In fact, just as Japan was having its greatest difficulties in the 90's, the US economy was still booming and the American consumer was in fine form buying up Japanese products left and right. What would have happened if both the Japanese and US economies were tanking simultaneously. What would happen now if rising interest rates, higher energy costs and record debt finally begin to slow down the US consumer, who represents over 30% of the world's consumption? Wonder what this would do to the Japanese and Chinese economies and their ability to purchase US treasuries with their surplus trade dollars? How would the the US fund its huge budget deficit? Paul Krugman finished his paper with - 'We'll just have to wait and see.'

Subject: Good Piece on Greenspan by Krugman From: Pete Weis To: All Date Posted: Mon, Jun 07, 2004 at 15:56:18 (EDT) Email Address: Not Provided Message: Much of what Paul Krugman writes about (in his most recent editorial) with regard to Greenspan has been mentioned by others. However, few write with as much authority as Paul Krugman. I see his editorials often linked on economic and investment sites with conservative, moderate and liberal leanings. His editorial centers on the moral issues of promoting fiscal policies which favor the wealthiest and the hypocracy of standing by those policies (to 'save face') despite evidence they where based on major miscalculations. He touches on the failure to take away 'the punch bowl' and the development of 'asset' bubbles. Few if any of the 'elite' academic economists deal much with the dangers of asset inflation (stock markets, housing) - if they do at all, it's generally not a central issue for them. Keynesians and especially Monetarists seem to avoid the issue. It's the most conservative, neoclassical economists, represented by the Austrian school, which seem to fret the most about the dangers of asset bubbles. IMO, the neoclassicals make a good argument. Due to an unprecedented series of rate drops, refinancing and mortgages have become an abnormally large part of a number of economies, chief among them - the US economy. Western financial institutions are strung out on trillions in housing mortgages. Even at presently very high valuations, there is record low equity in US housing. Since interest rates have bottomed, a large percentage of refinancings and mortgages, in general, are ARM's (something Greenspan has urged homeowners to 'take advantage of'). Yet, nearly everyone agrees interest rates are headed higher. Furthermore, the first wave of baby boomers are getting ready to retire in the coming five years. Many of these retirees have refinanced their mortgages or have moved up to more expensive homes. They'll need to sell since they won't be able to afford the debt - in fact, they need to move away (to a greater extent than ever) to places where the housing is cheaper. Neoclassicals also point to the still overvalued stock markets (as does Buffet) and the unregulated, massive growth of derivatives (mostly made up of interest rate swaps). With rising interest rates, neoclassicals claim there will be a massive move to shed debt by selling assets as well as bankruptcies. With rising energy costs and rising interest rates a consumer dependent economy will inevitably see a sharp drop in consumption. Neoclassicals believe that government intervention, in the form of pumping the money supply, only delays the inevitable. In fact, they say that pumping the money supply creates asset bubbles which makes matters worse - we will end up with a bigger, steeper economic plunge. They certainly have the most dire outlook, but, IMO, they present a very powerful argument. However, Neoclassicals, neglect an important issue which Keynesians promote. This is the massive shift in the concentration of wealth to the very top, tiny percentage of the population. It is obvious, with the huge upward shift of top executive salaries and generous stock options over the last 20 years, where much of the loss of money in the stock markets since 2000 has gone. The vast majority of the consumer class has not enjoyed the increased profits of the computer age and has taken on a lot of debt to keep his/her head above water. In fact he/she has been encouraged (and continues to be encouraged) to take on evermore debt by the likes of Greenspan to keep this wealth transference going to the very last mortgage application. I suppose Paul Krugman is closer to being Keynesian than the other two schools. But I don't think he fits neatly into the Keynesian mold - perhaps I'm wrong. I'd like to see him express more with regard to asset bubbles - are they a serious problem or not? Is this money pumping experiment really working?

Subject: Billmon's Whiskey Bar From: David E... To: Pete Weis Date Posted: Mon, Jun 07, 2004 at 17:48:05 (EDT) Email Address: Not Provided Message: Billmon's Whiskey Bar has an article tying together the bubble and the trade balance. Billmon predicts resolution will move first thru inflation, followed by deflation. He ended his comments though with a sanguine assessment. 'Redressing this imbalance need not be catastrophic – the U.S. economy has already shown an impressive ability to roll with the punches, and has absorbed the shocks of the past three years far more quickly than I would have expected. Meanwhile, Asian integration is gradually making the region less export dependent, and will eventually turn it into the main locomotive of the global economy. In other words, the structural adjustments needed – less domestic consumption, more exports at home; more consumption, less exports abroad – will be painful (particularly without better international macroeconomic coordination) but they are, I think, doable.' So we are on a tightrope,if we have competent leaders with a good plan, and luck is ours, we will get to the other side of the chasm and resolve our trade imbalances. It is possible that it will be less painful than the Great Depression, but for sure it will be more difficult than any economic shift in the last 70 years. Here is a link to the Whiskey Bar- http://billmon.org/archives/001510.html#more

Subject: Re: Billmon's Whiskey Bar From: Pete Weis To: David E... Date Posted: Mon, Jun 07, 2004 at 19:19:24 (EDT) Email Address: Not Provided Message: 'It is possible that it will be less painful than the Great Depression, but for sure it will be more difficult than any economic shift in the last 70 years.' I don't think Americans, or for that matter the rest of the world is ready for for the actuality of this 'sanguine assessment', David E. But, for the relatively few who are very concerned about the 'structural' problems with the US economy and the perilous state of the US consumer, this probably is somewhat sanguine. An interesting blog site. Thanks for the link!

Subject: Krugman for President From: franky To: All Date Posted: Sun, Jun 06, 2004 at 20:42:38 (EDT) Email Address: FPalomino619@msn.com Message: Hey, I had never heard of Paul Krugman until this past Friday. Sorry. I haven't read the paper since Bush and his brother stole the 2000 election and it seemed that none of the so called liberal media was outraged. Well, anyway, I will start reading him from now on--even if it is in the New York Times. We need this guy to run for president. Someone convince him, please.

Subject: Krugman interview on BBC From: DKH To: All Date Posted: Sat, Jun 05, 2004 at 07:16:37 (EDT) Email Address: idea_refer@yahoo.com Message: Paul Krugman was recently interviewed on the BBC World Service. I heard the interview broadcast on June 5th. This interview will be available on the BBC website after being updated for June 5th program. BBC World Service www.bbc.co.uk/worldservice/programmes/the_interview.shtml

Subject: Re: Krugman interview on BBC From: Bobby To: DKH Date Posted: Sat, Jun 05, 2004 at 10:23:42 (EDT) Email Address: robert@pkarchive.org Message: I can't find it. Where's it stored? :(

Subject: Re: Krugman interview on BBC From: El Dude To: Bobby Date Posted: Thurs, Jun 10, 2004 at 19:08:20 (EDT) Email Address: nma@hotmail.com Message: Bobby:http://www.bbc.co.uk/worldservice/programmes/the_interview.shtml?focuswin

Subject: Luskin: Bush re-election correlates to S&P500 From: Kosh To: All Date Posted: Thurs, Jun 03, 2004 at 15:51:23 (EDT) Email Address: jrgallag@earthlink.net Message: It's no coincidence that last Tuesday's big rally happened the day after Bush's major speech on Iraq at the U.S. Army War College. With the nation pre-occupied by painful soul-searching about the war, a major address by the president was necessary to restore confidence that America is in control of a situation that has seemed recently to be almost out of control. In fact, it may be no coincidence that the market hit bottom and strongly reversed to the upside on March 12, following Bush's statement deploring the beheading of Nicholas Berg by Iraqi terrorists. Forgive me if it seems heartless to relate a tragic even like that to the stock market. But I can't fail to note that Berg's death may have marked the low point in America's perception of its efforts in Iraq -- and the point where American resolve began to stiffen. I know -- at this point you're asking what any of this has to do with the stock market. Bear with me! Economic growth is made possible only when people are willing to take risks -- to make bets on the future. To do that, people have to believe that the world they live in is a reasonably stable place, and they must have an inner sense of self-confidence and pride. Those necessary psychological preconditions of growth are thwarted when a nation is absorbed in divisive political strife, and beset by a pervading sense of confusion and guilt about the nation's fundamental direction and purpose. This election year is shaping up to be the bitterest and most divisive ever. What the candidates themselves are saying is bad enough, but the general public discourse on politics is even worse. It's filled with hate -- there's no other word for it. And it's coming at a time when -- still in the shadow of September 11, 2001 -- America is taking on some dangerous and difficult challenges with very uncertain payoffs. Whatever your personal preferences on all the issues in play right now, it's a fact that we feel better as a nation when our president acts like a leader. Then, though you may bitterly disagree with him, at least you know what he's thinking. With so much controversy about Iraq, Bush had been nearly absent from the public scene -- until that speech the night before the big stock market rally. Clearly America felt better the next day. There's another element, too. I've said here in my journals from the very beginning that I believe the economy (and, therefore, the stock market) would be better off if Bush were re-elected. Love him or hate him, the cold fact is that his economic policies are more pro-growth (or at least less anti-growth) than those Kerry is likely to come up with. And with things so uncertain in the world, there may even be some benefit to political continuity for its own sake. This belief continues to be born out by the way the market reacts to estimates of Bush's re-election probabilities. The chart below shows the S&P 500 ($INX) superimposed on the prices of futures contracts traded on Bush's re-election, traded on-line at Tradesports.com. The price of the Bush contracts represents the market's estimate of the probability of his re-election. When that probability goes up, so does the market. When that probability falls, the market falls too. Note that the Bush contract took a big turn for the better last Tuesday! http://moneycentral.msn.com/content/StratLabs/Round10/P85489.asp

Subject: Re: Luskin: Bush re-election correlates to S&P500 From: Ivan Z. To: Kosh Date Posted: Tues, Jun 08, 2004 at 20:42:40 (EDT) Email Address: iz@iz.com Message: I think anyone familiar with the body of work done on the relationship between the debt and the drag in growth in the 80's - and the reverse where the 90's saw the debt being addressed and the economy take off - would know that this is a lot of nonsense. Investors may like Bush...they may hate changes in administration...but I don't think any reasonable individual believes the fiscal policies of the Bush Administration are going to lead to more longrun growth than would the fiscal policies of a moderate Democrat. Equity markets may prefer Bush because his policies to lead greater disparities in income where the rich get richer...and the rich are more likely to invest their money in equities.

Subject: Re: Luskin: Bush re-election correlates to S&P500 From: Ivan Z. To: Kosh Date Posted: Tues, Jun 08, 2004 at 20:42:18 (EDT) Email Address: iz@iz.com Message: I think anyone familiar with the body of work done on the relationship between the debt and the drag in growth in the 80's - and the reverse where the 90's saw the debt being addressed and the economy take off - would know that this is a lot of nonsense. Investors may like Bush...they may hate changes in administration...but I don't think any reasonable individual believes the fiscal policies of the Bush Administration are going to lead to more longrun growth than would the fiscal policies of a moderate Democrat. Equity markets may prefer Bush because his policies to lead greater disparities in income where the rich get richer...and the rich are more likely to invest their money in equities.

Subject: Re: Luskin: Bush re-election correlates to S&P500 From: Pete Weis To: Kosh Date Posted: Thurs, Jun 03, 2004 at 23:21:41 (EDT) Email Address: Not Provided Message: You may be right with regard to some correlation in the waxing and waning of confidence in Bush with some recent small, short upturns and downturns in the markets. But it's much more likely the bigger picture of consumer debt, higher energy costs, rising interest rates, and general market overvaluation (if you believe Buffet) will have a much greater effect on the markets going forward than will the image of Bush as a 'strong leader'. In fact, IMO, the future course of the markets will have a much greater effect on the prospects of Bush W than the reverse.

Subject: Re: Luskin: Bush re-election correlates to S&P500 From: Nat To: Pete Weis Date Posted: Fri, Jun 04, 2004 at 00:56:41 (EDT) Email Address: Not Provided Message: I find it ironic that a modest upturn in jobs will probably lead to an interest rate hike that will in turn lead to a down turn in the stock market. Odd, but what is good for the US worker seems to be bad for business. And heaven forbid that real wages should increase! Inflationary! I bet that 5 more week's worth of 'stay the course' gibberish will be trumped by a two basis point increase...

Subject: Re: Luskin: Bush re-election correlates to S&P500 From: Pete Weis To: Nat Date Posted: Fri, Jun 04, 2004 at 11:55:25 (EDT) Email Address: Not Provided Message: It will be interesting to see if the Fed really believes we are in a sustainable recovery. If they really believe the jobs numbers and and the economy is actually picking up, they probably will hike rates. However, so far, they have been reluctant to raise rates and have been, recently, feverishly pumping the money supply - M3 has increased by over 150 billion the last 4 weeks (an annualized rate of over 20%). I'm not saying they won't raise rates, but if they don't, what would that say about Greenspan's actual faith in the economy? There is always a lot of spin out there with regard to the markets and the economy - each spin meister has his or her own agenda. It's doubley true in an election year. There is a lot of talk about decoding what Greenspan says and reading between the lines. I think it's better to pay little attention to what he says and focus on actions taken by the Fed - it's much more revealing.

Subject: Energy Crisis From: Watts To: All Date Posted: Thurs, Jun 03, 2004 at 09:21:32 (EDT) Email Address: Not Provided Message: Not that we don't already know Krugman was right on the energy crisis in California, here is an article from some former enron traders bragging about manipulating the markets. http://money.cnn.com/2004/06/03/news/midcaps/enron.reut/index.htm?cnn=yes

Subject: Socialist From: Doug Schmitt To: All Date Posted: Wed, Jun 02, 2004 at 15:45:48 (EDT) Email Address: schmdoug@yahoo.com Message: Thanks for posting this video of Krugman vs Barro. Krugman's beady little eyes help illuminate what a weasel he is.

Subject: Krugman at the LSE From: Chris To: All Date Posted: Tues, Jun 01, 2004 at 10:53:35 (EDT) Email Address: cwright75@hotmail.com Message: A transcript of Paul Krugman's talk at the LSE on the American Economy. LSE Events Transcripts www.lse.ac.uk/collections/LSEPublicLecturesAndEvents/events/2004/20040527t1238z001.htm

Subject: Krugman swings with a big bat! From: David E... To: Chris Date Posted: Tues, Jun 01, 2004 at 14:08:15 (EDT) Email Address: Not Provided Message: Thanks Chris for the link. Here is one of the many good parts in the transcript - 'You do wonder why it has been so easy for one side to wrap itself in the flag, and also wrap itself in family values and the other is so ineffectual. It is a source of puzzlement. The question I guess is, does this mean that this is wrong, that the public really understands that these policies are helping them. And the answer is that I don’t think that’s true. I think you can be reasonably clear on the actual math that the public is by and large voting for policies that are against its interests.' Prefacing this was a discussion about NPR not being a liberal anymore. A study was done of NPR's sources and 4-1 the sources were conservative think tanks. Conservative think tanks, though numerous, boil down to funding from 8 families.

Subject: Latinoamérica y la UE piden... From: El Gringo To: All Date Posted: Sat, May 29, 2004 at 20:13:19 (EDT) Email Address: nma@hotmail.com Message: Latinoamérica y la UE piden renforzar el papel de la ONU Zapatero se muestra dispuesto a enviar un contingente espanol a Haiti La III Cumbre América Latina-EU apostó ayer por el reforziamento de la ONU y del multilateralismo como mejor fórmula para resolver los conflictos internationales.La reunión, celebrada en Guadalajara (México), consolidó el diàlogo politico iniciado hace dos anos en Madrid entre dos zonas del mundo que agrupan a 58 países y cerca de mil miliones de personas.El Presidente del Gobierno, José Luis Zapatero, mostró su dispositión a enviar un contingente de tropas espanolas a Haiti junto a tropas latinoamericanas. 'Reconocemos la necesidad de hacer que el sistema multilateral sea más ágil y efectivo para enfrentar las amenazas y desafios globales', afirma la declaración final de la cumbre.'A este respecto, estamos comprometidos con la reforma y revitalizacíon de las Naciones Unidas'.La declaración tanbién condena las torturas aplicadas por soldatos estadounidenses a presos iraquíes en la càrcel de Abu Ghraib y se solidariza con las víctimas de los atentados del 11 marzo en Madrid.José Luis Rodríguez Zapatero indicó en su intervención que la UE y América Latina pueden abordar conjuntamente un amplio abanico de suntos, 'desde la reforma de las Naciones Unidas al respeto universal de los derechos humanos, el desarollo sostenibile, la eliminación de la 'corrupción' o el narcotràfico y la criminalidad organizada la erradicación de la pobreza o la lucha contro el terrorismo'.A petición del presidente brasileno, Luis Inàcio Lula da Silva , Zapatero se mostró dispuesto a enviar soldados espanoles a Haiti, aunque precisó que aún no ha tomado una decisión definitiva.Las ausencias màs significativas de la reunión fueron las del britànico Tony Blair, el italiano Silvio Berlusconi - aliados de EE UU en Irak - y el presidente cubano Fidel Castro, que dejó claro desde la Habana que las relaciones entre Cuba y Bruselas atrviesan el peor momento de su historia. (El Pais, Sàbado 29 de mayo de 2004)

Subject: New York Times Apologizes From: Pete Weis To: All Date Posted: Wed, May 26, 2004 at 23:32:23 (EDT) Email Address: Not Provided Message: To this day many Americans still think the Iraqis had something to do with 9/11. The Bush administration did much to try and cultivate this belief among US citizens even though no Iraqi participated in carrying out, planning, or financing the 9/11 tragedy. No evidence has yet been unearthed to make the connection. There is plenty of detailed evidence to show others participated. The New York Times should apologize - many other US news organizations need to offer up apologies. In a democracy a free press is its conscience, however imperfect. True, many of us have set our heads deep in concrete, refusing to listen to any news media which doesn't mold it's news to fit what we want to believe. Afterall, providing news information is a business and the customer's needs need to be met or the business suffers. But somewhere in the past, there seemed to be a belief that our news organizations were somehow above and independent (atleast to some extent) of simply being enslaved to the bottom line. Was this all a fantasy? Perhaps today when news media must compete with 'reality TV' the pressures are just to great. Or is this the way it has always been? Has Rupert Murdoch found the magic formula - define your audience and give them what they want - American marketing crafted by an Australian to perfection?

Subject: Re: New York Times Apologizes From: Kosh To: Pete Weis Date Posted: Wed, Jun 02, 2004 at 12:16:55 (EDT) Email Address: jrgallag@earthlink.net Message:

Subject: Re: New York Times Apologizes From: Kosh To: Kosh Date Posted: Wed, Jun 02, 2004 at 12:19:45 (EDT) Email Address: Not Provided Message: Ex-Congressman Sam Coppersmith notes 'You Don't Work the Ref When a Bad Call Goes Your Way' '...conservatives have had it in for The Times for years. But when the newspaper gets Iraqi WMD wrong, and admits that its reporters and editors let its readers down, people who have built entire careers screaming about bias and error have absolutely nothing to say. To these critics, any mistakes The Times made in running dozen of stories helpful to the Bush administration’s desire to topple Saddam Hussein weren’t evidence of bias or institutional error. Conservatives can easily forgive mistakes -- when they’re useful mistakes.'

Subject: Re: New York Times Apologizes From: WRS To: Pete Weis Date Posted: Fri, May 28, 2004 at 12:17:57 (EDT) Email Address: Not Provided Message: is a highly credentialed economist, but is no more qualified than any one else to be a media critic. He stumbles when he steps onto the slippery soap box of journalism ethics judge. Friday's column about the NY Times is awkward on many levels. I'm not sure what to make of the original correction in the NY Times given the snake pit climate in that organization and the hostile political climate. By entering this fray, PK only serves to make a murky situation even more confusing. I am not clear why PK feels qualified to singlehandedly decree ground rules for ethical behavior by the media. The media is basically a free-for-all business driven by ratings and advertising dollars. I can say from experience that journalistic rules about objectivity are ungrounded and often go unenforced and unheeded in the quest for audience. PK is entitled to cast laurels on reporters who slam Bush, but it looks to me like he is making up the rules of media engagement as he goes along. The guiding force seems to be the 'greater good' of making the White House look bad. Also bothersome is the patronizing undercurrent of PK's message. Consumers of the media are perceived as red state bumpkins who cannot understand events without the aid of pundits and are powerless to chose from myriad information sources. Were it not for White House efforts to bludgeon the spineless media, PK suggests, surely Bush's approval rating would be zero. The implication is that the presidential race remains competitive only because evil Fox News has brainwashed the most gullible segments of society into supporting the president. I would submit that there are reasonable people who support and oppose the president. But in PK's world, only one view is acceptable, and those who disagree must be either stupid or misinformed. In my humble opinion, his media watch columns are extremely naive and increasingly tedious.

Subject: Oh, come on WRS . . . From: Paul G. Brown To: WRS Date Posted: Fri, May 28, 2004 at 16:32:36 (EDT) Email Address: Not Provided Message: First, the column is about journalistic competence, not ethics. There is no accusation of corruption, nor of deliberate falsehood, in the PK column. What you ought to make of the NYT revisitation of its coverage is no different when the subject is WMDs than it was when the problem was Wen Ho Lee (remember him?). If you read the NYT mea cupla, what was most striking about it was the way the editors dissected the journalistic methodology that gave rise to the bogus facts in their coverage. I think they excused themselves too readily; the whole Chalabi-to-Cheney-to-Miller-to-Chalabi thing sounds to me more like a messed up triple-play. But according to Krugman, the root problem was 'competence', with the fetishization of objectivity (taken to mean partisan even-handedness or some kind of 'balance') contributing to the problem. Miller (and the NYT) simply ignored technical evidence (coming from credible experts in real-time) that, for example, aluminium hadn't been used in uranium centrifuges since the 1950s. There is even an absence of any evidence that anyone from the NYT ever spoke to these people. The incomparable Dailly Howler had its entire staff all over this one in real time. Why didn't Miller give more weight to these other experts? PK claims that it was because she, and the SCLM (So Called Liberal Media) were lulled by their patriotic feelings, their trust in the integrity of the White House, by the cloak of competence cast over the Bush cabinet, and by their own career aspirations. Got a specific problem with any of this? Miller et al. are reasonable human beings, trying their best, and messing it up. But contrast the NYT coverage with USA Today. Skeptical, and in hindsight, much closer to the truth than the SCLM (So-Called Liberal Media), never mind FOX. Third, when the situation is as bad as the situation is currently, how can you report on it objectively without making the White House look bad? I mean, things have rarely been worse! We are building a massive debt, losing war on terror, pissing off our trade partners and allies, economic growth sucks, we are way behind the curve, jobs wise, increasing poverty, increasing infant and maternal mortality, criminal investigations in high places (who leaked Palme, that little mis-appropriation of $700 Million, who gave Chalabi the classified details he passed onto the Iranians) and corruption (Perle, Halliburton, Kenny-Boy Lay still to see the inside of a cell). You have to reach a *long* way down the list of measures of national well-being to find any up-tick. It's dismal failure as far as the eye can see. Who has the responsibility? Who issued the orders? Objectivity is not a partisan formulation. It's about journalism as the first draft of history, and how close the first draft is to the final. By this measure the NYT in particular--and the media in general--have been terrible. And a final point regarding the patronization of rubes. I swallowed the NYT line, and I am no rube (though I do like beer and baseball). Neither is Kenneth Pollack, or Fareed Zakaria. But fool me once, shame on you. Fool me twice, and now I'm left owning a bridge somewhere, in a hot, dry country, were there are a lot of other claimants, and they have lots of guns. I won't belabor the argument, except to point out that, among the NYT's pundits, PK is solely qualified to write this kind of column. He was the first (and for a time, the only) major voice saying the kinds of things about Bush 43 that the rest of the flock have now come around to saying (dishonest, ideological, incapable of learning from their mistakes). And he endured tremendous amounts of abuse for doing so. PK is a public pundit. He tries to boil a complex opinion down into 750 words. Sometimes, he fails at it. But I often feel stupid and misinformed after reading a Krugman column. Which is precisely why I read him and admire his work.

Subject: Re: Oh, come on WRS . . . From: WRS To: Paul G. Brown Date Posted: Tues, Jun 01, 2004 at 14:19:27 (EDT) Email Address: Not Provided Message: Paul, I have to question your point that “things have rarely been worse.” If I didn’t know better, I’d say you are as naïve as PK. Do you really think we’re worse off now than in 1933, 1943, 1979, or 1917 or 1907? Try to get past your distaste for GW 43 and look at today’s indicators: 4-5 percent GDP, 2 percent inflation, 800,000 jobs in the past few months. You and PK may insist our way of life is unraveling, but I’m not buying the sky is falling snake oil. Yes, GW has cut corners, and we are paying a terrible price in Iraq in terms of blood and treasure. But I think many Americans are willing to pay more and concur that we are on the right side of history against Islamic fundamentalists. It is way too early to call our wars in the Middle East a failure. Sooner or later Saddam had to go, and Bush chose the sooner option, for better or worse. Do you disagree with the policy of removing the Taliban? Voters, not terrorists, will render a verdict on these questions in November, and Americans will pull together to support whoever wins. I also stand by my essential point that everyone is a media critic and that PK is not a particularly effective one.

Subject: Re: Oh, come on WRS . . . From: Paul G. Brown To: WRS Date Posted: Thurs, Jun 03, 2004 at 14:35:54 (EDT) Email Address: Not Provided Message: Whew. Busy. Hard to keep up. First, I should have been more precise in my language. In absolute terms, as measured by the various metrics of social good I cited, things have indeed, rarely been better than they are today, at least for citizens of the first world. More of us have achieved a comfortable degree of affluence (fewer are in poverty). We live longer, and suffer less. You make a good point. Optimism is rational. But on this forum we are talking, generally, about the effect of current policies. Are you really claiming that the improvement you're pointing to are the consequence of the Bush 43 economic and foreign policy regimes? Historically, all of the trend lines on these metrics have been positive. Each year we have lived longer, grown richer, and so on. So when you encounter a period of history when these trend lines have not only flattened but are beginning to trend in the opposite direction it's reasonable to say that 'things are getting worse'. And when, as now, some of those trend lines are the longest positive trend lines we have (infant mortality, poverty), and particularly when the policies imply truly dire consequences (we aren't going to grow out of this debt: big fiscal changes must be made) you can surely say 'things have rarely been worse' because our prospects for improvement in the future have rarely been dimmer. Now: you want to quibble over time periods. GDP growth is currently 4.4%. But that figure is a marginal rate of change. A glance at data for the overall timeseries reveals that growth since 2000 has been generally poor, with an uptick this election year (at the same time that the so-called conservative congress has flung aside its figleaf of fiscal probity and is now dancing, drunk and naked, around a Keynesian bonfire). This anemic growth is all the more troubling when it co-incides with a ballooning trade deficit, incredibly low interest rates for a very long period of time, and booming labor productivity. Put it this way, the gas tank's full, the pedal's to the metal, and the road is flat, straight and true. But we're doin' 35MPH and gettin' about 5 miles per gallon! Seen in that light, 'things have rarely been worse'. As for 'sky is falling snake-oil'; I assume that you're a reasonable person. What evidence could anyone offer that would lead you to conclude that Bush 43 has been characterized by the worst economic and social policy outcomes since Hoover and Coolidge? If we had been adding (compare with the 1990's) 250K jobs per quarter for just two years, while keeping inflation to 2% and not growing government debt (I won't even ask for a reduction) I would grade it a pass. On the Taliban - I was one of those pathetic hippies earnestly calling radio talk-back programs in 1992 worried about the rise of Islamic fundies in Afghanistan and Pakistan. I was one of those progressives who got into animated discussions with other progressives on the question of the legitimacy of military power. I wasn't totally convinced by the progressive-hawk argument until we got to contrast what happened in Kosovo (muscular, multi-lateral response through NATO) with central Africa (morally bankrupt non-response of the UN). The US is an emperial power. We might not like it, but that's the reality. And I want a competent emperor and competent consuls. Instead, we have Emperor Nero aided and abetted by Consul Varro. As for 'pull together to support whoever wins'; I see zip evidence that elements of the American conservative movement will *ever* accept the legitimacy of a Democratic leader. Al Gore stands up and says, in loud tones 'Someone ought to take responsibility for this fiasco', and the conservative pundit reaction is that he's insane (with the mumblers in the darker corners accusing him of treason).

Subject: Re: Oh, come on WRS . . . From: WRS To: Paul G. Brown Date Posted: Thurs, Jun 03, 2004 at 16:45:36 (EDT) Email Address: Not Provided Message: A few thoughts in reply: Your message omits the word 'recession,' which I think you'd agree was a major story for the US economy over the past three years. No reasonable person would blame Bush for a recession that began unfolding before his inauguration. Your expectation of a continuation of the 1990s bubble economy with 250,000 a month job gains is unrealistic, in my view. Granted, the economy has problems. But I'd take the past few years over 1977-1981 any day. Also, I'm not buying the Bush as Nero analogy, which I think trips up your thinking by allowing hatred to cloud your judgment. Democrats will not defeat Bush by defining him as a devil, because that view is not credible with the middleground electorate that decides the winner. Bush may very will defeat himself, however. In any event, it would be no contest if the Democrats were to nominate a stalwart pro-American candidate in the mold of Tony Blair who will is enlightened and will stick up for us in a world of great opportunity and danger. John Kerry is doing his best to appear to be that candidate, but I'm not sold. If he wins and as I expect reverts to form as a blame America first weasel, then, yes, conservatives will give him a very hard time, indeed.

Subject: Re: Oh, come on WRS . . . From: Paul G. Brown To: WRS Date Posted: Thurs, Jun 03, 2004 at 19:43:22 (EDT) Email Address: Not Provided Message: How far back do you have to reach for 'unfolding'? Economic cycles are part and parcel of life under capitalism. They're not a bad thing; they represent the occasional adjustment in the allocation of capital. But the Bush 43 recession--technically defined--ended in Q4 2001. Two and a half years later . . . Why is 250K jobs per month 'unrealistic'? We had eight years of 'unrealism'. Have a look at what the BLS says. Get a chart of the last 30 years of overall employment numbers. What makes this chart perilous is that you're looking at absolute numbers, but population growth also has a general linearity, so we're cool there. There was a big bump in 1999 (curiously: the same kind of pattern appears in the series in 1990, at the end of the last period of expansaion) but compare the 8 year trend 1992 - 2000 with the next four years 2000-2004. Then cast your eye back over the series and reflect that the last time we saw this kind of stagnant job growth was 1980-1983 (not 1977-1981). Bush as Nero? Have you read a biography of 'The GoldenOne'? In the popular mind Nero's an ogre, who persecuted Christians and fiddled while Rome burnt. Well, he wasn't, really. He was just kind of dumb, really ambitious, and way in the wrong place at the wrong time. I have nothing against Bush 43 at a personal level. He just seems to me like a lot of the over-promoted vice-presidents I've met. And your 'pro-American candidate like Blair' comment is very revealing. The Bush 43 administration might be seen, objectively, as anti-American. I guess they mean well but that's not a whole heck of a lot of comfort. Meanwhile those voices of caution (Snowcroft - remember him?) that a raft of folk dismissed by Coulter/Sullivan/O'Reilly as treacherous are being revealed as right (pro-american). I don't want a 'pro-American candidate like Blair'. Lord preserve us from such friends! Just give me character and competence! Your 'blame America first' comment is also revealing. It's not 'blaming America first' to point out that, as a matter of historical fact, empirial powers have always been hated and opposed by peoples on their periphery. It is also scarcely 'blaming America first' to point out that successful empires co-opted the nations on their borders more effectively than they can destroy them. So when someone says something like 'Islamo-fascism derives its political power from the way that the US is seen to favor certain groups in the middle-east at the expense of others', and then to follow up with 'an effective policy would therefore address this historical imbalance so as to remove the moral justification for the opposition', this is not 'blame America first'. It is an analysis of the situation, and a policy recommendation to address it. And saying things like 'a military strategy with the aim of promoting democratic change, even if successful, is too high a price to pay', is not 'blame America' either. It's not 'blame America first' to say that US dependence on foreign oil makes us extremely vulnerable, in both economic and national security terms. (For the record, I agree with the first two, disagree with the third and hold the fourth to be self-evident.) Read what the 'blame America first' crowd are saying. I just want to see those metrics of social and economic well-being heading in the right direction. I am less interested in who I have to blame or forgive to get there.

Subject: Re: Oh, come on WRS . . . From: WRS To: Paul G. Brown Date Posted: Fri, Jun 04, 2004 at 17:07:59 (EDT) Email Address: Not Provided Message: Although our discussion has strayed from the original thread about PK’s media watch, I think another reply is in order. The BLS data confirms my essential point that Bush 43 inherited a bubble economy poised for recession. Call it the Bush recession or the Clinton/Gore recession. But the point is the economy has been recovering from a serious illness and has just now regained strength. Not even PK could describe the 2004 labor market as “stagnant.” Blair is a stalwart ally who Democrats would be wise to emulate. He shows that it is possible to fight Islamo fascism while governing with a progressive agenda. His rhetoric is eloquent, and he is in the mold of traditional pro-defense US democrats (FDR, Truman, Johnson). Remember, it was JFK who once said he is willing to “pay any price and bear any burden” to protect freedom and democracy. You may find those concepts hokey, but they are important to many of us. Kerry’s Hamlet-like rhetoric is not stirring, and, given his track record, there’s no reason to expect any conviction from him. I hope the quotes you mentioned are not from Kerry because they are not presidential. Islamo fascism is a global problem that is much broader than America. Islamic terrorists have slaughtered innocents including many Muslims in Bali, Casablanca, Phillipines, Sudan, Indonesia and Turkey, to name a few places. America is hated because we impede their goal of world domination. Short of raising a green flag above the White House, terrorists will not stop, unless we stop them. There is no appeasing this lot, nor is there any “moral justification” for their nihilistic brand of murder. If we “address their historical imbalance,” they will be encouraged. Once they stop killing innocent people and begin doing something constructive, then we’ll talk about grievances. Is the US dependence on foreign oil part of the “moral justification” for terror? You suggest it is, but I disagree. We are not perfect. But, along with China and India, we use oil because we work hard, plus we have a big, rich country where people choose to commute. I don’t own an SUV, but John Kerry does (along with several airplanes and homes). I’m OK with $40 per barrel oil and incentives for efficient cars. But is it “moral justification” for mass murder because some of us drive big cars? I can’t tell if you or Kerry suggest a self-flagellating debate on “moral justification” for terror. But I know that JFK or Truman would never lead us down that dark path to nowhere.

Subject: The recession has been over ... . . . From: David E... To: WRS Date Posted: Fri, Jun 04, 2004 at 20:45:58 (EDT) Email Address: Not Provided Message: since 2001. The recession has been over for 3 years and no job growth. 140,000 new people in the labor market each month and no new jobs. Where are the jobs? 3 million less than we had in 2000. Clinton had a recession and it was turned around in one year just like Bush 43's recession did. I think you have to keep looking for a reason. A jobless return from a recession is a brand new event and President Bush presided over it. He owns it.

Subject: Re: Oh, come on WRS . . . From: Paul G. Brown To: WRS Date Posted: Fri, Jun 04, 2004 at 18:40:14 (EDT) Email Address: Not Provided Message: Sure we're off-topic. But so what? About every seven years, we have a recession. Economic recessions follow periods of economic expansion. As I pointed out, that's capitalism, baby. So it's not important when a recession starts: what's important is when it finishes, and what state you're in when you come out of it. Two and a half years after the end of the last recession (which itself lasted about a year) we are only now beginning to see job growth that's OK, on-par with what we saw on average throughout the 1990s. This growth is being achieved, as I said, by flinging fiscal probity out the window. Look at the contrasting policy regimes and outcomes. 1992, Clinton raised taxes on the upper income brackets and and contracted spending. But it was carefuly designed policy, and the economy grew steadily as the government got of the way. Bush 43 has shifted the tax burden down, is spending like William Bennet on a baccarat bender, and we're barely limping along. Why? Shitty, incompetent policy design. (Read O'Neill!) Step back and look at it. Which set of economic and social outcomes do you think history will look back on and prefer: a) 250K per quarter job growth, contracting G as a % of GDP, falling government debt, falling poverty and a foreign policy which, while far from flawless, elevated US prestige, or b) 140K jobs per quarter, exploding G as a % of GDP, exploding long term debt, increasing poverty, and a foreign policy that has nailed the military's feet to the floor while pissing off all of our friends and allies *and* giving the Islamo-fascists a sniff of victory? On the War: I beg you to read a little history, and an analysis of current affairs fueled by less tesosterone and more thought. I want to win this, but at the moment it looks to me like we're losing! National security has a military component. But if there is a lesson to be learnt from empires past it is that military power only gets you so far, and it gets you less and less further the more powerful you become. A military response was appropriate in Rome's Punic Wars with Carthage, Britain's 19th century wars with France and Spain, and even as a necessary element of the west's policy of containment towards the Soviets. But that was then, and this is now. 'Paying any price', when you are an empire, can mean treasure, not blood. Say, $100 billion (paid for by a 1% gas tax that grows by 0.5% per year for twenty years) spent on alternative energy research. Let the arab world figure it out on its own. India and China have (once we stopped trying to 'help'). Co-opt 'em. The idea is simply that its cheaper and easier to win that way. And keep the military for killing people and blowing up things. Sometimes, you just gotta. And they're good at it. Best in the world. On Moral Justification: There will *always* be small pockets of violent lunatics implaccably opposed to you. As I said, that's what it means to be an empire. And you can't hope to kill 'em all: at least not without becoming like them (in which case they win). They won't stop trying to kill us. The best you can hope for is to minimize their capacity to hurt us, cut into their recruitment before they 'strap on the plastic' (if you'll pardon the expression). Sure: if we 'address the historical imbalance' the fringe lunatics won't be satisfied. But the population they depend on for their cover, they will be less open to their rhetoric. As it is, they're kickin' our ass. Their argument is 'The US doesn't care about moslems. They just want our oil, and they will kill anyone who stands between them and it. That's why they support Israel: it provides a base. But God is on our side. They have stuck their hands into a hornets nest and we will make them pull it out.' The fact that none of this is true (except maybe the last sentence) is beside the point. All of our actions in this conflict appear to support that story. On 'doing something constructive'. Were you paying any attention during the 70's and 80's? We, the west, crushed a wide variety of moderate, liberalizing movements. Read a history of the Iranian revolution, or Chile, or Bolivia, or Cambodia. Opposition to the Shah had a radical and a moderate component. The moderates tried to work within the system. They got locked up and killed. I was writing letters on their behalf. Violent, radical revolution worked. Can you appreciate why these folk would sort of look at you funny, then glance nervously over their shoulders and check the exits when you ask them to 'be constructive'? Kennedy's 'moral clarity' and 'soaring rhetoric' got us into the Bay of Pigs, and Vietnam. His sagacious maneuver over obsolete NATO missiles in Turkey got us through the missile crisis. His 'soaring rhetoric' is like Prime Minister Andrew Fisher of Australia, who said that Australia was prepared to defend Britian 'to the last man and the last shilling', or those fine gentlemen of the south who proclaimed that no yankee was worth a damn in a fight. Fat lot of good it did any of them. Punch hard. Punch smart. (Or at least competently.) And remember punches start with balanced footwork.

Subject: Re: Oh, come on WRS . . . From: WRS To: Paul G. Brown Date Posted: Mon, Jun 07, 2004 at 00:08:03 (EDT) Email Address: Not Provided Message: Your point about perception in our war against Islamic fanatic killers is well taken, but I would not concur that terrorists are kicking our ass. Strategically and militarily we have made tremendous gains. But when it comes to winning the hearts and minds, we are faltered. I would submit that no matter what, we will be hated. Which is better? To be feared and respected or perceived as cowards? We've got to strike the right balance and be smart. Is empire really the right word to describe the US? I don't think so. The countries we have conquered (Japan, Germany, France, S. Korea) are basically independent and free, albeit they follow our model of elections and free markets. We should not be compared with the Romans who enslaved their subjects, or even the British who brutally controlled the Irish and the Indians under their flag. American influence, while backed by powerful military, is more subtle and geared to maintaining free trade and the global order of nations. We are compelled to take up arms when one force or another (Nazism, communism, Islamic fascism) threatens the delicate balance of world cooperation, a system that we have established to a large extent, but basically a fair and rational system that has led to tremendous prosperity. So I question whether we are an empire in the traditional sense. The last point is that Democrats, post JFK, seem to be out of touch with what makes America special. Yes, talking about freedom and democracy can sound hokey. But Americans expect from their leaders a sense of optimism and want to be told that all of the blood and treasure we've put forth over the years is for a good cause. Even if we're not always righteous, we like to think that we are. Democrats would do well to describe our country and its history in forceful and even glowing terms, without hedging, or expressing embarassment for what we have accomplished. They seem more intent on dividing the country by hammering at social or class distinctions and fostering grievances than strenghtening common bonds steeped in a great history and shared hope for the future. Instead of endorsing a positive vision of America, Kerry and Ted Kennedy seem intent on blaming this country for all the problems of the world. In my opinion, Kerry's message is too divisive and insufficiently uplifting to resonate, at least across the red state part of the country where I live.

Subject: Re: Oh, come on WRS . . . From: El Gringo To: WRS Date Posted: Mon, Jun 07, 2004 at 18:37:10 (EDT) Email Address: nma@hotmail.com Message: 'Is empire really the right word to describe the US? I don't think so. The countries we have conquered..........'

Subject: Re: Oh, come on WRS . . . From: Paul G. Brown To: WRS Date Posted: Mon, Jun 07, 2004 at 15:01:33 (EDT) Email Address: Not Provided Message: First WRS, let me say it is a pleasure to debate you. Your points are cogent, well made, and obviously sincere. In another response on this site I said something to the effect that we just can't have sweet reason on Internet because it interrupts our flow of invective and bad faith. You exhibit neither. At the end of this response I want to touch on an idea that you have succeeded in convincing me of. First! Winning, or losing? Don Rumsfeld agrees with me. 'The United States and its allies are winning some battles in the terrorism war but may be losing the broader struggle against Islamic extremism that is terrorism's source, Defense Secretary Donald Rumsfeld said Saturday. The troubling unknown, he said, is whether the extremists -- whom he termed ''zealots and despots'' bent on destroying the global system of nation-states -- are turning out newly trained terrorists faster than the United States can capture or kill them. ''It's quite clear to me that we do not have a coherent approach to this,'' Rumsfeld said at an international security conference.' On Empire: I have Naill Ferguson's book Colossus: The Price of America's Empire on order, so I can't quote from it yet. But I heard him speak--it's surprising the heft that a plummy accent lends an argument--and he makes the point that while the US loudly disavows any claim to being an empire, it sure acts like one, and it benefits from its ability to project its power internationally. He also points out that there have been, over the years, and enormous variety of imperial forms: from despotic Russian Czars, Chinese Emperors and Belgian Kings to the purely economic power of the late Byzantine to the quasi-religious 'Holy Roman Empire'. The US is functionally an Empire. As empires go, I judge it to be a pretty good one (liberal, humanistic (for the most part) and progressive). And the kind of social stability (Pax Americana) that an empire (any empire) brings is a necessary condition for broad human progress. Overall, I like the US emperial experiment, which is why incompetent emperors and corrupt consuls upset me. But my argument is that the US ought to recognize that it is, for all intents and purposes, and empirial power, and it ought to think about its geopolitical options in that light. To deny it purely for 'form' is just dumb. On Domestic verse International Concerns: the struggle to overcome injustices caused by social and class distinctions is as much a part of the American story as the fight against external totalitarianims. The original revolutionary movement, emancipation, sufferage, the labor movement, the New Deal, social security, and so on; all of these have been victories forged by hammering at 'class distinctions'. I don't think any political party 'fostered [these] grievances'. Rather, within a democratic framework, people who were the (typically unconsidered) victims of some social or legal construction brought about a democratic movement for change. All of them are changes which, I put it to you, have had the effect of strengthening the nation's bonds. Democrats--and progressives more generally--find their inspiration in this history. We hold the egalitarian ideal to be just as positive a vision as US success internationally; a vision we have yet to achieve. Now: the broader point I alluded to earlier. Each of us responds positively to a different set of symbols attached to what I call 'western liberalism'. The project is larger than the United States. Ideas like capitalism, democracy and sufferage are still revolutionary ideas in much of the world, and the US has been the greatest exporter of revolution in history. For some, probably including you, WRS, the important symbols are things like the stars-n-stripes, the important historical events are things like the second world war, and the potent words are 'freedom' and 'democracy'. Now, for many progressives, many Democrats, the affection and regard is the same, but the symbols, events and words they emphasize are different. For example, the big symbols in my mind are the Declaration of Independence, the legal edifice of the Constitution and Half-Dome in Yosemite. The big events are emancipation, sufferage and the Marshall Plan. I think we share the big words--'democracy', and 'freedom'--altough perhaps we emphasize different aspects of what those words refer to. But you should not deny the legitimacy of such progressive values. They are perfectly compatible with your own. Democrats like John Kerry, Max Cleeland, Bob Kerrey, and Daniel K. Inouye (the last two awarded the Medal of Honor) hold both. I put it to you that denying the legitimacy of one vision of American while placing an absolute emphasis on the other is a recipe for civic disaster. It was a mistake made by many on the left after the Vietnam War. The big idea you've convinced me of? That this 'hookey language' as you call it can be a sincere statement of patriotic intent. I had held the view--cynically, perhaps--that such language was the first refuge of scoundrels. I was wrong. It isn't. You've convinced me.

Subject: Re: Oh, come on WRS . . . From: WRS To: Paul G. Brown Date Posted: Mon, Jun 07, 2004 at 16:53:09 (EDT) Email Address: Not Provided Message: Thanks. I've enjoyed the exchange. I hear what you and Rummy are saying about the terror war, and I'll leave the question of American empire to loftier minds. I recognize that America's job as superpower is bigger than just keeping open the shipping lanes and at this point in history appears to be entirely thankless. What would Michael Moore say if we packed up our military, went home and let the rest of the world sort out their ancient grievances? It is a tempting proposition when the global fashion of the day is torching the stars and stripes. But, alas, we have litle choice but to reckon with our fate as reluctant empire. I appreciate your description of the different shades of patriotism and will pay attention as Kerry redefines himself for the national electorate. He will have to do more to separate himself from the 'we're all victims of a corporate conspiracy to screw the poor' crowd on the left. He also needs Bill Clinton's gift for story telling and connection with the common man, but no amount of Teresa Heinz money can buy that. My vote (along with many others) is available, but he will have to earn it. That is just my unsolicited advice worth about as much as I was paid to provide it.

Subject: Re: Oh, come on WRS . . . From: El Gringo To: Paul G. Brown Date Posted: Fri, Jun 04, 2004 at 20:43:14 (EDT) Email Address: nma@hotmail.com Message: 'National security has a military component. But if there is a lesson to be learnt from empires past it is that military power only gets you so far, and it gets you less and less further the more powerful you become. A military response was appropriate in Rome's Punic Wars with Carthage, Britain's 19th century wars with France and Spain, and even as a necessary element of the west's policy of containment towards the Soviets.' Perfect, simply perfect, Paul Delong...

Subject: Poverty . . . From: RL To: Paul G. Brown Date Posted: Mon, May 31, 2004 at 05:22:00 (EDT) Email Address: rafaelloring@yahoo.es Message: Paul, I have trying to check data on poverty and I have been only able to find data up to 2002. It doesn't seem very bad in comparison with other reccesions. see the nice graph. Can you tell me where to find data that reaches to 2004? http://www.census.gov/hhes/poverty/poverty02/pov02fig1.jpg RL

Subject: Re: Poverty . . . From: Paul G. Brown To: RL Date Posted: Thurs, Jun 03, 2004 at 15:15:13 (EDT) Email Address: Not Provided Message: Yeah - best I 'official' figures I can find are at the whitehouse dashboard. They're only up to Sept 2002. I am sure that I have heard reports to the effect that 'university studies show' increases in poverty (in both absolute and relative terms). But I can't put my finger on that data.

Subject: Re: New York Times Apologizes From: The Dude To: Pete Weis Date Posted: Fri, May 28, 2004 at 09:37:06 (EDT) Email Address: nma@hotmail.com Message: 'American marketing crafted by an Australian to perfection?' Hm, collateral effects (damages?) of free trade?

Subject: I suppose From: Pete Weis To: The Dude Date Posted: Fri, May 28, 2004 at 10:41:50 (EDT) Email Address: Not Provided Message: Might as well add this to the long list of things we blame on free trade.

Subject: I agree From: Mik To: Pete Weis Date Posted: Fri, May 28, 2004 at 15:32:38 (EDT) Email Address: Not Provided Message: Hahaha.... Pete Weiss... you aussies are now to blame?... look on the bright side, when all else fails, just give the Kiwis a thumping in Rugby and all will be okay. By the way did you see the super 12 game? WRS - I couldn't agree with you more. What PK has taught me is that there are some very clear rules to Economics and when applied - Economics is like a science - it doesn't lie. While PK was in this realm pointing out how other economists would try take on various 'concepts' to suit some political goal, PK would come in to point out their bull (send me back to my University Eocnomics text book) and clarify the matter. Now PK seems to be getting more and more into politics - a very subjective field. And I agree with you that PK is taking on a 'one-sided' approach. I have raised this before here.

Subject: Fond Memories of Tombo From: Jonathan To: All Date Posted: Sat, May 22, 2004 at 10:38:39 (EDT) Email Address: jonathan@lyingsocialistweasels.com Message: Posted: Thurs, Jun 05, 2003 at 19:35:53 (EDT) Posted by: Tombo Recipient: Tombo Email Address: onlyinmoscow@yahoo.com Subject: Re: Raines Falls--How long 'til Paul's axed? Message: My bet is that Paul won't last the year at the Times. Look for him to write increasingly for marginal lefty niche publications like The Nation or The New York Review, where his embarrassing screeds can fall like sermons on the ears of the faithful --- -- Since it's almost been a year since Tombo came here, pretended to be a Democrat who hated Krugman, and claimed the Good Professor would soon 'get the axe', once Keller took over. I thought it fitting to review his claims for posterity. Will Tombo have the courage to come back and admit how wrong he was? My money's on 'no'.

Subject: Re: Fond Memories of Tombo From: Bobby To: Jonathan Date Posted: Sat, May 22, 2004 at 23:57:00 (EDT) Email Address: robert@pkarchive.org Message: At some point I banned two IPs from this board -- the only IPs I ever banned from this board. One may have been Tombo but don't remember. I'll reinstate them both just in case.

Subject: Time passes slow... From: El Gringo To: All Date Posted: Fri, May 21, 2004 at 19:08:48 (EDT) Email Address: nma@hotmail.com Message: Debt level places US at risk By Charles Stein, Globe Columnist, 4/4/2004 In 2002,Treasury Secretary Paul O'Neill asked a pair of economists to calculate the federal government's fiscal gap. In simplest terms, O'Neill wanted to know how big a tab the current generation was leaving for future generations to pay. The calculation included everything from the cost of defense and roads to the bills for Social Security and Medicare. Their work never made it into print. After O'Neill was fired, his successor, John Snow, decided not to publish the findings. He may have figured that the estimate, like last week's gory atrocity photos from Iraq, was just too disturbing for the American public to handle. Laurence Kotlikoff is in the Paul O'Neill mold. The chairman of Boston University's economics department feels strongly that the nation needs to face up to the fact that it has created obligations that it cannot possibly afford. ''This is the moral crisis of our age,' he writes in his new book, ''The Coming Generational Storm. ''We are collectively endangering our children's future without giving them the slightest say in the matter.' Kotlikoff's book arrives at a good time. Washington's spiraling budget deficit has become a campaign issue. Last month, the trustees of Social Security and Medicare released annual reports that showed the programs for seniors have multitrillion dollar liabilities. Red ink is on the nation's radar screen. To Kotlikoff, the discussion is welcome but misguided. He is a harsh critic of government accounting, arguing that it gives a distorted picture of the country's finances. ''We hide our bills the way Enron did,' he said in a recent interview. Kotlikoff is one of the pioneers of generational accounting, a system that measures the burden today's commitments will create down the road. ''It's the future, stupid,' he writes in his book. O'Neill's economists used a similar approach. They concluded that America's fiscal gap was $44 trillion, more than four times the gross domestic product. To put that number in perspective, think about this. If the politicians in Washington wanted to fix the problem today, they would have to choose from among the following unpleasant options: Raising income taxes by 69 percent, boosting payroll taxes 95 percent or cutting Social Security and Medicare 45 percent The longer we wait, the more Draconian the tax hikes or cuts will have to be. Kotlikoff isn't holding his breath waiting for Washington to move. ''Politicians are lower life forms,' he said. But a failure to act will have consequences, he warns. In a worst-case scenario, he envisions a future that makes the ''Terminator' seem hopeful. He forsees a stagnant American economy crushed by debt. Taxes are dramatically higher. So is the inflation rate because the government has decided to print money to escape the fiscal vice. Money and talent are fleeing the country. ''I'm not particularly optimistic,' said Kotlikoff. Not everyone is so gloomy. While conceding that an aging population and rising medical costs pose major challenges, some economists say the problems are manageable. ''We will have to make adjustments but it won't be the apocalypse,' said Marilyn Moon of the American Institutes for Research, a Washington think tank. I hope she is right. But is it too much to ask the two candidates for president this year just how they plan to make the adjustments? The early indicators aren't promising. President Bush's three tax cuts contributed $9 trillion to the fiscal gap, according to Kotlikoff. Bush's Medicare drug benefit will add trillions more to the $44 trillion total. Like most Democrats, John Kerry has stressed the importance of preserving Social Security and Medicare benefits, without saying how he expects to pay for them. His proposed tax hikes on the wealthy will help close the gap, but compared to the size of the problem, he is spitting in the ocean. Zoology was never my strong suit, but I recall that most ''lower life forms' -- Kotklikoff's description of politicians -- wriggle around because they have no backbone. Do Bush and Kerry? © Copyright 2004 Globe Newspaper Company.

Subject: Re: Time passes slow... From: Pete Weis To: El Gringo Date Posted: Fri, May 21, 2004 at 22:02:52 (EDT) Email Address: Not Provided Message: Hopefully our next President will be more concerned how he will be judged by future generations. With the way things are going he will likely have many, if not a majority, of voters angry with him early in his term, since so many are being told, presently, that our economy is in good shape. There is no sense in worrying about getting re-elected - he will need to become totally immersed in finding and utilizing this nation's best talent in developing and trying solutions for desperately urgent problems. This will give him his backbone. But a backbone, alone, is not enough. He needs a brain to go along with the backbone and a willingness to work with the rest of the world to make life easier for all the world's citizens. We can't solve our many problems, economic and otherwise, without help from other nations - we're going to have to help each other and we need a President who can lead us in that direction. We need to swallow our pride.

Subject: Outsourced and Out of Work? From: The Dude To: All Date Posted: Fri, May 21, 2004 at 18:36:50 (EDT) Email Address: nma@hotmail.com Message: Outsourced and Out of Work by Joseph E. Stiglitz The latest buzzword in the globalization debate is outsourcing. Suddenly Americans - long champions of globalization - seem concerned about its adverse effects on their economy. Its ardent defenders are, of course, untroubled by the loss of jobs. They stress that outsourcing cuts costs - just like a technological change that improves productivity, thus increasing profits - and what is good for profits must be good for the American economy. The laws of economics, they assert, ensure that in the long run there will be jobs for everyone who wants them, so long as government does not interfere in market processes by setting minimum wages or ensuring job security, or so long as unions don't drive up wages excessively. In competitive markets, the law of demand and supply ensures that eventually, in the long run, the demand for labor will equal the supply - there will be no unemployment. But as Keynes put it so poignantly, in the long run, we are all dead. Those who summarily dismiss the loss of jobs miss a key points: America's economy has not been performing well. In addition to the trade and budget deficits, there is a jobs deficit. Over the past three and a half years, the economy should have created some 4 to 6 million jobs to provide employment for new entrants into the labor force. In fact, more than 2 million jobs have been destroyed - the first time since Herbert Hoover's presidency at the beginning of the Great Depression that there has been a net job loss in the US economy over the term of an entire presidential administration. At the very least, this shows that markets by themselves do not quickly work to ensure that there is a job for everyone who wishes to work. There is an important role for government in ensuring full employment - a role that the Bush administration has badly mismanaged. Were unemployment lower, the worries about outsourcing would be less. But there is, I think, an even deeper reason for concerns about outsourcing of, say, hi-tech jobs to India: it destroys the myth - which has been a central tenet of the globalization debate in the US and other advanced industrial countries - that workers should not be afraid of globalization. Yes, apologists of outsourcing say, rich countries will lose low-skilled jobs in areas like textiles to low wage labor in China and elsewhere. But this is supposedly a good thing, not a bad thing, because America should be specializing in its areas of comparative advantage, involving skilled labor and advanced technology. What is required is 'upskilling,' improving the quality of education, especially in science and technology. But this argument no longer seems convincing. America is producing fewer engineers than China and India, and, even if engineers from those developing countries are at some disadvantage, either because of training or location, that disadvantage is more than offset by wage differentials. American and rich country engineers and computer specialists will either have to accept a wage cut and/or they will be forced into unemployment and/or to seek other employment - almost surely at lower wages. If America's highly trained engineers and computer specialists are unable to withstand the onslaught of outsourcing, what about those who are even less trained? Yes, America may be able to maintain a competitive advantage at the very top, the breakthrough research, the invention of the next laser. But a majority of even highly training engineers and scientists are involved in what is called 'ordinary science,' the important, day-to-day improvements in technology that are the basis of long-term increases in productivity - and it is not clear that America has a long-term competitive advantage here. Two lessons emerge from the outsourcing debate. First, as America grapples with the challenges of adjusting to globalization, it should be more sensitive to the plight of developing countries, which have far fewer resources to cope. After all, if America, with its relatively low level of unemployment and social safety net, finds it must take action to protect its workers and firms against competition from abroad - whether in software or steel - such action by developing countries is all the more justified. Second, the time for America to worry is now. Many of globalization's advocates continue to claim that the number of jobs outsourced is relatively small. There is controversy, of course, about the eventual size, with some claiming that as many as one job in two might eventually be outsourced, others contending that the potential is much more limited. Haircuts, like a host of other activities requiring detailed local knowledge, cannot be outsourced. But even if the eventual numbers are limited, there can be dramatic effects on workers and the distribution of income. Growth will be enhanced, but workers may be worse off - and not just those who lose their jobs. This has, indeed, already happened in some developed countries: in the ten years that have passed since the signing of the North American Free Trade Agreement, average real wages in the US have actually declined. Putting one's head in the sand and pretending that everyone will benefit from globalization is foolish. The problem with globalization today is precisely that a few may benefit and a majority may be worse off, unless government takes an active role in managing and shaping it. This is the most important lesson of the ongoing debate over outsourcing. Joseph E. Stiglitz is Professor of Economics at Columbia University and a member of the Commission on the Social Dimensions of Globalization.

Subject: Re: Outsourced and Out of Work? From: Pete Weis To: The Dude Date Posted: Fri, May 21, 2004 at 21:36:04 (EDT) Email Address: Not Provided Message: Stiglitz is right to say 'putting one's head in the sand.... is foolish'. I believe he is correct to say that 'a few may benefit and a majority may be worse off' - atleast in the short term. However in the longer term, clearly, many in developing nations will benefit at the expense of today's wealthier societies. I'm not sure anything can realistically be done by 'government taking an active role in managing and shaping it'. Has anyone really come up with a solution to make globalization a smoother, less painfull transition? I believe a lot of pain is headed our way. We have become very, very vulnerable to the negative effects of outsourcing, higher interest rates, higher energy costs and ill conceived foreign occupations. Our perceived prosperity is more illusion than reality. Our much ballyhooed productivity doesn't (and hasn't for some time) come close to matching our lust for buying things. Much of our prosperity is built on debt. We have a huge pile of things and a massive mountain of debt. When globalization, higher interest rates, and higher energy costs collide with an economy overburdened with world record debt, bigtime pain is inevitable.

Subject: Re: Outsourced and Out of Work? From: Yann To: Pete Weis Date Posted: Sat, May 22, 2004 at 09:37:46 (EDT) Email Address: Not Provided Message: Pete is rather pessimistic. Maybe the game is not a winner-winner one, at least in the short run? Maybe less extreme poverty 'at the expense of today's wealthier societies' is not a very bad thing? By the way, did you read the last book of J. Bhagwati entitled 'In Defense of Globalization'?

Subject: Re: Outsourced and Out of Work? From: Pete Weis To: Yann Date Posted: Sat, May 22, 2004 at 14:06:27 (EDT) Email Address: Not Provided Message: Maybe it's not a winner-winner situation for those of us who now own most of the baubles. But, hopefully, somewhere down the road (and it may be pretty distant) a leveling of wealth throughout the world brings less strife and bloodshed. With regard to my pessimism about our present economy - after 20 something years of booming markets we have a heavy predilection toward a positive outlook. When things finally hit a bottom there will be, IMO, a heavy lean to the pessimistic side. This is when I will have a more positive outlook with regard to investing in the markets and an improving economy. However, IMO, it will be from a very low bottom. As Buffet points out - 'unfortunately the bust will be proportional to the boom'. I believe it is herding behavior, with regard to investing and spending, that is central to driving our markets and economy through cycles of booms and busts. And I don't believe there is anything the government or Fed can do to alter it much - perhaps they can only delay the inevitable.

Subject: Re: Outsourced and Out of Work? From: The Dude To: Pete Weis Date Posted: Sat, May 22, 2004 at 21:04:26 (EDT) Email Address: nma@hotmail.com Message: 'This is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.'

Subject: Re: Outsourced and Out of Work? From: RL To: The Dude Date Posted: Mon, May 24, 2004 at 07:45:01 (EDT) Email Address: rafaelloring@yahoo.es Message: I am surprised by Stiglitz's article. I don't advocate for out sourcing it's just what is happening. It would be foolish and unjust if developed countries stop workers from entring and multinationals from outsourcing. I don't know if Stiglitz realizes what kind of ideoly he is pushing for. It's easy to say that the government should shape globalization and nothing else, it is clear for me that Stiglitz doesn't have a clue of what it should be done, he knowns he can't say the most obvouis (capital controls or protecsionism) because they are counter productive. RL

Subject: Re: RL, HMMMM! From: The Dude To: RL Date Posted: Mon, May 24, 2004 at 17:58:10 (EDT) Email Address: nma@hotmail.com Message: 'Stiglitz doesn't have a clue of what it should be done, he knowns he can't say the most obvious (capital controls or protectionism) because they are counter productive.' 'On September 7, 1998, in a now-famous column in Fortune magazine, the noted economist Paul Krugman urged Mahathir to impose capital controls.But he was in the minority.Malaysia's Central Bank governor Ahmad Mohamed Don and his deputy, Fong Weng Phak, both resigned, reportedly because they disagreed with the imposition of the controls - those from Wall Street joined by the IMF - predicted disaster when the controls were imposed, saying foreign investors would be scared off for years to come.They expected foreign investment to plummet the stock market to fall, and a black market in the ringgit, with its accompaniyng distorsions, to form.And, they warned, while the controls would lead to a drying up of capital inflows, they would be ineffective in stopping capital outflows.Capital flight would occur anyway.Pundits predicted that the economy would suffer, growth would be halted, the controls would never be lifted, and that Malaysia was postponing addressing the underlying problems.Even Treasury Secretary Robert Rubin, usually of such quiet demeanor, joined in the communal tongue-lashing.In fact, the outcome was far different.My team at the World Bank worked with Malaysia to convert the capital controls into an exit tax.Since rapid capital flows into or out of a country cause larger disturbances, they generate what economists call 'large externalities' - effects on other, ordinary people not involved in these capital flows.Such flows lead to massive disturbancies to the overall economy.Government has the right, even the obligation, to take measures to address such disturbances.In general, economists believe that the market-based interventions such as taxes are more effective and have fewer adverse side effects than direct controls, so we at the World Bank encouraged Malaysia to drop direct controls and impose an exit tax.Moreover, the tax could be gradually lowered, so that there would be no large disturbance when the interventions were finally removed.Things worked just as planned.Malaysia removed the tax just it had promised, one year after the imposition of controls.In fact, Malaysia had once before imposed temporary capital controls, and had removed them as soon as things stabilized.This historical experience was ignored by those who (RL?) attacked the country so roundly.In the one-year interim, Malaysia had restructured its banks and corporations, proving the critics, who had said that it was only with the discipline that comes from free capital markets that governments ever do anything serious, wrong once again.Indeed, it had made far more progress in that direction than Thailand, which followed the IMF prescriptions....bla, bla, bla ' HMMMM!

Subject: Re: RL, HMMMM! From: RL To: The Dude Date Posted: Tues, May 25, 2004 at 04:26:00 (EDT) Email Address: rafaelloring@yahoo.es Message: Dude, do you think those capitals controls work in the case we are discussing?. Is not like the US is suffering a temporary panic of short term investors is that it's own companies are using direct investment to increase efficiency, nobody, not Krugman not anybody has ever proposed capital controls on that kind of investment. RL

Subject: What do we do?? From: David E... To: RL Date Posted: Tues, May 25, 2004 at 16:11:53 (EDT) Email Address: Not Provided Message: Shouldnt we have some kind of sharing? Outsourcing affects the economy unevenly, the folks who outsource have gains, and the folks who lose their jobs have losses. Isnt some kind of short term equity called for here? And the bigger question is can we maintain our standard of living as more of our jobs are outsourced? This new wave of outsourcing includes customer service call centers, financial analysts, economists, electrical engineers, civil engineers, mechanical engineers, lawyers, accountants, tax accountants, medical records, drug research scientists, mathematicians, radiologists and information technologists. We need a plan to smooth out these disruptions. Who has one?

Subject: Re: What do we do?? From: The Dude To: David E... Date Posted: Tues, May 25, 2004 at 17:47:10 (EDT) Email Address: nma@hotmail.com Message: We can maintain our standard of living, but we have to work, work a lot, educate, educate a lot, and respect, respect a lot.We are the country that always has been fighting for freedom and thus automatically tolerance, the country of the market-economy, the country that although having been confronted to a terrible episode will show the world that we have the power to stand up to simply 'maintain'...the course, our course.

Subject: Re: What do we do?? From: RL To: The Dude Date Posted: Wed, May 26, 2004 at 06:25:36 (EDT) Email Address: rafaelloring@yahoo.es Message: Don't be so alarmists. Is not only we will mantain our standard of living but wi will increase it, in US and developed countries. This pessimistic views repeats over and over. It's sounds exacltly like those concerns with Japan in the 70's and 80's Yes, There are ways to compensate those losing their jobs and that is what we do in Europe, but then you create disincentives for the creation of new jobs and to work, that have put europe in the so called euroesclerosis(higher long run unemployment) I think there has to be some kind of help but it has to be done carefully to avoid those problems. Anyway I believe this apocaliptic statements are misplaced. I see more dangers to economic growth from oil prices than from outsourcing. RL

Subject: Besides Platitutdes.. What?? From: David E... To: RL Date Posted: Wed, May 26, 2004 at 13:55:14 (EDT) Email Address: Not Provided Message: Yes, it does sound like the 80s and 90s (not 70s & 80s). It is easy to be relaxed if your ox is not gored. Here's a damage report - pensions disappeared for private sector jobs, low-paying service jobs up, job security down, productivity up dramatically but not shared with labor. Keeping our standard of living has required moving from one-earner to two earner families. These are huge losses from my perspective. From the working folks perspective the last 20 years have not been good. Bad news is that white collar folks that think they have nothing in common with the blue collar folks are going to get outsourced this time. A lot of jobs here, both low paying and especially high paying jobs are targets for outsourcing. It seems to me that this wave of outsourcing has broader implications than the last wave. The last wave was tough, this one will be tougher. I am not being alarmist. I am just asking what is the plan? 'work harder and study more' sounds like platitudes to me. Americans already work too hard, 'work smarter' is better. But to 'work smarter' a plan is needed.

Subject: Re: Besides Platitutdes.. What?? From: The Dude To: David E... Date Posted: Thurs, May 27, 2004 at 17:30:46 (EDT) Email Address: nma@hotmail.com Message: http://www.djindexes.com/jsp/avgDecades.jsp?decade=1990;

Subject: Re: Besides Platitutdes.. What?? From: The Dude To: The Dude Date Posted: Thurs, May 27, 2004 at 17:34:26 (EDT) Email Address: nma@hotmail.com Message: 0 - 1992 (DJI) = ± 3,000; 1992 - 2000 (DJI) = ± 11,000 - 3,000 = ? (Why?)

Subject: What?? From: David E... To: The Dude Date Posted: Thurs, May 27, 2004 at 18:16:58 (EDT) Email Address: Not Provided Message: What does DJI have to do with Standard of Living?

Subject: Re: What?? From: The Dude To: David E... Date Posted: Thurs, May 27, 2004 at 18:26:56 (EDT) Email Address: nma@hotmail.com Message: Give me a definition of 'Standard of Living'...

Subject: Re: What?? From: David E... To: The Dude Date Posted: Thurs, May 27, 2004 at 21:15:22 (EDT) Email Address: Not Provided Message: I have a problem, government quit publishing in early 1980's. I am left with is my list of things that have gotten worse.

Subject: Re: Besides Platitutdes.. What?? From: jimsum To: David E... Date Posted: Thurs, May 27, 2004 at 17:14:32 (EDT) Email Address: jim.summers@rogers.com Message: I don't see how globalization caused any of the problems in your litany of how the rich are using their political connections and exploiting the system to get even richer. U.S. executives do not get paid so much because they can point to Chinese executives and say they deserve to get paid the same; U.S. executives get paid more than any others in the world. If anything, competition from foreign executives might reduce U.S. salaries. Good for Americans or not, there is nothing you can do avoid global competition. Some sort of protectionist 'buy-American' campaign might boost sales in the U.S., but it is likely to cost sales in the rest of the world. You can rig the rules in the U.S. so that American suppliers have an advantage; but someone outside the U.S. will buy from the cheapest supplier, which is unlikely to be an inefficient U.S. supplier. Global trade will happen whether the U.S. participates or not. I don't understand why the economic benefits of trade only apply within the borders of a country and disappear outside the borders. Let's reduce these protectionist arguments to a personal level: Why should I buy my clothes and food from someone else; won't I maximize the employment prospects for myself (the only employment that ultimately matters) if I employ myself to make everything I need? I don't think you would agree that an economy that consisted entirely of individual who never trade would be better than the one we have. Forget reducing globalization, imagine how much employment would increase if we passed a law requiring that everyone grow their own food!

Subject: Re: Besides Platitutdes.. What?? From: David E... To: jimsum Date Posted: Thurs, May 27, 2004 at 18:16:03 (EDT) Email Address: Not Provided Message: Jimsum, Thanks for the little lesson in global trade. But I already knew that. I know “protectionism” is bad. I was responding to RL’s comment “Is not only we will mantain our standard of living but wi will increase it, in US and developed countries”. The probable affect on the standard of living is the subject. And that is what RL and I were discussing. As a reminder, here is my list of things that have gotten worse not better from the last wave of outsourcing. Pensions disappeared for private sector jobs, low-paying service jobs up, job security down, productivity up dramatically but not shared with labor, medical coverage as percent of population down, two jobs needed instead of one. Your comment about high US executive pay was disingenuous. Chinese executives do not compete with US executives. Chinese products compete with US products, that is the game. US executives have the power to set their own wages. It is no surprise that they set their wages very high. The last wave cost us “x” in standard of living. This wave could cost us many “x”. My question is what should we do to mitigate the declines in our standard of living. RL suggested we work harder and study more. I wrote that sounds like platitudes. Why shouldn’t we have an economic plan for the coming destruction and rebirth of our economy? Good people, with bad luck, will lose their careers. If we don’t have a plan to train them for new careers the whole country will suffer because of the lost opportunity for high value additions to our GDP.

Subject: Re: Besides Platitutdes.. What?? From: jimsum To: David E... Date Posted: Fri, May 28, 2004 at 15:12:05 (EDT) Email Address: jim.summers@rogers.com Message: Well maybe you can give me an economics lesson. How does trade lower the standard of living, if you can simply refuse to trade? As I recall, the gist of the theory of comparative advantage is that by specializing in producing goods where you have a comparative local advantage and trading for ones where you don't increases your income, regardless of whether you have an absolute advantage in producing any of the traded goods. Maybe the average incomes of Americans will go down with increased global trade; but the standard of living will not go down if prices decrease even faster than incomes. Americans are doing just fine from global trade, it is just a convenient scapegoat. The U.S. is coming off an unsustainable borrowing binge, fuelled by low interest rates and supported by bubbles in the stock market and in house prices, along with help from federal and state government budgets. If the U.S. standard of living is declining, it is because Americans aren't borrowing and spending with quite the same abandon as before. Imagine the decrease in the standard of living when not only do Americans live within their means, but they start to pay down debt as well. Some of the benefits of easy financing do escape America when some of the borrowed money is spent on foreign goods; but the economic benefits that are lost through global trade are a much smaller factor than a slowdown in the rate of borrowing. If you don't buy the easy credit explanation, here's an alternate one. America's economic power allowed it to set the terms of trade so that almost all the benefits of global trade went to the U.S. Perhaps other countries are now managing to grab a bigger share of the benefits and Americans are confusing a reduction in benefits with an actual cost. The major complaints seem to be about outsourcing computer jobs. Until recently almost all computer companies were U.S. based and employed Americans using profits earned from all over the world. Outsourcing is simply allowing the foreign countries that are the source of some of the profits to keep some of those profits.

Subject: Re: Besides Platitutdes.. What?? From: Pete Weis To: David E... Date Posted: Thurs, May 27, 2004 at 23:20:13 (EDT) Email Address: Not Provided Message: 'Good people, with bad luck, will lose their careers.' I don't think there is a lot of real disagreement on this board with regard to protectionism and its negative effects. I think the disagreement relates to the degree of economic pain that globalization will bring. Some of us believe there will be much more hardship to be endured in the coming years than do others. From your postings, David E., I sense that, like myself, you see a lot of trouble ahead. Inevitably, globalization will bring much anger among large segments of populations of nations like the US who have enjoyed being at the top of the heap for so long. There will be little understanding (or even a desire to understand) why it is happening - only that it is causing a lot of 'misery'. Global corporations are being squeezed by the higher costs of energy and raw materials. The only way they can effectively cut costs quickly and with little expense is to decrease their labor costs. The average wage of a Chinese factory worker is about $1.00 a day (correct me if I'm wrong). The average wage of a US factory worker is about $15.00 a day. This is a staggering difference. The reality is that nearly all manufacturing jobs will have departed the US and Europe before very long. Most white collar jobs can be exported to countries like India and China for much less cost. The very rapid advances in communications and computers have made this very rapid migration of jobs possible. This is not like anything we have experienced in past economic history. But this is only half the story. This loss of manufacturing has been occuring for some time here in the US. We have been running a trade deficit for around thirty years and with easier and easier credit our per capita consumption has steadily increased. Bill Gross of PIMPCO in a recent piece entitled 'Circus Game' shows a graph of 'Total Credit Market Debt (all sectors) as a Percentage of US GDP'. It shows a very high peak (270%) just after 1929 and then a low level (less than 150%) from the late 30's through the mid 80's. Then we get a steep rise through the present to a level of 300%. I'm sure others who visit this site have seen this chart since it is available on the federal Reserve site as well as many other internet locations. Anyway, the other half of this story is the mountain of debt we have accumulated in order to ward off the lowering of our standard of living since we produce less than we consume. When you have a steady, rather rapid erosion of jobs, rising energy costs, and climbing interest rates, the ability to service this record level of debt is eventually destroyed. I agree with David E that we have a really big problem here. And it is really the combination of all these factors.

Subject: Re: Besides Platitutdes.. What?? From: David E... To: Pete Weis Date Posted: Fri, May 28, 2004 at 20:01:03 (EDT) Email Address: Not Provided Message: Thanks Pete, I am very happy for your post, because I was about to give up. I am hopefully looking forward to a closer examination of the issues. p.s. I am sure PIMPCO was a typo, I read Bill Gross every month and he is a very respectable guy.

Subject: Re: Besides Platitutdes.. What?? From: Pete Weis To: David E... Date Posted: Tues, Jun 01, 2004 at 00:01:34 (EDT) Email Address: Not Provided Message: Sorry. 'PIMPCO' was a typo. Perhaps it was a subconscious reference to the Wall Street crowd in general. I believe Bill Gross and PIMCO are both very reputable.

Subject: Re: Besides Platitutdes.. What?? From: RL To: Pete Weis Date Posted: Fri, May 28, 2004 at 08:46:25 (EDT) Email Address: rafaelloring@yahoo.es Message: Nice post: 'When you have a steady, rather rapid erosion of jobs (look at the positings on the last PK's article), rising energy costs, and climbing interest rates, the ability to service this record level of debt is eventually destroyed.' ok there are many problems ,but if we focus on the competition from asian countries we'll end up like in the 30's, if we try to find constructive solutions we may not. I don't remember suggesting working harder on anything like that. In fact, I think the US could use some money instead of military spending to be more generous with those affected by globalization, but that is not a solution. The thing is that there is no way we can stop changes but to adapt. The Standard of living depends basically on the efficiency we produce goods and services, and this in the long run will increase with globalization. yes, yes I know...in the long run we are all dead, but we are the long run of our grand parents and our sons are our long run, ain't that pretty?

Subject: Re: Besides Platitutdes.. What?? From: Pete Weis To: RL Date Posted: Fri, May 28, 2004 at 10:27:45 (EDT) Email Address: Not Provided Message: RL. I hope somewhere along this course we can come up with some effective way of applying damage control. Right now, with all-speed- ahead on the money supply, I'm very concerned about all those bergy bits looming out there in the fog - might be a big one out there, somewhere, lying in our path. Trouble is, we have a rogue dreadnought, the USS Deflation, bearing down on us from astern. What worries me the most - George W's on the helm and Al Greenspan is his navigator.

Subject: two suggestions From: Nat To: Pete Weis Date Posted: Fri, May 28, 2004 at 12:19:35 (EDT) Email Address: Not Provided Message: Pete and RL: I have enjoyed the exchange. The current administration is neither inclined nor competent enough to solve this problem. In fact, I suspect they do not view it as a problem even if it leads to catastrophic economic consequences for a significant number of Americans. We are not part of their socio-economic community, very few Americans are. They are in power based on social and religious positions that lead many working Americans to vote against their own financial best interest. Wealth is increaingly multi and international. Money is vastly more mobile than labor. If growth is in India, it makes sense for American capital to be invested in Indian jobs. American corporations owe their allegiance to profit not to the welfare of the American people, rightly or wrongly. America has always leaked jobs like a sieve, but it's capacity for generating new and more lucrative jobs has been great. I fear that the loss of good jobs will not be offset by the jobs creation engine. And our borrowing and trade imbalance seem to be unmanageable in the not so distant future. A couple of thoughts: the first is that small town America benefits by the lower cost of living and the benefits of high tech. Access to low cost, high speed internet service in Marfa, Texas would perhaps benefit a few techies who lost their Austin jobs to move and start a new business. Small town America seed money and tax breaks would play well politically. Secondly: I think seed money (in lieu of unemploment) should be made available to those affected by lay offs to band together and reform as competitors to the companies that let them go.(Umm, I bet that last one isn't going to happen.)

Subject: Re: two suggestions From: Paul G. Brown To: Nat Date Posted: Fri, May 28, 2004 at 18:13:59 (EDT) Email Address: Not Provided Message: > Money is vastly more mobile than labor. Y'know, this is a very interesting (nay! profound) observation. I googled a bit, and found this. Turns out that it isn't so much that capital has become more mobile (capital flows are acually less in relational to national output today than they were in 1913) as much as it is that labor has become less mobile. If we imported (through immigration) all those Indian citizens now being used as cheap outsourcing labor, we would make a significant dent in the problem. Odd, isn't it? Economic reasoning leads us to a conclusion that runs entirely counter to the main thrust of conventional wisdom (keep the immigrants out and keep the jobs at home). Not really an argument or an idea. More an observation.

Subject: Re: two suggestions From: Nat To: Paul G. Brown Date Posted: Fri, May 28, 2004 at 20:03:28 (EDT) Email Address: Not Provided Message: Wow. Very interesting google-find. I hadn't thought of it in quite that way. I was actually thinking more from the other direction: the growing difficulty for our labor to go somewhere else. When Austin competes against Bangalore for a high tech job the technical measures might be close, e.g. access to bandwidth or an educated workforce. Where Austin now loses out is cost of labor because of cost of living. Twenty years ago when Austin was the lost cost competitor (cheap housing, cheap entertainment, etc.) vs. Boston and Silicon Valley, the world moved here. Now the guys who are out of work can't move to where the work is for a host of reasons. But Bill Gates and Paul Allen can buy into a both mature businesses and start ups overseas 'til the cows come home. The fact that the guy doing the work is Indian or Pakistani or Texan is immaterial to them. But it matters to the community of Austin and the guy who is the new night manager at IHOP who used to work at garden.com. I am not sure there are any more Austins out there in the US. We cost too much. Even state work here is going overseas (the new human services system that may someday actually be implemented has a very high subcontinent staffing level.) My thought was there are very many places in this country that were either losers in some prior job flight or never had many people in the first place that are nice places to work and live. And are cheap... But does anyone in DC care? And how would one go about encouraging a high tech company to start up in Mason, Texas? (And, incidentally, Mason is a very nice place.)

Subject: Re: Besides Platitutdes.. What?? From: Econochick To: jimsum Date Posted: Thurs, May 27, 2004 at 18:15:54 (EDT) Email Address: Not Provided Message: Jimsum, you are likely correct in thinking that global competition will reduce the pay of senior executives - the group perceived as most out of line. There will just simply be more competition for the job. 'Buy America' has been done before. You're looking at the results. Basically, if you have the choice to buy a cheeper paper plate made in China so that you can spend more money on other things that are important to your family, you always will. But you can piss away a lot of money trying to get people to 'buy America'. Global trade is a natural economic progression like the stages of life (birth, growth, aging, death). Unnatural interruptions to the process usually cause more problems and solve none. A coping strategy is far more effective - like educating previously unskilled labour to meet the demand for skilled labour. In other words, responding to the economic change rather than fighting it. Put your energy there, it's more productive. And you make another excellent point about an economy in which no one ever trades. It's called the height of inefficiency. This is indeed the economy we had many many centuries ago and have progressed away from that. You appropriately tested the argument at the limit. Nice post.

Subject: Looks like a death spiral to me n/m From: David E... To: The Dude Date Posted: Tues, May 25, 2004 at 21:24:27 (EDT) Email Address: Not Provided Message: no message

Subject: The Great Irony From: Pete Weis To: All Date Posted: Wed, May 19, 2004 at 21:17:24 (EDT) Email Address: Not Provided Message: Here we are embroiled in a truely disasterous war in Iraq. Insiders have been sucking money out of small investor's 401K's at a prodigious rate. We have no energy policy to speak of. Environmental problems with an ongoing severe 5 year drought throughout much of the west. So what is it here in America that really gets us spun up? The cost of gas we pump into our H2's, Lincoln Navigators and mega sized pickups.

Subject: Well, so much for .... From: Pete Weis To: All Date Posted: Tues, May 18, 2004 at 22:32:28 (EDT) Email Address: Not Provided Message: Greenspan being replaced before the November elections. You wouldn't expect him to retire before November after being reappointed to a term lasting until 2008. Looks like El Gringo may be right about the next Fed Chairman being appointed by a Democratic President. Wonder if Greenspan will retire before his four years are up.

Subject: THE SARIN GAS FIND has been confirmed From: Matt To: All Date Posted: Tues, May 18, 2004 at 15:59:45 (EDT) Email Address: mamaway@yahoo.com Message: http://www.foxnews.com/story/0,2933,120268,00.html Paul Krugman said Bush lied about WMD?? Spoke a little too soon there, Paulie boy.

Subject: Re: THE SARIN GAS FIND has been confirmed From: Neal Martin To: Matt Date Posted: Tues, May 18, 2004 at 20:15:47 (EDT) Email Address: Not Provided Message: yeah, I was just waiting for some freeper to come along and starting embellishing this non-event. Sorry dude, but nobody, not even the Bush administration, claims this lone decrepit canister is evidence of a weapons stockpile. The only people who believe this shell legitimizes Bush's prewar claims are desperate zealots grasping at whatever straws they can.

Subject: Re: THE SARIN GAS FIND has been confirmed From: The Dude To: Matt Date Posted: Tues, May 18, 2004 at 18:13:46 (EDT) Email Address: nma@hotmail.com Message: (Kuwait:159 miles,Saudi Arabia:560 miles,Jordan:92 miles,Syria:377 miles,Turkey:191 miles,Iran:947 miles)SUM:2326 miles

Subject: Re: THE SARIN GAS FIND has been confirmed From: Paul G. Brown To: Matt Date Posted: Tues, May 18, 2004 at 16:38:28 (EDT) Email Address: Not Provided Message: 600 US Dead 100 Allied Dead 10,000 Iraqi Dead $US 200 Billion down the drain The animus of the rest of the free world, and the enduring loathing of the muslim world. No Exit Strategy Lies (troop numbers) lies (links to Al Queda) lies (mushroom cloud) incompetence (secure the nuclea sights) incompetence (get oil and electricity flowing) incompetence And now we've found one defective artillery shell containing a substance manufactured in larger quantities by a Japanese cult led by a blind fatty that was probably left over from the first gulf war (or the Iran Iraq war, meaning it might have been supplied by the US), and it's all OK? Y'know, one day, we're all gonna look back at this and laugh. Or cry. Hard to say which, just now.

Subject: Re: THE SARIN GAS FIND has been confirmed From: Smith To: Paul G. Brown Date Posted: Wed, May 19, 2004 at 18:07:05 (EDT) Email Address: Not Provided Message: You're right. We will look back on this and cry after the next major attack in the US because of idiot cowards like you who could do nothing but whine and complain about the war on terror.

Subject: Re: THE SARIN GAS FIND has been confirmed From: Jonathan To: Smith Date Posted: Sat, May 22, 2004 at 10:06:38 (EDT) Email Address: jonathan@lyingsocialistweasels.com Message: You're right. We will look back on this and cry after the next major attack in the US because of idiot cowards like you who could do nothing but whine and complain about the war on terror. --- Truly hilarious, coming from an anonymous internet poster, afraid to even provide an email address, who has probably never served the country in any way a day in his life. No, Smith, what's cowardly is being too afraid to think, and instead blindly following what the desperate right-wing loons and the criminals in the White House spout. What's idiotic is ignoring all evidence and letting some extremist tell you what you think. Moron. You're taking up valuable air that normal people could be breathing. Knock it off.

Subject: Re: THE SARIN GAS FIND has been confirmed From: Paul G. Brown To: Smith Date Posted: Wed, May 19, 2004 at 20:54:55 (EDT) Email Address: Not Provided Message: I know you're not going to read this, Smith, but what was the connection between Iraq and the war on terror again? Was Iraq involved in the September 11 attacks? What about World Trade Center '93? Or the Millenium plot? Or the Cole? Or Bali? Or Madrid? Or the shoe bomber? I am as keen as anyone that we prosecute the war against the islamo-fascists to the last degree. But this lot are a bunch of incompetent liars who are *losing* that war.

Subject: Re: THE SARIN GAS FIND has been confirmed From: The Dude To: Smith Date Posted: Wed, May 19, 2004 at 19:19:12 (EDT) Email Address: nma@hotmail.com Message: 'We will look back on this and cry after the next major attack in the US because...' What about Spain? Current hint:http://www.xmission.com/~dderhak/index/moors.htm

Subject: ...and beyond From: Econochick To: Paul G. Brown Date Posted: Tues, May 18, 2004 at 21:37:38 (EDT) Email Address: Not Provided Message: Paul, now now. I'm refusing off the bat to get into partisan discussions. However, as a stand alone point you failed to mention that Sarin was one of the things that Saddam swore on his mamma's grave (so to speak) that he got rid of. The little insurgent who launched it didn't know it was a sarin bomb (probably looted). Saddam was a bad bad 'man' - no news there. However, as for your statistics on the death toll I wanted to add one more thing to think about: fewer people have died during this Iraq war and occupation than in the same period of time during Sadman's reign. Scary. This, of course, doesn't include the Iran/Iraq war and it doesn't include the people he tortured to within an inch of their lives. Incompetence? Ignorance more like. We are fully competent to carry out any task but we have to know what we are doing. Agree or disagree with the war, now that we are in this pickle what the hell are we doing apologizing to Egypt and Jordan for Abu Ghraib anyway? We should have apologized directly and ONLY to the Iraqis. What Bush did by apologizing to other Arabs feeds into the the whole Pan Arab bulls**t that brought about the likes of Hussein in the first place and has kept the Arabs sliding back into the stone age for hundreds of years. But I wonder if any American would have avoided that mistake. We are ignorant!!!

Subject: Typical of current wingnut talk... From: Jonathan To: Econochick Date Posted: Sat, May 22, 2004 at 10:27:42 (EDT) Email Address: jonathan@lyingsocialistweasels.com Message: Paul, now now. I'm refusing off the bat to get into partisan discussions. However, as a stand alone point you failed to mention that Sarin was one of the things that Saddam swore on his mamma's grave (so to speak) that he got rid of. The little insurgent who launched it didn't know it was a sarin bomb (probably looted). Saddam was a bad bad 'man' - no news there. However, as for your statistics on the death toll I wanted to add one more thing to think about: fewer people have died during this Iraq war and occupation than in the same period of time during Sadman's reign. Scary. This, of course, doesn't include the Iran/Iraq war and it doesn't include the people he tortured to within an inch of their lives. Incompetence? Ignorance more like. We are fully competent to carry out any task but we have to know what we are doing. Agree or disagree with the war, now that we are in this pickle what the hell are we doing apologizing to Egypt and Jordan for Abu Ghraib anyway? We should have apologized directly and ONLY to the Iraqis. What Bush did by apologizing to other Arabs feeds into the the whole Pan Arab bulls**t that brought about the likes of Hussein in the first place and has kept the Arabs sliding back into the stone age for hundreds of years. But I wonder if any American would have avoided that mistake. We are ignorant!!! --- Sorry, Econochick, but this is a losing argument. It's typical of one being put forth by wingnuts (among several contradictory memes) that things aren't as bad now as they were under Saddam. 'Look! Saddam tortured people worse than we tortured them!' And now, evidently, 'More people were killed under Saddam than under us!' Of course, neither addresses whether such activities or events are acceptable under us. This sarin shell is a non-issue. For all anyone knows, it was found in a former Iran-Iraq-War battlefield, having failed to go off. It's an unlabeled relic, and hardly evidence for anything except that Saddam once had such weapons. Which we already knew. It alone was basically incapable of inflicting mass casualties (pretty much the definition of 'weapon of mass destruction') beyond the shell's ability to explode, and obscures completely the rationale put forth for going to war. We didn't attack Iraq on the grounds that a few old, stray, rusting chemical weapons artifacts from 20 years ago might still be found. What's truly amazing is that so few have turned up, in a country that once swam in and used them in a devastating war. 'Incompetence' is the perfect word for what's going on in Iraq. The administration was warned over and over and over again by competent people to whom they should have listened that things would not go swimmingly and that we'd need many more troops than we used. They didn't listen. Worse, Bush's instant response to the Fallujah incident was to order the city nailed. A truly stupid move, by any measure. Again: raw incompetence. This war and occupation have become a monument to incompetence. I don't disagree with 'ignorance', too, but it's the job of our leaders to know at least a little about the consequences of what they're getting us into, and not ignore anything they don't want to hear. So any way you measure it, we're back to incompetence...

Subject: Re: ...and beyond From: Nat To: Econochick Date Posted: Wed, May 19, 2004 at 21:36:38 (EDT) Email Address: Not Provided Message: Sorry, Econochick. No counting the Iran/Iraq war in any of these discussions: that one was ours, too! Saddam was our anti-Ayatollah poster boy and we supplied his arsenal and technology and cheered from the (barely) sidelines. The very nice photo of a younger Rumsfeld shaking Saddam's hand is out there on the web. Saddam was our buddy until Kuwait and the Bush/Glaspie screwups. So some of that Saddam body count is on our side of the cosmic ledger, too. As for the number of dead in Saddam's purges etc., I have seen estimates all over the map, all truly horrible. Many count the war in the numbers. But many, many of our best buddies have been and continue to be murderous thugs. Where is the line drawn in comparing atrocities to make the decision for war and occupation? I suspect our conservative leaders fancy themselves wordly enough to tolerate unlimited atrocities among friends. The Saudis behead women for marrying outside of the royal family. Nice guys. At least one has unfettered access to the Oval Office. Saudis were the 9/11 terrorists and they fund terrorism to a vastly greater degree than Saddam ever did. War was the answer to other strategic aims (as in dominating the oil fields) and all the humanitarian claptrap was just so much posturing. IMO Saddam's thuggery was just a useful excuse to justify an invasion truly motivated by other goals, none of them worthy of America. The current Iraqui civilian casualties (which we don't feel the need to officially count) considerably outnumber the 9/11 toll. They have a guerrilla war in their streets every day, and will until we leave. This has been a spectacularly bad idea executed with uncommon stupidity. The cold war lesson was democracy will win in the long run and we have forgotten it.

Subject: Re: ...and beyond From: Mik To: Econochick Date Posted: Wed, May 19, 2004 at 17:54:12 (EDT) Email Address: Not Provided Message: Ayi Caramba Econochick, Your statement about how few people have died in comparison to Saddam's reign seems to justify a reasoning for going into Iraq in the first place? If that is the reasoning, the US should have chosen to go into North Korea first (and at least we know they do have WMD). Just because there is a tyrant in power does not mean we should invade. If we are to invade every country where there is a tyrant, then Bush has got a lot of serious work to do in places like Turkmenistan, Zimbabwe, North Korea... and this list goes on. Also if that is the excuse then please he should have used it from the beginning when he approached the UN for the first time - and not the WMD story, or the bull story he gave in his state of the union address about Iraq's attempt to buy nuclear material from Niger.

Subject: Re: ...and beyond From: Econochick To: Mik Date Posted: Wed, May 19, 2004 at 18:07:15 (EDT) Email Address: Not Provided Message: Not the point, Mik. I just pointed that out as a sad fact. 5-7 million people have 'gone missing' in the past 20 years in Iraq. The point was that one asshole could kill more people than a war in the same time period. I'm not getting into whether or not the war was a good thing.

Subject: Re: ...and beyond From: Paul G. Brown To: Econochick Date Posted: Wed, May 19, 2004 at 21:05:46 (EDT) Email Address: Not Provided Message: Back in the 1980's, I was writing letters and struggling to draw attention to the henious nature of the Baathists in Iraq. It achieved butkas. And while it was certainly true that the way the embargo was being manipulated by the Saddamite state in a way that ensure the misery and death of thousands of people (particularly children) it does not follow that an invasion was the best way to resolve that problem (although I was in favour of military intervention in Iraq, and I am now in favor of it in Zimbabwe). It's about competence, more than anything else. I think there is a broad consensus in terms of the goals and the strategy, here. The way to defeat islamo-fascism is by bringing about political change in the middle-east. But you don't win by lying, conniving, stealing, invading without a clue, and generally mucking it up at every turn. If I ran my work projects with the mix of deceit, cluelessness, arrogance, and willful ignorance of Bush 43, I'd be out of a job. Lifetime, serial failure. Flawed human being. Worst. President. Ever.

Subject: FIFA Decision for 2010 From: Mik To: All Date Posted: Tues, May 18, 2004 at 11:39:45 (EDT) Email Address: Not Provided Message: Dude... thanks. OH YEAH !!!! The World Cup soccer is the greatest show on earth, surpassing the Olympics. South Africa currently has one of the highest crime rates in the world and a murder rate equal to a country ar war (approx. 21,000 murders a year). The SA Government has a VERY weak concept of what needs to be done to commit proper resources to combat crime. In essence they don't take crime seriously. I look to the 2010 world cup as a catalyst in forcing the SA government to wake up and do something serious about crime. The 2010 world cup is not just about pride, but a huge historical milestone in setting SA on the right course.

Subject: Re: FIFA Decision for 2010 From: The Dude To: Mik Date Posted: Mon, May 24, 2004 at 18:20:34 (EDT) Email Address: nma@hotmail.com Message: Nigeria: World Champion 2010...?

Subject: Rumsfeld to go down with the ship? From: Pete Weis To: All Date Posted: Sat, May 15, 2004 at 23:51:05 (EDT) Email Address: Not Provided Message: Or get tossed over the side before the ship (the Bush administration)sinks below the waves? It's becoming more and more apparent that members in the military heirarchy or those with access to information about inside operations in Iraq are leaking information to the press in an effort to get rid of Rumsfeld and the present civilian leadership at the Pentagon. The first indications surfaced when it was reported that top military brass went around Rumsfeld in 2003. They approached Colin Powell with a document, they wanted Bush to sign, which offered concessions to the UN to get other countries involved with helping out with security in Iraq. Colin Powell presented the document to Bush and urged him to sign, which he did. This clearly showed the growing rift between Rumsfeld and the military leadership at the Pentagon. IMO, the US military leadership is ready to 'burn' Rumsfeld to the point where his charred carcass is tossed over the side - a fitting ending for one of the very few Republican leaders to ever serve (in the 50's peace time navy). Now, sensitive information is being leaked to people like Seymour Hirsch to connect him to the perverted treatment of prisoners in Iraq. It's only a matter of time before those who pay the bills for the Republican party demand Rumsfeld's head. Of course, Wolfy gets to walk the plank as Rumsfeld is tossed over the side. How ironic. Here Cheney calls Rumsfeld the greatest defense secretary ever and Bush says Rumsfeld has done a superb job despite all the horrific mismanagement of post invasion Iraq and soon Bush will likely be strongly 'urged' to 'ask' for Rumsfeld's resignation. As Bush's numbers continue to sink, you have to wonder whether Cheney is next on the plank. There has been some speculation that Rudy Gullianni might replace Cheney on the Republican ticket if re-election was looking more grim. But you have to wonder whether Gullianni wants to step aboard this ship. I realize all of this is speculative but it's becoming more and more obvious that major shake-ups within the Bush administration will need to happen or not only will the Republicans lose the Presidency, but also the House and the Senate.

Subject: Re: Rumsfeld to go down with the ship? From: Paul G. Brown To: Pete Weis Date Posted: Sun, May 16, 2004 at 00:35:05 (EDT) Email Address: Not Provided Message: > Or get tossed over the side before the ship (the Bush > administration)sinks below the waves? Think, for a moment, about what that would mean. The same person, George W. Bush, is legally and morally 'in charge'. But by ridding the administration of Cheney/Rumsfeld/Wolfy/Rice (Perle - gone) suddenly he's electable again? I mean, who selected these people for their posts? Who interviewed them? Who's judgement of character and talent gave them their jobs? What evidence do we have that he'll do better second time around? If George W. put them there, why does it make sense to re-elect him? If George W. didn't put them there, why does it make sense to elect him? If he isn't in charge, who is? If Cheney is in charge, and he is fired, who's left? In my opinion, the evidence suggests that George W. is in very much in charge. And it is George W.'s intellectual limitations and character flaws that have turned great opportunity into a ghastly disaster, on every single policy front. The first economic surplus in a generation turned into the largest deficit, genuine international goodwill in the struggle against islamo-fascism sacrificed at the altar of an obsession, the chance to lay out new policies with respect to energy independence burnt to a oil-soaked crisp, corporate fraud left to flourish. To quote Atrois; Worst. President. Ever.

Subject: Re: Rumsfeld to go down with the ship? From: Pete Weis To: Paul G. Brown Date Posted: Sun, May 16, 2004 at 12:59:08 (EDT) Email Address: Not Provided Message: Paul. I agree with all of your points with the possible exception that George W. is 'very much in charge'. One of his speech writers who left early called him 'uncurious'. Paul O'neil called him 'unengaged' when he tried to discuss economic issues with George W. From all accounts, George W. has never had much interest in current events and has never spent much time following the news. It's my understanding that, in the early period of his life, he was never very ambitious. In the 80's he was 'set-up' with two business opportunities by family and friends - both of which failed. In the early nineties he was given a nominal executive position at Harkin when his father was president. I won't go into Harkin's troubles during and after George W's tenure - there's lots of info that can be found on the web with regard to those years. He had little, if anything, to do with the running of Harkin Energy - but his connections were obviously perceived to be of value by those who actually ran Harkin. Soon after he leaves Harkin, Carl Rove comes into the picture. Carl Rove has all the ambition that George W. never had. Rove is a character who has extreme ambition to go along with no moral self-restrictions. This was evident in the gubernatorial races in Texas as well as the presidential primaries (especially South Carolina) where John McCain became the target of a truely dishonest and vicious smear campaign. This is also evident in Rove's leaking classified information regarding the identity of a CIA agent to Novak and other reporters in a clumsy attempt to discredit evidence that Iraq had not sought uranium in Africa. George W., who makes a big deal about his 'born-again' conversion simply goes along with the Rove program. In short, I don't think George W. is the strong leader Carl Rove tries to portray to the public. Perhaps George W. has convinced himself that God has surrounded him with people who have both his interests and the nation's interests at heart. Perhaps he had much to do with the decision to invade Iraq in the first place. But I don't think he makes very many decisions in this administration - I tend to think he just goes along with the program. As for Rumsfeld, this prison scandal seems to be growing to the point where he personally is being connected to the disgusting activities of military intelligence (per direction of Rumsfeld?) and the prison guards. I don't think this is going away and at some point Rumsfeld will likely tender his resignation - Carl Rove will want this at the point where Rumsfeld becomes too much of a liability. I agree that Bush will likely lose the November elections regardless of any changes to his cabinet or his running mate. But the Republican leadership will do what ever they think is necessary to give themselves a shot at winning the election. If things are falling apart they'll make changes short of replacing Bush at the top of the ticket.

Subject: Re: Rumsfeld to go down with the ship? From: Mik To: Pete Weis Date Posted: Mon, May 17, 2004 at 11:17:37 (EDT) Email Address: Not Provided Message: Pete, I think what Paul put across is that whether or not W Bush did 'run' the system, there is a mess and Bush should be out as a result. The question I ask is simple, 'Do you think the majority of Amercians see it that way?'

Subject: Re: Rumsfeld to go down with the ship? From: Pete Weis To: Mik Date Posted: Mon, May 17, 2004 at 23:08:31 (EDT) Email Address: Not Provided Message: Mik. I agree incompetence, in George W's case, does not get him off the hook. I certainly don't think he should be re-elected and it would take an incredible turn of events for him to be re-elected, IMO. IMO, the whole gang - George W, Cheney, Rumsfeld, Wolfewitz, Ashcroft, etc will end up going down in history as the foremost malevolent, malfeasant, incompetent bunch of American leaders in history. Atleast, I hope this is as bad as it gets - up till now, I believe this group wins it hands down. The one saving grace is that we get to un-elect them in the November. Unfortunately, the next President will need to perform miracles. It's amazing to see how much support George W still has here in the US, but his support is falling rapidly. I think, at some point before the November elections it will be evident, even to the most ardent Bush supporters, that he has little to no chance of being re-elected.

Subject: Re: Rumsfeld to go down with the ship? From: Mik To: Pete Weis Date Posted: Tues, May 18, 2004 at 11:51:37 (EDT) Email Address: Not Provided Message: Pete, Yeah I agree with you. The problem is that some time back I was frequenting another board and was stumped at the attitude of some people on how Bush is doing the right thing, 'We are now going to sort out these Arabs once and for all.' The problem was the prevelence of people like this. Bush is starting to use words like, 'This is a historic turning point..' It almost sounds like Bush wants to slot himself into the position of great American Presidents like Ike or even Lincohn himself. And people are buying it. Now granted I have seen that Bush has dropped significantly in the polls, but he is still up there almost neck and neck with Kerry. So I sit back and say, 'Oyi vey....'

Subject: Re: Mik From: the Dude To: Mik Date Posted: Mon, May 17, 2004 at 17:20:25 (EDT) Email Address: nma@hotmail.com Message: Mik:http://www.fifa.com/en/worldcup/index/0,3360,101468,00.html?comp=WF&year=2010&articleid=101468 ;)

Subject: Outsourcing From: Bobby To: All Date Posted: Wed, May 12, 2004 at 14:25:31 (EDT) Email Address: robert@pkarchive.org Message: This is something I wrote regarding an article about outsouring posted by Brad DeLong here In pre-Krugman trade theory, India's apparent comparative advantage in 'data mining, data warehousing, business intelligence and knowledge management' is due either to (1) the possible fact that our productivity in those sectors relative to India's is worse than that of other sectors in the economy or (2) India is more abundant in factors like skilled labor that are intensively empoyed in these sectors. Either way, it translates into India having a greater supply of the goods 'data mining, data warehousing, business intelligence and knowledge management' relative to other goods, so they can sell these goods at a lower relative price. Outsourcing is better than creating controls that cut off this outsourcing. Without controls, those factors employed previously in areas where we don't have comparative advantage (call them 'import goods') can go into other sectors where we do (call them 'export goods'). We will therefore produce more 'export goods' and fewer 'import goods.' A lower relative price of 'import goods' implies that the world price of 'export goods' in terms of 'import goods' is greater than under protection against outsourcing. When measured in terms of import goods, the value on the world market of what we produce is greater compared to controlling outsourcing. Also when measured in terms of the export good, the value on the world market of what we produce is greater compared to protection. Since the value of what we consume must equal the value of what we produce, this implies that, in principle, our country can consume more of both import and export goods compared to protection against outsourcing. More formally, our country's budget constraint is allowed to rotate outwards when we do not engage protection, and this allows our representative consumer to consume bundles of export and import goods that yield higher utility compared to controls on outsourcing. In other words, the social welfare of all of society has increased. Some individuals may lose welfare while others may gain, but the gains are greater than the losses, and we can make everyone better off if the government makes appropriate transfers from the winners to the losers. Yes some of those U.S. factors, usually labor, who were in those industries that left the U.S. for India may be hurt either because they are stuck in import-competing industries unable to move to others or because they aren't employed intensively in industries where the U.S. has comparative advantage. However, labor is most often hurt by technological change, and changes in consumer preferences. When someone loses their job due to foreign competition, it is no more a tragedy than if he lost it due to one of these other factors. Moreover it is very difficult to tell whether technology trade is the culprit when a worker's wage decreases or he loses his job -- it's not always as stark as someone's factory moving abroad. These are two reasons why all dislocations of labor, whether due to trade or technology, should be all dealt with together in one program of better social insurance and programs to compensate them for their hardship, which has helped society as a whole.

Subject: Re: Outsourcing From: RL To: Bobby Date Posted: Mon, May 17, 2004 at 07:44:42 (EDT) Email Address: Not Provided Message: Can you copy-paste Bard Delong's post?

Subject: Re: Outsourcing From: Bobby To: RL Date Posted: Mon, May 17, 2004 at 12:49:00 (EDT) Email Address: robert@pkarchive.org Message: Someone has obviously hacked into my account at hotboards. I'll get rid of the obscenity there. Sorry about this. The link to DeLonf's post is there in the original post now and also below http://www.j-bradford-delong.net/movable_type/2004_archives/000811.html

Subject: Keynes on war??? From: Rune Løgstrup To: All Date Posted: Tues, May 11, 2004 at 13:04:50 (EDT) Email Address: runel@net.dialog.dk Message: Really enjoyed 'The Great Unraveling'. I have a question though: Can keynesian militarism explain the 2. war i Iraq and can't it be one of the reasons why USA wanted the war so badly? Afterall a higher planned expenditure makes the interest rate go down, the income to go up and the overall economi, which didn't looked good at the time, to look a little better? I could really use some great links on this question. All the best /RL

Subject: Re: Keynes on war??? From: Bobby To: Rune Løgstrup Date Posted: Tues, May 11, 2004 at 13:38:16 (EDT) Email Address: robert@pkarchive.org Message: If anything this will cause the nominal interest rate to increase, though it is expansionary. What happens is that this increase of government expenditure on the war is an outward shift of IS. However, increased output implies an outward shift of money demand in the money market, that is we go up the LM curve. Therefore IS meets LM not only at a higher output but also at a higher interest rate. If we are at a point on LM that is rather flat, as may be so right now, this effect is not large, so interest rates increase only a little. The only way one could make an argument that the war decreases interest rates is that it somehow makes LM shifts outward so much that the interest rate decreases. To make LM shift outwards so much you'd have to argue that war, for some reason, makes the Fed increase money supply drastically or something happens in financial markets due to the war that makes money demand decrease drastically. I don't know of any plausible argument for this.

Subject: Re: Keynes on war??? From: The Dude To: Bobby Date Posted: Wed, May 12, 2004 at 18:25:11 (EDT) Email Address: nma@hotmail.com Message: 'Afterall a higher planned expenditure makes the interest rate go down, the income to go up and the overall economi, which didn't looked good at the time, to look a little better? ' Short term endogenous! economy, yes.Long term 'still' endogenous! economy, an 'artificial' yes.

Subject: Re: Keynes on war??? From: Rune Løgstrup To: Bobby Date Posted: Wed, May 12, 2004 at 10:02:53 (EDT) Email Address: Not Provided Message: Thanks for the answer, you really helped me out. You're right the interest rate will increase after all. But what about the multiplier-effect? Won't it create some jobs and thereby maybe pull the economy out of the stagnation. I just think that you can see some Keynes-elements ind the american fiscal-politic.

Subject: Re: Keynes on war??? From: Bobby To: Rune Løgstrup Date Posted: Wed, May 12, 2004 at 11:05:17 (EDT) Email Address: robert@pkarchive.org Message: Good question. The multipler effect occurs, but a large part of it is choked off by increasing money demand and increasing interest rates in the money market. Put another way, if the LM curve were completely flat, the spending multiplier would be 1.93, but the steep LM curve the occurs in reality cuts the spending multiplier to .6 -- this particular estimate comes from the DRI model. A good link on this is here A caution on the previous multiplier estimates: In standard IS-LM an increase of money supply will shift the LM curve. DRI puts a slightly different interpretation on LM. DRI models the Fed's behavior, which stylistically (this is my own way of thinking about it, and this terminology is not in the model) can be classified as 'not normal,' when the Fed adjusts money supply to do things like *change* its interest rate target for fighting recessions or inflation and 'normal' which are Fed actions that still involve adjusting money supply such as *staying* at its interest rate target. Normal actions will not shift LM while 'not normal' ones do. So the .6 estimate comes when the Fed is engaging in only 'normal' behavior. Therefore this .6 estimate does not assume no money supply adjustments.

Subject: Re: Keynes on war??? From: Rune Løgstrup To: Bobby Date Posted: Wed, May 12, 2004 at 11:48:25 (EDT) Email Address: Not Provided Message: Thank you, Bobby...a great way to learn more about the key-concepts ind the IS/LM.curve. You've been a great help. Sincerly Rune

Subject: Re: Keynes on war??? From: RL To: Rune Løgstrup Date Posted: Thurs, May 13, 2004 at 04:21:56 (EDT) Email Address: rafaelloring@yahoo.es Message: All this is stirctly correct but I somehow see it as handicaped debate. IS/LM model was a way of explaining theories, mainly Keynesian, to students. just a model that can help us explain some ideas but we should extend our discussions out of it. Before the second world war the Fed turned aorund it's monetary, policy expanding the monetary base but america was in a deflationary trap, so cheap money wasn't effective. At the end was the war that pushed demand and put the economy in motion. To speculate that this was a reason to go to war is absurd,(remember pearl harbour?) in fact US was very reticent to go to war. I believe economic reasons for conflicts are normaly overstated (marxsim influence), politcal reason are normaly much more important. In Iraq I give it a 50-50%

Subject: Bush's foreign policy is hurting... From: The Dude To: All Date Posted: Mon, May 10, 2004 at 19:00:52 (EDT) Email Address: nma@hotmail.com Message: By Robert Dujarric Bush's foreign policy is hurting US business Millions of dollars are flowing from America's corporate executives into the campaign coffers of George W. Bush.It seems logical that business executives - whose taxes he cut significantly - should support him.But a glance at the Bush administration's foreign policy - including on Iraq and world trade - reveals that he president's action could significantly harm the interests of US investors. The war in iraq is harming the American economy.The US has already wasted about $200bn in a futile effort to turn Iraq into a 'liberal' democracy and Mr Bush is now asking for a further $25bn.Until US troops leave, it is likely that US taxpayers will have to contribute hundreds of billions of dollars more to this ill-fated enterprise.Mr Bush's pledge to establish 'democracy' in Iraq is essentially a commitment to keeping large numbers of troops there - potentially for a decade - with little hope of success. Mr Bush's Iraq war stands in contrast with his father's.The war to liberate Kuwait was justified and the elder Bush, who understood diplomacy (hi Paul), convinced the allies to shoulder almost the entire financial burden of the conflict. His son, however, initiated the war for dubious reasons and thus secured almost no substantial contributors in 2003-04.Even nations that sided with the US, such as Japan, contributed far less funding this time than in 1990-91. Moreover, Mr Bush is putting at risk the international system which underpins world stability and US corporate profits.America leads a system that upholds the peace of Europe and the Pacific Rim - where most of the world's wealth outside the US is generated - and helps mitigate political and financial crises thoughout the world. This system, anchored by Nato and alliances with Japan and 'Korea', relies on US military power.But it also includes economic organisations such as the World Trade Organisation and the International Monetary Fund.These institutions need both American hegemony and the co-operation of US allies to work well.The unilateral (ab)use of American power for a misguided purpose has crippled, though not yet destroyed, this system.Friction between Washington and Paris over Iraq generated much attention, but the real failure was the diplomatic crisis over ties with Germany.The diplomatic aspect of the war also hurts American business(FDI's).International trade and investment flourish because the US leads regional and global institutions that protect the world from anarchy.Though the US is incredibly powerful, it cannot ignore its allies if the system is to work well.Mr Bush behaves like a managing partner who thinks that, as the largest shareholder, he can act as he pleases without considering his junior partners.At some point, this attitude could shatter the international order, with dire consequences for the stability companies need to make profits. Trade policies have also taken a battering under Mr Bush.His tariffs on steel undermined the WTO and hurt the profitability of steel - buying companies.Though later rescinded, the tariffs set a dangerous precedent.As US president, Mr Bush's actions have generally had far more impact than those of any other single leader. In Europe, The Bush administration's commitment to reducing US military presence in Germany could fray the ties between the US and some of its most important economic partners.There cannot be a lasting transatlantic partnership without a robust US military presence (NATO) in western Europe. Finally, America's new visa policies harm US industry.US companies are now encountering difficulty bringing foreign employees to the US, while overseas customers in some countries cannot visit their American suppliers.Other new restrictions would prevent some of the brightest foreign students from studying in US universities- and possibly contributing to American expertise.If the Microsofts, Intels, and Googles of this world cannot count on a continuing inflow of foreign graduates and face restrictions in hirinhg foreigners, their profits are likely to fail substantially. Right now, Mr Bush is trying to limit the damage from the escalating controversy over US millitary abuse of Iraqi prisoners.But this and other grim developments are hurting the alliances, relationships and economic strenght that US corporations rely on to succeed.American executives, therefore, need to ask themselves if Mr Bush's re-election is in the best of their shareholders. (The writer is co-author of America's Inadvertent Empire, just published by Yale Univeristy (Hi Bobby) Press.

Subject: Still Oil for dollars? From: El Gringo To: All Date Posted: Sat, May 08, 2004 at 21:59:49 (EDT) Email Address: nma@hotmail.com Message: 'Saddam Hussein sold oil in Euros instead of US dollars. (Recknagel, Iraq: Baghdad moves to Euro - Radio Liberty/RFE press release 11/1/00) Venezuelan President Hugo Chavez bartered oil with other Latin American countries and Cuba; soon afterward he faced a Bush Administration backed coup. (Henderson, Globocop v. Venezuela's Chavez, Interpress service 4/2002) The US dollar is the currency of oil - ALL oil. A sixty year monopoly guarantees that every transaction for a barrel of oil on the globe is done in US dollars. Oil sold or traded in anything other than US dollars will have a dramatic NEGATIVE economic effect on this country and the world. Consider that a nations economic fragility is shown in its aggregate debt levels (consumer, corporate and goverments), as well as in its trade surplus or deficit. Aggregate debt is currently over 300% of GDP and the US trade deficit is larger than most nations GDP. Treasuries of the world (China has $500B, Japan has more) hold huge dollar based positions to buy oil. If oil were to be priced in Euros, or anything other than US dollars, those US dollars come flooding back into the US treasury. The US will then have to buy that countries currency to pay them back. The US money supply has added more than $8 trillion dollars since 1971 - this will swamp us. This oil-dollar nexus is the US energy policy, if not the US economic and military policy. If we have to use another countries currency to buy oil not only is our era of military dominance over, but it will provide a painful end to our economic dominance. ' Posted by: John Dewey on May 7, 2004 'Dewey & daCascadian: Krugman wrote a post on his website about the theory that the war against Iraq was planned because OPEC wanted to change dollars for euros, refuting it quite convincingly IMO. The idea that the US need to dominate the ME and its energy resources because 'the Chinese and other Asian economies are consuming more of a soon-to-be dwindling resource' (asdf) is quite old, by the way. In 1949 State Department strategist George Kennan said that control over Japan's oil supply would give 'veto power' over their industries and military programs.' Posted by: Motoko Kusanagi on May 7, 2004 'Maybe I'm getting too old but I sure remember the same argument that the world was running out of oil and other natural resources back in the 1970s... Krugman addresses this in his column.' Posted by: Motoko Kusanagi on May 7, 2004 'Motoko wrote: Krugman wrote a post on his website about the theory that the war against Iraq was planned because OPEC wanted to change dollars for euros, refuting it quite convincingly IMO. I like Krugman a lot but he refutes himself in this piece where he writes: The US advantage comes to the extent - and only to the extent - that the international role of the dollar lets us borrow money more cheaply than we otherwise could. One component of that is clear: because foreigners hold a lot of dollar bills, which pay no interest, we in effect get a free loan of that much money. Imagine if we stopped getting 'free loan(s)' and had to start paying them back? Couple that with this line and quote from a Russian publication last Fall: If a Russian move to the euro were to prompt other oil producers to do the same, it could be a 'catastrophe' for the United States, Youssef Ibrahim, managing director of the Strategic Energy Investment Group in Dubai and a member of the U.S. Council on Foreign Relations said. 'There are already a number of countries within OPEC that would prefer to trade in euros.' Moscow Times http://www.axisoflogic.com/cgi-bin/exec/view.cgi?archive=29&num=2228&printer=1 Add that to our banking ties to Britain - check out the lineage between the Federal Reserve and the Bank of England - it becomes more difficult to think that control of the international monetary system is NOT a central issue motivating the 'war president', or you can buy Krugman's reason of: 'just because'.....NFW.' Posted by: John Dewey on May 7, 2004 'Motoko, one last piece to consider: The OPEC nations raised their oil prices 400% after the Yom Kippur War to compensate for the new weakness of the reserve currency, the US dollar. The media chronicled this as an oil price shock or oil crisis, a rapacious power play by OPEC ? few Americans to this day understand their own governments? role in the OPEC price hike of 1973. Michael Hudson, former economist at Chase Manhattan Bank and now a distinguished Professor of Economics at the University of Missouri at Kansas City saw it differently: When Saudi Arabia and Iran proposed to use their oil dollars to buy American companies after 1972, U.S. officials let it be known that this would be viewed as an act of war. OPEC was told that it could raise oil prices all it wanted, as long as it used the proceeds to buy U.S. Government bonds or small minority positions in U.S. companies via the stock market, creating a nice boomlet for U.S. investors to ride. This enabled Americans to pay for oil in their own currency, not in gold or other 'money of the world.' Oil exports to the United States, as well as German and Japanese autos and sales by other countries, were bought with paper dollars that could be created ad infinitim. The act of war admonition or threat came from the Nixon administration. Hudson, Michael (2003) Super Imperialism: The Origin and Fundamentals of U.S. World Dominance London: Pluto Press We will eventually come to understand that oil priced at $40 or even $45 per barrel is what the Federal Reserve actually WANTS (they will never admit to it however). The reason being that the higher the price of oil the greater the demand for US dollars outside the US (as long as oil is priced in dollars) and the US debt orgy (inside the US) can continue unabated.....unless Americans stop borrowing....and that day will come. It is a race to see who fliches first in a equation that has foreigners gulping up our debt as an investment vehicle or Americans somehow believing that debt is wealth. ' Posted by: John Dewey on May 7, 2004 'The nexus between the US Dollar and oil should eliminate any mystery as to why the US works to abolish any initiative that either increases conservation (The Kyoto Protocol), the use of alternative fuels and staunch resistance to the nationalizing of any countries oil supplies (Iran, Iraq, Russia, and Venezuela). The most persuasive argument holds that this unique relationship between oil and the US Dollar makes every barrel of oil an American asset, and therefore it makes perfect economic sense for the US to encourage MORE oil consumption and even create GREATER dependence in other countries of regions of the world.' Posted by: John Dewey on May 7, 2004 'Dewey: thanks for your posts, especially the Michael Hudson bit. I will have to think this over.' Posted by: Motoko Kusanagi on May 7, 2004

Subject: Re: Still Oil for dollars? From: Pete Weis To: El Gringo Date Posted: Mon, May 10, 2004 at 19:57:33 (EDT) Email Address: Not Provided Message: El Gringo. You've introduced a very important issue. This is an interesting view of a relationship between the trading of oil in dollars and its contributing influence on aggregate US debt. It's pretty obvious, any substantial move by oil producers to accept anything other than US dollars for their oil would signal the end of the dollar as the world's reserve currency. With the massive amounts of dollars held in reserve by central banks around the world, any huge move to offload those dollars (which would happen if OPEC wanted euros for their oil) would bring about a collapse in the dollar and hyperinflation in the US. Clearly this is a very precarious situation. I believe it comes down to how much faith OPEC and the rest of the world has in the US economy, US consumer, and the US dollar. Any slippage of confidence in these three entities - which are inter-related - and then who knows? By the way, the prediction of a drop in oil production, begining in 1970, was for the US only and not the entire world. The prediction was made in the late 50's by a US geologist by the name of Hubbert. At the time the US produced more than half of the world's oil, so any drop in US oil production would have and did have a great influence on oil prices after 1970. A number of articles written after 2000 discussed the 'Hubbert Curve' relative to world oil production in our present time. Some stated world oil production would peak around 2005 and decline from that point onward. Other articles were less specific, predicting peak production to occur in the 2005 to 2010 period. At present consumption levels, it was predicted the world would run out of its oil reserves (even the reserves yet to be tapped) within 40 years. If consumption increases due to increased demand by growing economies like China and India, then we have less time to find an alternative. Recent articles in the New York Times discussed production problems in the largest Saudi oil fields as well as some neighboring oil producers. Of course, steeply rising oil prices will reduce consumption so it's impossible to predict when the last drop will be drawn from the last oil well. We only know that this is an extremely serious problem for a world who's energy dependency is based on oil. Getting back to the issue in your post - we've gotten very used to having it our way so long with regard to our currency, it has created an allusion of invincibility. But nothing here on earth remains invicible forever.

Subject: Re: Still Oil for dollars? From: The Dude To: Pete Weis Date Posted: Mon, May 10, 2004 at 20:16:52 (EDT) Email Address: nma@hotmail.com Message: 'I believe it comes down to how much faith OPEC and the rest of the world has in the US economy, US consumer, and the US dollar. Any slippage of confidence in these three entities - which are inter-related - and then who knows?' Dear Pete, You are wise, terribly wise!

Subject: Econ Textbok delayed From: Hiroo yamagata To: All Date Posted: Fri, May 07, 2004 at 08:01:27 (EDT) Email Address: hiyori13@alum.mit.edu Message: It seems that Krugman&Wells textbook has been delayed significantly. It was supposed to be Dec. 2003, slided into March 2004, but now, it's Autumun 2005. 2005? That's a typo, right? He means 2004, no? Wow, did he decide to redo the whole thing at the last minute? I had the impression that the whole thing was virtually done! www.worthpublishers.com/krugmanwellsnew/

Subject: War on terrorism From: Bobby To: All Date Posted: Fri, May 07, 2004 at 00:05:52 (EDT) Email Address: robert@pkarchive.org Message: I posted this on Atrios earlier, and I wanted to repost it here since I spent a little while on it and hoped for further mileage from it. Its points are I think fairly obvious, but I think our public discussion of what a war on terror involves has been very unfocused, and the administration's public statements about our fundamental strategy in it are ad hoc and muddled. Anyway, here you go: The war on terror is not a war like WWII or Vietnam. If it is a war, it is one in the sense that the Cold War was a war (this analogy is helpful since the claim that dissent 'helps the enemy' has far less credibility in a Cold War-like war, as opposed to a WWII-like war). In the long run, in order to beat Islamist terrorism, we have to win over the hearts and minds of people in the Muslim world, and we're going in the exact opposite direction now. 'Taking the fight to the enemy,' which is more of a slogan than a thought out strategy can't be our only line of defense as it is with Bush. It definitely should not be carried out in the fashion Bush has done, which creates terrorists and support for them faster than we can kill them. We need in general at least three lines of defense, almost all of which are being ignored. Foremost we need a program at home to detect and prevent attacks on large populations within our country, especially in urban centers like NYC. This should be our last line of defense. In general, this would involve taking our scarce resources out of Iraq for now and put them into port security, repurchase of nuclear fuels overseas (including not only former Soviet republics but also India and Pakistan and maybe Iran), new technologies to detect chemical and nuclear weapons, and metal detectors in crowded areas, chemical detectors, and other securty measures to defend us at home, especially in our cities, and especially New York. Then our second to last line of defense should be port and border security (for WMD and terrorist-detecting purposes, not anti-immigration ones). Our first line of defense should involve espionage, cooperation, cooption, and infiltration of foreign intelligence, and covert operations in foreign countries to detect terrorist, plots, and WMDs that can be used against us. This requires cooperation with Muslim countries, which includes the public support from their general populations for our actions. This is made far more difficult if the populations of these countries hate us because of unnecessary things that offend them like our Iraq venture. This first line of defense is really the only sense in which we should be 'taking the fight to the enemy,' whereas occupation, like in Iraq, is an extreme measure for extraordinary circumstances. Iraq really does not apply to this though Afghanistan was necessary. Ironically, this first line of defense will likely take the longest to create, and it is made longer by our current occupation of Iraq. Port security and protection of concentrated populations is difficult, but at least something acceptable can be put in more quickly if we spend more money. Improvements in such a system can begin sooner if we make this system more quickly. Sadly Bush is wasting our resources on Iraq and highly regressive tax cuts. By pissing off the Middle East right now he is making an attack here at home more likely, and they have far more adherents willing to participate in it due to our actions in Iraq. But compared to what we need, we have very little in place to defend us due to Bush's neglect. http://www.pkarchive.org www.pkarchive.org

Subject: Re: War on terrorism From: hume an To: Bobby Date Posted: Fri, May 07, 2004 at 11:34:07 (EDT) Email Address: hume_an@yahoo.com Message: Bobby: I totally agree with you that we need to work on the hearts and minds of the people of the Muslim world. I also believe the measures you propose at home are excellent because they are targeted and address the U.S.'s vulnerabilities, and as such, have the ancillary benefit of being cost-effective. I think a couple of concrete action the U.S. could do to win hearts and minds include: Firing Don Rumsfield - the U.S. promised to usher in liberation and humanity into Iraq. The pictures of U.S. soldiers torturing Iraqi prisoners completely undermine that promise. Firing Donald Rumsfield, the embodiment of the U.S. military, would send a signal that such egregious violations of human rights will not be tolerated. Speed up the rebuilding of Iraq. I think moderates are being converted into radicals because the streets in Iraq are still dangerous and flooded with sewage. The people of Iraq hear American promises of a better life, but they haven't seen the evidence. Long-term action - significant ramping up of foreign aid to developing countries. There aren't too many terrorists in wealthy, well-educated, secular countries. Desperation, more than anything else, leads to terrorism. How to snuff out terrorism? Work on removing the conditions that foster desperation.

Subject: Well Argued From: Jennifer To: hume an Date Posted: Fri, May 07, 2004 at 14:01:51 (EDT) Email Address: Not Provided Message: Thanks!

Subject: Re: Well Argued From: Tyler To: Jennifer Date Posted: Thurs, May 13, 2004 at 18:56:40 (EDT) Email Address: halltr@slu.edu Message: This is my favorite this week from Letters in the Economist (thought you might like it): 'SIR – You call for the resignation of Mr Rumsfeld yet suggest that the American electorate should pass judgment on Mr Bush. You called for Bill Clinton's resignation when the Lewinsky scandal broke. Why the sudden reverence for elections? Jonathan Aurthur Santa Monica, California'

Subject: Looking for a little Clarity From: Mik To: All Date Posted: Thurs, May 06, 2004 at 17:35:09 (EDT) Email Address: Not Provided Message: I have just read P Krugman's latest story and am very impressed. Krugman has just highlighted another major mess-up by the current administration. Now I'd like to ask if you guys can help me in summarising the key mistakes undertaken to date by the current administration related to Iraq: 1. The original reasoning to go into Iraq was linked ot WMD. 2. Failure to get UN backing 3. Not having enough troops on the ground to manage the peace straight after the invasion. 4. The first attempt to place puppets into power. 5. Now the privatisation of Iraq's oil supply and infrastructure to US companies, acting like an occupying ocuntry and not a liberator. Am I off the mark here?

Subject: Re: Looking for a little Clarity From: byron To: Mik Date Posted: Thurs, May 06, 2004 at 22:39:49 (EDT) Email Address: bconstl@juno.com Message: No, you are right on the mark. The whole purpose for this war was for oil. Cheney was dividing up Iraq's oil fields before the war began. Sadam couldn't hold a candle to The Bush Admin when it comes to lying and deception. They are masters of the art.

Subject: Re: Looking for a little Clarity From: La Gringa To: Mik Date Posted: Thurs, May 06, 2004 at 19:26:46 (EDT) Email Address: nma@hotmail.com Message: ...if you guys and gals...please

Subject: Does Information Technology Matter From: Emma To: All Date Posted: Thurs, May 06, 2004 at 14:32:50 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/05/06/business/06scene.html How Much Does Information Technology Matter? By HAL R. VARIAN IN May 2003, The Harvard Business Review published an article by a former editor, Nicholas G. Carr, titled 'IT Doesn't Matter.' The reaction from industry chief executives was immediate. 'Hogwash!' said Steven A. Ballmer of Microsoft. 'Dead wrong,' said Carleton S. Fiorina of Hewlett-Packard. Craig R. Barrett of Intel responded forcefully, 'IT matters a whole lot.' Now, a year later, Mr. Carr has replied to his critics with a new book, 'Does IT Matter?' (Harvard Business School Press). It's a good book. Mr. Carr lays out the simple truths of the economics of information technology in a lucid way, with cogent examples and clear analysis. His basic point is straightforward. At one time, information technology was so expensive and so difficult to manage that companies could make large amounts of money simply by being able to make systems work. (Think I.B.M.) Companies that lacked the skills to manage information technology effectively suffered compared with competitors that had mastered those skills. But over the years, as information technology has become cheaper and more manageable, this source of competitive advantage has been reduced and perhaps eliminated. Hiring knowledgeable employees is much easier than it used to be, and the tools to manage this technology are far more powerful than they were a few short years ago. Nowadays anybody can set up a Web server, or an accounting system, or an inventory management system. The ability to manage technology effectively is no longer the barrier to entry it once was. Hence, it no longer serves as a source of competitive advantage. So it is with every new technology. When electric motors became small enough to drive individual machine tools, it became possible to set up assembly lines and greatly improve productivity. Henry Ford and his colleagues created the assembly line and other techniques of mass production in the formative days of the automobile industry and enjoyed a significant advantage over their competitors for nearly 20 years. But by the end of the 1920's, all automobiles were made using the techniques Ford pioneered, and his competitive advantage disappeared. The playing field tipped toward General Motors, which had developed more flexible procedures that allowed it to offer frequent updates in model styles. Knowing how to run an assembly line no longer conferred a competitive advantage, because everyone knew how to do it. According to Mr. Carr, knowing how to use information technology is like knowing how to run an assembly line. It is a utility now, like telephone service or electricity. Asking whether information technology matters is like asking whether electricity matters. In one sense it certainly does - without electricity, commerce would grind to a halt. But skill in the management of electricity isn't particularly useful to most companies, since electricity is now so cheap and so commonplace that it can't really be a source of competitive advantage to anyone. Profit comes from scarcity. Companies that can provide products or services that others can't provide can charge premium prices. As more and more companies are able to supply something, competition works its magic and forces prices down. 'Complexity management' can still serve as a barrier to entry in some industries. Making integrated circuits is fiendishly complex, and Mr. Barrett of Intel is certainly right when he says information technology is critical in his industry. But as he would readily agree, it is not the whole story. A potential competitor could go out and buy the same technology that Intel uses and still fail miserably in trying to compete with it. Even Intel doesn't know quite why some chip manufacturing processes work better than others. In the late 1990's it instituted a program called 'Copy EXACTLY!,' which required that new plants use equipment and procedures replicated from existing plants, right down to the color of paint on the wall....

Subject: Re: Does Information Technology Matter From: Mik To: Emma Date Posted: Thurs, May 06, 2004 at 17:10:17 (EDT) Email Address: Not Provided Message: Emma, I have a question for you on this topic. Do you not think our IT technology has actually surpassed our real needs? In the company where I work, we basically use Excel and MS Word. But the functions we use in these software packages doesn't even reach the capacity that Word and Excel 95 could already offer. We are well passed Word and Excel 2000 in our software upgrades(I have no idea what we now use) but still we are not doing anything that we couldn't do say 10 years ago. Amazing - 10 years ago. I have always been irritated when we had to upgrade our software for no reason that I could see justified the cost. And we did this over and over again. Everytime we upgraded our software there would be one or other problem causing down time and some training. But once the system is up and running I would ask, now that we have spent all this money and undergone the down town time to get the the new software up and running; what can we now do that we could not do before? To date no one can answer that question, yet everyone around me continues to pursue bigger better hardware to run software that gives us no extra speed of office operation, no extra features to make life simpler and no features that allow us to be better at what we do. I have recently started a business (on the sideline). From the outset I was determined to have a 'high-tech' system that is totally paperless. I send and receive faxes on the computer, I do most of my work by e-mail. I operate in 3 different countries (over 9 time zones), send and receive all my invoices by e-mail and store everything on computer with, I'm glad to say, no paper, no printer... but get this I run this business with an old 486DX laptop computer and Windows 95 with Word and Excel 95.

Subject: Re: Does Information Technology Matter From: Jerry To: Mik Date Posted: Tues, May 11, 2004 at 10:30:46 (EDT) Email Address: Not Provided Message: One thing I can add...I work for a government archive and we are certainly pushing the IT envelope. We are handling so much data at such a high speed that we are years behind what we 'need' even with the latest and greatest technology. I think IT matters most in terms of scale.

Subject: Re: Does Information Technology Matter From: Mik To: Jerry Date Posted: Wed, May 12, 2004 at 17:54:11 (EDT) Email Address: Not Provided Message: point taken. thanks

Subject: Scarce Jobs IN India From: Emma To: All Date Posted: Thurs, May 06, 2004 at 13:58:05 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/05/06/international/asia/06indi.html?hp Low-Tech or High, Jobs Are Scarce in India's Boom By AMY WALDMAN HYDERABAD, India - Two years ago, with the employment market in his drought-stricken rural district as dry as the earth, Bhaliya made his way to this high-tech capital in southern India and found salvation in a low-tech straw broom. He became a city street sweeper, earning 1,800 rupees a month, or roughly $40. The pay was so low, and his 1,000 rupee-rent for one room in this inflationary city so high, that his wife became a sweeper too, leaving three toddlers in neighbors' care. Each day since, they have bent to clear errant flotsam from the curbs, and straightened to see the immaculate imagery of the new India: hundreds of billboards advertising cars, mobile phones and Louis Phillipe shirts. The temptations are forever out of reach, yet Mr. Bhaliya, 25, counts himself lucky. 'We have to work to live,' he said, knowing better than to ask for more. India's economy is spawning a growing middle class, a host of world-class companies, a booming stock market and a new image for this nation of more than one billion people. But those very reforms and conditions are also reducing the prospects of some of its citizens. India may be 'shining,' in the description of a controversial and expensive government publicity campaign, but it is also struggling to generate jobs. That employment problem could prove to be the Achilles' heel of the ruling National Democratic Alliance, led by the Bharatiya Janata Party, which is seeking re-election on the strength of an economy that grew at a breathless 10.4 percent in the first quarter of this year. Three weeks of voting in this vast country conclude on May 10. The public sector, once a stalwart of security, has lost some 4.5 million jobs in the past six years. In this state, Andhra Pradesh, government recruitment has been frozen, and the government has cottoned to private sector practicalities. Street sweeping, once a government job that paid triple what it does now and came with medical care, a pension, annual leave and job security, has been outsourced to private contractors, who offer none of that. The streets of Hyderabad have never been cleaner, the city's budget never leaner, and for workers, the insecurity and indigence never greater. On a Friday afternoon, Mr. Bhaliya, who uses only one name, was working two hours past his shift's end - for no overtime pay - to ensure the chief minister a dustfree view when he drove past. With greater efficiencies, global competition, cheap capital and new technology, private companies are doing more with fewer employees....

Subject: re.jobs in stock market in hyderabad From: s.vasundhara To: Emma Date Posted: Wed, May 19, 2004 at 06:58:14 (EDT) Email Address: ammuchinnu2004@yahoo.com Message: http://www.nytimes.com/2004/05/06/international/asia/06indi.html?hp Low-Tech or High, Jobs Are Scarce in India's Boom By AMY WALDMAN HYDERABAD, India - Two years ago, with the employment market in his drought-stricken rural district as dry as the earth, Bhaliya made his way to this high-tech capital in southern India and found salvation in a low-tech straw broom. He became a city street sweeper, earning 1,800 rupees a month, or roughly $40. The pay was so low, and his 1,000 rupee-rent for one room in this inflationary city so high, that his wife became a sweeper too, leaving three toddlers in neighbors' care. Each day since, they have bent to clear errant flotsam from the curbs, and straightened to see the immaculate imagery of the new India: hundreds of billboards advertising cars, mobile phones and Louis Phillipe shirts. The temptations are forever out of reach, yet Mr. Bhaliya, 25, counts himself lucky. 'We have to work to live,' he said, knowing better than to ask for more. India's economy is spawning a growing middle class, a host of world-class companies, a booming stock market and a new image for this nation of more than one billion people. But those very reforms and conditions are also reducing the prospects of some of its citizens. India may be 'shining,' in the description of a controversial and expensive government publicity campaign, but it is also struggling to generate jobs. That employment problem could prove to be the Achilles' heel of the ruling National Democratic Alliance, led by the Bharatiya Janata Party, which is seeking re-election on the strength of an economy that grew at a breathless 10.4 percent in the first quarter of this year. Three weeks of voting in this vast country conclude on May 10. The public sector, once a stalwart of security, has lost some 4.5 million jobs in the past six years. In this state, Andhra Pradesh, government recruitment has been frozen, and the government has cottoned to private sector practicalities. Street sweeping, once a government job that paid triple what it does now and came with medical care, a pension, annual leave and job security, has been outsourced to private contractors, who offer none of that. The streets of Hyderabad have never been cleaner, the city's budget never leaner, and for workers, the insecurity and indigence never greater. On a Friday afternoon, Mr. Bhaliya, who uses only one name, was working two hours past his shift's end - for no overtime pay - to ensure the chief minister a dustfree view when he drove past. With greater efficiencies, global competition, cheap capital and new technology, private companies are doing more with fewer employees.... ---

Subject: Luskin Ultra Bullish From: Kosh To: All Date Posted: Thurs, May 06, 2004 at 12:12:56 (EDT) Email Address: jrgallag@earthlink.net Message: Well, the long-dreaded meeting of the Federal Open Market Committee meeting has come and gone. For months the Fed had pledged to keep rates low for a 'considerable period.' Then that was softened to being 'patient.' And now there's a new word -- rates will be raised at a 'measured' pace. For the bond market, these words all amount to the same awful thing. They are all polite synonyms for 'inevitable.' That's right -- it is strictly inevitable that the Fed will raise rates and burst the bond bubble. But for stocks, this is an opportunity. Since the equity market top in 2000, bonds have outperformed stocks spectacularly. Now it's time for all that to reverse. Rising rates will clock bonds, which have been unnaturally supported by unnaturally low rates. But the economy and corporate earnings are surging -- and rate hikes at a 'measured' pace aren't going to put the least dent in that. What they're going to do instead is start to rein in incipient inflation. Put it all together, and it's going to be a perfectly fine time to be long stocks. That's why I've been adding to my portfolio's position in the Rydex Velocity 100 Fund (RYVYX) -- the mutual fund that uses leverage to deliver twice the return of the Nasdaq 100 Index. I've gotten lots of e-mails from readers and several messages on the Strategy Lab discussion boards warning me not to take that kind of risk. But I don't see it as all that risky. I've seen the decline of the last couple weeks as a classic 'buyable dip.' And even with all the Rydex Velocity 100 Fund buys, my portfolio is still effectively less than 100% exposed to the stock market. Frankly, I'm more worried about missing out on the upside than I am about the downside. http://moneycentral.msn.com/content/Stratlabs/Round10/P82865.asp

Subject: Re: Luskin Ultra Bullish From: Pete Weis To: Kosh Date Posted: Thurs, May 06, 2004 at 20:27:50 (EDT) Email Address: Not Provided Message: If he's really doing what he says he's doing, he is sacrificing himself on the alter of stupidity. Suppose those who have had a major dislike of Mr. Luskin will probably get to relish his coming financial difficulties. He's definitely the 'greater fool' Mik was talking about in an earlier post. He and his followers (if they follow his advice) are just the ticket for those insiders still looking to offload.

Subject: Re: Luskin Ultra Bullish From: Kosh To: Pete Weis Date Posted: Fri, May 07, 2004 at 10:28:27 (EDT) Email Address: jrgallag@earthlink.net Message:

Subject: Stocks and Bonds From: Terri To: Kosh Date Posted: Thurs, May 06, 2004 at 15:50:03 (EDT) Email Address: Not Provided Message: So the question is whether rising rates will still allow earnings to grow fast enough to generate stock gains or at least allow the market to trade in place.....

Subject: Poor Health Care! From: Emma To: All Date Posted: Wed, May 05, 2004 at 15:14:13 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/05/05/health/05CARE.html Study Finds Widespread Problem of Inadequate Health Care By LAWRENCE K. ALTMAN Americans get substandard care for their ailments about half the time, even if they live near a major teaching hospital, the first comprehensive study of health care provided in metropolitan areas has found. The inadequate treatment leads to 'thousands of needless deaths each year,' said Dr. Elizabeth A. McGlynn, a researcher at the RAND Corporation and an author of the study, being published today in the journal Health Affairs. Only a fundamental redesign of the health system will improve the situation, Dr. McGlynn said, adding, 'It's a tremendous cultural shift we're asking for.' The study's conclusions were based chiefly on a review of the medical records of nearly 7,000 people in 12 metropolitan areas, including Newark, Miami and Orange County, Calif. On average, the authors found, patients received substandard care, as defined by leading medical groups, 50 percent to 60 percent of the time. There was little variation among the metropolitan areas, randomly selected from 60 with populations of at least 200,000. The areas included cities and their suburbs. Dr. McGlynn said the study's definitions of adequate care were developed not only from the recommendations published by specialty medical groups but also from four panels of doctors who practiced in a variety of settings. The recommendations reflected what was considered standard at the time the care in the study was delivered, from 1996 to 2000. The team used the standards to measure average care for adults in an entire community, not the care delivered by specific hospitals, health care plans or doctors. The study did not make comparisons with earlier years or other countries. 'Quality in most areas of care was uniformly poor,' said the authors of the study, which was financed by the Robert Wood Johnson Foundation. And Dr. McGlynn added that for the $1.4 trillion a year the United States spends on health care, it was getting 'fairly dismal results.' In a telephone interview with reporters, she noted that doctors and hospitals were paid the same whether they provided 'very good care or not-so-good care.' ...

Subject: No Medical Insurance From: Emma To: Emma Date Posted: Wed, May 05, 2004 at 15:15:42 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/05/05/national/05HEAL.html Texas Leads Nation in Percentage of Uninsured Workers By ROBIN TONER WASHINGTON — Texas leads the nation in the percentage of working people who have no health insurance, but the lack of coverage is a pervasive problem for workers in nearly every state, according to a new study for the Robert Wood Johnson Foundation. The study also found that being uninsured has clear health consequences. People without coverage were less likely to get basic preventive care, like mammograms; less likely to have a personal physician; and more likely to rate their own health as only poor or fair. Analysts said the study highlighted deep problems in a health care system that still assumes most people will get their coverage through their employers. The shift of many workers from manufacturing to lower-paid service-sector jobs, and from bigger employers to smaller businesses, means this assumption is increasingly out of date, these analysts said. Many small businesses simply cannot afford to provide their workers with health insurance, which is now approaching an average cost of $9,000 a year for each employee, according to Kate Sullivan, director of health care policy at the United States Chamber of Commerce. The study found that Texas, where 27 percent of working adults were uninsured, had the highest rate among the six states where at least one in five workers lacked coverage. The others were Louisiana, 23 percent; Mississippi and New Mexico, 22 percent each; and Oklahoma and Nevada, 21 percent each. States with the lowest uninsured rates among workers were Minnesota and Hawaii, 7 percent each; Maryland, 8 percent; and Iowa, 9 percent. Officials in Texas said that the higher rate in their state probably reflected its labor force — more likely to work for small businesses, less likely to be unionized. They also said that the state was working on the problem. The new study was sponsored by a broad nonpartisan coalition of labor, consumer and business groups, including the chamber, as part of 'Cover the Uninsured Week,' a nationwide series of events to be held May 10 through 16 to draw attention to the issue....

Subject: Re: No Medical Insurance From: Nat To: Emma Date Posted: Fri, May 07, 2004 at 13:04:30 (EDT) Email Address: Not Provided Message: Yeah, they're working on it here in Texas. And it will be fixed when monkeys fly out of all our butts. These figures, although disturbing, are never presented in the proper context. If you are working poor, the percentage is very much greater than 27%. If your wage is calculated by the hour the odds are very high that you do not have health insurance. And the figures never take into account undocumented workers who never, ever have insurance since they are outside that world. And Texas has a few of those, I hear. And, as for our so-called safety net: you can get Medicaid if you are a poor pregnant woman or eligible for SSI (i.e. you are an aged or disabled citizen with low income.) Only about 88k adults get TANF (and hence Medicaid) in Texas: for a parent or caretaker to be eligible for TANF in Texas the family income has to be low enough to meet Texas's recognizeable needs limit of $188 a month for a family of 3. The Medically Needy spend down program for adults was cut last year in the budget debacle. The MN limit for a family of 3 is $206 for coverage. Both TANF and MN have a $2000 limit on assets. So, the working poor are not only unlikely to have insurance, the so-called safety net barely exists for adults in Texas at the state level. The real medical safety net for those without insurance are public sector hospitals. These might be a county, city or hospital district entity, but each of these is ultimately supported by local tax payers. When national and state politicos say they are working on the problem, that really means they are trying to figure out how to pass it on to someone else.

Subject: A look at the likely replacements for Greenspan From: El Gringo To: All Date Posted: Tues, May 04, 2004 at 20:09:15 (EDT) Email Address: nma@hotmail.com Message: 'Robert Rubin, 63. Widely respected for his confident handling of crises as economic adviser and Treasury secretary in the Clinton administration, Rubin, now chairman of the executive committee at Citigroup, is often mentioned as a Greenspan successor. Rubin did postgraduate work in economics but has no Ph.D. ? not much of a drawback, given his practical market experience. A bigger obstacle is that he's a Democrat, which keeps him off the A-list in a Bush administration. But the most important reason Rubin will probably never be Fed chairman is that he doesn't seem to want the post. Friends say he has made little secret of his lack of interest in what he describes as a somewhat mechanistic and excruciatingly detailed job.' My opinion is:http://www.pkarchive.org/column/8600.html

Subject: What if? From: Pete Weis To: El Gringo Date Posted: Wed, May 05, 2004 at 20:05:13 (EDT) Email Address: Not Provided Message: El Gringo, here's a 'what if'. Suppose Greenspan retires before November. Who would Bush nominate? Bernanke?

Subject: Shades of PK From: emma To: Pete Weis Date Posted: Thurs, May 06, 2004 at 13:52:04 (EDT) Email Address: Not Provided Message: The guess is a Republican banker or economist for Fed Chief, but I do not expect Greenspan to leave soon. .... Greenspan Says Soaring Budget Deficits Are Long-Term Threat By AP America's soaring federal budget deficits represent a major obstacle to the country's long-term economic stability, the Federal Reserve chairman warned today.

Subject: Re: Shades of PK From: Pete Weis To: emma Date Posted: Thurs, May 06, 2004 at 20:04:03 (EDT) Email Address: Not Provided Message: I believe Greenspan's term runs out this June and he would need to be reappointed? Right now the upcoming elections look close and Iraq is not going well. After the President, the Fed Chairman job comes with the most power. Some might argue, since the Chairman's term is so much longer and he has the greatest power over the economy of any individual, that his job, in some ways, is more important. You have to wonder whether those who surround Bush, as well as his wealthiest supporters, would want to risk having the Democrats pick the next Fed Chairman. However, stirring things up by replacing Greenspan might be risky for the markets. Yet, if the markets have already begun to tank in earnest by the middle of June, then we might see the Republicans make their move. Maybe I'm way off base here, but I wouldn't be surprised to see Greenspan announce his retirement and a new Fed Chairman nominated this summer. Of course this is just speculation, but there are some clues to suggest Greenspan's replacement will be Bernanke.

Subject: Re: Shades of PK From: El Gringo To: Pete Weis Date Posted: Thurs, May 06, 2004 at 20:34:44 (EDT) Email Address: nma@hotmail.com Message: 'After the President, the Fed Chairman job comes with the most power.', are you sure?,2nd, '...then we might see the Republicans make their move.' Move or deal?

Subject: Re: Shades of PK From: Pete Weis To: El Gringo Date Posted: Fri, May 07, 2004 at 20:11:55 (EDT) Email Address: Not Provided Message: Some have suggested this administration would want to make a 'deal' with Greenspan to leave the Fed rate where it is until after the election in return for his reappointment. But how confident are Bush's financial backers that he will prevail in November? Bush will do what he's instructed to do. The new Fed Chairman, whether he's put in place in 2004 or in a couple of years down the road (Greenspan is getting up there in age)will obviously wield a lot of power with regard to future economic policy. If you look at the massive redistribution of wealth, upward, during the last twenty years which has been greatly enhanced by the easy monetary policies of our present Fed Chairman, you can see the importance those on the receiving end of this good fortune would put on the selection of our next Chairman. Greenspan may not be so anxious to stick around and the end of his present term gives him an excuse to step down. IMO there is some serious economic pain ahead and Greenspan knows it. He's managed to hold off the inevitable by reducing rates to a greater extent than ever in history, but that is now at an end. He showed desparation in his recent appearance before Congress when he suggested home buyers and owners get into ARM's when he knew rates were headed upward. I'm not sure Greenspan wants to stick around for the big 'squeeze' - caught between rising inflation, rising interest rates, rising oil prices and falling consumption due to the reverse wealth affect of falling stock and real estate markets. He's got much of the responsibility for the box he finds himself in - maybe the only way he gets out is to retire. Unfortunately the rest of us are left with the mess.

Subject: Re: Shades of PK From: emma To: emma Date Posted: Thurs, May 06, 2004 at 14:34:11 (EDT) Email Address: Not Provided Message: Suddenly Alan Greenspan is warning about deficits, but that was PK these last 3 years....

Subject: Brazil and Soybeans From: Emma To: All Date Posted: Tues, May 04, 2004 at 16:27:11 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/05/04/business/worldbusiness/04pedro.html Brazil's Road to Victory Over U.S. Cotton By ELIZABETH BECKER and TODD BENSON It began with Brazil's soybean farmers. Pedro de Camargo Neto, then a top official of the Brazilian Rural Society, Brazil's most influential agriculture lobby, kept hearing complaints in the late 1990's from farmers that, just as they were starting to turn a profit with their soybean exports, they were getting clobbered by lower-priced American soybeans that were heavily subsidized with taxpayers' money. 'Something was wrong here,'' he said in a telephone interview. 'I didn't understand how this could be happening.'' After looking closely at the subsidies for the richest American agribusinesses and their impact on Brazilian farmers, Mr. Camargo - who was Brazil's deputy agriculture minister at the time - began a campaign in 2001 to sue the United States at the World Trade Organization. Last week, the W.T.O. finally issued a preliminary ruling favoring Brazil and two African nations over the United States in the first case brought against a developed nation's domestic subsidies. The ruling concerned cotton, not soybeans, and Mr. Camargo is no longer in government, but he could not be more thrilled with the outcome. It was not an easy battle for Mr. Camargo, who faced political obstacles at almost every turn. A cattle rancher with a master's degree in engineering from the Massachusetts Institute of Technology, Mr. Camargo thought he had understood the logic of globalization and liberalized trade. He had been an adviser for Brazil during global trade negotiations in the Uruguay round. The premise was that developing countries like Brazil could better lift their farmers out of poverty through trade, and not aid. 'This is really a pioneering case,'' Mr. Camargo said after hearing about the preliminary outcome. 'I wish this would have happened while I was still in the government. It's nice to be recognized.'' The W.T.O. ruled that the multibillion-dollar subsidies to the biggest American cotton farmers and agribusinesses amounted to unfair trading practices. It could mean a breakthrough in a decade-long fight by the world's developing nations to force rich countries to end their $300 billion in subsidies and supports to the biggest farmers....

Subject: Debt and Interest Rates From: Emma To: All Date Posted: Tues, May 04, 2004 at 14:29:12 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/05/04/business/04debt.html As Household Debt Rises, New Risk in Higher Rates By EDMUND L. ANDREWS WASHINGTON - Philo Thompson is 28, single and - like many other Americans these days - not afraid to stretch when it comes to buying a house. A management consultant in Denver, Mr. Thompson bought a $500,000 townhouse last Friday in the suburb of North Cherry Creek. As many other first-time homeowners have done, Mr. Thompson put no money down. Instead, he took out a first mortgage for 80 percent of the purchase price and paid the rest by taking a home equity loan against the new house. To reduce his monthly payments, and to qualify for a big enough loan, he took out an adjustable rate mortgage that requires him to make only interest payments. People like Mr. Thompson could get squeezed if interest rates start to rise. With economic growth looking strong and hints of inflation in the air, Federal Reserve officials have made it clear that the era of extraordinarily cheap money is slowly drawing to a close. Yet Mr. Thompson betrays no worries. 'I'm too young to be scared,' he said last week, betting that both the value of the house and his income will keep rising. If the bet fails, he said, it will not be the end of the world, adding: 'There is a difference between being poor and being broke. Being broke is more of a temporary condition. Donald Trump has been broke a couple of times.' Mr. Thompson is not alone in such thinking. After a three-year period when the Federal Reserve cut interest rates to their lowest level since 1958, Americans have become far more willing to load up on debt and banks have become far more willing to let them. Household debt climbed at twice the pace of household income from the beginning of 2000 through 2003, according to data at the Federal Reserve. Enticed by low interest rates, Americans took on $2.3 trillion in new mortgage debt during that period - an increase of nearly 50 percent. Consumer credit, from zero-interest auto loans to the much more expensive debt on credit cards, climbed 33 percent, rising to $2 trillion in 2003 from $1.5 trillion in 2000. Alan Greenspan, the Federal Reserve chairman, has repeatedly argued in recent months that rising household debt poses few problems. Fed officials note that the financial position of American households is, in some respects, stronger than ever. The value of household assets - from resale prices of homes to the size of stock portfolios - has increased even faster than debt. Indeed, the collective net worth of American households is now higher than it was before the stock market bubble burst four years ago. And thanks in part to lower interest rates, monthly debt payments consume a smaller share of monthly income today than in late 2001....

Subject: Chinese Grain Production From: Emma To: All Date Posted: Mon, May 03, 2004 at 14:06:56 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/05/02/international/asia/02farm.html China Races to Reverse Falling Grain Production By JIM YARDLEY TANCETUN, China - This spring, as China's top leaders - alarmed by declining grain production - have exhorted farmers to plant more rice, wheat and corn, Meng Qingchang has tended his small field of ankle-high wheat, knowing he cannot possibly answer the government's call. How can he plant more with less land? He pointed with disgust on a recent day to a golf resort built for China's nouveaux riches over former wheat fields. It is part of a startling land grab in a nation where much of the terrain is unsuitable for agriculture. Since 2002, China has lost more than 13,500 square miles of farmland. Last year alone, more than 2 percent of all farmland was lost. 'If development continues like this, we will not be able to produce enough grain to feed the Chinese,' said Mr. Meng as he sprayed pesticide on his small remaining field. 'How can you feed so many people with less and less land?' The rapid urbanization of China is eating up the land of millions of farmers. Millions more have stopped growing grain because it is not profitable. The resulting shift in the Chinese countryside has left government leaders worried about China's ability to feed itself and prompted an emergency campaign to curb land losses and increase grain output. In an era of global trade, many economists find the political fixation on grain outdated. But it underscores the historic resonance of food security in China, where 30 million people died in the famines of the Great Leap Forward and where 1.3 billion people must be fed with only 7 percent of the world's arable land. 'The government is concerned that if the major grain-producing areas do not grow grains anymore, how much can China produce?' said Cheng Guoqiang, an agriculture expert at a leading government research institute. 'The government wants to stop the decline of grain production.' For years, Chinese policy has had a goal of 95 percent self-sufficiency for rice, wheat and corn. In the past decade, China has seen cycles of oversupply and decline, and no one considers the current problem to be a food crisis. But government leaders clearly see this year's harvest as critical in reversing China's declining production and proving that the nation can feed its growing population. China's production of rice, corn and wheat dropped to about 401 million tons in 2003, down 18 percent from the record 486 million tons in 1998, according to United States Department of Agriculture statistics. In that record year, China had a glut of grain and was a net exporter. Last year, China consumed 40 million more tons of grain than it produced. At the same time, China has been increasing its imports and tapping into grain reserves. It is already the leading buyer of American soybeans. This year, for the first time in five years, China will import wheat. The political ramifications clearly worry China's nondemocratic leadership, even if many economists say imports are logical in a global economy. 'This isn't only an economic issue,' said Robert Ash, a University of London economics professor with a specialty in Chinese agriculture. 'China in a general sense doesn't want to be dependent for such a fundamental good. But, really, China doesn't want to be dependent on the United States.' ...

Subject: Chinese Limits to Freedom From: Emma To: Emma Date Posted: Mon, May 03, 2004 at 15:53:10 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/05/03/international/asia/03chin.html Let Freedom Ring? Not So Fast. China's Still China. By JOSEPH KAHN BEIJING - During the Cultural Revolution, China's propaganda department often made hyperbolic charges against intellectuals - capitalist roaders, enemies of the people - accused of betraying Mao Zedong. So when Jiao Guobiao, a journalism professor at Beijing University, was searching for words to describe China's still all-powerful censors and standard-setters more than 30 years later, he borrowed from its lexicon of vitriol. The department is spiteful like the Nazis, he wrote in a recent essay. It thinks itself infallible like the pope. In the 1950's it covered up the starvation of millions of people. Today, he charged, it lies about SARS. 'Their censorship orders are totally groundless, absolutely arbitrary, at odds with the basic standards of civilization, and as counter to scientific common sense as witches and wizardry,' he wrote in the article - which has been widely circulated by Internet in Beijing despite, not unpredictably, being banned by the Communist Party's propaganda department. Such explicit outbursts of dissent are still rare in China. But Mr. Jiao is not alone in expressing frustration that, even after a long-awaited transition to a new generation of leaders some 18 months ago, China's political scene remains stultifying. Intellectuals, Mr. Jiao said, are 'supposed to act like children who never talk back to their parents.' The leadership team headed by the president and party chief Hu Jintao that many hoped would tolerate more open debate has instead slapped new restrictions on free speech and the press that some say remind them of the repressive years after the 1989 Tiananmen Square crackdown. State security agents have been scouring the Internet and pressing charges against people who use it to distribute information or express opinions deemed unfavorable. The authorities harassed scholars who took part in a debate about constitutional changes, disappointing some who believed that Mr. Hu had once invited discussion about how to strengthen the rule of law. Last month, Beijing decided against allowing universal suffrage in Hong Kong, even though many in the former British colony felt they were promised that right when China assumed sovereignty in 1997. The political environment may reflect a seasonal shift to tight controls during the spring Communist Party meetings and a state of high alert ahead of the 15th anniversary of the June 4, 1989, crackdown. But some see worrying signs that the leadership remains instinctively hostile to political discussion and more independent news media. Scholars say they now suspect that Mr. Hu is not as forward-looking as they had once hoped, and at any rate he must still defer to Jiang Zemin, the military chief, who handed the formal reins of power to Mr. Hu in late 2002 but by many accounts remains a domineering influence....

Subject: Krugman's Korean Eds. From: Soonmyung Hong To: All Date Posted: Sat, May 01, 2004 at 23:50:19 (EDT) Email Address: sonnet@teatime.org Message: you can see book image although it is written korean. Great Unraveling: http://www.yes24.com/home/pd.asp?SID=xxGMjqtfSGa*LtHNq8i70txdQAQGL7Hp40kTpjWqLkY4U8VIdVoHD7cva&AK=420876&TABID=0 The Accidental Theorist: http://www.yes24.com/home/pd.asp?SID=xxGMjqtfSGa*LtHNq8i70txdQAQGL7Hp40kTpjWqLkY4U8VIdVoHD7cva&AK=299576&TABID=0 Peddling Prosperity: http://www.yes24.com/home/pd.asp?SID=xxGMjqtfSGa*LtHNq8i70txdQAQGL7Hp40kTpjWqLkY4U8VIdVoHD7cva&AK=35978&TABID=0 The Self-Organizing Economy: http://www.yes24.com/home/pd.asp?SID=xxGMjqtfSGa*LtHNq8i70txdQAQGL7Hp40kTpjWqLkY4U8VIdVoHD7cva&AK=314487&TABID=0 The Return of Depression Economics: http://www.yes24.com/home/pd.asp?SID=xxGMjqtfSGa*LtHNq8i70txdQAQGL7Hp40kTpjWqLkY4U8VIdVoHD7cva&AK=71417&TABID=0 http://www.yes24.com/home/pd.asp?SID=xxGMjqtfSGa*LtHNq8i70txdQAQGL7Hp40kTpjWqLkY4U8VIdVoHD7cva&AK=420876&TABID=0

Subject: Thailand Utility Privatization From: Emma To: All Date Posted: Fri, Apr 30, 2004 at 17:19:38 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/04/30/business/worldbusiness/30egat.html General Strike Threatened Over Thai Utility Proposal By WAYNE ARNOLD SINGAPORE - After two months of daily protests, unions representing Thailand's public-sector employees plan to use a huge May Day rally to call for a general strike against plans by Prime Minister Thaksin Shinawatra to privatize part of the national electric utility, the Electricity Generating Authority of Thailand. With his public approval soaring along with the economy last year, Mr. Thaksin dusted off a decade-old plan to sell part of the authority, known as EGAT, on the stock market so that it could more easily finance new power plants to feed rapidly growing electricity demand. The partial privatization of EGAT stood to be Thailand's largest initial public offering ever, raising as much as $1.8 billion for 30 percent of the company and serving as the centerpiece of a wider effort to sell some 20 other state-owned enterprises. But Mr. Thaksin, who has been criticized for his autocratic 'C.E.O. style,' appears to have met a formidable adversary in EGAT's employees' union. Faced with relentless protests, Mr. Thaksin has delayed the sale indefinitely, though he insists it will still happen. Now, the unions are trying to force him to cancel the sale altogether, and some union members are already staging limited walkouts. 'We would like to demand that the government stop privatization in the energy sector,' said Somsak Kosaisuk, secretary general of the State Enterprises Labor Relations Confederation, whose 42 member unions represent 230,000 workers, slightly more than a third of the country's unionized workers. Union troubles are just part of a long list of problems that have put Mr. Thaksin, a telecommunications tycoon who swept to power in 2001 on a populist platform, on the defensive....

Subject: Re: Thailand Utility Privatization From: Mik To: Emma Date Posted: Mon, May 03, 2004 at 12:17:37 (EDT) Email Address: Not Provided Message: To Privatise or not to Privatise - that is the question.

Subject: And the Rich Get Smarter From: Emma To: All Date Posted: Fri, Apr 30, 2004 at 15:58:51 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/04/30/opinion/30KIRP.html And the Rich Get Smarter By DAVID L. KIRP BERKELEY, Calif. Yet another string of studies confirms what any high school senior or parent who has just weathered the college admissions mating dance already knew — it's a cutthroat competition where money matters more than ever. Teenagers from wealthy families are beating out middle- and working-class youngsters, both at top private colleges and flagship state universities whose historic mission of broad access is receding into memory. The trend means that 'smart poor kids,' as the educator Terry Hartle bluntly puts it, 'go to college at the same rate as stupid rich kids.' A lot of not-so-secret factors are at play in this market. In pursuit of competitive advantage, well-off parents spend thousands of dollars on test prep courses, college admission summer camps and 'dress for success' counseling. They are more adept than their less well-heeled rivals at working the system; that brings results, especially at prestigious universities. At the other end of the spectrum, the inequity is worsening as cash-starved state schools are forced to raise tuition — an average of 14 percent last year. For fall 2003, for example, community college fees in California rose to $18 a class hour from $11. Though that typically amounts to only about $100 a semester, enrollment was more than 100,000 below the state's projections. Why? Sticker shock scares away poorer students from even applying. The one bright spot is that academic leaders are now discussing this wealth gap. William Bowen, the former president of Princeton, made headlines when he assailed elite colleges — presumably including his own — as 'bastions of privilege' and urged putting 'a thumb on the scale' for poor students. Amherst's president, Anthony Marx, has made the same argument. Harvard's president, Lawrence Summers, announced that parents who earn less than $40,000 a year will no longer be asked to contribute financially to their offspring's education. That's a start, but much more is needed if such students are going to be a presence in Harvard Yard. Those who run universities bear considerable responsibility for creating these inequities — and not only in admissions. These trends are just the most visible sign of how much the market ethic has come to dominate higher education. To be sure, dollars have always greased the wheels of academe. What is new and troubling is the raw power that money exerts over all of higher education, including the emphasis on research that adds less to the storehouse of knowledge than to the institutional coffers, and the shift from liberal arts to the 'practical arts.' While competition has strengthened some colleges, embedded in the very idea of university are values the market does not honor: the belief in a community of scholars and not a confederacy of self-seekers; in the idea of openness and not ownership; and in the student as an acolyte whose preferences are to be formed, not a consumer whose preferences are to be satisfied....

Subject: Re: And the Rich Get Smarter From: Mik To: Emma Date Posted: Mon, May 03, 2004 at 12:46:52 (EDT) Email Address: Not Provided Message: Emma, Can you look out for articles on abuse of profits by educational institutions? I believe we are actually seeing a strong trend by universities to keep raising their rates well above inflation levels makes university fees slide further and further out of the affordability of the average people. This has a serious problem if you consider a person taking out a loan to cover tuition and finding that in a 'world job market' where more and more jobs are going to countries like China or India, this person may well not be able to find a job or a payment package that will pay back that loan. The biggest problem for me is the costs running a university. It appears that there is an abuse going on here and that university professors want to place their income salaries into the same category as high rolling bankers. BUT! this is my own impression and I could be wrong. So if you come across any more articles on this matter, please post them. Thanks

Subject: Smart people find a way From: Econochick To: Mik Date Posted: Mon, May 03, 2004 at 17:27:52 (EDT) Email Address: Not Provided Message: The issue isn't abuses but naturally rising costs. Mind that colleges and universities are like boarding schools and have much higher costs than your average public high school outside of the cost of education alone. University salaries are not out of control and don't need to be. As Paul G. Brown points out, professors are free to work as consultants, start businesses, etc. A position at a top university certainly helps the professor market him/herself. And even classics professors get consulting gigs. As for covering costs, economists have repeatedly concluded that a college education returns the cost of education hundreds of times over. Tuition has not risen enough to eliminate that. The jobs that are going to china to do not require expensive educations - I wouldn't lose sleep over that. Besides, having a college degree opens doors other than the ones directly related to your major. In addition, there are endless financial aid programs from private endowments to merit scholarships to income based programs. I was on the very low end of the economic scale when I went to college. I was in the lowest tax bracket and I got scholarships, took loans and worked full time to put myself through school (I went to an expensive school). Was it easy? NO. Was it worth it? A thousand times YES. But who said that life will be easy? Rising costs should not be another excuse to be lazy. And they don't mean that universities are cheating.

Subject: Re: Smart people find a way From: Paul G. Brown To: Econochick Date Posted: Mon, May 03, 2004 at 18:39:45 (EDT) Email Address: Not Provided Message: I've heard this argument before: that there are enough scholarships or financial support programs out there making it possible for anyone who is smart enough to get into a good school. While it is true that the possibility is there, that often isn't enough. People vary not only in their intellectual capacity but also in their personality, and their character. To make the leap from outsider to good-school-graduate you not only need to be bright enough, but you also need a degree of drive and self-confidence. Some people simply don't have these at the point in their lives when they are making these decisions. Put a bright but callow youth in a good school and they gain self-confidence because they excell. Why should we care about the fact that places at good schools are being taken up by those endowed with a small brain but a large trust fund? Because a policy that leads to this outcome falls far short of maximizing our collective human potential. I mean, would you rather see Paris Hilton at Stanford (she has the money and the moxie) or 'Tayshaw Green' (18 YO mother of one and unwilling validectorian of Compton High School)? Who is more likely to find a cure for cancer in ten years time? Making it unnecessary for kids of proven ability to have to struggle too hard (I ain't advocatin' open universities, y'all) would result in higher returns on the social and economic investment we make in education.

Subject: Re: Smart people find a way From: Econochick To: Paul G. Brown Date Posted: Tues, May 04, 2004 at 09:21:18 (EDT) Email Address: Not Provided Message: Paul, your point is well taken. I have repeatedly said that education is the best use of public funds that I can think of because the payoff is so enormous. However, the 'Paris Hiltons' are less likely to find a cure for cancer (or anything else) because they are less driven and have less at stake. Kids who take out loans and take part-time jobs to get through school do better afterward because moxie is often more important than brains in the business world. Also, Paris Hilton is hardly representative of most children of the well to do. Most professional, well to do people in America are self made and have above average IQs - which are hereditary. In those families there is a culture of education and it is expected. Paul, how many teenage mothers are reluctant valedictorians??

Subject: Re: Smart people find a way From: Paul G. Brown To: Econochick Date Posted: Tues, May 04, 2004 at 14:10:38 (EDT) Email Address: Not Provided Message: > Paul, how many teenage mothers are reluctant valedictorians?? Well, I'm going to guess a lot more than there are multi-millionaire stars of reality TV and the tabloids! And we are all better off if they have the same educational opportunities. And the question of genetics and IQ is an enormously complex one. Your argument--that intelligence is hereditary -- is the same one put forward -- though in a less sophisticated form -- by 19th and early 20th century conservatives who objected to the creation of state run education systems. If this argument is true it follows that spreading the investment across all socio-economic strata is wasteful. Look at racehorses. Rather than train a wide swath of horses the sport instead concentrates on a few 'blood-lines'. By contrast, over and over again we have evidence of individuals from non-privileged backgrounds (indeed, entire populations of immigrants from areas written off as incurably backward and stupid) excelling once granted an opportunity. I came to this position after reading Dawkins and Dennett on genetics, Gould on (mis)measurement, and even Charles Murray for a well expressed and thorough coverage of the other point of view.

Subject: Re: Smart people find a way From: Econochick To: Paul G. Brown Date Posted: Tues, May 04, 2004 at 15:43:10 (EDT) Email Address: Not Provided Message: 'Well, I'm going to guess a lot more than there are multi-millionaire stars of reality TV and the tabloids! And we are all better off if they have the same educational opportunities.' Right, Paul, so the point is that using outliers to create public policy or examples in arguments is wasteful. I have never heard of a Paris Hilton doing well in an Ivy league school and I have never seen a reluctant Valedectorian (with or without children). People who are as stupid as Paris do not succeed and people who are as reluctant and teenage mamma don't succeed either. You need both brains and moxie. IQ is hereditary (I am not an expert and got this from someone who is a research scientist in that area). However, IQ is somewhat changeable. Also, IQ only measures boundaries. Take a person with a large IQ and deny education and you will have one stupid !(#*. With an education, a person with a high IQ can become the proverbial rocket scientist. A person with a lower IQ can counter it with education but will likely never understand quantum mechanics. The point is, most high IQ people select mates with similar IQs and therefore breed smarter children. Those children augment those IQs with education - which is likely part of the family culture anyway. More education equates to more money. And that's how you get into the pickle we're in now. People with lower IQs benefit profoundly by getting an education and society benefits as well. I'm not arguing that. But financial aid is already skewed toward the lowest earners. I was elligable for everything. People whose parents' income was around $40,000 were elligable for much much less. I guess the message is: 'quit buying every new gadget that comes down the pike and save some money for college.' I still think that smart people of all social and economic backgrounds will find a way to get through college. I am but one lonely example but I knew a ton of people just like me when I was in school.

Subject: Re: Smart people find a way From: Paul G. Brown To: Econochick Date Posted: Tues, May 04, 2004 at 17:36:48 (EDT) Email Address: Not Provided Message: Conceded that the [tabloid|welfare] queen thing was a rhetorical cheap shot. And agreed that in general the best outcomes are achieved by reasoning about policy across a population. But look, this 'genes and IQ' thing is really, really complex. People write entire books about this topic and come to the conclusion that 'it's a lot of both'. And you need to be really careful with terms and definitions. Even the basic terms in the debate, like 'IQ', have multiple meanings. In terms of genetics, IQ refers to a property of the human genotype: an inherited trait, a potential, like 'possible tallness'. Some sub-populations of human beings have undergone a 50% increase in mean height in only the last few hundred years, and we are all aware that mean life expectancy has more than doubled, without any change in the underlying genetics. Rather, improvements in diet, and an understanding of how best to manage our bodies. But -- and here is the important point -- *variance* of height (at least) has not changed all that much. If anything, it has decreased. Stephen J. Gould wrote a whole book about this phenomenon called 'Full House: The Spread of Excellence'. Now, the term IQ is used in another way, to refer to a measure, or a quantification of the genetic trait in an individual. In other words, the IQ test is meant to quantify something about the phenotype. Like height or longevity, IQ is something we can measure, unlike genetic potential. Ideally, an individual's score on such a test ought to have nothing to do with environmental factors. In practice, this is impossible, of course. Give the infant Shaquile O'Neal a life time on a low protien diet and he'd be about the size of Paul Krugman. Inspite of being denied any 'education', Papua New Guinea highlanders (Jared Diamond's observation in 'Guns Germs and Steel') have languages that run to enormous, complex vocabularies; something often cited as an indicator of high IQ. Yet these same individuals would score really badly on any spatial reasoning test. In fact, its highly unlikely that they would grok the concept of 'test' at all. Then there are other mathematical features of population genetics; regression to the mean and the law of large numbers. Of your pair of smart|tall parents, at one must have greater smarter|taller potential than the other. And the smarter|taller the individual, the more likely that they will breed with another who is dumber|shorter (simply because the smarter|taller you are, the fewer people are smarter|taller than you). All of which means that, in all probability, their offpsring have less potential for smarts|height than the smarter|taller parent. Rinse, repeat, regression to the mean; if you are smart|tall, then you're likely to have smart|tall kids, but the trend of your descendents will be towards being progressively dumber|shorter than you are. Add to this the way that we are all descended from a common ancestor mitochondrial Eve within the last 200,000 years. There simply isn't a lot of diversity in the human genome. Now, its obviously true that smarter|taller people will have higher life-time-incomes|turn-around-jump-shots. Therefore, it follows that the entire population will have better average life-time-income|turn-around-jump-shots if we invest more on education|back-yard-hoops among populations who have worse life-time-income|turn-around-jump-shots. At least, that's the reasoning. Ain't life a funny thing.

Subject: Re: Smart people find a way From: Mik To: Paul G. Brown Date Posted: Wed, May 05, 2004 at 17:47:26 (EDT) Email Address: Not Provided Message: This has got to be one of the best postings I have yet seen on this topic. Thanks. I espcecially like the better 'turn-around-jump-shots' remark. I'll keep this one for future use.

Subject: Re: Smart people find a way From: RL To: Paul G. Brown Date Posted: Wed, May 05, 2004 at 06:38:35 (EDT) Email Address: rafaelloring@yahoo.es Message: I agree with Paul in the IQ-geneticts discussion for the most part. Nontheless I think we are mixing here two differents things.IQ may or may not be related with personal wealth but regarding public finance/aid in education we have to consider something else. We should judge by the cost-benefit relation for society of spending taxes revenues in educating a particular individual, regardless of his inteligence or of course that of others. All studies regarding benfits of eduction state that literacy and and eduction until 16 is always highly profitable. And that is why education to that age is granted in developed countries. But this also creates some problems. Teaching turns out to be bad paid (that is for teachers) and the quality of high schools decreases. That is why I don't see higher fees in Colleges as something bad if scholarships keep up with them. If many American Universities rate among the best is because they have scaped the public ownership strategy that dominates in Europe where public schools are normaly runned better but Universities lagg behind. I wonder if here lies part of the explanation of the differences in productivity of the past decade between Europe and US.

Subject: Right on From: Econochick To: RL Date Posted: Wed, May 05, 2004 at 08:23:37 (EDT) Email Address: Not Provided Message: I agree with you, RL. I would only add that a college eduction also pays enormous dividends to individuals and society - particularly in an economy that is moving away from lower-paying, unskilled jobs. As long as financial aid keeps up, we shouldn't have a long-term problem. I don't, however, think that teacher pay has that much to do with poorer education. Teachers are paid fairly well considering they get A LOT more vacation time than any other profession. I know people will disagree but that's what I personally think from the brief time that I was a teacher. Of course, EVERYONE in every profession believes they are underpaid. I think the difference may be that there is less emphasis on education in American homes than in Europe. Anyone lurking on the board who went to primary and secondary school outside the US?

Subject: this is fun From: Nat To: Econochick Date Posted: Fri, May 07, 2004 at 00:14:06 (EDT) Email Address: Not Provided Message: Ahh. IQ, education, etc., another one of my favorite topics. Sorry I am late! I feel a rant coming on... We struggle to measure intelligence, and tend to try to narrowly constrain it to certain standard analytical processes. But intelligence is a broad spectrum of analytical and data gathering skills interwoven with personality, memory, and metabolism. It just cracked me up a few years ago when Scientific American had an article suggesting there are multiple types of intelligence. Like, DUH! I recall years ago reading suggestions that Magic Johnson (the great hoopster) was a dummy in school. Maybe he got lousy grades, but IMO he was the smartest basketball player ever. He was blessed with an exceptional real time processing engine that could understand and manipulate the complex social interactions of 4 teammates, 5 opponents, 3 refs and 2 coaches along with the physics of a high speed game. He is now an articulate CEO of a company that puts theaters in poor areas shunned by conventionally thinking companies. I bet he would have made a great trial lawyer. Why do boys get a lot smarter in math when they hit puberty? Why does male intelligence seem to depend on brain metabolism and why does female intelligence seem to depend on a more efficient and distributed use of the brain? And how does all this fit with education?? And why has no one (that I am aware of) ever spent one second working on a solution to this significant problem: our youngest members of any school class have a higher incidence of developmental difficulty. (A very related factoid: there are twice as many major league baseball players born in August than July...) And why the hell can't Texas politicians figure out how to fund the education of our kids? Education is clearly not a priority of our pols, nor is the so-called safety net (although this safety net is overwhelmingly medical.) I have concluded that social Darwinism is the underlying reason for this behavior, pure and simple. The folks who run this country want their kids to succeed at the expense of children not of their ilk. Tom Delay does not consider the kid in the 5th ward of Houston part of his community. Neither his health nor his education matter a whit to Mr. Delay. It is fashionable in our society to consider corporations as ammoral profit engines, beholden only to their shareholders. In a like manner, pols are accountable only to those that subsidize and enhance their careers, who are most certainly not the children of the masses who need an education or decent medical care.

Subject: woohoo From: Econochick To: Nat Date Posted: Fri, May 07, 2004 at 09:33:58 (EDT) Email Address: Not Provided Message: Nat, politicians do not exist in a bubble. In fact, I think education is far less important an issue to their constituants than those constituants say it is. We give a lot of lip service to education but we do nothing about it. In a wealthy society people can exist better with much less effort than in the third world. They care less about things like education than they say they do. Smart people - and as you point out, 'smart' is a slippery definition - will do better if they are surrounded by people who are educated. Crime will decrease, fewer people will depend on a welfare state. Keeping people uneducated is detrimental to everyone. For proof, just look at India in the past.

Subject: Re: Right on From: RL To: Econochick Date Posted: Thurs, May 06, 2004 at 06:51:14 (EDT) Email Address: rafaelloring@yahoo.es Message: We can blame families, but if they are to be blamed is because their education wasn't good enough. Let's take high school teachers again, you may think they are fairly paid taking account of vacations. Still I belive that their qualifications should be paid better. what really speaks for it self is to compare the social status of a high school teacher with someone of a similar education (same years emploid in it), like lawyers or middle-high management. pd: I have myself studied in Spain and in the US high schools, true private ones. To my surprise the level of education in the US was poorer, specially in science, not only pupils knew less also the teachers demanded less. Anyway I could't generalize from my expirience.

Subject: Re: Right on From: Econochick To: RL Date Posted: Thurs, May 06, 2004 at 09:52:16 (EDT) Email Address: Not Provided Message: RL, with regard to poorer education in the united states, particularly in the area of maths and science, your comments have been repeated by many many foreign students. In fact, US schools know this to be true. As far as assuming that families with less education are less effective in getting their children to do better in school and vice versa, this is not true. Studies show that if parents set expectations and check up on their children (regardless of their own educational level), children do better. Highly educated parents who ignore or make excuses for their kids (I had quite a few of those) find that their children do very poorly in school. Of course, some kids are self-motivated but they don't tend to be the minority. Teachers do not have the same education as lawyers and middle-managers. First of all, middle managers are not paid better than teachers - especially when you take into account the number of vacation days that teachers can use to get another job to augment their income. Managers are difficult to talk about because their positions are very company dependent and their positions are not standardized. And lawyers are definitely NOT of the same education level as teachers. Teachers only require an undergraduate degree. Just to give you an idea - I taught high school math as I was getting my undergraduate degree. I didn't even have it yet. When I brought this up to the director, he was not worried because with advanced Calculus 1 under my belt I had 'more math education than most of my math teachers'. Huh? I found that disturbing.

Subject: Re: Right on From: RL To: Econochick Date Posted: Fri, May 07, 2004 at 08:22:10 (EDT) Email Address: rafaelloring@yahoo.es Message: Well, then there lies probably some of the difference: in Spain all school teachers have at least a three year college degree.

Subject: Re: Right on From: Econochick To: RL Date Posted: Fri, May 07, 2004 at 09:42:01 (EDT) Email Address: Not Provided Message: RL, our teachers also have a college degree. But you compared them to lawyers who have a college degree plus a three year JD - and law schools are very competitive. What concerns me more is that high school math teachers are not terribly well educated in MATH!! Our primary and secondary education is much worse than Europe's.

Subject: Re: Right on From: Mik To: Econochick Date Posted: Thurs, May 06, 2004 at 16:51:50 (EDT) Email Address: Not Provided Message: Econochick, You and I have a similar history. I also taught Maths and Science while I was at university. I'm impressed this thread seems to be quite popular, but also the point seems to have diverted quite few times. I see we are now discussing high school teachers.

Subject: I knew I shouldn't, Paul From: Econochick To: Paul G. Brown Date Posted: Tues, May 04, 2004 at 17:59:24 (EDT) Email Address: Not Provided Message: I will argue with nothing you say in your post. I'm glad you posted it. I knew this from what my friend, the expert, told me before and I was reticent to bring it up on a message board. As you point out - IQ is nothing if not a complicated subject. But IQ can be tested WITHIN a society at a given point in time with fairly good results. So, you can't compare IQs across populations as well as you can compare IQs within a population. This is because of the environmental differences (which, as you point out, ideally shouldn't have anything to do with it). My hypothesis is that people who make more money have higher educations and higher IQs and, on average, tend to have higher IQ children and foster a culture of education. The list of those people may not remain constant over time (reversion to the mean) but at any given time there is such a population subset. Paris Hilton, for example, is an example of reversion to the (below) mean. Ha ha ha. Is what I'm saying true? I don't know. I thought I'd throw it out as something to think about. Also, Paul, my understanding is that IQ is somewhat changeable. Thus, if you get an 'environmentally challenged' student from a welfare neighbourhood and a culture of ignorance and poverty and educate them, the world overall gets better. It's better for the student and better for society. Question: how do we achieve that? The unfortunate side-effect of a rich society is that you can be less productive and live better than people in poorer societies who have to fight every day just to attain the standard of living our 'welfare queens' do. It's hard to set social policy to combat that.

Subject: Re: I knew I shouldn't, Paul From: Paul G. Brown To: Econochick Date Posted: Tues, May 04, 2004 at 18:35:25 (EDT) Email Address: Not Provided Message: (Having gotten rolling). > But IQ can be tested WITHIN a society at a given point in time with fairly good results. Granted. But define 'society'? Do underprivileged kids really share enough social values and memes with the affluent to justify classifying them as part of the same 'society'? Consider the evidence provided by immigrant populations. By definition immigrants have come from different societies and routinely score more poorly than the indigenous population on standard tests. Yet their children -- Ah -- another story entirely. Regarding the social policy safety net, and the 'moral hazard' it implies. Very true. But the arguments are entirely different. As its name suggests the 'safety net' is about supporting those at the very bottom. (In my opinion it ought to be just enough to keep 'em from rioting.) But education has a different objective. The OP posted an article that suggested that the proportion of children of affluence at elite schools was increasing. If you assume that there has been no change in the underlying population genetics, it follows that the developmental investment in educating the underprivileged is falling.

Subject: Yep From: Econochick To: Paul G. Brown Date Posted: Tues, May 04, 2004 at 20:57:56 (EDT) Email Address: Not Provided Message: 'The OP posted an article that suggested that the proportion of children of affluence at elite schools was increasing. If you assume that there has been no change in the underlying population genetics, it follows that the developmental investment in educating the underprivileged is falling.' True. Disturbing. You can break that down even further. Blacks are doing better. Hispanics are doing worse. The problem is that Hispanics are growing as a percentage of the population. Good points, Paul.

Subject: Re: I knew I shouldn't, Paul From: El Gringo To: Paul G. Brown Date Posted: Tues, May 04, 2004 at 18:49:37 (EDT) Email Address: nma@hotmail.com Message: Hey, wait Paul, I'm better than you, look at my IQ-test (Brazil), result:20765!

Subject: Re: I knew I shouldn't, Paul From: El Gringo To: El Gringo Date Posted: Tues, May 04, 2004 at 19:02:34 (EDT) Email Address: nma@hotmail.com Message: Sorry to probably have offened some readers, but it surely wasn't meant to be in that way...(meu desculpa)

Subject: Re: I knew I shouldn't, Paul From: Paul G. Brown To: El Gringo Date Posted: Tues, May 04, 2004 at 18:55:19 (EDT) Email Address: Not Provided Message: Yeah, but my john thomas is bigger than . . . oh never mind.

Subject: More... From: Econochick To: Econochick Date Posted: Tues, May 04, 2004 at 16:19:13 (EDT) Email Address: Not Provided Message: Sorry, Paul, didn't quite make my point with the IQ thing (doing too many things at once). My point was that richer people may tend to have higher IQs and therefore an easier time getting into school (if the higher IQ = higher propensity to learn = more higher education = more money earned equation holds). I don't know that this is true but we have to ask that question to get a better picture of what's really happening. I can't at this point say that rich kids are getting higher education just because they can afford it. If that were true, then only 5% of us would get an education and over 35% of us are getting 4 year college degrees. Very smart and very poor kids also have advantages - there are tons of merit and 'special interest' scholarships for them. Also, even if your single mother example were not a valedictorian but fell in the bottom of the first standard deviation of IQ, she and we would benefit from education. Same goes for every child with every kind of IQ and every kind of financial and social situation. But they don't all have to go to expensive four year schools. There are plenty of opportunities from two year degrees to smaller, less expensive colleges. A person hungry for knowledge will find a way and education will always pay off for them.

Subject: Re: More... From: El Gringo To: Econochick Date Posted: Tues, May 04, 2004 at 16:31:04 (EDT) Email Address: nma@hotmail.com Message: 'Bamboozled!'...

Subject: Re: Smart people find a way From: El Gringo To: Econochick Date Posted: Tues, May 04, 2004 at 15:59:31 (EDT) Email Address: nma@hotmail.com Message: Econochick is 'IQ-Egocentic'!(Ha,ha,ha)

Subject: Re: Smart people find a way From: El Gringo To: El Gringo Date Posted: Tues, May 04, 2004 at 16:08:57 (EDT) Email Address: nma@hotmail.com Message: Sorry, made a mistake..., forgot an 'r' before, now, please format c:

Subject: Re: Smart people find a way From: Mik To: Econochick Date Posted: Tues, May 04, 2004 at 13:22:45 (EDT) Email Address: Not Provided Message: Okay at this point I have to say, 'Stop.' It is easy for you (and even me) to make these kinds of statements, after all we went into professional type degrees with good financial prospects after graduation. This is a sign of our society that rewards more the people with a business savvy than people with an arts savvy. My original posting was refering to someone who wants to do history or English as a degree to further their personal intellectual development and later want to go into normal work environment. But these people find that after having graduated with a serious loan to be repayed, they cannot get good enough jobs just to repay their loan. America is rapidly losing those good jobs. Also I must point something out. We live in a world with inflation (unless you are in Japan) and consistent rising costs. But these costs amount to about, say, 2 to 3% a year in North America. How the hell can one justify consistent university increases of 15 or so percent a year? The sum total of all cost increases should still add up to an overall increase of about the inflation rate. Yet universities have consistently increased their fees well above inflation rates. Not for one second do I buy this theory that professors keep their university salaries low by offering consulting work. I employ many professors for consulting jobs. Their consulting work is by my experience few an far between. If anything I would say they are heavily relient on their university salaries. But what has become clear to me, is that they are looking for salaries equal to the best paid in the professional industry. If that is the case - they should fully join the professional industry. This to me is the key to development of our society in all realms and faculties. Education and the ease of education is what has made the difference between very successful nations and very unsuccessful nations. We have a hard time as it is trying to get our teenagers away from the TV and into their books. We should remove every an all blockages that prevent people from wanting to improve their own intellectual development beyond high school. And in my opinion, we are doing exactly the opposite. What is happening in the US is no different to what is happening in just about every developed country. Hhmmm perhaps I'm just a socialist.

Subject: Re: Smart people find a way From: Econochick To: Mik Date Posted: Tues, May 04, 2004 at 16:02:32 (EDT) Email Address: Not Provided Message: Okay, Mik. Salaries: in no way do salaries for finance professors come close to compensation for Wall Streeters! We're talking multiples of 10 and 100. If you're an English professor I don't even know what to compare your salary to. If one decides to pursue personal development - great! But don't make someone else pay for it. Here's an idea: get a degree in something that society values enough to pay for and then get your personal development on your own time. If you're not choosing a diploma that is marketable, you know that ahead of time and you should plan your financial future around that. Think about it, Mik. Someone has to pay for these people to enjoy reading Frost and Dostoyevski while you and I slog it out in Econometrics so that we can be more marketable. If you want to wax philosophical, there's a price to pay. Besides, Investment Banks, for example, like to hire people with sorts of majors for analyst positions. Don't ask me why. I think they just like to take a well-rounded person and work them to the point where the lose the will to live normal lives. University fees have increased not because of salaries but because of added technologies and more services for students. If Universities added no new computers and resources then they could grow at inlfation. Now, in Soviet Russia there was a HUGE emphasis on education. Heck, in my own family 'he who died with the most degrees wins' was almost a motto. In fact, education replaced money as social currency. People were getting degrees not because they helped them live better (they almost never did) but because it gave them higher status in society. How did that work out for them? I'll let my uncle, the Chemistry Ph.D., tell you from his dilapidated communal apartment. He has a second job just to feed his 2 kids. Don't worry, Mik. More of us are going to college. Less than 30 years ago 25% of Americans were getting a four year college degree. That number has risen to nearly 40% the last time I checked. And that's another reason tuitions are up - growth. I've taken the other side of the argument because it's important for people to get educated even if it becomes harder to do so. To tell people not to bother because it's hard counters everything that you and Paul have argued on this thread. I do think that there must be public money for and emphasis on eduction. However, the issue is much more complicated than that. One of the jobs I had during college was teaching high school math and I found that the problem was lack of parental participation, not money. When parents don't care, it's almost impossible to get kids to work and that's a cultural, not financial problem.

Subject: Re: Smart people find a way From: Mik To: Econochick Date Posted: Wed, May 05, 2004 at 13:51:58 (EDT) Email Address: Not Provided Message: You see again that is easy for someone like you to say that we should plan our lives around what is more marketable. I don't argue the point - I just hate the point and would like to change it. I guess I'm a socialist (it appears Emma is one too). You see for a person who has a head for, say, fine arts but absolutely no head for math and finance, getting them to slog it out at university (in Finance) just so that they can take up a 'meaningful' career and then take up their passion on the sideline is asking a lot. Econochick - you are a very practical person who sees the system for what it is and gets yourself and everyone to change to accomodate the system. I on the other hand I am practical too, but I continually argue to change the system to accomodate more people. I don't like the figures you put forward as some sort of justification. I am the sort that believes that everyone in a country should have a tertiary course. Our education level should not be measured by our literacy rate but rather by our tertiary education rate. The issue here is about opening universities to more and more people and the costs associated with it. I don't buy the technology argument. For example, my old university was making huge strides in technology development in mining. These strides were being funded by the private sector and partly by the student fees for mining engineering . Thus the benefit of the new technology is predominantly for those specific students who will also benefit in their careers. Those are the students who should have th fee increases. Instead, the university is spreading the fee increases across the entire university and in essence we have the exact reverse from what you were claiming - in other words it is the arts students who are carrying the additional fees for increased technology. The university has tried to limit this by holding down fees to students who's courses don't have any 'new technologies'. But that attempt is corrupt at best. It is very evident to me, how the universities are having themselves furnished with the latest and greatest - but more evident to me that the senior staff are continuously pushing for higher salaries that go well beyond inflation rates. More importantly, I would really like to see univeristies release their annual income statements for us to compare their changes in cost structures.

Subject: Important Argument From: Emma To: Mik Date Posted: Tues, May 04, 2004 at 14:31:36 (EDT) Email Address: Not Provided Message: I rather lean to MiK.... Income and wealth differentials in America are growing wider and are disquieting.

Subject: California Experience From: Paul G. Brown To: Mik Date Posted: Mon, May 03, 2004 at 14:36:53 (EDT) Email Address: Not Provided Message: For What It's Worth: Here on the dry end of the left coast, we're experiencing a really big hike in student fees in the state college and university system. As part of his plan to balance the state budget the governator has decided that 'education' stops at K-12 and is planning to slash funding to higher education in the state. Their state subsidy gone, the system has the choice of shrinking, or increasing fees. Stanford is also increasing its fees (and cutting its academic benefits) because the University has experienced really, really big losses in its endowment. Turns out our current National Security Adviser, when she ran the place, plonked a whole lotta love down on technology stocks. Prudent and thoughtful? As for academic salaries, my most recent experience suggests that this is much less an issue than it used to be. In a modern university (not so sure about colleges) academic staff are permitted to work on outside contracts: consulting, start-ups, boards of directors, etc. For folk working in 'the professions' this income often dwarfs (Tolkien's spelling) their academic salary. Doesn't help much if you're the Dean of the Classics Department, mind you, but 'rent-a-brain' works to a greater or lesser degree across a wide range of disciplines. IMHO, the solution is more competition in the 4 year college market. The canon of 'really good schools' hasn't changed much in my professional life time. In geek-dom, there's MIT, CMU, Berkeley, and Stanford. Getting into one of these schools is really, really hard. Other places produce graduates that are--for the most part--every bit as good as these elite schools, but don't get the same recognition.

Subject: Re:For Econochick From: El Gringo To: Paul G. Brown Date Posted: Tues, May 04, 2004 at 16:15:18 (EDT) Email Address: nma@hotmail.com Message: 'Poorest children should get largest vouchers Most of the people who have been losing out don’t have an adequate education--the first prerequisite to success in the new economy. So the best investment in their future prosperity is to improve their store of “human capital.” The risk of most school voucher proposals is that the poorest children--normally those with the biggest learning or behavioral problems--would be sorted together into the least-desirable schools. One way to avoid this would be to make the size of the voucher proportional to family need. Children from the very poorest families would have the largest and most valuable vouchers, thereby making the children sufficiently attractive for good schools to want to compete for them. Source: The American Prospect, vol.12, no.3,“New Economy” Feb 12, 2001

Subject: Re: Re:For Econochick From: Econochick To: El Gringo Date Posted: Tues, May 04, 2004 at 16:30:23 (EDT) Email Address: Not Provided Message: Doesn't that lead to the risk of these kids getting into the better schools and being sorted into dumbed-down classes so as not to disturb the better students?

Subject: Re: Re:For Econochick From: Paul G. Brown To: Econochick Date Posted: Tues, May 04, 2004 at 17:44:40 (EDT) Email Address: Not Provided Message: Put 'em all in the same school, then 'stream' the hell out of them. Heck! I'd even advocate gender segregated classes! Develop a curriculum that is targeted to stages of childhood development. Reading at an eighth-grade level? Then get into a class that's reading eighth-grade text-books. What's tricky is integrating social, psychological and physical development into this. If Econochick's hypothesis is correct, then the children of affluence ought to have nothing to fear from streaming. Ditto if the 'invest disproportionately in the less affluent' argument is correct!

Subject: Interesting... From: Econochick To: Paul G. Brown Date Posted: Tues, May 04, 2004 at 18:07:13 (EDT) Email Address: Not Provided Message: Paul, that sounds like a lot of work, though. Can public schools handle that? For the brief time that I taught in a high school, I noticed that the kids who did best were the kids whose parents were very involved in their education - regardless of the socio-economic circumstances. Friends who have become teachers say that they would prefer parental involvement to additional funds also. I wonder if there's any way to gear the voucher thing to encourage parental involvement?

Subject: Re: Interesting... From: Paul G. Brown To: Econochick Date Posted: Tues, May 04, 2004 at 18:52:21 (EDT) Email Address: Not Provided Message: It's nothing less than a program for genuine reform of the education system. In theory, it ought to involve no more work than what is being done now. Curriculum designers and text book authors have a particular reading-age/developmental stage in mind when they set about their task. The difference is in the attention paid to the testing and promotion policy. You'd also need to think more about social structures. It's already a feature of contemporary US education, to some extent. Advanced placement classes verses regular classes at high school, for example, though these are elective. Growing up in Australia students at the same physical high school got streamed when they choose their courses.

Subject: Re: Re:For Econochick From: El Gringo To: Econochick Date Posted: Tues, May 04, 2004 at 16:42:00 (EDT) Email Address: nma@hotmail.com Message: That's always the case...(but, first give me a detailed definition of the word 'better'?) and then could you be so kind and catch a glimpse of Paul Krugman's book 'Competitiveness'?

Subject: Re: Re:For Econochick From: El Gringo To: El Gringo Date Posted: Tues, May 04, 2004 at 17:00:24 (EDT) Email Address: nma@hotmail.com Message: Sorry:'Competitiveness:An international Economics Reader'

Subject: Interesting Comments From: Emma To: Paul G. Brown Date Posted: Mon, May 03, 2004 at 15:51:08 (EDT) Email Address: Not Provided Message: State budgets are still being squeezed. The California budget experience is not an isolated experience.

Subject: Krugman on Iraq From: Pete Weis To: All Date Posted: Fri, Apr 30, 2004 at 02:33:11 (EDT) Email Address: Not Provided Message: Paul Krugman seems to think we have passed and missed any point of even limited success in Iraq. It's hard to disagree. Moslem extremists seemed to have been able to draw us into a nasty trap of their choosing. They were able to get rid of a tyrant, Hussein, who stood between them and the Iraqi people and make us the focus of the world's anger. A brilliant plan worked, so far, to perfection.

Subject: Re: Krugman on Iraq From: jimsum To: Pete Weis Date Posted: Fri, Apr 30, 2004 at 14:41:55 (EDT) Email Address: jim.summers@rogers.com Message: I prefer to think that the point of unilateral success has passed; it doesn't look like it is possible for the U.S. to succeed in Iraq without help from the rest of the world (if it ever was). I don't think it is too late for multilateral success. The conclusion I draw from how the invasion of Iraq has been prosecuted is that the rule of law will not prevail against the powerful. From all indications, Bush and his administration have no faith at all in the U.N. security council or international laws, and instead see laws as an impediment to doing what best benefits Americans. What conclusions should Iraqis draw from this after decades of rule by Saddam? That they should stake their lives on the rule of law, or they should curry favour with whichever new strongman might end up ruling over them? Bush is a hypocrite to ask the Iraqis to trust in laws rather than power when he clearly doesn't believe a system of international laws is better than exploiting the military and economic powers of the U.S. If Bush were to cede power to the U.N. and admit that he should have done that in the first place, it would be a powerful signal to the Iraqis that they too might be able to trust a system of laws. If instead, Bush continues to put his faith in the power of the U.S. military, both Bush and the Iraqis will learn that although the U.S. military is strong enough to remove a government, it doesn't have the strength required to replace that government with something better.

Subject: From Dream to Nightmare From: Jennifer To: jimsum Date Posted: Fri, Apr 30, 2004 at 15:54:26 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/04/30/opinion/30HERB.html From Dream to Nightmare By BOB HERBERT At least 10 more American soldiers died yesterday in George W. Bush's senseless war in Iraq. They died for a pipe dream, which the American Heritage Dictionary defines as a fantastic notion or a vain hope. 'Pipe dream' originally referred to the fantasies induced by smoking a pipe of opium. The folks who led us into this hideous madness in Iraq, against the wishes of most of the world, sure seem to have been smoking something. President Bush and his hyperhawk vice president, Dick Cheney, were busy yesterday lip-syncing their way through an appearance before the commission investigating the Sept. 11 attacks. If you want a hint of how much trouble the U.S. is in, consider that these two gentlemen are still clinging to the hope that weapons of mass destruction will be found in Iraq. Reality was the first casualty of Iraq. This was a war that would be won on the cheap, we were told, with few American casualties. The costs of reconstruction would be more than covered by Iraqi oil revenues. The Iraqi people, giddy with their first taste of freedom, would toss petals in the path of their liberators. And democracy, successfully rooted in Iraq, would soon spread like the flowers of spring throughout the Middle East. Oh, they must have been passing the pipe around. My problem with the warrior fantasies emerging from the comfort zones of Washington and Crawford, Tex., is that they are being put to the test in the flaming reality of combat in Iraq, not by the fantasizers but by brave and patriotic men and women who deserve so much more from the country they are willing to defend with their lives. There is nothing new about this. It seemed to take forever for American leaders to realize that they were lost in a pipe dream in Vietnam. A key government spokesman during a crucial period of that conflict was Barry Zorthian, the public information officer for American forces in Vietnam from 1964 to 1968. In a book published last year, 'Patriots: The Vietnam War Remembered From All Sides,' Mr. Zorthian is quoted as saying: 'We probably could have gotten the deal we ended up with in 1973 as early as 1969. And between 1969 and 1972 we almost doubled our losses. It's easy to second-guess but I've never been convinced that those last 25,000 casualties were justified.' ...

Subject: Re: Krugman on Iraq From: Pete Weis To: jimsum Date Posted: Fri, Apr 30, 2004 at 15:53:56 (EDT) Email Address: Not Provided Message: I agree. From numerous interviews, being presented in the news, of the Iraqi man-in-the-street, it's evident he cares little about Bush's effort to bring democracy. All he wants is a life where he can go about his business and life without being threatened or shot. Kind of reminiscent of Vietnam where villagers just wanted an end to the hell of war and just to go on with their lives in peace. I remember Reagan critizing Carter in 1980 by saying 'it's nice to be liked but much better to be respected'. He, of course, was inferring that we needed to spend more on the military, than had Carter, and that military might would garner us respect from the rest of the world. But it occurred, at the time, to me that respect is willingly given, not forced at the end of a gun. What you get by using military force unilaterally is fear, anger, hatred and eventually revenge when the opportunity presents itself. Hanna Arendt wrote about how respect was something that could only be willingly given (never forced) in her book 'Eichman in Jerusalem'. We need to understand the true meaning of respect here in America. Under our present administration the level of respect for America has depreciated considerably, IMO.

Subject: Re: Krugman on Iraq From: El Gringo To: Pete Weis Date Posted: Fri, Apr 30, 2004 at 19:01:58 (EDT) Email Address: nma@hotmail.com Message: Excellent!

Subject: Poignant From: Emma To: Pete Weis Date Posted: Fri, Apr 30, 2004 at 15:55:31 (EDT) Email Address: Not Provided Message: Poignant articles and remarks.

Subject: This War is a Sadness From: Jennifer To: Emma Date Posted: Fri, Apr 30, 2004 at 17:13:11 (EDT) Email Address: Not Provided Message: This war is a source of daily sadness, and I am thankful for these comments.

Subject: US visas 'deterring top students' From: El Gringo To: All Date Posted: Thurs, Apr 29, 2004 at 17:14:20 (EDT) Email Address: nma@hotmail.com Message: http://news.bbc.co.uk/1/hi/world/americas/3648491.stm http://www.boston.com/news/globe/editorial_opinion/editorials/articles/2004/04/21/visas_for_science/ 'If you want to be truly well-informed about economics (or anything else), you must go back to school-and keep going back, again and again.' (and again?) (PK, The accidental Theorist)

Subject: Going Back to School From: Emma To: El Gringo Date Posted: Fri, Apr 30, 2004 at 13:43:41 (EDT) Email Address: Not Provided Message: We must be forever returning to school. We need to grow forever.

Subject: Re: Going Back to School From: El Gringo To: Emma Date Posted: Fri, Apr 30, 2004 at 14:09:22 (EDT) Email Address: nma@hotmail.com Message: 'Some' need really to grow...

Subject: European Union From: Emma To: All Date Posted: Thurs, Apr 29, 2004 at 16:01:01 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/04/29/international/europe/29nova.html Germans and Czechs and the Little Bridge That Binds By MARK LANDLER NOVA VES V HORACH, Czech Republic - The border crossing to Germany from this remote Czech village feels almost make-believe. Where razor-wire fences and watchtowers once loomed, a makeshift footbridge spans the burbling stream that separates Czech soil from German. A few front-porch-size flags hang limply at each end, with placards that remind travelers to have the proper identification. There isn't a border guard in sight; the locals stopped carrying passports years ago. On Saturday, when the Czech Republic and nine other countries formally join the European Union, history will catch up to reality. For Nova Ves, and its equally tiny German counterpart, Deutschneudorf, integration is already a fact of life - neither new nor particularly novel. Occasionally, though, larger forces interfere in the day-to-day diplomacy of the townsfolk here, reminding them that in distant capitals like Prague and Berlin the unification of Europe is still a momentous event, to be cloaked in legalisms and freighted with bureaucracy. The footbridge is a case in point. The floods that inundated eastern Germany and the Czech Republic two years ago washed it out. There are other border crossings nearby, and in any event most able-bodied people could, with a running start, hop across the stream, known as the Schweinitz. But bridges are powerful symbols, and the mayors of the two villages wanted this one repaired quickly. The German mayor, Heinz-Peter Haustein, tracked down a rusting pontoon that had once belonged to the Russian Army and laid it across the broken span, reopening the link. He then filed plans with Czech and German officials to build a new bridge, which is when his troubles began. Officials in Prague said he had not completed a required technical study. They lodged an objection with the authorities in Dresden, the state capital of Saxony, who called a halt to the project. Nearly two years later, people are still padding across the bridge. 'The bureaucracy in Europe is terrible,' Mr. Haustein said. 'The E.U. has rules on how bananas should be grown, and what shape they should be. Bill Gates could never have started a business in his garage here, because the relevant authorities would have shut him down.' ...

Subject: Microloans for Development From: Emma To: All Date Posted: Thurs, Apr 29, 2004 at 14:51:48 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/04/29/international/asia/29MICR.html?hp Debate Stirs Over Tiny Loans for World's Poorest By CELIA W. DUGGER GORMA, Bangladesh — Nearly every woman in this village seems to have gotten tiny loans to invest in a miniature business. None has made better use of the cash than Firoza Akhter, a shrewd, flinty young mother who put her profits from four loans into cows, goats, land, a sturdy house and private tutors for her daughter. 'I can make money out of anything,' she boasted in her wheezy voice, a gold, flower-shaped stud glinting in her nose. Hers is a shining success story for microcredit. But while she came from humble origins, she was not among the poorest of the poor. Like many of the 50 million people who take part in microcredit programs, she hovered at the upper fringe of poverty. Today there is a growing push for the nonprofit groups and banks that run such programs to reach deeper into the ranks of the poor, though there is little rigorous evidence juding whether the very poor benefit from microcredit, economists say. Since 1988, the United States Congress has appropriated $2 billion for such programs. In new rules to take effect next year, it has put teeth into a requirement that half of American aid for these loans — defined as $1,000 or less in Europe and Eurasia, $400 or less in Latin America and $300 or less in the rest of the world — go to the very poor living on less than $1 a day. The new rules have stirred strong opposition from other donors and a range of microfinance institutions, which contend that the industry may grow faster and ultimately help more very poor people by aiming at a wider pool that ranges from people who are struggling but not poor to those much further down the economic ladder. 'This limbo dance to serve the poorest is a distraction from a much broader issue of trying to reach a billion people who have no access to credit or a safe place to save their money,' said Elizabeth Littlefield, a former managing director at J. P. Morgan who now heads the Consultative Group to Assist the Poor, an association of donors. Researchers for this country's largest microlender, the Bangladesh Rural Action Committee, or BRAC, have found that people near the poverty line are the main users of microfinance and are more likely to get more and bigger loans and build successful microenterprises. By contrast, BRAC has found that the very poor are more likely to drop out of microcredit programs....

Subject: A few points From: Mik To: Emma Date Posted: Fri, Apr 30, 2004 at 16:26:21 (EDT) Email Address: Not Provided Message: Thanks Emma, This is a very interesting story. I used to be involved in this field for quite some time. I thought I'd share with you a core problem on this matter. Imagine if you can 1 million dirt poor people and 500,000 'less poor' people in say Malawi. A government program to give loans of say $1,000 with a repayment of say 1 to 5 years is faced with a decision issue. If they open the criteria to the point that they can access the dirt poor population, immediately they would be swamped with loan applications and loans coming right up to 1 billion dollars. They literally cannot afford to back that kind of debt - let alone dealing with the risk scenario. Instead they focus on the 'creme' and make the loans accesible to the 500,000 people, notching up a more affordable debt with less risk. In essence the biggest problem we came across was not dealing with risk or the loan process, but rather the fact that no government can support (in anyway) to give loans to so many people. This is a sad fact. So we take life - one step at a time and deal with at least trying to help some people instead of no one. By the way, Malawi has a couple million dirt poor people and Malawi is a tiny country. If that gives you any idea of the gravity of the situation.

Subject: I Always Learn From You From: Emma To: Mik Date Posted: Fri, Apr 30, 2004 at 17:15:23 (EDT) Email Address: Not Provided Message: Your points are always compassionate and realistically optimistic, and I always learn from you. Malawi is a country I know.

Subject: Brooklyn's Boom From: Emma To: All Date Posted: Wed, Apr 28, 2004 at 14:12:41 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/04/28/nyregion/28box.html Suburban Retailing for the New Brooklyn By DIANE CARDWELL In Dumbo, a high-concept exercise in nesting lust called Hadco, a demonstration center where customers can try out luxe appliances for purchase elsewhere, has opened near outposts of ABC Carpet and Home and West Elm. In Gowanus, within eyeshot of a fuel-oil depot and a bustling scrap-metal business, a gleaming new 136,000-square-foot Lowe's, the chain's first foray into New York City's urban market, is set to open this Friday. And in Red Hook, if Ikea has its way, an enormous yellow and blue box will draw shoppers to the Erie Basin. Even as the assorted factions with stakes in the future of Brooklyn haggle over the relative merits of housing versus industry, preservation versus economic development, and the needs of the affluent versus those of the working stiff, a quiet retail revolution has already come to the eastern shores of the East River. Responding to the pent-up desires of those living in the borough, as well as to the coming hordes foreshadowed by a new-housing boom, home renovation and furnishing stores - some big-box, some just big - are suddenly finding their way to Brooklyn and remaking its neighborhoods, albeit in fits and starts. While some say it means that the borough is the new Manhattan, others argue that it is becoming the new suburbs. Perhaps, in the end, it is simply the new Brooklyn. 'The arrival of all of these home-furnishing stores follows the explosion in residential development,' said Kenneth Adams, president of the Brooklyn Chamber of Commerce. 'Historically, there's been unmet consumer demand in this area, but that's really crescendoed,' he added, as a 'wave of residential development continues to wash over Brooklyn.' According to census figures released in January, the borough leads the city in new home construction, a phenomenon that is visible in the neat rows of multifamily houses in East New York, in the 850-unit Oceana complex in Brighton Beach, and in the tall apartment buildings rising on Fourth Avenue in Park Slope and throughout Downtown Brooklyn....

Subject: Chile's Economy From: Emma To: All Date Posted: Wed, Apr 28, 2004 at 14:09:38 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/04/28/international/americas/28lett.html Chile, the Rich Kid on the Block (It Starts to Feel Lonely) By LARRY ROHTER SANTIAGO, Chile - Achieving a free trade agreement with the United States was supposed to be the magic moment that certified Chile's entry into the elite club of stable, democratic and prosperous nations. Instead, the new accord, signed in January, has reignited a sometimes anguished debate here about what it means to be Latin American and whether Chile has somehow lost those essential characteristics. Since the beginning of the decade, all three of Chile's neighbors have suffered political and economic convulsions that have forced changes of government. In sharp contrast to Argentina, Bolivia and Peru, not to mention the rest of South America, Chile these days looks 'dull but virtuous,' to borrow the title of a recent report by one Wall Street brokerage house. This is a country where most people actually pay their taxes, laws are rigidly enforced and the police only rarely seek bribes. That is unusual for Latin America and probably should be cause for celebration. Yet, it has the rest of the region looking at Chile as if there is something wrong with it because it is not what the Brazilians call 'bagunça' or what the Argentines call 'quilombo' - passionately messy, turbulent and chaotic. 'The image of Chile for many years has been that of a country that is 'different' and solitary,' the Peruvian political commentator Álvaro Vargas Llosa, wrote in a recent essay that generated much comment here. 'Curiously, although Chile has undertaken a growing trade with the world and attracted investments, it was perceived as 'isolated' in a space that is psychological more than political or economic.' Chileans were abruptly reminded of their unpopularity late last year, when an uprising in neighboring Bolivia overthrew a president who favored exporting natural gas through a Chilean port. Bolivia has been landlocked since losing a war to Chile in 1879, and Chileans were shocked to discover that many Latin Americans - led by the Venezuelan president, Hugo Chávez - supported Bolivia's historical claim to recover a piece of its coastline. It has been this way for at least a generation, Chile as South America's odd man out....

Subject: British Boom and Debt From: Emma To: All Date Posted: Wed, Apr 28, 2004 at 14:06:36 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/04/28/business/worldbusiness/28britain.html British Boom Driven by Personal Debt By ALAN COWELL LONDON - In recent weeks, two snapshot events framed the evolving saga of Britain's booming economy, one of the fastest-growing in the industrialized world. First, in early March, the widow of Stephen Lewis, a 37-year-old engineering worker earning about $39,000 a year, revealed that he had taken his own life after running up $117,000 in debt on 19 separate credit cards. The debt left him facing monthly interest payments in excess of his pretax earnings - a parable of Britain's growing dependence on credit. Then, a month later, word emerged from the other end of the wealth spectrum that Lakshmi Mittal, an Indian-born steel magnate living in Britain, had agreed to spend around $126 million to buy a house in central London - an emblem, if ever there was one, of the soaring cost of real estate. But this is not a tale of rich and poor, even though an annual survey by The Sunday Times of London found that the very uppermost crust of British residents had become richer by an average of 30 percent over the last 12 months - roughly 10 times the average pay raises of the citizenry. (Mr. Mittal ranked fifth on the rich list with an estimated $6.3 billion; first was the Russian tycoon Roman Abramovich with $13.5 billion.) Rather, it is a story that illustrates why Britain's economy keeps on growing, and the perils that set it apart from the economies of continental Europe. While major European countries like France and Germany are stalled, forecasts of the British economy say it will grow 3 to 3.5 percent this year, much of it driven by consumer spending as manufacturing, once the cornerstone, struggles. At one end of the scale, ever higher house prices - illustrated in Mr. Mittal's purchase of a huge spread in Kensington - have sent the average value of a home in Britain soaring by 50 percent since early 2002, to $331,000, the highest figure on record and 5.3 times the average income of homeowners. Despite frequent forecasts of a slowdown, moreover, the average increase is running at up to 18 percent a year, according to Halifax, the mortgage lender, far outstripping consumer price inflation of 1.1 percent. Even the International Monetary Fund sounded a warning recently that the main risk to Britain's economic outlook 'is the possibility of an abrupt correction in the housing market.'' A collapse could have dire consequences, since the large increase in real estate values has persuaded more and more people to increase their mortgages to fuel a boom in consumer spending. (In Britain, consumers can add to their mortgages to finance home improvements and other types of spending using their home, at a higher assessed value, as collateral. In contrast to the United States, interest on mortgage payments is not deductible for tax purposes. ) ...

Subject: Re: British Boom and Debt From: Pete Weis To: Emma Date Posted: Wed, Apr 28, 2004 at 20:23:12 (EDT) Email Address: Not Provided Message: Except for the part about mortgage payments not being deductible, you could probably substitute the 'United States' for 'Britian' and 'New York' for 'London' and put this story in the London Times so the Brits could read about our situation.

Subject: Does the NYT weigh more than a dog? From: Tony Fisher To: All Date Posted: Wed, Apr 28, 2004 at 06:09:44 (EDT) Email Address: goatherdgoat@yahoo.com Message: A guy on the internet is claiming that the New York Times weighs more than a dog. I am not convinced that this is accurate, and I would be grateful if you could tell me approximately how much it weighs so that I can refute his absurd claims. I am not in the US and cannot easily get hold of a copy. Thank you. www.chasemeladies.blogspot.com/#108299256685820672

Subject: Re: Does the NYT weigh more than a dog? From: Neal Martin To: Tony Fisher Date Posted: Thurs, Apr 29, 2004 at 20:54:45 (EDT) Email Address: Not Provided Message: The smallest dog you can think of weighs about as much as a very thick phonebook. The New York Times weighs less than a very thick phonebook. If your internet adversary wasn't being metaphorical, then I defy him to find a dog that weighs less than the NYTimes.

Subject: Re: Does the NYT weigh more than a dog? From: Tony Fisher To: Neal Martin Date Posted: Fri, Apr 30, 2004 at 11:09:05 (EDT) Email Address: goatherdgoat@yahoo.com Message: Thank you Mr Martin. I shall tell him. You can follow the whole pointless controversy here -http://chasemeladies.blogspot.com/2004_04_25_chasemeladies_archive.html#108299256685820672 if you have nothing more pressing to do.

Subject: Re: Does the NYT weigh more than a dog? From: RL To: Tony Fisher Date Posted: Wed, Apr 28, 2004 at 13:03:01 (EDT) Email Address: rafaelloring@yahoo.es Message: You will surely be interested in this article http://slate.msn.com/id/2084685/

Subject: Re: Does the NYT weigh more than a dog? From: Yann To: Tony Fisher Date Posted: Wed, Apr 28, 2004 at 07:03:19 (EDT) Email Address: Not Provided Message: Little piece of information: The French daily “Le Monde” likes to think it is THE reference French daily, and it is rather prestigious among intellectual professions. Every weekend, among other costly supplements, there is a selection of non-translated articles from the “New York Times”. And “Le Monde” is probably very proud to join side by side its name (in Gothic letters) with the American name (idem).

Subject: South Africa's Half Revolution From: Emma To: All Date Posted: Tues, Apr 27, 2004 at 16:53:57 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/04/27/opinion/27MDA.html The Half-Revolution By ZAKES MDA JOHANNESBURG — South Africa is an ailing country. No, not the economy. On the contrary, the economy has been quite buoyant. Since the official end of apartheid 10 years ago today, the country has moved from a siege mode economy to a dynamic and sophisticated one. For the first time in its history South Africa has become a serious player on the global economic stage. Before 1994 the only meaningful role that South Africa had was in mining. The demise of apartheid ushered in a new era of diversification in which South African companies became multinational — listed on the London and the New York Stock Exchanges (not a good thing, the trade union movement has argued in South Africa, but that is a debate for another time) — and are generally doing well. In Europe, South African corporations like Sappi dominate paper manufacturing; in Britain financial and insurance institutions from South Africa perform quite decently in competition with British corporations; in the United States, South African Breweries bought Miller Brewing Company to become SABMiller — making it the second-largest brewery in the world. When Americans drink Miller High Life or Miller Lite, South Africans say 'cheers' all the way to the bank. There are many other indicators that tell us that contrary to prophecies of doom, the South African miracle continues, quietly this time, without the glare of world publicity that accompanied what can now be termed the first miracle: the relatively peaceful transfer of power from a white minority to a black-dominated government. The second miracle manifests itself in the rand's appreciation against major currencies of the world to a three-year high; in an inflation rate that has dropped to its lowest level in 44 years; in an export market in which cars manufactured in South Africa dominate the world's right-hand-drive market; and in the South African corporations that have displaced their European and American counterparts as the top investors in Africa. Even the leaders of the erstwhile apartheid state have acknowledged these successes. F. W. de Klerk, the last white president, recently said in Die Burgher, an Afrikaans newspaper, that despite its flaws post-apartheid South Africa was a much better place than the South Africa of the past. Most of these strides have been made in the last five years, during Thabo Mbeki's presidency. There is certainly more to his presidency than his unorthodox views on AIDS and his high tolerance (some will even say support) of a stinking albatross that hangs around South Africa's neck, which goes under the name of Robert Gabriel Mugabe. Though these two issues seem to define Mr. Mbeki's presidency in the imagination of the West, inside the country he is viewed by influential blacks as one who has put content in reconciliation by marrying what were previously empty slogans with social change. No, South Africa is ailing because it suffers from the twin diseases of instant gratification and conspicuous consumption. Call me naïve, but I see these diseases playing a large role in the spiraling unemployment rate (despite the buoyant economy); in the AIDS pandemic, which seems to be unmanageable; in the high crime rate; and in the looming unrest of the black majority, who have seen little or no benefits of the bullish South Africa trickling down to them....

Subject: Re: South Africa's Half Revolution From: Mik To: Emma Date Posted: Thurs, Apr 29, 2004 at 12:19:28 (EDT) Email Address: Not Provided Message: Wow Emma, what is your interest in South Africa? A few facts about that country. It is today the world's second largest exporter of new car parts. Most parts that are used in assembly lines for VW, Audi, BMW and Mercedes come from SA. The article talks about right hand drive cars but most 3 series BMWs in the US are full imports from SA. Amazing to imagine that Africans make our German luxury cars. GM has recently invested close to a Billion US$ in SA. SAs infrastructure is second to none and has an impressive hightech banking sector. Their hotel resorts are being frequented by movie stars and the Cape Town region is becoming the playground of the rich and famous who want an 'African experience' but still want to stay in well priced high-class hotels with a high class setting. But South Africa should really be known as two-worlds in one country. At an average ice-hockey game (here in North America) we will have about 20,000 spectators seated. Try imagine 20,000 spectators, then you may get the full comprehension of when I say, in a given year, 21,000 people will be murdered in SA. In fact since I started typing this mail (and I can type fast) about 5 to 10 people have been murdered. South Africa's murder rate is equal to a country at war. In the time period of the US invading Iraq until today, the amount of people killed in SA totally dwarfs the amount of people killed in Iraq. Today, the US and the commonwealth countries (including Canada, Britain, Australia and others) have economic sanctions on Zimbabwe due to the Zimbabwe's government sponsored terror on their white farmers as a racist attack on a portion of their own population. Yet Mbeki supports Zimbabwe. When a country that has so much good going for it, yet has a government that persists on neglecting the biggest issues one has to hold reservation as to its leadership.

Subject: I love a Democratic South Africa From: Emma To: Mik Date Posted: Thurs, Apr 29, 2004 at 14:50:11 (EDT) Email Address: Not Provided Message: I love the very idea of a democratic developing South Africa. There are of course difficulties, but there is such hope.

Subject: Re: I love a Democratic South Africa From: Mik To: Emma Date Posted: Thurs, Apr 29, 2004 at 15:32:58 (EDT) Email Address: Not Provided Message: And considering I am a South African - let me add to this and say that I too love a Democratic South Africa. I am very optimistic about its future, not only in taking care of itself but as a catalyst towards the growth of the entire African continent. South Africa is now the single biggest investor into Africa and has already been the main cause for Mozambique and Uganda being the fastest growing countries in the world in 2003. Mozambique reached 12P Growth while Uganda was just behind Mozambique. 15 May (in a couple of weeks time) will be one of the biggest historical decision days in SA's history. On the 15th of May FIFA will decide who will host the 2010 World Cup Soccer - the greatest show on earth. The contenders are Morroco, Egypt and South Africa (only African countries this time). I am totally convinced of who the winner will be. This event, will place SA in the spotlight and in turn be a catalyst for SA to clean up their act, particularly their crime.... cross fingers for me.

Subject: Re: I love a Democratic South Africa From: El Gringo To: Mik Date Posted: Thurs, Apr 29, 2004 at 18:06:04 (EDT) Email Address: nma@hotmail.com Message: '...A kiss on the hand may be quite continental but diamonds are a girl's best friend...';)

Subject: Tax Cuts for Whom? From: Terri To: All Date Posted: Tues, Apr 27, 2004 at 16:29:24 (EDT) Email Address: Not Provided Message: http://www.cbpp.org/4-27-04tax.htm House Tax-Cut Bill For Married Couples Continues Pattern Of Ignoring Lower-Income Families And Disregarding The Deficit - 4/27/04 Legislation coming to the House floor would make permanent the 'marriage penalty relief' tax cuts for middle- and upper-income families enacted in 2001, but leave out the marriage penalty relief for low- and moderate-income families enacted that year; in addition, the legislation includes no offsets and is deficit financed.

Subject: Budget Cuts for Whom? From: Terri To: Terri Date Posted: Tues, Apr 27, 2004 at 16:30:40 (EDT) Email Address: Not Provided Message: http://www.epinet.org/content.cfm/webfeatures_snapshots_04262004 Compassionate, sensible government on the chopping block The Bush Administration’s goals of maintaining the tax cuts, moving toward a balanced budget, and keeping other spending policies intact leave almost no room for domestic discretionary spending on functions such as education, the environment, and medical technology.

Subject: Re: Budget Cuts for Whom? From: Pete Weis To: Terri Date Posted: Tues, Apr 27, 2004 at 21:47:13 (EDT) Email Address: Not Provided Message: Well, the capital gains tax reductions came in very handy for all those having the 'miserable' task of offloading all those stock options - 'trickle down' at its very best. Should be another good Christmas for Saks and Nordstroms'.

Subject: Peru and America - Asparagus From: Emma To: All Date Posted: Mon, Apr 26, 2004 at 17:28:53 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/04/25/national/25ASPA.html War on Peruvian Drugs Takes a Victim: U.S. Asparagus By TIMOTHY EGAN TOPPENISH, Wash. — After 55 years of packing Eastern Washington asparagus, the Del Monte Foods factory here moved operations to Peru last year, eliminating 365 jobs. The company said it could get asparagus cheaper and year-round there. As the global economy churns, nearly every sector has a story about American jobs landing on cheaper shores. But what happened to the American asparagus industry is rare, the farmers here say, because it became a casualty of the government's war on drugs. To reduce the flow of cocaine into this country by encouraging farmers in Peru to grow food instead of coca, the United States in the early 1990's started to subsidize a year-round Peruvian asparagus industry, and since then American processing plants have closed and hundreds of farmers have gone out of business. One result is that Americans are eating more asparagus, because it is available fresh at all times. But the growth has been in Peruvian asparagus supported by American taxpayers. 'We've created this booming asparagus industry in Peru, resulting in the demise of a century-old industry in America,' said Alan Schreiber, director of the Washington Asparagus Commission. 'And I've yet to hear anyone from the government tell me with a straight face that it has reduced the amount of cocaine coming into this country.' Government officials respond that it was never their intent to hobble an American industry. But they say a thriving asparagus industry in Peru stabilizes the country and provides an incentive to grow something other than coca leaves, the raw material of a drug used regularly by about 2.8 million Americans. 'Apologies to the people affected,' said David Murray, special assistant for the White House's drug policy office, 'but the idea of creating alternative development, countrywide, does serve our purposes.' Mr. Murray said that net cultivation of coca leaf in Peru had fallen considerably, but that it was unclear how much of a role the alternative crop incentives had played. Here in Washington, the nation's second-leading asparagus producer, after California, about 17,000 acres have been plowed under since a 1991 trade act prompted a flood of less-expensive Peruvian asparagus, a 55 percent decline in acreage. During the same period, Peruvian asparagus exports to the United States have grown to 110 million pounds from 4 million pounds. Two of the biggest asparagus processing factories in the United States have closed. The Del Monte plant in Toppenish is still packing other vegetables, but it buys and packs its asparagus in Peru. The other factory was in Walla Walla....

Subject: South African Development From: Emma To: All Date Posted: Mon, Apr 26, 2004 at 16:51:27 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/04/26/international/africa/26AFRI.html?hp Decade of Democracy Fills Gaps in South Africa By MICHAEL WINES and SHARON LaFRANIERE SOSHANGUVE, South Africa — Some days are unforgettable, and so it is that Meisie Ndlovu and John Henshall both recall what they were doing 10 years ago on April 26, 1994, when South Africa won its freedom. Mr. Henshall stood in a broiling sun in his all-white suburb, part of a two-mile line of voters electing the first democratic president. Ms. Ndlovu stood in a line in her all-black town, listening to neighbors exult that democracy meant free food, forever, for everyone. Mr. Henshall was skeptical that black rule would be as bad as some neighbors feared. Ms. Ndlovu was skeptical that it would be as good as neighbors predicted. 'I didn't believe it,' she said, laughing. 'I said, `This government is going to be poor.' I said, `I am not educated, but I can think.' ' As it turned out, they were both right. This is a tale about the Ndlovus, black and striving, and the Henshalls, white and coping, and what a decade of democracy has brought them and their country. The two families are not acquainted. Indeed, they are separated, like most blacks and whites here, by huge racial and economic divides. But if a lesson can be drawn from a decade of multiracial democracy, a transformation hailed for its almost miraculous absence of rancor, it is that families like these are far more alike today than they were before 1994 — both in aspirations and fears. For Ms. Ndlovu, a plump, round-faced woman with a quick laugh, there is no mistaking what 10 years of freedom have done. Just look at her toolshed. Set behind her brick home just outside this city of 146,000, the shed is 10 feet by 10 feet, a listing shambles of rusted corrugated iron and sheet metal, unexceptional but for this: before it was a toolshed, the Ndlovu family lived there for five years. Under apartheid, Ms. Ndlovu was an illiterate black domestic in a white household. Today she runs her own construction company, laying asphalt and building fences on freeway projects. Her three-bedroom home has new living-room furniture and a carved wood door....

Subject: An Inside View From: Pete Weis To: All Date Posted: Sun, Apr 25, 2004 at 11:45:19 (EDT) Email Address: Not Provided Message: 'I know that sounds crazy, but the stock market has gone from a place where investors actually own part of a company and have a say in their management, to a market designed to enrich insiders by allowing them to sell shares they buy cheaply through options. Companies continuously issue new shares to their managers without asking their existing shareholders. Those managers then leak that stock to the market a little at a time. It's unlimited dilution of existing shareholders' stakes, death by a thousand dilutive cuts. If that isn't a scam, I don't know what is. Individual shareholders have nothing but the chance to sell it to the next sucker. A mutual fund buys one million shares of a company with your and your coworkers' money. You own 1 percent of the company. Six weeks later you own less, and all that money went to insiders, not to the company. And no one asked your permission, and you didn't know you got diluted or by how much till 90 days after the fact if that soon.' 'When Broadcast.com went public, we raised a lot of money that certainly helped us grow as a company. But once you get past the raising capital part of the market, the stock market becomes not only inefficient, but as close to a Ponzi scheme as you can get.' So says Mark Cuban on his site 'blog maverick' in a piece entitled 'The Stock Market'. For anyone not familiar, he's the owner of the Dallas Mavericks and the founder and seller of a number of high tech companies. He talks about his experiences with the 'road show' for Broadcast.com which became an IPO in 1995. He also describes his growing awareness over the years of how the stock markets work from his 'inside' perspective. This piece is actually the forward to the book, 'The Number' by Alex Berenson, which Cuban wrote and has posted on his website. To read the entire piece, scroll down to this April 13 post by Cuban on his site blogmaverick.com. This is not the kind of view of our present stock markets you are likely to see on CNBC or in the Wallstreet Journal. There have been many reports in recent months about 'record inflows' into equity mutual funds by small investors. Yet the markets have basically traveled sideways during the first 4 months of 2004. Obviously some have been selling at an equal rate. What happens when small investor inflows have finally become exhausted, to say nothing of higher interest rates or a continued poor labor market's effect on the stock market? Who will be buying then? There are those who say that PE ratio's are not really an important metric anymore and in today's market, I'd have to agree. It's much more about what particular stock is getting the most hype - which stock is on more 'radar screens'. The problem is that this can only go on for so long since all 'Ponzi' scenarios crash.

Subject: Re: An Inside View From: Mik To: Pete Weis Date Posted: Mon, Apr 26, 2004 at 13:08:21 (EDT) Email Address: Not Provided Message: Your post, '...There are those who say that PE ratio's are not really an important metric anymore and in today's market, I'd have to agree....' Well I disagree. I believe we are now implementing the 'Bigger Fool Theory.' Goes like this, 'I must be a fool to buy this stock, but some bigger fool is going to buy it from me in the future.' Is this not a modern sophisticated version of a pyramid scheme?

Subject: Re: An Inside View From: Pete Weis To: Mik Date Posted: Mon, Apr 26, 2004 at 14:45:47 (EDT) Email Address: Not Provided Message: Yes. Maybe not so modern though.

Subject: Re: An Inside View From: Mik To: Pete Weis Date Posted: Thurs, Apr 29, 2004 at 12:03:41 (EDT) Email Address: Not Provided Message: Pete, Please correct my understanding on this issue: The stock exchange first started (in the 1800's) as literally people investing in the purchase of inventory stock. ie: a company that had just set themselves up, need money to purchase a new shipment of stock, they would offer 'stock investments' on the stock exchange. Individuals would invest in that shipment and reap the rewards once the shipment arrived and the stock was sold. As time went by - so this concept changed. But the P:E ration would be a conservative indicator of how long you would wait until you make your money back on an investment. The norm would be up to 6 years up until the 1960's. Which kind of made sense - we would view investing into a company in the same way we would view investing into say a house. Today the P:E has in many cases reached 80 years (I believe Microsoft is well over 100 years). Meaning people are no longer investing into a company with the intention of making their money back, but rather investing to speculate.... 'the bigger fool theory.' But this is okay - after all our money is not even backed by gold. But what happend when the P:E rationis abused, or stock purchases become so disconnected from the true value of the company and we now enter a world of abuse (which I believe lead to the IT bubble) Should we not stop and question our system? Comments? .... hmmm I can just imagine Econochick doind some serious typing on this one.

Subject: Re: An Inside View From: Pete Weis To: Mik Date Posted: Thurs, Apr 29, 2004 at 21:28:24 (EDT) Email Address: Not Provided Message: Mik. I'm not sure to which stock market you are refering. I'm not up to snuff on really old markets. I believe stock markets have been in existence in Europe for many centuries. The New York Stock Exchange was founded around 1792 and the first Federal Bank (in New York) only a few years after to help provide capital to American companies participating in the early industrial revolution. The NYSE, of course, made it possible for investors to either trade in commodities (which had been already happening for some time) or purchase a share of ownership in a particular company or business venture. I think what you are talking about when you refer to 'inventory stock' are commodities such as agricultural goods like sugar, cattle, etc. The early exchange resembled an outdoor street auction where comodities were sold to the highest bidder - later it moved indoors. With the industrial revolution came the need to raise cash to buy machinery and build factories. So selling shares on an exchange to raise the necessary capital eventually became a larger part of the business of the exchanges than the selling and buying of commodities (the shift from an agrarian economy to and industrial one). Others who post on this site probably have more detailed knowledge of the oldest exchanges. I've read material written by market analysts who talk about estimating how many years would be needed to get a certain return on investment given the price of the stock, the expected growth in the company and expected earnings as well as other factors. But that seems like so much guesswork with so many variables that it's not very reliable. You are saying that the market as a whole and some stocks in particular are grossly overvalued. I agree. It has been argued by those who are still bullish on the markets that certain factors validate a historically high PE of over 20 (for the S&P). They say low interest rates make higher PE's valid. The last time interest rates were this low, in the early sixties, The US had a large trade surplus, a balanced budget and a very strong labor market. Almost everything sold in America was made in America. The US produced more than half of the world's oil, steel, wheat, corn and automobiles. Yet the average S&P PE in the early 60's ran in the mid teens. In the thirties through the 40's and for about a decade in the 70's the average S&P PE ran well under 10. In the last 100 years the S&P got above 20 only twice - in 1929 (slightly above 20) and in the late 90's to the present. If low interest rates didn't result in PE's above 20 in the early sixties, I don't see why they should today with our present economy. Another argument says that our present high level of productivity validates higher PE's. Excuse me, but higher productivity should lead to higher earnings, thereby lowering PE's. Certainly higher productivity does not validate higher PE's - that defies reason. I agree with you, Mik, that investing has become fantasy 'speculation' and that we're about to run out of fools. Someone once said (when it comes to investing in the markets) it's OK to panic - just make sure you panic early and not late. This is one of those rare times when it is extremely important to pay attention to what is going on in this economy and these markets. There is no such thing as a 'balanced portfolio' at this present time unless one has some significant money in a fund that shorts the market to go along with an index fund. Funds that trade bonds are very risky and have little upside potential in my opinion. I don't know about you but I am reading about a 'flight' to cash among a lot of big investors (Buffet being one on these). There's a lot of talk about the beginings of a selloff of tradeable assets due to high debt and rising interest rates.

Subject: Thanks Pete From: Mik To: Pete Weis Date Posted: Fri, Apr 30, 2004 at 16:09:19 (EDT) Email Address: Not Provided Message: Thanks for your insight, Just a quick question - I believe you are an Aussie. Is your knowledge of Rugby as good as your knowledge on the stock exchange? ps: I like that one statement, 'it's OK to panic - just make sure you panic early and not late.'

Subject: Re: Thanks Pete From: Pete Weis To: Mik Date Posted: Fri, Apr 30, 2004 at 20:30:36 (EDT) Email Address: Not Provided Message: Mik. I'm not an Aussie although I have a lot of admiration for the Aussies. I'm a fan of Ian Macfarlane who I believe is one of the world's finest central bankers. I read the Aussie press from time to time because they give an outside view of events in the world which is often different from that of the US press. We often forget that news media are businesses first and foremost. They are very much shaped by there audiences (customers). If they report about subjects in a way which does not please their costomers then their business suffers. If we read the press from only are own country (I'm an American) I believe it puts us at a great disadvantage - whether we're trying to get a feel for where the economy or markets are headed or get a balanced view of geopolitical issues. For those who get their information from only one very market focused, news media source (Fox) as perhaps, presently, about one third of US citizens do then (IMO) they are at a very severe disadvantage. Incidently, Mik, I believe you said you were Canadian and the Canadian press is another important source of information for me, as well as the British news media. The internet has made this all possible. For those of us (it sounds like you do) who spend the time investigating beyond what is presented on 'Bubble Vision' (believe Bill Fleckenstein out of Seattle coined that term) its been amazing. Now if only I could learn German, French, Italian, Chinese and Japanese. There's always the Asian Times out of Singapore.

Subject: Japanese Children From: Emma To: All Date Posted: Fri, Apr 23, 2004 at 18:14:50 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/04/23/business/worldbusiness/23kidfashion.html Big Money in Small Fashions By TODD ZAUN TOKYO - Just over a decade ago, Yuzo Narumiya, in his mid-50's and looking for a way to revive his family's kimono wholesaling business, had what sounded to many like a really bad idea. Just as Japan's economy was turning down and consumers were cutting back, Mr. Narumiya was drawing up plans to market a line of expensive clothing to a rapidly shrinking segment of the population with no disposable income, a group of customers who often cannot see over the counters and need help reaching the upper racks. That unlikely business plan has put Mr. Narumiya, now 67, at the center of one of the most vibrant areas of Japan's retail sector with a chain of shops selling $80 blouses and $120 skirts to fashion-conscious 9- to 14-year-old girls. With brands like Mezzo Piano, Angel Blue and Pom Ponette, his company, Narumiya International, has tapped a surprisingly rich vein in Japan's otherwise dry retail market. In the year ended Jan. 31, Narumiya International's sales grew 19 percent, to 35 billion yen ($320 million). Net profit rose 77 percent, to 2.12 billion yen, a jump driven by broad reductions in sales and administrative expenses along with the increased sales, a company spokesman, Masao Eguchi, said. The company now has 850 shops in Japan, up from 586 two years ago. Narumiya International recently opened its first store overseas, in Seoul, South Korea, and the privately held company is preparing to offer shares to the public later this year. Still, it is no wonder that the idea of marketing high-end fashions to girls was at first greeted with skepticism. Because of the country's declining birth rate, the population of children 14 and younger is expected to fall to 17 million in 2010 from 27 million in the early 1980's. But to Mr. Narumiya, who worked for the upscale Japanese department store Takashimaya before taking over his father's kimono business, fewer children meant that parents would be more likely to spoil the ones they had. Besides, the graying population was increasing the ranks of doting grandparents. 'Many older people don't spend a lot on themselves,' Mr. Narumiya said, 'but there's almost no limit to how much they'll spend on their grandchildren.' ...

Subject: Re: Japanese Children From: Mik To: Emma Date Posted: Mon, Apr 26, 2004 at 12:30:51 (EDT) Email Address: Not Provided Message: Wow - very clever. How to make the most of a situation. Isn't it amazing how people tend to see all the negatives first - all it takes is someone with a good understanding to realise the exact opposite of conventional wisdom holds true.

Subject: Interest Rate Changes From: Jennifer To: All Date Posted: Fri, Apr 23, 2004 at 16:40:40 (EDT) Email Address: Not Provided Message: http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_berry&sid=aesLIV1PXA7M Fed Probably Won't Raise Rates at a Rapid Pace: John M. Berry - Bloomberg Federal Reserve Chairman Alan Greenspan provided a strong hint in his congressional testimony Wednesday that whenever the Fed makes its first move to raise interest rates, it likely won't be the beginning of a rapid run- up in rates. Greenspan explained that the central bank has kept its 1 percent target for overnight lending rates in place for so long, not because nothing has been happening, but because Fed officials are thinking ``in terms of strategies.'' While Greenspan didn't spell it all out, the Fed's strategy has been to keep rates extraordinarily low to keep inflation from turning into deflation and at the same time to spur lagging economic growth. ``The crucial difference between now and in the past is an extraordinary productivity acceleration,'' the Fed chairman told one questioner who, like some economists, appeared puzzled as to why the Fed wasn't already busy raising rates. ``Price pressures are not anywhere near what they would be under normal circumstances,'' Greenspan said -- normal being the recoveries of the past in which labor costs were rising, not falling, and doing so when inflation was already higher than the Fed wished it to be. And price pressures are not going to return to ``normal'' until productivity growth slows substantially and the pace of wage increases accelerates noticeably. Greenspan predicted that process will begin before long, and that some of the surge in profits as a share of national income will begin to be transferred to workers in the form of higher pay. Labor Costs How fast the Fed eventually chooses to raise rates and how far will depend importantly on whether and to what degree there is a turnaround in the trend in labor costs. At some points in his testimony, it wasn't entirely clear whether the chairman was describing what had happened in the past or what might happen in the future. Nevertheless, there isn't any reason to think the Fed will change its policymaking approach, including the careful balancing of the benefits and costs associated with a series of rate increases. As Greenspan put it, ``the issue of addressing a particular potential inflationary problem has got to take into consideration all of the various elements involved in that current situation. And remember that any particular monetary policy that you embark on has risks. And you have to balance the risks against the benefits. ``When you have the benefit of a very significant increase in output per hour, it means that you can go in a much more measured pace than you would (have been) required to go in the past.'' ...

Subject: Re: Interest Rate Changes From: Pete Weis To: Jennifer Date Posted: Sat, Apr 24, 2004 at 10:34:15 (EDT) Email Address: Not Provided Message: I don't believe the Fed will raise rates any time in the near future. The bond market will do it for them. In fact more sell off and little to no buying activity in the bond market could very likely raise rates much higher than the Fed would like to see them go. While most everyone is saying the Fed's most likely next step will be to raise rates, it may be that their next move will be to lower the Fed rate in an attempt to temporarily reassure bond investors. At these levels there is not alot the Fed can do. IMO,the market will take over from here.

Subject: Re: Interest Rate Changes From: DW To: Jennifer Date Posted: Fri, Apr 23, 2004 at 21:46:05 (EDT) Email Address: Not Provided Message: If the Fed decided to 'raise' interest rates, exactly what would they do? just curious/

Subject: I am a Foul Mouth Troll From: DW To: DW Date Posted: Mon, Apr 26, 2004 at 13:57:02 (EDT) Email Address: Not Provided Message: I am a foul mouth mean spirited ugly as sin troll.

Subject: Re: Interest Rate Changes From: Paul G. Brown To: DW Date Posted: Sat, Apr 24, 2004 at 14:41:14 (EDT) Email Address: Not Provided Message: Just to shut you up.

Subject: Re: Interest Rate Changes From: DW To: Paul G. Brown Date Posted: Sat, Apr 24, 2004 at 16:09:19 (EDT) Email Address: Not Provided Message: Wow, nice work, Paul G. Brown. But just one correction to your article. The discount rate is not always below the federal funds rate. It is actually higher now. So maybe you should shut the @#$% up. Just anohter example of how you PK boot-lickers will beleive anything you read.

Subject: Ugly Mean Troll at That From: DW the Troll To: DW Date Posted: Mon, Apr 26, 2004 at 15:02:47 (EDT) Email Address: Not Provided Message: Go to hell trolly.

Subject: Re: Ugly Mean Troll at That From: EL Gringo To: DW the Troll Date Posted: Mon, Apr 26, 2004 at 17:01:10 (EDT) Email Address: nma@hotmail.com Message: Frustrated...?

Subject: Re: Ugly Mean Troll at That From: JD To: EL Gringo Date Posted: Tues, Apr 27, 2004 at 14:50:19 (EDT) Email Address: Not Provided Message: Why put up with fowl mouthed asses? DW is just such a creature.

Subject: Re: Interest Rate Changes From: El Gringo To: DW Date Posted: Sat, Apr 24, 2004 at 20:15:37 (EDT) Email Address: nma@hotmail.com Message: Hi Donald...

Subject: Re: Interest Rate Changes From: Paul G. Brown To: DW Date Posted: Sat, Apr 24, 2004 at 19:19:35 (EDT) Email Address: Not Provided Message: Well DW, if you knew the answer to the question, why did you ask it? And second, this isn't my article. (Although I confess, I didn't spot the 'always' - my bad.) I literally whacked Google's 'I Feel Lucky'. The Discount Rate has been set to 1% higher than the target Funds rate since January 2003 - a relatively recent policy decision. The idea (IIRC) was to settle the Fed as a 'lender of last resort' and to reduce the advantage bigger banks had over other financial institutions (for whom the discount window is not open). BTW: If you look at the postings here you'll see that we're not 'PK boot-lickers'. But I detect some hostility in your posts, so I promise not to plague you with my ignorance again.

Subject: Re: Interest Rate Changes From: DW To: Paul G. Brown Date Posted: Sat, Apr 24, 2004 at 21:15:31 (EDT) Email Address: Not Provided Message: Nicely done. That wasn't so painful after all, was it?

Subject: Re: Interest Rate Changes From: Mik To: DW Date Posted: Mon, Apr 26, 2004 at 12:24:45 (EDT) Email Address: Not Provided Message: Soooo... DW, what does the word 'suspisions' mean?

Subject: BullandBearWise From: Pete Weis To: All Date Posted: Fri, Apr 23, 2004 at 09:30:55 (EDT) Email Address: Not Provided Message: For anyone who might be interested, the site BullandBearWise provides alot of very good free info on the economy and markets. It provides a very large number of updated 5 year charts which track almost any aspect of the economy or markets. It requests 'donations' for those who 'find themselves using it regularly'. Very similar concept to sites like Spybot (which searches for spyware which has imbedded itself on one's computer).

Subject: Inflation... inflation?.... INFLATION? From: Mik To: All Date Posted: Thurs, Apr 22, 2004 at 17:33:07 (EDT) Email Address: Not Provided Message: I have just read Krugman's latest article. For starters I am very happy that he has gone back to economics and steered away from politics.... Hhhmm do you think he read our postings? The interesting part about his article is that I see no mention of inflation. We have discussed inflation here before, but I stand by what I said at the end of last year and I still stand by it today. The US Dollar has still not recovered to the strength it had - the US economy has a serious trade deficit and as the stream of foreign goods continue to arrive and companies re-stock so they will have to pay the new inflated prices. This to me is like stating the obvious. Why has there not been more emphasis on monitoring inflation and the link to interest rates?

Subject: Re: Inflation... inflation?.... INFLATION? From: Paul G. Brown To: Mik Date Posted: Sat, Apr 24, 2004 at 14:23:51 (EDT) Email Address: Not Provided Message: Well, PK's column was an exercise in divining Greenspan's entrails to try to predict interest rates. Frankly, PK's answer is kind of obvious. Currently, interest rates are at historically low levels. So all he's saying is something like 'Hey. It's raining now. I predict it's going to stop soon.' Anyway: interest rates and inflation. Well, one reason that there isn't a 'lot of attention' paid to the relationship between them is that it isn't immediately obvious what the nature of that relationship is. By contrast, what you suggest about the relationship between the value of the US Dollar and domestic price levels is economic orthodoxy. As the exchange rate weakens[1] the price of imports increases, leading to overall price increases in the economy. This should show up in most metrics (except possibly commodity price indexes) and indeed in recent times it has. Also, by itself, a little price push inflation isn't necessarily a bad thing. Price inflation can stimulate consumer demand (more utility in spending now than holding cash and getting less for it later), and the same exchange rate fluctuations also increase the value of US exports which stimulates domestic supply/investment. If the various theories are correct long term trade trends back to a balanced equilibrium; the adjustment mechanism being the exchange rate. When I was studying economics I took a course titled 'Inflation: Theory and Practice'. Summarizing 16 weeks of lectures; 'it's the expectations, stupid'. That is, when we all begin to factor in anticipated price increase, prices begins to spiral up, sometimes with wild swings. Without clear signals from the market it becomes harder and harder for individuals to judge investment / consumption decisions. Also, while interest rates are only one of a fairly large number of (sometimes mysterious) factors that affect market prices, market prices are usually a pretty good indicator of what is going to happen to interest rates. Your text-book response to price pull inflation is to increase interest rates (the mechanism being the overnight Discount Rate) to reduce demand. PK's point is that assuming; i. short term GDP growth at about the same rate, ii. a continueing decline in the value of the US Dollar and iii. a return to long term bond yields (regression to the mean), it follows that interest rates will rise. And for a nation carrying the debt that the US is, that's bad, regardless of what happens to domestic price levels. [1] If there is one bit of macro-economic jargon that's truly unfortunate, it's the use of terms 'weak' and 'strong' exchange rates. These words color the discussion. I mean, who would want to be 'weak'? Yet at times, a 'weaker' exchange rate is just what the doctor ordered.

Subject: Re: Inflation... inflation?.... INFLATION? From: DW To: Mik Date Posted: Fri, Apr 23, 2004 at 21:39:28 (EDT) Email Address: Not Provided Message: Look, we can't do your homework for you. Please do a google search! Paul G. Brown - your'e with me on this, right?

Subject: Re: Inflation... inflation?.... INFLATION? From: jimsum To: Mik Date Posted: Fri, Apr 23, 2004 at 11:16:02 (EDT) Email Address: jim.summers@rogers.com Message: The lower exchange rate for the U.S. dollar has not had much effect yet, because foreign companies have been absorbing the damage from the exchange rate moves. Taking a personal example, the Toyota Prius costs $20,000 in the U.S. and costs $30,000 in Canada; these prices are the same as last year before the Canadian dollar appreciated by 20%. There has been a small adjustment in the U.S. price (an increase of $300), but this still doesn't reflect the real change in the exchange rates. As another example, Canadian oil companies are all quick to blame to exchange rate for lower revenues for sales to the U.S. But none of them want to talk about their record profits refining and selling gas in Canada. Right now, losses caused by not increasing American prices are being covered by not lowering prices outside America; and it will take time before competition forces prices to change in line with the exchange rate changes. At any rate, lately American inflation has been 'unexpectedly' high and Canadian inflation has been 'unexpectedly' low, which shows that exchange rate adjustments are happening. I expect this situation will continue.

Subject: Nice Analysis From: Emma To: jimsum Date Posted: Fri, Apr 23, 2004 at 14:33:56 (EDT) Email Address: Not Provided Message: Agreed, the exchange rate adjustment is slow to work but should work. Canada and Australia and Japan are not fully raising prices as the dollar declines in value, but prices of exports to America have slowly risen.

Subject: Nice Analysis From: Emma To: jimsum Date Posted: Fri, Apr 23, 2004 at 14:31:24 (EDT) Email Address: Not Provided Message: Agreed, the exchange rate adjustment is slow to work but should work.

Subject: Inflation and Interest Rates From: Emma To: Mik Date Posted: Thurs, Apr 22, 2004 at 17:54:09 (EDT) Email Address: Not Provided Message: PK did discuss inflation in the wonderful article. Read though again, interest rates move up to counter inflation. No inflation, no rise in interest rates. PK is worried about inflation and rising rates. Also, the politics are implicit in the article. Political economy is the study anbd PK is a master at a time when we have sore need of such a teacher.

Subject: Re: Inflation and Interest Rates From: Mik To: Emma Date Posted: Fri, Apr 23, 2004 at 13:51:11 (EDT) Email Address: Not Provided Message: Emma - I agree with you and remember an article some time back. I'm referring to his latest article. It talks about increased interest rates, the bond market etc - but it does not introduce the effect on inflation. There is definately inflationary pressure going on and an increase in rates may well be the a proactive event. My curiouslity is whether the current interest rate increase is pro-active to inflation or reactive to inflation. I'm just surprised that PK discussed all issues around the interest rate increase but totally left out any reference to inflation. With a very high GDP growth and a weakened currency I still believe we are going to see more inflation pressure and perhaps still a further increase in interest rates towards the end of the year.

Subject: Inflation From: Emma To: Mik Date Posted: Fri, Apr 23, 2004 at 14:29:43 (EDT) Email Address: Not Provided Message: MIK - Perhaps I do not understand completely. Inflation builds slowly and has only very recently ticked up. Raising interest would be designed to limit a rise in inflation and should be successful other than a built in increase because of the growing fiscal deficit. A 7% rate for the 10 year treasury would probably mean 2.5% inflation. We should expect more in the long run if the deficit continues to expand.

Subject: Re: Inflation From: Mik To: Emma Date Posted: Fri, Apr 23, 2004 at 16:42:52 (EDT) Email Address: Not Provided Message: Correcto!... So we have inflation and fiscal deficit increases. And hence a raising interest rate to accommodate. My only point is I would like PK to have raised and discussed the issue of inflation when discussing interest rates. It's only because I have a belief that there is not enough emphasis on monitoring of inflation and I am looking for some long term predictions. This is important to me as I intend to sell a product in the US and my pricing will need to accommodate long run inflation predictions and interest rate adjustments.

Subject: Adjusting Prices From: Emma To: Mik Date Posted: Fri, Apr 23, 2004 at 17:06:39 (EDT) Email Address: Not Provided Message: MIK - Well you are quite clever and will liekly fare nicely. But, you can not predict macro-economic data closely enough to price for a year or 5 in future. Price for a few months and allow for adjustments. Plan to be in the market for a life, but price for months.

Subject: Worry About the Product From: Emma To: Emma Date Posted: Fri, Apr 23, 2004 at 17:10:22 (EDT) Email Address: Not Provided Message: MIK. Have a competitive product, have competitive marketing, and all will be well as you make adjustments in price.

Subject: Wealthy Fill Top Colleges From: Emma To: All Date Posted: Thurs, Apr 22, 2004 at 15:45:59 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/04/22/education/22COLL.html?hp As Wealthy Fill Top Colleges, New Efforts to Level the Field By DAVID LEONHARDT ANN ARBOR, Mich. — At prestigious universities around the country, from flagship state colleges to the Ivy League, more and more students from upper-income families are edging out those from the middle class, according to university data. The change is fast becoming one of the biggest issues in higher education. More members of this year's freshman class at the University of Michigan have parents making at least $200,000 a year than have parents making less than the national median of about $53,000, according to a survey of Michigan students. At the most selective private universities across the country, more fathers of freshmen are doctors than are hourly workers, teachers, clergy members, farmers or members of the military — combined. Experts say the change in the student population is a result of both steep tuition increases and the phenomenal efforts many wealthy parents put into preparing their children to apply to the best schools. It is easy to see here, where BMW 3-series sedans are everywhere and students pay up to $800 a month to live off campus, enough to rent an entire house in parts of Michigan. Some colleges are starting to take action. Officials long accustomed to discussing racial diversity are instead taking steps to improve economic diversity. They say they are worried that their universities are reproducing social advantage instead of serving as an engine of mobility. 'It's very much an issue of fundamental fairness,' Lawrence H. Summers, the president of Harvard, said in an interview. 'An important purpose of institutions like Harvard is to give everybody a shot at the American dream.' The University of Maryland recently said it would no longer ask students from families making less than $21,000 a year to take out loans, and would instead give them scholarships to cover tuition. Officials at Harvard, the University of North Carolina and the University of Virginia all recently announced similar, even more generous policies. Stanford and Yale have altered early-admission programs, partly out of a concern that they give an unfair advantage to students who do not need to compare financial-aid offers before they can commit to a college. Over all, at the 42 most selective state universities, including the flagship campuses in California, Colorado, Illinois, Michigan and New York, 40 percent of this year's freshmen come from families making more than $100,000, up from about 32 percent in 1999, according to the Higher Education Research Institute. Nationwide, fewer than 20 percent of families make that much money....

Subject: Losing Our Research Edge? From: Emma To: All Date Posted: Thurs, Apr 22, 2004 at 15:40:22 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/04/22/opinion/22FRIE.html Losing Our Edge? By THOMAS L. FRIEDMAN I was just out in Silicon Valley, checking in with high-tech entrepreneurs about the state of their business. I wouldn't say they were universally gloomy, but I did detect something I hadn't detected before: a real undertow of concern that America is losing its competitive edge vis-à-vis China, India, Japan and other Asian tigers, and that the Bush team is deaf, dumb and blind to this situation. Several executives explained to me that they were opening new plants in Asia — not because of cheaper labor. Labor is a small component now in an automated high-tech manufacturing plant. It is because governments in these countries are so eager for employment and the transfer of technology to their young populations that they are offering huge tax holidays for U.S. manufacturers who will set up shop. Because most of these countries also offer some form of national health insurance, U.S. companies shed that huge open liability as well. Other executives complained bitterly that the Department of Homeland Security is making it so hard for legitimate foreigners to get visas to study or work in America that many have given up the age-old dream of coming here. Instead, they are studying in England and other Western European nations, and even China. This is leading to a twofold disaster. First, one of America's greatest assets — its ability to skim the cream off the first-round intellectual draft choices from around the world and bring them to our shores to innovate — will be diminished, and that in turn will shrink our talent pool. And second, we could lose a whole generation of foreigners who would normally come here to study, and then would take American ideas and American relationships back home. In a decade we will feel that loss in America's standing around the world. Still others pointed out that the percentage of Americans graduating with bachelor's degrees in science and engineering is less than half of the comparable percentage in China and Japan, and that U.S. government investments are flagging in basic research in physics, chemistry and engineering. Anyone who thinks that all the Indian and Chinese techies are doing is answering call-center phones or solving tech problems for Dell customers is sadly mistaken. U.S. firms are moving serious research and development to India and China....

Subject: Retiring Women From: Emma To: All Date Posted: Thurs, Apr 22, 2004 at 15:32:31 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/04/13/business/retirement/13SING.html?ex=1082779200&en=da11f1c6dec67932&ei=5070 On Their Own, in the Same Boat By MARY DUENWALD and BERNARD STAMLER SILOY ABDOOL of the Bronx started putting money aside for retirement when she was in her mid-30's. Two years ago, she left her teaching job after she had a baby and could not find good, affordable child care. Now she is 43, separated from her husband and her nest egg has been used up. 'If I go back, I'm going to have to double up,' Ms. Abdool said, referring to the pace of her savings. 'I don't know how I'm going to do it.' Kiki Peppard, a divorced mother of two in Effort, Pa., has been working since she was 16 years old at a series of jobs — administrative assistant, secretary, bookkeeper, office manager. Now she is 49 and, as a telephone operator at East Stroudsburg University in Pennsylvania, she takes home $650 every two weeks. Saving for retirement is 'not even an option,' she said. 'I can only think of the day-to-day.' Kathy Braddock, 47, is co-owner of a successful residential real estate consulting business in Manhattan, but she has negligible savings for retirement — her nest egg disappeared in her divorce. Creating her own pension, she said, was something she just did not think about. 'If you'd asked me 30 years ago if I ever thought I'd be in the financial situation I'm in, I would have said no,' Ms. Braddock said. 'At this point, I can never catch up, so I figure I'll have to die young or keep working,' she said, laughing. 'Or I hope my kids strike it rich and help me.' For years, economists have debated whether baby boomers would have saved enough when they reached retirement age. Now that day is close at hand. And for one slice of that generation — single women — the answer is becoming depressingly clear. Two private groups that study retirement issues, the Employee Benefit Research Institute and the Milbank Memorial Fund, recently collaborated on a study that analyzed income and asset data to calculate how much more members of different households would need to save, on top of what they were currently saving, to provide for basic living expenses in retirement, including health costs not covered by Medicare. They found that, at all ages and income levels, single women faced a steeper climb than couples or single men. The difference is bigger for women in the lower middle class. And for women at the lowest income levels, the findings are particularly bleak: Economists predicted that this group would never be able to save enough, no matter how early they started or how much they tried — even if they increased their savings by 25 percent of their income. The problem is not an isolated one. About 13.4 million women — more than a third of the women born during the baby boom years, from 1946 to 1964 — are likely to be single when they retire over the next few decades, according to Jack L. VanDerhei, an economics professor at the Fox School of Business and Management at Temple University in Philadelphia. He was a co-author of the study for the Employee Benefit Research Institute in Washington. The disadvantage in savings arises from a tangle of social and economic forces, said Sheryl Burt Ruzek, a professor of public health and women's studies at Temple....

Subject: marriage tax 'relief' From: gylangirl To: All Date Posted: Wed, Apr 21, 2004 at 17:20:38 (EDT) Email Address: Not Provided Message: When's Paul Krugman gonna write an article exposing the lie that married women can finally go back to paid work now that the Bush administration got rid of the marriage tax? They didn't get rid of it. They used it as an excuse to give wealthy married men [whose wives don't earn any income and therefore by definition don't even pay the marriage tax] even more tax breaks. But they left the 'secondary earner' category intact so that married employed women still have to pay their husbands higher tax rate on their smaller incomes. A 40% cut phased in over several years and then disappears does nothing to help mothers who want to get back into the paid workforce when their kids have grown. And why isn't childcare a deductible business expense yet? And why can't working wives split mortgage interest deuctions the way business partners can on schedule E? I wish Paul Krugman would stand up for women, who pay the highest marginal taxes, and write an article about it.

Subject: Important Argument From: Emma To: gylangirl Date Posted: Thurs, Apr 22, 2004 at 15:30:00 (EDT) Email Address: Not Provided Message: You go girl.... Wealthy women may work, but they are not the problem here. The problem is middle class women, who also are more vulnerable to lower Social Security payments for lost time in the work force.

Subject: Interesting... From: Econochick To: gylangirl Date Posted: Wed, Apr 21, 2004 at 21:24:47 (EDT) Email Address: Not Provided Message: I just wonder why you automatically think that wives of wealthy men don't work?

Subject: Re: Interesting... From: Mik To: Econochick Date Posted: Thurs, Apr 22, 2004 at 16:53:41 (EDT) Email Address: Not Provided Message: I just discovered something interesting - can you gals tell me how long is the allowed maternity leave?

Subject: Re: Interesting... From: Econochick To: Mik Date Posted: Thurs, Apr 22, 2004 at 18:12:24 (EDT) Email Address: Not Provided Message: It varies by company and in some companies, if you are essential personnel (like an exec.), you can negotiate a flexible schedule or telecommuting in addtion. In short - almost anything goes. If you're a model, I think you just have to wait until you lose the weight - ha ha ha.

Subject: Re: Interesting... From: Mik To: Econochick Date Posted: Fri, Apr 23, 2004 at 13:42:04 (EDT) Email Address: Not Provided Message: Hahaha... Econochick, no I heard that in the US the government sets as a minimum, you can apply for 6 weeks maternity leave. In Canada the government minimum allowance is ONE YEAR. AND!! it can be a shared, maternity/paternity leave. Now how is that for a stark difference?

Subject: We have Much to Learn From: Emma To: Mik Date Posted: Fri, Apr 23, 2004 at 14:24:08 (EDT) Email Address: Not Provided Message: In the US the government sets as a minimum that you can apply for 6 weeks maternity leave. In Canada the government minimum allowance is ONE YEAR.

Subject: Insensitive US and myopic Europe... From: El Gringo To: All Date Posted: Wed, Apr 21, 2004 at 16:37:09 (EDT) Email Address: nma@hotmail.com Message: Insensitive US and myopic Europe alienate Asia From Prof. Jean-Pierre Lehmann Sir, I am nearing the end of a trip trough Indonesia, India and Pakistan, which together account for about 23% of humanity and contain the world's largest populations of Muslims. I have been to remote villages, walked through popular bazaars, spoken to university students and dined and discussed with the nations' elites.Not only did I personnally not encounter a single incident of hostility;I was received everywhere with warmth. I can, however, confirm one thing.In all my conversations with all the groups mentioned above, the rage and virulent hostility directed at the US of President George W. Bush was a prominent common thread. In some 40 years of visiting Asia, including the Vietnam war, never have I encountered anything remotedly approaching such a degree of resentment against an American administration.Most of the people I am conversing with, especially the elites, are moderate pro-west admirers of the Enlightenment, precisely the kind of people who should be the 'agents' of US soft power (Joseph S. Nye, 'America needs to use soft power', April 19).Having many American friends themselves, they cannot understand how a people who appear to be so decent can have such indecent, unsensitive and irresponsible policies. As Prof Nye points out, however, soft power without the proper policies will achieve nothing.Even if the US is the main target of distrust and hostility, Europe is also greatly resented in Asia, through mainly because of its arrogant, egocentric and myopic trade policies.Cutting harmful agricultural subsidies, lowering tariffs and non-tariff barriers, genuinely opening the Doha development agenda back on the road would all contribute a great deal to creating a sense of engagement with the developing world.That, ultimately, can be the only robust way to a far more peaceful and prosperous 21st century than its dawn would seem to augur. Jean-Pierre Lehmann, Professor of International Political Economy, IMD (FT, Wednesday April 21 2004)

Subject: On the Congo River From: Jennifer To: All Date Posted: Wed, Apr 21, 2004 at 15:15:51 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/04/21/international/africa/21CONG.html Hopes and Tears of Congo Flow in Its Mythic River By SOMINI SENGUPTA ON THE CONGO RIVER, Congo — The river is the life and memory of this country. On the muddy banks of Kisangani, the river releases a man who risked cholera and crocodiles and spent three months on a decrepit barge — all for a chance to travel a thousand miles to sell, at long last, a sack of plastic ladies shoes. Outside Mbandaka, where the river trips over the Equator, it glances up at the shell of a dictator's unfinished palace, now home to a pair of cows. In a hidden creek in the hard-knocks capital, Kinshasa, the river hears the screams of an unwanted girl. Her father banished her to the water, believing that she was a witch. Today, as this country tries to knit itself together after a half-decade of war that ended last year, the river is witness to Congo's slow, aching rebirth. It is both symbol and substance of the country's reunification, and the life it nurtures on its banks shows the enormousness of the task. A power-sharing government has been installed, but the authority of the state has yet to reach old rebel fiefs. There is no national army to speak of, only gunmen who remain loyal to rival warlords. Peace still eludes pockets of the nation, like the mineral-rich Ituri region. Ethnic Hutu militias, some responsible for the killing frenzy in neighboring Rwanda in 1994, squirrel away in the eastern Kivu hills. Not least, most everything has stopped working. Schools, hospitals and a functioning legal system are but a memory. Roads, train tracks and turbines must be rebuilt. Today the river, coursing 2,700 miles, is the country's principal highway. Mighty and mythic, it carries everyone and everything: hyacinths, memories, traders, the dead. Once, people here called it the Nzere, or the river that swallows all rivers. It could be called the river that swallows all stories. A long legacy of greed and suffering is inscribed on its back, from the brutal rubber empire of a Belgian king in the late 19th century to Congo's latest war of partition and plunder. That war killed an estimated 3.3 million people, mostly through disease and starvation. It sliced the country into pieces as three major factions, along with an array of militias and foreign sponsors, scrambled for Congo's riches. And it broke the river, the country's spinal column, into bits. Last July, on the heels of the peace accord, the river reopened and the first commercial barge crawled up, loaded with cement, fuel and hope. Villagers lined the shore. They scrambled up the tributaries to have a look. 'I tell you, it was a grand welcome, like it was Jesus coming!' recalled Antoine Bawe, 48, the captain of one of those first barges. This evening, as dusk darkened the river at Kisangani, Mr. Bawe, fresh from his fifth journey upstream, sat slapping mosquitoes on the long, flat back of his vessel. By this hour, his barge had become a riverside saloon, buzzing with the supple beats of Ndombolo and the clinking of brown bottles of Primus. Ndombolo and Primus. Music and beer. During the war, those two things defied partition. They unified the Congolese, all along the river....

Subject: Social Security From: Emma To: All Date Posted: Wed, Apr 21, 2004 at 14:15:20 (EDT) Email Address: Not Provided Message: As Paul Krugman has pointed out often, Social Security can easily last as long as we wish it to last. There is no Social Security crisis and will be non crisis, unless we allow this Administration to privatise the program. Privatizing Social Security would entail a cutting of benefits because since the programs began each generation pays for an older generation. As for me, I support Social Security entirely and Medicare as well, and will vote away any person who would harm either program.

Subject: Re: Social Security From: El Gringo To: Emma Date Posted: Wed, Apr 21, 2004 at 19:16:38 (EDT) Email Address: nma@hotmail.com Message: That's an noble observation..., dear Emma.

Subject: Amigo From: Emma To: El Gringo Date Posted: Thurs, Apr 22, 2004 at 15:25:26 (EDT) Email Address: Not Provided Message: Smile....

Subject: Spain Elecctions From: juan Pineda To: All Date Posted: Wed, Apr 21, 2004 at 10:44:21 (EDT) Email Address: juan-pineda@vodafone.es Message: Hi my name ist Juan and i,m from Madrid (spain). There was an amazing article from P.K the week after the spanish elecctions in El Pais ( about the spanish elecctions). Really good one...i don´t kwow if there was too there (U.s). I,m really interest on in. Can anyone send me per e.mail this incredible article. juan-pineda@vodafone.s

Subject: PK in El Pais From: Jennifer To: juan Pineda Date Posted: Wed, Apr 21, 2004 at 14:18:09 (EDT) Email Address: Not Provided Message: http://www.elpais.es/articuloCompleto.html?d_date=&xref=20040421elpepiint_8&type=Tes&anchor=elpepiint

Subject: Re: PK in El Espejo From: El Gringo To: Jennifer Date Posted: Wed, Apr 21, 2004 at 15:47:05 (EDT) Email Address: nma@hotmail.com Message: http://www.spiegel.de/spiegel/0,1518,295662,00.html

Subject: Econ 101 Question From: DW To: All Date Posted: Wed, Apr 21, 2004 at 07:17:30 (EDT) Email Address: Not Provided Message: Someone correct me if I'm wrong with the following: When the Fed anounces interest rate changes they are reffering to the Federal Funds Rate. This rate is set by the market and is the rate charged for banks to borrow from each other overnight. The other rate is the Discount Rate which is the rate the Fed charges banks to borrow from them. This rate is set a 1 % above the Federal Funds Rate to discourage borrowing from the Fed. So, since the Federal Funds Rate is market set and the Discount Rate is set at 1 % above the Federal Funds Rate, then an announcement by the Fed that they are making a rate change only means that the FOMC is going to engage in bond purchases or sales in order to effect the money supply and ultimately the interest rate. Am I wrong here?

Subject: Re: Econ 101 Question From: Bobby To: DW Date Posted: Thurs, Apr 22, 2004 at 12:56:08 (EDT) Email Address: robert@pkarchive.org Message: Except for the 1% above part, this sounds right to me . . .

Subject: Re: Econ 101 Question From: Terri To: Bobby Date Posted: Thurs, Apr 22, 2004 at 18:03:29 (EDT) Email Address: Not Provided Message: Remember, all the Fed really controls is the Federal Funds rate itself. The Discount rate has some minor importance, and does not 'have to' vary with the Federal Funds rate.

Subject: Re: Econ 101 Question From: DW To: Terri Date Posted: Thurs, Apr 22, 2004 at 19:40:43 (EDT) Email Address: Not Provided Message: I thought it was the other way around. The Fed controls the discount rate which is what they charge banks to borrow. The Federal Funds rate is what banks charge each other and is set by the market. The Fed 'targets' the FFR by changes in the money supply. Come one folks. Please weigh in on this one. This should'nt be a matter of opinion. Thanks.

Subject: Fair enough... From: DW To: DW Date Posted: Wed, Apr 21, 2004 at 21:38:52 (EDT) Email Address: Not Provided Message: I didn't think you PK worshipers actually knew anything about economics anyway. My suspisions are confirmed.

Subject: Re: Fair enough... From: Paul G. Brown To: DW Date Posted: Fri, Apr 23, 2004 at 00:10:23 (EDT) Email Address: Not Provided Message: Oh, no. We know enough about economics to answer your question. We just don't think its a good idea to do your homework for you. When a question posted on a public forum can be answered by investing five minutes of time with Google, many people who would quite happily answer the question in a different social context, clam up. And having handed you a heap of clues, so will I.

Subject: Re: Fair enough... From: DW To: Paul G. Brown Date Posted: Fri, Apr 23, 2004 at 21:56:28 (EDT) Email Address: Not Provided Message: P.S... 'We know enough about economics to answer your question'... Yeah, right. So far, you all are 0 for 3, which includes your weak effort to dodge the question.

Subject: Re: Fair enough... From: DW To: Paul G. Brown Date Posted: Fri, Apr 23, 2004 at 15:00:06 (EDT) Email Address: Not Provided Message: Funny. I think Terri is a regular on this board and suggested that the Fed controls the Federal Funds Rate. The reason I asked, is because most folks don't know. They think the Fed directly adjusts the interest - including the the business editor of my local paper.

Subject: Re: Fair enough... From: Mik To: DW Date Posted: Thurs, Apr 22, 2004 at 16:50:34 (EDT) Email Address: Not Provided Message: What are 'suspisions'?

Subject: Re: Fair enough... From: DW To: Mik Date Posted: Thurs, Apr 22, 2004 at 19:36:12 (EDT) Email Address: Not Provided Message: Touche!

Subject: Suspisions From: Terri To: Mik Date Posted: Thurs, Apr 22, 2004 at 18:00:35 (EDT) Email Address: Not Provided Message: Oh well, why bother learning or being civil?

Subject: Re: Suspisions From: Mik To: Terri Date Posted: Fri, Apr 23, 2004 at 13:43:47 (EDT) Email Address: Not Provided Message: Terri, yes I agree - we have saying - if you are going to act clever - you'd better be clever.

Subject: Strange statements by Fed Chairman From: Pete Weis To: All Date Posted: Tues, Apr 20, 2004 at 21:40:57 (EDT) Email Address: Not Provided Message: Alan Greenspan has made some pretty strange statements over the last couple of years. He has stated that broad, massive (my words) withdrawal of equity from homes is a good thing since it has helped the economy. He recently lauded variable rates. Now he is saying rising interest rates will be a good thing for our financial institutions. Well what about home owners who raided the equity in their homes and recent mortgage applicants who heeded his 'call to arms' as Suzie Orman put it? What effect will rising interest rates have on these home owners? He pushed for and got higher social security taxes in the 80's to preserve it for future generations. Now he says we should makes cuts in social security. He warned of irrational exuberance in the late 90's and proceded to throw gasoline on the fire by lowering rates further. Today he says 'pricing power is returning'. Is it really? Are prices rising because the US consumer is coming into long lasting, new found wealth? Or are prices rising due to higher energy costs and higher raw material costs which are being passed on to the consumer? Perhaps there is pricing power, relatively speaking, in China and India where job growth and wage growth is exploding. But what effect will inflation brought on by rising energy and raw material costs and high levels of debt brought on by elevated mortgages and heavy use of credit cards have on consumption in the US going forward? Is there really evidence of growing pricing power when consumer sentiment in recent surveys show sentiment dropping? In my opinion, our Fed Chairman is more into 'spin' nowadays than telling it 'like it is'.

Subject: Re: Strange statements by Fed Chairman From: Mik To: Pete Weis Date Posted: Wed, Apr 21, 2004 at 13:36:31 (EDT) Email Address: Not Provided Message: Gee this is starting to sound like Rumsfeld: we now know what we don't know....

Subject: Japanese Growth From: Emma To: All Date Posted: Tues, Apr 20, 2004 at 15:20:56 (EDT) Email Address: Not Provided Message: http://www.epinet.org/content.cfm/webfeatures_snapshots_04192004 On balance, Japan's so-called 'lost decade' not so bad It is commonly asserted that Japan's economic performance lagged in the 1990s, while the U.S. economy soared. The United States did grow 1.3 percentage points faster than Japan in the 1990s (as shown in the first set of bars on the graph below). However, between 1989 and 2000, Japan 's population increased only 0.3% per year, while the United State 's population grew by a much larger 1.1% per year. When corrected for these differences in population growth rates, the gap in the growth rate of output per person —1.5% in Japan and 2.0% in the United States — is actually a much smaller 0.5 percentage points. In other words, the smaller overall Japanese output growth was spread over a much smaller growth in population size.... Productivity in Japan grew 2.5% per year, much higher than in the United States, which saw only 1.4% annual growth. This contradicts the widely held perception that economic performance in Japan lagged over the 1990s. The U.S. figure cited here is for the economy as a whole (including services and government). The most frequently quoted statistics in the press are for the manufacturing and non-farm business sectors, where productivity growth has been relatively high. Japan achieved respectable per capita growth rates in the 1990s even while the total number of hours worked in their economy declined sharply (-0.7% per year). In fact, between 1990 and 2000 the average worker in Japan put in 191 fewer hours per year, or almost five full weeks less annually. Meanwhile, the average U.S. worker added 37 working hours per year, or nearly a full working week more.

Subject: Repeat it often. people will believe its true From: Jim To: All Date Posted: Tues, Apr 20, 2004 at 14:36:49 (EDT) Email Address: jzmarg@aol.com Message: The entire Bush reelection campaign, like what has gone on in his administration, i.e. Ashcraft's statements about Gorelick to the 911 commission, repeated by Brett, Sean, etc. remind me of one of my favorite of Paul's op ed pieces: Springtime for Hitler SYNOPSIS: Meditations on big lies, the Bush tax cut, and Hitler You may recall that George W. Bush promised, among other things, to change the tone in Washington. He made good on that promise: the tone has certainly changed. As far as I know, in the past it wasn't considered appropriate for the occupant of the White House to declare that members of the opposition party weren't interested in the nation's security. And it certainly wasn't usual to compare anyone who wants to tax the rich — or even anyone who estimates the share of last year's tax cut that went to the wealthy — to Adolf Hitler. O.K., maybe we should discount remarks by Senator Phil Gramm. When Mr. Gramm declared that a proposal to impose a one-time capital gains levy on people who renounce U.S. citizenship in order to avoid paying taxes was 'right out of Nazi Germany,' even the ranking Republican on the Senate Finance Committee, Charles Grassley, objected to the comparison. But Mr. Grassley must have thought better of his objection, since just a few weeks later he decided to use the Hitler analogy himself: 'I am sure voters will get their fill of statistics claiming that the Bush tax cut hands out 40 percent of its benefits to the top 1 percent of taxpayers. This is not merely misleading, it is outright false. Some folks must be under the impression that as long as something is repeated often enough, it will become true. That was how Adolf Hitler got to the top.' For the record, Robert McIntyre of Citizens for Tax Justice — the original source of that 40 percent estimate — is no Adolf Hitler. The amazing thing is that Mr. Grassley is sometimes described as a moderate. His remarks are just one more indicator that we have entered an era of extreme partisanship — one that leaves no room for the acknowledgment of politically inconvenient facts. For the claim that Mr. Grassley describes as 'outright false' is, in fact, almost certainly true; in a rational world it wouldn't even be a matter for argument. You might imagine that Mr. Grassley has in hand an alternative answer to the question 'How much of the tax cut will go to the top 1 percent?' — that the administration has, at some point, produced a number showing that the wealthy aren't getting a big share of the benefits. In fact, however, administration officials have never answered that question. When pressed, they have always insisted on answering some other question. But last year the Treasury Department did release a table showing, somewhat inadvertently, that more than 25 percent of the income tax cut will go to people making more than $200,000 per year. This number doesn't include the effects of estate tax repeal; in 1999 only 2 percent of estates paid any tax, and half of that tax was paid by only 0.16 percent of estates. The number also probably doesn't take account of the alternative minimum tax, which will snatch away most of the income tax cut for upper-middle-class families, but won't affect the rich. Put all this together and it becomes clear that, sure enough, something like 40 percent of the tax cut — it could be a bit less, but probably it's considerably more — will go to 1 percent of the population. And the administration's systematic evasiveness on the question of who benefits from the tax cut amounts to a plea of nolo contendere. Which brings us back to the new tone in Washington. When Ronald Reagan cut taxes on rich people, he didn't deny that that was what he was doing. You could agree or disagree with the supply-side economic theory he used to justify his actions, but he didn't pretend that he was increasing the progressivity of the tax system. The strategy used to sell the Bush tax cut was simply to deny the facts — and to lash out at anyone who tried to point them out. And it's a strategy that, having worked there, is now being applied across the board. Michael Kinsley recently wrote that 'The Bush campaign for war against Iraq has been insulting to American citizens, not just because it has been dishonest, but because it has been unserious. A lie is insulting; an obvious lie is doubly insulting.' All I can say is, now he notices? It's been like that all along on economic policy. You see, some folks must be under the impression that as long as something is repeated often enough, it will become true. That was how George W. Bush got to the top. Originally published in The New York Times, 10.18.02

Subject: America, Canada, and Jobs From: Emma To: All Date Posted: Tues, Apr 20, 2004 at 13:53:57 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/04/18/business/yourmoney/18view.html Two Countries, Two Tales of Jobs By EDMUND L. ANDREWS FOR more than a year, economists have been perplexed by the startling contrast between the nation's economic growth and its weak pace of job creation. But an equally puzzling contrast lies to the north: Canada, with many of the same characteristics as this country, has added nearly one million jobs since 2001, while the United States is down nearly two million. Both countries are high-wage nations that face global competition. Both are part of the North American Free Trade Agreement. And though Canada did not suffer a recession in 2001, both economies have expanded by about the same amount since 2000: about 9.6 percent for Canada, versus 9.3 percent for this country. The easy explanation is that productivity in the United States has climbed about twice as fast as that in Canada, in part because American companies spent more on technology. But why did those companies focus so keenly on productivity? Here is a theory: American economic policy leans more heavily toward investment in equipment and capital than in labor, and President Bush may have increased the tilt. By any measure, the contrast between the jobs experience of Canada and the United States is striking. If the United States had matched Canada's growth rate in jobs, 5.6 percent from 2000 to 2003, it would have added 9.6 million jobs. Those calculations come from a paper to be published this week by the Center for American Progress, a research group in Washington that acknowledges being 'aggressively liberal.' The center blamed President Bush's tax cuts for part of the nation's weak job performance. It noted that Canada's tax package in 2002 focused more on the middle class than President Bush's tax cuts did in 2001, 2002 and 2003. The Canadian tax cuts were based primarily on rate reductions for lower-income and middle-income households. The American tax cuts were weighted much more heavily toward the very wealthiest taxpayers and investors. They included rate reductions for people in the top tax brackets. They cut in half the taxes on stock dividends and capital gains and offered new write-offs on equipment bought by businesses. They also called for a gradual elimination of inheritance taxes, a move that primarily benefits wealthy families. 'If the experience of these two countries over the past three years is any indication, smaller tax cuts targeted toward middle-income taxpayers is more stimulative than large tax cuts targeted at upper-income taxpayers,'' wrote Scott Lilly, a senior fellow at the center....

Subject: Re: America, Canada, and Jobs From: jimsum To: Emma Date Posted: Wed, Apr 21, 2004 at 16:06:47 (EDT) Email Address: jim.summers@rogers.com Message: In Canada, we had our 'jobless' recovery at the start of the '90s, when many more jobs were created in the U.S. than Canada; so perhaps Canada is simply making up for lost time with its better performance recently. I don't know how the employment rate compares between the two countries, but I'd guess they'd be more informative than unemployment rates. I think there may be another factor here, although I can't really figure out the mechanism. Canada's budget deficit got quite out of control in the late '80s and perhaps the poor job performance was due to this. Maybe it is easier to deficit-finance increases in productivity than increases in employment. If the relationship between a budget deficit and poor job performance is anything but a coincidence, the U.S. is in for a lot more economic pain; and that is before the pain caused by (eventually?) eliminating the deficit. Right or wrong, most Canadians will no longer accept government deficits, and we look on in horror at what the federal and state governments are doing in the U.S. right now.

Subject: Re: America, Canada, and Jobs From: Pete Weis To: Emma Date Posted: Tues, Apr 20, 2004 at 22:14:25 (EDT) Email Address: Not Provided Message: Part of the difference may also have to do with the difference in the job type distribution between Canada and the US. The US experienced a high-tech job explosion through the 80's and 90's as it led the world in computer and software development. Canada, certainly, experienced some of this, but not to the same extent as the US. When the high-tech bust started in 2000, the US had many more jobs in this sector to lose. Canada is much richer per capita in natural resources. Canada's total population is relatively small and the timber and minerals industries are much bigger, especially relative to the population, than they are in the US. Nations with either cheap labor (such as China and India) and nations with vast natural resources (such as Canada, South Africa, Australia, Russia, China) will fair best in the coming years.

Subject: Re: America, Canada, and Jobs From: Mik To: Pete Weis Date Posted: Wed, Apr 21, 2004 at 13:46:02 (EDT) Email Address: Not Provided Message: Pete, Just a quick correction - Canada's lumber industry has recently been devastated by trade barriers (from the US) leading to a total collapse in the lumber industry. Although it is a small correction I thought I'd point out that the lumber industry is no longer large in comparison to the population. Also you talk about how the High-tech bust affected the US so badly. Well by the same account, the lumber bust, mad-cow disease and SARS have placed huge dents in the smaller Canadian economy. Dare I ask, isn't there a key difference in econmoic policy between Canada and the US? Where Canada applies a more 'demand side' economics and the US applies a more 'supply side' econmics? I do see Canada having good growth in its mining sector, particularly in diamonds. Just out of curiousity, have you ever realised that Canada is on the same continental shelf as the US, yet the US has no large diamond mines... ever wondered why?

Subject: Re: America, Canada, and Jobs From: Pete Weis To: Mik Date Posted: Wed, Apr 21, 2004 at 21:27:39 (EDT) Email Address: Not Provided Message: Mik, The WTO ruled against the US softwood tariff in May of 2003. Apparently the WTO did not put any 'teeth' into their ruling if the tariff still stands. Guess this explains why lumber in the US has doubled in price over the last year. Home builders in the US can't be very happy. Wasn't aware diamond mining was that big in Canada.

Subject: Re: America, Canada, and Jobs From: Mik To: Pete Weis Date Posted: Thurs, Apr 22, 2004 at 16:47:41 (EDT) Email Address: Not Provided Message: Pete, well spotted. Yes the tariff still stands and Canada is miffed. The US lumber industry has flat bluntly ignored the ruling and offered their 'own special' deal to the Canadians. Now there is a huge internal argument, the lumber companies and the provincial government don't want to move on this 'deal' as they still believe that they can convince the US to drop its tariff. The lumber unions are furious and are trying to push for acceptance of the deal simply because their union members are out of work right now. It is actually a very angry scenario resulting in whopping good profits for US lumber companies (as you pointed out US lumber has nearly doubled in price) and what is amazing is that there is virtually no TV reports on this in the US. On the issue of diamond mining. De Beers the world's largest and most successful diamond monopoly is not allowed to do business in the US (even though they advertise in the US). De Beers is the only company that holds the secret technology to finding diamonds, and sorting diamonds, but again - they are not allowed to operate in the US. But they can operate in Canada. Canada has one of the most lucrative diamond mining regions in the world - yet they are on the same geological shelf as the US, yet no significant diamond mines in the US. For all you know, the US could have the world's biggest diamond deposit and no one would know - have you done any digging in your back lawn lately?

Subject: Re: America, Canada, and Jobs From: jimsum To: Mik Date Posted: Fri, Apr 23, 2004 at 11:01:30 (EDT) Email Address: jim.summers@rogers.com Message: The lumber situation is also complicated by the fact that some (maybe most) lumber companies in Canada are U.S. owned. Initially, it was thought that the fact that U.S. companies being were harmed by the tariffs would help the situation, but maybe the companies have figured out how to make money no matter what happens. I find it sad that the bad results of imposing tariffs are never advertised. As another example, the U.S. border was closed to Canadian beef because of the BSE issue; despite the fact that the Canadian system of testing and tracking cattle is better than the U.S. system. Canadian beef accounted for about 5% of the U.S. market, so keeping it out was partly responsible for the increase in beef prices. Yet when I saw a little story about beef prices on Headline news, they were totally mystified about why beef prices were so high. It must be the Atkins diet increasing demand :-) The system is rigged when considering the tradeoffs for tariffs. The companies that want tariff protection have a lot of money, and they get a huge direct benefit from blocking trade. The consumers that benefit from free trade merely see a reduction in a small percentage of their total spending, and so no consumer has an incentive to spend lots of money protecting their interests. Since money seems to be the most important tool for influencing political decisions, the side with concentrated benefits will often be heard rather than the side with diffuse costs. You'd think the media and politicians would realize this, but they are all standing back and letting money do the talking.

Subject: I'm impressed From: Mik To: jimsum Date Posted: Fri, Apr 23, 2004 at 16:46:50 (EDT) Email Address: Not Provided Message: Wow - I never knew that most lumber companies in Canada were US owned - that puts a whole new spin and explains the issue a little more clearly to me. Your last paragraphs has some of the 'wisest' words I have yet seen - very good point. Thanks.

Subject: And China.... From: Emma To: Emma Date Posted: Tues, Apr 20, 2004 at 14:30:11 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/04/18/weekinreview/18china.html Looking for a Villain, and Finding One in China By EDUARDO PORTER REMEMBER when China was exporting deflation? It was only a couple of years ago when economists warned that the country's cheap manufactured exports could push the world dangerously close to a spiral of ever-lower prices. 'The Chinese economy has certainly emerged as an important ingredient in the U.S. deflation story,' warned Stephen S. Roach, chief economist of Morgan Stanley in October 2002. The World Bank also chimed in: 'China's overreliance on the external sector 'exports' China's own deflation to the rest of the world.' Well, that's over. In March, inflation reared its head in the United States. The Labor Department reported that in the first quarter of the year, consumer prices rose at an annual pace of 5.1 percent. But despite this U-turn in the outlook for prices, one thing didn't change: China is still part of the problem. Carl B. Weinberg, chief economist of High Frequency Economics, wrote to investors last week that 'China's crowding into world commodity markets will boost perceived inflation in all the world's economies for a long time unless its growth trajectory is crimped.' As an uncertain recovery in the job market and a bloated trade deficit stoke a lingering economic malaise in the United States, the prospect of China emerging as a competitor on an equal footing has led economists, businessmen and politicians to blame it for every economic woe. Almost every politician, it seems, agonizes over China's vast labor force sucking in the world's industrial jobs. A few fret about China becoming too large a consumer market, enabling it to dictate terms to American businessmen and policy makers. Some concerns are warranted. China's fast growth has been the major force behind the surge in commodity prices. Last year it ate up half the world's concrete output, a quarter of its steel production, a fifth of its copper and about 40 percent of its coal....

Subject: Long term rates will be lower than 7% From: jimsum To: All Date Posted: Tues, Apr 20, 2004 at 12:17:38 (EDT) Email Address: jim.summers@rogers.com Message: I wonder if Krugman is right that long term interest rates will stay at 7%. As I understand the theory, interest rates reflect the simple fact that people would rather buy something now rather than later. Since people prefer to have things now rather than later, they are willing to pay for the privilege, and hence pay interest. I think that Baby Boomer demographics might be changing the preference for immediate spending. As Baby Boomers increasingly save for retirement, their preference for current spending will decrease in favour of spending in the future, when they are retired. I think that until the proportion of retirees in the population stops increasing, there will be a downward pressure on interest rates.

Subject: Bonds are a Problem From: Emma To: jimsum Date Posted: Wed, Apr 21, 2004 at 16:12:22 (EDT) Email Address: Not Provided Message: Rates are going up and likely going up a lot for quite some time. This is not time for bonds, probably not for any type of bonds.

Subject: Re: Bonds are a Problem From: Emma To: Emma Date Posted: Wed, Apr 21, 2004 at 16:20:46 (EDT) Email Address: Not Provided Message: If the 10 year treasury does rise to 6% or 7% or 8%, bond losses will be steep and bonds are going to be a poor vehicle for investors who wish income possibly for years. This could be a serious problem in income seeking households.

Subject: Rates can Rise Significantly From: Jennifer To: jimsum Date Posted: Tues, Apr 20, 2004 at 15:13:34 (EDT) Email Address: Not Provided Message: Rates are very likely to climb significantly in coming months even if you are right, becuase your effect will only occur in the long run.

Subject: Re: Rates can Rise Significantly From: SanchoPancha To: Jennifer Date Posted: Tues, Apr 20, 2004 at 17:59:39 (EDT) Email Address: Not Provided Message: 'My calculations keep leading me to a 10-year bond rate of 7 percent, and a mortgage rate of 8.5 percent - with a substantial possibility that the numbers will be even higher.' I think that the bond rate will find its equilibrium at more or less 10% 'Why 7 percent? Well, in the past 20 years the average yield on 10-year bonds has, in fact, been about 7 percent. Why shouldn't we think of that as the norm?' (Because the exception proves the rule.)

Subject: Re: Rates can Rise Significantly From: SanchoPancha To: Jennifer Date Posted: Tues, Apr 20, 2004 at 17:59:16 (EDT) Email Address: nma Message: 'My calculations keep leading me to a 10-year bond rate of 7 percent, and a mortgage rate of 8.5 percent - with a substantial possibility that the numbers will be even higher.' I think that the bond rate will find its equilibrium at more or less 10% 'Why 7 percent? Well, in the past 20 years the average yield on 10-year bonds has, in fact, been about 7 percent. Why shouldn't we think of that as the norm?' (Because the exception proves the rule.)

Subject: Re: Rates can Rise Significantly From: SanchoPancha To: SanchoPancha Date Posted: Tues, Apr 20, 2004 at 18:00:29 (EDT) Email Address: Not Provided Message: Sorry for the double post folks!

Subject: A Broker's Promise From: Emma To: All Date Posted: Mon, Apr 19, 2004 at 17:37:35 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/04/18/business/yourmoney/18retire.html A Broker's Empty Promise, a Retiree's Shattered Dream By GRETCHEN MORGENSON NORMAN HUFF spent 30 years working jackhammers, backhoes and other heavy construction equipment at the East Ohio Gas Company. When it offered him an early retirement package in April 2000, he was tempted but nervous: he had $386,000 in his retirement account, mostly in company stock, but he and his wife, Wilma, worried that this would not be enough if he were to quit his $40,000-a-year job. Then Mr. Huff was invited to a retirement seminar at the Brookside Country Club near his home in rural Dalton, Ohio. Michael G. Dobbins, a vice president and broker at a local branch of Prudential Securities, addressed 50 to 75 prospective retirees from East Ohio Gas, suggesting that they could accept their company's buyout packages, invest their savings in a portfolio of stocks he favored and live comfortably on the earnings. 'He told me I'd be a fool not to take the buyout,' Mr. Huff said. 'He kept on stressing to us that we needed to get that stock I had accumulated over 30 years sold and make that money work for us. The amount of money we had, he said, in a matter of a few years we could possibly be millionaires.' Today, the Huffs are far from millionaires. In fact, they are worse off than they were when they met Mr. Dobbins. By April 2003, their retirement account had lost 65 percent of its value. Even though Mr. Huff and his wife said they had emphasized that keeping their principal safe was paramount, Mr. Dobbins invested their money in shares of technology, health care and financial services companies, and in equity mutual funds that carried sales charges, or loads....

Subject: AAARGH!!! From: Econochick To: Emma Date Posted: Tues, Apr 20, 2004 at 10:15:38 (EDT) Email Address: Not Provided Message: Okay, see, this is the sort of thing that drives me crazy. This bastard broker did not give a rat's **s what needed to be done for these people. He put them in a much riskier portfolio than they could handle with no regard to their time horizon, risk tolerance, fiancial goals or liquidity needs. And here's the thing: if the Norman Huff had said 'yeah, baby, roll that dice!!' then it would be his fault but he didn't. He said quite the opposite. I wonder if the broker is an idiot or an **shole!?!? Either way, he should be banned from the investment industry. If the 'investmtent professional' is not asking you about your 1.)time horizon, 2.)risk tolerance, 3.)liquidity needs, 4.)financial goals or stumbles when you ask him/her about these four things, STEP AWAY FROM THE BROKER. I REPEAT...STEP AWAY FROM THE BROKER. Each portfolio is individual. I have NEVER built a 'standard' portfolio. Every client is too different and your are responsible for building a financial base that will fund that client's needs, hopes and their ability to sleep soundly at night! I've never been a broker and have never dealt with 'retail' clients (generally, small investors) but I am an 'investmtent professional' and my integrity, honesty and ethics mean more to me than ANYTHING!! I can't IMAGINE compromising a clients' future. I would rather go flip burgers than dirty myself with money that I got from breaking my own code of ethics. People like this incompetent bastard drive me crazy. There are good people out there, folks. Take the time to find them. Sorry for the diatribe but this is the sort of thing that drives me INSANE. One day I'm going to write a book!

Subject: Re: AAARGH!!! From: Mik To: Econochick Date Posted: Tues, Apr 20, 2004 at 11:26:59 (EDT) Email Address: Not Provided Message: Econochick, Quite some time back I decided it would be a good thing to make some investments. So I decided to do the logical thing and learn about investing and do some shopping. At the time there was a big buzz around the concept of 'Unit Trusts' (I don't know if they have Unit Trusts in the US). The Unit Trust investment companies all had their fancy words around their various forms of 'Unit Trust Products'. So with a selection of Unit Trusts I wanted to know the logical question, 'How well have they done compared to one another?' Seems a logical way of selecting the best Unit Trust. When I went about contacting the various investment companies, I was horrified at their arrogance. The general attitude is that I must not ask such questions and must simply pay up. I was told over an over again that there are no comparators available showing the difference in Unit Trusts. I then came across an internet site that did in fact give a comparison. My first thought was that all these people were lieing to me my second thought was an amazement of how wide-spread was the difference in the performance between Unit Trusts. Some were dreadful performers and some were good. The irony was that there was an advertising blurt by one of the companies bragging how good their unit trust returns were like when in actual fact they had a dreadful record. I then spoke with my friends about my findings as was shocked that all my friends did not know about the differences in the performance of the Unit Trusts and even more shocked to see that all my friends had made investments into unit trusts and totally believed they made good investments simply because they were told by their investment broker that the investments were good. It is as if these people placed their investment brokers advice along side the advice of a doctor yet I was showing them the common sense that this was seriously flawed. Within 5 years the bottom fell out the market on Unit Trusts and all my friends were upset, mainly because their wonderful brokers were now all hiding behind the contract legalities. At that moment (and no insult to you) I had made up my mind that I would in no way ever trust anyone with my money. I have made my own investments into ventures that I feel I can trust and that make sense to me because I understand exactly how my money is being used. I will not live off the faith of anyone, just because they are an accredited financial specialist. I struggle to believe doctors so I definately do not believe any financial specialists. Although - I must say that I do like the advice you give, mainly because you have been giving advice on issues that make sense to me.

Subject: Unit Investment Trusts From: Econochick To: Mik Date Posted: Tues, Apr 20, 2004 at 16:02:24 (EDT) Email Address: Not Provided Message: I am completely not insulted by your comments. You should be extremely wary of anyone when it comes to the stuff with which you will provide a college education for your children, healthcare and food and shelter! All I ment was that there are some (although, not the majority) financial planners who are pretty good. I have personally met exactly zero of them. I have seen Suze Orman on televeision from time to time and I find that she generally gives some darned good advice to the small investor. But then, like me, she is only offering the knowledge with which to think about your portfolio - she's not selling anything. When I worked in the research departments of large investment banks that had retail brokers, on occassion I had to to talk to those brokers. They know NOTHING! They are usually history or English majors or something completely unrelated to finance and economics and no matter how intelligent they are, IQ will not overcome ignorance. They are sales people. They are arrogant sales people! They believe that the knowledge of a few acronyms separates them from you by a mile and that they have right to feel superior. That always gets me. Learn risk/reward, Sharpe ratio, portfolio and stock variance, and the four things you need to consider when investing (I won't relist them) and you call the broker and tell HIM what to do. Better yet, save yourself the headache and cost and go to an online broker. I've been cold called before and I just start asking questions I know they don't know because they don't know finance. Then I tell them to call me back when they know the answers - they never do. For the record, Mik. I only put together portfolios for friends and family. The broader public cannot afford me (my opportunity cost is too high) and I'm not interested in that. I manage a tiny pool of money which is closed to further investors at this time - I would rather have more time than more money. Plus, my investors are, shall we say, very experienced in the area of making money and understand the risks and rewards involved and invest accordingly. I just go crazy when people sign up for the task of helping the small investor and then screw the customer. If you can't buy your BMW without screwing them over, find something else to do. Unit Investment Trusts (UIT) are traded here in the form of ETFs (exchange traded funds). They are generally designed to mimic the performance of an index - either a made-up index or one that is well known, like the Dow or S&P 500. When measuring performance of these funds, you need to measure it relative to its benchmark (the index to which it is pegged). I don't know if that's what you ment when you were looking better performers. If that's not what you ment, you were looking at it wrong. The UIT could have performed poorly because the index to which it is benchmarked performed poorly. To guard against that yo need to diversify among ETFs. If you mean that they underperformed the benchmark, then that is a serious problem because it means that the portfolio management is a moron. How stupid do you have to be to consistantly not be able to mimic an index (no cries of 'illiquid securities' please, that's what synthetic securities and opportunistic buying is for)? Since I seriously doubt that you ment the latter problem, I urge you too consider what I said about evaluating UITs. The benefit of a UIT is that, unlike a single stock, it is a basket of stocks. The basket provides plenty of diversification, reducing (very significantly) the probability of the UIT going to zero. In other words, the variance (risk) for an index is lower than the variance for a single stock. Another benefit is that, like a mutual fund, they are open-ended but, unlike a mutual fund, they are priced continuasly throughout the day. It is this continuous pricing that makes them attractive to some portfolio managers for trading purposes. The downside is that if you are invested in a UIT that is benchmarked to an index which is dropping like a rock (read: QQQ when the NASDAQ was plummeting a couple of years ago), you will underperform relative to other UITs invested in indexes not plummeting like rocks. If you still like UITs - and provided you have good commission costs and low portfolio turnover there is not much to dislike - just remember to diversify and you should be okay. You are absolutely right to be suspicious and investigate everything for yourself, Mik. I don't know of any other way.

Subject: Re: Unit Investment Trusts From: Mik To: Econochick Date Posted: Tues, Apr 20, 2004 at 17:13:05 (EDT) Email Address: Not Provided Message: Thanks Econochick, Interesting how the terminology is slightly different, but yep it's the same thing. You talk about the UIT performance measured against a benchmark. What about performance based on monthly or annual growth? If I take the bench mark to be, say, the value at 1 January (the date I purchase the UITs) and I then watch the performance of the UITs up to, say, 1 June then I should be able to compare the different UITs? Now what I find interesting is when you say that I should diversify the UITs? Did I get that right? A UIT is an accumulation of a diverisified bunch of shares and stocks already. Now I should further diversify and buy different UITs? Now granted there are some UITs that have a specific theme - for example UITs that only include foreign stocks, or there is one that is only a set of blue chip companies (with no management of the UIT). If I compare for example the Foreign Stocks UIT offered by one company against the a particular UIT for domestic stocks I found that in that speicific case scenario the domestic UIT had a history (over 2 years) of giving far better return than the foreign UIT. But I only found this out after doing some serious internet research, no one would actually tell me. You hit the nail on the head about them employing people who talk in acronyms and pretend to be clever. And again, a couple pointing questions and I would see that they have very little expertise in describing the info to me. None the less, I have recently started a small side line company of my own doing a the most simple business of importing a product and marketing the product. That is my single most important investment right now. Getting this damn company off the ground.

Subject: Re: Unit Investment Trusts From: Econochick To: Mik Date Posted: Tues, Apr 20, 2004 at 19:06:08 (EDT) Email Address: Not Provided Message: I hear you on the business. And it's one thing after another - nothing works properly!! I don't know what UITs are available to you where you are. The ones I am most familiar with are ETFs. However, the concept is the same (in fact, on the floor of the exchange, they are interchangeable terms). The growth at time 1 to time 2 or whatever is irrelevant in your analysis. What you are essentially buying is a basket of securities that is defined either by an index or a sector or whatever. That basket will perform according to whatever it is benchmarked to. Thus, what you are really asking is not which is the better UIT but which is the better sector to invest in now. Example: with an S&P 500 ETF (SPDR), you diversify away single stock risk but take on overal stock market risk. Thus, you need to invest in another security to diversify the stock market risk. With a sector index based UIT - for example an a basket of petroleum stocks - you have diversified away the risk of a single stock tanking but you still have sector risk that you need to diversify away. By the same token, if a foreign stock index fund does better than a domestic (or vice versa) it is because the foreign index has done better - not because there is something inherently wrong with the UIT. You do get diversification with UITs but you never achieve CAPM diversification! You always have some risk that will need to be further diversified - or accepted, depending on your personal situation. Now, as I've said I'm only familiar with ETFs like 'diamonds', 'Spiders' and 'triple Q'. So, I'm not aware of what you are implying - that there are UITs diversified among asset classes like mutual funds. If they are the only difference between them and a mutual fund would be continuous pricing. Thus, if you have such a fund I will have to ask what you're using as a benchmark for 'under' or 'out-performance'. If it's a benchmark like the S&P 500 (or its equivalent where you are) then I would have to tell you that you are looking at there stock picking record. For the record, I personally have ZERO faith in stock picking. If they have a 5 year record of of fabulous stock picking I still have ZERO faith that they have the magic bullet. I believe this because I believe that I have never met anyone who can actually KNOW what's going to happen in the future. Thus, it's all just very educated guesses - which I was paid to do and realized was ridiculous when I was on Wall Street. Oh, and I completely forgot to mention the MOST important rule of trading: NEVER EVER enter into a trade you don't understand. That one has kept me from blowing up and is one of the biggest reasons others do blow up.

Subject: Another Sort of Indexing From: Emma To: Econochick Date Posted: Wed, Apr 21, 2004 at 16:16:18 (EDT) Email Address: Not Provided Message: Exchange traded funds simply allow the entire market of a market sector to be tracked as in an index fund. Pick the index you wish and you can buy it as as exchange traded fund. That goes for stocks and bonds.

Subject: Re: Unit Investment Trusts From: Mik To: Econochick Date Posted: Wed, Apr 21, 2004 at 13:33:48 (EDT) Email Address: Not Provided Message: Hhhmm interesting it appears what I know as Unit Trusts are different (although similar) from what you are describing. As an example: there is a Unit Trust called the Old Mutual 100. The Unit Trust managers have selected 100 companies in which they will buy or sell stocks. They may sell all the stock in one company and go buy into another, so long as they are at any one time investing in 100 companies. Granted they spread the risk and return and in theory they would be doing at least as well as the stock exchange. If the team is good at what they do, they will have bought low and sold high with a good return. Now in order to be part of the Old Mutal 100 you can buy a unit trust for a mere $100 and know that your $100 is managed by an 'expert' team who are investing your money as they see fit. In comes the problem - what happens if the team is doing a lousy job? Well they are going to do everything they can to disguise their lousy efforts. And hence the reason that I found Unit Trusts that were dismall. So bad that if I simply left my money in savings account at the bank to collect interest I would make a better investment.

Subject: ooooh..... From: Econochick To: Mik Date Posted: Wed, Apr 21, 2004 at 18:05:24 (EDT) Email Address: Not Provided Message: 'As an example: there is a Unit Trust called the Old Mutual 100. The Unit Trust managers have selected 100 companies in which they will buy or sell stocks. They may sell all the stock in one company and go buy into another, so long as they are at any one time investing in 100 companies. Granted they spread the risk and return and in theory they would be doing at least as well as the stock exchange. If the team is good at what they do, they will have bought low and sold high with a good return. Now in order to be part of the Old Mutal 100 you can buy a unit trust for a mere $100 and know that your $100 is managed by an 'expert' team who are investing your money as they see fit.' The whole statement (taken from your post, obviously) is troublesome. This sounds like an actively managed mutual fund. Is it even continuosly priced? Who would price it? It sounds like a run-of-the-mill actively managed mutual fund. And how much of a management fee, if I may ask, were you paying for the pleasure? Mik, you've read my posts on what I think of stock picking. It's basically worthless. Actively managed funds also typically charge higher management fees, further depressing returns. The statistic that sticks out in my mind is that roughly 80% fund managers underperform the S&P 500 when management fees are included in the calculation of returns. Huh? Why would you pay up to underperform? Take Emma's advice: go to the Vanguard website and load up on index funds. By the way, just for the record, I have no vested interest in promoting Vanguard. I am merely an admirer of the way they do business and invest in index funds with them myself.

Subject: Re: ooooh..... From: Mik To: Econochick Date Posted: Thurs, Apr 22, 2004 at 16:37:17 (EDT) Email Address: Not Provided Message: Econochick, RIGHT you are. It is a managed mutual fund with some very fancy words. And yes there is a management fee which they deduct before handing you the revenue - or send you an account if it runs at a loss. There are unit trusts that are fixed - for example the Blue Chip fund is a fixed selection of Blue Chip companies and they cannot change the selection, so there is no active management and they brag that this Unit Trust has half the management fees. (I could simply by the individual shares myself and avoid their fee) So to cut a long story short - this was a clever well advertised scam - in my opinion. And no I did not invest a single cent - but was shocked to see how successful they were in convincing the public to buy. Thanks for the info on Vanguard, but I have already invested every last cent I have (and much money I don't have) into my own business venture that is now keeping me awake at night.

Subject: Indexes From: Emma To: Mik Date Posted: Tues, Apr 20, 2004 at 17:21:48 (EDT) Email Address: Not Provided Message: The way I track indexes is simply through Vanguard. I track a number of the index funds as S&P, large cap growth and value, mid cap, small cap, small cap growth and value, realestate investment trust, europe and pacific and emerging markets. I look at energy and health care as well. Also, convertible securities and a few bond funds.

Subject: Re: Indexes From: Econochick To: Emma Date Posted: Tues, Apr 20, 2004 at 19:07:00 (EDT) Email Address: Not Provided Message: I do the same. But ETFs are very useful for trading - particularly for hedging.

Subject: Bonds From: Emma To: Emma Date Posted: Tues, Apr 20, 2004 at 17:23:50 (EDT) Email Address: Not Provided Message: Convertible securities is a favorite bond fund, as are high yield corporate and tax free funds. But, bonds coud be a problem for some time to come if 10 year treasury rates are headed to 7%.

Subject: A Bear Market in Bonds From: Jennifer To: Emma Date Posted: Tues, Apr 20, 2004 at 17:41:09 (EDT) Email Address: Not Provided Message: Looking to a bear market in bonds is no fun at all! Where do you hide?

Subject: Quite Sensible From: Emma To: Econochick Date Posted: Tues, Apr 20, 2004 at 16:53:16 (EDT) Email Address: Not Provided Message: Still, the place to begin is always Vanguard. Study Vanguard's offerings and remember they have a brokerage for Exchange Traded Funds and other offerings. At least for bonds, I can tell you for sure, you can not beat them on your own no matter how much you have in assets.

Subject: Vanguard From: Econochick To: Emma Date Posted: Tues, Apr 20, 2004 at 19:08:12 (EDT) Email Address: Not Provided Message: You can't beat them on management fees either. Love Vanguard!

Subject: Re: Quite Sensible From: Garibaldi To: Emma Date Posted: Tues, Apr 20, 2004 at 18:42:44 (EDT) Email Address: nma@hotmail.com Message: 'Today, the Huffs are far from millionaires. In fact, they are worse off than they were when they met Mr. Dobbins. By April 2003, their retirement account had lost 65 percent of its value. ' That's why I think that SS should also be privatised...

Subject: Nice try, but... From: Econochick To: Garibaldi Date Posted: Tues, Apr 20, 2004 at 19:18:47 (EDT) Email Address: Not Provided Message: By the way, I love the handles you come up with! You are too funny! on the subject of SS, from what I understand, it wouldn't be handled by these morons. It would be run by private portfolio managers in much the same way as state pension funds are run now. The funds are run by professional money managers and the regulatory bodies restrict the types of investments they can make and the risk that they are able to take on. For example: no options, high risk investments must not exceed X percent of the portfolio, etc. Even with the restrictions, however, the return on the SS portfolio should be much higher, relieving some of the pressure on people paying into the system. I don't really pay much attention to the details of the debate because I have less confidence in government (either republican or democrat) than I do in the broker morons and I'm just not counting on anything being there for my retirement. Nice try though!!

Subject: The Wrong War From: Terri To: All Date Posted: Mon, Apr 19, 2004 at 17:32:44 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/04/19/opinion/19HERB.html The Wrong War By BOB HERBERT Follow me, said the president. And, tragically, we did. With his misbegotten war in Iraq, his failure to throw everything we had at Al Qaeda and Osama bin Laden, and his fantasy of using military might as a magic wand to 'change the world,' President Bush has ushered the American people into a bloody and mind-bending theater of the absurd. Each act is more heartbreaking than the last. Pfc. Keith Maupin, who was kidnapped near Baghdad on April 9, showed up on a videotape broadcast by Al Jazeera last Friday. He was in the custody of masked gunmen and, understandably, frightened. 'My name is Keith Matthew Maupin,' he said, looking nervously into the camera. 'I am a soldier from the First Division. I am married with a 10-month-old son.' Private Maupin is 20 years old and should never have been sent into the flaming horror of Iraq. Now we don't know how to get him out. On the same day that Private Maupin was kidnapped, 20-year-old Specialist Michelle Witmer was killed when her Humvee was attacked in Baghdad. Ms. Witmer's two sisters, Charity and Rachel, were also serving in Iraq. All three women were members of the National Guard. American troops are enduring the deadliest period since the start of the war. And while they continue to fight courageously and sometimes die, they are fighting and dying in the wrong war. This is the height of absurdity....

Subject: The Great Unraveling From: Arne David Hanna To: All Date Posted: Mon, Apr 19, 2004 at 00:05:27 (EDT) Email Address: mogambo1.geo@yahoo.com Message: Hi Folks. I bought the audio book of 'The Great Unraveling' and managed to listen to it once before dropping CD 1 on the floor with result that now only about a minute of the first track will play. The other 5 tracks are fine but track 1 is stuffed. If there is anyone from Australia - I live in Sydney - that has a copy, I'd be extremely grateful for some assistance vis a vis my predicament. Email me at mogambo1.geo@yahoo.com Cheers Arne

Subject: Chinese Demand and Inflation From: Emma To: All Date Posted: Sat, Apr 17, 2004 at 16:29:55 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/04/16/business/worldbusiness/16YUAN.html Newest Export Out of China: Inflation Fears By KEITH BRADSHER GUANGZHOU, China — As managers of businesses across China opened booths here on Thursday at the nation's biggest trade fair, the common refrain was that prices of everything from rice to steel were rising sharply, and that prices of exports to the United States, Europe and elsewhere would have to follow. The prices for orders placed now will not show up in most American indexes for months, when goods are actually shipped. But as prices begin to rise in the United States, concerns are growing that China will become an exporter of inflation. Even though its goods account for a small percentage of total American purchases, China has played an oversize role in worldwide prices, with low labor costs that allow it to set prices in many industries. A socket wrench manufacturer said his high-quality models had risen in price by 10 percent in the last six months and his lesser-quality models by as much as 50 percent. An exporter of automobile exhaust manifolds, brake drums and other parts had raised prices by 10 percent in several increments since December. The prices of steel and other materials are major culprits. Another is energy costs. A motorcycle manufacturer in east-central China said he has had to close a factory for three days each week because of electricity blackouts, forcing a 4 percent increase in prices, with more planned. Food and other necessities are putting pressure on wages. A maker of key-cutting machines in an inland province of central China said it was paying workers 10 to 20 percent more to help cover sharp increases in rice prices and had raised export prices for the machines by 25 to 30 percent. Price increases in raw materials and other business costs in China, a government spokesman said, will probably spill over soon to consumer prices in China and abroad. 'There is a time lag, but it can't be too long, and there is pressure for price rises,' said Zheng Jingping, the spokesman for the National Bureau of Statistics, at a news conference in Beijing on Thursday. 'If this goes on for a long time, it will cause problems.' ...

Subject: American Inflation From: Emma To: Emma Date Posted: Sat, Apr 17, 2004 at 16:33:59 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/04/17/business/17prices.html Trying to Duck Inflation's Punch By LOUIS UCHITELLE The inflation rate, barely noticeable for years, is picking up again in the United States. And even if many American families have yet to curtail their spending, they are certainly annoyed. Ask Katie O'Malley, 18, and her mother, Amy. While shopping in Bloomingdale's in Manhattan on Thursday they discovered that a gown for Katie's senior prom would be $100 more than they paid last year in the same store for a comparable dress for her junior prom. Having traveled to New York from their home in Newark, Del., to take advantage of the greater selection, they finally settled on a $320 gown at Saks - still $40 more than they paid last year. 'We were a little shocked,' Mrs. O'Malley said. Inflation seems to be back. Americans are definitely noticing, and they are beginning to take evasive action. As grocery prices rise, some families are shifting to Sam's Clubs and other warehouse operations offering lower prices than neighborhood supermarkets. Others are spending more time in search of gasoline at less than $2 a gallon, sometimes visiting three or four service stations before finally making a purchase. Still others are ordering prescription drugs from Canada to avoid rising pharmaceutical prices within the United States. No one is yet talking about the sort of double-digit inflation that plagued the economy in the late 1970's and much of the 1980's. And economists are far from certain that the surprisingly sharp increase in the Consumer Price Index so far this year - 5.1 percent on an annualized basis - will continue. But the price squeeze now being felt by people like the O'Malleys, after more than a decade of persistently low inflation, adds a new source of worry for a consumer economy already plagued by a weak job market and stagnant wages. 'The real danger is that you get the inflation but not the corresponding wage increases,' said Dean Baker, a senior economist at the Center for Economic and Policy Research. 'As purchasing power declines, people will either buy less, hurting the recovery, or go deeper into debt.' ...

Subject: Re: American Inflation From: Pete Weis To: Emma Date Posted: Sun, Apr 18, 2004 at 12:54:59 (EDT) Email Address: Not Provided Message: Emma. With rising oil costs as we had in the 70's, do you think we are headed for 'stagflation' similar to that of the 70's?

Subject: Slight Inflation From: Emma To: Pete Weis Date Posted: Mon, Apr 19, 2004 at 15:28:58 (EDT) Email Address: Not Provided Message: Energy costs are a far smaller portion of national income than in the 1970's. Though such costs effect middle and lower income households adversely, they are of little consequence overall. There may be - will likely be - a slight inflation increase from here, not serious. What about growth? There is no reason we can not grow at 4% from here provided we get decent job creation, possibly even if we do not.

Subject: Re: Slight Inflation From: Pete Weis To: Emma Date Posted: Tues, Apr 20, 2004 at 10:12:11 (EDT) Email Address: Not Provided Message: How have increasing energy costs become less of an adverse effect in our present time when compared to the 70's? Aren't increasing energy costs hitting consumers (higher gas pump prices, electric bills, heating bills) and businesses (adding to overhead, higher transportation costs, higher raw material costs, higher energy costs to manufacture, etc) alike? Aren't rising energy costs inflationary at a time when our economy is so dependent on low interest rates?

Subject: Right you are... From: Econochick To: Pete Weis Date Posted: Tues, Apr 20, 2004 at 10:22:42 (EDT) Email Address: Not Provided Message: Pete, again you make a good point about high energy costs. High energy costs mean high transportation costs and high transportation costs mean higher costs of goods. And that meands general inflation. They do push up nominal interest rates and I agree with your implied point that continuing along this trajectory will have bad, if not grave, consequences for our economy. We are, in fact, only slightly less reliant on oil than we were in the 70's. The SUV trend is not making us any less reliant, by the way. The only bright spots I can see on the issue of energy price is Saudi Arabia's recent promise to keep a lid on it and that offshoring factory work brings down the cost of the goods made in those foreign factories. Those two things together, in the right amount, could prevent the 'stagflation' we had in the 70's.

Subject: Nice points.... From: Emma To: Econochick Date Posted: Tues, Apr 20, 2004 at 13:36:36 (EDT) Email Address: Not Provided Message: Nice points, but since energy prices have not kept up with inflation these 20 years and we are more energy efficient, we are less vulnerable to energy costs than in 1980. This according to Alan Greenspan. I am thinking!

Subject: Vietnam analogy column From: WRS To: All Date Posted: Fri, Apr 16, 2004 at 09:40:35 (EDT) Email Address: Not Provided Message: PK's latest column hits many key points that were overlooked by the showboat media during the president's conference this week. The main question: Where are we supposed to get the soldiers to prevail in Iraq? I don't like the Vietnam analogy, perhaps because it appears to be all too apt. PK's points of comparison -- the deception, the appeal to ideology, the sorry showing by local security forces - rings true to a frightening extent. I am torn with the issue of badmouthing the war effort, because I believe negative spin really does demoralize our troops and embolden the enemy. But PK is doing a service by asking tough questions that penetrate to the heart of a very troubling situation. If people keep asking tough questions, we might come up with some answers.

Subject: A Soldier's Sacrifice From: Terri To: WRS Date Posted: Sat, Apr 17, 2004 at 17:27:33 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/04/16/opinion/16HERB.html A Soldier's Sacrifice By BOB HERBERT It was about 3 a.m. and pitch-black when the convoy of U.S. Army trucks, traveling south on Highway 1, turned right and began moving along a rutted dirt road near Bayji, a small town in the Sunni Triangle about 25 miles north of Tikrit. Tyler Hall, a baby-faced 23-year-old sergeant from Wasilla, Alaska, was among the six soldiers in the second truck, which took the brunt of the explosion when the bomb that was buried in the road detonated. Sergeant Hall puts the matter quite succinctly: 'I was blown up in an I.E.D. attack on Aug. 22.' I.E.D. stands for improvised explosive device. That the sergeant survived at all is incredible. He will never be the same. 'All I remember is, like, sparks,' he said during an interview this week at the Washington headquarters of Disabled American Veterans. 'I saw these sparks, and then the whole truck kind of caved in.' The first time he regained consciousness, he was lying on his back in the road. And he remembers, with the dark humor common to troops in combat, a brief John Wayne-like moment. 'My buddy was trying to resuscitate me. He thought I was dead. I came to for a very brief time, and he was about to give me mouth-to-mouth. I said, `What do you think you're doing, trying to make out with me or something?' And he said, `Sergeant Hall, you're alive!' And everybody's like, `Hey, Sergeant Hall's alive!' All I remember after that is hearing the Blackhawk helicopter coming down, and I just lost consciousness from there.' He wouldn't wake up again for another 45 days....

Subject: Openness and Democracy From: Terri To: WRS Date Posted: Sat, Apr 17, 2004 at 09:27:32 (EDT) Email Address: Not Provided Message: Openness is the only proper way to be democratic and show love for the country. The issue is painful, but openness and honesty are essential. We have hurt ourselves.

Subject: Re: Vietnam analogy column From: Jerry To: WRS Date Posted: Fri, Apr 16, 2004 at 16:38:56 (EDT) Email Address: Not Provided Message: Don't beat yourself up about being critical of the war. The idea that we would censor ourselves to keep from demoralizing the troops actually does them a diservice. Remember, we're thinking of their lives when we oppose the war...we want them to come home. If they hate us as individuals, fine, but we're entitled to take a moral stand as well.

Subject: Re: Vietnam analogy column From: soc To: WRS Date Posted: Fri, Apr 16, 2004 at 11:41:19 (EDT) Email Address: soc8248@yahoo.ie Message: In the tradition of the Russell Tribunal on Vietnam the World Tribunal on Iraq is investigating crimes associated with the Iraq war. The Brussells Tribunal started yesterday and can be heard via live audio stream on the website. http://www.brusselstribunal.org/ http://www.911review.org/Wget/www.homeusers.prestel.co.uk/littleton/v1tribun.htm World Tribunal on Iraq http://www.worldtribunal.org/ An Interview with Jacques Derrida on the Brussells Tribunal http://www.indymedia.be/news/2004/04/83123.php http://www.indymedia.be/uploads/derrida_en.pdf For A Justice To Come An Interview with Jacques Derrida Lieven De Cauter The BRussells Tribunal is a commission of inquiry into the “New Imperial Order”, and more particularly into the “Project for A New American Century” (PNAC), the neo-conservative think tank that has inspired the Bush government’s war logic. The co-signatories of the PNAC “mission statement” include Dick Cheney, Donald Rumsfeld and Paul Wolfowitz. The programme of this Think tank is to promote planetary hegemony on the basis of a supertechnological army, to prevent the emergence of a rival super-power and to take pre-emptive action against all those who threaten American interests. The BRussells Tribunal will be held in Brussels from April 14 through 17. One of the greatest living philosophers, Jacques Derrida, who suffers from cancer and is unable to attend the tribunal, has invited the project’s initiator, Lieven De Cauter, to his house for an interview. Lieven De Cauter: While thanking you for your generosity—why have you decided to grant us this interview on our initiative, the “BRussells Tribunal”? Jacques Derrida: First of all I wanted to salute your initiative in its principle: to resuscitate the tradition of a Russell Tribunal is symbolically an important and necessary thing to do today. I believe that, in its principle, it is a good thing for the world, even if only in that it feeds the geopolitical reflection of all citizens of the world. I am even more convinced of this necessity in light of the fact that, for a number of years now, we have witnessed an increased interest in the working, in the constitution of international institutions, institutions of international law which, beyond the sovereignty of States, judge heads of State, generals. Not yet States as such, precisely, but persons responsible for, or suspected of being responsible for, war crimes, crimes against humanity—one could mention the case of Pinochet, despite its ambiguity, or of Milosevic. At any rate, heads of State have to appear as such before an International Criminal Court, for instance, which has a recognised status in international law, despite all the difficulties you know: the American, French, Israeli reservations. Nonetheless this tribunal exists, and even if it is still faltering, weak and problematic in the execution of its sanctions, it exists as a recognised phenomenon of international law. Your project, if I understand it correctly, is not of the same type, even if it is inspired by the same spirit. It does not have a juridical or judicial status recognised by any State, and it consequently remains a private initiative. Citizens of different countries have agreed among each other to conduct, as honestly as possible, an inquiry into a policy, into a political project and its execution. The point is not to reach a verdict resulting in sanctions but to raise or to sharpen the vigilance of the citizens of the world, in the first place that of the responsible parties you propose to judge. That can have a symbolic weight in which I believe, an exemplary symbolic weight. That is why, even though I do not feel involved in the actual experience you intend to set up, I think it is very important to underscore that the case you are about to examine—which is evidently a massive and extremely serious case—is only one case among many. In the logic of your project, other policies, other political or military staff, other countries, other statesmen can also be brought to be judged in the same manner, or to be associated with this case. Personally, I have a critical attitude towards the Bush administration and its project, its attack on Iraq, and the conditions in which this has come about in a unilateral fashion, in spite of official protestations from European countries including France, in violation of the rules of the United Nations and the Security Council... But notwithstanding this criticism — which I have expressed in public, by the way — I would not wish for the United States in general to have to appear before such a tribunal. I would want to distinguish a number of forces within the United States that have opposed the policy on Iraq as firmly as in Europe. This policy does not involve the American people in general, nor even the American State, but a phase in American politics which, for that matter, is about to be questioned again in the run-up to the presidential elections. Perhaps there will be a change, at least partially, in the United States itself, so I would encourage you to be prudent as regards the target of the accusation. LDC: That is why we have directed our attention not to the government in general but more particularly to the Project for the New American Century, the think tank which has issued all these extreme ideas of unilateralism, hegemony, militarisation of the world, ... JD: Where there is an explicit political project which declares its hegemonic intent and proposes to put everything into place to accomplish this, there one can, in effect, level accusations, protest in the name of international law and existing institutions, in their spirit and in their letter. I am thinking as much of the United Nations as of the Security Council, which are respectable institutions, but whose structure, charter, procedures need to be reformed, especially the Security Council. The crisis that has been unfolding confirms this: these international institutions really need to be reformed. And here I would naturally plead for a radical transformation — I don’t know whether this will come about in the short run — which would call into question even the Charter, that is to say the respect for the sovereignties of the nation-states and the non-divisibility of sovereignties. There is a contradiction between the respect for human rights in general, also part of the Charter, and the respect for the sovereignty of the nation-state. The States are in effect represented as States in the United Nations and a fortiori in the Security Council, which gathers together the victors of the last war. All this calls for a profound transformation. I would insist that it should be a transformation and not a destruction, for I believe in the spirit of the United Nations. LDC: So you still remain within the vision of Kant… JD: At least in the spirit of Kant, for I also have some questions concerning the Kantian concept of cosmopolitanism.1 It is in this perspective that I believe initiatives such as yours (or analogous initiatives) are symbolically very important to raise consciousness about these necessary transformations. This will have — at least that is what I hope — the symbolic value of a call to reflection we are in need of, and which the States are not taking care of, which not even institutions like the International Criminal Court are taking care of. LDC: If I may allow myself one specification: we are part of a whole network called “World Tribunal on Iraq”. There will be sessions in Hiroshima, Tokyo, Mexico, New York, London, and Istambul. In London, and there the link between the International Criminal Court and the moral tribunal is very strong, those in charge of the Tribunal on Iraq have, together with specialists, assembled a dossier to investigate whether Blair (who has recognised the International Criminal Court) has broken international law. By all evidence, there is a considerable consensus among specialists to say that this war is a transgression, it is an “aggressive war” in the technical sense of the term as used in the charter of the UN, since there was no imminent threat to the territory of the countries involved. The upshot of this inquiry is that they have submitted a dossier to the International Criminal Court in The Hague. Similarly in Copenhagen, since Denmark is part of the coalition. So it’s possibile that our moral initiative may be transformed, in some of its components, into a juridical procedure strictly speaking. JD: That would be desirable, evidently! But the probability that this would come about seems low, for there would be too many States who would oppose your initiative becoming institutional and generally judicial, and not just the United States. Yet if this doesn’t come about, that does not mean your project is destined to ineffectiveness. On the contrary. I believe in its considerable symbolic effectiveness in the public domain. The fact that it is said, published, even if it isn’t followed by a judgement in the strictly judicial sense, let alone actual sanctions, can have considerable symbolical impact on the political consciousnes of the citizens, a relayed, deferred effect, but one that raises high expectations. I would hope that you would treat those you accuse justly, that yours would be an undertaking of true integrity, devoid of preliminary positioning, without preconditions, that everything would be done in serenity and justice, that the responsible parties would be accurately identified, that you would not go over the top and that you would not exclude other procedures of the same type in the future. I would not want this procedure to serve as an excuse for not conducting other procedures that are just as necessary concerning other countries, other policies, whether they be European or not. I would even wish that the exemplary character of your initiative would lead to a lasting, if not a permanent instance. I believe that it would be perceived as being more just if you didn’t commit yourself to this target as if it were the only possible target, notably because, as you are aware, in this aggression against Iraq, American responsibility was naturally decisive but it didn’t come about without complex complicities from many other quarters. We are dealing with a knot of nearly inextricable co-responsibilities. I would hope that this would be clearly taken into account and that it wouldn’t be the accusation of one man only. Even if he is an ideologue, someone who has given the hegemony project a particularly readable form, he has not done it on his own, he cannot have imposed it on non-consenting people. So the contours of the accused, of the suspect or the suspects, are very hard to determine. LDC: Yes, that is one of the reasons why we have abandoned the strictly juridical format. One of the disadvantages of the juridical format is that you can only target persons. Whereas we want to take aim at a system, a systemic logic. We name the accused (Cheney, Wolfowitz, Rumsfeld) to show people we’re not talking about phantoms, but we take aim at the PNAC as a set of performative discourses, that is to say plans to achieve something, intentions to be translated into action. Our difficulty is also one of communication: communicating to people that PNAC exists and that it is important to spread this knowledge, is already a job in itself. JD: Of course. And for that reason, it is important that matters are partly personalised and partly developed at the level of the system, of the principles, the concept, where this system, these principles, these concepts violate international laws which must be both respected and perhaps also changed. This is where you will not be able to avoid talking about sovereignty, about the crisis of sovereignty, about the necessary division or delimitation of sovereignty. Personally, when I have to take a position on this vast issue of sovereignty, of what I call its necessary deconstruction, I am very cautious. I believe it is necessary, by way of a philosophical, historical analysis, to deconstruct the political theology of sovereignty. It’s an enormous philosophical task, requiring the re-reading of everything, from Kant to Bodin, from Hobbes to Schmitt. But at the same time you shouldn’t think that you must fight for the dissolution pure and simple of all sovereignty: that is neither realistic nor desirable. There are effects of sovereignty which in my view are still politically useful in the fight against certain forces or international concentrations of forces that sneer at sovereignty. In the present case, we have precisely the convergence of the arrogant and hegemonic assertion of a sovereign Nation-State with a gathering of global economic forces, involving all kinds of transactions and complications in which China, Russia and many countries of the Middle East are equally mixed up. This is where matters become very hard to disentangle. I believe that sometimes the reclamation of sovereignty should not necessarily be denounced or criticised, it depends on the situation. LDC: As you have clearly demonstrated in Voyous [Rogues], in deconstructing the term, there is no democracy without “cracy”: a certain power, and even force, is required. JD: Absolutely. You can also talk of the sovereignty of the citizen, who votes in a sovereign fashion, so you need to be very cautious. In my view, the interesting thing about your project is in taking up or pursuing this reflection starting from an actual case which takes a specific form: military, strategic, economic, etc. It is very important to develop such reflection on a case, but this reflection requires considerable time and must accompany the entire geopolitical process in decades to come. It is not just as a Frenchman, European or citizen of the world but also as a philosopher concerned to see these questions developed that I find your attempt interesting and necessary. It will provide an opportunity for others, many others I hope, to adopt a position with regard to your efforts, to reflect, possibly to oppose you, or to join you, but this can only be beneficial for the political reflection we are in need of. LDC: I was amazed by the definition you give in The Concept of September 11: a philosopher, you say, is someone who deals with this transition towards political and international institutions to come. That is a very political definition of the philosopher. JD: What I wanted to convey is that it won’t necessarily be the professional philosophers who will deal with this. The lawyer or the politician who takes charge of these questions will be the philosopher of tomorrow. Sometimes, politicians or lawyers are more able to philosophically think these questions through than professional academic philosophers, even though there are a few within the University dealing with this. At any rate, philosophy today, or the duty of philosophy, is to think this in action, by doing something. LDC: I would like to return to this notion of sovereignty. Is not the New Imperial Order which names “Rogue States” a State of exception? You speak in Voyous about the concept of the auto-immunity of democracy: democracy, at certain critical moments, believes it must suspend itself to defend democracy. This is what is happening in the United States now, both in its domestic policy and in its foreign policy. The ideology of the PNAC, and therefore of the Bush administration, is exactly that. JD: The exception is the translation, the criterion of sovereignty, as was noted by Carl Schmitt (whom I have also criticised, one must be very cautious when one talks about Carl Schmitt, I have written some chapters on Carl Schmitt in The Politics of Friendship where I take him seriously and where I criticise him and I would not want my reflection on Schmitt to be seen as an endorsement of either his theses or his history). Sovereign is he who decides on the exception. Exception and sovereignty go hand in hand here. In the same way that democracy, at times, threatens or suspends itself, so sovereignty consists in giving oneself the right to suspend the law. That is the definition of the sovereign: he makes the law, he is above the law, he can suspend the law. That is what the United States has done, on the one hand when they trespassed against their own commitments with regard to the UN and the Security Council, and on the other hand, within the country itself, by threatening American democracy to a certain extent, that is to say by introducing exceptional police and judicial procedures. I am not only thinking of the Guantanamo prisoners but also of the Patriot Act: from its introduction, the FBI has carried out inquisitorial procedures of intimidation which have been denounced by the Americans themselves, notably by lawyers, as being in breach of the Constitution and of democracy. Having said that, to be fair, we must recall that the United States is after all a democracy. Bush, who was elected with the narrowest of margins, risks losing the next elections: he is only sovereign for four years. It is a very legalistic country rich in displays of political liberty which would not be tolerated in a good many other countries. I am not only thinking of countries known to be non-democratic but also of our own Western European democracies. In the United States, when I saw those massive marches against the imminent war in Iraq, in front of the White House, right by Bush’s offices, I said to myself that if in France protesters assembled in their thousands and marched in front of the Elysée in a similar situation, that would not be tolerated. To be fair, we must take into account this contradiction within American democracy — on the one hand, auto-immunity: democracy destroys itself in protecting itself; but on the other hand, we must take into account the fact that this hegemonic tendency is also a crisis of hegemony. The United States, to my mind, convulses upon its hegemony at a time when it is in crisis, precarious. There is no contradiction between the hegemonic drive and crisis. The United States realises all too well that within the next few years, both China and Russia will have begun to weigh in. The oil stories which have naturally determined the Iraq episode are linked to long-term forecasts notably concerning China: China’s oil supply, control over oil in the Middle East… all of this indicates that hegemony is as much under threat as it is manifest and arrogant. It is an extremely complex situation, which is why I am bound to say it should not be a matter of blanket accusations or denunciations levelled against the United States, but that we should take stock of all that is critical in American political life. There are forces in the United States that fight the Bush administration, alliances should be formed with these forces, their existence recognised. At times they express their criticism in ways much more radical than in Europe. But there is evidently — and I suppose you will discuss this in your commission of inquiry —the enormous problem of the media, of control of the media, of the media power which has accompanied this entire history in a decisive manner, from September 11 to the invasion of Iraq, an invasion which, by the way, in my opinion was already scheduled well before September 11. LDC: Yes, as a matter of fact that is one of the things that need to be proven. The PNAC, in 2000, writes: “the United States has for decades sought to play a more permanent role in Gulf regional security. While the unresolved conflict with Iraq provides the immediate justification, the need for a substantial American force presence in the Gulf transcends the issue of the regime of Saddam Hussein.” They write this in September 2000: it was already decided, all the rest was just an alibi. JD: I have had this debate in public with Baudrillard, who said that the aggression against Iraq — which was then being prepared— was a direct consequence of September 11. I opposed that thesis, I said that I thought it would take place anyway, that the premises had been in place for a long time already, and that the two sequences can be dissociated, to a certain extent. The day when this history will be written, when the documents are made public, it will become clear that September 11 was preceded by highly complicated underhand negotiations, often in Europe, on the subject of petrol pipe-line passage, at a time when the petrol clan was in power. There were intrigues and threats, and it is not impossible to think that one day it will be discovered that it was really the Bush clan that was targetted rather than the country, the America of Clinton. But we shouldn’t stop at petrol: there are numerous other strategic geopolitical stakes, among them the tensions with China, Europe, Russia. Alliances with the United States, variable as ever, since it has attacked those who they have supported for a very long time. Iraq was an ally of the United States as of France: all of this is part of diplomatic inconstancy, hypocritical from end to end, and not only on the part of the United States. There are many more stakes than petrol alone, especially since petrol is a matter of only a few more decades: there won’t be any oil left in 50 years! We must take the petrol question into acount, but we shouldn’t devote all our attention and analysis to it. There are military questions, passing through territorial questions of occupation and control. But military power is not only a territorial power, we know that now, it also passes through non-territorialised controls, techno-communicational channels etc. All of this has to be taken into account. LDC: And Israel? JD: Many have said that the American-Israeli alliance or the support the United States give to Israel is not unrelated to this intervention in Iraq. I believe this is true to some extent. But here too matters are very complicated, because even if the current Israeli government—and here I would take the same precautions as for the United States: there are Israelis in Israel who fight Sharon — has indeed congratulated itself officially and in public on the aggression against Iraq, the freedom this may have apparently given Israel in its offensive initiatives of colonisation and repression is very ambiguous. Here too we could speak of auto-immunity: it’s very contradictory, because at the same time this has aggravated Palestinian terrorism, intensified or reawakened symptoms of anti-semitism across Europe… It’s very complicated, for if it is true that the Americans support Israel — just like the majority of European countries, with different political modulations - , the best American allies of Sharon’s policy, that is to say the most offensive policy of all Israeli governments, are not only the American Jewish community but also the Christian fundamentalists. These are often the most pro-Israeli of all Americans, at times even more so than certain American Jews. I’m not sure it will turn out to have been in Israel’s best interest that this form of aggression against Iraq has come about. The future will tell. Even Sharon meets with opposition in his own government nowadays, in his own majority, because he claims to withdraw from the Gaza colonies. The difficulty of a project such as yours, however just and magnificent it may be in its principle, is that it must cautiously take this complexity into account, that it must try not to be unfair to any of the parties. That is one of the reasons why I insist in confirming my solidarity in principle. Unable to participate effectively in the inquiry and in the development of the judgement because of my illness, I prefer to restrict myself for now to this agreement in principle, but I will not hesitate to applaud you afterwards, if I find you have conducted matters well! LDC: Your statements are limpid and will serve as drink for many who are thirsty (for justice, for instance). Thank you very much. By way of post-script: let us speak of messianism for a minute or so. That is to say of “the weak force”, which refers to Benjamin and which you evoke in the “Prière d’insérer”, the preface to Voyous. Allow me to quote from it: “This vulnerable force, this force without power exposes to what or who is coming, and coming to affect it (…) What affirms itself here would be a messianic act of faith—irreligious and without messianism. (…) This site is neither soil nor foundation. It is nonetheless there that the call for a thought of the event to come will take root: of democracy to come, of reason to come. All hopes will put their trust in this call, certainly, but the call will remain, in itself, without hope. Not desperate but alien to teleology, to the expectancy and the benefit [salut] of salvation. Not alien to the salavation [salut] of the other, nor alien to the farewell or to justice, but still rebellious towards the economy of redemption.”… I thought this very beautiful. Almost a prayer to insert — into the everyday, into our project. What is it, this messianism without religion? JD: The weak force indeed refers to the interpretation of Benjamin, but it is not exactly mine. It is what I call “messianicity without messianism”: I would say that today, one of the incarnations, one of the implementations of this messianicity, of this messianism without religion, may be found in the alter-globalisation movements. Movements that are still heterogeneous, still somewhat unformed, full of contradictions, but that gather together the weak of the earth, all those who feel themselves crushed by the economic hegemonies, by the liberal market, by sovereignism, etc. I believe it is these weak who will prove to be strongest in the end and who represent the future. Even though I am not a militant involved in these movements, I place my bet on the weak force of those alter-globalisation movements, who will have to explain themselves, to unravel their contradictions, but who march against all the hegemonic organisations of the world. Not just the United States, also the International Monetary Fund, the G8, all those organised hegemonies of the rich countries, the strong and powerful countries, of which Europe is part. It is these alter-globalisation movements that offer one of the best figures of what I would call messianicity without messianism, that is to say a messianicity that does not belong to any determined religion. The conflict with Iraq involved numerous religious elements, from all sides—from the Christian side as well as from the Muslim side. What I call messianicity without messianism is a call, a promise of an independent future for what is to come, and which comes like every messiah in the shape of peace and justice, a promise independent of religion, that is to say universal. A promise independent of the three religions when they oppose each other, since in fact it is a war between three Abrahamic religions. A promise beyond the Abrahamic religions, universal, without relation to revelations or to the history of religions. My intent here is not anti-religious, it is not a matter of waging war on the religious messianisms properly speaking, that is to say Judaic, Christian, Islamic. But it is a matter of marking a place where these messianisms are exceeded by messianicity, that is to say by that waiting without waiting, without horizon for the event to come, the democracy to come with all its contradictions. And I believe we must seek today, very cautiously, to give force and form to this messianicity, without giving in to the old concepts of politics (sovereignism, territorialised nation-state), without giving in to the Churches or to the religious powers, theologico-political or theocratic of all orders, whether they be the theocracies of the Islamic Middle East, or whether they be, disguised, the theocracies of the West. (In spite of everything, Europe, France especially, but also the United States are secular in principle in their Constiutions. I recently heard a journalist say to an American: “how do you explain that Bush always says ‘God bless America’, that the President swears on the Bible, etc.” and the American replied: “don’t lecture us on secularity for we put the separation of Church and State into our Constitution long before you did”, that the State was not under the control of any religion whatsoever, which does not stop Christian domination from exerting itself, but there too it is imperative to be very cautious). Messianicity without messianism, that is: independence in respect of religion in general. A faith without religion in some sort. Transcribed by Maïwenn Furic (Ris Orangis, Thursday February 19 2004) Translated by Ortwin de Graef 1 Derrida alludes to his reflection on Kant and his idea of a ‘Völkerbund’ (alliance of peoples) in Voyous [Rogues], pp. 118

Subject: Re: Vietnam analogy column From: Jerry To: soc Date Posted: Fri, Apr 16, 2004 at 16:36:56 (EDT) Email Address: Not Provided Message: Jeez...I have to admit, although don't hate me for it, that I have a terminal degree in history and have spent my life studying philosophy, but I absolutely cringe when I read Derrida. Even though I agree with him here, he expends a thousand words to say something a more comprehensive thinker could spell out in a hundred. Plus his writings are utter nonsense. He goes on for pages literally saying nothing. Ugh...I'd actually rather read the likes of PK who can at least make a point without referring to Kant...whom I'm not a big fan of anyway. A Kantian argument can be made for most anything and bringing that to the fore in this debate really just makes the interviewer sound cool.

Subject: PK Cares so Much From: Terri To: Jerry Date Posted: Sat, Apr 17, 2004 at 09:31:08 (EDT) Email Address: Not Provided Message: PK simply cares for who we are and what we are about and what we will become. This is moral philosophy.

Subject: Re: Vietnam analogy column From: El Gringo To: Jerry Date Posted: Fri, Apr 16, 2004 at 17:38:20 (EDT) Email Address: nma@hotmail.com Message: 'Those who profess to favor freedom, and yet deprecate agitation, are men who want crops without plowing the ground.'Douglass, Frederick

Subject: Thomas Sowell on unemployment From: Kosh To: All Date Posted: Thurs, Apr 15, 2004 at 17:38:44 (EDT) Email Address: jrgallag@earthlink.net Message: Sowell suggests that people dropping out of the labor force is not a problem. The labor force dropouts are just young people who choose to sponge off of their parents and if it weren't for that darn minimum wage the could find jobs. Although the unemployment rate has been at near record lows, despite the slow growth of employment, this has been because of people who simply dropped out of the labor force, and were therefore not counted as unemployed. But think about it. Can you or I simply drop out of the labor force? Of course not. We have bills to pay. Who can drop out then? Usually either those who are rich, those who are willing to live on handouts or young people still living with or off their parents. According to the March 22nd issue of BusinessWeek magazine, 'almost all' of the decline in the number of people seeking work 'has occurred in the 16- to 24-year-old age group.' Labor force participation among people older than that has continued to be what it usually is. In other words, people who have to support themselves and their families were not the ones dropping out of the labor force. When things get tough for younger people, they can turn to mom and dad. Others turn to the taxpayers. There is another aspect to this, however. Jobs have long been harder for young people to find. Some might say that this is due to their lesser skills and experience. But there is no inherent reason why low-skill people should be any less employable at low wages than high-skill people are at high wages. The difference is that the government sets a lower limit to the movement of wages and also mandates working conditions and other benefits that are the same for everyone. All these things cost money and in effect make the minimum wage higher. http://www.townhall.com/columnists/thomassowell/ts20040408.shtml

Subject: Re: Thomas Sowell on unemployment From: Paul G. Brown To: Kosh Date Posted: Sat, Apr 17, 2004 at 14:57:35 (EDT) Email Address: Not Provided Message: Sowell -- as his choice of pulpit suggests -- is an idealogue of the right. The quality of his thinking is usually reasonable, and his writing is always better-than-average. Yet here, and in other places, he exhibits a kind of Panglossian cognitive dissonance. In Sowell's world, freedom is good, and freedom is synonymous with unfettered capitalism, and therefore anything and everything the market gives us is, by definition, as good as it is possible to be. Reality suggests otherwise? Well, that just means reality is in danger of losing what few shreds of its credibility remains. A mental trick you'll often see employed by intellectuals caught in such a dilemna is to try to shift the discussion to (oft obscure) 'secondary effects'. Sowell's right on the facts. Only those who can stop looking for work, will. And we are coming down from historically very high levels of employment. Fine. Two years into a strong recovery (as measured by GDP) job growth isn't keeping pace with population growth (until March) and Bush 43 will be the first president since Hoover to have fewer jobs at the end of his term than at the start. At the same time we have had, by the broad measures, fiscal and monetary policy dials set to 'All Ahead Warp 11' while operating under the kind of laissez faire regulatory model beloved by 'Kenny-Boy Lay'-types the world over. The reason, according to Sowell's, is that $5.15 an hour is more than the average 16-to-24 year old is worth.

Subject: Re: Thomas Sowell on unemployment From: DW To: Paul G. Brown Date Posted: Wed, Apr 21, 2004 at 10:21:10 (EDT) Email Address: Not Provided Message: Paul, How can you say that President Bush will be the first president since Hoover to have fewer jobs at the end of his term than at the start? That's a pretty nifty crystal ball. Where can I get one? Also, what is the average 16-24 year old worth? Do we not earn at our marginal productivity. Are you suggesting that no one's mpl is lower thatn $5.15/hour?

Subject: Nice Critique From: Emma To: Paul G. Brown Date Posted: Sat, Apr 17, 2004 at 16:20:42 (EDT) Email Address: Not Provided Message: Nice critique.

Subject: Re: Thomas Sowell on unemployment From: Jennifer To: Kosh Date Posted: Sat, Apr 17, 2004 at 09:32:45 (EDT) Email Address: Not Provided Message: This is a spurious cold article. We do have a quite difficult labor market.

Subject: Government and Growth From: Emma To: All Date Posted: Thurs, Apr 15, 2004 at 16:10:19 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/04/15/business/15scene.html Does Big Government Hurt Economic Growth? By JEFF MADRICK IN widely reported comments before a Congressional committee in February, Alan Greenspan, the Federal Reserve chairman, suggested that President Bush's tax cuts should not be even partly rescinded. Rather, Mr. Greenspan said, the nation should cut future domestic spending, including Social Security benefits, to balance the budget. Higher spending or higher taxes would deter economic growth, he warned. The committee should have asked the statistically oriented chairman for the evidence. A comprehensive analysis by the economic historian Peter H. Lindert, published in a new book, 'Growing Public' (Cambridge University Press), contends that there simply is none. His analysis is partly a broad extension of other studies by economists like Joel B. Slemrod of the University of Michigan, but he adds considerably to the argument. Mr. Lindert is a professor at the University of California, Davis; former president of the Economic History Association; and an associate of the National Bureau of Economic Research. He has examined levels of taxes, public investment in education, transportation and health care, and social transfers like Social Security, and finds a stark contradiction between conventional wisdom and the evidence. 'It is well known that higher taxes and transfers reduce productivity,' he writes. 'Well known - but unsupported by statistics and history.' He compares the level of social spending over nine decades up to 2000 in 19 developed nations, including most of Western Europe, Japan, Australia, the United States and Canada. His analysis differs from many studies in part because he focuses on social programs, not overall government spending. He finds that high spending on such programs creates no statistically measurable deterrent to the growth of productivity or per capita gross domestic product. As many nations in Europe built welfare states after World War II, they continued to grow faster than the United States, a nation with low social spending. For many people, this defies common sense....

Subject: Re: Government and Growth From: Pete Weis To: Emma Date Posted: Sat, Apr 17, 2004 at 13:36:18 (EDT) Email Address: Not Provided Message: 'As many nations in Europe built welfare states after World War II, they continued to grow faster than the United States, a nation with low social spending.' Remember, Europe started after WW II from shambles so they grew from nearly nothing to something still considerabley less than the standard of living of the US even by the late 60's. However this is an interesting issue Emma, and I like to post more when I get more time.

Subject: Terrific From: Emma To: Pete Weis Date Posted: Sat, Apr 17, 2004 at 16:21:36 (EDT) Email Address: Not Provided Message: Thanks.

Subject: Re: Terrific From: Pete Weis To: Emma Date Posted: Sat, Apr 17, 2004 at 23:50:00 (EDT) Email Address: Not Provided Message: Sorry. Rereading my last line, I realize it sounds pretty bad. I was in a rush. Believe the issue you introduced is important and wanted to say more about it. Just think that so much is attributed to the years following WW II, which is not true. One of them is that wars are good for the US economy since government's spending on new war technologies ends up developing spinoffs which boosts economic development. When you look back at history, the really influential technological developments - water power (which started the industrial age), steam power (rail roads), electric power (internal combustion engine, assembly line, etc), and now the computer age all had nothing much to do with war technologies. This idea that 'social spending' by European governments benefited economic development in European countries after WW II seems questionable to me. Do think it's more of a moral issue, because I believe a government does have a responsibility for the welfare of all its citizens, especially the less fortunate ones. If we are to have some idea as to where we are headed in the future, I think it's important to understand how we got to where we are now -the successes as well as the failures. To me, the only way any country can keep its economy 'above water' is to have a balance budget and balanced trade. The only way a country can become wealthier with an elevating standard of living is to have a balanced budget with a trade surplus. It's literally as simple as that. You can talk about governments taking an active role to boost their economies, you can develop complicated economic models, and you can quote the words of great economists of yore, but you can't change the fact that if you have more cash going out than coming in you are getting poorer. When we look back at the years following WW II, the US came out relatively unscathed with a world which needed rebuilding. Into the early 60's the US produced more than half of the world's oil, steel, automobiles, wheat, corn, etc. We had great trade surpluses and balanced budgets. The Japanese and Europeans came out of great devastation brought on by WW II to finally compete in the late 60's and 70's to the present. Our great natural resources began to dwindle. The Europeans and Japanese had rebuilt the manufacturing base with more modern facilities than we had in the US. Our trade surpluses turned into trade deficits, our balanced budgets became budget deficits. We've been borrowing heavily both as a government and on a personal basis to keep up our high level of living and spending. Now we are facing yet another wave of competition of cheaper labor from India and China. Any effective governmental policy to help us economically will need to address our twin deficits and it will have to do it quickly. Whether this comes in the form of funding new energy technologies or some serious national energy conservation, or other technologies to give US companies a 'leg up' on their competition, I'm not exactly sure. But time is running out and may have already to prevent serious dislocation.

Subject: Re: Government and Growth From: Yann To: Emma Date Posted: Fri, Apr 16, 2004 at 13:10:46 (EDT) Email Address: Not Provided Message: Thank you for the link. Very interesting. Is it really new? I think the OECD data say the same thing for many years: there seems to be no serious link between tax-and-social-security-contributions and economic growth (am I wrong?). I think the economist Edmund S. Phelps said that in an old paper, if my memory serves me well. Moreover PK added in his paper entitled “Roads Not Taken” (April 25, 2003): “I know the party line: tax cuts for high earners are the key to economic growth, and a rising tide lifts all boats. But there's not a shred of evidence supporting that claim.” Would you know one or two papers on this matter?

Subject: Re: Government and Growth From: Mik To: Emma Date Posted: Fri, Apr 16, 2004 at 11:55:49 (EDT) Email Address: Not Provided Message: Wow Emma... this is an interesting article. You come across any more on this topic? On second thought I'd imagine there is a balance between all forms of gov spending and the percentage of social program in comparison to all government programs.

Subject: New York City Housing Prices From: Emma To: All Date Posted: Thurs, Apr 15, 2004 at 14:36:13 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/04/15/nyregion/15price.html Apartments Going Up, to an Average of $1 Million By MOTOKO RICH The average sales price for an apartment in most of Manhattan rose to $998,905 in the first three months of 2004, surpassing the previous record of $919,959, set in the third quarter of last year. At a time when economists and homebuyers have been wondering whether a housing bubble is on the verge of popping, the average sales price climbed to a record high, according to the Douglas Elliman Manhattan Market Overview, one of the most comprehensive surveys of the real estate market below 96th Street on the East Side and below 112th Street on the West Side. According to Miller Samuel, the appraisal firm that prepared the Elliman report, the median price - the exact middle of all apartment sales - in Manhattan during the first quarter was $625,000. But even that was a record, up 21 percent from the same period a year earlier. Figures from the Corcoran Group, one of the largest real estate brokers in Manhattan, showed that average prices breached the psychological barrier of $1 million in the first quarter of this year, rising 32 percent, to $1,001,000, from $760,000 in the same period last year. The high averages posted last quarter have all been skewed by high-priced sales as more people have bought bigger and more expensive apartments than at the same time last year. Many of the price increases were driven by bidding wars and buyers offering well over asking prices. According to Corcoran, the number of deals that closed over the asking price was 57 percent in the first quarter, up from just 23 percent in the same period last year. Dottie Herman, president of Prudential Douglas Elliman Real Estate, said the increase was simply a case of supply and demand. 'There really is no supply,' she said. Indeed, according to the firm's market overview, inventories of available apartments for sale continued to fall in the first quarter to 4,299 apartments, down 32 percent from 6,349 a year ago....

Subject: Re: New York City Housing Prices From: Jerry To: Emma Date Posted: Fri, Apr 16, 2004 at 16:42:42 (EDT) Email Address: Not Provided Message: Supply and demand my arse...there's a national real estate bubble that is going to burst. Look at how the trend in rent is declining and the trend in housing is going up, nationally. Look at how far housing has outpaced inflation. The signs are there. Recent numbers indicate a trend toward some base inflation...my guess driven by fuel costs. If Greeny pulls his typical kneejerk and interest rates rise you could start to see housing - about the only bright spot in the economy - start to crumble.

Subject: deflation risks From: Deflationist To: All Date Posted: Thurs, Apr 15, 2004 at 12:47:28 (EDT) Email Address: francois_dubreuil@libertysurf.fr Message: Hi there I would like to know if any of you has any update on the present risks of deflation. Would any of you know where to get : statistics on debt in the USA and other OECD countries. I'm talking of public and private debt, house holds and companies. The OECD only releases stats on households. THe stats on public debt are deflated with the valuation of assets .. Is there anywhere where stats of debt appear separately ? Where could I get the figures for enterprise debts ? Do any of you know this website www.depression2.tv Has P Krugman any comment on the slowing of the velocity of money circulation. Is this a sign of a growing liquidity trap (people storing cash)? If I'm right, as borrowing goes up, sparing (I mean saving, see below) should go up too, as more money flows out of the revenue to pay for the credits of the past ... at least it is so in french statistics. How then is it possible that the US citizens are both : heavily indebted and low sparing (what's the F... english standard word for saying that you spend or you ... is there another word ? Sparing rate does not ring a bell... Saving !!! That's it) .. How come they save 3% of their revenue if their monthly payments for credit are well above that ... Is it that credit is currently being paid by new credit all the time ? Is household investment always up ? There has been a lot of money creation, this has not turned into inflation, because velocity of circulation went down. Can it go up again (and create inflation) ? What makes the velocity move up and down ? Is there any bet as to how long the dollar can remain the international currency ? More simply is there any comprehensive book on the risk of deflation... deflation depression www.depression2.tv

Subject: Re: deflation risks From: Emma To: Deflationist Date Posted: Thurs, Apr 15, 2004 at 16:06:34 (EDT) Email Address: Not Provided Message: The mood has quickly changed from deflation worry to inflation caution.

Subject: What is your opinion? From: Yann To: All Date Posted: Thurs, Apr 15, 2004 at 03:37:58 (EDT) Email Address: Not Provided Message: Yesterday, a French daily said (I hope that the translation is good): “Whenever Americans found themselves in an inextricable situation (Vietnam, Cambodia, Somalia), they ended up by leaving, abandoning to their misfortune the countries they wanted to “liberate”.” What is your opinion about this?

Subject: Yann, please give me a link From: David E... To: Yann Date Posted: Thurs, Apr 15, 2004 at 12:40:29 (EDT) Email Address: Not Provided Message: This sounds incredibly stupid, I am sure a frenchman might say this, but I doubt it. This looks like a sophomoric right wing rumor to me. Please provide a link.

Subject: David, the link From: Yann To: David E... Date Posted: Fri, Apr 16, 2004 at 03:46:02 (EDT) Email Address: Not Provided Message: David, I found this viewpoint in “Le Monde”, in its review of the press (April 15 edition, page 32). This is the viewpoint of Bernard Revel who seems to be a leader writer in “L’Independant”, a French daily. The link provided by “Le Monde” is http://www.lemonde.fr/web/recherche_resumedoc/1,13-0,37-849580,0.html. But the article is not free of charge!

Subject: Braod Empty Comment From: Terri To: David E... Date Posted: Thurs, Apr 15, 2004 at 16:23:21 (EDT) Email Address: Not Provided Message: There is no reason to worry about such a broad empty statement. We are not repeating history, each situation has different characteristics. I just wish we had not attacked Iraq, since there was no threat to America from Iraq.

Subject: Vive le frommage!! From: Econochick To: Yann Date Posted: Thurs, Apr 15, 2004 at 03:50:03 (EDT) Email Address: Not Provided Message: Somalia was a peace-keeping mission, the only ones who suffered from our departure were Somalies. What the heck that's doing in same sentence as Vietnam and Cambodia puzzles me. Speaking of Vietnam...that was a French colonial disaster was it not? France and Algeria didn't work out all that well either - it took them torturing (literally) the population for year to realize the futility of that colonial effort and pull out. Lebanon and Syria were slightly less bloody but no more successful. Let's see...oh yeah! There was that valiant fight against Hitler when they laid down their arms to make way for the Germans to take Paris without more of a fight than a couple of guns going off by accident because they didn't actually know how to use them. I'm a little upset with the French. Can you tell? But, for the record, that started way before this war for me. Here's what I think: you actually have to be successful at something other than cheese, wine and rhetoric before you gain the right to criticize others for trying.

Subject: Re: Vive le frommage!! From: Jerry To: Econochick Date Posted: Fri, Apr 16, 2004 at 16:53:43 (EDT) Email Address: Not Provided Message: I think it's about time you laid off the French and World War II. It's fun and games to laugh at them because they are an easy target, but your knowledge of the French experience during that war is clearly non-existant. The French put up a strong resistance against overwhelming odds still suffering under an economic collapse precepitated by an earlier war and a global depression. Further, the Vichy government committed horrible atrocities. The French underground, regular folks like you and me, not paid soldiers resisted the Nazis with everything they had. They fought and died by the thousands to save their homes. As for Vietnam, the French started it, but we made it stick. What was the indecent end to a colonial rebellion became the front lines of the cold war under the fine auspices of a succession of American presidents. Hello? The 'domino theory.' That was all us. The French are a truly fine people. The average French person loves America and Americans even though we seem to hold nothing but disdain for them. You suppose that because the French don't play lapdog to the United States that they don't get a say? Bah...I find your osting more motivated by ethnocentrism than anything real.

Subject: Not ethnocentric From: Econockhick To: Jerry Date Posted: Sun, Apr 18, 2004 at 14:11:52 (EDT) Email Address: Not Provided Message: I do indeed know about the French resistance and the Vichy government and all the rest of it. The point is that the French have had a much longer history of cowardice and brutality, Imperialism and military failures. Today, in the UN they constantly oppose the US on the most mundane issues where there is no conflict, like adding patrols the the Suez Canal, just for the hell of it. This introduces inefficiencies that slow the already gummy process of the UN. Few people know about this stuff because it is too boring to make the news. The point is, the French are in no position to make the accusations about America made in Le Monde (see Yann's post at the top of the thread). You may disagree with my opinion on France's low position but that is why it is called opinion and not fact.

Subject: Re: Vive le frommage!! From: Pete Weis To: Econochick Date Posted: Thurs, Apr 15, 2004 at 10:38:35 (EDT) Email Address: Not Provided Message: Econochick. Although I'm not upset with the French to the extent that you are and have thought all along that invading Iraq was a terrible blunder, your post has the ring of truth. Considering their own miserable history of not finishing what they started, it's not a trip down memory lane into which any Frenchman should wander.

Subject: Re: Vive le frommage!! From: Deflationist To: Pete Weis Date Posted: Thurs, Apr 15, 2004 at 12:32:44 (EDT) Email Address: francois_dubreuil@libertysurf.fr Message: IMHO ... ANy country who found itself in an inextricable situation ... Went out (which prooves the situation was not as inextricable as previously thought). Being French I'm not sure the USA will leave, at least not yet. Too much at stake. Pride, oil, credibility, and all the money spent... But one must admit that the first year has not been a plain success. And there is some irony in seeing americans ask iranis for mediation with the shiites in Irak... The more time passes ... The more it seems to me, Israel will end up just like the crusaders kingdom. They have been at least following the road for the last 5 years. And all in all this will look in one century as the one big western 'civil war'. After all, muslims, christians and jewish people all stem from the same book. All believe in one god. ANd look who's growing : indians who whorships 'idols', 1000s of gods ... And chinese who worship their ancesters and no real god ... And remain confident about one thing : the more emphasis on religion the less on the political regime. India is a democracy. Does it get any support from the west ? Pakistan is no democracy but helps fighting the islamists ... it gets plenty of it. Are the USA fighting for democracy or against Islam ? Bush has been a bit too christian and too repressive to sound credible on that matter. So if I sum up. Fighting for democracy should start with doing something against china and for India, those future leaders of the world. One can only pray things will be better in Irak, but one thing is sure the way is tricky. All the countries around will have to move. (what about democracy for Iran shiites ? What about autonomy for syrian, iran and turkish kurds ? what about Israel doing a gesture to comply with UNO sanctions ?) Beside it is not sure any free Iraq would like to host american troops ... Are the americans willing to leave ? (and what if it has an impact on other countries of the region) If I had to comment on a french paper it would be in commenting this picture : blind bush with dark glasses moves his white stick in front of him and says to the soldiers behind (reinforcement)... COme with me, let's finish the job.

Subject: Re: Vive le frommage!! From: El Gringo To: Deflationist Date Posted: Fri, Apr 16, 2004 at 18:02:41 (EDT) Email Address: nma@hotmail.com Message: Yann, learn to respect!(ump)

Subject: JAMIE GORELICK FOR ATTORNEY GENERAL From: JIM To: All Date Posted: Wed, Apr 14, 2004 at 18:53:06 (EDT) Email Address: JZMMARG@AOL.COM Message: FROM MY OBSERVATIONS OF THE 9/11 COMMISSION HEARINGS, I THINK THAT JOHN KERRY, IF HE IS ELECTED PRESIDENT, SHOULD APPOINT JAMIE GORELICK AS HIS ATTORNEY GENERAL. SHE IS ONE SMART,TOUGH AND ARTICULATE COOKIE.

Subject: Inflation in China From: Emma To: All Date Posted: Wed, Apr 14, 2004 at 15:02:00 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/04/14/business/worldbusiness/14yuan.html?8hpib In China, Signs of an Overheating Economy By KEITH BRADSHER HONG KONG - - There were more worrisome signs of inflationary pressure in China, as Beijing announced that bank lending climbed briskly in March and the central bank failed to sell all the treasury bills that it tried to auction at current interest rates. It was the fourth week in a row that the People's Bank of China was unable to sell all its bills, indicating that investors expect inflation or interest rates - or both - to rise markedly.Zhou Xiaochuan, the governor of China's central bank, gave on Tuesday one of the grimmest assessments yet by a Chinese official of the risks that the economy might overheat. 'There are problems in economic activity, with investment demand expanding too fast, money and credit growing too quickly, and inflationary pressures rising,' he said in a statement published in the Financial News, the bank's newspaper. China's inflation is important to the United States and Europe because it could start to affect prices in the United States, especially as China bids up the price of oil and other commodities around the world. And if the boom here is followed by a bust, the result would likely be an even greater wave of exports as China's consumers would lose their buying power. Private economists differ on the likelihood that China will be able to brake its economy gently down to a more sustainable pace. The question is whether China can avoid a recession that would cause a wave of corporate failures, non-performing bank loans and perhaps social unrest. Some economists are quite worried....

Subject: Rate Cuts in Canada From: Emma To: Emma Date Posted: Wed, Apr 14, 2004 at 17:38:27 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/04/14/business/worldbusiness/14canada.html Canada Rate Is Lowered for 5th Time in Last Year By BERNARD SIMON TORONTO - The Bank of Canada lowered its key interest rate on Tuesday for the fifth time in the last year, noting that many Canadian businesses still needed to adjust to a more competitive global economy in spite of benefits from strong commodity prices. The central bank dropped its overnight lending rate to 2 percent from 2.25 percent. The rate was 3.25 percent a year ago when the Canadian economy appeared to be on the verge of a growth spurt and accelerating inflation. Since then, a sharp rise in the Canadian dollar has dampened exports, and consumers, previously the driving force behind economic growth, have turned more cautious. The Canadian dollar surged from a low of 62 American cents in early 2002 to 79 cents in January. The recent interest rate cuts have put a brake on the Canadian currency by making yields on Canadian securities less attractive to foreigners....

Subject: Re: Inflation in China From: Mik To: Emma Date Posted: Wed, Apr 14, 2004 at 15:50:57 (EDT) Email Address: Not Provided Message: Wow Emma, this is a great story - thanks

Subject: Econochick - the Hyper, Hyper text lover From: Mik To: All Date Posted: Wed, Apr 14, 2004 at 13:52:39 (EDT) Email Address: Not Provided Message: LOL... gee wiz you have REALLY taken to this hyper-text stuff. Okay now finally we have some sort of discussion going on here. And I must first thank you for your input. I hope that by exchanging our thoughts on a matter we will only add to our understanding and not try throw in stubborn attitudes. Sorry for the long post, but I believe we have a good discussion going on here. So now in response to your post: I see we are in total agreement about not wanting clerics in power. Our stark difference is in the opinion about what the majority of people want. I suppose that there is no real poll that actually describes exactly what people want and making simple statements like, 'they want freedom' is just way to simplistic in my view (I’m not saying that you made these statements). Heck I believe everyone wants freedom – but freedom to do what?… freedom to implement a popular system that will in turn discriminate against others and hamper human development? I come from a country where the majority of people want freedom and democracy. Unfortunately the majority of people also want to choose a political party that will implement laws and regulations that not only curtail the freedom but adversely affect minority groups. In essence, most of these laws and regulations affect the minority groups in the short run and affect the majority in the long run. Unfortunately the majority does not understand this. Unless you have lived in this environment, I don’t think you’d understand it too – and I believe this is a problem for most westerners who see national carnage on TV and can’t really appreciate what is going on, simply because we cannot fully explain what is going on in a 20 second News bite. I spend most of my career studying developing countries and the issue is the same over and over again: In developing countries, you almost always find a minority group that advances above the rest and controls the country’s wealth. The majority revolts and takes over only to implement policies that in the long run lead to self destruction. Does pre-world war II Germany sound familiar? How about Argentina? What about Cuba? Vietnam? Uganda? Ethiopia? Or in more recent times – South Africa? As a current case example study the recent events in Zimbabwe, their history is directly linked to economic stupidity. Now Iraq in my mind is no different. The Sunnis (Saddams group) are relatively moderate and have respect for people of different culture and religion. Hence we even have Christian Iraqis. The Sunnis are a relative minority group that is more advanced than the rest. The Shiites are the majority but they want ‘freedom’ to vote in a Cleric who will run the country in an Islamic autocratic style. This will lead to the destruction of the Sunnis and hence the reason that Saddam was supported by the Sunnis. Saddam kept the Shiites under control (kind of like using one evil to fight off another evil). A very good example of this – look at Iran. Literally any Christian (or other religion) Iranian cannot live in their home country as they will be persecuted for not being Muslim. I fully agree with you when you say that many of these people turn to Islamism as a way out of their suffering. But does Islamism give a solution or create many other problems? Please note I am not against Islamism and I do recognize successes in Islamism in places like Malaysia. However we are talking about a certain breed of Islamism that wants to turn these countries into types of Afghanistan and this type of Islamism seems to continue gaining popularity. When you hear the Clerics in Iraq talking about freedom they also talk about leading people into a system much like Iran and Afghanistan. Exactly where we don’t want to go. Now you say that planting democracy in Afghanistan is an undertaking like no other. Why? Yes they have warlord tribes and yes there is a history of conflict. They also have a rich history of peaceful co-existance. I can draw similarities between Afghanistan and Switzerland. Granted it maybe a long and difficult undertaking, but the fundamental is that there would be proper international support for changing Afghanistan. I see you have avoided Kuwait. I still find this to be an issue that everyone for some bizarre reason just waives past. George Bush the father made the statement before the first Iraq invasion, “We are going to return democracy to Kuwait.” What a laugh. It never had democracy, AND!! It still does not have democracy. How about we plant democracy in countries where we can show influence? Lastly your statement on OPEC – Iraq is steadily reaching its capacity. You raised the issue about how OPEC sets the price by controlling production. Come come Econochick – think this one through. This is the reason we are here – economics, supply and demand. Increase supply and price drops. Just think if the US can get Iraq oil supply back to 25% of all oil production. That should be one serious drop in oil price. And don’t forget, Libya is coming back into the oil market too.

Subject: Ha ha!! I know, I love it!! From: Econochick To: Mik Date Posted: Wed, Apr 14, 2004 at 15:52:40 (EDT) Email Address: Not Provided Message: I KNOW!! I'm fascinated by those hyper things. But I think I finally got it this morning. I think the trick is that you can't do it while you're drinking coffee, listening to the news and sending a fax at the same time. There is a limit to multi-tasking and I have found it!!! I agree, Mik. I learn many things on this board (like hypertext - sorry I had to slip that in). The cross-pollenation of ideas is very important in general. So... I think I have the simple answer for what the majority of people want in the world - not just the Iraqis. Here it is: we all like to oppress others, we just don't like to be oppressed. This is not an original concept, I got it from Naguib Mahfouz's 'Children of Gabelawi' (Nobel Prize winner, Egyptian writer - highly recommended). The poor want to stick it to the rich by taxing away all their wealth because the rich had the temerity to get rich in the first place. The rich want to deny the poor any redistribution of their wealth because the poor have the audacity to sit on their bums collecting money that does not rightfully belong to them. Militant Muslims want to take over the world, kill the 'infidel', and take us back to 635 AD because they have a direct line to God and that's what he's telling them to do. Militant Christians want to convert everyone to Christianity because that's what they're getting on their direct line to God. The Militant Jews want to kill all the Palestinian Arabs because those 'bastard' have no right to live for 2,000, years on property that was taken from them by the Romans. You get the picture. Everyone else has always stuck it to us somewhere in history and so it is now our God-given right to stick it to them. And we would all like the 'freedom' to do it. The thing that stops collossal wars in this country is that no group can float to the top (at least not for long) because every guy gets a vote. I am from Russia - back when it was the USSR - and therefore know all about oppression of the masses. From your post I would guess you're from India. Am I correct? But I disagree with you about the Sunnis. Let's just say that my experience with Sunnis is on an intimate level (so as not to reveal to much) and I have never been under the impression that they are more educated or more worldly than other Muslims. It may be easy to believe that because the oil countries (barring Iraq and Iran) are Sunni. But I'd like to hear a compelling argument about how enlightened the Saudis are. I don't see it, Mik. Saddam was Sunni. The Arabs are a clan culture, thus the ruling clan rules at the expense of the ruled clan. Over-simplified but to the point. You misunderstand what I mean by 'Islamism'. Like any 'ism' it is a problem of one package deal solving all the world's problems. This is not possible. It is the promise of UTOPIA on earth. What I hear Mulsims say is: 'Oh, if we were perfect, like the Muslims of the 7th century, then all our worries would be over'. That's a direct quote and, with further questioning, I found that they ment it LITERALLY. You can imagine the practical problems with trying to a.) go back to living like in the 7th century and b.) forcing others to. Also, theocracies - especially Muslim theocracies - restrict the rights of even Muslims to practice their religion the way they see fit. It is always oppressive and I don't see oppression as a success anywhere - even in Malaysia. People in Arab countries do not have freedom of speech, of press, and sometimes of religion. The people are largely illiterate. From the UN Human Development report: 1.) 10,000 books were translated into Spanish last year alone. The same number that was translated in the last 50 YEARS into arabic 2.)The size (in terms of number of books) of the Saudi National Library is equal to the size of a single BRANCH library in a town in Ohio. 3.)The COMBINED GDP of all the Arab countries is equivelant to the GDP of one country: Spain - the nineth largest economy on earth. There's more. Seriously, Mik, you ought to read that report- just go to my hyperlink there in the other post (LOL!!). Seriously, the governments are autocratic and deeply entertwined with religious leaders because they can bribe the Mullahs to control the masses. The entire media is chock full of conspiracy theoris because they know the government lies to them and it creates and environment where people can believe everything or nothing at all. Here's a ditty from Egypt: I was told we send them corn grown in special radioactive soil so as to cause cancer and kill them off because they are the keepers of Islam and we in America hate Islam. The person who told me this was an M.D. also a Ph.D. and had worked for the UN all over the world for more than 20 years. When I asked him who the heck would sign up to grow this corn he didn't answer the question (why bother with logic?) and just said 'it's true'. So, from this mess people look to God and God's representatives - the politically neutral (yeah, right) Mullahs - to hand them the answers. And the answer is always: you are not pious enough and any modernization of your culture would mean you are accepting the pop culture of America as your God and are apostate (which is now suddenly punishable by death - it wasn't historically). In short, it's a mess. My personal belief is that religion is not a political system, it is a strengthener for the soul to make you a strong and beautiful person. It has never worked as a political system. This all sort of naturally leads into what's best for Iraq. And if I knew I'd be the hero of the world - 'coz I sure wouldn't keep it to myself. Because Iraq's government has long been secular, I don't think that it's ridiculous to believe that they can build a secular democracy. But, um, they're gonna fight for a while. I'm prepared for that, I just wish Bush had realized it was going to take some more soldiers. Afghanistan: They are nothing like Switzerland, Mik. One warlord whacks another warlord and there's peace for a while. If that's what you mean by 'peaceful' then I guess they're peaceful. I'm not trying to avoid the subject but I'm asking if we could leave Afghanistan for another post because that's a whole long conversation on its own. Okay? I'm not avoiding Kuwait either. It's just the length of the post... Also, I wanted to get my facts straight. Here's what I think I know: Kuwait is a small city-state type of country, decended from basically the same clan with an elected parliament. So, they are moving to a democracy anyway. I used to know all this stuff because I did a massive amount of research on Saudi Arabia 11 years ago (I was an petroleum analyst too) and I knew all about the Kuwait clan (forgot the name) and the Al-Saud clan and how Abdul-Azziz Al-Saud created all these alliances with individual clans and Bedouin to kick the English and Ottomans out of Arabia and then took Riyad back from the Al-Rasheed clan (who had kicked the Al-Saud clan out years before). I just remember half that stuff now! Speaking of democracies, though, ever hear from Bahrain? No? Know why? The king there decided to introduce freedom of speach and such and they are moving quickly to a secular democracy. So, instead of blowing things up to get the point across, they demonstrate. Funny how that works, eh? And the king decided to do it all by himself - we're not always necessary. Yeah, yeah, Mik, I see where you're going with the OPEC thing. I was answering the 'we just want a friendly country to sell us cheap oil' remark. I've been out of the petroleum game for a few years, so I'm not terribly current. However, the oil price is very tied to Saudi Arabia's national budget which is based almost entirely on oil sales. As the largest producer of the most expensive oil (light, sweet) in the world, they have significant influence on the oil price. However, the last time I checked, their budget required oil to be in the $19-$22/barrel range. The petroleum guys I've talked to say that it'll will be a while before Iraq can reach maximum capacity again and they think maximum capacity will be much lower due to reservoir damage - but it's too soon to say. I don't know, I guess we'll see. However, you said that Saudi Arabia may not let them back in to OPEC. Why not? They can't stop them selling oil whether they're in or out of OPEC. And besides, why would they want a bunch of impoverished, angry Shiites threatening their Sunni border with revolution. Revolutions are catching. I think on or a combination of two things will happen - 1.)oil demand will be driven by exploding economies in Asia (lead but the most populace country on earth), thus supporting the price in the face of additional production and 2.)to prop up the price of oil with new production coming on but lackluster demand, other OPEC members (SA, namely) will scale back production to account for Libya and Iraq. In fact, the higher oil prices OPEC is now setting may be in expectation of future production increases from Russia, Iraq and Libya. Best I can do, I'm a little out of the loop with Petroleum these days. I have to end this post now because it's almost the length of a dissertation (LOL) and any more time away from work and I'm going to have to fire myself!! Always good 'talking' to you, Mik.

Subject: Survival of the Fittest From: Mik To: Econochick Date Posted: Thurs, Apr 15, 2004 at 12:20:16 (EDT) Email Address: Not Provided Message: Econochick, Now that was a long read.... I suppose it was necessary to give clarity. Firstly, I'm from South Africa and I live in Canada. So I do have the luxury to sit back, kick up my feet and simply shake my head at what the US is doing. I think this what it must be like living next door to the Simpsons. Seriously though, what America does affects the world. So I am interested as to what is going on there. I work for a consulting company and we do economic and financial studies on infrastructure in developing countries. So my knowledge on global economics isn't that strong, I focus far more on bridges and toll roads as such. To a large degree I agree with you, especially on your statement about being oppressed and being the oppressor. Here is some irony: The Afrikaaners of South Africa come from a long line of opressed people, one of their symbols of freedom is even the Statue of Liberty. They even have a province called the Orange Free State further raising the point about being 'FREE'.. once they got their freedom, what did they do? Oppressed the majority Black population. Now that the Majority Black population has gotten their freedom, what are they doing? Trying to oppress the White Minority of South Africa. Again I just shake my head. So the statement is: It is very easy for the oppressed to become the opressor. On the other issues, uhmm I have to cut this short, but just to let you know, if you turn back Switzerland's clock 700 years to when they were made up of tribal factions, I believe I can make a strong comparison to Afghanistan. The Swiss tribes eventually banded together out of a common enemy - the neighbouring countries. But Switzerland created a confederate type democratic system to ensure that one group/tribe would not dominate the rest. I believe this is a model of democracy that Afghanistan could quite easily implement. Oh and I did not say that Iraq will not be allowed to join OPEC, just that it will be interesting if they elect not to join OPEC. I'll come back to you in the rest.

Subject: I was WRONG about you!! From: Econochick To: Mik Date Posted: Thurs, Apr 15, 2004 at 14:26:03 (EDT) Email Address: Not Provided Message: I was SURE you were from India (democracy, minority groups, racially squabling). My husband lived in India for years (Dad worked for UN) and he was sure too. Boy, I was off the mark, LOL!! South Africa is the perfect example of the 'God given right to retaliate'. AAAAHHHH.....the world would be so much better off without people, eh? Canada's great. I have family in Canada and we ski there a lot - cheaper and more snow. We love Canada. Oh!! Switzerland 700 years ago - OK, I'm with ya, that's a lot more like Afghanistan now! LOL!I wish I could agree or disagree about Afghanistan but I just don't know enough about it. There are some obstacles like geographic isolation creating a lot of subcultures. To have a democracy you have to have a way to spread media and ideas from the age of enlightment (upon which modern democracy is predicated). I'm trying to picture a weathered warlord reclining on a rock reading Decartes. Also, they're kinda poorly with the phone there - let alone TV and radio. The land mass is much larger than Switzerland and the climate is harsh. But I don't know, maybe in 40 years they can over come that and create a stable democracy? It could happen!

Subject: So what's your story From: Mik To: Econochick Date Posted: Thurs, Apr 15, 2004 at 17:18:03 (EDT) Email Address: Not Provided Message: So what's your story? You have your own business? In what? Weird how I was brought up to hate Russia.... er and Australia. But we only hated Australia because they beat us at Rugby all the time. Now here I sit discussing politics of Afghanistan with a Russian? Hey weren't you guys beaten by those primitive people ;-) Anyway - take care Econochick. It sure is nice speaking with you.

Subject: Re: So what's your story From: Econochick To: Mik Date Posted: Thurs, Apr 15, 2004 at 19:07:53 (EDT) Email Address: Not Provided Message: immigrated as a child from the USSR. Did the rest of my growning up in America. Career on Wall Street. Quit and started my own asset management thing. There was plenty to hate about the USSR. We hated it so much we moved!! Life there was scary and depressing. Afghanis sure did kick their ass! We never associated ourselves with the communists and so it was always 'them'. My family was tortured during Stalin's time - along with a lot of other people. Just an ugly place. Nice talking to you too, Mik.

Subject: Interesting Comments From: Terri To: Econochick Date Posted: Thurs, Apr 15, 2004 at 16:24:51 (EDT) Email Address: Not Provided Message: Thanks!

Subject: Re: Econochick - the Hyper, Hyper text lover From: WRS To: Mik Date Posted: Wed, Apr 14, 2004 at 14:48:19 (EDT) Email Address: Not Provided Message: Good points all, Mik. What concerns me about Iraq is the apparent inability of the local forces to control the mobs and lift a finger to impose law and order. Iraqi police are unscreened, poorly trained, badly equipped and under fire by anti-American thugs and criminals. You have the world's worst police force fighting the most dangerous elements, not a good combination. What is the solution? I'm out of ideas, but I don't think 'bringing democracy' is the answer. As you pointed out below, liberated Kuwait is not exactly a beacon of freedom. I'm sure Iraq will not be one either. Shutting down newspapers is not a way to encourage democracy, although the anti-American slant of Arab (and world) media is undermining stabilization. I think we should be grateful if Iraq turns out any better than a terrorist-breeding hell hole. Must we cast our lot with the Shiites, just for the sake of order? The defection and collapse of the local forces is a turning point that was not adequately discussed by either the president or the media, who remain focused on the rear view mirror along with the 9/11 commission. The battle for hearts and minds is looking grim. It looks like US forces will remain occupiers indefinitely in counterinsurgency mode, taking casualties every day like the Israelis in Lebanon. I think it would be helpful if Kerry would explain more what he has in mind with the UN. The blue helmets will not rush in to save Iraq, just because Kerry speaks French. Bush also should clarify his position with regard to UN and NATO support. Right now, Iraq looks too dangerous for the likes of Kofi Annan, or any other organization, so we should not hold our breath waiting for help. The burden to salvage the mess is with America (and Britain, to a degree) alone. We don't have enough troops, and we are running out of time and money. What next?

Subject: There is no Reason to Stay From: Terri To: WRS Date Posted: Wed, Apr 14, 2004 at 14:59:45 (EDT) Email Address: Not Provided Message: We should organize elections at once in Iraq and leave. Iraq never was and is not now a threat to us. But we removed the government, so leave Iraq now.

Subject: Re: There is no Reason to Stay From: Econochick To: Terri Date Posted: Wed, Apr 14, 2004 at 16:05:48 (EDT) Email Address: Not Provided Message: They don't want us to leave because they know civil war will follow. That is, the people who don't want civil war want us to stay - for now. They just don't want us to 'rule' them. Elections aren't enough. We have to make sure that they have a system of checks and balances and popular support for a system of government to be strong and to avoid one person usurping power.

Subject: Re: There is no Reason to Stay From: Nat To: Econochick Date Posted: Fri, Apr 16, 2004 at 12:40:58 (EDT) Email Address: Not Provided Message: A few points in this discussion are missing. First, the US has no intention of ever leaving even when we hand over Iraq to Iragis. We have built the world's largest embassy and 14 permanent military installations there. The plan is to move all our Saudi bases to Iraq since this supposedly will eliminate the religious conflicts over our presence in their holy land. So the plan is fewer US personnel but not 0. It is obvious to Iraq, the world and many Americans that we are doing this for our national interest as construed by the Bush administration. Whether this is for oil, other corporate interests, covering Israel's backside, or a dozen other reasons, altruism isn't one of them. This administration doesn't have any sympathy for your average American so it isn't there for the Iraquis. They have watched CNN too long to be fooled. For some reason many Americans think this is some sort of holy mission. That is wrong on about 50 levels. We have no moral obligation to redress a British screw up of 80 years ago. We were and remain unprepared to: fight an urban guerrila war, rebuild the country, build a political and religious consensus, protect very dangerous local assets (armories and nuclear facilites are still being looted, scary) and build any kind of international consensus that might help us out. We broke it, but we are not remotely capable of fixing it. IMO, if what happened to Viet Nam over the long haul happens to Iraq it would be a very positive outcome given the circumstances. It could be so much worse... Here's a little mind game to play: could a super power of a different religion (e.g. Islam) conquer and transform Texas with the number of troops we now have in Iraq? I think the size, population, religious conservatism and oil are about right. I think we have more guns here than Iraq does, however. So, what do you think?

Subject: Re: There is no Reason to Stay From: Mik To: Terri Date Posted: Wed, Apr 14, 2004 at 15:48:57 (EDT) Email Address: Not Provided Message: Terri, On the one hand you are right in that Iraq was never a threat to us - but I hate to say that if history is a lesson and you look at most of the decolonised countries (as an example) the colonisers left from one day to another leaving a power vacuum resulting in ongoing catastrophe. So I would like to say that what the current US administration is doing 'in staying the course' is good and a little more responsible than what other countries have done. (And I'm not implying that the US is a coloniser) Having said that - man oh man is it a mess. WRS hit the nail on the head. I can identify the serious problems but I cannot even begin to suggest solutions. In actual fact, I'd hate to have Kerry's job as I think he is about to inherit a huge problem. I think if Kerry comes to power he should appoint Bush, Chenney, Wolfewitz, Rice and ... (oh gee I just forgot the other prats name) to administer Iraqi affairs from within Iraq. In that way make them sort out their crap and live in it. I honestly believe that the hawks did not have a serious reality as to what goes on when you invade a developing country with serious diversity and then try nation building. Look at US history on this. Invasions of Germany and Japan have been successes - but look at their demographics. Then look at US invasions in developing countries in South America, Haiti, Vietnam and Africa. Ironic that last night Bush spoke proudly of how he held discussions with the Japanese leader on stabilising the Asian region and N Korea. Then Bush spoke of how he looks forward to the day when a future US President will sit with the leader of Iraq in stabilising the middle east. Hello.... why can't Bush sit down with the leader of Kuwait or Saudi Arabia and do the same thing? Because Bush's own daddy was not interested in introducing democracy to the region and made no attempt to push for democracy in the region. As a huge twist of irony: Don't you find it shocking that G Bush the father was sitting in a business meeting with Osama's father when the aircrafts hit the towers?

Subject: Declare Victory and Leave From: Terri To: Mik Date Posted: Wed, Apr 14, 2004 at 17:41:08 (EDT) Email Address: Not Provided Message: I am sympathetic to your arguments, but we should not be nation building. I say declare victory and leave. Why should we spend more lives and tens of billions on Iraq?

Subject: Re: Declare Victory and Leave From: Paul G. Brown To: Terri Date Posted: Wed, Apr 14, 2004 at 23:17:20 (EDT) Email Address: Not Provided Message: I can't believe that what I'm about to say might come across as a defense of 'the chimp' and his cronies, but . . . Look - during the cold war 'the west' interfered in a lot of nations (including my native Australia - see 'Falcon and Snowman') and either installed or propped up thugs or satraps in dozens of places. Iran and Iraq (and Afghanistan) were some of them. At an earlier time, western (mostly European) colonialism led to the disintegration of stable social and economic structures, replacing them with fictitious 'nation states'. It our moral obligation to undo this. It is our moral obligation to get involved in areas like central Africa or the former Yugoslavia when national boundaries that echo colonial divisions don't mesh with tribal and cultural boundaries and one group starts killing the other. I reject with every bone in my body the idea that the horrors inflicted on women in Afghanistan were somehow legitamized by that nation's 'religious and tribal custom'. It turns out also to be in our security interests to do this because sociopaths thrive in circumstances of social turmoil. If we leave now, the region now known as Iraq will collapse into chaos and violence as the various thug-ocracies struggle for power. If we stay, we suffer, but not so deeply, because the US does posess awesome, overwhelming military power. We must stay because the alternative is worse. Sadly, we have a bunch of nincompoops and moral cowards in charge. They are apparently incapable of learning the simple lesson that there are limits on military power and too stunted as human beings to admit error and change course. You look back on the great leaders that the US has had; Washington, Lincoln, both Roosevelts, who rose to greatness by frankly acknowledging their limitations as human beings and dealing with setbacks by coming back at the problems they faced with alternative approaches. By contrast we have are led by a man so divorced from reality that he hasn't even stopped to think about what he might have done differently - or what lessons he has learnt.

Subject: You are Right From: Terri To: Paul G. Brown Date Posted: Thurs, Apr 15, 2004 at 14:33:07 (EDT) Email Address: Not Provided Message: Of course, we must now try to insure peaces and stability for Iraq. We have reaped a whirl wind.

Subject: Political Reality From: Econochick To: Paul G. Brown Date Posted: Thurs, Apr 15, 2004 at 02:43:55 (EDT) Email Address: Not Provided Message: Paul, you are a fantastic writer. Agree or disagree with the content, your writing skills are outstanding. You are absolutely corrected - in large part - about the effects of colonialism. In particular, the Middle East and Africa. Iraq, after all, is colonial fiction. So are Syria and Lebanon - they are actually a one country. Belgian colonialism stoked the racial hatred that fed the Rwandan massacres in the mid-'90's. And so on. But we must also remember that despite the innate brutalities of colonialism, some countries are better for it in the end - India, for example. And Western empires were far from being the only colonial empires. There were the Romans, the Arabs, the Ottomans, the Tartars, the Mongols etc. In the past, brutal invasions and colonial rule ravaged nations but also introduced waves of new ideas, spread technology and science. This is not an 'ends justifies the means' argument but a reminder of another historical fact. Nor was every country that was invaded a stable socio-economic system. The area that was Yugoslavia has been at war to a greater or lesser degree for centuries. The Kosovo conflict between Albanians and Serbs alone has been rolling since 1389 when Muslims took the ancient Serbian city!! But to your point, countries like, for example, Egypt, Arabia and Palestine - not to mention a slew of African countries - were not only brutally treated by western colonial empires but were much worse off for it. I agree with you completely about our obligation in Iraq. As for the president admitting his mistakes....that's kind of difficult in America. And the voting public has changed since the Roosevelts. I agree with you whole-heartedly with regard to your assessment of our leadership. But I don't think that our leaders - democrat or republican - believe they can admit mistakes and weakness because it will be taken as a sign of weakness. Bush is well documented. Let's look at Kerry. He voted for war twice - which turned out to be not the politically popular decision. The correct answer is that he probably thought it was a good idea at the time but he is clearly being advised not to use the word 'mistake'. Instead he says he didn't understand that he was actually voting for war. That just makes him look stupid. Clinton lied UNDER OATH. He's a lawyer! My point is not that democrats lie more than republicans but that there is a belief by politicians in general that admissions of weaknesses and mistakes put them at a disadvantage with voters. I'm afraid that moral cowardice and nincompoopery is here to stay on both sides of the political divide.

Subject: Re: Political Reality From: Mik To: Econochick Date Posted: Thurs, Apr 15, 2004 at 11:56:44 (EDT) Email Address: Not Provided Message: Econochick, Paul, I'd just like to add my words in saying I agree with both of you on this one. Just as a thought to ponder - after 1919, Africa now had new borders and in many cases new colonial leaders. Tanzania and Namibia were taken from Germany and handed to the UK and South Africa respectively (ironically South Africa was a UK colony). Rwanda was handed by the UK to Belgium and there were other boarders re-drawn. The point is that if you look at Africa today, is it not a telling that English Speaking Africa is far richer and more well off than French and Portuguese Speaking? This is a sign that the UK was a better coloniser than the French, Belgium and Portugal (although there is no such thing as a good coloniser in my view). The point is that there is a serious difference in empowering the nation in a way that allows them the tools to succeed better into the future. And in my case example the UK did a better job at this than France, Belgium or Portugal. This is, in my mind, the reason as to why the US should not do what France, Belgium and Portugal did, but rather aim to do a better job than what the UK did and empower Iraq to become a successful nation. In one way I am still miffed that they went in and opened this 80-Billion-Dollar-a-year can of worms. But in another way I am glad to see the commitment to stay the course and try finish this right.

Subject: Yep, in general From: Econochick To: Mik Date Posted: Thurs, Apr 15, 2004 at 14:11:48 (EDT) Email Address: Not Provided Message: Mik, I generally agree with you. The only thing that tickled me about the given situation in Iraq is that Iraq was a pseudo-colony of the UK and they messed it up royally. But, in general I agree that the UK was a better colonizer.

Subject: Re: Declare Victory and Leave From: raj To: Terri Date Posted: Wed, Apr 14, 2004 at 21:20:12 (EDT) Email Address: Not Provided Message: The only reason that anyone wants to stay in now is that if we suddenly pack up and leave there would be no question that this war left us in a more dangerous state than we were in to begin with. We would have handed the foreign jihadists in Iraq their own little country.

Subject: Trade Gap May Be Shrinking... From: Econochick To: All Date Posted: Wed, Apr 14, 2004 at 10:56:35 (EDT) Email Address: Not Provided Message: This article

Subject: Re: Trade Gap May Be Shrinking... From: Paul G. Brown To: Econochick Date Posted: Wed, Apr 14, 2004 at 12:37:13 (EDT) Email Address: Not Provided Message: Well, given the weakening of the US dollar, the trade gap had better be shrinking. I was going to add that inflation is kind of low, but have a look at this seasonally adjusted CPI chart and even more interestingly, this chart of CPI less energy (energy is particularly sensitive to exchange rates). There are discouraging little hockey-stick upticks on those series, folk. Look for a rate rise real soon. . .

Subject: Exactly! From: Econochick To: Paul G. Brown Date Posted: Wed, Apr 14, 2004 at 13:11:56 (EDT) Email Address: Not Provided Message: FINALLY we get some shrinking in the trade deficit...took long enough. Or maybe it just seems like too long. I did indeed see the CPI. Thanks for the links to the scary pictures. The Economist ran a small article called The Seven Deadly Sins which talks about the impact of increasing inflation on the housing market. Real interest rates are actually very high. Higher inflation will push nominal interest rates higher (what you said, Paul) - not good news for adjustable rate mortgages.

Subject: ??? Okay, one more time From: Econochick To: Econochick Date Posted: Wed, Apr 14, 2004 at 10:58:57 (EDT) Email Address: Not Provided Message: This article --- This article

Subject: Re: ??? Okay, one more time From: Econochick To: Econochick Date Posted: Wed, Apr 14, 2004 at 11:02:11 (EDT) Email Address: Not Provided Message: Yeah, I'm really good at this aren't I? Thought I'd share this article from Yahoo news - caught my eye at breakfast. One more try.

Subject: Try again! It will be the good one! From: Yann To: Econochick Date Posted: Wed, Apr 14, 2004 at 11:09:27 (EDT) Email Address: Not Provided Message:

Subject: Re: Try again! It will be the good one! From: Econochick To: Yann Date Posted: Wed, Apr 14, 2004 at 11:58:28 (EDT) Email Address: Not Provided Message: Can't find the original but this one has something about the jump in CPI plus the trade thing. Here goes nothing... CPI Up, Trade Gap Down due to lower dollar<'/A>

Subject: Whew! - it posted - n/m From: Econochick To: Econochick Date Posted: Wed, Apr 14, 2004 at 11:59:20 (EDT) Email Address: Not Provided Message:

Subject: Wind based economy From: Pete Weis To: All Date Posted: Wed, Apr 14, 2004 at 00:18:45 (EDT) Email Address: Not Provided Message: A special edition of US News and World Report states: 'once a costly proposition on the flaky fringe of the energy debate, wind is going mainstream fast'. 'The business of simply capturing wind power and poring it into regional electric grids is thriving.' All the while the world is fretting over oil, a quiet revolution in new energy sources (especially wind) is rapidly evolving. 'The cost of generating wind power has dropped from anbout 38 cents per kilowatt-hour in the 1980's to about 4 cents today.' '1990's federal research concluded that 12 central states had wind potential to produce four times the amount of electricity consumed nationwide. North Dakota alone can meet 36% of US energy needs.' New technologies, already going online, utilizing very large vanadium redux battery systems are able to store energy not only to prevent 'brown-outs' during demand spikes, but supply electric power to remote residential locations and store energy produced by wind power. Liquid hydrogen is yet another storage medium sure to be used in this process. Just as land became valuable to locate antennas for cellular phone comunications, land is being sought and will be in great demand for the new generation of wind power generators. The world continues to change at a very fast pace.

Subject: Re: Wind based economy From: Econochick To: Pete Weis Date Posted: Wed, Apr 14, 2004 at 09:15:24 (EDT) Email Address: Not Provided Message: Thanks for the Post, Pete. Very interesting information. Plus, it would be a boon for comedians - just think of all the great jokes a 'wind based economy' could spawn!

Subject: Re: Wind based economy From: Pete Weis To: Econochick Date Posted: Wed, Apr 14, 2004 at 21:30:55 (EDT) Email Address: Not Provided Message: Suppose there is some potential material for Leno, Letterman or Conan O'brien. Whenever that happens, guess we would know the time for wind had arrived. It shouldn't be long with oil and natural gas heading ever higher.

Subject: Too True From: Econochick To: Pete Weis Date Posted: Thurs, Apr 15, 2004 at 02:53:55 (EDT) Email Address: Not Provided Message: I suppose you saw the CPI numbers today, Pete. You've been saying it for a long time on this board - inflation is movin' on up for key products. On the energy front, I hope we move fast enough. But I can imagine the jokes about the hot air from the white house, etc.! The oil industry lent itself to some particularly raunchy jokes with terminology like 'dry holes' (unsuccessful wells), 'tight holes' (wells about which the companies were secretive), 'laying pipe' (to transport natural gas). There were a ton more I don't even remember now. One of my colleagues was going on a date with a new girlfriend and asked (jokingly) if we had any advice. 'Sure,' we said 'you'll be alright - long as you don't go drilling for gas'.

Subject: Asian Seaports From: Emma To: All Date Posted: Tues, Apr 13, 2004 at 16:13:56 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/04/13/business/worldbusiness/13pusan.html In Asia, Seaports Battle to Be King of Containers By JAMES BROOKE PUSAN, South Korea - On paper, Shanghai and Pusan are sister cities, the largest seaports of China and South Korea, separated by 500 miles of the Yellow Sea. But last year, Shanghai dethroned its Korean rival and assumed the title of the busiest container port in Northeast Asia. Last week, the Koreans counterattacked, unveiling a seven-year, $53 billion public and private investment program to double Pusan's docking wharves to six miles and to quadruple warehouse space to six square miles. But in Shanghai, bulldozers and dredges are already building a deepwater port at Yangshan Island. It will match the expansion planned at 'Busan New Port.' (The name of the port is spelled traditionally as Pusan, but sometimes as Busan.) Although Pusan's vast expanse of cranes, containers and oceangoing ships paints a picture of boundless commerce, some shipping analysts see overcapacity on the horizon of this stretch of the Korea Strait. In the 1990's, Pusan grew riding on the export booms of China and South Korea. Last year, about 40 percent of the 10.4 million containers that moved through here were transshipments, largely coming from China. While every economic player in Asia today tries to hitch a ride on China's rise, it is unclear if Pusan can keep surfing the waves of containers surging from China, factory to the world. 'The country with the really big volume is China,' Neil Davidson, ports director for Drewry Shipping Consultants, a British maritime consultant firm, said from London. 'That is the export engine of the region with heavy volumes. And those volumes will move through Chinese ports.' ...

Subject: Eastern Europe From: Emma To: Emma Date Posted: Tues, Apr 13, 2004 at 16:43:08 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/04/13/business/worldbusiness/13cars.html Slovakia No Longer a Laggard in Automaking By MARK LANDLER TRNAVA, Slovakia, April 8 - Victory in the relentless race to harness the global economy does not go to the slow or soft-hearted - as the farmers living on the outskirts of this ancient walled town can attest. For 123 people, a ramshackle settlement of farm houses next to a dust-choked construction site has been the only place they have ever lived. Next year, they will be forced to pack up and leave, so that their homes can be bulldozed to make way for a new $840 million automobile plant. The local government insists that it is a fair trade: the farmers will get new houses, and the town will get a factory that employs 3,500 workers. The farmers, not surprisingly, are distraught. 'It's hard to explain the benefits of a project like this to older people,' said Zuzana Karhutova, a spokeswoman for Trnava's investment agency, which is helping the French carmaker Peugeot Citroën build the plant. Slovakia, which will join the European Union next month along with nine other countries, has gone from being a laggard to perhaps the hungriest and most ambitious member of its entering class. Scrappy, hard-working, and unremitting in its drive to attract foreign investment, Slovakia has lured two giant carmakers in the last two years - Peugeot Citroën and the Kia Motors unit of Hyundai Motor. Slovakia beat Poland, the Czech Republic and Hungary to win the projects, even though those countries all have larger populations, more developed economies and more expertise in manufacturing cars. The new plants are expected to be up and running by 2006. When their output is added to the production of the existing Volkswagen plant in Bratislava, the capital city, Slovakia, with its 5.4 million people, will be producing 850,000 cars a year - the most of any Central European nation and the most per person of any country in the world. 'We are becoming the Detroit of Europe,' said Jan Korecky, the publisher of Auto Motor & Sport, an automotive trade magazine based in Bratislava that suddenly has a lot to write about. Some of Slovakia's success can be attributed to economic advantages over which it has little control, and which may prove to be ephemeral. Wages are substantially lower here than in Poland, the Czech Republic or Hungary, though the competition for workers at the new assembly plants is bound to drive them up, as will Slovakia's membership in the European Union....

Subject: The Cost From: Ari To: All Date Posted: Tues, Apr 13, 2004 at 14:46:56 (EDT) Email Address: Not Provided Message: Fatalities American soldiers 542 British soldiers 26 Coalition soldiers 44 --- 612 Since May 2 American 681 British 59 Coalition 44 --- 784 Since March 20 Wounded American soldiers ~3466 Since March 20 Note: American forces have fallen to 130,000 British forces have risen to 12,000 Coalition forces have risen to 12,000

Subject: Re: The Cost From: Mik To: Ari Date Posted: Tues, Apr 13, 2004 at 17:18:25 (EDT) Email Address: Not Provided Message: And the part that burns me the most is that the majority of those soldiers are kids in their twenties. What have they died for? Can someone tell me?

Subject: Tuesday's column on the mark From: WRS To: All Date Posted: Tues, Apr 13, 2004 at 12:18:56 (EDT) Email Address: Not Provided Message: I hate to admit it, but PK deserves credit for shedding light on the Iraq War in his Tuesday column. Perhaps he recognizes the seriousness of the situation, because he has toned down his rhetoric to offer a somewhat constructive voice of reason that advances the discussion. Given the determined opposition our forces face on the ground, we need to get real and reassess the plan for 'democracy' in that snake-pit of a land. Since the UN is not about to bail us out, some sort of end-game with the Shiite Mullahs is probably the best we're going to get. The Sunni triangle will likely remain a terrorist breeding ground, sad to say. But perhaps a small number of forces can keep them running and hiding. Will the Turks help us out? I have trouble sleeping because I supported regime change in 2003 feel like a fool who has been duped by conniving neo-cons. I still think it's valid to argue that the prior policy of sanctions/starvation was terrible and had to change. Tony Blair should be commended for keeping a stiff upper lip and articulating an increasingly indefensible policy. We'll have to wait and see how events unfold, but it seems to me the coalition is losing pieces in this strategic chess game at a rapid rate. Suddenly, we have lost control of the center of the board, and if we don't look out will face check mate. I'll settle for a draw. This time, Krugman is entitled to say 'I told you so.' I hope he keeps a clear head and continues to stay above the partisan fray. Many lives are on the line.

Subject: Re: Tuesday's column on the mark From: Paul G. Brown To: WRS Date Posted: Tues, Apr 13, 2004 at 14:10:49 (EDT) Email Address: Not Provided Message: Well, I'm going to agree with PK but disagree with you, WRS. ;-) It's wierd. I don't feel duped by the neo-cons because I was and remain supportive of a muscular foreign policy on moral grounds. I mean, they've lied, shamelessly, and their track record of smearing dissidents is long and storied (Krauthammer smearingHans Blix ('When it was suggested to an administration official that Blix was Inspector Clouseau, he protested that this was unfair: 'Clouseau was trying to find stuff.'', Novak on Joe Wilson's wife ('Two senior administration officials told me Wilson's wife suggested sending him to Niger to investigate the Italian report.') NRO on General Eric Shinseki who 'appears to be working against Bush's plan to fight the war on terror', and who 'is protected by a Democratic senator who may be grooming him to take over his own seat in the Senate in the next few years.', not to mention O'Neill, Clarke, but the greatest knock on them is their incompetence (with their arrogance coming a close second). All of that said, no matter how we got here, leaving Iraq to collapse into chaos would be yet another betrayal of the vast majority of Iraqi people. The first betrayal was the mid-80s support of Saddam, the second was the Bush 41 lack of support for the post-Gulf War arab uprising against the Baathists (a dissenting view here. We have under-invested in the post war Iraq, and we have been unable to pursuade the rest of the world to cough up any cash. It's becoming more and more clear that the provisional authority has made very bad choices of friends. But if Iraq descends into chaos the cause of western liberalism is badly damaged. The best of a number of bad choices may well be to break the country up into three smaller nations. This will piss off the Turks, and give Iran influence over new territory, but it's at least going to be relatively stable. It seems likely to me that sudden withdrawal would lead to a humanitarian disaster, with worse to follow.

Subject: Well said From: Econochick To: Paul G. Brown Date Posted: Tues, Apr 13, 2004 at 14:37:58 (EDT) Email Address: Not Provided Message: Just love the clarity of your post - also I happen personally agree with you. I'm going to try a hyperlink to an article by Michael Ignatieff for the NY Times, looking at the war a year on. cross your fingers. The Year of Living Dangerously<'/A>

Subject: AAH! It kinda worked! THX, PAUL From: Econochick To: Econochick Date Posted: Tues, Apr 13, 2004 at 14:39:40 (EDT) Email Address: Not Provided Message:

Subject: Re: Tuesday's column on the mark From: Mik To: WRS Date Posted: Tues, Apr 13, 2004 at 14:03:18 (EDT) Email Address: Not Provided Message: Okay…. If you may - let me give some criticism to Paul's article: He down plays the whole idea of how the Americans are seen in Iraq. He quotes Chenney as saying, 'I really do believe that we will be greeted as liberators.' and Paul puts ridicule to this statement. This is a very complex issue which Paul does not acknowledge. The Shiites at first greeted the US troops as liberators, we saw the images of them cheering as the Saddam statue came down. In the North, the Kurds did greet the troops as liberators and are still overly happy with the current situation. And Chenney and the rest of the Hawks will always point fingers towards the Kurds and those images in proving they were right. The main thrust of this article is about the recent uprisings. Paul makes the statement, “The obvious point that we're facing widespread religious and nationalist resentment in Iraq.” Well for starters using the word “widespread” is a bit of an exaggeration. But in general quite right, except that the US troops have been facing resentment in the central region since they arrived. Why the sudden serious upheaval? Paul then makes the statement, “The best we can realistically hope for now is to turn power over to relatively moderate Iraqis with a real base of popular support. Yes, that mainly means Islamic clerics.” Has it dawned on anyone here that the reason for the sudden upheaval is exactly because the US does not want to turn power over to any Islamic Cleric that won’t be a puppet. Some time back I remember CNN reporting that the US administration was talking with Moktada al-Sadr and looking to him as a possible leader. I personally believe that when Moktada al-Sadr decided not to play ball with the US, they pulled out and left him out of the process. That would explain the sudden upheaval and the chase to remove him, not a “wide spread resentment”. The US does not want to hand over power to any form of government they cannot trust, even if the government has the majority backing. A democratic Iraq is not the main focus of the current administration. A US friendly, oil-giving government is the main focus. (Part of the reason why I hope Kerry gets into Power ASAP and perhaps the reason why the June deadline was even selected well ahead of the elections.) So Paul’s statement may be right, in that “the best we can realistically hope for now is to turn power over to relatively moderate Iraqis with a real base of popular support. Yes, that mainly means Islamic clerics”. But the current upheaval is because the US administration wants to avoid this. Paul then makes the easy remark about how we need a change of course. Can he suggest a change? It is always easy to criticize. I was totally against the invasion mainly due to my knowledge of colonization and the mess of decolonisation. (Ironically the country that probably has the most experience with facing a mess in decolonisation is France, which makes me fully understand the wisdom in their position at the UN.) Although I agree with Paul, I think Paul has simplified his reasoning to show much weakness in his argument and he has relied on sources that he believes to be solid. (Has it ever dawned on any of us that the Jerusalem Post may be wrong?) Paul’s opening statement, “George Bush described Iraqi insurgents as a 'small faction.' Meanwhile, people actually on the scene described a rebellion with widespread support.” Well there are other options here rather than “Bush and his inner circle being divorced from reality.” Has it occurred to us that Bush may have made the statement either as a political statement (presidents have been known to lie) or that Bush actually has accurate information about the country as a whole and that the people on the ground are only speaking of their immediate experience (meaning Bush is right and the people on the scene are wrong). This whole situation is a mess, the US should not have done this in the first place, now that we are in the mess, the question is how to resolve it without creating a future breeding ground for powerful anti-American forces. I wish I knew the answer. But let’s not be fooled here, the current administration has not lost its focus, nor lost touch with reality, they went in to unlock oil reserves and they want to ensure that this gets done properly. They have lied to us in the past and there is not reason that they have stopped lying.

Subject: Re: Tuesday's column on the mark From: Gringo To: Mik Date Posted: Tues, Apr 13, 2004 at 18:12:27 (EDT) Email Address: nma@hotmail.com Message: 'The US does not want to hand over power to any form of government they cannot trust, even if the government has the majority backing. ' 'The US does want to hand over power to any form of government they can trust, even if the government hasn't got the majority backing.' So, what's the solution?

Subject: Re: Tuesday's column on the mark From: Econochick To: Mik Date Posted: Tues, Apr 13, 2004 at 15:02:43 (EDT) Email Address: Not Provided Message: First of all,Mik, I should say that I am no expert on the situation in Iraq - militarily of politically. However, I do have personal experience with Arab family members who actually grew up in that part of the world. I've been embroiled in Middle East Muslim politics for a long (and tiring) time. So, from that perspective, I completely disagree with handing power over to clerics. Clerics in the Middle East do not play the democracy game - they play the autocratic theocracy game. They usurp power because they claim a direct line to God. Sadr may be just such a usurper and that is why the US dropped him in the first place - don't know that for sure, it's an educated guess. He then decided to take the 'throne' by force. Oil price is going to be controlled by the producers, regardless of their love for us. Iraq was (is still?) a member of OPEC. No matter how lovey-dovey we are with a regime, it's not going to sell us below-market oil. Besides, oil demand is increasingly driven by Asia - not us. The minority Sunnis are in rebellion for a good reason - they have been in power since Britain put them them there in (help me out..) the '40's or '50's? They benefitted the most from Saddam's regime and are afraid that the Shiites will come after them now he's gone. The Iraqis hate America nowhere near as much as some of us think - we're a scape-goat for all of their frustration and worry. We are the direct reason for the bodies in the street today. But make no mistake, the overwhelming majority of Iraqis and Arabs do not want Saddam back and they do want a system more similar to ours. At this point, we have the obligation to give it to them. You point about colonization is well taken. However, I respectfully disagree. We are not colonizing Iraq. Iraq will not be the 51st state. We're trying hard to get a stable democracy going there in the hopes that it will spread and then get the heck out. And that is a good thing for the Iraqis and the whole Middle East. However, I just DO NOT understand how the administration could have possibly thought that we would be greeted as liberators - the Kurds notwithstanding. Indeed we were in the first war. But then we encouraged the Shiite to rebel and then didn't lift a finger as Saddam slaughtered them. Liberators? Seriously? And then we didn't have enough troops. We still don't have enough troops there to stop an all out civil war - which, make no mistake - is very possible. It's a mess....

Subject: Econochick we are not arguing From: Mik To: Econochick Date Posted: Tues, Apr 13, 2004 at 17:13:49 (EDT) Email Address: Not Provided Message: Econochick, I see we are not arguing. My point from beginning to end on this topic is Paul Krugman's stance. From your reply I now see that you actually disagree with Paul Krugman and his statement that 'the best way to solve this issue is to allow a cleric to take over.' Phew, I'm glad I'm not the only one here who has exception to Paul's recent article (all the more reason I believe he should stick to economics and not politics). To clarify issues between you and me: I also don't like the idea of handing power to Clerics. I agree with Paul that it would be the quickest (and cheapest) way to solve the upheavel (but I don't think it should be done). But this leads into the point of lessons from Colonisation (Yes the US in not colonising here). Can an invading force such as the US respect their own fundamental concept of democracy to the point that we allow true democracy in Iraq knowing that it will most likely result in a government that is unfriendly to the US and a government that will subsequently become autocratic? This is the predicament I was talking about regarding the colonisation idea. The majority of people in Iraq want a government that we know will be autocratic, manipulate the minorities and show little respect for other religions in Iraq (let alone womens rights, etc, etc). From the beginning this would be a mess and I truly believe that the French knew that this would be a mess and they wanted nothing to do with another international blunder (they just have such a long history of this crap). As for being greeted as Liberators - why wouldn't the Shiites greet the US as liberators? Well in fact the did greet the US as liberators at first. The Sunis now become a minority group and have everything to lose. So the Sunis are fighting BUT !! now that the Shiites are about to lose what they were hoping to get - a majority control of Iraq under a cleric's autocratic power - we have now have the recent uprising. So both Sunis and Shiites are really up in arms. As horrible as Saddam is, we should not have ventured this route. For decades to come the US will be seen as the evil in this mess. If the goal was to plant a seed of stable democracy we should have started with Kuwait. After liberating Kuwait, we should have turned to them and said, 'Alright now we need you guys to do something special for us, implement a democratic system.' And as a long term effort to implement democracy, we should have concentrated on implementing democracy in Afghanistan, after all that would be more internationally accepted. I question whether Iraq will return to OPEC. That is something I am watching very carefully. Also, now that OPEC (without Iraq) supplies the world's oil, with the addition of Iraq I wonder if the OPEC countries would really cut back there supply to keep the current price or if the addition of Iraq will upset the supply balance. Keep in mind that before the first Iraq invasion, Iraq alone supplied 25% of the world's oil. That is a lot of oil. Reintroducing Iraq to the market or to OPEC will undoubtly increase supply and decrease price.

Subject: No, we're not From: Econochick To: Mik Date Posted: Tues, Apr 13, 2004 at 19:11:57 (EDT) Email Address: Not Provided Message: We have no big philosophical differences. We're just batting ideas back and forth. I'll go point by from your post I actually think that handing over power to clerics will be more expensive longer term as they are sure to set up another blood curdling, people-stomping autocracy. They may even harbour terrorists, seeing them as 'God's Soldiers'. Plus there are deeper problems. Most of the insurgency is coming from village fundamentalists. Think of the American buck-toothed redneck, and you basically have the picture (ok, ok insert Bush joke here). Think of those guys walking around in rural Alabama talking about how women don't have the right to work, are the property of their men, and so forth. That makes up the bulk of the insurgency - and clerics like Sadr are their leaders. It's like Jim Baker trying to put himself in line for the presidency. The more educated, moderate city folk would like a free society. And that means free from police from the department of virtue and vice. Unfortunately, Bush's folks have not been able to tell the difference. I'll translate Bush's position in Iraq into Texan: 'Big hat, no cattle.' Now, Mik, I completely disagree that Iraqis want an autocratic government. It's a complex issue but just boiling it down goes something like this: Arabs live in impovorished countries, dominated by autocratic leaders and see their only salvation in religion which will free them from their suffering. Sounds like parts of the US, no? 'Islamism' is the new promise of utopia. But this a dismal part of the world. Take a look at the UN Arab Human Development Report for 2003. So, (and I realize this is painfully simplistic) it's really the redneck army of the village Mullahs that's 'rebelling'. Casualties are extremely unfortunate ALWAYS - but we have to remember that between 60 million and 80 million people died in WWII. More CIVILIANS died on D-day than during this whole war. The casualties don't come close to Vietnam. As far as wars go, this one has not been our worst - but Bush's team could be handling the whole thing WAY WAY better. We come to the point you make about the friendliness of the replacement Iraqi government. I think we have to define 'friendly' and 'hostile'. I think we have a tendency to define friendliness on interpersonal instead of politically realistic ones. For example: France has been decidedly unfriendly to the US for longer than most people know (I took to reading UN meeting transcripts right after I quit my job and before I started my business). But they are not about to bomb us either, so they're just a pain. And I think that not looking to acquire nukes and such in order to take over their neigbours and not threatening to threaten our shores is just friendly enough. I think that may just be the definition of 'friendly' we're going for in Iraq - and, seriously, I don't really think we have a right to more than that. BTW, France didn't see a coming quagmire (sp?). They were cutting illegal and lucrative deals through the 'food for oil' program. The UN is in the midst of investigating just how bad it was now. I can post some links later if you want. Plus Chirac thinks he's the new DeGaul and is just pissed off because French is no longer the international language. I love going to France and I love hanging out with the French but politically, if they tell us 'get over yourselves', I say 'Oh, please..after you!' Saddam did, indeed, say that his one mistake in invading Kuwait was that he did it before he got nukes. He also said that he would do it again once got them - and that's been confirmed in interviews with his scientists. He may not have had the weapons yet but he was sure making sure everyone thought he did. Remember, every international intelligence body thought he had the makings of WMDs - including Hans Blix. The international argument revolved about the appropriate action. Here I should tell you that I (and the Arabs in my family) were pro-war. We believed that financial ability and intention would one day meet and by then it will be too late to do anything about it. Which means that we believed the cost of war now was ultimately lower than the cost of war later. You may disagree with that analysis - it's a completely subjective decision. It is just fundamentally much more difficult to measure the impact of something that is now never going to happen. The Arabs in my family (they are not Iraqi) had the additional hope of freeing Iraqis from Saddam's reign - just FYI. Mik, planting democracy in Afganistan is an undertaking like no other. I don't think it can be done. You're talking about an age old warlord culture that lives just as it has for centuries. It's like going back in time. If Afganistan is not a breeding ground for terrorists, we'll have a awesome success. Afganistan is a whole separate discussion! Whew!! As for OPEC, Iraq cannot produce as much as it did because of damage to oil reservoirs and lack of investment since before the first Gulf War. It simply doesn't have the capacity. Also, OPEC sets the oil price by controlling production - but every non-OPEC producer sells at that price. Why would they sell for Less?

Subject: Oh My!! From: Econochick To: Econochick Date Posted: Tues, Apr 13, 2004 at 19:16:32 (EDT) Email Address: Not Provided Message: Paul G. B. will laugh if he sees my HYPER hyperlink!! I forgot the thingie at the end. This is why I hated my programming classes in college - always making syntax errors!! At least it's a pretty purple colour, LOL

Subject: PK Was Right From: Terri To: WRS Date Posted: Tues, Apr 13, 2004 at 12:49:05 (EDT) Email Address: Not Provided Message: PK has been right on both political-economic and social issues through this Administration. PK columns always have reflected an abiding love for the country and those who truly serve.

Subject: PK is a statesman not a politician From: Realist To: Terri Date Posted: Tues, Apr 13, 2004 at 12:56:30 (EDT) Email Address: nma@hotmail.com Message: 'PK columns always have reflected an abiding love for the country and those who truly serve.':Absolutely!

Subject: Re: Tuesday's column on the mark From: Realist To: WRS Date Posted: Tues, Apr 13, 2004 at 12:39:24 (EDT) Email Address: nma@hotmail.com Message: Population (Iraq): 25 millions.Coalition? Ratio inhabitants/soldier = ?

Subject: Paul Krugman and Politics From: Mik To: All Date Posted: Tues, Apr 13, 2004 at 11:48:47 (EDT) Email Address: Not Provided Message: I don't know how you guys feel, I have just read the article by Paul Krugman on Iraq and it doesn't have a single trace of economics talk to it. I don't disagree with Paul's article, but I do wish he would concentrate on his expertise of economics discussions. In my mind politics is based primarily on perceptions and relatively little on true facts. Economics is primarily based on true facts and relatively little on perception. I am worried that Paul is going to make a controversial political statement that may later be shown to be totally flawed and in turn Paul may be discredited even in his really good economic work.

Subject: Personal Politics From: Econochick To: Mik Date Posted: Tues, Apr 13, 2004 at 13:06:58 (EDT) Email Address: Not Provided Message: I wouldn't worry about it, Mik. I agree with you that politics are deeply personal. Paul is highly regarded in the academic world as an economist and, at least according to him, that is the world he really cares about. His political opinions shouldn't hurt him. Besides, he's a big boy and can take care of himself, LOL :-)

Subject: Love Paul Krugman From: Terri To: Mik Date Posted: Tues, Apr 13, 2004 at 12:39:15 (EDT) Email Address: Not Provided Message: The column was superb and has everything to do with economics, since the costs of this needless war are staggering.

Subject: Re: Paul Krugman and Politics From: Jhemp To: Mik Date Posted: Tues, Apr 13, 2004 at 12:28:47 (EDT) Email Address: nma@hotmail.com Message: Economy = f(Politics) and not the contrary.

Subject: The March Jobs Report From: samueladams To: All Date Posted: Tues, Apr 13, 2004 at 03:19:47 (EDT) Email Address: samueladams@mchsi.com Message: I am forwarding this letter from mediachannel.org of 4/12/04, wondering if Mr. Krugman has an observation he would like to make on it. 'Jon R. Koppenhoefer adds to the ongoing conversation about job losses here in the US: 'Your correspondent (letter by Kelly Germond from Chicago) was right about the jobs report for March. According to Slate (Daniel Gross: 'The Jobs Jitterbug'), the White House has switched the measurement by which job growth is counted, leaving behind the old measure they used to tout as 'better' than the one they now like (because it speaks more favorably about the March labor market). I read elsewhere that an economist at Wells Fargo has determined the job growth in March was entirely the result of part-time workers being counted (or joining the labor market) for the first time. He estimates that 300,000 of the 'new' jobs are part-time. An article in The Christian Science Monitor points out that the job growth puzzles some economists who are accustomed to seeing job growth preceded by an increase in the average weekly hours worked per employee, which apparently DIDN'T happen in March. This anomaly is explained, of course, by the increase in part-time workers: after months of increasing productivity per worker, employers can't get any more blood from the turnip, and now have to hire part-time people to (1) improve output and (2) avoid higher costs for employee benefits like health insurance, vacations, and the like.''

Subject: test From: Econochick To: samueladams Date Posted: Tues, Apr 13, 2004 at 10:44:21 (EDT) Email Address: Not Provided Message: '<'A HREF='http://news.yahoo.com/news?tmpl=story&u=/ap/20040413/ap_on_bi_ge/farm_scene_3'>'Oil from pig manure?!' Trying a new thing here. sorry.

Subject: test again From: Ari To: Econochick Date Posted: Tues, Apr 13, 2004 at 14:44:20 (EDT) Email Address: Not Provided Message:

Subject: Re: test From: Paul G. Brown To: Econochick Date Posted: Tues, Apr 13, 2004 at 13:12:45 (EDT) Email Address: Not Provided Message: Almost. Get rid of the quotes around the 'open-angle' character: Just < instead of '<'. And you don't need the quotes around the anchor text (Oil from pig manure?!.). Oil from Pig Manure!?

Subject: test again From: Ari To: Paul G. Brown Date Posted: Tues, Apr 13, 2004 at 16:08:33 (EDT) Email Address: Not Provided Message:

Subject: Re: test again From: Paul G. Brown To: Ari Date Posted: Tues, Apr 13, 2004 at 16:29:00 (EDT) Email Address: Not Provided Message: Try: '<'A HREF='http://www.pkarchive.org/'>Anchor Text'<'/A> Only remove the quotes around the open-angle-bracker (less than) symbol. Anchor Text

Subject: THANK YOU!!! - n/m From: Econochick To: Paul G. Brown Date Posted: Tues, Apr 13, 2004 at 13:31:46 (EDT) Email Address: Not Provided Message:

Subject: Crap! From: Econochick To: Econochick Date Posted: Tues, Apr 13, 2004 at 10:46:39 (EDT) Email Address: Not Provided Message: obviously didn't work. Trying to figure out hyperlink but am obviously no good at it yet! Sorry for the interruption.

Subject: Paul G. Brown - Thanks!! From: Econochick To: All Date Posted: Mon, Apr 12, 2004 at 20:39:13 (EDT) Email Address: Not Provided Message: I've taken it up here since we were cut off by further posting. I'm sorry that I didn't actually have time to read most of your links in our 'soaking the rich' discussion below until now. I've read them now and I really appreciate you posting them. Very informative. As you may have guessed, I especially like the one about the 'millionare next door', since my personal agenda is to get more people to realize they too can do that. Also, Paul's article on Sweden I had actually read it before and I think that articles about Economics are really where PK shines. In fact, Charles Stuart did a study for Sweden (1981) and found that the marginal tax average tax rate was 70% and that the highest tax rates was over 100% (I still have trouble figuring out how you can pay taxes over 100%!!). The average tax rate rose through the 80's to 80%. Krugman talks about the effects of this in his article. My only concerns about PK's article is that even though PK doesn't suggest that we change our policy to mirror Sweden, some readers may believe he does. My concern about 'Swedenizing' the US are that 1.) Sweden is a fairly homogenous population of less than 9 million and we are a very heterogeneous 280 million - you can imagine the differences in administation of a welfare state 35 times the size of Sweden and with much more active immigrant inflow. 2.) Sweden has a higher ratio of natural resources per capita and 3.) Sweden still has businesses moving oversees to avoid high taxes and the high earning individuals, usually employed by these companies, are moving with the headquarters. PK mentions this in his last paragraph. And that was the point I was trying to make below - I agree with you about the 'getting them wet'. So, I'm going for: get them wet - right up until the point they want to split and don't raise the tax rate above that. Because you don't want to lose the revenue. I also need to mention that in response to your confusion over my 'nearly 50% tax rate', I failed to mention that the nearly 50% was the combination of federal, state and local taxes for NYC. And that these taxes combine to form the highest taxes in the entire country. However, I thought it still worked pretty well since NYC also accounts for roughly 12% of annual GDP and since there is a large concentration of earners in the highest tax bracket. LA would be the other concentration of $300,000 annual income and above. I didn't make that clear - the problem with posting during work time. Also, I have a technical question. How do you post live links like that? I would love to be able to do it but I don't know how. Thanks.

Subject: Re: Paul G. Brown - Thanks!! From: Mik To: Econochick Date Posted: Tues, Apr 13, 2004 at 11:47:43 (EDT) Email Address: Not Provided Message: Econochick, I picked up to something you have just stated. At first I wasn't sure if it was just me, but I have had some difficulty, on some topics, in understanding if Paul Krugman is really for something, or against it. For example, after reading much of his work, I was convinced that Paul Krugman was 'really' pro-Keynes, then I read a post from someone here stating that Paul Krugman is anti-Keynes. I'm still confused. Is it more of a case that Krugman is pro-Keynes on certain issues only? As for your question on posting live links - I have no idea.

Subject: Re: Paul G. Brown - Thanks!! From: Paul G. Brown To: Mik Date Posted: Tues, Apr 13, 2004 at 14:31:49 (EDT) Email Address: Not Provided Message: I think PK falls into the camp of the post-Keynesians. In places Krugman rails against giving Keynes too much credit. Yet at other times he seems to yearn for the simple certainties of Keynesian fiscal recipes. But then, as [Milton Friedman|Richard Nixon] said, 'We're all Keynesians now.'

Subject: Re: Paul G. Brown - Thanks!! From: Econochick To: Mik Date Posted: Tues, Apr 13, 2004 at 13:01:25 (EDT) Email Address: Not Provided Message: Paul is neither. He is against imposing a keynesian model of economics on today's economy. Economies are structurally different now and Keynsian economics just no longer fits. But he is not 'against' keynes either. Keynes works best if, as happened in the late 20's early 30's, private investment stops. So, during the depression, the government had no choice but to dive head first into deficit spending because by spending it was hoping to restart private investment. But now, although, private investment ebbs and flows with economic ups and downs, it doesn't come to a screeching halt. Also, government spending, as a percentage of GDP has risen dramatically since Keynes published his 'model'. So, from what I've read/heard, Paul will sock it to anyone proposing a heavy shift to demand side economics because it reduces the monies available for private investment which, in turn, is necessary to generate taxable revenue so that the government can spend. I think where people might get confused with the whole 'demand-side' is that Paul believes that their is more efficiency in government - rather than private industry - distributing programs like a national health plan. 'Supply-siders' think that there is more efficiency in private industry providing those same things. I guess the real disagreement is really where each economist thinks the equilibrium point is. And I guess to extreme supply-siders, PK looks keynsian and maybe even communist (who knows!). But in his economics (not his politics), Paul is actually quite moderate. I wasn't really sure exactly what you were asking, Mik, so I tried to cover as many bases as I could. Sorry if it rambles. What have you heard? Oh, and I tried the hyperlink thing. I may be hopeless when it comes to that but I'm going to try again. Paul G. Brown tried to help me out with that but, clearly, I'm a slow student. But the way Paul posts links is just darned elegant and helpful that I'm going to try it again.

Subject: Thanks Econochick From: Mik To: Econochick Date Posted: Tues, Apr 13, 2004 at 14:07:14 (EDT) Email Address: Not Provided Message: Thanks for the clarity. Your reply hit the nail on the head.

Subject: Re: Paul G. Brown - Thanks!! From: Paul G. Brown To: Econochick Date Posted: Mon, Apr 12, 2004 at 23:25:48 (EDT) Email Address: Not Provided Message: 1. Embedding references. Well, it turns out that what you type into the box with the label, 'Your Reply:' is interpreted as HTML. It's ***really*** hard to say this in the reply box, but the idea is to type in (the quote characters around the < are only here to make this text appear as you would type it in, and the quotes around URL_HERE are double, not single quotes ): '<'A HREF='URL_HERE'>anchor text'<'/A> and viola! it gets interpreted as a hyperlink. Cool, huh!? 2. 'The Millionare Next Door' is enlightening on a whole bunch of fronts. Whenever I read an idea or opinion, I try to integrate it with what I 'know' to see how it fits. What struck me about this book (and this message) was the way it fits into that whole 'marginal propensity to consume' thingie. How did 'the rich' get to be 'rich'? Answer: low marginal propensity to consume! Adam Smith concluded that the rich, because they have all of their material wants met, are less inclined to spend additional income on consumption. Well, he was arse about. It was this character quality of personal frugality that allowed these people to get 'rich' in the first place! 3. On Sweden, Krugman, et al. Anyone else know Billy Bragg? In one of his songs, he writes: 'I went out drinkin' with Thomas Paine, He told me all revolutions are not the same.' Now, the lessons of Sweden can't be directly translated to the US for all the reasons you mention. Cultural and historical homogeneity, relative modesty in terms of national aspirations, etc. But the lesson we can learn from Sweden is that an entirely different 'social contract' is possible, and its results are 'good' (by multiple metrics of social good). 4. And a problem with the whole 'higher taxes yields emmigration' argument is precisely the one you point out. Why live in NYC when the taxes are so onorous, and all that seperates you from New Jersey or Connecticut is a short town-car ride? (Same thing is true in California, where high income folk have the chance to decamp to zero income tax Nevada but choose not to.) Where you choose to live is only incidently an economic question. It is far more heavily influenced by culture, background and aspirations. (I say this as an immigrant.) [ Your point on 50% marginal income tax rates accepted. But if anyone is paying 50% overall taxes I suggest they visit a tax accountant without passing 'Go'. ] 5. We concur! The rich benefit disproportionately from the overall economic strength, and from time to time we all benefit if they are given a brief shower.

Subject: Thanks again! From: Econochick To: Paul G. Brown Date Posted: Tues, Apr 13, 2004 at 09:12:35 (EDT) Email Address: Not Provided Message: I will definitely try the embedded thing. Thanks for explaining it. You know, one thing about that cool 'Millionare Next Door' book that I realized too late is that it didn't really fit into our conversation. For tax purposes the 'rich' are high EARNERS - not necessarily high savers. And the federal tax cuts primarily address salary, as capital gains tend to be small to zero in recessions. But I'm glad you brought it up because I'll be ordering that book. I agree with you on Sweden and social contracts. It's just harder to get 280 million people to sign on to the same social contract than it is to get 9 million people to. But what I love about democracies is that we keep debating, voting, trying, thinking. Funny that you mention New Jersey! You're actually right on the money about people moving to New Jersey - half the bankers I worked with lived there because of the lower cost of living. Also, when taxes were raised in NYC in the very early 90's, there was a mass exodus to NJ and tax revenue went down. It didn't go back up again until City taxes were reduced. People live in and around NYC because their careers take them there but I have seen people turn down $450,000 annual compensation packages in favour of $200,000 in Florida. Once you pay nearly 50% in taxes, $4,000/month rent for a tiny two bedroom for you and your kids, and have to deal with the 'New Yorkness' of New York, the $450,000 worth it. Your point about taxation not being the primary consideration in choosing a place to live is well taken. I certainly agree that at it's not a primary concern below a certain threshold (I don't know what the threshold is exactly). I just think that at a certain tax level, it becomes more of a consideration than you think it does. I cite Sweden before reforms - and even after with Erricson as an example. If (for example - I'm just playing with numbers here) we reduce the fed tax rate to 15% for the $50,000 middle class engineer and 'help him out' a lot and increase the fed rate to 60% on the $300,000 banker, given that the highest tax rate in London is 50% (I believe), the banker may go take a job in London instead of NYC and we'll lose his tax revenue. immigration for highly skilled labour is rarely a problem. Instead of gaining the extra tax revenue, we'll lose all the revenue entirely. Or he may not decide to move to London but may decide it's not worth paying 72% (including city and state) of his comp in taxes for the pleasure of working 100 hour weeks and we'll lose the revenue. Unfortunately (or fortunately, depending on your perspective), in the highest tax bracket you start hitting the alternative minimum tax and a bunch of tax credits and deductions disappear. So, short of leaving NYC (which is what folks do), there's not much a tax accountant can do for you, LOL!! Yep, turning the shower off and on, as needed, works great. LOL! This may be too personal a question on a public forum but...where are you from?

Subject: Household Income From: Econochick To: All Date Posted: Mon, Apr 12, 2004 at 16:48:28 (EDT) Email Address: Not Provided Message: Not so bad, not so good Household income is little changed since 2000 -- not the message sent by either Kerry or Bush. April 12, 2004: 2:39 PM EDT NEW YORK (CNN/Money) - John Kerry says the nation's household income situation is miserable. George Bush says it's improving. Economists say the truth is somewhere in between. The state of household budgets and buying power became another battleground in the campaign Monday, as challenger John Kerry argued that the middle class families are financially much worse off than they were before the Bush presidency. The White House suggested that the Republican tax cuts, some of which Kerry opposed, have improved the condition of the average American family. But economists say real household income is little changed since 2000, with gains in household income due to tax cuts being wiped out by inflation, and stagnant wages providing almost no help. Economists cite data to suggest that Kerry is right when he suggests that the wealthy have fared far better than the middle and lower income families during the last four years. But the economists and data also suggest that much of the hit that household income took from weak wage gains and the impact of inflation in the period were balanced by lower taxes and greater entitlement spending going to individuals. In fact, average after-tax income, adjusted for inflation, showed about 5.9 percent growth in the three years after Bush took office, said Mark Vitner, senior economist for Wachovia Securities. That works out to about 2 percent annual growth rate during that period. Much of that gain is due to the impact of the tax cuts, Vitner said. 'We've had very little economic growth, virtually no job growth,' said Vitner. 'The only way you'll get income growth is through wage increases or through tax cuts.' Median income measure But average income figures can be greatly influenced by larger gains among the wealthy. The median income numbers -- the point at which half the population has more and half the population has less -- are another measure of how the middle-income family is doing. The Census Department's data shows pretax median household income rose 0.6 percent to $42,409 between 2000 and 2002, the most recent year available from that agency. When adjusted for inflation, that gain became a 3.3 percent decline during the same period -- the figure that Kerry has been using in his 'misery index.' At least part of the reason for the decline in median income at the same time that average income rose is that the wealthy have seen more gains from both the tax cuts and the overall economic climate, according to economists. 'It's true there's been a shift of income distribution, with a lot of income gains accruing to upper income individuals. The labor market is paying a bigger and bigger premium for being well educated,' said Ethan Harris, chief economist for Lehman Bros. 'At the other end of the distribution, if you look at Joe Six-Pack, you've seen a big decline in big paying, low skill jobs in manufacturing.' But the decline in median income, which was cited by the Kerry campaign Monday, doesn't take into account the impact of tax cuts or the rise in federal spending on entitlement programs such as Medicaid and Medicare. Census data show after-tax median household income between 2000 and 2002, adjusted for inflation, fell only 2.1 percent, not the 3.3 percent pre-tax decline. The median income family's tax bill fell by $625 during that period. Add in government entitlements, which increased by $560, and the income decline was only 0.6 percent to $42,061. 'The debate about tax cuts shouldn't be whether they helped or not -- they clearly helped taxpayers,' said Vitner. 'The debate should be whether we can afford them and whether they can lead to a sustained recovery in economy.' Vitner said the 2002 number was also before the some of the impact of the Bush tax cut was being felt, as well as before the better performance of the economy in 2003. He said he believed the 2003 census data, when available, would likely show a slight rise in the after-tax median household income since 2000.

Subject: Housing Problems - a From: Emma To: All Date Posted: Mon, Apr 12, 2004 at 16:32:52 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/04/12/nyregion/12pocono.html Trying to Hang On in the Poconos, From Before Dawn to Way Past Dusk By ANDREW JACOBS MOUNT POCONO, Pa. - Dazed with exhaustion, Angela Dean takes a third swipe at the snooze bar and then realizes she cannot afford another 10-minute reprieve from reality. It is 3:30 a.m., and there is laundry to be done, lunches to be made and homework to be checked before she can climb aboard the 5:15 bus that carries her to her big city job two states away. She smears toothpaste on her sons' toothbrushes, changes the water in a fishbowl that has turned brown and then trudges into Trenton's bedroom. 'C'mon ragamuffin child,' she says, shaking her whimpering 8-year-old awake and pushing him toward the bathroom. Eleven-year-old Michael is less compliant, and only the promise of a lollipop gets him out of bed. Half an hour later, the boys are bundled into the car and Ms. Dean is driving like mad to the home of a baby sitter. 'Pay attention in class,' she calls to Trenton before heading down the mountain. With a minute to spare, Ms. Dean boards the bus and nods to the bleary-eyed club of commuters. As the bus rumbles past the darkened windows of strip malls and half-finished homes, Ms. Dean unfolds a blanket, tries to apply makeup and gives in to slumber. By the time it crosses the Pennsylvania-New Jersey border, the 5:15 has become a rolling dormitory, the whoosh of hydraulic brakes mingling with an orchestra of snores. Nearly three hours later, after the usual crush at the Lincoln Tunnel, the bus emerges into Midtown, and Ms. Dean, 38, a labor investigator for New York State, fixes her hair and offers a bitter assessment of her life. 'I spend more time with these people than I do with my own family,' she says, stuffing the blanket into her bag. Ms. Dean is a weary soldier in a growing legion of teachers, subway conductors and executive secretaries, 17,000 strong, who make the voyage each day from the forested Pocono highlands to the steel escarpments of Manhattan. Largely black and Latino, urban refugees from places like Newark, Brooklyn and Queens, they come here for the schools, the trees and the $140,000 starter homes, seeking what generations of middle-class strivers have always sought. With Long Island, Westchester and suburban New Jersey beyond their means, more than 44,000 arrived in the 1990's. But this mass westward migration has also had a dark side. Since 1995, more than one in five households with mortgages in Monroe County, Pa., have stumbled into foreclosure proceedings, their credit ruined, their family life in tatters....

Subject: Housing Problems - b From: Emma To: Emma Date Posted: Mon, Apr 12, 2004 at 16:33:21 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/04/11/nyregion/11POCO.html Blue Skies and Green Yards, All Lost to Red Ink By MICHAEL MOSS and ANDREW JACOBS STROUDSBURG, Pa. — Ethel Davis first glimpsed her luminous future in 1997 when she saw a television ad that offered a vision of a green, secure world that had seemed hopelessly out of reach. 'Why Rent?' asked the ad for a home builder in the Pocono Mountains of Pennsylvania. 'Our goal is homeownership for you and your family. Every American wants it; every American deserves it.' And so, with the ad's irresistible kicker, 'The only thing you have to lose is your landlord,' ringing in her ears, she did what thousands of her neighbors, many of them middle-income blacks and Hispanics from New York City, did. She took the interstate west, lured by the promise of fresh air, good schools and green, gated communities they could never afford closer to home. It turned out there was more to lose than a landlord. Six years later, after her new house proved far beyond her means and the five-hour daily round trip to her job in New York City sapped her endurance, her marriage has collapsed, the bank is seizing her house and she is back in Brooklyn renting space from a landlord who took pity on her. 'I worked so hard for so long, and I have nothing to show for it,' said Ms. Davis, a 45-year-old legal secretary. 'I'm just devastated.' Ms. Davis's migration west was part of a national campaign that has made homeowners of millions of middle- and lower-income Americans. But her tumble from ownership to foreclosure was part of another mass movement. In the last decade, lenders have brought foreclosure proceedings against 5,700 homes in Monroe County, Pa., or more than one in five of all mortgaged homes in this rural county that takes in most of the Poconos....

Subject: The Shame of Our Cities From: Emma To: All Date Posted: Mon, Apr 12, 2004 at 14:56:37 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/04/11/opinion/11SUN3.html 'The Shame' That Lincoln Steffens Found Has Not Left Our Country By ADAM COHEN When Lincoln Steffens traveled the country in the early 1900's, most Americans blamed government corruption on immigrants and the poor. But after two years of putting big-city politics under a microscope, he disagreed. 'In all cities, the better classes — the business men — are the sources of corruption,' Steffens wrote in 'The Shame of the Cities,' 'but they are so rarely pursued and caught that we do not fully realize whence the trouble comes.' What opened the door to public corruption, Steffens concluded, was the blurring of the line between business and government. The average American 'deplores our politics and lauds our business,' Steffens wrote, and therefore wants more businessmen involved in government. But this impulse ignores what business is all about: generating profits. It is folly, Steffens argued, to expect businessmen to look after any interest broader than their own. 'The Shame of the Cities,' one of the great works of American muckraking, turns 100 this spring, but it speaks uncannily to our times. In this age of Enron and Halliburton, of huge campaign contributions and reckless deregulation, its arguments about the corrosive effect of business on government feel up to the minute. Every bit as timely is its call to arms. Steffens believed, as his book title makes clear, that the shame of corruption lay not with those who engaged in it, who could hardly be expected to act otherwise, but with the cities, which is to say their citizens, for not actively stepping in and putting a stop to it.

Subject: Diversity in the University From: Emma To: Emma Date Posted: Mon, Apr 12, 2004 at 15:24:44 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/04/11/magazine/11ESSAY.html Diversity's False Solace By WALTER BENN MICHAELS The university where I have taught for the last three years -- the University of Illinois, Chicago -- is a large, increasingly underfinanced public university. Our classrooms are overcrowded. Our physical plant is deteriorating. Many departments cannot afford to hire any new professors. But as we, like other universities around the country, send out our final admissions letters this month, there is at least one bright spot, one area where we have done well and are poised to do even better. Seemingly every piece of literature that U.I.C. distributes about itself announces that we have been ''ranked among the Top 10 universities in the country for the diversity'' of ''our student body.'' And that diversity, the literature goes on to point out, ''is one of the greatest aspects of our campus.'' The bad news about our current condition is that you may be jammed into a classroom so full that you can't find a place to sit. But the good news is that 46 percent of the people jammed in there with you will be Caucasian, 21 percent will be Asian, 13 percent will be Hispanic and 9 percent will be African-American. It is often said that Americans don't like to talk about race, but no remark is more false. The eagerness of other schools to produce their own versions of U.I.C.'s diversity figures makes it obvious that, in fact, we love to talk about race. And we not only talk about it, we also write books about it, we teach classes about it and we arrange our admissions policies to take it into account. It is true, however, that we don't so much like to call it race. Students, faculty members and administrators often prefer to speak of their cultural identities. Unimpressed by the objection that -- speaking the same language, wearing the same clothes, reading the same books -- they all seem to me to belong to the same culture, my students speak proudly of their own cultures and respectfully of others'. Some might be taller than others, some might be smarter than others, some might be better-looking than others, but all belong to cultures, and all the cultures are worthy of respect. And that's the advantage of the idea of culture: it gives us a world of differences without inequality. And the enthusiasm for such differences is widespread. When I asked a group of Harvard literature students about what distinguished them from a parallel group of literature students at U.I.C., they were prepared to acknowledge that the U.I.C. students might be even more diverse than they were, but they were unable to see the relevance of the fact that the U.I.C. group was also less wealthy. And this is equally true of the students at U.I.C. who identify themselves as black, white, Arab, Asian and Hispanic and not as poor or working class. After all, your ethnicity is something you can be proud of in a way that your poverty or even your wealth (since it's your parents' wealth) is not. But the real value of diversity is not primarily in the contribution it makes to students' self-esteem. Its real value is in the contribution it makes to the collective fantasy that institutions ranging from U.I.C. to Harvard are meritocracies that reward individuals for their own efforts and abilities -- as opposed to rewarding them for the advantages of their birth. For if we find that the students at an elite university like Harvard or Yale are almost as diverse as the students at U.I.C., then we know that no student is being kept from a Harvard because of his or her culture. And white students can understand themselves to be there on merit because they didn't get there at the expense of black people. We are often reminded of how white our classrooms would look if we did away with affirmative action. But imagine what Harvard would look like if instead we replaced race-based affirmative action with a strong dose of class-based affirmative action....

Subject: The Corporate Tax Dodge From: B.B. To: All Date Posted: Mon, Apr 12, 2004 at 13:40:30 (EDT) Email Address: Not Provided Message: The Corporate Tax Dodge by Cassandra Q. Butts April 10, 2004 The news that more than 60 percent of U.S. corporations failed to pay any federal taxes from 1996 through 2000 when corporate profits were soaring and that corporate tax receipts had fallen to just 7.4 percent of overall federal tax revenue in 2003 – the lowest since 1983 and the second-lowest rate since 1934 – is an outrage. But it should come as no surprise to anyone who has been paying attention to national tax policy over the past few years. The General Accounting Office (GAO) report also found that an astonishing 94 percent of corporations reported tax liability of less than 5 percent of their total income during the same time period. Corporate tax dodging has gone on for far too long. But the policies of the Bush administration have exacerbated the problem by furthering the culture of tax avoidance by big corporations and creating a pervasive unfairness in our tax code. With Tax Day (April 15) fast approaching and the Bush administration continuing to make the case that the Bush tax cuts have benefited American families, the GAO report could not be timelier in painting a far less rosy picture. Both the GAO study and the historical record support the conclusion that any benefit working families have received from the Bush tax cuts has been more than offset by the additional tax burden they must bear because corporations no longer pay their fair share of taxes. As the GAO study documents and the historical record proves, corporate tax dodging is directly linked to the reduction of corporate tax revenues. Corporate tax receipts dropped from an average of 4.8 percent of GDP during the 1950s to 1.3 percent of GDP in FY2003. Treasury Department figures show that actual corporate income tax revenues fell 36 percent from FY2000 to FY2003. And while the statutory corporate income tax rate is 35 percent, the effective corporate tax rate - the actual share of corporate taxes paid on corporate profits - has averaged just 26 percent since 1993, according to the Congressional Research Service. While the more recent corporate tax shortfalls may reflect a weaker economy at the beginning of 21st century, much of it can be attributed to both the Bush administration's corporate tax cuts enacted in 2002 and 2003 and the loopholes in the tax code that have allowed corporations to shelter income offshore. The 2002 and 2003, tax bills cost $177 billion in corporate tax breaks in fiscal years 2002 through 2005, $44 billion in 2002, $53 billion in 2003, $64 billion in 2004 and $16 billion in 2005 (all figures estimated by the Joint Committee on Taxation). Estimates of the cost of corporate tax loopholes have been projected at upwards of $50 billion a year, according to Citizens for Tax Justice. As corporate tax receipts decreased, payroll taxes, the most regressive of all taxes, increased dramatically. Specifically, payroll taxes increased from 1.6 percent of GDP in FY1950 to 6.8 percent of GDP in FY2002, surpassing both corporate income taxes and excise taxes in their contribution to total federal receipts. This rise in payroll taxes represented a 30 percent increase in the contribution of payroll taxes to overall federal revenues. At the same time, individual income taxes also increased in the past half century as both a percentage of GDP and in their relative contribution to total federal tax receipts. Individual income taxes rose from 5.8 percent of GDP in FY1950 to 8.3 percent of GDP in FY2002. The regressivity of the Bush tax cuts has made this increase much more of a burden on middle and low-income taxpayers. The Bush administration's responsibility for furthering corporate tax avoidance also extends to its underfunding of tax enforcement at the Internal Revenue Service (IRS). In 2003, an underfunded IRS pursued only 18 percent of the abusive tax shelter cases uncovered by IRS agents. As recently as March 30, the IRS Oversight Board released a special report imploring Congress to go beyond the president's 2005 budget request of a 4.6 percent increase in funding for IRS and detailing what it identified as a consistent underfunding of tax enforcement activities during the Bush administration. Despite the 4.6 percent increase, the report found that IRS's enforcement capability would still continue to decrease for the fourth year in a row because the increase inexplicably ignored $230 million in expected cost increases related to pay raises and other required expenses. The report also found that the Bush budget for the IRS would lead to about a half-million unresolved delinquent tax cases and create a national tax gap of $311 billion or 65 percent of the projected 2004 budget deficit. Yet the Bush administration was able to find room in its 2004 budget to dramatically increase funding for compliance with the Earned Income Tax Credit (EITC) for low-income families. The Bush budget requested a 68.5 percent increase in EITC enforcement, despite the fact that EITC avoidance represents only 2.8 percent of the overall uncollected tax gap. Rather than engaging in the empty rhetoric of Tax Day that conservatives have mastered, which does nothing to close the $311 billion national tax gap or the gaping long-term fiscal gap, progressives must change the framework in which the debate on national tax policy is discussed. We must do so by offering a progressive alternative of fundamental tax reform that promotes simplicity in the tax code, advances overall fairness in the treatment of all taxable income, closes the budget deficit, and provides the necessary revenue to fund our national priorities. Closing corporate tax loopholes and better enforcement must be a part of that discussion, but it must extend beyond an adherence to revenue neutrality in the treatment of corporate taxes to address the real fiscal challenges ahead. http://www.americanprogress.org/site/pp.asp?c=biJRJ8OVF&b=45142

Subject: Taxes - Most Corporations Don't Pay From: B.B. To: B.B. Date Posted: Mon, Apr 12, 2004 at 13:42:22 (EDT) Email Address: Not Provided Message: TAXES Most Corporations Don't Pay Over the next week, millions of individual Americans will settle up with Uncle Sam – and most corporations will skip out. A new GAO report reveals that from 1996-2000 more than 60% of U.S. corporations paid no taxes whatsoever. During the Bush Administration, things have gone from bad to worse as 'corporate tax receipts have shrunk markedly as a share of overall federal revenue.' Last year 'they had fallen to just 7.4% of overall federal receipts, the lowest rate since 1983, and the second-lowest rate since 1934.' Even corporations which do pay taxes don't pay much. Although the corporate tax rate is theoretically 35%, in 2000 '94% of U.S. corporations reported tax liabilities amounting to less than 5% of their total income.' According to Sen. Byron Dorgan (D-ND) the discrepancy can be explained by 'massive tax avoidance, and perhaps in many cases tax evasion.' UNDER BUSH CORPORATE AUDITS PLUMMET: Despite dwindling revenues from corporate taxes during the Bush Administration, 'America's largest corporations are less likely to face an IRS audit this year than at any time in the past decade.' Over the last four years 'audits of corporation have fallen 26%.' Meanwhile, over the same time period, 'audits of individual tax returns have climbed 37%.' The result is 'not only unfair to average taxpayers, but is costly to the government because corporate audits tend to recover far more money than individual audits.' RIGHT-WING JUSTIFICATIONS DON'T HOLD WATER: The Chamber of Commerce tried to explain away corporate tax evasion by asserting that many of the companies which didn't pay taxes didn't make a profit. But an analysis by American Progress Senior Economist Christian Weller proves that argument false. Corporate tax payments have dropped not only as a share of total government revenues but also as a percentage of corporate profits. The problem is not that corporations aren't profitable – it is that they aren't paying taxes on the profits they make. CONSERVATIVES PUSH FOR MORE TAX CUTS FOR CORPORATIONS: Even as corporate tax receipts plunge, the conservative leadership in the House of Representatives has 'quietly tucked billions of dollars worth of new tax breaks for business' in the transportation bill that passed last week. If enacted, the tax breaks would cost the nation $12.8 billion over five years. Worse, the tax provisions would further subsidize the 'offshoring' of American jobs. Under the House bill, 'multinational companies with extensive offshore operations [would be able] to fully use foreign tax credits to offset their tax liability.' BUSH'S HIDDEN TAX AGENDA: Newsweek reports President Bush has 'not been at all forthcoming about the ultimate effect of his [tax] program.' If Bush successfully enacts his tax agenda – lowing taxes on capital gains, creating two new income-sheltering investment plans and eliminating the estate tax – 'the income tax will become a misnomer – it will really be a salary tax.' That means average Americans would shoulder an increasing percentage of the tax burden. Why? Salary accounts for 80% of total income for most Americans but less than half of total income for the top 1%. By eliminating the estate tax and the tax on capital income, Bush would 'create a new class of landed aristocrats who could inherit billions tax-free, invest the money, watch it compound tax-free and hand it down tax-free to their heirs.' http://www.americanprogress.org/site/pp.asp?c=biJRJ8OVF&b=44915#3

Subject: Economics for Children From: Econochick To: B.B. Date Posted: Mon, Apr 12, 2004 at 16:29:05 (EDT) Email Address: Not Provided Message: If tax audits for corporations have been falling over the past 4 years, then for at least the first two of those four years, they were falling under the Clinton administration. Corporate tax revenue has fallen since 2000 because earnings have fallen as a result of lower demand during the recession. And even when earnings recover, operating losses from previous years are written off agains current year earnings. The same thing happened under the Clinton administration - GAAP rules have not changed under the Bush administration. Neither have corporate tax laws. I mean, you can disagree with the laws all you want but you can't blame Bush any more than you can blame Clinton for them. And anyway, since public corporations are actually owned by...well...us, any tax savings is passed on as capital appreciation to the holder of the shares. You pay a much lower capital gains tax on it and if the corporations pay NO taxes then YOU, the investor, is not double taxes. The minority landed aristocracy nonesense is just ridiculous. That means that us middle-class folks invested in stocks - either through mutual funds or directly - should be denied the ability to build our wealth so that our income can account for less than that 80% the article is talking about. How does that make sense? Screw that! I want to be able to invest so that in the future I don't have to work as much. Bush bad, Clinton good. As Galbraith said in an article previously posted by BB - 'That's economics for children'. AND, Hey!!! One more time I have a chance to plug my own agenda - SAVE!! INVEST!! By investing you can have more passive income, which means you don't have to work as hard. Read that bit about the the 1% for whom salary is not the largest source of income. You would be surprised how little it takes on a weekly base to save a pile of money to generate a passive income.

Subject: Re: Economics for Children From: B.B. To: Econochick Date Posted: Mon, Apr 12, 2004 at 17:24:08 (EDT) Email Address: Not Provided Message: I normally don't rise to your bait, but I'll do so just to ask you to read an article before you post rubbish about it. If you want to spout your right-wing drivel about the rich working harder and sacrificing more than the poor, please rerfrain from doing so near my posts, as I'll refuse to address them in future. It's a free board, of course. You can do as you wish. But I thought I'd ask you nicely.

Subject: Re: Economics for Children From: Hehe To: B.B. Date Posted: Mon, Apr 12, 2004 at 18:44:47 (EDT) Email Address: Not Provided Message: Good answer.

Subject: Don't be Childish, BB From: Econochick To: B.B. Date Posted: Mon, Apr 12, 2004 at 17:55:27 (EDT) Email Address: Not Provided Message: I took issue with what was written in the article that you posted. What an incredible show of arrogance to think that I would stoop to 'baiting' you. I think you over-estimate your importance in the world. If you don't agree with what I say you can choose to disagree in silence of publicly on this board. But taking personal offense at a difference of opinion is truly childish. And that's all I'll say on the subject.

Subject: The Corporate Tax Void From: B.B. To: B.B. Date Posted: Mon, Apr 12, 2004 at 13:47:39 (EDT) Email Address: Not Provided Message: The Corporate Tax Void: Record High Profits and Record Low Taxes by Christian E. Weller April 9, 2004 Download the full report: PDF Tax season is upon us. But, at a time when most households are paying taxes, the General Accounting Office (GAO) just reported that most corporations do not and that 95 percent of corporations pay less than 5 percent of their income in taxes. In response, the Chamber of Commerce called these figures misleading since supposedly many corporations did not earn any income. The GAO's report indicates that it ain't so. The corporations that did not pay taxes between 1996 and 2000 appeared increasingly profitable. Further, since 2000, corporate taxes dropped sharply, while profits rose decisively. And rising profits came out of workers' hide since overall wage growth lagged. http://www.americanprogress.org/site/pp.asp?c=biJRJ8OVF&b=45149

Subject: Corporate Tax Audits From: Emma To: B.B. Date Posted: Mon, Apr 12, 2004 at 15:38:58 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/04/12/business/12irs.html Corporate Risk of a Tax Audit Is Still Shrinking, I.R.S. Data Show By DAVID CAY JOHNSTON Since taking office, the Bush administration has repeatedly promised to get tough with tax cheats, saying it has ended a long slide in enforcement of tax laws. But an independent analysis of new Internal Revenue Service data released today shows that tax enforcement has fallen steadily under President Bush, with fewer audits, fewer penalties, fewer prosecutions and virtually no effort to prosecute corporate tax crimes. The audit rate for the 11,200 largest corporations, which pay nearly all corporate income taxes, has fallen by almost half over the last decade, as has the audit rate for unincorporated businesses. David Burnham, a director of the Syracuse University research organization that reviewed the government data, said that 'President Bush and the I.R.S. commissioner have been running around talking about how they are going after corporate scofflaws, but the I.R.S. data suggest that the effort against corporate scofflaws is continuing to decline.' Today, the I.R.S. has about half the law enforcement resources for each tax return that it did in 1988, the Syracuse researchers said.

Subject: Re: Corporate Tax Audits From: B.B. To: Emma Date Posted: Mon, Apr 12, 2004 at 16:11:58 (EDT) Email Address: Not Provided Message: Here's an interview with David Cay Johnston that I missed and I'm listening to just now. It's excellent so far. http://yourcallradio.org/archive/archive.html (Scroll down to 3/25/04). His book looks very good - 'Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich - and Cheat Everybody Else'. I've gotta get it when I've got the time and the extra cash.

Subject: Tax Burdens From: Emma To: B.B. Date Posted: Mon, Apr 12, 2004 at 13:44:49 (EDT) Email Address: Not Provided Message: http://www.cbpp.org/4-12-04tax.htm FEDERAL TAX BURDENS GENERALLY AT LOWEST LEVELS IN DECADES Decline Began Before 2001 Tax Cut; Main Cause is Lower Income Taxes The typical family has been paying a decreasing share of its income in federal taxes in recent years, largely because of declines in its federal income tax burden. This trend began before enactment of the 2001 tax cut and has continued since then. The findings presented below are based on new data from the Congressional Budget Office on overall federal tax burdens as well as on data from the Treasury Department on trends in federal income tax burdens. The new CBO data cover years from 1979 through 2001. They show that when households’ total federal tax burdens are considered — including income, payroll, corporate, excise, and other taxes — most categories of households paid a smaller share of their income in taxes in 2001 than in any year on record, back to 1979. The tax burden on most families has fallen further since 2001, as more tax cuts have taken effect....

Subject: Fiscal Policy - A New Deal From: Emma To: All Date Posted: Mon, Apr 12, 2004 at 13:39:03 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/04/11/business/yourmoney/11view.html Maybe It's Time for Another New Deal By LOUIS UCHITELLE Can the private sector generate enough jobs to return the United States to full employment? Or must government play a much greater supporting role in job creation? That question, once hotly debated, is barely mentioned today. It should be. For 30 years, the assumption has been that the private sector would generate full employment on its own. It has not, except for a five-year stretch in the late 1990's. Now the situation has become worse. Despite robust economic growth, the private sector is generating fewer jobs than ever in a recovery. Never mind that private employers added 277,000 jobs in March. It was the biggest one-month gain in the two and a half years since the last recession. It was also somewhat of a mirage. Most of the 277,000 jobs were canceled out by a decline in total hours worked and total weekly pay. 'The normal rule of thumb by which a certain increase in the gross domestic product would produce a concomitant increase in jobs does not appear to apply,'' Representative Barney Frank, a Massachusetts Democrat, declared in a speech before the House last month. The situation cries out for government job creation, Mr. Frank said in an interview last week. But public pressure is lacking. 'People have so attacked government,'' he said, 'that now when there is a need for it to help create jobs, they cannot recognize a positive role for government.'' Such views are rare today. They are often dismissed as heresy. Among politicians they show up, when they show up at all, in the liberal wing of the Democratic Party. Mr. Frank is a member of that dwindling wing. John Kerry, the presidential candidate, is not. He is a centrist, in the Clinton mode. He counts on the private sector to generate full employment, with government playing a peripheral role, mainly in tax incentives that encourage companies to create more jobs. After World War II, millions of Americans took for granted a robust government role in job creation. The Depression had amply demonstrated the private sector's failure and, with military spending winding down, there was widespread concern that corporate America could not generate enough jobs. The New Deal reflected that concern, and early drafts of the Employment Act of 1946 included clauses mandating government job creation through public spending - in effect, supplementing insufficient demand for private-sector workers....

Subject: Profits and Wages From: Emma To: All Date Posted: Mon, Apr 12, 2004 at 13:35:43 (EDT) Email Address: Not Provided Message: http://www.epinet.org/content.cfm/webfeatures_snapshots_04122004 Lopsided trends in profits and wages threaten to topple growth The rise in the stock market over the last year reflects spectacular growth in profits but not a generally healthy economy nor sustainable growth. Profits have never fared better, nor wage and salary income so poorly for this period of the business cycle. Since the last expansion ended in the first quarter of 2001, corporate profits in the United States have expanded by 57.5%. Meanwhile, private wage and salary income has contracted by 1.7% and total labor compensation has increased by a meager 1.5%. This imbalance is potentially bad news for the economy. Labor compensation is more likely to be converted to demand for domestic production and fuel a sustained growth spiral. In contrast, when income goes to corporate profits, a larger share is likely to be spent abroad (on imports or investments abroad) or to pay down debt....

Subject: Re: Profits and Wages From: B.B. To: Emma Date Posted: Mon, Apr 12, 2004 at 13:57:43 (EDT) Email Address: Not Provided Message: Thank you, Emma. You post wonderful articles.

Subject: Love Your Posts From: Emma To: B.B. Date Posted: Mon, Apr 12, 2004 at 13:59:32 (EDT) Email Address: Not Provided Message: Back at you....

Subject: IRAQ WAR & GEORGE W'S ECONOMIC POLICIES From: de nerval To: All Date Posted: Sat, Apr 10, 2004 at 23:40:14 (EDT) Email Address: antone04@earthlink.net Message: I am wondering, if anyone knows of any statistical analysis done that has correlated current U.S. economic policy benefits (if any), with the families of servicemen/women serving (or killed in action) in Iraq.

Subject: European Economic Liberalization From: Jennifer To: All Date Posted: Fri, Apr 09, 2004 at 15:24:50 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/04/09/business/09norris.html European Economic Liberalization: Often Forecast but Never Done PARIS ON May Day, the historic workers' holiday, the European Union will expand to 25 countries, bringing increased competition that forces economic liberalization in the comfortable countries of old Europe. Or so they say. Forecasts of structural change in Europe have been plentiful - and wrong. The changes that economists support are a hard sell to voters even in good times, and petrify many of them when unemployment is high. A decade ago, as Europe prepared for monetary unification, it was widely predicted that that step would be the incentive for change. The common currency would mean that a country could not just devalue its way to competitiveness. Instead, it would have to attack structural issues, knowing that inaction would risk leaving a country behind. Action would mean freeing the labor market to let companies become more competitive. And it would mean doing something to bring down high tax rates and deal with soaring costs of public pension plans. Governments tried. But their limited accomplishments may have been worse than nothing. They had to compromise and make only minimal pension changes. They said they would try to do more in coming years. Telling an aging population that its pension benefits may be in jeopardy in a few years is not a prescription likely to increase consumer spending, and it has not. Nor, it turns out, is it a wise political strategy....

Subject: Anything into Oil From: mike To: All Date Posted: Thurs, Apr 08, 2004 at 21:34:05 (EDT) Email Address: Not Provided Message: Has anyone read this article Discover MAgazine May 2003. I would appreciate comments or information Mike

Subject: Trade and Jobs From: Jennifer To: All Date Posted: Thurs, Apr 08, 2004 at 14:42:57 (EDT) Email Address: Not Provided Message: http://www.epinet.org/content.cfm/briefingpapers_bp149 Shifting blame for manufacturing job loss Effect of rising trade deficit shouldn't be ignored By Josh Bivens Many economic observers have recently exonerated international trade flows for the hemorrhaging job losses in the manufacturing sector of the United States, generally claiming that either changing demand patterns or rapid productivity growth are the cause of manufacturing's decline. But the evidence shows that trade imbalances in manufacturing have accounted for 59% of the decline in manufacturing employment since 1998. A close examination of net imports, demand for manufactured goods, and productivity growth reveals that these three factors influence the U.S. manufacturing industry in the following ways: ...

Subject: Oil From: Emma To: All Date Posted: Thurs, Apr 08, 2004 at 14:23:10 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/04/08/business/08OIL.html?hp Oman's Oil Yield Long in Decline, Shell Data Show By JEFF GERTH and STEPHEN LABATON The Royal Dutch/Shell Group's oil production in Oman has been declining for years, belying the company's optimistic reports and raising doubts about a vital question in the Middle East: whether new technology can extend the life of huge but mature oil fields. Internal company documents and technical papers show that the Yibal field, Oman's largest, began to decline rapidly in 1997. Yet Sir Philip Watts, Shell's former chairman, said in an upbeat public report in 2000 that 'major advances in drilling' were enabling the company 'to extract more from such mature fields.' The internal Shell documents suggest that the figure for proven oil reserves in Oman was mistakenly increased in 2000, resulting in a 40 percent overstatement....

Subject: Chinese Power Shortages From: Emma To: Emma Date Posted: Thurs, Apr 08, 2004 at 14:25:14 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/04/08/business/worldbusiness/08china.html China, as Summer Nears, Braces for Power Shortages By CHRIS BUCKLEY BEIJING - China's galloping economic growth will continue to be dogged by widespread electricity shortages this year, a Chinese energy official has said. The deputy chairman of the State Electricity Regulatory Commission, Song Mi, told a meeting of electricity industry officials that the country faced a shortfall of 20 million kilowatts this year - twice last year's shortfall, the official Xinhua News Agency reported late Tuesday. 'This year the imbalance between demand and supply will remain sizable,' Mr. Song said. He warned that electricity shortages would be most acute in eastern and southern China, where double-digit economic growth has pushed industrial and domestic demand to new heights.

Subject: Re: Chinese Power Shortages From: Mik To: Emma Date Posted: Thurs, Apr 08, 2004 at 16:40:59 (EDT) Email Address: Not Provided Message: And that is why they have to hurry up and complete the 3-gorges dam.

Subject: Chinese Growth From: Jennifer To: Mik Date Posted: Thurs, Apr 08, 2004 at 17:39:00 (EDT) Email Address: Not Provided Message: China seems to be growing like America did after the Civil War.

Subject: Krugman to be Fired? From: Barney To: All Date Posted: Thurs, Apr 08, 2004 at 13:23:56 (EDT) Email Address: intlis@aol.com Message: Did somebody hear a rumor that the Bush Administration is trying to get Krugman fired from the NY Times?

Subject: Re: Krugman to be Fired? From: Bobby To: Barney Date Posted: Thurs, Apr 08, 2004 at 17:08:21 (EDT) Email Address: robert@pkarchive.org Message: What are the sources?

Subject: PK is Wonderful From: Terri To: Bobby Date Posted: Thurs, Apr 08, 2004 at 17:37:21 (EDT) Email Address: Not Provided Message: This terrible Administration despises critics, but PK is wonderful and will not be fired!

Subject: Re: Krugman to be Fired? From: Econochick To: Barney Date Posted: Thurs, Apr 08, 2004 at 15:03:14 (EDT) Email Address: Not Provided Message: As important as PK is in his own mind, presidential administrations have bigger fish to fry.

Subject: snipe, snipe, snipe From: David E... To: Econochick Date Posted: Thurs, Apr 08, 2004 at 17:47:09 (EDT) Email Address: Not Provided Message: Your snide criticism is getting boring? Put up or shut up. Tell us why Krugman stinks as a columnist.

Subject: No From: Terri To: Barney Date Posted: Thurs, Apr 08, 2004 at 14:44:29 (EDT) Email Address: Not Provided Message:

Subject: On the Dollar Crisis From: Mike To: All Date Posted: Wed, Apr 07, 2004 at 21:50:22 (EDT) Email Address: mike432@hotmail.com Message: Anyone know if Krugman has any recent comments on this issue, or possibly a response to Richard Duncan's book (yes I know this guy is an investment banker and yes I am aware of what Krugman thinks in general about non-economists trying to do economics but still Duncan rasies some interesting points)? FinanceAsia: Posterity may remember it as a seminal book in the field of 21st century economics. Indeed, rarely has a book offered such a grim yet well argued view of the current economic situation facing the world and Asia. The author - a former Salomon banker, and World Bank staffer - is Richard Duncan and the book is called the Dollar Crisis. In this essay, the American explains why the US dollar is at the root of global deflation, and recent bubbles, and what it will mean for Asia

Subject: Awful Fiscal Policy From: Emma To: Mike Date Posted: Thurs, Apr 08, 2004 at 14:59:22 (EDT) Email Address: Not Provided Message: There are no comments I can find on the work by PK. To me, the ideas are not convincing. The balance of payments deficit is not erased by fixing exchange rates, also the deficit is large but not life threatening if we have decent fical policy. The problem is awful fiscal policy.

Subject: Re: Awful Fiscal Policy From: Pete Weis To: Emma Date Posted: Fri, Apr 09, 2004 at 01:38:25 (EDT) Email Address: Not Provided Message: Emma. You keep talking about good fiscal policy as a cure for much of what ails our economy. I'm interested in what type of fiscal policies we should be puting into action. For instance, what type of fiscal policies would help to significantly increase employment? What types of good fiscal policies would help to reduce the current account deficit or offset the negative effects of our current account deficit? How could good fiscal policy reduce the increasing costs of oil in our oil based economy? How would good fiscal policy keep interest rates low or make up for the fact that interest rates have bottomed out and mortgage refinancing which has kept consumption from tanking is begining to falter. I'm skeptical about how much 'good fiscal policy' will solve our problems. But if you are more specific, maybe you can change my mind.

Subject: Fiscal Policy From: Emma To: Pete Weis Date Posted: Fri, Apr 09, 2004 at 13:07:44 (EDT) Email Address: Not Provided Message: Seriously, for fine fiscal policy, refer to Bill Clinton and Robert Rubin. Paul Krugman has been suggesting better fiscal policy for 3 years.

Subject: Re: Fiscal Policy From: Pete Weis To: Emma Date Posted: Sat, Apr 10, 2004 at 04:40:03 (EDT) Email Address: Not Provided Message: What exactly does Paul Krugman suggest would be part of a fiscal policy which would significantly fix our economic problems - such as employment, trade deficit, high debt levels, etc. ? Were the boom times of the 90's due to the good fiscal policies of the Clinton administration or the abundance and growth of high paying tech jobs along with a booming stock and bond market? There are alot of things I don't like about the Republican agenda and I lean heavily Democratic, but I don't really believe there were any Clinton fiscal policies which contributed significantly to a strong economy. I also believe if Al Gore were our present chief executive, instead of Bush, he would be facing most of the same economic difficulties we are now. However, I don't believe we would be involved in the disaster in Iraq, we would have a much better energy policy, and we would not have burned bridges with nations who once were our allies if Al Gore had won that election. But that's just my opinion and I'm sure some others who post here think differently. Yes, our government could target tax reductions to help the larger group of middle class consumers rather than the wealthiest group who need the least help. But this would only bring limited temporary stimulus - it's not a long term fix. Perhaps, real help for small businesses is part of the answer since this is often where new inovations and many new, better paying jobs get started. What do you think?

Subject: Imagine From: Emma To: Pete Weis Date Posted: Mon, Apr 12, 2004 at 13:41:34 (EDT) Email Address: Not Provided Message: Imagine what we could do with a New Deal sort of fiscal policy, a policy designed to tackle the problems you describe by focusing on infra-structure and small business development.

Subject: A Progressive Fiscal Policy From: Paul G. Brown To: Pete Weis Date Posted: Sat, Apr 10, 2004 at 16:53:09 (EDT) Email Address: Not Provided Message: Some thoughts on a progressive fiscal policy response to Bush 43. 1. The Bush 43 Administration's fiscal policy mix has two basic thrusts: i. Three tax cuts passed in 2001, 2002 and 2003. These reduce the size of federal revenue as a % of GDP to a historic low of less than 17%. ii. During the same period, the administration has increased federal government outlays to just south of 20% of GDP. In other words, if you stand back and squint you can't help but conclude that, far from following what one might call a prudent, conservative fiscal policy (balanced budgets, smaller government) Bush 43 is responding to our economic challenges with a recipe 'straight out-a Bloomsbury' (ie. a Keynesian policy mix). But but but . . . let's look a bit closer. 2. Look again at that first analysis of just who is receiving all the tax relief that the Whitehouse talks of so fondly. The Bush Tax Cuts, by their design, have the effect of shifting the tax burden from the top 1% of income earners onto the rest of the population. Now, the arguement Keynes used to justify short term government deficits as a means of economic stimulus has to do [See Chapter 10 of his _General_Theory_, not currently available online] with the way people spend money. The basic idea has undergone modification (Milton Friedman's lifetime income hypothesis) but the idea is that money given to lower income brackets is more likely to be spent on consumption than on savings. So, a progressive tax cutting policy would have responded to the recession of 2001 with a tax cut, but one with a very different design. On the spending side of the ledger, not all the spending is bad. Doctrinaire conservatives complain that Bush has increased non-discretionary spending by 20.8% but seem to think that a $30 Billion increase in education spending is a bad thing. The bad news here is that some of the spending doesn't seem to be enough ($400 Billion on a Medicate Drug benefit underwhelms the needs, and recent events in Iraq seem to suggest that we're doing that 'on the cheap'). A progressive spending policy would a) not include the massive bulk of Rumsfeld's military spending (ie no missile defense shield) but would probably include b) many of Bush's other initiatives - education, and the drug benefit. In terms of specifics, a prudent progressive fiscal policy might include: a shorter, sharper, and permanent income tax cut with a different structure (skewed more to the bottom 80% by income), no change to the Estate Tax, and no adjustment to capital gains tax. At the same time, short term investment spending on public infrastructure that might push up spending as a % of GDP while the recession lasts, but then hold the line once the output gap has closed to as to curtail inflationary pressures, and (gasp) further the cause of liberty by reducing the size of government.

Subject: Oops, mistake! From: Econochick To: Pete Weis Date Posted: Sat, Apr 10, 2004 at 16:18:00 (EDT) Email Address: Not Provided Message: I guess it was not Emma but Pete who suggested extra help for small businesses.

Subject: Laffer Curve From: Econochick To: Pete Weis Date Posted: Sat, Apr 10, 2004 at 16:17:03 (EDT) Email Address: Not Provided Message: Bush cut taxes in the hopes of getting the same results that Reagan got in the 80's. Reagan's cut (like Bush's) included all tax payers, including those in the highest tax bracket ($200,000 plus). The results in the 80's were as follows: Tax receipts from the 'middle income' group went down. Tax receipts from the less than 1% of the population in the highest tax bracket went up - up by enough so as to actually INCREASE overall tax receipts. Total tax receipts increased by 3% in 1982, 9% in 1983, and 23% in 1984. This may be because it is people in the highest tax bracket who actually do most of the investing. The middle class seems to spend all of its tax cut. Investment increases income and, with a lower tax rate, tax-sheltered investments lose much of their appeal. If higher investment brings higher income, then although the absolute dollar amount one pays in taxes is higher, the absolute dollar amount kept is also higher, thus the taxable investment pays off. Investment also, naturally, increases employment. All of these reasons, I believe, are why the Treasury Department warned against tax increases at this time. If you grab an undergraduate intermediate economics textbook, it will outline the Laffer Curve and that will explain exactly how this tradeoff works. It's a short, understandable explaination. The bottom line is that the tax cuts are not to 'help out' any particular segment of the population - although that is the politically correct jargon. They are an enticement for private investment. Thus, the middle class certainly could personally use the tax cut more than the wealthier economic class (don't we all want more?) but the middle class also needs the wealthier class to invest to create more jobs and strengthen the financial markets. In the absence of private investment, unemployment will rise further, the government will have to continue to spend more to bolster the economy. But if government must spend to prevent massive unemployement, the government will have to either continue to increase the deficit or increase taxes. Since deficits have limits, tax increases will be inevitable and with fewer people employed, it will be more difficult to increase taxes. This is simple economics - it's to do with neither the republicans nor the democrats. It is why Krugman rejects keynesian economics as a model for today. There will be some lag between tax cut, investment and job creation. First, you have to receive the extra tax money, then you invest it in - say - a new business, then the business gets debt financing, a physical location and only then does it start employing people. We must remember that we have to remember that the tax cuts have not really been phased in yet - that will really start happening next year. I think anyone who has read my previous posts will be bored to tears by what I am about to say next, as I've said it 100 times (sorry, Pete Weis!). The middle class will do well to INVEST!! This will raise household wealth - and may very well eventually push you into the 'rich' category. Invest your tax cut, folks. Let's give 'the rich' some company. Emma, I disagree that we don't have enough help for small businesses. At least two of my friends and I have separately invested in our own businesses over the past year. Because we are truly small businesses, we are exempt from a lot of regulation and obligation. We also get a lot of tax breaks - writing off our home offices, computers, etc. We have all found that to be sufficient to build our businesses and begin to hire staff. Interestinly (and on a slightly separate note) if you measure unemployment only by payrolls, my friends and I are considered unemployed. I have more to say about taxes and democrats and republican plans but I will do it in a separate post right below this one for those who find it interesting but find this post way too long.

Subject: Can't soak the rich From: Econochick To: Econochick Date Posted: Sat, Apr 10, 2004 at 16:50:07 (EDT) Email Address: Not Provided Message: I think we have to separate political campaigning from economic realities. Many who are not 'rich' would like to soak the rich. After all, they have so much. Almost more than some believe they have a right to. By the way, if it is ill-gotten gain - like Bernie Ebbers', say - then they really don't have a right to it. But that's another issue. However, soaking the rich is a double edged sword. We could raise taxes on the rich. But the historical effect of that is that the rich will simply invest more in tax-sheltered securities like municipal bonds and will not invest in taxable ventures like partnerships and stocks, etc. This means that people who would like to start businesses will be starved of capital and people they would have employed would remain unemployed. Larger businesses will have no market in which to sell stocks and will be starved of the money they need to expand businesses and hire employees. Tax receipts would go down. So would employment We could close off tax shelters. But the tax advantaged investments, like muni bonds and tax deferred accounts like IRAs, are available to everyone and, so the middle class will also pay more in taxes (effectively). We could disallow tax advantages to the rich only. But the rich will simply invest abroad. We could close off the ability to invest abroad but then the other governments will likely retaliate by making it more difficult for their citizens to invest in our economy - and that would be bad. Finally, at the limit, we could 'force' the 'rich' to pay more and more and more of their income. But the rich didn't get rich by sitting at home and watching TV. Most of the 'rich' people I have met work 100 hour weeks. And I'm pretty certain that no one will work 100 hour weeks just to pay more taxes. They'll simply stop working to the point where they are paying, essentially, confiscatory taxes. And tax receipts will drop. So will employment. There's another thing to consider. The rich could just leave. Yep. Did you know that you can get a green card in the United States strictly on the basis of wealth? The amount is not enormous either. If I remember correctly, $250,000 in cash or invest $500,000 in a business. It may even be as high as $1,000,000. But, remember, we're talking about the wealthy here. Five years later you are elligible for citizenship. In fact, you can get citizenship in almost any country in the world based on wealth. And the wealthy are usually smart, educated, and highly motivated - that's how they got wealthy in the first place. They generally add to an economy and every government on earth would love to tax their wealth and invite them to invest and create more jobs and taxable income in their own countries. If the rich leave, we will definitely lose tax receipts and employment. Make no mistake, Mr. Kerry is no idiot - he understands this as well as Mr. Bush does. He also understands that less than 1% of the population is a number he can afford to piss off, so he can cry 'soak the rich, 'help' the middle class' in his campaign and get elected. But he also knows that, realistically, soaking the rich is not possible. He may be able to raise taxes on the wealthiest Americans - eventually. But he is not foolish enough to do it to the detriment of our economy. That's not going to win a re-election. My prediction is that taxes - particularly for the critical $200,000 and above crowd - will remain at the newly cut level until the economy recovers. Then congress will be asked by a democratic or a republican administration to vote in a tax increase for everyone, to pay off the deficit. It will probably be a heftier increase for the 'rich' than for the middle class. And the congress will pass that tax increase. And we will all still be belly-aching on this board :-)

Subject: Re: Can't soak the rich From: Grateful Uncle Thomas To: Econochick Date Posted: Sun, Apr 11, 2004 at 14:59:56 (EDT) Email Address: Not Provided Message: I have to agree with Econochick. The best way to ensure a stong, healthy economy (for the only people that matter - the rich) is to give the wealthy everything they want. Since civilization began the rich have paid little or no taxes, and the system has worked great. Do you know what GDP was in the Assyrian Empire or 7th century Gaul? Well, me neither, but let me tell you they had like thousands of oxen. And look at how good the economy is in third world countries where there are a few unimaginably wealthy people that pay virtually no taxes and an enormous number of poor people that can barely feed themselves. Everybody's happy, and the poor there don't have to wring their hands worrying that their oppressors may one day leave! And haven't you all read all of those personal accounts by slaves in the American South terrified that their masters might one day abandon them and they'd have nothing to do? Let me tell you they knew full well who created jobs in their economy. I for one wouldn't want to live with that kind of fear.

Subject: Soaking the rich From: Paul G. Brown To: Econochick Date Posted: Sat, Apr 10, 2004 at 17:29:52 (EDT) Email Address: Not Provided Message: Well, what if we just get 'em a little bit wet? 1. I'm not convinced by your arguments. Regarding investment choices, a rational economic agent would seek to maximize the returns on their investment. Sure Muni bonds are a tax shelter, but their rates of return *stink* relative to other investments. My 'back of the envelope' figuring suggests that fixed income assets should take up between 7% and 15% of a portfolio (to balance out risks) and that within that framework Muni's are a good idea because the income isn't taxed. But increasing the proportion of your portfolio in Muni's to reduce tax isn't a good income maximization tactic. And the historical evidence is pretty clear on this. In 1992, Clinton raised the marginal tax rates on the highest income bracket from 31% to 36%, while reducing taxes on 'lower' income groups. The result was an increase in treasury revenue, the beginnings of deficit reduction (which took 8 years to complete). 2. The mass migration of the rich. I'm not convinced by this either. I mean, where would they go? The US has been and remains an exemplar of social and financial stability. 3. On the Wealthy: The evidence I've seen suggests that 'the wealthy' don't necessarily work any harder than anyone else: but they spend differently. Another study suggests that a significant proportion of wealthy individuals (about 25%) simply inherited their wealth. (It's not clear, from this report, what proportion of those who 'owned or operated a business' built that business from the ground up as opposed to inherited or acquired the business). 4. I don't see that the next administration has any choice *but* to put tax rates on the highest income brackets back to where they were in 2000. We are running pell-mell towards a financial crisis as the size of the budget and current account deficits grow. An immediate, modest increase in government revenues, coupled with spending cuts to low priority programs (no moon/mars shot, no missile shield) would achieve this.

Subject: Re: Soaking the rich From: Pete Weis To: Paul G. Brown Date Posted: Sun, Apr 11, 2004 at 12:42:14 (EDT) Email Address: Not Provided Message: I still believe the benefits of 'good' fiscal policies are oversold once factors which lead to economic difficulties are well underway. On the other hand, 'bad' fiscal policies can add 'gasoline to the flames'. Conservatives say 'overtaxing' the wealthy saps the economy since it inhibits the wealthy from investing in business infrastructure and therefore the creation of jobs. But as Paul points out the Clinton administration increased the tax rate on the wealthy class and the main effect was a balanced budget with seemingly no negative economic effects. Recently the Bush administration reduces taxes on the wealthy and we still seem to be struggling. From my observations, when tough economic times get underway, the wealthiest tend to focus on protecting their wealth and any tax decreases are not invested in business infrastructure. Witness the record amount of insider selling measured by outfits like Thompson Firstcall. It makes sense - when you really don't believe or question whether consumption will hold up, why put your capital in risky additional infrastructure and additional hiring? On the other hand, those with a more liberal bent say increasing government spending and getting the revenues to do so by increased taxes on the wealthy will turn things around. I tend to believe this is where things are headed if our economy has more trouble ahead. US Governments tend to react to political pressure and when hard times turn up, the majority of voters demand help from their government. I suppose this is the way it should be since it lends itself to stability. During the Great Depression there was alot of talk about growing revolutionary threats - Studs Terkel's 'Hard Times' gives a great account of the thirties through the eyes of those who experienced it. Whether it was true or not, Terkel's book documents the view of many that the Roosevelt's responsiveness prevented any potential massive unrest.

Subject: Rising Damp for the Rich! From: Paul G. Brown To: Pete Weis Date Posted: Sun, Apr 11, 2004 at 14:59:33 (EDT) Email Address: Not Provided Message: You note: 'On the other hand, those with a more liberal bent say increasing government spending and getting the revenues to do so by increased taxes on the wealthy will turn things around.' I suggest that those of a more 'liberal bent' argue for two things. First, they would say that -- per Keynes -- in times of economic hardship state policy can be helpful. In practice, this means running short term deficits, and that this deficit spending or tax policy ought to be appropriate to the circumstances. It should either stimulate consumption (in the case of an output gap) or else be used for investment in public infrastructure. And second, liberals hold the general belief -- per Adam Smith -- that redistributive tax systems, tax frameworks that address income inequality by taxing the better off at higher rates than the less well off, have medium to long run social benefit. Anyway, the idea isn't that 'taxing the wealthy will turn things around'. It's that, given our present circumstances, public investment and stimulating demand are desirable policies, but to forestall long term disaster (unsustainable public debt) we need to increase revenues in the near term. And I tend to agree with your point that in general, the best thing for a state to do is to stay the hell out of the way, economically speaking. We can argue about the degree of redistribution in the tax system, and spending priorities. But overall, keeping G within some relatively small overall proportion of economic activity and focussing on increasing the size of the pie is 'best'. (Of course, the conservative critique of this plan is that governments are habitually incapable of containing their spending. And there is some merit to this objection. . )

Subject: state deficits From: Econochick To: Paul G. Brown Date Posted: Mon, Apr 12, 2004 at 13:20:56 (EDT) Email Address: Not Provided Message: The problem with states is that they can't run deficits - by law.

Subject: States can run Deficits From: Terri To: Econochick Date Posted: Mon, Apr 12, 2004 at 16:35:11 (EDT) Email Address: Not Provided Message: As long as they can cover with bond issues.

Subject: Re: States can run Deficits From: Econochick To: Terri Date Posted: Mon, Apr 12, 2004 at 17:07:34 (EDT) Email Address: Not Provided Message: Is that true for every state, Terri? I was under the impression that some (a majority, I believe) state laws prohibit deficit spending.

Subject: Re: state deficits From: Paul G. Brown To: Econochick Date Posted: Mon, Apr 12, 2004 at 16:21:33 (EDT) Email Address: Not Provided Message: Tell that to us Californians! $7 billion in the hole and counting. (Not an argument: your point is well taken - state governments are unable to engage in activist fiscal policy.)

Subject: Yikes! From: Econochick To: Paul G. Brown Date Posted: Mon, Apr 12, 2004 at 17:11:37 (EDT) Email Address: Not Provided Message: LOL, Paul. You poor guys in California have bee through a lot in the past couple of decades. Real Estate collapse in the 80's, Orange county derivatives, energy trading. And I've said nothing about mudslides, earthquakes and forrest fires!! Oh well, over here in NYC the terrorist attack wasn't much fun either. So, I guess we just can't win. Hope for the best, eh?!

Subject: Re: Rising Damp for the Rich! From: Pete Weis To: Paul G. Brown Date Posted: Sun, Apr 11, 2004 at 22:21:12 (EDT) Email Address: Not Provided Message: My concern: We keep talking about short term deficits and how we must accept them until they are no longer needed, but when do we finally admit that after about 30 years these 'short term' deficits are really long term. And if our economy continues to falter when it comes to delivering better revenues, all the while our federal expenses are rising, when do we admit it's a serious problem - when our deficit reaches 6%, 7% of GDP or higher?

Subject: Re: Rising Damp for the Rich! From: Econochick To: Pete Weis Date Posted: Mon, Apr 12, 2004 at 13:23:53 (EDT) Email Address: Not Provided Message: Pete, the idea is to use a fluctuating tax rate to increase investment, which increases tax revenue. But that increase may come with a lag. You then raise the tax rate to pay down the deficit without choking off the economy. Will your very valid fears be realized? Wish we could know for sure.

Subject: Re: Soaking the rich From: Econochick To: Pete Weis Date Posted: Sun, Apr 11, 2004 at 13:24:52 (EDT) Email Address: Not Provided Message: Pete, We are still struggling because a.) the majority of tax cuts will not take effect until this year as they are phased in and b.) there is a lag as investment turns into job creation. Clinton was able to raise taxes successfully because the economy was doing well. Wealth protection is not an issue when return expectations are high. There is precedent for tax cuts spurring investment and increases in tax receipts. The most recent (on a Federal level, anyway) is the 1980's - see my post above. But I know studies were also done in the Kennedy administration as well. There may be others but those are the ones I know of offhand. Increased Government spending without increasing tax receipts or deficits is a mathematical impossibility. Again, it is the timing of increases and decreases that is important. And I should remind folks that likening this recession to the depression is insane. One third of the country was out of work then and investment stopped. Enter Keynes.

Subject: Re: Soaking the rich From: E To: Econochick Date Posted: Sun, Apr 11, 2004 at 23:57:13 (EDT) Email Address: Not Provided Message: The Tax-Cut Con 1. The Cartoon and the Reality Bruce Tinsley's comic strip, ''Mallard Fillmore,'' is, he says, ''for the average person out there: the forgotten American taxpayer who's sick of the liberal media.'' In June, that forgotten taxpayer made an appearance in the strip, attacking his TV set with a baseball bat and yelling: ''I can't afford to send my kids to college, or even take 'em out of their substandard public school, because the federal, state and local governments take more than 50 percent of my income in taxes. And then the guy on the news asks with a straight face whether or not we can 'afford' tax cuts.'' But that's just a cartoon. Meanwhile, Bob Riley has to face the reality. Riley knows all about substandard public schools. He's the governor of Alabama, which ranks near the bottom of the nation in both spending per pupil and educational achievement. The state has also neglected other public services -- for example, 28,000 inmates are held in a prison system built for 12,000. And thanks in part to a lack of health care, it has the second-highest infant mortality in the nation. When he was a member of Congress, Riley, a Republican, was a staunch supporter of tax cuts. Faced with a fiscal crisis in his state, however, he seems to have had an epiphany. He decided that it was impossible to balance Alabama's budget without a significant tax increase. And that, apparently, led him to reconsider everything. ''The largest tax increase in state history just to maintain the status quo?'' he asked. ''I don't think so.'' Instead, Riley proposed a wholesale restructuring of the state's tax system: reducing taxes on the poor and middle class while raising them on corporations and the rich and increasing overall tax receipts enough to pay for a big increase in education spending. You might call it a New Deal for Alabama. Nobody likes paying taxes, and no doubt some Americans are as angry about their taxes as Tinsley's imaginary character. But most Americans also care a lot about the things taxes pay for. All politicians say they're for public education; almost all of them also say they support a strong national defense, maintaining Social Security and, if anything, expanding the coverage of Medicare. When the ''guy on the news'' asks whether we can afford a tax cut, he's asking whether, after yet another tax cut goes through, there will be enough money to pay for those things. And the answer is no. But it's very difficult to get that answer across in modern American politics, which has been dominated for 25 years by a crusade against taxes. I don't use the word ''crusade'' lightly. The advocates of tax cuts are relentless, even fanatical. An indication of the movement's fervor -- and of its political power -- came during the Iraq war. War is expensive and is almost always accompanied by tax increases. But not in 2003. ''Nothing is more important in the face of a war,'' declared Tom DeLay, the House majority leader, ''than cutting taxes.'' And sure enough, taxes were cut, not just in a time of war but also in the face of record budget deficits. Nor will it be easy to reverse those tax cuts: the tax-cut movement has convinced many Americans -- like Tinsley -- that everybody still pays far too much in taxes. A result of the tax-cut crusade is that there is now a fundamental mismatch between the benefits Americans expect to receive from the government and the revenues government collect. This mismatch is already having profound effects at the state and local levels: teachers and policemen are being laid off and children are being denied health insurance. The federal government can mask its problems for a while, by running huge budget deficits, but it, too, will eventually have to decide whether to cut services or raise taxes. And we are not talking about minor policy adjustments. If taxes stay as low as they are now, government as we know it cannot be maintained. In particular, Social Security will have to become far less generous; Medicare will no longer be able to guarantee comprehensive medical care to older Americans; Medicaid will no longer provide basic medical care to the poor. How did we reach this point? What are the origins of the antitax crusade? And where is it taking us? To answer these questions, we will have to look both at who the antitax crusaders are and at the evidence on what tax cuts do to the budget and the economy. But first, let's set the stage by taking a look at the current state of taxation in America. 2. How High Are Our Taxes? The reason Tinsley's comic strip about the angry taxpayer caught my eye was, of course, that the numbers were all wrong. Very few Americans pay as much as 50 percent of their income in taxes; on average, families near the middle of the income distribution pay only about half that percentage in federal, state and local taxes combined. In fact, though most Americans feel that they pay too much in taxes, they get off quite lightly compared with the citizens of other advanced countries. Furthermore, for most Americans tax rates probably haven't risen for a generation. And a few Americans -- namely those with high incomes -- face much lower taxes than they did a generation ago. To assess trends in the overall level of taxes and to compare taxation across countries, economists usually look first at the ratio of taxes to gross domestic product, the total value of output produced in the country. In the United States, all taxes -- federal, state and local -- reached a peak of 29.6 percent of G.D.P. in 2000. That number was, however, swollen by taxes on capital gains during the stock-market bubble. By 2002, the tax take was down to 26.3 percent of G.D.P., and all indications are that it will be lower still this year and next. This is a low number compared with almost every other advanced country. In 1999, Canada collected 38.2 percent of G.D.P. in taxes, France collected 45.8 percent and Sweden, 52.2 percent. Still, aren't taxes much higher than they used to be? Not if we're looking back over the past 30 years. As a share of G.D.P., federal taxes are currently at their lowest point since the Eisenhower administration. State and local taxes rose substantially between 1960 and the early 1970's, but have been roughly stable since then. Aside from the capital gains taxes paid during the bubble years, the share of income Americans pay in taxes has been flat since Richard Nixon was president. Of course, overall levels of taxation don't necessarily tell you how heavily particular individuals and families are taxed. As it turns out, however, middle-income Americans, like the country as a whole, haven't seen much change in their overall taxes over the past 30 years. On average, families in the middle of the income distribution find themselves paying about 26 percent of their income in taxes today. This number hasn't changed significantly since 1989, and though hard data are lacking, it probably hasn't changed much since 1970. Meanwhile, wealthy Americans have seen a sharp drop in their tax burden. The top tax rate -- the income-tax rate on the highest bracket -- is now 35 percent, half what it was in the 1970's. With the exception of a brief period between 1988 and 1993, that's the lowest rate since 1932. Other taxes that, directly or indirectly, bear mainly on the very affluent have also been cut sharply. The effective tax rate on corporate profits has been cut in half since the 1960's. The 2001 tax cut phases out the inheritance tax, which is overwhelmingly a tax on the very wealthy: in 1999, only 2 percent of estates paid any tax, and half the tax was paid by only 3,300 estates worth more than $5 million. The 2003 tax act sharply cuts taxes on dividend income, another boon to the very well off. By the time the Bush tax cuts have taken full effect, people with really high incomes will face their lowest average tax rate since the Hoover administration. So here's the picture: Americans pay low taxes by international standards. Most people's taxes haven't gone up in the past generation; the wealthy have had their taxes cut to levels not seen since before the New Deal. Even before the latest round of tax cuts, when compared with citizens of other advanced nations or compared with Americans a generation ago, we had nothing to complain about -- and those with high incomes now have a lot to celebrate. Yet a significant number of Americans rage against taxes, and the party that controls all three branches of the federal government has made tax cuts its supreme priority. Why? 3. Supply-Siders, Starve-the-Beasters and Lucky Duckies It is often hard to pin down what antitax crusaders are trying to achieve. The reason is not, or not only, that they are disingenuous about their motives -- though as we will see, disingenuity has become a hallmark of the movement in recent years. Rather, the fuzziness comes from the fact that today's antitax movement moves back and forth between two doctrines. Both doctrines favor the same thing: big tax cuts for people with high incomes. But they favor it for different reasons. One of those doctrines has become famous under the name ''supply-side economics.'' It's the view that the government can cut taxes without severe cuts in public spending. The other doctrine is often referred to as ''starving the beast,'' a phrase coined by David Stockman, Ronald Reagan's budget director. It's the view that taxes should be cut precisely in order to force severe cuts in public spending. Supply-side economics is the friendly, attractive face of the tax-cut movement. But starve-the-beast is where the power lies. The starting point of supply-side economics is an assertion that no economist would dispute: taxes reduce the incentive to work, save and invest. A businessman who knows that 70 cents of every extra dollar he makes will go to the I.R.S. is less willing to make the effort to earn that extra dollar than if he knows that the I.R.S. will take only 35 cents. So reducing tax rates will, other things being the same, spur the economy. This much isn't controversial. But the government must pay its bills. So the standard view of economists is that if you want to reduce the burden of taxes, you must explain what government programs you want to cut as part of the deal. There's no free lunch. What the supply-siders argued, however, was that there was a free lunch. Cutting marginal rates, they insisted, would lead to such a large increase in gross domestic product that it wouldn't be necessary to come up with offsetting spending cuts. What supply-side economists say, in other words, is, ''Don't worry, be happy and cut taxes.'' And when they say cut taxes, they mean taxes on the affluent: reducing the top marginal rate means that the biggest tax cuts go to people in the highest tax brackets. The other camp in the tax-cut crusade actually welcomes the revenue losses from tax cuts. Its most visible spokesman today is Grover Norquist, president of Americans for Tax Reform, who once told National Public Radio: ''I don't want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub.'' And the way to get it down to that size is to starve it of revenue. ''The goal is reducing the size and scope of government by draining its lifeblood,'' Norquist told U.S. News & World Report. What does ''reducing the size and scope of government'' mean? Tax-cut proponents are usually vague about the details. But the Heritage Foundation, ideological headquarters for the movement, has made it pretty clear. Edwin Feulner, the foundation's president, uses ''New Deal'' and ''Great Society'' as terms of abuse, implying that he and his organization want to do away with the institutions Franklin Roosevelt and Lyndon Johnson created. That means Social Security, Medicare, Medicaid -- most of what gives citizens of the United States a safety net against economic misfortune. (cont.)

Subject: Re: Soaking the rich From: E To: E Date Posted: Sun, Apr 11, 2004 at 23:58:38 (EDT) Email Address: Not Provided Message: The starve-the-beast doctrine is now firmly within the conservative mainstream. George W. Bush himself seemed to endorse the doctrine as the budget surplus evaporated: in August 2001 he called the disappearing surplus ''incredibly positive news'' because it would put Congress in a ''fiscal straitjacket.'' Like supply-siders, starve-the-beasters favor tax cuts mainly for people with high incomes. That is partly because, like supply-siders, they emphasize the incentive effects of cutting the top marginal rate; they just don't believe that those incentive effects are big enough that tax cuts pay for themselves. But they have another reason for cutting taxes mainly on the rich, which has become known as the ''lucky ducky'' argument. Here's how the argument runs: to starve the beast, you must not only deny funds to the government; you must make voters hate the government. There's a danger that working-class families might see government as their friend: because their incomes are low, they don't pay much in taxes, while they benefit from public spending. So in starving the beast, you must take care not to cut taxes on these ''lucky duckies.'' (Yes, that's what The Wall Street Journal called them in a famous editorial.) In fact, if possible, you must raise taxes on working-class Americans in order, as The Journal said, to get their ''blood boiling with tax rage.'' So the tax-cut crusade has two faces. Smiling supply-siders say that tax cuts are all gain, no pain; scowling starve-the-beasters believe that inflicting pain is not just necessary but also desirable. Is the alliance between these two groups a marriage of convenience? Not exactly. It would be more accurate to say that the starve-the-beasters hired the supply-siders -- indeed, created them -- because they found their naive optimism useful. A look at who the supply-siders are and how they came to prominence tells the story. The supply-side movement likes to present itself as a school of economic thought like Keynesianism or monetarism -- that is, as a set of scholarly ideas that made their way, as such ideas do, into political discussion. But the reality is quite different. Supply-side economics was a political doctrine from Day 1; it emerged in the pages of political magazines, not professional economics journals. That is not to deny that many professional economists favor tax cuts. But they almost always turn out to be starve-the-beasters, not supply-siders. And they often secretly -- or sometimes not so secretly -- hold supply-siders in contempt. N. Gregory Mankiw, now chairman of George W. Bush's Council of Economic Advisers, is definitely a friend to tax cuts; but in the first edition of his economic-principles textbook, he described Ronald Reagan's supply-side advisers as ''charlatans and cranks.'' It is not that the professionals refuse to consider supply-side ideas; rather, they have looked at them and found them wanting. A conspicuous example came earlier this year when the Congressional Budget Office tried to evaluate the growth effects of the Bush administration's proposed tax cuts. The budget office's new head, Douglas Holtz-Eakin, is a conservative economist who was handpicked for his job by the administration. But his conclusion was that unless the revenue losses from the proposed tax cuts were offset by spending cuts, the resulting deficits would be a drag on growth, quite likely to outweigh any supply-side effects. But if the professionals regard the supply-siders with disdain, who employs these people? The answer is that since the 1970's almost all of the prominent supply-siders have been aides to conservative politicians, writers at conservative publications like National Review, fellows at conservative policy centers like Heritage or economists at private companies with strong Republican connections. Loosely speaking, that is, supply-siders work for the vast right-wing conspiracy. What gives supply-side economics influence is its connection with a powerful network of institutions that want to shrink the government and see tax cuts as a way to achieve that goal. Supply-side economics is a feel-good cover story for a political movement with a much harder-nosed agenda. This isn't just speculation. Irving Kristol, in his role as co-editor of The Public Interest, was arguably the single most important proponent of supply-side economics. But years later, he suggested that he himself wasn't all that persuaded by the doctrine: ''I was not certain of its economic merits but quickly saw its political possibilities.'' Writing in 1995, he explained that his real aim was to shrink the government and that tax cuts were a means to that end: ''The task, as I saw it, was to create a new majority, which evidently would mean a conservative majority, which came to mean, in turn, a Republican majority -- so political effectiveness was the priority, not the accounting deficiencies of government.'' In effect, what Kristol said in 1995 was that he and his associates set out to deceive the American public. They sold tax cuts on the pretense that they would be painless, when they themselves believed that it would be necessary to slash public spending in order to make room for those cuts. But one supposes that the response would be that the end justified the means -- that the tax cuts did benefit all Americans because they led to faster economic growth. Did they? 4. From Reaganomics to Clintonomics Ronald Reagan put supply-side theory into practice with his 1981 tax cut. The tax cuts were modest for middle-class families but very large for the well-off. Between 1979 and 1983, according to Congressional Budget Office estimates, the average federal tax rate on the top 1 percent of families fell from 37 to 27.7 percent. So did the tax cuts promote economic growth? You might think that all we have to do is look at how the economy performed. But it's not that simple, because different observers read different things from Reagan's economic record. Here's how tax-cut advocates look at it: after a deep slump between 1979 and 1982, the U.S. economy began growing rapidly. Between 1982 and 1989 (the first year of the first George Bush's presidency), the economy grew at an average annual rate of 4.2 percent. That's a lot better than the growth rate of the economy in the late 1970's, and supply-siders claim that these ''Seven Fat Years'' (the title of a book by Robert L. Bartley, the longtime editor of The Wall Street Journal's editorial page) prove the success of Reagan's 1981 tax cut. But skeptics say that rapid growth after 1982 proves nothing: a severe recession is usually followed by a period of fast growth, as unemployed workers and factories are brought back on line. The test of tax cuts as a spur to economic growth is whether they produced more than an ordinary business cycle recovery. Once the economy was back to full employment, was it bigger than you would otherwise have expected? And there Reagan fails the test: between 1979, when the big slump began, and 1989, when the economy finally achieved more or less full employment again, the growth rate was 3 percent, the same as the growth rate between the two previous business cycle peaks in 1973 and 1979. Or to put it another way, by the late 1980's the U.S. economy was about where you would have expected it to be, given the trend in the 1970's. Nothing in the data suggests a supply-side revolution. Does this mean that the Reagan tax cuts had no effect? Of course not. Those tax cuts, combined with increased military spending, provided a good old-fashioned Keynesian boost to demand. And this boost was one factor in the rapid recovery from recession that developed at the end of 1982, though probably not as important as the rapid expansion of the money supply that began in the summer of that year. But the supposed supply-side effects are invisible in the data. While the Reagan tax cuts didn't produce any visible supply-side gains, they did lead to large budget deficits. From the point of view of most economists, this was a bad thing. But for starve-the-beast tax-cutters, deficits are potentially a good thing, because they force the government to shrink. So did Reagan's deficits shrink the beast? A casual glance at the data might suggest not: federal spending as a share of gross domestic product was actually slightly higher at the end of the 1980's than it was at the end of the 1970's. But that number includes both defense spending and ''entitlements,'' mainly Social Security and Medicare, whose growth is automatic unless Congress votes to cut benefits. What's left is a grab bag known as domestic discretionary spending, including everything from courts and national parks to environmental cleanups and education. And domestic discretionary spending fell from 4.5 percent of G.D.P. in 1981 to 3.2 percent in 1988. But that's probably about as far as any president can shrink domestic discretionary spending. And because Reagan couldn't shrink the belly of the beast, entitlements, he couldn't find enough domestic spending cuts to offset his military spending increases and tax cuts. The federal budget went into persistent, alarming, deficit. In response to these deficits, George Bush the elder went back on his ''read my lips'' pledge and raised taxes. Bill Clinton raised them further. And thereby hangs a tale. For Clinton did exactly the opposite of what supply-side economics said you should do: he raised the marginal rate on high-income taxpayers. In 1989, the top 1 percent of families paid, on average, only 28.9 percent of their income in federal taxes; by 1995, that share was up to 36.1 percent. Conservatives confidently awaited a disaster -- but it failed to materialize. In fact, the economy grew at a reasonable pace through Clinton's first term, while the deficit and the unemployment rate went steadily down. And then the news got even better: unemployment fell to its lowest level in decades without causing inflation, while productivity growth accelerated to rates not seen since the 1960's. And the budget deficit turned into an impressive surplus. Tax-cut advocates had claimed the Reagan years as proof of their doctrine's correctness; as we have seen, those claims wilt under close examination. But the Clinton years posed a much greater challenge: here was a president who sharply raised the marginal tax rate on high-income taxpayers, the very rate that the tax-cut movement cares most about. And instead of presiding over an economic disaster, he presided over an economic miracle. Let's be clear: very few economists think that Clinton's policies were primarily responsible for that miracle. For the most part, the Clinton-era surge probably reflected the maturing of information technology: businesses finally figured out how to make effective use of computers, and the resulting surge in productivity drove the economy forward. But the fact that America's best growth in a generation took place after the government did exactly the opposite of what tax-cutters advocate was a body blow to their doctrine. They tried to make the best of the situation. The good economy of the late 1990's, ardent tax-cutters insisted, was caused by the 1981 tax cut. Early in 2000, Lawrence Kudlow and Stephen Moore, prominent supply-siders, published an article titled ''It's the Reagan Economy, Stupid.'' But anyone who thought about the lags involved found this implausible -- indeed, hilarious. If the tax-cut movement attributed the booming economy of 1999 to a tax cut Reagan pushed through 18 years earlier, why didn't they attribute the economic boom of 1983 and 1984 -- Reagan's ''morning in America'' -- to whatever Lyndon Johnson was doing in 1965 and 1966? By the end of the 1990's, in other words, supply-side economics had become something of a laughingstock, and the whole case for tax cuts as a route to economic growth was looking pretty shaky. But the tax-cut crusade was nonetheless, it turned out, poised for its biggest political victories yet. How did that happen? (cont.) http://www.pkarchive.org/economy/TaxCutCon.html

Subject: Re: Soaking the rich From: Pete Weis To: Econochick Date Posted: Sun, Apr 11, 2004 at 22:32:09 (EDT) Email Address: Not Provided Message: Mostly agree with you on the Clinton years. Believe the tax incentives are poorly targeted and have marginal benefit. I believe mortgage refinancing has been far more effective than tax cuts when it comes to economic support. Unfortunately that has mostly come to an end.

Subject: Re: Soaking the rich From: Econochick To: Pete Weis Date Posted: Sun, Apr 11, 2004 at 13:24:19 (EDT) Email Address: Not Provided Message: Pete, We are still struggling because a.) the majority of tax cuts will not take effect until this year as they are phased in and b.) there is a lag as investment turns into job creation. Clinton was able to raise taxes successfully because the economy was doing well. Wealth protection is not an issue when return expectations are high. There is precedent for tax cuts spurring investment and increases in tax receipts. The most recent (on a Federal level, anyway) is the 1980's - see my post above. But I know studies were also done in the Kennedy administration as well. There may be others but those are the ones I know of offhand. Increased Government spending without increasing tax receipts or deficits is a mathematical impossibility. Again, it is the timing of increases and decreases that is important. And I should remind folks that likening this recession to the depression is insane. One third of the country was out of work then and investment stopped. Enter Keynes.

Subject: sorry - posting problem From: Econochick To: Econochick Date Posted: Sun, Apr 11, 2004 at 13:27:06 (EDT) Email Address: Not Provided Message:

Subject: Re: Soaking the rich From: Econochick To: Paul G. Brown Date Posted: Sun, Apr 11, 2004 at 12:03:26 (EDT) Email Address: Not Provided Message: Paul, your back of the envelope calculations for percentage of portfolio in bonds is meaningless. This is because portfolios are highly individual and depend on a person's particular time horizon, liquidity needs, risk tolerance and financial goals. Muni bonds (as an example) become much more attractive as the tax rate goes up - particularly triple exempt bonds like NY munis. The return on investment calculated as yield(1-tax rate). The higher the tax rate, the lower the return. The long-term return on stocks is 12% (source: Berra). The return on munis is around 5-6%. In NYC (for example), the all-in highest tax rate is close to 50%. With a 6% yield on muni you make 6% after tax because it is not taxed. I'm going to assume that you make the average return on stocks in any given year because you never know how much you will make, thus this is a good number to use - especially since we assume that investments are long term. If I make my 12% on stocks, I pay 50% of it in taxes, thus only yielding the same 6% I make on the muni. But with the muni I take a bond risk, which is lower than the stock market risk. So, I can effectively make a stock market return with bond risk. Now imagine the attractiveness of muni bonds with an even HIGHER tax rate. But you make a good point - when taxes are raised in a strong economy, tax receipts do not necessarily go down. They, in fact, will probably go up. This was my point at the bottom of my email. In a good economy, the expectations are higher and become 'worth' the taxabel investment. So, even at a 55% tax rate, if I expect to make 30% in the stock market (or some other risky investment), I will go for it and pay the tax because my expected after tax pay-off is 13.5% - a lot more than my 6% muni bond will pay. The point was that the opportunity to increase taxes will come with a rebound in the economy when expectations will increase. As for the rich leaving - there is plenty of precedent. In European countries like Sweden, where they have essentially confiscatory taxes, the wealthy regularly immigrate. Sweden has had to change its tax system. You have not seen such immigration from America historically because a 36% tax rate is hardly a 'soaking'. But last year the highest Federal tax rate was 39%. In the past, when the highest tax rate was that high a reduction spurred investment. My point was that the fluctuation in the tax rate is useful to spurr growth. The cut doesn't need to be permanent. Perhaps I shouldn't have stated to strongly that every rich person works 100 weeks. Of course not every rich person works 100 weeks. I worked on Wall Street, so all the people I knew who were rich (and because NY is so expensive, you weren't 'rich' until you made at least $1 mill annually - and that was very uncommon, despite what the rest of the world thinks) worked crazy crazy hours. Literally 100 hours per week. But the wealthy do take more risks like starting their own businesses. 80% (roughly) of businesses fail and businesses suck all your time. But risk and reward are highly correlated, thus the higher the risk, the higher the potential reward. As far as inheriting....well, I would think that you would want your kids to have the fruits of you labour. You don't work to better the lives of strangers. You work for your family and the government should not be able to soak you posthumously by soaking your heirs. But I just realized that that's a complicated issue to do with death taxes and nothing to do with income taxes - which is the current discussion. Finally, I will reiterate that I agree that taxes will go back up. And that's fine. I'm just addressing the timing issue. Lower taxes now, get the 'rich' to invest, once they've helped the economy along, raise the taxes. That's what the tax cuts are for. 'Coz I gotta tell ya', for someone making $500,000 a year in Atlanta, the extra few grand is not making much of a difference to that person's personal life. And because it's not making much of a difference in his spending habits, it's not much of an enitcement to vote one way or another. But it does give them extra dough to invest, which is historically what they've done. And that's good for the rest of us when, as happened in 2000, capital investment declined significantly. One final point (I love to beat this lame horse) - the middle class should save (aka invest) its tax cut. That's how we will become wealthy. Part of the reason that the rich may not, on average, work a whole lot more is that some middle-class people become wealthy through good saving habits.

Subject: Re: Soaking the rich From: Paul G. Brown To: Econochick Date Posted: Sun, Apr 11, 2004 at 15:45:18 (EDT) Email Address: Not Provided Message: Econochick - you seem to be caught in a couple of inconsistencies. Allowing that the tax rate in the highest bracket is 39% (which I can't find anywhere, that's a long ways south of 50% you use in your own 'back of the envelope' numbers (and a long way from what the New York state income tax schedule has it at. Plus, I can see MUNI funds yielding returns like the ones you cite, but the same data reveals that the asset value of the fund has declined by 2% over the same period, making this a poor choice of investment (though a reasonable place to park money if income is your concern). So increasing the top maginal rate to 39% from 35% (we are talking about federal tax rates) would have little effect on decisions about where to plonk savings. As you say, increasing the top marginal to, say, 60%, it might have some impact but that's not what we're talking about. Besides, that top rate kicks in at $300K. And according to the most recent census report (scroll down to Table A-3 on page 25) that's a lot fewer than 5% of households. As for Swedish Tax rates and its effects on emmigration, I would love to see your data. Swedish emmigration in modern times is practically non-existant. In fact, immigration is a big political hot potatoe (oops - chanelling Dan Quayle here). (See CIA World Factbook). My understanding of the situation is that many Scandinavian countries have been forced to adjust their welfare state structure as a consequence of demographics. There was a Krugman piece about just how economically stable and dynamic these nations are. (From the piece: Sweden's governmnent collects 63% of GDP in tax revenue!)

Subject: Read carefully From: Econochick To: Paul G. Brown Date Posted: Mon, Apr 12, 2004 at 13:19:03 (EDT) Email Address: Not Provided Message: Paul, You didn't read my post carefully enough. The nearly 50% tax rate is Federal State Local for the highest tax bracket. That's what I mean by 'all in'. You won't find that on a tax schedule because it is the sum of all the taxes that you pay on taxable income. The 39% tax rate is a fact. That has dropped to 35% for 2003 - these are the highest FEDERAL tax brackets. You can look it up on the IRS website or ask a CPA. Muni bond yields are different in different places, etc. etc. They go up and down in value like all assets but their variance (risk) is low compared to the variance (risk) of stocks. Thus, they are good place to park money if you are concerned about taxes. Remember, your opportunity cost of taxable investments is what you are weighing in making the muni bond decision. Tax rate is the biggest factor in that decision. See my previous post for calculations. You are 100% correct about only 5% of the population being in the top tax bracket. But then, that is the 'rich' that we are talking about here. That 5% of the population is responsible for 68% of total annual income tax receipts - this info is available on the census and the irs websites. If you have an exodus out of the top 5% of earners, you're not going to have mass immigration but you will have key tax payers leaving the country. This will put a greater burden on middle-income tax payers. But, let me make myself clear - I'm not talking about immigration in the face of a 30 federal tax rate. I'm talking about 'soaking'. That is if we continue to demand that more and more of the tax burden is offloaded on the highest earners - 30% goes to 40% then 50% , etc. By that point all-in taxes will be more than half of people's income and they will either stop reaching for higher highs (a drag on the economy) or they will just take their dough and leave. The fact is that they CAN go live in the Caymen Islands on their capital. But you and I are working stiffs who really can't do that. Part of the changing demographics in scandanavian countries was the change in work habits in response to taxation being too high and not yielding enough tax revenue. You can look up the research behind the Laffer Curve as it will give you all that information. In Scandanavia, the biggest problem was that taxes were too progressive and people just stopped bothering to take the risk of investing in businesses (owning a business is bloodsucking, if you've ever done it!) just to pay a larger and larger percentage of earnings in taxes. Also, Paul, I think we're just crossing swords for the sake of it here. I'm not saying that the tax system should not be progressive. I'm just saying that because of the tax cuts in the 1980's we got a rather large boost in tax receipts. This indicates that the wealthiest 5% were on the declining part of the laffer curve and were much more willing to invest in taxable investments when the tax rate was lower. By the time we raised taxes on 'em, the expectations of returns were so high (because the economy had recovered so much) that the higher tax rate didn't discourage them. Thus, raising and lowering the tax rate is a fairly effective tool for stimulating supply-side. Our economy can't be all demand-side. I mean, I don't think anyone here is arguing for a command economy. There has never been an example of one that works. Also, that point led into my other point which is that Kerry is not going to hike up taxes on the wealthy all at once or hike em up and lower taxes for the middle. And we shouldn't want him to! If we have another effect like the 1980's that's a good thing!! He's likely hoping that the economy will recover by the time he hits office and starts proposing things to congress. But as a political candidate, he has to take the opposite side of Bush. I'm just saying we shouldn't confuse emotional politics with rational running of the economy. The more I read about their platforms, the more they look alike to me - regarding economics. I'm infinitely less thrilled with the social laws recently passed during the Bush administration - but that's not for this forum.

Subject: Re: Can't soak the rich From: Hehe To: Econochick Date Posted: Sat, Apr 10, 2004 at 17:01:33 (EDT) Email Address: Not Provided Message: Thanks, I needed a good laugh.

Subject: CHRIS MATTHEWS From: SHARON POWERS To: All Date Posted: Wed, Apr 07, 2004 at 20:29:32 (EDT) Email Address: SHARONPOWER2004@YAHOO.COM Message: Wasn't Mr. Krugman supposed to be on harball 4/07/04???

Subject: The Bush jobs chasm From: B.B. To: All Date Posted: Wed, Apr 07, 2004 at 17:17:17 (EDT) Email Address: Not Provided Message: The Bush jobs chasm All the March payroll numbers tell us is that the White House knows the date of the election. By James K. Galbraith April 6, 2004 | The fit of ejaculatio praecox to which the commentariat abandoned itself when payroll job growth hit 308,000 last week was perhaps understandable, in view of the terrible frustrations it had suffered for so many, many months before. So many bright hopes and expectations. So many disappointments. But what of the future? Do we now accept the conclusion, to which our national teenager President Bush immediately jumped, that 'the economy is strong and getting stronger'? Or can we perhaps take a minute to put matters into perspective? The fact is, March 2004 was only one good month. How many more would we need just like it to get back to where we were four years ago? Here's a quick and dirty calculation. Assume population growth at its average rate since 1976. Set a target baseline payroll -- an employment-to-population ratio of 62 percent, the prosperous level that was exceeded almost continuously from June 1999 to August 2000. If we average 308,000 new payroll jobs every month from now on, how long will it take to break that June 1999 threshold once again? Answer: Four more years. It wouldn't happen until March 2008. And the first time payroll growth falls below 308,000 per month, then either some other month will have to make up the shortfall, or else the date will slip. Not that 308,000 is such a large number. Want to know how many times monthly payroll employment gains hit the 300,000 mark under Clinton and Gore? Twenty-four. That's one month in every four. Numbers like that didn't make the front pages under Clinton. But this is the first time it's happened under Bush. In fact, it's the first time payroll gains under Bush passed the 200,000 mark. The previous high under Bush? 159,000. So 308,000 is almost twice his personal best. If you think this expansion is going to continue at this pace for four more years, in the face of what will soon enough be rising interest rates, huge deficits and the pressure to cut them, a deflating housing bubble and, most of all, the proven indifference of Team Bush to jobs policy, then frankly you haven't been paying attention. Four more months -- that I'd believe. But they haven't got a clue what to do after that. All the March payroll numbers tell us, in a nutshell, is that the White House knows the date of the election.

Subject: We Have a Labor Problem From: Jennifer To: B.B. Date Posted: Wed, Apr 07, 2004 at 17:39:36 (EDT) Email Address: Not Provided Message: We have a serious job creation and wage and benefit problem for middle class households. We have not really made a dent to a solution.

Subject: Insourcing - a From: Emma To: All Date Posted: Wed, Apr 07, 2004 at 15:04:30 (EDT) Email Address: Not Provided Message: http://www.epinet.org/content.cfm/webfeatures_snapshots_04062004 'Insourcing' is not the answer It has been suggested that U.S. jobs lost to outsourcing are offset by the millions of American workers hired by foreign companies. In fact, this insourcing has resulted in the loss of 2.78 million U.S. jobs in foreign-owned firms between 1991 and 2001

Subject: Insourcing - b From: Emma To: Emma Date Posted: Wed, Apr 07, 2004 at 15:05:04 (EDT) Email Address: Not Provided Message: http://www.epinet.org/content.cfm/webfeatures_snapshots_04072004 Insourcing worsens U.S. trade balance Not only does insourcing fail to balance out the jobs lost to outsourcing, but it also leads to soaring U.S. trade deficits.

Subject: Insourcing - c From: Emma To: Emma Date Posted: Wed, Apr 07, 2004 at 17:04:22 (EDT) Email Address: Not Provided Message: http://www.epinet.org/content.cfm/webfeatures_snapshots_archive_03242004 High-paying software jobs being moved abroad Software jobs, which pay some of the highest wages in America, have fallen sharply since 2000. These jobs have disappeared despite the fact that software sales to U.S. businesses in 2003 were up 4% over 2000. Comprehensive data on the number of U.S. software jobs that have moved overseas is hard to come by, but persuasive indirect evidence points towards the significant movement of software jobs to India (the most prominent of many countries to which U.S. software work is being moved).

Subject: Insourcing - d From: Emma To: Emma Date Posted: Wed, Apr 07, 2004 at 17:04:51 (EDT) Email Address: Not Provided Message: http://www.epinet.org/content.cfm/webfeatures_snapshots_archive_03292004 Soaring increase in high-tech exports from China erodes U.S. employment It is often argued that free trade benefits all countries because it allows them to specialize in goods for which they have a comparative advantage, yielding increased efficiency and productivity in each economy. In the United States, economists and public officials frequently claim that trade will reduce production of low-tech goods such as textiles and apparel and increase production of high-tech goods in which the United States has a comparative advantage. For example, in a recent address in Washington, D.C., World Trade Organization (WTO) Director Supachai Panitchpakdi said that for every U.S. job threatened by imports, a growing number of high-paid, high-skilled jobs are created by exports. The theory of comparative advantage suggests that low-wage countries such as China should specialize in low-tech goods such as textiles, apparel, toys, and furniture. However, as shown in the figure below, China has rapidly increased the share of middle- and high-tech products in its exports during a period in which its total exports nearly tripled....

Subject: German Employment Problem From: Jennifer To: All Date Posted: Wed, Apr 07, 2004 at 14:00:40 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/04/07/business/worldbusiness/07euro.html New Worries as Joblessness Rises Sharply in Germany By ERIC PFANNER Unemployment in Germany rose sharply last month, the German government reported yesterday, suggesting that even as the United States starts to generate jobs, the country that is the economic engine of Europe is being left behind. Analysts said the news put more pressure on European policy makers grasping for ways to lift the Continent from its economic malaise. The number of Germans out of work rose by 44,000 in March, lifting the jobless rate to 10.4 percent from 10.3 percent a month earlier. After signs of recovery in 2003 and early this year, Germany, along with its neighbors in the euro zone, seems to be stagnating, as growth picks up elsewhere in the world, analysts said....

Subject: Mercury Pollution Rules From: Emma To: All Date Posted: Wed, Apr 07, 2004 at 13:25:37 (EDT) Email Address: Not Provided Message: Paul Krugman is right! http://www.nytimes.com/2004/04/07/politics/07MERC.html White House Minimized the Risks of Mercury in Proposed Rules, Scientists Say By JENNIFER 8. LEE WASHINGTON — While working with Environmental Protection Agency officials to write regulations for coal-fired power plants over several recent months, White House staff members played down the toxic effects of mercury, hundreds of pages of documents and e-mail messages show. The staff members deleted or modified information on mercury that employees of the environmental agency say was drawn largely from a 2000 report by the National Academy of Sciences that Congress had commissioned to settle the scientific debate about the risks of mercury. In interviews, 6 of 10 members of the academy's panel on mercury said the changes did not introduce inaccuracies. They said that many of the revisions sharpened the scientific points being made and that justification could be made for or against other changes. Most changes were made by the White House's Office of Management and Budget, which employs economists and scientists to review regulations. But scientists on the academy panel and others outside it as well as environmentalists and politicians expressed concern in recent interviews that a host of subtle changes by White House staff members resulted in proposed rules that played down the health risks associated with mercury from coal-fired power plants. The proposal largely tracks suggestions from the energy industry. While the panel members said the changes did not introduce outright errors, they said they were concerned because the White House almost uniformly minimized the health risks in instances where there could be disagreement. 'What they are saying is not scientifically invalid on its face,' said Alan Stern, a New Jersey toxicologist who served on the panel. 'Partially they edited for clarity and relevance from a scientific standpoint. But there appears to be an emphasis on wordsmithing that is not necessarily dictated by the science.' Last Thursday attorneys general from 10 states and 45 senators asked the E.P.A. to scrap the proposed rules, saying they were not strict enough....

Subject: PK Was Right From: Terri To: Emma Date Posted: Wed, Apr 07, 2004 at 15:08:40 (EDT) Email Address: Not Provided Message: Right again on mercury pollution! See PKArchive Column for April 6.

Subject: New economy From: Yann To: All Date Posted: Wed, Apr 07, 2004 at 07:05:38 (EDT) Email Address: Not Provided Message: Please could you recommend to me two or three PK's articles about the so-called new economy Thanks.

Subject: Search PKArchive From: Terri To: Yann Date Posted: Wed, Apr 07, 2004 at 17:57:08 (EDT) Email Address: Not Provided Message: Search the PKArchive for 'new economy.'

Subject: Fair Trade From: Jennifer To: All Date Posted: Tues, Apr 06, 2004 at 17:52:13 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2003/12/29/international/asia/29CHIN.html?ex=1081396800&en=07326dd68eda5543&ei=5070 When Chinese Workers Unite, the Bosses Often Run the Union By JOSEPH KAHN SHENZHEN, China — The hall had all the trappings of a solemn political ceremony in Communist China, a dais with officials and executives in the seats of honor, ballot collectors and ballot counters, and a big red banner that announced a 'democratic union election.' Liao Yuanxin, the local chief of the government's All-China Federation of Trade Unions, listed candidates to represent workers of Neil Pryde, a foreign-run sportswear factory. For union committee member: two workers and two company managers. For vice chairman: the human resources director. For chairman: Huang Hongguang, a top factory boss. Left off the dais, and off the list, was Liu Youlin, a dogged 29-year-old clothing cutter who had campaigned, petitioned and agitated until officials agreed to set up the union. But according to his account and those of other workers present, he made himself heard. 'I object to the factory manager being named head of the union,' Mr. Liu shouted from the floor, interrupting Mr. Liao's address. 'A boss cannot represent workers.' When the vote proceeded anyway, fellow workers protested by denying the requisite 50 percent majority to all but the two worker candidates, rendering the new union leaderless — and effectively stillborn. Mr. Liu's struggle to unionize workers at Neil Pryde, a leading maker of sailing and windsurfing gear sold globally under its own name and for brands like Quiksilver and Billabong, is emblematic of the battle workers are waging to earn basic rights in China's fast-growing export industries....

Subject: Re: Fair Trade From: Mik To: Jennifer Date Posted: Thurs, Apr 08, 2004 at 16:34:47 (EDT) Email Address: Not Provided Message: After reading Pete's and Econochick's input I am again having to bow my head and say, 'Now that I see it in that light I agree with you.' I guess it is too late to be aggressive with a country like China. And my orginal post was to cushion US job losses to China. I now concede that we have to look for other ways to cushion that blow (instead of trade tariffs). Perhaps we can learn from this and perhaps apply it to other countries that don't have such power as China. The point is that labour rights in most parts of the world are dreadful. Heck labour rights (by my opinion) are dreadful in the States. My belief is that US companies abuse the labour of one country and then move onto the next country once the labour supply decreases. And so the circle goes on. But if we had laws stipulating trade tarifs connected to fair labour policies, it would stop these US companies from abusing the labour and importing cheap goods, simply because they know a tarif will be placed on the goods. There is a balance that needs to be struck between, cushioning job losses in the US, encouraging economic growth in developing countries and encouraging labour development within developing countries. I personally believe that balance is no where near the right spot. In essence too many people are unhappy and too few people are happy with the progress that we have made in the last 10 or so years.

Subject: Clean Air? From: Jennifer To: All Date Posted: Tues, Apr 06, 2004 at 17:47:48 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/04/04/magazine/04BUSH.html Changing All the Rules By BRUCE BARCOTT How the Bush administration quietly — and radically — transformed the nation’s clean-air policy.

Subject: Paul's prediction has come true! From: CousinoMacul To: All Date Posted: Mon, Apr 05, 2004 at 22:12:25 (EDT) Email Address: cousinomacul@yahoo.com Message: When Paul made the comment about the hypothetical headline 'Shape of the Earth: views differ!' I just assumed he was exagerating to get his point accross. That was before I saw CNN Headline News' coverage of 'Intelligent Design.' I'm upset enough that so many school districts accross the country are beginning to mandate teaching this garbage in science classes (make no mistake - it is NOT science!), but the CNN coverage sent me through the roof. Like a good 'unbiased' news outlet, they took no sides and gave I.D. equal credence to Evolution. It's like they said 'We've got Intelligent Design on the one hand and Science on the other. And the truth is somewhere in between.' This is outragous! Evolution is not some controversial idea with a few fringe adherents. It is the basis of modern biology. Most of the advances we are making in medicine, as well as all the advances we are making in genome mapping, cloning, genetic engineering, embryology and paleantology, etal are only possible because of our understanding of the theory of evolution. Intelligent design is just creationism that's been repackaged without biblical references. It is the same old mythology morphed into pseudoscience. And yet CNN says '. . . but now that there is an alternative to the theory of evolution . . .' You've got to be kidding! That's not how it works. I've read a little about the history of science so I've come up with a (fantastical hypothetical)scenario of how I.D. might have arisen as a legitimate 'alternative' to evolution. First, there would have to be some serious problems with the theory of evolution (within the scientific comunity, not theologians) For example, according to evolutionary theory, scientists would expect to find a preponerance of 'junk DNA,' parasitic biomass, and opportunistic behavior. Failing to find this, some scientists would begin to entertain other theories. Second, one of these scientists (or a group) would come up with the theory of I.D. because it satisfactorally solves many of evolution's shortcomings. The theory would meet much resistance at first, but would attract a group of scientific followers who would refine it and think through its consequences throughout every branch of biology. Third, researchers on both sides would design experiments (to try to either prove or disprove I.D.) that would pit it directly against evolution. After a while, it might gain wide acceptance (like global warming), or it might remain in the minority (like non-dinosaur bird origins). But that scenario will forever remain a fantasy. Because first, evolution is universally accepted as fact among scientists. New findings only serve to strengthen the theory. Second, I.D. was not developed by scientists to overcome problems with evolution. It was developed by creationists to push through an educational agenda that had been soundly rejected in its older form. And third, no experiments or studies are being done on I.D. because scientists don't take it seriously and I.D. adherents aren't scientists. Intelligent Design not only does not deserve equal footing with Evolution, but should be treated with contempt and mockery. I realize that I might sound like a crazed extremist for expressing my views as such, but the simple fact of the matter is that, from the point of view of science, I.D. has no more validity that the Flat Earth Theory. That's why I said that Paul's prediction had come true. CNN should be ashamed! Thank you for letting me vent.

Subject: Re: Paul's prediction has come true! From: ai To: CousinoMacul Date Posted: Tues, Apr 06, 2004 at 02:31:59 (EDT) Email Address: Not Provided Message: do you mean to tell me that science can disprove whether God created the universe? I'd like to see your data. and when is it ever sound to treat ideas with contempt and mockery? the animus that prevades from you does not bespeak a cool certainty. you sound nonplussed and strident. if you are really in the right, then why don't you relax a little?

Subject: NPR From: mg To: All Date Posted: Mon, Apr 05, 2004 at 20:54:23 (EDT) Email Address: drown2@hotmail.com Message: Paul's on NPR's On Point tonight taped from a recent Kennedy Center live event.

Subject: Fair Trade From: Mik To: All Date Posted: Mon, Apr 05, 2004 at 17:53:50 (EDT) Email Address: Not Provided Message: Okay so we all know that the US should not halt the import of products from China as a means of simply stemming the tide of exporting US jobs. So what should the US do at least slow it down in order to cushion the blow? Comments? My first thought would have been to state that the US will place tarifs on countries that don't have fair trade policies and labour policies that resemble those in the US. In other words, the US should place tariffs on countries that do not allow for labour unions, or do not have labour laws insuring issues such as safety and worker's rights. This would be a serious blow to these countries and perhaps make them get their 'houses' in order if they want to enjoy their new found wealth at the expense of US labour. Also it would set the tone for future 'upliftment' of the poor in these countries. The only problem is that when I glanced at the US labour law, I suddenly realised that US labour law as it stands is prejudicial towards the labour force (in comparison to Europe). Implementing such 'fair trade' stipulations that the trading country must have labour laws that at least comply with US labour law would not have much value as US labour law is pretty weak. Any comments?

Subject: Re: Fair Trade From: Pete Weis To: Mik Date Posted: Wed, Apr 07, 2004 at 01:41:29 (EDT) Email Address: Not Provided Message: We're not in a position to get involved in trade disputes with China. That's because China now owns too big a piece of us. This may be sad but it's very true. They've loaned us hundreds-of-billions and are continuing to loan to us at a very heavy rate. There is no point to giving us any more money if we try to significantly reverse or slow our trade deficit with them. If they were to suddenly stop lending, our interest rates would rise steeply and the dollar go into a freefall. This would set off a panic selloff in the bond markets - much bigger than we had in June of 2003 - which would further push rates higher. The stock markets and real estate markets would tank with the bond market. Other countries like Japan would possibly pull out of their US dollar denominated assets much like panicking depositors pulling deposits from banks during the early stages of the great depression. How's that for creating a little more exitement in our lives. Our government and Alan Greenspan are very aware of this. Some politicians will inevitably try to make some points with how they will or would be tough with countries like China when it comes to trade and we might be able to get some leverage with some countries. But we have no leverage with countries who have been supplying the money to keep our economy afloat. This is a point (our ongoing current account deficit and the creditors who enable it) that Paul Krugman, Warren Buffet, Bill Gross, Stephen Roach and many others have been hammering away at.

Subject: Leverage From: Jennifer To: Pete Weis Date Posted: Wed, Apr 07, 2004 at 15:42:21 (EDT) Email Address: Not Provided Message: The leverage we have is the need in China for our market. We need each other. Why not use the leverage?

Subject: Re: Leverage From: Pete Weis To: Jennifer Date Posted: Wed, Apr 07, 2004 at 20:55:20 (EDT) Email Address: Not Provided Message: Since our standard of living is so much higher, we have more at stake. The US consumer is very important to the Chinese, no doubt about it. But China sells to the world and, although would be hurt by a trade war with the US, I believe the US backs down first - because we're so totally dependent on very low interest rates. China will probably give very small concessions, but nothing of any significance. They know they have the stronger position. When it comes to 'fair trade' (a very foggy notion indeed), each side has its own version. There's is very different from ours.

Subject: Re: Fair Trade From: Emma To: Pete Weis Date Posted: Wed, Apr 07, 2004 at 14:04:50 (EDT) Email Address: Not Provided Message: Yes, but we can push for fair trade with China. The Chinese government appears to want fair trade rather than exploitation, so we can push on relations as President Clinton did.

Subject: No Good From: Econochick To: Mik Date Posted: Tues, Apr 06, 2004 at 17:18:17 (EDT) Email Address: Not Provided Message: Mik, I'm afraid the only thing that would happen is that China will slap tarrifs on our goods and make them less competitive. The end result is that consumers pay more and economies are stifled. Chinese labour will develop its own labour laws as labour becomes a scarcer commodity over time. To force that economic evolution is detrimental. An interesting side point: communism is theoretically all about the 'proletariat'. Note that the proletariat are is in the worst position in communist countries. As Mik points out, it seems that our democratic/capitalist labour laws are more in favour of labour than communist/socialist. And that, folks, is why my family fled Russia in the 1970's.

Subject: Central America From: Jennifer To: Mik Date Posted: Tues, Apr 06, 2004 at 16:17:04 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/04/06/business/worldbusiness/06trade.html Central American Deal Ignites a Trade Debate By ELIZABETH BECKER SAN SALVADOR - Marina del Carmen Leiva, a 32-year-old mother, struggles to keep her job earning $152 every month bent over sewing machines, making clothes for famous American brand-name companies. The pressure to produce garments quickly is so great, she says, that she and her co-workers are regularly refused permission to visit the bathroom or get a drink of water for fear it would slow the line. 'If they would just treat us like human beings, even without raising the minimum wage, my life would be better,' said Mrs. del Carmen Leiva, a slender, dark-eyed woman who is the sole supporter of her three children. With the Bush administration asking Congress to approve the Central American Free Trade Agreement late this spring, the next big battle over the politically explosive issue of trade will revolve around people like Mrs. del Carmen Leiva and their labor rights.... Cafta would create a free trade zone between the United States and the five Central American nations, immediately dropping most duties for imports. It would also help prepare the textile industry in all the countries for stiff international competition next year, especially from China, when the global textile quota system is eliminated under an global trade agreement. The Central American nations opened their protected insurance, telecommunications and agricultural sectors to American competition, but the United States resisted requests to reduce its annual $19 billion in agriculture subsidies or allow more immigration....

Subject: Re: Central America From: Mik To: Jennifer Date Posted: Tues, Apr 06, 2004 at 16:25:09 (EDT) Email Address: Not Provided Message: Thanks Jennifer - my point exactly.

Subject: Re: Fair Trade From: Gnao To: Mik Date Posted: Mon, Apr 05, 2004 at 18:25:07 (EDT) Email Address: nma@hotmail.com Message: '1 apple plus 1 pear = ?'

Subject: Re: Fair Trade From: Mik To: Gnao Date Posted: Tues, Apr 06, 2004 at 16:14:10 (EDT) Email Address: Not Provided Message: This is a discussion on fair trade not fruit. But thanks.

Subject: Re: Fair Trade From: Gnao To: Mik Date Posted: Tues, Apr 06, 2004 at 16:51:12 (EDT) Email Address: nma@hotmail.com Message: That was a metaphor to explain the fact that the notion of 'market-economy' is relative in time and space(fairness).(You cannot 'now' compare apples with pears)

Subject: Re: Fair Trade From: Mik To: Gnao Date Posted: Tues, Apr 06, 2004 at 16:57:59 (EDT) Email Address: Not Provided Message: I disagree. I think you missed the point. Countries are trading in the World Market. Here there is only one market and no comparison between markets. The only comparison is in labour laws and how they will in the future these laws will shape the various economies. Labour laws allow for growth of human development. If countries are to be part of the world market, they should be at least showing signs of an ability to play fair. Some countires do - most do not.

Subject: Re: Fair Trade From: Gnao To: Mik Date Posted: Tues, Apr 06, 2004 at 18:04:36 (EDT) Email Address: nma@hotmail.com Message: I totally respect your disagreement, but let me only add a fact:'China's population added to the India's one = more than one third of the whole world-population'(Labour Supply << Labour Demand)

Subject: Fair Trade is the Matter From: Jennifer To: Mik Date Posted: Tues, Apr 06, 2004 at 17:49:32 (EDT) Email Address: Not Provided Message: Just so, the matter is fair trade with fair labor and environmental protection standards.

Subject: Re: Fair Trade is the Matter From: Gnao To: Jennifer Date Posted: Tues, Apr 06, 2004 at 18:18:04 (EDT) Email Address: nma@hotmail.com Message: 'Fair trade' is 'a feasable and yet impossible agreement'.'Fair-trade with fair labour and environmental protection standards' was, is, and will be a perfect world called 'Utopia'.

Subject: Re: Fair Trade is the Matter From: Mik To: Gnao Date Posted: Thurs, Apr 08, 2004 at 11:52:20 (EDT) Email Address: Not Provided Message: Gnao - good reply. Does it mean we give up hope on trying to aim towards fair trade? Let's take an extreme fictional case example. Imagine China employed slave labour at no cost. And all of a sudden we find that factories are closing down in the US to open up in China. Should we support this action by allowing the products to be exported back to the US?... well under this extreme example - obviously not. So now we have the scenario where we don't have 'slave labour' per se, but rather the 'sweat shops' and/or poor labour rights, and we are the ones supporting this by alowing the products to move relatively freely into the US? Do you understand my point? In the future China and India may well become the biggest markets, and we should perhaps try get in there. But right now the US economy is bar far and away the biggest - and the biggest market for these developing countries. If we are going to contribute towards their future growth, we should at least ensure that it won't be a race to the bottom. Trade tarifs based on human rights and labour laws should be (in my opinion) the corner stone of future WTO agreements.

Subject: Re: Fair Trade is the Matter From: Mik To: Mik Date Posted: Thurs, Apr 08, 2004 at 16:32:55 (EDT) Email Address: Not Provided Message: After reading Pete's and Econochick's input I am again having to bow my head and say, 'Now that I see it in that light I agree with you.' I guess it is too late to be aggressive with a country like China. And my orginal post was to cushion US job losses to China. I now concede that we have to look for other ways to cushion that blow (instead of trade tariffs). Perhaps we can learn from this and perhaps apply it to other countries that don't have such power as China. The point is that labour rights in most parts of the world are dreadful. Heck labour rights (by my opinion) are dreadful in the States. My belief is that US companies abuse the labour of one country and then move onto the next country once the labour supply decreases. And so the circle goes on. But if we had laws stipulating trade tarifs connected to fair labour policies, it would stop these US companies from abusing the labour and importing cheap goods, simply because they know a tarif will be placed on the goods. There is a balance that needs to be struck between, cushioning job losses in the US, encouraging economic growth in developing countries and encouraging labour development within developing countries. I personally believe that balance is no where near the right spot. In essence too many people are unhappy and too few people are happy with the progress that we have made in the last 10 or so years.

Subject: 'We don't need all that oil!' From: EZ To: All Date Posted: Mon, Apr 05, 2004 at 16:21:40 (EDT) Email Address: ejz23@yahoo.com Message: Really important article from the Guardian UK to read! 'Modest price differentials account for most of the difference in energy use in Europe and the US' http://www.guardian.co.uk/renewable/Story/0,2763,1185953,00.html We don't need all that oil! www.guardian.co.uk/renewable/Story/0,2763,1185953,00.html

Subject: Excellent Article From: Jennifer To: EZ Date Posted: Mon, Apr 05, 2004 at 16:44:35 (EDT) Email Address: Not Provided Message: Excellent article! Where oh where oh where is America's energy policy? Where the push for efficiency and conservation?

Subject: Reservations on the Article From: Mik To: Jennifer Date Posted: Mon, Apr 05, 2004 at 17:44:35 (EDT) Email Address: Not Provided Message: I have some reservations about the article. For example Ireland has recently halted the expansion of their 'Wind Farms' due to a serious problem with wind energy being too erratic for a stable power source. The theory of increasing fuel prices as a means of getting people to review where the live and move closer to work (in order to save gas) is way too simplistic. It is a very complex issue requiring a strong policy in town planning. Vancouver for example has done wonders for reducing consumption of fuel by simply not expanding their roads and prohibiting the development of new land in the outskirts of the city. But this policy goes gainst the US concept of freedom. Also people move to areas due to the attraction of the area (good social standing, schools, etc) and gas consumption is not as big a priority as the article seems to imply. Also a big fundamental flaw in the story where the author implies that European cars are more fuel efficient than American. But America has access to European cars. Also I read that the most fuel efficient car in the US, beating the German and Japanese cars is the Pontiac - which is not available in Europe. The issue here is really about changing people's mindset. The US love affair with the large engine is an example of a greater love affair for the open spaces the US offers. This is not a bad thing... on the one hand. But this is an intersting issue - interested in a debate?

Subject: Re: Reservations on the Article From: EZ To: Mik Date Posted: Wed, Apr 07, 2004 at 23:13:02 (EDT) Email Address: E@e.c Message: “I have some reservations about the article. For example Ireland has recently halted the expansion of their 'Wind Farms' due to a serious problem with wind energy being too erratic for a stable power source.” I agree that wind power is only as good as the wind that is powering it, that is where storage such as making hydrogen from power during peak times can come into play. I believe that the article is stressing that we use a mix of power sources, solar, hydro, wind, geothermal, combined with more efficiency in the way we use energy. “The theory of increasing fuel prices as a means of getting people to review where the live and move closer to work (in order to save gas) is way too simplistic. It is a very complex issue requiring a strong policy in town planning.” When you think of the last 2 centuries of the USA’s history the car only played a major role after World War Two. America got along fine with streetcars, subways and (dare I say it) walking or Biking. We’ve also been able to live without SUV’s till the early 1990’s. The way our suburbs and cities have been set up these last few decades are anathema to people that do not want to use their car every time they want to get a quart of milk, that is not freedom in my book. This way our transportation system works is detrimental to many groups of our society namely people under the legal driving age, people that cannot drive for physical reasons, people that are too old to drive, or people that cannot afford the expensive costs of car, insurance, gas and upkeep. It is one of the leading causes of accidental death and injury. Imagine if 25,000 people died every year on our public transportation system, believe me there would be some changes, but for some reason we accept them for cars. Anyways I could go on, but I will not. ”Also a big fundamental flaw in the story where the author implies that European cars are more fuel-efficient than American. But America has access to European cars. Also I read that the most fuel-efficient car in the US, beating the German and Japanese cars is the Pontiac - which is not available in Europe.” I’d love to hear which Pontiac is the most fuel efficient car being sold is. The US auto makers don’t make these cars more fuel efficient because there is no will to from the Gov’t or consumers because gas is cheap. Europe average fuel economy 35 MPG US 20 MPG (figures from NY TIMES) and Europe does not have a CAFÉ standard like we do, because it does not work. ”The issue here is really about changing people's mindset. The US love affair with the large engine is an example of a greater love affair for the open spaces the US offers.” In the 1970’s the US changed there mind real quick after the 2 oil Shocks after the embargo and the Iran revolution. It will happen again though hopefully it will not take something dire like that.

Subject: Re: Reservations on the Article From: Mik To: EZ Date Posted: Thurs, Apr 08, 2004 at 17:01:53 (EDT) Email Address: Not Provided Message: EZ, Although I criticise the article - it looks like we are not really in an argument here. I agree that there should be far more emphasis on alternative power sources. This is part of my job in fact. I believe we have still a very long way to go in dams as an example. And the article from my view point was placing way too much emphasis on Wind farms. Again this is a very complicated issue. There is power generation and power transmission costs - now you are introducing power storage costs? I agree that cities should be far more condensed and alternative transport should be found. But the article stressed using gas prices as a means of influencing people's decision on where to live. Again this is too simplistic. The UK reached a point of 1 pound a litre of petrol. That is an astronomical price - yet it would have little effect on people's decision criteria. Again look at what Vancouver did to effectively change people's perceptions of driving. Vancouver has been relatively successful, but they tackled the issue from a town planning perspective, not gas prices. Lastly, I want to stress an issue. I drive a Ford Escape SUV with a 2litre alluminium engine. My car is more fuel efficient than MOST cars on the road today. So please don't generalise and talk about SUVs. I am very gas-concious and purposely selected my car with this engine. It is about the US love-affair with large engines (particularly the 5 litre V8 engine). Now I remember a review on TV that spoke about Pontiac having the most fuel efficient car based on some sophisticated category. The fundamental is that we have access to European and even Japanese cars we just need a serious quick mindset change. Now you raised a good point about oil shocks of the 70s and changing mindsets - and HEY I don't mind doing it again. In fact Europe has a tax linked to the size of your engine. The US could introduce this. Also simply consider this: why in the hell do taxi drivers need to drive cars with 5 litre V8 engines? They can get around just fine on a 2 litre engine and save a bundle on gas (not to mention all the other benefits).

Subject: Re: Excellent Article From: Terri To: Jennifer Date Posted: Mon, Apr 05, 2004 at 17:38:25 (EDT) Email Address: Not Provided Message: This Administration just does not think of conservation, so we are playing to the hands of OPEC.

Subject: Mexico and NAFTA From: Emma To: All Date Posted: Mon, Apr 05, 2004 at 16:13:54 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/04/04/opinion/04FRIE.html?8hpib Out of the Box By THOMAS L. FRIEDMAN MEXICO CITY Because it happened so peacefully, it's easy to forget that Mexico in one decade has gone through two remarkable revolutions. One of the oldest one-party governments in the world was eased out with ballots, not bullets, and a poor developing country lowered its tariff barriers and became America's second-largest trading partner. Good news, right? So why does it feel like so many people here who were riding high three years ago are losing confidence? The short answer is that Mexico's political and economic revolutions, driven from the top, were great for the 1990's. But unless they are followed up now by a third revolution — a reform revolution — that mobilizes and upgrades the skills of the whole society, Mexico will not stay competitive, and people here know it. But their politics are gridlocked. If Mexico does not get some real leadership, it's likely to have a real crisis. It is hard to stay competitive when you collect the lowest percentage of taxes among leading Western economies, or when you are an oil-rich country but you import energy from America because your constitution restricts foreign investment in the energy sector. If Mexico were where Australia is, this would not worry me. Not only is it next door, but Mexico's huge bubble of baby boomers born in the 1970's are now entering their prime working years. If Mexico can't develop an economy that can keep them at home, they will flock to a theater near you. 'What Nafta accomplished was to get Mexicans to think forward and outward instead of inward and backward,' said Luis Rubio, president of Mexico's Center of Research for Development. '[But] Nafta was seen as an end, more than a beginning. It was seen as the conclusion of a process of political and economic reforms and was meant to consolidate them. . . . Not only did Mexico not have a strategy for going forward, neither did America.' ...

Subject: Mexico and China From: Emma To: Emma Date Posted: Mon, Apr 05, 2004 at 17:20:56 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/04/01/opinion/01FRIE.html What's That Sound? By THOMAS L. FRIEDMAN MEXICO CITY I hadn't been to Mexico since 1996, so it definitely caught my ear when I started to hear two non-Spanish words on this trip that I'd never heard here before: 'China' and 'India.' Mexicans are increasingly aware that these two countries are running off with jobs and markets that Mexicans once thought they owned. You have to feel sorry for the Mexicans: they are hearing 'the giant sucking sound' in stereo these days — from China in one ear and India in the other. Worse, they seem stuck, unable to forge a coherent strategic response. 'We are caught between India and China,' remarked Jorge Castañeda, the former Mexican foreign minister who just decided to run for president in 2006. 'We have lost about 500,000 manufacturing jobs. It is very difficult for us to compete with the Chinese, except with high-value-added industries. Where we should be competing, in the services area, we are hit by the Indians with their back offices and call centers. . . . Not enough people here speak English.' And that's not all. While China and India each send tens of thousands of students to be educated abroad every year in science and engineering, particularly in the U.S., Mexico sends just 10,000. Go into any discount store in Mexico and look at low-priced clothing, toys, shoes and electronics, or even some Christian religious objects, and it is hard not to buy Chinese, added Mr. Castañeda, speaking at the Mexican Council on Foreign Relations. But more important, 'the U.S. markets that we had a corner on is where we are losing jobs. . . . We knew it would happen when China [entered the World Trade Organization in 2001], but we did not get prepared.' ...

Subject: Productivity and Wages From: Emma To: All Date Posted: Mon, Apr 05, 2004 at 14:10:57 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/04/05/opinion/05HERB.html We're More Productive. Who Gets the Money? By BOB HERBERT It's like running on a treadmill that keeps increasing its speed. You have to go faster and faster just to stay in place. Or, as a factory worker said many years ago, 'You can work 'til you drop dead, but you won't get ahead.' American workers have been remarkably productive in recent years, but they are getting fewer and fewer of the benefits of this increased productivity. While the economy, as measured by the gross domestic product, has been strong for some time now, ordinary workers have gotten little more than the back of the hand from employers who have pocketed an unprecedented share of the cash from this burst of economic growth. What is happening is nothing short of historic. The American workers' share of the increase in national income since November 2001, the end of the last recession, is the lowest on record. Employers took the money and ran. This is extraordinary, but very few people are talking about it, which tells you something about the hold that corporate interests have on the national conversation. The situation is summed up in the long, unwieldy but very revealing title of a new study from the Center for Labor Market Studies at Northeastern University: 'The Unprecedented Rising Tide of Corporate Profits and the Simultaneous Ebbing of Labor Compensation - Gainers and Losers from the National Economic Recovery in 2002 and 2003.' Andrew Sum, the center's director and lead author of the study, said: 'This is the first time we've ever had a case where two years into a recovery, corporate profits got a larger share of the growth of national income than labor did. Normally labor gets about 65 percent and corporate profits about 15 to 18 percent. This time profits got 41 percent and labor [meaning all forms of employee compensation, including wages, benefits, salaries and the percentage of payroll taxes paid by employers] got 38 percent.' The study said: 'In no other recovery from a post-World War II recession did corporate profits ever account for as much as 20 percent of the growth in national income. And at no time did corporate profits ever increase by a greater amount than labor compensation.' ...

Subject: Re: Productivity and Wages From: Pete Weis To: Emma Date Posted: Tues, Apr 06, 2004 at 00:02:55 (EDT) Email Address: Not Provided Message: The last time this happened - the 1920's. It was a Yale economist (I don't remember his name) in the 30's who theorized that large, sudden increases in productivity cause a shifting of wealth from the large mass of consumers to the upper 1% or so. He attributed this shift of wealth to be the cause of the Great Depression. This same theory is now expounded by Ravi Batra, an SMU economist. I described this idea in posts about a month or two previously. This idea became part of mainstream economic thought in the thirties through the 50's. If you were to look up 'The Great Depression' in Encarta online, you would find this same theory still expressed as the main reason for the Great Depression. This economic theory, in brief, states that great gains in productivity result in two effects - increased profits and more products produced in less time. For what ever reason - some deep seated characteristic of human nature (often, simply called greed) - those who run the show (CEO's, CFO's, etc) keep nearly all, if not all, of the increased profits for themselves. But, this presents a problem. If this whole productivity/economic boom is to continue then there needs to be continuing consumption for all the extra quantities of products being produced. So if those 'running the show' don't want to share the wealth then some other way needs to be utilized to get money into the hands of consumers who are the driving force of this whole enterprise. This is where the financial system steps in and provides alot of 'cheap', 'easy' money for all those consumers not sharing in the wealth. This is what occurred throughout the industrialized world in the 1920's and also in Japan in the 80's continuing into the 90's. Think of Alan Greenspan recently lauding adjustable rate mortgages as a means for consumers to extract yet more money out of their homes. This is, as your referenced article seems to (atleast partially) describe is happening presently to the largest part of the consumer class in America today. Basically as debt rises (for the consumer) to an unsustainable level, thwe economy 'runs out of gas' and begins to succumb to its debt and financial risk and begins to collapse. The late 19th century and early 20th century experienced tremendous productivity gains sparked by the development of electric power. This led to the development of the internal combustion engine, the assembly line, machinery which was not dependent on being located next to water power or dependent on unwieldy steam producing apparatus, telegraph, telephone, radio, etc. Nothing close to this kind of productivity gain has happened again until our present computer age. I wonder if Bob Herbert, who wrote this article, is aware of the possible broader implications of the subject he was writing about. Will we face the same fate our grand parents did in the 30's? I don't know, but it's very interesting.

Subject: Conjecture on Productivity From: Emma To: Pete Weis Date Posted: Tues, Apr 06, 2004 at 13:34:27 (EDT) Email Address: Not Provided Message: Interesting. I will think carefully about this matter of productivity surges and wealth transfer.

Subject: Worker Time Cards From: Emma To: Emma Date Posted: Mon, Apr 05, 2004 at 15:21:15 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/04/04/national/04WAGE.html Altering of Worker Time Cards Spurs Growing Number of Suits By STEVEN GREENHOUSE As a former member of the Air Force military police, as a play-by-the-rules guy, Drew Pooters said he was stunned by what he found his manager doing in the Toys 'R' Us store in Albuquerque. Inside a cramped office, he said, his manager was sitting at a computer and altering workers' time records, secretly deleting hours to cut their paychecks and fatten his store's bottom line. 'I told him, `That's not exactly legal,' ' said Mr. Pooters, who ran the store's electronics department. 'Then he out-and-out threatened me not to talk about what I saw.' Mr. Pooters quit, landing a job in 2002 managing a Family Dollar store, one of 5,100 in that discount chain. Top managers there ordered him not to let employees' total hours exceed a certain amount each week, and one day, he said, his district manager told him to use a trick to cut payroll: delete some employee hours electronically. 'I told her, `I'm not going to get involved in this,' ' Mr. Pooters recalled, saying that when he refused, the district manager erased the hours herself. Experts on compensation say that the illegal doctoring of hourly employees' time records is far more prevalent than most Americans believe. The practice, commonly called shaving time, is easily done and hard to detect — a simple matter of computer keystrokes — and has spurred a growing number of lawsuits and settlements against a wide range of businesses....

Subject: Worker Time Cards From: Emma To: Emma Date Posted: Mon, Apr 05, 2004 at 15:20:20 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/04/04/national/04WAGE.html Altering of Worker Time Cards Spurs Growing Number of Suits By STEVEN GREENHOUSE As a former member of the Air Force military police, as a play-by-the-rules guy, Drew Pooters said he was stunned by what he found his manager doing in the Toys 'R' Us store in Albuquerque. Inside a cramped office, he said, his manager was sitting at a computer and altering workers' time records, secretly deleting hours to cut their paychecks and fatten his store's bottom line. 'I told him, `That's not exactly legal,' ' said Mr. Pooters, who ran the store's electronics department. 'Then he out-and-out threatened me not to talk about what I saw.' Mr. Pooters quit, landing a job in 2002 managing a Family Dollar store, one of 5,100 in that discount chain. Top managers there ordered him not to let employees' total hours exceed a certain amount each week, and one day, he said, his district manager told him to use a trick to cut payroll: delete some employee hours electronically. 'I told her, `I'm not going to get involved in this,' ' Mr. Pooters recalled, saying that when he refused, the district manager erased the hours herself. Experts on compensation say that the illegal doctoring of hourly employees' time records is far more prevalent than most Americans believe. The practice, commonly called shaving time, is easily done and hard to detect — a simple matter of computer keystrokes — and has spurred a growing number of lawsuits and settlements against a wide range of businesses....

Subject: Does this explain the gains in productivity? From: David E... To: Emma Date Posted: Tues, Apr 06, 2004 at 20:35:18 (EDT) Email Address: Not Provided Message: Just kinda kidding!

Subject: Re: Does this explain the gains in productivity? From: B.B. To: David E... Date Posted: Thurs, Apr 08, 2004 at 13:47:44 (EDT) Email Address: Not Provided Message: That's just kinda funny!

Subject: Re: Worker Time Cards From: B.B. To: Emma Date Posted: Mon, Apr 05, 2004 at 16:53:19 (EDT) Email Address: Not Provided Message: Excellent, albeit depressing, articles. Thank you, Emma.

Subject: Double Post From: Oops To: Emma Date Posted: Mon, Apr 05, 2004 at 16:12:59 (EDT) Email Address: Not Provided Message:

Subject: looking for NY Times Magazine article From: georgio To: All Date Posted: Sat, Apr 03, 2004 at 18:54:41 (EST) Email Address: ggames Message: Hello, I'm looking for an article Paul authored that appeared in the magazine about two years ago. It had to do with the middle class and its eroding situation. Does anyone know the date of the issue? Thanks all.

Subject: Re: looking for NY Times Magazine article From: Bobby To: georgio Date Posted: Sat, Apr 03, 2004 at 19:48:47 (EST) Email Address: robert@pkarchive.org Message: I think this is what you're looking for: http://www.pkarchive.org/economy/ForRicher.html

Subject: Re: looking for NY Times Magazine article From: Pete Weis To: Bobby Date Posted: Sat, Apr 03, 2004 at 21:09:34 (EST) Email Address: Not Provided Message: Another good Krugman piece dealing with this same subject is 'The Death of Horatio Alger' written more recently. I don't have a link but a search in google will find it.

Subject: Re: looking for NY Times Magazine article From: Bobby To: Pete Weis Date Posted: Sun, Apr 04, 2004 at 14:36:36 (EDT) Email Address: robert@pkarchive.org Message: This site is searchable. ALl you have to do is go to 'search this site' in the upper left corner and type in death of horatio alger. you'll find that the link is in the american economy section.

Subject: Re: looking for NY Times Magazine article From: Pete Weis To: Bobby Date Posted: Mon, Apr 05, 2004 at 00:08:20 (EDT) Email Address: Not Provided Message: Thanks Bobby. I would often click on the items in the menu in large, bold black print and never 'registered' the small red print above it.

Subject: India's Awakening From: Emma To: All Date Posted: Fri, Apr 02, 2004 at 15:16:38 (EST) Email Address: Not Provided Message: http://www.morganstanley.com/GEFdata/digests/latest-digest.html India’s Awakening Stephen Roach (New York) First impressions are superficial almost by definition. But more often than not, they end up pointing you in the right direction. Quite simply, I was blown away by what I saw on my first trip to India. It’s a land of great contrasts, to be sure -- strength in human capital and technology coexisting with backward infrastructure and heart-wrenching poverty. But there is no doubt in my mind that the balance has shifted. After decades of stop and go, the critical mass of a new approach to Indian economic development now appears to have been attained. If I’m right, not only would that have enormous implications for the world’s second most populous nation, but it could have profound implications for the Asian and broader global economy. I just spent four days in India at the end of a two-week tour in Asia that also included China, Korea, and Japan. I visited with government officials in New Delhi, software companies in Bangalore, and investors, as well as technology, pharmaceutical, and industrial companies in Mumbai. I also met with several rapidly growing Indian subsidiaries of US multinationals. In addition, I took a long and arduous side-trip to Agra, where I was stunned by the sheer majesty of the Taj Mahal. I asked many questions, gave a few speeches, took copious notes, and recorded hundreds of digitized snapshots that have quickly become boring to my family and friends. There’s a fair amount of sensory overload in trying to sort through all the images, conversations, and insights that get filed away in a trip like this. But this visit to India was the missing piece in my Asian education. Up until now, it’s been a China-centric journey -- some 25 trips since 1997. But I have long suspected that there’s far more to Asia’s remarkable story. India convinced me that my instincts were right. It’s tempting to make the China-India comparison -- trying to figure out which of these two Asian giants has the better approach to economic development. I see no reason to frame this in such black and white terms. In fact, I am inclined to argue that it’s not China or India but, in fact, China and India. Each of these two nations has a distinctly different recipe for economic development -- recipes that are complements rather than substitutes as they fit into the broad mosaic of globalization. To be sure, China has come first in the sequencing, but this breakthrough has served India well. As the rest of the world has finally come to accept the China miracle, that realization has opened the door for acceptance of the India miracle. As one Indian leader put it to me, “It’s the flying-geese pattern of Asian development.” As China is to manufacturing, India is to services....

Subject: Re: India's Awakening From: Mik To: Emma Date Posted: Tues, Apr 06, 2004 at 16:23:17 (EDT) Email Address: Not Provided Message: Thanks for that input. I have a belief that India will do far better in integrating and even influencing western culture. This is mainly because of two factors: 1. The Indian culture compliments the western culture well. There are no real stark cultural divides or cultural insults. No real unknown formalities and (I believe) the Indian culture is more comfortable with the western culture and vice-versa. Here the Chinese culture falls short. So many unknowns between Chinese and western. 2. The Indian Movie industry. Again - my opinion, but the mere fact that India has such a strong movie industry, it allows us to see more and more of their culture to 'de-mystify' any indifference. With time, their culture may have far reaching affects on western culture through the power of the movie industry.... if only they could get their damn 'sound issues' sorted out.

Subject: Noreena Hertz From: Mik To: All Date Posted: Fri, Apr 02, 2004 at 15:14:41 (EST) Email Address: Not Provided Message: Anyone here read Noreena Hertz and have any comments?

Subject: AIDS Drugs to South Africa From: Jennifer To: All Date Posted: Fri, Apr 02, 2004 at 13:25:43 (EST) Email Address: Not Provided Message: http://www.nytimes.com/2004/04/02/international/africa/02AFRI.html How Trickle of AIDS Drugs Can Bring a Torrent of Hope By SHARON LaFRANIERE JOHANNESBURG — In just the past four years, 25-year-old Thabo James has lost both his brothers to AIDS. Sitting Thursday in his wheelchair at the Johannesburg General Hospital H.I.V. clinic, his eyes glazed, his frame stick-thin, he looked to be not far behind them. Mr. James shifted constantly on a yellow pillow. Despite a cinched-tight belt, his pants had slid below his waist. He picked at a container of spaghetti in his lap, oblivious to the noodles and sauce dribbling onto his tattered sweater. But for now, at least, Mr. James is a lucky man. After years of political debate and a threatened lawsuit, free antiretroviral drugs became available on Thursday morning in Gauteng, South Africa's most populous province, to treat people in the late stages of AIDS. The drugs, which have plummeted in price over the past few years, can alleviate the disease's debilitating symptoms and often add years to the lives of people who seem to be at death's door. Experts say there are as many as 1.6 million H.I.V.-positive people in Gauteng, more than the population of Philadelphia. Without antiretrovirals, death would be looming for perhaps 164,000 of them. Under the program begun Thursday at Johannesburg General and four other hospitals, doctors are prepared to treat perhaps 500 a week, officials said. By virtue of being so ill that he could barely speak, Mr. James was one of them. He said he planned to discard his wheelchair soon. 'I don't hope,' he said, pausing for breath between sentences of no more than a few words. 'I believe.' Although South Africa is said to have more than five million H.I.V.-positive residents, more than any other nation, government handouts of antiretrovirals have been waylaid for years, first by high-level objections, then by bureaucratic difficulties. President Thabo Mbeki and his health minister, Manto Tshabalala-Msimang, persistently questioned whether the virus causes AIDS and whether antiretroviral drugs help. Under enormous political and diplomatic pressure, Mr. Mbeki's government promised in November to provide the drugs free to as many as 53,000 South Africans by April, and to 1.4 million within five years. But the national rollout has been delayed while the government organizes the purchase of drugs, trains doctors and readies clinics. Although the Western Cape Province is treating 1,800 people with antiretrovirals and a program is starting in KwaZulu Natal, it is not certain when the drugs will be available nationwide. AIDS activists said the national government had agreed to finance wider treatment in the Johannesburg region only under duress. The Treatment Action Campaign, which lobbies for patients, promised last month to file suit if the national health ministry continued to withhold money for the local program until it had completed plans for a national antiretroviral campaign. Faced with a torrent of bad publicity just weeks before the April 14 elections to Parliament, health officials capitulated....

Subject: Re: AIDS Drugs to South Africa From: Mik To: Jennifer Date Posted: Fri, Apr 02, 2004 at 14:06:54 (EST) Email Address: Not Provided Message: When reading this, and considering the previous by Jennifer, I have a simple question to ask: do you think 3 million US$ is enough? US invests US$3m to fight Aids in SA --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- -- The United States government has committed US$3 million to fund a South African satellite health channel teaching about the HIV/Aids pandemic, a US development agency announced. 'I'm sure people will learn something; that they will always want to watch (from the channel),' said Frederick Schieck, the deputy administrator of the US Agency for International Development (Usaid). 'It's not about the money, it's about the quality and the people,' Schieck said in Johannesburg. He said he believed the funding would be put to good use as HIV/Aids was one a serious disease threatening the lives of millions of South Africans. The channel would be launched late this year and it was hoped it would be broadcast to all 4000 public health institutions in the country. The funding formed part of US President George W Bush's Emergency Plan for Aids in Africa. Sapa

Subject: Re: AIDS Drugs to South Africa From: Econochick To: Mik Date Posted: Fri, Apr 02, 2004 at 14:45:43 (EST) Email Address: Not Provided Message: Mik, you'd have to call WHO for that answer. To fight the spread of AIDS you would also have to change cultural practices - Zulu men are can roam around freely, if you get my meaning. And you would have to get the Pope to shut up about condoms. That would help. But we also must remember that $3M goes a long way in most parts of the world. In Egypt, for example, one can live a very nice middle-class lifestyle on about $6.50 per day. The latter is from personal experience. Just a thought. Back to the salt mines...

Subject: Re: AIDS Drugs to South Africa From: Mik To: Econochick Date Posted: Fri, Apr 02, 2004 at 15:13:30 (EST) Email Address: Not Provided Message: Econochick, Yep I agree with you. I put forward the point as a topic of conversation not to express my opinion. But now if I may offer my opinion. If you look at the other post I had made showing an article about how the majority of black people in Africa don't even see HIV/Aids as an issue of importance, then no matter how much money the US or any foreign country throws in - it will be wasted. The main start must come from the leaders of these countries hammering down to the people how important this issue really is. When we have President Mbeki of South Africa not even standing up and admitting to his past stupidity and stating that HIV/Aids is a serious issue, then we are not even going to get off the starting blocks in solving this issue. I now believe that the role of the West is to pressure the leaders of these countries to do their bit. Unfortunately, the protest movements of the west have focused on the little contribution the Western Governments have made to solve the issue. That is wrong - the focus should be on the little effort the Western Government have made in pressuring these leaders to do the right thing.

Subject: Agree, Mik From: Econochick To: Mik Date Posted: Sun, Apr 04, 2004 at 19:23:55 (EDT) Email Address: Not Provided Message: Mik, You'll have to forgive my skimming the posts these days - things have picked up in the work department. I would have caught on better had I actually read your posts more carefully. I agree with you completely, though. Money is not the issue - unless the money is used for advertisement of the problem and prevention. But I also agree that it is not for us to make it important to Africans - it is for their leadership. Well said, Mik.

Subject: Re: AIDS Drugs to South Africa From: Tom To: Econochick Date Posted: Fri, Apr 02, 2004 at 15:02:44 (EST) Email Address: nma@hotmail.com Message: http://www.forbes.com/finance/mktguideapps/compinfo/AdvancedChart.jhtml?symbol=NDAQ and :http://www.globeandmail.com/servlet/ArticleNews/TPStory/LAC/20040324/SWAZI24/International/Idx What's the difference?

Subject: The Recovery From: Terri To: All Date Posted: Thurs, Apr 01, 2004 at 17:49:22 (EST) Email Address: Not Provided Message: http://www.markfiore.com/animation/growth.html

Subject: Re: The Recovery From: Yann To: Terri Date Posted: Fri, Apr 02, 2004 at 03:32:05 (EST) Email Address: Not Provided Message: Thanks Terri. Really funny. As you know,humor is the politeness of despair (“l’humour est la politesse du desespoir”).

Subject: Home Buying for Beginners From: Emma To: All Date Posted: Thurs, Apr 01, 2004 at 12:45:19 (EST) Email Address: Not Provided Message: http://www.nytimes.com/2004/03/25/garden/25TURF.html Packing Comfort Into a Pod By MOTOKO RICH WHEN Andrea Burns and Peter Flynn were expecting their first child last year, they considered a two-bedroom Midtown apartment that a relative was giving up and looked in their Greenwich Village neighborhood, where they wanted to stay. Their choices seemed to come down to a fifth-floor walkup in a neighborhood they did not like (with no washing machine in the basement) or apartments for at least twice their rent of under $1,000 a month. So they stayed put — in their rent-stabilized, 265-square-foot studio. 'Everything we gained in space we lost in almost everything else,' Mr. Flynn said. Now, the couple and their infant son, Hudson, have made the tiny studio seem cozy rather than cramped. Along the windows, they have set up a nursery for Hudson, with a soft blond bassinet, dresser, rocking chair and toy chest. The couple sleep in a Murphy bed that fits into a mirrored cupboard. And they have room for a couch, a fold-out desk and a large wardrobe for clothes and linens. The high price of real estate has always trapped New York families in tiny spaces. But with the average sales price of a two-bedroom apartment in Manhattan hitting a record high of $1.14 million in the last three months of 2003, a new generation is feeling the pinch as the vise tightens on middle-class families wishing for that extra bedroom. Given bidding wars and low inventories, 'this is as bad as I've seen it,' said Ron Lense, a Douglas Elliman broker, who has witnessed real estate cycles for 17 years. In some cases, couples are buying apartments they know are too small, believing that with interest rates low, it is better to invest now than to rent. When Amy Shore and her husband, Philip Heimes, were trying to buy an apartment early last year, they hoped to find one to accommodate the baby they were expecting. But on their budget of less than $300,000, the two-bedroom apartments they found either required thousands of dollars of work or were in neighborhoods that would have meant long commutes. So they bought a 585-square-foot one-bedroom condo near Columbia University for $245,000. After their daughter, Maya, was born last July, they all slept in the bedroom. When Maya turned 6 months this year, the couple bought a Murphy bed and moved into the living room, leaving her to sleep in a crib in the bedroom....

Subject: Re: Home Buying From: Brent To: Emma Date Posted: Fri, Apr 02, 2004 at 02:38:57 (EST) Email Address: Not Provided Message: Hmmm, real estate economics 200. Interest rates go down, housing prices go up. Interest rates are not going to get much lower and in fact will likely raise significantly in 2-5 years, so these people buying for an investment are going to be sorely dissapointed. Another problem is that most people are buying houses such that their monthly payments are right at their maximum afforadable level. When interest rates go up those payments are going to be unaffordable causing a glut on the market. That would be the time to buy for an investment.

Subject: Re: Home Buying From: brock To: Brent Date Posted: Fri, Apr 02, 2004 at 09:28:29 (EST) Email Address: Not Provided Message: Why would monthly payments go up when interests rates go up? Only a fool would by real estate with an adjustable rate now. Same goes for those holding adjustable rates now. The only exception would be if you knew you were selling at then end of the rate period.

Subject: Economic Plan to Battle AIDS From: Jennifer To: All Date Posted: Wed, Mar 31, 2004 at 17:25:32 (EST) Email Address: Not Provided Message: http://www.nytimes.com/2004/03/28/international/28AIDS.html Plan to Battle AIDS Worldwide Is Falling Short By DONALD G. McNEIL Jr. Three years after the United Nations declared a worldwide offensive against AIDS and 14 months after President Bush promised $15 billion for AIDS treatment in poor countries, shortages of money and battles over patents have kept antiretroviral drugs from reaching more than 90 percent of the poor people who need them. Progress in distributing the drugs, which have sharply cut the death rate in the United States and other Western countries, has been excruciatingly slow despite steep drops in their prices. As a result, only about 300,000 people in the world's poorest nations are getting the drugs, of six million who need them, according to the World Health Organization. Experts, advocacy groups and health officials agree that the delays, compounded by inadequate medical facilities and training in very poor countries, are likely to persist unless spending is stepped up sharply. Early this month, Stephen Lewis, the special United Nations envoy for AIDS in Africa, conceded that the W.H.O.'s ambitious plan to have three million people in treatment by 2005 — announced on Dec. 1, World AIDS Day — was already collapsing from a lack of money. Donations to the Global Fund to Fight AIDS, Tuberculosis and Malaria are now about $1.6 billion a year, barely 20 percent of what Secretary General Kofi Annan said was needed when he created the fund in 2001. Saying that global contributions come to a tiny fraction of what is being spent on military operations and building civilian institutions in Iraq and Afghanistan, Mr. Lewis added that if the W.H.O. program failed, 'there are no excuses left, no rationalizations to hide behind, no murky slanders to justify indifference — there will only be the mass graves of the betrayed.' While Mr. Bush promised in his 2003 State of the Union address to spend $15 billion over five years on AIDS in Africa and the Caribbean, his budget requests have fallen far short of that goal. For the most recent donation to the Global Fund, he requested only $200 million, although Congress authorized $550 million. Nor have Europe and Asia been as generous as the fund had hoped....

Subject: Generic Drugs From: Jennifer To: Jennifer Date Posted: Thurs, Apr 01, 2004 at 15:44:59 (EST) Email Address: Not Provided Message: http://www.nytimes.com/2004/03/28/international/28AIDS.html Few people in poor countries have been able to get lower-priced generic antiretroviral drugs. While the generic drugs have been approved by the W.H.O., endorsed by the World Bank and used in several African countries, the Bush administration has so far paid only for medicines that are still under patent and cost much more. For example, Daniel Berman, co-director of the Doctors Without Borders campaign for low-cost drugs, said that in Zimbabwe his organization planned to treat 1,000 patients with drugs from two approved Indian generic makers, Cipla Ltd. and Ranbaxy Laboratories Ltd. Both companies combine three antiretrovirals so that a day's dose is just two pills and the cost is $244 to $292 per patient per year. Meanwhile, Mr. Berman said, the Centers for Disease Control in Atlanta plans to pay for the treatment of 1,000 Zimbabweans, buying the same three drugs separately from GlaxoSmithKline, Bristol-Myers Squibb and Boehringer-Ingelheim. The best prices available in Africa from those companies, he said, add up to $562 a year, and a daily dose is six pills. Advocates of cheap drugs say the Bush administration has yielded to pressure from the pharmaceutical lobby to find ways to reject the generics. On Friday, Senators Edward M. Kennedy, Democrat of Massachusetts, and John McCain, Republican of Arizona, wrote a joint letter to the White House urging it to accept W.H.O.-approved generics. In a separate letter, Representative Henry A. Waxman, Democrat of California, accused the administration of trying to set standards for Indian generics higher than those for American ones. A spokesman for Randall L. Tobias, the administration's AIDS coordinator, said any suggestion that he was snubbing generics was 'utter nonsense.' 'We will buy whatever drug is safe and effective at the lowest possible price,' said the spokesman, Dr. Mark R. Dybul. 'We don't care if it's made by Cipla or Ranbaxy, in South Africa or Brazil or Nigeria.' Mr. Tobias has scheduled a meeting in Botswana for Monday to ascertain whether the W.H.O.'s approval process is rigorous enough. Dr. Lembit Rago, who leads the W.H.O. assessments, said he used 'absolutely the same principles' as the Food and Drug Administration, and borrowed his inspectors from regulatory agencies in Canada, France, Germany, Sweden and Switzerland. As soon as his office approved the Indian pills, he said, 'a very cold wind began to blow from the U.S.' 'It is no secret that Pharma is lobbying against us in a big way,' he said....

Subject: Re: Economic Plan to Battle AIDS From: raj To: Jennifer Date Posted: Thurs, Apr 01, 2004 at 04:51:53 (EST) Email Address: Not Provided Message: I would just like to say that I'm extremely excited that Canada, along with several multinational drug firms and the University of McGill formed a joint coallition in November and have committed billions to make accessable generic versions of these anti-aids drugs to poorer regions of africa. Do you believe it would be possible to get a similar partnership through congress (specifically the distribution of generic drugs)?

Subject: Re: Economic Plan to Battle AIDS From: Brent To: raj Date Posted: Fri, Apr 02, 2004 at 02:33:38 (EST) Email Address: Not Provided Message: I don't know if there are any multinational generic drug companies that operate in Canada. And it is McGill University, not the University of McGill. If they are generic drugs what do they need the University for anyways since generic drugs are simply copies of drugs that have already been invented? I am highly sceptical of these unsourced claims. What Canada is doing is passing Bill C-9 (http://www.parl.gc.ca/LEGISINFO/index.asp?Lang=E&Chamber=C&StartList=2&EndList=200&Session=12&Type=0&Scope=I&query=4094&List=toc-1) which will allow Canadian generic manufacturers to get compulsory licences to export patented pharmaceuticals to least developed countries under the WTO August 2003 decision. I wouldn't get too excited though, brand name pharmaceuticals have their hand firmly planted in the cookie jar (http://www.aidslaw.ca/Maincontent/issues/cts/patent-amend_submission.htm) The question is whether the US will take steps to implement the WTO decision and what those will be.

Subject: Generic Drugs From: Jennifer To: raj Date Posted: Thurs, Apr 01, 2004 at 15:41:11 (EST) Email Address: Not Provided Message: Do you believe it would be possible to get a similar partnership through congress (specifically the distribution of generic drugs)? No. There will be heavy pressure by drug companies to resist supplying generic drugs for AIDS patients in Africa. Regardless, we must push in this direction! Cheers for Canada!

Subject: Africans don't see Aids as major problem From: Mik To: Jennifer Date Posted: Thurs, Apr 01, 2004 at 16:57:17 (EST) Email Address: Not Provided Message: Africans don't see Aids as major problem --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- -- Ordinary Africans do not share experts' concerns and forecasts of the dire consequences of the Aids pandemic on the continent, according to the latest Afrobarometer survey. Institute for Democracy in South Africa (Idasa) public opinion service programme manager Bob Mattes said the survey was carried out in 15 African countries during 2002/03. Results of interviews with 23,000 adults showed many people, especially in east and southern Africa, had either lost family or friends to the pandemic, or suffered significant Aids-related burdens, such as caring for sick family members or orphans. 'Yet ordinary Africans do not share the experts' forecasts of the dire consequences of the pandemic,' he said. Africans were undecided about whether their governments should divert resources from other scarce priorities to fight Aids in their country. With some exceptions, such as South Africa, Namibia, and Botswana, African publics were not even convinced Aids constituted a public problem worthy of government attention. 'On a continent in which many people go without basic necessities, the relatively longer-term threat of Aids must stand in line behind more pressing, immediate concerns.' While people who had lost family or friends to the disease were more likely to cite Aids as an important problem, those who had not were less likely to cite the issue. Further, the public in poorer countries were also less likely to see Aids as an important issue, Mattes said. Turning to the survey's findings on democracy, he said two thirds of respondents said they supported democracy, and many rejected military rule and authoritarianism. However, democratic commitments were not fixed, with declining support in countries where governments had stayed in power the longest, and increased support where electoral change was more recent. The survey also found, in contrast to their positive views on political reform, that Africans believed the process of economic reform had made their lives worse, rather than better. Yet, as Africans endured the impacts of economic crises and subsequent adjustment, they did not believe simply and cynically that 'things fall apart'. On the contrary, survey data demonstrated 'that hope prevails', with most respondents fully expecting their children would lead better lives than themselves. Most people were willing to give economic reforms time to work, and societies displaying higher levels of hope for their children also expressed the greatest levels of patience with the economic reform process, he said. In fact, economic patience had even increased over the past four years. This suggested many Africans recognised that to move away from controlled and corrupt economies entailed 'short-term pain' that had to be endured before longer-term benefits were realised, Mattes said. Sapa

Subject: Re: Africans don't see Aids as major problem From: John To: Mik Date Posted: Thurs, Apr 01, 2004 at 17:30:47 (EST) Email Address: paul@passion.com Message: 'No. There will be heavy pressure by drug companies to resist supplying generic drugs for AIDS patients in Africa.' 'Abstract: Vatican City--John PAUL says 'no personal or social circumstance' could justify the use of contraceptives, including using condoms to protect against AIDS. In one of his toughest stands ever against artificial birth control, the Pope asserts that the Catholic church's ban must be respected becAUse it was divinely inspired. The U.S. Catholic Church issued a statement last year supporting public education in the use of condoms to prevent the spread of AIDS, but the Vatican rebuked the American bishops for not consulting Rome. The document is now being rewritten. The Pope has called for scientists to make greater efforts to develop natural birth control methods, the only types the Catholic church permits.' (Common sense?)

Subject: I Love New York From: Emma To: All Date Posted: Wed, Mar 31, 2004 at 15:58:55 (EST) Email Address: Not Provided Message: http://www.nytimes.com/2004/03/28/realestate/28COV.html Uptown Moving Upscale By JOSH BARBANEL WITH apartment prices rising across Manhattan, Vivian Ducat, a documentary filmmaker and creator of multimedia Web presentations, found the home of her dreams on the top floor of the Riviera, an aging but opulent building on Riverside Drive at West 157th Street, built in 1910 on a site where John James Audubon had an estate in the early 19th century. From the windows of her newly refinished oak-paneled dining room, Ms. Ducat can look out at the Empire State Building, and then she can wander down a long parquet hallway to her bedroom and watch the sun set behind the George Washington Bridge. The price was $650,000 for 1,600 square feet of space, including a butler's pantry and a maid's room. Only a decade ago this was a jarringly high sum for most Manhattan apartments, but today it is a fraction of what a similar apartment would cost farther downtown. At a time when the average two-bedroom apartment in the rest of Manhattan is selling for more than $1 million, price-numbed refugees like Ms. Ducat have been making the trek uptown to Harlem, Hamilton Heights, Washington Heights and Inwood, places once off the map of many brokers and buyers, to find more space at a lower cost, driving up prices of co-ops and condominiums there, too. A new study of a decade of apartment sales illustrates this trend. It found that prices in the parts of Manhattan dense with co-ops and condominiums — below 96th Street on the East Side and 116th Street on the West Side — have more than doubled from 1993, when the city was emerging from a real estate downturn, through 2003, with average prices rising from $444,000 to $1.06 million. But in the last four years, the study showed, the rate of the rise in these traditional Manhattan co-op and condo neighborhoods has slowed, while uptown prices have soared as more and more buyers, once deterred by abandonment, crime and longer commuting times have looked northward. Sales north of 96th Street on the East Side and 116th Street on the West Side, which currently account for 4 percent of apartment sales in Manhattan, are at their highest prices on record, though far below prices in other neighborhoods....

Subject: Re: I Love New York From: Jerry To: Emma Date Posted: Sat, Apr 03, 2004 at 02:44:00 (EST) Email Address: Not Provided Message: Sweet Jesus. My suggestion. Just. Move. Austin, Texas is great this time of year and there's a place on the north side that flies in cheese cake from the Carnegie Deli every morning. I bought a house in dowtown for 90K and it's appraised at 150K now...and that's a lot of equity!

Subject: NYT, Okrent, Corrections From: Paul G. Brown To: All Date Posted: Wed, Mar 31, 2004 at 14:33:51 (EST) Email Address: Not Provided Message: Dan Okrent, the Times' 'Public Editor', recently presented us with what seems to me to be an entirely reasonable set of guidelines about corrections in Op/Ed pieces. In it, he cites our man, and his nemesis/stalker, by name. I think PK should embrace this policy, and move aggressively and energetically to respond to Mr Luskin's fact-checking. Might I suggest the following as an opener: 'Correction: Mr Luskin has caught me in another of what he characterizes as my 'dozens of lies [and] distortions'. In the 3/24/04 column I wrote: He 'may have had a grudge to bear since he probably wanted a more prominent position,' declared Dick Cheney, who also says that Mr. Clarke was 'out of the loop.' In fact, Vice Pres. Cheney said ''Well, he wasn't -- he wasn't in the loop, frankly, on a lot of this stuff.' I apologize to anyone confused by the misquotation.' I think it would be a useful service. Anyone confused on the merits of the disputants would be enormously served by such candor.

Subject: Re: NYT, Okrent, Corrections From: Paul G. Brown To: Paul G. Brown Date Posted: Fri, Apr 02, 2004 at 19:51:28 (EST) Email Address: Not Provided Message: Geez. Don't trolls do irony? Krugman (who was 'in the loop') used the phrase 'out of the loop' in quotes, as you might do with an enigmatic cliche. Luskin calls the use of quotes here a 'lie'. Why? Because Cheney never uttered the words 'out of the loop'. Rather, the words Cheney is on tape as saying; 'wasn't in the loop'. 'On the merits', how can anyone take this seriously? If PK published the retractions Luskin demands it would make Luskin look stupid. 'A foolish consistency is the small mind of a hob-goblin.' - or something.

Subject: Re: NYT, Okrent, Corrections From: WRS To: Paul G. Brown Date Posted: Fri, Apr 02, 2004 at 09:11:49 (EST) Email Address: Not Provided Message: Paul, you are sincere in your effort to find the truth, but I can't say the same for your man PK. I will be seriously surprised if he issues any sort of retraction/correction. PK is a political partisan who wears the mask of an objective observer and knows what he is doing. The basis of his writing is to use crisp language with carefully selected facts to paint a narrow view of a broad picture. For PK, it's not about getting to the essential truth, which sometimes requires acknowledging facts that are contrary to one's preconveived view and, yes, even acknowledging error. It's part of PK's plan to build avid supporters and detractors in the quest to profit as a warrior in our increasingly heated ideological conflict. In this day and age, the good vs. evil view of the world sells; nuance and balance do not. Okrent understands PK is building a brand as an anti-Republican and is watching PK carefully. PK already has wrecked his own credibility in the broader arena, and Okrent wants to limit the damage his columnists inflict on the NYTimes.

Subject: WRS Another Moron From: WRS Another Moron To: WRS Date Posted: Fri, Apr 02, 2004 at 15:24:37 (EST) Email Address: Not Provided Message:

Subject: Re: NYT, Okrent, Corrections From: WRSUX To: WRS Date Posted: Fri, Apr 02, 2004 at 09:52:52 (EST) Email Address: Not Provided Message: Too many facts and tight logical arguments. I'm dizzy.

Subject: Suggestion for Bobby From: dan To: WRSUX Date Posted: Fri, Apr 02, 2004 at 10:21:42 (EST) Email Address: Not Provided Message: Bobby - One suggestion to improve this board. Would it be possible to set it up so that you have to register with an email address and login. You could generate a password and send it to the email address so when one logged into the board, their chosen identity would automatically be generated. That way we can possibly filter out some of the cowards on this board who change their identity when they resort to insults. Just an idea.

Subject: Re: Suggestion for Bobby From: Bobby To: dan Date Posted: Mon, Apr 05, 2004 at 16:43:46 (EDT) Email Address: robert@pkarchive.org Message: Absolutely not. I hate password protection of things in general, and I think this board's discourse is fine. I'll ban the IP for those who degrade the discourse, for which my standard is very loose, and I haven't seen this thus far.

Subject: IP addresses, Dan From: Econochick To: dan Date Posted: Fri, Apr 02, 2004 at 14:51:26 (EST) Email Address: Not Provided Message: You're right, Dan. What use is a discussion forum without dissenting opinions and freedom of speech? Worthless. I'm not sure if this is significant as I'm not a techie but the 'attackers' tend to have the same IP addresses - regardless of the name under which they post. There appear to be some people on this board whose entire vocabulary consists of the word 'troll'. Unfortunate

Subject: Only Trolls are a Problem From: Harold To: Econochick Date Posted: Fri, Apr 02, 2004 at 16:15:07 (EST) Email Address: Not Provided Message: Argument and dissent are not the issues. There are a series of posters who only want to attack Paul Krugman. They are indeed trolls and should be prevented from posting or ridiculed.

Subject: Re: Suggestion for Bobby From: ed To: dan Date Posted: Fri, Apr 02, 2004 at 11:23:43 (EST) Email Address: Not Provided Message: I'd like to second that. People should be able to jump onto the board, yell 'liberals suck', or 'Krugman's a left-wing lying freak', or 'I'd don't want any dissenting voices mixed with my corporate propaganda, thank you', without providing any evidence, and not suffer any abuse for it. God damn liberal freaks. Oh, sorry. I'll guess I'll get spammed, now.

Subject: Re: Suggestion for Bobby From: WRS To: dan Date Posted: Fri, Apr 02, 2004 at 10:35:39 (EST) Email Address: smithbone@yahoo.com Message: Dan, I don't see your email. My name is Bill, if that helps. If you want to email me send to smithbone@yahoo.com Do you care to offer something about the topic at hand?

Subject: I am a Troll Moron From: WRS To: WRS Date Posted: Fri, Apr 02, 2004 at 15:26:17 (EST) Email Address: Not Provided Message:

Subject: Re: Suggestion for Bobby From: dan To: WRS Date Posted: Fri, Apr 02, 2004 at 11:06:19 (EST) Email Address: Not Provided Message: Bill, I was referring to the WRSUX poster. Also the inevitable troll nonsense whenever a dissenting opinion is posted.

Subject: Dan, You are kidding right? From: David E... To: dan Date Posted: Fri, Apr 02, 2004 at 12:09:25 (EST) Email Address: Not Provided Message: Here is what SRS said - Read it carefully and please point out what about his opinion that is worthwhile. Please notice that with a lot of charm he insults PK. Also notice that he doesnt offer any facts. What kind of a reply does an insult like that deserve? Are we going to get any closer to world peace by talking to this guy? No, he is a troll. 'Paul, you are sincere in your effort to find the truth, but I can't say the same for your man PK. I will be seriously surprised if he issues any sort of retraction/correction. PK is a political partisan who wears the mask of an objective observer and knows what he is doing. The basis of his writing is to use crisp language with carefully selected facts to paint a narrow view of a broad picture. For PK, it's not about getting to the essential truth, which sometimes requires acknowledging facts that are contrary to one's preconveived view and, yes, even acknowledging error. It's part of PK's plan to build avid supporters and detractors in the quest to profit as a warrior in our increasingly heated ideological conflict. In this day and age, the good vs. evil view of the world sells; nuance and balance do not. Okrent understands PK is building a brand as an anti-Republican and is watching PK carefully. PK already has wrecked his own credibility in the broader arena, and Okrent wants to limit the damage his columnists inflict on the NYTimes. '

Subject: Can Dan Read? From: Doh! To: David E... Date Posted: Fri, Apr 02, 2004 at 17:55:52 (EST) Email Address: Not Provided Message: With these dolts, I wonder.

Subject: Re: Dan, You are kidding right? From: dan To: David E... Date Posted: Fri, Apr 02, 2004 at 16:26:22 (EST) Email Address: Not Provided Message: Not kidding. If you do not engage those who hold a different opinion than you, how are you going to sway them to your side. At least agree to disagree. Of course, this is the Unofficial Paul Krugman Archive which would lead one to beleive that the regulars are more than likely supporters. But I do agree with WRS, at least on those things that I know about such as: >PK is a political partisan who wears the mask of an objective observer and knows what he is doing. How can you disagree with that? >PK already has wrecked his own credibility in the broader arena ... True enough. What was once an incredibly insightful econmonist has turned into a political hack. Just my opinion.

Subject: Re: Dan, You are kidding right? From: David E... To: dan Date Posted: Fri, Apr 02, 2004 at 20:56:02 (EST) Email Address: Not Provided Message: I agree its a shame that Paul Krugman has to write these columns. Vote democratic and Paul can go back to doing economics.

Subject: Learn to Think and Read From: Opinion To: dan Date Posted: Fri, Apr 02, 2004 at 17:53:39 (EST) Email Address: Not Provided Message: Only with right wing dolts is there a problem.

Subject: Re: NYT, Okrent, Corrections From: WRSUX To: WRS Date Posted: Fri, Apr 02, 2004 at 09:51:37 (EST) Email Address: Not Provided Message: Too many facts and tight logical arguments. I'm dizzy.

Subject: forclosures From: byron To: All Date Posted: Tues, Mar 30, 2004 at 23:03:31 (EST) Email Address: bluefin76020@yahoo.com Message: I have been hearing on this board about Mr. Greenspan telling how the American households are such good shape. This man lives in a different world than the rest of us. I live here in the Dallas Ft Worth area and on the news today it was reported that in just three counties in this area there was over 3,000 home forclosures in one month. One of the reasons the report stated was low interest rates on mortages which made it too easy to get into a home. Also job layoffs was also another factor. We are talking homes in the two to three hundred thousand range. This is a 47% increase over last month. If this is happening here,i guess it is happening all over the country. So much for his stable households. Any take on this?

Subject: Re: forclosures From: Econochick To: byron Date Posted: Wed, Mar 31, 2004 at 08:58:20 (EST) Email Address: Not Provided Message: Byron, I don't know the stats for the country but you should keep in mind that regionally, you can have much worse stats than the country on average. For example, here in NYC our unemployment was over 7% when unemployment on average was around 6%. Also, one month of data does not mean that it's a trend. However, if it's happening in your 'neighborhood', so to speak, such stats can have a disheartening effect on local residents.

Subject: Mik. it's VRB Corp not Ballard From: Pete Weis To: All Date Posted: Tues, Mar 30, 2004 at 21:27:04 (EST) Email Address: Not Provided Message: Read your reply to my post in the archived section. Just wanted you to know I wasn't talking about Ballard. VRB Power Systems Inc. is an electrochemical energy storage company that has 'commercialized' the patented Vanadium Redox battery energy storage system. As their site states - 'it is particularly well suited to load leveling (peak shaving), electrical power arbitrage, grid stability enhancements, capital commercial buildings, production facilities, telecommunication operations, cellular radio sites and renewable resource generation such as wind farms.' The site further states - 'VRB is characterized by the lowest ecological impact of all energy storage technologies and is unlike most other conventional energy storage systems that rely on toxic substances such as lead, zinc or cadmium.' They are a very new company and have just entered into contracts with some utility companies which intend to use their storage systems. For anyone following new energy technologies, the big issue is the ability to store vast amounts of energies which are sometimes easily harnessed (water, solar and wind power) but do not supply an even on-demand amount of power which is what is needed when you turn on that microwave or hairdryer anytime you desire. This new technology is very promising and VRB Corp is the first, to my knowledge, to develop a system which is already on the market with customers lining up. With oil steadily climbing and blackouts as we experienced in the Northeast and Midwest recently, no wonder there is demand for VRB Corp's system. This is the challenge for America and the world. It might not be as sexy as launching a manned rocketship to Mars. But developing technologies like vanadium redox battery storage systems will do alot more for our bottom line with the added benefit of an improved environment.

Subject: Sorry From: Mik To: Pete Weis Date Posted: Thurs, Apr 01, 2004 at 17:04:58 (EST) Email Address: Not Provided Message: Sorry about that. I had not heard about VRB, but had instead heard all about the great 'Ballard' company and thought that you were refering to Ballard. I am impressed with the info you have on VRB. Still baby steps I guess. Have you read anything about Ballard? Hhhmm seems like Vancouver has a few of these impressive companies. Interestingly enough, by far and away, the best and cleanest energy source is dams. Vancouver, gets their electric power from a hydro-electric scheme. The power company of Vancouver is government controlled and sells electricity at what is probably the cheapest rates in the whole of North America. While I lived there, my hydro bill was around CND$12 a month. Unfortunately the big power companies are trying to buy out BC Hydro and raise the rates to make excess profit. I have been following the BC Hydro privatisation campaigne and I must admit that the crap that is going on there drives me to become a socialist.

Subject: I hear ya', Mik From: Econochick To: All Date Posted: Tues, Mar 30, 2004 at 19:48:07 (EST) Email Address: Not Provided Message: Well, Bobby cleaned the board before I posted, so a new thread it is. My apologies for the convoluted tale of war and such in my post about new technology out of war. It was late and I'd had a long day. I guess I'm saying that your observations are very interesting and that I haven't a clue about where all this is going. We need something new that is marketable coming from defense spending to shift the curve of our economy. And maybe your recent observations are a recognition of such a thing. If that's true, we are certainly headed for some sort of economic pop - how big is the question. If we have to manufacture it here it would be even better. As Nat pointed out in a previous post, not every country has the skilled labour necessary to do technical work. Which, BTW, is one reason hi-tech manufacturing is on the rise in the USA. But I am CLUELESS when it comes to that sort (or almost any) technology, so all I can say is that there is a probability of a great outcome but I wouldn't know what probability to assign. I still think it's a good point to bring up, though. As for your comments about Bush and his posse, I hear ya'. I don't care what Krugman thinks as I'm not inclined to substitute anyone else's judgement for my own. And besides, the realities of government are very different from the theory of opposition.

Subject: Re: I hear ya', Mik From: Mik To: Econochick Date Posted: Thurs, Apr 01, 2004 at 17:20:49 (EST) Email Address: Not Provided Message: Thanks Econochick...... yep tomorrow is Friday !!!!!

Subject: Economic Forecast From: Jennifer To: All Date Posted: Tues, Mar 30, 2004 at 16:20:54 (EST) Email Address: Not Provided Message: http://www.bloomberg.com/news/commentary/jberry.html# Fed Sees Good News in One Closely Watched Forecast: John Berry March 25 (Bloomberg) -- Federal Reserve officials, even the few who are skilled economic forecasters, pay constant attention to the ebb and flow of predictions from private economists with good track records. Among the most closely watched are the forecasts from Macroeconomic Advisers in St. Louis, the latest of which seems almost too good to be true: For the rest of this year and 2005, the U.S. should see the heady combination of strong economic growth, payroll job gains running about 200,000 a month, additional increases in corporate profits, significant gains in stock prices, only moderately rising long-term interest rates and continued very low inflation. The key message in the forecast for both policy makers and investors is that all those good things can coexist. Even payroll growth that strong need not trigger Fed action to raise its 1 percent target for overnight rates until early in 2005 because inflation will remain subdued, the Macroeconomic Advisers economists argued. Some investors are probably braced for a hit to the bond market whenever the Bureau of Labor Statistics announces the first monthly gain of 150,000 to 200,000 jobs. It will take several such months before Fed officials become convinced such gains are here to stay. In addition, even with 200,000 more jobs per month, it will take a long time to whittle away a significant amount of the slack in labor markets. Such job gains would be ``just enough to nudge the unemployment rate down to 5.5 percent by the end of this year and 4.9 percent by the fourth quarter of next year,'' Macroeconomic Advisers predicted. Keep in mind what has happened during the past five months. Payrolls increased by an average of about 60,000 a month, not enough to keep up with a normally growing population. ``There's every reason to think, in some conceptual sense, slack in the labor market is rising, even though we had this modest increase in jobs recently,'' J. Alfred Broaddus, president of the Richmond Federal Reserve Bank, said Monday in a Bloomberg interview. Similarly, in a speech also on Monday, Michael Moskow, president of the Chicago Federal Reserve, said, ``There's positive job growth. It's not at the rate that we would like; we'd like to see it closer to 150,000 jobs per month.'' ...

Subject: Re: Economic Forecast From: Pete Weis To: Jennifer Date Posted: Tues, Mar 30, 2004 at 22:11:19 (EST) Email Address: Not Provided Message: Well, this is pretty much the same forcast these economists (with 'good track records') have been handing out since they declared an end to our last recession - still waiting for it to materialize. You have to wonder how they come up with this stuff. Afterall, in 2003, we had the greatest amount of economic stimulus in history and still we had a rather poor Christmas, retail-wise. Employment has been doing very poorly in recent months - 1000 added jobs in December, 92000 in January, and only 21000 (almost all government hiring) in February. Ford's getting ready to lay off 35000. Now we have much of the stimulus wearing off and most of the benefits from tax rebates will be gone by mid 2004. Throw on top of all this increasing oil and gas prices which are truely begining to pinch US businesses. I ask - 'WHERE'S THE BEEF?' When was the last time a majority of economist gave a negative forecast? Jennifer, you knew you would get a response from me with regard to your post.

Subject: Jobs Jobs Jobs From: Jennifer To: Pete Weis Date Posted: Wed, Mar 31, 2004 at 12:37:40 (EST) Email Address: Not Provided Message: No argument. Unless there is a quick improvement in the job market, we could have serious problems. We will find out quickly. Again, the failure to confront OPEC on oil prices could well be a problem.

Subject: Re: Jobs Jobs Jobs From: Pete Weis To: Jennifer Date Posted: Thurs, Apr 01, 2004 at 00:03:29 (EST) Email Address: Not Provided Message: You are right Jennifer. The only effective way to gain any leverage with OPEC in the short term is to make energy conservation a government priority with government initiatives. This would give OPEC some worries about short term US oil demand. We can take some lessons from Japan in this regard. The only way to deal with OPEC long term is to develop energy alternatives to oil. With out these steps we will continue to be held hostage to our dependence on OPEC to provide support for our economy. It's quite a situation isn't it? On one side OPEC keeps charging more and more for the oil they sell us, which helps to run up our current account deficit. On the other side Japan and China loan us most of the money needed to fund our current account deficit. We need both to keep everything from falling apart and here we sit in the middle getting poorer and poorer.

Subject: Re: Jobs Jobs Jobs From: Econochick To: Pete Weis Date Posted: Fri, Apr 02, 2004 at 14:57:27 (EST) Email Address: Not Provided Message: Could not agree more with that action plan. We actually aren't getting poorer yet - but we will be soon if we don't get on the ball.

Subject: Infra-Structure and Efficiency? From: Jennifer To: Pete Weis Date Posted: Thurs, Apr 01, 2004 at 15:49:32 (EST) Email Address: Not Provided Message: Strong points! Where is the energy infra-structure we need? Where are the new refineries, the new pipelines, the new electric grid? Where is the push for efficiency and conservation that will thoroughly cut OPEC market control?

Subject: Re: Infra-Structure and Efficiency? From: Pete Weis To: Jennifer Date Posted: Thurs, Apr 01, 2004 at 20:31:38 (EST) Email Address: Not Provided Message: Right. What is our present national energy policy? I'm not sure we have much of one.

Subject: Board cleaning From: Bobby To: All Date Posted: Tues, Mar 30, 2004 at 16:14:24 (EST) Email Address: robert@pkarchive.org Message: I had to put everyone's past messages in the message board archive (link above). When the message board gets to 700 messages it begins to eat the oldest messages that are on it, and I didn't want that to happen. So, when it gets close to 700, I clean out the message board and put all the past messages in the archive. I'm really sorry for any interruption in conversations or inconvenience this has caused anybody. All your past messages and conversations on this board are here: http://www.pkarchive.org/MBArchive.html

Subject: Re: Board cleaning From: Mik To: Bobby Date Posted: Thurs, Apr 01, 2004 at 17:26:58 (EST) Email Address: Not Provided Message: Just a quick note to say thanks for this board (and site). I appreciate the effort.

Subject: Here here! From: Econochick To: Mik Date Posted: Fri, Apr 02, 2004 at 14:58:15 (EST) Email Address: Not Provided Message: Ditto!

Subject: Re: Board cleaning From: Pete Weis To: Mik Date Posted: Thurs, Apr 01, 2004 at 20:52:34 (EST) Email Address: Not Provided Message: I'd like to second Mik's thanks. This site is very well designed and I know it takes alot of hard work and time to maintain it with the amount of good information constantly updated here. Thanks!