Rogoff : But the problem is not only the numbers; it is one of credibility. Thanks to decades of low investment in statistical capacity, no one trusts the Greek government’s figures. Nor does Greece’s default history inspire confidence. As demonstrated in my recent book with Carmen Reinhart This Time is Different: Eight Centuries of Financial Folly , Greece has been in default roughly one out of every two years since it first gained independence in the nineteenth century. It's bad: Most Greeks are taking whatever action they can to avoid the government’s likely insatiable thirst for higher tax revenues, with wealthy individuals shifting money abroad and ordinary people migrating to the underground economy. Greece’s underground economy, estimated to be as large as 30% of GDP, is already one of Europe’s biggest, and it is growing by the day. In the case of Argentina, a pair of massive IMF loans in 2000 and 2001 ultimately only delayed the inevitable harsh adjustment, and made the country’s ultimate default even more traumatic. Like Argentina, Greece has a fixed exchange rate, a long history of fiscal deficits, and an even longer history of sovereign defaults
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We've talked about the dire situation in Greece here before , and now the situation has come to a head: Greece has chosen austerity, much to pleasure of EU officials and displeasure of Greeks , who begun massive strikes. Whenever I hear about a macroeconomic development in the EU, I turn to the indispensable A Fistful of Euros for comment. Edward Hugh doesn't disappoint : [Public statements from EU officials] have been widely interpreted in the international press as a “no” from Germany and France to any EU bailout of Greece.
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Another ship was seized by pirates yesterday, the third of the new year. The hijacking was of a North Korean flagged cargo ship that is owned by a Libyan company and was seized in the Gulf of Aden
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Nerdy joke-question of the day comes from Double-D: If you're doing a PhD in Applied Statistics, specialising in sampling theory, how many times do they make you write your dissertation? (This was the basis of an actual conversation between me and a colleague, where we were arguing over what I believed to be an entirely sensible generalisation from a single case. He pointed out that he had a degree in statistics and thus could be assumed to have expertise in the area; I countered that he only had a single degree in statistics and would have to take his finals at least 30 times before I could be confident he hadn't passed them by luck). Probably depends on whether you're a Bayesian or not.
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Thomas Friedman's authoritarian streak has been growing for awhile.
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“How long can the world’s biggest borrower remain the world’s biggest power?” Larry Summers Indeed. The problem, of course, is that it seems that our government can't balance the budget without the benefit of world peace and a dot.com bubble. The Times almost notices this when it writes, "Mr. Obama has published the 10-year numbers in part, it seems, to make the point that the political gridlock of the past few years, in which most Republicans refuse to talk about tax increases and Democrats refuse to talk about cutting entitlement programs, is unsustainable." I say almost notices this because my current research project indicates that this gridlock is hardly new. The exact same "gridlock" blocked deficit correction in the wake of the Vietnam escalation, in the wake of the Reagan military buildup, and in the wake of the 9/11 military buildup. In each case, everyone wants to reduce the deficit, they just disagree about how. Wilbur Mills blocked Johnson's proposed tax increase for a year in order to force Johnson to accept cuts in Great Society programs. And how soon we forget the congressional war of attrition that brought us Gramm-Rudman-Hollings
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These sentence s hurt my head: " By President Obama ’s own optimistic projections, American deficits will not return to what are widely considered sustainable levels over the next 10 years." Doesn't this mean that American deficits will remain at unsustainable levels for at least 10 years?How can unsustainable deficits persist for 10 or more years? And then after remaining at unsustainable levels for 10 years, deficits "start rising again sharply" in 2019-2020. Which I guess means that the deficits will be unsustainably small , and so naturally after 10 years they get bigger.
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So says Adam Martin , guest-blogging at Aid Watch: New research argues that empirical work on the Curse suffers from two interrelated problems. First, it uses dependence (the share of GDP from that resource) and calls it abundance (the stock of a resource in the ground). But dependence in turn depends on institutional quality—if you have sound institutions, natural resources take their place along other industries. If not, natural resources will by default constitute a large share of GDP because poor institutions stifle an advanced division of labor. When you look at cross-sectional data using dependence as a proxy for abundance, it will look like natural resources compromise institutional quality. That reliance on cross-sectional data is the second major problem. The Curse story does not claim that Nigeria is Britain plus oil, but rather that Nigeria is less democratic than Nigeria would be in the absence of oil. One way to get around this problem is to test whether oil makes country X less democratic using panel data with fixed country effects. That’s fancy econometric speak for taking into account other factors that might make country X more or less democratic—its history, institutions, culture, etc.
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In the market for a desktop replacement? Office Depot and Staples have two nearly identical models, each packing considerable horsepower, for cheap. Originally posted at The Cheapskate
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It just keeps getting better : In the article, translated on Metamute.org, leaders of the pirate groups say they’re willing to “transfer part of their loot captured from transnational boats and send it to Haiti.” ”The humanitarian aid to Haiti can not be controlled by the United States and European countries; they have no moral authority to do so. They are the ones pirating mankind for many years,” said the Somali spokesman. Somali pirate leaders say they have links around the world to help them ensure the delivery of aid without being detected by the armed forces of “enemy governments.”
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A couple of weeks ago I argued that having "too big to fail" banks might actually be a good thing, or at least that the alternatives might be worse. Here's a few more reasons why this makes sense. First, because without large banks it's impossible to deal with many bank failures. How? Well, if you cap bank size, then who's going to buy the banks that fail
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Yes, there was the pie-in-the-sky "double exports in 5 years" talk during the SOTU address, but in a meeting with House Republicans today Obama got a bit more specific : On the specific issue of trade, you're right, there are conflicts within and fissures within the Democratic Party. I suspect there are probably going to be some fissures within the Republican Party, as well. I mean, you know, if you went to some of your constituencies, they'd be pretty suspicious about it, new trade agreements, because the suspicion is somehow they're all one way. So part of what we've been trying to do is to make sure that we're getting the enforcement side of this tight, make sure that if we've got a trade agreement with China or other countries, that they are abiding with it -- they're not stealing our intellectual property or making sure that their non-tariff barriers are lowered even as ours are opened up. And my hope is, is that we can move forward with some of these trade agreements having built some confidence -- not just among particular constituency groups, but among the American people -- that trade is going to be reciprocal; that it's not just going to be a one-way street. You are absolutely right though, Peter, when you say, for example, South Korea is a great ally of ours. I mean, when I visited there, there is no country that is more committed to friendship on a whole range of fronts than South Korea. What is also true is that the European Union is about to sign a trade agreement with South Korea, which means right at the moment when they start opening up their markets, the Europeans might get in there before we do. So we've got to make sure that we seize these opportunities. I will be talking more about trade this year.
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I ventured into enemy territory today with other UNC doctoral students and faculty to attend the Interview Research in Political Science Conference at Duke University (co-hosted with UPenn). The conference was put together by Dr. Layna Mosley, Associate Professor of Polisci at UNC and features papers and presentations by Political Science scholars from across the country including Sarah Brooks , Cathie Jo Martin and Melani Cammett . The first day of the conference was really engaging and the papers were surprisingly practical and aimed at providing insights to grad students and faculty members that haven't had much previous exposure to interview research (both elite and non-elite) and the Institutional Review Board (IRB) approval process. The organizers and presenters are hoping to publish the individual papers in an edited volume that has the potential to be the authoritative text for interview methods in Political Science. Also really interesting: only one presenter and one discussant at the two-day event are male. The room was dominated by female scholars, which is rare for conferences or meetings in the discipline as males outnumber females by a hefty margin. There was much discussion and speculation amongst the presenters and attendees regarding why female scholars have utilized interview methods to a much greater extent than male scholars and whether female scholars are more open-minded regarding the use of multi-method approaches and are better than males at inter-personal communication and other characteristics common in most interviewers
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Ben Nelson gets it : Senator Ben Nelson was the 60th vote in the Senate on healthcare reform. He held out for what is now called the “Nebraska purchase,” a side-payment from the federal government to Nebraska to extend Medicaid. He also got rid of the public option. He compromised a bit on abortion so he did not get all his cake. There were a whole bunch of people who didn’t like the Nelson language – they only went along with because I could be the 60th vote. Leverage increases, exponentially, like the difference between a number 2 earthquake, 3 earthquake, 4 earthquake – goes up exponentially like that – your leverage goes like that at the very end…..if you are going to match Stupak, you match him at the end when you have the most leverage. Much more at the link, including the fact that Nelson's strategy contradicts game theory.
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In a fascinating article on American-born jihadists, Andrea Elliott looks up Robert Pape : America is now at a watershed. In the last year, at least two dozen men in the United States have been charged with terrorism-related offenses. They include Najibullah Zazi, the Afghan immigrant driver in Denver who authorities say was conspiring to carry out a domestic attack; David Coleman Headley, a Pakistani-American from Chicago who is suspected of helping plan the 2008 attacks in Mumbai; and the five young men from Virginia who, authorities say, sought training in Pakistan to fight American soldiers in Afghanistan. These cases have sent intelligence analysts scurrying for answers. The American suspects come from different backgrounds and socioeconomic strata, but they share much in common with Europe’s militants: they tend to be highly motivated, even gifted people who were reared in the West with one foot in the Muslim world. Others may see them as rigid or zealous, but they envision themselves as deeply principled, possessing what Robert Pape, a professor at the University of Chicago, calls “an altruism gone wildly wrong.” While their religious piety varies, they are most often bonded by a politically driven anger that has deepened as America’s war against terrorism endures its ninth year. That is just a short bit from a very engaging, in-depth article.
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Is this a market in everything? In Doha last month, CommGAP learned about the work of 5th Pillar, which has a unique initiative to mobilize citizens to fight corruption. In India, petty corruption is pervasive – people often face situations where they are asked to pay bribes for public services that should be provided free. 5th Pillar distributes zero rupee notes in the hopes that ordinary Indians can use these notes as a means to protest demands for bribes by public officials.
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McMegan passes along this tasty tidbit: Jay Cost of Real Clear Politics tweets that the Senate just voted for cloture on Ben Bernanke's confirmation, 77-23. Immediately thereafter came the tweet from Jim DeMint: "By confirming Bernanke, the Senate rubber-stamped a failed economic policy." That's right, Senator DeMint (R-SC); the Senate just rubber-stamped George W. Bush's failed economic policy. Would you be happier if Barack "Sgt. Socialist" Obama replaced Bernanke -- a conservative Republican (like you) who was nominated by a conservative Republican (like you) and confirmed by a Republican Senate (including you) -- with a Keynesian? Would you rather have Paul Krugman as Fed chairman, as Simon Johnson proposed ? Doesn't it give you pause that you and Bernie Sanders voted the same way on this confirmation? At least Sanders was voting out of conviction rather than misdirected partisanship. Bernanke is one of the foremost scholars on financial crises and how to get out of them, and he's performed as well as could be expected under the circumstances since Sept., 2008.
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In case you haven't been following some of the Italian dailies lately, Silvio Berlusconi, a constant source of entertainment on this blog (along with our friends Hugo, Evo and Kim - not good company) and one of Italy's richest men who also happens to be Prime Minister, recently had a hair transplant. This comes a month or so after being smacked in the face with a mini-statue, having his tooth chipped and his face all bruised up. Bill Gates, feeling that the mini-statue wasn't enough punishment for being a creepy old dude and the most vain politician on earth, went after Berlusconi today for the recent hair transplant in light of Italy's dismal foreign aid numbers. From FP: "In a clear reference to the notoriously image-conscious Berlusconi, Gates told Süddeutsche Zeitung: "Rich people spend a lot more money on their own problems, like baldness, than they do to fight malaria." Italy's foreign aid budget was approximately 0.11% of its GDP in 2009, one of the lowest figures among developed countries, and half of what it was even in the prior year
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Fed Chairman Ben Bernanke just cleared a major hurdle a few minutes ago when the Senate voted 77-23 to end debate (cloture vote) on his reappointment. This means that there should be a final up or down vote coming sometime this afternoon/evening. I'll throw up the final vote tally when it becomes available. UPDATE (4:24pm): Ben Bernanke has been confirmed by the US Senate 70-30. Interesting fact: Bernanke received more “no” votes than any nominee for Fed chairman since Paul Volcker was confirmed to a second term by a vote of 84 to 16 in 1983.
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Jeff Ely passes along a success story: The Econometric Society which publishes Econometrica, one of the top 4 acadmic journals in Economics has taken under its wing the fledgling journal Theoretical Economics and the first issue under the ES umbrella has just been published. TE has rapidly become among the top specialized journals for economic theory and it stands out in one very important respect. All of its content is and always will be freely available and publicly licensed. Bootstrapping a reputation for a new journal in a crowded field is by itself almost impossible
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